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EXHIBIT 4.24
AGREEMENT AND PLAN OF REORGANIZATION
AMONG
OUTBACK STEAKHOUSE, INC.
OUTBACK STEAKHOUSE OF FLORIDA, INC.
AND
STONE, INC.
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TABLE OF CONTENTS
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ARTICLE 1 - PLAN OF ACQUISITION...................................................................................1
1.1 The Merger......................................................................................1
1.2 Adjustments.....................................................................................2
1.3 Closing.........................................................................................2
1.4 Execution and Delivery of Closing Documents.....................................................2
1.5 Execution and Filing of Merger Documents........................................................3
1.6 Effectiveness of Merger.........................................................................3
1.7 Further Assurances..............................................................................3
1.8 Certificates....................................................................................3
1.9 Closing of Transfer Books.......................................................................3
1.10 Fractional Shares...............................................................................3
1.11 Accounting Treatment............................................................................3
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES OF SI AND STONE........................................................3
2.1 Organization and Good Standing..................................................................3
2.2 Power and Authority.............................................................................4
2.3 Authority and Validity..........................................................................4
2.4 Binding Effect..................................................................................4
2.5 Compliance with Other Instruments...............................................................4
2.6 Capitalization of SI............................................................................4
2.7 Absence of Certain Changes......................................................................5
2.8 Tax Liabilities.................................................................................5
2.9 No Undisclosed Liabilities......................................................................6
2.10 Title to Properties.............................................................................6
2.11 Contracts.......................................................................................6
2.12 Litigation and Government Claims................................................................6
2.13 No Violation of Any Instrument..................................................................7
2.14 Necessary Approvals and Consents................................................................7
2.15 Compliance With Laws............................................................................7
2.16 Accuracy of Information Furnished...............................................................7
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF STONE...............................................................7
3.1 Authority and Validity..........................................................................8
3.2 Binding Effect..................................................................................8
3.3 Ownership.......................................................................................8
3.4 Voting..........................................................................................8
3.5 Residency.......................................................................................8
3.6 Compliance with Other Instruments...............................................................8
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES OF OSI AND OUTBACK.....................................................8
4.1 Organization and Good Standing..................................................................8
4.2 Foreign Qualification...........................................................................8
4.3 Power and Authority.............................................................................8
4.4 Authority and Validity..........................................................................9
4.5 Binding Effect..................................................................................9
(i)
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4.6 Compliance with Other Instruments...............................................................9
4.7 Capitalization of OSI...........................................................................9
4.8 SEC Reports.....................................................................................9
4.9 Litigation and Government Claims...............................................................10
4.10 Necessary Approvals and Consents...............................................................10
4.11 Absence of Certain Changes or Events...........................................................10
ARTICLE 5 - JOINT COVENANTS OF SI, STONE, OSI AND OUTBACK........................................................10
5.1 Notice of any Material Change..................................................................10
5.2 Cooperation....................................................................................11
5.3 Post-Closing Adjustment........................................................................11
5.4 Distribution and Allocations...................................................................11
5.5 Additional Agreements..........................................................................11
ARTICLE 6 - COVENANTS OF SI AND STONE............................................................................12
6.1 Securities Law Compliance. ....................................................................12
6.2 Restriction on Transfer. ......................................................................13
6.3 Payment of Liabilities.........................................................................14
6.4 Pooling........................................................................................14
ARTICLE 7 - COVENANTS OF OSI AND OUTBACK.........................................................................14
7.1 Employment Agreements..........................................................................14
7.2 Assumed Liabilities............................................................................14
ARTICLE 8 - JOINT CONDITIONS PRECEDENT TO CLOSING OBLIGATIONS....................................................15
8.1 Consents to Transaction........................................................................15
8.2 Absence of Litigation..........................................................................15
8.3 Dissenter's Rights.............................................................................15
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS OF SI............................................................15
9.1 Compliance.....................................................................................15
9.2 Representations and Warranties.................................................................15
9.3 Material Adverse Changes.......................................................................16
ARTICLE 10 - CONDITIONS PRECEDENT TO OBLIGATIONS OF OSI AND OUTBACK..............................................16
10.1 Compliance.....................................................................................16
10.2 Representations and Warranties.................................................................16
10.3 Current Financial Status.......................................................................16
10.4 Material Adverse Changes.......................................................................16
10.5 Pooling........................................................................................16
ARTICLE 11 - INDEMNIFICATION.....................................................................................16
11.1 Indemnification Based on Agreement. .........................................................16
11.2 Limitation.....................................................................................17
11.3 Cooperation....................................................................................17
11.4 Notice.........................................................................................17
ARTICLE 12 - MISCELLANEOUS.......................................................................................18
12.1 Termination....................................................................................18
12.2 Expenses.......................................................................................18
(ii)
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12.3 Entire Agreement...............................................................................18
12.4 Survival of Representations and Warranties.....................................................18
12.5 Counterparts...................................................................................19
12.6 Notices........................................................................................19
12.7 Successors and Assigns.........................................................................19
12.8 Governing Law..................................................................................19
12.9 Waiver and Other Action........................................................................19
12.10 Severability...................................................................................19
12.11 Headings.......................................................................................20
12.12 Construction...................................................................................20
12.13 Jurisdiction and Venue.........................................................................20
12.14 Enforcement....................................................................................20
12.15 Further Assurances.............................................................................20
12.16 Equitable Remedies.............................................................................20
EXHIBIT A
ARTICLES OF MERGER.....................................................................................A-1
EXHIBIT B
DISCLOSURE SCHEDULES...................................................................................B-1
(iii)
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made and
entered into as of the 1st day of October, 1997, by and among OUTBACK
STEAKHOUSE, INC., a Delaware corporation ("OSI"), OUTBACK STEAKHOUSE OF FLORIDA,
INC., a Florida corporation ("Outback"), STONE, INC., a Virginia corporation
("SI") and XXXXXXXX X. XXXXX, III, an individual residing in the State of
Virginia ("Stone").
W I T N E S S E T H:
WHEREAS, Outback is a wholly-owned subsidiary of OSI; and
WHEREAS, Stone is the sole owner of the issued and outstanding common
stock of SI, and Stone is the sole director, President and is responsible for
the day-to-day operations of SI; and
WHEREAS, Outback and SI have entered into that certain Florida limited
partnership known as Outback/Stone-II, Limited Partnership ("Partnership");
WHEREAS, the Partnership operates Outback Steakhouse restaurants in the
States of Virginia, Maryland and West Virginia; and
WHEREAS, the Board of Directors of SI has approved the merger of SI
into Outback (the "Merger") upon the terms and conditions set forth in this
Agreement; and
WHEREAS, for federal income tax purposes it is intended that the Merger
shall qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, pursuant to the Merger, SI will be merged with and into
Outback and all of the outstanding shares of capital stock of SI will be
converted into shares of Common Stock, par value $.01, of OSI (the "OSI Common
Stock"); and
WHEREAS, the parties hereto desire by this Agreement to set forth the
terms and conditions upon which they are willing to consummate the Merger.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements contained herein, the parties hereto covenant and agree
as follows:
ARTICLE 1
PLAN OF ACQUISITION
1.1 The Merger. Subject to and upon the terms and conditions contained
herein, SI shall be merged with and into Outback, with Outback being the
surviving corporation, in accordance with the Articles of Merger substantially
in the form attached to this Agreement as EXHIBIT A (the "Merger Agreement"),
which will be executed and delivered by OSI, Outback, and SI prior to the
Merger. As a result of the Merger, each voting and nonvoting common share of SI
outstanding immediately before the Effective Date (as herein defined) shall, by
virtue of the Merger and without any further action being
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required by the holders thereof, be converted into and exchanged for 285.584
shares of OSI Common Stock.
1.2 Adjustments.
(a) Except as otherwise provided in this SECTION 1.2, the total number
of shares of OSI Common Stock to be issued pursuant to the Merger shall be One
Hundred Forty-Two Thousand Seven Hundred Ninety-Two (142,792).
(b) If, between the date of this Agreement and the Closing Date or the
Effective Date, as the case may be, (i) the outstanding shares of capital stock
of SI shall have been changed into a different number of shares or a different
class by reason of any reclassification, recapitalization, split-up,
combination, exchange of shares, or readjustment, with a record date within such
period, or a stock dividend thereon shall be declared with a record date within
such period or (ii) SI shall have issued additional shares of its capital stock,
the number of shares of OSI Common Stock received in exchange for each share of
SI's capital stock shall be adjusted so that the aggregate number of shares of
OSI Common Stock received in exchange for all shares of SI's capital stock
(assuming no Dissenting Shares) remains at 142,792.
(c) If, between the date of this Agreement and the Closing Date or the
Effective Date, as the case may be, the outstanding shares of OSI Common Stock
shall have been changed into a different number of shares or a different class
by reason of any reclassification, recapitalization, split-up, combination,
exchange of shares, or readjustment, with a record date within such period, or a
stock dividend thereon shall be declared with a record date within such period,
the number of shares of OSI Common Stock received in exchange for each share of
capital stock of SI (as specified in SECTION 1.1 hereof) shall be adjusted to
accurately reflect such change.
1.3 Closing. The closing of the transactions contemplated by this
Agreement, including the Merger (the "Closing"), shall take place at 10:00 a.m.,
Tampa time, at the offices of Outback on October 1, 1997, or on such date and at
such other time and place as is agreed upon by the parties hereto. The day on
which the Closing occurs is herein referred to as the "Closing Date." If any of
the conditions to the obligations of the parties to this Agreement have not been
satisfied or waived by the Closing Date, then the party to this Agreement that
is unable to meet such condition or conditions shall be entitled to postpone the
Closing by written notice to the other parties until such condition shall have
been satisfied (which such party shall seek to cause to happen at the earliest
practicable date) or waived, but the Closing shall occur not later than October
31, 1997, unless further extended by written agreement of the parties to this
Agreement. The parties shall use their best efforts to effectuate a timely
closing as provided in this SECTION 1.3.
1.4 Execution and Delivery of Closing Documents. Before the Closing,
each party shall cause to be prepared and at the Closing the parties shall
execute and deliver each agreement and instrument required by this Agreement or
the Merger Agreement to be so executed and delivered and not theretofore
accomplished. At the Closing, each party also shall execute and deliver such
other appropriate and customary documents as the other parties reasonably may
request for the purpose of consummating the transactions contemplated by this
Agreement and the Merger Agreement. All actions taken at the Closing shall be
deemed to have been taken simultaneously at the time the last of any such
actions is taken or completed.
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1.5 Execution and Filing of Merger Documents. At the time of completion
of the Closing, OSI, Outback, SI and Stone agree to take the following actions:
(a) to execute and deliver all documents and certificates relating to
the Merger required to be executed by them that have not already been so
executed and that are required under applicable federal, state and local laws to
be filed in order validly to effectuate the Merger; and
(b) to cause Articles of Merger to be filed with the Secretary of State
of the State of Florida and the Secretary of State of the State of Virginia and
a Certificate of Merger to be issued by each such officer.
1.6 Effectiveness of Merger. The Merger shall become effective under
the laws of Florida upon the later of (i) filing of these Articles of Merger
with the Secretary of State of the State of Florida and the Secretary of State
of the State of Virginia; or (ii) October 1, 1997 (the "Effective Date"). Such
Effective Date shall be indicated on Certificates of Merger issued by the
Secretary of State of the State of Florida and by the Secretary of State of the
State of Virginia pursuant to the Florida Act and Virginia Law.
1.7 Further Assurances. After the Closing, the parties hereto shall
execute and deliver such additional documents and take such additional actions
as may reasonably be deemed necessary or advisable by any party in order to
consummate the transactions contemplated by this Agreement and by the Merger
Agreement, and to vest more fully in Outback the ownership of and the rights to
the business and assets of SI as existed immediately before the Effective Date.
1.8 Certificates. As soon as practicable after the Effective Date, OSI
shall make available and each holder of capital stock of SI shall be entitled to
receive upon surrender of stock certificates of SI representing SI capital stock
for cancellation, certificates representing the number of shares of OSI Common
Stock into which such shares are converted in the Merger as provided in SECTION
1.1 hereof. The OSI Common Stock into which such SI capital stock is converted
shall be deemed issued at the Effective Date.
1.9 Closing of Transfer Books. At the Closing Date, the stock transfer
books of SI shall be closed and no transfer of capital stock of SI, shall
thereafter be made.
1.10 Fractional Shares. No fractional shares of OSI Common Stock and no
certificates or scrip therefor shall be issued. Instead, one whole share of OSI
Common Stock shall be issued for each fractional share of .5 or more of one
whole share and each fractional share of less than .5 of one whole share shall
be disregarded.
1.11 Accounting Treatment. It is the intention of the parties hereto
that the Merger will be treated for financial reporting purposes as a pooling of
interests.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SI AND STONE
Each of SI and Stone, jointly and severally, represent and warrant to
OSI and Outback as follows:
2.1 Organization and Good Standing. SI is a corporation duly organized,
validly existing and in good standing under the laws of the State of Virginia.
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2.2 Power and Authority. SI has the requisite power and authority and
all material licenses and permits required by governmental authorities to own,
lease and operate its properties and assets and to carry on its businesses as
currently being conducted.
2.3 Authority and Validity.
(a) SI has the corporate power and authority to execute, deliver and
perform its obligations under this Agreement, the Merger Agreement and the other
documents executed or to be executed by SI in connection with this Agreement;
and the execution, delivery and performance by SI of this Agreement, the Merger
Agreement and the other documents executed or to be executed by SI in connection
with this Agreement have been duly authorized by all necessary corporate action.
The execution, delivery and performance by SI of this Agreement, the Merger
Agreement and any other documents executed or to be executed in connection with
this Agreement and the consummation of the transactions provided for herein have
been duly authorized and approved by the board of directors and shareholders of
SI as required under the laws of the State of Virginia and SI's corporate
governance documents.
(b) Stone has the power and authority to execute, deliver and perform
his obligations under this Agreement and the other documents executed or to be
executed by Stone in connection with this Agreement.
2.4 Binding Effect. This Agreement, the Merger Agreement and the other
documents executed or to be executed by SI and Stone in connection with this
Agreement have been or will have been duly executed and delivered by SI and
Stone, and are or will be, when executed and delivered, the legal, valid and
binding obligations of each of SI and Stone enforceable in accordance with their
terms except that:
(a) enforceability may be limited by bankruptcy, insolvency or other
similar laws affecting creditors' rights; and
(b) the availability of equitable remedies may be limited by equitable
principles of general applicability.
2.5 Compliance with Other Instruments. Neither the execution and
delivery by SI nor Stone of this Agreement and the Merger Agreement, nor the
consummation by them of the transactions contemplated hereby and thereby, will
violate, breach, be in conflict with, or constitute a default under, or permit
the termination or the acceleration of maturity of, or result in the imposition
of any lien, claim or encumbrance upon any material property or asset of SI or
Stone pursuant to, its articles of incorporation, bylaws, partnership agreement,
operating agreement or other charter or governance document, or any note, bond,
indenture, mortgage, deed of trust, evidence of indebtedness, loan or lease
agreement, other agreement or instrument (including with customers), judgment,
order, injunction or decree by which SI or Stone is bound, to which any of them
is a party, or to which any assets of any of them are subject; provided,
however, this SECTION 2.5 shall not apply with respect to any of the foregoing
if SI is bound thereby, a party thereto, or its assets subject, solely by reason
of its status as a partner in the Partnership.
2.6 Capitalization of SI.
(a) The authorized capital stock of SI consists of Ten Thousand
(10,000) common shares. There are Five Hundred (500) common shares issued and
outstanding, all of which are owned by Stone. There are no other shareholders of
SI and no other persons with rights or options to acquire capital stock
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of SI. All of the issued and outstanding shares of capital stock of SI have been
duly authorized and validly issued and are fully paid and nonassessable. There
are no shares of capital stock of SI held in its treasury.
(b) There are no voting trusts, shareholder agreements or other voting
arrangements among the shareholders of SI.
(c) There is no outstanding subscription, contract, convertible or
exchangeable security, option, warrant, call or other right obligating SI to
issue, sell, exchange or otherwise dispose of, or to purchase, redeem or
otherwise acquire, shares of, or securities convertible into or exchangeable
for, capital stock of SI.
2.7 Absence of Certain Changes. From December 31, 1996 to the Closing
Date, (except solely as a result of SI's status as a partner in the Partnership)
SI has not:
(a) suffered any material adverse change in its business, results of
operations, working capital, assets, liabilities, or condition (financial or
otherwise) or the manner of conducting its business;
(b) suffered any material damage or destruction to or loss of its
assets not covered by insurance, or any loss of suppliers or employees;
(c) acquired or disposed of any asset, or incurred, assumed,
guaranteed, endorsed, paid or discharged any indebtedness, liability or
obligation, or subjected or permitted to be subjected any material amount of
assets to any lien, claim or encumbrance of any kind, except in the ordinary
course of business or pursuant to agreements in force at the date of this
Agreement and identified in Item 2.7 of the Disclosure Schedules;
(d) forgiven, compromised, canceled, released, waived or permitted to
lapse any material rights or claims;
(e) entered into or terminated any lease, agreement, commitment or
transaction, or agreed to or made any changes in any leases or agreements, other
than transactions and commitments entered into in the ordinary course of
business;
(f) written up, written down or written off the book value of any
assets;
(g) declared, paid or set aside for payment any dividend or
distribution with respect to its capital stock;
(h) redeemed, purchased or otherwise acquired, or sold, granted or
otherwise disposed of, directly or indirectly, any of its capital stock or
securities or any rights to acquire such capital stock or securities, or agreed
to changes in the terms and conditions of any such rights outstanding as of the
date of this Agreement;
(i) except in the ordinary course of business, increased the
compensation of any employee or paid any bonuses to any employee or contributed
to any employee benefit plan;
(j) entered into any employment, consulting, compensation or collective
bargaining agreement with any person or group, except oral employment agreements
which can be terminated at will; or
(k) entered into, adopted or amended any employee benefit plan or
severance agreements.
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2.8 Tax Liabilities. SI has filed all federal, state, county, local and
foreign tax returns and reports required to be filed by them by the date hereof,
including those with respect to income, payroll, property, withholding, social
security, unemployment, franchise, excise and sales taxes; SI has either paid in
full all taxes that have become due as reflected on any return or report and any
interest and penalties with respect thereto or have fully accrued on their books
or have established adequate reserves for all taxes payable but not yet due; and
have made cash deposits with appropriate governmental authorities representing
estimated payments of taxes, including income taxes and employee withholding tax
obligations. No extension or waiver of any statute of limitations or time within
which to file any return has been granted to SI with respect to any tax. No
unsatisfied deficiency, delinquency or default for any tax, assessment or
governmental charge has been claimed, proposed or assessed against SI nor has SI
received notice of any such deficiency, delinquency or default. SI has no reason
to believe that SI has or may have any tax liabilities other than those
reflected on the unaudited balance sheet of SI as of August 30, 1997, with any
notes thereto, and the related unaudited statements of income for the eight
months ended August 30, 1997, together with supplemental information on SI, each
prepared and attested to by the chief financial officer of SI (the "Balance
Sheets") and those arising in the ordinary course of business since the date
thereof. With regard to the foregoing, SI has relied on the accuracy and
completeness of the Schedule K-1 provided by the Partnership.
Stone shall have sole responsibility for filing all required tax
returns for SI for all periods ending on or prior to the Effective Date. OSI
shall assist Stone in preparing income tax returns and shall cooperate with
Stone to the extent necessary therefor, and Stone shall provide OSI with copies
of all such returns at least fifteen (15) days prior to filing.
2.9 No Undisclosed Liabilities. There are no liabilities or obligations
of SI (other than material liabilities arising solely by reason of SI's status
as a partner in the Partnership) of any nature, whether absolute, accrued,
contingent or otherwise, other than liabilities or obligations indicated in Item
2.9 of the Disclosure Schedules.
2.10 Title to Properties. SI has good and marketable title to the
assets reflected in their books and records as being owned by them, (except as
they have since been affected by transactions in the ordinary course of business
and consistent with past practices) the real and personal properties reflected
in the Balance Sheets (except for assets subject to financing leases required to
be capitalized under generally accepted accounting principles, all of which are
so reflected in the Balance Sheet or notes thereto) and all assets purchased by
SI since the date of the Balance Sheet, in each case free and clear of any lien,
claim or encumbrance, except as reflected in the Balance Sheet or notes thereto
and in Item 2.10 of the Disclosure Schedule and except for liens for taxes,
assessments or other governmental charges not yet due and payable.
Except for those assets acquired since the date of the Balance Sheets,
all material properties and assets owned by SI are properly reflected on the
applicable Balance Sheets and notes thereto.
2.11 Contracts. Excluding (i) contracts and commitments between Outback
or OSI and SI or the Partnership, (ii) contracts and commitments entered into by
the Partnership to which Outback or OSI is a party, (iii) contracts and
commitments entered into by SI in the ordinary course of the Partnership's
business without violation of the provisions of the Partnership Agreement, and
(iv) contracts and commitments entered into with the written consent of OSI or
Outback, Item 2.11 of the Disclosure Schedule is a complete and accurate list of
all of the contracts and commitments (including summaries of oral contracts) to
which SI is a party or by which SI is bound:
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2.12 Litigation and Government Claims. Except as indicated in Item 2.12
of the Disclosure Schedule, there is no pending suit, claim, action or
litigation or administrative, arbitration or other proceeding or governmental
investigation or inquiry against SI or the Partnership or to which any of their
business or assets is subject. Except as indicated in Item 2.12 of the
Disclosure Schedule, there are no such proceedings threatened or, to the best
knowledge of SI or Stone, contemplated or, to the best knowledge of SI or Stone,
any basis for any unasserted claims (whether or not the potential claimant may
be aware of the claim) of any nature that might be asserted against SI or the
Partnership.
2.13 No Violation of Any Instrument. Except as indicated in Item 2.13
of the Disclosure Schedule, SI is not in violation of or default under nor has
any event occurred that, with the lapse of time or the giving of notice or both,
would constitute a violation of or default under or permit the termination or
the acceleration of maturity of or result in the imposition of a lien, claim or
encumbrance upon any property or asset of SI pursuant to, the articles or
certificates of incorporation, bylaws or other chartering or governance document
of SI or (excluding any of the following entered into by the Partnership and to
which Outback or OSI is a signatory or to which Outback or OSI consented in
writing or which were entered into by SI in the ordinary course of business
without violation of the provisions of the Partnership Agreement) any note,
bond, indenture, mortgage, deed of trust, evidence of indebtedness, loan or
lease agreement, other material agreement or instrument (including with
customers), judgment, order, injunction or decree to which SI is a party, by
which SI is bound or to which any of the assets of SI are subject.
2.14 Necessary Approvals and Consents. Other than (a) in connection
with or in compliance with the laws of the States of Florida, Virginia, Maryland
and West Virginia with respect to effectuating the Merger, (b) consents required
to be obtained from applicable liquor control authorities, (c) consents required
to be obtained from lessors, and (d) under the provisions of the Securities Act
of 1933, as amended, the Securities Exchange Act of 1934, as amended, or state
securities or blue sky laws, no authorization, consent, permit or license or
approval of or declaration, registration or filing with, any person or
governmental or regulatory authority or agency is necessary for the execution
and delivery by each of SI and Stone of this Agreement, the Merger Agreement and
the other agreements executed or to be executed by them in connection with this
Agreement, and the consummation by SI and Stone of the transactions contemplated
by this Agreement and the Merger Agreement, and the ownership and operation by
Outback of the respective businesses and properties of SI after the Effective
Date in substantially the same manner as now operated.
2.15 Compliance With Laws. Stone has no actual knowledge that SI or the
Partnership are not in compliance with any such laws applicable to their
respective business, where failure to so comply would have a material adverse
effect on their business, operations, properties, assets or conditions.
2.16 Accuracy of Information Furnished. No representation or warranty
by SI or Stone in this Agreement nor any information in the Financial Statements
or in the Disclosure Schedule contains any untrue statement of a material fact
or omits to state any material fact that would make the statements herein or
therein, in light of the circumstances under which they were made, false or
misleading. Each of SI and Stone have disclosed to OSI and Outback all facts
known to them that are material to SI's and the Partnership's respective
businesses, operations, financial condition or prospects.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF STONE
In addition to the representations and warranties contained in ARTICLE
2, Stone represents and warrants to OSI and Outback as follows:
3.1 Authority and Validity. He has the capacity and authority to
execute, deliver and perform this Agreement and all other agreements and
documents they are executing or will execute in connection herewith or
therewith.
3.2 Binding Effect. This Agreement and the other documents executed or
to be executed by Stone in connection with this Agreement have been or will have
been duly executed and delivered by him and are or will be, when executed and
delivered, their legal, valid and binding obligations enforceable in accordance
with their terms except that:
(a) enforceability may be limited by bankruptcy, insolvency or other
similar laws affecting creditors' rights; and
(b) the availability of equitable remedies may be limited by equitable
principles of general applicability.
3.3 Ownership. Stone is the sole record and beneficial shareholder of
SI and no other person has any rights (in any form) to acquire any capital stock
of SI.
3.4 Voting. He acknowledges that in his individual capacity as
shareholder and director of SI, he has voted in favor of the execution and
delivery of this Agreement and the Merger Agreement.
3.5 Residency. Stone is, and has been at all times during the one year
ending on the date hereof, a resident of the State of Virginia.
3.6 Compliance with Other Instruments. Neither the execution and
delivery by Stone of this Agreement and the Merger Agreement, nor the
consummation by him of the transactions contemplated hereby and thereby will
violate, breach, be in conflict with or constitute a default under or permit the
termination or the acceleration of maturity of or result in the imposition of
any lien, claim or encumbrance upon any material property or asset of Stone
pursuant to any note, bond, indenture, mortgage, deed of trust, evidence of
indebtedness, loan or lease agreement, other agreement or instrument (including
with customers), judgment order, injunction or decree by which Stone is bound,
to which he is a party or to which he is subject.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF OSI AND OUTBACK
OSI and Outback jointly and severally represent and warrant to SI and
Stone as follows:
4.1 Organization and Good Standing. OSI and Outback are corporations
duly organized, validly existing and in good standing under the laws of the
States of Delaware and Florida, respectively.
4.2 Foreign Qualification. Outback is duly qualified or licensed to do
business and in good standing as a foreign corporation in Virginia, Maryland and
West Virginia and in every other jurisdiction where the failure to so qualify
could have a material adverse effect on its respective business, operations,
assets or financial condition.
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4.3 Power and Authority. OSI and Outback each have the corporate power
and authority and all licenses and permits required by governmental authorities
to own, lease and operate their respective properties and assets and to carry on
their respective business as currently being conducted.
4.4 Authority and Validity. OSI and Outback each have the corporate
power and authority to execute, deliver and perform their respective obligations
under this Agreement, the Merger Agreement and the other documents executed or
to be executed by OSI and Outback in connection with this Agreement and the
execution, delivery and performance by OSI and Outback of this Agreement, the
Merger Agreement and the other documents executed or to be executed by OSI and
Outback in connection with this Agreement have been duly authorized by all
necessary corporate action.
4.5 Binding Effect. This Agreement, the Merger Agreement and the other
documents executed or to be executed by OSI and Outback in connection with this
Agreement have been or will have been duly executed and delivered by OSI and
Outback and are or will be, when executed and delivered, the legal, valid and
binding obligations of OSI and Outback, enforceable in accordance with their
terms except that:
(a) enforceability may be limited by bankruptcy, insolvency or other
similar laws affecting creditors' rights; and
(b) the availability of equitable remedies may be limited by equitable
principles of general applicability.
4.6 Compliance with Other Instruments. Neither the execution and
delivery by OSI and/or Outback of this Agreement, the Merger Agreement, nor the
consummation by it of the transactions contemplated hereby and thereby will
violate, breach, be in conflict with or constitute a default under or permit the
termination or the acceleration of maturity of or result in the imposition of
any lien, claim or encumbrance upon any property or asset of OSI or Outback
pursuant to, the certificate of incorporation or bylaws of OSI or Outback or any
note, bond, indenture, mortgage, deed of trust, evidence of indebtedness, loan
or lease agreement, other agreement or instrument, judgment order, injunction or
decree by which OSI or Outback is bound, to which it is a party or to which its
assets are subject.
4.7 Capitalization of OSI. The authorized capital stock of OSI consists
of Two Hundred Million (200,000,000) shares of Common Stock, $.01 par value and
Two Million (2,000,000) shares of Preferred Stock, $.01 par value, of which
approximately 48,030,588 shares of Common Stock and no shares of Preferred Stock
were issued and outstanding as of March 7, 1997. All of the issued and
outstanding shares of OSI Common Stock have been duly authorized and validly
issued and are fully paid and nonassessable. The shares of OSI Common Stock to
be issued in exchange for SI's capital stock at the Effective Date, when issued
and delivered, will be duly authorized, validly issued, fully paid and
nonassessable. As of the date hereof, except for (i) employee and director stock
options to acquire shares of OSI Common Stock and (ii) employee stock ownership
plans, there are no options, warrants or other rights, agreements or commitments
outstanding obligating Outback or OSI to issue shares of its capital stock. All
of the outstanding shares of capital stock of Outback are owned by OSI, free and
clear of any lien or encumbrance.
4.8 SEC Reports. OSI has delivered to SI and Stone true and complete
copies of its (i) Annual Report on Form 10-K for the year ended December 31,
1996; (ii) Proxy Statement used in connection with its 1997 Annual Meeting of
Shareholders; (iii) 1997 Annual Report to Shareholders; (iv) all periodic
reports, if any, on Form 8-K filed with the Securities and Exchange Commission
since December 31, 1996 to the date hereof; and (v) all Forms 10-Q, if any,
filed with the Securities and Exchange Commission since
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EXHIBIT 23.01
INDEPENDENT AUDITORS' CONSENT
To the Board of Directors and Stockholders of
Outback Steakhouse, Inc.
Tampa, Florida
We consent to the incorporation by reference in this Annual Report of Outback
Steakhouse, Inc., (the "Company") on Form 10-K of our report on the Consolidated
Financial Statements of the Company dated February 20, 1998 in the Company's
Annual Report to Shareholders.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Tampa, Florida
March 27, 1998
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December 31, 1996, to the date hereof. Such documents and reports did not on
their dates or the date of filing, contain an 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. OSI has filed all material documents required to be
filed by it with the SEC and all such documents complied as to form with the
applicable requirements of law. Copies of all other reports filed by OSI with
the SEC from the date hereof to and including the Effective Date have been or
will be delivered to SI and Stone. All financial statements and schedules
included in the documents referred to in this SECTION 4.8 were prepared in
accordance with generally accepted accounting principles, applied on a
consistent basis except as noted therein and fairly present the information
purported to be shown therein.
4.9 Litigation and Government Claims. There is no pending suit, claim,
action or litigation or administrative, arbitration or other proceeding or
governmental investigation or inquiry against OSI or Outback which would,
severally or in the aggregate, have a material adverse effect on the business,
results of operations, assets or the condition, financial or otherwise, of OSI
and its subsidiaries, taken as a whole. There are no such proceedings threatened
or, to the knowledge of OSI or Outback, contemplated or any unasserted claims
(whether or not the potential claimant may be aware of the claim), which might,
severally or in the aggregate have a material adverse effect on the business,
results of operations, assets or the condition, financial or otherwise, of OSI
and its subsidiaries, taken as a whole.
4.10 Necessary Approvals and Consents. Other than (a) in connection
with or in compliance with the laws of the States of Florida, Virginia, Maryland
and West Virginia with respect to effectuating the Merger, (b) consents required
to be obtained from applicable liquor control authorities and (c) consents
required to be obtained from lessors, no authorization, consent, permit or
license or approval of or declaration, registration or filing with, any person
or governmental or regulatory authority or agency is necessary for the execution
and delivery by OSI and Outback of this Agreement, the Merger Agreement and the
other agreements executed or to be executed by either of them in connection with
this Agreement and the consummation by OSI and Outback of the transactions
contemplated by this Agreement and the Merger Agreement.
4.11 Absence of Certain Changes or Events. Except as disclosed in
public filings by OSI with the Securities and Exchange Commission prior to the
date hereof and the Closing Date, since December 31, 1996, there has not been
any material adverse change in the financial condition, results of operations or
the business, properties, assets or liabilities of Outback or OSI.
ARTICLE 0
XXXXX XXXXXXXXX XX XX, XXXXX, XXX AND OUTBACK
SI and Stone, jointly and severally, on the one hand, and OSI and
Outback, jointly and severally on the other hand, covenant with each other as
follows:
5.1 Notice of any Material Change. Until the Effective Date, each of
SI, Stone, OSI and Outback shall, promptly after the first notice or occurrence
thereof but prior to the Effective Date, advise the others in writing of any
event or the existence of any state of facts that:
(a) would make any of its representations and warranties in this
Agreement untrue in any material respect; or
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(b) would otherwise constitute a material adverse change in the
business, results of operation, working capital, assets, liabilities or
condition (financial or otherwise) of OSI, Outback or SI and their respective
subsidiaries, taken as a whole. No supplement or amendment to any Disclosure
Schedule shall have any effect for the purpose of determining the satisfaction
of or compliance with the conditions to the obligations of the parties to
consummate the Merger set forth elsewhere in this Agreement.
5.2 Cooperation. Until the Effective Date, each of the parties hereto
shall and shall cause each of its affiliates to use its best efforts to:
(a) proceed promptly to make or give the necessary applications,
notices, requests and filings to obtain at the earliest practicable date and, in
any event, before the Closing Date, the approvals, authorizations and consents
necessary to consummate the transactions contemplated by this Agreement;
(b) cooperate with and keep the other informed in connection with this
Agreement; and
(c) take such actions as the other parties may reasonably request to
consummate the transactions contemplated by this Agreement and use its best
efforts and diligently attempt to satisfy, to the extent within its control, all
conditions precedent to the obligations to close this Agreement.
5.3 Post-Closing Adjustment. As soon as practicable after the Effective
Date, but in no event more than forty-five (45) days thereafter, OSI shall
determine and report in writing to all parties hereto:
(a) the amount of current assets of SI as of the Effective Date;
(b) the amount of all liabilities of SI (other than liabilities
specified in Item 11.1 of the SI Disclosure Schedule to the extent assumed by
Outback) which were not paid in full prior to the Effective Date;
(c) the estimated amount of all federal and state taxes, including, but
not limited to, federal and state income taxes, payable by SI for the short tax
year ending on the Effective Date;
Upon receipt of such report, Stone (by notice to OSI as provided
herein) shall have a period of ten (10) days in which to object in writing to
any portion or item of such report. In the event no objection is timely made,
OSI's report shall be final and binding on all parties. If timely objection is
made, the chief financial officer of OSI and Stone (and at the expense of Stone)
shall meet and attempt to agree on the items to which objection was made. If
such persons cannot agree within thirty (30) days from the date of written
objection, the items on which agreement has not been reached shall be submitted
to the Tampa, Florida office of Price Waterhouse (or other agreed upon
independent "Big Six" accounting firm) for a resolution of such items and whose
decision shall be final and binding on all parties. The fees and expenses of
Price Waterhouse (or other accounting firm) shall be paid by the non-prevailing
party.
If, as finally determined, the sum of Subsection (a) above exceeds the
sum of Subsections (b) and (c), OSI shall pay such excess to Stone within ten
(10) days of such final determination. If, as finally determined, the sum of
Subsections (b) and (c) exceeds the sum of Subsection (a), Stone shall pay such
excess to OSI within ten (10) days of the final determination.
5.4 Distribution and Allocations. The parties acknowledge and agree
that notwithstanding the effective date of the Merger, Outback shall be entitled
to SI's entire share of Partnership distributions of cash flow, and shall be
allocated SI's shares of profit and loss, from and after October 1, 1997.
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5.5 Additional Agreements.
(a) Subject to the terms and conditions herein provided, each of the
parties hereto agrees to use all reasonable efforts to take or cause to be
taken, all actions and to do or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement, including using all
reasonable efforts to obtain all necessary waivers, consents and approvals, to
effect all necessary registrations and filings and to lift any injunction or
other legal bar to the Merger (and, in such case, to proceed with the Merger as
expeditiously as possible), subject, however, to the appropriate vote of the
shareholders of SI.
(b) In case at any time after the Effective Date any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and/or directors of OSI and Outback and Stone shall take all such
necessary action.
(c) Neither Outback, OSI, SI nor Stone shall take any action which
would jeopardize the characterization of the Merger as a reorganization within
the meaning of Section 368(a) of the Code or the treatment of the Merger for
financial reporting purposes as a pooling of interests.
ARTICLE 6
COVENANTS OF SI AND STONE
SI and Stone covenant and agree with OSI as follows:
6.1 Securities Law Compliance. Stone represents and warrants, and
covenants to Outback and OSI that:
(a) Stone has received all schedules and exhibits and the documents
furnished to SI pursuant to SECTION 4.8;
(b) Stone has had the opportunity to ask questions of and receive
answers from representatives of the management of OSI concerning the terms and
conditions of the transactions contemplated hereby and to obtain all additional
information that OSI possesses or could acquire without unreasonable expense
that is necessary to verify the accuracy of information furnished to Stone.
(c) OSI and Outback have furnished him with all information requested
and full access to materials concerning OSI and Outback which the Stone and/or
his advisors deemed necessary to properly evaluate the Merger. Such information
and access have been made available and utilized to the extent Stone considers
necessary and advisable in making an informed investment decision, and Stone has
consulted his own tax advisor and understands the evaluation of such materials
may require the assistance of experts and Stone has utilized such experts to the
extent deemed necessary.
(d) Stone understands that the OSI Common Stock to be received is an
investment of a speculative nature and Stone must bear the risks thereof for an
indefinite period of time. Stone has adequate means for providing for his needs,
is able to bear the economic risk of the investment and has no need for
liquidity in the OSI Common Stock to be received in the Merger.
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(e) Stone and/or his representatives or advisors who have acted with or
on behalf of Stone and who have advised Stone in this matter have such knowledge
and experience in financial and business matters that Stone is capable of
evaluating the merits and risks of the Merger for OSI Common Stock.
(f) Stone is participating in the Merger solely for his account as a
private investment, and Stone has no present agreement, understanding,
arrangement or intention to sell or transfer all or any portion of the shares of
OSI Common Stock to be issued in the Merger to any other person or persons.
Stone does not presently intend to enter into any such agreement or undertaking
and there are no present circumstances which will compel Stone to sell any OSI
otherwise transfer the shares (except for de minimis gifts of shares) unless
they are registered under the Securities Act and applicable state securities
laws or, in the opinion of OSI and its counsel, an exemption from registration
is available therefor.
(g) The investment by Stone in OSI Common Stock pursuant to the Merger
is a suitable investment for Stone given the investment goals and objectives of
Stone.
(h) Stone agrees to indemnify and hold OSI and Outback and each of
their respective officers, directors and advisors harmless against all liability
arising out of or in connection with any purchase, resale or distribution by
Stone of any OSI Common Stock received hereby which is effected other than in
strict compliance with the terms hereof and applicable law.
(i) Stone understands that the shares of OSI Common Stock to be issued
in the Merger will not be registered under the Securities Act, nor any state
securities laws, and such OSI Common Stock may not be sold or transferred except
in compliance with such laws. Stone agrees to comply with the restrictions on
transfer contained in Section 6.2 hereof.
(j) Stone understands that OSI will place an appropriate legend on the
certificate representing OSI Common Stock to be received restricting the
transfer of the shares and stop-transfer instructions will be given to the
transfer agent for the OSI Common Stock with respect to such certificates.
(k) Stone is a natural person (i) whose net worth (the excess of total
assets over total liabilities), individually or jointly with his spouse, exceeds
$1,000,000 (inclusive of the value of home, home furnishings and automobiles);
or (ii) who had an Individual Annual Adjusted Gross Income in excess of $200,000
in each of the two most recent tax years or joint income with Stone's spouse in
excess of $300,000 in each of those years and reasonably expects to reach the
same income level in the current tax year.
6.2 Restriction on Transfer.
(a) Stone covenants and agrees not to sell, convey, pledge, grant a
security interest in, assign or otherwise transfer or encumber any of the OSI
Common Stock to be issued in the Merger except in accordance with the following
provisions:
(i) Stone may transfer twenty percent (20%) of the OSI Common
Stock received in the Merger at any time after October 1, 1998;
(ii) Stone may transfer an additional twenty percent (20%) of
the OSI Common Stock received in the Merger at any time after October 1, 1999;
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(iii) Stone may transfer an additional twenty percent (20%) of
the OSI Common Stock received into the Merger at any time after October 1, 2000;
(iv) Stone may transfer an additional twenty percent (20%) of
the OSI Common Stock received in the Merger at any time after October 1, 2001;
(v) Stone may transfer the remaining twenty percent (20%) of
the OSI Common Stock received in the Merger at any time after October 1, 2002.
(b) Notwithstanding the provisions of (a) above, Stone may make bona
fide gifts of OSI Common Stock to immediate family members or trusts of which
immediate family members are the exclusive beneficiaries provided, however, the
donees of such gifts shall take such OSI Common Stock subject to the
restrictions contained in (a) above. For purposes of determining Stone's
compliance with (i) through (v) above, any transfers by donees shall be
aggregated with, and shall be considered as, transfers by Stone for purposes of
calculating compliance with (i) through (v) of subsection (a).
(c) OSI's transfer agent shall maintain stop transfer instructions on
the OSI Common Stock issued in the Merger and the certificates representing such
shares shall bear an appropriate legend evidencing the restrictions contained in
(a) above.
6.3 Payment of Liabilities. SI and Stone covenant and agree that all
debts and liabilities of SI relating to periods prior to the Closing Date shall
be paid or satisfied in full prior to the Effective Date, except only current
liabilities and those debts and liabilities of SI specified in Item 11.1 of the
Disclosure Schedules.
6.4 Pooling. Stone agrees that until such time as financial results of
OSI covering at least thirty (30) days of combined operations of OSI and SI
subsequent to the Effective Date have been published, he will not sell or
otherwise dispose of any shares of OSI Common Stock held by him as of the
Effective Date or any of such shares thereafter acquired by him at any time or
from time to time prior to the date of such publication. OSI shall give
instructions to its transfer agent and registrar, Bank of New York, Inc., with
respect to the shares of OSI Common Stock issued pursuant to the Merger, to the
effect that no transfer of such shares shall be effected until the date on which
the requisite financial results have been published and OSI and the transfer
agent may take any action, including placing an appropriate legend on the
certificates, they deem necessary to enforce this provision.
ARTICLE 7
COVENANTS OF OSI AND OUTBACK
OSI and Outback, jointly and severally, covenant and agree with SI and
Stone as follows:
7.1 Employment Agreements. Solely with respect to the Merger, and any
consequential termination of any partnership by operation of law, Outback agrees
not to elect to terminate the Employment Agreements between the Partnership, as
employer, and the general managers of the Partnership's Outback Steakhouse(R)
restaurants, as employees. Outback shall succeed to all rights and obligations
of the Partnership under such Employment Agreements. Nothing contained herein
shall be construed as in any way limiting Outback's right to terminate any such
Employment Agreement as a result
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of any circumstance or event other than the Merger and consequential termination
of the Partnership by operation of law.
7.2 Assumed Liabilities. OSI and Outback agree to assume and pay the
liabilities specified in Item 11.1 (subject to the amount limits specified in
Item 11.1 of the Disclosure Schedules) and to indemnify and hold harmless Stone
from any loss or liability therefor.
ARTICLE 8
JOINT CONDITIONS PRECEDENT TO CLOSING OBLIGATIONS
Except as may be waived by OSI, the obligations of SI, Stone, OSI and
Outback to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction, on or before the Closing Date, of each of the
following conditions:
8.1 Consents to Transaction. SI, Outback and OSI shall have received
all consents or approvals and made all applications, requests, notices and
filings with, any person, governmental authority or governmental agency required
to be obtained or made in connection with the consummation of the transactions
contemplated by this Agreement. There shall have been obtained from all state
and local governments and governmental agencies all approvals and consents
necessary to enable SI and/or the Partnership, as applicable, to transfer their
liquor licenses and permits to Outback, to enable Outback to assume such
licenses and permits or to enable Outback to operate restaurants (of the kind
and quality customarily operated by Outback) using such permits or licenses.
Copies of all consents and approvals received by any party pursuant to this
SECTION 8.1 shall be furnished to the other party.
8.2 Absence of Litigation. No governmental agency or authority shall
have instituted or threatened in writing to institute, any action or proceeding
seeking to delay, restrain, enjoin or prohibit the consummation of the
transactions contemplated by this Agreement and no order, judgment or decree by
any court or governmental agency or authority shall be in effect that enjoins,
restrains or prohibits the same or otherwise would materially interfere with the
operation of the assets and business of SI or the Partnership or OSI and its
subsidiaries, including the surviving corporation in the Merger, after the
Closing Date.
8.3 Dissenter's Rights. The number of shares of capital stock of SI for
which shareholders have exercised appraisal or dissenters' rights under
applicable law shall be a number which, in the sole and absolute discretion of
OSI, does not jeopardize the financial reporting and accounting treatment of the
Merger specified in SECTION 1.12 or is otherwise not contrary to the best
interests of Outback or OSI.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS OF SI
The obligations of SI and Stone to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction on or before
the Closing Date of each of the following conditions:
9.1 Compliance. OSI and Outback shall have, or shall have caused to be,
satisfied or complied with and performed in all material respects all terms,
covenants and conditions of this Agreement to be complied with or performed by
OSI and Outback on or before the Closing Date.
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9.2 Representations and Warranties. All of the representations and
warranties made by OSI and Outback in this Agreement, and in all certificates
and other documents delivered by OSI and Outback to SI and Stone pursuant hereto
or in connection with the transactions contemplated hereby, shall have been true
and correct in all material respects as of the date hereof and shall be true and
correct in all material respects at the Closing Date with the same force and
effect as if such representations and warranties had been made at and as of the
Closing Date, except for changes permitted or contemplated by this Agreement.
9.3 Material Adverse Changes. Since the date hereof, there shall have
occurred no material adverse change in the business, properties, assets,
liabilities, results of operations or condition, financial or otherwise, of OSI
and Outback, taken as a whole.
ARTICLE 10
CONDITIONS PRECEDENT TO OBLIGATIONS
OF OSI AND OUTBACK
Except as may be waived by OSI and Outback, the obligations of OSI and
Outback to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction, on or before the Closing Date, of each of the
following conditions:
10.1 Compliance. SI and Stone shall have or shall have caused to be
satisfied or complied with and performed in all material respects all terms,
covenants and conditions of this Agreement to be complied with or performed by
any of them on or before the Closing Date.
10.2 Representations and Warranties. All of the representations and
warranties made by SI and/or Stone in this Agreement, the Disclosure Schedule,
and in all certificates and other documents delivered by SI or Stone pursuant
hereto or in connection with the transactions contemplated hereby, shall have
been true and correct in all material respects as of the date hereof and shall
be true and correct in all material respects at the Closing Date with the same
force and effect as if such representations and warranties had been made at and
as of the Closing Date, except for changes permitted or contemplated by this
Agreement.
10.3 Current Financial Status. OSI shall have received the unaudited
financial statements of SI as of August 31, 1997, for the period then ended.
10.4 Material Adverse Changes. Since December 31, 1996, there shall
have occurred no material adverse change in the business, properties, assets,
liabilities, results of operations or condition, financial or otherwise, of SI
or the Partnership.
10.5 Pooling. OSI shall have received a letter from Deloitte & Touche,
in form and substance satisfactory to OSI and dated not more than five days
prior to the Closing Date, to the effect that the Merger shall qualify as a
pooling of interests for financial reporting purposes.
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ARTICLE 11
INDEMNIFICATION
Stone, on the one hand, and OSI and Outback, jointly and severally, on
the other hand, agree as follows:
11.1 Indemnification Based on Agreement. Subject to the limitations
contained in SECTION 11.2 hereof, Stone shall indemnify and hold harmless OSI,
Outback and SI, and OSI, Outback and SI, jointly and severally, shall indemnify
and hold harmless Stone, against any losses, claims, damages or liabilities to
which such indemnified party may become subject, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any facts or circumstances that would constitute a breach by the other of
any representation, warranty or covenant contained herein or in any agreement
executed pursuant hereto and will reimburse any legal or other expenses
reasonably incurred by any indemnified party in connection with investigating or
defending any such loss, claim, damage, liability or action.
In addition to the above, Stone shall indemnify OSI, Outback and SI, as
provided in the first paragraph of this SECTION 11.1, against any loss, claim,
damage or liability arising out of (i) any tax liability of SI for any period
prior to and including October 1, 1997 and (ii) any debt of SI (other than the
debts specified in Item 11.1 of the Disclosure Schedule to the extent assumed by
Outback), and (iii) all claims, obligations, causes of action and liabilities,
of whatever kind or character, of any of SI which arise out of or are based upon
events first occurring on or before the Effective Date, except only the
liabilities assumed by Outback as specified in Item 11.1 of the Disclosure
Schedule.
11.2 Limitation. Stone shall have no obligation under SECTION 11.1 to
indemnify OSI, Outback or SI for any liability, loss, claim or damage arising
out of or based upon facts or actions first occurring after the Effective Date.
All obligations of indemnity (other than those relating to tax obligations of SI
under SECTION 11.1 above which shall continue for the period specified in
SECTION 12.4(B) hereof) shall terminate two (2) years from the Closing Date;
provided, however, the obligations of indemnity shall not terminate with respect
to any matter for which indemnification is claimed within two (2) years from the
Closing Date.
11.3 Cooperation. If any claim, demand, action, suit, proceeding or
investigation arising out of or pertaining to this Agreement or the transactions
contemplated hereby is begun or asserted, whether begun or asserted before or
after the Closing Date, the parties hereto will cooperate and use their best
efforts to defend against and respond thereto.
11.4 Notice. An indemnified party shall give notice to the indemnifying
party or parties within ten (10) business days after actual receipt of service
or summons to appear in any action begun in respect of which indemnity may be
sought hereunder. Failure to so notify the indemnifying party or parties shall
cause the indemnified party to be liable for any damage caused by failure to
give timely notice. The indemnifying party or parties may participate at their
own expense and with their counsel in the defense of such action. If the
indemnifying party or parties so elect within a reasonable time after receipt of
such notice, they may assume the defense of such action with counsel chosen by
the indemnifying party or parties and approved by the indemnified party in such
action, unless the indemnified party reasonably objects to such assumption on
the ground that its counsel has advised it that there may be legal defenses
available to it that are different from or in addition to those available to the
indemnifying party or parties, in which case the indemnified party shall have
the right to employ counsel approved by the indemnifying party or parties. If
the indemnifying party or parties assume the defense of such action, the
indemnifying party or parties shall not be liable for fees and expenses of
counsel for the indemnified party incurred thereafter in connection with such
action. In no event shall the indemnifying party or parties be liable for the
fees and expenses of more than one counsel for the indemnified parties in
connection with any one
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action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances unless, in the
reasonable opinion of such counsel, there is, under applicable standards of
professional conduct, a conflict on any significant issue between the positions
of any two or more indemnified parties.
ARTICLE 12
MISCELLANEOUS
12.1 Termination. This Agreement and the transactions contemplated
hereby may be terminated at any time on or before the Closing Date
(notwithstanding approval by the shareholders of SI:
(a) by mutual consent of SI and OSI;
(b) by OSI if there has been a material misrepresentation or breach of
warranty in the representations and warranties of SI or Stone set forth herein
or if there has been any material failure on the part of SI or Stone to comply
with their obligations hereunder;
(c) by SI if there has been a material misrepresentation or breach of
warranty in the representations and warranties of OSI or Outback set forth
herein or if there has been any material failure on the part of OSI or Outback
to comply with its obligations hereunder;
(d) by either OSI, SI or Stone, if the transactions contemplated by
this Agreement have not been consummated by October 31, 1997, unless such
failure of consummation is due to the failure of the terminating party to
perform or observe the covenants, agreements and conditions hereof to be
performed or observed by it at or before the Closing Date;
(e) by either OSI, or SI if the conditions precedent to its obligations
to close this Agreement have not been satisfied or waived by it at or before the
Closing Date; and
(f) by either SI or OSI if the transactions contemplated hereby violate
any nonappealable final order, decree or judgment of any court or governmental
body or agency having competent jurisdiction.
12.2 Expenses. Each party hereto shall pay its own expenses incurred in
connection with this Agreement and the transactions contemplated hereby.
12.3 Entire Agreement. This Agreement and the exhibits and Disclosure
Schedule hereto constitute and contain the complete agreement among the parties
with respect to the transactions contemplated hereby and supersede all prior
agreements and understandings among the parties with respect to such
transactions. The parties hereto have not made any representation or warranty
except as expressly set forth in this Agreement, the Merger Agreement or in any
certificate or schedule delivered pursuant hereto. The obligations of any party
under any agreement executed pursuant to this Agreement shall not be affected by
this SECTION 12.3.
12.4 Survival of Representations and Warranties.
(a) The representations, warranties and indemnification obligations of
OSI and Outback contained herein or in any exhibit, certificate, document or
instrument delivered pursuant to this Agreement
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shall survive the Closing for a period of two years; provided, however, that the
obligations of OSI and Outback under ARTICLE 7 and ARTICLE 11 hereof shall
survive for the periods provided therein.
(b) Except where otherwise specifically provided in this Agreement, the
representations, warranties and indemnification obligations of Stone contained
herein or in any exhibit, schedule, certificate, document or instrument
delivered pursuant to this Agreement shall survive the Closing for a period of
three years from the Effective Date; provided, however, the representations and
warranties contained in SECTION 2.7 shall survive the Closing for a period
ending four years after the filing of SI's federal income tax return for the
period including the Effective Date.
12.5 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which when so executed and delivered shall be
deemed an original and such counterparts together shall constitute only one
original.
12.6 Notices. All notices, demands, requests or other communications
that may be or are required to be given, served or sent by any party to any
other party pursuant to this Agreement shall be in writing and shall be mailed
by registered or certified mail, return receipt requested, postage prepaid or
transmitted by hand delivery, recognized national overnight delivery service,
telegram or telex, addressed as follows:
If to SI or Stone: STONE, INC.
00000 Xxxx Xxxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx,III
If to OSI or Outback: OUTBACK STEAKHOUSE, INC.
000 Xxxxx Xxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
General Counsel
Each party may designate by notice in writing a new address to which
any notice, demand, request or communication may thereafter be so given, served
or sent. Each notice, demand, request or communication that is mailed, delivered
or transmitted in the manner described above shall be deemed sufficiently given,
served, sent and received for all purposes at such time as it is delivered to
the addressee (with the return receipt, the delivery receipt, the affidavit of
messenger or (with respect to a telex) the answer back being deemed conclusive
evidence of such delivery) or at such time as delivery is refused by the
addressee upon presentation.
12.7 Successors and Assigns. This Agreement and the rights, interests
and obligations hereunder shall be binding upon and shall inure to the benefit
of the parties hereto and, except as otherwise specifically provided for herein,
their respective successors and assigns.
12.8 Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Florida without giving effect to
principles of comity or conflicts of law thereof.
12.9 Waiver and Other Action. This Agreement may be amended, modified
or supplemented only by a written instrument executed by the parties against
which enforcement of the amendment, modification or supplement is sought.
19
25
12.10 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable, such provision shall be fully severable and
this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision were never a part hereof; the remaining provisions
hereof shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance; and in lieu of
such illegal, invalid or unenforceable provision, there shall be added
automatically as part of this Agreement, a provision as similar in its terms to
such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
12.11 Headings. All headings and captions in this Agreement are
intended solely for the convenience of the parties and none shall be deemed to
affect the meaning or construction of any provision hereof.
12.12 Construction. All references herein to the masculine, neuter or
singular shall be construed to include the masculine, feminine, neuter or
plural, where applicable.
12.13 Jurisdiction and Venue. The parties agree that any action brought
by either party against the other in any court, whether federal or state, shall
be brought within the State of Florida in the judicial circuit in which OSI has
its principal place of business. Each party hereby agrees to submit to the
personal jurisdiction of such courts and hereby waives all questions of personal
jurisdiction or venue for the purpose of carrying out this provision, including,
without limitation, the claim or defense therein that such courts constitute an
inconvenient forum.
12.14 Enforcement. In the event it is necessary for any party to retain
legal counsel or institute legal proceedings to enforce the terms of this
Agreement, including, without limitation, obligations upon expiration or
termination, the prevailing party shall be entitled to receive from the
non-prevailing party, in addition to all other remedies, all costs of such
enforcement including, without limitation, attorney's fees and court costs and
including appellate proceedings.
12.15 Further Assurances. Each party covenants and agrees to execute
and deliver, prior to or after the Merger, such further documents as may
reasonably be requested by another party to fully effectuate the transactions
provided for herein.
12.16 Equitable Remedies. The parties hereto acknowledge that a refusal
by a party to consummate the transactions contemplated hereby will cause
irreparable harm to the other parties, for which there may be no adequate remedy
at law. A party not in default at the time of such refusal shall be entitled, in
addition to other remedies at law or in equity, to specific performance of this
Agreement by the party that refused to consummate the transactions contemplated
hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
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26
"OSI"
Attest: OUTBACK STEAKHOUSE, INC.
a Delaware corporation
By: By:
----------------------------- -------------------------------
XXXXXX X. XXXXX XXXXXX X. XXXXXX
Title: Secretary Title: President
"Outback"
Attest: OUTBACK STEAKHOUSE OF FLORIDA, INC.,
a Florida corporation
By: By:
----------------------------- -------------------------------
XXXXXX X. XXXXX XXXX X. XXXXX
Title: Secretary Title: President
"SI"
Attest: STONE, INC.
a Virginia corporation
By: By:
----------------------------- -------------------------------
Title: Secretary XXXXXXXX X. XXXXX, III
Title: President
Witness: "Stone"
-----------------------------------
XXXXXXXX X. XXXXX, III
21
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EXHIBIT A
ARTICLES OF MERGER
THIS AGREEMENT, PLAN AND ARTICLES OF MERGER ("Articles of Merger"),
dated as of October 1, 1997, is entered into by and among STONE, INC., a
Virginia corporation ("SI"); OUTBACK STEAKHOUSE, INC., a Delaware corporation
("OSI"); and OUTBACK STEAKHOUSE OF FLORIDA, INC., a Florida corporation
("Outback").
W I T N E S S E T H:
WHEREAS, SI is a corporation duly organized and validly existing under
the laws of the State of Virginia, and the authorized and outstanding capital
stock of SI is as follows:
Authorized Shares Issued
SI Capital Stock and Outstanding
-- ------------- ---------------
STONE, INC. 10,000 Common Shares 500 Common Shares
WHEREAS, OSI is a corporation duly organized and validly existing under
the laws of the State of Delaware; and
WHEREAS, OSI is authorized to issue 2,000,000 shares of Preferred
Stock, par value $.01, none of which are outstanding and 200,000,000 shares of
Common Stock, $.01 par value (the "OSI Common Stock"), of which approximately
48,030,588 shares of OSI Common Stock are issued and outstanding as of March 7,
1997; and
WHEREAS, Outback is a wholly owned subsidiary of OSI; and
WHEREAS, the respective Boards of Directors of each of SI, Outback, and
OSI deem it advisable, for the benefit of their respective corporations and
shareholders, that SI be merged into Outback, with Outback as the surviving
corporation (in its capacity as surviving corporation, Outback is hereinafter
sometimes referred to as the "Surviving Corporation"), pursuant to the
provisions of Sections 607.1101- 607.1107 of the Florida Business Corporation
Act (the "Florida Act") and the laws of the State of Virginia ("Virginia Law"),
and have approved these Articles of Merger; and
WHEREAS, the Board of Directors of SI has directed that these Articles
of Merger be submitted to its voting shareholder for approval and adoption and
the voting shareholder of SI has approved and adopted these Articles of Merger
in accordance with Virginia Law and the corporate governance documents of SI by
unanimous written consent dated September , 1997; and
WHEREAS, OSI as the sole shareholder of Outback has approved and
adopted these Articles of Merger by written consent on September 30, 1997; and
WHEREAS, the Agreement and Plan of Reorganization (the "Reorganization
Agreement"), which Outback, OSI, and SI have entered, contemplates the execution
and delivery of these Articles of Merger.
A-1
28
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein and for the purpose of prescribing the terms and
conditions of the merger and such other details and provisions as are deemed
necessary or desirable, the parties hereto agree as follows:
MERGER. The names of the corporations which propose to merge are STONE,
INC., a Virginia corporation ("SI"), and OUTBACK STEAKHOUSE OF FLORIDA, INC.
("Outback"). In accordance with the provisions of the Florida Act and Virginia
Law at the Effective Date (as hereinafter defined), SI shall be merged into
Outback, and Outback shall be the Surviving Corporation and as such shall
continue to be governed by the laws of the State of Florida. The plan of merger
set forth in these Articles of Merger was duly authorized by each of Outback and
SI, respectively, by all action required by the laws under which it was
incorporated or organized and by its constituent documents.
1. CONTINUATION OF CORPORATE EXISTENCE. The corporate existence and
identity of Outback, with all its purposes, powers, franchises, privileges,
rights and immunities, shall continue unaffected and unimpaired by the merger
and the corporate existence and identity of SI with all its purposes, powers,
franchises, privileges, rights and immunities at the Effective Date shall be
merged with and into that of Outback, and Outback as the Surviving Corporation
shall be vested fully therewith, and the separate corporate existence and
identity of SI shall thereafter cease except to the extent continued by statute.
2. EFFECTIVE DATE. The merger shall become effective (hereinbefore and
hereinafter called the "Effective Date") upon the later of (i) filing of these
Articles of Merger with the Secretary of State of the State of Florida and the
Secretary of State of the State of Virginia; or (ii) October 1, 1997. Such
Effective Date shall be indicated on Certificates of Merger issued by the
Secretary of State of the State of Florida and by the Secretary of State of the
State of Virginia pursuant to the Florida Act and Virginia Law.
3. CORPORATE GOVERNMENT.
(a) The Certificate of Incorporation of Outback, as in effect
on the Effective Date, shall continue in full force and effect and
shall be the Certificate of Incorporation of the Surviving Corporation.
(b) The Bylaws of Outback, as in effect as of the Effective
Date, shall continue in full force and effect and shall be the Bylaws
of the Surviving Corporation.
(c) The members of the Board of Directors and the officers of
the Surviving Corporation shall be the persons holding such positions
for Outback as of the Effective Date.
4. CONVERSION OF SHARES. The manner and basis of converting the capital
stock of SI into OSI Common Stock, subject to SECTION 5(C) below with respect to
fractional shares, shall be as follows:
(a) Each share of SI common stock which shall be outstanding
immediately prior to the Effective Date shall at the Effective Date, by
virtue of the merger and without any action on the part of the holder
thereof, be converted into and exchanged for 285.584 shares of OSI
Common Stock.
(b) The Outback Capital Stock outstanding immediately prior to
the Effective Date shall be unaffected by the merger.
A-2
29
(c) The stock transfer books of SI shall be closed as of the
close of business on the Effective Date and no transfer of record of
any of its capital stock shall take place thereafter.
(d) No fractional shares of OSI Common Stock and no
certificates or scrip therefor shall be issued. Instead one whole share
of OSI Common Stock shall be issued to each holder of shares of common
stock of the merging corporations whose fractional share interest is .5
or more of one whole share; each fraction of less than .5 of one whole
share shall be disregarded.
(e) Notwithstanding the foregoing, the OSI shall not be
required to issue or distribute more than 142,792 shares of OSI Common
Stock pursuant to the merger, less any shares reserved for dissenters'
rights, as described in Article 1 of the Reorganization Agreement.
(f) All of the shares of OSI Common Stock, when delivered
pursuant to the provisions of these Articles of Merger, shall be
validly issued, fully paid and nonassessable.
(g) At the Effective Date, each holder of certificates
representing shares of the common stock of SI shall thereupon cease to
have any rights with respect to such shares and shall be deemed to be a
shareholder of OSI to the extent of the number of shares of OSI Common
Stock to which such shareholder shall be entitled in accordance with
these Articles of Merger; and shall surrender certificates representing
shares of the common stock of SI to the OSI, whereupon such holder
shall receive a certificate or certificates for the number of shares of
OSI Common Stock to which such holder is entitled hereunder.
5. RIGHTS AND LIABILITIES OF THE SURVIVING CORPORATION. The Surviving
Corporation shall have the following rights and obligations:
(a) The Surviving Corporation shall have all the rights,
privileges, immunities and powers and shall be subject to all the
duties and liabilities of a corporation organized under the laws of the
State of Florida.
(b) The Surviving Corporation shall possess all of the rights,
privileges, immunities and franchises, of either a public or private
nature, of Outback, and SI and all property, real, personal and mixed
and all debts due on whatever account, including subscription to shares
and all other chooses in action and every other interest of or
belonging or due to SI shall be taken and deemed to be transferred or
invested in the Surviving Corporation without further act or deed.
(c) At the Effective Date, the Surviving Corporation shall
thenceforth be responsible and liable for all liabilities and
obligations of SI and any claim existing or action or proceeding
pending by or against SI or Outback may be prosecuted as if the merger
had not occurred or the Surviving Corporation may be substituted in its
place. Neither the rights of creditors nor any liens upon the property
of SI or Outback shall be impaired by the merger.
6. CONSENT OF SHAREHOLDERS. These Articles of Merger has been adopted
by the shareholders of SI in accordance with Virginia Law and its corporate
governance documents by unanimous written consent effective as of , 1997.
These Articles of Merger has been adopted by the written consent of the sole
shareholder of Outback dated September 30, 1997 pursuant to the Florida Act.
X-0
00
0. DISSENTING SHAREHOLDERS. If any shareholder of SI files a written
objection to these Articles of Merger before a vote of the shareholders is taken
hereon and complies with the further provisions of the Florida Act or Virginia
Law, as applicable, he may be paid the fair value of his shares. If any
shareholder of SI lawfully elects, pursuant to the Florida Act or Virginia Law,
as applicable, to exercise or pursue his right to dissent from any of the
corporate actions referred to in these Articles of Merger with respect to the
shares of common stock of SI owned by such shareholder (the "Dissenting
Shares"), such shareholder shall be entitled to exercise only those rights
available to him as set forth in the Florida Act or Virginia Law, as applicable,
and, in that event, only in the manner set forth therein. During the period in
which any such shareholder shall be exercising or pursuing any of such
shareholder's rights of dissent as specified in the Florida Act or Virginia Law,
as applicable, such shareholder shall have no other rights pursuant to or
arising from these Articles of Merger.
8. REORGANIZATION AGREEMENT. These Articles of Merger is intended to
supplement the Reorganization Agreement and is not intended to conflict with or
supersede that agreement and, in the event of any conflict, the provisions of
the Reorganization Agreement shall control.
9. COPIES. A copy of these Articles of Merger shall be on file at the
principal place of business of the Surviving Corporation located at 000 Xxxxx
Xxx Xxxxxx, Xxxxx 000, Xxxxx, Xxxxxxx 00000. A copy of these Articles of Merger
will be furnished by the Surviving Corporation, on request and without cost, to
any shareholder of any corporation that is a party hereto.
IN WITNESS WHEREOF, the undersigned have executed this Agreement, Plan
and Articles of Merger as of the day and year first above written.
"OSI"
Attest: OUTBACK STEAKHOUSE, INC.
a Delaware corporation
By: By:
----------------------------- -------------------------------
XXXXXX X. XXXXX XXXXXX X. XXXXXX
Title: Secretary Title: President
X-0
00
XXXXX XX XXXXXXX )
) ss
COUNTY OF HILLSBOROUGH )
On this ______ day of October, 1997, before me, personally came XXXXXX X.
XXXXXX and XXXXXX X. XXXXX, President and Secretary, respectively, of OUTBACK
STEAKHOUSE, INC., a Delaware corporation, who are personally known to me, and
each being first duly sworn, did depose and say that they executed the foregoing
on behalf of said corporation by order of the Board of Directors of said
corporation.
(NOTARY SEAL)
------------------------------------
(Notary Signature)
NOTARY PUBLIC
Commission No.
---------------------
"Outback"
Attest: OUTBACK STEAKHOUSE OF FLORIDA, INC.,
a Florida corporation
By: By:
----------------------------- -------------------------------
XXXXXX X. XXXXX XXXX X. XXXXX
Title: Secretary Title: President
STATE OF FLORIDA )
) ss
COUNTY OF HILLSBOROUGH )
On this ______ day of October, 1997, before me, personally came XXXX X.
XXXXX and XXXXXX X. XXXXX, President and Secretary, respectively, of OUTBACK
STEAKHOUSE OF FLORIDA, INC., a Florida corporation, who are personally known to
me, and each being first duly sworn, did depose and say that they executed the
foregoing on behalf of said corporation by order of the Board of Directors of
said corporation.
(NOTARY SEAL)
------------------------------------
(Notary Signature)
NOTARY PUBLIC
Commission No.
---------------------
A-5
32
"SI"
Attest: STONE, INC.
a Virginia corporation
By: By:
----------------------------- -------------------------------
Title: Secretary XXXXXXXX X. XXXXX, III
Title: President
STATE OF VIRGINIA )
) ss
COUNTY OF )
On this ______ day of October, 1997, before me, personally came XXXXXXXX X.
XXXXX, III and ___________________________, President and Secretary,
respectively, of STONE, INC., a Virginia corporation, who are personally known
to me, and each being first duly sworn, did depose and say that they executed
the foregoing on behalf of said corporation by order of the Board of Directors
of said corporation.
(NOTARY SEAL)
------------------------------------
(Notary Signature)
NOTARY PUBLIC
Commission No.
---------------------
A-6
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EXHIBIT B
DISCLOSURE SCHEDULES
Item 2.7 Any asset acquired or disposed of, or indebtedness incurred,
assumed, guaranteed, endorsed, paid or discharged; any material
amount of assets subjected or permitted to be subjected to any
liability or obligation or to any lien, claim or encumbrance of
any kind, except in the ordinary course of business or pursuant
to agreements in force at the date of this Agreement and
identified below:
None.
Item 2.9(a) Material liabilities or obligations, contingent or otherwise of
the Partnership of any nature:
None.
Item 2.9(b) Liabilities or obligations of SI (other than material
liabilities arising solely by reason of SI's status as a partner
in the Partnership) of any nature, whether absolute, accrued,
contingent or otherwise:
None.
Item 2.10 Liens and encumbrances on real and personal property purchased
by SI or the Partnership since the date of the Balance Sheet,
except for liens for taxes, assessments or other governmental
charges not yet due and payable.
None.
Item 2.11 Contracts and commitments not in the ordinary course of the
Partnership's business.
None.
Item 2.12 Pending suits, claims, actions or litigation or administrative,
arbitration or other proceedings or governmental investigations
or inquiries against SI or the Partnership to which any of their
business or assets is subject.
None.
B-1
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Item 2.13 Violations and defaults of SI and the Partnership.
None.
Item 11.1 Current liabilities and those debts and liabilities of SI agreed
to be assumed by Outback:
None.
08/07/97
B-2
