EXHIBIT (e)(1)
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of August 28, 2000 (this
"Agreement"), among Xxxxxxxx Wine Estates Holdings, Inc., a Delaware corporation
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(the "Company"), Xxxxxx'x Brewing Group Limited (ABN:49 000 000 000), a
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corporation organized under the laws of the State of South Australia,
Commonwealth of Australia ("Parent"), and Bordeaux Acquisition Corp., a Delaware
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corporation and a wholly owned subsidiary of Parent ("Purchaser").
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RECITALS
A. The Boards of Directors of the Company and Parent have each
determined that it is in the best interests of their respective stockholders for
Parent to acquire the Company upon the terms and subject to the conditions set
forth herein;
B. In furtherance thereof, it is proposed that Purchaser will make a
cash tender offer (the "Offer") to purchase all of the issued and outstanding
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shares of Class A common stock, $0.01 par value, of the Company (the "Class A
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Shares") and all of the issued and outstanding shares of Class B common stock,
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$0.01 par value, of the Company (the "Class B Shares" and, together with the
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Class A Shares, the "Shares"), for $55.75 per Share (such price or such higher
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price as may be paid in the Offer the "Per Share Amount"), net to the seller in
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cash;
C. Also in furtherance thereof, the Boards of Directors of the
Company and Purchaser have each approved the merger (the "Merger") of Purchaser
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into the Company following the Offer in accordance with the Delaware General
Corporation Law (the "DGCL") and upon the terms and subject to the conditions
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set forth herein;
D. The members of the Board of Directors of the Company (the "Board
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of Directors") present at a meeting duly called and held on August 28, 2000 have
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unanimously resolved to recommend acceptance of the Offer and the Merger to the
holders of Shares (the "Stockholders") and have determined that the
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consideration to be paid for each Share in the Offer and the Merger is fair to
the holders of such Shares and to recommend that the holders of such Shares
accept the Offer and approve the Merger, this Agreement and the transactions
contemplated hereby; and
E. In order to induce Parent and Purchaser to enter into this
Agreement, concurrently with the execution and delivery hereof, Parent,
Purchaser and certain of the Company's Stockholders (who beneficially own
approximately 55% of the outstanding Shares), are entering into a Tender, Voting
and Option Agreement, dated the date hereof (the "Voting Agreement"):
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NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the Company, Parent and Purchaser hereby agree as follows:
I. THE TENDER OFFER
1.1 The Offer. (a) Provided that this Agreement shall not have been
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terminated in accordance with Section 8.1 hereof and none of the events set
forth in Annex I hereto shall have occurred and be continuing, as promptly as
practicable, but in no event later than September 5, 2000, Purchaser shall
commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), the Offer whereby Purchaser will offer to
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purchase for cash all of the Shares at $55.75 per Share, net to the seller in
cash, without interest, and, subject to the conditions of the Offer and this
Agreement, shall use reasonable best efforts to consummate the Offer.
Notwithstanding the foregoing, if between the date of this Agreement and the
Effective Time the outstanding Shares shall have been changed into a different
number of shares or a different class, by reason of any stock dividend,
subdivision, reclassification, recapitalization, split, combination or exchange
of Shares, the Per Share Amount will be correspondingly adjusted on a per Share
basis to reflect such stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of Shares. The obligation of
Purchaser to consummate the Offer and to accept for payment any Shares tendered
pursuant thereto shall be subject to the satisfaction of only those conditions
set forth in Annex I. Subject to Section 1.1(b), Parent expressly reserves the
right to waive any such condition or to increase the price per Share to be paid
pursuant to the Offer. The Per Share Amount shall be net to the seller in cash,
subject to reduction only for any applicable Federal back-up withholding or
stock transfer taxes payable by the seller. The Company agrees that no Shares
held by the Company will be tendered pursuant to the Offer.
(b) Without the prior written consent of the Company, Purchaser shall
not (i) decrease or change the form of the Per Share Amount, (ii) decrease the
number of Shares sought in the Offer, (iii) amend or waive satisfaction of the
Minimum Condition (as defined in Annex I), (iv) impose additional conditions to
the Offer, or (v) amend any other term of the Offer in any manner adverse to the
holders of Shares; provided, however, that if on the initial expiration date of
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the Offer, which will be 20 Business Days following commencement of the Offer
(together with any extensions thereof, the "Expiration Date"), all conditions to
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the Offer shall not have been satisfied or waived, Purchaser may, and at the
Company's request will, extend the Expiration Date from time to time for such
additional periods not to exceed 30 calendar days in the aggregate in order to
permit such conditions to be satisfied (but not beyond the Outside Date), and
Purchaser may amend any term of the Offer in any manner not materially adverse
to the Stockholders. Notwithstanding that all conditions to the Offer have been
satisfied, Parent may, in its sole discretion, extend the Expiration Date for up
to 10 Business Days. In the event that the Minimum Condition has been satisfied
and all other conditions to the Offer have been satisfied or waived but less
than 100% of the Class A Shares and 90% of the Class B Shares, calculated on a
fully diluted basis, have been validly tendered and not withdrawn on the
Expiration Date, Purchaser shall accept and purchase all of the Shares tendered
in the initial offer period and may notify Stockholders of Purchaser's intent to
provide a "subsequent offer period," as long as providing for the subsequent
offering period does not require the extension of the initial offer
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period under applicable rules and regulations of the Securities and Exchange
Commission (the "SEC"), for tender of at least 100% of the Class A Shares and
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90% of the Class B Shares pursuant to Rule 14d-11 of the Exchange Act, which
subsequent offer period shall not exceed 10 Business Days. Purchaser shall, on
the terms and subject to the prior satisfaction or waiver of the conditions of
the Offer, accept for payment and purchase, as soon as permitted under the terms
of the Offer, all Shares validly tendered and not withdrawn prior to the
expiration of the Offer. For the benefit of the Stockholders, Parent shall cause
Purchaser to have sufficient funds to make all payments required to be made
pursuant to Sections 2.6 and 2.8 hereof, and Parent shall cause Purchaser to
comply with all of its obligations hereunder.
(c) As soon as practicable on the date of the public announcement of
the Offer, Purchaser will file or cause to be filed with the SEC the joint press
release announcing the Offer on Schedule TO ("Schedule TO"), and as soon as
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practicable on the date of commencement of the Offer, Purchaser will file or
cause to be filed with the SEC a tender offer statement on Schedule TO which
will contain an offer to purchase and related letter of transmittal and other
ancillary Offer documents and instruments pursuant to which the Offer will be
made (collectively, with any supplements or amendments thereto or any other
documents filed by Parent or Purchaser with the SEC with respect to the Offer
and related transactions, the "Offer Documents"). Each of Parent, Purchaser and
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the Company agrees promptly to correct any information provided by it for use in
the Schedule TO or the Offer Documents if and to the extent that it shall have
become false or misleading in any material respect and to supplement the
information provided by it specifically for use in the Schedule TO or the Offer
Documents to include any information that shall become necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and Purchaser further agrees to take all steps necessary
to cause the Schedule TO, as so corrected or supplemented, to be filed with the
SEC and the Offer Documents, as so corrected or supplemented, to be disseminated
to holders of Shares, in each case as and to the extent required by applicable
federal securities laws. The Company and its counsel shall be given a reasonable
opportunity to review and comment on any Offer Documents before they are filed
with the SEC.
1.2 Company Action. (a) The Company hereby approves of and consents
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to the Offer and represents and warrants that (i) the Board of Directors, at a
meeting duly called and held on August 28, 2000, unanimously (with one Board
member absent) and duly (x) approved and adopted this Agreement and approved the
Voting Agreement and the transactions contemplated hereby and thereby, including
the Offer and the Merger (such adoption and approval being sufficient to render
Section 203 of the DGCL inapplicable to this Agreement and the Voting Agreement
and the transactions contemplated hereby, including the Offer and the Merger,
assuming that Parent and Purchaser are not "interested stockholders," as such
term is defined in Section 203 of the DGCL (an "interested stockholder"),
immediately prior to the execution of this Agreement and the Voting Agreement by
Parent and Purchaser), (y) recommended that the Stockholders accept the Offer,
tender their Shares pursuant to the Offer and adopt and approve this Agreement
and the transactions contemplated hereby, including the Merger, and (z)
determined that this Agreement and the transactions contemplated hereby,
including the Offer and the Merger, are fair to and in the best interests of the
Stockholders and (ii) Xxxxxxx, Xxxxx & Co., the Company's financial advisor, has
rendered to the
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Board of Directors its opinion to the effect that the consideration to be
received by the holders of Shares pursuant to the Offer and the Merger is fair
to such holders from a financial point of view.
(b) The Company shall file with the SEC, on the date of the filing by
Purchaser of the joint press release on Schedule TO, the joint press release
announcing the Offer on Schedule 14D-9 and, on the date of the filing by
Purchaser of the Schedule TO containing a tender offer statement, a
Solicitation/Recommendation Statement (such filings, together with any
amendments or supplements thereto, the "Schedule 14D-9"). The Schedule 14D-9
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will comply in all material respects with the provisions of all applicable
Federal securities laws. The Company will use its reasonable best efforts to
have Schedule 14D-9 available for inclusion in the initial mailing (and any
subsequent mailing) of the Offer Documents to the Stockholders. In the event
that the Schedule 14D-9 is not available for inclusion in the initial mailing
(and any subsequent mailing), the Company shall promptly, at its expense, mail
such Schedule 14D-9 to Stockholders. The Schedule 14D-9 and the Offer Documents
will contain the recommendations of the Board of Directors described in Section
1.2(a) hereof. The Company agrees promptly to correct the Schedule 14D-9 if and
to the extent that it shall become false or misleading in any material respect
(and each of Parent and Purchaser, with respect to written information supplied
by it specifically for use in the Schedule 14D-9, shall promptly notify the
Company of any required corrections of such information and cooperate with the
Company with respect to correcting such information) and to supplement the
information contained in the Schedule 14D-9 to include any information that
shall become necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and the Company shall
take all steps necessary to cause the Schedule 14D-9 as so corrected to be filed
with the SEC and disseminated to Stockholders to the extent required by
applicable Federal securities laws. Parent and its counsel shall be given a
reasonable opportunity to review and comment on the Schedule 14D-9 before it is
filed with the SEC.
(c) In connection with the Offer, the Company shall promptly upon
execution of this Agreement furnish Parent with mailing labels containing the
names and addresses of all record holders of Shares and security position
listings of Shares held in stock depositories, each as of a recent date, and
shall promptly furnish Parent with such additional information, including
updated lists of Stockholders, mailing labels and security position listings,
and such other information and assistance as Parent or its agents may reasonably
request for the purpose of communicating the Offer to the record and beneficial
holders of Shares.
1.3 Directors. If requested by Parent, (a) following the purchase by
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Purchaser of any Shares pursuant to the Offer and thereafter (b) the purchase of
Shares pursuant to the Voting Agreement, and from time to time thereafter as
Shares are acquired by Purchaser, Parent shall be entitled to designate such
number of directors, rounded up to the next whole number, on the Board of
Directors as will give Parent, subject to compliance with Section 14(f) of the
Exchange Act, representation on the Board of Directors equal to at least that
number of directors which equals the product of the total number of directors on
the Board of Directors (giving effect to the directors appointed or elected
pursuant to this sentence and including current directors serving as officers of
the Company) multiplied by the percentage that the aggregate number of Shares
beneficially owned by Parent or any affiliate of Parent (including for purposes
of this Section 1.3 such Shares as are accepted
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for payment pursuant to the Offer, but excluding Shares held by the Company)
bears to the number of Shares outstanding. At such times, if requested by
Parent, the Company will also cause each committee of the Board of Directors to
include persons designated by Parent constituting the same percentage of each
such committee as Parent's designees are of the Board of Directors. The Company
shall, upon request by Parent, promptly increase the size of the Board of
Directors or use its best efforts to secure the resignations of such number of
directors as is necessary to enable Parent's designees to be elected to the
Board of Directors in accordance with the terms of this Section 1.3 and shall
cause Parent's designees to be so elected; provided, however, that, in the event
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that Parent's designees are appointed or elected to the Board of Directors,
until the Effective Time, the Board of Directors shall include at least three
directors who are directors on the date hereof and who are neither officers of
the Company nor designees, stockholders, affiliates or associates (within the
meaning of the Federal securities laws) of Parent (such directors, the
"Independent Directors"); provided further, that if no Independent Directors
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remain, the other directors shall designate three persons to fill the vacancies
none of whom shall be either an officer of the Company or a designee,
stockholder, affiliate or associate of Parent, and such persons shall be deemed
to be Independent Directors for purposes of this Agreement.
Subject to applicable law, the Company shall promptly take all action
necessary pursuant to Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder in order to fulfill its obligations under this Section
1.3 and shall include in the Schedule 14D-9 mailed to Stockholders promptly
after the commencement of the Offer (or an amendment thereof or an information
statement pursuant to Rule 14f-1 if Parent has not theretofore designated
directors) such information with respect to the Company and its officers and
directors as is required under Section 14(f) and Rule 14f-1 in order to fulfill
its obligations under this Section 1.3. Parent will supply the Company and be
solely responsible for any information with respect to itself and its nominees,
officers, directors and affiliates required by Section 14(f) and Rule 14f-1.
Notwithstanding anything in this Agreement to the contrary, prior to the
Effective Time, the affirmative vote of a majority of the Independent Directors
shall be required to (i) amend or terminate this Agreement on behalf of the
Company, (ii) exercise or waive any of the Company's rights or remedies
hereunder, (iii) extend the time for performance of Parent's obligations
hereunder, or (iv) take any other action by the Company in connection with this
Agreement required to be taken by the Board of Directors. Notwithstanding
anything in this Agreement to the contrary, Parent agrees that, prior to the
Effective Time, the affirmative vote of a majority of the Independent Directors
shall be sufficient to cause the Company to enforce any of its rights or
remedies with respect to this Agreement.
II. THE MERGER
2.1 The Merger. At the Effective Time and subject to and upon the
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terms and conditions of this Agreement and the DGCL, Purchaser will be merged
with and into the Company, the separate corporate existence of Purchaser will
cease and the Company will continue as the surviving corporation. The Company as
the surviving corporation after the Merger hereinafter sometimes is referred to
as the "Surviving Corporation."
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2.2 Effective Time. On or as promptly as practicable after the
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Closing Date, the parties hereto shall cause the Merger to be consummated by
filing a Certificate of Merger with the Secretary of State of the State of
Delaware, in such form as required by, and executed in accordance with the
relevant provisions of, the DGCL (the time of such filing being the "Effective
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Time").
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2.3 Effect of the Merger; Closing. At the Effective Time, the effect
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of the Merger will be as provided in the applicable provisions of the DGCL.
Without limiting the generality of the foregoing, at the Effective Time all
property, rights, privileges, powers and franchises of the Company and Purchaser
will vest in the Surviving Corporation. The closing of the Merger (the
"Closing") shall take place at a time and on a date (the "Closing Date") to be
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specified by the parties, which will be no later than the third Business Day
after satisfaction or waiver of the latest to occur of the conditions precedent
set forth in Article VII, at the offices of Xxxxx, Day, Xxxxxx & Xxxxx, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, unless another time, date or location is
agreed to in writing by the parties. "Business Day" means any day other than
Saturday, Sunday or a federal holiday.
2.4 Subsequent Actions. If, at any time after the Effective Time, the
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Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of either of the Company or Purchaser acquired or to be
acquired by the Surviving Corporation as a result of, or in connection with, the
Merger or otherwise to carry out this Agreement, the officers and directors of
the Surviving Corporation will be authorized to execute and deliver, in the name
and on behalf of either the Company or Purchaser, all such deeds, bills of sale,
assignments and assurances and to take and do, in the name and on behalf of each
of such corporations or otherwise, all such other actions and things as may be
necessary or desirable to vest, perfect or confirm any and all right, title and
interest in, to and under such rights, properties or assets in the Surviving
Corporation or otherwise to carry out this Agreement.
2.5 Certificate of Incorporation; By-Laws; Directors and Officers.
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(a) At the Effective Time, the Certificate of Incorporation of Purchaser, as in
effect immediately before the Effective Time, will be the Certificate of
Incorporation of the Surviving Corporation (as the same may be amended from time
to time) until thereafter amended as provided by law and such Certificate of
Incorporation, except that Article FIRST of the Certificate of Incorporation of
the Surviving Corporation shall be amended to read in its entirety as follows:
"The name of the corporation is Xxxxxxxx Wine Estates Holdings, Inc."
(b) The By-Laws of Purchaser, as in effect immediately before the
Effective Time, will be the By-Laws of the Surviving Corporation until
thereafter amended as provided by law, the Certificate of Incorporation of the
Surviving Corporation and such By-Laws.
(c) The directors of Purchaser immediately before the Effective Time
will be the initial directors of the Surviving Corporation, and the officers of
the Company immediately before the Effective Time will be the initial officers
of the Surviving Corporation, in each case until their successors are elected or
appointed and qualified or until their earlier death, resignation or removal in
accordance
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with the Certificate of Incorporation and By-laws of the Surviving Corporation.
If, at the Effective Time, a vacancy shall exist on the board of directors of
the Surviving Corporation or in any office of the Surviving Corporation, such
vacancy may thereafter be filled in the manner provided by law.
2.6 Conversion of Securities. At the Effective Time, by virtue of the
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Merger and without any action on the part of Purchaser, the Company or the
holder of any of the following securities:
(a) Each Share issued and outstanding immediately before the
Effective Time (other than any Shares to be canceled pursuant to Section 2.6(b)
hereof and any Dissenting Shares) will be canceled and extinguished and be
converted into the right to receive the Per Share Amount in cash payable to the
holder thereof, without interest, upon surrender of the certificate formerly
representing such Share in the manner provided in Section 2.8 hereof. All such
Shares, when so converted, will no longer be outstanding and will automatically
be canceled and retired and will cease to exist, and each holder of a
certificate formerly representing any such Share will cease to have any rights
with respect thereto, except the right to receive the Per Share Amount therefor
upon the surrender of such certificate in accordance with Section 2.8 hereof.
(b) Each Share held in the treasury of the Company and each Share
owned by Parent or any direct or indirect wholly owned subsidiary of Parent
immediately before the Effective Time will be canceled and extinguished and no
payment or other consideration will be made with respect thereto.
(c) Each share of common stock, par value $0.01 per share, of
Purchaser issued and outstanding immediately before the Effective Time will
thereafter represent one validly issued, fully paid and nonassessable common
share, par value $0.01 per share, of the Surviving Corporation.
2.7 Dissenting Shares. (a) Notwithstanding any provision of this
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Agreement to the contrary, any Shares issued and outstanding immediately prior
to the Effective Time and held by a holder who has demanded and perfected his
demand for appraisal in accordance with the DGCL and as of the Effective Time
has neither effectively withdrawn nor lost his right to such appraisal
("Dissenting Shares") will not be converted into or represent a right to receive
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cash pursuant to Section 2.6 hereof, but the holder thereof will be entitled to
only such rights as are granted by the DGCL.
(b) Notwithstanding the provisions of Section 2.7(a) hereof, if any
dissenting Stockholder who demands appraisal of his Shares under the DGCL shall
effectively withdraw or lose (through failure to perfect or otherwise) his right
to appraisal then as of the Effective Time or the occurrence of such event,
whichever later occurs, such holder's Shares will automatically be converted
into and represent only the right to receive cash as provided in Section 2.6(a)
hereof, without interest thereon, upon surrender of the certificate or
certificates formerly representing such Shares.
(c) The Company shall give Parent (i) prompt notice of any written
demands for appraisal or payment of the fair value of any Shares, withdrawals of
such demands, and any other instruments served pursuant to the DGCL received by
the Company and (ii) the opportunity to direct all
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negotiations and proceedings with respect to demands for appraisal under the
DGCL. The Company shall not voluntarily make any payment with respect to any
demands for appraisal and shall not, except with the prior written consent of
Parent, settle or offer to settle any such demands.
2.8 Surrender of Shares; Stock Transfer Books. (a) Before the
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Effective Time, Parent shall designate a bank, trust company or stock transfer
agent to act as agent for the holders of Shares in connection with the Merger
(the "Exchange Agent") to receive the funds necessary to make the payments
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contemplated by Section 2.6 hereof. At or immediately prior to the Effective
Time, Parent shall make available to the Exchange Agent for the benefit of
holders of Shares the consideration to which such holders will be entitled at
the Effective Time pursuant to Section 2.6 hereof.
(b) Each holder of a certificate or certificates representing any
Shares canceled upon the Merger pursuant to Section 2.6(a) (the
"Certificate(s)") may thereafter surrender such Certificate or Certificates to
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the Exchange Agent, as agent for such holder, to effect the surrender of such
Certificate or Certificates on such holder's behalf for a period ending one year
after the Effective Time. Promptly after the Effective Time, Parent shall cause
the distribution to holders of record of Shares as of the Effective Time of
appropriate materials to facilitate such surrender. Upon the surrender of
Certificates for cancellation, together with such materials, Parent shall cause
the Exchange Agent to pay the holder of such Certificates in exchange therefor
cash in an amount equal to the Per Share Amount multiplied by the number of
Shares represented by such Certificate. Until so surrendered, each such
Certificate (other than Certificates representing Dissenting Shares and
Certificates representing Shares held by Parent or in the treasury of the
Company) will represent solely the right to receive the aggregate Per Share
Amount relating thereto.
(c) If payment of cash in respect of canceled Shares is to be made to
a Person other than the Person in whose name a surrendered Certificate or
instrument is registered, it will be a condition to such payment that the
Certificate or instrument so surrendered be properly endorsed or otherwise be in
proper form for transfer and that the Person requesting such payment shall have
paid any transfer and other taxes required by reason of such payment in a name
other than that of the registered holder of the Certificate or instrument
surrendered or shall have established to the satisfaction of Parent or the
Exchange Agent that such tax either has been paid or is not payable.
(d) At the Effective Time, the stock transfer books of the Company
will be closed and there will not be any further registration of transfers of
shares of capital stock thereafter on the records of the Company. If, after the
Effective Time, Certificates are presented to the Surviving Corporation, they
will be canceled and exchanged for cash as provided in Section 2.6(a). No
interest will accrue or be paid on any cash payable upon the surrender of a
Certificate or Certificates which immediately before the Effective Time
represented outstanding Shares.
(e) Promptly following the date which is one year after the Effective
Time, the Exchange Agent will deliver to Parent all cash, certificates and other
documents in its possession relating to the transactions contemplated hereby,
and the Exchange Agent's duties will terminate. Thereafter, each holder of a
Certificate (other than Certificates representing Dissenting Shares and
Certificates representing Shares held by Parent or in the treasury of the
Company) may surrender such
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Certificate to the Surviving Corporation and (subject to applicable abandoned
property, escheat and similar laws) receive in consideration thereof the
aggregate Per Share Amount relating thereto, without any interest or dividends
thereon.
(f) The Per Share Amount paid in the Merger will be net to the holder
of Shares in cash, subject to reduction only for any applicable federal back-up
withholding or, as set forth in Section 2.8(c) hereof, stock transfer taxes
payable by such holder.
(g) In the event any Certificate has 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 Per Share Amount
deliverable in respect thereof as determined in accordance with Section 2.6
hereof if the Person to whom the Per Share Amount is paid, as a condition
precedent to the payment thereof, gives the Surviving Corporation a bond in such
sum as the Surviving Corporation may direct or otherwise indemnifies 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.
2.9 Stock Options. (a) The Company shall take all actions necessary
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(which include, but are not limited to, satisfying the requirements of Rule 16b-
3(e) promulgated under Section 16 of the Exchange Act, without incurring any
liability in connection therewith) to provide that, upon consummation of the
Merger, each then-outstanding option to purchase Shares (the "Options") granted
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under any of the Company's stock option plans referred to in Section 4.2 hereof,
each as amended (collectively, the "Option Plans"), will be canceled by the
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Company in exchange for payment to the holders of such Options of an amount in
respect thereof equal to the product of (1) the excess, if any, of the Per Share
Amount over the per Share exercise price thereof and (2) the number of Shares
subject thereto (such payment to be net of applicable withholding taxes). Any
Options not canceled, exercised or converted prior to the Effective Time will,
by reason of the Merger, thereafter represent the right to receive, upon payment
of the exercise price therefor, an amount in cash, without interest, equal to
the Per Share Amount times the number of Shares subject thereto (such payment to
be net of applicable withholding taxes).
(b) The Company shall take all actions necessary to provide that on
and after the date of this Agreement, (i) no Shares shall be purchased under any
Option Plan that is an "employee stock purchase plan," as defined in Section
423(b) of the Internal Revenue Code of 1986, as amended, including all citations
thereto or to the Treasury Regulations promulgated thereunder and shall include
any amendment, substitute or successor provisions thereto (the "Code") from and
after the date of this Agreement and (ii) any amounts previously contributed by
employees (through payroll deduction or otherwise) for the purpose of purchasing
Shares under any such Option Plan (for which the Shares have not been purchased
as of the date of this Agreement) shall be returned to such employees prior to
the Effective Time.
(c) Except as provided herein or as otherwise agreed to by the
parties, (i) the Company shall cause the Option Plans to terminate as of the
Effective Time and (ii) the Company shall
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ensure that following the Effective Time no person, including any holder of
Options or any participant in the Option Plans, will have any right to acquire
any equity securities of the Company, the Surviving Corporation or any
subsidiary thereof.
(d) Prior to the Effective Time, the Company shall, if necessary (i)
obtain any consents from holders of Options and (ii) make any amendments to the
terms of the Option Plans that the Company deems necessary to give effect to the
actions contemplated by subsections (a), (b) and (c) of this Section 2.9.
Notwithstanding any other provision of this Section 2.9, payment may be withheld
in respect of any Option until the necessary consents are obtained.
III. REPRESENTATIONS AND WARRANTIES OF
PARENT AND PURCHASER
Parent and Purchaser represent and warrant to the Company as follows:
3.1 Corporate Organization. Each of Parent and Purchaser is a
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corporation duly organized and validly existing under the laws of its
jurisdiction of incorporation and has the corporate power and authority and any
necessary governmental authority to own, operate or lease the properties that it
purports to own, operate or lease and to carry on its business as it is now
being conducted. Purchaser is a corporation in good standing under the laws of
its jurisdiction of incorporation.
3.2 Authority Relative to this Agreement. The execution and delivery
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of this Agreement by Parent and Purchaser and the consummation by Parent and
Purchaser of the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of Parent and Purchaser and no other
corporate proceeding or approval by the shareholders of Parent is necessary for
the execution and delivery of this Agreement by Parent or Purchaser, the
performance by Parent or Purchaser of their respective obligations hereunder and
the consummation by Parent or Purchaser of the transactions contemplated hereby.
This Agreement has been duly executed and delivered by Parent and Purchaser and,
assuming due authorization, execution and delivery of this Agreement by the
Company, constitutes a legal, valid and binding obligation of each such
corporation, enforceable against each of them in accordance with its terms.
3.3 No Conflict; Required Filings and Consents. (a) The execution and
------------------------------------------
delivery of this Agreement by Parent and Purchaser do not, and the performance
of this Agreement by Parent and Purchaser will not, (i) conflict with or violate
any law, regulation, court order, judgment or decree applicable to Parent or
Purchaser or by which any of their property is bound or affected, (ii) violate
or conflict with the Certificate of Incorporation, By-Laws or similar
constituent documents of Parent or the Certificate of Incorporation or By-Laws
of Purchaser, or (iii) result in any breach of or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination or cancellation of, or result in the
creation of a liens, pledges, security interests, claims or other encumbrances
(collectively, "Liens") on any of the property or assets of Parent or Purchaser
-----
pursuant to, any contract, instrument, permit, license or franchise to which
Parent or Purchaser is a party or by which Parent or Purchaser or any of their
property is bound or affected;
10
except in the case of clauses (i) and (iii) for conflicts, violations, breaches
or defaults that individually and in the aggregate would not be reasonably
expected to prevent or materially impair or delay the consummation by Parent or
Purchaser of the transactions contemplated hereby (each a "Parent Material
---------------
Adverse Effect").
--------------
(b) Except for applicable requirements, if any, of the Exchange Act,
the Australian Stock Exchange Listing Rules, the rules promulgated by the
Australian Securities and Investments Commission and under Competition Laws,
filings and approvals required by federal and state alcoholic beverage
governmental authorities and filing and recordation of appropriate merger
documents as required by the DGCL, neither Parent nor Purchaser is required to
submit any notice, report or other filing with any governmental or regulatory
authority, domestic or foreign, including without limitation, any quasi-
governmental, supranational, statutory, environmental entity or any stock
exchange or court (each, a "Governmental Authority"), in connection with the
----------------------
execution, delivery or performance of this Agreement or the consummation of the
transactions contemplated hereby, the failure of which to submit would have a
Parent Material Adverse Effect. No waiver, consent, approval or authorization of
any governmental or regulatory authority, domestic or foreign, is required to be
obtained or made by either Parent or Purchaser in connection with its execution,
delivery or performance of this Agreement the failure of which to obtain or make
would have a Parent Material Adverse Effect. For the purposes of this Agreement,
"Competition Laws" means 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, and includes
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
---
Act"), and, to the extent applicable, equivalent laws of the European Union or
---
the member states thereof, Australia and any other country in which the Company,
its Subsidiaries, Parent or its Subsidiaries has operations or derives revenue.
3.4 Brokers. Except for UBS Warburg LLC, no broker, finder or
-------
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by and on behalf of Parent or Purchaser that is or
will be payable by the Company or any of its Subsidiaries.
3.5 Offer Documents; Proxy Statement. None of the information
--------------------------------
supplied by Parent, Purchaser, their respective officers, directors,
representatives, agents or employees (the "Parent Information"), for inclusion
------------------
in the Proxy Statement, or in any amendments thereof or supplements thereto,
will, on the date the Proxy Statement is first mailed to Stockholders or at the
time of the Company Stockholders' Meeting, contain any statement which, at such
time and in light of the circumstances under which it is made, will be false or
misleading with respect to any material fact, or will omit to state any material
fact necessary in order to make the statements therein not false or misleading
or necessary to correct any statement in any earlier communication with respect
to the solicitation of proxies for the Company Stockholders' Meeting which has
become false or misleading. Neither the Offer Documents nor any amendments
thereof or supplements thereto will, at any time the Offer Documents or any such
amendments or supplements are filed with the SEC or first published, sent or
given to the Stockholders, contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in light of the circumstances under
11
which they were made, not misleading. Notwithstanding the foregoing, Parent and
Purchaser do not make any representation or warranty with respect to any
information that has been supplied by the Company or its accountants, counsel or
other authorized representatives for use in any of the foregoing documents or
extracted from reports or other documents filed by the Company with the SEC. The
Offer Documents and any amendments or supplements thereto will comply as to form
in all material respects with the provisions of the Exchange Act and the rules
and regulations thereunder.
3.6 Ownership of Shares. Immediately prior to the execution of this
-------------------
Agreement and the Voting Agreement by Parent and Purchaser, neither Parent nor
any of its Affiliates or Subsidiaries, each as defined in the Exchange Act
(excluding for purposes hereof any outside director of Parent, provided that
such director does not hold in the aggregate more than 1% of the outstanding
Shares), (i) beneficially owns (as such term is defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly or (ii) is party to
any agreement, arrangement or understanding for the purposes of acquiring,
holding, voting or disposing of, in each case, shares of capital stock of the
Company.
IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth (subject to Section 9.5, including an
identification by section reference to the representations and warranties to
which such exceptions relate) on the Disclosure Schedule to this Agreement
initialed by Parent and the Company (the "Disclosure Schedule"), the Company
-------------------
hereby represents and warrants to Parent and Purchaser as follows:
4.1 Organization and Qualification; Subsidiaries. (a) The Company (i)
--------------------------------------------
is a corporation duly organized, validly existing and in good standing under the
laws of the state of Delaware and has the requisite corporate power and
authority and any necessary governmental authority to own, operate or lease the
properties that it purports to own, operate or lease and to carry on its
business as it is now being conducted, and (ii) is duly qualified as a foreign
corporation to do business, and is in good standing, in each other jurisdiction
where the character of its properties owned, operated or leased or the nature of
its activities makes such qualification necessary, except in the case of clause
(ii) for failures which, when taken together with all other such failures, would
not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
(b) Exhibit 21 to the Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 2000 lists each of the Company's Subsidiaries. Each
of the Company's Subsidiaries is a corporation, partnership or limited liability
company duly organized, validly existing and in good standing under the laws of
its jurisdiction of incorporation or organization, has the corporate,
partnership or similar powers and authority to own its properties and to carry
on its business as it is now being conducted, and is duly qualified to do
business and is in good standing in each jurisdiction in which the ownership of
its property or the conduct of its business requires such qualification, except
for jurisdictions in which such failure to be so qualified or to be in good
standing would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect. The Company owns, directly or
indirectly, all of the outstanding shares of capital stock (or other ownership
interests
12
having by their terms ordinary voting power to elect a majority of directors or
others performing similar functions with respect to such Subsidiaries) of each
of the Company's Subsidiaries, free and clear of all Liens. Each of the
outstanding shares of capital stock (or such other ownership interests) of each
of the Company's Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable. For the purposes of this Agreement, (i) the term "Subsidiary"
----------
means any corporation or other legal entity of which the Company (either alone
or through or together with any other Subsidiary) owns, directly or indirectly,
more than 50% of the stock or other equity interests the holders of which are
generally entitled to vote for the election of the board of directors or other
governing body of such corporation or other legal entity, and (ii) the term
"Company Material Adverse Effect" means any change, effect, event or condition
-------------------------------
that has been or would be materially adverse to the business, assets, properties
(including intangible properties), condition (financial or otherwise), results
of operations or liabilities of the Company and its Subsidiaries, taken as a
whole; provided that any adverse effect or change after the date hereof to the
extent it results from conditions generally affecting the wine industry or grape
growing areas in the United States shall not constitute a Company Material
Adverse Effect. The Company has previously delivered to Parent a complete and
correct copy of the Company's and each of its Subsidiaries' Certificate of
Incorporation and By-Laws, as currently in effect.
4.2 Capitalization. (a) The authorized capital stock of the Company
--------------
consists of 42,000,000 common shares, divided into 2,000,000 shares of Class A
common stock, $0.01 par value ("Class A"), 38,000,000 shares of Class B common
-------
stock, $0.01 par value ("Class B" and collectively with Class A, the "Company
-------
Common Stock") and 2,000,000 shares of preferred stock, $0.01 par value. As of
------------
the close of business on the date one Business Day prior to the date hereof, (i)
1,337,962 shares of Class A and 18,439,214 shares of Class B were issued and
outstanding, all of which were duly authorized, validly issued, fully paid and
nonassessable, (ii) no shares of preferred stock were issued and outstanding,
(iii) no shares of Company Common Stock were held in the treasury of the
Company, and (iv) 299,222 shares of Company Common Stock were reserved for
issuance under the Option Plans listed on Section 4.2(a) of the Disclosure
Schedule in the amounts stated in such schedule. Except as otherwise required by
law, each of the issued and outstanding Class A Shares is entitled to 20 votes
and each of the issued and outstanding Class B Shares is entitled to one vote on
all matters submitted to Stockholders, whether by vote at a meeting or for
action by written consent. Section 4.2 of the Disclosure Schedule lists the
total number of outstanding options to purchase Shares and the weighted average
exercise price thereof. Except as set forth above, there are no existing (i)
options, warrants, calls, preemptive rights, subscriptions or other rights,
convertible securities, agreements or commitments of any character obligating
the Company or any of its Subsidiaries to issue, transfer or sell any shares of
capital stock or other equity interest in, the Company or any of its
Subsidiaries or securities convertible into or exchangeable for such shares or
equity interests, (ii) contractual obligations of the Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any capital stock of the
Company or any Subsidiary of the Company, or (iii) voting trusts or similar
agreements to which the Company or any of its Subsidiaries is a party with
respect to the voting of the capital stock of the Company or any of its
Subsidiaries.
(b) Neither the Company nor any of its Subsidiaries owns any shares
of capital stock or other securities of, or interest in, any other Person other
than Subsidiaries of the Company, or is obligated to make any capital
contribution to or other investment in any other Person.
13
4.3 Authority Relative to this Agreement. The Company has the
------------------------------------
necessary corporate power and authority to enter into this Agreement and to
approve the Voting Agreement and, subject to obtaining any necessary Stockholder
approval of the Merger, to carry out its obligations under this Agreement. The
execution and delivery of this Agreement by the Company and the consummation by
the Company of the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of the Company, subject, in the case
of this Agreement, to any required approval of the Merger by the Stockholders in
accordance with the DGCL. This Agreement has been duly executed and delivered by
the Company and, assuming the due authorization, execution and delivery of this
Agreement by Parent and Purchaser, constitutes a legal, valid and binding
obligation of the Company, enforceable against it in accordance with its terms.
4.4 No Conflict; Required Filings and Consents. (a) The execution and
------------------------------------------
delivery of this Agreement by the Company and execution and delivery of the
Voting Agreement by the parties signatory thereto do not, and the performance of
this Agreement by the Company and the performance of the Voting Agreement by the
parties signatory thereto will not, (i) conflict with or violate any domestic or
foreign statute, rule, law, regulation or other legal requirement ("Law"), or
---
any order, judgment or decree ("Order") applicable to the Company or by which
-----
its property is bound or affected, (ii) violate or conflict with the Certificate
of Incorporation or By-Laws of the Company, or (iii) (A) result in any breach of
or constitute a default (or an event which with notice or lapse of time of both
would become a default) under, (B) give to others any rights of termination or
cancellation of, (C) result in an acceleration or other change of any right or
obligation or the loss of any benefit which the Company or any of its
Subsidiaries is entitled under, or (D) result in the creation of a Lien on any
of the properties or assets of the Company, in each case, pursuant to, any
contract, instrument, permit, license or franchise to which the Company is a
party or by which the Company or its property is bound or affected, except in
the case of clauses (i) and (iii) for conflicts, violations, breaches or
defaults which, individually or in the aggregate, would not reasonably be
expected to have a Company Material Adverse Effect.
(b) Except as set forth in Section 4.4 of the Disclosure Schedule and
for applicable requirements, if any, of the Exchange Act, under Competition Laws
and filing and recordation of appropriate merger or other documents as required
by the DGCL, "takeover" or "blue sky" laws of various states, the Company is not
required to submit any notice, report or other filing with any Governmental
Authority, in connection with the execution, delivery or performance of this
Agreement or the Voting Agreement or the consummation of the transactions
contemplated hereby and thereby the failure of which to submit would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. No waiver, consent, approval or authorization of any
Governmental Authority is required to be obtained or made by the Company in
connection with its execution, delivery or performance of this Agreement the
failure of which to obtain or make would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.
4.5 SEC Filings; Financial Statements. (a) The Company has
---------------------------------
filed all forms, reports and documents required to be filed with the SEC since
November 30, 1997, and has heretofore delivered or made available to Parent, in
the form filed with the SEC, its (i) Annual Reports on Form 10-K for the fiscal
years ended June 30, 1999 and 2000, (ii) Quarterly Reports on Form
14
10-Q for the quarters ended September 30, 1999, December 31, 1999 and Xxxxx 00,
0000, (xxx) all proxy statements relating to the Company's meetings of
Stockholders (whether annual or special) held since January 1, 1999 and (iv) all
other forms, reports or registration statements filed by the Company with the
SEC pursuant to the Exchange Act since June 30, 1999 (collectively, whether
filed before, on or after the date hereof, the "SEC Reports"). The SEC Reports
-----------
(i) were prepared in all material respects in accordance with the requirements
of the Exchange Act and the Securities Act of 1933, as amended (the "Securities
----------
Act"), as the case may be, and the applicable rules and regulations of the SEC
---
thereunder and (ii) did not at the time they were filed 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 the
light of the circumstances under which they were made, not misleading.
(b) The consolidated financial statements contained in the SEC
Reports were prepared in accordance with United States generally accepted
accounting principles ("US GAAP") applied on a consistent basis throughout the
-------
periods involved (except as may be indicated in the notes thereto) and fairly
presented the consolidated financial position of the Company and its
Subsidiaries as at the respective dates thereof and the consolidated results of
operations and changes in financial position of the Company and its Subsidiaries
for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal year-end adjustments which are not
material in nature or amount.
(c) Neither the Company nor any of its Subsidiaries has any
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise) that would be required to be reflected on, or reserved against in,
a consolidated balance sheet of the Company or described or referred to in the
notes thereto, prepared in accordance with generally accepted accounting
principles consistently applied, except for (i) liabilities or obligations that
were so reserved on, or reflected in (including the notes to), the consolidated
balance sheet of the Company as of June 30, 2000 (the "2000 Balance Sheet"),
------------------
(ii) liabilities or obligations arising in the ordinary course of business
(including trade indebtedness) since June 30, 2000, (iii) liabilities or
obligations to Xxxxxxx Xxxxx & Co. or TPG GenPar, L.P. pursuant to the financial
arrangements described in the last sentence of Section 4.10 and for fees,
expenses and costs of counsel incurred by the Company in connection with the
transactions contemplated by this Agreement, and (iv) liabilities or obligations
which would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect.
(d) No payment defaults by the Company or any of its Subsidiaries
have occurred and are continuing under any agreements or instruments governing
any indebtedness required to be listed on the Disclosure Schedule pursuant to
Section 4.15(a)(iv).
4.6 Absence of Certain Changes or Events. Since June 30, 1999, except
------------------------------------
as contemplated by this Agreement or as set forth in the SEC Reports filed prior
to the date of this Agreement, (i) the Company and its Subsidiaries have
conducted their respective operations only in the ordinary course consistent
with past practices; (ii) there has not been:
(a) any change which would, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect;
15
(b) any strike, picketing, work slowdown or other labor disturbance
which would, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect;
(c) any damage, destruction or loss (whether or not covered by
insurance) with respect to any of the assets of the Company which would,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect;
(d) any redemption or other acquisition of Shares by the Company or
any declaration or payment of any dividend or other distribution in cash, stock
or property with respect to Shares, except for purchases heretofore made
pursuant to the terms of the Company's employee benefit plans before the date
hereof; and
(e) any change by the Company in accounting principles except insofar
as may have been required by a change in generally accepted accounting
principles and disclosed in the SEC Reports; and
(iii) since June 30, 2000, the Company and its Subsidiaries have not taken
any action that if taken after the date of this Agreement would constitute a
violation of Section 5.1.
4.7 Litigation. Except as disclosed in the SEC Reports filed prior to
----------
the date of this Agreement, there are no claims, actions, suits, proceedings or
investigations of any nature pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries, or any properties or
rights of the Company or any of its Subsidiaries, before any Governmental
Authority which are reasonably likely to have a Company Material Adverse Effect.
Neither the Company nor any of its Subsidiaries is subject to any Order which
has had or would, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect.
4.8 Employee Benefit Plans. (a) Section 4.8(a) of the Disclosure
----------------------
Schedule sets forth a list of all employee welfare benefit plans (as defined in
Section 3(l) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), employee pension benefit plans (as defined in Section 3(2) of ERISA)
-----
and all other bonus, stock option, stock purchase, benefit, profit sharing,
savings, retirement, disability, insurance, incentive, deferred compensation and
other similar fringe or employee benefit plans, programs or arrangements for the
benefit of, or relating to, any employee, former employee, officer or director
of, or independent contractor or consultant to, the Company or any of its
Subsidiaries (together, the "Employee Plans") and any employment or other
--------------
agreement or arrangement providing for severance or termination payments of any
nature ("Severance Arrangements"). The Company has made available to Parent true
----------------------
and complete copies of all Employee Plans and Severance Arrangements, as in
effect, together with all amendments thereto which will become effective at a
later date, as well as the latest Internal Revenue Service ("IRS") determination
---
letters obtained with respect to any Employee Plan intended to be qualified
under Sections 401(a) or 501(a) of the Code. True and complete copies of the (i)
most recent annual actuarial valuation report, if any, (ii) last filed Form 5500
together with all Schedules thereto, if any, (iii) summary plan description (as
defined in ERISA), if any, and all modifications thereto communicated to
employees, (iv) most recent annual and periodic accounting of related plan
assets, if any, and (v) such other materials with
16
respect to the Employee Plans and Severance Arrangements reasonably requested by
Parent in each case, relating to the Employee Plans or Severance Arrangements,
have been delivered to Parent and are correct in all material respects.
(b) Except to the extent that any of the following, either alone or
in the aggregate, would not reasonably be expected to have a Company Material
Adverse Effect (other than clauses (viii), (ix), (x), (xi), (xii), (xiii), (xv)
or (xvi)): (i) neither the Company or any of its Subsidiaries, nor any of their
directors, officers, employees or agents, has, with respect to any Employee
Plan, engaged in or been a party to any "prohibited transaction," as such term
is defined in Section 4975 of the Code or Section 406 of ERISA, which could
result in the imposition of either a penalty assessed pursuant to Section 502(i)
of ERISA or a tax imposed by Section 4975 of the Code, in each case applicable
to the Company, its Subsidiaries or any Employee Plan; (ii) all Employee Plans
and Severance Arrangements are and have been at all times in compliance in all
respects with the current or then applicable requirements prescribed by all
statutes, orders, or governmental rules or regulations currently or then in
effect with respect to such Employee Plans and Severance Arrangements,
including, but not limited to, ERISA and the Code (except for such requirements
that are not required to be adopted as of the effective date of the applicable
requirement), there are no pending or, to the knowledge of the Company,
threatened claims, lawsuits or arbitrations (other than routine claims for
benefits), relating to any of the Employee Plans or Severance Arrangements,
which have been asserted or instituted against the Company or any of its
Subsidiaries, any Employee Plan or the assets of any trust for any Employee
Plan, nor, to the knowledge of the Company, is there any basis for one; (iii)
each Employee Plan intended to be qualified under Section 401(a) of the Code is
and has been at all times so qualified, and has heretofore been determined by
the IRS to be so qualified, and each trust created thereunder is and has been at
all times exempt from taxation under Section 501(a) of the Code; (iv) neither
the Company nor any trade or business which, together with the Company, is
treated as a single employer under Section 414(t) of the Code (an "ERISA
-----
Affiliate") has, or at any time has had, an obligation to contribute to a
---------
"defined benefit plan" as defined in Section 3(35) of ERISA, a pension plan
subject to the funding standards of Section 302 of ERISA or Section 412 of the
Code, a "multiemployer plan" within the meaning of Sections 3(37) or 4001(a)(13)
of ERISA or Section 414(f) of the Code or a "multiple employer plan" within the
meaning of Section 210(a) of ERISA or Section 413(c) of the Code, except for the
California Growers Foundation health and pension plans in which certain of the
Company's agricultural workers participate; (v) with respect to each group
health plan benefitting any current or former employee of the Company, or any
ERISA Affiliate, that is subject to Section 4980B of the Code, the Company and
its ERISA Affiliates have at all times complied with (A) the continuation
coverage requirements of Section 4980B of the Code and Part 6 of Subtitle B of
Title I of ERISA and (B) the Health Insurance Portability and Accountability Act
of 1996; (vi) all (A) insurance premiums required to be paid with respect to,
(B) benefits, expenses, and other amounts due and payable under, and (C)
contributions, transfers or payments to, all Employee Plans, Severance
Arrangements and workers' compensation arrangements required to be made prior to
the Effective Time will have been paid, made or accrued on or before the
Effective Time; (vii) with respect to any insurance policy providing funding for
benefits under any Employee Plan or Severance Arrangement, (A) there is no
liability of the Company or any of its Subsidiaries in the nature of a
retroactive rate adjustment, loss sharing arrangement, or other actual or
contingent liability, nor would there be any such liability if such insurance
policy was terminated on the date hereof, and (B) no insurance company issuing
any such
17
policy is in receivership, conservatorship, liquidation or other similar
proceeding and, to the knowledge of the Company, no such proceedings with
respect to any insurer are imminent; (viii) except for the Company's life
insurance and long term disability insurance plans, no Employee Plan or
Severance Arrangement provides benefits, including, without limitation, death or
medical benefits, beyond termination of service or retirement other than (A)
coverage mandated by law, (B) death or retirement benefits under any qualified
Employee Plan, or (C) deferred compensation benefits reflected on the books of
the Company; (ix) except for certain grant agreements under the Company's 1996
Stock Option Plan which provide for vesting upon a change in control, the
execution and performance of this Agreement will not (A) constitute an event
under any Employee Plan, Severance Arrangement or otherwise that will result in
any payment (including severance, unemployment compensation, parachute payment,
bonus or otherwise) becoming due from the Company or any of its Subsidiaries to
any employee, former employee, officer or director of (or any of their
dependents), or independent contractor or consultant to, the Company or any of
its Subsidiaries, or (B) accelerate the time of payment or vesting, or increase
the amount of compensation due to any employee, officer or director of, or
independent contractor or consultant to, the Company or any of its Subsidiaries;
(x) any amount that could be received (whether in cash or property or the
vesting of property) as a result of any of the transactions contemplated by this
Agreement by any employee, former employee, officer, director or independent
contractor of the Company or any of its affiliates who is a "disqualified
individual" (as such term is defined in proposed Treasury Regulations Section
1.280G-1) under any Employee Plan or Severance Arrangement, or any other
employment agreement, severance or termination agreement or compensation
arrangement currently in effect would not be characterized as an "excess
parachute payment" (as such term is defined in Section 280G(b)(1) of the Code);
(xi) the disallowance of a deduction under Section 162(m) of the Code for
employee remuneration will not apply to any amount paid or payable by the
Company or any affiliate of the Company under any contract, Employee Plan,
Severance Arrangement, or other program, arrangement or understanding currently
in effect; (xii) neither the Company nor any ERISA Affiliate has any current or
future liability with respect to any "employee benefit plans" (within the
meaning of Section 3(3) of ERISA), other than the Employee Plans, previously
maintained or contributed to by the Company, any ERISA Affiliate or any
predecessor to either thereof, or to which the Company, any ERISA Affiliate or
any such predecessor previously had an obligation to contribute; (xiii) except
for one individual who is leased from Nestle S.A., no "leased employees," as
defined in Section 414(n) of the Code, perform services for the Company or any
of its ERISA Affiliates; (xiv) no Employee Plan or Severance Arrangement is or
has been at any time funded through a "welfare benefit fund," as defined in
Section 419(e) of the Code, and no benefits under any Employee Plan or Severance
Arrangement are or have been at any time provided through a voluntary employees'
beneficiary association (within the meaning of Section 501(c)(9) of the Code) or
a supplemental unemployment benefit plan (within the meaning of Section
501(c)(17) of the Code); (xv) the Company has reserved all rights necessary to
amend or terminate each of the Employee Plans and Severance Arrangements without
the consent of any other person, except that the Rabbi trust funding the
Company's Executive Savings Plan requires approval of more than 50% of the
participants and beneficiaries who have amounts credited to their accounts to
terminate the trust prior to the date all benefit payments under the plan have
been made; (xvi) the books of the Company contain adequate accruals for (A)
bonuses, sales commissions and vacation pay earned but not received as of the
date of this Agreement and (B) incurred or continuing but unpaid claims under
Employee Plans and Severance Arrangements not funded by insurance; (xvii) except
for one stock option grant made to an
18
independent contractor under the Company's 1996 Stock Option Plan for 4,000
Class B Shares, or the Company's compensation program for non-employee
Directors, no Employee Plan provides benefits to any individual who is not a
current or former employee of the Company or any of its Subsidiaries, or the
dependents or beneficiaries of any such current or former employee; and (xviii)
no other trade or business, other than any current affiliate of the Company, has
been at any time within the past six years treated, together with the Company,
as a single employer under Section 414 of the Code or Section 4001 of ERISA.
4.9 Offer Documents; Proxy Statement. The proxy statement to be sent
--------------------------------
to the Stockholders in connection with the meeting of the Stockholders to
consider the Merger (the "Company Stockholders' Meeting") or the information
-----------------------------
statement to be sent to such Stockholders, as appropriate (such proxy statement
or information statement, as amended or supplemented, is herein referred to as
the "Proxy Statement"), at the date mailed to the Stockholders and at the time
---------------
of the Company Stockholders Meeting (i) will comply in all material respects
with the applicable requirements of the Exchange Act and the rules and
regulations thereunder and (ii) 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 were made, not misleading. The Schedule 14D-9
will comply in all material respects with the Exchange Act and the rules and
regulations thereunder. Neither the Schedule 14D-9 nor any of the information
relating to the Company or its affiliates provided by or on behalf of the
Company specifically for inclusion in the Schedule TO or the Offer Documents
will, at the respective times the Schedule 14D-9, the Schedule TO and the Offer
Documents or any amendments or supplements thereto are filed with the SEC and
are first published, sent or given to Stockholders, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in light of
the circumstances under which they were made, not misleading. No representation
or warranty is made by the Company with respect to any information supplied by
Parent or Purchaser specifically for inclusion in the Proxy Statement or the
Schedule 14D-9.
4.10 Brokers. Except for Xxxxxxx, Xxxxx & Co. and TPG GenPar, L.P., no
-------
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by and on behalf of the Company. The
Company has heretofore furnished to Parent true and complete information
concerning the financial arrangements between the Company and Xxxxxxx, Sachs &
Co. and the Company and TPG GenPar, L.P. pursuant to which such firms would be
entitled.
4.11 Control Share Acquisition. Assuming that Parent and Purchaser are
-------------------------
not an "interested stockholders" under Section 203 of the DGCL, the Board of
Directors has taken all action necessary to render Section 203 of the DGCL
inapplicable to the Offer, the Merger, this Agreement, the Voting Agreement and
all of the transactions contemplated hereby or thereby. No other "fair price,"
"merger moratorium," "control share acquisition" or other anti-takeover statute
or similar statute or regulation applies or purports to apply to the Offer, the
Merger, this Agreement, the Voting Agreement or any of the other transactions
contemplated hereby or thereby to any payment as a result of the transactions
contemplated hereunder.
19
4.12 Conflict with Laws. (a) Except as disclosed in the SEC Reports
------------------
filed prior to the date of this Agreement, the business of the Company and its
Subsidiaries is not being conducted in default or violation of any term,
condition or provision of (i) their respective Certificate of Incorporation, By-
Laws or similar constituent documents, or (ii) any note, bond, mortgage,
indenture, contract, agreement, lease or other instrument or agreement of any
kind to which the Company or any of its Subsidiaries is a party or by which the
Company, its Subsidiaries or any of their properties or assets may be bound, or
(iii) any Law or Order or any concession, grant, franchise, permit or license or
other governmental authorization or approval applicable to the Company or its
Subsidiaries, except, with respect to the foregoing clauses (ii) and (iii),
defaults or violations that would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect. Neither the
Company nor any of its Subsidiaries has received any notice, or has knowledge of
any claim, alleging any such violation, except for such violations that would
not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
(b) The Company and its Subsidiaries hold all licenses, permits,
variances, consents, authorizations, waivers, grants, franchises, concessions,
exemptions, orders, registrations and approvals of any governmental authority,
domestic or foreign, or other Persons necessary for the ownership, leasing,
operation, occupancy and use of their respective property and assets and the
conduct of their respective businesses as currently conducted ("Permits"),
except where the failure to hold such Permits would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
Neither the Company nor any of its Subsidiaries has received notice that any
Permit will be terminated or modified or cannot be renewed in the ordinary
course of business, and the Company has no knowledge of any reasonable basis for
any such termination, modification or nonrenewal, except for such terminations,
modifications or nonrenewals as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby do not and will not violate any Permit, or
result in any termination, modification or nonrenewals thereof, except for such
violations, terminations, modifications or nonrenewals thereof as, would not
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
4.13 Taxes. (a) Except as would not, either individually or in the
-----
aggregate, have a Company Material Adverse Effect, (i) the Company has duly and
timely filed with the appropriate governmental authorities all Tax Returns
required to be filed by or with respect to the Company and its Subsidiaries on
or before the Closing Date, (ii) all such Tax Returns were accurate, correct and
complete when and as filed, (iii) all Taxes shown to be due on such Tax Returns,
all Taxes required to be paid on an estimated or installment basis, and all
Taxes required to be withheld with respect to the Company have been timely paid
or, if applicable, withheld and paid to the appropriate taxing authority in the
manner provided by law, (iv) the reserve for Taxes set forth on the consolidated
balance sheet of the Company and its Subsidiaries as of June 30, 2000 is
adequate for the payment of all Taxes through the date thereof, (v) Section
4.13(a)(v) of the Disclosure Schedule lists all Tax Returns required to be filed
by or with respect to the Company within forty five (45) days after the Closing
Date, (vi) except as set forth in Section 4.13(a)(vi) of the Disclosure
Schedule, no federal, state, local or foreign audits, administrative proceedings
or court proceedings are pending with regard to any Taxes or Tax Returns
20
of the Company and there are no outstanding deficiencies or assessments asserted
or proposed, and (vii) there are no outstanding agreements, consents or waivers
extending the statutory period of limitations applicable to the assessment of
any Taxes or deficiencies against the Company, and the Company is not a party to
any agreement providing for the allocation or sharing of Taxes.
(b) All material elections with respect to Taxes affecting the
Company as of the date hereof are set forth in Section 4.13(b) of the Disclosure
Schedule. After the date hereof, no election with respect to Taxes will be made
without the prior written consent of Parent.
(c) The Company has not filed a consent to the application of Section
341(f) of the Code.
(d) No Shares held by Stockholders who are "foreign persons" within
the meaning of Treasury Regulation Section 1.897-9T(c) constitute "United States
real property interests" (within the meaning of Section 897(c)(1) of the Code)
by virtue of the exception for stock regularly traded on established securities
markets described in Section 897(c)(3) of the Code.
(e) No indebtedness of the Company is "corporate acquisition
indebtedness" within the meaning of Section 279(b) of the Code.
(f) The Company has not been a member of an affiliated group filing
consolidated or combined Tax Returns other than a federal income tax group the
common parent of which is the Company.
(g) Other than as set forth in the Disclosure Schedule, the Company
is not a party to any joint venture, partnership or other arrangement or
contract (excluding grape growing contracts) which could be treated as a
partnership for federal income tax purposes.
(h) Section 4.13(h) of the Disclosure Schedule contains a true and
complete list of all states where the Company files income or franchise Tax
Returns, and indicates whether any such Tax Returns are made on a consolidated,
combined or unitary basis.
(i) For purposes of this Agreement, the term "Taxes" means all taxes,
charges, fees, levies or other assessments imposed by any United States Federal,
state, or local taxing authority or by any non-U.S. taxing authority, including
but not limited to, income, gross receipts, excise, property, sales, use,
transfer, payroll, license, ad valorem, value added, withholding, social
security, national insurance (or other similar contributions or payments),
franchise, estimated, severance, stamp, and other taxes (including any interest,
fines, penalties or additions attributable to or imposed on or with respect to
any such taxes, charges, fees, levies or other assessments).
(j) For purposes of this Agreement, the term "Tax Return" means any
return, report, information return or other document (including any related or
supporting information and, where applicable, profit and loss accounts and
balance sheets), and any claims for refunds of Taxes, including any amendments
or supplements to any of the foregoing with respect to Taxes.
21
4.14 Intellectual Property. (a) Section 4.14(a) of the Disclosure
---------------------
Schedule contains a true and complete list of all (i) trademark and service xxxx
registrations and applications, (ii) copyright registrations and applications,
(iii) Internet domain names, and (iv) all material licenses related to the
foregoing, in each case used or held for use in connection with the business of
the Company. The Company does not own any patents and has no pending patent
applications.
(b) The Company owns or has the valid right to use all intellectual
property used by it in connection with its business, including the businesses of
its Subsidiaries, including (i) trademarks and service marks (registered or
unregistered) and trade names, and all goodwill associated therewith, (ii)
patents, patentable inventions, discoveries, improvements, ideas, know-how,
processes and computer programs, software and databases (including source code),
(iii) trade secrets and the right to limit the use or disclosure thereof, (iv)
copyrights in all works, including software programs and mask works, (v) domain
names, and (vi) Computer Software (collectively "Intellectual Property"), except
---------------------
where the failure to own or have the valid right to use the Intellectual
Property would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect.
(c) The Company has obtained the required Universal Resource Locater
("URL") under the domain name for each of the websites owned, created or
---
maintained by the Company or any of its Subsidiaries, and, to the knowledge of
the Company, such URLs and domain names have not been contested.
(d) For the purposes of this Agreement, the term "Computer Software"
-----------------
means (i) any and all computer programs and applications consisting of sets of
statements and instructions to be used directly or indirectly in computer
software or firmware whether in source code or object code form, (ii) databases
and compilations, including, without limitation, any and all data and
collections of data, whether machine readable or otherwise, (iii) all versions
of the foregoing including, without limitation, all screen displays and designs
thereof, and all component modules of source code or object code or natural
language code therefor, and whether recorded on papers, magnetic media or other
electronic or non-electronic device, (iv) all descriptions, flowcharts and other
work product used to design, plan, organize and develop any of the foregoing,
and (v) all documentation, including, without limitation, all technical and user
manuals and training materials, relating to the foregoing.
(e) All grants, registrations and applications for Intellectual
Property that are used in and are material to the conduct of the businesses of
the Company and its Subsidiaries as currently conducted (i) are valid,
subsisting, in proper form and have been duly maintained, including the
submission of all necessary filings and fees in accordance with the legal and
administrative requirements of the appropriate jurisdictions, and (ii) have not
lapsed, expired or been abandoned.
(f) To the knowledge of the Company (i) there are no conflicts with
or infringements of any Intellectual Property by any third party, except for
conflicts or infringements which would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect, and (ii) the
conduct of the businesses of the Company and its Subsidiaries as currently
conducted does not conflict with or infringe any proprietary right of any third
party, which conflict or infringement would, individually or in the aggregate,
reasonably be expected to have a Company
22
Material Adverse Effect. There is no claim, suit, action or proceeding pending
or, to the Company's knowledge, threatened against the Company or any of its
Subsidiaries (i) alleging any such conflict or infringement with any third
party's proprietary rights, or (ii) challenging the ownership, use, validity or
enforceability of the Intellectual Property, except for claims, suits, actions
or proceedings which would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.
(g) All consents, filings and authorizations by or with third
parties necessary with respect to the consummation of the transactions
contemplated hereby as they may affect the Intellectual Property have been
obtained, except where the failure to have obtained such consents, filings or
authorizations would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.
(h) Neither the Company nor its Subsidiaries is, nor will the Company
be as a result of its execution and delivery of this Agreement or the
performance of its obligations under this Agreement, in breach of any license,
sublicense or other agreement relating to the Intellectual Property, except for
breaches which would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.
(i) No former or present employees, officers or directors of the
Company or its Subsidiaries hold any right, title or interest directly or
indirectly, in whole or in part, in or to any Intellectual Property except for
any right, title or interest which would not, individually or in the aggregate,
have a Company Material Adverse Effect.
4.15 Contracts. (a) Other than the contracts or agreements of the
---------
Company included as exhibits to the Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 2000, the Company's Quarterly Reports on Form 10-Q
for the fiscal quarters ended September 30, 1999, December 31, 1999 and March
31, 2000, or any periodic filing made pursuant to the Exchange Act since June
30, 2000 (the "Material Contracts"), and contracts or agreements between the
------------------
Company and its wholly owned Subsidiaries or between wholly owned Subsidiaries
of the Company, Section 4.15 of the Disclosure Schedule sets forth each of the
following contracts and agreements to which the Company or any of its
Subsidiaries is a party or by which any of them is bound (contracts and
agreements of the types described below being "Identified Contracts"), in each
--------------------
case as such Identified Contract is in effect on the date hereof:
(i) contracts and agreements for the purchase of inventories,
goods or other materials by, or for the furnishing of services to, the Company
or any of its Subsidiaries that (A) require payments by the Company or any of
its Subsidiaries in excess of $2,000,000, and (B) have a term of one year or
more and are not terminable by the Company or Subsidiary party thereto, as the
case may be, on notice of six months or less without penalty;
(ii) contracts and agreements for the sale of inventories,
goods or other materials, or for the furnishing of services, by the Company or
any of its Subsidiaries that (A) require payments to the Company or any of its
Subsidiaries in excess of $2,000,000, and (B) have a term of
23
one year or more and are not terminable by the Company or Subsidiary party
thereto, as the case may be, on notice of six months or less without penalty;
(iii) manufacturer's representative, sales agency and
distribution contracts and agreements that (A) have a term of one year or more
and are not terminable by the Company or Subsidiary party thereto, as the case
may be, on notice of six months or less without penalty, and (B) are material to
the Company and its Subsidiaries taken as a whole;
(iv) contracts and agreements (A) governing the terms of
indebtedness, or guarantees of indebtedness, of, or secured by assets of, the
Company or any of its Subsidiaries in excess of $2,000,000 principal amount in
the aggregate, (B) governing the terms of "synthetic" or capital leases pursuant
to which the Company or any of its Subsidiaries has financial obligations in
excess of $2,000,000, or (C) providing for all obligations of the Company and
its Subsidiaries in respect of interest rate swap or similar agreements,
commodity swaps or options or similar agreements or foreign currency hedge,
exchange or similar agreements or any other derivative instrument;
(v) stockholder, voting trust or similar contracts and
agreements relating to the voting of shares or other equity or debt interests of
the Company or any of its Subsidiaries;
(vi) contracts and agreements entered into since January 1,
1997, providing for the acquisition or disposition of vineyard properties having
a value in excess of $1,000,000;
(vii) all of the leases, subleases, licenses and other
agreements relating to or constituting real property, each with a term of one
year or more and an annual payment obligation in excess of $1,000,000;
(viii) joint venture agreements, partnership agreements and
other similar contracts and agreements involving a sharing of profits and
expenses, in each case, material to the Company and its Subsidiaries taken as a
whole;
(ix) contracts and agreements governing the terms of
indebtedness of third parties owed to the Company or any of its Subsidiaries in
excess of $1,000,000 in principal amount;
(x) contracts and agreements prohibiting or materially
restricting the ability of the Company or any of its Subsidiaries to conduct its
business, to engage in any business or operate in any geographical area or to
compete with any Person, other than (A) distribution (including independent
sales representative) contracts and agreements that have a term of less than one
year or are terminable by the Company or any Subsidiary of the Company party
thereto, as the case may be, on notice of six months or less without penalty,
and, in each case, which are not material to the Company and its Subsidiaries
taken as a whole and (B) supplier and customer agreements relating to non-
disclosure of confidential information of the other party which are not material
to the Company and its Subsidiaries taken as a whole;
24
(xi) contracts and agreements providing for future payments
that are conditioned, in whole or in part, on a change in control of the Company
or any of its Subsidiaries; and
(xii) any other contracts and agreements that were entered
into other than in the ordinary course of business of the Company or its
Subsidiaries and that are material to the Company and its Subsidiaries taken as
a whole.
(b) Each contract or agreement to which the Company or any of its
Subsidiaries is a party or by which any of them is bound is in full force and
effect, and neither the Company nor any of its Subsidiaries, nor, to the
knowledge of the Company, any other Person, is in breach of, or default under,
any such contract or agreement, and no event has occurred that with notice or
passage of time or both would constitute such a breach or default thereunder by
the Company or any of its Subsidiaries, or, to the knowledge of the Company, any
other Person, except for such failures to be in full force and effect and such
breaches and defaults as would not, individually and in the aggregate,
reasonably be expected to have or result in a Company Material Adverse Effect.
4.16 Environmental Matters. (a) Except as disclosed in the SEC
---------------------
Reports filed prior to the date of this Agreement and except for those
noncompliance matters that have been and are resolved, the Company and its
Subsidiaries are in compliance with all applicable Environmental Laws except for
any noncompliance as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.
(b) Except as disclosed in the SEC Reports filed prior to the date
of this Agreement, there are no Environmental Claims pending or, to the
knowledge of the Company, threatened, against the Company or any of its
Subsidiaries that would, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.
(c) The Company has disclosed to Parent and, where requested, made
available to Parent all material information, including such material studies,
analyses and test results, in the possession, custody or control of or otherwise
known and available to the Company or any of its Subsidiaries relating to the
environmental conditions on, under or about any of the properties or assets
owned, leased, or operated by any of the Company and its Subsidiaries or any
predecessor in interest thereto at the present time or in the past.
(d) As used in this Agreement:
(i) the term "Environmental Claim" means any written claim,
-------------------
demand, suit, action, proceeding, investigation or notice to the Company or any
of its Subsidiaries by any Person or entity alleging any potential liability
(including, without limitation, potential liability for investigatory costs,
cleanup costs, governmental response costs, natural resource damages, or
penalties) arising out of, based on, or resulting from the presence, or Release
into the environment, of any Hazardous Substance at any location, whether or not
owned, leased, operated or used by the Company or its Subsidiaries;
25
(ii) the term "Environmental Laws" means all Laws relating to
------------------
emissions, discharges, Releases or threatened Releases of Hazardous Substances,
or otherwise relating to the manufacture, generation, processing, distribution,
use, sale, treatment, receipt, storage, disposal, transport or handling of
Hazardous Substances, including the Comprehensive Environmental Response,
Compensation and Liability Act and the Resource Conservation and Recovery Act
and the Occupational Safety and Health Act;
(iii) the term "Hazardous Substance" means (A) chemicals,
-------------------
pollutants, contaminants, hazardous wastes, toxic substances, and oil and
petroleum products, (B) any substance that is or contains friable asbestos, urea
formaldehyde foam insulation, polychlorinated biphenyls, petroleum or petroleum-
derived substances or wastes, radon gas or related materials, (C) any substance
that requires removal or remediation under any Environmental Law, or is defined,
listed or identified as a "hazardous waste" or "hazardous substance" thereunder,
or (D) any substance that is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic or otherwise hazardous; in each case in
clauses (A)-(D) above which is regulated under any Environmental Law; and
(iv) the term "Release" means any releasing, disposing,
-------
discharging, injecting, spilling, leaking, pumping, dumping, emitting, escaping,
emptying, migration, transporting, placing and the like, including into or upon,
any land, soil, surface water, ground water or air, or otherwise entering into
the environment.
4.17 Required Vote by Company Stockholders. The affirmative vote of
-------------------------------------
the holders of a majority of the issued and of the outstanding Class A Shares
and Class B Shares entitled to vote hereon, voting together as a single class,
is the only vote of any class of capital stock of the Company required by the
DGCL or the Certificate of Incorporation or the By-Laws of the Company to adopt
this Agreement and approve the transactions contemplated hereby. Each of the
directors and executive officers of the Company has informed the Company that he
or she intends to vote any Shares he or she owns in favor of adoption of the
Merger Agreement.
4.18 Opinions of Financial Advisor. The Company has received an
-----------------------------
opinion of Xxxxxxx, Xxxxx & Co. to the effect that, as of the date of this
Agreement, the consideration to be received by the holders of Shares pursuant to
the Offer and the Merger is fair to such holders from a financial point of view.
4.19 Affiliate Transactions. Except as disclosed in the SEC Reports
----------------------
or that involve payments no greater than the applicable dollar amount thresholds
in Item 404 of Regulation S-K under the Exchange Act, Section 4.19 of the
Disclosure Schedule contains a complete and correct list of all oral or written
agreements, contracts, commitments and understandings and all transactions,
including all transfers of assets or liabilities, whether or not entered into in
the ordinary course of business, to or by which the Company or any of its
Subsidiaries, on the one hand, and a Stockholder of the Company or any of its
affiliates (other than the Company or any of its Subsidiaries), on the other
hand, are or have been a party or otherwise bound or affected, and that (i) are
currently pending or in effect, or (ii) involve continuing liabilities and
obligations that, individually or in the aggregate, have been, are or would
reasonably expected to be material to the Company and its Subsidiaries taken as
a whole.
26
4.20 Title to Property. The Company and each of its Subsidiaries have
-----------------
good title to all of their real properties and other assets, free and clear of
all Liens, except Liens for taxes not yet due and payable and such Liens or
other imperfections of title, if any, as do not materially interfere with the
present use of the property affected thereby or which would not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect, and except for Permitted Liens and Liens which secure indebtedness
reflected in the 2000 Balance Sheet; and, to the knowledge of the Company, all
leases pursuant to which the Company or any of its Subsidiaries lease from
others any real or personal property, are valid and effective in accordance with
their respective terms, and there is not, to the knowledge of the Company, under
any of such leases, any existing material default or event of default (or event
which with notice or lapse of time, or both, would constitute a material
default), except where the lack of such validity and effectiveness or the
existence of such default of event of default would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
V. CONDUCT OF BUSINESS PENDING THE MERGER
5.1 Conduct of Business Pending the Merger. Except as set forth in
--------------------------------------
Section 5 of the Disclosure Schedule and as specifically contemplated by this
Agreement, the Company covenants and agrees that, between the date of this
Agreement and the Effective Time or earlier termination of this Agreement,
unless Parent otherwise consents in writing:
(a) the Company shall conduct its business and shall cause the
businesses of its Subsidiaries to be conducted only in, and the Company and its
Subsidiaries shall not take any action except in, the ordinary course of
business and in a manner consistent with past practice, and the Company will use
its commercially reasonable efforts to preserve substantially intact the
business organization of the Company and its Subsidiaries, to keep available the
services of the present officers, key employees and consultants of the Company
and its Subsidiaries and to preserve the present relationships of the Company
and its Subsidiaries with customers, suppliers and other Persons with which the
Company or any of its Subsidiaries has significant business relations;
(b) the Company will not amend its Certificate of Incorporation or
By-Laws;
(c) the Company will not declare, set aside or pay any dividend or
other distribution payable in cash, securities or property with respect to its
capital stock, and neither the Company nor any of its Subsidiaries will (i)
issue, sell, transfer, pledge, dispose of or encumber any additional shares of,
or securities convertible into or exchangeable for, or options, warrants, calls,
commitments or rights of any kind to acquire, any shares of capital stock of any
class of the Company or any of its Subsidiaries, other than issuances of Shares
pursuant to securities, options, warrants, calls, commitments or rights existing
at the date of this Agreement and previously disclosed to Parent in writing
(including as disclosed in the SEC Reports), (ii) incur any long-term
indebtedness (whether evidenced by a note or other instrument, pursuant to a
financing lease, sale-leaseback transaction, or otherwise) or incur short-term
indebtedness other than under lines of credit existing on the date of this
Agreement, (iii) redeem, purchase, repurchase or otherwise acquire directly or
indirectly any of its
27
capital stock or other securities, (iv) split, combine or reclassify any of its
capital stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock, or (v) enter into, amend, terminate, renew or fail to use
reasonable efforts to renew in any material respect any (A) Material Contract or
(B) Identified Contract except in the ordinary course of business consistent
with past practice;
(d) neither the Company nor any of its Subsidiaries will, except
pursuant to employment contracts in effect on the date hereof, (i) grant any
increase in the compensation payable or to become payable by the Company or any
of its Subsidiaries to any employee other than increases in the ordinary course
of business consistent with past practice to non-officer employees of the
Company, (ii) adopt, enter into, amend or otherwise increase, or accelerate the
payment or vesting of the amounts, benefits or rights payable or accrued or to
become payable or accrued under any bonus, incentive compensation, deferred
compensation, severance, termination, change in control, retention,
hospitalization or other medical, life, disability, insurance or other welfare,
profit sharing, stock option, stock appreciation right, restricted stock or
other equity based, pension, retirement or other employee compensation or
benefit plan, program agreement or arrangement, or (iii) enter into or amend in
any material respect any employment or collective bargaining agreement or,
except in accordance with the existing written policies of the Company or
existing contracts or agreements, grant any severance or termination pay to any
officer, director, employee or consultant of the Company or any of its
Subsidiaries;
(e) neither the Company nor its Subsidiaries will change the
accounting principles used by it unless required by US GAAP (or, if applicable
with respect to Subsidiaries, foreign generally accepted accounting principles);
(f) neither the Company nor any of its Subsidiaries will acquire by
merging or consolidating with, by purchasing an equity interest in or a portion
of the assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof, or
otherwise acquire any assets of any other Person (other than the purchase of
assets from suppliers or vendors in the ordinary course of business consistent
with past practice) for an amount in excess of $500,000, individually or in the
aggregate;
(g) neither the Company nor any of its Subsidiaries will sell,
lease, exchange, transfer or otherwise dispose of, or agree to sell, lease,
exchange, transfer or otherwise dispose of, any of its assets except in the
ordinary course of business consistent with past practice;
(h) the Company and its Subsidiaries will not mortgage, pledge,
hypothecate, grant any security interest in, or otherwise subject to any other
lien on any of its properties or assets other than Permitted Liens (except for
Permitted Liens described in Section 9.4(d)(ii) of this Agreement);
(i) neither the Company nor its Subsidiaries will compromise,
settle, grant any waiver or release relating to or otherwise adjust any material
claims, liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), including any litigation, except for any such
compromise, settlement, waiver, release or adjustment in the ordinary course of
business consistent
28
with past practice and involving a payment by the Company or any of its
Subsidiaries not in excess of $500,000 in the aggregate following prior notice
to and consultation with Parent;
(j) neither the Company nor any of its Subsidiaries will (A) incur
any indebtedness for borrowed money or guarantee any such indebtedness of
another Person, issue or sell any debt securities or warrants or other rights to
acquire any debt securities of the Company or any of its Subsidiaries, guarantee
any debt securities of another Person, enter into any "keep well" or other
agreement to maintain any financial statement condition of another Person or
enter into any arrangement having the economic effect of any of the foregoing,
or (B) make any loans, advances or capital contributions to, or investments in,
any other Person, other than to the Company or any Subsidiary of the Company or
to officers and employees of the Company or any of its Subsidiaries for travel,
business or relocation expenses in the ordinary course of business;
(k) neither the Company nor any of its Subsidiaries will make any
capital expenditure or capital expenditures other than capital expenditures set
forth in the operating budget of the Company dated August 15, 2000 previously
delivered to Parent, other than expenditures in the ordinary course of business
consistent with past practice which individually or in the aggregate do not
exceed $500,000;
(l) neither the Company nor any of its Subsidiaries will, except as
disclosed in Section 5.1 of the Disclosure Schedule, hire or terminate or amend
the terms of the employment of any executive officer or other key employee;
(m) neither the Company nor any of its Subsidiaries will enter into
or amend in any material respect any Material Contract or enter into any
contract or agreement, written or oral, with any Affiliate or associate or
relative of the Company or relative of any officer or director of the Company,
or make any payment to or for the benefit of, directly or indirectly, any of the
foregoing;
(n) the Company will not authorize, recommend, propose or announce
an intention to adopt a plan of complete or partial liquidation or dissolution
of the Company or any of its Subsidiaries; or
(o) the Company will not take any action including, without
limitation, the adoption of any stockholder rights plan or amendments to the
Certificate of Incorporation, which would, directly or indirectly, restrict or
impair the ability of Parent to vote, or otherwise to exercise the rights and
receive the benefits of a Stockholder with respect to, securities of the Company
that may be acquired or controlled by Parent or Purchaser or permit any
Stockholder to acquire securities of the Company on a basis not available to
Parent in the event that Parent were to acquire securities of the Company; and
(p) neither the Company nor any of its Subsidiaries will enter into
an agreement, contract, commitment or arrangement to do any of the foregoing.
29
5.2 No Shop. (a) The Company and its Subsidiaries will not, and will
-------
not permit or authorize any officer, director, agent, financial advisor,
attorney, accountant or other representative of the Company or its Subsidiaries
to, directly or indirectly, solicit, initiate or encourage submission of
proposals or offers from any Person relating to, or that could reasonably be
expected to lead to, an Acquisition Transaction or participate in any
negotiations or discussions regarding, or furnish to any other Person any
information with respect to, or otherwise cooperate in any way with, or assist
or participate in, or facilitate, any effort or attempt by any other Person to
do or seek an Acquisition Transaction or enter into any letter of intent,
agreement in principle, acquisition agreement or other similar agreement with
respect to an Acquisition Transaction (an "Acquisition Agreement") or any
---------------------
agreement in principle, acquisition agreement or other similar agreement
requiring it to abandon, terminate or fail to consummate the Offer, the Merger
or any other transaction contemplated by this Agreement or to consummate an
Acquisition Transaction; provided, however, that, subject to compliance with
-------- -------
Section 5.2(c), prior to the acceptance for payment of Shares by Purchaser
pursuant to the Offer, the Company may, in response to a bona fide unsolicited
proposal with respect to an Acquisition Transaction that was made in
circumstances not otherwise involving a breach of this Agreement and that the
Board of Directors determines in its good faith judgment taking into account the
advice of its financial advisor and outside counsel is or is reasonably likely
to lead to a Superior Proposal, furnish information to such third party pursuant
to a customary confidentiality agreement and negotiate, explore or otherwise
engage in substantive discussions with such third party, in each case only if
the Board of Directors determines, in its good faith judgment, taking into
account the advice of outside legal counsel, that failing to take such action
would breach the fiduciary duties of the Board of Directors to the Stockholders
under applicable law. Nothing in this Agreement will prevent the Board of
Directors from complying with Rules 14d-9 and 14e-2 promulgated under the
Exchange Act with respect to any Acquisition Transaction or from making any
required disclosure to the Company's Stockholders if, in the good faith judgment
of the Company's Board of Directors, taking into account the advice of outside
counsel, that such disclosure would be required under applicable laws.
(b) Neither the Board of Directors nor any committee thereof may (i)
withdraw or modify, or propose publicly to withdraw or modify, in a manner
adverse to Parent or Purchaser, the approval or recommendation by the Board of
Directors or such committee of the Offer, the Merger, this Agreement or the
Voting Agreement, (ii) approve or recommend, or propose publicly to approve or
recommend, any Acquisition Transaction, including for purposes of Section 203 of
the DGCL, or (iii) cause the Company to enter into any Acquisition Agreement,
provided, however, that, notwithstanding anything to the contrary in this
-------- -------
Agreement, subject to compliance with Section 5.2(c), prior to acceptance for
payment of Shares by Purchaser pursuant to the Offer, in response to a bona fide
unsolicited proposal with respect to an Acquisition Transaction, if (A) the
Board of Directors determines, in its good faith judgment taking into account
the advice of its financial advisor and outside counsel, that (y) such proposal
is a Superior Proposal and (z) failure to take any of the actions set forth in
clauses (i), (ii) or (iii) above would breach the fiduciary duties of the Board
of Directors under applicable law and (B) gives Parent four Business Days prior
written notice of its intention to do so, the Board of Directors may withdraw or
modify its approval or recommendation of the Offer, the Merger or this Agreement
or approve or recommend an Acquisition Transaction or cause the Company to enter
into an Acquisition Agreement, provided, however, that the foregoing shall in no
-------- -------
way limit or otherwise affect Parent's right to terminate this Agreement
pursuant to Section 8.1(f)(i),(ii), (iii) or (v) at
30
such time as the requirements of such subsection have been met; provided
--------
further, however, that the Company shall not enter into an Acquisition Agreement
------- -------
unless prior to or contemporaneously therewith this Agreement is terminated in
accordance with Section 8.1(h). Any such withdrawal, modification or change of
the recommendation of the Board of Directors of this Agreement will not change
the approval of the Board of Directors for purposes of causing any state
takeover statute or other state law to be inapplicable to the transactions
contemplated hereby, including the Offer and the Merger.
(c) The Company will immediately cease all existing activities,
discussions and negotiations with any parties conducted heretofore with respect
to any proposal for an Acquisition Transaction and request the return of all
confidential information regarding the Company provided to any such parties
prior to the date hereof pursuant to the terms of any confidentiality agreement
or otherwise. The Company will (i) immediately (and in any event, no later than
one Business Day after receipt) advise Parent in writing of the receipt of
request for information or any inquiries or proposals relating to an Acquisition
Transaction and any actions taken pursuant to Section 5.2(a) hereof, specifying
the material terms and conditions of such proposed Acquisition Transaction and
the identity of the other party or parties involved and (ii) keep Parent
reasonably informed of the status of any such request or proposed Acquisition
Transaction. If any such inquiry or proposal is in writing, the Company shall
promptly deliver to Parent a copy of such inquiry or proposal. In addition, the
Company shall promptly (but in any event no later than one Business Day) advise
Parent in writing if the Board of Directors makes any determination as to any
Acquisition Transaction as contemplated by the provisos to Sections 5.2(a) and
5.2(b) hereof.
(d) For purposes of this Agreement, (i) "Acquisition Transaction"
-----------------------
means (other than the transactions contemplated by this Agreement) (A) a merger,
consolidation or other business combination, recapitalization, liquidation,
share exchange, sale of shares of capital stock, tender offer or exchange offer
or similar transaction involving the Company or any of its Subsidiaries, (B)
acquisition in any manner, directly or indirectly, of a 30% or greater interest
in the outstanding voting securities of, or a material equity interest in a
substantial portion of the assets of, the Company or any of its Subsidiaries,
including any single or multi-step transaction or series of related transactions
which is structured to permit a third party to acquire beneficial ownership of a
30% or greater equity interest in the Company, (C) the acquisition in any
manner, directly or indirectly, of any material portion of the business or
assets (other than immaterial or insubstantial assets or inventory in the
ordinary course of business or assets held for sale) of the Company, or (D) any
other transaction that is intended or would be reasonably likely to frustrate
the completion of the transactions contemplated hereby, and (ii) "Superior
--------
Proposal" means a bona fide unsolicited written Acquisition Transaction proposal
--------
by a third party involving all or substantially all of the shares of capital
stock or substantially all of the assets of the Company and payment of
consideration to the Company or the Stockholders that a majority of the
disinterested members of the Board of Directors determines, to be, taking into
account the transaction as a whole and all pertinent factors, including the
availability of financing, any changes to the financial terms of this Agreement
which as of the time of determination had been proposed by Parent, any break-up
fees, expense reimbursement provisions and conditions to consummation, more
favorable to the Stockholders from a financial point of view than the Offer, the
Merger and the other transactions contemplated hereby.
31
VI. ADDITIONAL AGREEMENTS
6.1 Proxy Statement. If required by applicable law in order to
---------------
consummate the Merger, as promptly as practicable after the purchase of and
payment for Shares by Purchaser pursuant to the Offer, the Company shall prepare
and file with the SEC, and shall use all reasonable efforts to have cleared by
the SEC, and promptly thereafter shall mail to the Stockholders, the Proxy
Statement. The Proxy Statement will contain the recommendation of the Board of
Directors, subject to the proviso in Section 5.2(b), that the Stockholders adopt
this Agreement and approve the Merger and the other transactions contemplated
hereby. The Company will not mail the Proxy Statement to the Stockholders until
Parent confirms that the information provided by Parent continues to be
accurate. If at any time prior to the Company Stockholders Meeting, any event or
circumstance relating to the Company or any of its Subsidiaries or affiliates,
or its or their respective officers or directors, should be discovered by the
Company that is required to be set forth in a supplement to the Proxy Statement,
the Company shall promptly inform Parent and Purchaser, so supplement the Proxy
Statement and mail such supplement to the Stockholders.
6.2 Meeting of Stockholders of the Company. (a) If required by
--------------------------------------
applicable law in order to consummate the Merger, following the purchase of and
payment for Shares by Purchaser pursuant to the Offer, the Company shall
promptly take all action necessary in accordance with the DGCL and its
Certificate of Incorporation and By-Laws to convene the Company Stockholders
Meeting. The Company shall use its reasonable best efforts to solicit from
Stockholders proxies in favor of the Merger and shall take all other action
necessary or, in the reasonable opinion of Parent, advisable to secure any vote
or consent of Stockholders required by DGCL to effect the Merger. Parent will
vote, or cause to be voted, all Shares directly or indirectly beneficially owned
by it in favor of the Merger.
(b) Notwithstanding Section 6.2(a) hereof, in the event that Parent,
Purchaser or any other Subsidiary of Parent acquires at least 100% of the Class
A Shares and 90% of the Class B Shares pursuant to the Offer or otherwise, the
parties hereto will, take all necessary and appropriate action to cause the
Merger to become effective in accordance with Section 253 of the DGCL without a
meeting of Stockholders as soon as practicable after the acceptance for payment
and purchase of Shares by Purchaser pursuant to the Offer.
6.3 Notification of Certain Matters. The Company shall give prompt
-------------------------------
notice to Parent, and Parent shall give prompt notice to the Company, of (i) the
occurrence or non-occurrence of any event whose occurrence or non-occurrence
would be likely to cause either (A) any representation or warranty contained in
this Agreement to be untrue or inaccurate in any material respect at any time
from the date hereof to the Effective Time, or (B) any condition set forth in
Article VII or Annex I to be unsatisfied in any material respect at any time
from the date hereof to the date Purchaser purchases Shares pursuant to the
Offer, and (ii) any material failure of the Company, Parent or Purchaser, as the
case may be, or any officer, director, employee or agent thereof, to comply with
or satisfy any covenant, condition or agreement to be complied with or satisfied
by it hereunder; provided, however, that the delivery of any notice pursuant to
-------- -------
this Section 6.3 will not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
32
6.4 Access to Information. (a) From the date hereof to the Effective
---------------------
Time, the Company shall, and shall cause each of its Subsidiaries, its officers,
directors, employees, auditors and agents to, afford Parent's Representatives
reasonable access at all reasonable times to its officers, employees, agents,
properties, offices and other facilities and to all books and records, and shall
furnish Parent and Purchaser with all financial, operating and other data and
information as Parent or Purchaser, through Parent's Representatives, may
reasonably request.
(b) Each of Parent and the Company (such party, the "Obligated
---------
Party") shall, and shall cause its affiliates and each of their respective
-----
officers, directors, employees, financial advisors, agents and other authorized
representatives (the "Representatives"), to hold in strict confidence all data
---------------
and information obtained by them from the other party and will treat and
maintain such information in substantially the same manner as the Obligated
Party treats and maintains confidential information in the ordinary course of
its business (unless such information (i) is or becomes publicly available
without the fault of the Obligated Party or its Representatives (ii) is or
becomes available to the Obligated Party or its Representatives on a
nonconfidential basis from a source, other than from the other party or its
Representatives, which the Obligated Party believes, after reasonable inquiry,
was not prohibited from so disclosing such information by a contractual, legal
or fiduciary obligation, or (iii) public disclosure of such information is
required by law in the opinion of counsel to either party, then the Obligated
Party may disclose to a third party compelling disclosure only the part of such
information as the Obligated Party determines in good faith is required by law
to be disclosed (in which case, prior to such disclosure, the Obligated Party
will use reasonable efforts to advise and consult with the other party and its
counsel as to such disclosure and the nature and wording of such disclosure) and
the Obligated Party will use its reasonable efforts to obtain confidential
treatment therefore) and shall insure that its Representatives do not disclose
such information to others without the prior written consent of the other party.
If the Obligated Party or any of its Representatives is requested to disclose
any of the confidential information furnished to it by the other party or its
Representatives, the Obligated Party will promptly notify the party furnishing
such information to permit it to seek a protective order or to take other
appropriate action. The Obligated Party will also cooperate in the other party's
efforts to obtain a protective order or other reasonable assurance that
confidential treatment will be accorded such information.
(c) In the event of the termination of this Agreement, each of Parent
and the Company shall, and shall cause their respective affiliates to, return
(or, at such party's option, destroy) promptly every document furnished to them
by the other party or any of its Representatives in connection with the
transactions contemplated hereby and any copies thereof which may have been
made, and shall cause Representatives to whom such documents were furnished
promptly to return (or, at such party's option, destroy) such documents and any
copies thereof any of them may have made, other than documents filed with the
SEC or otherwise publicly available.
6.5 Public Announcements. Parent and the Company shall consult with
--------------------
each other before issuing any press release or otherwise making any public
statements with respect to the Offer or the Merger and shall not issue any such
press release or make any such public statement before such consultation, except
as may be required by law or applicable stock exchange rules.
33
6.6 Reasonable Best Efforts; Cooperation. The Company, Parent and
------------------------------------
Purchaser will each comply in all material respects with all applicable laws and
with all applicable rules and regulations of any Governmental Authority in
connection with its execution, delivery and performance of this Agreement and
the transactions contemplated hereby. Upon the terms and subject to the
conditions hereof, each of the parties hereto will use its reasonable best
efforts to take or cause to be taken all actions and to do or cause to be done
all things necessary, proper or advisable to consummate the transactions
contemplated by this Agreement and will use its reasonable best efforts to
obtain all necessary waivers, consents and approvals, and to effect all
necessary filings under the Exchange Act, the Australian Stock Exchange Listing
Rules, the rules promulgated by the Australian Securities and Investments
Commission, the Competition Laws and any other consents or approvals required to
be obtained pursuant to Section 4.4. Each of the parties hereto will furnish to
the other party such necessary information and reasonable assistance as the
other party may request in connection with the preparation of any required
governmental filings or submissions and will cooperate in responding to any
inquiry from any Governmental Authority, including immediately informing the
other party of such inquiry, consulting in advance before making any
presentations or submissions to a Governmental Authority, and supplying each
other with copies of all material correspondence, filings or communications
between either party and any Governmental Authority with respect to this
Agreement. Notwithstanding any other provision hereof, in no event will Parent
be required to agree to any divestiture, hold-separate or other requirement in
connection with this Agreement or any of the transactions contemplated hereby.
6.7 Agreement to Defend and Indemnify. (a) The Certificate of
---------------------------------
Incorporation and By-Laws of the Surviving Corporation shall contain
indemnification provisions identical to those contained in the Certificate of
Incorporation and By-Laws of the Company that were provided to Parent in
accordance with this Agreement and shall not be amended, repealed or otherwise
modified for a period of six years after the Effective Time in any manner that
would adversely affect the rights thereunder of individuals who as of the date
hereof were directors or officers of the Company or otherwise entitled to
indemnification under the Certificate of Incorporation, By-Laws or
indemnification agreements or their respective heirs, executors and personal
representatives (the "Indemnified Parties"). The Company shall, to the fullest
-------------------
extent permitted under the DGCL and regardless of whether the Merger becomes
effective, indemnify, defend and hold harmless, and after the Effective Time,
Parent will cause the Surviving Corporation, to the fullest extent permitted
under DGCL, to indemnify, defend and hold harmless, each Indemnified Party
against any costs or expenses (including reasonable attorneys' fees), judgments,
fines, losses, claims, damages, liabilities and amounts paid in settlement in
connection with any claim, action, suit, proceeding or investigation, including,
without limitation, liabilities arising out of this Agreement, the Voting
Agreement and the transactions contemplated hereby and thereby, to the extent
that it was based on the fact that such Indemnified Party is or was a director
or officer of the Company and arising out of actions or omissions or alleged
actions or omissions occurring at or prior to the Effective Time, and in the
event of any such claim, action, suit, proceeding or investigation (whether
arising before or after the Effective Time), (i) the Company or the Surviving
Corporation, as applicable, shall pay the reasonable fees and expenses of
counsel selected by the Indemnified Parties, which counsel shall be reasonably
satisfactory to the Company or the Surviving Corporation, promptly as statements
therefor are received and (ii) the Company and the Surviving Corporation will
cooperate in the defense of any such matter; provided, however, that neither the
-------- -------
34
Company nor the Surviving Corporation will be liable for any settlement effected
without its written consent (which consent will not be unreasonably withheld);
and provided, further, that neither the Company nor the Surviving Corporation
-------- -------
will be obliged pursuant to this Section 6.7 to pay the fees and disbursements
of more than one counsel for all Indemnified Parties in any single action except
to the extent that, in the opinion of counsel for the Indemnified Parties, two
or more of such Indemnified Parties have conflicting interests in the outcome of
such action. For six years after the Effective Time, the Surviving Corporation
will be required to maintain or obtain officers' and directors' liability
insurance covering the Indemnified Parties who are currently covered by the
Company's officers and directors liability insurance policy on terms not less
favorable than those in effect on the date hereof in terms of coverage and
amounts; provided, however, that the Surviving Corporation will not be required
-------- -------
to expend in any year an amount in excess of 200% of the annual aggregate
premiums currently paid by the Company for such insurance; and provided,
--------
further, that if the annual premiums of such insurance coverage exceed such
-------
amount, the Surviving Corporation will be obligated to obtain a policy with the
best coverage available, in the reasonable judgment of its board of directors,
for a cost not exceeding such amount. Nothing in this Agreement will prohibit
the Surviving Corporation from complying with its obligations under the
preceding sentence by obtaining insurance coverage under any policy maintained
by Parent or any of its Subsidiaries. This Section 6.7 will survive the
consummation of the Merger. Parent shall cause Surviving Corporation to
reimburse all expenses, including reasonable attorney's fees and expenses,
incurred by any person to enforce the obligations of Parent and the Surviving
Corporation under this Section 6.7. Notwithstanding Section 9.8 hereof, this
Section 6.7 is intended to be for the benefit of and to grant third party rights
to Indemnified Parties whether or not parties to this Agreement, and each of the
Indemnified Parties will be entitled to enforce the covenants contained herein.
(b) If the Surviving Corporation or any of its successors or assigns
(i) consolidates with or merges into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfers all or substantially all of its properties and assets to any
Person, then and in each such case, proper provision shall be made so that the
successors and assigns of the Surviving Corporation assume the obligations set
forth in this Section 6.7.
6.8 Employee Benefits. At the Effective Time, the Surviving
-----------------
Corporation will continue as the plan sponsor of each Employee Plan. For at
least one year following the Effective Time, employees of the Company and its
Subsidiaries will receive employee benefits that, in the aggregate, are
substantially comparable to the employee benefits provided immediately prior to
the date of this Agreement (excluding any stock options or other stock based
compensation), except (i) to the extent provided in Section 2.9 and (ii) as
required by applicable law (including as required to preserve any favorable tax
treatment afforded such benefits as of the Effective Time).
6.9 Transfer Taxes. Parent and the Company shall cooperate in the
--------------
preparation, execution and filing of all returns, applications or other
documents regarding any real property transfer, stamp, recording, documentary or
other taxes and any other fees and similar taxes which become payable in
connection with the Merger (collectively, "Transfer Taxes"). From and after the
--------------
Effective Time, Parent shall pay or cause to be paid, without deduction or
withholding from any amounts payable to the holders of Shares, all Transfer
Taxes.
35
6.10 Standstill Agreements; Confidentiality Agreements; Anti-takeover
----------------------------------------------------------------
Provisions. Except to the extent required in order to take any of the actions
----------
permitted under the proviso to Section 5.2(a) or the provisos to Section 5.2(b),
during the period from the date of this Agreement through the Effective Time,
the Company (a) will not terminate, amend, modify or waive any provision of any
confidentiality or standstill agreement to which it or any of its Subsidiaries
is a party and (b) will enforce, to the fullest extent permitted under
applicable law, the provisions of any such agreement, including by obtaining
injunctions to prevent any breaches of such agreements and to enforce
specifically the terms and provisions thereof in any court of the United States
of America or of any state having jurisdiction.
VII. CONDITIONS OF MERGER
7.1 Conditions to Obligations of Each Party to Effect the Merger.
------------------------------------------------------------
The respective obligations of each party to effect the Merger are subject to the
satisfaction on or prior to the Closing Date of each of the following conditions
(any or all of which may be waived by the parties hereto in writing, in whole or
in part, to the extent permitted by applicable law):
(a) Offer. Purchaser shall have made, or caused to be made, the
-----
Offer and shall have accepted for payment, the Shares validly tendered and not
withdrawn pursuant to the Offer; provided, however, neither Parent nor Purchaser
-------- -------
may invoke this condition if Purchaser fails to make or cause to be made the
Offer or to accept for payment or pay for Shares pursuant to the Offer in
violation of the terms of the Offer or of this Agreement.
(b) Stockholder Approval. If required by the DGCL, this Agreement
--------------------
shall have been adopted by the requisite vote of the Stockholders.
(c) No Challenge. No Law or Order (whether temporary, preliminary or
------------
permanent) shall have been promulgated, enacted, entered or enforced, and no
other action shall have been taken, by any Governmental Authority or by any
court of competent jurisdiction, that in any of the foregoing cases has the
effect of making illegal or directly or indirectly restraining, prohibiting or
restricting the consummation of the Merger; provided, however, that prior to
-------- -------
asserting this condition each of the parties will have used its reasonable best
efforts to prevent the entry of any such injunction or other Order and to appeal
as promptly as possible any such injunction or other order.
VIII. TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated at any time before
-----------
the Effective Time, whether before or after Stockholder approval:
(a) By mutual written consent of Parent and the Company; or
(b) By either Parent or the Company if a Governmental Authority
shall have issued an Order, enacted a Law or taken any other action, in each
case permanently restraining, enjoining,
36
making illegal or otherwise prohibiting (i) the transactions contemplated by
this Agreement or (ii) prior to the Offer Completion Date, for the benefit of
Parent only, the purchase of Shares from the parties to the Voting Agreement,
pursuant to the Voting Agreement or otherwise, in the case of clauses (i) and
(ii), which shall have become final and nonappealable; or
(c) By either Parent or the Company if the Offer has not been
consummated by January 31, 2001 (the "Outside Date"); or
------------
(d) By the Company at any time prior to Purchaser's purchase of
Shares in the Offer (the "Offer Completion Date"), if (i) there shall have been
---------------------
a material breach of any of Parent's or Purchaser's representations or
warranties hereunder, which breach shall not have been cured within 15 calendar
days of the receipt of written notice thereof by Parent from the Company or (ii)
there shall have been a material breach on the part of Parent or Purchaser of
any of their respective covenants or agreements hereunder, which breach shall
not have been cured within 15 calendar days of the receipt of written notice
thereof by Parent from the Company; or
(e) By Parent at any time prior to the Offer Completion Date, if (i)
there shall have been a material breach of any of the Company's representations
or warranties hereunder, which breach shall not have been cured within 15
calendar days of the receipt of written notice thereof by the Company from
Parent or (ii) there shall have been a material breach on the part of the
Company of any of its covenants or agreements hereunder, which breach shall not
have been cured within 15 calendar days of the receipt of written notice thereof
by the Company from Parent; or
(f) By Parent at any time prior to the Offer Completion Date, if (i)
the Board of Directors or any committee thereof shall withdraw, modify or change
its recommendation or approval in respect of this Agreement, the Offer or the
Merger in a manner adverse to Parent or failed to reconfirm its approval or
recommendation in respect of this Agreement within five Business Days after a
written request from Parent to do so, (ii) the Board of Directors or any
committee thereof shall have recommended any proposal other than by Parent in
respect of any Acquisition Transaction, (iii) the Company shall take any action
in significant breach of Section 5.2, (iv) any Person or group (as defined in
Section 13(d)(3) of the Exchange Act) other than Parent, Purchaser or any of
their respective subsidiaries or affiliates or any party to the Voting
Agreement, shall have become the beneficial owner of more than 40% of the
outstanding Shares (either on a primary or a fully diluted basis), or (v) in the
case of clauses (i), (ii) and (iii), the Board of Directors or any committee
thereof shall have resolved to take such action; provided, however, that any
-------- -------
public statement by the Company that (A) it has received a proposal regarding an
Acquisition Transaction, (B) it has given the Parent the notice required by
Section 5.2(b) in connection with its withdrawal of its recommendations, or (C)
otherwise only describes the technical operation of Sections 5.2 or 8.2 or this
Section 8.1 shall not be deemed to be a public proposal to withdraw or modify
the Board of Directors' recommendation for the purposes of this clause (f) and
Section 5.2; or
(g) By either Parent or the Company, if the Offer expires or is
terminated or withdrawn pursuant to its terms without any Shares being purchased
thereunder by Purchaser as a
37
result of the failure of any of the conditions or the occurrence of any of the
events set forth in Annex I hereto; or
(h) By the Company at any time prior to the Offer Completion Date, if
the Board of Directors of the Company authorizes the Company, subject to
complying with the terms of this Agreement, to enter into a written agreement
concerning a Superior Proposal with respect to the Company; provided, however,
-------- -------
that (i) the Company shall have complied with Section 5.2, (ii) the Company
shall have given Parent at least four Business Days prior written notice of its
intention to terminate this Agreement, attaching a description of all the
material terms and conditions of such Superior Proposal to such notice, (iii)
during such four Business Days or greater period, the Company engages in good
faith negotiations with Parent with respect to such changes as Parent may
propose to the terms of the Merger and this Agreement, (iv) Parent does not make
prior to such termination of this Agreement a definitive, binding offer which
the Board of Directors of the Company determines, in good faith after
consultation with its financial advisors, is at least as favorable to the
Stockholders as such Superior Proposal, and (v) prior to or concurrently with
such termination pursuant to this Section 8.1(h) the Company pays to Parent in
immediately available funds the fee required to be paid pursuant to Section
8.2(b). The Company agrees to notify Parent promptly if its intention to enter
into a written agreement referred to in its notification shall change at any
time after giving such notification.
8.2 Effect of Termination. (a) In the event of termination of this
---------------------
Agreement as provided in Section 8.1 hereof by Parent, on the one hand, or the
Company, on the other hand, written notice thereof shall forthwith be given to
the other party specifying the provision hereof pursuant to which such
termination is made, and this Agreement shall forthwith become void and there
shall be no liability on the part of Parent, Purchaser or the Company, except
that Section 9.3 and this Section 8.2 hereof shall survive any termination of
this Agreement indefinitely. Nothing in this Section 8.2 shall relieve any party
from liability for any prior deliberate or willful breach of this Agreement.
(b) (i) If this Agreement is terminated pursuant to Section
8.1(e) and (A) at the time of such termination, (y) this Agreement is not
terminable pursuant to Section 8.1(d) and (z) a proposal for an Acquisition
Transaction shall have been made known to the Company or been made directly to
its Stockholders generally or any Person shall have publicly announced an
intention (whether or not conditional) to make a proposal for an Acquisition
Transaction and (B) within one year of such termination, the Company becomes a
subsidiary of any Person or consummates an Acquisition Transaction, then the
Company, upon the closing (and as a condition to the closing) of the Company
becoming such a subsidiary or such Acquisition Transaction, shall promptly, but
in no event later than two Business Days after the date of such closing, pay to
Parent a fee of $53.7 million in cash.
(ii) If this Agreement is terminated (A) by Parent pursuant
to Section 8.1(f), or (B) by the Company pursuant to Section 8.1(h), then the
Company shall, in the case of a termination pursuant to Section 8.1(f) promptly,
but in no event later than two Business Days, after the date of such termination
and, in the case of a termination pursuant to Section 8.1(h) prior to or
concurrently with such termination, pay Parent a fee of $53.7 million in cash.
38
(iii) If this Agreement is terminated by either the Company or
Parent pursuant to Section 8.1(c) or 8.1(g) and (A) prior to such termination,
(y) the Minimum Condition shall not have been satisfied but each other condition
to the Offer shall have been satisfied and (z) a proposal for an Acquisition
Transaction shall have been made known to the Company or been made directly to
the Stockholders generally or any Person shall have publicly announced its
intention (whether or not conditional) to make a proposal for an Acquisition
Transaction and (B) within one year of such termination, the Company becomes a
subsidiary of any Person or consummates an Acquisition Transaction, then the
Company (and any Person acquiring the Company and such Person's affiliates),
upon the closing (and as a condition to the closing) of the Company becoming
such a subsidiary or such Acquisition Transaction, shall promptly, but in no
event later than two Business Days after the date of such closing, pay Parent a
fee of $53.7 million in cash.
(iv) This Section 8.2(b) will survive any termination of this
Agreement.
(v) The Company acknowledges that the agreements contained in
this Section 8.2 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, Parent and Purchaser would not
enter into this Agreement; accordingly, if the Company fails to promptly pay any
amount due pursuant to this Section 8.2 and, in order to obtain such payment,
Parent or Purchaser commences a suit which results in a judgment against the
Company for any amounts set forth in this Section 8.2, the Company will pay to
Parent and Purchaser their costs and expenses (including attorneys' fees and
expenses) in connection with such suit, together with interest on the amount of
the fee at the prime rate of Citibank N.A. in effect on the date such payment
was required to be made.
(vi) All amounts due under this Section 8.2(b) will be paid on
the due date in immediately available funds wire transferred to the account
designated in writing by Parent.
IX. GENERAL PROVISIONS
9.1 Non-Survival of Representations, Warranties and Agreements.
----------------------------------------------------------
Except as set forth in this Section and in Section 8.2, all representations,
warranties and agreements in this Agreement will terminate at the Effective Time
or the termination of this Agreement pursuant to Section 8.1 hereof, as the case
may be, except that the covenants set forth in Article II and Sections 6.6, 6.7,
6.8, 6.9, 9.10, 9.15 and 9.16 will survive the Effective Time indefinitely or,
if applicable, for the period therein specified and those set forth in Section
6.4(b) and 6.4(c) will survive termination indefinitely. This Section 9.1 shall
have no effect upon any other obligation of the parties hereto, whether to be
performed before or after the Effective Time.
9.2 Notices. All notices and other communications given or made
-------
pursuant hereto shall be in writing and will be deemed to have been duly given
or made (i) as of the date delivered or sent by facsimile if delivered
personally or by facsimile, and (ii) on the third Business Day after deposit in
the U.S. mail, if mailed by registered or certified mail (postage prepaid,
return receipt requested), in
39
each case to the parties at the following addresses (or at such other address
for a party as specified by like notice, except that notices of changes of
address will be effective upon receipt):
(a) if to Parent or Purchaser:
Xxxxxx'x Brewing Group Limited
00 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxx Xxxxxxxx Xxxxxxxxx 0000
Attention: Company Secretary
Facsimile: 011-613-9645-7226
With a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. X'Xxxxxx
Facsimile: (000) 000-0000
(b) if to the Company:
Xxxxxxxx Wine Estates Company
000 Xxxxxxx Xxxx
X.X. Xxx 0000
Xxxx, Xxxxxxxxxx 00000
Attention: Legal Department
Facsimile: 000-000-0000
9.3 Expenses. Except as expressly set forth in Section
--------
8.2(b) hereof, all fees, costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby will be paid by the party
incurring such fees, costs and expenses, whether or not the Merger is
consummated.
9.4 Certain Definitions. For purposes of this Agreement,
-------------------
the term:
(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 mentioned Person (for the purpose of
this definition "control" (including the terms "controlled by" and "under common
-------
control with") means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of stock, as trustee or executor, by contract or credit
arrangement or otherwise); and
(b) "Person" means an individual, corporation, partnership,
------
limited liability company, association, trust or any unincorporated
organization.
40
(c) "knowledge" of the Company means the actual knowledge
---------
after reasonable inquiry of the persons listed in Section 9.4 of the Disclosure
Schedule.
(d) "Permitted Liens" are (i) Liens imposed by law that
---------------
were incurred in the ordinary course of business such as carrier's,
warehousemen's and mechanic's Liens, which Liens do not materially detract from
the value of such properties or materially impair the use thereof in the
operation of the respective businesses of the Company and its Subsidiaries, (ii)
Liens arising pursuant to purchase money security interests relating to
indebtedness representing an amount no greater than the purchase price of such
properties, (iii) Liens for taxes an assessments not yet due and payable or
Liens for taxes being contested in good faith and by appropriate proceedings for
which adequate reserves have been established, or (iv) Liens set forth in the
Disclosure Schedule.
9.5 Schedules. Any matter disclosed in any section or
---------
subsection of the Disclosure Schedule shall be deemed to be incorporated in and
disclosed for the purposes of any other section or subsection of the Disclosure
Schedule to which it may be relevant to the extent such relevance is reasonably
apparent on its face. All reference to section numbers are references to
Sections of the Agreement.
9.6 Headings. The headings contained in this Agreement are
--------
for reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement.
9.7 Severability. If any term or other provision of this
------------
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement will
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the maximum extent
possible.
9.8 Entire Agreement; No Third-Party Beneficiaries. This
----------------------------------------------
Agreement and the Voting Agreement constitute the entire agreement and supersede
any and all other prior agreements and undertakings, both written and oral,
among the parties, or any of them, with respect to the subject matter hereof
and, except as otherwise expressly provided herein, this Agreement is not
intended to confer upon any other Person any rights or remedies hereunder.
9.9 Assignment. This Agreement may not be assigned by
----------
operation of law or otherwise, except that Parent and Purchaser may assign all
or any of their rights hereunder to any affiliate of Parent provided that no
such assignment will relieve the assigning party of its obligations hereunder.
9.10 Governing Law. This Agreement will be governed by, and
-------------
construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed entirely within that State.
41
9.11 Amendment. This Agreement may be amended by the
---------
parties hereto by action taken by Parent and Purchaser, and by action taken by
or on behalf of the Board of Directors at any time before the Effective Time and
at any time before or after approval by the Stockholders; provided, however,
that, after adoption of this Agreement by the Stockholders, no amendment may be
made which would reduce the amount or change the type of consideration into
which each Share will be converted upon consummation of the Merger. This
Agreement may not be amended except by an instrument in writing signed by the
parties hereto.
9.12 Waiver. At any time before the Effective Time, any
------
party hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only as against such party
and only if set forth in an instrument in writing signed by such party. Any such
waiver will constitute a waiver only with respect to the specific matter
described in such writing and will 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, will 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.
9.13 Incorporation of Annex I. Annex I attached hereto is
------------------------
hereby incorporated herein and made a part hereof for all purposes as if fully
set forth herein.
9.14 Enforcement of Agreement. The parties hereto agree that
------------------------
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties will be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof, this being in addition to
any other remedy to which they are entitled at law or in equity.
9.15 Jurisdiction; Consent to Service of Process. (a) Each
-------------------------------------------
party hereby irrevocably and unconditionally submits, for itself and its
property, to the exclusive jurisdiction of the Chancery or other courts of the
State of Delaware (a "Delaware Court"), and any appellate court from any such
--------------
court, in any suit, action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment resulting from any
suit, action or proceeding, and each party hereby irrevocably and
unconditionally agrees that all claims in respect of any such suit, action or
proceeding may be heard and determined in a Delaware Court.
(b) It will be a condition precedent to each party's right
to bring any such suit, action or proceeding that such suit, action or
proceeding, in the first instance, be brought in a Delaware
42
Court (unless such suit, action or proceeding is brought solely to obtain
discovery or to enforce a judgment), and if each such court refuses to accept
jurisdiction with respect thereto, such suit, action or proceeding may be
brought in any other court with jurisdiction; provided that the foregoing will
not apply to any suit, action or proceeding by a party seeking indemnification
or contribution pursuant to this Agreement or otherwise in respect of a suit,
action or proceeding against such party by a third party if such suit, action or
proceeding by such party seeking indemnification or contribution is brought in
the same court as the suit, action or proceeding against such party.
(c) No party may move to (i) transfer any such suit, action
or proceeding from a Delaware Court to another jurisdiction, (ii) consolidate
any such suit, action or proceeding brought in a Delaware Court with a suit,
action or proceeding in another jurisdiction, or (iii) dismiss any such suit,
action or proceeding brought in a Delaware Court for the purpose of bringing the
same in another jurisdiction.
(d) Each party hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, (i) any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in a Delaware
Court, (ii) the defense of an inconvenient forum to the maintenance of such
suit, action or proceeding in any such court, and (iii) the right to object,
with respect to such suit, action or proceeding, that such court does not have
jurisdiction over such party. Each party irrevocably consents to service of
process in any manner permitted by law.
9.16 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
--------------------
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
9.17 Miscellaneous. As used in this Agreement, (i)
-------------
references to Sections, Annexes and Schedules are to Sections, Annexes or
Schedules of or to this Agreement, (ii) terms used herein with initial capital
letters have the meanings ascribed to them herein, (iii) the word "or" is
disjunctive but not exclusive, (iv) no provision hereof will be interpreted in
favor of or against any party by reason of which party drafted such provision or
this Agreement as an entirety, and (v) terms used herein which are defined in US
GAAP have the meanings ascribed to them therein.
9.18 Counterparts. This Agreement may be executed in one or
------------
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed will be deemed to be an original but all of which
will constitute one and the same agreement.
43
IN WITNESS WHEREOF, Parent, Purchaser and the Company have
caused this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
XXXXXXXX WINE ESTATES HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxx
________________________________
Name: Xxxxxx X. Xxxxx
Title: Chairman & CEO
XXXXXX'X BREWING GROUP LIMITED
By: /s/ Xxxxx X. Bobeff
________________________________
Name: Xxxxx X. Bobeff
Title: SVP Commercial Affairs
BORDEAUX ACQUISITION CORP.
By: /s/ Xxxxx X. Xxxxx
________________________________
Name: Xxxxx X. Xxxxx
Title: Director
44
ANNEX I
Conditions to the Offer. Notwithstanding any other provision
-----------------------
of the Offer, Purchaser will not be required to accept for payment or, subject
to any applicable rules and regulations of the SEC, including Rule 14e-1(c)
promulgated under the Exchange Act (relating to Purchaser's obligation to pay
for or return tendered Shares promptly after termination or withdrawal of the
Offer), pay for, and (subject to any such rules or regulations) may delay the
acceptance for payment of any tendered Shares and (except as provided in this
Agreement) amend or terminate the Offer (whether or not any Shares have
theretofore been purchased or paid for pursuant to the Offer) (A) unless the
following conditions shall have been satisfied: (i) there shall be validly
tendered and not withdrawn prior to the Expiration Date a number of Shares that,
together with any Shares that the Purchaser has the right to acquire pursuant to
the Voting Agreement (but that have not been validly tendered or have been
withdrawn prior to the Expiration Date) and any Shares then owned by Parent or
any of its Subsidiaries, constitutes at least a majority of the total voting
power of the outstanding securities of the Company entitled to vote in the
election of directors or in a merger (the "Voting Securities"), calculated on a
-----------------
fully diluted basis on the date of purchase ("on a fully diluted basis" having
the following meaning: as of any date the number of Voting Securities
outstanding, together with the number of Voting Securities the Company is then
required to issue pursuant to obligations outstanding at that date under
employee stock options, warrants, benefit plans or other rights to purchase or
acquire Voting Securities, assuming the absence of any vesting requirements or
conditions) (the "Minimum Condition"), and (ii) any applicable waiting period
-----------------
under the HSR Act shall have expired or been terminated prior to the expiration
of the Offer, or (B) if at any time on or after the date of this Agreement and
prior to the time of acceptance of Shares for payment or payment therefor any of
the following conditions exists:
(a) there shall be in effect an injunction or other order,
decree, judgment or ruling by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission of
competent jurisdiction or a statute, rule, regulation, executive order
or other action shall have been promulgated, enacted or taken by a
governmental authority or a governmental, regulatory or administrative
agency or commission of competent jurisdiction which in any such case
(i) restrains or prohibits the making or consummation of the Offer, the
consummation of the Merger or the purchase of Shares pursuant to the
Voting Agreement, (ii) prohibits or restricts the ownership or
operation by Parent (or any of its affiliates or Subsidiaries) of any
material portion of its or the Company's business or assets, or compels
Parent (or any of its affiliates or Subsidiaries) to dispose of or hold
separate any material portion of its or the Company's business or
assets, (iii) imposes material limitations on the ability of Parent
effectively to acquire or to hold or to exercise full rights of
ownership of the Shares, including, without limitation, the right to
vote the Shares purchased by Parent on all matters properly presented
to the stockholders of the Company, (iv) imposes any material
limitations on the ability of Parent or any of its affiliates or
Subsidiaries effectively to control in any material respect the
business and operations of the Company, or (v) which otherwise would
have a Company Material Adverse Effect; or
(b) there shall be instituted or pending any action or
proceeding by a governmental authority before any governmental,
regulatory or administrative agency or commission of
I-1
competent jurisdiction seeking any injunction, order, decree, judgment
or ruling having any effect set forth in (a) above; or
(c) this Agreement shall have been terminated by the Company
or Parent in accordance with its terms or any event shall have occurred
which gives Parent or Purchaser the right to terminate this Agreement
or not consummate the Merger; or
(d) (i) any representation or warranty made by the Company in
this Agreement shall not have been true and correct in all material
respects when made if the representation or warranty is not qualified
as to materiality or a Company Material Adverse Effect or, if
qualified, shall not have been true and correct when made, or shall
have ceased to be true and correct in all material respects as of the
Expiration Date as if made as of such date if the representation or
warranty is not qualified as to materiality or a Company Material
Adverse Effect or, if not so qualified, shall have ceased to be true
and correct, (ii) as of the Expiration Date the Company shall not in
all material respects have performed any obligation or agreement and
complied with its material covenants to be performed and complied with
by it under this Agreement, or (iii) the Company or any Stockholder
party to the Voting Agreement shall have materially breached the Voting
Agreement; or
(e) there shall have occurred and be continuing (i) any
suspension or limitation of trading in securities generally on the New
York Stock Exchange, Nasdaq Stock Market or Australian Stock Exchange
(not including any suspension or limitation of trading in any
particular security) or any setting of minimum prices for trading on
such exchange, (ii) any banking moratorium declared by the U.S.
Federal, New York or Australian authorities or any suspension of
payments in respect of banks in the United States (iii) any
commencement of war, armed hostilities or other international or
national calamity directly involving the United States or Australia, in
each case having a material adverse effect on the functionality of
financial markets in the United States or Australia, or (iv) in the
case of any of the foregoing, existing at the time of commencement of
the Offer, a material acceleration or worsening thereof; or
(f) Parent and the Company shall have agreed that Parent shall
amend the Offer to terminate the Offer or postpone the payment for
Shares pursuant thereto.
Subject to Parent and Purchaser's obligations under the Merger Agreement, the
foregoing conditions are for the sole benefit of Parent and may be asserted by
Parent regardless of the circumstances (including any action or inaction by
Parent) giving rise to any such conditions and such conditions, other than the
Minimum Condition, may be waived by Parent in whole or in part at any time and
from time to time, in each case, in the exercise of the good faith judgment of
Parent and subject to the terms of this Agreement. The failure by Parent at any
time to exercise any of the foregoing rights will not be deemed a waiver of any
such right and each such right will be deemed an ongoing right which may be
asserted at any time and from time to time.
