[Execution Copy]
AGREEMENT AND PLAN OF MERGER
DATED AS OF MAY 13, 1998
AMONG
BERTUCCI'S, INC.,
NE RESTAURANT COMPANY, INC.,
AND
NERC ACQUISITION CORP.
TABLE OF CONTENTS
PAGE
ARTICLE I
THE OFFER................................................................2
SECTION 1.1. THE OFFER..........................................2
SECTION 1.2. COMPANY ACTION.....................................4
SECTION 1.3. DIRECTORS..........................................6
ARTICLE II
THE MERGER...............................................................7
SECTION 2.1. THE MERGER........................................7
SECTION 2.2. CLOSING...........................................8
SECTION 2.3. EFFECTIVE TIME....................................8
SECTION 2.4. EFFECTS OF THE MERGER.............................8
SECTION 2.5. ARTICLES OF ORGANIZATION; BY-LAWS.................8
SECTION 2.6. DIRECTORS.........................................9
SECTION 2.7. OFFICERS..........................................9
ARTICLE III
EFFECT OF THE MERGER ON THE SECURITIES OF THE CONSTITUENT
CORPORATIONS............................................................9
SECTION 3.1. EFFECT ON CAPITAL STOCK..........................9
SECTION 3.2. STOCK OPTIONS...................................10
SECTION 3.3. EXCHANGE OF CERTIFICATES........................11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES.................. ......................13
SECTION 4.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY...13
SECTION 4.2. REPRESENTATIONS AND WARRANTIES OF PARENT AND
SUB.............................................21
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR TO MERGER..............24
SECTION 5.1. CONDUCT OF BUSINESS OF THE COMPANY..............24
SECTION 5.2. OTHER ACTIONS...................................26
ARTICLE VI
ADDITIONAL AGREEMENTS..................................................26
SECTION 6.1. MEETING OF STOCKHOLDERS.........................26
SECTION 6.2. PROXY STATEMENT.................................27
SECTION 6.3. ACCESS TO INFORMATION; CONFIDENTIALITY..........28
SECTION 6.4. COMMERCIALLY REASONABLE EFFORTS.................28
SECTION 6.5. FINANCING.......................................28
SECTION 6.6. INDEMNIFICATION; DIRECTORS' AND OFFICERS'
INSURANCE.......................................29
SECTION 6.7. PUBLIC ANNOUNCEMENTS............................30
i
SECTION 6.9. ACQUISITION PROPOSALS...........................30
SECTION 6.9. STOCKHOLDER LITIGATION..........................31
SECTION 6.10. BOARD ACTION RELATING TO STOCK OPTION PLANS....31
SECTION 6.11. CONSENTS AND APPROVALS.........................32
SECTION 6.12. REPAYMENT OF INDEBTEDNESS......................32
SECTION 6.13. PAYMENT OF FEE AND EXPENSES....................32
ARTICLE VII
CONDITIONS PRECEDENT...................................................33
SECTION 7.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO
EFFECT THE MERGER...............................33
SECTION 7.2. CONDITIONS TO OBLIGATIONS OF PARENT AND SUB.....33
SECTION 7.3. CONDITIONS TO OBLIGATIONS OF THE COMPANY.........34
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER......................................35
SECTION 8.1. TERMINATION......................................35
SECTION 8.2. EFFECT OF TERMINATION...........................36
SECTION 8.3. AMENDMENT.......................................38
SECTION 8.4. EXTENSION; WAIVER...............................38
SECTION 8.5. PROCEDURE FOR TERMINATION, AMENDMENT,
EXTENSION OR WAIVER.............................38
ARTICLE IX
GENERAL PROVISIONS.....................................................39
SECTION 9.1. NONSURVIVAL OF REPRESENTATIONS AND
WARRANTIES......................................39
SECTION 9.2. FEES AND EXPENSES...............................39
SECTION 9.3. DEFINITIONS.....................................39
SECTION 9.4. NOTICES.........................................39
SECTION 9.5. INTERPRETATION..................................40
SECTION 9.6. COUNTERPARTS....................................40
SECTION 9.7. ENTIRE AGREEMENT; THIRD-PARTY BENEFICIARIES.....41
SECTION 9.8. GOVERNING LAW...................................41
SECTION 9.9. ASSIGNMENT......................................41
SECTION 9.10. ENFORCEMENT....................................41
SECTION 9.11. SEVERABILITY...................................42
ii
AGREEMENT AND PLAN OF MERGER
DATED AS OF MAY 13, 1998
AMONG
BERTUCCI'S, INC.,
A MASSACHUSETTS CORPORATION (THE "COMPANY"),
NE RESTAURANT COMPANY, INC.,
A DELAWARE CORPORATION ("PARENT"),
AND
NERC ACQUISITION CORP.,
A MASSACHUSETTS CORPORATION AND A WHOLLY OWNED SUBSIDIARY OF
PARENT ("SUB")
WITNESSETH:
WHEREAS, the Board of Directors of the Company has determined that this
Agreement and the transactions contemplated hereby including the Offer and the
Merger (each, as defined herein) are fair to and in the best interest of the
Company and its stockholders;
WHEREAS, the Board of Directors of each of Parent and Sub has
determined that the transactions contemplated by this Agreement (including the
Offer and the Merger) are in the best interests of Parent and Sub and their
respective stockholders; and
WHEREAS, the Boards of Directors of the Company, Parent and Sub, have
each approved and adopted this Agreement and approved the Offer and the Merger
and the other transactions contemplated hereby and recommended, in the case of
the Company, acceptance of the Offer by its stockholders.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
ARTICLE I
THE OFFER
SECTION 1.1. THE OFFER.
(a) Provided that nothing shall have occurred that would result in a
failure to satisfy any of the conditions set forth in paragraphs (a) through (i)
of Annex I hereto, Parent shall or shall cause Sub to, as promptly as
practicable following the date hereof, but in no event later than five business
days after the initial public announcement of the Offer, commence (within the
meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) a tender offer (as amended from time to time in accordance with
this Agreement, the "Offer") to purchase all of the issued and outstanding
shares of common stock, par value $0.005 per share, of the Company (the "Shares"
or "Common Stock"), at a price of
not less than $10.50 per Share, net to the seller in cash. For purposes of this
Article I, the party which makes the Offer, whether Parent or Sub, shall be
referred to as the "Offeror." The obligation of Offeror to accept for payment
and to pay for any Shares tendered in the Offer shall be subject only to (i) the
condition that there shall be validly tendered in accordance with the terms of
the Offer prior to the expiration date of the Offer and not withdrawn a number
of Shares which, together with any Shares then owned by Parent or Sub,
represents at least ninety (90%) percent of the Shares outstanding on a
fully-diluted basis (the "Minimum Condition"), (ii) the receipt of cash proceeds
of the Financing (as defined in Section 4.2(d) of this Agreement) in an amount
sufficient to consummate the transactions contemplated hereby pursuant to the
terms of the Commitments (as defined in said Section 4.2(d)) or such other terms
as Parent and the Company shall agree or as are not materially more onerous than
as set forth in the Commitments (the "Financing Condition") and (iii) the other
conditions set forth in Annex I hereto. Offeror expressly reserves the right in
its sole discretion to waive any such condition (including the Minimum
Condition, provided that no such waiver of the Minimum Condition shall decrease
the Minimum Condition to less than sixty-six and two-thirds (66 2/3%) percent),
to increase the price per Share payable in the Offer, to extend the Offer and to
make any other changes in the terms and conditions of the Offer; provided,
however, that unless previously approved by the Company in writing, Offeror will
not (i) decrease the price per Share payable in the Offer, (ii) decrease the
maximum number of Shares to be purchased in the Offer, (iii) impose conditions
to the Offer in addition to those set forth in Annex I hereto, (iv) change the
conditions to the Offer in any material respect adverse to the Company, (v)
except as provided in the next sentence, extend the Offer, (vi) change the form
of consideration payable in the Offer or (vii) amend any other term of the Offer
in a manner adverse to the holders of the Shares. Notwithstanding the foregoing,
Offeror may, without the consent of the Company, (i) extend the Offer beyond any
scheduled expiration date (the initial scheduled expiration date being 20
business days following commencement of the Offer) for a period not to extend
beyond July 31, 1998, if at any scheduled expiration date of the Offer, any of
the conditions to Offeror's obligation to accept for payment, and pay for,
Shares (including, with respect to the Financing Condition, the consummation of
the sale of the Senior Notes (as defined in Section 4.2(d)) shall not be
satisfied or waived, until such time as such conditions are satisfied or waived
and (ii) extend the Offer for any period required by any rule, regulation,
interpretation or position of the Securities and Exchange Commission (the "SEC")
or the staff thereof applicable to the Offer. The limitations regarding the
terms and conditions of the Offer, as set forth in the second preceding and the
immediately preceding sentences, shall not be applicable in the event this
Agreement is terminated pursuant to Section 8.1(d) of this Agreement. Subject to
the terms and conditions of the Offer and this Agreement, Offeror shall accept
for payment , and pay for, all Shares validly tendered and not withdrawn
pursuant to the Offer that Offeror becomes obligated to accept for payment, and
pay for, pursuant to the Offer as soon as practicable after expiration of the
Offer, subject to compliance with Rule 14e-1(c) under the Exchange Act. Subject
to the terms and conditions of the Offer, Parent and Sub will each 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 under applicable
laws and regulations to consummate the Offer.
(b) As soon as practicable on the date of the commencement of the
Offer, Offeror shall file with the SEC a Tender Offer Statement on Schedule
14D-1 with respect to the Offer which will contain the offer to purchase and
form of the related letter of transmittal and summary advertisement (together
with any supplements or amendments thereto and including exhibits thereto, the
"Offer Documents"). The Offer Documents will comply in all material respects
with applicable federal securities laws and any other applicable laws. Parent,
Offeror and the Company each agree to promptly correct any information provided
by it for use in the Offer Documents if and to the extent that it shall have
become false or misleading in any material respect. Offeror will take all steps
necessary to cause the Offer Documents as so corrected to be filed with the SEC
and to be disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws and any other applicable laws.
The Company and its counsel shall be given an opportunity to review and comment
on the Offer Documents and any amendments thereto prior to the filing thereof
with the SEC; provided that Offeror will attempt to give the Company and its
counsel as much time prior to filing to so review and comment as Offeror
believes is reasonably practicable under the circumstances. Offeror will provide
the Company and its counsel with any comments Offeror and its counsel may
receive from the SEC or its staff with respect to the Offer Documents promptly
after the receipt thereof. In the event that the Offer is terminated or
withdrawn by Offeror, Parent and Sub shall cause all tendered Shares to be
returned to the registered holders of the Shares represented by the certificate
or certificates surrendered to the Exchange Agent (as defined in Section 3.3 of
this Agreement).
SECTION 1.2. COMPANY ACTION.
(a) The Company hereby consents to the Offer and represents that its
Board of Directors (the "Board of Directors"), at a meeting duly called and
held, has (i) unanimously determined that this Agreement and the transactions
contemplated hereby, including the Offer and the Merger (as defined in Section
2.1), are fair to and in the best interest of the Company and its stockholders,
(ii) unanimously approved this Agreement and the transactions contemplated
hereby, including the Offer and the Merger, which approvals are sufficient to
render entirely inapplicable to the Offer and the Merger or Parent or Sub the
provisions of Chapters 110C, 110D, 110E and 110F of the Massachusetts General
Laws, (iii) taken such action as is necessary to exempt this Agreement, the
purchase of Shares pursuant to the Offer, the Merger and the other transactions
contemplated hereby from the provisions set forth in (x) Article 6 of the
Company's Restated Articles of Organization under the captions "Vote Required
for Certain Business Combinations" and "Redemption of Shares" and (y) Article 11
of the Company's Restated By-Laws and (iv) resolved to recommend acceptance of
the Offer and approval and adoption of this Agreement and the Merger by its
stockholders. NationsBanc Xxxxxxxxxx Securities LLC (the "Financial Advisor")
has delivered to the Board of Directors its written opinion, subject to the
qualifications and limitations stated therein, to the effect that the
consideration to be received by the holders of the Shares pursuant to each of
the Offer and the Merger, taken together, is fair to the holders of Shares from
a financial point of view. The Company has been authorized by the Financial
Advisor to permit, subject to prior review and consent by the Financial Advisor
(such consent not to be unreasonably withheld), the inclusion of the fairness
opinion (or a reference thereto) in the Offer Documents and the Schedule 14D-9
(as defined in paragraph (b) of this Section 1.2). The Company has been advised
that Xxxxxx Xxxxxxxx, President and Chief Executive Officer and a Director of
the Company, has agreed, pursuant to the Tender and Voting Agreement, dated the
date of this Agreement, among Parent, Offeror and Xxxxxx Xxxxxxxx (the "Tender
and Voting Agreement"), to tender all of the Shares beneficially owned by him
pursuant to the Offer and, to the Company's knowledge, all of its other
directors and executive officers intend as of the date hereof to the extent of
their beneficial ownership of Shares, to tender their Shares pursuant to the
Offer. The Company will promptly furnish Parent with a list of its stockholders,
mailing labels containing the names and addresses of all record holders of
Shares and lists of securities positions of Shares held in stock depositories,
in each case as of the most recent practicable date, and will provide to Parent
such additional information (including, without limitation, updated lists of
stockholders, mailing labels and lists of securities positions) and such other
assistance as Parent may reasonably request from time to time in connection with
the Offer and the Merger (including but not limited to communicating the Offer
and the Merger to the record and beneficial holders of Shares). Subject to the
requirements of applicable law, and except for such steps as are necessary to
disseminate the Offer Documents and any other documents necessary to consummate
the Offer or the Merger, Parent, Offeror and their agents and advisors shall use
the information contained in any such labels and listings only in connection
with the Offer and the Merger and, if this Agreement shall be terminated
pursuant to Article VIII hereof, shall deliver to the Company all copies and
extracts of such information then in their possession or under their control.
(b) On or prior to the date that the Offer is commenced, the Company
will file with the SEC a Solicitation/Recommendation Statement on Schedule
14D-9, (together with any supplements or amendments thereto and including
exhibits thereto, the "Schedule 14D-9") which shall contain the recommendations
of the Board of Directors referred to in Section 1.2(a) of this Agreement. The
Schedule 14D-9 will comply in all material respects with all applicable federal
securities laws and any other applicable laws. The Company, Parent and Sub each
agree to promptly correct any information provided by it for use in the Schedule
14D-9 if and to the extent that it shall have become false or misleading in any
material respect. The Company will take all steps necessary to cause the
Schedule 14D-9 as so corrected to be filed with the SEC and to be disseminated
to holders of Shares, in each case as and to the extent required by applicable
federal securities laws and any other applicable laws. Parent, Sub and their
counsel shall be given an opportunity to review and comment on the Schedule
14D-9 and any amendments thereto prior to the filing thereof with the SEC;
provided that the Company will attempt to give Parent, Sub and their counsel as
much time prior to filing to so review and comment as the Company believes is
reasonably practicable under the circumstances. The Company will provide Parent
and Sub and their counsel with any comments the Company or its counsel may
receive from the SEC or its staff with respect to the Schedule 14D-9 promptly
after the receipt of such comments.
SECTION 1.3. DIRECTORS.
(a) Effective upon the purchase of and payment for Shares by Offeror
pursuant to the Offer such that Offeror shall own at least a majority of the
Shares and from time to time thereafter, Parent shall be entitled to designate
up to such number of directors, rounded up to the next whole number, on the
Board of Directors that equals the product of (i) the total number of directors
on the Board of Directors (giving effect to any increase in the number of
directors pursuant to this Section 1.3) multiplied by (ii) the percentage that
the number of Shares owned by Parent and Sub bears to the total number of Shares
outstanding on a primary basis, and the Company shall take all action necessary
to cause Parent's designees to be elected or appointed to the Board of
Directors, including, without limitation, increasing the number of directors
and/or securing the resignations of such number of incumbent directors as is
necessary to enable Parent's designees to be elected to the Board of Directors
and to cause Parent's designees to be so elected. At such times, the Company
will use its best efforts to cause individuals designated by Parent to
constitute the same percentage as such individuals represent on the Board of
Directors of (x) each committee of the Board of Directors, (y) each board of
directors of each Subsidiary (as defined below) of the Company and (z) each
committee of each such board. Notwithstanding the foregoing, until the Effective
Time (as defined in Section 2.3 of this Agreement), the Company shall use its
best efforts to ensure that not less than two persons who are directors on the
date hereof shall remain as members of the Board of Directors (the "Continuing
Directors") until the Effective Time. In the event there is only one Continuing
Director, such Continuing Director shall have the right to designate a person,
who is reasonably acceptable to Offeror, to become a Continuing Director. For
purposes of this Agreement, "Subsidiary" means any corporation or other entity
of which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are directly or indirectly owned by the Company or Parent, as
applicable.
(b) The Company's obligations to appoint designees to the Board of
Directors shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder. The Company shall promptly take all actions required
pursuant to Section 14(f) and Rule 14f-1 in order to fulfill its obligations
under this Section 1.3, including mailing to the stockholders as part of the
Schedule 14D-9 the information required by such Section 14f-1, as is necessary
to enable Parent's designees to be elected to the Board of Directors. Parent
will supply to the Company in writing 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. For purposes of this
Agreement, "affiliate" shall mean, as to any person, any other person that would
be deemed to be an "affiliate" of such person as that term is defined in Rule
12b-2 of the General Rules and Regulations under the Exchange Act.
(C) Following the election or appointment of Parent's designees
pursuant to this Section 1.3 and prior to the Effective Time, any amendment of
this Agreement, any termination of this Agreement by the Company, any extension
by the Company of the time for the performance of any of the obligations or
other acts of Parent or Sub, any consent of the Company contemplated hereby, any
waiver of any of the Company's rights hereunder, any
amendment to the Company's Restated Articles of Organization or any action taken
by the Company that materially adversely affects the interests of the
stockholders of the Company with respect to the transactions contemplated
hereby, will require the concurrence of a majority of the Continuing Directors.
ARTICLE II
THE MERGER
SECTION 2.1. THE MERGER. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with Section 78 of the
Massachusetts Business Corporation Law (the "MBCL"), at the Effective Time (as
hereinafter defined), Sub shall be merged with and into the Company (the
"Merger"). Upon the Effective Time, the separate existence of Sub shall cease,
and the Company shall continue as the surviving corporation (the "Surviving
Corporation"). Notwithstanding the foregoing, in the event that Parent and Sub
shall acquire in the aggregate at least ninety (90%) percent of the outstanding
Shares, pursuant to the Offer or otherwise, the parties hereto shall, at the
request of Parent and subject to Article VII hereof, take all necessary and
appropriate action to cause the merger of the Company with and into Sub to
become effective, without a meeting of stockholders of the Company, on the same
day as the purchase of and payment for Shares is made by Offeror pursuant to the
Offer in accordance with Section 82 of the MBCL, in which case the separate
existence of the Company shall cease and Sub shall continue as the Surviving
Corporation and its corporate name shall be changed to "Bertucci's, Inc." and
the term "Merger" as used in this Agreement shall be deemed to refer to such
merger.
SECTION 2.2. CLOSING. Unless this Agreement shall have been terminated
and the transactions herein contemplated shall have been abandoned pursuant to
Section 8.1, and subject to the satisfaction or waiver of the conditions set
forth in Article VII, the closing of the Merger (the "Closing") will take place
at 10:00 a.m., Boston time, not later than the second business day following the
date on which the last to be fulfilled or waived of the conditions set forth in
Article VII shall be fulfilled or waived in accordance with this Agreement (the
"Closing Date"), at the offices of Stroock & Stroock & Xxxxx LLP, 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, unless another date, time or place is agreed to
in writing by the parties hereto.
SECTION 2.3. EFFECTIVE TIME. The parties hereto will file with the
Secretary of State of the Commonwealth of Massachusetts (the "Massachusetts
Secretary of State") on the Closing Date (or on such other date as Parent and
the Company may agree) articles of merger or other appropriate documents,
executed in accordance with the relevant provisions of the MBCL, and make all
other filings or recordings required under the MBCL in connection with the
Merger. The Merger shall become effective upon the filing of the articles of
merger with the Massachusetts Secretary of State, or at such later time as is
specified in the articles of merger (the "Effective Time").
SECTION 2.4. EFFECTS OF THE MERGER. The Merger shall have the effects
set forth in Section 80 of the MBCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the properties,
rights, privileges, powers and franchises of the Company and Sub shall vest in
the Surviving Corporation, and all debts, liabilities and duties of the Company
and Sub shall become the debts, liabilities and duties of the Surviving
Corporation.
SECTION 2.5. ARTICLE OF ORGANIZATION; BY-LAWS.
(a) The Company's Restated Articles of Organization, as in effect at
the Effective Time, shall be, from and after the Effective Time, the Articles of
Organization of the Surviving Corporation until thereafter changed or amended as
provided therein or by applicable law.
(b) The Company's Restated By-laws, as in effect at the Effective Time,
shall be, from and after the Effective Time, the By-laws of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law.
SECTION 2.6. DIRECTORS. The directors of Sub at the Effective Time
shall become, from and after the Effective Time, the directors of the Surviving
Corporation, until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be.
SECTION 2.7. OFFICERS. The officers of Sub at the Effective Time shall
become, from and after the Effective Time, the officers of the Surviving
Corporation, until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be.
ARTICLE III
EFFECT OF THE MERGER ON THE SECURITIES OF THE
CONSTITUENT CORPORATIONS
SECTION 3.1. EFFECT ON CAPITAL STOCK. As of the Effective Time,
by virtue of the Merger and without any action on the part of any holder:
(a) COMMON STOCK OF SUB. Each share of the capital stock of Sub issued
and outstanding immediately prior to the Effective Time shall be converted into
and become one validly issued, fully paid and nonassessable share of common
stock, par value $0.005 per share, of the Surviving Corporation.
(b) CANCELLATION OF TREASURY STOCK AND PARENT-OWNED
STOCK. Each Share issued or outstanding immediately prior to the Effective
Time that is owned by the Company or by Parent or Sub shall be canceled
automatically and shall cease to
exist, and no cash or other consideration shall be delivered or deliverable in
exchange therefor.
(C) CONVERSION OF COMPANY SHARES. At the Effective Time, each Share
other than (i) Shares to be canceled pursuant to Section 3.1(b) and (ii)
Dissenting Shares (as hereinafter defined) shall be converted into and become
the right to receive, upon surrender of the certificate representing such Shares
in accordance with Section 3.3, the cash price per Share paid by Sub pursuant to
the Offer (the "Merger Consideration").
(d) DISSENTING SHARES. Notwithstanding anything in this Agreement to
the contrary, Shares issued and outstanding immediately prior to the Effective
Time and held by a holder (a "Dissenting Stockholder"), if any, who has the
right to demand, and who properly demands, an appraisal of such shares in
accordance with Section 85 of the MBCL or any successor provision ("Dissenting
Shares") shall not be converted into a right to receive the Merger Consideration
unless such Dissenting Stockholder fails to perfect or otherwise loses or
withdraws such Dissenting Stockholder's right to such appraisal, if any.
Provided the holder of any Dissenting Shares complies with the provisions of the
MBCL, such holder shall have with respect thereto solely the rights provided
under Sections 86 through 98, inclusive, of the MBCL. If, after the Effective
Time, such Dissenting Stockholder fails to perfect or otherwise loses or
withdraws any such right to appraisal, each such share of such Dissenting
Stockholder shall be treated as a share that had been converted as of the
Effective Time into the right to receive the Merger Consideration in accordance
with this Section 3.1. The Company shall give prompt notice to Parent of any
demands received by the Company for appraisal of any Dissenting Shares, and
Parent shall have the right to participate in and direct all negotiations and
proceedings with respect to such demands. The Company shall not, except with the
prior written consent of Parent, which consent shall not be unreasonably
withheld, make any payment with respect to, or settle or offer to settle, any
such demands.
(e) CANCELLATION AND RETIREMENT OF COMMON STOCK. As of the
Effective Time all certificates representing Shares, other than certificates
representing Shares to be canceled in accordance with Section 3.1(b) or
Dissenting Shares, issued and outstanding immediately prior to the Effective
Time, shall no longer be outstanding and shall automatically be canceled and
shall cease to exist, and each holder of a certificate representing any such
Shares shall cease to have any rights with respect thereto, except the right to
receive the Merger Consideration upon surrender of such certificate in
accordance with Section 3.3.
SECTION 3.2. STOCK OPTIONS. As of the Effective Time, each outstanding,
unexercised stock option to purchase Shares (a "Company Stock Option") issued
under the Company's Amended and Restated 1987 Stock Option Plan (the "1987
Plan"), the 1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"),
the 1993 Stock Option Plan for Non-Employee Directors (the "Director Plan") and
the 1997 Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock
Option Plans") shall terminate and be canceled and each holder of a Company
Stock Option shall be entitled to receive, in consideration therefor, a cash
payment from the Company (which payment shall be made as soon as practicable
after the Effective Time) equal to the product of (a) the excess, if any, of (x)
the Merger
Consideration over (y) the per Share exercise price of such Company Stock
Option, times (b) the number of Eligible Shares (as defined below) subject to
such Company Stock Option. Such cash payment shall be net of any required
withholding taxes. Notwithstanding the foregoing, any Director of the Company
who is not also an employee of the Company may make any payment of any taxes
incurred as a result of receipt of such cash payment and direct the Company not
to withhold any portion thereof, provided that any such Director agrees in
writing to indemnify the Company against any claim made against the Company for
the failure by such Director to make such tax payment. The term "Eligible
Shares" shall mean, (i) with respect to any Company Stock Option granted under
the 1987 Plan, the number of Shares subject to such option as to which such
option shall then be vested and exercisable as of the Effective Date, and (ii)
with respect to any Company Stock Option granted under the TARSOP, the Director
Plan or the 1997 Plan, the aggregate number of Shares that shall then be subject
to such option. The Company's obligation to make any such cash payment (1) shall
be subject to the obtaining of any necessary consents of optionees to the
cancellation of such Company Stock Options, i form and substance satisfactory to
Parent, and (2) shall not require any action which violates any of the Company
Stock Option Plans. As of the Effective Time, each of the Company Stock Option
Plans and the Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall
terminate and be of no further force or effect, and the Company shall take such
action as shall be necessary to ensure, to Parent's reasonable satisfaction,
that no holder of a Company Stock Option or participant in the ESPP will have
any right to acquire any interest in the Surviving Corporation under the Company
Stock Option Plans or the ESPP.
SECTION 3.3. EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. As of the Effective Time, Sub (or the Company, as
the Surviving Corporation) shall deposit, or shall cause to be deposited, with
or for the account of a bank, trust company or other agent designated by Sub,
which shall be reasonably satisfactory to the Company (the "Exchange Agent"),
for the benefit of the holders of Shares, cash in an aggregate amount equal to
the product of (x) the number of Shares outstanding immediately prior to the
Effective Time (other than Shares to be canceled pursuant to Section 3.1(b) and
Dissenting Shares), times (y) the Merger Consideration (such amount being
hereinafter referred to as the "Payment Fund"). The Exchange Agent shall invest
the Payment Fund as directed by the Surviving Corporation.
(b) EXCHANGE PROCEDURES. As soon as practicable after the Effective
Time, each holder of an outstanding certificate or certificates which prior
thereto represented outstanding Shares shall, upon surrender to the Exchange
Agent of such certificate or certificates and acceptance thereof by the Exchange
Agent, be entitled to the amount of cash which the aggregate number of Shares
previously represented by such certificate or certificates surrendered shall
have been converted into the right to receive pursuant to Section 3.1(c). The
Exchange Agent shall accept such certificates upon compliance with such
reasonable terms and conditions as the Exchange Agent may impose to effect an
orderly exchange thereof in accordance with normal exchange practices. If the
consideration to be paid in the Merger (or any portion thereof) is to be
delivered to any person other than the person in whose name the certificate
representing Shares surrendered in exchange therefor is
registered, it shall be a condition to such exchange that the certificate so
surrendered shall be properly endorsed with the signature guaranteed or
otherwise be in proper form for transfer and that the person requesting such
exchange shall pay to the Exchange Agent any transfer or other tax required by
reason of the payment of such consideration to a person other than the
registered holder of the certificate surrendered, or shall establish to the
satisfaction of the Exchange Agent that such tax has been paid or is not
applicable. After the Effective Time, there shall be no further transfer on the
records of the Company or its transfer agent of certificates representing
Shares, and if such certificates are presented to the Company for transfer, they
shall be canceled against delivery of the Merger Consideration as hereinabove
provided. Until surrendered as contemplated by this Section 3.3(b), each
certificate representing Shares shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender the Merger
Consideration, without any interest thereon, as contemplated by Section 3.l. No
interest will be paid or will accrue on any cash payable as Merger Consideration
to any holder of Shares.
(C) LETTER OF TRANSMITTAL. Promptly after the Effective Time (but in no
event more than five business days thereafter), the Surviving Corporation shall
require the Exchange Agent to mail to each record holder of certificates that
immediately prior to the Effective Time represented Shares which have been
converted pursuant to Section 3.1, a form of letter of transmittal and
instructions for use in surrendering such certificates and receiving the
consideration to which such holder shall be entitled therefor pursuant to
Section 3.1.
(d) NO FURTHER OWNERSHIP RIGHTS IN COMMON STOCK. The Merger
Consideration paid upon the surrender for exchange of certificates representing
Shares in accordance with the terms of this Article III shall be deemed to have
been issued and paid in full satisfaction of all rights pertaining to the Shares
theretofore represented by such certificates, and no holder of Shares shall
thereby have any equity interest in the Surviving Corporation.
(e) TERMINATION OF PAYMENT FUND. Any portion of the Payment Fund which
remains undistributed to the holders of the certificates representing Shares for
one year after the Effective Time (including, without limitation, all interest
and other income received by the Exchange Agent in respect to all funds made
available to it) shall be delivered to the Surviving Corporation, upon demand,
and any such holders of Shares who have not theretofore complied with this
Article III shall thereafter look only to the Surviving Corporation (subject to
abandoned property, escheat and other similar laws) and only as general
creditors thereof for payment of their claim for the Merger Consideration.
(f) NO LIABILITY. None of Parent, Sub, the Surviving Corporation or the
Exchange Agent shall be liable to any person in respect of any cash, shares,
dividends or distributions payable from the Payment Fund delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
If any certificates representing Company Shares shall not have been surrendered
prior to five years after the Effective Time (or immediately prior to such
earlier date on which the Merger Consideration in respect of such certificate
would otherwise escheat to or become the property of any Governmental Entity
(as defined in Section 4.1(d)), any such cash, shares, dividends or
distributions payable in respect of such certificate shall, to the extent
permitted by applicable law, become the property of the Surviving Corporation,
free and clear of all claims or interest of any person previously entitled
thereto.
(g) WITHHOLDING RIGHTS. The Surviving Corporation, Parent or Sub shall
be entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of Shares such amounts as the Surviving
Corporation, Parent or Sub is required to deduct and withhold with respect to
the making of such payment under the Code, or any provision of state, local or
foreign tax law, including, without limitation, withholdings required in
connection with payments with respect to Company Stock Options. To the extent
that amounts are so withheld by the Surviving Corporation, Parent or Sub, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder in respect of which such deduction and withholding was
made.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to Parent and Sub as follows:
(a) ORGANIZATION, STANDING AND CORPORATE POWER. The Company
is a corporation duly organized, validly existing and in corporate good standing
under the laws of The Commonwealth of Massachusetts and has the requisite
corporate power and authority and any necessary governmental authority to carry
on its business as now being conducted and to own, operate and lease its
properties. The Company is duly qualified or licensed to do business and is in
good standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so qualified
or licensed (individually or in the aggregate) would not have a material adverse
effect upon (i) the business, assets, properties, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries taken as
a whole, or (ii) the transactions contemplated hereby or the legality or
validity of this Agreement (a "Material Adverse Effect"). The Company has
delivered to Parent complete and correct copies of its Restated Articles of
Organization and Restated By-laws, as amended to the date of this Agreement.
(b) SUBSIDIARIES. Section 4.l(b) of the disclosure schedule attached
hereto (the "Disclosure Schedule") sets forth the name, jurisdiction of
incorporation, capitalization and number of shares of outstanding capital stock
of each of the Company's Subsidiaries. All the issued and outstanding shares of
capital stock of each Subsidiary are validly issued, fully paid and
nonassessable and are owned, directly or indirectly, by the Company,
beneficially and of record, free and clear of all liens, pledges, encumbrances
or restrictions of any kind. No Subsidiary has outstanding any securities
convertible into or exchangeable or exercisable for
any shares of its capital stock, there are no outstanding options, warrants or
other rights to purchase or acquire any capital stock of any Subsidiary, there
are no irrevocable proxies with respect to such shares, and there are no
contracts, commitments, understandings, arrangements or restrictions by which
any Subsidiary or the Company is bound to issue additional shares of the capital
stock of a Subsidiary. Except for the Company's Subsidiaries, and as otherwise
disclosed in Section 4.1(b) of the Disclosure Schedule, the Company does not
own, directly or indirectly, any capital stock or other equity securities of any
corporation or have any direct or indirect equity interest in any business. Each
of the Company's Subsidiaries (a) is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation; (b) has all requisite corporate power and authority and any
necessary governmental authority to carry on its business as it is now being
conducted and to own, operate and lease its properties, except where the failure
to have such governmental authority would not have a Material Adverse Effect;
and (c) is qualified or licensed to do business as a foreign corporation and is
in good standing in each of the jurisdictions in which (i) the ownership or
leasing of real property or the conduct of its business requires such
qualification or licensing and (ii) the failure to be so qualified or licensed,
either singly or in the aggregate, would have a Material Adverse Effect. The
Company has delivered to Parent complete and correct copies of the Articles of
Organization or other charter documents and By-laws of each of its Subsidiaries,
each as amended to date.
(C) CAPITALIZATION. As of the date hereof, the authorized capital stock
of the Company consists of 200,000 shares of Preferred Stock, $0.01 par value
per share ("Preferred Stock"), and 15,000,000 shares of Common Stock. As of the
date hereof, there are no shares of Preferred Stock issued or outstanding. As of
the date hereof, 8,908,621 Shares are issued and outstanding, 521,050 shares of
Common Stock are reserved for issuance pursuant to outstanding Company Stock
Options, and no shares of Common Stock are held by the Company in its treasury.
Except as set forth above, no shares of capital stock or other equity securities
of the Company are issued, reserved for issuance or outstanding. All outstanding
shares of capital stock of the Company are, and all shares which may be issued
pursuant to the Company Stock Option Plans will be, when issued, duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights. Section 4.1(c) of the Disclosure Schedule accurately sets
forth the number of Shares issuable upon exercise of each outstanding Company
Stock Option, the vesting schedule thereof, and the applicable exercise price
with respect to each such Company Stock Option. Except as set forth in Section
4.1(c) of the Disclosure Schedule, the Company has no outstanding option,
warrant, subscription or other right, agreement or commitment which either (i)
obligates the Company to issue, sell or transfer, repurchase, redeem or
otherwise acquire or vote any shares of the capital stock of the Company or (ii)
restricts the transfer of Common Stock. Except as set forth in Section 4.l(c) of
the Disclosure Schedule, the Company has no outstanding stock appreciation
rights, phantom stock or stock equivalents.
(d) AUTHORITY; ENFORCEABILITY; NONCONTRAVENTION. The
Company has the requisite corporate power and authority to enter into this
Agreement and, subject to the approval of its stockholders as set forth in
Section 7.1(a) with respect to the consummation of the Merger, to consummate the
Merger and the other transactions
contemplated by 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 to the approval of its stockholders as set forth in
Section 7.1(a). This Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except that the
enforceability hereof may be subject to bankruptcy, matters referred to in the
following sentence, contravene any law, rule or regulation of any s insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. The execution and delivery of this Agreement
do not, and the consummation of the transactions contemplated by this Agreement
and compliance with the provisions hereof will not, (i) violate any of the
provisions of the Restated Articles of Organization or Restated By-laws of the
Company, (ii) except as otherwise set forth in Section 4.1(d) of the Disclosure
Schedule and subject to the governmental filings and other state or of the
United States or any political subdivision thereof or therein, including any
licensing board or agency, or any order, writ, judgment, injunction, decree,
determination or award currently in effect, or (iii) except for leases requiring
Landlord Consents as defined below in Section 6.11 and the existing Revolving
Credit and Term Loan Agreement among the Company, certain of its Subsidiaries
and The First National Bank of Boston (the "Company Credit Agreement"), violate,
conflict with or constitute a breach under any contract, agreement, indenture,
mortgage, deed of trust, lease or other instrument to which the Company or any
of its Subsidiaries is a party or by which any of its assets is bound or
subject, which, in the case of clauses (ii) and (iii) above, singly or in the
aggregate, would have a Material Adverse Effect or prevent consummation of the
transactions contemplated hereby. No consent, approval or authorization of, or
declaration or filing with, or notice to, any governmental agency, board or
regulatory authority, domestic or foreign (a "Governmental Entity"), which has
not been received or made, is required by or with respect to the Company or any
Subsidiary in connection with the execution and delivery of this Agreement by
the Company or the consummation by the Company of the transactions contemplated
hereby, except for (i) compliance with any applicable requirements of the
Exchange Act and the rules and regulations promulgated thereunder, (ii) state
securities or blue sky laws and state takeover, antitrust and compensation law
filings and approvals, (iii) compliance with any applicable requirements of The
Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of 1976, as amended (the "HSR Act"),
(iv) the filing of articles of merger with the Massachusetts Secretary of State
and appropriate documents with the relevant authorities of other states in which
the Company is qualified to do business, and (v) such other consents, approvals,
authorizations, filings or notices as are set forth in Section 4.1(d) of the
Disclosure Schedule. Neither the Company nor any of its Subsidiaries is a party
or subject to, or bound by, any contract, agreement, indenture, mortgage, deed
of trust, lease or other instrument which prevents or restricts its power and
authority or its ability to guarantee obligations of third parties or pay
dividends on its capital stock, except for the Company Credit Agreement.
(e) FINANCIAL STATEMENTS; SEC REPORTS. The Company has previously
furnished Parent and Sub with true and complete copies of (i) its Annual Reports
on Form 10-K for the fiscal years ended December 28, 1996 (the "1996 Annual
Report") and December 27, 1997 (the "1997 Annual Report and, together with the
1996 Annual Report, the "Annual Reports") filed by the Company with the SEC,
(ii) its Quarterly Reports on Form 10-Q for the quarters ended April 19, July 12
and October 4, 1997 (collectively, the "Quarterly Reports" and, together with
the Annual Reports, the "Reports") filed by the Company with the SEC, (iii) the
unaudited consolidated balance sheet and the unaudited consolidated statement of
operations of the Company and its Subsidiaries as at April 18, 1998 and for the
16 weeks ended April 18, 1998, respectively (the "April 1998 Financial
Statements"), (iv) proxy statements relating to all of the Company's meetings of
stockholders (whether annual or special) held or scheduled to be held since
December 28, 1996 and (v) each other registration statement, proxy or
information statement or current report on Form 8-K filed since December 28,
1996 by the Company with the SEC. Since December 24, 1992, the Company has
complied in all material respects with its SEC filing obligations under the
Exchange Act and the Securities Act of 1933, as amended (the "Securities Act").
The financial statements and related schedules and notes thereto of the Company
contained in the Reports (or incorporated therein by reference) and the April
1998 Financial Statements were prepared in accordance with generally accepted
accounting principles (except, in the case of interim unaudited financial
statements, as permitted by Form 10-Q) applied on a consistent basis except as
noted therein, and fairly present in all material respects the consolidated
financial position of the Company and its consolidated Subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended, subject (in the case of interim unaudited financial
statements) to normal year-end audit adjustments, and such financial statements
complied as to form as of their respective dates in all material respects with
applicable rules and regulations of the SEC. Each such registration statement,
proxy statement and Report was prepared in accordance with the requirements of
the Securities Act or the Exchange Act and did not, on the date of effectiveness
in the case of such registration statements, on the date of mailing in the case
of such proxy statements and on the date of filing in the case of such Reports,
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(f) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as may be
disclosed in the Reports or as otherwise disclosed in Section 4.1(f) of the
Disclosure Schedule, since December 27, 1997 there has not been (i) any
declaration, setting aside or payment of any dividend or other distribution in
respect of the capital stock of the Company or any redemption or other
acquisition by the Company of any of its capital stock; (ii) any issuance by the
Company, or agreement or commitment of the Company to issue, any shares of its
Common Stock or securities convertible into or exchangeable for shares of its
Common Stock, except for stock options and stock purchase rights set forth in
Section 4.1(c) of the Disclosure Schedule; (iii) any change by the Company in
accounting methods, principles or practices except as required by generally
accepted accounting principles; (iv) any increase in wage or bonus, severance,
profit sharing, retirement, deferred compensation, insurance or other
compensation or benefits or any new compensation or benefit plans or
arrangements or any
amendments to any Company Benefit Plans (as hereinafter defined) existing on
December 27, 1997, other than bonus payments made in the ordinary course of
business consistent with past practice; or (v) any agreement or commitment,
whether in writing or otherwise, to take any action described in this subsection
4.1(f). Since December 27, 1997, the Company and its Subsidiaries have conducted
their respective businesses in all material respects only in the ordinary
course, consistent with past custom and practice, except as contemplated by this
Agreement. Since February 13, 1998, the Company and its Subsidiaries have
complied with all of the covenants and agreements applicable to the Company and
its Subsidiaries under the Agreement and Plan of Merger dated as of February 13,
1998 among the Company, Ten Ideas, Inc. and Ten Ideas Acquisition, Corp. (the
"Ten Ideas Merger Agreement"), including the provisions of Article IV thereof,
without the necessity of obtaining any consent or waivers from Ten Ideas, Inc.
or Ten Ideas Acquisition Corp.
(g) NO UNDISCLOSED LIABILITIES. Except as set forth in the Reports,
neither the Company nor any of its Subsidiaries has any liabilities (absolute,
accrued, contingent or otherwise), except liabilities (i) in the aggregate
adequately provided for in the Company's audited balance sheet (including any
related notes thereto) for the fiscal year ended December 27, 1997 included in
the 1997 Annual Report (the "1997 Balance Sheet"), (ii) incurred in the ordinary
course of business and not required under generally accepted accounting
principles to be reflected on the 1997 Balance Sheet, (iii) incurred since
December 27, 1997 in the ordinary course of business consistent with past
practice, (iv) incurred in connection with this Agreement or (v) which could not
reasonably be expected to have a Material Adverse Effect.
(h) COMPLIANCE WITH LAWS. The business of the Company and each of the
Subsidiaries has been operated at all times in material compliance with all
applicable statutes, laws, rules, regulations, permits, licenses, orders,
injunctions and judgments (collectively, "Laws"), including, without limitation,
any applicable Laws regulating environmental matters, immigration, wages and
hours, working conditions or health and safety, except for such violations or
failures to comply that, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect nor have a material adverse effect
on the Financing.
(I) LITIGATION. Except as set forth in Section 4.1(i) of the Disclosure
Schedule or otherwise disclosed in the Reports, there is no suit, action or
proceeding pending or, to the knowledge of the Company, threatened against the
Company or any of its Subsidiaries which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, nor is there any
judgment, decree, injunction, rule or order of any Governmental Entity
outstanding against the Company or any of its Subsidiaries which, individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
(j) DISCLOSURE DOCUMENTS.
(I) Each document required to be filed by the Company with the SEC in
connection with the transactions contemplated by this Agreement (the "Company
Disclosure Documents"), including, without limitation, the Schedule 14D-9, the
proxy or information
statement of the Company (the "Company Proxy Statement"), if any, to be filed
with the SEC in connection with the Merger, and any amendments or supplements
thereto, will, when filed, comply as to form in all material respects with the
applicable requirements of the Exchange Act and the rules and regulations
thereunder.
(ii) At the time the Company Proxy Statement or any amendment or
supplement thereto is first mailed to stockholders of the Company, at the time
such stockholders vote on adoption of this Agreement and approval of the Merger
and at the Effective Time, the Company Proxy Statement, as supplemented or
amended, if applicable, will not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading. At the time of the filing of any Company Disclosure Document other
than the Company Proxy Statement, at the time of any distribution thereof and
throughout the remaining pendency of the Offer, each such Company Disclosure
Document will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading. The
representations and warranties contained in paragraphs (i) and (ii) of this
Section 4.1(j) will not apply to statements or omissions included in the Company
Disclosure Documents or the Company Proxy Statement, if any, based upon
information furnished to the Company in writing by Parent or Sub specifically
for use therein.
(iii) The information with respect to the Company or any
Company Subsidiary that the Company furnishes to Parent or Sub in writing
specifically for use in the Offer Documents will not, at the time of the filing
thereof, at the time of any distribution thereof and throughout the remaining
pendency of the Offer, 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 the light of the circumstances under
which they were made, not misleading.
(k) TERMINATION OF PRIOR MERGER AGREEMENT; BOARD RECOMMENDATION. The
Company's Board of Directors has (i) terminated the Ten Ideas Merger Agreement
pursuant to Section 7.1(c) thereof and (ii) taken the actions specified in the
first sentence of Section 1.2(a).
(l) FAIRNESS OPINION. The Board of Directors has received from the
Financial Advisor an oral opinion as of the date hereof, to be followed with a
written opinion to be dated the date hereof, in connection with this Agreement
to the effect that the consideration to be received by the stockholders of the
Company pursuant to the Offer and the Merger is fair to such stockholders from a
financial point of view and such written opinion has not been withdrawn or
modified.
(m) BROKERS. No broker, investment banker, financial advisor or other
person, the fees and expenses of which will be paid by the Company, is entitled
to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the
transactions contemplated by this Agreement, other than pursuant to an
engagement letter with the Financial Advisor, a copy of which has been furnished
to Parent.
(n) EMPLOYEE BENEFIT MATTERS. All employee benefit plans and other
benefit arrangements covering employees of the Company and/or of the
Subsidiaries (collectively, the "Benefit Plans") are listed in Section 4.1(n) of
the Disclosure Schedule. True and complete copies of the Benefit Plans have been
made available to Parent and Sub. To the extent applicable, to the Company's
knowledge, the Benefit Plans comply in all material respects with the
requirements of the Employee Retirement Income Security Act of 1974, as amended
and the rules and regulations promulgated thereunder ("ERISA"), the Internal
Revenue Code of 1986, as amended (the "Code"), and any Benefit Plan intended to
be qualified under Section 401(a) of the Code has been determined by the United
States Internal Revenue Service to be so qualified. To the Company's knowledge,
no Benefit Plan is covered by Title IV of ERISA or Section 412 of the Code.
Neither the Company nor any Subsidiary, respectively, has incurred any liability
or penalty under Section 4975 of the Code or Section 502(i) of ERISA with
respect to any Benefit Plan, except as would not have a Material Adverse Effect.
Each Benefit Plan has been maintained and administered in all material respects
in compliance with its terms and with ERISA and the Code to the extent
applicable thereto and each Benefit Plan that is a "group health plan" as
defined in Section 607(1) of ERISA, has been operated in compliance with the
provisions of Part 6 of Title I of ERISA and Sections 162(k) and 4980B of the
Code. To the knowledge of the Company, there are no pending, nor has the Company
or any Subsidiary received written notice of any threatened, claims against or
otherwise involving any of the Benefit Plans, except as would not have a
Material Adverse Effect. To the Company's knowledge, all material contributions
required to be made as of the date this Agreement to the Benefit Plans have been
made or provided for. Neither the Company nor any Subsidiary, respectively, nor
any entity under "common control" with the Company and/or of the Subsidiaries
within the meaning of Section 4001 of ERISA has contributed to, or been, to the
Company's knowledge, required to contribute to, any "multiemployer plan" (as
defined in Sections 3 (37) and 4001(a)(3) of ERISA). Neither the Company nor any
Subsidiary has any present or future obligation to make any payment to or under
any "employee welfare plan" (as defined in Section 3(1) of ERISA, "ERISA Welfare
Plan") which provides benefits to retirees. No condition exists, to the
Company's knowledge, which would prevent the Company or any Subsidiary from
amending or terminating any ERISA Welfare Plan.
(o) TAXES. Except as disclosed in the Reports or in Section 4.1(o) of
the Disclosure Schedule, each of the Company and the Subsidiaries (i) has timely
filed all federal, state and foreign Tax Returns required to be filed by the
Company and each Subsidiary, respectively, for Tax years ended prior to the date
of this Agreement and all such Tax Returns are correct and complete in all
material respects, (ii) has timely paid, withheld or accrued all Taxes shown to
be due and payable on such Tax Returns, (iii) has accrued all Taxes for such
periods subsequent to the periods covered by such Tax Returns ending on or prior
to the date hereof and (iv) has "open" years for federal, state, local and
foreign income Tax Returns only as set forth in the Reports or in Section 4.1(o)
of the Disclosure Schedule. There are no liens for Taxes on the assets of the
Company or the Subsidiaries except for liens for current Taxes
not yet due, and, except as set forth in the Reports or in Section 4.1(o) of the
Disclosure Schedule, there is no pending, nor has the Company or any Subsidiary
received written notice of any threatened, Tax audit, examination, refund
litigation or adjustment in controversy. Neither the Company nor any Subsidiary
is a party to any agreement providing for the allocation or sharing of Taxes.
All Taxes which each of the Company and the Subsidiaries has been required to
collect or withhold have been duly collected or withheld and to the extent
required when due, have been or will be duly and timely paid to the proper
taxing authority.
As used in the foregoing paragraph, (a) "Taxes" shall mean (i) all
taxes, charges, fees, levies or other assessments, including, without
limitation, income, gross receipts, excise, real and personal property, sales,
transfer, license, payroll and franchise taxes, imposed by the United States, or
any state, county, local or foreign government or subdivision or agency thereof;
and such term shall include any interest, penalties or additions to tax
attributable to such taxes, charges, fees, levies or other assessments and any
obligations under any agreement or arrangements with any other person with
respect to such amounts and including any liability for taxes of a predecessor
entity and (ii) all obligations, including joint and several liability pursuant
to the law of any jurisdiction or otherwise, for the payment of any of the types
of taxes referred to in clause (i) of this definition as a result of being a
member of an affiliated, consolidated, combined or unitary group for any taxable
period and (b) "Tax Returns" shall mean any report, return or other information
required to be supplied to any taxing authority in connection with Taxes.
SECTION 4.2. REPRESENTATIONS AND WARRANTIES OF PARENT AND
SUB. Parent and Sub represent and warrant to the Company as follows:
(a) ORGANIZATION, STANDING AND CORPORATE POWER. Parent is a corporation
duly organized, validly existing and in corporate good standing under the laws
of the State of Delaware. Sub is a corporation duly organized, validly existing
and in corporate good standing under the laws of The Commonwealth of
Massachusetts. Each of Parent and Sub has the requisite corporate power and
authority to carry on its business as now being conducted. Each of Parent and
Sub is duly qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed
(individually or in the aggregate) would not have a Material Adverse Effect.
(b) CAPITALIZATION. As of the date of this Agreement, the authorized
capital stock of Parent consists of 6,000,000 shares of common stock, par value
$0.01 per share, 1,316,656 shares of which are presently issued and outstanding.
As of the date of this Agreement, the authorized capital stock of Sub consists
of 1,000 shares of common stock, par value $0.01 per share, 1,000 shares of
which are presently issued and outstanding, which constitutes all of the issued
and outstanding capital stock of Sub. All of the issued and outstanding shares
of capital stock of Parent and Sub are validly issued, fully paid and
nonassessable.
(C) AUTHORITY; ENFORCEABILITY; NONCONTRAVENTION. Parent and Sub have
all requisite corporate power and authority to enter into this Agreement and to
consummate the Merger and the other transactions contemplated by this Agreement.
The execution and delivery of this Agreement by Parent and Sub and the
consummation by Parent and Sub of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action on the
part of Parent and Sub. This Agreement has been duly executed and delivered by
and constitutes a valid and binding obligation of each of Parent and Sub,
enforceable against such party in accordance with its terms, except that the
enforceability hereof may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought. The execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated by this Agreement and compliance
with the provisions of this Agreement will not (i) violate any of the provisions
of the charter documents or By-laws of Parent or Sub, (ii) subject to the
governmental filings and other matters referred to in the following sentence,
contravene any law, rule or regulation of any state or of the United States or
any political subdivision thereof or therein, or any order, writ, judgment,
injunction, decree, determination or award currently in effect, or (iii) except
for the Parent's existing credit agreement with BankBoston, N.A. (the "Parent
Credit Agreement") which, together with the Company Credit Agreement, is to be
refinanced with a portion of the proceeds of the Financing as defined below in
Section 4.2(d), violate, conflict with or constitute a breach under any
contract, agreement, indenture, mortgage, deed of trust, lease or other
instrument to which Parent or any of its Subsidiaries is a party or by which any
of their assets is bound or subject, which, in the case of clauses (ii) and
(iii) above, singly or in the aggregate, would have a material adverse effect on
the business, financial condition or results of operations of Parent and Sub
taken as a whole or prevent consummation of the transactions contemplated
hereby. No consent, approval or authorization of, or declaration or filing with,
or notice to, any Governmental Entity which has not been received or made is
required by or with respect to Parent or Sub in connection with the execution
and delivery of this Agreement by Parent or Sub or the consummation by Parent or
Sub, as the case may be, of any of the transactions contemplated by this
Agreement, except for (i) compliance with any applicable requirements of the
Exchange Act and the rules and regulations promulgated thereunder, (ii) state
securities or blue sky laws and state takeover, antitrust and competition law
filings and approvals, (iii) compliance with any applicable requirements of the
HSR Act, (iv) the filing of the articles of merger with the Massachusetts
Secretary of State and appropriate documents with the relevant authorities of
other states in which the Company is qualified to do business, and (iii) such
other consents, approvals, authorizations, filings or notices as are set forth
in Section 4.1(d) of the Disclosure Schedule. Neither Parent nor any of its
Subsidiaries is a party or subject to, or bound by, any contract, agreement,
indenture, mortgage, deed of trust, lease or other instrument which would
prevent or restrict its power and authority or ability to borrow under the
"Interim Facility" (as defined below in Section 4.2(d), guarantee obligations of
third parties or pay dividends on its capital stock, except for the Parent
Credit Agreement and except that pursuant to the Loan Agreement made as of
August 6, 1997, as amended, between FFCA Acquisition Corporation and NERC
Limited Partnership, a Delaware limited
partnership which is a Subsidiary of Parent ("NERC LP"), NERC LP is prohibited
from guaranteeing obligations of third parties.
(d) FINANCING. Parent and Sub have received (i) a written commitment
from The Chase Manhattan Bank and BankBoston, N.A. (collectively, the "Banks")
for the provision of a senior credit facility (the "Interim Facility") for the
transactions contemplated hereby, on or prior to the Closing Date, in an amount
of at least $90 million as interim financing if Parent is unable to issue prior
to July 31, 1998 at least $90 million principal amount of senior unsecured notes
(the "Senior Notes") in a public offering or a Rule 144A private placement as
contemplated by such commitment , (ii) written commitments from stockholders of
Parent to subscribe for an aggregate of at least $21.5 million of equity
securities of Parent in connection with a rights offering made to stockholders
of Parent totaling $40 million of such equity securities to finance the
transactions contemplated hereby and (iii) a written commitment from JP
Acquisition Fund II, L.P. ("JPAF"), to subscribe for up to $18.5 million of such
equity securities of Parent. The aggregate of $130 million of financing (the
"Financing") contemplated by the commitments from the Banks and from
stockholders of Parent and from JPAF (collectively, the "Commitments"), will be
sufficient to consummate the Offer and the Merger. True and correct copies of
the Commitments have been provided to the Company prior to the date hereof.
(e) DISCLOSURE DOCUMENTS.
(I) The information with respect to Parent and its
Subsidiaries that Parent furnishes to the Company in writing specifically for
use in any Company Disclosure Document 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 made therein, in the light of the
circumstances under which they were made, not misleading (i) in the case of the
Company Proxy Statement, if any, at the time the Company Proxy Statement or any
amendment or supplement thereto is first mailed to stockholders of the Company,
at the time the stockholders vote on adoption of this Agreement and at the
Effective Time, and (ii) in the case of any Company Disclosure Document other
than the Company Proxy Statement, at the time of the filing thereof, at the time
of any distribution thereof and throughout the remaining pendency of the Offer.
(ii) The Offer Documents will comply in all material respects
with the applicable requirements of the Exchange Act and will not, at the time
of the filing thereof, at the time of any distribution thereof and throughout
the remaining pendency of the Offer contain any untrue statement of material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements made therein, in the light of the circumstances
under which they were made, not misleading; provided, that no representation is
made by Parent or Sub with respect to statements or omissions in the Offer
Documents based upon information furnished to Parent or Sub in writing by the
Company specifically for use therein.
(f) BROKERS. No broker, investment banker, financial advisor or other
person, the fees and expenses of which will be paid by Parent or Sub, is
entitled to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated by this Agreement,
except for fees payable to Xxxxxxxx Partners and fees and expenses payable to
the Banks, Chase Securities Inc., BancBoston Securities Inc., Xxxxxxxxx, Xxxxxx
& Xxxxxxxx Securities Corporation and Xxxxxxxx Partners, which fees and expenses
shall remain the sole responsibility of Parent and Sub.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
PRIOR TO MERGER
SECTION 5.1. CONDUCT OF BUSINESS OF THE COMPANY. Except as contemplated
by this Agreement, during the period from the date of this Agreement to the
Effective Time, the Company shall operate, and shall cause each Subsidiary to
operate, its business in the ordinary course of business. Without limiting the
generality of the foregoing, during the period from the date of this Agreement
to the Effective Time, except as expressly contemplated by this Agreement, the
Company and the Subsidiaries shall not, without the prior written consent of
Parent:
(I) (x) declare, set aside or pay any dividends on, or make any other
distributions (whether in cash, stock or property) in respect of, any of the
Company's outstanding capital stock, (y) split, combine or reclassify any of its
outstanding capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
outstanding capital stock, or (z) purchase, redeem or otherwise acquire any
shares of outstanding capital stock or any rights, warrants or options to
acquire any such shares;
(ii) issue, sell, grant, pledge or otherwise encumber any shares of its
capital stock, any other voting securities or any securities convertible into,
or any rights, warrants or options to acquire, any such shares, voting
securities or convertible securities, including under the ESPP, except for the
issuance of Shares upon exercise of Company Stock Options outstanding prior to
the date of this Agreement and disclosed in Section 4.1(c), or take any action
that would make the Company's representations and warranties set forth in
Section 4.l(c) not true and correct in all material respects;
(iii) amend its Restated Articles of Organization or
Restated By-laws or the comparable charter or organizational documents of any
of its Subsidiaries;
(iv) acquire any business or any corporation, partnership, joint
venture, association or other business organization or division thereof (or any
interest therein), or form any subsidiaries;
(v) sell or otherwise dispose of any of its substantial assets,
except in the ordinary course of business;
(vi) make any capital expenditures, enter into leases or agreements for
new locations, or make other commitments with respect thereto, except capital
expenditures, leases, agreements or commitments (i) set forth on Section 5.1(vi)
of the Disclosure Schedule, or (ii) not exceeding $100,000 in the aggregate as
the Company may, in its discretion, deem appropriate;
(vii) (x) incur any indebtedness for borrowed money or guaranty any
such indebtedness of another person, other than (A) borrowings in the ordinary
course under existing lines of credit (or under any refinancing of such existing
lines), (B) indebtedness owing to, or guaranties of indebtedness owing to, the
Company or (C) in connection with the Financing, or (y) make any loans or
advances to any other person, other than routine advances to employees;
(viii) except as disclosed in Section 4.1(f) of the Disclosure
Schedule, grant or agree to grant to any employee any increase in wages or
bonus, severance, profit sharing, retirement, deferred compensation, insurance
or other compensation or benefits, or establish any new compensation or benefit
plans or arrangements, or amend or agree to amend any existing Company Plans,
except as may be required under existing agreements or in the ordinary course of
business consistent with past practices;
(ix) merge, amalgamate or consolidate with any other person or entity
in any transaction, sell all or substantially all of its business or assets, or
acquire all or substantially all of the business or assets of any other person
or entity;
(x) except as disclosed in Section 4.1(f) of the Disclosure Schedule,
enter into or amend any employment, consulting, severance or similar agreement
with any person or amend the engagement letter with the Financial Advisor
referred to in Section 4.1(l) hereof;
(xi) change its accounting policies in any material respect,
except as required by generally accepted accounting principles;
(xii) except as set forth in Section 4.1(f) of the Disclosure Schedule,
enter into any material contract, agreement or commitment (other than purchase
agreements for food and beverages and restaurant supplies entered into in the
ordinary course of business) not otherwise permitted under this Section 5.1,
including, without limitation, any contract, agreement or commitment involving
expenditures by the Company or any of its Subsidiaries in excess of $50,000 or
which is not terminable by the Company upon giving 30 days of less prior written
notice; or
(xiii) commit or agree to take any of the foregoing actions.
SECTION 5.2. OTHER ACTIONS. The Company, Parent and Sub shall not take
any action that would, or that could reasonably be expected to, result in (i)
any of the representations and warranties of such party set forth in this
Agreement that are qualified as to materiality becoming untrue, (ii) any of such
representations and warranties that are not so qualified becoming untrue in any
material respect or (iii) any of the conditions of the Offer set forth in Annex
I or of the Merger set forth in Article VII not being satisfied.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.1. MEETING OF STOCKHOLDERS. Following the expiration of the
Offer, the Company will promptly take all action necessary in accordance with
applicable law and its Restated Articles of Organization and Restated By-laws to
duly call, give notice of, and convene a meeting of its stockholders (the
"Stockholders' Meeting") to consider and vote upon the adoption and approval of
this Agreement and the Merger and all actions contemplated hereby which require
approval and adoption by the Company's stockholders unless the Merger may be
effected pursuant to Section 82 of the MBCL; provided, however, that the
obligations contained herein shall be subject to the provisions of Section 6.8.
Parent shall agree to cause all of the shares of capital stock of the Company
held by Parent and/or Sub to be voted, either in person or by proxy, in favor of
the adoption and approval of this Agreement and the Merger at the Stockholders'
Meeting.
SECTION 6.2. PROXY STATEMENT.
(a) In connection with the Stockholders' Meeting contemplated hereby,
as promptly as practicable after Offeror first purchased Shares pursuant to the
Offer and if required by applicable law, the Company will promptly prepare and
file, and Parent will cooperate with the Company in the preparation and filing
of, a preliminary Company Proxy Statement (the "Preliminary Proxy Statement")
with the SEC and will use its commercially reasonable best efforts to respond to
the comments of the SEC concerning the Preliminary Proxy Statement and to cause
the Company Proxy Statement to be mailed to the Company's stockholders, in each
case as soon as reasonably practicable. The Company shall pay the filing fees
for the Preliminary Proxy Statement. Each party to this Agreement will notify
the other parties promptly of the receipt of the comments of the SEC, if any,
and of any request by the SEC for amendments or supplements to the Preliminary
Proxy Statement or the Company Proxy Statement or for additional information,
and will supply the other parties with copies of all correspondence between such
party or its representatives, on the one hand, and the SEC or members of its
staff, on the other hand, with respect to the Preliminary Proxy Statement, the
Company Proxy Statement or the Merger.
(b) If at any time prior to the Stockholders' Meeting, any event should
occur relating to the Company or any of the Subsidiaries which should be set
forth in an amendment of, or a supplement to, the Company Proxy Statement, the
Company will promptly inform
Parent. If at any time prior to the Stockholders' Meeting, any event should
occur relating to Parent or Sub or any of their respective Associates or
Affiliates, or relating to the plans of any such persons for the Surviving
Corporation after the Effective Time of the Merger, or relating to the
Financing, that should be set forth in an amendment of, or a supplement to, the
Company Proxy Statement, the Company, with the cooperation of Parent, will, upon
learning of such event, promptly prepare, file and, if required, mail such
amendment or supplement to the Company's stockholders; provided that, prior to
such filing or mailing, the Company shall consult with Parent with respect to
such amendment or supplement and shall afford Parent reasonable opportunity to
comment thereon.
(C) Parent will furnish to the Company the information relating to
Parent and Sub, their respective Associates and Affiliates and the plans of such
persons for the Surviving Corporation after the Effective Time of the Merger,
and relating to the Financing, which is required to be set forth in the
Preliminary Proxy Statement or the Company Proxy Statement under the Exchange
Act and the rules and regulations of the SEC thereunder. The Company shall cause
to be included as an exhibit to the Preliminary Proxy Statement and the Company
Proxy Statement, the fairness opinion of the Financial Advisor referred to in
Section 4.1(l).
SECTION 6.3. ACCESS TO INFORMATION; CONFIDENTIALITY. From and after the
date hereof, the Company will provide to Parent reasonable access, upon notice
and during normal business hours, to the Company's facilities, books and records
and shall cause the directors, employees, accountants, attorneys, financial
advisors, lenders and other agents and representatives (collectively,
"Representatives") of the Company to continue to cooperate fully with Parent and
Parent's Representatives in order to enhance such persons' knowledge of the
Company's assets, contracts, liabilities, operations, records and other aspects
of its business (including any environmental investigation of the Company's
facilities) and the efforts of Parent and Sub to secure the Financing as
described in Section 4.2(d). Parent shall, and shall cause Parent's
Representatives to, keep all information supplied or made available to Parent
hereunder in confidence and shall not disclose the same to any party other than
its Representatives on a "need to know" basis and only for purposes of
evaluating the Merger and the Financing. Parent will not use such information
except for evaluating the Merger and in connection with procurement of the
Financing. If the Merger is not consummated and this Agreement is terminated in
accordance with its terms, Parent shall return any information provided
hereunder.
SECTION 6.4. COMMERCIALLY REASONABLE EFFORTS. Upon the terms and
subject to the conditions and other agreements set forth in this Agreement, each
of the parties agrees to use commercially reasonable efforts to take, or cause
to be taken, all actions, and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Offer, the Merger and the other transactions contemplated by
this Agreement, including the satisfaction of the respective conditions set
forth in Annex I and Article VII; provided that nothing herein shall be deemed
to require the Company or any of its Subsidiaries to participate in any meetings
with prospective investors in connection with the sale of any securities
constituting a part of the Financing described in Section 4.2(d).
SECTION 6.5. FINANCING. Each of Parent and Sub shall use commercially
reasonable best efforts to close the Financing on terms consistent with the
Commitments or such other terms as shall be satisfactory to them and to execute
and deliver definitive agreements with respect to the Financing (the "Definitive
Financing Agreements") on or before the Closing Date. Parent and Sub shall use
commercially reasonable best efforts to satisfy on or before the Closing Date
all requirements of the Definitive Financing Agreements which are conditions to
closing the transactions constituting the Financing and to drawing the cash
proceeds thereunder. The obligations contained herein are not intended, nor
shall they be construed, to benefit or confer any rights upon any person, firm
or entity other than the Company.
SECTION 6.6. INDEMNIFICATION; DIRECTORS' AND OFFICERS'
INSURANCE.
(a) From and after the Effective Time, Parent shall cause the Surviving
Corporation to indemnify and hold harmless each person who is now, at any time
has been or who becomes prior to the Effective Time a "Director/officer" of the
Company (as defined in Article 7 of the Company's Restated By-laws ("Article
7")), and their heirs and personal representatives (the "Indemnified Parties"),
against any and all "Expenses" (as defined in Article 7) incurred in connection
with any "Proceeding" (as defined in Article 7) arising out of or pertaining to
any action or omission occurring prior to the Effective Time (including, without
limitation, any Proceeding which arises out of or relates to the transactions
contemplated by this Agreement), to the full extent permitted under
Massachusetts law and the Surviving Corporation's Restated By-laws in effect as
of the Effective Date or under any indemnification agreement in effect as of the
date of this Agreement.
(b) The Surviving Corporation shall control the defense of any such
Proceeding with counsel selected by the Surviving Corporation, which counsel
shall be reasonably acceptable to the Indemnified Party, provided that the
Indemnified Party shall be permitted to participate in the defense of such
Proceeding at its own expense; except that the Surviving Corporation shall pay
as incurred the reasonable fees and expenses of counsel retained by an
Indemnified Party in the event that (i) the Surviving Corporation and the
Indemnified Party shall have mutually agreed on the retention of such counsel or
(ii) the named parties to any Proceeding include both the Surviving Corporation
and the Indemnified Party and representation of both parties by the same counsel
would be inappropriate, in the reasonable opinion of counsel to the Indemnified
Party, due to actual or potential differing interests between them; and
provided, further, that if any D&O Insurance (as defined in paragraph (c) of
this Section 6.6) in effect at the time shall require the insurance company to
control such defense in order to obtain the full benefits of such insurance and
such provision is consistent with the provisions of the Company's D&O Insurance
existing as of the date of this Agreement, then the provisions of such policy
shall govern. Neither Parent nor the Surviving Corporation shall in any event be
liable for any settlement effected without its written consent, which consent
shall not be withheld unreasonably.
(C) For a period of not less than six years after the Effective Time,
Parent or the Surviving Corporation shall maintain officers' and directors'
liability insurance ("D&O Insurance") covering each Indemnified Party who is
presently covered by the Company's officers' and directors' liability insurance
or will be so covered at the Effective Time with respect to actions or omissions
occurring prior to the Effective Time, on terms no less favorable than such
insurance maintained in effect by the Company as of the date hereof in terms of
coverage and amounts, provided that Parent and the Surviving Corporation shall
not be required to pay in the aggregate an annual premium for D&O Insurance in
excess of 125% of the last annual premium paid prior to the date hereof, but in
such case shall purchase as much coverage as may be obtained for such amount.
(d) The Restated Articles of Organization and Restated By-laws of the
Surviving Corporation shall contain the provisions with respect to
indemnification set forth in the Restated Articles of Organization and Restated
By-laws of the Surviving Corporation as of the Effective Date, which provisions
shall not be amended, repealed or otherwise modified after the Effective Time in
any manner that would adversely affect the rights thereunder of the Indemnified
Parties in respect of actions or omissions occurring at or prior to the
Effective Time (including, without limitation, the transactions contemplated by
this Agreement), unless such modification is required by law. Parent, Sub and
the Company agree that all rights existing in favor of any Indemnified Party
under any indemnification agreement in effect as of the date hereof shall
survive the Merger and shall continue in full force and effect, without any
amendment thereto.
(e) The provisions of this Section 6.6 are intended to be for the
benefit of, and shall be enforceable by, each of the Indemnified Parties, his or
her heir and his or her personal representatives and shall be binding on all
successors and assigns of Parent, Sub, the Company and the Surviving
Corporation.
SECTION 6.7. PUBLIC ANNOUNCEMENTS. Parent and Sub, on the one hand, and
the Company, on the other hand, will consult with each other before issuing, and
provide each other the opportunity to review and comment upon, any press release
or other public statements with respect to the existence of and transactions
contemplated by this Agreement, and shall not issue any such press release or
make any such public statement without the consent of the other party following
such consultation, except as may be required by applicable law, regulation or
judicial process, and in such case only after reasonable notice to the other
party.
SECTION 6.8. ACQUISITION PROPOSALS. The Company shall not, nor shall it
authorize or permit any of its Representatives to, directly or indirectly, (i)
solicit, initiate or knowingly encourage any Third Party (as defined in this
Section 6.8) with respect to the submission of any Acquisition Proposal (as
hereinafter defined) or (ii) participate in any discussions or negotiations
regarding, or furnish to any Third Party any non-public information with respect
to, or take any other action to facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal; provided, however, that the foregoing shall not prohibit
the Board of Directors of
the Company (or, if applicable, the duly appointed Special Committee thereof)
from: (i) furnishing information to, or entering into discussions or
negotiations with, any Third Party in connection with an unsolicited bona fide
Acquisition Proposal by such Third Party if, and to the extent that, the Board
of Directors of the Company (or the Special Committee), after consultation with
independent legal counsel (who may be the Company's regularly engaged
independent counsel), determines in good faith that such action is required for
the Board of Directors of the Company to comply with its fiduciary obligations
to stockholders under applicable law; (ii) withdrawing or modifying its
recommendation referred to in Section 4.1(k) following receipt of a bona fide
unsolicited Acquisition Proposal if the Board of Directors of the Company (or
the Special Committee), after consultation with independent legal counsel (who
may be the Company's regularly engaged independent counsel), determines in good
faith that such action is necessary for the Board of Directors of the Company to
comply with its fiduciary duties to stockholders under applicable law; or (iii)
making to the Company's stockholders any recommendation and related filing with
the SEC as required by Rule 14e-2 and 14d-9 under the Exchange Act, with respect
to any tender offer, or taking any other equally required action (including,
without limitation, the making of public disclosures as may be necessary or
advisable under applicable securities laws); and provided further, however,
that, in the event of an exercise of the Company's or its Board of Director's
(or the Special Committee's) rights under clause (i), (ii) or (iii) above,
notwithstanding anything contained in this Agreement to the contrary, such
failure shall not constitute a breach of this Agreement by the Company. The
Company shall provide immediate written notice to Parent of the receipt of any
such Acquisition Proposal and of the Company's intention to furnish information
to, or enter into discussions or negotiations with, such person or entity. For
purposes of this Agreement, (i) "Acquisition Proposal" means any proposal with
respect to a merger, consolidation, share exchange, tender offer or similar
transaction involving the Company, or any purchase or other acquisition of all
or any significant portion of the assets of the Company, or any equity interest
in the Company, other than the transactions contemplated hereby and (ii) "Third
Party" means any corporation, partnership, person or other entity or "group" (as
defined in Section 13(d)(3) of the Exchange Act) other than Parent, Sub or any
Affiliates of Parent or Sub and their respective directors, officers, employees,
representatives and agents.
SECTION 6.9. STOCKHOLDER LITIGATION. The Company shall give Parent the
opportunity to participate, at the expense of Parent, in the defense or
settlement of any stockholder litigation against the Company and its
Representatives relating to the transactions contemplated by this Agreement
and/or the Ten Ideas Merger Agreement; provided, however, that no such
settlement shall be agreed to without Parent's consent, which consent shall not
be unreasonably withheld.
SECTION 6.10. BOARD ACTION RELATING TO STOCK OPTION PLANS. As soon as
practicable following the date of this Agreement, the Board of Directors of the
Company (or, if appropriate, any committee administering a Company Stock Option
Plan) shall adopt such resolutions or take such actions as may be required to
adjust the terms of all outstanding Company Stock Options or accelerate vesting
of options granted under the TARSOP, the Director Plan or the 1997 Plan in
accordance with Section 3.2 and shall make
such other changes to the Company Stock Option Plans and the ESPP as Parent
deems appropriate to give effect to the Merger, and to terminate such plans as
of the Effective Time. Promptly following the termination of the ESPP, the
Company or the Surviving Corporation, as the case may be, shall refund to each
participant in the ESPP in cash the amount of payroll deductions, if any, then
credited to such participant's account under the ESPP in accordance with the
provisions of Section 19 of the ESPP.
SECTION 6.11. CONSENTS AND APPROVALS. As soon as practicable following
the date of this Agreement, the Company and Parent shall make all filings
required to be made with and seek all consents, approvals, permits and
authorizations required to be obtained from, any third parties or Governmental
Entities in connection with this Agreement and the transactions contemplated
hereby, including, without limitation, the filing of any required notification
under the HSR Act, the consent of any licensing board or agency governing the
sale of alcoholic beverages ("Liquor License Consents"), the consent of any
landlord (or of any other person) at any location leased by the Company or any
of its Subsidiaries ("Landlord Consents") and any other filing, consent or
approval listed on Section 4.1(d) of the Disclosure Schedule, it being
understood, however, that the consummation of the Offer and the Merger are not
conditioned on the Company, Parent or Sub obtaining any such Liquor License
Consents or Landlord Consents. The Company shall pay any required filing fees or
other expense in connection therewith; provided that the Company and Parent
shall each pay one-half of any filing fees under the HSR Act; provided, further,
that Parent shall reimburse the Company for such payment in the event that this
Agreement is terminated pursuant to Section 8.1 hereof in any manner which does
not entitle Parent to reimbursement from the Company for Expenses (as defined in
Section 8.2(b)(i)).
SECTION 6.12. REPAYMENT OF INDEBTEDNESS. Parent shall utilize a portion
of the net proceeds of the Financing, together with available cash of the
Company, to repay, satisfy or otherwise discharge, in full, all of the Company's
indebtedness to BankBoston, N.A.
existing on the Closing Date.
SECTION 6.13. PAYMENT OF FEES AND EXPENSES. Parent and Sub
acknowledge that concurrently with the execution of this Agreement, the Company
is obligated to pay Ten Ideas a fee of $1,500,000 and an amount not to exceed
$750,000, as reimbursement of expenses, all in accordance with the terms of the
Ten Ideas Merger Agreement, and agree that they shall in no event contest the
propriety of or the obligation to make such payments or to seek to recover all
or any portion of such payments.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT
THE MERGER. The respective obligation of each party to effect the Merger is
subject to the satisfaction or waiver on or prior to the Closing Date of the
following conditions:
(a) STOCKHOLDER APPROVAL. The Merger shall have been adopted
and approved by the affirmative vote of the holders of two-thirds of the
outstanding Shares as required under the laws of The Commonwealth of
Massachusetts.
(b) THIRD-PARTY AND GOVERNMENTAL CONSENTS. All filings required to be
made prior to the Effective Time with, and all consents (other than Liquor
License Consents and Landlord Consents) and, approvals, permits and
authorizations required to be obtained prior to the Effective Time from, any
third party or any Governmental Entities, including, without limitation, those
set forth in Section 4.1(d) of the Disclosure Schedule, in connection with the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by the Company, Parent and Sub, and which,
either individually or in the aggregate, if not obtained would have a Material
Adverse Effect or would prevent consummation of the Merger, shall have been made
or obtained (as the case may be).
(C) NO INJUNCTIONS, RESTRAINTS OR LITIGATION. No temporary restraining
order, judgment, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Merger shall be in effect; provided, however,
that the parties invoking this condition shall use their best efforts to have
any such order or injunction vacated.
(d) SHARES PURCHASED. Sub shall have purchased Shares pursuant
to the Offer, provided this condition shall be deemed to be satisfied if Sub
fails to accept for payment and pay for Shares in violation of the Offer.
SECTION 7.2. CONDITIONS TO OBLIGATIONS OF PARENT AND SUB. The
obligations of Parent and Sub to effect the Merger are further subject to the
satisfaction, or waiver by Parent, on or prior to the Closing Date, of the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Company set forth in Section 4.1 that are qualified by materiality shall
be true and correct and such representations and warranties of the Company set
forth in Section 4.1 that are not so qualified shall be true and correct in all
material respects, in each case as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date, except to the extent
such representations and warranties speak as of an earlier date, except for
changes permitted or contemplated by this Agreement, and except, in the case of
any such breach, where such breach would not have, individually or in the
aggregate, a
Material Adverse Effect or materially and adversely affect the Financing
described in Section 4.2(d) or the ability of Parent and Sub to consummate the
Offer and the Merger. Parent shall have received an officers' certificate signed
on behalf of the Company to the effect set forth in this paragraph.
(b) CONSENTS AND APPROVALS. On or prior to the Effective Date, Parent
and/or Sub shall have received all of the necessary consents (other than Liquor
License Consents and Landlord Consents) or approvals of Governmental Entities
and all third parties in connection with the execution and delivery of this
Agreement and the consummation of the Merger and the other transactions
contemplated hereby, unless the failure to obtain such consent or approval would
not have a Material Adverse Effect nor have a material adverse effect on the
Financing.
SECTION 7.3. CONDITIONS TO OBLIGATIONS OF THE COMPANY. The
obligations of the Company to effect the Merger are further subject to the
satisfaction, or waiver by the Company, on or prior to the Closing Date, of the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Parent and Sub set forth in Section 4.2 that are qualified by
materiality shall be true and correct and such representations and warranties of
Parent and Sub set forth in Section 4.2 that are not so qualified shall be true
and correct in all material respects, in each case as of the date of this
Agreement and as of the Closing Date as though made on and as of the Closing
Date, except to the extent such representations and warranties speak as of an
earlier date and except for changes permitted or contemplated by this Agreement,
and except, in the case of any such breach, where such breach would not,
individually or in the aggregate, materially and adversely affect the Financing
described in Section 4.2(d) or the ability of Parent and Sub to consummate the
Offer and the Merger. The Company shall have received an officers' certificate
signed on behalf of Parent to the effect set forth in this paragraph.
(b) FAIRNESS OPINION. At or prior to the Effective Time, the
Financial Advisor shall not have withdrawn its fairness opinion referred to in
Section 4.1(l).
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1. TERMINATION. This Agreement may be terminated and
abandoned at any time prior to the Effective Time, whether before or after
approval of the Merger by the stockholders of the Company: (a) by mutual written
consent of Parent and the Company; or (b) by either Parent or the Company if (i)
Parent or Sub shall have failed to commence the Offer within five business days
following the date hereof or the Offer shall have terminated or expired in
accordance with its terms without Parent or Sub having purchased any Shares
pursuant to the Offer, or (ii) the Offer has not been consummated by July 31,
1998, or (iii) any change to the Offer is made in contravention of the
provisions of Section 1.1; or (c) by either Parent or the Company: (i) if, upon
a vote at the Stockholders Meeting, or any adjournment thereof, the adoption and
approval of this Agreement and the Merger by the stockholders of the Company
required by Massachusetts law, the Company's Restated Articles of Organization
or the terms of this Agreement shall not have been obtained; or (ii) if the
Merger shall not have been consummated on or before October 31, 1998, provided
that the failure to consummate the Merger is not attributable to the failure of
the terminating party to fulfill its obligations pursuant to this Agreement; or
(iii) if there shall be any law or regulation (other than a law or regulation
relating to the issuance or transfer of any licenses or permits of any licensing
board or agency governing the sale of alcoholic beverages) that makes
consummation of the Offer or the Merger illegal or otherwise prohibited, or if
any judgment, injunction, order or decree enjoining or otherwise restraining Sub
from purchasing Shares pursuant to the Offer or Sub or the Company from
consummating the Merger is entered and such judgment, injunction, order or
decree shall become final and nonappealable; or (d) by the Company, immediately
after payment to Sub of the fee and expense reimbursement described in Section
8.2(b), if prior to the purchase of Shares pursuant to the Offer (i) the Board
of Directors shall have withdrawn or modified in a manner adverse to Parent or
Sub its approval or recommendation of the Offer, this Agreement or the Merger in
order to permit the Company to execute an Acquisition Proposal providing for the
acquisition of the Company by a Third Party as determined by the Board of
Directors in good faith after consultation with independent legal counsel (who
may be the Company's regularly engaged independent counsel) that such action is
required for the Board of Directors of the Company to comply with its fiduciary
obligations to stockholders under applicable law, or (ii) the fairness opinion
referred to in Section 4.1(l) shall have been withdrawn; or (e) by Parent, if
the Board of Directors of the Company shall have approved an Acquisition
Proposal or withdrawn or modified (including by amendment of the Schedule
14D-9), in a manner adverse to Parent or Sub, the Board of Director's
recommendation pursuant to Section 4.1(k); or (f) by Parent, if any of the
conditions set forth in Section 7.2 shall have become incapable of fulfillment,
and shall not have been waived by Parent, or if the Company shall breach in any
material respect any of its representations, warranties or obligations hereunder
and such breach shall not have been cured in all material respects or waived and
the Company shall not have provided reasonable assurance that such breach will
be cured in all material respects on or before the Closing Date, but only if
such breach, singly or together with all other such breaches, constitutes a
failure of the conditions contained in Section 7.2 as of the date of such
termination; or (g) by the
Company, if any of the conditions set forth in Section 7.3 shall have become
incapable of fulfillment, and shall not have been waived by the Company, or if
Parent or Sub shall breach in any material respect any of their respective
representations, warranties or obligations hereunder and such breach shall not
have been cured in all material respects or waived and Parent or Sub, as the
case may be, shall not have provided reasonable assurance that such breach will
be cured in all material respects on or before the Closing Date, but only if
such breach, singly or together with all other such breaches, constitutes a
failure of the conditions contained in Section 7.3 as of the date of such
termination; provided, however, that the party seeking termination pursuant to
clause (f) or (g) hereof is not in breach of any of its material
representations, warranties, covenants or agreements contained in this
Agreement.
SECTION 8.2. EFFECT OF TERMINATION.
(a) AGREEMENT VOID. In the event of the termination and abandonment of
this Agreement pursuant to Section 8.1 hereof, this Agreement shall forthwith
become void and have no effect, without any liability on the part of any party
hereto or its affiliates, directors, officers or stockholders and all rights and
obligations of any party hereto shall cease except for agreements contained in
Sections 6.4, 8.2 and 9.2; provided, however, that nothing contained in this
Section 8.2 shall relieve any party from liability for any breach of this
Agreement or shall relieve the Company from any liability under this Article
VIII.
(b) TERMINATION FEE.
(I) If this Agreement is terminated pursuant to Section 8.1(d)
or 8.1(e), pursuant to Section 8.1(f) as a result of a willful breach
by the Company, or pursuant to Section 8.1(g) as a result of the
withdrawal or modification of the Financial Advisor's fairness opinion
referred to in Section 4.1(l), then the Company shall (provided that
neither Parent nor Sub is then in material breach of its obligations
under this Agreement) promptly pay to Parent in cash an amount equal to
the aggregate out-of-pocket costs and reasonable expenses of Parent and
Sub in connection with this Agreement and the transactions contemplated
hereby, up to an aggregate amount not to exceed $750,000, including,
without limitation, commitment, appraisal and other fees relating to
the Financing and the reasonable fees and disbursements of accountants,
attorneys and investment bankers, whether retained by Parent or by any
other person (collectively, "Expenses").
(ii) In addition to any required payment of Expenses, if this
Agreement is terminated pursuant to Section 8.1(d) or 8.1(e), or
pursuant to Section 8.1(f) as a result of a willful breach by the
Company, then the Company shall (provided that neither Parent nor Sub
is then in material breach of its obligations under this Agreement)
promptly pay to Parent the sum of $1,500,000 in cash (the "Termination
Fee").
(iii) The sum of the Expenses and the Termination Fee, if any,
shall be referred to herein as the "Termination Amount." The rights of
Parent to receive the Termination Amount shall be in lieu of any
damages remedy or claim by Parent or Sub
against the Company for termination of this Agreement pursuant to
Section 8.1(d) or 8.1(e), Section 8.1(f) in the event of a willful
breach by the Company or pursuant to Section 8.1(g) as a result of the
Company's reliance on the condition set forth in Section 7.3(b).
(iv) Notwithstanding the provisions of Section 8.2(b)(ii)
above, if this Agreement is terminated pursuant to Section 8.1(g) as a
result of the Company's reliance on the condition set forth in Section
7.3(b) at a time when Parent is ready, willing and able (other than as
a result of an inability to consummate the Financing solely because of
the withdrawal of the Financial Advisor's fairness opinion referred to
in Section 4.1(l)) to proceed with the transactions contemplated hereby
but for the withdrawal of such fairness opinion, and within one year
after such termination, the Company enters into an agreement relating
to an Acquisition Proposal with a person other than Parent or Sub or
their Affiliates and Associates, or the Company's Board of Directors
recommends or resolves to recommend to the Company's stockholders
approval and acceptance of such an Acquisition Proposal, then, upon the
entry into such agreement or the making of such recommendation or
resolution, the Company shall pay to Parent the Termination Fee.
(C) ACQUISITION PROPOSAL FOLLOWING TERMINATION. At no time prior to or
within one year after termination of this Agreement shall the Company enter into
any agreement relating to an Acquisition Proposal with a person other than
Parent or Sub or their Affiliates and Associates unless such agreement provides
that such person shall, upon the execution of such agreement, pay any
Termination Amount due Parent under this Section 8.2 which at that time remains
unpaid.
(d) REASONABLE INDUCEMENT. The parties acknowledge and agree that the
provisions for payment of the Termination Amount are included herein in order to
reasonably induce Parent to enter into this Agreement and to reimburse Parent
for incurring the costs and expenses related to entering into this Agreement,
obtaining the Commitments and the Financing, and consummating the transactions
contemplated by this Agreement.
(e) COSTS OF ENFORCEMENT. Notwithstanding anything to the contrary set
forth in this Agreement, in the event Parent and/or Sub is required to file suit
to seek all or a portion of the Termination Amount, it shall be entitled, in
addition to payment of the Expenses, to payment by the Company of all additional
expenses, including reasonable attorneys' fees and expenses, which it incurs in
enforcing its rights hereunder.
SECTION 8.3. AMENDMENT. Subject to the applicable provisions of the
MBCL, at any time prior to the Effective Time, the parties hereto may modify or
amend this Agreement, by written agreement executed and delivered by duly
authorized officers of the respective parties; provided, however, that after
approval of the Merger by the stockholders of the Company, no amendment shall be
made which reduces the consideration payable in the Merger or adversely affects
the rights of the Company's stockholders hereunder without the
approval of such stockholders. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties.
SECTION 8.4. EXTENSION; WAIVER. At any time prior to the Effective
Time, the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties of the other parties contained in this
Agreement or in any document delivered pursuant to this Agreement or (c) subject
to Section 8.2, waive compliance with any of the agreements or conditions of the
other parties contained in this Agreement. Any agreement on the part of a party
to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. The failure of any party
to this Agreement to assert any of its rights under this Agreement or otherwise
shall not constitute a waiver of such rights.
SECTION 8.5. PROCEDURE FOR TERMINATION, AMENDMENT,
EXTENSION OR WAIVER. A termination of this Agreement pursuant to Section 8.1, an
amendment of this Agreement pursuant to Section 8.3, an extension or waiver
pursuant to Section 8.4, or any other approval or consent required or permitted
to be given pursuant to this Agreement shall, in order to be effective and in
addition to requirements of applicable law, require, in the case of Parent, Sub
or the Company, action by its Board of Directors, a duly authorized committee
thereof (including, in the case of the Company, the Special Committee), or the
duly authorized designee of such Board of Directors or such committee thereof.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1. NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES.
None of the representations and warranties set forth in of this Agreement or in
any instrument delivered pursuant to this Agreement shall survive the Effective
Time. This Section 9.1 shall not limit any covenant or agreement of the parties
which by its terms contemplates performance after the Effective Time, including,
without limitation, Section 6.7.
SECTION 9.2. FEES AND EXPENSES. Except as provided otherwise in this
Agreement, including, without limitation, in Sections 6.2, 6.11 and 8.2, whether
or not the Merger shall be consummated, each party hereto shall pay its own
expenses incident to preparing for, entering into and carrying out this
Agreement and the consummation of the transactions contemplated hereby.
SECTION 9.3. DEFINITIONS. For purposes of this Agreement:
(a) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act; and
(b) "person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity.
SECTION 9.4. NOTICES. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given when delivered personally or sent by overnight courier (providing proof of
delivery) or telecopy to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
(a) if to Parent or Sub, to: NE Restaurant Company, Inc.
00X Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: President
Telecopy No.: (000) 000-0000
with copies to: Xxxxxxxx Partners
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx Xxxxxxxx
Telecopy No.: (000) 000-0000
- and -
Stroock & Stroock & Xxxxx LLP
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
(b) if to the Company, to: Bertucci's, Inc.
00 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Board of Directors
Telecopy No.: (000) 000-0000
with a copy to: Xxxxxxxx, Xxxxxxx & Xxxxxxx
A Professional Corporation
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
SECTION 9.5. INTERPRETATION. When a reference is made in this
Agreement to a Section or Schedule, such reference shall be to a Section of,
or a Schedule to, this
Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation."
SECTION 9.6. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
SECTION 9.7. ENTIRE AGREEMENT; THIRD-PARTY BENEFICIARIES. This
Agreement and the other agreements referred to herein constitute the entire
agreement, and supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter of this
Agreement. This Agreement is not intended to confer upon any person, other than
the parties hereto and the third party beneficiaries referred to in the
following sentence, any rights or remedies. The parties hereto expressly intend
the provisions of Section 6.6 to confer a benefit upon and be enforceable by, as
third party beneficiaries of this Agreement, the third persons referred to in,
or intended to be benefited by, such provisions.
SECTION 9.8. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Massachusetts,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
SECTION 9.9. ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by any of the parties without the prior
written consent of the other parties, and any such assignment that is not
consented to shall be null and void, except that Parent may assign this
Agreement (i) to any wholly owned subsidiary of Parent or (ii) together with all
of the outstanding capital stock of Sub, to an entity organized under the
corporate or limited liability laws of a jurisdiction of one of the United
States of America, the ownership interests of which entity are substantially
identical to the ownership interests of Parent immediately prior to such
assignment and which entity specifically and expressly assumes by written
agreement the obligations of Parent under this Agreement; in either case so long
as such assignment shall not adversely affect the ability of Parent and Sub to
secure the Financing described in Section 4.2(d) and without Parent being
released from liability hereunder and such transfer or assignment will not
relieve Parent or Sub of their obligations under the Offer or prejudice the
rights of tendering stockholders to receive payment for Shares validly tendered
and accepted for payment pursuant to the Offer. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns.
SECTION 9.10. ENFORCEMENT. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
(without requirement to post a bond) the terms and provisions of this Agreement,
this being in addition to any other remedy to which they are entitled at law or
in equity.
SECTION 9.11. SEVERABILITY. Whenever possible, each provision or
portion of any provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law but if any provision or portion
of any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision or portion of any provision had
never been contained herein.
[Remainder of Page Intentionally Left Blank.]
IN WITNESS WHEREOF, the Company, Parent and Sub have caused this
Agreement to be executed as an agreement under seal by their respective officers
thereunto duly authorized, all as of the date first written above.
BERTUCCI'S, INC.
By: /s/ Xxxxxx X. Xxxxxxx
Vice President-Finance, Treasurer and
Chief Financial Officer
NE RESTAURANT COMPANY, INC.
By: /s/ Xxxxxx Xxxxx
President
By: /s/ Xxxx Xxxxxxxx
Assistant Treasurer and
Chief Financial Officer
NERC ACQUISTION CORP.
By: /s/ Xxxxxx Xxxxx
President
By: /s/ Xxxx Xxxxxxxx
Assisant Treasurer and
Chief Financial Officer
ANNEX I
The capitalized terms used in this Annex have the meanings set forth in
the attached Agreement, except that the term "Merger Agreement" shall be deemed
to refer to the attached Agreement.
Notwithstanding any other provision of the Offer or the Merger
Agreement, Sub shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) under the
Exchange Act (relating to Sub's obligation to pay for or return tendered Shares
after the termination or withdrawal of the Offer), to pay for any Shares, and
may terminate the Offer, if (i) the Minimum Condition has not been satisfied,
(ii) the applicable waiting period under the HSR Act shall not have expired or
been terminated, (iii) the Financing Condition has not been satisfied or (iv) at
any time on or after May 13, 1998 and prior to the acceptance for payment of or
payment for Shares, any of the following conditions shall occur and be
continuing:
(a) there shall be instituted or pending any action or proceeding
before any domestic court, government or Governmental Entity, other than by
Parent or Sub, a stockholder of Parent or Sub or any person affiliated with
Parent or Sub, (i) challenging or seeking to make illegal, to delay materially
or otherwise to restrain or prohibit the making of the Offer, the acceptance for
payment of or payment for some of or all the Shares by Sub or the consummation
by Sub of the Merger, (ii) seeking to restrain or prohibit Parent's or the
Company's ownership or operation (or that of its respective Subsidiaries or
Affiliates) of all or any material portion of the business or assets of the
Company and its Subsidiaries, taken as a whole, or of Parent and its
Subsidiaries, taken as a whole, (iii) seeking to compel Parent or the Company to
sell or otherwise dispose of, or hold separate (through the establishment of a
trust or otherwise) any material assets or categories of assets or businesses of
any of the Company and its Subsidiaries, taken as a whole, or Parent or any of
Parent's Affiliates, taken as a whole, (iv) seeking to prohibit or impose
material limitations on the ability of Parent or any of its Subsidiaries or
affiliates effectively to exercise full rights of ownership of the Shares
(including, without limitation, the right to vote any Shares acquired or owned
by Parent or any of its Subsidiaries or affiliates on all matters properly
presented to the Company's stockholders), or seeking to prohibit Parent or any
of its Subsidiaries from effectively controlling in any material respect the
business and operations of the Company and its Subsidiaries, taken as a whole,
(v) seeking to require divestiture by Parent or any of its Subsidiaries or
affiliates of any Shares or seeking to obtain from the Company, Parent or Sub by
reason of any of the transactions contemplated by the Offer or the Merger
Agreement any damages that are material to the Company and its Subsidiaries,
taken as a whole, or Parent and its subsidiaries, taken as whole, or (vi) that
otherwise, in the reasonable judgment of Parent, is likely to materially
adversely affect the Company and its Subsidiaries, taken as a whole, or Parent
and its subsidiaries, taken as a whole, provided that, in any such case, Parent
shall have
used its best efforts to defeat or have vacated such action or proceeding and
shall have failed to do so; or
(b) there shall be any action taken, or any statute, rule, regulation,
injunction, interpretation, judgment, order or decree enacted, enforced,
promulgated, issued or deemed applicable to Parent or any of its Subsidiaries or
to the Company or any of its Subsidiaries or the Offer or the Merger, by any
court, government or Governmental Entity, other than the application of the
waiting period provision of the HSR Act to the Offer or the Merger, and other
than a law or regulation relating to the issuance or transfer of any licenses or
permits of any licensing board or agency governing the sale of alcoholic
beverages, that, in the reasonable judgment of Parent, is likely, directly or
indirectly, to result in any of the consequences referred to in clauses (i)
through (vi) of paragraph (a) above; or
(c) any change, event, occurrence or circumstance shall have occurred
in the business, operations, assets or condition (financial or otherwise) of the
Company or any of its Subsidiaries, relating to a period commencing after April
18, 1998, that in the reasonable judgment of Parent, is likely to have a
Material Adverse Effect on the Company and its Subsidiaries, taken as a whole;
or
(d) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on the New York Stock Exchange, which
suspension or limitation shall continue for at least three consecutive trading
days, (ii) any decline in either the Dow Xxxxx Industrial Average or the
Standard and Poor's 500 Index by an amount in excess of 25%, measured from May
13, 1998 (iii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (iv) a commencement of a war
or armed hostilities or other national or international calamity directly or
indirectly involving the United States which would reasonably be expected to
have a material adverse impact on the capital markets of the United States, or
(v) in the case of any of the foregoing existing on the date of this Agreement,
a material acceleration, escalation or worsening thereof; or
(e) the Company shall have breached or failed to perform in any
material respect any of its covenants or agreements under the Merger Agreement,
or any of the representations and warranties of the Company set forth in the
Merger Agreement that are qualified as to materiality shall not be true and
correct and any of the representations and warranties without such qualification
shall not be true and correct in any material respect, in each case when made,
except, in the case of any such breach, where such breach would not have,
individually or in the aggregate, a Material Adverse Effect or materially and
adversely affect the Financing described in Section 4.2(d) or the ability of
Parent and Sub to consummate the Offer and the Merger,; or
(f) the Merger Agreement shall have been terminated in accordance
with its terms; or
(g) any Third Party (other than Xxxxxx Xxxxxxxx or "Permitted
Transferees" under the Tender and Voting Agreement) acquires beneficial
ownership of 15% or more of the outstanding Shares; or
(h) a tender offer or exchange offer for more than 33 1/3% of the
Shares shall have been made or publicly proposed by a Third Party for a price in
excess of the Merger Consideration; or
(i) the Board of Directors of the Company withdraws or modifies in a
manner adverse to Sub or Parent its approval or recommendation of the Offer,
this Agreement or the Merger or recommends or approves an Acquisition Proposal
by a Third Party;
which, in the reasonable judgment of Parent, in any such case, and regardless of
the circumstances giving rise to any such condition, makes it inadvisable to
proceed with the Offer and/or with such acceptance for payment or payments.
The foregoing conditions are for the sole benefit of Parent and Sub and
may be asserted by Sub regardless of the circumstances giving rise to such
condition or may be waived by Sub in whole or in part at any time and from time
to time in its sole discretion. The failure by Sub or any Affiliate of Sub at
any time to exercise any of the foregoing rights shall not be deemed a waiver of
any such right, the waiver of any such right with respect to particular facts
and circumstances shall not be deemed a waiver with respect to any other facts
and circumstances and each such right shall be deemed an ongoing right that may
be asserted at any time and from time to time.
305011-1
