<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
SARATOGA BEVERAGE GROUP, INC.
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
803436 10 4
(CUSIP Number)
with a copy to:
PETER SHABECOFF FRANCI BLASSBERG
c/o NCP-SBG, L.P. DEBEVOISE & PLIMPTON
60 ARCH STREET, SUITE 1A 875 THIRD AVENUE
GREENWICH, CT 06830 NEW YORK, NY 10022
(203) 862-3200 (212) 909-6000
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
January 5, 2000
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box: / /.
<PAGE> 2
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
NCP-SBG, L.P.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [_]
- --------------------------------------------------------------------------------
3 SEC USE ONLY [_]
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES OF AMERICA
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0 SHARES
SHARES _________________________________________________________________
8 SHARED VOTING POWER
BENEFICIALLY
2,400,217 SHARES
OWNED BY
-----------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0 SHARES
PERSON _________________________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
0 SHARES
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,400,217 SHARES
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43.2%, representing 58.8% of the voting power (see
Item 5(b))
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
"PN"
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE,
RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF
THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE> 3
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
NCP-SBG, L.L.C.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [_]
- --------------------------------------------------------------------------------
3 SEC USE ONLY [_]
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES OF AMERICA
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0 SHARES
SHARES _________________________________________________________________
8 SHARED VOTING POWER
BENEFICIALLY
2,400,217 SHARES
OWNED BY
-----------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0 SHARES
PERSON _________________________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
0 SHARES
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,400,217 SHARES
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43.2%, representing 58.8% of the voting power (see
Item 5(b))
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
"OO"
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE,
RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF
THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
3
<PAGE> 4
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
NORTH CASTLE PARTNERS II, L.P.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [_]
- --------------------------------------------------------------------------------
3 SEC USE ONLY [_]
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES OF AMERICA
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0 SHARES
SHARES _________________________________________________________________
8 SHARED VOTING POWER
BENEFICIALLY
2,400,217 SHARES
OWNED BY
-----------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0 SHARES
PERSON _________________________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
0 SHARES
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,400,217 SHARES
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43.2%, representing 58.8% of the voting power (see
Item 5(b))
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
"PN"
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE,
RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF
THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
4
<PAGE> 5
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
NCP G.P. II, L.P.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [_]
- --------------------------------------------------------------------------------
3 SEC USE ONLY [_]
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES OF AMERICA
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0 SHARES
SHARES _________________________________________________________________
8 SHARED VOTING POWER
BENEFICIALLY
2,400,217 SHARES
OWNED BY
-----------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0 SHARES
PERSON _________________________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
0 SHARES
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,400,217 SHARES
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43.2%, representing 58.8% of the voting power (see
Item 5(b))
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
"PN"
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE,
RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF
THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
5
<PAGE> 6
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
NORTH CASTLE G.P. II, L.L.C
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [_]
- --------------------------------------------------------------------------------
3 SEC USE ONLY [_]
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0 SHARES
SHARES _________________________________________________________________
8 SHARED VOTING POWER
BENEFICIALLY
2,400,217 SHARES
OWNED BY
-----------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0 SHARES
PERSON _________________________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
0 SHARES
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,400,217 SHARES
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43.2%, representing 58.8% of the voting power (see
Item 5(b))
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
"OO"
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE,
RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF
THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
6
<PAGE> 7
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
CHARLES F. BAIRD, JR.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [_]
- --------------------------------------------------------------------------------
3 SEC USE ONLY [_]
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES OF AMERICA
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0 SHARES
SHARES _________________________________________________________________
8 SHARED VOTING POWER
BENEFICIALLY
2,400,217 SHARES
OWNED BY
-----------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0 SHARES
PERSON _________________________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
0 SHARES
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,400,217 SHARES
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [_]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43.2%, representing 58.8% of the voting power (see
Item 5(b))
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
"IN"
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE,
RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF
THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
7
<PAGE> 8
ITEM 1. SECURITY AND ISSUER.
This Statement on Schedule 13D is filed with respect to the Class
A common stock, $.01 par value per share (the "Class A Common Stock"), of
Saratoga Beverage Group, Inc., a Delaware corporation (the "Company") and the
Class B common stock, $.01 par value per share (the "Class B Common Stock" and,
together with the Class A Common Stock, the "Common Stock") of the Company.
The principal executive offices of the Company are located at 11
Geyser Road, Saratoga Springs, New York, 12866.
ITEM 2. IDENTITY AND BACKGROUND.
This Statement on Schedule 13D is being filed jointly by NCP-SBG,
L.P., a Delaware limited partnership ("Purchaser"), NCP-SBG GP, L.L.C., a
Delaware limited liability company ("SBG GP, L.L.C."), North Castle Partners II,
L.P., a Delaware limited partnership ("North Castle Fund"), NCP G.P. II, L.P., a
Delaware limited partnership ("GP II, L.P."), North Castle GP II, L.L.C., a
Delaware limited liability company ("GP II, L.L.C."), and Charles F. Baird, Jr.,
an individual ("Mr. Baird" and, together with Purchaser, SBG GP, L.L.C., North
Castle Fund, GP II, L.P. and GP II, L.L.C., the "Reporting Persons"). The filing
of this Schedule 13D shall not be construed as an admission that any of the
Reporting Persons (other than Purchaser) is, for the purposes of section 13(d)
or 13(g) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), the beneficial owners of any securities covered by this Schedule 13D.
The Reporting Persons (other than Mr. Baird) are private
investment vehicles formed for the purpose of investing in transactions arranged
by North Castle Partners, L.L.C. ("North Castle Partners"), a private investment
firm specializing in acquisition transactions. Purchaser was formed at the
direction of North Castle Partners to effect the proposed transactions described
in Item 4 below and has not engaged in any activities other than those incident
to its formation and such proposed transactions. The principal business address
of each of the Reporting Persons is c/o North Castle Partners, L.L.C., 60 Arch
Street, Greenwich, CT 06830. The present principal occupation of Mr. Baird is
managing director of North Castle Partners. Mr. Baird is a citizen of the United
States.
During the last five years, none of the Reporting Persons has
been (i) convicted in a criminal proceeding (excluding traffic violations and
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 or mandating activities subject to federal or state
securities laws or finding any violation with respect to such laws.
8
<PAGE> 9
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
As more fully described in Item 4 hereof, Purchaser and each of
the stockholders listed on Schedule A hereto (the "Continuing Stockholders")
have entered into separate Voting Agreements (as such term is defined in Item 4)
with respect to the Merger (as described in Item 4).
The Continuing Stockholders each entered into the Voting
Agreements to induce Purchaser to enter into the Merger Agreement (as such term
is defined in Item 4), as such, no funds were expended by any of the Reporting
Persons in connection with the Voting Agreements.
ITEM 4. PURPOSE OF THE TRANSACTION.
On January 5, 2000, Purchaser, NCP-SBG Recapitalization Corp., a
Delaware corporation and a wholly-owned subsidiary of Purchaser ("Mergerco"),
and the Company entered into a Stock Purchase Agreement and Agreement and Plan
of Merger (the "Merger Agreement") providing for the merger of Mergerco with and
into the Company (the "Merger"), whereupon the separate existence of Mergerco
will cease and the Company will continue as the surviving corporation (the
"Surviving Corporation").
At the effective time of the Merger (the "Effective Time"), each
share of Common Stock issued and outstanding immediately prior to the Effective
Time (other than (i) up to 700,000 shares of Common Stock owned by the
Continuing Stockholders, (ii) shares of Common Stock owned by the Company and
(iii) shares of Common Stock subject to dissenters' rights) will be converted
into the right to receive $6.00 in cash without interest. In the Merger, up to
700,000 shares of Common Stock owned by the Continuing Stockholders will be
converted into the right to receive one share of common stock of the Surviving
Corporation. Immediately after the Merger, Purchaser will purchase shares of
Common Stock of the Surviving Corporation (the "Stock Purchase") for a per share
consideration of $6.00. As a result of the Merger and the Stock Purchase,
Purchaser and the Continuing Stockholders will hold approximately 90% and 10% of
the common stock of the Surviving Corporation, respectively.
The obligations of the parties to the Merger Agreement to effect
the Merger are subject to certain conditions, and prior to the Effective Time
Purchaser or the Company may terminate the Merger Agreement under certain
conditions, in each case as set forth in the Merger Agreement.
Because approval of the Company's stockholders is required by
applicable law in order to consummate the Merger, the Company will submit the
Merger to its stockholders
9
<PAGE> 10
for approval. In anticipation of this requirement, concurrently with and as a
further condition to the execution and delivery of the Merger Agreement,
Purchaser and each of the Continuing Stockholders entered into separate Voting
Agreements, each dated as of January 5, 2000 (the "Voting Agreements"). Subject
to the terms and conditions of the Voting Agreements, the Continuing
Stockholders have appointed Purchaser as their irrevocable proxy to vote in the
aggregate 2,400,217 shares (the "Shares") of the Common Stock, representing
approximately 43.2% of the issued and outstanding shares of Common Stock as of
January 4, 2000 (based on the number of shares of Common Stock represented by
the Company in the Merger Agreement), and representing approximately 58.8% of
the aggregate voting power of the Common Stock (see Item 5(b)), in favor of the
Merger and of certain related agreements and actions and against certain other
enumerated actions or agreements. If the Merger Agreement is terminated in
accordance with its terms (including upon acceptance by the Board of Directors
of the Company of a superior acquisition proposal), the covenants and agreements
in the Voting Agreements with respect to the Shares will also terminate at such
time. Subject to the foregoing and to certain exceptions and conditions, the
Continuing Stockholders have agreed pursuant to the Voting Agreements to refrain
from soliciting or responding to certain inquiries or proposals regarding the
Company, to restrictions on transfer of the Shares, to waive any rights of
appraisal available in the Merger with respect to the Shares and to take or
refrain from taking certain other actions. The Voting Agreements provide
Purchaser with sufficient voting power to cause the Merger Agreement to be
adopted and to approve the Merger at a duly convened meeting of the stockholders
of the Company.
At the Effective Time, (i) the certificate of incorporation and
the bylaws of the Company, as in effect immediately prior to the Effective Time,
will be amended and restated as set forth in Exhibits A and B, respectively, of
the Merger Agreement and, as so amended and restated, will be the certificate of
incorporation and bylaws, respectively, of the Surviving Corporation, (ii) the
members of the board of directors of Mergerco at the Effective Time will become
the directors of the Surviving Corporation and (iii) the officers of the Company
at the Effective Time will remain the officers of the Surviving Corporation.
After the Effective Time, pursuant to the Stockholders Agreement, dated as of
January 5, 2000 and effective as of the Effective Time (the "Stockholders
Agreement"), among the Company, Purchaser and the Continuing Stockholders, four
of the directors will be nominated by Purchaser and three directors will be
nominated by the Surviving Corporation's chief executive officer. In addition,
pursuant to the Stockholders Agreement, the Continuing Stockholders have agreed
to certain transfer restrictions on their shares of common stock in the
Surviving Corporation. As contemplated by the Stockholders Agreement, North
Castle and the Continuing Stockholders currently intend that the Surviving
Corporation will serve as the platform company to acquire other companies in the
refrigerated juice industry.
10
<PAGE> 11
If consummated, the Merger and the Stock Purchase will result in
Purchaser and its affiliates becoming the controlling stockholders of the
Company. No shares of the Surviving Corporation will continue to be (i) listed
on the NASDAQ National Market System or (ii) registered under the Exchange Act.
The preceding summary of certain provisions of the Merger
Agreement, the Voting Agreements and the Stockholders Agreement is not intended
to be complete and is qualified in its entirety by reference to the full text of
such agreements, copies of which are incorporated herein by reference.
Other than as described above, none of the Reporting Persons has
any plans or proposals that relate to or would result in any of the actions
described in this Item 4 (although subject to the provisions of the Merger
Agreement, they reserve the right to develop such plans).
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) and (b). As of January 5, 2000, no Reporting Person owned any
shares of Common Stock.
However, as of January 5, 2000, under the definition of
"beneficial ownership" as set forth in Rule 13d-3 under the Exchange Act, by
virtue of the terms of the Voting Agreements, Purchaser may be deemed to have
beneficially owned the Shares subject to the Voting Agreements, constituting in
the aggregate 2,400,217 (or approximately 43.2%) of the outstanding shares of
Common Stock (based on the number of shares of Common Stock represented by the
Company in the Merger Agreement as outstanding as of January 4, 2000).
Of the Shares subject to the Voting Agreements, 1,877,262 are
Class A Common Stock and 522,955 are Class B Common Stock. Each share of Class A
Common Stock entitles the holder to one vote and each share of Class B Common
Stock entitles the holder to five votes at each annual or special meeting of
stockholders, in the case of any written consent of stockholders, and for all
other purposes, including the election of directors of the Company. The Class A
Common Stock and Class B Common Stock are substantially identical except for
disparity in voting power, and the holders of Class A Common Stock and Class B
Common Stock vote as a single class on all matters submitted to a vote of
stockholders (including the Merger) except as otherwise provided by law. Due to
the disparate voting power of the Class A Common Stock and Class B Common Stock,
the Shares subject to the Voting Agreements as to which Purchaser may be deemed
to have beneficial ownership represent 58.8% of the aggregate voting power of
the Company.
11
<PAGE> 12
None of the Reporting Persons has any right to dispose or direct
the disposition of any of the Shares, except that the Voting Agreements impose
certain limitations on transfer of the Shares by the Continuing Stockholders.
The general partner of Purchaser is SBG, L.L.C. The sole member
of SBG, L.L.C. is North Castle Fund. The general partner of North Castle Fund is
GP II, L.P. The general partner of GP II, L.P. is GP II, L.L.C. The sole member
of GP II, L.L.C. is Mr. Baird. The action of the general partner or sole member
of each such entity is sufficient to cause the limited partnership or limited
liability company, as applicable, to take action. Therefore, Mr. Baird and each
such entity may be deemed to have the shared power to direct the voting of the
Shares subject to the Voting Agreements. Mr. Baird is the senior managing member
of North Castle Partners and, as such, has management control of North Castle
Partners. Each Reporting Person other than Purchaser disclaims beneficial
ownership of the Shares.
(c) Except as set forth in this Item 5, to the best knowledge of
each Reporting Person, none of the Reporting Persons has beneficial ownership
of, or has engaged in any transaction during the past 60 days in, any shares of
Common Stock.
(d) None of the Reporting Persons, to the best knowledge of each
Reporting Person, has the right to receive or to the power to direct the receipt
of dividends from, or the proceeds from the sale of, the Shares.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
Except as set forth in this Statement, to the best knowledge of
the Reporting Persons, there are no other contracts, arrangements,
understandings or relationships (legal or otherwise) among the persons named in
Item 2 and between such persons and any person with respect to any securities of
the Company, including, but not limited to, transfer or voting of any of the
securities of the Company, joint ventures, loan or option arrangements, puts or
calls, guarantees of profits, division of profits or loss, or the giving or
withholding of proxies, or a pledge or contingency, the occurrence of which
would give another person voting power over the securities of the Company.
12
<PAGE> 13
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
1. Stock Purchase Agreement and Agreement and Plan of Merger, dated as of
January 5, 2000, among Saratoga Beverage Group, Inc., NCP-SBG
Recapitalization Corp.
and NCP-SBG, L.P.
2. Voting Agreement, dated as of January 5, 2000, between NCP-SBG, L.P. and
Robin Prever.
3. Voting Agreement, dated as of January 5, 2000, between NCP-SBG, L.P. and
Anthony Malatino.
4. Voting Agreement, dated as of January 5, 2000, between NCP-SBG, L.P. and
Steel Partners II, L.P.
5. Voting Agreement, dated as of January 5, 2000, between NCP-SBG, L.P. and
Warren G. Lichtenstein.
6. Voting Agreement, dated as of January 5, 2000, between NCP-SBG, L.P. and
Steven Bogen.
7. Voting Agreement, dated as of January 5, 2000, between NCP-SBG, L.P. and
Pershing Securities Limited.
8. Voting Agreement, dated as of January 5, 2000, between NCP-SBG, L.P. and
Jurg Walker.
9. Stockholders Agreement, dated as of January 5, 2000, among Saratoga
Beverage Group, Inc., NCP-SBG, L.P., Robin Prever, Anthony Malatino,
Steven Bogen, Steel Partners II, L.P., Warren G. Lichtenstein, Jurg
Walker and Pershing Securities Limited.
10. Joint Filing Agreement, dated January 14, 2000, among NCP-SBG, L.P.,
NCP-SBG G.P., L.L.C., North Castle Partners II, L.P., NCP G.P. II, L.P.,
North Castle G.P. II, L.L.C. and Charles F. Baird, Jr.
11. Power of Attorney, dated January 14, 2000, granted by NCP-SBG, L.P.,
NCP-SBG G.P., L.L.C., North Castle Partners II, L.P., NCP G.P. II, L.P.,
North Castle G.P. II, L.L.C., and Charles F. Baird, Jr.
13
<PAGE> 14
SIGNATURE
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.
Dated: January 18, 2000
NCP-SBG, L.P.
By: NCP-SBG G.P., L.L.C., its general partner
By: /s/ Peter J. Shabecoff
--------------------------------------------
Name: Peter J. Shabecoff
Title: Executive Vice President
NCP-SBG G.P., L.L.C.
By: /s/ Peter J. Shabecoff
--------------------------------------------
Name: Peter J. Shabecoff
Title: Executive Vice President
NORTH CASTLE PARTNERS II, L.P.
By: NCP G.P. II, L.P., its general partner
By: NORTH CASTLE G.P. II, L.L.C., its
general partner
By: /s/ Peter J. Shabecoff
---------------------------------
Name: Peter J. Shabecoff
Title: Managing Director
<PAGE> 15
NCP G.P. II, L.P.
By: NORTH CASTLE G.P. II, L.L.C., its general
partner
By: /s/ Peter J. Shabecoff
--------------------------------------------
Name: Peter J. Shabecoff
Title: Managing Director
NORTH CASTLE G.P. II, L.L.C.
By: /s/ Peter J. Shabecoff
--------------------------------------------
Name: Peter J. Shabecoff
Title: Managing Director
/s/ Charles F. Baird, Jr.
--------------------------------------------
CHARLES F. BAIRD, JR.
<PAGE> 16
SCHEDULE A
<TABLE>
<CAPTION>
CLASS A CLASS B
STOCKHOLDER NAME AND ADDRESS SHARES SHARES
- -------------------------------------------------------------------------------
<S> <C> <C>
Robin Prever 150,325 167,960
4301 North Ocean Boulevard
A-1703
Boca Raton, Florida 33431
- -------------------------------------------------------------------------------
Anthony Malatino 363,132 354,995
c/o Morgan Stanley Dean Witter
340 Broadway
Saratoga Springs, New York 12866
- -------------------------------------------------------------------------------
Steven Bogen 386,793 None
81 Dahlia Street
Staten Island, New York 10312
- -------------------------------------------------------------------------------
Steel Partners II, L.P. 506,258 None
150 East 52nd Street
21st Floor
New York, New York 10022
- -------------------------------------------------------------------------------
Warren G. Lichtenstein 46,254 None
c/o Steel Partners II, L.P.
150 East 52nd Street
21st Floor
New York, New York 10022
- -------------------------------------------------------------------------------
Pershing Securities Limited 200,000 None
Capstan House
#1 Clove Crescent
East India Dock
London E14 2BH
England
- -------------------------------------------------------------------------------
Jurg Walker 224,500 None
c/o Investa, A.G.
Harestrasse 4
Birsfelden, Switzerland 4127
- -------------------------------------------------------------------------------
TOTAL 2,400,217 522,955
- -------------------------------------------------------------------------------
</TABLE>
<PAGE> 17
INDEX OF EXHIBITS
1. Stock Purchase Agreement and Agreement and Plan of Merger, dated as of
January 5, 2000, among Saratoga Beverage Group, Inc., NCP-SBG
Recapitalization Corp. and NCP-SBG, L.P.
2. Voting Agreement, dated as of January 5, 2000, between NCP-SBG, L.P. and
Robin Prever.
3. Voting Agreement, dated as of January 5, 2000, between NCP-SBG, L.P. and
Anthony Malatino.
4. Voting Agreement, dated as of January 5, 2000, between NCP-SBG, L.P. and
Steel Partners II, L.P.
5. Voting Agreement, dated as of January 5, 2000, between NCP-SBG, L.P. and
Warren G. Lichtenstein.
6. Voting Agreement, dated as of January 5, 2000, between NCP-SBG, L.P. and
Steven Bogen.
7. Voting Agreement, dated as of January 5, 2000, between NCP-SBG, L.P. and
Pershing Securities Limited.
8. Voting Agreement, dated as of January 5, 2000, between NCP-SBG, L.P. and
Jurg Walker.
9. Stockholders Agreement, dated as of January 5, 2000, among Saratoga
Beverage Group, Inc., NCP-SBG, L.P., Robin Prever, Anthony Malatino,
Steven Bogen, Steel Partners II, L.P., Warren G. Lichtenstein, Jurg
Walker and Pershing Securities Limited.
10. Joint Filing Agreement, dated January 14, 2000, among NCP-SBG, L.P.,
NCP-SBG G.P., L.L.C., North Castle Partners II, L.P., NCP G.P. II, L.P.,
North Castle G.P. II, L.L.C. and Charles F. Baird, Jr.
11. Power of Attorney, dated January 14, 2000, granted by NCP-SBG, L.P.,
NCP-SBG G.P., L.L.C., North Castle Partners II, L.P., NCP G.P. II, L.P.,
North Castle G.P. II, L.L.C., and Charles F. Baird, Jr.
<PAGE> 1
================================================================================
STOCK PURCHASE AGREEMENT AND
AGREEMENT AND PLAN OF MERGER
among
SARATOGA BEVERAGE GROUP, INC.
NCP-SBG RECAPITALIZATION CORP.
and
NCP-SBG, L.P.
Dated as of January 5, 2000
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C>
ARTICLE I
MERGER; PURCHASE OF SHARES
1.1 Merger; Purchase of Shares..........................................................................2
1.2 Issuance of Purchased Shares and Cash Payment.......................................................2
1.3 Conversion or Cancellation of Shares................................................................3
1.4 Exchange of Certificates............................................................................4
1.5 Options; Warrants; 2000 Note........................................................................6
1.6 Dissenting Shares...................................................................................7
1.7 Certificate of Incorporation; By-Laws...............................................................7
1.8 Directors and Officers of the Surviving Corporation.................................................7
1.9 Effective Time......................................................................................8
1.10 Closing............................................................................................8
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
2.1 Corporate Status, etc...............................................................................8
2.2 Authorization, etc..................................................................................9
2.3 No Conflicts; Consents..............................................................................9
2.4 Capitalization.....................................................................................10
2.5 Investments........................................................................................11
2.6 Undisclosed Liabilities, etc.......................................................................11
2.7 Absence of Changes.................................................................................12
2.8 Tax Matters........................................................................................12
2.9 Assets.............................................................................................14
2.10 Real Property.....................................................................................15
2.11 Material Contracts................................................................................15
2.12 Intellectual Property.............................................................................15
2.13 Insurance.........................................................................................17
2.14 Litigation........................................................................................17
2.15 Compliance with Laws and Instruments..............................................................17
2.16 Environmental Matters.............................................................................18
2.17 Employees, Labor Matters, etc.....................................................................19
</TABLE>
ii
<PAGE> 3
<TABLE>
<S> <C>
2.18 Employee Benefit Plans and Related Matters; ERISA.................................................19
2.19 Product Liability.................................................................................21
2.20 Brokers, Finders, etc.............................................................................21
2.21 SEC Reports and Financial Statements..............................................................21
2.22 Proxy Statement; Exchange Act Schedules...........................................................22
2.23 Required Vote by Company Stockholders.............................................................23
2.24 Fairness Opinion..................................................................................23
2.25 Takeover Statutes.................................................................................23
2.26 Substantial Suppliers and Customers...............................................................23
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF MERGERCO AND PURCHASER
3.1 Status; Authorization, etc.........................................................................24
3.2 No Conflicts, etc..................................................................................24
3.3 Litigation.........................................................................................25
3.4 Brokers, Finders, etc..............................................................................25
3.5 No Prior Business..................................................................................25
3.6 Financing..........................................................................................25
3.7 Proxy Statement; Exchange Act Schedules............................................................26
3.8 Beneficial Ownership of Shares.....................................................................26
ARTICLE IV
COVENANTS OF THE COMPANY
4.1 Conduct of the Business............................................................................26
4.2 No Solicitation....................................................................................27
4.3 Access and Information.............................................................................29
4.4 Further Assurances.................................................................................29
ARTICLE V
COVENANTS OF MERGERCO, PURCHASER
AND THE COMPANY
5.1 Public Announcements...............................................................................29
5.2 Further Actions....................................................................................29
</TABLE>
iii
<PAGE> 4
<TABLE>
<S> <C>
5.3 Company Stockholder Approval; Proxy Statement......................................................30
5.4 Directors' and Officers' Insurance and Indemnification.............................................32
5.5 Stockholder Litigation.............................................................................33
5.6 Recapitalization...................................................................................33
5.7 Certain Employee Matters...........................................................................33
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions to Obligations of Each Party............................................................34
6.2 Conditions to Obligations of MergerCo and Purchaser................................................35
6.3 Conditions to Obligations of the Company...........................................................37
ARTICLE VII
TERMINATION
7.1 Termination........................................................................................38
7.2 Effect of Termination..............................................................................40
ARTICLE VIII
DEFINITIONS
8.1 Definition of Certain Terms........................................................................40
ARTICLE IX
MISCELLANEOUS
9.2 Expenses...........................................................................................52
9.3 Severability.......................................................................................53
9.4 Notices............................................................................................53
9.5 Entire Agreement...................................................................................54
9.6 Counterparts; Headings.............................................................................55
9.7 Governing Law, etc.................................................................................55
9.8 Binding Effect; No Third Party Beneficiaries.......................................................56
9.9 Assignment.........................................................................................56
9.10 Amendment; Waivers, etc...........................................................................56
</TABLE>
iv
<PAGE> 5
<TABLE>
<S> <C>
9.11 Attorneys' Fees...................................................................................57
</TABLE>
EXHIBIT INDEX
Exhibit A Form of Amended and Restated Certificate of Incorporation of the
Company
Exhibit B Form of Amended and Restated By-laws of the Company
Exhibit C Form of Stockholders Agreement
Exhibit D Form of Registration Rights Agreement
Exhibit E Form of Employment Agreement
Exhibit F Form of Consulting Agreement
Exhibit G Form of Voting Agreement
ANNEX
Annex A List of Continuing Stockholders; Cashed Out Shares & Rollover Shares
v
<PAGE> 6
STOCK PURCHASE AGREEMENT AND AGREEMENT AND PLAN OF MERGER, dated as of
January 5, 2000, among NCP-SBG, L.P., a Delaware limited partnership (the
"Purchaser"), NCP-SBG Recapitalization Corp., a Delaware corporation
("MergerCo"), and Saratoga Beverage Group, Inc., a Delaware corporation (the
"Company"). Capitalized terms used herein have the meanings ascribed in Section
8.1.
WITNESSETH:
WHEREAS, the Board of Directors of MergerCo has approved, and deems it
advisable and in the best interests of the stockholders of MergerCo to
participate in the recapitalization (the "Recapitalization") of the Company,
upon the terms and subject to the conditions set forth herein;
WHEREAS, the Board of Directors of the Company, based upon the unanimous
recommendation of a special committee of independent directors of the Company
(the "Special Committee"), has approved, and deems it advisable and in the best
interests of the stockholders of the Company to consummate, the
Recapitalization of the Company, upon the terms and subject to the conditions
set forth herein;
WHEREAS, in furtherance of such Recapitalization, the Board of Directors
of the Company, based upon the unanimous recommendation of the Special
Committee, and the Board of Directors of MergerCo have each approved this
Agreement and the merger of MergerCo with and into the Company in accordance
with the terms of this Agreement and the Delaware General Corporation Law (the
"DGCL");
WHEREAS, in connection with the Recapitalization, Purchaser desires to
purchase and the Company desires to issue and sell to Purchaser shares of
common stock of the Company on the terms and conditions set forth in this
Agreement; and
WHEREAS, MergerCo has entered into voting agreements, dated as of the date
hereof (the "Voting Agreements"), with each of the Continuing Stockholders (as
defined herein), pursuant to which the Continuing Stockholders agree to vote
their shares of common stock of the Company in favor of the Merger (as defined
herein);
NOW, THEREFORE, in consideration of the foregoing premises and respective
covenants, representations, warranties and agreements made herein and of the
mutual benefits to be derived therefrom, and for other good and valuable
consideration the receipt and adequacy of which is hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree as follows:
<PAGE> 7
ARTICLE I
MERGER; PURCHASE OF SHARES
1.1 Merger; Purchase of Shares. (a) On the terms and subject to the
conditions of this Agreement and in accordance with the applicable provisions
of the DGCL, at the Effective Time, MergerCo shall be merged (the "Merger")
with and into the Company and the separate corporate existence of MergerCo
shall cease. After the Merger, the Company shall continue as the surviving
corporation (sometimes hereinafter referred to as the "Surviving Corporation")
and shall continue to be governed by the laws of the State of Delaware. The
Merger shall have the effect as provided in the applicable provisions of the
DGCL. Without limiting the generality of the foregoing, upon the Merger, all
the rights, privileges, immunities, powers and franchises of the Company and
MergerCo shall vest in the Surviving Corporation and all restrictions,
obligations, duties, debts and liabilities of the Company and MergerCo shall be
the restrictions, obligations, duties, debts and liabilities of the Surviving
Corporation.
(b) On the terms and subject to the conditions of this Agreement,
immediately after the Effective Time, the Surviving Corporation shall, in
consideration for the payment of the Purchase Price, issue, transfer, deliver
and sell to Purchaser and Purchaser shall purchase and accept from the
Surviving Corporation (the "Stock Purchase") the Purchased Shares. The
"Purchase Price" shall mean $28,660,000, provided that if the full amount (the
"Debt Commitment Amount") of the debt financing contemplated by the letters
referred to in Section 3.6(ii) and (iii) is unavailable at the Effective Time
from the financial institutions party to such letters or from other financing
sources on terms substantially similar to the terms contained in such letters
or on less favorable terms that are acceptable to Purchaser, then the "Purchase
Price" shall equal the sum of (x) $28,660,000 and (y) 90% of the positive
difference between (A) the Debt Commitment Amount and (B) the amount of debt
financing actually obtained at the Effective Time, provided, further, that the
"Purchase Price" shall not exceed $38,660,000 under any circumstance. Purchaser
shall provide written notice to the Company two Business Days prior to the
Effective Time of the Purchase Price.
1.2 Issuance of Purchased Shares and Cash Payment. At the Closing (i) the
Surviving Corporation shall deliver to Purchaser certificates representing the
Purchased Shares, duly authorized and issued in blank, free and clear of all
Liens and (ii) Purchaser shall deliver or cause to be delivered to the
Surviving Corporation the Purchase Price by wire transfer of immediately
available funds, to an account or accounts designated at least three Business
Days prior to the Closing by the Company in a written notice to Purchaser.
2
<PAGE> 8
1.3 Conversion or Cancellation of Shares. The manner of converting or
canceling shares of Company Common Stock and shares of common stock of MergerCo
in the Merger shall be as follows:
(a) At the Effective Time, each share of Class A Common Stock of the
Company, par value $.01 per share (the "Class A Common Stock") and Class B
Common Stock of the Company, par value $.01 per share (the "Class B Common
Stock", and together with the Class A Common Stock, the "Company Common Stock")
that is issued and outstanding immediately prior to the Effective Time (other
than shares that are held by Stockholders (the "Dissenting Stockholders")
exercising appraisal rights with respect to such shares pursuant to Section 262
of the DGCL) shall, by virtue of the Merger and without any action on the part
of the holder thereof, be converted into the right to receive, without
interest:
(i) with respect to each such share held by any Non-Continuing
Stockholder, cash in an amount equal to the Per Share Merger Consideration;
(ii) with respect to each Cashed Out Share held by any Continuing
Stockholder, cash in an amount equal to the Per Share Merger Consideration;
and
(iii) with respect to each Rollover Share held by any Continuing
Stockholder, a number of shares of Surviving Corporation Common Stock equal
to the quotient of (x) the Per Share Merger Consideration divided by (y) the
Per Share Amount.
(b) Notwithstanding the foregoing, no fractions of a share of Surviving
Corporation Common Stock shall be issued in the Merger, but in lieu thereof
each holder of Company Common Stock otherwise entitled to a fraction of a share
of Surviving Corporation Common Stock shall, upon surrender of his or her
certificate or certificates, be entitled to receive an amount of cash (without
interest) determined by multiplying the Per Share Amount by the fractional
share interest to which such holder would otherwise be entitled.
(c) At the Effective Time, each share of Company Common Stock issued and
held in the Company's treasury immediately prior to the Effective Time shall,
by virtue of the Merger and without any action on the part of the holder
thereof, cease to be outstanding, shall be canceled and retired without payment
of any consideration therefor and shall cease to exist.
3
<PAGE> 9
(d) At the Effective Time, each share of common stock, par value $.01 per
share, of MergerCo issued and outstanding immediately prior to the Effective
Time shall, by virtue of the Merger and without any action on the part of
MergerCo or the holders thereof, cease to be outstanding, shall be canceled and
retired without payment of any consideration therefor and shall cease to exist.
(e) At the Effective Time, the stock transfer books of the Company shall
be closed and there shall be no transfers on the stock transfer books of the
Surviving Corporation of shares of Company Common Stock that were outstanding
immediately prior to the Effective Time.
1.4 Exchange of Certificates. (a) Prior to the Effective Time, MergerCo
shall designate the Company's registrar and transfer agent or such other bank
or trust company as may be approved in writing by the Company (which approval
shall not be unreasonably withheld), to act as exchange agent for the holders
of shares of Company Common Stock in connection with the Merger (the "Exchange
Agent"), to receive the certificates representing the shares of Surviving
Corporation Common Stock and the funds to which holders of shares of Company
Common Stock shall become entitled pursuant to this Article I. On or prior to
the Effective Time, the Company will deposit in trust with the Exchange Agent,
for the benefit of holders of Company Common Stock, (i) the funds necessary to
complete the payments contemplated by this Article I and (ii) the certificates
representing the shares of Surviving Corporation Common Stock to be issued
hereunder.
(b) At the Effective Time, the Surviving Corporation will instruct the
Exchange Agent to promptly, and in any event not later than three Business Days
following the Effective Time, mail (and to make available for collection by
hand) to each holder of record of a certificate or certificates, which
immediately prior to the Effective Time represented outstanding shares of
Company Common Stock, whose shares were converted pursuant to Section 1.3 into
the right to receive the Merger Consideration (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and
title to such certificates shall pass, only upon delivery of such certificates
to the Exchange Agent and shall be in such form and have such other provisions
as MergerCo and the Company may reasonably specify) and (ii) instructions for
use in effecting the surrender of such certificates in exchange for the Merger
Consideration (which shall provide that, at the election of the surrendering
holder, such certificates may be surrendered, and payment therefor collected,
by hand delivery). Upon surrender of such certificates for cancellation to the
Exchange Agent or to such other agent or agents as may be appointed by the
Company, together with such letter of transmittal, duly executed, the holder of
such certificates shall be entitled to receive in exchange therefor the Merger
Consideration specified in Section 1.3 for each share of Company Common Stock
formerly represented
4
<PAGE> 10
by such certificate, to be mailed (or made available for collection by hand if
so elected by the surrendering holder) within three Business Days of receipt
thereof, and the certificate so surrendered shall forthwith be cancelled. 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, it shall be a
condition of payment that the certificate so surrendered shall be properly
endorsed or shall be otherwise in proper form for transfer and that the person
requesting such payment shall have paid any transfer and other taxes required
by reason of 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 tax either has been
paid or is not applicable. Until surrendered as contemplated by this Section
1.4, each certificate (other than certificates representing Dissenting Shares)
shall be deemed at any time after the Effective Time to represent only the
right to receive the Merger Consideration as contemplated by this Section 1.4.
(c) In the event any certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such certificate to be lost, stolen or destroyed, the Exchange Agent will issue
in exchange for such lost, stolen or destroyed certificate the Merger
Consideration deliverable in respect thereof as determined in accordance with
this Article I, provided that the Person to whom the Merger Consideration is
paid shall, as a condition precedent to the payment thereof, give the Surviving
Corporation a bond in such sum as it may direct or otherwise indemnify the
Surviving Corporation in a manner satisfactory to it against any claim that may
be made against the Surviving Corporation with respect to the certificate
claimed to have been lost, stolen or destroyed.
(d) Any portion of the funds deposited with the Exchange Agent (and the
proceeds of any interest and other income received by the Exchange Agent in
respect of all such funds) and any certificates representing shares of
Surviving Corporation Common Stock that remain unclaimed by the former
stockholders of the Company one year after the Effective Time shall be
delivered to the Surviving Corporation. Any former stockholders of the Company
who have not theretofore complied with this Article I shall thereafter look
only to the Surviving Corporation for payment of any Merger Consideration that
may be payable upon surrender of any certificates such stockholder holds, as
determined pursuant to this Agreement, without any interest thereon.
(e) None of MergerCo, the Company, the Surviving Corporation, the Exchange
Agent or any other Person shall be liable to any former holder of shares of
Company Common Stock for any amount properly delivered to a public official
pursuant to applicable abandoned property, escheat or similar laws.
5
<PAGE> 11
(f) Any payment or issuance made pursuant to this Section 1.4 shall be
subject to and made net of applicable withholding Taxes.
1.5 Options; Warrants; 2000 Note. (a) At or immediately prior to the
Effective Time, all options to purchase shares of Company Common Stock (each
such option, a "Company Stock Option") outstanding under the Company's 1993
Stock Option Plan, as amended, the Company's 1998 Stock Option Plan and any
other stock option (or other equity-related award) or compensation plan or
arrangement of the Company (collectively, the "Company Stock Option Plans"),
and any other outstanding Company Stock Options, whether or not exercisable or
vested, shall be repurchased or canceled, and the Surviving Corporation shall
pay each such holder at or promptly after the Effective Time for each such
option an amount in cash determined by multiplying (i) the excess, if any, of
the Per Share Merger Consideration over the per share exercise price of such
option by (ii) the number of shares of Company Common Stock such holder could
have purchased (assuming full vesting of all options) had such holder exercised
such options in full immediately prior to the Effective Time, such amount
subject to any required withholding. The Company shall use its best efforts to
obtain all necessary consents of the holders of Company Stock Options to the
cancellation or repurchase of such options.
(b) At or immediately prior to the Effective Time, all warrants to
purchase shares of Company Common Stock (each such warrant, a "Company Stock
Warrant") outstanding under the Warrant issued to Global Financial Group and
any other outstanding Company Stock Warrant, whether or not exercisable or
vested, shall be repurchased or canceled, and the Surviving Corporation shall
pay each such holder at or promptly after the Effective Time for each such
warrant an amount in cash determined by multiplying (i) the excess, if any, of
the Per Share Merger Consideration over the per share exercise price of such
warrant by (ii) the number of shares of Company Common Stock such holder could
have purchased (assuming full vesting of all warrants) had such holder
exercised such warrants in full immediately prior to the Effective Time, such
amount subject to any required withholding. The Company shall use its best
efforts to obtain all necessary consents of the holders of Company Stock
Warrants to the cancellation or repurchase of such warrants on the terms
provided in the preceding sentence.
(c) At or immediately prior to the Effective Time, the 2000 Note shall be
repurchased or canceled, and the Surviving Corporation shall pay the holder
thereof at or promptly after the Effective Time an amount in cash equal to (x)
the quotient of (I) 1.5 million plus a number equal to the amount of accrued
but unpaid interest on the 2000 Note through the Effective Time divided by (ii)
3.5, multiplied by (y) the Per Share Merger Consideration, such amount subject
to any required withholding. The Company shall use its best efforts to obtain
all necessary consents of the holder of the 2000 Note to
6
<PAGE> 12
the cancellation or repurchase of the 2000 Note on the terms provided in the
preceding sentence.
1.6 Dissenting Shares. Notwithstanding anything in this Agreement to the
contrary, shares of Company Common Stock that are issued and outstanding
immediately prior to the Effective Time and that are held by stockholders who
have perfected any dissenters' rights provided under the DGCL, if applicable
(the "Dissenting Shares"), shall not be converted into or be exchangeable for
the right to receive the Merger Consideration unless and until such holder
shall have failed to perfect or shall have effectively withdrawn or lost such
holder's right to appraisal and payment under the DGCL. If such holder shall
have so failed to perfect or shall have effectively withdrawn or lost such
right, such holder's shares shall thereupon be deemed to have been converted
into and to have become exchangeable for, at the Effective Time, the right to
receive the Merger Consideration, without any interest thereon.
1.7 Certificate of Incorporation; By-Laws. (a) The certificate of
incorporation of the Company as in effect immediately prior to the Effective
Time shall, in accordance with the terms thereof and the DGCL, be amended and
restated as set forth in Exhibit A and, as so amended, shall be the certificate
of incorporation of the Surviving Corporation until duly amended in accordance
with the terms thereof and the DGCL.
(b) By-laws. The by-laws of the Company, as in effect immediately prior to
the Effective Time shall, in accordance with the terms thereof, the certificate
of incorporation and applicable law, be amended and restated as set forth in
Exhibit B and, as so amended, shall be the by-laws of the Surviving Corporation
until thereafter amended as provided by applicable law, the certificate of
incorporation of the Surviving Corporation and such by-laws.
1.8 Directors and Officers of the Surviving Corporation. (a) The directors
of MergerCo immediately prior to the Effective Time shall, from and after the
Effective Time, be the directors of the Surviving Corporation until their
successors shall have been duly elected or appointed and qualified or until
their earlier death, resignation or removal in accordance with the Surviving
Corporation's certificate of incorporation and by-laws.
(b) The officers of the Company immediately prior to the Effective Time
shall be the initial officers of the Surviving Corporation and shall hold
office until their respective successors are duly elected and qualified, or
their earlier death, resignation or removal.
7
<PAGE> 13
1.9 Effective Time. On the Closing Date, MergerCo and the Company will
cause the appropriate certificate of merger (the "Certificate of Merger") to be
executed and filed with the Secretary of State of the State of Delaware (the
"Delaware Secretary of State") in such form and executed as provided in Section
251(c) of the DGCL. The Merger shall become effective on the date on which the
Certificate of Merger has been duly filed with the Delaware Secretary of State
(the "Effective Time").
1.10 Closing. The closing of the Merger and the Stock Purchase (the
"Closing") shall take place at the offices of Debevoise & Plimpton, 875 Third
Avenue, New York, New York, at 10:00 a.m., New York time, on a date to be
specified by the parties, which shall be no later than the second Business Day
after satisfaction or waiver of all of the conditions set forth in Article VI
hereof. The "Closing Date" shall be the date the Closing actually occurs.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
As of the date hereof and as of the Closing Date, the Company represents
and warrants to MergerCo and Purchaser as follows:
2.1 Corporate Status, etc. (a) Organization. Each of the Company and its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has full corporate power
and authority to conduct the Business and to own or lease and to operate its
properties as and in the places where the Business is conducted and such
properties are owned, leased or operated.
(b) Qualification. Each of the Company and its Subsidiaries is duly
qualified to do business and in good standing as a foreign corporation in all
jurisdictions in which the nature of its business or the properties owned or
leased by it makes such qualification necessary, except for such failures to be
so qualified and in good standing as would not have, individually or in the
aggregate, a Material Adverse Effect. Schedule 2.1(b) of the disclosure letter
delivered by the Company to the Purchaser concurrently with the execution and
delivery of this Agreement (the "Company Disclosure Letter") lists all
jurisdictions in which such qualification is necessary.
(c) Organizational Documents. Purchaser has been furnished complete and
correct copies of the certificate of incorporation and by-laws or other
organizational
8
<PAGE> 14
documents of the Company and each of its Subsidiaries, as amended, modified or
waived through and in effect on the date hereof (the "Organizational
Documents"). Each of the Organizational Documents is in full force and effect.
Neither the Company nor any of its Subsidiaries is in violation of any of the
provisions of its Organizational Documents. The minute books of the Company and
each of its Subsidiaries, which have heretofore been made available to
Purchaser, correctly reflect in all material respects for each (i) all
corporate actions taken by the stockholders that such stockholders were
required by applicable Law to take, (ii) all corporate actions taken by the
directors that such board of directors was required by applicable Law to take
and (iii) all other corporate actions taken by the stockholders and directors
(including by any committee of the board of directors).
2.2 Authorization, etc. The Company has full corporate power and authority
to execute and deliver this Agreement and the Ancillary Agreements to which it
is a party, and, subject to the approval of its stockholders as contemplated by
Section 5.3 hereof, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Ancillary Agreements to which the Company is
a party, the performance by the Company of its obligations hereunder and
thereunder, and the consummation of the transactions contemplated hereby and
thereby, have been duly recommended by the Special Committee and duly
authorized by the Board of Directors of the Company and, other than adoption
and approval of this Agreement by the holders of a majority, by vote, of the
outstanding shares of the Class A Common Stock and Class B Common Stock voting
as a single class (the "Company Stockholder Approval"), no other corporate
proceedings on the part of the Company are necessary to authorize the execution
and delivery of this Agreement and the Ancillary Agreements by the Company and
the consummation of the transactions contemplated hereby and thereby other than
the filing of the Certificate of Merger with the Delaware Secretary of State.
The Company has duly executed and delivered this Agreement and the Ancillary
Agreements to which it shall be a party. This Agreement and each such Ancillary
Agreement constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
2.3 No Conflicts; Consents. (a) Except as set forth on Schedule 2.3(a) of
the Company Disclosure Letter, neither the execution, delivery and performance
of this Agreement and the Ancillary Agreements by the Company, nor the
consummation of the transactions contemplated hereby and thereby, will conflict
with, contravene, result in a violation or breach of or default under (with or
without the giving of notice or the lapse of time or both), give rise to a
right or claim of termination, amendment, modification, vesting, acceleration
or cancellation of any right or obligation or loss of any material benefit
under, result in the creation of any Lien (or any obligation to create any
Lien)
9
<PAGE> 15
upon, or give rise to the creation of a right or claim by any Person other than
the Company to, any of the Assets under, (i) any Law applicable to the Company
or its Subsidiaries, or any of their respective properties or assets, (ii) any
provision of any of the Organizational Documents or (iii) any Material
Contract, or any other material agreement or instrument to which the Company or
its Subsidiaries is a party or by which any of their respective properties or
assets may be bound, except, in the case of clause (i) or (iii) above, for such
violations or defaults as would not have, individually or in the aggregate, a
Material Adverse Effect.
(b) Consents. Except as set forth on Schedule 2.3(b) of the Company
Disclosure Letter, no Consent of or with any court, arbitral tribunal,
administrative agency or commission or other governmental or regulatory
authority or administrative agency or commission, whether domestic or foreign,
(a "Governmental Authority") or other Person is required to be obtained by the
Company or any of its Subsidiaries in connection with the execution, delivery
and performance by the Company of this Agreement and the Ancillary Agreements
to which it shall be a party or the consummation of the transactions
contemplated hereby and thereby, except for (i) applicable requirements under
the Exchange Act, (ii) applicable requirements under the Securities Act, (iii)
the filing by the Company under the HSR Act described in Section 5.2(c), (iv)
the filing of the Certificate of Merger with the Delaware Secretary of State,
(v) with respect to Consents of or with any Person other than a Governmental
Authority, Consents which individually or in the aggregate are not material to
the Company and its Subsidiaries taken as a whole, and (vi) applicable
requirements under securities or "blue sky" laws of various states.
2.4 Capitalization. (a) Authorized Capital Stock of the Company. The
authorized capital stock of the Company consists of 50,000,000 shares of Class
A Common Stock, 2,000,000 shares of Class B Common Stock, and 5,000,000 shares
of Preferred Stock, par value $.01 per share, of which 4,985,393, 522,955 and 0
shares, respectively, were issued and outstanding as of the close of business
on January 4, 2000. The Class A Common Stock and Class B Common Stock are
identical in their powers, rights and preferences, except that each share of
Class A Common Stock carries one vote and each share of Class B Common Stock
carries five votes. As of the close of business on January 5, 2000 there were
outstanding under the Company's Stock Option Plans, options to acquire an
aggregate of 1,126,600 shares of Class A Common Stock and 0 shares of Class B
Common Stock. Set forth on Schedule 2.4(a) of the Company Disclosure Letter is
a list of all such outstanding options, their respective exercise prices, and
scheduled vesting and expiration dates. All issued and outstanding shares of
Company Common Stock have been duly authorized and validly issued and are fully
paid and nonassessable. As of the date hereof, the Company has outstanding (i)
a $1,500,000 5% Subordinated Convertible Note Due 2000, convertible at the
option of the holder at
10
<PAGE> 16
any time prior to maturity into shares of Class A Common Stock at a conversion
price of $3.50 per share (the "2000 Note"), and (ii) a warrant to acquire
30,000 shares of Class A Common Stock for an exercise price of $3.50 per share
(the "GFG Warrant").
(b) Ownership of Capital Stock of the Company and Subsidiaries; No Equity
Rights. Schedule 2.4(b) of the Company Disclosure Letter contains a complete
and correct description of the shares of stock or other equity interests that
are authorized, or issued and outstanding, of each of the Subsidiaries of the
Company. The Company is the record and beneficial owner of all of the
outstanding capital stock of each of its Subsidiaries, free and clear of any
Lien. There are no preemptive or similar rights on the part of any holders of
any class of securities of the Company or its Subsidiaries. Except for the 2000
Note and the GFG Warrant and except as set forth on Schedule 2.4(b), (i) there
are no outstanding shares of capital stock or other securities of either the
Company or its Subsidiaries, and (ii) no subscriptions, options, warrants,
instruments, conversion or other rights, agreements, commitments, arrangements
or understandings of any kind obligating the Company or its Subsidiaries,
contingently or otherwise, to issue or sell, or cause to be issued or sold, any
shares of capital stock of the Company or its Subsidiaries, or any securities
convertible into or exchangeable for any such shares, are outstanding, and no
authorization therefore has been given. Except as set forth on Schedule 2.4(b),
there are no outstanding contractual or other rights or obligations to or of
the Company or its Subsidiaries to (x) repurchase, redeem or otherwise acquire
any outstanding shares or other equity interests of the Company or its
Subsidiaries or (y) make any payment based upon the value or earnings of the
Company or its Subsidiaries. Each of the 2000 Note and the GFG Warrant permits,
by its terms, and without the consent of the holders thereof, the transactions,
contemplated by Section 1.5(b).
2.5 Investments. Except as set forth on Schedule 2.5 of the Company
Disclosure Letter, neither the Company nor any of its Subsidiaries owns any
shares of capital stock or other securities, including, without limitation, any
options, warrants, conversion or other rights, of, or interest in, any other
Person (other than, as to the Company, its Subsidiaries).
2.6 Undisclosed Liabilities, etc. Neither the Company nor any of its
Subsidiaries has any liabilities or obligations of any nature, whether known,
unknown, absolute, accrued, contingent or otherwise and whether due or to become
due, except (a) as set forth on Schedule 2.6 of the Company Disclosure Letter,
(b) as and to the extent disclosed on and adequately reserved against in the
Balance Sheet, or (c) for liabilities and obligations that (i) were incurred
after December 31, 1998 in the ordinary course of business and (ii) individually
and in the aggregate have not had a Material Adverse Effect. Since December 31,
1998, there has not occurred or come to exist any Material Adverse
11
<PAGE> 17
Effect or any event, occurrence, fact, condition, change, development or effect
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. Except as disclosed on Schedule 2.6 of the Company
Disclosure Letter, there are no liabilities or obligations of the Company or its
Subsidiaries, contingent or otherwise, to any Person with respect to the value
of the Company Common Stock.
2.7 Absence of Changes. Since December 31, 1998, except (a) as set forth
on Schedule 2.7 of the Company Disclosure Letter, (b) as disclosed in the
Company SEC documents filed and publicly available prior to the date hereof, or
(c) as specifically permitted after the date hereof pursuant to Section 4.1,
the Company and its Subsidiaries have conducted the Business in the ordinary
course consistent with past practice and there have not been any events,
changes or developments which, individually or in the aggregate, would have a
Material Adverse Effect on the Company and its Subsidiaries, taken as a whole;
it being understood that the enactment of any regulation by the Food and Drug
Administration mandating pasteurization of fresh juice products shall not
constitute a Material Adverse Effect unless the Company would be unable to
comply with such new regulation without the occurrence of a Material Adverse
Effect.
2.8 Tax Matters. (a) Except as set forth on Schedule 2.8(a) of the Company
Disclosure Letter and for such failures as would not have, individually or in
the aggregate, a Material Adverse Effect, (i) all income and other material
Returns required to be filed by the Company or its Subsidiaries with respect to
Taxes have been filed, (ii) all such Returns are complete and accurate in all
material respects, (iii) all Taxes due by the Company or its Subsidiaries
(whether or not shown on any Return), chargeable as a Lien upon the assets of
the Company or its Subsidiaries, claimed to be due by any Governmental
Authority, or that may become due by the Company or its Subsidiaries with
respect to any period (or portion thereof) ending on or before the Closing Date
have been paid or have been adequately reserved for in the books and records of
the Company or its Subsidiaries in accordance with GAAP and will be paid when
due if due on or before the Closing, (iv) each of the Company and its
Subsidiaries has duly and timely withheld all Taxes required to be withheld and
such withheld Taxes have been either duly and timely paid to the proper
Governmental Authority or properly set aside in accounts for such purpose and
will be duly and timely paid to the proper Governmental Authority if such
payment is due before the Closing.
(b) Except as set forth on Schedule 2.8(b) of the Company Disclosure
Letter, (i) no agreement or other document waiving, extending, or having the
effect of waiving or extending, the statute of limitations, the period of
assessment or collection of any Taxes on or in respect of the Company or its
Subsidiaries, and no power of attorney with respect to any such Taxes has been
filed with any Governmental Authority which
12
<PAGE> 18
waiver, extension or power of attorney is currently in effect and (ii) neither
the Company nor its Subsidiaries has requested or been granted an extension of
time for filing any Return to a date later than the date of this Agreement.
(c) Except as set forth on Schedule 2.8(c) of the Company Disclosure
Letter, no Returns of or in respect of the Company or its Subsidiaries are
currently under audit, examination or investigation by any Governmental
Authority. Except as set forth on Schedule 2.8(c) of the Company Disclosure
Letter, no Governmental Authority is now asserting or, to the knowledge of the
Company or any of its Subsidiaries threatening to assert against the Company or
its Subsidiaries any deficiency or claim for Taxes or any adjustment to Taxes,
and, to the knowledge of the Company or any of its Subsidiaries, no
circumstances exist to form the basis for asserting such a claim or deficiency.
(d) No amount will be required to be withheld under section 1445 of the
Code in connection with any of the transactions contemplated by this Agreement.
(e) Neither the Company nor its Subsidiaries, will, as a result of the
transactions contemplated by this Agreement, make or become obligated to make
any "parachute payment" as defined in Section 280G of the Code.
(f) Except as set forth on Schedule 2.8(f) of the Company Disclosure
Letter, no written claim against or in respect of the Company or any of its
Subsidiaries (other than a claim that has been finally settled) has ever been
made by any Governmental Authority in a jurisdiction where the Company or any
of its Subsidiaries, as the case may be, does not file Returns or pay or
collect Taxes in respect of a particular type of Tax imposed by that
jurisdiction, that the Company or any of its Subsidiaries is or may be subject
to an obligation to file Returns or pay or collect Taxes in respect of such Tax
in that jurisdiction.
(g) Except as set forth on Schedule 2.8(g) of the Company Disclosure
Letter, neither the Company nor any of its Subsidiaries is liable for the Taxes
of any other Person (other than the Company and its Subsidiaries), whether
pursuant to United States Treasury Regulation section 1.1502-6 (or comparable
provision of state or local law), as a transferee or successor, by contract
(including, without limitation, any Tax allocation, sharing, indemnity or
similar agreement or arrangement) or otherwise.
(h) Except as set forth on Schedule 2.8(h) of the Company Disclosure
Letter, neither the Company nor any of its Subsidiaries has received or applied
for a Tax ruling, the receipt or failure of which to receive would have,
individually or in the aggregate, a Material Adverse Effect, or has entered
into a closing agreement pursuant to
13
<PAGE> 19
Section 7121 of the Code, or any predecessor provision or similar provision of
state or local law which closing agreement currently is in effect.
(i) Except as set forth on Schedule 2.8(i) of the Company Disclosure
Letter, there are no outstanding adjustments for Tax purposes applicable to the
Company or any of its Subsidiaries as a result of changes in methods of
accounting, and no material elections for Tax purposes have been made except as
reflected in the Returns (i) with respect to the Company or any of its
Subsidiaries that are currently in force or (ii) by which the Company or any of
its Subsidiaries is bound.
(j) True, correct and complete copies of all income, and all material
franchise, sales, use, property and payroll Returns filed by or with respect to
the Company or any of its Subsidiaries for the past three years have been
provided to the Purchaser.
(k) The Company has elected for the 1998 taxable year to file Returns on a
consolidated basis with its Subsidiaries for U.S. federal income Tax purposes.
2.9 Assets. The Company and its Subsidiaries own, or otherwise have full,
exclusive, sufficient and legally enforceable rights to use, all of the
properties and assets (real, personal or mixed, tangible or intangible), used
or held for use in connection with, necessary for the conduct of, or otherwise
material to, the Business (the "Assets"), except for such failures to own or
have such rights to use the Assets as would not, individually or in the
aggregate, result in a Material Adverse Effect. The Company and its
Subsidiaries have good, valid and marketable title to, or in the case of leased
property have good and valid leasehold interests in, all Assets, including but
not limited to all such Assets reflected on the Balance Sheet or acquired since
the date thereof (except as disposed of in the ordinary course of business
consistent with past practice after the date thereof and in accordance with
this Agreement), in each case free and clear of any Lien, except Permitted
Liens. There are no Assets used in the operation of the Business that will not,
following the Closing, be owned by the Company or its Subsidiaries, or leased
or licensed to the Company or its Subsidiaries under valid current leases or
license arrangements. All tangible Assets currently being used in and material
to the Business are in good working order, except for normal wear and tear.
Schedule 2.9 of the Company Disclosure Letter identifies the location of all
tangible Assets that are owned by the Company or its Subsidiaries that are
material to the Business, including but not limited to buildings, machinery,
equipment, vehicles, inventory and real property.
2.10 Real Property. Except as set forth on Schedule 2.10(i) of the Company
Disclosure Letter, neither the Company nor its Subsidiaries owns any real
14
<PAGE> 20
property. Either the Company or one of its Subsidiaries has good, valid and
marketable fee simple title to the Owned Real Property, free and clear of any
Liens other than Permitted Liens. Schedule 2.10(ii) of the Company Disclosure
Letter contains a complete and correct list of all Leases setting forth the
location and landlord for each Lease. Copies of such Leases have been delivered
to Purchaser. Either the Company or one of its Subsidiaries has valid or
subsisting leasehold interests in the Leased Real Property, free and clear of
any Liens other than Permitted Liens. No material damage or destruction has
occurred since December 31, 1998 with respect to any of the Company Real
Property.
2.11 Material Contracts. (a) Disclosure. Schedule 2.11(a) of the Company
Disclosure Letter contains a complete and correct list, as of the date hereof,
of all Material Contracts. The Company and its Subsidiaries have delivered to
Purchaser complete and correct copies of all written Material Contracts, and
accurate descriptions of all material terms of all oral Material Contracts, set
forth or required to be set forth on Schedule 2.11(a) of the Company Disclosure
Letter.
(b) Enforceability. All Material Contracts are legal, valid, binding, in
full force and effect and enforceable against the Company or one of its
Subsidiaries, as the case may be, and, to the knowledge of the Company, each
other party thereto. Except as set forth on Schedule 2.11(b)(i) of the Company
Disclosure Letter, there does not exist under any Material Contract any
violation, breach or event of default, or event or condition that, after notice
or lapse of time or both, would constitute a violation, breach or event of
default thereunder, on the part of the Company, or its Subsidiaries or, to the
knowledge of the Company, any other Person, other than such violations,
breaches, events of default, or events or conditions that, individually and in
the aggregate, could not reasonably be expected to have or result in a Material
Adverse Effect. Except as set forth on Schedule 2.11(b)(ii) of the Company
Disclosure Letter, the enforceability of all Material Contracts will not be
affected in any manner by the execution, delivery or performance of this
Agreement, and no Material Contract contains any change in control or other
terms or conditions that will, with or without obtaining consent or waiver,
become applicable or inapplicable as a result of the consummation of the
transactions contemplated by this Agreement or the Ancillary Agreements.
2.12 Intellectual Property. (a) Disclosure. Schedule 2.12(a) of the
Company Disclosure Letter sets forth a list of all issued patents, pending
patent applications, issued trademark registrations, pending trademark
applications, issued copyright registrations, and all material non-registered
Intellectual Property owned, licensed, used or held for use by the Company or
any Subsidiary ("Listed Intellectual Property"), specifying as to each, as
applicable: (i) the nature of such Listed Intellectual Property; (ii) the owner
of such Listed Intellectual Property; (iii) the jurisdictions in which
15
<PAGE> 21
such Listed Intellectual Property has been issued or registered or in which an
application for such issuance or registration has been filed; (iv) the
registration or application numbers; and (v) the current status of such
registration or application. The Company or a Subsidiary holds good, valid and
enforceable right, title and interest, free and clear of any Liens, or has
valid and enforceable rights to use, all Listed Intellectual Property used in
the conduct of its Business. The Listed Intellectual Property includes all of
the Intellectual Property that is material to the Business.
(b) Licenses. Schedule 2.12(b) of the Company Disclosure Letter sets forth
a list of all licenses and other agreements, oral and written, as to which the
Company or any Subsidiary is a party (i) pursuant to which any Person is
authorized to use any Listed Intellectual Property, or (ii) pursuant to which
the Company or a Subsidiary holds or uses or is authorized to use any
Intellectual Property, except, in the case of this clause (ii), any
"shrink-wrap" software. To the knowledge of the Company, there is no material
pending or threatened bankruptcy, insolvency or similar proceeding with respect
to any party to such licenses or agreements, and no event has occurred which
(whether with or without notice, lapse of time or the happening or occurrence
of any other event) would constitute a material default by any party to such
licenses or agreements.
(c) No Infringement. Except as set forth on Schedule 2.12(c)(i) of the
Company Disclosure Letter, to the knowledge of the Company, no Person has
interfered with, infringed upon, misappropriated or otherwise come into
conflict with any Listed Intellectual Property. Except as set forth on Schedule
2.12(c) (ii) of the Company Disclosure Letter, to the knowledge of the Company
the conduct of the Business does not infringe or otherwise conflict with any
rights of any person in respect of any Intellectual Property.
(d) Protection. Except as set forth on Schedule 2.12(d) of the Company
Disclosure Letter, the Company and its Subsidiaries have taken all commercially
reasonable actions to ensure full protection of the Listed Intellectual
Property (including maintaining the secrecy of all confidential Intellectual
Property) under any applicable law.
(e) No Intellectual Property Litigation. No Listed Intellectual Property
is subject to any outstanding judgment, injunction, order, decree or agreement
restricting use thereof by the Company or any Subsidiary, except for such
matters as, individually or in the aggregate, have not had and do not have a
Material Adverse Effect. Except as set forth on schedule 2.12(e) of the Company
Disclosure Letter, no Listed Intellectual Property is or since January 1, 1996
has been the subject of any pending or, to the knowledge of the Company,
threatened Litigation.
16
<PAGE> 22
(f) Calendar Function. The disclosure as to Year 2000 Compatibility issues
in the Company's Quarterly Report on Form 10-Q for the period ended September
30, 1999 is complete and correct in all material respects and does not omit to
state a material fact necessary to make the statements contained therein not
misleading.
2.13 Insurance. (a) Schedule 2.13 of the Company Disclosure Letter
contains a complete and correct list of all insurance policies maintained by or
on behalf of the Company or its Subsidiaries (the "Policies"). Purchaser has
been furnished with complete and correct copies of all Policies together with
all riders and amendments thereto. The Policies are in full force and effect,
and all premiums due thereon have been paid. The Company and its Subsidiaries
have complied in all material respects with the terms and provisions of the
Policies. The Company and its Subsidiaries have been and are adequately insured
with respect to their respective property and the conduct of their respective
business.
2.14 Litigation. Except as set forth on Schedule 2.14 of the Company
Disclosure Letter, there is no Litigation pending or, to the knowledge of the
Company, threatened, against the Company or its Subsidiaries that could
reasonably be expected to have a Material Adverse Effect.
2.15 Compliance with Laws and Instruments. (a) Compliance. Except as set
forth in the Company SEC Documents or on Schedule 2.15(a) of the Company
Disclosure Letter, the Company and each of its Subsidiaries is in compliance
with all Laws applicable to it, and neither the Company nor any of its
Subsidiaries has received any notice alleging non-compliance with any Law
except, with reference to all the foregoing, where the failure to be in
compliance would not, individually or in the aggregate, have a Material Adverse
Effect.
(b) Governmental Approvals, etc. Schedule 2.15(b)(i) of the Company
Disclosure Letter contains a complete and correct list of all Governmental
Approvals and other Consents necessary for, or otherwise material to, the
conduct of the Business. Except as set forth on Schedule 2.15(b)(ii) of the
Company Disclosure Letter and such failures as would not have, individually or
in the aggregate, a Material Adverse Effect, all such Governmental Approvals
and other Consents have been duly obtained and are held by the Company and are
in full force and effect. The execution, delivery and performance of this
Agreement and the Ancillary Agreements and the consummation of the transactions
contemplated hereby and thereby do not and will not violate any such
Governmental Approval or Consent, or result in any revocation, cancellation,
suspension, modification or nonrenewal thereof, except, with respect to
Consents of or with any Person other than a Governmental Authority, for such
violations, revocations, cancellations, suspensions,
17
<PAGE> 23
modifications or nonrenewals that individually or in the aggregate are not and
will not be material to the Company and its Subsidiaries, taken as a whole.
2.16 Environmental Matters. (a) Compliance with Environmental Law. Except
as set forth on Schedule 2.16(a) of the Company Disclosure Letter and such
failures as would not have, individually or in the aggregate, a Material
Adverse Effect, the Company and each of its Subsidiaries have complied and are
in compliance in all respects with all applicable Environmental Laws pertaining
to their respective properties and Assets (including the Real Property) and the
use and ownership thereof, and to the operation of the Business. No violation
by the Company or its Subsidiaries of any applicable Environmental Law relating
to any of the properties and assets of the Company or its Subsidiaries or the
use or ownership thereof, or to the operation of the Business is being or has
been alleged, except for such violations or failures as would not have,
individually or in the aggregate, a Material Adverse Effect. Except as set
forth on Schedule 2.16(a) of the Company Disclosure Letter and for such
failures to be in possession and compliance as would not, individually or in
the aggregate, result in a Material Adverse Effect, the Company and its
Subsidiaries are in possession of, and in compliance with, all permits,
authorizations and consents required under applicable Environmental Laws.
(b) Other Environmental Matters. (i) None of the Company, its Subsidiaries
or any other Person, has caused or taken any action that will result in, and
neither the Company nor its Subsidiaries is subject to, any liability relating
to (x) the environmental conditions on, under, or about the Real Property or
other properties or assets currently or formerly owned, leased or operated by
the Company, its Subsidiaries or any predecessor thereto, including without
limitation, the air, soil and groundwater conditions at such properties or (y)
the past or present use, management, handling, transport, treatment,
generation, storage, disposal or Release of any Hazardous Materials.
(ii) No Environmental Claims have been asserted against the Company, its
Subsidiaries, or, to the knowledge of the Company, any predecessor in interest,
nor does the Company have knowledge or written notice of any threatened or
pending Environmental Claim against the Company, its Subsidiaries or any
predecessor in interest.
(iii) Purchaser has been furnished with all material information,
including, without limitation, all studies, analyses, reports and
investigations, in the possession, custody or control of the Company or its
agents or otherwise known to the Company or its Subsidiaries relating to (x)
the environmental conditions on, under or about the Real Property or other
properties or assets currently or formerly owned, leased or operated by the
Company, its Subsidiaries or any predecessor in interest thereto, and (y) any
Hazardous Materials used, managed, handled, transported, treated, generated,
stored or
18
<PAGE> 24
Released by the Company, its Subsidiaries or any other Person on, under, about
or from any of the Real Property, or otherwise in connection with the use or
operation of any of the properties and assets of the Company or its
Subsidiaries or the Business.
2.17 Employees, Labor Matters, etc. Except as set forth on Schedule 2.17
of the Company Disclosure Letter, neither the Company nor any of its
Subsidiaries is a party to or bound by any collective bargaining agreement, and
there are no labor unions or other organizations representing, purporting to
represent or attempting to represent any employees employed by the Company or
its Subsidiaries. Since December 31, 1998, there has not occurred or, to the
Company's knowledge, been threatened any strike, slowdown, picketing, work
stoppage, concerted refusal to work overtime or other similar labor activity
with respect to any employees of the Company or its Subsidiaries that would,
individually or in the aggregate, have a Material Adverse Effect. Except as set
forth on Schedule 2.17 of the Company Disclosure Letter, there are no material
labor disputes currently subject to any grievance procedure, arbitration or
litigation and there is no representation petition pending or, to the knowledge
of the Company, threatened with respect to any employee of the Company or its
Subsidiaries. Except as set forth on Schedule 2.17 of the Company Disclosure
Letter, the Company and its Subsidiaries have complied with all applicable Laws
pertaining to the employment or termination of employment of their respective
employees, including, without limitation, all such Laws relating to labor
relations, equal employment opportunities, fair employment practices,
prohibited discrimination or distinction and other similar employment
activities, except where the failure to so comply would not, individually or in
the aggregate, result in a Material Adverse Effect.
2.18 Employee Benefit Plans and Related Matters; ERISA. (a) Employee
Benefit Plans. Schedule 2.18(a) of the Company Disclosure Letter sets forth a
complete and correct list of each Plan. With respect to each such Plan,
Purchaser has been furnished with complete and correct copies of: (i) such
Plan, if written, or a description of such Plan if not written, and (ii) to the
extent applicable to such Plan, all trust agreements, insurance contracts or
other funding arrangements, the two most recent actuarial and trust reports,
the two most recent Forms 5500 required to have been filed with the IRS and all
schedules thereto, the most recent IRS determination letter, the current
summary plan description, any communication received from or sent to the IRS,
the Pension Benefit Guaranty Corporation or the Department of Labor indicating
that the Company or any of its Subsidiaries has or may have a material
liability (including, to the Company's knowledge, any existing written
description of any oral communication), any actuarial study of any
post-employment life or medical benefits provided under any such Plan, if any,
statements or other communications regarding withdrawal or other multi employer
plan liabilities, if any, and all material amendments and modifications to any
such
19
<PAGE> 25
document. Neither the Company nor any of its Subsidiaries has communicated to
any Employee any intention or commitment to modify any Plan or to establish or
implement any other employee or retiree benefit or compensation plan or
arrangement.
(b) Qualification. Except as set forth on Schedule 2.18(b) of the Company
Disclosure Letter, each Plan intended to be qualified under Section 401(a) of
the Code, and the trust (if any) forming a part thereof, has received a
favorable determination letter from the IRS as to its qualification under the
Code and to the effect that each such trust is exempt from taxation under
Section 501(a) of the Code, and nothing has occurred since the date of such
determination letter that could reasonably be expected to adversely affect such
qualification or tax-exempt status.
(c) Compliance; Liability. (i) Neither the Company nor any of its
Subsidiaries has been involved in any transaction that could cause the Company
or any of its Subsidiaries or, following the Closing, Purchaser, to be subject
to material liability under Section 4069 or 4212 of ERISA. Neither the Company
nor any of its Subsidiaries has incurred (either directly or indirectly,
including as a result of an indemnification obligation) any material liability
under or pursuant to Title I or IV of ERISA or the penalty, excise Tax or joint
and several liability provisions of the Code relating to employee benefit plans
and no event, transaction or condition has occurred or exists that could result
in any such material liability to the Company or any of its Subsidiaries or,
following the Closing, Purchaser or any of its Affiliates. All contributions
and premiums required to have been paid by the Company or its Subsidiaries to
any employee benefit plan (within the meaning of Section 3(3) of ERISA) under
the terms of any such plan or its related trust, insurance contract or other
funding arrangement, or pursuant to any applicable Law (including ERISA and the
Code) or collective bargaining agreement have been paid within the time
prescribed by any such plan, arrangement, applicable Law, or agreement.
(ii) Except as set forth on Schedule 2.18(c)(ii) of the Company Disclosure
Letter, each of the Plans has been operated and administered in all material
respects in compliance with its terms, all applicable Laws and all applicable
collective bargaining agreements. There are no material pending or, to the
knowledge of the Company, material threatened claims by or on behalf of any of
the Plans, by any Employee or otherwise involving any such Plan or the assets of
any Plan (other than routine claims for benefits, all of which have been fully
reserved for on the regularly prepared balance sheets of the Company or its
Subsidiaries).
20
<PAGE> 26
(iii) No Plan is a "multiemployer plan" within the meaning of Section
4001(a)(3) of ERISA or a "multiple employer plan" within the meaning of Section
4063 or 4064 of ERISA.
(iv) No Plan is subject to Section 412 of the Code or Section 302 or
Title IV of ERISA.
(v) No Employee is or will become entitled to post-employment benefits of
any kind by reason of employment with the Company or its Subsidiaries,
including, without limitation, death or medical benefits (whether or not
insured), other than (x) coverage mandated by Section 4980B of the Code, or (y)
retirement benefits payable under any Plan qualified under Section 401(a) of
the Code. Except as set forth on Schedule 2.18(c) of the Company Disclosure
Letter, the consummation of the transactions contemplated by this Agreement and
the Ancillary Agreements will not result in an increase in the amount of
compensation or benefits or the acceleration of the vesting or timing of
payment of any compensation or benefits payable to or in respect of any
Employee.
2.19 Product Liability. Except as set forth on Schedule 2.19 of the
Company Disclosure Letter, neither the Company nor its Subsidiaries has any
liability or obligation of any nature (whether known or unknown, accrued,
absolute, contingent or otherwise, and whether due or to become due), whether
based on strict liability, negligence, breach of warranty (express or implied),
breach of contract or otherwise, in respect of any product, component or other
item manufactured, sold, designed or produced prior to the Closing by or on
behalf of the Company or its Subsidiaries or any predecessor thereto, that (i)
is not fully and adequately covered by policies of insurance or by indemnity,
contribution, cost sharing or similar agreements or arrangements by or with
other Persons and (ii) is not otherwise fully and adequately reserved against
as reflected in the Financial Statements.
2.20 Brokers, Finders, etc. Except for Schroder & Co. Inc., whose fees
shall be paid by the Company, neither the Company nor any of its Subsidiaries
has retained any broker, finder or investment banker or other intermediary in
connection with the transactions contemplated herein so as to give rise to any
claim against Purchaser, the Company or its Subsidiaries for any brokerage,
finder's or investment banker's commission, fee or similar compensation.
2.21 SEC Reports and Financial Statements. The Company has timely filed
with the SEC, any applicable state securities authorities and any other
Governmental Authority all forms and documents required to be filed by it since
January 1, 1996
21
<PAGE> 27
(collectively, the "Company Reports") and has heretofore made available to
Purchaser (i) its Annual Reports on Form 10-K or Form 10-KSB, as the case may
be, for the last three fiscal years, (ii) its Quarterly Reports on Form 10-Q
for the periods ended March 31, 1999, June 30, 1999, and September 30, 1999,
(iii) all proxy statements relating to meetings of Stockholders since January
1, 1996 (in the form mailed to Stockholders) and (iv) all other forms, reports
and registration statements filed by the Company with the SEC since January 1,
1996 (other than registration statements on Form S-8 or Form 8-A, filings on
Form T-1 or preliminary materials and registration statements in forms not
declared effective). The documents described in clauses (i)-(iv) above (whether
filed before, on or after the date hereof) are referred to in this Agreement
collectively as the "Company SEC Documents". As of their respective dates, the
Company Reports (a) did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading and (b) complied in all material respects with
the applicable requirements of Law, including in the case of SEC filings, the
Exchange Act and the Securities Act, as the case may be, and the applicable
rules and regulations of the SEC thereunder. The consolidated financial
statements included in the Company SEC Documents have been prepared in
accordance with GAAP applied on a consistent basis during the periods involved
(except as otherwise noted therein and except that the quarterly financial
statements are subject to year-end adjustment and do not contain all footnote
disclosures required by GAAP) and fairly present in all material respects the
consolidated financial position and the consolidated results of operations and
cash flows of the Company and its consolidated Subsidiaries as at the dates
thereof and for the periods presented therein.
2.22 Proxy Statement; Exchange Act Schedules. (a) The Proxy Statement
(and any amendment thereof or supplement thereto) at the date mailed to the
Stockholders and at the time of the Special Meeting, (i) will not contain any
untrue statement of a material fact - or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading and (ii) will -- comply in all material respects with the provisions
of the Exchange Act and the rules and regulations thereunder; except that no
representation is made by the Company with respect to statements made in the
Proxy Statement based on information supplied by MergerCo or Purchaser
specifically for inclusion in the Proxy Statement.
(b) Any Schedule 14A or 13E-3 and any related schedules (and any amendment
or supplement to any of the foregoing) filed with the SEC at the date so filed
(i) will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in
22
<PAGE> 28
light of the circumstances under which they are made, not misleading and (ii)
will comply in all material respects with the provisions of the Exchange Act
and the rules and regulations thereunder; except that no representation is made
by the Company with respect to statements made in any such document based on
information supplied by MergerCo or Purchaser specifically for inclusion
therein.
2.23 Required Vote by Company Stockholders. The Company Stockholder
Approval is the only vote of any class of capital stock of the Company that is,
and no separate class vote by the holders of either the Class A Common Stock or
the Class B Common Stock is, required by the DGCL or the Organizational
Documents to adopt this Agreement and approve the transactions contemplated
hereby.
2.24 Fairness Opinion. The Company has received from Schroder & Co. Inc.
(the "Financial Advisor") and provided to Purchaser on or prior to the date
hereof, an executed copy of its opinion (the "Fairness Opinion") that the
Merger Consideration to be received by the Stockholders in the Merger is fair,
from a financial point of view, to such holders. The Company has been
authorized by the Financial Advisor to include the Fairness Opinion in the
Proxy Statement and has not been notified by the Financial Advisor that the
Fairness Opinion has been withdrawn or modified.
2.25 Takeover Statutes. No "Fair price," "Moratorium," "control share
acquisition" or other similar anti-takeover statute or regulation enacted under
state or federal laws in the United States, applicable to the Company or any of
its Subsidiaries is applicable to the execution, delivery and performance of
this Agreement or the consummation of the Merger or the other transactions
contemplated by this Agreement.
2.26 Substantial Suppliers and Customers. Except as set forth on Schedule
2.26 of the Company Disclosure Letter, since December 31, 1998 none of the top
ten (10) suppliers (by dollar volume) or the top ten (10) customers (by dollar
volume) of the Company and its Subsidiaries has substantially reduced the use
or supply of the products or goods made available for purchase by the Company
and its Subsidiaries in their business or has ceased, or, to the Company's
knowledge, threatened to cease, to use or to supply such products or goods, nor
does the Company have any reason to believe that any such supplier or customer
will do so.
23
<PAGE> 29
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF MERGERCO AND PURCHASER
As of the date hereof and as of the Closing Date, MergerCo and Purchaser
jointly and severally represent and warrant to the Company as follows:
3.1 Status; Authorization, etc. MergerCo is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Purchaser is a limited partnership duly organized, validly existing
and in good standing under the laws of the State of Delaware. Each of MergerCo
and Purchaser has all requisite power and authority to execute and deliver this
Agreement and the Ancillary Agreements, to perform its obligations hereunder
and thereunder and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and the Ancillary
Agreements to which MergerCo or Purchaser is a party, and the consummation of
the transactions contemplated thereby, have been duly authorized by all
requisite action of MergerCo and Purchaser. Each of MergerCo and Purchaser has
duly executed and delivered this Agreement and the Ancillary Agreements to
which it is a party. This Agreement and each of the Ancillary Agreements to
which MergerCo and Purchaser are a party constitute the valid and legally
binding obligations of MergerCo and Purchaser, enforceable against MergerCo and
Purchaser in accordance with its terms.
3.2 No Conflicts, etc. (a) The execution, delivery and performance by
each of MergerCo and Purchaser of this Agreement and the Ancillary Agreements
to which it will be a party, and the consummation of the transactions
contemplated hereby and thereby, do not and will not conflict with, contravene,
result in a violation or breach of or default under (with or without the giving
of notice or the lapse of time, or both), give rise to a right or claim of
termination, amendment, modification, vesting, acceleration or cancellation of
any right or obligation or loss of any material benefit under, result in the
creation of any Lien (or any obligation to create any Lien) upon, or give rise
to the creation or claim by any Person other than MergerCo or Purchaser to any
of the properties or assets of MergerCo or Purchaser under, (i) any provision
of any organizational document of MergerCo or Purchaser, (ii) any Law
applicable to MergerCo or Purchaser, or any of their respective properties or
assets or (iii) any contract, or any other agreement or instrument to which
either MergerCo or Purchaser is a party or by which any of their respective
properties or assets may be bound.
(b) Consents. No Consent of or with any Governmental Authority or other
Person is required or advisable to be obtained by MergerCo or Purchaser in
24
<PAGE> 30
connection with the execution, delivery and performance by MergerCo and
Purchaser of this Agreement and the Ancillary Agreements or consummation of the
transactions contemplated hereby and thereby, except for (i) the filing by the
"ultimate parent entity" of Purchaser and MergerCo under the HSR Act described
in Section 5.2(c), (ii) applicable requirements under the Exchange Act, (iii)
applicable requirements under the Securities Act, (iv) the filing of the
Certificate of Merger with the Delaware Secretary of State, (v) applicable
requirements under securities or "blue sky" laws of various states, and (vi)
such other consents, approvals, orders, authorizations, notifications,
registrations, declarations and filings (x) required to be obtained or made by
the Company or any of its Subsidiaries or (y) the failure of which to be
obtained or made would not have a material adverse effect on the business,
results of operations or financial condition of MergerCo, taken as a whole, or
materially impair or delay the consummation of the transactions contemplated by
this Agreement.
3.3 Litigation. There is no litigation pending or, to the knowledge of
MergerCo or Purchaser, threatened, against MergerCo or Purchaser that could
reasonably be expected to have or result in a material adverse effect on the
ability of MergerCo or Purchaser to consummate the transactions contemplated by
this Agreement.
3.4 Brokers, Finders, etc. Except for the transaction fee payable to
North Castle Partners L.L.C. pursuant to the Consulting Agreement, neither
MergerCo nor Purchaser has retained any broker, finder or investment banker or
other intermediary in connection with the transactions contemplated herein so
as to give rise to any claim against the Company or any of its Subsidiaries for
any brokerage, finder's or investment banker's commission, fee or similar
compensation.
3.5 No Prior Business. MergerCo has not engaged in any business or
activity of any kind, or entered into any agreement or arrangement with any
person or any entity or incurred, directly or indirectly, any material
liabilities or obligations, other than in connection with the transactions
contemplated hereby, and was formed for the purpose of effecting the
Recapitalization.
3.6 Financing Purchaser has delivered to the Company (i) a complete and
correct copy of a commitment letter from North Castle Partners II, L.P. (the
"Fund"), whereby the Fund has committed, upon the terms and subject to the
conditions set forth therein, to provide equity financing to Purchaser in
respect of the transactions contemplated hereby up to $38,660,000, (ii) a
complete and correct copy of a commitment letter from Bank of America, N.A. and
Banc of America Securities, whereby such financial institution has committed,
upon the terms and subject to the conditions set forth therein, to provide debt
financing in the amount of $30 million and (iii) a complete and correct
25
<PAGE> 31
copy of a letter from Key Mezzanine Capital Fund I, L.P. expressing its
intention upon the terms and subject to the conditions set forth therein, to
provide debt financing in the amount of $10 million.
3.7 Proxy Statement; Exchange Act Schedules. (a) None of the
information supplied in writing by MergerCo or Purchaser specifically for
inclusion in the Proxy Statement (including any amendments thereof or
supplements thereto) will, at the date mailed to stockholders or at the time of
the Special Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading.
(b) None of the information supplied in writing by MergerCo or Purchaser
specifically for inclusion in any Schedule 14A or 13E-3 and any related
schedules (and any amendment or supplement to any of the foregoing) will, at
the date such documents are filed with the SEC, contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
3.8 Beneficial Ownership of Shares. MergerCo does not "beneficially own"
(as defined in Rule 13d-3 under the Exchange Act) more than l% of the
outstanding shares of the Company Common Stock or any securities convertible
into or exchangeable for the Company Common Stock.
3.9 Liabilities. Except as set forth herein, MergerCo has no obligations
of any nature, whether known, unknown, absolute, accrued, contingent or
otherwise and whether due or to become due.
ARTICLE IV
COVENANTS OF THE COMPANY
4.1 Conduct of the Business. On and after the date hereof until the
Closing Date, except as expressly required by this Agreement, as disclosed on
Schedule 4.1 of the Company Disclosure Letter or as otherwise expressly
consented to by Purchaser in writing, the Company and its Subsidiaries shall:
(i) carry on the Business in the ordinary course of business in
substantially the same manner as heretofore conducted, and use commercially
reasonable efforts to (x) preserve intact its present business organization,
(y) keep available the
26
<PAGE> 32
services of its present officers, employees and consultants, and (z) preserve
intact its relationships with customers, suppliers and others having business
dealings with it, to the end that its goodwill and going business shall be in
all material respects unimpaired following the Closing;
(ii) promptly advise Purchaser in writing of any event, occurrence, fact,
condition, change, development or effect that, individually or in the
aggregate, could reasonably be expected to have or result in a Material
Adverse Effect or a breach of this Section 4.1; it being understood that the
enactment of any regulation by the Food and Drug Administration mandating
pasteurization of fresh juice products shall not constitute a Material Adverse
Effect unless the Company would be unable to comply with such new regulation
without the occurrence of a Material Adverse Effect;
(iii) not take any action or omit to take any action within its reasonable
control, which action or omission would result in a breach of any of the
representations and warranties set forth in Article II; it being agreed that
the actions of (x) entering into contracts to purchase fruit in the ordinary
course consistent with past practice and (y) making and committing to make
capital expenditures not in excess of $1 million in the aggregate in
accordance with the Company's budget for the fiscal year 2000, which has been
provided to Purchaser, shall not be deemed breaches of this Section 4.1(iii).
(iv) not agree or otherwise commit to take any of the actions proscribed by
the foregoing paragraphs (i) through (iii); and
(v) conduct all Tax affairs relating to it only in the ordinary course of
business, and in good faith in substantially the same manner as such affairs
would have been conducted if this Agreement had not been entered into.
4.2 No Solicitation. (a) The Company shall not, nor shall it permit any
of its Subsidiaries to, nor shall it authorize or permit any of its directors,
officers or employees or any investment banker, financial advisor, attorney,
accountant or other representative retained by it or any of its Subsidiaries
to, directly or indirectly through another person, (i) solicit, initiate or
encourage (including by way of furnishing information), or take any other
action designed to facilitate, any inquiries or the making of any proposal
which constitutes a Company Takeover Proposal or (ii) negotiate with respect
to, agree to or endorse any Company Takeover Proposal; provided, however, that
if and to the extent that the Board of Directors of the Company determines in
good faith, after consultation with outside counsel, that it is necessary to do
so in order to act in a
27
<PAGE> 33
manner consistent with its fiduciary duties to the Stockholders under
applicable law, the Company may, in response to any Company Takeover Proposal
which was not solicited by it and which did not otherwise result from a breach
of this Section 4.2(a), and subject to providing prior written notice of its
decision to take such action to Purchaser and compliance with Section 4.2(c),
(x) furnish information with respect to the Company and its Subsidiaries to any
person making a Company Takeover Proposal pursuant to a customary
confidentiality agreement (as determined by the Company based on the advice of
its outside counsel) and (y) participate in discussions or negotiations
regarding such Company Takeover Proposal.
(b) Except as expressly permitted by this Section 4.2, neither the Board
of Directors of the Company, the Special Committee nor any other committee
shall (i) withdraw, modify or, following a request by Purchaser to do so, fail
to reconfirm, or propose publicly to withdraw, modify or fail to reconfirm, in
a manner adverse to MergerCo or Purchaser, the approval or recommendation by
such Board of Directors or such committee of the Merger or this Agreement, (ii)
approve or recommend, or propose publicly to approve or recommend any Company
Takeover Proposal, or (iii) cause the Company to enter into any letter of
intent, agreement in principle, acquisition agreement or other similar
agreement (each, a "Company Acquisition Agreement") related to any Company
Takeover Proposal. Notwithstanding the foregoing, the Board of Directors of the
Company may take such actions if it determines in good faith, based upon the
recommendation of the Special Committee and after consultation with outside
counsel, that in light of a Company Superior Proposal it is necessary to do so
in order to act in a manner consistent with its fiduciary duties to the
Stockholders under applicable law; provided, that it may only take such actions
at a time that is after the third Business Day following Purchaser's receipt of
written notice advising Purchaser that the Board of Directors of the Company is
prepared to accept a Company Superior Proposal, specifying the material terms
and conditions of such Company Superior Proposal, all of which information will
be kept confidential by Purchaser in accordance with the terms of the
confidentiality agreement between the Company and North Castle.
(c) In addition to the obligations of the Company set forth in paragraphs
(a) and (b) of this Section 4.2, the Company shall immediately advise Purchaser
of any request for information or of any Company Takeover Proposal and the
material terms and conditions of such request or Company Takeover Proposal. The
Company will keep Purchaser reasonably informed of the status and details
(including amendments or proposed amendments) of any such request or Company
Takeover Proposal.
(d) Nothing contained in this Section 4.2 shall prohibit the Company from
taking and disclosing to its Stockholders a position contemplated by Rules
14d-9 and
28
<PAGE> 34
14e-2(a) promulgated under the Exchange Act or from making any disclosure to
the Company's Stockholders if, in the good faith judgment of the Board of
Directors of the Company, after consultation with outside counsel, failure to
so disclose would be inconsistent with its obligations under applicable law;
provided, however, that, neither the Company nor its Board of Directors nor any
committee thereof shall withdraw or modify, or propose publicly to withdraw or
modify, its position with respect to this Agreement or the Merger or approve or
recommend, or propose publicly to approve or recommend, a Company Takeover
Proposal except to the extent permitted by Section 4.2(b).
4.3 Access and Information. From the date hereof to the Closing, the
Company and its Subsidiaries shall give Purchaser and its accountants, counsel,
consultants, employees and agents, full, complete and timely access during
normal business hours to, and furnish them with all documents, records, work
papers, tax returns and information with respect to, all of the Company's and
its Subsidiaries' properties, Assets, books, Material Contracts, reports,
records and senior management personnel, as Purchaser shall from time to time
reasonably request. The Company and its Subsidiaries shall keep Purchaser and
its representatives informed as to the affairs of the Business.
4.4 Further Assurances. Following the Closing, the Company and its
Subsidiaries shall execute and deliver such additional instruments, documents,
conveyances or assurances and take such other actions as shall be necessary, or
otherwise reasonably requested by Purchaser, to confirm and assure the rights
and obligations provided for in this Agreement and the Ancillary Agreements,
and render effective the consummation of the transactions contemplated hereby
and thereby.
ARTICLE V
COVENANTS OF MERGERCO, PURCHASER
AND THE COMPANY
5.1 Public Announcements. Prior to the Closing, except as required by
applicable Law, no party shall, nor shall permit its Affiliates to, make any
public announcement in respect of this Agreement or the transactions
contemplated hereby without the prior written consent of the other parties.
5.2 Further Actions. (a) From the date hereof to the Closing, each party
agrees to use commercially reasonable efforts to take all actions and to do all
things necessary or appropriate to consummate the transactions contemplated
hereby and by the Ancillary Agreements as promptly as possible, including,
without limitation: (i) filing or
29
<PAGE> 35
supplying all applications, notifications and information required to be filed
or supplied by it pursuant to applicable Law, (ii) obtaining all Consents and
Governmental Approvals necessary or appropriate to be obtained by it in order
to consummate transactions contemplated hereby and thereby, (iii) providing all
information necessary or appropriate to the Company's obtaining new senior and
mezzanine financing arrangements as contemplated hereby, and (iv) coordinating
and cooperating with the other parties in exchanging such information and
supplying such reasonable assistance as may be reasonably requested by the
other parties.
(b) At all times prior to the Closing, each party shall promptly notify
the other parties in writing of any fact, condition, event or occurrence that
will or is reasonably likely to result in the failure of any of the conditions
contained in Article VI to be satisfied.
(c) Purchaser and MergerCo on the one hand, and the Company on the other
hand, shall use their respective reasonable efforts to resolve such objections,
if any, as may be asserted with respect to the transactions contemplated hereby
under the laws, rules, guidelines or regulations of any Governmental Authority.
Without limiting the foregoing, each of the Company and MergerCo shall, as soon
as practicable, file (or cause its respective "ultimate parent entity" within
the meaning of the HSR Act to file) Notification and Report Forms under the HSR
Act with the Federal Trade Commission (the "FTC") and Antitrust Division of the
Department of Justice (the "Antitrust Division") and shall use reasonable
efforts to respond as promptly as practicable to all inquiries received from
the FTC or the Antitrust Division for additional information or documentation.
Each party hereto shall use its reasonable efforts to take or cause to be taken
all actions necessary, proper or advisable to obtain any consent, waiver,
approval or authorization relating to any Competition Law that is required for
the consummation of the transactions contemplated by this Agreement.
(d) Each of the parties agrees to cooperate with each other in taking, or
causing to be taken, all actions necessary to delist the shares of Company
Common Stock from the NASDAQ SmallCap Market System, provided that such
delisting shall not be effective until after the Effective Time. The parties
also acknowledge that it is Purchaser's intent that the shares of Surviving
Corporation Common Stock following the Merger will not be quoted on the NASDAQ
SmallCap Market System or listed on any national securities exchange.
5.3 Company Stockholder Approval; Proxy Statement. (a) As promptly as
practicable after the date hereof, the Company will prepare and file with the
SEC a proxy statement relating to the Special Meeting (as amended or
supplemented and
30
<PAGE> 36
including documents incorporated by reference therein, the "Proxy Statement"),
and shall use its commercially reasonable efforts to respond to any comments of
the SEC or its staff and to cause the Proxy Statement to be cleared by the SEC.
The Company shall notify Purchaser of the receipt of any comments from the SEC
or its staff and of any request by the SEC or its staff for amendments or
supplements to the Proxy Statement or for additional information and shall
supply Purchaser and its counsel with copies of all correspondence between the
Company or any of its representatives, on the one hand, and the SEC or its
staff, on the other hand, with respect to the Proxy Statement. After the Proxy
Statement has been cleared by the SEC, the Company shall mail the Proxy
Statement to the Stockholders. The Company shall include in the Proxy
Statement the recommendation of the Board of Directors of the Company and the
Special Committee that the Stockholders approve and adopt this Agreement and
the transactions contemplated hereby. If at any time prior to the Special
Meeting (as defined herein) there shall occur any event that should be set
forth in an amendment or supplement to the Proxy Statement, the Company will
prepare and mail to the Stockholders such an amendment or supplement.
(b) The Company shall, as soon as practicable, in accordance with
applicable law and the Organizational Documents of the Company, duly call, set
a record date for, give notice of, convene and hold a special meeting of the
Stockholders (the "Special Meeting") for the purpose of considering and taking
action upon this Agreement and such other matters as may be appropriate at the
Special Meeting. Except as would constitute a breach of the fiduciary duties of
the Board of Directors of the Company to the Stockholders under applicable law,
the Company shall, through its Board of Directors, recommend that the
Stockholders approve the Merger and shall use all reasonable efforts to solicit
from the Stockholders proxies in favor of the approval and adoption of this
Agreement and the transactions contemplated hereby.
(c) The Company and MergerCo shall together prepare and file a Transaction
Statement on Schedule 13E-3 (as amended or supplemented and including documents
incorporated by reference therein, the "Schedule 13E-3") under the Exchange
Act. Each of MergerCo and the Company shall furnish all information concerning
it, its Affiliates and the holders of its capital stock required to be included
in the Schedule 13E-3 and, after consultation with each other, shall respond
promptly to any comments made by the SEC with respect to the Schedule 13E-3.
(d) The information supplied by the Company for inclusion in the Proxy
Statement or the Schedule 13E-3 shall not, at the time the Proxy Statement is
mailed, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the
31
<PAGE> 37
circumstances under which they were made, not misleading or, at the time of the
Special Meeting, as then amended or supplemented, or at the Effective Time,
omit to state any material fact necessary to correct any statement originally
supplied by the Company for inclusion in the Proxy Statement or the Schedule
13E-3 which has become false or misleading. If at any time prior to the
Effective Time any event relating to the Company or any of its Affiliates, or
the Company's or its Affiliates' respective officers, directors or
stockholders, should be discovered which should be set forth in an amendment
of, or a supplement to such Proxy Statement or Schedule 13E-3, the Company
shall promptly so inform MergerCo and will furnish all necessary information to
MergerCo relating to such event and an appropriate amendment or supplement to
such Proxy Statement or Schedule 13E-3 will thereafter be filed with the SEC by
the Company. All documents that the Company is responsible for filing with the
SEC in connection with the transactions contemplated by this Agreement shall
comply in all material respects, both as to form and otherwise, with the
Exchange Act and/or the Securities Act, as the case may be, and the rules and
regulations thereunder. The Company shall also take any action required to be
taken under any applicable state securities laws in connection with the
registration and qualification in connection with the Merger of the Surviving
Corporation Common Stock following the Merger.
(e) All filings with the SEC and any amendments or supplements thereto,
all responses to requests for additional information by, and replies to
comments of, the SEC, and all mailings to the Stockholders, in each case in
connection with the Merger, shall be subject to the prior review and comment of
Purchaser.
(f) The information supplied or to be supplied by MergerCo for inclusion
in the Proxy Statement or the Schedule 13E-3 shall not, at the time the Proxy
Statement is mailed, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading or, at the time of the Special Meeting, as then
amended or supplemented, or at the Effective Time, omit to state any material
fact necessary to correct any statement originally supplied by MergerCo for
inclusion in the Proxy Statement or the Schedule 13E-3 which has become false
or misleading. If at any time prior to the Effective Time any event relating to
MergerCo or any of its Affiliates, or its Affiliates' respective officers,
directors or stockholders should be discovered which should be set forth in an
amendment of, or a supplement to, such Proxy Statement or Schedule 13E-3,
MergerCo shall promptly so inform the Company and will furnish all necessary
information to the Company relating to such event. All documents that MergerCo
is responsible for filing with the SEC in connection with the transactions
contemplated by this Agreement shall comply in all material respects, both as
to form and otherwise, with the Exchange Act and the rules and regulations
thereunder.
32
<PAGE> 38
5.4 Directors' and Officers' Insurance and Indemnification. (a) For a
period of six years after the Effective Time, the Surviving Corporation shall
indemnify, defend and hold harmless the present and former officers, directors,
employees and agents of the Company and its Subsidiaries in such capacities
against all losses, claims, damages, expenses or liabilities arising out of
actions or omissions or alleged actions or omissions occurring at or prior to
the Effective Time to the same extent and on the same terms and conditions
(including with respect to advancement of expenses) provided for in the
Company's Organizational Documents in effect at the date hereof (to the extent
consistent with applicable Law).
(b) For a period of six years after the Effective Time, the Surviving
Corporation shall maintain in effect directors' and officers' liability
insurance covering the persons who are currently covered by the Company's
existing directors' and officers' liability insurance with respect to claims
arising from facts or events which occurred before the Effective Time, on terms
and conditions no less favorable to such directors and officers than those in
effect on the date hereof; provided that in no event shall the Surviving
Corporation be required to make annual premium payments for such insurance in
excess of 200% of the premiums paid by the Company for such insurance as of the
date hereof.
5.5 Stockholder Litigation. Each of the Company on the one hand and
MergerCo and Purchaser, on the other hand, shall give the other the reasonable
opportunity to participate in the defense of any stockholder litigation against
the Company, MergerCo or Purchaser, as applicable, and its directors, relating
to the transactions contemplated hereby.
5.6 Recapitalization. Each of the Company, MergerCo and Purchaser shall
use its best efforts to cause the transactions contemplated hereby, including
the Merger, to be accounted for as a recapitalization and such accounting
treatment to be accepted by their respective accountants and by the SEC, and
each of the Company, MergerCo and Purchaser agrees that it shall take no action
that, to their respective knowledge, would cause such accounting treatment not
to be obtained.
5.7 Certain Employee Matters. For a period of not less than one year
following the Closing Date, the Surviving Corporation shall provide employees
of the Company with compensation and benefits which are substantially
comparable in the aggregate to the compensation and benefits provided to such
employees as of the date of this Agreement (other than with respect to any
equity based compensation).
33
<PAGE> 39
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions to Obligations of Each Party. The obligation of the parties
to consummate the transactions contemplated hereby shall be subject to the
fulfillment of the following conditions on or prior to the Closing Date:
(a) No Injunction, etc. No statute, rule, order, decree or regulation shall
have been enacted or promulgated by any Governmental Authority of competent
jurisdiction (whether temporary, preliminary or permanent) that is in effect
and has the effect of prohibiting the consummation of the Merger or making the
Merger illegal. There shall be no order or injunction of a Governmental
Authority of competent jurisdiction (whether temporary, preliminary or
permanent) in effect precluding, restraining, enjoining or prohibiting
consummation of the Merger; provided, however, that the parties shall use
their reasonable commercial efforts to cause such order or injunction to be
vacated or lifted.
(b) Securities Law Matters. The Proxy Statement in form and substance
consistent with the intent of the parties set forth in Section 5.6 shall have
been cleared by the SEC, and any material "blue sky" and other state
securities Laws applicable to the registration and qualification of the
Surviving Corporation Common Stock following the Merger shall have been
complied with; and
(c) HSR and Other Approvals. The applicable waiting period (and any
extension thereof) under the HSR Act with respect to the actions contemplated
by this Agreement shall have expired or been terminated and all other material
authorizations, consents, orders or approvals of, or regulations, declarations
or filings with, or expirations of applicable waiting periods imposed by, any
Governmental Authority (including, without limitation, any foreign antitrust
filing) necessary for the consummation of the transactions contemplated
hereby, shall have been obtained or filed or shall have occurred.
(d) Financing. The Company shall have received at least $22.5 million of
debt financing pursuant to definitive financing agreements on terms
substantially similar to the terms set forth in the commitment letters
described in Section 3.6(ii) and (iii) (including the market flex provisions
thereof) or on less favorable terms that are acceptable to Purchaser.
34
<PAGE> 40
(e) Stockholder Approval. The Company Stockholder Approval shall have been
obtained.
(f) Ancillary Agreements. On or prior to the Closing Date, (i) the Company
and Purchaser shall have entered into a Stockholders Agreement (the
"Stockholders Agreement"), in the form of Exhibit C, dated as of the date
hereof, to become effective as of the Effective Time; (ii) the Company and
Purchaser shall have entered into a Registration Rights Agreement (the
"Registration Rights Agreement") in the form of Exhibit D, dated as of the
date hereof, to become effective as of the Effective Time; and (iii) the
Purchaser and each of the Continuing Stockholders shall have entered into a
Voting Agreement (each a "Voting Agreement") substantially in the form of
Exhibit G, dated as of the date hereof, to become effective as of the date
hereof; and all such agreements shall be in full force and effect.
6.2 Conditions to Obligations of MergerCo and Purchaser. The obligation of
MergerCo and Purchaser to consummate the transactions contemplated hereby shall
be subject to the fulfillment on or prior to the Closing Date of the following
conditions:
(a) Representations, Performance, etc. The representations and warranties
of the Company contained herein shall be true and correct in all respects (in
the case of any representation or warranty qualified as to materiality) or in
all material respects (in the case of any representation or warranty not so
qualified) at and as of the date hereof and on and as of the Closing Date with
the same effect as though made on and as of the Closing Date, and Purchaser
shall have received a certificate signed by the chief executive officer and
chief financial officer of the Company to such effect.
(b) Performance of Obligations of the Company. The Company shall have
performed or complied in all material respects with all conditions,
agreements, obligations and covenants required to be performed or complied
with prior to the Closing by the Company under this Agreement and Purchaser
shall have received a certificate signed by the chief executive officer and
chief financial officer of the Company to such effect.
(c) Consents. The Company shall have obtained and shall have delivered to
Purchaser on or prior to the Closing Date copies of all Governmental Approvals
and all Consents required or appropriate to be obtained by the Company or its
Subsidiaries in connection with the execution and delivery of this Agreement
and the Ancillary Agreements and the consummation of the transactions
contemplated
35
<PAGE> 41
hereby and thereby, including without limitation, the Consents set forth on
Schedule 6.2(c) of the Company Disclosure Letter.
(d) No Material Adverse Effect. From the date hereof through and including
the Effective Time, no event, occurrence, fact, condition, change, development
or effect shall have occurred, exist or come to exist that, individually or in
the aggregate, has constituted or resulted in, or could reasonably be expected
to constitute or result in, a Material Adverse Effect; it being understood
that the enactment of any regulation by the Food and Drug Administration
mandating pasteurization of fresh juice products shall not constitute a
Material Adverse Effect unless the Company would be unable to comply with such
new regulation without the occurrence of a Material Adverse Effect.
(e) Corporate Proceedings. As of the Closing Date, all corporate
proceedings of the Company in connection with this Agreement, the Ancillary
Agreements and the transactions contemplated hereby and thereby, and all
documents and instruments incident thereto, shall be reasonably satisfactory
in substance and form to Purchaser and its counsel, and Purchaser and its
counsel shall have received all such documents and instruments (including the
resignations of any officers of the Company or of its Subsidiaries), or copies
thereof, certified if requested, as may be reasonably requested.
(f) Dissenting Shares. The number of Dissenting Shares shall not exceed 5%
of the issued and outstanding shares of Company Common Stock.
(g) FIRPTA Certificate. Purchaser shall have received a certificate of the
Company, in accordance with Treasury Regulations Section 1.897-2(h), to the
effect that Company is not, and has not during the five year period preceding
the Effective Time been, a U.S. real property holding corporation within the
meaning of Section 897 of the Code.
(h) Employment Agreement. The Company and Robin Prever shall have entered
into an employment agreement (the "Employment Agreement"), in the form of
Exhibit E, dated as of the date hereof, to become effective as of the
Effective Time, and such agreement shall be in full force and effect.
(i) Consulting Agreement. The Company and North Castle Partners, L.L.C.
shall have entered into a Consulting Agreement (the "Consulting Agreement"),
in the form of Exhibit F, dated as of the date hereof, to become
36
<PAGE> 42
effective as of the Effective Time, and such agreement shall be in full force
and effect.
6.3 Conditions to Obligations of the Company. The obligation of the Company
to consummate the transactions contemplated hereby shall be subject to the
fulfillment, on or prior to the Closing Date, of the following conditions:
(a) Representations, Performance, etc. The representations and warranties
of MergerCo and Purchaser contained herein shall be true and correct in all
respects (in the case of any representation or warranty qualified as to
materiality) or in all material respects (in the case of any representation or
warranty not so qualified) at and as of the date hereof and on and as of the
Closing Date with the same effect as though made at and as of the Closing Date
and the Company shall have received a certificate of an officer of each of
MergerCo and Purchaser to such effect.
(b) Performance of Obligations of MergerCo and Purchaser. MergerCo and
Purchaser shall have performed or complied in all material respects with all
conditions, agreements, obligations and covenants required to be performed or
complied with prior to the Closing by MergerCo and Purchaser under this
Agreement and the Company shall have received a certificate of an officer of
each of MergerCo and Purchaser to such effect.
(c) Consents. Purchaser and MergerCo shall have obtained and shall have
delivered to the Company on or prior to the Closing Date copies of all
Governmental Approvals and all Consents required or appropriate to be obtained
by Purchaser and MergerCo in connection with the execution and delivery of
this Agreement and the Ancillary Agreements and the consummation of the
transactions contemplated hereby and thereby.
(d) Organizational Proceedings. As of the Closing Date, all organizational
proceedings of Purchaser and MergerCo in connection with this Agreement, the
Ancillary Agreements and the transactions contemplated hereby and thereby, and
all documents and instruments incident thereto, shall be reasonably
satisfactory in substance and form to the Company and its counsel, and the
Company and its counsel shall have received all such documents and
instruments, or copies thereof, certified if requested, as may be reasonably
requested.
37
<PAGE> 43
ARTICLE VII
TERMINATION
7.1 Termination. Notwithstanding anything herein to the contrary, this
Agreement may be terminated and the Merger may be abandoned at any time prior to
the Effective Time, whether before or after the Company Stockholder Approval has
been given:
(a) by the written agreement of the parties hereto;
(b) by either the Purchaser or the Company if (i) the Merger has not been
consummated on or prior to May 31, 2000 or such other date, if any, as
Purchaser and the Company shall agree upon (provided that the right to
terminate this Agreement under this Section 7.1(b)(i) shall not be available
to a party whose failure to fulfill any obligation under this Agreement has
been the cause of or resulted in the failure of the Merger to be consummated
on or before such date), or (ii) any Governmental Authority shall have issued
a statute, order, decree or regulation or taken any other action (which
statute, order, decree, regulation or other action the parties hereto shall
use their best efforts to lift), in each case permanently restraining,
enjoining or otherwise prohibiting the Merger or making the Merger illegal and
such statute, order, decree, regulation or other action shall have become
final and non-appealable.
(c) by the Company, upon 15 days' prior written notice, in the event of a
material breach of any representation, warranty, covenant or agreement on the
part of MergerCo or Purchaser such that the conditions set forth in Section
6.3(a) or 6.3(b) would not be satisfied as of the Effective Time, which breach
is not cured prior to the expiration of such 15 day period (provided that if
such breach is not curable, the Company may terminate this Agreement
immediately under this Section 7.1(c)); except where the Company is in
material breach of any representation, warranty, covenant or agreement.
(d) By the Company, (i) if holders of at least a majority, by vote, of the
outstanding Company Common Stock fail to approve and adopt this Agreement and
the transactions contemplated hereby at the Special Meeting (including any
postponement or adjournment thereof), or (ii) if prior to the Effective Time
either the Board of Directors of the Company or the Special Committee
withdraws, modifies or changes in a manner adverse to MergerCo its
recommendation of this Agreement or the Merger pursuant to Section 4.2;
provided in the case of
38
<PAGE> 44
clause (ii) that such termination shall not be effective until the Company
has made payment to North Castle of the Termination Fee and the Expense
Reimbursement Fee in accordance with Section 9.2 so long as MergerCo and
Purchaser have not breached their obligations hereunder.
(e) by Purchaser, if (i) holders of at least a majority, by vote, of the
outstanding Company Common Stock fail to approve and adopt this Agreement and
the transactions contemplated hereby at the Special Meeting (including any
postponement or adjournment thereof); (ii) either the Board of Directors of
the Company or the Special Committee withdraws, modifies or changes its
recommendation of this Agreement or the Merger in a manner adverse to MergerCo
or shall have resolved to do any of the foregoing or the Board of Directors of
the Company shall have recommended to the Stockholders any Company Takeover
Proposal or resolved to do so; (iii) a tender offer or exchange offer for
outstanding shares of capital stock of the Company then representing 35% or
more of the combined power to vote generally for the election of directors is
commenced, and the Board of Directors of the Company does not recommend that
Stockholders not tender their shares into such tender or exchange offer; or
(iv) any Person shall have acquired beneficial ownership or right to acquire
beneficial ownership of, or any "group" (as such term is defined under Section
13(d) of the Exchange Act and the rules and regulations promulgated
thereunder), shall have been formed that beneficially owns, or has the right
to acquire beneficial ownership of, outstanding shares of capital stock of the
Company then representing 35% or more of the combined power to vote generally
for the election of directors.
(f) by Purchaser, upon 15 days' prior written notice, in the event of a
material breach of any representation, warranty, covenant or agreement on the
part of the Company such that the conditions set forth in Section 6.2(a) or
6.2(b) would not be satisfied as of the Effective Time, which breach is not
cured prior to the expiration of such 15 day period (provided that if such
breach is not curable, Purchaser may terminate this Agreement immediately
under this Section 7.1(f)); except where Purchaser or MergerCo is in material
breach of any representation, warranty, covenant or agreement.
(g) by Purchaser, on the one hand, or the Company, on the other hand, if
any event shall occur or exist that otherwise shall have made it impossible to
satisfy a condition precedent to the obligation of the terminating party or
parties to consummate the transactions contemplated by this Agreement, unless
the occurrence or existence of such event, fact or condition shall be due to
the failure
39
<PAGE> 45
of the terminating party or parties to perform or comply with any of the
agreements, covenants or conditions hereof to be performed or complied with by
such party prior to the Closing Date.
(h) by the Company, if the Board of Directors of the Company determines in
good faith, based upon the opinion of its outside legal counsel, that the
failure to terminate this Agreement would constitute a breach of the fiduciary
duties of the Board of Directors of the Company to the Stockholders under
applicable law.
7.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to the provisions of Section 7.1, this Agreement shall become
void and have no effect, without any liability to any Person in respect hereof
or of the transactions contemplated hereby on the part of any party hereto, or
any of its directors, officers, employees, agents, consultants, representatives,
advisers, or Affiliates, except as specified in Section 9.2 and except for any
liability resulting from such party's breach of this Agreement.
ARTICLE VIII
DEFINITIONS
8.1 Definition of Certain Terms. The terms defined in this Section 8.1,
whenever used in this Agreement (including in the Schedules), shall have the
respective meanings indicated below for all purposes of this Agreement (each
such meaning to be equally applicable to the singular and the plural forms of
the respective terms so defined). All references herein to a Section, Article or
Schedule are to a Section, Article or Schedule of or to this Agreement, unless
otherwise indicated.
2000 Note: as defined in Section 2.4(a).
Affiliate: of a Person means a Person that directly or indirectly through
one or more intermediaries, controls, is controlled by, or is under common
control with, the first Person, and with respect to a natural person shall
include any child, stepchild, grandchild, parent, stepparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or
sister-in-law, and shall include adoptive relationships. "Control" (including
the terms "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of a Person, whether
40
<PAGE> 46
through the ownership of voting securities, by contract or credit
arrangement, as trustee or executor, or otherwise.
Agreement: this Stock Purchase Agreement and Agreement and Plan of Merger,
as the same may be amended from time to time.
Ancillary Agreements: the Stockholders Agreement, Voting Agreements,
Registration Rights Agreement, Employment Agreement and Consulting Agreement.
Antitrust Division: as defined in Section 5.2(c).
Assets: as defined in Section 2.9.
Audited Financial Statements: the audited consolidated financial statements
of the Company as at and for the years ended December 31, 1998, 1997 and 1996,
including (i) balance sheets and statements of income, cash flows and
stockholders equity, (ii) the notes thereto, and (iii) a report thereon from
PricewaterhouseCoopers, LLP, the Company's independent auditors.
Balance Sheet: the balance sheet of the Company as of December 31, 1998
included in the Audited Financial Statements.
Business: any business in which the Company or its Subsidiaries is engaged
as of the Effective Time.
Business Day: shall mean a day other than a Saturday, Sunday or other day
on which commercial banks in The City of New York are authorized or required
to close.
Cashed Out Shares: with respect to any Continuing Stockholder, a number of
shares of Company Common Stock equal to the number listed under the column
captioned "Cashed Out Shares" opposite such Continuing Stockholder's name on
Annex A to this Agreement, subject to the adjustment provisions in Annex A.
CERCLA: the Comprehensive Environmental Response, Compensation and
Liability Act, as amended, 42 U.S.C. Section 9601 et seq.
Certificate of Merger: as defined in Section 1.9.
41
<PAGE> 47
Class A Common Stock: as defined in Section 1.3(a).
Class B Common Stock: as defined in Section 1.3(a).
Closing: as defined in Section 1.10.
Closing Date: as defined in Section 1.10.
Code: the Internal Revenue Code of 1986, as amended.
Company: as defined in the recitals to this Agreement.
Company Acquisition Agreement: as defined in Section 4.2(b).
Company Common Stock: as defined in Section 1.3(a).
Company Disclosure Letter: as defined in Section 2.1(b).
Company Reports: as defined in Section 2.21.
Company SEC Documents: as defined in Section 2.21.
Company Stock Option: as defined in Section 1.5(a).
Company Stock Option Plans: as defined in Section 1.5(a).
Company Stockholder Approval: as defined in Section 2.2.
Company Superior Proposal: any proposal made by a third party to acquire,
directly or indirectly, including pursuant to a tender offer, exchange offer,
merger, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction, for consideration consisting of cash
and/or securities, more than 25% of the combined voting power of the shares of
the Company's capital stock then outstanding or all or substantially all the
assets of the Company and otherwise on terms which the Special Committee
determines in its good faith judgment, based on the advice of the Financial
Advisor or an investment banking firm of national reputation and after
consultation with outside counsel, to be more favorable to the Stockholders
than the Merger and for which financing, to the extent required, is then
committed or which, in the good faith judgment of the Special Committee, is
reasonably capable of being obtained by such third party.
42
<PAGE> 48
Company Takeover Event: any direct or indirect acquisition or purchase of a
business that constitutes 25% or more of the net revenues, net income or
assets of the Company and its Subsidiaries, taken as a whole, or 25% or more
of any class of equity securities of the Company, any tender offer or exchange
offer that if consummated would result in any person beneficially owning 25%
or more of any class of any equity securities of the Company, or any merger,
consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving the Company (or any Subsidiary
whose business constitutes 25% or more of the net revenues, net income or
assets of the Company and its Subsidiaries taken as a whole), other than the
transactions contemplated by this Agreement.
Company Takeover Proposal: any inquiry, proposal or offer from any person
relating to any Company Takeover Event.
Competition Laws: statutes, rules, regulations, orders, decrees,
administrative and judicial doctrines, and other laws that are designed or
intended to prohibit, restrict or regulate actions having the purpose or
effect of monopolization, lessening of competition or restraint of trade,
including the HSR Act.
Computer System: with respect to any Person, any and all Software,
semiconductor chips, microprocessors, embedded microcontrollers and other
hardware containing programming instructions of any kind, whether owned or
licensed or otherwise held by such Person for use.
Consent: any consent, approval, order, authorization, waiver, agreement,
license, declaration, filing or report or notice to, any Person.
Consulting Agreement: as defined in Section 6.2(i).
Continuing Stockholders: the Stockholders listed on Annex A to this
Agreement.
Delaware Secretary of State: as defined in Section 1.9.
DGCL: as defined in the recitals to this Agreement.
Dissenting Shares: as defined in Section 1.6.
Dissenting Stockholders: as defined in Section 1.3(a).
43
<PAGE> 49
Effective Time: as defined in Section 1.9.
Employees: any employee or former employee of the Company or its
Subsidiaries or the beneficiaries or dependants of any such employee or former
employee.
Employment Agreement: as defined in Section 6.2(h).
Environmental Claims: any complaint, notice, directive, order, claim,
litigation, investigation, judicial or administrative proceeding, judgment,
letter or other communication from any governmental agency, office or other
authority, or any third party, involving violations of Environmental Laws or
Releases of Hazardous Materials (i) from any assets, properties or businesses
of the Company or its Subsidiaries; (ii) from properties or businesses
adjoining any of the Real Property; or (iii) from or onto any facilities which
received Hazardous Materials generated by the Company or its Subsidiaries.
Environmental Laws: all applicable Laws relating to the protection of the
environment, to human health and safety, to natural resources or to any use,
sale, manufacture, treatment, generation, processing, storage, disposal,
abatement, existence, Release, threatened Release, transportation or handling
of any Hazardous Materials, including, without limitation, (i) CERCLA, the
Resource Conservation and Recovery Act, and the Occupational Safety and Health
Act, and (ii) all other governmental requirements pertaining to reporting,
licensing, permitting, investigation or remediation of Releases or threatened
Releases of Hazardous Substances into the air, surface water, groundwater or
land, or relating to the manufacture, processing, distribution, use, sale,
treatment, receipt, storage, disposal, transport or handling of Hazardous
Substances.
ERISA: the Employee Retirement Income Security Act of 1974, as amended.
Exchange Act: the Securities Exchange Act of 1934, as amended.
Exchange Agent: as defined in Section 1.4(a).
Expense Reimbursement Fee: as defined in Section 9.2(b).
Fairness Opinion: as defined in Section 2.24.
44
<PAGE> 50
Financial Advisor: as defined in Section 2.24.
Financial Statements: the Audited Financial Statements and the Interim
Financial Statements.
FTC: as defined in Section 5.2(c).
Fund: as defined in Section 3.6.
GAAP: United States generally accepted accounting principles.
GFG Warrant: as defined in Section 2.4(a).
Governmental Approval: any written consent, approval, authorization,
waiver, permit, concession, franchise, Agreement, license, exemption or order
of, declaration or filing with, or report or notice to, any Governmental
Authority.
Governmental Authority: as defined in Section 2.3(b).
Hazardous Materials: any substance that: (i) is or contains asbestos, urea
formaldehyde foam insulation, polychlorinated biphenyls, petroleum or
petroleum-derived substances or wastes, or radon gas, or (ii) requires
investigation, removal or remediation under any applicable Environmental Law,
or is defined, listed or identified as a "hazardous waste" or "hazardous
substance" thereunder.
HSR Act: the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
Intellectual Property: any and all United States and foreign: patents and
applications, including all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof; trademarks, service
marks, trade names, trade dress, domain names, logos, business and product
names, slogans, and registrations and applications for registration or renewal
thereof; copyrights and registrations or renewals thereof; copyrightable
works; World Wide Web sites; Software; inventions, processes, designs,
formulae, trade secrets, know-how, R&D, manufacturing and production processes
and techniques; confidential business and technical information; all other
intellectual property and proprietary rights similar to the foregoing; all
rights to sue for and remedies against past, present and future infringements
of any or all of the foregoing; rights of priority and protection of interests
therein under the Laws of any jurisdiction, copies and
45
<PAGE> 51
tangible embodiments thereof (in whatever form or medium, including electronic
media).
Interim Financial Statements: the unaudited consolidated financial
statements of the Company for the periods ended March 31, 1999, June 30, 1999,
and September 30, 1999, including a balance sheet and statements of income,
cash flows and stockholders equity.
IRS: the Internal Revenue Service.
Law: all applicable provisions of all (a) constitutions, treaties,
statutes, laws (including the common law), codes, rules, regulations,
ordinances or orders of any Governmental Authority, (b) Governmental Approvals
and (c) orders, decisions, injunctions, judgments, awards and decrees of or
agreements with any Governmental Authority.
Leased Real Property: all interests leased pursuant to Leases.
Leases: the real property leases, subleases, licenses and occupancy
agreements pursuant to which the Company or its Subsidiaries is lessee,
sublessee, licensee or occupant.
Lien: any mortgage, pledge, hypothecation, right of others, claim, security
interest, encumbrance, lease, sublease, license, occupancy agreement, adverse
claim or interest, easement, covenant, encroachment, burden, title defect,
title retention Agreement, voting trust Agreement, interest, equity, option,
lien, right of first refusal, charge or other restrictions or limitations of
any nature whatsoever, including but not limited to such as may arise under
any Material Contracts.
Listed Intellectual Property: as defined in Section 2.12(a).
Litigation: any action, cause of action, claim, demand, suit, proceeding,
citation, summons, subpoena, inquiry or investigation of any nature, civil,
criminal, regulatory or otherwise, in law or in equity, pending or threatened,
by or before any court, tribunal, arbitrator or other Governmental Authority,
or by or on behalf of any third party.
Material Adverse Effect: (i) any event, occurrence, fact, condition, change
or effect that is, or would reasonably be expected to be, materially adverse
to the Business, Assets, liabilities, prospects, results of operations or
financial or other
46
<PAGE> 52
condition of the Company or its Subsidiaries, taken as a whole, or (ii) a
material impairment of the ability of the Company to perform its obligations
hereunder or to consummate the transactions contemplated hereby and thereby.
Material Contracts: all loan agreements, indentures, letters of credit
(including related letter of credit applications and reimbursement
obligations), mortgages, security agreements, pledge agreements, deeds of
trust, bonds, notes, guarantees, surety obligations, warranties, material
licenses, material franchises, permits, powers of attorney, material leases,
endorsement agreements, and other agreements, contracts, instruments,
obligations, material arrangements and understandings, written or oral, to
which the Company or any of its Subsidiaries is a party or by which any of
their properties or assets may be bound or affected, in each case as amended,
supplemented, waived or otherwise modified, that are of the types listed in
clauses (i) through (xiv) below:
(i) leases, subleases, licenses, occupancy agreements, material permits,
insurance policies, material agreements, Governmental Approvals and other
Material Contracts concerning or relating to the Real Property;
(ii) material employment, consulting, severance, agency, bonus,
compensation, or other trusts, funds and other Material Contracts (other than
the Plans) relating to or for the benefit of current, future or former
employees, officers, directors, sales representatives, distributors, dealers,
agents, independent contractors or consultants (whether or not legally
binding) of the Company or its Subsidiaries, requiring annual payments in
excess of $100,000, including sales agency, copacking or distributorship
agreements or arrangements for the sale of any of the products or services of
the Company or its Subsidiaries;
(iii) Intellectual Property licenses;
(iv) broker's or finder's contracts;
(v) joint venture, partnership and similar contracts, agreements,
arrangements and understandings involving a sharing of profits or expenses;
(vi) stock purchase agreements, asset purchase agreements and other
acquisition or divestiture agreements, including but not limited to any
agreements relating to the acquisition, lease or disposition of the Company or
its Subsidiaries, any material assets or properties (other than sales of
inventory made in the ordinary course of business), any business, or any
capital stock of or other interest
47
<PAGE> 53
in any Person by the Company or its Subsidiaries, within the last three years,
which involve continuing indemnity or other obligations;
(vii) contracts prohibiting or restricting the ability of the Company, its
Subsidiaries or the Business to engage in any business or operate in any
geographical area or to compete with any Person;
(viii) orders and other contracts for the purchase or sale of materials,
supplies, products or services, involving aggregate payments in excess of
$100,000 in each case or, other than with respect to such orders or contracts
entered into in the ordinary course of business, $250,000 in the aggregate;
(ix) contracts providing for future payments that are conditioned, in whole
or in part, on a change in control of any of the Company or its Subsidiaries;
(x) powers of attorney, except routine powers of attorney relating to
representation before governmental agencies or given in connection with
qualification to conduct business in another jurisdiction;
(xi) contracts not entered into in the ordinary course of business;
(xii) contract or series of related contracts with respect to which the
aggregate amount that could reasonably be expected to be paid or received
thereunder in the future exceeds $25,000 per annum or, other than with respect
to such contracts entered into in the ordinary course of business, $100,000 in
the aggregate;
(xiii) contracts that are or will be material to the business, operations,
results of operations, condition (financial or otherwise), assets or
properties of the Company or its Subsidiaries; and
(xiv) contracts providing for future payments that are conditioned, in
whole or in part, on the future performance of the Company or its
Subsidiaries.
Merger: as defined in Section 1.1(a).
MergerCo: as defined in the recitals to this Agreement.
Merger Consideration: the cash and shares of Surviving Corporation Common
Stock paid to Stockholders pursuant to Section 1.3.
48
<PAGE> 54
Non-Continuing Stockholder: any Stockholder not listed on Annex A to this
Agreement.
Organizational Documents: as defined in Section 2.1(c).
Owned Intellectual Property: as defined in Section 2.12(a).
Owned Real Property: the real property owned by the Company or its
Subsidiaries, together with all structures, facilities, improvements, fixtures
and systems attached or appurtenant thereto and all easements, licenses and
rights relating to the foregoing.
Permitted Liens: (i) Liens securing liabilities for which adequate reserves
are included on the Balance Sheet, to the extent so reserved, that do not
materially interfere with the use of the property subject thereto or extend to
or cover any assets of any other Affiliate of Purchaser upon consummation of
the transactions contemplated by this Agreement, (ii) Liens for Taxes not yet
due and payable, or that are being contested in good faith by appropriate
proceedings, (iii) mechanic's Liens, landlord's Liens and warehouseman's Liens
securing obligations arising in the ordinary course of business that are not
more than 30 days past due or are being contested in good faith by appropriate
proceedings or (iv) Liens that, individually and in the aggregate, do not and
would not materially detract from the value of any of the property or Assets
or materially interfere with the use thereof as currently used or proposed to
be used.
Per Share Amount: an amount equal to the quotient obtained by dividing the
Purchase Price by the number of Purchased Shares.
Per Share Merger Consideration: $6.00.
Person: any natural person, firm, partnership, association, corporation,
company, trust, business trust, Governmental Authority or other entity.
Plan: each "employee benefit plan", as such term is defined in Section 3(3)
of ERISA, and each bonus, incentive or deferred compensation, severance,
termination, retention, change of control, stock option, stock appreciation,
stock purchase, phantom stock or other equity-based, performance or other
employee or retiree benefit or compensation plan, program, arrangement,
Agreement, policy or understanding, whether written or unwritten, that
provides or may provide benefits or compensation in respect of any Employee,
or under which any Employee is or
49
<PAGE> 55
may become eligible to participate or derive a benefit and that is or has
been maintained or established by the Company or its Subsidiaries or to which
the Company or its Subsidiaries contributes or is or has been obligated or
required to contribute.
Policies: as defined in Section 2.13.
Proxy Statement: as defined in Section 5.3(a).
Purchaser: as defined in the recitals to this Agreement.
Purchase Price: as defined in Section 1.1(b).
Purchased Shares: a number (rounded down to the nearest whole share) of
newly issued shares of Surviving Corporation Common Stock equal to the
Purchase Price divided by the Per Share Merger Consideration.
Real Property: the Owned Real Property and the Leased Real Property.
Registration Rights Agreement: as defined in Section 6.1(f).
Release: any releasing, disposing, discharging, injecting, spilling,
leaking, leaching, pumping, dumping, emitting, escaping, emptying, seeping,
dispersal, migration, transporting, placing and the like, including without
limitation, the moving of any materials through, into or upon, any land, soil,
surface water, ground water or air, or otherwise entering into the
environment.
Return: any return, report, declaration, form, claim for refund or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
Rollover Shares: with respect to any Continuing Stockholder, a number of
shares of Company Common Stock equal to the number listed under the column
captioned "Rollover Shares" opposite a Continuing Stockholder's name on Annex
A to this Agreement, subject to the adjustment provisions in Annex A.
Schedule 13E-3: as defined in Section 5.3(c).
SEC: the Securities and Exchange Commission.
50
<PAGE> 56
Securities Act: the Securities Act of 1933, as amended.
Software: all computer software, including but not limited to application
software and system software, including all source code and object code
versions thereof, in any and all forms and media, whether recorded on paper,
magnetic media or other electronic or non-electronic media (including data and
related documentation, user manuals, training materials, flow charts,
diagrams, descriptive tests and programs, computer print-outs, underlying
tapes, computer databases and similar items), integrated circuits, embedded
systems, and other electro-mechanical or processor based systems.
Special Committee: as defined in the recitals hereto.
Special Meeting: as defined in Section 5.3(b).
Stock Purchase: as defined in Section 1.1(b).
Stockholders: the holders of the Company Common Stock.
Stockholders Agreement: as defined in Section 6.1(f).
Subsidiaries: each corporation or other Person in which a Person owns or
controls, directly or indirectly, capital stock or other equity interests
representing at least 50% of the outstanding voting stock or other equity
interests.
Surviving Corporation: as defined in Section 1.1(a).
Surviving Corporation Common Stock: common stock, par value $.01 per share,
of the Surviving Corporation.
Tax: any federal, state, provincial, local, foreign or other income,
alternative, minimum, accumulated earnings, personal holding company,
franchise, capital stock, net worth, capital, profits, windfall profits, gross
receipts, value added, sales (including, without limitation, bulk sales), use,
goods and services, excise, customs duties, transfer, conveyance, mortgage,
registration, stamp, documentary, recording, premium, severance, environmental
(including, without limitation, taxes under Section 59A of the Code), real
property, personal property, ad valorem, intangibles, rent, occupancy,
license, occupational, employment, unemployment insurance, social security,
disability, workers' compensation, payroll, health care, withholding,
estimated or other similar tax, levy, impost, fee,
51
<PAGE> 57
duty or other governmental charge or assessment or deficiencies thereof
(including all interest and penalties thereon and additions thereto, whether
disputed or not) imposed by any Governmental Authority or other taxing
authority.
Termination Fee: as defined in Section 9.2(b).
Transaction Expenses: as defined in Section 9.2(a).
Treasury Regulations: the regulations prescribed under the Code.
Voting Agreements: as defined in the recitals to this Agreement.
Year 2000 Compatibility: (and variations thereof) means, with respect to
any Computer System, that such Computer System (i) records, stores, processes
and provides true and accurate dates and calculations for dates and spans of
dates, (ii) is and will be able to operate on a basis comparable to its
current operation during and after calendar year 2000 A.D., including, but not
limited to, leap years, and (iii) shall not end abnormally or provide invalid
or incorrect results as a result of date data which represents or references
(or fails to represent or reference) different centuries or more than one
century.
Any reference in this Agreement to a statute shall be to such statute, as
amended from time to time, and to the rules and regulations promulgated
thereunder. The words "include," "includes" and "including" shall be deemed to
be followed by the phrase "without limitation."
ARTICLE IX
MISCELLANEOUS
9.1 Survival. No representations or warranties of the parties set forth in
this Agreement shall survive beyond the Effective Time.
9.2 Expenses. (a) Except as otherwise provided herein, if this Agreement is
terminated prior to Closing, all costs and expenses incurred in connection with
this Agreement and the consummation of the transactions contemplated hereby (the
"Transaction Expenses") shall be paid by the party incurring such expenses. If
the Closing does occur, the Company shall pay all Transaction Expenses of
MergerCo, Purchaser and the Company.
52
<PAGE> 58
(b) The Company shall promptly pay North Castle a termination fee of $1.2
million (the "Termination Fee"), plus documented reasonable out of pocket costs
and expenses incurred by MergerCo and Purchaser in connection with this
Agreement and the consummation of the transactions contemplated hereby in an
amount not to exceed $300,000 (the "Expense Reimbursement Fee") in the event
that this Agreement is terminated pursuant to Sections 7.1(d)(ii) or
7.1(e)(ii)-(iv). Any such payment shall be made by wire transfer of immediately
available funds.
(c) The Company acknowledges that the agreements contained in this Section
9.2 are an integral part of the transactions contemplated by this Agreement, and
that, without these agreements, Purchaser and MergerCo would not enter into this
Agreement; accordingly, if the Company fails promptly to pay the amount due
pursuant to this Section 9.2, and, in order to obtain such payment, Purchaser
and MergerCo commence a suit which results in a judgment against the Company for
any or all of the Termination Fee or the Expense Reimbursement Fee set forth in
this Section 9.2, the Company shall pay to Purchaser and MergerCo their costs
and expenses (including attorneys' fees and expenses) in connection with such
suit.
(d) This Section 9.2 shall survive any termination of this Agreement.
9.3 Severability. If any provision of this Agreement is inoperative or
unenforceable for any reason, such circumstances shall not have the effect of
rendering the provision in question inoperative or unenforceable in any other
case or circumstance, or of rendering any other provision or provisions herein
contained invalid, inoperative, or unenforceable to any extent whatsoever. The
invalidity of any one or more phrases, sentences, clauses, sections or
subsections of this Agreement shall not affect the remaining portions of this
Agreement.
9.4 Notices. All notices and other communications made in connection with
this Agreement shall be in writing and shall be deemed to have been duly given
if (a) mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid, (b) transmitted by hand delivery, (c) sent by
next-day or overnight mail or delivery or (d) sent by fax or telecopy, addressed
as follows:
(i) if to MergerCo, Purchaser or, from and after the Closing, the
Company, to such person:
c/o North Castle Partners, L.L.C.
60 Arch Street
Greenwich, CT 06830
53
<PAGE> 59
Telephone: (203) 862-3200
Telecopy: (203) 618-1860
Attention: Peter J. Shabecoff
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Telephone: (212) 909-6000
Telecopy: (212) 909-6836
Attention: Franci J. Blassberg, Esq.
(ii) if to the Company prior to the Closing, to:
Saratoga Beverage Group, Inc.
11 Geyser Road
Saratoga Springs, NY 12366
Telephone: (518) 584-6363 x11
Telecopy: (518) 584-0380
Attention: Chief Financial Officer
with a copy to:
Swidler Berlin Shereff Friedman, LLP
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Telephone: (212) 891-9268
Telecopy: (212) 891-9598
Attention: Charles I. Weissman, Esq.
or, in each case, at such other address as may be specified in writing to the
other party hereto.
All such notices, requests, demands, waivers and other communications shall
be deemed to have been received (w) if by personal delivery on the day after
such delivery, (x) if by certified or registered mail, on the seventh business
day after the mailing thereof, (y) if by next-day or overnight mail or delivery,
on the day delivered, (z) if by
54
<PAGE> 60
telecopy or telegram, on the next day following the day on which such telecopy
or telegram was sent.
9.5 Entire Agreement. This Agreement (including the schedules hereto), the
Ancillary Agreements (when executed and delivered) and the Confidentiality
Agreement constitute the entire Agreement, and supersede all prior agreements
and understandings, both written and oral, between the parties with respect to
the subject matter hereof.
9.6 Counterparts; Headings. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument. The headings contained in this
Agreement are for purposes of convenience only and shall not affect the meaning
or interpretation of this Agreement.
9.7 Governing Law, etc. (a) EXCEPT TO THE EXTENT THE LAWS OF THE STATE OF
DELAWARE MANDATORILY APPLY, THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS,
INCLUDING AS TO VALIDITY, INTERPRETATION AND EFFECT, BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS RULES THEREOF TO
THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES
OF AMERICA LOCATED IN THE COUNTY OF NEW YORK SOLELY IN RESPECT OF THE
INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMENT AND OF THE
DOCUMENTS REFERRED TO IN THIS AGREEMENT, AND IN RESPECT OF THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY. EACH PARTY HEREBY WAIVES AND AGREES NOT TO
ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR THE INTERPRETATION
AND ENFORCEMENT HEREOF, OR ANY SUCH DOCUMENT OR IN RESPECT OF ANY SUCH
TRANSACTION, THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT
MAINTAINABLE IN SUCH COURTS OR THAT THE VENUE THEREOF MAY NOT BE APPROPRIATE OR
THAT THIS AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE ENFORCED IN OR BY SUCH
COURTS. EACH PARTY HEREBY CONSENTS TO AND GRANTS ANY SUCH COURT JURISDICTION
OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER OF ANY SUCH DISPUTE
AND AGREE THAT THE MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH ANY
SUCH ACTION OR PROCEEDING
55
<PAGE> 61
IN THE MANNER PROVIDED IN SECTION 9.4 OR IN SUCH OTHER MANNER AS MAY BE
PERMITTED BY LAW, SHALL BE VALID AND SUFFICIENT SERVICE THEREOF.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT
SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OR ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH,
TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH PARTY MAKES THIS
WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 9.7(b).
9.8 Binding Effect; No Third Party Beneficiaries. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, successors and permitted assigns, subject to Section 9.9. Nothing in this
Agreement shall confer any rights upon any person or entity other than the
parties hereto and their respective heirs, successors and permitted assigns.
9.9 Assignment. This Agreement shall not be assignable by any of the
parties hereto without the prior written consent of the other parties, provided,
that, (a) the Company may assign this Agreement and the Ancillary Agreements to
which it is a party to any lenders to the Company as security for obligations to
such lenders, and (b) Purchaser may assign this Agreement to any of its
Affiliates, or to any lender to Purchaser as security for obligations to such
lender, and provided, further, that no assignment by Purchaser shall in any way
affect Purchaser's obligations or liabilities under this Agreement.
9.10 Amendment; Waivers, etc. No amendment, modification or discharge of
this Agreement, and no waiver hereunder, shall be valid or binding unless set
56
<PAGE> 62
forth in writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought. Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the party granting such waiver
in any other respect or at any other time. Neither the waiver by any of the
parties hereto of a breach of or a default under any of the provisions of this
Agreement, nor the failure by any of the parties, on one or more occasions, to
enforce any of the provisions of this Agreement or to exercise any right or
privilege hereunder, shall be construed as a waiver of any other breach or
default of a similar nature, or as a waiver of any of such provisions, rights or
privileges hereunder. The rights and remedies of any party based upon, arising
out of or otherwise in respect of any inaccuracy or breach of any
representation, warranty, covenant or agreement or failure to fulfill any
condition shall in no way be limited by the fact that the act, omission,
occurrence or other state of facts upon which any claim of any such inaccuracy
or breach is based may also be the subject matter of any other representation,
warranty, covenant or agreement as to which there is no inaccuracy or breach.
The representations and warranties of the Company shall not be affected or
deemed waived by reason of any investigation made by or on behalf of MergerCo or
Purchaser (including but not limited to by any of their advisors, consultants or
representatives) or by reason of the fact that MergerCo, Purchaser or any of
their advisors, consultants or representatives knew or should have known that
any such representation or warranty is or might be inaccurate.
9.11 Attorneys' Fees. As between the parties to this Agreement, in any
action or proceeding brought to enforce any provision of this Agreement, or
where any provision hereof is validly asserted as a defense, the successful
party shall be entitled to recover reasonable attorneys' fees in addition to its
costs and expenses and any other available remedy.
57
<PAGE> 63
IN WITNESS WHEREOF, the parties have duly executed this Stock Purchase
Agreement and Agreement and Plan of Merger as of the date first above written.
SARATOGA BEVERAGE GROUP, INC.
By: /s/ Kim James
-------------------------------------
Name: Kim James
Title: Chief Financial Officer
NCP-SBG RECAPITALIZATION CORP.
By: /s/ Peter J. Shabecoff
-------------------------------------
Name: Peter J. Shabecoff
Title: Vice President
NCP-SBG, L.P.
By: NCP-SBG GP, L.L.C.
its General Partner
By: /s/ Peter J. Shabecoff
-------------------------------------
Name: Peter J. Shabecoff
Title: Executive Vice President
58
<PAGE> 64
Annex A to the Stock
Purchase Agreement and
Agreement and Plan of
Merger
<TABLE>
<CAPTION>
CONTINUING STOCKHOLDER TOTAL CASHED ROLLOVER INCREASE
- ---------------------- ----- ------ -------- --------
SHARES OUT SHARES SHARES PERCENTAGE
------ ---------- ------ ----------
<S> <C> <C> <C> <C>
Robin Prever 318,285 251,499 66,786 12.1429%
Anthony Malatino 718,127 557,056 161,071 29.2857%
Steel Partners II, L.P. 506,258 450,369 55,889 18.5714%
Warren G. Lichtenstein 46,254 0 46,254 0%
Steven Bogen 386,793 304,293 82,500 15.0000%
Pershing 200,000 141,071 58,929 10.7143%
Securities Limited
Jurg Walker 224,500 145,929 78,571 14.2857%
=================================================================================================================
TOTAL 2,400,217 1,850,217 550,000 100.00%
</TABLE>
If the Purchase Price exceeds $28,660,000, then the aggregate number of Rollover
Shares shall be increased such that the aggregate value of all of the Rollover
Shares equals 11.11% of the Purchase Price, and the aggregate number of Cashed
Out Shares shall be decreased in an amount equal to the increase in the
aggregate number of Rollover Shares. Such increase and decrease in the number of
Rollover Shares and Cashed Out Shares, respectively, shall be allocated among
the Continuing Stockholders in accordance with the percentages set forth in the
column captioned "Increase Percentage".
<PAGE> 65
Exhibit A
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
SARATOGA BEVERAGE GROUP, INC.
Saratoga Beverage Group, Inc., a corporation organized and existing under
the laws of the State of Delaware (the "Corporation"), hereby certifies as
follows:
1. The name of the Corporation is Saratoga Beverage Group, Inc. The
Corporation was initially incorporated in the State of Delaware under the name
of Saratoga Spring Water Company on May 5, 1993.
2. This Amended and Restated Certificate of Incorporation was proposed by
the Board of Directors of the Corporation and adopted by the stockholders of the
Corporation in the manner and by the vote prescribed by Sections 242 and 245 of
the General Corporation Law of the State of Delaware, and is as follows:
FIRST: The name of the Corporation is Saratoga Beverage Group, Inc.
SECOND: The Corporation's registered office in the State of Delaware is at
Corporation Trust Center, 1209 Orange Street in the City of Wilmington, County
of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
THIRD: The nature of the business of the Corporation and its purpose is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
FOURTH: The aggregate number of shares of capital stock which the
Corporation shall have authority to issue is ____________ shares of common
stock, par value $__ per share.
FIFTH: The following provisions are inserted for the management of the
business and for the conduct of the affairs of the Corporation and for the
purpose of creating, defining, limiting and regulating the powers of the
Corporation and its directors and stockholders:
<PAGE> 66
(a) The number of directors of the Corporation shall be fixed and may
be altered from time to time in the manner provided in the By-Laws, and
vacancies in the Board of Directors and newly created directorships
resulting from any increase in the authorized number of directors may be
filled, and directors may be removed, as provided in the By-Laws.
(b) The election of directors may be conducted in any manner approved
by the stockholders at the time when the election is held and need not be
by written ballot.
(c) All corporate powers and authority of the Corporation (except as
at the time otherwise provided by law, by this Certificate of Incorporation
or by the By-Laws) shall be vested in and exercised by the Board of
Directors.
(d) The Board of Directors shall have the power without the assent or
vote of the stockholders to adopt, amend, alter or repeal the By-Laws of
the Corporation, except to the extent that the By-Laws or this Certificate
of Incorporation otherwise provide.
(e) No director of the Corporation shall be liable to the Corporation
or its stockholders for monetary damages for breach of his or her fiduciary
duty as a director, provided that nothing contained in this Article shall
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of the law, (iii) under Section 174 of the General
Corporation Law of the State of Delaware or (iv) for any transaction from
which the director derived an improper personal benefit.
SIXTH: The Corporation reserves the right to amend or repeal any
provision contained in this Certificate of Incorporation in the manner now or
hereafter prescribed by the laws of the State of Delaware, and all rights herein
conferred upon stockholders or directors are granted subject to this
reservation.
<PAGE> 67
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by _____________, its Secretary, this ____ day of ____________, 2000.
SARATOGA BEVERAGE GROUP, INC.
By:
-----------------------------------
Name:
Title:
<PAGE> 68
Exhibit B
================================================================================
SARATOGA BEVERAGE GROUP, INC.
AMENDED AND RESTATED BY-LAWS
As adopted on ___________, 2000
================================================================================
<PAGE> 69
SARATOGA BEVERAGE GROUP, INC.
AMENDED AND RESTATED BY-LAWS
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
- ------- ----
ARTICLE I
<S> <C>
STOCKHOLDERS ............................................................. 1
Section 1.01. Annual Meetings ........................................... 1
Section 1.02. Special Meetings .......................................... 1
Section 1.03. Notice of Meetings; Waiver ................................ 1
Section 1.04. Quorum .................................................... 2
Section 1.05. Voting .................................................... 2
Section 1.06. Voting by Ballot .......................................... 2
Section 1.07. Adjournment ............................................... 3
Section 1.08. Proxies ................................................... 3
Section 1.09. Organization; Procedure ................................... 3
Section 1.10. Consent of Stockholders in Lieu of Meeting................. 4
ARTICLE II
BOARD OF DIRECTORS ....................................................... 4
Section 2.01. General Powers ............................................ 4
Section 2.02. Number and Term of Office ................................. 5
Section 2.03. Election of Directors ..................................... 5
Section 2.04. Annual and Regular Meetings ............................... 5
Section 2.05. Special Meetings; Notice .................................. 5
Section 2.07. Adjournment ............................................... 6
Section 2.06. Quorum; Voting ............................................ 6
Section 2.08. Action Without a Meeting .................................. 6
Section 2.09. Regulations; Manner of Acting ............................. 6
Section 2.10. Action by Telephonic Communications ....................... 6
Section 2.11. Resignations .............................................. 6
</TABLE>
<PAGE> 70
<TABLE>
<S> <C>
Section 2.12. Removal of Directors ...................................... 7
Section 2.13. Vacancies and Newly Created Directorships ................. 7
Section 2.14. Compensation .............................................. 7
Section 2.15. Reliance on Accounts and Reports, etc ..................... 7
ARTICLE III
EXECUTIVE COMMITTEE AND OTHER COMMITTEES ................................. 7
Section 3.01. How Constituted ........................................... 7
Section 3.02. Powers .................................................... 8
Section 3.03. Proceedings ............................................... 8
Section 3.04. Quorum and Manner of Acting ............................... 8
Section 3.05. Action by Telephonic Communications ....................... 9
Section 3.06. Absent or Disqualified Members ............................ 9
Section 3.07. Resignations .............................................. 9
Section 3.08. Removal ................................................... 9
Section 3.09. Vacancies ................................................. 9
ARTICLE IV
OFFICERS ................................................................. 10
Section 4.01. Number .................................................... 10
Section 4.02. Election .................................................. 10
Section 4.03. Salaries .................................................. 10
Section 4.04. Removal and Resignation; Vacancies ........................ 10
Section 4.05. Authority and Duties of Officers .......................... 10
Section 4.06. The President ............................................. 10
Section 4.07. The Vice Presidents ....................................... 11
Section 4.08. The Secretary ............................................. 11
Section 4.09. The Treasurer ............................................. 12
Section 4.10. Additional Officers ....................................... 13
Section 4.11. Security .................................................. 13
ARTICLE V
CAPITAL STOCK ............................................................ 13
Section 5.01. Certificates of Stock ..................................... 13
Section 5.02. Signatures; Facsimile ..................................... 14
Section 5.03. Lost, Stolen or Destroyed Certificates .................... 14
Section 5.04. Transfer of Stock ......................................... 14
Section 5.05. Record Date ............................................... 14
</TABLE>
ii
<PAGE> 71
<TABLE>
<S> <C>
Section 5.06. Registered Stockholders ................................... 15
Section 5.07. Transfer Agent and Registrar .............................. 16
ARTICLE VI
INDEMNIFICATION .......................................................... 16
Section 6.01. Nature of Indemnity ....................................... 16
Section 6.02. Successful Defense ........................................ 17
Section 6.03. Determination That Indemnification Is Proper .............. 17
Section 6.04. Advance Payment of Expenses ............................... 17
Section 6.05. Procedure for Indemnification of Directors and Officers.... 18
Section 6.06. Survival; Preservation of Other Rights .................... 18
Section 6.07. Insurance ................................................. 19
Section 6.08. Severability .............................................. 19
ARTICLE VII
OFFICES .................................................................. 19
Section 7.01. Registered Office ......................................... 19
Section 7.02. Other Offices ............................................. 19
ARTICLE VIII
GENERAL PROVISIONS ....................................................... 20
Section 8.01. Dividends ................................................. 20
Section 8.02. Reserves .................................................. 20
Section 8.03. Execution of Instruments .................................. 20
Section 8.04. Corporate Indebtedness .................................... 20
Section 8.05. Deposits .................................................. 21
Section 8.06. Checks .................................................... 21
Section 8.07. Sale, Transfer, etc. of Securities ........................ 21
Section 8.08. Voting as Stockholder ..................................... 21
Section 8.09. Fiscal Year ............................................... 22
Section 8.10. Seal ...................................................... 22
Section 8.11. Books and Records; Inspection ............................. 22
ARTICLE IX
AMENDMENT OF BY-LAWS ..................................................... 23
Section 9.01. Amendment ................................................. 23
</TABLE>
iii
<PAGE> 72
<TABLE>
<S> <C>
ARTICLE X
CONSTRUCTION ............................................................. 23
Section 10.01. Construction ............................................. 23
</TABLE>
iv
<PAGE> 73
SARATOGA BEVERAGE GROUP, INC.
AMENDED AND RESTATED BY-LAWS
As adopted on ___________, 2000
ARTICLE I
STOCKHOLDERS
Section 1.01. Annual Meetings. The annual meeting of the stockholders of
the Corporation for the election of directors and for the transaction of such
other business as properly may come before such meeting shall be held at such
place, either within or without the State of Delaware, and at 10:00 a.m. local
time on the first Tuesday in July (or, if such day is a legal holiday, then on
the next succeeding business day), or at such other date and hour, as may be
fixed from time to time by resolution of the Board of Directors and set forth in
the notice or waiver of notice of the meeting. [Sections 211(a), (b).]1
Section 1.02. Special Meetings. Special meetings of the stockholders may be
called at any time by the President (or, in the event of his absence or
disability, by any Vice President), or by the Board of Directors. A special
meeting shall be called by the President (or, in the event of his absence or
disability, by any Vice President), or by the Secretary, immediately upon
receipt of a written request therefor by stockholders holding in the aggregate
not less than a majority of the outstanding shares of the Corporation at the
time entitled to vote at any meeting of the stockholders. If such officers or
the Board of Directors shall fail to call such meeting within 20 days after
receipt of such request, any stockholder executing such request may call such
meeting. Such special meetings of the stockholders shall be held at such places,
within or without the State of Delaware, as shall be specified in the respective
notices or waivers of notice thereof. [Section 211(d).]
Section 1.03. Notice of Meetings; Waiver. The Secretary or any Assistant
Secretary shall cause written notice of the place, date and hour of each meeting
of the stockholders, and, in the case of a special meeting, the purpose or
purposes for which such meeting is called, to be given personally or by mail,
not less than ten nor more than sixty
- --------
1. Citations are to the General Corporation Law of the State of Delaware as in
effect on April 15, 1999 (the "GCL"), and are inserted for reference only,
and do not constitute a part of the By-Laws.
<PAGE> 74
days prior to the meeting, to each stockholder of record entitled to vote at
such meeting. If such notice is mailed, it shall be deemed to have been given to
a stockholder when deposited in the United States mail, postage prepaid,
directed to the stockholder at his address as it appears on the record of
stockholders of the Corporation, or, if he shall have filed with the Secretary
of the Corporation a written request that notices to him be mailed to some other
address, then directed to him at such other address. Such further notice shall
be given as may be required by law.
No notice of any meeting of stockholders need be given to any stockholder
who submits a signed waiver of notice, whether before or after the meeting.
Neither the business to be transacted at, nor the purpose of, any regular or
special meeting of the stockholders need be specified in a written waiver of
notice. The attendance of any stockholder at a meeting of stockholders shall
constitute a waiver of notice of such meeting, except when the stockholder
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business on the ground that the meeting is
not lawfully called or convened. [Sections 222, 229.]
Section 1.04. Quorum. Except as otherwise required by law or by the
Certificate of Incorporation, the presence in person or by proxy of the holders
of record of a majority of the shares entitled to vote at a meeting of
stockholders shall constitute a quorum for the transaction of business at such
meeting. [Section 216.]
Section 1.05. Voting. If, pursuant to Section 5.05 of these By-Laws, a
record date has been fixed, every holder of record of shares entitled to vote at
a meeting of stockholders shall be entitled to one vote for each share
outstanding in his name on the books of the Corporation at the close of business
on such record date. If no record date has been fixed, then every holder of
record of shares entitled to vote at a meeting of stockholders shall be entitled
to one vote for each share of stock standing in his name on the books of the
Corporation at the close of business on the day next preceding the day on which
notice of the meeting is given, or, if notice is waived, at the close of
business on the day next preceding the day on which the meeting is held. Except
as otherwise required by law or by the Certificate of Incorporation, the vote of
a majority of the shares represented in person or by proxy at any meeting at
which a quorum is present shall be sufficient for the transaction of any
business at such meeting. [Sections 212(a), 216.]
Section 1.06. Voting by Ballot. No vote of the stockholders need be taken
by written ballot or conducted by Inspectors of Elections unless otherwise
required by law. Any vote which need not be taken by ballot may be conducted in
any manner approved by the meeting.
2
<PAGE> 75
Section 1.07. Adjournment. If a quorum is not present at any meeting of the
stockholders, the stockholders present in person or by proxy shall have the
power to adjourn any such meeting from time to time until a quorum is present.
Notice of any adjourned meeting of the stockholders of the Corporation need not
be given if the place, date and hour thereof are announced at the meeting at
which the adjournment is taken, provided, however, that if the adjournment is
for more than thirty days, or if after the adjournment a new record date for the
adjourned meeting is fixed pursuant to Section 5.05 of these By-Laws, a notice
of the adjourned meeting, conforming to the requirements of Section 1.03 hereof,
shall be given to each stockholder of record entitled to vote at such meeting.
At any adjourned meeting at which a quorum is present, any business may be
transacted that might have been transacted on the original date of the meeting.
[Section 222(c).]
Section 1.08. Proxies. Any stockholder entitled to vote at any meeting of
the stockholders or to express consent to or dissent from corporate action
without a meeting may authorize another person or persons to vote at any such
meeting and express such consent or dissent for him by proxy. A stockholder may
authorize a valid proxy by executing a written instrument signed by such
stockholder, or by causing his or her signature to be affixed to such writing by
any reasonable means including, but not limited to, by facsimile signature, or
by transmitting or authorizing the transmission of a telegram, cablegram or
other means of electronic transmission to the person designated as the holder of
the proxy, a proxy solicitation firm or a like authorized agent. No such proxy
shall be voted or acted upon after the expiration of three years from the date
of such proxy, unless such proxy provides for a longer period. Every proxy shall
be revocable at the pleasure of the stockholder executing it, except in those
cases where applicable law provides that a proxy shall be irrevocable. A
stockholder may revoke any proxy which is not irrevocable by attending the
meeting and voting in person or by filing an instrument in writing revoking the
proxy or by filing another duly executed proxy bearing a later date with the
Secretary. Proxies by telegram, cablegram or other electronic transmission must
either set forth or be submitted with information from which it can be
determined that the telegram, cablegram or other electronic transmission was
authorized by the stockholder. Any copy, facsimile telecommunication or other
reliable reproduction of a writing or transmission created pursuant to this
section may be substituted or used in lieu of the original writing or
transmission for any and all purposes for which the original writing or
transmission could be used, provided that such copy, facsimile telecommunication
or other reproduction shall be a complete reproduction of the entire original
writing or transmission. [Sections 212(b), (c).]
Section 1.09. Organization; Procedure. At every meeting of stockholders the
presiding officer shall be the President or, in the event of his absence or
disability, a presiding officer chosen by a majority of the stockholders present
in person or by proxy.
3
<PAGE> 76
The Secretary, or in the event of his absence or disability, the Assistant
Secretary, if any, or if there be no Assistant Secretary, in the absence of the
Secretary, an appointee of the presiding officer, shall act as Secretary of the
meeting. The order of business and all other matters of procedure at every
meeting of stockholders may be determined by such presiding officer.
Section 1.10. Consent of Stockholders in Lieu of Meeting. To the fullest
extent permitted by law, whenever the vote of stockholders at a meeting thereof
is required or permitted to be taken for or in connection with any corporate
action, such action may be taken without a meeting, without prior notice and
without a vote of stockholders, if a consent or consents in writing, setting
forth the action so taken, shall be signed by the holders of outstanding stock
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted and shall be delivered to the Corporation by
delivery to its registered office in the State of Delaware, its principal place
of business, or an officer or agent of the Corporation having custody of the
book in which proceedings of meetings of stockholders are recorded. Delivery
made to the Corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested.
Every written consent shall bear the date of signature of each stockholder
who signs the consent and no written consent shall be effective to take the
corporate action referred to therein unless, within sixty days of the earliest
dated consent delivered in the manner required by law to the Corporation,
written consents signed by a sufficient number of holders or members to take
action are delivered to the Corporation by delivery to its registered office in
the State of Delaware, its principal place of business, or an officer or agent
of the Corporation having custody of the book in which proceedings of meetings
of stockholders are recorded. Delivery made to the Corporation's registered
office shall be by hand or by certified or registered mail, return receipt
requested. [Section 228.]
ARTICLE II
BOARD OF DIRECTORS
Section 2.01. General Powers. Except as may otherwise be provided by law,
by the Certificate of Incorporation or by these By-Laws, the property, affairs
and business of the Corporation shall be managed by or under the direction of
the Board of Directors and the Board of Directors may exercise all the powers of
the Corporation. [Section 141(a).]
4
<PAGE> 77
Section 2.02. Number and Term of Office. The number of Directors
constituting the entire Board of Directors shall be seven (7), which number may
be modified from time to time by resolution of the Board of Directors, but in no
event shall the number of Directors be less than one. Each Director (whenever
elected) shall hold office until his successor has been duly elected and
qualified, or until his earlier death, resignation or removal. [Section 141(b).]
Section 2.03. Election of Directors. Except as otherwise provided in
Sections 2.12 and 2.13 of these By-Laws, the Directors shall be elected at each
annual meeting of the stockholders. If the annual meeting for the election of
Directors is not held on the date designated therefor, the Directors shall cause
the meeting to be held as soon thereafter as convenient. At each meeting of the
stockholders for the election of Directors, provided a quorum is present, the
Directors shall be elected by a plurality of the votes validly cast in such
election. [Sections 211(b), (c), 216.]
Section 2.04. Annual and Regular Meetings. The annual meeting of the Board
of Directors for the purpose of electing officers and for the transaction of
such other business as may come before the meeting shall be held as soon as
possible following adjournment of the annual meeting of the stockholders at the
place of such annual meeting of the stockholders. Notice of such annual meeting
of the Board of Directors need not be given. The Board of Directors from time to
time may by resolution provide for the holding of regular meetings and fix the
place (which may be within or without the State of Delaware) and the date and
hour of such meetings. Notice of regular meetings need not be given, provided,
however, that if the Board of Directors shall fix or change the time or place of
any regular meeting, notice of such action shall be mailed promptly, or sent by
telegram, radio or cable, to each Director who shall not have been present at
the meeting at which such action was taken, addressed to him at his usual place
of business, or shall be delivered to him personally. Notice of such action need
not be given to any Director who attends the first regular meeting after such
action is taken without protesting the lack of notice to him, prior to or at the
commencement of such meeting, or to any Director who submits a signed waiver of
notice, whether before or after such meeting. [Section 141(g).]
Section 2.05. Special Meetings; Notice. Special meetings of the Board of
Directors shall be held whenever called by the President or, in the event of his
absence or disability, by any Vice President, at such place (within or without
the State of Delaware), date and hour as may be specified in the respective
notices or waivers of notice of such meetings. Special meetings of the Board of
Directors may be called on 24 hours' notice, if notice is given to each Director
personally or by telephone or telegram, or on five days' notice, if notice is
mailed to each Director, addressed to him at his usual place of business. Notice
of any special meeting need not be given to any Director who attends such
meeting without protesting the lack of notice to him, prior to or at the
commencement of such
5
<PAGE> 78
meeting, or to any Director who submits a signed waiver of notice, whether
before or after such meeting, and any business may be transacted thereat.
[Sections 141(g), 229.]
Section 2.06. Quorum; Voting. At all meetings of the Board of Directors,
the presence of a majority of the total authorized number of Directors shall
constitute a quorum for the transaction of business. Except as otherwise
required by law, the vote of a majority of the Directors present at any meeting
at which a quorum is present shall be the act of the Board of Directors.
[Section 141(b).]
Section 2.07. Adjournment. A majority of the Directors present, whether or
not a quorum is present, may adjourn any meeting of the Board of Directors to
another time or place. No notice need be given of any adjourned meeting unless
the time and place of the adjourned meeting are not announced at the time of
adjournment, in which case notice conforming to the requirements of Section 2.05
shall be given to each Director.
Section 2.08. Action Without a Meeting. Any action required or permitted to
be taken at any meeting of the Board of Directors may be taken without a meeting
if all members of the Board of Directors consent thereto in writing, and such
writing or writings are filed with the minutes of proceedings of the Board of
Directors. [Section 141(f).]
Section 2.09. Regulations; Manner of Acting. To the extent consistent with
applicable law, the Certificate of Incorporation and these By-Laws, the Board of
Directors may adopt such rules and regulations for the conduct of meetings of
the Board of Directors and for the management of the property, affairs and
business of the Corporation as the Board of Directors may deem appropriate. The
Directors shall act only as a Board, and the individual Directors shall have no
power as such.
Section 2.10. Action by Telephonic Communications. Members of the Board of
Directors may participate in a meeting of the Board of Directors by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting pursuant to this provision shall constitute presence in person at such
meeting. [Section 141(i).]
Section 2.11. Resignations. Any Director may resign at any time by
delivering a written notice of resignation, signed by such Director, to the
President or the Secretary. Unless otherwise specified therein, such resignation
shall take effect upon delivery. [Section 141(b).]
6
<PAGE> 79
Section 2.12. Removal of Directors. Any Director may be removed at any
time, either for or without cause, upon the affirmative vote of the holders of a
majority of the outstanding shares of stock of the Corporation entitled to vote
for the election of such Director, cast at a special meeting of stockholders
called for the purpose. Any vacancy in the Board of Directors caused by any such
removal may be filled at such meeting by the stockholders entitled to vote for
the election of the Director so removed. If such stockholders do not fill such
vacancy at such meeting (or in the written instrument effecting such removal, if
such removal was effected by consent without a meeting), such vacancy may be
filled in the manner provided in Section 2.13 of these By-Laws. [Section
141(b).]
Section 2.13. Vacancies and Newly Created Directorships. If any vacancies
shall occur in the Board of Directors, by reason of death, resignation, removal
or otherwise, or if the authorized number of Directors shall be increased, the
Directors then in office shall continue to act, and such vacancies and newly
created directorships may be filled by a majority of the Directors then in
office, although less than a quorum. A Director elected to fill a vacancy or a
newly created directorship shall hold office until his successor has been
elected and qualified or until his earlier death, resignation or removal. Any
such vacancy or newly created directorship may also be filled at any time by
vote of the stockholders. [Section 223.]
Section 2.14. Compensation. The amount, if any, which each Director shall
be entitled to receive as compensation for his services as such shall be fixed
from time to time by resolution of the Board of Directors. [Section 141(h).]
Section 2.15. Reliance on Accounts and Reports, etc. A Director, or a
member of any Committee designated by the Board of Directors shall, in the
performance of his duties, be fully protected in relying in good faith upon the
records of the Corporation and upon information, opinions, reports or statements
presented to the Corporation by any of the Corporation's officers or employees,
or Committees designated by the Board of Directors, or by any other person as to
the matters the member reasonably believes are within such other person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Corporation. [Section 141(e).]
ARTICLE III
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
Section 3.01. How Constituted. The Board of Directors may designate one or
more Committees, including an Executive Committee, each such Committee to
7
<PAGE> 80
consist of such number of Directors as from time to time may be fixed by the
Board of Directors. The Board of Directors may designate one or more Directors
as alternate members of any such Committee, who may replace any absent or
disqualified member or members at any meeting of such Committee. Thereafter,
members (and alternate members, if any) of each such Committee may be designated
at the annual meeting of the Board of Directors. Any such Committee may be
abolished or re-designated from time to time by the Board of Directors. Each
member (and each alternate member) of any such Committee (whether designated at
an annual meeting of the Board of Directors or to fill a vacancy or otherwise)
shall hold office until his successor shall have been designated or until he
shall cease to be a Director, or until his earlier death, resignation or
removal. [Section 141(c).]
Section 3.02. Powers. During the intervals between the meetings of the
Board of Directors, the Executive Committee, except as otherwise provided in
this section, shall have and may exercise all the powers and authority of the
Board of Directors in the management of the property, affairs and business of
the Corporation. Each such other Committee, except as otherwise provided in this
section, shall have and may exercise such powers of the Board of Directors as
may be provided by resolution or resolutions of the Board of Directors. Neither
the Executive Committee nor any such other Committee shall have the power or
authority:
(a) to approve or adopt, or to recommend to the stockholders, any
action or matter expressly required by the General Corporation Law of the
State of Delaware to be submitted to the stockholders for approval; or,
(b) to adopt, amend or repeal any by-law of the Corporation.
The Executive Committee shall have, and any such other Committee may be granted
by the Board of Directors, power to authorize the seal of the Corporation to be
affixed to any or all papers which may require it. [Section 141(c).]
Section 3.03. Proceedings. Each such Committee may fix its own rules of
procedure and may meet at such place (within or without the State of Delaware),
at such time and upon such notice, if any, as it shall determine from time to
time. Each such Committee shall keep minutes of its proceedings and shall report
such proceedings to the Board of Directors at the meeting of the Board of
Directors next following any such proceedings.
Section 3.04. Quorum and Manner of Acting. Except as may be otherwise
provided in the resolution creating such Committee, at all meetings of any
Committee the presence of members (or alternate members) constituting a majority
of the total authorized
8
<PAGE> 81
membership of such Committee shall constitute a quorum for the transaction of
business. The act of the majority of the members present at any meeting at which
a quorum is present shall be the act of such Committee. Any action required or
permitted to be taken at any meeting of any such Committee may be taken without
a meeting, if all members of such Committee shall consent to such action in
writing and such writing or writings are filed with the minutes of the
proceedings of the Committee. The members of any such Committee shall act only
as a Committee, and the individual members of such Committee shall have no power
as such. [Section 141(c).]
Section 3.05. Action by Telephonic Communications. Members of any Committee
designated by the Board of Directors may participate in a meeting of such
Committee by means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and participation in a meeting pursuant to this provision shall constitute
presence in person at such meeting. [Section 141(i).]
Section 3.06. Absent or Disqualified Members. In the absence or
disqualification of a member of any Committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or disqualified
member. [Section 141(c).]
Section 3.07. Resignations. Any member (and any alternate member) of any
Committee may resign at any time by delivering a written notice of resignation,
signed by such member, to the Chairman or the President. Unless otherwise
specified therein, such resignation shall take effect upon delivery.
Section 3.08. Removal. Any member (and any alternate member) of any
Committee may be removed at any time, either for or without cause, by resolution
adopted by a majority of the whole Board of Directors.
Section 3.09. Vacancies. If any vacancy shall occur in any Committee, by
reason of disqualification, death, resignation, removal or otherwise, the
remaining members (and any alternate members) shall continue to act, and any
such vacancy may be filled by the Board of Directors.
9
<PAGE> 82
ARTICLE IV
OFFICERS
Section 4.01. Number. The officers of the Corporation shall be chosen by
the Board of Directors and shall be a President, one or more Vice Presidents, a
Secretary and a Treasurer. The Board of Directors also may elect one or more
Assistant Secretaries and Assistant Treasurers in such numbers as the Board of
Directors may determine, and such other officers as the Board of Directors deems
desirable. Any number of offices may be held by the same person. No officer need
be a Director of the Corporation. [Section 142(a), (b).]
Section 4.02. Election. Unless otherwise determined by the Board of
Directors, the officers of the Corporation shall be elected by the Board of
Directors at the annual meeting of the Board of Directors, and shall be elected
to hold office until the next succeeding annual meeting of the Board of
Directors. In the event of the failure to elect officers at such annual meeting,
officers may be elected at any regular or special meeting of the Board of
Directors. Each officer shall hold office until his successor has been elected
and qualified, or until his earlier death, resignation or removal. [Section
142(b).]
Section 4.03. Salaries. The salaries of all officers and agents of the
Corporation shall be fixed by the Board of Directors.
Section 4.04. Removal and Resignation; Vacancies. Any officer may be
removed for or without cause at any time by the Board of Directors. Any officer
may resign at any time by delivering a written notice of resignation, signed by
such officer, to the Board of Directors or the President. Unless otherwise
specified therein, such resignation shall take effect upon delivery. Any vacancy
occurring in any office of the Corporation by death, resignation, removal or
otherwise, shall be filled by the Board of Directors. [Section 142(b), (e).]
Section 4.05. Authority and Duties of Officers. The officers of the
Corporation shall have such authority and shall exercise such powers and perform
such duties as may be specified in these By-Laws, except that in any event each
officer shall exercise such powers and perform such duties as may be required by
law. [Section 142(a).]
Section 4.06. The President. The President shall preside at all meetings of
the stockholders and directors at which he is present, shall be the chief
executive officer and the chief operating officer of the Corporation, shall have
general control and supervision of the policies and operations of the
Corporation and shall see that all orders
10
<PAGE> 83
and resolutions of the Board of Directors are carried into effect. He shall
manage and administer the Corporation's business and affairs and shall also
perform all duties and exercise all powers usually pertaining to the office of a
chief executive officer and a chief operating officer of a corporation. He shall
have the authority to sign, in the name and on behalf of the Corporation,
checks, orders, contracts, leases, notes, drafts and other documents and
instruments in connection with the business of the Corporation, and together
with the Secretary or an Assistant Secretary, conveyances of real estate and
other documents and instruments to which the seal of the Corporation is affixed.
He shall have the authority to cause the employment or appointment of such
employees and agents of the Corporation as the conduct of the business of the
Corporation may require, to fix their compensation, and to remove or suspend any
employee or agent elected or appointed by the President or the Board of
Directors. The President shall perform such other duties and have such other
powers as the Board of Directors or the Chairman may from time to time
prescribe.
Section 4.07. The Vice Presidents. Each Vice President shall perform such
duties and exercise such powers as may be assigned to him from time to time by
the President. In the absence of the President, the duties of the President
shall be performed and his powers may be exercised by such Vice President as
shall be designated by the President, or failing such designation, such duties
shall be performed and such powers may be exercised by each Vice President in
the order of their earliest election to that office; subject in any case to
review and superseding action by the President.
Section 4.08. The Secretary. The Secretary shall have the following powers
and duties:
(a) He shall keep or cause to be kept a record of all the proceedings
of the meetings of the stockholders and of the Board of Directors in books
provided for that purpose.
(b) He shall cause all notices to be duly given in accordance with the
provisions of these By-Laws and as required by law.
(c) Whenever any Committee shall be appointed pursuant to a resolution
of the Board of Directors, he shall furnish a copy of such resolution to
the members of such Committee.
(d) He shall be the custodian of the records and of the seal of the
Corporation and cause such seal (or a facsimile thereof) to be affixed to
all certificates representing shares of the Corporation prior to the
issuance thereof and to all instruments the execution of which on behalf of
the Corporation under its
11
<PAGE> 84
seal shall have been duly authorized in accordance with these By-Laws, and
when so affixed he may attest the same.
(e) He shall properly maintain and file all books, reports,
statements, certificates and all other documents and records required by
law, the Certificate of Incorporation or these By-Laws.
(f) He shall have charge of the stock books and ledgers of the
Corporation and shall cause the stock and transfer books to be kept in such
manner as to show at any time the number of shares of stock of the
Corporation of each class issued and outstanding, the names (alphabetically
arranged) and the addresses of the holders of record of such shares, the
number of shares held by each holder and the date as of which each became
such holder of record.
(g) He shall sign (unless the Treasurer, an Assistant Treasurer or
Assistant Secretary shall have signed) certificates representing shares of
the Corporation the issuance of which shall have been authorized by the
Board of Directors.
(h) He shall perform, in general, all duties incident to the office of
secretary and such other duties as may be specified in these By-Laws or as
may be assigned to him from time to time by the Board of Directors, or the
President.
Section 4.09. The Treasurer. The Treasurer shall be the chief
financial officer of the Corporation and shall have the following powers and
duties:
(a) He shall have charge and supervision over and be responsible for
the moneys, securities, receipts and disbursements of the Corporation, and
shall keep or cause to be kept full and accurate records of all receipts of
the Corporation.
(b) He shall cause the moneys and other valuable effects of the
Corporation to be deposited in the name and to the credit of the
Corporation in such banks or trust companies or with such bankers or other
depositaries as shall be selected in accordance with Section 8.05 of these
By-Laws.
(c) He shall cause the moneys of the Corporation to be disbursed by
checks or drafts (signed as provided in Section 8.06 of these By-Laws) upon
the authorized depositaries of the Corporation and cause to be taken and
preserved proper vouchers for all moneys disbursed.
(d) He shall render to the Board of Directors or the President,
whenever requested, a statement of the financial condition of the
Corporation and of all his
12
<PAGE> 85
transactions as Treasurer, and render a full financial report at the annual
meeting of the stockholders, if called upon to do so.
(e) He shall be empowered from time to time to require from all
officers or agents of the Corporation reports or statements giving such
information as he may desire with respect to any and all financial
transactions of the Corporation.
(f) He may sign (unless an Assistant Treasurer or the Secretary or an
Assistant Secretary shall have signed) certificates representing stock of
the Corporation the issuance of which shall have been authorized by the
Board of Directors.
(g) He shall perform, in general, all duties incident to the office of
treasurer and such other duties as may be specified in these By-Laws or as
may be assigned to him from time to time by the Board of Directors, or the
President.
Section 4.10. Additional Officers. The Board of Directors may appoint such
other officers and agents as it may deem appropriate, and such other officers
and agents shall hold their offices for such terms and shall exercise such
powers and perform such duties as may be determined from time to time by the
Board of Directors. The Board of Directors from time to time may delegate to any
officer or agent the power to appoint subordinate officers or agents and to
prescribe their respective rights, terms of office, authorities and duties. Any
such officer or agent may remove any such subordinate officer or agent appointed
by him, for or without cause. [Section 142(a), (b).]
Section 4.11. Security. The Board of Directors may require any officer,
agent or employee of the Corporation to provide security for the faithful
performance of his duties, in such amount and of such character as may be
determined from time to time by the Board of Directors. [Section 142(c).]
ARTICLE V
CAPITAL STOCK
Section 5.01. Certificates of Stock. The shares of the Corporation shall be
represented by certificates, provided that the Board of Directors may provide by
resolution or resolutions that some or all of any or all classes or series of
the stock of the Corporation shall be uncertificated shares. Any such resolution
shall not apply to shares represented by a certificate until each certificate is
surrendered to the Corporation. Notwithstanding the adoption of such a
resolution by the Board of Directors, every holder
13
<PAGE> 86
of stock in the Corporation represented by certificates and upon request every
holder of uncertificated shares shall be entitled to have a certificate signed
by, or in the name of the Corporation, by the President or a Vice President, and
by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant
Secretary, representing the number of shares registered in certificate form.
Such certificate shall be in such form as the Board of Directors may determine,
to the extent consistent with applicable law, the Certificate of Incorporation
and these By-Laws. [Section 158.]
Section 5.02. Signatures; Facsimile. All of such signatures on the
certificate may be a facsimile, engraved or printed, to the extent permitted by
law. In case any officer, transfer agent or registrar who has signed, or whose
facsimile signature has been placed upon a certificate shall have ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the Corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of issue. [Section 158.]
Section 5.03. Lost, Stolen or Destroyed Certificates. The Board of
Directors may direct that a new certificate be issued in place of any
certificate theretofore issued by the Corporation alleged to have been lost,
stolen or destroyed, upon delivery to the Board of Directors of an affidavit of
the owner or owners of such certificate, setting forth such allegation. The
Board of Directors may require the owner of such lost, stolen or destroyed
certificate, or his legal representative, to give the Corporation a bond
sufficient to indemnify it against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such certificate or the
issuance of any such new certificate. [Section 167.]
Section 5.04. Transfer of Stock. Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate for shares, duly endorsed or
accompanied by appropriate evidence of succession, assignment or authority to
transfer, the Corporation shall issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Within a reasonable time after the transfer of uncertificated stock, the
Corporation shall send to the registered owner thereof a written notice
containing the information required to be set forth or stated on certificates
pursuant to Sections 151, 156, 202(a) or 218(a) of the General Corporation Law
of the State of Delaware. Subject to the provisions of the Certificate of
Incorporation and these By-Laws, the Board of Directors may prescribe such
additional rules and regulations as it may deem appropriate relating to the
issue, transfer and registration of shares of the Corporation. [Section 151.]
Section 5.05. Record Date. In order to determine the stockholders entitled
to notice of or to vote at any meeting of stockholders or any adjournment
thereof,
14
<PAGE> 87
the Board of Directors may fix, in advance, a record date, which record date
shall not precede the date on which the resolution fixing the record date is
adopted by the Board of Directors, and which shall not be more than sixty nor
less than ten days before the date of such meeting. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting, provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
In order that the Corporation may determine the stockholders entitled to
consent to corporate action in writing without a meeting, the Board of Directors
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted by the Board of Directors, and
which date shall not be more than ten days after the date upon which the
resolution fixing the record date is adopted by the Board of Directors. If no
record date has been fixed by the Board of Directors, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the board of directors is required by
law, shall be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the Corporation by delivery
to its registered office in the State of Delaware, its principal place of
business, or an officer or agent of the Corporation having custody of the book
in which proceedings of meetings of stockholders are recorded. Delivery made to
the Corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been fixed by
the Board of Directors and prior action by the Board of Directors is required by
law, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting shall be at the close of business
on the day on which the Board of Directors adopts the resolution taking such
prior action.
In order that the Corporation may determine the stockholders entitled to
receive payment of any dividend or other distribution or allotment of any rights
of the stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than sixty days prior to such action. If
no record date is fixed, the record date for determining stockholders for any
such purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto. [Section 213.]
Section 5.06. Registered Stockholders. Prior to due surrender of a
certificate for registration of transfer, the Corporation may treat the
registered owner as the person exclusively entitled to receive dividends and
other distributions, to vote, to receive notice and otherwise to exercise all
the rights and powers of the owner of the
15
<PAGE> 88
shares represented by such certificate, and the Corporation shall not be bound
to recognize any equitable or legal claim to or interest in such shares on the
part of any other person, whether or not the Corporation shall have notice of
such claim or interests. Whenever any transfer of shares shall be made for
collateral security, and not absolutely, it shall be so ex pressed in the entry
of the transfer if, when the certificates are presented to the Corporation for
transfer or uncertificated shares are requested to be transferred, both the
transferor and transferee request the Corporation to do so. [Section 159.]
Section 5.07. Transfer Agent and Registrar. The Board of Directors may
appoint one or more transfer agents and one or more registrars, and may require
all certificates representing shares to bear the signature of any such transfer
agents or registrars.
ARTICLE VI
INDEMNIFICATION
Section 6.01. Nature of Indemnity. The Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
was or has agreed to become a director or officer of the Corporation, or is or
was serving or has agreed to serve at the request of the Corporation as a
director or officer, of another corporation, partnership, joint venture, trust
or other enterprise, or by reason of any action alleged to have been taken or
omitted in such capacity, and may indemnify any person who was or is a party or
is threatened to be made a party to such an action, suit or proceeding by reason
of the fact that he is or was or has agreed to become an employee or agent of
the Corporation, or is or was serving or has agreed to serve at the request of
the Corporation as an employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him or on his behalf in connection with such action, suit or
proceeding and any appeal therefrom, if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding had no
reasonable cause to believe his conduct was unlawful; except that in the case of
an action or suit by or in the right of the Corporation to procure a judgment in
its favor (1) such indemnification shall be limited to expenses (including
attorneys' fees) actually and reasonably incurred by such person in the defense
or settlement of such action or suit, and (2) no indemnification shall be made
in respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the Corporation unless and only to the extent that the
Delaware Court of
16
<PAGE> 89
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Delaware Court of Chancery or such other
court shall deem proper.
The termination of any action, suit or proceeding by judgment, order
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was unlawful.
Section 6.02. Successful Defense. To the extent that a director, officer,
employee or agent of the Corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in Section
6.01 hereof or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
Section 6.03. Determination That Indemnification Is Proper. Any
indemnification of a director or officer of the Corporation under Section 6.01
hereof (unless ordered by a court) shall be made by the Corporation unless a
determination is made that indemnification of the director or officer is not
proper in the circumstances because he has not met the applicable standard of
conduct set forth in Section 6.01 hereof. Any indemnification of an employee or
agent of the Corporation under Section 6.01 hereof (unless ordered by a court)
may be made by the Corporation upon a determination that indemnification of the
employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in Section 6.01 hereof. Any such
determination shall be made (1) by a majority vote of the directors who are not
parties to such action, suit or proceeding, or (2) by a committee of such
directors designated by majority vote of such directors, even though less than a
quorum, or (3) if there are no such directors, or if such directors so direct,
by independent legal counsel in a written opinion, or (4) by the stockholders.
Section 6.04. Advance Payment of Expenses. Expenses (including attorneys'
fees) incurred by a director or officer in defending any civil, criminal,
administrative or investigative action, suit or proceeding shall be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Corporation as authorized in this Article.
Such expenses (including attorneys' fees) incurred by other employees and agents
may be so paid upon such terms and conditions, if any, as the Board
17
<PAGE> 90
of Directors deems appropriate. The Board of Directors may authorize the
Corporation's counsel to represent such director, officer, employee or agent in
any action, suit or proceeding, whether or not the Corporation is a party to
such action, suit or proceeding.
Section 6.05. Procedure for Indemnification of Directors and Officers. Any
indemnification of a director or officer of the Corporation under Sections 6.01
and 6.02, or advance of costs, charges and expenses to a director or officer
under Section 6.04 of this Article, shall be made promptly, and in any event
within 30 days, upon the written request of the director or officer. If a
determination by the Corporation that the director or officer is entitled to
indemnification pursuant to this Article is required, and the Corporation fails
to respond within sixty days to a written request for indemnity, the Corporation
shall be deemed to have approved such request. If the Corporation denies a
written request for indemnity or advancement of expenses, in whole or in part,
or if payment in full pursuant to such request is not made within 30 days, the
right to indemnification or advances as granted by this Article shall be
enforceable by the director or officer in any court of competent jurisdiction.
Such person's costs and expenses incurred in connection with successfully
establishing his right to indemnification, in whole or in part, in any such
action shall also be indemnified by the Corporation. It shall be a defense to
any such action (other than an action brought to enforce a claim for the advance
of costs, charges and expenses under Section 6.04 of this Article where the
required undertaking, if any, has been received by the Corporation) that the
claimant has not met the standard of conduct set forth in Section 6.01 of this
Article, but the burden of proving such defense shall be on the Corporation.
Neither the failure of the Corporation (including its Board of Directors, its
independent legal counsel, and its stockholders) to have made a determination
prior to the commencement of such action that indemnification of the claimant is
proper in the circumstances because he has met the applicable standard of
conduct set forth in Section 6.01 of this Article, nor the fact that there has
been an actual determination by the Corporation (including its Board of
Directors, its independent legal counsel, and its stockholders) that the
claimant has not met such applicable standard of conduct, shall be a defense to
the action or create a presumption that the claimant has not met the applicable
standard of conduct.
Section 6.06. Survival; Preservation of Other Rights. The foregoing
indemnification provisions shall be deemed to be a contract between the
Corporation and each director, officer, employee and agent who serves in any
such capacity at any time while these provisions as well as the relevant
provisions of the Delaware Corporation Law are in effect and any repeal or
modification thereof shall not affect any right or obligation then existing with
respect to any state of facts then or previously existing or any action, suit or
proceeding previously or thereafter brought or threatened based in whole or in
part upon any such state of facts. Such a "contract right" may not be modified
retroactively without the consent of such director, officer, employee or agent.
18
<PAGE> 91
The indemnification provided by this Article VI shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
Section 6.07. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was or has agreed to become a
director or officer of the Corporation, or is or was serving at the request of
the Corporation as a director or officer of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him and incurred by him or on his behalf in any such capacity, or arising out of
his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of this Article,
provided that such insurance is available on acceptable terms, which
determination shall be made by a vote of a majority of the entire Board of
Directors.
Section 6.08. Severability. If this Article or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each director or officer and may
indemnify each employee or agent of the Corporation as to costs, charges and
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative, including an action by or in the
right of the Corporation, to the fullest extent permitted by any applicable
portion of this Article that shall not have been invalidated and to the fullest
extent permitted by applicable law.
ARTICLE VII
OFFICES
Section 7.01. Registered Office. The registered office of the Corporation
in the State of Delaware shall be located at Corporation Trust Center, 1209
Orange Street in the City of Wilmington, County of New Castle.
Section 7.02. Other Offices. The Corporation may maintain offices or places
of business at such other locations within or without the State of Delaware as
the Board of Directors may from time to time determine or as the business of the
Corporation may require.
19
<PAGE> 92
ARTICLE VIII
GENERAL PROVISIONS
Section 8.01. Dividends. Subject to any applicable provisions of law and
the Certificate of Incorporation, dividends upon the shares of the Corporation
may be declared by the Board of Directors at any regular or special meeting of
the Board of Directors and any such dividend may be paid in cash, property, or
shares of the Corporation's Capital Stock.
A member of the Board of Directors, or a member of any Committee designated
by the Board of Directors shall be fully protected in relying in good faith upon
the records of the Corporation and upon such information, opinions, reports or
statements presented to the Corporation by any of its officers or employees, or
Committees of the Board of Directors, or by any other person as to matters the
Director reasonably believes are within such other person's professional or
expert competence and who has been selected with reasonable care by or on behalf
of the Corporation, as to the value and amount of the assets, liabilities and/or
net profits of the Corporation, or any other facts pertinent to the existence
and amount of surplus or other funds from which dividends might properly be
declared and paid. [Sections 172, 173.]
Section 8.02. Reserves. There may be set aside out of any funds of the
Corporation available for dividends such sum or sums as the Board of Directors
from time to time, in its absolute discretion, thinks proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation or for such other purpose as the
Board of Directors shall think conducive to the interest of the Corporation, and
the Board of Directors may similarly modify or abolish any such reserve.
[Section 171.]
Section 8.03. Execution of Instruments. The President, any Vice President,
the Secretary or the Treasurer may enter into any contract or execute and
deliver any instrument in the name and on behalf of the Corporation. The Board
of Directors or the President may authorize any other officer or agent to enter
into any contract or execute and deliver any instrument in the name and on
behalf of the Corporation. Any such authorization may be general or limited to
specific contracts or instruments.
Section 8.04. Corporate Indebtedness. No loan shall be contracted on behalf
of the Corporation, and no evidence of indebtedness shall be issued in its name,
unless authorized by the Board of Directors or the President. Such authorization
may be general or confined to specific instances. Loans so authorized may be
effected at any time
20
<PAGE> 93
for the Corporation from any bank, trust company or other institution, or from
any firm, corporation or individual. All bonds, debentures, notes and other
obligations or evidences of indebtedness of the Corporation issued for such
loans shall be made, executed and delivered as the Board of Directors or the
President shall authorize. When so authorized by the Board of Directors or the
President, any part of or all the properties, including contract rights, assets,
business or good will of the Corporation, whether then owned or thereafter
acquired, may be mortgaged, pledged, hypothecated or conveyed or assigned in
trust as security for the payment of such bonds, debentures, notes and other
obligations or evidences of indebtedness of the Corporation, and of the interest
thereon, by instruments executed and delivered in the name of the Corporation.
Section 8.05. Deposits. Any funds of the Corporation may be deposited from
time to time in such banks, trust companies or other depositaries as may be
determined by the Board of Directors or the President, or by such officers or
agents as may be authorized by the Board of Directors or the President to make
such determination.
Section 8.06. Checks. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such agent or agents
of the Corporation, and in such manner, as the Board of Directors or the
President from time to time may determine.
Section 8.07. Sale, Transfer, etc. of Securities. To the extent authorized
by the Board of Directors or by the President, any Vice President, the Secretary
or the Treasurer or any other officers designated by the Board of Directors or
the President may sell, transfer, endorse, and assign any shares of stock, bonds
or other securities owned by or held in the name of the Corporation, and may
make, execute and deliver in the name of the Corporation, under its corporate
seal, any instruments that may be appropriate to effect any such sale, transfer,
endorsement or assignment.
Section 8.08. Voting as Stockholder. Unless otherwise determined by
resolution of the Board of Directors, the President or any Vice President shall
have full power and authority on behalf of the Corporation to attend any meeting
of stockholders of any corporation in which the Corporation may hold stock, and
to act, vote (or execute proxies to vote) and exercise in person or by proxy all
other rights, powers and privileges incident to the ownership of such stock.
Such officers acting on behalf of the Corporation shall have full power and
authority to execute any instrument expressing consent to or dissent from any
action of any such corporation without a meeting. The Board of Directors may by
resolution from time to time confer such power and authority upon any other
person or persons.
21
<PAGE> 94
Section 8.09. Fiscal Year. The fiscal year of the Corporation shall
commence on the first day of January of each year (except for the Corporation's
first fiscal year which shall commence on the date of incorporation) and shall
terminate in each case on the last day of December.
Section 8.10. Seal. The seal of the Corporation shall be circular in form
and shall contain the name of the Corporation, the year of its incorporation and
the words "Corporate Seal" and "Delaware". The form of such seal shall be
subject to alteration by the Board of Directors. The seal may be used by causing
it or a facsimile thereof to be impressed, affixed or reproduced, or may be used
in any other lawful manner.
Section 8.11. Books and Records; Inspection. Except to the extent otherwise
required by law, the books and records of the Corporation shall be kept at such
place or places within or without the State of Delaware as may be determined
from time to time by the Board of Directors.
22
<PAGE> 95
ARTICLE IX
AMENDMENT OF BY-LAWS
Section 9.01. Amendment. These By-Laws may be amended, altered or repealed
(a) by resolution adopted by a majority of the Board of Directors at
any special or regular meeting of the Board if, in the case of such special
meeting only, notice of such amendment, alteration or repeal is contained
in the notice or waiver of notice of such meeting; or
(b) at any regular or special meeting of the stockholders if, in the
case of such special meeting only, notice of such amendment, alteration or
repeal is contained in the notice or waiver of notice of such meeting.
[Section 109(a).]
ARTICLE X
CONSTRUCTION
Section 10.01. Construction. In the event of any conflict between the
provisions of these By-Laws as in effect from time to time and the provisions of
the certificate of incorporation of the Corporation as in effect from time to
time, the provisions of such certificate of incorporation shall be controlling.
23
<PAGE> 96
Exhibit C
================================================================================
SARATOGA BEVERAGE GROUP, INC.
STOCKHOLDERS AGREEMENT
Dated as of January 5, 2000
================================================================================
<PAGE> 97
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE I
GOVERNANCE AND MANAGEMENT OF THE COMPANY
<S> <C> <C>
Section 1.1. Board of Directors.................................................................1
Section 1.2. Governance.........................................................................2
Section 1.3. Indemnification of Directors and Officers..........................................3
ARTICLE II
RESTRICTIONS ON TRANSFER
Section 2.1. Restrictions on Transfer...........................................................3
Section 2.2. Transfers After Second Anniversary of Closing Public Offering, Change
of Control or Exit Event...........................................................4
Section 2.3. Tag-Along Rights...................................................................4
Section 2.4. Take-Along Rights..................................................................5
Section 2.5. Transfer of Covered Securities to Affiliate of NCP-SBG.............................7
Section 2.6. Hold Back Agreements...............................................................7
ARTICLE III
OTHER AGREEMENTS
Section 3.1. Right of First Refusal.............................................................7
Section 3.2. Issuance of Additional Shares of Equity Securities.................................8
Section 3.3. Future Acquisitions................................................................9
ARTICLE IV
DEFINITIONS
Section 4.1. Definitions; Construction..........................................................9
ARTICLE V
MISCELLANEOUS
Section 5.1. Notices...........................................................................12
Section 5.2. Remedies..........................................................................13
</TABLE>
i
<PAGE> 98
<TABLE>
<S> <C> <C>
Section 5.3. Governing Law, etc................................................................14
Section 5.4. Binding Effect....................................................................15
Section 5.5. Assignment........................................................................15
Section 5.6. No Third Party Beneficiaries......................................................15
Section 5.7. Amendment; Waivers, etc...........................................................15
Section 5.8. Legend on Stock Certificates......................................................16
Section 5.9. Entire Agreement..................................................................17
Section 5.10. Severability......................................................................17
Section 5.11. Headings; Counterparts............................................................17
Section 5.12. Subsequent Stockholders...........................................................17
Section 5.13. Reports...........................................................................18
Section 5.14. Certain Agreements................................................................18
Section 5.15. Effectiveness.....................................................................18
</TABLE>
ii
<PAGE> 99
Stockholders Agreement
Schedule A
Reference is made to the Stockholders Agreement, dated January __, 2000,
between Saratoga Beverage Group, Inc., NCP-SBG, L.P., and the other parties
thereto (the "Stockholders Agreement"). The undersigned agrees, by execution
hereof, to become a party to, and to be subject to the rights and obligations
under, the Stockholders Agreement.
------------------------
Name:
Title:
Address:
Date:
SARATOGA BEVERAGE GROUP, INC.
By:
---------------------------
Name:
Title:
<PAGE> 100
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT (this "Agreement"), dated as of January 5,
2000, among Saratoga Beverage Group, Inc., a Delaware corporation (the
"Company"), NCP-SBG, L.P., a Delaware limited partnership ("NCP-SBG"), and the
Persons listed on the signature pages hereto, and each other person who is, or
becomes, a party to this Agreement pursuant to Section 5.12 hereof
(collectively, with NCP-SBG and the Persons listed on the signature pages
hereto, the "Stockholders"). Capitalized terms used herein without definition
shall have the meanings indicated in Article IV.
WHEREAS, upon the terms and subject to the conditions of the
Stock Purchase Agreement and Agreement and Plan of Merger, dated as of the date
hereof (the "Recapitalization Agreement"), among the Company, NCP-SBG and
NCP-SBG Recapitalization Corp., NCP-SBG will acquire shares (the "Purchased
Shares") of common stock, par value $0.01 per share (the "Common Stock"), of the
Company;
WHEREAS, the parties hereto wish to set forth certain rights and
obligations that shall attach to the ownership of Common Stock held by the
Stockholders; and
WHEREAS, it is a condition to the consummation of the
transactions contemplated by the Recapitalization Agreement that the parties
hereto enter into this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
GOVERNANCE AND MANAGEMENT OF THE COMPANY
Section 1.1. Board of Directors. (a) Composition. Subject to the provisions
of this Agreement, the Board of Directors of the Company (the "Board") will
consist initially of seven members: (i) four members nominated by NCP-SBG, and
(ii) three members nominated by Robin Prever. Subject to the provisions of this
Agreement, each Stockholder entitled to vote shall vote their shares of Common
Stock so as to effect the provisions of this Section 1.1(a).
(b) Nominees. NCP-SBG shall nominate all persons for election to the Board,
except that, for so long as she is the Chief Executive Officer of the Company,
<PAGE> 101
(i) Robin Prever shall be entitled to nominate three directors, provided that if
Robin Prever is no longer the Chief Executive Officer of the Company, then so
long as the Rollover Stockholders collectively own at least 5% of the
outstanding Common Stock of the Company, such Rollover Stockholders collectively
shall be entitled to nominate one director. Each Stockholder entitled to vote
shall vote their shares of Common Stock so as to elect such nominees to the
Board.
(c) Removal and Replacement of Nominees. Any director nominated by a party
hereto may be removed at any time, with or without cause, by such party, and
each Stockholder entitled to vote thereon shall vote their shares of Common
Stock as may be required to effect such removal, including voting its shares for
such removal. In addition, at such time as Robin Prever is no longer Chief
Executive Officer of the Company, the Stockholders shall vote their shares of
Common Stock to remove at least two directors nominated by Robin Prever if such
directors shall not have resigned. At any time a vacancy shall be created on the
Board as a result of the death, disability, retirement, resignation or removal
of a director nominated by a party hereto, with or without cause, then such
party shall have the right to nominate a replacement for any director nominated
by it in accordance with Sections 1.1(b), and each Stockholder entitled to vote
shall vote their shares of Common Stock so as to elect such replacement.
(d) Fees and Expenses. The Company will cause each non-employee director of
the Board to be reimbursed for all reasonable out-of-pocket costs and expenses
incurred by him or her in connection with serving as a director. No director
nominated by NCP-SBG who is an officer or employee of North Castle Partners II,
L.L.C. ("NCP") or any Affiliate thereof (other than any portfolio company
controlled by NCP or controlled by any other private investment fund under
common control with NCP) shall be entitled to any fee with respect to his or her
service as a director of the Board at any time at which NCP is providing
consulting services to the Company and its subsidiaries pursuant to the
Consulting Agreement, dated as of the date hereof by and between the Company and
NCP.
(e) Chairperson. The Chairperson of the Board shall be designated by
NCP-SBG from among the directors of the Company.
Section 1.2. Governance. (a) Charter and Bylaws. The provisions of the
Company's Certificate of Incorporation and Bylaws will be consistent with the
terms of this Agreement.
(b) Board Approval. All actions requiring the approval of the Board shall
be approved (A) at a meeting of the Board, by a majority of the total number of
directors
2
<PAGE> 102
then fixed as constituting the whole board, or (B) without a meeting by the
unanimous written consent of all the members of the Board, in each case except
as required by law.
Section 1.3. Indemnification of Directors and Officers. The Bylaws shall
provide for indemnification of the directors and officers of the Company to the
greatest extent permitted by applicable law.
ARTICLE II
RESTRICTIONS ON TRANSFER
Section 2.1. Restrictions on Transfer. (a) Until the first to occur of
(w) a Public Offering, (x) a Change of Control, (y) the second anniversary of
the Closing under the Recapitalization Agreement (the "Closing"), and (z) an
Exit Event, no Stockholder other than NCP-SBG and its Affiliates may, without
the consent of NCP-SBG (which consent may not be unreasonably withheld), sell,
transfer, pledge, encumber or otherwise dispose of any Covered Security or any
interest therein to any Person except as follows:
(i) to any Family Member of such Stockholder upon the death of such
Stockholder, provided that such Family Member delivers to the Company a
certificate of the transferee, to the effect that the transferee is a
Family Member of the transferor;
(ii) to any Family Member other than upon the death of such
Stockholder, provided that such Family Member delivers to the Company a
certificate of the transferee, to the effect that the transferee is a
Family Member of the transferor;
(iii) to the Company or NCP-SBG or any of its Affiliates or designees;
(iv) pursuant to Sections 2.3 and 2.4; or
(v) in connection with a transaction that results in a Change of
Control;
provided that, in the case of a transfer with NCP-SBG's consent or
pursuant to clauses (i) or (ii) above, (A) the transferor delivers to the
Company an opinion of counsel, which opinion and counsel shall be
reasonably satisfactory to the Company, to the effect that the transfer is
not a Prohibited Transfer, and (B) the transferee becomes a party to this
Agreement in the manner provided in Section 5.12.
(b) Each Stockholder shall give the Company and the other Stockholders
prompt notice of any actual transfer of any Covered Security. Any sale,
transfer, pledge,
3
<PAGE> 103
encumbrance or other disposition of any Covered Security other than as permitted
by this Agreement shall be void ab initio and of no effect.
(c) Notwithstanding anything contained herein to the contrary, each
Rollover Stockholder may, without the consent of NCP-SBG, sell or transfer any
Covered Security to another Rollover Stockholder, subject to compliance with
applicable laws and contractual agreements and delivery to the Company of an
opinion of counsel, which opinion and counsel shall be reasonably satisfactory
to the Company, to the effect that the transfer is not a Prohibited Transfer.
(d) Notwithstanding the provisions of Section 2.1(a), Mr. Cox may
pledge or encumber his Covered Securities or grant a security interest therein
without the consent of NCP-SGB, provided, that any subsequent sale, transfer or
other disposition pursuant to such pledge, encumbrance or security interest
shall require the consent of NCP-SBG.
Section 2.2. Transfers After Second Anniversary of Closing Public
Offering, Change of Control or Exit Event. (a) Following the first to occur of
the second anniversary of the Closing, an initial Public Offering, a Change of
Control and an Exit Event, and subject to Article III, any Stockholder may
transfer Covered Securities to any Person, subject to compliance with applicable
laws and contractual agreements.
(b) Opinion of Counsel. An additional condition to any transfer
pursuant to Sections 2.2(a) shall be that, except with respect to a transfer of
the type described in Section 2.1(a)(iii) or a transfer made pursuant to a
registered public offering, the transferee must deliver to the Company an
opinion of counsel, which opinion and counsel shall be reasonably satisfactory
to the Company, to the effect that such transfer is not required to be
registered under the Securities Act.
Section 2.3. Tag-Along Rights. If prior to a Public Offering any of
NCP-SBG or its Affiliates desire to transfer in excess of 10% of the maximum
amount of Common Stock ever owned in the aggregate by NCP-SBG and its Affiliates
(the "Tag- Along Minimum"), to a Person who is not an Affiliate of NCP-SBG (a
"Tag-Along Buyer"), on a cumulative basis, in one or a series of transactions,
then NCP-SBG shall deliver written notice (a "Tag-Along Notice") to the Company
and the other Stockholders, which notice shall state (i) the name and address of
the Tag-Along Buyer, (ii) the per share amount (the "Tag-Along Price") and form
of consideration NCP-SBG proposes to receive for its shares of Common Stock, and
(iii) the number of shares of Common Stock NCP-SBG proposes to sell (the
"Tag-Along Shares") and shall be accompanied by drafts of purchase and sale
documentation (the "Tag-Along Purchase Agreement") setting forth the terms and
conditions of payment of such consideration and all other material terms and
conditions of such transfer (the "Tag-Along Terms"). During the 15 Business Day
period
4
<PAGE> 104
following receipt of such notice by the Company and the other Stockholders, the
other Stockholders shall have the right (a "Tag-Along Right"), exercised by
delivery of a written notice to NCP-SBG and the Company, to participate in such
sale to the Tag-Along Buyer on and subject to the same price, terms and
conditions offered to NCP-SBG, on a pro rata basis determined as the quotient
obtained by dividing (A) the number of shares of Common Stock then held by each
Stockholder so electing to sell (each such Person, an "Accepting Stockholder")
by (B) the aggregate number of shares of Common Stock then held by NCP-SBG and
Affiliates and by all of the Accepting Stockholders who are transferring shares
to the Tag-Along Buyer. If the Tag-Along Right shall not have been exercised
prior to the expiration of the 15 Business Day period, then at any time during
the 90 days following the expiration of the 15 Business Day period, subject to
extension for not more than an additional 60 days to the extent reasonably
required to comply with applicable laws in connection with such sale, NCP-SBG
and its Affiliates may sell the Tag- Along Shares to the Tag-Along Buyer at the
Tag-Along Price and on the Tag-Along Terms. Upon request from NCP-SBG, the
Company will provide NCP-SBG with a Stockholder List.
Section 2.4. Take-Along Rights. (a) Take-Along Notice. If NCP-SBG
intends to effect a sale or transfer (a "Take-Along Sale") of all or
substantially all of its shares of Common Stock to a Person who is not an
Affiliate (a "Take-Along Buyer") prior to a Public Offering and elects to
exercise its rights under this Section 2.4, then NCP-SBG shall deliver written
notice (a "Take-Along Notice") to the Company and the other Stockholders, which
notice shall (i) state (w) that NCP-SBG wishes to exercise its rights under this
Section 2.4 with respect to such transfer, (x) the name and address of the
Take-Along Buyer and (y) the per share amount and form of consideration NCP-SBG
proposes to receive for its shares of Common Stock, (ii) be accompanied by
drafts of purchase and sale documentation setting forth the terms and conditions
of payment of such consideration and all other material terms and conditions of
such transfer (the "Take- Along Purchase Agreement"), (iii) contain an offer
(the "Take-Along Offer") by the Take-Along Buyer to purchase from the other
Stockholders all of their shares of Common Stock, on and subject to the same
price, terms and conditions offered to NCP-SBG and (iv) state the anticipated
time and place of the closing of such transfer (a "Take-Along Closing"), which
(subject to such terms and conditions) shall occur not fewer than 15 nor more
than 90 days after the date such Take-Along Notice is delivered, provided that
if such Take-Along Closing shall not occur prior to the expiration of such
90-day period, NCP-SBG shall be entitled to deliver additional Take-Along
Notices with respect to such Take-Along Offer. Upon the request of NCP-SBG, the
Company shall provide NCP-SBG with a Stockholder List.
(b) Conditions to Take-Along. Upon delivery of a Take-Along Notice,
each of the other Stockholders shall transfer all of its shares of Common Stock
pursuant
5
<PAGE> 105
to the Take-Along Offer, as such offer may be modified from time to time, if
NCP-SBG transfers all of its shares of Common Stock to the Take-Along Buyer at
the Take-Along Closing and if all shares of Common Stock held by NCP-SBG and the
other Stockholders are sold to the Take-Along Buyer at the same price, and on
the same terms and conditions. No Stockholder other than NCP-SBG and its
Affiliates shall be obligated to make any representation or warranty to the
Take-Along Buyer with respect to, or agree to indemnify the Take-Along Buyer
against, any matter other than (i) title to such Stockholder's shares of Common
Stock to be sold pursuant to the Take-Along Offer and (ii) authority and legal
capacity of such Stockholder to sell such shares or incur any out-of-pocket
costs in connection with such transaction other than such Stockholder's pro rata
share of any transaction expenses payable in connection with the Take-Along
Closing. Within five Business Days prior to the closing contemplated by the
Take-Along Notice, each of the other Stockholders shall (i) deliver or cause to
be delivered to NCP-SBG or an agent acting on its behalf certificates
representing such other Stockholder's shares of Common Stock, duly endorsed for
transfer or accompanied by duly executed stock powers, and (ii) execute and
deliver to NCP-SBG or an agent acting on its behalf a limited power of attorney
and a letter of transmittal and custody agreement in favor of NCP-SBG or an
agent acting on its behalf, and in form and substance reasonably satisfactory to
NCP-SBG, appointing NCP-SBG or an agent acting on its behalf as the true and
lawful attorney-in-fact and custodian for such other Stockholder with respect to
the Take-Along Purchase Agreement and the transactions contemplated thereby,
with full power of substitution, and authorizing NCP-SBG or such agent to
execute and deliver a purchase and sale agreement substantially in the form of
the Take-Along Purchase Agreement and otherwise in accordance with the terms of
this Section 2.4 and to take such actions as NCP-SBG may reasonably deem
necessary or appropriate to effect the sale and transfer of the shares of Common
Stock to the Take-Along Buyer, upon receipt of the purchase price therefor set
forth in the Take-Along Notice at the Take-Along Closing, free and clear of any
Liens, options and voting agreements, together with all other documents
delivered with such Notice and required to be executed in connection with the
sale thereof pursuant to the Take-Along Offer. NCP-SBG or such agent shall hold
such shares and other documents in trust for such other Stockholder for release
against payment to such Stockholder of such Stockholder's net proceeds in
accordance with the contemplated transaction. If, within 15 days after delivery
of such shares and other documents to NCP-SBG or an agent acting on its behalf,
NCP-SBG or such agent has not completed the sale of all of the shares of Common
Stock owned by NCP-SBG and the other Stockholders to the Take-Along Buyer and
another Take-Along Notice with respect to such Take-Along Offer has not been
sent to the other Stockholders, NCP-SBG or such agent shall return to each other
Stockholder all certificates representing the shares and all other documents
that such other Stockholder delivered in connection with such sale. Promptly
after the Take-Along Closing, NCP-SBG or an agent acting on its behalf shall
6
<PAGE> 106
furnish such other evidence of the completion and time of completion of such
sale and the terms thereof as may reasonably be requested by any of the other
Stockholders.
Section 2.5. Transfer of Covered Securities to Affiliate of NCP-SBG.
In the event that any Covered Securities are transferred to any Affiliate of
NCP-SBG, such transfer to such Affiliate shall be of no effect and shall be void
ab initio unless such Affiliate agrees in writing to become a party to this
Agreement.
Section 2.6. Hold Back Agreements. If and whenever the Company
proposes to register any of its equity securities under the Securities Act,
whether or not for its own account (other than pursuant to a Special
Registration), or is required to use its reasonable best efforts to effect the
registration of any Registrable Securities (as such term is defined in the
Registration Rights Agreement, dated as of the date hereof, by and between the
Company, NCP-SBG and the other parties thereto (the "Registration Rights
Agreement")) under the Securities Act pursuant to Sections 3.1 or 3.2 of the
Registration Rights Agreement, each party hereto, if required by the managing
underwriter in an underwritten offering, agrees not to effect (other than
pursuant to such registration) any public sale or distribution, including, but
not limited to, any sale pursuant to Rule 144 or Rule 144A, of any Registrable
Securities, any other equity securities of the Company or any securities
convertible into or exchangeable or exercisable for any equity securities of the
Company for 90 days (or 180 days, if the managing underwriter so requires)
after, and during the 20 days prior to, the effective date of such registration,
to the extent timely notified in writing by the Company or the managing
underwriter, and the Company agrees to cause each holder of any Equity Security,
or of any security convertible into or exchangeable or exercisable for any
Equity Security, of the Company purchased from the Company at any time other
than in a Public Offering to enter into a similar agreement with the Company.
The Company further agrees not to effect (other than pursuant to such
registration or pursuant to a Special Registration) any public sale or
distribution, or to file any registration statement (other than such
registration or a Special Registration) covering any, of its equity securities,
or any securities convertible into or exchangeable or exercisable for such
securities, during the 20 days prior to, and for 90 days (or 180 days, if the
managing underwriter so requires) after, the effective date of such registration
if required by the managing underwriter.
ARTICLE III
OTHER AGREEMENTS
Section 3.1. Right of First Refusal. Prior to an initial Public
Offering, if any Stockholder other than NCP-SBG and its Affiliates (a "Selling
Holder") desires to transfer any Covered Securities pursuant to Section 2.1(a)
following an offer (which offer must be
7
<PAGE> 107
in writing, be irrevocable by its terms for at least 30 Business Days and be a
bona fide offer) from any prospective purchaser to purchase all or any part of
such Covered Securities owned by such Selling Holder, such Selling Holder shall
give notice (the "Notice of Offer") in writing to the Company and to NCP-SBG (i)
designating the number of shares of Covered Securities that such Selling Holder
proposes to sell (the "Offered Shares"), (ii) identifying the prospective
purchaser thereof (the "Potential Purchaser") and its address and (iii)
specifying the price (the "Offer Price") and terms (the "Offer Terms") upon
which such Selling Holder desires to sell the same. During the 20 Business Day
period following receipt of such notice by the Company and NCP-SBG (the "Refusal
Period"), such Selling Holder shall not be permitted to accept such offer, but
may submit a new Notice of Offer in respect of any revised offer in accordance
with and subject to this Section 2.3. During the first ten Business Days of the
Refusal Period, the Company shall have the right to purchase from the Selling
Holder at the Offer Price and on the Offer Terms all, any portion of the Offered
Shares. If the Company shall not have exercised such right with respect to all
Covered Securities after ten Business Days, NCP-SBG or any Affiliate or designee
of NCP-SBG, including any pooled investment vehicle organized by the managing
member of NCP-SBG or by any of its Affiliates, shall have the same right of
first refusal with respect to any such remaining Covered Securities for the
remainder of the Refusal Period. The rights provided hereunder shall be
exercised by written notice to the Selling Holder and the Company or NCP-SBG, as
the case may be, given at any time during the Refusal Period. If such right is
exercised, the Company or NCP-SBG (or its Affiliate or designee), as the case
may be, shall deliver to the Selling Holder payment of the Offer Price in
accordance with the Offer Terms, against delivery of appropriately endorsed
certificates or other instruments representing the Offered Shares, provided that
the Company and NCP-SBG shall not be required to consummate such purchase on
fewer than 20 Business Days from the date of acceptance of the offer. If the
Company and NCP-SBG fail, in the aggregate, to exercise their right of first
refusal for all of the Offered Shares during the Refusal Period, then they shall
have no right to purchase any Offered Shares, and the Selling Holder may, for a
period of up to 120 days, sell to the Potential Purchaser the Offered Shares at
the Offer Price and on the Offer Terms.
Section 3.2. Issuance of Additional Shares of Equity Securities. In
the case of the proposed sale or issuance of, or the proposed granting by the
Company of, any equity securities of the Company, or any securities convertible
into equity securities of the Company, to NCP-SBG or any of its Affiliates
following the Effective Time, the Rollover Stockholders shall have the right,
exercisable within 20 Business Days after the Company has given notice, which
notice shall include copies of all material documents setting forth the terms
and conditions of the proposed sale, issuance or grant, to the Rollover
Stockholders of such proposed sale, issuance or grant, to purchase their
respective pro rata share (based on such Stockholder's percentage ownership of
the common stock of the Company) of the equity securities (or securities
convertible into equity securities)
8
<PAGE> 108
proposed to be issued or granted on the same terms as such equity securities (or
securities convertible into equity securities) are offered to NCP-SGB or its
Affiliates.
Section 3.3. Future Acquisitions. The Company and NCP-SBG agree, and
NCP-SPG agrees to cause its Affiliates and the respective officers and directors
of such Affiliates, to pursue all future acquisitions, mergers and
recapitalizations involving businesses in the refrigerated juice industry (other
than minority investments by NCP-SGB or any of its affiliates) through (i) the
Company, with such entities to be acquired, owned and operated by the Company,
or (ii) any other company, provided that the Rollover Stockholders shall have
had an opportunity to exchange their respective shares of common stock of the
Company for shares of common stock of an equivalent value in such other company
in connection with any such transaction which results in the Company not being
the top-tier holding company for investments by NCP-SGB in the refrigerated
juice industry.
ARTICLE IV
DEFINITIONS
Section 4.1. Definitions; Construction. Whenever used in this
Agreement, the following terms shall have the respective meanings given to them
below or in the Sections indicated below:
Affiliate: of a Person means a Person that directly or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first Person, including but not limited to a
Subsidiary of the first Person, a Person of which the first Person is a
Subsidiary, or another Subsidiary of a Person of which the first Person is
also a Subsidiary. "Control" (including the terms "controlled by" and
"under common control with") means the possession, directly or indirectly,
of the power to direct or cause the direction of the management policies of
a person, whether through the ownership of voting securities, by contract
or credit arrangement, as trustee or executor, or otherwise. With respect
to NCP-SBG, the term Affiliate explicitly includes the Fund, NCP II
Co-Investment Fund, L.P., any other investment vehicle now or in the future
managed by North Castle Partners, L.L.C. and any Person with coinvestment
rights with respect to investments made by the Fund.
Board: as defined in Section 1.1(a).
Business Day: any day other than a Saturday, Sunday or other day on
which the commercial banks in New York City are authorized or required to
close.
9
<PAGE> 109
Change of Control: means, with respect to the Company, the first to
occur after the Effective Time of the following events:
(1) the acquisition by any person, entity or group (as defined in
section 13(d) of the Exchange Act) (other than (w) the Company and its
subsidiaries, (x) any employee benefit plan of the Company or its
subsidiaries or (y) the Fund or any Affiliate or partner thereof), through
one transaction or a series of transactions of 50% or more of the combined
voting power of the then outstanding voting securities of the Company;
(2) the merger or consolidation of the Company as a result of which
persons who were Stockholders of the Company immediately prior to such
merger or consolidation, do not, immediately thereafter, own, directly or
indirectly, more than 50% of the combined voting power entitled to vote
generally in the election of directors of the merged or consolidated
company;
(3) the liquidation or dissolution of the Company (other than (x) a
dissolution occurring upon a merger or consolidation thereof (y) a
liquidation of the Company into its subsidiary or (z) a liquidation or
dissolution that is incident to a reorganization); and
(4) the sale, transfer or other disposition of all or substantially
all of the assets of the Company through one transaction or a series of
related transactions to one or more persons or entities that are not, im
mediately prior to such sale, transfer or other disposition, Affiliates of
the Fund.
Closing: as defined in Section 2.1(a).
Covered Security: all of the shares of Common Stock and any other
security, option, warrant or other right that does or may allow the holder
thereof to receive Common Stock, owned from time to time by any of the
Stockholders.
Equity Security: means (i) any Common Stock or other voting
securities, (ii) any securities of the Company convertible into or exchangeable
for Common Stock or other voting securities or (iii) any options, rights or
warrants (or any similar securities) issued by the Company to acquire common
stock or other voting securities.
10
<PAGE> 110
Exchange Act: as defined in Section 2.2(a).
Exit Event: any sale, transfer, merger or other transaction as a
result of which NCP-SBG and its Affiliates sell or otherwise dispose of all
or substantially all of their Common Stock, including in any dissolution or
liquidation of the Company.
Family Member: with respect to any Stockholder, (i) a spouse, sibling
or any lineal ancestor or descendant, (ii) a trust or trusts of which such
family members are the sole beneficiaries or charitable remainder trusts in
which such family members have an interest or (iii) a partnership or
limited liability company in which such family members are the only
partners or members, as the case may be.
Fund: North Castle Partners II, L.P.
NCP: as defined in Section 1.1(d).
Person: any natural person, firm, partnership, association,
corporation, company, trust, business trust, governmental authority or
other entity.
Prohibited Transfer: any transfer of a Covered Security to a Person
which (a) may not be effected without registering the securities involved
under the Securities Act, (b) would result in the assets of the Company
constituting Plan Assets as such term is defined in the Department of Labor
regulations promulgated under the Employee Retirement Income Security Act
of 1974, as amended, (c) would cause the Company to be, be controlled by or
under common control with an "investment company" for purposes of the
Investment Company Act of 1940, as amended, or (d) would require any
securities of the Company to be registered under the Exchange Act.
Public Offering: any underwritten sale of Common Stock to the public
pursuant to an effective registration statement under the Securities Act
after which at least 20% of the outstanding shares of Common Stock shall
have been registered under the Securities Act and such shares may be freely
traded.
Purchased Shares: as defined in the recitals to this Agreement.
Rollover Stockholders: shall be Robin Prever, Anthony Malatino, Steven
Bogen, Warren G. Lichtenstein, Steel Partners II, L.P., Pershing Securities
Limited and Jurg Walker.
Securities Act: the Securities Act of 1933, as amended.
11
<PAGE> 111
Special Registration: the registration of shares of equity securities
and/or options or other rights in respect thereof to be offered solely to
directors, members of management, employees, consultants or sales agents,
distributors or similar representatives of the Company or its direct or
indirect subsidiaries, solely on Form S-8 or any successor form.
Stockholder: as defined in the introduction to this Agreement.
Stockholder List: at any applicable time, the list of the name and
addresses of the Stockholders at such time.
ARTICLE V
MISCELLANEOUS
Section 5.1. Notices. All notices, requests, demands, waivers and
other communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given if (a)
delivered personally, (b) mailed, certified or registered mail with
postage prepaid, (c) sent by next-day or overnight mail or delivery or (d)
sent by fax, with a copy sent by (a), (b), or (c) above, or telegram, as
follows:
(i) if to NCP-SBG:
NCP-SBG, L.P.
c/o North Castle Partners, L.L.C.
60 Arch Street
Greenwich, CT 06830
Fax: (203) 618-1860
Tel: (203) 862-3250
Attention: Peter J. Shabecoff
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, NY 10022
Fax: (212) 909-6836
Tel: (212) 909-6000
Attention: Franci J. Blassberg, Esq.
12
<PAGE> 112
(ii) if to the Company:
Saratoga Beverage Group, Inc.
11 Geyser Road
Saratoga Springs, NY 12366
Fax: (518) 584-0386
Tel: (518) 584-6363 X-11
Attention: Robin Prever
(iii) if to any other Person who is a party, or to any
Person who becomes a party to this Agreement
pursuant to Section 5.12 hereof, to the name and
address specified for such Person on the signature
pages hereto or in Schedule A hereto;
or, in each case, at such other address as may be specified in writing to the
other parties hereto.
All such notices, requests, demands, waivers and other communications shall
be deemed to have been received (w) if by personal delivery on the day after
such delivery, (x) if by certified or registered mail, on the seventh business
day after the mailing thereof, (y) if by next-day or overnight mail or delivery,
on the day delivered, (z) if by telecopy or telegram, on the next day following
the day on which such telecopy or telegram was sent, provided that a copy is
also sent by certified or registered mail.
Section 5.2. Remedies. Each Stockholder acknowledges that the other
Stockholders and the Company would be irreparably damaged in the event of a
breach or a threatened breach by such Stockholder or the Company of any of its
obligations under this Agreement (including without limitation the covenants set
forth in Section 3.3) and the Company and each Stockholder agrees that, in the
event of a breach or a threatened breach by the Company or such Stockholder of
any such obligation, each of the other Stockholders and the Company shall, in
addition to any other rights and remedies available to them in respect of such
breach, be entitled to an injunction from a court of competent jurisdiction
(without any requirement to post bond) granting them specific performance by
such Stockholder of its obligations under this Agreement (including without
limitation the covenants set forth in Section 3.3). In the event that any
Stockholder or the Company shall file suit to enforce the covenants contained in
this Agreement (including without limitation the covenants set forth in Section
3.3) (or obtain any other remedy in respect of any breach thereof), the
prevailing party in the suit shall be entitled to recover, in addition to all
other damages to which it may be entitled, the costs incurred by such party in
conducting the suit, including reasonable attorney's fees and expenses.
13
<PAGE> 113
Section 5.3. Governing Law, etc. (a) THIS AGREEMENT SHALL BE GOVERNED
IN ALL RESPECTS, INCLUDING AS TO VALIDITY, INTERPRETATION AND EFFECT, BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF
LAWS RULES THEREOF TO THE EXTENT ANY SUCH RULES WOULD REQUIRE OR PERMIT THE
APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE
CORPORATE LAW OF THE STATE OF INCORPORATION OF THE COMPANY SPECIFICALLY AND
MANDATORILY APPLIES. EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE FEDERAL COURTS OF
THE UNITED STATES OF AMERICA LOCATED IN THE STATE, CITY AND COUNTY OF NEW YORK
SOLELY IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF
THIS AGREEMENT AND OF THE DOCUMENTS REFERRED TO IN THIS AGREEMENT, AND IN
RESPECT OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY. EACH PARTY HERETO
HEREBY WAIVES, AND AGREES NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR
PROCEEDING FOR THE INTERPRETATION OR ENFORCEMENT HEREOF OR OF ANY SUCH DOCUMENT
OR IN RESPECT OF ANY SUCH TRANSACTION, THAT IT IS NOT SUBJECT TO SUCH
JURISDICTION, THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT
MAINTAINABLE IN SUCH COURTS, THAT THE VENUE THEREOF MAY NOT BE APPROPRIATE OR
THAT THIS AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE ENFORCED IN OR BY SUCH
COURTS. EACH PARTY HERETO HEREBY CONSENTS TO AND GRANTS ANY SUCH COURT
JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER OF ANY
SUCH DISPUTE AND AGREES THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION
WITH ANY SUCH ACTION OR PROCEEDING IN THE MANNER PROVIDED IN SECTION 5.1 OR IN
SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID AND SUFFICIENT
SERVICE THEREOF.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT,
OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES
14
<PAGE> 114
THAT (1) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (2) SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (3) SUCH PARTY
MAKES THIS WAIVER VOLUNTARILY, AND (4) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 5.3(b).
Section 5.4. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
successors and permitted assigns.
Section 5.5. Assignment. This Agreement shall not be assignable or
otherwise transferable by any party hereto without the prior written consent of
the Company, NCP-SBG, and any purported assignment or other transfer without
such consent shall be void and unenforceable; provided that NCP-SBG may assign
this Agreement or any of their rights and obligations hereunder to any of their
respective Affiliates or any other Person.
Section 5.6. No Third Party Beneficiaries. Nothing in this Agreement
shall confer any rights upon any person or entity other than the parties hereto
and their respective heirs, successors and permitted assigns.
Section 5.7. Amendment; Waivers, etc. No amendment, modification or
discharge of this Agreement, and no waiver hereunder, shall be valid or binding
unless set forth in writing and duly executed by NCP-SBG and the party against
whom enforcement of the amendment, modification, discharge or waiver is sought.
Any such waiver shall constitute a waiver only with respect to the specific
matter described in such writing and shall in no way impair the rights of the
party granting such waiver in any other respect or at any other time. Neither
the waiver by any of the parties hereto of a breach of or a default under any of
the provisions of this Agreement, nor the failure by any of the parties, on one
or more occasions, to enforce any of the provisions of this Agreement or to
exercise any right or privilege hereunder, shall be construed as a waiver of any
other breach or default of a similar nature, or as a waiver of any of such
provisions, rights or privileges hereunder. The rights and remedies herein
provided are cumulative and none is exclusive of any other, or of any rights or
remedies that any party may otherwise have at law or in equity.
Section 5.8. Legend on Stock Certificates. A copy of this Agreement
shall be filed with the Secretary of the Company and kept with the records of
the Company.
15
<PAGE> 115
Each certificate representing Covered Securities which are subject to this
Agreement shall be endorsed with a legend substantially to the following effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED, TRANSFERRED OR OTHERWISE DISPOSED OF (EACH, A "TRANSFER")
UNLESS AND UNTIL REGISTERED UNDER THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR UNLESS SUCH TRANSFER IS (A) EXEMPT FROM REGISTRATION OR
IS OTHERWISE IN COMPLIANCE WITH THE ACT AND SUCH LAWS IN THE OPINION OF
COUNSEL TO THE STOCKHOLDER, WHICH COUNSEL MUST BE, AND THE FORM AND
SUBSTANCE OF WHICH OPINION ARE, REASONABLY SATISFACTORY TO THE ISSUER AND
(B) IN COMPLIANCE WITH THE STOCKHOLDERS AGREEMENT OF THE ISSUER, DATED AS
OF JANUARY 5, 2000 AND ANY AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS
THERETO (THE "STOCKHOLDERS AGREEMENT").
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
RESTRICTIONS ON TRANSFER SET FORTH IN (I) A STOCKHOLDERS AGREEMENT AND (II)
A REGISTRATION RIGHTS AGREEMENT, COPIES OF WHICH ARE AVAILABLE FOR
INSPECTION AT THE OFFICES OF THE COMPANY. NO TRANSFER OF SUCH SECURITIES
WILL BE MADE ON THE BOOKS OF THE COMPANY, AND SUCH TRANSFER SHALL BE
VOIDABLE, UNLESS ACCOMPANIED BY EVIDENCE OF COMPLIANCE WITH THE TERMS OF
SUCH AGREEMENTS.
Any stock certificate issued at any time in exchange or substitution for a
certificate bearing such legend (except a new certificate issued upon the
completion of a public distribution of securities of the Company represented
thereby or otherwise if the holder of the Shares represented by such certificate
shall have delivered to the Company an opinion of counsel, which opinion and
counsel shall be reasonably satisfactory to the Company, that the Act permits
such certificate to be issued without such legend or with a legend modified as
set forth in such opinion) shall also bear such legend. The provisions of this
Agreement shall be binding upon, and shall inure to the benefit of, the
Stockholders and all subsequent holders of Covered Securities who acquired the
same directly or indirectly from a Stockholder in a transaction or series of
transactions not involving any Public Offering.
16
<PAGE> 116
The Company agrees that it will not transfer on its books any certificate
representing Covered Securities in violation of the provisions of this
Agreement.
Section 5.9. Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof.
Section 5.10. Severability. If any provision, including any phrase,
sentence, clause, section or subsection, of this Agreement is invalid,
inoperative or unenforceable for any reason, such circumstances shall not have
the effect of rendering such provision in question invalid, inoperative or
unenforceable in any other case or circumstance, or of rendering any other
provision herein contained invalid, inoperative, or unenforceable to any extent
whatsoever.
Section 5.11. Headings; Counterparts. The headings contained in this
Agreement are for purposes of convenience only and shall not affect the meaning
or interpretation of this Agreement. This Agreement may be executed in several
counter parts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.
Section 5.12. Subsequent Stockholders. Each of the parties hereto
agrees that in order for any Person who after the date of this Agreement is
offered shares of Common Stock or securities exercisable for or convertible into
shares of Common Stock (or any interest therein) to become a party to this
Agreement, both the Company and such Person must execute Schedule A hereto and
duly executed copies thereof must be delivered to NCP-SBG in accordance with
Section 5.1. The Company shall maintain a register of all parties to this
Agreement which shall be available for review by any party hereto. Any transfer
of Covered Securities (or any interest therein) to a transferee required hereby
to become a party to this Agreement shall be of no effect and shall be void ab
initio unless such transferee becomes a party to this Agreement as provided in
the previous sentence.
Section 5.13. Reports. Within 60 days after the end of each fiscal
quarter, the Company shall furnish to each Stockholder an unaudited financial
report prepared in accordance with generally accepted accounting principles
applied on a consistent basis setting forth as of the end of such fiscal
quarter, a balance sheet of the Company and an income statement and a cash flow
statement for the Company for such fiscal quarter.
Section 5.14. Certain Agreements. The Stockholders party to that
certain Stockholders' Agreement, dated as of October 13, 1998, by and among the
Company, Steven Bogen, Robin Prever and Anthony Malatino, and that certain
Stockholders'
17
<PAGE> 117
Agreement, dated as of October 22, 1998, between Robin Prever and Anthony
Malatino, agree to terminate or cause to be terminated, as of the Effective
Time, such stockholders' agreements.
Section 5.15. Effectiveness. The effectiveness of this Agreement is
conditioned upon the occurrence of the Effective Time as contemplated by the
Recapitalization Agreement. If the Effective Time does not occur, or the
Recapitalization Agreement is terminated in accordance with its terms, this
Agreement shall be of no force or effect.
18
<PAGE> 118
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
SARATOGA BEVERAGE GROUP, INC.
By:
------------------------------------------
Name:
Title:
NCP-SBG, L.P.
By: NCP-SBG, GP, L.L.C.,
its General Partner
By:
--------------------------------
Name: Peter J. Shabecoff
Title: Executive Vice President
Address: 4301 North Ocean Blvd.
- ---------------------------------------
ROBIN PREVER A-1703
Boca Raton, FL 33431
Address: c/o Morgan Stanley Dean Witter
- ---------------------------------------
ANTHONY MALATINO 340 Broadway
Saratoga Springs, NY 12866
Address: 81 Dahlia Street
- ---------------------------------------
STEVEN BOGEN Staten Island, NY 10312
[Signature page for Stockholders Agreement]
<PAGE> 119
STEEL PARTNERS II, L.P. Address: c/o Steel Partners II, L.P.
150 East 52nd St., 21st Floor
By: STEEL PARTNERS, L.L.C., New York, NY 10022
its General Partner
By:
--------------------------------
Name: Warren Lichtenstein
Title: Managing Member
[Signature page for Stockholders Agreement]
<PAGE> 120
Address: c/o Steel Partners II, L.P.
----------------------- 150 East 52nd St., 21st Floor
Warren G. Lichtenstein New York, NY 10022
<PAGE> 121
PERSHING SECURITIES LIMITED Address: Capstan House
#1 Clove Crescent
East India Dock
By:
----------------------------------- London E14 2BH
Name: England
Title:
[Signature page for Stockholders Agreement]
<PAGE> 122
Address: c/o Investa AG
- -----------------------------------
JURG WALKER Harestrasse 4
Birsfelden, Switzerland 4127
[Signature page for Stockholders Agreement]
<PAGE> 123
Exhibit D
================================================================================
SARATOGA BEVERAGE GROUP, INC.
REGISTRATION RIGHTS AGREEMENT
Dated as of January 5, 2000
================================================================================
<PAGE> 124
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
1. Effectiveness as to Registrable Securities...............................1
2. Definitions; Construction................................................2
3. Registration.............................................................6
3.1 Registration on Request.........................................6
(a) Requests...............................................6
(b) Obligation to Effect Registration......................6
(c) Registration Statement Form............................8
(d) Expenses...............................................8
(e) Inclusion of Other Securities..........................9
(f) Effective Registration Statement.......................9
(g) Pro Rata Allocation....................................9
3.2 Incidental Registration.........................................9
3.3 Registration Procedures........................................11
3.4 Underwritten Offerings.........................................16
(a) Underwritten Offerings Exclusive......................16
(b) Underwriting Agreement................................16
(c) Selection of Underwriters.............................17
(d) Incidental Underwritten Offerings.....................17
(e) Hold Back Agreements..................................17
3.5 Preparation; Reasonable Investigation..........................18
3.6 Other Registrations............................................18
3.7 Indemnification................................................19
(a) Indemnification by the Company........................19
(b) Indemnification by the Sellers........................20
(c) Notices of Claims, etc................................20
(d) Other Indemnification.................................21
(e) Other Remedies........................................21
(f) Officers and Directors................................22
4. Miscellaneous...........................................................22
4.1 Rule 144; Legended Securities; etc.............................22
4.2 Amendments and Waivers.........................................23
4.3 Beneficial Owners..............................................23
4.4 Successors, Assigns and Transferees............................23
</TABLE>
<PAGE> 125
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
4.5 Notices........................................................24
4.6 No Inconsistent Agreements.....................................25
4.7 Remedies; Attorneys' Fees......................................25
4.8 Stock Splits, etc..............................................25
4.9 Severability...................................................25
4.10 Headings.......................................................26
4.11 Counterparts...................................................26
4.12 Governing Law..................................................26
4.13 No Third Party Beneficiaries...................................26
4.14 Consent to Jurisdiction........................................26
4.15 Waiver of Jury Trial...........................................26
4.16 Effectiveness..................................................27
</TABLE>
ii
<PAGE> 126
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of January
5, 2000, among Saratoga Beverage Group, Inc., a Delaware corporation (the
"Company"), NCP-SBG, L.P., a Delaware limited partnership ("NCP-SBG") and the
undersigned stockholders of the Company (the "Continuing Shareholders").
Capitalized terms used in this Agreement have the meanings indicated in Section
2.
WHEREAS, the Company is a party to a Stock Purchase Agreement and
Agreement and Plan of Merger, dated as of the date hereof (the "Recapitalization
Agreement"), with NCP-SBG, and NCP-SBG Recapitalization Corp., pursuant to which
and subject to the terms and conditions contained therein, (i) NCP-SBG
Recapitalization Corp. shall merge with and into the Company, and (ii) NCP-SBG
will purchase shares of the common stock, par value $0.01 per share, of the
Company (the "Common Stock");
WHEREAS, to induce NCP-SBG to enter into the Recapitalization
Agreement, the Company has agreed to provide the registration rights set forth
in this Agreement for the benefit of NCP-SBG and each Holder (as defined below);
WHEREAS, the execution and delivery of this Agreement is a condition
to the obligations of NCP-SBG under the Recapitalization Agreement; and
WHEREAS, the Company may in the future issue or sell (either directly
or pursuant to options or other rights) additional shares of Common Stock to (i)
certain shareholders of businesses acquired by the Company or one of its
Subsidiaries, (ii) certain directors, executive officers and key employees of
the Company or one of its Subsidiaries, and (iii) certain other purchasers, in
each case pursuant to stock subscription, merger, acquisition or purchase
agreements or stock option or rights agreements, plans or arrangements, the
terms of which are not inconsistent with the terms of this Agreement or any
Stockholders Agreement (collectively, the "Stock Subscription Agreements");
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual conditions contained herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Effectiveness as to Registrable Securities. This Agreement shall
take effect at the Effective Time (as defined in the Recapitalization Agreement)
with respect to any Registrable Securities issued pursuant to the
Recapitalization Agreement and Registrable Securities issued and outstanding as
of the date hereof. With respect to any Common Stock issued after the Effective
Time (other than Common Stock issuable upon exercise of options or conversion of
other securities outstanding as of the date hereof and
<PAGE> 127
included in the definition of Registrable Securities), this Agreement shall
become effective only upon the issuance or sale of such Common Stock to any
party pursuant to any Stock Subscription Agreement that provides that such
Common Stock shall constitute Registrable Securities and that the shares of
Common Stock issued or sold thereunder are entitled to the rights and subject to
the obligations created hereunder, provided that such issuance or sale shall
have been consented to in writing by the Board of Directors of the Company (the
"Board").
2. Definitions; Construction. (a) For purposes of this Agreement, the
following terms have the following respective meanings:
Affiliate: with respect to any Person, any other Person directly or
indirectly Controlling, Controlled by or under common Control with such first
Person. "Control" means the power to direct or cause the direction of management
or policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise.
Ancillary Agreements: as defined in the Recapitalization Agreement.
Agreement: as defined in the Preamble to this Agreement.
Board: as defined in Section 1.
Business Day: a day other than a Saturday, Sunday or other day on
which commercial banks in the City of New York are authorized or required to
close.
Closing: the closing under the Recapitalization Agreement.
Common Stock: as defined in the recitals to this Agreement.
Company: as defined in the preamble to this Agreement.
Continuing Shareholders: as defined in the preamble to this Agreement.
Distributee: any person that is a partner of NCP-SBG or NCP-Cofund, or
any person that is a member, shareholder or partner of a Distributee to which
Registrable Securities are transferred or distributed by NCP-SBG, NCP-Cofund or
any Distributee.
DTC: the Depository Trust Company.
2
<PAGE> 128
Exchange Act: the Securities Exchange Act of 1934, as amended, or any
successor federal statute, and the rules and regulations thereunder which shall
be in effect at the time. Any reference to a particular section thereof shall
include a reference to the corresponding section, if any, of any such successor
federal statute, and the rules and regulations thereunder.
Holder: any holder of Registrable Securities that has received such
Registrable Securities in compliance with the Ancillary Agreements and
applicable law.
NASD: the National Association of Securities Dealers, Inc.
NCP-Cofund: means NCP Co-Investment Fund, L.P.
NCP-SBG: as defined in the preamble to this Agreement.
Person: any natural person, firm, partnership, association,
corporation, company, trust, business trust, governmental entity or other
entity.
Prospectus: the prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion
of the Registrable Securities covered by such Registration Statement and all
other amendments and supplements to the prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such prospectus.
Public Offering: an underwritten public offering of Common Stock led
by at least one underwriter of nationally recognized standing.
Recapitalization Agreement: as defined in the recitals hereto.
Registrable Securities: (a) (i) shares of Common Stock issued by the
Company pursuant to the Recapitalization Agreement to NCP-SBG or NCP-Cofund, the
Continuing Shareholders, or any of their Affiliates, and (ii) shares of Common
Stock issuable pursuant to any Stock Subscription Agreement (including upon
exercise of options or warrants) that provides that such Common Stock shall
constitute Registrable Securities, except for any such Common Stock issued
pursuant to an effective registration statement under the Securities Act on Form
S-8, Form S-4, Form S-1 or any successor form to any thereof (unless such Common
Stock is held by a Continuing Shareholder who is an affiliate (within the
meaning of Rule 144) of the Company) and (b) any securities
3
<PAGE> 129
issued or issuable with respect to any shares of Common Stock referred to in the
foregoing clauses (x) upon any conversion or exchange thereof, (y) by way of
stock dividend or other distribution, stock split or reverse stock split or (z)
in connection with a combination of shares, recapitalization, merger,
consolidation, exchange offer or other reorganization. As to any particular
Registrable Securities, once issued such securities shall cease to be
Registrable Securities when (A) a Registration Statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such Registration
Statement, unless such securities are acquired and held by a Continuing
Shareholder who is an affiliate (within the meaning of Rule 144), (B) such
securities shall have been distributed to the public in reliance upon Rule 144,
(C) such securities have been held, or deemed, by virtue of tacking holding
periods as contemplated by Rule 144, to be held for a period of two years by a
Person who obtained such securities pursuant to any Stock Subscription Agreement
and who has not been an affiliate (within the meaning of Rule 144) of the
Company within the three months preceding any proposed disposition of such
securities, (D) subject to the provisions of Section 4.1(b)(ii), such securities
shall have been otherwise transferred, new certificates for such securities not
bearing a legend restricting further transfer shall have been delivered by the
Company and subsequent disposition of such securities shall not require
registration or qualification of such securities under the Securities Act or any
similar state law then in force, (E) such securities shall have been acquired by
the Company, OR (F) with respect to any such securities acquired by a Continuing
Shareholder pursuant to the exemption from the registration requirements of the
Securities Act contained in Rule 701 (or any successor provision) thereunder, at
any time 90 days following the date the Company registers a class of equity
securities under Section 12 of the Exchange Act.
Registration Expenses: all fees and expenses incident to the
performance of or compliance with the provisions of this Agreement, whether or
not any registration statement is filed or becomes effective, including, without
limitation, all (i) registration and filing fees (including, without limitation,
(A) fees with respect to filings required to be made with the NASD in connection
with an underwritten offering and (B) fees and expenses of compliance with state
securities or blue sky laws (including, without limitation, fees and
disbursements of counsel for the underwriter or underwriters in connection with
blue sky qualifications of the Registrable Securities and determination of the
eligibility of the Registrable Securities for investment under the laws of such
jurisdictions as provided in Section 3.3(e))), (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities in a form eligible for deposit with DTC and of printing
prospectuses), (iii) fees and disbursements of all independent certified public
accountants referred to in Section 3.3 (including, without limitation, the
reasonable expenses of any special audit and "comfort" letters required by or
incident to such performance), (iv) the fees and expenses of any "qualified
independent underwriter" or
4
<PAGE> 130
other independent appraiser participating in an offering pursuant to Rule 2720
of the NASD Rules of Conduct, (v) liability insurance under the Securities Act
or any other securities laws, if the Company desires such insurance, (vi) fees
and expenses of all attorneys, advisers, appraisers and other persons retained
by the Company or any Subsidiary of the Company, (vii) internal expenses of the
Company and its Subsidiaries (including, without limitation, all salaries and
expenses of officers and employees of the Company and its Subsidiaries
performing legal or accounting duties), (viii) the expense of any annual audit,
(ix) the expenses relating to printing, word processing and distributing all
registration statements, underwriting agreements, securities sales agreements
and any other documents necessary in order to comply with this Agreement, and
(x) the reasonable out-of-pocket expenses of the Holders of the Registrable
Securities being registered in such registration incurred in connection
therewith including, without limitation, the reasonable fees and disbursements
of not more than one counsel (together with appropriate local counsel) chosen by
the holders of a majority of Registrable Securities included in such
registration. Registration Expenses shall not include any underwriting discounts
or commissions or any transfer taxes payable in respect of the sale of
Registrable Securities by the Holders thereof.
Registration Statement: any registration statement of the Company that
covers any of the Registrable Securities pursuant to the provisions of this
Agreement, and all amendments and supplements to any such registration
statement, including post-effective amendments, in each case including the
Prospectus, all exhibits and all material incorporated by reference or deemed to
be incorporated by reference in such registration statement.
Requisite Percentage of Shareholders: as of any date of determination,
the holder or holders of at least 35% (by number of shares) of Registrable
Securities (other than any Registrable Securities obtainable upon the exercise
of any option).
Rule 144: Rule 144 (or any successor provision) under the Securities
Act.
Rule 144A: Rule 144A (or any successor provision) under the Securities
Act.
Rule 145: Rule 145 (or any successor provision) under the Securities
Act.
SEC: the Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act or the Exchange Act.
Securities Act: the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations thereunder which shall
be in effect at the
5
<PAGE> 131
time. Any reference to a particular section thereof shall include a reference to
the corresponding section, if any, of any such successor federal statute, and
the rules and regulations thereunder.
Stockholders Agreement: any agreement between the Company and any of
its stockholders.
Special Registration: the registration of shares of equity securities
and/or options or other rights in respect thereof to be offered solely to
directors, members of management, employees, consultants or sales agents,
distributors or similar representatives of the Company or its direct or indirect
Subsidiaries, solely on Form S-8 or any successor form.
Stock Subscription Agreement: as defined in the recitals to this
Agreement.
Subsidiary: with respect to any Person, any corporation or Person, a
majority of the outstanding voting stock or other equity interests of which is
owned, directly or indirectly, by that Person.
underwritten registration or underwritten offering: a registration in
which securities of the Company (including Registrable Securities) are sold to
an underwriter for reoffering to the public.
(b) Any reference in this Agreement to a statute shall be to such
statute, as amended from time to time, and to the rules and regulations
promulgated thereunder. For the purposes of this Agreement, the terms "holder,"
"held," "owner," and "owned" shall be construed as set forth in Section 4.3.
3. Registration.
3.1 Registration on Request.
(a) Requests. Subject to the provisions of Section 3.6, (i) at any
time or from time to time after the date hereof, the Requisite Percentage of
Shareholders shall have the right to make written requests that the Company
effect one or more registrations under the Securities Act of all or part of the
Registrable Securities of such Holder or Holders, which requests shall specify
the intended method of disposition thereof, including whether the registration
requested is for an underwritten offering.
(b) Obligation to Effect Registration. Within 10 days after receipt by
the Company of any request for registration pursuant to Section 3.1(a), the
Company shall
6
<PAGE> 132
give written notice of such requested registration to all Holders, and thereupon
will use its reasonable best efforts to effect the registration under the
Securities Act of:
(i) the Registrable Securities which the Company has been so requested
to register pursuant to Section 3.1(a); and
(ii) all other Registrable Securities which the Company has been
requested to register by the Holders thereof by written request given to
the Company within 20 days after the Company has given such written notice
(which request shall specify the intended method of disposition of such
Registrable Securities),
all to the extent required to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities so to be
registered. Notwithstanding the preceding sentence:
(x) the Company shall not be required to effect a registration
requested pursuant to Section 3.1 if the aggregate number of Registrable
Securities referred to in clauses (i) and (ii) of this Section 3.1(b)
included in such registration shall be less than 10% of the number of
Purchased Shares (as defined in the Recapitalization Agreement); and
(y) if the Board determines in its good faith judgment, after
consultation with a firm of nationally recognized underwriters, that there
will be an adverse effect on a then-contemplated initial Public Offering of
the Common Stock, the Holders requesting such registration shall be given
notice of such fact and shall be deemed to have withdrawn such request and
such registration shall not be deemed to have been effected or requested
pursuant to this Section 3.1; and
(z) the Company shall be entitled to postpone for a reasonable period
of time not to exceed 180 days from the date a request pursuant to Section
3.1(a) is received, the filing of any registration statement otherwise
required to be prepared and filed by it pursuant to this Section 3.1, if
the Board of Directors of the Company (i) in good faith determines at such
time that such registration and offering would materially adversely affect
or interfere with any proposed or pending financing, acquisition, corporate
reorganization or other material transaction or the conduct or outcome of
any material litigation involving the Company or any of its Subsidiaries,
and (ii) as promptly as practicable gives the relevant Holders written
notice of such postponement, setting forth the duration of and reasons for
such postponement; provided, however, that the Company shall not effect
such a postponement more than once in any 360 day period. If the Company
shall so postpone the filing of a registration statement, the Holder or
Holders making the
7
<PAGE> 133
request pursuant to Section 3.1(a) shall within 10 days after receipt of
the notice of postponement advise the Company in writing whether or not it
has determined to withdraw its request for registration. Failure by such
Holder or Holders to timely notify the Company of its determination shall
for all purposes be treated as a withdrawal of the request for
registration. In the event of a withdrawal, such request for registration
shall not be deemed exercised for purposes of determining whether such
Holder or Holders still have the right to make a request for registration
pursuant to this Section 3.1.
(c) Registration Statement Form. Each registration requested pursuant
to this Section 3.1 shall be effected by the filing of a registration statement
on Form S-1, Form S-2 or Form S-3 (or any other form which includes
substantially the same information as would be required to be included in a
registration statement on such forms as presently constituted), unless the use
of a different form is (i) required by law or (ii) permitted by law and agreed
to in writing by the Holders of at least a majority (by number of shares) of the
Registrable Securities as to which registration has been requested pursuant to
this Section 3.1. At any time after the Company has issued and sold any shares
of its capital stock registered under an effective registration statement under
the Securities Act, or after the Company shall have registered any class of
equity securities pursuant to Section 12 of the Exchange Act, it will use its
reasonable best efforts to qualify for registration on Form S-2 or Form S-3 (or
any other comparable form hereinafter adopted).
(d) Expenses. The Company will pay all Registration Expenses in
connection with (i) the first four registrations that are effected as requested
under Section 3.1(a)(i). The Registration Expenses in connection with each other
registration, if any, requested under this Section 3.1 shall be apportioned
among the Holders whose Registrable Securities are then being registered, on the
basis of the respective amounts of Registrable Securities then being registered
by them or on their behalf. However, in the case of all registrations requested
under Section 3.1(a), the Company shall pay all amounts in respect of (i) any
allocation of salaries of personnel of the Company and its Subsidiaries or other
general overhead expenses of the Company and its Subsidiaries or other expenses
for the preparation of financial statements or other data normally prepared by
the Company and its Subsidiaries in the ordinary course of its business, (ii)
the expenses of any officers' and directors' liability insurance, (iii) the
expenses and fees for listing the securities to be registered on each exchange
on which similar securities issued by the Company are then listed or, if no such
securities are then listed, on an exchange selected by the Company, and (iv) all
fees associated with filings required to be made with the NASD (including, if
applicable, the fees and expenses of any "qualified independent underwriter" and
its counsel as may be required by the rules and regulations of the NASD).
Notwithstanding the provisions of this section 3.1(d) or of Section 3.2, each
8
<PAGE> 134
seller of Registrable Securities shall pay all Registration Expenses to the
extent required to be paid by such seller by applicable law.
(e) Inclusion of Other Securities. The Company shall not register
securities (other than Registrable Securities) for sale for the account of any
Person other than the Company in any registration requested pursuant to Section
3.1(a) unless permitted to do so by the written consent of Holders holding at
least a majority (by number of shares) of the Registrable Securities proposed to
be sold in such registration.
(f) Effective Registration Statement. A registration requested
pursuant to Section 3.1(a) shall not be deemed to have been effected unless it
is declared effective by the SEC and remains effective for the period specified
in Section 3.3(b). Notwithstanding the preceding sentence, a registration
requested pursuant to Section 3.1(a) that does not become effective after the
Company has filed a Registration Statement with respect thereto by reason of the
refusal to proceed of the Holder or Holders of the Registrable Securities
requesting registration shall be deemed to have been effected by the Company at
the request of such Holder or Holders.
(g) Pro Rata Allocation. If the Holders of a majority (by number of
shares) of the Registrable Securities for which registration is being requested
pursuant to Section 3.1(a) determine, based on consultation with the managing
underwriters or, in an offering which is not underwritten, with an investment
banker, that the number of securities to be sold in any such offering should be
limited due to market conditions or otherwise, Holders of Registrable Securities
proposing to sell their securities in such registration shall share pro rata in
the number of securities being offered (as determined by the Holders holding a
majority of the Registrable Securities for which registration is being requested
in consultation with the managing underwriters or investment banker, as the case
may be) and registered for their account, such sharing to be based on the number
of Registrable Securities as to which registration was requested by such
Holders.
3.2 Incidental Registration. If the Company at any time proposes to
register any of its equity securities (as defined in the Exchange Act) under the
Securities Act (other than pursuant to Section 3.1 or pursuant to a Special
Registration), whether or not for sale for its own account, and the registration
form to be used may be used for the registration of Registrable Securities, it
shall each such time give prompt written notice to all Holders of Registrable
Securities of its intention to do so and, upon the written request of any Holder
of Registrable Securities given to the Company within 30 days after the Company
has given any such notice (which request shall specify the Registrable
Securities intended to be disposed of by such Holder and the intended method of
disposition thereof), the Company will use its reasonable best efforts to effect
the registration under the Securities Act of all Registrable Securities which
the Company has been so requested
9
<PAGE> 135
to register by the Holders thereof, to the extent required to permit the
disposition (in accordance with the intended methods thereof as aforesaid) of
the Registrable Securities so to be registered, provided that:
(a) if such registration shall be in connection with the initial
Public Offering, the Company shall not include any Registrable Securities
in such proposed registration if the Board shall have determined, after
consultation with the managing underwriters for such offering, that it is
not in the best interests of the Company to include any Registrable
Securities in such registration, provided that, if the Board makes such a
determination, the Company shall not include in such registration any
securities not being sold for the account of the Company;
(b) if, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the Registration
Statement filed in connection with such registration, the Company shall
determine for any reason not to register such securities, the Company may,
at its election, give written notice of such determination to each Holder
that was previously notified of such registration and, thereupon, shall not
register any Registrable Securities in connection with such registration
(but shall nevertheless pay the Registration Expenses in connection
therewith), without prejudice, however, to the rights of any Holders to
request that a registration be effected under Section 3.1;
(c) if the Company shall be advised in writing by the managing
underwriters (or, in connection with an offering which is not underwritten,
by an investment banker) that in their or its opinion the number of
securities requested to be included in such registration (whether by the
Company, pursuant to this Section 3.2 or pursuant to any other rights
granted by the Company to a holder or holders of its securities to request
or demand such registration or inclusion of any such securities in any such
registration) exceeds the number of such securities which can be sold in
such offering:
(i) the Company shall include in such registration the number (if
any) of Registrable Securities so requested to be included which in
the opinion of such underwriters or investment banker, as the case may
be, can be sold and shall not include in such registration any
securities (other than securities being sold by the Company, which
shall have priority in being included in such registration) so
requested to be included other than Registrable Securities unless all
Registrable Securities requested to be so included are included
therein; and
10
<PAGE> 136
(ii) if in the opinion of such underwriters or investment banker,
as the case may be, some but not all of the Registrable Securities may
be so included, all Holders of Registrable Securities requested to be
included therein shall share pro rata in the number of shares of
Registrable Securities included in such Public Offering on the basis
of the number of Registrable Securities requested to be included
therein by such Holders, provided that, in the case of a registration
initially requested or demanded by a holder or holders of securities
other than Registrable Securities, the Holders of the Registrable
Securities requested to be included therein and the holders of such
other securities shall share pro rata (based on the number of shares
if the requested or demanded registration is to cover only Common
Stock and, if not, based on the proposed offering price of the total
number of securities included in such Public Offering requested to be
included therein),
and the Company shall so provide in any registration agreement hereinafter
entered into with respect to any of its securities; and
(d) if prior to the effective date of the registration statement filed
in connection with such registration, the Company is informed by the
managing underwriter (or, in connection with an offering which is not
underwritten, by an investment banker) that the price at which such
securities are to be sold is a price below that price which the requesting
Holders shall have indicated to be acceptable, the Company shall promptly
notify the requesting Holders of such fact, and each such requesting Holder
shall have the right to withdraw its request to have its Registrable
Securities included in such registration statement.
The Company will pay all Registration Expenses in connection with each
registration of Registrable Securities requested pursuant to this Section 3.2.
No registration effected under this Section 3.2 shall relieve the Company from
its obligation to effect registrations upon request under Section 3.1. The
Company shall not be obligated to cause any "incidental" registration to be
underwritten.
3.3 Registration Procedures. If and whenever the Company is required
to use its reasonable best efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in Sections 3.1 and 3.2, the
Company shall:
(a) subject to clauses (x), (y) and (z) of Section 3.1(b), prepare and
file with the SEC, as soon as practicable, a Registration Statement with
respect to such securities, make all required filings with the NASD and use
its reasonable best efforts to cause such Registration Statement to become
effective;
11
<PAGE> 137
(b) prepare and file with the SEC such amendments and supplements to
such Registration Statement and the Prospectus used in connection therewith
and such other documents as may be necessary to keep such Registration
Statement effective and to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
Registration Statement until such time as all of such securities have been
disposed of in accordance with the intended methods of disposition by the
seller or sellers thereof set forth in such Registration Statement, but in
no event for a period of more than six months after such Registration
Statement becomes effective;
(c) furnish to counsel (if any) selected by the Holders of a majority
(by number of shares) of the Registrable Securities covered by such
registration statement copies of all documents proposed to be filed with
the SEC in connection with such registration, which documents will be
subject to the review of such counsel;
(d) furnish to each seller of Registrable Securities, without charge,
such number of conformed copies of such Registration Statement and of each
such amendment and supplement thereto (in each case, including all exhibits
and documents required to be filed therewith (other than those filed on a
confidential basis), except that the Company shall not be obligated to
furnish any seller of securities with more than two copies of such exhibits
and documents), such number of copies of the Prospectus included in such
Registration Statement (including each preliminary prospectus and any
summary prospectus) in conformity with the requirements of the Securities
Act, and such other documents, as such seller may reasonably request in
order to facilitate the disposition of the securities owned by such seller;
(e) use its reasonable best efforts (x) to register or qualify the
securities covered by such Registration Statement under such other
securities or blue sky laws of such jurisdictions as each seller shall
request, (y) to keep such registration or qualification in effect for so
long as such Registration Statement remains in effect and (z) to do any and
all other acts and things which may be necessary or advisable to enable
such seller to consummate the disposition in such jurisdictions of the
securities owned by such seller, except that the Company shall not for any
such purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified, subject
itself to taxation in any jurisdiction wherein it is not so subject, or
take any action which would subject it to general service of process in any
jurisdiction wherein it is not so subject;
12
<PAGE> 138
(f) in connection with a Public Offering only, use its reasonable best
efforts to furnish to each seller of Registrable Securities a signed
counterpart, addressed to the sellers, copies of:
(i) an opinion of counsel for the Company experienced in
securities law matters, dated the effective date of the, and
(ii) a "comfort" letter signed by the independent public
accountants who have issued an audit report on the Company's financial
statements included in the Registration Statement,
each covering substantially the same matters with respect to the
Registration Statement (and the Prospectus included therein) and, in the
case of such accountants' letter, with respect to events subsequent to the
date of such financial statements, as are customarily covered in opinions
of issuer's counsel and in accountants' letters delivered to the
underwriters in underwritten public offerings of securities;
(g) (i) notify each Holder of Registrable Securities subject to such
Registration Statement if such Registration Statement, at the time it or
any amendment thereto became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, upon
discovery by the Company of such material misstatement or omission, and, as
promptly as practicable, prepare and file with the SEC a post-effective
amendment to such Registration Statement and use its reasonable best
efforts to cause such post-effective amendment to become effective such
that such Registration Statement, as so amended, shall not contain an
untrue statement of material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and (ii) notify each Holder of Registrable Securities subject
to such Registration Statement, at any time when a Prospectus relating
thereto is required to be delivered under the Securities Act, if the
Prospectus included in such Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, upon discovery by the Company of such material
misstatement or omission or upon discovery by the Company of the happening
of any event as a result of which the Company believes there would be a
material misstatement or omission, and, as promptly as is practicable,
prepare and furnish to such Holder a reasonable number of copies of a
supplement to, or an amendment of, such Prospectus as may be necessary so
that, as thereafter delivered to
13
<PAGE> 139
purchasers of such securities as required under the Securities Act, such
Prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading;
(h) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
of the Company complying with the provisions of Section 11(a) of the
Securities Act and Rule 158 under the Securities Act;
(i) notify each Holder of any Registrable Securities covered by such
Registration Statement (i) when such Registration Statement, or any
post-effective amendment to such Registration Statement, shall have become
effective, or any amendment of or supplement to the Prospectus used in
connection therewith shall have been filed, (ii) of any request by the SEC
to amend such Registration Statement or to amend or supplement such
Prospectus or for additional information, (iii) of the issuance by the SEC
of any stop order suspending the effectiveness of such Registration
Statement or of any order preventing or suspending the use of any
preliminary prospectus or the initiation or threatening of any proceedings
for any of such purposes, and (iv) of the suspension of the qualification
of such securities for offering or sale in any jurisdiction, or of the
institution of any proceedings for any of such purposes;
(j) use its reasonable best efforts (i) (A) to list such securities on
any securities exchange on which the Common Stock is then listed or, if no
Common Stock is then listed, on an exchange selected by the Company, if
such listing is then permitted under the rules of such exchange or (B) if
such listing is not practicable or the Board determines that quotation as a
NASDAQ National Market System security is preferable, to secure designation
of such securities as a NASDAQ "national market system security" within the
meaning of Rule 11Aa2-1 under the Exchange Act and (ii) to provide and
cause to be maintained a transfer agent and registrar for such Registrable
Securities not later than the effective date of such registration
statement; and
(k) use its reasonable best efforts to obtain the lifting of any stop
order that might be issued suspending the effectiveness of such
Registration Statement or any order preventing or suspending the use of any
preliminary prospectus, provided that if the Company is unable to obtain
the lifting of any such stop order in connection with a registration
pursuant to Section 3.1(a), the request for
14
<PAGE> 140
registration shall not be deemed exercised for purposes of determining
whether such registration has been effected for purposes of Section 3.1(a)
or (d).
The Company may require each Holder of any Registrable Securities as
to which any registration is being effected to furnish to the Company such
information regarding such Holder and the distribution of such securities as the
Company may from time to time reasonably request in writing and as shall be
required by law or regulations of the SEC in connection therewith. Each such
Holder agrees to furnish promptly to the Company all information required to be
disclosed in order to make the information previously furnished to the Company
by such Holder not materially misleading.
The Company agrees not to file or make any amendment to any
Registration Statement with respect to any Registrable Securities, or any
amendment of or supplement to the Prospectus used in connection therewith, which
refers to any seller of any securities covered thereby by name, or otherwise
identifies such seller as the holder of any securities of the Company, without
the consent of such seller, such consent not to be unreasonably withheld, except
that no such consent shall be required for any disclosure that is required by
law or regulations of the SEC.
By the acquisition of Registrable Securities, each Holder shall be
deemed to have agreed that upon receipt of any notice from the Company pursuant
to Section 3.3(g), such Holder will promptly discontinue such Holder's
disposition of Registrable Securities pursuant to the Registration Statement
covering such Registrable Securities until such Holder shall have received, in
the case of clause (i) of Section 3.3(g), notice from the Company that such
Registration Statement has been amended, as contemplated by Section 3.3(g); or,
in the case of clause (ii) of Section 3.3(g), copies of the supplemented or
amended Prospectus contemplated by Section 3.3(g). If so directed by the
Company, each Holder will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies, in such Holder's possession of the
Prospectus covering such Registrable Securities at the time of receipt of such
notice. In the event that the Company shall give any such notice, the period
mentioned in Section 3.3(b) shall be extended by the number of days during the
period from and including the date of the giving of such notice to and including
the date when each seller of any Registrable Securities covered by such
Registration Statement shall have received the copies of the supplemented or
amended Prospectus contemplated by Section 3.3(g).
Although shares of Common Stock issuable upon the exercise of certain
options are included in the definition of Registrable Securities, the Company
shall, in respect of any such Registrable Securities requested to be registered
pursuant hereto, be required to include in any registration statement only
shares of Common Stock issuable upon exercise of such options and only if the
Company has received assurances,
15
<PAGE> 141
reasonably satisfactory to it, that such options will be exercised promptly
after such Registration Statement has become effective or the sale to an
underwriter has been consummated so that only Common Stock shall be distributed
to the public under such registration statement.
3.4 Underwritten Offerings. The provisions of this Section 3.4 do not
establish additional registration rights but instead set forth procedures
applicable, in addition to those set forth in Sections 3.1 through 3.3, to any
registration that is an underwritten offering.
(a) Underwritten Offerings Exclusive. Whenever a registration
requested pursuant to Section 3.1 is for an underwritten offering, only
securities that are to be distributed by the underwriters may be included in the
registration.
(b) Underwriting Agreement. If requested by the underwriters for any
underwritten offering by Holders pursuant to a registration requested under
Section 3.1, the Company shall enter into an underwriting agreement with such
underwriters for such offering, such agreement to be reasonably satisfactory in
substance and form to the Holders of a majority (by number of shares) of the
Registrable Securities to be covered by such registration and to the
underwriters and to contain such representations and warranties by the Company
and such other terms and provisions as are customarily contained in agreements
of this type, including, but not limited to, indemnities to the effect and to
the extent provided in Section 3.7, provisions for the delivery of officers'
certificates, opinions of counsel and accountants' "comfort" letters and
hold-back arrangements. The Holders of Registrable Securities to be distributed
by such underwriters shall be parties to such underwriting agreement and may, at
their option, require that any or all of the representations and warranties by,
and the agreements on the part of, the Company to and for the benefit of such
underwriters be made to and for the benefit of such Holders and that any or all
of the conditions precedent to the obligations of such underwriters under such
underwriting agreement shall also be conditions precedent to the obligations of
such Holders. If any condition to the obligations under such underwriting
agreement are not met or waived, and such failure to be met or waived is not
attributable to the fault of the Holders requesting a demand registration
pursuant to Section 3.1(a), such request for registration shall not be deemed
exercised for purposes of determining whether such registration has been
effected for purposes of Section 3.1. No such Holder shall be required by the
Company to make any representations or warranties to, or agreements with, the
Company or the underwriters other than as set forth in Sections 3.4(e) and
3.7(b), and representations, warranties or agreements regarding such Holder and
such Holder's intended method of distribution and any other representations
required by applicable law.
16
<PAGE> 142
(c) Selection of Underwriters. Whenever a registration requested
pursuant to Section 3.1(a) is for an underwritten offering, the Company shall
have the right to select one or more underwriters to administer the offering at
least one of which shall be an underwriter of nationally recognized standing
satisfactory to the Holders of a majority (by number of shares) of the
Registrable Securities to be included in such registration. If the Company at
any time proposes to register any of its securities under the Securities Act for
sale for its own account and such securities are to be distributed by or through
one or more underwriters, the Company shall have the right to select one or more
underwriters to administer the offering at least one of which shall be an
underwriter of nationally recognized standing.
(d) Incidental Underwritten Offerings. Subject to the provisions of
the proviso to the first sentence of Section 3.2, if the Company at any time
proposes to register any of its equity securities under the Securities Act
(other than pursuant to Section 3.1 or pursuant to a Special Registration),
whether or not for its own account, and such securities are to be distributed by
or through one or more underwriters, the Company will give prompt written notice
to all Holders of its intention to do so and, if requested by any Holder, will
use its reasonable best efforts to arrange for such underwriters to include the
Registrable Securities to be offered and sold by such holder among those to be
distributed by such underwriters. The Holders of Registrable Securities to be
distributed by such underwriters shall be parties to the underwriting agreement
between the Company and such underwriters and may, at their option, require that
any or all of the representations and warranties by, and the other agreements on
the part of, the Company to and for the benefit of such underwriters shall also
be made to and for the benefit of such Holders and that any or all of the
conditions precedent to the obligations of the underwriters under such
underwriting agreement shall also be conditions precedent to the obligations of
such Holders. No such Holder shall be required by the Company to make any
representations or warranties to, or agreements with, the Company or the
underwriters other than as set forth in Sections 3.4(e) and 3.7(b), and
representations, warranties or agreements regarding such Holder and such
Holder's intended method of distribution and any other representations required
by applicable law.
(e) Hold Back Agreements. If and whenever the Company proposes to
register any of its equity securities under the Securities Act, whether or not
for its own account (other than pursuant to a Special Registration), or is
required to use its reasonable best efforts to effect the registration of any
Registrable Securities under the Securities Act pursuant to Section 3.1 or 3.2,
each Holder, if required by the managing underwriter in an underwritten
offering, agrees by acquisition of such Registrable Securities not to effect
(other than pursuant to such registration) any public sale or distribution,
including, but not limited to, any sale pursuant to Rule 144 or Rule 144A, of
any Registrable Securities, any other equity securities of the Company or any
securities convertible into or exchangeable
17
<PAGE> 143
or exercisable for any equity securities of the Company for 180 days after, and
during the 20 days prior to, the effective date of such registration, to the
extent timely notified in writing by the Company or the managing underwriter,
and the Company agrees to cause each holder of any equity security, or of any
security convertible into or exchangeable or exercisable for any equity
security, of the Company purchased from the Company at any time other than in a
public offering to enter into a similar agreement with the Company. The Company
further agrees not to effect (other than pursuant to such registration or
pursuant to a Special Registration) any public sale or distribution, or to file
any Registration Statement (other than such registration or a Special
Registration) covering any, of its equity securities, or any securities
convertible into or exchangeable or exercisable for such securities, during the
20 days prior to, and for 180 days after, the effective date of such
registration if required by the managing underwriter.
3.5 Preparation; Reasonable Investigation. In connection with the
preparation and filing of each Registration Statement registering Registrable
Securities under the Securities Act, the Company shall give the Holders of such
Registrable Securities so to be registered and their underwriters, if any, and
their respective counsel and accountants, the reasonable opportunity to
participate in the preparation of such Registration Statement, each Prospectus
included therein or filed with the SEC, and each amendment thereof or supplement
thereto, and shall give each of them such access to all pertinent financial,
corporate and other documents and properties of the Company and its
Subsidiaries, and such opportunities to discuss the business of the Company with
its officers, directors, employees and the independent public accountants who
have issued audit reports on its financial statements as shall be necessary, in
the opinion of such Holders' and such underwriters' respective counsel, to
conduct a reasonable investigation within the meaning of the Securities Act.
3.6 Other Registrations. If and whenever the Company is required to
use its reasonable best efforts to effect the registration of any Registrable
Securities under the Securities Act pursuant to Section 3.1 or 3.2, and if such
registration shall not have been withdrawn or abandoned, the Company shall not
be obligated to and shall not file any Registration Statement with respect to
any of its securities (including Registrable Securities) under the Securities
Act (other than a Special Registration), whether of its own accord or at the
request or demand of any holder or holders of such securities, until a period of
180 days shall have elapsed from the effective date of such previous
registration, and the Company shall so provide in any registration rights
agreement with respect to any of its equity securities.
18
<PAGE> 144
3.7 Indemnification.
(a) Indemnification by the Company. In the event of any registration
of any Registrable Securities under the Securities Act pursuant to Section 3.1,
3.2 or 3.4(d), the Company shall indemnify and hold harmless the seller of such
securities, its directors, officers, and employees, each other person who
participates as an underwriter, broker or dealer in the offering or sale of such
securities and each other person, if any, who controls such seller or any such
participating person within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, against any and all losses, claims,
damages or liabilities, joint or several, to which such seller or any such
director, officer, employee, participating person or controlling person may
become subject under the Securities Act or otherwise (including, without
limitation, the reasonable fees of legal counsel incurred in connection with any
claim for indemnity hereunder), insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of or are
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement under which such securities were
registered under the Securities Act, any Prospectus or preliminary prospectus
included therein, or any amendment or supplement thereto, or (ii) any omission
or alleged omission to state a material fact required to be stated in any such
Registration Statement, Prospectus, preliminary prospectus, amendment or
supplement or necessary to make the statements therein not misleading; and the
Company shall reimburse such seller and each such director, officer, employee,
participating person and controlling person for any legal or any other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, liability, action or proceeding as such expenses are incurred;
provided that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or expense arises out of or is
based upon an untrue statement or omission made in any such Registration
Statement, Prospectus, preliminary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such seller or participating person expressly for use in the
preparation thereof and provided, further, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission in the Prospectus, if such untrue
statement or alleged untrue statement or omission or alleged omission is
completely corrected in an amendment or supplement to the Prospectus and the
seller of Registrable Securities thereafter fails to deliver such Prospectus as
so amended or supplemented prior to or concurrently with the sale of Registrable
Securities to the person asserting such loss, claim, damage, liability or
expense after the Company had furnished such seller with a sufficient number of
copies of the same or if the seller received notice from the Company of the
existence of such untrue statement or alleged untrue statement or omission or
alleged omission and the seller continued to dispose of Registrable Securities
prior to the time of the receipt of either (A) an amended
19
<PAGE> 145
or supplemented prospectus which completely corrected such untrue statement or
omission or (B) a notice from the Company that the use of the existing
Prospectus may be resumed. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such seller or any such
director, officer, employee, participating person or controlling person and
shall survive the transfer of such securities by such seller.
(b) Indemnification by the Sellers. In the event of any registration
of any Registrable Securities under the Securities Act pursuant to Section 3.1,
3.2 or 3.4(d), each of the prospective sellers of such securities, will
indemnify and hold harmless the Company, each director of the Company, each
officer of the Company who shall sign such Registration Statement, and each
other person, if any, who controls the Company or any such participating person
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, against any and all losses, claims, damages or liabilities, joint
or several, to which the Company or any such director, officer, employee,
participating person or controlling person may become subject under the
Securities Act or otherwise (including, without limitation, the reasonable fees
of legal counsel incurred in connection with any claim for indemnity hereunder),
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement under which such securities were registered under the
Securities Act, any Prospectus or preliminary prospectus included therein, or
any amendment or supplement thereto, or any omission or alleged omission to
state a material fact with respect to such seller required to be stated in any
such Registration Statement, Prospectus, preliminary prospectus, amendment or
supplement or necessary to make the statements therein not misleading if such
statement or omission was made in reliance upon and in conformity with written
information furnished to the Company by such seller expressly for use in the
preparation of any such Registration Statement, Prospectus, preliminary
prospectus, amendment or supplement; provided that the liability of each such
seller shall be in proportion to and limited to the net amount received by such
seller (after deducting any underwriting discount and expenses) from the sale of
Registrable Securities pursuant to such Registration Statement. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Company or any such director, officer, employee, participating
person or controlling person.
(c) Notices of Claims, etc. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding paragraphs of this Section 3.7, such
indemnified party shall, if such indemnified party is to seek indemnification in
respect thereof from an indemnifying party hereunder, give written notice to the
latter of the commencement of such action, provided that the failure of any
indemnified party to give notice as provided therein shall not relieve
20
<PAGE> 146
the indemnifying party of its obligations under the preceding paragraphs of this
Section 3.7 unless the failure to provide prompt written notice shall cause
actual prejudice to the indemnifying party. In case any such action is brought
against an indemnified party, the indemnifying party will be entitled to
participate therein and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof, provided that if such indemnified
party and the indemnifying party reasonably determine, based upon advice of
their respective independent counsel, that a conflict of interest may exist
between the indemnified party and the indemnifying party with respect to such
action and that it is advisable for such indemnified party to be represented by
separate counsel, such indemnified party may retain other counsel, reasonably
satisfactory to the indemnifying party, to represent such indemnified party, and
the indemnifying party shall pay all reasonable fees and expenses of such
counsel. No indemnifying party, in the defense of any such claim or litigation,
shall, except with the consent of such indemnified party, which consent shall
not be unreasonably withheld, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.
(d) Other Indemnification. Indemnification similar to that specified
in the preceding paragraphs of this Section 3.7 (with appropriate modifications)
shall be given by the Company and each seller of Registrable Securities with
respect to any required registration or other qualification of such Registrable
Securities under any federal or state law or regulation of governmental
authority other than the Securities Act.
(e) Other Remedies. If for any reason the foregoing indemnity is
unavailable, or is insufficient to hold harmless an indemnified party, other
than by reason of the exceptions provided therein, then the indemnifying party
and the indemnified party shall contribute to the amount paid or payable by the
indemnifying party as a result of such losses, claims, damages, liabilities or
expenses (i) in such proportion as is appropriate to reflect the relative fault
of the indemnifying party on the one hand and the indemnified party on the other
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, or provides a lesser sum to the indemnified party than the
amount hereinafter calculated, in such proportion as is appropriate to reflect
not only the relative fault of the indemnifying party on the one hand and the
indemnified party on the other but also the relative benefits received by the
indemnifying party and the indemnified party from the offering of Registrable
Securities (taking into account the portion of the proceeds of the offering
realized by each such party) as well as any other relevant equitable
considera-
21
<PAGE> 147
tions. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. Any party's
obligation to contribute pursuant to this Section 3.7(e) is several (in
proportion to the relative value of their Registrable Securities covered by a
Registration Statement) and not joint with the obligations of any other party.
No party shall be liable for contribution under this Section 3.7(e) except to
the extent and under such circumstances as such party would have been liable to
indemnify under this Section 3.7 if such indemnification were enforceable under
applicable law.
(f) Officers and Directors. As used in this Section 3.7, the terms
"officers" and "directors" shall include the partners of Holders which are
partnerships and the members of Holders which are limited liability companies.
4. Miscellaneous.
4.1 Rule 144; Legended Securities; etc. (a) If the Company shall have
filed a registration statement pursuant to Section 12 of the Exchange Act or a
registration statement pursuant to the Securities Act relating to any class of
equity securities (other than a registration statement pursuant to a Special
Registration), the Company shall file the reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
adopted by the SEC thereunder (or, if the Company is not required to file such
reports, it will, upon the request of any Holder of Registrable Securities, make
publicly available such information as necessary to permit sales pursuant to
Rule 144 or Rule 145), and shall take such further action as any Holder may
reasonably request, all to the extent required from time to time to enable such
Holder to sell shares of Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144 or
Rule 145. Upon the request of any Holder, the Company shall deliver to such
Holder a written statement as to whether it has complied with such requirements.
(b) The Company shall issue new certificates for Registrable
Securities without a legend restricting further transfer under the Securities
Act if (i) such securities have been sold to the public pursuant to an effective
Registration Statement under the Securities Act (other than Form S-8 if the
Holder of such Registrable Securities is an affiliate of the Company) or Rule
144, or (ii) (x) such issuance is otherwise permitted under the Securities Act,
(y) the Holder of such shares has delivered to the Company an opinion of
counsel, which opinion and counsel shall be reasonably satisfactory to the
Company, to such effect, and (z) the Holder of such shares expressly requests
the issuance of such certificates in writing.
22
<PAGE> 148
4.2 Amendments and Waivers. This Agreement may be amended, modified or
supplemented, and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, only if the Company shall
have obtained the written consent to such amendment, action or omission to act,
of NCP-SBG and the Holders of a majority of the Registrable Securities held by
the Continuing Stockholders. Notwithstanding the foregoing, a waiver or consent
to depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders whose securities are being sold pursuant to
a Registration Statement and that does not directly or indirectly affect,
impair, limit or compromise the rights of other Holders may be given by Holders
of at least a majority of the Registrable Securities being sold by such Holders
pursuant to such Registration Statement; provided, however, that the provisions
of this sentence may not be amended, modified or supplemented except in
accordance with the provisions of the immediately preceding sentence. No
amendment, modification or discharge of this Agreement, and no waiver hereunder,
shall be valid or binding unless set forth in writing. Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the party or parties granting
such waiver in any other respect or at any other time.
4.3 Beneficial Owners. For the purposes of this Agreement, the
"holder" or "owner" of any Registrable Securities that are Custody Shares shall
be the Beneficial Owner of such Custody Shares and Custody Shares shall be
deemed "held" or "owned" by the Beneficial Owner thereof. In the event that any
other Registrable Securities are held by a nominee for the beneficial owner
thereof, the beneficial owner thereof may, at its election and unless notice is
otherwise given to the Company by the record owner, be treated as the holder of
such Registrable Securities for purposes of any request or other action by any
Holder or Holders pursuant to this Agreement or any determination of any number
or percentage of shares of Registrable Securities held by any Holder or Holders
contemplated by this Agreement. If the beneficial owner of any Registrable
Securities so elects, the Company may require assurances reasonably satisfactory
to it of such owner's beneficial ownership of such Registrable Securities.
4.4 Successors, Assigns and Transferees. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns and transferees. In addition, and
whether or not any express assignment shall have been made, the provisions of
this Agreement which are for the benefit of the parties hereto other than the
Company shall also be for the benefit of and enforceable by any subsequent
holder of any Registrable Securities, subject to the provisions respecting the
minimum numbers or percentages of shares of Registrable Securities required in
order to be entitled to certain rights, or take certain actions, contained
herein.
23
<PAGE> 149
4.5 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed, certified or registered mail with postage prepaid, (c)
sent by next-day or overnight mail or delivery or (d) sent by fax, with a copy
sent by (a), (b), or (c) above, or telegram, as follows:
(i) if to the Company:
Saratoga Beverage Group, Inc.
11 Geyser Road
Saratoga Springs, NY 12366
Fax: (518) 584-0386
Tel: (518) 584-6363 X-11
Attention: Robin Prever
(ii) if to NCP-SBG or NCP-Cofund, to such Holder:
c/o North Castle Partners, L.L.C.
60 Arch Street
Greenwich, CT 06830
Fax: (203) 618-1860
Tel.: (203) 862-3200
Attention: Peter J. Shabecoff
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Fax: (212) 909-6836
Tel.: (212) 909-6486
Attention: Franci J. Blassberg, Esq.
(iii) if to any Continuing Shareholder, to such Continuing Shareholder
at the address set forth opposite such shareholder's name on the signature
pages hereto;
(iv) if to any Holder not a party to this Agreement, to the name and
address of such Holder in the stock record books of the Company;
24
<PAGE> 150
or, in each case, at such other address as may be specified in writing to the
other parties hereto.
All such notices, requests, demands, waivers and other communications
shall be deemed to have been received (w) if by personal delivery on the day
after such delivery, (x) if by certified or registered mail, on the seventh
business day after the mailing thereof, (y) if by next-day or overnight mail or
delivery, on the day delivered, (z) if by telecopy or telegram, on the next day
following the day on which such telecopy or telegram was sent, provided that a
copy is also sent by certified or registered mail.
4.6 No Inconsistent Agreements. The Company shall not hereafter enter
into any agreement, or amend any existing agreement, with respect to its
securities if such agreement would be inconsistent with the rights granted to
the Holders by this Agreement.
4.7 Remedies; Attorneys' Fees. Each Holder of Registrable Securities,
in addition to being entitled to exercise all rights provided herein or granted
by law, including recovery of damages, shall be entitled to specific performance
of its rights under this Agreement. The Company agrees that monetary damages
would not be adequate compensation for any loss incurred by reason of a breach
by it of any provision of this Agreement and hereby agrees to waive the defense
in any action for specific performance that a remedy at law would be adequate.
As between the parties to this Agreement, in any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the successful party shall be entitled to recover
reasonable attorney's fees in addition to its costs and expenses and any other
available remedy.
4.8 Stock Splits, etc. Each party hereto or beneficiary hereof agrees
that it will vote to effect a stock split (forward or reverse, as the case may
be) with respect to any Registrable Securities in connection with any
registration of such Registrable Securities hereunder, or otherwise, if the
managing underwriter shall advise the Company in writing (or, in connection with
an offering that is not underwritten, if an investment banker shall advise the
Company in writing) that in their or its opinion such a stock split would
facilitate or increase the likelihood of success of the offering. Each party
hereto agrees that any number of shares of Common Stock referred to in this
Agreement shall be equitably adjusted to reflect any stock split, stock
dividend, stock combination, recapitalization or similar transaction.
4.9 Severability. If any clause, provision or section of this
Agreement shall be invalid, illegal or unenforceable, the invalidity, illegality
or unenforceability of such clause, provision or section shall not affect the
enforceability or validity of any of the remaining clauses, provisions or
sections hereof to the extent permitted by applicable law.
25
<PAGE> 151
The invalidity of any one or more phrases, sentences, clauses, Sections or
subsections of this Agreement shall not affect the remaining portions of this
Agreement.
4.10 Headings. The headings contained in this Agreement are for
purposes of convenience only and shall not affect the meaning or interpretation
of this Agreement.
4.11 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which
together constitute one and the same instrument.
4.12 Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York,
without giving effect to its principles or rules of conflict of laws to the
extent that the application of the laws of any other jurisdiction would be
required thereby.
4.13 No Third Party Beneficiaries. Except as provided in Sections 3.7
and 4.4, nothing in this Agreement shall confer any rights upon any person or
entity other than the parties hereto, each such party's respective successors
and permitted assigns.
4.14 Consent to Jurisdiction. Each party irrevocably submits to the
personal exclusive jurisdiction of the United States District Court for the
Southern District of New York for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated hereby
(and, to the extent permitted under applicable rules of procedure, agrees not to
commence any action, suit or proceeding relating hereto except in such court).
Each party further agrees that service of any process, summons, notice or
document hand delivered or sent by registered mail to such party's respective
address set forth in Section 4.5 will be effective service of process for any
action, suit or proceeding in New York with respect to any matters to which it
has submitted to jurisdiction as set forth in the immediately preceding
sentence. Each party irrevocably and unconditionally waives any objection to the
laying of venue of any action, suit or proceeding arising out of this Agreement
or the transactions contemplated hereby in the United States District Court for
the Southern District of New York, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in such court that any
such action, suit or proceeding brought in such court has been brought in an
inconvenient forum.
4.15 Waiver of Jury Trial. EACH PARTY HERETO AND EACH PERSON CLAIMING
THE BENEFITS OF ANY PROVISION HEREOF HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
SUIT, ACTION OR
26
<PAGE> 152
PROCEEDING ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
4.16 Effectiveness. The effectiveness of this Agreement is conditioned
upon the occurrence of the Effective Time as contemplated by the
Recapitalization Agreement. If the Effective Time does not occur, or the
Recapitalization Agreement is terminated in accordance with its terms, this
Agreement shall be of no force or effect.
27
<PAGE> 153
IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement or caused this Agreement to be executed on its behalf as of the date
first written above.
SARATOGA BEVERAGE GROUP, INC.
By:
--------------------------------------------
Name:
Title:
NCP-SBG, L.P.
By: NCP-SBG, GP, L.L.C.,
its General Partner
By:
----------------------------------------
Name: Peter J. Shabecoff
Title: Executive Vice President
Address: 4301 North Ocean Blvd.
- ---------------------------- A-1703
ROBIN PREVER Boca Raton, FL 33431
Address: c/o Morgan Stanley Dean Witter
- ---------------------------- 340 Broadway
ANTHONY MALATINO Saratoga Springs, NY 12866
Address: 81 Dahlia Street
- ---------------------------- Staten Island, NY 10312
STEVEN BOGEN
[Signature page for Registration Rights Agreement]
<PAGE> 154
STEEL PARTNERS II, L.P. Address: c/o Steel Partners II, L.P.
150 East 52nd St. 21st Floor
By: STEEL PARTNERS, L.L.C., New York, NY 10022
its General Partner
By:
-----------------------------
Name: Warren Lichtenstein
Title: Managing Member
[Signature page for Registration Rights Agreement]
<PAGE> 155
Address: c/o Steel Partners II, L.P.
----------------------- 150 East 52nd St., 21st Floor
Warren G. Lichtenstein New York, NY 10022
<PAGE> 156
PERSHING SECURITIES LIMITED Address: Capstan House
#1 Clove Crescent
East India Dock
By: London E14 2BH
----------------------------- England
Name:
Title:
[Signature page for Registration Rights Agreement]
<PAGE> 157
Address: c/o Investa AG
- --------------------------------- Harestrasse 4
JURG WALKER Birsfelden, Switzerland 4127
[Signature page for Registration Rights Agreement]
<PAGE> 158
Exhibit E
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of January 5, 2000, by and between
SARATOGA BEVERAGE GROUP, INC., a Delaware corporation (the "Company"), and ROBIN
PREVER (the "Executive").
WHEREAS, the Executive has been employed by the Company since April
1992 and currently serves as President and Chief Executive Officer of the
Company pursuant to an employment agreement dated as of January 28, 1999 (the
"Prior Employment Agreement");
WHEREAS, NCP-SBG, L.P., a Delaware limited partnership, NCP-SBG
Recapitalization Corp., a Delaware corporation and the Company have entered into
a Stock Purchase Agreement and Agreement and Plan of Merger, dated as of the
date hereof (as the same may be amended from time to time, the "Merger
Agreement");
WHEREAS, it has been agreed between North Castle Partners, LLC ("NCP")
and the Executive that she will be the Chief Executive Officer of all
refrigerated beverage and water businesses acquired by Company, or NCP, their
respective affiliates, and subsidiaries; and such agreement was material to the
Executive entering into this Agreement; and
WHEREAS, the Company, desires that following the "Closing Date" (as
defined in the Merger Agreement) the Executive continue to serve as the Chief
Executive Officer and President of the Company, and the Executive desires to
continue such employment, upon the terms set forth in this agreement (the
"Agreement");
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the Company and
the Executive hereby agree as follows:
1. Employment. The Company hereby agrees to continue to employ the
Executive, and the Executive hereby accepts continued employment with the
Company, upon the terms and subject to the conditions set forth herein.
<PAGE> 159
2. Term. This Agreement shall become effective upon, and is
conditioned upon the occurrence of, the Commencement Date. Unless the
Executive's employment shall earlier terminate pursuant to Section 9, the
Company shall employ the Executive for a term commencing on the Closing Date
(the "Commencement Date") and ending on the third (3rd) anniversary of the
Commencement Date (the "Initial Term"). Effective upon the expiration of the
Initial Term, the Executive's employment shall automatically be extended, upon
the same terms and conditions, for an additional one year period (the
"Additional Term") unless, not later than six (6) months prior to the end of the
Initial Term, either party hereto shall have notified the other party hereto in
writing that such extension shall not take effect. The period during which the
Executive is employed pursuant to this Agreement is referred to as the
"Employment Period."
3. Position. During the Employment Period, the Executive shall serve
as Chief Executive Officer and President of the Company.
4. Duties and Reporting Relationship. (a) During the Employment
Period, the Executive shall use her skills and render services to the best of
her abilities in performing her duties hereunder. The Executive shall report to,
and be subject to supervision by, the Board of Directors of the Company (the
"Company Board"). The Executive shall devote substantially all of her business
time and attention to the business and affairs of the Company consistent with
her position with the Company. This Agreement shall not be construed as
preventing the Executive from engaging in charitable and community affairs,
giving attention to her outside investment interests or serving a member of the
board of directors of another entity, provided that such activities do not
interfere with the regular performance of her duties and responsibilities under
this Agreement.
(b) Executive has entered into this Agreement in part based upon the
agreement between the parties that the Executive shall, immediately upon
acquisition or as promptly as practicable, become the Chief Executive Officer
for any and all acquisitions made by NCP, the Company's immediate and ultimate
parent companies, or their respective affiliates, of businesses in the
refrigerated beverage and/or water business.
5. Compensation. (a) Base Salary. The Executive's base salary
("Salary") hereunder shall initially be $220,000 per calendar year, payable in
accordance with the Company's customary payroll practices, but in no event less
frequently than semi-monthly. Commencing on the first anniversary of this
Agreement, the Executive's Salary shall be reviewed by the Compensation
Committee of the Company Board (the "Compensation Committee") and may be
adjusted from time to time as the Compensation Committee, in its sole and
absolute discretion, shall determine; provided that, the Executive's Salary
shall not at any time be less than $220,000 per calendar year.
2
<PAGE> 160
(b) Annual Bonus. The Compensation Committee shall set goals on an
annual basis (by March 1 of each fiscal year for such fiscal year) for the
Executive's performance as an officer of the Company, and shall cause the
Company to pay to her an annual bonus in addition to the Salary based on the
achievement by the Executive of such goals; provided, however, that the
Executive shall receive a bonus with respect to the first year following the
Commencement Date of not less than 50% of her Salary. In the event that the
Executive's employment is terminated by the Company without Cause (as defined in
Section 9(b)) or by the Executive for Good Reason (as defined in Section 9(c)
excluding Section 9(c)(iv)), the Company shall pay to the Executive either (i)
if prior to the first anniversary of the Commencement Date, the target annual
bonus payable in respect of the fiscal year in which such termination of
employment occurs (but no less than 50% of her Salary); or (ii) if on or after
the first anniversary of the Commencement Date, the target annual bonus payable
in respect of the fiscal year in which such termination of employment occurs
(but no less than preceding year's annual bonus), provided that, if such
termination occurs within the first six months of such fiscal year, such payment
shall be prorated by the number of months of Executive's employment during such
period over the total number of months in such period; in either case such
amount shall be paid as soon as practicable, but in no event more than 30 days
following the Date of Termination.
(c) Initial Option Grant. The Executive shall be granted stock options
(the "Options") to purchase shares of the recapitalized common stock of the
Company, $.01 par value (the "Common Stock") that represent 2% of the Company's
full diluted equity as of the Commencement Date. The Options shall be
non-qualified stock options and shall be issued pursuant to, and in accordance
with, a stock incentive plan (the "Plan") to be adopted by the Company (a
summary of the terms of which has been previously delivered to the Executive) on
the Commencement Date which will be evidenced by one or more stock option
agreements to be entered into by the Executive and Company pursuant to the Plan
as finally adopted. Each Option shall be exercisable at a price equal to the
fair market value of the Common Stock of the Company on the date of grant. The
Options granted pursuant to this Section 5(c) shall vest in four equal portions
at the date of grant and on each of the first, second and third anniversaries
thereof, subject to the Executive's continued employment through the applicable
vesting date. The Executive's vested Options shall be exercisable for a period
of ten (10) years from the date of grant. Upon the termination of the
Executive's employment for Cause (as defined below) or other than for Good
Reason (as defined below), any unvested Options shall lapse. Upon the
termination of the Executive's employment pursuant to Section 9, the Executive
shall have one (1) year from the Date of Termination to exercise any vested
Options.
(d) Additional Option Grant. On the first anniversary of the
Commencement Date (or as soon thereafter as practicable), the Executive shall be
granted stock options to purchase shares of Common Stock that represent 1% of
the Company's fully diluted
3
<PAGE> 161
equity at the time of grant, and will be subject to the same vesting and other
provisions as the grant of Options described in the preceding paragraph.
6. Vacation, Holidays and Sick Leave. During the Employment Period,
the Executive shall be entitled to paid vacation, paid holidays and sick leave
in accordance with the Company's standard policies for its senior executive
officers, which policies shall provide the Executive with benefits no less
favorable than those provided to any other senior executive officer of the
Company. Such vacation may be taken, in the Executive's discretion, at such time
or times as are not inconsistent with the reasonable business needs of the
Company. The Executive shall also be entitled to all paid holidays given by the
Company to its senior executive officers.
7. Business Expenses. The Company recognizes that the Executive will
incur expenses in connection with her duties hereunder and the business of the
Company. The Company agrees to provide the Executive with a corporate American
Express Card in order to pay such expenses and to otherwise reimburse the
Executive for all such expenses paid or incurred by her (and/or, if requested by
the Executive, to advance the Executive amounts required to cover such expenses)
in connection with her employment upon timely submission by the Executive of
receipts and other documentation as required by the Internal Revenue Code and in
conformance with the Company's normal policies and procedures.
8. Pension and Welfare Benefits; Perquisites. During the Employment
Period, the Executive shall be eligible to participate fully in all health
benefits, insurance programs, pension and retirement plans and other employee
and compensation arrangements (collectively, the "Employee Benefits") available
to officers of the Company generally, which Employee Benefits shall provide the
Executive with benefits no less favorable than those provided to any other
senior executive officer of the Company. During the Employment Period, the
Company shall pay, on a monthly basis, the Executive an automobile allowance of
$750 per month or, at the option of the Executive, shall provide the Executive
with the use of an automobile. During the Employment Period, the Company shall
pay, or reimburse the Executive, as the case may be, for the cost of first class
air travel by the Executive in connection with her duties hereunder, provided
that, such air travel is longer than three hours. In addition, during the
Employment Period, the Company shall provide the Executive with such other
perquisites as the Company Board shall deem appropriate. Nothing contained
herein shall be deemed a waiver by Executive of, or diminish or modify, any
vested rights which Executive may have or may hereafter acquire under any
employee benefit plan of the Company.
4
<PAGE> 162
9. Termination of Employment. The Executive's employment hereunder may
be terminated without any breach of this Agreement only under the following
circumstances:
(a) Death or Disability. The Executive's employment hereunder shall
automatically terminate upon the death of the Executive. If, as a result of the
Executive's incapacity due to physical or mental illness, the Executive shall
have been absent from her duties with the Company for any six (6) consecutive
months or two hundred forty (240) days in any consecutive three hundred
sixty-five (365) day period, then the Company may terminate the Executive's
employment hereunder for "Disability."
(b) By the Company. The Company may terminate the Executive's
employment hereunder with or without Cause. For purposes of this Agreement,
"Cause" shall mean the Executive's conviction of a crime constituting a felony
involving fraud or dishonesty. Notwithstanding the foregoing, the Executive's
employment hereunder shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than 75% of the
directors constituting the Company Board (other than the Executive) (after
written notice to the Executive and a reasonable opportunity for the Executive,
together with the Executive's counsel, to be heard before the Company Board),
finding that the Executive should be terminated for Cause.
(c) Termination by the Executive. The Executive shall be entitled to
terminate her employment hereunder for Good Reason (as defined below) or any
other reason. For purposes of this Agreement, "Good Reason" shall mean, without
the Executive's express written consent, (i) the assignment to the Executive of
any duties inconsistent with, or any diminution of, the Executive's positions,
titles, offices, duties, responsibilities or status with the Company; (ii) the
relocation of the Company's principal executive offices to a location more than
fifty (50) miles from Saratoga Springs, New York or Boca Raton, Florida or the
Company's requiring the Executive to be based anywhere other than Saratoga
Springs, New York or Boca Raton, Florida, except for required travel on the
Company's business to an extent substantially consistent with the Executive's
present business travel obligations; (iii) the failure by the Company to pay on
a timely basis to the Executive any portion of the Executive's then current
compensation; (iv) if the Executive perceives in her sole judgment that there
has been a dimunition in her duties, authority, responsibilities, day to day
control, reporting responsibilities, employee relations, status, relationship
with the Company Board or NCP; or interference with the exercise of her business
judgment; or a substantial increase without her agreement, in her duties,
responsibilities, or reporting requirements; or (v) if there is a breach of the
provisions of Section 4(b) hereof; then, in each case after written notice
delivered by the Executive to the Company within 90 days of the occurrence of
such action setting forth in reasonable detail the specifics of such action or
actions giving rise to such Good Reason.
5
<PAGE> 163
(d) Notice of Termination. Any purported termination of the
Executive's employment by the Company or by the Executive shall be communicated
by written Notice of Termination to the other party hereto in accordance with
Section 18. "Notice of Termination" shall mean a notice that shall indicate the
specific termination provision in this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated.
(e) Date of Termination. "Date of Termination" shall mean if the
Executive's employment is terminated because of death, the date of the
Executive's death, if the Executive's employment is terminated for Disability,
the date Notice of Termination is given, if the Executive's employment is
terminated for Cause, the date of delivery to the Executive of the resolution of
the Company Board referenced in Section 9(b) or if the Executive's employment is
terminated pursuant to Section 9(c) hereof or for any other reason (other than
death or Disability), the date specified in the Notice of Termination (which, in
the case of a termination for Good Reason shall not be less than fifteen (15)
days nor more than sixty (60) days from the date such Notice of Termination is
given, except if pursuant to Section 9(c)(iv) then shall not be less than 60
days, and in the case of a termination for any other reason shall not be less
than thirty (30) days from the date such Notice of Termination is given.)
10. Compensation During Disability, Death or Upon Termination. (a)
During any period that the Executive fails to perform her duties hereunder as a
result of incapacity due to physical or mental illness ("Disability Period"),
the Executive shall continue to receive her full Salary at the rate then in
effect for such period until her employment is terminated pursuant to Section
9(a) hereof, provided that payments so made to the Executive during the
Disability Period shall be reduced by the sum of the amounts, if any, payable to
the Executive with respect to such period under disability benefit plans of the
Company or under the Social Security disability insurance program, and which
amounts were not previously applied to reduce any such payment.
(b) If the Executive's employment is terminated by her death or
Disability, the Company shall pay all amounts due to the Executive under Section
5 through the Date of Termination plus all other amounts to which she is
entitled under any compensation or benefit plan or program of the Company, in
each case in accordance with Section 8, if applicable, at the time such payments
are due and the Company shall have no further obligation to the Executive under
this Agreement.
(c) If the Executive's employment shall be terminated by the Company
for Cause or by the Executive for other than Good Reason, the Company shall pay
the Executive her
6
<PAGE> 164
full Salary through the Date of Termination at the rate in effect at the time
Notice of Termination is given plus all other amounts to which she is entitled
under any compensation or benefit plan or program of the Company, and the
Company shall have no further obligation to the Executive under this Agreement.
(d) If the Company shall terminate the Executive's employment other
than for Cause, or the Executive shall terminate her employment for Good Reason
(or death or Disability) then
(i) the Company shall pay the Executive her full Salary through the
Date of Termination at the rate in effect at the time Notice of Termination
is given plus all other unpaid amounts, if any, to which the Executive is
entitled as of the Date of Termination under any compensation or benefit
plan or program of the Company, at the time such payments are due;
(ii) subject to Section 11, the Company shall pay the Executive an
amount equal to the Executive's Salary equal to the lesser of (A) 24 months
and (B) the expiration of the term of this Agreement (but in no
circumstances less than 12 months) payable in substantially equal monthly
installments during the period commencing with the month immediately
following the month in which the Date of Termination occurs and ending 12
months thereafter. Notwithstanding the foregoing, if the Executive
terminates her employment pursuant to Section 9(c)(iv) hereof, the Company
shall pay the Executive an amount equal to the Executive's Salary for 12
months in substantially equal installments during the period commencing on
the month immediately following the month in which the Date of Termination
occurs and ending 12 months thereafter. If the Executive terminates her
employment pursuant to Section 9(c)(v) the Company shall pay the Executive
an amount equal to the Executive's Salary for 36 months in substantially
equal installments during the period commencing with the month immediately
following the month in which the Date of Termination occurs and ending 12
months thereafter;
(iii) the Executive shall be entitled to continue to receive her
health benefits for a period ending on the earlier of (x) 24 months or (y)
the expiration of the term of this Agreement but in no circumstances less
than 12 months; and
(iv) the balance of Executive's stock options granted pursuant to
Section 5(c) shall immediately vest on the Date of Termination and the
stock options granted pursuant Section 5(d) shall be deemed granted if they
have not already been so, and fully vested as of the Date of Termination.
7
<PAGE> 165
(e) The Executive shall not be required to mitigate the amount of any
payment provided for in this Section 10 by seeking other employment or
otherwise, and the amount of any payment or benefit provided for in this Section
10 shall not be reduced by any compensation earned by the Executive as the
result of employment by another employer or by retirement benefits or otherwise.
11. Release. In consideration of the payments to be made to the
Executive pursuant to Section 10(d)(ii) of this Agreement and as a condition to
the payment thereof, the Executive acknowledges that all such payments, if made
in accordance with the terms of this Agreement, shall constitute complete
satisfaction of all Salary obligations owed by the Company to the Executive. The
parties hereby agree that if this Section 11 becomes applicable they will
execute a mutually acceptable release to reflect the provisions of this Section.
12. Representations and Warranties. (a) The Company represents and
warrants that this Agreement has been authorized by all necessary corporate
action of the Company and is a valid and binding agreement of the Company
enforceable against it in accordance with its terms.
(b) The Executive represents and warrants that she is not a party to
any agreement or instrument which would prevent her from entering into or
performing her duties in any way under this Agreement.
13. Successors; Binding Agreement. (a) The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place.
(b) This Agreement is a personal contract and the rights and interests
of the Executive hereunder may not be sold, transferred, assigned, pledged,
encumbered, or hypothecated by her, except as otherwise expressly permitted by
the provisions of this Agreement. This Agreement shall inure to the benefit of
and be enforceable by the Executive and her personal or legal representatives,
executors, administrators, successors, heirs, distributees, devises and
legatees. If the Executive should die while any amount would still be payable to
her hereunder had the Executive continued to live, all such amounts, unless
otherwise proved herein, shall be paid in accordance with the terms of this
Agreement to her devisee, legatee or other designee or, if there is not such
designee, to her estate.
8
<PAGE> 166
14. Restrictive Covenants. (a) Executive acknowledges and agrees that
Executive has had and will have a prominent role in the management of the
business, and the development of the goodwill, of the Company and will establish
and develop relations and contacts with the principal customers and suppliers of
the Company in the United States of America, all of which constitute valuable
goodwill of, and could be used by Executive to compete unfairly with, the
Company and that (i) in the course of her employment with the Company, Executive
will obtain confidential and proprietary information and trade secrets
concerning the business and operations of the Company in the United States of
America and the rest of the world that could be used to compete unfairly with
the Company; (ii) the covenants and restrictions contained in this Section 14
are intended to protect the legitimate interests of the Company in their
respective goodwill, trade secrets and other confidential and proprietary
information; and (iii) Executive desires to be bound by such covenants and
restrictions.
(b) The Executive covenants and agrees that she will not any time
during and after the end of the Employment Period, directly or indirectly, use
for her own account, or disclose to any person, firm or corporation, other than
authorized officers, directors and employees of the Company or its subsidiaries,
Confidential Information (as hereinafter defined) of the Company, except (i)
while employed by the Company, in the business of and for the benefit of the
Company or (ii) when required to do so by a court of competent jurisdiction, by
any governmental agency having supervisory authority over the business of the
Company, or by any administrative body or legislative body (including a
committee thereof) with jurisdiction to order the Company to divulge, disclose
or make accessible such information. For purposes of this Agreement,
"Confidential Information" shall mean non-public information concerning the
Company's financial data, statistical data, strategic business plans, product
development (or other proprietary product data), customer, supplier, distributor
and bottler lists and other information, information relating to practices,
processes, methods, trade secrets, marketing plans and other non-public,
proprietary and confidential information of the Company; provided, however, that
Confidential Information shall not include any information which (x) is known
generally to the public other than as a result of unauthorized disclosure by the
Executive, (y) becomes available to the Executive on a non-confidential basis
from a source other than the Company or (z) was available to the Executive on a
non-confidential basis prior to its disclosure to the Executive by the Company,
whether such disclosure by the Company was before or after the date of this
Agreement. It is specifically understood and agreed by the Executive that any
Confidential Information received by the Executive during her employment by the
Company is deemed Confidential Information for purposes of this Agreement. In
the event that the Executive's employment is terminated hereunder for any
reason, she immediately shall return to the Company all Confidential Information
in her possession.
9
<PAGE> 167
(c) The Executive covenants and agrees that during the Employment
Period and for a period of three (3) years following the Date of Termination,
the Executive shall not, directly or indirectly, own any interest in, operate,
join, control or participate as a partner, director, principal, officer, or
agent of, enter into the employment of, act as a consultant to, or perform any
services for any entity which has material operations which compete with any
refrigerated beverage and water business in which the Company or its immediate
affiliates is engaged, or in which any of the foregoing has documented plans to
become engaged of which Executive has knowledge at the time of the Executive's
termination of employment. Notwithstanding the foregoing, the Executive may be
employed by, or provide services to, an investment banking firm or consulting
firm that provides services to entities described in the previous sentence,
provided that the Executive does not personally represent or provide services to
such entities. Notwithstanding anything herein to the contrary, this Section 14
shall not prevent the Executive from acquiring as an investment securities
representing not more than five percent (5%) of the outstanding voting
securities of any publicly-held corporation.
(d) The Executive and the Company agree that the covenant of
non-competition is a reasonable covenant under the circumstances, and further
agree that if, in the opinion of any court of competent jurisdiction such
covenants are not reasonable in any respect, such court shall have the right,
power and authority to excise or modify such provision or provisions of these
covenants as to the court shall appear not reasonable and to enforce the
remainder of these covenants as so amended.
(e) The Executive covenants and agrees that during the Employment
Period and for a period of three (3) years following the Date of Termination,
the Executive shall not directly or indirectly engage in any conduct or make any
statement, whether in commercial or noncommercial speech, disparaging or
criticizing in any way the Company or any subsidiary or affiliate thereof, or
any products or services offered by any of these, or engage in any other conduct
or make any other statement that could be reasonably expected to impair the
goodwill of the Company or any subsidiary or affiliate thereof, the reputation
of the products of the Company or any subsidiary or affiliate thereof or the
marketing of such products, in each case except to the extent required by law,
and then only after consultation with the Company to the extent possible.
(f) The Executive acknowledges and agrees that a breach of the
covenants contained in this Section 14 may cause irreparable injury to the
Company for which adequate remedies are not available at law. Accordingly, the
Executive agrees that the Company, in addition to pursuing any other remedies it
may have in law or in equity, may seek to obtain an injunction against the
Executive from any court having jurisdiction over the matter, restraining any
further violation of this Section 14.
10
<PAGE> 168
15. Entire Agreement. This Agreement contains all the understandings
between the parties hereto pertaining to the matters referred to herein, and
supersedes all undertakings and agreements (including the Prior Employment
Agreement), whether oral or in writing, previously entered into by them with
respect thereto. The Executive represents that, in executing this Agreement, she
does not rely and has not relied upon any representation or statement not set
forth herein made by the Company with regard to the subject matter, bases or
effect of this Agreement or otherwise.
16. Amendment or Modification, Waiver. No provision of this Agreement
may be amended or waived unless such amendment or waiver is agreed to in
writing, signed by the Executive and by a duly authorized officer of the
Company. The Executive's or the Company's failure to insist upon strict
compliance with any provision of, or to assert any right under, this Agreement
shall not be deemed to be a waiver of such provision or right or of any other
provisions of or right under this Agreement.
17. Indemnification; Legal Fees. The Company shall indemnify the
Executive and hold her harmless from any cost, expense or liability arising out
of or relating to any acts, failure to act, or any decisions made by her, in the
course of performing services hereunder, within the scope of her employment
hereunder, in accordance with the Company's charter and by-laws including, but
not limited to, any criminal action or proceeding provided that she had no
reasonable cause to believe her conduct was unlawful. Except as provided for the
next sentence, the Company shall bear, or reimburse the Executive for, all
reasonable legal fees, expenses, costs, judgments, fines, penalties, and amounts
paid in settlement incurred by her in connection with entering into this
Agreement. If either party institutes any action or proceedings to enforce any
rights the party has under this Agreement or for any other judicial remedy, the
prevailing party shall be entitled to reimbursement from the other party for its
costs and expenses incurred thereby, including but not limited to, reasonable
attorneys' fees and disbursements.
18. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been given if delivered personally or
sent by facsimile transmission, overnight courier, or certified, registered or
express mail, postage prepaid. Any such notice shall be deemed given when so
delivered personally or sent by facsimile transmission (provided that a
confirmation copy is sent by overnight courier), one day after deposit with an
overnight courier, or if mailed, five (5) days after the date of deposit in the
United States mails, as follows:
If to the Company, to:
Saratoga Beverage Group, Inc.
11 Geyser Road
11
<PAGE> 169
Saratoga Springs, NY 12866
Attn: Chief Operating Officer
Telephone: (518) 584-6363
Fax: (518) 584-0380
with copies to:
North Castle Partners, L.L.C.
60 Arch Street
Greenwich, CT 06830
Telecopy: (203) 618-1860
Telephone: (203) 862-3200
Attention: Peter J. Shabecoff
and
Debevoise & Plimpton
875 Third Avenue
New York, NY 10022
Telecopy: (212) 909-6836
Telephone: (212) 909-6000
Attention: Franci J. Blassberg, Esq.
If to the Executive, to:
Robin Prever
c/o Saratoga Beverage Group, Inc.
1000 American Superior Blvd.
Winter Haven, FL 33884
Telephone: (941) 299-6915
Fax: (941) 299-6713
with a copy to:
Diane J. Geller, Esq.
Ruden, McClosky, Smith, Schuster & Russell, P.A.
200 E. Broward Blvd.
Ft. Lauderdale, FL. 33301
Fax: (954) 764-4996
Tel: (954) 527-2424
12
<PAGE> 170
Any notice delivered personally or by courier under this Section 18
shall be deemed given on the date delivered and any notice sent by telecopy or
registered or certified in postage prepaid, return receipt requested, shall be
deemed given on the date telecopied or mailed.
19. Condition Precedent. This Agreement shall be of no force and
effect if the Merger (as defined in the Merger Agreement) does not become
effective and shall automatically expire if the Merger Agreement is terminated.
20. Severability. If any court of competent jurisdiction shall at any
time determine that, but for the provisions of this paragraph, any part of this
Agreement is illegal, void as against public policy or otherwise unenforceable,
the relevant part will automatically be amended to the extent necessary to make
it sufficiently narrow in scope, time and geographic area to be legally
enforceable. All other terms will remain in full force and effect. Further, if
the Executive raises any question as to the enforceability of any part of the
terms of this Agreement, including, without limitation, the covenants contained
in Section 14, the Executive specifically agrees that she will comply fully with
this Agreement unless and until the entry of an award to the contrary.
21. Survivorship. The respective rights and obligations of the
parties hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
22. Governing Law; Submission to Jurisdiction. THIS AGREEMENT SHALL BE
GOVERNED IN ALL RESPECTS, INCLUDING AS TO VALIDITY, INTERPRETATION AND EFFECT,
BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS RULES THEREOF TO THE EXTENT THAT THE APPLICATION OF THE LAW OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. EACH PARTY HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE
FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE COUNTY OF NEW YORK
SOLELY IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF
THIS AGREEMENT AND OF THE DOCUMENTS REFERRED TO IN THIS AGREEMENT, AND IN
RESPECT OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY. EACH PARTY HEREBY
WAIVES AND AGREES NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING
FOR THE INTERPRETATION AND ENFORCEMENT HEREOF, OR ANY SUCH DOCUMENT OR IN
RESPECT OF ANY SUCH TRANSACTION, THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE
BROUGHT OR IS NOT MAINTAINABLE IN SUCH COURTS OR THAT THE VENUE THEREOF MAY
13
<PAGE> 171
NOT BE APPROPRIATE OR THAT THIS AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE
ENFORCED IN OR BY SUCH COURTS. EACH PARTY HEREBY CONSENTS TO AND GRANTS ANY SUCH
COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER
OF ANY SUCH DISPUTE AND AGREE THAT THE MAILING OF PROCESS OR OTHER PAPERS IN
CONNECTION WITH ANY SUCH ACTION OR PROCEEDING IN THE MANNER PROVIDED IN SECTION
18 OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID AND
SUFFICIENT SERVICE THEREOF.
23. Arbitration. Any dispute, controversy, or question arising under,
out of, or relating to this Agreement (or the breach thereof) or, Executive's
employment with the Company or termination thereof, shall be referred for
arbitration to be held in Albany, New York (or such other place as the parties
and the arbitrator shall agree) to a neutral arbitrator selected by the
Executive and the Company and this shall be the exclusive and sole means for
resolving such dispute (other than for injunctive relief under this Agreement).
The arbitration shall be conducted in accordance with the Employment Arbitration
Rules (the "Rules") of the American Arbitration Association (the "AAA") in
effect at the time of the arbitration, except that the arbitrator shall be
selected by alternatively striking from a list of five arbitrators supplied by
the AAA, and the decision of the arbitrator shall be governed by the rule of
law. Such right to submit a dispute arising hereunder to arbitration and the
decision of the neutral arbitrator shall be final, conclusive and binding on all
parties and interested persons and no action at law or in equity shall be
instituted or, if instituted, further prosecuted by either party other than to
enforce the award of the neutral arbitrator. The arbitrator shall take
submissions and hear testimony, if necessary, and shall render a written
decision as promptly as possible. The arbitrator may require discovery for good
cause shown. Each party shall bear its own costs and expenses incurred in
connection with any such arbitration; provided that the arbitrator shall be
entitled to award to the prevailing party reimbursement of its reasonable legal
costs and expenses (including with respect to the arbitrator and the AAA).
24. Headings. All descriptive headings of sections and paragraphs in
this Agreement are intended solely for convenience, and no provision of this
Agreement is to be construed by reference to the heading of any section or
paragraph.
25. Withholdings. All payments to the Executive under this Agreement
shall be reduced by all applicable withholding required by federal, state or
local law.
26. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
14
<PAGE> 172
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first set forth above.
ROBIN PREVER
-----------------------------------------
Robin Prever
SARATOGA BEVERAGE GROUP, INC.
By:
---------------------------
Name:
Title
15
<PAGE> 173
Exhibit F
CONSULTING AGREEMENT
This CONSULTING AGREEMENT, dated as of January 5, 2000 (the
"Agreement"), by and between Saratoga Beverage Group, Inc., a Delaware
corporation (the "Company"), and North Castle Partners, L.L.C. ("North Castle"),
W I T N E S S E T H:
WHEREAS, the Company, NCP-SBG, L.P. ("NCP-SBG") and NCP-SBG
Recapitalization Corp. have entered into a Stock Purchase Agreement and
Agreement and Plan of Merger, dated as of the date hereof (the "Recapitalization
Agreement"), pursuant to which NCP-SBG Recapitalization Corp. shall merge with
and into the Company (the "Merger"), and NCP-SBG will, subject to the terms and
conditions contained in the Recapitalization Agreement, purchase shares of
common stock, par value $0.01 per share, of the Company (the "Stock Purchase");
WHEREAS, immediately following the Merger and Stock Purchase, NCP-SBG
will be the largest stockholder of the Company and NCP-Cofund, L.P. (the
"NCP-Cofund") will be a stockholder of the Company;
WHEREAS, the general partner of NCP-SBG is NCP-SBG GP, L.L.C.
("NCP-SBG GP"), the sole member of NCP-SBG GP is North Castle Partners II, L.P.
(the "North Castle Fund"), the North Castle Fund is managed by North Castle, the
general partner of the North Castle Fund is NCP GP II, L.P. ("NCP-GP II"), the
general partner of NCP GP II is North Castle GP II, L.L.C. ("NCP-GP LLC") and
the general partner of the NCP-Cofund is NCP Co-Investment GP, LLC
("Co-Investment GP");
WHEREAS, the Company and North Castle are entering into this Agreement
pursuant to the Recapitalization Agreement;
WHEREAS, in connection with the Merger, the Company will prepare and
file with the Securities and Exchange Commission (the "Commission") a Schedule
13E-3 (as the same may be amended from time to time, the "13E-3");
WHEREAS, in connection with the solicitation by the Company of proxies
of its stockholders to vote in favor of the Merger, the Company will prepare and
file with the Commission a proxy statement on Schedule 14A (as the same may be
amended from time to time, the "Proxy Statement");
<PAGE> 174
WHEREAS, in order to finance the transactions contemplated by the
Recapitalization Agreement, refinance existing debt and provide liquidity for
ongoing business needs, the Company (a) will enter into a new credit agreement
(the "Credit Agreement Financing"), and (b) will offer and sell senior
subordinated notes (the "Senior Subordinated Notes") in a private placement
offering to institutional investors (the "Senior Subordinated Note Offering",
and together with the Credit Agreement Financing, the "Financing");
WHEREAS, North Castle has performed for NCP-SBG Recapitalization
Corp., which will at the Effective Time (as defined in the Recapitalization
Agreement) be merged with and into the Company, with the Company as the
surviving corporation and will perform financial, management advisory and other
services (all of such services the "Transaction Services") for the Company in
connection with the Merger and the Stock Purchase, including but not limited to
services in connection with (i) the retention of various financial and other
advisors and consultants in connection with the Merger and the Stock Purchase,
(ii) the preparation, negotiation, execution and delivery of the commitment, fee
and engagement letters, registration rights and purchase agreement, credit
agreements, guarantees, mortgages, pledge agreements and other security
agreements, and other agreements, instruments and documents, relating to the
Financing, (iii) the preparation and circulation of an information memorandum
and other materials in connection with the Financing, (iv) the preparation,
filing and circulation of the Proxy Statement and 13E-3 and related materials to
the stockholders of the Company, and (v) the structuring, implementation and
consummation of the foregoing transactions;
WHEREAS, the Company and its Affiliates from time to time in the
future (a) may offer and sell or cause to be offered and sold equity or debt
securities (such offerings, collectively, the "Subsequent Offerings"), including
without limitation (i) offerings of shares of common stock and/or options to
purchase such shares to employees, directors, managers and consultants of and to
the Company ("Management Offerings"), and (ii) offerings of debt securities to
refinance any indebtedness of the Company and its Affiliates or for other
corporate purposes, and (b) may repurchase, redeem or otherwise acquire
securities of the Company and its Affiliates (any such repurchase or redemption
being referred to herein as a "Redemption");
WHEREAS, the Company desires to receive financial and managerial
advisory services from North Castle, and North Castle desires to provide such
services to the Company;
WHEREAS, the parties hereto recognize that claims might be made
against and liabilities incurred by North Castle, NCP-SBG, NCP-SBG GP, the North
Castle Fund,
2
<PAGE> 175
NCP-Cofund, NCP GP II, NCP GP LLC, Co-Investment GP or related persons or
Affiliates, under applicable securities laws or otherwise, in connection with
the Merger, the Stock Purchase or any Securities Offerings, or relating to other
actions or omissions of or by the Company, or relating to the provision by North
Castle of services to the Company and its Affiliates, and the parties hereto
accordingly wish to provide for North Castle, NCP-SBG, NCP-SBG GP, the North
Castle Fund, NCP-Cofund, NCP GP II, NCP GP LLC, Co-Investment GP and related
persons and Affiliates to be indemnified in respect of any such claims and
liabilities; and
WHEREAS, the parties hereto recognize that claims might be made
against and liabilities incurred by directors and officers of the Company and
its subsidiaries in connection with their acting in such capacity, and
accordingly wish to provide for such directors and officers to be indemnified to
the fullest extent permitted by law in respect of any such claims and
liabilities;
NOW, THEREFORE, in consideration of the premises and the respective
agreements hereinafter set forth and the mutual benefits to be derived herefrom,
the parties hereto hereby agree as follows:
1. Definitions.
"13E-3" shall have the meaning set forth in the fifth recital.
"Agreement" shall have the meaning set forth in the preamble.
"Affiliate" of a Person means a Person that directly or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first Person, and with respect to a natural person
shall include any child, stepchild, grandchild, parent, stepparent, spouse,
sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law, and shall include adoptive relationships.
"Control" (including the terms "controlled by" and "under common control with")
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management policies of a Person, whether through the
ownership of voting securities, by contract or credit arrangement, as trustee or
executor, or otherwise.
Change of Control: means, with respect to the Company, the first to
occur after the Effective Time of the following events:
(1) the acquisition by any person, entity or group (as
defined in section 13(d) of the Exchange Act) (other than (w) the Company
and
3
<PAGE> 176
its subsidiaries, (x) any employee benefit plan of the Company or its
subsidiaries or (y) North Castle or any Affiliate or partner thereof),
through one transaction or a series of transactions of 50% or more of the
combined voting power of the then outstanding voting securities of the
Company;
(2) the merger or consolidation of the Company as a result of which
persons who were stockholders of the Company immediately prior to such
merger or consolidation, do not, immediately thereafter, own, directly or
indirectly, more than 50% of the combined voting power entitled to vote
generally in the election of directors of the merged or consolidated
company;
(3) the liquidation or dissolution of the Company (other than (x) a
dissolution occurring upon a merger or consolidation thereof (y) a
liquidation of the Company into its subsidiary or (z) a liquidation or
dissolution that is incident to a reorganization); and
(4) the sale, transfer or other disposition of all or substantially
all of the assets of the Company through one transaction or a series of
related transactions to one or more persons or entities that are not,
immediately prior to such sale, transfer or other disposition, Affiliates
of North Castle.
"Claim" means, with respect to any Indemnitee, any claim against such
Indemnitee involving any Obligation with respect to which such Indemnitee may be
entitled to be defended and indemnified by the Company under this Agreement.
"Co-Investment GP" shall have the meaning set forth in the third
recital.
"Commission" shall have the meaning set forth in the fifth recital.
"Company" shall have the meaning set forth in the preamble.
"Continuing Services" shall have the meaning set forth in Section
3(a).
"Continuing Services Fee" shall have the meaning set forth in Section
4(b).
"Designated Director" shall have the meaning set forth in Section
4(b).
"Expenses" shall have the meaning set forth in Section 4(c).
4
<PAGE> 177
"Financing" shall have the meaning set forth in the fifth recital.
"Indemnitee" means each of North Castle, NCP-SBG, NCP-SBG GP, the
North Castle Fund, the NCP-Cofund, NCP GP II, NCP GP LLC, Co-Investment GP,
their respective successors and assigns, and each of their respective directors,
officers, partners, members, managers, employees, agents, advisors,
representatives and controlling persons (within the meaning of the Securities
Act).
"Information" shall have the meaning set forth in Section 3(b).
"Management Offerings" shall have the meaning set forth in the ninth
recital.
"Merger" shall have the meaning as set forth in the first recital.
"NCP-SBG" shall have the meaning set forth in the first recital.
"NCP-SBG GP" shall have the meaning set forth in the third recital.
"NCP-Cofund" shall have the meaning set forth in the second recital.
"NCP-GP II" shall have the meaning set forth in the third recital.
"NCP-GP LLC" shall have the meaning set forth in the third recital.
"North Castle" shall have the meaning set forth in the preamble.
"North Castle Fund" shall have the meaning set forth in the third
recital.
"Notice of Claim" shall have the meaning set forth in Section 9(a).
"Notice of Payment" shall have the meaning set forth in Section 9(c).
"Obligations" means, collectively, any and all claims, obligations,
liabilities, causes of actions, actions, suits, proceedings, investigations,
judgments, decrees, losses, damages, fees, costs and expenses (including without
limitation interest, penalties and fees and disbursements of attorneys,
accountants, investment bankers and other professional advisors), in each case
whether incurred, arising or existing with respect to third parties or otherwise
at any time or from time to time.
5
<PAGE> 178
"Person" means any individual, partnership, joint venture,
corporation, limited liability company, trust, or unincorporated organization.
"Proxy Statement" shall have the meaning set forth in the sixth
recital.
"Recapitalization Agreement" shall have the meaning set forth in the
first recital.
"Related Document" means the Recapitalization Agreement, the Proxy
Statement, the 13E-3 and any other agreement, certificate, instrument or other
document to which the Company or any subsidiary thereof may be a party or by
which it or any of its properties or assets may be bound or affected from time
to time relating in any way to the Merger, Stock Purchase, Financing, any
Securities Offering or any of the transactions contemplated thereby.
"Redemption" shall have the meaning set forth in the ninth recital.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Offerings" means any Redemption, any Management Offering
and any other Subsequent Offering.
"Senior Subordinated Notes" shall have the meaning set forth in the
seventh recital.
"Senior Subordinated Note Offering" shall have the meaning set forth
in the seventh recital.
"Subsequent Offerings" shall have the meaning set forth in the ninth
recital.
"Stock Purchase" shall have the meaning set forth in the first
recital.
"Transaction Services" shall have the meaning set forth in the eighth
recital.
2. Engagement. The Company hereby engages North Castle as a
consultant, and North Castle hereby agrees to provide financial and managerial
advisory services to the Company, all on the terms and subject to the conditions
set forth below.
3. Services, etc. (a) North Castle hereby agrees during the term of
this Agreement to assist, advise and consult with the Board of Directors and
management
6
<PAGE> 179
of the Company in such manner and on such business, management and
financial matters, and provide such other financial and other advisory services
(collectively, the "Continuing Services"), as may be reasonably requested from
time to time by the Board of Directors of the Company, including but not limited
to assistance, advice or consultation in:
(i) establishing and maintaining banking, legal and other business
relationships for the Company;
(ii) developing and implementing corporate and business strategy and
planning for the Company, including plans and programs for improving
operating, marketing and financial performance, budgeting of future
corporate investments, acquisition and divestiture strategies, and
reorganizational programs;
(iii) arranging future debt and equity financings and refinancings;
and
(iv) providing professional employees to serve as directors or
officers of the Company.
(b) The Company will furnish North Castle with such information as
North Castle reasonably believes appropriate to its engagement hereunder (all
such information so furnished being referred to herein as the "Information").
The Company recognizes and confirms that (i) North Castle will use and rely
primarily on the Information and on information available from generally
recognized public sources in performing the services to be performed hereunder
and (ii) North Castle does not assume responsibility for the accuracy or
completeness of the Information and such other information.
4. Compensation; Expenses. (a) The Company agrees to pay to North
Castle at the Effective Time (as defined under the Recapitalization Agreement)
$1,150,000 as compensation for the Transaction Services.
(b) The Company agrees to pay to North Castle, as compensation for
the Continuing Services rendered and to be rendered by North Castle hereunder,
an annual fee (the "Continuing Services Fee"), equal to $550,000 payable
quarterly in advance on each March 31, June 30, September 30 and December 31
during the term of this Agreement. Such Continuing Services Fee shall be
increased up to a maximum of 2% of the aggregate equity investment in the
Company of NCP-SBG and its Affiliated coinvestors from time to time, provided
that in no event shall such Continuing Service Fee exceed $1.25 million per
annum and provided further that the Continuing Service Fee may not be decreased
without the prior written consent of North Castle. In addition, in
7
<PAGE> 180
connection with any acquisition of any business or company by the Company or any
of its subsidiaries or disposition of the Company, whether by way of asset or
stock purchase, merger, consolidation, recapitalization or other similar
transaction, the Company shall pay to North Castle a transaction fee equal to 2%
of the enterprise value of the acquired company or business or the Company, as
the case may be. If any employee of North Castle shall be elected to serve on
the Board of Directors or as an officer of the Company (a "Designated
Director"), in consideration of the Continuing Services Fee being paid to North
Castle, North Castle shall cause such Designated Director to waive any and all
fees and other compensation (including stock options) to which such director or
officer would otherwise be entitled as a director or officer for any period for
which the Continuing Services Fee or any installment thereof is paid and for
which such Designated Director continues to be employed by North Castle.
(c) The Company agrees to reimburse North Castle for such travel and
other reasonable out-of-pocket expenses ("Expenses") incurred by North Castle
and its employees, agents and advisors in the course or on account of rendering
of the Continuing Services, including but not limited to any reasonable fees and
expenses of legal, accounting, consulting or other professional advisors to
North Castle engaged in connection with the Continuing Services and any
reasonable expenses incurred by any Designated Director in connection with the
performance of his duties as a director or officer of the Company or any
subsidiary thereof. North Castle shall submit monthly expense statements, which
shall be payable within thirty days from the date of such submission.
5. Term, etc. (a) This Agreement shall be effective as of the
Effective Time (as defined in the Recapitalization Agreement) and shall remain
in effect until, and shall terminate upon, the earlier to occur of (x) the tenth
anniversary of the date hereof and (y) the date on which a Change of Control
occurs. North Castle may terminate this Agreement at any time on 30 days' prior
notice to the Company. The provisions of this Agreement shall survive any
termination of this Agreement, except for the provisions of Sections 2, 3 and 4.
The effectiveness of this Agreement is conditioned upon the occurrence of the
Effective Time as contemplated by the Recapitalization Agreement. If the
Effective Time does not occur, or the Recapitalization Agreement terminates by
its terms, this Agreement shall be of no force or effect.
(b) Except as provided under Section 5(a) in the case of a Change of
Control, upon any consolidation or merger, or any conveyance, transfer or lease
of all or substantially all of the assets of the Company, the successor
corporation formed by such consolidation or into which the Company is merged or
to which such conveyance, transfer or lease is made, shall succeed to, and be
substituted for, the Company under this Agreement with the same effect as if
such successor corporation had been a party thereto.
8
<PAGE> 181
Except as provided under Section 5(a) in the case of a Change of Control, no
such consolidation, merger or conveyance, transfer or lease of all or
substantially all of the assets of the Company shall have the effect of
terminating this Agreement or of releasing the Company or any such successor
corporation from its obligations hereunder.
(c) Upon any termination of this Agreement, (i) any prepaid
installment of the Continuing Services Fee or portion thereof (pro rated, with
respect to the quarter in which such termination occurs, for the portion of such
quarter following such termination), shall be immediately refunded to the
Company, net of any of the amounts described in Clause (ii) of this Section
5(c), and (ii) any unpaid and unreimbursed Expenses that shall have been
incurred prior to such termination (whether or not such Expenses shall than have
become payable), shall be immediately paid or reimbursed, as the case may be, by
the Company. In the event of the liquidation of the Company, all amounts due
North Castle hereunder shall be paid to North Castle before any liquidating
distributions or similar payments are made to stockholders of the Company.
6. Independent Contractor Status. The parties agree that North
Castle shall perform services hereunder as an independent contractor, retaining
control over and responsibility for its own operations and personnel. Neither
North Castle nor any of its employees or agents shall, solely by virtue of this
Agreement or the arrangements hereunder, be considered employees or agents of
the Company nor shall any of them have authority to contract in the name of or
bind the Company, except (a) to the extent that any professional employee of
North Castle may be serving as a director or officer of the Company pursuant to
Section 3(a)(iv) hereof or (b) as expressly agreed to in writing by the Company.
7. Indemnification. The Company agrees to indemnify, defend and hold
harmless each Indemnitee:
(a) from and against any and all Obligations, except to the extent
that any such Obligation is found in a final judgment by a court of
competent jurisdiction to have resulted from the gross negligence or
intentional misconduct of an Indemnitee, whether incurred with respect to
third parties or otherwise, in any way resulting from, arising out of or in
connection with, based upon or relating to (A) the Securities Act, the
Securities Exchange Act of 1934, as amended, or any other applicable
securities or other laws, in connection with the Merger, the Stock
Purchase, any Securities Offering, any Related Document or any of the
transactions contemplated thereby, except obligations arising out of or
based upon an untrue statement or omission made in any Securities Offering
or any Related Document furnished by an Indemnitee in writing for the
purpose of preparation
9
<PAGE> 182
thereof, (B) any other action or failure to act of the Company and its
subsidiaries, or any of its predecessors, whether such action or failure
has occurred or is yet to occur or (C) the performance by North Castle of
management consulting, monitoring, financial advisory or other services for
the Company (whether performed prior to the date hereof, hereafter,
pursuant hereto or otherwise); and
(b) to the fullest extent permitted by applicable law, from and
against any and all Obligations in any way resulting from, arising out of
or in connection with, based upon or relating to (A) the fact that such
Indemnitee is or was a shareholder, director or officer of the Company or
is or was serving at the request of the Company as a director, officer,
employee or agent of or advisor or consultant to another corporation,
partnership, joint venture, trust or other enterprise, or (B) any breach or
alleged breach by such Indemnitee of his or her fiduciary duty as a
shareholder, director or officer of the Company;
in each case including but not limited to any and all fees, costs and expenses
(including without limitation fees and disbursements of attorneys) incurred by
or on behalf of any Indemnitee in asserting, exercising or enforcing any of its
rights, powers, privileges or remedies in respect of this Agreement.
8. Contribution. (a) If for any reason the indemnity provided for in
Section 7 is unavailable other than pursuant to its express terms, or is
insufficient to hold harmless any Indemnitee from any of the Obligations covered
by such indemnity, then the Company shall contribute to the amount paid or
payable by such Indemnitee as a result of such Obligation in such proportion as
is appropriate to reflect (i) the relative fault of the Company, on the one
hand, and the Indemnitees, on the other, in connection with the state of facts
giving rise to such Obligation, (ii) if such Obligation results from, arises out
of, is based upon or relates to the Merger, Stock Purchase or any Securities
Offering, the relative benefits received by the Company, on the one hand, and
the Indemnitees, on the other, from the Merger, Stock Purchase or Securities
Offering, and (iii) if required by applicable law, any other relevant equitable
considerations.
(b) For purposes of Section 8(a), the relative fault of the Company,
on the one hand, and of the Indemnitees, on the other, shall be determined by
reference to, among other things, their respective relative intent, knowledge,
access to information and opportunity to correct the state of facts giving rise
to such Obligation. For purposes of Section 8(a), the relative benefits received
by the Company, on the one hand, and the Indemnitees, on the other, shall be
determined by weighing the direct monetary proceeds to the Company, on the one
hand, and the Indemnitees, on the other, from the Merger, Stock Purchase or
Securities Offering.
10
<PAGE> 183
(c) The parties hereto acknowledge and agree that it would not be
just and equitable if contributions pursuant to Section 8(a) were determined by
pro rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in such Section. The Company
shall not be liable under Section 8(a) for contribution to the amount paid or
payable by any Indemnitee except to the extent and under such circumstances that
the Company would have been liable to indemnify, defend and hold harmless such
Indemnitee under Section 7, if such indemnity were enforceable under applicable
law. No Indemnitee shall be entitled to contribution from the Company with
respect to any Obligation in the event that any Indemnitee is finally judicially
determined to be guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) in connection with such Obligation and the
Company is not guilty of such fraudulent misrepresentation.
9. Indemnification Procedures. (a) Whenever any Indemnitee shall
have actual knowledge of the reasonable likelihood of the assertion of a Claim,
North Castle (acting on its own behalf or, if requested in writing by any such
Indemnitee other than itself, on behalf of such Indemnitee) or such Indemnitee
shall notify the Company in writing of the Claim (the "Notice of Claim") with
reasonable promptness after such Indemnitee has such knowledge relating to such
Claim and has notified North Castle thereof. The Notice of Claim shall specify
all material facts known to North Castle (or if given by such Indemnitee, such
Indemnitee) that may give rise to such Claim and the monetary amount or an
estimate of the monetary amount of the Obligation involved if North Castle (or
if given by such Indemnitee, such Indemnitee) has knowledge of such amount or a
reasonable basis for making such an estimate. The failure of North Castle or
such Indemnitee to give such Notice of Claim shall not relieve the Company of
its indemnification obligations under this Agreement except to the extent that
such omission results in a failure of actual notice to the Company and the
Company is materially prejudiced as a result of the failure to give such Notice
of Claim. The Company shall, at its expense, undertake the defense of such Claim
with attorneys of its own choosing reasonably satisfactory to North Castle.
North Castle may participate in such defense with counsel of North Castle's
choosing at the expense of the Company. If in the exercise of their good faith
judgment any one or more other Indemnitee reasonably determines that the Claim
presents an actual or potential conflict of interest with North Castle, such
Indemnitee or Indemnitees may participate in the defense of the Claim with one
counsel for all such Indemnitees, at the choosing of such Indemnitees and at the
expense of the Company. In the event that the Company does not undertake the
defense of the Claim within a reasonable time after North Castle has given the
Notice of Claim, or in the event that North Castle shall in good faith determine
that the defense of any claim by the Company is inadequate or may conflict with
the interests of any Indemnitee, North Castle may, at the expense of the Company
and after giving notice to the Company of such
11
<PAGE> 184
action, undertake the defense of the Claim and compromise or settle the Claim,
all for the account of and at the risk of the Company. In the defense of any
Claim, the Company shall not, except with the consent of North Castle (or, in
the case of any entry of any judgment or settlement that is binding on any other
Indemnitee, such other Indemnitee), consent to entry of any judgment or enter
into any settlement that includes any injunctive or other non-monetary relief,
or that does not include as an unconditional term thereof the giving by the
person or persons asserting such Claim to such Indemnitee of a release from all
liability with respect to such Claim. In each case, North Castle and each other
Indemnitee seeking indemnification hereunder will cooperate with the Company, so
long as the Company is conducting the defense of the Claim, in the preparation
for and the prosecution of the defense of such Claim, including making available
evidence within the control of North Castle or such Indemnitee, as the case may
be, and persons needed as witnesses who are employed by North Castle or such
Indemnitee, as the case may be, in each case as reasonably needed for such
defense and at cost, which cost, to the extent reasonably incurred, shall be
paid by the Company.
(b) The Company hereby agrees to advance costs and expenses,
including attorney's fees, incurred by North Castle (acting on its own behalf
or, if requested by any such Indemnitee other than itself, on behalf of such
Indemnitee) or any Indemnitee in defending any Claim in advance of the final
disposition of such Claim upon receipt of an undertaking by or on behalf of
North Castle or such Indemnitee to repay amounts so advanced if it shall
ultimately be determined that North Castle or such Indemnitee is not entitled to
be indemnified by the Company as authorized by this Agreement.
(c) Each Indemnitee shall notify the Company in writing of the amount
of any Claim actually paid by such Indemnitee (the "Notice of Payment"). The
amount of any Claim actually paid by an Indemnitee shall bear simple interest at
the rate equal to the Bank of America prime rate as of the date of such payment
plus 2% per annum, from the date the Company receives the Notice of Payment to
the date on which the Company shall repay the amount of such Claim plus interest
thereon to such Indemnitee.
10. Certain Covenants. The Company agrees to perform its obligations
under this Agreement. The rights of each Indemnitee to be indemnified under any
other agreement, document, certificate or instrument or applicable law are
independent of and in addition to any rights of such Indemnitee to be
indemnified under this Agreement. The rights of each Indemnitee and the
obligations of the Company hereunder shall remain in full force and effect
regardless of any investigation made by or on behalf of such Indemnitee. The
Company shall implement and maintain in full force and effect any and all
corporate articles or charter and by-law provisions that may be necessary or
appropriate to
12
<PAGE> 185
enable it to carry out its obligations hereunder to the fullest extent permitted
by applicable corporate law, including without limitation a provision of its
articles or certificate of incorporation eliminating liability of a director for
breach of fiduciary duty to the fullest extent permitted by applicable corporate
law, as it may be amended from time to time.
11. Third-Party Beneficiaries. All Indemnitees not signatories to
this Agreement are intended third-party beneficiaries of this Agreement.
12. Severability. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby.
13. Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed, certified or registered mail with postage prepaid, (c)
sent by next-day or overnight mail or delivery or (d) sent by fax, with a copy
sent by (a), (b), or (c) above, or telegram, as follows:
If to the Company, to:
Saratoga Beverage Group, Inc.
11 Geyser Road
Saratoga Springs, NY 12366
Telephone: (518) 584-6363 x11
Telecopy: (518) 584-0380
Attention: Chief Executive Officer
If to North Castle or any other Indemnitee, to:
North Castle Partners, L.L.C.
60 Arch Street
Greenwich, CT 06830
Telephone: (203) 862-3200
Telecopy: (203) 618-1860
Attention: Peter J. Shabecoff
13
<PAGE> 186
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Telephone: (212) 909-6000
Telecopy: (212) 909-6836
Attention: Franci J. Blassberg
or, in each case, at such other address as may be specified in writing to the
other party hereto.
All such notices, requests, demands, waivers and other communications
shall be deemed to have been received (w) if by personal delivery on the day
after such delivery, (x) if by certified or registered mail, on the seventh
business day after the mailing thereof, (y) if by next-day or overnight mail or
delivery, on the day delivered, (z) if by telecopy or telegram, on the next day
following the day on which such telecopy or telegram was sent, provided that a
copy is also sent by certified or registered mail.
14. Entire Agreement. This Agreement (a) contains the complete and
entire understanding and agreement of North Castle and the Company with respect
to the subject matter hereof and (b) supersedes all prior and contemporaneous
understandings, conditions and agreements, oral or written, express or implied,
in respect of the subject matter hereof, including but not limited to in respect
of the engagement of North Castle in connection with the subject matter hereof.
The rights and remedies herein provided are cumulative and are not exclusive of
any rights or remedies that any party or Indemnitee may otherwise have at law or
in equity or otherwise, including, without limitation, pursuant to the
Registration Rights Agreement and the Stockholders Agreement, each dated as of
the date hereof, by and between the Company, NCP-SBG and the other parties
thereto. There are no representations or warranties of North Castle in
connection with this Agreement or the services to be provided hereunder, except
as expressly made and contained in this Agreement.
14
<PAGE> 187
15. Headings. The headings contained in this Agreement are for
purposes of convenience only and shall not affect the meaning or interpretation
of this Agreement.
16. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.
17. Binding Effect; Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties to this Agreement and their respective
successors and assigns and to each Indemnitee, provided that, neither North
Castle nor the Company may assign any of its rights or obligations under this
Agreement without the express written consent of the other party hereto. Subject
to Section 11, this Agreement is not intended to confer any right or remedy upon
any person other than the parties to this Agreement and their respective
successors and permitted assigns and each Indemnitee.
18. Governing Law. This Agreement shall be governed in all respects
including as to validity, interpretations and effects by the laws of the State
of New York, without giving effect to its principles or rules of conflict of
laws to the extent such principles or rules would require or permit the
application of the laws of another jurisdiction. Each of the Company and North
Castle hereby irrevocably submit to the exclusive jurisdiction of the courts of
the State of New York and the Federal courts of the United States of America, in
each case located in the State, City and County of New York, solely in respect
of the interpretation and enforcement of the provisions of this Agreement, and
hereby waive, and agree not to assert, as a defense in any action, suit or
proceeding for the interpretation or enforcement hereof, that it is not subject
thereto or that such action, suit or proceeding may not be brought or is not
maintainable in such courts or that the venue thereof may not be appropriate or
that this Agreement may not be enforced in or by such courts, and the parties
hereto irrevocably agree that all claims with respect to such action or
proceeding shall be heard and determined in such a New York State or Federal
court. The Company and North Castle hereby consent to and grant any such court
jurisdiction over the person of such parties and over the subject matter of any
such dispute and agree that mailing of process or other papers in connection
with any such action or proceeding in the manner provided in Section 13, or in
such other manner as may be permitted by law, shall be valid and sufficient
service thereof.
19. Waiver of Jury Trial. EACH PARTY HERETO ACKNOWLEDGES AND AGREES
THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED
15
<PAGE> 188
AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE
BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A)
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) IT UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) IT MAKES THIS WAIVER
VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION
19.
20. Future Acquisitions. The Company and North Castle agree, and
North Castle agrees to cause its Affiliates and the respective officers and
directors of such Affiliates, to pursue all future acquisitions, mergers and
recapitalizations involving businesses in the refrigerated juice industry (other
than minority investments by North Castle or any of its Affiliates) through (i)
the Company, with such entities to be acquired, owned and operated by the
Company, or (ii) any other company, provided that the Rollover Stockholders (as
defined in the Stockholders Agreement, dated as of the date hereof, among the
Company, NCP-SBG and the other parties thereto) shall have had an opportunity to
exchange their respective shares of common stock of the Company for shares of
common stock of an equivalent value in such other company in connection with any
such transaction which results in the Company not being the top-tier holding
company for investments by North Castle in the refrigerated juice industry.
21. Amendment; Waivers. No amendment, modification, supplement or
discharge of this Agreement, and no waiver hereunder, shall be valid or binding
unless set forth in writing and duly executed by the party against whom
enforcement of the amendment, modification, supplement, discharge or waiver is
sought (and in the case of the Company, approved by resolution of the Board of
Directors of the Company), provided that Sections 4(a) and 4(b) may not be
amended to increase the fees payable to North Castle or otherwise be amended in
a manner that is adverse to the Company, nor may the term hereof be extended,
without the consent of a majority of the members of the Board of Directors of
the Company who are not nominees of the NCP-SBG under the Shareholder Agreement,
dated as of the date hereof, among the Company, NCP-SBG and the other parties
thereto. Any such waiver shall constitute a waiver only with respect to the
specific matter described in such writing and shall in no way impair the rights
of the
16
<PAGE> 189
party or Indemnitee granting such waiver in any other respect or at any other
time. Neither the waiver by any of the parties hereto or any Indemnitee of a
breach of or a default under any of the provisions of this Agreement, nor the
failure by any party hereto or any Indemnitee on one or more occasions, to
enforce any of the provisions of this Agreement or to exercise any right, powers
or privilege hereunder, shall be construed as a waiver of any other breach or
default of a similar nature, or as a waiver of any of such provisions, rights,
power or privileges hereunder.
17
<PAGE> 190
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
NORTH CASTLE PARTNERS, L.L.C.
By:
------------------------------
Name: Peter J. Shabecoff
Title: Managing Director
SARATOGA BEVERAGE GROUP, INC.
By:
------------------------------
Name:
Title:
18
<PAGE> 191
Exhibit G
VOTING AGREEMENT
VOTING AGREEMENT, dated as of January 5, 2000 (this "Agreement"),
among NCP-SBG, L.P., a Delaware limited partnership ("Purchaser"), and
[STOCKHOLDER] ("Stockholder"). Capitalized terms used herein without definition
shall have the meanings set forth in the Merger Agreement (as defined herein).
WHEREAS, as of the date hereof, Stockholder owns or controls shares
of Class A Common Stock, par value $.01 per share (the "Class A Company Common
Stock"), of Saratoga Beverage Group, Inc., a Delaware corporation (the
"Company") and no shares of Class B Common Stock, par value $0.01 per share of
the Company (the "Class B Common Stock") (all such shares of Class A Common
Stock and Class B Common Stock and any shares of Class A Common Stock or Class B
Common Stock of which ownership (either beneficially or of record) or control is
hereafter acquired by the Stockholder prior to the termination of this Agreement
being referred to herein as the "Shares");
WHEREAS, Purchaser, NCP-SBG Recapitalization Corp., a Delaware
corporation ("MergerCo"), and the Company are entering into a Stock Purchase
Agreement and Agreement and Plan of Merger, dated as of even date herewith (as
the same may be amended from time to time, the "Merger Agreement"), which
provides, upon the terms and subject to the conditions thereof, for the merger
of MergerCo with and into the Company (the "Merger"); and
WHEREAS, as a condition to the willingness of Purchaser and MergerCo
to enter into the Merger Agreement, Purchaser and MergerCo have required that
the Stockholder agree, and, in order to induce Purchaser and MergerCo to enter
into the Merger Agreement, the Stockholder has agreed, subject to the terms and
conditions hereof, to vote all Shares he or it then owns or controls at the time
of the Special Meeting in favor of the adoption of the Merger Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants set forth herein and in the Merger Agreement, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
<PAGE> 192
ARTICLE I
TRANSFER AND VOTING OF SHARES
Section 1.1 Transfer of Shares. (a) During the term of this
Agreement, the Stockholder shall not (i) take any action that would make any
representation or warranty of Stockholder contained herein untrue or incorrect
or have the effect of preventing or disabling Stockholder from performing its
obligations under this Agreement, or (ii) except pursuant to the terms of the
Merger Agreement and this Agreement (A) sell, tender, pledge or otherwise
dispose of any of the Shares, (B) deposit the Shares into a voting trust or
enter into a voting agreement or arrangement with respect to such Shares or
grant any proxy or power of attorney with respect thereto or (C) enter into any
instrument or arrangement with respect to the direct or indirect acquisition or
sale, assignment, transfer or other disposition of any Shares; provided,
however, that the Stockholder shall have the right to transfer Shares by gift to
any Person directly or indirectly controlled by the Stockholder or through the
laws of descent, provided, further that such transferee agrees in writing to
become a party to this Agreement.
(b) Stop Transfer. The Stockholder shall not request that the Company
register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of the Shares, unless such transfer is
made in compliance with this Agreement.
Section 1.2 Voting of Shares; Further Assurances. (a) The
Stockholder, with respect to all Shares, does hereby irrevocably (until the
termination hereof in accordance with Section 5.12) constitute and appoint
NCP-SBG with full power of substitution, as his or its true and lawful attorney
and proxy, for and in his or its name, place and stead, to vote each of such
Shares as his or its proxy, at any annual, special or adjourned meeting of the
stockholders of the Company (including the right to sign his or its name, as
stockholder, to any consent, certificate or other document relating to the
Company that may be permitted or required by applicable Law) (i) in favor of the
adoption of the Merger Agreement, (ii) against any transaction pursuant to an
Acquisition Proposal (as defined herein) or any other action or agreement that
would result in a breach of any covenant, representation or warranty or any
other obligation or agreement of the Company under the Merger Agreement or which
could result in any of the conditions to the Company's obligations under the
Merger Agreement not being fulfilled or could impede, interfere with, delay or
materially adversely affect the Merger or the transactions contemplated hereby
or by the Merger Agreement and (iii) in favor of any other matter necessary to
the consummation of the transactions contemplated by the Merger Agreement. THE
STOCKHOLDER ACKNOWLEDGES THAT PURCHASER AND MERGERCO ARE ENTERING INTO THE
MERGER AGREEMENT IN RELIANCE UPON THIS
2
<PAGE> 193
AGREEMENT AND INTENDS THIS PROXY TO BE IRREVOCABLE (UNTIL THE TERMINATION HEREOF
IN ACCORDANCE WITH SECTION 5.12) AND COUPLED WITH AN INTEREST AND WILL TAKE SUCH
FURTHER ACTION AND EXECUTE SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO
EFFECTUATE THE INTENT OF THIS PROXY AND HEREBY REVOKES ANY PROXY PREVIOUSLY
GRANTED BY THE STOCKHOLDER WITH RESPECT TO THE SHARES. NOTWITHSTANDING THE
FOREGOING, THIS PROXY SHALL BE AUTOMATICALLY REVOKED WITHOUT ANY FURTHER ACTION
ON THE PART OF ANY STOCKHOLDER OR PURCHASER UPON THE TERMINATION HEREOF IN
ACCORDANCE WITH SECTION 5.12. The Stockholder further agrees to
cause all Shares controlled or owned by him beneficially and of record to be
voted in accordance with the foregoing. The Stockholder hereby acknowledges both
receipt of a copy of the Merger Agreement and that such Stockholder understands
the contents thereof.
(b) The Stockholder shall perform such further acts and execute such
further documents and instruments as may reasonably be required to vest in
Purchaser the power to carry out the provisions of this Agreement; provided,
however, the Stockholder shall not be required to pay any monies or incur any
liability in connection with the foregoing.
(c) The Stockholder shall take all such other actions as such other
actions as shall be reasonably requested by Purchaser in order to assist in, and
shall cooperate with Purchaser in connection with, the consummation of the
transactions contemplated by the Merger Agreement; provided, however, the
Stockholder shall not be required to pay any monies or incur any liability in
connection with the foregoing.
Section 1.3 Waiver of Appraisal Rights and Dissenter's Rights. The
Stockholder hereby waives any rights of appraisal or rights to dissent that
Stockholder may have under applicable Law in connection with the Merger.
Section 1.4 Certain Events. The Stockholder agrees that this
Agreement and the obligations hereunder shall attach to the Shares and shall be
binding upon any Person to which legal or beneficial ownership of such Shares
shall pass, whether by operation of Law or otherwise, including, without
limitation, the Stockholder's heirs, guardians, administrators or successors or
as a result of any divorce.
3
<PAGE> 194
ARTICLE II
NON-SOLICITATION
Section 2.1 Acquisition Proposals. The Stockholder shall not,
directly or indirectly, through any representative, 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 substantially all of the
assets of, or any equity interest in, the Company or any of its Subsidiaries or
any recapitalization, business combination or similar transaction with the
Company or any of its Subsidiaries (any communication with respect to the
foregoing being an "Acquisition Proposal") or enter into any agreement with
respect to, or sell, transfer or otherwise dispose of any shares of Company
Common Stock pursuant to, any Acquisition Proposal. The Stockholder will
immediately cease all existing activities, discussions and negotiations with any
parties conducted heretofore with respect to any Acquisition Proposal. From and
after the execution of this Agreement, the Stockholder shall as promptly as
practicable advise Purchaser in writing of the receipt, directly or indirectly,
of any inquiries, discussions, negotiations or proposals relating to an
Acquisition Proposal that the Stockholder receives (including the material terms
thereof and the identity of the other party or parties involved) and furnish to
Purchaser within two Business Days of such receipt an accurate description of
all material terms (including any changes or adjustments to such terms as a
result of negotiations or otherwise) of any such written proposal in addition to
any information provided to any third party relating thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDER
The Stockholder hereby represents and warrants to Purchaser as
follows:
Section 3.1 Authorization. The Stockholder has the legal capacity,
power and authority to enter into, and perform all of his or its obligations
under, this Agreement. This Agreement has been duly executed and delivered by
the Stockholder and constitutes the legal, valid and binding obligation of the
Stockholder, enforceable against the Stockholder in accordance with its terms.
Section 3.2 No Conflict; Consents. (a) Neither the execution and
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will result in (with or without notice or lapse of time or
both) (i) any breach, violation or default under any agreement or instrument to
which the Stockholder is a party or by which the
4
<PAGE> 195
Stockholder or his or its properties or assets are bound, (ii) the violation of
any Law applicable to or affecting the Stockholder of any of his or its
properties or assets, or (iii) the creation of any Lien on the Stockholder or
his or its properties or assets, except the encumbrances and proxies on the
shares created hereby. There is no beneficiary or holder of a voting trust
certificate or other interest of any trust of which the Stockholder is a trustee
whose consent is required for the execution and delivery of this Agreement or
the consummation by the Stockholder of the transactions contemplated by this
Agreement. If such Stockholder is married and such Stockholder's Shares
constitute community property or otherwise require spousal or other approval for
this Agreement to be legal, valid and binding, this Agreement has been duly
authorized, executed and delivered by, and constitutes a valid and binding
agreement of, such Stockholder's spouse, enforceable against such person in
accordance with its terms.
(b) No Governmental Approval of any Governmental Authority is
necessary for the execution, delivery or performance by it of this Agreement or
the consummation of the transactions contemplated hereby, except for applicable
requirements, if any, of the Exchange Act and the HSR Act.
Section 3.3 Title to Shares. Schedule A sets forth the number and
class of Shares with respect to which the Stockholder is either (i) the record
holder and beneficial owner; (ii) the general partner of a limited partnership
that is the record holder, and whose beneficiaries are the beneficial owners; or
(iii) the beneficial owner but not the record holder. The Stockholder has (i)
sole power of disposition; (ii) sole voting power and (iii) sole power to demand
appraisal rights, in each case with respect to all of the Shares and with no
restrictions on such rights, subject to applicable federal securities laws and
the terms of this Agreement. The Shares and the certificates representing the
Shares are now and at all times during the term hereof will be held by the
Stockholder, or by a nominee or custodian for the benefit of such Stockholder,
free and clear of all Liens, proxies, voting trusts or agreements,
understandings, arrangements or any other encumbrances whatsoever, except for
any such encumbrances or proxies arising hereunder and except for the
Stockholder Agreement, dated as of October 13, 1998, by and among the Company,
Steven Bogen, Robin Prever and Anthony Malatino and the Stockholders' Agreement,
as of October 22, 1998 between Robin Prever and Anthony Malatino.
Section 3.4 No Brokers. No broker, investment banker, financial
adviser or other Person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of such
Stockholder.
5
<PAGE> 196
Section 3.5 Stockholders Agreement. The Stockholder hereby covenants
and agrees that, as of the Effective Time, he or it will enter into a
Stockholders Agreement substantially in the form set forth in Exhibit A hereto.
Section 3.6 Merger Agreement Consideration. The Stockholder hereby
acknowledges and agrees that (i) the consideration to be received by such
Stockholder pursuant to the Merger Agreement is different in form and kind than
the consideration to be received by certain other stockholders of the Company,
(ii) subject to the terms and conditions of the Merger Agreement, each Cashed
Out Share (as defined in the Merger Agreement) held by it will be converted
pursuant to the Merger Agreement into the right to receive, without interest,
cash in the amount of the Per Share Merger Consideration (as defined in the
Merger Agreement) and each Rollover Share (as defined in the Merger Agreement)
held by it will be converted pursuant to the Merger Agreement into the right to
receive a number of shares of Surviving Corporation Common Stock (as defined in
the Merger Agreement) equal to the quotient of (x) the Per Share Merger
Consideration divided by (y) the Per Share Amount (as defined in the Merger
Agreement), and (iii) such consideration is equal in value to the consideration
to be received by such other stockholders. The Stockholder hereby waives any and
all claims against the Company and the other parties to the Merger Agreement
with respect to the adequacy of the consideration received by any Stockholder
thereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Purchaser hereby represent and warrant to the Stockholder as follows:
Section 4.1 Due Organization; Authorization. Purchaser is duly
organized and validly existing under the laws of the State of Delaware.
Purchaser has all necessary limited partnership power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by Purchaser have been duly authorized by all
necessary limited partnership action on the part of Purchaser. This Agreement
has been duly executed and delivered by Purchaser and constitutes the legal,
valid and binding obligation of Purchaser, enforceable against Purchaser in
accordance with its terms.
Section 4.2 No Conflict; Consents. (a) Neither the execution and
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will result in (with or without notice or lapse of time or
both) (i) any breach, violation or default under
6
<PAGE> 197
(x) any provision of the Organizational Documents of Purchaser, (y) any Law
applicable to or affecting Purchaser or any of its properties or assets, or (z)
any agreement or instrument to which Purchaser is a party or by which Purchaser
or any of its properties or assets are bound, or (ii) the creation of any Lien
on Purchaser or its properties or assets.
(b) No Governmental Approval of any Governmental Authority is
necessary for the execution, delivery or performance by it of this Agreement or
the consummation of the transactions contemplated hereby, except for applicable
requirements, if any, of the Exchange Act and the HSR Act.
Section 4.3 No Brokers. No broker, investment banker, financial
adviser or other Person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission from the Stockholder in connection
with the transactions contemplated hereby based upon arrangements made by or on
behalf of NCP-SBG or its Affiliates.
ARTICLE V
GENERAL PROVISIONS
Section 5.1 Notices. All notices, requests, demands, waivers and
other communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed, certified or registered mail with postage prepaid, (c)
sent by next-day or overnight mail or delivery or (d) sent by telecopy or
telegram, as follows:
(a) if to Purchaser to it:
c/o North Castle Partners, L.L.C.
60 Arch Street
Greenwich, Connecticut 06830
Facsimile: (203) 618-1860
Telephone: (203) 862-3250
Attention: Peter J. Shabecoff
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Facsimile: (212) 909-6836
Telephone: (212) 909-6000
Attention: Franci J. Blassberg, Esq.
7
<PAGE> 198
(b) If to Stockholder to the address set forth on the signature page
hereto with a copy to:
Bourne Noll & Kenyon
382 Springfield Avenue
Summit, NJ 07902-0690
Facsimile: (908) 277-6808
Telephone: (908) 277-2200
Attention: John F. Kuntz, Esq.
or, in each case, at such other address as may be specified in writing to the
other parties hereto.
All such notices, requests, demands, waivers and other communications
shall be deemed to have been received (w) if by personal delivery on the day
after such delivery, (x) if by certified or registered mail, on the seventh
Business Day after the mailing thereof, (y) if by next-day or overnight mail or
delivery, on the day delivered, (z) if by telecopy or telegram, on the next day
following the day on which such telecopy or telegram was sent, provided that a
copy is also sent by certified or registered mail.
Section 5.2 Severability. If any provision, including any phrase,
sentence, clause, section or subsection, of this Agreement is invalid,
inoperative or unenforceable for any reason, such circumstances shall not have
the effect of rendering such provision in question invalid, inoperative or
unenforceable in any other case or circumstance, or of rendering any other
provision herein contained invalid, inoperative, or unenforceable to any extent
whatsoever.
Section 5.3 Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof.
Section 5.4 Assignment. Except in connection with a transfer of
Shares otherwise permitted hereunder, this Agreement shall not be assignable or
otherwise transferable by any party hereto without the prior written consent of
parties hereto, and any purported assignment or other transfer without such
consent shall be void and unenforceable; provided that Purchaser may assign this
Agreement or any of its rights and obligations hereunder to any of its
Affiliates or any other Person to whom it has validly assigned its rights under
the Merger Agreement.
Section 5.5 Amendment, Waivers, etc. No amendment, modification or
discharge of this Agreement, and no waiver hereunder, shall be valid or binding
unless set
8
<PAGE> 199
forth in writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought. Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the party granting such waiver
in any other respect or at any other time. Neither the waiver by any of the
parties hereto of a breach of or a default under any of the provisions of this
Agreement, nor the failure by any of the parties, on one or more occasions, to
enforce any of the provisions of this Agreement or to exercise any right or
privilege hereunder, shall be construed as a waiver of any other breach or
default of a similar nature, or as a waiver of any of such provisions, rights or
privileges hereunder. The rights and remedies herein provided are cumulative and
none is exclusive of any other, or of any rights or remedies that any party may
otherwise have at law or in equity.
Section 5.6 No Third Party Beneficiaries. Nothing in this Agreement
shall confer any rights upon any person or entity other than the parties hereto
and their respective heirs, successors and permitted assigns, except that the
parties hereto hereby agree that the Company is a third party beneficiary of
this Agreement.
Section 5.7 Specific Performance. The parties hereto agree that
irreparable harm 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 5.8 Governing Law. (a) EXCEPT TO THE EXTENT THE LAWS OF THE
STATE OF DELAWARE MANDATORILY APPLY, THIS AGREEMENT SHALL BE GOVERNED IN ALL
RESPECTS, INCLUDING AS TO VALIDITY, INTERPRETATION AND EFFECT, BY THE INTERNAL
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
RULES THEREOF TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE FEDERAL COURTS
OF THE UNITED STATES OF AMERICA LOCATED IN THE COUNTY OF NEW YORK SOLELY IN
RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS
AGREEMENT AND OF THE DOCUMENTS REFERRED TO IN THIS AGREEMENT, AND IN RESPECT OF
THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY. EACH PARTY HEREBY WAIVES AND
AGREES NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR THE
INTERPRETATION AND ENFORCEMENT HEREOF, OR ANY SUCH DOCUMENT OR IN RESPECT OF ANY
SUCH TRANSACTION, THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS
NOT MAINTAINABLE IN SUCH COURTS OR THAT THE VENUE THEREOF MAY
9
<PAGE> 200
NOT BE APPROPRIATE OR THAT THIS AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE
ENFORCED IN OR BY SUCH COURTS. EACH PARTY HEREBY CONSENTS TO AND GRANTS ANY SUCH
COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER
OF ANY SUCH DISPUTE AND AGREE THAT THE MAILING OF PROCESS OR OTHER PAPERS IN
CONNECTION WITH ANY SUCH ACTION OR PROCEEDING IN THE MANNER PROVIDED IN SECTION
5.1 OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID AND
SUFFICIENT SERVICE THEREOF.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES
ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OR ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE
BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i)
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 5.8(b).
Section 5.9 Headings; Counterparts. The headings contained in this
Agreement are for purposes of convenience only and shall not affect the meaning
or interpretation of this Agreement. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.
Section 5.10 Capacity. Purchaser hereby acknowledges that the
Stockholder is entering into this Agreement solely in his or its capacity as a
record and beneficial owner of the Shares, and nothing contained herein shall
impose any obligation on the Stockholder in his or its capacity as a director,
officer or employee of the Company or limit or restrict any actions taken or to
be taken by him or it in any such capacity.
10
<PAGE> 201
Section 5.11 Definitions; Construction. For purposes of this
Agreement:
(i) "beneficially own" or "beneficial ownership" with respect to any
securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not in
writing. Without duplicative counting of the same securities by the same
holder, securities beneficially owned by a Person shall include securities
beneficially owned by all other Persons with whom such Person would
constitute a "group" as described in Section 13(d)(3) of the Exchange
Act.
(ii) In the event of a stock dividend or distribution, or any change
in the Company Common Stock by reason of any stock dividend, split-up,
recapitalization, combination, exchange of shares or the like, the term
"Shares" shall be deemed to refer to and include the Shares as well as all
such stock dividends and distributions and any shares into which or for
which any or all of the Shares may be changed or exchanged.
Section 5.12 Termination. Notwithstanding anything in this Agreement
to the contrary, the obligations of the Stockholder pursuant to this Agreement
shall terminate upon the earlier of (i) the termination of the Merger Agreement,
in accordance with its terms, for any reason and (ii) the consummation of the
Merger.
11
<PAGE> 202
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
NCP-SBG, L.P.
By: NCP-SBG GP, L.LC.,
its General Partner
By:
Name:
Title:
[STOCKHOLDER]
Address of Stockholder:
12
<PAGE> 203
SCHEDULE A
<TABLE>
<CAPTION>
Number of Shares of Number of Shares of
Stockholder is the: Class A Common Stock Class B Common Stock
- ------------------ -------------------- --------------------
<S> <C> <C>
Record and beneficial
owner
General partner of a limited
partnership that is the
record owner of, and
whose beneficiaries are the
beneficial owners of
Beneficial owner but not
the record holder
</TABLE>
13
<PAGE> 1
VOTING AGREEMENT
VOTING AGREEMENT, dated as of January 5, 2000 (this "Agreement"),
among NCP-SBG, L.P., a Delaware limited partnership ("Purchaser"), and Robin
Prever ("Stockholder"). Capitalized terms used herein without definition shall
have the meanings set forth in the Merger Agreement (as defined herein).
WHEREAS, as of the date hereof, Stockholder owns or controls 150,325
shares of Class A Common Stock, par value $.01 per share (the "Class A Company
Common Stock"), of Saratoga Beverage Group, Inc., a Delaware corporation (the
"Company") and 167,960 shares of Class B Common Stock, par value $0.01 per share
of the Company (the "Class B Common Stock") (all such shares of Class A Common
Stock and Class B Common Stock and any shares of Class A Common Stock or Class B
Common Stock of which ownership (either beneficially or of record) or control is
hereafter acquired by the Stockholder prior to the termination of this Agreement
being referred to herein as the "Shares");
WHEREAS, Purchaser, NCP-SBG Recapitalization Corp., a Delaware
corporation ("MergerCo"), and the Company are entering into a Stock Purchase
Agreement and Agreement and Plan of Merger, dated as of even date herewith (as
the same may be amended from time to time, the "Merger Agreement"), which
provides, upon the terms and subject to the conditions thereof, for the merger
of MergerCo with and into the Company (the "Merger"); and
WHEREAS, as a condition to the willingness of Purchaser and MergerCo
to enter into the Merger Agreement, Purchaser and MergerCo have required that
the Stockholder agree, and, in order to induce Purchaser and MergerCo to enter
into the Merger Agreement, the Stockholder has agreed, subject to the terms and
conditions hereof, to vote all Shares he or it then owns or controls at the time
of the Special Meeting in favor of the adoption of the Merger Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants set forth herein and in the Merger Agreement, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
<PAGE> 2
ARTICLE I
TRANSFER AND VOTING OF SHARES
Section 1.1 Transfer of Shares. (a) During the term of this Agreement,
the Stockholder shall not (i) take any action that would make any representation
or warranty of Stockholder contained herein untrue or incorrect or have the
effect of preventing or disabling Stockholder from performing its obligations
under this Agreement, or (ii) except pursuant to the terms of the Merger
Agreement and this Agreement (A) sell, tender, pledge or otherwise dispose of
any of the Shares, (B) deposit the Shares into a voting trust or enter into a
voting agreement or arrangement with respect to such Shares or grant any proxy
or power of attorney with respect thereto or (C) enter into any instrument or
arrangement with respect to the direct or indirect acquisition or sale,
assignment, transfer or other disposition of any Shares; provided, however, that
the Stockholder shall have the right to transfer Shares by gift to any Person
directly or indirectly controlled by the Stockholder or through the laws of
descent, provided, further that such transferee agrees in writing to become a
party to this Agreement.
(b) Stop Transfer. The Stockholder shall not request that the Company
register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of the Shares, unless such transfer is
made in compliance with this Agreement.
Section 1.2 Voting of Shares; Further Assurances. (a) The Stockholder,
with respect to all Shares, does hereby irrevocably (until the termination
hereof in accordance with Section 5.12) constitute and appoint NCP-SBG with full
power of substitution, as his or its true and lawful attorney and proxy, for and
in his or its name, place and stead, to vote each of such Shares as his or its
proxy, at any annual, special or adjourned meeting of the stockholders of the
Company (including the right to sign his or its name, as stockholder, to any
consent, certificate or other document relating to the Company that may be
permitted or required by applicable Law) (i) in favor of the adoption of the
Merger Agreement, (ii) against any transaction pursuant to an Acquisition
Proposal (as defined herein) or any other action or agreement that would result
in a breach of any covenant, representation or warranty or any other obligation
or agreement of the Company under the Merger Agreement or which could result in
any of the conditions to the Company's obligations under the Merger Agreement
not being fulfilled or could impede, interfere with, delay or materially
adversely affect the Merger or the transactions contemplated hereby or by the
Merger Agreement and (iii) in favor of any other matter necessary to the
consummation of the transactions contemplated by the Merger Agreement. THE
STOCKHOLDER ACKNOWLEDGES THAT PURCHASER AND MERGERCO ARE ENTERING INTO THE
MERGER AGREEMENT IN RELIANCE UPON THIS
2
<PAGE> 3
AGREEMENT AND INTENDS THIS PROXY TO BE IRREVOCABLE (UNTIL THE TERMINATION HEREOF
IN ACCORDANCE WITH SECTION 5.12) AND COUPLED WITH AN INTEREST AND WILL TAKE SUCH
FURTHER ACTION AND EXECUTE SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO
EFFECTUATE THE INTENT OF THIS PROXY AND HEREBY REVOKES ANY PROXY PREVIOUSLY
GRANTED BY THE STOCKHOLDER WITH RESPECT TO THE SHARES. NOTWITHSTANDING THE
FOREGOING, THIS PROXY SHALL BE AUTOMATICALLY REVOKED WITHOUT ANY FURTHER ACTION
ON THE PART OF ANY STOCKHOLDER OR PURCHASER UPON THE TERMINATION HEREOF IN
ACCORDANCE WITH SECTION 5.12. The Stockholder further agrees to cause all Shares
controlled or owned by him beneficially and of record to be voted in accordance
with the foregoing. The Stockholder hereby acknowledges both receipt of a copy
of the Merger Agreement and that such Stockholder understands the contents
thereof.
(b) The Stockholder shall perform such further acts and execute such
further documents and instruments as may reasonably be required to vest in
Purchaser the power to carry out the provisions of this Agreement; provided,
however, the Stockholder shall not be required to pay any monies or incur any
liability in connection with the foregoing.
(c) The Stockholder shall take all such other actions as such other
actions as shall be reasonably requested by Purchaser in order to assist in, and
shall cooperate with Purchaser in connection with, the consummation of the
transactions contemplated by the Merger Agreement; provided, however, the
Stockholder shall not be required to pay any monies or incur any liability in
connection with the foregoing.
Section 1.3 Waiver of Appraisal Rights and Dissenter's Rights. The
Stockholder hereby waives any rights of appraisal or rights to dissent that
Stockholder may have under applicable Law in connection with the Merger.
Section 1.4 Certain Events. The Stockholder agrees that this Agreement
and the obligations hereunder shall attach to the Shares and shall be binding
upon any Person to which legal or beneficial ownership of such Shares shall
pass, whether by operation of Law or otherwise, including, without limitation,
the Stockholder's heirs, guardians, administrators or successors or as a result
of any divorce.
3
<PAGE> 4
ARTICLE II
NON-SOLICITATION
Section 2.1 Acquisition Proposals. The Stockholder shall not,
directly or indirectly, through any representative, 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 substantially all of the
assets of, or any equity interest in, the Company or any of its Subsidiaries or
any recapitalization, business combination or similar transaction with the
Company or any of its Subsidiaries (any communication with respect to the
foregoing being an "Acquisition Proposal") or enter into any agreement with
respect to, or sell, transfer or otherwise dispose of any shares of Company
Common Stock pursuant to, any Acquisition Proposal. The Stockholder will
immediately cease all existing activities, discussions and negotiations with any
parties conducted heretofore with respect to any Acquisition Proposal. From and
after the execution of this Agreement, the Stockholder shall as promptly as
practicable advise Purchaser in writing of the receipt, directly or indirectly,
of any inquiries, discussions, negotiations or proposals relating to an
Acquisition Proposal that the Stockholder receives (including the material terms
thereof and the identity of the other party or parties involved) and furnish to
Purchaser within two Business Days of such receipt an accurate description of
all material terms (including any changes or adjustments to such terms as a
result of negotiations or otherwise) of any such written proposal in addition to
any information provided to any third party relating thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDER
The Stockholder hereby represents and warrants to Purchaser as
follows:
Section 3.1 Authorization. The Stockholder has the legal capacity,
power and authority to enter into, and perform all of his or its obligations
under, this Agreement. This Agreement has been duly executed and delivered by
the Stockholder and constitutes the legal, valid and binding obligation of the
Stockholder, enforceable against the Stockholder in accordance with its terms.
Section 3.2 No Conflict; Consents. (a) Neither the execution and
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will result in (with or without notice or lapse of time or
both) (i) any breach, violation or default under any agreement or instrument to
which the Stockholder is a party or by which the
4
<PAGE> 5
Stockholder or his or its properties or assets are bound, (ii) the violation of
any Law applicable to or affecting the Stockholder of any of his or its
properties or assets, or (iii) the creation of any Lien on the Stockholder or
his or its properties or assets, except the encumbrances and proxies on the
shares created hereby. There is no beneficiary or holder of a voting trust
certificate or other interest of any trust of which the Stockholder is a trustee
whose consent is required for the execution and delivery of this Agreement or
the consummation by the Stockholder of the transactions contemplated by this
Agreement. If such Stockholder is married and such Stockholder's Shares
constitute community property or otherwise require spousal or other approval for
this Agreement to be legal, valid and binding, this Agreement has been duly
authorized, executed and delivered by, and constitutes a valid and binding
agreement of, such Stockholder's spouse, enforceable against such person in
accordance with its terms.
(b) No Governmental Approval of any Governmental Authority is
necessary for the execution, delivery or performance by it of this Agreement or
the consummation of the transactions contemplated hereby, except for applicable
requirements, if any, of the Exchange Act and the HSR Act.
Section 3.3 Title to Shares. Schedule A sets forth the number and
class of Shares with respect to which the Stockholder is either (i) the record
holder and beneficial owner; (ii) the general partner of a limited partnership
that is the record holder, and whose beneficiaries are the beneficial owners; or
(iii) the beneficial owner but not the record holder. The Stockholder has (i)
sole power of disposition; (ii) sole voting power and (iii) sole power to demand
appraisal rights, in each case with respect to all of the Shares and with no
restrictions on such rights, subject to applicable federal securities laws and
the terms of this Agreement. The Shares and the certificates representing the
Shares are now and at all times during the term hereof will be held by the
Stockholder, or by a nominee or custodian for the benefit of such Stockholder,
free and clear of all Liens, proxies, voting trusts or agreements,
understandings, arrangements or any other encumbrances whatsoever, except for
any such encumbrances or proxies arising hereunder and except for the
Stockholder Agreement, dated as of October 13, 1998, by and among the Company,
Steven Bogen, Robin Prever and Anthony Malatino and the Stockholders' Agreement,
as of October 22, 1998 between Robin Prever and Anthony Malatino.
Section 3.4 No Brokers. No broker, investment banker, financial
adviser or other Person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of such
Stockholder.
5
<PAGE> 6
Section 3.5 Stockholders Agreement. The Stockholder hereby covenants
and agrees that, as of the Effective Time, he or it will enter into a
Stockholders Agreement substantially in the form set forth in Exhibit A hereto.
Section 3.6 Merger Agreement Consideration. The Stockholder hereby
acknowledges and agrees that (i) the consideration to be received by such
Stockholder pursuant to the Merger Agreement is different in form and kind than
the consideration to be received by certain other stockholders of the Company,
(ii) subject to the terms and conditions of the Merger Agreement, each Cashed
Out Share (as defined in the Merger Agreement) held by it will be converted
pursuant to the Merger Agreement into the right to receive, without interest,
cash in the amount of the Per Share Merger Consideration (as defined in the
Merger Agreement) and each Rollover Share (as defined in the Merger Agreement)
held by it will be converted pursuant to the Merger Agreement into the right to
receive a number of shares of Surviving Corporation Common Stock (as defined in
the Merger Agreement) equal to the quotient of (x) the Per Share Merger
Consideration divided by (y) the Per Share Amount (as defined in the Merger
Agreement), and (iii) such consideration is equal in value to the consideration
to be received by such other stockholders. The Stockholder hereby waives any and
all claims against the Company and the other parties to the Merger Agreement
with respect to the adequacy of the consideration received by any Stockholder
thereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Purchaser hereby represent and warrant to the Stockholder as follows:
Section 4.1 Due Organization; Authorization. Purchaser is duly
organized and validly existing under the laws of the State of Delaware.
Purchaser has all necessary limited partnership power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by Purchaser have been duly authorized by all
necessary limited partnership action on the part of Purchaser. This Agreement
has been duly executed and delivered by Purchaser and constitutes the legal,
valid and binding obligation of Purchaser, enforceable against Purchaser in
accordance with its terms.
Section 4.2 No Conflict; Consents. (a) Neither the execution and
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will result in (with or without notice or lapse of time or
both) (i) any breach, violation or default under
6
<PAGE> 7
(x) any provision of the Organizational Documents of Purchaser, (y) any Law
applicable to or affecting Purchaser or any of its properties or assets, or (z)
any agreement or instrument to which Purchaser is a party or by which Purchaser
or any of its properties or assets are bound, or (ii) the creation of any Lien
on Purchaser or its properties or assets.
(b) No Governmental Approval of any Governmental Authority is
necessary for the execution, delivery or performance by it of this Agreement or
the consummation of the transactions contemplated hereby, except for applicable
requirements, if any, of the Exchange Act and the HSR Act.
Section 4.3 No Brokers. No broker, investment banker, financial
adviser or other Person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission from the Stockholder in connection
with the transactions contemplated hereby based upon arrangements made by or on
behalf of NCP-SBG or its Affiliates.
ARTICLE V
GENERAL PROVISIONS
Section 5.1 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed, certified or registered mail with postage prepaid, (c)
sent by next-day or overnight mail or delivery or (d) sent by telecopy or
telegram, as follows:
(a) if to Purchaser to it:
c/o North Castle Partners, L.L.C.
60 Arch Street
Greenwich, Connecticut 06830
Facsimile: (203) 618-1860
Telephone: (203) 862-3250
Attention: Peter J. Shabecoff
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Facsimile: (212) 909-6836
Telephone: (212) 909-6000
Attention: Franci J. Blassberg, Esq.
7
<PAGE> 8
(b) If to Stockholder to the address set forth on the signature page
hereto with a copy to:
Bourne Noll & Kenyon
382 Springfield Avenue
Summit, NJ 07902-0690
Facsimile: (908) 277-6808
Telephone: (908) 277-2200
Attention: John F. Kuntz, Esq.
or, in each case, at such other address as may be specified in writing to the
other parties hereto.
All such notices, requests, demands, waivers and other communications
shall be deemed to have been received (w) if by personal delivery on the day
after such delivery, (x) if by certified or registered mail, on the seventh
Business Day after the mailing thereof, (y) if by next-day or overnight mail or
delivery, on the day delivered, (z) if by telecopy or telegram, on the next day
following the day on which such telecopy or telegram was sent, provided that a
copy is also sent by certified or registered mail.
Section 5.2 Severability. If any provision, including any phrase,
sentence, clause, section or subsection, of this Agreement is invalid,
inoperative or unenforceable for any reason, such circumstances shall not have
the effect of rendering such provision in question invalid, inoperative or
unenforceable in any other case or circumstance, or of rendering any other
provision herein contained invalid, inoperative, or unenforceable to any extent
whatsoever.
Section 5.3 Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof.
Section 5.4 Assignment. Except in connection with a transfer of Shares
otherwise permitted hereunder, this Agreement shall not be assignable or
otherwise transferable by any party hereto without the prior written consent of
parties hereto, and any purported assignment or other transfer without such
consent shall be void and unenforceable; provided that Purchaser may assign this
Agreement or any of its rights and obligations hereunder to any of its
Affiliates or any other Person to whom it has validly assigned its rights under
the Merger Agreement.
Section 5.5 Amendment, Waivers, etc. No amendment, modification or
discharge of this Agreement, and no waiver hereunder, shall be valid or binding
unless set
8
<PAGE> 9
forth in writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought. Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the party granting such waiver
in any other respect or at any other time. Neither the waiver by any of the
parties hereto of a breach of or a default under any of the provisions of this
Agreement, nor the failure by any of the parties, on one or more occasions, to
enforce any of the provisions of this Agreement or to exercise any right or
privilege hereunder, shall be construed as a waiver of any other breach or
default of a similar nature, or as a waiver of any of such provisions, rights or
privileges hereunder. The rights and remedies herein provided are cumulative and
none is exclusive of any other, or of any rights or remedies that any party may
otherwise have at law or in equity.
Section 5.6 No Third Party Beneficiaries. Nothing in this Agreement
shall confer any rights upon any person or entity other than the parties hereto
and their respective heirs, successors and permitted assigns, except that the
parties hereto hereby agree that the Company is a third party beneficiary of
this Agreement.
Section 5.7 Specific Performance. The parties hereto agree that
irreparable harm 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 5.8 Governing Law. (a) EXCEPT TO THE EXTENT THE LAWS OF THE
STATE OF DELAWARE MANDATORILY APPLY, THIS AGREEMENT SHALL BE GOVERNED IN ALL
RESPECTS, INCLUDING AS TO VALIDITY, INTERPRETATION AND EFFECT, BY THE INTERNAL
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
RULES THEREOF TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE FEDERAL COURTS
OF THE UNITED STATES OF AMERICA LOCATED IN THE COUNTY OF NEW YORK SOLELY IN
RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS
AGREEMENT AND OF THE DOCUMENTS REFERRED TO IN THIS AGREEMENT, AND IN RESPECT OF
THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY. EACH PARTY HEREBY WAIVES AND
AGREES NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR THE
INTERPRETATION AND ENFORCEMENT HEREOF, OR ANY SUCH DOCUMENT OR IN RESPECT OF ANY
SUCH TRANSACTION, THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS
NOT MAINTAINABLE IN SUCH COURTS OR THAT THE VENUE THEREOF MAY
9
<PAGE> 10
NOT BE APPROPRIATE OR THAT THIS AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE
ENFORCED IN OR BY SUCH COURTS. EACH PARTY HEREBY CONSENTS TO AND GRANTS ANY SUCH
COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER
OF ANY SUCH DISPUTE AND AGREE THAT THE MAILING OF PROCESS OR OTHER PAPERS IN
CONNECTION WITH ANY SUCH ACTION OR PROCEEDING IN THE MANNER PROVIDED IN SECTION
5.1 OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID AND
SUFFICIENT SERVICE THEREOF.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES
ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OR ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE
BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i)
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 5.8(b).
Section 5.9 Headings; Counterparts. The headings contained in this
Agreement are for purposes of convenience only and shall not affect the meaning
or interpretation of this Agreement. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.
Section 5.10 Capacity. Purchaser hereby acknowledges that the
Stockholder is entering into this Agreement solely in his or its capacity as a
record and beneficial owner of the Shares, and nothing contained herein shall
impose any obligation on the Stockholder in his or its capacity as a director,
officer or employee of the Company or limit or restrict any actions taken or to
be taken by him or it in any such capacity.
10
<PAGE> 11
Section 5.11 Definitions; Construction. For purposes of this
Agreement:
(i) "beneficially own" or "beneficial ownership" with respect to any
securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not in
writing. Without duplicative counting of the same securities by the same
holder, securities beneficially owned by a Person shall include securities
beneficially owned by all other Persons with whom such Person would
constitute a "group" as described in Section 13(d)(3) of the Exchange Act.
(ii) In the event of a stock dividend or distribution, or any change
in the Company Common Stock by reason of any stock dividend, split-up,
recapitalization, combination, exchange of shares or the like, the term
"Shares" shall be deemed to refer to and include the Shares as well as all
such stock dividends and distributions and any shares into which or for
which any or all of the Shares may be changed or exchanged.
Section 5.12 Termination. Notwithstanding anything in this Agreement
to the contrary, the obligations of the Stockholder pursuant to this Agreement
shall terminate upon the earlier of (i) the termination of the Merger Agreement,
in accordance with its terms, for any reason and (ii) the consummation of the
Merger.
11
<PAGE> 12
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
NCP-SBG, L.P.
By: NCP-SBG GP, L.LC.,
its General Partner
By: /s/ Peter J. Shabecoff
-------------------------------
Name: Peter J. Shabecoff
Title: Executive Vice President
/s/ Robin Prever
-----------------------------------
ROBIN PREVER
Address of Stockholder:
4301 North Ocean Blvd.
A-1703
Boca Raton, FL 33431
12
<PAGE> 13
SCHEDULE A
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Number of Shares of Number of Shares of
Stockholder is the: Class A Common Stock Class B Common Stock
- ------------------- -------------------- --------------------
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Record and beneficial 150,325 167,960
owner
- ------------------------------------------------------------------------------------------
General partner of a limited None None
partnership that is the
record owner of, and
whose beneficiaries are the
beneficial owners of
- ------------------------------------------------------------------------------------------
Beneficial owner but not None None
the record holder
- ------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 1
VOTING AGREEMENT
VOTING AGREEMENT, dated as of January 5, 2000 (this "Agreement"), among
NCP-SBG, L.P., a Delaware limited partnership ("Purchaser"), and Anthony
Malatino ("Stockholder"). Capitalized terms used herein without definition shall
have the meanings set forth in the Merger Agreement (as defined herein).
WHEREAS, as of the date hereof, Stockholder owns or controls 363,132 shares
of Class A Common Stock, par value $.01 per share (the "Class A Company Common
Stock"), of Saratoga Beverage Group, Inc., a Delaware corporation (the
"Company") and 354,995 shares of Class B Common Stock, par value $0.01 per share
of the Company (the "Class B Common Stock") (all such shares of Class A Common
Stock and Class B Common Stock and any shares of Class A Common Stock or Class B
Common Stock of which ownership (either beneficially or of record) or control is
hereafter acquired by the Stockholder prior to the termination of this Agreement
being referred to herein as the "Shares");
WHEREAS, Purchaser, NCP-SBG Recapitalization Corp., a Delaware corporation
("MergerCo"), and the Company are entering into a Stock Purchase Agreement and
Agreement and Plan of Merger, dated as of even date herewith (as the same may be
amended from time to time, the "Merger Agreement"), which provides, upon the
terms and subject to the conditions thereof, for the merger of MergerCo with and
into the Company (the "Merger"); and
WHEREAS, as a condition to the willingness of Purchaser and MergerCo to
enter into the Merger Agreement, Purchaser and MergerCo have required that the
Stockholder agree, and, in order to induce Purchaser and MergerCo to enter into
the Merger Agreement, the Stockholder has agreed, subject to the terms and
conditions hereof, to vote all Shares he or it then owns or controls at the time
of the Special Meeting in favor of the adoption of the Merger Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants set forth herein and in the Merger Agreement, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
<PAGE> 2
ARTICLE I
TRANSFER AND VOTING OF SHARES
Section 1.1 Transfer of Shares. (a) During the term of this Agreement, the
Stockholder shall not (i) take any action that would make any representation or
warranty of Stockholder contained herein untrue or incorrect or have the effect
of preventing or disabling Stockholder from performing its obligations under
this Agreement, or (ii) except pursuant to the terms of the Merger Agreement and
this Agreement (A) sell, tender, pledge or otherwise dispose of any of the
Shares, (B) deposit the Shares into a voting trust or enter into a voting
agreement or arrangement with respect to such Shares or grant any proxy or power
of attorney with respect thereto or (C) enter into any instrument or arrangement
with respect to the direct or indirect acquisition or sale, assignment, transfer
or other disposition of any Shares; provided, however, that the Stockholder
shall have the right to transfer Shares by gift to any Person directly or
indirectly controlled by the Stockholder or through the laws of descent,
provided, further that such transferee agrees in writing to become a party to
this Agreement.
(b) Stop Transfer. The Stockholder shall not request that the Company
register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of the Shares, unless such transfer is
made in compliance with this Agreement.
Section 1.2 Voting of Shares; Further Assurances. (a) The Stockholder, with
respect to all Shares, does hereby irrevocably (until the termination hereof in
accordance with Section 5.12) constitute and appoint NCP-SBG with full power of
substitution, as his or its true and lawful attorney and proxy, for and in his
or its name, place and stead, to vote each of such Shares as his or its proxy,
at any annual, special or adjourned meeting of the stockholders of the Company
(including the right to sign his or its name, as stockholder, to any consent,
certificate or other document relating to the Company that may be permitted or
required by applicable Law) (i) in favor of the adoption of the Merger
Agreement, (ii) against any transaction pursuant to an Acquisition Proposal (as
defined herein) or any other action or agreement that would result in a breach
of any covenant, representation or warranty or any other obligation or agreement
of the Company under the Merger Agreement or which could result in any of the
conditions to the Company's obligations under the Merger Agreement not being
fulfilled or could impede, interfere with, delay or materially adversely affect
the Merger or the transactions contemplated hereby or by the Merger Agreement
and (iii) in favor of any other matter necessary to the consummation of the
transactions contemplated by the Merger Agreement. THE STOCKHOLDER ACKNOWLEDGES
THAT PURCHASER AND MERGERCO ARE ENTERING INTO THE MERGER AGREEMENT IN RELIANCE
UPON THIS
2
<PAGE> 3
AGREEMENT AND INTENDS THIS PROXY TO BE IRREVOCABLE (UNTIL THE TERMINATION HEREOF
IN ACCORDANCE WITH SECTION 5.12) AND COUPLED WITH AN INTEREST AND WILL TAKE SUCH
FURTHER ACTION AND EXECUTE SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO
EFFECTUATE THE INTENT OF THIS PROXY AND HEREBY REVOKES ANY PROXY PREVIOUSLY
GRANTED BY THE STOCKHOLDER WITH RESPECT TO THE SHARES. NOTWITHSTANDING THE
FOREGOING, THIS PROXY SHALL BE AUTOMATICALLY REVOKED WITHOUT ANY FURTHER ACTION
ON THE PART OF ANY STOCKHOLDER OR PURCHASER UPON THE TERMINATION HEREOF IN
ACCORDANCE WITH SECTION 5.12. The Stockholder further agrees to cause all Shares
controlled or owned by him beneficially and of record to be voted in accordance
with the foregoing. The Stockholder hereby acknowledges both receipt of a copy
of the Merger Agreement and that such Stockholder understands the contents
thereof.
(b) The Stockholder shall perform such further acts and execute such
further documents and instruments as may reasonably be required to vest in
Purchaser the power to carry out the provisions of this Agreement; provided,
however, the Stockholder shall not be required to pay any monies or incur any
liability in connection with the foregoing.
(c) The Stockholder shall take all such other actions as such other actions
as shall be reasonably requested by Purchaser in order to assist in, and shall
cooperate with Purchaser in connection with, the consummation of the
transactions contemplated by the Merger Agreement; provided, however, the
Stockholder shall not be required to pay any monies or incur any liability in
connection with the foregoing.
Section 1.3 Waiver of Appraisal Rights and Dissenter's Rights. The
Stockholder hereby waives any rights of appraisal or rights to dissent that
Stockholder may have under applicable Law in connection with the Merger.
Section 1.4 Certain Events. The Stockholder agrees that this Agreement and
the obligations hereunder shall attach to the Shares and shall be binding upon
any Person to which legal or beneficial ownership of such Shares shall pass,
whether by operation of Law or otherwise, including, without limitation, the
Stockholder's heirs, guardians, administrators or successors or as a result of
any divorce.
3
<PAGE> 4
ARTICLE II
NON-SOLICITATION
Section 2.1 Acquisition Proposals. The Stockholder shall not, directly or
indirectly, through any representative, 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 substantially all of the assets of, or any
equity interest in, the Company or any of its Subsidiaries or any
recapitalization, business combination or similar transaction with the Company
or any of its Subsidiaries (any communication with respect to the foregoing
being an "Acquisition Proposal") or enter into any agreement with respect to, or
sell, transfer or otherwise dispose of any shares of Company Common Stock
pursuant to, any Acquisition Proposal. The Stockholder will immediately cease
all existing activities, discussions and negotiations with any parties conducted
heretofore with respect to any Acquisition Proposal. From and after the
execution of this Agreement, the Stockholder shall as promptly as practicable
advise Purchaser in writing of the receipt, directly or indirectly, of any
inquiries, discussions, negotiations or proposals relating to an Acquisition
Proposal that the Stockholder receives (including the material terms thereof and
the identity of the other party or parties involved) and furnish to Purchaser
within two Business Days of such receipt an accurate description of all material
terms (including any changes or adjustments to such terms as a result of
negotiations or otherwise) of any such written proposal in addition to any
information provided to any third party relating thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDER
The Stockholder hereby represents and warrants to Purchaser as follows:
Section 3.1 Authorization. The Stockholder has the legal capacity, power
and authority to enter into, and perform all of his or its obligations under,
this Agreement. This Agreement has been duly executed and delivered by the
Stockholder and constitutes the legal, valid and binding obligation of the
Stockholder, enforceable against the Stockholder in accordance with its terms.
Section 3.2 No Conflict; Consents. (a) Neither the execution and delivery
of this Agreement, nor the consummation of the transactions contemplated hereby,
will result in (with or without notice or lapse of time or both) (i) any breach,
violation or default under any agreement or instrument to which the Stockholder
is a party or by which the
4
<PAGE> 5
Stockholder or his or its properties or assets are bound, (ii) the violation of
any Law applicable to or affecting the Stockholder of any of his or its
properties or assets, or (iii) the creation of any Lien on the Stockholder or
his or its properties or assets, except the encumbrances and proxies on the
shares created hereby. There is no beneficiary or holder of a voting trust
certificate or other interest of any trust of which the Stockholder is a trustee
whose consent is required for the execution and delivery of this Agreement or
the consummation by the Stockholder of the transactions contemplated by this
Agreement. If such Stockholder is married and such Stockholder's Shares
constitute community property or otherwise require spousal or other approval for
this Agreement to be legal, valid and binding, this Agreement has been duly
authorized, executed and delivered by, and constitutes a valid and binding
agreement of, such Stockholder's spouse, enforceable against such person in
accordance with its terms.
(b) No Governmental Approval of any Governmental Authority is necessary for
the execution, delivery or performance by it of this Agreement or the
consummation of the transactions contemplated hereby, except for applicable
requirements, if any, of the Exchange Act and the HSR Act.
Section 3.3 Title to Shares. Schedule A sets forth the number and class of
Shares with respect to which the Stockholder is either (i) the record holder and
beneficial owner; (ii) the general partner of a limited partnership that is the
record holder, and whose beneficiaries are the beneficial owners; or (iii) the
beneficial owner but not the record holder. The Stockholder has (i) sole power
of disposition; (ii) sole voting power and (iii) sole power to demand appraisal
rights, in each case with respect to all of the Shares and with no restrictions
on such rights, subject to applicable federal securities laws and the terms of
this Agreement. The Shares and the certificates representing the Shares are now
and at all times during the term hereof will be held by the Stockholder, or by a
nominee or custodian for the benefit of such Stockholder, free and clear of all
Liens, proxies, voting trusts or agreements, understandings, arrangements or any
other encumbrances whatsoever, except for any such encumbrances or proxies
arising hereunder and except for the Stockholder Agreement, dated as of October
13, 1998, by and among the Company, Steven Bogen, Robin Prever and Anthony
Malatino and the Stockholders' Agreement, as of October 22, 1998 between Robin
Prever and Anthony Malatino.
Section 3.4 No Brokers. No broker, investment banker, financial adviser or
other Person is entitled to any broker's, finder's, financial adviser's or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of such Stockholder.
5
<PAGE> 6
Section 3.5 Stockholders Agreement. The Stockholder hereby covenants and
agrees that, as of the Effective Time, he or it will enter into a Stockholders
Agreement substantially in the form set forth in Exhibit A hereto.
Section 3.6 Merger Agreement Consideration. The Stockholder hereby
acknowledges and agrees that (i) the consideration to be received by such
Stockholder pursuant to the Merger Agreement is different in form and kind than
the consideration to be received by certain other stockholders of the Company,
(ii) subject to the terms and conditions of the Merger Agreement, each Cashed
Out Share (as defined in the Merger Agreement) held by it will be converted
pursuant to the Merger Agreement into the right to receive, without interest,
cash in the amount of the Per Share Merger Consideration (as defined in the
Merger Agreement) and each Rollover Share (as defined in the Merger Agreement)
held by it will be converted pursuant to the Merger Agreement into the right to
receive a number of shares of Surviving Corporation Common Stock (as defined in
the Merger Agreement) equal to the quotient of (x) the Per Share Merger
Consideration divided by (y) the Per Share Amount (as defined in the Merger
Agreement), and (iii) such consideration is equal in value to the consideration
to be received by such other stockholders. The Stockholder hereby waives any and
all claims against the Company and the other parties to the Merger Agreement
with respect to the adequacy of the consideration received by any Stockholder
thereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Purchaser hereby represent and warrant to the Stockholder as follows:
Section 4.1 Due Organization; Authorization. Purchaser is duly organized
and validly existing under the laws of the State of Delaware. Purchaser has all
necessary limited partnership power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby by Purchaser have been duly authorized by all necessary
limited partnership action on the part of Purchaser. This Agreement has been
duly executed and delivered by Purchaser and constitutes the legal, valid and
binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms.
Section 4.2 No Conflict; Consents. (a) Neither the execution and delivery
of this Agreement, nor the consummation of the transactions contemplated hereby,
will result in (with or without notice or lapse of time or both) (i) any breach,
violation or default under
6
<PAGE> 7
(x) any provision of the Organizational Documents of Purchaser, (y) any Law
applicable to or affecting Purchaser or any of its properties or assets, or (z)
any agreement or instrument to which Purchaser is a party or by which Purchaser
or any of its properties or assets are bound, or (ii) the creation of any Lien
on Purchaser or its properties or assets.
(b) No Governmental Approval of any Governmental Authority is necessary for
the execution, delivery or performance by it of this Agreement or the
consummation of the transactions contemplated hereby, except for applicable
requirements, if any, of the Exchange Act and the HSR Act.
Section 4.3 No Brokers. No broker, investment banker, financial adviser or
other Person is entitled to any broker's, finder's, financial adviser's or other
similar fee or commission from the Stockholder in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
NCP-SBG or its Affiliates.
ARTICLE V
GENERAL PROVISIONS
Section 5.1 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed, certified or registered mail with postage prepaid, (c)
sent by next-day or overnight mail or delivery or (d) sent by telecopy or
telegram, as follows:
(a) if to Purchaser to it:
c/o North Castle Partners, L.L.C.
60 Arch Street
Greenwich, Connecticut 06830
Facsimile: (203) 618-1860
Telephone: (203) 862-3250
Attention: Peter J. Shabecoff
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Facsimile: (212) 909-6836
Telephone: (212) 909-6000
Attention: Franci J. Blassberg, Esq.
7
<PAGE> 8
(b) If to Stockholder to the address set forth on the signature page hereto
with a copy to:
Bourne Noll & Kenyon
382 Springfield Avenue
Summit, NJ 07902-0690
Facsimile: (908) 277-6808
Telephone: (908) 277-2200
Attention: John F. Kuntz, Esq.
or, in each case, at such other address as may be specified in writing to the
other parties hereto.
All such notices, requests, demands, waivers and other communications shall
be deemed to have been received (w) if by personal delivery on the day after
such delivery, (x) if by certified or registered mail, on the seventh Business
Day after the mailing thereof, (y) if by next-day or overnight mail or delivery,
on the day delivered, (z) if by telecopy or telegram, on the next day following
the day on which such telecopy or telegram was sent, provided that a copy is
also sent by certified or registered mail.
Section 5.2 Severability. If any provision, including any phrase, sentence,
clause, section or subsection, of this Agreement is invalid, inoperative or
unenforceable for any reason, such circumstances shall not have the effect of
rendering such provision in question invalid, inoperative or unenforceable in
any other case or circumstance, or of rendering any other provision herein
contained invalid, inoperative, or unenforceable to any extent whatsoever.
Section 5.3 Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof.
Section 5.4 Assignment. Except in connection with a transfer of Shares
otherwise permitted hereunder, this Agreement shall not be assignable or
otherwise transferable by any party hereto without the prior written consent of
parties hereto, and any purported assignment or other transfer without such
consent shall be void and unenforceable; provided that Purchaser may assign this
Agreement or any of its rights and obligations hereunder to any of its
Affiliates or any other Person to whom it has validly assigned its rights under
the Merger Agreement.
Section 5.5 Amendment, Waivers, etc. No amendment, modification or
discharge of this Agreement, and no waiver hereunder, shall be valid or binding
unless set
8
<PAGE> 9
forth in writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought. Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the party granting such waiver
in any other respect or at any other time. Neither the waiver by any of the
parties hereto of a breach of or a default under any of the provisions of this
Agreement, nor the failure by any of the parties, on one or more occasions, to
enforce any of the provisions of this Agreement or to exercise any right or
privilege hereunder, shall be construed as a waiver of any other breach or
default of a similar nature, or as a waiver of any of such provisions, rights or
privileges hereunder. The rights and remedies herein provided are cumulative and
none is exclusive of any other, or of any rights or remedies that any party may
otherwise have at law or in equity.
Section 5.6 No Third Party Beneficiaries. Nothing in this Agreement shall
confer any rights upon any person or entity other than the parties hereto and
their respective heirs, successors and permitted assigns, except that the
parties hereto hereby agree that the Company is a third party beneficiary of
this Agreement.
Section 5.7 Specific Performance. The parties hereto agree that irreparable
harm 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 5.8 Governing Law. (a) EXCEPT TO THE EXTENT THE LAWS OF THE STATE
OF DELAWARE MANDATORILY APPLY, THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS,
INCLUDING AS TO VALIDITY, INTERPRETATION AND EFFECT, BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS RULES THEREOF TO
THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES
OF AMERICA LOCATED IN THE COUNTY OF NEW YORK SOLELY IN RESPECT OF THE
INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMENT AND OF THE
DOCUMENTS REFERRED TO IN THIS AGREEMENT, AND IN RESPECT OF THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY. EACH PARTY HEREBY WAIVES AND AGREES NOT TO
ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR THE INTERPRETATION
AND ENFORCEMENT HEREOF, OR ANY SUCH DOCUMENT OR IN RESPECT OF ANY SUCH
TRANSACTION, THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT
MAINTAINABLE IN SUCH COURTS OR THAT THE VENUE THEREOF MAY
9
<PAGE> 10
NOT BE APPROPRIATE OR THAT THIS AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE
ENFORCED IN OR BY SUCH COURTS. EACH PARTY HEREBY CONSENTS TO AND GRANTS ANY SUCH
COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER
OF ANY SUCH DISPUTE AND AGREE THAT THE MAILING OF PROCESS OR OTHER PAPERS IN
CONNECTION WITH ANY SUCH ACTION OR PROCEEDING IN THE MANNER PROVIDED IN SECTION
5.1 OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID AND
SUFFICIENT SERVICE THEREOF.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT
SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OR ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH,
TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH PARTY MAKES THIS
WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 5.8(b).
Section 5.9 Headings; Counterparts. The headings contained in this
Agreement are for purposes of convenience only and shall not affect the meaning
or interpretation of this Agreement. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.
Section 5.10 Capacity. Purchaser hereby acknowledges that the Stockholder
is entering into this Agreement solely in his or its capacity as a record and
beneficial owner of the Shares, and nothing contained herein shall impose any
obligation on the Stockholder in his or its capacity as a director, officer or
employee of the Company or limit or restrict any actions taken or to be taken by
him or it in any such capacity.
10
<PAGE> 11
Section 5.11 Definitions; Construction. For purposes of this Agreement:
(i) "beneficially own" or "beneficial ownership" with respect to any
securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not in
writing. Without duplicative counting of the same securities by the same
holder, securities beneficially owned by a Person shall include securities
beneficially owned by all other Persons with whom such Person would
constitute a "group" as described in Section 13(d)(3) of the Exchange Act.
(ii) In the event of a stock dividend or distribution, or any change in the
Company Common Stock by reason of any stock dividend, split-up,
recapitalization, combination, exchange of shares or the like, the term
"Shares" shall be deemed to refer to and include the Shares as well as all
such stock dividends and distributions and any shares into which or for
which any or all of the Shares may be changed or exchanged.
Section 5.12 Termination. Notwithstanding anything in this Agreement to the
contrary, the obligations of the Stockholder pursuant to this Agreement shall
terminate upon the earlier of (i) the termination of the Merger Agreement, in
accordance with its terms, for any reason and (ii) the consummation of the
Merger.
11
<PAGE> 12
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
NCP-SBG, L.P.
By: NCP-SBG GP, L.LC.,
its General Partner
By: /s/ Peter J. Shabecoff
---------------------------------
Name: Peter J. Shabecoff
Title: Executive Vice President
/s/ Anthony Malatino
------------------------------------
ANTHONY MALATINO
Address of Stockholder:
c/o Morgan Stanley Dean Witter
340 Broadway
Saratoga Springs, NY 12866
12
<PAGE> 13
SCHEDULE A
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
Number of Shares of Number of Shares of
Stockholder is the: Class A Common Stock Class B Common Stock
- ------------------ -------------------- --------------------
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Record and beneficial 363,132 354,995
owner
- ----------------------------------------------------------------------------------------
General partner of a limited None None
partnership that is the
record owner of, and
whose beneficiaries are the
beneficial owners of
- ----------------------------------------------------------------------------------------
Beneficial owner but not None None
the record holder
- ----------------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 1
VOTING AGREEMENT
VOTING AGREEMENT, dated as of January 5, 2000 (this "Agreement"), among
NCP-SBG, L.P., a Delaware limited partnership ("Purchaser"), and Steel Partners
II, L.P. ("Stockholder"). Capitalized terms used herein without definition shall
have the meanings set forth in the Merger Agreement (as defined herein).
WHEREAS, as of the date hereof, Stockholder owns or controls 481,258 shares
of Class A Common Stock, par value $.01 per share (the "Class A Company Common
Stock"), of Saratoga Beverage Group, Inc., a Delaware corporation (the
"Company") and no shares of Class B Common Stock, par value $0.01 per share of
the Company (the "Class B Common Stock") (all such shares of Class A Common
Stock and Class B Common Stock and any shares of Class A Common Stock or Class B
Common Stock of which ownership (either beneficially or of record) or control is
hereafter acquired by the Stockholder prior to the termination of this Agreement
being referred to herein as the "Shares");
WHEREAS, Purchaser, NCP-SBG Recapitalization Corp., a Delaware corporation
("MergerCo"), and the Company are entering into a Stock Purchase Agreement and
Agreement and Plan of Merger, dated as of even date herewith (as the same may be
amended from time to time, the "Merger Agreement"), which provides, upon the
terms and subject to the conditions thereof, for the merger of MergerCo with and
into the Company (the "Merger"); and
WHEREAS, as a condition to the willingness of Purchaser and MergerCo to
enter into the Merger Agreement, Purchaser and MergerCo have required that the
Stockholder agree, and, in order to induce Purchaser and MergerCo to enter into
the Merger Agreement, the Stockholder has agreed, subject to the terms and
conditions hereof, to vote all Shares he or it then owns or controls at the time
of the Special Meeting in favor of the adoption of the Merger Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants set forth herein and in the Merger Agreement, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
<PAGE> 2
ARTICLE I
TRANSFER AND VOTING OF SHARES
Section 1.1 Transfer of Shares. (a) During the term of this Agreement, the
Stockholder shall not (i) take any action that would make any representation or
warranty of Stockholder contained herein untrue or incorrect or have the effect
of preventing or disabling Stockholder from performing its obligations under
this Agreement, or (ii) except pursuant to the terms of the Merger Agreement and
this Agreement (A) sell, tender, pledge or otherwise dispose of any of the
Shares, (B) deposit the Shares into a voting trust or enter into a voting
agreement or arrangement with respect to such Shares or grant any proxy or power
of attorney with respect thereto or (C) enter into any instrument or arrangement
with respect to the direct or indirect acquisition or sale, assignment, transfer
or other disposition of any Shares; provided, however, that the Stockholder
shall have the right to transfer Shares by gift to any Person directly or
indirectly controlled by the Stockholder or through the laws of descent,
provided, further that such transferee agrees in writing to become a party to
this Agreement.
(b) Stop Transfer. The Stockholder shall not request that the Company
register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of the Shares, unless such transfer is
made in compliance with this Agreement.
Section 1.2 Voting of Shares; Further Assurances. (a) The Stockholder, with
respect to all Shares, does hereby irrevocably (until the termination hereof in
accordance with Section 5.12) constitute and appoint NCP-SBG with full power of
substitution, as his or its true and lawful attorney and proxy, for and in his
or its name, place and stead, to vote each of such Shares as his or its proxy,
at any annual, special or adjourned meeting of the stockholders of the Company
(including the right to sign his or its name, as stockholder, to any consent,
certificate or other document relating to the Company that may be permitted or
required by applicable Law) (i) in favor of the adoption of the Merger
Agreement, (ii) against any transaction pursuant to an Acquisition Proposal (as
defined herein) or any other action or agreement that would result in a breach
of any covenant, representation or warranty or any other obligation or agreement
of the Company under the Merger Agreement or which could result in any of the
conditions to the Company's obligations under the Merger Agreement not being
fulfilled or could impede, interfere with, delay or materially adversely affect
the Merger or the transactions contemplated hereby or by the Merger Agreement
and (iii) in favor of any other matter necessary to the consummation of the
transactions contemplated by the Merger Agreement. THE STOCKHOLDER ACKNOWLEDGES
THAT PURCHASER AND MERGERCO ARE ENTERING INTO THE MERGER AGREEMENT IN RELIANCE
UPON THIS
2
<PAGE> 3
AGREEMENT AND INTENDS THIS PROXY TO BE IRREVOCABLE (UNTIL THE TERMINATION HEREOF
IN ACCORDANCE WITH SECTION 5.12) AND COUPLED WITH AN INTEREST AND WILL TAKE SUCH
FURTHER ACTION AND EXECUTE SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO
EFFECTUATE THE INTENT OF THIS PROXY AND HEREBY REVOKES ANY PROXY PREVIOUSLY
GRANTED BY THE STOCKHOLDER WITH RESPECT TO THE SHARES. NOTWITHSTANDING THE
FOREGOING, THIS PROXY SHALL BE AUTOMATICALLY REVOKED WITHOUT ANY FURTHER ACTION
ON THE PART OF ANY STOCKHOLDER OR PURCHASER UPON THE TERMINATION HEREOF IN
ACCORDANCE WITH SECTION 5.12. The Stockholder further agrees to cause all Shares
controlled or owned by him beneficially and of record to be voted in accordance
with the foregoing. The Stockholder hereby acknowledges both receipt of a copy
of the Merger Agreement and that such Stockholder understands the contents
thereof.
(b) The Stockholder shall perform such further acts and execute such
further documents and instruments as may reasonably be required to vest in
Purchaser the power to carry out the provisions of this Agreement; provided,
however, the Stockholder shall not be required to pay any monies or incur any
liability in connection with the foregoing.
(c) The Stockholder shall take all such other actions as such other actions
as shall be reasonably requested by Purchaser in order to assist in, and shall
cooperate with Purchaser in connection with, the consummation of the
transactions contemplated by the Merger Agreement; provided, however, the
Stockholder shall not be required to pay any monies or incur any liability in
connection with the foregoing.
Section 1.3 Waiver of Appraisal Rights and Dissenter's Rights. The
Stockholder hereby waives any rights of appraisal or rights to dissent that
Stockholder may have under applicable Law in connection with the Merger.
Section 1.4 Certain Events. The Stockholder agrees that this Agreement and
the obligations hereunder shall attach to the Shares and shall be binding upon
any Person to which legal or beneficial ownership of such Shares shall pass,
whether by operation of Law or otherwise, including, without limitation, the
Stockholder's heirs, guardians, administrators or successors or as a result of
any divorce.
3
<PAGE> 4
ARTICLE II
NON-SOLICITATION
Section 2.1 Acquisition Proposals. The Stockholder shall not, directly or
indirectly, through any representative, 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 substantially all of the assets of, or any
equity interest in, the Company or any of its Subsidiaries or any
recapitalization, business combination or similar transaction with the Company
or any of its Subsidiaries (any communication with respect to the foregoing
being an "Acquisition Proposal") or enter into any agreement with respect to, or
sell, transfer or otherwise dispose of any shares of Company Common Stock
pursuant to, any Acquisition Proposal. The Stockholder will immediately cease
all existing activities, discussions and negotiations with any parties conducted
heretofore with respect to any Acquisition Proposal. From and after the
execution of this Agreement, the Stockholder shall as promptly as practicable
advise Purchaser in writing of the receipt, directly or indirectly, of any
inquiries, discussions, negotiations or proposals relating to an Acquisition
Proposal that the Stockholder receives (including the material terms thereof and
the identity of the other party or parties involved) and furnish to Purchaser
within two Business Days of such receipt an accurate description of all material
terms (including any changes or adjustments to such terms as a result of
negotiations or otherwise) of any such written proposal in addition to any
information provided to any third party relating thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDER
The Stockholder hereby represents and warrants to Purchaser as follows:
Section 3.1 Authorization. The Stockholder has the legal capacity, power
and authority to enter into, and perform all of his or its obligations under,
this Agreement. This Agreement has been duly executed and delivered by the
Stockholder and constitutes the legal, valid and binding obligation of the
Stockholder, enforceable against the Stockholder in accordance with its terms.
Section 3.2 No Conflict; Consents. (a) Neither the execution and delivery
of this Agreement, nor the consummation of the transactions contemplated hereby,
will result in (with or without notice or lapse of time or both) (i) any breach,
violation or default under any agreement or instrument to which the Stockholder
is a party or by which the
4
<PAGE> 5
Stockholder or his or its properties or assets are bound, (ii) the violation of
any Law applicable to or affecting the Stockholder of any of his or its
properties or assets, or (iii) the creation of any Lien on the Stockholder or
his or its properties or assets, except the encumbrances and proxies on the
shares created hereby. There is no beneficiary or holder of a voting trust
certificate or other interest of any trust of which the Stockholder is a trustee
whose consent is required for the execution and delivery of this Agreement or
the consummation by the Stockholder of the transactions contemplated by this
Agreement. If such Stockholder is married and such Stockholder's Shares
constitute community property or otherwise require spousal or other approval for
this Agreement to be legal, valid and binding, this Agreement has been duly
authorized, executed and delivered by, and constitutes a valid and binding
agreement of, such Stockholder's spouse, enforceable against such person in
accordance with its terms.
(b) No Governmental Approval of any Governmental Authority is necessary for
the execution, delivery or performance by it of this Agreement or the
consummation of the transactions contemplated hereby, except for applicable
requirements, if any, of the Exchange Act and the HSR Act.
Section 3.3 Title to Shares. Schedule A sets forth the number and class of
Shares with respect to which the Stockholder is either (i) the record holder and
beneficial owner; (ii) the general partner of a limited partnership that is the
record holder, and whose beneficiaries are the beneficial owners; or (iii) the
beneficial owner but not the record holder. The Stockholder has (i) sole power
of disposition; (ii) sole voting power and (iii) sole power to demand appraisal
rights, in each case with respect to all of the Shares and with no restrictions
on such rights, subject to applicable federal securities laws and the terms of
this Agreement. The Shares and the certificates representing the Shares are now
and at all times during the term hereof will be held by the Stockholder, or by a
nominee or custodian for the benefit of such Stockholder, free and clear of all
Liens, proxies, voting trusts or agreements, understandings, arrangements or any
other encumbrances whatsoever, except for any such encumbrances or proxies
arising hereunder and except for the Stockholder Agreement, dated as of October
13, 1998, by and among the Company, Steven Bogen, Robin Prever and Anthony
Malatino and the Stockholders' Agreement, as of October 22, 1998 between Robin
Prever and Anthony Malatino.
Section 3.4 No Brokers. No broker, investment banker, financial adviser or
other Person is entitled to any broker's, finder's, financial adviser's or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of such Stockholder.
5
<PAGE> 6
Section 3.5 Stockholders Agreement. The Stockholder hereby covenants and
agrees that, as of the Effective Time, he or it will enter into a Stockholders
Agreement substantially in the form set forth in Exhibit A hereto.
Section 3.6 Merger Agreement Consideration. The Stockholder hereby
acknowledges and agrees that (i) the consideration to be received by such
Stockholder pursuant to the Merger Agreement is different in form and kind than
the consideration to be received by certain other stockholders of the Company,
(ii) subject to the terms and conditions of the Merger Agreement, each Cashed
Out Share (as defined in the Merger Agreement) held by it will be converted
pursuant to the Merger Agreement into the right to receive, without interest,
cash in the amount of the Per Share Merger Consideration (as defined in the
Merger Agreement) and each Rollover Share (as defined in the Merger Agreement)
held by it will be converted pursuant to the Merger Agreement into the right to
receive a number of shares of Surviving Corporation Common Stock (as defined in
the Merger Agreement) equal to the quotient of (x) the Per Share Merger
Consideration divided by (y) the Per Share Amount (as defined in the Merger
Agreement), and (iii) such consideration is equal in value to the consideration
to be received by such other stockholders. The Stockholder hereby waives any and
all claims against the Company and the other parties to the Merger Agreement
with respect to the adequacy of the consideration received by any Stockholder
thereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Purchaser hereby represent and warrant to the Stockholder as follows:
Section 4.1 Due Organization; Authorization. Purchaser is duly organized
and validly existing under the laws of the State of Delaware. Purchaser has all
necessary limited partnership power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby by Purchaser have been duly authorized by all necessary
limited partnership action on the part of Purchaser. This Agreement has been
duly executed and delivered by Purchaser and constitutes the legal, valid and
binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms.
Section 4.2 No Conflict; Consents. (a) Neither the execution and delivery
of this Agreement, nor the consummation of the transactions contemplated hereby,
will result in (with or without notice or lapse of time or both) (i) any breach,
violation or default under
6
<PAGE> 7
(x) any provision of the Organizational Documents of Purchaser, (y) any Law
applicable to or affecting Purchaser or any of its properties or assets, or (z)
any agreement or instrument to which Purchaser is a party or by which Purchaser
or any of its properties or assets are bound, or (ii) the creation of any Lien
on Purchaser or its properties or assets.
(b) No Governmental Approval of any Governmental Authority is necessary for
the execution, delivery or performance by it of this Agreement or the
consummation of the transactions contemplated hereby, except for applicable
requirements, if any, of the Exchange Act and the HSR Act.
Section 4.3 No Brokers. No broker, investment banker, financial adviser or
other Person is entitled to any broker's, finder's, financial adviser's or other
similar fee or commission from the Stockholder in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
NCP-SBG or its Affiliates.
ARTICLE V
GENERAL PROVISIONS
Section 5.1 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed, certified or registered mail with postage prepaid, (c)
sent by next-day or overnight mail or delivery or (d) sent by telecopy or
telegram, as follows:
(a) if to Purchaser to it:
c/o North Castle Partners, L.L.C.
60 Arch Street
Greenwich, Connecticut 06830
Facsimile: (203) 618-1860
Telephone: (203) 862-3250
Attention: Peter J. Shabecoff
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Facsimile: (212) 909-6836
Telephone: (212) 909-6000
Attention: Franci J. Blassberg, Esq.
7
<PAGE> 8
(b) If to Stockholder to the address set forth on the signature page
hereto with a copy to:
Bourne Noll & Kenyon
382 Springfield Avenue
Summit, NJ 07902-0690
Facsimile: (908) 277-6808
Telephone: (908) 277-2200
Attention: John F. Kuntz, Esq.
or, in each case, at such other address as may be specified in writing to the
other parties hereto.
All such notices, requests, demands, waivers and other communications shall
be deemed to have been received (w) if by personal delivery on the day after
such delivery, (x) if by certified or registered mail, on the seventh Business
Day after the mailing thereof, (y) if by next-day or overnight mail or delivery,
on the day delivered, (z) if by telecopy or telegram, on the next day following
the day on which such telecopy or telegram was sent, provided that a copy is
also sent by certified or registered mail.
Section 5.2 Severability. If any provision, including any phrase, sentence,
clause, section or subsection, of this Agreement is invalid, inoperative or
unenforceable for any reason, such circumstances shall not have the effect of
rendering such provision in question invalid, inoperative or unenforceable in
any other case or circumstance, or of rendering any other provision herein
contained invalid, inoperative, or unenforceable to any extent whatsoever.
Section 5.3 Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof.
Section 5.4 Assignment. Except in connection with a transfer of Shares
otherwise permitted hereunder, this Agreement shall not be assignable or
otherwise transferable by any party hereto without the prior written consent of
parties hereto, and any purported assignment or other transfer without such
consent shall be void and unenforceable; provided that Purchaser may assign this
Agreement or any of its rights and obligations hereunder to any of its
Affiliates or any other Person to whom it has validly assigned its rights under
the Merger Agreement.
Section 5.5 Amendment, Waivers, etc. No amendment, modification or
discharge of this Agreement, and no waiver hereunder, shall be valid or binding
unless set
8
<PAGE> 9
forth in writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought. Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the party granting such waiver
in any other respect or at any other time. Neither the waiver by any of the
parties hereto of a breach of or a default under any of the provisions of this
Agreement, nor the failure by any of the parties, on one or more occasions, to
enforce any of the provisions of this Agreement or to exercise any right or
privilege hereunder, shall be construed as a waiver of any other breach or
default of a similar nature, or as a waiver of any of such provisions, rights or
privileges hereunder. The rights and remedies herein provided are cumulative and
none is exclusive of any other, or of any rights or remedies that any party may
otherwise have at law or in equity.
Section 5.6 No Third Party Beneficiaries. Nothing in this Agreement shall
confer any rights upon any person or entity other than the parties hereto and
their respective heirs, successors and permitted assigns, except that the
parties hereto hereby agree that the Company is a third party beneficiary of
this Agreement.
Section 5.7 Specific Performance. The parties hereto agree that irreparable
harm 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 5.8 Governing Law. (a) EXCEPT TO THE EXTENT THE LAWS OF THE STATE
OF DELAWARE MANDATORILY APPLY, THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS,
INCLUDING AS TO VALIDITY, INTERPRETATION AND EFFECT, BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS RULES THEREOF TO
THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES
OF AMERICA LOCATED IN THE COUNTY OF NEW YORK SOLELY IN RESPECT OF THE
INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMENT AND OF THE
DOCUMENTS REFERRED TO IN THIS AGREEMENT, AND IN RESPECT OF THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY. EACH PARTY HEREBY WAIVES AND AGREES NOT TO
ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR THE INTERPRETATION
AND ENFORCEMENT HEREOF, OR ANY SUCH DOCUMENT OR IN RESPECT OF ANY SUCH
TRANSACTION, THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT
MAINTAINABLE IN SUCH COURTS OR THAT THE VENUE THEREOF MAY
9
<PAGE> 10
NOT BE APPROPRIATE OR THAT THIS AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE
ENFORCED IN OR BY SUCH COURTS. EACH PARTY HEREBY CONSENTS TO AND GRANTS ANY SUCH
COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER
OF ANY SUCH DISPUTE AND AGREE THAT THE MAILING OF PROCESS OR OTHER PAPERS IN
CONNECTION WITH ANY SUCH ACTION OR PROCEEDING IN THE MANNER PROVIDED IN SECTION
5.1 OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID AND
SUFFICIENT SERVICE THEREOF.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT
SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OR ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH,
TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH PARTY MAKES THIS
WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 5.8(b).
Section 5.9 Headings; Counterparts. The headings contained in this
Agreement are for purposes of convenience only and shall not affect the meaning
or interpretation of this Agreement. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.
Section 5.10 Capacity. Purchaser hereby acknowledges that the Stockholder
is entering into this Agreement solely in his or its capacity as a record and
beneficial owner of the Shares, and nothing contained herein shall impose any
obligation on the Stockholder in his or its capacity as a director, officer or
employee of the Company or limit or restrict any actions taken or to be taken by
him or it in any such capacity.
10
<PAGE> 11
Section 5.11 Definitions; Construction. For purposes of this Agreement:
(i) "beneficially own" or "beneficial ownership" with respect to any
securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not in
writing. Without duplicative counting of the same securities by the same
holder, securities beneficially owned by a Person shall include securities
beneficially owned by all other Persons with whom such Person would
constitute a "group" as described in Section 13(d)(3) of the Exchange Act.
(ii) In the event of a stock dividend or distribution, or any change in the
Company Common Stock by reason of any stock dividend, split-up,
recapitalization, combination, exchange of shares or the like, the term
"Shares" shall be deemed to refer to and include the Shares as well as all
such stock dividends and distributions and any shares into which or for
which any or all of the Shares may be changed or exchanged.
Section 5.12 Termination. Notwithstanding anything in this Agreement to the
contrary, the obligations of the Stockholder pursuant to this Agreement shall
terminate upon the earlier of (i) the termination of the Merger Agreement, in
accordance with its terms, for any reason and (ii) the consummation of the
Merger.
11
<PAGE> 12
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
NCP-SBG, L.P.
By: NCP-SBG GP, L.LC.,
its General Partner
By: /s/ Peter J. Shabecoff
----------------------------------
Name: Peter J. Shabecoff
Title: Executive Vice President
STEEL PARTNERS II, L.P.
By: STEEL PARTNERS, L.L.C.,
its General Partner
By: /s/ Warren Lichtenstein
------------------------------
Name: Warren Lichtenstein
Title: Managing Member
Address of Stockholder:
150 East 52nd St. 21st Floor
New York, NY 10022
12
<PAGE> 13
SCHEDULE A
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Number of Shares of Number of Shares of
Stockholder is the: Class A Common Stock Class B Common Stock
- ------------------- -------------------- --------------------
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Record and beneficial 506,258 None
owner
- -------------------------------------------------------------------------------------------------
General partner of a limited None None
partnership that is the
record owner of, and
whose beneficiaries are the
beneficial owners of
- -------------------------------------------------------------------------------------------------
Beneficial owner but not None None
the record holder
- -------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 1
EXHIBIT 99.5
VOTING AGREEMENT
VOTING AGREEMENT, dated as of January 5, 2000 (this "Agreement"),
among NCP-SBG, L.P., a Delaware limited partnership ("Purchaser"), and Warren G.
Lichtenstein ("Stockholder"). Capitalized terms used herein without definition
shall have the meanings set forth in the Merger Agreement (as defined herein).
WHEREAS, as of the date hereof, Stockholder owns or controls [ ]
shares of Class A Common Stock, par value $.01 per share (the "Class A Company
Common Stock"), of Saratoga Beverage Group, Inc., a Delaware corporation (the
"Company") and no shares of Class B Common Stock, par value $0.01 per share of
the Company (the "Class B Common Stock") (all such shares of Class A Common
Stock and Class B Common Stock and any shares of Class A Common Stock or Class B
Common Stock of which ownership (either beneficially or of record) or control is
hereafter acquired by the Stockholder prior to the termination of this Agreement
being referred to herein as the "Shares");
WHEREAS, Purchaser, NCP-SBG Recapitalization Corp., a Delaware
corporation ("MergerCo"), and the Company are entering into a Stock Purchase
Agreement and Agreement and Plan of Merger, dated as of even date herewith (as
the same may be amended from time to time, the "Merger Agreement"), which
provides, upon the terms and subject to the conditions thereof, for the merger
of MergerCo with and into the Company (the "Merger"); and
WHEREAS, as a condition to the willingness of Purchaser and MergerCo
to enter into the Merger Agreement, Purchaser and MergerCo have required that
the Stockholder agree, and, in order to induce Purchaser and MergerCo to enter
into the Merger Agreement, the Stockholder has agreed, subject to the terms and
conditions hereof, to vote all Shares he or it then owns or controls at the time
of the Special Meeting in favor of the adoption of the Merger Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants set forth herein and in the Merger Agreement, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
<PAGE> 2
ARTICLE I
TRANSFER AND VOTING OF SHARES
Section 1.1 Transfer of Shares. (a) During the term of this
Agreement, the Stockholder shall not (i) take any action that would make any
representation or warranty of Stockholder contained herein untrue or incorrect
or have the effect of preventing or disabling Stockholder from performing its
obligations under this Agreement, or (ii) except pursuant to the terms of the
Merger Agreement and this Agreement (A) sell, tender, pledge or otherwise
dispose of any of the Shares, (B) deposit the Shares into a voting trust or
enter into a voting agreement or arrangement with respect to such Shares or
grant any proxy or power of attorney with respect thereto or (C) enter into any
instrument or arrangement with respect to the direct or indirect acquisition or
sale, assignment, transfer or other disposition of any Shares; provided,
however, that the Stockholder shall have the right to transfer Shares by gift to
any Person directly or indirectly controlled by the Stockholder or through the
laws of descent, provided, further that such transferee agrees in writing to
become a party to this Agreement.
(b) Stop Transfer. The Stockholder shall not request that the Company
register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of the Shares, unless such transfer is
made in compliance with this Agreement.
Section 1.2 Voting of Shares; Further Assurances. (a) The
Stockholder, with respect to all Shares, does hereby irrevocably (until the
termination hereof in accordance with Section 5.12) constitute and appoint
NCP-SBG with full power of substitution, as his or its true and lawful attorney
and proxy, for and in his or its name, place and stead, to vote each of such
Shares as his or its proxy, at any annual, special or adjourned meeting of the
stockholders of the Company (including the right to sign his or its name, as
stockholder, to any consent, certificate or other document relating to the
Company that may be permitted or required by applicable Law) (i) in favor of the
adoption of the Merger Agreement, (ii) against any transaction pursuant to an
Acquisition Proposal (as defined herein) or any other action or agreement that
would result in a breach of any covenant, representation or warranty or any
other obligation or agreement of the Company under the Merger Agreement or which
could result in any of the conditions to the Company's obligations under the
Merger Agreement not being fulfilled or could impede, interfere with, delay or
materially adversely affect the Merger or the transactions contemplated hereby
or by the Merger Agreement and (iii) in favor of any other matter necessary to
the consummation of the transactions contemplated by the Merger Agreement. THE
STOCKHOLDER ACKNOWLEDGES THAT PURCHASER AND MERGERCO ARE ENTERING INTO THE
MERGER AGREEMENT IN RELIANCE UPON THIS
2
<PAGE> 3
AGREEMENT AND INTENDS THIS PROXY TO BE IRREVOCABLE (UNTIL THE TERMINATION HEREOF
IN ACCORDANCE WITH SECTION 5.12) AND COUPLED WITH AN INTEREST AND WILL TAKE SUCH
FURTHER ACTION AND EXECUTE SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO
EFFECTUATE THE INTENT OF THIS PROXY AND HEREBY REVOKES ANY PROXY PREVIOUSLY
GRANTED BY THE STOCKHOLDER WITH RESPECT TO THE SHARES. NOTWITHSTANDING THE
FOREGOING, THIS PROXY SHALL BE AUTOMATICALLY REVOKED WITHOUT ANY FURTHER ACTION
ON THE PART OF ANY STOCKHOLDER OR PURCHASER UPON THE TERMINATION HEREOF IN
ACCORDANCE WITH SECTION 5.12. The Stockholder further agrees to
cause all Shares controlled or owned by him beneficially and of record to be
voted in accordance with the foregoing. The Stockholder hereby acknowledges both
receipt of a copy of the Merger Agreement and that such Stockholder understands
the contents thereof.
(b) The Stockholder shall perform such further acts and execute such
further documents and instruments as may reasonably be required to vest in
Purchaser the power to carry out the provisions of this Agreement; provided,
however, the Stockholder shall not be required to pay any monies or incur any
liability in connection with the foregoing.
(c) The Stockholder shall take all such other actions as such other
actions as shall be reasonably requested by Purchaser in order to assist in, and
shall cooperate with Purchaser in connection with, the consummation of the
transactions contemplated by the Merger Agreement; provided, however, the
Stockholder shall not be required to pay any monies or incur any liability in
connection with the foregoing.
Section 1.3 Waiver of Appraisal Rights and Dissenter's Rights. The
Stockholder hereby waives any rights of appraisal or rights to dissent that
Stockholder may have under applicable Law in connection with the Merger.
Section 1.4 Certain Events. The Stockholder agrees that this
Agreement and the obligations hereunder shall attach to the Shares and shall be
binding upon any Person to which legal or beneficial ownership of such Shares
shall pass, whether by operation of Law or otherwise, including, without
limitation, the Stockholder's heirs, guardians, administrators or successors or
as a result of any divorce.
3
<PAGE> 4
ARTICLE II
NON-SOLICITATION
Section 2.1 Acquisition Proposals. The Stockholder shall not,
directly or indirectly, through any representative, 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 substantially all of the
assets of, or any equity interest in, the Company or any of its Subsidiaries or
any recapitalization, business combination or similar transaction with the
Company or any of its Subsidiaries (any communication with respect to the
foregoing being an "Acquisition Proposal") or enter into any agreement with
respect to, or sell, transfer or otherwise dispose of any shares of Company
Common Stock pursuant to, any Acquisition Proposal. The Stockholder will
immediately cease all existing activities, discussions and negotiations with any
parties conducted heretofore with respect to any Acquisition Proposal. From and
after the execution of this Agreement, the Stockholder shall as promptly as
practicable advise Purchaser in writing of the receipt, directly or indirectly,
of any inquiries, discussions, negotiations or proposals relating to an
Acquisition Proposal that the Stockholder receives (including the material terms
thereof and the identity of the other party or parties involved) and furnish to
Purchaser within two Business Days of such receipt an accurate description of
all material terms (including any changes or adjustments to such terms as a
result of negotiations or otherwise) of any such written proposal in addition to
any information provided to any third party relating thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDER
The Stockholder hereby represents and warrants to Purchaser as
follows:
Section 3.1 Authorization. The Stockholder has the legal capacity,
power and authority to enter into, and perform all of his or its obligations
under, this Agreement. This Agreement has been duly executed and delivered by
the Stockholder and constitutes the legal, valid and binding obligation of the
Stockholder, enforceable against the Stockholder in accordance with its terms.
Section 3.2 No Conflict; Consents. (a) Neither the execution and
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will result in (with or without notice or lapse of time or
both) (i) any breach, violation or default under any agreement or instrument to
which the Stockholder is a party or by which the
4
<PAGE> 5
Stockholder or his or its properties or assets are bound, (ii) the violation of
any Law applicable to or affecting the Stockholder of any of his or its
properties or assets, or (iii) the creation of any Lien on the Stockholder or
his or its properties or assets, except the encumbrances and proxies on the
shares created hereby. There is no beneficiary or holder of a voting trust
certificate or other interest of any trust of which the Stockholder is a trustee
whose consent is required for the execution and delivery of this Agreement or
the consummation by the Stockholder of the transactions contemplated by this
Agreement. If such Stockholder is married and such Stockholder's Shares
constitute community property or otherwise require spousal or other approval for
this Agreement to be legal, valid and binding, this Agreement has been duly
authorized, executed and delivered by, and constitutes a valid and binding
agreement of, such Stockholder's spouse, enforceable against such person in
accordance with its terms.
(b) No Governmental Approval of any Governmental Authority is
necessary for the execution, delivery or performance by it of this Agreement or
the consummation of the transactions contemplated hereby, except for applicable
requirements, if any, of the Exchange Act and the HSR Act.
Section 3.3 Title to Shares. Schedule A sets forth the number and
class of Shares with respect to which the Stockholder is either (i) the record
holder and beneficial owner; (ii) the general partner of a limited partnership
that is the record holder, and whose beneficiaries are the beneficial owners; or
(iii) the beneficial owner but not the record holder. The Stockholder has (i)
sole power of disposition; (ii) sole voting power and (iii) sole power to demand
appraisal rights, in each case with respect to all of the Shares and with no
restrictions on such rights, subject to applicable federal securities laws and
the terms of this Agreement. The Shares and the certificates representing the
Shares are now and at all times during the term hereof will be held by the
Stockholder, or by a nominee or custodian for the benefit of such Stockholder,
free and clear of all Liens, proxies, voting trusts or agreements,
understandings, arrangements or any other encumbrances whatsoever, except for
any such encumbrances or proxies arising hereunder and except for the
Stockholder Agreement, dated as of October 13, 1998, by and among the Company,
Steven Bogen, Robin Prever and Anthony Malatino and the Stockholders' Agreement,
as of October 22, 1998 between Robin Prever and Anthony Malatino.
Section 3.4 No Brokers. No broker, investment banker, financial
adviser or other Person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of such
Stockholder.
5
<PAGE> 6
Section 3.5 Stockholders Agreement. The Stockholder hereby covenants
and agrees that, as of the Effective Time, he or it will enter into a
Stockholders Agreement substantially in the form set forth in Exhibit A hereto.
Section 3.6 Merger Agreement Consideration. The Stockholder hereby
acknowledges and agrees that (i) the consideration to be received by such
Stockholder pursuant to the Merger Agreement is different in form and kind than
the consideration to be received by certain other stockholders of the Company,
(ii) subject to the terms and conditions of the Merger Agreement, each Cashed
Out Share (as defined in the Merger Agreement) held by it will be converted
pursuant to the Merger Agreement into the right to receive, without interest,
cash in the amount of the Per Share Merger Consideration (as defined in the
Merger Agreement) and each Rollover Share (as defined in the Merger Agreement)
held by it will be converted pursuant to the Merger Agreement into the right to
receive a number of shares of Surviving Corporation Common Stock (as defined in
the Merger Agreement) equal to the quotient of (x) the Per Share Merger
Consideration divided by (y) the Per Share Amount (as defined in the Merger
Agreement), and (iii) such consideration is equal in value to the consideration
to be received by such other stockholders. The Stockholder hereby waives any and
all claims against the Company and the other parties to the Merger Agreement
with respect to the adequacy of the consideration received by any Stockholder
thereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Purchaser hereby represent and warrant to the Stockholder as follows:
Section 4.1 Due Organization; Authorization. Purchaser is duly
organized and validly existing under the laws of the State of Delaware.
Purchaser has all necessary limited partnership power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by Purchaser have been duly authorized by all
necessary limited partnership action on the part of Purchaser. This Agreement
has been duly executed and delivered by Purchaser and constitutes the legal,
valid and binding obligation of Purchaser, enforceable against Purchaser in
accordance with its terms.
Section 4.2 No Conflict; Consents. (a) Neither the execution and
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will result in (with or without notice or lapse of time or
both) (i) any breach, violation or default under
6
<PAGE> 7
(x) any provision of the Organizational Documents of Purchaser, (y) any Law
applicable to or affecting Purchaser or any of its properties or assets, or (z)
any agreement or instrument to which Purchaser is a party or by which Purchaser
or any of its properties or assets are bound, or (ii) the creation of any Lien
on Purchaser or its properties or assets.
(b) No Governmental Approval of any Governmental Authority is
necessary for the execution, delivery or performance by it of this Agreement or
the consummation of the transactions contemplated hereby, except for applicable
requirements, if any, of the Exchange Act and the HSR Act.
Section 4.3 No Brokers. No broker, investment banker, financial
adviser or other Person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission from the Stockholder in connection
with the transactions contemplated hereby based upon arrangements made by or on
behalf of NCP-SBG or its Affiliates.
ARTICLE V
GENERAL PROVISIONS
Section 5.1 Notices. All notices, requests, demands, waivers and
other communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed, certified or registered mail with postage prepaid, (c)
sent by next-day or overnight mail or delivery or (d) sent by telecopy or
telegram, as follows:
(a) if to Purchaser to it:
c/o North Castle Partners, L.L.C.
60 Arch Street
Greenwich, Connecticut 06830
Facsimile: (203) 618-1860
Telephone: (203) 862-3250
Attention: Peter J. Shabecoff
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Facsimile: (212) 909-6836
Telephone: (212) 909-6000
Attention: Franci J. Blassberg, Esq.
7
<PAGE> 8
(b) If to Stockholder to the address set forth on the signature page
hereto with a copy to:
Bourne Noll & Kenyon
382 Springfield Avenue
Summit, NJ 07902-0690
Facsimile: (908) 277-6808
Telephone: (908) 277-2200
Attention: John F. Kuntz, Esq.
or, in each case, at such other address as may be specified in writing to the
other parties hereto.
All such notices, requests, demands, waivers and other communications
shall be deemed to have been received (w) if by personal delivery on the day
after such delivery, (x) if by certified or registered mail, on the seventh
Business Day after the mailing thereof, (y) if by next-day or overnight mail or
delivery, on the day delivered, (z) if by telecopy or telegram, on the next day
following the day on which such telecopy or telegram was sent, provided that a
copy is also sent by certified or registered mail.
Section 5.2 Severability. If any provision, including any phrase,
sentence, clause, section or subsection, of this Agreement is invalid,
inoperative or unenforceable for any reason, such circumstances shall not have
the effect of rendering such provision in question invalid, inoperative or
unenforceable in any other case or circumstance, or of rendering any other
provision herein contained invalid, inoperative, or unenforceable to any extent
whatsoever.
Section 5.3 Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof.
Section 5.4 Assignment. Except in connection with a transfer of
Shares otherwise permitted hereunder, this Agreement shall not be assignable or
otherwise transferable by any party hereto without the prior written consent of
parties hereto, and any purported assignment or other transfer without such
consent shall be void and unenforceable; provided that Purchaser may assign this
Agreement or any of its rights and obligations hereunder to any of its
Affiliates or any other Person to whom it has validly assigned its rights under
the Merger Agreement.
Section 5.5 Amendment, Waivers, etc. No amendment, modification or
discharge of this Agreement, and no waiver hereunder, shall be valid or binding
unless set
8
<PAGE> 9
forth in writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought. Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the party granting such waiver
in any other respect or at any other time. Neither the waiver by any of the
parties hereto of a breach of or a default under any of the provisions of this
Agreement, nor the failure by any of the parties, on one or more occasions, to
enforce any of the provisions of this Agreement or to exercise any right or
privilege hereunder, shall be construed as a waiver of any other breach or
default of a similar nature, or as a waiver of any of such provisions, rights or
privileges hereunder. The rights and remedies herein provided are cumulative and
none is exclusive of any other, or of any rights or remedies that any party may
otherwise have at law or in equity.
Section 5.6 No Third Party Beneficiaries. Nothing in this Agreement
shall confer any rights upon any person or entity other than the parties hereto
and their respective heirs, successors and permitted assigns, except that the
parties hereto hereby agree that the Company is a third party beneficiary of
this Agreement.
Section 5.7 Specific Performance. The parties hereto agree that
irreparable harm 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 5.8 Governing Law. (a) EXCEPT TO THE EXTENT THE LAWS OF THE
STATE OF DELAWARE MANDATORILY APPLY, THIS AGREEMENT SHALL BE GOVERNED IN ALL
RESPECTS, INCLUDING AS TO VALIDITY, INTERPRETATION AND EFFECT, BY THE INTERNAL
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
RULES THEREOF TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE FEDERAL COURTS
OF THE UNITED STATES OF AMERICA LOCATED IN THE COUNTY OF NEW YORK SOLELY IN
RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS
AGREEMENT AND OF THE DOCUMENTS REFERRED TO IN THIS AGREEMENT, AND IN RESPECT OF
THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY. EACH PARTY HEREBY WAIVES AND
AGREES NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR THE
INTERPRETATION AND ENFORCEMENT HEREOF, OR ANY SUCH DOCUMENT OR IN RESPECT OF ANY
SUCH TRANSACTION, THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS
NOT MAINTAINABLE IN SUCH COURTS OR THAT THE VENUE THEREOF MAY
9
<PAGE> 10
NOT BE APPROPRIATE OR THAT THIS AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE
ENFORCED IN OR BY SUCH COURTS. EACH PARTY HEREBY CONSENTS TO AND GRANTS ANY SUCH
COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER
OF ANY SUCH DISPUTE AND AGREE THAT THE MAILING OF PROCESS OR OTHER PAPERS IN
CONNECTION WITH ANY SUCH ACTION OR PROCEEDING IN THE MANNER PROVIDED IN SECTION
5.1 OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID AND
SUFFICIENT SERVICE THEREOF.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES
ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OR ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE
BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i)
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 5.8(b).
Section 5.9 Headings; Counterparts. The headings contained in this
Agreement are for purposes of convenience only and shall not affect the meaning
or interpretation of this Agreement. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.
Section 5.10 Capacity. Purchaser hereby acknowledges that the
Stockholder is entering into this Agreement solely in his or its capacity as a
record and beneficial owner of the Shares, and nothing contained herein shall
impose any obligation on the Stockholder in his or its capacity as a director,
officer or employee of the Company or limit or restrict any actions taken or to
be taken by him or it in any such capacity.
10
<PAGE> 11
Section 5.11 Definitions; Construction. For purposes of this
Agreement:
(i) "beneficially own" or "beneficial ownership" with respect to any
securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not in
writing. Without duplicative counting of the same securities by the same
holder, securities beneficially owned by a Person shall include securities
beneficially owned by all other Persons with whom such Person would
constitute a "group" as described in Section 13(d)(3) of the Exchange
Act.
(ii) In the event of a stock dividend or distribution, or any change
in the Company Common Stock by reason of any stock dividend, split-up,
recapitalization, combination, exchange of shares or the like, the term
"Shares" shall be deemed to refer to and include the Shares as well as all
such stock dividends and distributions and any shares into which or for
which any or all of the Shares may be changed or exchanged.
Section 5.12 Termination. Notwithstanding anything in this Agreement
to the contrary, the obligations of the Stockholder pursuant to this Agreement
shall terminate upon the earlier of (i) the termination of the Merger Agreement,
in accordance with its terms, for any reason and (ii) the consummation of the
Merger.
11
<PAGE> 12
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
NCP-SBG, L.P.
By: NCP-SBG GP, L.LC.,
its General Partner
By: /s/ Peter J. Shabecoff
-----------------------------------
Name: Peter J. Shabecoff
Title: Executive Vice President
/s/ Warren G. Lichtenstein
----------------------------------------
WARREN G. LICHTENSTEIN
Address of Stockholder:
c/o Steel Partners, L.L.C.
150 East 52nd Street, 21st Floor
New York, NY 10022
12
<PAGE> 13
SCHEDULE A
<TABLE>
<CAPTION>
Number of Shares of Number of Shares of
Stockholder is the: Class A Common Stock Class B Common Stock
- ------------------ -------------------- --------------------
<S> <C> <C>
Record and beneficial 46,254 None
owner
General partner of a limited None None
partnership that is the
record owner of, and
whose beneficiaries are the
beneficial owners of
Beneficial owner but not None None
the record holder
</TABLE>
13
<PAGE> 1
VOTING AGREEMENT
VOTING AGREEMENT, dated as of January 5, 2000 (this "Agreement"), among
NCP-SBG, L.P., a Delaware limited partnership ("Purchaser"), and Steven Bogen
("Stockholder"). Capitalized terms used herein without definition shall have the
meanings set forth in the Merger Agreement (as defined herein).
WHEREAS, as of the date hereof, Stockholder owns or controls 386,793 shares
of Class A Common Stock, par value $.01 per share (the "Class A Company Common
Stock"), of Saratoga Beverage Group, Inc., a Delaware corporation (the
"Company") and no shares of Class B Common Stock, par value $0.01 per share of
the Company (the "Class B Common Stock") (all such shares of Class A Common
Stock and Class B Common Stock and any shares of Class A Common Stock or Class B
Common Stock of which ownership (either beneficially or of record) or control is
hereafter acquired by the Stockholder prior to the termination of this Agreement
being referred to herein as the "Shares");
WHEREAS, Purchaser, NCP-SBG Recapitalization Corp., a Delaware corporation
("MergerCo"), and the Company are entering into a Stock Purchase Agreement and
Agreement and Plan of Merger, dated as of even date herewith (as the same may be
amended from time to time, the "Merger Agreement"), which provides, upon the
terms and subject to the conditions thereof, for the merger of MergerCo with and
into the Company (the "Merger"); and
WHEREAS, as a condition to the willingness of Purchaser and MergerCo to
enter into the Merger Agreement, Purchaser and MergerCo have required that the
Stockholder agree, and, in order to induce Purchaser and MergerCo to enter into
the Merger Agreement, the Stockholder has agreed, subject to the terms and
conditions hereof, to vote all Shares he or it then owns or controls at the time
of the Special Meeting in favor of the adoption of the Merger Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants set forth herein and in the Merger Agreement, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
<PAGE> 2
ARTICLE I
TRANSFER AND VOTING OF SHARES
Section 1.1 Transfer of Shares. (a) During the term of this Agreement, the
Stockholder shall not (i) take any action that would make any representation or
warranty of Stockholder contained herein untrue or incorrect or have the effect
of preventing or disabling Stockholder from performing its obligations under
this Agreement, or (ii) except pursuant to the terms of the Merger Agreement and
this Agreement (A) sell, tender, pledge or otherwise dispose of any of the
Shares, (B) deposit the Shares into a voting trust or enter into a voting
agreement or arrangement with respect to such Shares or grant any proxy or power
of attorney with respect thereto or (C) enter into any instrument or arrangement
with respect to the direct or indirect acquisition or sale, assignment, transfer
or other disposition of any Shares; provided, however, that the Stockholder
shall have the right to transfer Shares by gift to any Person directly or
indirectly controlled by the Stockholder or through the laws of descent,
provided, further that such transferee agrees in writing to become a party to
this Agreement.
(b) Stop Transfer. The Stockholder shall not request that the Company
register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of the Shares, unless such transfer is
made in compliance with this Agreement.
Section 1.2 Voting of Shares; Further Assurances. (a) The Stockholder, with
respect to all Shares, does hereby irrevocably (until the termination hereof in
accordance with Section 5.12) constitute and appoint NCP-SBG with full power of
substitution, as his or its true and lawful attorney and proxy, for and in his
or its name, place and stead, to vote each of such Shares as his or its proxy,
at any annual, special or adjourned meeting of the stockholders of the Company
(including the right to sign his or its name, as stockholder, to any consent,
certificate or other document relating to the Company that may be permitted or
required by applicable Law) (i) in favor of the adoption of the Merger
Agreement, (ii) against any transaction pursuant to an Acquisition Proposal (as
defined herein) or any other action or agreement that would result in a breach
of any covenant, representation or warranty or any other obligation or agreement
of the Company under the Merger Agreement or which could result in any of the
conditions to the Company's obligations under the Merger Agreement not being
fulfilled or could impede, interfere with, delay or materially adversely affect
the Merger or the transactions contemplated hereby or by the Merger Agreement
and (iii) in favor of any other matter necessary to the consummation of the
transactions contemplated by the Merger Agreement. THE STOCKHOLDER ACKNOWLEDGES
THAT PURCHASER AND MERGERCO ARE ENTERING INTO THE MERGER AGREEMENT IN RELIANCE
UPON THIS
2
<PAGE> 3
AGREEMENT AND INTENDS THIS PROXY TO BE IRREVOCABLE (UNTIL THE TERMINATION HEREOF
IN ACCORDANCE WITH SECTION 5.12) AND COUPLED WITH AN INTEREST AND WILL TAKE SUCH
FURTHER ACTION AND EXECUTE SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO
EFFECTUATE THE INTENT OF THIS PROXY AND HEREBY REVOKES ANY PROXY PREVIOUSLY
GRANTED BY THE STOCKHOLDER WITH RESPECT TO THE SHARES. NOTWITHSTANDING THE
FOREGOING, THIS PROXY SHALL BE AUTOMATICALLY REVOKED WITHOUT ANY FURTHER ACTION
ON THE PART OF ANY STOCKHOLDER OR PURCHASER UPON THE TERMINATION HEREOF IN
ACCORDANCE WITH SECTION 5.12. The Stockholder further agrees to cause all Shares
controlled or owned by him beneficially and of record to be voted in accordance
with the foregoing. The Stockholder hereby acknowledges both receipt of a copy
of the Merger Agreement and that such Stockholder understands the contents
thereof.
(b) The Stockholder shall perform such further acts and execute such
further documents and instruments as may reasonably be required to vest in
Purchaser the power to carry out the provisions of this Agreement; provided,
however, the Stockholder shall not be required to pay any monies or incur any
liability in connection with the foregoing.
(c) The Stockholder shall take all such other actions as such other actions
as shall be reasonably requested by Purchaser in order to assist in, and shall
cooperate with Purchaser in connection with, the consummation of the
transactions contemplated by the Merger Agreement; provided, however, the
Stockholder shall not be required to pay any monies or incur any liability in
connection with the foregoing.
Section 1.3 Waiver of Appraisal Rights and Dissenter's Rights. The
Stockholder hereby waives any rights of appraisal or rights to dissent that
Stockholder may have under applicable Law in connection with the Merger.
Section 1.4 Certain Events. The Stockholder agrees that this Agreement and
the obligations hereunder shall attach to the Shares and shall be binding upon
any Person to which legal or beneficial ownership of such Shares shall pass,
whether by operation of Law or otherwise, including, without limitation, the
Stockholder's heirs, guardians, administrators or successors or as a result of
any divorce.
3
<PAGE> 4
ARTICLE II
NON-SOLICITATION
Section 2.1 Acquisition Proposals. The Stockholder shall not, directly or
indirectly, through any representative, 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 substantially all of the assets of, or any
equity interest in, the Company or any of its Subsidiaries or any
recapitalization, business combination or similar transaction with the Company
or any of its Subsidiaries (any communication with respect to the foregoing
being an "Acquisition Proposal") or enter into any agreement with respect to, or
sell, transfer or otherwise dispose of any shares of Company Common Stock
pursuant to, any Acquisition Proposal. The Stockholder will immediately cease
all existing activities, discussions and negotiations with any parties conducted
heretofore with respect to any Acquisition Proposal. From and after the
execution of this Agreement, the Stockholder shall as promptly as practicable
advise Purchaser in writing of the receipt, directly or indirectly, of any
inquiries, discussions, negotiations or proposals relating to an Acquisition
Proposal that the Stockholder receives (including the material terms thereof and
the identity of the other party or parties involved) and furnish to Purchaser
within two Business Days of such receipt an accurate description of all material
terms (including any changes or adjustments to such terms as a result of
negotiations or otherwise) of any such written proposal in addition to any
information provided to any third party relating thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDER
The Stockholder hereby represents and warrants to Purchaser as follows:
Section 3.1 Authorization. The Stockholder has the legal capacity, power
and authority to enter into, and perform all of his or its obligations under,
this Agreement. This Agreement has been duly executed and delivered by the
Stockholder and constitutes the legal, valid and binding obligation of the
Stockholder, enforceable against the Stockholder in accordance with its terms.
Section 3.2 No Conflict; Consents. (a) Neither the execution and delivery
of this Agreement, nor the consummation of the transactions contemplated hereby,
will result in (with or without notice or lapse of time or both) (i) any breach,
violation or default under any agreement or instrument to which the Stockholder
is a party or by which the
4
<PAGE> 5
Stockholder or his or its properties or assets are bound, (ii) the violation of
any Law applicable to or affecting the Stockholder of any of his or its
properties or assets, or (iii) the creation of any Lien on the Stockholder or
his or its properties or assets, except the encumbrances and proxies on the
shares created hereby. There is no beneficiary or holder of a voting trust
certificate or other interest of any trust of which the Stockholder is a trustee
whose consent is required for the execution and delivery of this Agreement or
the consummation by the Stockholder of the transactions contemplated by this
Agreement. If such Stockholder is married and such Stockholder's Shares
constitute community property or otherwise require spousal or other approval for
this Agreement to be legal, valid and binding, this Agreement has been duly
authorized, executed and delivered by, and constitutes a valid and binding
agreement of, such Stockholder's spouse, enforceable against such person in
accordance with its terms.
(b) No Governmental Approval of any Governmental Authority is necessary for
the execution, delivery or performance by it of this Agreement or the
consummation of the transactions contemplated hereby, except for applicable
requirements, if any, of the Exchange Act and the HSR Act.
Section 3.3 Title to Shares. Schedule A sets forth the number and class of
Shares with respect to which the Stockholder is either (i) the record holder and
beneficial owner; (ii) the general partner of a limited partnership that is the
record holder, and whose beneficiaries are the beneficial owners; or (iii) the
beneficial owner but not the record holder. The Stockholder has (i) sole power
of disposition; (ii) sole voting power and (iii) sole power to demand appraisal
rights, in each case with respect to all of the Shares and with no restrictions
on such rights, subject to applicable federal securities laws and the terms of
this Agreement. The Shares and the certificates representing the Shares are now
and at all times during the term hereof will be held by the Stockholder, or by a
nominee or custodian for the benefit of such Stockholder, free and clear of all
Liens, proxies, voting trusts or agreements, understandings, arrangements or any
other encumbrances whatsoever, except for any such encumbrances or proxies
arising hereunder and except for the Stockholder Agreement, dated as of October
13, 1998, by and among the Company, Steven Bogen, Robin Prever and Anthony
Malatino and the Stockholders' Agreement, as of October 22, 1998 between Robin
Prever and Anthony Malatino.
Section 3.4 No Brokers. No broker, investment banker, financial adviser or
other Person is entitled to any broker's, finder's, financial adviser's or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of such Stockholder.
5
<PAGE> 6
Section 3.5 Stockholders Agreement. The Stockholder hereby covenants and
agrees that, as of the Effective Time, he or it will enter into a Stockholders
Agreement substantially in the form set forth in Exhibit A hereto.
Section 3.6 Merger Agreement Consideration. The Stockholder hereby
acknowledges and agrees that (i) the consideration to be received by such
Stockholder pursuant to the Merger Agreement is different in form and kind than
the consideration to be received by certain other stockholders of the Company,
(ii) subject to the terms and conditions of the Merger Agreement, each Cashed
Out Share (as defined in the Merger Agreement) held by it will be converted
pursuant to the Merger Agreement into the right to receive, without interest,
cash in the amount of the Per Share Merger Consideration (as defined in the
Merger Agreement) and each Rollover Share (as defined in the Merger Agreement)
held by it will be converted pursuant to the Merger Agreement into the right to
receive a number of shares of Surviving Corporation Common Stock (as defined in
the Merger Agreement) equal to the quotient of (x) the Per Share Merger
Consideration divided by (y) the Per Share Amount (as defined in the Merger
Agreement), and (iii) such consideration is equal in value to the consideration
to be received by such other stockholders. The Stockholder hereby waives any and
all claims against the Company and the other parties to the Merger Agreement
with respect to the adequacy of the consideration received by any Stockholder
thereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Purchaser hereby represent and warrant to the Stockholder as follows:
Section 4.1 Due Organization; Authorization. Purchaser is duly organized
and validly existing under the laws of the State of Delaware. Purchaser has all
necessary limited partnership power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby by Purchaser have been duly authorized by all necessary
limited partnership action on the part of Purchaser. This Agreement has been
duly executed and delivered by Purchaser and constitutes the legal, valid and
binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms.
Section 4.2 No Conflict; Consents. (a) Neither the execution and delivery
of this Agreement, nor the consummation of the transactions contemplated hereby,
will result in (with or without notice or lapse of time or both) (i) any breach,
violation or default under
6
<PAGE> 7
(x) any provision of the Organizational Documents of Purchaser, (y) any Law
applicable to or affecting Purchaser or any of its properties or assets, or (z)
any agreement or instrument to which Purchaser is a party or by which Purchaser
or any of its properties or assets are bound, or (ii) the creation of any Lien
on Purchaser or its properties or assets.
(b) No Governmental Approval of any Governmental Authority is necessary for
the execution, delivery or performance by it of this Agreement or the
consummation of the transactions contemplated hereby, except for applicable
requirements, if any, of the Exchange Act and the HSR Act.
Section 4.3 No Brokers. No broker, investment banker, financial adviser or
other Person is entitled to any broker's, finder's, financial adviser's or other
similar fee or commission from the Stockholder in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
NCP-SBG or its Affiliates.
ARTICLE V
GENERAL PROVISIONS
Section 5.1 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed, certified or registered mail with postage prepaid, (c)
sent by next-day or overnight mail or delivery or (d) sent by telecopy or
telegram, as follows:
(a) if to Purchaser to it:
c/o North Castle Partners, L.L.C.
60 Arch Street
Greenwich, Connecticut 06830
Facsimile: (203) 618-1860
Telephone: (203) 862-3250
Attention: Peter J. Shabecoff
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Facsimile: (212) 909-6836
Telephone: (212) 909-6000
Attention: Franci J. Blassberg, Esq.
7
<PAGE> 8
(b) If to Stockholder to the address set forth on the signature page
hereto with a copy to:
Bourne Noll & Kenyon
382 Springfield Avenue
Summit, NJ 07902-0690
Facsimile: (908) 277-6808
Telephone: (908) 277-2200
Attention: John F. Kuntz, Esq.
or, in each case, at such other address as may be specified in writing to the
other parties hereto.
All such notices, requests, demands, waivers and other communications shall
be deemed to have been received (w) if by personal delivery on the day after
such delivery, (x) if by certified or registered mail, on the seventh Business
Day after the mailing thereof, (y) if by next-day or overnight mail or delivery,
on the day delivered, (z) if by telecopy or telegram, on the next day following
the day on which such telecopy or telegram was sent, provided that a copy is
also sent by certified or registered mail.
Section 5.2 Severability. If any provision, including any phrase, sentence,
clause, section or subsection, of this Agreement is invalid, inoperative or
unenforceable for any reason, such circumstances shall not have the effect of
rendering such provision in question invalid, inoperative or unenforceable in
any other case or circumstance, or of rendering any other provision herein
contained invalid, inoperative, or unenforceable to any extent whatsoever.
Section 5.3 Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof.
Section 5.4 Assignment. Except in connection with a transfer of Shares
otherwise permitted hereunder, this Agreement shall not be assignable or
otherwise transferable by any party hereto without the prior written consent of
parties hereto, and any purported assignment or other transfer without such
consent shall be void and unenforceable; provided that Purchaser may assign this
Agreement or any of its rights and obligations hereunder to any of its
Affiliates or any other Person to whom it has validly assigned its rights under
the Merger Agreement.
Section 5.5 Amendment, Waivers, etc. No amendment, modification or
discharge of this Agreement, and no waiver hereunder, shall be valid or binding
unless set
8
<PAGE> 9
forth in writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought. Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the party granting such waiver
in any other respect or at any other time. Neither the waiver by any of the
parties hereto of a breach of or a default under any of the provisions of this
Agreement, nor the failure by any of the parties, on one or more occasions, to
enforce any of the provisions of this Agreement or to exercise any right or
privilege hereunder, shall be construed as a waiver of any other breach or
default of a similar nature, or as a waiver of any of such provisions, rights or
privileges hereunder. The rights and remedies herein provided are cumulative and
none is exclusive of any other, or of any rights or remedies that any party may
otherwise have at law or in equity.
Section 5.6 No Third Party Beneficiaries. Nothing in this Agreement shall
confer any rights upon any person or entity other than the parties hereto and
their respective heirs, successors and permitted assigns, except that the
parties hereto hereby agree that the Company is a third party beneficiary of
this Agreement.
Section 5.7 Specific Performance. The parties hereto agree that irreparable
harm 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 5.8 Governing Law. (a) EXCEPT TO THE EXTENT THE LAWS OF THE STATE
OF DELAWARE MANDATORILY APPLY, THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS,
INCLUDING AS TO VALIDITY, INTERPRETATION AND EFFECT, BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS RULES THEREOF TO
THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES
OF AMERICA LOCATED IN THE COUNTY OF NEW YORK SOLELY IN RESPECT OF THE
INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMENT AND OF THE
DOCUMENTS REFERRED TO IN THIS AGREEMENT, AND IN RESPECT OF THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY. EACH PARTY HEREBY WAIVES AND AGREES NOT TO
ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR THE INTERPRETATION
AND ENFORCEMENT HEREOF, OR ANY SUCH DOCUMENT OR IN RESPECT OF ANY SUCH
TRANSACTION, THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT
MAINTAINABLE IN SUCH COURTS OR THAT THE VENUE THEREOF MAY
9
<PAGE> 10
NOT BE APPROPRIATE OR THAT THIS AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE
ENFORCED IN OR BY SUCH COURTS. EACH PARTY HEREBY CONSENTS TO AND GRANTS ANY SUCH
COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER
OF ANY SUCH DISPUTE AND AGREE THAT THE MAILING OF PROCESS OR OTHER PAPERS IN
CONNECTION WITH ANY SUCH ACTION OR PROCEEDING IN THE MANNER PROVIDED IN SECTION
5.1 OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID AND
SUFFICIENT SERVICE THEREOF.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT
SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OR ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH,
TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH PARTY MAKES THIS
WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 5.8(b).
Section 5.9 Headings; Counterparts. The headings contained in this
Agreement are for purposes of convenience only and shall not affect the meaning
or interpretation of this Agreement. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.
Section 5.10 Capacity. Purchaser hereby acknowledges that the Stockholder
is entering into this Agreement solely in his or its capacity as a record and
beneficial owner of the Shares, and nothing contained herein shall impose any
obligation on the Stockholder in his or its capacity as a director, officer or
employee of the Company or limit or restrict any actions taken or to be taken by
him or it in any such capacity.
10
<PAGE> 11
Section 5.11 Definitions; Construction. For purposes of this Agreement:
(i) "beneficially own" or "beneficial ownership" with respect to any
securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not in
writing. Without duplicative counting of the same securities by the same
holder, securities beneficially owned by a Person shall include securities
beneficially owned by all other Persons with whom such Person would
constitute a "group" as described in Section 13(d)(3) of the Exchange Act.
(ii) In the event of a stock dividend or distribution, or any change in the
Company Common Stock by reason of any stock dividend, split-up,
recapitalization, combination, exchange of shares or the like, the term
"Shares" shall be deemed to refer to and include the Shares as well as all
such stock dividends and distributions and any shares into which or for which
any or all of the Shares may be changed or exchanged.
Section 5.12 Termination. Notwithstanding anything in this Agreement to the
contrary, the obligations of the Stockholder pursuant to this Agreement shall
terminate upon the earlier of (i) the termination of the Merger Agreement, in
accordance with its terms, for any reason and (ii) the consummation of the
Merger.
11
<PAGE> 12
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
NCP-SBG, L.P.
By: NCP-SBG GP, L.LC.,
its General Partner
By: /s/ Peter J. Shabecoff
-------------------------------
Name: Peter J. Shabecoff
Title: Executive Vice President
/s/ Steven Bogen
----------------------------------
STEVEN BOGEN
Address of Stockholder:
81 Dahlia Street
Staten Island, NY 10312
12
<PAGE> 13
SCHEDULE A
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Number of Shares of Number of Shares of
Stockholder is the: Class A Common Stock Class B Common Stock
- ------------------- -------------------- --------------------
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Record and beneficial 386,793 None
owner
- -------------------------------------------------------------------------------------------
General partner of a limited None None
partnership that is the
record owner of, and
whose beneficiaries are the
beneficial owners of
- -------------------------------------------------------------------------------------------
Beneficial owner but not None None
the record holder
- -------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 1
VOTING AGREEMENT
VOTING AGREEMENT, dated as of January 5, 2000 (this "Agreement"), among
NCP-SBG, L.P., a Delaware limited partnership ("Purchaser"), and Pershing
Securities Limited ("Stockholder"). Capitalized terms used herein without
definition shall have the meanings set forth in the Merger Agreement (as defined
herein).
WHEREAS, as of the date hereof, Stockholder owns or controls 400,000 shares
of Class A Common Stock, par value $.01 per share (the "Class A Company Common
Stock"), of Saratoga Beverage Group, Inc., a Delaware corporation (the
"Company"), and no shares of Class B Common Stock, par value $0.01 per share of
the Company (the "Class B Common Stock") (all such shares of Class A Common
Stock and Class B Common Stock and any shares of Class A Common Stock or Class B
Common Stock of which ownership (either beneficially or of record) or control is
hereafter acquired by the Stockholder prior to the termination of this Agreement
being referred to herein as the "Shares");
WHEREAS, Purchaser, NCP-SBG Recapitalization Corp., a Delaware corporation
("MergerCo"), and the Company are entering into a Stock Purchase Agreement and
Agreement and Plan of Merger, dated as of even date herewith (as the same may be
amended from time to time, the "Merger Agreement"), which provides, upon the
terms and subject to the conditions thereof, for the merger of MergerCo with and
into the Company (the "Merger"); and
WHEREAS, as a condition to the willingness of Purchaser and MergerCo to
enter into the Merger Agreement, Purchaser and MergerCo have required that the
Stockholder agree, and, in order to induce Purchaser and MergerCo to enter into
the Merger Agreement, the Stockholder has agreed, subject to the terms and
conditions hereof, to vote all Shares he or it then owns or controls at the time
of the Special Meeting in favor of the adoption of the Merger Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants set forth herein and in the Merger Agreement, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
<PAGE> 2
ARTICLE I
TRANSFER AND VOTING OF SHARES
Section 1.1 Transfer of Shares. (a) During the term of this Agreement, the
Stockholder shall not (i) take any action that would make any representation or
warranty of Stockholder contained herein untrue or incorrect or have the effect
of preventing or disabling Stockholder from performing its obligations under
this Agreement, or (ii) except pursuant to the terms of the Merger Agreement and
this Agreement (A) sell, tender, pledge or otherwise dispose of any of the
Shares, (B) deposit the Shares into a voting trust or enter into a voting
agreement or arrangement with respect to such Shares or grant any proxy or power
of attorney with respect thereto or (C) enter into any instrument or arrangement
with respect to the direct or indirect acquisition or sale, assignment, transfer
or other disposition of any Shares; provided, however, that the Stockholder
shall have the right to transfer Shares by gift to any Person directly or
indirectly controlled by the Stockholder or through the laws of descent,
provided, further that such transferee agrees in writing to become a party to
this Agreement.
(b) Stop Transfer. The Stockholder shall not request that the Company
register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of the Shares, unless such transfer is
made in compliance with this Agreement.
Section 1.2 Voting of Shares; Further Assurances. (a) The Stockholder, with
respect to all Shares, does hereby irrevocably (until the termination hereof in
accordance with Section 5.12) constitute and appoint NCP-SBG with full power of
substitution, as his or its true and lawful attorney and proxy, for and in his
or its name, place and stead, to vote each of such Shares as his or its proxy,
at any annual, special or adjourned meeting of the stockholders of the Company
(including the right to sign his or its name, as stockholder, to any consent,
certificate or other document relating to the Company that may be permitted or
required by applicable Law) (i) in favor of the adoption of the Merger
Agreement, (ii) against any transaction pursuant to an Acquisition Proposal (as
defined herein) or any other action or agreement that would result in a breach
of any covenant, representation or warranty or any other obligation or agreement
of the Company under the Merger Agreement or which could result in any of the
conditions to the Company's obligations under the Merger Agreement not being
fulfilled or could impede, interfere with, delay or materially adversely affect
the Merger or the transactions contemplated hereby or by the Merger Agreement
and (iii) in favor of any other matter necessary to the consummation of the
transactions contemplated by the Merger Agreement. THE STOCKHOLDER ACKNOWLEDGES
THAT PURCHASER AND MERGERCO ARE ENTERING INTO THE MERGER AGREEMENT IN RELIANCE
UPON THIS
2
<PAGE> 3
AGREEMENT AND INTENDS THIS PROXY TO BE IRREVOCABLE (UNTIL THE TERMINATION HEREOF
IN ACCORDANCE WITH SECTION 5.12) AND COUPLED WITH AN INTEREST AND WILL TAKE SUCH
FURTHER ACTION AND EXECUTE SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO
EFFECTUATE THE INTENT OF THIS PROXY AND HEREBY REVOKES ANY PROXY PREVIOUSLY
GRANTED BY THE STOCKHOLDER WITH RESPECT TO THE SHARES. NOTWITHSTANDING THE
FOREGOING, THIS PROXY SHALL BE AUTOMATICALLY REVOKED WITHOUT ANY FURTHER ACTION
ON THE PART OF ANY STOCKHOLDER OR PURCHASER UPON THE TERMINATION HEREOF IN
ACCORDANCE WITH SECTION 5.12. The Stockholder further agrees to cause all Shares
controlled or owned by him beneficially and of record to be voted in accordance
with the foregoing. The Stockholder hereby acknowledges both receipt of a copy
of the Merger Agreement and that such Stockholder understands the contents
thereof.
(b) The Stockholder shall perform such further acts and execute such
further documents and instruments as may reasonably be required to vest in
Purchaser the power to carry out the provisions of this Agreement; provided,
however, the Stockholder shall not be required to pay any monies or incur any
liability in connection with the foregoing.
(c) The Stockholder shall take all such other actions as such other actions
as shall be reasonably requested by Purchaser in order to assist in, and shall
cooperate with Purchaser in connection with, the consummation of the
transactions contemplated by the Merger Agreement; provided, however, the
Stockholder shall not be required to pay any monies or incur any liability in
connection with the foregoing.
Section 1.3 Waiver of Appraisal Rights and Dissenter's Rights. The
Stockholder hereby waives any rights of appraisal or rights to dissent that
Stockholder may have under applicable Law in connection with the Merger.
Section 1.4 Certain Events. The Stockholder agrees that this Agreement and
the obligations hereunder shall attach to the Shares and shall be binding upon
any Person to which legal or beneficial ownership of such Shares shall pass,
whether by operation of Law or otherwise, including, without limitation, the
Stockholder's heirs, guardians, administrators or successors or as a result of
any divorce.
3
<PAGE> 4
ARTICLE II
NON-SOLICITATION
Section 2.1 Acquisition Proposals. The Stockholder shall not, directly or
indirectly, through any representative, 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 substantially all of the assets of, or any
equity interest in, the Company or any of its Subsidiaries or any
recapitalization, business combination or similar transaction with the Company
or any of its Subsidiaries (any communication with respect to the foregoing
being an "Acquisition Proposal") or enter into any agreement with respect to, or
sell, transfer or otherwise dispose of any shares of Company Common Stock
pursuant to, any Acquisition Proposal. The Stockholder will immediately cease
all existing activities, discussions and negotiations with any parties conducted
heretofore with respect to any Acquisition Proposal. From and after the
execution of this Agreement, the Stockholder shall as promptly as practicable
advise Purchaser in writing of the receipt, directly or indirectly, of any
inquiries, discussions, negotiations or proposals relating to an Acquisition
Proposal that the Stockholder receives (including the material terms thereof and
the identity of the other party or parties involved) and furnish to Purchaser
within two Business Days of such receipt an accurate description of all material
terms (including any changes or adjustments to such terms as a result of
negotiations or otherwise) of any such written proposal in addition to any
information provided to any third party relating thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDER
The Stockholder hereby represents and warrants to Purchaser as follows:
Section 3.1 Authorization. The Stockholder has the legal capacity, power
and authority to enter into, and perform all of his or its obligations under,
this Agreement. This Agreement has been duly executed and delivered by the
Stockholder and constitutes the legal, valid and binding obligation of the
Stockholder, enforceable against the Stockholder in accordance with its terms.
Section 3.2 No Conflict; Consents. (a) Neither the execution and delivery
of this Agreement, nor the consummation of the transactions contemplated hereby,
will result in (with or without notice or lapse of time or both) (i) any breach,
violation or default under any agreement or instrument to which the Stockholder
is a party or by which the
4
<PAGE> 5
Stockholder or his or its properties or assets are bound, (ii) the violation of
any Law applicable to or affecting the Stockholder of any of his or its
properties or assets, or (iii) the creation of any Lien on the Stockholder or
his or its properties or assets, except the encumbrances and proxies on the
shares created hereby. There is no beneficiary or holder of a voting trust
certificate or other interest of any trust of which the Stockholder is a trustee
whose consent is required for the execution and delivery of this Agreement or
the consummation by the Stockholder of the transactions contemplated by this
Agreement. If such Stockholder is married and such Stockholder's Shares
constitute community property or otherwise require spousal or other approval for
this Agreement to be legal, valid and binding, this Agreement has been duly
authorized, executed and delivered by, and constitutes a valid and binding
agreement of, such Stockholder's spouse, enforceable against such person in
accordance with its terms.
(b) No Governmental Approval of any Governmental Authority is necessary for
the execution, delivery or performance by it of this Agreement or the
consummation of the transactions contemplated hereby, except for applicable
requirements, if any, of the Exchange Act and the HSR Act.
Section 3.3 Title to Shares. Schedule A sets forth the number and class of
Shares with respect to which the Stockholder is either (i) the record holder and
beneficial owner; (ii) the general partner of a limited partnership that is the
record holder, and whose beneficiaries are the beneficial owners; or (iii) the
beneficial owner but not the record holder. The Stockholder has (i) sole power
of disposition; (ii) sole voting power and (iii) sole power to demand appraisal
rights, in each case with respect to all of the Shares and with no restrictions
on such rights, subject to applicable federal securities laws and the terms of
this Agreement. The Shares and the certificates representing the Shares are now
and at all times during the term hereof will be held by the Stockholder, or by a
nominee or custodian for the benefit of such Stockholder, free and clear of all
Liens, proxies, voting trusts or agreements, understandings, arrangements or any
other encumbrances whatsoever, except for any such encumbrances or proxies
arising hereunder and except for the Stockholder Agreement, dated as of October
13, 1998, by and among the Company, Steven Bogen, Robin Prever and Anthony
Malatino and the Stockholders' Agreement, as of October 22, 1998 between Robin
Prever and Anthony Malatino.
Section 3.4 No Brokers. No broker, investment banker, financial adviser or
other Person is entitled to any broker's, finder's, financial adviser's or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of such Stockholder.
5
<PAGE> 6
Section 3.5 Stockholders Agreement. The Stockholder hereby covenants and
agrees that, as of the Effective Time, he or it will enter into a Stockholders
Agreement substantially in the form set forth in Exhibit A hereto.
Section 3.6 Merger Agreement Consideration. The Stockholder hereby
acknowledges and agrees that (i) the consideration to be received by such
Stockholder pursuant to the Merger Agreement is different in form and kind than
the consideration to be received by certain other stockholders of the Company,
(ii) subject to the terms and conditions of the Merger Agreement, each Cashed
Out Share (as defined in the Merger Agreement) held by it will be converted
pursuant to the Merger Agreement into the right to receive, without interest,
cash in the amount of the Per Share Merger Consideration (as defined in the
Merger Agreement) and each Rollover Share (as defined in the Merger Agreement)
held by it will be converted pursuant to the Merger Agreement into the right to
receive a number of shares of Surviving Corporation Common Stock (as defined in
the Merger Agreement) equal to the quotient of (x) the Per Share Merger
Consideration divided by (y) the Per Share Amount (as defined in the Merger
Agreement), and (iii) such consideration is equal in value to the consideration
to be received by such other stockholders. The Stockholder hereby waives any and
all claims against the Company and the other parties to the Merger Agreement
with respect to the adequacy of the consideration received by any Stockholder
thereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Purchaser hereby represent and warrant to the Stockholder as follows:
Section 4.1 Due Organization; Authorization. Purchaser is duly organized
and validly existing under the laws of the State of Delaware. Purchaser has all
necessary limited partnership power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby by Purchaser have been duly authorized by all necessary
limited partnership action on the part of Purchaser. This Agreement has been
duly executed and delivered by Purchaser and constitutes the legal, valid and
binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms.
Section 4.2 No Conflict; Consents. (a) Neither the execution and delivery
of this Agreement, nor the consummation of the transactions contemplated hereby,
will result in (with or without notice or lapse of time or both) (i) any breach,
violation or default under
6
<PAGE> 7
(x) any provision of the Organizational Documents of Purchaser, (y) any Law
applicable to or affecting Purchaser or any of its properties or assets, or (z)
any agreement or instrument to which Purchaser is a party or by which Purchaser
or any of its properties or assets are bound, or (ii) the creation of any Lien
on Purchaser or its properties or assets.
(b) No Governmental Approval of any Governmental Authority is necessary for
the execution, delivery or performance by it of this Agreement or the
consummation of the transactions contemplated hereby, except for applicable
requirements, if any, of the Exchange Act and the HSR Act.
Section 4.3 No Brokers. No broker, investment banker, financial adviser or
other Person is entitled to any broker's, finder's, financial adviser's or other
similar fee or commission from the Stockholder in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
NCP-SBG or its Affiliates.
ARTICLE V
GENERAL PROVISIONS
Section 5.1 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed, certified or registered mail with postage prepaid, (c)
sent by next-day or overnight mail or delivery or (d) sent by telecopy or
telegram, as follows:
(a) if to Purchaser to it:
c/o North Castle Partners, L.L.C.
60 Arch Street
Greenwich, Connecticut 06830
Facsimile: (203) 618-1860
Telephone: (203) 862-3250
Attention: Peter J. Shabecoff
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Facsimile: (212) 909-6836
Telephone: (212) 909-6000
Attention: Franci J. Blassberg, Esq.
7
<PAGE> 8
(b) If to Stockholder to the address set forth on the signature page
hereto with a copy to:
Bourne Noll & Kenyon
382 Springfield Avenue
Summit, NJ 07902-0690
Facsimile: (908) 277-6808
Telephone: (908) 277-2200
Attention: John F. Kuntz, Esq.
or, in each case, at such other address as may be specified in writing to the
other parties hereto.
All such notices, requests, demands, waivers and other communications shall
be deemed to have been received (w) if by personal delivery on the day after
such delivery, (x) if by certified or registered mail, on the seventh Business
Day after the mailing thereof, (y) if by next-day or overnight mail or delivery,
on the day delivered, (z) if by telecopy or telegram, on the next day following
the day on which such telecopy or telegram was sent, provided that a copy is
also sent by certified or registered mail.
Section 5.2 Severability. If any provision, including any phrase, sentence,
clause, section or subsection, of this Agreement is invalid, inoperative or
unenforceable for any reason, such circumstances shall not have the effect of
rendering such provision in question invalid, inoperative or unenforceable in
any other case or circumstance, or of rendering any other provision herein
contained invalid, inoperative, or unenforceable to any extent whatsoever.
Section 5.3 Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof.
Section 5.4 Assignment. Except in connection with a transfer of Shares
otherwise permitted hereunder, this Agreement shall not be assignable or
otherwise transferable by any party hereto without the prior written consent of
parties hereto, and any purported assignment or other transfer without such
consent shall be void and unenforceable; provided that Purchaser may assign this
Agreement or any of its rights and obligations hereunder to any of its
Affiliates or any other Person to whom it has validly assigned its rights under
the Merger Agreement.
Section 5.5 Amendment, Waivers, etc. No amendment, modification or
discharge of this Agreement, and no waiver hereunder, shall be valid or binding
unless set
8
<PAGE> 9
forth in writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought. Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the party granting such waiver
in any other respect or at any other time. Neither the waiver by any of the
parties hereto of a breach of or a default under any of the provisions of this
Agreement, nor the failure by any of the parties, on one or more occasions, to
enforce any of the provisions of this Agreement or to exercise any right or
privilege hereunder, shall be construed as a waiver of any other breach or
default of a similar nature, or as a waiver of any of such provisions, rights or
privileges hereunder. The rights and remedies herein provided are cumulative and
none is exclusive of any other, or of any rights or remedies that any party may
otherwise have at law or in equity.
Section 5.6 No Third Party Beneficiaries. Nothing in this Agreement shall
confer any rights upon any person or entity other than the parties hereto and
their respective heirs, successors and permitted assigns, except that the
parties hereto hereby agree that the Company is a third party beneficiary of
this Agreement.
Section 5.7 Specific Performance. The parties hereto agree that irreparable
harm 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 5.8 Governing Law. (a) EXCEPT TO THE EXTENT THE LAWS OF THE STATE
OF DELAWARE MANDATORILY APPLY, THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS,
INCLUDING AS TO VALIDITY, INTERPRETATION AND EFFECT, BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS RULES THEREOF TO
THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES
OF AMERICA LOCATED IN THE COUNTY OF NEW YORK SOLELY IN RESPECT OF THE
INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMENT AND OF THE
DOCUMENTS REFERRED TO IN THIS AGREEMENT, AND IN RESPECT OF THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY. EACH PARTY HEREBY WAIVES AND AGREES NOT TO
ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR THE INTERPRETATION
AND ENFORCEMENT HEREOF, OR ANY SUCH DOCUMENT OR IN RESPECT OF ANY SUCH
TRANSACTION, THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT
MAINTAINABLE IN SUCH COURTS OR THAT THE VENUE THEREOF MAY
9
<PAGE> 10
NOT BE APPROPRIATE OR THAT THIS AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE
ENFORCED IN OR BY SUCH COURTS. EACH PARTY HEREBY CONSENTS TO AND GRANTS ANY SUCH
COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER
OF ANY SUCH DISPUTE AND AGREE THAT THE MAILING OF PROCESS OR OTHER PAPERS IN
CONNECTION WITH ANY SUCH ACTION OR PROCEEDING IN THE MANNER PROVIDED IN SECTION
5.1 OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID AND
SUFFICIENT SERVICE THEREOF.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT
SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OR ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH,
TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH PARTY MAKES THIS
WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 5.8(b).
Section 5.9 Headings; Counterparts. The headings contained in this
Agreement are for purposes of convenience only and shall not affect the meaning
or interpretation of this Agreement. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.
Section 5.10 Capacity. Purchaser hereby acknowledges that the Stockholder
is entering into this Agreement solely in his or its capacity as a record and
beneficial owner of the Shares, and nothing contained herein shall impose any
obligation on the Stockholder in his or its capacity as a director, officer or
employee of the Company or limit or restrict any actions taken or to be taken by
him or it in any such capacity.
10
<PAGE> 11
Section 5.11 Definitions; Construction. For purposes of this Agreement:
(i) "beneficially own" or "beneficial ownership" with respect to any
securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not in
writing. Without duplicative counting of the same securities by the same
holder, securities beneficially owned by a Person shall include securities
beneficially owned by all other Persons with whom such Person would
constitute a "group" as described in Section 13(d)(3) of the Exchange Act.
(ii) In the event of a stock dividend or distribution, or any change in the
Company Common Stock by reason of any stock dividend, split-up,
recapitalization, combination, exchange of shares or the like, the term
"Shares" shall be deemed to refer to and include the Shares as well as all
such stock dividends and distributions and any shares into which or for
which any or all of the Shares may be changed or exchanged.
Section 5.12 Termination. Notwithstanding anything in this Agreement to the
contrary, the obligations of the Stockholder pursuant to this Agreement shall
terminate upon the earlier of (i) the termination of the Merger Agreement, in
accordance with its terms, for any reason and (ii) the consummation of the
Merger.
11
<PAGE> 12
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
NCP-SBG, L.P.
By: NCP-SBG GP, L.LC.,
its General Partner
By: /s/ Peter J. Shabecoff
-----------------------------
Name: Peter J. Shabecoff
Title: Executive Vice President
PERSHING SECURITIES LIMITED
By: /s/ Christiane Ann Chambers
------------------------------
Name: Christiane Ann Chambers
Title: Compliance Officer
Address of Stockholder:
Capstan House
#1 Clove Crescent
East India Dock
London E14 2BH
England
12
<PAGE> 13
SCHEDULE A
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Number of Shares of Number of Shares of
Stockholder is the: Class A Common Stock Class B Common Stock
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Record and beneficial 200,000 None
owner
- -----------------------------------------------------------------------------------------------
General partner of a limited None None
partnership that is the
record owner of, and
whose beneficiaries are the
beneficial owners of
- -----------------------------------------------------------------------------------------------
Beneficial owner but not None None
the record holder
- -----------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 1
VOTING AGREEMENT
VOTING AGREEMENT, dated as of January 5, 2000 (this "Agreement"), among
NCP-SBG, L.P., a Delaware limited partnership ("Purchaser"), and Jurg Walker
("Stockholder"). Capitalized terms used herein without definition shall have the
meanings set forth in the Merger Agreement (as defined herein).
WHEREAS, as of the date hereof, Stockholder owns or controls 224,500 shares
of Class A Common Stock, par value $.01 per share (the "Class A Company Common
Stock"), of Saratoga Beverage Group, Inc., a Delaware corporation (the
"Company"), and no shares of Class B Common Stock, par value $0.01 per share of
the Company (the "Class B Common Stock") (all such shares of Class A Common
Stock and Class B Common Stock and any shares of Class A Common Stock or Class B
Common Stock of which ownership (either beneficially or of record) or control is
hereafter acquired by the Stockholder prior to the termination of this Agreement
being referred to herein as the "Shares");
WHEREAS, Purchaser, NCP-SBG Recapitalization Corp., a Delaware corporation
("MergerCo"), and the Company are entering into a Stock Purchase Agreement and
Agreement and Plan of Merger, dated as of even date herewith (as the same may be
amended from time to time, the "Merger Agreement"), which provides, upon the
terms and subject to the conditions thereof, for the merger of MergerCo with and
into the Company (the "Merger"); and
WHEREAS, as a condition to the willingness of Purchaser and MergerCo to
enter into the Merger Agreement, Purchaser and MergerCo have required that the
Stockholder agree, and, in order to induce Purchaser and MergerCo to enter into
the Merger Agreement, the Stockholder has agreed, subject to the terms and
conditions hereof, to vote all Shares he or it then owns or controls at the time
of the Special Meeting in favor of the adoption of the Merger Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants set forth herein and in the Merger Agreement, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
<PAGE> 2
ARTICLE I
TRANSFER AND VOTING OF SHARES
Section 1.1 Transfer of Shares. (a) During the term of this Agreement, the
Stockholder shall not (i) take any action that would make any representation or
warranty of Stockholder contained herein untrue or incorrect or have the effect
of preventing or disabling Stockholder from performing its obligations under
this Agreement, or (ii) except pursuant to the terms of the Merger Agreement and
this Agreement (A) sell, tender, pledge or otherwise dispose of any of the
Shares, (B) deposit the Shares into a voting trust or enter into a voting
agreement or arrangement with respect to such Shares or grant any proxy or power
of attorney with respect thereto or (C) enter into any instrument or arrangement
with respect to the direct or indirect acquisition or sale, assignment, transfer
or other disposition of any Shares; provided, however, that the Stockholder
shall have the right to transfer Shares by gift to any Person directly or
indirectly controlled by the Stockholder or through the laws of descent,
provided, further that such transferee agrees in writing to become a party to
this Agreement.
(b) Stop Transfer. The Stockholder shall not request that the Company
register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of the Shares, unless such transfer is
made in compliance with this Agreement.
Section 1.2 Voting of Shares; Further Assurances. (a) The Stockholder, with
respect to all Shares, does hereby irrevocably (until the termination hereof in
accordance with Section 5.12) constitute and appoint NCP-SBG with full power of
substitution, as his or its true and lawful attorney and proxy, for and in his
or its name, place and stead, to vote each of such Shares as his or its proxy,
at any annual, special or adjourned meeting of the stockholders of the Company
(including the right to sign his or its name, as stockholder, to any consent,
certificate or other document relating to the Company that may be permitted or
required by applicable Law) (i) in favor of the adoption of the Merger
Agreement, (ii) against any transaction pursuant to an Acquisition Proposal (as
defined herein) or any other action or agreement that would result in a breach
of any covenant, representation or warranty or any other obligation or agreement
of the Company under the Merger Agreement or which could result in any of the
conditions to the Company's obligations under the Merger Agreement not being
fulfilled or could impede, interfere with, delay or materially adversely affect
the Merger or the transactions contemplated hereby or by the Merger Agreement
and (iii) in favor of any other matter necessary to the consummation of the
transactions contemplated by the Merger Agreement. THE STOCKHOLDER ACKNOWLEDGES
THAT PURCHASER AND MERGERCO ARE ENTERING INTO THE MERGER AGREEMENT IN RELIANCE
UPON THIS
2
<PAGE> 3
AGREEMENT AND INTENDS THIS PROXY TO BE IRREVOCABLE (UNTIL THE TERMINATION HEREOF
IN ACCORDANCE WITH SECTION 5.12) AND COUPLED WITH AN INTEREST AND WILL TAKE SUCH
FURTHER ACTION AND EXECUTE SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO
EFFECTUATE THE INTENT OF THIS PROXY AND HEREBY REVOKES ANY PROXY PREVIOUSLY
GRANTED BY THE STOCKHOLDER WITH RESPECT TO THE SHARES. NOTWITHSTANDING THE
FOREGOING, THIS PROXY SHALL BE AUTOMATICALLY REVOKED WITHOUT ANY FURTHER ACTION
ON THE PART OF ANY STOCKHOLDER OR PURCHASER UPON THE TERMINATION HEREOF IN
ACCORDANCE WITH SECTION 5.12. The Stockholder further agrees to cause all Shares
controlled or owned by him beneficially and of record to be voted in accordance
with the foregoing. The Stockholder hereby acknowledges both receipt of a copy
of the Merger Agreement and that such Stockholder understands the contents
thereof.
(b) The Stockholder shall perform such further acts and execute such
further documents and instruments as may reasonably be required to vest in
Purchaser the power to carry out the provisions of this Agreement; provided,
however, the Stockholder shall not be required to pay any monies or incur any
liability in connection with the foregoing.
(c) The Stockholder shall take all such other actions as such other actions
as shall be reasonably requested by Purchaser in order to assist in, and shall
cooperate with Purchaser in connection with, the consummation of the
transactions contemplated by the Merger Agreement; provided, however, the
Stockholder shall not be required to pay any monies or incur any liability in
connection with the foregoing.
Section 1.3 Waiver of Appraisal Rights and Dissenter's Rights. The
Stockholder hereby waives any rights of appraisal or rights to dissent that
Stockholder may have under applicable Law in connection with the Merger.
Section 1.4 Certain Events. The Stockholder agrees that this Agreement and
the obligations hereunder shall attach to the Shares and shall be binding upon
any Person to which legal or beneficial ownership of such Shares shall pass,
whether by operation of Law or otherwise, including, without limitation, the
Stockholder's heirs, guardians, administrators or successors or as a result of
any divorce.
3
<PAGE> 4
ARTICLE II
NON-SOLICITATION
Section 2.1 Acquisition Proposals. The Stockholder shall not, directly or
indirectly, through any representative, 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 substantially all of the assets of, or any
equity interest in, the Company or any of its Subsidiaries or any
recapitalization, business combination or similar transaction with the Company
or any of its Subsidiaries (any communication with respect to the foregoing
being an "Acquisition Proposal") or enter into any agreement with respect to, or
sell, transfer or otherwise dispose of any shares of Company Common Stock
pursuant to, any Acquisition Proposal. The Stockholder will immediately cease
all existing activities, discussions and negotiations with any parties conducted
heretofore with respect to any Acquisition Proposal. From and after the
execution of this Agreement, the Stockholder shall as promptly as practicable
advise Purchaser in writing of the receipt, directly or indirectly, of any
inquiries, discussions, negotiations or proposals relating to an Acquisition
Proposal that the Stockholder receives (including the material terms thereof and
the identity of the other party or parties involved) and furnish to Purchaser
within two Business Days of such receipt an accurate description of all material
terms (including any changes or adjustments to such terms as a result of
negotiations or otherwise) of any such written proposal in addition to any
information provided to any third party relating thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDER
The Stockholder hereby represents and warrants to Purchaser as follows:
Section 3.1 Authorization. The Stockholder has the legal capacity, power
and authority to enter into, and perform all of his or its obligations under,
this Agreement. This Agreement has been duly executed and delivered by the
Stockholder and constitutes the legal, valid and binding obligation of the
Stockholder, enforceable against the Stockholder in accordance with its terms.
Section 3.2 No Conflict; Consents. (a) Neither the execution and delivery
of this Agreement, nor the consummation of the transactions contemplated hereby,
will result in (with or without notice or lapse of time or both) (i) any breach,
violation or default under any agreement or instrument to which the Stockholder
is a party or by which the
4
<PAGE> 5
Stockholder or his or its properties or assets are bound, (ii) the violation of
any Law applicable to or affecting the Stockholder of any of his or its
properties or assets, or (iii) the creation of any Lien on the Stockholder or
his or its properties or assets, except the encumbrances and proxies on the
shares created hereby. There is no beneficiary or holder of a voting trust
certificate or other interest of any trust of which the Stockholder is a trustee
whose consent is required for the execution and delivery of this Agreement or
the consummation by the Stockholder of the transactions contemplated by this
Agreement. If such Stockholder is married and such Stockholder's Shares
constitute community property or otherwise require spousal or other approval for
this Agreement to be legal, valid and binding, this Agreement has been duly
authorized, executed and delivered by, and constitutes a valid and binding
agreement of, such Stockholder's spouse, enforceable against such person in
accordance with its terms.
(b) No Governmental Approval of any Governmental Authority is necessary for
the execution, delivery or performance by it of this Agreement or the
consummation of the transactions contemplated hereby, except for applicable
requirements, if any, of the Exchange Act and the HSR Act.
Section 3.3 Title to Shares. Schedule A sets forth the number and class of
Shares with respect to which the Stockholder is either (i) the record holder and
beneficial owner; (ii) the general partner of a limited partnership that is the
record holder, and whose beneficiaries are the beneficial owners; or (iii) the
beneficial owner but not the record holder. The Stockholder has (i) sole power
of disposition; (ii) sole voting power and (iii) sole power to demand appraisal
rights, in each case with respect to all of the Shares and with no restrictions
on such rights, subject to applicable federal securities laws and the terms of
this Agreement. The Shares and the certificates representing the Shares are now
and at all times during the term hereof will be held by the Stockholder, or by a
nominee or custodian for the benefit of such Stockholder, free and clear of all
Liens, proxies, voting trusts or agreements, understandings, arrangements or any
other encumbrances whatsoever, except for any such encumbrances or proxies
arising hereunder and except for the Stockholder Agreement, dated as of October
13, 1998, by and among the Company, Steven Bogen, Robin Prever and Anthony
Malatino and the Stockholders' Agreement, as of October 22, 1998 between Robin
Prever and Anthony Malatino.
Section 3.4 No Brokers. No broker, investment banker, financial adviser or
other Person is entitled to any broker's, finder's, financial adviser's or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of such Stockholder.
5
<PAGE> 6
Section 3.5 Stockholders Agreement. The Stockholder hereby covenants and
agrees that, as of the Effective Time, he or it will enter into a Stockholders
Agreement substantially in the form set forth in Exhibit A hereto.
Section 3.6 Merger Agreement Consideration. The Stockholder hereby
acknowledges and agrees that (i) the consideration to be received by such
Stockholder pursuant to the Merger Agreement is different in form and kind than
the consideration to be received by certain other stockholders of the Company,
(ii) subject to the terms and conditions of the Merger Agreement, each Cashed
Out Share (as defined in the Merger Agreement) held by it will be converted
pursuant to the Merger Agreement into the right to receive, without interest,
cash in the amount of the Per Share Merger Consideration (as defined in the
Merger Agreement) and each Rollover Share (as defined in the Merger Agreement)
held by it will be converted pursuant to the Merger Agreement into the right to
receive a number of shares of Surviving Corporation Common Stock (as defined in
the Merger Agreement) equal to the quotient of (x) the Per Share Merger
Consideration divided by (y) the Per Share Amount (as defined in the Merger
Agreement), and (iii) such consideration is equal in value to the consideration
to be received by such other stockholders. The Stockholder hereby waives any and
all claims against the Company and the other parties to the Merger Agreement
with respect to the adequacy of the consideration received by any Stockholder
thereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Purchaser hereby represent and warrant to the Stockholder as follows:
Section 4.1 Due Organization; Authorization. Purchaser is duly organized
and validly existing under the laws of the State of Delaware. Purchaser has all
necessary limited partnership power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby by Purchaser have been duly authorized by all necessary
limited partnership action on the part of Purchaser. This Agreement has been
duly executed and delivered by Purchaser and constitutes the legal, valid and
binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms.
Section 4.2 No Conflict; Consents. (a) Neither the execution and delivery
of this Agreement, nor the consummation of the transactions contemplated hereby,
will result in (with or without notice or lapse of time or both) (i) any breach,
violation or default under
6
<PAGE> 7
(x) any provision of the Organizational Documents of Purchaser, (y) any Law
applicable to or affecting Purchaser or any of its properties or assets, or (z)
any agreement or instrument to which Purchaser is a party or by which Purchaser
or any of its properties or assets are bound, or (ii) the creation of any Lien
on Purchaser or its properties or assets.
(b) No Governmental Approval of any Governmental Authority is necessary for
the execution, delivery or performance by it of this Agreement or the
consummation of the transactions contemplated hereby, except for applicable
requirements, if any, of the Exchange Act and the HSR Act.
Section 4.3 No Brokers. No broker, investment banker, financial adviser or
other Person is entitled to any broker's, finder's, financial adviser's or other
similar fee or commission from the Stockholder in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
NCP-SBG or its Affiliates.
ARTICLE V
GENERAL PROVISIONS
Section 5.1 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed, certified or registered mail with postage prepaid, (c)
sent by next-day or overnight mail or delivery or (d) sent by telecopy or
telegram, as follows:
(a) if to Purchaser to it:
c/o North Castle Partners, L.L.C.
60 Arch Street
Greenwich, Connecticut 06830
Facsimile: (203) 618-1860
Telephone: (203) 862-3250
Attention: Peter J. Shabecoff
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Facsimile: (212) 909-6836
Telephone: (212) 909-6000
Attention: Franci J. Blassberg, Esq.
7
<PAGE> 8
(b) If to Stockholder to the address set forth on the signature page
hereto with a copy to:
Bourne Noll & Kenyon
382 Springfield Avenue
Summit, NJ 07902-0690
Facsimile: (908) 277-6808
Telephone: (908) 277-2200
Attention: John F. Kuntz, Esq.
or, in each case, at such other address as may be specified in writing to the
other parties hereto.
All such notices, requests, demands, waivers and other communications shall
be deemed to have been received (w) if by personal delivery on the day after
such delivery, (x) if by certified or registered mail, on the seventh Business
Day after the mailing thereof, (y) if by next-day or overnight mail or delivery,
on the day delivered, (z) if by telecopy or telegram, on the next day following
the day on which such telecopy or telegram was sent, provided that a copy is
also sent by certified or registered mail.
Section 5.2 Severability. If any provision, including any phrase, sentence,
clause, section or subsection, of this Agreement is invalid, inoperative or
unenforceable for any reason, such circumstances shall not have the effect of
rendering such provision in question invalid, inoperative or unenforceable in
any other case or circumstance, or of rendering any other provision herein
contained invalid, inoperative, or unenforceable to any extent whatsoever.
Section 5.3 Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof.
Section 5.4 Assignment. Except in connection with a transfer of Shares
otherwise permitted hereunder, this Agreement shall not be assignable or
otherwise transferable by any party hereto without the prior written consent of
parties hereto, and any purported assignment or other transfer without such
consent shall be void and unenforceable; provided that Purchaser may assign this
Agreement or any of its rights and obligations hereunder to any of its
Affiliates or any other Person to whom it has validly assigned its rights under
the Merger Agreement.
Section 5.5 Amendment, Waivers, etc. No amendment, modification or
discharge of this Agreement, and no waiver hereunder, shall be valid or binding
unless set
8
<PAGE> 9
forth in writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought. Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the party granting such waiver
in any other respect or at any other time. Neither the waiver by any of the
parties hereto of a breach of or a default under any of the provisions of this
Agreement, nor the failure by any of the parties, on one or more occasions, to
enforce any of the provisions of this Agreement or to exercise any right or
privilege hereunder, shall be construed as a waiver of any other breach or
default of a similar nature, or as a waiver of any of such provisions, rights or
privileges hereunder. The rights and remedies herein provided are cumulative and
none is exclusive of any other, or of any rights or remedies that any party may
otherwise have at law or in equity.
Section 5.6 No Third Party Beneficiaries. Nothing in this Agreement shall
confer any rights upon any person or entity other than the parties hereto and
their respective heirs, successors and permitted assigns, except that the
parties hereto hereby agree that the Company is a third party beneficiary of
this Agreement.
Section 5.7 Specific Performance. The parties hereto agree that irreparable
harm 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 5.8 Governing Law. (a) EXCEPT TO THE EXTENT THE LAWS OF THE STATE
OF DELAWARE MANDATORILY APPLY, THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS,
INCLUDING AS TO VALIDITY, INTERPRETATION AND EFFECT, BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS RULES THEREOF TO
THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES
OF AMERICA LOCATED IN THE COUNTY OF NEW YORK SOLELY IN RESPECT OF THE
INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMENT AND OF THE
DOCUMENTS REFERRED TO IN THIS AGREEMENT, AND IN RESPECT OF THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY. EACH PARTY HEREBY WAIVES AND AGREES NOT TO
ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR THE INTERPRETATION
AND ENFORCEMENT HEREOF, OR ANY SUCH DOCUMENT OR IN RESPECT OF ANY SUCH
TRANSACTION, THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT
MAINTAINABLE IN SUCH COURTS OR THAT THE VENUE THEREOF MAY
9
<PAGE> 10
NOT BE APPROPRIATE OR THAT THIS AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE
ENFORCED IN OR BY SUCH COURTS. EACH PARTY HEREBY CONSENTS TO AND GRANTS ANY SUCH
COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER
OF ANY SUCH DISPUTE AND AGREE THAT THE MAILING OF PROCESS OR OTHER PAPERS IN
CONNECTION WITH ANY SUCH ACTION OR PROCEEDING IN THE MANNER PROVIDED IN SECTION
5.1 OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID AND
SUFFICIENT SERVICE THEREOF.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT
SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OR ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH,
TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH PARTY MAKES THIS
WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 5.8(b).
Section 5.9 Headings; Counterparts. The headings contained in this
Agreement are for purposes of convenience only and shall not affect the meaning
or interpretation of this Agreement. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.
Section 5.10 Capacity. Purchaser hereby acknowledges that the Stockholder
is entering into this Agreement solely in his or its capacity as a record and
beneficial owner of the Shares, and nothing contained herein shall impose any
obligation on the Stockholder in his or its capacity as a director, officer or
employee of the Company or limit or restrict any actions taken or to be taken by
him or it in any such capacity.
10
<PAGE> 11
Section 5.11 Definitions; Construction. For purposes of this Agreement:
(i) "beneficially own" or "beneficial ownership" with respect to any
securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not in
writing. Without duplicative counting of the same securities by the same
holder, securities beneficially owned by a Person shall include securities
beneficially owned by all other Persons with whom such Person would
constitute a "group" as described in Section 13(d)(3) of the Exchange Act.
(ii) In the event of a stock dividend or distribution, or any change in the
Company Common Stock by reason of any stock dividend, split-up,
recapitalization, combination, exchange of shares or the like, the term
"Shares" shall be deemed to refer to and include the Shares as well as all
such stock dividends and distributions and any shares into which or for
which any or all of the Shares may be changed or exchanged.
Section 5.12 Termination. Notwithstanding anything in this Agreement to the
contrary, the obligations of the Stockholder pursuant to this Agreement shall
terminate upon the earlier of (i) the termination of the Merger Agreement, in
accordance with its terms, for any reason and (ii) the consummation of the
Merger.
11
<PAGE> 12
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
NCP-SBG, L.P.
By: NCP-SBG GP, L.LC.,
its General Partner
By: /s/ Peter J. Shabecoff
---------------------------------
Name: Peter J. Shabecoff
Title: Executive Vice President
/s/ Jurg Walker
------------------------------------
JURG WALKER
Address of Stockholder:
Jurg Walker
c/o Investa AG
Harestrasse 4
Birsfelden, Switzerland 4127
12
<PAGE> 13
SCHEDULE A
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Number of Shares of Number of Shares of
Stockholder is the: Class A Common Stock Class B Common Stock
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Record and beneficial
owner 224,500 None
- ------------------------------------------------------------------------------------------------
General partner of a limited
partnership that is the
record owner of, and
whose beneficiaries are the
beneficial owners of None None
- ------------------------------------------------------------------------------------------------
Beneficial owner but not
the record holder None None
- ------------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 1
================================================================================
SARATOGA BEVERAGE GROUP, INC.
STOCKHOLDERS AGREEMENT
Dated as of January 5, 2000
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE I
GOVERNANCE AND MANAGEMENT OF THE COMPANY
<S> <C> <C>
Section 1.1. Board of Directors.................................................................1
Section 1.2. Governance.........................................................................2
Section 1.3. Indemnification of Directors and Officers..........................................3
ARTICLE II
RESTRICTIONS ON TRANSFER
Section 2.1. Restrictions on Transfer...........................................................3
Section 2.2. Transfers After Second Anniversary of Closing Public Offering, Change
of Control or Exit Event...........................................................4
Section 2.3. Tag-Along Rights...................................................................4
Section 2.4. Take-Along Rights..................................................................5
Section 2.5. Transfer of Covered Securities to Affiliate of NCP-SBG.............................7
Section 2.6. Hold Back Agreements...............................................................7
ARTICLE III
OTHER AGREEMENTS
Section 3.1. Right of First Refusal.............................................................7
Section 3.2. Issuance of Additional Shares of Equity Securities.................................8
Section 3.3. Future Acquisitions................................................................9
ARTICLE IV
DEFINITIONS
Section 4.1. Definitions; Construction..........................................................9
ARTICLE V
MISCELLANEOUS
Section 5.1. Notices...........................................................................12
Section 5.2. Remedies..........................................................................13
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
Section 5.3. Governing Law, etc................................................................14
Section 5.4. Binding Effect....................................................................15
Section 5.5. Assignment........................................................................15
Section 5.6. No Third Party Beneficiaries......................................................15
Section 5.7. Amendment; Waivers, etc...........................................................15
Section 5.8. Legend on Stock Certificates......................................................16
Section 5.9. Entire Agreement..................................................................17
Section 5.10. Severability......................................................................17
Section 5.11. Headings; Counterparts............................................................17
Section 5.12. Subsequent Stockholders...........................................................17
Section 5.13. Reports...........................................................................18
Section 5.14. Certain Agreements................................................................18
Section 5.15. Effectiveness.....................................................................18
</TABLE>
ii
<PAGE> 4
Stockholders Agreement
Schedule A
Reference is made to the Stockholders Agreement, dated January __, 2000,
between Saratoga Beverage Group, Inc., NCP-SBG, L.P., and the other parties
thereto (the "Stockholders Agreement"). The undersigned agrees, by execution
hereof, to become a party to, and to be subject to the rights and obligations
under, the Stockholders Agreement.
------------------------
Name:
Title:
Address:
Date:
SARATOGA BEVERAGE GROUP, INC.
By:
---------------------------
Name:
Title:
<PAGE> 5
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT (this "Agreement"), dated as of January 5,
2000, among Saratoga Beverage Group, Inc., a Delaware corporation (the
"Company"), NCP-SBG, L.P., a Delaware limited partnership ("NCP-SBG"), and the
Persons listed on the signature pages hereto, and each other person who is, or
becomes, a party to this Agreement pursuant to Section 5.12 hereof
(collectively, with NCP-SBG and the Persons listed on the signature pages
hereto, the "Stockholders"). Capitalized terms used herein without definition
shall have the meanings indicated in Article IV.
WHEREAS, upon the terms and subject to the conditions of the
Stock Purchase Agreement and Agreement and Plan of Merger, dated as of the date
hereof (the "Recapitalization Agreement"), among the Company, NCP-SBG and
NCP-SBG Recapitalization Corp., NCP-SBG will acquire shares (the "Purchased
Shares") of common stock, par value $0.01 per share (the "Common Stock"), of the
Company;
WHEREAS, the parties hereto wish to set forth certain rights and
obligations that shall attach to the ownership of Common Stock held by the
Stockholders; and
WHEREAS, it is a condition to the consummation of the
transactions contemplated by the Recapitalization Agreement that the parties
hereto enter into this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
GOVERNANCE AND MANAGEMENT OF THE COMPANY
Section 1.1. Board of Directors. (a) Composition. Subject to the provisions
of this Agreement, the Board of Directors of the Company (the "Board") will
consist initially of seven members: (i) four members nominated by NCP-SBG, and
(ii) three members nominated by Robin Prever. Subject to the provisions of this
Agreement, each Stockholder entitled to vote shall vote their shares of Common
Stock so as to effect the provisions of this Section 1.1(a).
(b) Nominees. NCP-SBG shall nominate all persons for election to the Board,
except that, for so long as she is the Chief Executive Officer of the Company,
<PAGE> 6
(i) Robin Prever shall be entitled to nominate three directors, provided that if
Robin Prever is no longer the Chief Executive Officer of the Company, then so
long as the Rollover Stockholders collectively own at least 5% of the
outstanding Common Stock of the Company, such Rollover Stockholders collectively
shall be entitled to nominate one director. Each Stockholder entitled to vote
shall vote their shares of Common Stock so as to elect such nominees to the
Board.
(c) Removal and Replacement of Nominees. Any director nominated by a party
hereto may be removed at any time, with or without cause, by such party, and
each Stockholder entitled to vote thereon shall vote their shares of Common
Stock as may be required to effect such removal, including voting its shares for
such removal. In addition, at such time as Robin Prever is no longer Chief
Executive Officer of the Company, the Stockholders shall vote their shares of
Common Stock to remove at least two directors nominated by Robin Prever if such
directors shall not have resigned. At any time a vacancy shall be created on the
Board as a result of the death, disability, retirement, resignation or removal
of a director nominated by a party hereto, with or without cause, then such
party shall have the right to nominate a replacement for any director nominated
by it in accordance with Sections 1.1(b), and each Stockholder entitled to vote
shall vote their shares of Common Stock so as to elect such replacement.
(d) Fees and Expenses. The Company will cause each non-employee director of
the Board to be reimbursed for all reasonable out-of-pocket costs and expenses
incurred by him or her in connection with serving as a director. No director
nominated by NCP-SBG who is an officer or employee of North Castle Partners II,
L.L.C. ("NCP") or any Affiliate thereof (other than any portfolio company
controlled by NCP or controlled by any other private investment fund under
common control with NCP) shall be entitled to any fee with respect to his or her
service as a director of the Board at any time at which NCP is providing
consulting services to the Company and its subsidiaries pursuant to the
Consulting Agreement, dated as of the date hereof by and between the Company and
NCP.
(e) Chairperson. The Chairperson of the Board shall be designated by
NCP-SBG from among the directors of the Company.
Section 1.2. Governance. (a) Charter and Bylaws. The provisions of the
Company's Certificate of Incorporation and Bylaws will be consistent with the
terms of this Agreement.
(b) Board Approval. All actions requiring the approval of the Board shall
be approved (A) at a meeting of the Board, by a majority of the total number of
directors
2
<PAGE> 7
then fixed as constituting the whole board, or (B) without a meeting by the
unanimous written consent of all the members of the Board, in each case except
as required by law.
Section 1.3. Indemnification of Directors and Officers. The Bylaws shall
provide for indemnification of the directors and officers of the Company to the
greatest extent permitted by applicable law.
ARTICLE II
RESTRICTIONS ON TRANSFER
Section 2.1. Restrictions on Transfer. (a) Until the first to occur of
(w) a Public Offering, (x) a Change of Control, (y) the second anniversary of
the Closing under the Recapitalization Agreement (the "Closing"), and (z) an
Exit Event, no Stockholder other than NCP-SBG and its Affiliates may, without
the consent of NCP-SBG (which consent may not be unreasonably withheld), sell,
transfer, pledge, encumber or otherwise dispose of any Covered Security or any
interest therein to any Person except as follows:
(i) to any Family Member of such Stockholder upon the death of such
Stockholder, provided that such Family Member delivers to the Company a
certificate of the transferee, to the effect that the transferee is a
Family Member of the transferor;
(ii) to any Family Member other than upon the death of such
Stockholder, provided that such Family Member delivers to the Company a
certificate of the transferee, to the effect that the transferee is a
Family Member of the transferor;
(iii) to the Company or NCP-SBG or any of its Affiliates or designees;
(iv) pursuant to Sections 2.3 and 2.4; or
(v) in connection with a transaction that results in a Change of
Control;
provided that, in the case of a transfer with NCP-SBG's consent or
pursuant to clauses (i) or (ii) above, (A) the transferor delivers to the
Company an opinion of counsel, which opinion and counsel shall be
reasonably satisfactory to the Company, to the effect that the transfer is
not a Prohibited Transfer, and (B) the transferee becomes a party to this
Agreement in the manner provided in Section 5.12.
(b) Each Stockholder shall give the Company and the other Stockholders
prompt notice of any actual transfer of any Covered Security. Any sale,
transfer, pledge,
3
<PAGE> 8
encumbrance or other disposition of any Covered Security other than as permitted
by this Agreement shall be void ab initio and of no effect.
(c) Notwithstanding anything contained herein to the contrary, each
Rollover Stockholder may, without the consent of NCP-SBG, sell or transfer any
Covered Security to another Rollover Stockholder, subject to compliance with
applicable laws and contractual agreements and delivery to the Company of an
opinion of counsel, which opinion and counsel shall be reasonably satisfactory
to the Company, to the effect that the transfer is not a Prohibited Transfer.
(d) Notwithstanding the provisions of Section 2.1(a), Mr. Cox may
pledge or encumber his Covered Securities or grant a security interest therein
without the consent of NCP-SGB, provided, that any subsequent sale, transfer or
other disposition pursuant to such pledge, encumbrance or security interest
shall require the consent of NCP-SBG.
Section 2.2. Transfers After Second Anniversary of Closing Public
Offering, Change of Control or Exit Event. (a) Following the first to occur of
the second anniversary of the Closing, an initial Public Offering, a Change of
Control and an Exit Event, and subject to Article III, any Stockholder may
transfer Covered Securities to any Person, subject to compliance with applicable
laws and contractual agreements.
(b) Opinion of Counsel. An additional condition to any transfer
pursuant to Sections 2.2(a) shall be that, except with respect to a transfer of
the type described in Section 2.1(a)(iii) or a transfer made pursuant to a
registered public offering, the transferee must deliver to the Company an
opinion of counsel, which opinion and counsel shall be reasonably satisfactory
to the Company, to the effect that such transfer is not required to be
registered under the Securities Act.
Section 2.3. Tag-Along Rights. If prior to a Public Offering any of
NCP-SBG or its Affiliates desire to transfer in excess of 10% of the maximum
amount of Common Stock ever owned in the aggregate by NCP-SBG and its Affiliates
(the "Tag- Along Minimum"), to a Person who is not an Affiliate of NCP-SBG (a
"Tag-Along Buyer"), on a cumulative basis, in one or a series of transactions,
then NCP-SBG shall deliver written notice (a "Tag-Along Notice") to the Company
and the other Stockholders, which notice shall state (i) the name and address of
the Tag-Along Buyer, (ii) the per share amount (the "Tag-Along Price") and form
of consideration NCP-SBG proposes to receive for its shares of Common Stock, and
(iii) the number of shares of Common Stock NCP-SBG proposes to sell (the
"Tag-Along Shares") and shall be accompanied by drafts of purchase and sale
documentation (the "Tag-Along Purchase Agreement") setting forth the terms and
conditions of payment of such consideration and all other material terms and
conditions of such transfer (the "Tag-Along Terms"). During the 15 Business Day
period
4
<PAGE> 9
following receipt of such notice by the Company and the other Stockholders, the
other Stockholders shall have the right (a "Tag-Along Right"), exercised by
delivery of a written notice to NCP-SBG and the Company, to participate in such
sale to the Tag-Along Buyer on and subject to the same price, terms and
conditions offered to NCP-SBG, on a pro rata basis determined as the quotient
obtained by dividing (A) the number of shares of Common Stock then held by each
Stockholder so electing to sell (each such Person, an "Accepting Stockholder")
by (B) the aggregate number of shares of Common Stock then held by NCP-SBG and
Affiliates and by all of the Accepting Stockholders who are transferring shares
to the Tag-Along Buyer. If the Tag-Along Right shall not have been exercised
prior to the expiration of the 15 Business Day period, then at any time during
the 90 days following the expiration of the 15 Business Day period, subject to
extension for not more than an additional 60 days to the extent reasonably
required to comply with applicable laws in connection with such sale, NCP-SBG
and its Affiliates may sell the Tag- Along Shares to the Tag-Along Buyer at the
Tag-Along Price and on the Tag-Along Terms. Upon request from NCP-SBG, the
Company will provide NCP-SBG with a Stockholder List.
Section 2.4. Take-Along Rights. (a) Take-Along Notice. If NCP-SBG
intends to effect a sale or transfer (a "Take-Along Sale") of all or
substantially all of its shares of Common Stock to a Person who is not an
Affiliate (a "Take-Along Buyer") prior to a Public Offering and elects to
exercise its rights under this Section 2.4, then NCP-SBG shall deliver written
notice (a "Take-Along Notice") to the Company and the other Stockholders, which
notice shall (i) state (w) that NCP-SBG wishes to exercise its rights under this
Section 2.4 with respect to such transfer, (x) the name and address of the
Take-Along Buyer and (y) the per share amount and form of consideration NCP-SBG
proposes to receive for its shares of Common Stock, (ii) be accompanied by
drafts of purchase and sale documentation setting forth the terms and conditions
of payment of such consideration and all other material terms and conditions of
such transfer (the "Take- Along Purchase Agreement"), (iii) contain an offer
(the "Take-Along Offer") by the Take-Along Buyer to purchase from the other
Stockholders all of their shares of Common Stock, on and subject to the same
price, terms and conditions offered to NCP-SBG and (iv) state the anticipated
time and place of the closing of such transfer (a "Take-Along Closing"), which
(subject to such terms and conditions) shall occur not fewer than 15 nor more
than 90 days after the date such Take-Along Notice is delivered, provided that
if such Take-Along Closing shall not occur prior to the expiration of such
90-day period, NCP-SBG shall be entitled to deliver additional Take-Along
Notices with respect to such Take-Along Offer. Upon the request of NCP-SBG, the
Company shall provide NCP-SBG with a Stockholder List.
(b) Conditions to Take-Along. Upon delivery of a Take-Along Notice,
each of the other Stockholders shall transfer all of its shares of Common Stock
pursuant
5
<PAGE> 10
to the Take-Along Offer, as such offer may be modified from time to time, if
NCP-SBG transfers all of its shares of Common Stock to the Take-Along Buyer at
the Take-Along Closing and if all shares of Common Stock held by NCP-SBG and the
other Stockholders are sold to the Take-Along Buyer at the same price, and on
the same terms and conditions. No Stockholder other than NCP-SBG and its
Affiliates shall be obligated to make any representation or warranty to the
Take-Along Buyer with respect to, or agree to indemnify the Take-Along Buyer
against, any matter other than (i) title to such Stockholder's shares of Common
Stock to be sold pursuant to the Take-Along Offer and (ii) authority and legal
capacity of such Stockholder to sell such shares or incur any out-of-pocket
costs in connection with such transaction other than such Stockholder's pro rata
share of any transaction expenses payable in connection with the Take-Along
Closing. Within five Business Days prior to the closing contemplated by the
Take-Along Notice, each of the other Stockholders shall (i) deliver or cause to
be delivered to NCP-SBG or an agent acting on its behalf certificates
representing such other Stockholder's shares of Common Stock, duly endorsed for
transfer or accompanied by duly executed stock powers, and (ii) execute and
deliver to NCP-SBG or an agent acting on its behalf a limited power of attorney
and a letter of transmittal and custody agreement in favor of NCP-SBG or an
agent acting on its behalf, and in form and substance reasonably satisfactory to
NCP-SBG, appointing NCP-SBG or an agent acting on its behalf as the true and
lawful attorney-in-fact and custodian for such other Stockholder with respect to
the Take-Along Purchase Agreement and the transactions contemplated thereby,
with full power of substitution, and authorizing NCP-SBG or such agent to
execute and deliver a purchase and sale agreement substantially in the form of
the Take-Along Purchase Agreement and otherwise in accordance with the terms of
this Section 2.4 and to take such actions as NCP-SBG may reasonably deem
necessary or appropriate to effect the sale and transfer of the shares of Common
Stock to the Take-Along Buyer, upon receipt of the purchase price therefor set
forth in the Take-Along Notice at the Take-Along Closing, free and clear of any
Liens, options and voting agreements, together with all other documents
delivered with such Notice and required to be executed in connection with the
sale thereof pursuant to the Take-Along Offer. NCP-SBG or such agent shall hold
such shares and other documents in trust for such other Stockholder for release
against payment to such Stockholder of such Stockholder's net proceeds in
accordance with the contemplated transaction. If, within 15 days after delivery
of such shares and other documents to NCP-SBG or an agent acting on its behalf,
NCP-SBG or such agent has not completed the sale of all of the shares of Common
Stock owned by NCP-SBG and the other Stockholders to the Take-Along Buyer and
another Take-Along Notice with respect to such Take-Along Offer has not been
sent to the other Stockholders, NCP-SBG or such agent shall return to each other
Stockholder all certificates representing the shares and all other documents
that such other Stockholder delivered in connection with such sale. Promptly
after the Take-Along Closing, NCP-SBG or an agent acting on its behalf shall
6
<PAGE> 11
furnish such other evidence of the completion and time of completion of such
sale and the terms thereof as may reasonably be requested by any of the other
Stockholders.
Section 2.5. Transfer of Covered Securities to Affiliate of NCP-SBG.
In the event that any Covered Securities are transferred to any Affiliate of
NCP-SBG, such transfer to such Affiliate shall be of no effect and shall be void
ab initio unless such Affiliate agrees in writing to become a party to this
Agreement.
Section 2.6. Hold Back Agreements. If and whenever the Company
proposes to register any of its equity securities under the Securities Act,
whether or not for its own account (other than pursuant to a Special
Registration), or is required to use its reasonable best efforts to effect the
registration of any Registrable Securities (as such term is defined in the
Registration Rights Agreement, dated as of the date hereof, by and between the
Company, NCP-SBG and the other parties thereto (the "Registration Rights
Agreement")) under the Securities Act pursuant to Sections 3.1 or 3.2 of the
Registration Rights Agreement, each party hereto, if required by the managing
underwriter in an underwritten offering, agrees not to effect (other than
pursuant to such registration) any public sale or distribution, including, but
not limited to, any sale pursuant to Rule 144 or Rule 144A, of any Registrable
Securities, any other equity securities of the Company or any securities
convertible into or exchangeable or exercisable for any equity securities of the
Company for 90 days (or 180 days, if the managing underwriter so requires)
after, and during the 20 days prior to, the effective date of such registration,
to the extent timely notified in writing by the Company or the managing
underwriter, and the Company agrees to cause each holder of any Equity Security,
or of any security convertible into or exchangeable or exercisable for any
Equity Security, of the Company purchased from the Company at any time other
than in a Public Offering to enter into a similar agreement with the Company.
The Company further agrees not to effect (other than pursuant to such
registration or pursuant to a Special Registration) any public sale or
distribution, or to file any registration statement (other than such
registration or a Special Registration) covering any, of its equity securities,
or any securities convertible into or exchangeable or exercisable for such
securities, during the 20 days prior to, and for 90 days (or 180 days, if the
managing underwriter so requires) after, the effective date of such registration
if required by the managing underwriter.
ARTICLE III
OTHER AGREEMENTS
Section 3.1. Right of First Refusal. Prior to an initial Public
Offering, if any Stockholder other than NCP-SBG and its Affiliates (a "Selling
Holder") desires to transfer any Covered Securities pursuant to Section 2.1(a)
following an offer (which offer must be
7
<PAGE> 12
in writing, be irrevocable by its terms for at least 30 Business Days and be a
bona fide offer) from any prospective purchaser to purchase all or any part of
such Covered Securities owned by such Selling Holder, such Selling Holder shall
give notice (the "Notice of Offer") in writing to the Company and to NCP-SBG (i)
designating the number of shares of Covered Securities that such Selling Holder
proposes to sell (the "Offered Shares"), (ii) identifying the prospective
purchaser thereof (the "Potential Purchaser") and its address and (iii)
specifying the price (the "Offer Price") and terms (the "Offer Terms") upon
which such Selling Holder desires to sell the same. During the 20 Business Day
period following receipt of such notice by the Company and NCP-SBG (the "Refusal
Period"), such Selling Holder shall not be permitted to accept such offer, but
may submit a new Notice of Offer in respect of any revised offer in accordance
with and subject to this Section 2.3. During the first ten Business Days of the
Refusal Period, the Company shall have the right to purchase from the Selling
Holder at the Offer Price and on the Offer Terms all, any portion of the Offered
Shares. If the Company shall not have exercised such right with respect to all
Covered Securities after ten Business Days, NCP-SBG or any Affiliate or designee
of NCP-SBG, including any pooled investment vehicle organized by the managing
member of NCP-SBG or by any of its Affiliates, shall have the same right of
first refusal with respect to any such remaining Covered Securities for the
remainder of the Refusal Period. The rights provided hereunder shall be
exercised by written notice to the Selling Holder and the Company or NCP-SBG, as
the case may be, given at any time during the Refusal Period. If such right is
exercised, the Company or NCP-SBG (or its Affiliate or designee), as the case
may be, shall deliver to the Selling Holder payment of the Offer Price in
accordance with the Offer Terms, against delivery of appropriately endorsed
certificates or other instruments representing the Offered Shares, provided that
the Company and NCP-SBG shall not be required to consummate such purchase on
fewer than 20 Business Days from the date of acceptance of the offer. If the
Company and NCP-SBG fail, in the aggregate, to exercise their right of first
refusal for all of the Offered Shares during the Refusal Period, then they shall
have no right to purchase any Offered Shares, and the Selling Holder may, for a
period of up to 120 days, sell to the Potential Purchaser the Offered Shares at
the Offer Price and on the Offer Terms.
Section 3.2. Issuance of Additional Shares of Equity Securities. In
the case of the proposed sale or issuance of, or the proposed granting by the
Company of, any equity securities of the Company, or any securities convertible
into equity securities of the Company, to NCP-SBG or any of its Affiliates
following the Effective Time, the Rollover Stockholders shall have the right,
exercisable within 20 Business Days after the Company has given notice, which
notice shall include copies of all material documents setting forth the terms
and conditions of the proposed sale, issuance or grant, to the Rollover
Stockholders of such proposed sale, issuance or grant, to purchase their
respective pro rata share (based on such Stockholder's percentage ownership of
the common stock of the Company) of the equity securities (or securities
convertible into equity securities)
8
<PAGE> 13
proposed to be issued or granted on the same terms as such equity securities (or
securities convertible into equity securities) are offered to NCP-SGB or its
Affiliates.
Section 3.3. Future Acquisitions. The Company and NCP-SBG agree, and
NCP-SPG agrees to cause its Affiliates and the respective officers and directors
of such Affiliates, to pursue all future acquisitions, mergers and
recapitalizations involving businesses in the refrigerated juice industry (other
than minority investments by NCP-SGB or any of its affiliates) through (i) the
Company, with such entities to be acquired, owned and operated by the Company,
or (ii) any other company, provided that the Rollover Stockholders shall have
had an opportunity to exchange their respective shares of common stock of the
Company for shares of common stock of an equivalent value in such other company
in connection with any such transaction which results in the Company not being
the top-tier holding company for investments by NCP-SGB in the refrigerated
juice industry.
ARTICLE IV
DEFINITIONS
Section 4.1. Definitions; Construction. Whenever used in this
Agreement, the following terms shall have the respective meanings given to them
below or in the Sections indicated below:
Affiliate: of a Person means a Person that directly or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first Person, including but not limited to a
Subsidiary of the first Person, a Person of which the first Person is a
Subsidiary, or another Subsidiary of a Person of which the first Person is
also a Subsidiary. "Control" (including the terms "controlled by" and
"under common control with") means the possession, directly or indirectly,
of the power to direct or cause the direction of the management policies of
a person, whether through the ownership of voting securities, by contract
or credit arrangement, as trustee or executor, or otherwise. With respect
to NCP-SBG, the term Affiliate explicitly includes the Fund, NCP II
Co-Investment Fund, L.P., any other investment vehicle now or in the future
managed by North Castle Partners, L.L.C. and any Person with coinvestment
rights with respect to investments made by the Fund.
Board: as defined in Section 1.1(a).
Business Day: any day other than a Saturday, Sunday or other day on
which the commercial banks in New York City are authorized or required to
close.
9
<PAGE> 14
Change of Control: means, with respect to the Company, the first to
occur after the Effective Time of the following events:
(1) the acquisition by any person, entity or group (as defined in
section 13(d) of the Exchange Act) (other than (w) the Company and its
subsidiaries, (x) any employee benefit plan of the Company or its
subsidiaries or (y) the Fund or any Affiliate or partner thereof), through
one transaction or a series of transactions of 50% or more of the combined
voting power of the then outstanding voting securities of the Company;
(2) the merger or consolidation of the Company as a result of which
persons who were Stockholders of the Company immediately prior to such
merger or consolidation, do not, immediately thereafter, own, directly or
indirectly, more than 50% of the combined voting power entitled to vote
generally in the election of directors of the merged or consolidated
company;
(3) the liquidation or dissolution of the Company (other than (x) a
dissolution occurring upon a merger or consolidation thereof (y) a
liquidation of the Company into its subsidiary or (z) a liquidation or
dissolution that is incident to a reorganization); and
(4) the sale, transfer or other disposition of all or substantially
all of the assets of the Company through one transaction or a series of
related transactions to one or more persons or entities that are not, im
mediately prior to such sale, transfer or other disposition, Affiliates of
the Fund.
Closing: as defined in Section 2.1(a).
Covered Security: all of the shares of Common Stock and any other
security, option, warrant or other right that does or may allow the holder
thereof to receive Common Stock, owned from time to time by any of the
Stockholders.
Equity Security: means (i) any Common Stock or other voting
securities, (ii) any securities of the Company convertible into or exchangeable
for Common Stock or other voting securities or (iii) any options, rights or
warrants (or any similar securities) issued by the Company to acquire common
stock or other voting securities.
10
<PAGE> 15
Exchange Act: as defined in Section 2.2(a).
Exit Event: any sale, transfer, merger or other transaction as a
result of which NCP-SBG and its Affiliates sell or otherwise dispose of all
or substantially all of their Common Stock, including in any dissolution or
liquidation of the Company.
Family Member: with respect to any Stockholder, (i) a spouse, sibling
or any lineal ancestor or descendant, (ii) a trust or trusts of which such
family members are the sole beneficiaries or charitable remainder trusts in
which such family members have an interest or (iii) a partnership or
limited liability company in which such family members are the only
partners or members, as the case may be.
Fund: North Castle Partners II, L.P.
NCP: as defined in Section 1.1(d).
Person: any natural person, firm, partnership, association,
corporation, company, trust, business trust, governmental authority or
other entity.
Prohibited Transfer: any transfer of a Covered Security to a Person
which (a) may not be effected without registering the securities involved
under the Securities Act, (b) would result in the assets of the Company
constituting Plan Assets as such term is defined in the Department of Labor
regulations promulgated under the Employee Retirement Income Security Act
of 1974, as amended, (c) would cause the Company to be, be controlled by or
under common control with an "investment company" for purposes of the
Investment Company Act of 1940, as amended, or (d) would require any
securities of the Company to be registered under the Exchange Act.
Public Offering: any underwritten sale of Common Stock to the public
pursuant to an effective registration statement under the Securities Act
after which at least 20% of the outstanding shares of Common Stock shall
have been registered under the Securities Act and such shares may be freely
traded.
Purchased Shares: as defined in the recitals to this Agreement.
Rollover Stockholders: shall be Robin Prever, Anthony Malatino, Steven
Bogen, Warren G. Lichtenstein, Steel Partners II, L.P., Pershing Securities
Limited and Jurg Walker.
Securities Act: the Securities Act of 1933, as amended.
11
<PAGE> 16
Special Registration: the registration of shares of equity securities
and/or options or other rights in respect thereof to be offered solely to
directors, members of management, employees, consultants or sales agents,
distributors or similar representatives of the Company or its direct or
indirect subsidiaries, solely on Form S-8 or any successor form.
Stockholder: as defined in the introduction to this Agreement.
Stockholder List: at any applicable time, the list of the name and
addresses of the Stockholders at such time.
ARTICLE V
MISCELLANEOUS
Section 5.1. Notices. All notices, requests, demands, waivers and
other communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given if (a)
delivered personally, (b) mailed, certified or registered mail with
postage prepaid, (c) sent by next-day or overnight mail or delivery or (d)
sent by fax, with a copy sent by (a), (b), or (c) above, or telegram, as
follows:
(i) if to NCP-SBG:
NCP-SBG, L.P.
c/o North Castle Partners, L.L.C.
60 Arch Street
Greenwich, CT 06830
Fax: (203) 618-1860
Tel: (203) 862-3250
Attention: Peter J. Shabecoff
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, NY 10022
Fax: (212) 909-6836
Tel: (212) 909-6000
Attention: Franci J. Blassberg, Esq.
12
<PAGE> 17
(ii) if to the Company:
Saratoga Beverage Group, Inc.
11 Geyser Road
Saratoga Springs, NY 12366
Fax: (518) 584-0386
Tel: (518) 584-6363 X-11
Attention: Robin Prever
(iii) if to any other Person who is a party, or to any
Person who becomes a party to this Agreement
pursuant to Section 5.12 hereof, to the name and
address specified for such Person on the signature
pages hereto or in Schedule A hereto;
or, in each case, at such other address as may be specified in writing to the
other parties hereto.
All such notices, requests, demands, waivers and other communications shall
be deemed to have been received (w) if by personal delivery on the day after
such delivery, (x) if by certified or registered mail, on the seventh business
day after the mailing thereof, (y) if by next-day or overnight mail or delivery,
on the day delivered, (z) if by telecopy or telegram, on the next day following
the day on which such telecopy or telegram was sent, provided that a copy is
also sent by certified or registered mail.
Section 5.2. Remedies. Each Stockholder acknowledges that the other
Stockholders and the Company would be irreparably damaged in the event of a
breach or a threatened breach by such Stockholder or the Company of any of its
obligations under this Agreement (including without limitation the covenants set
forth in Section 3.3) and the Company and each Stockholder agrees that, in the
event of a breach or a threatened breach by the Company or such Stockholder of
any such obligation, each of the other Stockholders and the Company shall, in
addition to any other rights and remedies available to them in respect of such
breach, be entitled to an injunction from a court of competent jurisdiction
(without any requirement to post bond) granting them specific performance by
such Stockholder of its obligations under this Agreement (including without
limitation the covenants set forth in Section 3.3). In the event that any
Stockholder or the Company shall file suit to enforce the covenants contained in
this Agreement (including without limitation the covenants set forth in Section
3.3) (or obtain any other remedy in respect of any breach thereof), the
prevailing party in the suit shall be entitled to recover, in addition to all
other damages to which it may be entitled, the costs incurred by such party in
conducting the suit, including reasonable attorney's fees and expenses.
13
<PAGE> 18
Section 5.3. Governing Law, etc. (a) THIS AGREEMENT SHALL BE GOVERNED
IN ALL RESPECTS, INCLUDING AS TO VALIDITY, INTERPRETATION AND EFFECT, BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF
LAWS RULES THEREOF TO THE EXTENT ANY SUCH RULES WOULD REQUIRE OR PERMIT THE
APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE
CORPORATE LAW OF THE STATE OF INCORPORATION OF THE COMPANY SPECIFICALLY AND
MANDATORILY APPLIES. EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE FEDERAL COURTS OF
THE UNITED STATES OF AMERICA LOCATED IN THE STATE, CITY AND COUNTY OF NEW YORK
SOLELY IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF
THIS AGREEMENT AND OF THE DOCUMENTS REFERRED TO IN THIS AGREEMENT, AND IN
RESPECT OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY. EACH PARTY HERETO
HEREBY WAIVES, AND AGREES NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR
PROCEEDING FOR THE INTERPRETATION OR ENFORCEMENT HEREOF OR OF ANY SUCH DOCUMENT
OR IN RESPECT OF ANY SUCH TRANSACTION, THAT IT IS NOT SUBJECT TO SUCH
JURISDICTION, THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT
MAINTAINABLE IN SUCH COURTS, THAT THE VENUE THEREOF MAY NOT BE APPROPRIATE OR
THAT THIS AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE ENFORCED IN OR BY SUCH
COURTS. EACH PARTY HERETO HEREBY CONSENTS TO AND GRANTS ANY SUCH COURT
JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER OF ANY
SUCH DISPUTE AND AGREES THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION
WITH ANY SUCH ACTION OR PROCEEDING IN THE MANNER PROVIDED IN SECTION 5.1 OR IN
SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID AND SUFFICIENT
SERVICE THEREOF.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT,
OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES
14
<PAGE> 19
THAT (1) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (2) SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (3) SUCH PARTY
MAKES THIS WAIVER VOLUNTARILY, AND (4) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 5.3(b).
Section 5.4. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
successors and permitted assigns.
Section 5.5. Assignment. This Agreement shall not be assignable or
otherwise transferable by any party hereto without the prior written consent of
the Company, NCP-SBG, and any purported assignment or other transfer without
such consent shall be void and unenforceable; provided that NCP-SBG may assign
this Agreement or any of their rights and obligations hereunder to any of their
respective Affiliates or any other Person.
Section 5.6. No Third Party Beneficiaries. Nothing in this Agreement
shall confer any rights upon any person or entity other than the parties hereto
and their respective heirs, successors and permitted assigns.
Section 5.7. Amendment; Waivers, etc. No amendment, modification or
discharge of this Agreement, and no waiver hereunder, shall be valid or binding
unless set forth in writing and duly executed by NCP-SBG and the party against
whom enforcement of the amendment, modification, discharge or waiver is sought.
Any such waiver shall constitute a waiver only with respect to the specific
matter described in such writing and shall in no way impair the rights of the
party granting such waiver in any other respect or at any other time. Neither
the waiver by any of the parties hereto of a breach of or a default under any of
the provisions of this Agreement, nor the failure by any of the parties, on one
or more occasions, to enforce any of the provisions of this Agreement or to
exercise any right or privilege hereunder, shall be construed as a waiver of any
other breach or default of a similar nature, or as a waiver of any of such
provisions, rights or privileges hereunder. The rights and remedies herein
provided are cumulative and none is exclusive of any other, or of any rights or
remedies that any party may otherwise have at law or in equity.
Section 5.8. Legend on Stock Certificates. A copy of this Agreement
shall be filed with the Secretary of the Company and kept with the records of
the Company.
15
<PAGE> 20
Each certificate representing Covered Securities which are subject to this
Agreement shall be endorsed with a legend substantially to the following effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED, TRANSFERRED OR OTHERWISE DISPOSED OF (EACH, A "TRANSFER")
UNLESS AND UNTIL REGISTERED UNDER THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR UNLESS SUCH TRANSFER IS (A) EXEMPT FROM REGISTRATION OR
IS OTHERWISE IN COMPLIANCE WITH THE ACT AND SUCH LAWS IN THE OPINION OF
COUNSEL TO THE STOCKHOLDER, WHICH COUNSEL MUST BE, AND THE FORM AND
SUBSTANCE OF WHICH OPINION ARE, REASONABLY SATISFACTORY TO THE ISSUER AND
(B) IN COMPLIANCE WITH THE STOCKHOLDERS AGREEMENT OF THE ISSUER, DATED AS
OF JANUARY 5, 2000 AND ANY AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS
THERETO (THE "STOCKHOLDERS AGREEMENT").
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
RESTRICTIONS ON TRANSFER SET FORTH IN (I) A STOCKHOLDERS AGREEMENT AND (II)
A REGISTRATION RIGHTS AGREEMENT, COPIES OF WHICH ARE AVAILABLE FOR
INSPECTION AT THE OFFICES OF THE COMPANY. NO TRANSFER OF SUCH SECURITIES
WILL BE MADE ON THE BOOKS OF THE COMPANY, AND SUCH TRANSFER SHALL BE
VOIDABLE, UNLESS ACCOMPANIED BY EVIDENCE OF COMPLIANCE WITH THE TERMS OF
SUCH AGREEMENTS.
Any stock certificate issued at any time in exchange or substitution for a
certificate bearing such legend (except a new certificate issued upon the
completion of a public distribution of securities of the Company represented
thereby or otherwise if the holder of the Shares represented by such certificate
shall have delivered to the Company an opinion of counsel, which opinion and
counsel shall be reasonably satisfactory to the Company, that the Act permits
such certificate to be issued without such legend or with a legend modified as
set forth in such opinion) shall also bear such legend. The provisions of this
Agreement shall be binding upon, and shall inure to the benefit of, the
Stockholders and all subsequent holders of Covered Securities who acquired the
same directly or indirectly from a Stockholder in a transaction or series of
transactions not involving any Public Offering.
16
<PAGE> 21
The Company agrees that it will not transfer on its books any certificate
representing Covered Securities in violation of the provisions of this
Agreement.
Section 5.9. Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof.
Section 5.10. Severability. If any provision, including any phrase,
sentence, clause, section or subsection, of this Agreement is invalid,
inoperative or unenforceable for any reason, such circumstances shall not have
the effect of rendering such provision in question invalid, inoperative or
unenforceable in any other case or circumstance, or of rendering any other
provision herein contained invalid, inoperative, or unenforceable to any extent
whatsoever.
Section 5.11. Headings; Counterparts. The headings contained in this
Agreement are for purposes of convenience only and shall not affect the meaning
or interpretation of this Agreement. This Agreement may be executed in several
counter parts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.
Section 5.12. Subsequent Stockholders. Each of the parties hereto
agrees that in order for any Person who after the date of this Agreement is
offered shares of Common Stock or securities exercisable for or convertible into
shares of Common Stock (or any interest therein) to become a party to this
Agreement, both the Company and such Person must execute Schedule A hereto and
duly executed copies thereof must be delivered to NCP-SBG in accordance with
Section 5.1. The Company shall maintain a register of all parties to this
Agreement which shall be available for review by any party hereto. Any transfer
of Covered Securities (or any interest therein) to a transferee required hereby
to become a party to this Agreement shall be of no effect and shall be void ab
initio unless such transferee becomes a party to this Agreement as provided in
the previous sentence.
Section 5.13. Reports. Within 60 days after the end of each fiscal
quarter, the Company shall furnish to each Stockholder an unaudited financial
report prepared in accordance with generally accepted accounting principles
applied on a consistent basis setting forth as of the end of such fiscal
quarter, a balance sheet of the Company and an income statement and a cash flow
statement for the Company for such fiscal quarter.
Section 5.14. Certain Agreements. The Stockholders party to that
certain Stockholders' Agreement, dated as of October 13, 1998, by and among the
Company, Steven Bogen, Robin Prever and Anthony Malatino, and that certain
Stockholders'
17
<PAGE> 22
Agreement, dated as of October 22, 1998, between Robin Prever and Anthony
Malatino, agree to terminate or cause to be terminated, as of the Effective
Time, such stockholders' agreements.
Section 5.15. Effectiveness. The effectiveness of this Agreement is
conditioned upon the occurrence of the Effective Time as contemplated by the
Recapitalization Agreement. If the Effective Time does not occur, or the
Recapitalization Agreement is terminated in accordance with its terms, this
Agreement shall be of no force or effect.
18
<PAGE> 23
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
SARATOGA BEVERAGE GROUP, INC.
By: /s/ Kim James
------------------------------------------
Name: Kim James
Title: Chief Financial Officer
NCP-SBG, L.P.
By: NCP-SBG, GP, L.L.C.,
its General Partner
By: /s/ Peter J. Shabecoff
--------------------------------
Name: Peter J. Shabecoff
Title: Executive Vice President
/s/ Robin Prever Address: 4301 North Ocean Blvd.
- ---------------------------------------
ROBIN PREVER A-1703
Boca Raton, FL 33431
/s/ Anthony Malatino Address: c/o Morgan Stanley Dean Witter
- ---------------------------------------
ANTHONY MALATINO 340 Broadway
Saratoga Springs, NY 12866
/s/ Steven Bogen Address: 81 Dahlia Street
- ---------------------------------------
STEVEN BOGEN Staten Island, NY 10312
[Signature page for Stockholders Agreement]
<PAGE> 24
STEEL PARTNERS II, L.P. Address: c/o Steel Partners II, L.P.
150 East 52nd St., 21st Floor
By: STEEL PARTNERS, L.L.C., New York, NY 10022
its General Partner
By: /s/ Warren Lichtenstein
--------------------------------
Name: Warren Lichtenstein
Title: Managing Member
[Signature page for Stockholders Agreement]
<PAGE> 25
/s/ Warren G. Lichtenstein Address: c/o Steel Partners II, L.P.
----------------------------- 150 East 52nd St., 21st Floor
Warren G. Lichtenstein New York, NY 10022
<PAGE> 26
PERSHING SECURITIES LIMITED Address: Capstan House
#1 Clove Crescent
East India Dock
By: /s/ Christiane Ann Chambers
------------------------------------- London E14 2BH
Name: Christiane Ann Chambers England
Title: Compliance Officer
[Signature page for Stockholders Agreement]
<PAGE> 27
/s/ Jurg Walker Address: c/o Investa AG
- -----------------------------------
JURG WALKER Harestrasse 4
Birsfelden, Switzerland 4127
[Signature page for Stockholders Agreement]
<PAGE> 1
Exhibit 10
JOINT FILING AGREEMENT
Pursuant to Rule 13d-1(k)(1)(iii) promulgated under the Securities
Exchange Act of 1934, as amended, the undersigned agree that the Statement on
Schedule 13D to which this exhibit is attached is filed on behalf of each of
them in the capacities set forth below.
Dated: January 14, 2000
NCP-SBG, L.P.
By: NCP-SBG G.P., L.L.C., its general partner
By: /s/ Peter J. Shabecoff
Name: Peter J. Shabecoff
Title: Executive Vice President
NCP-SBG G.P., L.L.C.
By: /s/ Peter J. Shabecoff
Name: Peter J. Shabecoff
Title: Executive Vice President
NORTH CASTLE PARTNERS II, L.P.
By: NCP G.P. II, L.P., its general partner
By: NORTH CASTLE G.P. II, L.L.C., its
general partner
By: /s/ Peter J. Shabecoff
Name: Peter J. Shabecoff
<PAGE> 2
Title: Managing Director
NCP G.P. II, L.P.
By: NORTH CASTLE G.P. II, L.L.C., its general
partner
By: /s/ Peter J. Shabecoff
Name: Peter J. Shabecoff
Title: Managing Director
NORTH CASTLE G.P. II, L.L.C.
By: /s/ Peter J. Shabecoff
Name: Peter J. Shabecoff
Title: Managing Director
/s/ Charles F. Baird, Jr.
CHARLES F. BAIRD, JR.
2
<PAGE> 1
Exhibit 11
POWER OF ATTORNEY
Each of the undersigned hereby constitutes and appoints Peter J.
Shabecoff, Brent R. Knudsen and Louis E. Marinaccio and each of them, with full
power of substitution and resubstitution, as its true and lawful
attorneys-in-fact and agents to:
(1) execute and deliver for and on behalf of the undersigned (i) any and
all schedules relating to the Company required to be filed in
accordance with Section 13(d) of the Exchange Act and the rules
thereunder (the "Schedules"); and (ii) all other capacities pursuant
to which such Schedules may be required to be filed by the
undersigned;
(2) do and perform any and all acts and on behalf of the undersigned
which may be necessary or desirable to complete and execute any such
Forms and timely file such Forms and Schedules with the United States
Securities and Exchange Commission and any stock exchange or similar
authority; and
(3) take any other action of any type whatsoever in connection with the
foregoing which, in the opinion of such attorney-in-fact, may be of
benefit to, in the best interest of, or legally required by, the
undersigned, it being understood that the documents executed by such
attorney-in-fact on behalf of the undersigned pursuant to this Power
of Attorney shall be in such form and shall contain such terms and
conditions as such attorney-in-fact may approve in such
attorney-in-fact's discretion.
The undersigned hereby grants to such attorney-in-fact and
agents full power and authority to do and perform any and every act and thing
whatsoever requisite, necessary or proper to be done in the exercise of any of
the rights and powers herein granted, as fully to all intents and purposes as
the undersigned might or could do if personally present, with full power of
substitution of revocation, hereby ratifying and confirming all that each such
attorney-in-fact and agent, or his substitute or substitutes, shall lawfully do
or cause to be done by virtue of this Power of Attorney and the rights and
powers herein grants. The undersigned acknowledges that the foregoing
attorneys-in-fact and agents, in servicing in such capacity at the request of
the undersigned, are not assuming any of the undersigned's responsibilities to
comply with Section 13(d) of the Exchange Act. This Power of Attorney shall
remain in full force and effect until the undersigned is no longer required to
file the Forms and Schedules with respect to the undersigned's holdings of and
transactions in securities issued by the Company, unless earlier revoked by the
undersigned in a signed writing delivered to the foregoing attorneys-in-fact and
agents.
<PAGE> 2
IN WITNESS WHEREOF, the undersigned has caused this Power of
Attorney to be executed as of the 14th day of January, 2000.
NCP-SBG, L.P.
By: NCP-SBG G.P., L.L.C., its general partner
By: /s/ Peter J. Shabecoff
Name: Peter J. Shabecoff
Title: Executive Vice President
NCP-SBG G.P., L.L.C.
By: /s/ Peter J. Shabecoff
Name: Peter J. Shabecoff
Title: Executive Vice President
NORTH CASTLE PARTNERS II, L.P.
By: NCP G.P. II, L.P., its general partner
By: North Castle G.P. II, L.L.C., its
general partner
By: /s/ Peter J. Shabecoff
Name: Peter J. Shabecoff
Title: Managing Director
2
<PAGE> 3
NCP G.P. II, L.P.
By: North Castle G.P. II, L.L.C., its general
partner
By: /s/ Peter J. Shabecoff
Name: Peter J. Shabecoff
Title: Managing Director
NORTH CASTLE G.P. II, L.L.C.
By: /s/ Peter J. Shabecoff
Name: Peter J. Shabecoff
Title: Managing Director
/s/ Charles F. Baird, Jr.
Name: CHARLES F. BAIRD, JR.
3
