SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 5, 2000
CELESTIAL SEASONINGS, INC.
(Exact name of registrant as specified in charter)
Delaware 0-22018 84-1097571 0-22018 84-1097571
(State or other jurisdiction (Commission File Number) (IRS Employerof
of incorporation) Identification No.)
4600 Sleepytime Drive, Boulder, Colorado 80301-3292
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, includiing area code (303) 530-5300
Not Applicable
(Former name or former address, if changed since last report)
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Item 5. Other Events.
On March 5, 2000, the Registrant ("Celestial") entered into an Agreement and
Plan of Merger (the "Merger Agreement") with The Hain Food Group, Inc. ("Hain").
The Merger Agreement contemplates that following approval of the stockholders of
Celestial and Hain, a wholly-owned subsidiary of Hain will merge with and into
Celestial and Celestial will become a wholly-owned subsidiary of Hain. Under the
terms of the Merger Agreement, 1.265 shares of Hain common stock will be
exchanged for each outstanding share of Celestial common stock. The merger is
intended to qualify as a tax-free reorganization for federal income tax purposes
and as a "pooling of interests" for accounting purposes. Consummation of the
acquisition is subject to certain conditions, including the approval of the
stockholders of both Celestial and Hain and satisfaction of the applicable
requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
A copy of the Merger Agreement and two related voting agreements dated March 5,
2000 and the press release jointly issued by Celestial and Hain on March 6, 2000
are attached hereto as Exhibits and are incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
Item Exhibit
2.1 Agreement and Plan of Merger by and between The Hain Food Group, Inc.
and Celestial Seasonings, Inc. dated March 5, 2000.
10.1 Voting Agreement between Irwin D. Simon and Celestial Seasonings, Inc.
dated March 5, 2000.
10.2 Voting Agreement between Mo Siegel and The Hain Food Group, Inc. dated
March 5, 2000.
99.1 Press Release dated March 6, 2000.
* * * * *
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CELESTIAL SEASONINGS, INC.
(Registrant)
March 14, 2000 /s/ Marie A. Gambon
Marie A. Gambon
Vice President - Human Resources
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
2.1 Agreement and Plan of Merger by and between The Hain
Food Group, Inc. and Celestial Seasonings, Inc. dated
March 5, 2000
10.1 Voting Agreement between Irwin D. Simon and Celestial
Seasonings, Inc. dated March 5, 2000
10.2 Voting Agreement between Mo Siegel and the Hain Food Group,
Inc. dated March 5, 2000
99.1 Press release dated March 6, 2000
<PAGE>
Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
by and between
THE HAIN FOOD GROUP, INC.
AND
CELESTIAL SEASONINGS, INC.
dated as of
March 5, 2000
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TABLE OF CONTENTS
Page
ARTICLE I
MERGER
1.1 Formation of Hain Subsidiary.......................................2
1.2 The Merger.........................................................2
1.3 Closing............................................................2
1.4 Filing.............................................................2
1.5 Effective Time of the Merger.......................................2
ARTICLE II
CERTIFICATE OF INCORPORATION; BY-LAWS; DIRECTORS AND OFFICERS
2.1 Certificate of Incorporation.......................................3
2.2 By-Laws............................................................3
2.3 Directors and Officers of the Surviving Corporation................3
2.4 Board of Directors.................................................3
ARTICLE III
EFFECT OF THE MERGER; CONVERSION OF SHARES
3.1 Effect on Capital Stock............................................4
(a) Hain Subsidiary Common Stock..............................4
(b) Cancellation of Treasury Stock............................4
(c) Conversion of Company Shares..............................4
3.2 Exchange of Certificates...........................................5
(a) Exchange Agent............................................5
(b) Exchange Procedures.......................................5
(c) Exchange of Certificates..................................5
(d) Distributions with Respect to Unsurrendered Certificates..6
(e) No Further Rights in Company Shares.......................6
(f) No Fractional Shares......................................7
(g) Termination of Exchange Fund..............................7
(h) No Liability..............................................7
(i) Withholding Rights........................................8
(j) Lost Certificates.........................................8
(k) Anti-Dilution.............................................8
3.3 Stock Transfer Books...............................................8
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ARTICLE IV
CERTAIN EFFECTS OF THE MERGER
4.1 Effect of the Merger................................................8
4.2 Further Assurances..................................................9
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
5.1 Organization and Qualification..................................... .9
5.2 Capital Stock of Subsidiaries.......................................10
5.3 Capitalization.................. ...................................10
5.4 Authority Relative to This Agreement................................10
5.5 No Violations, etc..................................................11
5.6 Commission Filings; Consolidated Financial Statements...............12
5.7 Absence of Changes or Events........................................13
5.8 Joint Proxy Statement...............................................14
5.9 Litigation..........................................................14
5.10 Property and Leases.................................................15
5.11 Employment and Labor Contracts................ ............15
5.12 Labor Matters.......................................................15
5.13 Compliance with Law.................................................16
5.14 Board Recommendation................................................16
5.15 Intellectual Property...............................................16
5.16 Taxes...............................................................17
5.17 Employee Benefit Plans; ERISA.......................................19
5.18 Environmental Matters...............................................20
5.19 Disclosure..........................................................22
5.20 Absence of Undisclosed Liabilities..................................22
5.21 Finders or Brokers..................................................22
5.22 Rights Agreement....................................................23
5.23 Opinion of Financial Advisor........................................23
5.24 Insurance...........................................................23
5.25 Tax Free Reorganization.............................................23
5.26 Full Disclosure.....................................................23
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF HAIN
6.1 Organization and Qualification......................................24
6.2 Capital Stock of Subsidiaries.......................................24
6.3 Capitalization......................................................24
6.4 Authority Relative to This Agreement................................25
6.5 No Violations, etc..................................................25
6.6 Commission Filings; Financial Statements............................26
6.7 Absence of Changes or Events........................................27
6.8 Joint Proxy Statement...............................................28
6.9 Litigation..........................................................28
6.10 Property and Leases.................................................28
6.11 Labor Matters.......................................................29
6.12 Compliance with Law.................................................29
6.13 Board Recommendation................................................30
6.14 Intellectual Property...............................................30
6.15 Taxes...............................................................30
6.16 Disclosure..........................................................31
6.17 Absence of Undisclosed Liabilities..................................31
6.18 Finders or Brokers..................................................31
6.19 Opinion of Financial Advisor........................................31
6.20 Environmental Matters...............................................32
6.21 Employee Benefit Plans; ERISA.......................................33
6.22 Insurance...........................................................33
6.23 Tax Free Reorganization.............................................33
6.24 Full Disclosure.....................................................33
ARTICLE VII
CONDUCT OF BUSINESS OF
THE COMPANY AND HAIN PENDING THE MERGER
7.1 Conduct of Business of the Company Pending the Merger...............34
7.2 Conduct of Business of Hain Pending the Merger......................36
ARTICLE VIII
COVENANTS AND AGREEMENTS
8.1 Preparation of the Registration Statement; Stockholder Meeting......37
8.2 Letters and Consents of the Company's Accountants...................39
8.3 Letters and Consents of Hain's Accountants..........................39
8.4 Additional Agreements; Cooperation..................................39
8.5 Publicity...........................................................40
8.6 No Solicitation.....................................................41
8.7 Access to Information...............................................42
8.8 Notification of Certain Matters.....................................43
8.9 Resignation of Directors............................................43
8.10 Indemnification and Insurance.......................................43
8.11 Fees and Expenses...................................................43
8.12 Affiliates and Pooling Agreements...................................43
8.13 Nasdaq Listing......................................................44
8.14 Stockholder Litigation..............................................44
8.15 Company Employees...................................................44
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ARTICLE IX
CONDITIONS TO CLOSING
9.1 Conditions to Each Party's Obligation to Effect the Merger.........46
(a) Stockholder Approvals.....................................46
(b) HSR Act 47
(c) No Injunctions or Restraints..............................46
(d) Pooling of Interests; Consents............................46
(e) Registration Statement....................................46
(f) Nasdaq Listing............................................46
(g) Consents and Approvals....................................47
9.2 Conditions to Obligations of Hain..................................47
(a) Representations and Warranties............................47
(b) Performance of Obligations of the Company.................47
(c) No Material Adverse Change................................47
(d) Affiliate Letters.........................................47
(e) Tax Opinion...............................................47
9.3 Conditions to Obligations of the Company...........................48
(a) Representations and Warranties............................48
(b) Performance of Obligations of Hain and Hain Subsidiary....48
(c) No Material Adverse Change................................48
(d) Tax Opinion...............................................48
ARTICLE X
TERMINATION
10.1 Termination........................................................49
10.2 Effect of Termination..............................................50
ARTICLE XI
MISCELLANEOUS
11.1 Nonsurvival of Representations and Warranties......................52
11.2 Waiver.............................................................52
11.3 Notices............................................................52
11.4 Counterparts.......................................................53
11.5 Interpretation.....................................................53
11.6 Amendment..........................................................54
11.7 No Third Party Beneficiaries.......................................54
11.8 Governing Law......................................................54
11.9 Enforcement........................................................54
11.10 Entire Agreement...................................................54
11.11 No Recourse Against Others.........................................54
11.12 Validity...........................................................55
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DISCLOSURE SCHEDULES
Company Disclosure Schedules
Section
5.1. Organization and Qualification
5.2 Capital Stock of Subsidiaries
5.3. Capitalization
5.5 No Violations, Etc.
5.11. Employment and Labor Contracts
5.17 Employee Benefit Plans; ERISA
5.21. Finders or Brokers
7.1 Conduct of Business of the Company
8.4 Additional Agreements; Cooperation
Hain Disclosure Schedules
Section
6.2 Capital Stock of Subsidiaries
6.3 Capitalization
6.5 No Violations, Etc.
6.9 Litigation
6.11 Labor Matters
6.12 Compliance with Law
6.18 Finders or Brokers
EXHIBITS
EXHIBIT A - Amended and Restated Certificate of Incorporation
EXHIBIT B - Form of Company Affiliate Letter
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-1-
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of March 5, 2000, by
and between The Hain Food Group, Inc., a Delaware corporation ("Hain"), and
Celestial Seasonings, Inc., a Delaware corporation (the "Company").
W I T N E S S E T H :
WHEREAS, the Boards of Directors of each of Hain and the
Company have approved the merger (the "Merger") of a wholly owned subsidiary of
Hain, to be formed for the purpose thereof ("Hain Subsidiary"), with and into
the Company, 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");
WHEREAS, in connection with the Merger, the Board of Directors
of Hain has approved and recommended that Hain's stockholders approve a change
of its corporate name to The Hain Celestial Group, Inc.;
WHEREAS, in furtherance thereof it is proposed that each
outstanding share of common stock, par value $.01 per share, of the Company (the
"Company Common Stock," and together with the preferred share purchase rights
(the "Rights") issued pursuant to the Amended and Restated Rights Agreement,
dated as of November 11, 1998, by and between the Company and the Harris Trust
and Savings Bank, as rights agent (the "Rights Agreement"), associated with such
shares, the "Company Shares") will be converted into the right to receive the
Merger Consideration (as hereinafter defined) upon the terms and conditions set
forth in this Agreement;
WHEREAS, as inducements to the Company and Hain entering into
this Agreement and incurring the obligations set forth herein, and
contemporaneously with the execution and delivery of this Agreement, Irwin D.
Simon and Mo Siegel have agreed to enter into separate Voting Agreements
pursuant to which, among other things, Mr. Simon will vote all of his Hain
Common Stock (as hereinafter defined) in favor of this Agreement and the Merger,
and Mr. Siegel will vote all of his Company Common Stock in favor of this
Agreement and the Merger;
WHEREAS, for federal income tax purposes, it is intended that
the Merger shall qualify as a tax free reorganization within the meaning of
Section 368 of the Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, for accounting purposes, it is intended that the
Merger shall be accounted for as a "pooling of interests;" and
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements herein contained, the parties hereto, intending
to be legally bound, agree as follows:
ARTICLE I
MERGER
1.1 Formation of Hain Subsidiary. Hain shall form Hain
Subsidiary under the DGCL. Hain Subsidiary will be formed solely to facilitate
the Merger and the transactions contemplated thereby and will conduct no
business or activity other than in connection with the Merger. Hain will cause
Hain Subsidiary to execute and deliver a joinder to this Agreement pursuant to
Section 251 of the DGCL and will execute a written consent as the sole
stockholder of Hain Subsidiary, approving the execution, delivery and
performance of this Agreement by Hain Subsidiary.
1.2 The Merger. At the Effective Time (as hereinafter
defined), Hain Subsidiary shall be merged with and into the Company as provided
herein. Thereupon, the corporate existence of the Company, subject to Section
2.1 hereof, with all its purposes, powers and objects, shall continue unaffected
and unimpaired by the Merger, and the corporate identity and existence, with all
the purposes, powers and objects, of Hain Subsidiary shall be merged with and
into the Company and the Company as the corporation surviving the Merger
(hereinafter sometimes referred to as the "Surviving Corporation") shall
continue its corporate existence under the laws of the State of Delaware. The
name of the Surviving Corporation shall be Celestial Seasonings, Inc.
1.3......Closing. The closing of the Merger (the "Closing")
will take place at 10:00 a.m., New York time, on the later of July 1, 2000 or
the date that is no later than the second business day after satisfaction of the
conditions set forth in Article IX, unless another time or date is agreed to in
writing by the parties hereto (the "Closing Date"). The Closing will be held at
the offices of Cahill Gordon & Reindel, 80 Pine Street, New York, New York,
unless another place is agreed to in writing by the parties hereto.
1.4 Filing. Subject to the provisions of this Agreement, on
the Closing Date, the parties hereto will cause to be filed with the office of
the Secretary of State of the State of Delaware, a certificate of merger (the
"Certificate of Merger"), in such form as required by, and executed in
accordance with, the relevant provisions of the DGCL.
1.5 Effective Time of the Merger. The Merger shall be
effective at the time that the filing of the Certificate of Merger, or at such
later time specified in such Certificate of Merger, which time is herein
sometimes referred to as the "Effective Time" and the date thereof is herein
sometimes referred to as the "Effective Date."
ARTICLE II
CERTIFICATE OF INCORPORATION; BY-LAWS; DIRECTORS AND OFFICERS
2.1 Certificate of Incorporation. The Certificate of
Incorporation of the Company shall be amended and restated, effective at the
Effective Time, in the form set forth in Exhibit A hereto. The Certificate of
Incorporation of the Company, as so amended and restated, shall be the
Certificate of Incorporation of the Surviving Corporation.
2.2 By-Laws. The By-Laws of Hain Subsidiary shall be the
By-Laws of the Surviving Corporation until the same shall thereafter be altered,
amended or repealed in accordance with the laws of the State of Delaware, the
Certificate of Incorporation of the Surviving Corporation or said By-Laws.
2.3 Directors and Officers of the Surviving Corporation. The
directors and officers of Hain Subsidiary immediately prior to the Effective
Time shall be the directors and officers of the Surviving Corporation, each to
hold office in accordance with the Certificate of Incorporation and By-laws of
the Surviving Corporation and until their respective successors are duly elected
or appointed and qualified.
2.4 Board of Directors of Hain. (a) Composition. After the
Effective Time, the Board of Directors of Hain (the "Hain Board") shall be
comprised of no less than eleven directors, including (i) six directors to be
designated by Hain consistent with past practices, (ii) one director to be
designated by Earth's Best, Inc., or its successor ("EB") and one director to be
jointly designated by Hain and EB, each in accordance with a certain Investor's
Agreement dated September 24, 1999 by and among Hain, EB and Irwin D. Simon and
(iii) three directors to be designated as set forth in Section 2.4(b).
(b) Company Designees. Hain agrees to take all action
necessary such that from and after the Effective Time until the next
regularly scheduled meeting of Hain's stockholders, the Hain Board
shall include (i) three directors designated by the Company (the
"Company Designees") and thereafter to use commercially reasonable
efforts to cause such nominees designated by the Company to be included
in each slate of proposed directors put forth by Hain to its
stockholders and recommended for election in any proxy solicitation
materials disseminated by Hain; provided, however, that the identity of
any Company Designees other than (i) Mo Seigel, (ii) Marina Hahn and
(iii) either of Ronald V. Davis or Gregg A. Ostrander shall be
reasonably acceptable to Hain. Upon the death, resignation or removal
of any Company Designee, Hain will use its best efforts to have the
vacancy filled by a subsequent designee recommended by the remaining
Company Designees then serving on the Hain Board (subject to the
preceding sentence). Hain shall use commercially reasonable efforts to
nominate the Company Designees for a period of two years from the
Effective Time. The Company Designees shall be fully covered by any
directors' and officers' liability insurance maintained from time to
time on the same terms as the other members of the Hain Board, shall be
entitled to the benefit of any indemnification arrangements applicable
to the other members of the Hain Board and shall have the right to
receive all fees paid and options and other awards granted and expenses
reimbursed to non-employee directors generally.
(c) Chairman and Vice-Chairman of the Hain Board. Hain agrees
to take all action necessary such that from and after the Effective
Time Irwin D. Simon shall be elected as the Chairman and Mo Seigel
shall be elected as the Vice-Chairman of the Board of Directors of
Hain, each to serve in accordance with Hain's certificate of
incorporation and by-laws.
ARTICLE III
Effect of the Merger; CONVERSION OF SHARES
3.1 Effect on Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of any holders of
Company Shares or any shares of capital stock of Hain Subsidiary:
(a) Hain Subsidiary Common Stock. Each share of capital stock
of Hain Subsidiary issued and outstanding immediately prior to the
Effective Time shall be converted into one validly issued, fully paid
and nonassessable share of common stock of the Surviving Corporation.
(b) Cancellation of Treasury Stock. Each Company Share
(including the associated Rights) that is owned by the Company or by
any subsidiary of the Company shall automatically be canceled and
retired and shall cease to exist, and no shares of common stock, par
value $.01 per share, of Hain ("the "Hain Common Stock"), cash or other
consideration shall be delivered in exchange therefor.
(c) Conversion of Company Shares. Subject to Section 3.2(e),
each issued and outstanding Company Share (including the associated
Rights) (other than shares to be canceled in accordance with Section
3.1(b)) (collectively, the "Exchanging Company Shares") shall be
converted into the right to receive 1.265 (the "Exchange Ratio") shares
of Hain Common Stock (the "Merger Consideration"). As of the Effective
Time, all such Exchanging Company Shares shall no longer be outstanding
and shall automatically be canceled and retired and shall cease to
exist, and each holder of a certificate representing any Exchanging
Company Shares shall cease to have any rights with respect thereto,
except the right to receive the Merger Consideration and any cash in
lieu of fractional shares of Hain Common Stock to be issued or paid in
consideration therefor upon surrender of such certificate in accordance
with Section 3.2, without interest.
3.2 Exchange of Certificates.
(a) Exchange Agent. From and after the Effective Time, Hain
shall make available to Continental Stock Transfer & Trust Company or
such other bank or trust company designated by Hain (the "Exchange
Agent"), for the benefit of the holders of Company Shares, for exchange
in accordance with this Article III through the Exchange Agent,
certificates evidencing a sufficient number of shares of Hain Common
Stock issuable to holders of Company Shares to satisfy the requirements
set forth in Section 3.1 relating to Merger Consideration (such shares
of Hain Common Stock, together with any cash deposited with the
Exchange Agent relating to Additional Payments (as hereinafter defined)
being hereinafter referred to as the "Exchange Fund"). As promptly as
practicable after the Effective Time, Hain shall cause the Exchange
Agent to deliver the Merger Consideration and Additional Payments, if
any, contemplated to be issued pursuant to Section 3.1 out of the
Exchange Fund in accordance with the procedures specified in this
Section 3.2. Except as contemplated by Section 3.2(g) hereof, the
Exchange Fund shall not be used for any other purpose.
(b) Exchange Procedures. As promptly as practicable after the
Effective Time, Hain shall cause the Exchange Agent to mail to each
record holder of a certificate or certificates which immediately prior
to the Effective Time represented outstanding Company Shares (the
"Certificates") (i) a letter of transmittal (which shall be in
customary form and shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon proper
delivery of the Certificates to the Exchange Agent) and (ii)
instructions for use in effecting the surrender of the Certificates in
exchange for the Merger Consideration.
(c) Exchange of Certificates. Upon surrender to the Exchange
Agent of a Certificate for cancellation, together with such letter of
transmittal, duly executed and completed in accordance with the
instructions thereto, and such other documents as may be reasonably
required pursuant to such instructions, the holder of such Certificate
shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of Hain Common Stock, if any,
constituting Merger Consideration to which such holder is entitled
pursuant to this Article III (including any cash in lieu of any
fractional shares of Hain Common Stock to which such holder is entitled
pursuant to Section 3.2(f) and any dividends or other distributions to
which such holder is entitled pursuant to Section 3.2(d) (together, the
"Additional Payments")), and the Certificate so surrendered shall
forthwith be canceled. In the event of a transfer of ownership of
Company Shares which is not registered in the transfer records of the
Company, the applicable Merger Consideration and Additional Payments,
if any, may be issued to a transferee if the Certificate representing
such Company Shares is presented to the Exchange Agent, accompanied by
all documents required to evidence and effect such transfer and by
evidence that any applicable stock transfer taxes have been paid. Until
surrendered as contemplated by this Section 3.2, each Certificate shall
be deemed at all times after the Effective Time to represent only the
right to receive upon such surrender the applicable Merger
Consideration with respect to the Company Shares formerly represented
thereby and Additional Payments, if any.
(d) Distributions with Respect to Unsurrendered Certificates.
No dividends or other distributions declared or made after the
Effective Time with respect to Hain Common Stock with a record date
after the Effective Time shall be paid to the holder of any
unsurrendered Certificate with respect to Hain Common Stock the holder
thereof is entitled to receive upon surrender thereof, and no cash
payment in lieu of any fractional shares shall be paid to any such
holder pursuant to Section 3.2(f), until the holder of such Certificate
shall surrender such Certificate. Subject to the effect of escheat, tax
or other applicable Laws, following surrender of any such Certificate,
there shall be paid to the holder of the certificates representing
whole shares of Hain Common Stock issued in exchange therefor, without
interest, (i) promptly, the amount of any cash payable with respect to
fractional Hain Common Stock to which such holder is entitled pursuant
to Section 3.2(f) and the amount of dividends or other distributions
with a record date after the Effective Time and theretofore paid with
respect to such whole shares of Hain Common Stock, and (ii) at the
appropriate payment date, the amount of dividends or other
distributions, with a record date after the Effective Time but prior to
surrender and a payment date occurring after surrender, payable with
respect to such whole Hain Common Stock. After the Effective Time, each
outstanding Certificate which theretofore represented Company Shares
shall, until surrendered for exchange in accordance with this Section
3.2, be deemed for all purposes to evidence ownership of the number of
shares of Hain Common Stock into which the Company Shares (which, prior
to the Effective Time, were represented thereby) shall have been so
converted.
(e) No Further Rights in Company Shares. At the Effective Time
all outstanding Company Shares, by virtue of the Merger and without any
action on the part of the holders thereof, shall no longer be
outstanding and shall be canceled and retired and shall cease to exist,
and each holder of a certificate representing any such Company Shares
shall thereafter cease to have any rights with respect to such Company
Shares, except the right to receive the Merger Consideration for such
Company Shares. All Hain Common Stock constituting Merger Consideration
issued upon conversion of the Company Shares in accordance with the
terms hereof (including any cash paid pursuant to Section 3.2(d) or
(f)) shall be deemed to be validly issued, fully paid and nonassessable
and to have been issued or paid, as the case may be, in full
satisfaction of all rights pertaining to such Company Shares.
(f) No Fractional Shares. No fractional shares of Hain Common
Stock shall be issued in the Merger. In lieu of any such fractional
shares, each holder of Company Shares, who would otherwise have been
entitled to a fraction of Hain Common Stock pursuant to this Article
III, will be entitled to receive an amount of cash rounded to the
nearest cent (without interest) determined by multiplying the fair
market value of a share of Company Common Stock (as determined by the
Company's Board of Directors at the Effective Time) by the fractional
share interest to which such holder would otherwise have been entitled.
The parties acknowledge that payment of the cash consideration in lieu
of issuing fractional shares was not separately bargained for
consideration but merely represents a mechanical rounding for purposes
of simplifying the corporate and accounting complexities which would
otherwise be caused by the issuance of fractional shares.
(g) Termination of Exchange Fund. Any portion of the Exchange
Fund which remains undistributed to the holders of Company Shares for
one year after the Effective Time shall be delivered to Hain (who shall
thereafter act as Exchange Agent), upon demand, and any holders of
Company Shares who have not theretofore complied with this Article III
shall thereafter look only to Hain for the applicable Merger
Consideration and any Additional Payments to which they are entitled.
To the extent permitted by applicable law, any portion of the Exchange
Fund remaining unclaimed by holders of Company Shares as of a date
which is immediately prior to such time as such amounts would otherwise
escheat to or become property of any government entity shall, on the
third anniversary of the Effective Date and to the extent permitted by
applicable law, become the property of Hain free and clear of any
claims or interest of any person previously entitled thereto.
(h) No Liability. None of the Exchange Agent, Hain or the
Surviving Corporation shall be liable to any holder of Certificates for
any shares of Hain Common Stock (or dividends or distributions with
respect thereto), or cash delivered to a public official pursuant to
any abandoned property, escheat or similar law.
(i) Withholding Rights. Each of the Surviving Corporation and
Hain shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of
Certificates such amounts as it is required to deduct and withhold with
respect to the making of such payment under the Code, or any provision
of state, local or foreign tax law. To the extent that amounts are so
withheld by the Surviving Corporation or Hain, as the case may be, such
withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the holder of the Certificates in respect of which
such deduction and withholding was made by the Surviving Corporation or
Hain, as the case may be.
(j) Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact
by the person claiming such Certificate to be lost, stolen or destroyed
and, if required by the Surviving Corporation or Hain, the posting by
such person of a bond, in such reasonable amount as the Surviving
Corporation or Hain may direct, as indemnity against any claim that may
be made against it with respect to such Certificate, the Exchange Agent
will issue in exchange for such lost, stolen or destroyed Certificate
the applicable Merger Consideration and Additional Payments, if any.
(k) Anti-Dilution. The Exchange Ratio shall be adjusted to
reflect fully the effect of any stock split, reverse split, stock
dividend (including any dividend or distribution of securities
convertible into Company Shares or Hain Common Stock, as applicable),
extraordinary dividend, reorganization, recapitalization or any other
like change with respect to Company Shares or Hain Common Stock
occurring after the date hereof and prior to the Effective Time.
References to the Exchange Ratio elsewhere in this Agreement shall be
deemed to refer to the Exchange Ratio as it may have been adjusted
pursuant to this Section 3.2(k).
3.3 Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed and there shall be no further
registration of transfers of Company Shares thereafter on the records of the
Company. On or after the Effective Time, any Certificates presented to the
Exchange Agent or Hain for any reason shall be converted into the applicable
Merger Consideration and Additional Payments, if any.
ARTICLE IV
CERTAIN EFFECTS OF THE MERGER
4.1 Effect of the Merger. The effects and consequences of the
Merger shall be as set forth in Section 259 of the DGCL. Without limiting the
generality of the foregoing on and after the Effective Time and pursuant to the
DGCL, the Surviving Corporation shall possess all the rights, privileges,
immunities, powers, and purposes of each of Hain Subsidiary and the Company; all
the property, real and personal, including subscriptions to shares, causes of
action and every other asset (including books and records) of Hain Subsidiary
and the Company shall vest in the Surviving Corporation without further act or
deed; and the Surviving Corporation shall assume and be liable for all the
liabilities, obligations and penalties of Hain Subsidiary and the Company;
provided, however, that this shall in no way impair or affect the
indemnification obligations of any party pursuant to the indemnification
provisions of this Agreement. No liability or obligation due or to become due
and no claim or demand for any cause existing against either Hain Subsidiary or
the Company, or any stockholder, officer or director thereof, shall be released
or impaired by the Merger, and no action or proceeding, whether civil or
criminal, then pending by or against Hain Subsidiary or the Company, or any
stockholder, officer or director thereof, shall abate or be discontinued by the
Merger, but may be enforced, prosecuted, settled or compromised as if the Merger
had not occurred, and the Surviving Corporation may be substituted in any such
action or proceeding in place of Hain Subsidiary or the Company.
4.2 Further Assurances. If at any time after the Effective
Time, any further action is necessary or desirable to carry out the purposes of
this Agreement and to vest the Surviving Corporation with full right, title and
possession to all assets, property, rights, privileges, powers and franchises of
either of Hain Subsidiary or the Company, the officers of such corporation are
fully authorized in the name of their corporation or otherwise to take, and
shall take, all such further action.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Hain as follows:
5.1 Organization and Qualification. 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 power and authority to own, lease and operate its properties
and to carry on its business as now being conducted. Each of the Company and its
subsidiaries is duly qualified as a foreign corporation to do business, and is
in good standing, in each jurisdiction where the character of its properties
owned or leased or the nature of its activities makes such qualification
necessary, except for failures to be so qualified or in good standing which
would not, individually or in the aggregate, have a material adverse effect on
the general affairs, management, business, operations, condition (financial or
otherwise) or prospects of the Company and its subsidiaries, taken as a whole (a
"Company Material Adverse Effect"). Section 5.1 of the Disclosure Schedule sets
forth, with respect to the Company and each of its subsidiaries, each of the
jurisdictions in which they are incorporated or qualified or otherwise licensed
as a foreign corporation to do business. Neither the Company nor any of its
subsidiaries is in violation of any of the provisions of its certificate or
articles of incorporation or organization (or other applicable charter document)
or by-laws. The Company has delivered to Hain accurate and complete copies of
the certificate or articles of incorporation or organization (or other
applicable charter document) and by-laws, as currently in effect, of each of the
Company and its subsidiaries.
5.2 Capital Stock of Subsidiaries. The only direct or indirect
subsidiaries of the Company are those listed in Section 5.2 of the Disclosure
Schedule. The Company is directly or indirectly the record and beneficial owner
of all of the outstanding shares of capital stock of each of its subsidiaries,
and all of such shares so owned by the Company are validly issued, fully paid
and nonassessable and are owned by it free and clear of any claim, lien or
encumbrance of any kind with respect thereto.
5.3 Capitalization. The authorized capital stock of the
Company consists of 15,000,000 shares of Company Common Stock and 1,000,000
shares of preferred stock, par value $.01 per share. As of March 1, 2000,
8,412,197 shares of Company Common Stock are issued and outstanding, 17,800
shares are issued and held as treasury shares and no shares of preferred stock
are issued and outstanding. All of such issued and outstanding shares of Company
Common Stock are validly issued, fully paid and nonassessable and free of
preemptive rights. Section 5.3 of the Disclosure Schedule sets forth all
outstanding options, warrants or other rights, whether or not exercisable, to
acquire any shares of Company Common Stock or any other equitable interest in
the Company, and, in the case of outstanding options, identifies the Company
stock plan or other Company benefit plan under which such options were granted.
Except as set forth in Section 5.3 of the Disclosure Schedule, and except with
respect to plans and agreements described in Section 8.15(e) of this Agreement,
the Company's obligations under the Rights Agreement and the transactions
contemplated by this Agreement, neither the Company nor any of its subsidiaries
is a party to any agreement or understanding, oral or written, which (a) grants
an option, warrant or other right to acquire shares of Company Common Stock or
any other equitable interest in the Company, (b) grants a right of first refusal
or other such similar right upon the sale of Company Common Stock, or (c)
restricts or affects the voting rights of Company Common Stock. There is no
liability for dividends declared or accumulated but unpaid with respect to any
Company Common Stock.
5.4 Authority Relative to This Agreement. The Company has
corporate power and authority to execute and deliver this Agreement and to
consummate the Merger and other transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the Merger and other
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of the Company and no other corporate proceedings on the part
of the Company are necessary to authorize this Agreement or to consummate the
Merger or other transactions contemplated hereby (other than as contemplated by
this Agreement, including the approval of the Company's stockholders pursuant to
the DGCL). This Agreement has been duly and validly executed and delivered by
the Company and, assuming the due authorization, execution and delivery hereof
by Hain, constitutes a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except to the extent that its
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of creditors'
rights generally or by general equitable or fiduciary principles.
5.5 No Violations, etc.
------------------
(a) Assuming that all filings, permits, authorizations,
consents and approvals or waivers thereof have been duly made or
obtained as contemplated by Section 5.5(b) hereof, except as set forth
in Section 5.5 of the Disclosure Schedule, neither the execution and
delivery of this Agreement by the Company nor the consummation of the
Merger or other transactions contemplated hereby nor compliance by the
Company with any of the provisions hereof will (i) violate, conflict
with, or result in a breach of any provision of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination or suspension
of, or accelerate the performance required by, or result in a right of
termination or acceleration under, or result in the creation of any
lien, security interest, charge or encumbrance upon any of the
properties or assets of the Company or any of its subsidiaries under,
any of the terms, conditions or provisions of (x) their respective
certificate or articles of incorporation or organization or by-laws,
(y) any note, bond, mortgage, indenture or deed of trust, or (z) any
license, lease, agreement or other instrument or obligation to which
the Company or any such subsidiary is a party or to which they or any
of their respective properties or assets may be subject, or (ii)
violate any judgment, ruling, order, writ, injunction, decree, statute,
rule or regulation applicable to the Company or any of its subsidiaries
or any of their respective properties or assets, except, in the case of
clauses (i)(z) and (ii) above, for such violations, conflicts,
breaches, defaults, terminations, suspensions, accelerations, rights of
termination or acceleration or creations of liens, security interests,
charges or encumbrances which would not, individually or in the
aggregate, either have a Company Material Adverse Effect or materially
impair the Company's ability to consummate the Merger or other
transactions contemplated hereby.
(b) No filing or registration with, notification to and no
permit, authorization, consent or approval of any governmental entity
(including, without limitation, any federal, state or local regulatory
authority or agency) is required by the Company in connection with the
execution and delivery of this Agreement or the consummation by the
Company of the Merger or other transactions contemplated hereby, except
(i) in connection with the applicable requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), (ii) the filing of the Certificate of Merger, (iii) the
approval of the Company's stockholders pursuant to the DGCL, (iv)
filings with the Securities and Exchange Commission (the "SEC") and (v)
such other filings, registrations, notifications, permits,
authorizations, consents or approvals the failure of which to be
obtained, made or given would not, individually or in the aggregate,
either have a Company Material Adverse Effect or materially impair the
Company's ability to consummate the Merger or other transactions
contemplated hereby.
(c) As of the date hereof, none of the Company or any of its
subsidiaries is in violation of or default under (x) its respective
certificate or articles of incorporation or organization or by-laws,
(y) any note, bond, mortgage, indenture or deed of trust, or (z) any
license, lease, agreement or other instrument or obligation to which
the Company or any such subsidiary is a party or to which they or any
of their respective properties or assets may be subject, except, in the
case of clauses (y) and (z) above, for such violations or defaults
which would not, individually or in the aggregate, either have a
Company Material Adverse Effect or materially impair the Company's
ability to consummate the Merger or other transactions contemplated
hereby.
5.6 Commission Filings; Consolidated Financial Statements. (a)
The Company has filed all required forms, reports and documents with the SEC
since September 30, 1996, including, in the form filed with the SEC, together
with any amendments thereto, (i) its Annual Report on Form 10-K for the fiscal
year ended September 30, 1999 (the "Company 10-K"), (ii) all proxy statements
relating to the Company's meetings of stockholders (whether annual or special)
held since September 30, 1999 (the "Company Current Proxies"), (iii) its
Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 1999
(the "Company December 1999 10-Q" and, together with the Company 10-K and the
Company Current Proxies, the "Company Current SEC Reports") and (iv) all other
reports or registration statements filed by the Company with the SEC since
September 30, 1996 (collectively, the "Company SEC Reports") with the SEC, all
of which complied when filed in all material respects with all applicable
requirements of the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the "Securities Act") and the Exchange Act
of 1934, as amended, and the rules and regulations promulgated thereunder (the
"Exchange Act"). The audited consolidated financial statements and unaudited
consolidated interim financial statements of the Company and its subsidiaries
included or incorporated by reference in such Company SEC Reports were prepared
in accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and present fairly, in all material respects, the financial
position and results of operations and cash flows of the Company and its
subsidiaries on a consolidated basis at the respective dates and for the
respective periods indicated (and in the case of all such financial statements
that are interim financial statements, contain all adjustments so to present
fairly). Except to the extent that information contained in any Company SEC
Report was revised or superseded by a later filed Company SEC Report, none of
the Company SEC Reports contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The Company has provided to Hain copies of all
other correspondence sent to or received from the SEC by the Company and its
subsidiaries since September 30, 1996 (other than cover letters).
(b) The Company has provided to Hain true and complete copies
of the unaudited consolidated balance sheet of the Company at February
19, 2000 (the "February Balance Sheet") and the unaudited consolidated
statements of income, stockholders' equity and cash flow of the Company
for the period from December 26, 1999 through February 19, 2000
(collectively, the "February Financials"). The February Financials
fairly present, in all material respects, the financial position of the
Company at February 19, 2000, and the results of operations of the
Company for the period then ended, and have been prepared in accordance
with generally accepted accounting principles applied on a consistent
basis, except that such financial statements will not include any
footnote disclosures that might otherwise be required to be included by
generally accepted accounting principles, and shall also be subject to
normal non-recurring year-end audit adjustments. The February Balance
Sheet reflects all liabilities of the Company, whether absolute,
accrued or contingent, as of the date thereof of the type required to
be reflected or disclosed on a balance sheet prepared in accordance
with generally accepted accounting principles (applied in a manner
consistent with the notes of the financial statements included in the
Company 10-K).
5.7 Absence of Changes or Events. Except as set forth in
the Company Current SEC Reports, since the date of the Company 10-K:
(a) there has been no material adverse change, or any
development involving a prospective material adverse change, in the
general affairs, management, business, operations, condition (financial
or otherwise) or prospects of the Company and its subsidiaries taken as
a whole;
(b) there has not been any direct or indirect redemption,
purchase or other acquisition of any shares of capital stock of the
Company or any of its subsidiaries, or any declaration, setting aside
or payment of any dividend or other distribution by the Company or any
of its subsidiaries in respect of its capital stock;
(c) except in the ordinary course of its business and
consistent with past practice, neither the Company nor any of its
subsidiaries has incurred any indebtedness for borrowed money, or
assumed, guaranteed, endorsed or otherwise as an accommodation become
responsible for the obligations of any other individual, firm or
corporation, or made any loans or advances to any other individual,
firm or corporation;
(d) there has not been any change in the financial or the
accounting methods, principles or practices of the Company or
its subsidiaries;
(e) except in the ordinary course of business and for amounts
which are not material, there has not been any revaluation by the
Company or any of its subsidiaries of any of their respective assets,
including, without limitation, writing down the value of inventory or
writing off notes or accounts receivables;
(f) there has not been any damage, destruction or loss,
whether covered by insurance or not, except for such as would not,
individually or in the aggregate, have a Company Material Adverse
Effect; and
(g) there has not been any agreement by the Company or any of
its subsidiaries to (i) do any of the things described in the preceding
clauses (a) through (f) other than as expressly contemplated or
provided for in this Agreement or (ii) take, whether in writing or
otherwise, any action which, if taken prior to the date of this
Agreement, would have made any representation or warranty in this
Article V untrue or incorrect.
5.8 Joint Proxy Statement. None of the information supplied or
to be supplied by or on behalf of the Company for inclusion or incorporation by
reference in the registration statement to be filed with the SEC by Hain in
connection with the issuance of shares of Hain Common Stock in the Merger (the
"Registration Statement") will, at the time the Registration Statement becomes
effective under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. None of the information supplied or to be
supplied by or on behalf of the Company for inclusion or incorporation by
reference in the joint proxy statement/prospectus, in definitive form, relating
to the Company Stockholder Meeting (as hereinafter defined) and the Hain
Stockholder Meeting (as hereinafter defined), or in the related proxy and notice
of meeting, or soliciting material used in connection therewith (referred to
herein collectively as the "Joint Proxy Statement") will, at the dates mailed to
stockholders and at the time of the Company Stockholder Meeting and the Hain
Stockholder Meeting, 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. The Company will promptly inform Hain of the happening of
any event prior to the Effective Time which would render such information
regarding the Company incorrect in any material respect or require the amendment
of the Joint Proxy Statement. The Joint Proxy Statement (except for information
relating solely to Hain and Hain Subsidiary) will comply as to form in all
material respects with the provisions of the Securities Act and the Exchange
Act.
5.9 Litigation. Except as set forth in the Company Current SEC
Reports, there is no (i) claim, action, suit or proceeding pending or, to the
best knowledge of the Company or any of its subsidiaries, threatened against or
relating to the Company or any of its subsidiaries before any court or
governmental or regulatory authority or body or arbitration tribunal, or (ii)
outstanding judgment, order, writ, injunction or decree, or application, request
or motion therefor, of any court, governmental agency or arbitration tribunal in
a proceeding to which the Company, any subsidiary of the Company or any of their
respective assets was or is a party except, in the case of clauses (i) and (ii)
above, such as would not, individually or in the aggregate, either have a
Company Material Adverse Effect or materially impair the Company's ability to
consummate the Merger or the other transactions contemplated hereby.
5.10 Property and Leases. Except as set forth in the Company
Current SEC Reports, the Company and its subsidiaries have good and marketable
title to all real properties and all other properties and assets owned by them,
in each case free from liens, encumbrances and defects that would materially
affect the value thereof or materially interfere with the use made or to be made
thereof by them; and except as set forth in the Company Current SEC Reports, the
Company and its subsidiaries hold any leased real or personal property under
valid and enforceable leases with no exceptions that would materially interfere
with the use made or to be made thereof by them.
5.11 Employment and Labor Contracts. Neither the Company nor
any of its subsidiaries is a party to any employment, management services,
consultation or other similar contract with any past or present officer,
director or employee or, to the best knowledge of the Company, any entity
affiliated with any past or present officer, director or employee other than
those included as exhibits in the Company SEC Reports and other than the
agreements executed by employees generally, the forms of which have been
delivered to Hain. Notwithstanding the foregoing, Section 5.11 of the Disclosure
Schedule identifies any such agreement containing an agreement with respect to
any change of control, severance or termination benefit or any obligation on the
part of the Company that could be triggered by the Merger.
5.12 Labor Matters. Each of the Company and its subsidiaries
is in compliance in all material respects with all applicable laws respecting
employment and employment practices, terms and conditions of employment and
wages and hours, and neither the Company nor any of its subsidiaries is engaged
in any unfair labor practice which would have a Company Material Adverse Effect.
There is no labor strike, material slowdown or material stoppage pending (or, to
the knowledge of the Company, any labor strike or stoppage threatened) against
or affecting the Company or any of its subsidiaries. No petition for
certification has been filed and is pending before the National Labor Relations
Board with respect to any employees of the Company or any of its subsidiaries
who are not currently organized. No employee of the Company or its subsidiaries
is represented by a labor union or similar organization and, to the Company's
knowledge, there exist no ongoing discussions between the employees of the
Company or its subsidiaries and any labor union or similar organization relating
to the representation of such employees by such labor union or similar
organization.
5.13 Compliance with Law. Neither the Company nor any of its
subsidiaries has violated or failed to comply with any statute, law, ordinance,
regulation, rule or order of any foreign, federal, state or local government or
any other governmental department or agency (including, without limitation, any
required by the Food and Drug Administration or the Nutrition Labeling and
Education Act of 1990), or any judgment, decree or order of any court,
applicable to its business or operations, except where any such violation or
failure to comply would not, individually or in the aggregate, have a Company
Material Adverse Effect or materially impair the Company's ability to consummate
the Merger or the other transactions contemplated hereby; the conduct of the
business of each of the Company and its subsidiaries is in conformity with all
foreign, federal, state and local requirements, and all other foreign, federal,
state and local governmental and regulatory requirements, except where such
nonconformities would not, individually or in the aggregate, have a Company
Material Adverse Effect or materially impair the Company's ability to consummate
the Merger or the other transactions contemplated hereby. The Company and its
subsidiaries have all permits, licenses and franchises from governmental
agencies required to conduct their businesses as now being conducted, except for
such permits, licenses and franchises the absence of which would not,
individually or in the aggregate, have a Company Material Adverse Effect or
materially impair the Company's ability to consummate the Merger or the other
transactions contemplated hereby.
5.14 Board Recommendation. The Board of Directors of the
Company has, by unanimous vote at meetings of such board duly held on March 4,
2000, approved and adopted this Agreement and the Merger, determined that the
Merger is fair to the stockholders of the Company, recommended that the
stockholders of the Company approve and adopt this Agreement and the Merger and
rescinded any stock repurchase program previously approved by the Board of
Directors of the Company.
5.15 Intellectual Property. The Company has provided to Hain a
complete and accurate list of all of the trademarks (whether or not registered)
and trademark registrations and applications used by the Company and its
subsidiaries. Except as would not, individually or in the aggregate, have a
Company Material Adverse Effect, (i) each of the Company and its subsidiaries
has or owns, directly or indirectly, all right, title and interest to the
trademarks (whether or not registered) and trademark registrations and
applications, patent and patent applications, copyrights and copyright
applications, service marks, service mark registrations and applications, trade
dress, trade and product names (collectively, the "Intellectual Property") used
by the Company and its subsidiaries. Except as would not, individually or in the
aggregate, have a Company Material Adverse Effect, (i) each of the Company and
its subsidiaries has or owns, directly or indirectly, all right, title and
interest to such Intellectual Property or has the perpetual right to use such
Intellectual Property without consideration; none of the rights of the Company
and its subsidiaries in or use of such Intellectual Property has been or is
currently being or, to the knowledge of the Company, is threatened to be
infringed or challenged; (ii) all of the patents, trademark registrations,
service mark registrations, trade name registrations and copyright registrations
included in such Intellectual Property have been duly issued and have not been
canceled, abandoned or otherwise terminated; (iii) all of the patent
applications, trademark applications, service mark applications, trade name
applications and copyright applications included in such Intellectual Property
have been duly filed; and (iv) to the knowledge of the Company, the Company and
its subsidiaries own or have adequate licenses or other rights to use all
Intellectual Property, know-how and technical information required for their
operation.
5.16 Taxes. (i) The Company and each of its subsidiaries have
prepared and timely filed or will timely file with the appropriate governmental
agencies all Tax Returns (as hereinafter defined) required to be filed for any
period (or portion thereof) ending on or before the Effective Time, taking into
account any extension of time to file granted to or obtained on behalf of the
Company and/or its subsidiaries, and each such Tax Return is complete and
accurate in all material respects; (ii) the Company and each of its subsidiaries
have timely paid or will timely pay all Taxes (as hereinafter defined) due and
payable by them through the Effective Time and have made or will make adequate
accruals for any Taxes attributable to any taxable period or portion thereof of
the Company and/or its subsidiaries ending on or prior to the Effective Time
that are not yet due and payable; (iii) all asserted deficiencies or assessments
resulting from examinations of any Tax Returns filed by the Company or any of
its subsidiaries have been paid or finally settled and no issue previously
raised by any taxing authority reasonably could be expected to result in a
proposed deficiency or assessment for any prior, parallel or subsequent period
(including periods subsequent to the Effective Date); (iv) no deficiency in
respect of Taxes has been asserted or assessed against the Company or any of its
subsidiaries, and no examination of the Company or any of its subsidiaries is
pending or, to the best knowledge of the Company, threatened by any taxing
authority; (v) no extension of the period for assessment or collection of any
Tax of the Company or its subsidiaries is currently in effect and no extension
of time within which to file any Tax Return has been requested, which Tax Return
has not since been filed; (vi) no liens have been filed with respect to any
Taxes of the Company or any of its subsidiaries other than in respect of
property taxes that have accrued but are not yet due and payable; (vii) neither
the Company nor any of its subsidiaries has made, or is or will be required to
make, any adjustment by reason of a change in their accounting methods for any
period (or portion thereof) ending on or before the Effective Time; (viii) the
Company and its subsidiaries have made timely payments of all Taxes required to
be deducted and withheld from the wages paid to their employees and from all
other amounts paid to third parties; (ix) neither the Company nor any of its
subsidiaries is a party to any tax sharing, tax matters, tax indemnification or
similar agreement; (x) neither the Company nor any of its subsidiaries owns any
interest in any "controlled foreign corporation" (within the meaning of Section
957 of the Code), "passive foreign investment company" (within the meaning of
Section 1296 of the Code) or other entity the income of which may be required to
be included in the income of the Company or such subsidiary whether or not
distributed; (xi) except as set forth in Section 5.17(d) of the Disclosure
Schedule, neither the Company nor any of its subsidiaries has made an election
under Section 341(f) of the Code; (xii) neither the Company nor any of its
subsidiaries is a party to any agreement or arrangement that provides for the
payment of any amount, or the provision of any other benefit, that could
constitute a "parachute payment" within the meaning of Section 280G of the Code;
(xiii) no claim has ever been made by an authority in a jurisdiction where the
Company or any of its subsidiaries does not file Tax Returns that such entity is
or may be subject to taxation by that jurisdiction; (xiv) neither the Company
nor any of its subsidiaries has any liability for the Taxes of any person under
United States Treasury Regulation ("Treas. Reg.") ss. 1.1502-6 (or any similar
provision of state, local or foreign law), as a transferee or successor, by
contract or otherwise, except for liability arising under Treas. Reg. ss.
1.1502-6 with respect to current members of the Company's "affiliated group" (as
defined in Section 1504 of the Code); (xv) neither the Company nor any of its
subsidiaries has ever had any "undistributed personal holding company income"
(as defined in Section 545 of the Code); (xvi) none of the assets of the Company
or any of its subsidiaries is "tax-exempt use property" (as defined in Section
168(h)(1) of the Code) or may be treated as owned by any other person pursuant
to Section 168(f)(8) of the Internal Revenue Code of 1954 (as in effect
immediately prior to the enactment of the Tax Reform Act of 1986); (xvii)
neither the Company nor any of its subsidiaries has ever been a "United States
real property holding corporation," within the meaning of Section 897 of the
Code; (xviii) neither the Company nor any of its subsidiaries has made any
elections under Sections 108, 168, 338, 441, 472, 1017, 1033 or 4977 of the
Code; (xix) there are no "excess loss accounts" (as defined in Treas. Reg. ss.
1.1502-19) with respect to any stock of any subsidiary; (xx) neither the Company
nor any of its subsidiaries has any (a) deferred gain or loss (1) arising from
any deferred intercompany transactions (as described in Treas. Reg. ss.ss.
1.1502-13 and 1.1502-13T prior to amendment by Treasury Decision 8597 (issued
July 12, 1995) or (2) with respect to the stock or obligations of any other
member of any affiliated group (as described in Treas. Reg. ss.ss. 1.1502-14 and
1.1502-14T prior to amendment by Treasury Decision 8597) or (b) any gain subject
to Treas. Reg. ss. 1.1502-13, as amended by Treasury Decision 8597; (xxi)
neither the Company nor any of its subsidiaries has requested a ruling from, or
entered into a closing agreement with, the IRS or any other taxing authority;
and (xxii) the Company has previously delivered to Hain true and complete copies
of (a) all federal, state, local and foreign income or franchise Tax Returns
filed by the Company and/or any of its subsidiaries for the last three taxable
years ending prior to the date hereof (except for those Tax Returns that have
not yet been filed) and (b) any audit reports issued within the last three years
by the IRS or any other taxing authority.
For all purposes of this Agreement, "Tax" or "Taxes" means (i)
all federal, state, local or foreign taxes, charges, fees, imposts, levies or
other assessments, including, without limitation, all net income, alternative
minimum, gross receipts, capital, sales, use, ad valorem, value added, transfer,
franchise, profits, inventory, capital stock, license, withholding, payroll,
employment, social security, unemployment, excise, severance, stamp, occupation,
property and estimated taxes, customs duties, fees, assessments and charges of
any kind whatsoever, (ii) all interest, penalties, fines, additions to tax or
other additional amounts imposed by any taxing authority in connection with any
item described in clause (i) and (iii) all transferee, successor, joint and
several or contractual liability (including, without limitation, liability
pursuant to Treas. Reg. ss. 1.1502-6 (or any similar state, local or foreign
provision)) in respect of any items described in clause (i) or (ii).
For all purposes of this Agreement, "Tax Return" means all
returns, declarations, reports, estimates, information returns and statements
required to be filed in respect of any Taxes.
5.17 Employee Benefit Plans; ERISA.
-----------------------------
(a) The Company has provided to Hain copies of, and related
relevant materials to, all "employee benefit plans" as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, a
amended ("ERISA"), stock option and other stock-based plans, and
deferred compensation and other employee benefit plans, which are
maintained by the Company or as to which the Company has any direct or
indirect, actual or contingent liability ("Benefit Plans").
(b) No Benefit Plans are subject to Title IV of ERISA or
Section 412 of the Code. Neither the Company nor any subsidiary of the
Company nor any member of the Company's controlled group under Section
414 of the Code ("Company ERISA Affiliate") has incurred, or is
reasonably likely to incur, any material liability under Title IV of
ERISA.
(c) Except where the failure to comply would not, individually
or in the aggregate, have a Company Material Adverse Effect, or except
as set forth in Section 5.17(c) of the Disclosure Schedule: (i) the
Company and all Benefit Plans are in compliance with the applicable
provisions of ERISA and the Code; (ii) with respect to any Benefit Plan
subject to Section 412 of the Code, all contributions required to be
made under Section 412 of the Code have been timely made, and no such
plan has incurred an accumulated funding deficiency, whether or not
waived; (iii) each Benefit Plan intended to qualify under Section 401
of the Code, is so qualified; (iv) with respect to all Benefit Plans,
there are no investigations or claims pending (other than routine
claims for benefits); (v) there have been no prohibited transactions
under the Code or ERISA with respect to any Benefit Plans; (vi) with
respect to all Benefit Plans that are welfare plans (as defined in
ERISA Section 3(1)), no such plan provides for retiree welfare benefits
other than COBRA coverage, and all such plans have complied with the
COBRA continuation coverage requirements of Code Section 4980B; and
(vii) the Company has no liability with respect to any plans providing
benefits on a voluntary basis with respect to employees employed
outside the U.S.
(d) Except as set forth in Section 5.17(d) of the Disclosure
Schedule, the consummation of the transactions contemplated by this
Agreement will not: (i) entitle any individual to severance pay, (ii)
increase or accelerate compensation due to any individual, or (iii)
result in or satisfy a condition to the payment of compensation that
would, in combination with any other payment, result in an "excess
parachute payment" within the meaning of Section 280G(b) of the Code.
5.18 Environmental Matters. Except as would not,
individually or in the aggregate, have a Company Material Adverse
Effect:
(a) Each of the Company and its subsidiaries has obtained (or
is capable of obtaining without incurring any material incremental
expense) all Environmental Permits required in connection with its
business and operations and has no reason to believe any of them will
be revoked prior to their expiration, modified or will not be renewed,
and have made all registrations and given all notifications that are
required under Environmental Laws.
(b) There is no Environmental Claim pending, or, to the
knowledge of the Company, threatened against the Company or any of its
subsidiaries under Environmental Laws.
(c) The Company and its subsidiaries are in compliance with
and have no liability under, Environmental Laws, including, without
limitation, all of their Environmental Permits.
(d) Neither the Company nor any of its subsidiaries has
assumed, by contract or otherwise, any liabilities or obligations
arising under Environmental Laws.
(e) There are no past or present actions, activities,
conditions, occurrences or events, including, without limitation, the
Release or threatened Release of Hazardous Materials, which could
reasonably be expected to prevent compliance by the Company or any of
its subsidiaries with Environmental Laws, or to result in any liability
of the Company or any of its subsidiaries under Environmental Laws.
(f) No lien has been recorded under Environmental Laws with
respect to any property, facility or asset currently owned by the
Company or any of its subsidiaries.
(g) Neither the Company nor any of its subsidiaries has
received any notification that Hazardous Materials that any of them or
any of their respective predecessors in interest has used, generated,
stored, treated, handled, transported or disposed of has been found at
any site at which any person is conducting or plans to conduct any
investigation, remediation, removal, response or other action pursuant
to Environmental Laws.
(h) There is no friable asbestos or asbestos containing
material in, on or at any property, facility or equipment owned,
operated or leased by the Company or any of its subsidiaries.
(i) No property now or previously owned, operated or leased by
the Company or any of its subsidiaries, or any of their respective
predecessors in interest, is (i) listed or proposed for listing on the
National Priorities List promulgated pursuant to the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended ("CERCLA") or (ii) listed on the Comprehensive Environmental
Response, Compensation, and Liability Information System List
promulgated pursuant to CERCLA, or on any comparable list relating to
the Release of Hazardous Materials established under Environmental
Laws.
(j) No underground or above ground storage tank or related
piping, or any surface impoundment, lagoon, landfill or other disposal
site containing Hazardous Materials is located at, under or on any
property owned, operated or leased by the Company or any of its
subsidiaries or, to the knowledge of the Company, any of their
respective predecessors in interest, nor has any of them been removed
from or decommissioned or abandoned at any such property.
(k) The Company has delivered or otherwise made available for
inspection to Hain copies of any investigations, studies, reports,
assessments, evaluations and audits in its possession, custody or
control of Hazardous Materials at, in, beneath, emanating from or
adjacent to any properties or facilities now or formerly owned, leased,
operated or used by it or any of its subsidiaries or any of their
respective predecessors in interest, or of compliance by any of them
with, or liability of any of them under, Environmental Laws.
For purposes of this Agreement:
(i) "Environment" means any surface water, ground water,
drinking water supply, land surface or subsurface
strata, ambient air, indoor air and any indoor
location and all natural resources such as flora,
fauna and wetlands;
(ii) "Environmental Claim" means any notice, claim,
demand, complaint, suit or other communication by any
person alleging potential liability (including,
without limitation, potential liability for
investigation, remediation, removal, response or
corrective action or damages to any person, property
or natural resources, and any fines or penalties)
arising out of or relating to (1) the Release or
threatened Release of Hazardous Materials or (2) any
violation, or alleged violation, of Environmental
Laws;
(iii) "Environmental Laws" means all federal, state, and
local laws, statutes, codes, rules, ordinances,
regulations, judgments, orders, decrees and the
common law as now or previously in effect relating to
pollution or protection of human health or the
Environment, or occupational health or safety
including, without limitation, those relating to the
Release or threatened Release of Hazardous Materials;
(iv) "Hazardous Materials" means pollutants, contaminants,
hazardous or toxic substances, constituents,
materials or wastes, and any other waste, substance,
material, chemical or constituent subject to
regulation under Environmental Laws including,
without limitation, petroleum and petroleum products
and wastes, and all constituents thereof;
(v) "Release" means any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping or disposing in or into
the Environment; and
(vi) "Environmental Permit" means a permit, identification
number, license, approval, consent or other written
authorization issued pursuant to Environmental Laws.
5.19 Disclosure. All of the facts and circumstances not
required to be disclosed as exceptions under or to any of the foregoing
representations and warranties made by the Company, in this Article V by reason
of any minimum disclosure requirement in any such representation and warranty
would not, in the aggregate, have a Company Material Adverse Effect or
materially impair the Company's ability to consummate the Merger or the other
transactions contemplated hereby.
5.20 Absence of Undisclosed Liabilities. Except as disclosed
in the Company Current SEC Reports, neither the Company nor any of its
subsidiaries has any liabilities or obligations of any nature, whether absolute,
accrued, unmatured, contingent or otherwise, or any unsatisfied judgments or any
leases of personalty or realty or unusual or extraordinary commitments, except
the liabilities recorded on the Company's balance sheet included in the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended December
31, 1999 and any notes thereto, and except for liabilities or obligations
incurred in the ordinary course of business and consistent with past practice
since December 31, 1999 that would not individually or in the aggregate have a
Company Material Adverse Effect or materially impair the Company's ability to
consummate the Merger or the other transactions contemplated hereby.
5.21 Finders or Brokers. Except as set forth in Section 5.21
of the Disclosure Schedule, none of the Company, the subsidiaries of the
Company, the Board of Directors of the Company or any member of the Board of
Directors of the Company has employed any investment banker, broker, finder or
intermediary in connection with the transactions contemplated hereby who might
be entitled to a fee or any commission in connection with the Merger, and
Section 5.21 of the Disclosure Schedule sets forth the maximum consideration
(present and future) agreed to be paid to each such party.
5.22 Rights Agreement. The Company has taken all action which
may be necessary under the Rights Agreement, so that the execution of this
Agreement and any amendments thereto by the parties hereto and the consummation
of the transactions contemplated hereby and thereby shall not cause (i) Hain
and/or Hain Subsidiary or their respective affiliates or associates to become an
Acquiring Person (as such term is defined in the Rights Agreement) unless this
Agreement has been terminated in accordance with its terms or (ii) a
Distribution Date, a Stock Acquisition Date (as such terms are defined in the
Rights Agreement) or certain other events (as described in the Rights Agreement)
to occur, irrespective of the number of Company Shares acquired pursuant to the
Merger or other transactions contemplated by this Agreement.
5.23 Opinion of Financial Advisor. The Company has
received the opinion (the "Company Fairness Opinion") of Goldman, Sachs & Co.,
dated the date of this Agreement, to the effect that, as of such date, the
Merger Consideration is fair from a financial point of view to the holders of
Company Shares.
5.24 Insurance. The Company carries insurance in such amounts
and covering such risks as is reasonable and customary for businesses of the
type conducted by the Company.
5.25 Tax Free Reorganization. Neither the Company nor, to the
Company's knowledge, any of its affiliates has taken, agreed to take, or will
take any action that would prevent the Merger from constituting a reorganization
within the meaning of Section 368(a) of the Code. Neither the Company nor, to
the Company's knowledge, any of its affiliates is aware of any agreement, plan
or other circumstance that would prevent the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code.
5.26 Full Disclosure. As of the date hereof and as of the
Closing Date, as the case may be, all statements contained in any schedule,
exhibit, certificate or other instrument delivered by or on behalf of the
Company pursuant to this Agreement are, or, in respect of any such instrument to
be delivered on or prior to the Closing Date, as of its date and as of the
Closing Date will be, accurate and complete in all material respects, authentic
and incorporated herein by reference and constitute or will constitute the
representations and warranties of the Company. No representation or warranty of
the Company contained in this Agreement contains any untrue statement or omits
to state a fact necessary in order to make the statements herein or therein, in
light of the circumstances under which they were made, not misleading in any
material respect.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF HAIN
Hain represents and warrants to the Company that:
6.1 Organization and Qualification. Each of Hain 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 power and authority to own, lease and operate its properties
and to carry on its business as now being conducted. Each of Hain and its
subsidiaries is duly qualified as a foreign corporation to do business, and is
in good standing, in each jurisdiction where the character of its properties
owned or leased or the nature of its activities makes such qualification
necessary, except for failures to be so qualified or in good standing which
would not, individually or in the aggregate, have a material adverse effect on
the general affairs, management, business, operations, condition (financial or
otherwise) or prospects of Hain and its subsidiaries taken as a whole (a "Hain
Material Adverse Effect"). Neither Hain nor any of Hain's subsidiaries is in
violation of any of the provisions of its certificate or articles of
incorporation or organization or by-laws. Hain has delivered to the Company
accurate and complete copies of the certificate or articles of incorporation or
organization (or other applicable charter document) and by-laws, as currently in
effect, of each of Hain and its subsidiaries.
6.2 Capital Stock of Subsidiaries. The only direct or indirect
subsidiaries of Hain are those listed in Section 6.2 of the Disclosure Schedule.
Hain is directly or indirectly the record and beneficial owner of all of the
outstanding shares of capital stock of each of its subsidiaries and, except as
set forth on Section 6.2 of the Disclosure Schedule, all of such shares owned by
Hain are validly issued, fully paid and nonassessable and are owned by it free
and clear of any claim, lien or encumbrance of any kind with respect thereto.
6.3 Capitalization. The authorized capital stock of Hain
consists of 40,000,000 shares of Hain Common Stock and 5,000,000 shares of
preferred stock, par value $.01 per share. As of March 1, 2000, 18,272,703
shares of Common Stock are issued and outstanding, 100,000 shares are issued and
held as treasury shares and no shares of preferred stock were issued and
outstanding. Except as set forth in Section 6.3 of the Disclosure Schedule, all
of such issued and outstanding shares are, and any shares of Hain Common Stock
to be issued in connection with this Agreement, the Merger and the transactions
contemplated hereby will be, validly issued, fully paid and nonassessable and
free of preemptive rights. Except as set forth in Section 6.3 of the Disclosure
Schedule, other than the transactions contemplated by this Agreement, neither
Hain nor any of its subsidiaries is a party to any agreement or understanding,
oral or written, which (a) grants a right of first refusal or other such similar
right upon the sale of Hain Common Stock, or (b) restricts or affects the voting
rights of Hain Common Stock. There is no liability for dividends declared or
accumulated but unpaid with respect to any Hain Common Stock.
6.4 Authority Relative to This Agreement. Hain has corporate
power and authority to execute and deliver this Agreement and to consummate the
Merger and other transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the Merger and other transactions
contemplated hereby have been duly and validly authorized by the Board of
Directors of Hain and no other corporate proceedings on the part of Hain are
necessary to authorize this Agreement or to consummate the Merger or other
transactions contemplated hereby (other than as contemplated by this Agreement,
including with respect to the issuance of shares of Hain Common Stock in the
Merger and the change of Hain's corporate name, the approval of the Hain's
stockholders pursuant to the DGCL). This Agreement has been duly and validly
executed and delivered by Hain and, assuming the due authorization, execution
and delivery hereof by the Company, constitutes a valid and binding agreement of
Hain, enforceable against Hain in accordance with its terms, except to the
extent that its enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the enforcement
of creditors' rights generally or by general equitable or fiduciary principles.
6.5 No Violations, etc.
------------------
(a) Assuming that all filings, permits, authorizations,
consents and approvals or waivers thereof have been duly made or
obtained as contemplated by Section 6.5(b) hereof, except as set forth
in Section 6.5 of the Disclosure Schedule, neither the execution and
delivery of this Agreement by Hain nor the consummation of the Merger
or other transactions contemplated hereby nor compliance by Hain with
any of the provisions hereof will (i) violate, conflict with, or result
in a breach of any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination or suspension of, or
accelerate the performance required by, or result in a right of
termination or acceleration under, or result in the creation of any
lien, security interest, charge or encumbrance upon any of the
properties or assets of Hain or any of its subsidiaries under, any of
the terms, conditions or provisions of (x) their respective certificate
or articles of incorporation or organization or by-laws, (y) any note,
bond, mortgage, indenture or deed of trust, or (z) any license, lease,
agreement or other instrument or obligation, to which Hain or any such
subsidiary is a party or to which they or any of their respective
properties or assets may be subject, or (ii) violate any judgment,
ruling, order, writ, injunction, decree, statute, rule or regulation
applicable to Hain or any of its subsidiaries or any of their
respective properties or assets, except, in the case of clauses (i)(z)
and (ii) above, for such violations, conflicts, breaches, defaults,
terminations, suspensions, accelerations, rights of termination or
acceleration or creations of liens, security interests, charges or
encumbrances which would not, individually or in the aggregate, either
have a Hain Material Adverse Effect or materially impair the
consummation of the Merger or other transactions contemplated hereby.
(b) No filing or registration with, notification to and no
permit, authorization, consent or approval of any governmental entity
(including, without limitation, any federal, state or local regulatory
authority or agency) is required by Hain, Hain Subsidiary or any of
Hain's other subsidiaries in connection with the execution and delivery
of this Agreement or the consummation by Hain of the Merger or other
transactions contemplated hereby, except (i) in connection with the
applicable requirements of the HSR Act, (ii) the filing of the
Certificate of Merger, (iii) the approval of Hain's stockholders
pursuant to the DGCL, (iv) filings with The Nasdaq Stock Market, Inc.,
(v) filings with the SEC and state securities administrators, and (vi)
such other filings, registrations, notifications, permits,
authorizations, consents or approvals the failure of which to be
obtained, made or given would not, individually or in the aggregate,
either have a Hain Material Adverse Effect or materially impair Hain's
ability to consummate the Merger or other transactions contemplated
hereby.
(c) As of the date hereof, Hain and its subsidiaries are not
in violation of or default under (x) their respective certificates or
articles of incorporation or organization or by-laws, (y) any note,
bond, mortgage, indenture or deed of trust, or (z) any license, lease,
agreement or other instrument or obligation to which Hain or any such
subsidiary is a party or to which they or any of their respective
properties or assets may be subject, except, in the case of clauses (y)
and (z) above, for such violations or defaults which would not,
individually or in the aggregate, either have a Hain Material Adverse
Effect or materially impair Hain's ability to consummate the Merger or
other transactions contemplated hereby.
6.6 Commission Filings; Financial Statements. Hain has filed
all required forms, reports and documents with the SEC since June 30, 1996,
including, in the form filed with the SEC together with any amendments thereto,
(i) its Annual Report on Form 10-K for the fiscal year ended June 30, 1999 (the
"Hain 10-K"), (ii) all proxy statements relating to Hain's meetings of
stockholders (whether annual or special) held since June 30, 1999 (the "Hain
Current Proxies"), (iii) its Current Report on Form 8-K dated September 27, 1999
(the "Hain Current 8-K"), (iv) its Quarterly Reports on Form 10-Q for the fiscal
quarters ended September 30, 1999 and December 31, 1999 (the "Hain Current
10-Qs") and, together with the Hain 10-K, the Hain Current Proxies and the Hain
Current 8-K, the "Hain Current SEC Reports") and (iv) all other reports or
registration statements filed by Hain with the SEC since June 30, 1996
(collectively, the "Hain SEC Reports"), all of which complied when filed in all
material respects with all applicable requirements of the Securities Act and the
Exchange Act. The audited consolidated financial statements and unaudited
consolidated interim financial statements of Hain and its subsidiaries included
or incorporated by reference in such Hain SEC Reports were prepared in
accordance with generally accepted accounting principles applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto) and present fairly, in all material respects, the financial position
and results of operations and cash flows of Hain and its subsidiaries on a
consolidated basis at the respective dates and for the respective periods
indicated (and in the case of all such financial statements that are interim
financial statements, contain all adjustments so to present fairly). Except to
the extent that information contained in any Hain SEC Report was revised or
superseded by a later filed Hain SEC Report, none of the Hain SEC Reports
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Hain has provided to the Company or has otherwise disclosed to
the Company all other correspondence sent to or received from the SEC by Hain
and its subsidiaries since June 30, 1996 (other than routine cover letters).
6.7 Absence of Changes or Events. Except as set forth in the
Hain Current SEC Reports, since the date of the Hain 10-K:
(a) there has been no material adverse change, or any
development involving a prospective material adverse change, in the
general affairs, management, business, operations, condition (financial
or otherwise) or prospects of Hain and its subsidiaries taken as a
whole;
(b) there has not been any direct or indirect redemption,
purchase or other acquisition of any shares of capital stock of Hain or
any of its subsidiaries, or any declaration, setting aside or payment
of any dividend or other distribution by Hain or any of its
subsidiaries in respect of their capital stock;
(c) except in the ordinary course of its business and
consistent with past practice neither Hain nor any of its subsidiaries
has incurred any indebtedness for borrowed money, or assumed,
guaranteed, endorsed or otherwise as an accommodation become
responsible for the obligations of any other individual, firm or
corporation, or made any loans or advances to any other individual,
firm or corporation;
(d) there has not been any change in accounting methods,
principles or practices of Hain or its subsidiaries;
(e) except in the ordinary course of business and for amounts
which are not material, there has not been any revaluation by Hain or
any of its subsidiaries of any of their respective assets, including,
without limitation, writing down the value of inventory or writing off
notes or accounts receivables;
(f) there has not been any damage, destruction or loss,
whether covered by insurance or not, except for such as would not,
individually or in the aggregate, have a Hain Material Adverse Effect;
and
(g) there has not been any agreement by Hain or any of its
subsidiaries to (i) do any of the things described in the preceding
clauses (a) through (f) other than as expressly contemplated or
provided for in this Agreement or (ii) take, whether in writing or
otherwise, any action which, if taken prior to the date of this
Agreement, would have made any representation or warranty in this
Article VI untrue or incorrect.
6.8 Joint Proxy Statement. None of the information supplied or
to be supplied by or on behalf of Hain and Hain Subsidiary for inclusion or
incorporation by reference in the Registration Statement will, at the time the
Registration Statement becomes effective under the Securities Act, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. None of the
information supplied or to be supplied by or on behalf of Hain and Hain
Subsidiary for inclusion or incorporation by reference in the Joint Proxy
Statement will, at the dates mailed to stockholders and at the time of the
Company Stockholder Meeting and the Hain Stockholder Meeting, 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. Hain will promptly
inform the Company of the happening of any event prior to the Effective Time
which would render such information regarding Hain incorrect in any material
respect or require the amendment of the Joint Proxy Statement. The Registration
Statement and the Joint Proxy Statement (except for information relating solely
to the Company) will comply as to form in all material respects with the
provisions of the Securities Act and the Exchange Act.
6.9 Litigation. Except as set forth in Section 6.9 of the
Disclosure Schedule or the Hain Current SEC Reports, there is no (i) claim,
action, suit or proceeding pending or, to the best knowledge of Hain or any of
its subsidiaries, threatened against or relating to the Company or any of its
subsidiaries before any court or governmental or regulatory authority or body or
arbitration tribunal, or (ii) outstanding judgment, order, writ, injunction or
decree, or application, request or motion therefor, of any court, governmental
agency or arbitration tribunal in a proceeding to which the Company, any
subsidiary of the Company or any of their respective assets was or is a party
except, in the case of clauses (i) and (ii) above, such as would not,
individually or in the aggregate, either have a Hain Material Adverse Effect or
materially impair Hain's ability to consummate the Merger or the other
transactions contemplated hereby.
6.10 Property and Leases. Except as set forth in the Hain
Current SEC Reports, Hain and its subsidiaries have good and marketable title to
all real properties and all other properties and assets owned by them, in each
case free from liens, encumbrances and defects that would materially affect the
value thereof or materially interfere with the use made or to be made thereof by
them; and except as set forth in the Hain Current SEC Reports, Hain and its
subsidiaries hold any leased real or personal property under valid and
enforceable leases with no exceptions that would materially interfere with the
use made or to be made thereof by them.
6.11 Labor Matters. Each of Hain and its subsidiaries is in
compliance in all material respects with all applicable laws respecting
employment and employment practices, terms and conditions of employment and
wages and hours, and neither Hain nor any of its subsidiaries is engaged in any
unfair labor practice which would have a Hain Material Adverse Effect. There is
no labor strike, material slowdown or material stoppage pending (or, to the
knowledge of Hain, any labor strike or stoppage threatened) against or affecting
Hain or any of its subsidiaries. No petition for certification has been filed
and is pending before the National Labor Relations Board with respect to any
employees of Hain or any of its subsidiaries who are not currently organized.
Except as set forth in Section 6.11 of the Disclosure Schedule or the Hain
Current SEC Reports, no employee of Hain or its subsidiaries is represented by a
labor union or similar organization and, to Hain's knowledge, there exist no
ongoing discussions between the employees of Hain or its subsidiaries and any
labor union or similar organization relating to the representation of such
employees by such labor union or similar organization.
6.12 Compliance with Law. Except as set forth in Schedule 6.12
of the Disclosure Schedule, neither Hain nor any of its subsidiaries has
violated or failed to comply with any statute, law, ordinance, regulation, rule
or order of any foreign, federal, state or local government or any other
governmental department or agency (including, without limitation, any required
by the Food and Drug Administration or the Nutrition Labeling and Education Act
of 1990), or any judgment, decree or order of any court, applicable to its
business or operations, except where any such violation or failure to comply
would not, individually or in the aggregate, have a Hain Material Adverse Effect
or materially impair Hain's ability to consummate the Merger or the other
transactions contemplated hereby; the conduct of the business of each of Hain
and its subsidiaries is in conformity with all foreign, federal, state and local
requirements, and all other foreign, federal, state and local governmental and
regulatory requirements, except where such nonconformities would not,
individually or in the aggregate, have a Hain Material Adverse Effect or
materially impair Hain's ability to consummate the Merger or the other
transactions contemplated hereby. Hain and its subsidiaries have all permits,
licenses and franchises from governmental agencies required to conduct their
businesses as now being conducted, except for such permits, licenses and
franchises the absence of which would not, individually or in the aggregate,
have a Hain Material Adverse Effect or materially impair Hain's ability to
consummate the Merger or the other transactions contemplated hereby.
6.13 Board Recommendation. The Board of Directors of Hain has,
by unanimous vote at a meeting of such board duly held on March 2, 2000,
approved and adopted this Agreement, the Merger and the other transactions
contemplated hereby (including, without limitation, the issuance of Hain Common
Stock as a result of the Merger and the change of Hain's corporate name to The
Hain Celestial Group, Inc.), determined that the Merger is fair to the holders
of shares of Hain Common Stock, recommended that the stockholders of Hain
approve the issuance of shares of Hain Common Stock in the Merger , the change
of Hain's corporate name and rescinded any stock repurchase program previously
approved by the Hain Board.
6.14 Intellectual Property. Except as would not, individually
or in the aggregate, have a Hain Material Adverse Effect, (i) each of Hain and
its subsidiaries has or owns, directly or indirectly, all right, title and
interest to such Intellectual Property or has the perpetual right to use such
Intellectual Property without consideration; none of the rights of Hain and its
subsidiaries in or use of such Intellectual Property has been or is currently
being or, to the knowledge of Hain, is threatened to be infringed or challenged;
(ii) all of the patents, trademark registrations, service mark registrations,
trade name registrations and copyright registrations included in such
Intellectual Property have been duly issued and have not been canceled,
abandoned or otherwise terminated; (iii) all of the patent applications,
trademark applications, service mark applications, trade name applications and
copyright applications included in such Intellectual Property have been duly
filed; and (iv) to the knowledge of Hain, Hain and its subsidiaries own or have
adequate licenses or other rights to use all Intellectual Property, know-how and
technical information required for their operation.
6.15 Taxes. Except as would not, individually or in the
aggregate, have a Hain Material Adverse Effect, (i) Hain and each of its
subsidiaries have prepared and timely filed or will timely file with the
appropriate governmental agencies all Tax Returns (as hereinafter defined)
required to be filed for any period (or portion thereof ending on or before the
Effective Time), taking into account any extension of time to file granted to or
obtained on behalf of Hain and/or its subsidiaries, and each such Tax Return is
complete and accurate in all material respects; (ii) Hain and each of its
subsidiaries have timely paid or will timely pay all Taxes (as hereinafter
defined) due and payable by them through the Effective Time and have made or
will make adequate accruals for any Taxes attributable to any taxable period or
portion thereof of Hain and/or its subsidiaries ending on or prior to the
Effective Time that are not yet due and payable; (iii) all asserted deficiencies
or assessments resulting from examinations of any Tax Returns filed by Hain or
any of its subsidiaries have been paid or finally settled and no issue
previously raised by any taxing authority reasonably could be expected to result
in a proposed deficiency or assessment for any prior, parallel or subsequent
period (including periods subsequent to the Effective Date); (iv) no deficiency
in respect of Taxes has been asserted or assessed against Hain or any of its
subsidiaries, and no examination of Hain or any of its subsidiaries is pending
or, to the best knowledge of Hain, threatened by any taxing authority; (v) no
extension of the period for assessment or collection of any Tax of Hain or its
subsidiaries is currently in effect and no extension of time within which to
file any Tax Return has been requested, which Tax Return has not since been
filed; (vi) no liens have been filed with respect to any Taxes of Hain or any of
its subsidiaries other than in respect of property taxes that have accrued but
are not yet due and payable; (vii) neither Hain nor any of its subsidiaries has
made, or is or will be required to make, any adjustment by reason of a change in
their accounting methods for any period (or portion thereof) ending on or before
the Effective Time; (viii) Hain and its subsidiaries have made timely payments
of all Taxes required to be deducted and withheld from the wages paid to their
employees and from all other amounts paid to third parties; and (ix) Hain has
previously made available to the Company true and complete copies of (a) all
federal, state, local and foreign income or franchise Tax Returns filed by Hain
and/or any of its subsidiaries for the last three taxable years ending prior to
the date hereof (except for those Tax Returns that have not yet been filed) and
(b) any audit reports issued within the last three years by the IRS or any other
taxing authority.
6.16 Disclosure. All of the facts and circumstances not
required to be disclosed as exceptions under or to any of the foregoing
representations and warranties made by Hain by reason of any minimum disclosure
requirement in any such representation and warranty would not, in the aggregate,
have a Hain Material Adverse Effect or materially impair Hain's ability to
consummate the Merger or the transactions contemplated hereby.
6.17 Absence of Undisclosed Liabilities. Except as disclosed
in the Hain Current SEC Reports, neither Hain nor any of its subsidiaries has
any liabilities or obligations of any nature, whether absolute, accrued,
unmatured, contingent or otherwise, or any unsatisfied judgments or any leases
of personalty or realty or unusual or extraordinary commitments, except the
liabilities recorded on Hain's balance sheet included in Hain's Quarterly Report
on Form 10-Q for the fiscal quarter ended December 31, 1999 and any notes
thereto, and except for liabilities or obligations incurred in the ordinary
course of business and consistent with past practice since December 31, 1999
that would not individually or in the aggregate have a Hain Material Adverse
Effect or materially impair Hain's ability to consummate the Merger or the
transactions contemplated hereby.
6.18 Finders or Brokers. Except as set forth in Section 6.18
of the Disclosure Schedule, none of Hain, the subsidiaries of Hain, the Board of
Directors of Hain or any member of the Board of Directors of Hain has employed
any investment banker, broker, finder or intermediary in connection with the
transactions contemplated hereby who might be entitled to a fee or any
commission in connection with of the Merger, and Section 6.18 of the Disclosure
Schedule sets forth the maximum consideration (present and future) agreed to be
paid to each such party.
6.19 Opinion of Financial Advisor. Hain has received the
opinion (the "Hain Fairness Opinion") of Bear, Stearns & Co. Inc., dated the
date of this Agreement, to the effect that as of such date, the Exchange Ratio
is fair from a financial point of view to Hain.
6.20 Environmental Matters. Except as would not,
individually or in the aggregate, have a Hain Material Adverse Effect:
(a) Each of Hain and its subsidiaries has obtained (or is
capable of obtaining without incurring any material incremental
expense) all Environmental Permits required in connection with its
business and operations and has no reason to believe any of them will
be revoked prior to their expiration, modified or will not be renewed,
and have made all registrations and given all notifications that are
required under Environmental Laws.
(b) There is no Environmental Claim pending, or, to the
knowledge of Hain, threatened against Hain or any of its subsidiaries
under Environmental Laws.
(c) Hain and its subsidiaries are in compliance with and have
no liability under, Environmental Laws, including, without limitation,
all of their Environmental Permits.
(d) Neither Hain nor any of its subsidiaries has assumed, by
contract or otherwise, any liabilities or obligations arising under
Environmental Laws.
(e) There are no past or present actions, activities,
conditions, occurrences or events, including, without limitation, the
Release or threatened Release of Hazardous Materials, which could
reasonably be expected to prevent compliance by Hain or any of its
subsidiaries with Environmental Laws, or to result in any liability of
Hain or any of its subsidiaries under Environmental Laws.
(f) No lien has been recorded under Environmental Laws with
respect to any property, facility or asset currently owned by Hain or
any of its subsidiaries.
(g) Neither Hain nor any of its subsidiaries has received any
notification that Hazardous Materials that any of them or any of their
respective predecessors in interest has used, generated, stored,
treated, handled, transported or disposed of has been found at any site
at which any person is conducting or plans to conduct any
investigation, remediation, removal, response or other action pursuant
to Environmental Laws.
(h) No property now or previously owned, operated or leased by
Hain or any of its subsidiaries, or any of their respective
predecessors in interest, is (i) listed or proposed for listing on the
National Priorities List promulgated pursuant to CERCLA or (ii) listed
on the Comprehensive Environmental Response, Compensation, and
Liability Information System List promulgated pursuant to CERCLA, or on
any comparable list relating to the Release of Hazardous Materials
established under Environmental Laws.
(i) Hain has delivered or otherwise made available for
inspection to the Company copies of any investigations, studies,
reports, assessments, evaluations and audits in its possession, custody
or control of Hazardous Materials at, in, beneath, emanating from or
adjacent to any properties or facilities now or formerly owned, leased,
operated or used by it or any of its subsidiaries or any of their
respective predecessors in interest, or of compliance by any of them
with, or liability of any of them under, Environmental Laws.
6.21 Employee Benefit Plans; ERISA. Neither Hain nor any
subsidiary of Hain nor any member of Hain's controlled group under Section 414
of the Code ("Hain ERISA Affiliate") has incurred, or is reasonably likely to
incur any material liability under Title IV of ERISA. Neither Hain nor any
subsidiary of Hain nor any Hain ERISA Affiliate has incurred any material
accumulated funding deficiency, whether or not waived, within the meaning of
Section 302 of ERISA or Section 412 of the Code.
6.22 Insurance. Hain carries insurance in such amounts and
covering such risks as is reasonable and customary for businesses of the type
conducted by Hain.
6.23 Tax Free Reorganization. None of Hain, Hain Subsidiary or
any affiliate of Hain has taken, agreed to take, or will take any action that
would prevent the Merger from constituting a reorganization within the meaning
of Section 368(a) of the Code. None of Hain, Hain Subsidiary or any affiliate of
Hain is aware of any agreement, plan or other circumstance that would prevent
the Merger from qualifying as a reorganization within the meaning of Section
368(a) of the Code.
6.24 Full Disclosure. As of the date hereof and as of the
Closing Date, as the case may be, all statements contained in any schedule,
exhibit, certificate or other instrument delivered by or on behalf of Hain
pursuant to this Agreement are, or, in respect of any such instrument to be
delivered on or prior to the Closing Date, as of its date and as of the Closing
Date will be, accurate and complete in all material respects, authentic and
incorporated herein by reference and constitute or will constitute the
representations and warranties of Hain. No representation or warranty of Hain
contained in this Agreement contains any untrue statement or omits to state a
fact necessary in order to make the statements herein or therein, in light of
the circumstances under which they were made, not misleading in any material
respect.
ARTICLE VII
CONDUCT OF BUSINESS OF
THE COMPANY AND HAIN PENDING THE MERGER
7.1 Conduct of Business of the Company Pending the Merger.
Except as contemplated by this Agreement or as expressly agreed to in writing by
Hain, during the period from the date of this Agreement to the Effective Time,
each of the Company and its subsidiaries will conduct their respective
operations according to its ordinary course of business consistent with past
practice, and will use all commercially reasonable efforts to keep intact its
business organization, to keep available the services of its officers and
employees and to maintain satisfactory relationships with suppliers,
distributors, customers and others having business relationships with it and
will take no action which would materially impair the ability of the parties to
consummate the Merger or the other transactions contemplated by this Agreement.
Without limiting the generality of the foregoing, and except as otherwise
expressly provided in this Agreement, prior to the Effective Time, the Company
will not nor will it permit any of its subsidiaries to, without the prior
written consent of Hain, which consent shall not be unreasonably withheld or
delayed:
(a) amend its certificate or articles of incorporation
or organization or by-laws;
(b) authorize for issuance, issue, sell, deliver, grant any
options for, or otherwise agree or commit to issue, sell or deliver any
shares of any class of its capital stock or any securities convertible
into shares of any class of its capital stock (except for the exercise
of currently outstanding stock options and except pursuant to the 1994
Non-Employee Director Compensation Plan pursuant to elections currently
in effect);
(c) split, combine or reclassify any shares of its capital
stock, declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in
respect of its capital stock or purchase, redeem or otherwise acquire
any shares of its own capital stock or of any of its subsidiaries,
except as otherwise expressly provided in this Agreement;
(d) (i) create, incur, assume, maintain or permit to exist any
debt for borrowed money other than under existing lines of credit in
the ordinary course of business consistent with past practice; (ii)
assume, guarantee, endorse or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the obligations of
any other person except for its wholly owned subsidiaries in the
ordinary course of business and consistent with past practices and
subclause (i) above; (iii) make any loans, advances or capital
contributions to, or investments in, any other person, except loans,
advances, capital contributions or investments not to exceed $50,000 in
the aggregate; or (iv) pledge or otherwise encumber shares of capital
stock of the Company or its subsidiaries;
(e) (i) increase in any manner the compensation of (x) any
employee except in the ordinary course of business consistent with past
practice or (y) except under the terms of any agreement in existence on
the date hereof, any of its directors or officers; (ii) pay or agree to
pay any pension, retirement allowance or other employee benefit not
required, or enter into or agree to enter into any agreement or
arrangement with such director or officer or employee, whether past or
present, relating to any such pension, retirement allowance or other
employee benefit, except as required under currently existing
agreements, plans or arrangements or to extend employee benefits upon
termination in the ordinary course of business consistent with past
practice; (iii) grant any severance or termination pay to, or enter
into any employment or severance agreement with, (x) any employee
except in the ordinary course of business consistent with past practice
or (y) except under the terms of any agreement or policy in existence
on the date hereof, any of its directors or officers; or (iv) except as
may be required to comply with applicable law, become obligated (other
than pursuant to any new or renewed collective bargaining agreement)
under any new pension plan, welfare plan, multiemployer plan, employee
benefit plan, benefit arrangement, or similar plan or arrangement,
which was not in existence on the date hereof, including any bonus,
incentive, deferred compensation, stock purchase, stock option, stock
appreciation right, group insurance, severance pay, retirement or other
benefit plan, agreement or arrangement, or employment or consulting
agreement with or for the benefit of any person, or amend any of such
plans or any of such agreements in existence on the date hereof;
provided, however, that the Company may enter into agreements with its
employees in order to provide incentives to such employees to continue
to remain as employees of the Company at least through the Effective
Time, so long as the aggregate cost to the Company of such agreements
shall not exceed $500,000 in the aggregate and provided, further, that
the Company consults with Hain prior to entering into any such
agreements;
(f) except as otherwise expressly contemplated by this
Agreement, enter into any other agreements, commitments or contracts in
excess of $50,000 in the aggregate, except agreements, commitments or
contracts in the ordinary course of business consistent with past
practice;
(g) authorize, recommend, propose or announce an intention to
authorize, recommend or propose, or enter into any agreement in
principle or an agreement with respect to, any plan of liquidation or
dissolution, any acquisition of a material amount of assets (other than
in the ordinary course of business) or securities, any sale, transfer,
lease, license, pledge, mortgage, or other disposition or encumbrance
of a material amount of assets (other than in the ordinary course of
business) or securities or any material change in its capitalization,
or any entry into a material contract or any amendment or modification
of any material contract or any release or relinquishment of any
material contract rights;
(h) authorize any new capital expenditure or expenditures in
excess of $50,000 in the aggregate, other than expenditures that were
included in the Company's capital expenditure budget for the current
fiscal year, which is attached in Section 7.1 of the Disclosure
Schedule;
(i) make any change in the accounting methods or accounting
practices followed by the Company;
(j) settle or compromise any material federal, state, local or
foreign Tax liability, make any new material Tax election, revoke or
modify any existing Tax election, or request or consent to a change in
any method of Tax accounting;
(k) take, cause or permit to be taken any action, whether
before or after the Effective Date, that could reasonably be expected
to prevent the Merger from constituting a "reorganization" within the
meaning of Section 368(a) of the Code;
(l) waive, amend or otherwise alter the Rights Agreement or
redeem the Rights, except as contemplated by this Agreement;
(m) knowingly do any act or omit to do any act that would
result in a breach of any representation by the Company set forth in
this Agreement; or
(n) agree to do any of the foregoing.
7.2 Conduct of Business of Hain Pending the Merger. Except as
contemplated by this Agreement or as expressly agreed to in writing by the
Company, during the period from the date of this Agreement to the Effective
Time, each of Hain and its subsidiaries will use all commercially reasonable
efforts to keep substantially intact its business, properties and business
relationships and will take no action which would materially adversely affect
the ability of the parties to consummate the transactions contemplated by this
Agreement. Without limiting the generality of the foregoing, and except as
otherwise expressly provided in this Agreement, prior to the Effective Time,
Hain will not nor will it permit any of its subsidiaries to, without the prior
written consent of the Company, which consent shall not be unreasonably withheld
or delayed:
(a) amend its certificate of incorporation or by-laws
except as set forth in this Agreement;
(b) split, combine or reclassify any shares of its capital
stock, declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in
respect of its capital stock or purchase, redeem or otherwise acquire
any shares of its own capital stock or of any of its subsidiaries,
except as otherwise expressly provided in this Agreement;
(c) authorize, recommend, propose or announce an intention to
authorize, recommend or propose, or enter into any agreement in
principle or an agreement with respect to, any plan of liquidation or
dissolution or any sale or disposition of a material amount of its
assets (other than in the ordinary course of business; or
(d) take, cause or permit to be taken any action, whether
before or after the Effective Date, that could reasonably be expected
to prevent the Merger from constituting a "reorganization" within the
meaning of Section 368(a) of the Code:
(e) knowingly do any act or omit to do any act that would
result in a breach of any representation by Hain set forth in this
Agreement; or
(f) agree to do any of the foregoing.
ARTICLE VIII
COVENANTS AND AGREEMENTS
8.1 Preparation of the Registration Statement;
Stockholder Meeting.
(a) As soon as practicable following the date of this
Agreement, the Company and Hain shall prepare and file with the SEC the
Registration Statement, in which the Joint Proxy Statement shall be
included. Each of the Company and Hain shall use commercially
reasonable efforts to have the Registration Statement declared
effective under the Securities Act as promptly as practicable after
such filing. The Joint Proxy Statement shall include the recommendation
of the Board of Directors of the Company in favor of approval and
adoption of this Agreement and the Merger, except to the extent the
Board of Directors of the Company shall have withdrawn or modified its
approval or recommendation of this Agreement or the Merger as permitted
by Section 8.6, and the recommendation of the Board of Directors of
Hain in favor of approval of the issuance of Hain Common Stock in the
Merger. In addition, the Joint Proxy Statement will include an
amendment to Hain's Certificate of Incorporation changing the name of
Hain to The Hain Celestial Group, Inc. The Company shall use
commercially reasonable efforts to cause the Joint Proxy Statement to
be mailed to its stockholders, and Hain shall use commercially
reasonable efforts to cause the Joint Proxy Statement to be mailed to
its stockholders, in each case as promptly as practicable after the
Registration Statement becomes effective.
(b) The Company and Hain shall make all necessary filings with
respect to the Merger and the transactions contemplated thereby under
the Securities Act and the Exchange Act and applicable state blue sky
laws and the rules and regulations thereunder. Hain shall also take any
action required to be taken under any applicable state securities laws
in connection with the issuance of Hain Common Stock in the Merger. No
filing of, or amendment or supplement to, the Registration Statement
will be made by Hain without providing the Company and its counsel the
opportunity to review and comment thereon. Hain will advise the
Company, promptly after it receives notice thereof, of the time when
the Registration Statement has become effective or any supplement or
amendment has been filed, the issuance of any stop order, the
suspension of the qualification of the Hain Common Stock issuable in
connection with the Merger for offering or sale in any jurisdiction, or
any request by the SEC for amendment of the Registration Statement or
comments thereon and responses thereto or requests by the SEC for
additional information. If at any time prior to the Effective Time any
information relating to the Company or Hain, or any of their respective
affiliates, officers or directors, should be discovered by the Company
or Hain which should be set forth in an amendment or supplement to any
of the Registration Statement, so that any of such documents would not
include any misstatement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, the party
which discovers such information shall promptly notify the other
parties hereto and an appropriate amendment or supplement describing
such information shall be promptly filed with the SEC and, to the
extent required by law, disseminated to the stockholders of the Company
and Hain.
(c) The Company shall, as soon as practicable following the
effectiveness of the Registration Statement, duly call, give notice of,
convene and hold a meeting of its stockholders (the "Company
Stockholder Meeting") for the purpose of obtaining the approval and
adoption (the "Company Stockholder Approval") of the stockholders of
the Company of this Agreement and the Merger and shall, through its
Board of Directors, recommend to its stockholders the approval and
adoption of this Agreement and the Merger, and shall use all
commercially reasonable efforts to solicit from its stockholders
proxies in favor of approval and adoption of this Agreement and the
Merger; provided, however, that such recommendation is subject to
Section 8.6 hereof.
(d) Hain shall, as soon as practicable following the
effectiveness of the Registration Statement, duly call, give notice of,
convene and hold a meeting of its stockholders (the "Hain Stockholder
Meeting") for the purpose of obtaining the approval (the "Hain
Stockholder Approval") of the stockholders of Hain of the issuance of
shares of Hain Common Stock in the Merger and shall, through its Board
of Directors, recommend to its stockholders the issuance of shares of
Hain Common Stock in the Merger, and shall use all commercially
reasonable efforts to solicit from its stockholders proxies in favor of
the issuance of shares of Hain Common Stock in the Merger.
8.2 Letters and Consents of the Company's Accountants. The
Company shall use all commercially reasonable efforts to cause to be delivered
to Hain all consents required from the Company's independent accountants
necessary to effect the registration of the Hain Common Stock and make any
required filing with the SEC in connection with the Merger and the transactions
contemplated thereby.
8.3 Letters and Consents of Hain's Accountants. Hain shall use
all commercially reasonable efforts to cause to be delivered to Hain all
consents required from its independent accountants necessary to effect the
registration of the Hain Common Stock and make any required filing with the SEC
in connection with the Merger and the transactions contemplated thereby.
8.4 Additional Agreements; Cooperation.
(a) Subject to the terms and conditions herein provided, each
of the parties hereto agrees to use commercially reasonable efforts to
take, or cause to be taken, all action and to do, or cause to be done,
all things necessary, proper or advisable to consummate and make
effective as promptly as practicable the transactions contemplated by
this Agreement, and to cooperate with each other in connection with the
foregoing, including using commercially reasonable efforts (i) to
obtain all necessary waivers, consents and approvals from other parties
to loan agreements, material leases and other material contracts that
are specified in Section 8.4 to the Disclosure Schedule, (ii) to obtain
all necessary consents, approvals and authorizations as are required to
be obtained under any federal, state or foreign law or regulations,
(iii) to defend all lawsuits or other legal proceedings challenging
this Agreement or the consummation of the transactions contemplated
hereby, (iv) to lift or rescind any injunction or restraining order or
other order adversely affecting the ability of the parties to
consummate the transactions contemplated hereby, (v) to effect all
necessary registrations and filings, including, but not limited to,
filings under the HSR Act and submissions of information requested by
governmental authorities, (vi) provide all necessary information for
the Registration Statement and (vii) to fulfill all conditions to this
Agreement.
(b) Each of the Company and Hain will supply each other with
copies of all correspondence, filings or communications (or memoranda
setting forth the substance thereof) between it or its representatives,
on the one hand, and the Federal Trade Commission and the Antitrust
Division of the United States Department of Justice, on the other hand,
with respect to this Agreement, the Merger and the other transactions
contemplated hereby. Each of the parties hereto agrees to furnish to
the other party hereto such necessary information and reasonable
assistance as such other party may request in connection with its
preparation of necessary filings or submissions to any regulatory or
governmental agency or authority, including, without limitation, any
filing necessary under the provisions of the HSR Act or any other
applicable Federal or state statute.
8.5 Publicity. The Company and Hain agree to consult with each
other in issuing any press release and with respect to the general content of
other public statements with respect to the transactions contemplated hereby,
and shall not issue any such press release prior to such consultation, except as
may be required by law.
8.6 No Solicitation.
(a) The Company agrees that it shall not, nor shall it permit
any of its subsidiaries to, nor shall it authorize any officer,
director or employee or any investment banker, attorney, accountant,
agent or other advisor or representative of the Company or any of its
subsidiaries to, (i) solicit, initiate or knowingly encourage the
submission of any Takeover Proposal (as hereinafter defined), (ii)
enter into any agreement with respect to a Takeover Proposal or (iii)
participate in any discussions or negotiations regarding, or furnish to
any person any information with respect to, any inquiries or the making
of any proposal that constitutes, or may reasonably be expected to lead
to, any Takeover Proposal; provided, however, that to the extent
required by the fiduciary obligations of the Board of Directors of the
Company, as determined in good faith by a majority of the members
thereof (after consultation with outside legal counsel), the Company
may, in response to unsolicited requests therefor, participate in
discussions or negotiations with, or furnish information pursuant to a
confidentiality agreement no less favorable to such party in all
material respects than the confidentiality agreement between the
Company and Hain dated December 21, 1999 (the "Confidentiality
Agreement") to, any person who indicates a willingness to make a
Superior Proposal (as hereinafter defined). For all purposes of this
Agreement, "Takeover Proposal" means any proposal for a merger,
consolidation, share exchange, business combination or other similar
transaction involving the Company or any of its Significant
Subsidiaries (as hereinafter defined) or any proposal or offer to
acquire, directly or indirectly, 25% or more of any class of equity
securities in, 25% or more of any voting securities of, or 25% or more
of the assets of, the Company or any of its Significant Subsidiaries.
The Company shall cease and cause to be terminated all existing
discussions or negotiations with any persons conducted heretofore with
respect to, or that could reasonably be expected to lead to, any
Takeover Proposal. As used herein, a "Significant Subsidiary" means any
subsidiary of the Company that would constitute a "significant
subsidiary" within the meaning of Rule 1-02 of Regulation S-X of the
SEC.
(b) Except to the extent permitted below, neither the Board of
Directors of the Company nor any committee thereof shall (i) withdraw
or modify, in a manner adverse to Hain, the approval or recommendation
by the Board of Directors of the Company or any such committee of this
Agreement or the Merger or (ii) approve or recommend, or propose to
approve or recommend, any Takeover Proposal. Notwithstanding the
foregoing, (i) the Board of Directors of the Company, to the extent
required by its fiduciary obligations and subject to Section 10.2(b)
hereof, as determined in good faith by a majority of the members
thereof (after consultation with outside legal counsel), may approve or
recommend a Superior Proposal (and, in connection therewith, withdraw
or modify its approval or recommendation of this Agreement or the
Merger) and (ii) nothing contained in this Agreement shall prevent the
Board of Directors of the Company from complying with Rule 14d-9 and
Rule 14e-2 promulgated under the Exchange Act with regard to a Takeover
Proposal. For all purposes of this Agreement, "Superior Proposal" means
a bona fide written proposal made by a third party to acquire the
Company pursuant to a tender or exchange offer, a merger, a share
exchange, a sale of all or substantially all its assets or otherwise on
terms which a majority of the members of the Board of Directors of the
Company determines in good faith (taking into account the advice of any
independent financial advisors) to be more favorable to the Company and
its stockholders than the Merger (and any revised proposal made by
Hain) and for which financing, to the extent required, is then fully
committed or reasonably determined to be likely to be available by the
Board of Directors of the Company.
(c) The Company shall notify Hain promptly (but in no event
later than the next business day) after receipt by the Company (or its
advisors) of any Takeover Proposal or any request for nonpublic
information in connection with a Takeover Proposal or for access to the
properties, books or records of the Company by any person or entity
that informs the Company or its advisors that it is considering making,
or has made, a Takeover Proposal. Such notice to shall indicate the
identity of the person making the Takeover Proposal, inquiry or
contact, and the material terms and conditions of the Takeover
Proposal, inquiry or contact.
8.7 Access to Information.
(a) From the date of this Agreement until the Effective Time,
each of the Company and Hain, after reasonable notice, will give the
other party and its authorized representatives (including counsel,
environmental and other consultants, accountants and auditors)
reasonable access during normal business hours to all facilities,
personnel and operations and to all books and records of it and its
subsidiaries, will permit the other party to make such inspections as
it may reasonably require and will cause its officers and those of its
subsidiaries, after reasonable notice, to furnish the other party with
such financial and operating data and other information with respect to
its business and properties as such party may from time to time
reasonably request. Notwithstanding the foregoing, nothing in this
Section 8.7 shall require either the Company or Hain to provide access
or information if withholding such disclosure is reasonably determined
by the disclosing party's Board of Directors to be required by
fiduciary duties.
(b) All documents and information furnished pursuant to this
agreement shall be subject to the terms and conditions set forth in the
Confidentiality Agreement. This provision shall survive any termination
of this Agreement.
8.8 Notification of Certain Matters. Prior to the Effective
Time, the Company or Hain, as the case may be, shall promptly notify the other
of (i) its obtaining of actual knowledge as to the matters set forth in clauses
(x) and (y) below, or (ii) the occurrence, or failure to occur, of any event,
which occurrence or failure to occur would be likely to cause (x) any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Effective Time, or (y) any material failure of the Company or Hain, as the case
may be, or of any officer, director, employee or agent thereof, to comply with
or satisfy any covenant, condition or agreement to be complied with or satisfied
by it under this Agreement; provided, however, that no such notification shall
affect the representations or warranties of the parties or the conditions to the
obligations of the parties hereunder.
8.9 Resignation of Directors. At or prior to the Effective
Time, the Company shall deliver to Hain the resignations of such directors of
the Company's subsidiaries as Hain shall specify, effective at the Effective
Time.
8.10 Indemnification and Insurance. For a period of ten (10)
years after the Effective Time, (a) Hain and the Surviving Corporation shall
maintain in effect the current provisions regarding indemnification of officers
and directors contained in the certificate of incorporation and by-laws of the
Company and each of its subsidiaries and any directors, officers or employees
indemnification agreements of the Company and its subsidiaries, (b) for a period
of six (6) years after the Effective Time, Hain and the Surviving Corporation
shall maintain in effect the current policies of directors' and officers'
liability insurance and fiduciary liability insurance maintained by the Company
(provided that Hain may substitute therefor policies of at least the same
coverage and amounts containing terms and conditions which are, in the
aggregate, no less advantageous to the insured in any material respect) with
respect to claims arising from facts or events which occurred on or before the
Effective Time, and (c) for a period of ten (10) years after the Effective Time,
Hain and the Surviving Corporation shall indemnify the directors and officers of
the Company to the fullest extent to which Hain or the Surviving Corporation is
permitted to indemnify such officers and directors under its certificate of
incorporation and by-laws and the DGCL.
8.11 Fees and Expenses. Subject to Section 10.2, whether or
not the Merger is consummated, the Company and Hain shall bear their respective
expenses incurred in connection with the Merger, including, without limitation,
the preparation, execution and performance of this Agreement and the
transactions contemplated hereby, and all fees and expenses of investment
bankers, finders, brokers, agents, representatives, counsel and accountants,
except that Hain shall bear and pay 66.6% and the Company shall bear and pay
33.3% of the costs and expenses incurred in connection with the filing, printing
and mailing of the Joint Proxy Statement (including SEC filing fees).
8.12 Affiliates and Pooling Agreements. The Company shall use
commercially reasonable efforts to cause each person who is, at the time this
Agreement is submitted for adoption by the stockholders of the Company, an
"affiliate" of the Company for purposes of Rule 145 under the Securities Act, to
deliver to Hain as of the Closing Date, a written agreement substantially in the
form attached as Exhibit B hereto. Hain agrees that, after the Effective Time,
it will not take any action, and will not permit the Surviving Corporation to
take any action, that would prohibit Hain from accounting for the Merger as a
"pooling of interests."
8.13 Nasdaq Listing. Hain shall cause the Hain Common
Stock to be issued in connection with the Merger to be approved for listing
on the National Market System of The Nasdaq Stock Market, Inc., subject to
official notice of issuance, prior to the Closing Date.
8.14 Stockholder Litigation. Each of the Company and Hain
shall give the other the reasonable opportunity to participate in the defense of
any stockholder litigation against or in the name of the Company or Hain, as
applicable, and/or their respective directors relating to the transactions
contemplated by this Agreement.
8.15 Company Employees.
(a) From and after the Effective Time, Hain and the Surviving
Corporation will honor and assume, in accordance with their terms, all
existing written employment agreements between the Company and any
officer, director, or employee of the Company. Hain shall treat
employment by the Company prior to the Effective Time the same as
employment with Hain for purposes of vesting and eligibility under any
employment benefit plan of Hain and its subsidiaries, including the
Surviving Corporation.
(b) Hain confirms that it is Hain's intention that, until the
first anniversary of the Effective Time, subject to applicable law,
Hain and the Surviving Corporation will provide salary and benefits to
employees of the Company who continue to be employed by the Company
after the Effective Time ("Continuing Employees") which will, in the
aggregate, be substantially equivalent, in the aggregate, to those
currently provided by the Company to its employees. Notwithstanding the
foregoing, nothing in this Agreement shall otherwise limit the
Surviving Corporation's right to amend, modify or terminate any
employee benefit plan or arrangement. Hain agrees that any person
employed by the Company at the Effective Time whose employment is
terminated by the Surviving Corporation on or prior to the first
anniversary of the Effective Time shall be provided severance benefits
substantially equivalent, in the aggregate, to those currently provided
under the Company's severance policies.
(c) Prior to the Effective Time, unless such action will
effect the "pooling of interest" accounting treatment of the Merger,
the Company will terminate the Employee Stock Ownership Plan of the
Company ("ESOP") and will vest all participants in accordance with the
terms of the ESOP. To the extent that shares of Company Common Stock
held by the ESOP have not been distributed to participants prior to the
Closing Date, such shares shall be converted into Hain Company Stock on
the Closing Date in accordance with the provisions of Article III
without further action by any participant. The Company will submit the
ESOP to the Internal Revenue Service for a determination of
qualification on termination prior to the Closing Date.
(d) From and after the Effective Time, Hain or the Surviving
Corporation will honor and assume, in accordance with its terms, the
Company's Employee Stock Purchase Plan ("Employee Stock Purchase
Plan"), provided however that Hain and the Surviving Corporation
reserve the right in accordance with the terms of the Employee Stock
Purchase Plan and to the extent permitted by law, to terminate the
Employee Stock Purchase Plan at any time following the Effective Date.
Participants in the Employee Stock Purchase Plan who already have
Company Common Stock in their share accounts shall be entitled to
receive Hain Common Stock in accordance with the provisions of Article
III without further action by any participant.
(e) As of the Effective Time, by virtue of the Merger and
without any action on the part of the holders thereof, Hain or the
Surviving Corporation shall assume all of the obligations of the
Company under the Company's Incentive and Non-Qualified Stock Option
Plan, the Company's 1993 Long-Term Incentive Plan, the Company's 1994
Non-Employee Director Compensation Plan and any other option agreement
pursuant to which the Company has issued stock options (collectively,
the "Stock Option Plans"),with the effect that each option to purchase
shares of Company Common Stock that is outstanding under the Stock
Option Plans immediately prior to the Effective Time shall be assumed
by Hain or the Surviving Corporation in such a manner that each such
option shall be exercisable on the same terms and conditions as under
the applicable Stock Option Plan and shall vest in accordance with the
vesting schedule applicable to such option prior to such
assumption(taking into account any vesting which may occur as a result
of the Merger), except that (i) each such option shall be exercisable
for the number of Hain Common Stock (rounded down to the nearest whole
share) equal to the number of shares of Company Common Stock subject to
such option multiplied by the Exchange Ratio, and (ii) the option price
per share of Hain Common Stock shall be an amount equal to the option
price per share of Company Common Stock subject to such option in
effect immediately prior to the Closing Date divided by the Exchange
Ratio (rounded up to the nearest whole cent). Notwithstanding in the
foregoing, after the Effective Time, Hain may, at its option, adopt or
amend substitute option plans to provide substantially similar benefits
for any of the aforementioned plans.
(f) From and after the Effective Time, Hain or the Surviving
Corporation will honor and assume, in accordance with its terms, the
Thrift Plan of the Company ("Thrift Plan"), provided however that Hain
and the Surviving Corporation reserve the right in accordance with the
terms of the Thrift Plan and to the extent permitted by law, to
terminate the Thrift Plan, merge the Thrift Plan or transfer assets and
liabilities from the thrift Plan to a 401(k) plan sponsored by Hain or
an affiliate.
ARTICLE IX
CONDITIONS TO CLOSING
9.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger is subject
to the satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Stockholder Approvals. Company Stockholder Approval
and Hain Stockholder Approval shall have been obtained.
(b) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated
or shall have expired.
(c) No Injunctions or Restraints. No judgment, order, decree,
statute, law, ordinance, rule or regulation entered, enacted,
promulgated, enforced or issued by any court or other governmental
entity of competent jurisdiction or other legal restraint or
prohibition (collectively, "Restraints") shall be in effect preventing
the consummation of the Merger.
(d) Pooling of Interests; Consents. The Merger shall qualify
for "pooling of interests" accounting treatment, and the Company and
Hain shall each have received letters to that effect from each of Ernst
& Young LLP, independent auditors for Hain, and Deloitte & Touche LLP,
independent auditors for the Company, dated the Closing Date. Hain
shall have received all consents required from the independent
accountants in connection with the filing of the Registration Statement
necessary to effect the registration of the Hain Common Stock.
(e) Registration Statement. The Registration Statement shall
have become effective under the Securities Act and shall not be the
subject of any stop order or proceedings seeking a stop order and no
stop order or similar restraining order shall be threatened or entered
by the SEC or any state securities administration preventing the
Merger.
(f) Nasdaq Listing. The shares of Hain Common Stock
issuable to the Company's stockholders as contemplated by this
Agreement shall have been approved for listing on the National Market
System of The Nasdaq Stock Market, Inc., subject to official notice
of issuance.
(g) Consents and Approvals. All necessary consents and
approvals of any United States or any other governmental authority or
any other third party required for the consummation of the transactions
contemplated by this Agreement shall have been obtained; except for
such consents and approvals the failure to obtain which individually or
in the aggregate would not have a material adverse effect on Hain.
9.2 Conditions to Obligations of Hain. The obligation of Hain
to effect the Merger is further subject to satisfaction or waiver of the
following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company set forth herein, to the extent qualified
with respect to materiality, shall be true and correct in all respects,
and to the extent not so qualified shall be true and correct in all
material respects, in each case as of the date of this Agreement and at
and as of the Effective Time as if made at and as of such time (except
to the extent expressly made as of earlier date, in which case as of
such date). The Company shall have delivered to Hain an officer's
certificate, in form and substance satisfactory to Hain and its
counsel, to the effect of the matters stated in this Section 9.2(a),
Section 9.2(b) and Section 9.2(c).
(b) Performance of Obligations of the Company. The Company
shall have performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the Closing
Date.
(c) No Material Adverse Change. Except as disclosed in the
Company Current SEC Reports, at any time after September 30, 1999,
there shall not have occurred any material adverse change in the
general affairs, management, business, operations, assets, condition
(financial or otherwise) or prospects of the Company and its
subsidiaries, taken as a whole.
(d) Affiliate Letters. Hain shall have received from each
affiliate of the Company a written agreement substantially in the form
attached as Exhibit B hereto as set forth in Section 8.12.
(e) Tax Opinion. Hain shall have received an opinion of Cahill
Gordon & Reindel, counsel to Hain, dated on or about the Closing Date,
based upon such representations and assumptions as counsel may
reasonably deem relevant, to the effect that the Merger will be treated
for federal income tax purposes as a reorganization qualifying under
the provisions of Section 368(a) of the Code; that each of Hain, Hain
Subsidiary and the Company will be a party to the reorganization within
the meaning of Section 368(b) of the Code; that no gain or loss will be
recognized by a stockholder of the Company on the exchange of Company
shares for the Merger Consideration pursuant to the Merger (except with
respect to any cash received in lieu of a fractional share).
9.3 Conditions to Obligations of the Company. The obligation
of the Company to effect the Merger is further subject to satisfaction or waiver
of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Hain set forth herein, to the extent qualified with
respect to materiality, shall be true and correct in all respects, and
to the extent not so qualified shall be true and correct in all
material respects, in each case as of the date of this Agreement and at
and as of the Effective Time as if made at and as of such time (except
to the extent expressly made as of an earlier date, in which case as of
such date). Hain shall have delivered to the Company an officer's
certificate, in form and substance satisfactory to the Company and its
counsel, to the effect of matters stated in this Section 9.3(a),
Section 9.3(b) and Section 9.3(c).
(b) Performance of Obligations of Hain and Hain Subsidiary.
Hain and Hain Subsidiary shall have performed in all material respects
all obligations required to be performed by them under this Agreement
at or prior to the Closing Date.
(c) No Material Adverse Change. Except as disclosed in the
Hain Current SEC Reports, at any time after June 30, 1999, there shall
not have occurred any material adverse change in the general affairs,
management, business, operations, assets, condition (financial or
otherwise) or prospects of Hain and its subsidiaries, taken as a whole.
(d) Tax Opinion. The Company shall have received an opinion of
Bartlit Beck Herman Palenchar & Scott, dated on or about the Closing
Date, based upon such representations and assumptions as counsel may
reasonably deem relevant, to the effect that the Merger will be treated
for federal income tax purposes as a reorganization qualifying under
the provisions of Section 368(a) of the Code; that each of Hain, Hain
Subsidiary and the Company will be a party to the reorganization within
the meaning of Section 368(b) of the Code; that no gain or loss will be
recognized by a stockholder of the Company on the exchange of Company
Shares for the Merger Consideration pursuant to the Merger (except with
respect to any cash received in lieu of a fractional share).
ARTICLE X
TERMINATION
10.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval of this Agreement
by the Company's stockholders:
(a) by mutual written consent of the Company and Hain;
(b) by either the Company or Hain:
(i) if the Merger shall not have been consummated by
December 31, 2000; provided, however, that the right
to terminate this Agreement pursuant to this Section
10.1(b)(i) shall not be available to any party whose
failure to perform any of its obligations under this
Agreement results in the failure of the Merger to be
consummated by such time;
(ii) if the Company Stockholder Approval or Hain
Stockholder Approval shall not have been obtained at
a Company Stockholder Meeting or Hain Stockholder
Meeting, as the case may be, duly convened therefor
or at any adjournment or postponement thereof; or
(iii) if any Restraint having any of the effects set
forth in Section 9.1(c) shall be in effect and shall
have become final and nonappealable;
(c) by Hain, (i) if the Board of Directors of the Company
shall withdraw, modify, condition, qualify or otherwise change its
recommendation of approval and adoption of this Agreement or the Merger
in a manner adverse to Hain or (ii) if prior to the Company Stockholder
Meeting, the Board of Directors of the Company approves an agreement to
effect a Superior Proposal in accordance with Section 8.6(b);
(d) by Hain, if the Company shall have breached or failed to
perform in any material respect any of its representations, warranties,
covenants or other agreements contained in this Agreement (which breach
is not cured within 15 business days after receipt by the Company of a
written notice of such breach from Hain specifying the breach and
requesting that it be cured);
(e) by the Company (i) if the Board of Directors of Hain shall
withdraw, modify, condition, qualify or otherwise change its
recommendation of approval and adoption of this Agreement and the
Merger in a manner adverse to the Company or (ii) if, prior to the
Company Stockholder Meeting, the Board of Directors of the Company
approves an agreement to effect a Superior Proposal in accordance with
Section 8.6(b); and
(f) by the Company, if Hain shall have breached or failed to
perform in any material respect any of its representations, warranties,
covenants or other agreements contained in this Agreement (which breach
is not cured within 15 business days after receipt by Hain of a written
notice of such breach from the Company specifying the breach and
requesting that it be cured).
10.2 Effect of Termination.
(a) The termination of this Agreement shall become effective
upon delivery to the other party of written notice thereof. In the
event of the termination of this Agreement pursuant to the foregoing
provisions of this Article X, this Agreement shall become void and have
no effect, with no liability on the part of any party (except as
provided in paragraphs (b), (c), (d) or (e) below) or its stockholders
or directors or officers in respect thereof except for agreements which
survive the termination of this Agreement and except for liability that
Hain or the Company might have arising from a breach of this Agreement.
(b) In the event of a termination of this Agreement (i) by
Hain pursuant to Section 10.1(c) or Section 10.1(d)(if the breach or
failure to perform is due to the Company's intentional or bad faith
acts) or (ii) by the Company pursuant to Section 10.1(e)(ii), then the
Company shall pay Hain by wire transfer of immediately available funds
to an account specified by Hain (i) within two business days of
receiving the documentation described below up to $3,000,000 to
reimburse Hain for its documented fees and expenses (including the fees
and expenses of counsel, accountants, consultants and advisors)
incurred in connection with this Agreement and the transactions
contemplated hereby and (ii) within two business days of such
termination, a fee of $8,000,000 as liquidated damages.
(c) In the event of a termination of this Agreement by Hain
pursuant to Sections 10.1(b)(ii) (in the event Company Stockholder
Approval is not obtained) or 10.1(d)(if the breach or failure to
perform is due to circumstances other than those set forth in Section
10.2(b)), then the Company shall pay Hain by wire transfer of
immediately available funds to an account specified by Hain within two
business days of receiving the documentation described below up to
$3,000,000 to reimburse Hain for its documented fees and expenses
(including the fees and expenses of counsel, accountants, consultants
and advisors) incurred in connection with this Agreement and the
transactions contemplated hereby; provided in the event that at any
time within the twelve months following termination of this Agreement
under the circumstances set forth in this Section 10.2(c), the Company
executes a definitive agreement which is consummated within eighteen
months with any third party other than Hain relating to a Superior
Proposal, than the Company shall within two business days of the date
of the execution of such definitive agreement pay Hain by wire transfer
of immediately available funds to an account specified by Hain a fee of
$8,000,000 as liquidated damages.
(d) In the event of a termination of this Agreement by the
Company pursuant to Section 10.1(e)(i) or Section 10.1(f) (if the
breach or failure to perform is due to Hain's intentional or bad faith
acts), then Hain shall pay the Company by wire transfer of immediately
available funds to an account specified by the Company (i) within two
business days of receiving the documentation described below up to
$3,000,000 to reimburse the Company for its documented fees and
expenses (including the fees and expenses of counsel, accountants,
consultants and advisors) incurred in connection with this Agreement
and the transactions contemplated hereby and (ii) within two business
days of such termination, a fee of $8,000,000 as liquidated damages.
(e) In the event of a termination of this Agreement by the
Company pursuant to Sections 10.1(b)(ii) (in the event Hain Stockholder
Approval is not obtained) or 10.1(f) (if the breach or failure to
perform is due to circumstances other than those set forth in Section
10.2(d)), then Hain shall within two business days of receiving the
documentation described below pay the Company by wire transfer of
immediately available funds to an account specified by the Company up
to $3,000,000 to reimburse the Company for its documented fees and
expenses (including the fees and expenses of counsel, accountants,
consultants and advisors) incurred in connection with this Agreement
and the transactions contemplated hereby.
(f) By agreeing to liquidated damages in Sections 10.2(b), (c)
and (d), the parties acknowledge that (i) such liquidated damages are
an integral part of the transactions contemplated by this Agreement and
constitute liquidated damages and not a penalty, and (ii) such
liquidated damages are necessary because actual damages arising from
the loss of opportunity would not be determinable with any degree of
certainty. If a party fails to promptly pay the liquidated damages due
under Sections 10.2(b), (c) and (d), the defaulting Party shall pay the
costs and expenses (including legal fees and expenses) in connection
with any action, including the filing of any lawsuit or other legal
action, taken to collect payment, together with interest on the amount
of any unpaid fee at the publicly announced prime rate of Citibank,
N.A. from the date such damages were required to be paid.
ARTICLE XI
MISCELLANEOUS
11.1 Nonsurvival of Representations and Warranties. None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time. This
Section 11.1 shall not limit any covenant or agreement of the parties which by
its terms contemplates performance after the Effective Time.
11.2 Waiver. At any time prior to the Effective Date, any
party hereto may (i) extend the time for the performance of any of the
obligations or other acts of any other party hereto, (ii) waive any inaccuracies
in the representations and warranties of the other party contained herein or in
any document delivered pursuant hereto, and (iii) waive compliance with any of
the agreements of any other party or with any conditions to its own obligations
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
duly authorized by and signed on behalf of such party.
11.3 Notices.
(a) Any notice or communication to any party hereto shall be
duly given if in writing and delivered in person or mailed by first
class mail (registered or certified, return receipt requested),
facsimile or overnight air courier guaranteeing next day delivery, to
such other party's address.
If to Hain or Hain Subsidiary:
The Hain Food Group, Inc.
50 Charles Lindbergh Boulevard
Uniondale, New York 11553
Facsimile No.: (516) 237-6240
Attention: President
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Facsimile No.: (212) 269-5420
Attention: Roger Meltzer, Esq.
If to the Company:
Celestial Seasonings, Inc.
4600 Sleepytime Drive
Boulder, Colorado 80301-3292
Facsimile No.: (303) 939-8444
Attention: Chairman and President
with a copy to:
Bartlit Beck Herman Palenchar
& Scott
The Kittredge Building
511 Sixteenth Street
Denver, Colorado 80202
Facsimile No.: (303) 592-3140
Attention: Thomas R. Stephens, Esq.
(b) All notices and communications will be deemed to have been
duly given: at the time delivered by hand, if personally delivered;
five business days after being deposited in the mail, if mailed; when
sent, if sent by facsimile; and the next business day after timely
delivery to the courier, if sent by overnight air courier guaranteeing
next day delivery.
11.4 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.5 Interpretation. The headings of articles and sections
herein are for convenience of reference, do not constitute a part of this
Agreement, and shall not be deemed to limit or affect any of the provisions
hereof. As used in this Agreement, "person" means any individual, corporation,
limited or general partnership, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof; "subsidiary" of any person means (i) a corporation more
than 50% of the outstanding voting stock of which is owned, directly or
indirectly, by such person or by one or more other subsidiaries of such person
or by such person and one or more subsidiaries thereof or (ii) any other person
(other than a corporation) in which such person, or one or more other
subsidiaries of such person or such person and one or more other subsidiaries
thereof, directly or indirectly, have at least a majority ownership and voting
power relating to the policies, management and affairs thereof; and "voting
stock" of any person means capital stock of such person which ordinarily has
voting power for the election of directors (or persons performing similar
functions) of such person, whether at all times or only so long as no senior
class of securities has such voting power by reason of any contingency. In
determining whether a material adverse effect has occurred in connection with
the business or prospects of the Company, month to month fluctuations in sales
either (i) consistent with historical performance or (ii) resulting from
requests relating to the conduct of the Company's business received from Hain
after the date hereof but prior to the Effective Time, shall not be deemed to
constitute a material adverse effect.
11.6 Amendment. This Agreement may be amended by the parties
at any time before or after any required approval of matters presented in
connection with the Merger by the stockholders of each of Hain and the Company;
provided, however, that after any such approval, there shall not be made any
amendment that by law requires further approval by such stockholders without the
further approval of such stockholders; and provided further, that this Agreement
shall not be amended after the Effective Time. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties.
11.7 No Third Party Beneficiaries. Except for the rights set
forth under Section 8.10, nothing in this Agreement shall confer any rights upon
any person or entity which is not a party or permitted assignee of a party to
this Agreement.
11.8 Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York without
regard to principles of conflicts of laws.
11.9 Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
The parties accordingly agree that the parties will be entitled to an injunction
or injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement, this being in addition to any other
remedy to which they are entitled at law or in equity.
11.10 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.
11.11 No Recourse Against Others. No director, officer or
employee, as such, of Hain, Hain Subsidiary or the Company or any of their
respective subsidiaries shall have any liability for any obligations of Hain,
Hain Subsidiary or the Company, respectively, under this Agreement for any claim
based on, in respect of or by reasons of such obligations or their creation.
11.12 Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Merger
Agreement to be executed by their duly authorized officers all as of the day and
year first above written.
THE HAIN FOOD GROUP, INC.
By: /s/ Irwin D. Simon
Name: Irwin D. Simon
Title: President and Chief
Executive Officer
CELESTIAL SEASONINGS, INC.
By:/s/ Mo Siegel
Name: Mo Siegel
Title: Chairman
<PAGE>
EXHIBIT A
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CELESTIAL SEASONINGS, INC.
1........NAME. The name of the corporation is Celestial Seasonings, Inc.
(the "Company").
2........REGISTERED OFFICE. The address of the Company's
registered office in the State of Delaware is Corporation Trust Center, 1209
Orange Street, in the City of Wilmington, County of New Castle. The name of its
registered agent at such address is The Corporation Trust Company.
3........PURPOSES. The purpose for which the Company is
organized is to engage in any and all lawful acts and activities for which
corporations may be organized under the General Corporation Law of the State of
Delaware.
4........CAPITAL STOCK. The Company is authorized to issue one
class of stock which is designated Common Stock. The total number of shares of
Common Stock which the Company shall have authority to issue is: 100 shares of
Common Stock, par value of $.01 per share.
5........EXISTENCE. The Company is to have perpetual existence.
6........BY-LAWS. In furtherance and not in limitation of the
powers conferred by statute, the Board of Directors of the Company is expressly
authorized to make, alter or repeal the by-laws of the Company.
7........ELECTION OF DIRECTORS. Elections of directors need not be by written
ballot unless the by-laws of the Company shall so provide.
8........MEETINGS; CORPORATE BOOKS. Meetings of stockholders
may be held within or without the State of Delaware, as the by-laws may provide.
The books of the Company may be kept (subject to any provision of law) outside
the State of Delaware at such place or places as may be designated from time to
time by the Board of Directors or in the by-laws of the Company.
9........AMENDMENT AND/OR REPEAL OF CERTIFICATE. The Company
reserves the right to amend, alter, change or repeal any provision contained in
this Certificate of Incorporation, in the manner now or hereafter prescribed by
statute, and all rights conferred upon stockholders herein are granted subject
to this reservation.
10.......DIRECTOR'S LIABILITY. No director of the Company
shall be personally liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director; provided that this provision
shall not eliminate or limit the liability of a director (i) for any breach of
such director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which such director derived an
improper personal benefit.
<PAGE>
EXHIBIT B
[FORM OF COMPANY AFFILIATE LETTER]
Ladies and Gentlemen:
I have been advised that I may be considered to be an
"affiliate" of Celestial Seasonings, Inc. (the "Company") for purposes of Rule
145 under the Securities Act of 1933, as amended (the "Securities Act"), and for
purposes of generally accepted accounting principles as such term relates to
pooling of interests accounting treatment for certain business combinations or
the Securities and Exchange Commission's Staff Accounting Bulletin No. 65.
The Hain Food Group, Inc. ("Hain") and the Company have
entered into an Agreement and Plan of Merger dated as of March 5, 2000 (the
"Merger Agreement"). Upon consummation of the transactions contemplated by the
Merger Agreement (the "Merger"), I will receive shares of capital stock of Hain
for all of the shares of capital stock of the Company owned by me or as to which
I may be deemed a beneficial owner. I own ______ shares of common stock of the
Company. Such shares (including the rights attached thereto) will be converted
in the Merger into shares of common stock of Hain as described in the Merger
Agreement. The shares of Company capital stock and Hain capital stock owned by
me or as to which I may deem to be a beneficial owner prior to the Merger are
hereinafter collectively referred to as the "Pre-Merger Stock" and the shares of
Hain capital stock received by me in the Merger are hereinafter collectively
referred to as the "Exchange Stock." This agreement is hereinafter referred to
as the "Letter Agreement."
I represent and warrant to, and agree with, the Company and
Hain that:
A. I have read this Letter Agreement and the Merger Agreement
and have discussed their requirements and other applicable limitations
upon my ability to sell, transfer or otherwise dispose of the
Pre-Merger Stock and Exchange Stock, to the extent I felt necessary,
with my counsel or counsel for the Company.
B. The shares of common stock of Hain that I shall receive in
exchange for my shares of common stock of the Company are not being
acquired by me with a view to their distribution except to the extent
and in the manner provided for in paragraph (d) of Rule 145 under the
Securities Act.
C. I agree with you not to dispose of any such shares of
common stock of Hain in any manner that would violate Rule 145.
I further agree with you that the certificate or certificates
representing such shares of common stock of Hain may bear a legend
referring to the restrictions on disposition thereof in accordance with
the provisions of the foregoing paragraph and that stop transfer
instructions may be filed with respect to such shares with the transfer
agent for such shares.
D. I understand that stop transfer instructions will be given
to the Company, Hain and their respective transfer agents, as the case
may be, with respect to the shares of Pre-Merger Stock and the Exchange
Stock in connection with the restrictions set forth herein.
E. Notwithstanding the foregoing and any other agreements on
my part in connection with the Pre-Merger Stock and the Exchange Stock,
I hereby agree (i) that I will not sell or otherwise reduce my risk
relative to any shares of Pre-Merger Stock during the period of thirty
days prior to the effective date of Merger and (ii) that I will not
sell or otherwise reduce my risk relative to any shares of Exchange
Stock until financial results covering at least thirty days of combined
operations have been published following the effective date of the
Merger so as to ensure that the Merger qualified as a pooling of
interests for accounting purposes.
It is understood and agreed that this Letter Agreement shall
terminate and be of no further force and effect if the Merger Agreement is
terminated pursuant to the terms thereof.
The agreements made by me in the foregoing paragraphs are on
the understanding and condition that you agree, in the event that any shares may
be disposed of in accordance with the provisions of paragraph E above, to
deliver in exchange for the certificate or certificates representing such shares
a new certificate or certificates representing such shares not bearing the
legend and not subject to the stop transfer instruction referred to in paragraph
D above, and so long as I hold shares of stock subject to the provisions of this
agreement (but not for a period in excess of two years from the date of
consummation of the Merger) to file with the Securities and Exchange Commission
or otherwise make publicly available all information about Hain, to the extent
available to you without unreasonable effort or expense, necessary to enable me
to resell shares under the provisions of paragraph (d) of Rule 145.
<PAGE>
This Letter Agreement shall be binding on my heirs, legal
representatives and successors.
Very truly yours,
[Name of Stockholder]
By:________________________*
Name:
Title:
*To be completed if the stockholder is an entity other than an individual
<PAGE>
EXHIBIT 10.1
VOTING AGREEMENT
VOTING AGREEMENT made this 5th day of March, 2000 (the "Agreement"),
between Irwin D. Simon (the "Stockholder"), in his capacity as a stockholder of
The Hain Food Group, Inc., a Delaware corporation (the "Company"), and Celestial
Seasonings, Inc., a Delaware corporation("Celestial").
R E C I T A L S
Concurrently with the execution of this Agreement, Celestial and the
Company have entered into a Merger Agreement dated as of the date of this
Agreement (the "Merger Agreement") pursuant to which a subsidiary of the Company
to be formed will merge with and into Celestial (the "Merger"). The transactions
contemplated by the Merger Agreement are collectively referred to as the
"Transactions."
In order to induce Celestial to enter into the Merger Agreement with
the Company, Celestial has requested, and the Stockholder has agreed, that the
Stockholder enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
ARTICLE 1
Voting Agreement
The Stockholder hereby agrees with Celestial as follows:
1.1. Voting of Shares. (a) At any meeting of the stockholders of the
Company, however called, at every adjournment of any such meeting, and in
connection with any written consent of the stockholders of the Company, the
Stockholder will cause all of his Shares to be voted, during the term of this
Agreement, in favor of (i) the Merger and the approval and adoption of the
Merger Agreement, and (ii) all other Transactions as to which stockholders of
the Company are called upon to vote.
For purposes of this Agreement, (i) "Person" shall mean an individual,
partnership, limited liability company, corporation, joint stock company, trust,
estate, joint venture, association or unincorporated organization, or any other
entity or organization, including a government or political subdivision or any
agency or instrumentality thereof, and (ii) "Shares" shall mean any and all
shares of capital stock of the Company which are entitled to vote in any
election of the board of directors of the Company now owned and/or subsequently
acquired by the Stockholder through purchase, gift, stock splits, stock
dividends and the exercise of stock options.
(b) The Stockholder agrees that during the term of this Agreement, the
Stockholder shall attend or otherwise participate in all duly called stockholder
meetings and any adjournments of such meetings and in all actions by written
consent of stockholders in which the Merger or any Transaction is being
considered.
(c) The parties hereto agree and acknowledge that nothing in this
Article I or any other part of this Agreement shall be construed as requiring
the Stockholder to propose, endorse, approve or recommend the Merger Agreement
or the transactions contemplated thereby in the Stockholder's capacity as a
director of the Company in any manner inconsistent with his fiduciary duties as
director.
1.2. No Proxies or Encumbrances. The Stockholder shall not (i) grant
any proxies or enter into any voting trust or other agreement or arrangement
with respect to the voting of any of the Shares in a manner which would be
inconsistent with the provisions of this Agreement, (ii) sell, assign, transfer,
encumber or otherwise dispose of or enter into any contract, option or other
arrangement or understanding with respect to, the direct or indirect sale,
assignment, transfer, encumbrance or other disposition of any of his Shares or
any interest therein except (A) for Permitted Transfers to Permitted Transferees
(as such terms are defined below) or (B) any other disposition by the
Stockholder of up to 100,000 of his Shares in the aggregate or (iii) seek or
solicit any of the foregoing. For purposes of this Agreement, (i) "Permitted
Transferee" means any Person controlled, directly or indirectly, by Stockholder,
Stockholder's spouse and children, and any trust for the benefit of Stockholder,
Stockholder's spouse or children, and (ii) each transfer to a Permitted
Transferee shall constitute a "Permitted Transfer" only if it is a:
(i) transfer to a Permitted Transferee and, in the case of a Permitted
Transferee, transfer to the Stockholder or to other Permitted Transferees of
Stockholder; provided that, any such Permitted Transferee shall enter into a
supplement to this Agreement, consented to in writing by Celestial, agreeing to
be bound by the terms of this Agreement; or
(ii) pledge to a bank or securities firm of Stockholder's Shares securing a
bona fide loan; provided that the pledge agreement with the pledgee shall
provide that the Stockholder shall continue at all times to have the right, from
time to time, to vote and to give consents, ratifications and waivers with
respect to such pledged Shares; and provided further that any pledge agreement
that Stockholder enters into shall provide that the pledgee shall give written
notice to Celestial at least 10 days prior to the date such pledgee takes any
action to exercise any remedies with respect to such Shares;
provided that no such transfer is in violation of applicable federal or state
securities laws.
ARTICLE 2
Representations and Warranties
The Stockholder represents and warrants to Celestial as follows:
2.1. Valid Title. The Stockholder is the true and lawful owner of 100%
of the Shares set forth next on the signature page to this Agreement, with full
power to vote and dispose of such Shares, and there are no restrictions on the
Stockholder's voting rights or rights of disposition pertaining to such Shares
which would be inconsistent with this Agreement or interfere with Stockholder's
performance of this Agreement.
2.2. Non-Contravention. The execution, delivery and performance by the
Stockholder of this Agreement and the consummation of the transactions
contemplated hereby, do not and will not contravene or constitute a default
under or give rise to a right of termination, cancellation or acceleration of
any material right or obligation of the Stockholder or to a loss of any material
benefit of the Stockholder under any provision of applicable law or regulation
or of any agreement, judgment, injunction, order, decree or other instrument
binding on the Stockholder.
2.3. Authorization. The execution, delivery and performance by the
Stockholder of this Agreement are within the Stockholder's powers and have been
duly authorized by all necessary actions.
2.4. Binding Effect. This Agreement constitutes a valid and binding
agreement of the Stockholder, enforceable against the Stockholder in accordance
with its terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally.
2.5. No Other Shares. The number of Shares set forth on the signature
page to this Agreement are the only Shares owned by the stockholder.
ARTICLE 3
Miscellaneous
3.1. Notices. All notices, requests and other communications to any
party hereunder shall be deemed to have been duly given when delivered in
person, by telegram, facsimile or by registered or certified mail (postage
prepaid, return receipt requested) to such party at its address set forth on the
signature pages hereto.
3.2. Amendments; No Waivers. (a) Any provision of this Agreement
may be amended or waived if, and only if, such amendment or waiver is in writing
and signed, in the case of an amendment, by each of the parties hereto, or in
the case of a waiver, by the party against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
3.3. Termination. This Agreement shall automatically terminate upon
termination of the Merger Agreement in accordance with its terms.
3.4. Severability. If any provision of this Agreement or the
application of such provision to any party or set of circumstances shall, in any
jurisdiction and to any extent, be finally held invalid or unenforceable, such
term or provision shall only be ineffective as to such jurisdiction, and only to
the extent of such invalidity or unenforceability, without invalidating or
rendering unenforceable any other terms or provisions of this Agreement or under
any other circumstances, and the parties shall negotiate in good faith a
substitute provision which comes as close as possible to the invalidated or
unenforceable term or provision, and which puts each party in a position as
nearly comparable as possible to the position it would have been in but for the
finding of invalidity or unenforceability, while remaining valid and
enforceable.
3.5. Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, among
the parties with respect to the subject matter hereof.
3.6. Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns (and, in the case of the Stockholder, the heirs and
executors of the Stockholder); provided that, except as permitted by Section 1.2
or by will or intestacy, no party may assign, delegate or otherwise transfer all
or any of his or its rights or obligations under this Agreement without the
consent of the other party hereto.
3.7. Counterparts; Effectiveness. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement shall become effective when each party shall have received
counterparts (or signature pages) hereof signed by all of the other parties.
3.8. Governing Law; Specific Performance. The terms of this Agreement
shall be construed in accordance with and governed by the law of the State of
Delaware (without regard to principles of conflict of laws). Each of the parties
acknowledges and agrees that the parties' respective remedies at law for a
breach or threatened breach of any of the provisions of this Agreement would be
inadequate and, in recognition of that fact, each agrees that, in the event of a
breach or threatened breach by any party of the provisions of this Agreement, in
addition to any remedies at law, each party, without posting any bond, shall be
entitled to seek equitable relief in the form of specific performance, a
temporary restraining order, a temporary or permanent injunction or any other
equitable remedy which may then be available.
3.9. Expenses. All costs and expenses incurred in connection with
this Agreement shall be paid by the party incurring such cost or expense.
3.10. Certain Events. The Stockholder agrees that this Agreement and
the obligations hereunder shall attach to its Shares and shall be binding upon
any Person to which legal or beneficial ownership of such shares shall pass,
whether by operation of law or otherwise.
3.11. No Revocation. The voting agreements contained herein are
coupled with an interest and may not be revoked prior to termination of this
Agreement in accordance with Section 3.3, except by written consent of
Celestial.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or
caused this Agreement to be duly executed by their respective authorized
officers or representatives, as of the day and year first above written.
Celestial Seasonings, Inc.
By: Mo Siegel
Its: Chairman
Address: 4600 Sleepytime Drive
Boulder, CO 80301-3292
Stockholder:
/s/ Irwin D. Simon
Irwin D. Simon
Number of Shares Owned: 705,378
Address: 50 Charles Lindbergh Boulevard,
Uniondale, New York 11553
<PAGE>
EXHIBIT 10.2
VOTING AGREEMENT
VOTING AGREEMENT made this 5th day of March, 2000 (the
"Agreement"), between Mo Siegel (the "Stockholder"), in his capacity as a
stockholder of Celestial Seasonings, Inc., a Delaware corporation (the
"Company"), and The Hain Food Group, Inc., a Delaware corporation ("Hain").
R E C I T A L S
Concurrently with the execution of this Agreement, Hain and
the Company have entered into a Merger Agreement dated as of the date of this
Agreement (the "Merger Agreement") pursuant to which a subsidiary of Hain to be
formed will merge with and into the Company (the "Merger"). The transactions
contemplated by the Merger Agreement are collectively referred to as the
"Transactions."
In order to induce Hain to enter into the Merger Agreement
with the Company, Hain has requested, and the Stockholder has agreed, that the
Stockholder enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
ARTICLE 1
Voting Agreement
The Stockholder hereby agrees with Hain as follows:
1.1. Voting of Shares. (a) At any meeting of the stockholders
of the Company, however called, at every adjournment of any such meeting, and in
connection with any written consent of the stockholders of the Company, the
Stockholder will cause all of his Shares to be voted, during the term of this
Agreement, in favor of (i) the Merger and the approval and adoption of the
Merger Agreement, and (ii) all other Transactions as to which stockholders of
the Company are called upon to vote.
For purposes of this Agreement, (i) "Person" shall mean an
individual, partnership, limited liability company, corporation, joint stock
company, trust, estate, joint venture, association or unincorporated
organization, or any other entity or organization, including a government or
political subdivision or any agency or instrumentality thereof, and (ii)
"Shares" shall mean any and all shares of capital stock of the Company which are
entitled to vote in any election of the board of directors of the Company now
owned and/or subsequently acquired by the Stockholder through purchase, gift,
stock splits, stock dividends and the exercise of stock options.
(b) The Stockholder agrees that during the term of this
Agreement, the Stockholder shall attend or otherwise participate in all duly
called stockholder meetings and any adjournments of such meetings and in all
actions by written consent of stockholders in which the Merger or any
Transaction is being considered.
(c) The parties hereto agree and acknowledge that nothing in
this Article I or any other part of this Agreement shall be construed as
requiring the Stockholder to propose, endorse, approve or recommend the Merger
Agreement or the transactions contemplated thereby in the Stockholder's capacity
as a director of the Company in any manner inconsistent with his fiduciary
duties as director.
1.2. No Proxies or Encumbrances. The Stockholder shall not (i)
grant any proxies or enter into any voting trust or other agreement or
arrangement with respect to the voting of any of the Shares in a manner which
would be inconsistent with the provisions of this Agreement, (ii) sell, assign,
transfer, encumber or otherwise dispose of or enter into any contract, option or
other arrangement or understanding with respect to, the direct or indirect sale,
assignment, transfer, encumbrance or other disposition of any of his Shares or
any interest therein except for Permitted Transfers to Permitted Transferees (as
such terms are defined below) or (iii) seek or solicit any of the foregoing. For
purposes of this Agreement, (i) "Permitted Transferee" means any Person
controlled, directly or indirectly, by Stockholder, Stockholder's spouse and
children, and any trust for the benefit of Stockholder, Stockholder's spouse or
children, and (ii) each transfer to a Permitted Transferee shall constitute a
"Permitted Transfer" only if it is a:
(i) transfer to a Permitted Transferee and, in the case of a
Permitted Transferee, transfer to the Stockholder or to other Permitted
Transferees of Stockholder; provided that, any such Permitted
Transferee shall enter into a supplement to this Agreement, consented
to in writing by Hain, agreeing to be bound by the terms of this
Agreement; or
(ii) pledge to a bank or securities firm of Stockholder's
Shares securing a bona fide loan; provided that the pledge agreement
with the pledgee shall provide that the Stockholder shall continue at
all times to have the right, from time to time, to vote and to give
consents, ratifications and waivers with respect to such pledged
Shares; and provided further that any pledge agreement that Stockholder
enters into shall provide that the pledgee shall give written notice to
Hain at least 10 days prior to the date such pledgee takes any action
to exercise any remedies with respect to such Shares;
provided that no such transfer is in violation of applicable federal or state
securities laws.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
The Stockholder represents and warrants to Hain as follows:
2.1. Valid Title. The Stockholder is the true and lawful owner
of 100% of the Shares set forth next on the signature page to this Agreement,
with full power to vote and dispose of such Shares, and there are no
restrictions on the Stockholder's voting rights or rights of disposition
pertaining to such Shares which would be inconsistent with this Agreement or
interfere with Stockholder's performance of this Agreement.
2.2. Non-Contravention. The execution, delivery and
performance by the Stockholder of this Agreement and the consummation of the
transactions contemplated hereby, do not and will not contravene or constitute a
default under or give rise to a right of termination, cancellation or
acceleration of any material right or obligation of the Stockholder or to a loss
of any material benefit of the Stockholder under any provision of applicable law
or regulation or of any agreement, judgment, injunction, order, decree or other
instrument binding on the Stockholder.
2.3. Authorization. The execution, delivery and
performance by the Stockholder of this Agreement are within the
Stockholder's powers and have been duly authorized by all necessary actions.
2.4. Binding Effect. This Agreement constitutes a valid
and binding agreement of the Stockholder, enforceable against the Stockholder in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, moratorium or other similar laws relating to creditors' rights
generally.
2.5. No Other Shares. The number of Shares set forth
on the signature page to this Agreement are the only Shares owned by the
Stockholder.
ARTICLE 3
Miscellaneous
3.1. Notices. All notices, requests and other communications
to any party hereunder shall be deemed to have been duly given when delivered in
person, by telegram, facsimile or by registered or certified mail (postage
prepaid, return receipt requested) to such party at its address set forth on the
signature pages hereto.
3.2. Amendments; No Waivers. (a) Any provision of this
Agreement may be amended or waived if, and only if, such amendment or waiver is
In writing and signed, in the case of an amendment, by each of the parties
hereto, or in the case of a waiver, by the party against whom the waiver is
to be effective.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
3.3. Termination. This Agreement shall automatically
terminate upon termination of the Merger Agreement in accordance with its terms.
3.4. Severability. If any provision of this Agreement or the
application of such provision to any party or set of circumstances shall, in any
jurisdiction and to any extent, be finally held invalid or unenforceable, such
term or provision shall only be ineffective as to such jurisdiction, and only to
the extent of such invalidity or unenforceability, without invalidating or
rendering unenforceable any other terms or provisions of this Agreement or under
any other circumstances, and the parties shall negotiate in good faith a
substitute provision which comes as close as possible to the invalidated or
unenforceable term or provision, and which puts each party in a position as
nearly comparable as possible to the position it would have been in but for the
finding of invalidity or unenforceability, while remaining valid and
enforceable.
3.5. Entire Agreement. This Agreement constitutes the
entire agreement among the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and undertakings, both written and
oral, among the parties with respect to the subject matter hereof.
3.6. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns (and, in the case of the Stockholder, the
heirs and executors of the Stockholder); provided that, except as permitted by
Section 1.2 or by will or intestacy, no party may assign, delegate or otherwise
transfer all or any of his or its rights or obligations under this Agreement
without the consent of the other party hereto.
3.7. Counterparts; Effectiveness. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party shall have received
counterparts (or signature pages) hereof signed by all of the other parties.
3.8. Governing Law; Specific Performance. The terms of this
Agreement shall be construed in accordance with and governed by the law of the
State of Delaware (without regard to principles of conflict of laws). Each of
the parties acknowledges and agrees that the parties' respective remedies at law
for a breach or threatened breach of any of the provisions of this Agreement
would be inadequate and, in recognition of that fact, each agrees that, in the
event of a breach or threatened breach by any party of the provisions of this
Agreement, in addition to any remedies at law, each party, without posting any
bond, shall be entitled to seek equitable relief in the form of specific
performance, a temporary restraining order, a temporary or permanent injunction
or any other equitable remedy which may then be available.
3.9. Expenses. All costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring such cost
or expense.
3.10. Certain Events. The Stockholder agrees that this
Agreement and the obligations hereunder shall attach to its Shares and shall be
binding upon any Person to which legal or beneficial ownership of such shares
shall pass, whether by operation of law or otherwise.
3.11. No Revocation. The voting agreements contained
herein are coupled with an interest and may not be revoked prior to termination
of this Agreement in accordance with Section 3.3, except by written consent
of Hain.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement, or caused this Agreement to be duly executed by their respective
authorized officers or representatives, as of the day and year first above
written.
The Hain Food Group, Inc.
By: /s/ Irwin D. Simon
Its:President and Chief Executive Officer
Address: 50 Charles Lindbergh Boulevard,
Uniondale, New York 11553
Stockholder:
/s/ Mo Siegel
Mo Siegel
Number of Shares Owned: 243,728*
*Includes 733 ESOP shares
Address: 1919 14th Street
Suite 609
Boulder, CO 80302-5325
<PAGE>
Exhibit 99.1
THE HAIN FOOD GROUP
50 Charles Lindbergh Blvd.
Uniondale, NY 11553
(516) 237-6200
Fax: (516) 237-6240
THE HAIN FOOD GROUP TO MERGE WITH CELESTIAL
SEASONINGS, INC., THE MARKET LEADER IN SPECIALTY TEAS
-- Combination Creates Powerhouse in the Natural Organic
Foods and Beverage Category --
-- Transaction Expected to be Immediately Accretive to Earnings
Per Share --
UNIONDALE, NY AND BOULDER, CO -- March 6, 2000 -- The Hain Food Group
(NASDAQ:HAIN), the leading natural and organic food company, and Celestial
Seasonings, Inc. (NASDAQ:CTEA), the market leader in specialty teas, today
announced that they have signed a definitive agreement to combine their
operations. The transaction is expected to be accretive to Hain's earnings per
share in the first year of combined operations, excluding non-recurring charges
associated with the merger.
The name of the combined company will be The Hain Celestial
Group, Inc., and it will continue to trade under the stock symbol HAIN. Irwin
Simon, currently president and chief executive officer of The Hain Food Group,
will be chairman, president and chief executive officer of The Hain Celestial
Group Inc., and Mo Siegel, currently chairman of Celestial Seasonings, will be
vice-chairman of The Hain Celestial Group, Inc. Hain's Board of Directors will
increase from eight to eleven, with Mo Siegel and two other members of Celestial
Seasonings' Board joining the expanded Board.
The consolidation further establishes Hain's leading position
in natural foods, in which it currently maintains major shares in 12 of the top
15 categories. By leveraging Celestial Seasonings' leading market position, The
Hain Celestial Group, Inc. will become the leader in the third most important
category and, at the same time, will capitalize on Celestial's leading market
presence in the food, drug and retail mass market channel. In addition, this
combination will benefit from the alliance between Hain and H. J. Heinz by
expanding distribution of Celestial Seasonings' specialty teas through Heinz's
international and foodservice channels. Combined total pro forma sales for The
Hain Celestial Group are expected to be approximately $430 million for the
fiscal year ending June 30, 2000.
Under the terms of the agreement, which has been unanimously
approved by the Boards of Directors of both companies, 1.265 shares of Hain
common stock will be exchanged for each outstanding Celestial Seasonings share.
Based on the closing market price of Hain stock an Friday, March 3, 2000, the
transaction has a value of approximately $390 million, including the assumption
of net debt. The merger is expected to be accounted for as a pooling of
interests and will be treated as a tax-free reorganization for all shareholders.
Mr. Simon remarked, "Celestial Seasonings has one of the most
recognized consumer brand names in the food industry. This merger forms a
powerhouse in the natural foods industry, and creates immediate value for the
shareholders of both companies. The transaction combines Hain, with its
experience in selling to specialty natural foods markets, and Celestial
Seasonings, which has great expertise in successfully reaching the retail mass
market. The combination consolidates Hain's position at the top of the natural
foods market, gives us leadership in the fast-growing category of specialty
teas, and creates tremendous growth opportunities by leveraging the combined
selling and distribution strengths of both brand portfolios."
Mr. Siegel commented, "I am thrilled that Celestial Seasonings
will combine with Hain, as our distribution channels are extremely
complementary. We sell 80% of our products through retail mass market channels;
Hain sells approximately 60% through natural foods channels. This combination
will expand the reach for all of our brands. This consolidation will accelerate
growth for both companies in the fast growing natural products industry. It
fulfills our long-standing intention to have the size and capabilities to make a
significant positive difference in the health habits of millions of people."
"We expect that Celestial Seasonings' investors and employees
will greatly benefit from the growth opportunities provided by Hain," noted
Steve Hughes, president and CEO of Celestial Seasonings, Inc.
The US natural and organic food category represents a $20
billion business growing 15 to 18 percent annually. The US market for natural
and organic foods includes $12 billion in sales in specialty stores (natural and
organic food shops) and $8 billion through traditional supermarkets.
Last year, Celestial Seasonings' sales of specialty teas were
in excess of $100 million, representing a 50% market share in the herbal tea
segment and 32% of the total specialty tea Category. Celestial Seasonings
currently sells more than 50 varieties of teas, including herbal, green,
wellness, and chai, in major supermarkets and natural food markets in the US and
some 40 other countries.
Completion of the transaction, which is subject to the
approval of the stockholders of both companies and customary regulatory
approvals, is expected to occur in approximately June, 2000, before the
beginning of Hain's fiscal year 2001.
About The Hain Food Group
The Hain Food Group, headquartered in Uniondale, NY, is a natural, specialty and
snack food company. The Company is a leader in 12 of the top 15 natural food
categories, with such well-known natural food brands as Hain Pure Foods(R),
Westbrae(R), Westsoy(R), Arrowhead Mills(R), Health Valley(R), Breadshop's(R),
Casbah(R), Garden of Eatin(R), Terra Chips(R), DeBoles(R), Earth's Best(R), and
Nile Spice(TM). The Company's principal specialty and snack food product lines
include Hollywood(R) cooking oils, Estee(R) sugar-free products, Weight
Watchers(R) dry and refrigerated products, Kineret(R) kosher foods, Boston
Better Snacks(R), Hain's Premium Snacks(R) and Alba Foods(R). Hain's Internet
website is www.thefoodgroup.com.
About Celestial Seasonings
Celestial Seasonings, Inc. is the largest manufacturer and marketer of specialty
hot teas in the United States. The company makes a broad selection of flavorful
Herbal, Green, Wellness, Organic and Chai teas. The company's most recognized
tea products include Sleepytime(R) --America's favorite herb tea--Lemon
Zinger(R), Red Zinger(R), and Tension Tamer(R). The company also markets a line
of herbal supplements including Ginseng Energy(TM), Gingko Sharp(TM) and Mood
Mender(TM) with St. John's Wort. Celestial's Internet website is
www.celestialseasonings.com.
Statements made in this Press Release that state the intentions, beliefs,
expectations or predictions of The Hain Food Group, Celestial Seasonings, Inc.
or their respective managements for the future are forward-looking statements.
It is important to note that actual results could differ materially from those
projected in such forward-looking statements. Information concerning factors
that could cause actual results to differ materially from those in
forward-looking statements is contained from time to time in filings of each of
The Hain Food Group and Celestial Seasonings, Inc. with the U.S. Securities and
Exchange Commission. Copies of these filings may be obtained by contacting The
Hain Food Group or Celestial Seasonings, Inc. as applicable, or the SEC.
INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS INCLUDING ANY
AMENDMENTS OR SUPPLEMENTS THERETO (THE "JOINT PROXY STATEMENT/PROSPECTUS") WHICH
WILL BE PREPARED BY THE HAIN FOOD GROUP AND CELESTIAL SEASONINGS, INC. INVESTORS
ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS BECAUSE IT WILL CONTAIN
INFORMATION IMPORTANT TO INVESTORS. WHEN COMPLETED, THE JOINT PROXY
STATEMENT/PROSPECTUS WILL BE MAILED TO THE SHAREHOLDERS OF EACH COMPANY. COPIES
OF THE JOINT PROXY STATEMENT/PROSPECTUS WILL BE AVAILABLE FOR FREE BY CONTACTING
THE HAIN FOOD GROUP OR CELESTIAL SEASONINGS, INC. OR AT THE SEC'S WEBSITE AT
WWW.SEC.GOV.
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