NONCOMPETITION AGREEMENT
This AGREEMENT, is entered into as of this 5th day of January 2000, by and
between SARATOGA BEVERAGE GROUP, INC., a Delaware corporation (the "Company")
and XXXXX XXXXXX (the "Shareholder").
W I T N E S S E T H :
WHEREAS, NCP-SBG, L.P., a Delaware limited partnership (the "Purchaser"),
NCP-SBG Recapitalization Corp., a Delaware corporation and the Company have
entered into a Stock Purchase Agreement and Agreement and Plan of Merger, dated
as of the date hereof (as the same may be amended from time to time, the
"Merger Agreement");
WHEREAS, the Shareholder is a significant shareholder of the Company and
will have shares of Class A Common Stock of the Company, par value $.01 per
share and Class B Common Stock of the Company, par value $.01 per share
converted into the right to receive the Per Share Merger Consideration (as
defined in the Merger Agreement) or a number of shares of the Surviving
Corporation Common Stock (as defined in the Merger Agreement) pursuant to the
Merger Agreement; and
WHEREAS, the Company recognizes and the Shareholder agrees that, as a
significant shareholder and key employee of the Company prior to the
consummation of the transactions contemplated by the Merger Agreement, the
Shareholder obtained and will obtain confidential information concerning the
business operations of the Company and that such information could be of great
value to the Company's competitors and could be used to compete unfairly with
the Company and that the if the Shareholder were to compete with the Company
she could cause the Company great harm; and
WHEREAS, the Purchaser has informed the Company and the Shareholder, and
the Company and the Shareholder acknowledge and agree that the Shareholder's
entering into this Agreement is a material inducement to the Purchaser's
agreeing to enter into the Merger Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the Company and
the Shareholder hereby agree as follows:
1. Payments with Respect to Restrictive Covenants. In consideration for
the restrictive covenants hereunder, the Company shall pay the Shareholder
$750,000 at or promptly following the Effective Time (as defined in the Merger
Agreement).
2. Non-Competition and Non-Disparagement. From the Effective Time through
the fifth anniversary thereof (the "Restriction Period"), the Shareholder shall
not, except with the prior written consent of the Board of Directors of the
Company (the "Board") (i) directly or indirectly, own any interest in, operate,
join, control or participate as a partner, director, principal, officer, or
agent of, enter into the employment of, act as a consultant to, or perform any
services for any entity which has material operations which compete with any
refrigerated beverage and water business in which the Company or its immediate
Affiliates is engaged, or in which any of the foregoing has documented plans to
become engaged of which the Shareholder has knowledge at the time of the
Shareholder's termination of employment or (ii) directly or indirectly engage
in any conduct or make any statement, whether in commercial or noncommercial
speech, disparaging or criticizing in any way the Company or any Subsidiary or
Affiliate thereof, or any products or services offered by any of these, or
engage in any other conduct or make any other statement that could be
reasonably expected to impair the goodwill of the Company or any Subsidiary or
Affiliate thereof, the reputation of the products of the Company or any
Subsidiary or Affiliate thereof or the marketing of such products, in each case
except to the extent required by law, and then only after consultation with the
Company to the extent possible. Notwithstanding anything herein to the
contrary, (a) the foregoing shall not prevent the
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Shareholder from acquiring as an investment securities representing not more
than five percent (5%) of the outstanding voting securities of any
publicly-held corporation and (b) the Shareholder may be employed by or provide
services to, an investment banking firm or consulting firm that provides
services to entities described in such paragraph, provided that Shareholder
does not personally represent or provide services to such entities.
3. Injunctive Relief with Respect to Covenants; Certain Acknowledgments.
(a) The Shareholder acknowledges and agrees that the covenants,
obligations and agreements of the Shareholder contained hereunder relate to
special, unique and extraordinary matters and that a violation of any of the
terms of such covenants, obligations or agreements may cause the Company
irreparable injury for which adequate remedies are not available at law.
Therefore, the Shareholder agrees that the Company shall be entitled to an
injunction, restraining order or such other equitable relief (without the
requirement to post bond) as a court of competent jurisdiction may deem
necessary or appropriate to restrain the Shareholder from committing any
violation of such covenants, obligations or agreements. These injunctive
remedies are cumulative and in addition to any other rights and remedies the
Company may have. The Shareholder further agrees that she will not assert any
claim that the proceeds received with respect to the receipt of the Per Share
Merger Consideration or shares of the Surviving Corporation Common Stock in
exchange for her shares pursuant to the Merger Agreement are not sufficient
consideration for entering into the restrictive covenants hereunder.
(b) The Shareholder acknowledges and agrees that the Shareholder has had
and will have a prominent role in the management of the business, and the
development of the goodwill, of the Company and its Affiliates and their
relations and contacts with the principal customers and suppliers of the
Company and its Affiliates in the United States of America and the rest of the
world, all of which constitute valuable goodwill of, and could be used by the
Shareholder to compete unfairly with, the Company and its Affiliates the
covenants and restrictions hereunder are intended to protect the legitimate
interests of the Company and its Affiliates in their respective goodwill, trade
secrets and other confidential and proprietary information and that the
Shareholder desires to be bound by such covenants and restrictions. The
Shareholder further acknowledges and agrees that her entering into this
Agreement was a material inducement to the Purchaser to enter into the Merger
Agreement and that the choice of governing law and arbitration set forth in
Section 7(b) is reasonable, appropriate and convenient for each party.
(c) The Shareholder represents that her economic means and circumstances
are such that the provisions of this Agreement, including the restrictive
covenants hereunder, will not prevent her from providing for herself and her
family on a basis satisfactory to her and them.
(d) If any court of competent jurisdiction shall at any time determine
that, but for the provisions of this paragraph, any part of this Agreement is
illegal, void as against public policy or otherwise unenforceable, the relevant
part will automatically be amended to the extent necessary to make it
sufficiently narrow in scope, time and geographic area to be legally
enforceable. All other terms will remain in full force and effect.
4. No Punitive or Emotional Damages. The parties hereto agree that neither
the Shareholder nor the Company shall be entitled to seek or obtain punitive,
exemplary or similar damages of any kind from the other or, in the case of the
Shareholder, from the Company's officers, directors, employees or shareholders,
or to seek or obtain damages or compensation for emotional distress, as a
result of any dispute, controversy or claim arising out of, relating to or in
connection with this Agreement, or the performance, breach, termination or
validity thereof. Nothing herein shall preclude an award of compensatory or
punitive damages against any other third party.
5. Breach of Restrictive Covenants. In the event that the Shareholder
breaches this Agreement and following the receipt of a written determination
pursuant to Section 7(b), the Shareholder shall be obligated to repay the
amount transferred to her pursuant to Section 1 of this Agreement. Such
repayment shall in no way affect or limit any other remedies or damages that
the Company may have hereunder.
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6. Entire Agreement. Except as otherwise expressly provided herein, this
Agreement constitutes the entire agreement among the parties hereto with
respect to the subject matter hereof, and all promises, representations,
understandings, arrangements and prior agreements relating to such subject
matter (including those made to or with the Shareholder by any other person or
entity) are merged herein and superseded hereby.
7. Miscellaneous.
(a) Binding Effect. This Agreement shall be binding on and inure to the
benefit of the Company and its successors and permitted assigns. This Agreement
shall also be binding on and inure to the benefit of the Shareholder and her
heirs, executors, administrators and legal representatives. There are no
promises, representations, inducements or statements between the parties
related to the subject matter hereof other than those that are expressly
contained herein. The Shareholder acknowledges that she is entering into this
Agreement of her own free will and accord, and with no duress, that she has
been represented and fully advised by competent counsel in entering into this
Agreement, that she has read this Agreement and that she understands it and its
legal consequences.
(b) Governing Law; Arbitration. (i) This Agreement shall be governed by
and constructed in accordance with the laws of the State of New York as the
same may be applied to contracts entered into and to be performed exclusively
in the State of New York.
(ii) Any dispute, controversy, or question arising under, out of, or
relating to this Agreement (or the breach thereof), shall be referred for
arbitration to be held in New York County, New York (or such other place as the
parties and the arbitrator shall agree) to a neutral arbitrator selected by the
Shareholder and the Company and this shall be the exclusive and sole means for
resolving such dispute (other than for injunctive relief under this Agreement).
The arbitration shall be conducted in accordance with the Employment
Arbitration Rules (the "Rules") of the American Arbitration Association (the
"AAA") in effect at the time of the arbitration, except that the arbitrator
shall be selected by alternatively striking from a list of five arbitrators
supplied by the AAA, and the decision of the arbitrator shall be governed by
the rule of law. Such right to submit a dispute arising hereunder to
arbitration and the decision of the neutral arbitrator shall be final,
conclusive and binding on all parties and interested persons and no action at
law or in equity shall be instituted or, if instituted, further prosecuted by
either party other than to enforce the award of the neutral arbitrator. The
arbitrator shall take submissions and hear testimony, if necessary, and shall
render a written decision as promptly as possible. The arbitrator may require
discovery for good cause shown. Each party shall bear its own costs and
expenses incurred in connection with any such arbitration; provided that the
arbitrator shall be entitled to award to the prevailing party reimbursement of
its reasonable legal costs and expenses (including with respect to the
arbitrator and the AAA).
(c) Amendments. No provision of this Agreement may be modified, waived or
discharged unless such modification, waiver or discharge is approved by the
Board or a person authorized thereby and is agreed to in writing by the
Shareholder and, in the case of any such modification, waiver or discharge
affecting the rights or obligations the Company, is approved by the Board or a
person authorized thereby. No waiver by any party hereto at any time of any
breach by any other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time. No waiver of any provision of this Agreement
shall be implied from any course of dealing between or among the parties hereto
or from any failure by any party hereto to assert its rights hereunder on any
occasion or series of occasions.
(d) Severability. In the event that any one or more of the provisions of
this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not be affected thereby.
(e) Notices. Any notice or other communication required or permitted to be
delivered under this Agreement shall be (i) in writing, (ii) delivered
personally, by courier service or by certified or
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registered mail, first-class postage prepaid and return receipt requested,
(iii) deemed to have been received on the date of delivery or on the third
business day after the mailing thereof, and (iv) addressed as follows (or to
such other address as the party entitled to notice shall hereafter designate in
accordance with the terms hereof):
(A) if to the Company, to it at:
Saratoga Beverage Group, Inc.
00 Xxxxxx Xxxx
Xxxxxxxx Xxxxxxx, XX 00000
Attn: Chief Operating Officer
Fax No.: (000) 000-0000
with copies to:
North Castle Partners, L.L.C.
00 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
and
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
(B) if to the Shareholder, to her at:
Xxxxx Xxxxxx
c/o Saratoga Beverage Group, Inc.
0000 Xxxxxxxx Xxxxxxxx Xxxx.
Xxxxxx Xxxxx, XX 00000
Fax: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxxx, Esq.
Xxxxx, McClosky, Smith, Xxxxxxxx & Xxxxxxx, P.A.
000 X. Xxxxxxx Xxxx.
Xx. Xxxxxxxxxx, XX. 00000
Fax: (000) 000-0000
Tel: (000) 000-0000
(f) Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which together shall constitute
one and the same instrument.
(g) Headings. The section and other headings contained in this Agreement
are for the convenience of the parties only and are not intended to be a part
hereof or to affect the meaning or interpretation hereof.
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(h) Certain Definitions.
"Affiliate": with respect to any Person, means any other Person that,
directly or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with the first Person, including but
not limited to a Subsidiary of the first Person, a Person of which the first
Person is a Subsidiary, or another Subsidiary of a Person of which the first
Person is also a Subsidiary.
"Control": with respect to any Person, means the possession, directly or
indirectly, severally or jointly, of the power to direct or cause the direction
of the management policies of such Person, whether through the ownership of
voting securities, by contract or credit arrangement, as trustee or executor,
or otherwise.
"Subsidiary": with respect to any Person, each corporation or other Person
in which the first Person owns or Controls, directly or indirectly, capital
stock or other ownership interests representing 50% or more of the combined
voting power of the outstanding voting stock or other ownership interests of
such corporation or other Person.
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IN WITNESS WHEREOF, the Company has duly executed this Agreement by its
authorized representatives and the Shareholder has hereunto set his hand, in
each case effective as of the date first above written.
SARATOGA BEVERAGE GROUP, INC.
By: Xxx Xxxxx
-----------------------------
Name: Xxx Xxxxx
Title: Chief Financial Officer
XXXXX XXXXXX
/s/ Xxxxx Xxxxxx
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