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AGREEMENT AND PLAN OF MERGER
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DATED AS OF
MAY 14, 1997
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BY AND AMONG
UNITED CRAFT BREWERS, INC.
AND
NOR'WESTER BREWING COMPANY, INC.
AVIATOR ALES, INC.
BAYHAWK ALES, INC.
MILE HIGH BREWING COMPANY
WILLAMETTE VALLEY, INC. MICROBREWERIES ACROSS AMERICA
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of May 14, 1997 (this "Agreement"),
by and among United Craft Brewers, Inc., a Delaware corporation ("UCB"),
Nor'Wester Brewing Company, Inc., an Oregon corporation ("Nor'Wester"), Aviator
Ales, Inc., a Delaware corporation ("Aviator"), Bayhawk Ales, Inc., a Delaware
corporation ("Bayhawk), Mile High Brewing Company, a Delaware corporation ("Mile
High"), and Willamette Valley, Inc. Microbreweries Across America, an Oregon
corporation ("WVI") (collectively, Nor'Wester, Aviator, Bayhawk, Mile High and
WVI are the "Constituent Corporations").
RECITALS:
A. The Constituent Corporations, James W. Bernau ("Bernau"), and United
Breweries of America, Inc., a Delaware corporation ("UBA") entered into an
Investment Agreement dated January 30, 1997, as amended (the "Investment
Agreement"), pursuant to which the parties agreed upon the terms and conditions
of (i) the formation of UCB, (ii) the purchase of 1,047,619 shares of UCB Common
Stock by UBA, (iii) a series of bridge loans in the aggregate amount of
$2,750,000 from UBA to Nor'Wester, (iv) the transfer of 83,109 shares of UCB
Common Stock by Bernau to UBA, and (v) the transfer of 174,912 of UCB Common
Stock by Bernau to UCB for cancellation, (vi) the consolidation of the
Constituent Corporations whereby each Constituent Corporation shall become a
wholly-owned subsidiary of UCB, except for WVI which shall cease to exist upon
its merger with and into UCB.
B. Pursuant to the Investment Agreement, UBA has agreed to form UCB and
to cause UCB to take all action necessary to properly form, and to properly form
as UCB's wholly owned subsidiaries Nor'Wester Acquistion Sub, Inc. ("Sub1");
Aviator Acquisition Sub, Inc. ("Sub2"); Bayhawk Acquisition Sub, Inc. ("Sub3");
and Mile High Acquisition Sub, Inc. ("Sub4") (collectively the "UCB Acquisition
Subsidiaries").
C. The respective Boards of Directors of UCB and the Constituent
Corporations have each determined that it is in the best interest of their
respective corporations and their stockholders for the UCB Acquisition
Subsidiaries to merge with and into Nor'Wester, Aviator, Bayhawk and Mile High,
respectively, and for WVI to merge with and into UCB (each a "Merger," and
collectively, the "Consolidation"), pursuant to which each issued and
outstanding share of Common Stock of Nor'Wester, Aviator, Bayhawk, Mile High,
and WVI (except for shares of Aviator Common Stock, Bayhawk Common Stock, and
Mile High Common Stock owned by WVI, which shares shall be extinguished and in
exchange for which no UCB Common Stock or other consideration shall be paid)
will be converted into the number of shares of the Common Stock, par value $.001
per share, of UCB ("UCB Common Stock") determined in accordance with the
exchange ratios described in Section 3.1(a) of this Agreement (the "Exchange
Ratios").
D. The Board of Directors of UCB have approved and adopted the Investment
Agreement, this Agreement, the Mergers, the Consolidation, and the issuance of
UCB
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Common Stock in connection herewith and agreed to cause the UCB Acquisition
Subsidiaries to take all action to be taken by the UCB Acquisition Subsidiaries,
and each of them, under this Agreement.
E. The respective Boards of Directors of the Constituent Corporations
have approved and adopted the Investment Agreement, this Agreement, the Mergers
and the Consolidation, and have resolved to recommend that their respective
stockholders approve this Agreement, the Mergers, and the Consolidation.
F. For federal income tax purposes, it is intended that the Mergers and
the Consolidation shall qualify as a reorganization within the meaning of
Section 368(a) or, alternatively, as a transaction qualifying for
non-recognition under Section 351 of the Internal Revenue Code of 1986 (the
"Code"), as amended.
NOW, THEREFORE, in consideration of the premises, the representations,
warranties and agreements herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
subject to the conditions set forth herein, the parties hereby agree as follows:
ARTICLE 1
THE CONSOLIDATION
1.1 THE MERGERS. At the Effective Time and subject to and upon the terms
and conditions of this Agreement, (i) Sub1 shall be merged with and into
Nor'Wester, (ii) Sub2 shall be merged with and into Aviator, (iii) Sub3 shall be
merged with and into Bayhawk, (iv) Sub4 shall be merged with and into Mile High,
and (v) WVI shall be merged with and into UCB, all in accordance with the
provisions of the Delaware General Corporation Law (the "DGCL") and, in the
cases of the merger of Sub1 with and into Nor'Wester and the merger of WVI with
and into UCB, in accordance with the Oregon Business Corporation Act (the
"OBCA"). Following the Mergers, UCB, Nor'Wester, Aviator, Bayhawk, and Mile
High shall continue as the surviving corporations under their current names (the
"Surviving Corporations") and the separate corporate existence of each of the
UCB Acquisition Subsidiaries and WVI shall cease.
1.2 EFFECTIVE TIME. Each Merger with respect to a particular Constituent
Corporation shall become effective on the date and at the time (the "Effective
Time") that the certificate of merger (the "Certificate of Merger"), which shall
be filed with the Secretary of State of the state of Delaware (the "Delaware
Secretary") and, with respect to the merger of Nor'Wester with and into Merger
Sub1, the articles of merger (the "Articles of Merger"), which shall be filed
with the Secretary of State of the state of Oregon (the "Oregon Secretary"), and
with respect to the Merger of WVI with and into UCB the Articles of Merger and
the Certificate of Merger, which shall be filed with the Oregon Secretary and
the Delaware Secretary, respectively, are filed with the Delaware Secretary and
the Oregon Secretary, as applicable, in each case on the Closing Date.
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1.3 CLOSING. Subject to the fulfillment or waiver of the conditions set
forth in Article 6, the closing of the Mergers and the Consolidation (the
"Closing") shall take place (a) at the offices of Orrick, Herrington &
Sutcliffe, LLP, Old Federal Reserve Bank Building, 400 Sansome Street, San
Francisco, California, 94111, at 9:30 a.m. within five (5) business days
following the last meeting of stockholders of the Constituent Corporations at
which approval of the Mergers and the Consolidation is duly obtained, or (b) at
such other place and/or time and/or on such other date as the parties may
mutually determine.
1.4 ACTION BY UCB ACQUISITION SUBSIDIARIES. UCB shall form the UCB
Acquisition Subsidiaries as its wholly owned subsidiaries and thereafter shall
cause the UCB Acquisition Subsidiaries to take all action to be taken by the UCB
Acquisition Subsidiaries, and each of them, under this Agreement.
ARTICLE 2
TERMS OF THE MERGERS
2.1 EFFECTS OF THE MERGERS. The separate corporate existence of UCB,
Nor'Wester, Aviator, Bayhawk, and Mile High, with all their respective purposes,
objects, rights, privileges, powers, certificates and franchises, shall continue
unimpaired by the Mergers. At the Effective Time, the separate corporate
existence of the UCB Acquisition Subsidiaries and WVI shall cease, and the
Surviving Corporations shall succeed to all the properties and assets of the
Constituent Corporations and to all debts, choses in action and other interests
due or belonging to the Constituent Corporations and shall be subject to, and
responsible for, all the debts, liabilities and duties of the Constituent
Corporations with the effects provided by the applicable provisions of the DGCL
and the OBCA.
2.2 ARTICLES OF INCORPORATION AND BYLAWS.
(a) The respective Articles of Incorporation or Certificate of
Incorporation, as applicable, of UCB, Nor'Wester, Aviator, Bayhawk and Mile High
in effect immediately prior to the Effective Time shall be the Articles of
Incorporation or Certificate of Incorporation of the Surviving Corporations
until amended in accordance with the provisions of the DGCL or the OBCA, as
applicable.
(b) The respective Bylaws of UCB, Nor'Wester, Aviator, Bayhawk and
Mile High as in effect immediately prior to the Effective Time shall be the
Bylaws of the Surviving Corporations until duly amended in accordance with
applicable law, the Articles of Incorporation of the Surviving Corporations and
such Bylaws.
2.3 DIRECTORS. The initial directors of Sub1, Sub2, Sub3, and Sub4
immediately prior to the Effective Time shall be the Directors of Nor'Wester,
Aviator, Bayhawk, and Mile High, respectively, from and after the Effective Time
and shall hold office in accordance with the Articles of Incorporation and
Bylaws of the respective Surviving Subsidiary, from the Effective Time until
their respective successors are duly elected or appointed and qualified. From
and after the Effective Time, the Board of Directors of UCB
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shall consist of those members as are determined in accordance with Section
6.1(k) of the Investment Agreement.
2.4 OFFICERS. The respective officers of Nor'Wester, Aviator, Bayhawk,
Mile High, and WVI shall resign immediately prior to the Effective Time and the
initial officers of each of the Surviving Corporations shall be appointed by the
initial directors of each of the Surviving Corporations and shall hold office in
accordance with the Articles of Incorporation and Bylaws of the respective
Surviving Corporation from the Effective Time until their respective successors
are duly elected or appointed and qualified.
ARTICLE 3
MERGER CONSIDERATION; CONVERSION OR
CANCELLATION OF SHARES IN THE MERGER
3.1 MANNER OF CONVERTING SHARES. Except as provided in Section 3.2 and
Section 3.3 of this Agreement, as of the Effective Time, by virtue of the
Mergers and without any action on the part of the holders of any shares of
Common Stock of the Constituent Corporations (the "Constituent Corporation
Stock") or the holders of any shares of Common Stock of the UCB Acquisition
Subsidiaries (the "Acquisition Subsidiary Stock") or the holders of UCB Common
Stock:
(a) Each share of Constituent Corporation Stock outstanding
immediately prior to the Effective Time (other than (i) Constituent Corporation
Stock held by WVI and (ii) Constituent Corporation Stock as to which dissenters'
rights, if available, shall have been exercised) shall be converted at the
Effective Time into the right to receive from UCB that number of fully-paid,
validly issued and non-assessable shares of UCB Common Stock in accordance with
the respective Exchange Ratios as set forth below:
Nor'Wester...................0.3333333 shares
WVI..........................0.0785714 shares
Aviator......................0.0523809 shares
Bayhawk......................0.0785714 shares
Mile High....................0.0523809 shares
(b) Each share of Acquisition Subsidiary Stock of Sub1, Sub2, Sub3,
and Sub4 outstanding immediately prior to the Effective Time shall be converted
into one share of Common Stock of Nor'Wester, Aviator, Bayhawk, and Mile High,
respectively.
(c) Except as provided in Section 3.3 of this Agreement, as of and
after the Effective Time, no holder of any Constituent Corporation Stock shall
have any rights as a holder of Constituent Corporation Stock, other than to
receive the consideration specified in this Section 3.1, as adjusted for any
fractional shares as provided in Section 3.5.
(d) If, prior to the Effective Time, UCB should split or combine the
UCB Common Stock, or pay a stock dividend or other stock distribution in UCB
Common Stock,
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or otherwise change the UCB Common Stock into any other securities, or make any
other dividend or distribution with respect to the UCB Common Stock, then the
Exchange Ratios shall be approximately adjusted to reflect such split,
combination, dividend, or other distribution or change.
3.2 CANCELLATION OF STOCK. At the Effective Time, all shares of
Constituent Corporation Stock that are owned directly or indirectly by WVI shall
be cancelled without any consideration being payable therefore.
3.3 SHARES OF DISSENTING STOCKHOLDERS. Any shares of Constituent
Corporation Stock outstanding immediately prior to the Effective Time and held
by persons who are entitled under applicable law to exercise, and who have duly
exercised, their rights of appraisal with respect to any Merger ("Dissenting
Stockholders") shall not be converted as described in Section 3.1 of this
Agreement but shall become the right to receive the consideration as may be
determined to be due to such Dissenting Stockholders pursuant to the DGCL or the
OBCA, as applicable. Provided, however, that Constituent Corporation Stock
outstanding immediately prior to the Effective Time and outstanding at the
Effective Time held by any Dissenting Stockholder who shall, after the Effective
Time, withdraw his demand for appraisal or otherwise lose his right of appraisal
as provided in the applicable laws, shall be deemed to be converted into the
right to receive the consideration set forth in Section 3.1.
3.4 EXCHANGE OF CERTIFICATES.
(a) At the Effective Time, UCB shall make available to itself, or any
other entity appointed by UCB as a registrar, transfer agent and/or exchange
agent (the "Exchange Agent") the shares of UCB Common Stock issuable in
accordance with Section 3.1 of this Agreement; and, if applicable, pay to the
Exchange Agent any cash UCB is required to pay for fractional shares pursuant to
Section 3.5 of this Agreement (the "Exchange Fund"). Any shares of UCB Common
Stock or cash in the Exchange Fund and held by the Exchange Agent six months
after the Effective Time shall be returned to UCB no later than the fifth
business day after such sixth month anniversary. Thereafter, any holders of
Constituent Corporation Stock who have not complied with this Section shall look
only to UCB to receive the consideration set forth herein with respect to their
shares of Constituent Corporation Stock without interest thereon.
(b) The Exchange Agent shall make the payments provided for in this
Agreement out of the Exchange Fund, if applicable. The Exchange Fund shall be
used only for the purposes provided in this Agreement.
(c) As soon as practicable after the Effective Time, the Exchange
Agent shall mail to each record holder of an outstanding certificate or
certificate which immediately prior to the Effective Time represented shares of
Constituent Corporation Stock (the "Certificates"), a form letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass only upon proper delivery of the Certificates to
the Exchange Agent) and instructions for use in effecting the surrender of the
Certificates in exchange for certificates representing the shares of UCB Common
Stock
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and the cash in lieu of fractional shares, if any, into which the shares of
Constituent Corporation Stock represented by such Certificates shall have been
converted pursuant to this Agreement. Upon proper surrender of a Certificate
for exchange and cancellation to the Exchange Agent, together with such properly
completed letter of transmittal, duly executed, the holder of such Certificate
shall be entitled to receive in exchange therefore, as applicable, (i) a
certificate representing that number of whole shares of UCB Common Stock as
computed in accordance with Section 3.1 of this Agreement and (ii) a check
representing the amount of cash in lieu of fractional shares, if any, that such
holder has the right to receive in respect of the Certificate surrendered
pursuant to the provisions of this Article 3, and the Certificate so surrendered
shall be cancelled.
(d) No dividends or other distributions declared or made after the
Effective Time on the UCB Common Stock shall be paid to the holder of any
unsurrendered Certificate until the holder of record of such Certificate shall
surrender such Certificate. Provided, however, that upon surrender of a
Certificate, but subject to the effect, if any, of applicable escheat and other
laws, there shall be paid to the holder of such Certificate, without interest,
the amount of dividends or distributions, if any, which theretofore became
payable, but which were not paid by reason of the foregoing, with respect to the
number of whole shares of UCB Common Stock represented by the Certificate(s)
issued upon such surrender.
(e) All UCB Common Stock delivered upon the surrender for exchange of
Constituent Corporation Stock in accordance with the terms hereof shall be
deemed to have been delivered in full satisfaction of all rights pertaining to
such Constituent Corporation Stock. After the Effective Time, there shall be no
further registration of transfers on the stock transfer books of the Constituent
Corporations of the Constituent Corporation Stock that were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented for any reason, they shall be canceled and exchanged
as provided in this Section 3.4(e).
3.5 FRACTIONAL SHARES. No certificate or scrip representing fractional
shares of UCB Common Stock shall be issued upon the surrender for exchange of
Certificates, and such fractional share interests will not entitle the owner
thereof to vote or to enjoy any other rights of a stockholder of UCB. In lieu
thereof, each holder of Constituent Corporation Stock who would otherwise be
entitled to a fraction of a share of UCB Common Stock (after aggregating all
fractional shares of UCB Common Stock to be received by such holder) shall
receive from UCB an amount of cash (rounded to the nearest whole cent), without
interest, equal to the product of (i) such fraction multiplied by (ii) $5.25.
3.6 CONSTITUENT CORPORATION STOCK OPTION PLANS.
(a) Prior to the Effective Time, UCB shall take such action as may be
necessary to cause each unexpired and unexercised option to purchase shares of
Constituent Corporation Stock (each a "Constituent Corporation Option") under
the respective stock incentive or stock option plans of the Constituent
Corporations (the "Option Plans") which is not exercised or does not by its
terms terminate at or prior to the Effective Time, to be automatically converted
at the Effective Time into an option (a "UCB Option") to purchase a
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number of shares of UCB Common Stock equal to the number of shares of Stock that
could have been purchased under the Constituent Corporation Option multiplied by
the applicable Exchange Ratio (rounded downward to the nearest whole share), at
a price per share of UCB Common Stock equal to the option exercise price
determined pursuant to the Constituent Corporation Option divided by the
applicable Exchange Ratio (rounded upward to the nearest whole cent). Each such
UCB Option shall otherwise be subject to the same terms and conditions as the
Constituent Corporation Option; provided, however, that there shall be no
accelerated exercisability of any Constituent Corporation Option solely as a
result of the Mergers. At the Effective Time, all references in the stock
option agreements to any of the Constituent Corporations shall be deemed to
refer to UCB. UCB shall (i) assume all of the Constituent Corporations'
obligations with respect to UCB Options as so amended, (ii) reserve for issuance
the number of shares of UCB Common Stock that will become subject to UCB Options
pursuant to this Section 3.6, (iii) from and after the Effective Time, upon
exercise of the UCB Options, make available for issuance all shares of UCB
Common Stock covered thereby, and (iv) promptly after the Effective Time, issue
to each holder of an outstanding Constituent Corporation Option a document
evidencing the foregoing assumption by UCB.
(b) It is the intention of the parties that the UCB Options assumed
by UCB qualify following the Effective Time of the Mergers as incentive stock
options as defined in Section 422 of the Code to the extent the Constituent
Corporation Options qualified as incentive stock options prior to the Effective
Time of the Mergers.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF THE CONSTITUENT CORPORATIONS
Each Constituent Corporation makes the following representations and
warranties to and for the benefit of each of the other Constituent Corporations
and UCB:
4.1 AUTHORIZED AND OUTSTANDING SHARES OF CAPITAL STOCK. Schedule 4.1(a)
sets forth the number of shares of Common Stock and Preferred Stock of WVI,
Aviator, Bayhawk, and Mile High that is authorized and outstanding and subject
to options, respectively, as of the date hereof. All of the issued and
outstanding shares are, and as of the Closing Date will be, validly issued,
fully paid and non-assessable. A list of all of the holders who beneficially
own in excess of five percent (5%) of the outstanding shares of Common Stock and
Preferred Stock of each of the Constituent Corporations, indicating the number
of shares of Common Stock and Preferred Stock, respectively, owned by each such
holder on the date hereof and to be owned by each such holder after the
Consolidation, is set forth on Schedule 4.1(b). Except as set forth on Schedule
4.1(a), (i) there is no existing option, warrant, call, commitment or other
agreement to which any Constituent Corporation is a party requiring, and there
are no convertible securities of any Constituent Corporation outstanding which
upon conversion would require, the issuance of any additional share of Stock of
any Constituent Corporation or other securities convertible into shares of
equity securities of any Constituent Corporation, and (ii) there are no
agreements to which any
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Constituent Corporation is a party or, to the best knowledge of any Constituent
Corporation, to which such Constituent Corporation is not a party, in each case,
among, between or with any of the stockholders of any Constituent Corporation
with respect to the voting or transfer of the Stock of the Constituent
Corporations or with respect to any other aspect of any Constituent
Corporation's affairs. Schedule 4.1(a) sets forth complete, correct and
accurate statements of the option terms, exercise price and identity of the
optionee with respect to each outstanding stock option or other stock incentive
of each of the Constituent Corporations. There are no stockholders' preemptive
rights or rights of first refusal or other similar rights with respect to the
issuance of Stock by any Constituent Corporation, other than pursuant to the
Investment Agreement.
4.2 AUTHORIZATION AND ISSUANCE OF EQUITY SECURITIES. UCB shall take all
necessary corporate action to duly authorize the issuance of the UCB Common
Stock hereunder. Upon delivery to the holders of Constituent Corporation Stock
certificates therefor in accordance with the terms hereof, the UCB Common Stock
to be issued to the holders of Constituent Corporation Stock hereunder will be
validly issued and fully paid and nonassessable, free and clear of all Liens and
preemptive rights.
4.3 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The
execution, delivery and performance by each of the Constituent Corporations of
this Agreement, the Consolidation, and all instruments and documents to be
delivered by each Constituent Corporation hereunder, and the consummation of the
other transactions contemplated by any of the foregoing (collectively referred
to as the "Transactions"): (i) are within each Constituent Corporation's
corporate power; (ii) have been duly authorized by all necessary or proper
corporate action on the part of each Constituent Corporation (except for
shareholder approval); (iii) are not in contravention of any provision of each
Constituent Corporation's certificates or articles of incorporation or bylaws;
(iv) will not violate any law or regulation, or any order or decree of any court
or governmental instrumentality; (v) will not conflict with or result in the
breach or termination of, constitute a default under or accelerate any
performance required by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which each Constituent Corporation is a party
or by which each Constituent Corporation or any of its respective property is
bound; (vi) will not result in the creation or imposition of any Lien upon any
of the property of the Consolidated Corporation; and (vii) except for the
filings described on Schedule 4.5 hereto, do not require the consent or approval
of, or any filing with, any governmental authority or any other Person. This
Agreement has been duly executed and delivered by each Constituent Corporation
and constitutes a legal, valid and binding obligation of each Constituent
Corporation, enforceable against it in accordance with its terms. This
Agreement has been duly executed and delivered by the Constituent Corporations,
and is a legal, valid and binding obligation of each Constituent Corporation to
the extent it is a party thereto, enforceable against it in accordance with its
terms.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF UCB
UCB makes the following representations and warranties to and for the
benefit of each of the Constituent Corporations:
5.1 ORGANIZATION. UCB is a corporation duly organized and validly
existing under the laws of the State of Delaware. UCB has not filed articles of
dissolution and no corporate action to dissolve UCB has been taken. Complete
and correct copies as of the date hereof of the certificate of incorporation and
bylaws of UCB have been delivered to the Constituent Corporations.
5.2 CAPITALIZATION. The authorized capital stock of UCB consists of 25
million shares of Common Stock, par value $0.001 per share, 100 shares of which
are validly issued and outstanding, fully paid and nonassessable and are owned
by United Breweries of America, Inc. When issued in compliance with this
Agreement, the shares of UCB Common Stock received by the holders of Constituent
Corporation Stock will be validly issued, fully paid and non-assessable, and
will be free of any liens or encumbrances.
5.3 AUTHORITY RELATIVE TO THIS AGREEMENT.
5.3.1 UCB has the corporate power to enter into this Agreement and
to carry out its obligations hereunder.
5.3.2 The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by its Board of Directors and sole shareholder, and no other corporate
proceedings on the part of UCB are necessary to authorize this Agreement and the
transactions contemplated hereby.
5.3.3 This Agreement constitutes a valid and binding obligation of
UCB, enforceable against UCB in accordance with its terms except as enforcement
may be limited to bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and except that the availability of
equitable remedies, including specific performance, is subject to the discretion
of the court before which any proceeding therefor may be brought.
5.3.4 UCB is not subject to or obligated under any charter or
bylaw provision which would be breached or violated by its executing and
carrying out this Agreement.
5.4 UCB ACTION. The Board of Directors of UCB (at a meeting duly called
and held) has by the requisite vote of all Directors present (i) determined that
the Mergers and the Consolidation are advisable and in the best interest of UCB
and (ii) approved the Mergers in accordance with the provisions of the DGCL.
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ARTICLE 6
CONDITIONS OF CLOSING
The obligations of each of the Constituent Corporations to effect the
Mergers and the Consolidation shall be subject to the fulfillment of the
following conditions:
6.1 STOCKHOLDER APPROVAL. This Agreement, the Mergers, and the other
transactions contemplated hereby shall have been approved and adopted by the
requisite affirmative vote of the holders of the Common Stock of each of the
Constituent Corporations entitled to vote thereon.
6.2 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of each Constituent Corporation contained in Article 4 and UCB in
Article 5 shall have been true in all material respects when made and shall be
true in all material respects on and as of the Effective Time as if made on and
as of such date.
6.3 CERTIFICATES. Each of the Constituent Corporations shall have
delivered to each of the other Constituent Corporations a certificate, dated as
of the Closing, signed by the President of each such Constituent Corporation
certifying as to the fulfillment of the conditions specified in this Article 6.
6.4 REGULATORY AND OTHER APPROVALS. All regulatory approvals and
consents, including those of the U.S. Bureau of Alcohol, Tobacco & Firearms and
state liquor authorities, required to consummate the transactions contemplated
hereby shall have been obtained and shall remain in full force and effect and
all statutory waiting periods, if any, shall have expired, and all other
material consents or approvals of any third party required in connection with
the consummation of the Mergers shall have been obtained.
6.5 FORM S-4. The registration statement on Form S-4 (the "Proxy
Statement/Prospectus") covering the UCB Common Stock to be issued in connection
with the Mergers and filed with the SEC shall have been declared effective by
the SEC and no stop order suspending the effectiveness of the Proxy
Statement/Prospectus shall have been issued and no proceedings for that purpose
shall have been initiated or threatened by the SEC.
6.6 NO INJUNCTIONS OR RESTRAINTS. No order, injunction, or decree issued
by any court or agency of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Mergers or any of the other
transactions contemplated by this Agreement shall be in effect.
6.7 DISSENTERS' RIGHTS. Holders of no more than that number of shares of
stock of any Constituent Corporation which equals an aggregate of 10% of all
outstanding shares of stock in such Constituent Corporation shall have validly
exercised and not withdrawn appraisal rights under the DGCL or OBCA, as
applicable; provided, however, that none of the Constituent Corporations shall
assert this condition unless UBA has indicated that it will not close the
purchase of UCB Common Stock under the Investment Agreement by asserting
non-fulfillment of the condition in Section 6.1(m) of the Investment Agreement
on the basis
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that an unacceptably high number of Constituent Corporation Shareholders have
exercised dissenters' rights under the OBCA or the DGCC, as applicable.
6.8 COMPLIANCE WITH THE SECURITIES ACT. The Constituent Corporations
shall use their commercially reasonable efforts to cause each person who is an
"affiliate" as that term is used in paragraphs (c) and (d) of Rule 145 of the
Securities Act, of the Constituent Corporations (such person are identified on
Schedule 6.8 to this Agreement) to deliver to UCB at or prior to the Effective
Time a written agreement, substantially in the form of Exhibit 6.8 hereto, to
the effect that such affiliate will not offer to sell, transfer, or otherwise
dispose of any shares of UCB Common Stock issued in the Consolidation, except,
in each case, pursuant to an effective registration statement or in compliance
with Rule 145 under the Securities Act or in a transaction, which, in the
opinion of legal counsel satisfactory to UCB, is exempt from the registration
requirements of the Securities Act.
ARTICLE 7
TERMINATION AND AMENDMENT
7.1 TERMINATION. This Agreement may be terminated by the parties hereto
upon written consent of the parties at any time prior to the Effective Time.
7.2 AMENDMENT. Subject to compliance with applicable law, this Agreement
may be amended by the parties hereto, by action taken or authorized by their
respective Boards of Directors, at any time before or after approval of the
matters presented in connection with the Mergers by the stockholders of the
Constituent Corporations or UCB. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
ARTICLE 8
DEFINITIONS
"Acquisition Subsidiary Stock" shall have the meaning ascribed to it in
Section 3.1 of this Agreement.
"Articles of Merger" shall have the meaning ascribed to it in Section 1.1
of this Agreement.
"Certificates" shall have the meaning ascribed to it in Section 3.4(c) of
this Agreement.
"Certificates of Merger" shall have the meaning ascribed to it in Section
1.2 of this Agreement.
"Closing" shall have the meaning ascribed to it in Section 1.3 of this
Agreement.
"Code" shall have the meaning ascribed to it in Recital E of this
Agreement.
11
"Consolidation" shall have the meaning ascribed to it in Recital B of this
Agreement.
"Constituent Corporations" shall have the meaning ascribed to it in the
first paragraph of this Agreement.
"Constituent Corporation Option" shall have the meaning ascribed to it in
Section 3.6(a) of this Agreement.
"Constituent Corporation Stock" shall have the meaning ascribed to it in
Section 3.1 of this Agreement.
"DGCL" shall have the meaning ascribed to it in Section 1.1 of this
Agreement.
"Dissenting Shareholders" shall have the meaning ascribed to it in Section
3.3 of this Agreement.
"Effective Time" shall have the meaning ascribed to it in Section 1.2 of
this Agreement.
"Exchange Agent" shall have the meaning ascribed to it in Section 3.4(a) of
this Agreement.
"Exchange Fund" shall have the meaning ascribed to it in Section 3.4(a) of
this Agreement.
"Exchange Ratios" shall have the meaning ascribed to it Recital B of this
Agreement.
"GAAP" shall mean generally accepted accounting principles in the United
States of America as in effect from time to time.
"Investment Agreement" shall have the meaning ascribed to it in Recital A
of this Agreement.
"IRS" shall mean the Internal Revenue Service, or any successor thereto.
"Lien" shall mean any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security interest
under the Uniform Commercial Code or comparable law of any jurisdiction).
"Merger" shall have the meaning ascribed to it in Recital B of this
Agreement.
"OBCA" shall have the meaning ascribed to it in Section 1.1 of this
Agreement.
12
"Person" shall mean any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, entity or government (whether federal,
state, county, city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Surviving Corporations" shall have the meaning ascribed to it in Section
1.1 of this Agreement.
"UCB" shall have the meaning ascribed to it in the first paragraph of this
Agreement.
"UCB Acquisition Subsidiaries" shall have the meaning ascribed to it in the
first paragraph of this Agreement.
"UCB Option" shall have the meaning ascribed to it in Section 3.6(a) of
this Agreement.
"UCB Common Stock" shall have the meaning ascribed to it in Recital B of
this Agreement.
ARTICLE 9
MISCELLANEOUS
9.1 NOTICES. Whenever it is provided herein that any notice, demand,
request, consent, approval, declaration or other communication shall or may be
given to or served upon any of the parties by another, or whatever any of the
parties desires to give or serve upon another any such communication with
respect to this Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and either shall be
delivered in person with receipt acknowledged or by registered or certified
mail, return receipt requested, postage prepaid, or by telecopy and confirmed by
telecopy answerback addressed as follows:
IF TO NOR'WESTER AT:
Nor'Wester Brewing Company,
66 S.E. Morrison Street
Portland, OR 97214
Attention: James W. Bernau
Telecopy Number: (503) 232-2363
13
WITH A COPY TO:
Jack W. Schifferdecker, Jr.
Ater Wynne Hewitt Dodson & Skerritt
222 S.W. Columbia, Suite 1800
Portland, OR 97201
Telecopy Number: (503) 226-0079
IF TO WVI AT:
Willamette Valley, Inc.
Microbreweries Across America
66 S.E. Morrison Street
Portland, OR 97214
Attention: James W. Bernau
Telecopy Number: (503) 232-2363
WITH A COPY TO:
Gordon R. Hanna
Donaldson, Albert, Tweet,
Connolly, Hanna & Muniz
340 Vista Avenue, Suite 310
P.O. Box 968
Salem, OR 97308
IF TO AVIATOR ALES, INC. AT:
Aviator Ales, Inc.
14316 NE 203rd Street
Woodinville, Washington 98072
Attention: Dusty Wyant
Telecopy Number: (206) 487-0847
WITH A COPY TO:
Willamette Valley, Inc.
Microbreweries Across America
c/o Gordon R. Hanna
Donaldson, Albert, Tweet,
Connolly, Hanna & Muniz
340 Vista Avenue, Suite 310
P.O. Box 968
Salem, OR 97308
and
Willamette Valley, Inc.
Microbreweries Across America
66 S.E. Morrison Street
Portland, OR 97214
Attention: James W. Bernau
14
Telecopy Number: (503) 232-2363
IF TO BAYHAWK ALES, INC. AT:
Bayhawk Ales, Inc.
2000 Main Street - Suite A
Irvine, CA 92714
Attention: David Voorhies
Telecopy Number: (714) 442-7566
WITH A COPY TO:
Willamette Valley, Inc.
Microbreweries Across America
c/o Gordon R. Hanna
Donaldson, Albert, Tweet,
Connolly, Hanna & Muniz
340 Vista Avenue, Suite 310
P.O. Box 968
Salem, OR 97308
and
Willamette Valley, Inc.
Microbreweries Across America
66 S.E. Morrison Street
Portland, OR 97214
Attention: James W. Bernau
Telecopy Number: (503) 232-2363
IF TO MILE HIGH BREWING COMPANY AT:
Mile High Brewing Company
2401 Blake Street
Denver, CO 80205
Attention: John Carter
Telecopy Number: (303) 299-9192
WITH A COPY TO:
Willamette Valley, Inc.
Microbreweries Across America
c/o Gordon R. Hanna
Donaldson, Albert, Tweet,
Connolly, Hanna & Muniz
340 Vista Avenue, Suite 310
P.O. Box 968
Salem, OR 97308
and
15
Willamette Valley, Inc.
Microbreweries Across America
66 S.E. Morrison Street
Portland, OR 97214
Attention: James W. Bernau
Telecopy Number: (503) 232-2363
IF TO UNITED CRAFT BREWERS, INC. AT:
United Breweries of America, Inc.
One Harbor Drive, Suite 102
Sausalito, CA 94965
Attention: Vijay Mallya
Telecopy Number: (415) 289-1409
WITH A COPY TO:
Alan Talkington
Orrick, Herrington & Sutcliffe LLP
Old Federal Reserve Building
400 Sansome Street
San Francisco, CA 94111
Telecopy Number: (415) 773-5759
The parties agree to send such notices to such other address as may be
substituted by notice given as herein provided. The giving of any notice
required hereunder may be waived in writing by the party entitled to receive
such notice. Every notice, demand, request, consent, approval, declaration or
other communication hereunder shall be deemed, request, consent, approval,
declaration or other communication hereunder shall be deemed to have been duly
given or served on the date on which personally delivered, with receipt
acknowledged, telecopied and confirmed by telecopy answerback, or three (3)
Business Days after the same shall have been deposited, with the United States
mail.
9.2 BINDING EFFECT; BENEFITS. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties to this
Agreement and their respective successors and permitted assigns. Nothing is
this Agreement, express or implied, is intended or shall be construed to give
any person other than the parties to this Agreement or their respective
successors or assigns any legal or equitable right, remedy or claim under or in
respect of any agreement or any provision contained herein.
9.3 APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the law of the State of Oregon, without regard to the principles
thereof regarding conflict of laws. Each party to this Agreement hereby
consents to service of process in Multnomah County, Oregon and hereby agrees
that all disputes relating to or arising under this Agreement shall be the
jurisdiction of the state and federal courts located in Multnomah County,
Oregon.
16
9.4 SECTION AND OTHER HEADINGS. The section and other headings contained
in this Agreement are for reference purposes only and shall not affect the
meaning or interpretation of this Agreement.
9.5 SEVERABILITY. In the event that any one or more of the provisions
contained in this Agreement shall be determined to be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision or provisions in every other respect and
the remaining provisions of this Agreement shall not be in any way impaired.
9.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
9.7 ENTIRE AGREEMENT. This Agreement and the other documents contemplated
by the Consolidation constitute the entire agreement among the parties hereto
and supersede any prior understandings, agreements or representations by or
among the parties hereto, written or oral, to the extent they are related in any
way to the subject matter hereof.
9.8 FEES AND EXPENSES. Each of the parties hereto shall bear its own
costs and expenses (including legal fees and expenses) incurred in connection
with this Agreement and the transactions contemplated hereby; provided, however,
that all costs and expenses (including legal fees and expenses) incurred by UCB
in connection with the Consolidation shall be reimbursed by Nor'Wester, or
alternatively, UCB may use funds from the bridge loans made pursuant to the
Investment Agreement to pay such costs and expenses.
9.9 EXHIBITS AND SCHEDULES. The exhibits and schedules identified in this
Agreement are incorporated herein by reference and made a part hereof.
9.10 CONSTRUCTION. Any reference to any federal, state, local or foreign
statute or law shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. The word
"including" shall mean including without limitation. If either party has
breached any representation, warranty or covenant contained herein in any
respect, the existence of another representation, warranty or covenant related
to the same subject matter (regardless of the relative levels of specificity)
that the party has not breached shall not detract from or mitigate the breach of
the former representation, warranty or covenant.
References of this Agreement shall mean this Agreement, including all
amendments, modifications and supplements and any exhibits or schedules to any
of the foregoing, and shall refer to the Agreement as the same may be in effect
at the time such reference becomes operative.
17
IN WITNESS WHEREOF, UCB, Nor'Wester, Aviator, Bayhawk, Mile High, and WVI
have executed this Agreement as of the day and year first above written.
UNITED CRAFT BREWERS, INC., NOR'WESTER BREWING COMPANY, INC.,
a Delaware corporation a Oregon corporation
By: /s/ Vijay Mallya By: /s/ James W. Bernau
-------------------------- --------------------------
Name: Vijay Mallya Name: James W. Bernau
Its: Chairman and Chief Its: President
Executive Officer
AVIATOR ALES, INC., BAYHAWK ALES, INC.,
a Delaware corporation a Delaware corporation
By: /s/ James W. Bernau By: /s/ James W. Bernau
-------------------------- --------------------------
Name: James W. Bernau Name: James W. Bernau
Its: President Its: President
MILE HIGH BREWING COMPANY, WILLAMETTE VALLEY, INC.
a Delaware corporation MICROBREWERIES ACROSS AMERICA,
a Oregon corporation
By: /s/ James W. Bernau By: /s/ James W. Bernau
-------------------------- --------------------------
Name: James W. Bernau Name: James W. Bernau
Its: President Its: President
18
TABLE OF CONTENTS
ARTICLE 1
THE CONSOLIDATION
1.1 THE MERGERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 EFFECTIVE TIME.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.4 ACTION BY UBC ACQUISITION SUBSIDIARIES.. . . . . . . . . . . . . . . . 3
ARTICLE 2
TERMS OF THE MERGERS
2.1 EFFECTS OF THE MERGERS.. . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 ARTICLES OF INCORPORATION AND BYLAWS.. . . . . . . . . . . . . . . . . 3
2.3 DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.4 OFFICERS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 3
MERGER CONSIDERATION; CONVERSION OR
CANCELLATION OF SHARES IN THE MERGER
3.1 MANNER OF CONVERTING SHARES. . . . . . . . . . . . . . . . . . . . . . 4
3.2 CANCELLATION OF STOCK. . . . . . . . . . . . . . . . . . . . . . . . . 5
3.3 SHARES OF DISSENTING STOCKHOLDERS. . . . . . . . . . . . . . . . . . . 5
3.4 EXCHANGE OF CERTIFICATES.. . . . . . . . . . . . . . . . . . . . . . . 5
3.5 FRACTIONAL SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.6 CONSTITUENT CORPORATION STOCK OPTION PLANS.. . . . . . . . . . . . . . 6
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF THE CONSTITUENT CORPORATIONS
4.1 AUTHORIZED AND OUTSTANDING SHARES OF CAPITAL STOCK.. . . . . . . . . . 7
4.2 AUTHORIZATION AND ISSUANCE OF EQUITY SECURITIES. . . . . . . . . . . . 8
4.3 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. . . . . . . . 8
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF UCB
5.1 ORGANIZATION.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.2 CAPITALIZATION.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.3 AUTHORITY RELATIVE TO THIS AGREEMENT.. . . . . . . . . . . . . . . . . 9
5.4 UCB ACTION.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE 6
CONDITIONS OF CLOSING
6.1 STOCKHOLDER APPROVAL.. . . . . . . . . . . . . . . . . . . . . . . . . 10
6.2 REPRESENTATIONS AND WARRANTIES TRUE. . . . . . . . . . . . . . . . . . 10
6.3 CERTIFICATES.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.4 REGULATORY AND OTHER APPROVALS.. . . . . . . . . . . . . . . . . . . . 10
6.5 FORM S-4.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.6 NO INJUNCTIONS OR RESTRAINTS.. . . . . . . . . . . . . . . . . . . . . 10
6.7 DISSENTERS' RIGHTS.. . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.8 COMPLIANCE WITH THE SECURITIES ACT.. . . . . . . . . . . . . . . . . . 11
ARTICLE 7
TERMINATION AND AMENDMENT
7.1 TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.2 AMENDMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 8
DEFINITIONS . . . . . . . . . . . . . 11
ARTICLE 9
MISCELLANEOUS
9.1 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
9.2 BINDING EFFECT; BENEFITS.. . . . . . . . . . . . . . . . . . . . . . . 16
9.3 APPLICABLE LAW.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9.4 SECTION AND OTHER HEADINGS.. . . . . . . . . . . . . . . . . . . . . . 17
9.5 SEVERABILITY.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.6 COUNTERPARTS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.7 ENTIRE AGREEMENT.. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.8 FEES AND EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.9 EXHIBITS AND SCHEDULES.. . . . . . . . . . . . . . . . . . . . . . . . 17
9.10 CONSTRUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ii - TABLE OF CONTENTS
TABLE OF CONTENTS
SCHEDULES
SCHEDULE 4.1(a)*
AUTHORIZED AND OUTSTANDING SHARES OF CAPITAL STOCK
OF CONSTITUENT CORPORATIONS
SCHEDULE 4.1(b)*
LIST OF BENEFICIAL HOLDERS OF 5% OR MORE OF SHARES
OF EACH CONSTITUENT CORPORATION
SCHEDULE 6.8*
LIST OF AFFILIATES OF CONSTITUENT CORPORATIONS
EXHIBITS*
* These Schedules and exhibits have been omitted pursuant to Item 601(b)(2)
of Regulation S-B.
iii - TABLE OF CONTENTS