<PAGE> 1
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 31, 1996
THE FRESH JUICE COMPANY, INC.
-----------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Delaware 0-15320 11-2771046
- --------------------------------------------------------------------------------
(State or other (Commission file (IRS employer
jurisdiction of number) identification no.)
incorporation)
350 Northern Boulevard, Great Neck, New York 11021
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 482-5190
- --------------------------------------------------------------------------------
<PAGE> 2
Item 2. Acquisition or Disposition of Assets
Merger with The Ultimate Juice Company, Inc. On March 31,
1996, The Fresh Juice Company, Inc. ("Registrant") entered into a Merger
Agreement (the "Merger Agreement") with The Ultimate Juice Company, Inc., a New
Jersey corporation, ("Ultimate"), joined in by the shareholders of Ultimate
(the "Selling Stockholders") and The Fresh Juice Acquisition Company, Inc., a
Delaware corporation and a wholly-owned subsidiary of the Registrant ("Merger
Sub"). The Merger Agreement provides for the merger of Merger Sub with and
into Ultimate (the "Merger"), with all of the issued and outstanding common
stock of Ultimate being exchanged for 1,140,000 shares (the "Merger Shares") of
the common stock, $.01 par value, of the Registrant.
The Merger is expected to be (1) accounted for as a purchase
and (2) a "reorganization" under the Internal Revenue Code.
The Merger became effective on April 1, 1996.
Pursuant to the Merger Agreement, the Merger Shares were not
registered with the Securities and Exchange Commission (the "Commission") and
constitute restricted stock under Rule 144 of the Commission. However,
Registrant and the Selling Stockholders have entered into a Registration Rights
Agreement (the "Registration Rights Agreement") dated March 31, 1996 which
gives the Selling Stockholders the right to demand registration of a portion of
the Merger Shares under certain circumstances.
Steven M. Bogen ("Bogen") President of Ultimate, has become
Co-Chairman, Chief Executive Officer and Secretary of the Registrant. Steven
Smith ("Smith") will continue as Co-Chairman and President and has also been
named Assistant Secretary of the Registrant. Jeffrey Smith, the Registrant's
Vice President of Strategic Development & Planning and Investor Relations has
been named a director of the Registrant. Mark Feldman, a shareholder, Chief
Financial Officer and Director of Ultimate, has been named Treasurer of the
Registrant.
In connection with the Merger Agreement, Bogen and Smith have
entered into a Stockholder's Agreement (the "Stockholder's Agreement") whereby
each has agreed, among other things, to (a)
2
<PAGE> 3
keep the number of directors of the Registrant an even number, (b) each
nominate one-half of the number of directors eligible for election each year,
(c) vote for the other's nominees for director, and (d) not sell his stock in
the Registrant other than pursuant to broker sales or an effective Registration
Statement. Upon consummation of the Merger, Bogen and Smith own in the
aggregate 2,218,108 shares of the Registrant's Common Stock (approximately
47.3% of the issued and outstanding common stock of the Registrant).
The Merger Agreement, the Registrant's press release regarding
the Merger, the Registration Rights Agreement and the Stockholders Agreement
appear as Exhibits to this report and are incorporated herein by reference.
The foregoing summary is qualified in its entirety by reference to such
documents.
Item 5. Other Events
(a) Merger Agreement With Clear Springs Citrus, Inc. On
March 31, 1996, the Registrant entered into a Merger Agreement (the "Clear
Springs Merger Agreement") by and among the Registrant, The Fresh Juice Company
of Florida, Inc., Clear Springs Citrus, Inc. ("Clear Springs"), Brian Duffy and
The Bogen Group, L.L.C., pursuant to which Clear Springs will be merged with
and into The Fresh Juice Company of Florida, Inc., a wholly owned subsidiary of
the Registrant (the "Clear Springs Merger"). Brian Duffy and The Bogen Group,
L.L.C. own all of the outstanding common stock of Clear Springs. The Bogen
Group L.L.C. is controlled by Bogen who owns a 96.5% interest therein.
The Clear Springs Merger is expected to be (1) accounted for
as a purchase and (2) a "reorganization" under the Internal Revenue Code of
1986, as amended.
Under the terms of the Clear Springs Merger Agreement, the
stockholders of Clear Springs will receive an aggregate of 1,160,000 shares of
the Registrant's common stock, $.01 par value, in exchange for all of the
issued and outstanding common stock of Clear Springs. Brian Duffy, a
shareholder, President and director of Clear Springs, has been named a director
of the Registrant.
Consummation of the Clear Springs Merger is subject to the
satisfaction of all terms and conditions set forth in the Clear Springs Merger
Agreement, including, but not limited to,
3
<PAGE> 4
shareholder approval of an amendment to the Registrant's Certificate of
Incorporation to increase the number of authorized shares of the Registrant
from 5,000,000 shares of common stock and 200,000 shares of preferred stock to
20,000,000 shares of common stock and 7,000,000 shares of preferred stock. The
Registrant, Smith, and the Selling Stockholders have entered into a Voting
Agreement dated March 31, 1996 whereby Smith and the Selling Stockholders have
agreed and authorized a nominee to vote their shares in favor of the Clear
Springs Merger and the transactions contemplated by the Clear Springs Merger
Agreement including, but not limited to, the related increase in the authorized
common and preferred shares of the Registrant.
The Clear Springs Merger Agreement, Registrant's press release
issued April 1, 1996 regarding the Clear Springs Merger and the Voting
Agreement appear as Exhibits to this report and are incorporated herein by
reference. The foregoing summary is qualified in its entirety by reference to
such documents.
(b) Employment Agreements. On March 31, 1996 the
Registrant entered into employment agreements effective April 1, 1996 with
Smith, Bogen and Daniel Petry. Copies of such employment agreements appear as
Exhibits to this report and are incorporated herein by reference.
(c) Supply Agreement with Natural Juice Company. By
agreement dated March 31, 1996, the Registrant entered into a supply,
distribution and requirements agreement (the "Supply Agreement") with Natural
Juice Company, an Illinois corporation controlled by Brian Duffy, a director of
the Registrant and a shareholder of Clear Springs. The Supply Agreement has an
initial term of five (5) years with two (2) five (5) year renewals at Natural
Juice Company's option. The Supply Agreement appears as an Exhibit to this
report and is incorporated herein by reference. The foregoing summary is
qualified in its entirety by reference to such document.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Financial Statements of Businesses Acquired.
See Index to Financial Statements and Pro Forma
Financial Information beginning on Page F-1 of this Report.
4
<PAGE> 5
(b) Pro Forma Financial Information.
See Index to Financial Statements and Pro Forma
Financial Information beginning on Page F-1 of this Report.
(c) Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
<S> <C>
2(a) Merger Agreement dated March
31, 1996 among The Fresh
Juice Company, Inc., The
Fresh Juice Acquisition
Company, Inc., The Ultimate
Juice Company, Inc. Steven
M. Bogen, Albert L. Rountree
IV, Daniel Petry, Mark
Feldman and James Coyle.
2(b) Merger Agreement dated March
31, 1996 among The Fresh
Juice Company, Inc., The
Fresh Juice Company of
Florida, Inc., Clear Springs
Citrus, Inc., Brian Duffy
and The Bogen Group, L.L.C.
10(a) Registration Rights
Agreement dated March 31,
1996 among The Fresh Juice
Company, Inc., Steven M.
Bogen, Albert L. Rountree
IV, Daniel Petry, Mark
Feldman and James Coyle
10(b) Stockholder's Agreement
dated March 31, 1996 between
Steven Smith and Steven M.
Bogen.
10(c) Voting Agreement dated March
31, 1996 among The Fresh
Juice Company, Inc., Steven
Smith, Steven M. Bogen,
Albert L.
</TABLE>
5
<PAGE> 6
<TABLE>
<S> <C>
Rountree IV, Daniel Petry,
Mark Feldman, James Coyle
and Craig M. Lessner.
10(d) Employment Agreement
effective April 1, 1996 with
Steven Smith.
10(e) Employment Agreement
effective April 1, 1996 with
Steven M. Bogen.
10(f) Employment Agreement
effective April 1, 1996 with
Daniel Petry.
10(g) Supply Agreement dated March
31, 1996 with Natural Juice
Company, Inc.
23 Consent of Withum Smith &
Brown, Certified Public
Accountants and Consultants.
99 Press Release dated April 1,
1996.
</TABLE>
6
<PAGE> 7
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF
1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY
THE UNDERSIGNED THEREUNTO DULY AUTHORIZED.
THE FRESH JUICE COMPANY, INC.
By: /s/ Steven M. Bogen
----------------------------------
Steven M. Bogen, Chief
Executive Officer
Dated: April 11, 1996
7
<PAGE> 8
INDEX TO FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL INFORMATION
Financial Statements of The Ultimate Juice Company, Inc. and Page
Affiliated Company Number
------
A. Independent Auditors' Report Dated August 31, 1995 F-3
Combined Financial Statements of The Ultimate Juice
Company, Inc. and Affiliated Company:
Combined Balance Sheets, June 30, 1995 and 1994 F-4
Combined Statements of Operations for the Years Ended
June 30, 1995 and 1994 F-5
Combined Statements of Retained Earnings for the Years
Ended June 30, 1995 and 1994 F-6
Combined Statements of Cash Flows for the Years Ended
June 30, 1995 and 1994 F-7
Notes to Combined Financial Statements F-8
Financial Statements of The Ultimate Juice Company, Inc.:
B. Unaudited Interim Financial Statements of The Ultimate Juice
Company, Inc.:
Balance Sheet, December 31, 1995 F-13
Statements of Operations for the Six Months Ended
December 31, 1995 and 1994 F-14
Statements of Cash Flows for the Six Months Ended
December 31, 1995 and 1994 F-15
Notes to Unaudited Financial Statements F-16
F-1
<PAGE> 9
INDEX TO FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL INFORMATION
Page
Pro Forma Consolidating Financial Information Number
- --------------------------------------------- ------
Pro Forma Condensed Consolidating Balance Sheet
as of November 30, 1995 F-17
Pro Forma Condensed Consolidating Statement of Income
for the Year Ended November 30, 1995 F-19
Notes to Pro Forma Condensed Consolidating Financial
Information F-20
F-2
<PAGE> 10
INDEPENDENT AUDITORS' REPORT
To the Board of Directors,
The Ultimate Juice Company, Inc.:
We have audited the accompanying combined balance sheets of The Ultimate Juice
Company, Inc. and Affiliated Company, as of June 30, 1995 and 1994, and the
related combined statements of operations, retained earnings and cash flows for
the years then ended. These combined financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these combined financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of The Ultimate Juice
Company, Inc. and Affiliated Company at June 30, 1995 and 1994, and the results
of their combined operations and their combined cash flows for the years then
ended in conformity with generally accepted accounting principles.
WITHUM, SMITH & BROWN
New Brunswick, New Jersey
August 31, 1995
F-3
<PAGE> 11
THE ULTIMATE JUICE COMPANY, INC. AND AFFILIATED COMPANY
COMBINED BALANCE SHEETS
JUNE 30, 1995 AND 1994
<TABLE>
<CAPTION>
ASSETS 1995 1994
---- ----
Current Assets:
<S> <C> <C>
Cash $ 315,861 $ 282,641
Accounts receivable, less allowance of $-0-
in 1995 and 1994 1,016,232 957,031
Inventory 109,058 140,552
Prepaid corporate income taxes 12,656 --
Prepaid expenses and other assets 10,878 --
Advances to stockholders -- 17,226
Notes receivable 100,000 100,000
---------- ----------
Total Current Assets 1,564,685 1,497,450
Property and Equipment - Net 44,246 90,584
Intangible Assets - Net 104,434 118,386
Other Assets:
Security deposits 10,741 13,141
Advances to related company -- 502
---------- ----------
Total Other Assets 10,741 13,643
---------- ----------
TOTAL ASSETS $1,724,106 $1,720,063
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable $ -- $ 42,206
Current maturities of long-term debt 120,000 110,000
Accounts payable and accrued expenses 823,693 967,068
Advances from stockholders 250,241 --
Corporate income taxes payable 18,693 22,468
---------- ----------
Total Current Liabilities 1,212,627 1,141,742
Long-Term Debt 70,000 190,000
Stockholders' Equity:
Ultimate Juice Co., Inc. - common stock,
no par; 2,500 shares authorized; 1,000
shares issued and outstanding 1,000 1,000
Connecticut Juice Co., Inc. - common stock,
no par; 10,000 shares authorized; 1,000
shares issued and outstanding -- 1,000
Additional paid in capital 15,000 40,224
Retained earnings 425,479 346,097
---------- ----------
Total Stockholders' Equity 441,479 388,321
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,724,106 $1,720,063
========== ==========
</TABLE>
The Accompanying Notes to Combined Financial Statements are an integral part of
these statements
F-4
<PAGE> 12
THE ULTIMATE JUICE COMPANY, INC. AND AFFILIATED COMPANY
COMBINED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
FOR THE YEARS ENDED JUNE 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C> <C> <C>
Revenues - Net $11,286,669 100.0% $11,114,608 100.0%
Cost of Goods Sold 7,887,208 69.9 8,317,661 74.8
----------- ----- ----------- -----
Gross Profit 3,399,461 30.1 2,796,947 25.2
Operating Expenses:
Delivery 547,833 4.8 751,141 6.8
Selling 129,382 1.2 101,247 .9
Warehouse 364,163 3.2 357,182 3.2
General and administrative 2,287,509 20.3 1,709,533 15.4
----------- ----- ----------- -----
Total Operating Expenses 3,328,887 29.5 2,919,103 26.3
----------- ----- ----------- -----
Income (Loss) From Operations 70,574 .6 (122,156) (1.1)
Other (Income) Expenses:
Interest expense 14,670 .1 13,273 .1
Interest income (19,329) (.2) (7,813) (.1)
Other expenses -- -- 14,600 .1
Gain on sale of assets (27,639) (.2) -- --
----------- ----- ----------- -----
Total Other (Income) Expenses (32,298) (.3) 20,060 .1
----------- ----- ----------- -----
Income (Loss) Before Provision For
Income Taxes 102,872 .9 (142,216) (1.2)
Provision for Income Taxes 43,908 .4 (30,609) .2
----------- ----- ------------ -----
Net Income (Loss) $ 58,964 .5% $ (111,607) (1.0)%
=========== ===== =========== =====
</TABLE>
The Accompanying Notes to Combined Financial Statements are an integral part of
these statements
F-5
<PAGE> 13
THE ULTIMATE JUICE COMPANY, INC. AND AFFILIATED COMPANY
COMBINED STATEMENTS OF RETAINED EARNINGS
FOR THE YEARS ENDED JUNE 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Beginning Retained Earnings $346,097 $ 457,704
Net Income (Loss) 58,964 (111,607)
Adjustment of Retained Earnings as a Result
of the Purchase of Connecticut Juice's Assets 20,418 --
-------- ---------
Ending Retained Earnings $425,479 $ 346,097
======== =========
</TABLE>
The Accompanying Notes to Combined Financial Statements are an integral part of
these statements
F-6
<PAGE> 14
THE ULTIMATE JUICE COMPANY, INC. AND AFFILIATED COMPANY
COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Cash Flows From Operating Activities:
Net income (loss) $ 58,964 $(111,607)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 67,701 94,049
Deferred taxes -- (22,700)
Gain on sale of assets (27,639) --
Change in:
Accounts receivable (59,201) (96,724)
Inventory 31,494 (37,728)
Prepaid corporate income taxes (12,656) 3,989
Prepaid expenses and other current assets (10,878) --
Security deposits 2,400 (286)
Accounts payable and accrued expenses (143,375) 263,062
Corporate income taxes payable (3,775) (36,575)
--------- ---------
Net Cash Provided By (Used In) Operating Activities (96,965) 55,480
Cash Flows From Investing Activities:
Change in advances to (from) stockholders 267,467 (57,305)
Change in advances from related companies 502 (58,999)
Purchases of property and equipment -- (18,046)
Issuance of note receivable -- (100,000)
--------- ---------
Net Cash Provided By (Used In) Investing Activities 267,969 (234,350)
Cash Flows From Financing Activities:
Repayment of note payable (42,206) (128,000)
Repayment of long-term debt (110,000) (152,000)
Proceeds from issuance of long-term debt -- 400,000
Change in stockholders' equity resulting from
Connecticut Juice dissolution 14,422 --
--------- ---------
Net Cash Provided By (Used In) Financing Activities (137,784) 120,000
--------- ---------
Net (Decrease) Increase in Cash 33,220 (58,870)
Cash at Beginning of Year 282,641 341,511
--------- ---------
Cash at End of Year $ 315,861 $ 282,641
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ 14,670 $ 2,733
Income taxes $ 53,213 $ 47,250
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES:
The Company incurred notes payable in conjunction
with the acquisition of assets of various companies -- $ 42,207
The Company acquired intangible assets and property and
equipment for the assumption of liabilities $ 38,190 $ --
</TABLE>
The Accompanying Notes to Combined Financial Statements are an integral part of
these statements
F-7
<PAGE> 15
THE ULTIMATE JUICE COMPANY, INC. AND AFFILIATED COMPANY
NOTES TO COMBINED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
PRINCIPLES OF COMBINATION
The combined financial statements include the accounts of The
Ultimate Juice Company, Inc., and its affiliate The Connecticut
Juice Company, Inc. The outstanding common stock of each company
is owned by the same stockholders, and while their statements have
been combined, the financial statements do not represent those of
a single legal entity. All significant affiliated accounts have
been eliminated.
NATURE OF BUSINESS OPERATIONS
The Ultimate Juice Company, Inc. was incorporated on July 1, 1987
and operates as a broker and wholesale distributor of juice
products within the Northeastern United States.
The Connecticut Juice Company, Inc. was incorporated in April 1993
and operates solely as a wholesale distributor of juice products.
On June 30, 1994, the Company acquired the assets of Ultimate Too,
Inc., a company owned by the companies three principal
stockholders, for the assumption of $42,207 of liabilities and
$18,731 of forgiveness of debt. Assets acquired in the agreement
included security deposits, customer lists, distributor agreements
and property and equipment. In addition, the Company forgave
$110,251 in indebtedness due from Ultimate Too, Inc. which is
included in bad debts for the year ending June 30, 1994.
On November 30, 1994, the Ultimate Juice Company, Inc. acquired
the assets of its affiliate The Connecticut Juice Company, Inc.
for the assumption of $78,642 of liabilities. Assets acquired in
the agreement included customers lists, distributor agreements and
property and equipment.
INVENTORY
Inventory, which consists of juice products, is stated at the
lower of cost or market. Cost is determined by the first-in,
first-out method.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation of
property and equipment have been made by the Companies on the
straight-line basis over the estimated useful lives of the assets,
generally five to seven years.
INTANGIBLE ASSETS
Intangible assets are stated at cost and are amortized on a
straight-line basis over periods from 18 months to 40 years.
INCOME TAXES
Connecticut Juice Company, Inc. has elected to be taxed under the
provisions of Subchapter S of the Internal Revenue Code. Under
those provisions, the Company does not pay the federal corporate
income taxes on its taxable income. Instead, the stockholders are
liable for individual federal income taxes on the Company's
taxable income.
F-8
<PAGE> 16
THE ULTIMATE JUICE COMPANY, INC. AND AFFILIATED COMPANY
NOTES TO COMBINED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
The Company adopted Statement of Financial Accounting Standard No.
109, Accounting for Income Taxes effective July 1, 1993, which
requires a change from the deferred method to the asset and
liability method of accounting for income taxes. Under the asset
and liability method, deferred income taxes are recognized for the
tax consequences of "temporary differences" by applying enacted
statutory tax rates applicable to future years to differences
between the financial statement carrying amounts and the tax basis
of existing assets and liabilities. The primary deferred income
tax items are the result of the timing difference in depreciation
using accelerated methods for tax purposes and the forgiveness of
debt reported in 1994. The change to FAS No. 109 had no material
effect on the financial statements.
PENSION PLAN
On January 1, 1994, the Company started a contributory thrift and
savings plan for salaried employees meeting certain service
requirements, which qualifies under Section 401(k) of the Internal
Revenue Service Code. Contributions into the plans are made at the
discretion of management. For the years ended June 30, 1995 and
1994 total pension expense amounted to $15,596 and $7,955,
respectively.
NOTE 2 - INVENTORY:
Inventory consists of the following at June 30:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Juice Products $109,058 $140,552
======== ========
</TABLE>
NOTE 3 - NOTE RECEIVABLE
Note receivable at June 30, consists of the following:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Note receivable - Clear Spring Citrus, Inc.
(see Note 11), interest at 7% per annum,
due on demand, unsecured $100,000 $100,000
======== ========
</TABLE>
NOTE 4 - PROPERTY AND EQUIPMENT:
The major classifications of property and equipment at cost are as
follows at June 30:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Transportation Equipment $ 23,152 $ 30,752
Machinery and Equipment 105,573 135,085
Computer and Office Equipment 61,201 61,669
-------- --------
189,926 227,506
Less Accumulated Depreciation
and Amortization (145,680) (136,922)
-------- --------
Property and Equipment, Net $ 44,246 $ 90,584
======== ========
</TABLE>
Depreciation included as a charge to income amounted to $16,836
and $30,661 for the years ended June 30, 1995 and 1994,
respectively.
F-9
<PAGE> 17
THE ULTIMATE JUICE COMPANY, INC. AND AFFILIATED COMPANY
NOTES TO COMBINED FINANCIAL STATEMENTS
NOTE 5 - INTANGIBLE ASSETS - NET:
The major classifications of intangible assets at cost are as
follows at June 30:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Covenant Not to Compete $170,000 $170,000
Customer Lists 64,413 27,500
Distributorship Agreement 30,000 30,000
Goodwill 9,500 9,500
-------- --------
273,913 237,000
Less Accumulated Amortization (169,479) (118,614)
-------- --------
Intangible Assets - Net $104,434 $118,386
======== ========
</TABLE>
Amortization included as a charge to income amounted to $50,865
and $63,388, respectively.
NOTE 6 - NOTES PAYABLE:
Notes payable at June 30, consist of the following:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Notes payable - Various entities,interest
ranging from -0- to 15 percent per annum,
final payments due January 1995 to March 1995 $ -- $42,206
======= =======
</TABLE>
NOTE 7 - LONG-TERM DEBT:
Long-term debt consists of the following at June 30:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Note payable - The Fresh Juice Company, Inc., interest at 5
percent per annum, principal payments of $10,000 per month
commencing August 1994, secured by accounts receivable and
inventory of the Company (A) $190,000 $300,000
Less Current Maturities 120,000 110,000
-------- --------
Long-Term Debt $ 70,000 $190,000
======== ========
</TABLE>
Aggregate maturities of long-term debt due within the next five
years ending June 30, are as follows:
<TABLE>
<S> <C>
1996 120,000
1997 and thereafter 70,000
--------
Total $190,000
========
</TABLE>
(A) The loan was executed in connection with an option
agreement dated January 24, 1994. Under the terms of the
option agreement, the Fresh Juice Company obtained the
right to purchase the stock of the Company from the
individual stockholders. The option expired in September
1994.
The loan contains certain covenants restricting
additional indebtedness, sale of assets, acquisitions,
capital expenditures, dividends, subordinated debt
transactions with related parties and executive
compensation.
F-10
<PAGE> 18
THE ULTIMATE JUICE COMPANY, INC. AND AFFILIATED COMPANY
NOTES TO COMBINED FINANCIAL STATEMENTS
NOTE 8 - INCOME TAXES:
The provision for income taxes at June 30, consists of the
following:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
State Corporate Income Tax $16,526 $ 275
Federal Corporate Income Tax (Benefit) 27,382 (8,184)
Deferred Corporate Taxes (Benefit) -- (22,700)
------- --------
Total $43,908 $(30,609)
======= ========
</TABLE>
For 1995, income taxes were more than the statutory tax
determined by applying the federal income tax rate to earnings
before income taxes due to nondeductible expenses.
For 1994, income taxes were less than the statutory tax
determined by applying the federal income tax rate to earnings
before income taxes due to the surtax exemption, nondeductible
expenses and Connecticut Juice Company's federal S election.
NOTE 9 - ADVANCES FROM STOCKHOLDERS:
The Company had advances due to the principal stockholder of the
Company in the amount of $250,241 at June 30, 1995. The advances
are non-interest bearing and unsecured. There is no formal
repayment schedule; however, the amount is anticipated to be paid
within one year, and therefore, has been classified as a current
liability.
The Companies had advances due from the three principal
stockholders of the Companies in the amount of $17,226 at June
30, 1994. The advances are non-interest bearing and unsecured.
There is no formal repayment schedule; however, the amounts were
anticipated to be paid within one year, and, therefore were
classified as current liabilities.
NOTE 10 - LEASE COMMITMENTS:
The principal type of property leased by the Companies is
transportation equipment.
Total rent expense for the Companies relating to these leases
amounted to $98,672 and $107,481 for the years ended June 30,
1995 and 1994, respectively. The significant obligations under
the terms of the leases require the Companies to provide all
required maintenance and mileage charges.
The minimum rental commitments of the companies relating to
noncancelable leases for the years ended June 30, are set forth
below:
<TABLE>
<S> <C>
1996 $ 95,681
1997 79,345
1998 and subsequent 13,001
--------
Total $188,027
========
</TABLE>
The preceding data reflects existing leases and does not include
future replacement upon expiration.
F-11
<PAGE> 19
THE ULTIMATE JUICE COMPANY, INC. AND AFFILIATED COMPANY
NOTES TO COMBINED FINANCIAL STATEMENTS
NOTE 11 - RELATED PARTY TRANSACTIONS:
For the years ended June 30, 1995 and 1994, the companies made
purchases from Clear Springs Citrus Inc., which was 76%
beneficially owned at June 30, 1995 by the three principal
stockholders amounting to approximately $4,400,000 and
$4,200,000, respectively. At June 30, 1995 and 1994 the companies
had payables in the amount of $212,251 and $276,205,
respectively, due to Clear Springs Citrus, Inc.
In addition, the company issued a note receivable to Clear
Springs Citrus Inc. in the amount of $100,000. (see Note 3)
For the years ended June 30, 1995 and 1994, the companies had
sales of approximately $77,000 and $987,000, respectively to
corporations which are 100 percent owned by the three principal
stockholders.
For the year ended June 30, 1994, the companies allocated $67,000
in general and administrative expenses to an affiliated
corporation which is 100 percent owned by the three principal
stockholders.
For the year ended June 30, 1994, the companies had advances due
to a company owned by three principal stockholders in the amount
of $502. The advance was unsecured and non-interest bearing. The
advance was not subjected to a definitive pay-out schedule for
which reason the advance had been classified as long-term.
NOTE 12 - CONTINGENCIES AND COMMITMENTS:
At June 30, 1995, the Company has certain litigations pending
against it which occurred in the ordinary course of business. In
the opinion of management, settlement of such claims and
litigation will not have a material adverse effect on the
Company's financial position.
F-12
<PAGE> 20
THE ULTIMATE JUICE COMPANY, INC.
Balance Sheet
December 31, 1995
(Unaudited)
<TABLE>
<S> <C>
ASSETS
Current Assets:
Cash $ 114,879
Trade accounts receivable 915,071
Inventories 140,820
Current portion of note receivable 150,000
Income taxes receivable 24,214
Other 22,755
----------
Total current assets 1,367,739
Property plant and equipment - net 36,830
Intangible assets - net 78,516
Other assets 10,741
----------
Total assets $1,493,826
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt $ 162,000
Accounts payable and accrued expenses 397,707
Income taxes payable 166,387
----------
Total current liabilities 726,094
----------
Commitments and Contingency
Shareholders' Equity:
Common stock 33,000
Additional paid-in capital 15,000
Retained Earnings 719,732
----------
Total shareholders equity 767,732
----------
Total liabilities and shareholders' equity $1,493,826
==========
</TABLE>
See accompanying notes to financial statements.
F-13
<PAGE> 21
THE ULTIMATE JUICE COMPANY, INC.
Statements of Earnings
For the six months ended December 31, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
1995 1,994
---- -----
<S> <C> <C>
Revenues - net $ 6,029,736 $ 5,348,469
Cost of goods sold 4,230,796 3,806,793
----------- -----------
1,798,940 1,541,676
Selling, general and administrative expenses 1,461,554 1,463,757
----------- -----------
Earnings from operations 337,386 77,919
Interest income 12,288 8,357
Interest expense (5,815) (8,044)
Miscellaneous income 95,764 2,253
----------- -----------
Total other income 102,237 2,566
----------- -----------
Earnings before provision for income taxes 439,623 80,485
Provision for income taxes 145,370 41,844
----------- -----------
Net earnings $ 294,253 $ 38,641
=========== ===========
</TABLE>
See accompanying notes to financial statements.
F-14
<PAGE> 22
THE ULTIMATE JUICE COMPANY
Statements of Cash Flow
For the six months ended December 31, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net Earnings $ 294,253 $ 38,641
Adjustments to reconcile net earnings to
cash provided by (used in) operating activities:
Depreciation and amortization 33,334 59,832
Changes in assets and liabilities:
Decrease in trade accounts receivable 101,161 56,497
Increase (decrease) in inventories (31,762) 52,279
Increase in income taxes receivable (11,558) (8,874)
Increase in other assets (11,877) (13,203)
Decrease in accounts payable and accrued expenses (425,986) (356,562)
Increase (decrease) in income taxes payable 147,694 (1,720)
--------- ---------
Net cash provided by (used in) operating activities 95,259 (173,110)
Cash flows from investing activities:
Increase in note receivable (50,000) (40,540)
Repayment of advance from stockholders (250,241) --
Increase in advance to stockholders -- (2,308)
--------- ---------
Net cash used in investment activities (300,241) (42,848)
Cash flows from financing activities:
Repayment of note payable (28,000) (78,230)
Proceeds from the sale of stock 32,000 --
Change in stockholders' equity resulting from
Connecticut Juice dissolution -- 14,422
--------- ---------
Net cash provided by (used in) financing activities 4,000 (63,808)
--------- ---------
Net decrease in cash (200,982) (279,766)
Cash at beginning of period 315,861 282,641
--------- ---------
Cash at end of period $ 114,879 $ 2,875
========= =========
Supplemental cash flow information:
Interest paid $ 5,815 $ 8,044
Income taxes paid -- $ 4,578
</TABLE>
See accompanying notes to financial statements.
F-15
<PAGE> 23
THE ULTIMATE JUICE COMPANY, INC.
Notes to Financial Statements
December 31, 1995
(Unaudited)
Note 1
The accompanying financial statements have been prepared by The Ultimate Juice
Company, Inc. without audit. In the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to present fairly
the financial position, results of operations and cash flows at December 31,
1995 and for the six months ended December 31, 1995 and 1994 have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these financial statements
be read in conjunction with the June 30, 1995 combined financial statements and
notes thereto of The Ultimate Juice Company, Inc. filed as part of the Form 8-K
of The Fresh Juice Company, Inc. and Subsidaries. The results of operations for
the period ended December 31, 1995 are not necessarily indicative of operating
results which may be achieved for the full year.
F-16
<PAGE> 24
THE FRESH JUICE COMPANY, INC. AND SUBSIDIARIES
Pro Forma Condensed Consolidating Balance Sheet
November 30, 1995
(Unaudited)
The following unaudited pro forma condensed consolidating balance sheet has been
prepared as if the acquisition of The Ultimate Juice Company, Inc. discussed in
Note 1 of the notes to pro forma condensed consolidating financial information
had occurred on November 30, 1995. This balance sheet combines the consolidated
balance sheet of the Company at November 30, 1995 with the balance sheet of The
Ultimate Juice Company, Inc. at June 30, 1995, giving effect to adjustments
necessary to account for the acquisition as a purchase.
<TABLE>
<CAPTION>
The Fresh Juice
Company, Inc. The Ultimate Juice
and Subsidiaries Company , Inc. Adjustments Pro Forma
---------------------------------- -------------------------
<S> <C> <C> <C> <C>
ASSETS
Currnet Assets:
Cash $1,998,063 $315,861 (b,c) ($60,179) $2,253,745
Trade accounts receivable 591,727 1,016,232 (c) (23,959) 1,584,000
Inventories 1,544,821 109,058 1,653,879
Current portion of note receivable 120,000 100,000 (b) (120,000) 100,000
Income taxes receivable -- 12,656 12,656
Other 3,747 10,878 14,625
---------------------------------- -------------------------
Total current assets 4,258,358 1,564,685 (204,138) 5,618,905
Property plant and equipment - net of
accumulated depreciation 2,218,976 44,246 2,263,222
Intangible assets - net -- 104,434 (a) 3,121,021 3,225,455
Note receivable, net of current portion 20,000 -- (b) (20,000) --
Trademarks and patents, net of accumulated amortization 10,903 -- 10,903
Other assets -- 10,741 10,741
---------------------------------- -------------------------
Total assets $6,508,237 $1,724,106 $2,896,883 $11,129,226
================================== =========================
</TABLE>
See accompanying notes to pro forma condensed consolidating financial
information.
For letter references under "Adjustments," refer to Note 3 of Notes to Pro Forma
Condensed Consolidating Financial Information.
F-17
<PAGE> 25
THE FRESH JUICE COMPANY, INC. AND SUBSIDIARIES
Pro Forma Condensed Consolidating Balance Sheet (Continued)
November 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
The Fresh Juice
Company, Inc. The Ultimate Juice
and Subsidiaries Company, Inc. Adjustments Pro Forma
-------------------------------------- -------------------------
<S> <C> <C> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt $45,832 $120,000(b) ($120,000) $45,832
Accounts payable and accrued expenses 244,697 823,693(c) (34,138) 1,034,252
Income taxes payable 48,239 18,693 66,932
Advances from stockholder -- 250,241 250,241
---------------------------------- ------------- -------------
Total current liabilities 338,768 1,212,627 (154,138) 1,397,257
Long-term debt, net of current installments 1,529,168 70,000(b) (70,000) 1,529,168
---------------------------------- ------------- -------------
Total liabilities 1,867,936 1,282,627 (224,138) 2,926,425
---------------------------------- ------------- -------------
Shareholders' Equity:
Common stock 37,620 1,000(a) 10,400 49,020
Additional paid-in capital 2,396,490 15,000(a) 3,536,100 5,947,590
Retained Earnings 2,489,484 425,479(a) (425,479) 2,489,484
---------------------------------- ------------- -------------
4,923,594 441,479 3,121,021 8,486,094
Less cost of common shares held in treasury 283,293 -- 283,293
---------------------------------- ------------- -------------
Total shareholders equity 4,640,301 441,479 3,121,021 8,202,801
Commitments and Contingency -- -- --
--------------------------------- ------------- -------------
Total liabilities and shareholders'
equity $6,508,237 $1,724,106 $2,896,883 $11,129,226
================================= ============= =============
</TABLE>
See accompanying notes to pro forma condensed consolidating financial
information.
For letter references under "Adjustments," refer to Note 3 of Notes to Pro Forma
Condensed Consolidating Financial Information.
F-18
<PAGE> 26
THE FRESH JUICE COMPANY, INC. AND SUBSIDIARIES
Pro Forma Condensed Consolidating Statement of Income
For the year ended November 30, 1995
(Unaudited)
The following unaudited pro forma condensed consolidating statement of income
has been prepared as if the acquisition of The Ultimate Juice Company, Inc.
discussed in Note 1 of the notes to pro forma condensed consolidating financial
information had occurred at the beginning of the year ended November 30, 1995.
The pro forma statement of income for the year ended November 30, 1995 combines
the statement of income of the Company for the year ended November 30, 1995 with
the statement of income of The Ultimate Juice Company, Inc. for the year ended
June 30, 1995. The statements give effect to adjustments necessary to account
for the acquisition as a purchase.
<TABLE>
<CAPTION>
The Fresh Juice
Company, Inc. The Ultimate Juice
and Subsidiaries Company, Inc. Adjustments Pro Forma
-------------------------------------- -------------------------
<S> <C> <C> <C> <C>
Net Sales $9,219,184 $11,286,669(d) ($486,623) $20,019,230
Cost of goods sold 6,035,483 7,887,208(d) (486,623) 13,436,068
----------------------------------- --------------------------
3,183,701 3,399,461 6,583,162
Selling, general and administrative expenses 2,820,356 3,328,887(f) 156,051 6,305,294
----------------------------------- --------------------------
Earnings from operations 363,345 70,574 (156,051) 277,868
Interest income 104,104 19,329 123,433
Interest expense (24,355) (14,670) (39,025)
Gain on sale of assets -- 27,639 27,639
----------------------------------- --------------------------
Earnings before provision for income taxes 443,094 102,872 (156,051) 389,915
(e)
Provision for income taxes 172,051 43,908 215,959
----------------------------------- --------------------------
Net earnings $271,043 $58,964 ($156,051) $173,956
=================================== ==========================
Net earnings per common share $0.07 $0.03
================= =============
Weighted average number of common and common equivalent
shares outstanding during the periods adjusted to give
effect to the shares issued in the acquisition of The
Ultimate Juice Company, Inc. 3,889,740 5,029,740
================= =============
</TABLE>
See accompanying notes to pro forma condensed consolidating financial
information.
For letter references under "Adjustments," refer to Note 3 of Notes to Pro Forma
Condensed Consolidating Financial Information.
F-19
<PAGE> 27
THE FRESH JUICE COMPANY, INC. AND SUBSIDIARIES
Notes to Pro Forma Condensed Consolidating Financial Information
Note 1 Acquisition
On March 31, 1996, the Company acquired all of the outstanding capital stock of
The Ultimate Juice Company, Inc. in exchange for 1,140,000 shares of the
Company's common stock. This transaction has been accounted for as a purchase.
Note 2 Basis of Presentation
The unaudited pro forma statements of income for the year ended November 30,
1995 includes the statements of income of The Fresh Juice Company, Inc. and
Subsidiaries for the year ended November 30, 1995 and The Ultimate Juice
Company, Inc. for the year ended June 30, 1995. The unaudited pro forma balance
sheet at November 30, 1995 includes the balance sheet of The Fresh Juice
Company, Inc. and Subsidiaries at November 30, 1995 and The Ultimate Juice
Company, Inc. at June 30, 1995.
The Ultimate Juice Company, Inc. was organized in the State of New Jersey on
July 1, 1987.
Note 3 Pro Forma Adjustments
The pro forma financial statements give effect primarily to:
(a) Acquisition of The Ultimate Juice Company, Inc. by The Fresh Juice Company,
Inc. and Subsidiaries in exchange for 1,140,000 shares of the Company's
common stock valued at $3.125 at March 29, 1996.
(b) Elimination of subordinated debt between the Company and The Ultimate Juice
Company, Inc.
(c) Elimination of intercompany sales and related expenses.
(d) Elimination of intercompany assets and liabilities resulting from
intercompany sales.
(e) There is no tax benefit to be recognized from the pro forma adjustment of
recording the amortization of the excess cost of over fair value of net
assets acquired resulting from the acquisition of The Ultimate Juice
Company, Inc. by The Fresh Juice Company, Inc. and Subsidiaries.
(f) Amortization of the excess cost of over fair value of net assets acquired
over a twenty year life.
F-20
<PAGE> 28
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
<S> <C>
2(a) Merger Agreement dated March 31, 1996 among The Fresh Juice Company, Inc., The Fresh Juice
Acquisition Company, Inc., The Ultimate Juice Company, Inc. Steven M. Bogen, Albert L. Rountree IV,
Daniel Petry, Mark Feldman and James Coyle.
2(b) Merger Agreement dated March 31, 1996 among The Fresh Juice Company, Inc., The Fresh Juice Company of
Florida, Inc., Clear Springs Citrus, Inc., Brian Duffy and The Bogen Group, L.L.C.
10(a) Registration Rights Agreement dated March 31, 1996 among The Fresh Juice Company, Inc., Steven M.
Bogen, Albert L. Rountree IV, Daniel Petry, Mark Feldman and James Coyle
10(b) Stockholder's Agreement dated March 31, 1996 between Steven Smith and Steven M. Bogen.
10(c) Voting Agreement dated March 31, 1996 among The Fresh Juice Company, Inc., Steven Smith, Steven M.
Bogen, Albert L. Rountree IV, Daniel Petry, Mark Feldman, James Coyle and Craig M. Lessner.
10(d) Employment Agreement effective April 1, 1996 with Steven Smith.
10(e) Employment Agreement effective April 1, 1996 with Steven M. Bogen.
10(f) Employment Agreement effective April 1, 1996 with Daniel Petry.
10(g) Supply Agreement dated March 31, 1996
</TABLE>
8
<PAGE> 29
<TABLE>
<S> <C>
with Natural Juice Company, Inc.
23 Consent of Withum Smith & Brown, Certified Public Accountants and Consultants.
99 Press Release dated April 1, 1996.
</TABLE>
9
<PAGE> 1
EXHIBIT 2a
MERGER AGREEMENT,
dated as of March 31, 1996,
among
THE FRESH JUICE COMPANY, INC.,
THE FRESH JUICE ACQUISITION COMPANY, INC.,
THE ULTIMATE JUICE COMPANY, INC.,
STEVEN M. BOGEN,
ALBERT L. ROUNTREE, IV
DANIEL PETRY
MARK FELDMAN
and
JAMES COYLE
<PAGE> 2
MERGER AGREEMENT
AGREEMENT, dated as of March 31, 1996, among The Fresh Juice
Company, Inc., a Delaware corporation ("Fresh Juice"), The Fresh Juice
Acquisition Company, Inc., a Delaware corporation and wholly-owned subsidiary
of Fresh Juice ("Merger Sub"), Steven M. Bogen ("Bogen"), Albert L. Rountree,
IV ("Rountree") Daniel Petry ("Petry"), Mark Feldman ("Feldman") and James
Coyle ("Coyle" and together with Bogen, Rountree, Petry and Feldman each a
"Selling Stockholder", and collectively, the Selling Stockholders"), and The
Ultimate Juice Company, Inc. a New Jersey corporation ("Ultimate").
The Boards of Directors of Fresh Juice, Merger Sub and
Ultimate have each determined that it is in the best interest of their
respective stockholders to effect a merger of Merger Sub with and into Ultimate
(the "Merger") whereby all of the issued and outstanding common stock, without
par value, of Ultimate (the "Ultimate Stock") will be exchanged for 1,140,000
shares of common stock, $.01 par value, of Fresh Juice ("Fresh Juice Common");
and
Each of the Board of Directors of Fresh Juice, Merger Sub and
Ultimate have approved the Merger in accordance with the General Corporation
Law of the State of Delaware (the "DGCL") and the New Jersey Business
Corporation Act (the "NJBCA") and upon the terms and subject to the conditions
set forth herein; and
The parties hereto desire to enter into the Merger in
accordance with the terms hereof.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
THE MERGER
1.1 The Merger. The Merger will occur upon the terms and
subject to the conditions hereof, and in accordance with the relevant
provisions of the DGCL and the NJBCA. Following the Merger, Ultimate shall
continue as the surviving corporation (the "Surviving Corporation") under the
name "The Ultimate Juice Company, Inc." and shall continue its existence under
the laws of the State of New Jersey, and the separate corporate existence of
Merger Sub shall cease.
1.2 Effective Time. As promptly as practicable after the
execution of this Agreement but not later than ten (10) days after the
satisfaction or waiver of the conditions set forth in Article 6, the parties
hereto shall cause the Merger to be consummated by filing this Agreement or a
Certificate of Merger with the Secretary of State of the State of Delaware and
the Secretary of State of the State of New Jersey, each in the form annexed
hereto as Exhibit A
<PAGE> 3
and B, and executed in accordance with the relevant provisions of, the DGCL and
the NJBCA (the time of such filing being the "Effective Time").
1.3 Effect of the Merger. At the Effective Time, the
effect of the Merger shall be as provided for in the applicable provisions of
the DGCL and the NJBCA. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time all the properties, rights, privileges,
powers and franchises of Ultimate and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of Ultimate and Merger Sub
shall become the debts, liabilities and duties of the Surviving Corporation.
1.4 Subsequent Actions. If, at any time after the
Effective Time, the Surviving Corporation shall consider or be advised that any
deeds, bills of sale, assignments, assurances or any other actions or things
are necessary or desirable to vest, perfect or confirm of record or otherwise
in the Surviving Corporation its right, title or interest in, to or under any
of the rights, properties or assets of either Ultimate or Merger Sub acquired
or to be acquired by the Surviving Corporation as a result of, or in connection
with, the Merger or otherwise to carry out this Agreement, the officers and
directors of the Surviving Corporation shall be authorized to execute and
deliver, in the name and on behalf of either Ultimate or Merger Sub, all such
deeds, bills of sale, assignments and assurances and to take and do, in the
name and on behalf of each of such corporations or otherwise, all such other
actions and things as may be necessary or desirable to vest, perfect or confirm
any and all right, title and interest in, to and under such rights, properties
or assets in the Surviving Corporation or otherwise to carry out this
Agreement.
1.5 Certificate of Incorporation: By-laws: Directors and
Officers. (a) At the Effective Time, the Certificate of Incorporation of
Ultimate, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided by law and such certificate of incorporation.
(b) At the Effective Time, the By-laws of Ultimate, as in
effect immediately prior to the Effective Time, shall be the By-laws of the
Surviving Corporation until thereafter amended as provided by law, the
Certificate of Incorporation of the Surviving Corporation and such by-laws.
(c) At the Effective Time, Steven M. Bogen, Brian Duffy,
Steven Smith and Jeffrey Smith will be the only initial directors of the
Surviving Corporation, and the officers listed on Schedule 1.5(c) hereto will
be the initial officers of the Surviving Corporation, in each case until their
respective successors are elected or appointed and qualified. If, at the
Effective Time, a vacancy shall exist on the Board of Directors or in any
office of the Surviving Corporation, such vacancy may thereafter be filled in
the manner provided by law, the Certificate of Incorporation of the Surviving
Corporation and the By-laws of the Surviving Corporation.
2
<PAGE> 4
1.6 Conversion of Securities; Piggy-Back Registration
Rights.
(a) At the Effective Time, by virtue of the Merger and
without any action on the part of any of Merger Sub, Ultimate or the holder of
any of the securities of Ultimate or Merger Sub:
(i) each share of Ultimate Stock issued and outstanding
immediately prior to the Effective Time shall be canceled and
extinguished and be converted into the right to receive the Merger
Consideration (as defined below) upon surrender of the certificate
representing such share of Ultimate Stock; and
(ii) each share of Merger Sub common stock, par value $.01
per share, issued and outstanding immediately prior to the Effective
Time shall hereafter represent one validly issued, fully paid and
nonassessable share of common stock, par value $.01 per share, of the
Surviving Corporation.
(b) The "Merger Consideration" to be paid by Fresh Juice
for the shares of Ultimate Stock in accordance with the Merger shall, subject
solely to the adjustments as hereinafter provided for, be paid as follows:
(i) delivery to the Selling Stockholders of an
aggregate of 1,140,000 validly issued, duly authorized and
non-assessable shares of common stock, par value $.01 per
share, of Fresh Juice Stock, as set forth in subparagraph
(b)(ii) below;
(ii) delivery to the Selling Stockholders of the
following number of validly issued, duly authorized and
non-assessable shares of Fresh Juice Stock:
Bogen - 629,508 shares of Fresh Juice Common;
Rountree - 161,994 shares of Fresh Juice Common;
Petry - 288,648 shares of Fresh Juice Common;
Feldman - 37,050 shares of Fresh Juice Common; and
Coyle - 22,800 shares of Fresh Juice Common.
provided, however, that the above-referenced proration may be adjusted among
the Selling Stockholders with the consent of the affected Selling
Stockholder(s), so long as it is done so without affecting the rights of the
parties not participating in such adjustment; and
(iii) each of the Selling Stockholders acknowledges
that the shares of Fresh Juice Stock being issued and
delivered pursuant to the Merger will not be registered
pursuant to the Securities Act of 1933, as amended, and must
be held unless and until such
3
<PAGE> 5
shares are subsequently registered under the 1933 Act or an
exemption from registration is available; accordingly a legend
shall be placed on the stock certificates evidencing such
shares of common stock to reflect certain transfer
restrictions.
(c) The Selling Stockholders shall have "piggy back"
registration rights as set forth in the Registration Rights Agreement among
Fresh Juice and the Selling Stockholders (attached hereto as Exhibit C, the
"Registration Agreement").
1.7 Surrender of Shares: Stock Transfer Books.
(a) If delivery of the Merger Consideration in respect of
canceled shares of Ultimate Stock is to be made to a person other than the
person in whose name a surrendered certificate or instrument is registered, it
shall be a condition to such delivery that the certificate or instrument so
surrendered shall be properly endorsed or shall be otherwise in proper form for
transfer and that the person requesting such payment shall have paid any
transfer and other taxes required by reason of such payment in a name other
than that of the registered holder of the certificate or instrument surrendered
or shall have established to the satisfaction of Merger Sub that such tax
either has been paid or is not payable.
(b) If, after the Effective Time, certificates for
Ultimate Stock are presented to the Surviving Corporation, they shall be
canceled and exchanged for the Merger Consideration as provided in Section 1.6
hereof.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS
Each of the Selling Stockholders hereby jointly and severally
represents and warrants to each of Fresh Juice and Merger Sub as follows:
2.1 Authorization: No Conflict. (a) Each Selling
Stockholder has the legal right and capacity to execute and deliver this
Agreement and to perform the transactions contemplated to be performed by him
hereunder. This Agreement constitutes the legal, valid and binding agreement of
each Selling Stockholder and is enforceable against him in accordance with its
terms, except to the extent that enforceability may be limited by bankruptcy,
insolvency, moratorium or other laws affecting the enforceability of creditors'
rights generally and that equitable remedies may be granted in the discretion
of a court.
(b) Except as set forth on Schedule 2.1(b) hereto, the
execution, delivery and performance of this Agreement and the documents,
transactions and instruments contemplated hereby by each Selling Stockholder
does not and will not violate, conflict with, result in a breach of any
provisions of, constitute a default (or an event which, with or without due
notice or lapse
4
<PAGE> 6
of time, or both, would constitute a default) under, result in the termination
of, accelerate the performance required by, or result in the creation of any
liens, security interest, charge or other encumbrance upon any of the
properties or assets of Ultimate under any of the terms, conditions or
provisions of, any contract, note, bond, mortgage, indenture, deed of trust,
license, lease, loan agreement, judgment, order, decree, statute, rule,
regulation or other agreement, instrument or obligation to which Ultimate or
any of the Selling Stockholders are a party, or by which either or any of their
respective properties or assets may be bound or affected.
2.2 Approvals. All consents, approvals, permits,
authorizations and orders, if any, necessary for the due authorization,
execution and delivery by and on behalf of each Selling Stockholder of this
Agreement and any other transaction or obligation contemplated by this
Agreement have been obtained.
2.3 Litigation. There are no actions, suits, proceedings
or investigations pending or, to the knowledge of each Selling Stockholder,
threatened against any Selling Stockholder, which question or challenge the
validity of this Agreement, the transactions contemplated thereto, or any
action to be taken hereunder.
2.4 Certain Contracts. Except as set forth in Schedule
2.4 hereto, there are no outstanding contracts or agreements between any
Selling Stockholder, or any of his "affiliates," (as such term is defined in
the Securities and Exchange Act of 1934) on the one hand, and Ultimate or any
of its subsidiaries, on the other hand, whether written or oral, including
without limitation, contracts or agreements for executive compensation,
severance, employment or retirement.
2.5 Outstanding Options, Warrants or Other Rights. Except
as set forth in Schedule 2.5 hereto, none of the Selling Stockholders has
outstanding any option, warrant or other right permitting or requiring him or
others to purchase or convert any obligation into shares of Ultimate Stock.
There are no voting trusts or other agreements or understandings with respect
to the voting of the shares of capital stock of Ultimate and the shares of the
capital stock of Ultimate are not subject to any preemptive rights, rights of
first refusal or similar rights.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF ULTIMATE AND SELLING STOCKHOLDERS
Each of the Selling Stockholders (with respect to matters
relating to themselves and Ultimate), and Ultimate (with respect to matters
relating to Ultimate) represents and warrants to Fresh Juice and Merger Sub as
follows:
3.1 Organization Standing, etc. Ultimate is a duly
organized and validly existing corporation in good standing under the laws of
the State of New Jersey, and has all
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requisite corporate power and authority to own, lease and operate its
respective properties and assets and to carry on its respective business as now
conducted and as proposed to be conducted. Ultimate is duly qualified to do
business in good standing as a foreign corporation in each jurisdiction (other
than the State of Connecticut) in which the property owned, leased or operated
by it or the nature of the business now conducted or proposed to be conducted
by it makes such qualification necessary. Except as set forth on Schedule 3.1
herewith, Ultimate has no subsidiaries or affiliates.
3.2 Capitalization.
Ultimate has an authorized capitalization of 2,500 shares of
capital stock without par value of which 1,112 shares of common stock are
issued and outstanding. There are no treasury shares of Ultimate capital stock.
3.3 Authorization. Ultimate has all requisite corporate
power and authority to execute and deliver this Agreement and to perform the
transactions contemplated hereby. Ultimate has taken all requisite corporate
action to authorize the execution, delivery and performance of this Agreement
and the transactions contemplated hereby. This Agreement is the legal, valid
and binding obligation of Ultimate, enforceable against it in accordance with
its terms, except to the extent that enforceability may be limited by
bankruptcy, insolvency, moratorium or other laws affecting the enforceability
of creditors rights generally and that equitable remedies may be granted in the
discretion of a court.
3.4 Status of Securities. The shares of Ultimate Stock
presently issued and outstanding are duly authorized, validly issued, fully
paid and nonassessable and free and clear of all liens, security interests,
pledges, charges, claims and encumbrances of any kind.
3.5 Certificate of Incorporation and By-laws. Ultimate
has delivered to Fresh Juice a true, correct and complete copy of its
Certificate of Incorporation and a true, correct and complete copy of its
By-laws, each of which contains all amendments thereto and have been certified
by the Secretary of Ultimate.
3.6 Outstanding Options, Warrants and Other Rights.
Except as set forth on Schedule 3.6 hereto, Ultimate does not have outstanding
any option, warrant or other right permitting or requiring it or others to
purchase or convert any obligation into shares of its capital stock and has not
agreed to issue or sell any shares of such capital stock, except to Fresh Juice
hereunder. Except as set forth on Schedule 3.6 hereto, there are no voting
trusts or other agreements or understandings with respect to the voting of the
shares of capital stock of Ultimate, and the shares of the capital stock of
Ultimate are not subject to any preemptive rights, rights of first refusal or
similar rights.
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3.7 Record Ownership.
The Selling Stockholders are the sole record owners of all of
the shares of Ultimate Stock issued and outstanding. The Ultimate Stock owned
by the Selling Stockholders is owned free and clear of all liens, claims,
charges and encumbrances of every kind. All of the stockholders and the shares
of Ultimate Common Stock owned by each of the Selling Shareholders are set
forth on Schedule 3.7 hereto.
3.8 Financial Statements. Ultimate has delivered to Fresh
Juice (i) financial statements including the related notes thereto for its
fiscal year ended June 30, 1995 (audited) containing the balance sheets of
Ultimate as of the end of such fiscal year, and the related statement of
operations, and retained earning and statement of cash flows, and (ii)
(unaudited) internal financial statements for the six-month period ended
December 31, 1995 and the months of January and February 1996 (unaudited)
containing the corresponding balance sheets and related statements of
operations and retained earnings. The foregoing audited financial statements
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods indicated, are complete and
correct, and fairly present the financial position and stockholders' equity of
Ultimate as of the date and for the respective periods indicated. Except as
set forth on Schedule 3.8 hereto, the balance sheets as of June 30, 1995,
December 31, 1995, January 31, 1996 and February 29, 1996 each make full and
adequate provision for all fixed and contingent obligations and liabilities of
Ultimate as of the date and for the periods indicated, and as of February 29,
1996 Ultimate does not have any fixed obligations or liabilities not reflected
in or adequately reserved against on such balance sheet as of February 29, 1996
or set forth in the Schedules to this Agreement. To the knowledge of Ultimate
and the Selling Stockholders, there is no basis for the assertion against
Ultimate of any liability or obligation not adequately reflected or reserved
against in such financial statement or set forth in the Schedules to this
Agreement; Ultimate has no liabilities, fixed or contingent, which would
adversely affect the conduct of the business of Ultimate other than as
reflected or reserved against in the balance sheet of Ultimate as of February
29, 1996 or set forth in the Schedules to this Agreement.
3.9 Certain Changes or Events. Except as set forth on
Schedule 3.9 hereto, since June 30, 1995, Ultimate has not:
(i) experienced any change in its condition (financial or
otherwise), properties, assets, liabilities, business, operations or
prospects other than changes in the ordinary course of business which
have not, individually or in the aggregate, had a material adverse
effect on its properties, assets, business, operations or financial
condition;
(ii) declared, set aside, made or paid any dividend or
other distribution in respect of its capital stock or purchased or
redeemed, directly or indirectly, any shares of its capital stock;
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(iii) issued or sold any shares of its capital stock of any
class, or any options, warrants, conversion or other rights to purchase
any such shares or any securities convertible into or exchangeable for
such shares;
(iv) incurred any indebtedness for borrowed money (except
borrowings in the ordinary course of business not exceeding $10,000 in
the aggregate) or issued or sold any debt securities;
(v) mortgaged, pledged, or subjected to any lien, lease,
security interest or other charge or encumbrance any of its properties
or assets, tangible or intangible, except (i) liens for current taxes
not due and payable or being contested in good faith by appropriate
proceedings; (ii) liens imposed by law and incurred in the ordinary
course of business for obligations not yet due to carriers,
warehousemen, laborers, materialmen and the like; and (iii)
encumbrances, easements and security interests which do not detract
from the value or interfere with the use of the properties affected
thereby;
(vi) acquired or disposed of any assets or properties of
material value except in the ordinary course of business;
(vii) forgiven or canceled any debts or claims, or waived
any rights, except in the ordinary course of business,
(viii) entered into any material transaction other than in
the ordinary course of business;
(ix) granted to any officer or salaried employee or any
class of other employees any increase in compensation in any form in
excess of the amount thereof in effect as of June 30, 1995 or any
severance or termination pay (other than in amounts consistent with
past practices), or entered into any written employment agreement or
arrangement with any person;
(x) entered into, adopted or amended in any respect any
collective bargaining agreement or adopted or amended any bonus, profit
sharing, compensation, stock option, pension, retirement, deferred
compensation, insurance or other similar plan, agreement, trust, fund
or arrangement for the benefit of employees;
(xi) suffered any damage, destruction or loss (whether or
not covered by insurance) which materially adversely affects its
condition (financial or otherwise), properties, assets, business,
operations or prospects;
(xii) suffered any strike or other labor trouble materially
adversely affecting its business, operations or prospects;
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(xiii) suffered any loss of employees or customers that
materially adversely affects or could materially adversely affect its
business, operations or prospects; or
(xiv) incurred any liability or obligation (fixed or
contingent) except (A) liabilities and obligations in the ordinary
course of business and (B) other liabilities and obligations not
exceeding $10,000 in the aggregate.
3.10 Title to Properties: Liens. Except as set forth on
Schedule 3.10 hereto, Ultimate has good and marketable title to, or valid and
subsisting leasehold interests in, all of its properties and assets, real and
personal, in each case free and clear of any mortgage, pledge, lien, lease,
charge, encumbrance, conditional sale or other title retention agreement,
except for the lien of taxes not yet due and payable or being contested in good
faith by appropriate proceedings, and except for such imperfections of title
and encumbrances, if any, as do not detract from the value, or interfere with
the present use, of its properties or assets subject thereto or affected
thereby, or otherwise impair its business operations. Except as set forth on
Schedule 3.10 hereto, there is not under any lease of real or personal property
to which Ultimate is a party any existing default or event of default or event
which with notice or lapse of time or both would constitute a default or event
of default.
3.11 Adequacy of Patents and Other Rights. Except as set
forth on Schedule 3.11 hereto, Ultimate has all necessary patents, licenses,
trademark, trade names, copyrights and other rights that are required to
conduct its business substantially as now being conducted and as proposed to be
conducted, and no other right, license or authorization of any kind whatsoever
is required to so carry on its business. There is no infringement or claim of
any adverse nature with respect to any patent, patent application, license,
trademark, trade name, copyright or right in any thereof.
3.12 Litigation. Except as set forth on Schedule 3.12
hereof, there are no actions, suits, proceedings or investigations pending or,
to the knowledge of Ultimate or the Selling Stockholders, threatened against or
affecting Ultimate, or the Selling Stockholders, at law or in equity, before
any court, commission, board, bureau, agency, instrumentality or other
governmental authority that may result in any material adverse effect upon the
business, assets, liabilities, prospects or condition (financial or otherwise)
of Ultimate or which seems to prevent the consummation of any of the
transactions contemplated by this Agreement. To the knowledge of Ultimate or
the Selling Stockholders, there are no claims that have not been asserted
against Ultimate or the Selling Stockholders that are probable of assertion.
3.13 Accounts Receivable. Except as set forth on Schedule
3.13 hereto, the accounts receivable of Ultimate as shown on its balance sheet
at February 29, 1996, or thereafter acquired by them, are usual and normal
receivables and, through the continuation of existing collection procedures,
are collectible in the aggregate amounts thereof. To the knowledge of Ultimate
or the Selling Stockholders, such accounts receivable are subject to no valid
defenses or offsets except routine customer complaints or warranty demands of
an immaterial nature.
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Ultimate has determined that no reserve for doubtful accounts is necessary at
this time , and therefore none has been established.
3.14 Inventories. Except as set forth on Schedule 3.14
hereto, the inventories of Ultimate, shown on its balance sheet at February 29,
1996, or thereafter acquired by it, consist of items of a quality and quantity
usable or salable in the normal course of its business; the value of all items
of obsolete materials and of materials of below standard quality has not been
written down to realizable market value and adequate reserves have not been
provided therefor, however, the aggregate value of all obsolete materials is of
immaterial value; and the values at which such inventories are carried reflect
the normal inventory valuation policies of Ultimate.
3.15 Consents, etc. Except as set forth on Schedule 3.15
hereto, Ultimate is not required to obtain any consent, approval, permit or
authorization of any person, including, without limitation, any governmental
agency or regulatory authority, in connection with execution, delivery, lawful
consummation and performance of this Agreement and the transactions
contemplated thereby.
3.16 Compliance with Other Instruments, etc. Except as set
forth on Schedule 3.16 hereto, the execution and delivery of this Agreement and
the performance of the transactions contemplated hereby by Ultimate or any of
the Selling Stockholders does not and will not violate, conflict with, result
in a breach of any provisions of, constitute a default (or an event which, with
or without due notice or lapse of time, or both, would constitute a default)
under, result in the termination of, accelerate the performance required by, or
result in the creation of any lien, security interest, charge or other
encumbrance upon any of the properties or assets of Ultimate, under any
provision of its Certificate of Incorporation or by-laws, or any contract,
mortgage, indenture, lien, license, permit, lease or other agreement or
instrument, judgment, decree, ordinance, regulation or order or any other
restriction of any other kind or character to which Ultimate is a party or by
which Ultimate, or any of its properties, is bound or affected.
3.17 Existing Contracts. Except as set forth on Schedule
3.17(a), all material contracts, agreements, leases, licenses and
understandings to which Ultimate is a party are in full force and effect and no
default, or event which with notice or lapse of time or both would constitute a
default, exists in respect thereof on the part of Ultimate, or the other
parties thereto. Except as set forth on Schedule 3.17(b) hereto, Ultimate is
not a party to and does not have any obligation, contingent or otherwise, under
any (i) written or oral contract not made in the ordinary course of business in
excess of $50,000, (ii) employment contract or contract with or for the
benefit, directly or indirectly, of any officer, director, shareholder or
partner other than Rountree or Coyle (iii) collective bargaining agreement with
employees, (iv) bonus, pension, profit-sharing, retirement, stock purchase,
hospitalization, insurance or other plan providing employee benefits, (v) lease
with respect to any property, real or personal, whether as lessor or lessee
other than its current corporate headquarters and warehouse, (vi) contract for
the purchase
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of materials, supplies or equipment, or the provision by Ultimate of goods or
services, for an aggregate price in excess of $25,000, (vii) contract or
commitment for capital expenditures in excess of $25,000 in the aggregate,
(viii) contract continuing over a period of more than one year from its date in
excess of $50,000, (ix) mortgage, loan or credit agreement, (x) contract
requiring consent to the transactions contemplated by this Agreement, (xi)
guaranty of the obligations of any other person, or (xii) any other material
contact, agreement or understanding.
3.18 Undocumented Liabilities. Except as set forth in the
financial statements referred to in Section 3.8 hereof and except for property
owned by customers and stored upon the premises of Ultimate for use in future
orders of such customers, of which Ultimate or the Selling Stockholders are
aware, Ultimate does not have any material liabilities, contingent or
otherwise, that are not disclosed in such financial statements or set forth in
the Schedules to this Agreement, including, without limitation, tax liabilities
due or to become due, whether disputed or not, except such liabilities as have
been incurred in the ordinary course of business.
3.19 Taxes. Except as set forth on Schedule 3.19 hereto,
Ultimate has filed all tax returns which are required to be filed, and has paid
all taxes which have become due, pursuant to such returns or pursuant to any
assessment received by Ultimate. Ultimate has made adequate provision for all
taxes due with respect to all periods as to which a return has not yet been
filed. There is no tax deficiency proposed or threatened against Ultimate and
no tax returns of Ultimate are under examination or audit.
3.20 Employee Matters. Ultimate has withheld all amounts
required by law or contract to be withheld from the wages or salaries of its
employees and is not liable for any arrears or wages or any taxes or penalties
for failure to comply with any of the foregoing or for payment to any trust or
other fund compensation, social security or other benefits for employees. To
its knowledge, Ultimate has not engaged in any unfair labor practice or
discriminated on the basis of race, age, sex or otherwise in its employment
conditions or practices with respect to its employees. There are no unfair
labor practice or race, age, sex or other discrimination complaints pending,
or, to the knowledge of Ultimate or the Selling Stockholders, threatened
against Ultimate by any employee, former or current, before any domestic
(federal, state or local) or foreign board, department, commission or agency
nor, to the knowledge of Ultimate or the Selling Stockholders, does any basis
therefore exists. Except as set forth on Schedule 3.20 hereto, there are no
existing or, to the knowledge of Ultimate or the Selling Stockholders,
threatened, labor strike, disputes, grievances, controversies or other labor
troubles affecting the business of Ultimate. There are not pending or, to the
knowledge of Ultimate or the Selling Stockholders, threatened representation
questions respecting any employees.
3.21 Financial Statements. Ultimate shall provide to Fresh
Juice, when requested by Fresh Juice, such financial statements and information
pertaining to Ultimate as shall be necessary for Fresh Juice to satisfy any and
all United State Securities and Exchange Commission disclosure requirements,
such as filing of a Form 8-K, as may arise in connection with this Agreement
and transactions contemplated thereby.
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3.22 Accounts Receivable. The accounts receivable of
Ultimate as shown on its balance sheet at February 29, 1996, or thereafter
acquired by it, are usual and normal receivables and, through the continuation
of existing collection procedures, are collectible in the aggregate amounts
thereof. To the knowledge of Ultimate, such accounts receivable are subject to
no valid defenses or offsets except routine customer complaints of warranty
demands of an immaterial nature. Ultimate has determined that no reserve for
doubtful accounts is necessary at this time, and therefore none has been
established.
3.23 Miscellaneous. Except as otherwise set forth on
Schedule 3.23(v) or on the other Schedules to this Agreement, Ultimate:
(i) is in substantial compliance with all applicable
federal, state and local statues, codes, ordinances, rules or
regulation; has not received any notice of a material violation of any
law, order, regulation or requirement relating to the operation of the
business or the ownership of property;
(ii) does not have, as of February 29, 1996, any unfunded
costs or obligations in respect of employee benefit plans and does not
have delinquent premiums on health, accident, disability or any other
insured employee benefits;
(iii) has not, since February 29, 1996, permitted any option
to renew any lease or any option to purchase any property to expire
unexercised, in whole or in part;
(iv) does not have any safe deposit boxes, vault boxes or
similar arrangements for the safekeeping of property or outstanding
powers of attorney (other than appointments of statutory agents to
receive service of process); and
(v) except as provided for above, has made no express
warranty to any person or entity with respect to any product it
manufactures or sells or has manufactured or sold and has not made or
agreed to make any indemnification payment, or replacement with respect
to any product warranty claim, except for the warranties and/or
agreement(s) to indemnify or replace product of which true and correct
copies have been delivered to Fresh Juice, the warranties applicable
under the Uniform Commercial Code as in effect from time to time in the
State of New Jersey or in any other state in which its products are
sold and any other warranties under other state or federal laws.
3.24 Accounting and Tax Matters. Neither Ultimate nor any
of its subsidiaries has taken or agreed to take any action or has any knowledge
of any fact or circumstance that would prevent the transactions contemplated
hereby, including the Merger, from qualifying as a reorganization within the
meaning of Section 368 of the Internal Revenue Code of 1986, as amended.
Ultimate and the Selling Stockholders have no present plan or intention to
liquidate, or cause the liquidation of Ultimate or to dispose of or cause the
disposition of substantially all of its assets after the Merger.
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3.25 Collective Bargaining Agreement. Ultimate is not now
nor ever has been a party to or bound by any collective bargaining agreement or
union contact which covers or covered its employees.
3.26 No Right of Setoff. Except as set forth on Schedule
3.26 hereto, as of the date hereof, none of the Selling Stockholders is
indebted to Ultimate for any monies and Ultimate has no right of setoff with
respect to any amounts due to the Selling Stockholders from Ultimate.
3.27 Insurance. Ultimate maintains such policies of
insurance in such coverage amounts and for such risks as are generally
maintained by companies in the same industry with similar sales volumes. As of
the date hereof, neither Ultimate nor any of its subsidiaries has received any
notice of cancellation or notice of a material amendment of any such insurance
policy or bond or is in default under such policy or bond, no coverage
thereunder is being disputed and all material claims thereunder have been filed
in a timely fashion. All pending material claims under such policies or bonds
are disclosed in this Agreement or the Schedules hereto.
3.28 Environmental Matters. Except as disclosed on Schedule
3.28 hereto neither Ultimate nor any of its subsidiaries has received any
written notice, citation, claim, assessment, proposed assessment or demand for
abatement alleging that Ultimate or any of its subsidiaries (either directly or
as a successor-in-interest in connection with the enforcement of remedies to
realize the value of properties serving as collateral for outstanding loans) is
responsible for the correction or clean-up of any condition material to the
business, operations, assets or financial condition of Ultimate or its
subsidiaries. Except as disclosed on Schedule 3.28, Ultimate has no knowledge
that any toxic or hazardous substances or materials have been emitted,
generated, disposed of or stored on any property owned or leased by Ultimate or
any of its subsidiaries in any manner that violates or, after the lapse of time
may violate, any presently existing federal, state or local law or regulation
governing or pertaining to such substances and materials.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF MERGER SUB
Merger Sub hereby represents and warrants to Ultimate as
follows;
4.1. Organization Standing, etc. Merger Sub is a duly
organized and validly existing corporation in good standing under the laws of
the State of Delaware and has all requisite corporate power and authority to
own, lease and operate its properties and assets and to carry on its business
as now conducted and as proposed to be conducted. Merger Sub is duly qualified
to do business in good standing as a foreign corporation in each jurisdiction
in which the property is owned, leased or operated by it or the nature of the
business now conducted or
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proposed to be conducted by it makes such qualification necessary. Merger Sub
has no subsidiaries.
4.2 Capitalization. Merger Sub has an authorized
capitalization of 100 shares of common stock, par value $.01 per share, of
which 10 shares are issued and outstanding ("Merger Sub Stock"). There are no
treasury shares of Merger Sub capital stock.
4.3 Authorization: No Conflict.
(a) Merger Sub has all requisite corporate power and
authority to execute and deliver this Agreement and to perform the transactions
contemplated hereby. Merger Sub has taken all requisite corporate action to
authorize the execution, delivery and performance of this Agreement and the
transactions contemplated hereby. This Agreement is the legal, valid and
binding obligations of Merger Sub, enforceable against it in accordance with
its terms, except to the extent that enforceability may be limited by
bankruptcy, insolvency, moratorium or other laws affecting the enforceability
of creditors rights generally and that equitable remedies may be granted in the
discretion of a court.
(b) The execution, delivery and performance of this
Agreement and the documents, transactions and instruments contemplated hereby
by Merger Sub do not and will not violate, conflict with, result in a breach of
any provisions of, constitute a default (or an event which, with or without due
notice or lapse of time or both, would constitute a default) under, result in
the termination of, accelerate the performance required by, or result in the
creation of any lien, security interest, charge or other encumbrance upon any
of the properties or assets of Merger Sub under any provision of its charter,
by-laws or other corporate documents, or under any of the terms, conditions or
provisions of any contract, note, bond, mortgage, indenture, deed of trust,
license, lease, loan agreement, judgment, order, decree, statute, rule,
regulation or other agreement, instrument or obligation to which Merger Sub is
a party, or by which it or any of its properties or assets is bound or
affected.
4.4 Status of Securities. The shares of Merger Sub Stock
outstanding are duly authorized, validly issued, fully paid and nonassessable
and free and clear of all liens, security interests, pledges, charges, claims
and encumbrances of any kind.
4.5 Articles of Incorporation and By-laws. Merger Sub has
delivered to Ultimate a true, correct and complete copy of its Certificate of
Incorporation and a true, correct and complete copy of its By-laws, each of
which contains all amendments thereto and has been certified by the Secretary
of Merger Sub.
4.6 Outstanding Options, Warrants or Other Rights. Merger
Sub does not have outstanding any option, warrant or other right permitting or
requiring it or others to purchase or convert any obligation into shares of
capital stock of Merger Sub and has not agreed to issue or sell any shares of
capital stock of Merger Sub. There are no voting trusts or other
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agreements or understandings with respect to the voting of the shares of
capital stock of Merger Sub, and the shares of the capital stock of Merger Sub
are not subject to any preemptive rights, rights of first refusal or similar
rights.
4.7 Record Ownership. Fresh Juice is the sole record
owner of all of the shares of Merger Sub Stock issued and outstanding. The
Merger Sub Stock owned by Fresh Juice is owned free and clear of all liens,
claims, charges and encumbrances of every kind.
4.8 Formation and Liabilities. Merger Sub was
incorporated on March 18, 1996 and presently has no assets and no liabilities,
other than cash reflecting the subscription price paid for Fresh Juice's
purchase of the Merger Sub capital stock.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF FRESH JUICE
Fresh Juice represents and warrants to each of the Selling
Stockholders and Ultimate as follows:
5.1 Organization Standing, etc. Fresh Juice is a duly
organized and validly existing corporation in good standing under the laws of
the State of Delaware and has all requisite corporate power and authority to
own, lease and operate its properties and assets and to carry on its business
as now conducted and as proposed to be conducted and to execute and deliver
this Agreement and to perform the transactions contemplated hereby and its
obligations hereunder. Fresh Juice is duly qualified to do business in good
standing as a foreign corporation in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business now conducted or
proposed to be conducted by it makes such qualification necessary. Except as
set forth on Schedule 5.1 hereto, Fresh Juice has no subsidiaries or
affiliates.
5.2 Capitalization. Fresh Juice has an authorized
capitalization of 5,200,000 shares of capital stock, consisting of 5,000,000
shares of Fresh Juice Common and 200,000 shares of series preferred stock, par
value $10.00 per share; there are 3,550,062 shares of Fresh Juice Common issued
and outstanding and there are no shares of such preferred stock issued and
outstanding. All such shares of issued and outstanding Fresh Juice Common have
been duly authorized, validly issued and are fully paid and non-assessable.
There are 200,000 treasury shares of Fresh Juice Common.
5.3 Authorization. Fresh Juice has all requisite
corporate power and authority to execute and deliver this Agreement and to
perform the transactions contemplated hereby. Fresh Juice has taken all
requisite corporate action to authorize the execution, delivery and performance
of this Agreement and the transactions contemplated hereby. This Agreement is
the legal, valid and binding obligations of Fresh Juice, enforceable against it
in accordance with its terms, except to the extent that enforceability may be
limited by bankruptcy, insolvency,
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moratorium or other laws affecting the enforceability of creditors rights
generally and that equitable remedies may be granted in the discretion of a
court.
5.4 Status of Securities. The shares of Fresh Juice
Common to be issued and delivered to the Selling Stockholders pursuant to this
Agreement shall be, as of the Effective Time, duly authorized, validly issued,
fully paid and nonassessable and free and clear of all liens, security
interests, pledges, charges, claims and encumbrances of any kind.
5.5 Articles of Incorporation and By-laws. Fresh Juice has
delivered to Ultimate a true, correct and complete copy of its Certificate of
Incorporation and a true, correct and complete copy of its By-laws, each of
which contains all amendments thereto and have been certified by the Secretary
of Fresh Juice.
5.6 Outstanding Options, Warrants or Other Rights. Except
as set forth in Schedule 5.6 hereto, Fresh Juice does not have outstanding any
option, warrant of other right permitting or requiring it or others to purchase
or convert any obligation into shares of its capital stock and has not agreed
to issue or sell any shares of such capital stock; except as provided for
herein. Other than (a) the Stockholders Agreement among Steven Smith and
Steven M. Bogen dated as of the date hereof, and (b) the Voting Agreement,
dated as of the date hereof, among Craig M. Lessner, Roger Mehner, Fresh Juice
and the Selling Stockholders, there are no voting trusts or other agreements or
understandings with respect to the voting of the shares of capital stock of
Fresh Juice, and the shares of the capital stock of Fresh Juice are not subject
to any preemptive rights, rights of first refusal or similar rights.
5.7 Fresh Juice Financial Statements. Fresh Juice has
delivered to Ultimate and the Selling Shareholders (i) its Annual Report on
Form 10-KSB for the fiscal year ended November 30, 1995, as filed with the
Securities Exchange Commission (the "Fresh Juice 1995 Form 10-KSB") and (ii)
its internal quarterly financial statements for the quarter ended February 29,
1996 (collectively, the "Fresh Juice Financial Statements"). The foregoing
financial statements have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods indicated,
are complete and correct, and fairly present the financial position and
stockholder's equity of Fresh Juice as of the date and for the respective
periods indicated. Except as set forth on Schedule 5.7 hereto, the balance
sheets as of November 30, 1995 and February 29, 1996 make full and adequate
provision for all fixed and contingent obligations and liabilities of Fresh
Juice as of the date and for the periods indicated, and as of February 29,
1996,Fresh Juice does not have any fixed obligations or liabilities not
reflected in or adequately reserved against on such balance sheet as of
February 29, 1996 or set forth in the Schedules to this Agreement. To the
knowledge of Fresh Juice, there is no basis for the assertion against Fresh
Juice of any liability or obligation not adequately reflected or reserved
against in such financial statements or set forth in the Schedules to this
Agreement; Fresh Juice has no liabilities, fixed or contingent, which would
adversely affect the conduct of the business of Fresh Juice other than as
reflected or reserved against in the balance sheet of Fresh Juice as of
February 29, 1996 or set forth in the Schedules to this Agreement.
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5.8 Certain Changes or Events. Except as set forth in
Schedule 5.8 or in the Fresh Juice Financial Statements, since November 30,
1995, Fresh Juice has not:
(i) experienced any change in its condition (financial or
otherwise), properties, assets, liabilities, business, operations or
prospects other than changes in the ordinary course of business which
have not, individually or in the aggregate, had a material adverse
effect on its properties, assets, business, operations or financial
condition;
(ii) declared, set aside made or paid any dividend or other
distribution in respect of its capital stock or purchased or redeemed,
directly or indirectly, any shares of its capital stock; or
(iii) issued or sold any shares of its capital stock of any
class, or any options, warrants conversion or other rights to purchase
any such shares or any securities convertible into or exchangeable for
such shares.
(iv) incurred any indebtedness for borrowed money (except
borrowings in the ordinary course of business not exceeding $10,000 in
the aggregate) or issued or sold any debt securities;
(v) mortgaged, pledged, or subjected to any lien, lease,
security interest or other charge or encumbrance any of its properties
or assets, tangible or intangible, except (i) liens for current taxes
not due and payable or being contested in good faith by appropriate
proceedings; (ii) liens imposed by law and incurred in the ordinary
course of business for obligations not yet due to carriers,
warehousemen, laborers, materialmen and the like; and (iii)
encumbrances, easements and security interests which do not detract
from the value or interfere with the use of the properties affected
thereby;
(vi) acquired or disposed of any assets or properties of
material value except in the ordinary course of business;
(vii) forgiven or canceled any debts or claims, or waived
any rights, except in the ordinary course of business,
(viii) entered into any material transaction other than in
the ordinary course of business;
(ix) granted to any officer or salaried employee or any
class of other employees any increase in compensation in any form in
excess of the amount thereof in effect as of November 30, 1995 or any
severance or termination pay (other than in amounts consistent with
past practices), or entered into any written employment agreement or
arrangement with any person;
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(x) entered into, adopted or amended in any respect any
collective bargaining agreement or adopted or amended any bonus, profit
sharing, compensation, stock option, pension, retirement, deferred
compensation, insurance or other similar plan, agreement, trust, fund
or arrangement for the benefit of employees (whether or not legally
binding);
(xi) suffered any damage, destruction or loss (whether or
not covered by insurance) which materially adversely affects its
condition (financial or otherwise), properties, assets, business,
operations or prospects;
(xii) suffered any strike or other labor trouble materially
adversely affecting its business, operations or prospects;
(xiii) suffered any loss of employees or customers that
materially adversely affects or could materially adversely affect its
business, operations or prospects; or
(xiv) incurred any liability or obligation (fixed or
contingent) except (A) liabilities and obligations in the ordinary
course of business and (B) other liabilities and obligations not
exceeding $10,000 in the aggregate.
5.9 Title to Properties; Liens. Except as set forth in
Schedule 5.9 hereto, Fresh Juice and its subsidiaries each have good and
marketable title to, or valid and subsisting leasehold interests in, all of
their respective properties and assets, real and personal, in each case free
and clear of any mortgage, pledge, lien, lease, charge, encumbrance,
conditional sale or other title retention agreement, except for the lien of
taxes not yet due and payable or being contested in good faith by appropriate
proceedings, and except for such imperfections of title and encumbrances, if
any, as do not detract from the value, or interfere with the present use, of
their respective properties or assets subject thereto or affected thereby, or
otherwise impair their respective business operations. There is not under any
lease of real or personal property, to which Fresh Juice or any of its
subsidiaries is a party any existing default or event of default or event which
with notice or lapse of time or both would constitute a default or event of
default.
5.10 Adequacy of Patents and Other Rights. Fresh Juice has
all necessary patents, licenses, trademarks, trade names, copyrights and other
rights that are required to conduct business substantially as now being
conducted and as proposed to be conducted, and no other right, license or
authorization of any kind whatsoever is required to so carry on its business.
There is no infringement or claim of any adverse nature with respect to any
patent, patent application, license trademark, trade name, copyright or right
in any thereof.
5.11 Accounts Receivable. Except as set forth on Schedule
5.11 hereto or in the Fresh Juice Financial Statements, the accounts receivable
of Fresh Juice as shown on its balance sheet at February 29, 1996, or
thereafter acquired by it, are usual and normal receivables and, through the
continuation of existing collection procedures, are collectible in the
aggregate amounts thereof, after allowance for doubtful accounts in the amount
of the reserve
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established therefor. To the knowledge of Fresh Juice, such accounts
receivable are subject to no valid defenses or offsets except routine customer
complaints or warranty demands of an immaterial nature. To the extent deemed
appropriate and necessary by Fresh Juice, an adequate reserve for doubtful
accounts in the ordinary course of business has been established.
5.12 Inventories. Except as set forth on Schedule 5.12
hereto, the inventories of Fresh Juice, shown on its balance sheet at February
29, 1996, or thereafter acquired by them, consist of items of a quality and
quantity usable or salable in the normal course of its business; the value of
all items of obsolete materials and of materials of below standard quality has
been written down to realizable market value or adequate reserves have been
provided therefor, however, the aggregate value of all obsolete materials is of
immaterial value; and the values at which such inventories are carried reflect
the normal inventory valuation policies of Fresh Juice.
5.13 Litigation, etc. Except as set forth in Schedule
5.13, or as disclosed in the Fresh Juice Financial Statements, there are no
actions, suits, proceedings or investigations pending or, to the knowledge of
Fresh Juice, threatened against or affecting Fresh Juice, at law or in equity
before any court, commission, board, bureau, agency, instrumentality or other
governmental authority that may result in any material adverse effect upon the
business, assets, liabilities, prospects or condition (financial or otherwise)
of Fresh Juice or which seems to prevent the consummation of any of the
transactions contemplated by this Agreement. To the knowledge of Fresh Juice,
there are no claims that have not been asserted against it that are probable of
assertion.
5.14 Consents, etc. Except as set forth in Schedule 5.14
hereto, Fresh Juice is not required to obtain any consent, approval, permit or
authorization of any person, including, without limitation, any governmental
agency or regulatory authority, in connection with the execution, delivery,
lawful consummation and performance of this Agreement and the transactions
contemplated thereby, or the consummation of the transactions contemplated
hereby or thereby.
5.15 Compliance with Other Instruments, etc. Except as set
forth in Schedule 5.14 hereto, the execution, delivery and performance of this
Agreement by Fresh Juice does not and will not violate, conflict with, result
in a breach of any provisions of, constitute a default (or an event which, with
or without due notice or lapse of time, or both, would constitute a default)
under, result in the termination of, accelerate the performance required by, or
result in the creation of any lien, security interest, charge or other
encumbrance upon any of the properties or assets of Fresh Juice, under any
provision of its charter or by-laws, or any contract, mortgage, indenture,
lien, license, permit, lease or other agreement or instrument, judgment,
decree, ordinance, regulation or order or any other restriction of any other
kind or character to which Fresh Juice is a party or by which Fresh Juice or
any of its properties, is bound or affected.
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5.16 Existing Contracts. Except as set forth in the Fresh
Juice Form 10-KSB and on Schedule 5.16(a), all material contracts, agreements,
leases, licenses and understandings to which Fresh Juice or its subsidiaries
are a party are in full force and effect and no default, or event which with
notice or lapse of time or both would constitute a default, exists in respect
thereof on the part of Fresh Juice, or the other parties thereto. Except as set
forth in the Fresh Juice 10-KSB or on Schedule 5.16(b) hereto, Fresh Juice is
not a party to and does not have any obligation, contingent or otherwise, under
any (i) written or oral contract not made in the ordinary course of business in
excess of $50,000, (ii) employment contract or contract with or for the
benefit, directly or indirectly, of any officer, director, shareholder or
partner other than Smith, (iii) collective bargaining agreement with employees,
(iv) bonus, pension, profit-sharing, retirement, stock purchase,
hospitalization, insurance or other plan providing employee benefits, (v) lease
with respect to any property, real or personal, whether as lessor or lessee
other than its current corporate headquarters and warehouse, (vi) contract for
the purchase of materials, supplies or equipment, or the provision by Fresh
Juice of goods or services, for an aggregate price in excess of $25,000, (vii)
contract or commitment for capital expenditures in excess of $25,000 in the
aggregate, (viii) contract continuing over a period of more than one year from
its date in excess of $50,000, (ix) mortgage, loan or credit agreement, (x)
contract requiring consent to the transactions contemplated by this Agreement,
(xi) guaranty of the obligations of any other person, or (xii) any other
material contact, agreement or understanding.
5.17 Undocumented Liabilities. Except as set forth in the
financial statements referred to in Section 5.7 hereof and except for property
owned by customers and stored upon the premises of Fresh Juice for use in
future orders of such customers, of which Fresh Juice is aware, Fresh Juice
does not have any liabilities, contingent or otherwise, that are not disclosed
in the Fresh Juice Financial Statements, including, without limitation, tax
liabilities due or to become due, whether disputed or not, except such
liabilities as have been incurred in the ordinary course of business.
5.18 Taxes. Fresh Juice has filed all tax returns which
are required to be filed, and has paid all taxes which have become due,
pursuant to such returns or pursuant to any assessment received by Fresh Juice.
Fresh Juice has made adequate provision for all taxes due with respect to all
periods as to which a return has not yet been filed. There is no tax deficiency
proposed or threatened against Fresh Juice and no tax returns of Fresh Juice
are under examination or audit.
5.19 Employee Matters. Fresh Juice has withheld all
amounts required by law or contract to be withheld from the wages or salaries
of its employees and is not liable for any arrears or wages or any taxes or
penalties for failure to comply with any of the foregoing or for payment to any
trust or other fund compensation, social security or other benefits for
employees. To its knowledge, Fresh Juice has not engaged in any unfair labor
practice or discriminated on the basis of race, age, sex or otherwise in its
employment conditions or practices with respect to its employees. There are no
unfair labor practice or race, age, sex or other discrimination complaints
pending, or, to the knowledge of Fresh Juice, threatened against Fresh Juice by
any
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employee former or current before any domestic (federal, state or local) or
foreign board, department, commission or agency nor, to the knowledge of Fresh
Juice, does any basis therefore exist. There are no existing or, to the
knowledge of Fresh Juice threatened, labor strikes, disputes, grievances,
controversies or other labor troubles affecting the business of Fresh Juice.
There are not pending or, to the knowledge of Fresh Juice, threatened
representation questions respecting any employees.
5.20 Miscellaneous. Fresh Juice:
(i) is in substantial compliance with all applicable
federal, state and local statutes, codes, ordinances, rules or
regulations; Fresh Juice has not received any notice of violation of
any law, order, regulation or requirements relating to the operation of
its business or the ownership of its property;
(ii) does not have, as of November 30, 1995 any unfunded
costs or obligations in respect of employee benefit plans and does not
have unpaid premiums on health, accident, disability or any other
insured employee benefits;
(iii) has not, since November 30, 1995, permitted any option
to renew any lease or any option to purchase any property to expire
unexercised, in whole or in part;
(iv) has made no express warranty to any person or entity
with respect to any product it manufactures or sells or has
manufactured or sold and has not made or agreed to make any
indemnification payment, or replacement with respect to any product
warranty claim, except for the warranties of which true and correct
copies have been delivered to Ultimate and the warranties applicable
under the Uniform Commercial Code as in effect from time to time in the
State of New York.
5.21 Collective Bargaining Agreement. Fresh Juice is not
now nor ever has been a party to or bound by any collective bargaining
agreement or union contact which covers or covered its employees.
5.22 Accounts Receivable. Except as set forth on Schedule
5.22 hereto, the accounts receivable of Fresh Juice as shown on its balance
sheet at November 30, 1995, or thereafter acquired by it, are usual and normal
receivables and, through the continuation of existing collection procedures,
are collectible in the aggregate amounts thereof, after allowance for doubtful
accounts in the amount of the reserve established therefor. To the knowledge
of Fresh Juice, such accounts receivable are subject to no valid defenses or
offsets except routine customer complaints of warranty demands of an immaterial
nature. An adequate reserve for doubtful accounts in the ordinary course of
business has been established.
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5.23 Tax-Free Reorganization. Neither Fresh Juice or any
of its subsidiaries has taken or agreed to take any action or has knowledge of
any fact or circumstance that would prevent the Merger transaction contemplated
herein from qualifying as a tax-free reorganization within the meaning of
Section 368 of the Internal Revenue Code of 1986, as amended. Fresh Juice has
no present plan or intention to liquidate, or cause the liquidation of Ultimate
or to dispose of or cause the disposition of substantially all of its assets
after the Merger.
5.24 No Right of Setoff. As of the date hereof, none of
the Selling Stockholders is indebted to Fresh Juice for any monies and Fresh
Juice has no right of setoff with respect to any amounts due to the Selling
Stockholders from Fresh Juice.
5.25 SEC Documents. Fresh Juice has made available to
Ultimate (or, with respect to documents filed subsequent to the date of this
Agreement, will make available to Ultimate) a true and complete copy of each
report, schedule, registration statement and definitive proxy statement filed
by Fresh Juice with the SEC since January 1, 1993 (such documents, as amended
since the time of their filing, being referred to herein as the "Fresh Juice
SEC Documents"), which are all the documents (other than preliminary material)
that Fresh Juice was required to file with the SEC since such date. As of
their respective dates, the Fresh Juice SEC Documents complied or will comply
in all material respects with the requirements of the Securities Act of 1933,
as amended (the "Securities Act"), or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as the case may be, and the rules and regulations
of the SEC thereunder applicable to such Fresh Juice SEC Documents, and none of
the Fresh Juice SEC Documents contained or will contain any untrue statement of
a material fact or omitted or will omit to state a 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; provided that
disclosures as of a later date shall be deemed to modify disclosures of an
earlier date. The financial statements of Fresh Juice included in the Fresh
Juice SEC Documents filed and to be filed subsequent to November 30, 1995
comply and will comply in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC and with
respect thereto, have been and will be 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 or, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC) and fairly present
and will fairly present (subject, in the case of the unaudited statements, to
recurring audit adjustments normal in nature and amount) the consolidated
financial position of Fresh Juice as at the dates thereof and the consolidated
results of its operations and cash flows or changes in financial position for
the periods then ended.
5.26. Insurance. Fresh Juice maintains such policies of
insurance in such coverage amounts and for such risks as are generally
maintained by companies in the same industry with similar sales volumes. As of
the date hereof, neither Fresh Juice nor any of its subsidiaries has received
any notice of cancellation or notice of a material amendment of any such
insurance policy or bond or is in default under such policy or bond, no
coverage thereunder is being disputed and all material claims thereunder have
been filed in a timely fashion. All
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pending material claims under such policies or bonds are disclosed in this
Agreement or the Schedules hereto.
5.27. Environmental Matters. Except as disclosed on Schedule
5.27 hereto neither Fresh Juice nor any of its subsidiaries has received any
written notice, citation, claim, assessment, proposed assessment or demand for
abatement alleging that Fresh Juice or any of its subsidiaries (either directly
or as a successor-in-interest in connection with the enforcement of remedies to
realize the value of properties serving as collateral for outstanding loans) is
responsible for the correction or clean-up of any condition material to the
business, operations, assets or financial condition of Fresh Juice or its
subsidiaries. Except as disclosed on Schedule 5.27, Fresh Juice and its
subsidiaries each have no knowledge that any toxic or hazardous substances or
materials have been emitted, generated, disposed of or stored on any property
owned or leased by Fresh Juice or any of its subsidiaries in any manner that
violates or, after the lapse of time may violate, any presently existing
federal, state or local law or regulation governing or pertaining to such
substances and materials.
ARTICLE 6
CONDITIONS TO BE SATISFIED AT OR PRIOR TO CLOSING
6.1 Unless otherwise waived by Fresh Juice and Merger Sub,
the following conditions shall be fulfilled by Ultimate and/or the Selling
Stockholders on or before the date of this Agreement:
(a) Resignation of Directors or Officers of Ultimate.
Fresh Juice shall have received, in writing, the resignations, effective as of
the Effective Time, of the following directors or officers of Ultimate (which
individuals, except for Steven M. Bogen, constitute all of Ultimate's directors
and executive officers):
(i) Albert L. Rountree, IV
(ii) Daniel Petry
(iii) Mark Feldman
(b) Appointment of Steven Smith as Assistant Secretary.
Smith shall have been appointed and elected to serve effective as of the
Effective Time, as Assistant Secretary and Co-Chairman of the Board of
Directors of Fresh Juice.
(c) Permits, Approvals, Litigation, etc. Ultimate and the
Selling Stockholders shall have obtained, in form and substance reasonably
satisfactory to Fresh Juice and its counsel, all consents, permits, releases
and waivers from third parties that may be required in connection
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with the performance of their respective obligations under this Agreement and
the consummation of the transactions contemplated hereby.
(d) Merger. All requirements of law necessary to effect
the Merger shall have been completed, other than the filing of the appropriate
Certificates of Merger with the Secretary of State's office for each of the
State of Delaware and New Jersey.
(e) No Violation of Law, etc. There shall be no law and
no order shall have been entered and not vacated by a court of competent
jurisdiction which enjoins, restrains, makes illegal or otherwise prohibits
consummation of the transactions contemplated by this Agreement.
(f) Opinion of Counsel for Ultimate. Fresh Juice and
Merger Sub shall have received a favorable written opinion, of Bourne, Noll &
Kenyon, counsel for Ultimate, dated the date hereof, in the form annexed hereto
as Exhibit 6.1(f).
(g) Appointment of Additional Directors of Surviving
Corporation. Brian Duffy and Jeffrey Smith shall each have been nominated and
elected to serve, effective as of the Effective Time, as directors of Fresh
Juice.
(h) Delivery of Ultimate Stock for Cancellation. The
Selling Stockholders shall deliver to Fresh Juice the certificates representing
the shares of Ultimate Stock set forth on Schedule 3.7 marked for cancellation.
6.2 Unless otherwise waived by Ultimate and the Selling
Stockholders, the following conditions shall be fulfilled by Fresh Juice and/or
Merger Sub on or before the date hereof.
(a) Appointment to Fresh Juice's Board of Directors.
(i) The Board of Directors of Fresh Juice shall have
unanimously resolved to increase the number of members of its Board of
Directors to four;
(ii) Brian Duffy shall have been nominated and elected to
serve, effective as of the Effective Time, as a director of Fresh
Juice;
(iii) Bogen shall have been nominated and elected to serve,
effective as of the Effective Time, as a director and Co- Chairman of
the Board of Directors of Fresh Juice; and
(iv) Kathy Siegel and Carol Smith each shall have tendered
their respective written resignations, effective as of the Effective
Time, as officers and directors of Fresh Juice.
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(b) Appointment of Officers of Fresh Juice. Bogen shall
have been nominated and elected to serve, effective as of the Effective Time,
as Chief Executive Officer and Secretary of Fresh Juice and Feldman shall have
been nominated and elected to serve, effective as of the Effective Time, as
Treasurer of Fresh Juice.
(c) Resignation of Smith. Smith shall have tendered, in
writing, his resignation, effective as of the date hereof, as Chief Executive
Officer of Fresh Juice.
(d) Permits, Approvals, Litigation, etc. Fresh Juice and
Merger Sub shall have obtained, in form and substance reasonably satisfactory
to Ultimate and its counsel, all consents, permits, releases and waivers from
third parties that may be required in connection with the performance of their
respective obligations under this Agreement.
(e) Opinion of Counsel for Fresh Juice and Merger Sub.
Ultimate shall have received a favorable written opinion from Manuel Rubio,
Esq., counsel for Fresh Juice and Merger Sub, dated the date hereof, in the
form annexed hereto as Exhibit 6.2(e).
(f) Employment Agreement for Steven M. Bogen. Fresh Juice
shall have entered into an employment agreement with Bogen in a form mutually
acceptable to Bogen and Fresh Juice.
(g) Employment Agreement for Daniel Petry. Fresh Juice
shall have entered into an employment agreement with Daniel Petry in the form
annexed hereto as Exhibit D.
(h) Supply Agreement with Natural Juice Company, Inc.
Fresh Juice shall have entered into a supply agreement with Natural Juice
Company, Inc. in the form annexed hereto as Exhibit E.
(i) Merger Agreement with Clear Springs Citrus, Inc.
Fresh Juice shall have entered into a Merger Agreement by and among Fresh
Juice, The Fresh Juice Company of Florida, Inc., Clear Springs Citrus, Inc.,
Brian Duffy and The Bogen Group, L.L.C. dated as of the date hereof.
(j) Delivery of Voting Agreement. The Voting Agreement,
in the form annexed hereto as Exhibit F, shall have been executed and delivered
to the Selling Shareholders or their designee.
(k) Delivery of Stockholders' Agreement. The
Stockholders' Agreement, in the form annexed hereto as Exhibit G, shall have
been executed and delivered to Bogen.
(l) Delivery of Registration Rights Agreement. The
Registration Rights Agreement, in the form annexed hereto as Exhibit C, shall
have been executed and delivered to the Selling Stockholders.
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(m) Delivery of Fresh Juice common Certificates. Fresh
Juice shall have delivered to the Selling Stockholders the stock certificates
evidencing the Fresh Juice Common described in Section 1.6(b)(ii).
ARTICLE 7
COVENANTS
7.1 Covenants of Fresh Juice. If permitted by applicable
federal and state law, Fresh Juice shall account for, and treat, the Merger for
tax purposes as a tax-free reorganization pursuant to Section 368(a)(2)(E) of
the Internal Revenue Code of 1986, as amended and shall not take any action
following the Effective Time which shall effect such tax-free reorganization
treatment.
7.2 Mutual Covenants. After the Effective Time, the
Surviving Corporation, the Selling Stockholders and Fresh Juice shall not
liquidate, or cause a liquidation of, the Surviving Corporation, or dispose of,
or cause the disposition of, substantially all of the assets formerly owned by
Ultimate after the Merger in any manner that would adversely affect the tax
free nature of the Merger.
ARTICLE 8
INDEMNIFICATION
8.1 Indemnification by the Selling Stockholders and
Ultimate.
(a) Each of the Selling Stockholders and Ultimate agrees
subsequent to the Closing to indemnify and hold each of Fresh Juice and Merger
Sub and their respective shareholders, subsidiaries, representatives and
affiliates and persons serving as officers, directors, partners, employees or
agents thereof harmless from and against any damages, liabilities, losses,
taxes, fines, penalties, costs, and expenses (including, without limitation,
reasonable fees of counsel) of any kind or nature whatsoever (whether or not
arising out of third-party claims and including all amounts paid in
investigation, defense or settlement of the foregoing pursuant to this Section
8.1) which may be sustained or suffered by any of them arising out of or based
upon any of the following matters:
(i) fraud, intentional misrepresentation or a
deliberate or willful breach by any of the Selling Stockholders or Ultimate of
any of their respective representations, warranties or covenants under this
Agreement; or
(ii) any other material breach of any
representation, warranty or covenant of the Selling Stockholders or Ultimate
under this Agreement or in any certificate delivered by any of the Selling
Stockholders or Ultimate hereunder, or by reason of any material
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claim, action or proceeding asserted or instituted growing out of any matter or
thing constituting a material breach of such representations, warranties or
covenants, provided, however, that any claims for indemnification pursuant to
this subsection (ii) shall be limited to the sum of the dollar value of the
Merger Consideration as of the Effective Time (with such indemnification to be
paid in shares of Fresh Juice Common with a per share credit equal to the
greater of the per share price on the date of the receipt by the indemnifying
party of a notice of the claim or the Effective Time); provided, further,
however, that there shall be no limitation in claims for indemnification
related to Section 3.4, 3.6, 3.7, 3.19 and 3.28 hereof.
(b) Other than as provided by law, this Section 8 contains
the sole remedies of the parties hereto with respect to claims arising from the
subject matter of this Section 8.
8.2 Indemnification by Fresh Juice and Merger Sub. (a)
Fresh Juice and Merger Sub agree to indemnify and hold Ultimate and each of the
Selling Stockholders and their respective shareholders, subsidiaries,
representatives and affiliates and persons serving as officers, directors,
partners, employees or agents thereof harmless from and against any damages,
liabilities, losses, taxes, fines, penalties, costs, and expenses (including,
without limitation, reasonable fees of counsel) of any kind or nature
whatsoever (whether or not arising out of third-party claims and including all
amounts paid in investigation, defense or settlement of the foregoing pursuant
to this Section 8.2) which may be sustained or suffered by any of them arising
out of or based upon any of the following matters:
(i) fraud, intentional misrepresentation or a
deliberate or willful breach by Fresh Juice or Merger Sub of any of their
representations, warranties or covenants under this Agreement; or
(ii) any other breach of any representation,
warrant or covenant of Fresh Juice or Merger Sub under this Agreement or in any
certificate delivered by Fresh Juice or Merger Sub hereunder, or by reason of
any claim, action or proceeding asserted or instituted growing out of any
matter or thing constituting a breach of such representations, warranties or
covenants; provided, however, that any claims for indemnification pursuant to
this subsection (b) shall be limited to the sum of the dollar value of the
Merger Consideration as of the Effective Time; provided, further, however, that
there shall be no limitation in claims for indemnification related to Sections
5.4, 5.6, 5.18 and 5.27 hereof.
(b) Other than as provided by law, this Section 8 contains
the sole remedies of the parties hereto with respect to claims arising from the
subject matter of this Section 8.
(c) Notwithstanding anything to the contrary contained in
this Section 8.2 neither Fresh Juice nor Merger Sub shall be required to
indemnify, or shall be held liable for any damages, liabilities, losses, taxes,
penalties, costs or expenses (including, without limitation, reasonable fees of
counsel) of any kind or nature whatsoever to any of the Selling Stockholders in
the event the Merger is not accounted for, and so treated, as a tax-free
reorganization pursuant
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to Section 368(a)(2)(E) of the Internal Revenue code of 1986, as amended, if
Fresh Juice determines in good faith that it is unable in accordance with
applicable federal or state law to so account for, and so treat, the Merger for
tax purposes as provided for in Section 7.1 hereof.
8.3 Notice; Defense of Claims. Promptly after receipt by
an indemnified party of notice of any claim, liability or expense to which the
indemnification obligations hereunder would apply, the indemnified party shall
give notice thereof in writing to the indemnifying party, but the omission to
so notify the indemnifying party promptly will not relieve the indemnifying
party from any liability except to the extent that the indemnifying party shall
have been prejudiced as a result of the failure or delay in giving such notice.
Such notice shall state the information then available regarding the amount and
nature of such claim, liability or expense and shall specify the provision or
provisions of this Agreement under which the Liability or obligation is
asserted. If within 20 days after receiving such notice the indemnifying party
gives written notice to the indemnified party stating that it disputes and
intends to defend against such claim, liability or expense at its own cost and
expense, then counsel for the defense shall be selected by the indemnifying
party (subject to the consent of the indemnified party which consent shall not
be unreasonably withheld) and the indemnified party, shall make no payment on
such claim, liability or expense as long as the indemnifying party is
conducting a good faith and diligent defense. Notwithstanding anything herein
stated, the indemnified party shall at all times have the right to fully
participate in such defense at its own expense directly or through counsel;
provided, however, if the named parties to the action or proceeding include
both the indemnifying party, and the indemnified party and representation of
both parties by the same counsel would be inappropriate under applicable
standards of professional conduct, the expense of separate counsel for the
indemnified party shall be paid by the indemnifying party. If no such notice
of intent to dispute and defend is given by the indemnifying party, or if such
diligent good faith defense is not being or ceases to be conducted, the
indemnified party, shall, at the expense of the indemnifying party, undertake
the defense of such claim, liability or expense (with counsel selected by the
indemnified party), and shall have the right to compromise or settle the same
(exercising reasonable business judgment). If such claim, liability or expense
is one that by its nature cannot be defended solely by the indemnifying party,
then the indemnified party shall make available all information and assistance
that the indemnifying party may reasonably request and shall cooperate with the
indemnifying party in such defense, provided that the indemnifying party
reimburses the indemnified party for its reasonable cost and expenses incurred
in connection therewith.
ARTICLE 9
GENERAL
9.1 Expenses. Whether or not the Closing occurs, all
costs and expenses in connection with the negotiations and preparations with
respect to this Agreement and the transactions contemplated thereby will be
borne by the party incurring such cost or expense.
28
<PAGE> 30
9.2 Publicity. So long as this Agreement is in effect,
none of the parties hereto shall, or permit any of their representatives or
affiliates to, issue or cause the publication or dissemination of any press
release with respect to this Agreement or any of the transactions contemplated
hereby, except with the agreement of the other parties hereto; provided that
any party hereto or any affiliate thereof may make such an announcement without
the agreement of the other parties if required by law or by the rules of any
exchange on which their securities are traded.
9.3 Execution in Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same document.
9.4 Notices. All notices and other communications which
are required or may be given under this Agreement shall be in writing and shall
be deemed to have been duly given when (i) delivered in person, (ii) by
facsimile transmission, upon receipt, (iii) one business day after having been
sent by overnight courier, or (iv) five (5) days after being mailed by
registered or certified first class mail, postage prepaid, return receipt
requested, to the parties hereto at the following addresses:
If to Fresh Juice or Merger Sub, addressed to such party, care
of:
The Fresh Juice Company, Inc.
350 Northern Boulevard
Great Neck, New York 11021
Attention: Steven Smith
Facsimile No.: (516-482-5453)
If to any Selling Stockholder or Ultimate, addressed to such
party, care of:
The Ultimate Juice Company, Inc.
35 Walnut Avenue
Clark, New Jersey 07066
Attention: Steven M. Bogen
Facsimile No. (908) 388-2954
with a copy to:
Bourne, Noll & Kenyon
382 Springfield Avenue
Summit, New Jersey 07901
Attention: Craig M. Lessner, Esq.
Facsimile No. (908) 277-6808
29
<PAGE> 31
9.5 Waivers. No waiver of any term, covenant or condition
of this Agreement shall be effective unless made in a written instrument duly
executed by or on behalf of the party entitled to the benefits thereof.
9.6 Amendments. The parties may agree to the amendment or
modification of this Agreement solely by an agreement in writing executed by or
on behalf of each of the parties hereto.
9.7 Successors and Assigns. This Agreement binds, inures
to the benefit of, and is enforceable by the successors and assigns of the
parties hereto, and does not confer any right on any other persons or entities.
9.8 GOVERNING LAW. THE EXECUTION, VALIDITY, CONSTRUCTION
AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY, WITHOUT REGARD TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF.
9.9 Submission to Jurisdiction.
(a) In the event Ultimate or any of the Selling
Stockholders shall commence any legal proceeding with respect to this
Agreement, each of them agrees to submit themselves to the jurisdiction of the
courts of the State of New York and the United States District Court for the
Southern District of New York for the resolution of any dispute in connection
with or arising out of this Agreement and the transactions contemplated
hereunder
(b) In the event any of Fresh Juice or Merger Sub shall
commence any legal proceeding with respect to this Agreement, each of them
agrees to submit themselves to the jurisdiction of the courts of the State of
New Jersey and the United States District Court for the jurisdiction covering
the State of New Jersey for the resolution of any dispute in connection with or
arising out of this Agreement and the transactions contemplated hereunder.
9.10 No Broker. Each of the parties hereto represents and
warrants to each of the other parties that all negotiations with respect to
this Agreement and the transactions contemplated hereby have been conducted by
the parties directly with each other without the intervention or aid of any
person in such manner as to give rise to any valid claim against any of the
parties hereto for a brokerage commission or other like payment.
9.11 No Other Inducement. No representation, promise or
inducement has been made by either party that is not embodied in this
Agreement, and neither party shall be bound by or liable for any alleged
representation, promise or inducement not so set forth.
30
<PAGE> 32
9.12 Captions. The captions of this Agreement are for
convenience of reference only and shall not affect in any manner any of the
terms, covenants or conditions hereof.
9.13 Survival of Representations, Warranties and Agreements.
The representations, warranties, agreements, covenants and obligations set
forth in this Agreement or in any schedule, exhibit or certificate delivered by
any party hereto to any other party hereto in connection with this Agreement or
the transactions contemplated hereby shall survive until June 30, 1996;
provided, however, that the representations and warranties contained in
Sections 3.4, 3.6, 3.7, 3.19, 3.28, 5.4, 5.6, 5.18 and 5.27 hereof shall
survive for a period of one (1) year from the date hereof and any party
aggrieved by such breach of any representation or warranty shall institute suit
not later than two (2) years from the Effective Time and their claim shall be
waived if suit is not instituted by such date.
9.14 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force ant effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
extent possible.
9.15 Entire Agreement. This Agreement is complete and
constitutes the entire agreement and supersedes any and all other prior
agreements and undertakings, both written and oral, among the parties, or any
of them, with respect to the subject matter hereof and, except as otherwise
expressly provided herein, is not intended to confer upon any other person any
rights or remedies hereunder.
9.16 Assignment. This Agreement and the right and obligations
hereunder shall not be assigned or otherwise transferred, except that Merger
Sub may assign all or any of its rights and obligations hereunder to any
wholly-owned subsidiary of Fresh Juice.
9.17 No Third Party Beneficiary. Nothing in this Agreement
shall confer upon any person or entity not a party hereto, or the legal
representatives of such person or entity, any rights or remedies of any nature
or kind whatsoever under or by reason of this Agreement.
31
<PAGE> 33
IN WITNESS WHEREOF, the partes hereto have caused this
Agreement to be duly executed pursuant to due authorization on the date first
above written.
THE FRESH JUICE COMPANY, INC.
By: /s/ Steven Smith
------------------------------------------
Name: Steven Smith
Title: President
THE FRESH JUICE ACQUISITION COMPANY, INC.
By: /s/ Steven Smith
------------------------------------------
Name: Steven Smith
Title: President
THE ULTIMATE JUICE COMPANY, INC.
By: /s Steven M. Bogen
------------------------------------------
Name: Steven M. Bogen
Title: President
/s/ Steven M. Bogen
---------------------------------------------
STEVEN M. BOGEN
/s/ Albert L. Rountree, IV
---------------------------------------------
ALBERT L. ROUNTREE, IV
/s/ Daniel Petry
---------------------------------------------
DANIEL PETRY
/s/ Mark Feldman
---------------------------------------------
MARK FELDMAN
/s/ James Coyle
---------------------------------------------
JAMES COYLE
32
<PAGE> 34
EXHIBITS TO MERGER AGREEMENT
The following Exhibits to the Merger Agreement are material and have
been filed as separate Exhibits to this Report as follows and are not also
reproduced here:
EXHIBIT C Registration Rights Agreement
EXHIBIT D Employment Agreement between Registrant and Daniel Petry
EXHIBIT E Supply Agreement between Registrant and Natural Juice Company
EXHIBIT F Voting Agreement
EXHIBIT G Stockholders' Agreement
The following Exhibits are immaterial and have not been filed with
this Report.
EXHIBIT 6.1(f) Closing opinion of counsel to The Ultimate Juice Company,
Inc.; and
EXHIBIT 6.2(e) Closing opinion of counsel to The Fresh Juice Company, Inc.
and The Fresh Juice Acquisition Company, Inc.
SCHEDULE 3.12 Attachment - Judgment search for The Ultimate Juice Company,
Inc. disclosing immaterial judgments.
The Registrant undertakes to furnish supplementary a copy of any
omitted Schedule to the Commission upon request.
<PAGE> 35
SCHEDULE 1.5(c)
LIST OF OFFICERS OF THE SURVIVING CORPORATION
Steve Smith President and Assistant Secretary
Steven M. Bogen Chief Executive Officer and Secretary
Mark Feldman Treasurer
<PAGE> 36
SCHEDULE 2.1(b)
ALL ITEMS DISCLOSED ON ANY SCHEDULE SHALL BE DEEMED DISCLOSED ON ALL SCHEDULES
TO THIS AGREEMENT.
THE FRESH JUICE COMPANY, INC. AND THE FRESH JUICE ACQUISITION COMPANY, INC. ARE
BOTH CHARGED WITH KNOWLEDGE OF ALL AGREEMENTS THAT EITHER OF THEM ARE A PARTY
TO.
- --------------------------------------------------
This Schedule intentionally left blank.
<PAGE> 37
SCHEDULE 2.4
1.Employment Agreement between Ultimate and James Coyle
2.Employment Agreement between Ultimate and Albert L. Rountree, IV
<PAGE> 38
SCHEDULE 2.5
Agreement between Shareholders dated November 17, 1994 by and among Bogen,
Rountree, Petry, Feldman and The Ultimate Juice Company, Inc. providing rights
of first refusal to Ultimate and then the non-selling Shareholders.
<PAGE> 39
SCHEDULE 3.1
Big Orange Concepts, Inc., a New Jersey corporation incorporated May 26, 1993,
no shares issued, no assets, no liabilities.
<PAGE> 40
SCHEDULE 3.6
Agreement between Shareholders dated November 17, 1994 by and among Bogen,
Rountree, Petry, Feldman and The Ultimate Juice Company, Inc. providing rights
of first refusal to Ultimate and then the non-selling Shareholders.
<PAGE> 41
SCHEDULE 3.7
<TABLE>
<CAPTION>
Stockholder Shares Owned
----------- ------------
<S> <C>
Steven M. Bogen 614.0464
Daniel Petry 281.5584
Albert L. Rountree, IV 158.0152
Mark Feldman 36.14
James Coyle 22.24
</TABLE>
<PAGE> 42
SCHEDULE 3.8
Liabilities not reflected on the financial statements:
(a)Contingent liability for all litigation listed on Schedule 3.12.
(b)Disputed invoice from Cargill for approximately $6,000 in cartons (Cargill
formerly packed pasteurized juice for Ultimate).
(c) Various disputed invoices for amounts of less than $1,000 each
and less than $5,000 in the aggregate.
(d) Current Silver Springs invoices on which credits are due
resulting from pasteurized juice subject recall or destroyed
due to non-merchantability. Silver Springs acknowledges the
problem and the credits will be worked out in the ordinary
course.
(e) Claim of Provisions, Inc. pursuant to arrangement memorialized
in letter dated November 21, 1995 pursuant to which
Provisions, Inc. was to be paid $.25 per gallon through June
1, 1996 for all customers handled by Provisions, Inc. and
billed directly by Clear Springs Citrus, Inc., The Ultimate
Juice Company, Inc. or Natural Juice Company, Inc.
Provisions, Inc. subsequently failed to cooperate and assist
in an orderly turnover and transition of business and Clear
Springs Citrus, Inc. took over the business without
Provisions, Inc.'s bargained for assistance; and therefore, no
payments have been made. To the best of Ultimate's knowledge,
no claim has been asserted as of the date hereof. If a claim
is made, the referenced companies can set off Provision,
Inc.'s claim, if any, against Provision, Inc.'s outstanding
obligations to them which aggregate approximately $80,000.
(Clear Springs Citrus, Inc. $75,000, Ultimate $4,000).
(f) No provision has been made for income taxes due for the period
of July 1, 1995 through the date hereof. During the
referenced period, Ultimate has been paying the minimum amount
required to avoid penalties.
(g) $1,031 liability to ITT Hartford in connection with a
settlement reached relating to Connecticut Juice Company,
Inc.'s (dissolved affiliate) failure to pay premiums. A
settlement was reached, with Ultimate agreeing to make the
payment and the check was cut, however, ITT Hartford failed to
make the changes, requested by Ultimate's counsel, to the form
of Release, so payment has never been delivered. Ultimate has
had no contact from ITT Hartford for approximately one year.
<PAGE> 43
(h) Judgments on the judgment search previously provided to Fresh
Juice.
<PAGE> 44
SCHEDULE 3.9
(i) Reduction of prices to all distributors and customers
due to increased competition.
(ii) (a) Issued 112 shares of common stock of Ultimate to
Steven M. Bogen.
(iii) See (ii) above.
(iv) N/A
(v) N/A
(vi) N/A
(vii) Provisions, Inc. See Schedule 3.8
(viii) Material transactions.
Employment Agreement with Albert L. Rountree, IV
(previously provided to Fresh Juice).
Employment Agreement with James Coyle
(previously provided to Fresh Juice).
$10,000 Loan to Daniel Petry - See Schedule 3.26
(ix) Steven Bogen has received significant lump sum
payroll payments since January 1, 1996, however, his
total compensation for the nine month period
beginning July 1, 1995 and ending March 31, 1996 is
less than the compensation paid to Steven Bogen for
nine months, on a pro rata basis, in the prior fiscal
year.
Daniel Petry increase in salary as of 1/1/96.
Employment Agreements with:
(a) Albert L. Rountree, IV
(b) James Coyle
(x) As of April 1, 1996 Ultimate's 401(k) plan will be
changed to eliminate matching and to put a fail safe
bonus into effect. On or about March 19, 1996
Ultimate required Bogen, Petry, Rountree and Feldman
to each transfer the life insurance policies
previously owned and paid for by Ultimate to
themselves or they would be cancelled.
(xi) See Schedule 3.12.
(xii) None
(xiii) None
(xiv) None
<PAGE> 45
SCHEDULE 3.10
ULTIMATE
ULTIMATE LEASES
AUTOMOBILES(1)
3. Steve Bogen's car - Leased to Ultimate - Mercedes Benz 300 SE. Lease
annexed hereto.
4. Albert Rountree's car - 1993 Lincoln Town Car - Leased to Ultimate.
Lease annexed hereto.
5. Salesman's car (John Kline) - 1993 Chevy Lumina Leased to Connecticut
Juice Company, Inc. and Steven Bogen. Lease annexed hereto.
6. Daniel Petry's car - 1996 Saab Convertible leased to Daniel Petry,
payments of $482.88/month made by Ultimate.
7. Mark Feldman's car - 1994 BMW 530, leased to Mark Feldman, payments of
$639.03/month made by Ultimate.
TRUCKS
1. 1992 Isuzu FTR 16' Reefer, Rollins Leasing Corp. to Ultimate.
2. 1992 Isuzu FTR 16' Reefer, Rollins Leasing Corp. to Ultimate.
3. 1995 Ford CF8000 18' ST Reefer, Rollins Leasing Corp. to Ultimate.
4. 1990 International 4900 22' Refrig. Box, Rollins Leasing Corp. to
Ultimate.
5. 1993 Navistar 4900 18' Reefer, Rollins Leasing Corp. to Ultimate.
6. 1993 Navistar 4900 18' Reefer, Rollins Leasing Corp. to Ultimate.
7. 1993 Mitsubishi Fuso FH100 with reconditioned 16' Insulated Van Body
and New Thermo King MDII-50, Salem Truck Leasing, Inc. to Ultimate Too
- Guaranteed by Ultimate. Lease annexed hereto.
8. 1995 Freight FL70, Rollins Leasing Corp. to Ultimate.
- --------------------
(1) In addition, two salesman James Coyle and Steve Herschman each
get monthly car allowance of $500.00 and $400.00, respectively, through their
payroll check.
<PAGE> 46
REAL PROPERTY
1. Lease of Warehouse in Linden - presently on a month-to-month basis -
(previously provided to Fresh Juice).
2. Lease of Corporate Offices - (previously provided to Fresh Juice).
Fresh Juice acknowledges that Ultimate's warehouse lease is presently
on a month to month basis.
OFFICE EQUIPMENT
Copy Machine - Canon MP 3050.
SECURITY INTERESTS
The $300,000 loan made by The Fresh Juice Company, Inc. to Ultimate on
January 27, 1994, is secured by a security interest, in favor of The
Fresh Juice Company, Inc. on Ultimate's accounts receivable and
inventory.
PROPERTY IN ULTIMATE'S POSSESSION WHICH IS NOT OWNED BY ULTIMATE
Orange Kiosk stored near warehouse ($100/month for storage)
<PAGE> 47
SCHEDULE 3.11
This Schedule intentionally left blank.
<PAGE> 48
SCHEDULE 3.12
Ultimate
See Schedule 3.20
1. In addition on May 17, 1994, Gaetan Joseph, through his counsel Kafko,
Schnitzer & Sheeger filed a personal injury complaint entitled (Gaetan Joseph
v. Inlet Leasing, Inc. and Michael Pena, venued in Supreme Court of New York,
County of Kings bearing index no. 15955-94. The suit does not name Ultimate
but names Ultimate Too (a since dissolved affiliate of Ultimate) and one of
Ultimate's drivers and Iulet Leasing, Inc. (Inlet Leasing) the Lessor of the
truck. The incident described in the Complaint allegedly occurred on August
23, 1993 and allegedly involved an auto accident in which the truck hit the
plaintiff's car in the rear. On or about June 15, 1994, Ultimate advised All
State Insurance company, the insurance carrier of Ultimate Too Distributors,
Inc. on the date of the accident, of the existence of the claim. All State has
placed the matter with counsel of its choice and is now defending the action
which is still in the discovery stage.
2. Richard Kessler buyout: When Ultimate was first formed, the
principals were Bogen, Rountree, Petry and Richard Kessler. Kessler was
responsible for finances, and it was later believed that he had engaged in
irregular financing practices. As a result, Kessler was terminated and his
stock repurchased. Kessler has waived and released all rights to Ultimate's
stock.
3. By Citation Notice dated June 24, 1991, Ultimate Juice Co. of Conn.,
Inc. was cited for failure to pay Corporation taxes in the amount of $1,149.99.
Ultimate is not aware of any entry named Ultimate Juice Co. of Conn., Inc. and
as such no further action has been taken by Ultimate in connection therewith.
4. Natural Beverage Co. Inc. (Connecticut Juice Company's ("CJC"),
predecessor) was served with a Tax Warrant dated November 28, 1993 arising from
Town of Greenwich, Connecticut Personal Property Taxes from 1991 and 1992
relating to various vehicles. The Tax Warrant is in the amount of $821.39 as
of November 28, 1993. Upon investigation, Ultimate and CJC determined that CJC
did not own any of the described vehicles and no further action has been taken
on the Tax Warrant and CJC has since been dissolved.
5. The following affirmative collection suits are also pending:
(a) Ultimate vs. D. Loi & Son (approx. outstanding balance $13,000)
(b) Ultimate vs. Fred Gerhardt and Freddy Gerhardt Dairies
(approx. outstanding balance - $3,000)
6. The following liability claims are also pending:
<PAGE> 49
(a) Claimant: Mary Silvey - Auto accident in Bourne Mass. Car was
struck by truck driver Peter Moore on November 3, 1995.
Claimant was outside vehicle putting in groceries when insured
hit her vehicle causing the trunk to hit her on the head. The
claim is being handled by Felson Insurance, agent for
Allstate, which advises that it has established a reserve in
the amount of $1,000 for claimant's medical bills and no
bodily injury reserve.
(b) Claimant: Idania Marcellus Auto Accident.
Claimant's taxi cab struck by driver Thomas Perry on December
2, 1994. Claim being handled by Felson Insurance, agent for
Allstate, which advised that it has established a reserve in
the amount of $900 for physical damage portion of the claim
and no bodily injury reserve.
7. In addition, the following collection actions listed on the attached
schedule have been sent to Kulak & Zaslowsky:
(a) L.M.R. Hospitality Group, Inc. $2,154.00
(b) M.O.C. Beverage & Amy Cross $4,454.37
8. Workers Compensation Claim of Terrence McGill. Mr. McGill has
returned to work, but will be out again in the future for an operation.
9. Country Kitchen - Ultimate maintains official Certificate of
Registration Number 1,820,078 of the United States Patent and Trademark Office
for the trademark "The Ultimate Country Kitchen." A breakfast restauranteur
trading under the name of Country Kitchen also has a similar registration.
This entity logged a cancellation proceeding in the Patent and Trademark
Office. Ultimate, through its counsel, answered the complaint and sent out
discovery. Country Kitchens backed off and dismissed its cancellation
proceeding without prejudice.
10. Kerry Harr - Ultimate has been served with a Deposition Subpoena For
Production of Business Records in connection with an action entitled Kerry Harr
v. Frosty Fruits, Inc., a California corporation, and Glen F. Richey, an
individual, Gelson's Market, Costco, a California corporation, et al., in case
no. 250429, venued In and For the Superior Court of California, County of
Riverside. The documents were originally scheduled to be produced in August,
1994. Ultimate did not produce the documents and has not been contacted again
regarding this matter. Ultimate has not, to its knowledge, been named as a
defendant in this action.
11. Judgments on judgment search attached hereto.
<PAGE> 50
SCHEDULE 3.13
This Schedule intentionally left blank.
<PAGE> 51
SCHEDULE 3.14
This Schedule intentionally left blank.
<PAGE> 52
SCHEDULE 3.15
This Schedule intentionally left blank.
<PAGE> 53
SCHEDULE 3.16
Upon consummation of this transaction, Ultimate may be required to provide
medical benefits to employees of all affiliated companies and may also be
required to offer participation in its 401(k) plan to all employees of the
affiliated companies.
In addition, Ultimate may be in violation of New York State unemployment
requirements.
<PAGE> 54
SCHEDULE 3.17
See Schedules 3.12 and 3.10
In addition:
(i) $150,000 loan by Ultimate to Clear Springs Citrus, Inc.
(ii) None.
(iii) None.
(iv) - 401(k) plan (attached hereto).
- Blue Cross/Blue Shield Health and Hospitalization
Plan (as described in benefits book attached hereto).
(v) Leases of real and personal property described on or annexed
to Schedule 6.10. In addition, Ultimate leases one insured
truck to Michael DeFrancesco and Michael Buzin for
approximately $1,600 per month in connection with the customer
list licensed to them as more particularly described in
subsection (xii) below. The truck they use is leased from
Salem Truck Leasing, Inc.
(vi) Ultimate may be obligated to purchase from Au Bon Pain all of
their squeezing machines in connection with the new program
for supplying fresh juice squeezed daily.
(vii) None.
(viii) Supply contract with Clear Springs, as amended by August 15,
1993 Addendum to Supply Contracts (previously provided to
Fresh Juice).
(ix) $300,000 Loan from Fresh Juice, secured by inventory and
accounts receivable.
(x) None.
(xi) Ultimate has guaranteed the obligations of Ultimate Too
Distributors, Inc. on its lease and maintenance agreement
dated July 21, 1993 with Salem Truck Leasing, Inc. relating to
a 1993, Mitsubishi Fuso truck, FH100 with reconditioned 16'
insulated van body and new Thermo King MD II - 50.
(xii) Copy of Ultimate's employee manual (attached hereto).
Ultimate has also entered into a Customer List Licensing
Agreement with Michael DeFrancesco
<PAGE> 55
and Michael Buzin (together, "M&M"). Pursuant to the Customer
List Licensing Agreement, Ultimate has allowed M&M the use of
certain customer lists on a short term basis while preserving
and protecting its proprietary interests in the customer
lists. The Customer List Licensing Agreement is presently on
a month-to-month basis.
In addition, Fresh Juice acknowledges that Ultimate's warehouse lease
is presently on a month-to-month basis.
<PAGE> 56
SCHEDULE 3.18
See Schedule 3.8
<PAGE> 57
SCHEDULE 3.19
Ultimate has not made provision for all taxes due with respect to the
period between July 1, 1995 and the date hereof, but has instead paid the
minimum amount required to avoid penalties.
<PAGE> 58
SCHEDULE 3.20
Employee Matters/Pending or Threatened Litigation
On December 9, 1993, Ultimate received a letter from Kenneth S.
Oleckna, counsel to John Draper, an ex-employee of Borrower. Mr. Draper
claims that his employment with Ultimate was terminated because he injured
himself on the job and wanted to make a claim. Ultimate's counsel has
responded to the letter encouraging Mr. Draper to file a workers compensation
claim (as Ultimate encouraged him to do when he first advised Ultimate of the
injury). Ultimate and its counsel have not received an response to the letter
and no suit has been filed to Ultimate's knowledge.
Also Ultimate has failed to make proper payroll withholdings in
connection with the premiums paid on the life insurance policy on Steven M.
Bogen which policy is owned by Steven M. Bogen. (Annual premium approximately
$3,300).
<PAGE> 59
SCHEDULE 3.23(v)
Indemnification Agreements provided to
1. Foxwoods (presently not doing business with Ultimate)
2. PYA Monarch
3. From time to time, Ultimate has, in the ordinary course of
business, listed customers and/or distributors as additional
insureds on its insurance policies.
<PAGE> 60
SCHEDULE 3.26
Daniel Petry is indebted to Ultimate in the amount of $10,000.00.
<PAGE> 61
SCHEDULE 5.1
SUBSIDIARIES AND AFFILIATES
The Fresh Juice Company of Florida, Inc., a Florida corporation
Fresh Pik't Natural Foods, Inc., a Delaware corporation
Minalba Foods of North America, Inc., a Delaware corporation (existence voided
in 1992 by the Delaware Secretary of State for non-payment of franchise taxes)
The Fresh Juice Acquisition Company, Inc., a Delaware corporation
TFJC Acquisition Corp., a Delaware corporation
<PAGE> 62
SCHEDULE 5.6
OUTSTANDING OPTIONS, WARRANTS OR OTHER RIGHTS
The following options are outstanding with respect to Fresh Juice
common stock:
Steve Smith: Options to purchase 100,00 and 60,000 shares of Fresh
Juice common stock at $1.375 and $3.50, respectively, per share.
Kathy Siegel: Options to purchase 15,000 shares of Fresh Juice
common stock at $1.25 per share.
Jeffrey Smith: Option to purchase 50,000 shares of Fresh Juice
common stock at $3.125 per share.
Paul Ballantine: Option to purchase 60,000 shares of Fresh Juice
common stock at $3.125 per share.
Reference is made to Fresh Juice's Annual Report on Form 10-KSB for
the fiscal year ended November 30, 1995 (the "1995 Form 10-KSB", a copy of
which has been delivered to Clear Springs and the Selling Stockholders) for a
more detailed description of the options granted to Steve Smith and Kathy
Siegel, which document is incorporated herein by reference.
Reference is made to the Stock Option Agreements, as of dated February
12, 1996, between Fresh Juice and each of Jeffrey Smith and Paul Ballantine
(copies of which have been provided to Clear Springs and the Selling
Stockholders) for a more detailed description of the options granted to Jeffrey
Smith and Paul Ballentine, which documents are incorporated herein by
reference.
<PAGE> 63
SCHEDULE 5.7
FRESH JUICE FINANCIAL STATEMENTS
None
<PAGE> 64
SCHEDULE 5.8
CERTAIN CHANGES OR EVENTS
1. In addition to the acquisition, financing and equipping of
Fresh Juice's Florida facility (referred to as the Florida Plant in Fresh
Juice's 1995 Form 10-KSB), Fresh Juice has continued to expend funds in
equipping, maintaining and operating the Florida Plant. As of the date hereof,
Fresh Juice has expended approximately $600,000 since November 30, 1995 in
connection with capital expenditures relating to the Florida Plant. Such
expenditures have adversely altered, among other things, the financial
condition of Fresh Juice since November 30, 1995.
2. The financial condition, business, operations and prospects of
Fresh Juice has also been adversely effected by the increase in fruit prices
and operating costs and increased competition, all of which have combined to
reduce Fresh Juice's gross margins.
3. On March 28, 1996, Chemical Bank canceled Fresh Juice's
$1,500,000 line of credit. No amounts had been drawn down by Fresh Juice on
such line of credit.
4. Consummation of the transactions contemplated by the Agreement
will result in an event of default under that certain $1,100,000 secured Short
Form Term Loan Agreement, dated October 3, 1995, and related loan documents
among Fresh Juice, as guarantor, The Fresh Juice Company of Florida, Inc., as
borrower, and Chemical Bank. A copy of such Short Form Term Loan is attached as
an exhibit to Fresh Juice's 1995 Form 10-KSB previously delivered to Clear
Springs and the Selling Stockholders and is incorporated herein by reference.
5. The Manufacturing and Distribution Agreement among Fresh
Juice, Sun Orchard of Florida and Sun Orchard, Inc. (previously delivered to
Clear Springs and the Selling Stockholders) described in Fresh Juice's 1995
Form 10-KSB has been declared null and void by each of the parties thereto.
6. See also Schedules 5.6 (Outstanding Options, Warrants and
Other Rights), 5.11 (Accounts Receivables) and 5.13 (Litigation) each of which
is incorporated herein by reference.
<PAGE> 65
SCHEDULE 5.9
TITLE TO PROPERTIES; LIENS
1. Purchase Money Mortgage between Fresh Juice and Fantasy-BlankeBaer
Corporation on the Florida Plant securing payment under that certain Promissory
Note in the aggregate principal amount of $475,000 made by Fresh Juice in favor
of Fantasy-BlankeBaer Corporation. (Exhibits 10.6 and 10.7 to the Fresh Juice
1995 Form 10-KSB and incorporated herein by reference).
2. Loan Agreement between Fresh Juice and Chemical Bank in the aggregate
amount of $1,100,00 which loan is secured by a first priority lien on all of
the equipment, including, but not limited to, machinery and furniture and
fixture of Fresh Juice and The Fresh Juice Company of Florida, Inc. (Exhibit
10.4 to the Fresh Juice 1995 Form 10-KSB and incorporated herein by reference).
3. Citrus Juice Extractor Lease between Fresh Juice and FMC Corporation
pursuant to which FMC Corporation has a lien on four 391B-100 RPM citrus juice
extractors and one 49B-75 RPM citrus juice extractor (a copy of which has been
provide to Clear Springs and the Selling Stockholders and is incorporated
herein by reference).
<PAGE> 66
SCHEDULE 5.11 & 5.22
ACCOUNTS RECEIVABLE
As of the date hereof, Urban Juice and Soda, based in Vancouver,
Canada, has an outstanding account owed to Fresh Juice in the amount of
$26,000. It is uncertain whether when, if ever, this amount will be
collectible, in whole or in part.
<PAGE> 67
SCHEDULE 5.12
INVENTORIES
None
<PAGE> 68
SCHEDULE 5.13
LITIGATION
1. Collection action has been instituted in California Day-Fresh Foods,
Inc. vs. Fresh Pik't Natural Foods, Inc., relating to a claim for $5,793.06 in
respect of fruit purchased by Fresh Pik't Natural Foods, Inc. which was unpaid.
2. Suit was filed in the U.S. Bankruptcy Court for the District of
Maryland against Fresh Pik't Natural Foods, Inc. Pursuant to such action, In
Re: Washington Natural Foods & Co. vs. Fresh Pik't Natural Foods, Inc. and
Coreganics, Inc., the plaintiff has instituted an action against Fresh Pik't
Natural Foods, Inc. alleging fraudulent conveyance and non-compliance with the
Maryland Bulk Transfers statute. Plaintiff are seeking monetary damages in the
amount of $254,000. Fresh Pik't Natural Foods, Inc. has filed an answer
denying such allegations and intends to defend such law suit. A copy of the
compliant relating thereto has been provided to Clear Springs and the Selling
Stockholders and is incorporated herein by reference.
<PAGE> 69
SCHEDULE 5.14
CONSENTS, ETC.
1. The execution and delivery of, and performance of the
transactions contemplated by, this Agreement required the prior approval of
Chemical Bank in accordance with the terms of that certain $1,100,000 secured
Short Form Term Loan Agreement, dated October 3, 1995, and related loan
documents among Fresh Juice, as guarantor, The Fresh Juice Company of Florida,
Inc., as borrower, and Chemical Bank. A copy of such Short Form Term Loan is
attached as an exhibit to Fresh Juice's 1995 Form 10-KSB previously delivered
to Ultimate and the Selling Stockholders and is incorporated herein by
reference.
Such consent has been sought, and as of the date hereof, has
not been obtained. As a result, upon execution and delivery of, and
consummation of the transactions contemplated by, this Agreement, an event of
default will have occurred under such Short Form Term Loan Agreement, and Fresh
Juice and The Fresh Juice Company of Florida, Inc. will each be in violation of
the terms and conditions thereof.
<PAGE> 70
SCHEDULE 5.16(a)
EXISTING CONTRACTS
See the information set forth in Schedule 5.14 (Consents, etc.), which
information is incorporated herein by reference.
<PAGE> 71
SCHEDULE 5.16(b)
EXISTING CONTRACTS
1. See Fresh Juice 1995 Form 10-KSB for items relating to this
Schedule, which document is incorporated herein by reference.
2. Contract with Imperial Engineering & Fabrication, Inc., dated
July 19, 1995 (a copy of which has been delivered to Clear Springs and the
Selling Stockholders and is incorporated herein by reference).
3. Employment Agreement, dated August 17, 1994, between Steve
Smith and Fresh Juice (as described in Fresh Juice's 1995 Form 10-KSB and a
copy of which has been delivered to Clear Springs and the Selling Stockholders
and is incorporated herein by reference).
4. See also Schedule 5.9 (Title to Properties; Liens) which is
incorporated herein by reference.
<PAGE> 72
SCHEDULE 5.27
ENVIRONMENTAL MATTERS
See Site Audit and Environmental Assessment of the Universal Flavors Site in
Winter Haven, Florida (a copy of which has been provided to Clear Springs and
the Selling Stockholders and is incorporated herein by reference).
<PAGE> 73
EXHIBIT A
CERTIFICATE OF MERGER
OF
THE FRESH JUICE ACQUISITION COMPANY, INC.
INTO
THE ULTIMATE JUICE COMPANY, INC.
The undersigned corporation
DOES HEREBY CERTIFY:
FIRST: That the names and states of incorporation of
each of the constituent corporations of the merger are as
follows:
STATE OF
NAME INCORPORATION
---- -------------
The Fresh Juice Acquisition
Company, Inc. Delaware
The Ultimate Juice Company, Inc. New Jersey
SECOND: That an Agreement of Merger between the
parties to the merger has been approved, adopted, certified,
executed and acknowledged by each of the constituent
corporations in accordance with the requirements of Section
252 of the General Corporation Law of Delaware.
THIRD; That the name of the surviving corporation of
the merger is The Ultimate Juice Company, Inc., a New Jersey
corporation.
FOURTH: That the Certificate of Incorporation of The
Ultimate Juice Company, Inc., a New Jersey corporation, which
is the surviving corporation, shall continue in full force and
<PAGE> 74
effect as the Certificate of Incorporation of the surviving
corporation.
FIFTH: That the executed Agreement of Merger is on
file at the principal place of business of the surviving
corporation, the address of which is 35 Walnut Avenue, Clark,
New Jersey 07066.
SIXTH: That a copy of the Agreement of Merger will
be furnished, on request and without cost, to any stockholder
of any constituent corporation.
SEVENTH: That The Ultimate Juice Company, Inc.
survives the merger and may be served with process in the
State of Delaware in any proceeding for enforcement of any
obligation of any constituent Delaware corporation as well as
for enforcement of any obligation of the surviving corporation
arising from the merger, including any suit or other
proceeding to enforce the right of any stockholder as
determined in appraisal proceedings pursuant to the provisions
of Section 262 of the General Corporation Law of Delaware, and
it does hereby irrevocably appoint the Secretary of State of
Delaware as its agent to accept service of process in any such
suit or other proceeding. The address to which a copy of such
process shall be mailed by the Secretary of State of Delaware
is:
c/o The Fresh Juice Company, Inc.
350 Northern Boulevard
Great Neck, New York 11021
2
<PAGE> 75
Dated: March 31, 1996
THE FRESH JUICE ACQUISITION
COMPANY, INC.
By:
----------------------------
Steven Smith
Chairman of the Board of
Directors
THE ULTIMATE JUICE COMPANY, INC.
By:
----------------------------
Steven M. Bogen
Chairman of the Board of
Directors
3
<PAGE> 76
EXHIBIT B
CERTIFICATE OF MERGER
THE FRESH JUICE ACQUISITION COMPANY, INC.
AND
THE ULTIMATE JUICE COMPANY, INC.
TO: The Secretary of State
State of New Jersey
Pursuant to the provisions of Section 14A:10-7 Corporations,
General, of the New Jersey Statutes, the undersigned corporations hereby
execute the following Certificate of Merger.
ARTICLE I
The names of the corporations proposing to merge and the names
of the states under the laws which such corporations are organized are as
follows:
<TABLE>
<S> <C>
NAME OF CORPORATION STATE OF INCORPORATION
------------------- ----------------------
The Fresh Juice Acquisition Company, Inc. Delaware
The Ultimate Juice Company, Inc. New Jersey
</TABLE>
ARTICLE II
The laws of the State of Delaware, the state under which such
foreign corporation is organized, permit such merger and the applicable
provisions of the laws of said jurisdiction under which such foreign
corporation was organized have been, or upon compliance with the filing and
recording requirements will have been, complied with.
ARTICLE III
The name of the surviving corporation shall be "The Ultimate
Juice Company, Inc." and it shall be governed by the laws of the State of New
Jersey.
<PAGE> 77
The total authorized capital stock of the surviving
corporation shall be 100 shares, itemized by classes, par value of shares,
shares without par value, and series, if any, within a class as follows:
<TABLE>
<CAPTION>
Series Number of Par Value
Class (if any) Shares Per Share
----- -------- --------- ---------
<S> <C> <C> <C>
Common Stock None 100 Without Par Value
</TABLE>
The address of the surviving corporation's registered office
is 35 Walnut Avenue, Clark, New Jersey 07066, and the name of the registered
agent at such address is Steven M. Bogen.
ARTICLE IV
The following plan of merger was approved by the shareholders
of the undersigned domestic corporation on March 31, 1996 in the manner
prescribed by the New Jersey Business Corporation Act, and was approved by the
undersigned foreign corporation on March 31, 1996 in the manner prescribed by
the laws of the State under which it is organized:
1. The Fresh Juice Acquisition Company, Inc.
shall be merged with and into The Ultimate Juice Company, Inc. (the "Merger").
Following the Merger, The Ultimate Juice Company, Inc. shall continue as the
surviving corporation under the name "The Ultimate Juice Company, Inc." and
shall continue its existence under the laws of the State of New Jersey, and the
separate corporate existence of The Fresh Juice Acquisition Company, Inc. shall
cease.
2. Upon the filing of this certificate, all the
property, rights, privileges, powers and franchises of The Ultimate Juice
Company, Inc. and The Fresh Juice Acquisition Company, Inc. shall vest in the
surviving corporation, and all debts, liabilities and duties of The Ultimate
Juice Company, Inc. and The Fresh Juice Acquisition Company, Inc. shall become
the debts, liabilities and duties of the surviving corporation.
2
<PAGE> 78
3. Upon the filing of this certificate, the
Certificate of Incorporation of The Ultimate Juice Company, Inc., as in effect
immediately prior to the date hereof, shall be the Certificate of Incorporation
of the surviving corporation, without amendment, until thereafter amended as
provided by law and such certificate of incorporation.
4. Upon the filing of this certificate, the
By-laws of The Ultimate Juice Company, Inc., as in effect immediately prior to
the date hereof, shall be the By-laws of the surviving corporation, without
amendment, until thereafter amended as provided by law, the Certificate of
Incorporation of the surviving corporation and such By-laws.
5. Upon the filing of this certificate, by
virtue of the Merger and without any action on the part of The Fresh Juice
Acquisition Company, Inc., The Ultimate Juice Company, Inc. or the holder of
any of the securities of The Ultimate Juice Company, Inc. or The Fresh Juice
Acquisition Company, Inc.:
(a) each share of common stock of The
Ultimate Juice Company, Inc. issued and outstanding immediately prior to the
filing of this certificate shall be canceled and extinguished and be converted
into the right to receive the Merger Consideration (as defined in the Merger
Agreement, dated as of March 31, 1996, among The Fresh Juice Company, Inc., The
Fresh Juice Acquisition Company, Inc., The Ultimate Juice Company, Inc., Steven
M. Bogen, Albert L. Rountree, IV, Daniel Petry, Mark Feldman and James Coyle)
upon surrender of the certificate representing such share of common stock of
The Ultimate Juice Company, Inc.; and
(b) each share of common stock of The
Fresh Juice Acquisition Company, Inc., issued and outstanding immediately prior
to the filing of this certificate shall
3
<PAGE> 79
thereafter represent one validly issued, fully paid and nonassessable share of
common stock, par value $.01 per share, of the surviving corporation.
ARTICLE IV
As to each corporation whose shareholders are entitled to
vote, the number of shares entitled to vote thereon, and if the shares of any
class or series are entitled to vote thereon as a class, the designation and
number of shares of each class or series, is a follows:
<TABLE>
<CAPTION>
Designation of
Total Number Class or Series Number of Shares
Name of of Shares Entitled to Vote of Such Class or
Corporation Entitled To Vote as a Class (if any) Series (if any)
- ----------- ---------------- ------------------- ----------------
<S> <C> <C> <C>
The Ultimate Juice
Company, Inc. 1,112 Common Stock 1,112
The Fresh Juice
Acquisition Company, Inc. 10 Common Stock 10
</TABLE>
ARTICLE V
As to each corporation whose shareholders are entitled to vote, the
number of shares that voted for and against merger, respectively, and the
number of shares of any class or series entitled to vote as a class that voted
for and against the merger are:
<TABLE>
<CAPTION>
Total Total Shares
Name of Shares Shares Voted Shares Voted
Corporation Voted For Against Class Voted For Against
----------- --------- ------------ ----- --------- -------
<S> <C> <C> <C> <C> <C>
The Ultimate Juice Company, Inc. 1,112 0 Common 1,112 0
Stock
The Fresh Juice 10 0 Common 10 0
Acquisition Company, Inc. Stock
</TABLE>
4
<PAGE> 80
IN WITNESS WHEREOF each of the undersigned corporations has caused
this Certificate of Merger to be executed in its name by its Chairman of the
Board of Directors as of the 31st day of March, 1996.
THE ULTIMATE JUICE COMPANY, INC.
By:
----------------------------------------
Steven M. Bogen
Chairman of the Board of Directors
THE FRESH JUICE ACQUISITION COMPANY, INC.
By:
----------------------------------------
Steven Smith
Chairman of the Board of Directors
5
<PAGE> 1
EXHIBIT 2b
MERGER AGREEMENT,
dated as of March 31, 1996,
among
THE FRESH JUICE COMPANY, INC.,
THE FRESH JUICE COMPANY OF FLORIDA, INC.
CLEAR SPRINGS CITRUS, INC.,
BRIAN DUFFY,
and
THE BOGEN GROUP, L.L.C.
<PAGE> 2
MERGER AGREEMENT
AGREEMENT, dated as of March 31, 1996, among The Fresh Juice
Company, Inc., a Delaware corporation ("Fresh Juice"), The Fresh Juice Company
of Florida, Inc., a Florida corporation and wholly-owned subsidiary of Fresh
Juice ("Merger Sub"), Brian Duffy ("Duffy") and The Bogen Group, L.L.C. ("Bogen
Group" and together with Duffy each a "Selling Stockholder", and collectively,
the Selling Stockholders"), and Clear Springs Citrus, Inc. a Florida
corporation ("Clear Springs").
The Boards of Directors of Fresh Juice, Merger Sub and Clear
Springs have each determined that it is in the best interest of their
respective stockholders to effect a merger of Merger Sub with Clear Springs
(the "Merger") whereby all of the issued and outstanding shares of common
stock, .01 par value, of Clear Springs (the "Clear Springs Stock") will be
exchanged for 1,160,000 shares of common stock, $.01 par value, of Fresh Juice
("Fresh Juice Common"); and
Each of the Board of Directors of Fresh Juice, Merger Sub and
Clear Springs have approved the Merger in accordance with the Florida Business
Corporation Act (the "BCA") and upon the terms and subject to the conditions
set forth herein; and
The parties hereto desire to enter into the Merger in
accordance with the terms hereof.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
THE MERGER
1.1 The Merger. The Merger will occur upon the terms and
subject to the conditions hereof, and in accordance with the relevant
provisions of the BCA, on the Closing Date. Following the Merger, Merger Sub
shall continue as the surviving corporation (the "Surviving Corporation") under
the name "Clear Springs Citrus, Inc." and shall continue its existence under
the laws of the State of Florida, and the separate corporate existence of Clear
Springs shall cease.
1.2 Closing Date and Effective Time. The Closing for this
transaction shall occur on or before June 30, 1996 (the "Closing Date"). As
promptly as practicable after the Closing Date but not later than seven (7)
business days after the satisfaction or waiver of the conditions set forth in
Article 6, Clear Springs and Merger Sub shall cause the Merger to be
consummated by each of them filing Articles of Merger and the Plan of Merger
with the Secretary of the State of Florida, each in the form annexed hereto as
Exhibit A and B and
<PAGE> 3
executed in accordance with the relevant provisions of, the BCA (the time of
such filing being the "Effective Time").
1.3 Effect of the Merger. At the Effective Time, the
effect of the Merger shall be as provided for in the applicable provisions of
the BCA. Without limiting the generality of the foregoing, and subject thereto,
at the Effective Time all the properties, rights, privileges, powers and
franchises of Clear Springs and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of Clear Springs and Merger
Sub shall become the debts, liabilities and duties of the Surviving
Corporation.
1.4 Subsequent Actions. If, at any time after the
Effective Time, the Surviving Corporation shall consider or be advised that any
deeds, bills of sale, assignments, assurances or any other actions or things
are necessary or desirable to vest, perfect or confirm of record or otherwise
in the Surviving Corporation its right, title or interest in, to or under any
of the rights, properties or assets of either Clear Springs or Merger Sub
acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger or otherwise to carry out this Agreement, the
officers and directors of the Surviving Corporation shall be authorized to
execute and deliver, in the name and on behalf of either Clear Springs or
Merger Sub, all such deeds, bills of sale, assignments and assurances and to
take and do, in the name and on behalf of each of such corporations or
otherwise, all such other actions and things as may be necessary or desirable
to vest, perfect or confirm any and all right, title and interest in, to and
under such rights, properties or assets in the Surviving Corporation or
otherwise to carry out this Agreement.
1.5 Articles of Incorporation: By-laws: Directors and
Officers. (a) At the Effective Time, the Articles of Incorporation of the
Merger Sub, as in effect immediately prior to the Effective Time, shall be the
Articles of Incorporation of the Surviving Corporation until thereafter amended
as provided by law and such certificate of incorporation.
(b) At the Effective Time, the By-laws of the Merger Sub,
as in effect immediately prior to the Effective Time, shall be the By-laws of
the Surviving Corporation until thereafter amended as provided by law, the
Articles of Incorporation of the Surviving Corporation and such by-laws.
(c) At the Effective Time, Steven Bogen, Steven Smith,
Brian Duffy and Jeffrey Smith will be the initial directors of the Surviving
Corporation. The officers listed on Schedule 1.5(c) hereto immediately prior
to the Effective Time shall deliver their resignations prior to or after the
Closing Date, and as of the Effective Date the officers of the Surviving
Corporation shall be Steven Smith (President and Assistant Secretary), Steven
Bogen (Chief Executive Officer and Secretary), and Mark Feldman (Treasurer).
If, at the Effective Time, a vacancy shall exist on the Board of Directors or
in any office of the Surviving Corporation, such vacancy may thereafter be
filled in the manner provided by law, the Articles of Incorporation of the
Surviving Corporation and the By-laws of the Surviving Corporation.
2
<PAGE> 4
1.6 Conversion of Securities; Piggy-Back Registration
Rights.
(a) At the Effective Time, by virtue of the Merger and
without any action on the part of any of Merger Sub, Clear Springs or the
holder of any of the securities of Clear Springs or Merger Sub the following
shall occur:
(i) each share of Clear Springs Stock issued and
outstanding immediately prior to the Effective Time shall be canceled
and extinguished and be converted into the right to receive the Merger
Consideration (as defined below) upon surrender of the certificate
representing such share of Clear Springs Stock; and
(ii) each share of Merger Sub common stock, par value $.01
per share, issued and outstanding immediately prior to the Effective
Time shall hereafter represent one validly issued, fully paid and
nonassessable share of common stock, par value $.01 per share, of the
Surviving Corporation.
(b) The "Merger Consideration" to be paid by Fresh Juice
for the shares of Clear Springs Stock in accordance with the Merger shall,
subject solely to the adjustments as hereinafter provided for, be paid as
follows:
(i) delivery to the Selling Stockholders of an
aggregate of 1,160,000 validly issued, duly authorized and
non-assessable shares of common stock, par value $.01 per
share, of Fresh Juice Common, as set forth in subparagraph
(b)(ii) below;
(ii) delivery to the Selling Stockholders of the
following number of validly issued, duly authorized and
non-assessable shares of Fresh Juice Common:
Duffy - 300,000 shares of Fresh Juice Common; and
Bogen Group - 860,000 shares of Fresh Juice Common, to be
issued directly as follows:
8,600 shares to Daniel Petry
21,500 shares to Mark Feldman
829,900 shares to Steven Bogen
provided, however, that the above-referenced proration may be adjusted among
the Selling Stockholders with the consent of the affected Selling
Stockholder(s), so long as it is done so without affecting the rights of the
parties not participating in such adjustment; and
3
<PAGE> 5
(iii) each of the Selling Stockholders acknowledges
that the shares of Fresh Juice Common being issued and
delivered pursuant to the Merger will not be registered
pursuant to the Securities Act of 1933, as amended, and must
be held unless and until such shares are subsequently
registered under the 1933 Act or an exemption from
registration is available; accordingly a legend shall be
placed on the stock certificates evidencing such shares of
common stock to reflect certain transfer restrictions.
(c) The Selling Shareholders shall have "piggy back"
registration rights as set forth in the Registration Rights Agreement among
Fresh Juice and the Selling Stockholders attached hereto as Exhibit "C" (the
"Registration Agreement").
1.7 Surrender of Shares: Stock Transfer Books.
(a) If delivery of the Merger Consideration in respect of
canceled shares of Clear Springs Stock is to be made to a person other than the
person in whose name a surrendered certificate or instrument is registered, it
shall be a condition to such delivery that the certificate or instrument so
surrendered shall be properly endorsed or shall be otherwise in proper form for
transfer and that the person requesting such payment shall have paid any
transfer and other taxes required by reason of such payment in a name other
than that of the registered holder of the certificate or instrument surrendered
or shall have established to the satisfaction of Merger Sub that such tax
either has been paid or is not payable.
(b) If, after the Effective Time, certificates for Clear
Springs Stock are presented to the Surviving Corporation, they shall be
canceled and exchanged for the Merger Consideration as provided in Section 1.6
hereof.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS
Each of the Selling Stockholders hereby jointly and severally
represents and warrants to each of Fresh Juice and Merger Sub as follows:
2.1 Authorization: No Conflict. (a) Each Selling
Stockholder has the legal right and capacity to execute and deliver this
Agreement and to perform the transactions contemplated to be performed by him
hereunder. This Agreement constitutes the legal, valid and binding agreement of
each Selling Stockholder and is enforceable against him in accordance with its
terms, except to the extent that enforceability may be limited by bankruptcy,
insolvency, moratorium or other laws affecting the enforceability of creditors'
rights generally and that equitable remedies may be granted in the discretion
of a court.
4
<PAGE> 6
(b) Except as set forth on Schedule 2.1(b) hereto, the
execution, delivery and performance of this Agreement and the documents,
transactions and instruments contemplated hereby by each Selling Stockholder
does not and will not violate, conflict with, result in a breach of any
provisions of, constitute a default (or an event which, with or without due
notice or lapse of time, or both, would constitute a default) under, result in
the termination of, accelerate the performance required by, or result in the
creation of any liens, security interest, charge or other encumbrance upon any
of the properties or assets of Clear Springs under any of the terms, conditions
or provisions of, any contract, note, bond, mortgage, indenture, deed of trust,
license, lease, loan agreement, judgment, order, decree, statute, rule,
regulation or other agreement, instrument or obligation to which Clear Springs
or any of the Selling Stockholders are a party, or by which either or any of
their respective properties or assets may be bound or affected.
2.2 Approvals. All consents, approvals, permits,
authorizations and orders, if any, necessary for the due authorization,
execution and delivery by and on behalf of each Selling Stockholder of this
Agreement and any other transaction or obligation contemplated by this
Agreement have been obtained.
2.3 Litigation. There are no actions, suits, proceedings
or investigations pending or, to the knowledge of each Selling Stockholder,
threatened against any Selling Stockholder, which question or challenge the
validity of this Agreement, the transactions contemplated thereto, or any
action to be taken hereunder.
2.4 Certain Contracts. Except as set forth in Schedule
2.4 hereto, there are no outstanding contracts or agreements between any
Selling Stockholder, or any of his "affiliates," (as such term is defined in
the Securities and Exchange Act of 1934) on the one hand, and Clear Springs or
any of its subsidiaries, on the other hand, whether written or oral, including
without limitation, contracts or agreements for executive compensation,
severance, employment or retirement.
2.5 Outstanding Options, Warrants or Other Rights. Except
as set forth in Schedule 2.5 hereto, none of the Selling Stockholders has
outstanding any option, warrant or other right permitting or requiring him or
others to purchase or convert any obligation into shares of Clear Springs
Stock. There are no voting trusts or other agreements or understandings with
respect to the voting of the shares of capital stock of Clear Springs and the
shares of the capital stock of Clear Springs are not subject to any preemptive
rights, rights of first refusal or similar rights.
2.6 No Liquidation of the Selling Stockholders. The
Selling Stockholders each represent that they have no present plan or intention
to liquidate, or cause the liquidation of, the Selling Stockholders or to
dispose of or cause the disposition of substantially all of its assets prior to
the merger, or to dispose of or cause the disposition of substantially all of
the assets formerly owned by the Selling Stockholders after the Merger.
5
<PAGE> 7
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF
CLEAR SPRINGS AND SELLING STOCKHOLDERS
Each of the Selling Stockholders (with respect to matters
relating to themselves and Clear Springs), and Clear Springs (with respect to
matters relating to Clear Springs) represents and warrants to Fresh Juice and
Merger Sub as follows:
3.1 Organization Standing, etc. Clear Springs is a duly
organized and validly existing corporation in good standing under the laws of
the State of Florida, and has all requisite corporate power and authority to
own, lease and operate its respective properties and assets and to carry on its
respective business as now conducted and as proposed to be conducted. Clear
Springs is duly qualified to do business in good standing as a foreign
corporation in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business now conducted or proposed to be
conducted by it makes such qualification necessary. Except as set forth on
Schedule 3.1 hereto, Clear Springs has no subsidiaries or affiliates.
3.2 Capitalization. Clear Springs has an authorized
capitalization of 7,500 shares of common stock, .01 par value, of which 1,000
shares of common stock are issued and outstanding. There are 178.49848 treasury
shares of Clear Springs common stock.
3.3 Authorization. Clear Springs has all requisite
corporate power and authority to execute and deliver this Agreement and to
perform the transactions contemplated hereby. Clear Springs has taken all
requisite corporate action to authorize the execution; delivery and performance
of this Agreement and the transactions contemplated hereby. This Agreement is
the legal, valid and binding obligation of Clear Springs, enforceable against
it in accordance with its terms, except to the extent that enforceability may
be limited by bankruptcy, insolvency, moratorium or other laws affecting the
enforceability of creditors rights generally and that equitable remedies may be
granted in the discretion of a court.
3.4 Status of Securities. The shares of Clear Springs
Stock presently issued and outstanding are duly authorized, validly issued,
fully paid and nonassessable and free and clear of all liens, security
interests, pledges, charges, claims and encumbrances of any kind.
3.5 Articles of Incorporation and By-laws. Clear Springs
has delivered to Fresh Juice a true, correct and complete copy of its Articles
of Incorporation and a true, correct and complete copy of its By-laws, each of
which contains all amendments thereto and have been certified by the Secretary
of Clear Springs.
3.6 Outstanding Options, Warrants and Other Rights.
Except as set forth on Schedule 3.6 hereto, Clear Springs does not have
outstanding any option, warrant or other right
6
<PAGE> 8
permitting or requiring it or others to purchase or convert any obligation into
shares of its capital stock and has not agreed to issue or sell any shares of
such capital stock, except to Fresh Juice hereunder. Except as set forth on
Schedule 3.6 hereto, there are no voting trusts or other agreements or
understandings with respect to the voting of the shares of capital stock of
Clear Springs, and the shares of the capital stock of Clear Springs are not
subject to any preemptive rights, rights of first refusal or similar rights.
3.7 Record Ownership.
The Selling Stockholders are the sole record owners of all of
the shares of Clear Springs Stock issued and outstanding. Duffy currently owns
212.457544 shares and the Bogen Group L.L.C. owns 609.0439754 shares. The
Clear Springs Stock owned by the Selling Stockholders is owned free and clear
of all liens, claims, charges and encumbrances of every kind.
3.8 Financial Statements. Clear Springs has delivered to
Fresh Juice (i) financial statements including the related notes thereto for
its fiscal year ended December 31, 1995, (unaudited) containing the balance
sheets of Clear Springs as of the end of such fiscal year, and the related
statement of operations and retained earning; and (ii) (unaudited) internal
financial statements for the months of January and February 1996, containing
the corresponding balance sheets and related statements of operations and
retained earnings. The foregoing financial statements have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods indicated, are complete and correct, and fairly present
the financial position and stockholders' equity of Clear Springs as of the date
and for the respective periods indicated. Except as set forth on Schedule
3.8(a) hereto, the balance sheet as of February 29, 1996, makes full and
adequate provision for all fixed and contingent obligations and liabilities of
Clear Springs as of the date and for the periods indicated, and as of February
29, 1996, Clear Springs does not have any fixed obligations or liabilities not
reflected in or adequately reserved against on such balance sheet as of
February 29, 1996, or set forth in the Schedules to this Agreement. To the
knowledge of Clear Springs and the Selling Stockholders, there is no basis for
the assertion against Clear Springs of any liability or obligation not
adequately reflected or reserved against in such financial statement or set
forth in the Schedules to this Agreement; Clear Springs has no liabilities,
fixed or contingent, which would adversely affect the conduct of the business
of Clear Springs other than as reflected or reserved against in the balance
sheet of Clear Springs as of February 29, 1996, or set forth in the Schedules
to this Agreement.
3.9 Certain Changes or Events. Except as set forth on
Schedule 3.9 hereto, since February 29, 1996, Clear Springs has not:
(i) experienced any change in its condition (financial or
otherwise), properties, assets, liabilities, business, operations or
prospects other than changes in the ordinary course of business which
have not, individually or in the aggregate, had a material
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adverse effect on its properties, assets, business, operations or
financial condition; provided, however, that Clear Springs has been
unable to raise pricing on all accounts due to strong competition which
has recently emerged for the same customer base.
(ii) declared, set aside, made or paid any dividend or
other distribution in respect of its capital stock or purchased or
redeemed, directly or indirectly, any shares of its capital stock;
(iii) issued or sold any shares of its capital stock of any
class, or any options, warrants, conversion or other rights to purchase
any such shares or any securities convertible into or exchangeable for
such shares;
(iv) incurred any indebtedness for borrowed money (except
borrowings in the ordinary course of business not exceeding $10,000 in
the aggregate) or issued or sold any debt securities;
(v) mortgaged, pledged, or subjected to any lien, lease,
security interest or other charge or encumbrance any of its properties
or assets, tangible or intangible, except (i) liens for current taxes
not due and payable or being contested in good faith by appropriate
proceedings; (ii) liens imposed by law and incurred in the ordinary
course of business for obligations not yet due to carriers,
warehousemen, laborers, materialmen and the like; and (iii)
encumbrances, easements and security interests which do not detract
from the value or interfere with the use of the properties affected
thereby;
(vi) acquired or disposed of any assets or properties of
material value except in the ordinary course of business;
(vii) forgiven or canceled any debts or claims, or waived
any rights, except in the ordinary course of business,
(viii) entered into any material transaction other than in
the ordinary course of business;
(ix) granted to any officer or salaried employee or any
class of other employees any increase in compensation in any form in
excess of the amount thereof in effect as of December 31, 1995, or any
severance or termination pay (other than in amounts consistent with
past practices), or entered into any written employment agreement or
arrangement with any person;
(x) entered into, adopted or amended in any respect any
collective bargaining agreement or adopted or amended any bonus, profit
sharing, compensation, stock option, pension, retirement, deferred
compensation, insurance or other similar plan, agreement, trust, fund
or arrangement for the benefit of employees;
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(xi) suffered any damage, destruction or loss (whether or
not covered by insurance) which materially adversely affects its
condition (financial or otherwise), properties, assets, business,
operations or prospects;
(xii) suffered any strike or other labor trouble materially
adversely affecting its business, operations or prospects;
(xiii) suffered any loss of employees or customers that
materially adversely affects or could materially adversely affect its
business, operations or prospects; or
(xiv) incurred any liability or obligation (fixed or
contingent) except (A) liabilities and obligations in the ordinary
course of business and (B) other liabilities and obligations not
exceeding $10,000 in the aggregate.
3.10 Title to Properties: Liens. Except as set forth on
Schedule 3.10 hereto, Clear Springs has good and marketable title to, or valid
and subsisting leasehold interests in, all of its properties and assets, real
and personal, in each case free and clear of any mortgage, pledge, lien, lease,
charge, encumbrance, conditional sale or other title retention agreement,
except for the lien of taxes not yet due and payable or being contested in good
faith by appropriate proceedings, and except for such imperfections of title
and encumbrances, if any, as do not detract from the value, or interfere with
the present use, its properties or assets subject thereto or affected thereby,
or otherwise impair its business operations. Except as set forth on Schedule
3.10 hereto, there is not under any lease of real or personal property to which
Clear Springs is a party any existing default or event of default or event
which with notice or lapse of time or both would constitute a default or event
of default.
3.11 Adequacy of Patents and Other Rights. Except as set
forth on Schedule 3.11 hereto, Clear Springs has all necessary patents,
licenses, trademark, trade names, copyrights and other rights that are required
to conduct its respective business substantially as now being conducted and as
proposed to be conducted, and no other right, license or authorization of any
kind whatsoever is required to so carry on its respective business. There is
no infringement or claim of any adverse nature with respect to any patent,
patent application, license, trademark, trade name, copyright or right in any
thereof.
3.12 Litigation. Except as set forth on Schedule 3.12
hereof, there are no actions, suits, proceedings or investigations pending or,
to the knowledge of Clear Springs or the Selling Stockholders, threatened
against or affecting Clear Springs, or the Selling Stockholders, at law or in
equity, before any court, commission, board, bureau, agency, instrumentality or
other governmental authority that may result in any material adverse effect
upon the business, assets, liabilities, prospects or condition (financial or
otherwise) of Clear Springs or which seems to prevent the consummation of any
of the transactions contemplated by this Agreement. To the knowledge of Clear
Springs or the Selling Stockholders, there are no
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claims that have not been asserted against Clear Springs or the Selling
Stockholders that are probable of assertion.
3.13 Accounts Receivable. Except as set forth on Schedule
3.13 hereto, the accounts receivable of Clear Springs as shown on its balance
sheet at February 29, 1996, or thereafter acquired by them, are usual and
normal receivables and, through the continuation of existing collection
procedures, are collectible in the aggregate amounts thereof, after allowance
for doubtful accounts in the amount of the reserve established therefor. To
the knowledge of Clear Springs or the Selling Stockholders, such accounts
receivable are subject to no valid defenses or offsets except routine customer
complaints or warranty demands of an immaterial nature. An adequate reserve
for doubtful accounts in the ordinary course of business has been established.
3.14 Inventories. Except as set forth on Schedule 3.14
hereto, the inventories of Clear Springs, shown on its balance sheet at
February 29, 1996, or thereafter acquired by it, consist of items of a quality
and quantity usable or salable in the normal course of its business; the value
of all items of obsolete materials and of materials of below standard quality
has been written down to realizable market value or adequate reserves have been
provided therefor; and the values at which such inventories are carried reflect
the normal inventory valuation policies of Clear Springs.
3.15 Consents, etc. Except as set forth on Schedule 3.15
hereto, Clear Springs is not required to obtain any consent, approval, permit
or authorization of any person, including, without limitation, any governmental
agency or regulatory authority, in connection with execution, delivery, lawful
consummation and performance of this Agreement and the transactions
contemplated thereby.
3.16 Compliance with Other Instruments, etc. Except as set
forth on Schedule 3.16 hereto, the execution and delivery of this Agreement and
the performance of the transactions contemplated hereby by Clear Springs or any
of the Selling Stockholders does not and will not violate, conflict with,
result in a breach of any provisions of, constitute a default (or an event
which, with or without due notice or lapse of time, or both, would constitute a
default) under, result in the termination of, accelerate the performance
required by, or result in the creation of any lien, security interest, charge
or other encumbrance upon any of the properties or assets of Clear Springs,
under any provision of its Articles of Incorporation or by-laws, or any
contract, mortgage, indenture, lien, license, permit, lease or other agreement
or instrument, judgment, decree, ordinance, regulation or order or any other
restriction of any other kind or character to which Clear Springs is a party or
by which Clear Springs, or any of its properties, is bound or affected.
3.17 Existing Contracts. Except as set forth on Schedule
3.17(a), all material contracts, agreements, leases, licenses and
understandings to which Clear Springs is a party are in full force and effect
and no default, or event which with notice or lapse of time or both would
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constitute a default, exists in respect thereof on the part of Clear Springs,
or the other parties thereto. Except as set forth on Schedule 3.17(b) hereto,
Clear Springs is not a party to and does not have any obligation, contingent or
otherwise, under any (i) written or oral contract not made in the ordinary
course of business in excess of $50,000; (ii) employment contract or contract
with or for the benefit, directly or indirectly, of any officer, director,
shareholder or partner other than Duffy; (iii) collective bargaining agreement
with employees; (iv) bonus, pension, profit-sharing, retirement, stock
purchase, hospitalization, insurance or other plan providing employee benefits;
(v) lease with respect to any property, real or personal, whether as lessor or
lessee other than its current corporate headquarters and warehouse; (vi)
contract for the purchase of materials, supplies or equipment, or the provision
by Clear Springs of goods or services, for an aggregate price in excess of
$25,000; (vii) contract or commitment for capital expenditures in excess of
$25,000 in the aggregate; (viii) contract continuing over a period of more than
one year from its date in excess of $50,000; (ix) mortgage, loan or credit
agreement; (x) contract requiring consent to the transactions contemplated by
this Agreement; (xi) guaranty of the obligations of any other person; or (xii)
any other material contact, agreement or understanding.
3.18 Undocumented Liabilities. Except as set forth in the
financial statements referred to in Section 3.8 hereof and except for property
owned by customers and stored upon the premises of Clear Springs for use in
future orders of such customers, of which Clear Springs or the Selling
Stockholders are aware, Clear Springs does not have any material liabilities,
contingent or otherwise, that are not disclosed in such financial statements or
set forth in the Schedules to this Agreement, including, without limitation,
tax liabilities due or to become due, whether disputed or not, except such
liabilities as have been incurred in the ordinary course of business.
3.19 Taxes. Clear Springs has filed all tax returns which
are required to be filed, and has paid all taxes which have become due,
pursuant to such returns or pursuant to any assessment received by Clear
Springs. Clear Springs has made adequate provision for all taxes due with
respect to all periods as to which a return has not yet been filed. Except as
provided in Schedule 3.19, there is no tax deficiency proposed or threatened
against Clear Springs and no tax returns of Clear Springs are under examination
or audit.
3.20 Employee Matters. Clear Springs has withheld all
amounts required by law or contract to be withheld from the wages or salaries
of its employees and is not liable for any arrears or wages or any taxes or
penalties for failure to comply with any of the foregoing or for payment to any
trust or other fund compensation, social security or other benefits for
employees. To its knowledge, Clear Springs has not engaged in any unfair labor
practice or discriminated on the basis of race, age, sex or otherwise in its
employment conditions or practices with respect to its employees. There are no
unfair labor practice or race, age, sex or other discrimination complaints
pending, or, to the knowledge of Clear Springs or the Selling Stockholders,
threatened against Clear Springs by any employee, former or current, before any
domestic (federal, state or local) or foreign board, department, commission or
agency nor, to the knowledge of Clear Springs or the Selling Stockholders, does
any basis therefore exists.
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Except as set forth on Schedule 3.20 hereto, there are no existing or, to the
knowledge of Clear Springs or the Selling Stockholders, threatened, labor
strike, disputes, grievances, controversies or other labor troubles affecting
the business of Clear Springs. There are not pending or, to the knowledge of
Clear Springs or the Selling Stockholders, threatened representation questions
respecting any employees.
3.21 Financial Statements. Clear Springs shall provide to
Fresh Juice, when requested by Fresh Juice, such financial statements and
information pertaining to Clear Springs as shall be necessary for Fresh Juice
to satisfy any and all United State Securities and Exchange Commission
disclosure requirements, such as filing of a Form 8-K, as may arise in
connection with this Agreement and transactions contemplated thereby.
3.22 Accounts Receivable. The accounts receivable of Clear
Springs Juice Company, Inc. as shown on its balance sheet at February 29, 1996,
or thereafter acquired by it, are usual and normal receivables and, through the
continuation of existing collection procedures, are collectible in the
aggregate amounts thereof. To the knowledge of Clear Springs, such accounts
receivable are subject to no valid defenses or offsets except routine customer
complaints of warranty demands of an immaterial nature. An adequate reserve
for doubtful accounts in the ordinary course of business has been established.
3.23 Miscellaneous. Clear Springs:
(i) is in substantial compliance with all applicable
federal, state and local statues, codes, ordinances, rules or
regulation; has not received any notice of a material violation of any
law, order, regulation or requirement relating to the operation of the
business or the ownership of property;
(ii) does not have, as of February 29, 1996, any unfunded
costs or obligations in respect of employee benefit plans and does not
have delinquent premiums on health, accident, disability or any other
insured employee benefits;
(iii) has not, since February 29, 1996, permitted any option
to renew any lease or any option to purchase any property to expire
unexercised, in whole or in part;
(iv) does not have any safe deposit boxes, vault boxes or
similar arrangements for the safekeeping of property or outstanding
powers of attorney (other than appointments of statutory agents to
receive service of process); and
(v) except as set forth on Exhibit 3.23(v), has made no
express warranty to any person or entity with respect to any product it
manufactures or sells or has manufactured or sold and has not made or
agreed to make any indemnification payment, or replacement with respect
to any product warranty claim, except for the warranties and/or
agreement(s) to indemnify or replace product of which true and correct
copies
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have been delivered to Fresh Juice, the warranties applicable under the
Uniform Commercial Code as in effect from time to time in the State of
Florida or in any other state in which its products are sold and any
other warranties under other state or federal laws.
3.24 Accounting and Tax Matters. Neither Clear Springs nor
any of its subsidiaries has taken or agreed to take any action or has any
knowledge of any fact or circumstance that would prevent the transactions
contemplated hereby, including the Merger, from qualifying as a reorganization
within the meaning of Section 368 of the Internal Revenue Code of 1986, as
amended.
3.25 Insurance. Clear Springs maintains such policies of
insurance in such coverage amounts and for such rights as are generally
maintained by companies in the same industry with a similar sales and
production volume. As of the date hereof, Clear Springs has not received any
notice of cancellation or notice of a material amendment of any such insurance
policy or bond or is in default under such policy or bond, no coverage
thereunder is being disputed and all material claims thereunder have been filed
in a timely fashion. All pending material claims under such policies or bonds
are disclosed in this Agreement or the Schedules hereto.
3.26 Environmental Matters. Except as disclosed on Schedule
3.26 hereto, Clear Springs has not received any written notice, citation,
claim, assessment, proposed assessment or demand for abatement alleging that
Clear Springs (either directly or as a successor-in-interest in connection with
the enforcement of remedies to realize the value of properties serving as
collateral for outstanding loans) is responsible for the correction or clean-up
of any condition material to the business, operations, assets or financial
condition of Clear Springs. Except as disclosed on Schedule 3.26, Clear
Springs have no knowledge that any toxic or hazardous substances or materials
have been emitted, generated, disposed of or stored on any property owned or
leased by Clear Springs in any manner that violates or, after the lapse of time
may violate, any presently existing federal, state or local law or regulation
governing or pertaining to such substances and materials.
3.27 Collective Bargaining Agreement. Clear Springs is not
now nor ever has been a party to or bound by any collective bargaining
agreement or union contract which covers or covered its employees.
3.28 No Right of Setoff. As of the date hereof, none of
the Selling Stockholders is indebted to Clear Springs for any monies and Clear
Springs has no right of setoff with respect to any amounts due to the Selling
Stockholders from Clear Springs with the exception of that certain Promissory
Note dated March 11, 1996, made by Clear Springs in favor of Duffy, a copy of
which has been provided to Fresh Juice.
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3.29 No Liquidation of Clear Springs. Clear Springs,
represents that it has no present plan or intention to liquidate, or cause the
liquidation of, Clear Springs or to dispose of or cause the disposition of
substantially all of its assets prior to the merger, or to dispose of or cause
the disposition of substantially all of the assets formerly owned by Clear
Springs after the merger.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF MERGER SUB
Merger Sub hereby represents and warrants to Clear Springs as
follows;
4.1 Organization Standing, etc. Merger Sub is a duly
organized and validly existing corporation in good standing under the laws of
the State of Florida and has all requisite corporate power and authority to
own, lease and operate its properties and assets and to carry on its business
as now conducted and as proposed to be conducted. Merger Sub is duly qualified
to do business in good standing as a foreign corporation in each jurisdiction
in which the property is owned, leased or operated by it or the nature of the
business now conducted or proposed to be conducted by it makes such
qualification necessary. Merger Sub has no subsidiaries.
4.2 Capitalization. Merger Sub has an authorized
capitalization of 1,000 shares of common stock, par value $.01 per share, of
which 100 shares are issued and outstanding ("Merger Sub Stock"). There are no
treasury shares of Merger Sub capital stock.
4.3 Authorization: No Conflict.
(a) Merger Sub has all requisite corporate power and
authority to execute and deliver this Agreement and to perform the transactions
contemplated hereby. Merger Sub has taken all requisite corporate action to
authorize the execution, delivery and performance of this Agreement and the
transactions contemplated hereby. This Agreement is the legal, valid and
binding obligations of Merger Sub, enforceable against it in accordance with
its terms, except to the extent that enforceability may be limited by
bankruptcy, insolvency, moratorium or other laws affecting the enforceability
of creditors rights generally and that equitable remedies may be granted in the
discretion of a court.
(b) Except as set forth in Schedule 4.3(b) hereto, the
execution, delivery and performance of this Agreement and the documents,
transactions and instruments contemplated hereby by Merger Sub do not and will
not violate, conflict with, result in a breach of any provisions of, constitute
a default (or an event which, with or without due notice or lapse of time or
both, would constitute a default) under, result in the termination of,
accelerate the performance required by, or result in the creation of any lien,
security interest, charge or other encumbrance upon any of the properties or
assets of Merger Sub under any provision of its
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charter, by-laws or other corporate documents, or under any of the terms,
conditions or provisions of any contract, note, bond, mortgage, indenture, deed
of trust, license, lease, loan agreement, judgment, order, decree, statute,
rule, regulation or other agreement, instrument or obligation to which Merger
Sub is a party, or by which it or any of its properties or assets is bound or
affected.
4.4 Status of Securities. The shares of Merger Sub Stock
outstanding are duly authorized, validly issued, fully paid and nonassessable
and free and clear of all liens, security interests, pledges, charges, claims
and encumbrances of any kind.
4.5 Articles of Incorporation and By-laws. Merger Sub has
delivered to Clear Springs a true, correct and complete copy of its Articles of
Incorporation and a true, correct and complete copy of its By-laws, each of
which contains all amendments thereto and has been certified by the Secretary
of Merger Sub.
4.6 Outstanding Options, Warrants or Other Rights. Merger
Sub does not have outstanding any option, warrant or other right permitting or
requiring it or others to purchase or convert any obligation into shares of
capital stock of Merger Sub and has not agreed to issue or sell any shares of
capital stock of Merger Sub. There are no voting trusts or other agreements or
understandings with respect to the voting of the shares of capital stock of
Merger Sub, and the shares of the capital stock of Merger Sub are not subject
to any preemptive rights, rights of first refusal or similar rights.
4.7 Record Ownership. Fresh Juice is the sole record
owner of all of the shares of Merger Sub Stock issued and outstanding. The
Merger Sub Stock owned by Fresh Juice is owned free and clear of all liens,
claims, charges and encumbrances of every kind.
4.8 Certain Changes or Events. Except as set forth in
Schedule 4.8 or in the Fresh Juice Financial Statements (as defined in Section
5.7 hereof) since February 29, 1996, Merger Sub has not:
(i) experienced any change in its condition (financial or
otherwise), properties, assets, liabilities, business, operations or
prospects other than changes in the ordinary course of business which
have not, individually or in the aggregate, had a material adverse
effect on its properties, assets, business, operations or financial
condition;
(ii) declared, set aside made or paid any dividend or other
distribution in respect of its capital stock or purchased or redeemed,
directly or indirectly, any shares of its capital stock; or
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(iii) issued or sold any shares of its capital stock of any
class, or any options, warrants conversion or other rights to purchase
any such shares or any securities convertible into or exchangeable for
such shares.
(iv) incurred any indebtedness for borrowed money (except
borrowings in the ordinary course of business not exceeding $10,000 in
the aggregate) or issued or sold any debt securities;
(v) mortgaged, pledged, or subjected to any lien, lease,
security interest or other charge or encumbrance any of its properties
or assets, tangible or intangible, except (i) liens for current taxes
not due and payable or being contested in good faith by appropriate
proceedings; (ii) liens imposed by law and incurred in the ordinary
course of business for obligations not yet due to carriers,
warehousemen, laborers, materialmen and the like; and (iii)
encumbrances, easements and security interests which do not detract
from the value or interfere with the use of the properties affected
thereby;
(vi) acquired or disposed of any assets or properties of
material value except in the ordinary course of business;
(vii) forgiven or canceled any debts or claims, or waived
any rights, except in the ordinary course of business,
(viii) entered into any material transaction other than in
the ordinary course of business;
(ix) granted to any officer or salaried employee or any
class of other employees any increase in compensation in any form in
excess of the amount thereof in effect as of February 29, 1996, or any
severance or termination pay (other than in amounts consistent with
past practices), or entered into any written employment agreement or
arrangement with any person;
(x) entered into, adopted or amended in any respect any
collective bargaining agreement or adopted or amended any bonus, profit
sharing, compensation, stock option, pension, retirement, deferred
compensation, insurance or other similar plan, agreement, trust, fund
or arrangement for the benefit of employees (whether or not legally
binding);
(xi) suffered any damage, destruction or loss (whether or
not covered by insurance) which materially adversely affects its
condition (financial or otherwise), properties, assets, business,
operations or prospects;
(xii) suffered any strike or other labor trouble materially
adversely affecting its business, operations or prospects;
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(xiii) suffered any loss of employees or customers that
materially adversely affects or could materially adversely affect its
business, operations or prospects; or
(xiv) incurred any liability or obligation (fixed or
contingent) except (A) liabilities and obligations in the ordinary
course of business and (B) other liabilities and obligations not
exceeding $10,000 in the aggregate.
4.9 Title to Properties; Liens. Except as set forth in
Schedule 4.9 attached hereto, Merger Sub has good and marketable title to, or
valid and subsisting leasehold interests in, all of its properties and assets,
real and personal, in each case free and clear of any mortgage, pledge, lien,
lease, charge, encumbrance, conditional sale or other title retention
agreement, except for the lien of taxes not yet due and payable or being
contested in good faith by appropriate proceedings, and except for such
imperfections of title and encumbrances, if any, as do not detract from the
value, or interfere with the present use, of its properties or assets subject
thereto or affected thereby, or otherwise impair their respective business
operations. There is not under any lease of real or personal property to which
Merger Sub is a party any existing default or event of default or event which
with notice or lapse of time or both would constitute a default or event of
default.
4.10 Adequacy of Patents and Other Rights. Merger Sub has
all necessary patents, licenses, trademarks, trade names, copyrights and other
rights that are required to conduct business substantially as now being
conducted and as proposed to be conducted, and no other right, license or
authorization of any kind whatsoever is required to so carry on its business.
There is no infringement or claim of any adverse nature with respect to any
patent, patent application, license trademark, trade name, copyright or right
in any thereof.
4.11 Accounts Receivable. Except as set forth on Schedule
4.11 hereto, the accounts receivable of Merger Sub as shown on its balance
sheet at February 29, 1996, or thereafter acquired by it, are usual and normal
receivables and, through the continuation of existing collection procedures,
are collectible in the aggregate amounts thereof, after allowance for doubtful
accounts in the amount of the reserve established therefor. To the knowledge
of Merger Sub, such accounts receivable are subject to no valid defenses or
offsets except routine customer complaints or warranty demands of an immaterial
nature. An adequate reserve for doubtful accounts in the ordinary course of
business has been established.
4.12 Inventories. Except as set forth on Schedule 4.12
hereto, the inventories of Merger Sub, shown on its balance sheet at February
29, 1996, or thereafter acquired by them, consist of items of a quality and
quantity usable or salable in the normal course of its business; the value of
all items of obsolete materials and of materials of below standard quality has
been written down to realizable market value or adequate reserves have been
provided therefor; and the values at which such inventories are carried reflect
the normal inventory valuation policies of Merger Sub.
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4.13 Litigation, etc. Except as set forth in Schedule 4.13
or as disclosed in the Fresh Juice Financial Statements, there are no actions,
suits, proceedings or investigations pending or, to the knowledge of Merger
Sub, threatened against or affecting Merger Sub, at law or in equity before any
court, commission, board, bureau, agency, instrumentality or other governmental
authority that may result in any material adverse effect upon the business,
assets, liabilities, prospects or condition (financial or otherwise) of Merger
Sub or which seems to prevent the consummation of any of the transactions
contemplated by this Agreement. To the knowledge of Merger Sub, there are no
claims that have not been asserted against it that are probable of assertion.
4.14 Consents, etc. Except as set forth in Schedule 4.14
hereof, Merger Sub is not required to obtain any consent, approval, permit or
authorization of any person, including, without limitation, any governmental
agency or regulatory authority, in connection with the execution, delivery,
lawful consummation and performance of this Agreement and the transactions
contemplated thereby, or the consummation of the transactions contemplated
hereby or thereby.
4.15 Existing Contracts. Except as set forth in the Fresh
Juice Financial Statement and in Schedule 4.15 hereof, all material contracts,
agreements, leases, licenses and understandings to which Merger Sub is a party
are in full force and effect and no default, or event which with notice or
lapse of time or both would constitute a default, exists in respect thereof on
the part of Merger Sub, or the other parties thereto. Except as set forth on
Schedule 4.15 hereto, Merger Sub is not a party to and does not have any
obligation, contingent or otherwise, under any (i) written or oral contract not
made in the ordinary course of business in excess of $50,000; (ii) employment
contract or contract with or for the benefit, directly or indirectly, of any
officer, director, shareholder or partner; (iii) collective bargaining
agreement with employees; (iv) bonus, pension, profit-sharing, retirement,
stock purchase, hospitalization, insurance or other plan providing employee
benefits; (v) lease with respect to any property, real or personal, whether as
lessor or lessee other than its current corporate headquarters and warehouse;
(vi) contract for the purchase of materials, supplies or equipment, or the
provision by Merger Sub of goods or services, for an aggregate price in excess
of $25,000; (vii) contract or commitment for capital expenditures in excess of
$25,000 in the aggregate; (viii) contract continuing over a period of more than
one year from its date in excess of $50,000; (ix) mortgage, loan or credit
agreement; (x) contract requiring consent to the transactions contemplated by
this Agreement; (xi) guaranty of the obligations of any other person; or (xii)
any other material contact, agreement or understanding.
4.16 Undocumented Liabilities. Except as set forth in the
Fresh Juice Financial Statements and except for property owned by customers and
stored upon the premises of Merger Sub for use in future orders of such
customers, of which Merger Sub is aware, Merger Sub does not have any
liabilities, contingent or otherwise, that are not disclosed in the Merger Sub
Financial Statements, including, without limitation, tax liabilities due or to
become due, whether disputed or not, except such liabilities as have been
incurred in the ordinary course of business.
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4.17 Taxes. Merger Sub has filed all tax returns which are
required to be filed, and has paid all taxes which have become due, pursuant to
such returns or pursuant to any assessment received by Merger Sub. Merger Sub
has made adequate provision for all taxes due with respect to all periods as to
which a return has not yet been filed. There is no tax deficiency proposed or
threatened against Merger Sub and no tax returns of Merger Sub are under
examination or audit.
4.18 Employee Matters. Merger Sub has withheld all amounts
required by law or contract to be withheld from the wages or salaries of its
employees and is not liable for any arrears or wages or any taxes or penalties
for failure to comply with any of the foregoing or for payment to any trust or
other fund compensation, social security or other benefits for employees. To
its knowledge, Merger Sub has not engaged in any unfair labor practice or
discriminated on the basis of race, age, sex or otherwise in its employment
conditions or practices with respect to its employees. There are no unfair
labor practice or race, age, sex or other discrimination complaints pending,
or, to the knowledge of Merger Sub, threatened against Merger Sub Springs by
any employee before any domestic (federal, state or local) or foreign board,
department, commission or agency nor, to the knowledge of Merger Sub, does any
basis therefore exist. There are no existing or, to the knowledge of Merger Sub
threatened, labor strikes, disputes, grievances, controversies or other labor
troubles affecting the business of Merger Sub. There are not pending or, to
the knowledge of Merger Sub, threatened representation questions respecting any
employees.
4.19 Miscellaneous. Except as set forth in Schedule 4.19
and in the Fresh Juice Financial Statements, Merger Sub:
(i) is in substantial compliance with all applicable
federal, state and local statutes, codes, ordinances, rules or
regulations; Merger Sub has not received any notice of violation of any
law, order, regulation or requirements relating to the operation of its
business or the ownership of its property;
(ii) does not have, as of February 29, 1996, any unfunded
costs or obligations in respect of employee benefit plans and does not
have unpaid premiums on health, accident, disability or any other
insured employee benefits;
(iii) has not, since February 29, 1996, permitted any option
to renew any lease or any option to purchase any property to expire
unexercised, in whole or in part;
(iv) has made no express warranty to any person or entity
with respect to any product it manufactures or sells or has
manufactured or sold and has not made or agreed to make any
indemnification payment, or replacement with respect to any product
warranty claim, except for the warranties of which true and correct
copies have been delivered to Clear Springs and the warranties
applicable
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under the Uniform Commercial Code as in effect from time to time in the
State of Florida.
4.20 Collective Bargaining Agreement. Merger Sub is not
now nor ever has been a party to or bound by any collective bargaining
agreement or union contact which covers or covered its employees.
4.21 Accounts Receivable. Except as set forth on Schedule
4.21 hereto, the accounts receivable of Merger Sub as shown on its balance
sheet at February 29, 1996, or thereafter acquired by it, are usual and normal
receivables and, through the continuation of existing collection procedures,
are collectible in the aggregate amounts thereof, after allowance for doubtful
accounts in the amount of the reserve established therefor. To the knowledge
of Merger Sub, such accounts receivable are subject to no valid defenses or
offsets except routine customer complaints of warranty demands of an immaterial
nature. An adequate reserve for doubtful accounts in the ordinary course of
business has been established.
4.22 Tax-Free Reorganization. Merger Sub has not taken nor
agreed to take any action nor has knowledge of any fact or circumstance that
would prevent the Merger transaction contemplated herein from qualifying as a
tax-free reorganization within the meaning of Section 368 of the Internal
Revenue Code of 1986, as amended.
4.23 No Right of Setoff. As of the date hereof, none of
the Selling Stockholders is indebted to Merger Sub for any monies and Merger
Sub has no right of setoff with respect to any amounts due to the Selling
Stockholders from Merger Sub.
4.24 Insurance. Merger Sub maintains such policies of
insurance in such coverage amounts and for such risks as are generally
maintained by companies in the same industry with similar sales volume. As of
the date hereof, Merger Sub has not received any notice of cancellation or
notice of a material amendment of any such insurance policy or bond or is in
default under such policy or bond, no coverage thereunder is being disputed and
all material claims thereunder have been filed in a timely fashion. All
pending material claims under such policies or bonds are disclosed in this
Agreement or the Schedules hereto.
4.25 Environmental Matters. Except as disclosed on Schedule
4.25 hereto, Merger Sub has not received any written notice, citation, claim,
assessment, proposed assessment or demand for abatement alleging that Merger
Sub (either directly or as a successor-in-interest in connection with the
enforcement of remedies to realize the value of properties serving as
collateral for outstanding loans) is responsible for the correction or clean-up
of any condition material to the business, operations, assets or financial
condition of Merger Sub. Except as disclosed on Schedule 4.25, Merger Sub has
no knowledge that any toxic or hazardous substances or materials have been
emitted, generated, disposed of or stored on any property owned or leased by
Merger Sub in any manner that violates or, after the lapse of time may
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violate, any presently existing federal, state or local law or regulation
governing or pertaining to such substances and materials.
4.26 No Liquidation of Assets. Merger Sub, represents that
it has no present plan or intention to liquidate, or cause the liquidation of,
Clear Springs or to dispose of or cause the disposition of substantially all of
its assets prior to the merger, or to dispose of or cause the disposition of
substantially all of the assets formerly owned by Clear Springs after the
merger.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF FRESH JUICE
Fresh Juice represents and warrants to each of the Selling
Stockholders and Clear Springs as follows:
5.1 Organization Standing, etc. Fresh Juice is a duly
organized and validly existing corporation in good standing under the laws of
the State of Delaware and has all requisite corporate power and authority to
own, lease and operate its properties and assets and to carry on its business
as now conducted and as proposed to be conducted and to execute and deliver
this Agreement and to perform the transactions contemplated hereby and its
obligations hereunder. Fresh Juice is duly qualified to do business in good
standing as a foreign corporation in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business now conducted or
proposed to be conducted by it makes such qualification necessary. Except as
set forth on Schedule 5.1 hereto, Fresh Juice has no subsidiaries or
affiliates.
5.2 Capitalization. Fresh Juice has an authorized
capitalization of 5,200,000 shares of capital stock, consisting of 5,000,000
shares of Fresh Juice Common and 200,000 shares of series preferred stock, par
value $10 per share; there are 3,550,062 shares of Fresh Juice Common issued
and outstanding and there are no shares of such preferred stock issued and
outstanding. All such shares of issued and outstanding Fresh Juice Common have
been duly authorized, validly issued and are fully paid and non-assessable.
There are 200,000 treasury shares of Fresh Juice Common.
5.3 Authorization. Fresh Juice has all requisite
corporate power and authority to execute and deliver this Agreement and to
perform the transactions contemplated hereby. Fresh Juice has taken all
requisite corporate action to authorize the execution, delivery and performance
of this Agreement and the transactions contemplated hereby. This Agreement is
the legal, valid and binding obligations of Fresh Juice, enforceable against it
in accordance with its terms, except to the extent that enforceability may be
limited by bankruptcy, insolvency, moratorium or other laws affecting the
enforceability of creditors rights generally and that equitable remedies may be
granted in the discretion of a court.
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5.4 Status of Securities. The shares of Fresh Juice
Common to be issued and delivered to the Selling Stockholders pursuant to this
Agreement shall be, as of the Effective Time, duly authorized, validly issued,
fully paid and nonassessable and free and clear of all liens, security
interests, pledges, charges, claims and encumbrances of any kind.
5.5 Articles of Incorporation and By-laws. Fresh Juice has
delivered to Clear Springs a true, correct and complete copy of its Articles of
Incorporation and a true, correct and complete copy of its By-laws, each of
which contains all amendments thereto and have been certified by the Secretary
of Fresh Juice.
5.6 Outstanding Options, Warrants or Other Rights. Except
as set forth in Schedule 5.6 hereto, Fresh Juice does not have outstanding any
option, warrant of other right permitting or requiring it or others to purchase
or convert any obligation into shares of its capital stock and has not agreed
to issue or sell any shares of such capital stock; except as provided for
herein other than the Stockholders Agreement between Steve Smith and Steven
Bogen dated as of the date hereof. Other than the Voting Agreement, dated as
of the date hereof, among Craig Lessner, Fresh Juice and the Stockholders named
herein. There are no voting trusts or other agreements or understandings with
respect to the voting of the shares of capital stock of Fresh Juice, and the
shares of the capital stock of Fresh Juice are not subject to any preemptive
rights, rights of first refusal or similar rights.
5.7 Fresh Juice Financial Statements. Fresh Juice has
delivered to Clear Springs and the Selling Shareholders (i) its Annual Report
on Form 10-KSB for the fiscal year ended November 30, 1995, as filed with the
Securities Exchange Commission ("Fresh Juice Form 10-KSB"); and (ii) its
internal monthly financial statements for the quarter ended February 27, 1996
(collectively, the "Fresh Juice Financial Statements"). The foregoing
financial statements have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods indicated,
are complete and correct, and fairly present the financial position and
stockholder's equity of Fresh Juice as of the date and for the respective
periods indicated. Except as set forth on Schedule 5.7 hereto, the balance
sheet as of November 30, 1995 and February 29, 1996, makes full and adequate
provision for all fixed and contingent obligations and liabilities of Fresh
Juice as of the date and for the periods indicated, and as of February 29,
1996, Fresh Juice does not have any fixed obligations or liabilities not
reflected in or adequately reserved against on such balance sheet as of
February 29, 1996, or set forth in the Schedules to this Agreement. To the
knowledge of Fresh Juice, there is no basis for the assertion against Fresh
Juice of any liability or obligation not adequately reflected or reserved
against in such financial statements or set forth in the Schedules to this
Agreement; Fresh Juice has no liabilities, fixed or contingent, which would
adversely affect the conduct of the business of Fresh Juice other than as
reflected or reserved against in the balance sheet of Fresh Juice as of
February 29, 1996, or set forth in the Schedules to this Agreement.
5.8 Certain Changes or Events. Except as set forth in
Schedule 5.8 hereto or in the Fresh Juice Financial Statements since February
29, 1996, Fresh Juice has not:
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(i) experienced any change in its condition (financial or
otherwise), properties, assets, liabilities, business, operations or
prospects other than changes in the ordinary course of business which
have not, individually or in the aggregate, had a material adverse
effect on its properties, assets, business, operations or financial
condition;
(ii) declared, set aside made or paid any dividend or other
distribution in respect of its capital stock or purchased or redeemed,
directly or indirectly, any shares of its capital stock; or
(iii) issued or sold any shares of its capital stock of any
class, or any options, warrants conversion or other rights to purchase
any such shares or any securities convertible into or exchangeable for
such shares.
(iv) incurred any indebtedness for borrowed money (except
borrowings in the ordinary course of business not exceeding $10,000 in
the aggregate) or issued or sold any debt securities;
(v) mortgaged, pledged, or subjected to any lien, lease,
security interest or other charge or encumbrance any of its properties
or assets, tangible or intangible, except (i) liens for current taxes
not due and payable or being contested in good faith by appropriate
proceedings; (ii) liens imposed by law and incurred in the ordinary
course of business for obligations not yet due to carriers,
warehousemen, laborers, materialmen and the like; and (iii)
encumbrances, easements and security interests which do not detract
from the value or interfere with the use of the properties affected
thereby;
(vi) acquired or disposed of any assets or properties of
material value except in the ordinary course of business;
(vii) forgiven or canceled any debts or claims, or waived
any rights, except in the ordinary course of business,
(viii) entered into any material transaction other than in
the ordinary course of business;
(ix) granted to any officer or salaried employee or any
class of other employees any increase in compensation in any form in
excess of the amount thereof in effect as of February 29, 1996, or any
severance or termination pay (other than in amounts consistent with
past practices), or entered into any written employment agreement or
arrangement with any person;
(x) entered into, adopted or amended in any respect any
collective bargaining agreement or adopted or amended any bonus, profit
sharing, compensation, stock option,
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pension, retirement, deferred compensation, insurance or other similar
plan, agreement, trust, fund or arrangement for the benefit of
employees (whether or not legally binding);
(xi) suffered any damage, destruction or loss (whether or
not covered by insurance) which materially adversely affects its
condition (financial or otherwise), properties, assets, business,
operations or prospects;
(xii) suffered any strike or other labor trouble materially
adversely affecting its business, operations or prospects;
(xiii) suffered any loss of employees or customers that
materially adversely affects or could materially adversely affect its
business, operations or prospects; or
(xiv) incurred any liability or obligation (fixed or
contingent) except (A) liabilities and obligations in the ordinary
course of business and (B) other liabilities and obligations not
exceeding $10,000 in the aggregate.
5.9 Title to Properties; Liens. Except as set forth in
Schedule 5.9 attached hereto, Fresh Juice has good and marketable title to, or
valid and subsisting leasehold interests in, all of its properties and assets,
real and personal, in each case free and clear of any mortgage, pledge, lien,
lease, charge, encumbrance, conditional sale or other title retention
agreement, except for the lien of taxes not yet due and payable or being
contested in good faith by appropriate proceedings, and except for such
imperfections of title and encumbrances, if any, as do not detract from the
value, or interfere with the present use, of its properties or assets subject
thereto or affected thereby, or otherwise impair their respective business
operations. There is not under any lease of real or personal property to which
Fresh Juice is a party any existing default or event of default or event which
with notice or lapse of time or both would constitute a default or event of
default.
5.10 Adequacy of Patents and Other Rights. Fresh Juice has
all necessary patents, licenses, trademarks, trade names, copyrights and other
rights that are required to conduct business substantially as now being
conducted and as proposed to be conducted, and no other right, license or
authorization of any kind whatsoever is required to so carry on its business.
There is no infringement or claim of any adverse nature with respect to any
patent, patent application, license trademark, trade name, copyright or right
in any thereof.
5.11 Accounts Receivable. Except as set forth on Schedule
5.11 hereto, the accounts receivable of Fresh Juice as shown on its balance
sheet at February 29, 1996, or thereafter acquired by it, are usual and normal
receivables and, through the continuation of existing collection procedures,
are collectible in the aggregate amounts thereof, after allowance for doubtful
accounts in the amount of the reserve established therefor. To the knowledge
of Fresh Juice, such accounts receivable are subject to no valid defenses or
offsets except routine
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customer complaints or warranty demands of an immaterial nature. An adequate
reserve for doubtful accounts in the ordinary course of business has been
established.
5.12 Inventories. Except as set forth on Schedule 5.12
hereto or in the Fresh Juice Financial Statements, the inventories of Fresh
Juice, shown on its balance sheet at February 29, 1996, or thereafter acquired
by them, consist of items of a quality and quantity usable or salable in the
normal course of its business; the value of all items of obsolete materials and
of materials of below standard quality has been written down to realizable
market value or adequate reserves have been provided therefor; and the values
at which such inventories are carried reflect the normal inventory valuation
policies of Fresh Juice.
5.13 Litigation, etc. Except as set forth in Schedule 5.13
or as disclosed in the Fresh Juice Financial Statements, there are no actions,
suits, proceedings or investigations pending or, to the knowledge of Fresh
Juice, threatened against or affecting Fresh Juice, at law or in equity before
any court, commission, board, bureau, agency, instrumentality or other
governmental authority that may result in any material adverse effect upon the
business, assets, liabilities, prospects or condition (financial or otherwise)
of Fresh Juice or which seems to prevent the consummation of any of the
transactions contemplated by this Agreement. To the knowledge of Fresh Juice,
there are no claims that have not been asserted against it that are probable of
assertion.
5.14 Consents, etc. Except as set forth in Schedule 5.14
hereto, Fresh Juice is not required to obtain any consent, approval, permit or
authorization of any person, including, without limitation, any governmental
agency or regulatory authority, in connection with the execution, delivery,
lawful consummation and performance of this Agreement and the transactions
contemplated thereby, or the consummation of the transactions contemplated
hereby or thereby.
5.15 Compliance with Other Instruments, etc. Except as set
forth in Schedule 5.15 hereto, the execution, delivery and performance of this
Agreement by Fresh Juice does not and will not violate, conflict with, result
in a breach of any provisions of, constitute a default (or an event which, with
or without due notice or lapse of time, or both, would constitute a default)
under, result in the termination of, accelerate the performance required by, or
result in the creation of any lien, security interest, charge or other
encumbrance upon any of the properties or assets of Fresh Juice, under any
provision of its charter or by-laws, or any contract, mortgage, indenture,
lien, license, permit, lease or other agreement or instrument, judgment,
decree, ordinance, regulation or order or any other restriction of any other
kind or character to which Fresh Juice is a party or by which Fresh Juice or
any of its properties, is bound or affected.
5.16 Existing Contracts. Except as set forth in the Fresh
Juice Form 10-KSB and on Schedule 5.16(a), all material contracts, agreements,
leases, licenses and understandings to which Fresh Juice is a party are in full
force and effect and no default, or event which with
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notice or lapse of time or both would constitute a default, exists in respect
thereof on the part of Fresh Juice, or the other parties thereto. Except as set
forth on Schedule 5.16(b) hereto, Fresh Juice is not a party to and does not
have any obligation, contingent or otherwise, under any (i) written or oral
contract not made in the ordinary course of business in excess of $50,000; (ii)
employment contract or contract with or for the benefit, directly or
indirectly, of any officer, director, shareholder or partner other than Smith;
(iii) collective bargaining agreement with employees; (iv) bonus, pension,
profit-sharing, retirement, stock purchase, hospitalization, insurance or other
plan providing employee benefits; (v) lease with respect to any property, real
or personal, whether as lessor or lessee other than its current corporate
headquarters and warehouse; (vi) contract for the purchase of materials,
supplies or equipment, or the provision by Fresh Juice of goods or services,
for an aggregate price in excess of $25,000; (vii) contract or commitment for
capital expenditures in excess of $25,000 in the aggregate; (viii) contract
continuing over a period of more than one year from its date in excess of
$50,000; (ix) mortgage, loan or credit agreement; (x) contract requiring
consent to the transactions contemplated by this Agreement; (xi) guaranty of
the obligations of any other person; or (xii) any other material contact,
agreement or understanding.
5.17 Undocumented Liabilities. Except as set forth in the
financial statements referred to in Section 5.7 hereof and except for property
owned by customers and stored upon the premises of Fresh Juice for use in
future orders of such customers, of which Fresh Juice is aware, Fresh Juice
does not have any liabilities, contingent or otherwise, that are not disclosed
in the Fresh Juice Financial Statements, including, without limitation, tax
liabilities due or to become due, whether disputed or not, except such
liabilities as have been incurred in the ordinary course of business.
5.18 Taxes. Fresh Juice has filed all tax returns which
are required to be filed, and has paid all taxes which have become due,
pursuant to such returns or pursuant to any assessment received by Fresh Juice.
Fresh Juice has made adequate provision for all taxes due with respect to all
periods as to which a return has not yet been filed. There is no tax deficiency
proposed or threatened against Fresh Juice and no tax returns of Fresh Juice
are under examination or audit.
5.19 Employee Matters. Fresh Juice has withheld all
amounts required by law or contract to be withheld from the wages or salaries
of its employees and is not liable for any arrears or wages or any taxes or
penalties for failure to comply with any of the foregoing or for payment to any
trust or other fund compensation, social security or other benefits for
employees. To its knowledge, Fresh Juice has not engaged in any unfair labor
practice or discriminated on the basis of race, age, sex or otherwise in its
employment conditions or practices with respect to its employees. There are no
unfair labor practice or race, age, sex or other discrimination complaints
pending, or, to the knowledge of Fresh Juice, threatened against Fresh Juice by
any employee before any domestic (federal, state or local) or foreign board,
department, commission or agency nor, to the knowledge of Fresh Juice, does any
basis therefore exist. There are no existing or, to the knowledge of Fresh
Juice threatened, labor strikes, disputes, grievances,
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controversies or other labor troubles affecting the business of Fresh Juice.
There are not pending or, to the knowledge of Fresh Juice, threatened
representation questions respecting any employees.
5.20 Miscellaneous. Fresh Juice:
(i) is in substantial compliance with all applicable
federal, state and local statutes, codes, ordinances, rules or
regulations; Fresh Juice has not received any notice of violation of
any law, order, regulation or requirements relating to the operation of
its business or the ownership of its property;
(ii) does not have, as of February 29, 1996, any unfunded
costs or obligations in respect of employee benefit plans and does not
have unpaid premiums on health, accident, disability or any other
insured employee benefits;
(iii) has not, since February 29, 1996, permitted any option
to renew any lease or any option to purchase any property to expire
unexercised, in whole or in part;
(iv) has made no express warranty to any person or entity
with respect to any product it manufactures or sells or has
manufactured or sold and has not made or agreed to make any
indemnification payment, or replacement with respect to any product
warranty claim, except for the warranties of which true and correct
copies have been delivered to Clear Springs and the warranties
applicable under the Uniform Commercial Code as in effect from time to
time in the State of New York.
5.21 Collective Bargaining Agreement. Fresh Juice is not
now nor ever has been a party to or bound by any collective bargaining
agreement or union contact which covers or covered its employees.
5.22 Tax-Free Reorganization. Neither Fresh Juice or any
of its subsidiaries has taken or agreed to take any action or has knowledge of
any fact or circumstance that would prevent the Merger transaction contemplated
herein from qualifying as a tax-free reorganization within the meaning of
Section 368 of the Internal Revenue Code of 1986, as amended.
5.23 No Right of Setoff. As of the date hereof, none of
the Selling Stockholders is indebted to Fresh Juice for any monies and Fresh
Juice has no right of setoff with respect to any amounts due to the Selling
Stockholders from Fresh Juice.
5.24 SEC Documents. Fresh Juice has made available to Clear
Springs (or, with respect to documents filed subsequent to the date of this
Agreement, will make available to Clear Springs) a true and complete copy of
each report, schedule, registration statement and definitive
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proxy statement filed by Fresh Juice with the SEC since January 1, 1993 (such
documents, as amended since the time of their filing, being referred to herein
as the "Fresh Juice SEC Documents"), which are all the documents (other than
preliminary material) that Fresh Juice was required to file with the SEC since
such date. As of their respective dates, the Fresh Juice SEC Documents
complied or will comply in all material respects with the requirements of the
Securities Act of 1933, as amended (the "Securities Act") or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as the case may be, and
the rules and regulations of the SEC thereunder applicable to such Fresh Juice
SEC Documents, and none of the Fresh Juice SEC Documents contained or will
contain any untrue statement of a material fact or omitted or will omit to
state a 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; provided that disclosures as of a later date shall be deemed to
modify disclosures of an earlier date. The financial statements of Fresh Juice
included in the Fresh Juice SEC Documents filed and to be filed subsequent to
November 30, 1995, comply and will comply in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC and with respect thereto, have been and will be 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 or, in the case of unaudited statements, as permitted by Form
10-Q of the SEC) and fairly present and will fairly present (subject, in the
case of the unaudited statements, to recurring audit adjustments normal in
nature and amount) the consolidated financial position of Fresh Juice as at the
dates thereof and the consolidated results of its operations and cash flows or
changes in financial position for the periods then ended.
5.25 Insurance. Fresh Juice maintains such policies of
insurance in such coverage amounts and for such risks as are generally
maintained by companies in the same industry with similar sales volume. As of
the date hereof, neither Fresh Juice nor any of its Subsidiaries has received
any notice of cancellation or notice of a material amendment of any such
insurance policy or bond or is in default under such policy or bond, no
coverage thereunder is being disputed and all material claims thereunder have
been filed in a timely fashion. All pending material claims under such
policies or bonds are disclosed in this Agreement or the Schedules hereto.
5.26 Environmental Matters. Except as disclosed on Schedule
5.26 hereto neither Fresh Juice nor any of its Subsidiaries has received any
written notice, citation, claim, assessment, proposed assessment or demand for
abatement alleging that Fresh Juice or any of its Subsidiaries (either directly
or as a successor-in-interest in connection with the enforcement of remedies to
realize the value of properties serving as collateral for outstanding loans) is
responsible for the correction or clean-up of any condition material to the
business, operations, assets or financial condition of Fresh Juice or its
Subsidiaries. Except as disclosed on Schedule 5.26, Fresh Juice has no
knowledge that any toxic or hazardous substances or materials have been
emitted, generated, disposed of or stored on any property owned or leased by
Fresh Juice or any of its Subsidiaries in any manner that violates or, after
the lapse of time may violate, any
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presently existing federal, state or local law or regulation governing or
pertaining to such substances and materials.
5.27 No Liquidation of Assets. Fresh Juice, represents
that it has no present plan or intention to liquidate, or cause the liquidation
of, Clear Springs or to dispose of or cause the disposition of substantially
all of its assets prior to the merger, or to dispose of or cause the
disposition of substantially all of the assets formerly owned by Clear Springs
after the Merger.
ARTICLE 6
CONDITIONS TO BE SATISFIED AT OR PRIOR TO CLOSING
6.1 Unless otherwise waived by Fresh Juice and Merger Sub,
the following conditions shall be fulfilled by Clear Springs and/or the Selling
Shareholders on or before the Closing Date:
(a) Resignation of Officers of Clear Springs. Fresh Juice
shall have received, in writing, the resignations, effective as of the Closing
Date, of the following directors or officers of Clear Springs which individuals
constitute all of Clear Spring's directors and officers:
(i) President, Brian Duffy
(ii) Secretary and Treasurer, Steven Bogen
(b) Permits, Approvals, Litigation, etc. Clear Springs
and the Selling Stockholders shall have obtained, in form and substance
reasonably satisfactory to Fresh Juice and its counsel, all consents, permits,
releases and waivers from third parties that may be required in connection with
the performance of their respective obligations under this Agreement and the
consummation of the transactions contemplated hereby.
(c) Accuracy of Representations and Warranties and
Performance of Obligations. Clear Springs and the Selling Stockholders shall
have each executed and delivered to Fresh Juice and Merger Sub a certificate in
which they certify that (i) all representations and warranties of Clear Springs
and the Selling Stockholders contained in this Agreement are true and accurate
as of the Closing Date; and (ii) the Selling Stockholders and Clear Springs
have duly observed all covenants and duly performed all obligations to be
observed or performed by them under the Agreement on or before the Closing
Date.
(d) Merger. All requirements of law necessary to effect
the Merger shall have been completed, other than the filing of the appropriate
Certificates of Merger with the Secretary of State's office for each of the
State of Delaware and Florida.
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(e) No Violation of Law, etc. There shall be no law and
no order shall have been entered and not vacated by a court of competent
jurisdiction which enjoins, restrains, makes illegal or otherwise prohibits
consummation of the transactions contemplated by this Agreement.
(f) Delivery of Clear Springs Stock/ or Cancellation. The
Selling Stockholders shall deliver to Fresh Juice certificates representing the
shares of Clear Springs Stock set forth in Schedule 3.7 marked for
cancellation.
6.2 Unless otherwise waived by Clear Springs and the
Selling Stockholders, the following conditions shall be fulfilled by Fresh
Juice and/or Merger Sub on or before the Closing Date:
(a) Permits, Approvals, Litigation, etc. Fresh Juice and
Merger Sub shall have obtained, in form and substance reasonably satisfactory
to Clear Springs and its counsel, all consents, permits, releases and waivers
from third parties that may be required in connection with the performance of
their respective obligations under this Agreement.
(b) Accuracy of Representations and Warranties and
Performance of Obligations. Fresh Juice and Merger Sub shall each have
executed and delivered to Clear Springs and the Selling Stockholders a
certificate in which they each certify that (i) all the representations and
warranties of Fresh Juice and Merger Sub contained in this Agreement are true
and accurate as of the Closing Date; and (ii) Fresh Juice and Merger Sub have
duly observed all covenants and duly performed all obligations to be observed
or performed by them hereunder on or before the Closing Date.
(c) Increase of Authorized Shares of Fresh Juice Common.
The Shareholders of Fresh Juice shall affirmatively vote to amend the
Certificate of Incorporation of Fresh Juice to increase the number of
authorized shares of Fresh Juice from 5,000,000 Fresh Juice Common and 200,000
preferred to 20,000,000 shares of common stock and 7,000,000 shares of
preferred stock.
(d) Delivery of Fresh Juice Common Certificates. Fresh
Juice shall have delivered to the Selling Stockholders the stock certificates
evidencing The Fresh Juice Common described in Section 1.6(b)(ii).
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ARTICLE 7
COVENANTS
7.1 Covenants of Fresh Juice. If permitted by applicable
federal and state law, Fresh Juice shall account for and treat the Merger for
tax purposes as a tax-free reorganization pursuant to Section 368(a)(2)(E) of
the Internal Revenue Code of 1986, as amended.
7.2 Interim Period Covenants of Clear Springs. Except as
expressly contemplated by this Agreement or except as set forth on Schedule 7.2
or except with the express prior written approval of Fresh Juice and Merger
Sub, which shall not be unreasonably withheld, Clear Springs shall not:
(i) amend its charter or by-laws;
(ii) issue or agree to issue (by the issuance or
granting of options, warrants or rights to purchase stock or
otherwise) any shares of capital stock, any securities
exchangeable for or convertible into its capital stock, or any
other securities;
(iii) split, combine or reclassify any shares of
its capital stock or declare, set aside or pay any dividends
or make any other distributions (whether in cash, stock or
other property) in respect of its capital stock or purchase or
redeem any of its capital stock;
(iv) except as contemplated by Schedule 7.2, enter
into any contract, agreement, undertaking or commitment, or
take any other action which would have been required to be set
forth in Schedule 7.2 if taken or in effect on the date
hereof;
(v) delay payment of any account payable or other
liability in excess of $15,000 individually, or $40,000 in the
aggregate, beyond its due date or the date when such liability
would have been paid in the ordinary course of business
consistent with past practice;
(vi) acquire (by merger, consolidation or
acquisition of stock or assets) any corporation, partnership
or other business organization or division thereof, or make
any investment, either by purchase of stock or securities or
contribution of capital in an other entity or person;
(vii) except for prior obligations disclosed on any
Schedule hereto, increase the compensation or benefits,
payable or to become payable to any directors, officers or
employees after the date hereof or take any action with
31
<PAGE> 33
respect to the grant or increase of severance or termination
pay payable after the date hereof;
(viii) except as required by law or the terms thereof,
institute any increase in or otherwise amend any profit
sharing, incentive, deferred compensation, insurance,
retirement, medical, disability, welfare or other employee
benefit plan, agreement, trust or fund;
(ix) enter into any contract for the purchase or
sale of real estate;
(x) enter into any lease that involves payment by
Clear Springs in excess of $25,000 individually, or $75,000 in
the aggregate, in any year or that has a duration in excess of
three years;
(xi) enter into any negotiation or transaction
relating to the merger or consolidation of, the sale of any
shares of capital stock of, Clear Springs, or the sale, lease
or other disposition of any substantial portion of the
properties or business of Clear Springs;
(xii) make any material changes in the commissions
or other incentives payable to its sales staff;
(xiii) pay any salary to Steven Bogen or Daniel Petry
without the approval of the Fresh Juice Board of Directors.
(xiv) agree or commit to do or authorize any of the
foregoing.
7.3 Interim Period Covenants of Fresh Juice and Merger
Sub. Except as expressly contemplated by this Agreement or except as set forth
on Schedule 7.3 or except with the express prior written approval of Clear
Springs, which shall not be unreasonably withheld, Fresh Juice and Merger Sub
each shall not:
(i) amend its charter or by-laws;
(ii) issue or agree to issue (by the issuance or
granting of options, warrants or rights to purchase stock or
otherwise) any shares of capital stock, any securities
exchangeable for or convertible into its capital stock, or any
other securities;
(iii) split, combine or reclassify any shares of
its capital stock or declare, set aside or pay any dividends
or make any other distributions (whether in cash, stock or
other property) in respect of its capital stock or purchase or
redeem any of its capital stock;
32
<PAGE> 34
(iv) enter into any contract, agreement,
undertaking or commitment, or take any other action which
would have been required to be set forth in Schedule 7.3 if
taken or in effect on the date hereof;
(v) delay payment of any account payable or other
liability in excess of $15,000 individually, or $40,000 in the
aggregate, beyond its due date or the date when such liability
would have been paid in the ordinary course of business
consistent with past practice;
(vi) acquire (by merger, consolidation or
acquisition of stock or assets) any corporation, partnership
or other business organization or division thereof, or make
any investment, either by purchase of stock or securities or
contribution of capital in an other entity or person;
(vii) except for prior obligations disclosed on any
Schedule hereto, increase the compensation or benefits,
payable or to become payable to any directors, officers or
employees after the date hereof or take any action with
respect to the grant or increase of severance or termination
pay payable after the date hereof;
(viii) except as required by law or the terms thereof,
institute any increase in or otherwise amend any profit
sharing, incentive, deferred compensation, insurance,
retirement, medical, disability, welfare or other employee
benefit plan, agreement, trust or fund;
(ix) enter into any contract for the purchase or
sale of real estate;
(x) enter into any lease that involves payment by
Fresh Juice or Merger Sub in excess of $25,000 individually,
or $75,000 in the aggregate, in any year or that has a
duration in excess of three years;
(xi) enter into any negotiation or transaction
relating to the merger or consolidation of, the sale of any
shares of capital stock of, Fresh Juice or Merger Sub, or the
sale, lease or other disposition of any substantial portion of
the properties or business of Fresh Juice or Merger Sub;
(xii) make any material changes in the commissions
or other incentives payable to its sales staff;
(xiii) agree or commit to do or authorize any of the
foregoing.
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<PAGE> 35
7.4 Mutual Covenants.
(a) Prior to the Closing Date, except as
otherwise provided for herein, each of Clear Springs, Fresh Juice and Merger
Sub covenants to the other parties that it will (A) operate its business only
in the usual, regular and ordinary manner and, to the extent consistent with
such operation, will use its best efforts to (i) preserve its present business
organization intact, (ii) keep available the services of its officers and
employees, and (iii) preserve its present relationships with persons having
business dealings with it, and (B) maintain its properties in customary repair,
order and condition, reasonable wear and use and damage by fire or unavoidable
casualty except and to maintain adequate insurance upon all of its properties,
at least in such amounts and of such kinds comparable to that in effect as of
the date hereof.
(b) After the Closing Date, Clear Springs, the
Selling Stockholders, Fresh Juice and Fresh Juice Florida, shall not (1)
liquidate, or cause a liquidation of, Clear Springs, or dispose of, or cause
the disposition of, substantially all of its assets prior to the merger; or (2)
dispose of, or cause the disposition of, substantially all of the assets
formerly owned by Clear Springs after the merger in any manner which would
adversely affect the tax-free nature of the Merger.
ARTICLE 8
INDEMNIFICATION
8.1 Indemnification by the Selling Stockholders and Clear
Springs.
(a) Each of the Selling Stockholders and Clear Springs
agrees subsequent to the Closing to indemnify and hold each of Fresh Juice and
Merger Sub and their respective shareholders, subsidiaries, representatives and
affiliates and persons serving as officers, directors, partners, employees or
agents thereof harmless from and against any damages, liabilities, losses,
taxes, fines, penalties, costs, and expenses (including, without limitation,
reasonable fees of counsel) of any kind or nature whatsoever (whether or not
arising out of third-party claims and including all amounts paid in
investigation, defense or settlement of the foregoing pursuant to this Section
8.1) which may be sustained or suffered by any of them arising out of or based
upon any of the following matters:
(i) fraud, intentional misrepresentation or a
deliberate or willful breach by any of the Selling Stockholders or Clear
Springs of any of their respective representations, warranties or covenants
under this Agreement; or
(ii) any other material breach of any
representation, warranty or covenant of the Selling Stockholders or Clear
Springs under this Agreement or in any certificate delivered by any of the
Selling Stockholders or Clear Springs hereunder, or by reason of any material
claim, action or proceeding asserted or instituted growing out of any matter or
thing
34
<PAGE> 36
constituting a material breach of such representations, warranties or
covenants, provided, however, that any claims for indemnification pursuant to
this subsection (ii) shall be limited to the sum of the dollar value of the
Merger Consideration as of the date hereof (with such indemnification to be
paid in shares of Fresh Juice Common with a per share credit equal to the
greater of the per share price on the date of the receipt by the indemnifying
party of a notice of the claim or the Closing Date); provided, further,
however, that there shall be no limitation in claims for indemnification
related to Sections 3.4, 3.6, 3.7, 3.19 and 3.26 hereof.
(b) Other than as provided by law, this Section 9 contains
the sole remedies of the parties hereto with respect to claims arising from the
subject matter of this Section 9.
8.2 Indemnification by Fresh Juice and Merger Sub. (a)
Fresh Juice and Merger Sub agree to indemnify and hold Clear Springs and each
of the Selling Stockholders and their respective shareholders, subsidiaries,
representatives and affiliates and persons serving as officers, directors,
partners, employees or agents thereof harmless from and against any damages,
liabilities, losses, taxes, fines, penalties, costs, and expenses (including,
without limitation, reasonable fees of counsel) of any kind or nature
whatsoever (whether or not arising out of third-party claims and including all
amounts paid in investigation, defense or settlement of the foregoing pursuant
to this Section 8.2) which may be sustained or suffered by any of them arising
out of or based upon any of the following matters:
(i) fraud, intentional misrepresentation or a
deliberate or willful breach by Fresh Juice or Merger Sub of any of their
representations, warranties or covenants under this Agreement; or
(ii) any other breach of any representation,
warrant or covenant of Fresh Juice or Merger Sub under this Agreement or in any
certificate delivered by Fresh Juice or Merger Sub hereunder, or by reason of
any claim, action or proceeding asserted or instituted growing out of any
matter or thing constituting a breach of such representations, warranties or
covenants; provided, however, that any claims for indemnification pursuant to
this subsection (b) shall be limited to the sum of the dollar value of the
Merger Consideration as of the date hereof, provided, further, however, that
there shall be no limitation in claims for indemnification related to Sections
5.4, 5.6, 5.18 and 5.26 hereof.
(b) Other than as provided by law, this Section 9 contains
the sole remedies of the parties hereto with respect to claims arising from the
subject matter of this Section 8.
(c) Notwithstanding anything to the contrary contained in
this Section 8.2 neither Fresh Juice nor Merger Sub shall be required to
indemnify, or shall be held liable for any damages, liabilities, losses, taxes,
penalties, costs or expenses (including, without limitation, reasonable fees of
counsel) of any kind or nature whatsoever to any of the Selling Shareholders in
the event the Merger is not accounted for, and so treated, as a tax-free
reorganization pursuant to Section 368(a)(2)(E) of the Internal Revenue Code of
1986, as amended, if Fresh Juice
35
<PAGE> 37
determines in good faith that it is unable in accordance with applicable
federal or state law to so account for, and so treat, the Merger for tax
purposes as provided for in Section 9.1 hereof.
8.3 Notice; Defense of Claims. Promptly after receipt by
an indemnified party of notice of any claim, liability or expense to which the
indemnification obligations hereunder would apply, the indemnified party shall
give notice thereof in writing to the indemnifying party, but the omission to
so notify the indemnifying party promptly will not relieve the indemnifying
party from any liability except to the extent that the indemnifying party shall
have been prejudiced as a result of the failure or delay in giving such notice.
Such notice shall state the information then available regarding the amount and
nature of such claim, liability or expense and shall specify the provision or
provisions of this Agreement under which the Liability or obligation is
asserted. If within twenty (20) days after receiving such notice the
indemnifying party gives written notice to the indemnified party stating that
it disputes and intends to defend against such claim, liability or expense at
its own cost and expense, then counsel for the defense shall be selected by the
indemnifying party (subject to the consent of the indemnified party which
consent shall not be unreasonably withheld) and the indemnified party, shall
make no payment on such claim, liability or expense as long as the indemnifying
party is conducting a good faith and diligent defense. Notwithstanding
anything herein stated, the indemnified party shall at all times have the right
to fully participate in such defense at its own expense directly or through
counsel; provided, however, if the named parties to the action or proceeding
include both the indemnifying party, and the indemnified party and
representation of both parties by the same counsel would be inappropriate under
applicable standards of professional conduct, the expense of separate counsel
for the indemnified party shall be paid by the indemnifying party. If no such
notice of intent to dispute and defend is given by the indemnifying party, or
if such diligent good faith defense is not being or ceases to be conducted, the
indemnified party, shall, at the expense of the indemnifying party, undertake
the defense of such claim, liability or expense (with counsel selected by the
indemnified party), and shall have the right to compromise or settle the same
(exercising reasonable business judgment). If such claim, liability or expense
is one that by its nature cannot be defended solely by the indemnifying party,
then the indemnified party shall make available all information and assistance
that the indemnifying party may reasonably request and shall cooperate with the
indemnifying party in such defense, provided that the indemnifying party
reimburses the indemnified party for its reasonable cost and expenses incurred
in connection therewith.
8.4 Indemnification of Bogen and Duffy Guarantees. Fresh
Juice shall, as of the Effective Date and at all times subsequent thereto,
indemnify and hold harmless Steven Bogen and Brian Duffy against any and all
liabilities and obligations arising out of the personal guarantees which Bogen
and Duffy have executed in favor of SouthTrust Bank.
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<PAGE> 38
ARTICLE 9
TERMINATION
9.1 Termination. This Agreement may be terminated at any
time prior to the Closing Date:
(a) by mutual consent of the parties hereto;
(b) by any of the parties hereto, if a foreign or domestic
court of competent jurisdiction or domestic governmental, regulatory or
administrative agency or commission shall have issued an order, decree or
ruling (other than an ex-parte order or temporary restraining order) or taken
any other action, in each case restraining, enjoining or otherwise prohibiting
the transactions contemplated by the Agreement; provided, however, that if
Clear Springs, Fresh Juice, Merger Sub or Steven Smith are the plaintiff in the
action resulting in such order, decree or ruling or are the entity which
instigated or initiated the action resulting in such order, decree or ruling,
such order, decree or ruling shall not serve as a basis for such party or its
subsidiary or affiliate(s) to terminate this Agreement;
ARTICLE 10
GENERAL
10.1 Expenses. Whether or not the Closing occurs, all
costs and expenses in connection with the negotiations and preparations with
respect to this Agreement and the transactions contemplated thereby will be
borne by the party incurring such cost or expense.
10.2 Publicity. So long as this Agreement is in effect,
none of the parties hereto shall, or permit any of their representatives or
affiliates to, issue or cause the publication or dissemination of any press
release with respect to this Agreement or any of the transactions contemplated
hereby, except with the agreement of the other parties hereto; provided that
any party hereto or any affiliate thereof may make such an announcement without
the agreement of the other parties if required by law or by the rules of any
exchange on which their securities are traded.
10.3 Execution in Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same document.
10.4 Notices. All notices and other communications which
are required or may be given under this Agreement shall be in writing and shall
be deemed to have been duly given when (i) delivered in person, (ii) by
facsimile transmission, upon receipt, (iii) one business day after having been
sent by overnight courier, or (iv) five (5) days after being mailed by
registered
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<PAGE> 39
or certified first class mail, postage prepaid, return receipt requested, to
the parties hereto at the following addresses:
If to Fresh Juice or Merger Sub, addressed to such party, care
of:
The Fresh Juice Company, Inc.
350 Northern Boulevard
Great Neck, New York 11021
Attention: Steven Smith
Facsimile No.: (516-482-5453)
If to any Selling Stockholder or Clear Springs, addressed to such party, care
of:
Clear Springs Citrus, Inc.
35 Walnut Avenue
Clark, New Jersey 07066
Attention: Steven M. Bogen
Facsimile No. (908) 388-2954
with a copy to: Bourne, Noll & Kenyon
382 Springfield Avenue
Summit, New Jersey 07901
Attn: Craig M. Lessner, Esq.
Facsimile No. (908) 277-6808
and a copy to: Honigman Miller Schwartz and Cohn
390 N. Orange Avenue, Suite 1300
Orlando, Florida 32801
Attention: David S. Oliver, Esq.
Facsimile No. (407) 648-1155
and a copy to: Carmen Catino, Esq.
Law Office of Carmen A. Catino
5801 North Northwest Highway
Chicago, Illinois 60631
Facsimile No. 1-312-792-5411
10.5 Waivers. No waiver of any term, covenant or condition
of this Agreement shall be effective unless made in a written instrument duly
executed by or on behalf of the party entitled to the benefits thereof.
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<PAGE> 40
10.6 Amendments. The parties may agree to the amendment or
modification of this Agreement solely by an agreement in writing executed by or
on behalf of each of the parties hereto.
10.7 Successors and Assigns. This Agreement binds, inures
to the benefit of, and is enforceable by the successors and assigns of the
parties hereto, and does not confer any right on any other persons or entities.
10.8 GOVERNING LAW. THE EXECUTION, VALIDITY, CONSTRUCTION
AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA, WITHOUT REGARD TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF.
10.9 Submission to Jurisdiction.
(a) In the event Clear Springs or any of the Selling
Stockholders shall commence any legal proceeding with respect to this
Agreement, each of them agrees to submit themselves to the jurisdiction of the
courts of the Florida and the United States District Court for the Middle
District of Florida for the resolution of any dispute in connection with or
arising out of this Agreement and the transactions contemplated hereunder
(b) In the event any of Fresh Juice or Merger Sub shall
commence any legal proceeding with respect to this Agreement, each of them
agrees to submit themselves to the jurisdiction of the courts of the State of
Florida and the United States District Court for the jurisdiction covering the
Middle District of Florida for the resolution of any dispute in connection with
or arising out of this Agreement and the transactions contemplated hereunder.
10.10 No Broker. Each of the parties hereto represents and
warrants to each of the other parties that all negotiations with respect to
this Agreement and the transactions contemplated hereby have been conducted by
the parties directly with each other without the intervention or aid of any
person in such manner as to give rise to any valid claim against any of the
parties hereto for a brokerage commission or other like payment.
10.11 No Other Inducement. No representation, promise or
inducement has been made by either party that is not embodied in this
Agreement, and neither party shall be bound by or liable for any alleged
representation, promise or inducement not so set forth.
10.12 Captions. The captions of this Agreement are for
convenience of reference only and shall not affect in any manner any of the
terms, covenants or conditions hereof.
10.13 Survival of Representations, Warranties and Agreements.
The representations, warranties, agreements, covenants and obligations set
forth in this Agreement
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<PAGE> 41
or in any schedule, exhibit or certificate delivered by any party hereto to any
other party hereto in connection with this Agreement or the transactions
contemplated hereby shall survive until June 30, 1996; provided, however, that
the representations and warranties contained in Sections 3.4, 3.6, 3.7, 3.19,
3.26, 5.4, 5.6, 5.18 & 5.26 hereof shall survive for a period of one (1) year
from the date hereof and any party aggrieved by such breach of any
representation or warranty shall institute suit not later than two (2) years
from the Effective Time and their claim shall be waived if suit is not
instituted by such date.
10.14 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force ant effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
extent possible.
10.15 Entire Agreement. This Agreement is complete and
constitutes the entire agreement and supersedes any and all other prior
agreements and undertakings, both written and oral, among the parties, or any
of them, with respect to the subject matter hereof and, except as otherwise
expressly provided herein, is not intended to confer upon any other person any
rights or remedies hereunder.
10.16 Assignment. This Agreement and the right and
obligations hereunder shall not be assigned or otherwise transferred, except
that Merger Sub may assign all or any of its rights and obligations hereunder
to any wholly-owned subsidiary of Fresh Juice.
10.17 No Third Party Beneficiary. Nothing in this Agreement
shall confer upon any person or entity not a party hereto, or the legal
representatives of such person or entity, any rights or remedies of any nature
or kind whatsoever under or by reason of this Agreement.
IN WITNESS WHEREOF, the partes hereto have caused this
Agreement to be duly executed pursuant to due authorization on the date first
above written.
THE FRESH JUICE COMPANY, INC.
By: /s/ Steven Smith
-----------------------------------------
Steven Smith, Chief Executive Officer
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<PAGE> 42
THE FRESH JUICE COMPANY OF FLORIDA,
INC.
By: /s/ Steven Smith
-----------------------------------------
Steven Smith, Chief Executive Officer
CLEAR SPRINGS CITRUS, INC.
By: /s/ Brian Duffy
-----------------------------------------
Brian Duffy, President
THE BOGEN GROUP, L.L.C.
By: /s/ Steven M. Bogen
-----------------------------------------
Steven M. Bogen, Managing Member
/s/ Brian Duffy
---------------------------------------------
Brian Duffy, individually
41
<PAGE> 43
SCHEDULE 1.5(c)
LIST OF OFFICERS OF THE SURVIVING CORPORATION
Steve Smith President and Assistant Secretary
Steven M. Bogen Chief Executive Officer and Secretary
Mark Feldman Treasurer
<PAGE> 44
SCHEDULE 2.1(b)
CONFLICTS WITH EXISTING AGREEMENTS OF CLEAR SPRINGS
1. The Merger Agreement conflict with Section 5.4 of the Loan
Agreement dated 10/26/95 between Clear Springs and SouthTrust Bank of Orlando.
2. The Merger Agreement accelerates certain obligations of Clear
Springs under the Agreement and Release executed by Clear Springs and H. Stuart
Hall (among others) in March of 1994.
<PAGE> 45
SCHEDULE 2.4
AFFILIATE CONTRACTS
1. See Schedule 2.5; the agreements set forth in paragraphs 1
through 8 of Schedule 2.5 constitute agreements required to be disclosed
pursuant to Section 2.4.
2. That certain Agreement and Release executed in March of 1994
by and between Clear Springs and H. Stuart Hall (among others).
<PAGE> 46
SCHEDULE 2.5
CLEAR SPRINGS SHAREHOLDER OPTIONS, WARRANTS OR RIGHTS
ALL ITEMS DISCLOSED ON ANY SCHEDULE SHALL BE DEEMED DISCLOSED ON ALL
SCHEDULES TO THIS AGREEMENT.
THE FRESH JUICE COMPANY, INC. IS CHARGED WITH KNOWLEDGE OF ALL
AGREEMENTS TO WHICH IT IS A PARTY.
Clear Springs
1. Shareholders Agreement dated January 22, 1993.
2. Addendum to Purchase and Shareholder Agreement dated January
22, 1993.
3. Agreement Between Shareholders dated April 28, 1994, between
Steve Bogen and Brian Duffy shall each have a right of first refusal relative
to the sale/purchase of the shares of capital stock of Clear Springs owned by
each.
4. Clear Springs Shareholders' Agreement dated August 24, 1994,
among Bogen, Rountree and Petry (annexed hereto) pursuant to which one share of
Petry's Clear Springs Stock has been reallocated one-third to Bogen, one-third
to Rountree and one-third to Petry to be consistent with the parties' intent
that together Bogen, Rountree and Petry were to own and control 42.5% of the
shares of Clear Springs in the aggregate and exactly one-third of that amount
each.
5. Shareholders' Agreement dated 8/2/95 among Clear Springs,
Duffy and the Bogen Group, LLC.
6. Agreement Amending the Stock Purchase Agreement dated August
2, 1995.
7. Redemption Agreement dated March 11, 1996, wherein Clear
Springs redeemed 178.49848 shares of Common Stock from Duffy.
8. Clear Springs has an obligation to make a minimum annual
distribution to its shareholders equal to the tax liability of such
shareholders resulting from Clear Springs' prior year's income and its
Subchapter S corporation status during the prior year. Fresh Juice
acknowledges that Clear Springs shall make or be permitted to make a
distribution to Brian Duffy and the Bogen Group to satisfy the above-described
obligation at, prior to, or following closing of the transactions contemplated
in the Agreement unless satisfactory alternate arrangements have been made. In
addition, to the extent Clear Springs' income for any year is increased as a
result of any adjustments made as a result of any audit performed by any taxing
authority or outside auditors, Clear Springs shall be obligated to meet its
obligation by making distributions based on the higher income figures. Fresh
Juice acknowledges and consents to Clear Springs meeting this obligation.
<PAGE> 47
9. Clear Springs has a "Groupmed $15 Gold Piece" medical and
hospitalization plan for its salaried employees through American Medical
Security.
<PAGE> 48
SCHEDULE 3.1
SUBSIDIARIES OR AFFILIATES OF CLEAR SPRINGS
NONE
<PAGE> 49
SCHEDULE 3.6
CLEAR SPRINGS OPTIONS, WARRANTS AND RIGHTS
NONE
<PAGE> 50
SCHEDULE 3.8(a)
CLEAR SPRINGS BALANCE SHEET DATED 12/31/95
<PAGE> 51
SCHEDULE 3.9
CHANGES IN BALANCE SHEET OF CLEAR SPRINGS SINCE 2/29/96
1. Non-interest bearing Note in favor of Brian Duffy dated
3/11/96 in the original principal amount of $68,000.
<PAGE> 52
SCHEDULE 3.10
LIENS AGAINST CLEAR SPRINGS PROPERTY
AND LEASES CURRENTLY IN DEFAULT
1. Clear Springs is the maker on the following promissory notes
which are secured by the following personal property:
<TABLE>
<S> <C> <C>
330/NOTE PAYABLE - REVOLVING NOTE / SOUTHTRUST BANK:
First lien on all accounts receivable and books and
records pertaining thereto, and proceeds therefrom,
now owned and hereafter acquired.
384/NOTE PAYABLE - BUSINESS CREDIT LEASING #2:
Videoject Printer - Maxum SSC
386/NOTE PAYABLE - FORD MOTOR CREDIT:
1989 Ford Truck Model LT8000
387/NOTE PAYABLE - CITICORP:
1993 Barrett WP40 Forklift
388/NOTE PAYABLE - ORIX CREDIT ALLIANCE:
1988 Yard Dog Model TJ4000
390/NOTE PAYABLE - CITICORP #2:
1987 Nissan Forklift
391/NOTE PAYABLE - ASSOCIATES LEASING, INC.:
1994 Barrett WP40 Pallet Jack
392/NOTE PAYABLE - A T & T LEASING #1:
Computer equipment & Accpac software
393/NOTE PAYABLE - A T & T LEASING #2:
Merlin Legend phone system
</TABLE>
None of these leases are currently in default.
2. Clear Springs has entered into Lease Agreements with Robert H.
Freeman, Robert H. Freeman, Trust, and Harriette W. Grimes and Larry Grimes,
for real property located in Winter Garden, Florida, used in conjunction with
Clear Springs' business operation. Pursuant to Chapter 83, Florida Statutes,
in the event that Clear Springs defaults under its obligations under any such
lease, the landlord under any such lease has a lien against all property of the
tenant located on the premises, at the time of default in an amount equal to
any unpaid rent
<PAGE> 53
under the terms of the leases. As of the date of closing of this transaction,
Clears Springs is in compliance with each and every lease referenced
hereinabove, and no default has been declared.
Clear Springs is current on its payment obligations under all of its
leases of real property. Annexed hereto is a copy of separate Lease Agreements
relating to Clear Springs' office and warehouse premises located at 76 8th
Street, Winter Garden, Florida, 522 E. Bay Street, Winter Garden, Florida and
700 E. Bay Street, Winter Garden, Florida. The leases relative to 522 and 700
E. Bay Street have expired and Clear Springs occupies such premises on a
month-to-month basis. The third lease, for the premises at 76 8th Street is
current and expires 12/31/98.
<PAGE> 54
SCHEDULE 3.11
CLEAR SPRINGS' PATENTS AND TRADEMARKS
Other than common law protection to the trade name "Clear Springs
Citrus" and "Clear Springs," and the trademark of Clear Springs Citrus, Clear
Springs does not own and hold any patents, licenses, trademarks, trade names,
or copyrights.
In connection with the Employment Agreement dated August 12, 1994 with
Richard Blackwelder, Clear Springs purchased the rights to the logo and
tradename of "Blackwelder Groves" by virtue of Trademark Registration No.
1,113,757 issued February 20, 1979 by the U.S. Patent and Trademark Office.
<PAGE> 55
SCHEDULE 3.12
PENDING LITIGATION OF CLEAR SPRINGS
1. The following lawsuits have been threatened against Clear Springs:
A. Burns International Security Service ("Burns") - suit against
Clear Springs for approximately $9,000 in outstanding invoices
for security services provided by Burns. Clear Springs
contests the payments that are due because the services
provided were wholly and grossly inadequate. No suit has been
filed; however, demand letters have been exchanged.
B. Cummins, Inc. - Cummins, Inc. is threatening to sue Clear
Springs for failing to pay an invoice for the repair of an
engine that malfunctioned in a piece of equipment (Yard Dog).
Clear Springs contends that the engine was faulty and should
have been covered under warranty. Cummins contends that the
engine malfunction is due to neglect and lack of maintenance.
No suit has been filed, however, demand letter have been
exchanged.
2. Clear Springs is the plaintiff in the following causes of action:
A. Clear Springs Citrus, Inc. v. Hotz Citrus Products, Inc. -
Clear Springs is suing Hotz Citrus Products, Inc. on an outstanding promissory
note in the original principal amount of $13,000. Richard Hotz of Hotz Citrus
was served with process and a copy of the Complaint in early March of 1996. No
answer has been filed yet.
B. H. Stuart Hall and Clear Springs Citrus, Inc. v. Cherry Lea
and Earnest Rocco Fullerton - Clear Springs and H. Stuart Hall have sued the
Fullertons for civil theft and fraud in connection with the purchase by Clear
Springs of a Mercedes automobile from the Fullertons. Evidently the odometer
had been "rolled back" prior to the purchase of this vehicle. The Mercedes was
originally purchased by H. Stuart Hall when he was president of Clear Springs
for use as his company vehicle. Because of the discrepancy in the mileage, the
car could not legally be registered in the state of Florida. Thus, the vehicle
was sold at a severe discount a couple years ago.
The parties entered into a settlement agreement whereby the Fullertons
were required to pay $100.00 a month to Clear Springs over an extended period
of time. The Fullertons have never made any payments under the Settlement
Agreement.
3. Clear Springs has been served with a Deposition Subpoena For
Production of Business Records in connection with an action entitled Kerry
Harr v. Frosty Fruits, Inc., a California corporation, and Glen F. Richey, an
individual, Gelson's market, Costco, a California corporation, et al., in case
no 250429, venued In and For the Superior Court of California, County of
Riverside. The documents were originally scheduled to be produced in August,
1994. Clear Springs did not produce the documents and has not been contacted
again regarding this matter. Clear Springs has not, to its knowledge, been
named as a defendant in this action.
<PAGE> 56
4. Workers' Compensation Claim. Henry Durant, a former employee of Clear
Springs Citrus, Inc., has alleged a workers' compensation claim against Clear
Springs Citrus, Inc., arising out of an alleged accident on April 24, 1993.
Clear Springs carried workers' compensation coverage through the following
company:
General Accident Insurance Companies
P.O. Box 945601
Maitland, FL 32794-5601
(800) 432-4879
Claim Number: ###-##-####
General Accident has accepted the defense of and provided coverage for
this claim and has retained the following counsel to represent Clear Springs in
this matter:
Rex A. Hurley
Hurley & Rogner, P.A.
201 South Orange Avenue
Suite 640
Orlando, FL 32801
A merit hearing is currently scheduled for May 1, 1996.
<PAGE> 57
SCHEDULE 3.13
UNUSUAL ACCOUNTS RECEIVABLES OF CLEAR SPRINGS
NONE
<PAGE> 58
SCHEDULE 3.14
UNSALABLE INVENTORY OF CLEAR SPRINGS
NONE
<PAGE> 59
SCHEDULE 3.15
CONSENTS REQUIRED FOR EXECUTION OF MERGER
AGREEMENT BY CLEAR SPRINGS
Board of Directors:
Steven Bogen
Brian Duffy
Shareholders:
Brian Duffy
Bogen Group, LLC
<PAGE> 60
SCHEDULE 3.16
REQUIRED COMPLIANCE BY CLEAR SPRINGS WITH OTHER INSTRUMENTS
1. The Loan Agreement dated 10/26/95 between Clear Springs and
SouthTrust Bank of Orlando.
2. March 1994, Agreement and Release with H. Stuart Hall.
<PAGE> 61
SCHEDULE 3.17(a)
EXISTING CONTRACTS OF CLEAR SPRINGS CURRENTLY IN DEFAULT
1. Employment Agreement with Richard Blackwelder dated August 12,
1994.
<PAGE> 62
SCHEDULE 3.17(b)
EXISTING CONTRACTS/AGREEMENTS OF CLEAR SPRINGS
1. EQUIPMENT LEASE AGREEMENTS
<TABLE>
<CAPTION>
MONTHLY START
COMPANY EQUIPMENT LEASE PAYMENT DATE TERM
- ------- --------------- ------- ---- ----
<S> <C> <C> <C> <C>
Rollins Lsg Corp. 1995 Freightliner/Reefer $ 1231.00 1/27/95 72 Months
Rollins Lsg Corp. 1995 Freightliner/Reefer $ 1231.00 8/19/94 72 Months
Rollins Lsg Corp. 1993 Int'l Navistar/Reefer $ 1210.00 8/17/94 48 Months
Mercedes Benz Credit 1993 Freightliner/Reefer $ 980.09 6/21/93 36 Months
Automatic Machinery (7) Brown Extractors $ 8148.75 9/14/91 Yr. To Yr.
U.S. Airmotive, Inc. 42" Forklift $ 258.58 5/1/92 60 months
Aaron Rents, Inc. Office Furniture $ 422.00 6/2/93 Mo. To Mo.
National Guardian Alarm System $ 32.00 9/18/92 5 Years
Ford Motor Credit 94 Ford Explorer $ 520.46 8/21/94 36 Months
Lexus Financial Serv. 95 Lexus LS400 $ 850.00 5/26/95 48 Months
Dept. of Citrus FMC Extractor $12,000.00 8/1/95 1 year
(one payment)
</TABLE>
2. REAL PROPERTY LEASE
A. Lease for 76 8th St., Winter Garden, Florida with Larry A. and
Harriette W. Grimes which expires 12/31/98
3. AGREEMENTS WITH FORMER EMPLOYEES
A. On December 8, 1995, Clear Springs entered into an employment
termination agreement with Bobby Martin wherein Clear Springs
is obligated to pay Martin $1,000 per week for 15 weeks from
December 15, 1995.
<PAGE> 63
B. On January 8, 1996, Clear Springs entered into a Severance
Agreement with Nancy Cini wherein a one time lump sum payment
of $25,000 was made.
C. Agreement and Release executed with H. Stuart Hall in March of
1994.
4. UNIFORM RENTAL: Clear Springs has a rental agreement with UniFirst
for employee uniforms. The cost varies with the amount of uniforms provided.
5. COMMISSION AGREEMENTS: Clear Springs has Commission Agreements with
Richard Blackwelder, Lou Davis and Craig Moynihan.
<PAGE> 64
SCHEDULE 3.18
MATERIAL LIABILITIES OF CLEAR SPRINGS NOT DISCLOSED
ON 12/31/95 BALANCE SHEETS
NONE
<PAGE> 65
SCHEDULE 3.19
TAX DEFICIENCIES
1. Clear Springs may have liability for past unpaid Sales Tax to
the State of Florida, due to conflicting interpretations of Florida Statutes
governing sales tax. The officers and directors of Clear Springs estimate that
this tax liability should not exceed $25,000.
<PAGE> 66
SCHEDULE 3.20
EXISTING/THREATENED LABOR PROBLEMS OF CLEAR SPRINGS
1. See Henry Durant claim disclosed in Schedule 3.12.
<PAGE> 67
SCHEDULE 3.23(v)
OUTSTANDING EXPRESS WARRANTIES OR INDEMNIFICATION
PAYMENTS OF CLEAR SPRINGS
NONE
<PAGE> 68
SCHEDULE 3.26
ENVIRONMENTAL MATTERS AFFECTING CLEAR SPRINGS
NONE
<PAGE> 69
SCHEDULE 4.3(b) AND 4.14
NO CONFLICTS AND CONSENTS, ETC.
1. The execution and deliver of, and performance of the
transactions contemplated by, this Agreement require the prior approval of
Chemical Bank in accordance with the terms of that certain $1,100,000 secured
Short Form Term Loan Agreement, dated October 3, 1995, and related loan
documents among Fresh Juice, as guarantor, The Fresh Juice Company of Florida,
Inc., as borrower, and Chemical Bank. A copy of such Short Form Term Loan is
attached as an exhibit to Fresh Juice's 1995 Form 10-KSB previously delivered
to Ultimate and the Selling Stockholders and is incorporated herein by
reference.
Such consent has been sought, and as of the date hereof, has
not bee obtained, As a result, upon execution and deliver of, and consummation
of the transactions contemplated by, this Agreement, an event of default will
have occurred under such Short Form Term Loan Agreement, and Fresh Juice and
The Fresh Juice Company of Florida, Inc. will each be in violation of the terms
and conditions thereof.
<PAGE> 70
SCHEDULE 4.8
CERTAIN CHANGES OR EVENTS
1. In addition to the acquisition, financing and equipping of
Fresh Juice's Florida facility (referred to as the Florida Plant in Fresh
Juice's 1995 Form 10-KSB), Fresh Juice has continued to expend funds in
equipping, maintaining and operating the Florida Plant. As of the date hereof,
Fresh Juice has expended approximately $600,000 since November 30, 1995 in
connection with capital expenditures relating to the Florida Plant. Such
expenditures have adversely altered, among other things, the financial
condition of Fresh Juice since November 30, 1995.
2. The financial condition, business, operations and prospects of
Fresh Juice has also been adversely effected by the increase in fruit prices
and operating costs and increased competition, all of which have combined to
reduce Fresh Juice's gross margins.
3. On March 28, 1996, Chemical Bank canceled Fresh Juice's
$1,500,000 line of credit. No amounts had been drawn down by Fresh Juice on
such line of credit.
4. Consummation of the transactions contemplated by the Agreement
will result in an event of default under that certain $1,100,000 secured Short
Form Term Loan Agreement, dated October 3, 1995, and related loan documents
among Fresh Juice, as guarantor, The Fresh Juice Company of Florida, Inc., as
borrower, and Chemical Bank. A copy of such Short Form Term Loan is attached as
an exhibit to Fresh Juice's 1995 Form 10-KSB previously delivered to Clear
Springs and the Selling Stockholders and is incorporated herein by reference.
5. The Manufacturing and Distribution Agreement among Fresh
Juice, Sun Orchard of Florida and Sun Orchard, Inc. (previously delivered to
Clear Springs and the Selling Stockholders) described in Fresh Juice's 1995
Form 10-KSB has been declared null and void by each of the parties thereto.
6. See also Schedules 5.6 (Outstanding Options, Warrants and
Other Rights), 5.11 (Accounts Receivables) and 5.13 (Litigation) each of which
is incorporated herein by reference.
<PAGE> 71
SCHEDULE 4.9
TITLE TO PROPERTIES; LIENS
1. Purchase Money Mortgage between Fresh Juice and Fantasy-BlankeBaer
Corporation on the Florida Plant securing payment under that certain Promissory
Note in the aggregate principal amount of $475,000 made by Fresh Juice in favor
of Fantasy-BlankeBaer Corporation. (Exhibits 10.6 and 10.7 to the Fresh Juice
1995 Form 10-KSB and incorporated herein by reference).
2. Loan Agreement between Fresh Juice and Chemical Bank in the aggregate
amount of $1,100,00 which loan is secured by a first priority lien on all of
the equipment, including, but not limited to, machinery and furniture and
fixture of Fresh Juice and The Fresh Juice Company of Florida, Inc. (Exhibit
10.4 to the Fresh Juice 1995 Form 10-KSB and incorporated herein by reference).
3. Citrus Juice Extractor Lease between Fresh Juice and FMC Corporation
pursuant to which FMC Corporation has a lien on four 391B-100 RPM citrus juice
extractors and one 49B-75 RPM citrus juice extractor (a copy of which has been
provide to Clear Springs and the Selling Stockholders and is incorporated
herein by reference).
<PAGE> 72
SCHEDULE 4.11 & 4.21
ACCOUNTS RECEIVABLE
None
<PAGE> 73
SCHEDULE 4.12
INVENTORIES
None
<PAGE> 74
SCHEDULE 4.13
LITIGATION, ETC.
None
<PAGE> 75
SCHEDULE 4.15
EXISTING CONTRACTS
1. See Fresh Juice 1995 Form 10-KSB for items relating to this
Schedule, which document is incorporated herein by reference.
2. Contract with Imperial Engineering & Fabrication, Inc., dated
July 19, 1995 (a copy of which has been delivered to Clear Springs and the
Selling Stockholders and is incorporated herein by reference).
3. Employment Agreement, dated August 17, 1994, between Steve
Smith and Fresh Juice (as described in Fresh Juice's 1995 Form 10-KSB and a
copy of which has been delivered to Clear Springs and the Selling Stockholders
and is incorporated herein by reference).
4. See also Schedule 5.9 (Title to Properties; Liens) which is
incorporated herein by reference.
<PAGE> 76
SCHEDULE 4.25
ENVIRONMENTAL MATTERS
See Site Audit and Environmental Assessment of the Universal Flavors Site in
Winter Haven, Florida (a copy of which has been provided to Clear Springs and
the Selling Stockholders and is incorporated herein by reference).
<PAGE> 77
SCHEDULE 4.19
MISCELLANEOUS
None
<PAGE> 78
SCHEDULE 4.25
ENVIRONMENTAL MATTERS
See Site Audit and Environmental Assessment of the Universal Flavors Site in
Winter Haven, Florida (a copy of which has been provided to Clear Springs and
the Selling Stockholders and is incorporated herein by reference).
<PAGE> 79
SCHEDULE 5.1
SUBSIDIARIES AND AFFILIATES
The Fresh Juice Company of Florida, Inc., a Florida corporation
Fresh Pik't Natural Foods, Inc., a Delaware corporation
Minalba Foods of North America, Inc., a Delaware corporation (existence voided
in 1992 by the Delaware Secretary of State for non-payment of franchise taxes)
The Fresh Juice Acquisition Company, Inc., a Delaware corporation
TFJC Acquisition Corp., a Delaware corporation
<PAGE> 80
SCHEDULE 5.6
OUTSTANDING OPTIONS, WARRANTS OR OTHER RIGHTS
The following options are outstanding with respect to Fresh Juice
common stock:
Steve Smith: Options to purchase 100,00 and 60,000 shares of Fresh
Juice common stock at $1.375 and $3.50, respectively, per share.
Kathy Siegel: Options to purchase 15,000 shares of Fresh Juice
common stock at $1.25 per share.
Jeffrey Smith: Option to purchase 50,000 shares of Fresh Juice common
stock at $3.125 per share.
Paul Ballantine: Option to purchase 60,000 shares of Fresh Juice
common stock at $3.125 per share.
Reference is made to Fresh Juice's Annual Report on Form 10-KSB for
the fiscal year ended November 30, 1995 (the "1995 Form 10-KSB", a copy of
which has been delivered to Clear Springs and the Selling Stockholders) for a
more detailed description of the options granted to Steve Smith and Kathy
Siegel, which document is incorporated herein by reference.
Reference is made to the Stock Option Agreements, as of dated February
12, 1996, between Fresh Juice and each of Jeffrey Smith and Paul Ballantine
(copies of which have been provided to Clear Springs and the Selling
Stockholders) for a more detailed description of the options granted to Jeffrey
Smith and Paul Ballentine, which documents are incorporated herein by
reference.
<PAGE> 81
SCHEDULE 5.7
FRESH JUICE FINANCIAL STATEMENTS
None
<PAGE> 82
SCHEDULE 5.8
CERTAIN CHANGES OR EVENTS
1. In addition to the acquisition, financing and equipping of
Fresh Juice's Florida facility (referred to as the Florida Plant in Fresh
Juice's 1995 Form 10-KSB), Fresh Juice has continued to expend funds in
equipping, maintaining and operating the Florida Plant. As of the date hereof,
Fresh Juice has expended approximately $600,000 since November 30, 1995 in
connection with capital expenditures relating to the Florida Plant. Such
expenditures have adversely altered, among other things, the financial
condition of Fresh Juice since November 30, 1995.
2. The financial condition, business, operations and prospects of
Fresh Juice has also been adversely effected by the increase in fruit prices
and operating costs and increased competition, all of which have combined to
reduce Fresh Juice's gross margins.
3. On March 28, 1996, Chemical Bank canceled Fresh Juice's
$1,500,000 line of credit. No amounts had been drawn down by Fresh Juice on
such line of credit.
4. Consummation of the transactions contemplated by the Agreement
will result in an event of default under that certain $1,100,000 secured Short
Form Term Loan Agreement, dated October 3, 1995, and related loan documents
among Fresh Juice, as guarantor, The Fresh Juice Company of Florida, Inc., as
borrower, and Chemical Bank. A copy of such Short Form Term Loan is attached as
an exhibit to Fresh Juice's 1995 Form 10-KSB previously delivered to Clear
Springs and the Selling Stockholders and is incorporated herein by reference.
5. The Manufacturing and Distribution Agreement among Fresh
Juice, Sun Orchard of Florida and Sun Orchard, Inc. (previously delivered to
Clear Springs and the Selling Stockholders) described in Fresh Juice's 1995
Form 10-KSB has been declared null and void by each of the parties thereto.
6. See also Schedules 5.6 (Outstanding Options, Warrants and
Other Rights), 5.11 (Accounts Receivables) and 5.13 (Litigation) each of which
is incorporated herein by reference.
<PAGE> 83
SCHEDULE 5.9
TITLE TO PROPERTIES; LIENS
1. Purchase Money Mortgage between Fresh Juice and Fantasy-BlankeBaer
Corporation on the Florida Plant securing payment under that certain Promissory
Note in the aggregate principal amount of $475,000 made by Fresh Juice in favor
of Fantasy-BlankeBaer Corporation. (Exhibits 10.6 and 10.7 to the Fresh Juice
1995 Form 10-KSB and incorporated herein by reference).
2. Loan Agreement between Fresh Juice and Chemical Bank in the aggregate
amount of $1,100,00 which loan is secured by a first priority lien on all of
the equipment, including, but not limited to, machinery and furniture and
fixture of Fresh Juice and The Fresh Juice Company of Florida, Inc. (Exhibit
10.4 to the Fresh Juice 1995 Form 10-KSB and incorporated herein by reference).
3. Citrus Juice Extractor Lease between Fresh Juice and FMC Corporation
pursuant to which FMC Corporation has a lien on four 391B-100 RPM citrus juice
extractors and one 49B-75 RPM citrus juice extractor (a copy of which has been
provide to Clear Springs and the Selling Stockholders and is incorporated
herein by reference).
<PAGE> 84
SCHEDULE 5.11 & 5.22
ACCOUNTS RECEIVABLE
As of the date hereof, Urban Juice and Soda, based in Vancouver,
Canada, has an outstanding account owed to Fresh Juice in the amount of
$26,000. It is uncertain whether when, if ever, this amount will be
collectible, in whole or in part.
<PAGE> 85
SCHEDULE 5.12
INVENTORIES
None
<PAGE> 86
SCHEDULE 5.13
LITIGATION
1. Collection action has been instituted in California Day-Fresh Foods,
Inc. vs. Fresh Pik't Natural Foods, Inc., relating to a claim for $5,793.06 in
respect of fruit purchased by Fresh Pik't Natural Foods, Inc. which was unpaid.
2. Suit was filed in the U.S. Bankruptcy Court for the District of
Maryland against Fresh Pik't Natural Foods, Inc. Pursuant to such action, In
Re: Washington Natural Foods & Co. vs. Fresh Pik't Natural Foods, Inc. and
Coreganics, Inc., the plaintiff has instituted an action against Fresh Pik't
Natural Foods, Inc. alleging fraudulent conveyance and non-compliance with the
Maryland Bulk Transfers statute. Plaintiff are seeking monetary damages in the
amount of $254,000. Fresh Pik't Natural Foods, Inc. has filed an answer
denying such allegations and intends to defend such law suit. A copy of the
compliant relating thereto has been provided to Clear Springs and the Selling
Stockholders and is incorporated herein by reference.
<PAGE> 87
SCHEDULE 5.14
CONSENTS, ETC.
1. The execution and delivery of, and performance of the
transactions contemplated by, this Agreement required the prior approval of
Chemical Bank in accordance with the terms of that certain $1,100,000 secured
Short Form Term Loan Agreement, dated October 3, 1995, and related loan
documents among Fresh Juice, as guarantor, The Fresh Juice Company of Florida,
Inc., as borrower, and Chemical Bank. A copy of such Short Form Term Loan is
attached as an exhibit to Fresh Juice's 1995 Form 10-KSB previously delivered
to Ultimate and the Selling Stockholders and is incorporated herein by
reference.
Such consent has been sought, and as of the date hereof, has
not been obtained. As a result, upon execution and delivery of, and
consummation of the transactions contemplated by, this Agreement, an event of
default will have occurred under such Short Form Term Loan Agreement, and Fresh
Juice and The Fresh Juice Company of Florida, Inc. will each be in violation of
the terms and conditions thereof.
<PAGE> 88
SCHEDULE 5.15
COMPLIANCE WITH OTHER INSTRUMENTS, ETC.
See the information set forth in Schedule 5.14 (Consents, etc.), which
information is incorporated herein by reference.
<PAGE> 89
SCHEDULE 5.16(a)
EXISTING CONTRACTS
See the information set forth in Schedule 5.14 (Consents, etc.), which
information is incorporated herein by reference.
<PAGE> 90
SCHEDULE 5.16(b)
EXISTING CONTRACTS
1. See Fresh Juice 1995 Form 10-KSB for items relating to this
Schedule, which document is incorporated herein by reference.
2. Contract with Imperial Engineering & Fabrication, Inc., dated
July 19, 1995 (a copy of which has been delivered to Clear Springs and the
Selling Stockholders and is incorporated herein by reference).
3. Employment Agreement, dated August 17, 1994, between Steve
Smith and Fresh Juice (as described in Fresh Juice's 1995 Form 10-KSB and a
copy of which has been delivered to Clear Springs and the Selling Stockholders
and is incorporated herein by reference).
4. See also Schedule 5.9 (Title to Properties; Liens) which is
incorporated herein by reference.
<PAGE> 91
SCHEDULE 5.17
FRESH JUICE'S UNDOCUMENTED LIABILITIES
NONE
<PAGE> 92
SCHEDULE 5.26
ENVIRONMENTAL MATTERS
See Site Audit and Environmental Assessment of the Universal Flavors Site in
Winter Haven, Florida (a copy of which has been provided to Clear Springs and
the Selling Stockholders and is incorporated herein by reference).
<PAGE> 93
SCHEDULE 7.2
EXCEPTIONS TO PROHIBITED ACTIVITIES OF CLEAR SPRINGS DURING INTERIM PERIOD
NONE
<PAGE> 94
SCHEDULE 7.3
PROHIBITED ACTIVITIES OF FRESH JUICE AND
MERGER SUB DURING INTERIM PERIOD
NONE
<PAGE> 95
EXHIBIT A
DOCUMENT INTENTIONALLY OMITTED AT CLOSING
<PAGE> 96
EXHIBIT B
PLAN OF MERGER
This Plan of Merger is made as of this ____ day of __________,
1996, by and between The Fresh Juice Company of Florida, Inc., a Florida
corporation ("Fresh Juice Florida"), a wholly owned subsidiary of the
Fresh Juice Company, Inc. ("Fresh Juice") and Clear Springs Citrus, Inc., a
Florida corporation ("Clear Springs").
Fresh Juice Florida and Clear Springs adopt the following Plan of
Merger:
1. Names. The names of the corporations proposing to merge
are:
a. Clear Springs Citrus, Inc., a
Florida corporation (also known as the "Absorbed
Corporation").
b. The Fresh Juice Company of
Florida, Inc., a Florida corporation (also known as
the "Surviving Corporation").
2. Merger. Fresh Juice Florida shall merge with Clear
Springs and Fresh Juice Florida will be the Surviving Corporation.
3. Terms and Conditions. The merger shall become effective
on filing with the Department of State of the State of Florida Articles of
Merger setting forth the terms of this Plan of Merger. On the effective date
of the merger, the separate existence of the Absorbed Corporation shall cease,
and the Surviving Corporation shall succeed to all the rights, privileges,
immunities and franchises, and all the property, real, personal and mixed of
the Absorbed Corporation, without the necessity for any separate transfer.
The Surviving Corporation shall thereafter be responsible and liable for all
liabilities and obligations of the Absorbed Corporation, and neither the
rights of creditors nor any liens on the property of the Absorbed Corporation
shall be impaired by the merger.
4. Conversion of Shares. On the effective date of the merger:
a. Each share of the capital stock of Fresh Juice
Florida which is at the time issued and outstanding shall remain.
b. Each share of capital stock of Clear Springs,
which is at the time issued and outstanding shall be cancelled
and extinguished in exchange for the issuance of an aggregate of
1,160,000 validly issued, duly authorized and non-assessable
shares of common stock of Fresh Juice to the then existing
shareholders of Clear Springs, to be allocated by agreement of
such then existing shareholders.
<PAGE> 97
c. The conversion shall be effective as follows:
After the Effective Date of the Merger, each
holder of certificates for shares of common
stock of holders of Clear Springs stock shall
surrender all of their shares of stock to Fresh
Juice or its duly appointed agent and Fresh
Juice shall issue 1,160,000 shares of common
stock of Fresh Juice.
5. Changes in Articles of Incorporation. There shall be no
changes in the Articles of Incorporation of the Surviving Corporation.
6. Change in By-laws. The By-laws of Fresh Juice Florida
shall be the By-laws of the Surviving Corporation following the effective date
of the merger.
7. Directors and Officers. The directors and officers of
the Surviving Corporation on the effective date of the merger shall be as
follows and continue to act in such capacity until their successors have been
elected or appointed and qualified:
C.E.O Steven M. Bogen
President: Steven Smith
Secretary: Steven M. Bogen
Assistant
Secretary: Steven Smith
Treasurer: Mark Feldman
Board Members: Steven Smith Brian Duffy
Steven M. Bogen Jeffrey Smith
8. Approval by Stockholders. This Plan of Merger shall be
submitted for the approval of the stockholders of the constituent corporations
in the manner provided by the applicable laws of the state of Florida.
9. Abandonment of Merger. This Plan of Merger may be
abandoned by action of the Board of Directors of either the Surviving or the
Absorbed Corporation at any time prior to the effective date on the happening
of either of the following events:
a. If the merger is not approved by the stockholders of
either the Surviving or the Absorbed Corporation on or before
June 30, 1996, or
2
<PAGE> 98
b. If, in the judgment of the Board of Directors of either
the Surviving or the Absorbed Corporation, the merger would be
impracticable.
10. Modification. The Plan of Merger may be amended or
modified with the approval of the Boards of Directors of each of the
constituent corporations; provided that no modification shall affect the
conversion of share provisions nor materially and adversely affect the rights
of stockholders under this Plan, and such amendment or modification shall
otherwise comply with Section 607.1103, Florida Statutes.
11. Execution of Agreement. Upon approval by the stockholders,
this Plan of Merger may be executed in any number of counterparts, and each
such counterpart shall constitute an original instrument.
THE FRESH JUICE COMPANY OF FLORIDA, INC.,
a Florida corporation
By:
------------------------------------------
Steven Smith, Chief Executive Officer
CLEAR SPRINGS CITRUS, INC., a Florida
corporation
By:
------------------------------------------
Brian Duffy, President
3
<PAGE> 99
ARTICLES OF MERGER OF
CLEAR SPRINGS CITRUS, INC., A FLORIDA CORPORATION
INTO
THE FRESH JUICE COMPANY OF FLORIDA, INC., FLORIDA CORPORATION
Pursuant to FSA Section 607.1105, the corporations described herein, desiring
to effect a merger, set forth the following facts:
ARTICLE I
The name of the corporation surviving the merger is: THE FRESH JUICE COMPANY OF
FLORIDA, INC., a Florida corporation, which is a wholly-owned subsidiary of the
Fresh Juice Company, Inc., a Delaware corporation.
The name of the Surviving Corporation has not been changed as a result of the
merger.
ARTICLE II
The Surviving Corporation is a domestic corporation, incorporated in Florida on
July 28, 1995.
ARTICLE III
The name of the Absorbed Corporation is: CLEAR SPRINGS CITRUS, INC., a Florida
corporation.
The state of domicile of the Absorbed Corporation is: Florida
The date of incorporation of the Absorbed Corporation is: July 24, 1985.
ARTICLE IV
The Plan of Merger, containing the information required by FSA Section
607.1101, is set forth in Exhibit A, which is attached hereto and made a part
hereof.
ARTICLE V
The manner of adoption and vote of the Absorbed Corporation was as follows:
<PAGE> 100
A shareholder meeting was duly called and held on ___________, 1996 and the
Shareholders unanimously approved the Plan of Merger. The merger was then
adopted by the board of directors on ______________, 1996.
ARTICLE VI
The manner of adoption and vote of the Surviving Corporation was as follows:
The Fresh Juice Company, Inc., the sole shareholder of The Fresh Juice Company
of Florida, Inc., consented to and approved the merger on_______________. The
merger was adopted by the board of directors of The Fresh Juice Company, Inc.
on __________, 1996.
ARTICLE VII
These Articles of Merger will be effective upon filing.
Date: ____________, 1996
CLEAR SPRINGS CITRUS, INC., a Florida
corporation
By:
--------------------------------------
Brian Duffy, President
THE FRESH JUICE COMPANY OF FLORIDA, INC.,
a Florida corporation
By:
--------------------------------------
Steven Smith, CEO
<PAGE> 101
EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement"), dated as
of ___________, 1996, among The Fresh Juice Company, Inc., a Delaware
corporation (the "Company"), Steven M. Bogen, Albert L. Rountree, IV, Daniel
Petry, Mark Feldman and James Coyle (individually, a "Selling Stockholder", and
collectively, the "Selling Stockholders").
This Agreement is in connection with the Merger Agreement,
dated as of the date hereof, among the Company, The Fresh Juice Acquisition
Company, Inc., The Ultimate Juice Company, Inc. and the Selling Stockholders
(the "Merger Agreement") pursuant to which the Company agreed to provide to the
Selling Stockholders certain piggy-back registration rights in respect of
1,140,000 shares of the Company's common stock, par value $.01 per share (the
"Common Stock") issued in connection with such Merger Agreement. Such rights
are set forth exclusively in this Agreement.
The parties hereto hereby agree as follows:
1. Definitions. As used in this Agreement, the following
terms not otherwise defined herein shall have the following meanings:
Exchange Act: The Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
Losses: See Section 8 hereof.
Piggyback Registration: See Section 3 hereof.
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Prospectus: The prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A), as amended or supplemented
by any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Common covered by such Registration Statement and
all other amendments and supplements to the Prospectus, including pre- and
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.
Registrable Common: Four percent of the Common Stock issued
to, and directly held by, each Selling Stockholder pursuant to the terms of the
Merger Agreement.
Registration Expenses: See Section 7 hereof.
Registration Statement: Any registration statement (including
any preliminary or "red herring" registration statement or prospectus) of the
Company, filed with the SEC or any state securities regulatory agency, which
covers any of the Registrable Common pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including pre- and post-effective amendments, all
exhibits and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
Restricted Securities: The Registrable Common upon original
issuance thereof and at all times subsequent thereto until in the case of any
such security, (i) it has been effectively registered under the Securities Act
and disposed of in accordance with the
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Registration Statement covering it or (ii) it is sold or distributed to the
public pursuant to Rule 144 (or any similar provisions then in force) under the
Securities Act.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and
the rules and regulations promulgated by the SEC thereunder.
Underwritten registration or underwritten offering: A
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.
2. Securities Subject to this Agreement
(a) Registrable Common Securities. The
securities entitled to the benefits of this Agreement are the Registrable
Common.
(b) Holders of Registrable Common. The Selling
Stockholders and the successors and assigns set forth in Section 10(d) hereof
shall be deemed the only holders of Registrable Common.
3. Piggyback Registration
(a) Right to Piggyback. Subject to the
provisions of this Section 3, if at any time the Company proposes to file a
registration statement under the Securities Act with respect to an offering by
the Company of its Common Stock (other than a registration statement (a) on
Form S-8 or any successor form to such Form or (b) filed in connection with an
exchange offer or an offering of its common stock made solely to its existing
stockholders in connection with a rights offering or solely to employees of the
Company), for its own account, then the Company shall give written notice of
such proposed filing to the
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holders of Registrable Common at least 30 days before the anticipated filing
date. Such notice shall offer such holders the opportunity to register such
amount of Registrable Common as each such holder may request ("Piggyback
Registration"). Subject to the provisions of this Section 3, the Company shall
include in each such Piggyback Registration all Registrable Common requested to
be included in the registration for such offering. If any holder of
Registrable Common desires to have shares of Registrable Common so registered,
such holder shall so advise the Company in writing within 10 days after the
date of the Company's notice of the anticipated filing date, setting forth the
number of shares of Registrable Common for which registration is so requested.
The holders of Registrable Common shall be permitted to withdraw all or part of
the Registrable Common from a Piggyback Registration at any time prior to the
effective date of such Piggyback Registration.
(b) Priority on Piggyback Registrations. The
Company shall cause the managing underwriter or underwriters of a proposed
underwritten offering to permit holders of Registrable Common requested to be
included in the registration for such offering to include all such Registrable
Common on the same terms and conditions as the Common Stock of the Company
included therein. Notwithstanding the foregoing, if the managing underwriter or
underwriters of such offering deliver(s) a written notice to the holders of
Registrable Common that the total amount of securities which such holders, the
Company and any other persons or entities having rights to participate in such
registration, intend to include in such offering is such as to materially and
adversely affect the success of such offering, then the amount of securities to
be offered for the account of holders of Registrable
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Common, as the case may be, shall be reduced (to zero if necessary) or limited
pro rata in proportion to their respective dollar amounts of Registrable Common
requested to be registered to the extent necessary to reduce the total amount
of securities to be included in such offering to the amount recommended by such
managing underwriter or underwriters.
(c) Conditions to Piggyback Registration. The
rights of holders of Registrable Common to have any shares of Registrable
Common included in a Registration statement shall be subject to the following
conditions:
(i) Holders of Registrable Common shall
furnish the Company in a timely manner with all information required by the
applicable rules and regulations of the SEC or any applicable state securities
regulatory agency concerning the proposed method of sale or other disposition
of the Registrable Common, the identity of and compensation to be paid to any
proposed underwriter(s) to be employed in connection therewith, and such other
information as may be reasonably required by the Company properly to prepare
and file such Registration Statement in accordance with applicable provisions
of the Securities Act and the rules and regulations of any applicable state
securities regulatory agency;
(ii) if holders of Registrable Common
desire to sell and distribute any shares of Common Stock over a period of time,
or from time to time, at then prevailing market prices, then holders of
Registrable Common shall execute and deliver to the Company such written
undertakings as the Company and its counsel may reasonably require in order to
assure full compliance with relevant provisions of the Securities Act, the
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Exchange Act or the rules and regulations of any applicable state securities
regulatory agency;
(iii) in the case of an underwritten
offering on behalf of holders of Registrable Common in connection with a
Piggyback Registration, the managing underwriter(s) thereof shall be subject to
the approval of the Company, such approval not to be unreasonably withheld; and
(iv) the offering price of any share of
Registrable Common subject to Piggyback Registration shall be no less than the
offering price for any share of Common Stock then to be registered for sale for
the account of the Company or other security holder of the Company, unless such
shares of Registrable Common are to be offered from time to time based on the
then prevailing market price.
(d) Termination of Piggyback Registration Rights.
The obligations of the Company to any holder of Registrable Common with respect
to Piggyback Registration provided for in this Section 3:
(i) shall continue until such time as
counsel to the Company is of the opinion and has so advised the Company and the
holder of Registrable Common that such holder has no further obligations to
comply with the registration requirements of the Securities Act or to deliver a
prospectus meeting the requirements of Section 10(a)(3) of the Securities Act
in connection with further sales by such holder of Registrable Common;
(ii) shall not apply to any proposed
sale(s) or other disposition(s) or offer(s) for any shares of Registrable
Common with respect to which counsel
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for the Company is of the opinion and has so advised the Company and the holder
of Registrable Common that such holder has no obligation to comply with the
registration requirements of the Securities Act or to deliver a prospectus
meeting the requirements of Section 10(a)(3) of the Securities Act;
(iii) shall not apply with respect to any
holder of Registrable Common who beneficially owns, at the time a request for
Piggyback Registration is made pursuant to Section 3(a) hereof, less than
20,000 shares of Common Stock;
(iv) shall terminate with respect to any
holder of Registrable Common who has exercised Piggyback Registration before
pursuant to Section 3(a) hereof and the Registration Statement related thereto
registering the full number of shares of Registrable Common requested by such
holder to be so registered was declared effective by the SEC; and
(v) shall terminate on the second
anniversary of the date of this Agreement.
4. Registration of Securities Other than Registrable
Common. The Company is under no obligation to the Selling Stockholders or any
of their respective affiliates to register, or grant a right of registration
with respect to, any securities of the Company (other than the Registrable
Common) under the Securities Act or any state securities laws or regulations.
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5. Hold-Back Agreements.
(a) Restrictions on Public Sale by Holders of
Registrable Common. Each holder of Registrable Common whose Registrable Common
are covered by a Registration Statement filed pursuant to Section 3 hereof,
agrees, if requested by the managing underwriter or underwriters in an
underwritten offering, not to effect any public sale or distribution of any of
the Company's securities, including a sale pursuant to Rule 144 under the
Securities Act (except as part of such underwritten registration), during the
10-day period prior to, and during the 90-day period beginning on, the closing
date of each underwritten offering made pursuant to such Registration
Statement, to the extent timely notified in writing by the Company or the
managing-underwriters.
6. Registration Procedures
(a) In connection with the Company's registration
obligations pursuant to Section 1 hereof, the Company shall effect such
registrations to permit the sale of such Registrable Common in accordance with
the intended method or methods of disposition thereof, and pursuant thereto the
Company shall (and, in the case of Section 4(n) hereof, the Company shall):
(i) prepare and file with the SEC a
Registration Statement on any appropriate form under the Securities Act, which
form shall be available for the sale of the Registrable Common by the holders
thereof in accordance with the intended method or methods of distribution
thereof, and cause each such Registration Statement to become effective and
remain effective as provided herein; provided, however, that before filing a
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Registration Statement or prospectus or any amendments or supplements thereto
(including documents which would be incorporated or deemed to be incorporated
therein by reference) the Company shall furnish to the holders of the
Registrable Common covered by such Registration Statement and the managing
underwriters, if any, copies of all such documents proposed to be filed, which
documents will be subject to the review of such holders and such underwriters,
and the Company shall not file any such Registration Statement or amendment
thereto or any Prospectus or any supplement thereto (including such documents
which, upon filing, would be or would be deemed to be incorporated by reference
therein) to which the holders of a majority of the Registrable Common covered
by such Registration Statement or the managing underwriter, if any, shall
reasonably object on a timely basis;
(ii) prepare and file with the SEC such
amendments and post-effective amendments to each Registration Statement
continuously as may be necessary to keep such Registration Statement effective
for the applicable period; cause the related Prospectus to be supplemented by
any required Prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 (or any similar provisions then in force) under the Securities Act;
and comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement during the
applicable period in accordance with the intended methods of disposition by the
sellers thereof set forth in such Registration Statement as so amended or to
such Prospectus as so supplemented;
(iii) notify the selling holders of
Registrable Common and the managing underwriters, if any, promptly, and (if
requested by any such person) confirm such
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notice in writing, (i) when a Prospectus or any Prospectus supplement or
post-effective amendment related to such Registrable Common has been filed,
and, with respect to a Registration Statement or any post-effective amendment
related to such Registrable Common, when the same has become effective, (ii) of
any request by the SEC for amendments or supplements to a Registration
Statement or related Prospectus or for additional information, (iii) of the
issuance by the SEC of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose,
(iv) if at any time the representations and warranties of the Company and the
Company contained in any agreement (including any underwriting agreement)
contemplated by paragraph (n) below cease to be true and correct, (v) of the
receipt by the Company of any notification with respect to the suspension of
the qualification or exemption from qualification of any of the Registrable
Common for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, (vi) of the happening of any event which makes any
statement made in such Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue
or which requires the making of any changes in a Registration Statement or
related Prospectus so that such documents will not 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, and (vii) of the
Company's reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate;
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(iv) use every reasonable effort to obtain
the withdrawal of any order suspending the effectiveness of a Registration
Statement, or the lifting of any suspension of the qualification (or exemption
from qualification) of any of the Registrable Common for sale in any
jurisdiction, at the earliest possible moment;
(v) if requested by the managing
underwriters or any holder of Registrable Common being sold in connection with
an underwritten offering, (i) immediately incorporate in a Prospectus
supplement or post-effective amendment such information as the managing
underwriters and such holder agree should be included therein as may be
required by applicable law, (ii) make all required filings of such Prospectus
supplement or such post-effective amendment as soon as the Company has received
notification of the matters to be incorporated in such Prospectus supplement or
post-effective amendment, and (iii) supplement or make amendments to any
Registration Statement if requested by any holder of Registrable Common covered
by such Registration Statement or any underwriter of such Registrable Common;
(vi) furnish to each selling holder of
Registrable Common and each managing underwriter, if any, without charge, at
least one signed copy of the Registration Statement or Statements and any
post-effective amendment thereto, including financial statements and schedules,
all documents incorporated therein by reference or deemed incorporated therein
by reference and all exhibits (including those previously furnished or
incorporated by reference) at the earliest practicable time under the
circumstances before the filing of such documents with the SEC;
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(vii) deliver to each selling holder of
Registrable Common and the underwriters, if any, without charge, as many copies
of the Prospectus or Prospectuses (including each preliminary prospectus) and
any amendment or supplement thereto as such persons may reasonably request; the
Company consents to the use of such Prospectus or any amendment or supplement
thereto by each of the selling holders of Registrable Common and the
underwriters, if any, in connection with the offering and sale of the
Registrable Common covered by such Prospectus or any amendment or supplement
thereto;
(viii) prior to any public offering of
Registrable Common, to register or qualify or cooperate with the selling
holders of Registrable Common, the underwriters, if any, and their respective
counsel in connection with the registration or qualification (or exemption from
such registration or qualification) of such Registrable Common for offer and
sale under the securities or Blue Sky laws of such jurisdictions as any seller
or underwriter reasonably requests in writing; keep each such registration or
qualification (or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and do any and all
other acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Common covered by the applicable Registration
Statement; provided, however, that the Company will not be required to (A)
qualify generally to do business in any jurisdiction where it is not then so
qualified or (B) take any action which would subject it to general service of
process in any such jurisdiction where it is not then so subject;
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(ix) cooperate with the selling holders of
Registrable Common and the managing underwriters, if any, to facilitate the
timely preparation and delivery of certificates representing Registrable Common
to be sold, which certificates shall not bear any restrictive legends; and
enable such Registrable Common to be in such denominations and registered in
such names as the managing underwriters may request at least two business days
prior to any sale of Registrable Common to the underwriters;
(x) cause the Registrable Common covered
by the applicable Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to enable
the seller or sellers thereof or the underwriters, if any, to consummate the
disposition of such Registrable Common;
(xi) upon the occurrence of any event
contemplated by Section 6(c)(vi) or 6(c)(vii) above, prepare a supplement or
post-effective amendment to the applicable Registration Statement or a
supplement to the related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Common being sold thereunder, such
Prospectus will not contain an untrue statement of a material fact or omit to
state a 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;
(xii) cause all Registrable Common covered
by such Registration Statement to be (i) listed on each securities exchange, if
any, on which similar securities issued by the Company are then listed, or (ii)
authorized to be quoted on the
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National Association of Securities Dealers Automated Quotation System
("NASDAQ") or the National Market System of NASDAQ if the securities so
qualify; in each case, if requested by the holders of a majority of the
Registrable Common covered by such Registration Statement or the managing
underwriter;
(xiii) provide CUSIP numbers for the
Registrable Common not later than the effective date of the Registration
Statement; and
(xiv) furnish to the holders of Registrable
Common a copy, if so prepared, of the so-called "cold comfort" letter signed by
the independent public accountants who have certified the Company's financial
statements include in the Registration Statement, covering substantially the
same matters with respect to such Registration Statement (and the Prospectus
included thereunder) and, with respect to events subsequent to the date of such
financial statements, as are customarily covered, and subject to such
qualifications, limitations and disclaimers as are customarily included in
accountants' letters delivered to underwriters in connection with underwritten
public offerings of securities.
The Company may require each seller of Registrable Common as
to which any registration is being effected to furnish to the Company such
information regarding the distribution of such Registrable Common as the
Company may from time to time reasonably request in writing.
Each holder of Registrable Common agrees by acquisition of
such Registrable Common that, upon receipt of any notice from The Company of
the happening of any event of the kind described in Section 6(c)(ii),
6(c)(iii), 6(c)(v), 6(c)(vi) or 6(c)(vii) hereof, such
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holder will forthwith discontinue disposition of such Registrable Common
covered by such Registration Statement or Prospectus until such holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 6(k) hereof, or until it is advised in writing (the "Advice") by the
Company that the use of the applicable Prospectus may be resumed, and has
received copies of any additional or supplemental filings which are
incorporated or deemed to be incorporated by reference in such Prospectus.
7. Registration Expenses
(a) The following fees and expenses incident to
the preparation of the Registration Statement shall be borne by the Company:
(i) all registration and filing fees, including fees and expenses relating to
the Company's securities and the Registrable Common (A) with respect to filings
required to be made with the National Association of Securities Dealers, Inc.
and (B) compliance with securities or Blue Sky laws (fees and disbursements in
connection with Blue Sky qualifications of Registrable Common in such states
where the Company and the managing underwriter do not intend to distribute the
Company's securities pursuant to the Registration Statement shall be borne by
the holders of Registrable Common), (ii) printing expenses of the Registration
Statement requested by the managing underwriter, (iii) fees and disbursements
of counsel for the Company, (iv) fees and disbursements of the Company's
independent certified public accountants, (v) underwriter's fees and expenses
(excluding discounts, commissions or fees of underwriters, selling brokers,
dealer managers or similar securities industry professionals relating to the
distribution of the Registrable Common or legal expenses of any person other
than the Company and the underwriters) (but
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including the fees and expenses of any "qualified independent underwriter" or
other independent appraiser participating in an offering pursuant to Section 3
of Schedule E to the By-laws of the National Association of Securities Dealers,
Inc.), (vi) Securities Act liability insurance if the Company so desires such
insurance, and (vii) fees and expenses of all other persons retained by the
Company and not specifically required as a result of the registration of any
Registrable Common (all such expenses being herein called "Registration
Expenses") shall be borne the Company whether or not any of the Registration
Statements become effective. The Company shall, in any event, pay its internal
expenses (including, without limitation, all salaries and expenses of their
respective officers and employees performing legal or accounting duties), the
expense of any annual audit, the fees and expenses incurred in connection with
the listing of the securities to be registered on any securities exchange on
which similar securities issued by the Company are then listed and rating
agency fees and the fees and expenses of any person, including special experts,
retained by the Company which is not related to the registration of Registrable
Common.
8. Indemnification
(a) Indemnification by the Company. The Company
shall indemnify and hold harmless, to the full extent permitted by law, each
holder of Registrable Common registered pursuant to this Agreement from and
against all losses, claims, damages, liabilities and costs including, without
limitation, reasonable costs of preparation and attorneys' fees and expenses
(collectively, "Losses"), as incurred, arising out of or based upon (i) any
violation of any law, rule or regulation promulgated under the Securities Act,
the Exchange
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Act or by any state securities regulatory agency applicable to any of the
transactions contemplated hereby or (ii) any untrue or alleged untrue statement
of a material fact contained in any Registration Statement, Prospectus or
preliminary prospectus or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same are based solely upon
information furnished in writing to the Company by such holder expressly for
use therein.
(b) Indemnification by Holders of Registrable
Common. In connection with any Registration Statement in which a holder of
Registrable Common is participating, such holder of Registrable Common shall
furnish to the Company in writing such information as the Company requests for
use in connection with any Registration Statement or Prospectus and agrees to
indemnify, to the full extent permitted by law the Company, its directors and
officers, agents and employees, each person who controls the Company (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act), and the directors, officers, agents or employees of such controlling
persons, from and against all Losses arising out of or based upon (i) any
violation of any law, rule or regulation promulgated under the Securities Act,
the Exchange Act or by any state securities regulatory agency applicable to any
of the transactions contemplated hereby or (ii) any untrue statement of a
material fact or any omission of a material fact required to be stated in any
Registration Statement or Prospectus or preliminary prospectus or necessary to
make the statements therein not misleading, to the extent, but only to the
extent, that such untrue
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statement or omission is contained in any information so furnished in writing
by such holder to the Company expressly for use in such Registration Statement
or Prospectus and that such information was solely relied upon by the Company
in preparation of such Registration Statement, Prospectus or preliminary
prospectus. The Company shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in the distribution to the same extent as provided
above with respect to information so furnished in writing by such persons
expressly for use in any Prospectus or Registration Statement.
(c) Conduct of Indemnification Proceedings. If
any action or proceeding (including any governmental investigation or inquiry)
shall be brought or any claim shall be asserted against any person or entity
entitled to indemnity hereunder (an "Indemnified Party"), such Indemnified
Party shall promptly notify the party from which such indemnity is sought (the
"Indemnifying Party") in writing, and the Indemnifying Party shall assume the
defense thereof, including the employment of counsel reasonably satisfactory to
the Indemnified Party and the payment of all fees and expenses incurred in
connection with the defense thereof. All such fees and expenses (including any
fees and expenses incurred in connection with investigating or preparing to
defend such action or proceeding) shall be paid to the Indemnified Party, as
incurred, within five days of written notice thereof to the Indemnifying Party
(regardless of whether it is ultimately determined that an Indemnified Party is
not entitled to indemnification hereunder). Any such Indemnified Party shall
have the right to employ separate counsel in any such action, claim or
proceeding and to participate in
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the defense thereof, but the fees and expenses of such counsel shall be the
expenses of such Indemnified Party unless (a) the Indemnifying Party has agreed
to pay such fees and expenses or (b) the Indemnifying Party shall have failed
to promptly assume the defense of such action, claim or proceeding and to
employ counsel reasonably satisfactory to the Indemnified Party in any such
action, claim or proceeding or (c) the named parties to any such action, claim
or proceeding (including any impleaded parties) include both such Indemnified
Party and the Indemnifying Party, and such Indemnified Party shall have been
advised by counsel that there may be one or more legal defenses available to it
which are different from or additional to those available to the Indemnifying
Party (in which case, if such Indemnified Party notifies the Indemnifying Party
in writing that it elects to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to assume
the defense of such action, claim or proceeding on behalf of such Indemnified
Party, it being understood, however, that the Indemnifying Party shall not, in
connection with any one such action, claim or proceeding or separate but
substantially similar or related actions, claims or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for all such Indemnified
Parties, unless in the reasonable judgment of any such Indemnified Party a
conflict of interest may exist between such Indemnified Party and any other of
such Indemnified Parties with respect to such action, claim or proceeding, in
which event the Indemnifying Party shall be obligated to pay the fees and
expenses of such additional counsel or counsels).
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(d) Contribution. If the indemnification
provided for in this Section 8 is unavailable to an Indemnified Party under
Section 8(a) or 8(b) hereof (other than by reason of exceptions provided in
such sections) in respect of any Losses, then each applicable Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall, jointly and
severally, contribute to the amount paid or payable by such Indemnified Party
as a result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions, statements or omissions which resulted in such Losses as well
as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of
a material fact, has been taken or made by, or relates to information supplied
by, such Indemnifying Party or Indemnified Party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such action, statement or omission. The amount paid or payable by a party as
a result of any Losses shall be deemed to include, subject to the limitations
set forth in Section 8(c) hereof, any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
(e) The parties hereto agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to in the
immediately preceding paragraph. No person guilty of fraudulent
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misrepresentation (within the meaning of Section 1l(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
(f)
(g)
9. Selection of Investment Bankers and Underwriters
(a) The Company shall have the exclusive right to
select the investment banker or investment bankers and managers to administer
any public or private offering of its securities. No person may participate in
any underwritten registration hereunder unless such person (a) agrees to sell
such Person's Registrable Common on the basis provided in any underwriting
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
10. Miscellaneous
(a) Amendments and Waivers. The provisions of
this Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of holders of a majority in number of the then outstanding Registrable
Common, if the rights of such holders would be adversely affected.
(b) Notices. All notices and other
communications provided for or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail or over-night courier service:
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(i) If to a holder of Registrable Common,
at the most current address given by such holder to the
Company in accordance with the provisions of this Section
10(d); and
(ii) If to the Company at such other
address, notice of which is given in accordance with the
provisions of this Section 10(d).
(iii) All such notices and communications
shall be deemed to have been duly given: when delivered by
hand, if personally delivered; two business days after being
deposited in the mail, postage prepaid, if mailed, or one
business day after being sent by next-day air courier.
(c) Owner of Registrable Common. The Company will
maintain, or will cause its registrar and transfer agent to maintain, a stock
book with respect to the Common Stock, in which all transfers of Registrable
Common of which the Company has received notice will be recorded. The Company
may deem and treat the person in whose name Registrable Common are registered
in the stock book of the Company as the owner thereof for all purposes,
including, without limitation, the giving of notices under this Agreement.
(d) Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties, excluding any subsequent transferee of Registrable Common other
than (i) transfers to, or for the benefit of, immediate family members of a
Selling Stockholders or (ii) transfers to a trust or similar vehicle whose
beneficiaries are a Selling Stockholder and/or one or more immediate
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family members of such selling Stockholder and which is under the control of a
Selling Stockholder.
(e) Counterparts. This Agreement may be executed
in any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) Governing Law. This Agreement shall be
governed by ad construed in accordance with the laws of the State of New York,
without regard to principles of conflict of law
(h) Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such which may be hereafter declared invalid, void or
unenforceable.
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(i) Entire Agreement. This Agreement is intended
by the parties as a final expression of their agreement, and is intended to be
a complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. This
Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
THE FRESH JUICE COMPANY, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
-------------------------------------
Steven M. Bogen
-------------------------------------
Albert Rountree, IV
-------------------------------------
Daniel Petry
-------------------------------------
James Coyle
-------------------------------------
Mark Feldman
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EXHIBIT D
EXISTING EMPLOYMENT AGREEMENTS WITH CLEAR SPRINGS
1. Pursuant to that certain Shareholders Agreement dated August 24,
1994, Clear Springs is obligated to make annual salary and expense provisions
for President, Brian Duffy.
2. Clear Springs entered into a Brokerage Agreement with Parley
Blackwelder on or about August 12, 1994 for a term of five (5) years, whereby
Clear Springs is obligated to pay Richard Blackwelder commissions as set forth
therein. Clear Springs currently pays Richard Blackwelder a commission of
approximately $900/week based upon his actual sales volume.
3. On or about August 12, 1994, Clear Springs entered into an
Employment Agreement with Parley Blackwelder, the term of which is 2-1/2 years.
4. That certain Agreement and Release executed by Clear Springs and
Stuart Hall (among others) in March of 1994 contains certain severance payments
to Hall.
<PAGE> 1
EXHIBIT 10a
EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement"), dated as
of March 31, 1996, among The Fresh Juice Company, Inc., a Delaware corporation
(the "Company"), Steven M. Bogen, Albert L. Rountree, IV, Daniel Petry, Mark
Feldman and James Coyle (individually, a "Selling Stockholder", and
collectively, the "Selling Stockholders").
This Agreement is in connection with the Merger Agreement,
dated as of the date hereof, among the Company, The Fresh Juice Acquisition
Company, Inc., The Ultimate Juice Company, Inc. and the Selling Stockholders
(the "Merger Agreement") pursuant to which the Company agreed to provide to the
Selling Stockholders certain piggy-back registration rights in respect of
1,140,000 shares of the Company's common stock, par value $.01 per share (the
"Common Stock") issued in connection with such Merger Agreement. Such rights
are set forth exclusively in this Agreement.
The parties hereto hereby agree as follows:
1. Definitions. As used in this Agreement, the following
terms not otherwise defined herein shall have the following meanings:
Exchange Act: The Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
Losses: See Section 8 hereof.
Piggyback Registration: See Section 3 hereof.
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<PAGE> 2
Prospectus: The prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A), as amended or supplemented
by any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Common covered by such Registration Statement and
all other amendments and supplements to the Prospectus, including pre- and
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.
Registrable Common: Four percent of the Common Stock issued
to, and directly held by, each Selling Stockholder pursuant to the terms of the
Merger Agreement.
Registration Expenses: See Section 7 hereof.
Registration Statement: Any registration statement (including
any preliminary or "red herring" registration statement or prospectus) of the
Company, filed with the SEC or any state securities regulatory agency, which
covers any of the Registrable Common pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including pre- and post-effective amendments, all
exhibits and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
Restricted Securities: The Registrable Common upon original
issuance thereof and at all times subsequent thereto until in the case of any
such security, (i) it has been effectively registered under the Securities Act
and disposed of in accordance with
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<PAGE> 3
the Registration Statement covering it or (ii) it is sold or distributed to the
public pursuant to Rule 144 (or any similar provisions then in force) under the
Securities Act.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and
the rules and regulations promulgated by the SEC thereunder.
Underwritten registration or underwritten offering: A
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.
2. Securities Subject to this Agreement
(a) Registrable Common Securities. The
securities entitled to the benefits of this Agreement are the Registrable
Common.
(b) Holders of Registrable Common. The Selling
Stockholders and the successors and assigns set forth in Section 10(d) hereof
shall be deemed the only holders of Registrable Common.
3. Piggyback Registration
(a) Right to Piggyback. Subject to the
provisions of this Section 3, if at any time the Company proposes to file a
registration statement under the Securities Act with respect to an offering by
the Company of its Common Stock (other than a registration statement (a) on
Form S-8 or any successor form to such Form or (b) filed in connection with an
exchange offer or an offering of its common stock made solely to its existing
stockholders in connection with a rights offering or solely to employees of the
Company), for its own account, then the Company shall give written notice of
such proposed filing to the
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<PAGE> 4
holders of Registrable Common at least 30 days before the anticipated filing
date. Such notice shall offer such holders the opportunity to register such
amount of Registrable Common as each such holder may request ("Piggyback
Registration"). Subject to the provisions of this Section 3, the Company shall
include in each such Piggyback Registration all Registrable Common requested to
be included in the registration for such offering. If any holder of
Registrable Common desires to have shares of Registrable Common so registered,
such holder shall so advise the Company in writing within 10 days after the
date of the Company's notice of the anticipated filing date, setting forth the
number of shares of Registrable Common for which registration is so requested.
The holders of Registrable Common shall be permitted to withdraw all or part of
the Registrable Common from a Piggyback Registration at any time prior to the
effective date of such Piggyback Registration.
(b) Priority on Piggyback Registrations. The
Company shall cause the managing underwriter or underwriters of a proposed
underwritten offering to permit holders of Registrable Common requested to be
included in the registration for such offering to include all such Registrable
Common on the same terms and conditions as the Common Stock of the Company
included therein. Notwithstanding the foregoing, if the managing underwriter or
underwriters of such offering deliver(s) a written notice to the holders of
Registrable Common that the total amount of securities which such holders, the
Company and any other persons or entities having rights to participate in such
registration, intend to include in such offering is such as to materially and
adversely affect the success of such offering, then the amount of securities to
be offered for the account of holders of Registrable
4
<PAGE> 5
Common, as the case may be, shall be reduced (to zero if necessary) or limited
pro rata in proportion to their respective dollar amounts of Registrable Common
requested to be registered to the extent necessary to reduce the total amount
of securities to be included in such offering to the amount recommended by such
managing underwriter or underwriters.
(c) Conditions to Piggyback Registration. The
rights of holders of Registrable Common to have any shares of Registrable
Common included in a Registration statement shall be subject to the following
conditions:
(i) Holders of Registrable Common shall
furnish the Company in a timely manner with all information required by the
applicable rules and regulations of the SEC or any applicable state securities
regulatory agency concerning the proposed method of sale or other disposition
of the Registrable Common, the identity of and compensation to be paid to any
proposed underwriter(s) to be employed in connection therewith, and such other
information as may be reasonably required by the Company properly to prepare
and file such Registration Statement in accordance with applicable provisions
of the Securities Act and the rules and regulations of any applicable state
securities regulatory agency;
(ii) if holders of Registrable Common
desire to sell and distribute any shares of Common Stock over a period of time,
or from time to time, at then prevailing market prices, then holders of
Registrable Common shall execute and deliver to the Company such written
undertakings as the Company and its counsel may reasonably require in order to
assure full compliance with relevant provisions of the Securities Act, the
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<PAGE> 6
Exchange Act or the rules and regulations of any applicable state securities
regulatory agency;
(iii) in the case of an underwritten
offering on behalf of holders of Registrable Common in connection with a
Piggyback Registration, the managing underwriter(s) thereof shall be subject to
the approval of the Company, such approval not to be unreasonably withheld; and
(iv) the offering price of any share of
Registrable Common subject to Piggyback Registration shall be no less than the
offering price for any share of Common Stock then to be registered for sale for
the account of the Company or other security holder of the Company, unless such
shares of Registrable Common are to be offered from time to time based on the
then prevailing market price.
(d) Termination of Piggyback Registration Rights.
The obligations of the Company to any holder of Registrable Common with respect
to Piggyback Registration provided for in this Section 3:
(i) shall continue until such time as
counsel to the Company is of the opinion and has so advised the Company and the
holder of Registrable Common that such holder has no further obligations to
comply with the registration requirements of the Securities Act or to deliver a
prospectus meeting the requirements of Section 10(a)(3) of the Securities Act
in connection with further sales by such holder of Registrable Common;
(ii) shall not apply to any proposed
sale(s) or other disposition(s) or offer(s) for any shares of Registrable
Common with respect to which counsel
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<PAGE> 7
for the Company is of the opinion and has so advised the Company and the holder
of Registrable Common that such holder has no obligation to comply with the
registration requirements of the Securities Act or to deliver a prospectus
meeting the requirements of Section 10(a)(3) of the Securities Act;
(iii) shall not apply with respect to any
holder of Registrable Common who beneficially owns, at the time a request for
Piggyback Registration is made pursuant to Section 3(a) hereof, less than
20,000 shares of Common Stock;
(iv) shall terminate with respect to any
holder of Registrable Common who has exercised Piggyback Registration before
pursuant to Section 3(a) hereof and the Registration Statement related thereto
registering the full number of shares of Registrable Common requested by such
holder to be so registered was declared effective by the SEC; and
(v) shall terminate on the second
anniversary of the date of this Agreement.
4. Registration of Securities Other than Registrable
Common. The Company is under no obligation to the Selling Stockholders or any
of their respective affiliates to register, or grant a right of registration
with respect to, any securities of the Company (other than the Registrable
Common) under the Securities Act or any state securities laws or regulations.
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<PAGE> 8
5. Hold-Back Agreements.
(a) Restrictions on Public Sale by Holders of
Registrable Common. Each holder of Registrable Common whose Registrable Common
are covered by a Registration Statement filed pursuant to Section 3 hereof,
agrees, if requested by the managing underwriter or underwriters in an
underwritten offering, not to effect any public sale or distribution of any of
the Company's securities, including a sale pursuant to Rule 144 under the
Securities Act (except as part of such underwritten registration), during the
10-day period prior to, and during the 90-day period beginning on, the closing
date of each underwritten offering made pursuant to such Registration
Statement, to the extent timely notified in writing by the Company or the
managing-underwriters.
6. Registration Procedures
(a) In connection with the Company's registration
obligations pursuant to Section 1 hereof, the Company shall effect such
registrations to permit the sale of such Registrable Common in accordance with
the intended method or methods of disposition thereof, and pursuant thereto the
Company shall (and, in the case of Section 4(n) hereof, the Company shall):
(i) prepare and file with the SEC a
Registration Statement on any appropriate form under the Securities Act, which
form shall be available for the sale of the Registrable Common by the holders
thereof in accordance with the intended method or methods of distribution
thereof, and cause each such Registration Statement to become effective and
remain effective as provided herein; provided, however, that before filing a
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<PAGE> 9
Registration Statement or prospectus or any amendments or supplements thereto
(including documents which would be incorporated or deemed to be incorporated
therein by reference) the Company shall furnish to the holders of the
Registrable Common covered by such Registration Statement and the managing
underwriters, if any, copies of all such documents proposed to be filed, which
documents will be subject to the review of such holders and such underwriters,
and the Company shall not file any such Registration Statement or amendment
thereto or any Prospectus or any supplement thereto (including such documents
which, upon filing, would be or would be deemed to be incorporated by reference
therein) to which the holders of a majority of the Registrable Common covered
by such Registration Statement or the managing underwriter, if any, shall
reasonably object on a timely basis;
(ii) prepare and file with the SEC such
amendments and post-effective amendments to each Registration Statement
continuously as may be necessary to keep such Registration Statement effective
for the applicable period; cause the related Prospectus to be supplemented by
any required Prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 (or any similar provisions then in force) under the Securities Act;
and comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement during the
applicable period in accordance with the intended methods of disposition by the
sellers thereof set forth in such Registration Statement as so amended or to
such Prospectus as so supplemented;
(iii) notify the selling holders of
Registrable Common and the managing underwriters, if any, promptly, and (if
requested by any such person) confirm such
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<PAGE> 10
notice in writing, (i) when a Prospectus or any Prospectus supplement or
post-effective amendment related to such Registrable Common has been filed,
and, with respect to a Registration Statement or any post-effective amendment
related to such Registrable Common, when the same has become effective, (ii) of
any request by the SEC for amendments or supplements to a Registration
Statement or related Prospectus or for additional information, (iii) of the
issuance by the SEC of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose,
(iv) if at any time the representations and warranties of the Company and the
Company contained in any agreement (including any underwriting agreement)
contemplated by paragraph (n) below cease to be true and correct, (v) of the
receipt by the Company of any notification with respect to the suspension of
the qualification or exemption from qualification of any of the Registrable
Common for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, (vi) of the happening of any event which makes any
statement made in such Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue
or which requires the making of any changes in a Registration Statement or
related Prospectus so that such documents will not 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, and (vii) of the
Company's reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate;
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<PAGE> 11
(iv) use every reasonable effort to obtain
the withdrawal of any order suspending the effectiveness of a Registration
Statement, or the lifting of any suspension of the qualification (or exemption
from qualification) of any of the Registrable Common for sale in any
jurisdiction, at the earliest possible moment;
(v) if requested by the managing
underwriters or any holder of Registrable Common being sold in connection with
an underwritten offering, (i) immediately incorporate in a Prospectus
supplement or post-effective amendment such information as the managing
underwriters and such holder agree should be included therein as may be
required by applicable law, (ii) make all required filings of such Prospectus
supplement or such post-effective amendment as soon as the Company has received
notification of the matters to be incorporated in such Prospectus supplement or
post-effective amendment, and (iii) supplement or make amendments to any
Registration Statement if requested by any holder of Registrable Common covered
by such Registration Statement or any underwriter of such Registrable Common;
(vi) furnish to each selling holder of
Registrable Common and each managing underwriter, if any, without charge, at
least one signed copy of the Registration Statement or Statements and any
post-effective amendment thereto, including financial statements and schedules,
all documents incorporated therein by reference or deemed incorporated therein
by reference and all exhibits (including those previously furnished or
incorporated by reference) at the earliest practicable time under the
circumstances before the filing of such documents with the SEC;
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<PAGE> 12
(vii) deliver to each selling holder of
Registrable Common and the underwriters, if any, without charge, as many copies
of the Prospectus or Prospectuses (including each preliminary prospectus) and
any amendment or supplement thereto as such persons may reasonably request; the
Company consents to the use of such Prospectus or any amendment or supplement
thereto by each of the selling holders of Registrable Common and the
underwriters, if any, in connection with the offering and sale of the
Registrable Common covered by such Prospectus or any amendment or supplement
thereto;
(viii) prior to any public offering of
Registrable Common, to register or qualify or cooperate with the selling
holders of Registrable Common, the underwriters, if any, and their respective
counsel in connection with the registration or qualification (or exemption from
such registration or qualification) of such Registrable Common for offer and
sale under the securities or Blue Sky laws of such jurisdictions as any seller
or underwriter reasonably requests in writing; keep each such registration or
qualification (or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and do any and all
other acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Common covered by the applicable Registration
Statement; provided, however, that the Company will not be required to (A)
qualify generally to do business in any jurisdiction where it is not then so
qualified or (B) take any action which would subject it to general service of
process in any such jurisdiction where it is not then so subject;
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<PAGE> 13
(ix) cooperate with the selling holders of
Registrable Common and the managing underwriters, if any, to facilitate the
timely preparation and delivery of certificates representing Registrable Common
to be sold, which certificates shall not bear any restrictive legends; and
enable such Registrable Common to be in such denominations and registered in
such names as the managing underwriters may request at least two business days
prior to any sale of Registrable Common to the underwriters;
(x) cause the Registrable Common covered
by the applicable Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to enable
the seller or sellers thereof or the underwriters, if any, to consummate the
disposition of such Registrable Common;
(xi) upon the occurrence of any event
contemplated by Section 6(c)(vi) or 6(c)(vii) above, prepare a supplement or
post-effective amendment to the applicable Registration Statement or a
supplement to the related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Common being sold thereunder, such
Prospectus will not contain an untrue statement of a material fact or omit to
state a 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;
(xii) cause all Registrable Common covered
by such Registration Statement to be (i) listed on each securities exchange, if
any, on which similar securities issued by the Company are then listed, or (ii)
authorized to be quoted on the
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National Association of Securities Dealers Automated Quotation System
("NASDAQ") or the National Market System of NASDAQ if the securities so
qualify; in each case, if requested by the holders of a majority of the
Registrable Common covered by such Registration Statement or the managing
underwriter;
(xiii) provide CUSIP numbers for the
Registrable Common not later than the effective date of the Registration
Statement; and
(xiv) furnish to the holders of Registrable
Common a copy, if so prepared, of the so-called "cold comfort" letter signed by
the independent public accountants who have certified the Company's financial
statements include in the Registration Statement, covering substantially the
same matters with respect to such Registration Statement (and the Prospectus
included thereunder) and, with respect to events subsequent to the date of such
financial statements, as are customarily covered, and subject to such
qualifications, limitations and disclaimers as are customarily included in
accountants' letters delivered to underwriters in connection with underwritten
public offerings of securities.
The Company may require each seller of Registrable Common as
to which any registration is being effected to furnish to the Company such
information regarding the distribution of such Registrable Common as the
Company may from time to time reasonably request in writing.
Each holder of Registrable Common agrees by acquisition of
such Registrable Common that, upon receipt of any notice from The Company of
the happening of any event of the kind described in Section 6(c)(ii),
6(c)(iii), 6(c)(v), 6(c)(vi) or 6(c)(vii) hereof, such
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<PAGE> 15
holder will forthwith discontinue disposition of such Registrable Common
covered by such Registration Statement or Prospectus until such holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 6(k) hereof, or until it is advised in writing (the "Advice") by the
Company that the use of the applicable Prospectus may be resumed, and has
received copies of any additional or supplemental filings which are
incorporated or deemed to be incorporated by reference in such Prospectus.
7. Registration Expenses
(a) The following fees and expenses incident to
the preparation of the Registration Statement shall be borne by the Company:
(i) all registration and filing fees, including fees and expenses relating to
the Company's securities and the Registrable Common (A) with respect to filings
required to be made with the National Association of Securities Dealers, Inc.
and (B) compliance with securities or Blue Sky laws (fees and disbursements in
connection with Blue Sky qualifications of Registrable Common in such states
where the Company and the managing underwriter do not intend to distribute the
Company's securities pursuant to the Registration Statement shall be borne by
the holders of Registrable Common), (ii) printing expenses of the Registration
Statement requested by the managing underwriter, (iii) fees and disbursements
of counsel for the Company, (iv) fees and disbursements of the Company's
independent certified public accountants, (v) underwriter's fees and expenses
(excluding discounts, commissions or fees of underwriters, selling brokers,
dealer managers or similar securities industry professionals relating to the
distribution of the Registrable Common or legal expenses of any person other
than the Company and the underwriters) (but
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including the fees and expenses of any "qualified independent underwriter" or
other independent appraiser participating in an offering pursuant to Section 3
of Schedule E to the By-laws of the National Association of Securities Dealers,
Inc.), (vi) Securities Act liability insurance if the Company so desires such
insurance, and (vii) fees and expenses of all other persons retained by the
Company and not specifically required as a result of the registration of any
Registrable Common (all such expenses being herein called "Registration
Expenses") shall be borne the Company whether or not any of the Registration
Statements become effective. The Company shall, in any event, pay its internal
expenses (including, without limitation, all salaries and expenses of their
respective officers and employees performing legal or accounting duties), the
expense of any annual audit, the fees and expenses incurred in connection with
the listing of the securities to be registered on any securities exchange on
which similar securities issued by the Company are then listed and rating
agency fees and the fees and expenses of any person, including special experts,
retained by the Company which is not related to the registration of Registrable
Common.
8. Indemnification
(a) Indemnification by the Company. The Company
shall indemnify and hold harmless, to the full extent permitted by law, each
holder of Registrable Common registered pursuant to this Agreement from and
against all losses, claims, damages, liabilities and costs including, without
limitation, reasonable costs of preparation and attorneys' fees and expenses
(collectively, "Losses"), as incurred, arising out of or based upon (i) any
violation of any law, rule or regulation promulgated under the Securities Act,
the Exchange
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Act or by any state securities regulatory agency applicable to any of the
transactions contemplated hereby or (ii) any untrue or alleged untrue statement
of a material fact contained in any Registration Statement, Prospectus or
preliminary prospectus or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same are based solely upon
information furnished in writing to the Company by such holder expressly for
use therein.
(b) Indemnification by Holders of Registrable
Common. In connection with any Registration Statement in which a holder of
Registrable Common is participating, such holder of Registrable Common shall
furnish to the Company in writing such information as the Company requests for
use in connection with any Registration Statement or Prospectus and agrees to
indemnify, to the full extent permitted by law the Company, its directors and
officers, agents and employees, each person who controls the Company (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act), and the directors, officers, agents or employees of such controlling
persons, from and against all Losses arising out of or based upon (i) any
violation of any law, rule or regulation promulgated under the Securities Act,
the Exchange Act or by any state securities regulatory agency applicable to any
of the transactions contemplated hereby or (ii) any untrue statement of a
material fact or any omission of a material fact required to be stated in any
Registration Statement or Prospectus or preliminary prospectus or necessary to
make the statements therein not misleading, to the extent, but only to the
extent, that such untrue
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statement or omission is contained in any information so furnished in writing
by such holder to the Company expressly for use in such Registration Statement
or Prospectus and that such information was solely relied upon by the Company
in preparation of such Registration Statement, Prospectus or preliminary
prospectus. The Company shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in the distribution to the same extent as provided
above with respect to information so furnished in writing by such persons
expressly for use in any Prospectus or Registration Statement.
(c) Conduct of Indemnification Proceedings. If
any action or proceeding (including any governmental investigation or inquiry)
shall be brought or any claim shall be asserted against any person or entity
entitled to indemnity hereunder (an "Indemnified Party"), such Indemnified
Party shall promptly notify the party from which such indemnity is sought (the
"Indemnifying Party") in writing, and the Indemnifying Party shall assume the
defense thereof, including the employment of counsel reasonably satisfactory to
the Indemnified Party and the payment of all fees and expenses incurred in
connection with the defense thereof. All such fees and expenses (including any
fees and expenses incurred in connection with investigating or preparing to
defend such action or proceeding) shall be paid to the Indemnified Party, as
incurred, within five days of written notice thereof to the Indemnifying Party
(regardless of whether it is ultimately determined that an Indemnified Party is
not entitled to indemnification hereunder). Any such Indemnified Party shall
have the right to employ separate counsel in any such action, claim or
proceeding and to participate in
18
<PAGE> 19
the defense thereof, but the fees and expenses of such counsel shall be the
expenses of such Indemnified Party unless (a) the Indemnifying Party has agreed
to pay such fees and expenses or (b) the Indemnifying Party shall have failed
to promptly assume the defense of such action, claim or proceeding and to
employ counsel reasonably satisfactory to the Indemnified Party in any such
action, claim or proceeding or (c) the named parties to any such action, claim
or proceeding (including any impleaded parties) include both such Indemnified
Party and the Indemnifying Party, and such Indemnified Party shall have been
advised by counsel that there may be one or more legal defenses available to it
which are different from or additional to those available to the Indemnifying
Party (in which case, if such Indemnified Party notifies the Indemnifying Party
in writing that it elects to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to assume
the defense of such action, claim or proceeding on behalf of such Indemnified
Party, it being understood, however, that the Indemnifying Party shall not, in
connection with any one such action, claim or proceeding or separate but
substantially similar or related actions, claims or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for all such Indemnified
Parties, unless in the reasonable judgment of any such Indemnified Party a
conflict of interest may exist between such Indemnified Party and any other of
such Indemnified Parties with respect to such action, claim or proceeding, in
which event the Indemnifying Party shall be obligated to pay the fees and
expenses of such additional counsel or counsels).
19
<PAGE> 20
(d) Contribution. If the indemnification
provided for in this Section 8 is unavailable to an Indemnified Party under
Section 8(a) or 8(b) hereof (other than by reason of exceptions provided in
such sections) in respect of any Losses, then each applicable Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall, jointly and
severally, contribute to the amount paid or payable by such Indemnified Party
as a result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions, statements or omissions which resulted in such Losses as well
as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of
a material fact, has been taken or made by, or relates to information supplied
by, such Indemnifying Party or Indemnified Party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such action, statement or omission. The amount paid or payable by a party as a
result of any Losses shall be deemed to include, subject to the limitations set
forth in Section 8(c) hereof, any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or proceeding.
(e) The parties hereto agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to in the
immediately preceding paragraph. No person guilty of fraudulent
20
<PAGE> 21
misrepresentation (within the meaning of Section 1l(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
(f)
(g)
9. Selection of Investment Bankers and Underwriters
(a) The Company shall have the exclusive right to
select the investment banker or investment bankers and managers to administer
any public or private offering of its securities. No person may participate in
any underwritten registration hereunder unless such person (a) agrees to sell
such Person's Registrable Common on the basis provided in any underwriting
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
10. Miscellaneous
(a) Amendments and Waivers. The provisions of
this Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of holders of a majority in number of the then outstanding Registrable
Common, if the rights of such holders would be adversely affected.
(b) Notices. All notices and other
communications provided for or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail or over-night courier service:
21
<PAGE> 22
(i) If to a holder of Registrable Common,
at the most current address given by such holder to the
Company in accordance with the provisions of this Section
10(d); and
(ii) If to the Company at such other
address, notice of which is given in accordance with the
provisions of this Section 10(d).
(iii) All such notices and communications
shall be deemed to have been duly given: when delivered by
hand, if personally delivered; two business days after being
deposited in the mail, postage prepaid, if mailed, or one
business day after being sent by next-day air courier.
(c) Owner of Registrable Common. The Company will
maintain, or will cause its registrar and transfer agent to maintain, a stock
book with respect to the Common Stock, in which all transfers of Registrable
Common of which the Company has received notice will be recorded. The Company
may deem and treat the person in whose name Registrable Common are registered
in the stock book of the Company as the owner thereof for all purposes,
including, without limitation, the giving of notices under this Agreement.
(d) Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties, excluding any subsequent transferee of Registrable Common other
than (i) transfers to, or for the benefit of, immediate family members of a
Selling Stockholders or (ii) transfers to a trust or similar vehicle whose
beneficiaries are a Selling Stockholder and/or one or more immediate
22
<PAGE> 23
family members of such selling Stockholder and which is under the control of a
Selling Stockholder.
(e) Counterparts. This Agreement may be executed
in any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) Governing Law. This Agreement shall be
governed by ad construed in accordance with the laws of the State of New York,
without regard to principles of conflict of law
(h) Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such which may be hereafter declared invalid, void or
unenforceable.
23
<PAGE> 24
(i) Entire Agreement. This Agreement is intended
by the parties as a final expression of their agreement, and is intended to be
a complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. This
Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
THE FRESH JUICE COMPANY, INC.
By: /s/ Steven Smith
-----------------------------------
Name: Steven Smith
---------------------------------
Title: Chief Executive Officer
--------------------------------
/s/ Steven M. Bogen
--------------------------------------
Steven M. Bogen
/s/ Albert Rountree, IV
--------------------------------------
Albert Rountree, IV
/s/ Daniel Petry
--------------------------------------
Daniel Petry
/s/ James Coyle
--------------------------------------
James Coyle
/s/ Mark Feldman
--------------------------------------
Mark Feldman
24
<PAGE> 1
EXHIBIT 10b
STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT, dated as of March 31, 1996,
among Steve Smith ("Smith") and Steven M. Bogen ("Bogen") (each a
"Stockholder", and collectively, the "Stockholders").
W I T N E S S E T H :
WHEREAS, the Stockholders collectively hold a significant
number of shares of The Fresh Juice Company, Inc.'s, a Delaware corporation
(the "Company"), common stock, par value $.01 per share (the "Common Stock");
and
WHEREAS, the parties hereto desire to enter into certain
arrangements with respect to the governance of the Company, including, among
other things, the nomination and election of individuals to the Company's Board
of Directors.
NOW, THEREFORE, the parties hereto agree as follows:
1. Board of Directors; Election of Directors. (a) Each
Stockholder agrees that Smith and Bogen shall each have the right to designate
one-half of the nominees (the "Management Nominees") to the Board of Directors
of the Company. As of the date hereof, the Board of Directors of the Company
consists of four members and each Stockholder agrees, in the event the number
of members to the Company's Board of Directors is increased or decreased, that
such increase or decrease shall result in an even number of members to the
Company's Board of Directors in order to assure that each of Smith and Bogen
shall be able to nominate an equal number of members to the Company's Board of
Directors.
(b) Each Stockholder agrees to neither nominate, vote in
favor of, or assist in any manner any individual in opposition of any of the
Management Nominees, nor take any action, directly or indirectly, intended to
remove or cause the removal of any of the Management Nominees from the Board of
Directors of the Company.
(c) Each Stockholder agrees, and covenants to, vote each
share of the Company's capital stock held by such Stockholder to elect each of
the Management Nominees to the Company's Board of Directors at each annual and
special meeting of the holders of the Company's capital stock or in any written
consent in lieu of such meeting.
(d) In the event of the death, removal or resignation of any
of the Management Nominees from the Board of Directors of the Company, each
Stockholder agrees, and covenants to, vote each share of the Company's capital
stock held by such Stockholder to elect in replacement thereof an individual
designated by the party who had designated the director whose death, removal or
resignation is the cause of such vacancy.
<PAGE> 2
2. Modification of Certificate of Incorporation and
By-Laws. Each Stockholder covenants that he shall act in accordance with the
Company's Certificate of Incorporation and By-laws as in effect as of the date
hereof (the "Charter Documents"). Each Stockholder covenants to vote each
share of the Company's capital stock held by such Stockholder at any regular or
special meeting of holders of the Company's capital stock or in any written
consent executed in lieu of such meeting, and shall take all action necessary
to ensure (i) that the Charter Documents do not, at any time, conflict with the
provisions of this Agreement and (ii) that, unless an amendment is approved by
an unanimous vote of the Company's Board of Directors, the Charter Documents
continue to be in effect.
3. Restriction on Sale of Common Stock. Each of
Smith and Bogen agree that, until the second anniversary of the date hereof or
until they shall hereafter otherwise agree, neither party shall effectuate a
sale of the Company's Common Stock held by such Stockholder other than pursuant
to (i) a sale effectuated through a broker on the NASDAQ-Small Cap System,
NASDAQ National Market System or any national or regional securities exchange
or (ii) an effective registration statement under the Securities Act of 1933,
as amended, and the rules and regulations promulgated thereunder.
4. Term. This Agreement shall terminate as follows:
(a) Upon the unanimous agreement of all parties hereto who
then hold capital stock of the Company.
(b) Upon the happening of any of the following events:
(i) At such time as the total number of shares of
the Company's Common Stock owned by the Stockholders
constitute less than 15% (on a fully diluted basis) of the
total number of shares of outstanding Common Stock;
(ii) With respect to any individual Stockholder,
at such time as the total number of shares of the Company's
Common Stock owned by such Stockholder, members of his
immediate family, and trusts or similar vehicles whose
beneficiaries are such Stockholder and/or members of his
immediate family and which vehicle is under the control of
such Stockholder, constitutes less than 7% (on a fully diluted
basis) of the total number of shares of outstanding Common
Stock;
(iii) A trustee or receiver is appointed for the
Company or for the major part of its property and is not
discharged within thirty (30) days after such appointment; or
2
<PAGE> 3
(iv) Bankruptcy, reorganization, arrangement or
insolvency proceedings, or other proceedings for relief under
any bankruptcy or similar law or laws for the relief of
debtors, are instituted against the Company, are consented to
or are not dismissed within sixty (60) days after such
institution; or
(c) In any event, not later than ten (10) years from the
date of the execution and delivery hereof.
5. Representations and Warranties. Each of the
Stockholders represents and warrants to the other Stockholders, individually
and collectively, as follows:
(a) its execution, delivery and performance of this
Agreement will not result in any breach of any instrument, agreement,
obligation or document or any violation of any law, regulation order or decree
to which it is a party; and
(b) as of the date hereof, it owns such number of shares
of Common Stock as set forth on Schedule A hereto free and clear of any lien or
encumbrance whatsoever.
6. Remedies. The parties hereto agree and acknowledge
that money damages may not be an adequate remedy for breach of the provisions
of this Agreement and that any Stockholder shall be entitled, in its sole
discretion, to apply to any court of competent jurisdiction for specific
performance or injunctive relief in order to enforce or prevent any violations
of the provisions of this Agreement, in addition to its remedies at law.
7. Notices. Any notice provided for in this Agreement
shall be in writing and shall be either personally delivered, sent by telex or
mailed by certified mail, return receipt requested to the Stockholders at the
address for each set forth on the signature page of this Agreement or at such
other address or to the attention of such other person as the recipient party
has specified by prior written notice to the sending party. Notice shall be
effective when so personally delivered, one business day after being sent by
telex or five days after being mailed.
8. Modification, Amendment, Waiver. No modification
amendment or waiver of any provision of this Agreement shall be effective
unless approved in writing by each of the parties hereto. The failure of any
party at any time to enforce any of the provisions of this Agreement shall in
no way be construed as a waiver of such provisions and shall not affect the
rights of the party thereafter to enforce the provisions of this Agreement in
accordance with its terms.
9. Arbitration. Any and all disputes arising out of,
under, in connection with, or relating to this Agreement (including, without
limitation, valuation disputes) shall be
3
<PAGE> 4
finally settled by arbitration in the City of New York, or in such other place
as the parties hereto agree, in accordance with the rules then in effect of the
American Arbitration Association. The board of arbitrators shall be composed
of three arbitrators, each being qualified to make evaluations of the kind
under dispute. Each of the parties to such arbitration shall appoint one
arbitrator and the two arbitrators so appointed shall appoint the third
arbitrator within thirty days after their appointment. If either party fails
to appoint its arbitrator within fifteen days after written request by the
other party, either party may request the President of the American Arbitration
Association to make such appointment within fifteen days after such request to
the President. The arbitration award shall be final and binding on the parties
and may include costs, including attorneys' fees. Any arbitration award may be
enforced in any court having jurisdiction over the party against which
enforcement is sought.
10. Entire Agreement. This document embodies the entire
agreement and understanding between and among the parties hereto with respect
to the subject matter hereof, and supersedes and preempts any prior
understandings, agreements, or representations by or among the parties, written
or oral, that may have related to the subject matter hereof.
11. Transferees, Heirs, etc. This Agreement will bind and
inure to the benefit of and be enforceable by the parties hereto and their
respective legal heirs, executors or administrators and transferees (i) who are
immediate family members of the Stockholder or (ii) which are trusts or similar
vehicles whose beneficiaries are such Stockholder and/or members of his
immediate family and which vehicle is under the control of such Stockholder.
12. Counterparts. This Agreement may be executed in
separate counterparts, each of which will be an original and all of which taken
together will constitute one and the same Agreement.
13. APPLICABLE LAW. ALL QUESTIONS CONCERNING THIS
AGREEMENT WILL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW JERSEY, WITHOUT REGARDS TO THE CONFLICT OF LAWS PRINCIPLES
THEREOF.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first written above.
/s/ Steve Smith
---------------------------------------
Steve Smith
5 Lawson Lane
---------------------------------------
Address
4
<PAGE> 5
Great Neck, N.Y.
---------------------------------------
City, State & Zip Code
/s/ Steven M. Bogen
---------------------------------------
Steven M. Bogen
81 Dahlia Street
---------------------------------------
Address
Staten Island, N.Y.
---------------------------------------
City, State & Zip Code
5
<PAGE> 1
EXHIBIT 10C
EXHIBIT F
VOTING AGREEMENT
THIS AGREEMENT, made at of this 31st day of March, 1996, among
those persons whose names appear on the signature page of this Agreement under
the heading "Voter" (hereinafter, together with persons who may succeed them as
hereinafter provided, called the "Voter"), those persons whose names appear on
the signature page of this Agreement under the heading "Stockholders"
(hereinafter, each a "Stockholder"), and The Fresh Juice Company, Inc., a
Delaware corporation (hereinafter, the "Company")
WHEREAS, in order to enhance the continuity of the management
of the Company and to facilitate the transactions contemplated by that certain
Merger Agreement, dated as of the date hereof, among the Company, The Fresh
Juice Company of Florida, Inc., Clear Springs Citrus, Inc., Brian Duffy and The
Bogen Group, L.L.C. (the "Merger Agreement"), the parties hereto desire to
enter into this Agreement,
NOW THEREFORE, in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereby agree as follows:
1. Each Stockholder agrees that, for the term of this
Agreement, all shares of common stock, par value $.01 per share of the Company
(the "Common Stock") held by such Stockholder at any time and from time to
time, shall be voted by the Voter in the manner hereafter provided, and to that
end does hereby irrevocably constitute the Voter as his proxy to vote the same
as so provided. Each Stockholder represents and warrants that the shares of
Common Stock listed on Exhibit A hereto opposite such Stockholder's name
constitute all of the shares of Common Stock of the Company owned
<PAGE> 2
by such Stockholder as of the date hereof, and all such shares are hereinafter
collectively referred to as the "Shares". Each Stockholder hereby represents
and warrants to the Voter that (a) he owns and has the right to vote the number
of shares of the Common Stock set forth opposite his name on Exhibit A attached
hereto, (b) he has full power to enter into this Agreement and has not, prior
to the date of this Agreement, executed or delivered any proxy or entered into
any other voting agreement or similar arrangement other than that certain
Stockholders Agreement, dated as of the date hereof, between Steven Smith and
Steven M. Bogen (the "Stockholders Agreement") and (c) he will not take any
action inconsistent with the purposes and provisions of this Agreement, other
than the sale, at any time and from time to time, of the Shares effectuated
through a broker on the NASDAQ Small-Cap System.
2. In the event that subsequent to the date of this
Agreement any shares of Common Stock are issued on, or in exchange for, any of
the Shares held by the Stockholders by reason of any stock dividend, stock
split, consolidation of shares, reclassification, or consolidation such Shares
shall be deemed to be Shares for purposes of this Agreement.
3. The Voter shall have the power and authority to vote
the Shares at the 1996 Annual Meeting of Stockholders of the Company with
respect to all matters relating to the transactions contemplated by the Merger
Agreement, and in particular the amendment to the Company's Certificate of
Incorporation to increase the number of authorized shares of capital stock of
the Company; provided, however, that the Voter may not vote the Shares in any
manner inconsistent with the terms of the Stockholders Agreement; and further,
provided, that the Voter shall have no right to vote
2
<PAGE> 3
the Shares in connection with issues or votes not directly related to the
transactions contemplated in the Merger Agreement or the Amendment to the
Company's Certificate of Incorporation to increase the number of authorized
shares of capital stock of the Company. In casting the votes, the Voter shall
not be held by this Agreement to any specified standard of care or fiduciary
responsibility and in no event shall he be liable to any of the Stockholders
except for his gross negligence or wilful misconduct.
In addition, (a) The Voter shall have no duties or
responsibilities other than those expressly set forth herein. The Voter shall
have no duty to enforce any obligation of any person, or to perform any other
act. The Voter shall be under no liability to any party hereto or to anyone
else by reason of any failure on the part of any party hereto or any other
person to perform such person's obligations under any such document. Except
for joint instructions given to the Voter by all parties hereto, the Voter
shall not be obligated to recognize any agreement between any or all of the
persons referred to herein, notwithstanding that references thereto may be made
herein and whether or not he has knowledge thereof.
(b) The Voter shall not be liable to the other parties
hereto or to anyone else for any action taken or omitted by him, or any action
suffered by him to be taken or omitted, in good faith and in the exercise of
his own best judgment. The Voter may rely conclusively and shall be protected
in acting upon any order, notice, demand, certificate, opinion or advice of
counsel (including counsel chosen by the Voter), statement, instrument, report
or other paper or document (not only as to its due execution and the validity
and effectiveness of its provisions, but also as
3
<PAGE> 4
to the truth and acceptability of any information therein contained) which is
believed by the Voter to be genuine and to be signed or presented by the proper
person or persons. The Voter shall not be bound by any notice or demand, or
any waiver, modification, termination or rescission of this Agreement or any of
the terms hereof, unless evidenced by a writing delivered to the Voter signed
by all parties hereto and, if the duties or rights of the Voter are affected,
unless it shall give its prior written consent thereto.
(c) The Voter shall not be responsible for the
sufficiency or accuracy of the form of, or the execution, validity, value or
genuineness of, any document or property received, held or delivered by him
hereunder, or of any signature or endorsement thereon, or for any lack of
endorsement thereon, or for any description therein, nor shall the Voter be
responsible or liable to the other parties hereto or to anyone else in any
respect on account of the identity, authority or rights of the persons
executing or delivering or purporting to execute or deliver any document or
property or this Agreement.
(d) The Voter shall have the right to assume in the
absence of written notice to the contrary from the proper person or persons
that a fact or an event by reason of which an action would or might be taken by
the Voter does not exist or has not occurred, without incurring liability to
the other parties hereto or to anyone else for any action taken or omitted, or
any action suffered by it to be taken or omitted, in good faith and in the
exercise of its own best judgment, in reliance upon such assumption.
(e) The Voter shall be indemnified and held harmless by
each Stockholder from and against any and all expenses, including
4
<PAGE> 5
counsel fees and disbursements, or loss suffered by the Voter in connection
with any action, suit or other proceeding involving any claim, or in connection
with any claim or demand, which in any way, directly or indirectly, arises out
of or relates to this Agreement or the services of the Voter hereunder.
Promptly after the receipt by the Voter of notice of any demand or claim or the
commencement of any action, suit or proceeding, the Voter shall, if a claim in
respect thereof is to be made against any of the other parties hereto, notify
such other parties thereof in writing; but the failure by the Voter to give
such notices shall not relieve any party from any liability which such party
may have to the Voter hereunder. For the purposes hereof, the term "expense or
loss" shall include all amounts paid or payable to satisfy any claim, demand or
liability, or in settlement of any claim, demand, action, suit or proceeding
settled with the express written consent of the Voter and all costs and
expenses, including but not limited to, counsel fees and disbursements, paid or
incurred in investigating or defending against any such claim, demand, action,
suit or proceeding.
4. This Agreement shall terminate and expire on the
earlier of (a) immediately following the completion of the 1996 Annual Meeting
of the Stockholders of the Company, including any adjournment thereof or (b)
December 31, 1996.
5. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and upon and to others as follows:
Any Stockholder: Upon and to his estate or personal
representative and his legal heirs, executors or administrators and transferees
who are immediate family members of the Stockholder.
5
<PAGE> 6
Any Voter: Upon and to any person who shall succeed to or
replace such person as such director; and
The Company: any one or more successor(s) by way of merger,
consolidation, sale of assets or otherwise.
6. The Company shall cause executed counterparts or
certified copies of this Agreement to be deposited in its principal offices and
to be made available at reasonable times and intervals for inspection by any
stockholder of the Company requesting such inspection.
7. Each Stockholder expressly agrees that this Agreement
shall be specifically enforceable in any court of competent jurisdiction in
accordance with its terms against each of the parties hereto.
8. This Agreement shall be construed and enforced in
accordance with the laws of the State of New Jersey governing corporations
organized under the laws of that state.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written.
/s/ Craig M. Lessner
VOTER: ------------------------------------
Craig M. Lessner, Esq.
AND, In the event that Craig M. Lessner is deceased or
incapacitated at the time of the 1996 Annual Meeting of the Stockholders of the
Company, including any adjournment thereof, then
/s/ Charles R. Berman
------------------------------------
Charles R. Berman
STOCKHOLDERS: /s/ Steven Smith
------------------------------------
Steven Smith
/s/ Steven M. Bogen
------------------------------------
Steven M. Bogen
/s/ Albert L. Rountree, IV
------------------------------------
Albert L. Rountree, IV
6
<PAGE> 7
/s/ Daniel Petry
------------------------------------
Daniel Petry
/s/ Mark Feldman
------------------------------------
Mark Feldman
/s/ James Coyle
------------------------------------
James Coyle
THE FRESH JUICE COMPANY, INC.
By: /s/ Steven Smith
--------------------------------
Steven Smith, President
7
<PAGE> 8
EXHIBIT A
Steven M. Bogen - 629,508 shares of Common Stock of the Company
Steve Smith - 1,588,600 shares of common Stock of the Company
Daniel Petry - 288,648 shares of Common Stock of the Company
Albert L. Rountree, IV - 161,994 shares of Common Stock of the Company
Mark Feldman - 37,050 shares of Common Stock of the Company
James Coyle - 22,800 shares of Common Stock of the Company
8
<PAGE> 1
EXHIBIT 10d
Draft 3/31/96
EMPLOYMENT AGREEMENT
AGREEMENT made this 31st day of March, 1996 by and
between Steven Smith residing at Five Lawson Lane, Great Neck, New York 11023
(the "Employee") and The Fresh Juice Company, Inc., a Delaware corporation
whose address is 350 Northern Boulevard, Great Neck, NY 11021 (the "Employer").
WITNESSETH:
WHEREAS, Smith is presently employed as the
President, Chief Executive Officer and general manager of the Employer,
pursuant to that certain Employment Agreement dated October 5, 1986 between the
Employee and the Employer as amended by Employment Agreement between the
Employee and Employer dated August 17, 1994 (together, the "Old Employment
Agreement"); and
WHEREAS, it has been agreed between the Employee and
Employer that they desire to amend and supersede the terms and conditions of
the Employee's employment with the Employer as set forth in the Old Employment
Agreement and enter into this new employment agreement pursuant to which, among
other things, the Employee will no longer serve as the Employer's Chief
Executive Officer and general manager, but shall continue to be employed as the
Employer's President, Assistant Secretary and Co-Chairman of the Board upon the
terms and conditions set forth herein.
NOW, THEREFORE AND in consideration of the premises
and mutual covenants herein contained, it is agreed between the Employee and
the Employer as follows:
<PAGE> 2
1. Employment. (a) The Employer hereby agrees
to employ the Employee for the term of this Agreement, commencing as of the
date hereof, as the President, Assistant Secretary and Co-Chairman of the
Board. The Employee also agrees to serve as a director of the Employer and any
direct or indirect Subsidiary thereof, if elected.
2. Duties. (a) The Employee shall perform the
duties and functions customarily incident to the position of President,
Assistant Secretary and Co-Chairman of the Board of a corporation, and such
other duties incidental thereto and consistent therewith as may, from time to
time be assigned to him by the Board of Directors. As the President of the
Employer the Employee shall, subject to the directives of the Board of
Directors, have such powers and duties as the Board of Directors of the Company
shall assign or vest in him at any time and from time to time; it being
understood that the Employee shall exercise such powers and perform such duties
commensurate with such position and consistent with the powers and duties
normally associated with such position and title at comparable publicly-held
companies, including, but not limited to, the power to execute checks on behalf
of the Employer and its Subsidiaries provided, however, that the powers and
duties of the Employee hereunder or otherwise in connection with the operations
of the Employer shall be subordinate to and shall not be in contravention of
the powers, duties and directives of the Employer's Chief Executive Officer.
(b) The Employee's services hereunder may be
rendered at the Employer's principal executive offices in New Jersey, the
offices of the Employer's Subsidiaries in Florida or such other
<PAGE> 3
place as the parties may agree to at any time and from time to time or such
other location as the Employee shall be fully capable of performing his duties
and obligations hereunder. It is understood and agreed, however, that during
the term the Employee's duties may require reasonable periods of travel from
time to time as the Employer may reasonably request.
3. Other Business Interests. The Employee
agrees, during the term of this Agreement, to use his best efforts to promote
the interests and welfare of the Employer and to devote such time to his
employment as shall be necessary to enable him properly to perform his duties
hereunder. The Employee further agrees that unless otherwise approved by the
Board of Directors of the Company, the Employee shall work a minimum of 1,000
hours per year. Notwithstanding the foregoing, however, the Employer
acknowledges and understands that the Employee has or may have other business
interests and is or may become an officer and director of other corporations
and that the Employee will be required to devote some portion of his time to
his other business interests. The Employer agrees that the Employee may so do,
and that he may be an officer and director of the corporations in which the
Employee has or may in the future obtain an interest. The Employer
acknowledges that any services performed by the Employee for such other
business entities in which he has or may obtain an interest, may occupy a
significant portion of the Employee's business time and will be rendered at
such times and in such manner as the Employee shall deem appropriate so long as
same does not unreasonably interfere with the performance of his duties and
<PAGE> 4
obligations to the Employer. Under no circumstances shall the rendering of any
services to such other business entities form the basis for any breach by the
Employee of his duties and obligations hereunder or a basis for the termination
by the Employer of the Employee's employment hereunder so long as the Employee
is in compliance with his obligations to the Employer hereunder.
4. Salary. The Employee shall be paid, as base
compensation for the services rendered by him to the Employer, a salary in the
amount of $360,000 per annum (the "annual base compensation"), payable weekly
or in such other manner as shall be determined by the Employer, plus an annual
bonus, which bonus, if any, shall be determined by the Board of Directors.
The annual base compensation of the Employee, as
adjusted each year in accordance with the further provisions of this paragraph,
shall be increased each year, commencing with the year beginning April 1, 1997,
by an amount equal to, the percentage increase in the Consumer Price Index for
Urban Wage Earners and Clerical Workers (New York, N.Y.--Northern N.J. -- all
items in 1967=100) as periodically published by the Board of Labor Statistics
of the U.S. Department of Labor, in March of each year that this Agreement
continues in force and effect, over the said Index for the
<PAGE> 5
month of March in the preceding year, times the base compensation. For
example, if the said Index for the month of March, 1997 has increased by 5%
over the said Index for the month of March 1996, the Employee's annual base
compensation for the year commending April 1, 1997, shall be increased by
$18,000 (i.e., 5% of $360,000) to the amount of $378,000. If the said Index
for the month of March 1998 has increased by 5% over the said Index for the
month of March 1997, the Employee's base compensation for the year commencing
April 1, 1998 shall be increased by $18,900 (i.e., 5% of $378,000, to the
amount of $396,900). If the said Index or its publication shall be
discontinued and no comparable Index shall be published in place thereof, the
Employer and Employee shall endeavor to agree upon a substitute Index or
formula which then reflects the relative comparable value of the dollar; and if
they do not agree upon such substitution, then the question of a substituted
Index or formula shall be submitted to arbitration in accordance with the
arbitration provisions of this Agreement.
5. Salary Increases; Bonuses. It is understood
and agreed that the Employee's agreement to accept the foregoing base
compensation for his services to the Employer during the term of this Agreement
shall not prohibit, limit or restrict the Board of Directors of the Employer,
from increasing the Employee's compensation or from paying the Employee any
bonuses during the term of this Agreement, if the directors deem same
appropriate in light of the services rendered by the Employee, the business
done by the Employer, the results of operations of the Employer, and such other
factors as the Board of Directors, in their discretion, may deem relevant.
Notwithstanding anything herein to the contrary, the aggregate amount of salary
and bonuses paid to the Employee by the Employer shall not be lower than the
aggregate amount of salary and bonuses paid to the Employer's most highly
compensated executive officer (other than the Employee), inclusive of any
amount paid to such executive officer's family members.
<PAGE> 6
6. Lump Sum Payment. (a) If, in the absence of
a "Change in Control" (as defined in Section 15 hereof), the Employer
terminates this Agreement for reasons other than those specified in Section 16
hereof or the Employer determines not to renew the Employee's employment under
the same or similar terms as this Agreement (the "Nonrenewal of this
Agreement") and the termination or nonrenewal occurs neither after a Change in
Control nor in connection with a Change in Control, then the Employee shall be
entitled to receive, in addition to any compensation to which he is entitled
pursuant to Sections 4 and 5 hereof through the date of termination, a lump sum
payment (the "Lump Sum Payment") in an amount equal to (i) the highest sum of
the Employee's annual salary and bonus during any one year period of the term
of this Agreement or any one year during any renewal period, as the case may
be, plus (ii) his full base salary (as specified in Section 4 hereof) for the
remainder of the term of this Agreement or any renewal period, as the case may
be, at the rate in effect on the date of termination, plus all other amounts to
which he is entitled under any compensation plan of the Employer on the date of
termination. The Employee shall be entitled to receive the Lump Sum Payment
within ten (10) days following (i) the termination date, or (ii) the end of the
term of this Agreement or any renewal period, as the case may be, in the event
of such Nonrenewal of this Agreement by the Employer. Any amounts which the
Employee may earn should he seek other employment shall not be offset against
the amount of the continuing salary or Lump Sum Payment to which he is entitled
to otherwise receive hereunder. In addition, the Employee shall not
<PAGE> 7
be obligated to seek any such other employment to mitigate any payments he is
entitled to receive pursuant to this Agreement. Subject to Section 15 hereof,
the Employee shall not be entitled to receive continuing salary payments or the
Lump Sum Payment in the event that he, not the Employer, determines not to
renew this Agreement at the end of the term hereof, or any renewal period, as
the case may be.
(b) Further, the termination, as described in
Section 6(a) above, or the Nonrenewal of this Agreement will entitle the
Employee to continued benefits coverage provided for hereunder for twelve (12)
months from the date of termination or the end of the term of this Agreement or
any renewal period, as the case may be. In addition, the Employer will provide
the Employee, at the Employer's expense, with counseling services of a mutually
acceptable outplacement firm for twelve (12) months from the date of
termination or the end of the term of this Agreement or any renewal period, as
the case may be, subject to the next to last sentence in this paragraph. The
Employee will be permitted to use the same Employer's vehicle provided to him
pursuant to Section 7 below, for a period of twelve (12) months from the date
of termination or the end of the term of this Agreement or any renewal period,
as the case may be, subject to the following sentence. The Employee agrees
that he will notify the Employer immediately upon obtaining other employment
and that his use of the outplacement services will cease immediately and use of
the Employer vehicle will cease on the first day of the following month. The
Employee shall return the Employer's vehicle to the Employer, at the
<PAGE> 8
Employee's expense (or assume the monthly costs thereof in the case of a leased
vehicle), on or before the first day of such following month.
7. Automobile. The Employer shall provide the
Employee with the use of an automobile while he is employed by the Employer, of
such make and model as the Employee shall reasonably determine. The Employer
agrees to pay all costs of operating, maintaining, servicing, repairing,
insuring and garaging said automobile along with the costs of any car phone
which the Employee has or elects to have installed in such automobile. In the
event this Agreement continues beyond the initial three-year term, the Employer
shall provide the Employee with a new automobile every three years while he is
employed by the Employer.
8. Benefits. (a) Commencing on the date hereof,
during the term hereof and any extension thereof, the Employee shall be
entitled to participate in and enjoy the benefits of any profit sharing, health
or other group insurance, retirement, pension or other similar plan or plans
which are in effect or may be instituted by the Employer for the benefit of its
executive officers or employees generally, upon such term as may be therein
provided.
9. Vacation, Holidays and Personal Days. (a)
The Employee shall receive a paid vacation of five weeks a year during the term
of this Agreement. In the event there is any unused vacation time due to the
Employee upon termination of his employment with the Employer, he shall be paid
for such unused vacation time. Unused vacation time shall not accrue from year
to
<PAGE> 9
year.
(b) The Employee shall be entitled to as many
holidays and personal days as are in accordance with the Employer's policy then
in effect for its executive officers generally (but no less favorable than the
Employer's policy existing on the date hereof), upon such terms as may be
provided to all executive officers of the Employer generally.
10. Expenses. The Employer recognizes that the
Employee will incur expenses in connection with his duties hereunder and the
business of the Employer for items such as entertaining, travel, hotels, gifts
and similar items. The Employer agrees to provide the Employee with a
corporate American Express Card in order to pay such expenses and to otherwise
reimburse the Employee for, all such expenses paid or incurred by him (and/or,
if requested by the Employee, to advance the Employee amounts required to cover
such expenses).
Notwithstanding the foregoing, the Employer further
recognizes that the Employee's local expenses and various miscellaneous
expenses paid by the Employee in connection with his duties hereunder and the
business of the Employer may be difficult to account for by the Employee.
Accordingly, it is agreed that the Employee shall be entitled to receive an
appropriate amount from the Employer, as determined by the Employer from time
to time, as reimbursement for local and miscellaneous expenses for which the
Employee shall not be required to account, not to be less than $500 or more
than $1,000 per month. This shall be in addition to reimbursement for
travelling, entertainment, gifts and other items,
<PAGE> 10
for which the Employee is able to account.
11. Disability. In the event the Employee
becomes ill or disabled during the duration of this Agreement, so that he is
unable to perform his duties to the Employer hereunder, this Agreement shall
continue in full force and effect and the Employee's compensation and other
benefits required to be paid or maintained for the Employee by the Employer
shall continue to be paid and maintained by the Employer during the duration of
such illness or disability; provided, however, that in the event the Employee
is ill or disabled for a continuous period of more than one year during which
time he is unable to perform his duties to the Employer hereunder, the Employer
shall have the right, at its option, at any time during the continuance of said
illness or disability after the said one-year period to terminate this
Agreement upon 60 days written notice to the Employee. In such event, the
Employer shall continue to pay the Employee one-half of his annual base
compensation and shall continue to provide the other benefits required to be
maintained for the Employee hereunder for the shorter of (i) a period of three
years following the date of such termination of this Agreement or (ii) March
31, 2005.
12. Other Benefits. This Agreement shall not be
deemed to be in lieu of any rights, benefits or privileges to which the
Employee may be entitled as an employee of the Employer under any retirement,
pension, profit sharing, stock option, incentive or other bonus, life
insurance, disability insurance or other plan or plans which may be adopted by
the Employer, it being understood that the Employee shall have the same rights
and privileges to
<PAGE> 11
participate in such plans and benefits as any other employee of the Employer
during the duration of his employment.
13. Term. Subject to extensions and renewals
pursuant to Section 23 hereof, this Agreement shall continue in force and
effect for a period of three years from the date hereof.
14. Change in Control; Potential Change in
Control. (a) No benefits shall be payable pursuant to this Section 14 unless
the Employee is terminated following a change in control of the Employer (a
"Change in Control") or in connection with a Change in Control. For purpose of
this Agreement, a Change in Control of the Employer shall be deemed to have
occurred if (i) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other
than a trustee or other fiduciary holding securities under an executive benefit
plan of the Employer or a corporation owned, directly or indirectly, by the
stockholders of the Employer in substantially the same proportions as their
ownership of stock of the Employer, becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Employer representing 25% or more of the combined voting power of the
Employer's then outstanding securities; provided, however, that a "Friendly
Change in Control" as defined below shall not be deemed a Change in Control; or
(ii) during any period of two consecutive years (not including any period prior
to the execution of this Agreement), individuals who at the beginning of such
period constitute the Board of Directors of the Employer and any new director
(other than a director designated by a person who has
<PAGE> 12
entered into an agreement with the Employer to effect a transaction described
in clauses (i) or (iii) of this subsection) whose election by the Board of
Directors of the Employer or nomination for election by the Employer's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof; or (iii) the
shareholders of the Employer approve a merger or consolidation of the Employer
with any other corporation, other than a merger or consolidation which would
result in the voting securities of the Employer outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 80% of the
combined voting power of the voting securities of the Employer or such
surviving entity outstanding immediately after such merger or consolidation, or
the shareholders of the Employer approve an agreement for the sale or
disposition by the Employer of all or substantially all of the Employer's
assets.
A "Friendly Change in Control" shall be deemed to
occur when (a) a Change in Control occurs and the Employee acts in conjunction
with other persons or entities and constitutes part of the "person" (as defined
above) which becomes the beneficial owner, directly or indirectly, of the
securities described in Section 15(a)(i), or acts in furtherance of the
objectives of such "person" or (b) the transactions contemplated in that
certain Merger Agreement among the Employer, The Fresh Juice Company of
Florida,
<PAGE> 13
Inc., Clear Springs Citrus, Inc., Brian Duffy and The Bogen Group, L.L.C. are
consummated.
(b) For purposes of this Agreement, a "potential
change in control" of the Employer shall be deemed to have occurred if (i) the
Employer enters into an agreement, the consummation of which would result in
the occurrence of a Change in Control of the Employer; (ii) any person
(including the Employer) publicly announces an intention to take or to consider
taking actions which if consummated would constitute a Change in Control of the
Employer; (iii) any person, other than a trustee or other fiduciary holder
securities under an executive benefit plan of the Employer or a corporation
owned directly or indirectly, by the stockholders of the Employer in
substantially the same proportions as their ownership of stock of the company,
who is or becomes the beneficial owner, directly or indirectly, of securities
of the Employer representing 9.5% or more of the combined voting power of the
Employer's then outstanding securities, increases his beneficial ownership of
such securities by 5% or more over the percentage so owned by such person on
the date hereof; or (iv) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a potential change in control of the Employer has
occurred. The Employee agrees that, subject to the terms and conditions of
this Agreement, in the event of a potential change in control of the Employer,
he will remain in the employ of the Employer until the earliest of (i) the date
which is six (6) months from the occurrence of such potential change in control
of the Employer, (ii) the termination by the Employee of the Employee's
employment
<PAGE> 14
by reason of disability (as discussed in Section 11) or retirement (as
discussed in Section 17(b)), or (iii) the occurrence of a Change in Control of
the Employer.
15. Termination Following Change in Control. If
a Change in Control of the Employer shall have occurred prior to the
termination of the Employee's employment or the termination of the Employee's
employment is occurring in connection with a Change in Control of the Employer,
the Employee shall be entitled to the benefits provided in Section 16 hereof
upon the subsequent termination of his employment during the term of this
Agreement or any renewal period, as the case may be, unless such termination is
(i) because of the Employee's death or retirement (as described in Sections
17(a) and 17(b)), (ii) by the Employer for Cause (as defined in Section 17.4(c)
or disability (as discussed in Section 11(b), or (iii) by the Employee other
than for Good Reason (as defined below).
(a) Good Reason. In connection with a Change in
Control, the Employee shall be entitled to terminate his employment for Good
Reason and such termination by the Employee shall be deemed to be termination
of the Employee by the Employer. For purposes of this Agreement, "Good Reason"
shall mean without the Employee's express written consent, the occurrence,
after a Change in Control of the Employer, of any of the following
circumstances, unless in the case of clauses (i), (v), (vi) or (vii) below,
such circumstances are fully corrected prior to the date of termination as
specified in the "Notice of Termination" required by subsection 15(b) hereto:
<PAGE> 15
(i) the assignment to the Employee of any duties
inconsistent with the Employee's status as a senior executive
officer of the Employer or a substantial alteration in the
nature or status of the Employee's responsibilities from those
in effect immediately prior to a Change in Control of the
Employer;
(ii) a reduction by the Employer in the Employee's
annual base salary as in effect on the date hereof or as the
same may be increased from time to time;
(iii) a new Employer requirement is instituted
which requires the Employee to change his work location to a
location different from that before the Change in Control but
not including a requirement that the Employee travel on the
Employer's business to an extent substantially consistent with
his present business travel obligations;
(iv) the failure by the Employer, without the
Employee's consent, to pay the Employee any portion of his
current compensation, or to pay to the Employee any portion of
an installment of deferred compensation under any deferred
compensation program of the Employer within seven (7) days of
the date such compensation is due;
(v) the failure by the Employer to continue in
effect any compensation plan in which the Employee
participates immediately prior to the Change in Control of the
Company which is material to the Employee's total
compensation, or any substitute plans adopted prior to the
Change in Control, unless an equitable arrangement (embodied
in an on-going
<PAGE> 16
substitute or alternative plan) has been made with respect to
such plan in connection with the Change in Control of the
Employer, or the failure by the Employer to continue the
Employee's participation therein;
(vi) the failure by the Employer to continue to
provide the Employee with benefits substantially similar to
those enjoyed by the Employee under any of the Employer's
pension, life insurance, medical, health and accident, or
disability plans in which the Employee was participating at
the time of a Change in Control of the Employer, the taking of
any action by the Employer which would directly or indirectly
materially reduce any of such benefits or deprive the Employee
of any such benefits or deprive the Employee of any material
fringe benefit enjoyed by the Employee at the time of the
Change in Control of the Employer, or the failure by the
Employer to provide the Employee with the number of paid
vacation days to which the Employee is entitled on the basis
of years of service with the Employer in accordance with the
Employer's normal vacation policy in effect at the time of the
Change in Control; or
(vii) the failure of the Employer to obtain a
satisfactory agreement from any successor to assume and agree
to perform this Agreement, as contemplated in Section 18
hereof.
The Employee's right to terminate his employment
pursuant to this Subsection 15(a) shall not be affected by his incapacity due
to physical or mental illness. The Employee's continued
<PAGE> 17
employment shall not constitute consent to, or a waiver of rights with respect
to, any circumstances constituting Good Reason hereunder.
(b) Notice of Termination. Any purported
termination by the Employer or by the Employee shall be communicated by written
notice of termination ("Notice of Termination") to the other party hereto in
accordance with Section 20 hereof and shall state the grounds for termination
and the effective date thereof. Any purported termination of the Employee's
employment which is not effected pursuant to a Notice of Termination shall not
be effective in discharging the Employee.
16. Compensation upon Termination. (a) If the
Employee's employment by the Employer shall be terminated following a Change in
Control of the Employer in connection with a Change in Control and such
termination is for reasons other than for Cause (as hereinafter defined),
retirement, death or disability or if the Employee is deemed terminated
pursuant to Section 15(a), then the Employee shall be entitled, at his
election, to the benefits provided below:
1. The Employer shall continue to pay the
Employee, except as otherwise provided below, either (i) his
full base salary (as specified in Section 4 hereof) for the
remainder of the term of this Agreement or any renewal period,
as the case may be, at the rate in effect on the date of
termination, plus all other amounts to which he is entitled
under any compensation plan of the Employer on the date of
termination or (ii) a lump sum severance payment (the
"Severance Payment")
<PAGE> 18
equal to 2.99 times his "base amount", as defined in Section
280G of the Internal Revenue Code of 1986, as amended (the
"Code") and reduced as discussed below. Such base amount
shall be determined in accordance with temporary or final
regulations, if any, promulgated under Section 280G of the
code and based upon the advice of the tax counsel referred to
in clause (2), below. The Employee shall make his election by
written notice to the Employer within ten (10) business days
after he receives a Notice of Termination or, if the Employee
is terminating this Agreement for Good Reason, such election
shall be stated in his Notice of Termination to the Employer.
2. The Severance Payment shall be reduced by the
amount of any other payment or the value of any benefit
received or to be received by the Employee in connection with
a Change in Control of the Employer or the Employee's
termination of employment (whether pursuant to the terms of
this Agreement, any other plan, agreement or arrangement with
the Employer, any person whose actions result in control, or
any person affiliated with the Employer or such person) unless
(i) the Employee shall have effectively waived his receipt or
enjoyment of such payment or benefit prior to the date of
payment of the Severance Payment, (ii) in the opinion of tax
counsel selected by the Employer's independent auditors and
acceptable to the Employee, such other payment or benefit does
not constitute a "parachute payment" within the meaning of
Section 280G(b)(2) of the Code, or (iii) in the opinion of
such tax counsel, the Severance Payment (in its full amount or
<PAGE> 19
as partially reduced under this clause 2, as the case may be)
plus all other payments or benefits which constitute
"parachute payments" within the meaning of Section 280G(b)(2)
of the Code are reasonable compensation for services actually
rendered, within the meaning of Section 280G(b)(4) of the Code
or are otherwise not subject to disallowance as a deduction by
reason of Section 280G of the Code. The value of any non-cash
benefit or any deferred cash payment shall be determined by
the Employer's independent auditors in accordance with the
principles of Sections 280G(d)(3) and (4) of the Code.
3. Except to the extent that such payments would
result (or, if paid after the Severance Payment, would have
resulted) under clause 2 above, in a reduction in the
Severance Payment, notwithstanding any provision of an
incentive plan, if any, the Employer shall pay to the Employee
a lump sum amount equal to the sum of (x) any incentive
compensation which has been allocated or awarded to him for a
fiscal year or other measuring period preceding the date of
termination but which has not yet been paid, and (y) all legal
fees and expenses incurred by the Employee as a result of such
termination (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination or in
seeking to obtain or enforce any right or benefit provided by
this Agreement or in connection with any tax audit or
proceeding to the extent attributable to the application of
Section 4999 of the Code to any payment or benefit provided
hereunder), such payment to be made at the later of the times
provided in
<PAGE> 20
clause 4, below, or within five (5) days after the Employee's
request for payment accompanied with such evidence of fees and
expenses incurred as the Employer reasonably may require.
4. The payments provided for in clauses 16(a)(1)
and 16(a)(3) above, shall (except as otherwise provided
therein) be made not later than the fifth day following the
date of termination; provided, however, that if the amounts of
such payments, and the limitation on such payments set forth
in clause 16(a)(2) above, cannot be finally determined on or
before such day, the Employer shall pay to the Employee on
such day an estimate, as determined in good faith by the
Employer, of the minimum amount of such payments and shall pay
the remainder of such payments (together with interest at the
rate provided in Section 1247(b)(2)(B) of the Code) as soon as
the amount thereof can be determined but in no event later
than the thirtieth day after the date of termination. In the
event that the amount of the estimated payments exceeds the
amount subsequently determined to have been due, such excess
shall constitute a loan by the Employer to the Employee,
payable on the fifth day after demand by the Employer
(together with interest at the rate provided in Section
1247(b)(2)(B) of the Code).
5. The Employee shall not be required to
mitigate the amount of any payment provided for in this
Section 16 by seeking other employment or otherwise, nor shall
the amount of any payment or benefit provided for in this
Section 16 be reduced by any compensation earned by the
Employee as the
<PAGE> 21
result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by
the Employee to the Employer or otherwise.
17. Termination. This Agreement shall terminate
earlier than the stated term in the following circumstances:
(a) Death. In the event of the
Employee's death during the term of this Agreement or any renewal period, as
the case may be, this Agreement shall terminate on the date of death.
(b) Retirement. The Employee retires
voluntarily under the Employer's retirement plan.
(c) Cause. The Employer may terminate
the Employee for Cause. "Cause" shall mean termination upon (i) the willful
and continued failure by the Employee to perform substantially his duties with
the Employer (other than any such failure resulting from the Employee's
incapacity due to physical or mental illness or any such actual or anticipated
failure after the issuance of a Notice of Termination by the Employee for Good
Reason), 30 days after a written demand for substantial performance is
delivered to the Employee by the Board of Directors which specifically
identifies the manner in which the Board of Directors believes that the
Employee has not substantially performed his duties, or (ii) the conviction of
the Employee of any felony or a crime involving larceny. For purposes of this
Section 17(c), no act, or failure to act, on the Employee's part shall be
considered "willful" unless done, or omitted to be done, by the Employee not in
good faith and without reasonable belief that the Employee's action or omission
was in the best interest of the Employer. Notwithstanding the
<PAGE> 22
foregoing, the Employee shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to the Employee a resolution
duly adopted by the affirmative vote of a majority of the entire membership of
the Board of Directors, exclusive of the Employee, at a meeting of the Board of
Directors called and held for such purpose (after reasonable notice to and an
opportunity for the Employee, together with the Employee's counsel, to be heard
before the Board of Directors), finding that in the good faith opinion of the
Board of Directors, the Employee was guilty of conduct set forth above in
clauses (i) or (ii) of the second sentence of this Section 17(c) and specifying
the particulars thereof in detail; provided, however, that no such meeting may
be called or held by the Board of Directors of the Employer for such purpose
prior to April 1, 1999, unless the Employee has been first convicted of a crime
in which the Employee appropriated, for his benefit, any assets of the
Employer. Notwithstanding anything herein to the contrary, if the Employee is
terminated during the first three (3) years of the term for any reason other
than for a conviction of a crime in which the Employee appropriated, for his
benefit, any assets of the Employer, the Employee shall continue to be paid his
salary and bonus (and his benefits and entitlement to use of an automobile as
described in Section 7 hereof shall also continue) for the remainder of the
first three (3) years of the term; and further provided that if the Employee is
terminated for alleged "Cause" at any time during the term or any renewal
thereof and it is later determined by a court of competent jurisdiction that no
"Cause" existed for the
<PAGE> 23
termination, the Employer shall be liable for all salary, bonuses, benefits and
automobile entitlement due and not yet paid under the term or any renewal
thereof and such sum shall be paid in a lump sum to the Executive with
pre-judgment and post-judgment interest thereon.
Notwithstanding anything herein to the contrary,
Cause shall not include a failure by the Employee to render services at the
Employer's executive/administrative offices in New Jersey so long as the
Employee continues to perform his duties and obligations hereunder from other
reasonable locations.
18. Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the Employer, its successors and
assigns, including without limitation, any company which may acquire all or
substantially all of the Employer's assets and business or into which the
Employer may be merged, and upon the Employee, his heirs, legal
representatives, successors and assigns. The Employee may assign his right to
benefits under this Agreement but not his obligations under this Agreement.
19. Waiver. The failure of the Employer or the
Employee to insist, in any one or more instances, on performance of any term or
condition of this Agreement, shall not be construed as a waiver of any such
term, or condition, or any other term or condition, and the obligations of the
parties with respect thereto shall continue in full force and effect.
20. Notices. Any notice required to or which may
be sent hereunder shall be sent in writing, by registered or certified mail,
return receipt requested, addressed to the party for whom it
<PAGE> 24
is intended at the address set forth on page 1 of this Agreement for such
party. Either party hereto may, at any time or from time to time, change the
address to which notices shall be sent in accordance with the provisions of
this Section.
21. Governing Law. This Agreement has been made
and shall be construed in accordance with the laws of the State of New Jersey.
This Agreement, when effective, supersedes all previous agreements between the
Employee and Employer regarding employment.
22. Renewal. The Employee shall have the right
and option to extend and renew this Agreement for two additional periods of
three (3) years each (for a total of six (6) additional years). The Employee
shall automatically be deemed to have exercised such right and option to extend
and renew this Agreement at the expiration of the initial and each renewal term
unless he shall send written notice to the Employer or his intention not to
renew at least 60 days prior to the expiration of the initial or any renewal
term.
23. Arbitration. Any controversy between the
Employee and Employer relating to this Agreement, or to the meaning or
performance thereof, shall be settled by arbitration in accordance with the
rules and regulations of the American Arbitration Association then in force and
effect. Judgment on any award rendered in such arbitration may be entered in
any court having jurisdiction.
24. Protection of Confidential Information.
24.1. Confidentiality. In view of the fact that
the Employee's work as an Executive of the Employer and its
<PAGE> 25
Subsidiaries and their respective affiliates will bring him into close contact
with many confidential affairs of the Employer and its Subsidiaries and their
respective affiliates, including the names of the Employer's and its
Subsidiaries' customers and suppliers, matters of a business nature such as
information about costs, profits, markets, sales, other information not readily
available to the public, and plans for future developments (hereinafter
collectively "Confidential Matters"), the Employee agrees: (i) to keep secret
all Confidential Matters of the Employer and its Subsidiaries and their
respective affiliates, and not to disclose such Confidential Matters to anyone
outside of the Employer and its Subsidiaries (other than the Employer's
customers or potential customers and the Employer's vendors or suppliers or
potential vendors or suppliers), either during or after his employment with the
Employer, except with the Employer's written consent at each time as to any
Confidential Matter which is to be disclosed, and (ii) to deliver promptly to
the Employer on termination of his employment, or at any time the Employer may
so request, all memoranda, notes, records, reports, lists and other documents
(and all copies thereof) and materials relating to the Employer's and its
Subsidiaries' and their respective affiliates business which he may then
possess or have under this control.
24.2. Agreement Not To Compete. During the period
from the date hereof until one (1) year after the termination or nonrenewal of
the Employee's employment with the Employer and/or its Subsidiaries for any
reason set forth in Section 17 hereof, the Employee shall not (i) purchase an
ownership interest of greater
<PAGE> 26
than 5% of a company or other entity which is at such time engaged in the
citrus juice beverage industry and active in the same geographic area as the
Employer or any of its Subsidiaries or their respective affiliates, is
otherwise competitive with the Employer or any of its Subsidiaries or their
respective affiliates, or is attempting to enter such industry in such
geographic area or to become otherwise competitive; (ii) act as a consultant,
officer, director or in any other capacity, whose responsibilities are related
to the citrus juice beverage industry in the same geographic area as the
Employer or any of its Subsidiaries operates; or (iii) solicit in any way or
entice away from the Employer or its Subsidiaries or their respective
affiliates (a) any clients or account of the Employer or its Subsidiaries or
their respective affiliates which were active clients or accounts of the
Employer or its Subsidiaries or their respective affiliates during the
<PAGE> 27
Employee's employment with the Employer, (b) any prospective client or account
of the Employer or its Subsidiaries or their respective affiliates which the
Employer or its Subsidiaries or their respective affiliates was actively
engaged in soliciting during the Employee's employment with the Employer, (c)
any employee of the Employer or its Subsidiaries or their respective affiliates
(unless such employee shall have either been discharged by such entity or shall
have otherwise ceased to be employed by such entity for a period of 365 days)
or (d) any manufacturers or suppliers of the Employer's or its Subsidiaries or
their respective affiliates, which were manufacturers or suppliers of the
Employer or its Subsidiaries or their respective affiliates during the
Employee's employment with the Employer. Notwithstanding the foregoing,
however, if the Employer fails to make any payments due hereunder to the
Employee when due, the provisions of this Section 24.2 shall not apply.
24.3. Remedies. The Employee recognizes that any
breach of the covenants contained in Sections 24.1 or 24.2 hereof would
irreparably injure the Employer. Accordingly, the Employee agrees that any
breach of the covenants contained in Sections 24.1 or 24.2 hereof will result
in forfeiture to the Employer as liquidated damages of any and all amounts
otherwise payable to the Employee under this Agreement as of and from the date
of such breach. Furthermore, the Employer may, in addition to pursuing its
other remedies, obtain an injunction against the Employee from any court having
jurisdiction over the matter, restraining any further violation of this
Agreement by the Employee and no bond or other security shall be required in
connection with such injunction.
(b) In the event the Employe prevails in any
judicial proceeding relating to a breach by the Employer hereunder, (i) all
sums determined to be due hereunder in such judicial proceeding shall be due
and payable in a lump sum (unless otherwise ordered by the court in which such
judicial proceeding is brought) and (ii) the Employer shall be liable for all
fees and expenses, including attorneys' fees, incurred by the Employee in
connection with any action taken to enforce this Agreement or obtain judgment
for a breach hereof.
24.4. Reformation. If any of the covenants
contained in Sections 24.1 or 24.2 hereof, or any part thereof, are held to
<PAGE> 28
be unenforceable because of the scope or duration of any such provision, the
parties agree that the body making such determination shall have the power to
reduce the scope or duration of such provision and, in its reduced form, said
provision shall be enforceable. If any of the covenants in Sections 24.1 or
24.2 hereof, or any part thereof, is hereafter construed to be invalid or
unenforceable, the same shall not affect the remainder of the covenants, which
shall be given full force and effect without regard to the invalid provisions.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement the day and year first written.
THE FRESH JUICE COMPANY, INC.
By: /s/ Steven M. Bogen
----------------------------
Name: Steven M. Bogen
Title: Chief Executive Officer
/s/ Steven Smith
-------------------------------
Steven Smith
<PAGE> 1
EXHIBIT 10e
EMPLOYMENT AGREEMENT
AGREEMENT made this 31st day of March, 1996 by and between
Steven M. Bogen residing at 81 Dahlia Street, Staten Island, New York 10312
(the "Employee") and The Fresh Juice Company, Inc., a Delaware corporation
whose address is 350 Northern Boulevard, Great Neck, NY 11021 (the "Employer").
WHEREAS, the Employer desires to employ the Employee upon the
terms and conditions set forth below; and
WHEREAS, the Employee desires to accept employment as the
Chief Executive Officer, Co-Chairman of the Board, general manager and
Secretary of the Employer upon the terms and conditions set forth below.
NOW, THEREFORE AND in consideration of the premises and mutual
covenants herein contained, it is agreed between the Employee and the Employer
as follows:
1. Employment. The Employer hereby agrees to employ the
Employee for the term of this Agreement, commencing as of the date hereof, as
the Chief Executive Officer, Co-Chairman of the Board and Secretary of the
Employer, and as the general manager of its business and operations. The
Employee hereby accepts such employment and agrees to work for the Employer
during the term of this Agreement upon the terms and conditions herein set
forth. The Employee also agrees to serve as a director of any direct or
indirect subsidiary of the Employer, if elected. The Employee's services
hereunder will be rendered at the Employer's principal executive offices in New
Jersey, or such other place as the parties may agree to at any time and from
time to time. It is understood and agreed,
<PAGE> 2
however, that during the term the Employee's duties may require reasonable
periods of travel from time to time as the Employer may reasonably request.
2. Duties. The Employee shall perform the duties and
functions customarily incident to the position of Chief Executive Officer,
Secretary, Co-Chairman of the Board and general manager of a corporation, and
such other duties incidental thereto and consistent therewith as may, from time
to time, be assigned to him by the Board of Directors. As the Chief Executive
Officer and general manager of the Employer, the Employee shall, subject to the
directives of the Board of Directors, be in full and complete charge of all of
the Employer's day-to-day operations. His function and authority shall
include, without limitation, hiring and firing of employees; purchase and sale
of supplies, products, equipment and services; determination and supervision of
product lines and production, sales, marketing, purchasing and advertising
policies; retention of outside agencies, service companies and consultants;
determining the location of and acquiring offices, production facilities and
storage facilities; retention of attorneys, accountants and other professional
advisors; entering into agreements on behalf of the Employer; borrowing and
repayment of loans; determining fiscal policies and banking affiliations;
executing checks; and all other matters incidental or relating to the business
and affairs of the Employer. It is understood and agreed that the Employee
shall have full right to delegate and assign duties and functions to the
employees, agents, representatives and contractors of and for the Employer, in
such manner and at such times and at such compensation as he deems appropriate.
2
<PAGE> 3
3. Other Business Interests. The Employee agrees,
during the term of this Agreement, to use his best efforts to promote the
interests and welfare of the Employer and to devote such time to his employment
as shall be necessary to enable him properly to perform his duties hereunder.
The Employee further agrees that unless otherwise approved by the Board of
Directors of the Company, the Employee shall work a minimum of 1,000 hours per
year. Notwithstanding the foregoing, however, the Employer acknowledges and
understands that the Employee has or may have other business interests and is
or may become an officer and director of other corporations and that the
Employee will be required to devote some portion of his time to his other
business interests. The Employer agrees that the Employee may so do, and that
he may be an officer and director of the corporations in which the Employee has
or may in the future obtain an interest. The Employer acknowledges that any
services performed by the Employee for such other business entities in which he
has or may obtain an interest, may occupy a significant portion of the
Employee's business time and will be rendered at such times and in such manner
as the Employee shall deem appropriate so long as same does not unreasonably
interfere with the performance of his duties and obligations to the Employer.
Under no circumstances shall the rendering of any services to such other
business entities form the basis for any breach by the Employee of his duties
and obligations hereunder or a basis for the termination by the Employer of the
Employee's employment hereunder so long as the Employee is in compliance with
his obligations to the Employer hereunder.
4. Salary. The Employee shall be paid, as base
compensation for the services rendered by him to the Employer, a salary in the
amount of $360,000 per annum
3
<PAGE> 4
(the "annual base compensation"), payable weekly or in such other manner as
shall be determined by the Employer, plus an annual bonus, which bonus, if any,
shall be determined by the Board of Directors.
The annual base compensation of the Employee, as adjusted each
year in accordance with the further provisions of this paragraph, shall be
increased each year, commencing with the year beginning April 1, 1997, by an
amount equal to, the percentage increase in the Consumer Price Index for Urban
Wage Earners and Clerical Workers (New York, N.Y.--Northern N.J. -- all items
in 1967=100) as periodically published by the Board of Labor Statistics of the
U.S. Department of Labor, in March of each year that this Agreement continues
in force and effect, over the said Index for the month of March in the
preceding year, times the base compensation. For example, if the said Index
for the month of March, 1997 has increased by 5% over the said Index for the
month of March 1996, the Employee's annual base compensation for the year
commending April 1, 1997, shall be increased by $18,000 (i.e., 5% of $360,000)
to the amount of $378,000. If the said Index for the month of March 1998 has
increased by 5% over the said Index for the month of March 1997, the Employee's
base compensation for the year commencing April 1, 1998 shall be increased by
$18,900 (i.e., 5% of $378,000, to the amount of $396,900). If the said Index
or its publication shall be discontinued and no comparable Index shall be
published in place thereof, the Employer and Employee shall endeavor to agree
upon a substitute Index or formula which then reflects the relative comparable
value of the dollar; and if they do not agree upon such substitution, then the
question of a substituted Index or formula shall be submitted to arbitration in
accordance with the arbitration provisions of this Agreement.
4
<PAGE> 5
5. Salary Increases; Bonuses. It is understood and
agreed that the Employee's agreement to accept the foregoing base compensation
for his services to the Employer during the term of this Agreement shall not
prohibit, limit or restrict the Board of Directors of the Employer, from
increasing the Employee's compensation or from paying the Employee any bonuses
during the term of this Agreement, if the directors deem same appropriate in
light of the services rendered by the Employee, the business done by the
Employer, the results of operations of the Employer, and such other factors as
the Board of Directors, in their discretion, may deem relevant.
Notwithstanding anything herein to the contrary, the aggregate amount of salary
and bonuses paid to the Employee by the Employer shall not be lower than the
aggregate amount of salary and bonuses paid to the Employer's most highly
compensated executive officer (other than the Employee), inclusive of any
amount paid to such executive officer's family members (exclusive of Jeffrey
Smith).
6. Lump Sum Payment. (a) If, in the absence of a
"Change in Control" (as defined in Section 15 hereof), the Employer terminates
this Agreement for reasons other than those specified in Section 16 hereof or
the Employer determines not to renew the Employee's employment under the same
or similar terms as this Agreement (the "Nonrenewal of this Agreement") and the
termination or nonrenewal occurs neither after a Change in Control nor in
connection with a Change in Control, then the Employee shall be entitled to
receive, in addition to any compensation to which he is entitled pursuant to
Sections 4 and 5 hereof through the date of termination, a lump sum payment
(the "Lump Sum Payment") in an amount equal to (i) the highest sum of the
Employee's annual salary and bonus during any one year period of the term of
this Agreement or any one year during
5
<PAGE> 6
any renewal period, as the case may be, plus (ii) his full base salary (as
specified in Section 4 hereof) for the remainder of the term of this Agreement
or any renewal period, as the case may be, at the rate in effect on the date of
termination, plus all other amounts to which he is entitled under any
compensation plan of the Employer on the date of termination. The Employee
shall be entitled to receive the Lump Sum Payment within ten (10) days
following (i) the termination date, or (ii) the end of the term of this
Agreement or any renewal period, as the case may be, in the event of such
Nonrenewal of this Agreement by the Employer. Any amounts which the Employee
may earn should he seek other employment shall not be offset against the amount
of the continuing salary or Lump Sum Payment to which he is entitled to
otherwise receive hereunder. In addition, The Employee shall not be obligated
to seek any such other employment to mitigate any payments he is entitled to
receive pursuant to this Agreement. Subject to Section 15 hereof, the Employee
shall not be entitled to receive continuing salary payments or the Lump Sum
Payment in the event that he, not the Employer, determines not to renew this
Agreement at the end of the term hereof, or any renewal period, as the case may
be.
(b) Further, the termination, as described in Section
6(a) above, or the Nonrenewal of this Agreement will entitle the Employee to
continued benefits coverage provided for hereunder for twelve (12) months from
the date of termination or the end of the term of this Agreement or any renewal
period, as the case may be. In addition, the Employer will provide the
Employee, at the Employer's expense, with counseling services of a mutually
acceptable outplacement firm for twelve (12) months from the date of
termination or the end of the term of this Agreement or any renewal period, as
the case
6
<PAGE> 7
may be, subject to the next to last sentence in this paragraph. The Employee
will be permitted to use the same Employer's vehicle provided to him pursuant
to Section 7 below, for a period of twelve (12) months from the date of
termination or the end of the term of this Agreement or any renewal period, as
the case may be, subject to the following sentence. The Employee agrees that
he will notify the Employer immediately upon obtaining other employment and
that his use of the outplacement services will cease immediately and use of the
Employer vehicle will cease on the first day of the following month. The
Employee shall return the Employer's vehicle to the Employer, at the Employee's
expense (or assume the monthly costs thereof in the case of a leased vehicle),
on or before the first day of such following month.
7. Automobile. The Employer shall provide the Employee
with the use of an automobile while he is employed by the Employer, of such
make and model as the Employee shall reasonably determine. The Employer agrees
to pay all costs of operating, maintaining, servicing, repairing, insuring and
garaging said automobile along with the costs of any car phone which the
Employee has or elects to have installed in such automobile. In the event this
Agreement continues beyond the initial three-year term, the Employer shall
provide the Employee with a new automobile every three years while he is
employed by the Employer.
8. Benefits. (a) Commencing on the date hereof, the
Employee shall (i) continue to participate in and enjoy the benefits of the
health insurance and/or 401(k) plan in effect at The Ultimate Juice Company,
Inc. existing immediately prior to the date hereof and (ii) be entitled to
participate in and enjoy the benefits of any retirement, pension, health
7
<PAGE> 8
insurance, or other similar plan or plans which are in effect or may be
instituted by the Employer for the benefit of its executive officers or
employees generally, upon such terms as may be therein provided.
(b) During the term hereof and any extension thereof, the
Employee shall be entitled to participate in and enjoy the benefits of any
profit sharing, group insurance or other similar plan or plans which are in
effect or may be instituted by the Employer for the benefit of its executive
officers or employees generally, upon such term as may be therein provided.
9. Vacation, Holidays and Personal Days. (a) The
Employee shall receive a paid vacation of five weeks a year during the term of
this Agreement. In the event there is any unused vacation time due to the
Employee upon termination of his employment with the Employer, he shall be paid
for such unused vacation time. Unused vacation time shall not accrue from year
to year.
(b) The Employee shall be entitled to as many holidays
and personal days as are in accordance with the Employer's policy then in
effect for its executive officers generally (but no less favorable than the
Employer's policy existing on the date hereof), upon such terms as may be
provided to all executive officers of the Employer generally.
10. Expenses. The Employer recognizes that the Employee
will incur expenses in connection with his duties hereunder and the business of
the Employer for items such as entertaining, travel, hotels, gifts and similar
items. The Employer agrees to provide the Employee with a corporate American
Express Card in order to pay such expenses and to otherwise reimburse the
Employee for, all such expenses paid or incurred by him (and/or,
8
<PAGE> 9
if requested by the Employee, to advance the Employee amounts required to cover
such expenses).
Notwithstanding the foregoing, the Employer further recognizes
that the Employee's local expenses and various miscellaneous expenses paid by
the Employee in connection with his duties hereunder and the business of the
Employer may be difficult to account for by the Employee. Accordingly, it is
agreed that the Employee shall be entitled to receive an appropriate amount
from the Employer, as determined by the Employer from time to time, as
reimbursement for local and miscellaneous expenses for which the Employee shall
not be required to account, not to be less than $500 or more than $1,000 per
month. This shall be in addition to reimbursement for travelling,
entertainment, gifts and other items, for which the Employee is able to
account.
11. Disability. In the event the Employee becomes ill or
disabled during the duration of this Agreement, so that he is unable to perform
his duties to the Employer hereunder, this Agreement shall continue in full
force and effect and the Employee's compensation and other benefits required to
be paid or maintained for the Employee by the Employer shall continue to be
paid and maintained by the Employer during the duration of such illness or
disability; provided, however, that in the event the Employee is ill or
disabled for a continuous period of more than one year during which time he is
unable to perform his duties to the Employer hereunder, the Employer shall have
the right, at its option, at any time during the continuance of said illness or
disability after the said one-year period to terminate this Agreement upon 60
days written notice to the Employee. In such event, the Employer shall
continue to pay the Employee one-half of his annual base
9
<PAGE> 10
compensation and shall continue to provide the other benefits required to be
maintained for the Employee hereunder for the shorter of (i) a period of three
years following the date of such termination of this Agreement or (ii) March
31, 2005.
12. Other Benefits. This Agreement shall not be deemed
to be in lieu of any rights, benefits or privileges to which the Employee may
be entitled as an employee of the Employer under any retirement, pension,
profit sharing, stock option, incentive or other bonus, life insurance,
disability insurance or other plan or plans which may be adopted by the
Employer, it being understood that the Employee shall have the same rights and
privileges to participate in such plans and benefits as any other employee of
the Employer during the duration of his employment.
13. Term. Subject to extensions and renewals pursuant to
Section 23 hereof, this Agreement shall continue in force and effect for a
period of three years from the date hereof.
14. Change in Control; Potential Change in Control. (a)
No benefits shall be payable pursuant to this Section 14 unless the Employee is
terminated following a change in control of the Employer (a "Change in
Control") or in connection with a Change in Control. For purpose of this
Agreement, a Change in Control of the Employer shall be deemed to have occurred
if (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), other than a
trustee or other fiduciary holding securities under an executive benefit plan
of the Employer or a corporation owned, directly or indirectly, by the
stockholders of the Employer in substantially the same proportions as their
ownership of stock of the Employer, becomes
10
<PAGE> 11
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Employer representing 25% or more
of the combined voting power of the Employer's then outstanding securities;
provided, however, that a "Friendly Change in Control" as defined below shall
not be deemed a Change in Control; or (ii) during any period of two consecutive
years (not including any period prior to the execution of this Agreement),
individuals who at the beginning of such period constitute the Board of
Directors of the Employer and any new director (other than a director
designated by a person who has entered into an agreement with the Employer to
effect a transaction described in clauses (i) or (iii) of this subsection)
whose election by the Board of Directors of the Employer or nomination for
election by the Employer's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof; or (iii) the shareholders of the Employer approve a merger or
consolidation of the Employer with any other corporation, other than a merger
or consolidation which would result in the voting securities of the Employer
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 80% of the combined voting power of the voting
securities of the Employer or such surviving entity outstanding immediately
after such merger or consolidation, or the shareholders of the Employer approve
an agreement for the sale or disposition by the Employer of all or
substantially all of the Employer's assets.
11
<PAGE> 12
A "Friendly Change in Control" shall be deemed to occur when
(a) a Change in Control occurs and the Employee acts in conjunction with other
persons or entities and constitutes part of the "person" (as defined above)
which becomes the beneficial owner, directly or indirectly, of the securities
described in Section 15(a)(i), or acts in furtherance of the objectives of such
"person" or (b) the transactions contemplated in that certain Merger Agreement
among the Employer, The Fresh Juice Company of Florida, Inc., Clear Springs
Citrus, Inc., Brian Duffy and The Bogen Group, L.L.C. are consummated.
(b) For purposes of this Agreement, a "potential change
in control" of the Employer shall be deemed to have occurred if (i) the
Employer enters into an agreement, the consummation of which would result in
the occurrence of a Change in Control of the Employer; (ii) any person
(including the Employer) publicly announces an intention to take or to consider
taking actions which if consummated would constitute a Change in Control of the
Employer; (iii) any person, other than a trustee or other fiduciary holder
securities under an executive benefit plan of the Employer or a corporation
owned directly or indirectly, by the stockholders of the Employer in
substantially the same proportions as their ownership of stock of the company,
who is or becomes the beneficial owner, directly or indirectly, of securities
of the Employer representing 9.5% or more of the combined voting power of the
Employer's then outstanding securities, increases his beneficial ownership of
such securities by 5% or more over the percentage so owned by such person on
the date hereof; or (iv) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a potential change in control of the Employer has
occurred. The Employee agrees that, subject to the terms and conditions of
this Agreement, in the event of a
12
<PAGE> 13
potential change in control of the Employer, he will remain in the employ of
the Employer until the earliest of (i) the date which is six (6) months from
the occurrence of such potential change in control of the Employer, (ii) the
termination by the Employee of the Employee's employment by reason of
disability (as discussed in Section 11) or retirement (as discussed in Section
17(b)), or (iii) the occurrence of a Change in Control of the Employer.
15. Termination Following Change in Control. If a Change
in Control of the Employer shall have occurred prior to the termination of the
Employee's employment or the termination of the Employee's employment is
occurring in connection with a Change in Control of the Employer, the Employee
shall be entitled to the benefits provided in Section 16 hereof upon the
subsequent termination of his employment during the term of this Agreement or
any renewal period, as the case may be, unless such termination is (i) because
of the Employee's death or retirement (as described in Sections 17(a) and
17(b)), (ii) by the Employer for Cause (as defined in Section 17.4(c) or
disability (as discussed in Section 11(b), or (iii) by the Employee other than
for Good Reason (as defined below).
(a) Good Reason. In connection with a Change in Control,
the Employee shall be entitled to terminate his employment for Good Reason and
such termination by the Employee shall be deemed to be termination of the
Employee by the Employer. For purposes of this Agreement, "Good Reason" shall
mean without the Employee's express written consent, the occurrence, after a
Change in Control of the Employer, of any of the following circumstances,
unless in the case of clauses (i), (v), (vi) or (vii) below, such
13
<PAGE> 14
circumstances are fully corrected prior to the date of termination specified in
the "Notice of Termination" required by subsection 15(b) hereto:
(i) the assignment to the Employee of any duties
inconsistent with the Employee's status as a senior executive officer
of the Employer or a substantial alteration in the nature or status of
the Employee's responsibilities from those in effect immediately prior
to a Change in Control of the Employer;
(ii) a reduction by the Employer in the Employee's annual
base salary as in effect on the date hereof or as the same may be
increased from time to time;
(iii) a new Employer requirement is instituted which
requires the Employee to change his work location to a location
different from that before the Change in Control but not including a
requirement that the Employee travel on the Employer's business to an
extent substantially consistent with his present business travel
obligations;
(iv) the failure by the Employer, without the Employee's
consent, to pay the Employee any portion of his current compensation,
or to pay to the Employee any portion of an installment of deferred
compensation under any deferred compensation program of the Employer
within seven (7) days of the date such compensation is due;
(v) the failure by the Employer to continue in effect any
compensation plan in which the Employee participates immediately prior
to the Change in Control of the Company which is material to the
Employee's total compensation, or any substitute plans adopted prior
to the Change in Control, unless an equitable arrangement (embodied in
an on-going substitute or alternative plan) has been made
14
<PAGE> 15
with respect to such plan in connection with the Change in Control of
the Employer, or the failure by the Employer to continue the
Employee's participation therein;
(vi) the failure by the Employer to continue to provide
the Employee with benefits substantially similar to those enjoyed by
the Employee under any of the Employer's pension, life insurance,
medical, health and accident, or disability plans in which the
Employee was participating at the time of a Change in Control of the
Employer, the taking of any action by the Employer which would
directly or indirectly materially reduce any of such benefits or
deprive the Employee of any such benefits or deprive the Employee of
any material fringe benefit enjoyed by the Employee at the time of the
Change in Control of the Employer, or the failure by the Employer to
provide the Employee with the number of paid vacation days to which
the Employee is entitled on the basis of years of service with the
Employer in accordance with the Employer's normal vacation policy in
effect at the time of the Change in Control; or
(vii) the failure of the Employer to obtain a satisfactory
agreement from any successor to assume and agree to perform this
Agreement, as contemplated in Section 18 hereof.
The Employee's right to terminate his employment pursuant to
this Subsection 15(a) shall not be affected by his incapacity due to physical
or mental illness. The Employee's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any circumstances
constituting Good Reason hereunder.
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(b) Notice of Termination. Any purported termination by
the Employer or by the Employee shall be communicated by written notice of
termination ("Notice of Termination") to the other party hereto in accordance
with Section 20 hereof and shall state the grounds for termination and the
effective date thereof. Any purported termination of the Employee's employment
which is not effected pursuant to a Notice of Termination shall not be
effective in discharging the Employee.
16. Compensation upon Termination. (a) If the
Employee's employment by the Employer shall be terminated following a Change in
Control of the Employer in connection with a Change in Control and such
termination is for reasons other than for Cause (as hereinafter defined),
retirement, death or disability or if the Employee is deemed terminated
pursuant to Section 15(a), then the Employee shall be entitled, at his
election, to the benefits provided below:
1. The Employer shall continue to pay the Employee,
except as otherwise provided below, either (i) his full base salary
(as specified in Section 4 hereof) for the remainder of the term of
this Agreement or any renewal period, as the case may be, at the rate
in effect on the date of termination, plus all other amounts to which
he is entitled under any compensation plan of the Employer on the date
of termination or (ii) a lump sum severance payment (the "Severance
Payment") equal to 2.99 times his "base amount", as defined in Section
280G of the Internal Revenue Code of 1986, as amended (the "Code") and
reduced as discussed below. Such base amount shall be determined in
accordance with temporary or final regulations, if any, promulgated
under Section 280G of the code and based upon the advice of the tax
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counsel referred to in clause (2), below. The Employee shall make his
election by written notice to the Employer within ten (10) business
days after he receives a Notice of Termination or, if the Employee is
terminating this Agreement for Good Reason, such election shall be
stated in his Notice of Termination to the Employer.
2. The Severance Payment shall be reduced by the amount
of any other payment or the value of any benefit received or to be
received by the Employee in connection with a Change in Control of the
Employer or the Employee's termination of employment (whether pursuant
to the terms of this Agreement, any other plan, agreement or
arrangement with the Employer, any person whose actions result in
control, or any person affiliated with the Employer or such person)
unless (i) the Employee shall have effectively waived his receipt or
enjoyment of such payment or benefit prior to the date of payment of
the Severance Payment, (ii) in the opinion of tax counsel selected by
the Employer's independent auditors and acceptable to the Employee,
such other payment or benefit does not constitute a "parachute
payment" within the meaning of Section 280G(b)(2) of the Code, or
(iii) in the opinion of such tax counsel, the Severance Payment (in
its full amount or as partially reduced under this clause 2, as the
case may be) plus all other payments or benefits which constitute
"parachute payments" within the meaning of Section 280G(b)(2) of the
Code are reasonable compensation for services actually rendered,
within the meaning of Section 280G(b)(4) of the Code or are otherwise
not subject to disallowance as a deduction by reason of Section 280G
of the Code. The value of any non-cash benefit or any deferred cash
payment shall be determined by the Employer's independent
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auditors in accordance with the principles of Sections 280G(d)(3) and
(4) of the Code.
3. Except to the extent that such payments would result
(or, if paid after the Severance Payment, would have resulted) under
clause 2 above, in a reduction in the Severance Payment,
notwithstanding any provision of an incentive plan, if any, the
Employer shall pay to the Employee a lump sum amount equal to the sum
of (x) any incentive compensation which has been allocated or awarded
to him for a fiscal year or other measuring period preceding the date
of termination but which has not yet been paid, and (y) all legal fees
and expenses incurred by the Employee as a result of such termination
(including all such fees and expenses, if any, incurred in contesting
or disputing any such termination or in seeking to obtain or enforce
any right or benefit provided by this Agreement or in connection with
any tax audit or proceeding to the extent attributable to the
application of Section 4999 of the Code to any payment or benefit
provided hereunder), such payment to be made at the later of the times
provided in clause 4, below, or within five (5) days after the
Employee's request for payment accompanied with such evidence of fees
and expenses incurred as the Employer reasonably may require.
4. The payments provided for in clauses 16(a)(1) and
16(a)(3) above, shall (except as otherwise provided therein) be made
not later than the fifth day following the date of termination;
provided, however, that if the amounts of such payments, and the
limitation on such payments set forth in clause 16(a)(2) above, cannot
be finally determined on or before such day, the Employer shall pay to
the Employee
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on such day an estimate, as determined in good faith by the Employer,
of the minimum amount of such payments and shall pay the remainder of
such payments (together with interest at the rate provided in Section
1247(b)(2)(B) of the Code) as soon as the amount thereof can be
determined but in no event later than the thirtieth day after the
date of termination. In the event that the amount of the estimated
payments exceeds the amount subsequently determined to have been due,
such excess shall constitute a loan by the Employer to the Employee,
payable on the fifth day after demand by the Employer (together with
interest at the rate provided in Section 1247(b)(2)(B) of the Code).
5. The Employee shall not be required to mitigate the
amount of any payment provided for in this Section 16 by seeking other
employment or otherwise, nor shall the amount of any payment or
benefit provided for in this Section 16 be reduced by any compensation
earned by the Employee as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed
to be owed by the Employee to the Employer or otherwise.
17. Termination. This Agreement shall terminate earlier
than the stated term in the following circumstances:
(a) Death. In the event of the Employee's death
during the term of this Agreement or any renewal period, as the case may be,
this Agreement shall terminate on the date of death.
(b) Retirement. The Employee retires voluntarily
under the Employer's retirement plan.
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(c) Cause. The Employer may terminate the
Employee for Cause. "Cause" shall mean termination upon (i) the willful and
continued failure by the Employee to perform substantially his duties with the
Employer (other than any such failure resulting from the Employee's incapacity
due to physical or mental illness or any such actual or anticipated failure
after the issuance of a Notice of Termination by the Employee for Good Reason),
30 days after a written demand for substantial performance is delivered to the
Employee by the Board of Directors which specifically identifies the manner in
which the Board of Directors believes that the Employee has not substantially
performed his duties, or (ii) the conviction of the Employee of any felony or a
crime involving larceny. For purposes of this Section 17(c), no act, or
failure to act, on the Employee's part shall be considered "willful" unless
done, or omitted to be done, by the Employee not in good faith and without
reasonable belief that the Employee's action or omission was in the best
interest of the Employer. Notwithstanding the foregoing, the Employee shall
not be deemed to have been terminated for Cause unless and until there shall
have been delivered to the Employee a resolution duly adopted by the unanimous
vote of the entire membership of the Board of Directors, exclusive of the
Employee, at a meeting of the Board of Directors called and held for such
purpose (after reasonable notice to and an opportunity for the Employee,
together with the Employee's counsel, to be heard before the Board of
Directors), finding that in the good faith opinion of the Board of Directors,
the Employee was guilty of conduct set forth above in clauses (i) or (ii) of
the second sentence of this Section 17(c) and specifying the particulars
thereof in detail; provided, however, that no such meeting may be called or
held by the Board of Directors of the Employer for such purpose prior to April
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1, 1999, unless the Employee has been first convicted of a crime in which the
Employee appropriated, for his benefit, any assets of the Employer.
Notwithstanding anything herein to the contrary, if the Employee is terminated
during the first three (3) years of the term for any reason other than for a
conviction of a crime in which the Employee appropriated, for his benefit, any
assets of the Employer, the Employee shall continue to be paid his salary and
bonus (and his benefits and entitlement to use of an automobile as described in
Section 7 hereof shall also continue) for the remainder of the first three (3)
years of the term; and further provided that if the Employee is terminated for
alleged "Cause" at any time during the term or any renewal thereof and it is
later determined by a court of competent jurisdiction that no "Cause" existed
for the termination, the Employer shall be liable for all salary, bonuses,
benefits and automobile entitlement due and not yet paid under the term or any
renewal thereof and such sum shall be paid in a lump sum to the Executive with
pre-judgment and post-judgment interest thereon.
In addition, the Employer expressly covenants and agrees that
at all times while this Agreement or any extension thereof is in effect, the
Employee shall determine, in his sole discretion, where the warehouse and
executive/administrative offices of the Employer shall be located. The
Employer expressly acknowledges that it has been advised by the Employee that
the location of the warehouse and executive/administrative offices shall be in
New Jersey, in a location within 30 miles of the existing offices of The
Ultimate Juice Company, Inc. in Clark, New Jersey and the Employer consents
thereto. It is also hereby agreed by the Employer that in the event the
Employer breaches the above covenant, such breach shall be deemed a termination
of the Employee hereunder without
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"Cause" and the Employer's obligations to the Employee hereunder, inclusive of
salary, bonuses, benefits and automobile entitlement, shall continue for a
period equal to the greater of (a) the remainder of the term or any renewal
period or (b) five (5) full years; provided, however, that the Employee shall
not be entitled to any payment, with respect to this last paragraph of Section
17(c), beyond March 31, 2005, and in the case of such termination the Employee
shall no longer be obligated to render or provide the return consideration of
continuing to serve as an Employee of the Employer.
18. Successors and Assigns. This Agreement shall inure
to the benefit of and be binding upon the Employer, its successors and assigns,
including without limitation, any company which may acquire all or
substantially all of the Employer's assets and business or into which the
Employer may be merged, and upon the Employee, his heirs, legal
representatives, successors and assigns. The Employee may assign his right to
benefits under this Agreement but not his obligations under this Agreement.
19. Waiver. The failure of the Employer or the Employee
to insist, in any one or more instances, on performance of any term or
condition of this Agreement, shall not be construed as a waiver of any such
term, or condition, or any other term or condition, and the obligations of the
parties with respect thereto shall continue in full force and effect.
20. Notices. Any notice required to or which may be sent
hereunder shall be sent in writing, by registered or certified mail, return
receipt requested, addressed to the party for whom it is intended at the
address set forth on page 1 of this Agreement for such party. Either party
hereto may, at any time or from time to time, change the address to which
notices shall be sent in accordance with the provisions of this Section.
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21. Governing Law. This Agreement has been made and
shall be construed in accordance with the laws of the State of New Jersey.
This Agreement, when effective, supersedes all previous agreements between the
Employee and Employer regarding employment.
22. Renewal. The Employee shall have the right and
option to extend and renew this Agreement for two additional periods of three
(3) years each (for a total of six (6) additional years). The Employee shall
automatically be deemed to have exercised such right and option to extend and
renew this Agreement at the expiration of the initial and each renewal term
unless he shall send written notice to the Employer or his intention not to
renew at least 60 days prior to the expiration of the initial or any renewal
term.
23. Arbitration. Any controversy between the Employee
and Employer relating to this Agreement, or to the meaning or performance
thereof, shall be settled by arbitration in accordance with the rules and
regulations of the American Arbitration Association then in force and effect.
Judgment on any award rendered in such arbitration may be entered in any court
having jurisdiction.
24. Protection of Confidential Information.
24.1. Confidentiality. In view of the fact that the
Employee's work as an Executive of the Employer and its Subsidiaries and their
respective affiliates will bring him into close contact with many confidential
affairs of the Employer and its Subsidiaries and their respective affiliates,
including the names of the Employer's and its Subsidiaries' customers and
suppliers, matters of a business nature such as information about costs,
profits, markets, sales, other information not readily available to the public,
and plans for
23
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future developments (hereinafter collectively "Confidential Matters"), the
Employee agrees: (i) to keep secret all Confidential Matters of the Employer
and its Subsidiaries and their respective affiliates, and not to disclose such
Confidential Matters to anyone outside of the Employer and its Subsidiaries
(other than the Employer's customers or potential customers and the Employer's
vendors or suppliers or potential vendors or suppliers), either during or after
his employment with the Employer, except with the Employer's written consent at
each time as to any Confidential Matter which is to be disclosed, and (ii) to
deliver promptly to the Employer on termination of his employment, or at any
time the Employer may so request, all memoranda, notes, records, reports, lists
and other documents (and all copies thereof) and materials relating to the
Employer's and its Subsidiaries' and their respective affiliates business which
he may then possess or have under this control.
24.2. Agreement Not To Compete. During the period from the
date hereof until one (1) year after the termination or nonrenewal of the
Employee's employment with the Employer and/or its Subsidiaries for any reason
set forth in Section 17 hereof, the Employee shall not (i) purchase an
ownership interest of greater than 5% of a company or other entity which is at
such time engaged in the citrus juice beverage industry and active in the same
geographic area as the Employer or any of its Subsidiaries or their respective
affiliates, is otherwise competitive with the Employer or any of its
Subsidiaries or their respective affiliates, or is attempting to enter such
industry in such geographic area or to become otherwise competitive; (ii) act
as a consultant, officer, director or in any other capacity, whose
responsibilities are related to the citrus juice beverage industry in the same
geographic area as the Employer or any of its Subsidiaries operates; or (iii)
solicit in any
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way or entice away from the Employer or its Subsidiaries or their respective
affiliates (a) any clients or account of the Employer or its Subsidiaries or
their respective affiliates which were active clients or accounts of the
Employer or its Subsidiaries or their respective affiliates during the
Employee's employment with the Employer, (b) any prospective client or account
of the Employer or its Subsidiaries or their respective affiliates which the
Employer or its Subsidiaries or their respective affiliates was actively
engaged in soliciting during the Employee's employment with the Employer, (c)
any employee of the Employer or its Subsidiaries or their respective affiliates
(unless such employee shall have either been discharged by such entity or shall
have otherwise ceased to be employed by such entity for a period of 365 days)
or (d) any manufacturers or suppliers of the Employer's or its Subsidiaries or
their respective affiliates, which were manufacturers or suppliers of the
Employer or its Subsidiaries or their respective affiliates during the
Employee's employment with the Employer. Notwithstanding the foregoing,
however, if the Employer fails to make any payments due hereunder to the
Employee when due, the provisions of this Section 24.2 shall not apply.
24.3. Remedies. The Employee recognizes that any breach of
the covenants contained in Sections 24.1 or 24.2 hereof would irreparably
injure the Employer. Accordingly, the Employee agrees that any breach of the
covenants contained in Sections 24.1 or 24.2 hereof will result in forfeiture
to the Employer as liquidated damages of any and all amounts otherwise payable
to the Employee under this Agreement as of and from the date of such breach.
Furthermore, the Employer may, in addition to pursuing its other remedies,
obtain an injunction against the Employee from any court having jurisdiction
over
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the matter, restraining any further violation of this Agreement by the Employee
and no bond or other security shall be required in connection with such
injunction.
(b) In the event the Employee prevails in any judicial
proceeding relating to a breach by the Employer hereunder, (i) all sums
determined to be due hereunder in such judicial proceeding shall be due and
payable in a lump sum (unless otherwise ordered by the court in which such
judicial proceeding is brought) and (ii) the Employer shall be liable for all
fees and expenses, including attorneys' fees, incurred by the Employee in
connection with any action taken to enforce this Agreement or obtain judgment
for a breach hereof.
24.4. Reformation. If any of the covenants contained in
Sections 24.1 or 24.2 hereof, or any part thereof, are held to be unenforceable
because of the scope or duration of any such provision, the parties agree that
the body making such determination shall have the power to reduce the scope or
duration of such provision and, in its reduced form, said provision shall be
enforceable. If any of the covenants in Sections 24.1 or 24.2 hereof, or any
part thereof, is hereafter construed to be invalid or unenforceable, the same
shall not affect the remainder of the covenants, which shall be given full
force and effect without regard to the invalid provisions.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement the day and year first written.
THE FRESH JUICE COMPANY, INC.
By:
---------------------------------
Name: Steven Smith
Title: President
---------------------------------
Steven M. Bogen
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<PAGE> 1
EXHIBIT 10f
EXHIBIT D
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the"Agreement"), dated as of the 31st day of
March, 1996, between THE FRESH JUICE COMPANY, INC., a Delaware corporation (the
"Company"), and Daniel Petry, an individual resident of the State of New York
(the "Employee").
WHEREAS, the Company desires to employ the Employee upon the
terms and conditions set forth below; and
WHEREAS, the Employee desires to accept such employment upon
the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual agreements
contained herein, intending to be legally bound hereby, the parties hereto
agree as follows:
1. EMPLOYMENT, DUTIES AND ACCEPTANCE.
1.1. EMPLOYMENT. The Company hereby employs the Employee
to serve as a member of its sales and operations staff, with such powers and
duties as the Board of Directors or Chief Executive Officer of the Company
shall assign or vest in him at any time and from time to time.
(b) The Employee's services hereunder will be rendered at
the Company's principal executive offices, or such other place as the Company
may direct from time to time. It is understood and agreed, however, that
during the Initial Term (as defined in Section 2 below) the Employee's duties
may require periods of travel from time to time as the Company may request.
<PAGE> 2
1.2. ACCEPTANCE OF EMPLOYMENT. (a) The Employee hereby
accepts such employment and agrees to serve as described in Section 1.1 hereof.
(b) The Employee shall report to such executive officer as
the Board of Directors or Chief Executive Officer of the Company shall choose.
(c) The Employee shall not, during the Term (as defined in
Section 2 below), actively engage in any other business activity unless the
Employee has previously advised the Board of Directors of the Company in
writing of such proposed business activity and the Board of Directors of the
Company specifically advises the Employee in writing that it consents thereto.
(d) The Employee further agrees to accept election and to
serve during all or any part of the Term as an officer and director of any one
or more direct or indirect subsidiaries of the Company (each, a "Subsidiary"),
without any additional compensation therefor other than that specified in this
Agreement, if elected or appointed to any such position by the stockholders or
Board of Directors of the Company or of any Subsidiary.
2. TERM OF EMPLOYMENT.
Subject to the provisions of Section 4 hereof, the term of this
Agreement shall commence on the date hereof and shall continue for a period of
two (2) years (the "Initial Term"). In addition, if the Employee is not
offered continued employment for a period of at least one (1) year after
termination of the Initial Term, if not otherwise terminated for Good Reason
(as defined in Section 4.4 below), then he shall be paid either (i) a lump sum
cash payment of $50,000; or (ii) $100,000 in twenty-four equal monthly payments
beginning 30 days after the expiration of the Initial Term.
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<PAGE> 3
3. COMPENSATION.
3.1. SALARY; ANNUAL BONUS. (a) As compensation for all
services to be rendered to, or at the request of the Company or any of its
subsidiaries, by the Employee pursuant to this Agreement, the Company agrees to
pay the Employee a minimum annual salary of $110,000.00 (which salary includes
all compensation received from, or paid by, the Company and each of its
subsidiaries to the Employee) plus an annual bonus, which bonus, if any, shall
be determined by the Board of Directors of the Company. Such salary shall be
payable in equal bi-weekly installments.
3.2. BENEFITS. Commencing on the date hereof until such
time as otherwise determined by the Board of Directors of the Company, the
Employee shall continue to participate in and enjoy the benefits of the health
insurance and 401(k) plan in effect at The Ultimate Juice Company, Inc.
existing immediately prior to the date hereof; and thereafter the Employee
shall be entitled to participate in and enjoy the benefits of any retirement,
pension, health insurance, or other similar plan or plans which may be
instituted by the Company for the benefit of its executive officers or
employees generally, upon such terms as may be therein provided.
3.3. EXPENSES. The Company shall either, in its sole
discretion, (a) provide the Employee with a corporate American Express Card for
use by the Employee for all reasonable expenses actually incurred by him during
the Initial Term in connection with the performance of his services under this
Agreement or (b) reimburse the Employee for all reasonable expenses actually
paid by him during the Initial Term, in connection with the performance of his
services under this Agreement, upon presentation of expense statements or
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vouchers or such other supporting information, in writing, as may be required
by law to support the deductibility of such expenses for United States federal
income tax purposes or as the Board of Directors of the Company may require.
3.4. AUTOMOBILE. During the Initial Term, the Employee
shall be entitled to the use of an insured automobile leased by the Company
which shall be of the type currently being used by the Employee; provided,
however, that if the cost of insurance exceeds $3,500.00 per year, the Employee
shall pay for all amounts over $3,500.00 per year. The Company shall also
provide Employee with a car phone, however, the car phone may only be used for
business purposes.
3.5. VACATIONS. (a) The Employee shall be entitled to a
paid vacation of two (2) weeks during each year of the Initial Term.
(b) The Employee shall be entitled to as many holidays and
personal days as are in accordance with the Company's policy then in effect for
its executive officers generally upon such terms as may be provided to all
executive officers of the Company generally.
4. TERMINATION.
This Agreement and all the obligations of each of the parties
hereunder shall terminate on the earlier to occur of any of the following:
4.1. DEATH. In the event of the Employee's death.
4 2. DISABILITY. If the Employee shall become ill or is
injured or otherwise disabled and such illness, injury or disability shall be
of such nature as to prevent him from
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<PAGE> 5
performing the services to be performed by him hereunder for a period of six
consecutive months.
4.3. RETIREMENT. The Employee retires or resigns
voluntarily.
4.4. GOOD REASON. The Company may terminate the Employee
for Good Reason. "Good Reason" shall mean (i) the willful and continued
failure by the Employee to perform substantially his duties to the Company or
the willful failure to follow any directive issued by the Chief Executive
Officer or the Board of Directors, (ii) any material breach of the Agreement by
the Employee, (iii) any willful, intentional, or reckless act by the Employee
having the effect of materially injuring the business, financial condition or
prospects of the Company or the reputation of the business or injuring any
customer, supplier, employee or other business relationships of the Company or
its Subsidiaries, (iv) the conviction of the Employee for any felony, or (v)
conviction of the Employee for a crime involving larceny.
5. PROTECTION OF CONFIDENTIAL INFORMATION.
5.1. CONFIDENTIALITY. In view of the fact that the
Employee's work as an Employee of the Company and its Subsidiaries and their
respective affiliates will bring him into close contact with many confidential
affairs of the Company and its Subsidiaries and their respective affiliates,
including the names of the Company's and its Subsidiaries' customers and
suppliers, matters of a business nature such as information about costs,
profits, markets, sales, other information not readily available to the public,
and plans for future developments (hereinafter collectively "Confidential
Matters"), the Employee agrees: (i) to keep secret all Confidential Matters of
the Company and its Subsidiaries and their respective affiliates, and not
5
<PAGE> 6
to disclose such Confidential Matters to anyone outside of the Company and its
Subsidiaries, either during or after his employment with the Company, except
with the Company's written consent at each time as to any Confidential Matter
which is to be disclosed, and (ii) to deliver promptly to the Company on
termination of his employment, or at any time the Company may so request, all
memoranda, notes, records, reports, lists and other documents (and all copies
thereof) and materials relating to the Company's and its Subsidiaries' and
their respective affiliates business which he may then possess or have under
this control.
5.2. AGREEMENT NOT TO COMPETE. During the period from the
date hereof until one (1) year after the termination or nonrenewal of the
Employee's employment with the Company and/or its Subsidiaries for any reason,
the Employee shall not (i) purchase an ownership interest of greater than 5% of
a company or other entity which is at such time engaged in the citrus juice
beverage industry and active in the same geographic area as the Company or any
of its Subsidiaries or their respective affiliates, is otherwise competitive
with the Company or any of its Subsidiaries or their respective affiliates, or
is attempting to enter such industry in such geographic area or to become
otherwise competitive; (ii) act as a consultant, officer, director or in any
other capacity, whose responsibilities are related to the citrus juice beverage
industry in the same geographic area as the Company or any of its Subsidiaries
operates; or (iii) solicit in any way or entice away from the Company or its
Subsidiaries or their respective affiliates (a) any clients or accounts of the
Company or its Subsidiaries or their respective affiliates which were active
clients or accounts of the Company or its Subsidiaries or their respective
affiliates during the one (1) year period immediately prior
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<PAGE> 7
to the termination of the Employee's employment with the Company, (b) any
prospective client or account of the Company or its Subsidiaries or their
respective affiliates which the Company or its Subsidiaries or their respective
affiliates was actively engaged in soliciting during the one (1) year period
immediately prior to the termination of the Employee's employment with the
Company, (c) any employee of the Company or its Subsidiaries or their
respective affiliates (unless such employee shall have either been discharged
by such entity or shall have otherwise ceased to be employed by such entity for
a period of 365 days) or (d) any manufacturers or suppliers of the Company's or
its Subsidiaries or their respective affiliates, which were manufacturers or
suppliers of the Company or its Subsidiaries or their respective affiliates
during the one (1) year period immediately prior to the termination of the
Employee's employment with the Company. Notwithstanding the foregoing,
however, if the Employee is terminated during the Initial Term for any reason
other than as set forth in Section 4 hereof, and without being paid the full
amount of compensation that would otherwise have been paid during the Initial
Term, the provisions of this Section 5.2 shall not apply; provided, however,
that if the Employee is terminated for any reason other than as set forth in
Section 4 hereof and is paid the full compensation that would otherwise have
been paid during the Initial Term, the provisions of this Section 5.2 shall
apply and shall run from the date of the last payment made to the Employee by
the Company.
5.3. REMEDIES. (a) The Employee recognizes that any branch
of the covenants contained in Sections 5.1 or 5.2 hereof would irreparably
injure the Company. Accordingly, the Employee agrees that any breach of the
covenants contained in Sections 5.1 or 5.2 hereof will
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<PAGE> 8
result in forfeiture to the Company as liquidated damages of any and all
amounts otherwise payable to the Employee under this Agreement as of and from
the date of such breach. Furthermore, the Company may, in addition to pursuing
its other remedies, obtain an injunction against the Employee from any court
having jurisdiction over the matter, restraining any further violation of this
Agreement by the Employee and no bond or other security shall be required in
connection with such injunction.
5.4. REFORMATION. If any of the covenants contained in
Sections 5.1 or 5.2 hereof, or any part thereof, are held to be unenforceable
because of the scope or duration of any such provision, the parties agree that
the body making such determination shall have the power to reduce the scope or
duration of such provision and, in its reduced form, said provision shall be
enforceable. If any of the covenants in Sections 5.1 or 5.2 hereof, or any
part thereof, is hereafter construed to be invalid or unenforceable, the same
shall not affect the remainder of the covenants, which shall be given full
force and effect without regard to the invalid provisions.
6. REPRESENTATIONS AND WARRANTIES OF THE EMPLOYEE.
The Employee hereby represents and warrants to the Company
that (i) delivery and performance of this Agreement by the Employee does not
and will not conflict with, breach, violate or cause a default under any
contract, agreement, instrument, order, judgment or decree to which the
Employee is a party or by which he is bound, (ii) the Employee is not a party
to or bound by any employment agreement, noncompete agreement or
confidentiality agreement with any other person or entity, (iii) upon the
execution and delivery of this Agreement by the Company, this Agreement shall
be the valid and binding obligation of the Employee, enforceable
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in accordance with its terms, and (iv) as of the date immediately prior to the
date hereof, none of the Company or its Subsidiaries is in any way indebted or
obligated to the Employee and the Employee is in no way indebted or obligated
to the Company or any of its Subsidiaries, other than pursuant to or in
connection with that certain Merger Agreement, dated as of the date hereof,
among the Company, The Fresh Juice Acquisition Company, Inc., The Ultimate
Juice Company, Inc., Steven M. Bogen, Albert L. Rountree, IV, the Employee,
Mark Feldman and James Coyle.
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to the Employee
that (i) the execution, delivery and performance of this Agreement by the
Company does not and will not conflict with, breach, violate or cause a default
under any contract, agreement, instrument, order, judgment or decree to which
the Company is a party or by which it is bound and (ii) upon the execution and
delivery of this Agreement by the Employee, this Agreement shall be the valid
and binding obligation of the Company, enforceable in accordance with its
terms, except to the extent that enforceability may be limited by bankruptcy,
insolvency, moratorium or other laws affecting the enforceability of creditors'
rights generally and that equitable remedies may be granted in the discretion
of a court.
8. NOTICES.
All notices and other communications which are required or may
be given under this Agreement shall be in writing and shall be deemed to have
been duly given when (i) delivered in person, (ii) one business day after
having been sent by overnight courier, or (iii) five
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(5) days after being mailed by registered or certified first class mail,
postage prepaid, return receipt requested, to the parties hereto at the
following addresses:
If to the Company, to:
The Fresh Juice Company, Inc.
350 Northern Boulevard
Great Neck, New York 11021
Attention: Board of Directors
Facsimile No.: (516) 482-5453
If to the Employee, to:
3 Terrace Circle
Great Neck, New York 11021
with copy to:
Bourne, Noll & Kenyon
382 Springfield Avenue
Summit, New Jersey 07901
Attention: Craig M. Lessner, Esq.
Facsimile No.: (908) 277-6808
or at such other addresses as such parties shall have specified by written
notice to the other part hereto.
9. GENERAL.
9.1. GOVERNING LAW; SUBMISSION TO JURISDICTION. (a) This
Agreement, and all rights, duties and remedies hereunder shall be governed by
and construed in accordance with the laws of the State of New Jersey, without
regard to the conflict of law principles thereof.
(b) The parties agree to submit themselves to the
jurisdiction of the courts of the State of New Jersey and the United States
District Court for the jurisdiction covering the
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State of New Jersey for the resolution of any dispute in connection with or
arising out of this Agreement and the transactions contemplated hereunder.
9.2. TAX WITHHOLDING. All payments made under this
Agreement shall be reduced by any deductions or amounts to be withheld as shall
be required by applicable law and regulations.
9.3. SURVIVAL. This Agreement shall terminate and all
rights and obligations of the Company and the Employee hereunder shall cease
upon termination of the Employee's employment; provided, however, that those
rights and obligations set forth in Sections 3 (unless the Employee's
employment hereunder is terminated pursuant to Section 4 hereof) and 5 of this
Agreement shall survive and continue in full force and effect.
9.4. DESCRIPTIVE HEADINGS. The section headings contained
herein are for reference purposes only and shall not in any way effect the
meaning or interpretation of this Agreement.
9.5. ENTIRE AGREEMENT. This Agreement, including any
exhibits hereto, sets forth the entire agreement and understanding of the
partes relating to the subject matter hereof and thereof and supersedes all
prior agreements, arrangements and understandings, written or oral, relating to
the subject matter hereof and thereof.
9.6. NO THIRD PARTY CONTRACT RIGHTS. This Agreement is
intended solely for the benefit of the parties hereto. Nothing herein shall be
construed or deemed to create any rights or benefits to any third parties or
third party beneficiaries.
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9.7. SEVERABILITY. The invalidity of all or any part of
any section of this Agreement shall not render invalid the remainder of this
Agreement or the remainder of such section. If any provision of this Agreement
is so broad as to be unenforceable, such provision shall be interpreted to be
only so broad as is enforceable.
9.8. NO CONFLICT. The Employee represents and warrants to
the Company that he is subject to no presently existing written or oral
employment agreement or non-competition agreement, that he has made no
commitment of any kind inconsistent with the provisions of this Agreement and
his duties hereunder, and that he is under no disability of any kind to enter
into this Agreement and to perform all of his obligations hereunder.
9.9. ACTS OF THE COMPANY. The Employee agrees that the
Employee may not, as an officer, director or shareholder of the Company, take
any action on behalf of the Company with respect to this Agreement and the
matters of the business of the Company which relate to the Employee personally
or to his family without approval of the Board of Directors of the Company.
9.10. AMENDMENTS; WAIVERS. This Agreement may be amended,
modified superseded, canceled, renewed or extended, and the terms or covenants
hereof may be waived, only by a written instrument executed by both of the
parties hereto, or in the case of a waiver, by the party waiving compliance.
The failure of either party at any time or times to require performance of any
provision hereof shall in no manner affect the right at a later time to enforce
the same. No waiver by either party of the breach of any term or covenant
contained in this Agreement, whether by conduct or otherwise, in any one or
more instances, shall be deemed to
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be, or construed as, a further or continuing waiver of any such breach, or a
waiver of the breach of any other term or covenant contained in this Agreement,
or shall affect the validity of this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
<TABLE>
<S> <C> <C>
Attest: THE FRESH JUICE COMPANY, INC.
/s/ Steven M. Bogen By: /s/ Steven Smith
- ------------------------------ -------------------------------------------
Steven M. Bogen, Secretary Name: Steven Smith
Title: President
Witness:
Craig M. Lessner /s/ Daniel Petry
- ------------------------------ -----------------------------------------------
DANIEL PETRY
</TABLE>
13
<PAGE> 1
EXHIBIT 10g
AGREEMENT
AGREEMENT, dated as of March 31 , 1996, by and between NATURAL
JUICE COMPANY (hereinafter referred to as "CHICAGO") and FRESH JUICE, INC.
(hereinafter referred to as "FJI").
WHEREAS, CHICAGO is in the business of selling and
distributing fruit and vegetable juice products and related items;
WHEREAS, FJI is in the business of manufacturing and packaging
fruit and vegetable juice products and related items;
WHEREAS, CHICAGO desires to engage a Company to supply fresh
citrus products for distribution in the United States; and
WHEREAS, FJI desires to provide fresh citrus products to
Chicago,
IT IS NOW THEREFORE AGREED:
1. DURATION: This Agreement shall be for a five (5)
year period from the date hereof, with automatic renewals for two five (5)
year terms unless CHICAGO gives written notice to FRESH JUICE within sixty (60)
days of the expiration date of any term that CHICAGO intends not to renew this
Agreement.
2. TERRITORY: CHICAGO has the exclusive distribution
rights to distribute any fresh citrus juice, prepared by or under the direction
of FJI, its successors and or assigns, sold to the Food Service Industry in the
following areas where CHICAGO delivers directly to customers: the Greater
Chicago land area defined as Chicago and the surrounding six collar Counties,
the Greater Milwaukee area and Lake Geneva and the Jewel and Dominick's retail
stores, being the only retail exclusive exceptions permitted, in the above
defined area. In addition, CHICAGO shall also have exclusive distribution
rights for all current customers (distributors) on Schedule "A" attached hereto
and made part hereof.
FJI will not directly or indirectly sell to any other
distributor or entity for the distribution of fresh citrus products in
CHICAGO's territory, without the express written consent of CHICAGO so long as
CHICAGO's volume averages twenty (20) thousand gallons per month. CHICAGO shall
not compete with FJI except in the following states: Illinois, Indiana,
Wisconsin, Michigan, Minnesota and Ohio.
3. PRODUCTS DISTRIBUTION: CHICAGO agrees that it will
distribute the following products to be supplied by FJI under the NATURAL JUICE
name during the term of this Agreement in this territory.
<PAGE> 2
FRESH SQUEEZED:
ORANGE JUICE
GRAPEFRUIT JUICE
PINK LEMONADE
LIMEADE
LEMON JUICE
LIME JUICE
OTHER FRESH JUICE PRODUCTS
CHICAGO is only required to purchase the above products that
are part of this Agreement. Nothing contained in this Agreement is intended to
or shall prevent CHICAGO from distributing other products to its customers. In
the event there is an insufficient amount of product to supply the requirements
of FJI, its subsidiaries and CHICAGO for such products, the product available
shall be shared by FJI, its subsidiaries and CHICAGO in a proportion equal to
the percentage of their requirements of such product over the prior three (3)
months, and CHICAGO shall be permitted to order the remainder of its
requirements from other sources until FJI is once again capable of providing
all of CHICAGO's requirements.
4. PRICING: The parties agree that CHICAGO shall pay
the lesser of:
(A) $1.00 per gallon over FJI's cost of production; or
(B) An amount equal to or less than the lowest price
charged to any customer of FJI, excluding co-pack
arrangements, provided however that with CHICAGO's
consent FJI may charge other customers a lower price
than CHICAGO without lowering CHICAGO's price.
CHICAGO's consent may be oral until such time as
CHICAGO advises FJI (in writing) that oral consent is
no longer effective; if CHICAGO so elects, then any
future consents must be in writing to be valid.
5. PAYMENT TERMS: CHICAGO agrees to pay FJI the gross
invoice price of products shipped plus or minus any credits within seventeen
(17) days of receipt of the product at CHICAGO's Wood Dale, Illinois facility.
6. RESPONSIBILITY OF FJI: FJI shall be responsible to
perform the following:
A. Supply CHICAGO's requirements of the fresh
squeezed juices described in paragraph (3) above and such other products as
requested by CHICAGO and agreed to by FJI, from time to time.
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B. Comply with all pertinent regulations promulgated
by the Florida Department of Citrus, United States Department of Agriculture
and other regulatory agencies as applicable to the manufacturing and shipping
of fresh citrus products.
C. FJI expressly warrants the merchantability of its
products and suitability for consumption of its products in accordance with
standards set by the Florida Department of Citrus.
D. FJI expressly warrants and represents that it
shall not allow any product set forth in paragraph 3 above, to be sold to or
distributed in any territory set forth in paragraph 2 of this agreement unless
said product is distributed by CHICAGO or CHICAGO gives its express written
consent.
E. FJI warrants and represents that it is not
currently a party to any contract which would be inconsistent with its
obligations to give CHICAGO exclusive territorial distribution rights for its
fresh squeezed citrus products.
7. RESPONSIBILITIES OF CHICAGO: CHICAGO shall be
responsible for the following:
A. CHICAGO will be responsible to arrange all
transportation from FJI's plant to Chicago's distribution points. CHICAGO
expressly accepts all responsibility for the proper shipping and handling of
the products from FJI's plant to point of sale.
B. CHICAGO will place orders for products in
accordance with FJI's promulgated procedures, which FJI shall maintain in
conformity with industry standards.
C. CHICAGO shall order its fresh citrus products
exclusively from FJI on a year round basis; provided, however, if FJI does not
have an ownership interest with a manufacturing plant in the western region,
CHICAGO shall have the right to order its fresh juice from other sources during
the months of August 1 thru November 30.
D. CHICAGO agrees to consistently label all products
handled, with one label identified by CHICAGO, as long as this agreement is in
effect, whether or not its purchases are made from the FJI plant. FJI may
agree to allow more than one label.
8. INSURANCE: FJI acknowledges that it has general and
product liability coverage in a minimum amount of $1 million/$1 million and
shall include CHICAGO as a named insured on its policy. A certificate to this
effect will be forwarded to CHICAGO within fifteen (15) days of signing this
Agreement.
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9. RISK OF LOSS: Risk of Loss for damage to or loss of
product passes from FJI to CHICAGO upon the transfer of delivery of possession
to CHICAGO or its assigned carriers provided that the product meets
specifications of Paragraphs 7B and 7C when delivered to CHICAGO.
10. ADDITIONAL RIGHTS OF FJI: In the event CHICAGO sells
its stock or assets to a third party, other than a sale or transfer of stock or
assets to family members, FJI shall have the right of first refusal to purchase
CHICAGO at the same price and terms. CHICAGO shall give FJI thirty (30) days
written notice of its intent to sell and FJI shall have thirty (30) days from
receipt of notice to give CHICAGO written notice of FJI's intent to exercise
this option. In the event FJI fails to give CHICAGO timely written notice of
its intent to exercise its option, it shall be conclusively presumed that FJI
has waived its option to purchase CHICAGO.
Notwithstanding any other provision herein, if CHICAGO is sold
to a third party, other than family members, and FJI does not exercise its
option, then this Agreement shall terminate on the earlier of the end of the
term hereunder (or any renewal under Paragraph 1 hereof) or three (3) years
after the closing date on the sale of CHICAGO.
11. ACTS CONSTITUTING DEFAULT OF CONTRACT:
A. If either party should be declared insolvent
or file bankruptcy or be involuntarily placed into receivership, this Agreement
shall be considered terminated.
B. If FJI, its successors or assigns, allows any
of its fresh squeezed product to be distributed, by any entity other than
CHICAGO, in any territory set forth in paragraph 2 of this agreement or to the
customers on Schedule A annexed hereto then FJI shall be in breach of this
agreement.
C. Any breach of any covenant or obligation of
this Agreement.
12. REMEDIES:
A. If a party in breach of the terms of this
Agreement fails to correct the deficiency within twenty (20) days of written
notice thereof, with the exception of a breach in the payment terms which must
be cured within five (5) days of receipt of written notice, the other party
shall have the option to continue this Agreement or, to declare the contract
terminated.
B. Nothing contained herein, however, shall
prevent either party from bringing a claim against the other for breach of
contract or exercising all legal rights resultant
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therefrom.
C. In the event FJI fails to correct a breach of
paragraph 11B within twenty (20) days of receipt of written notice, and
provided CHICAGO prevails in any such action, FJI shall be responsible to pay
all reasonable attorney's fees and costs associated with any negotiation,
arbitration or litigation incurred by CHICAGO in enforcing this Agreement.
D. FJI recognizes that a breach of Paragraph 11B
would cause irreparable harm to CHICAGO for which damages would be difficult to
calculate, accordingly FJI agrees to the entry of injunctive relief in the
event it breaches Paragraph 11B.
13. LAW GOVERNING: This Agreement shall be governed by
the laws of the State of Illinois and any dispute or controversies arising in
connection with it shall be resolved in accordance with those laws and under
the rules for commercial arbitration of the American Arbitration Association.
14. JURISDICTION: In the event of an alleged breach of
paragraphs 4, 6D or 11B of this agreement, the parties agree that jurisdiction
shall be in the Circuit Court of Cook County, Illinois. In the event of an
alleged breach of any other provision jurisdiction shall be in the State of
Florida.
15. NOTICE: Any notice required under the terms of this
Agreement shall be addressed as follows:
As to CHICAGO Brian Duffy
550 Clayton Ct.
Wood Dale, IL 60191
As to THE FRESH JUICE, Steven Smith
COMPANY, INC. 350 Northern Boulevard
Great Neck, New York 11021
16. ENTIRE UNDERSTANDING: The above terms constitute the
entire understanding of the parties. This contract may only be amended by
written agreement of the parties, signed by both parties and witnessed in terms
identical to this original contract. All notices herein shall be by registered
or certified mail.
ATTEST: NATURAL JUICE COMPANY OF CHICAGO
Wood Dale, IL
By: /s/ Brian Duffy
- ------------------------- ----------------------------
Name: Brian Duffy
Its: President
- -------------------------
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ATTEST: THE FRESH JUICE COMPANY, INC.,
a Delaware corporation
By: /s/ Steven Smith
- ------------------------- -----------------------------
Name: Steven Smith
Its: President
- -------------------------
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<PAGE> 7
APPENDIX A
A. LOPRESTI & SONS CLEAR SPRINGS LABEL
CLEVELAND OHIO
D CANALE CLEAR SPRINGS LABEL
MEMPHIS TENNESSEE
MBM CORPORATION ULTIMATE LABEL
COLUMBUS OHIO
MELODY FARMS NATURAL JUICE LABEL
LIVONIA MICHIGAN
PIAZZA PRODUCE NATURAL JUICE LABEL
INDIANAPOLIS INDIANA
SOUTHERN BELLE DAIRY CLEAR SPRINGS LABEL
GOODLETTSVILLE TENNESSEE
<PAGE> 1
Exhibit (23)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors
of The Fresh Juice Company, Inc. and Subsidiaries:
As independent public accountants, we hereby consent to the inclusion of our
report dated August 31, 1995 on the combined financial statements of The
Ultimate Juice Company, Inc. and Affiliated Company as of June 30, 1995 and 1994
and for the years then ended included in this Form 8-K.
WITHUM, SMITH & BROWN
New Brunswick, New Jersey
April 10, 1996
<PAGE> 1
EXHIBIT 99
THE FRESH JUICE COMPANY
THE FRESH JUICE COMPANY SIGNS MERGER
AGREEMENTS WITH THE ULTIMATE JUICE
COMPANY AND CLEAR SPRINGS CITRUS
Combined Company to have Approximately $25 million in Annual Sales
FOR IMMEDIATE RELEASE
MONDAY, APRIL 1, 1996
GREAT NECK, NEW YORK, Monday April 1, 1996 -- The Fresh Juice Company, Inc.
(NASDAQ:FRSH) announced today that they have merged a wholly owned subsidiary
of The Fresh Juice Company, Inc. with and into The Ultimate Juice Company, Inc.
("Ultimate"). In exchange for all of the outstanding shares of Ultimate, The
Fresh Juice Company will issue to Ultimate 1,140,000 new Fresh Juice Company
shares.
Ultimate is a private fresh squeezed juice company with headquarters in New
Jersey. Ultimate markets and distributes fresh squeezed juice primarily on the
east coast.
The Fresh Juice Company has also signed a definitive merger agreement with
Clear Springs Citrus Company, Inc. ("Clear Springs") to merger Clear Springs
with a wholly owned subsidiary of The Fresh Juice Company. In exchange for all
of the outstanding shares of Clear Springs, The Fresh Juice Company plans to
issue to Clear Springs 1,160,000 new Fresh Juice Company shares. The Clear
Springs merger is subject to shareholder approval of an amendment to The Fresh
Juice Company's Certificate of Incorporation to increase the number of its
authorized capital stock in order to consummate such merger.
Clear Springs is a private fresh squeezed juice company with headquarters in
Florida. Clear Springs operates a production facility and will be merging into
The Fresh Juice Company of Florida, a wholly owned subsidiary of The Fresh
Juice Company, which operates the production facility for the Fresh Juice
Company. Clear Springs produces, markets, and distributes fresh squeezed
juice. Clear Springs is the primary producer of fresh squeezed juice for
Ultimate.
After effecting the two mergers, The Fresh Juice Company will have
approximately $25 million in annual sales.
FOR FURTHER INFORMATION, PLEASE CONTACT: JEFF SMITH
VICE PRESIDENT,
STRATEGIC DEVELOPMENTS &
INVESTOR RELATIONS
THE FRESH JUICE COMPANY, INC.
(516) 482-5190
