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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
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SCHEDULE 13D
UNDER THE SECURITIES AND EXCHANGE ACT OF 1934
(AMENDMENT NO. 7)
-------------------
DR PEPPER/SEVEN-UP COMPANIES, INC.
(Name of Subject Company)
-------------------
DP/SU ACQUISITION INC.
AND
CADBURY SCHWEPPES PLC
(Bidder)
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COMMON STOCK, $.01 PAR VALUE
(Title of Class of Securities)
-------------------
256131 30 1
(CUSIP Number of Class of Securities)
-------------------
HENRY A. UDOW, ESQ.
DP/SU ACQUISITION INC.
CADBURY SCHWEPPES PLC
C/O CADBURY BEVERAGES INC.
6 HIGH RIDGE PARK
P.O. BOX 3800
STAMFORD, CONNECTICUT 06905-0800
TELEPHONE: (203) 329-0911
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Bidder)
-------------------
COPY TO:
ALFRED J. ROSS, JR., ESQ.
SHEARMAN & STERLING
599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 848-4000
FEBRUARY 1, 1995
CALCULATION OF FILING FEE
TRANSACTION VALUATION AMOUNT OF FILING FEE
$1,757,552,610.00* $351,510.52
/ / Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: __________________________________________
Form or Registration No.: ________________________________________
Filing Party: ____________________________________________________
Date Filed: ______________________________________________________
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* NOTE: THE TRANSACTION VALUE IS CALCULATED BY MULTIPLYING $33.00, THE PER SHARE
TENDER OFFER PRICE, BY 53,259,170, THE SUM OF 46,159,802, THE NUMBER OF
OUTSTANDING SHARES OF COMMON STOCK NOT ALREADY OWNED BY CADBURY SCHWEPPES PLC
OR ITS SUBSIDIARIES; AND 7,099,368, THE NUMBER OF SHARES OF COMMON STOCK
SUBJECT TO OPTIONS OUTSTANDING.
<PAGE>
CUSIP NO. 256131 30 1
<TABLE>
<S> <C>
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of above Person
CADBURY BEVERAGES INC.
2 Check the Appropriate Box if a Member of a Group (See Instructions) (a) / /
(b) / /
3 SEC Use Only
4 Source of Funds (See Instructions)
BK, AF, WC
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) / /
6 Citizenship or Place of Organization
DELAWARE
7 Aggregate Amount Beneficially Owned by Each Reporting Person
15,620,746
8 Check if the Aggregate Amount in Row (7) Excludes Certain Shares (See Instructions) / /
9 Percent of Class Represented by Amount in Row (7)
25.3%
10 Type of Reporting Person (See Instructions)
CO
</TABLE>
<PAGE>
CUSIP NO. 256131 30 1
<TABLE>
<S> <C>
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of above Person
CADBURY SCHWEPPES plc
2 Check the Appropriate Box if a Member of a Group (See Instructions) (a) / /
(b) / /
3 SEC Use Only
4 Source of Funds (See Instructions)
BK, AF, WC
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) / /
6 Citizenship or Place of Organization
ENGLAND
7 Aggregate Amount Beneficially Owned by Each Reporting Person
15,620,746
8 Check if the Aggregate Amount in Row (7) Excludes Certain Shares (See Instructions) / /
9 Percent of Class Represented by Amount in Row (7)
25.3%
10 Type of Reporting Person (See Instructions)
CO
</TABLE>
<PAGE>
This Tender Offer Statement on Schedule 14D-1 and Schedule 13D (this
"Statement") relates to the offer by DP/SU Acquisition Inc., a Delaware
corporation ("Purchaser") and an indirect wholly owned subsidiary of Cadbury
Schweppes plc, a company organized under the laws of England ("Parent"), to
purchase all outstanding shares of Common Stock, par value $.01 per share (the
"Common Stock"), of Dr Pepper/Seven-Up Companies, Inc., a Delaware corporation
(the "Company"), and the associated preferred stock purchase rights (the
"Rights" and, together with the Common Stock, the "Shares") issued pursuant to
the Rights Agreement, dated as of September 1, 1993 (as amended), between the
Company and Bank One, Texas, N.A., as Rights Agent, at a price of $33.00 per
Share, net to the seller in cash, upon the terms and subject to the conditions
set forth in Purchaser's Offer to Purchase dated February 1, 1995 (the "Offer to
Purchase") and in the related Letter of Transmittal (which together constitute
the "Offer"), copies of which are attached hereto as Exhibits (a)(1) and (a)(2),
respectively.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Dr Pepper/Seven-Up Companies, Inc., a
Delaware corporation, which has its principal executive offices at 8144 Walnut
Hill Lane, Dallas, Texas 75231-4372.
(b) The class of equity securities being sought is all the outstanding
shares of Common Stock, par value $.01 per share, of the Company, together with
the associated Rights. The information set forth in the Introduction and Section
1 ("Terms of the Offer; Expiration Date") of the Offer to Purchase is
incorporated herein by reference.
(c) The information concerning the principal market in which the Shares are
traded and certain high and low sales prices for the Shares in such principal
market set forth in Section 6 ("Price Range of Shares; Dividends") of the Offer
to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) This Statement is filed by Purchaser and Parent. The
information concerning the name, state or other place of organization, principal
business and address of the principal office of each of Purchaser and Parent,
and the information concerning the name, business address, present principal
occupation or employment and the name, principal business and address of any
corporation or other organization in which such employment or occupation is
conducted, material occupations, positions, offices or employments during the
last five years and citizenship of each of the executive officers and directors
of Purchaser and Parent are set forth in the Introduction, Section 8 ("Certain
Information Concerning Purchaser and Parent") and Schedule I of the Offer to
Purchase and are incorporated herein by reference.
(e) and (f) During the last five years, none of Purchaser or Parent, and, to
the best knowledge of Purchaser and Parent, none of the persons listed in
Schedule I of the Offer to Purchase has been (i) convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting activities
subject to, federal or state securities laws or finding any violation of such
laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) The information set forth in Section 8 ("Certain Information Concerning
Purchaser and Parent") and Section 10 ("Background of the Offer; Contacts with
the Company; the Merger Agreement and the Stockholders Agreement") is
incorporated herein by reference.
3
<PAGE>
(b) The information set forth in the Introduction, Section 7 ("Certain
Information Concerning the Company"), Section 8 ("Certain Information Concerning
Purchaser and Parent"), Section 10 ("Background of the Offer; Contacts with the
Company; the Merger Agreement and the Stockholders Agreement") and Section 11
("Purpose of the Offer; Plans for the Company After the Offer and the Merger")
of the Offer to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(c) The information set forth in Section 9 ("Financing of the Offer and
the Merger") of the Offer to Purchase is incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in the Introduction, Section 10
("Background of the Offer; Contacts with the Company; the Merger Agreement and
the Stockholders Agreement") and Section 11 ("Purpose of the Offer; Plans for
the Company After the Offer and the Merger") of the Offer to Purchase is
incorporated herein by reference.
(f) and (g) The information set forth in Section 13 ("Effect of the Offer on
the Market for Shares, Exchange Listing and Exchange Act Registration") of the
Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) and (b) The information set forth in Section 8 ("Certain Information
Concerning Purchaser and Parent") of the Offer to Purchase is incorporated
herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, Section 8 ("Certain
Information Concerning Purchaser and Parent"), Section 10 ("Background of the
Offer; Contacts with the Company; the Merger Agreement and the Stockholders
Agreement") and Section 11 ("Purpose of the Offer; Plans for the Company After
the Offer and the Merger") of the Offer to Purchase is incorporated herein by
reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and Section 16 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 8 ("Certain Information Concerning
Purchaser and Parent") of the Offer to Purchase is incorporated herein by
reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) [Not applicable.]
(b)-(c) and (e) The information set forth in Section 15 ("Certain Legal
Matters and Regulatory Approvals") of the Offer to Purchase is incorporated
herein by reference.
(d) The information set forth in Section 13 ("Effect of the Offer on the
Market for the Shares, Exchange Listing and Exchange Act Registration") of the
Offer to Purchase is incorporated herein by reference.
4
<PAGE>
(f) The information set forth in the Offer to Purchase, the Letter of
Transmittal and the Agreement and Plan of Merger, dated as of January 25, 1995,
among Parent, Purchaser and the Company, copies of which are attached hereto as
Exhibits (a)(1), (a)(2) and (c)(1), is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C>
(a)(1) Form of Offer to Purchase dated February 1, 1995.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter from Goldman, Sachs & Co. and Kleinwort Benson North America Inc. to
Brokers, Dealers, Commercial Banks, Trust Companies and Nominees.
(a)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies and
Nominees to Clients.
(a)(6) Form of Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Summary Advertisement as published in The Wall Street Journal on February 1, 1995.
(a)(8) Press Release issued by Parent and the Company on January 26, 1995.
(b)(1) Facilities Agreement between Cadbury Schweppes Finance Limited, Parent, Samuel
Montagu & Co. Limited, Midland Bank plc and The Toronto-Dominion Bank, dated
January 26, 1995.
(b)(2) Underwriting Agreement between Kleinwort Benson Limited and Parent, dated January
26, 1995.
(c)(1) Agreement and Plan of Merger, dated as of January 25, 1995, among Parent, Purchaser
and the Company.
(c)(2) Stockholders Agreement, dated as of January 25, 1995, among Purchaser and John R.
Albers, Ira M. Rosenstein, and Thomas O. Hicks.
(c)(3) Extract Production Agreement by and among Cadbury Beverages Inc., The Seven-Up
Company and Dr Pepper Company.
(c)(4) Post-Mix Concentrate/Syrup Royalty Agreement by and between Cadbury Beverages Inc.
and Dr Pepper Company.
(d) None.
(e) Not applicable.
(f) None.
</TABLE>
5
<PAGE>
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
DP/SU ACQUISITION INC.
By: /s/ HENRY A. UDOW
..................................
Name: Henry A. Udow
Title: Vice President
February 1, 1995
6
<PAGE>
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
CADBURY BEVERAGES INC.
By: /s/ HENRY A. UDOW
..................................
Name: Henry A. Udow
Title: Vice President
February 1, 1995
7
<PAGE>
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
CADBURY SCHWEPPES PLC
By: /s/ HENRY A. UDOW
..................................
Name: Henry A. Udow
Title: Legal Director of Beverages
Stream
February 1, 1995
8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE IN
SEQUENTIAL
EXHIBIT NUMBERING
NO. SYSTEM
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<S> <C> <C>
(a)(1) Form of Offer to Purchase dated February 1, 1995.................
(a)(2) Form of Letter of Transmittal....................................
(a)(3) Form of Notice of Guaranteed Delivery............................
(a)(4) Form of Letter from Goldman, Sachs & Co. and Kleinwort Benson
North America Inc. to Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees...........................................
(a)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees to Clients................................
(a)(6) Form of Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9....................................
(a)(7) Summary Advertisement as published in The Wall Street Journal on
February 1, 1995.................................................
(a)(8) Press Release issued by Parent and the Company on January 26,
1995.............................................................
(b)(1) Facilities Agreement between Cadbury Schweppes Finance Limited,
Parent, Samuel Montagu & Co. Limited, Midland Bank plc and The
Toronto-Dominion Bank, dated January 26, 1995....................
(b)(2) Underwriting Agreement between Kleinwort Benson Limited and
Parent, dated January 26, 1995...................................
(c)(1) Agreement and Plan of Merger, dated as of January 25, 1995, among
Parent, Purchaser and the Company................................
(c)(2) Stockholders Agreement, dated as of January 25, 1995, among
Purchaser and John R. Albers, Ira M. Rosenstein, and Thomas O.
Hicks............................................................
(c)(3) Extract Production Agreement by and among Cadbury Beverages Inc.,
The Seven-Up Company and Dr Pepper Company.......................
(c)(4) Post-Mix Concentrate/Syrup Royalty Agreement by and between
Cadbury Beverages Inc. and Dr Pepper Company.....................
</TABLE>
Exhibit (a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
DR PEPPER/SEVEN-UP COMPANIES, INC.
AT
$33.00 NET PER SHARE
BY
DP/SU ACQUISITION INC.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
CADBURY SCHWEPPES PLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, MARCH 1, 1995, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST THE
NUMBER OF SHARES THAT, WHEN COMBINED WITH THE SHARES ALREADY OWNED BY CADBURY
SCHWEPPES PLC AND ITS DIRECT OR INDIRECT SUBSIDIARIES, SHALL CONSTITUTE A
MAJORITY OF THE THEN OUTSTANDING SHARES ON A FULLY DILUTED BASIS. THE OFFER IS
ALSO CONDITIONED UPON, AMONG OTHER THINGS, THE EXPIRATION OR TERMINATION OF ANY
APPLICABLE ANTITRUST WAITING PERIODS.
------------------------
THE BOARD OF DIRECTORS OF DR PEPPER/SEVEN-UP COMPANIES, INC. (THE "COMPANY")
UNANIMOUSLY HAS DETERMINED THAT EACH OF THE OFFER AND THE MERGER IS FAIR TO, AND
IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY (OTHER THAN CADBURY
SCHWEPPES PLC AND ITS SUBSIDIARIES), AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE
OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
shares of common stock, par value $.01 per share (the "Common Stock"), of the
Company and the associated preferred stock purchase rights (together with the
Common Stock, the "Shares") should either (1) complete and sign the Letter of
Transmittal (or a facsimile thereof) in accordance with the instructions in the
Letter of Transmittal and mail or deliver it together with the certificate(s)
evidencing tendered Shares, and any other required documents, to the Depositary
or tender such Shares pursuant to the procedure for book-entry transfer set
forth in Section 3 or (2) request such stockholder's broker, dealer, commercial
bank, trust company or other nominee to effect the transaction for such
stockholder. Any stockholder whose Shares are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee must contact
such broker, dealer, commercial bank, trust company or other nominee if such
stockholder desires to tender such Shares.
A stockholder who desires to tender Shares and whose certificates evidencing
such Shares are not immediately available, or who cannot comply with the
procedure for book-entry transfer on a timely basis, may tender such Shares by
following the procedure for guaranteed delivery set forth in Section 3.
Questions or requests for assistance may be directed to the Information
Agent or to the Dealer Managers at their respective addresses and telephone
numbers set forth on the back cover of this Offer to Purchase. Additional copies
of this Offer to Purchase, the Letter of Transmittal and the Notice of
Guaranteed Delivery may also be obtained from the Information Agent or from
brokers, dealers, commercial banks or trust companies.
------------------------
THE DEALER MANAGERS FOR THE OFFER ARE:
GOLDMAN, SACHS & CO. KLEINWORT BENSON NORTH AMERICA INC.
------------------------
February 1, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
INTRODUCTION........................................................................... 1
1. Terms of the Offer; Expiration Date.............................................. 3
2. Acceptance for Payment and Payment for Shares.................................... 4
3. Procedures for Tendering Shares.................................................. 6
4. Withdrawal Rights................................................................ 8
5. Certain Federal Income Tax Consequences.......................................... 9
6. Price Range of Shares; Dividends................................................. 9
7. Certain Information Concerning the Company....................................... 10
8. Certain Information Concerning Purchaser and Parent.............................. 13
9. Financing of the Offer and the Merger............................................ 19
10. Background of the Offer; Contacts with the Company; the Merger Agreement and
Stockholders Agreement........................................................... 21
11. Purpose of the Offer; Plans for the Company After the Offer and the Merger....... 37
12. Dividends and Distributions...................................................... 39
13. Effect of the Offer on the Market for the Shares, Exchange Listing and Exchange
Act Registration................................................................. 39
14. Certain Conditions of the Offer.................................................. 40
15. Certain Legal Matters and Regulatory Approvals................................... 43
16. Fees and Expenses................................................................ 46
17. Miscellaneous.................................................................... 46
Schedule I. Directors and Executive Officers of Parent and Purchaser
</TABLE>
<PAGE>
To the Holders of Common Stock of
DR PEPPER/SEVEN-UP COMPANIES, INC.:
INTRODUCTION
DP/SU Acquisition Inc., a Delaware corporation ("Purchaser") and an indirect
wholly owned subsidiary of Cadbury Schweppes plc, a company organized under the
laws of England ("Parent"), hereby offers to purchase all outstanding shares of
Common Stock, par value $.01 per share (the "Common Stock"), of Dr
Pepper/Seven-Up Companies, Inc., a Delaware corporation (the "Company"), and the
associated preferred stock purchase rights (the "Rights" and, together with the
Common Stock, the "Shares") issued pursuant to the Rights Agreement, dated as of
September 1, 1993, between the Company and Bank One, Texas, N.A., as Rights
Agent (as amended, the "Rights Agreement"), at a price of $33.00 per Share, net
to the seller in cash, upon the terms and subject to the conditions set forth in
this Offer to Purchase and in the related Letter of Transmittal (which together
constitute the "Offer").
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, stock transfer taxes with respect to the purchase of Shares by
Purchaser pursuant to the Offer. Purchaser will pay all charges and expenses of
Goldman, Sachs & Co. ("Goldman Sachs") and Kleinwort Benson North America Inc.
("KBNA"), which are acting as Dealer Managers for the Offer (in such capacity,
the "Dealer Managers"), First Chicago Trust Company of New York (the
"Depositary") and Georgeson & Company Inc. (the "Information Agent") incurred in
connection with the Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") UNANIMOUSLY HAS
DETERMINED THAT EACH OF THE OFFER AND THE MERGER (AS DEFINED BELOW) IS FAIR TO,
AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY (OTHER THAN PARENT
AND ITS SUBSIDIARIES), AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND
TENDER THEIR SHARES PURSUANT TO THE OFFER.
Each of Donaldson, Lufkin and Jenrette Securities Corporation ("DLJ") and BT
Securities Corporation ("BT"), the Company's financial advisors, has delivered
to the Board its written opinion that the consideration to be received by the
stockholders of the Company (other than Parent and its Subsidiaries) pursuant to
each of the Offer and the Merger is fair to such stockholders from a financial
point of view. Copies of the opinions of DLJ and BT are contained in the
Company's Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule
14D-9"), which is being mailed to stockholders herewith.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST THE
NUMBER OF SHARES THAT, WHEN COMBINED WITH THE SHARES ALREADY OWNED BY PARENT OR
ITS DIRECT OR INDIRECT SUBSIDIARIES, SHALL CONSTITUTE A MAJORITY OF THE SHARES
THEN OUTSTANDING ON A FULLY DILUTED BASIS (THE "MINIMUM CONDITION"). THE OFFER
IS ALSO CONDITIONED UPON, AMONG OTHER THINGS, THE EXPIRATION OR TERMINATION OF
ANY APPLICABLE ANTITRUST WAITING PERIODS. SEE SECTION 14, WHICH SETS FORTH IN
FULL THE CONDITIONS TO THE OFFER.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of January 25, 1995 (the "Merger Agreement"), among Parent, Purchaser and the
Company. The Merger Agreement provides that, among other things, as soon as
practicable after the purchase of Shares pursuant to the Offer and the
satisfaction of the other conditions set forth in the Merger Agreement and in
accordance with the relevant provisions of the General Corporation Law of the
State of Delaware ("Delaware Law"), including provisions under Section 203 of
Delaware Law described below relating to the required vote of unaffiliated
shareholders, Purchaser will be merged with and into the Company (the "Merger").
Following consummation of the Merger, the Company will
<PAGE>
continue as the surviving corporation (the "Surviving Corporation") and will
become an indirect wholly owned subsidiary of Parent. At the effective time of
the Merger (the "Effective Time"), each Share issued and outstanding immediately
prior to the Effective Time (other than Shares held in the treasury of the
Company or owned by Purchaser, Parent or any direct or indirect wholly owned
subsidiary of Parent or of the Company, and other than Shares held by
stockholders who shall have demanded and perfected appraisal rights under
Delaware Law) will be cancelled and converted automatically into the right to
receive $33.00 in cash, or any higher price that may be paid per Share in the
Offer, without interest (the "Merger Consideration"). The Merger Agreement is
more fully described in Section 10.
Simultaneously with entering into the Merger Agreement, Purchaser, and John
R. Albers, Chairman and Chief Executive Officer of the Company and a Director of
the Company, Ira M. Rosenstein, Executive Vice President and Chief Financial
Officer of the Company, and Thomas O. Hicks, a Director of the Company (each a
"Stockholder", and, collectively, the "Stockholders") entered into a
Stockholders Agreement, dated as of January 25, 1995 (the "Stockholders
Agreement"), pursuant to which, upon the terms set forth therein, each
Stockholder has agreed to tender and sell, in accordance with the terms of the
Offer, all Shares owned (beneficially or of record) by such Stockholder.
Further, each Stockholder has agreed not to withdraw his Shares unless (i)
taking into account the Shares tendered by the Stockholders, the Minimum
Condition shall not have been satisfied in the Offer, or (ii) the Board or any
committee thereof shall have withdrawn or modified in any manner adverse to
Purchaser or Parent its approval or recommendation of the Offer, the Merger, or
the Merger Agreement. As of January 25, 1995, the Stockholders owned (either
beneficially or of record, excluding certain Shares held in certain trusts and
Shares issuable upon the exercise of stock options currently outstanding) Shares
constituting approximately 4.4 percent of the outstanding Shares on a fully
diluted basis.
The Merger Agreement provides that, promptly upon the purchase by Purchaser
of Shares pursuant to the Offer and from time to time thereafter, Purchaser
shall be entitled to designate up to such number of directors, rounded up to the
next whole number, on the Board as will give Purchaser representation on the
Board equal to the product of the number of directors on the Board multiplied by
the percentage that the aggregate number of Shares then beneficially owned by
Purchaser and its affiliates following such purchase bears to the total number
of Shares then outstanding. In the Merger Agreement, the Company has agreed to
take all actions necessary to cause Purchaser's designees to be elected as
directors of the Company, including increasing the size of the Board or securing
the resignations of incumbent directors or both.
The consummation of the Merger is subject to the satisfaction or waiver of
certain conditions, including the approval and adoption of the Merger Agreement
by the requisite vote of the stockholders of the Company. See Section 11. Under
the Company's Certificate of Incorporation and Delaware Law, the affirmative
vote of the holders of a majority of the outstanding Shares is required to
approve and adopt the Merger Agreement and the Merger. In addition, under
Section 203 of Delaware Law, as a result of the acquisition by a subsidiary of
Parent in August of 1993 of a number of Shares which together with Shares
already owned by Parent and its affiliates exceeded 15% of the outstanding
Shares (as more fully described in Section 8), the affirmative vote of the
holders of at least two-thirds of the outstanding Shares not owned by Parent or
Purchaser or any of their affiliates or associates is required to approve and
adopt the Merger Agreement and the Merger during a three-year period expiring on
August 19, 1996. After such date, only the affirmative vote of the holders of a
majority of the outstanding Shares (including the Shares owned by Parent,
Purchaser or any such affiliates or associates) will be required to approve and
adopt the Merger Agreement and the Merger.
BECAUSE OF THE POSSIBILITY THAT THE VOTE REQUIRED TO APPROVE THE MERGER
UNDER SECTION 203 OF DELAWARE LAW MAY NOT BE OBTAINED AT THE STOCKHOLDERS'
MEETING (AS DEFINED HEREIN)
2
<PAGE>
AFTER CONSUMMATION OF THE OFFER, THERE CAN BE NO ASSURANCE THAT THE MERGER WILL
OCCUR BEFORE AUGUST 20, 1996. AS A CONSEQUENCE, THERE CAN BE NO ASSURANCE THAT
STOCKHOLDERS WHO FAIL TO TENDER SHARES PURSUANT TO THE OFFER WILL RECEIVE THE
MERGER CONSIDERATION BEFORE SUCH DATE. SEE SECTION 11.
The Company has advised Purchaser that as of January 20, 1995, 61,780,548
Shares were issued and outstanding and that (i) 6,451 Shares were held in the
treasury of the Company, (ii) no Shares were held by the subsidiaries of the
Company, (iii) 2,630,000 Shares were reserved for future issuance to employees
as restricted stock and pursuant to employee stock options granted pursuant to
the Company's stock option plans or reserved for directors and (iv) 7,099,368
Shares were subject to issuance upon the exercise of outstanding options. The
Company has advised Purchaser that through January 25, 1995, the date of the
Merger Agreement, the Company has not issued any Shares or any options to
purchase Shares. As a result, as of the date of this Offer to Purchase, taking
into account the 15,620,746 Shares owned by the Parent on the date hereof, the
Minimum Condition would be satisfied if Purchaser acquired pursuant to the Offer
18,819,213 Shares.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
1. Terms of the Offer; Expiration Date. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of such extension or amendment), Purchaser will accept for
payment and pay for all Shares validly tendered prior to the Expiration Date (as
hereinafter defined) and not withdrawn as permitted by Section 4. The term
"Expiration Date" means 12:00 midnight, New York City time, on Wednesday, March
1, 1995, unless and until Purchaser, in its sole discretion (but subject to the
terms and conditions of the Merger Agreement), shall have extended the period
during which the Offer is open, in which event the term "Expiration Date" shall
mean the latest time and date at which the Offer, as so extended by Purchaser,
shall expire.
Purchaser expressly reserves the right, in its sole discretion, at any time
and from time to time, to extend for any reason the period of time during which
the Offer is open, including the occurrence of any of the conditions specified
in Section 14, by giving oral or written notice of such extension to the
Depositary. During any such extension, all Shares previously tendered and not
withdrawn will remain subject to the Offer, subject to the rights of a tendering
stockholder to withdraw his or her Shares. See Section 4.
Subject to the applicable regulations of the Securities and Exchange
Commission (the "Commission"), Purchaser also expressly reserves the right, in
its sole discretion (but subject to the terms and conditions of the Merger
Agreement), at any time and from time to time, (i) to delay acceptance for
payment of, or, regardless of whether such Shares were theretofore accepted for
payment, payment for, any Shares pending receipt of any regulatory approval
specified in Section 15, (ii) to terminate the Offer and not accept for payment
any Shares upon the occurrence of any of the conditions specified in Section 14
and (iii) to waive any condition (other than the Minimum Condition) or otherwise
amend the Offer in any respect, by giving oral or written notice of such delay,
termination, waiver or amendment to the Depositary and by making a public
announcement thereof. The Merger Agreement provides that, without the consent of
the Company, Purchaser will not (i) decrease the price per Share payable
pursuant to the Offer, (ii) reduce the maximum number of Shares to be purchased
in the Offer, (iii) impose conditions to the Offer in addition to those set
forth in Section 14, (iv) amend or change the terms and conditions of the Offer
in any manner materially adverse to the holders of Shares or (v) change or waive
the Minimum Condition. Purchaser acknowledges that (i) Rule 14e-1(c) under the
Securities Exchange Act of 1934, as
3
<PAGE>
amended (the "Exchange Act"), requires Purchaser to pay the consideration
offered or return the Shares tendered promptly after the termination or
withdrawal of the Offer and (ii) Purchaser may not delay acceptance for payment
of, or payment for (except as provided in clause (i) of the first sentence of
this paragraph), any Shares upon the occurrence of any of the conditions
specified in Section 14 without extending the period of time during which the
Offer is open.
Any such extension, delay, termination, waiver or amendment will be followed
as promptly as practicable by public announcement thereof, such announcement in
the case of an extension to be made no later than 9:00 a.m., New York City time,
on the next business day after the previously scheduled Expiration Date. Subject
to applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act,
which require that material changes be promptly disseminated to stockholders in
a manner reasonably designed to inform them of such changes) and without
limiting the manner in which Purchaser may choose to make any public
announcement, Purchaser shall have no obligation to publish, advertise or
otherwise communicate any such public announcement other than by issuing a press
release to the Dow Jones News Service.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, Purchaser will extend the Offer to the extent required by Rules l4d-4(c)
and l4d-6(d) under the Exchange Act.
Subject to the terms of the Merger Agreement, if, prior to the Expiration
Date, Purchaser should decide to increase the consideration being offered in the
Offer, such increase in the consideration being offered will be applicable to
all stockholders whose Shares are accepted for payment pursuant to the Offer
and, if, at the time notice of any such increase in the consideration being
offered is first published, sent or given to holders of such Shares, the Offer
is scheduled to expire at any time earlier than the period ending on the tenth
business day from and including the date that such notice is first so published,
sent or given, the Offer will be extended at least until the expiration of such
ten-business-day period. For purposes of the Offer, a "business day" means any
day other than a Saturday, Sunday or federal holiday and consists of the time
period from 12:01 a.m. through 12:00 midnight, New York City time.
The Company has provided Purchaser with the Company's stockholder list and
security position listings for the purpose of disseminating the Offer to holders
of Shares. This Offer to Purchase and the related Letter of Transmittal will be
mailed to record holders of Shares whose names appear on the Company's
stockholder list and will be furnished, for subsequent transmittal to beneficial
owners of Shares, to brokers, dealers, commercial banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on the
stockholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing.
2. Acceptance for Payment and Payment for Shares. Upon the terms and subject
to the conditions of the Offer (including, if the Offer is extended or amended,
the terms and conditions of any such extension or amendment), Purchaser will
accept for payment, and will pay for, all Shares validly tendered prior to the
Expiration Date and not withdrawn promptly after the later to occur of (i) the
Expiration Date, (ii) the expiration or termination of any applicable waiting
periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), and (iii) the satisfaction or waiver of the conditions
to the Offer set forth in Section 14. Subject to applicable rules of the
Commission, Purchaser expressly reserves the right to delay acceptance for
payment of, or payment for, Shares pending receipt of any regulatory approvals
specified in Section 15 or in order to comply in whole or in part with any other
applicable law.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i) the
certificates evidencing such Shares (the "Share Certificates") or timely
confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such
Shares into the Depositary's account at The Depository Trust Company, the
4
<PAGE>
Midwest Securities Trust Company or the Philadelphia Depository Trust Company
(each, a "Book-Entry Transfer Facility" and, collectively, the "Book-Entry
Transfer Facilities") pursuant to the procedures set forth in Section 3, (ii)
the Letter of Transmittal (or a facsimile thereof), properly completed and duly
executed, with any required signature guarantees, or an Agent's Message (as
defined below) in connection with a book-entry transfer and (iii) any other
documents required under the Letter of Transmittal.
The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against such participant.
On the date of this Offer to Purchase, Parent anticipates filing with the
Federal Trade Commission (the "FTC") and the Antitrust Division of the
Department of Justice (the "Antitrust Division") a Premerger Notification and
Report Form under the HSR Act in connection with the purchase of Shares pursuant
to the Offer. Accordingly, it is anticipated that the waiting period under the
HSR Act applicable to the Offer will expire at 11:59 p.m., New York City time,
on Thursday, February 16, 1995. Prior to the expiration or termination of such
waiting period, the FTC or the Antitrust Division may extend such waiting period
by requesting additional information or documentary material from Parent. If
such a request is made with respect to the purchase of Shares in the Offer, the
waiting period will expire at 11:59 p.m., New York City time, on the tenth
calendar day after substantial compliance by Parent with such a request.
Thereafter, the waiting period may only be extended by court order. The waiting
period under the HSR Act may be terminated prior to its expiration by the FTC
and the Antitrust Division. Parent will request early termination of the waiting
period, although there can be no assurance that this request will be granted.
Pursuant to the Merger Agreement, Purchaser may, but need not, extend the Offer
until the applicable waiting period under the HSR Act shall have expired or been
terminated. See Section 15 for additional information regarding the HSR Act.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not withdrawn as, if
and when Purchaser gives oral or written notice to the Depositary of Purchaser's
acceptance for payment of such Shares pursuant to the Offer. Upon the terms and
subject to the conditions of the Offer, payment for Shares accepted for payment
pursuant to the Offer will be made by deposit of the purchase price therefor
with the Depositary, which will act as agent for tendering stockholders for the
purpose of receiving payments from Purchaser and transmitting such payments to
tendering stockholders whose Shares have been accepted for payment. Under no
circumstances will interest on the purchase price for Shares be paid, regardless
of any delay in making such payment.
If any tendered Shares are not accepted for payment for any reason pursuant
to the terms and conditions of the Offer, or if Share Certificates are submitted
evidencing more Shares than are tendered, Share Certificates evidencing
unpurchased Shares will be returned, without expense to the tendering
stockholder (or, in the case of Shares tendered by book-entry transfer into the
Depositary's account at a Book-Entry Transfer Facility pursuant to the procedure
set forth in Section 3, such Shares will be credited to an account maintained at
such Book-Entry Transfer Facility), as promptly as practicable following the
expiration or termination of the Offer.
Purchaser reserves the right to transfer or assign, in whole at any time or
in part from time to time, to one or more of its affiliates, the right to
purchase all or any portion of the Shares tendered pursuant to the Offer, but
any such transfer or assignment will not relieve Purchaser of its
5
<PAGE>
obligations under the Offer and will in no way prejudice the rights of tendering
stockholders to receive payment for Shares validly tendered and accepted for
payment pursuant to the Offer.
3. Procedures for Tendering Shares. In order for a holder of Shares validly
to tender Shares pursuant to the Offer, the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, together with any
required signature guarantees, or an Agent's Message in connection with a
book-entry delivery of Shares, and any other documents required by the Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase and either (i) the Share
Certificates evidencing tendered Shares must be received by the Depositary at
such address or such Shares must be tendered pursuant to the procedure for
book-entry transfer described below and a Book-Entry Confirmation must be
received by the Depositary, in each case prior to the Expiration Date, or (ii)
the tendering stockholder must comply with the guaranteed delivery procedures
described below.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT
THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Book-Entry Transfer. The Depositary will establish accounts with respect to
the Shares at the Book-Entry Transfer Facilities for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in the system of any Book-Entry Transfer
Facility may make a book-entry delivery of Shares by causing such Book-Entry
Transfer Facility to transfer such Shares into the Depositary's account at such
Book-Entry Transfer Facility in accordance with such Book-Entry Transfer
Facility's procedures for such transfer. However, although delivery of Shares
may be effected through book-entry transfer at a Book-Entry Transfer Facility,
the Letter of Transmittal (or a facsimile thereof), properly completed and duly
executed, together with any required signature guarantees, or an Agent's Message
in connection with a book-entry transfer, and any other required documents,
must, in any case, be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase prior to the Expiration Date,
or the tendering stockholder must comply with the guaranteed delivery procedure
described below. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES
NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Signature Guarantees. Signatures on all Letters of Transmittal must be
guaranteed by a firm which is a member of the Medallion Signature Guarantee
Program, or by any other "eligible guarantor institution," as such term is
defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended
(each of the foregoing being referred to as an "Eligible Institution"), except
in cases where Shares are tendered (i) by a registered holder of Shares who has
not completed either the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" on the Letter of Transmittal or (ii)
for the account of an Eligible Institution. If a Share Certificate is registered
in the name of a person other than the person who or which signs the Letter of
Transmittal, or if payment is to be made, or a Share Certificate not accepted
for payment or not tendered is to be returned to a person other than the
registered holder(s), then the Share Certificate must be endorsed or accompanied
by appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear on the Share Certificate, with the signature(s) on
such Share Certificate or stock powers guaranteed by an Eligible Institution.
See Instructions 1 and 5 of the Letter of Transmittal.
6
<PAGE>
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates evidencing such Shares are
not immediately available or such stockholder cannot deliver the Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date, or such stockholder cannot complete the procedure for delivery
by book-entry transfer on a timely basis, such Shares may nevertheless be
tendered, provided that all the following conditions are satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by Purchaser, is received
prior to the Expiration Date by the Depositary as provided below; and
(iii) the Share Certificates (or a Book-Entry Confirmation) evidencing
all tendered Shares, in proper form for transfer, in each case together with
the Letter of Transmittal (or a facsimile thereof), properly completed and
duly executed, with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message), and any other documents required
by the Letter of Transmittal are received by the Depositary within five New
York Stock Exchange, Inc. ("NYSE") trading days after the date of execution
of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by telegram, telex or facsimile transmission to the Depositary and
must include a guarantee by an Eligible Institution in the form set forth in the
form of Notice of Guaranteed Delivery made available by Purchaser.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of the
Share Certificates evidencing such Shares, or a Book-Entry Confirmation of the
delivery of such Shares, and the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees
(or, in the case of a book-entry transfer, an Agent's Message), and any other
documents required by the Letter of Transmittal.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by Purchaser in its sole discretion, which
determination shall be final and binding on all parties. Purchaser reserves the
absolute right to reject any and all tenders determined by it not to be in
proper form or the acceptance for payment of which may, in the opinion of its
counsel, be unlawful. Purchaser also reserves the absolute right to waive any
condition of the Offer (other than the Minimum Condition) or any defect or
irregularity, in the tender of any Shares of any particular stockholder, whether
or not similar defects or irregularities are waived in the case of other
stockholders. No tender of Shares will be deemed to have been validly made until
all defects and irregularities have been cured or waived. None of Purchaser,
Parent, the Dealer Manager, the Depositary, the Information Agent or any other
person will be under any duty to give notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification. Purchaser's interpretation of the terms and conditions of the
Offer (including the Letter of Transmittal and the instructions thereto) will be
final and binding.
Other Requirements. By executing the Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of Purchaser as
such stockholder's proxies, each with full power of substitution, in the manner
set forth in the Letter of Transmittal, to the full extent of such stockholder's
rights with respect to the Shares tendered by such stockholder and accepted for
payment by Purchaser (and with respect to any and all other Shares or other
securities issued or issuable in respect of such Shares on or after January 25,
1995). All such proxies shall be considered coupled with an interest in the
tendered Shares. Such appointment will be effective
7
<PAGE>
when, and only to the extent that, Purchaser accepts such Shares for payment.
Upon such acceptance for payment, all prior proxies given by such stockholder
with respect to such Shares (and such other Shares and securities) will be
revoked without further action, and no subsequent proxies may be given nor any
subsequent written consent executed by such stockholder (and, if given or
executed, will not be deemed to be effective) with respect thereto. The
designees of Purchaser will, with respect to the Shares for which the
appointment is effective, be empowered to exercise all voting and other rights
of such stockholder as they in their sole discretion may deem proper at any
annual or special meeting of the Company's stockholders or any adjournment or
postponement thereof, by written consent in lieu of any such meeting or
otherwise. Purchaser reserves the right to require that, in order for Shares to
be deemed validly tendered, immediately upon Purchaser's payment for such
Shares, Purchaser must be able to exercise full voting rights with respect to
such Shares (and such other Shares and securities).
The acceptance for payment by Purchaser of Shares pursuant to any of the
procedures described above will constitute a binding agreement between the
tendering stockholder and Purchaser upon the terms and subject to the conditions
of the Offer.
UNDER THE FEDERAL INCOME TAX LAWS, THE DEPOSITARY WILL BE REQUIRED TO
WITHHOLD 31 PERCENT OF THE AMOUNT OF ANY PAYMENTS MADE TO CERTAIN STOCKHOLDERS
PURSUANT TO THE OFFER. TO PREVENT SUCH BACKUP FEDERAL INCOME TAX WITHHOLDING
WITH RESPECT TO PAYMENT TO CERTAIN STOCKHOLDERS OF THE PURCHASE PRICE OF SHARES
PURCHASED PURSUANT TO THE OFFER, EACH SUCH STOCKHOLDER MUST PROVIDE THE
DEPOSITARY WITH SUCH STOCKHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER AND
CERTIFY THAT SUCH STOCKHOLDER IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX
WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9 IN THE LETTER OF TRANSMITTAL.
SEE INSTRUCTION 10 OF THE LETTER OF TRANSMITTAL.
4. Withdrawal Rights. Tenders of Shares made pursuant to the Offer are
irrevocable except that such Shares may be withdrawn by the tendering
stockholder at any time prior to the Expiration Date and, unless theretofore
accepted for payment by Purchaser pursuant to the Offer, may also be withdrawn
by such stockholder at any time after April 2, 1995. If Purchaser extends the
Offer, is delayed in its acceptance for payment of Shares or is unable to accept
Shares for payment pursuant to the Offer for any reason, then, without prejudice
to Purchaser's rights under the Offer, the Depositary may, nevertheless, on
behalf of Purchaser, retain tendered Shares, and such Shares may not be
withdrawn except to the extent that tendering stockholders are entitled to
withdrawal rights as described in this Section 4. Any such delay will be by an
extension of the Offer to the extent required by law.
For a withdrawal to be effective, a written, telegraphic, telex or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover page of this Offer to Purchase.
Any such notice of withdrawal must specify the name of the person who tendered
the Shares to be withdrawn, the number of Shares to be withdrawn and the name of
the registered holder of such Shares, if different from that of the person who
tendered such Shares. If Share Certificates evidencing Shares to be withdrawn
have been delivered or otherwise identified to the Depositary, then, prior to
the physical release of such Share Certificates, the serial numbers shown on
such Share Certificates must be submitted to the Depositary and the signature(s)
on the notice of withdrawal must be guaranteed by an Eligible Institution,
unless such Shares have been tendered for the account of an Eligible
Institution. If Shares have been tendered pursuant to the procedure for
book-entry transfer as set forth in Section 3, any notice of withdrawal must
specify the name and number of the account at the Book-Entry Transfer Facility
to be credited with the withdrawn Shares, in which case a notice of withdrawal
will be effective if delivered to the Depositary by any method of delivery
described in the first sentence of this paragraph.
8
<PAGE>
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by Purchaser, in its sole discretion,
whose determination will be final and binding. None of Purchaser, Parent, the
Dealer Managers, the Depositary, the Information Agent or any other person will
be under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification.
Any Shares properly withdrawn will thereafter be deemed not to have been
validly tendered for purposes of the Offer. However, withdrawn Shares may be
re-tendered at any time prior to the Expiration Date by following one of the
procedures described in Section 3.
5. Certain Federal Income Tax Consequences. The receipt of cash for Shares
pursuant to the Offer or in the Merger will be a taxable transaction for federal
income tax purposes and may also be a taxable transaction under applicable
state, local or foreign tax laws. In general, a stockholder will recognize gain
or loss for federal income tax purposes equal to the difference between the
amount of cash received in exchange for the Shares sold and such stockholder's
adjusted tax basis in such Shares. For federal income tax purposes, such gain or
loss will be capital gain or loss if the Shares are capital assets in the hands
of such stockholder, and will be long-term capital gain or loss if such Shares
have been held for more than one year. A stockholder's ability to deduct capital
losses may be limited.
THE FOREGOING DISCUSSION MAY NOT BE APPLICABLE TO CERTAIN TYPES OF
STOCKHOLDERS, INCLUDING FINANCIAL INSTITUTIONS, BROKER-DEALERS, STOCKHOLDERS WHO
ACQUIRED SHARES PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE
AS COMPENSATION, INDIVIDUALS WHO ARE NOT CITIZENS OR RESIDENTS OF THE UNITED
STATES AND FOREIGN CORPORATIONS.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND IS BASED UPON PRESENT LAW. STOCKHOLDERS ARE URGED TO
CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF THE
OFFER AND THE MERGER TO THEM, INCLUDING THE APPLICABILITY AND EFFECT OF ANY
STATE, LOCAL AND FOREIGN TAX LAWS.
6. Price Range of Shares; Dividends. The Shares are listed and principally
traded on the NYSE. The following table sets forth, for the quarters indicated,
the high and low sales prices per Share on the NYSE as reported by the Dow Jones
News Service.
HIGH LOW
---- ----
1993:
First Quarter........................................ $17 5/8 $14 3/4
Second Quarter....................................... 18 1/4 14 1/4
Third Quarter........................................ 21 3/8 16 3/4
Fourth Quarter....................................... 25 20
1994:
First Quarter........................................ $28 5/8 $21 1/4
Second Quarter....................................... 26 1/2 20 1/2
Third Quarter........................................ 24 3/4 21
Fourth Quarter....................................... 27 1/4 22
1995:
First Quarter (through (1/31/95)..................... $32 5/8 $24 3/4
The Company historically has not declared dividends.
On January 20, 1995, the last full trading day prior to the issuance of a
press release by Parent which indicated that Parent and the Company were engaged
in detailed discussions regarding a possible business combination of Parent and
the Company, the closing price per Share as reported
9
<PAGE>
on the NYSE was $29.75. On January 25, 1995, the last full trading day prior to
the announcement of the execution of the Merger Agreement and of Purchaser's
intention to commence the Offer, the closing price per Share as reported on the
NYSE was $30.50. On January 31, 1995, the last full trading day prior to the
commencement of the Offer, the closing price per Share as reported on the NYSE
was $32 5/8.
STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
7. Certain Information Concerning the Company. Except as otherwise set forth
herein, the information concerning the Company contained in this Offer to
Purchase, including financial information, has been furnished by the Company or
has been taken from or based upon publicly available documents and records on
file with the Commission and other public sources. Neither Purchaser, Parent nor
the Dealer Managers assumes any responsibility for the accuracy or completeness
of the information concerning the Company furnished by the Company or contained
in such documents and records or for any failure by the Company to disclose
events which may have occurred or may affect the significance or accuracy of any
such information but which are unknown to Purchaser or Parent.
General. The Company is a Delaware corporation with its principal executive
offices located at 8144 Walnut Hill Lane, Dallas, Texas 75231-4372. The Company,
a holding company, manufactures, markets, sells and distributes soft drink
concentrates, extracts (the basic flavoring ingredients for soft drinks) and
fountain syrups (concentrates or extracts with sweeteners and water added) to
licensed bottlers primarily in the United States. The Company's principal
products are two well known soft drink brands, "Dr Pepper" and "7Up". The
Company is the third largest soft drink concentrate manufacturer in the United
States.
Financial Information. Set forth below is certain selected consolidated
financial information relating to the Company and its subsidiaries which has
been excerpted or derived from the audited financial statements contained in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1993
(the "Form 10-K") and the unaudited financial statements contained in the
Company's Quarterly Reports on Form 10-Q for the quarters ended September 30,
1994 and September 30, 1993 (the "Forms 10-Q"). More comprehensive financial
information is included in the Form 10-K, the Forms 10-Q and other documents
filed by the Company with the Commission. The financial information that follows
is qualified in its entirety by reference to such reports and other documents,
including the financial statements and related notes contained therein. Such
reports and other documents may be examined and copies may be obtained from the
offices of the Commission in the manner set forth below.
10
<PAGE>
DR PEPPER/SEVEN-UP COMPANIES, INC.
AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
9 MONTHS ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
-------------------- ---------------------
1994 1993 1993 1992
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net Sales................................... $585,058 $540,226 $707,378 $ 658,718
Operating Profit............................ 155,799 144,584 183,020 160,586
Income (Loss) Before Income Taxes,
Extraordinary Item and Cumulative Effect
of Accounting Change...................... 99,559 78,204 96,211 (8,596)
Extraordinary Item(1)....................... (9,341) (15,980) (16,199) (56,934)
Cumulative Effect of Accounting Change(2)... -- -- -- (74,800)
Net Income (Loss)........................... 54,145 56,597 77,925 (140,148)
Preferred Stock Dividend Requirements....... -- -- -- (12,941)
Net Income (Loss) Attributable to
Outstanding Common Stock.................. 54,145 56,597 77,925 (153,089)
Weighted Average Shares and Equivalent
Shares Outstanding............................ 66,949 63,691 64,621 35,533
Income (Loss) Per Share Before Extraordinary
Item and Cumulative Effect of Accounting
Change Per Share.............................. 0.92 1.14 1.46 (0.60)
Extraordinary Item Per Share(1)............. (0.14) (0.25) (0.25) (1.60)
Cumulative Effect of Accounting Change Per
Share(2)...................................... -- -- -- (2.11)
Net Income (Loss) Per Share................. 0.78 0.89 1.21 (4.31)
</TABLE>
- ------------
(1) The extraordinary item relates to early extinguishments of debt net of
applicable taxes.
(2) The cumulative effect of accounting change results from the Company's
adoption of Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes", which was adopted in the fourth quarter of 1992 and
applied retroactively to January 1, 1992.
<TABLE>
<CAPTION>
AT SEPTEMBER 30, AT DECEMBER 31,
------------------------ ------------------------
1994 1993 1993 1992
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Current Assets......................... $ 143,289 $ 106,733 $ 127,460 $ 87,840
Total Assets........................... 620,007 660,477 680,023 668,096
Current Liabilities.................... 183,190 145,873 194,626 190,063
Working Capital (Deficit).............. (39,901) (39,140) (67,166) (102,223)
Long-Term Debt, Less Current Portion... 739,243 862,426 790,540 1,091,956
Stockholders' Deficit.................. (357,616) (446,163) (420,104) (807,413)
</TABLE>
In connection with Parent's review of the Company and in the course of the
negotiations between the Company and Parent described in Section 10, the Company
provided Parent with certain business and financial information which Parent and
Purchaser believe is not publicly available, including the following information
summarized below.
11
<PAGE>
The Company provided the Parent and Purchaser with the preliminary unaudited
financial results for the fourth quarter of 1994 as well as for the full year
1994. These estimates, which have not been finalized and are subject to normal
year end audit adjustments, are as follows:
DR PEPPER/SEVEN-UP COMPANIES, INC. AND SUBSIDIARIES
PRELIMINARY UNAUDITED FINANCIAL RESULTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
QUARTER ENDED YEAR ENDED
DECEMBER 31, 1994 DECEMBER 31, 1994
----------------- -----------------
<S> <C> <C>
Net Sales..................................... $ 183,957 $ 769,015
Gross Profit.................................. 155,062 641,365
Operating Profit.............................. 47,767 203,566
Income Before Taxes and Extraordinary Item.... 22,731 122,290
Extraordinary Item............................ (1,839) (11,180)
Net Income.................................... 12,374 66,519
Income Before Extraordinary Item Per Share.... 0.21 1.13
Extraordinary Item Per Share.................. (0.03) (0.17)
Net Income Per Share.......................... 0.18 0.96
Weighted Average Shares Outstanding........... 67,149 67,005
</TABLE>
The Company expects to release final audited results for the quarter and
year ended December 31, 1994 on or about February 9, 1995.
The Company also orally provided to Parent and Purchaser preliminary
projections for 1995. The Company has projected that in 1995 (i) net sales will
increase by 7%; (ii) gross profit margin will be maintained at 83.5%; (iii)
marketing and selling expenses as a percentage of net sales will be consistent
with historical levels; (iv) general and administrative costs will increase by
5%; and (v) operating profit will increase by 8%.
PROJECTED INFORMATION OF THIS TYPE IS BASED ON ESTIMATES AND ASSUMPTIONS
THAT ARE INHERENTLY SUBJECT TO SIGNIFICANT ECONOMIC AND COMPETITIVE
UNCERTAINTIES AND CONTINGENCIES, ALL OF WHICH ARE DIFFICULT TO PREDICT AND MANY
OF WHICH ARE BEYOND THE COMPANY'S CONTROL. ACCORDINGLY, THERE CAN BE NO
ASSURANCE THAT THE PROJECTED RESULTS WILL BE REALIZED OR THAT ACTUAL RESULTS
WILL NOT BE SIGNIFICANTLY HIGHER OR LOWER THAN THOSE SET FORTH ABOVE. IN
ADDITION, THESE PROJECTIONS WERE NOT PREPARED WITH A VIEW TO PUBLIC DISCLOSURE
OR COMPLIANCE WITH THE PUBLISHED GUIDELINES OF THE COMMISSION OR THE GUIDELINES
ESTABLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS REGARDING
PROJECTIONS AND FORECASTS AND ARE INCLUDED IN THIS OFFER TO PURCHASE ONLY
BECAUSE SUCH INFORMATION WAS MADE AVAILABLE TO PARENT BY THE COMPANY. NONE OF
PARENT, PURCHASER, THE COMPANY OR ANY OTHER ENTITY OR PERSON ASSUMES ANY
RESPONSIBILITY FOR THE ACCURACY OR VALIDITY OF THE FOREGOING PROJECTIONS.
Since January 26, 1993, the Shares have been registered under the Exchange
Act. Accordingly, the Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is required to
file periodic reports, proxy statements and other information with the
Commission relating to its business, financial condition and other matters.
Information as to particular dates concerning the Company's directors and
officers, their remuneration, stock options granted to them, the principal
holders of the Company's securities and any material interest of such persons in
transactions with the Company is required to be disclosed in proxy statements
distributed to the Company's stockholders and filed with the Commission. Such
reports, proxy statements and other information should be available for
inspection at the public reference
12
<PAGE>
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and also should be available for inspection at the
Commission's regional offices located at Seven World Trade Center, 13th Floor,
New York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such materials may also be obtained by
mail, upon payment of the Commission's customary fees, by writing to its
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The
information should also be available for inspection at the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
8. Certain Information Concerning Purchaser and Parent. Purchaser is a newly
incorporated Delaware corporation organized in connection with the Offer and the
Merger and has not carried on any activities other than in connection with the
Offer and the Merger. The principal offices of Purchaser are located at c/o
Cadbury Beverages Inc., 6 High Ridge Park, Stamford, Connecticut 06905-0800.
Purchaser is an indirect wholly owned subsidiary of Parent.
Until immediately prior to the time that Purchaser will purchase Shares
pursuant to the Offer, it is not anticipated that Purchaser will have any
significant assets or liabilities or engage in activities other than those
incident to its formation and capitalization and the transactions contemplated
by the Offer and the Merger. Because Purchaser is newly formed and has minimal
assets and capitalization, no meaningful financial information regarding
Purchaser is available.
Purchaser is a wholly owned subsidiary of Cadbury Beverages Inc. ("Cadbury
Inc."). Cadbury Inc. has its principal office at 6 High Ridge Park, Stamford,
Connecticut 06905-0800. Cadbury Inc.'s principal business is the manufacturing,
marketing and sale of soft drink concentrate and syrups to bottling and canning
operations owned by third parties.
Cadbury Inc. is a wholly owned subsidiary of A&W Concentrate Company, a
Delaware corporation ("A&W Concentrate"). A&W Concentrate is a wholly owned
subsidiary of A&W Brands Inc., a Delaware corporation ("A&W Brands"). A&W Brands
is a wholly owned subsidiary of CBI Holdings Inc., a Delaware corporation ("CBI
Holdings").
CBI Holdings is a wholly owned subsidiary of Cadbury Schweppes Holdings,
Inc., a Delaware corporation ("Cadbury Schweppes Holdings, Inc."). Cadbury
Schweppes Holdings, Inc. is a holding company with its registered office at The
Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801.
Cadbury Schweppes Holdings, Inc. is a wholly owned subsidiary of Cadbury
Schweppes Investments BV, a corporation organized under the laws of the
Netherlands ("Cadbury Schweppes Investments BV"). Cadbury Schweppes Investments
BV is a holding company with its registered office at Tower B, 17th Floor, World
Trade Center, Strawinskylaan 1725, 1077XX Amsterdam, Netherlands.
Cadbury Schweppes Investments BV is a wholly owned subsidiary of Cadbury
Schweppes Investments (Netherlands Antilles) NV, a corporation organized under
the laws of the Netherlands Antilles ("Cadbury Schweppes Investments
(Netherlands Antilles) NV"). Cadbury Schweppes Investments (Netherlands
Antilles) NV is a holding company with its registered office at De Ruyterbade
62, P.O. Box 812, Curacao, Netherlands Antilles.
Cadbury Schweppes Investments (Netherlands Antilles) NV is a wholly owned
subsidiary of Cadbury Schweppes Investments (Jersey) Limited, a corporation
organized under the laws of Jersey ("Cadbury Schweppes Investments (Jersey)
Limited"). Cadbury Schweppes Investments (Jersey) Limited is a holding company
with its registered office at Philip Malzard House, 15 Union Street, St. Helier,
Jersey, Channel Islands.
13
<PAGE>
Cadbury Schweppes Investments (Jersey) Limited is a wholly owned subsidiary
of Cadbury Schweppes Overseas Limited, a company organized under the laws of
England ("Cadbury Schweppes Overseas Limited"). Cadbury Schweppes Overseas
Limited is a holding company with its registered office at 25 Berkeley Square,
London W1X 6HT, England.
Cadbury Schweppes Overseas Limited is a wholly owned subsidiary of Parent.
Parent is a company organized under the laws of England. Its principal offices
are located at 25 Berkeley Square, London W1X 6HT, England.
Parent, together with its subsidiaries, comprises an international group of
companies principally engaged in the manufacturing, marketing and distribution
of internationally branded confectionery and beverage products sold through
wholesale and retail outlets of the confectionery, licensed, catering and
grocery trades. Parent is the holding company of the group, with direct and
indirect share and loan interests in subsidiaries and associated companies.
Parent was formed through a merger of Cadbury Group Limited and Schweppes,
Limited in 1969. Cadbury Group Limited, originally a family enterprise which
produced cocoa and drinking chocolate, was established in 1831. The Schweppes
business was established by Jacob Schweppe in the late eighteenth century and it
was incorporated with the name Schweppes, Limited in 1897.
The name, citizenship, business address, principal occupation or employment,
and five-year employment history for each of the directors and executive
officers of Purchaser and Parent and certain other information are set forth in
Schedule I hereto.
The principal listing of the Cadbury Schweppes Ordinary Shares of 25p each
("Ordinary Shares") is on The International Stock Exchange of the United Kingdom
and the Republic of Ireland Limited (the "London Stock Exchange") in London.
American Depositary Shares ("ADSs"), for which Morgan Guaranty Trust Company of
New York is the depositary, have been traded on the over-the-counter market in
the United States since September 1984 and are quoted on the Nasdaq Stock Market
under the symbol CADBY. In February 1989, a listing of the Ordinary Shares was
also obtained on the Australian Stock Exchange and are quoted on such Exchange
under the symbol CBS.
From September 1984 through September 2, 1991, ADSs representing Ordinary
Shares were issued on the basis of one ADS being equal to ten Ordinary Shares.
With effect from September 3, 1991, each ADS has represented four Ordinary
Shares. Holders of record on August 23, 1991 were sent a new American Depositary
Receipt evidencing the holding of an additional 1.5 new ADSs for each ADS then
held.
Set forth below are certain selected consolidated financial data relating to
Parent and its subsidiaries at January 1, 1994, January 2, 1993 and December 28,
1991, which have been excerpted or derived from the audited financial statements
of Parent for the fiscal year ended January 1, 1994, January 2, 1993 and
December 28, 1991 contained in the Forms 20-F of Parent filed with the
Commission pursuant to Section 13 of the Exchange Act. The interim unaudited
financial information for the 24-week period ended June 18, 1994 and the 24-week
period ended June 19, 1993 was included in a press release issued by Parent on
September 8, 1994 which is included as an exhibit to Form 6-K filed by Parent
with the Commission pursuant to Section 13 of the Exchange Act for the month of
September 1994. The following summary is qualified in its entirety by reference
to these reports and all the financial statements and the related notes therein.
The financial statements of Parent have been prepared in accordance with
generally accepted accounting principles applicable in the United Kingdom ("UK
GAAP"), which practices are described in the notes to such statements. UK GAAP
differs in certain significant respects from generally accepted accounting
principles applicable in the United States ("US GAAP"). A summary of the
principal differences between US GAAP and UK GAAP and the necessary adjustments
to reconcile UK GAAP net income and shareholders' equity to US GAAP net income
and shareholders' equity is set forth below.
14
<PAGE>
CADBURY SCHWEPPES PLC AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED 24 WEEKS ENDED
------------------------------------------------ ------------------------------
JANUARY 1, JANUARY 1, JANUARY 2, DECEMBER 28, JUNE 18, JUNE 18, JUNE 19,
1994 1994 1993 1991 1994 1994 1993
---------- ---------- ---------- ------------ ---------- -------- --------
U.S. U.S.
DOLLARS(1) POUNDS STERLING DOLLARS(1) POUNDS STERLING
---------- ------------------------------------ ---------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales............... $5,512.7 B.P.3,724.8 B.P.3,372.4 B.P.3,232.3 $ 2,705.2 B.P.1,768.1 B.P.1,709.0
Operating income........ 645.3 436.0 370.7 360.2 327.3 213.9 171.1
Income before taxes and
minority interests........ 616.1 416.3 332.7 314.7 313.3 204.8 166.2
Net income for Ordinary
Shareholders.............. 350.5 236.8 195.6 192.7 170.9 111.7 92.1
Weighted average number
of Ordinary Shares:
Primary............... 774.0 774.0 729.6 700.4 832.1 832.1 743.0
Fully diluted......... 803.8 803.8 760.6 731.6 863.5 863.5 771.1
Earnings per Ordinary
Share:
Primary:
Net income.......... 0.45 30.59p 26.41p(2) 27.10p(2) 0.21 13.42p 12.21p(2)
Fully diluted:
Net income.......... 0.45 30.16p 26.21p(2) 26.87p(2) 0.20 13.12p 12.00p(2)
</TABLE>
<TABLE>
<CAPTION>
AT
-----------------------------------------------------------------------
JANUARY 1, JANUARY 1, JANUARY 2, JUNE 18, JUNE 18, JUNE 19,
1994 1994 1993 1994 1994 1993
---------- ---------- ---------- ---------- -------- --------
U.S. U.S.
DOLLARS(1) POUNDS STERLING DOLLARS(1) POUNDS STERLING
---------- ----------------------- ---------- -------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Current assets.................. $1,769.0 B.P.1,195.3 B.P.1,255.4 $ 1,979.2 B.P.1,293.6 B.P.1,245.0
Total assets.................... 4,835.0 3,266.9 2,963.1 5,108.4 3,338.8 2,921.7
Current liabilities............. 1,862.1 1,258.2 1,184.3 1,914.2 1,251.1 1,127.5
Working capital (deficit)....... (93.1) (62.9) 71.1 65.0 42.5 117.5
Total indebtedness.............. 899.4 607.7 711.4 1,160.0 758.2 701.3
Shareholders' equity............ 2,019.5 1,364.5 1,084.1 2,149.3 1,404.8 1,124.0
</TABLE>
- ------------
(1) Pounds Sterling ("B.P.") is translated into U.S. Dollars solely for the
convenience of the reader at the noon buying rate in New York City on the
date specified for cable transfers in Pounds Sterling as certified for
customs purposes by the Federal Reserve Bank of New York (the "Noon Buying
Rate"). The Noon Buying Rate in effect on June 18, 1994 was B.P.1.00 =
$1.53, and the Noon Buying Rate in effect on January 1, 1994 was B.P.1.00 =
$1.48.
(2) Re-stated following rights issue in 1993.
15
<PAGE>
PRINCIPAL DIFFERENCES BETWEEN UNITED KINGDOM AND UNITED STATES GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES
The financial information provided above was prepared in accordance with UK
GAAP, which differs in certain significant respects from US GAAP. These
differences relate principally to the following items and the necessary
adjustments are shown in the tables set out below.
Goodwill.
Under UK GAAP, Parent writes off acquisition goodwill against retained
earnings in its consolidated balance sheet in the year of acquisition. Through
December 31, 1994, goodwill included costs of reorganization and restructuring
both the acquired entity's business and the acquiror's business. Beginning in
fiscal year 1995, due to a change in UK financial reporting requirements,
goodwill may not include such costs as they must be expensed as incurred.
Under US GAAP, goodwill is recognized on the balance sheet and amortized by
charges against income over its estimated useful life, not to exceed 40 years.
Goodwill includes costs of restructuring the acquired entity's business.
Trademarks.
Under UK GAAP, the cost of trademarks acquired may be capitalized and no
amortization or writedown is required unless there is a permanent diminution in
value below cost. Under US GAAP, the cost of trademarks is amortized over their
useful lives, not to exceed 40 years.
Interest capitalization.
Under UK GAAP, the capitalization of interest relating to fixed assets in
the course of construction is optional. Parent has only capitalized such
interest on significant capital projects beginning in 1993. Under US GAAP, such
interest is required to be capitalized and depreciated over the life of the
asset.
Deferred taxation.
Under UK GAAP, no provision is made for deferred taxation if there is
reasonable evidence that such deferred taxation will not be payable in the
foreseeable future. Under US GAAP, deferred taxation is provided in full on the
liability method in accordance with the provisions of Statement of Financial
Accounting Standards No. 109.
Revaluation of properties.
Under UK GAAP, properties may be restated on the basis of appraised values
in financial statements prepared in all other respects in accordance with the
historical cost convention. Such restatements are not generally permitted under
US GAAP, except in connection with purchase accounting, and accordingly,
adjustments to net income and shareholders' equity are required to eliminate the
above restatements.
Ordinary dividends.
Under UK GAAP, final ordinary dividends are provided in the financial
statements on the basis of the recommendation by the directors which requires
subsequent approval by the shareholders to become a legal obligation of Parent.
Under US GAAP, dividends are only provided when the legal obligation to pay
arises.
Discount of long-term liability.
Under UK GAAP, certain long-term liabilities are not required to be
discounted. Under US GAAP, such liabilities have been discounted.
16
<PAGE>
Pension costs.
Under UK GAAP, the costs of providing pension benefits may be calculated by
the use of any recognized actuarial method which is appropriate and whose
assumptions reflect the long-term nature of the assets and liabilities involved.
Under US GAAP, the costs of providing these benefits are calculated in
accordance with Statement of Financial Accounting Standards No. 87 which
requires the use of the projected unit credit method and a discount rate (the
rate of interest at which pension liabilities could be effectively settled)
which reflects current market rates.
CADBURY SCHWEPPES PLC AND SUBSIDIARIES
APPROXIMATE EFFECTS ON NET INCOME OF DIFFERENCES BETWEEN UNITED KINGDOM AND
UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
---------------------------------------------------
JANUARY 1, JANUARY 1, JANUARY 2, DECEMBER 28,
1994 1994 1993 1991
---------- ---------- ---------- ------------
U.S.
DOLLARS(1) POUNDS STERLING
---------- --------------------------------------
(IN MILLIONS, EXCEPT PER ADS AMOUNTS)
<S> <C> <C> <C> <C>
Net income per UK GAAP.............................. $350.5 B.P.236.8 B.P.195.6 B.P.192.7
US GAAP adjustments (net of tax):
Amortization of goodwill and trademarks........... (48.4) (32.7) (28.0) (25.2)
One-time charges(2)............................... (1.8) (1.2) (18.6) (7.7)
Interest capitalization........................... (2.7) (1.8) 1.3 2.1
Deferred taxation................................. (14.1) (9.5) (1.7) (1.3)
Amortization of revaluation surplus............... 2.5 1.7 0.7 2.5
Pension costs..................................... (17.0) (11.5) (12.7) 2.9
Other items....................................... (0.4) (0.3) (0.6) (0.2)
---------- ---------- ---------- ------------
Net income as adjusted for US GAAP.................. $268.6 B.P.181.5 B.P.136.0 B.P.165.8
---------- ---------- ---------- ------------
---------- ---------- ---------- ------------
Net income per UK GAAP.............................. $350.5 B.P.236.8 B.P.195.6 B.P.192.7
---------- ---------- ---------- ------------
---------- ---------- ---------- ------------
Net income per US GAAP.............................. $268.6 B.P.181.5 B.P.136.0 B.P.165.8
---------- ---------- ---------- ------------
---------- ---------- ---------- ------------
Earnings per ADS per US GAAP:
Primary........................................... $ 1.39 B.P.0.94 B.P.0.75 B.P.0.95
Fully diluted..................................... 1.38 0.93 0.75 0.94
</TABLE>
CUMULATIVE EFFECT ON SHAREHOLDERS' EQUITY OF DIFFERENCES BETWEEN
UNITED KINGDOM AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
<TABLE>
<CAPTION>
AT
------------------------------------------------------------
JANUARY 1, JANUARY 1, JANUARY 2, DECEMBER 28,
1994 1994 1993 1991
---------------- ---------- ---------- ------------
U.S. DOLLARS(1) POUNDS STERLING
---------------- ----------------------------------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Shareholders' equity per UK GAAP.......... $2,019.5 B.P.1,364.5 B.P.1,084.1 B.P.874.9
US GAAP adjustments:
Goodwill................................ 1,261.6 852.4 748.9 630.0
Interest capitalization................. 63.8 43.1 45.5 43.2
Deferred taxation....................... (131.3) (88.7) (79.5) (59.6)
Property revaluations................... (141.0) (95.3) (104.4) (99.9)
Dividends............................... 132.6 89.6 73.4 65.3
Pension costs........................... (36.6) (24.7) (13.2) (0.3)
Other items............................. 0.7 0.5 0.8 2.8
---------------- ---------- ---------- ------------
Shareholders' equity as adjusted for US
GAAP...................................... $3,169.3 B.P.2,141.4 B.P.1,755.6 B.P.1,456.4
---------------- ---------- ---------- ------------
---------------- ---------- ---------- ------------
</TABLE>
- ------------
(1) Pounds Sterling (B.P.) is translated into U.S. Dollars solely for the
convenience of the reader at the Noon Buying Rate on January 1, 1994 of
B.P.1.00 = $1.48.
(2) One-time charges represent other costs on acquisitions and the effects of
accounting policy changes.
17
<PAGE>
Parent, through its subsidiary, Cadbury Inc., owns 15,620,746 Shares,
representing approximately 25.3 percent of the 61,780,548 Shares outstanding at
January 20, 1995. Parent, as part of an internal reorganization, caused its
subsidiary CBI Holdings, Inc. (formerly named Cadbury Beverages Inc.) to
transfer these Shares to Cadbury Inc. on December 29, 1994. CBI Holdings Inc.
acquired 12,175,861 of such Shares by purchasing the same number of shares of
convertible nonvoting common stock of the Company on August 19, 1993 in a
privately negotiated transaction with The Prudential Insurance Company of
America ("Prudential"), and converting these nonvoting shares into Shares on
October 4, 1993.
Except as described in this Offer to Purchase, (i) none of Purchaser, Parent
nor, to the best knowledge of Purchaser and Parent, any of the persons listed in
Schedule I to this Offer to Purchase or any associate or majority-owned
subsidiary of Purchaser, Parent or any of the persons so listed beneficially
owns or has any right to acquire, directly or indirectly, any Shares and (ii)
neither Purchaser nor Parent nor, to the best knowledge of Purchaser and Parent,
any of the persons or entities referred to above nor any director, executive
officer or subsidiary of any of the foregoing has effected any transaction in
the Shares during the past 60 days.
Cadbury Inc. and The Seven-Up Company and Dr Pepper Company (as
predecessors-in-interest to Dr Pepper/Seven-Up Corporation ("DP/SU Corp."))
entered into an Extract Production Agreement dated as of April 24, 1992 (the
"Extract Agreement"). Pursuant to the Extract Agreement, Waco Manufacturing
Company ("Waco", a wholly owned subsidiary of the Company to which the Extract
Agreement was assigned and, together with DP/SU Corp., the "Material
Subsidiaries") manufactures for Cadbury Inc. on a fee basis certain soft drink
concentrates which are subsequently resold in the U.S. market. In December 1994,
Cadbury Inc. notified the Company and Waco, pursuant to the terms of the Extract
Agreement, that the Extract Agreement would terminate on December 31, 1996.
Cadbury Inc. and The Seven-Up Company (predecessor-in-interest to DP/SU
Corp.) entered into a Post-Mix Concentrate/Syrup Royalty Agreement effective
March 3, 1991 (the "Post-Mix Agreement"), pursuant to which the Dr Pepper Food
Service Division of the Company was appointed sales agent in the United States
for marketing, promoting and selling post-mix fountain concentrates and fountain
syrup to certain types of customers, in each case under certain trademarks owned
by or licensed to Cadbury Inc. Under the Post-Mix Agreement, Cadbury Inc.
receives royalties which are calculated as a percentage of net sales by specific
product. The term of the Post-Mix Agreement expires December 31, 2000.
Except as provided in the Merger Agreement and the Stockholders Agreement
and as otherwise described in this Offer to Purchase, none of Purchaser, Parent
nor, to the best knowledge of Purchaser and Parent, any of the persons listed in
Schedule I to this Offer to Purchase, has any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of the Company, including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or voting of
such securities, finder's fees, joint ventures, loan or option arrangements,
puts or calls, guaranties of loans, guaranties against loss, guarantees of
profits, division of profits or loss or the giving or withholding of proxies.
Except as set forth in this Offer to Purchase, since January 1, 1992, neither
Purchaser nor Parent nor, to the best knowledge of Purchaser and Parent, any of
the persons listed on Schedule I hereto, has had any business relationship or
transaction with the Company or any of its executive officers, directors or
affiliates that is required to be reported under the rules and regulations of
the Commission applicable to the Offer. Except as set forth in this Offer to
Purchase, since January 1, 1992, there have been no contacts, negotiations or
transactions between any of Purchaser, Parent, or any of their respective
subsidiaries or, to the best knowledge of Purchaser and Parent, any of the
persons listed in Schedule I to this Offer to Purchase, on the one hand, and the
Company or its affiliates, on the other hand, concerning a merger, consolidation
or acquisition, tender offer or other acquisition of securities, an election of
directors or a sale or other transfer of a material amount of assets.
18
<PAGE>
9. Financing of the Offer and the Merger. The total amount of funds required
by Purchaser to consummate the Offer and the Merger and to pay related fees and
expenses is estimated to be approximately $1,752 million. Purchaser will obtain
all of such funds from Parent or its affiliates. Parent and its affiliates
currently intend to provide such funds from the net proceeds of the rights
offering described below (the "Rights Offering"), and from funds available
pursuant to certain existing committed credit facilities (the "Credit
Facilities") provided by Midland Bank plc and The Toronto-Dominion Bank (the
"Banks") under a Facilities Agreement, dated January 26, 1995, by and
among Parent, Cadbury Schweppes Finance Limited, the Banks and Samuel Montagu
& Co. Limited as agent (the "Facilities Agreement"). In addition, subject to
approval from shareholders of Parent, Parent proposes to provide an
underwritten enhanced scrip dividend alternative (the "UESDA"), which will
effectively increase the cash resources available to Parent. (Pounds Sterling
amounts in this Item 9 have been translated into U.S. dollars at the Noon
Buying Rate for Pounds Sterling of B.P.1.00 = $1.58 on January 31, 1995).
The Rights Offering. In the Rights Offering, Parent has offered holders of
its Ordinary Shares one unit (a "Stock Unit") of non-interest bearing
convertible unsecured loan stock for every seven Ordinary Shares held of record
on January 30, 1995. The purchase price of each Stock Unit is B.P.3.40 ($5.37)
(the "Rights Price"), payable in two instalments. Each fully paid Stock Unit is
convertible into one Ordinary Share of Parent (collectively, the "New Ordinary
Shares").
The first instalment of the Rights Price is B.P.1.02 ($1.61), payable on
acceptance of the rights, and will raise B.P.115 million ($181.7 million), net
of commissions. The second instalment of the Rights Price is B.P.2.38 ($3.76),
and will raise B.P.280 million ($442.4 million), net of commissions. The second
instalment will only become payable if the conditions to the Offer are satisfied
or waived.
An aggregate amount of 119,136,851 Stock Units will be issued in the Rights
Offering, convertible, upon payment of the second instalment, into 119,136,851
New Ordinary Shares. The net proceeds of the Rights Offering are estimated to be
approximately B.P.395 million ($624.1 million). The purchase of Shares validly
tendered in the Offer is not conditioned on the consummation of the Rights
Offering.
Kleinwort Benson Limited ("Kleinwort U.K."), the indirect parent of KBNA,
has underwritten the Rights Offering, so that if and to the extent holders of
Ordinary Shares, or purchasers of the rights to subscribe for Stock Units, do
not apply to subscribe for the Stock Units offered to them and Kleinwort U.K. is
unable to procure subscribers for the Stock Units not subscribed for at a price
(net of expenses) in excess of the Rights Price, Kleinwort U.K. will subscribe
for such Stock Units or obtain subscriptions for such Stock Units from third
parties at the Rights Price. Kleinwort U.K. does not have any obligation to pay
the second instalment for the Stock Units, unless it is the registered owner of
such Stock Units at the time the second instalment is due.
Pursuant to its agreement to underwrite the Stock Units, on the basis that
both the first instalment and the second instalment of the Rights Offering
become payable, Kleinwort U.K. is entitled to commissions estimated to amount to
2.3875 percent of the maximum aggregate subscription price for the total amount
of the Stock Units to be issued pursuant to the Rights Offering at the Rights
Price (out of which Kleinwort U.K. will pay commissions estimated to amount to
1.6375 percent of such maximum aggregate subscription price to the
sub-underwriters and a fee of 0.25 percent of such maximum aggregate
subscription price to the brokers to the Rights Offering). Parent has
agreed to pay the expenses of the issue of the Stock Units and to indemnify
Kleinwort U.K. against liabilities arising as a result of its services in
connection therewith.
THE OFFER DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO PURCHASE ANY RIGHTS TO SUBSCRIBE FOR STOCK UNITS, NEW ORDINARY SHARES OR ANY
OTHER SECURITIES OF PARENT. The provisional allotment letters sent to
shareholders of Parent evidencing the right to subscribe for the Stock Units and
the New Ordinary Shares have not been and will not be registered under the
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Securities Act of 1933, and they may not, as part of their distribution, be
offered, sold, taken up, renounced or delivered, directly or indirectly, in the
United States, except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act. Except in
certain limited circumstances, provisional allotment letters will not be sent to
persons with registered addresses in the United States.
The Credit Facilities. The Credit Facilities are comprised of two separate
committed unsecured revolving credit facilities which Parent has established
with the Banks as arrangers and as lenders. The commitments under the Credit
Facilities are for a $1.0 billion facility ("Facility A") available to be used
for general corporate purposes (including financing of acquisitions) of Parent
and its subsidiaries (the "Group"), and a $1.4 billion facility ("Facility B")
available to be used as short-term bridging finance pending the availability of
long-term finance, which is to operate as a revolving credit facility until
January 25, 1996, and thereafter (to the extent that any advance or advances are
outstanding on that date) as a term loan. The final repayment date for both
facilities is January 26, 1998. The rate of interest applicable to advances made
under the facilities is a rate equal to the London Interbank Offered Rate for
the relevant interest period plus a margin of 0.225 percent per annum.
Commitment fees are payable on the undrawn and uncancelled portions of each
facility, at the rate of 0.1 percent per annum until January 26, 1998 in respect
of Facility A and 0.0625 percent per annum until January 25, 1996 in respect of
Facility B. Parent is entitled to nominate additional or substitute borrowers
under the Facilities Agreement and has unconditionally guaranteed the
obligations of any borrower thereunder.
On February 1, 1995, Parent paid the first instalment of $1.2 million of the
arrangement and underwriting fee, equal to 0.05 percent of the total commitments
under the two Credit Facilities. Parent will pay a second instalment of the
arrangement and underwriting fee in the same amount within three business days
after the conditions to the Offer have been satisfied or waived.
The Banks have agreed that while Parent has outstanding obligations under or
pursuant to the Merger Agreement, drawings may be made under the Facilities
Agreement on an unconditional basis and that the maturity of existing advances
will not be accelerated by virtue of any event of default or otherwise.
Of the $2.4 billion initially available to Parent pursuant to the Credit
Facilities, none of the amount available had been drawn as of February 1, 1995,
leaving all of it available.
Parent anticipates that indebtedness incurred through borrowings under the
Credit Facilities will be repaid from a variety of sources, which may include,
but may not be limited to, funds generated internally by Parent and its
affiliates (including, following the Merger, funds generated by the Surviving
Corporation), bank financing, and the public or private sale of debt or equity
securities. No decision has been made concerning the method Parent will employ
to repay such indebtedness. Such decision will be made based on Parent's review
from time to time of the advisability of particular actions, as well as on
prevailing interest rates and financial and other economic conditions and such
other factors as Parent may deem appropriate. Following the Offer, Parent
intends to refinance approximately B.P.200 million ($316.0 million) of the
Credit Facilities through the sale of U.S. dollar fixed rate cumulative
guaranteed preferred securities ("Preferred Securities") issued by a limited
partnership of which Parent is the general partner and guaranteed by Parent.
THE OFFER DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO PURCHASE ANY OF THE PREFERRED SECURITIES.
The Underwritten Enhanced Scrip Dividend Alternative. Parent also proposes
to issue up to 36,063,046 new Parent shares pursuant to the UESDA (the "UESDA
Shares"), which, if taken up in full by existing shareholders, will effectively
increase the cash resources available to the Group by
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approximately B.P.111 million ($175.4 million). The UESDA is subject to the
approval of the shareholders of Parent. Parent shareholders will be entitled to
elect to accept the UESDA in place of the second interim dividend of B.P.0.11
($0.17) (net of U.K. income taxes), which is to be paid in lieu of a final
dividend for the year ended December 31, 1994. Kleinwort U.K. will offer to
procure purchasers for the UESDA Shares at not less than the Rights Price.
Assuming full takeup of the UESDA, the impact of undertaking the UESDA and the
Rights Offering, rather than undertaking a larger rights offering and paying a
final cash dividend in the typical manner, thereby raising the same net amount,
is to permit Parent to avoid the applicability of U.K. advance corporation tax
("ACT") payments totalling approximately B.P.23 million ($36.3 million).
Pursuant to its agreement to procure purchasers for the UESDA Shares, on the
basis that the UESDA becomes unconditional, Kleinwort U.K. is entitled to
commissions estimated to amount to 2.3875 percent of an amount equal to the
aggregate value at the Rights Price of the maximum number of UESDA Shares (out
of which Kleinwort U.K. will pay commissions estimated to amount to 1.6375
percent of such amount to the sub-underwriters and a fee of 0.25 percent of such
amount to the brokers to the Rights Offering). Parent has agreed to pay the
expenses of the issue of the UESDA Shares and to indemnify Kleinwort U.K.
against liabilities arising as a result of their services in connection
herewith.
THE OFFER DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO PURCHASE ANY OF THE UESDA SHARES.
10. Background of the Offer; Contacts with the Company; the Merger Agreement
and Stockholders Agreement.
BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY
On January 26, 1993 the Company completed its initial public offering of
Common Stock (the "IPO"). Immediately prior to the IPO, Parent, through Cadbury
Inc., owned 8.9% of the outstanding Common Stock. As a result of the IPO,
Parent's ownership interest in the Company was reduced to 5.7%.
Prior to the IPO, Parent was also a party to a stockholders agreement with
the other then principal stockholders of the Company, under which Parent had the
right to designate one representative to the Board. However, Parent did not
exercise this right after early 1989.
During the spring of 1993, representatives of Parent and the Company held
intermittent exploratory discussions concerning a potential business combination
of the Company and the North American carbonated beverage business of Parent. On
May 11, 1993, David Jinks, Finance Director of Parent, Frank Swan, Managing
Director-Beverages Stream of Parent, and Michael Clark, Group Secretary and
Chief Legal Officer of Parent, met in Dallas with Ira Rosenstein, Executive Vice
President and Chief Financial Officer of the Company, Michael Buiter, Vice
President--Finance of the Company, and Nelson Bangs, Vice President and General
Counsel of the Company. During these discussions, Parent advised the Company of
its interest in acquiring between 50% and 60% of the Company's outstanding
equity pursuant to (i) the sale or contribution of Cadbury Inc.'s North American
carbonated beverages business to the Company in exchange for newly issued shares
of Common Stock and (ii) the acquisition of additional shares of Common Stock
either in open market or privately negotiated transactions. In early June 1993,
the Board determined it would not be in the best interests of the stockholders
to pursue such a transaction with Parent and such discussions ceased.
In mid-July 1993, Prudential informed the Company of its intent to exercise
its registration rights and to sell all of the shares of Non-Voting Common Stock
of Company that it owned in an underwritten public offering.
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At about this time, Parent indicated its interest in acquiring, with the
Company's approval, all of the shares being sold by Prudential. Parent also
indicated it would be willing to enter into a three-year standstill agreement
with the Company in connection with its acquisition of Prudential's Shares in
exchange for, among other things, the right to designate two members of the
Board. In response, the Company indicated a willingness to consider approving
Parent's acquisition of Prudential's Shares if Parent would enter into (i) a
five-year standstill agreement and (ii) master license agreements regarding
Parent's distribution of the Company's products internationally and the
Company's distribution of Parent's products in North America. Parent responded
that it was not interested in such business arrangements. On August 15, 1993,
Parent proposed a form of five-year standstill agreement to the Company without
the business arrangements suggested by the Company. This proposal was not
accepted by the Company.
On August 19, 1993, as a result of a privately negotiated transaction,
Cadbury Inc. entered into a Stock Purchase Agreement with Prudential pursuant to
which it purchased the 12,175,861 shares of Nonvoting Common Stock of the
Company (representing approximately 20.2% of the Company's then outstanding
common stock) owned by Prudential. Following the expiration of the applicable
waiting period under the HSR Act, on October 4, 1993 Cadbury Inc. exercised its
right to convert these shares of Nonvoting Common Stock into an equal number of
shares of Common Stock, and as a result, owned an aggregate of 25.9% of the then
outstanding Common Stock.
Parent's acquisition of Prudential's Shares, which was effected without
Board approval, resulted in Parent's becoming an "interested stockholder" under
Section 203 of Delaware Law.
On September 1, 1993, the Company adopted the Rights Agreement. The Rights
Agreement provided all shareholders (other than the person acquiring Shares as
described below) the right to purchase additional Shares at a substantial
discount to the existing market price in the event that (i) any person (other
than Parent and its subsidiaries) became the beneficial owner of more than 10%
of the outstanding Shares or (ii) Parent and its subsidiaries increased their
beneficial ownership of outstanding Shares above 26%, in each case without the
prior approval of the Board of Directors of the Company.
On January 3, 1994, Dominic Cadbury, Executive Chairman of Parent, called
John Albers, Chairman and Chief Executive Officer of the Company, to further
discuss possible Board representation. On February 9, 1994, Mr. Cadbury and
David Wellings, Executive Director and Group Chief Executive of Parent, met with
Messrs. Albers, Rosenstein and Buiter to discuss the issue again, at which time
Mr. Albers agreed to submit Parent's proposal for Board representation to the
Board. At a regular meeting of the Board on February 24, 1994, the Board
determined that it was not advisable to provide Parent with Board
representation. This decision was communicated that day through telephone
conversations and confirmed in an exchange of correspondence on March 3 and
March 7.
In May 1994, Messrs. Wellings, Clark and Gordon Waddell, a Director of
Parent, visited Dallas in connection with Parent's business unrelated to the
Company. During the course of that visit they had dinner with members of the
Company's senior management on May 3. At that dinner Parent again raised the
issue of representation on the Board and the Company indicated it saw no reason
for the Board to change its position on the issue.
In late July 1994, Mr. Rosenstein telephoned Mr. Wellings to suggest a
meeting among Mr. Albers, Mr. Cadbury and themselves. As a result, Messrs.
Albers, Rosenstein, Cadbury and Wellings met in New York City on August 9, 1994.
At this meeting, Messrs. Albers and Rosenstein described generally potential
plans of the Company regarding international expansion, activities in China and
other strategic objectives. They also sought to determine Parent's long-term
interests with respect to the Company and its shareholding, including whether
Parent had an interest in exploring a business combination or similar
transaction with the Company or whether Parent would
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be interested in the Company's assistance to effect an orderly sale of Parent's
Shares. Messrs. Cadbury and Wellings undertook to consider these issues.
At the request of Parent, on September 13, 1994, Messrs. Cadbury and
Wellings met with Messrs. Albers and Rosenstein in New York City to review
Parent's long-term interests regarding the Company. At such meeting, Messrs.
Cadbury and Wellings indicated that Parent was not then interested in selling
its Shares but was willing to consider on an exploratory basis a business
combination. Messrs. Cadbury and Wellings indicated that they would be willing
to recommend to Parent's Board that it consider framing a proposal at a price
level of $29 per Share in cash for all the outstanding Shares of the Company if
they received an indication that a proposal at that level would receive serious
consideration. Messrs. Albers and Rosenstein replied that a proposal, if made at
that level, would not be of interest to the Board and declined, upon request, to
provide a price at which the Board would consider a sale, stating that the
Company was not for sale. Messrs. Albers and Rosenstein did, however, indicate
that if an actual offer were received they would submit it to the Board for
consideration. They also said that they would report this discussion to the
Company's Board.
Pursuant to a telephone call between Mr. Jinks and Mr. Rosenstein after the
September 13 meeting, Mr. Rosenstein agreed to provide Parent with certain
public information regarding outstanding stock options, employment and severance
agreements, the Company's second quarter 1994 financial statements, then pending
litigation and the Company's net operating loss carryforwards. The information
was delivered under cover of letter dated September 19, 1994.
On September 23, 1994, Mr. Rosenstein and Mr. Jinks spoke by telephone to
discuss the possibility of a further meeting in London, which Mr. Rosenstein
indicated could not occur prior to a scheduled Board meeting on October 4.
On October 5, 1994, Messrs. Albers and Rosenstein telephoned Messrs.
Cadbury, Jinks and Clark to suggest a meeting, which was arranged for October 11
in London. On October 7, 1994, Messrs. Jinks and Rosenstein spoke by telephone
to discuss logistical arrangements for the scheduled meeting.
On October 11, 1994, Mr. Rosenstein, Kent Sweezey, a Managing Director of
DLJ, financial advisor to the Company, and Douglas Brent, a Managing Director of
BT, also a financial advisor to the Company, met in London with Messrs. Jinks
and Clark, Arthur Reimers, a Partner at Goldman Sachs International, financial
advisor to Parent, and Henry Somerset, Director, Kleinwort Benson Limited, also
a financial advisor to Parent. At this meeting, Parent sought to solicit from
the Company a price at which the Board would consider a sale of the Company. Mr.
Rosenstein declined, replying that the Company was not for sale. Nevertheless,
he agreed to take the request under consideration. The operations of the Company
were also discussed generally at this meeting.
On October 13, 1994, Messrs. Albers and Rosenstein called Mr. Wellings and
indicated that they did not see at that time a basis for proceeding with
discussions, that the Company was not for sale and that, therefore, it would be
inappropriate to suggest a price.
On November 9, 1994, the Company filed with the SEC its Quarterly Report on
Form 10-Q for the quarter ended September 30, 1994 (the "Third Quarter 10-Q").
Representatives of the Company and Parent agreed to meet to review the Third
Quarter 10-Q, and on November 22, 1994, Messrs. Bangs, Buiter, Sweezey and Brent
met in Dallas with David Kappler, then Finance Director-designate (presently
Finance Director) of Parent, and Mr. Reimers to discuss the operational results
reflected in the Third Quarter 10-Q.
On January 3, 1995, Mr. Wellings called Mr. Albers to suggest a meeting,
which they then arranged for January 17 in Dallas. On January 4, 1995 Mr. Albers
called Mr. Wellings to discuss the agenda and potential participants at the
meeting, and to invite Messrs. Cadbury and Wellings to dinner on January 16.
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Messrs. Albers, Rosenstein, Thomas O. Hicks, an independent director of the
Company, and Richard G. Merrill, also an independent director of the Company,
each of whom is a member of a Special Committee designated by the Board and
chaired by Mr. Hicks to consider any proposals the Company might receive with
respect to a business combination transaction, met Messrs. Cadbury and Wellings
for dinner on January 16, 1995, and they met again on the morning of January 17,
1995. At that time, they reviewed in a general manner the preliminary results of
the Company for the fourth quarter of 1994, its prospects and other matters
affecting the business. The parties also further explored a possible basis for a
business combination. Messrs. Cadbury and Wellings said that they did not have
authorization from Parent's board to make a proposal regarding a business
combination and that board action would be necessary to authorize such a
proposal. Before making any recommendation to Parent's board regarding such a
proposal, however, Messrs. Cadbury and Wellings inquired what the opinion of
management of the Company would be if a proposal were made at a level of $31 per
Share. The Special Committee responded that while it did not have authority to
agree to any proposals, it believed that the Board would consider a transaction
involving a valuation at the $36 per Share level. Given the failure to make
progress in these discussions, the parties then discussed again the possibility
of Parent's representation on the Board. The Special Committee indicated that
the Company would again deny such request if made.
After the January 17 meeting and in the following days, the financial
advisors of Parent and the Company had several informal discussions to determine
if there was a basis on which they could recommend to their respective clients
that discussions should be resumed. The financial advisors suggested to their
respective clients that if they were willing to discuss a price in the $32 to
$35 per Share range, with each party understanding that both parties would need
to show price movement, a basis might exist for further discussions between
Parent and the Company.
On this basis, on January 19, 1995, Messrs. Albers and Rosenstein called Mr.
Wellings to discuss possible ways in which further discussions regarding a
business combination could proceed. On January 20, Messrs. Cadbury and Wellings
telephoned Mr. Rosenstein to indicate that the Board of Directors of Parent was
willing to enter into detailed discussions with the Company regarding a possible
business combination and to make a proposal at $33 per Share. Later that day,
Mr. Albers called Mr. Cadbury to tell him that the Company was also prepared at
that point to enter into detailed discussions with Parent and that Parent's
proposal provided the basis for discussing all terms and conditions necessary in
order to conclude a transaction.
The Special Committee met on January 20, 1995 and the Board met on January
21, 1995 to review the discussions between Parent and the Company.
On January 21, 1995, counsel to Parent delivered to representatives of the
Company preliminary drafts of the Merger Agreement and Stockholders Agreement.
On January 22, 1995 representatives of management of Parent and the Company, and
their respective legal and financial advisors, met in New York to begin
discussions regarding various issues involved in the proposed transaction.
The Company and Parent entered into a confidentiality agreement, dated as of
January 22, 1995, that required Parent to keep confidential certain limited
non-public information disclosed by the Company to Parent and its
representatives.
Early in the morning (New York City time) on January 23, 1995, Parent issued
a press release stating that representatives of Parent and the Company were
involved in detailed discussions about a proposed business combination under
which the stockholders of the Company would receive a cash consideration. On
January 23, after a meeting of the Special Committee, Mr. Hicks telephoned Mr.
Cadbury to discuss outstanding issues, including price, relating to the proposed
transaction. Discussions continued among the representatives of the Company and
Parent, including their respective legal and financial advisors, throughout
January 23, 24, and 25.
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On January 25, 1995, the Board of Directors of Parent met in London to
review the terms and conditions of the proposed transaction as well as related
matters and subsequently approved the execution and delivery of the Merger
Agreement and Stockholders Agreement.
Also on January 25, 1995, the Board met to consider the proposed
transaction. At that meeting BT and DLJ delivered their opinions addressed to
the Board and the Special Committee to the effect that the consideration to be
received by the holders of Shares in the Offer and the Merger is fair, from a
financial point of view, to such holders (other than Parent and its
subsidiaries). The Special Committee thereupon determined by unanimous vote that
the Offer and the Merger are fair to and in the best interests of the
stockholders of the Company (other than Parent and its subsidiaries) and
recommended that the full Board approve the Offer and the Merger. After
receiving the recommendation of the Special Committee, the Board, among other
things, (i) determined by unanimous vote that the Offer and the Merger are fair
to and in the best interests of the stockholders of the Company (other than
Parent and its subsidiaries), (ii) authorized and approved the Merger Agreement
and (iii) recommended by unanimous vote that the stockholders of the Company
accept the Offer and tender their shares pursuant to the Offer.
Following such meetings, on January 25, 1995, Parent, Purchaser and the
Company entered into the Merger Agreement, and Purchaser and the Stockholders
entered into the Stockholders Agreement.
THE MERGER AGREEMENT
The following is a summary of the Merger Agreement, a copy of which has been
filed as an Exhibit to the Tender Offer Statement on Schedule 14D-1/13D (the
"Schedule 14D-1") filed by Purchaser and Parent with the Commission in
connection with the Offer. Such summary is qualified in its entirety by
reference to the Merger Agreement.
THE OFFER. The Merger Agreement provides for the commencement of the Offer
as promptly as reasonably practicable, but in no event later than five business
days after the initial public announcement of Purchaser's intention to commence
the Offer. The obligation of Purchaser to accept for payment Shares tendered
pursuant to the Offer is subject to the satisfaction of the Minimum Condition
and certain other conditions that are described in Section 14 hereof. Purchaser
and Parent have agreed that no change in the Offer may be made which decreases
the price per Share payable in the Offer, which reduces the maximum number of
Shares to be purchased in the Offer, which imposes conditions to the Offer in
addition to those set forth in Section 14 hereof, which amends or changes the
terms and conditions of the Offer in any manner materially adverse to the
holders of Shares other than Parent and its subsidiaries or changes or waives
the Minimum Condition.
THE MERGER. The Merger Agreement provides that, upon the terms and subject
to the conditions thereof, and in accordance with Delaware Law, at the Effective
Time, Purchaser shall be merged with and into the Company. As a result of the
Merger, the separate corporate existence of Purchaser will cease and the Company
will continue as the Surviving Corporation and will become an indirect, wholly
owned subsidiary of Parent. The Merger Agreement provides that, notwithstanding
anything to the contrary contained in this paragraph, Parent may elect instead,
at any time prior to the fifth business day immediately preceding the date on
which the Proxy Statement (as hereinafter defined) is mailed initially to the
Company's stockholders, to merge the Company into Purchaser or another direct or
indirect wholly owned subsidiary of Parent. Upon consummation of the Merger,
each issued and then outstanding Share (other than any Shares held in the
treasury of the Company, or owned by Purchaser, Parent or any direct or indirect
wholly owned subsidiary of Parent or of the Company and any Shares that are held
by stockholders who have not voted in favor of the Merger or consented thereto
in writing and who shall have demanded properly in writing appraisal for such
Shares in accordance with Delaware Law) shall be cancelled and converted
automatically into the right to receive the Merger Consideration.
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Pursuant to the Merger Agreement, each share of common stock, par value $.01
per share, of Purchaser issued and outstanding immediately prior to the
Effective Time shall be converted into and exchanged for one share of common
stock, par value $.01 per share, of the Surviving Corporation.
The Merger Agreement provides that the directors of Purchaser immediately
prior to the Effective Time will be the initial directors of the Surviving
Corporation and that the officers of the Company immediately prior to the
Effective Time will be the initial officers of the Surviving Corporation. The
Merger Agreement provides that, at the Effective Time, unless otherwise
determined by Parent prior to the Effective Time, and subject to the
requirements of sections of the Merger Agreement that provide for
indemnification of directors and officers (as described herein), the Certificate
of Incorporation of the Company, as in effect immediately prior to the Effective
Time, shall be the Certificate of Incorporation of the Surviving Corporation,
and shall be amended and restated to conform to the Certificate of Incorporation
of Purchaser as in effect immediately prior to the Effective Time; provided,
however, that, at the Effective Time, Article I of the Certificate of
Incorporation of the Surviving Corporation shall be amended to read as follows:
"The name of the corporation is Dr Pepper/Seven-Up Companies, Inc." The Merger
Agreement also provides that the By-laws of Purchaser, as in effect immediately
prior to the Effective Time, and subject to the requirements of sections of the
Merger Agreement that provide for indemnification of directors and officers,
will be the By-laws of the Surviving Corporation.
AGREEMENTS OF PARENT, PURCHASER AND THE COMPANY. Pursuant to the Merger
Agreement, the Company, acting through the Board, shall, subject to its
fiduciary duties under applicable law as advised in writing by independent
counsel, in order to consummate the Merger, duly call, give notice of, convene
and hold an annual or special meeting of its stockholders as soon as practicable
following consummation of the Offer for the purpose of considering and taking
action on the Merger Agreement and the transactions contemplated thereby (the
"Stockholders' Meeting").
Proxy Statement. The Merger Agreement provides that the Company shall, as
soon as practicable following consummation of the Offer, file with the
Commission under the Exchange Act, and use its reasonable best efforts to have
cleared by the Commission, a proxy statement and related proxy materials (the
"Proxy Statement") with respect to the Stockholders' Meeting and shall cause the
Proxy Statement to be mailed to stockholders of the Company at the earliest
practicable time. The Company has also agreed, subject to its fiduciary duties
under applicable law as advised in writing by counsel, to include in the Proxy
Statement the unanimous recommendation of the Board that the stockholders of the
Company approve and adopt the Merger Agreement and the transactions contemplated
thereby and to use its reasonable best efforts to obtain such approval and
adoption. To the extent permitted by law, Parent and Purchaser have each agreed
to vote all shares beneficially owned by them in favor of the Merger.
Parent Stockholders' Meeting. The Merger Agreement provides that, subject to
its fiduciary duties under applicable law as advised in writing by independent
counsel, Parent, acting through its Board of Directors, shall, in accordance
with applicable law, (i) duly call, give notice of, convene and hold a special
meeting of the holders of Parent's ordinary shares (the "Parent Stockholders
Meeting") as soon as practicable following the date of the Merger Agreement, but
in no event later than March 1, 1995, for the purpose of considering and
authorizing the transactions contemplated by the Merger Agreement and (ii)
unanimously recommend that the holders of ordinary shares of Parent approve and
adopt this Agreement and the transactions contemplated by the Merger Agreement,
including, without limitation, the Merger, and use its reasonable best efforts
to obtain such approval and adoption.
Conduct of Business. Pursuant to the Merger Agreement, the Company has
covenanted and agreed that, between the date of the Merger Agreement and the
election or appointment of Purchaser's designees to the Board (as described in
the next following paragraph) upon the purchase by Purchaser of any Shares
pursuant to the Offer (the "Purchaser's Election Date"),
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unless Parent shall otherwise agree in writing, the businesses of the Company
and its subsidiaries (the "Subsidiaries" and, individually, a "Subsidiary")
shall be conducted only in, and the Company and the Subsidiaries shall not take
any action except in, the ordinary course of business and in a manner consistent
with past practice; and the Company shall use its reasonable best efforts to
preserve substantially intact the business organization of the Company and the
Subsidiaries, to keep available the services of the current officers, employees
and consultants of the Company and the Subsidiaries and to preserve the current
relationships of the Company and the Subsidiaries with customers, suppliers and
other persons with which the Company or any Subsidiary has significant business
relations. The Merger Agreement provides that by way of amplification and not
limitation, and except as contemplated therein, neither the Company nor the
Material Subsidiaries shall, between the date of the Merger Agreement and
Purchaser's Election Date, directly or indirectly do, or propose to do, any of
the following, without the prior written consent of Parent: (a) amend or
otherwise change its Certificate of Incorporation or By-laws or equivalent
organizational documents; (b) issue, sell, pledge, dispose of, grant, encumber,
or authorize the issuance, sale, pledge, disposition, grant or encumbrance of
(i) any shares of capital stock of any class of the Company or any Subsidiary,
or any options, warrants, convertible securities or other rights of any kind to
acquire any shares of such capital stock, or any other ownership interest
(including, without limitation, any phantom interest), of the Company or any
Subsidiary (except for the issuance of Shares issuable pursuant to Options (as
hereinafter defined) outstanding on the date of the Merger Agreement) or (ii)
any assets of the Company or any Subsidiary, except for sales of products in the
ordinary course of business and in a manner consistent with past practice; (c)
declare, set aside, make or pay any dividend or other distribution, payable in
cash, stock, property or otherwise, with respect to any of its capital stock
(except for such declarations, set asides, dividends, and other distributions
made from any Subsidiary to the Company); (d) reclassify, combine, split,
subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any
of its capital stock; (e) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any corporation, partnership,
other business organization or any division thereof or any material amount of
assets other than in the ordinary course of business, (ii) incur any
indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse, or otherwise as an accommodation become responsible for,
the obligations of any person, or make any loans or advances, except in the
ordinary course of business and consistent with past practice, (iii) without the
prior written consent of Parent (which shall not be unreasonably withheld),
enter into any (A) bottling license agreement or (B) supply agreement with a
term exceeding one year or terminate, cancel or request any material change in,
or agree to any material change in, any bottling license agreement or supply
agreement, (iv) authorize capital expenditures which are, in the aggregate, in
excess of $2,000,000 through March 15, 1995 for the Company and the Subsidiaries
taken as a whole (provided, however, that, notwithstanding the foregoing
limitation, capital expenditures in the aggregate for 1995 shall not exceed the
aggregate capital expenditures for 1994 and, provided, further, the Company may
enter into software licenses with a third party software vendor with the prior
written consent of Parent, which consent shall not be unreasonably withheld), or
(v) enter into or amend any contract, agreement, commitment or arrangement with
respect to any of the foregoing matters in this clause (e); (f) increase the
compensation payable or to become payable to its officers or employees, except
for increases in accordance with past practices in salaries or wages of
employees of the Company or any Subsidiary who are not officers of the Company,
or grant any severance or termination pay to, or enter into any employment or
severance agreement with any director, officer or other employee of the Company
or any Subsidiary, or establish, adopt, enter into or amend any collective
bargaining, bonus, profit sharing, thrift, compensation, stock option,
restricted stock, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any director, officer or employee or circulate to
any employee any details of any such plan proposed to be adopted; (g) make any
tax election or settle or compromise any material federal, state, local or
foreign income tax liability; (h) pay, discharge or satisfy any claim, liability
or
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obligation (absolute, accrued, asserted or unasserted, contingent or otherwise),
other than the payment, discharge or satisfaction, in the ordinary course of
business and consistent with past practice, of liabilities reflected or reserved
against in the consolidated balance sheet of the Company and the Subsidiaries as
at December 31, 1993 or subsequently incurred in the ordinary course of business
and consistent with past practice; (i) settle or compromise any pending or
threatened suit, action or claim which is material or which relates to the
Offer, the Merger, or any of the transactions contemplated thereby; or (j) take
or offer or propose to take, or agree to take in writing, or otherwise, any of
the actions described above or any action that would result in any of the
conditions to the Offer not being satisfied (other than as contemplated by the
Merger Agreement).
Designation of Directors. The Merger Agreement provides that, promptly upon
the purchase by Purchaser of Shares pursuant to the Offer, and from time to time
thereafter, Purchaser shall be entitled to designate up to such number of
directors, rounded up to the next whole number, on the Board as shall give
Purchaser representation on the Board equal to the product of the total number
of directors on the Board (giving effect to the directors elected pursuant to
this sentence), multiplied by the percentage that the aggregate number of Shares
beneficially owned by Purchaser or any affiliate of Purchaser at such time bears
to the total number of Shares then outstanding, and the Company shall, at such
time, promptly take all actions necessary to cause Purchaser's designees to be
elected as directors of the Company, including increasing the size of the Board
or securing the resignations of incumbent directors, or both. The Merger
Agreement also provides that, at such times, the Company shall use its best
efforts to cause persons designated by Purchaser to constitute the same
percentage as persons designated by Purchaser shall constitute of the Board of
(i) each committee of the Board (some of the members of which may be required to
be independent as required by applicable law), (ii) each board of directors of
each domestic Subsidiary and (iii) each committee of each such board, in each
case only to the extent permitted by applicable law. Notwithstanding the
foregoing, until the time Purchaser acquires a majority of the then outstanding
Shares on a fully diluted basis, the Company has agreed to use its best efforts
to ensure that all the members of the Board and each committee of the Board and
such boards and committees of the domestic Subsidiaries as of the date of the
Merger Agreement who are not employees of the Company shall remain members of
the Board and of such boards and committees.
Amendments. The Merger Agreement provides that following the election or
appointment of Purchaser's designees in accordance with the immediately
preceding paragraph and prior to the Effective Time, any amendment of the Merger
Agreement or the Certificate of Incorporation or By-laws of the Company, any
termination of the Merger Agreement by the Company, any extension by the Company
of the time for the performance of any of the obligations or other acts of
Parent or Purchaser or waiver of any of the Company's rights thereunder, will
require the concurrence of a majority of those directors of the Company then in
office who were neither designated by Purchaser nor are employees of the Company
or if no such directors are then in office, no such amendment, termination,
extension or waiver shall be effected which is materially adverse to the holders
of Shares (other than Parent and its subsidiaries).
Access to Information; Confidentiality. Pursuant to the Merger Agreement,
from the date of the Merger Agreement until the consummation of the Offer, the
Company shall, and shall cause the Subsidiaries and the officers, directors,
employees, auditors and agents of the Company and the Subsidiaries to, afford
the officers, employees and agents of Parent and Purchaser and persons providing
or committing to provide Parent or Purchaser with financing for the transactions
contemplated by the Merger Agreement complete access at all reasonable times to
the officers, employees, agents, properties, offices, plants and other
facilities, books and records of the Company and each Subsidiary, and shall
furnish Parent and Purchaser and persons providing or committing to provide
Parent or Purchaser with financing for the transactions contemplated by the
Merger
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Agreement with all financial, operating and other data and information as Parent
or Purchaser, through its officers, employees or agents, may reasonably request.
Parent and Purchaser have agreed to keep such information confidential in
accordance with the Confidentiality Agreement, dated as of January 22, 1995,
between Parent and the Company (the "Confidentiality Agreement").
The Company has agreed that to the extent permitted by applicable law, in
order to facilitate the continuing operation of the Company by Parent and
Purchaser from and after the completion of the Offer without disruption and to
assist in an achievement of an orderly transition in the ownership and
management of the Company, from the date of the Merger Agreement and until
completion of the Offer, the Company, Parent and Purchaser shall cooperate
reasonably with each other to effect an orderly transition including, without
limitation, with respect to communications with bottlers and employees.
No Solicitation of Transactions. The Company has agreed that, until the
Merger Agreement shall have been terminated according to its terms (as described
below), neither it nor any Subsidiary shall, directly or indirectly, through any
officer, director, agent or otherwise, solicit, initiate or encourage the
submission of, any proposal or offer from any person relating to any acquisition
or purchase of all or (other than in the ordinary course of business) any
substantial portion of the assets of, or any equity interest in, the Company or
any Material Subsidiary or any business combination with the Company or any
Subsidiary or, except to the extent required by fiduciary obligations under
applicable law as advised in writing by independent counsel, participate in any
negotiations regarding, or furnish to any other person any information with
respect to, or otherwise cooperate in any way with, or assist or participate in,
facilitate or encourage, any effort or attempt by any other person to do or seek
any of the foregoing; provided, however, that nothing contained in the Merger
Agreement shall prohibit the Board from furnishing information to, or entering
into discussions or negotiations with, any person in connection with an
unsolicited (from the date of the Merger Agreement) proposal in writing by such
person to acquire the Company pursuant to a merger, consolidation, share
exchange, business combination or other similar transaction or to acquire all or
substantially all of the assets of the Company or any of its Subsidiaries, if,
and only to the extent that, (i) the Board, after consultation with independent
legal counsel (which may include its regularly engaged independent legal
counsel), determines in good faith that such action is required for the Board to
comply with its fiduciary duties to stockholders imposed by Delaware Law and
(ii) prior to furnishing such information to, or entering into discussions or
negotiations with, such person the Company uses its reasonable best efforts to
obtain from such person an executed confidentiality agreement on terms no less
favorable to the Company than those contained in the Confidentiality Agreement.
The Merger Agreement required the Company immediately to cease and cause to be
terminated any discussions or negotiations existing as of the date of the Merger
Agreement with any parties conducted prior to the date of the Merger Agreement
with respect to any of the foregoing. The Company has also agreed to notify
Parent promptly if any such proposal or offer, or any inquiry or contact with
any person with respect thereto, is made. The Company has also agreed not to
release any third party from any confidentiality or, subject to the fiduciary
duties of the Board, standstill agreement to which the Company is or may become
a party.
Treatment of Stock Options. Immediately after the date on which the
Purchaser has accepted for payment all Shares validly tendered and not withdrawn
prior to the expiration date of the Offer, each outstanding option to purchase
Shares (in each case, an "Option") granted under the Company's 1988 Stock Option
Plan, as amended, 1988 Non-Qualified Plan, as amended, 1993 Stock Ownership
Plan, as amended, and Non-Qualified Stock Option Plan for Non-Employee Directors
(collectively, the "Stock Option Plans"), whether or not then exercisable, shall
be cancelled by the Company, and each holder of a cancelled Option shall be
entitled to receive from Purchaser, at the same time as payment for Shares is
made by Purchaser in connection with the Offer, in consideration for the
cancellation of such Option an amount in cash equal to the product of
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(i) the number of Shares previously subject to such Option and (ii) the excess,
if any, of the Merger Consideration over the exercise price per Share previously
subject to such Option.
Indemnification and Insurance. The Merger Agreement further provides that
the Certificate of Incorporation and the By-laws of the Surviving Corporation
and each of its Subsidiaries shall contain provisions no less favorable with
respect to indemnification and advancement of expenses that then are set forth
in Article VI of the Certificate of Incorporation of the Company as of the date
of the Merger Agreement, which provisions shall not be amended, repealed or
otherwise modified for a period of six years from the Effective Time in any
manner that would adversely affect the rights thereunder of individuals who from
and after the date of the Merger Agreement and to and including the Effective
Time were directors, officers, employees, fiduciaries or agents of the Company
or any of its Subsidiaries in respect of actions or omissions occurring at or
prior to the Effective Time (including, without limitation, the matters
contemplated by the Merger Agreement), unless such modification is required by
law. The Company has agreed that from and after the Purchaser's Election Date,
the Company shall not amend, repeal or otherwise modify the indemnification and
advancement of expenses provisions of Article VI of the Certificate of
Incorporation of the Company or the indemnification or advancement of expenses
provisions in the Certificate of Incorporation of any of the Company's
Subsidiaries in any manner that would adversely affect the rights thereunder of
individuals who at any time from and after the date of the Merger Agreement and
to and including the Effective Time were directors, officers, employees,
fiduciaries or agents of the Company or any of its Subsidiaries in respect of
actions or omissions occurring at or prior to the Effective Time (including,
without limitation, the matters contemplated by the Merger Agreement), unless
such modification is required by law.
The Merger Agreement also provides that the Company shall, to the fullest
extent permitted under applicable law and regardless of whether the Merger
becomes effective, indemnify and hold harmless, and after the Effective Time,
the Surviving Corporation shall, to the fullest extent permitted under
applicable law, indemnify and hold harmless, each present and former director,
officer, employee, fiduciary and agent of the Company and each Subsidiary
(collectively, the "Indemnified Parties") against all costs and expenses
(including attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement in connection with any threatened or
actual claim, action, suit, proceeding or investigation (whether arising before
or after the Effective Time) (a "Claim"), whether civil, criminal,
administrative or investigative, arising out of or pertaining to any action or
omission in their capacity as an officer, director, employee, fiduciary or agent
(including, without limitation, any Claim arising out of the Merger Agreement or
any of the transactions contemplated thereby), whether occurring before or after
the Effective Time, whether asserted prior to or at or after the Effective Time,
for a period of six years after the later of the date of the Merger Agreement
and the Effective Time, in each case to the fullest extent permitted under
Delaware Law (and will pay any expenses in advance of the final disposition of
any such action or proceeding to each Indemnified Party to the fullest extent
permitted under Delaware Law, upon receipt from the Indemnified Party to whom
expenses are advanced of an undertaking to repay such advances required under
Delaware Law). In the event of any such claim, action, suit, proceeding or
investigation, the Merger Agreement provides that (i) the Indemnified Parties
may retain counsel, including local counsel, satisfactory to them and the
Company or the Surviving Corporation, as the case may be, shall pay the
reasonable fees and expenses of such counsel promptly after statements therefor
are received and (ii) the Company and the Surviving Corporation shall use all
reasonable efforts in the vigorous defense of any such matter; provided,
however, that neither the Company nor the Surviving Corporation shall be liable
for any settlement effected without its written consent (which consent may not
be unreasonably withheld); and provided, further, that neither the Company nor
the Surviving Corporation shall be obligated to pay the fees and expenses of
more than one counsel (plus appropriate local counsel) for all Indemnified
Parties in any single action unless there is, as determined by counsel to the
Indemnified Parties, under applicable standards of professional conduct, a
conflict or a reasonable likelihood of a conflict on any significant issue
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between the positions of any two or more Indemnified Parties, in which case such
additional counsel (including local counsel) as may be required to avoid any
such conflict or likely conflict may be retained by the Indemnified Parties at
the expense of the Company or the Surviving Corporation; and provided, further,
that, in the event that any claim for indemnification is asserted or made within
such six-year period, all rights to indemnification in respect of such claim
shall continue until the disposition of such claim.
The Merger Agreement provides that the Company shall, from and after the
date of the Merger Agreement and to and including the Effective Time, and the
Surviving Corporation shall, for six years from the Effective Time, maintain in
effect the current directors' and officers' liability insurance policies
maintained by the Company (provided that the Surviving Corporation may
substitute therefor policies of at least the same coverage and amounts
containing terms and conditions which are no less advantageous to such officers
and directors so long as substitution does not result in gaps or lapses in
coverage) with respect to matters occurring prior to the Effective Time;
provided, however, that in no event shall the Surviving Corporation be required
to expend more than an amount per year equal to 200 percent of the current
annual premiums paid by the Company for such insurance (which premiums the
Company has represented to Parent and Purchaser to be approximately $700,000 in
the aggregate) and, in the event the cost of such coverage shall exceed that
amount, the Surviving Corporation will purchase as much coverage as possible for
that amount.
Parent, Purchaser and the Company have also agreed that in the event the
Company or the Surviving Corporation or any of their respective successors or
assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any person, then and in each such case, proper provision shall be made so
that the successors and assigns of the Company or the Surviving Corporation, as
the case may be, or at Parent's option, Parent, shall assume the foregoing
indemnity obligations. The Merger Agreement provides that the By-laws of the
Surviving Corporation and each of its Subsidiaries shall contain the provisions
with respect to indemnification and advancement of expenses set forth in the
By-laws of the Company on the date of the Merger Agreement, and that such
provisions shall not be amended, repealed or otherwise modified for a period of
six years after the Effective Time in any manner that would affect adversely the
rights thereunder of individuals who at any time from and after the date of the
Merger Agreement and to and including the Effective Time were directors,
officers, employees, fiduciaries or agents of the Company or any of its
Subsidiaries in respect of actions or omissions occurring at or prior to the
Effective Time (including, without limitation, the transactions contemplated by
the Merger Agreement), unless such modification is required by law. The Merger
Agreement provides that, from and after the Purchaser's Election Date, the
Company shall not amend, repeal or otherwise modify the indemnification and
advancement of expenses provisions of the By-laws of the Company or the
indemnification and advancement of expenses provisions in the By-laws of any of
the Company's Subsidiaries in any manner that would adversely affect the rights
thereunder of individuals who at any time from and after the date of the Merger
Agreement and to and including the Effective Time were directors, officers,
employees, fiduciaries or agents of the Company or any of its Subsidiaries in
respect of actions or omissions occurring at or prior to the Effective Time
(including, without limitation, the matters contemplated by this Agreement),
unless such modification is required by law.
The Merger Agreement provides that the obligations of the Company or the
Surviving Corporation with respect to the above described agreements regarding
indemnification and insurance shall not be terminated or modified in such a
manner as to adversely affect any director, officer, employee, fiduciary and
agent to whom the indemnification and insurance provisions therein apply without
the consent of each affected director, officer, employee, fiduciary and agent.
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The Merger Agreement provides that in the event that the Company or the
Surviving Corporation should fail, at any time from and after the Purchaser's
Election Date, to comply with any of the foregoing indemnification and insurance
obligations for any reason, Parent shall be responsible therefor. Parent agreed
to perform such obligations unconditionally without regard to any defense or
other basis for nonperformance which the Company or the Surviving Corporation
may have or claim (except as would otherwise be prohibited by applicable
Delaware Law). Parent, Purchaser, and the Company intend that the officers,
directors, employees, fiduciaries and agents of the Company and its Subsidiaries
shall be fully indemnified and that the foregoing indemnification provisions
shall be a primary obligation of Parent and not merely a guarantee by Parent of
the obligations of the Company or Purchaser. Parent and Purchaser understand
that the Company has entered into contractual indemnification arrangements with
each of its current directors and officers.
Employee Benefits. Pursuant to the Merger Agreement, Parent has agreed to
maintain each of the Company's existing employee benefit plans as that term is
defined in Section 3(3) of the Employee Retirement Income Security Act
(excluding any equity or incentive compensation plans or the severance plans
referred to below), until at least December 31, 1995. Parent has further agreed
that for 1996, Parent will provide the Company's employees with plans or
programs providing benefits which in the aggregate are not less favorable to
such employees than the benefits provided to them under existing employee
benefit plans of the Company.
Parent has also agreed that the Company's employees will continue to
participate in the Company's existing incentive compensation plans until
December 31, 1995 on the same basis as they are now participating. The Merger
Agreement further provides that for 1996 the employees will participate in any
incentive plan of Parent or any of its subsidiaries in effect as of the date
hereof or created thereafter, on substantially the same terms and subject to
substantially the same conditions and criteria as similarly situated U.S.
employees of Parent or any of its subsidiaries. In addition, the Company's
employees will also participate in 1995 and 1996 in any employee stock option
plan of Parent or any of its subsidiaries in effect as of the date hereof or
created thereafter, also on such substantially similar terms, conditions and
criteria.
Pursuant to the Merger Agreement, Parent has agreed that until two years
after the date upon which the Purchaser shall have purchased the Shares pursuant
to the Offer the Surviving Corporation will provide (i) severance payments
consistent with the existing Company Severance Benefits Program for Employees to
all officers (except the Chairman of the Board) and employees, and (ii)
reasonable outplacement services for all officers of the Company and its
subsidiaries and any divisional managers employed by the Company or its
subsidiaries at the date upon which the Purchaser shall have purchased the
Shares pursuant to the Offer, in each case, who are terminated without cause (as
that term is defined in the Company's Severance Benefit Program for Employees),
prior to such date. Parent has further agreed that the severance agreements
between the Company and each of Messrs. Albers and Rosenstein shall be amended
to provide that amounts payable thereunder upon termination after a Change of
Control (as defined thereunder) will be payable upon termination by the Company
(or the Surviving Corporation) without cause (as defined thereunder) or by the
employee for any reason. Finally, Parent has committed that all Pension and
Profit Sharing Plans of the Company shall be amended to provide that all
participants therein as of the date upon which the Purchaser shall have
purchased the Shares pursuant to the Offer shall be fully vested in their
benefits thereunder as of such date.
Further Action. The Merger Agreement provides that, subject to its terms and
conditions, each of the parties thereto shall (i) make promptly its respective
filings, and thereafter make any other required submissions, under the HSR Act
with respect to the Transactions, (ii) use its reasonable best efforts to take,
or cause to be taken, all appropriate action, and to do or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and
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make effective the transactions contemplated by the Merger Agreement, including,
without limitation, using its reasonable best efforts to obtain all licenses,
permits (including, without limitation, environmental permits), consents,
approvals, authorizations, qualifications and orders of governmental authorities
and parties to contracts with the Company and the Subsidiaries as are necessary
for the consummation of the transactions contemplated by the Merger Agreement
and to fulfill the conditions to the Offer and the Merger, and (iii) except as
contemplated by the Merger Agreement, use its reasonable best efforts not to
take any action, or enter into any transaction, which would cause any of its
representations or warranties contained in the Merger Agreement to be untrue or
result in a breach of any covenant made by it in the Merger Agreement.
Under the Merger Agreement, Parent has agreed to take all action necessary
to cause Purchaser to perform all of Purchaser's, and the Surviving Corporation
to perform all of the Surviving Corporation's, agreements, covenants and
obligations under the Merger Agreement and to consummate the Offer and the
Merger on the terms and conditions set forth in the Merger Agreement. The Merger
Agreement provides that Parent shall be liable for any breach of any
representation, warranty, covenant or agreement of Purchaser and for any breach
of the foregoing covenant.
Section 203 of Delaware Law. The Merger Agreement provides that (i) no
representation and warranty made by the Company shall be deemed to be untrue nor
shall the Company be deemed to be in breach of any such representation or
warranty and (ii) the Company shall not be deemed in breach of any covenant or
agreement contained herein, in each case to the extent that any such breach or
failure results directly or indirectly from the application to the transactions
contemplated by the Merger Agreement of Section 203 of Delaware Law. The Merger
Agreement provides that neither Parent nor Purchaser shall be entitled to assert
the failure of any condition to the consummation of the Offer or the Merger,
where the failure to satisfy such conditions results directly or indirectly from
the application to the transactions contemplated by the Merger Agreement of
Section 203 of Delaware Law.
In case at any time after the Effective Time any further action is necessary
or desirable to carry out the purposes of the Merger Agreement, the proper
officers and directors of each party to the Merger Agreement then in office are
required to use their reasonable best efforts to take all such action.
REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains various
customary representations and warranties of the parties thereto including
representations by the Company as to the absence of certain changes or events
concerning the Company's business, compliance with law, litigation, employee
benefit plans, labor matters, real property and leases, trademarks, patents and
copyrights, environmental matters, brokers and taxes. The Merger Agreement also
contains certain representations by the Company concerning the efforts taken by
the Company to protect the recipes relating to the soft drink concentrates and
other products manufactured by the Company.
The Company also represented in the Merger Agreement that (a) the Board has
taken all necessary action to amend the terms of the Rights Agreement (but
subject to the Board's right to further amend the Rights Agreement) so that (A)
none of the execution or delivery of the Merger Agreement or the Stockholders
Agreement or the making of the Offer will cause (i) the Rights to become
exercisable under the Rights Agreement, (ii) Parent or Purchaser or any of their
affiliates to be deemed an "Acquiring Person" (as defined in the Rights
Agreement) or (iii) the "Stock Acquisition Date" (as defined in the Rights
Agreement) to occur upon any such event, (B) none of the acceptance for payment
or payment for Shares by Purchaser pursuant to the Offer or the consummation of
the Merger will cause (i) the Rights to become exercisable under the Rights
Agreement or (ii) Parent or Purchaser or any of their affiliates to be deemed an
Acquiring Person or
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(iii) the Stock Acquisition Date to occur upon any such event, and (C) the
"Expiration Date" (as defined in the Rights Agreement) shall occur no later than
immediately prior to the purchase of shares pursuant to the Offer; provided,
however, that if the Merger Agreement is terminated in accordance with its
terms, the Board may rescind its approval of the Offer as a "Permitted Offer"
(as defined in the Rights Agreement) or further amend the Rights Agreement so
that clauses (B) and (C) above will not be the case; (b) the "Distribution Date"
(as defined in the Rights Agreement) has not occurred; and (c) the Board,
pursuant, to and in accordance with the Rights Agreement, has taken all
necessary action to approve the Offer as a Permitted Offer, and all
determinations required under the Rights Agreement to be made by the Board in
connection with such approval have been properly made in accordance with the
Rights Agreement; provided, however, that if the Merger Agreement is terminated
pursuant to its terms, the Board may rescind its approval of the Offer as a
Permitted Offer.
CONDITIONS TO THE MERGER. Under the Merger Agreement, the respective
obligations of each party to effect the Merger are subject to the satisfaction
at or prior to the Effective Time of the following conditions and only the
following conditions: (a) the Merger Agreement and the Merger shall have been
approved and adopted by the affirmative vote of the stockholders of the Company
to the extent required by Delaware Law (including Section 203 thereof) and the
Company's Certificate of Incorporation; (b) any waiting period (and any
extension thereof) applicable to the consummation of the Merger under the HSR
Act shall have expired or been terminated; (c) no foreign, United States or
state governmental authority or other agency or commission or foreign, United
States or state court of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any law, rule, regulation, executive order,
decree, injunction or other order (whether temporary, preliminary or permanent)
which is then in effect and has the effect of making the acquisition of Shares
by Parent or Purchaser or any affiliate of either of them illegal or otherwise
preventing or prohibiting consummation of the transactions contemplated by the
Merger Agreement (other than Section 203 of Delaware Law); and (d) Purchaser or
its permitted assignee shall have purchased all Shares validly tendered and not
withdrawn pursuant to the Offer; provided, however, neither Parent nor Purchaser
shall be entitled to assert the failure of this condition if, in breach of the
Merger Agreement or the terms of the Offer, Purchaser fails to purchase any
Shares validly tendered and not withdrawn pursuant to the Offer.
TERMINATION; FEES AND EXPENSES. The Merger Agreement provides that it may be
terminated and the Merger and the other transactions contemplated by the Merger
Agreement may be abandoned at any time prior to the Effective Time,
notwithstanding any requisite approval and adoption of the Merger Agreement and
the transactions contemplated by the Merger Agreement by the stockholders of the
Company: (a) by mutual written consent duly authorized by the Boards of
Directors of Parent, Purchaser and the Company prior to Purchaser's Election
Date; (b) by Parent, Purchaser or the Company if (i) the Effective Time shall
not have occurred on or before the later of (x) September 30, 1996 and (y) 90
days following the date on which Parent or any of its subsidiaries or affiliates
is no longer subject to the restrictions set forth in Section 203 of Delaware
Law; provided, however, that the right to terminate the Merger Agreement under
this clause (b) shall not be available to any party whose failure to fulfill any
obligation under the Merger Agreement has been the cause of, or resulted in, the
failure of the Effective Time to occur on or before such date or (ii) any court
of competent jurisdiction in the United States or other governmental authority
shall have issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the Merger and such order,
decree, ruling or other action shall have become final and nonappealable; (c) by
Parent if (i) due to an occurrence or circumstance that results in a failure to
satisfy any condition set forth in Section 14 hereof, Purchaser shall have (A)
failed to commence the Offer within 10 days following the date of the Merger
Agreement, (B) terminated the Offer without having accepted any Shares for
payment thereunder, or (C) failed to pay for Shares pursuant to the Offer within
90 days following the commencement of the Offer,
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unless any such failure listed above shall have been caused by or resulted from
the failure of Parent or Purchaser to perform in any material respect any
material covenant or agreement of either of them contained in the Merger
Agreement or the material breach by Parent or Purchaser of any material
representation or warranty of either of them contained in the Merger Agreement
or (ii) prior to the purchase of Shares pursuant to the Offer, the Board or any
committee thereof shall have withdrawn or modified in a manner adverse to
Purchaser or Parent its approval or recommendation of the Offer, the Merger
Agreement, the Merger or any other transaction contemplated by the Merger
Agreement or shall have recommended another merger, consolidation, business
combination with, or acquisition of, the Company or its assets or another tender
offer or exchange offer for Shares, or shall have resolved to do any of the
foregoing or shall have rescinded or resolved to rescind its determination that
the Offer is a "Permitted Offer" (as defined in the Rights Agreement); or (d) by
the Company, upon approval of the Board, if (i) Purchaser shall have (A) failed
to commence the Offer within 10 days following the date of the Merger Agreement,
(B) terminated the Offer without having accepted any Shares for payment
thereunder or (C) failed to pay for Shares pursuant to the Offer within 90 days
following the commencement of the Offer, unless any such failure shall have been
caused by or resulted from the failure of the Company to satisfy the conditions
set forth in paragraph (f) or (g) of Section 14 hereof or (ii) prior to the
purchase of Shares pursuant to the Offer, the Board shall have withdrawn or
modified in a manner adverse to Purchaser or Parent its approval or
recommendation of the Offer, the Merger Agreement or the Merger in order to
approve the execution by the Company of a definitive agreement providing for the
acquisition of the Company or its assets by merger or other business combination
or in order to approve a tender offer or exchange offer for Shares by a third
party, in either case, as determined by the Board, in the exercise of its good
faith judgment and after consultation with its legal counsel and financial
advisors on terms more favorable to the Company's stockholders than the Offer
and the Merger taken together; provided, however, that such termination under
this clause (ii) shall not be effective until the Company has made payment to
Parent of all fees and expenses required to be paid to Parent pursuant to the
Merger Agreement and has deposited with a mutually acceptable escrow agent $20
million for reimbursement to Parent and Purchaser of Expenses (as hereinafter
defined).
In the event of the termination of the Merger Agreement, the Merger
Agreement provides that it shall forthwith become void and there shall be no
liability thereunder on the part of any party thereto except under the
provisions of the Merger Agreement related to fees and expenses described below
and under certain other provisions of the Merger Agreement which survive
termination.
The Merger Agreement provides that in the event that (a) any person
(including, without limitation, the Company or any affiliate thereof), other
than Parent or any affiliate of Parent, shall have become the beneficial owner
of more than 15 percent of the then outstanding Shares and the Merger Agreement
shall have been terminated pursuant to the provisions described in the second
preceding paragraph above and within 12 months of such termination a Third Party
Acquisition (as hereinafter defined) shall occur; (b) any person shall have
commenced, publicly proposed or communicated to the Company a proposal that is
publicly disclosed for a tender or exchange offer for more than 50 percent (or
which, assuming the maximum amount of securities which could be purchased, would
result in any person beneficially owning more than 50 percent) of the then
outstanding Shares or otherwise for the direct or indirect acquisition of the
Company or all or substantially all of its assets for per Share consideration
having a value greater than the Merger Consideration and (i) the Offer shall
have remained open for at least 20 business days, (ii) the Minimum Condition
shall not have been satisfied and (iii) the Merger shall have been terminated
pursuant to the provisions described above; or (c) the Merger Agreement is
terminated pursuant to the provisions described in clause (c)(ii) or clause
(d)(ii) of the second preceding paragraph, then the Company shall pay Parent
promptly (but in no event later than one business day after the first of
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such events shall have occurred) a fee of $35 million, which amount shall be
payable in immediately available funds, plus all Expenses (as defined below).
Under the Merger Agreement, the term "Expenses" means all out-of-pocket
expenses and fees up to $20 million in the aggregate (including, without
limitation, fees and expenses payable to all banks, investment banking firms,
other financial institutions and other persons and their respective agents and
counsel, for arranging, committing to provide or providing any financing for the
transactions contemplated by the Merger Agreement or structuring such
transactions and all fees of counsel, accountants, experts and consultants to
Parent and Purchaser, and all printing and advertising expenses) actually
incurred or accrued by either of them or on their behalf in connection with the
transactions contemplated by the Merger Agreement, including, without
limitation, the financing thereof, and actually incurred or accrued by banks,
investment banking firms, other financial institutions and other persons and
assumed by Parent and Purchaser in connection with the negotiation, preparation,
execution and performance of the Merger Agreement, the structuring and financing
of the transactions contemplated by the Merger Agreement, and any financing
commitments or agreements relating thereto.
Under the Merger Agreement, the term "Third Party Acquisition" means the
occurrence of any of the following events: (i) the acquisition of the Company by
merger, consolidation or other business combination transaction by any person
other than Parent, Purchaser or any affiliate thereof (a "Third Party"); (ii)
the acquisition by any Third Party of all or substantially all of the total
assets of the Company and its Subsidiaries, taken as a whole; (iii) the
acquisition by a Third Party of 50 percent or more of the outstanding Shares
whether by tender offer, exchange offer or otherwise; (iv) the adoption by the
Company of a plan of liquidation or the declaration or payment of an
extraordinary dividend; or (v) the repurchase by the Company or any of its
Subsidiaries of 50 percent or more of the outstanding Shares.
Except as set forth in the preceding five paragraphs, all costs and expenses
incurred in connection with the Merger Agreement, the Stockholders Agreement and
the transactions contemplated by the Merger Agreement shall be paid by the party
incurring such expenses, whether or not any such transaction is consummated.
THE STOCKHOLDERS AGREEMENT
Purchaser and the Stockholders have entered into the Stockholders Agreement,
pursuant to which, upon the terms set forth therein, each Stockholder has agreed
to tender and sell, in accordance with the terms of the Offer, all Shares owned
by such Stockholder. Further, each Stockholder has agreed not to withdraw his
Shares unless (i) taking into account the Shares tendered by the Stockholders,
the Minimum Condition shall not have been satisfied in the Offer, or (ii) the
Board or any committee thereof shall have withdrawn or modified in any manner
adverse to Purchaser or Parent its approval or recommendation of the Offer, the
Merger, or the Merger Agreement. As of January 25, 1995, the Stockholders owned
(either beneficially or of record, excluding certain Shares held in certain
trusts and Shares issuable upon the exercise of stock options currently
outstanding) Shares constituting approximately 4.4 percent of the outstanding
Shares on a fully diluted basis.
The Stockholders Agreement provides that each Stockholder shall not, and
shall not offer or agree to, sell, transfer, tender or assign, hypothecate or
otherwise dispose of, or create or permit to exist, any security interest, lien,
pledge, option, right of first refusal, agreement, limitation on such
Stockholder's voting rights, charge, or other encumbrance of any nature
whatsoever with respect to the Stockholder's Shares owned as of the date of the
Stockholders Agreement or that may thereafter be acquired by such Stockholder at
any time prior to the earlier of (i) the purchase by Purchaser of all Shares
validly tendered and not withdrawn pursuant to the Offer or (ii) the termination
of the Offer by the Purchaser.
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The Stockholders Agreement provides that each Stockholder shall not,
directly or indirectly, through any agent or representative or otherwise,
solicit, initiate or encourage the submission of any proposal or offer from any
person relating to (i) any acquisition or purchase of all or any of the Shares
or (ii) any acquisition or purchase of all or (other than in the ordinary course
of business) any substantial portion of the assets of, or any equity interest
in, the Company or any Subsidiary or any business combination with the Company
or any Subsidiary or, subject to their fiduciary duties as directors of the
Company and as contemplated in the Merger Agreement, participate in any
negotiations regarding, or furnish to any person any information with respect
to, or otherwise cooperate in any way with, or assist or participate in or
facilitate or encourage, any effort or attempt by any person to do or seek any
of the foregoing. Each Stockholder has agreed immediately to cease and cause to
be terminated all discussions or negotiations, existing as of the date of the
Stockholders Agreement, of such Stockholder and his agents or other
representatives with any person conducted before the date of the Stockholders
Agreement with respect to any of the foregoing. Each Stockholder also has agreed
to notify Purchaser promptly if any such proposal or offer, or any inquiry or
contact with any person with respect thereto, is made.
11. Purpose of the Offer; Plans for the Company After the Offer and the
Merger.
Purpose of the Offer. The purpose of the Offer and the Merger is for Parent
to acquire control of, and the entire equity interest in, the Company. The
purpose of the Merger is for Parent to acquire all Shares not purchased pursuant
to the Offer. Upon consummation of the Merger, the Company will become an
indirect wholly owned subsidiary of Parent. The Offer is being made pursuant to
the Merger Agreement.
In the Merger Agreement, the Company has agreed to take all action necessary
to convene a meeting of its stockholders as soon as practicable after the
consummation of the Offer for the purpose of considering and taking action on
the Merger Agreement and the transactions contemplated thereby. Parent and
Purchaser have agreed that all Shares owned by them and their subsidiaries will
be voted in favor of the Merger Agreement and the transactions contemplated
thereby.
If Purchaser purchases Shares pursuant to the Offer, the Merger Agreement
provides that Purchaser will be entitled to designate representatives to serve
on the Board in proportion to Purchaser's ownership of Shares following such
purchase. See Section 10. Purchaser expects that such representation would
permit Purchaser to exert substantial influence over the Company's conduct of
its business and operations.
In the event that Purchaser shall have purchased all Shares validly tendered
and not withdrawn pursuant to the Offer and the requisite affirmative vote of
the stockholders of the Company to effect the Merger is not obtained, Parent,
Purchaser and the Company have agreed under the Merger Agreement that within
five business days after Parent or any of its subsidiaries or affiliates is no
longer subject to the restrictions set forth in Section 203, to use their
reasonable best efforts to take all necessary and appropriate action to cause
the Merger to become effective.
Appraisal Rights. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders will have certain
rights under Delaware Law to dissent and demand appraisal of, and to receive
payment in cash of the fair value of, their Shares. Such rights to dissent, if
the statutory procedures are complied with, could lead to a judicial
determination of the fair value of the Shares, as of the Effective Date
(excluding any element of value arising from the accomplishment or expectation
of the Merger), required to be paid in cash to such dissenting holders for their
Shares. In addition, such dissenting stockholders could be entitled to receive
payment of a fair rate of interest from the date of consummation of the Merger
on the amount determined to be the fair value of their Shares. In determining
the fair value of the Shares, the court is required to take into account all
relevant factors. Accordingly, such determination could be based upon
considerations other than, or in addition to, the market value of the Shares,
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including, among other things, asset values and earning capacity. In Weinberger
v. UOP, Inc., the Delaware Supreme Court stated, among other things, that "proof
of value by any techniques or methods which are generally considered acceptable
in the financial community and otherwise admissible in court" should be
considered in an appraisal proceeding. Therefore, the value so determined in any
appraisal proceeding could be the same, more or less than the purchase price per
Share in the Offer or the Merger Consideration.
In addition, several decisions by Delaware courts have held that, in certain
circumstances, a controlling stockholder of a company involved in a merger has a
fiduciary duty to other stockholders which requires that the merger be fair to
such other stockholders. In determining whether a merger is fair to minority
stockholders, Delaware courts have considered, among other things, the type and
amount of consideration to be received by the stockholders and whether there was
fair dealing among the parties. The Delaware Supreme Court stated in Weinberger
and Rabkin v. Philip A. Hunt Chemical Corp. that the remedy ordinarily available
to minority stockholders in a cash-out merger is the right to appraisal
described above. However, a damages remedy or injunctive relief may be available
if a merger is found to be the product of unfairness, including fraud,
misrepresentation or other misconduct.
The Commission has adopted Rule 13e-3 under the Exchange Act, which is
applicable to certain "going private" transactions and which may under certain
circumstances be applicable to the Merger or another business combination
following the purchase of Shares pursuant to the Offer in which Purchaser seeks
to acquire the remaining Shares not held by it. Purchaser believes, however,
that if the Merger is consummated within one year of the purchase of Shares
pursuant to the Offer, Rule 13e-3 will not be applicable to the Merger.
Purchaser believes that if the Merger is not consummated within one year of its
purchase of Shares pursuant to the Offer, Rule 13e-3 may be applicable to the
Merger. Rule 13e-3 requires, among other things, that certain financial
information concerning the Company and certain information relating to the
fairness of the proposed transaction and the consideration offered to minority
stockholders in such transaction be filed with the Commission and disclosed to
stockholders prior to consummation of the transaction.
Plans for the Company. It is currently expected that, following consummation
of the Offer, initially the business and operations of the Company will, except
as set forth in this Offer to Purchase, be continued by the Company
substantially as they are currently being conducted. Parent will continue to
evaluate the business and operations of the Company during the pendency of the
Offer and after the consummation of the Offer and the Merger, and will take such
actions as it deems appropriate under the circumstances then existing. Parent
intends to seek additional information about the Company during this period.
Thereafter, Parent intends to review such information as part of a comprehensive
review of the Company's business, operations, capitalization and management with
a view to maximizing the Company's potential in conjunction with Parent's
businesses. It is expected that the business and operations of the Company would
form an important part of Parent's future business plans.
Except as indicated in this Offer to Purchase, Parent does not have any
present plans or proposals which relate to or would result in an extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
involving the Company or any Subsidiary, a sale or transfer of a material amount
of assets of the Company or any Subsidiary or any material change in the
Company's capitalization or dividend policy or any other material changes in the
Company's corporate structure or business, or the composition of the Board or
the Company's management. If the required vote of unaffiliated shareholders is
not obtained pursuant to Section 203, Parent and its affiliates and associates
may be restricted from engaging in certain transactions falling under the
definition of a "business combination" in Section 203 until the expiration of
the Section 203 Period.
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12. Dividends and Distributions. The Merger Agreement provides that the
Company shall not, between the date of the Merger Agreement and the appointment
of Purchaser's designees to the Board, without the prior written consent of
Parent, (a) issue, sell, pledge, dispose of, grant, encumber, or authorize the
issuance, sale, pledge, disposition, grant or encumbrance of any shares of
capital stock of any class of the Company or any Subsidiary or any options,
warrants, convertible securities or other rights of any kind to acquire any
shares of such capital stock, or any other ownership interest (including,
without limitation, any phantom interest), of the Company or any Subsidiary
(except for the issuance of Shares issuable pursuant to Options outstanding on
the date of the Merger Agreement); (b) declare, set aside, make or pay any
dividend or other distribution, payable in cash, stock, property or otherwise,
with respect to any of its capital stock (except for such declarations, set
asides, dividends and other distributions made from any Subsidiary to the
Company) or (c) reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock. See Section
10. If, however, the Company should, during the pendency of the Offer, (i)
split, combine or otherwise change the Shares or its capitalization, (ii)
acquire or otherwise cause a reduction in the number of outstanding Shares or
(iii) issue or sell any additional Shares (other than pursuant to outstanding
options to purchase Shares), shares of any other class or series of capital
stock, other voting securities or any securities convertible into, or options,
rights, or warrants, conditional or otherwise, to acquire, any of the foregoing,
then, without prejudice to Purchaser's rights under Section 14, Purchaser may
(subject to the provisions of the Merger Agreement) make such adjustments to the
purchase price and other terms of the Offer (including the number and type of
securities to be purchased) as it deems appropriate to reflect such split,
combination or other change, acquisition, reduction, issuance or sale.
If, on or after January 25, 1995, the Company should declare or pay any
dividend on the Shares or make any other distribution (including the issuance of
additional shares of capital stock pursuant to a stock dividend or stock split,
the issuance of other securities or the issuance of rights for the purchase of
any securities) with respect to the Shares that is payable or distributable to
stockholders of record on a date prior to the transfer to the name of Purchaser
or its nominee or transferee on the Company's stock transfer records of the
Shares purchased pursuant to the Offer then, without prejudice to Purchaser's
rights under Section 14, (i) the purchase price per Share payable by Purchaser
pursuant to the Offer will be reduced (subject to the Merger Agreement) to the
extent any such dividend or distribution is payable in cash and (ii) any
non-cash dividend, distribution or right shall be received and held by the
tendering stockholder for the account of Purchaser and will be required to be
promptly remitted and transferred by each tendering stockholder to the
Depositary for the account of Purchaser, accompanied by appropriate
documentation of transfer. Pending such remittance and subject to applicable
law, Purchaser will be entitled to all the rights and privileges as owner of any
such non-cash dividend, distribution or right and may withhold the entire
purchase price or deduct from the purchase price the amount or value thereof, as
determined by Purchaser in its sole discretion.
13. Effect of the Offer on the Market for the Shares, Exchange Listing and
Exchange Act Registration. The purchase of Shares by Purchaser pursuant to the
Offer will reduce the number of Shares that might otherwise trade publicly and
will reduce the number of holders of Shares, which could adversely affect the
liquidity and market value of the remaining Shares held by the public.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the requirements of the NYSE for continued listing and
may be delisted from the NYSE and deregistered under Section 12(b) of the
Exchange Act. Parent intends to cause the delisting by the NYSE and
deregistration of the Shares following consummation of the Offer.
According to the NYSE's published guidelines, the NYSE would consider
delisting the Shares if, among other things, the number of record holders of at
least 100 Shares should fall below 1,200, the number of publicly held Shares
(exclusive of holdings of officers, directors and their families
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and other concentrated holdings of 10 percent or more ("NYSE Excluded
Holdings")) should fall below 600,000 or the aggregate market value of publicly
held Shares (exclusive of NYSE Excluded Holdings) should fall below $5,000,000.
The Company has advised Purchaser that, as of January 30, 1995, there were
61,780,548 Shares outstanding, held by approximately 2,508 holders of record.
If, as a result of the purchase of Shares pursuant to the Offer or otherwise,
the Shares no longer meet the requirements of the NYSE for continued listing and
the listing of the Shares is discontinued, the market for the Shares could be
adversely affected.
If the NYSE were to delist the Shares, it is possible that the Shares would
continue to trade on another securities exchange or in the over-the-counter
market and that price or other quotations would be reported by such exchange or
through the Nasdaq Stock Market ("Nasdaq") or other sources. The extent of the
public market therefor and the availability of such quotations would depend,
however, upon such factors as the number of stockholders and/or the aggregate
market value of such securities remaining at such time, the interest in
maintaining a market in the Shares on the part of securities firms, the possible
termination of registration under the Exchange Act as described below, and other
factors. Purchaser cannot predict whether the reduction in the number of Shares
that might otherwise trade publicly would have an adverse or beneficial effect
on the market price for or marketability of the Shares or whether it would cause
future market prices to be greater or less than the Merger Consideration.
The Shares are currently "margin securities", as such term is defined under
the rules of the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board"), which has the effect, among other things, of allowing banks to
extend credit on the collateral of such securities. Depending upon factors
similar to those described above regarding listing and market quotations,
following the Offer it is possible that the Shares might no longer constitute
"margin securities" for purposes of the margin regulations of the Federal
Reserve Board, in which event such Shares could no longer be used as collateral
for loans made by banks.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application by the Company to the Commission
if the Shares are not listed on a national securities exchange and there are
fewer than 300 record holders. The termination of the registration of the Shares
under the Exchange Act would substantially reduce the information required to be
furnished by the Company to holders of Shares and to the Commission and would
make certain provisions of the Exchange Act, such as the short-swing profit
recovery provisions of Section 16(b), the requirement of furnishing a proxy
statement in connection with stockholders' meetings and the requirements of Rule
13e-3 under the Exchange Act with respect to "going private" transactions, no
longer applicable to the Shares. In addition, "affiliates" of the Company and
persons holding "restricted securities" of the Company may be deprived of the
ability to dispose of such securities pursuant to Rule 144 promulgated under the
Securities Act of 1933, as amended. If registration of the Shares under the
Exchange Act were terminated, the Shares would no longer be "margin securities"
or be eligible for Nasdaq reporting. Purchaser currently intends to seek to
cause the Company to terminate the registration of the Shares under the Exchange
Act as soon after consummation of the Offer as the requirements for termination
of registration are met.
14. Certain Conditions of the Offer. Notwithstanding any other provision of
the Offer, Purchaser shall not be required to accept for payment or pay for any
Shares tendered pursuant to the Offer, and may terminate or amend the Offer and
may postpone the acceptance for payment of and payment for Shares tendered, if
(i) the Minimum Condition shall not have been satisfied, (ii) any applicable
waiting period under the HSR Act shall not have expired or been terminated prior
to the expiration of the Offer after 30 days from the commencement of the Offer
or (iii) at any time on or
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after the date of the Merger Agreement, and prior to the acceptance for payment
of Shares, any of the following conditions shall exist:
(a) there shall have been instituted or be pending any action or
proceeding brought by any governmental, administrative or regulatory
authority or agency, domestic or foreign, before any court or governmental,
administrative or regulatory authority or agency, domestic or foreign, (i)
challenging or seeking to make illegal, materially delay or otherwise
directly or indirectly restrain or prohibit or make materially more costly
the making of the Offer, the acceptance for payment of, or payment for, any
Shares by Parent, Purchaser or any other affiliate of Parent pursuant to the
Offer, or the consummation of any other transaction contemplated by the
Merger Agreement, or seeking to obtain material damages in connection with
any transaction contemplated by the Merger Agreement; (ii) seeking to
prohibit or limit materially the ownership or operation by the Company,
Parent or any of their subsidiaries of all or any material portion of the
business or assets of the Company, Parent or any of their subsidiaries, or
to compel the Company, Parent or any of their subsidiaries to dispose of or
hold separate all or any material portion of the business or assets of the
Company, Parent or any of their subsidiaries, as a result of the
transactions contemplated by the Merger Agreement; (iii) seeking to impose
or confirm limitations on the ability of Parent, Purchaser or any other
affiliate of Parent to exercise effectively full rights of ownership of any
Shares, including, without limitation, the right to vote any Shares acquired
by Purchaser pursuant to the Offer or otherwise on all matters properly
presented to the Company's stockholders, including, without limitation, the
approval and adoption of the Merger Agreement and the transactions
contemplated thereby; or (iv) seeking to require divestiture by Parent,
Purchaser or any other affiliate of Parent of any Shares; other than, in
each of the foregoing cases under this clause (a), such actions or
proceedings which result, directly or indirectly, from the application of
Section 203 of Delaware Law;
(b) there shall have been issued any injunction, order or decree by any
court or governmental, administrative or regulatory authority or agency,
domestic or foreign, resulting from any action or proceeding brought by any
person other than any governmental, administrative or regulatory authority
or agency, domestic or foreign, which (i) restrains or prohibits the making
of the Offer or the consummation of any other transaction contemplated by
the Merger Agreement, (ii) prohibits or limits ownership or operation by the
Company, Parent or Purchaser of all or any material portion of the business
or assets of the Company, taken as a whole, Parent or any of their
subsidiaries, or compels the Company, Parent or any of their subsidiaries to
dispose of or hold separate all or any material portion of the business or
assets of the Company, Parent or any of their subsidiaries, in each case as
a result of the transactions contemplated by the Merger Agreement; (iii)
imposes limitations on the ability of Parent or Purchaser to exercise
effectively full rights of ownership of any Shares, including, without
limitation, the right to vote any Shares acquired by Purchaser pursuant to
the Offer, or otherwise on all matters properly presented to the Company's
stockholders, including, without limitation, the approval and adoption of
the Merger Agreement and the transactions contemplated by the Merger
Agreement; (iv) requires divestiture by Parent or Purchaser of any Shares;
other than, in each of the foregoing cases under this clause (b) such
injunctions, orders or decrees which result, directly or indirectly, from
the application of Section 203 of Delaware Law;
(c) there shall have been any action taken, or any statute, rule,
regulation, order or injunction enacted, entered, enforced, promulgated,
amended, issued or deemed applicable to (i) Parent, the Company or any
subsidiary or affiliate of Parent or the Company or (ii) any transaction
contemplated by the Merger Agreement, by any legislative body, court,
government or governmental, administrative or regulatory authority or
agency, domestic or foreign, in the case of both (i) and (ii) other than (A)
the routine application of the waiting period
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provisions of the HSR Act to the Offer, the Stockholders Agreement or the
Merger, and (B) by the application of Section 203 of Delaware Law, in each
case which results in any of the consequences referred to in clauses (i)
through (iv) of paragraph (b) above;
(d) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities of (x) the Company on the
New York Stock Exchange or (y) Parent on the London Stock Exchange, (ii) any
decline, measured from the date of the Merger Agreement, in the Standard &
Poor's 500 Index or FTSE 100 Index by an amount in excess of 20 percent,
(iii) a currency moratorium on the exchange markets in London or New York
City, (iv) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States or the United Kingdom, (v)
any limitation (whether or not mandatory) by any government or governmental,
administrative or regulatory authority or agency, domestic or foreign, on
the extension of credit by banks or other lending institutions, (vi) a
commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United States or
the United Kingdom or (vii) in the case of any of the foregoing existing on
the date hereof, a material acceleration or worsening thereof;
(e) (i) it shall have been publicly disclosed or Purchaser shall have
otherwise learned that beneficial ownership (determined for the purposes of
this paragraph as set forth in Rule 13d-3 promulgated under the Exchange
Act) of 15 percent or more of the then outstanding Shares has been acquired
by any person, other than Parent or any of its affiliates or (ii) (A) the
Board shall have withdrawn or modified in a manner adverse to Parent or
Purchaser the approval or recommendation of the Offer, the Merger or the
Merger Agreement or approved or recommended any takeover proposal or any
other acquisition of Shares other than the Offer and the Merger or (B) the
Board shall have resolved to do any of the foregoing;
(f) any representation and warranty of the Company in the Merger
Agreement shall not be true and correct and the failure to be true and
correct has an effect that, when taken together with all other adverse
changes or effects, is or is reasonably likely to be materially adverse to
the business, operations, properties, condition (financial or otherwise),
assets or liabilities (including, without limitation, contingent
liabilities) of the Company and the Subsidiaries taken as a whole (a
"Material Adverse Effect"); provided, however, in determining whether a
Material Adverse Effect has occurred, any qualification as to materiality
contained in any such representation and warranty shall be deemed not to
apply;
(g) the Company shall have failed to perform in any material respect any
material obligation or to comply in any material respect with any material
agreement or covenant of the Company to be performed or complied with by it
under the Merger Agreement;
(h) Parent shall not have received the requisite affirmative vote of the
holders of ordinary shares of Parent with respect to the approval of the
transactions contemplated by the Merger Agreement at the Parent Stockholders
Meeting;
(i) the Merger Agreement shall have been terminated in accordance with
its terms; or
(j) Purchaser and the Company shall have agreed that Purchaser shall
terminate the Offer or postpone the acceptance for payment of or payment for
Shares thereunder.
The foregoing conditions are for the sole benefit of Purchaser and Parent
and may be asserted by Purchaser or Parent regardless of the circumstances
giving rise to any such condition or may be waived by Purchaser or Parent in
whole or in part at any time and from time to time in their sole discretion. The
failure by Parent or Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right; the waiver of any such
right with respect to particular facts and other circumstances shall not be
deemed a waiver with respect to any other facts and circumstances; and each such
right shall be deemed an ongoing right that may be asserted at any time and from
time to time.
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15. Certain Legal Matters and Regulatory Approvals.
General. Based upon its examination of publicly available information with
respect to the Company and the review of certain information furnished by the
Company to Parent and discussions of representatives of Parent with
representatives of the Company during Parent's investigation of the Company (see
Section 10), neither Purchaser nor Parent is aware of any license or other
regulatory permit that appears to be material to the business of the Company and
the Subsidiaries, taken as a whole, which might be adversely affected by the
acquisition of Shares by Purchaser pursuant to the Offer or, except as set forth
below, of any approval or other action by any domestic (federal or state) or
foreign governmental, administrative or regulatory authority or agency which
would be required prior to the acquisition of Shares by Purchaser pursuant to
the Offer. Should any such approval or other action be required, it is
Purchaser's present intention to seek such approval or action. Purchaser does
not currently intend, however, to delay the purchase of Shares tendered pursuant
to the Offer pending the outcome of any such action or the receipt of any such
approval (subject to Purchaser's right to decline to purchase Shares if any of
the conditions in Section 14 shall have occurred). There can be no assurance
that any such approval or other action, if needed, would be obtained without
substantial conditions or that adverse consequences might not result to the
business of the Company, Purchaser or Parent or that certain parts of the
businesses of the Company, Purchaser or Parent might not have to be disposed of
or held separate or other substantial conditions complied with in order to
obtain such approval or other action or in the event that such approval was not
obtained or such other action was not taken. Purchaser's obligation under the
Offer to accept for payment and pay for Shares is subject to certain conditions,
including conditions relating to the legal matters discussed in this Section 15.
See Section 14.
State Takeover Laws. Under Delaware Law, the approval of the Board and the
affirmative vote of the holders of a majority of the outstanding Shares are
ordinarily all that would be required to approve and adopt the Merger. Parent
and Purchaser, however, are considered to be "interested stockholders" of the
Company for purposes of Section 203 of Delaware Law ("Section 203") as a result
of a subsidiary of Parent becoming on August 19, 1993 the beneficial owner, for
purposes of Section 203, of more than 15 percent but less than 85 percent of the
Shares, without the prior approval of the Board. Therefore, Purchaser is
prohibited from consummating the Merger until August 20, 1996, three years after
the date it became an interested stockholder (the "Section 203 Period"), unless
the Merger is approved by the affirmative vote of the holders of at least
two-thirds of the outstanding Shares that are not owned by Parent or Purchaser
or any of their affiliates or associates. The Board of Directors of the Company
has unanimously approved and adopted the Merger Agreement and the Merger, and,
in addition to complying with the requirements of Section 203, the only
remaining required corporate action of the Company is the approval of the Merger
Agreement and the Merger by the affirmative vote of the holders of a majority of
the Shares. Accordingly, if the Minimum Condition is satisfied and after
compliance with Section 203 or expiration of the Section 203 Period, Purchaser
will have sufficient voting power to cause the approval and adoption of the
Merger Agreement and the transactions contemplated thereby without the
affirmative vote of any other stockholder.
BECAUSE OF THE POSSIBILITY THAT THE VOTE REQUIRED TO APPROVE THE MERGER
UNDER SECTION 203 MAY NOT BE OBTAINED AT THE STOCKHOLDERS' MEETING AFTER
CONSUMMATION OF THE OFFER, THERE CAN BE NO ASSURANCE THAT THE MERGER WILL OCCUR
BEFORE EXPIRATION OF THE SECTION 203 PERIOD. AS A CONSEQUENCE, THERE CAN BE NO
ASSURANCE THAT STOCKHOLDERS WHO FAIL TO TENDER SHARES PURSUANT TO THE OFFER WILL
RECEIVE THE MERGER CONSIDERATION BEFORE SUCH DATE.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In Edgar v. MITE Corp., the Supreme Court of
the United States invalidated on constitutional grounds the Illinois Business
Takeover Statute, which,
43
<PAGE>
as a matter of state securities law, made takeovers of corporations meeting
certain requirements more difficult. However, in 1987 in CTS Corp. v. Dynamics
Corp. of America, the Supreme Court held that the State of Indiana could, as a
matter of corporate law and, in particular, with respect to those aspects of
corporate law concerning corporate governance, constitutionally disqualify a
potential acquiror from voting on the affairs of a target corporation without
the prior approval of the remaining stockholders. The state law before the
Supreme Court was by its terms applicable only to corporations that had a
substantial number of stockholders in the state and were incorporated there.
Subsequently, in TLX Acquisition Corp. v. Telex Corp., a federal district court
in Oklahoma ruled that certain Oklahoma corporate governance statutes were
unconstitutional insofar as they applied to corporations incorporated outside
Oklahoma because they could subject such corporations to inconsistent
regulations. Similarly, in Tyson Foods, Inc. v. McReynolds, a federal district
court in Tennessee ruled that four Tennessee takeover statutes were
unconstitutional as applied to corporations incorporated outside Tennessee. This
decision was affirmed by the United States Court of Appeals for the Sixth
Circuit. In December 1988, a federal district court in Florida held in Grand
Metropolitan PLC v. Butterworth that the provisions of the Florida Affiliated
Transactions Act and the Florida Control Share Acquisition Act were
unconstitutional as applied to corporations incorporated outside of Florida.
The Company, directly or through subsidiaries, conducts business in a number
of states throughout the United States, some of which have enacted takeover laws
such as those described above. Purchaser does not know whether any of these laws
will, by their terms, apply to the Offer or the Merger and has not necessarily
complied with any such laws. Should any person seek to apply
any state takeover law, Purchaser will take such action as then appears
desirable, which may include challenging the validity or applicability of any
such statute in appropriate court proceedings. In the event it is asserted that
one or more state takeover laws is applicable to the Offer or the Merger, and an
appropriate court does not determine that it is inapplicable or invalid as
applied to the Offer, Purchaser might be required to file certain information
with, or receive approvals from, the relevant state authorities. In addition, if
enjoined, Purchaser might be unable to accept for payment any Shares tendered
pursuant to the Offer, or be delayed in continuing or consummating the Offer and
the Merger. In such case, Purchaser may not be obligated to accept for payment
any Shares tendered. See Section 14.
Antitrust. Under the HSR Act and the rules that have been promulgated
thereunder by the FTC, certain acquisition transactions may not be consummated
unless certain information has been furnished to the Antitrust Division and the
FTC and certain waiting period requirements have been satisfied. The acquisition
of Shares by Purchaser pursuant to the Offer is subject to such requirements.
See Section 2.
Pursuant to the HSR Act, on the date of this Offer to Purchase, Parent
anticipates filing a Pre merger Notification and Report Form in connection with
the purchase of Shares pursuant to the Offer with the Antitrust Division and the
FTC. Under the provisions of the HSR Act applicable to the Offer, the purchase
of Shares pursuant to the Offer may not be consummated until the expiration of a
15-calendar day waiting period following the filing by Parent. Accordingly, it
is anticipated that the waiting period under the HSR Act applicable to the
purchase of Shares pursuant to the Offer will expire at 11:59 p.m., New York
City time, on February 16, 1995, unless such waiting period is earlier
terminated by the FTC and the Antitrust Division or extended by a request from
the FTC or the Antitrust Division for additional information or documentary
material prior to the expiration of the waiting period. Pursuant to the HSR Act,
Parent will request early termination of the waiting period applicable to the
Offer. There can be no assurance, however, that the 15-day HSR Act waiting
period will be terminated early. If either the FTC or the Antitrust Division
were to request additional information or documentary material from Parent with
respect to the Offer, the waiting period with respect to the Offer would expire
at 11:59 p.m., New York City time, on the tenth calendar day after the date of
substantial compliance by Parent with such request. Thereafter, the waiting
period
44
<PAGE>
could be extended only by court order. If the acquisition of Shares is delayed
pursuant to a request by the FTC or the Antitrust Division for additional
information or documentary material pursuant to the HSR Act, the Offer may, but
need not, be extended and, in any event, the purchase of and payment for Shares
will be deferred until 10 days after the request is substantially complied with,
unless the extended period expires on or before the date when the initial 15-day
period would otherwise have expired, or unless the waiting period is sooner
terminated by the FTC and the Antitrust Division. Only one extension of such
waiting period pursuant to a request for additional information is authorized by
the HSR Act and the rules promulgated thereunder, except by court order. Any
such extension of the waiting period will not give rise to any withdrawal rights
not otherwise provided for by applicable law. See Section 4. It is a condition
to the Offer that the waiting period applicable under the HSR Act to the Offer
expire or be terminated. See Section 2 and Section 14.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
Purchaser pursuant to the Offer. At any time before or after the purchase of
Shares pursuant to the Offer by Purchaser, the FTC or the Antitrust Division
could take such action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin the purchase of
Shares pursuant to the Offer or seeking the divestiture of Shares purchased by
Purchaser or the divestiture of substantial assets of Parent, the Company or
their respective subsidiaries. Private parties and state attorneys general may
also bring legal action under federal or state antitrust laws under certain
circumstances. Based upon an examination of information available to Parent
relating to the businesses in which Parent, the Company and their respective
subsidiaries are engaged, Parent and Purchaser believe that the Offer will not
violate the antitrust laws. Nevertheless, there can be no assurance that a
challenge to the Offer on antitrust grounds will not be made or, if such a
challenge is made, what the result would be. See Section 14 for certain
conditions to the Offer, including conditions with respect to litigation.
Legal Proceedings. On January 23, 1995, three stockholders of the Company
each filed purported class action lawsuits, Tuchman v. Albers, Civ. Action No.
13997, Balan v. Dr Pepper/ Seven-Up Companies, Inc., Civ. Action No. 13995, and
Shaev v. Dr Pepper/Seven-Up Companies, Inc., Civ. Action No. 13996, in the Court
of Chancery of the State of Delaware against the Company and certain of its
directors in connection with the then proposed Merger Agreement and the
transactions contemplated thereby. The lawsuits allege, inter alia, that the
consideration to be paid is inadequate and that the defendants, by failing
sufficiently to explore third-party interest in the Company, have breached their
fiduciary duty to maximize stockholder value. The lawsuits seek, among other
things, an injunction requiring the Company to explore third-party alternatives
to the Offer, a declaration of the invalidity either of the Rights Plan or of
any action taken by the Company to prevent the terms thereof from applying to
the Merger Agreement and the transactions contemplated thereby, and unspecified
damages and attorney's fees. The Company has advised Parent and Purchaser that
it believes that the purported class action lawsuits are without merit and that
it intends to defend against the lawsuits vigorously.
The complaint in King v. Dr Pepper/Seven-Up Companies, et al., filed on
October 26, 1994 in the U.S. District Court for the Northern District of Texas,
Dallas Division (the "Court"), alleges, among other things, that the defendants
knowingly or recklessly engaged in a plan to depress the market price of the
Company's securities by misstating and concealing material information
concerning the true status of merger discussions between Parent and the Company,
thereby violating Section 10(b) and Rule 10b-5 under the Exchange Act. In
addition, the complaint alleges that John R. Albers violated Section 20(a) of
the Exchange Act by failing to disseminate truthful information with respect to
the Company's business. Relief requested includes unspecified damages and
expenses (including attorneys' fees). As a result of defendants' motion to
dismiss based on the plaintiff's failure to plead fraud with specificity and
failure to state a claim for securities
45
<PAGE>
fraud, on January 24, 1995, the Court issued an Order to File Amended Complaint
(the "Order") Under the Order the plaintiff has 20 days in which to re-file her
complaint. The defendants believe the complaint is without merit and intend to
defend the case vigorously.
Another class action suit, styled Sarnoff v. Dr Pepper/Seven-Up Companies et
al. was filed on October 28, 1994 in the District Court for the 44th Judicial
District of Texas in Dallas County, Texas wherein the plaintiff alleges, among
other things, that the defendants breached their fiduciary duties to the
Company's stockholders (i) in order to entrench themselves in office by
maintaining the Rights Agreement, which chilled the marketplace so that they
could negotiate only with Parent in order to receive generous severance
packages and (ii) by reasons of their refusal to negotiate with other
potential acquirors on the same playing field as they created for Parent. The
defendants believe the complaint is without merit and intend to defend the
case vigorously.
16. Fees and Expenses. Except as set forth below, Purchaser will not pay any
fees or commissions to any broker, dealer or other person for soliciting tenders
of Shares pursuant to the Offer.
Goldman Sachs and KBNA are acting as Dealer Managers in connection with the
Offer and have provided certain financial advisory services to Parent in
connection with the acquisition of the Company. Parent has agreed to pay an
affiliate of Goldman Sachs a fee of $7,750,000 which is payable upon completion
of one or more transactions resulting in Parent's ownership of more than 90
percent of the Company's Common Stock. Parent has agreed to pay Kleinwort U.K.
and KBNA (together "KB") a fee of $888,750 promptly upon the announcement of the
Offer. In addition, KB will be entitled to an additional $2,666,250 upon
completion of one or more transactions resulting in Parent's ownership of more
than 50 percent of the Company's Common Stock. KB will also receive and retain
commissions amounting to $4,168,669 in connection with the Rights Offering and
the UESDA as described in Section 9. Neither Goldman Sachs nor KB is entitled to
any separate fee for its services as a Dealer Manager. Parent has also agreed to
reimburse Goldman Sachs and KB for all reasonable out-of-pocket expenses
incurred by them, including the reasonable fees and expenses of legal counsel,
and to indemnify them against certain liabilities and expenses in connection
with their engagement, including certain liabilities under the federal
securities laws.
Purchaser and Parent have retained Georgeson & Company Inc., as the
Information Agent, and First Chicago Trust Company of New York, as the
Depositary, in connection with the Offer. The Information Agent may contact
holders of Shares by mail, telephone, telex, telecopy, telegraph and personal
interview and may request banks, brokers, dealers and other nominee stockholders
to forward materials relating to the Offer to beneficial owners.
As compensation for acting as Information Agent in connection with the
Offer, Georgeson & Company will be paid a fee of $15,000 and will also be
reimbursed for certain out-of-pocket expenses and may be indemnified against
certain liabilities and expenses in connection with the Offer, including certain
liabilities under the federal securities laws. Purchaser will pay the Depositary
reasonable and customary compensation for its services in connection with the
Offer, plus reimbursement for out-of-pocket expenses, and will indemnify the
Depositary against certain liabilities and expenses in connection therewith,
including under federal securities laws. Brokers, dealers, commercial banks and
trust companies will be reimbursed by Purchaser for customary handling and
mailing expenses incurred by them in forwarding material to their customers.
17. Miscellaneous. The Offer is being made solely by this Offer to Purchase
and the related Letter of Transmittal and is being made to all holders of
Shares. Purchaser is not aware of any jurisdiction where the making of the Offer
is prohibited by any administrative or judicial action pursuant to any valid
state statute. If Purchaser becomes aware of any valid state statute prohibiting
the making of the Offer or the acceptance of Shares pursuant thereto, Purchaser
will make a good faith effort to comply with any such state statute. If, after
such good faith effort,
46
<PAGE>
Purchaser cannot comply with any such state statute, the Offer will not be made
to (nor will tenders be accepted from or on behalf of) the holders of Shares in
such state. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of Purchaser by the Dealer Managers or by one or
more registered brokers or dealers licensed under the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER, PARENT OR THE COMPANY NOT CONTAINED IN
THIS OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
Pursuant to Rule 14d-3 of the General Rules and Regulations under the
Exchange Act, Parent and Purchaser have filed with the Commission the Schedule
14D-1, together with exhibits, furnishing certain additional information with
respect to the Offer. The Schedule 14D-1 and any amendments thereto, including
exhibits, may be inspected at, and copies may be obtained from, the same places
and in the same manner as set forth in Section 7 (except that they will not be
available at the regional offices of the Commission).
DP/SU ACQUISITION INC.
February 1, 1995
47
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND PURCHASER
1. Directors and Executive Officers of Parent. The following table sets
forth the name, current business address, citizenship and present principal
occupation or employment, and material occupations, positions, offices or
employments and business addresses thereof for the past five years of each
director and executive officer of Parent. Unless otherwise indicated, the
current business address of each person is Cadbury Schweppes plc, 25 Berkeley
Square, London W1X 6HT, England. Unless otherwise indicated, all other addresses
are within England. Unless otherwise indicated, each such person is a citizen of
the United Kingdom and has held his or her present position as set forth below
for the past five years. Unless otherwise indicated, each occupation set forth
opposite an individual's name refers to employment with Parent.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS
HELD DURING THE PAST FIVE
NAME YEARS AND BUSINESS ADDRESSES THEREOF
- ------------------------------- ----------------------------------------------------------
<S> <C>
N.D. Cadbury (54).............. Executive Chairman since May 1993; Executive Director and
Group Chief Executive from January 1984 to May 1993;
Joint Deputy Chairman since January 1995, Non-Executive
Director of Guinness plc since September 1991, Park
Royal Brewery, London NW10; Non-Executive Director and
Chairman since July 1994, Non-Executive Director from
November 1990 to July 1994 of The Economist Newspaper
Ltd, 25 St James's Street, London SW1A 1HG.
T.O. Hutchison (64)............ Non-Executive Director and Deputy Chairman since May 1992,
Non-Executive Director from January 1986 to May 1992;
Deputy Governor of Bank of Scotland since September
1991, Director since September 1985, 38 Threadneedle
Street, London EC2P 2EH; Director of AMP Asset
Management since October 1991, 55 Moorgate, London EC2R
6PA; Non-Executive Director of Bank of Wales since June
1993, Kingsway, Cardiff, CF1 4YB, Wales; Director of
Hammerson plc since December 1991, 100 Park Lane, London
W1Y 3AL; Non-Executive Director of Enterprise Oil plc
from February 1987 to September 1990, Grand Buildings,
The Strand, London WC2N 5HR; Director of ICI plc from
July 1985 to December 1991, 9 Millbank, London SW1P 3JF;
Director of Impkemix Investments Pty from July 1985 to
February 1991, 1 Nicholson Street, Melbourne, Victoria
3001, Australia; Director of ICI Australia Ltd from July
1985 to February 1991, 1 Nicholson Street, Melbourne,
Victoria 3001, Australia.
D.G. Wellings (54)............. Executive Director and Group Chief Executive since May
1993, Executive Director from March 1989 to May 1993;
Managing Director, Confectionery Stream from March 1989
to May 1993, PO Box 12, Bournville Lane, Bournville,
Birmingham B30 2LU; Non-Executive Director of Signet
Group plc since August 1992, 15 Stratton Street, London
W1X 5FD.
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS
HELD DURING THE PAST FIVE
NAME YEARS AND BUSINESS ADDRESSES THEREOF
- ------------------------------- ----------------------------------------------------------
<S> <C>
I.F.H. Davison (63)............ Non-Executive Director since May 1992; Chairman of
Storehouse plc since July 1988, Marylebone House, 129-
137 Marylebone Road, London NW1 5QD; Chairman of
McDonnell Informations Systems Group plc since May 1993,
Maylands Park South, Boundary Way, Hemel Hempstead,
Hertfordshire HP2 7HU; Chairman of The National Mortgage
Bank plc since February 1992, Norwich House, 45 Poplar
Road, Solihull B91 3AW; Director of Chloride Group plc
since August 1988, 15 Wilton Road, London SW1V 1LT;
Director of Ciba-Geigy plc since July 1991, Hulley Road,
Macclesfield, Cheshire SK10 2NX; Director of Credit
Lyonnais Capital Markets Limited since September 1988,
Broadwalk House, 5 Appold Street, London EC4A 2DA;
Director of Hemming Publishing Limited since June 1990,
32 Vauxhall Bridge, London SW1V 2SS; Director of London
School of Economics and Political Science since October
1982, Houghton Street, London WC2A 2BR; Director of
Alexanders Discount plc from January 1989 to September
1991, Broadwalk House, 5 Appold Street, London EC4A 2DA;
Chairman of Charterail Ltd from October 1991 to November
1992, Charter House, Brent Terrace, Cricklewood, London
NW2 1LF; Director of Conran Design Pacific Ltd from
April 1989 to September 1991, California Tower, 30-32
D'Aguilar Street, Central, Hong Kong; Director of J&J
Securities from May 1992 to June 1993, 4 Marlborough
Studios, 12a Finchley Road, St John's Wood, London NW8
6EB; Director of L&C Unit Trust Management from March
1990 to September 1991, Broadwalk House, 5 Appold
Street, London EC4A 2DA; Director of Laing & Cruickshank
from January 1989 to September 1991, Broadwalk House, 5
Appold Street, London EC4A 2DA; Director of Newspaper
Publishing plc from April 1986 to March 1994, 40 City
Road, London EC1; Director of CL E-S plc from January
1988 to May 1990, Broadwalk House, 5 Appold Street,
London EC4A 2DA; Director of CL Global Partners
Securities Corporation from December 1988 to September
1991, Broadwalk House, 5 Appold Street, London EC4A 2DA;
Director of Core Nominees Limited from November 1989 to
September 1991, Broadwalk House, 5 Appold Street, London
EC4A 2DA; Director of Credit Lyonnais Euro-Securities
Ltd from January 1989 to September 1991, Broadwalk
House, 5 Appold Street, London EC4A 2DA; Director of
Credit Lyonnais Property (Broadwalk) Ltd from September
1988 to December 1989, Broadwalk House, 5 Appold Street,
London EC4A 2DA; Director of Credit Lyonnais Rouse
Limited from January 1989 to September 1991, Broadwalk
House, 5 Appold Street, London EC4A 2DA; Chairman of
Credit Lyonnais Securities Limited from April 1989 to
September 1991, Broadwalk House, 5 Appold Street, London
EC4A 2DA; Director of Waiting Nominees Limited from
November 1989 to September 1991, Broadwalk House, 5
Appold Street, London EC4A 2DA.
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS
HELD DURING THE PAST FIVE
NAME YEARS AND BUSINESS ADDRESSES THEREOF
- ------------------------------- ----------------------------------------------------------
<S> <C>
F.B. Humer (48)*............... Non-Executive Director since June 1994; Director and Chief
Operating Director of Glaxo Holdings Plc from July 1989
to December 1994, Lansdowne House, Berkeley Square,
London W1X 6BQ.
D. Jinks (59).................. Executive Director since January 1995, Executive Director
and Group Finance Director from October 1990 to January
1995, Finance Director, Operations and Control from
November 1986 to October 1990; Non-Executive Director of
Royal Doulton plc since November 1993, Minton House,
London Road, Stoke-on-Trent ST4 7QD; Alternate Director
of Camelot Group plc from March 1994 to December 1994,
Tolpits Lane, Watford WD1 8RN.
D.J. Kappler (47).............. Executive Director and Group Finance Director since
January 1995, Director, Corporate Finance from January
1994 to December 1994, Finance Director, Confectionery
Stream, March 1991 to January 1994; Finance Director of
Cadbury Limited, from January 1990 to March 1991, PO Box
12, Bournville Lane, Bournville, Birmingham B30 2LU;
Alternate Director of Camelot Group plc since January
1995, Tolpits Lane, Watford WD1 8RN.
R.C. Stradwick** (61).......... Executive Director and Group Human Resources Director
since September 1991; Personnel Director of Cadbury
Schwepps Pty Limited from October 1977 to September
1991, Cadbury Schweppes House, 636 St Kilda Road,
Melbourne, Victoria 3004, Australia.
J.M. Sunderland (49)........... Executive Director and Managing Director, Confectionery
Stream since May 1993; Managing Director of Trebor
Bassett Limited from January 1990 to May 1993, Hertford
Place, Denham Way, Maple Cross, Hertfordshire WD3 2XB.
F.J. Swan** (54)............... Executive Director and Managing Director, Beverages Stream
since August 1991; Chief Executive Officer, Cadbury
Schweppes Australia Ltd from March 1988 to August 1991,
Cadbury Schweppes House, 636 St Kilda Road, Melbourne,
Victoria 3004, Australia.
Mrs. A.M. Vinton (47).......... Non-Executive Director since March 1991; Director of
Courtaulds Textiles plc since May 1993, 13-14 Margaret
Street, London W1A 3DA; Director of Covent Garden Market
Authority since January 1, 1992, Covent House, New
Covent Market, London SW8 5NX; Director of Kiki
McDonough Limited since October 1990, 77 Walton Street,
London SW8 5NX; Director of Marie Curie Limited, 28
Belgrave Square, London SW1X 8QG; Joint Chairman of the
Reject Shop plc from July 1990 to March 1994, 15
Townmead Road, London SW6 2QL; Non-Executive Deputy
Chairman of Upton & Southern Holdings plc from March
1994 to May 1994, 175 Linthorpe Road, Middlesborough,
Cleveland, TS1 4AJ.
</TABLE>
- ------------
* Citizen of Switzerland
** Citizen of Australia
I-3
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS
HELD DURING THE PAST FIVE
NAME YEARS AND BUSINESS ADDRESSES THEREOF
- ------------------------------- ----------------------------------------------------------
<S> <C>
G.H. Waddell (57).............. Non-executive Director since January 1988; Chairman,
Fairway Group plc, 37-41 St John Street, London EC1M
4ET; Chairman of Gartmore Scotland Investment Trust plc,
since July 1991, Charles Oakley House, 125 West Regent
Street, Glasgow G2 2SG Scotland; Non-executive Director
of London and Strathclyde Trust plc since December 1988,
Gartmore House, 16-18 Monument Street, London EC3R 8QQ;
Chairman of the Mersey Docks Harbour Company since April
1993, Port of Liverpool Building, Pier Head, Liverpool
L3 1BZ; Chairman of Ryan Group Limited since February
1991, Alexandra Gate, Fford, Pengam, Cardiff Wales;
Chairman of Shanks & McEwan Group plc since October
1992, 22 Woodside Place, Glasgow G3 7QY, Scotland;
Director of The Scottish National Trust plc since May
1988, 125 West Regent Street, Glasgow G2 2SG, Scotland;
Director of Tor Investment Trust plc since August 1992,
107 Cheapside, London EC2V 6DV.
Sir John Whitehead (61)........ Non-executive Director since May 1993; Senior Advisor to
Morgan Grenfell Co Limited since November 1992, 23 Great
Winchester Street, London EC2P 2AX; British Ambassador
to Japan from November 1986 to June 1992, Foreign and
Commonwealth Office, Whitehall, London SW1 2AL; Director
of Morgan Grenfell Trustee Services Ltd since July 1993,
23 Great Winchester Street, London EC2P 2AX; Director of
Serco Group plc since October 1994, Serco House, Hayes
Road, Southall, Middlesex UB2 SNJ.
D.R. Williams (56)............. Executive Director and Managing Director Coca-Cola
Schweppes Beverages Limited since January 1986. Charter
Place, Vine Street, Uxbridge, Middlesex UB8 1E2;
Director of Camelot Group plc since February 1994,
Tolpits Lane, London WD1 8RN; Non-Executive Director of
Ladbroke Group plc since February 1994, Chancel House,
Neasden Lane, London NW10 2XE.
M.A.C. Clark*** (47)........... Group Secretary and Chief Legal Officer since May 1988.
</TABLE>
- ------------
*** Citizen of the United States of America
2. Directors and Executive Officers of Purchaser. The following table sets
forth the name, current business address, citizenship, position with Purchaser
and present principal occupation or employment, and material occupations,
positions, offices or employments and business addresses thereof for the past
five years of each director and executive officer of Purchaser. Unless otherwise
indicated, the current business address of each person is CBI Holdings, Inc., 6
High Ridge Park, Stamford, Connecticut 06905, USA. Each such person is a citizen
of the United States of America,
I-4
<PAGE>
and, unless otherwise indicated, each occupation set forth opposite an
individual's name refers to employment with CBI Holdings Inc.
<TABLE>
<CAPTION>
POSITION WITH PURCHASER;
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT; MATERIAL POSITIONS
HELD DURING THE PAST FIVE
NAME YEARS AND BUSINESS ADDRESSES THEREOF
- ------------------------------- ----------------------------------------------------------
<S> <C>
John F. Brock (46)............. President and Director of Purchaser; President, Cadbury
Beverages North America, 6 High Ridge Park, Stamford,
Connecticut 06905; President, Cadbury Beverages Europe,
28 Clarendon Road, Watford, England, June 1992 to July
1993; President, Cadbury Beverages International, High
Ridge Park, Stamford, CT 06905, September 1990 to June
1992; Executive Vice President, September 1987 to
September 1990.
Henry A. Udow (37)............. Vice President, General Counsel and Secretary and Director
of Purchaser; Legal Director of Beverages Stream of
Cadbury Schweppes plc, 25 Berkeley Square, London W1X
6HT, England, February 1994 to present; Vice President,
General Counsel and Secretary of Cadbury Beverages Inc,
September 1991 to January 1994; Vice President, Division
Counsel and Assistant Secretary, September 1990 to
September 1991; Division Counsel, September 1987 to
September 1990.
David A. Gerics (36)........... Vice President, Finance and Director of Purchaser; Vice
President, Finance, Cadbury Beverages North America, 6
High Ridge Park, Stamford, Connecticut 06905; Vice
President, Controller, October 1991 to May 1993;
Controller, October 1989 to October 1991; Director,
Planning and Control, October 1988 to October 1989.
</TABLE>
I-5
<PAGE>
Facsimiles of the Letter of Transmittal will be accepted. The Letter of
Transmittal and certificates evidencing Shares and any other required documents
should be sent or delivered by each stockholder or his broker, dealer,
commercial bank, trust company or other nominee to the Depositary at one of its
addresses set forth below.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Mail By Hand or Overnight Courier:
P.O. Box 2563 14 Wall Street, 8th Floor
Suite 4660-DP Suite 4680-DP
Jersey City, New Jersey 07303-2563 New York, New York 10005
Questions or requests for assistance may be directed to the Information
Agent or the Dealer Managers at their respective addresses and telephone numbers
listed below. Additional copies of this Offer to Purchase, the Letter of
Transmittal and the Notice of Guaranteed Delivery may be obtained from the
Information Agent. A stockholder may also contact brokers, dealers, commercial
banks or trust companies for assistance concerning the Offer.
The Information Agent for the Offer is:
GEORGESON
& COMPANY INC.
Wall Street Plaza
New York, New York 10005
(212) 509-6240 (Collect)
Bankers and Brokers Call Collect: (212) 440-9800
CALL TOLL-FREE: 1-800-223-2064
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO. KLEINWORT BENSON NORTH AMERICA INC.
85 Broad Street 200 Park Avenue
New York, New York New York, New York 10166
10004 (212) 983-4000
(212) 902-1000
Exhibit (a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF
COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
DR PEPPER/SEVEN-UP COMPANIES, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED FEBRUARY 1, 1995
OF
DP/SU ACQUISITION INC.
AN INDIRECT WHOLLY OWNED SUBSIDIARY
OF
CADBURY SCHWEPPES PLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, MARCH 1, 1995, UNLESS THE OFFER IS EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
By Mail: By Hand or Overnight Carrier:
P.O. Box 2563 14 Wall Street
Suite 4660-DP 8th Floor, Suite 4680-DP
Jersey City, New Jersey 07303-2563 New York, New York 10005
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS
SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders either if
certificates evidencing Shares (as defined below) are to be forwarded herewith
or, unless an Agent's Message (as defined in Section 2 of the Offer to Purchase
(as defined below)) is utilized, if delivery of Shares is to be made by
book-entry transfer to the Depositary's account at The Depository Trust Company
("DTC"), the Midwest Securities Trust Company ("MSTC") or the Philadelphia
Depository Trust Company ("PDTC") (each a "Book-Entry Transfer Facility" and
collectively, the "Book-Entry Transfer Facilities") pursuant to the book-entry
transfer procedure described in Section 3 of the Offer to Purchase. DELIVERY OF
DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
Stockholders whose certificates evidencing Shares ("Share Certificates") are
not immediately available or who cannot deliver their Share Certificates and all
other documents required hereby to the Depositary prior to the Expiration Date
(as defined in Section 1 of the Offer to Purchase) or who cannot complete the
procedure for delivery by book-entry transfer on a timely basis and who wish to
tender their Shares must do so pursuant to the guaranteed delivery procedure
described in Section 3 of the Offer to Purchase. See Instruction 2.
/ / CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution...............................................
Check Box of Applicable Book-Entry Transfer Facility:
(CHECK ONE) / / DTC / / MSTC / / PDTC
Account Number..............................................................
Transaction Code Number.....................................................
<PAGE>
/ / CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s).............................................
Window Ticket No. (if any)..................................................
Date of Execution of Notice of Guaranteed Delivery..........................
Name of Institution that Guaranteed Delivery................................
<TABLE>
<CAPTION>
DESCRIPTION OF SHARES TENDERED
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
NAME(S) APPEAR(S) ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
TOTAL NUMBER OF
SHARES EVIDENCED BY
SHARE CERTIFICATE SHARE NUMBER OF SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
<S> <C> <C> <C>
Total Shares
</TABLE>
* Need not be completed by stockholders delivering Shares by book-entry
transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced
by each Share Certificate delivered to the Depositary are being tendered
hereby. See Instruction 4.
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH
IN THIS LETTER OF TRANSMITTAL CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to DP/SU Acquisition Inc., a Delaware
corporation ("Purchaser") and an indirect wholly owned subsidiary of Cadbury
Schweppes plc, a company organized under the laws of England, the
above-described shares of common stock, par value $.01 per share (the "Common
Stock"), and the associated preferred stock purchase rights issued pursuant to
the Rights Agreement, dated as of September 1, 1993 (as amended), between Dr
Pepper/Seven-Up Companies, Inc., a Delaware corporation (the "Company") and Bank
One, Texas, N.A. as Rights Agent (the "Rights" and, together with the Common
Stock, the "Shares"), of the Company, pursuant to Purchaser's offer to purchase
all Shares at $33.00 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated February 1,
1995 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in
this Letter of Transmittal (which together constitute the "Offer"). The
undersigned understands that Purchaser reserves the right to transfer or assign,
in whole or from time to time in part, to one or more of its affiliates, the
right to purchase all or any portion of the Shares tendered pursuant to the
Offer.
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith, in accordance with the terms of the Offer, the undersigned
hereby sells, assigns and transfers to, or upon the order of, Purchaser all
right, title and interest in and to all the Shares that are being tendered
hereby and all dividends, distributions (including, without limitation,
distributions of additional Shares) and rights declared, paid or distributed in
respect of such Shares on or after January 25, 1995 (collectively,
"Distributions"), and irrevocably appoints the Depositary the true and lawful
agent and attorney-in-fact of the undersigned with respect to such Shares and
all Distributions, with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (i) deliver
Share Certificates evidencing such Shares and all Distributions, or transfer
ownership of such Shares and all Distributions on the account books maintained
by a Book-Entry Transfer Facility, together, in either case, with all
accompanying evidences of transfer and authenticity, to or upon the order of
Purchaser, (ii) present such Shares and all Distributions for transfer on the
books of the Company and (iii) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares and all Distributions, all in
accordance with the terms of the Offer.
The undersigned hereby irrevocably appoints Henry A. Udow and Michael A.C.
Clark, and each of them, as the attorneys and proxies of the undersigned, each
with full power of substitution, to vote in such manner as each such attorney
and proxy or his substitute shall, in his or her sole discretion, deem proper
and otherwise act (by written consent or otherwise) with respect to all the
Shares tendered hereby which have been accepted for payment by Purchaser prior
to the time of such vote or other action and all Shares and other securities
issued in Distributions in respect of such Shares, which the undersigned is
entitled to vote at any meeting of stockholders of the Company (whether annual
or special and whether or not an adjourned or postponed meeting) or consent in
lieu of any such meeting or otherwise. This proxy and power of attorney is
coupled with an interest in the Shares tendered hereby, is irrevocable and is
granted in consideration of, and is effective upon, the acceptance for payment
of such Shares by Purchaser in accordance with the terms of the Offer. Such
acceptance for payment shall revoke all other proxies and powers of attorney
granted by the undersigned at any time with respect to such Shares (and all
Shares and other securities issued in Distributions in respect of such Shares),
and no subsequent proxy or power of attorney shall be given or written consent
executed (and if given or executed, shall not be effective) by the undersigned
with respect thereto. The undersigned understands that, in order for Shares to
be deemed validly tendered, immediately upon Purchaser's acceptance of such
Shares for payment, Purchaser must be able to exercise full voting and other
rights with respect to such Shares and all Distributions, including, without
limitation, voting at any meeting of the Company's stockholders then scheduled.
<PAGE>
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and all Distributions, and that when such Shares are accepted for payment
by Purchaser, Purchaser will acquire good, marketable and unencumbered title
thereto and to all Distributions, free and clear of all liens, restrictions,
charges and encumbrances, and that none of such Shares and Distributions will be
subject to any adverse claim. The undersigned, upon request, shall execute and
deliver all additional documents deemed by the Depositary or Purchaser to be
necessary or desirable to complete the sale, assignment and transfer of the
Shares tendered hereby and all Distributions. In addition, the undersigned shall
remit and transfer promptly to the Depositary for the account of Purchaser all
Distributions in respect of the Shares tendered hereby, accompanied by
appropriate documentation of transfer, and, pending such remittance and transfer
or appropriate assurance thereof, Purchaser shall be entitled to all rights and
privileges as owner of each such Distribution and may withhold the entire
purchase price of the Shares tendered hereby, or deduct from such purchase price
the amount or value of such Distribution as determined by Purchaser in its sole
discretion.
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding upon
the heirs, personal representatives, successors and assigns of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the Offer. Purchaser's acceptance of such Shares for payment
will constitute a binding agreement between the undersigned and Purchaser upon
the terms and subject to the conditions of the Offer.
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the purchase price of all Shares
purchased, and return all Share Certificates evidencing Shares not purchased or
not tendered in the name(s) of the registered holder(s) appearing above under
"Description of Shares Tendered." Similarly, unless otherwise indicated in the
box entitled "Special Delivery Instructions," please mail the check for the
purchase price of all Shares purchased and all Share Certificates evidencing
Shares not tendered or not purchased (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing above
under "Description of Shares Tendered." In the event that the boxes entitled
"Special Payment Instructions" and "Special Delivery Instructions" are both
completed, please issue the check for the purchase price of all Shares purchased
and return all Share Certificates evidencing Shares not purchased or not
tendered in the name(s) of, and mail such check and Share Certificates to, the
person(s) so indicated. The undersigned recognizes that Purchaser has no
obligation, pursuant to the Special Payment Instructions, to transfer any Shares
from the name of the registered holder(s) thereof if Purchaser does not purchase
any of the Shares tendered hereby.
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares purchased
or Share Certificates evidencing Shares not tendered or not purchased are to be
issued in the name of someone other than the undersigned.
Issue check and/or certificate(s) to:
Name............................................................................
(PLEASE PRINT)
Address.........................................................................
...............................................................................
(INCLUDE ZIP CODE)
...............................................................................
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
Check appropriate box:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository
Trust Company
...............................................................................
(ACCOUNT NUMBER)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares purchased
or Share Certificates evidencing Shares not tendered or not purchased are to be
mailed to someone other than the undersigned, or to the undersigned at an
address other than that shown under "Description of Shares
Tendered."
Mail check and/or certificate(s) to:
Name............................................................................
(PLEASE PRINT)
Address.........................................................................
................................................................................
(INCLUDE ZIP CODE)
<PAGE>
IMPORTANT
STOCKHOLDERS: SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
...................................................................
...................................................................
SIGNATURE(S) OF HOLDER(S)
Dated: , 1995
(Must be signed by registered holder(s) exactly as such registered
holder(s) name(s) appear(s) on Share Certificates or on a security
position listing or by a person(s) authorized to become registered
holder(s) by certificates and documents transmitted herewith. If
signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting
in a fiduciary or representative capacity, please provide the
following information and see Instruction 5.)
Name(s):...........................................................
...................................................................
(PLEASE PRINT)
Capacity (full title): ............................................
Address: ..........................................................
...................................................................
(INCLUDE ZIP CODE)
Area Code and
Telephone No.: ....................................................
Taxpayer Identification or Social Security No.: ...................
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED--SEE INSTRUCTIONS 1 AND 5)
SPACE BELOW IS FOR USE BY FINANCIAL
INSTITUTIONS ONLY.
FINANCIAL INSTITUTIONS: PLACE MEDALLION
GUARANTEE IN SPACE BELOW
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. All signatures on this Letter of Transmittal
must be medallion guaranteed by a firm that is a member of the Medallion
Signature Guarantee Program, or by any other "eligible guarantor institution",
as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of
1934, as amended (each of the foregoing being referred to as an "Eligible
Institution"), unless (i) this Letter of Transmittal is signed by the registered
holder(s) of the Shares (which term, for purposes of this document, shall
include any participant in a Book-Entry Transfer Facility whose name appears on
a security position listing as the owner of Shares) tendered hereby and such
holder(s) has (have) completed neither the box entitled "Special Payment
Instructions" nor the box entitled "Special Delivery Instructions" on the
reverse hereof or (ii) such Shares are tendered for the account of an Eligible
Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Share Certificates. This Letter of
Transmittal is to be used either if Share Certificates are to be forwarded
herewith or, unless an Agent's Message is utilized, if Shares are to be
delivered by book-entry transfer pursuant to the procedure set forth in Section
3 of the Offer to Purchase. Share Certificates evidencing all physically
tendered Shares, or a confirmation of a book-entry transfer into the
Depositary's account at a Book-Entry Transfer Facility of all Shares delivered
by book-entry transfer as well as a properly completed and duly executed Letter
of Transmittal (or facsimile thereof), with any required signature guarantees,
or an Agent's Message in the case of a book-entry delivery, and any other
documents required by this Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth on the reverse hereof prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase). If Share
Certificates are forwarded to the Depositary in multiple deliveries, a properly
completed and duly executed Letter of Transmittal must accompany each such
delivery. Stockholders whose Share Certificates are not immediately available,
who cannot deliver their Share Certificates and all other required documents to
the Depositary prior to the Expiration Date or who cannot complete the procedure
for delivery by book-entry transfer on a timely basis may tender their Shares
pursuant to the guaranteed delivery procedure described in Section 3 of the
Offer to Purchase. Pursuant to such procedure: (i) such tender must be made by
or through an Eligible Institution; (ii) a properly completed and duly executed
Notice of Guaranteed Delivery, substantially in the form made available by
Purchaser, must be received by the Depositary prior to the Expiration Date; and
(iii) the Share Certificates evidencing all physically delivered Shares in
proper form for transfer by delivery, or a confirmation of a book-entry transfer
into the Depositary's account at a Book-Entry Transfer Facility of all Shares
delivered by book-entry transfer, in each case together with a Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed, with
any required signature guarantees (or, in the case of a book-entry delivery, an
Agent's Message), and any other documents required by this Letter of
Transmittal, must be received by the Depositary within five New York Stock
Exchange, Inc. ("NYSE") trading days after the date of execution of such Notice
of Guaranteed Delivery, all as described in Section 3 of the Offer to Purchase.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF
DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. By execution of this Letter of Transmittal
(or a facsimile hereof), all tendering stockholders waive any right to receive
any notice of the acceptance of their Shares for payment.
<PAGE>
3. Inadequate Space. If the space provided herein under "Description of
Shares Tendered" is inadequate, the Share Certificate numbers, the number of
Shares evidenced by such Share Certificates and the number of Shares tendered
should be listed on a separate schedule and attached hereto.
4. Partial Tenders (not applicable to stockholders who tender by book-entry
transfer). If fewer than all of the Shares evidenced by any Share Certificate
delivered to the Depositary herewith are to be tendered hereby, fill in the
number of Shares that are to be tendered in the box entitled "Number of Shares
Tendered." In such cases, new Share Certificate(s) evidencing the remainder of
the Shares that were evidenced by the Share Certificates delivered to the
Depositary herewith will be sent to the person(s) signing this Letter of
Transmittal, unless otherwise provided in the box entitled "Special Delivery
Instructions" on the reverse hereof, as soon as practicable after the expiration
or termination of the Offer. All Shares evidenced by Share Certificates
delivered to the Depositary will be deemed to have been tendered unless
otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the Share Certificates evidencing such Shares without alteration,
enlargement or any other change whatsoever.
If any Share tendered hereby is owned of record by two or more persons, all
such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in the names of
different holders, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of such
Shares.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Share Certificates or separate stock
powers are required, unless payment is to be made to, or Share Certificates
evidencing Shares not tendered or not purchased are to be issued in the name of,
a person other than the registered holder(s), in which case, the Share
Certificate(s) evidencing the Shares tendered hereby must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear(s) on such Share Certificate(s).
Signatures on such Share Certificate(s) and stock powers must be guaranteed by
an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Share Certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such Share Certificate(s). Signatures on such
Share Certificate(s) and stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Purchaser of such person's authority so to act must be
submitted.
6. Stock Transfer Taxes. Except as otherwise provided in this Instruction 6,
Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or Share
Certificate(s) evidencing Shares not tendered or not purchased are to be issued
in the name of, a person other than the registered holder(s), the amount of any
stock transfer taxes (whether imposed on the registered holder(s), such other
person or otherwise) payable on account of the transfer to such other person
will be deducted from the purchase price of such Shares purchased, unless
evidence satisfactory to Purchaser of the payment of such taxes, or exemption
therefrom, is submitted. Except as provided in this Instruction 6, it will not
be necessary for transfer tax stamps to be affixed to the Share Certificates
evidencing the Shares tendered hereby.
<PAGE>
7. Special Payment and Delivery Instructions. If a check for the purchase
price of any Shares tendered hereby is to be issued, or Share Certificate(s)
evidencing Shares not tendered or not purchased are to be issued, in the name of
a person other than the person(s) signing this Letter of Transmittal or if such
check or any such Share Certificate is to be sent to someone other than the
person(s) signing this Letter of Transmittal or to the person(s) signing this
Letter of Transmittal but at an address other than that shown in the box
entitled "Description of Shares Tendered" on the reverse hereof, the appropriate
boxes on the reverse of this Letter of Transmittal must be completed.
8. Questions and Requests for Assistance or Additional Copies. Questions and
requests for assistance may be directed to the Information Agent or the Dealer
Managers at their respective addresses or telephone numbers set forth below.
Additional copies of the Offer to Purchase, this Letter of Transmittal and the
Notice of Guaranteed Delivery may be obtained from the Information Agent or from
brokers, dealers, commercial banks or trust companies.
9. Substitute Form W-9. Each tendering stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to certify, under penalties of perjury, that such number is correct and that
such stockholder is not subject to backup withholding of federal income tax. If
a tendering stockholder has been notified by the Internal Revenue Service that
such stockholder is subject to backup withholding, such stockholder must cross
out item (2) of the Certification box of the Substitute Form W-9, unless such
stockholder has since been notified by the Internal Revenue Service that such
stockholder is no longer subject to backup withholding. Failure to provide the
information on the Substitute Form W-9 may subject the tendering stockholder to
31 percent federal income tax withholding on the payment of the purchase price
of all Shares purchased from such stockholder. If the tendering stockholder has
not been issued a TIN and has applied for one or intends to apply for one in the
near future, such stockholder should write "Applied For" in the space provided
for the TIN in Part I of the Substitute Form W-9, and sign and date the
Substitute Form W-9. If "Applied For" is written in Part I and the Depositary is
not provided with a TIN within 60 days, the Depositary will withhold 31 percent
on all payments of the purchase price to such stockholder until a TIN is
provided to the Depositary.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED, OR AN AGENT'S MESSAGE IN THE CASE OF A BOOK-ENTRY
DELIVERY (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES AND SHARE CERTIFICATES
OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS), OR A
PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY MUST BE
RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER
TO PURCHASE).
<PAGE>
IMPORTANT TAX INFORMATION
Under the federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payer) with such
stockholder's correct TIN on Substitute Form W-9 below. If such stockholder is
an individual, the TIN is such stockholder's social security number. If the
Depositary is not provided with the correct TIN, the stockholder may be subject
to a $50 penalty imposed by the Internal Revenue Service. In addition, payments
that are made to such stockholder with respect to Shares purchased pursuant to
the Offer may be subject to backup withholding of 31 percent (as described
below).
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit an Internal Revenue Service Form W-8,
signed under penalties of perjury, attesting to such individual's exempt status.
A Form W-8 may be obtained from the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If backup withholding applies, the Depositary is required to withhold 31
percent of any payments made to the stockholder. Backup withholding is not an
additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of such stockholder's correct TIN by
completing the form below certifying (a) that the TIN provided on Substitute
Form W-9 is correct (or that such stockholder is awaiting a TIN), and (b) that
(i) such stockholder has not been notified by the Internal Revenue Service that
such stockholder is subject to backup withholding as a result of a failure to
report all interest or dividends or (ii) the Internal Revenue Service has
notified such stockholder that such stockholder is no longer subject to backup
withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If the Shares are in more than one name or are not in the name
of the actual owner, consult the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional guidance on
which number to report. If the tendering stockholder has not been issued a TIN
and has applied for a number or intends to apply for a number in the near
future, the stockholder should write "Applied For" in the space provided for the
TIN in Part I, and sign and date the Substitute Form W-9. If "Applied For" is
written in Part I and the Depositary is not provided with a TIN within 60 days,
the Depositary will withhold 31 percent of all payments of the purchase price to
such stockholder until a TIN is provided to the Depositary.
<PAGE>
PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
SUBSTITUTE PART I--Taxpayer Identification
FORM W-9 Number-- For all accounts, enter Social Security Number
DEPARTMENT OF THE TREASURY taxpayer identification number in the
INTERNAL REVENUE SERVICE box at right. (For most individuals,
this is your social security number. If
you do not have a number, see OR
"Obtaining a Number" in the enclosed Employer Identification Number
Guidelines.) Certify by signing and (If awaiting TIN, write "Applied
dating below. Note: If the account is For")
in more than one name, see the chart in
the enclosed Guidelines to determine
which number to give the payer.
Payer's Request for Taxpayer PART II--For Payees Exempt From Backup Withholding, see the enclosed
Identification Number (TIN) Guidelines and complete as instructed therein.
</TABLE>
CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification
Number (or I am waiting for a number to be issued to me), and
(2) I am not subject to backup withholding either because I have not
been notified by the Internal Revenue Service (the "IRS") that I am
subject to backup withholding as a result of failure to report all
interest or dividends, or the IRS has notified me that I am no
longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS--You must cross out item(2) above if you have
been notified by the IRS that you are subject to backup withholding
because of underreporting interest or dividends on your tax return.
However, if after being notified by the IRS that you were subject to
backup withholding you received another notification from the IRS that
you are no longer subject to backup withholding, do not cross out item
(2). (See also instructions in the enclosed Guidelines.)
SIGNATURE DATE , 199
------------------------------------- ----------- ---
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31 PERCENT OF ANY PAYMENT MADE TO YOU PURSUANT TO THE OFFER. FOR
ADDITIONAL DETAILS, PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9.
The Information Agent for the Offer is:
[GEORGESON & COMPANY INC. LOGO]
Wall Street Plaza
New York, New York 10005
(212) 509-6240 (Collect)
Banks and Brokers Call Collect: (212) 440-9800
CALL TOLL-FREE: 1-800-223-2064
The Dealer Managers for the Offer are:
<TABLE>
<S> <C> <C>
GOLDMAN, SACHS & CO. and KLEINWORT BENSON NORTH AMERICA INC.
85 Broad Street 200 Park Avenue
New York, New York 10004 New York, New York 10166
(212) 902-1000 (212) 983-4000
</TABLE>
February 1, 1995
Exhibit (a)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
DR PEPPER/SEVEN-UP COMPANIES, INC.
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or one substantially in the form hereof,
must be used to accept the Offer (as defined below) (i) if certificates ("Share
Certificates") evidencing shares of common stock, par value $.01 per share (the
"Common Stock"), and the associated preferred stock purchase rights issued
pursuant to the Rights Agreement, dated as of September 1, 1993 (as amended),
between Dr Pepper/Seven-Up Companies, Inc., a Delaware corporation (the
"Company") and Bank One, Texas, N.A., as Rights Agent (the "Rights" and,
together with the Common Stock, the "Shares"), of the Company, are not
immediately available, (ii) if Share Certificates and all other required
documents cannot be delivered to First Chicago Trust Company of New York, as
Depositary (the "Depositary"), prior to the Expiration Date (as defined in
Section 1 of the Offer to Purchase (as defined below)) or (iii) if the procedure
for delivery by book-entry transfer cannot be completed on a timely basis. This
Notice of Guaranteed Delivery may be delivered by hand or mail or transmitted by
telegram or facsimile transmission to the Depositary. See Section 3 of the Offer
to Purchase.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<CAPTION>
By Facsimile Transmission
By Mail: (FOR ELIGIBLE INSTITUTIONS ONLY): By Hand or Overnight Carrier:
<S> <C> <C>
P.O. Box 2563 (201) 222-4720 14 Wall Street
Suite 4660-DP or 8th Floor, Suite 4680-DP
Jersey City, New Jersey (201) 222-4721 New York, New York 10005
07303-2563
Confirm Receipt of Guaranteed
Delivery by Telephone:
(201) 222-4707
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to DP/SU Acquisition Inc., a Delaware
corporation and an indirect wholly owned subsidiary of Cadbury Schweppes plc, a
company organized under the laws of England, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated February 1, 1995 (the
"Offer to Purchase"), and the related Letter of Transmittal (which together
constitute the "Offer"), receipt of each of which is hereby acknowledged, the
number of Shares specified below pursuant to the guaranteed delivery procedure
described in Section 3 of the Offer to Purchase.
Number of Shares:_________________________ ___________________________________
___________________________________
Certificate Nos. (If Available): Signature(s) of Holder(s)
- ------------------------------------------
Dated:_________________________, 1995
Check one box if Shares will be delivered Name(s) of Holders:
by book-entry transfer:
____________________________________
/ / The Depository Trust Company
____________________________________
Please Type or Print
/ / Midwest Securities Trust Company
____________________________________
Address
/ / Philadelphia Depository Trust Company
------------------------------------
Zip Code
_________________________________________
------------------------------------
Name of Tendering Institution Area Code and Telephone No.
Account No._______________________________
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers,
Inc. or which is a commercial bank or trust company having an office or
correspondent in the United States, guarantees to deliver to the Depositary,
at one of its addresses set forth above, Share Certificates evidencing the
Shares tendered hereby, in proper form for transfer, or confirmation of
book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company, the Midwest Securities Trust Company or the
Philadelphia Depository Trust Company, in each case with delivery of a
Letter of Transmittal (or facsimile thereof) properly completed and duly
executed, with any required signature guarantees or an Agent's Message (as
defined in the Offer to Purchase) in the case of a book-entry delivery, and
any other required documents, all within five New York Stock Exchange, Inc.
trading days of the date hereof.
---------------------------------------- --------------------------------
Name of Firm Authorized Signature
---------------------------------------- --------------------------------
Address Title
---------------------------------------- Name: __________________________
Zip Code Please Type or Print
---------------------------------------- Dated: ___________________, 1995
Area Code and Telephone No.
DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE. SHARE CERTIFICATES
SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
Exhibit (a)(4)
GOLDMAN, SACHS & CO. KLEINWORT BENSON NORTH AMERICA INC.
and
85 Broad Street 200 Park Avenue
New York, New York New York, New York 10166
10004 (212) 983-4000
(212) 902-1000
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
DR PEPPER/SEVEN-UP COMPANIES, INC.
AT
$33.00 NET PER SHARE
BY
DP/SU ACQUISITION INC.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
CADBURY SCHWEPPES PLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, MARCH 1, 1995, UNLESS THE OFFER IS EXTENDED.
February 1, 1995
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by DP/SU Acquisition Inc., a Delaware corporation
("Purchaser") and an indirect wholly owned subsidiary of Cadbury Schweppes plc,
a company organized under the laws of England ("Parent"), to act as Dealer
Managers in connection with Purchaser's offer to purchase all outstanding shares
of common stock, par value $.01 per share (the "Common Stock"), and the
associated preferred stock purchase rights issued pursuant to the Rights
Agreement, dated as of September 1, 1993 (as amended), between Dr
Pepper/Seven-Up Companies, Inc., a Delaware corporation (the "Company") and Bank
One, Texas, N.A., as Rights Agent (the "Rights" and, together with the Common
Stock, the "Shares"), of the Company, at a price of $33.00 per Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in
Purchaser's Offer to Purchase, dated February 1, 1995 (the "Offer to Purchase"),
and the related Letter of Transmittal (which together constitute the "Offer")
enclosed herewith. Please furnish copies of the enclosed materials to those of
your clients for whose accounts you hold Shares registered in your name or in
the name of your nominee.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST THE
NUMBER OF SHARES THAT, WHEN COMBINED WITH THE SHARES ALREADY OWNED BY PARENT AND
ITS DIRECT OR INDIRECT SUBSIDIARIES, SHALL CONSTITUTE A MAJORITY OF THE THEN
OUTSTANDING SHARES ON A FULLY DILUTED BASIS. THE OFFER IS ALSO CONDITIONED UPON,
AMONG OTHER THINGS, THE EXPIRATION OR TERMINATION OF ANY APPLICABLE ANTITRUST
WAITING PERIODS.
<PAGE>
Enclosed for your information and use are copies of the following documents:
1. Offer to Purchase, dated February 1, 1995;
2. Letter of Transmittal to be used by holders of Shares in accepting
the Offer and tendering Shares;
3. Notice of Guaranteed Delivery to be used to accept the Offer if the
Shares and all other required documents are not immediately available or
cannot be delivered to First Chicago Trust Company of New York (the
"Depositary") by the Expiration Date (as defined in the Offer to Purchase)
or if the procedure for book-entry transfer cannot be completed by the
Expiration Date;
4. A letter to stockholders of the Company from John R. Albers, Chairman
and Chief Executive Officer of the Company, together with a
Solicitation/Recommendation Statement on Schedule 14D-9 filed with the
Securities and Exchange Commission by the Company;
5. A letter which may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominee, with
space provided for obtaining such clients' instructions with regard to the
Offer;
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. Return envelope addressed to the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, MARCH 1, 1995, UNLESS THE OFFER IS EXTENDED.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates
evidencing such Shares (or a confirmation of a book-entry transfer of such
Shares into the Depositary's account at one of the Book-Entry Transfer
Facilities (as defined in the Offer to Purchase)), (ii) a Letter of Transmittal
(or facsimile thereof) properly completed and duly executed or an Agent's
Message (as defined in the Offer to Purchase) in the case of a book-entry
delivery and (iii) any other required documents in accordance with the
instructions contained in the Letter of Transmittal.
If a holder of Shares wishes to tender Shares, but cannot deliver such
holder's certificates or other required documents, or cannot comply with the
procedure for book-entry transfer, prior to the expiration of the Offer, a
tender of Shares may be effected by following the guaranteed delivery procedure
described in Section 3 of the Offer to Purchase.
Purchaser will not pay any fees or commissions to any broker, dealer or
other person (other than the Dealer Managers, the Depositary and the Information
Agent as described in the Offer) in connection with the solicitation of tenders
of Shares pursuant to the Offer. However, Purchaser will reimburse you for
customary mailing and handling expenses incurred by you in forwarding any of the
enclosed materials to your clients. Purchaser will pay or cause to be paid any
stock transfer taxes payable with respect to the transfer of Shares to it,
except as otherwise provided in Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to
Goldman, Sachs & Co., Kleinwort Benson North America Inc., or Georgeson &
Company Inc. (the "Information Agent") at their respective addresses and
telephone numbers set forth on the back cover page of the Offer to Purchase.
<PAGE>
Additional copies of the enclosed material may be obtained from the
Information Agent, at the address and telephone numbers set forth on the back
cover page of the Offer to Purchase.
Very truly yours,
GOLDMAN, SACHS & CO.
KLEINWORT BENSON NORTH AMERICA INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL AUTHORIZE YOU OR
ANY OTHER PERSON TO ACT ON BEHALF OF OR AS THE AGENT OF PARENT, PURCHASER, THE
COMPANY, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE DEPOSITARY, OR OF ANY
AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY
DOCUMENT OR TO MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH
THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED
THEREIN.
Exhibit (a)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
DR PEPPER/SEVEN-UP COMPANIES, INC.
AT
$33.00 NET PER SHARE
BY
DP/SU ACQUISITION INC.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
CADBURY SCHWEPPES PLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY MARCH 1, 1995, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are an Offer to Purchase, dated February 1,
1995 (the "Offer to Purchase"), and a related Letter of Transmittal (which
together constitute the "Offer") in connection with the offer by DP/SU
Acquisition Inc., a Delaware corporation ("Purchaser") and an indirect wholly
owned subsidiary of Cadbury Schweppes plc, a company organized under the laws of
England ("Parent"), to purchase all outstanding shares of common stock, par
value $.01 per share (the "Common Stock"), and the associated preferred stock
purchase rights issued pursuant to the Rights Agreement, dated as of September
1, 1993 (as amended), between Dr Pepper/
Seven-Up Companies, Inc., a Delaware corporation (the "Company") and Bank One,
Texas, N.A., as Rights Agent (the "Rights" and, together with the Common Stock,
the "Shares"), of the Company, at a price of $33.00 per Share, net to the seller
in cash without interest, upon the terms and subject to the conditions set forth
in the Offer.
We are (or our nominee is) the holder of record of Shares held by us for
your account. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF
RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED
TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD
BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares held by us for your account, upon the terms and
subject to the conditions set forth in the Offer.
Your attention is invited to the following:
1. The tender price is $33.00 per Share, net to the seller in cash
without interest.
2. The Offer is being made for all outstanding Shares.
3. The Board of Directors of the Company unanimously has determined that
each of the Offer and the Merger (as defined in the Offer to Purchase) is
fair to, and in the best interests of, the stockholders of the Company
(other than Parent and its subsidiaries), and recommends that stockholders
accept the Offer and tender their Shares pursuant to the Offer.
<PAGE>
4. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Wednesday, March 1, 1995, unless the Offer is extended.
5. The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the expiration of the Offer at
least the number of Shares that, when combined with the Shares already owned
by Parent and its direct or indirect subsidiaries, shall constitute a
majority of the then outstanding Shares on a fully diluted basis. The Offer
is also conditioned upon, among other things, the expiration or termination
of applicable antitrust waiting periods.
6. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter
of Transmittal, stock transfer taxes with respect to the purchase of Shares
by Purchaser pursuant to the Offer.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form contained
in this letter. An envelope in which to return your instructions to us is
enclosed. If you authorize the tender of your Shares, all such Shares will be
tendered unless otherwise specified in your instructions. YOUR INSTRUCTIONS
SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR
BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and is being made to all holders of Shares. Purchaser is not aware
of any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. If Purchaser becomes aware
of any valid state statute prohibiting the making of the Offer or the acceptance
of Shares pursuant thereto, Purchaser will make a good faith effort to comply
with any such state statute. If, after such good faith effort, Purchaser cannot
comply with such state statute, the Offer will not be made to (nor will tenders
be accepted from or on behalf of) the holders of Shares in such state. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of Purchaser by Goldman, Sachs & Co. and Kleinwort Benson North America
Inc. or one or more registered brokers or dealers licensed under the laws of
such jurisdiction.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
DR PEPPER/SEVEN-UP COMPANIES, INC.
BY
DP/SU ACQUISITION INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase, dated February 1, 1995, and the related Letter of Transmittal
(which together constitute the "Offer"), in connection with the offer by DP/SU
Acquisition Inc., a Delaware corporation and an indirect wholly owned subsidiary
of Cadbury Schweppes plc, a company organized under the laws of England, to
purchase all outstanding shares of common stock, par value $.01 per share (the
"Common Stock"), and the associated preferred stock purchase rights issued
pursuant to the Rights Agreement, dated as of September 1, 1993 (as amended),
between the Company and Bank One, Texas, N.A., as Rights Agent (the "Rights"
and, together with the Common Stock, the "Shares"), of Dr Pepper/Seven-Up
Companies, Inc., a Delaware corporation.
This will instruct you to tender the number of Shares indicated below (or,
if no number is indicated below, all Shares) that are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer.
Dated: __________, 1995 SIGN HERE
_______________________________
Number of Shares to be Tendered: _______________________________
Signature(s)
_______________________ Shares*
_______________________________
_______________________________
Please type or print name(s)
_______________________________
_______________________________
Please type or print address
_______________________________
Area Code and Telephone Number
_______________________________
Taxpayer Identification or
Social Security Number
- ------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
Exhibit (a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens, e.g.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen, e.g., 00-0000000. The table below will help determine the number to
give the payer.
- ------------------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals The actual owner of the
(joint account) account or, if combined
funds, the first
individual on the
account(1)
3. Husband and wife (joint The actual owner of the
account) account or, if joint
funds, either person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gifts to
Minors Act)
5. Adult and minor (joint The adult or, if the
account) minor is the only
contributor, the
minor(1)
6. Account in the name of The ward, minor, or
guardian or committee for a incompetent person(3)
designated ward, minor, or
incompetent person
7. a. The revocable savings The grantor-trustee(1)
trust account (in which
grantor is also trustee)
b. Any "trust" account that is The actual owner(1)
not a legal or valid trust
under State law
- ------------------------------------------------------------
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ------------------------------------------------------------
8. Sole proprietorship account The owner(4)
9. A valid trust, estate, or The legal entity (do not
pension trust furnish the identifying
number of the personal
representative or
trustee unless the legal
entity itself is not
designated in the
account title)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization
account
12. Partnership account held The partnership
in the name of the
business
13. Association, club, or The organization
other tax-exempt
organization
14. A broker or registered The broker or nominee
nominee
15. Account with the The public entity
Department of Agriculture
in the name of a public
entity (such as a State or
local government, school
district, or prison) that
receives agricultural
program payments
- ------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner. You may also enter your business or "doing
business as" name. Furnish the owner's social security number or the
employer identification number of the sole proprietorship.
(5) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you do not know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), at an office of the Social Security
Administration or the Internal Revenue Service.
To complete Substitute Form W-9, if you do not have a taxpayer identification
number, write "Applied For" in the space for the taxpayer identification number
in Part 1, sign and date the Form, and give it to the requester. Generally, you
will then have 60 days to obtain a taxpayer identification number and furnish it
to the requester. If the requester does not receive your taxpayer identification
number within 60 days, backup withholding, if applicable, will begin and will
continue until you furnish your taxpayer identification number to the requester.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:*
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a), or an individual
retirement plan, or a custodial account under section 403(b)(7).
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or any
political subdivision or instrumentality thereof.
. A foreign government or a political subdivision, agency or instrumentality
thereof.
. An international organization or any agency or instrumentality thereof.
. A registered dealer in securities or commodities registered in the United
States or a possession of the United States.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a).
. An entity registered at all times during the tax year under the Investment
Company Act of 1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the United
States and which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. NOTE: You may be
subject to backup withholding if (i) this interest is $600 or more, (ii) the
interest is paid in the course of the payer's trade or business and (iii) you
have not provided your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in section 6049(b)(5) to nonresident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE A SUBSTITUTE FORM W-9 TO AVOID
POSSIBLE ERRONEOUS BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYER, FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM,
SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividends,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. The IRS uses the numbers for identification
purposes and to help verify the accuracy of your tax return. Payers must be
given the numbers whether or not recipients are required to file tax returns.
Payers must generally withhold 31% of taxable interest, dividends, and certain
other payments to a payee who does not furnish a taxpayer identification number
to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your correct taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE STATEMENTS WITH RESPECT TO WITHHOLDING.--If you make
a false statement with no reasonable basis which results in no imposition of
backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--If you falsify certifications
or affirmations, you are subject to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
- ---------
* Unless otherwise noted herein, all references below to section numbers or to
regulations are references to the Internal Revenue Code and the regulations
promulgated thereunder.
Exhibit (a)(7)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares (as defined below). The Offer (as defined below) is being
made solely by the Offer to Purchase, dated February 1, 1995, and the related
Letter of Transmittal, and is being made to all holders of Shares. Purchaser (as
defined below) is not aware of any state where the making of the Offer is
prohibited by administrative or judicial action pursuant to any valid state
statute. If Purchaser becomes aware of any valid state statute prohibiting the
making of the Offer or the acceptance of Shares pursuant thereto, Purchaser will
make a good faith effort to comply with any such state statute. If, after such
good faith effort, Purchaser cannot comply with any such state statute, the
Offer will not be made to (nor will tenders be accepted from or on behalf of)
the holders of Shares in such state. In any jurisdiction where the securities,
blue sky or other laws require the Offer to be made by a licensed broker or
dealer, the Offer shall be deemed to be made on behalf of Purchaser by Goldman,
Sachs & Co., and Kleinwort Benson North America Inc. or one or more registered
brokers or dealers licensed under the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
DR PEPPER/SEVEN-UP COMPANIES, INC.
AT
$33.00 NET PER SHARE
BY
DP/SU ACQUISITION INC.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
CADBURY SCHWEPPES PLC
DP/SU Acquisition Inc., a Delaware corporation ("Purchaser") and an indirect
wholly owned subsidiary of Cadbury Schweppes plc, a company organized under the
laws of England ("Parent"), is offering to purchase all outstanding shares of
common stock, par value $.01 per share (the "Common Stock"), of Dr
Pepper/Seven-Up Companies, Inc., a Delaware corporation (the "Company"), and the
associated preferred stock purchase rights (together with the Common Stock, the
"Shares") issued pursuant to the Rights Agreement, dated as of September 1, 1993
(as amended), between the Company and Bank One, Texas, N.A., as Rights Agent, at
a price of $33.00 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated February 1,
1995 (the "Offer to Purchase"), and in the related Letter of Transmittal (which
together constitute the "Offer"). Following the Offer, Purchaser intends to
effect the Merger described below.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, MARCH 1, 1995, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST THE
NUMBER OF SHARES THAT, WHEN COMBINED WITH THE SHARES ALREADY OWNED BY PARENT AND
ITS DIRECT OR INDIRECT SUBSIDIARIES, SHALL CONSTITUTE A MAJORITY OF THE THEN
OUTSTANDING SHARES ON A FULLY DILUTED BASIS (THE "MINIMUM CONDITION"). THE OFFER
IS ALSO CONDITIONED UPON, AMONG OTHER THINGS, THE EXPIRATION OR TERMINATION OF
ANY APPLICABLE ANTITRUST WAITING PERIODS.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of January 25, 1995 (the "Merger Agreement"), among Parent, Purchaser and the
Company. The Merger Agreement provides that, among other things, as soon as
practicable after the purchase of Shares
<PAGE>
pursuant to the Offer and the satisfaction of the other conditions set forth in
the Merger Agreement and in accordance with relevant provisions of the General
Corporation Law of the State of Delaware ("Delaware Law"), Purchaser will be
merged with and into the Company (the "Merger"). Following consummation of the
Merger, the Company will continue as the surviving corporation (the "Surviving
Corporation") and will become an indirect wholly owned subsidiary of Parent. At
the effective time of the Merger (the "Effective Time"), each Share issued and
outstanding immediately prior to the Effective Time (other than Shares held in
the treasury of the Company, Shares owned by Purchaser, Parent or any direct or
indirect wholly owned subsidiary of Parent or of the Company and Shares which
are held by stockholders exercising appraisal rights pursuant to Section 262 of
Delaware Law) will be cancelled and converted automatically into the right to
receive $33.00 in cash, or any higher price that may be paid per Share in the
Offer, without interest (the "Merger Consideration").
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") UNANIMOUSLY HAS
DETERMINED THAT EACH OF THE OFFER AND THE MERGER IS FAIR TO, AND IN THE BEST
INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY (OTHER THAN PARENT AND ITS
SUBSIDIARIES), AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER
THEIR SHARES PURSUANT TO THE OFFER.
Under the Company's Certificate of Incorporation and Delaware Law, the
affirmative vote of the holders of a majority of the outstanding Shares is
required to approve and adopt the Merger Agreement and the Merger. In addition,
under Section 203 of Delaware Law, as a result of the acquisition by a
subsidiary of Parent in August of 1993 of a number of Shares which together with
Shares already owned by Parent and its affiliates exceeded 15% of the
outstanding Shares, the affirmative vote of the holders of at least two-thirds
of the outstanding Shares not owned by Parent or Purchaser or any of the their
affiliates or associates is required to approve and adopt the Merger Agreement
and the Merger during a three-year period expiring on August 19, 1996.
BECAUSE OF THE POSSIBILITY THAT THE VOTE REQUIRED TO APPROVE THE MERGER
UNDER SECTION 203 OF DELAWARE LAW MAY NOT BE OBTAINED AT A MEETING OF THE
STOCKHOLDERS OF THE COMPANY AFTER CONSUMMATION OF THE OFFER, THERE CAN BE NO
ASSURANCE THAT THE MERGER WILL OCCUR BEFORE AUGUST 20, 1996. AS A CONSEQUENCE,
THERE CAN BE NO ASSURANCE THAT STOCKHOLDERS WHO FAIL TO TENDER SHARES PURSUANT
TO THE OFFER WILL RECEIVE THE MERGER CONSIDERATION BEFORE SUCH DATE.
Simultaneously with entering into the Merger Agreement, Purchaser, and John
R. Albers, Ira M. Rosenstein and Thomas O. Hicks (each a "Stockholder", and,
collectively, the "Stockholders") entered into a Stockholders Agreement, dated
as of January 25, 1995 (the "Stockholders Agreement"), pursuant to which, upon
the terms set forth therein, each Stockholder has agreed to tender and sell in
accordance with the terms of the Offer, all Shares owned (beneficially or of
record) by such Stockholder. Further, each Stockholder has agreed not to
withdraw his Shares unless (i) taking into account the Shares tendered by the
Stockholders, the Minimum Condition shall not have been satisfied in the Offer,
or (ii) the Board or any committee thereof shall have withdrawn or modified in
any manner adverse to Purchaser or Parent its approval or recommendation of the
Offer, the Merger, or the Merger Agreement. As of January 25, 1995, the
Stockholders owned (either beneficially or of record, excluding certain Shares
held in certain trusts and Shares issuable upon the exercise of stock options
currently outstanding) 3,045,642 Shares, constituting approximately 4.4 percent
of the outstanding Shares on a fully diluted basis.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not withdrawn as, if
and when Purchaser gives oral or written notice to First Chicago Trust Company
of New York (the "Depositary") of Purchaser's acceptance for payment of such
Shares pursuant to the Offer. Upon the terms and subject to the conditions of
the Offer, payment for Shares accepted for payment pursuant to the Offer will be
made by deposit of the purchase price therefor with the Depositary, which will
act as agent for tendering stockholders for the purpose of receiving payments
from Purchaser and transmitting
2
<PAGE>
such payments to tendering stockholders whose Shares have been accepted for
payment. Under no circumstances will interest on the purchase price for Shares
be paid, regardless of any delay in making such payment. In all cases, payment
for Shares tendered and accepted for payment pursuant to the Offer will be made
only after timely receipt by the Depositary of (i) the certificates evidencing
such Shares (the "Share Certificates") or timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at one of the Book-Entry
Transfer Facilities (as defined in Section 2 of the Offer to Purchase) pursuant
to the procedures set forth in Section 3 of the Offer to Purchase, (ii) the
Letter of Transmittal (or a facsimile thereof), properly completed and duly
executed, with any required signature guarantees, or an Agent's Message (as
defined in Section 2 of the Offer to Purchase) in connection with a book-entry
transfer, and (iii) any other documents required by the Letter of Transmittal.
Purchaser expressly reserves the right, in its sole discretion, at any time
and from time to time, to extend for any reason the period of time during which
the Offer is open, including the occurrence of any of the conditions specified
in Section 14 of the Offer to Purchase, by giving oral or written notice of such
extension to the Depositary. Any such extension will be followed as promptly as
practicable by public announcement thereof, such announcement to be made no
later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled expiration date of the Offer. During any such extension,
all Shares previously tendered and not withdrawn will remain subject to the
Offer, subject to the rights of a tendering stockholders to withdraw such
stockholder's Shares.
Tenders of Shares made pursuant to the Offer are irrevocable except that
such Shares may be withdrawn at any time prior to 12:00 Midnight, New York City
time, on Wednesday, March 1, 1995 (or the latest time and date at which the
Offer, if extended by Purchaser, shall expire) and, unless theretofore accepted
for payment by Purchaser pursuant to the Offer, may also be withdrawn at any
time after April 2, 1995. For the withdrawal to be effective, a written,
telegraphic, or facsimile transmission notice of withdrawal must be timely
received by the Depositary at one of its addresses set forth on the back cover
page of the Offer to Purchase. Any such notice of withdrawal must specify the
name of the person who tendered the Shares to be withdrawn, the number of Shares
to be withdrawn and the name of the registered holder of such Shares, if
different from that of the person who tendered such Shares. If Share
Certificates evidencing Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such Share
Certificates, the serial numbers shown on such Share Certificates must be
submitted to the Depositary and the signature(s) on the notice of withdrawal
must be guaranteed by an Eligible Institution (as defined in Section 3 of the
Offer to Purchase), unless such Shares have been tendered for the account of an
Eligible Institution. If Shares have been tendered pursuant to the procedure for
book-entry transfer as set forth in Section 3 of the Offer to Purchase, any
notice of withdrawal must specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares. All
questions as to the form and validity (including the time of receipt) of any
notice of withdrawal will be determined by Purchaser, in its sole discretion,
whose determination will be final and binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
The Company has provided Purchaser with the Company's stockholder list and
security position listings for the purpose of disseminating the Offer to holders
of Shares. The Offer to Purchase and the related Letter of Transmittal will be
mailed to record holders of Shares whose names appear on the Company's
stockholder list and will be furnished to brokers, dealers, commercial banks,
trust companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder list or, if applicable, who are listed as participants
in a
3
<PAGE>
clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION THAT SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
Questions and requests for assistance or for additional copies of the Offer
to Purchase and the related Letter of Transmittal and other tender offer
materials may be directed to the Information Agent or the Dealer Managers as set
forth below, and copies will be furnished promptly at Purchaser's expense. No
fees or commissions will be paid to brokers, dealers or other persons (other
than the Information Agent and the Dealer Managers) for soliciting tenders of
Shares pursuant to the Offer.
The Information Agent for the offer is:
LOGO
Wall Street Plaza
New York, New York 10005
(212) 509-6240 (Collect)
Banks and Brokers Call Collect: (212) 440-9800
Call Toll-Free: 1-800-223-2064
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO. and KLEINWORT BENSON NORTH AMERICA INC.
85 Broad Street 200 Park Avenue
New York, New York New York, New York 10166
10004 (212) 983-4000
(212) 902-1000
February 1, 1995
4
Exhibit (a)(8)
--------------
PRESS RELEASE
CADBURY SCHWEPPES [LOGO]
Contacts: Cadbury Schweppes, London
Chris Milburn, Director, Corporate Communications
Tel: 44 71 409 1313
Dr Pepper/Seven-Up, Dallas
Jim Ball
Tel: 214-360-7812
Gavin Anderson & Company, New York
Cameron King
Tel: 212-373-0200
Media Advisory: The following was released earlier today in London.
FOR IMMEDIATE RELEASE
CADBURY SCHWEPPES TO ACQUIRE DR PEPPER/SEVEN-UP
FOR $33.00 PER SHARE
London and Dallas -- January 26, 1995 -- Cadbury Schweppes (CADBY) and
Dr Pepper/Seven-Up (DPS) announced that they have entered into a merger
agreement pursuant to which the Board of Dr Pepper/Seven-Up will
unanimously recommned to its shareholders acceptance of a cash tender
offer to be made by DP/SU Acquisition Inc., a wholly owned US subsidiary
of Cadbury Schweppes, for the outstanding shares of common stock in Dr
Pepper/Seven-Up not already owned by Cadbury Schweppes at a price of
$33 per share. The total consideration for all shares outstanding not
already owned by Cadbury Schweppes will be US$1,711 million (1,076
million pounds sterling).
Dominic Cadbury, Chairman of Cadbury Schweppes, said today: "The
acquisition of Dr Pepper/Seven-Up represents a major strategic milestone
for Cadbury Schweppes. The brand combination is a powerful and logical
one in the largest soft drinks market in the world. Both businesses
have substantial marketing strength which, in combination and directed
skillfully, can only enhance the reach and penetration of the total
portfolio. I am delighted that the Board of Dr Pepper/Seven-Up has
agreed to recommend our offer."
John Albers, Chairman, President and Chief Executive Officer of Dr
Pepper/Seven-Up said today: "This is an outstanding return for our
shareholders. The $33 price per share values Dr Pepper/Seven-Up in
excess of $3 billion including debt. This value reflects the
extraordinary contribution of the entire Dr Pepper/Seven-Up family,
including its employees, bottlers and customers. The combination of
Cadbury Schweppes' and Dr Pepper/Seven-Up brands will maximize
opportunities for growth both in the US soft drinks market and
internationally."
The offer is subject to the tender of a number of shares which, together
with shares already owned by Cadbury Schweppes, is equivalent to a majority
of the shares and will be followed by a merger of DP/SU Acquisition Inc.,
with Dr Pepper/Seven-Up in which each outstanding common share will be
converted into $33 in cash. Consummation of the transaction is subject to
the satisfaction of certain conditions including approval by Cadbury
Schweppes shareholders and the expiry or termination of the waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Goldman Sachs is acting as financial advisor and dealer manager in connection
with the tender offer. Kleinwort Benson North America is acting as joint
dealer manager and Kleinwort Benson Limited is the UK financial advisor.
BT Securities Corp. and Donaldson, Lufkin and Jenrette Securities
Corporation are providing financial advice to Dr Pepper/Seven-Up.
# # #
Exhibit (b)(1)
CONFORMED COPY
--------------
Dated 26th January, 1995
------------------------
CADBURY SCHWEPPES FINANCE LIMITED
CADBURY SCHWEPPES PUBLIC LIMITED COMPANY
as Guarantor
SAMUEL MONTAGU & CO. LIMITED
as Agent
and
MIDLAND BANK plc and
THE TORONTO-DOMINION BANK
as Arrangers
and as Banks
______________________________________
FACILITIES AGREEMENT
relating to two credit facilities totalling
U.S.$2,400,000,000
______________________________________
for the Borrower for the Banks
Slaughter and May Norton Rose
35 Basinghall Street Kempson House
London EC2V 5DB Camomile Street
London EC3A 7AN
<PAGE>
CONTENTS
--------
Clause Page
- ------ ----
Part 1
INTERPRETATION
1. Interpretation 1
Part 2
THE FACILITIES
2. The Facilities 12
3. Purpose of the Facilities 13
4. Conditions Precedent to Availability of the Facilities 13
5. Nature of the Banks' Obligations 14
Part 3
PRE-ADVANCE PROCEDURES
6. Advance Requests 15
7. Allocation Amongst the Banks 15
Part 4
THE ADVANCES
8. Making of Advances 16
9. Interest 16
10. Repayment of Advances 17
Part 5
CANCELLATION AND PREPAYMENT
11. Cancellation and Prepayment 19
Part 6
CHANGE IN CIRCUMSTANCES
12. Taxes 21
13. Tax Receipts, etc. 22
14. Increased Costs 23
15. Illegality 25
16. Mitigation 26
17. Market Disruption 26
Part 7
REPRESENTATIONS, COVENANTS AND DEMAND REPAYMENT
18. Representations 28
19. Financial Information 31
20. Covenants 32
21. Demand Repayment 33
Part 8
GUARANTEE
22. Guarantee 36
Part 9
PAYMENTS
23. Currency of Account and Payment 39
24. Payments 40
25. Redistribution of Payments 41
<PAGE>
Part 10
DEFAULT INTEREST AND INDEMNITY
26. Default Interest, Prepayment Compensation or
Adjustment and Indemnity 43
Part 11
FEES, COSTS AND EXPENSES
27. Commitment Fee 45
28. Agency Fee 45
29. Costs and Expenses 45
Part 12
AGENCY PROVISIONS
30. The Agent 47
Part 13
ASSIGNMENTS AND NOVATIONS
31. Benefit of Agreement 52
32. Assignments by the Company and the Guarantor 52
33. Assignments and Novations by the Banks 52
Part 14
MISCELLANEOUS
34. Amendment, Waiver, etc. 55
35. Calculations and Evidence of Debt 55
36. Partial Invalidity 56
37. Remedies and Waivers 56
38. Notices 57
39. Set Off 57
Part 15
LAW
40. Law 58
<PAGE>
THE SCHEDULES
First Schedule The Banks 59
Second Schedule Conditions Precedent Documents 60
Third Schedule Timetable for Advances 61
Fourth Schedule Form of Advance Request 63
Fifth Schedule Form of Confidentiality Undertaking 65
Sixth Schedule Form of Transfer Certificate 67
<PAGE>
CONFORMED COPY
--------------
THIS AGREEMENT is made the 26th day of January, 1995
BETWEEN:-
(1) CADBURY SCHWEPPES FINANCE LIMITED (the "Company");
-------
(2) CADBURY SCHWEPPES PUBLIC LIMITED COMPANY (the "Guarantor");
---------
(3) SAMUEL MONTAGU & CO. LIMITED as agent for the Banks (in such capacity, the
"Agent");
-----
(4) MIDLAND BANK plc and THE TORONTO-DOMINION BANK as arrangers (in such
capacity, the "Arrangers"); and
---------
(5) THE BANKS named in the First Schedule
NOW IT IS HEREBY AGREED as follows:-
Part 1
------
INTERPRETATION
--------------
I. Interpretation
--------------
A. In this Agreement:-
"Advance" means an advance to be made by the Banks under Facility A or
---------
Facility B or, as the context may require, the amount thereof advanced and
for the time being remaining outstanding;
"Advance Date" means the date of an Advance, being the date on which the
--------------
relevant Advance is to be made;
"Advance Request" means a notice given to the Agent pursuant to Clause 6 in
-----------------
the form set out in the Fourth Schedule;
"Anniversary" means each anniversary of the date of this Agreement or, if
-------------
any anniversary falls on a day which is not a business day, the next
succeeding business day (unless the result of such extension would be to
carry such anniversary over into another calendar month, in which event
such anniversary shall be the immediately preceding business day);
"Arrangers" means Midland Bank plc and The Toronto-Dominion Bank;
-----------
"Authorised Signatory" in relation to the Company or the Guarantor and any
----------------------
communication to be made, or any document to be executed or certified, by
the Company or the Guarantor means, at any time any person:-
(i) who is at such time duly authorised, by or pursuant to the board
resolution mentioned in the Second Schedule or in such other manner as
may be acceptable to the Agent, to make such communication, or to
execute or certify such document, on behalf of the Company or the
Guarantor, as the case may be; and
(ii) in respect of whom the Agent has received a certificate of a duly
authorised officer of the Company or the Guarantor,
<PAGE>
2
as the case may be, setting out the name and, where such person is
authorised to execute or certify documents, signature of such person
and confirming such person's authority to act as aforesaid;
"Available Amount" means, in relation to any proposed Advance under either
------------------
Facility, the Total Available Commitments reduced by an amount equal to any
reduction in the Commitment of a Bank which will occur prior to the
commencement of, or during, the Interest Period (or first Interest Period)
relating to such Advance consequent upon a cancellation of the whole or any
part of the Commitment of such Bank pursuant to the terms hereof;
"Available Facility A Commitment" in relation to a Bank means that Bank's
---------------------------------
Facility A Commitment as reduced for the time being and from time to time
in accordance with Clause 3.4, provided that in determining a Bank's
Available Facility A Commitment on any Advance Date, the reduction to be
made under Clause 3.4 shall not take into account the Facility A Advances
which are due to be repaid thereon but shall take into account amounts
subject to a current Advance Request;
"Available Facility A Amount" means the amount of the Total Facility A
-----------------------------
Commitments reduced by the Facility A Loan, provided that in determining
the Available Facility A Amount on any Advance Date there shall be added
back to the aforesaid amount the aggregate (if any) of Facility A Advances
which are due to be repaid thereon;
"Available Facility B Commitment" in relation to a Bank means that Bank's
---------------------------------
Facility B Commitment as reduced for the time being and from time to time
in accordance with Clause 3.4 provided that in determining a Bank's
Available Facility B Commitment on any Advance Date, the reduction to be
made under Clause 3.4 shall not take into account the Facility B Advances
which are due to be repaid thereon but shall take into account amounts
subject to a current Advance Request;
"Available Facility B Amount" in relation to a Bank means the amount of the
-----------------------------
Total Facility B Commitments reduced by the Facility B Loan, provided that
in determining the Available Facility B Amount on any Advance Date there
shall be added back to the aforesaid amount the aggregate (if any) of
Facility B Advances which are due to be repaid thereon;
"Banks" means, subject to Clauses 11.6 and 33, the financial institutions
-------
whose names are set out in the First Schedule and "Bank" means any one of
------
them;
"Commitment" in relation to a Bank means, subject to reduction and
------------
cancellation as herein provided, the aggregate for the time being of its
Facility A Commitment (if it has one) and Facility B Commitment (if it has
one);
"Consolidated Net Worth" means at any time:-
------------------------
the sum of:
(1) the aggregate of the amounts paid up or credited as paid up on the
issued share capital of the Guarantor and the aggregate amount of
capital and revenue reserves of the Group including:-
(a) any amount credited to share premium account;
<PAGE>
3
(b) any capital redemption reserve; and
(c) any balance standing to the credit of the consolidated profit and
loss account of the Group;
and deducting :-
(d) any debit balance on the consolidated profit and loss account of
the Group;
(e) any amounts shown in respect of goodwill; and
(f) an amount equal to any distribution other than to a member of the
Group out of profits earned up to the date of the relevant
financial statements and not provided for therein;
but excluding:-
(g) any amounts shown in respect of minority interests,
all as shown by the consolidated balance sheet comprised either in the
Original Financial Statements or, if applicable, in the consolidated
financial statements of the Group then most recently delivered by the
Guarantor to the Agent pursuant to Clause 19.1.1 (the "relevant
---------
balance sheet"), adjusted, if intangible assets in respect of acquired
--------------
brands are not included in the relevant balance sheet or are included
but not on the basis of inclusion or valuation described in paragraphs
(d) and (n) on pages 44 and 45 of the Original Financial Statements,
to such extent as is necessary to include intangible assets in respect
of acquired brands therein on that basis; plus
(2) the Relevant Fraction of any Relevant Goodwill and for the purposes of
this definition "Relevant Goodwill" means any goodwill on
-------------------
consolidation and any goodwill where the relevant investment or
goodwill has been acquired by the Group prior to the date of the
relevant balance sheet and "Relevant Fraction" means the fraction
--------------------
whose numerator is equal to 5 minus the number of whole years (if any)
which have, as of the date as at which the relevant balance sheet was
prepared, elapsed since the date of the relevant acquisition and whose
denominator is 5 (and so that if the number of whole years which have,
as at the date of the relevant balance sheet, elapsed since the date
of such acquisition is 5 or more the Relevant Fraction shall be zero);
"Consolidated Total Borrowings" means at any time the aggregate amount of
-------------------------------
all obligations of the Group for, or in respect of, financial indebtedness,
as shown by the consolidated balance sheet comprised either in the Original
Financial Statements or, if applicable, in the consolidated financial
statements of the Group then most recently delivered to the Agent pursuant
to Clause 19.1.1 (the "relevant balance sheet"), less the aggregate book
----------------------
value (as included in the relevant balance sheet) of:-
(a) all Liquid Assets which are (in the reasonable opinion of the Company,
having made all reasonable enquiry) unencumbered and freely
transferable to the United Kingdom and which are owned by wholly-owned
members of the Group or (in the case of the Liquid Assets of a member
of the Group which is a partly-owned subsidiary or subsidiary
<PAGE>
4
undertaking) the proportion of the total amount for the time being of
Liquid Assets owned by such member which corresponds to the proportion
of the total nominal amount of the issued equity share capital of such
subsidiary or subsidiary undertaking which is beneficially owned
directly or indirectly by the Guarantor (exclusive of Liquid Assets
constituting or representing obligations of any member or members of
the Group); and
(b) in the case of a member of the Group which is a partly-owned
subsidiary or subsidiary undertaking, the proportion of the total
amounts for the time being outstanding of financial indebtedness owing
by such subsidiary or subsidiary undertaking otherwise than to the
Guarantor or another member of the Group which corresponds to the
proportion of the total nominal amount of the issued equity share
capital of such subsidiary or subsidiary undertaking not beneficially
owned directly or indirectly by the Guarantor (the "Minority
--------
Proportion");
----------
but adding the aggregate book value (as included in the relevant balance
sheet) of the Minority Proportion of the total amount, if any, for the time
being outstanding of financial indebtedness owing to a partly-owned
subsidiary or subsidiary undertaking by the Guarantor or other member of
the Group;
and for the purposes of this definition "Liquid Assets" means (i) any cash
---------------
balance or any amount held on deposit with any body whether corporate or
unincorporated and (ii) any investment in an asset constituting a debt
obligation which (aa) has a maximum remaining maturity, as at the date the
relevant balance sheet has been prepared, of one year (although its
maturity as at its date of creation or issue may have exceeded one year)
and (bb) either is in readily marketable form or consists of a draft, bill,
cheque or note;
"Event of Default" means any of those events or circumstances specified in
------------------
Clause 21;
"Facilities" means Facility A and Facility B and "Facility" means either of
------------ ----------
them or such one of them as the context may require;
"Facility A Commitment" in relation to a Bank means, subject to reduction
-----------------------
and cancellation as herein provided, the amount set opposite its name under
the heading "Facility A Commitment" in the First Schedule or, in the case
of a Transferee, the amount specified in respect of the Facility A
Commitment in the Transfer Certificate given by such Transferee pursuant to
Clause 33;
"Facility A" means the revolving credit facility granted by the Banks to
------------
the Company under Clause 2.1 under which the Banks may make Advances in an
aggregate amount for the time being outstanding not exceeding the Total
Facility A Commitments;
"Facility A Loan" means the aggregate principal amount for the time being
-----------------
outstanding to the Banks under the Facility A;
"Facility B Commitment" in relation to a Bank means, subject to reduction
-----------------------
and cancellation as herein provided, the amount set opposite its name under
the heading "Facility B Commitment" in the First Schedule or, in the case
of a Transferee, the amount specified in respect of the Facility B
Commitment in the Transfer Certificate given by such Transferee pursuant to
Clause
<PAGE>
5
33;
"Facility B" means the revolving credit facility granted by the Banks to
------------
the Company under Clause 2.2 under which the Banks may make Advances in an
aggregate amount not exceeding the Total Facility B Commitments;
"Facility B Loan" means the aggregate principal amount for the time being
-----------------
outstanding to the Banks under the Facility B;
"Facility Office" in relation to a Bank means the office in the United
-----------------
Kingdom identified with its signature below or, in the case of a
Transferee, specified in the Transfer Certificate given by such Transferee
pursuant to Clause 33 or, in any case, such other office in the United
Kingdom as it may from time to time, by notice to the Agent, select;
"Group" means, at any time, the Guarantor and each of its subsidiaries and
-------
subsidiary undertakings and "member of the Group" shall be construed
---------------------
accordingly except that, where the term "member of the Group" is used in
Part 7, such term there means the Company, the Guarantor and any Principal
Subsidiary;
"Instructing Group" in relation to Facility A means a group of Banks the
-------------------
aggregate of whose Facility A Commitments exceeds fifty per cent. of the
Total Facility A Commitments (or, if the Total Facility A Commitments have
been reduced to zero, exceeded fifty per cent. of the Total Facility A
Commitments immediately prior to the reduction thereof to zero);
"Instructing Group" in relation to Facility B means a group of Banks the
-------------------
aggregate of whose Facility B Commitments exceeds fifty per cent. of the
Total Facility B Commitments of the Banks (or, if the Total Facility B
Commitments have been reduced to zero, exceeded fifty per cent. of the
Total Facility B Commitments immediately prior to the reduction thereof to
zero);
"Interest Period" means, in relation to any Advance, such period as may be
-----------------
selected or deemed to be selected in accordance with Clause 9;
"LIBOR" in relation to any Advance and the Interest Period relating thereto
-------
or in relation to an unpaid sum and a period relating thereto in accordance
with Clause 26.1, means the rate determined by the Agent to be:-
(iii) the arithmetic mean (rounded upwards, if necessary, to four
decimal places of one per cent.) of the offered quotations in
dollars for such Interest Period or period which appear on the
display designated as page "LIBO" on the Reuter Monitor Money
Rates Service (or such other page as may replace the LIBO page on
such system for the purpose of displaying London Interbank
Offered Rates of leading banks) as at 11.00 a.m. on the Quotation
Date for such period; or
(iv) if less than two quotations in dollars and for such Interest
Period or period appears on such display, or if no such display
rate is then available for dollars or for such Interest Period
or period, the arithmetic mean (rounded upwards, if necessary,
to four decimal places of one per cent.) of the respective rates
notified to the Agent by each of the Reference Banks as the rate
at which it is offered deposits in dollars for such Interest
Period or period by prime banks in the London Interbank Market at
<PAGE>
6
or about 11.00 a.m. on the Quotation Date for such Interest Period
or period, provided that if on any occasion a Reference Bank fails
to supply the Agent with a quotation of the rate for which such
quotation was required, LIBOR shall, subject to Clause 17.1, be
determined from those quotations which are supplied to the Agent;
"Margin" means:
--------
(a) 0.225 per cent. per annum in respect of any Advance made pursuant to
the Facility A; and
(b) 0.225 per cent. per annum in respect of any Advance made pursuant to
the Facility B;
"Original Financial Statements" means, in relation to the Group, the
-------------------------------
audited consolidated financial statements of the Group for the 52 weeks
ended 1st January, 1994 and, in relation to the Company, the audited
financial statements of the Company for the 52 weeks ended 1st January,
1994;
"Permitted Encumbrance" means:-
-----------------------
(v) a lien or right of set-off arising solely by operation of law; or
(vi) an encumbrance (not falling within paragraphs (iii) or (x) below)
in existence at the date hereof; or
(vii) an encumbrance over land (whether or not including buildings)
which secures any existing or future loan stock, notes or
debentures of any member of the Group which is or are for the
time being listed, quoted or dealt in on a recognised securities
exchange or over-the-counter market and does not cause the total
principal amount secured by all encumbrances referred to in this
paragraph (iii) to exceed [British Pound] 50,000,000 or its
equivalent in any other currency or currencies; or
(viii) an encumbrance over or affecting any property (a) where such
property is acquired by a member of the Group after the date
hereof, being an encumbrance subject to which such property is
acquired, or (b) where such encumbrance is solely to secure
finance raised for the acquisition of such property and/or the
carrying out of any development or other construction works
thereon but only, in the case of (a) above, if (aa) such
encumbrance was not created in contemplation of such acquisition
by a member of the Group and (bb) the principal amount thereby
secured has not been increased in contemplation of, or since the
date of, such acquisition by a member of the Group; or
(ix) an encumbrance over or affecting any property of any company which
becomes a member of the Group after the date hereof, where such
security has been or is created prior to the date on which such
company becomes a member of the Group but only if (a) such
encumbrance was not created in contemplation of such company
becoming a member of the Group and (b) the principal amount of any
facility whereunder amounts outstanding are thereby secured has
not been increased in contemplation of, or since the date of, such
company becoming a member of the Group; or
<PAGE>
7
(x) any encumbrance created or remaining outstanding to secure the
refinancing of any indebtedness which was permitted to be secured
in accordance with the provisions of sub-paragraph (iv) or (v) of
this definition where the principal amount of any facility
whereunder amounts outstanding are thereby secured has not been
increased above the original amount of the facility refinanced; or
(xi) an encumbrance over (a) goods or documents of title thereto or of
the proceeds of sale thereof in favour of any bank or other
financial institution arising under or pursuant to any
arrangements entered into in the ordinary course of business in
connection with the financing of the purchase or sale of such
goods by means of documentary credits, or (b) any sum payable
under any contract (or over any security representing such sum
or otherwise created pursuant to such contract) in respect of
which the major part of the price receivable by a member of the
Group is guaranteed or insured by, or is part of a scheme
operated by, the Export Credits Guarantee Department of the
Department of Trade and Industry (or any governmental department
or other agency in any country fulfilling a similar function) to
secure the financing of such contract or any other private
sector scheme approved by an Instructing Group; or
(xii) any encumbrance created as a result of any intra-group bank
netting arrangement or any bank's right of set-off arising in
relation to the usual operation of the current banking accounts
of any member of the Group; or
(xiii) an encumbrance which an Instructing Group has at any time agreed
shall be a Permitted Encumbrance; or
(xiv) an encumbrance as disclosed in writing to the Agent on or prior
to the date hereof; or
(xv) an encumbrance (not falling within paragraphs (i) to (x) above)
the principal amount secured by which, when aggregated with the
principal amount secured by all other encumbrances falling within
this paragraph (xi), does not exceed [British Pound] 20,000,000
or its equivalent in any other currency or currencies;
"Principal Subsidiary", at any time, means any member of the Group (other
----------------------
than the Company or the Guarantor) whose sales or gross assets as adjusted
for the purposes of consolidation with the financial statements of the
Guarantor for the relevant financial year (and which have been so
consolidated) exceed 2.5 per cent. of the consolidated sales or, as the
case may be, gross assets of the Group for such financial year as included
in the consolidated financial statements of the Group then most recently
delivered by the Guarantor to the Agent pursuant to Clause 19.1.1 or, until
the first statements are so delivered, the Original Financial Statements;
"Quotation Date" in relation to any period for which an interest rate is to
----------------
be determined hereunder means the day on which quotations would ordinarily
be given by prime banks in the London Interbank Market for deposits in
dollars for delivery on the first day of that period;
"Reference Banks" means Barclays Bank PLC, Midland Bank plc, The Toronto-
-----------------
Dominion Bank, Lloyds Bank Plc, National Westminster
<PAGE>
8
Bank PLC and Morgan Guaranty Trust Company of New York and/or such
substitute reference bank or banks as may be agreed by the Company and the
Agent;
"Repayment Date" means,in the case of each Advance made under either
----------------
Facility, the third Anniversary and the expression
" relevant Repayment Date" shall be construed accordingly;
-------------------------
"Requested Amount" in relation to any Advance Request means the aggregate
------------------
principal amount of each Advance therein requested;
"Total Available Commitments" means the aggregate for the time being of all
-----------------------------
the Banks' Available Facility A Commitments and Available Facility B
Commitments;
"Total Commitments" means the aggregate for the time being of all the
-------------------
Banks' Commitments;
"Total Facility A Commitments" means the aggregate for the time being of
------------------------------
all the Banks' Facility A Commitments;
"Total Facility B Commitments" means the aggregate for the time being of
------------------------------
all the Banks' Facility B Commitments;
"Transfer Certificate" means a certificate substantially in the form set
----------------------
out in the Sixth Schedule; and
"Transferee" bears the meaning given to it in Clause 33.1.
------------
B. Any reference in this Agreement to:-
the "Agent" or the "Banks" shall, subject as otherwise provided in this
------- -------
Agreement, be construed so as to include their respective successors and
permitted Transferees and assigns;
a "business day" shall be construed as a reference to a day on which banks
--------------
are open for business (including money transfer and foreign exchange
transactions) in London and New York (excluding Saturdays);
a "Clause" is a reference to a clause hereof;
--------
an "encumbrance" shall be construed as a reference to any mortgage, charge,
-------------
pledge or lien or other security interest;
"financial indebtedness", as at a particular date, shall be construed as a
------------------------
reference to any obligation (other than a contingent obligation) for or in
respect of moneys borrowed or raised by whatever means (including by means
of acceptances, the issue of loan stock, notes or debentures and finance
leases) or for the deferred purchase price of movable or immovable assets
but excluding any obligation in respect of such a deferred purchase price
which:-
(a) has a remaining maturity, as at such date, of one year or less
(although its maturity may have originally exceeded one year); or
(b) does not fall within paragraph (a) or (c) of this definition but
which, when aggregated with all other obligations falling within
this paragraph (b), does not exceed B.P.20,000,000 (or its
equivalent in any other currency or currencies); or
<PAGE>
9
(c) is in respect of debts incurred in the normal course of trading;
"indebtedness" shall be construed so as to include any obligation (whether
--------------
incurred as principal or as surety) for the payment or repayment of money,
whether present or future, actual or contingent;
a "Part" is, subject to any contrary indication, a reference to a part
------
hereof;
a "Schedule" is, subject to any contrary indication, a reference to a
----------
schedule hereto;
a statute shall be construed as a reference to such statute as amended or
-------
re-enacted from time to time, whether before or after the date of this
Agreement;
"tax" shall be construed so as to include any present or future tax, levy,
-----
impost, duty, charges, fees, deductions, compulsory loans, withholdings or
other charge of a similar nature (including, without limitation, any
penalty or interest payable in connection with any failure to pay or any
delay in paying any of the same);
the "winding-up" or "dissolution" of a company or the appointment of an
------------ -------------
"administrator", "administrative receiver" or "receiver" shall be
--------------- ------------------------- -----------
construed so as to include any equivalent or analogous proceedings under
the law of the jurisdiction in which such company is incorporated or any
jurisdiction in which such company carries on business;
a time of day is, unless otherwise stated, a reference to London time;
-----------
"B.P.", "pounds" and "sterling" denote the lawful currency of the United
--- -------- ----------
Kingdom; and
"$" and "dollars" denote the lawful currency of the United States of
--- ---------
America.
C. Any reference in this Agreement to an event which with the giving of any
notice under Clause 21.1 or the passage of time or both would become an
Event of Default shall not be construed as anticipating a breach of the
restriction contained in Clause 20.2.2.
D. Any reference in this Agreement to another agreement shall be construed as
a reference to that other agreement as the same may have been, or may from
time to time be, amended, varied, supplemented or novated.
E. Clause and Part headings are for ease of reference only.
F. For the purposes of this Agreement "subsidiary" and "holding company" shall
------------ -----------------
have the meanings ascribed to them by Section 736 of the Companies Act 1985
and "subsidiary undertaking" shall have the meaning ascribed to it by
------------------------
Section 258 of such Act, and a company is an "affiliate" of another if it
-----------
is a subsidiary or subsidiary undertaking or holding company, or a
subsidiary or subsidiary undertaking of a holding company, of that other
company.
G. There is set out in the Third Schedule a timetable to be applied
<PAGE>
10
for each Advance. For the purpose of construing Parts 3 and 4, any
reference to a "specified" time, shall (unless otherwise agreed by the
-----------
Company, the Agent and the Banks) be construed as a reference to the
relevant time set forth in the said timetable.
H. For the purposes of this Agreement, references to the singular shall
(unless the context otherwise requires) include the plural and vice versa.
---- -----
<PAGE>
11
Part 2
------
THE FACILITIES
--------------
II. The Facilities
--------------
2.1 Facility A: The Banks grant to the Company a revolving credit facility in
----------
the maximum aggregate principal amount of $1,000,000,000 in respect of
which one or more Advances may be made, at the request of the Company and
subject to the terms of this Agreement, from the date of this Agreement
until the third Anniversary. The amount or part of the amount of any
Advance made under the Facility A and repaid pursuant to Clause 10.1 or
prepaid pursuant to Clause 11.3 may be redrawn but not after the third
Anniversary. Subject to the terms of this Agreement, each Bank will
participate through its Facility Office in each Advance under the
Facility A in the proportion which that Bank's Available Facility A
Commitment at the date of the making of the relevant Advance bears to the
Available Facility A Amount as at such date.
2.2 Facility B: The Banks grant to the Company a revolving credit facility in
----------
the maximum aggregate principal amount of $1,400,000,000 in respect of
which one or more Advances may be made, at the request of the Company and
subject to the terms of this Agreement, from the date of this Agreement to
and including the date 364 days from the date of this Agreement. The
amount or part of the amount of any Advance made under the Facility B and
repaid pursuant to Clause 10.2 or prepaid pursuant to Clause 11.3 may be
redrawn but not after the date 364 days from the date of this Agreement.
If on the expiry of such period of 364 days, any Advance under Facility B
is outstanding, such Advance shall become a term loan repayable on the
Repayment Date. Subject to the terms of this Agreement, each Bank will
participate through its Facility Office in each Advance made under the
Facility B in the proportion which that Bank's Available Facility B
Commitment at the date of the making of the relevant Advance bears to the
Available Facility B Amount as at such date.
2.3 Additional Borrower(s): The Guarantor may, at its sole option, from time to
----------------------
time nominate another of its wholly owned subsidiaries as an additional
borrower hereunder or in place of the Company as borrower hereunder (or as
substitute for any previous substitute or additional borrower nominated
under this Clause 2.3) in relation to any or each Facility. The Agent and
the Banks hereby agree that they will enter into such agreements or other
arrangements with the Company, the Guarantor and/or such substitute or
additional borrower as will give effect to such substitution or addition,
provided that any such agreement or arrangement will contain such
provisions as in the reasonable opinion of the Agent will be necessary to
afford adequate protection to the position of the Agent and each Bank
hereunder, including, but without limitation, provisions analogous to those
contained herein relating to the obtaining of any necessary consents the
provision of conditions precedent and legal opinions, representations
relating to Regulations G, T, U or X of the Board of Governors of the
Federal Reserve System and grossing up for any withholding taxes applicable
in the country of residence of such substitute or additional borrower, and
provided further that the obligations of the Guarantor under Clause 22 of
this Agreement shall apply, mutatis mutandis, in respect of such substitute
----------------
or additional borrower and the
<PAGE>
12
representation set forth in Clause 18.18 shall remain true and correct
immediately following such substitution or addition.
III. Purpose of the Facilities
-------------------------
A. The Company agrees that the Facilities are to be used solely for the
following purposes of the Group:-
3.1.1
the Facility A is available to be used for the general corporate
purposes of the Group (including acquisition finance); and
3.1.2
the Facility B is available to be used as short term bridging
finance pending (i) a proposed issue of securities by a member of
the Group which will become due for repayment only at the option
of the issuer or on its winding up or dissolution and/or (ii) a
member of the Group obtaining a long term borrowing facility, but
so that the Company may continue to draw Advances under the
Facility B until the date 364 days after the date of this
Agreement if market conditions should prevent the issue of
securities or the obtaining of a long term borrowing facility as
aforesaid.
B. Without prejudice to the obligations of the Company under Clause 3.1, the
Agent and the Banks shall not be obliged to concern themselves with the
application of amounts advanced hereunder.
C. The Facilities granted by this Agreement are separate and independent and
the use and/or cancellation of either one of the Facilities by the Company
will not prevent the use and/or cancellation of the other Facility.
D. The amount of the Available Facility A Commitment or Available Facility B
Commitment of each Bank will be reduced by the amount of such Bank's
participation in each Advance under the Facility A or (as the case may be)
Facility B.
IV. Conditions Precedent to Availability of the Facilities
------------------------------------------------------
Save as the Agent may otherwise agree, no Advance Request may be issued by
the Company unless the Agent has confirmed to the Company and the Banks
prior to the issue of the first Advance Request that it has received all of
the documents listed in the Second Schedule and that each, in form and
substance, satisfies the requirements of the Agent Provided that the
Company shall be entitled to issue Advance Requests in respect of Facility
A prior to the delivery to the Agent hereunder of the documents numbered 7
and 8 in the Second Schedule so long as the total Advances made pursuant
thereto would not increase the Facility A Loan to an amount in excess of
$500,000,000. The Agent shall provide such confirmation to the Company and
the Banks promptly upon receipt of all the relevant documents in form and
substance which satisfy its requirements.
V. Nature of the Banks' Obligations
--------------------------------
A. The obligations of the Banks hereunder are several.
B. The failure by a Bank to perform its obligations hereunder shall not affect
the obligations of any other Bank or the Company towards any other party
hereto nor shall any such other party or
<PAGE>
13
the Company be liable for the failure by such Bank to perform its
obligations hereunder.
<PAGE>
14
Part 3
------
PRE-ADVANCE PROCEDURES
----------------------
VI. Advance Requests
----------------
A. Subject to the provisions hereof, the Company may utilise either of the
Facilities by sending a duly completed Advance Request in the form set out
in the Fourth Schedule by facsimile or in original hard copy to the Agent
no later than the specified time, followed (in the case of a facsimile) by
delivery of the original of the Advance Request to the Agent no later than
the specified time. Any Advance Request (whether by facsimile or in
original hard copy) shall be signed by two Authorised Signatories and, in
the case of an Advance Request by facsimile shall be of no effect
whatsoever unless its receipt has been confirmed and its authenticity
verified by an Authorised Signatory to the Agent, by telephone call within
one hour of transmission of the relevant facsimile.
B. Each Advance Request, when sent by facsimile or in original hard copy,,
delivered to the Agent as provided in Clause 6.1 and effective hereunder,
shall be irrevocable and shall, inter alia, specify:-
----- ----
6.2.1
under which Facility(ies) the Advance(s) is/are to be made;
6.2.2
the proposed Advance Date;
6.2.3
each Requested Amount, which shall be an integral multiple of
$10,000,000 and not less than $20,000,000 and which shall not
exceed the Available Amount for such Advance; and
6.2.4
the duration, selected in accordance with Clause 9.1, of the
Interest Period (or first Interest Period) relating to each
Advance being requested.
VII. Allocation Amongst the Banks
----------------------------
If on any proposed Advance Date the Banks are required to make an Advance or
Advances pursuant to Clause 6 under either of the Facilities, the amount of each
Advance shall be allocated by the Agent to the Banks in accordance with Clause
2.1 or, as the case may be, Clause 2.2.
<PAGE>
15
Part 4
------
THE ADVANCES
------------
VIII. Making of Advances
------------------
If the Agent notifies any Bank in accordance with Clause 7.2 that it is
required to advance its share of an Advance and if on the proposed Advance
Date relating to such an Advance:-
A. the representations set out in Clause 18 (as if the references in
Clauses 18.14 and 18.15 to the Original Financial Statements were
references to the audited financial statements most recently
delivered to the Agent pursuant to Clause 19.1.1, if any such
statements have been so delivered) are true by reference to the
facts and circumstances then subsisting, or the Banks agree
nevertheless to make such Advance; and
B. no Event of Default or event or circumstance which with the giving of
any notice under Clause 21.1 or the lapse of time or both would
become an Event of Default has occurred which has not been remedied
or waived or would result from the making of such Advance,
then, on such Advance Date, such Bank shall advance its share of such
Advance through its Facility Office to the Company in accordance with
Clause 24.
IX. Interest
--------
A. The duration of each Interest Period for each Advance shall be a period
selected by the Company of one, two, three or six months or (with the
prior consent of all the Banks) any other period, provided that if the
Agent does not receive either in the Advance Request or (in the case of
an Advance under Facility B outstanding after the date 364 days after
this Agreement) by 10.30 a.m. on the second business day before the
expiry of the then current Interest Period, notice of the selected
duration of the first or next Interest Period in respect of any Advance,
the Company shall, subject to Clauses 9.3 to 9.5, be deemed to have
selected a duration of one month for the relevant Interest Period.
B. The first Interest Period in respect of each Advance under either Facility
shall commence on the Advance Date relating to such Advance and shall end
on the last day of the Interest Period specified in the relevant Advance
Request. Each subsequent Interest Period in respect of each Advance under
Facility B outstanding after the date 364 days after this Agreement shall
commence on the last day of the preceding Interest Period in respect of
that Advance.
C. If an Interest Period would otherwise end on a day which is not a business
day that Interest Period shall be extended to the next following business
day thereafter unless the result of such extension would be to carry such
Interest Period over into another calendar month, in which event such
Interest Period shall end on the immediately preceding business day.
D. An Interest Period which commences on the last business day of a calendar
month or an Interest Period which commences on a day for which there is no
numerically corresponding day in the
<PAGE>
16
first, second, third, sixth or (as the case may be) twelfth calendar month
(or such other whole number of calendar months as corresponds to the
length of the relevant Interest Period selected or deemed to be selected
in accordance with Clause 9.1) after the commencement of such Interest
Period shall end on the last business day of the first, second, third,
sixth or (as the case may be) twelfth calendar month (or such other
calendar month as aforesaid) after the commencement of such Interest
Period.
E. Notwithstanding the foregoing, an Interest Period that would otherwise
overrun the relevant Repayment Date shall end upon such relevant Repayment
Date.
F. The Company shall pay accrued interest on each Advance on the last day of
each Interest Period relating to such Advance except that in the case of
an Interest Period exceeding six months such interest shall be paid at six
monthly intervals during the Interest Period (the first such payment to be
made on the date falling six months after the commencement of the relevant
Interest Period (or, if such date is not a business day on the next
following day which is)).
G. The rate of interest applicable to each Interest Period relating to an
Advance shall be the rate per annum determined by the Agent to be the sum
of:-
9.7.1
LIBOR on the Quotation Date for such Interest Period; and
9.7.2
the Margin.
H. The Agent shall promptly notify the Company and the Banks of each
determination of LIBOR made by it pursuant to this Clause 9.
X. Repayment of Advances
---------------------
A. In respect of each Advance made under Facility A , the Company shall repay
such Advance on the last day of the Interest Period relating thereto,
together with accrued interest thereon.
B. In respect of each Advance made under Facility B , the Company shall repay
such Advance, together with interest accrued thereon, on the last day of
any Interest Period which falls within the period of 364 days immediately
following the date hereof and (in the case of any Advance which is
outstanding at the end of the 364th day after the date hereof) shall repay
the same, together with any interest accrued thereon but not previously
paid, on the Repayment Date. The Facility B Commitment of each Bank shall
be cancelled with effect from the 365th day following the date hereof to
the extent it is undrawn at such date.
C. If, on any Advance Date, a Bank is required to participate in an Advance
and a payment is due to such Bank pursuant to Clause 10.1 or 10.2 (in
respect of an Advance under the same Facility), then the Agent shall
(without prejudice to such Bank's obligation to participate in such
Advance or the Company's obligation to make the payment in question
pursuant to Clause 10.1 or 10.2 prior to any application pursuant to this
Clause 10.3 and without prejudice to such Bank's remaining obligations
in relation to such Advance (where such Bank's share of such
<PAGE>
17
Advance exceeds the payment due to it) or the Company's remaining
obligation in relation to such payment (where such Bank's said share is
less than the payment due to it) after any such application) apply any
amounts payable by such Bank to the Company on that Advance Date in or
towards satisfaction of the amount payable by the Company to such Bank on
such Advance Date.
D. The Company shall not repay all or any part of any Advance outstanding
hereunder except at the times and in the manner expressly provided in this
Agreement.
<PAGE>
18
Part 5
------
CANCELLATION AND PREPAYMENT
---------------------------
XI. Cancellation and Prepayment
---------------------------
A. The Company may without penalty and at any time between (and including) the
date of this Agreement and the relevant Repayment Date, by giving not less
than ten business days' irrevocable written notice to the Agent, cancel all
or any part (being a minimum of U.S.$10,000,000) of the Total Facility A
Commitments and/or Total Facility B Commitments which will not, on the date
the notice of cancellation takes effect, be outstanding or requested in a
current Advance Request.
B. Upon any cancellation pursuant to Clause 11.1 above becoming effective, the
Total Facility A Commitments and/or, as the case may be, Total Facility B
Commitments shall be appropriately reduced and the Facility A Commitment
and/or, as the case may be, Facility B Commitment of each of the Banks
shall be proportionately reduced.
C. The Company may without penalty and at any time between (and including) the
date of this Agreement and the relevant Repayment Date, by giving not less
than ten business days' irrevocable written notice to the Agent, prepay any
Advance under either Facility in whole or in part (but if in part, being a
minimum of $10,000,000) together with accrued interest thereon and, where
the prepayment is made otherwise than on the last day of an Interest Period
relating to such Advance, and any amounts payable pursuant to Clause 12.1,
Clause 14.1 or Clause 26.4 relating to the amount prepaid.
D. If the amount of any payment to be made to or for the account of any Bank
is increased under Clause 12.1 or any Bank claims indemnification under
Clause 14.1 or the interest rate relating to any Advance falls to be
determined in accordance with Clause 17, then, without prejudice to Clauses
12.1, 14.1 or 17, the Company may, by not less than ten business days'
prior written notice to the Agent, cancel such Bank's Commitment whereupon
such Bank shall cease to be obliged to make Advances hereunder and its
Commitment shall be reduced to zero.
If the Company gives a notice of cancellation pursuant to this Clause 11.4
the Company may at the same time give notice to the Agent of its intention
to prepay all outstanding Advances made by such Bank together with accrued
interest thereon upon such date as may be specified in such notice together
with all other sums then due or, in the case of fees, capable of
calculation on such date.
E. Each notice of cancellation given pursuant to this Clause 11 shall be
irrevocable and shall specify the date upon which such cancellation is to
take effect.
F. If at any time:-
11.6.1
the Commitment of any Bank is cancelled or reduced to zero or has
been transferred in its entirety to one or more Transferees in
accordance with the terms of this Agreement;
<PAGE>
19
11.6.2
all indebtedness owed to such Bank by the Company hereunder has
been finally satisfied in full; and
11.6.3
such Bank is under no further actual or contingent obligation
hereunder,
then such Bank shall cease to be a party hereto and a Bank for the purposes
hereof.
G. On the day falling 364 days after the date of this Agreement the Available
Facility B Commitment of each Bank shall be cancelled and on the third
Anniversary the Commitment of each Bank shall be (if it has not already
been) cancelled and reduced to zero.
<PAGE>
20
Part 6
------
CHANGE IN CIRCUMSTANCES
-----------------------
XII. Taxes
-----
A. Each payment to be made by the Company or the Guarantor to any Bank or to
the Agent on such Bank's behalf shall be made free and clear of and without
deduction for or on account of any United Kingdom tax unless the Company
or the Guarantor as the case may be, is required to make such a payment
subject to the deduction or withholding of any such tax, in which case the
sum payable by the Company or the Guarantor as the case may be, in respect
of which such deduction or withholding is required to be made shall
(subject to Clauses 12.2 and 33.7) be increased, by way of a payment of
additional interest, to the extent necessary to ensure that, after the
making of such deduction or withholding, such person receives (on the due
date for such payment) and retains (free from any liability in respect of
any such deduction or withholding) a net sum equal to the sum which it
would have received and so retained had no such deduction or withholding
been made or required to be made.
B. So long as the Company or, as the case may be, the Guarantor is resident in
the United Kingdom for United Kingdom tax purposes, no such additional
interest shall be payable under Clause 12.1 in respect of any deduction or
withholding of tax which would not have been required to be deducted or
withheld if the relevant Bank had at the date on which such deduction or
withholding was required to be made been a bank carrying on, and recognised
by the Inland Revenue as carrying on, a bona fide banking business in the
United Kingdom for the purposes of Sections 338 and 349 of the Income and
Corporation Taxes Act 1988 and bringing the interest payable hereunder into
account as a trading receipt of such business or was otherwise qualified
under English tax law to receive interest free of withholding tax.
C. Each Bank represents as at the date of this Agreement, and each Transferee
shall be deemed, when executing the Transfer Certificate referred to in
Clause 33.1, to represent, to the Company and the Guarantor that it carries
on, and is recognised by the Inland Revenue as carrying on, a bona fide
banking business in the United Kingdom and undertakes that so long as such
carrying on and recognition continue to be relevant for freedom under
English law and practice from withholding tax on interest, it will:-
12.3.1
while it so carries on, and remains so recognised, bring into
account as a trading receipt all interest received by it
hereunder in computing the profits of such banking business for
the purposes of United Kingdom taxation; and
12.3.2
without delay notify the Company should it cease so to carry on
or to be so recognised.
XIII. Tax Receipts, etc.
------------------
A. If at any time the Company or the Guarantor , is required by law
<PAGE>
21
to make any such deduction or withholding as is referred to in Clause 12.1
(or if thereafter there is any change in the rate at which or the manner in
which such deduction or withholding is calculated) the Company or the
Guarantor , as the case may be, shall promptly notify the Agent.
B. If the Company or the Guarantor makes any payment hereunder in respect of
which it is required by law to make any such deduction or withholding as
aforesaid it shall pay the full amount to be deducted or withheld to the
relevant taxation or other authority within the time allowed for such
payment under applicable law and shall deliver to the Agent, as soon as
reasonably practicable and if available, an original receipt (or a
certified copy thereof) issued by such authority evidencing the payment to
such authority of all amounts so required to be deducted or withheld from
such payment or, if not so available, a certificate of such deduction or
withholding signed by the Company or the Guarantor as the case may be.
C. In the event that, after the Company or the Guarantor or as the case may
be, is required to pay and has paid any additional interest under Clause
12.1, any Bank shall, based on a proper and reasonable interpretation of
the relevant laws and regulations, receive, in relation to or in respect of
such additional interest or the payment to which such additional interest
relates, the benefit of a credit against or of a remission for or a
deduction from or in respect of any tax payable by it (any of the foregoing
being referred to as a " saving"), such Bank shall, to the extent that it
--------
can do so without prejudicing such Bank's right to the relevant saving or
any other relief or allowance which may be available to it under applicable
law and without involving such Bank in an unreasonable administrative
burden and subject to the obligation of the Company or the Guarantor , as
the case may be, to repay such amount to such Bank, on its demand, if the
relevant saving is subsequently disallowed or cancelled, reimburse the
Company or the Guarantor , as the case may be, with such amount as such
Bank shall in its sole opinion have concluded to be the amount or value of
the relevant saving Provided that no Bank shall be obliged to make any such
payment until the tax return on the basis of which such Bank has determined
such amount has been filed. Nothing herein contained shall interfere with
the right of a Bank to arrange its tax affairs in whatever manner it thinks
fit. Each Bank will promptly certify to the Company the amount of any
saving received by it and any such reimbursement shall be made promptly
upon the amount of such saving being received by it. Nothing provided
herein shall oblige any Bank to disclose any information or other matters
relating to its tax affairs to any person.
XIV. Increased Costs
---------------
A. If by reason of the introduction after the date hereof of, or any change
after the date hereof in, applicable law or any change after the date
hereof in its interpretation or administration and/or by reason of
compliance with any request from or requirement of any central bank or
other fiscal, monetary or other authority made after the date hereof,
whether or not having the force of law, including, without limitation, a
request or requirement which affects the manner in which a Bank (which
expression in this Clause 14.1 includes any holding company of a Bank which
is the subject of supervision by bank regulatory authorities) allocates
capital resources to its obligations hereunder but excluding (save where,
and insofar as, such request or requirement is amended after the date of
this
<PAGE>
22
Agreement) the application, by an authority having jurisdiction over any of
the Banks in respect of such Bank's capital adequacy, of any applicable law
or such authority's requirements implementing and/or supplementing the EC
Solvency Ratio Directive or the rules of the Bank for International
Settlements or recommendations for the international convergence of capital
measurement and capital standards:-
14.1.1
a Bank incurs a cost for the first time, or suffers an increase
in an existing cost, as a result of its having entered into
and/or performing its obligations under this Agreement and/or
assuming or maintaining its Commitment under this Agreement; or
14.1.2
a Bank is unable to obtain the rate of return on its overall
capital which it would have achieved but for its entering into
and/or performing its obligations and/or assuming or maintaining
its Commitment under this Agreement; or
14.1.3
there is any increase in the cost to or a reduction in the amount
payable to or the effective return to a Bank of funding or
maintaining all or any of the advances comprised in a class of
advances formed by or including the Advances made by it
hereunder; or
14.1.4
a Bank becomes liable to make any payment on account of tax (not
being a franchise tax or a tax imposed on the net income or
profits of its Facility Office by the jurisdiction in which its
Facility Office is located or a franchise tax or a tax imposed on
its net income or profits by a jurisdiction in which such Bank is
resident or incorporated or its principal office is for the time
being located) on or calculated by reference to the amount of
Advances made by it hereunder and/or any sum received or
receivable by it hereunder,
then (subject to Clause 33.7) the Company shall from time to time, within
30 business days of demand by the Agent, pay to the Agent for the account
of that Bank amounts sufficient to indemnify that Bank against, as the case
may be:-
14.1.5
such cost or increase in cost;
14.1.6
such reduction in the rate of return;
14.1.7
such proportion of such increased cost, amount payable and/or
effective return as is in the reasonable opinion of that Bank
attributable to its funding or maintaining of Advances hereunder;
or
14.1.8 such liability.
B. 14.2.1
A Bank intending to make a claim pursuant to Clause 14.1 shall within
a reasonable time after becoming aware of the event by reason of which
it is entitled to do so notify
<PAGE>
23
the Agent of such event, and shall within a reasonable time thereafter
notify the Agent of the quantum of such claim, giving details and
reasonable evidence (including, in the case of a claim under Clause
14.1.1 or 14.1.2, the bases and assumptions upon which its estimate of
such cost, increase in cost or loss is founded) of the reasons and
facts supporting such claim but not matters the Bank regards as
confidential in relation to its funding arrangements. The Agent shall
forthwith notify the Company of any notification received by it
pursuant to this Clause 14.2.1; and
14.2.2
the Company shall use any information supplied to it pursuant to
Clause 14.2.1 only for the purposes of protecting its rights
under this Agreement and subject thereto shall hold such
information in confidence and not disclose the same except to the
extent required by law, an order of a court or the request of a
monetary or other fiscal or regulatory authority or to the extent
that it is necessary for such information to be disclosed to the
Company's agents or auditors for the purposes of processing or
evaluating the claim to which such information relates (provided
that the Company will procure that any such recipient of the
information will keep the same confidential) or to the extent
that it is or becomes a matter of public knowledge otherwise than
by disclosure directly or indirectly by the Company in breach of
the provisions of this Clause 14.2.2.
C. Clause 14.1 shall not apply so as to oblige the Company to compensate any
Bank for any cost, increased cost, reduction or liability:-
14.3.1
for which such Bank is effectively receiving compensation through
the operation of Clause 12 or for which Clause 12 is expressed to
be the exclusive remedy; or
14.3.2
resulting from any change in relation to taxation on the net
income or profits of a Bank imposed in the jurisdiction in which
such Bank is resident or incorporated or its principal office is
for the time being located or on the net income or profits of a
Bank's Facility Office imposed in the jurisdiction in which that
Facility Office is located; or
14.3.3
resulting from such Bank being subject to a requirement to treat
its Facility B Commitment on the same terms as its Facility A
Commitment for capital adequacy purposes, such Bank's sole
compensation in respect thereof being an increase in the rate of
its commitment fee payable under Clause 27.2.2 (insofar only as
the same is payable to such Bank for the period during which it
is subject to a requirement as aforesaid) by 0.0375 per cent. per
annum.
XV. Illegality
----------
A. If at any time it is unlawful for a Bank to make, fund or allow to remain
outstanding all or any of the Advances made or to be
<PAGE>
24
made by it hereunder, then that Bank shall, promptly after becoming aware
of the same, deliver to the Company through the Agent a certificate to that
effect and:-
15.1.1
such Bank shall not thereafter be obliged to make Advances
hereunder, and the amount of its Commitment shall be reduced to
zero; and/or
15.1.2
if the Agent at the request and on behalf of such Bank so
requires, the Company shall on such date (being no earlier than
the last day on which such Advances may lawfully remain
outstanding hereunder) as the Agent shall have specified repay
the outstanding Advances made by such Bank together with accrued
interest thereon and all other amounts owing to such Bank under
this Agreement (including, without limitation, any amounts
payable under clause 26).
XVI. Mitigation
----------
If, in respect of any Bank, circumstances arise which would or would upon
the giving of notice result in:-
A. in the case of a Bank, the reduction of its Commitment to zero
pursuant to Clause 15.1; or
B. an increase in the amount of any payment to be made to it or for its
account pursuant to Clause 12, 13 or 24; or
C. a claim for indemnification pursuant to Clause 14,
then, without in any way limiting, reducing or otherwise qualifying the
rights of such Bank or the Company's obligations under any of the Clauses
referred to in Clauses 16.1, 16.2 and 16.3, such Bank shall promptly upon
becoming aware of the same notify the Agent thereof and, in consultation
with the Agent and the Company, and to the extent that it can do so without
prejudice to its own position, take such reasonable steps as may be
reasonably open to it to mitigate the effects of such circumstances
including the transfer of its Facility Office to another jurisdiction or
the transfer of its rights and obligations hereunder to another financial
institution reasonably acceptable to the Company and willing to participate
in the relevant Facility in which such Bank is then participating or the
restructure of its participation in the relevant Facility in a manner which
will avoid the event in question and on terms mutually acceptable to such
Bank and the Company.
XVII. Market Disruption
-----------------
A. If, in respect of any Interest Period relating to an Advance, the Agent is
unable to make any determination of LIBOR required to be made by it
pursuant to Clause 9.7 in connection therewith, by reason of the failure of
two or more Reference Banks to supply the necessary quotations then the
Agent shall promptly notify the Company and the Banks of such event.
B. Any such Advance (as is referred to in Clause 17.1) made by a Bank
hereunder shall bear interest during the Interest Period relating to such
Advance at the rate per annum determined by the Agent to be the sum of:-
<PAGE>
25
17.2.1
the cost to such Bank (as certified by it to the Company with a
copy to the Agent and expressed as a rate per annum) of funding
such Advance from whatever source it may reasonably select; and
17.2.2
the applicable Margin in relation thereto.
C. The Agent (on behalf of and after consultation with the Banks) shall,
promptly after giving the notice referred to in Clause 17.1, negotiate in
good faith with the Company with a view to agreeing an alternative basis to
that set out in Clause 9.7 for calculating the interest payable on any
future Advance to be made hereunder.
D. If an alternative basis is so agreed in writing by the Agent (on behalf of
and with the consent of all the Banks) and the Company, it shall take
effect in accordance with its terms in relation to all Advances made
thereafter until the Agent (on behalf of and with the consent of all the
Banks) and the Company agree to revert to the provisions of Clause 9 for
the determination of the rates of interest applicable to Advances
hereunder.
E. The Agent (on behalf of all the Banks) agrees to consult the Company at
least once every 30 days after the occurrence and during the continuance of
the circumstances specified in this Clause 17 with a view to reverting to
the provisions of Clause 9 for the determination of the rates of interest
applicable to Advances hereunder.
<PAGE>
26
Part 7
------
REPRESENTATIONS, COVENANTS AND DEMAND REPAYMENT
-----------------------------------------------
XVIII. Representations
---------------
The Company and the Guarantor each hereby represents to each of the other
parties hereto that:-
A. it is a company duly incorporated and validly existing under the laws
of England with power to carry on its business as it is now being
conducted;
B. it has power to enter into this Agreement and to exercise its rights
and perform its obligations hereunder, and all corporate or other
action required to authorise its execution of this Agreement and its
performance of its obligations hereunder has been duly taken;
C. no member of the Group has taken any corporate action nor have any
other steps been taken or legal proceedings been started or (to the
best of the knowledge and belief of the Company or the Guarantor)
threatened against any member of the Group for its winding-up,
dissolution or administration or for the appointment of an
administrator, receiver, trustee or similar officer of it or of any or
all of its assets and revenues (other than a winding up while solvent
of a Principal Subsidiary);
D. no member of the Group is in breach of or default under any agreement
to which it is a party or which is binding on it or any of its assets
to an extent or in a manner which is likely materially to prejudice
the ability of the Company or the Guarantor to perform any of its
material obligations under this Agreement;
E. no action, arbitration or administrative proceeding of or before any
court or agency which is likely materially to prejudice the ability of
the Company or the Guarantor to perform any of its material
obligations under this Agreement has been started or (to the best of
the knowledge and belief of the Company or the Guarantor) threatened;
F. no encumbrance (save for Permitted Encumbrances) exists over all or
any of the present or future revenues or assets of any member of the
Group as security for any of its financial indebtedness (and, for the
purposes of this Clause 18.6, the term "financial indebtedness" shall
be construed as if the exclusion of any contingent obligation did not
apply);
G. its execution of this Agreement and its exercise of its rights and
performance of its obligations hereunder will not result in the
existence of, nor oblige any member of the Group to create, any
encumbrance over all or any of its present or future revenues or
assets;
H. (to the best of the knowledge and belief of the Guarantor, having made
all reasonable enquiry) the Guarantor is not a subsidiary of any other
company and no offer has become unconditional which would result in
the offeror or
<PAGE>
27
offerors acquiring voting shares in the capital of the Guarantor which
together with any such shares already held by such offeror or offerors
and its or their respective affiliates would carry more than 50 per
cent. of the votes capable of being cast at a general meeting of the
Guarantor or a resolution to appoint a director;
I. its execution of this Agreement and its exercise of its rights and
performance of its obligations hereunder will not contravene any
provision of law, statute, rule or regulation to which it is subject,
the contravention of which would be likely materially to prejudice the
ability or power of the Company or the Guarantor to perform its
obligations under this Agreement, or violate any provision of its
Memorandum or Articles of Association or any agreement or other
instrument by which it is bound;
J. its indebtedness under this Agreement will rank at least pari passu
---- -----
with all its other unsecured and unsubordinated financial indebtedness
with the exception of financial indebtedness which is subject to liens
or rights of set-off arising in the ordinary course of business and
financial indebtedness which is preferred by operation of law;
K. the obligations expressed to be assumed by it in this Agreement are
its legal, valid and binding obligations;
L. all acts, conditions and things (including, without limitation, the
grant or making of any consent, approval, authorisation, filing or
registration required in connection with the performance by it of, or
the validity and binding nature of or admissibility in evidence, this
Agreement) required to be performed, fulfilled or done in order:-
18.12.1
to enable it lawfully to enter into, exercise its rights
under and perform and comply with the obligations expressed
to be assumed by it in this Agreement; and
18.12.2
to ensure that the obligations expressed to be assumed by it
herein are legal, valid and binding,
have been duly performed, fulfilled and done;
M. to the best of the knowledge and belief of the Company and the
Guarantor, no event which is, or would, with the giving of any notice
under Clause 21.1 or the passage of time or both, become, an Event of
Default has occurred (which has not been remedied or waived);
N. the Original Financial Statements were prepared (save as otherwise
indicated therein and/or in the notes thereto) in accordance with
accounting principles generally accepted in England and consistently
applied and give (in conjunction with the notes thereto) a true and
fair view of the consolidated financial condition of the Group as of
the date as at which they were prepared and the consolidated results
of the operations of the Group during the financial year then ended;
<PAGE>
28
O. as of the date as at which the Original Financial Statements were
prepared no member of the Group whose financial statements were
included in such consolidation had any liabilities (contingent or
otherwise) which were material in the context of the Group taken as a
whole and were not disclosed thereby (or by the notes thereto) or
provided for therein, and which should have been so disclosed or
provided for;
P. since the date as of which the Original Financial Statements were
prepared there has been no material adverse change in the business or
financial condition of any member of the Group which is likely
materially to prejudice the ability of the Company or the Guarantor to
perform its obligations under this Agreement;
Q. not less than 40 per cent. of the consolidated sales of the Group are
derived from the manufacture, distribution or sale of fast moving
consumer goods and/or intermediate products;
R. neither the making of any Advances hereunder, nor the use of proceeds
thereof, will violate or be inconsistent with the provisions of
Regulations G, T, U or X of the Board of Governors of the Federal
Reserve System; and
S. each of the representations in Clauses 18.1 to 18.4 (inclusive),
Clauses 18.6 to 18.15 (inclusive) and Clause 18.17 will be correct and
complied with in all material respects on each date on which an
Advance is requested and made and on each Interest Payment Date as if
repeated then by reference to the then existing circumstances (but so
that references therein to the Original Financial Statements shall,
where appropriate, be deemed to be references to the audited
consolidated financial statements of the Group most recently delivered
to the Agent pursuant to Clause 19).
XIX. Financial Information
---------------------
A. The Guarantor shall:-
19.1.1
as soon as the same become available, but in any event within 120
days after the end of each financial year, deliver to the Agent
in sufficient copies for the Banks the audited consolidated
financial statements of the Group for such financial year
together with a certificate signed by the Finance Director of the
Guarantor setting out the computations of Consolidated Net Worth
as at the end of such financial year and confirming compliance
with Clause 20.2.2;
19.1.2
as and when the same are sent to the Guarantor's shareholders,
deliver to the Agent in sufficient copies for the Banks such
interim financial statements of the Group as are sent to the
Guarantor's shareholders;
19.1.3
from time to time deliver to the Agent, for the Banks only, such
other information in the possession or control of the Guarantor
about the business and
<PAGE>
29
financial condition of the Group as the Agent may reasonably
require, provided that the Guarantor shall be under no obligation
to supply any information the supply of which would be contrary
to any confidentiality obligation binding on the Guarantor or any
affiliate of the Guarantor or which is in the Guarantor's opinion
inside information (within the meaning of the Criminal Justice
Act 1993) and provided further that any information so supplied
to the Agent (and/or by the Agent to each or any Bank) shall only
be used by it for the purposes of protecting its rights under
this Agreement and be held in confidence and not disclosed except
to the extent required by law, an order of a court of competent
jurisdiction or the request of a monetary, regulatory or other
fiscal authority or body in England or the jurisdiction of the
head office of the Agent or the Bank making such disclosure or,
with the prior written consent of the Guarantor, such consent not
to be unreasonably withheld or delayed, to the extent that it is
reasonably necessary for such information to be disclosed to any
other person for the purposes of this Agreement, provided always
that such Bank shall procure that such person shall hold any such
information in confidence and not disclose such information to
any other person or to the extent that it is or becomes a matter
of public knowledge otherwise than by disclosure directly or
indirectly by such Bank and for this purpose the Guarantor may
require the Agent and/or any Bank to enter into a confidentiality
undertaking in the form set out in the Fifth Schedule in respect
of such information; and
19.1.4
deliver to the Agent at the same time as its audited consolidated
financial statements a list of those subsidiaries or subsidiary
undertakings which are, on the basis of such consolidated
financial statements, Principal Subsidiaries and, if the Agent so
requests, thereafter cause its auditors to confirm the accuracy
of such list.
B. The Company shall as soon as the same become available, but in any event
within 120 days after the end of each financial year, deliver to the Agent
in sufficient copies for the Banks the audited financial statements of the
Company for such financial year.
XX. Covenants
---------
A. The Company and the Guarantor each undertakes with the Banks that it will:-
20.1.1
ensure that at all times its indebtedness under this Agreement
ranks at least pari passu with all of its other unsecured and
---- -----
unsubordinated financial indebtedness except financial
indebtedness which is subject to liens or rights of set-off
arising in the ordinary course of business and financial
indebtedness which is preferred solely by operation of law; and
20.1.2
<PAGE>
30
promptly inform the Agent of the occurrence of any event which is
or would (with the passage of time or the giving of notice under
Clause 21.1 or both) become an Event of Default and, upon receipt
of a written request to that effect from the Agent, confirm to
the Agent that save as previously or otherwise notified to the
Agent no such event has occurred which has not been remedied or
waived.
B. The Guarantor undertakes with the Banks that:-
20.2.1
it will not, and that it will procure that each member of the
Group does not, without the prior written consent of an
Instructing Group create or permit to subsist any encumbrance
(save for Permitted Encumbrances) over any or all of its present
or future revenues or assets as security for all or any of its
financial indebtedness (and, for the purposes of this Clause
20.2.1, the term "financial indebtedness" shall be construed as
if the exclusion of any contingent obligation did not apply);
20.2.2
the Consolidated Total Borrowings as at 1st January, 1994 or as
at the last day of the most recent subsequent financial year for
which audited consolidated financial statements shall have been
delivered to the Agent pursuant to Clause 19.1.1 will not exceed
one and one-half times Consolidated Net Worth as at that date.
XXI. Demand Repayment
----------------
A. If:-
21.1.1
the Company or the Guarantor fails to pay any sum due from it
under this Agreement at the time and in the manner specified
herein and such failure shall not be remedied (in the case of
payment of interest) within five business days thereafter or (in
the case of payment of principal) two business days thereafter,
provided that if such failure is solely the result of any bank or
financial institution not promptly remitting a payment as
instructed by the Company or the Guarantor and if the Company or
the Guarantor, as the case may be, has taken all reasonable steps
to cause such remittance to be made, the period for the remedy of
such payment failure shall be extended by a further three
business days; or
21.1.2
any material representation or statement made by the Company or
the Guarantor in this Agreement or in any notice or other
document, certificate or statement delivered by it pursuant
hereto is or proves to have been incorrect or misleading in any
material respect when made; or
21.1.3
the Company or the Guarantor fails duly to perform any other
obligation expressed to be assumed by it in this Agreement and
such default (if capable of remedy) is not remedied within thirty
days after the
<PAGE>
31
Agent has given notice in writing thereof to the Company or the
Guarantor, as the case may be; or
21.1.4
any financial indebtedness of any member of the Group (a) is not
paid when due or within any originally stated applicable grace
period relating thereto or (b) is declared to be or otherwise
becomes due and payable prior to its specified maturity by reason
of default, except, in the case of (a) or (b), where (i) there is
(in the opinion of an Instructing Group and after consultation
with the Company) a bona fide dispute in respect of such
financial indebtedness or (ii) the aggregate amount of such
financial indebtedness of all members of the Group is less than
or equal to [British Pound]1,000,000 or its equivalent in other
currencies; or
21.1.5
any execution or distress is levied against, or a receiver is
appointed or an encumbrancer takes possession of the whole or any
substantial part of, the property, undertaking or assets of any
member of the Group and is not satisfied, removed or discharged
within 30 days; or
21.1.6
any member of the Group is unable to pay its debts as they fall
due, commences negotiations with any one or more of its creditors
with a view to the general readjustment or rescheduling of its
indebtedness or makes a general assignment for the benefit of or
a composition with its creditors; or
21.1.7
any member of the Group takes any corporate action (save as
previously approved in writing by the Agent or an Instructing
Group) or other steps are taken or legal proceedings are started
(and are not discharged within 30 days), for its winding-up,
dissolution, liquidation or administration (other than (a) a bona
fide reconstruction or amalgamation while solvent on terms
previously approved in writing by the Agent or an Instructing
Group or (b) a voluntary solvent winding up of a Principal
Subsidiary where the surplus assets of such Principal Subsidiary
are distributable to the Company, the Guarantor or any affiliate
of the Guarantor) or for a transfer of the whole of its business
(other than a transfer, in the case of a Principal Subsidiary, to
or for the benefit of the Company, the Guarantor or any affiliate
of the Guarantor or for full consideration receivable by such
Principal Subsidiary or the Company, the Guarantor or any
affiliate of the Guarantor) or for the making of an
administration order or for the appointment of an administrator,
administrative receiver, receiver, trustee or similar officer of
it or of any or all of its revenues and assets; or
21.1.8
at any time it becomes unlawful under English or US law for the
Company or the Guarantor to perform any of its payment
obligations under this Agreement; or
21.1.9
<PAGE>
32
there shall occur any material adverse change since the date as
at which the Original Financial Statements were prepared in the
business or financial condition of any member of the Group which
is likely materially to prejudice the ability of the Company or
the Guarantor to perform any of its material obligations under
this Agreement,
then and in any such case and at any time thereafter (so long as such Event
of Default shall not have been remedied or waived (but in the case of a
waiver only so long as such waiver is validly continuing in accordance with
its terms)) the Agent may (and, if so instructed by the relevant
Instructing Group, shall) by written notice to the Company:-
21.1.10
cancel the Facility A Commitments or, as the case may be, the
Facility B Commitments whereupon the same shall be so cancelled
and reduced to zero; and/or
21.1.11
declare all the outstanding Facility A or Facility B Advances
together with any other sums payable hereunder, to be immediately
due and payable or have become due and payable on demand,
whereupon the same shall, immediately or in accordance with such
notice, become so due and payable, in each case by the Company,
together with accrued interest thereon.
B. If, pursuant to clause 21.1.11 the Agent declares the outstanding
Facility A or, as the case may be, Facility B Advances to be due and
payable on demand, then at any time thereafter the Agent may (and, if so
instructed by the relevant Instructing Group, shall) by written notice to
the Company (a) call for repayment of such Advances on such date as may be
specified in such notice whereupon such Advances shall become due and
payable on the date so specified together with all interest and other sums
payable under this Agreement or (b) withdraw such declaration with effect
from the date specified in such notice.
C. If the Guarantor shall become a subsidiary of another company or an offer
has become unconditional which will result in the offeror or offerors
acquiring voting shares in the capital of the Guarantor which together with
any shares already held by such offeror or offerors and its or their
respective affiliates would carry more than 50 per cent. of the votes
capable of being cast at a general meeting of the Guarantor or a resolution
to appoint a director, then the Agent may (and, if so instructed by the
relevant Instructing Group, shall) within 30 days of the state of affairs
hereinbefore described coming into effect give written notice to the
Company that the Banks intend, with effect from the last of the 30 days
aforesaid, to:-
21.3.1
cancel the Facility A Commitments or, as the case may be, the
Facility B Commitments; and/or
21.3.2
declare all the outstanding Facility A or Facility B Advances
together with any other sums payable hereunder, to be due and
payable by the Company;
and such notice shall thereon take effect unless prior to the
<PAGE>
33
last of the 30 days aforesaid the Agent shall have cancelled the same by
notice in writing to the Company.
<PAGE>
34
Part 8
------
GUARANTEE
---------
XXII. Guarantee
---------
A. The Guarantor hereby:-
22.1.1
irrevocably and unconditionally guarantees to each of the Agent
and the Banks the due and punctual payment when due in the
relevant currency of any sum or sums from time to time due, owing
or incurred from the Company under this Agreement (hereinafter
collectively called the "Guaranteed Obligations") and agrees to
------------------------
pay on demand of the Agent any sum or sums which the Company is
liable to pay under the terms hereof and which the Company has
not duly and punctually paid in accordance with the terms hereof
provided that any such demand shall be in writing and accompanied
by a statement setting out, in reasonable detail, the basis upon
which such sum or sums were calculated; and
22.1.2
agrees as a primary obligation to indemnify the Agent and the
Banks on demand of the Agent against any loss incurred by any of
them as a direct or indirect result of any of the purported
obligation or liability of the Company which would have been the
subject of the guarantee in clause 22.1.1 had it been valid and
enforceable being or becoming void, voidable or unenforceable for
any reason whatsoever, whether or not known to the Agent or any
of the Banks or otherwise, the amount of such loss being the
amount which the person or persons suffering it would otherwise
have been entitled to recover from the Company.
B. The obligations of the Guarantor contained in this Clause are to be
continuing obligations which:-
22.2.1
shall continue in full force and effect irrespective of the
legality, validity or enforceability of any other provisions of
this Agreement and notwithstanding the winding-up or dissolution
of the Company or any change in its status, function, control or
ownership;
22.2.2
shall not be satisfied by any intermediate payment or
satisfaction of any part of the Guaranteed Obligations;
22.2.3
shall remain in operation until all monies owing in respect of
the Guaranteed Obligations have been paid in full;
22.2.4
shall continue in full force and effect irrespective of any
waiver or release of any obligation of the
<PAGE>
35
Company under this Agreement; and
22.2.5
shall be in addition to and not in substitution for or in
derogation of any other security in respect of the Guaranteed
Obligations held by any person.
C. The obligations of the Guarantor contained in this Clause 22 shall be
primary obligations and debts of the Guarantor and accordingly no person
shall be obliged before enforcing such obligations to make any demand of
the Company or to take proceedings or obtain judgment against the Company
or any other person.
D. The Guarantor agrees that its obligations under this Clause 22 shall not be
in any way discharged or impaired by any forbearance (whether as to payment
or otherwise) or any time or other indulgence given to the Company in
relation to all or any of the Guaranteed Obligations or by any act, thing,
omission or means which, but for this provision, would or might constitute
a legal or equitable discharge or defence of a mere surety.
E. The Guarantor agrees that, so long as any sums are owed by the Company in
respect of the Guaranteed Obligations, any right which the Guarantor may at
any time have by reason of the performance by the Guarantor of its
obligations under this Clause 22 to be indemnified or to have any recourse
to the Company or any of its assets (whether by way of subrogation or
otherwise) by the Company shall be exercised in such manner and upon such
terms as the Agent may require, and that any monies at any time received by
it as a result of the exercise of any such rights shall be held by it for
and on behalf of and to the order of the Agent for application in or
towards payment of any sums at any time owed by the Company in respect of
the Guaranteed Obligations.
F. A certificate delivered by the Agent to the Company certifying the amount
due from the Company in respect of the Guaranteed Obligations at the date
of such certificate and accompanied by a statement setting out in
reasonable detail the basis on which such amount was calculated shall be
prima facie evidence of the amount due from the Guarantor under this Clause
22.
G. Any discharge given to the Guarantor in respect of its obligations under
this Clause 22 shall be, and shall be deemed always to have been, void if
any act, matter or thing on the faith of which that discharge was given is
subsequently avoided by or pursuant to any provision of law and if any such
discharge is avoided or reduced by virtue of any provision or enactment
relating to bankruptcy, insolvency or liquidation for the time being in
force the relevant person to whom such obligations were owed shall be
entitled to recover the value or amount of any security or payment so
avoided or reduced from the Guarantor subsequently as if such discharge had
not occurred.
<PAGE>
36
Part 9
------
PAYMENTS
--------
XXIII. Currency of Account and Payment
-------------------------------
A. The dollar is the currency of account and payment for each and every sum
due from the Company and the Guarantor under this Agreement.
B. If any sum due from the Company or the Guarantor under this Agreement or
any order or judgment given or made in relation hereto has to be converted
from the currency (the "first currency") in which the same is payable
--------------
hereunder or under such order or judgment into another currency (the
"second currency") for the purpose of:-
---------------
23.2.1
making or filing a claim or proof against the Company;
23.2.2
obtaining an order or judgment in any court or other tribunal; or
23.2.3
enforcing any order or judgment given or made in relation hereto
the Company or the Guarantor, as the case may be, shall indemnify and hold
harmless each of the persons to whom such sum is due from and against any
loss suffered, and each such person shall pay over and account to the
Company or (as the case may be) the Guarantor for any profit arising, as a
result of any discrepancy between:-
23.2.4
the rate of exchange used for such purpose to convert the sum in
question from the first currency into the second currency; and
23.2.5
the rate or rates of exchange at which such person may in the
ordinary course of business purchase the first currency with the
second currency upon receipt of a sum paid to it in satisfaction,
in whole or in part, of any such order, judgment, claim or proof.
The obligations of each of the Company and the Guarantor under this sub-
clause are separate from its other obligations under this Agreement and
shall survive the giving or making of any order or judgment in relation to
all or any of such other obligations. The term "rate of exchange" includes
any premium and costs of exchange payable in connection with the purchase
of the first currency with the second currency for the purposes of this
Clause 23.
XXIV. Payments
--------
A. Except as otherwise specifically stated herein, on each date upon which
this Agreement requires an amount to be paid by the Company, the Guarantor
or any Bank under this Agreement, the Company, the Guarantor or such Bank
shall make the same
<PAGE>
37
available to the Agent by payment in dollars and in cleared funds to the
Agent at The Chase Manhattan Bank N.A., 1 Chase Manhattan Plaza, New York,
account Samuel Montagu & Co. Limited, 001-1-939048 CHIPS UIP 002506 or
otherwise to such other account as the Agent may have specified for this
purpose.
B. Subject to Clause 24.4 each payment received by the Agent pursuant to
Clause 24.1 for the account of another person shall be made available by
the Agent to such person for value the same day by transfer to such account
of such person with such bank in New York City as such person shall have
previously notified to the Agent.
C. Except as provided in Clause 10.3, all payments made by the Company or the
Guarantor under this Agreement shall be made free and clear of and without
any deduction for or on account of any set-off or counterclaim or any other
matter (except only taxes, as to which the provisions of Clause 12 alone
shall apply, to the extent relevant).
D. Where a sum is to be paid hereunder to the Agent for account of another
person, the Agent shall not be obliged to make the same available to that
other person until it has been able to establish to its satisfaction that
it has actually received such sum, but if it does so and it proves to be
the case that it had not actually received the sum it paid out, then the
person to whom such sum was so made available shall on request, and without
prejudice to the rights of such person against the defaulting party, refund
the same to the Agent, together with an amount sufficient to indemnify the
Agent against any cost or loss it may have suffered or incurred by reason
of its having paid out the sum in question prior to receipt of funds.
E. If the Agent is obliged by law to make any deduction or withholding from
any payment to any of the Banks (an "agency payment") which represents an
----------------
amount or amounts received by the Agent from the Company or the Guarantor
for the account of that Bank pursuant to this Agreement, the Agent shall
forthwith notify the Company and the Guarantor, whereupon all sums payable
by the Company and the Guarantor to the Agent for the account of that Bank
may be paid by the Company and the Guarantor directly to that Bank and the
provisions of this Clause 24 shall apply, mutatis mutandis, to such direct
payment.
F. If part only of an agency payment represents an amount or amounts received
by the Agent from the Company or the Guarantor pursuant to this Agreement,
Clause 24.5 shall apply as if the Agent were obliged to make separate
agency payments of that part and of the balance of the agency payment.
XXV. Redistribution of Payments
--------------------------
A. If at any time the proportion which any Bank (a "Recovering Bank") has
-----------------
received or recovered in respect of a Facility (whether by payment, the
exercise of a right of set-off or combination of accounts or otherwise) in
respect of its portion of any amount (a "relevant amount") payable
-----------------
hereunder by the Company or the Guarantor (as the case may be) for the
account of such Recovering Bank and one or more other Banks in respect of
that Facility is greater (the amount of such excess being called an "excess
-------
amount") than the proportion thereof received or recovered by the person or
-------
persons receiving or recovering the smallest proportion thereof (which
shall, for the avoidance of doubt, include a nil receipt), then:-
<PAGE>
38
25.1.1
such Recovering Bank shall within 2 business days of demand by
the Agent pay to the Agent an amount equal to such excess amount;
25.1.2
the Company shall forthwith be obliged to reimburse to such
Recovering Bank an amount equal to the amount paid out by it
pursuant to Clause 25.1 and the amount to be so paid out by way
of reimbursement shall be treated, for the purposes hereof, as if
it were an unpaid part of such Recovering Bank's portion of such
relevant amount; and
25.1.3
the Agent shall treat the amount received by it from such
Recovering Bank pursuant to Clause 25.1 as if such amount had
been received by it from the Company in respect of such relevant
amount and shall pay the same to the persons entitled thereto
(including such Recovering Bank) pro rata to their respective
entitlements thereto,
25.1.4
each Bank shall on request supply to the Agent such information
as the Agent may from time to time request for the purpose of
this Clause 25; and
25.1.5
if any part of the relevant amount subsequently has to be wholly
or partly refunded by the Recovering Bank (whether to a
liquidator or otherwise) each Bank to which any part of such
relevant amount was so re-distributed shall on request from the
Recovering Bank repay to the Recovering Bank such Bank's pro rata
share of the amount which has to be refunded by the Recovering
Bank,
Provided always that if any Recovering Bank shall commence any action or
proceeding in any court to enforce its rights hereunder after consultation
with the other Banks and with the consent of the relevant Instructing Group
(such consent not to be unreasonably withheld) and, as a result thereof or
in connection therewith, shall receive any excess amount (as defined in
this Clause 25), then such Recovering Bank shall not be required to share
any portion of such excess amount with any Bank which has the legal right
to, but does not, join in such action or proceeding or commence and
diligently prosecute a separate action or proceeding to enforce its rights
in another court.
B. For the avoidance of doubt it is hereby declared that failure by any
Recovering Bank to comply with the provisions of this Clause 25 shall not
release any other Recovering Bank from any of its obligations or
liabilities under this Clause 25.
C. The provisions of this Clause 25 shall not, and shall not be construed so
as to, constitute a charge by a Bank over all or any part of a sum received
or recovered by it in the circumstances mentioned in this Clause 25.
<PAGE>
39
Part 10
-------
DEFAULT INTEREST AND INDEMNITY
------------------------------
XXVI. Default Interest, Prepayment Compensation or Adjustment and Indemnity
---------------------------------------------------------------------
A. If any sum due and payable by the Company or the Guarantor under this
Agreement is not paid on the due date the period beginning on such due date
and ending on the date upon which the obligation of the Company or the
Guarantor, as the case may be, to pay such sum (the balance thereof for the
time being unpaid being herein referred to as an "unpaid sum") is
------------
discharged shall be divided into successive periods, each of which (other
than the first) shall start on the last day of the preceding such period
and the duration of each of which shall (subject to Clause 26.2.2) be
selected by the Agent and notified in writing to the Company.
B. During each such period relating thereto as is mentioned in Clause 26.1 (as
well after as before judgment) an unpaid sum shall bear interest at the
rate per annum which is the sum of 1 per cent. and LIBOR on the Quotation
Date therefor or, if later, such other date as shall be the first date on
which it shall be reasonably practicable for LIBOR in respect of such
unpaid sum to be determined, provided that:-
26.2.1
if for any such period LIBOR cannot be determined, then the rate
of interest applicable to each Bank's participation in such
unpaid sum shall be determined by reference to the cost to such
Bank of obtaining deposits in dollars in an amount equal to its
portion of such unpaid sum from such sources as it may select;
and
26.2.2
if such unpaid sum is all or part of an Advance which became due
and payable on a day other than the last day of the current
Interest Period relating thereto, the first such period
applicable thereto shall be of a duration equal to the unexpired
portion of the Interest Period relating thereto and the rate of
interest applicable thereto during such period shall be that
which exceeds by 1 per cent. the rate applicable to it
immediately before it fell due.
C. Any interest which shall have accrued on any unpaid sum due from the
Company or the Guarantor shall be due and payable and shall be paid by the
Company or the Guarantor, as the case may be, at the end of the period by
reference to which it is calculated or on such later date as the Agent may
specify by notice in writing to the Company or the Guarantor, as the case
may be.
D. Notwithstanding any other provision of this Agreement, if any party hereto
or the Agent on its behalf receives or recovers all or part of such party's
share of an Advance before the last day of the Interest Period relating
thereto or, as the case may be, the relevant Repayment Date, the Company
shall pay to the Agent on demand for account of such party hereto an amount
equal to the amount (if any) by which:-
26.4.1
<PAGE>
40
the interest which would have been payable by the Company on the
amount so received or recovered had it been received or recovered
on the last day of the Interest Period relating thereto or, as
the case may be, the relevant Repayment Date
exceeds:-
26.4.2
the amount of interest which in the opinion of the Agent (or, if
such party is a Bank, such Bank) would have been payable to the
Agent or such Bank (as the case may be) on the last day of such
Interest Period or, as the case may be, the relevant Repayment
Date in respect of a deposit in dollars and equal to the amount
so received or recovered placed by it with a prime bank in London
for a period starting on the third business day following the
date of such receipt or recovery and ending on the last day of
such Interest Period or, as the case may be, the relevant
Repayment Date.
E. The Company undertakes to indemnify:-
26.5.1
each of the Banks and the Agent against any cost, loss or
expense, including legal fees, which any of them may sustain or
incur as a consequence of any default by the Company in the
performance of any of the obligations expressed to be assumed by
it in this Agreement or the occurrence of any Event of Default;
and
26.5.2
each Bank against any loss it may sustain or incur as a result of
its funding an Advance requested by the Company hereunder but not
made by reason of the operation of any one or more of the
provisions hereof or by reason of the Company revoking an Advance
Request.
F. Any unpaid sum shall (for the purposes of this Clause 26 and Clause 14.1)
be treated as an Advance and accordingly in this Clause 26 and Clause 14
"Advance" includes any unpaid sum and "Interest Period" in relation to an
unpaid sum includes each such period mentioned in Clause 26.1.
<PAGE>
41
Part 11
-------
FEES, COSTS AND EXPENSES
------------------------
XXVII. Commitment Fees
---------------
A. The Company shall pay to the Agent for account of the Banks a commitment
fee calculated from and including the date of this Agreement to:-
27.1.1
in the case of the Facility A, the third Anniversary; or
27.1.2
in the case of the Facility B, the date 364 days after the date
of this Agreement,
in each case upon the daily uncancelled and unadvanced amount of the
respective Total Commitments. The commitment fee (to be calculated at the
rate specified in Clause 27.2) shall accrue from day to day and, subject as
herein otherwise provided, shall be payable in arrear, in respect of
Facility A, on each of the dates falling at three monthly intervals after
the date of this Agreement and on the third Anniversary and, in respect of
Facility B, at three monthly intervals after the date of this Agreement and
on the last day of the period specified in Clause 27.1.2 or, if earlier, in
each case on the date on which the Total Commitments are reduced to zero
and, in the case of any Bank, on any earlier date on which such Bank's
Commitment is reduced to zero.
B. The commitment fee shall be payable at the following rates:-
27.2.1
in respect of Facility A, 0.1 per cent. per annum; or
27.2.2
in respect of Facility B, 0.0625 per cent. per annum.
XXVIII. Agency Fee
----------
The Company shall pay to the Agent for its own use and benefit agency fees
in the amounts and at the times stated in the letter of even date herewith
from the Agent to the Company.
XXIX. Costs and Expenses
------------------
A. The Company shall from time to time on demand reimburse the Agent and the
Banks for all costs and expenses (including legal fees) reasonably incurred
in or in connection with the preservation and/or enforcement of any of the
rights of any of them under this Agreement.
B. The Company shall pay all stamp, registration and other taxes to which this
Agreement is or at any time may be subject in the United Kingdom and/or in
any other jurisdiction in which the Agent or any Bank shall properly seek
to enforce this Agreement, and shall indemnify each of the Agent and the
Banks against any liabilities, costs, claims and expenses resulting from
any failure to pay or any delay in paying any such tax. In no
circumstances, however, will the Company be liable to pay any stamp,
registration and other taxes payable in connection with
<PAGE>
42
or resulting directly or indirectly from any assignment or transfer by any
Bank pursuant to Clause 33.
C. If, at any time, the Company fails to perform its obligations under this
Clause 29, each Bank shall, in the proportion borne by its Commitment to
the Total Commitments of the Banks at such time (or, where the Total
Commitments of the Banks have been reduced to zero, at the time when the
same last exceeded zero), indemnify the Agent against any loss incurred by
it as a result of such failure and the Company shall forthwith reimburse
each Bank for any payment made by it pursuant to this Clause 29.3.
<PAGE>
43
Part 12
-------
AGENCY PROVISIONS
-----------------
XXX. The Agent
---------
A. Each Bank hereby appoints the Agent to act as its agent in connection with
this Agreement and authorises the Agent to exercise such rights, powers and
discretions as are specifically delegated to the Agent on behalf of the
Banks by the terms of this Agreement together with all such rights, powers
and discretions as are reasonably incidental hereto. The Agent shall not,
however, have any duties, obligations or liabilities to the Banks beyond
those expressly stated in this Agreement.
B. The Agent may:-
30.2.1 assume that:-
30.2.1.1
any representation or warranty made by the Company and/or
the Guarantor in or pursuant to this Agreement is true;
30.2.1.2
no Event of Default or event or circumstance which with
the giving of any notice under Clause 21.1 or the lapse
of time would become an Event of Default has occurred;
and
30.2.1.3
neither the Company nor the Guarantor is in breach of or
default under its obligations under this Agreement,
unless the Agent has actual knowledge or actual notice to the
contrary;
For the purposes of this Clause 30.2.1 the Agent shall not be
treated as having actual knowledge of any matter of which the
corporate finance or any other division outside the agency or
loan administration department of the person for the time being
acting as the Agent may become aware in the context of corporate
finance, advisory or lending activities from time to time
undertaken by the Agent for the Guarantor or any of its
associates or any other person which may be a trade competitor of
the Guarantor or may otherwise have commercial interests similar
to those of the Guarantor.
30.2.2
assume that each Bank's Facility Office is that identified with
its signature below until it has received from such Bank a notice
designating some other office of such Bank as its Facility Office
and act upon any such notice until the same is superseded by a
further such notice;
30.2.3
engage and pay for the advice or services of any lawyers,
accountants or other experts whose advice
<PAGE>
44
may seem to it necessary, expedient or desirable and rely upon
any advice so obtained;
30.2.4
rely, as to matters of fact which might reasonably be expected to
be within the knowledge of the Company or the Guarantor, upon a
certificate signed by an Authorised Signatory or a director of
the Company or the Guarantor, as the case may be;
30.2.5
rely upon any communication or document believed by it to be
genuine and correct;
30.2.6
exercise or refrain from exercising any right, power or
discretion vested in it under this Agreement unless and until
instructed by an Instructing Group as to the manner in which it
should be exercised;
30.2.7
without limiting Clause 30.2.6., refrain from acting in
accordance with any instructions of an Instructing Group to begin
any legal action or proceeding arising out of or in connection
with this Agreement until it has been indemnified to its
satisfaction and/or has received such security as it may require
(whether by way of payment in advance or otherwise) for all
costs, claims, expenses (including legal fees) and liabilities
which it will or may expend or incur in complying with such
instructions; and
30.2.8
treat the Bank which makes available any share of an Advance as
the repayment of that share unless all or part of it has been
novated in accordance with Clause 33.1.
C. The Agent shall:-
30.3.1
promptly upon receipt thereof, send to each Bank any notice,
certificate or document received by the Agent from the Company or
the Guarantor pursuant to Clauses 19.1 and 20.1.2 provided that
information delivered pursuant to Clause 19.1.3 shall be
communicated only to Banks;
30.3.2
subject to the foregoing provisions of this Clause and to its
being indemnified to its satisfaction, act in accordance with any
instructions given to it by an Instructing Group; and
30.3.3
subject to its being indemnified to its satisfaction, if so
instructed by an Instructing Group, refrain from exercising any
right, power or discretion vested in it under this Agreement.
<PAGE>
45
D. Notwithstanding anything to the contrary expressed or implied herein the
Agent shall not:-
30.4.1 be bound to enquire as to:-
30.4.1.1
whether or not any representation made by the Company or
the Guarantor in or pursuant to this Agreement is true;
30.4.1.2
the occurrence or otherwise of any Event of Default or
event or circumstance which with the giving of any notice
under Clause 21.1 or the lapse of time would become an
Event of Default;
30.4.1.3
the performance by the Company or the Guarantor of its
obligations under this Agreement; or
30.4.1.4
any breach of or default by the Company or the Guarantor
of its obligations under this Agreement;
30.4.2
be bound to account to any Bank for any sum or the profit element
of any sum received by it for its own account;
30.4.3
be bound to begin legal action or proceedings arising out of or
in connection with this Agreement, other than on the instructions
of an Instructing Group;
30.4.4
be bound to disclose to any person any information relating to
any member of the Group if such disclosure would or might in its
opinion constitute a breach of any law or regulation or be
otherwise actionable at the suit of any person; or
30.4.5
be under any fiduciary duty or other obligation towards any Bank
or the Company or the Guarantor other than those for which
express provision is made in this Agreement.
E. Each Bank shall, on demand by the Agent, indemnify the Agent, in the
proportion its Commitment bears to the Total Commitments of the Banks at
the time of such demand (or, if the Total Commitments of the Banks have
been reduced to zero, at the time which the same last exceeded zero),
against any and all costs, claims, expenses (including legal fees) and
liabilities which the Agent may incur, otherwise than by reason of its own
gross negligence or wilful misconduct, in acting in its capacity as Agent
under this Agreement.
F. Neither the Agent nor the Arrangers accept responsibility for the accuracy
and/or completeness of any information supplied in connection herewith or
for the legality, validity, effectiveness, adequacy or enforceability of
this Agreement and neither the Agent nor the Arrangers shall not be under
any
<PAGE>
46
liability as a result of taking or omitting to take any action in relation
to this Agreement save in the case of its own gross negligence or wilful
misconduct.
G. None of the Agent, the Arrangers or any of their directors, officers,
employees or agents shall be liable to the Banks:
(a) for the execution, legality, validity, enforceability or effectiveness
of this Agreement or any document delivered under it;
(b) for any failure of the Company and/or the Guarantor, or any of the
Banks duly and punctually to observe and perform any of its
obligations under this Agreement;
(c) for any statements, representations or warranties made or referred to
in this Agreement or any notice, documents or information delivered or
intended to be delivered to any of the Banks in connection with this
Agreement; or
(d) for any action taken or omitted by any of them under or in connection
with this Agreement except in the case of gross negligence or wilful
misconduct.
H. Each of the Banks agrees that it will not assert or seek to assert against
any director, officer or employee of the Agent any claim it might have
against any of them in respect of the matters referred to in Clause 30.6.
I. With respect to their own participations in the Facilities, the Agent and
the Arrangers shall have the same rights and powers under this Agreement as
any other Bank and may exercise them as though it were not also acting as
agent for the Banks or (as the case may be) arrangers of the Facilities.
The Agent, the Arrangers and their associates and affiliates may, without
liability to the Banks to disclose or account, engage in any kind of
financial, trust or commercial business with, or acquire or dispose of any
kind of security of, the Company or the Guarantor (or any of their
subsidiaries, associates or affiliates) as if the Agent were not the agent
for the Banks and the Arrangers were not arrangers of the Facilities.
Neither the Agent nor the Arrangers shall have any obligation to the Banks
to disclose or account for any dealings which it may have had with the
Company or the Guarantor, or any of its associates or affiliates prior to
the date of this Agreement.
J. Subject to the appointment of a successor the Agent may retire at any time
as the agent for the Banks without assigning any reason by the giving to
the Company and each of the Banks by the Agent of not less than thirty
days' notice of its intention to do so; the Agent shall, in consultation
with the Company, appoint a successor, which successor, in either case,
shall be a reputable and experienced bank or other financial institution
with an office in London; any such appointment shall be in writing, signed
by the Agent and delivered to that successor and shall be accepted by
notice in writing signed by the successor and delivered to the Agent and
shall take effect upon the effective date of notice thereof (which notice
shall specify details of the bank account to which payments to the Agent
shall be made thereafter) being given to each of the other parties hereto.
In no event shall the retirement of the Agent become effective until a
successor has been appointed and such appointment has become effective.
K. If a successor to the Agent is appointed under the provisions of
<PAGE>
47
Clause 30.10 the retiring Agent shall be discharged from any further
obligation hereunder but shall remain entitled to the benefit of the
provisions of this Clause 30 and its successor and each of the other
parties hereto shall have the same rights and obligations amongst
themselves as they would have had if such successor had been a party
hereto.
L. It is understood and agreed by each Bank that it has itself been, and will
continue to be, solely responsible for making its own independent appraisal
of and investigations into the financial condition, creditworthiness,
condition, affairs, status and nature of the Company and the Guarantor and
accordingly each Bank confirms to the Agent and the Arrangers that it has
not relied and will not hereafter rely on it:-
30.12.1
to check or enquire on its behalf into the adequacy, accuracy or
completeness of any information provided by the Company or the
Guarantor in connection with this Agreement or the transactions
herein contemplated (whether or not such information has been or
is hereafter circulated to such Bank by the Agent or the
Arrangers); or
30.12.2
to assess or keep under review on its behalf the financial
condition, creditworthiness, affairs, status or nature of the
Company or the Guarantor.
<PAGE>
48
Part 13
-------
ASSIGNMENTS AND NOVATIONS
-------------------------
XXXI. Benefit of Agreement
--------------------
This Agreement shall be binding upon and enure to the benefit of each party
hereto and its successors in business by operation of law and permitted
assigns.
XXXII. Assignments by the Company and the Guarantor
--------------------------------------------
Neither the Company nor the Guarantor shall, subject to Clause 2.3, be
entitled to assign or transfer all or any of its rights, benefits and
obligations hereunder.
XXXIII. Novations by the Banks
----------------------
A. Subject to Clause 33.7, each Bank (the "Transferor") may at any time cause
-----------
all or any part of its rights, benefits and/or obligations under this
Agreement to be novated to (a) an existing Bank or (b) such other bank
which is able to make the representation to the Company and the Guarantor
contained in Clause 12.3 as may be approved in writing prior to such
novation by the Company (such approval not to be unreasonably withheld or
delayed which approval shall not be treated as unreasonably withheld for
this purpose in any case where it is proposed that the Transferor's
remaining shares of Total Facility A Commitments and Total Facility B
Commitments should each cease to represent the same percentage in value of
its Total Commitments and/or the Transferee's shares of Total Facility A
Commitments and Total Facility B Commitments should each represent
different percentages in value of its share of Total Commitments) (in
either case, the " Transferee") by delivering, or causing to be delivered,
------------
to the Agent a Transfer Certificate duly completed and duly executed by the
Transferor and the Transferee, together with the registration fee referred
to in Clause 33.4 and the written consent of the Company (if applicable).
Upon signature of each such Transfer Certificate by the Agent (on behalf of
itself, the Company, the Guarantor and the Banks), which signature shall be
effected as soon as is practicable after such certificate has been
delivered to the Agent, and subject to the terms of such Transfer
Certificate:
33.1.1
to the extent that in such Transfer Certificate the Transferor
seeks to cause its rights and/or its obligations hereunder to be
novated, the Company, the Guarantor and such Transferor shall
each be released from further obligations to each other hereunder
and their respective rights against each other shall be cancelled
(such rights and obligations being referred to in this
Clause 33.1 as "discharged rights and obligations");
---------------------------------
33.1.2
the Company, the Guarantor and the Transferee party thereto shall
each assume new obligations towards each other and/or acquire new
rights against each other which differ from the discharged rights
and obligations only insofar as the Company, the Guarantor and
such Transferee have assumed and
<PAGE>
49
acquired the same in place of the Company, the Guarantor and the
Transferor;
33.1.3
the Agent, the Transferee and the Banks shall acquire the same
rights and assume the same obligations between themselves as they
would have acquired and assumed had such Transferee been an
original party hereto as a Bank with the rights and/or the
obligations acquired or assumed by it as a result of such
novation.
Subject to the other provisions of this Clause 33.1, each of the Company,
the Guarantor and the Banks (other than the Transferor and Transferee
parties to the relevant Transfer Certificate) hereby authorises and
instructs the Agent to sign any such Transfer Certificate on its behalf and
undertakes not to withdraw, revoke or qualify such authority or instruction
at any time. Following any Transfer Certificate taking effect in relation
to a Transferee the Agent will give notice thereof to the Banks.
33.2 The Agent shall be entitled to rely on any Transfer Certificate believed by
it to be genuine and correct and to have been presented or signed by the
persons by whom it purports to have been presented or signed, and shall not
be liable to any of the parties to this Agreement for the consequences of
such reliance.
B. Any novation pursuant to Clause 33.1 of part of a Bank's Commitment shall
be in an amount which is not less than $10,000,000 (or such other amount as
the Agent and the Company may from time to time agree).
C. On the date on which a novation takes effect pursuant to Clause 33.1, the
Transferor in respect of such novation shall pay to the Agent for its own
account a fee of $750.
D. References elsewhere in this Agreement to the transfer of a Bank's rights
or Commitments (or part thereof) shall be construed as references to its
novation in accordance with this Clause 33. Save as provided in this
Clause 33, no Bank shall be entitled to transfer any of its rights,
benefits and obligations hereunder.
E. Any Bank may disclose to a prospective Transferee (which, in the case of a
Transferee which falls within Clause 33.1(b), delivers to the Company a
confidentiality undertaking in like form to such confidentiality
undertaking, if any, as may have been delivered by the prospective
Transferor pursuant to this Agreement and, in the case of a Transferee
which does not fall within Clause 33.1(a) or 33.1(b), has been approved in
writing as such by the Company prior to such disclosure and has, if the
Company so requests, signed a confidentiality undertaking substantially in
the form set out in the Fifth Schedule) such information about the Group as
has been disclosed to the relevant Bank under this Agreement, provided that
this Clause shall not apply to any information which, prior to its
disclosure by any Bank, is already a matter of public knowledge.
F. If, at the time of any assignment and/or novation as mentioned in this
Clause 33, circumstances are such that there will arise, or would (on the
basis of any then current fiscal or other governmental or regulatory
proposals details of which are then reasonably available to the Bank which
is the assignor or transferor) arise, an obligation on the part of the
Company
<PAGE>
50
under Clause 12 or Clause 14 to pay to such Bank or its assignee any amount
in excess of the amount which it would have been obliged to pay had no such
assignment occurred, then the Company shall not at any time thereafter be
obliged to pay the amount of such excess pursuant to either of such
Clauses.
<PAGE>
51
Part 14
-------
MISCELLANEOUS
-------------
XXXIV. Amendment, Waiver, etc.
-----------------------
Save in the case of any matter expressed in this Agreement to require the
consent or approval of all the Banks, any amendment, waiver, discharge or
termination of any provision of this Agreement or any declaration that any
event which would otherwise be an Event of Default is not such an Event of
Default which, in each case, is given or made in writing by the Agent and
is sanctioned (or is certified in writing by the Agent to the Company to
have been sanctioned) by an Instructing Group shall be binding upon all the
Banks participating in the relevant Facility; provided that any such
amendment, waiver, discharge, termination or declaration which purports
to:-
(a) postpone any Repayment Date or to reduce the principal amount or
interest payable or the applicable Margin in respect of any Advance
under such Facility or to change the currency of payment thereof shall
be binding upon a Bank participating in the relevant Facility (with
respect to its share of the relevant Advance(s)) only if such Bank
expressly agrees thereto; or
(b) increase the Facility A Commitment and/or the Facility B Commitment of
any Bank or reduce any of the fees receivable by any Bank under Clause
27 or reduce any amount which is payable or may (in its opinion) be
payable to any Bank pursuant to Clause 12 or 14 shall be binding upon
such Bank only if it expressly agrees thereto; or
(c) release the Guarantor from any of its obligations under Clause 22;
amend Clauses 25 or 34 or the definitions of either Instructing Group;
extend any period during which Advance Requests may be made under
either Facility; or vary any provision whose variation requires the
consent of all the Banks or any reference to the consent of all the
Banks being required, shall in any such case be binding upon a Bank
only if it expressly agrees thereto.
XXXV. Calculations and Evidence of Debt
---------------------------------
A. Interest and commitment fee shall accrue from day to day and shall be
calculated on the basis of a year of 360 days and the actual number of days
elapsed.
B. Each Bank shall maintain in accordance with its usual practice accounts and
records evidencing the amounts from time to time lent by and owing to it
hereunder.
C. The Agent shall maintain on its books a memorandum account or accounts in
which shall be recorded:-
35.3.1
the amount of any Advance made or arising hereunder and each
Bank's share therein;
35.3.2
the amount of any principal, interest or other sums due or to
become due from the Company to any of the Banks hereunder and
each Bank's share therein; and
<PAGE>
52
35.3.3
the amount of any sum received or recovered by the Agent
hereunder and the share of each Bank therein.
D. In any legal action or proceeding arising out of or in connection with this
Agreement, the entries made in the accounts and records maintained pursuant
to Clause 35.2 shall be prima facie evidence of the existence and amounts
of the obligations of the Company therein recorded.
E. A certificate of a Bank as to:-
35.5.1
the amount by which a sum payable to it hereunder is to be
increased under Clause 12.1; or
35.5.2
the amount for the time being required to be paid to it in
respect of any such cost or liability as is mentioned in Clause
14
shall be prima facie evidence of the amount (but not the Company's
liability under the relevant Clause) in any legal action or proceeding
arising out of or in connection with this Agreement.
XXXVI. Partial Invalidity
------------------
If at any time any provision hereof is or becomes illegal, invalid or
unenforceable in any respect under the law of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions hereof nor
the legality, validity or enforceability of such provision under the law of
any other jurisdiction shall in any way be affected or impaired thereby.
XXXVII. Remedies and Waivers
--------------------
No failure to exercise, nor any delay in exercising, on the part of any
party hereto any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
prevent any further or other exercise thereof or the exercise of any other
right or remedy. The rights and remedies herein provided are cumulative
and not exclusive of any rights or remedies provided by law.
XXXVIII. Notices
-------
A. Each communication to be made hereunder shall be in the English language
and shall, unless otherwise stated, be made in writing but, subject to
Clause 38.3 and unless otherwise stated, may be made by facsimile or
letter.
B. Save as provided in Clause 38.3, any communication or document to be made
or delivered by one party to another pursuant to this Agreement shall
(unless that other party has by fifteen days' written notice to the Agent
specified another address and/or facsimile number) be made or delivered to
that other party at the address or (if specified) facsimile number
identified with its signature below or, in the case of a Transferee, to
such address and/or facsimile number as shall have been specified in its
Transfer Certificate delivered pursuant to Clause 33 and shall be deemed to
have been made or delivered when such communication or document has been
despatched and the appropriate confirmation received (in the
<PAGE>
53
case of any communication made by facsimile on any business day) or (in the
case of any communication made by facsimile on a day which is not a
business day) on the next business day after the appropriate confirmation
is received or (in the case of any communication made by letter) when such
communication or document is received.
C. Each communication made by the Company or the Guarantor to the Agent
pursuant to Clause 6 shall be effected, in the first instance, by facsimile
and by the subsequent delivery, by the specified time, to the Agent of the
original of such facsimile, duly signed by two Authorised Signatories.
XXXIX. Set Off
-------
The Company authorises each Bank to apply any credit balance (whether or
not then due) to which it is at any time beneficially entitled on any
account at, any sum held to its order by and/or any liability to it of, any
office of the Bank in or towards satisfaction of any sum then due from it
to the Bank under this Agreement and unpaid and, for that purpose, to
convert one currency into another (but so that nothing in this Clause 39
shall be effective to create a charge). No Bank shall be obliged to
exercise any of its rights under this Clause, which shall be without
prejudice and in addition to any right of set-off, combination of accounts,
lien or other right to which it is at any time otherwise entitled (whether
by operation of law, contract or otherwise).
<PAGE>
54
Part 15
-------
LAW
---
XL. Law
---
This Agreement shall be governed by, and construed in accordance with, the
laws of England.
AS WITNESS the hands of the duly authorised representatives of the parties
- ----------
hereto the day and year first before written.
<PAGE>
55
THE FIRST SCHEDULE
------------------
The Banks
---------
Facility Facility
A B
Bank Facility Office Commitment
- ---- --------------- ----------
Commitment
----------
Midland Bank plc Poultry $500,000,000
$700,000,000 London EC2P 2BX
The Toronto - Triton Court $500,000,000
$700,000,000
Dominion Bank 14-18 Finsbury Square
London EC2A 1DB
<PAGE>
56
THE SECOND SCHEDULE
-------------------
Conditions Precedent Documents
------------------------------
XLI. A copy, certified a true copy by an Authorised Signatory of the Company
or the Guarantor, as the case may be, of the Memorandum and Articles of
Association of the Company and of the Memorandum and Articles of
Association of the Guarantor.
XLII. A copy, certified a true copy by an Authorised Signatory of the Company
or the Guarantor, as the case may be, of a resolution of the board of
directors of the Company or of a duly constituted committee of such
board and of a resolution of the board of directors of the Guarantor or
of a duly constituted committee of such board, in each case approving
the execution and delivery of this Agreement and the performance of its
obligations thereunder and authorising a person or persons (specified by
name or office) on behalf of the Company or the Guarantor, as the case
may be, to sign this Agreement and any other documents to be delivered
by the Company or the Guarantor, as the case may be, pursuant hereto.
XLIII. Where any resolution referred to in paragraph 2 above is a
resolution of a committee of the board of directors, a copy, certified
by an Authorised Signatory, of the resolution of such board of directors
constituting such committee.
XLIV. A certificate of an Authorised Signatory of the Company or the
Guarantor, as the case may be, setting out the names and signatures of
the persons authorised to sign, on behalf of the Company or the
Guarantor, as the case may be, this Agreement and any other documents to
be delivered by the Company or the Guarantor, as the case may be,
pursuant hereto.
XLV. An opinion of Norton Rose, Solicitors to the Arrangers, in a form which
satisfies the reasonable requirements of the Agent.
XLVI. The draft of the Press Announcement proposed to be issued by the
Guarantor on the date hereof in relation to its proposed acquisition of
common stock of Dr. Pepper/Seven Up Companies Inc. (the "Acquisition").
XLVII. A copy, certified a true copy by an Authorised Signatory of the
Guarantor, of the Agreement and Plan of Merger pursuant to which
the Guarantor intends to effect the Acquisition.
XLVIII. A certificate, signed by an Authorised Signatory of the Guarantor,
to the effect that the Guarantor's offer in respect of the
Acquisition has become unconditional in all respects.
<PAGE>
57
THE THIRD SCHEDULE
------------------
Timetable for Advances
----------------------
"D" = Advance Date
"D-x" = x business days prior to Advance Date
"( )" = Clause number of Facilities Agreement
(A) At any time when there are 15 or less Banks:-
Advances
1. Advance Request
to Agent by hard
copy or fax (6.1) D-2 8.30 a.m.
2. Original of Advance
Request to be delivered
to Agent (6.1) D-2 10.30 a.m.
3. Rate Fixing (l.1 and 9.7)
and notification to the
Company and the Banks (9.8) D-2 11.00 a.m.
(B) At any time where there are 16 or more Banks:-
Advances
--------
1. Advance Request D-3 3.30 p.m.
to Agent by hard
copy or fax (6.1)
2. Original of Advance
Request to be delivered
to Agent (6.1) D-2 10.30 a.m.
3. Rate Fixing (l.1 and 9.7)
and notification to the
Company and the Banks (9.8) D-2 11.00 a.m.
<PAGE>
58
THE FOURTH SCHEDULE
-------------------
Form of Advance Request
-----------------------
To: Samuel Montagu & Co. Limited as agent
From: The Company
Dear Sirs,
Cadbury Schweppes Finance Limited: Facilities Agreement dated 26th January, 1995
- --------------------------------------------------------------------------------
XLIX. We refer to the facilities agreement (the "Agreement") dated 26th January,
1995 and made between (1) ourselves, (2) Cadbury Schweppes Public Limited
Company as Guarantor, (3) Samuel Montagu & Co. Limited as Agent and (4)
Midland Bank plc and The Toronto-Dominion Bank as Arrangers and (5) the
banks therein named as Banks. Terms defined in the Agreement shall bear
the same meaning herein.
L. We hereby give you notice that we wish the Banks to make an Advance under
the Agreement as follows:-
(i) Facility [A] [B]*
(ii) Principal amount**.....
(iii) Advance Date**....................
(iv) Interest Period**.......................
LI. We represent that, at the date hereof, the representations set out in
Clause 18 of the Agreement (as if the references in Clauses 18.14 and
18.15 of the Agreement to the Original Financial Statements were
references to the audited financial statements most recently delivered to
the Agent pursuant to Clause 19.1.1, if any such statements have been so
delivered ) are true and correct by reference to the facts and
circumstances now subsisting and confirm that no Event of Default or event
or circumstance which with the giving of any notice under clause 21.1 of
the Agreement or the lapse of time would become an Event of Default has
occurred which has not been remedied or waived and that no Event of
Default will occur as a result of the proposed Advance/Advances* requested
herein.
Yours faithfully,
for and on behalf of
CADBURY SCHWEPPES FINANCE LIMITED
<PAGE>
59
______________________________________________________________________
* Delete as applicable
** Specify by Facility
<PAGE>
60
THE FIFTH SCHEDULE
------------------
Form of Confidentiality Undertaking
referred to in Clauses 19.1.3 and 33.6
--------------------------------------
[Letterhead of Bank or Transferee]
To: Cadbury Schweppes Finance Limited
and
Cadbury Schweppes Public Limited Company
Dear Sirs,
In consideration of your agreeing to our being supplied with information
concerning you or either of you and/or the Cadbury group or any part of it,
which is or may be confidential information and/or inside information (within
the meaning of the Criminal Justice Act 1993 (as the same may for the time being
be or have been modified or re-enacted)), we undertake with you and each of you
as follows (but subject to the exceptions referred to in Clause 191.3 of the
Facilities Agreement referred to below):-
LII. Such information (and any information already supplied to us) is or
will be or has been supplied to us solely for the purposes of our
existing/proposed* position and obligations as a Bank under your
U.S.$[ ] Committed Facilities constituted by the Facilities
Agreement dated 26th January, 1995 and of protecting our rights as
such Bank.
LIII. Such information shall accordingly be held by us in confidence and
only disclosed to and used by those individuals within our company who
need to know such information for the purposes referred to in 1 above
and to and by our auditors and external legal advisers to the extent
that they similarly need to know such information for such purposes
and provided that they are made aware that the information is
confidential.
LIV. We shall, if so required by you or either of you at any time, procure
the execution of confidentiality undertakings (in the form of a deed
if so required) by our employees to whom any such information shall
have been or
<PAGE>
61
be from time to time disclosed and shall in any event require our
employees to hold such information in confidence.
Yours faithfully,
for and on behalf of
*[name of Bank/Transferee]
..................
______________________________________________________________________
*delete as appropriate
<PAGE>
62
THE SIXTH SCHEDULE
------------------
Form of Transfer Certificate
----------------------------
To: [AGENT]
TRANSFER CERTIFICATE
--------------------
relating to the agreement (the "Agreement") dated 26th January, 1995 and made
between (1) Cadbury Schweppes Finance Limited, (2) Cadbury Schweppes Public
Limited Company an Guarantor, (3) Samuel Montagu & Co. Limited an Agent and (4)
Midland Bank plc and The Toronto-Dominion Bank as Arrangers and (5) the banks
therein named as Banks. Terms defined in the Agreement shall bear the same
meaning herein.
LV. [Transferor] (the "Transferor") hereby confirms the accuracy of the
summary of its Commitment and the Advances made in respect thereof in the
amount(s) set out in the Appendix below and requests [Transferee] (the
"Transferee") to accept and procure the novation to the Transferee of the
portions of such Commitment specified in the Appendix as to be novated
and its participation in any such Advance(s) by counter-signing and
delivering this Transfer Certificate to the Agent at its address for the
service of notices specified in the Agreement.
LVI. The Transferee hereby requests the Agent to accept this Transfer
Certificate as being delivered to the Agent pursuant to and for the
purposes of Clause 33.1 of the Agreement so as to take effect in
accordance with the terms thereof on the date of receipt by it of this
Transfer Certificate or (if later) on [date of novation] subject only to
the provisions of the Agreement and the Agent having previously received
confirmation from [Transferor's correspondent] that the sum of
U.S.$[ ] has been credited to the Transferor's account number
[ ] with [Transferor's correspondent] for value [date of
novation].
LVII. The Transferee confirms that it has received from the Transferor a copy
of the Agreement together with such other documents and information as it
has required in connection with this transaction and that it has not
relied and will not hereafter rely on the Transferor or any other party
to the Agreement to check or enquire on its behalf into the legality,
validity, effectiveness, adequacy, accuracy or completeness of any such
documents or information and further agrees that it has not relied and
will not rely on the Transferor or any other party to the Agreement to
assess or keep under review on its behalf the financial condition,
creditworthiness, condition, affairs, status or nature of the Company or
any other party to the Agreement.
LVIII. Execution of this Transfer Certificate by the Transferee
constitutes its representation to the Transferor and all other
parties to the Agreement that it has power to become a party to
the Agreement as a Bank on the terms herein and therein set out,
has taken all necessary steps to authorise execution and delivery
of this Transfer Certificate and is acting through an office in
the United Kingdom.
LIX. The Transferee hereby undertakes with the Transferor and each of
<PAGE>
63
the other parties to the Agreement that it will perform in accordance
with their terms all those obligations which by the terms of the
Agreement will be assumed by it after delivery of this Transfer
Certificate to, and acceptance of the same by, the Agent and satisfaction
of the conditions subject to which this Transfer Certificate is expressed
to take effect.
LX. The Agent and the Transferor make no representation or warranty and
assume no responsibility with respect to the legality, validity,
effectiveness, adequacy or enforceability of the Agreement or any
document relating thereto and accept no responsibility for the financial
condition of the Company or any other party to the Agreement or for the
performance and observance by the Company or any other such party of any
of its obligations under the Agreement or any document relating thereto
and any and all such conditions and warranties, whether express or
implied by law or otherwise, are hereby excluded.
LXI. The Transferor hereby gives notice that nothing herein or in the
Agreement (or any document relating thereto) shall oblige the Transferor
to (i) accept any novation or transfer back from the Transferee of the
whole or any part of its rights, benefits and/or obligations under the
Agreement novated pursuant hereto or (ii) support any losses directly or
indirectly sustained or incurred by the Transferee for any reason
whatsoever including, without limitation, the non-performance by the
Company or any other party to the Agreement (or any document relating
thereto) of its obligations under any such document. The Transferee
hereby acknowledges the absence of any such obligation as is referred to
in (i) or (ii) above.
LXII. This Transfer Certificate and the rights and obligations of the parties
hereunder shall be governed by and construed in accordance with English
law.
Note: No transfer of part of a Transferor's Commitment shall be effective unless
- -----
the amount expressed to be transferred is an amount of not less than
$10,000,000.
AS WITNESS the hands of the authorised signatures of the parties hereto on the
date appearing below.
<PAGE>
64
THE APPENDIX
------------
Facility A Commitment Portion to be novated
- --------------------- ---------------------
Facility B Commitment Portion to be novated
- --------------------- ---------------------
Relevant Advances Portion to be novated
- ----------------- ---------------------
[Insert details [Insert details]
specifying whether made
under Facility A or
Facility B ]
Administrative Details of Transferee
------------------------------------
Facility Office: ....................................
....................................
....................................
Contact Name: ....................................
Account for Payments
in dollars: ....................................
Telephone: ....................................
Fax No: ....................................
Telex: ....................................
[Transferor] [Transferee]
By: By:
Date: Date:
Accepted for and on behalf of itself,
each of the Banks and each of the
Company and the Guarantor.
Samuel Montagu & Co. Limited
By:
Date:
<PAGE>
65
The Company
- ------------
CADBURY SCHWEPPES FINANCE LIMITED
By: T.D. OWEN GILLIAN BUDD
Address: 25 Berkeley Square
London W1X 6HT
Telephone No. 0171 409 1313
Fax No. 0171 830 5119
The Guarantor
- -------------
CADBURY SCHWEPPES PUBLIC LIMITED COMPANY
By: D.J. KAPPLER GILLIAN BUDD
Address: 25 Berkeley Square
London W1X 6HT
Telephone No. 0171 409 1313
Fax No. 0171 830 5119
The Agent
- ---------
SAMUEL MONTAGU & CO. LIMITED
By: R.S. CARTLEDGE
Address: 10 Lower Thames Street
London EC2R 6AE
Telephone No. 0171 260 9292
Fax No. 0171 260 9302
The Arrangers
- -------------
MIDLAND BANK plc
By: DEREK LUNT
Address: Corporate Banking
2nd Floor
Poultry
London EC2P 2BX
Attention: D Lunt/C Hurd
Tel: 0171 260 4502/4602
Fax: 0171 260 4800
<PAGE>
66
THE TORONTO-DOMINION BANK
By: MICHAEL REDFERNE
Address: Triton Court,
14/18 Finsbury Square,
London EC2A 1DB
Telephone No. 0171 920 0272
Fax No. 0171 638 2551
The Banks
MIDLAND BANK plc
By: DEREK LUNT
Address: Corporate Banking
2nd Floor
Poultry
London EC2P 2BX
Attention: D Lunt/C Hurd
Telephone No. 071 260 4502
Fax: 071 260 4800
THE TORONTO-DOMINION BANK
By: MICHAEL REDFERNE
Address: Triton Court,
14/18 Finsbury Square,
London EC2A 1DB
Telephone No. 0171 920 0272
Fax No. 0171 638 2551
Exhibit (b)(2)
T H I S A G R E E M E N T is made on 26 January 1995
BETWEEN:-
(1) KLEINWORT BENSON LIMITED whose registered office is at 20 Fenchurch Street,
London EC3P 3DB (the "Bank"); and
----
(2) CADBURY SCHWEPPES PUBLIC LIMITED COMPANY whose registered office is at 25
Berkeley Square, London W1X 6HT (the "Company").
-------
WHEREAS:-
(A) The Company's Subsidiary, DP/SU Acquisition Inc. and the Company, has
entered into a Merger Agreement with Dr Pepper relating to the proposed Offer
for the outstanding commonstock of Dr Pepper not already owned.
(B) The Company proposes to issue by way of rights [British Pound]
29,784,212.75 nominal of Stock Units subject to the terms of the Issue
Documents at a price of 340p per Stock Unit payable in two instalments as
hereinafter described.
(C) The Bank has agreed to underwrite the issue of all of the Stock Units on
the terms and subject to the conditions set out in this Agreement and proposes
to procure sub-underwriters on the basis of the Press Announcement.
(D) The Company has appointed the Registrars to act as receiving bankers in
connection with the proposed Rights Issue.
(E) Application has been made to the London Stock Exchange for the admission of
the Stock Units to the Official List of the London Stock Exchange.
(F) The Company proposes to announce a dividend of 11p per Ordinary Share and
to offer an alternative of a Scrip Dividend of 0.0432432 Ordinary Shares per
Ordinary Share. The Bank proposes to offer to Ordinary Shareholders to procure
purchasers for, or itself purchase, such Scrip Dividend Shares.
IT IS AGREED as follows:-
1 INTERPRETATION
--------------
1.1 In this Agreement (including the Recitals):-
"Accounts" means the audited consolidated Report and Accounts of the
--------
Group as at and for the financial period ended 1 January 1994;
"Admission" means the admission of the Stock Units to the Official
---------
List becoming effective by the making of an announcement in accordance with
Paragraph 7.1 of the Listing Rules;
- # -
<PAGE>
"Australian Register" means the overseas branch register maintained by
-------------------
the Company in Australia pursuant to Section 362 of the Companies Act 1985;
"Board" means the Board of Directors of the Company or a duly
-----
authorised committee thereof;
"Board Resolutions" means (a) resolutions of the Board substantially
-----------------
in the agreed form (Document A), inter alia, approving the making of the Rights
Issue, authorising the release of the Press Announcement, the issue of the Issue
Documents and the execution of this Agreement and (b) resolutions of the Board
(or a duly authorised committee thereof) provisionally allotting the Stock Units
in accordance with the terms set out in the Press Announcement and this
Agreement;
"Business Day" means any day on which banks in the City of London are
------------
open for business;
"Circular" means the circular letter proposed to be issued by the
--------
Company on or about Friday, 3 February 1995 to the shareholders of the Company
relating, inter alia, to the Rights Issue;
"Closing Date" means the date which is (a) the last date for
------------
acceptance and payment of the First Instalment under the terms of the Rights
Issue and (b) the last date to elect to accept the Scrip Dividend alternative
and the KB Share Purchase Offer;
"Conversion Date" means the Business Day immediately following the
---------------
Second Instalment Payment Date or, if the Second Instalment is cancelled, the
date seven business days after the date on which notice of such cancellation has
been issued to holders of the Stock Units;
"Conversion Shares" means the new Ordinary Shares to be issued on
-----------------
conversion of the Stock Units having the rights set out in the Press
Announcement;
"Deed Poll" means the deed poll executed by the Company constituting
---------
the Stock Units in such terms as the Bank may approve (such approval not to be
unreasonably withheld or delayed);
"Dr Pepper" means Dr Pepper/Seven-Up Companies, Inc. and, where the
---------
context permits, such of its subsidiaries and affiliates as are the subject of
the Offer;
"EGM" means the Extraordinary General Meeting of the Company to be
---
convened, inter alia, for the purpose of approving the Offer;
"Elected Shares" has the meaning in Clause 5.11;
--------------
"FSA" means the Financial Services Act 1986;
---
- # -
<PAGE>
"First Instalment" means the amount of 102p per Stock Unit payable by
----------------
not later than 3.00 pm on the Closing Date;
"Group" means the Company and its subsidiary undertakings;
-----
"Issue Documents" means the Circular, the Listing Particulars and the
---------------
Provisional Allotment Letter;
"Issue Price" means the aggregate of the First Instalment and the
-----------
Second Instalment;
"KB Offer Letter" means the letter proposed to be sent by the Bank to
---------------
Ordinary Shareholders on or around Friday, 3 February 1995, inter alia offering
to procure purchasers for or itself purchase Ordinary Shares issued in the Scrip
Dividend, the principal terms of which are set out in the Press Announcement;
"KB Share Purchase Offer" means the offer to be made by the Bank in
-----------------------
the KB Offer Letter, inter alia to procure purchasers for, or itself purchase,
Ordinary Shares issued in the Scrip Dividend;
"Listing Particulars" means the listing particulars proposed to be
-------------------
issued by the Company on or around Friday, 3 February 1995 relating, inter alia,
to the Company and the issue of the Stock Units;
"Listing Rules" means the Listing Rules of the London Stock Exchange;
-------------
"London Stock Exchange" means The International Stock Exchange of the
---------------------
United Kingdom and the Republic of Ireland Limited;
"Merger Agreement" means an agreement as executed on or around 26
----------------
January 1995 between the Company, DP/SU Acquisition Inc. and Dr Pepper relating
to the proposed Offer;
"Offer" means the proposed cash tender offer for all of the
-----
outstanding common stock of Dr Pepper not already owned;
"Official List" means the Official List of the London Stock Exchange;
-------------
"Ordinary Shareholders" means the holders of Ordinary Shares whose
---------------------
names appear on the register of members at the close of business on Monday, 30
January 1995;
"Ordinary Shares" means ordinary shares of 25p each in the capital of
---------------
the Company;
"Preference Shareholders" means the holders of Preference Shares whose
-----------------------
names appear on the register of members at the close of business on Monday, 30
January 1995;
- # -
<PAGE>
"Preference Shares" means the preference shares of US$1,000 each in
-----------------
the capital of the Company and the preference shares of Can$1,000 each in the
capital of the Company;
"Press Announcement" means the press announcement in the agreed form
------------------
(Document B) containing, inter alia, details of the Rights Issue, the terms of
issue of the Stock Units, the Scrip Dividend and the principal terms of the KB
Offer Letter;
"Prohibited Shareholders" means (subject to Clause 4.1) Ordinary
-----------------------
Shareholders with registered addresses in Canada;
"Provisional Allotment Letter" means the provisional allotment letter
----------------------------
to be issued (subject to Clause 4) to Ordinary Shareholders (other than those on
the Australian Register) and the provisional allotment letter to be issued to
Ordinary Shareholders on the Australian Register, in each case in respect of
Stock Units (nil paid) and in each case in such terms as the Bank may approve
(such approval not to be unreasonably withheld or delayed);
"qualifying US institutional shareholders" means shareholders of the
----------------------------------------
Company in the United States who are institutional accredited investors as
defined in Rule 501 (a)(1),(2),(3), (7) or (8) under the US Securities Act of
1933, as amended;
"Registrars" means the Company's Registrars, being Lloyds Bank Plc,
----------
Lloyds Bank Registrars, The Causeway, Worthing, West Sussex BN99 6DA;
"Restricted Shareholders" means Ordinary Shareholders with registered
-----------------------
addresses in South Africa;
"Rights Issue" means the rights issue of Stock Units referred to in
------------
Recital (B) above;
"Scrip Admission" means the admission of the Scrip Dividend Shares to
---------------
the Official List becoming effective by the making of an announcement in
accordance with Paragraph 7.1 of the Listing Rules;
"Scrip Dividend" means the scrip dividend referred to in Recital (F)
--------------
above;
"Scrip Dividend Shares" means the Ordinary Shares to be issued
---------------------
pursuant to the Scrip Dividend;
"Scrip Offer Price" means the price at which the Bank will offer to
-----------------
purchase Scrip Dividend Shares pursuant to the KB Share Purchase Offer as set
out in the Press Announcement;
"SEC" means the United States Securities and Exchange Commission;
---
- # -
<PAGE>
"Second Instalment" means the amount of 238p per Stock Unit, which may
-----------------
become payable by not later than the Second Instalment Payment Date;
"Second Instalment Payment Date" means the date upon which the Second
------------------------------
Instalment becomes due and payable as set out in the Press Announcement;
"Specified Event" means an event occurring or matter arising on or
---------------
after the date hereof and before Admission which if it had occurred or arisen
before the date hereof would have rendered any of the representations and
warranties contained in Clause 9.1 untrue or incorrect in any material respect;
"Stock Units" means units of non-interest bearing convertible
-----------
unsecured loan stock of the Company of 25p nominal value to be constituted
pursuant to the Deed Poll;
"United States" means the United States of America or any of its
-------------
states, territories or possessions, including the District of Columbia;
"US Investor" means a US Shareholder or any person (including a
-----------
renouncee of the right to accept an allotment of Stock Units) lodging a
Provisional Allotment Letter who has not given the representation as to non-US
ownership contained therein or who the Company has reason to believe has
executed such Provisional Allotment Letter in, or despatched it from, the United
States or who provides an address in the United States for delivery of
definitive certificates for Stock Units;
"US Shareholder" means an Ordinary Shareholder having a registered
--------------
address in the United States; and
"VAT" means United Kingdom value added tax.
---
1.2 Any reference to a document being "in the agreed form" means in the
------------------
form of the draft or proof thereof signed for the purpose of identification by
Linklaters & Paines (on behalf of the Bank) and Slaughter and May (on behalf of
the Company) with such alterations (if any) as may subsequently be agreed by or
on behalf of the Bank and the Company. A complete list of documents in the
agreed form is set out in the Schedule.
1.3 The Interpretation Act 1978 shall apply to this Agreement in the same
way as it applies to an enactment.
1.4 In this Agreement the expressions "subsidiary undertaking" and
----------------------
"subsidiary" shall have the meanings given thereto in the Companies Act 1985.
----------
1.5 References in this Agreement to Clauses, sub-clauses and the Schedule
are to Clauses and sub-clauses of, and the Schedule to, this Agreement.
- # -
<PAGE>
1.6 Headings are included in this Agreement for convenience only and shall
be disregarded in its interpretation.
2 CONDITIONS
----------
Rights Issue
------------
2.1 The obligations of the Bank under Clause 4.5 and Clauses 5.1 to 5.7
(inclusive) of this Agreement are conditional upon:-
2.1.1 the Press Announcement being released by the Company to the
London Stock Exchange on the date hereof;
2.1.2 the Company delivering to the Bank, prior to Admission, a
copy of the Board Resolutions (duly certified to be a true and complete copy by
any director or the secretary of the Company) (together with a copy (duly
certified as aforesaid) of any resolution appointing any committee of the Board
making such resolutions);
2.1.3 the due execution and delivery as a deed of the Deed Poll by
the Company on or before 5.00 p.m. on Friday, 3 February 1995 (or such later
time and/or date as the Bank may agree);
2.1.4 the Listing Particulars being approved by the London Stock
Exchange in accordance with the Listing Rules and two copies thereof being
delivered to the Registrar of Companies for registration as required by section
149 of the FSA and the practice of the said Registrar by not later than 11.00
a.m. on Friday, 3 February 1995 (or such later time and/or date as the Bank may
agree);
2.1.5 the posting of the Issue Documents in accordance with Clause
3.4; and
2.1.6 Admission occurring before 9.00 a.m. on Monday, 6 February
1995 (or such later time and/or date as the Bank may agree).
2.2 The Company shall use all reasonable endeavours to procure the
fulfilment of the conditions set out in Clause 2.1 by the times and dates stated
therein.
2.3 The Company confirms that it has instructed the brokers to the Rights
Issue, Hoare Govett Corporate Finance Limited, to apply on its behalf to the
London Stock Exchange for approval of the Listing Particulars and Admission and
for admission of the Conversion Shares to the Official List, and undertakes to
provide such information, supply such documents, pay such fees, give such
undertakings and do all such acts and things as may reasonably be required to
enable Admission to become effective within the time specified in sub-clause
2.1.6 and admission of the Conversion Shares to the Official List by not later
than 8.30 a.m. on the first Business Day after the Conversion Date.
- # -
<PAGE>
2.4 Without prejudice to any of its rights under this Agreement, the Bank
agrees, at the request of the Company, to take reasonable steps to assist the
Company's application for Admission and for admission of the Conversion Shares
to the Official List.
2.5 If any of the conditions set out in Clause 2.1 is not fulfilled by
9.00 a.m. on Monday, 6 February 1995 (or such later time and/or date as the Bank
may agree) this Agreement shall cease and determine and no party to this
Agreement will have any claim against any other party to this Agreement for
costs, damages, compensation or otherwise except that:-
2.5.1 such termination shall be without prejudice to any accrued
rights or obligations under this Agreement;
2.5.2 the Company shall pay the commissions, fees and expenses
specified in Clause 7 except as may be provided therein; and
2.5.3 the provisions of Clauses 1, 9 (so far as is necessary to
give effect to Clause 10), 10, 12, 14, 15, 16 and 17 shall remain in full force
and effect.
Scrip Dividend
--------------
2.6 The obligations of the Bank under Clauses 5.9 to 5.14 (inclusive) are
conditional upon:-
2.6.1 the Company delivering to the Bank, prior to Scrip
Admission, a copy of board resolutions (duly certified to be a true and complete
copy by any director or the secretary of the Company) giving all necessary board
authorities for the making of the Scrip Dividend and the issue of the Scrip
Dividend Shares;
2.6.2 Scrip Admission occurring before 9.00 a.m. on Tuesday, 28
February 1995 (or such later time and/or date as the Bank may agree);
2.6.3 the passing of the special resolutions at the meeting on
Wednesday, 1 March 1995 referred to in the Press Announcement in relation to the
Scrip Dividend; and
2.6.4 the obligations of the Bank referred to in Clause 2.1 above
having become unconditional.
2.7 The Company shall use all reasonable endeavours to procure the
fulfilment of the conditions set out in Clause 2.6 by the times and dates stated
therein.
2.8 If any of the conditions set out in Clause 2.6 (other than that in
sub-clause 2.6.4) is not fulfilled by 9.00 a.m. on Tuesday, 28 February 1995 (or
such later time and/or date as the Bank may agree) this Agreement shall be
severed so that Clauses 5.9 to 5.14 (inclusive) (the "Severed Clauses") shall
---------------
cease to apply and no
- # -
<PAGE>
party to this Agreement will have any claim against any other party to this
Agreement for costs, damages, compensation or otherwise in connection with the
Severed Clauses except that:-
2.8.1 such termination shall be without prejudice to any accrued
rights or obligations under the Severed Clauses;
2.8.2 the provisions of all provisions of this Agreement other
than the Severed Clauses (including, for the avoidance of doubt and without
limitation, Clauses 7 and 10) shall remain in full force and effect.
3 THE RIGHTS ISSUE
----------------
3.1 As soon as practicable following the execution of this Agreement the
Company shall:-
3.1.1 by resolution of the Board provisionally allot the Stock
Units to Ordinary Shareholders who are not Prohibited Shareholders on the terms
set out in the Issue Documents;
3.1.2 by resolution of the Board provisionally allot to the Bank
or to such persons as the Bank shall direct Stock Units representing the
aggregate of fractional entitlements and Stock Units that would otherwise have
been provisionally allotted to Prohibited Shareholders (nil paid) to be dealt
with in accordance with Clause 4.5;
3.1.3 procure delivery to the Bank of a copy (duly certified to be
a true and complete copy by any director or the secretary of the Company) of
resolutions of the Board (in such form as may be agreed between the Company and
the Bank) confirming the provisional allotment of the Stock Units in accordance
with sub-clause 3.1.1 and sub-clause 3.1.2 and confirming that the Rights Issue
is to proceed.
3.2 As soon as practicable after 8.00 a.m. on Thursday, 26 January 1995,
the Company shall release the Press Announcement to the London Stock Exchange.
The Bank agrees, at the request of the Company, to take reasonable steps to
assist the Company with releasing the Press Announcement as aforesaid.
3.3 By not later than 11.00 a.m. on Friday, 3 February 1995 (or such later
time and/or date as the Bank may agree), subject to the approval of the Listing
Particulars by the London Stock Exchange in accordance with the Listing Rules,
the Company shall procure delivery to the Registrar of Companies of two copies
of the Listing Particulars for registration as required by section 149 of the
FSA.
3.4 By not later than 5.00 p.m. on Friday, 3 February 1995 (or such later
time and/or date as the Bank may agree), subject to the condition set out in
sub-Clause 2.1.3 having been satisfied, the Company shall (subject as provided
in Clause 4) procure the posting of the Circular and the Listing Particulars to
the Ordinary Shareholders and (for information only) the Preference Shareholders
- # -
<PAGE>
and shall (subject as provided in Clause 4) procure the posting of Provisional
Allotment Letters to the Ordinary Shareholders.
3.5 The Company agrees with the Bank:-
3.5.1 until the time of Admission, to comply with section 147 of
the FSA, to provide the Bank with copies of any supplements to the Listing
Particulars and to publish such supplements as may be required by the Listing
Rules; and
3.5.2 to make available at its registered office for 14 days after
the posting of the Listing Particulars and at the Company Announcements Office
of the London Stock Exchange for two Business Days following the date of such
posting copies of the Listing Particulars and of any supplements to the Listing
Particulars together, in each case, with copies of its report and accounts for
the financial period ended 1 January 1994.
3.6 Subject to the condition in sub-clause 2.1.4 having been satisfied,
the Company shall procure that a copy of each of the Circular, the Listing
Particulars and the Provisional Allotment Letter (in both forms) is lodged with
the Australian Securities Commission prior to delivery thereof to any Ordinary
Shareholder whose registered address is in Australia.
4 PROHIBITED SHAREHOLDERS, RESTRICTED SHAREHOLDERS AND FRACTIONS
--------------------------------------------------------------
4.1 The Issue Documents shall not be posted to Prohibited Shareholders.
If at the time that the Issue Documents are posted in accordance with Clause
3.4, Issue Documents may not lawfully be posted to Ordinary Shareholders with
registered addresses in Australia or on the Australian Register (without
registration or other further regulatory action), such shareholders shall be
deemed to be Prohibited Shareholders for the purposes of this Agreement.
4.2 The Company may post the Circular and Listing Particulars to US
Shareholders, but otherwise the Issue Documents shall not be posted to US
Shareholders except in accordance with Clause 4.4.
4.3 Provisional Allotment Letters posted to Restricted Shareholders shall
be stamped "Non-renounceable" and accompanied by a covering letter in such terms
as the Bank may approve (such approval not to be unreasonably withheld or
delayed).
4.4 The Company will not (i) post any Provisional Allotment Letter to a US
Shareholder or (ii) confirm any provisional allotment, or otherwise allot any
Stock Units, to any US Investor, in each case except in compliance with any
applicable laws and regulations.
4.5 As soon as practicable after dealings in the Stock Units commence (nil
paid), the Company shall deliver to the Bank a Provisional Allotment Letter (nil
paid) in respect of Stock Units representing fractional entitlements and in
respect of Stock Units which would have been provisionally allotted to
Prohibited Shareholders had they not been Prohibited Shareholders, in each
- # -
<PAGE>
case, to be provisionally allotted to the Bank or as it may direct pursuant to
Clause 3.1.2, and the Bank shall, if it is able before 3.00 p.m. on the Closing
Date to sell such rights to subscribe any such Stock Units represented thereby
at a price at least equal to the expenses of sale, sell such rights (or so many
thereof as practicable). The Bank shall as soon as practicable thereafter
deliver to the Company the said Provisional Allotment Letter duly renounced and
account to the Company or, if the Company so requests, to the Registrars for the
account of the Company for the proceeds of sale (after deduction of the expenses
of sale) whereupon the Company shall deliver to the Bank split Provisional
Allotment Letters (nil paid) in respect of such Stock Units in such
denominations as the Bank may notify the Company. For this purpose the Bank
acknowledges that the Company requires reasonable notice to enable the
Registrars to prepare such original Provisional Allotment Letters. Any of such
Stock Units the rights to which are not sold as aforesaid shall be dealt with as
Stock Units not taken up in accordance with Clauses 5.2 and 5.4.
4.6 In relation to the rights sold under Clause 4.5:-
4.6.1 the Company shall retain for its own benefit the proceeds of
sale (after deduction of the expenses of sale) of the fractional entitlements to
Stock Units;
4.6.2 the Company shall receive the proceeds of sale (after
deduction of the expenses of sale) of rights to subscribe the Stock Units which
would have been provisionally allotted to Prohibited Shareholders had they not
been Prohibited Shareholders for the account of the Prohibited Shareholders and
shall account to them in the proportion which the Stock Units to which they
would have been entitled had they been eligible to participate in the Rights
Issue bears to the total of such rights sold under Clause 4.5 except that the
Company shall retain for its own benefit individual amounts of less than
[British Pound] 3.00; and
4.6.3 save to the extent that the circumstances indicate clearly
to the contrary, sales shall be deemed to have been made in the first instance
in respect of Stock Units which would have been provisionally allotted to
Prohibited Shareholders had they not been Prohibited Shareholders.
5 UNDERWRITING OBLIGATIONS AND KB SHARE PURCHASE OFFER
----------------------------------------------------
Underwriting obligations
------------------------
5.1 If, by 3.00 p.m. on the Closing Date, Provisional Allotment Letters in
respect of all of the Stock Units (including any Stock Units falling within the
provisions of Clause 3.1.2 or allotted to US Investors in accordance with Clause
4.4) have been lodged for acceptance (whether by the persons to whom such Stock
Units were provisionally allotted or by renouncees of the right to accept
allotment) in accordance with the terms of the Issue Documents, together with
cheques which have not, before such time, been
- # -
<PAGE>
notified to the Registrars as not having been accepted by the drawee or
accompanied by other remittances for the full amount payable thereunder, the
Bank's obligations under Clauses 5.1 to 5.8 will cease. Stock Units comprised
in Provisional Allotment Letters which are so lodged together with such
remittances (including those allotted to US Investors in accordance with Clause
4.4) are herein referred to as having been "taken up" (as that expression may be
--------
extended by Clause 5.3), provided that if by 3.00 p.m. on the Closing Date the
Registrars, with the agreement of the Bank (such agreement not to be
unreasonably withheld), have determined pursuant to procedures maintained under
the Money Laundering Regulations 1993 that evidence as to identity satisfactory
to them has not been received within a reasonable period of time in respect of
any Provisional Allotment Letter lodged for acceptance and that such evidence is
unlikely to be forthcoming, the Stock Units comprised in that Provisional
Allotment Letter will be deemed not to have been taken up.
5.2 If, however, by 3.00 p.m. on the Closing Date any of the Stock Units
have not been taken up, the provisional allotment of such Stock Units will lapse
and the Company will as soon as practicable thereafter and in any event not
later than 9.00 a.m. on the Business Day following the Closing Date procure that
the Registrars notify the Bank in writing of the number of Stock Units not taken
up.
5.3 For the purposes of Clauses 5.1 and 5.2, the Company reserves the
right (to be exercised only with the consent of the Bank) to accept the Stock
Units comprised in any Provisional Allotment Letter as having been taken up by
the Closing Date if the required remittance is received prior to 3.00 p.m. on
the Closing Date from an authorised person (as defined in the FSA) specifying
the Stock Units concerned and undertaking to lodge the relevant Provisional
Allotment Letter in due course.
5.4 The Bank will endeavour to procure subscribers in the market for the
Stock Units advised as not taken up at a price not less than the total of the
First Instalment and the expenses of procuring such subscription not later than
the close of business on the second Business Day following the Closing Date on
the basis that any amount realised in excess of the total of the First
Instalment and such expenses shall be received and dealt with by the Company in
accordance with Clause 5.5 PROVIDED THAT the Bank shall not be required to
perform its obligations under this Clause 5.4 if it has been informed by the
brokers to the Rights Issue that, in their opinion, it is unlikely that any such
subscribers can be so procured at such price by such time. As soon as
reasonably practicable after notification by the Bank to the Company that
subscribers have been found by such time for all or some of the Stock Units not
taken up, the Company shall:-
5.4.1 allot the Stock Units for which subscribers shall have been
procured to such subscribers or to the Bank (as their agent) or to such persons
as the Bank may direct; and
- # -
<PAGE>
5.4.2 deliver to the Bank duly receipted fully paid Provisional
Allotment Letters in respect thereof in such names and in such denominations as
the Bank may notify the Company. For this purpose the Bank acknowledges that
the Company requires reasonable notice to enable the Registrars to prepare such
original Provisional Allotment Letters. The Bank will as soon as practicable
thereafter, and in any event not later than 3.00 p.m. on the fourth Business Day
after the Closing Date, pay to the Company an amount in sterling equal to the
aggregate of the number of Stock Units for which subscribers shall have been
procured pursuant to this Clause 5.4 multiplied by the price at which
subscribers have been so procured (after deduction of the expenses of procuring
such subscriptions) in the same manner as provided in Clause 5.8.
5.5 The Company will receive the net proceeds of subscriptions pursuant to
Clause 5.4:-
5.5.1 as to the First Instalment, for its own account; and
5.5.2 as to any premium over the First Instalment (after deduction
of the expenses of procuring such subscriptions), for the account of Ordinary
Shareholders who did not take up all of the Stock Units provisionally allotted
to them or which would have been provisionally allotted to them had they not
been Prohibited Shareholders and the Company will account to such Ordinary
Shareholders for such premia in the proportion which their respective
entitlements to Stock Units which they did not take up (or, in the case of
Prohibited Shareholders, which would have been provisionally allotted to them
had they not been Prohibited Shareholders) bears to the total entitlements to
Stock Units not taken up (including Stock Units which would have been
provisionally allotted to Prohibited Shareholders had they not been Prohibited
Shareholders) except that individual amounts of less than [British Pound] 3.00
will not be so paid but will be retained for the benefit of the Company.
5.6 The Bank, as underwriter, will as agent for the Company procure
subscribers, failing which it will subscribe, on the terms of the Press Release
and the Issue Documents (so far as the same are applicable) for any of the Stock
Units not taken up and not otherwise subscribed pursuant to Clause 5.4 and will,
not later than the fourth Business Day after the Closing Date, pay, or procure
payment to the Company of, the First Instalment for such Stock Units against
delivery to the Bank or as the Bank may direct of duly receipted fully paid
Provisional Allotment Letters for such Stock Units in such names and in such
denominations as the Bank may notify the Company. For this purpose the Bank
acknowledges that the Company requires reasonable notice to enable the
Registrars to prepare such original Provisional Allotment Letters.
5.7 In default of the Bank complying with its obligations under Clause 5.6
the Company will be entitled (and is hereby irrevocably authorised) to treat
this Agreement as the Bank's application for such Stock Units on the terms set
out in the Issue Documents (to the
- # -
<PAGE>
extent they are applicable) and subject to the Memorandum and Articles of
Association of the Company and to allocate and issue the same to the Bank and to
register the same in the Bank's name and payment therefor at the First
Instalment will be made by the Bank forthwith.
5.8 Payments to the Company by the Bank pursuant to Clauses 5.4, 5.6 and
5.7, and also pursuant to Clauses 4.5 and 5.14, shall be made to Lloyds Bank
Plc, City Office, 72 Lombard Street, London EC3P 3BT, sort code 30-00-02,
account name Cadbury Schweppes Finance Limited, account no. 00885555 in
immediately available funds.
KB Share Purchase Offer
-----------------------
5.9 The Bank shall, at the same time as the Company procures the posting
of the Issue Documents pursuant to Clause 3.4, procure the posting of the KB
Offer Letter to all Ordinary Shareholders, except as provided in Clause 5.10.
5.10 The Bank shall not be obliged to post a KB Offer Letter to any
shareholder if the Bank reasonably believes that such posting or any action
contemplated by such letter may be in breach of any law or regulatory
requirement. The Bank shall not be obliged to make any filing under local law
or otherwise take any step to enable such posting to be made or action to be
taken. The Bank acknowledges that the Company has received advice from
Australian legal counsel that the KB Share Purchase Offer may be made in
Australia.
5.11 If, by 3.00 p.m. on the Closing Date, there are no valid acceptances
under the KB Share Purchase Offer, the Bank's obligations under Clauses 5.11 to
5.14 will cease. Whether there has been such a valid acceptance shall be in the
Bank's sole opinion, acting reasonably, and without prejudice to the generality
of the foregoing the Bank shall be entitled, but not obliged, to treat late
acceptances as valid. Any Scrip Dividend Shares in respect of which a valid
election is made, or deemed to be made, under this Clause 5.11, are referred to
herein as "Elected Shares".
--------------
5.12 The Bank will endeavour to procure purchasers in the market for the
Elected Shares at a price not less than the total of the Scrip Offer Price and
the expenses of procuring such subscription not later than the close of business
on the second Business Day following the Closing Date PROVIDED THAT the Bank
shall not be required to perform its obligations under this Clause 5.12 if it
has been informed by the brokers to the Rights Issue that, in their opinion, it
is unlikely that any such subscribers can be so procured at such price by such
time. If the Bank fails to find such purchasers for some or all of the Elected
Shares (or is so notified by the brokers to the Rights Issue), the Bank shall
itself purchase the Elected Shares at the Scrip Offer Price in accordance with
the terms of the KB Share Purchase Offer.
5.13 As soon as reasonably practicable after the Bank has notified the
Company that the Bank has procured purchasers for, or itself purchased, the
Elected Shares, the Company shall issue to the Bank
- # -
<PAGE>
share certificates in respect of those Elected Shares in such names and
denominations as the Bank may notify the Company. For this purpose the Bank
acknowledges that the Company requires reasonable notice to enable the
Registrars to prepare such share certificates. The Bank will as soon as
practicable thereafter, and in any event (subject to receipt of the share
certificates) not later than 3.00 p.m. on the fourth Business Day after the
Closing Date, pay to the Company (which it shall be deemed to do if it pays the
Registrars for the account of the Company) an amount in sterling equal to the
amount payable to sellers of Elected Shares in accordance with the KB Share
Purchase Offer as described in this Clause 5.13 in the same manner as provided
in Clause 5.8.
5.14 The Company will receive the net proceeds of payments pursuant to
Clause 5.13 for the account of the sellers of Elected Shares and the Company
will account to the sellers of Elected Shares entitled thereto. Payment to the
Company by the Bank under this Clause 5.14 shall be a complete discharge of the
Bank's obligations in connection with such Elected Shares and accordingly the
Bank shall have no obligation to see how or whether the monies are disbursed by
the Company.
6 THE BANK'S CAPACITY
-------------------
6.1 Any transaction carried out by the Bank pursuant to Clauses 4.5 or 5.4
will constitute a transaction carried out in the capacity of agent at the
request of the Company and not in respect of the Bank's own account. The
Company confirms that the Bank shall have all powers, authorities and
discretions on behalf of the Company which are necessary for or incidental to
its obligations under this Agreement, including the power to appoint agents to
act on its behalf in connection with its obligations hereunder, except that:-
6.1.1 the Bank shall exercise reasonable care in the appointment
of, and in instructing, any such agent;
6.1.2 the appointment of any such agent shall not relieve the Bank
of any obligation to the Company; and
6.1.3 no exercise of any such power, authority or discretion shall
thereby increase the obligations or liabilities of the Company.
6.2 The Bank will not in the absence of negligence, bad faith or wilful
default be responsible for any loss or damage to any person arising from any
such transaction or for any alleged insufficiency of any dealing price (other
than as a result of non-compliance by the Bank with the provisions of Clauses
4.5 or 5.4) at which any of the rights to the Stock Units, or the Stock Units
themselves, or the Elected Shares may be sold by it or for the timing of any
such transaction.
7 FEES, COMMISSIONS AND EXPENSES
------------------------------
Rights Issue
------------
7.1 In consideration of the Bank's agreement to underwrite the
- # -
<PAGE>
issue of the Stock Units and the Bank's services in connection with such issue,
the Company will pay to the Bank (together with VAT where applicable):-
7.1.1 a commission of 1.25 per cent. on the sum of
[British Pound] 405,065,293.40 being the aggregate value at the Issue Price
of the maximum number of the Stock Units;
7.1.2 a further commission of 0.125 per cent. on the sum referred
to in sub-clause 7.1.1 for each additional period of seven days or part thereof
following the initial period of 30 days from and including the date of this
Agreement up to and including the second Business Day after the Closing Date or,
if earlier, the date when the Bank's obligations hereunder are terminated or
lapse or otherwise cease to be capable of becoming unconditional;
7.1.3 subject to fulfilment (or waiver) of the conditions set out
in Clause 2.1, a further commission of 0.75 per cent. on a sum equal to the
aggregate value of the First Instalment in respect of the maximum number of
Stock Units;
7.1.4 subject to fulfilment (or waiver) of the conditions set out
in Clause 2.1, and to the Second Instalment being called, a further commission
of 1.125 per cent. on a sum equal to the aggregate value of the Second
Instalment in respect of the maximum number of Stock Units; and
7.1.5 the Bank's reasonable legal and out-of-pocket expenses in
connection with the Rights Issue, the Scrip Dividend and the KB Share Purchase
Offer (including an amount equal to any VAT thereon not otherwise recoverable by
the Bank).
7.2 Save as provided in sub-clauses 7.1.3 and 7.1.4, payment of the
amounts referred to in Clause 7.1 shall be made whether or not the conditions
set out in Clause 2.1 are fulfilled or the Bank's obligations under this
Agreement are terminated pursuant to Clause 11.
7.3 Out of the commissions referred to in sub-clauses 7.1.1 to 7.1.3 the
Bank will pay (together with VAT where applicable):-
7.3.1 sub-underwriting commissions in respect of the Stock Units;
and
7.3.2 a fee to the brokers to the Rights Issue.
7.4 The amounts payable pursuant to Clause 7 shall become payable as soon
as practicable following the Closing Date or, if applicable, within two Business
Days of any announcement that the Rights Issue has been terminated (or, in the
case of payments under Clause 7.7, within two Business Days of any decision that
the Scrip Dividend will not be proceeded with substantially in accordance with
the timetable set out in the Press Announcement). The Bank may withhold from
any payment to be made by the Bank to the Company pursuant to
- # -
<PAGE>
Clause 5 the amounts payable pursuant to sub-clauses 7.1.1, 7.1.2, 7.1.3, 7.1.4,
7.7.1, 7.7.2 and 7.7.3 and any SDRT and/or stamp duty payable pursuant to Clause
7.5 or as referred to in sub-clause 7.6.3 and, to the extent that the aggregate
of such amounts exceeds any such payment, the Company shall instruct the brokers
to the Rights Issue to pay to the Bank, or as the Bank shall direct, out of
monies received by the brokers to the Rights Issue and due to the Company in
respect of the First Instalment on Stock Units for which subscribers are
procured pursuant to Clause 5.4 or Clause 5.6, the amount of such excess.
7.5 Save as provided in Clauses 7.3 and 7.9, the Company will bear all
expenses of or incidental to the issue of the Stock Units and the making of the
KB Share Purchase Offer including, without limitation, the fees of its
professional advisers, the cost of printing and distribution of the Press
Announcement, the Issue Documents, the KB Offer Letter and all other documents
connected with the Rights Issue and the making of the KB Share Purchase Offer,
the Registrars' fees, depositary fees, the listing fees of the London Stock
Exchange, the Australian Stock Exchange Limited and NASDAQ, the SDRT and/or
stamp duty payable on the sale to purchasers of Elected Shares pursuant to
Clause 5.12 and, where applicable, VAT. The Company will forthwith upon demand
by the Bank reimburse the Bank the amount of any such expenses which the Bank
may have paid on behalf of the Company and, if applicable, in addition to the
amount so reimbursed, pay to the Bank an amount equal to any VAT which may be
imposed on the Bank in respect of such reimbursement. The Bank agrees to use
reasonable efforts to procure the provision of an appropriate tax invoice in
respect of the supply or supplies to which any reimbursement relates, naming the
Company as the recipient of the supply and the person making the supply (and not
the Bank) as the supplier.
7.6 Although the Company and the Bank are of the view that no such duty or
tax is payable in the circumstances hereafter described, without prejudice to
Clause 7.5, the Company shall pay forthwith upon demand by the Bank any stamp
duty, bearer instrument duty or stamp duty reserve tax imposed under the laws of
the United Kingdom which is paid or payable by the Bank or by any subscribers of
Stock Units procured by the Bank pursuant to the terms of this Agreement. For
the avoidance of doubt, this Clause:-
7.6.1 applies only to the allotment and issue of Stock Units to
the Ordinary Shareholders to whom the same were allotted pursuant to Clause 3.1
or to the issue of Stock Units to renouncees of the right to accept allotment or
to subscribers procured in accordance with Clause 5.4 or 5.6 or to the Bank on
the subscription of Stock Units by it in connection with its underwriting
obligation in Clause 5.6 and 5.7;
7.6.2 shall not extend to any stamp duty, bearer instrument duty
or stamp duty reserve tax payable in respect of transfers of, or agreements to
transfer, Stock Units subsequent to any such Stock Units having been subscribed
by persons procured by the Bank or by the Bank itself; and
- # -
<PAGE>
7.6.3 shall not extend to any stamp duty reserve tax chargeable
under Section 93 or Section 96 of the Finance Act 1986 or to any stamp duty to
the extent that the same is increased pursuant to Section 67 or Section 70 of
that Act (provided that the Company shall pay or procure to be paid forthwith on
demand by the Bank any SDRT and/or stamp duty arising by virtue of any Stock
Units being taken up through the Company's US ADR Facility).
7.7 In consideration of the Bank's agreement to make the KB Share Purchase
Offer and the Bank's services in connection with such offer, the Company will
pay to the Bank (together with VAT where applicable):-
7.7.1 a commission of 1.25 per cent. on the sum of
[British Pound] 122,614,356.40 being the aggregate value at the Scrip Offer
Price of the Scrip Dividend Shares;
7.7.2 a further commission of 0.125 per cent. on the sum referred
to in sub-clause 7.7.1 for each additional period of seven days or part thereof
following the initial period of 30 days from and including the date of this
Agreement up to and including the second Business Day after the Closing Date or,
if earlier, the date when the Bank's obligations hereunder are terminated or
lapse or otherwise cease to be capable of becoming unconditional; and
7.7.3 subject to fulfilment (or waiver) of the conditions set out
in Clause 2.6, a further commission of 1.0125 per cent. (being the aggregate of
0.75 x 0.3 and 1.125 x 0.7) on the sum referred to in sub-clause 7.7.1.
7.8 Save as provided in sub-clause 7.7.3, payment of the amounts referred
to in Clause 7.7 shall be made whether or not the conditions set out in Clause
2.6 are fulfilled or the Bank's obligations under this Agreement are terminated
pursuant to Clause 11.
7.9 Out of the commissions referred to in sub-clauses 7.7.1 to 7.7.3 the
Bank will pay (together with VAT where applicable):-
7.9.1 placing commissions in respect of the Elected Shares for
which the Bank procures purchasers pursuant to Clause 5.12; and
7.9.2 a fee to the brokers in connection with such placing.
7.10 Nothing in this Agreement shall affect any existing liability of the
Company at the date of this Agreement to pay to the Bank any fee for corporate
finance advice or otherwise.
8 ANNOUNCEMENTS
-------------
Save as expressly required hereunder, by law or by the London Stock Exchange or
any other relevant stock exchange, bourse or trading market
- # -
<PAGE>
in the United States of America or Australia and then only after consultation
with the Bank (if reasonably practicable), no public announcement or
communication concerning:-
8.1 the Offer or otherwise concerning Dr Pepper; or
8.2 the Company and/or its subsidiaries which is or may be material in the
context of the Rights Issue,
may be made or despatched between the date hereof and the date which is four
Business Days after the Closing Date (inclusive) without the consent of the Bank
(such consent not to be unreasonably withheld or delayed) as to the content,
timing and manner of making or despatch thereof and the Company will, to the
extent reasonably practicable, take into account all reasonable requirements on
the Bank's part in relation thereto.
9 REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
--------------------------------------------
9.1 The Company represents and warrants to the Bank that, save as herein
expressly provided:-
9.1.1 to the best of the knowledge and belief of the directors of
the Company, having made enquiry to the standard which would be required under
Section 146(2) of the FSA if the Press Announcement constituted listing
particulars, all statements of fact contained in the Press Announcement are true
and accurate in all material respects and not misleading and all expressions of
opinion, intention and expectation contained in the Press Announcement are
honestly held and made after due and careful enquiry and consideration;
9.1.2 to the best of the knowledge and belief of the directors of
the Company, having made enquiry to the standard which would be required under
Section 146(2) of the FSA if the Press Announcement constituted listing
particulars, there is no information which is not disclosed in the Press
Announcement the omission of which makes any statement therein misleading in any
material respect or which, in the context of the Rights Issue or the Scrip
Dividend, might be material for disclosure therein;
PROVIDED THAT, to the extent that the representations and warranties
contained in sub-clauses 9.1.1 and 9.1.2 relate to facts relating to Dr Pepper
or their respective businesses, or relate to expressions of opinion, intention
or expectation ascribed to Dr Pepper or their respective officers or employees,
the Company represents and warrants only that such facts or expressions of
opinion, intention or expectation have been accurately and fairly extracted from
public records of Dr Pepper, as the case may be, and that the Company is not
aware, having regard, inter alia, to any information disclosed to it by or on
behalf of Dr Pepper of any matter or information which would render such facts
false or misleading in any material respect or indicate that such expressions of
opinion, intention
- # -
<PAGE>
or expectation are not fair and honestly held and made after due and careful
enquiry;
9.1.3 the Press Announcement contains all such information which
investors and their professional advisers would reasonably require, and
reasonably expect to find in the Press Announcement, (on the basis that such
investors would be basing their decision to invest on that document alone) for
the purpose of making an informed assessment of the assets and liabilities,
financial position, profits and losses and prospects of the Company and of the
rights attaching to the Stock Units;
9.1.4 at the time of the issue of the Issue Documents, to the best
of the knowledge and belief of the directors of the Company, having made enquiry
to the standard required under Section 146(2) of the FSA in the case of the
Listing Particulars, all statements of fact contained in the Issue Documents
will be true and accurate in all material respects and not misleading and all
expressions of opinion, intention and expectation contained in the Issue
Documents will be fair and honestly held and made after due and careful enquiry
and consideration;
9.1.5 at the time of the issue of the Issue Documents, to the best
of the knowledge and belief of the directors of the Company, having made enquiry
to the standard required under Section 146(2) of the FSA in the case of the
Listing Particulars there will be no information which is not disclosed in the
Issue Documents, the omission of which makes any statement therein misleading in
any material respect or which, in the context of the Rights Issue or the Scrip
Dividend, might be material for disclosure therein;
PROVIDED THAT, to the extent that the representations and warranties
contained in sub-clauses 9.1.4 and 9.1.5 relate to facts relating to Dr Pepper
or their respective businesses, or relate to expressions of opinion, intention
or expectation ascribed to Dr Pepper or their respective officers or employees,
the Company represents and warrants only that such facts or expressions of
opinion, intention or expectation have been accurately and fairly extracted from
public records of Dr Pepper, as the case may be, and that the Company is not
aware, having regard, inter alia, to any information disclosed to it by or on
behalf of Dr Pepper of any matter or information which would render such facts
false or misleading in any material respect or indicate that such expressions of
opinion, intention or expectation are not fair and honestly held and made after
due and careful enquiry;
9.1.6 the Issue Documents will contain all such information which
investors and their professional advisers would reasonably require, and
reasonably expect to find in the Issue Documents, for the purpose of making an
informed assessment of the assets and liabilities, financial position, profits
and
- # -
<PAGE>
losses and prospects of the Company and of the rights attaching to the Stock
Units;
9.1.7 the Issue Documents will contain all particulars and
information required by, and the issue of the Stock Units and the Scrip Dividend
Shares and the issue or publication of the Press Announcement and the Issue
Documents will comply in all respects and so far as relevant with, the Companies
Act 1985, the FSA, the Listing Rules, all other relevant rules and regulations
of the London Stock Exchange, all other relevant laws and regulations whether in
the United Kingdom or elsewhere and all agreements to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound, save that (a) in relation to compliance with relevant
laws and regulations outside the United Kingdom, the United States and Australia
such warranty is only given so far as the Company is aware and (b) in relation
to compliance with agreements there shall be ignored any non-compliance which is
immaterial in the context of the Rights Issue and the Scrip Dividend;
9.1.8 the audited financial statements contained in the Accounts,
a true copy of which has been delivered to the Bank, have been properly prepared
in accordance with the Companies Act 1985 and (except to the extent (if any)
disclosed therein) generally accepted accounting principles or practice
consistently applied and give a true and fair view of the state of affairs of
the Company and the Group as at 1 January 1994 and of the Group profit and cash
flows for the financial period to that date;
9.1.9 the financial information contained in any interim unaudited
statement which is set out in the Listing Particulars will have been prepared
with all reasonable care and attention and in accordance with generally accepted
accounting principles or practice consistent with those used in the preparation
of the audited financial statements contained in the Accounts insofar as
appropriate in the preparation of an interim unaudited statement and all
statements of fact contained in such statement relating to the Group will be in
the context of such interim statement true and accurate in all material respects
and not misleading and all expressions of opinion, intention and expectation
contained therein will be fair and honestly held and will have been made after
due and careful enquiry and consideration;
9.1.10 neither the Company nor any of its subsidiaries is or has
during the 12 months preceding the date of this Agreement been engaged in any
legal or arbitration proceedings which may have or has had during such period a
significant effect on the financial position of the Company and its subsidiaries
taken as a whole, nor so far as the directors of the Company are aware, are any
such proceedings pending or threatened against the Company or any of its
subsidiaries;
- # -
<PAGE>
9.1.11 except as disclosed to the Bank in writing prior to the date
hereof by express reference to this Clause 9.1.11 or as disclosed in the Press
Announcement, since 1 January 1994 neither the Company nor any of its subsidiary
undertakings has entered into any contract or commitment of an unusual or
onerous nature which, in the context of the Rights Issue or the Scrip Dividend,
is in accordance with the Listing Rules and the FSA material for disclosure, nor
(save as aforesaid) do any of them presently intend before the date which is
four Business Days after the Closing Date to enter into any such contract or
commitment which if it were entered into would be a "Class 2", "Class 1" or
"Super Class 1" transaction within the meaning of the Listing Rules (and
assuming for this purpose that no dispensation would be given by the London
Stock Exchange from the literal application of the relevant rules save pursuant
to such rules). Except as disclosed to the Bank in writing prior to the date
hereof by express reference to this Clause 9.1.11 or as disclosed in the Press
Announcement, the directors of the Company are not aware of any material adverse
change in the financial or trading position of the Company and its subsidiary
undertakings taken as a whole since 1 January 1994;
9.1.12 no material outstanding indebtedness of the Company or any
of its subsidiary undertakings has become repayable before its stated maturity
by reason of default by the Company or any of its subsidiary undertakings and no
event has occurred or is, to the best of the knowledge, information and belief
of the Group, impending which with the lapse of time or the fulfilment of any
condition or the giving of notice or the compliance with any other formality may
result in any such indebtedness becoming so repayable;
9.1.13 the Company has power under its Memorandum and Articles of
Association to enter into and perform this Agreement and to issue the Stock
Units and to make the Scrip Dividend in accordance with the Press Announcement
and (subject to any shareholder approvals expressly contemplated by the Press
Announcement) without any further sanction and this Agreement is duly authorised
and constitutes legally binding obligations of the Company;
9.1.14 all written information relating to the Company and its
subsidiary undertakings supplied by the Company to the Bank for the purpose of
the Bank's examination and review of the working capital projections of the
Company and its subsidiary undertakings is, or will be when so supplied, true
and accurate in all material respects and is not by itself or by omission
misleading;
9.1.15 (a) the statement set out immediately below this sub-clause
9.1.15 represents, and (b) the statements relating to working capital contained
in the Issue Documents will represent, the true and honest belief of the
directors of the Company arrived at after due and careful consideration and
enquiry
- # -
<PAGE>
"The directors of the Company are of the opinion that, taking
account of publicly available information relating to Dr Pepper and having
regard to available bank and other facilities and the proceeds of the Rights
Issue, the working capital available to the enlarged Group is sufficient for its
present requirements";
9.1.16 (a) the statements relating to the estimated profit of the
Company and/or the Group contained in the Press Announcement represent, and
those contained in the Issue Documents will represent, the true and honest
belief of the directors of the Company arrived at after due and careful
consideration and enquiry; and (b) the estimated figures for profit before
taxation and earnings per share of the Group for the year ended 31 December 1994
contained in the Issue Documents will not be less than those contained in the
Press Announcement;
9.1.17 save as is necessary to reflect any new matters arising
between the issue of the Press Announcement and the issue of the Issue
Documents, the Issue Documents will not be inconsistent in any material respect
with the Press Announcement and in particular will not contain any material
matter not in the Press Announcement or omit any material matter in the Press
Announcement or cause any statement in either the Press Announcement or the
Issue Documents to be misleading in any material respect, in each case
materiality being judged in the context of the Rights Issue or the Scrip
Dividend;
9.1.18 on issue, the Scrip Dividend Shares and the Conversion
Shares will rank pari passu with the then issued Ordinary Shares in every
respect (other than in respect of entitlement to dividends in respect of the
financial period ended 31 December 1994);
9.1.19 the Scrip Dividend Shares and, except as otherwise provided
in this Agreement, the Stock Units will when allotted be free from all claims,
charges, liens, encumbrances and equities;
9.1.20 to the extent of the knowledge and belief of the directors
of the Company, having regard, inter alia, to any information disclosed to it by
or on behalf of Dr Pepper, and other than as disclosed in the Press
Announcement: neither Dr Pepper nor any of its subsidiaries is or has during the
12 months preceding the date of this Agreement been engaged in any legal or
arbitration proceedings which may have or has had during such period a
significant effect on the financial position of Dr Pepper and its subsidiaries
taken as a whole, nor are any such proceedings pending or threatened against
Dr Pepper or any of its subsidiaries;
9.1.21 to the extent of the knowledge and belief of the directors
of the Company, having regard, inter alia, to any information disclosed to it by
or on behalf of Dr Pepper and
- # -
<PAGE>
except as disclosed to the Bank in writing prior to the date hereof by express
reference to this Clause 9.1.21 or as disclosed in the Press Announcement: since
1 January 1994 neither Dr Pepper nor any of its subsidiary undertakings has
entered into any contract or commitment of an unusual or onerous nature which,
in the context of the Rights Issue or the Scrip Dividend, is in accordance with
the Listing Rules and the FSA material for disclosure, nor (save as aforesaid)
do any of them presently intend before the date which is four Business Days
after the Closing Date to enter into any such contract or commitment which if it
were entered into (and if Dr Pepper were listed on the London Stock Exchange)
would be a "Class 2", "Class 1" or "Super Class 1" transaction within the
meaning of the Listing Rules (and assuming for this purpose that no dispensation
would be given by the London Stock Exchange from the literal application of the
relevant rules save pursuant to such rules), and there has been no material
adverse change in the financial or trading position of Dr Pepper and its
subsidiary undertakings taken as a whole since the date of the last published
audited accounts of Dr Pepper.
9.2 The representations and warranties given in Clause 9.1 shall remain in
full force and effect notwithstanding the completion of issue of the Stock Units
and the Scrip Dividend and all other matters and arrangements referred to in or
contemplated by this Agreement.
9.3 The Company undertakes to the Bank:-
9.3.1 not to cause and to use all reasonable endeavours not to
permit any Specified Event to occur before Admission; and
9.3.2 to give notice to the Bank of any breach of any of the
representations, warranties or undertakings contained in this Clause 9 or any
other provision of this Agreement, or of the occurrence of any Specified Event,
which shall come to the knowledge of the Company prior to Admission.
9.4 The Company will not, and will procure that none of its subsidiary
undertakings will, between the date hereof and the date which is four Business
Days after the Closing Date enter into any agreement, commitment or arrangement
which is material in the context of the business or affairs of the Company and
its subsidiaries taken as a whole or which is likely materially and adversely to
affect the Rights Issue or the price at which the Stock Units are traded or the
Scrip Dividend.
9.5 The Company undertakes and acknowledges to the Bank that neither it,
its affiliates nor any person acting on its behalf has engaged or will engage in
any "directed selling efforts" with respect to the Stock Units. The Company
further undertakes that there is no substantial US market interest in the Stock
Units. Terms used in this Clause 9.5 have the meanings ascribed to them by
Regulation S under the US Securities Act of 1933, as amended.
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<PAGE>
Without limiting the generality of the foregoing, the Company undertakes not to
issue the Press Announcement in the United States.
9.6 The Company agrees and acknowledges that, notwithstanding the terms of
this Agreement, the warranties given by the Company to the Bank as set out in
this Clause 9 are also given by the Company to each Placee (as defined below)
and accordingly the Bank enters into this Agreement in its own capacity and (for
the purposes of this Clause 9.6 only) as trustee for the Placees, provided that
in the event that any Placees wish to take action against the Company pursuant
to this Clause 9.6 the Bank shall use its reasonable endeavours to consolidate
such actions (together with any such action the Bank wishes to take) and, to the
extent reasonably practicable, avoid unnecessary duplication of actions. In
this Clause 9.6, "Placee" means:
------
(a) any purchaser of rights pursuant to Clause 4.5;
(b) any subscriber in the market pursuant to Clause 5.4;
(c) any sub-underwriter of the Bank's obligations in Clause 5.6; and
(d) any purchaser of Elected Shares procured pursuant to Clause 5.12.
For the avoidance of doubt this Clause 9.6 shall not give the Placees any
right of termination or rescission in respect of this Agreement or any sub-
underwriting, placing or other agreement to which the Placee is party.
10 INDEMNITY
---------
10.1 The Company agrees to indemnify the Bank against all losses,
liabilities, claims, costs, charges and expenses:-
10.1.1 which the Bank may suffer or incur as a person who has
authorised the contents of the Listing Particulars or any part thereof for the
purpose of section 152 of the FSA or has consented to the issue of the Circular;
or
10.1.2 which the Bank may suffer or incur as a person who has
issued or approved the contents of any investment advertisement (as defined for
the purpose of section 57(2) of the FSA) issued by or with the consent of the
Company in connection with the Rights Issue for the purpose of section 57(1) of
the FSA; or
10.1.3 which may be brought against or incurred by the Bank in
connection with or arising out of:-
(i) the issue of the Press Announcement or the Issue Documents
(or any of them); or
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<PAGE>
(ii) any breach or alleged breach by the Company of the
representations, warranties or undertakings contained in Clause 9 or any other
provision of this Agreement; or
(iii) the performance by the Bank of its obligations under this
Agreement (other than any obligation to subscribe for Stock Units under Clause
5); or
(iv) the issue of the Stock Units;
except:
(a) to the extent that such losses, liabilities, claims, costs,
charges and expenses arise because of the negligence, bad faith or wilful
default or the breach of this Agreement by the Bank; and
(b) taxation on any commissions or fees payable hereunder or on
any gain or profit on the sale of the Stock Units or with respect to stamp duty
or stamp duty reserve tax paid or payable on the sale or transfer to purchasers
of any Stock Units.
10.2 If the Bank becomes aware of any claim relevant for the purposes of
Clause 10.1, the Bank shall promptly notify the Company thereof and shall,
subject to being indemnified and secured to its satisfaction by the Company
against all losses, liabilities, claims, costs, charges and expenses suffered or
incurred thereby, take or procure to be taken such action as the Company may
reasonably request to avoid, dispute, resist, appeal, compromise or defend such
claim, and the Bank shall provide the Company and its legal advisers with such
information and documentation relating to such claim as the Company may
reasonably require. The Company shall, so far as practicable and not in the
reasonable opinion of the Bank materially prejudicial to the handling and
defence of the claim, be entitled:-
10.2.1 to attend all conferences with Counsel which relate to the
defence or handling of any claim by any third party against the Bank relevant
for the purposes of Clause 10.1;
10.2.2 to attend all meetings or discussions with any party which
has made or threatened to make a claim against the Bank which may be relevant
for the purposes of Clause 10.2;
10.2.3 to receive copies of all correspondence received from or
sent to any such party; and
10.2.4 to approve any instructions which are given to Counsel in
respect of the defence or handling of any such claim and shall be given an
opportunity to present such evidence as it may consider to be material to the
defence of any such claim,
PROVIDED AND TO THE EXTENT THAT the same would not in the reasonable
opinion of the Bank adversely affect its business reputation or the Bank's
ability to claim successfully under any insurance policy
- # -
<PAGE>
which it may have taken out or prejudice any claim to privilege in respect
of any document. If the Company fails so to indemnify and secure the Bank
to the Bank's satisfaction and to request the Bank to take action in
response to a claim within 14 days of the notification of such claim to the
Company, the Bank may pay or settle or resist or otherwise deal with the
claim as it in its absolute discretion thinks fit.
10.3 No claim shall be made against the Bank by the Company to recover any
losses, liabilities, claims, costs, charges or expenses suffered or incurred by
the Company in connection with or arising out of the performance by the Bank of
its obligations under this Agreement, the issue of the Stock Units, the issue of
the Press Announcement or the Issue Documents (or any of them) or the Rights
Issue generally unless and to the extent that such losses, liabilities, claims,
costs, charges or expenses arise from the negligence, bad faith or wilful
default of the Bank or its failure to comply with its obligations under this
Agreement.
10.4 If any sum payable under this Clause 10 shall be subject to a taxation
charge in the hands of the Bank, the sum payable shall be increased to such sum
as will ensure that after payment of such taxation the Bank shall be left with a
sum equal to the sum that it would have received in the absence of such taxation
charge after giving credit for any tax relief available to the Bank in respect
of the losses, liabilities, claims, costs, charges, expenses and payments giving
rise to such payment including (without prejudice to the generality of the
foregoing) any deduction from profits, gains or income available in respect of
such losses, liabilities, claims, costs, charges, expenses and payments.
10.5 For the purposes of this Clause 10, the expression "the Bank" shall
include each of its directors, officers, employees and agents.
10.6 If any proceedings shall be instituted or threatened which may give
rise to a claim in respect of breach of any of the representations or warranties
contained in Clause 9 or under the indemnity contained in Clause 10 the person
against whom such proceedings have been instituted or threatened shall promptly
give notice thereof to the Company PROVIDED THAT failure to do so shall be
without prejudice to the right to claim in respect of any such breach or under
such indemnity except to the extent that the Company is prejudiced by such
failure.
10.7 The Bank acknowledges to the Company as agent for each director and
officer of the Company that no director or officer of the Company shall have
personal legal liability to it in respect of the Rights Issue (including, for
the avoidance of doubt, in respect of the Listing Particulars) except to the
extent of any liability under the FSA (which shall in no way be increased or
reduced by any provision of this Agreement) or for fraud or wilful default.
- # -
<PAGE>
11 TERMINATION
-----------
11.1 If before Admission it shall come to the notice of the Bank or the
Company that:-
11.1.1 any statement contained in the Press Announcement or the
Issue Documents has been discovered to have been untrue, incorrect or misleading
in any material respect at the time of issue of that document; or
11.1.2 there has been a material breach of any of the
representations, warranties or undertakings contained in Clause 9 or any other
material provision of this Agreement,
the Bank or the Company, as the case may be, will forthwith give notice
thereof to the other and Clause 11.2 shall apply.
11.2 Where this Clause applies, the Bank may:-
11.2.1 with the agreement of the Company, allow the Rights Issue to
proceed on the basis of the Issue Documents subject, if the Bank reasonably
believes the same to be required by law or the Listing Rules, to the publication
of supplementary listing particulars pursuant to section 147 of the FSA and any
additional requirements of the Listing Rules or the London Stock Exchange; or
11.2.2 at its absolute discretion give notice to the Company (not
later than Admission) to the effect that this Agreement shall terminate and
cease to have any effect.
11.3 If any notice is given by the Bank to the Company pursuant to sub-
clause 11.2.2, the Bank shall on behalf of the Company withdraw any application
to the London Stock Exchange for Admission.
11.4 In the event that this Agreement is terminated pursuant to the
provisions of this Clause, no party to this Agreement will have any claim
against any other party to this Agreement for costs, damages, compensation or
otherwise except that:-
11.4.1 such termination shall be without prejudice to any accrued
rights or obligations under this Agreement;
11.4.2 the Company shall pay the commissions, fees and expenses
specified in Clause 7 except as may be provided therein; and
11.4.3 the provisions of Clauses 1, 9 (so far only as is necessary
to give effect to Clause 10), 10, 12, 14, 15, 16 and 17 shall remain in
full force and effect.
12 UNDERTAKINGS OF THE BANK
------------------------
12.1 The Bank hereby agrees, represents, undertakes and warrants to the
Company that, subject to compliance by the Company with Clauses
- # -
<PAGE>
3.6 and 4.1 to 4.4, the Bank will not offer or sell any Stock Units, or
distribute or publish any application form or advertisement or other offering
material in connection with the Rights Issue, save upon the terms of this
Agreement and except under circumstances that it will, to the best of its
knowledge, information and belief, have complied with any applicable law and
regulations in each relevant country or jurisdiction, provided that the Company
acknowledges that the Bank may make the KB Share Purchase Offer to all
Shareholders other than Prohibited Shareholders and US Investors (except
qualifying US institutional shareholders) and accordingly the Bank shall be
deemed not to have breached this Clause 12.1 if there would have been no such
breach if the Bank had not made the KB Share Purchase Offer (whether such breach
arose directly or indirectly as a result of such offer or such offer was a
contributory factor to such breach).
12.2 The Bank understands that, except as contemplated in this Agreement or
the Issue Documents, no action has been or will be taken by the Company that
would permit a public offering of the Stock Units or the possession or
distribution of the Issue Documents or any other information relating to the
Stock Units or the Company in any country or jurisdiction where action for that
purpose is required. Accordingly, the Bank undertakes with the Company that,
subject to compliance by the Company with Clauses 3.6 and 4.1 to 4.4, the Stock
Units shall not be offered or sold by it, directly or indirectly, and neither
the Issue Documents nor any circular, prospectus, advertisement or other
offering material relating to the Rights Issue or (in connection with the Rights
Issue) in relation to the Stock Units shall be distributed in or from or
published in any such country or jurisdiction by it except to certain qualifying
US institutional shareholders and otherwise as contemplated by this Agreement
and except under circumstances that will, to the best of its knowledge,
information and belief, result in compliance with any applicable laws or
regulations.
12.3 The Bank undertakes and acknowledges to the Company (subject to the
same proviso as Clause 12.1) that:-
12.3.1 the Stock Units have not been and will not be registered
under the US Securities Act of 1933 (the "1933 Act") and may not be offered or
sold within the United States except pursuant to an exemption from, or in
transactions not subject to, the registration requirements of the 1933 Act. The
Bank has not offered or sold, and will not offer or sell, any of the Stock Units
to persons within the United States (including sub-underwriters) without the
Company's consent PROVIDED THAT the Company acknowledges and approves that the
Bank has contacted certain qualifying US institutional shareholders;
12.3.2 neither it, its affiliates, nor any person acting on its
behalf has engaged or will engage in any "directed selling efforts" with respect
to the Stock Units;
- # -
<PAGE>
12.3.3 any sub-underwriter procured by it will agree that the
restrictions set out in sub-clauses 12.3.1 and 12.3.2 above apply to it, except
that the proviso in sub-clause 12.3.1 above shall not apply to any sub-
underwriter; and
12.3.4 terms used in this Clause 12.3 have the meanings ascribed to
them by Regulation S under the 1933 Act.
12.4 The Bank hereby acknowledges to and agrees with the Company that it
has entered into this Agreement solely in reliance upon the representations,
warranties, undertakings, agreements and indemnities made or given by the
Company in this Agreement and on the basis of information disclosed to the Bank
in writing with respect to Dr Pepper.
12.5 The provisions of this Clause 12 shall continue in full force and
effect notwithstanding that the Bank is released and discharged from its
obligations hereunder in accordance with the provisions of this Agreement.
13 THE OFFER
---------
13.1 The Company undertakes that it will not for so long as the Bank has
any outstanding or potential obligation under Clause 4 or 5, without the prior
written consent of the Bank (not to be unreasonably withheld or delayed), in any
respect:-
13.1.1 alter, revise or amend or agree to any alteration, revision
or amendment of any of the terms or conditions of the Merger Agreement, or waive
any condition thereof, or grant any time for performance or other indulgence
thereunder or proceed to completion thereof without full satisfaction of the
conditions set out therein; or
13.1.2 alter or agree or otherwise commit to alter the
consideration being offered under the Offer, or change the percentage of the
issued common stock of Dr Pepper being sought under the Offer or make any other
material amendment to the Offer requiring an extension to the period for which
the Offer must remain open in accordance with the provisions of the United
States Securities Exchange Act of 1934 or the rules made thereunder; or
13.1.3 enter into any agreement to acquire or otherwise acquire Dr
Pepper or any of its subsidiaries or any of its undertaking or assets, which is
material in the context of the Rights Issue other than pursuant to the Merger
Agreement and the Offer.
13.2 The Company undertakes that in the event that it becomes entitled to
terminate the Offer pursuant to the conditions thereof, it will not exercise any
right it may have to waive such right of termination except with the prior
written consent of the Bank (not to be unreasonably withheld or delayed).
- # -
<PAGE>
14 TIME OF ESSENCE AND EXTENSION OF TIME
-------------------------------------
14.1 Any time, date or period referred to in any provision of this
Agreement may be extended by mutual agreement between the parties hereto but as
regards any time, date or period originally fixed or any time, date or period so
extended as aforesaid time shall be of the essence.
14.2 Without prejudice to the generality of Clause 14.1, if there is any
delay in the posting of the Issue Documents or any other delay in the timetable
envisaged by this Underwriting Agreement, the Bank may in its absolute
discretion agree that dates and time limits in Clauses 3, 4 and 5 shall be
adjusted accordingly, provided that:
14.2.1 nothing in this Clause 14.2 shall in any way be taken to
diminish the Bank's rights under the rest of this Agreement; and
14.2.2 any extension of the underwriting period shall be subject to
sub-clauses 7.1.2 and 7.7.2.
15 NOTICES
-------
15.1 Any notice or other communication requiring to be given or served
under or in connection with this Agreement shall be sufficiently given or served
if delivered or sent:-
In the case of the Company to:-
Fax: 0171 830 5200
Telex: 334413 CSPLC G
Attention: The Company Secretary
In the case of the Bank to:-
20 Fenchurch Street
London EC3P 3DB
Fax: 0171 623 5535
Telex 888531
Attention: Henry Somerset Esq
15.2 Any such notice or other communication shall be delivered by hand or
sent by telex, fax or pre-paid first class post. Any such notice or
communication shall be deemed to have been given or served at the time of actual
receipt.
15.3 Any notice given by the Bank under Clause 11.1 or 11.2 may also be
given by any director of the Bank to any director of the Company either
personally or by telephone (to be confirmed immediately in writing) and shall
have immediate effect.
16 RELEASE, WAIVER AND CONSENTS
----------------------------
16.1 Any liability to either party under this Agreement may in whole or in
part be released, compounded or compromised or time or
- # -
<PAGE>
indulgence given by the other party in its absolute discretion without in any
way prejudicing or affecting any other rights it may have under this Agreement.
16.2 No failure of either party to exercise, and no delay by it in
exercising, any right, power or remedy in connection with this Agreement (each a
"Right") will operate as a waiver thereof, nor will any single or partial
-----
exercise of any Right preclude any other or further exercise of such Right or
the exercise of any other Right. Any express waiver of any breach of this
Agreement shall not be deemed to be a waiver of any subsequent breach.
16.3 Except as otherwise expressly provided in this Agreement, any consent,
approval or agreement may be given or withheld at the relevant party's absolute
discretion, may be given subject to conditions and (for the avoidance of doubt)
shall be deemed only to have been validly given if given in accordance with
Clause 15.
17 GOVERNING LAW AND JURISDICTION
------------------------------
17.1 This Agreement shall be governed by and construed in accordance with
English law.
17.2 The parties irrevocably agree that the courts of England are to have
exclusive jurisdiction to settle any dispute which may arise out of or in
connection with this Agreement.
IN WITNESS WHEREOF this Agreement has been duly executed the day and year first
before written.
- # -
<PAGE>
SCHEDULE
--------
Documents in the agreed form
----------------------------
Document Reference
- -------- ---------
Board Resolutions A
Press Announcement B
- # -
<PAGE>
SIGNED by )
for and on behalf of )
KLEINWORT BENSON LIMITED )
in the presence of:- )
SIGNED by )
for and on behalf of )
CADBURY SCHWEPPES PUBLIC LIMITED COMPANY )
in the presence of:- )
- # -
<PAGE>
DATED 26 January 1995
-----------------------
(1) KLEINWORT BENSON LIMITED
- and -
(2) CADBURY SCHWEPPES PUBLIC LIMITED COMPANY
-------------------------------------
RIGHTS ISSUE
UNDERWRITING AGREEMENT
-------------------------------------
LINKLATERS & PAINES
Barrington House
59-67 Gresham Street
London EC2V 7JA
Tel: 071-606 7080
Ref: GCJL/RWG
- # -
<PAGE>
CONTENTS Page
-------- ----
1 Interpretation 1
2 Conditions 6
3 The Rights Issue 8
4 Prohibited Shareholders, Restricted Shareholders and Fractions 9
5 Underwriting Obligations and KB Share Purchase Offer 10
6 The Bank's Capacity 14
7 Fees, Commissions and Expenses 14
8 Announcements 17
9 Representations, Warranties and Undertakings 18
10 Indemnity 24
11 Termination 27
12 Undertakings of the Bank 27
13 The Offer 29
14 Time of Essence and Extension of Time 30
15 Notices 30
16 Release, Waiver and Consents 30
17 Governing Law and Jurisdiction 31
Schedule - Documents in the agreed form 32
- # -
Exhibit (c)(1)
- --------------------------------------------------------------------------------
================================================================================
AGREEMENT AND PLAN OF MERGER
Among
CADBURY SCHWEPPES PLC,
DP/SU ACQUISITION INC.
and
DR PEPPER/SEVEN-UP COMPANIES, INC.
Dated as of January 25, 1995
- --------------------------------------------------------------------------------
================================================================================
<PAGE>
TABLE OF CONTENTS
ARTICLE I
THE OFFER
SECTION 1.01. The Offer . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.02. Company Action . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
THE MERGER
SECTION 2.01. The Merger . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.02. Effective Time; Closing . . . . . . . . . . . . . . . . 5
SECTION 2.03. Effect of the Merger . . . . . . . . . . . . . . . . . 6
SECTION 2.04. Certificate of Incorporation; By-laws . . . . . . . . . 6
SECTION 2.05. Directors and Officers . . . . . . . . . . . . . . . . 6
SECTION 2.06. Conversion of Securities . . . . . . . . . . . . . . . 7
SECTION 2.07. Employee Stock Options . . . . . . . . . . . . . . . . 7
SECTION 2.08. Dissenting Shares . . . . . . . . . . . . . . . . . . . 8
SECTION 2.09. Surrender of Shares; Stock Transfer Books . . . . . . . 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01. Organization and Qualification; Subsidiaries . . . . . 10
SECTION 3.02. Certificate of Incorporation and By-laws . . . . . . . 11
SECTION 3.03. Capitalization . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.04. Authority Relative to this Agreement . . . . . . . . . 12
SECTION 3.05. No Conflict; Required Filings and Consents . . . . . . 12
SECTION 3.06. Compliance . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.07. SEC Filings; Financial Statements . . . . . . . . . . . 13
SECTION 3.08. Absence of Certain Changes or Events . . . . . . . . . 14
SECTION 3.09. Absence of Litigation . . . . . . . . . . . . . . . . . 15
SECTION 3.10. Employee Benefit Plans . . . . . . . . . . . . . . . . 15
SECTION 3.11. Labor Matters . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.12. Offer Documents; Schedule 14D-9 . . . . . . . . . . . . 18
SECTION 3.13. Real Property and Leases . . . . . . . . . . . . . . . 18
SECTION 3.14. Trademarks, Patents and Copyrights . . . . . . . . . . 18
SECTION 3.15. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 19
i
<PAGE>
SECTION 3.16. Environmental Matters . . . . . . . . . . . . . . . . . 21
SECTION 3.17. Formula Cards . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.18. Amendment to Rights Agreement . . . . . . . . . . . . . 22
SECTION 3.19. Brokers . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
SECTION 4.01. Corporate Organization . . . . . . . . . . . . . . . . 23
SECTION 4.02. Authority Relative to this Agreement . . . . . . . . . 24
SECTION 4.03. No Conflict; Required Filings and Consents . . . . . . 24
SECTION 4.04. Offer Documents; Proxy Statement . . . . . . . . . . . 25
SECTION 4.05. Brokers . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 4.06. Financing. . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01. Conduct of Business by the Company Pending the
Purchaser's Election Date . . . . . . . . . . . . . . . 26
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Stockholders Meetings . . . . . . . . . . . . . . . . . 28
SECTION 6.02. Proxy Statement . . . . . . . . . . . . . . . . . . . . 29
SECTION 6.03. Company Board Representation; Section 14(f) . . . . . . 29
SECTION 6.04. Access to Information; Confidentiality . . . . . . . . 30
SECTION 6.05. No Solicitation of Transactions . . . . . . . . . . . . 31
SECTION 6.06. Employee Stock Options and Other Employee Benefits
Matters . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 6.07. Directors' and Officers' Indemnification and Insurance 32
SECTION 6.08. Notification of Certain Matters . . . . . . . . . . . . 35
SECTION 6.09. Further Action; Reasonable Best Efforts . . . . . . . . 35
SECTION 6.10. Public Announcements . . . . . . . . . . . . . . . . . 35
SECTION 6.11. Parent Guarantee . . . . . . . . . . . . . . . . . . . 35
SECTION 6.12. Interested Stockholder . . . . . . . . . . . . . . . . 36
ii
<PAGE>
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. Conditions to the Merger . . . . . . . . . . . . . . . 36
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 8.02. Effect of Termination . . . . . . . . . . . . . . . . . 38
SECTION 8.03. Fees and Expenses . . . . . . . . . . . . . . . . . . . 38
SECTION 8.04. Amendment . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 8.05. Waiver . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations, Warranties and
Agreements . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 9.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 9.03. Certain Definitions . . . . . . . . . . . . . . . . . . 42
SECTION 9.04. Severability . . . . . . . . . . . . . . . . . . . . . 43
SECTION 9.05. Entire Agreement; Assignment . . . . . . . . . . . . . 43
SECTION 9.06. Parties in Interest . . . . . . . . . . . . . . . . . . 43
SECTION 9.07. Specific Performance . . . . . . . . . . . . . . . . . 43
SECTION 9.08. Governing Law . . . . . . . . . . . . . . . . . . . . . 44
SECTION 9.09. Headings . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 9.10. Counterparts . . . . . . . . . . . . . . . . . . . . . 44
ANNEX A Conditions to the Offer
ANNEX B Employee Benefits
iii
<PAGE>
Glossary of Defined Terms
Location of
Defined Term Definition
- ------------ ----------
Acquiring Person . . . . . . . . . . . Sec. 3.18(b)
affiliate . . . . . . . . . . . . . . . Sec. 9.03(a)
Agreement . . . . . . . . . . . . . . . Preamble
beneficial owner . . . . . . . . . . . Sec. 9.03(b)
Blue Sky Laws . . . . . . . . . . . . . Sec. 3.05(b)
Board . . . . . . . . . . . . . . . . . Recitals
BT . . . . . . . . . . . . . . . . . . Sec. 1.02(a)
business day . . . . . . . . . . . . . Sec. 9.03(c)
Certificate of Merger . . . . . . . . . Sec. 2.02
Certificates . . . . . . . . . . . . . Sec. 2.09(b)
Claim . . . . . . . . . . . . . . . . . Sec. 6.07(b)
Code . . . . . . . . . . . . . . . . . Sec. 3.10(a)
Company . . . . . . . . . . . . . . . . Preamble
Company Common Stock . . . . . . . . . Recitals
Company Preferred Stock . . . . . . . . Sec. 3.03
Confidentiality Agreement . . . . . . . Sec. 6.04(c)
control . . . . . . . . . . . . . . . . Sec. 9.03(d)
Delaware Law . . . . . . . . . . . . . Recitals
Director Stockholders . . . . . . . . . Recitals
Disclosure Schedule . . . . . . . . . . Sec. 3.01
Dissenting Shares . . . . . . . . . . . Sec. 2.08(a)
Distribution Date . . . . . . . . . . . Sec. 3.18(b)
DLJ . . . . . . . . . . . . . . . . . . Sec. 1.02(a)
Effective Time . . . . . . . . . . . . Sec. 2.02
Environmental Laws . . . . . . . . . . Sec. 3.16(a)
ERISA . . . . . . . . . . . . . . . . . Sec. 3.10(a)
Exchange Act . . . . . . . . . . . . . Sec. 1.02(b)
Expenses . . . . . . . . . . . . . . . Sec. 8.03(b)
Fee . . . . . . . . . . . . . . . . . . Sec. 8.03(a)
Final Expiration Date . . . . . . . . . Sec. 3.18(a)
GAAP . . . . . . . . . . . . . . . . . Sec. 3.07(b)
Hazardous Substances . . . . . . . . . Sec. 3.16(a)
HSR Act . . . . . . . . . . . . . . . . Sec. 3.05(b)
Indemnified Parties . . . . . . . . . . Sec. 6.07(b)
IRS . . . . . . . . . . . . . . . . . . Sec. 3.10(a)
January 25 Meeting . . . . . . . . . . Sec. 1.02(a)
Liens . . . . . . . . . . . . . . . . . Sec. 3.14
iv
<PAGE>
Loading . . . . . . . . . . . . . . . . Sec. 3.08
Material Adverse Effect . . . . . . . . Sec. 3.01
Material Subsidiaries . . . . . . . . . Sec. 3.01
Merger . . . . . . . . . . . . . . . . Recitals
Merger Consideration . . . . . . . . . Sec. 2.06(a)
Minimum Condition . . . . . . . . . . . Sec. 1.01(a)
Multiemployer Plan . . . . . . . . . . Sec. 3.10(b)
Multiple Employer Plan . . . . . . . . Sec. 3.10(b)
1993 Balance Sheet . . . . . . . . . . Sec. 3.07(c)
Non-Voting Common . . . . . . . . . . . Sec. 3.03
Offer . . . . . . . . . . . . . . . . . Recitals
Offer Documents . . . . . . . . . . . . Sec. 1.01(b)
Offer to Purchase . . . . . . . . . . . Sec. 1.01(b)
Option . . . . . . . . . . . . . . . . Sec. 2.07
Parent . . . . . . . . . . . . . . . . Preamble
Parent Stockholders Meeting . . . . . . Sec. 6.01(b)
Paying Agent . . . . . . . . . . . . . Sec. 2.098(a)
Per Share Amount . . . . . . . . . . . Recitals
Permitted Liens . . . . . . . . . . . . Sec. 3.14
Permitted Offer . . . . . . . . . . . . Sec. 1.02(b), 3.18(c)
person . . . . . . . . . . . . . . . . Sec. 9.03(e)
Plans . . . . . . . . . . . . . . . . . Sec. 3.10(a)
Proxy Statement . . . . . . . . . . . Sec. 4.04
Purchaser . . . . . . . . . . . . . . . Preamble
Purchaser's Election Date . . . . . . . Sec. 5.01
Rights Agreement . . . . . . . . . . . Recitals
Schedule 14D-1 . . . . . . . . . . . . Sec. 1.01(b)
Schedule 14D-9 . . . . . . . . . . . . Sec. 1.02(b)
SEC . . . . . . . . . . . . . . . . . Sec. 1.01(b)
SEC Reports . . . . . . . . . . . . . Sec. 3.07(a)
Securities Act . . . . . . . . . . . . Sec. 3.07(a)
Shares . . . . . . . . . . . . . . . . Recitals
Stock Acquisition Date . . . . . . . . Sec. 3.18(a)
Stock Option Plans . . . . . . . . . . Sec. 2.07
Stockholders Agreement . . . . . . . . Recitals
Stockholders Meeting . . . . . . . . . Sec. 6.01(a)
Subsidiary . . . . . . . . . . . . . . Sec. 3.01
subsidiary . . . . . . . . . . . . . . Sec. 9.03(f)
Surviving Corporation . . . . . . . . Sec. 2.01
Tax . . . . . . . . . . . . . . . . . . Sec. 3.15(d)
Tender Offer Acceptance Date . . . . . Sec. 2.07
Third Party . . . . . . . . . . . . . . Sec. 8.03(e)
Third Party Acquisition . . . . . . . . Sec. 8.03(e)
Transactions . . . . . . . . . . . . . Sec. 1.02(a)
v
<PAGE>
AGREEMENT AND PLAN OF MERGER, dated as of January 25, 1995 (this
"Agreement"), among Cadbury Schweppes plc, a company organized under the laws of
---------
England ("Parent"), DP/SU Acquisition Inc., a Delaware corporation and an
------
indirect, wholly owned subsidiary of Parent ("Purchaser"), and Dr Pepper/Seven-
---------
Up Companies, Inc., a Delaware corporation (the "Company").
-------
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Boards of Directors of Parent, Purchaser and the Company
have each determined that it is in the best interests of their respective
stockholders for Parent, through Purchaser, to acquire the Company upon the
terms and subject to the conditions set forth herein; and
WHEREAS, in furtherance of such acquisition, it is proposed that
Purchaser shall make a cash tender offer (the "Offer") to acquire all the issued
-----
and outstanding shares of Common Stock, par value $.01 per share, of the Company
("Company Common Stock"; shares of Company Common Stock being hereinafter
--------------------
collectively referred to as the "Shares") for $33.00 per Share (such amount, or
------
any greater amount per Share paid pursuant to the Offer, being hereinafter
referred to as the "Per Share Amount") net to the seller in cash, without
----------------
interest thereon, upon the terms and subject to the conditions of this Agreement
and the Offer; and
WHEREAS, the Board of Directors of Parent and Purchaser have
unanimously approved the making of the Offer and the transactions related
thereto and the Board of Directors of Parent has resolved and agreed to
recommend approval of the Offer and the transactions related thereto to its
stockholders; and
WHEREAS, the Board of Directors of the Company (the "Board") has
-----
unanimously approved the making of the Offer and resolved and agreed, subject to
the terms and conditions contained herein, to recommend that holders of Shares
tender their Shares pursuant to the Offer; and
WHEREAS, pursuant to and in accordance with the terms of the Rights
Agreement, dated as of September 1, 1993, between the Company and Bank One,
Texas, N.A. (as amended, the "Rights Agreement"), the Board has, subject to the
----------------
terms and conditions contained herein, approved the Offer as a "Permitted Offer"
(as such term is defined in the Rights Agreement); and
WHEREAS, also in furtherance of such acquisition, the Boards of
Directors of Parent, Purchaser and the Company have each approved the merger
(the "Merger") of Purchaser with and into the Company in accordance with the
------
General Corporation Law of the
<PAGE>
2
State of Delaware ("Delaware Law") following the consummation of the Offer and
------------
upon the terms and subject to the conditions set forth herein; and
WHEREAS, Parent and certain directors of the Company (the "Director
--------
Stockholders") have entered into a Stockholders Agreement, dated as of the date
- ------------
hereof (the "Stockholders Agreement"), providing for the agreement of the
----------------------
Director Stockholders to tender pursuant to the Offer all Shares owned by such
Director Stockholder subject to the terms and conditions of the Stockholders
Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Parent, Purchaser and the Company hereby agree as follows:
ARTICLE I
THE OFFER
---------
SECTION 1.01. The Offer. (a) Provided that this Agreement shall not
---------
have been terminated in accordance with Section 8.01 and none of the events set
forth in Annex A hereto shall have occurred or be existing (unless such event
shall have been waived by Purchaser), Parent shall cause Purchaser to commence,
and Purchaser shall commence, the Offer at the Per Share Amount as promptly as
reasonably practicable after the date hereof, but in no event later than five
business days after the public announcement of Purchaser's intention to commence
the Offer. The obligation of Purchaser to accept for payment and pay for Shares
tendered pursuant to the Offer shall be subject only to (i) the condition (the
"Minimum Condition") that at least the number of Shares that, when combined with
-----------------
the Shares already owned by Parent and its direct or indirect subsidiaries,
constitute a majority of the then outstanding Shares on a fully diluted basis,
including, without limitation, all Shares issuable upon the conversion of any
convertible securities or upon the exercise of any options, warrants or rights
(other than the Rights (as defined in the Rights Agreement)) shall have been
validly tendered and not withdrawn prior to the expiration of the Offer and
(ii) the satisfaction or waiver of the other conditions set forth in Annex A
hereto. Purchaser expressly reserves the right to waive any such condition
(other than the Minimum Condition), to increase the price per Share payable in
the Offer, and to make any other changes in the terms and conditions of the
Offer; provided, however, that (notwithstanding Section 8.04) no change may be
-------- -------
made which (A) decreases the price per Share payable in the Offer, (B) reduces
the maximum number of Shares to be purchased in the Offer, (C) imposes
conditions to the Offer in addition to those set forth in Annex A hereto,
(D) amends or changes the terms and conditions of the Offer in any manner
materially adverse to the holders of Shares (other than Parent and its
subsidiaries) or (E) changes or waives the Minimum Condition. The Per Share
Amount shall, subject to applicable withholding of
<PAGE>
3
taxes, be net to the seller in cash, without interest thereon, upon the terms
and subject to the conditions of the Offer. Subject to the terms and conditions
of the Offer (including, without limitation, the Minimum Condition), Purchaser
shall accept for payment and pay, as promptly as practicable after expiration of
the Offer, for all Shares validly tendered and not withdrawn.
(b) As soon as reasonably practicable on the date of commencement of
the Offer, Purchaser shall file with the Securities and Exchange Commission (the
"SEC") and disseminate to holders of Shares to the extent required by law a
---
Tender Offer Statement on Schedule 14D-1 (together with all amendments and
supplements thereto, the "Schedule 14D-1") with respect to the Offer and the
--------------
other Transactions (as hereinafter defined). The Schedule 14D-1 shall contain
or shall incorporate by reference an offer to purchase (the "Offer to Purchase")
-----------------
and forms of the related letter of transmittal and any related summary
advertisement (the Schedule 14D-1, the Offer to Purchase and such other
documents, together with all supplements and amendments thereto, being referred
to herein collectively as the "Offer Documents"). Parent, Purchaser and the
---------------
Company agree to correct promptly any information provided by any of them for
use in the Offer Documents which shall have become false or misleading, and
Parent and Purchaser further agree to take all steps necessary to cause the
Schedule 14D-1 as so corrected to be filed with the SEC and the other Offer
Documents as so corrected to be disseminated to holders of Shares, in each case
as and to the extent required by applicable federal securities laws. The
Company and its counsel shall be given an opportunity to review and comment on
the Offer Documents and any amendments thereto prior to the filing thereof with
the SEC. Parent and Purchaser will provide the Company and its counsel with a
copy of any written comments or telephonic notification of any verbal comments
Parent or Purchaser may receive from the SEC or its staff with respect to the
Offer Documents promptly after the receipt thereof and will provide the Company
and its counsel with a copy of any written responses and telephonic notification
of any verbal response of Parent, Purchaser or their counsel. In the event that
the Offer is terminated or withdrawn by Purchaser, Parent and Purchaser shall
cause all tendered Shares to be returned to the registered holders of the Shares
represented by the certificate or certificates surrendered to the Paying Agent
(as defined herein).
SECTION 1.02. Company Action. (a) The Company hereby approves of
--------------
and consents to the Offer and represents that (i) the Board, at a meeting duly
called and held on January 25, 1995 (the "January 25 Meeting"), has unanimously
------------------
(A) determined that this Agreement and the transactions contemplated hereby,
including, without limitation, each of the Offer and the Merger (the
"Transactions"), are fair to and in the best interests of the holders of Shares
------------
(other than Parent and its subsidiaries), (B) approved and adopted this
Agreement and the Transactions and (C) resolved to recommend, subject to the
conditions set forth herein, that the stockholders of the Company accept the
Offer and approve and adopt this Agreement and the Transactions; (ii) each of BT
Securities Corporation ("BT") and Donaldson, Lufkin & Jenrette Securities
--
Corporation ("DLJ") has delivered to the Board a
---
<PAGE>
4
written opinion that the consideration to be received by the holders of Shares
pursuant to each of the Offer and the Merger is fair to such holders from a
financial point of view; and (iii) the Board, at the January 25 Meeting and with
each director who is an officer or employee of the Company recusing himself,
determined pursuant to and in accordance with the Rights Agreement and upon
receipt of the opinions referred to in clause (ii) of this sentence that the
terms of the Offer (including the Per Share Amount) are fair to, and in the best
interests of, the Company and the holders of Shares (other than Parent and its
subsidiaries) and approved, subject to the terms and conditions contained
herein, the Offer as a "Permitted Offer" (as defined in the Rights Agreement)
---------------
subject to Section 3.18 hereof. The Company has been authorized by each of BT
and DLJ, subject to prior review by each such financial advisor, to include such
fairness opinion (or references thereto) in the Offer Documents and in the
Schedule 14D-9 (as defined in paragraph (b) of this Section 1.02) and the Proxy
Statement referred to in Section 3.12. Subject to the fiduciary duties of the
Board under applicable law as advised in writing by independent counsel (which
shall, for all purposes under this Agreement, include the Company's regular
outside counsel), the Company hereby consents to the inclusion in the Offer
Documents of the recommendation of the Board described above. The Company has
been advised by each of its directors that they intend either to tender all
Shares beneficially owned by them to Purchaser pursuant to the Offer or to vote
such Shares in favor of the approval and adoption by the stockholders of the
Company of this Agreement and the Transactions; provided, however, that, except
-------- -------
as contemplated by the Stockholders Agreement, such directors shall have no
obligation under this Agreement to so tender or vote their Shares if this
Agreement is terminated.
(b) As soon as reasonably practicable on the date of commencement of
the Offer, the Company shall file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 (together with all amendments and supplements
thereto, the "Schedule 14D-9") containing, subject only to the fiduciary duties
--------------
of the Board under applicable law as advised in writing by independent counsel,
the recommendation of the Board described in Section 1.02(a) and shall
disseminate the Schedule 14D-9 to the extent required by Rule 14d-9 promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
------------
any other applicable federal securities laws. The Company, Parent and Purchaser
agree to correct promptly any information provided by any of them for use in the
Schedule 14D-9 which shall have become false or misleading, and the Company
further agrees to take all steps necessary to cause the Schedule 14D-9 as so
corrected to be filed with the SEC and disseminated to holders of Shares, in
each case as and to the extent required by applicable federal securities laws.
Parent, Purchaser and their counsel shall be given an opportunity to review and
comment on the Schedule 14D-9 and any amendments thereto prior to the filing
thereof with the SEC. The Company will provide Parent and Purchaser and their
counsel with a copy of any written comments or telephonic notification of any
verbal comments the Company may receive from the SEC or its staff with respect
to the Offer Documents promptly after the receipt thereof and will provide
Parent and
<PAGE>
5
Purchaser and their counsel with a copy of any written responses and telephonic
notification of any verbal response of the Company or its counsel.
(c) The Company shall promptly furnish Purchaser with mailing labels
containing the names and addresses of all record holders of Shares and with
security position listings of Shares held in stock depositories, each as of the
most recent date reasonably practicable, together with all other available
listings and computer files containing names, addresses and security position
listings of record holders and non-objecting beneficial owners of Shares as of
the most recent date reasonably practicable. The Company shall furnish
Purchaser with such additional information, including, without limitation,
updated listings and computer files of stockholders, mailing labels and security
position listings, and such other assistance as Parent, Purchaser or their
agents may reasonably request. Subject to the requirements of applicable law,
and except for such steps as are necessary to disseminate the Offer Documents
and any other documents necessary to consummate the Offer or the Merger, Parent
and Purchaser shall hold in confidence the information contained in such labels,
listings and files, shall use such information only in connection with the Offer
and the Merger, and, if this Agreement shall be terminated in accordance with
Section 8.01, shall deliver promptly to the Company all copies of such
information then in their possession and shall certify in writing to the Company
its compliance with this Section 1.02(c).
ARTICLE II
THE MERGER
----------
SECTION 2.01. The Merger. Upon the terms and subject to the
----------
conditions set forth in Article VII, and in accordance with Delaware Law, at the
Effective Time (as hereinafter defined), Purchaser shall be merged with and into
the Company. As a result of the Merger, the separate corporate existence of
Purchaser shall cease and the Company shall continue as the surviving
corporation of the Merger (the "Surviving Corporation"). Notwithstanding
---------------------
anything to the contrary contained in this Section 2.01, Parent may elect
instead, at any time prior to the fifth business day immediately preceding the
date on which the Proxy Statement (as defined in Section 4.04) is mailed
initially to the Company's stockholders, to merge the Company into Purchaser or
another direct or indirect wholly owned subsidiary of Parent. In such event,
the parties agree to execute an appropriate amendment to this Agreement in order
to reflect the foregoing and to provide, as the case may be, that Purchaser or
such other wholly owned subsidiary of Parent shall be the Surviving Corporation.
SECTION 2.02. Effective Time; Closing. As promptly as practicable
-----------------------
after the satisfaction or, if permissible, waiver of the conditions set forth in
Article VII, the parties hereto shall cause the Merger to be consummated by
filing this Agreement or a certificate of
<PAGE>
6
merger (in either case, the "Certificate of Merger") with the Secretary of State
---------------------
of the State of Delaware, in such form as is required by, and executed in
accordance with the relevant provisions of, Delaware Law (the date and time of
such filing being the "Effective Time"). Prior to such filing, a closing shall
--------------
be held at the offices of Shearman & Sterling, 599 Lexington Avenue, New York,
New York 10022, or such other place as the parties shall agree, for the purpose
of confirming the satisfaction or waiver, as the case may be, of the conditions
set forth in Article VII.
SECTION 2.03. Effect of the Merger. At the Effective Time, the
--------------------
effect of the Merger shall be as provided in the applicable provisions of
Delaware Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the property, rights, privileges, powers and
franchises of the Company and Purchaser shall vest in the Surviving Corporation,
and all debts, liabilities, obligations, restrictions, disabilities and duties
of the Company and Purchaser shall become the debts, liabilities, obligations,
restrictions, disabilities and duties of the Surviving Corporation.
SECTION 2.04. Certificate of Incorporation; By-laws. (a) Unless
-------------------------------------
otherwise determined by Parent prior to the Effective Time, and subject to the
requirements of Section 6.07, at the Effective Time, the Certificate of
Incorporation of the Company, as in effect immediately prior to the Effective
Time, shall be the Certificate of Incorporation of the Surviving Corporation and
shall be amended and restated to conform to the Certificate of Incorporation of
Purchaser as in effect immediately prior to the Effective Time; provided,
--------
however, that, at the Effective Time, Article I of the Certificate of
- -------
Incorporation of the Surviving Corporation shall be amended to read as follows:
"The name of the corporation is Dr Pepper/Seven-Up Companies, Inc." and the
Certificate of Incorporation of the Surviving Corporation shall be amended if
required to comply with Section 6.07.
(b) Unless otherwise determined by Parent prior to the Effective
Time, and subject to the requirements of Section 6.07, the By-laws of Purchaser,
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.
SECTION 2.05. Directors and Officers. The directors of Purchaser
----------------------
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-laws of the Surviving Corporation, and the officers of the
Company immediately prior to the Effective Time shall be the initial officers of
the Surviving Corporation, in each case until their respective successors are
duly elected or appointed and qualified.
<PAGE>
7
SECTION 2.06. Conversion of Securities. At the Effective Time, by
------------------------
virtue of the Merger and without any action on the part of Purchaser, the
Company or the holders of any of the Shares:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than any Shares to be cancelled pursuant to
Section 2.06(b) and any Dissenting Shares (as hereinafter defined)) shall
be cancelled and shall be converted automatically into the right to receive
an amount equal to the Per Share Amount in cash (the "Merger
------
Consideration") payable, without interest, to the holder of such Share,
-------------
upon surrender, in the manner provided in Section 2.09, of the certificate
that formerly evidenced such Share;
(b) Each Share held in the treasury of the Company and each Share
owned by Purchaser, Parent or any direct or indirect wholly owned
subsidiary of Parent or of the Company immediately prior to the Effective
Time shall be cancelled without any conversion thereof and no payment or
distribution shall be made with respect thereto; and
(c) Each share of Common Stock, par value $.01 per share, of
Purchaser issued and outstanding immediately prior to the Effective Time
shall be converted into and exchanged for one validly issued, fully paid
and nonassessable share of Common Stock, par value $.01 per share, of the
Surviving Corporation.
SECTION 2.07. Employee Stock Options. Immediately after the Tender
----------------------
Offer Acceptance Date, each outstanding option to purchase Shares (in each case,
an "Option") granted under (i) the Company's 1988 Stock Option Plan, as amended,
------
(ii) the Company's 1988 Non-Qualified Plan, as amended, (iii) the Company's 1993
Stock Ownership Plan, as amended, and (iv) the Company's Non-Qualified Stock
Option Plan for Non-Employee Directors (collectively, the "Stock Option Plans"),
------------------
whether or not then exercisable, shall be cancelled by the Company, and each
holder of a cancelled Option shall be entitled to receive from Purchaser at the
same time as payment for Shares is made by Purchaser in connection with the
Offer, in consideration for the cancellation of such Option, an amount in cash
equal to the product of (i) the number of Shares previously subject to such
Option and (ii) the excess, if any, of the Per Share Amount over the exercise
price per Share previously subject to such Option. The term "Tender Offer
------------
Acceptance Date" means the date on which the Purchaser shall have accepted for
- ---------------
payment all Shares validly tendered and not withdrawn pursuant to the expiration
date with respect to the offer. Parent and Purchaser understand that all shares
of restricted stock granted under the 1993 Stock Ownership Plan have vested
pursuant to the terms of such plan and related agreements or pursuant to the
lapsing of restrictions on such shares effected by action of the Board or the
Compensation Committee of the Board.
<PAGE>
8
SECTION 2.08. Dissenting Shares. (a) Notwithstanding any provision
-----------------
of this Agreement to the contrary, Shares that are outstanding immediately prior
to the Effective Time and which are held by stockholders who shall have not
voted in favor of the Merger or consented thereto in writing and who shall have
demanded properly in writing appraisal for such Shares in accordance with
Section 262 of Delaware Law (collectively, the "Dissenting Shares") shall not be
-----------------
converted into or represent the right to receive the Merger Consideration. Such
stockholders shall be entitled to receive payment of the appraised value of such
Shares held by them in accordance with the provisions of such Section 262,
except that all Dissenting Shares held by stockholders who shall have failed to
perfect or who effectively shall have withdrawn or lost their rights to
appraisal of such Shares under such Section 262 shall thereupon be deemed to
have been converted into and to have become exchangeable for, as of the
Effective Time, the right to receive the Merger Consideration, without any
interest thereon, upon surrender, in the manner provided in Section 2.09, of the
certificate or certificates that formerly evidenced such Shares.
(b) The Company shall give Parent (i) prompt notice of any demands
for appraisal received by the Company, withdrawals of such demands, and any
other instruments served pursuant to Delaware Law in respect of Dissenting
Shares and received by the Company and (ii) the opportunity to direct all
negotiations and proceedings with respect to demands for appraisal under
Delaware Law. The Company shall not, except with the prior written consent of
Parent, make any payment with respect to any demands for appraisal or offer to
settle or settle any such demands.
SECTION 2.09. Surrender of Shares; Stock Transfer Books. (a) Prior
-----------------------------------------
to the Effective Time, Purchaser shall designate a bank or trust company
reasonably satisfactory to the Company to act as agent (the "Paying Agent") for
------------
the holders of Shares in connection with the Merger to receive the funds to
which holders of Shares shall become entitled pursuant to Section 2.06(a).
Immediately prior to the Effective Time, Parent shall cause Surviving
Corporation to have sufficient funds to deposit, and shall cause Surviving
Corporation to deposit in trust with the Paying Agent, cash in the aggregate
amount equal to the product of (i) the number of shares outstanding immediately
prior to the Effective Time (other than Shares owned by Parent or Purchaser and
Shares as to which dissenters' rights have been exercised as of the Effective
Time) and (ii) the Per Share Amount. Such funds shall be invested by the Paying
Agent as directed by the Surviving Corporation, provided that such investments
shall be in obligations of or guaranteed by the United States of America or of
any agency thereof and backed by the full faith and credit of the United States
of America, in commercial paper obligations rated A-1 or P-1 or better by
Moody's Investors Services, Inc. or Standard & Poor's Corporation, respectively,
or in deposit accounts, certificates of deposit or banker's acceptances of,
repurchase or reverse repurchase agreements with, or Eurodollar time deposits
purchased from, commercial banks with capital, surplus and undivided profits
aggregating in excess of $100 million (based on the most recent financial
statements of such bank which are then publicly available at the SEC or
<PAGE>
9
otherwise); provided, however, that no loss on any investment made pursuant to
-------- -------
this Section 2.09 shall relieve Parent or the Suriving Corporation of its
obligation to pay the Per Share Amount for each Share outstanding immediately
prior to the Effective Time.
(b) Promptly after the Effective Time, Parent shall cause the
Surviving Corporation to mail to each person who was, at the Effective Time, a
holder of record of Shares entitled to receive the Merger Consideration pursuant
to Section 2.06(a) a form of letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the certificates
evidencing such Shares (the "Certificates") shall pass, only upon proper
------------
delivery of the Certificates to the Paying Agent) and instructions for use in
effecting the surrender of the Certificates pursuant to such letter of
transmittal. Upon surrender to the Paying Agent of a Certificate, together with
such letter of transmittal, duly completed and validly executed in accordance
with the instructions thereto, and such other documents as may be required
pursuant to such instructions, the holder of such Certificate shall be entitled
to receive in exchange therefor the Merger Consideration for each Share formerly
evidenced by such Certificate, and such Certificate shall then be cancelled. No
interest shall accrue or be paid on the Merger Consideration payable upon the
surrender of any Certificate for the benefit of the holder of such Certificate.
If payment of the Merger Consideration is to be made to a person other than the
person in whose name the surrendered Certificate is registered on the stock
transfer books of the Company, it shall be a condition of payment that the
Certificate so surrendered shall be endorsed properly or otherwise be in proper
form for transfer and that the person requesting such payment shall have paid
all transfer and other taxes required by reason of the payment of the Merger
Consideration to a person other than the registered holder of the Certificate
surrendered or shall have established to the satisfaction of the Surviving
Corporation that such taxes either have been paid or are not applicable. The
Surviving Corporation shall pay all charges and expenses, including those of the
Paying Agent, in connection with the distribution of the Merger Consideration.
(c) At any time following the third month after the Effective Time,
the Surviving Corporation shall be entitled to require the Paying Agent to
deliver to it any funds which had been made available to the Paying Agent and
not disbursed to holders of Shares (including, without limitation, all interest
and other income received by the Paying Agent in respect of all funds made
available to it) and, thereafter, such holders shall be entitled to look to the
Surviving Corporation (subject to abandoned property, escheat and other similar
laws) only as general creditors thereof with respect to any Merger Consideration
that may be payable upon due surrender of the Certificates held by them.
Notwithstanding the foregoing, neither the Surviving Corporation nor the Paying
Agent shall be liable to any holder of a Share for any Merger Consideration
delivered in respect of such Share to a public official pursuant to any
abandoned property, escheat or other similar law.
(d) At the close of business on the day of the Effective Time, the
stock transfer books of the Company shall be closed and, thereafter, there shall
be no further
<PAGE>
10
registration of transfers of Shares on the records of the Company. From and
after the Effective Time, the holders of Shares outstanding immediately prior to
the Effective Time shall cease to have any rights with respect to such Shares
except as otherwise provided herein or by applicable law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company hereby represents and warrants to Parent and Purchaser
that:
SECTION 3.01. Organization and Qualification; Subsidiaries. Each of
--------------------------------------------
the Company and each subsidiary of the Company (a "Subsidiary") is a corporation
----------
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite power and authority and
all necessary governmental approvals to own, lease and operate its properties
and to carry on its business as it is now being conducted, except where the
failure to be so organized, existing or in good standing or to have such power,
authority and governmental approvals would not, individually or in the
aggregate, have a Material Adverse Effect (as defined below). The Company and
each Subsidiary is duly qualified or licensed as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
the properties owned, leased or operated by it or the nature of its business
makes such qualification or licensing necessary, except for such failures to be
so qualified or licensed and in good standing that would not, individually or in
the aggregate, have a Material Adverse Effect. When used in connection with the
Company or any Subsidiary, the term "Material Adverse Effect" means any change
-----------------------
or effect that, when taken together with all other adverse changes and effects,
is or is reasonably likely to be materially adverse to the business, operations,
properties, condition (financial or otherwise), assets or liabilities
(including, without limitation, contingent liabilities) of the Company and the
Subsidiaries taken as a whole. A true and complete list of all the
Subsidiaries, together with the jurisdiction of incorporation of each Subsidiary
and the percentage of the outstanding capital stock of each Subsidiary owned by
the Company and each other Subsidiary, is set forth in Section 3.01 of the
Disclosure Schedule delivered concurrently with the execution and delivery of
this Agreement by the Company to Parent (the "Disclosure Schedule"). Except as
-------------------
disclosed in such Section 3.01, the Company does not directly or indirectly own
any equity or similar interest in, or any interest convertible into or
exchangeable or exercisable for, any equity or similar interest in, any
corporation, partnership, joint venture or other business association or entity,
other than indirect equity and similar interests held for investment which are
not, in the aggregate, material to the Company. The term "Material
--------
Subsidiaries" means Dr Pepper/Seven-Up Corporation, a Delaware corporation, and
- ------------
Waco Manufacturing Company, a Delaware corporation. Except
<PAGE>
11
for the Material Subsidiaries, no Subsidiary is material to the business,
operations or condition (financial or otherwise) of the Company or has any
material assets or liabilities.
SECTION 3.02. Certificate of Incorporation and By-laws. The Company
----------------------------------------
has heretofore furnished to Parent a complete and correct copy of the
Certificate of Incorporation and the By-laws or equivalent organizational
documents, each as amended to date, of the Company and each Material Subsidiary.
Such Certificates of Incorporation, By-laws and equivalent organizational
documents are in full force and effect. Neither the Company nor any Subsidiary
is in violation of any provision of its Certificate of Incorporation, By-laws or
equivalent organizational documents.
SECTION 3.03. Capitalization. The authorized capital stock of the
--------------
Company consists of 125,000,000 Shares and 20,000,000 shares of Non-Voting
Common Stock, par value $.01 per share ("Non-Voting Common") and 2,000,000
-----------------
shares of Preferred Stock, par value $.01 per share ("Company Preferred Stock").
-----------------------
As of January 20, 1995, (i) 61,780,548 Shares were issued and outstanding, all
of which were validly issued, fully paid and nonassessable, (ii) 6,451 Shares
were held in the treasury of the Company, (iii) 0 Shares were held by the
Subsidiaries, and (iv) 2,630,000 Shares were reserved for future issuance to
employees as restricted stock and pursuant to employee stock options granted
pursuant to the Company's Stock Option Plans or reserved for directors. As of
the date hereof, no shares of Non-Voting Common are issued and outstanding, and
no shares of Company Preferred Stock are issued and outstanding. As of January
20, 1995, Options covering 7,099,368 Shares were outstanding. Since January 20,
1995 to the date of this Agreement, the Company has not issued any Shares or
granted any Options covering Shares. Except as set forth in this Section 3.03,
or Section 3.03 of the Disclosure Schedule, or pursuant to the Rights Agreement,
there are no options, warrants or other rights, agreements, arrangements or
commitments of any character obligating the Company or any Subsidiary to issue
or sell any shares of capital stock of, or other equity interests in, the
Company or any Subsidiary. All Shares subject to issuance as aforesaid, upon
issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, will be duly authorized, validly issued, fully paid and
nonassessable. There are no outstanding contractual obligations of the Company
or any Subsidiary to repurchase, redeem or otherwise acquire any Shares or any
capital stock of any Subsidiary or to provide funds to, or make any investment
(in the form of a loan, capital contribution or otherwise) in, any Subsidiary or
any other person. Each outstanding share of capital stock of each Material
Subsidiary is duly authorized, validly issued, fully paid and nonassessable and,
except as set forth on Section 3.03 of the Disclosure Schedule, each such share
owned by the Company or another Subsidiary is free and clear of all security
interests, liens, claims, pledges, options, rights of first refusal, agreements,
limitations on the Company's or such other Subsidiary's voting rights, charges
and other encumbrances of any nature whatsoever.
<PAGE>
12
SECTION 3.04. Authority Relative to this Agreement. The Company has
------------------------------------
all necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the Transactions, subject,
with respect to the Merger, stockholder approval. The execution and delivery of
this Agreement by the Company and the consummation by the Company of the
Transactions have been duly and validly authorized by all necessary corporate
action and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the Transactions (other
than, with respect to the Merger, the approval and adoption of this Agreement by
the affirmative votes of the stockholders of the Company to the extent required
by Delaware Law (including Section 203 thereof), and the filing and recordation
of appropriate merger documents as required by Delaware Law). This Agreement
has been duly and validly executed and delivered by the Company and, assuming
the due authorization, execution and delivery by Parent and Purchaser,
constitutes a legal, valid and binding obligation of the Company, except to the
extent such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
generally the enforcement of creditors' rights and by the availability of
equitable remedies.
SECTION 3.05. No Conflict; Required Filings and Consents. (a) The
------------------------------------------
execution and delivery of this Agreement by the Company does not, and the
performance of this Agreement by the Company will not: (i) conflict with or
violate the Certificate of Incorporation or By-laws of the Company or any
Material Subsidiary, (ii) assuming that required filings under the HSR Act (as
hereinafter defined) and Delaware Law are made by the appropriate parties and
the Company, Parent and Purchaser comply with the provisions of Section 203 of
the Delaware Law, conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to the Company or any Subsidiary or by which any
property or asset of the Company or any Subsidiary is bound or affected;
provided, however, that the Company makes no representation or warranty with
- -------- -------
respect to any federal, state or foreign laws relating to antitrust or
competition, or (iii) except as set forth in Section 3.05 of the Disclosure
Schedule, result in any breach of or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any right of termination, amendment, acceleration or cancellation of, or
result in the creation of a lien or other encumbrance on any property or asset
of the Company or any Material Subsidiary pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or any Material Subsidiary is a
party or by which the Company or any Material Subsidiary or any property or
asset of the Company or any Material Subsidiary is bound or affected, except, in
the cases of (ii) and (iii), for any such conflicts, violations, breaches,
defaults or other occurrences which do not, individually or in the aggregate,
have a Material Adverse Effect.
(b) The execution and delivery of this Agreement by the Company does
not, and the performance of this Agreement by the Company will not, require any
consent,
<PAGE>
13
approval, authorization or permit of, or filing with, or notification to, any
governmental or regulatory authority to be obtained or made by the Company,
domestic or foreign, except (i) for applicable requirements, if any, of the
Exchange Act, state securities or "blue sky" laws ("Blue Sky Laws") and state
-------------
takeover laws, the pre-merger notification requirements of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the rules and regulations
thereunder (the "HSR Act"), and filing and recordation of appropriate merger
-------
documents as required by Delaware Law or (ii) where failure to obtain such
consents, approvals, authorizations or permits, or to make such filings or
notifications, would not prevent or delay consummation of the Offer or the
Merger, or otherwise prevent the Company from performing its obligations under
this Agreement, and does not, individually or in the aggregate, have a Material
Adverse Effect.
SECTION 3.06. Compliance. Neither the Company nor any Subsidiary is
----------
in conflict with, or in default or violation of, (i) any law, rule, regulation,
order, judgment or decree applicable to the Company or any Subsidiary or by
which any property or asset of the Company or any Subsidiary is bound or
affected, or (ii) except as set forth in Section 3.06 of the Disclosure
Schedule, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which the
Company or any Subsidiary is a party or by which the Company or any Subsidiary
or any property or asset of the Company or any Subsidiary is bound or affected,
except for any such conflicts, defaults or violations that do not, individually
or in the aggregate, have a Material Adverse Effect.
SECTION 3.07. SEC Filings; Financial Statements. (a) The Company
---------------------------------
has filed all forms, reports and documents required to be filed by it with the
SEC since December 31, 1992 (collectively, the "SEC Reports"). The SEC Reports
-----------
(i) were prepared in all material respects in accordance with the requirements
of the Securities Act of 1933, as amended (the "Securities Act"), and the
--------------
Exchange Act, as the case may be, and the rules and regulations thereunder and
(ii) did not, at the time they were filed (or at the effective date thereof in
the case of registration statements), contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. No Subsidiary is currently required
to file any form, report or other document with the SEC under Section 12 of the
Exchange Act.
(b) Each of the consolidated financial statements (including, in each
case, any notes thereto) contained in the SEC Reports was prepared in accordance
with United States generally accepted accounting principles applied on a
consistent basis ("GAAP") throughout the periods indicated (except as may be
----
indicated in the notes thereto and except that financial statements included
with quarterly reports on Form 10-Q do not contain all GAAP notes to such
financial statements) and each fairly presented the consolidated financial
position, results of operations and changes in stockholders' equity and cash
flows of the Company and the consolidated Subsidiaries as at the respective
dates thereof and for the
<PAGE>
14
respective periods indicated therein (subject, in the case of unaudited
statements, to normal and recurring year-end adjustments which were not and are
not expected, individually or in the aggregate, to have a Material Adverse
Effect).
(c) Except as (i) and to the extent set forth on the consolidated
balance sheet of the Company and the consolidated Subsidiaries as at December
31, 1993, including the notes thereto (the "1993 Balance Sheet"), (ii) set forth
------------------
in Section 3.07(c) of the Disclosure Schedule or (iii) disclosed in any SEC
Report filed by the Company after December 31, 1993, neither the Company nor any
Subsidiary has any liability or obligation of any nature (whether accrued,
absolute, contingent or otherwise) which would be required to be reflected on a
balance sheet, or in the notes thereto, prepared in accordance with GAAP, except
for liabilities and obligations incurred in the ordinary course of business
consistent with past practice since December 31, 1993 which would not,
individually or in the aggregate, be material in amount.
(d) The Company has heretofore furnished to Parent complete and
correct copies of all amendments and modifications (if any) that have not been
filed by the Company with the SEC to all agreements, documents and other
instruments that previously had been filed by the Company with the SEC and are
currently in effect.
SECTION 3.08. Absence of Certain Changes or Events. Since December
------------------------------------
31, 1993, the Company and the Subsidiaries have conducted their businesses only
in the ordinary course and in a manner consistent with past practice and, since
December 31, 1993, except as contemplated by this Agreement or disclosed in any
SEC Report filed since December 31, 1993 and prior to the date of this Agreement
or as set forth in Section 3.08 of the Disclosure Schedule, there has not been
(i) any event having, individually or in the aggregate, a Material Adverse
Effect, (ii) any material change by the Company in its accounting methods,
principles or practices, (iii) any material revaluation by the Company of any
material asset (including, without limitation, any writing down of the value of
inventory or writing off of material notes or material accounts receivable),
(iv) any failure by the Company to revalue materially any material asset in
accordance with GAAP, (v) any declaration, setting aside or payment of any
dividend or distribution in respect of any capital stock of the Company or any
redemption, purchase or other acquisition of any of its securities, (vi) any
material increase in or establishment of any bonus, insurance, severance,
deferred compensation, pension, retirement, profit sharing, stock option
(including, without limitation, the granting of stock options, stock
appreciation rights, performance awards or restricted stock awards), stock
purchase or other employee benefit plan, or any other increase in the
compensation payable or to become payable to any officers or key employees of
the Company or any Subsidiary, except in the ordinary course of business
consistent with past practice, (vii) any Loading (as defined below) other than
in the ordinary course of business consistent with past practice, (viii) any
material change, or announcement of any material change, in the terms,
including, without limitation, price, payment terms or off-invoice allowances
and discounts,
<PAGE>
15
of the sale of any product (or component thereof), any change, or announcement
of any change, in the form or manner of distribution of any product (or
component thereof) or any material change, or announcement of any material
change, in the Company's or any Subsidiary's marketing or spending practices or
glass investment policies or commitments, in each such case, other than in the
ordinary course of business consistent with past practice, or (ix) any entering
into with Pepsico Inc. or any affiliates thereof any agreement for the
manufacture, sale or distribution of the Company's products outside of the
United States. "Loading" shall mean selling a product (a) with a payment term
-------
longer than terms customarily offered by a seller for such product, (b) at a
discount from listed price other than pursuant to a promotion which has been
disclosed to Purchaser prior to the date hereof or, with respect to the period
from the date of this Agreement through the consummation of the Offer, a
promotion for which the prior written consent of Purchaser has been obtained
(unless such promotion is made in the ordinary course of business consistent
with past practice), (c) at a price which does not give effect to any previously
announced general increase in the list price for such product or (d) with
shipment terms other than shipment terms customarily offered by a seller for
such product.
SECTION 3.09. Absence of Litigation. Except as disclosed in the SEC
---------------------
Reports filed prior to the date of this Agreement or in Section 3.09 of the
Disclosure Schedule, there is no claim, action, proceeding or investigation
pending or, to the best knowledge of the Company, threatened against the Company
or any Subsidiary, or any property or asset of the Company or any Subsidiary,
before any court, arbitrator or administrative, governmental or regulatory
authority or body, domestic or foreign, which (i) individually or in the
aggregate, has a Material Adverse Effect (other than any claim, action,
proceeding or investigation seeking to delay or prevent the consummation of any
Transaction) or (ii) as of the date hereof, seeks to delay or prevent the
consummation of any Transaction. As of the date hereof, neither the Company nor
any Subsidiary nor any property or asset of the Company or any Subsidiary is
subject to any order, writ, judgment, injunction, decree, determination or award
having, individually or in the aggregate, a Material Adverse Effect.
SECTION 3.10. Employee Benefit Plans. (a) Section 3.10 of the
----------------------
Disclosure Schedule contains a true and complete list of (i) all employee
benefit plans (within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) and all bonus, stock option,
-----
stock purchase, restricted stock, incentive, deferred compensation, retiree
medical or life insurance, supplemental retirement, severance or other benefit
plans, programs or arrangements, and all employment, termination, severance or
other contracts or agreements to which the Company or any Subsidiary is a party,
with respect to which the Company or any Subsidiary has any obligation or which
are maintained, contributed to or sponsored by the Company or any Subsidiary for
the benefit of any current or former employee, officer or director of the
Company or any Subsidiary and (ii) each employee benefit plan for which the
Company or any Subsidiary could incur liability not otherwise provided for in
the Company's financial statements contained in the
<PAGE>
16
SEC Reports under Section 4069 of ERISA, in the event such plan were terminated,
or under Section 4212(c) of ERISA, or in respect of which the Company or any
Subsidiary remains secondarily liable under Section 4204 of ERISA (collectively,
(i) and (ii) referred to herein as the "Plans"). Each Plan is in writing and
-----
the Company has made available to Parent true and complete copies of each Plan
and true and complete copies of each material document prepared in connection
with each such Plan, including, without limitation, (i) a copy of each trust or
other funding arrangement, (ii) each summary plan description and summary of
material modifications, (iii) the most recently filed Internal Revenue Service
("IRS") Form 5500, (iv) the most recently received IRS determination letter for
---
each such Plan, and (v) the most recently prepared actuarial report and
financial statement in connection with each such Plan. Except as specifically
provided by this Agreement, neither the Company nor any Subsidiary has any
express or implied commitment (i) to create, incur liability with respect to or
cause to exist any other employee benefit plan, program or arrangement, (ii) to
enter into any contract or agreement to provide compensation or benefits to any
individual or (iii) to modify, change or terminate any Plan, other than with
respect to a modification, change or termination required by ERISA or the
Internal Revenue Code of 1986, as amended (the "Code").
----
(b) None of the Plans is a multiemployer plan, within the meaning of
Section 3(37) or 4001(a)(3) of ERISA (a "Multiemployer Plan"), or is a single
------------------
employer pension plan, within the meaning of Section 4001(a)(15) of ERISA, for
which the Company or any Subsidiary could incur liability under Section 4063 or
4064 of ERISA (a "Multiple Employer Plan"). Except to the extent set forth in
----------------------
Plans listed in Section 3.10 of the Disclosure Schedule, none of the Plans (i)
provides for the payment of separation, severance, termination or similar-type
benefits to any person, (ii) obligates the Company or any Subsidiary to pay
separation, severance, termination or other benefits as a result of any
Transaction or (iii) obligates the Company or any Subsidiary to make any payment
or provide any benefit that could be subject to a tax under Section 4999 of the
Code. Except as disclosed in Section 3.10 of the Disclosure Schedule, none of
the Plans provides for or promises retiree medical, disability or life insurance
benefits to any current or former employee, officer or director of the Company
or any Subsidiary.
(c) Each Plan which is intended to be qualified under Section 401(a)
or 401(k) of the Code has received a favorable determination letter from the IRS
that such Plan is so qualified, and each trust established in connection with
any Plan which is intended to be exempt from federal income taxation under
Section 501(a) of the Code has received a determination letter from the IRS that
such trust is so exempt. Except for matters that may be remedied by the IRS's
Voluntary Compliance Resolution or Closing Agreement Programs without liability
that has a Material Adverse Effect, no fact or event has occurred since the date
of any such determination letter from the IRS that could adversely affect the
qualified status of any such Plan or the exempt status of any such trust. Each
trust maintained or contributed to by the Company or any Subsidiary which is
intended to be qualified as a
<PAGE>
17
voluntary employees' beneficiary association exempt from federal income taxation
under Sections 501(a) and 501(c)(9) of the Code has received a favorable
determination letter from the IRS that it is so qualified and so exempt, and no
fact or event has occurred since the date of such determination by the IRS that
could adversely affect such qualified or exempt status except for those facts
and events which do not constitute a Material Adverse Effect.
(d) Except for those matters that do not constitute a Material
Adverse Effect or are adequately reflected on the Company's financial statements
contained in the SEC Reports, (i) there has been no prohibited transaction
(within the meaning of Section 406 of ERISA or Section 4975 of the Code) with
respect to any Plan, (ii) neither the Company nor any Subsidiary is currently
liable or has previously incurred any liability for any tax or penalty arising
under Section 4971, 4972, 4979, 4980 or 4980B of the Code or Section 502(c) of
ERISA, and no fact or event exists which could give rise to any such liability,
and (iii) neither the Company nor any Subsidiary has incurred any liability
under, arising out of or by operation of Title IV of ERISA (other than liability
for premiums to the Pension Benefit Guaranty Corporation arising in the ordinary
course), including, without limitation, any liability in connection with (i) the
termination or reorganization of any employee pension benefit plan subject to
Title IV of ERISA or (ii) the withdrawal from any Multiemployer Plan or Multiple
Employer Plan, and the Company has no knowledge of any fact or event which could
be the proximate cause for any such liability. No complete or partial
termination has occurred within the five years preceding the date hereof with
respect to any Plan. Except with respect to the transactions specifically
provided by this Agreement, no reportable event (within the meaning of Section
4043 of ERISA other than a report which has been waived) has occurred or is
expected to occur with respect to any Plan subject to Title IV of ERISA. No
asset of the Company or any Subsidiary is the subject of any lien arising under
Section 302(f) of ERISA or Section 412(n) of the Code; neither the Company nor
any Subsidiary has been required to post any security under Section 307 of ERISA
or Section 401(a)(29) of the Code; and no fact or event exists which could give
rise to any such lien or requirement to post any such security.
(e) Except to the extent as does not constitute a Material Adverse
Effect, each Plan is now and has been operated in all respects in accordance
with the requirements of all applicable laws, including, without limitation,
ERISA and the Code, and the Company and each Subsidiary have performed all
obligations required to be performed by them under, are not in any respect in
default under or in violation of, and have no knowledge of any default or
violation by any party to, any Plan. No Plan has incurred an "accumulated
funding deficiency" (within the meaning of Section 302 of ERISA or Section 412
of the Code), whether or not waived. The Company's financial statements
contained in the SEC Reports reflect an accrual (through September 30, 1994) of
all material amounts of employer contributions and premiums accrued but unpaid
with respect to the Plans. With respect to each Plan subject to Title IV of
ERISA, the Company has no knowledge that, as of the date hereof, the excess of
the accumulated benefit obligations of such Plan over the fair market
<PAGE>
18
value of the assets of such Plan has increased above such excess determined as
of the date of the most recent actuarial valuation report prepared for such
Plan.
(f) The Company and the Subsidiaries have not incurred any liability
under, and have complied in all respects with, the Worker Adjustment Retraining
Notification Act and the regulations promulgated thereunder and do not
reasonably expect to incur any such liability as a result of actions taken or
not taken prior to the consummation of the Offer.
SECTION 3.11. Labor Matters. Except as set forth in Section 3.11 of
-------------
the Disclosure Schedule, and with such exceptions as do not have a Material
Adverse Effect, (i) there are no controversies pending or, to the best knowledge
of the Company, threatened between the Company or any Subsidiary and any of
their respective employees; (ii) neither the Company nor any Subsidiary is a
party to any collective bargaining agreement or other labor union contract
applicable to persons employed by the Company or any Subsidiary, nor, to the
best knowledge of the Company, are there any activities or proceedings of any
labor union to organize any such employees; (iii) there are no grievances
outstanding against the Company or any Subsidiary under any such agreement or
contract; (iv) there are no unfair labor practice complaints pending against the
Company or any Subsidiary before the National Labor Relations Board or any
current union representation questions involving employees of the Company or any
Subsidiary; and (v) there is no strike, slowdown, work stoppage or lockout, or,
to the best knowledge of the Company, threat thereof, by or with respect to any
employees of the Company or any Subsidiary.
SECTION 3.12. Offer Documents; Schedule 14D-9. Neither the
-------------------------------
Schedule 14D-9 nor any information supplied by the Company for inclusion in the
Offer Documents shall, at the respective times the Schedule 14D-9, the Offer
Documents, or any amendments or supplements thereto are filed with the SEC or
are first published, sent or given to stockholders of the Company, as the case
may be, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they are
made, not misleading, except that no representation or warranty is made by the
Company with respect to information supplied by Purchaser or Parent for
inclusion in the Schedule 14D-9. The Schedule 14D-9 shall comply in all
material respects as to form with the requirements of the Exchange Act and the
rules and regulations thereunder.
SECTION 3.13. Real Property and Leases. The Company and the
------------------------
Subsidiaries have sufficient title or leasehold interests to all their
properties and assets to conduct their respective businesses as currently
conducted.
SECTION 3.14. Trademarks, Patents and Copyrights. Except as set
----------------------------------
forth in Section 3.14(a) of the Disclosure Schedule, the Company and the
Subsidiaries own free and
<PAGE>
19
clear of any liens, pledges or other encumbrances (other than Permitted Liens
(as defined below)) all patents, patent rights, trademarks, trademark rights,
trade names, trade dress, trade name rights, copyrights, service marks, trade
secrets, applications for trademarks and for service marks, which are material
to the business of the Company and the Subsidiaries as currently conducted,
taken as a whole, and the Company is unaware of any material assertion or claim
challenging the validity of any of the foregoing. Section 3.14(b) of the
Disclosure Schedule lists each trademark owned by the Company or any Subsidiary
and specifies the registration number and date of registration for each such
trademark. Section 3.14(c) of the Disclosure Schedule lists each agreement
pursuant to which a trademark is licensed to the Company or any Material
Subsidiary as licensee for use in the business of the Company and the
Subsidiaries as currently conducted. The conduct of the business of the Company
and the Subsidiaries as currently conducted does not conflict in any material
manner with any trademark, trademark right, trade name, trade name right, trade
dress, patent right, patent, service mark, or copyright of any third party. To
the best knowledge of the Company, and except as set forth on Section 3.14(d) to
the Disclosure Schedule, there are no infringements or unauthorized uses of any
proprietary rights owned by or licensed by or to the Company or any Subsidiary.
For purposes of this Section 3.14, "Permitted Liens" means, collectively, (A)
---------------
any liens, pledges or other encumbrances ("Liens") for current taxes and
-----
assessments not yet past due, (B) any Liens arising from the Company's bank
credit facility existing on the date of this Agreement, (C) inchoate mechanics'
and materialmen's Liens for construction in progress, (D) workmen's,
repairmen's, warehousemen's and carriers' Liens arising in the ordinary course
of business of the Company or the Material Subsidiaries and (E) all Liens and
other imperfections of title and encumbrances which, individually or in the
aggregate, would not have a Material Adverse Effect.
SECTION 3.15. Taxes. (a) Except as disclosed in Section 3.15 of the
-----
Disclosure Schedule, (i) all federal income tax returns and, to the best of the
Company's knowledge, all other returns and reports in respect of Taxes required
to be filed with respect to the Company and each Subsidiary (including all
consolidated federal income tax returns of the Company and any state or other
Tax return that includes the Company or any Subsidiary on a consolidated or
combined basis) have been timely filed; (ii) all Taxes shown on such returns and
reports and, to the best of the Company's knowledge, all other Taxes otherwise
due have been, or prior to the Closing of the Offering will be, timely paid;
(iii) all such returns and reports (insofar as they relate to the activities or
income of the Company or any Subsidiary) are true, correct and complete in all
material respects; (iv) no adjustment relating to such returns has been proposed
formally or, to the best of the Company's knowledge, informally by any Tax
authority (insofar as either relates to the activities or income of the Company
or any Subsidiary or could result in liability of the Company or any Subsidiary
on the basis of joint and/or several liability) and, to the best knowledge of
the Company and the Subsidiaries, no basis exists for any such adjustment; and
(v) all Taxes required to be withheld, collected or deposited by or with respect
to the Company or any Subsidiary have
<PAGE>
20
been timely withheld, collected or deposited, as the case may be, and, to the
extent required, have been paid to the relevant taxing authority.
(b) Except as set forth in Section 3.15 of the Disclosure Schedule,
(i) there are no pending or, to the best knowledge of the Company and the
Subsidiaries, threatened actions or proceedings for the assessment or collection
of Taxes against the Company or any Subsidiary or (insofar as either relates to
the activities or income of the Company or any Subsidiary or could result in
liability of the Company or any Subsidiary on the basis of joint and/or several
liability) any corporation that was included in the filing of a return with the
Company on a consolidated or combined basis; (ii) no consent under Section
341(f) of the Code has been filed with respect to the Company or any Subsidiary;
(iii) there are no material Tax liens on any assets of the Company or any
Subsidiary; (iv) neither the Company nor any Subsidiary has been at any time a
member of any partnership or joint venture or the holder of a beneficial
interest in any trust for any period for which the statute of limitations for
any Tax has not expired; (v) neither the Company nor any Subsidiary has been a
United States real property holding corporation within the meaning of Section
897(c)(2) of the Code during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code; (vi) there are no outstanding waivers or
agreements extending the statute of limitations for any period with respect to
any Tax to which the Company or any Subsidiary may be subject; (vii) neither the
Company nor any Subsidiary (A) has or is projected to have an amount included in
its income for the current taxable year under Section 951 of the Code, (B) has
been a passive foreign investment company within the meaning of Section 1296 of
the Code, (C) to the best of the Company's knowledge has an unrecaptured overall
foreign loss within the meaning of Section 904(f) of the Code or (D) to the best
of the Company's knowledge has participated in or cooperated with an
international boycott within the meaning of Section 999 of the Code; (viii)
neither the Company nor any Subsidiary has any (A) income reportable for a
period ending after the date on which the Offer is consummated but attributable
to a sale or exchange occurring in or a change in accounting method made for a
period ending on or prior to such date, which resulted in a deferred reporting
of income from such transaction or from such change in accounting method (other
than a deferred intercompany transaction), or (B) deferred gain or loss arising
out of any deferred intercompany transaction; (ix) neither the Company nor any
Subsidiary has received any requests for information from any Tax authority,
which are currently outstanding; (x) there are no proposed formal or, to the
best knowledge of the Company, informal, increases of property, ad valorem or
similar Taxes imposed on the Company or any Subsidiary, or to the best knowledge
of the Company, any proposals to increase the rate of any property Tax imposed
on any property owned by the Company or any Subsidiary; (xi) neither the Company
nor any Subsidiary is obligated under any agreement with respect to industrial
development bonds or similar obligations, with respect to which the
excludibility from gross income of the holder for federal income tax purposes
could be affected by the transaction contemplated hereunder; (xii) neither the
Company nor any Subsidiary is a party to any agreement or arrangement that would
result, separately or in the aggregate, in the payment of any "excess parachute
payments" within the
<PAGE>
21
meaning of Section 280G of the Code; (xiii) to the best knowledge of the
Company, the Company and its Subsidiaries do not, either individually or in the
aggregate, have a net unrealized built-in loss within the meaning of Section
382(h) of the Code and section 1.1502-91(g) of the proposed Regulations; and
(xiv) no power of attorney that is currently in force has been granted by the
Company or any Subsidiary with respect to any matter relating to Taxes that
could affect the Company or any Subsidiary.
(c) Section 3.15(c) of the Disclosure Schedule lists (i) to the best
knowledge of the Company, the amount and expiration dates of any net operating
loss, net capital loss, unused business credit, unused foreign tax credit, or
excess charitable contribution allocable to the Company and each Subsidiary as
of December 31, 1993, (ii) a reasonable estimate of the tax attributes described
in clause (i) that were applied against taxable income for the calendar year
ending December 31, 1994, (iii) a reasonable estimate of any "section 382
limitation" within the meaning of Section 382(b) of the Code, applicable to tax
attributes of the Company or any Subsidiary, and (iv) the amount of any equity
or capital contributions to the Company since January 1, 1992, which
contributions have not otherwise been disclosed in the SEC Reports. To the best
knowledge of the Company, except as referred to in Section 3.15(c) of the
Disclosure Schedule, none of the tax attributes listed in clause (i) has been
challenged.
(d) "Tax" or "Taxes" means any and all taxes, fees, levies, duties,
--- -----
tariffs, imposts, and other charges of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any government or taxing authority, including,
without limitation: taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation, or net worth; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value added, or gains taxes;
license, registration and documentation fees; and custom duties, tariffs, and
similar charges.
SECTION 3.16. Environmental Matters. (a) For purposes of this
---------------------
Agreement, the following terms shall have the following meanings: (i)
"Hazardous Substances" means (A) those substances defined as hazardous in or
--------------------
regulated as hazardous under the following federal statutes and their state
counterparts, as each may be amended from time to time, and all regulations
thereunder: the Hazardous Materials Transportation Act, the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response,
Compensation, and Liability Act, the Clean Water Act, the Safe Drinking Water
Act, the Atomic Energy Act, the Federal Insecticide, Fungicide, and Rodenticide
Act and the Clean Air Act; (B) petroleum and petroleum products, including crude
oil and any fractions thereof; (C) natural gas, synthetic gas, and any mixtures
thereof; (D) radon; (E) any other contaminant; and (F) any substance with
respect to which a federal, state or local agency requires environmental
investigation, monitoring, reporting or remediation; and (ii)
<PAGE>
22
"Environmental Laws" means any federal, state or local law relating to (A)
------------------
releases or threatened releases of Hazardous Substances or materials containing
Hazardous Substances into the environment; (B) the manufacture, handling,
transport, use, treatment, storage or disposal of Hazardous Substances or
materials containing Hazardous Substances; or (C) otherwise relating to
pollution of the environment or the protection of human health.
(b) Except as described in Section 3.16 of the Disclosure Schedule:
(i) the Company and each Subsidiary is in compliance with all applicable
Environmental Laws, except for noncompliance that individually or in the
aggregate do not have a Material Adverse Effect; (ii) the Company and each
Subsidiary have obtained all permits, licenses and other material governmental
authorizations required under applicable Environmental Laws, and are in
compliance with the terms and conditions thereof, except for failures to obtain
or noncompliance that individually or in the aggregate do not have a Material
Adverse Effect; (iii) neither the Company nor any of its Subsidiaries has
received written notice of, or, to the best knowledge of the Company, is the
subject of, any action, cause of action, claim, investigation, demand or notice
by any person or entity alleging liability under or noncompliance with any
Environmental Law that individually or in the aggregate would have a Material
Adverse Effect; and (iv) to the best knowledge of the Company, there is no
environmental condition on any of the properties currently or formerly owned or
leased by the Company or any Subsidiary that individually or in the aggregate
has a Material Adverse Effect.
SECTION 3.17. Formula Cards. The Company has taken all commercially
-------------
reasonable efforts to protect its principal information, techniques, formulae,
recipes, trade secrets, specific know-how, procedures, processes and related
ancillary and incidental know-how, standards and specifications relating to all
soft drink concentrate, bases or syrups, fountain syrups, beverage bases and
finished soft drinks presently manufactured by the Company or by any other party
manufacturing under license or other authorization from the Company.
SECTION 3.18. Amendment to Rights Agreement. (a) The Board has
-----------------------------
taken all necessary action to amend the Rights Agreement (but subject to the
Board's right to further amend the Rights Agreement) so that (A) none of the
execution or delivery of this Agreement or the Stockholders Agreement or the
making of the Offer will cause (i) the Rights to become exercisable under the
Rights Agreement, (ii) Parent or Purchaser or any of their affiliates to be
deemed an "Acquiring Person" (as defined in the Rights Agreement) or (iii) the
----------------
"Stock Acquisition Date" (as defined in the Rights Agreement) to occur upon any
----------------------
such event, (B) none of the acceptance for payment or payment for Shares by
Purchaser pursuant to the Offer or the consummation of the Merger will cause (i)
the Rights to become exercisable under the Rights Agreement or (ii) Parent or
Purchaser or any of their affiliates to be deemed an Acquiring Person or (iii)
the Stock Acquisition Date to occur upon any such event, and (C) the "Expiration
----------
Date" (as defined in the Rights Agreement) shall occur no
- ----
<PAGE>
23
later than immediately prior to the purchase of shares pursuant to the Offer;
provided, however, that if this Agreement is terminated in accordance with
- -------- -------
Section 8.01, the Board may rescind its approval of the Offer as a Permitted
Offer or further amend the Rights Agreement so that clauses 3.16(a)(B) and (C)
will not be the case.
(b) The "Distribution Date" (as defined in the Rights Agreement) has
-----------------
not occurred.
(c) The Board, pursuant to and in accordance with the Rights
Agreement, has taken all necessary action to approve the Offer as a "Permitted
---------
Offer" (as defined in the Rights Agreement), and all determinations required
- -----
under the Rights Agreement to be made by the Board in connection with such
approval have been properly made in accordance with the Rights Agreement;
provided, however, that if this Agreement is terminated pursuant to Section
- -------- -------
8.01, the Board may rescind its approval of the Offer as a Permitted Offer.
SECTION 3.19. Brokers. No broker, finder or investment banker (other
-------
than DLJ and BT) is entitled to any brokerage, finder's or other fee or
commission in connection with the Transactions based upon arrangements made by
or on behalf of the Company. The Company has heretofore furnished to Parent a
complete and correct copy of all agreements between the Company and DLJ and BT
pursuant to which either such firm would be entitled to any payment relating to
the Transactions.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
------------------------------------------------------
Parent and Purchaser hereby, jointly and severally, represent and
warrant to the Company that:
SECTION 4.01. Corporate Organization. Each of Parent and Purchaser
----------------------
is a corporation duly organized, validly existing and, in the case of Purchaser,
in good standing or, in the case of Parent, not in liquidation or the subject of
any petition or proposed resolution or other proceeding for its liquidation,
under the laws of the jurisdiction of its incorporation and has the requisite
power and authority and all necessary governmental approvals to own, lease and
operate its properties and to carry on its business as it is now being
conducted, except where the failure to have such power, authority and
governmental approvals would not, individually or in the aggregate, have a
material adverse effect on the ability of Parent and Purchaser to perform their
obligations hereunder and to consummate the Transactions.
<PAGE>
24
SECTION 4.02. Authority Relative to this Agreement. Each of Parent
------------------------------------
and Purchaser has all necessary corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the Transactions. The execution and delivery of this Agreement by Parent and
Purchaser and the consummation by Parent and Purchaser of the Transactions have
been duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of Parent or Purchaser are necessary to
authorize this Agreement or to consummate the Transactions (other than, (i) with
respect to the Transactions, the majority vote by the holders of the ordinary
shares of Parent voting at a General Meeting of Shareholders and (ii) with
respect to the Merger, the filing and recordation of appropriate merger
documents as required by Delaware Law). This Agreement has been duly and
validly executed and delivered by Parent and Purchaser and, assuming the due
authorization, execution and delivery by the Company, constitutes a legal, valid
and binding obligation of each of Parent and Purchaser enforceable against each
of Parent and Purchaser in accordance with its terms.
SECTION 4.03. No Conflict; Required Filings and Consents. (a) The
------------------------------------------
execution and delivery of this Agreement by Parent and Purchaser do not, and the
performance of this Agreement by Parent and Purchaser will not, (i) conflict
with or violate the Articles of Association, Certificate of Incorporation or
By-laws of either Parent or Purchaser, (ii) conflict with or violate any law,
rule, regulation, order, judgment or decree applicable to Parent or Purchaser or
by which any property or asset of either of them is bound or affected, or (iii)
result in any breach of or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or other encumbrance on any property or asset of Parent
or Purchaser pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which Parent or Purchaser is a party or by which Parent or Purchaser or any
property or asset of either of them is bound or affected, except for any such
conflicts, violations, breaches, defaults or other occurrences which would not,
individually or in the aggregate, prevent Parent and Purchaser from performing
their respective obligations under this Agreement and consummating the
Transactions.
(b) The execution and delivery of this Agreement by Parent and
Purchaser do not, and the performance of this Agreement by Parent and Purchaser
will not, require any consent, approval, authorization or permit of, or filing
with or notification to, any governmental or regulatory authority, domestic or
foreign, except (i) for applicable requirements, if any, of the Exchange Act,
Blue Sky Laws and state takeover laws, the HSR Act, the Defense Production Act
and filing and recordation of appropriate merger documents as required by
Delaware Law and (ii) where failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not
prevent or delay consummation of the Transactions, or otherwise prevent Parent
or Purchaser from performing their respective obligations under this Agreement.
<PAGE>
25
SECTION 4.04. Offer Documents; Proxy Statement. The Offer Documents
--------------------------------
will not, at the time the Offer Documents are filed with the SEC or are first
published, sent or given to stockholders of the Company, as the case may be,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein, in the light of the circumstances under which they are made, not
misleading. The information supplied by Parent for inclusion in the proxy
statement to be sent to the stockholders of the Company in connection with the
Stockholders Meeting (as hereinafter defined) (such proxy statement, as amended
and supplemented, being referred to herein as the "Proxy Statement") and
---------------
Schedule 14D-9 will not, on the date the Proxy Statement or Schedule 14D-9 (or
any amendment or supplement thereto) is first mailed to stockholders of the
Company, at the time of the Stockholders Meeting and at the Effective Time,
contain any statement which, at such time and in light of the circumstances
under which it is made, is false or misleading with respect to any material
fact, or omits to state any material fact required to be stated therein or
necessary in order to make the statements therein not false or misleading or
necessary to correct any statement in any earlier communication with respect to
the solicitation of proxies for the Stockholders Meeting which shall have become
false or misleading; provided, however, that Parent or Purchaser makes no
-------- -------
representation or warranty with respect to information supplied by the Company
for inclusion in the Offer Documents. Notwithstanding the foregoing, Parent and
Purchaser make no representation or warranty with respect to any information
supplied by the Company or any of its representatives which is contained in any
of the foregoing documents or the Offer Documents. The Offer Documents shall
comply in all material respects as to form with the requirements of the Exchange
Act and the rules and regulations thereunder.
SECTION 4.05. Brokers. No broker, finder or investment banker (other
-------
than Kleinwort Benson Ltd., Kleinwort Benson North America, Inc., Hoare Govett
Ltd. and Goldman, Sachs International Ltd.) is entitled to any brokerage,
finder's or other fee or commission in connection with the Transactions based
upon arrangements made by or on behalf of Parent or Purchaser.
SECTION 4.06. Financing. Parent has, or will have available to it at
---------
the time Purchaser is required to pay for Shares under the terms of the Offer,
and will make available to Purchaser, sufficient funds to permit Purchaser to
acquire all the outstanding Shares in the Offer and the Merger. Parent has
obtained commitments for such funds.
<PAGE>
26
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
--------------------------------------
SECTION 5.01. Conduct of Business by the Company Pending the
----------------------------------------------
Purchaser's Election Date. The Company covenants and agrees that, between the
- -------------------------
date of this Agreement and the election or appointment of Purchaser's designees
to the Board pursuant to Section 6.03 upon the purchase by Purchaser of any
Shares pursuant to the Offer (the "Purchaser's Election Date"), unless Parent
-------------------------
shall otherwise agree in writing, the businesses of the Company and the
Subsidiaries shall be conducted only in, and the Company and the Subsidiaries
shall not take any action except in, the ordinary course of business and in a
manner consistent with past practice; and the Company shall use its reasonable
best efforts to preserve substantially intact the business organization of the
Company and the Subsidiaries, to keep available the services of the current
officers, employees and consultants of the Company and the Subsidiaries and to
preserve the current relationships of the Company and the Subsidiaries with
customers, suppliers and other persons with which the Company or any Subsidiary
has significant business relations. By way of amplification and not limitation,
except as contemplated by this Agreement, neither the Company nor any Material
Subsidiary shall, between the date of this Agreement and the Purchaser's
Election Date, directly or indirectly do, or propose to do, any of the following
without the prior written consent of Parent:
(a) amend or otherwise change its Certificate of Incorporation or
By-laws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, encumber, or authorize
the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any
shares of capital stock of any class of the Company or any Subsidiary, or
any options, warrants, convertible securities or other rights of any kind
to acquire any shares of such capital stock, or any other ownership
interest (including, without limitation, any phantom interest), of the
Company or any Subsidiary (except for the issuance of Shares issuable
pursuant to Options outstanding on the date hereof) or (ii) any assets of
the Company or any Subsidiary, except for sales of products in the ordinary
course of business and in a manner consistent with past practice;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect
to any of its capital stock (except for such declarations, set asides,
dividends and other distributions made from any Subsidiary to the Company);
(d) reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock;
<PAGE>
27
(e) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any corporation,
partnership, other business organization or any division thereof or any
material amount of assets other than in the ordinary course of business;
(ii) incur any indebtedness for borrowed money or issue any debt securities
or assume, guarantee or endorse, or otherwise as an accommodation become
responsible for, the obligations of any person, or make any loans or
advances, except in the ordinary course of business and consistent with
past practice; (iii) without the prior written consent of Parent (which
shall not be unreasonably withheld), enter into any (A) bottling license
agreements or (B) supply agreements with a term exceeding one year or
terminate, cancel or request any material change in, or agree to any
material change in, any bottling license agreement or supply agreement;
(iv) authorize capital expenditures which are, in the aggregate, in excess
of $2,000,000 through March 15, 1995 for the Company and the Subsidiaries
taken as a whole (provided, however, that, notwithstanding the foregoing
-------- -------
limitation, capital expenditures in the aggregate for 1995 shall not exceed
the aggregate capital expenditures for 1994 and, provided, further, the
-------- -------
Company may enter into software licenses with SAP with the prior written
consent of Parent, which consent shall not be unreasonably withheld); or
(v) enter into or amend any contract, agreement, commitment or arrangement
with respect to any matter set forth in this Section 5.01(e);
(f) increase the compensation payable or to become payable to its
officers or employees, except for increases in accordance with past
practices in salaries or wages of employees of the Company or any
Subsidiary who are not officers of the Company or any Subsidiary, or grant
any severance or termination pay to, or enter into any employment or
severance agreement with, any director, officer or other employee of the
Company or any Subsidiary, or establish, adopt, enter into or amend any
collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund,
policy or arrangement for the benefit of any director, officer or employee
or circulate to any employee any details of any such plan proposed to be
adopted;
(g) make any tax election or settle or compromise any material
federal, state, local or foreign income tax liability;
(h) pay, discharge or satisfy any claim, liability or obligation
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction, in the ordinary course of
business and consistent with past practice, of liabilities reflected or
reserved against in the 1993 Balance Sheet or subsequently incurred in the
ordinary course of business and consistent with past practice;
<PAGE>
28
(i) settle or comprise any pending or threatened suit, action or
claim which is material or which relates to any of the Transactions; or
(j) take or offer or propose to take, or agree to take in writing, or
otherwise, any of the actions described in paragraphs (a) through (i) of
this Section 5.01 or any action which would result in any of the conditions
to the Offer not being satisfied (other than as contemplated by this
Agreement).
ARTICLE VI
ADDITIONAL AGREEMENTS
---------------------
SECTION 6.01. Stockholders Meetings. (a) Subject to its fiduciary
---------------------
duties under applicable law as advised in writing by independent counsel, the
Company, acting through the Board, shall, in accordance with applicable law and
the Company's Certificate of Incorporation and By-laws, (i) duly call, give
notice of, convene and hold an annual or special meeting of its stockholders as
soon as practicable following consummation of the Offer for the purpose of
considering and taking action on this Agreement and the transactions
contemplated hereby (the "Stockholders Meeting") and (ii) include in the Proxy
--------------------
Statement the unanimous recommendation of the Board that the stockholders of the
Company approve and adopt this Agreement and the Transactions, including,
without limitation, the Merger and use its reasonable best efforts to obtain
such approval and adoption. To the extent permitted by law, Parent and
Purchaser each agree to vote all Shares beneficially owned by them in favor of
the Merger.
(b) Subject to its fiduciary duties under applicable law as advised
in writing by independent counsel, Parent, acting through its Board of
Directors, shall, in accordance with applicable law, (i) duly call, give notice
of, convene and hold a special meeting of the holders of Parent's ordinary
shares (the "Parent Stockholders Meeting") as soon as practicable following the
---------------------------
date of this Agreement, but in no event later than March 1, 1995, for the
purpose of considering and authorizing the Transactions and (ii) unanimously
recommend that the holders of ordinary shares of Parent approve and adopt this
Agreement and the Transactions, including, without limitation, the Merger and
use its reasonable best efforts to obtain such approval and adoption.
(c) In the event that (i) Purchaser or its permitted assignee shall
have purchased all Shares validly tendered and not withdrawn pursuant to the
Offer and (ii) the requisite affirmative vote of the stockholders of the Company
to effect the Merger is not obtained at the Stockholders Meeting, the parties
hereto agree within five business days after Parent or any of its subsidiaries
or affiliates is no longer subject to the restrictions set forth
<PAGE>
29
in Section 203 of Delaware Law, to use their reasonable best efforts to take all
necessary and appropriate action to cause the Merger to become effective.
SECTION 6.02. Proxy Statement. As soon as practicable following the
---------------
purchase of all Shares validly tendered and not withdrawn pursuant to the Offer,
the Company shall file the Proxy Statement with the SEC under the Exchange Act,
and shall use its reasonable best efforts to have the Proxy Statement cleared by
the SEC. Parent, Purchaser and the Company shall cooperate with each other in
the preparation of the Proxy Statement, and the Company shall notify Parent of
the receipt of any comments of the SEC with respect to the Proxy Statement and
of any requests by the SEC for any amendment or supplement thereto or for
additional information and shall provide to Parent promptly copies of all
correspondence between the Company or any representative of the Company and the
SEC. The Company shall give Parent and its counsel the opportunity to review
the Proxy Statement prior to its being filed with the SEC and shall give Parent
and its counsel the opportunity to review all amendments and supplements to the
Proxy Statement and all responses to requests for additional information and
replies to comments prior to their being filed with, or sent to, the SEC. Each
of the Company, Parent and Purchaser agrees to use its reasonable best efforts,
after consultation with the other parties hereto, to respond promptly to all
such comments of and requests by the SEC and to cause the Proxy Statement and
all required amendments and supplements thereto to be mailed to the holders of
Shares entitled to vote at the Stockholders Meeting at the earliest practicable
time with the intent being to complete the Merger before May 31, 1995.
SECTION 6.03. Company Board Representation; Section 14(f).
-------------------------------------------
(a) Promptly upon the purchase by Purchaser of Shares pursuant to the Offer,
and from time to time thereafter, Purchaser shall be entitled to designate up to
such number of directors, rounded up to the next whole number, on the Board as
shall give Purchaser representation on the Board equal to the product of the
total number of directors on the Board (giving effect to the directors elected
pursuant to this sentence) multiplied by the percentage that the aggregate
number of Shares beneficially owned by Purchaser or any affiliate of Purchaser
at such time bears to the total number of Shares then outstanding, and the
Company shall, at such time, promptly take all actions necessary to cause
Purchaser's designees to be elected as directors of the Company, including
increasing the size of the Board or securing the resignations of incumbent
directors or both. At such times, the Company shall use its best efforts to
cause persons designated by Purchaser to constitute the same percentage as
persons designated by Purchaser shall constitute of the Board of (i) each
committee of the Board (some of whom may be required to be independent as
required by applicable law), (ii) each board of directors of each domestic
Subsidiary and (iii) each committee of each such board, in each case only to the
extent permitted by applicable law. Notwithstanding the foregoing, until the
time Purchaser acquires a majority of the then outstanding Shares on a fully
diluted basis, the Company shall use its best efforts to ensure that all the
members of the Board and each committee of the Board and such boards and
committees of the domestic Subsidiaries as of
<PAGE>
30
the date hereof who are not employees of the Company shall remain members of the
Board and of such boards and committees.
(b) The Company shall promptly take all actions required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order
to fulfill its obligations under this Section 6.03 and shall include in the
Schedule 14D-9 such information with respect to the Company and its officers and
directors as is required under Section 14(f) and Rule 14f-1 to fulfill such
obligations. Parent or Purchaser shall supply to the Company and be solely
responsible for any information with respect to either of them and their
nominees, officers, directors and affiliates required by such Section 14(f) and
Rule 14f-1.
(c) Following the election or appointment of designees of Purchaser
pursuant to this Section 6.03, prior to the Effective Time, any amendment of
this Agreement or the Certificate of Incorporation or By-laws of the Company,
any termination of this Agreement by the Company, any extension by the Company
of the time for the performance of any of the obligations or other acts of
Parent or Purchaser or waiver of any of the Company's rights hereunder shall
require the concurrence of a majority of the directors of the Company then in
office who neither were designated by Purchaser nor are employees of the Company
or if no such directors are then in office, no such amendment, termination,
extension or waiver shall be effected which is materially adverse to the holders
of Shares (other than Parent and its subsidiaries).
SECTION 6.04. Access to Information; Confidentiality. (a) From the
--------------------------------------
date hereof to the consummation of the Offer, the Company shall, and shall cause
the Subsidiaries and the officers, directors, employees, auditors and agents of
the Company and the Subsidiaries to, afford the officers, employees and agents
of Parent and Purchaser and persons providing or committing to provide Parent or
Purchaser with financing for the Transactions complete access at all reasonable
times to the officers, employees, agents, properties, offices, plants and other
facilities, books and records of the Company and each Subsidiary, and shall
furnish Parent and Purchaser and persons providing or committing to provide
Parent or Purchaser with financing for the Transactions with all financial,
operating and other data and information as Parent or Purchaser, through its
officers, employees or agents, may reasonably request.
(b) To the extent permitted by applicable law, in order to facilitate
the continuing operation of the Company by Parent and Purchaser from and after
the completion of the Offer without disruption and to assist in an achievement
of an orderly transition in the ownership and management of the Company, from
the date of this Agreement and until completion of the Offer, the Company,
Parent and Purchaser shall cooperate reasonably with each other to effect an
orderly transition including, without limitation, with respect to communications
with bottlers and employees.
<PAGE>
31
(c) All information obtained by Parent or Purchaser pursuant to this
Section 6.04 shall be kept confidential in accordance with the confidentiality
agreement, dated January 22, 1995 (the "Confidentiality Agreement"), between
-------------------------
Parent and the Company.
SECTION 6.05. No Solicitation of Transactions. Until this Agreement
-------------------------------
shall have been terminated pursuant to Section 8.01, neither the Company nor any
Subsidiary shall, directly or indirectly, through any officer, director, agent
or otherwise, solicit, initiate or encourage the submission of any proposal or
offer from any person relating to any acquisition or purchase of all or (other
than in the ordinary course of business) any substantial portion of the assets
of, or any equity interest in, the Company or any Material Subsidiary or any
business combination with the Company or any Subsidiary or, except to the extent
required by fiduciary obligations under applicable law as advised in writing by
independent counsel, participate in any negotiations regarding, or furnish to
any other person any information with respect to, or otherwise cooperate in any
way with, or assist or participate in, facilitate or encourage, any effort or
attempt by any other person to do or seek any of the foregoing; provided,
--------
however, that nothing contained in this Section 6.05 shall prohibit the Board
- -------
from furnishing information to, or entering into discussions or negotiations
with, any person in connection with an unsolicited (from the date of this
Agreement) proposal in writing by such person to acquire the Company pursuant to
a merger, consolidation, share exchange, business combination or other similar
transaction or to acquire all or substantially all of the assets of the Company
or any of its Subsidiaries, if, and only to the extent that, (i) the Board,
after consultation with independent legal counsel (which may include its
regularly engaged independent legal counsel), determines in good faith that such
action is required for the Board to comply with its fiduciary duties to
stockholders imposed by Delaware Law and (ii) prior to furnishing such
information to, or entering into discussions or negotiations with, such person
the Company uses its reasonable best efforts to obtain from such person an
executed confidentiality agreement on terms no less favorable to the Company
than those contained in the Confidentiality Agreement. The Company immediately
shall cease and cause to be terminated all existing discussions or negotiations
with any parties conducted heretofore with respect to any of the foregoing. The
Company shall notify Parent promptly if any such proposal or offer, or any
inquiry or contact with any person with respect thereto, is made. The Company
agrees not to release any third party from, or waive any provision of, any
confidentiality or, subject to the fiduciary duties of the Board, standstill
agreement to which the Company is or may become a party.
SECTION 6.06. Employee Stock Options and Other Employee Benefits
--------------------------------------------------
Matters. Annex B hereto sets forth certain agreements among the parties hereto
- -------
with respect to the Plans and other employee benefits matters.
<PAGE>
32
SECTION 6.07. Directors' and Officers' Indemnification and Insurance.
------------------------------------------------------
(a) The Certificate of Incorporation of the Surviving Corporation and
each of its Subsidiaries shall contain provisions no less favorable with respect
to indemnification and advancement of expenses than are set forth in Article VI
of the Certificate of Incorporation of the Company as of the date of this
Agreement, which provisions shall not be amended, repealed or otherwise modified
for a period of six years from the Effective Time in any manner that would
affect adversely the rights thereunder of individuals who at any time from and
after the date of this Agreement and to and including the Effective Time were
directors, officers, employees, fiduciaries or agents of the Company or any of
its Subsidiaries in respect of actions or omissions occurring at or prior to the
Effective Time (including, without limitation, the matters contemplated by this
Agreement), unless such modification is required by law. From and after the
Purchaser's Election Date, the Company shall not amend, repeal or otherwise
modify the indemnification and advancement of expenses provisions of Article VI
of the Certificate of Incorporation of the Company or the indemnification or
advancement of expenses provisions in the Certificate of Incorporation of any of
the Company's Subsidiaries in any manner that would adversely affect the rights
thereunder of individuals who at any time from and after the date of this
Agreement and to and including the Effective Time were directors, officers,
employees, fiduciaries or agents of the Company or any of its Subsidiaries in
respect of actions or omissions occurring at or prior to the Effective Time
(including, without limitation, the matters contemplated by this Agreement),
unless such modification is required by law.
(b) The Company shall, to the fullest extent permitted under
applicable law and regardless of whether the Merger becomes effective, indemnify
and hold harmless, and, after the Effective Time, the Surviving Corporation
shall, to the fullest extent permitted under applicable law, indemnify and hold
harmless, each present and former director, officer, employee, fiduciary and
agent of the Company and each Subsidiary (collectively, the "Indemnified
-----------
Parties") against all costs and expenses (including attorneys' fees), judgments,
- -------
fines, losses, claims, damages, liabilities and settlement amounts paid in
connection with any threatened or actual claim, action, suit, proceeding or
investigation (whether arising before or after the Effective Time) ("Claim"),
-----
whether civil, criminal, administrative or investigative, arising out of or
pertaining to any action or omission in their capacity as an officer, director,
employee, fiduciary or agent (including, without limitation, any Claim arising
out of this Agreement or any of the transactions contemplated hereby), whether
occurring before or after the Effective Time, whether asserted or claimed prior
to, at or after the Effective Time, for a period of six years after the later of
the date of this Agreement and the Effective Time, in each case to the fullest
extent permitted under Delaware Law (and shall pay any expenses in advance of
the final disposition of any such action or proceeding to each Indemnified Party
to the fullest extent permitted under Delaware Law, upon receipt from the
Indemnified Party to whom expenses are advanced of any undertaking to repay such
advances required under Delaware Law). In the event of any such claim, action,
suit, proceeding or investigation,
<PAGE>
33
(i) the Indemnified Parties may retain counsel (including local counsel)
satisfactory to them and the Company or the Surviving Corporation, as the case
may be, shall pay the reasonable fees and expenses of such counsel, promptly
after statements therefor are received and (ii) the Company and the Surviving
Corporation shall use all reasonable efforts in the vigorous defense of any such
matter; provided, however, that neither the Company nor the Surviving
-------- -------
Corporation shall be liable for any settlement effected without its written
consent (which consent shall not be unreasonably withheld); and provided further
-------- -------
that neither the Company nor the Surviving Corporation shall be obligated
pursuant to this Section 6.07(b) to pay the fees and expenses of more than one
counsel (plus appropriate local counsel) for all Indemnified Parties in any
single action unless there is, as determined by counsel to the Indemnified
Parties, under applicable standards of professional conduct, a conflict or a
reasonable likelihood of a conflict on any significant issue between the
positions of any two or more Indemnified Parties, in which case such additional
counsel (including local counsel) as may be required to avoid any such conflict
or likely conflict may be retained by the Indemnified Parties at the expense of
the Company or the Surviving Corporation; and provided further that, in the
-------- -------
event that any claim for indemnification is asserted or made within such six-
year period, all rights to indemnification in respect of such claim shall
continue until the disposition of such claim.
(c) The Company shall, from and after the date of this Agreement and
to and including the Effective Time, and the Surviving Corporation shall, for
six years from the Effective Time, maintain in effect the current directors' and
officers' liability insurance policies maintained by the Company (provided that
the Surviving Corporation may substitute therefor policies of at least the same
coverage and amounts containing terms and conditions which are no less
advantageous to such officers and directors so long as substitution does not
result in gaps or lapses in coverage) with respect to matters occurring prior to
the Effective Time; provided, however, that in no event shall the Surviving
-------- -------
Corporation be required to expend pursuant to this Section 6.07(c) more than an
amount per year equal to 200% of current annual premiums paid by the Company for
such insurance (which premiums the Company represents and warrants to be
approximately $700,000 in the aggregate) and, in the event the cost of such
coverage shall exceed that amount, the Surviving Corporation shall purchase as
much coverage as possible for such amount.
(d) In the event the Company or the Surviving Corporation or any of
their respective successors or assigns (i) consolidates with or merges into any
other person and shall not be the continuing or surviving corporation or entity
of such consolidation or merger or (ii) transfers all or substantially all of
its properties and assets to any person, then, and in each such case, proper
provision shall be made so that the successors and assigns of the Company or the
Surviving Corporation, as the case may be, or at Parent's option, Parent, shall
assume the obligations set forth in this Section 6.07.
<PAGE>
34
(e) The By-laws of the Surviving Corporation and each of its
Subsidiaries shall contain the provisions with respect to indemnification and
advancement of expenses set forth in the By-laws of the Company on the date of
this Agreement, and such provisions shall not be amended, repealed or otherwise
modified for a period of six years after the Effective Time in any manner that
would affect adversely the rights thereunder of individuals who at any time from
and after the date of this Agreement and to and including the Effective Time
were directors, officers, employees, fiduciaries or agents of the Company or any
of its Subsidiaries in respect of actions or omissions occurring at or prior to
the Effective Time (including, without limitation, the transactions contemplated
by this Agreement), unless such modification is required by law. From and after
the Purchaser's Election Date, the Company shall not amend, repeal or otherwise
modify the indemnification and advancement of expenses provisions of the By-laws
of the Company or the indemnification and advancement of expenses provisions in
the By-laws of any of the Company's Subsidiaries in any manner that would
adversely affect the rights thereunder of individuals who at any time from and
after the date of this Agreement and to and including the Effective Time were
directors, officers, employees, fiduciaries or agents of the Company or any of
its Subsidiaries in respect of actions or omissions occurring at or prior to the
Effective Time (including, without limitation, the matters contemplated by this
Agreement), unless such modification is required by law.
(f) The obligations of the Company or the Surviving Corporation under
this Section 6.07 shall not be terminated or modified in such a manner as to
adversely affect any director, officer, employee, fiduciary and agent to whom
this Section 6.07 applies without the consent of each affected director,
officer, employee, fiduciary and agent (it being expressly agreed that the
directors, officers, employees, fiduciaries and agents to whom this Section 6.07
applies shall be third-party beneficiaries of this Section 6.07).
(g) In the event that the Company or the Surviving Corporation should
fail, at any time from and after the Purchaser's Election Date, to comply with
any of the foregoing obligations set forth in this Section 6.07, for any reason,
Parent shall be responsible therefor and hereby agrees to perform such
obligations unconditionally without regard to any defense or other basis for
nonperformance which the Company or the Surviving Corporation may have or claim
(except as would be prohibited by applicable Delaware Law), it being the
intention of this subsection (g) that the officers, directors, employees,
fiduciaries and agents of the Company and its Subsidiaries shall be fully
indemnified and that the provisions of this subsection (g) be a primary
obligation of Parent and not merely a guarantee by Parent of the obligations of
the Company or Purchaser.
(h) Parent and Purchaser understand that the Company has entered into
contractual indemnification arrangements with each of its current directors and
executive officers.
<PAGE>
35
SECTION 6.08. Notification of Certain Matters. The Company shall
-------------------------------
give prompt notice to Parent, and Parent shall give prompt notice to the
Company, of (i) the occurrence, or non-occurrence, of any event the occurrence,
or non-occurrence, of which would be likely to cause any representation or
warranty contained in this Agreement to be untrue or inaccurate and (ii) any
failure of the Company, Parent or Purchaser, as the case may be, to comply with
or satisfy any covenant, condition or agreement to be complied with or satisfied
by it hereunder; provided, however, that the delivery of any notice pursuant to
-------- -------
this Section 6.08 shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
SECTION 6.09. Further Action; Reasonable Best Efforts. Upon the
---------------------------------------
terms and subject to the conditions hereof, each of the parties hereto shall (i)
make promptly its respective filings, and thereafter make any other required
submissions, under the HSR Act with respect to the Transactions, (ii) use its
reasonable best efforts to take, or cause to be taken, all appropriate action,
and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
Transactions, including, without limitation, using its reasonable best efforts
to obtain all licenses, permits (including, without limitation, Environmental
Permits), consents, approvals, authorizations, qualifications and orders of
governmental authorities and parties to contracts with the Company and the
Subsidiaries as are necessary for the consummation of the Transactions and to
fulfill the conditions to the Offer and the Merger and (iii) except as
contemplated by this Agreement, use its reasonable best efforts not to take any
action, or enter into any transaction, which would cause any of its
representations or warranties contained in this Agreement to be untrue or result
in a breach of any covenant made by it in this Agreement. Without limiting the
generality of the foregoing, the Company shall promptly provide Parent with all
information Parent may reasonably request in connection with the preparation of
a Shareholders' Circular to be delivered to the shareholders of Parent prior to
the Parent Stockholders meeting. In case at any time after the Effective Time
any further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of each party to this Agreement
then in office shall use their reasonable best efforts to take all such action.
SECTION 6.10. Public Announcements. Parent and the Company shall
--------------------
consult with each other before issuing any press release or otherwise making any
public statements with respect to this Agreement or the Transactions and shall
not issue any such press release or make any such public statement prior to such
consultation, except as may be required by law or any listing agreement with a
national securities exchange to which Parent or the Company is a party.
SECTION 6.11. Parent Guarantee. Parent agrees to take all action
----------------
necessary to cause Purchaser to perform all of Purchaser's, and the Surviving
Corporation to perform all of the Surviving Corporation's, agreements, covenants
and obligations under this
<PAGE>
36
Agreement and to consummate the Offer and the Merger on the terms and conditions
set forth in this Agreement. Parent shall be liable for any breach of any
representation, warranty, covenant or agreement of Purchaser and for any breach
of this covenant.
SECTION 6.12. Interested Stockholder. The parties agree that (i) no
----------------------
representation and warranty made by the Company shall be deemed to be untrue nor
shall the Company be deemed to be in breach of any such representation or
warranty and (ii) the Company shall not be deemed in breach of any covenant or
agreement contained herein, in each case to the extent that any such breach or
failure results directly or indirectly, from the application to the Transactions
of Section 203 of Delaware Law. In addition, the parties agree that neither
Parent nor Purchaser shall be entitled to assert the failure of any condition to
the consummation of the Offer or the Merger, where the failure to satisfy such
conditions results, directly or indirectly, from the application to the
Transactions of Section 203 of Delaware Law.
ARTICLE VII
CONDITIONS TO THE MERGER
------------------------
SECTION 7.01. Conditions to the Merger. The respective obligations
------------------------
of each party to effect the Merger shall be subject to the satisfaction at or
prior to the Effective Time of the following conditions and only the following
conditions:
(a) Stockholder Approval. This Agreement and the Merger shall have
--------------------
been approved and adopted by the affirmative vote of the stockholders of
the Company to the extent required by Delaware Law (including Section 203
thereof) and the Certificate of Incorporation of the Company;
(b) HSR Act. Any waiting period (and any extension thereof)
-------
applicable to the consummation of the Merger under the HSR Act shall have
expired or been terminated;
(c) No Order. No foreign, United States or state governmental
--------
authority or other agency or commission or foreign, United States or state
court of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any law, rule, regulation, executive order, decree,
injunction or other order (whether temporary, preliminary or permanent)
which is then in effect and has the effect of making the acquisition of
Shares by Parent or Purchaser or any affiliate of either of them illegal or
otherwise preventing or prohibiting consummation of the Transactions (other
than Section 203 of Delaware Law); and
<PAGE>
37
(d) Offer. Purchaser or its permitted assignee shall have purchased
-----
all Shares validly tendered and not withdrawn pursuant to the Offer;
provided, however, that neither Parent nor Purchaser shall be entitled to
-------- -------
assert the failure of this condition if, in breach of this Agreement or the
terms of the Offer, Purchaser fails to purchase any Shares validly tendered
and not withdrawn pursuant to the Offer.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
---------------------------------
SECTION 8.01. Termination. This Agreement may be terminated and the
-----------
Merger and the other Transactions may be abandoned at any time prior to the
Effective Time, notwithstanding any requisite approval and adoption of this
Agreement and the transactions contemplated hereby by the stockholders of the
Company:
(a) By mutual written consent duly authorized by the Boards of
Directors of Parent, Purchaser and the Company prior to Purchaser's
Election Date; or
(b) By Parent, Purchaser or the Company if (i) the Effective Time
shall not have occurred on or before the later of (x) September 30, 1996
and (y) 90 days following the date on which Parent or any of its
subsidiares or affiliates is no longer subject to the restrictions set
forth in Section 203 of Delaware Law; provided, however, that the right
-------- -------
to terminate this Agreement under this Section 8.01(b) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the
Effective Time to occur on or before such date or (ii) any court of
competent jurisdiction in the United States or other governmental authority
shall have issued an order, decree, ruling or taken any other action
restraining, enjoining or otherwise prohibiting the Merger and such
order, decree, ruling or other action shall have become final and
nonappealable; or
(c) By Parent if (i) due to an occurrence or circumstance that
results in a failure to satisfy any condition set forth in Annex A hereto,
Purchaser shall have (A) failed to commence the Offer within 10 days
following the date of this Agreement, (B) terminated the Offer without
having accepted any Shares for payment thereunder or (C) failed to pay for
Shares pursuant to the Offer within 90 days following the commencement of
the Offer, unless any such failure listed above shall have been caused by
or resulted from the failure of Parent or Purchaser to perform in any
material respect any material covenant or agreement of either of them
contained in this Agreement or the material breach by Parent or Purchaser
of any material representation or warranty of either of them contained in
this Agreement or (ii) prior
<PAGE>
38
to the purchase of Shares pursuant to the Offer, the Board or any committee
thereof shall have withdrawn or modified in a manner adverse to Purchaser
or Parent its approval or recommendation of the Offer, this Agreement, the
Merger or any other Transaction or shall have recommended another merger,
consolidation, business combination with, or acquisition of, the Company
or its assets or another tender offer or exchange offer for Shares, or
shall have resolved to do any of the foregoing or shall have rescinded (or
resolved to rescind) its determination that the Offer as a "Permitted
Offer" (as defined in the Rights Agreement); or
(d) By the Company, upon approval of the Board, if (i) Purchaser
shall have (A) failed to commence the Offer within 10 days following the
date of this Agreement, (B) terminated the Offer without having accepted
any Shares for payment thereunder or (C) failed to pay for Shares pursuant
to the Offer within 90 days following the commencement of the Offer, unless
such failure to pay for Shares shall have been caused by or resulted from
the failure of the Company to satisfy the conditions set forth in
paragraphs (f) or (g) of Annex A or (ii) prior to the purchase of Shares
pursuant to the Offer, the Board shall have withdrawn or modified in a
manner adverse to Purchaser or Parent its approval or recommendation of the
Offer, this Agreement or the Merger in order to approve the execution by
the Company of a definitive agreement providing for the acquisition of the
Company or its assets by merger or other business combination or in order
to approve a tender offer or exchange offer for Shares by a third party, in
either case, as determined by the Board in the exercise of its good faith
judgment and after consultation with its legal counsel and financial
advisors, on terms more favorable to the Company's stockholders than the
Offer and the Merger taken together; provided, however, that such
-------- -------
termination under this clause (ii) shall not be effective until the Company
has made payment to Parent of the Fee (as hereinafter defined) required to
be paid pursuant to Section 8.03(a) and has deposited with a mutually
acceptable escrow agent $20 million for reimbursement to Parent and
Purchaser of Expenses (as hereinafter defined).
SECTION 8.02. Effect of Termination. In the event of the termination
---------------------
of this Agreement pursuant to Section 8.01, this Agreement shall forthwith
become void, and there shall be no liability on the part of any party hereto,
except as set forth in Sections 8.03 and 9.01, and nothing herein shall relieve
any party from liability for any breach hereof.
SECTION 8.03. Fees and Expenses. (a) In the event that:
-----------------
(i) any person (including, without limitation, the Company or any
affiliate thereof), other than Parent or any affiliate of Parent, shall
have become the beneficial owner of more than 15% of the then outstanding
Shares and this Agreement shall have been terminated pursuant to Section
8.01 and within 12 months of such termination a Third Party Acquisition (as
defined hereinafter) shall occur; or
<PAGE>
39
(ii) any person shall have commenced, publicly proposed or
communicated to the Company a proposal that is publicly disclosed for a
tender or exchange offer for more than 50% (or which, assuming the maximum
amount of securities which could be purchased, would result in any person
beneficially owning more than 50%) of the then outstanding Shares or
otherwise for the direct or indirect acquisition of the Company or all or
substantially all of its assets for per Share consideration having a value
greater than the Per Share Amount and (x) the Offer shall have remained
open for at least 20 business days, (y) the Minimum Condition shall not
have been satisfied and (z) this Agreement shall have been terminated
pursuant to Section 8.01; or
(iii) this Agreement is terminated pursuant to Section 8.01(c)(ii)
or 8.01(d)(ii);
then, in any such event, the Company shall pay Parent promptly (but in no
event later than one business day after the first of such events shall have
occurred) a fee of $35 million (the "Fee"), which amount shall be payable
---
in immediately available funds, plus all Expenses (as hereinafter defined).
(b) "Expenses" means all out-of-pocket expenses and fees up to $20
--------
million in the aggregate (including, without limitation, fees and expenses
payable to all banks, investment banking firms, other financial institutions and
other persons and their respective agents and counsel for arranging, committing
to provide or providing any financing for the Transactions or structuring the
Transactions and all fees of counsel, accountants, experts and consultants to
Parent and Purchaser, and all printing and advertising expenses) actually
incurred or accrued by either of them or on their behalf in connection with the
Transactions, including, without limitation, the financing thereof, and actually
incurred or accrued by banks, investment banking firms, other financial
institutions and other persons and assumed by Parent and Purchaser in connection
with the negotiation, preparation, execution and performance of this Agreement,
the structuring and financing of the Transactions and any financing commitments
or agreements relating thereto.
(c) Except as set forth in this Section 8.03, all costs and expenses
incurred in connection with this Agreement and the Transactions shall be paid by
the party incurring such expenses, whether or not any Transaction is
consummated.
(d) In the event that the Company shall fail to pay the Fee or any
Expenses when due, the term "Expenses" shall be deemed to include the costs and
expenses actually incurred or accrued by Parent and Purchaser (including,
without limitation, fees and expenses of counsel) in connection with the
collection under and enforcement of this Section 8.03, together with interest on
such unpaid Fee and Expenses, commencing on the date that the Fee or such
Expenses became due, at a rate equal to the rate of interest publicly announced
<PAGE>
40
by Citibank, N.A., from time to time, in the City of New York, as such bank's
Prime Rate plus 1.00%.
(e) "Third Party Acquisition" means the occurrence of any of the
-----------------------
following events: (i) the acquisition of the Company by merger, consolidation
or other business combination transaction by any person other than Parent,
Purchaser or any affiliate thereof (a "Third Party"); (ii) the acquisition by
-----------
any Third Party of all or substantially all of the total assets of the Company
and its Subsidiaries, taken as a whole; (iii) the acquisition by a Third Party
of 50% or more of the outstanding Shares whether by tender offer, exchange offer
or otherwise; (iv) the adoption by the Company of a plan of liquidation or the
declaration or payment of an extraordinary dividend; or (v) the repurchase by
the Company or any of its Subsidiaries of 50% or more of the outstanding Shares.
SECTION 8.04. Amendment. Subject to the limitations set forth in
---------
Section 6.03(c), this Agreement may be amended by the parties hereto by action
taken by or on behalf of their respective Boards of Directors at any time prior
to the Effective Time; provided, however, that no amendment may be made which
-------- -------
(i) reduces the amount or changes the type of consideration into which each
Share shall be converted upon consummation of the Merger, (ii) imposes
conditions to the Merger in addition to those set forth in Section 7.01 or
(iii) would otherwise amend or change the terms and conditions of the Merger in
any manner materially adverse to the holders of Shares. This Agreement may not
be amended except by an instrument in writing signed by the parties hereto.
SECTION 8.05. Waiver. Subject to the limitations set forth in
------
Section 6.03(c), at any time prior to the Effective Time, any party hereto may
(i) extend the time for the performance of any obligation or other act of any
other party hereto, (ii) waive any inaccuracy in the representations and
warranties contained herein or in any document delivered pursuant hereto and
(iii) waive compliance with any agreement or condition contained herein. Any
such extension or waiver shall be valid if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
ARTICLE IX
GENERAL PROVISIONS
------------------
SECTION 9.01. Non-Survival of Representations, Warranties and
-----------------------------------------------
Agreements. The representations, warranties and agreements in this Agreement
- ----------
shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Section 8.01, as the case may be, except that (i) the
representations and warranties of the Company set forth in Article III shall
terminate on the Purchaser's Election Date, (ii) the agreements set forth in
Articles II and IX and (iii) Sections 6.06 and 6.07 shall survive the
<PAGE>
41
Effective Time indefinitely and those set forth in Sections 6.04(c) and 8.03 and
Article IX shall survive termination indefinitely.
SECTION 9.02. Notices. All notices, requests, claims, demands and
-------
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in person, by cable,
telecopy, facsimile, telegram or telex or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 9.02):
if to Parent or Purchaser:
(i) Cadbury Schweppes plc
25 Berkeley Square
London, England W1X 6HT
Facsimile No.: (011) 71-830-5221
Attention: Company Secretary
(ii) CBI Holdings Inc.
6 High Ridge Park
Stamford, CT 06905
Facsimile No.: (203) 968-7957
Attention: General Counsel
with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Facsimile No.: (212) 848-7179
Attention: Alfred J. Ross, Jr., Esq.
if to the Company:
Dr Pepper/Seven-Up Companies, Inc.
8144 Walnut Hill Lane
Dallas, Texas 75231-4372
Facsimile No.: (214) 360-7981
Attention: General Counsel
<PAGE>
42
with a copy to:
Baker & Botts, L.L.P.
2001 Ross Avenue
Dallas, Texas 75201-2980
Facsimile No.: (214) 953-6503
Attention: Andrew M. Baker, Esq.
SECTION 9.03. Certain Definitions. For purposes of this Agreement,
-------------------
the term:
(a) "affiliate" of a specified person means a person who directly or
---------
indirectly through one or more intermediaries controls, is controlled by,
or is under common control with, such specified person;
(b) "beneficial owner" with respect to any Shares means a person who
----------------
shall be deemed to be the beneficial owner of such Shares (i) which such
person or any of its affiliates or associates (as such term is defined in
Rule 12b-2 promulgated under the Exchange Act) beneficially owns, directly
or indirectly, (ii) which such person or any of its affiliates or
associates has, directly or indirectly, (A) the right to acquire (whether
such right is exercisable immediately or subject only to the passage of
time), pursuant to any agreement, arrangement or understanding or upon the
exercise of consideration rights, exchange rights, warrants or options, or
otherwise, or (B) the right to vote pursuant to any agreement, arrangement
or understanding or (iii) which are beneficially owned, directly or
indirectly, by any other persons with whom such person or any of its
affiliates or associates or person with whom such person or any of its
affiliates or associates has any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of any Shares;
(c) "business day" means any day on which the principal offices of
------------
the SEC in Washington, D.C. are open to accept filings, or, in the case of
determining a date when any payment is due, any day on which banks are not
required or authorized to close in the City of New York;
(d) "control" (including the terms "controlled by" and "under common
------- ------------- ------------
control with") means the possession, directly or indirectly or as trustee
------------
or executor, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of
voting securities, as trustee or executor, by contract or credit
arrangement or otherwise;
<PAGE>
43
(e) "person" means an individual, corporation, partnership, limited
------
partnership, syndicate, person (including, without limitation, a "person"
as defined in Section 13(d)(3) of the Exchange Act), trust, association or
entity or government, political subdivision, agency or instrumentality of a
government; and
(f) "subsidiary" or "subsidiaries" of the Company, the Surviving
---------- ------------
Corporation, Parent or any other person means an affiliate controlled by
such person, directly or indirectly, through one or more intermediaries.
SECTION 9.04. 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 and effect so long as the economic or legal
substance of the Transactions is not affected in any manner materially 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 a mutually acceptable manner in
order that the Transactions be consummated as originally contemplated to the
fullest extent possible.
SECTION 9.05. Entire Agreement; Assignment. This Agreement
----------------------------
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes, except as set forth in Section 6.04(c), all prior
agreements and undertakings, both written and oral, among the parties, or any of
them, with respect to the subject matter hereof. This Agreement shall not be
assigned by operation of law or otherwise, except that Parent and Purchaser may
assign all or any of their rights and obligations hereunder to any wholly owned
subsidiary of Parent provided that no such assignment shall relieve the
assigning party of its obligations hereunder if such assignee does not perform
such obligations.
SECTION 9.06. Parties in Interest. This Agreement shall be binding
-------------------
upon and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement, other than Section 6.07 (which is intended to be for the
benefit of the persons covered thereby and may be enforced by such persons).
SECTION 9.07. Specific Performance. The parties hereto agree that
--------------------
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
<PAGE>
44
SECTION 9.08. Governing Law. Except to the extent that Delaware Law
-------------
applies to the Transactions, this Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York applicable to contracts
executed in and to be performed in that State. All actions and proceedings
arising out of or relating to this Agreement shall be heard and determined in
any Delaware state or federal court sitting in the City of Wilmington.
SECTION 9.09. Headings. The descriptive headings contained in this
--------
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 9.10. Counterparts. This Agreement may be executed in one or
------------
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
<PAGE>
45
IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
CADBURY SCHWEPPES PLC
By /s/ Henry A. Udow
-----------------------------------
Name: Henry A. Udow
Title: Legal Director
DP/SU ACQUISITION INC.
Attest:
/s/ Alfred J. Ross, Jr. By /s/ John F. Brock
- -------------------------- -----------------------
Name: John F. Brock
Title: President
DR PEPPER/SEVEN-UP COMPANIES, INC.
Attest:
/s/ Douglas Brent By /s/ Ira M. Rosenstein
- ------------------------- -----------------------
Name: Ira M. Rosenstein
Title: Executive Vice President
<PAGE>
ANNEX A
-------
Conditions to the Offer
-----------------------
Notwithstanding any other provision of the Offer, Purchaser shall not
be required to accept for payment or pay for any Shares tendered pursuant to the
Offer, and may terminate or amend the Offer and may postpone the acceptance for
payment of and payment for Shares tendered, if (i) the Minimum Condition shall
not have been satisfied, (ii) any applicable waiting period under the HSR Act
shall not have expired or been terminated prior to the expiration of the Offer
after 30 days from the commencement of the Offer or (iii) at any time on or
after the date of this Agreement, and prior to the acceptance for payment of
Shares, any of the following conditions shall exist:
(a) there shall have been instituted or be pending any action or
proceeding brought by any governmental, administrative or regulatory
authority or agency, domestic or foreign, before any court or governmental,
administrative or regulatory authority or agency, domestic or foreign, (i)
challenging or seeking to make illegal, materially delay or otherwise
directly or indirectly restrain or prohibit or make materially more costly
the making of the Offer, the acceptance for payment of, or payment for, any
Shares by Parent, Purchaser or any other affiliate of Parent pursuant to
the Offer, or the consummation of any other Transaction, or seeking to
obtain material damages in connection with any Transaction; (ii) seeking to
prohibit or limit materially the ownership or operation by the Company,
Parent or any of their subsidiaries of all or any material portion of the
business or assets of the Company, Parent or any of their subsidiaries, or
to compel the Company, Parent or any of their subsidiaries to dispose of or
hold separate all or any material portion of the business or assets of the
Company, Parent or any of their subsidiaries, as a result of the
Transactions; (iii) seeking to impose or confirm limitations on the ability
of Parent, Purchaser or any other affiliate of Parent to exercise
effectively full rights of ownership of any Shares, including, without
limitation, the right to vote any Shares acquired by Purchaser pursuant to
the Offer, or otherwise on all matters properly presented to the Company's
stockholders, including, without limitation, the approval and adoption of
this Agreement and the transactions contemplated hereby; or (iv) seeking to
require divestiture by Parent, Purchaser or any other affiliate of Parent
of any Shares; other than, in each of the foregoing cases under this clause
(a), such actions or proceedings which result, directly or indirectly, from
the application of Section 203 of Delaware Law;
(b) there shall have been issued any injunction, order or decree by
any court or governmental, administrative or regulatory authority or
agency, domestic or foreign, resulting from any action or proceeding
brought by any person other than any governmental, administrative or
regulatory authority or agency, domestic or foreign,
<PAGE>
A-2
which (i) restrains or prohibits the making of the Offer or the
consummation of any other Transaction; (ii) prohibits or limits ownership
or operation by the Company, Parent or Purchaser of all or any material
portion of the business or assets of the Company, taken as a whole, Parent
or any of their subsidiaries, or compels the Company, Parent or any of
their subsidiaries to dispose of or hold separate all or any material
portion of the business or assets of the Company, Parent or any of their
subsidiaries, in each case as a result of the Transactions; (iii) imposes
limitations on the ability of Parent or Purchaser to exercise effectively
full rights of ownership of any Shares, including, without limitation, the
right to vote any Shares acquired by Purchaser pursuant to the Offer, or
otherwise on all matters properly presented to the Company's stockholders,
including, without limitation, the approval and adoption of this Agreement
and the Transactions; (iv) requires divestiture by Parent or Purchaser of
any Shares; other than, in each of the foregoing cases under this
clause (b), such injunctions, orders or decrees which result, directly or
indirectly, from the application of Section 203 of Delaware Law;
(c) there shall have been any action taken, or any statute, rule,
regulation, order or injunction enacted, entered, enforced, promulgated,
amended, issued or deemed applicable to (i) Parent, the Company or any
subsidiary or affiliate of Parent or the Company or (ii) any Transaction,
by any legislative body, court, government or governmental, administrative
or regulatory authority or agency, domestic or foreign, in the case of both
(i) and (ii) other than (A) the routine application of the waiting period
provisions of the HSR Act to the Offer, the Stockholders Agreement or the
Merger, and (B) the application of Section 203 of Delaware Law, in each
case which results in any of the consequences referred to in clauses (i)
through (iv) of paragraph (b) above;
(d) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities of (x) the Company on the
New York Stock Exchange or (y) Parent on the London Stock Exchange, (ii)
any decline, measured from the date hereof, in the Standard & Poor's 500
Index or FTSE 100 Index by an amount in excess of 20%, (iii) a currency
moratorium on the exchange markets in London or New York City, (iv) a
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States or the United Kingdom, (v) any
limitation (whether or not mandatory) by any government or governmental,
administrative or regulatory authority or agency, domestic or foreign, on
the extension of credit by banks or other lending institutions, (vi) a
commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United States
or the United Kingdom or (vii) in the case of any of the foregoing existing
on the date hereof, a material acceleration or worsening thereof;
<PAGE>
A-3
(e) (i) it shall have been publicly disclosed or Purchaser shall have
otherwise learned that beneficial ownership (determined for the purposes of
this paragraph as set forth in Rule 13d-3 promulgated under the Exchange
Act) of 15% or more of the then outstanding Shares has been acquired by any
person, other than Parent or any of its affiliates or (ii) (A) the Board
shall have withdrawn or modified in a manner adverse to Parent or Purchaser
the approval or recommendation of the Offer, the Merger or this Agreement
or approved or recommended any takeover proposal or any other acquisition
of Shares other than the Offer and the Merger or (B) the Board shall have
resolved to do any of the foregoing;
(f) any representation and warranty of the Company in this Agreement
shall not be true and correct and the failure to be true and correct has a
Material Adverse Effect; provided, however, in determining whether a
-------- -------
Material Adverse Effect has occurred, any qualification as to materiality
contained in any such representation and warranty shall be deemed not to
apply;
(g) the Company shall have failed to perform in any material respect
any material obligation or to comply in any material respect with any
material agreement or covenant of the Company to be performed or complied
with by it under this Agreement;
(h) Parent shall not have received the requisite affirmative vote of
the holders of ordinary shares of Parent with respect to the approval of
the Transactions at the Parent Stockholders Meeting;
(i) this Agreement shall have been terminated in accordance with its
terms; or
(j) Purchaser and the Company shall have agreed that Purchaser shall
terminate the Offer or postpone the acceptance for payment of or payment
for Shares thereunder;
The foregoing conditions are for the sole benefit of Purchaser and
Parent and may be asserted by Purchaser or Parent regardless of the
circumstances giving rise to any such condition or may be waived by Purchaser or
Parent in whole or in part at any time and from time to time in their sole
discretion. The failure by Parent or Purchaser at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right; the waiver
of any such right with respect to particular facts and other circumstances shall
not be deemed a waiver with respect to any other facts and circumstances; and
each such right shall be deemed an ongoing right that may be asserted at any
time and from time to time.
<PAGE>
ANNEX B
-------
Employee Benefits
-----------------
(a) ERISA Plans. Parent agrees to maintain each of the Company's
-----------
existing employee benefit plans as that term is defined in Section 3(3) of ERISA
(excluding any equity or incentive compensation plans or the severance plans
referred to in (c) below), until at least December 31, 1995. For 1996, Parent
will provide the Company's employees with plans or programs providing benefits
which in the aggregate are not less favorable to such employees than the
benefits provided to them under existing employee benefit plans of the Company.
(b) Incentive Plans; Options. Parent agrees that the Company's
------------------------
employees will continue to participate in the Company's existing incentive
compensation plans until December 31, 1995 on the same basis as they are now
participating. For 1996, the employees will participate in any incentive plan
of Parent or any of its subsidiaries in effect as of the date hereof or created
thereafter, on substantially the same terms and subject to substantially the
same conditions and criteria as similarly situated U.S. employees of Parent or
any of its subsidiaries. In addition, the Company's employees will also
participate in 1995 and 1996 in any employee stock option plan of Parent or any
of its subsidiaries in effect as of the date hereof or created thereafter, also
on such substantially similar terms, conditions and criteria.
(c) Severance; Outplacement. Parent agrees that until two years
-----------------------
after the Tender Offer Acceptance Date the Surviving Corporation will provide
(i) severance payments consistent with the existing Company Severance Benefits
Program for Employees to all officers (except the Chairman of the Board) and
employees, and (ii) reasonable outplacement services for all officers of the
Company and its subsidiaries and any divisional managers employed by the Company
or its subsidiaries at the Tender Offer Acceptance Date, in each case, who are
terminated without cause (as that term is defined in the Company's Severance
Benefit Program for Employees), prior to such date.
(d) Individual Agreements. The Severance Agreements between the
---------------------
Company and each of Messrs. Albers and Rosenstein shall be amended to provide
that amounts payable thereunder upon termination after a Change of Control (as
defined thereunder) will be payable upon termination by the Company (or the
Surviving Corporation) without cause (as defined thereunder) or by the employee
for any reason.
(e) Full Vesting. Parent commits that all Pension and Profit Sharing
------------
Plans of the Company shall be amended to provide that all participants therein
as of the Tender Offer Acceptance Date shall be fully vested in their benefits
thereunder as of such date.
Exhibit (c)(2)
STOCKHOLDERS AGREEMENT, dated as of January 25, 1995 (this
"Agreement"), between DP/SU ACQUISITION INC., a Delaware corporation
---------
("Purchaser") and an indirect wholly owned subsidiary of CADBURY SCHWEPPES plc,
---------
a company organized under the laws of England ("Parent"), and the persons listed
------
on Schedule A hereto (each, individually, a "Stockholder" and, collectively, the
-----------
"Stockholders").
------------
WHEREAS, Parent and Purchaser have entered into an Agreement and Plan
of Merger, dated as of the date hereof (the "Merger Agreement"; capitalized
----------------
terms not defined in this Agreement have the meanings ascribed to them in the
Merger Agreement), with Dr Pepper/Seven-Up Companies, Inc., a Delaware
corporation (the "Company"), which provides, among other things, upon the terms
-------
and subject to the conditions thereof, for the acquisition by Purchaser of all
the outstanding shares of Common Stock, par value $.01 per share, of the Company
("Company Common Stock") through (a) a tender offer (the "Offer") for all shares
-------------------- -----
of Company Common Stock for $33.00 per share net to the sellers thereof in cash
(the "Per Share Amount") and (b) a second-step merger pursuant to which
----------------
Purchaser will merge with and into the Company (the "Merger") and all
------
outstanding shares of Company Common Stock (other than shares of Company Common
Stock held by Purchaser or Parent or any direct or indirect wholly owned
subsidiary of Parent or the Company and shares of Company Common Stock held in
the treasury of the Company) will be converted into the right to receive the Per
Share Amount in cash; and
WHEREAS, as of the date hereof, each Stockholder owns (beneficially or
of record) the number of shares of Company Common Stock set forth opposite such
Stockholder's name on Schedule A hereto; and
WHEREAS, as a condition to the willingness of Parent and Purchaser to
enter into the Merger Agreement, Parent and Purchaser have required that the
Stockholders agree, and in order to induce Parent and Purchaser to enter into
the Merger Agreement, the Stockholders have agreed, severally and not jointly,
to tender pursuant to the Offer, in accordance with the terms of this Agreement,
all the shares of Company Common Stock now owned (beneficially or of record) and
which may hereafter be acquired by each Stockholder (the "Shares").
------
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
<PAGE>
2
ARTICLE I
COVENANTS OF THE STOCKHOLDERS
-----------------------------
SECTION 1.01. No Disposition or Encumbrance of Shares. Except as
---------------------------------------
contemplated by Section 1.03 hereof, each Stockholder hereby covenants and
agrees, severally and not jointly, that such Stockholder shall not, and shall
not offer or agree to, sell, transfer, tender, assign, hypothecate or otherwise
dispose of, or create or permit to exist any security interest, lien, claim,
pledge, option, right of first refusal, agreement, limitation on such
Stockholder's voting rights, charge or other encumbrance of any nature
whatsoever with respect to the Shares now owned or that may hereafter be
acquired by such Stockholder at any time prior to the earlier of (x) the
purchase by Purchaser of all shares of Company Common Stock validly tendered and
not withdrawn pursuant to the Offer or (y) the termination of the Offer by the
Purchaser.
SECTION 1.02. No Solicitation of Transactions. Each Stockholder
-------------------------------
shall not, directly or indirectly, through any agent or representative or
otherwise, solicit, initiate or encourage the submission of any proposal or
offer from any individual, corporation, partnership, limited partnership,
limited liability company, syndicate, person (including, without limitation, a
"person" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended), trust, association or entity or government, political subdivision,
agency or instrumentality of a government (collectively, other than Purchaser
and any affiliate of Purchaser, a "Person") relating to (i) any acquisition or
------
purchase of all or any of the Shares or (ii) any acquisition or purchase of all
or (other than in the ordinary course of business) any substantial portion of
the assets of, or any equity interest in, the Company or any Material Subsidiary
or any business combination with the Company or any Subsidiary or, subject to
their fiduciary duties as directors of the Company and as contemplated in
Section 6.05 of the Merger Agreement, participate in any negotiations regarding,
or furnish to any Person any information with respect to, or otherwise cooperate
in any way with, or assist or participate in or facilitate or encourage, any
effort or attempt by any Person to do or seek any of the foregoing. Such
Stockholder immediately shall cease and cause to be terminated all existing
discussions or negotiations of such Stockholder and his agents or other
representatives with any Person conducted heretofore with respect to any of the
foregoing. Such Stockholder shall notify Purchaser promptly if any such
proposal or offer, or any inquiry or contact with any Person with respect
thereto, is made.
SECTION 1.03. Agreement to Tender the Shares Pursuant to the Offer.
----------------------------------------------------
Each Stockholder agrees to validly tender and not withdraw pursuant to the Offer
all the Shares now owned (beneficially or of record) or that may hereafter be
acquired by such Stockholder. Notwithstanding the foregoing, such Stockholder
may withdraw such Shares from the Offer in the event that (a) the Minimum
Condition is not satisfied in the Offer (including in the determination of
whether the Minimum Condition is satisfied the Shares
<PAGE>
3
tendered by each Stockholder) in which event the Shares of such Stockholders
shall be deemed to be withdrawn without any action on the part of any party
hereto or any other person or (b) the Board of Directors of the Company or any
committee thereof shall have withdrawn or modified in a manner adverse to
Purchaser or Parent its approval or recommendation of the Offer, the Merger or
the Merger Agreement.
ARTICLE II
MISCELLANEOUS
-------------
SECTION 2.01. Expenses. Except as otherwise provided herein, all
--------
costs and expenses incurred in connection with the transactions contemplated by
this Agreement shall be paid by the party incurring such expenses.
SECTION 2.02. Further Assurances. Each Stockholder and Purchaser
------------------
will execute and deliver all such further documents and instruments and take all
such further action as may be necessary in order to consummate the transactions
contemplated hereby.
SECTION 2.03. Specific Performance. The parties hereto agree that
--------------------
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
SECTION 2.04. Entire Agreement. This Agreement constitutes the
----------------
entire agreement between Purchaser and the Stockholders with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
both written and oral, between Purchaser and each Stockholder with respect to
the subject matter hereof.
SECTION 2.05. Assignment. This Agreement shall not be assigned by
----------
operation of law or otherwise (other than by will or the laws of descent and
distribution), except that Purchaser may assign all or any of its rights and
obligations hereunder to any wholly owned subsidiary of Parent, provided that no
such assignment shall relieve Purchaser of its obligations hereunder if such
assignee does not perform such obligations.
SECTION 2.06. Parties in Interest. This Agreement shall be binding
-------------------
upon, inure solely to the benefit of, and be enforceable by, the parties hereto
and their successors and permitted assigns. Nothing in this Agreement, express
or implied, is intended to or shall confer upon any other person any right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.
<PAGE>
4
SECTION 2.07. Amendment; Waiver. This Agreement may not be amended
-----------------
except by an instrument in writing signed by the parties hereto. Any party
hereto may (i) extend the time for the performance of any obligation or other
act of any other party hereto, (ii) waive any inaccuracy in the representations
and warranties contained herein or in any document delivered pursuant hereto and
(iii) waive compliance with any agreement or condition contained herein other
than the condition set forth in Section 1.03 with respect to satisfaction of the
Minimum Condition. Any such extension or waiver shall be valid if set forth in
an instrument in writing signed by the party or parties to be bound thereby.
SECTION 2.08. 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 and effect so long as the economic or legal
substance of this Agreement is not affected in any manner materially 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 a mutually acceptable manner in order that the
terms of this Agreement remain as originally contemplated to the fullest extent
possible.
SECTION 2.09. Notices. All notices, requests, claims, demands and
-------
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in person, by cable,
telecopy, telegram or telex or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following addresses
(or at such other address for a party as shall be specified in a notice given in
accordance with this Section 2.09):
if to Purchaser:
DP/SU Acquisition Inc.
c/o CBI Holdings Inc.
6 High Ridge Park
Stamford, CT 06905
Facsimile No.: (203) 968-7957
Attention: General Counsel
with copies to:
Cadbury Schweppes plc
25 Berkeley Square
London, England W1X 6HT
Facsimile No.: (011) 71-830-5221
Attention: Company Secretary
<PAGE>
5
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Facsimile No. (212) 848-7179
Attention: Alfred J. Ross, Jr., Esq.
if to a Stockholder:
c/o Dr Pepper/Seven-Up Companies, Inc.
8144 Walnut Hill Lane
Dallas, Texas 75231-4372
Facsimile No.: (214) 360-7981
Attention: General Counsel
with a copy to:
Baker & Botts, L.L.P.
2001 Ross Avenue
Dallas, Texas 75201-2980
Facsimile No.: (214) 953-6503
Attention: Andrew M. Baker, Esq.
SECTION 2.10. Termination. This Agreement shall terminate upon the
-----------
termination of the Merger Agreement.
SECTION 2.11. Governing Law. This Agreement shall be governed by,
-------------
and construed in accordance with, the laws of the State of Delaware applicable
to contracts executed in and to be performed in that State. All actions and
proceedings arising out of or relating to this Agreement shall be heard and
determined in any Delaware State or federal court sitting in the City of
Wilmington.
SECTION 2.12. Headings. The descriptive headings contained in this
--------
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 2.13. Counterparts. This Agreement may be executed in one or
------------
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
<PAGE>
6
IN WITNESS WHEREOF, Purchaser has caused this Agreement to be executed
by its officer thereunto duly authorized and each Stockholder has duly executed
this Agreement, each as of the date first written above.
DP/SU ACQUISITION INC.
By /s/ John F. Brock
------------------------------------------
Name: John F. Brock
Title: President
THE STOCKHOLDERS:
/s/ John R. Albers
---------------------------------------------
John R. Albers
/s/ Ira M. Rosenstein
---------------------------------------------
Ira M. Rosenstein
/s/ Thomas O. Hicks
---------------------------------------------
Thomas O. Hicks
<PAGE>
SCHEDULE A
Name: Shares:
- ---- ------
John R. Albers 2,049,963
Ira M. Rosenstein 511,649
Thomas O. Hicks 484,030
Exhibit (c)(3)
EXTRACT PRODUCTION AGREEMENT
BY AND AMONG
CADBURY BEVERAGES INC.,
THE SEVEN-UP COMPANY
AND
DR PEPPER COMPANY
<PAGE>
TABLE OF CONTENTS
1. PRODUCTS . . . . . . . . . . . . . . . . . . . . . . . . 1
--------
2. STANDARDS . . . . . . . . . . . . . . . . . . . . . . . 1
---------
3. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . 1
----
4. PRODUCTION . . . . . . . . . . . . . . . . . . . . . . . 2
----------
5. PAYMENT/PRICE . . . . . . . . . . . . . . . . . . . . . 2
-------------
6. ADJUSTMENT OF STANDARDS . . . . . . . . . . . . . . . . 3
-----------------------
7. WASTE TOLERANCE . . . . . . . . . . . . . . . . . . . . 3
---------------
8. MATERIALS AND EQUIPMENT . . . . . . . . . . . . . . . . 3
-----------------------
9. REGULATORY COMPLIANCE . . . . . . . . . . . . . . . . . 3
---------------------
10. TITLE TO PRODUCT . . . . . . . . . . . . . . . . . . . . 3
----------------
11. CONFIDENTIAL INFORMATION . . . . . . . . . . . . . . . . 4
------------------------
12. ADULTERATED/MISBRANDED . . . . . . . . . . . . . . . . . 6
----------------------
13. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . 6
---------------
14. RECORDS AND AUDIT . . . . . . . . . . . . . . . . . . . 7
-----------------
15. FORCE MAJEURE . . . . . . . . . . . . . . . . . . . . . 7
-------------
16. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . 8
-------
17. ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . 8
----------
18. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . 8
-------
19. ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . 8
----------------
20. SEVERABLE CONDITIONS . . . . . . . . . . . . . . . . . . 9
--------------------
21. BINDING AGREEMENT . . . . . . . . . . . . . . . . . . . 9
-----------------
22. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . 9
-------------
EXHIBIT "A"
EXHIBIT "B"
EXHIBIT "C"
<PAGE>
EXTRACT PRODUCTION AGREEMENT
This EXTRACT PRODUCTION AGREEMENT (the "Agreement"), dated
as of April 24, 1992, by and among CADBURY BEVERAGES INC., a
Delaware corporation, having its principal offices in Stamford,
Connecticut ("Company"), THE SEVEN-UP COMPANY, a Delaware
corporation, having its principal offices in Dallas, Texas
("Seven-Up"), and DR PEPPER COMPANY, a Delaware corporation,
having its principal offices located in Dallas, Texas ("Dr
Pepper" and, together with Seven-Up, "Processor").
W I T N E S S E T H:
-------------------
WHEREAS, the Company wishes to have Processor manufacture
and process certain products for the Company and its subsidiaries
at Processor's manufacturing plant (the "Plant") and,
accordingly, in consideration of the promises hereinafter set
forth, the parties hereto agree as follows:
1. PRODUCTS: Subject to the terms and conditions hereof,
--------
the Processor shall prepare, manufacture, process, package and
load for shipping the product(s) (collectively the "Products" and
individually a "Product") of the Company and its subsidiaries
listed in the Manual (as hereinafter defined).
2. STANDARDS: The Processor agrees to produce the
---------
Products in accordance with written formulae, instructions,
specifications, quality assurance standards and policies listed
in the Manufacturing/Technical Manuals (collectively, the
"Manual"), which Manual will be agreed among the parties from
time to time and which will address the operating procedures set
forth in Exhibit A hereto. Any inconsistencies between this
Agreement and the Manual shall be controlled by and determined in
accordance with the provisions of the Manual. The Manual and
this Agreement may be amended from time to time during the term
hereof only by written agreement between the Company and
Processor, which amendment must be signed by the then respective
Presidents of Company and Processor, or Vice President,
Concentrate Manufacturing of Company and Senior Vice President -
Operations of Processor. No course of dealings between Company
and Processor during the term of this Agreement shall be deemed
to amend the terms and conditions contained herein or in the
Manual.
3. TERM: This Agreement shall be effective as of
----
January 1, 1993, and shall, upon such effective date, terminate
and supersede the Extract Production Agreement by and between
Company and Dr Pepper dated May 26, 1989. This Agreement shall
continue for a period of not less than four (4) years; provided,
however, that either party may terminate this Agreement at any
time after December 31, 1996 upon giving not less than twenty-
four (24) months prior written notice of termination to the other
party hereto. Upon the termination of this Agreement, Company
shall purchase from
1
<PAGE>
ingredients purchased solely for Company's Products), packaging and
packaged intermediate Products, at Processor's cost.
4. PRODUCTION: The Company agrees to purchase from the Processor
----------
all of its requirements for the sale of the Products in the United States
during the term of this Agreement. Processor agrees to use its best efforts
to supply the Company's non-United States operations in the event the
Company's plant operations located in Ireland, Canada or Ecuador are disrupted
by force majeure as defined in Section 15 hereof.
5. PAYMENT/PRICE: The manufacturing fee shall be as set
-------------
forth below. Processor shall forward to the Company each month an
invoice showing the payment due for all Products packed during the
preceding month. The Company agrees to pay that invoice with ten (10)
days of receipt of same.
(a) All Products produced on or after January 1, 1993 shall be
subject to the following manufacturing fees:
(i) a "Tolling Charge" as set forth on Exhibit "B" hereto,
which Tolling Charge will be renegotiated as of
December 31, 1996 if the Agreement is still in effect.
(ii) estimated costs for all ingredients. Variances from
standard costs will be provided monthly for Raw
Material, Major Product Ingredients, Packaging and
Commingled Ingredients, as each is defined in the
Manual. Fees paid to Processor will reflect the
standard costs adjusted for variances; and
(iii) all taxes and freight charges paid by Processor in
connection with its performance under the Agreement,
except any such charges as are paid by Company on
behalf of Processor and any taxes based upon
the income of Processor.
(b) Additionally, Company agrees to pay Processor the carrying cost
for owning all raw materials, packaging materials, finished
product and other inventories purchased or held by Processor
under this Agreement for the benefit of Company at the prime
rate publicly announced by Bankers Trust Company, New York, NY,
from time to time, plus one and one-half percent (1 1/2%). In
this regard, Processor agrees to maintain separately from any
other such inventories Processor may have on hand, all raw
materials, packaging materials, finished product and other
inventories for use in the
2
<PAGE>
Products, including any inventories of aspartame or sucralose
supplied by the Company.
6. ADJUSTMENT OF STANDARDS: The Company reserves the
-----------------------
right to alter the packing specifications and formulae of the
Products and the formulae or specifications of the materials it
supplies. If any such alteration results in increased or
decreased costs to Processor, the manufacturing fees described in
Section 5 hereof shall be adjusted upward or downward, as the
case may be, to reflect such actual increase or decrease.
7. WASTE TOLERANCE: In calculating costs of raw
---------------
materials, Processor may allow for actual shrinkage not to exceed
one (1%) per cent of the total cost of raw materials, including
aspartame, used. Any waste in excess of one percent (1%) shall
be at Processor's sole expense. Products rejected as
unacceptable by Company shall not be included in production
figures used to determine excess waste. Processor shall
reimburse the Company for the full cost of any Products produced
by Processor that are unacceptable because of failure of the
Products to meet the standards specified by the Company.
Rejected Products shall be destroyed or disposed of as the
Company may direct at sole expense of Processor.
8. MATERIALS AND EQUIPMENT: The Processor agrees to
-----------------------
supply, at its sole cost and expense, all of the required
equipment and facilities necessary to perform its obligations
under this Agreement. Attached as Exhibit "C" hereto is a list
of equipment located at the Plant but which the parties
acknowledge is and remains the property of the Company.
9. REGULATORY COMPLIANCE: The Processor shall follow
---------------------
good manufacturing practices in the production of the Products
and shall comply with all applicable local, state and federal
laws and regulations governing the production, packaging and
labeling of the Products, as well as applicable environmental or
similar laws governing the handling, transportation and disposal
of all waste or other materials and all applicable laws governing
wages and conditions, workmen's compensation, and transportation
laws. Notwithstanding the foregoing, compliance with all
applicable laws and regulations with respect to materials,
ingredients and formulae furnished by the Company and the
labeling and/or packaging thereof (including any applicable
environmental or similar laws) shall be the sole responsibility
of the Company, and the Company shall save and hold the Processor
harmless from any claim or liability based upon noncompliance
with such laws and regulations, provided such claim or liability
does not arise from acts or omissions of the Processor.
10. TITLE TO PRODUCT: Except for aspartame, for which
----------------
title and risk of loss shall remain with the Company at all
times, title and risk of loss to materials furnished, supplied,
or purchased by Processor pursuant to the provisions of this
Agreement shall remain with Processor until said materials are
converted into the final Products and delivered to the Company or
carrier. Title to
3
<PAGE>
Products and risk of loss thereto shall pass to the Company at
the time of delivery and acceptance of Products by the Company or
a carrier at Processor's Plant, whichever first occurs.
11. CONFIDENTIAL INFORMATION:
------------------------
(a) (a) Processor and Company shall treat and
maintain, as the other's confidential property,
(b) shall not use (except in the course of its
operations under this Agreement and then only on a
confidential basis), in any form or manner, (c)
shall not duplicate without the prior written
consent of the other parties hereto and (d) shall
not disclose, in whole or in part, to any third
party (other than the officers and employees of
the other party hereto to whom disclosure is
permitted under Paragraph 11 (d) hereof) any
information relating to formulae, product and
packaging information and other related matters,
including the Manual and any and all charts,
formulas, graphs, memoranda, summaries, data,
plans, cost or production data, marketing and
promotion strategies, programs, operations,
manufacturing, marketing, distribution, products,
processes, methods, costs, prices, finances,
customers or personnel, trade secrets and any
other information, which information comes within
Processor's or Company's custody, possession or
knowledge or is developed, compiled, prepared or
used by Processor or Company in the course of or
in connection with its operations under this
Agreement (all of which information must have been
clearly stamped as "CONFIDENTIAL" by Company or
Processor, as the case may be, prior to delivery
to the other party hereto and all such information
being hereinafter collectively referred to as the
"Proprietary Information"). No sheet or page of
any information submitted hereunder shall be
marked CONFIDENTIAL which is not, in good faith,
believed by the Processor or Company, as the case
may be, to contain Proprietary Information.
Neither Company nor Processor shall have any
obligation with respect to oral information
received from the other party hereto unless a
written summary of such oral communication
specifically identifying the items of Proprietary
Information is furnished to the party receiving
such oral communication within ten (10) days after
said oral communication. All trademarks and trade
names owned by the Company shall at all times be
and remain in the exclusive property of the
Company, and this Agreement shall not in any
manner constitute a license to Processor to use
such trademarks or trade names of the Company,
except for any usage of such trademarks or trade
names which may be necessary in connection with
the packaging of the Products.
4
<PAGE>
(b) The provisions of Paragraph 11 (a) hereof,
however, shall not apply to any Proprietary
Information which the party receiving it can show
(a) is in the public domain at the time of
disclosure, (b) has been published in writing and
has become, prior to the time of use or
disclosure, a part of the public domain other than
by reason of any of the receiving party's acts or
omissions, (c) has been put in the receiving
party's possession or knowledge, prior to the time
of its use or disclosure, by any third party
(except for any third party, including without
limitation officers or employees of the receiving
party, acting directly or indirectly for or on its
behalf) as a matter or right and without
restriction on use or disclosure; provided,
however, that to the receiving party's knowledge,
at the time of such use or disclosure, the third
party did not violate any confidentiality
agreement or obligation with the Company by giving
this information to the receiving party, (d) was
in the receiving party's possession or knowledge,
prior to the term of this Agreement and that
certain Extract Production Agreement, dated as of
May 26, 1989, between Company and Dr Pepper (the
"1989 Extract Agreement") and that certain Extract
Production Agreement, dated April 6, 1984, between
Processor and Del Monte Corporation, as amended,
as a matter of right and without restriction on
use or disclosure or (e) was required to be
disclosed by the receiving party pursuant to law
or judicial order.
(c) At all times following the execution of this
Agreement by both parties, all tangible
Proprietary Information, including without
limitation, all summaries, copies and excerpts of
any Proprietary Information, which come into
Processor's custody, possession or knowledge or
are developed, compiled, prepared or used by
Processor in the course of or in connection with
its operations under this Agreement, and all
tangible property owned by Company and put in
Processor's custody or possession by Company in
connection with its operations under this
Agreement, shall be solely the property of Company
and shall be immediately delivered by Processor to
Company upon completion or termination of its
operations under this Agreement or within ten (10)
calendar days following receipt by Processor of
Company's written request therefor, whichever
first occurs.
(d) Processor shall restrict the custody, possession,
knowledge, development, compilation, preparation
and use of the Proprietary Information to its
officers and employees who are directly involved
in
5
<PAGE>
the implementation of this Agreement to the extent
that they have need of such custody, possession,
knowledge, development, compilation, preparation
or use in connection with its operations under
this Agreement and then only on a confidential
basis.
12. ADULTERATED/MISBRANDED: Processor guarantees that no
----------------------
articles of food sold by Processor to the Company will be
adulterated or misbranded within the meaning of the Federal Food,
Drug and Cosmetic Act of June 25, 1938, as amended, or within the
meaning of any state food and drug law the adulteration and
misbranding provisions of which are identical with or
substantially the same as those found in the Federal Act, and
that such goods will not be produced or shipped in violation of
Sections 404, 301(d) or 505 of said Federal Act; provided that
where goods are shipped under the Company's labels, Processor's
responsibility for misbranding shall be limited to that which
result from failure of the Products to conform to the labels and
specifications furnished by the Company. With respect to
materials furnished, if any, to the Processor by the Company, the
Company hereby guarantees to Processor that each shipment or
other delivery of materials made by the Company pursuant to this
Agreement, as of the time of delivery to Processor, shall not be
adulterated or misbranded within the meaning of the Federal Food,
Drug and Cosmetic Act of June 25, 1938, as amended, or within the
meaning of any state food and drug law the adulteration and
misbranding provisions of which are identical with or
substantially the same as those found in said Federal Act, and
that such goods will not be produced or shipped in violation of
Sections 404, 301(d) or 505 of said Federal Act.
13. INDEMNIFICATION: The Company agrees to indemnify the
---------------
Processor against any claim, loss, damage, liability or expense,
including without limitation reasonable attorneys' fees and costs
of court, for bodily injury, death or property damage where such
injury, death or damage is caused by any proprietary information,
ingredients, materials, formulae, instructions, standards,
programs or policies furnished by the Company to the Processor,
or by any act or omission on the part of the Company in violation
of this Agreement.
The Processor agrees to indemnify the Company against any
claim, loss, damage, liability or expense, including without
limitation reasonable attorneys' fees and costs of court, for
bodily injury, death or property damage where such injury, death
or damage is caused by any ingredients or materials furnished by
the Processor, or by any act or omission on the part of the
Processor in violation of this Agreement.
The Company and the Processor shall maintain insurance to
cover their respective liabilities with respect to the
indemnities that are provided for in this paragraph to the extent
of the applicable insurance coverage. Each party will maintain a
commercial general liability policy with limits of no less than
$1,000,000 combined single limit for bodily injury and property
damage per occurrence with combined single limit of $2,000,000
6
<PAGE>
for bodily injury and property damage combined on an annual
aggregate. Upon execution of this Agreement and thereafter upon
the request of either party hereto, each party shall furnish to
the other evidence of such insurance in the form of a certificate
or certificates issued by its respective insurance carrier, which
include wording to state that if there is a cancellation or any
material change, a 30 day prior notice will be given to the
certificate holder. The insurance policy required of each party
pursuant to this Section 13 shall name the Processor or Company,
as the case may be, as an additional insured as pertains to the
respective operations of each party. In addition, each
certificate issued by the insurance carrier for either party
hereto, as described above, shall indicate the other party is an
additional insured on the insurance policy described in such
certificate.
The foregoing indemnifications are conditioned upon the
party claiming indemnification, promptly furnishing the other
party with written notice of each claim, loss, damage or expense
for which indemnity is claimed and permitting the indemnifying
party to assume the defense thereof at its sole cost and expense.
The party claiming indemnification may participate through its
own counsel in the defense of such claim, loss, damage or
expense, but only at its sole cost and expense, and, in any
event, must reasonably cooperate with the indemnifying party in
such defense.
14. RECORDS OF AUDIT: Processor agrees to make and keep
----------------
full and accurate books and records currently updated with
respect to production runs, inventories and shipments consistent
with the requirements of the Manual, and agrees to report such
data in accordance with the Manual. The Company shall be
permitted to inspect such books and records and make copies
thereof to the extent necessary to verify the amounts due
hereunder, as may reasonably be required and as contemplated by
the Manual. The Company agrees to make and keep full and
accurate books and records currently updated with respect to all
of its activities, duties and obligations in connection with this
Agreement, and Processor shall be permitted to inspect such books
and records and make copies thereof to the extent necessary to
verify the amounts due hereunder. Any request to inspect the
books and records of Processor or Company, as the case may be,
shall be made upon not less than three (3) days advance written notice
and shall be performed only during the normal business hours of
Processor or Company, as the case may be.
15. FORCE MAJEURE: Neither party shall be liable to the
-------------
other for any delay or failure to perform any of its obligations
hereunder (except the payment of the manufacturing fee described
in Paragraph 5 thereof) which delay or failure to perform is due
to fires, storms, floods, earthquakes, acts of God, war,
insurrection, riots, interruption or diminution of the
availability of electric power, strikes, lockouts or other labor
disputes, failure of transportation, equipment, communication or
postal service or any other acts beyond the control of said
party.
7
<PAGE>
16. DEFAULT: If either party shall default in the
-------
performance of this Agreement, and that default shall continue
uncorrected for thirty (30) days after written notice thereof has
been given to the defaulting party specifying the nature of such
default, the other party shall be entitled to terminate this
Agreement upon ten (10) days' written notice. Waiver of any
default shall not constitute waiver of any subsequent default.
17. ASSIGNMENT: No party may assign or otherwise transfer
----------
this Agreement, or any of its rights and obligations hereunder,
or any portion thereof without the prior written approval of the
other, nor may a party make or attempt any such assignment or
transfer to a successor entity by consolidation or merger (except
for a merger of Seven-Up into Dr Pepper or Dr Pepper into Seven-
Up) or to a corporation which purchases substantially all of the
assets, capital stock or other evidence of ownership of such
party without the prior written approval of the other party
hereto. Either Company or Processor may assign this Agreement to
a wholly-owned subsidiary without the prior written consent of
the other party hereto, although written notice of any such
assignment must be given to the other party hereto within ten
(10) business days from the effective date of such assignment.
18. NOTICES: All notices given by the parties hereunder
-------
shall be in writing and shall be personally delivered or mailed, by
registered or certified mail, return receipt requested, addressed
to the respective parties at the following addresses:
To Company:
Cadbury Beverages Inc.
6 High Ridge Park
Stamford, Connecticut 06905-0800
Attention: General Counsel
To Processor:
Dr Pepper Company
The Seven-Up Company
8144 Walnut Hill Lane
Dallas, Texas 75231-4372
Attention: General Counsel
or at such address as either party shall designate in writing to
the other. Notices shall be effective when properly delivered or
mailed unless otherwise provided for in this Agreement.
19. ENTIRE AGREEMENT: IT IS AGREED THAT NEITHER PARTY HAS
----------------
MADE OR IS MAKING ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, NOT EXPLICITLY SET FORTH IN THIS AGREEMENT, INCLUDING
WITHOUT LIMITATION THE WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE. This Agreement is the entire agreement
between the parties hereto relating to the subject matter hereof,
and that as of January 1, 1993 it cancels and supersedes all
earlier agreements, written or oral relating to the subject
matter
8
<PAGE>
hereof, including without limitation the 1989 Extract Agreement,
and that no waiver, modification or change of any of the terms of
this Agreement shall be valid unless in writing and signed by
both parties hereto.
20. SEVERABLE CONDITIONS: If any condition, term or
--------------------
covenant of this Agreement shall at any time be held to be void,
invalid or unenforceable, such condition, covenant or term shall
be construed as severable and this Agreement shall be carried out
as if such void, invalid or unenforceable term were not embodied
herein.
21. BINDING AGREEMENT: This Agreement shall inure to the
-----------------
benefit of the parties and their permitted successors and assigns
(provided the assignment does not violate the terms hereof) and
shall be binding upon the parties, their permitted successors and
assigns.
22. GOVERNING LAW: This Agreement shall be governed by
-------------
and construed in accordance with the internal laws of the State
of New York. Processor and Company agree that proper
jurisdiction and proper venue shall lie in the United States
District Court sitting in Dallas County, Texas; St. Louis,
Missouri, or New Haven, Connecticut, in all actions arising out
of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed as of the day and year first above written.
DR PEPPER COMPANY CADBURY BEVERAGES INC.
By: /s/ Ira M. Rosenstein By: /s/ Mathew Litobarski
------------------------- -------------------------
Title: Executive Vice-President Title: Senior Vice-President
Technical
THE SEVEN-UP COMPANY
By: /s/ Ira M. Rosenstein
-------------------------
Title: Executive Vice-President
9
Exhibit (c)(4)
POST-MIX CONCENTRATE/SYRUP ROYALTY AGREEMENT
AGREEMENT effective this third day of March, 1991, by and
between Dr Pepper Company, 8144 Walnut Hill Lane, Dallas, Texas,
75231, a Delaware corporation (hereinafter referred to as "Dr
Pepper") and Cadbury Beverages, Inc., 6 High Ridge Park, Post
Office Box 3800, Stamford, CT 06905-0800, a Delaware corporation
(hereinafter referred to as "Cadbury").
W I T N E S S E T H:
-------------------
WHEREAS, Cadbury owns all title and interest in and to the
trademark "Canada Dry", and has rights to use the "Sunkist"
trademark for certain beverages pursuant to a License Agreement
between Sunkist Growers, Inc. ("Cadbury's Licensor") and Cadbury
Beverages, Inc. (the "Trademarks") for use in connection with
carbonated soft drinks; and
WHEREAS, Dr Pepper conducts a similar business in connection
with a different trademark in the post-mix Retail Food Service
business; and
WHEREAS, Cadbury desires to grant Dr Pepper the right to be
its exclusive sales agent for the purpose of marketing, promoting
and selling Post-Mix Fountain Concentrate to producing Bottlers
and Distributors and Post-Mix Fountain Syrup to non-producing
Bottlers and Distributors; and
WHEREAS, Cadbury desires to grant Dr Pepper the right to be
its non-exclusive sales agent for the purpose of marketing,
promoting and selling Post-Mix Fountain Syrup to Retail Food
Service Accounts; and
WHEREAS, Dr Pepper desires to accept such grant and to
undertake and carry out the marketing, promoting and selling of
such Post-Mix Fountain Concentrate and Syrup bearing the
Trademarks, subject to the terms and conditions set forth in this
Agreement; and
<PAGE>
Page 2
WHEREAS, the parties have reached agreement on the terms
and conditions to be embodied in this Agreement and wish to
reduce the terms and conditions to writing.
NOW, THEREFORE, in consideration of the mutual promises and
conditions herein contained and with the intent to be legally
bound thereby, Cadbury and Dr Pepper agree as follows:
1. Definitions. As used herein and supplementing any
-----------
other definitions of these same terms set forth herein:
"Bottlers" mean local soft drink bottling companies
that are licensed by Cadbury (and, in regard to the SUNKIST
brand, by Cadbury's Licensor) to manufacture, distribute and sell
soft drink beverages under the Trademarks.
"Distributor" means an entity licensed by Cadbury (and,
in regard to the SUNKIST brand, by Cadbury's Licensor) other than
a Bottler, who may produce Post-Mix Fountain Syrup from
Concentrate, or who may purchase finished Post-Mix Syrup directly
from Cadbury's authorized supplier or a Bottler, for ultimate
sale to Retail Food Service Accounts.
"Parties" and "Party" shall mean Dr Pepper and/or
Cadbury.
"Person" means individuals, corporations, partnerships
or other legally recognized commercial entities.
"Post-Mix Fountain Syrup" means the syrup used to
produce soft drink products dispensed by the post-mix fountain
method and refers to the syrups necessary to produce those and
only these soft drink beverage products listed on Exhibit "A"
attached hereto.
"Post-Mix Fountain Concentrate" means the extract
ingredients used to produce the Post-Mix Fountain Syrup.
"Retail Food Service" means food service institutions
whose business is the preparation and service of ready-to-eat
foods, including but not limited to restaurants, bars and lounges
which serve alcoholic beverages (the 'wet market'), convenience
stores, mass merchandisers, concessionaires, schools,
institutions and cup vending machines dispensing Post-Mix
Fountain Syrups.
<PAGE>
Page 3
"Territory" means the fifty states of the United States
of America.
"Trademarks" or in the singular form "Trademark" when
required by grammatical context, means those registered and other
trademarks listed on Exhibit "B" attached hereto.
"Trade Dress" means all packaging designs, graphics,
layout, ornamental appearance, configuration, coloration, "get-
up" and all elements of the packaging and labeling used for or to
be used for the Post-Mix Fountain Equipment or designed or
developed for use in connection with the same either prior to the
execution of this Agreement or while this Agreement or any
renewals thereof are in effect, whether created by or under the
authority or direction of Cadbury or Dr Pepper.
"Unit" means Post-Mix Concentrate units shipped, or in
terms of Post-Mix Syrup gallons, Post-Mix Syrup gallons
manufactured from Post-Mix Concentrate units as follows: Sunkist
Post-Mix Syrup: 200 Post-Mix syrup gallons = 1 unit of Post-Mix
Concentrate; Canada Dry Post-Mix Syrup: 100 Post-Mix syrup
gallons = 1 unit of Post-Mix Concentrate.
"Net Sales" mean the total sales prices invoiced for
all Post-Mix Concentrate sold under this Agreement to producing
Bottlers and producing Distributors (or in the case of Post-Mix
Syrup manufactured from Post-Mix Concentrate, and sold to non-
producing Bottlers, non-producing Distributors and Food Service
Accounts, then such Post-Mix Syrup shall be converted back to
Post-Mix Concentrate units in accordance with the Unit definition
specified in this Paragraph 1), less allowances or refunds
actually paid for returned goods. All such Post-Mix Concentrates
shall be considered sold when shipped to producing Bottlers and
producing Distributors, and in the case of Post-Mix Syrup, all
such Post-Mix Syrup shall be considered sold when shipped to non-
producing Bottlers, non-producing Distributors and Food Service
Accounts.
2. Grant of Rights, Licenses and Privileges
----------------------------------------
(a) Cadbury hereby grants to Dr Pepper the non-
exclusive right, license and authority to sell, market and
promote within the territory Post-Mix Fountain Syrup
(hereinafter "Syrup") to the Retail Food Service Accounts, and
the exclusive license and authority to sell, market and promote
within the Territory Post-Mix Fountain Concentrate to producing
Bottlers and Distributors (hereinafter "Concentrate") and Syrup
to non-producing Bottlers and
<PAGE>
Page 4
Distributors under the respective Trademarks and Trade Dress
subject to the conditions, standards, and specifications stated
herein.
(b) Cadbury hereby grants authority to Dr Pepper
during the term of this Agreement and Dr Pepper agrees to use the
Trademarks on all printed material, including without limitation
its promotional material, stationery, business cards and invoices
used in connection with the business established by this
Agreement. Such usages shall be limited exclusively to usages
related to the conduct of such business and in accordance with
the instructions of Cadbury regarding prescribed use. This
authority and all uses hereunder shall cease forthwith on the
expiration or termination of this Agreement.
(c) Cadbury hereby grants to Dr Pepper, during the
term of this Agreement and within the Territory, the rights,
licenses, and privileges as specifically set forth in paragraphs
(a) and (b) of this Paragraph 2. The Parties acknowledge that
any rights, licenses and privileges not specifically granted
herein are not to be construed as part of this Agreement.
3. Warranties and Representations of Cadbury and Dr
------------------------------------------------
Pepper.
------
(a) Cadbury warrants and represents to Dr Pepper that:
Cadbury is the owner of the CANADA DRY Trademark and has rights
to use the SUNKIST Trademarks in the Territory, for the Products
listed in Exhibit A, and that Cadbury has the right to grant all
of the rights that this Agreement purports to grant to Dr Pepper
and, Cadbury further agrees to indemnify and hold Dr Pepper
harmless from all claims of any parties whatsoever alleging that
Cadbury does not have the right or authority to grant such
rights.
(b) Dr Pepper warrants and represents that it will
only sell Concentrate manufactured by Dr Pepper's St. Louis
facility pursuant to the Extract Production Agreement by and
between Cadbury and Dr Pepper dated May 26, 1989, as amended, and
Syrup manufactured by Universal Industries Corporation pursuant
to the Agreement by and between Del Monte Corporation, Canada Dry
Corporation, Sunkist Soft Drinks Inc. and Universal Industries
<PAGE>
Page 5
Corporation dated February 19, 1986, and adopted by Cadbury on
July 23, 1986.
Dr Pepper and Cadbury agree that both parties will
enter into good faith discussions and negotiations with respect
to the granting of Post-Mix Fountain Syrup production rights (for
the products listed on Exhibit A), to Dr Pepper and Cadbury at a
mutually convenient time. If said discussions and negotiations
result in terms and conditions acceptable to Dr Pepper, Cadbury
and Cadbury's Licensor, Dr Pepper will thereby have the right to
produce Post-Mix Fountain Syrup, and the grant of such production
rights shall be covered under a separate agreement by and among
Dr Pepper, Cadbury and Cadbury's Licensor.
(c) Dr Pepper warrants and represents that it will
not, during the term of this Agreement or at any time thereafter,
directly or indirectly challenge or deny the validity of, or
assert any ownership interests in, any of the Trademarks or Trade
Dress.
(d) Dr Pepper warrants and represents that it has the
know-how and expertise to undertake the obligations contained in
this Agreement.
(e) Dr Pepper warrants and represents that it has the
number of sales personnel, and will maintain such number of sales
personnel necessary to undertake this obligation.
4. Trademark/Trade Dress.
---------------------
(a) Dr Pepper acknowledges and agrees that any and all
trademark rights, copyrights and other proprietary or
intellectual property rights and interest in the Trade Dress are
and shall be the sole property of Cadbury and/or Cadbury's
Licensor, as the case may be, whether created by or under the
authority or direction of Cadbury or Dr Pepper. Dr Pepper shall
fully cooperate with Cadbury in the execution, filing and
prosecution of any trademark or copyright applications or other
similar or related registration applications that Cadbury may at
its own expense desire to
<PAGE>
Page 6
undertake with respect to items of Trade Dress, and for that
purpose Dr Pepper shall promptly supply Cadbury from time to time
with such items of packaging, labeling, graphics or pictorial
representations thereof or similar material, whether carrying the
Trademarks or not, as may be reasonably requested by Cadbury,
which are in the possession of or under the custody or control of
Dr Pepper. Without further consideration, Dr Pepper will execute
or cause to be executed, and will promptly deliver to Cadbury, at
any time, whether during the term of this Agreement or when
requested within three (3) years after the termination or
expiration of this Agreement, such instruments of transfer or
other documents as Cadbury may reasonably request to confirm and
evidence the above mentioned ownership rights. All goodwill
associated with the use of the Trademarks or Trade Dress in
connection with this Agreement shall inure solely to the benefit of
Cadbury.
(b) Dr Pepper agrees to promptly notify Cadbury of any
actual or potential infringement, passing off, dilution or
tarnishment of, or with respect to, any of the Trademarks which
comes to its attention. Cadbury shall, at its own cost take
reasonable steps to stop violation(s) of the Trademarks and Trade
Dress within the Territory. The determination as to what action
to take to stop such violation(s) shall be made by Cadbury. Dr
Pepper may not institute on its own behalf any such action.
Cadbury may request Dr Pepper to join with Cadbury in any
proceeding or litigation for the protection of the Trademarks and
Trade Dress and the goodwill related thereto, and Dr Pepper shall
reasonably assist and cooperate with Cadbury in connection with
Cadbury's action(s) against such violator(s), as specifically
requested by Cadbury. Such assistance and cooperation of Dr
Pepper shall be at no cost to Cadbury, except that Cadbury will,
upon written request by Dr Pepper, reimburse Dr Pepper's invoiced
out-of-pocket expenses incurred directly and solely as the result
of Dr Pepper's assistance to and cooperation with Cadbury in such
action(s).
<PAGE>
Page 7
(c) Dr Pepper agrees to not adopt or use or register
or attempt to register any trademark which resembles or is
confusingly similar to any of the SUNKIST and CANADA DRY
Trademarks during the term of this Agreement and thereafter.
(d) Cadbury agrees to keep effective and renew the
registrations of the CANADA DRY Trademarks and shall diligently
prosecute and shall cause to prosecute applications to register
the same, and shall use its best efforts to cause Cadbury's
Licensor to keep effective and renew the registrations of the
SUNKIST Trademarks. In the event that a registration of a CANADA
DRY or SUNKIST Trademark shall expire, or be declared invalid
through oversight, government order, or otherwise, Cadbury shall
use its best efforts to re-establish the same.
(e) All Concentrate and Syrup containers, and all
dispensing equipment ("equipment") that carry the finished
beverage products (the "finished beverage") and advertising
therefor shall bear the appropriate Trademark. No trademark
other than the SUNKIST or CANADA DRY Trademarks may be used in
connection with the sale, marketing or promotion of SUNKIST and
CANADA DRY Concentrate, Syrup or finished beverages without the
prior written approval of Cadbury. Labels and advertising
materials bearing the SUNKIST or CANADA DRY Trademarks shall
include a statement that the CANADA DRY Trademarks are owned by
Cadbury and that the SUNKIST Trademarks are owned by the Sunkist
Grower's Inc. and are licensed for use by them and Cadbury.
(f) Before any commercial, advertising theme, formats
and content, label, carton, bottle design, packaging design or
other container, or any other thing bearing any of the Trademarks
(the "Trademark Bearing Items") is placed in production or use, a
sample or facsimile thereof shall be submitted at least fourteen
(14) working days in advance of first production or use to
Cadbury for its approval, which approval shall not be
unreasonably withheld or delayed. If Cadbury shall fail to
respond within ten (10) working
<PAGE>
Page 8
days of such submission, then such submission shall be deemed to
have been approved by Cadbury. Such materials shall be sent by
facsimile copy, courier or express mail accompanied by a request
that Cadbury acknowledge receipt by return facsimile or by telex.
All requests for such approval are to be addressed to:
Cadbury Beverages Inc.
1770 Indian Trail Road - Suite 150
Norcross, GA 30093
Attn: Michael Rixman
If any item, once approved, is thereafter
modified, altered, extended, or expanded in any manner after
Cadbury's approval is given, such change shall be re-submitted to
Cadbury for approval of such change. Cadbury's approval shall be
deemed granted if Cadbury has not responded within fourteen (14)
working days from the day of such submission. Cadbury shall be
justified in not approving material if, among other things,
Cadbury perceives any negative or injurious image or theme
flowing from the material, or the material is considered lacking
in taste or propriety.
Dr Pepper shall be required to obtain all federal,
state or other governmental or regulatory approvals required in
connection with the advertising and promotional materials
described in this Paragraph 4.
(g) With respect to copyrights, Trade Dress and
tangible advertising materials developed and in fact used by Dr
Pepper in connection with Syrup sold pursuant to this Agreement,
Dr Pepper acknowledges Cadbury's or Cadbury's Licensor's ownership of such
copyrights, Trade Dress and tangible advertising materials. Dr
Pepper irrevocably sells, assigns and grants to Cadbury all of Dr
Pepper's right, title and interest in and to such copyrights,
Trade Dress and tangible advertising materials.
(h) Dr Pepper shall use its best efforts to maintain,
or to cause to be maintained, any vehicles bearing any of the
Trademarks at all times in good condition and appearance.
<PAGE>
Page 9
(i) The Syrup, Concentrate and equipment shall be
labelled and advertised fairly and truthfully.
5. 0wnership and Confidentiality of Know-How and Beverage
Formulae.
------------------------------------------------------
Dr Pepper acknowledges that the formulae and other
know-how for producing the Canada Dry Concentrate and Syrup
are the trade secret and confidential property of Cadbury and
that the formulae and other know-how for producing the Sunkist
Concentrate and Syrup are the trade secret and confidential
property of Cadbury or Cadbury's Licensor as the case may be. Dr
Pepper shall have no right to develop any new formula or change
any existing formulae given to Dr Pepper by Cadbury for the
production for the Sunkist and Canada Dry Concentrate and Syrup
unless approved in writing by Cadbury.
6. General Requirement of Performance.
----------------------------------
(a) Performance as to Consumer Complaint.
------------------------------------
Dr Pepper shall promptly respond to and cooperate
in a business-like manner to resolve consumer or Retail Food
Service Account complaints brought to its attention involving any
Syrup sold by Dr Pepper, and Bottler/Distributor complaints
involving Concentrate sold by Dr Pepper pursuant to this
Agreement, and shall promptly provide Cadbury with copies of any
such significant complaints, all written responses thereto and
summaries of any oral communications relating thereto.
(b) Performance as to the Retail Food Service
Accounts, Distributors and Bottlers.
-----------------------------------------
Dr Pepper shall regularly and consistently devote
its best efforts to vigorously promote the sale, marketing and
promotion of the Syrup and Concentrate to the Retail Food Service
Accounts, Distributors and Bottlers at Dr Pepper's sole expense
by
<PAGE>
Page 10
means of effective advertising and promotion programs conducted
by Dr Pepper alone and marketing support from Dr Pepper to be
offered to the Retail Food Service Accounts, Distributors and
Bottlers in order to achieve, maintain and expand distribution
and market penetration for the Syrup and Concentrate in the
Territory.
Dr Pepper shall further exercise its best efforts
to increase Retail Food Service Accounts', Distributors' and
Bottlers' demand in the Territory, maintain a highly competitive
position within the Food Service Industry and promote the
efficient and diligent marketing and sale of Syrup and
Concentrate in sufficient quantities to meet Retail Food Service
Accounts', Distributors' and Bottlers' demand in the Territory.
Dr Pepper also agrees to use its best efforts to vigorously and
continuously advertise and promote the sale, of the Syrup and
Concentrate throughout the Food Service Industry.
(c) Performance as to Cadbury.
-------------------------
In its performance in connection with this Agreement,
Cadbury shall provide Dr Pepper with ongoing verbal and written
communication relating to the Syrup and Concentrate products
listed on Exhibit A, as to:
(i) any relevant changes in existing Bottlers;
(ii) any relevant changes in the existing license
agreement structure within the Cadbury
system;
(iii) general corporate marketing direction of
Cadbury, including the exchange of information
that may have an effect on the marketing of the
Syrup and Concentrate; and
(iv) all current advertising and marketing themes,
tag lines, and/or artwork of Cadbury that
relate to promoting the Syrup and
Concentrate.
(d) Performance as to the Furtherance of the Business.
-------------------------------------------------
On a continuing basis, Dr Pepper covenants and undertakes in good
faith and with due diligence to devote its best business
<PAGE>
Page 11
administration, superintendence, skill, effort and judgment to
the maintenance and furtherance of the business contemplated by
this Agreement by diligently pursuing new Retail Food Service
Accounts, Bottlers and Distributors for the purpose of
effectively selling the Syrup and Concentrate, and to
expeditiously and economically cooperate with Cadbury in the
furtherance of the business contemplated by this Agreement. The
performance by Dr Pepper of its obligations hereunder shall at
all times be consistent with the highest standards of attention
and care required by or relating to the operation of the type of
business contemplated by this Agreement.
Dr Pepper agrees that upon obtaining potential new
Bottlers or Distributors for Cadbury, for the purpose of selling
Concentrate and Syrup, Dr Pepper shall secure all papers and
information necessary for the approval of the new Bottler's or
Distributor's accounts by Cadbury. Such papers and information
shall include, but shall not be limited to, an application filled
out by the potential new Bottler or Distributor and all the
necessary credit information. Dr Pepper acknowledges that the
approval or disapproval of the potential new Bottler's or
Distributor's application is in Cadbury's sole discretion and
Cadbury's decision with respect to the approval or disapproval of
said potential new Bottler or Distributor shall be conclusive.
Dr Pepper further agrees not to make any representation to such
potential new Bottlers or Distributors to the effect that
Cadbury will approve said potential Bottler's or Distributor's
account.
(e) Performance as to Pricing
-------------------------
Dr Pepper shall establish Concentrate pricing for
those Bottlers and Distributors purchasing the Concentrate. Dr
Pepper shall also establish Syrup pricing for the Retail Food
Service Accounts purchasing the Syrup. As is customary in
conducting its own Retail Food Service business, Dr Pepper shall
print and distribute current price lists established by Dr
Pepper,
<PAGE>
Page 12
and periodic notices of pricing actions concerning the Syrup and
Concentrate.
(f) Covenants of Performance. Each of the Parties
------------------------
shall comply with the requirements of this Agreement to be
performed by it and meet and comply with all of its obligations
in good faith.
7. General Conduct of the Business.
-------------------------------
In its performance in connection with this Agreement,
Dr Pepper shall comply with all applicable governmental laws,
rules and regulations and shall timely obtain any and all
permits, certificates, licenses and registrations necessary for
the full and proper conduct of all phases of the business to be
conducted.
8. Packaging, Promotional and Advertising Suppliers.
------------------------------------------------
Dr Pepper shall designate from time to time certain
entities whom it proposes to appoint as a supplier of containers
or packaging for the Syrup and Concentrate or for promotional and
advertising materials to be used in marketing the Syrup or
Concentrate which will bear the Trademarks. Dr Pepper shall
request the approval of each such supplier in writing to Cadbury
which approval shall be in Cadbury's sole discretion. Such
approval request shall contain particulars as to the items to be
supplied. Dr Pepper shall require each such supplier to conform
to the standards of graphics that may be set forth by Cadbury.
9. Marketing Plans.
---------------
Dr Pepper agrees that it shall develop annually
marketing, sales and promotion plans and such other internal
plans, budgets and goals necessary or advisable in the opinion of
Dr Pepper and Cadbury to obtain distribution and market
penetration of the Syrup and Concentrate with the Bottlers,
Distributors and the Retail Food Service Accounts in the
Territory. Dr Pepper shall submit such plans, budgets and goals
to Cadbury by January 15 of each year for
<PAGE>
Page 13
approval. Such approval not to be unreasonably withheld. If
Cadbury disapproves of the materials submitted by Dr Pepper on
said January 15th date, both parties shall work together to
develop such submitted materials that are acceptable to both
parties. Dr Pepper shall diligently pursue the implementation of
all such plans, budgets and goals and review the implementation
thereof with Cadbury on a semi-annual basis during the term
hereof.
10. Royalty.
-------
(a) Royalties shall be accrued when SUNKIST AND CANADA
DRY Concentrate units are shipped to approved Sunkist and Canada
Dry Bottlers and Distributors and when equivalent units of
finished Syrup are shipped to Bottlers, Distributors and Retail
Food Service Accounts. Royalties will be calculated as specified
in the Net Sales definition of Paragraph 1.
i. SUNKIST SYRUP.
-------------
Dr Pepper shall pay a royalty to Cadbury based on
shipments of Sunkist Concentrate and Syrup as follows:
(1) 18% of Net Sales per unit up to 750,000 equivalent
Syrup gallons.
(2) 12% of Net Sales per unit from 750,001 equivalent
Syrup gallons to 1,500 equivalent Syrup gallons.
(3) 10% of Net Sales per unit from 1,500,001 or
greater equivalent Syrup gallons.
ii. CANADA DRY GINGER ALE AND TONIC SYRUP.
-------------------------------------
Dr Pepper shall pay a royalty to Cadbury based on
shipments of Canada Dry Ginger Ale and Tonic
Concentrate and Syrup as follows:
(1) 15% of Net Sales per unit up to 250,000 equivalent
Syrup gallons.
(2) 10% of Net Sales per unit from 250,001 equivalent
Syrup gallons to 500,000 equivalent Syrup gallons.
(3) 8% of Net Sales per unit from 500,001 or greater
equivalent Syrup gallons.
<PAGE>
Page 14
iii. CANADA DRY SWEET 'N SOUR, COLLINS, AND ALL OTHER SYRUP.
------------------------------------------------------
Dr Pepper shall pay a royalty to Cadbury based on
shipments of Canada Dry Sweet 'N Sour, Collins and all
other Concentrate and Syrup as follows:
(1) 15% of Net Sales per unit up to 250,000 equivalent
Syrup gallons.
(2) 10% of Net Sales per unit from 250,001 to 500,000
equivalent Syrup gallons.
(3) 8% of Net Sales per unit from 500,001 or greater
equivalent Syrup gallons.
(b) All dollar amounts described in this Agreement are
expressed in United States dollars and currency. All sums
payable by Dr Pepper to Cadbury hereunder shall be paid or
payable in United States currency in Stamford, Connecticut (or at
such other place designated by Cadbury in a written notice to Dr
Pepper) on or before the date due for payment. All amounts not
paid when due to Cadbury shall bear interest until payment in
full at the prime commercial lending rate as published by
Banker's Trust Company, New York, N.Y. from time to time plus one
and a half percent (1 1/2%); provided, however, that no interest
shall commence to accrue until the tenth (10th) day after the
date scheduled for payment.
(c) On or before the twenty-first (21st) day of the month
immediately following the previous month, Dr Pepper shall furnish
Cadbury with a written report in a form satisfactory to Cadbury
of the quantities and sales dollars from Concentrate units of
each Post-Mix product listed on Exhibit A, shipped by Dr Pepper.
Additionally, on or before the sixtieth (60th) day after the end
of any calendar year during the Term hereof, Dr Pepper shall
submit to Cadbury an annual sales report showing each annual
volume and dollar sales from Concentrate units for the
immediately preceding calendar year for each Post-Mix Fountain
product listed on Exhibit A, and package size therefor, shipped
by Dr Pepper.
<PAGE>
Page 15
(d) Dr Pepper shall be responsible for any tax withholding
requirements imposed by any applicable governmental legislation
or regulations with respect to any amounts paid to Cadbury
hereunder.
11. Marketing and Operating Costs. During the term of this
-----------------------------
Agreement, all marketing and/or operating costs incurred by Dr
Pepper in its performance of its obligations hereunder shall be
borne exclusively by Dr Pepper. Additionally, Dr Pepper shall be
responsible for all order entry and billing which involve the
sale of Concentrate and Syrup to Bottlers, Distributors and Food
Service Accounts.
12. Records and Audits. Dr Pepper shall keep and maintain
------------------
for at least seven (7) years all records with respect to its
performance and activities and all records prepared by it that
are required by this Agreement and all reports received from Food
Service Accounts, Bottlers and Distributors with respect to all
sales of Sunkist and Canada Dry Concentrates and Syrups, which
records shall be prepared in conformity with its ordinary course
of business practice and U.S. generally accepted accounting
principles. Dr Pepper shall keep full, true and accurate books
of account and other records containing all the continuing
royalties payable by it hereunder. Cadbury shall have the right
to have, at its own expense, authorized employees,
representatives, independent auditors, lawyers or accountants
inspect during regular business hours, said books, records and
supporting data as well as the production facilities utilized by
Dr Pepper to produce the Concentrates and Syrups. Cadbury shall
have the right to share information from all such books, records and
supporting data, relating to Sunkist Concentrate and Syrup with
Cadbury's Licensor.
<PAGE>
Page 16
13. Confidentiality.
---------------
Dr Pepper shall treat all trade secrets of a
commercial, technical or other nature, received from Cadbury as
confidential information, and shall treat any information
(including but not limited to Know-how as set forth in Paragraph
5 of this Agreement) designated in writing as confidential by
Cadbury as confidential information and shall not disclose such
information to others or use such information for purposes other
than for implementing the terms of this Agreement. Dr Pepper
agrees to take all measures to prevent persons who have a
legitimate right of access to or use of the information from
disclosing it to persons or entities, even within Dr Pepper's
organization, who do not have a need to know such information.
Cadbury undertakes corresponding obligation of confidentiality
with regard to any information supplied to it by Dr Pepper
hereunder which is identified in writing as confidential
information.
The obligations of the parties under this Paragraph
shall survive the termination of this Agreement. The above
provisions of confidentiality shall not apply to any information
which either party has in its possession at the time of its
disclosure to the other party as evidenced by written records
of the parties, or information which at the time of receipt by
either party is in the public domain.
14. Business Review.
---------------
Dr Pepper agrees that it shall, at all times, have on
its staff a knowledgeable senior official experienced in
servicing Food Service Accounts, Bottlers and Distributors, as
primary liaison with Cadbury. Dr Pepper shall keep Cadbury
through direct contact with this individual, apprised of the
current state of the Food Service business. As part of its
fulfillment of this obligation, Dr Pepper shall provide for
quarterly business review meetings with management
representatives of Cadbury. Participants of the
<PAGE>
Page 17
business review meetings shall be kept advised of business
operations, marketing, advertising and sales promotion
expenditures, planning, pricing, personnel and financial matters
and will be given an updated and general overview of the business
relating to Sunkist and Canada Dry Concentrate and Syrup.
15. Term, Breach and Termination for Cause.
--------------------------------------
(a) This Agreement shall continue in effect for an
initial term commencing April 1, 1991 and ending December 31,
2000. If this Agreement shall be in effect at the end of the
initial term, and if all other requirements of this Agreement are
otherwise satisfied, Dr Pepper shall have the right and option to
renew this Agreement for separate, additional and immediately
successive terms of one (1) year each on the terms and conditions
as provided in this Agreement; provided, however, that at both
the time of the exercise of such an option and at the time at
which the succeeding option or renewal term relating to such
exercise is to commence, any of the following conditions shall
prevail:
(i) Dr Pepper has timely satisfied all
monetary obligations owed by Dr Pepper
to Cadbury throughout the initial term
and any renewals of this Agreement;
(ii) Neither party has given the other party
written notice of its election not to
renew hereunder not less than one
hundred eighty (180) days prior to the
end of the term then expiring; or
(iii) Dr Pepper is not in breach or violation
or otherwise in default of any
obligation or duty owed to Cadbury and
has substantially complied with all of
the terms and conditions of this
Agreement and any amendment thereof or
successor hereto.
(b) If any of the foregoing provisions or conditions
are not satisfied, the exercise of such option shall be null and
void and there shall be no extension of the term of this
Agreement.
<PAGE>
Page 18
Nothing in this paragraph shall be deemed to effect or be
construed as effecting any other termination provision of this
Agreement.
(c) If, at any time during any consecutive six month
period during the term hereof, the volume of Concentrate sold by
Dr Pepper in the Territory falls below 85% of the Concentrate
volume sold by Dr Pepper for the same six month period of the
previous year, than Cadbury may terminate this Agreement with a
six month opportunity to cure by Dr Pepper. If said breach shall
not have been rectified to Cadbury's satisfaction within said six
month period, then this Agreement shall be deemed terminated on
the date immediately following said six month period.
(d) Dr Pepper may terminate this Agreement without
cause at any time after the date hereof, by giving notice to
Cadbury not less than one hundred eighty (180) days in advance of
the termination date.
(e) Either Party may terminate this Agreement, upon
giving the other party thirty (30) days written notice to that
effect subject to the "Redress of Breach" paragraph hereof,
because of a breach of a material provision of this Agreement or
if any one of the following events occur:
i. If the other party makes an assignment for the benefit
of creditors or shall file a voluntary petition in
bankruptcy or shall be adjudicated a bankrupt or
insolvent or shall file any petition or answer seeking
reorganization, arrangement, liquidation or similar
relief or shall file an answer admitting the material
allegations of a petition against it for any such
relief; or
ii. If within sixty (60) days after the commencement
thereof, any proceeding against the other party seeking
reorganization, arrangement, liquidation or similar
relief shall not have been dismissed; or
iii. If any court, tribunal, or government agency should
require directly or indirectly alteration or
modification of any term or condition of this Agreement
to the substantial detriment of a party hereto; or
<PAGE>
Page 19
iv. If the other party dissolves or ceases to do business.
16. Redress of Breach.
-----------------
Notwithstanding Paragraph 15, if either party fails to
fulfill any of its obligations under this Agreement (the
"Defaulting Party"), the other party (the "Notifying Party") may
pursue all rights and remedies provided by law for redress of
breach of an agreement, including without limitation the right to
terminate this Agreement, by giving the Defaulting Party thirty
(30) days written notice thereof, during which period the
Defaulting Party shall be given the opportunity to cure its
default. If such default is not cured within that period or any
extension period thereof, granted in the reasonable discretion of
the Notifying Party, the Notifying Party may initiate any and all
remedies provided by law or by this Agreement including
termination. Should the Notifying Party elect in its sole
discretion, to terminate this Agreement, the termination shall
become effective upon the expiration of the notice period or any
extension period thereof.
17. Obligations on Termination or Expiration. On
----------------------------------------
expiration or termination for any reason, this Agreement and all
rights granted hereunder to Dr Pepper shall forthwith terminate
provided, however, that Dr Pepper shall remain liable for any
damage to Cadbury arising or flowing from its breach or failure
to perform any of its duties, obligations or undertakings owed to
Cadbury under this Agreement, and for any action, suit,
consumer's complaint and the like, arising out of Dr Pepper's
sale of Syrup and Concentrate that causes, among other things,
injuries, sickness and death to consumers, and Cadbury shall be
liable to Dr Pepper for any liability arising out of Cadbury's
breach or failure to perform any of its duties, obligations or
undertakings owed to Dr Pepper under this Agreement. In
addition, on expiration or termination:
<PAGE>
Page 20
(a) Dr Pepper shall not thereafter, directly or
indirectly, represent itself to be or hold itself out as an
authorized agent or licensee of Cadbury for Syrup or Concentrate.
(b) Dr Pepper shall immediately cease and terminate
all uses, in any manner whatsoever, of the Trademarks licensed
hereunder or any colorable imitations thereof, whether in a
trademark sense or not, including use in any corporate,
divisional or any other business name, and Dr Pepper shall take
all necessary steps to disassociate itself from the Trademarks
and also agrees not to register or to use any trademark similar
to or likely to cause confusion with the Trademarks.
(c) No packaging, marketing or promotional materials
identified with the Trademarks will be used or permitted to be
used by Dr Pepper after termination, except to dispose of any
remaining inventories of the Syrup, Concentrate and packaging
materials as set forth below.
(d) In the event of termination of this Agreement
under the provisions of Paragraph 15, Dr Pepper agrees to sell to
Cadbury or its appointee, should Cadbury in its sole discretion,
decide to purchase, any remaining inventories of Syrup and
Concentrate in usable condition at Dr Pepper's actual
manufacturing cost in the case of Concentrate, and at Dr Pepper's
actual cost in the case of Syrup, as well as usable packaging
materials identified with the Trademarks at Dr Pepper's cost.
Cadbury shall not be obliged to buy any such remaining inventory,
and any such remaining inventory not purchased by Cadbury shall
be destroyed by Dr Pepper at Dr Pepper's expense.
(e) Dr Pepper shall immediately cease and terminate
all uses of confidential information or proprietary information
learned by Dr Pepper in connection with this Agreement or during
operations hereunder and shall not disclose any of the same to
any third party.
<PAGE>
Page 21
(f) Any indebtedness or sums of money which may then
be owing or which are to become due and owing by Dr Pepper to
Cadbury and by Cadbury to Dr Pepper shall become due and payable
immediately.
(g) In accordance with Paragraph 4(a) herein, Dr
Pepper shall forthwith transfer and assign all Proprietary
Rights, including, but not limited to, any copyrights it may have
in all the advertisements, promotions and characters used by Dr
Pepper in connection with the marketing of the Syrup and
Concentrate to Cadbury or its appointee by, without limitation,
executing such documents and doing such other acts and things as
may be necessary in the opinion of counsel for Cadbury to
accomplish such transfer in any of the same that it may hold.
18. Assignment and Transfer.
-----------------------
Dr Pepper acknowledges that the rights and duties set
forth in this Agreement are personal in nature and that Cadbury
has entered into this Agreement in reliance on Dr Pepper's
business and sales skills, financial circumstances, capacity,
reputation and other factors deemed appropriate by Cadbury.
Accordingly, neither this Agreement nor any part thereof or
interest therein, may be sold, assigned, transferred, conveyed,
delegated, subcontracted, sublicensed, encumbered or made subject
to a security interest or otherwise disposed of in any manner
whatsoever, including any transfer to a surviving company or a
newly constituted company in the case of a merger or
consolidation (collectively "Assignment"), by Dr Pepper without
the prior written consent of Cadbury. Any such Assignment shall
be void and shall constitute a breach of this Agreement entitling
Cadbury to exercise all of its rights and remedies in the event
of breach, including without limitation, the right exercisable in
Cadbury's sole discretion to terminate this Agreement.
<PAGE>
Page 22
19. Indemnity.
---------
(a) Dr Pepper hereby assumes full responsibility for
and shall indemnify, defend and hold Cadbury and all of its
officers, directors and employees harmless from any liability,
loss, cause of action, expense (including reasonable attorney's
fees and disbursements), claim or fine paid or incurred by or
asserted against Cadbury or its officers, directors and
employees, involving or arising in connection with Dr Pepper's
performance or operations under this Agreement or any failure by
Dr Pepper to meet any obligation to Cadbury relative to this
Agreement or involving or arising out of any injury or death to
any persons or injury or damage to any property or business
resulting from or in connection with activity to be performed by
Dr Pepper in connection with this Agreement, or the preparation,
storage, handling, distribution, sale, transportation or use of
Syrup and Concentrate prepared or sold by or on behalf of Dr
Pepper; provided, however, that the foregoing shall in no way
require any indemnification to the proportional extent that any
liability, loss, expense, claim, cause of action or fine arises
proximately from any negligent act or omission of Cadbury with
respect to its obligations undertaken pursuant to this Agreement.
At its own expense, Cadbury reserves the right to participate by
counsel of its own choosing in any defense which is being
provided to it under the terms of this Paragraph.
(b) Cadbury hereby assumes responsibility for and
shall indemnify, defend and hold Dr Pepper and its officers,
directors and employees harmless from any liability, loss, cause
of action, expense (including reasonable attorney's fees and
disbursements), claim or fine paid or incurred by or asserted
against Dr Pepper or its officers, directors and employees
involving or arising in connection with Cadbury's performance
under this Agreement or involving or arising out of any injury or
death to any persons or injury or damage to any property or
business resulting from or in
<PAGE>
Page 23
connection with activity to be performed by Cadbury in connection
with this Agreement or the use of defective formulae or
components thereof supplied by Cadbury to Dr Pepper for the
production of the Syrup and Concentrate; provided however, that
the foregoing shall in no way require any indemnification to the
proportional extent that any liability, loss, expense, claim,
cause of action or fine arises proximately from any negligent act
or omission of Dr Pepper with respect to its obligations
undertaken pursuant to this Agreement. At its own expense, Dr
Pepper reserves the right to participate by counsel of its own
choosing in any defense which is being provided to it under the
terms of this paragraph.
20. Risk of Loss. Title to the Syrup shipped by Universal
------------
Industries Corporation to Dr Pepper, and the risk of loss thereto
shall pass to Dr Pepper at the time each shipment of such Syrup
is accepted by Dr Pepper at Dr Pepper's production facility in
St. Louis, Missouri. Thereafter, title to said Syrup and
Concentrate and the risk of loss thereto shall remain with Dr
Pepper, and Dr Pepper shall be responsible for all loss involving
the Syrup and Concentrate.
21. Force Majeure. Whenever affirmative performance by
-------------
either Party or any of its obligations hereunder, other than the
payment of money due, is substantially and completely interrupted
or prevented by reason of an act of God, strike, lockout, labor
troubles or other industrial disturbance, transportation
dislocation, shortage of supplies or fuel, casualty, civil strike
or circumstance beyond a reasonable, good faith control of the
Party required to act, such performance shall be excused for the
period during which such state of affairs continues. In the
event that such Force Majeure conditions continue beyond
ninety (90) days, Cadbury shall have the right to terminate this
Agreement by giving Dr Pepper thirty (30) days written notice to
that effect.
22. Limitation of Rights. As more specifically stated in
--------------------
this Agreement, Cadbury has rights to the SUNKIST Trademark
<PAGE>
Page 24
pursuant to a License Agreement between the Sunkist Growers Inc.
and Cadbury Beverages Inc. Dr Pepper agrees and acknowledges
that the rights of Dr Pepper to sell Sunkist Syrup and
Concentrate is limited to the rights granted in said License
Agreement between Cadbury and Sunkist Growers Inc. Dr Pepper
further agrees and acknowledges that notwithstanding any other
provision of this Agreement, in the event said License Agreement
between Cadbury and Sunkist Growers Inc. terminates, Cadbury
shall have the right to forthwith terminate the rights granted by
this Agreement to Dr Pepper regarding the sale of Sunkist Syrup
and Concentrate.
23. Notice. All notices given or required to be given
------
under this Agreement or pursuant hereto shall be in writing and
delivered personally or sent by United States first class,
postage prepaid mail to the address listed herein or at such
other address as a party may, by written notice, designate to the
other party. If delivered personally, the date on which the
notice is personally delivered shall be the date on which the
notice is given; if delivered by mail, the date on which the
notice is mailed shall be deemed to be the date on which the
notice is given:
If to Dr Pepper: If to Cadbury:
Dr Pepper Company Cadbury Beverages Inc.
Attn: Vice President Attn: Robert C. Zapletal
Marketing Fountain Food Service 6 High Ridge Park
8144 Walnut Hill Lane P.O. Box 3800
Dallas, TX 75231-4372 Stamford, CT 06905
With a copy to: With a copy to:
Dr Pepper Company Cadbury Beverages Inc.
Attn: General Counsel Attn: General Counsel
8144 Walnut Hill Lane 6 High Ridge Park
Dallas, TX 75231-4372 P.O. Box 3800
Stamford, CT 06905
<PAGE>
Page 25
24. Sales Personnel. Dr Pepper shall be responsible for
---------------
the hiring of all personnel necessary for the successful
implementation of the terms and conditions contained in this
Agreement. Such personnel shall be deemed employees of Dr
Pepper, and Dr Pepper shall comply with all Federal, state and
local law regarding an employer, and therefore shall be
responsible for all tax withholding required under the law
relating to employees.
25. Waiver. Any waiver by any party of a breach of any
------
provision of this Agreement shall not operate or be construed as
a waiver of any other breach of such provision or of any breach
of any other provision of this Agreement. The failure of a party
to insist upon strict adherence to any term of this Agreement on
one or more occasions shall not be considered a waiver or deprive
that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. Any
waiver must be in writing and signed by the parties.
26. Applicable Law.
--------------
(a) This Agreement shall take effect upon acceptance
and execution by Dr Pepper, and shall be governed, enforced,
applied and interpreted under the laws of the State of New York
applicable to agreements to be performed therein, which laws
shall prevail in the event of any conflicts of law. Dr Pepper
and Cadbury agree that proper jurisdiction and venue shall lie in
New Haven, Connecticut in all actions arising out of this
Agreement.
(b) No right or remedy conferred upon or reserved to
any Party by this Agreement is intended to be, nor shall it be
deemed to be exclusive unless specifically granted or reserved
herein this Agreement. All rights and remedies permitted or
provided by law or equity shall be available to the Parties.
(c) Nothing herein contained shall bar a Party's right
to obtain injunctive relief under normal or usual equity or law
rules, including the applicable rules for obtaining restraining
orders and
<PAGE>
Page 26
preliminary injunctions, against threatened conduct that will
cause a Party loss or damage.
27. Entire Agreement. This Agreement, the documents
----------------
referred to herein and the Exhibits attached hereto shall
supersede and cancel any and all prior existing agreements,
understandings, representations or statements, if any, either
oral or in writing, between the Parties with respect to the
subject matter hereof and contain the entire agreement of, and
all of the covenants and agreements between, the Parties with
reference to the subject matter hereof. No amendment, change or
variance from this Agreement shall be valid or binding on either
Party unless it is made in writing, specifies with particularity
the nature of such modification or amendment, and is signed by
the Parties.
28. Separability. If any provision of this Agreement is
------------
held to be invalid, illegal or unenforceable, the balance of this
Agreement shall remain in effect; and if any provision is
inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances.
29. Headings. The headings in this Agreement are solely
--------
for convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement.
30. Counterparts. This Agreement may be executed in
------------
duplicate counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument.
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Page 27
IN WITNESS WHEREOF, the authorized representatives of the
parties have signed this Agreement on the date written below.
DR PEPPER COMPANY CADBURY BEVERAGES INC.
By:/s/ True H. Knowles By:/s/ Robert Zapletal
---------------------- ----------------------
Title: President of Dr. Pepper, U.S.A. Title: President _______ _______
-------------------------------- -------------------
Date: 3/4/91 Date: 2/25/91
-------------------- --------------------
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Page 28
EXHIBIT "A"
LIST OF POST-MIX FOUNTAIN SYRUPS AND CONCENTRATES
1. SUNKIST ORANGE
2. CANADA DRY BEVERAGES: GINGER ALE
TONIC
SWEET 'SOUR
COLLINS
ALL OTHER CANADA DRY FOUNTAIN
PRODUCTS CARRIED IN POST-MIX
SYRUP FORM
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Page 29
EXHIBIT "B"
TRADEMARKS
1. SUNKIST
2. CANADA DRY
