UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
RULE 13d-1(a) AND AMENDMENTS THERETO FILES PURSUANT TO RULE 13d-2(a)
(Amendment No. )
---------
Lincoln Snacks Company
----------------------
(Name of Issuer)
Common Stock, $.01 Par Value,
-----------------------------
(Title of Class of Securities)
[Not Yet Issued]
--------------------
(CUSIP Number)
Katherine P. Burgeson
Cummings & Lockwood
Four Stamford Plaza, P.O. Box 120
Stamford, Connecticut 06904
(203) 351-4260
------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
June 8, 1998
------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this Schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
Page 1 of 9 pages
<PAGE>
- - --------------------------------- -----------------------------------
CUSIP No. Not Yet Issued Page 2 of 9 Pages
- - --------------------------------- -----------------------------------
- - ------- ------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Brynwood Partners III, L.P.
- - ------- ------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER (a) [ ]
OF A GROUP (See Instructions) (b) [X]
- - ------- ------------------------------------------------------------------------
3 SEC USE ONLY
- - ------- ------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
WC, 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
0
NUMBER OF ------- ---------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 3,569,755
OWNED BY ------- ---------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON ------- ---------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
3,569,755
- - --------------------------- ---------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,569,755
- - ------- ------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (See Instructions) [ ]
- - ------- ------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
56.4%
- - ------- ------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
PN
- - ------- ------------------------------------------------------------------------
<PAGE>
Page 3 of 9 pages
Introduction
------------
This Schedule 13D is being filed by Brynwood Partners III, L.P., a
Delaware limited partnership (the "Reporting Person") in order to report its
acquisition of 3,569,755 shares of Common Stock, $.01 par value (the "Purchased
Shares"), of Lincoln Snacks Company, a Delaware corporation (the "Issuer"). The
Reporting Person purchased all of the Purchased Shares pursuant to that certain
Stock Purchase Agreement dated June 8, 1998 (sometimes referred to herein as the
"Stock Purchase Agreement") (a copy of which is attached as Exhibit 1 to this
Schedule 13D) by and between the Reporting Person and Noel Group, Inc., a
Delaware corporation (the "Seller"). The Purchased Shares constitute
approximately 56.4% of the outstanding shares of Common Stock of the Issuer.
The Reporting Person's sole general partner is Brynwood Management III,
L.P., a Delaware limited partnership ("Brynwood Management"), of which Hendrik
J. Hartong, Jr. and John T. Gray are the sole general partners. Pursuant to
Paragraph C of the General Instructions of Schedule 13D, the information called
for in Items 2-6 is given with respect to Brynwood Management and Messrs.
Hartong and Gray as well as with respect to the Reporting Person. However, the
Reporting Person alone owns all of the Purchased Shares. Brynwood Management
shares voting power and dispositive power over the Purchased Shares only to the
extent and by virtue of its rights as general partner of the Reporting Person,
and Messrs. Hartong and Gray shares voting power and dispositive power over the
Purchased Shares only to the extent and by virtue of each of their respective
rights as general partner of the Reporting Person's general partner.
Item 1. Security and Issuer.
--------------------
The class of equity securities to which this Schedule 13D relates is
Issuer's Common Stock, par value $.01 per share. The Issuer is Lincoln Snacks
Company, a Delaware corporation, and its principal executive offices are located
at 4 High Ridge Park, Stamford, CT 06905.
Item 2. Identity and Background.
------------------------
Citizenship or State Principal Occupation
Name and Address of Organization or Employment
---------------- --------------- -------------
Brynwood Partners III, L.P. DE Investment Limited
Two Soundview Drive Partnership
Greenwich, CT 06830
Brynwood Management III, L.P. DE General Partner of
Two Soundview Drive Investment Person;
Greenwich, CT 06830 Investment Management
<PAGE>
Page 4 of 9 pages
Hendrik J. Hartong, Jr. U.S.A. General Partner of
c/o Brynwood Management III, L.P. Brynwood Management;
Two Soundview Drive Investment Management
Greenwich, CT 06830
John T. Gray U.S.A. General Partner of
c/o Brynwood Management III, L.P. Brynwood Management;
Two Soundview Drive Investment Management
Greenwich, CT 06830
Neither the Reporting Person nor any other person named in this Item 2
has, during the last five years, been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors), or been 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
violations with respect to such laws. Each of the individuals named in this Item
2 is a United States citizen.
Item 3. Source and Amount of Funds or Other Consideration.
--------------------------------------------------
Pursuant to the Stock Purchase Agreement the Reporting Person obtained
all of the Purchased Shares on June 8, 1998 for a total aggregate amount of
Seven Million One Hundred Thirty Nine Thousand Five Hundred Ten Dollars
($7,139,510). Payment of said aggregate purchase price was made (A) by wire
transfer of $4,500,000 to an account designated by Seller; and (B) by delivery
of a short term (less than 45 days) secured promissory note to Seller in the
amount of $2,639,510. The Reporting Person's working capital was the sole source
of the funds comprising the cash portion of consideration for the Purchased
Shares, and will be the sole source for the payment of the Promissory Note. The
source of such working capital are the capital contributions made by the
Reporting Person's limited partners in accordance with its partnership
agreement.
Item 4. Purpose of Transaction.
-----------------------
The Common Stock was acquired for the dual purposes of investment and
control and management of the Issuer.
Upon the expiration of certain restrictions currently applicable to
the Reporting Person pursuant to Rule 13d-1(e) under the Securities Exchange Act
of 1934, the Reporting Person intends to purchase from Seller an additional
200,000 shares of Issuer Common Stock at a purchase price of $2.00 per share.
Additionally, the Reporting Person would not rule out the further acquisition of
shares of Common Stock of the Issuer, as the Reporting Person generally views
the potential value of the Issuer Common Stock favorably.
<PAGE>
Page 5 of 9 pages
The Reporting Person and its controlling persons, limited partners and
employees hope to influence the operation of Issuer in a manner that will
improve the value and performance of the Issuer. In this regard, on the date
hereof, the Chairman and Chief Executive Officer of the Issuer resigned, along
with four other members of the Board of Directors. Three representatives of the
Reporting Person were elected directors to fill three of such vacancies,
including Mr. Hartong and Mr. Gray. The Reporting Person's nominees thus
comprise a majority of the Board of Directors of the Company, and it is
anticipated that the size of the Board of Directors will be reduced to four.
Except for the actions referred to in the preceding paragraph, the
Reporting Person currently has no other plans or proposals that relate to or
would result in any of the consequences listed in paragraphs (a) - (j) of Item 4
of the Special Instructions for Complying With Schedule 13D.
The Reporting Person intends to review on a continuing basis its
investment in the Issuer and the Issuer's business, prospects and financial
condition. Based on such continuing review, alternative investment opportunities
available to the Reporting Person and all other factors deemed relevant
(including, without limitation, the market for and price of the Issuer Common
Stock, offers for shares of such Common Stock, general economic conditions and
other future developments), the Reporting Person may decide to sell or seek the
sale of all or part of the Common Stock or to increase its holdings of the
Issuer Common Stock.
<PAGE>
Page 6 of 9 pages
Item 5. Interest in Securities of the Issuer.
-------------------------------------
(a) and (b) Set forth in the table below are the number and percentage
of shares of Issuer Common Stock beneficially owned by the Reporting Person and
the other persons named in Item 2 as of the date hereof.
<TABLE>
<CAPTION>
Number of Shares
Number of Shares Beneficially Number of Shares Aggregate Percentage of
Beneficially Owned Owned With Sole Beneficially Owned Number of Shares Shares
With Shared Voting and With Shared Beneficially Beneficially
Name Voting Power Dispositive Power Dispositive Power Owned Owned
- - ---- ------------ ----------------- ----------------- ----- -----
<S> <C> <C> <C> <C> <C>
Brynwood Partners III, 3,569,755 0 3,569,755 3,569,755 56.4%
L.P.
Brynwood Management 3,569,755(1) 0 3,569,755(1) 3,569,755(1) 56.4%(1)
III, L.P.
Hendrik J. Hartong, Jr. 3,569,755(2) 0 3,569,755(2) 3,569,755(2) 56.4%(2)
John T. Gray 3,569,755(3) 0 3,569,755(3) 3,569,755(3) 56.4%(3)
</TABLE>
(1) The Reporting Person alone owns all of the Purchased Shares. Brynwood
Management shares voting power and dispositive power over the Purchased
Shares only to the extent and by virtue of its rights as general partner of
the Reporting Person.
(2) The Reporting Person alone owns all of the Purchased Shares. Mr. Hartong
shares voting power and dispositive power over the Purchased Shares only to
the extent and by virtue of his rights as general partner of the Reporting
Person's general partner, Brynwood Management.
(3) The Reporting Person alone owns all of the Purchased Shares. Mr. Gray shares
voting power and dispositive power over the Purchased Shares only to the
extent and by virtue of his rights as general partner of the Reporting
Person's general partner, Brynwood Management.
(c) None.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
-------------------------------------------------------
The Reporting Person entered into that certain Stock Purchase
Agreement dated June 8, 1998 (a copy of which is attached as Exhibit 1 to this
Schedule 13D) with Seller and thereby obtained the Purchased Shares. The
Reporting Person also has an agreement with Seller to purchase an additional
200,000 shares of Issuer Common Stock for the same price per share as the
Reporting Person paid to Seller in the Stock Purchase Agreement no later than
July 23, 1998.
Except as otherwise noted in the preceding paragraph, neither the
Reporting Person nor any of the other persons named in Item 2 of this Schedule
13D has any contract, arrangement, understanding or relationship (legal or
otherwise) with any person with
<PAGE>
Page 7 of 9 pages
respect to any securities of the Issuer, including, but not limited to, transfer
or voting of such securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or loss
or the giving or withholding of proxies.
Item 7. Material to Be Filed as Exhibits.
---------------------------------
Exhibit
Number Description
- - ------ -----------
1 Stock Purchase Agreement dated June 8, 1998.
2 Promissory Note and Pledge Agreement dated June 8, 1998.
<PAGE>
Page 8 of 9 pages
SIGNATURES
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: June 12, 1998
BRYNWOOD PARTNERS III, L.P.
By: Brynwood Management III, L.P.
Its: General Partner
/s/ Hendrik J. Hartong, Jr.
----------------------------------
Hendrik J. Hartong, Jr.
A General Partner
<PAGE>
Page 9 of 9 pages
EXHIBIT INDEX
Exhibit
Number Description
- - ------ -----------
1 Stock Purchase Agreement dated June 8, 1998.
2 Promissory Note and Pledge Agreement dated June 8, 1998.
EXHIBIT 1
---------
STOCK PURCHASE AGREEMENT
by and between
BRYNWOOD PARTNERS III L.P.,
as the Purchaser,
AND
NOEL GROUP, INC.,
as the Seller
Dated: June 8, 1998
<PAGE>
EXECUTION COPY
STOCK PURCHASE AGREEMENT dated as of the 8th the day of June, 1998
(this "Agreement"), between BRYNWOOD PARTNERS III L.P., a Delaware limited
partnership (the "Purchaser") and NOEL GROUP, INC., a Delaware corporation (the
"Seller").
RECITALS:
WHEREAS, the Seller is the beneficial and record owner of 3,569,755
shares of common stock, par value $.01 per share, of Lincoln Snacks Company (the
"Company", such shares being the "Company Shares"), and desires to sell the
Company Shares to the Purchaser in accordance with the terms hereof;
WHEREAS, the Purchaser desires to purchase the Company Shares from the
Seller in accordance with the terms hereof;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations and agreements contained in this Agreement, the
parties hereto agree as follows:
ARTICLE I.
PURCHASE AND SALE OF THE SHARES
SECTION 1.1. TRANSFER OF SHARES; CONSIDERATION.
(a) Upon the terms and subject to the conditions hereof, on the
date hereof the Seller is selling, assigning and delivering to the Purchaser the
Company Shares free and clear of all options, pledges, security interests,
liens, mortgages, claims, debts, charges, voting agreements, voting trusts or
other encumbrances or restrictions on transfer of any kind whatsoever
(collectively, the "Encumbrances").
(b) Upon the terms and subject to the conditions hereof, on the
date hereof the Purchaser is purchasing and accepting the Company Shares and
paying and delivering the Purchase Price (as hereafter defined).
SECTION 1.2. THE CLOSING. The transfer of the Company Shares and the
consummation of the transactions contemplated by this Agreement (the "Closing")
is occurring simultaneously with the execution and delivery of this Agreement by
the parties hereto.
<PAGE>
2
(a) At the Closing, the Seller is delivering to the Purchaser:
(i) the Company Shares, properly endorsed for transfer or
accompanied by duly executed stock powers, in either case in blank or in the
name of the Purchaser; and
(ii) an opinion of Morrison & Foerster LLP, counsel to the
Seller, in substantially the form attached hereto as Exhibit A.
(b) At the Closing, the Purchaser is delivering to the Seller:
(i) an amount equal to $2.00 per Company Share for a total
aggregate amount of $7,139,510 (the "Purchase Price"), payable as follows: (A)
$2,639,510 by a secured promissory note of the Purchaser in the form attached
hereto as Exhibit B (the "Promissory Note"), and (B) $4,500,000 by wire transfer
of same day funds to an account designated by the Seller; and
(ii) an opinion of Cummings & Lockwood, counsel to the
Purchaser, in substantially the form attached hereto as Exhibit C.
SECTION 1.3. SELLER RELEASE. Effective as of the Closing Date, the
Seller hereby forever releases and discharges the Company from any and all
claims of such Seller against the Company or liabilities or obligations of the
Company to such Seller as a result of such Seller's having been a stockholder of
the Company, whether known or unknown, past or present.
SECTION 1.4. PAYMENT OF EXPENSES. Each party shall be obligated to pay
for any and all fees and expenses of its counsel and accountants and all other
costs and expenses incurred, directly or indirectly, by or on behalf of such
party in the preparation, negotiation, execution and delivery of this Agreement
and the consummation of the transactions contemplated herein.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the Purchaser, as of the
date hereof (except as to any representation or warranty which specifically
relates to another date) as follows:
SECTION 2.1. SHARE OWNERSHIP. The Company Shares have been duly
authorized, validly issued and are fully paid and nonassessable, and are owned
of record and beneficially by the Seller, free and clear of all Encumbrances.
<PAGE>
3
SECTION 2.2. COMPANY REPORTS.
(a) In connection with the representations and warranties contained
in this Section 2.2, Seller has informed the Purchaser (and Purchaser hereby
acknowledges) that: (i) no officer, director or representative of Seller serves
as an officer or director of the Company, (ii) Seller is not familiar with the
operations of the Company, (iii) Seller does not independently verify financial
and other information received from or concerning the Company, and (iv) in
connection with such representations and warranties Seller has made no
independent investigation of any factual matter.
(b) Subject to the foregoing subsection of this Section 2.2, to the
best knowledge of Seller, the Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 1997 and its Quarterly Reports on Form 10-Q for the
periods ended September 30, 1997, December 31, 1997 and March 31, 1998
(collectively, the "Company Reports") did not as of the respective dates thereof
contain any untrue statement of a material fact, nor 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 without independent investigation, Seller has no knowledge of
any material adverse developments affecting the Company since March 31, 1998.
For purposes of this Section 2.2, the term "knowledge" is confined to the actual
knowledge of officers of the Seller.
(c) To the knowledge of Seller, since March 31, 1998, the business
of the Company has been conducted in the ordinary course, consistent with past
practice.
(d) Except for the representations and warranties made in this
Section 2.2, Seller makes and has made no representations or warranties
concerning the Company Shares or the business, financial condition, operations
or prospects of the Company. Without limiting the generality of the foregoing,
Seller makes no representations or warranties as to the existence or effect of
any employment, severance or other agreements that may require payments to be
made as a result, directly or indirectly, of the transactions contemplated by
this Agreement.
SECTION 2.3. ORGANIZATION AND AUTHORIZATION. The Seller is a
corporation validly existing and in good standing under the laws of its
jurisdiction of organization. The Seller has the full power, authority and legal
right to execute, deliver and carry out the terms and conditions of this
Agreement and to sell the Company Shares to the Purchaser, and has taken all
necessary corporate action to authorize the execution, delivery and performance
of this Agreement. This Agreement has been duly and validly executed and
delivered by the Seller, and constitutes the legal, valid and binding obligation
of the Seller, enforceable against the Seller in accordance with its terms.
<PAGE>
4
SECTION 2.4. NO VIOLATION. The execution of this Agreement by the
Seller does not, and the performance by the Seller of its obligations hereunder
will not constitute a violation of, or conflict with or result in a default
under: (i) any contract, commitment, agreement, understanding, arrangement or
restriction of any kind, whether written or oral, to which the Seller is a party
or by which the Seller is bound, (ii) any judgment, decree or order applicable
to the Seller, or (iii) the Seller's certificate of incorporation or by-laws.
Neither the execution and delivery of this Agreement nor the performance by the
Seller of its obligations hereunder will violate any provision of law applicable
to the Seller.
SECTION 2.5. CONSENTS AND APPROVALS. No filing or registration with, no
notice to and no permit, authorization, consent or approval of any third party
or any public or governmental body or authority is necessary for the
consummation by the Seller of the transactions contemplated herein.
SECTION 2.6. BROKERS' FEES AND COMMISSIONS. The Seller has not employed
any investment banker, broker, finder or intermediary, and no fee or other
commission is owed by Seller to any third party, in connection with the
transactions contemplated herein.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Seller and the
Company, as of the date hereof (except as to any representation or warranty
which specifically relates to an earlier date) and as of the Closing Date, as
follows:
SECTION 3.1. ORGANIZATION AND AUTHORIZATION. The Purchaser is a limited
partnership validly existing and in good standing under the laws of its
jurisdiction of organization. The Purchaser has the full power, authority and
legal right to execute, deliver and carry out the terms and conditions of this
Agreement and to purchase the Company Shares from the Seller, and has taken all
necessary action to authorize the execution, delivery and performance of this
Agreement. This Agreement and the Promissory Note have been duly and validly
executed and delivered by the Purchaser, and constitute the legal, valid and
binding obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms.
SECTION 3.2. NO VIOLATION. The execution of this Agreement by the
Purchaser does not, and the performance by the Purchaser of its obligations
hereunder (including the payment of the Promissory Note in accordance with its
terms) will not constitute a violation of, or conflict with or result in a
default under: (i) any contract, commitment, agreement, understanding,
arrangement or restriction of any kind, whether
<PAGE>
5
written or oral, to which the Purchaser is a party or by which the Purchaser or
its properties or assets is bound, (ii) any judgment, decree or order applicable
to the Purchaser, or (iii) the Purchaser's articles of partnership or agreement
of limited partnership. Neither the execution and delivery of this Agreement nor
the performance by the Purchaser of its obligations hereunder will violate any
provision of law applicable to the Purchaser.
SECTION 3.3. CONSENTS AND APPROVALS. No filing or registration with, no
notice to and no permit, authorization, consent or approval of any third party
or any public or governmental body or authority is necessary for the
consummation by the Purchaser of the transactions contemplated herein.
SECTION 3.4. ACQUISITION OF STOCK. Purchaser is an accredited investor
(as that term is defined in the Securities Act of 1933, as amended (the "Act"),
and the regulations thereunder), and Purchaser has such knowledge and experience
in financial and business matters as is required for evaluating the merits and
risks of an investment in the Company Shares. Purchaser is aware that the
Company Shares have not been registered under the Act and agrees that such
Company Shares shall not be sold, hypothecated or otherwise transferred in the
absence of such registration unless such contemplated transfer is exempt from
the registration requirements of the Act. The undersigned hereby acknowledges
that the certificate representing the Company Shares may be legended to reflect
such restrictions. The Purchaser is acquiring the Company Shares for its own
account and not with a view to the distribution or resale thereof and with a
present intention of holding the Company Shares for purposes of investment.
SECTION 3.5. BROKERS' FEES AND COMMISSIONS. The Purchaser has not
employed any investment banker, broker, finder or intermediary, and such no fee
or other commission is owed by Purchaser to any third party, in connection with
the transactions contemplated herein.
ARTICLE IV.
COVENANTS
SECTION 4.1. ALL REASONABLE EFFORTS. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all action, and to do, or
cause to be done as promptly as practicable, all things necessary, proper and
advisable under applicable laws and regulations to consummate and make effective
the transactions contemplated by this agreement. If at any time after the
Closing any further action is necessary or desirable to carry out the purposes
of this Agreement, including, without limitation, the execution of additional
instruments, the proper officers and directors of the Purchaser, and the Seller
shall take all such necessary action.
<PAGE>
6
SECTION 4.2. PUBLIC ANNOUNCEMENTS. The Purchaser and the Seller will
consult with each other and will mutually agree upon the content and timing of
any press release or other public statements with respect to the transactions
contemplated by this Agreement and shall not issue any such press release or
make any such public statement prior to such consultation and agreement, except
as may be required by applicable law or based upon the advice of counsel that
such disclosure would be prudent under applicable securities laws.
ARTICLE V.
SURVIVAL AND INDEMNIFICATION
SECTION 5.1. SURVIVAL. All representations, warranties, covenants and
agreements contained in this Agreement, and in any certificate, schedule,
document or other writing delivered pursuant hereto or in connection with the
transactions contemplated herein shall be in all cases deemed to have been
relied upon by the parties hereto, and shall survive the Closing; provided that
any such representations, warranties, covenants and agreements shall be fully
effective and enforceable only for a period of twelve months after the Closing,
and shall thereafter be of no further force or effect, except that the
representations and warranties set forth in Section 2.1 (Share Ownership) shall
survive indefinitely. The representations, warranties, covenants and agreements
contained in this Agreement or any certificate, schedule, document or other
writing delivered pursuant hereto shall not be affected by any investigation,
verification or examination by any party hereto or by any person acting on
behalf of any such party.
SECTION 5.2. INDEMNIFICATION OF THE PURCHASER. From and after the
Closing, the Seller agrees to indemnify, defend and save the Purchaser and its
directors, officers, employees, owners, agents and affiliates and their
successors and assigns or heirs and personal representatives, as the case may be
(each a "Purchaser Indemnified Party"), forever harmless from and against, and
to promptly pay to a Purchaser Indemnified Party or reimburse a Purchaser
Indemnified Party for any and all losses, damages, expenses (including, without
limitation, court costs, amounts paid in settlement, judgments, reasonable
attorneys' fees or other expenses for investigating and defending, including,
without limitation, those arising out of the enforcement of this Agreement),
suits, actions, claims, deficiencies, liabilities or obligations (collectively,
the "Losses") sustained or incurred by such Purchaser Indemnified Party relating
to, caused by or resulting from any misrepresentation or breach of warranty, or
failure to fulfill or satisfy any covenant or agreement made by the Seller
contained herein or in any certificate, schedule, document or other writing
delivered by the Seller pursuant hereto or any covenant or agreement made by the
Seller herein or in any certificate, schedule, document or other writing
delivered by the Seller pursuant hereto.
<PAGE>
7
SECTION 5.3. INDEMNIFICATION OF THE SELLER. From and after the Closing,
the Purchaser agrees to indemnify, defend and save the Seller and its respective
legal representatives, heirs, successors, assigns, agents and affiliates (each,
a "Seller Indemnified Party") forever harmless from and against, and to promptly
pay to a Seller Indemnified Party or reimburse a Seller Indemnified Party for,
any and all Losses sustained or incurred by such Seller Indemnified Party
relating to, caused by or resulting from any misrepresentation or breach of
warranty, or failure to fulfill or satisfy any covenant or agreement made by the
Purchaser contained herein or in any certificate, schedule, document or other
writing delivered by the Purchaser pursuant hereto, or any covenant or agreement
made by the Purchaser in any certificate, schedule, document or other writing
delivered by the Purchaser pursuant hereto.
SECTION 5.4. NOTICE OF CLAIMS. In the case of a claim for
indemnification under Section 5.2 or Section 5.3 hereof, upon determination by a
Purchaser Indemnified Party or a Seller Indemnified Party, as the case may be,
that it has a claim for indemnification, the Indemnified Party shall deliver
notice of such claim to the Indemnifying Party, setting forth in reasonable
detail the basis of such claim for indemnification (each, an "Indemnification
Notice"). [Upon the Indemnification Notice having been given to the Indemnifying
Party, the Indemnifying Party shall have thirty (30) days in which to notify the
Indemnified Party in writing (the "Dispute Notice") that the amount of the claim
for indemnification is in dispute, setting forth in reasonable detail the basis
of such dispute. In the event that a Dispute Notice is not given to the
Indemnified Party within the required thirty (30) day period the Indemnifying
Party shall be obligated to pay to the Indemnified Party the amount set forth in
the Indemnification Notice within sixty (60) days after the date that the
Indemnification Notice had been given to the Indemnifying Party.]
In the event that a Dispute Notice is timely given to an Indemnified
Party, the parties hereto shall have thirty (30) days to resolve any such
dispute. In the event that such dispute is not resolved by such parties within
such period, the parties shall have the right to pursue all available legal
remedies to resolve such dispute.
ARTICLE VI.
MISCELLANEOUS PROVISIONS
SECTION 6.1. AMENDMENT AND MODIFICATION; WAIVER OF COMPLIANCE. The
Purchaser, on the one hand, or the Seller, on the other hand, will not be deemed
as a consequence of any act, delay, failure, omission, forbearance or other
indulgence granted from time to time by such party: (i) to have waived, or to be
estopped from exercising, any of its rights or remedies under this Agreement; or
(ii) to have modified, changed, amended, terminated, rescinded, or superseded
any of the terms of this Agreement, unless such
<PAGE>
8
waiver, modification, amendment, change, termination, rescission, or suppression
is set forth in writing and signed by the party to be bound thereby. No single
or partial exercise by the Purchaser, on the one hand, or the Seller, on the
other hand, of any right or remedy will preclude any other right or remedy, and
a waiver expressly made in writing on one occasion will be effective only in
that specific instance and only for the precise purpose for which given, and
will not be construed as a consent to or a waiver of any right or remedy on any
future occasion or a waiver of any right or remedy against any other party.
SECTION 6.2. PARTIES IN INTEREST. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, expressed or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
SECTION 6.3. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed given upon the earlier to occur of
delivery thereof if by hand or upon receipt if sent by mail (registered or
certified mail, postage prepaid, return receipt requested) or on the second next
business day after deposit if sent by a recognized overnight delivery service or
upon transmission if sent by telecopy or facsimile transmission (in each case
with receipt verified) as follows:
(a) If to the Purchaser:
Brynwood Partners III L.P.
Two Soundview Avenue
Greenwich, CT 06830
Attention: Hendrik J. Hartong, Jr. and
John T. Gray
Telephone: (203) 622-8223
Facsimile: (203) 622-9334
With a copy to:
Katherine P. Burgeson, Esq.
Cummings & Lockwood
Four Stamford Plaza
107 Elm Street
Stamford, Connecticut 06904-0120
Telephone: (203) 351-4260
Facsimile: (203) 351-4499
(b) if to the Seller:
<PAGE>
9
Noel Group, Inc.
667 Madison Avenue
New York, New York 10021
Attention: Stanley R. Rawn, Jr. and
Herbert M. Friedman, Esq.
Facsimile: (212) 758-8531
With a copy to:
Charles B. Friedman, Esq.
Morrison & Foerster LLP
1290 Avenue of the Americas
New York, NY 10104
Facsimile: (212) 468-7900
; and provided that each of the parties hereto shall promptly notify the other
parties hereto of any change of address, which address shall become such party's
address for the purposes of this Section 8.4.
SECTION 6.4. GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York, without regard to the conflicts-of-laws principles thereof. Each of
the Company and the Seller hereby irrevocably (a) submits to the jurisdiction
of, and agrees that any action, suit or other proceeding shall be brought in,
the courts of, or the Federal Court sitting in, the State of New York for the
purpose of any such suit, action or other proceeding arising out of or based
upon this Agreement or the transactions contemplated herein, (b) waives to the
extent not prohibited by applicable law, rule or regulation, and agrees not to
assert, by way of motion, as a defense or otherwise, in any such action, suit or
other proceeding any claim that any such person is not subject personally to the
jurisdiction of the aforementioned courts, that its respective property is
exempt or immune from attachment or execution, that any such suit, action or
other proceeding brought in one of the aforementioned courts is brought in an
inconvenient forum, that the venue of any such suit, action or other proceeding
brought in one of the aforementioned courts is improper, or that this Agreement,
or the transactions contemplated herein may not be enforced in or by such court,
and (c) consents to service of process in any such suit, action or other
proceeding by registered or certified mail.
SECTION 6.5. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
<PAGE>
10
SECTION 6.6. HEADINGS. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement or understanding of the parties hereto and shall not affect in any way
the meaning or interpretation of this Agreement.
SECTION 6.7. ENTIRE AGREEMENT. This Agreement and the other documents
and instruments referred to herein, and the other agreements included in or
contemplated by the exhibits hereto (the "Other Agreements") embody the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein or therein. There are no agreements, representations,
warranties or covenants other than those expressly set forth or referred to
herein or therein. This Agreement and the Other Agreements supersede all prior
agreements and understandings between the parties hereto, whether written or
oral, express or implied, with respect to such subject matter herein and
therein.
SECTION 6.8. ASSIGNMENT. This Agreement shall not be assigned by
operation of law or otherwise. Subject to the foregoing, this Agreement will be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors and permitted assigns.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed on its behalf by its duly authorized officers or
representatives, as the case may be, all as of the day and year first above
written.
BRYNWOOD PARTNERS III L.P.
By BRYNWOOD MANAGEMENT III L.P.
Its General Partner
/s/ Hendrik J. Hartong, Jr.
-----------------------------------------
Hendrik J. Hartong, Jr.
A General Partner of
Brynwood Management III L.P.
NOEL GROUP, INC.
By:/s/ NOEL GROUP, INC.
-------------------------------------------
EXHIBIT 2
---------
EXECUTION COPY
PROMISSORY NOTE
AND PLEDGE AGREEMENT
$2,639,510.00 June 8, 1998
FOR VALUE RECEIVED, BRYNWOOD PARTNERS III L.P., a Delaware limited
partnership ("Maker") hereby promises to pay to the order of NOEL GROUP, INC., a
Delaware corporation, or its assigns (hereinafter called "Payee") the principal
sum of TWO MILLION SIX HUNDRED THIRTY NINE THOUSAND FIVE HUNDRED TEN DOLLARS
($2,639,510.00) (the "Principal Amount") in lawful money of the United States of
America.
The Principal Amount shall be payable in full, together with interest
on the Principal Amount compounded annually at a rate per annum equal to 6% on
July 23, 1998.
The following additional terms shall govern this Promissory Note and
Pledge Agreement (this "Note"):
1. Principal together with accrued and unpaid interest in respect of
this Note shall be paid in lawful currency of the United States, in immediately
available funds, at the principal executive offices of Payee, 667 Madison
Avenue, Suite 2500, New York, New York 10021, or at such other place or to such
other person as Payee may designate in a written notice to Maker.
2. As security for the full, prompt and complete payment of all
principal and interest on this Note, Maker hereby pledges, assigns and grants to
Payee a continuing security interest in the shares of the Common Stock of
Lincoln Snacks Company (the "Shares") acquired by Maker pursuant to the Stock
Purchase Agreement of even date herewith between Maker and Payee (the "Purchase
Agreement"), together with the cash and non-cash proceeds of such Shares, and
hereby assigns to Payee the right to receive all such cash and non-cash
proceeds, including without limitation distributions of cash, securities or
other property in respect of the Shares (such Shares together with all such cash
and non-cash proceeds thereof being hereinafter referred to as the
"Collateral").
3. So long as no Event of Default (as hereinafter defined) has occurred
and is continuing, Maker shall be entitled to exercise any voting or other
rights of ownership in respect of the Collateral not inconsistent with the terms
and provisions hereof.
<PAGE>
2
4. Any and all cash received by Maker in respect of the Collateral
(whether in respect of dividends or otherwise) shall promptly be paid over to
Payee in prepayment of the indebtedness represented by this Note.
5. Any securities or other property, other than cash, received by Maker
in respect of the Collateral, including without limitation any securities or
other property distributed in respect of the Company Shares or received in
exchange for or in addition to the Collateral pursuant to any merger,
consolidation or dissolution, shall promptly be delivered in pledge to Payee to
be held by Payee as part of the Collateral. Until the repayment in full of all
principal due under this Note, all Proceeds (as defined in Section 9-306(1) of
the Uniform Commercial Code of the State of New York) in respect of the
Collateral received by Maker and not pledged in accordance with this Paragraph
or applied as a prepayment in accordance with Paragraph 4 above shall be deemed
to be held in trust by Maker and as Collateral hereunder for the benefit of
Payee.
6. The obligations of Maker hereunder are absolute and unconditional
and payment of the Principal Amount hereof shall not be subject to any defense,
counterclaim or right of set-off. This is a full recourse Note.
7. Maker hereby represents and warrants that:
a. Immediately following the Closing (as defined in the
Purchase Agreement), and at all times thereafter until all amounts due
under this Note shall have been paid in full, Maker will be the sole
beneficial owner of the Collateral free and clear of all liens,
charges and encumbrances other than those created hereby and that,
upon the deposit and pledge hereunder, Payee has acquired a valid,
enforceable security interest therein and lien thereon;
b. Maker has not granted, and until all amounts due under
this Note have been paid in full Maker will not grant, to any person
other than Payee any interest in the Collateral, whether superior to,
equal to or inferior to the rights of Payee therein; and
c. Neither the execution and delivery of this Note nor the
performance of any of the terms hereof constitute or will constitute a
material breach of or a default under any law, rule, regulation,
contract, agreement or arrangement applicable to Maker.
8. The following shall constitute an "Event of Default" within the
meaning of this Note:
a. Maker shall fail or refuse to make payment in full of any
amount due hereunder when the same shall become due; or
<PAGE>
3
b. Maker shall default under any material obligation to any
lender of Maker and such lender declares a default or otherwise
accelerates payment against Maker; or
c. (i) Maker shall make a general assignment for the benefit
of its creditors, (ii) the adjudication in bankruptcy of Maker, (iii)
the filing of a voluntary petition by Maker under any of the
provisions of the United States bankruptcy code or similar laws of any
jurisdiction, (iv) the filing of any answer or other pleading
admitting the material allegations of any petition filed against Maker
in any bankruptcy, insolvency or other such proceeding, (v) the filing
of a petition against Maker under any of the provisions of any
bankruptcy laws of the United States or similar laws of any
jurisdiction, or (vi) the petition for, or the appointment of, or
possession by, a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or other similar official) of Maker or any substantial
part of its properties or assets.
9. In the event of and during the continuance of an Event of Default as
defined in Paragraph 8(a) or 8(b), Payee may declare the unpaid Principal Amount
of this Note and all accrued interest hereunder to be immediately due and
payable, and in the event of the occurrence of an Event of Default as defined in
Paragraph 8(c), the unpaid Principal Amount of this Note and all accrued
interest hereunder shall automatically, without any action on the part of Payee,
become immediately due and payable, in each case without presentment, demand,
protest or any notice of any kind, all of which are hereby waived. Upon the
occurrence of an Event of Default, Payee, in addition to any other rights it may
have, shall have the right at any time and from time to time to sell, resell,
assign and deliver, in its discretion, all or any of the Collateral in one or
more parcels at the same or different times, and all right, title and interest,
claim and demand therein and right of redemption thereof, on any securities
exchange on which the Collateral or any of them may be listed, or at public or
private sale, for cash, upon credit or for future delivery. Payee may purchase
all or any of the Collateral being sold. No demand, advertisement or notice
shall be required in connection with any sale or other disposition of any part
of the Collateral which is listed on a recognized securities exchange or traded
in the over-the-counter market and reported in the National Association of
Securities Dealers Automated Quotation System; otherwise Payee shall give Maker
at least twenty (20) calendar days' prior notice of the time and place of any
public sale and of the time after which any private sale or other disposition is
to be made, which notice Maker agrees is reasonable. Payee may, without notice
or publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. Maker shall pay all reasonable costs and
expenses of every kind for sale or delivery, including brokers' and attorneys'
fees, and after deducting such costs and expenses from the proceeds of sale,
Payee shall apply any residue to the payment of the indebtedness or obligations
of Maker under this Note, and Maker shall
<PAGE>
4
continue to be liable for any deficiency. The balance, if any, remaining after
payment in full of all of such indebtedness shall be paid to Maker, subject to
any duty of Payee imposed by law to the holder of any subordinate security
interest in the Collateral known to Payee. Payee, in addition to all other
rights or remedies which it may have, shall have all of the rights and remedies
of a secured party upon default under the Uniform Commercial Code of the State
of New York and under any other applicable law. Payee may exercise any or all of
the rights which it may have in the premises in any order, from time to time,
and shall not be obligated to exercise any of such rights. No failure to
exercise any right shall operate as a waiver and no waiver, consent or agreement
given in any instance shall adversely effect the rights of Payee in any other
instance.
10. Maker recognizes that Payee may be unable to effect a public sale
of all or a part of the Collateral by reason of certain prohibitions contained
in the Securities Act of 1933, as amended, or in applicable Blue Sky or other
state securities laws, as now or hereafter in effect, but may be compelled to
resort to one or more private sales to a restricted group of purchasers who will
be obliged to agree, among other things, to acquire such Collateral for their
own account, for investment and not with a view to the distribution or resale
thereof. Maker agrees that private sales so made may be at prices and other
terms less favorable to the seller than if such Collateral were sold at public
sales, and that Payee has no obligation to delay the sale of any such Collateral
for the period of time necessary to permit the issuer of such Collateral, even
if such issuer would agree, to register such Collateral for public sale under
such applicable securities laws.
11. The remedies provided herein in favor of Payee shall not be deemed
exclusive, but shall be cumulative, and shall be in addition to all other
remedies in favor of Payee existing at law or in equity. Payee shall have no
duty as to the collection or protection of the Collateral or any income thereon
or as to the preservation of any rights pertaining thereto, beyond the safe
custody thereof of any securities representing such Collateral that are actually
in its possession. No delay on the part of Payee in exercising any of its
options, powers or rights, or any partial or single exercise thereof, shall
constitute a waiver thereof.
12. Upon payment in full of all indebtedness of Maker hereunder, Maker
shall be entitled to the return of all of the Collateral which has not been used
or applied toward the payment of such indebtedness. The return by Payee to Maker
of such Collateral and other property shall be without representation or
warranty of any nature whatsoever and wholly without recourse.
13. The Maker shall at any time and from time to time upon the request
of the holder of this Note, execute and deliver such further powers,
authorities, proxies, and other documents and do such further acts and things as
the holder of this Note may reasonably request in order to offset the purposes
hereof.
<PAGE>
5
14. Maker shall, upon request, pay all of the reasonable expenses of
Payee in connection with the enforcement of any rights of Payee under this Note.
15. This Note shall in all respects be governed by the laws of the
State of New York applicable to contracts made and to be performed entirely in
such State and any proceeding relating to this Note or any other indebtedness
secured may be brought only in the federal or state courts sitting in that
state, to the jurisdiction and venue of which the parties hereby submit. This
Note may not be altered or amended, except by a writing duly signed by the party
against whom such alteration or amendment is sought to be enforced.
16. This Note may be prepaid in part or in full at any time without
penalty. All prepayments shall be applied first to the payment of accrued and
unpaid interest and, second, to the reduction of principal.
17. Maker hereby waives presentment for payment, demand, notice of
dishonor, notice of protest and protest and all other notices and demands in
connection with the delivery, acceptance, performance or default of this Note.
BRYNWOOD PARTNERS III L.P.
By: BRYNWOOD MANAGEMENT III L.P.
its General Partner
/s/ Hendrik J. Hartong, Jr.
--------------------------------------
Hendrik J. Hartong, Jr.
A General Partner of Brynwood
Management III L.P.
THIS IS A FULL RECOURSE NOTE. PAYEE IS NOT OBLIGATED TO RESORT TO THE COLLATERAL
AND MAKER IS RESPONSIBLE FOR THE ENTIRE PRINCIPAL AND INTEREST OF THIS NOTE,
INCLUDING ANY DEFICIENCY IN THE EVENT PAYEE DOES RESORT TO THE COLLATERAL.
