AGREEMENT AND PLAN OF MERGER
By and Among
XXXXXX'X SEAFOOD RESTAURANTS, INC.,
LSR ACQUISITION CORP.
and
RAINFOREST CAFE, INC.
Dated as of February 9, 2000
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement") is made and entered
into as of February 9, 2000, by and among Rainforest Cafe, Inc., a
Minnesota corporation (the "Company"), Xxxxxx'x Seafood Restaurants, Inc.,
a Delaware corporation ("Purchaser"), and LSR Acquisition Corp., a Delaware
corporation and wholly owned subsidiary of Purchaser ("Merger Sub") .
WITNESSETH:
WHEREAS, the respective Boards of Directors of Merger Sub, Purchaser and
the Company have approved the merger (the "Merger") of the Company with and
into Merger Sub in accordance with the laws of the State of Minnesota and
the State of Delaware and the provisions of this Agreement;
WHEREAS, as a condition and inducement to Purchaser's and the Merger Sub's
entering into this Agreement and incurring the obligations set forth
herein, concurrently with the execution and delivery of this Agreement,
Purchaser is entering into Stockholder Agreements, in the form of Exhibit A
hereto (the "Stockholder Agreements"), with each of the stockholders named
therein, pursuant to which, among other things, such stockholders have
agreed to vote their Company Shares (as defined in Section 1.3) in favor of
the Merger provided for herein;
WHEREAS, the Board of Directors of the Company (including all of the
disinterested directors of the Company's Board of Directors) has approved
the transactions contemplated by this Agreement and the Stockholder
Agreements in accordance with the provisions of Sections 302A.613 and
302A.673 of the Minnesota Business Corporation Act ("MBCA");
WHEREAS, for United States federal income tax purposes, it is intended that
the Merger provided for herein shall qualify as a reorganization under
Section 368(a) of the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder (the "Code"), and this
Agreement is intended to be and is adopted as a plan of reorganization
within the meaning of Section 368 of the Code; and
WHEREAS, the Company, Merger Sub and Purchaser desire to make certain
representations, warranties and agreements in connection with, and
establish various conditions precedent to, the Merger.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements hereinafter set forth, the parties
hereto agree as follows:
ARTICLE I
TERMS OF THE MERGER
1.1. The Merger. Upon the terms and subject to the
conditions of this Agreement, the Merger shall be consummated in accordance
with the MBCA and the Delaware General Corporation Law (the "DGCL"). At the
Effective Time (as defined below), upon the terms and subject to the
conditions of this Agreement, the Company shall be merged with and into
Merger Sub in accordance with the MBCA and the DGCL and the separate
existence of the Company shall thereupon cease, and Merger Sub, as the
surviving corporation in the Merger (the "Surviving Corporation") shall
continue its corporate existence under the laws of the State of Delaware as
a subsidiary of Purchaser. The parties shall prepare and execute Articles
of Merger (the "Articles of Merger") and a Certificate of Merger (the
"Certificate of Merger") in order to comply in all respects with the
requirements of the MBCA and the DGCL, respectively, and with the
provisions of this Agreement.
1.2. The Closing; Effective Time. (a) The closing of the
Merger (the "Closing") shall take place at the offices of Skadden, Arps,
Slate Xxxxxxx & Xxxx LLP, Xxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at
10:00 a.m. local time on a date to be specified by the parties which shall
be no later than the third business day after the date that all of the
closing conditions set forth in Article VI have been satisfied or waived
(if waivable) unless another time, date or place is agreed upon in writing
by the parties hereto.
(b) The Merger shall become effective at the time of the
filing of the Articles of Merger with the Secretary of State of the State
of Minnesota and the Certificate of Merger with the Secretary of State of
the State of Delaware in accordance with the applicable provisions of the
MBCA and the DGCL or at such later time as may be specified in the Articles
of Merger and Certificate of Merger. The time when the Merger shall become
effective is herein referred to as the "Effective Time" and the date on which
the Effective Time occurs is herein referred to as the "Closing Date."
1.3. Merger Consideration. (a) Subject to the provisions
of this Agreement and any applicable backup or other withholding
requirements, each of the issued shares (the "Company Shares") of common
stock, no par value, of the Company (the "Company Stock") outstanding
immediately prior to the Effective Time (except for Company Shares to be
cancelled, as set forth in Section 1.3(d) and Dissenting Shares, as defined
in Section 1.9 hereof) shall be converted, by virtue of the Merger and
without any action on the part of the holder thereof, into the right to
receive such number of shares of the common stock, par value $.01 per
share, of Purchaser (the "Purchaser Stock") or cash, without any interest
thereon, as specified in Section 1.5 hereof, subject to payment of cash in
lieu of any fractional share as hereinafter provided (the "Merger
Consideration").
(b) No fractional shares of Purchaser Stock shall be
issued pursuant to the Merger nor will any fractional share interest
involved entitle the holder thereof to vote, to receive dividends or to
exercise any other rights of a shareholder of Purchaser. In lieu thereof,
any holder of Company Stock who would otherwise be entitled to a fractional
share of Purchaser Stock pursuant to the provisions hereof shall receive an
amount in cash pursuant to Section 1.5(h) hereof.
(c) Subject to the provisions of this Agreement, at the
Effective Time, each share of Merger Sub common stock outstanding
immediately prior to the Merger shall be converted, by virtue of the Merger
and without any action on the part of the holder thereof, into one share of
common stock of the Surviving Corporation (the "Surviving Corporation
Common Stock"), which shares of Surviving Corporation Common Stock shall
constitute all of the issued and outstanding capital stock of the Surviving
Corporation and shall be wholly owned by Purchaser.
(d) Any shares of Company Stock owned by Purchaser,
Merger Sub or any other wholly owned subsidiaries of Purchaser immediately
prior to the Merger shall be cancelled and retired at the Effective Time
and shall cease to exist and no Purchaser Stock or other consideration
shall be delivered in exchange therefor.
(e) On and after the Effective Time, holders of
certificates representing shares of Company Stock (the "Certificates")
immediately prior to the Effective Time shall cease to have any rights as
stockholders of the Company, except the right to receive the Merger
Consideration for each Company Share held by them or the right, if so
demanded, to receive payment from the Company of the "fair value" of such
Company Shares as determined in accordance with the MBCA.
1.4. Election Procedure. Each holder of Company Shares
(other than holders of Company Shares to be cancelled as set forth in
Section 1.3(d)) shall have the right to submit a request specifying the
number of Company Shares that such holder desires to have converted into
Purchaser Stock in the Merger and the number of Company Shares that such
holder desires to have converted into the right to receive $5.23 in cash
per Company Share (the "Purchaser Share Price"), without interest (the
"Cash Consideration"), in the Merger in accordance with the following
procedure:
(a) Each holder of Company Shares may specify in a
request made in accordance with the provisions of this Section 1.4 (herein
called an "Election") (i) the number of Company Shares owned by such holder
that such holder desires to have converted into Purchaser Stock in the
Merger (a "Stock Election") and (ii) the number of Company Shares owned by
such holder that such holder desires to have converted into the right to
receive the Cash Consideration in the Merger (a "Cash Election").
(b) Purchaser shall prepare a form (the "Form of
Election") pursuant to which each holder of Company Shares at the close of
business on the Election Deadline (as defined in Section 1.4(d)) may make
an election and which shall be mailed to the Company's stockholders in
accordance with Section 1.4(c) so as to permit the Company's stockholders
to exercise their right to make an Election prior to the Election Deadline.
(c) Purchaser shall use all reasonable efforts to mail
the Form of Election available to all stockholders of the Company at least
ten business days prior to the Election Deadline.
(d) Any Company stockholder's election shall have been
made properly only if the person authorized to receive Elections and to act
as exchange agent under this Agreement, which exchange agent shall be
mutually acceptable to the Company and Purchaser (the "Exchange Agent")
shall have received, by 5:00 p.m. local time in the city in which the
principal office of such Exchange Agent is located, on the date of the
Election Deadline, a Form of Election properly completed and signed and
accompanied by certificates for the Company Shares to which such Form of
Election relates (or by an appropriate guarantee of delivery of such
certificates, as set forth in such Form of Election, from a member of any
registered national securities exchange or of the National Association of
Securities Dealers, Inc. or a commercial bank or trust company in the
United States provided such certificates are in fact delivered to the
Exchange Agent by the time required in such guarantee of delivery). Failure
to deliver Company Shares covered by such a guarantee of delivery within
the time set forth on such guarantee shall be deemed to invalidate any
otherwise properly made Election. As used herein, "Election Deadline" means
the date announced by Purchaser, as the last day on which Forms of Election
will be accepted; provided, that such date shall be a business day no
earlier than twenty business days prior to the Effective Time and no later
than the date on which the Effective Time occurs.
(e) Any Company stockholder may at any time prior to the
Election Deadline change his Election by written notice received by the
Exchange Agent prior to the Election Deadline accompanied by a revised Form
of Election properly completed and signed.
(f) Any Company stockholder may, at any time prior to the
Election Deadline, revoke his Election by written notice received by the
Exchange Agent prior to the Election Deadline or by withdrawal prior to the
Election Deadline of his certificates for Company Shares, or of the
guarantee of delivery of such certificates, previously deposited with the
Exchange Agent. All Elections shall be revoked automatically if the
Exchange Agent is notified in writing by Purchaser or the Company that this
Agreement has been terminated. Any Company stockholder who shall have
deposited certificates for Company Shares with the Exchange Agent shall
have the right to withdraw such certificates by written notice received by
the Exchange Agent and thereby revoke his Election as of the Election
Deadline if the Merger shall not have been consummated prior thereto.
(g) Purchaser shall have the right to make rules, not
inconsistent with the terms of this Agreement, governing the validity of
the Forms of Election, the manner and extent to which Elections are to be
taken into account in making the determinations prescribed by Section 1.5,
the issuance and delivery of certificates for Purchaser Stock into which
Company Shares are converted in the Merger and the payment of cash for
Company Shares converted into the right to receive the Cash Consideration
in the Merger.
1.5. Issuance of Purchaser Stock and Payment of Cash
Consideration; Proration. The manner in which each Company Share (other
than Dissenting Shares and Company Shares to be cancelled as set forth in
Section 1.3(d)) shall be converted into Purchaser Stock or the right to
receive the Cash Consideration on the Effective Date shall be as set forth
in this Section 1.5. All references to "outstanding" Company Shares in this
Section 1.5 shall mean all Company Shares outstanding immediately prior to
the Effective Time minus Company Shares owned by Purchaser or by any direct
or indirect wholly-owned subsidiary of Purchaser.
(a) As is more fully set forth below, the number of
Company Shares to be converted into Purchaser Stock in the Merger pursuant
to this Agreement shall be equal as nearly as practicable to 65% of all
outstanding Company Shares and the number of Company Shares to be converted
into the right to receive the Cash Consideration in the Merger pursuant to
this Agreement shall be equal as nearly as practicable to 35% of all
outstanding Company Shares.
(b) If Stock Elections are received for a number of
Company Shares that is 65% or less of the outstanding Company Shares, each
Company Share covered by a Stock Election shall be converted in the Merger
into 0.5816 of a share of Purchaser Stock (the "Conversion Fraction"). The
parties hereto acknowledge that the Conversion Fraction was based on an
agreed upon value of $9.00 per share of Purchaser Stock. In the event that
between the date of this Agreement and the Effective Time, the issued and
outstanding shares of Purchaser Stock shall have been affected or changed
into a different number of shares or a different class of shares as a
result of a stock split, reverse stock split, stock dividend, spin-off,
extraordinary dividend, recapitalization, reclassification or other similar
transaction, the Conversion Fraction shall be appropriately adjusted.
(c) If Stock Elections are received for more than 65% of
the outstanding Company Shares, each Non-Electing Company Share (as defined
in Section 1.5(g)) and each Company Share for which a Cash Election has
been received shall be converted into the right to receive the Cash
Consideration in the Merger, and the Company Shares for which Stock
Elections have been received shall be converted into Purchaser Stock and
the right to receive the Cash Consideration in the following manner:
(1) The Exchange
Agent will distribute to each holder of Company Shares as to which a Stock
Election has been made a number of shares of Purchaser Stock equal to the
Conversion Fraction for a fraction of such Company Shares, the numerator of
which fraction shall be 65% of the number of then outstanding Company
Shares and the denominator of which shall be the aggregate number of
Company Shares as to which Stock Elections have been made.
(2) Company Shares
covered by a Stock Election and not fully converted into the right to
receive Purchaser Stock as set forth in clause (1) above shall be
converted in the Merger into the right to receive the Cash
Consideration for each such Company Share, in an amount to offset the
reduction of shares of Purchaser Stock affected pursuant to clause (1)
above.
(d) If Cash Elections are received for a number of
Company Shares that is 35% or less of the outstanding Company Shares, each
Company Share covered by a Cash Election shall be converted in the Merger
into the right to receive the Cash Consideration.
(e) If Cash Elections are received for a number of
Company Shares that is more than 35% of the outstanding Company Shares,
each Non-Electing Company Share (as defined in Section 1.5(g)) and each
Company Share for which a Stock Election has been received shall be
converted in the Merger into a fraction of a share of Purchaser Stock equal
to the Conversion Fraction, and the Company Shares for which Cash Elections
have been received shall be converted into the right to receive the Cash
Consideration and Purchaser Stock in the following manner:
(1) The Exchange
Agent will distribute to each holder of Company Shares as to which a
Cash Election has been made the Cash Consideration for a fraction of
such Company Shares, the numerator of which fraction shall be 35% of
the number of then outstanding Company Shares and the denominator of
which shall be the aggregate number of Company Shares covered by Cash
Elections.
(2) Company Shares
covered by a Cash Election and not fully converted into the right to
receive the Cash Consideration as set forth in clause (1) above shall
be converted in the Merger into the right to receive a number of
shares of Purchaser Stock equal to the Conversion Fraction for each
such Company Share to offset the reduction in Cash Consideration
affected pursuant to clause (1) above.
(f) If Non-Electing Company Shares are not converted
under either Section 1.5(c) or Section 1.5(e), the Exchange Agent shall
convert each Non- Electing Company Share into such combination of Purchaser
Stock and Cash Consideration such that the sum of the number of Company
Shares converted into cash pursuant to this Section 1.5(f) and the number
of Company Shares for which Cash Elections have been received is as close
as practicable to 35% of the outstanding Company Shares. The portion of
each Non-Electing Company Share not so converted into the right to receive
the Cash Consideration pursuant to clause (i) above shall be converted in
the Merger into a fraction of a share of Purchaser Stock equal to the
Conversion Fraction.
(g) For the purposes of this Section 1.5, outstanding
Company Shares as to which an Election is not in effect at the Election
Deadline shall be called "Non-Electing Company Shares." If Purchaser and
the Company shall determine that any Election is not properly made with
respect to any Company Shares, such Election shall be deemed to be not in
effect, and the Company Shares covered by such Election shall, for purposes
hereof, be deemed to be Non-Electing Company Shares.
(h) Notwithstanding anything to the contrary contained
herein, no certificates or scrip representing fractional shares of
Purchaser Stock shall be issued upon the surrender for exchange of
Certificates, no dividend or distribution with respect to Company Shares
shall be payable on or with respect to any fractional share and such
fractional share interests shall not entitle the owner thereof to vote or
to any other rights of a stockholder of Purchaser. In lieu of any such
fractional share of Purchaser Stock, Purchaser shall pay to each former
stockholder of the Company who otherwise would be entitled to receive a
fractional share of Purchaser Stock an amount in cash determined by
multiplying (i) the Purchaser Share Price by (ii) the fractional interest
in a share of Purchaser Stock to which such holder would otherwise be
entitled.
1.6. Issuance of Purchaser Stock. Immediately prior to
the Effective Time, Purchaser shall deliver, in trust, to the Exchange
Agent certificates representing an aggregate number of shares of Purchaser
Stock as nearly as practicable equal to the number of shares to be
converted into Purchaser Stock as determined in Section 1.5. As soon as
practicable after the Effective Time, each holder of Company Shares
converted into Purchaser Stock pursuant to Section 1.3(a), upon surrender
to the Exchange Agent (to the extent not previously surrendered with a Form
of Election) of one or more certificates for such Company Shares for
cancellation, shall be entitled to receive certificates representing the
number of shares of Purchaser Stock into which such Company Shares shall
have been converted in the Merger. No dividends or distributions that have
been declared will be paid to persons entitled to receive certificates for
shares of Purchaser Stock until such persons surrender their certificates
for Company Shares, at which time all such dividends shall be paid. In no
event shall the persons entitled to receive such dividends be entitled to
receive interest on such dividends. If any certificate for such Purchaser
Stock is to be issued in a name other than that in which the certificate
for Company Shares surrendered in exchange therefor is registered, it shall
be a condition of such exchange that the person requesting such exchange
shall pay to the Exchange Agent any transfer or other taxes required by
reason of issuance of certificates for such Purchaser Stock in a name other
than the registered holder of the certificate surrendered, or shall
establish to the satisfaction of the Exchange Agent that such tax has been
paid or is not applicable. Notwithstanding the foregoing, neither the
Exchange Agent nor any party hereto shall be liable to a holder of Company
Shares for any Purchaser Stock or dividends thereon delivered to a public
official pursuant to any applicable abandoned property, escheat or similar
law.
1.7. Payment of Cash Consideration. Immediately following
the Effective Time, Purchaser shall deposit in trust with the Exchange
Agent an amount in cash up to an amount equal to the Purchaser Share Price
multiplied by the number of Company Shares to be converted into the right
to receive the Cash Consideration as determined in Section 1.5. As soon as
practicable after the Effective Time, the Exchange Agent shall distribute
to holders of Company Shares converted into the right to receive the Cash
Consideration pursuant to Section 1.3(a), upon surrender to the Exchange
Agent (to the extent not previously surrendered with a Form of Election) of
one or more certificates for such Company Shares for cancellation, a bank
check for an amount equal to the Purchaser Share Price times the number of
Company Shares so converted. In no event shall the holder of any such
surrendered certificates be entitled to receive interest on any of the Cash
Consideration to be received in the Merger. If such check is to be issued
in the name of a person other than the person in whose name the
certificates for the Company Shares surrendered for exchange therefor are
registered, it shall be a condition of the exchange that the person
requesting such exchange shall pay to the Exchange Agent any transfer or
other taxes required by reason of issuance of such check to a person other
than the registered holder of the certificates surrendered, or shall
establish to the satisfaction of the Exchange Agent that such tax has been
paid or is not applicable. Notwithstanding the foregoing, neither the
Exchange Agent nor any party hereto shall be liable to a holder of Company
Shares for any amount paid to a public official pursuant to any applicable
abandoned property, escheat or similar law.
1.8. Options. (a) Except as provided in paragraph (b)
below with respect to the Company's 1996 Employee Stock Purchase Plan, as
amended (the "Company ESPP"), at the Effective Time, each then outstanding
and unexercised option (the "Company Options") exercisable for shares of
Company Stock shall become fully vested and exercisable (by virtue of their
terms) and Purchaser shall cause each holder of a Company Option to
receive, by virtue of the Merger and without any action on the part of the
holder thereof, options exercisable for shares of Purchaser Stock
("Purchaser Replacement Options") having the same terms and conditions as
the Company Options (including such terms and conditions as may be
incorporated by reference into the agreements evidencing the Company
Options pursuant to the plans or arrangements pursuant to which such
Company Options were granted) except that the exercise price and the number
of shares issuable upon exercise shall be divided and multiplied,
respectively, by the Conversion Fraction, and rounded to the nearest whole
cent or number, respectively. Purchaser shall use all reasonable efforts to
ensure that any Company Options that qualified as incentive stock options
under Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code") prior to the Effective Time continue to so qualify after the
Effective Time. Purchaser shall take all corporate action necessary to
reserve for issuance a sufficient number of shares of Purchaser Stock for
delivery upon the exercise of Purchaser Replacement Options after the
Effective Time. Promptly after the Effective Time, Purchaser shall file or
cause to be filed all registration statements on Form S-8 or other
appropriate form as may be necessary in connection with the purchase and
sale of Purchaser Stock contemplated by such Purchaser Replacement Options
subsequent to the Effective Time, and shall maintain the effectiveness of
such registration statements (and maintain the current status of the
prospectus or prospectuses contained therein) for so long as any of the
Purchaser Replacement Options registered thereunder remain outstanding. As
soon as practicable after the Effective Time, Purchaser shall qualify under
applicable state securities laws the issuance of such shares of Purchaser
Stock issuable upon exercise of Purchaser Replacement Options. Purchaser's
Board of Directors shall take all actions necessary on the part of
Purchaser to enable the acquisition of Purchaser Stock, Purchaser
Replacement Options and subsequent transactions in Purchaser Stock after
the Effective Time pursuant to Purchaser Replacement Options by persons
subject to the reporting requirements of Section 16(a) of the Securities
Exchange Act (as defined below) to be exempt from the application of
Section 16(b) of the Securities Exchange Act, to the extent permitted
thereunder.
(b) The current offerings in process as of the date of
this Agreement under the Company ESPP shall continue, and Company Shares
shall be issued to participants thereunder on the next currently scheduled
purchase dates thereunder occurring after the date hereof as provided
under, and subject to the terms and conditions of, the Company ESPP. The
Company may, consistent with past practice, commence new offering periods
under the Company ESPP on or after the date hereof and prior to the
Effective Time at an exercise price for each such offering not less than as
is required under the Company ESPP. Immediately prior to the Effective
Time, pursuant to the Company ESPP, all offerings under the Company ESPP
shall be terminated, and each participant shall be deemed to have purchased
immediately prior to the Effective Time, to the extent of payroll
deductions accumulated by such participant as of such offering period end,
the number of whole shares of Company Stock at a per share price determined
pursuant to the provisions of the Company ESPP, and each participant shall
receive a cash payment equal to the balance, if any, of such accumulated
payroll deductions remaining after such purchase of such shares. As of the
Effective Time, each participant shall receive, by virtue of the Merger,
the number of whole shares of Purchaser Stock or cash into which the shares
of Company Stock such participant has so purchased under the Company ESPP
have been converted pursuant to the Merger as provided in Section 1.3(a)
hereof, plus the cash value of any fraction of a share of Purchaser Common
Stock as provided in Section 1.5(h) hereof, plus any dividends or
distributions as provided in Section 1.6. The Company ESPP and all purchase
rights thereunder shall terminate effective as of the Effective Time.
1.9. Dissenting Shares. Notwithstanding any provision of
this Agreement to the contrary, each outstanding share of Company Stock,
the holder of which has demanded and perfected such holder's right to
dissent from the Merger and to be paid the fair value of such shares in
accordance with Sections 302A.471 and 302A.473 of the MBCA and, as of the
Effective Time, has not effectively withdrawn or lost such dissenters'
rights ("Dissenting Shares"), shall not be converted into or represent a
right to receive the Purchaser Stock into which shares of Company Stock are
converted, or to receive cash, pursuant to Section 1.5 hereof, but the
holder thereof shall be entitled only to such rights as are granted by the
MBCA. Purchaser shall cause the Company to make all payments to holders of
shares of Company Stock with respect to such demands in accordance with the
MBCA. The Company shall give Purchaser (i) prompt written notice of any
notice of intent to demand fair value for any shares of Company Stock,
withdrawals of such notices, and any other instruments served pursuant to
the MBCA and received by the Company, and (ii) the opportunity to conduct
jointly all negotiations and proceedings with respect to demands for fair
value for shares of Company Stock under the MBCA. The Company shall not,
except with the prior written consent of Purchaser or as otherwise required
by law, voluntarily make any payment with respect to any demands for fair
value for shares of Company Stock or offer to settle or settle any such
demands.
1.10. Articles of Incorporation and Bylaws. Subject to
Section 5.7 hereof, at and after the Effective Time until the same have
been duly amended, (i) the Articles of Incorporation of the Surviving
Corporation shall be identical to the Articles of Incorporation of Merger
Sub in effect at the Effective Time, except that the name of the Surviving
Corporation shall be Rainforest Cafe, Inc. (or a name comparable thereto),
and (ii) and the Bylaws of the Surviving Corporation shall be identical to
the Bylaws of Merger Sub in effect at the Effective Time.
1.11. Stock Transfer Books. At the Effective Time, the
stock transfer books of the Company shall be closed and no transfer of
Company Shares shall thereafter be made. If, after the Effective Time,
Certificates are presented to the Surviving Corporation, they shall be
cancelled and exchanged for cash and/or certificates representing Purchaser
Stock pursuant to this Article I.
1.12. Directors and Officers. At and after the Effective
Time, the directors of Merger Sub immediately prior to the Effective Time
shall be the directors of the Surviving Corporation, and the officers of
the Merger Sub immediately prior to the Effective Time shall be the
officers of the Surviving Corporation, in each case until their successors
are elected or appointed and qualified. If, at the Effective Time, a
vacancy shall exist on the Board of Directors or in any office of the
Surviving Corporation, such vacancy may thereafter be filled in the manner
provided by law.
1.13. Other Effects of Merger. The Merger shall have all
further effects as specified in the applicable provisions of the MBCA and the
DGCL.
1.14. Registration Statement Prospectus/Proxy Statement.
(a) For the purposes of (i) registering Purchaser Stock
for issuance to holders of the Company Shares in connection with the Merger
with the Securities and Exchange Commission ("SEC") under the Securities
Act of 1933, as amended, and the rules and regulations thereunder (the
"Securities Act"), and complying with applicable state securities laws, and
(ii) holding the meeting of the Company's shareholders to vote upon the
approval of this Agreement and the Merger and the other transactions
contemplated hereby (collectively, the "Company Proposals"), Purchaser and
the Company will cooperate in the preparation of a registration statement
on Form S-4 (such registration statement, together with any and all
amendments and supplements thereto, being herein referred to as the
"Registration Statement"), including a prospectus/proxy statement
satisfying all requirements of applicable state securities laws, the
Securities Act and the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (the "Securities Exchange Act"). Such
prospectus/proxy statement in the form mailed by the Company to its
shareholders, together with any and all amendments or supplements thereto,
is herein referred to as the "Prospectus/Proxy Statement."
(b) The Company will furnish Purchaser with such
information concerning the Company and its subsidiaries as is necessary in
order to cause the Prospectus/Proxy Statement, insofar as it relates to the
Company and its subsidiaries, to comply with applicable Law. None of the
information relating to the Company and its subsidiaries supplied by the
Company for inclusion in the Prospectus/Proxy Statement will be false or
misleading with respect to any material fact or will omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they are
made, not misleading. The Company agrees promptly to advise Purchaser if,
at any time prior to the meeting of the shareholders of the Company,
referenced herein, any information provided by it in the Prospectus/Proxy
Statement is or becomes incorrect or incomplete in any material respect and
to provide Purchaser with the information needed to correct such inaccuracy
or omission. The Company will furnish Purchaser with such supplemental
information as may be necessary in order to cause the Prospectus/Proxy
Statement, insofar as it relates to the Company and its subsidiaries, to
comply with applicable Law after the mailing thereof to the shareholders of
the Company.
(c) Purchaser will furnish the Company with such
information concerning Purchaser and its subsidiaries as is necessary in
order to cause the Prospectus/Proxy statement, insofar as it relates to
Purchaser and its subsidiaries, to comply with applicable Law. None of the
information relating to Purchaser and its subsidiaries supplied by
Purchaser for inclusion in the Prospectus/Proxy Statement will be false or
misleading with respect to any material fact or will omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading. Purchaser agrees promptly to advise the Company if,
at any time prior to the meeting of shareholders of the Company referenced
herein, any information provided by it in the Prospectus/Proxy Statement is
or becomes incorrect or incomplete in any material respect and to provide
the Company with the information needed to correct such inaccuracy or
omission. Purchaser will furnish the Company with such supplemental
information as may be necessary in order to cause the Prospectus/Proxy
Statement, insofar as it relates to Purchaser and its subsidiaries, to
comply with applicable Law after the mailing thereof to the shareholders of
the Company.
(d) The Company and Purchaser agree to cooperate in
making any preliminary filings of the Prospectus/Proxy Statement with the
SEC, as promptly as practicable, pursuant to Rule 14a-6 under the
Securities Exchange Act.
(e) Purchaser will file the Registration Statement with
the SEC and appropriate materials with applicable state securities agencies
as promptly as practicable and will use all reasonable efforts to cause the
Registration Statement to become effective under the Securities Act and all
such state filed materials to comply with applicable state securities Laws.
Purchaser shall provide the Company for its review a copy of the
Registration Statement at least such amount of time prior to each filing
thereof as is customary in transactions of the type contemplated hereby and
shall not make any filing with the SEC without the prior written consent of
the Company, which consent shall not be unreasonably withheld or delayed.
The Company authorizes Purchaser to utilize in the Registration Statement
and in all such state filed materials, the information concerning the
Company and its subsidiaries provided to Purchaser in connection with, or
contained in, the Prospectus/Proxy Statement. Purchaser promptly will
advise the Company when the Registration Statement has become effective,
and of any supplements or amendments thereto, and Purchaser will furnish
the Company with copies of all documents. Except for the Prospectus/Proxy
Statement or the preliminary prospectus/proxy statement, neither Purchaser
nor the Company shall distribute any written material that might constitute
a "prospectus" relating to the Merger or the Company Proposals within the
meaning of the Securities Act or any applicable state securities Law
without the prior written consent of the other party.
1.15. Tax-Free Reorganization. The parties intend that
the Merger qualify as a reorganization within the meaning of Section 368(a)
of the Code. None of the parties will knowingly take any action that would
cause the Merger to fail to qualify as a reorganization within the meaning
of Section 368(a) of the Code.
1.16. Additional Actions. If, at any time after the
Effective Time, the Surviving Corporation shall consider or be advised that
any deeds, bills of sale, assignments, assurances or any other actions or
things are necessary or desirable to vest, perfect or confirm of record or
otherwise in the Surviving Corporation its right, title or interest in, to
or under any of the rights, properties or assets of Merger Sub or
the Company or otherwise carry out this Agreement, the officers and
directors of the Surviving Corporation shall be authorized to execute and
deliver, in the name and on behalf of Merger Sub or the Company, all such
deeds, bills of sale, assignments and assurances and to take and do, in the
name and on behalf of Merger Sub or the Company, all such other actions and
things as may be necessary or desirable to vest, perfect or confirm any and
all right, title and interest in, to and under such rights, properties or
assets in the Surviving Corporation or otherwise to carry out this
Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedule from the Company to
Purchaser to be delivered upon the execution of this Agreement, which sets
forth certain disclosures concerning the Company and its business (the
"Company Disclosure Schedule"), each section of which only qualifies the
correspondingly numbered representation or warranty, the Company hereby
represents and warrants to Purchaser and Merger Sub as follows:
2.1. Due Incorporation and Good Standing. The Company and
each subsidiary of the Company (the "Company Subsidiaries") is a
corporation duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation and has all requisite
corporate power and authority to own, lease and operate its properties and
to carry on its business as now being conducted. The Company and each of
the Company Subsidiaries is duly qualified or licensed and in good standing
to do business in each jurisdiction in which the character of the property
owned, leased or operated by it or the nature of the business conducted by
it makes such qualification or licensing necessary, except where the
failure to be so duly qualified or licensed and in good standing would not
be reasonably likely to have a material adverse effect on the business,
assets, prospects, condition (financial or otherwise), liabilities or the
results of operations of the Company and its subsidiaries taken as a whole,
except in each case for any such effects resulting from, arising out of, or
relating to (i) general business or economic conditions, (ii) conditions
generally affecting the industry in which the Company competes, or (iii)
the taking of any action contemplated by this Agreement (a "Company
Material Adverse Effect"). The Company has heretofore made available to
Purchaser accurate and complete copies of the Articles of Incorporation and
Bylaws, as currently in effect, of the Company.
2.2. Capitalization. As of the date hereof, the
authorized capital stock of the Company consists of 50 million shares of
capital stock. As of February 8, 2000, 23,272,232 shares of Company Stock
were issued and outstanding. No other shares of capital stock of the
Company is authorized or issued. As of February 8, 2000, a total of
4,966,716 Company Shares are reserved for future issuance to employees and
directors upon exercise of any Company Options, warrants or other rights to
purchase or acquire any shares of capital stock of the Company (including
restricted stock, stock equivalents and stock units). As of February 8,
2000, there were 1,452,387 Company Options with an exercise price of $5.625
or less. Since February 2, 2000, the Company has not issued or granted
additional Company Options. All issued and outstanding shares of the
Company Stock are, and all shares which may be issued upon exercise of then
outstanding Company Options will be when issued, duly authorized, validly
issued, fully paid and non-assessable. Except as otherwise contemplated by
this Agreement, as of the date hereof there are no outstanding rights,
subscriptions, warrants, puts, calls, unsatisfied preemptive rights,
options or other agreements of any kind relating to any of the outstanding,
authorized but unissued or unauthorized shares of capital stock or any
other security of the Company, and there is no authorized or issued
security of any kind convertible into or exchangeable, for any such capital
stock or other security.
2.3. Subsidiaries. Section 2.3 of the Company Disclosure
Schedule sets forth the name and jurisdiction of incorporation or
organization of each Company Subsidiary, each of which is wholly owned by
the Company except as otherwise indicated in said Section 2.3 of the
Company Disclosure Schedule. All of the capital stock and other interests
of the Company Subsidiaries so held by the Company are owned by it or a
Company Subsidiary as indicated in said Section 2.3 of the Company
Disclosure Schedule, free and clear of any claim, lien, encumbrance,
security interest or agreement with respect thereto. All of the outstanding
shares of capital stock in each of the Company Subsidiaries directly or
indirectly held by the Company are duly authorized, validly issued, fully
paid and non-assessable and were issued free of preemptive rights and in
compliance with applicable Laws. No equity securities or other interests of
any of the Company Subsidiaries are or may become required to be issued or
purchased by reason of any options, warrants, rights to subscribe to, puts,
calls or commitments of any character whatsoever relating to, or securities
or rights convertible into or exchangeable for, shares of any capital stock
of any Company Subsidiary, and there are no contracts, commitments,
understandings or arrangements by which any Company Subsidiary is bound to
issue additional shares of its capital stock, or options, warrants or
rights to purchase or acquire any additional shares of its capital stock or
securities convertible into or exchangeable for such shares.
2.4. Authorization; Binding Agreement. The Company has
all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, including, but not limited to, the
Merger, have been duly and validly authorized by the Company's Board of
Directors, and no other corporate proceedings on the part of the Company or
any Company Subsidiary are necessary to authorize the execution and
delivery of this Agreement or to consummate the transactions contemplated
hereby (other than the requisite approval of this Agreement and the Merger
by the shareholders of the Company in accordance with the MBCA). This
Agreement has been duly and validly executed and delivered by the Company
and constitutes the legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement
of creditors' rights generally and by principles of equity regarding the
availability of remedies ("Enforceability Exceptions"). The Company's Board
of Directors (including all of the disinterested directors of the Company's
Board of Directors) has approved for purposes of Sections 302A.613 and
302A.673 of the MBCA (a) this Agreement and the Stockholder Agreements and
the transactions contemplated hereby and thereby, and (b) the formation of
any "group" for purposes of Section 13(d)(3) of the Securities Exchange Act
that may be deemed to exist as a result of the execution and delivery of
the Stockholder Agreements or otherwise in connection with the transactions
contemplated by this Agreement and the Stockholder Agreements.
2.5. Governmental Approvals. No consent, approval,
waiver or authorization of, notice to or declaration or filing with
("Consent"), any nation or government, any state or other political
subdivision thereof, any entity, authority or body exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government, including, without limitation, any governmental
or regulatory authority, agency, department, board, commission,
administration or instrumentality, any court, tribunal or arbitrator or any
self regulatory organization ("Governmental Authority") on the part of the
Company or any of the Company Subsidiaries is required in connection with
the execution or delivery by the Company of this Agreement or the
consummation by the Company of the transactions contemplated hereby other
than (i) the filing of the Articles of Merger with the Secretary of State
of the State of Minnesota in accordance with the MBCA and the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware
in accordance with the DGCL, (ii) filings with the SEC, state securities
laws administrators and the National Association of Securities Dealers,
Inc. ("NASD"), (iii) filings under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder (the "HSR Act"), (iv) such filings as may be
required in any jurisdiction where the Company is qualified or authorized
to do business as a foreign corporation in order to maintain such
qualification or authorization and (v) those Consents that, if they were
not obtained or made, would not be reasonably likely to have a Company
Material Adverse Effect.
2.6. No Violations. The execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby and
compliance by the Company with any of the provisions hereof will not (i)
conflict with or result in any breach of any provision of the Articles of
Incorporation or Bylaws or other governing instruments of the Company or
any of the Company Subsidiaries, (ii) except as set forth on Section 2.6 of
the Company Disclosure Schedule, require any Consent under or result in a
violation or breach of, or constitute (with or without due notice or lapse
of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or
provisions of any agreement or other instrument to which the Company or any
Company Subsidiaries are parties or by which their respective assets are
bound, (iii) result in the creation or imposition of any lien or
encumbrance of any kind upon any of the assets of the Company or any
Company Subsidiary or (iv) subject to obtaining the Consents from
Governmental Authorities referred to in Section 2.5 hereof, contravene any
applicable provision of any statute, law, rule or regulation or any order,
decision, injunction, judgment, award or decree ("Law") to which the
Company or any Company Subsidiary or its or any of their respective assets
or properties are subject, except, in the case of clauses (ii), (iii) and
(iv) above, for any deviations from the foregoing which would not be
reasonably likely to have a Company Material Adverse Effect.
2.7. Securities Filings. (a) The Company has made
available to Purchaser true and complete copies of (i) its Annual Reports
on Form 10-K for the years ended January 3, 1999, December 28, 1997 and
December 29, 1996 as filed with the SEC, (ii) its proxy statements relating
to all of the meetings of shareholders (whether annual or special) of the
Company since December 29, 1996, as filed with the SEC, and (iii) all other
reports, statements and registration statements and amendments thereto
(including, without limitation, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K, as amended) filed by the Company with the SEC since
December 29, 1996. The reports and statements set forth in clauses (i)
through (iii) above, and those subsequently provided or required to be
provided pursuant to this Section 2.7, are referred to collectively herein
as the "Company Securities Filings." As of their respective dates, and as
of the date of the last amendment thereof, if amended after filing, none of
the Company Securities Filings contained or, as to the Company Securities
Filings subsequent to the date hereof, will contain, any untrue statement
of a material fact or omitted or, as to the Company Securities Filings
subsequent to the date hereof, will 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. Each of
the Company Securities Filings at the time of filing and as of the date of
the last amendment thereof, if amended after filing, complied or, as to the
Company Securities Filings subsequent to the date hereof, will comply in
all material respects with the Securities Exchange Act or the Securities
Act, as applicable.
2.8. Company Financial Statements. The audited
consolidated financial statements and unaudited interim financial
statements of the Company included in the Company Securities Filings (the
"Company Financial Statements") have been prepared or will be prepared in
accordance with generally accepted accounting principles applied on a
consistent basis (except as may be indicated therein or in the notes
thereto) and present or will present fairly, in all material respects, the
financial position of the Company and its subsidiaries as at the dates
thereof and the results of their operations and cash flows for the periods
then ended, subject, in the case of the unaudited interim financial
statements, to normal year-end audit adjustments, any other adjustments
described therein and the fact that certain information and notes have been
condensed or omitted in accordance with the Securities Exchange Act. All
accounts receivable of the Company, whether reflected in the Company
Financial Statements or otherwise, represent sales actually made in the
ordinary course of business, and are current and collectible net of any
reserves shown in the Company Financial Statements filed prior to the date
hereof.
2.9. Absence of Certain Changes or Events; No Undisclosed
Liabilities. Except as set forth in Section 2.9 of the Company Disclosure
Schedule, since January 3, 1999, through the date of this Agreement, there
has not been: (i) any event that has had or would reasonably be expected to
have a Company Material Adverse Effect, (ii) any declaration, payment or
setting aside for payment of any dividend or other distribution or any
redemption or other acquisition of any shares of capital stock or
securities of the Company by the Company or any Company Subsidiary, (iii)
any material damage or loss to any material asset or property, whether or
not covered by insurance, or (iv) any change by the Company in accounting
principles or practices. Except as set forth in Section 2.9 of the Company
Disclosure Schedule, since June 30, 1999, through the date of this
Agreement, there has not been any action taken by the Company or any of the
Company Subsidiaries that, if taken during the period from the date of this
Agreement through the Effective Time, would constitute a breach of Section
4.1. Except for those liabilities that are fully reflected or reserved
against on the balance sheet of the Company included in its January 3, 1999
Form 10-K and for liabilities incurred in the ordinary course of
business consistent with past practice, since January 3, 1999, neither the
Company nor any of the Company Subsidiaries has incurred any liability of
any nature whatsoever (whether absolute, accrued, contingent or otherwise
and whether due or to become due) that, either individually or in the
aggregate, has had or would be reasonably likely to have a Company Material
Adverse Effect.
2.10. Compliance with Laws. The business of the Company
and each of the Company Subsidiaries has been operated in compliance with
all Laws applicable thereto, except for any instances of non-compliance
which would not be reasonably likely to have a Company Material Adverse
Effect.
2.11. Permits. (i) The Company and each of the Company
Subsidiaries have all permits (including signage permits) certificates,
licenses, approvals and other authorizations required in connection with
the operation of their respective businesses (collectively, "Company
Permits"), (ii) neither the Company nor any of the Company Subsidiaries is
in violation of any Company Permit and (iii) no proceedings are pending or,
to the knowledge of the Company, threatened, to revoke or limit any Company
Permit, except, in each case, those the absence or violation of which would
not be reasonably likely to have a Company Material Adverse Effect.
2.12. Litigation. Except as disclosed in the Section 2.12
of the Company Disclosure Schedule, there is no suit, action or proceeding
("Litigation") pending or, to the knowledge of the Company, threatened
against the Company or any of the Company Subsidiaries which, individually
or in the aggregate, would be reasonably likely to have a Company Material
Adverse Effect, nor is there any judgment, decree, injunction, rule or
order of any Governmental Authority outstanding against the Company or any
of the Company Subsidiaries which, individually or in the aggregate, would
be reasonably likely to have a Company Material Adverse Effect.
2.13. Contracts.
---------
(a) Neither the Company nor any of the Company
Subsidiaries is a party or is subject to any franchise, management,
royalty, license, lease or joint venture agreement or any material note,
bond, mortgage, indenture, contract, lease, license, agreement or
instrument ("Company Material Contract") that is not so listed in Section
2.13(a) of the Company Disclosure Schedule. All such Company Material
Contracts are valid and binding and are in full force and effect and
enforceable against the Company or such Company Subsidiary in accordance
with their respective terms, subject to the Enforceability Exceptions.
Neither the Company nor any of the Company Subsidiaries is in violation or
breach of or default under any such Company Material Contract where such
violation or breach would be reasonably likely to have a Company Material
Adverse Effect.
(b) Except as is listed in Section 2.13(b) of the Company
Disclosure Schedule, neither the Company nor any Company Subsidiary is a
party to, or has any of its assets or properties subject to, any agreement,
arrangement or understanding (written or oral) with any other person
(including a Company Subsidiary or an affiliate of the Company or of any
Company Subsidiary), which (i) provides capital, surplus, balance sheet or
any other form of economic or financial support to such other person, (ii)
guarantees the obligations of, or performance of any acts, by such other
person, or (iii) imposes legal liability on the Company or any Company
Subsidiary for any payments (contingent or otherwise) under any note,
guarantee, debt, bond, mortgage, indenture, contract, lease, license,
agreement or instrument.
2.14. Employee Benefit Plans. (a) Section 2.14 of the
Company Disclosure Schedule contains a complete and accurate list of all
material Benefit Plans (as defined below) maintained or contributed to by
the Company or any of the Company Subsidiaries ("Company Benefit Plan"). A
"Benefit Plan" shall include (i) an employee benefit plan as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended, together with all regulations thereunder ("ERISA"), and (ii)
whether or not described in the preceding clause, any pension, profit
sharing, stock bonus, deferred or supplemental compensation, retirement,
thrift, stock purchase or stock option plan or any other compensation,
welfare, fringe benefit or retirement plan, program, policy or arrangement
providing for benefits for or the welfare of any or all of the current or
former employees or agents of the Company or any of its subsidiaries or
their beneficiaries or dependents; provided that Benefit Plans shall not
include any multiemployer plan, as defined in Section 3(37) of ERISA (a
"Multiemployer Plan"). Each of the Company Benefit Plans has been
maintained in compliance in all material respects with its terms and all
applicable Law. Neither the Company nor any of the Company Subsidiaries
contributes to, or has any outstanding liability with respect to, any
Multiemployer Plan.
(b) The Company has identified in Section 2.14(b) of the
Company Disclosure Schedule and has made available to Purchaser true and
complete copies of (1) all severance, employment consulting and other
agreements with directors, executive officers, key employees or consultants
of the Company; (2) all severance programs and policies of each of the
Company and each Company Subsidiary with or relating to its employees or
directors; and (3) all plans, programs, agreements and other arrangements
of each of the Company and each Company Subsidiary with or relating to its
employees which contain change in control provisions. Except as set forth
in Section 2.14(b) of the Company Disclosure Schedule (which includes the
amount of the payments due under such agreements, programs, policies,
plans, or other arrangements referred to in the preceding sentence),
neither the execution and delivery of this Agreement nor the consummation
of the transactions contemplated hereby will (either alone or in
conjunction with any other event, such as termination of employment) (A)
result in any material payment (including, without limitation, severance,
unemployment compensation, golden parachute or otherwise) becoming due to
any director or any employee of the Company or any Company Subsidiary or
affiliate from the Company or any Company Subsidiary or affiliate under any
Company Benefit Plan or otherwise, (B) materially increase any benefits
otherwise payable under any Company Benefit Plan or (C) result in any
acceleration of the time of payment or vesting of any material benefits.
(c) Except as set forth in Section 2.14(c) of the Company
Disclosure Schedule, neither the Company nor any Company Subsidiary is a
party to any contract, plan, or arrangement under which it is obligated to
make or to provide, or could become obligated to make or to provide, a
payment or benefit that would be nondeductible by virtue of Section 162(m)
or 280G of the Code.
2.15. Taxes and Returns. (a) The Company and each of its
subsidiaries has timely filed, or caused to be timely filed, all Tax
Returns (as defined below) required to be filed by it, and has paid,
collected or withheld, or caused to be paid, collected or withheld, all
Taxes (as defined below) required to be paid, collected or withheld, other
than such Taxes for which adequate reserves in the Company Financial
Statements have been established. There are no claims or assessments
pending against the Company or any of the Company Subsidiaries for any
alleged deficiency in any Tax, and the Company has not been notified in
writing of any proposed Tax claims or assessments against the Company or
any of the Company Subsidiaries (other than, in each case, claims or
assessments for which adequate reserves in the Company Financial Statements
have been established or which are being contested in good faith or are
immaterial in amount). Neither the Company nor any of the Company
Subsidiaries has any outstanding waivers or extensions of any applicable
statute of limitations to assess any material amount of Taxes. There are no
outstanding requests by the Company or any of the Company Subsidiaries for
any extension of time within which to file any Tax Return or within which
to pay any Taxes shown to be due on any return. There are no liens for
material amounts of Taxes on the assets of the Company or any of the
Company Subsidiaries except for statutory liens for current Taxes not yet
due and payable.
(b) None of the Company or any of the Company
Subsidiaries has taken or agreed to take any action that would prevent the
Merger from constituting a reorganization qualifying under the provisions
of Section 368(a) of the Code.
(c) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby (either alone or in
combination with another event) will not result in any payment (whether of
severance pay, unemployment compensation, golden parachute, bonus or
otherwise), acceleration, forgiveness of indebtedness, vesting,
distribution, increase in benefits or obligation to fund benefits with
respect to any employee or director of the Company or any of the Company
Subsidiaries.
(d) None of the Company or any of the Company
Subsidiaries has been a member of any consolidated, combined, unitary or
affiliated group of corporations for any Tax purposes other than a group of
which the Company is or was the common parent corporation.
(e) None of the Company or any of the Company
Subsidiaries has made any change in accounting method or received a ruling
from, or signed an agreement with, any taxing authority that could
reasonably be expected to have a Company Material Adverse Effect following
the Closing.
(f) None of Company or any of the Company Subsidiaries is
currently being audited by any taxing authority and none of the Company or
any of its Subsidiaries has been notified by any tax authority that any
such audit is contemplated or pending.
(g) For purposes of this Agreement, the term "Tax" shall
mean any tax, custom, duty, governmental fee or other like assessment or
charge of any kind whatsoever, imposed by any Governmental Authority
(including, but not limited to, any federal, state, local, foreign or
provincial income, gross receipts, property, sales, use, license, excise,
franchise, employment, payroll, alternative or added minimum, ad valorem,
transfer or excise tax) together with any interest, addition or penalty
imposed thereon. The term "Tax Return" shall mean a report, return or other
information (including any attached schedules or any amendments to such
report, return or other information) required to be supplied to or filed
with a Governmental Authority with respect to any Tax, including an
information return, claim for refund, amended return or declaration or
estimated Tax.
2.16. Intellectual Property. (a) The Company or the
Company Subsidiaries own, or are licensed or otherwise possess legally
enforceable rights to use all: (i) trademarks and service marks (registered
or unregistered), trade dress, trade names and other names and slogans
embodying business goodwill or indications of origin, all applications or
registrations in any jurisdiction pertaining to the foregoing and all
goodwill associated therewith; (ii) patentable inventions, technology,
computer programs and software (including password unprotected interpretive
code or source code, object code, development documentation, programming
tools, drawings, specifications and data) and all applications and patents
in any jurisdiction pertaining to the foregoing, including re-issues,
continuations, divisions, continuations-in-part, renewals or extensions;
(iii) trade secrets, including confidential and other non-public
information; (iv) copyrights in writings, designs, software programs, mask
works or other works, applications or registrations in any jurisdiction for
the foregoing and all moral rights related thereto; (v) databases and all
database rights; and (vi) Internet Web sites, domain names and applications
and registrations pertaining thereto that, in each case, are used in the
respective businesses of the Company or the Company Subsidiaries as
currently conducted (as described in clauses (i) through (vi) above,
collectively, "Company Intellectual Property"), except for any such
failures to own, be licensed or possess that would not be reasonably likely
to have a Company Material Adverse Effect.
(b) Except as set forth on Section 2.16(b) of the Company
Disclosure Schedule, to the Company's knowledge, there are no conflicts
with or infringements of any material Company Intellectual Property by any
third party and the conduct of the businesses as currently conducted does
not conflict with or infringe any proprietary right of a third party,
except for any such conflicts or infringements that would not be reasonably
likely to have a Company Material Adverse Effect.
(c) Section 2.16 (c) of the Company Disclosure Schedule
sets forth a complete list of all material trademarks, registrations and
applications pertaining to the Company Intellectual Property owned by the
Company and the Company Subsidiaries. All such Company Intellectual
Property listed is owned by the Company and/or the Company Subsidiaries,
free and clear of liens or encumbrances of any nature.
(d) Section 2.16(d) of the Company Disclosure Schedule
sets forth a complete list of all licenses, sublicenses and other
agreements in which the Company and the Company Subsidiaries have granted
rights to any person to use the Company Intellectual Property. The Company
will not, as a result of the execution and delivery of this Agreement or
the performance of its obligations under this Agreement, be in breach of
any license, sublicense or other agreement relating to the Company
Intellectual Property.
(e) The Company and each of the Company Subsidiaries own
or have the right to use all computer software currently used in and
material to the businesses, except for any failures to own or have the
right to use that would not be reasonably likely to have a Company Material
Adverse Effect.
(f) All Company Intellectual Property was developed by:
(i) employees of the Company within the scope of their employment; or (ii)
independent contractors as "works-made-for-hire" as that term is defined
under Section 101 of the United States copyright laws, pursuant to written
agreements.
2.17. Finders and Investment Bankers. Other than pursuant
to the Piper Engagement Letter, neither the Company nor any of its officers
or directors has employed any broker or finder or otherwise incurred any
liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated hereby. For purposes of this
Agreement, the term "Piper Engagement Letter" means the letter dated
December 16, 1999 from U.S. Bancorp Xxxxx Xxxxxxx to the Company, as
amended by a letter dated February 8, 2000 from U.S. Bancorp Xxxxx Xxxxxxx
to the Company. A true and complete copy of the Piper Engagement Letter has
been delivered by the Company to Purchaser prior to the date hereof.
2.18. Fairness Opinion. The Company has received from
U.S. Bancorp Xxxxx Xxxxxxx, its financial advisor, a written opinion
addressed to it for inclusion in the Prospectus/Proxy Statement to the
effect that the consideration to be received in the Merger by the Company's
shareholders is fair to the Company's shareholders from a financial point
of view.
2.19. Insurance. Section 2.19 of the Company Disclosure
Schedule sets forth a true and complete list of all insurance policies
carried by, or covering the Company and the Company Subsidiaries with
respect to their businesses, assets and properties and with respect to
which records are maintained at the Company's principal executive offices,
together with, in respect of each such policy, the amount of coverage and
the deductible. The Company and the Company Subsidiaries maintain insurance
policies against all risk of a character, including without limitation,
business interruption insurance, and in such amounts as are usually insured
against by similarly situated companies in the same or similar businesses.
Each insurance policy set forth on Section 2.19 of the Company Disclosure
Schedule is in full force and effect and all premiums due thereon have been
paid in full.
2.20. Vote Required; Ownership of Purchaser Capital
Stock; State Takeover Statutes. (a) The approval of the Company Proposal by
a vote of a majority of the holders of the issued and outstanding Company
Shares is the only vote of the holders of any class or series of the
Company's capital stock necessary to approve the Merger and the
transactions contemplated hereunder.
(b) Neither the Company nor any of the Company
Subsidiaries beneficially owns, either directly or indirectly, any shares
of Purchaser capital stock.
(c) The Company has taken all actions necessary under the
MBCA to approve the transactions contemplated by this Agreement and the
Stockholder Agreements. Assuming for purposes of this Section 2.20(c) that
no person or entity associated or affiliated with Purchaser is an
"interested shareholder" (as such term is defined in the MBCA) of the
Company who has not continuously been an interested shareholder of the
Company during the four-year period preceding the Merger, Section 302A.673
of the MBCA applicable to a "business combination" does not, and will not,
prohibit the transactions contemplated hereunder, and the restrictions
contained in Section 302A.671 of the MBCA applicable to "control share
acquisitions" will not prohibit the authorization, execution, delivery and
performance of this Agreement or the consummation of the Merger by the
Company. The authorization, execution and delivery of this Agreement and
the Stockholder Agreements do not, and the consummation of the transactions
contemplated hereunder and thereunder do not, and any formation of a
"group" for purposes of Section 13(d)(3) of the Securities Exchange Act in
connection with this Agreement and the Stockholder Agreements will not,
result in a "control share acquisition" as defined in Section 302A.011 of
the MBCA. No other "fair price," "moratorium," or other similar
anti-takeover statute or regulation prohibits (by reason of Company's
participation therein) the Merger or the other transactions contemplated by
this Agreement.
2.21. Title to Properties. Section 2.21 of the Company
Disclosure Schedule sets forth a complete list of all material real
property owned in fee by Company or any of the Company Subsidiaries and
sets forth all material real property leased by Company or any of the
Company Subsidiaries as lessee as of the date hereof (such owned and leased
material real property, including all improvements thereon, referred to
collectively as the "Company Real Property"). The Company Real Property set
forth in Section 2.21 of the Company Disclosure Schedule comprises all of
the material real property necessary and/or currently used in the
operations of the business of the Company and the Company Subsidiaries. The
Company and the Company Subsidiaries have good and valid title to, or, as
to Company Real Property designated as leased, a valid leasehold interest
in, all of the Company Real Property. The Company Real Property is free of
encumbrances, except for (a) liens with respect to Taxes either not
delinquent or being diligently contested in appropriate proceedings; (b)
mechanics', materialmen's or similar statutory liens for amounts not yet
due or being diligently contested in appropriate proceedings; and (c) other
exceptions with respect to title to Company Real Property (including
easements of public record) that do not and would not materially interfere
with the current and intended use of such Company Real Property (clauses,
(a), (b), and (c) being referred to herein as "Permitted Encumbrances"),
and the consummation of the transactions contemplated hereby will not
create any encumbrance (other than Permitted Encumbrances) on any of the
Company Real Property. Each of the Company and the Company Subsidiaries
enjoys peaceful and undisturbed possession under all leases of Company Real
Property, except for such breaches of the right to peaceful and undisturbed
possession that do not materially interfere with the ability of the Company
and the Company Subsidiaries to conduct their business on such property.
2.22. Environmental Matters. The Company has not, and no
third party has, generated, treated, stored, released or disposed of, or
otherwise placed, deposited in or located on the Company Real Property, any
toxic or hazardous substances or wastes, pollutants or contaminants
(including, without limitations, asbestos, urea formaldehyde, the group of
organic compounds known as polychlorinated biphenyls, petroleum products
including gasoline, fuel oil, crude oil and various constituents of such
products, and any hazardous substance as defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"),
42 U.S.C. ss. 9601-9657, as amended) (collectively, "Hazardous Substances")
except in material compliance with all applicable Laws, and no Hazardous
Substances have been generated, treated, stored, released or disposed of,
or otherwise placed, deposited in or located on the Company Real Property
except in material compliance with all applicable Laws, nor has any
activity been undertaken on the Company Real Property that would cause or
contribute to (a) the Company Real Property becoming a treatment, storage
or disposal facility in material violation of, the Resource Conservation
and Recovery Act of 1976 ("RCRA"), 42 U.S.C. ss. 6901 et seq., or any
similar state law or local ordinance, (b) a release or threatened release
of toxic or hazardous wastes or substances, pollutants or contaminants from
the Company Real Property in material violation of CERCLA or any similar
state law or local ordinance, or (c) the discharge of pollutants or
effluents into any water source or system, the dredging or filling of any
waters or the discharge into the air of any emissions, for which the
Company does not have all material required permits under the Federal Water
Act, 33 U.S.C. ss. 1251 et seq., or the Clean Air Act, 42 U.S.C. ss. 7401
et seq., or any similar state law or local ordinance, in each case except
for any such noncompliance, violations, or failures as would not be
reasonably likely to have a Company Material Adverse Effect. There are no
substances or conditions in or on the Company Real Property that may
support a claim or cause of action under RCRA, CERCLA or any other federal,
state or local environmental statutes, regulations, ordinances or other
environmental regulatory requirements, except for any such claims or causes
of action as would not be reasonably likely to have a Company Material
Adverse Effect. There are no above ground or underground tanks that have
been located under, in or about the Company Real Property which have been
subsequently removed or filled. To the extent storage tanks exist on or
under the Company Real Property, such storage tanks have been duly
registered with all appropriate regulatory and governmental bodies and are
otherwise in compliance with applicable federal, state and local statutes,
regulations, ordinances and other regulatory requirements.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Except as set forth in the disclosure schedule from Purchaser to the
Company to be delivered upon the execution of this Agreement, which sets
forth certain disclosures concerning Purchaser and its business (the
"Purchaser Disclosure Schedule"), each section of which qualifies only the
correspondingly numbered representation or warranty, Purchaser hereby
represents and warrants to the Company as follows:
3.1. Due Incorporation and Good Standing. Each of
Purchaser and Merger Sub is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
business as now being conducted. Purchaser is duly qualified or licensed
and in good standing to do business in each jurisdiction in which the
character of the property owned, leased or operated by it or the nature of
the business conducted by it makes such qualification or licensing
necessary, except where the failure to be so duly qualified or licensed and
in good standing would not be reasonably likely to have a material adverse
effect on the business, assets, prospects, condition (financial or
otherwise), liabilities or the results of operations of Purchaser and its
subsidiaries taken as a whole except in each case for any such effects
resulting from, arising out of, or relating to (i) general business or
economic conditions, (ii) conditions generally affecting the industry in
which Purchaser competes, or (iii) the taking of any action contemplated by
this Agreement ("Purchaser Material Adverse Effect"). Purchaser has
heretofore made available to the Company accurate and complete copies of
the Articles of Incorporation and Bylaws, as currently in effect, of
Purchaser.
3.2. Capitalization. As of the date hereof, the
authorized capital stock of Purchaser consists of sixty million shares of
common stock, par value $.01 per share, and two million shares of preferred
stock, par value $.01 per share. As of February 4, 2000, 24,824,133 shares
of Purchaser Stock were issued and outstanding and 6,421,157 shares of
Purchaser were held in the treasury of Purchaser. No other capital stock of
Purchaser is authorized or issued. All issued and outstanding shares of the
Purchaser Stock are, and all such shares to be issued to Company
stockholders in connection with the Merger will upon issuance be, duly
authorized, validly issued, fully paid and non-assessable.
3.3. Authorization; Binding Agreement. Purchaser and
Merger Sub have all requisite corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby, including, but not limited to, the
Merger, have been duly and validly authorized by the respective Boards of
Directors of Purchaser and Merger Sub, as appropriate, and no other
corporate proceedings on the part of Purchaser or Merger Sub are necessary
to authorize the execution and delivery of this Agreement or to consummate
the transactions contemplated hereby (other than the requisite approval by
the sole shareholder of Merger Sub of this Agreement and the Merger). This
Agreement has been duly and validly executed and delivered by each of
Purchaser and Merger Sub and constitutes the legal, valid and binding
agreement of Purchaser and Merger Sub, enforceable against each of
Purchaser and Merger Sub in accordance with its terms, subject to the
Enforceability Exceptions.
3.4. Governmental Approvals. No Consent from or with any
Governmental Authority on the part of Purchaser or Merger Sub is required
in connection with the execution or delivery by Purchaser of this Agreement
or the consummation by Purchaser of the transactions contemplated hereby
other than (i) the filing of the Articles of Merger with the Secretary of
State of the State of Minnesota in accordance with the MBCA and the filing
of the Certificate of Merger with the Secretary of State of the State of
Delaware in accordance with the DGCL; (ii) filings with the SEC, state
securities laws administrators and the New York Stock Exchange (the
"NYSE"); (iii) filings under the HSR Act; (iv) such filings as may be
required in any jurisdiction where Purchaser is qualified or authorized to
do business as a foreign corporation in order to maintain such
qualification or authorization; and (v) those Consents that, if they were
not obtained or made, would not be reasonably likely to have a Purchaser
Material Adverse Effect.
3.5. No Violations. Except as set forth in Section 3.5 of
the Purchaser Disclosure Schedule, the execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby and
compliance by Purchaser and Merger Sub with any of the provisions hereof
will not (i) conflict with or result in any breach of any provision of the
Articles of Incorporation or Bylaws or other governing instruments of
Purchaser or Merger Sub, (ii) require any Consent under or result in a
violation or breach of, or constitute (with or without due notice or lapse
of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or
provisions of any agreement or other instrument to which Purchaser is a
party or by which its assets are bound, (iii) result in the creation or
imposition of any lien or encumbrance of any kind upon any of the assets of
Purchaser or Merger Sub or (iv) subject to obtaining the Consents from
Governmental Authorities referred to in Section 3.4 hereof, contravene any
Law to which Purchaser or Merger Sub or its or any of their respective
assets or properties are subject, except, in the case of clauses (ii),
(iii) and (iv) above, for any deviations from the foregoing which would not
be reasonably likely to have a Purchaser Material Adverse Effect.
3.6. Securities Filings. Purchaser has made available to
the Company true and complete copies of (i) its Annual Reports on Form 10-K
for the year ended December 31, 1998, as filed with the SEC, (ii) its proxy
statements relating to all of the meetings of shareholders (whether annual
or special) of Purchaser since December 31, 1998, as filed with the SEC,
and (iii) all other reports, statements and registration statements and
amendments thereto (including, without limitation, Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K, as amended) filed by Purchaser
with the SEC since December 31, 1998. The reports and statements set forth
in clauses (i) through (iii) above, and those subsequently provided or
required to be provided pursuant to this Section 3.6, are referred to
collectively herein as the "Purchaser Securities Filings." As of their
respective dates, or as of the date of the last amendment thereof, if
amended after filing, none of the Purchaser Securities Filings contained
or, as to Purchaser Securities Filings subsequent to the date hereof, will
contain, any untrue statement of a material fact or omitted or, as to
Purchaser Securities Filings subsequent to the date hereof, will 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. Each of the Purchaser Securities Filings at the time
of filing or as of the date of the last amendment thereof, if amended after
filing, complied or, as to Purchaser Securities Filings subsequent to the
date hereof, will comply in all material respects with the Securities
Exchange Act or the Securities Act, as applicable.
3.7. Purchaser Financial Statements. The audited
consolidated financial statements and unaudited interim financial
statements of Purchaser included in the Purchaser Securities Filings (the
"Purchaser Financial Statements") have been prepared or will be in
accordance with generally accepted accounting principles applied on a
consistent basis (except as may be indicated therein or in the notes
thereto) and present or will present fairly, in all material respects, the
financial position of Purchaser and its subsidiaries as at the dates
thereof and the results of their operations and cash flows for the periods
then ended, subject, in the case of the unaudited interim financial
statements, to normal year-end audit adjustments, any other adjustments
described therein and the fact that certain information and notes have been
condensed or omitted in accordance with the Securities Exchange Act.
3.8. Absence of Certain Changes or Events; No Undisclosed
Liabilities. Except as set forth in Section 3.8 of the Purchaser Disclosure
Schedule, since December 31, 1998, through the date of this Agreement,
there has not been (i) any event that has had or would reasonably be
expected to have a Purchaser Material Adverse Effect or (ii) any
declaration, payment or setting aside for payment any dividend or other
distribution or redemption or other acquisition of any shares of capital
stock of Purchaser by Purchaser. Except for those liabilities that are
fully reflected or reserved against on the consolidated balance sheet of
Purchaser included in its December 31, 1998, Form 10-K and for liabilities
incurred in the ordinary course of business consistent with past practice,
since December 31, 1998, neither Purchaser nor any of the Purchaser
Subsidiaries has incurred any liability of any nature whatsoever (whether
absolute, accrued, contingent or otherwise and whether due or to become
due) that, either individually or in the aggregate, has had or would be
reasonably likely to result in a Purchaser Material Adverse Effect.
3.9. Compliance with Laws. The business of Purchaser and
each of its subsidiaries has been operated in compliance with all Laws
applicable thereto, except for any instances of non-compliance which would
not be reasonably likely to have a Purchaser Material Adverse Effect.
3.10. Litigation. Except as disclosed in Section 3.10 of
the Purchaser Disclosure Schedule, there is no Litigation pending or, to
the knowledge of Purchaser, threatened against, Purchaser or any of its
subsidiaries which, individually or in the aggregate, would be reasonably
likely to have a Purchaser Material Adverse Effect, nor is there any
judgment, decree, injunction, rule or order of any Governmental Authority
outstanding against Purchaser or any of its subsidiaries which,
individually or in the aggregate, would be reasonably likely to have a
Purchaser Material Adverse Effect.
3.11. Tax Returns. Purchaser has timely filed, or caused
to be timely filed, all material Tax Returns required to be filed by it,
and has paid, collected or withheld, or caused to be paid, collected or
withheld, all material amounts of Taxes required to be paid, collected or
withheld, other than such Taxes for which adequate reserves in the
Purchaser Financial Statements have been established or which are being
contested in good faith. There are no material claims or assessments
pending against Purchaser for any alleged deficiency in any Tax. To
Purchaser's knowledge, none of Purchaser or any of the Purchaser
Subsidiaries has taken or agreed to take any action that would prevent the
Merger from constituting a reorganization qualifying under the provisions
of Section 368(a) of the Code.
3.12. Finders and Investment Bankers. Other than Banc of
America Securities LLC, neither Purchaser nor any of its officers or
directors has employed any broker or finder or otherwise incurred any
liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated hereby.
3.13. Fairness Opinion. Purchaser's Board of Directors
has received from its financial advisor, Banc of America Securities LLC, a
written opinion addressed to it for inclusion in the Prospectus/Proxy
Statement to the effect that the Merger Consideration is fair to Purchaser
from a financial point of view.
3.14. No Prior Activities. Except for obligations or
liabilities incurred in connection with its incorporation or organization
or the negotiation and consummation of this Agreement and the transactions
contemplated hereby, Merger Sub has not incurred any obligations or
liabilities, and has not engaged in any business or activities of any type
or kind whatsoever or entered into any agreements or arrangements with any
person or entity.
3.15. Ownership of Company Stock. Purchaser does not
beneficially own, either directly or indirectly, more than 100 shares of
Company Stock. None of the Purchaser Subsidiaries beneficially owns, either
directly or indirectly, any shares of Company Stock.
3.16. Financing. Purchaser will have prior to the
satisfaction of the conditions to the Merger, sufficient funds available to
purchase the Company Shares converted into the right to receive Cash
Consideration.
ARTICLE IV
ADDITIONAL COVENANTS OF THE COMPANY
The Company covenants and agrees as follows:
4.1. Conduct of Business of the Company and the Company
Subsidiaries. (a) Unless Purchaser shall otherwise agree in writing and
except as expressly contemplated by this Agreement or as set forth on
Section 4.1 of the Company Disclosure Schedule (the inclusion of any item
having been consented to by Purchaser), during the period from the date of
this Agreement to the Effective Time, (i) the Company shall conduct, and it
shall cause each of the Company Subsidiaries to conduct, its or their
businesses in the ordinary course and consistent with past practice, and
the Company shall, and it shall cause each of the Company Subsidiaries to,
use its or their reasonable best efforts to preserve intact its business
organization, to keep available the services of its officers and employees,
to maintain satisfactory relationships with all persons with whom it does
business, and to preserve the possession, control and condition of all of
its assets and (ii) without limiting the generality of the foregoing,
neither the Company nor any Company Subsidiary will:
(A) amend or propose to amend its Articles of
Incorporation or Bylaws (or comparable governing instruments);
(B) authorize for issuance, issue, grant, sell, pledge,
dispose of or propose to issue, grant, sell, pledge or dispose of any
shares of, or any options, warrants, commitments, subscriptions or rights
of any kind to acquire or sell any shares of, the capital stock or other
securities of the Company or any of its subsidiaries including, but not
limited to, any securities convertible into or exchangeable for shares of
stock of any class of the Company or any of its subsidiaries, except for
(i) the issuance of Company Shares pursuant to the exercise of stock
options outstanding on the date of this Agreement in accordance with their
present terms, and (ii) subject to the limitations set forth in Section
1.8, the grant of purchase rights pursuant to the Company ESPP or the
issuance of Company Stock upon the exercise of such purchase rights;
(C) split, combine or reclassify any shares of its
capital stock or declare, pay or set aside any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of its capital stock, other than dividends or
distributions to the Company or any Company Subsidiary, or directly or
indirectly redeem, purchase or otherwise acquire or offer to acquire any
shares of its capital stock or other securities and other than pursuant to
commitments outstanding on the date of this Agreement in accordance with
their present terms as set forth on Schedule 4.1 of the Company Disclosure
Schedule.
(D) (a) create, incur, assume, forgive or make any
changes to the terms or collateral of any debt, receivables or employee or
officer loans or advances, except incurrences that constitute refinancing
of existing obligations on terms that are no less favorable to the Company
or its subsidiaries than the existing terms; (b) assume, guarantee, endorse
or otherwise become liable or responsible (whether directly, indirectly,
contingently or otherwise) for the obligations of any person; (c) make any
capital expenditures or incur any pre-opening expenses, other than
consistent as set forth in Section 4.1 of the Company Disclosure Schedule;
(d) make any loans, advances or capital contributions to, or investments
in, any other person (other than to a Company subsidiary and customary
travel, relocation or business advances to employees); (e) acquire the
stock or assets of, or merge or consolidate with, any other person; (f)
voluntarily incur any material liability or obligation (absolute, accrued,
contingent or otherwise) other than in the ordinary course of business
consistent with past practice; or (g) sell, transfer, mortgage, pledge, or
otherwise dispose of, or encumber, or agree to sell, transfer, mortgage,
pledge or otherwise dispose of or encumber, any assets or properties, real,
personal or mixed material to the Company and the Company Subsidiaries
taken as a whole other than to secure debt permitted under subclause (a) of
this clause (D) or other than in the ordinary course of business consistent
with past practice;
(E) increase in any manner the wages, salaries, bonus,
compensation or other benefits of any of its officers or employees or enter
into, establish, amend or terminate any employment, consulting, retention,
change in control, collective bargaining, bonus or other incentive
compensation, profit sharing, health or other welfare, stock option or
other equity, pension, retirement, vacation, severance, termination,
deferred compensation or other compensation or benefit plan, policy,
agreement, trust, fund or arrangement with, for or in respect of, any
shareholder, officer, director, other employee, agent, consultant or
affiliate other than as required pursuant to the terms of agreements in
effect on the date of this agreement, or enter into or engage in any
agreement, arrangement or transaction with any of its directors, officers,
employees or affiliates except current compensation and benefits in the
ordinary course of business, consistent with past practice;
(F) (i) commence or settle any litigation or other
proceedings with any Governmental Authority or other person, or (ii) make
or rescind any election relating to Taxes, settle any claim, action, suit,
litigation, proceeding, arbitration, investigation, audit or controversy
relating to Taxes, file any amended Tax Return or claim for refund, change
any method of accounting or make any other material change in its
accounting or Tax policies or procedures, or commit or omit to do any act
which act or omission would cause the Merger to fail to qualify as a
reorganization within the meaning of Section 368(a) of the Code.
(G) adopt or amend any resolution or agreement
concerning indemnification of its directories, officers, employees or agents;
(H) commit or omit to do any act which act or omission
would cause a breach of any covenant contained in this Agreement or would
cause any representation or warranty contained in this Agreement to become
untrue, as if each such representation and warranty were continuously made
from and after the date hereof;
(I) fail to maintain its books, accounts and records in
the usual manner on a basis consistent with that heretofore employed;
(J) materially increase or decrease the average
restaurant, corporate or warehouse facility inventory or house bank
accounts in any restaurant;
(K) enter into any new line of business;
(L) enter into any lease, contract or agreement pursuant
to which the Company is obligated to pay or incur obligations of more than
$25,000 per year, other than (i) the purchase of inventory in the ordinary
course of business consistent with past practice or in connection with the
construction of restaurants as listed in Section 4.1 of the Company
Disclosure Schedule and approved, if required, pursuant to clause (N)
below;
(M) make any changes to its current investment
strategy, policy or practices;
(N) make, engage or incur costs for the design or
construction of any new restaurant, the remodeling or renovation of
existing restaurants or restaurants under construction without approval by
Purchaser (it being understood that Purchaser shall have approval of all
design and construction matters);
(O) allow any employee or other person to remove any
Company asset, display, proprietary asset, retail item or other property
from the corporate office, warehouses, restaurants of the Company or any
other Company facilities;
(P) issue any gift certificates, coupons or complimentary
rights for dining or retail other than in such amounts as are in the
ordinary course of business consistent with past practice; or
(Q) authorize any of, or agree to commit to do any of,
the foregoing actions.
(b) The Company shall, and the Company shall cause each
of its subsidiaries to, use its or their reasonable best efforts to comply
in all material respects with all Laws applicable to it or any of its
properties, assets or business and maintain in full force and effect all
the Company Permits necessary for, or otherwise material to, such business.
4.2. Notification of Certain Matters. The Company shall
give prompt notice to Purchaser if any of the following occur after the
date of this Agreement: (i) receipt of any notice or other communication in
writing from any third party alleging that the Consent of such third party
is or may be required in connection with the transactions contemplated by
this Agreement, provided that such Consent would have been required to have
been disclosed in this Agreement; (ii) receipt of any material notice or
other communication from any Governmental Authority (including, but not
limited to, the NASD or any securities exchange) in connection with the
transactions contemplated by this Agreement; (iii) the occurrence of an
event which would be reasonably likely to have a Company Material Adverse
Effect; or (iv) the commencement or threat of any Litigation involving or
affecting the Company or any Company Subsidiary, or any of their respective
properties or assets, or, to its knowledge, any employee, agent, director
or officer, in his or her capacity as such, of the Company or any Company
Subsidiary which, if pending on the date hereof, would have been required
to have been disclosed in this Agreement or which relates to the
consummation of the Merger.
4.3. Access and Information. Between the date of this
Agreement and the Effective Time, the Company will give, and shall direct
its accountants and legal counsel to give, Purchaser and its respective
authorized representatives (including, without limitation, its financial
advisors, accountants and legal counsel), at all reasonable times, access
as reasonably requested to all offices and other facilities and to all
contracts, agreements, commitments, books and records of or pertaining to
the Company and its subsidiaries, will permit the foregoing to make such
reasonable inspections as they may require and will cause its officers
promptly to furnish Purchaser with (a) such financial and operating data
and other information with respect to the business and properties of the
Company and the Company Subsidiaries as Purchaser may from time to time
reasonably request, and (b) a copy of each material report, schedule and
other document filed or received by the Company or any Company Subsidiary
pursuant to the requirements of applicable securities laws or the NASD.
4.4. Shareholder Approval. As soon as practicable, the
Company shall call, give notice of, convene and hold a meeting of its
shareholders for the purpose of approving the Company Proposals and for
such other purposes as may be necessary or desirable in connection with
effectuating the transactions contemplated hereby. Except as otherwise
contemplated by this Agreement, the Company will use reasonable best
efforts to obtain any necessary approval by the Company's shareholders of
the Company Proposals. Notwithstanding the foregoing, unless the Board of
Directors of the Company, based on the opinion of its outside legal
counsel, determines that to do so would result in a breach of the fiduciary
duties of the Company's Board of Directors under applicable law, the
Company, acting through its Board of Directors, shall include in the
Prospectus/Proxy Statement the recommendation of the Board of Directors
that shareholders of the Company vote in favor of the Company Proposals.
4.5. Reasonable Best Efforts.
(a) Subject to the terms and conditions herein provided,
the Company agrees to use its reasonable best efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable to consummate and make effective as promptly as
practicable the Merger and the other transactions contemplated by this
Agreement, including, but not limited to, (i) obtaining all Consents from
Governmental Authorities and other third parties required for the
consummation of the Merger and the transactions contemplated hereby
(provided that the Company shall not make any payment or amend the terms of
any agreement in connection with obtaining any such Consent without the
prior written approval of Purchaser) and (ii) timely making all necessary
filings under the HSR Act. Upon the terms and subject to the conditions
hereof, the Company agrees to use reasonable best efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things
necessary to satisfy the other conditions to Closing set forth herein.
(b) The Company agrees to inform Purchaser regularly, and
to respond to requests of Purchaser, as to the status of whether or not
each material Consent required from third parties (other than Governmental
Authorities) in connection with this Agreement and the transactions
contemplated hereby have been obtained. The Company shall promptly deliver
to Purchaser in writing a reasonably detailed notice (the "Consent Notice")
as to the status of all such material Consents on the sixtieth calendar day
(such date, the "Consent Notice Date") following public announcement of the
Merger. In the event that the Company has not obtained any one or more of
such material Consents by the Consent Notice Date, then Purchaser shall
have up to and including the date (the "Decision Date") which is ten
business days following the later of the date of its receipt of such
written notice and the Consent Notice Date to (i) terminate this Agreement
in accordance with Section 7.1(f) hereof or (ii) waive any such one or more
material Consents by delivery of a reasonably detailed written notice to
the Company (any such material Consents so waived in writing by Purchaser,
collectively, the "Waived Consents"); provided, however, that in the event
that Purchaser has not by or on the Decision Date either (i) terminated
this Agreement in accordance with Section 7.1(f) hereof or (ii) waived all
such material Consents, then this Agreement shall terminate without any
action by any party hereto in accordance with Section 7.1(g) hereof.
Notwithstanding any such waiver of material Consents, if Purchaser has not
so terminated this Agreement, the Company shall continue to use its
reasonable best efforts to actually obtain the Waived Consents pursuant to
Section 4.5(a) up to the Closing Date.
4.6. Public Announcements. So long as this Agreement is
in effect, the Company shall not, and shall cause its affiliates not to,
(a) issue or cause the publication of any press release or any other
announcement or communication with respect to the Merger or the other
transactions contemplated hereby without the written consent of Purchaser,
or (b) discuss with the press or the media this Agreement, the Merger or
the transactions contemplated hereby (and will refer any and all questions
and inquiries to Purchaser), except in any case under (a) or (b) where such
release or announcement is required by applicable Law or pursuant to any
applicable listing agreement with, or rules or regulations of, the NASD, in
which case the Company, prior to making such announcement, will consult
with Purchaser regarding the same.
4.7. Compliance. In consummating the Merger and the other
transactions contemplated hereby, the Company shall comply in all material
respects with the provisions of the Securities Exchange Act and the
Securities Act and shall comply, and/or cause its subsidiaries to comply or
to be in compliance, in all material respects, with all other applicable
Laws.
4.8. No Solicitation. (a) The Company shall, and shall
direct and cause its officers, directors, employees, representatives and
agents to, immediately cease any discussions or negotiations with any
parties that may be ongoing with respect to a Company Takeover Proposal (as
defined below) and immediately request that all confidential information
furnished by or on behalf of the Company be returned. The Company shall
not, nor shall it permit any of its subsidiaries to, nor shall it authorize
or permit any of its officers, directors or employees or any investment
banker, financial advisor, attorney, accountant or other representative
retained by it or any of its subsidiaries, directly or indirectly, to (i)
solicit, initiate or encourage (including by way of furnishing
information), or take any other action knowingly designed or reasonably
likely to facilitate, any inquiries or the making of any proposal which
constitutes, or may reasonably be expected to lead to, any Company Takeover
Proposal or (ii) participate in any discussion or negotiations regarding
any Company Takeover Proposal; provided, however, that if, at any time
prior to the Company shareholder meeting with respect to the transactions
contemplated hereby, the Board of Directors of the Company determines in
good faith, based on the advice of its outside legal counsel, that the
failure to do so would result in a breach of its fiduciary duties to the
Company's shareholders under applicable Law, the Company may, in response
to a Company Superior Proposal (as defined below), and subject to
compliance with Section 4.8(c), (x) furnish information with respect to the
Company to any person pursuant to a customary confidentiality agreement (as
determined by the Company after consultation with outside legal counsel)
and (y) participate in negotiations regarding such Company Takeover
Proposal for purposes of determining in good faith if such Company Takeover
Proposal is a Company Superior Proposal. "Company Takeover Proposal" means
any inquiry, proposal or offer from any person relating to (1) any direct
or indirect acquisition or purchase of assets representing 20% or more of
the consolidated assets of the Company and the Company Subsidiaries, (2)
any issuance, sale, or other disposition of (including by way of merger,
consolidation, business combination, share exchange, joint venture, or any
similar transaction) securities (or options, rights or warrants to
purchase, or securities convertible into or exchangeable for, such
securities) representing 20% or more of the voting power of the Company,
(3) any tender offer, exchange offer or other transaction in which, if
consummated, any person shall acquire beneficial ownership (as such term is
defined in Rule 13d-3 under the Securities Exchange Act), or the right to
acquire beneficial ownership, or any "group" (as such term is defined under
the Securities Exchange Act) shall have been formed which beneficially owns
or has the right to acquire beneficial ownership, of, 20% or more of the
outstanding voting capital stock of the Company, or, (4) any merger,
consolidation, share exchange, business combination, recapitalization,
liquidation, dissolution or similar transaction involving the Company or
any Company Subsidiary, other than the transactions contemplated by this
Agreement. Notwithstanding any provision to the contrary contained in this
Section 4.8, the provision by the Company of copies of its SEC filings by
its investor relations department to third parties in a manner consistent
with its historical practices, shall not be deemed a violation of this
Section 4.8. For purposes of this Agreement, a "Company Superior Proposal"
means any bona fide proposal made by a third party to acquire, directly or
indirectly, for consideration consisting of cash and/or securities, more
than a majority of the combined voting power of the Company Shares then
outstanding or all or substantially all the assets of the Company, on terms
which the Board of Directors of the Company determines in its good faith
judgment based on the advice of the Company's financial advisers and
outside legal counsel to be more favorable to the Company's shareholders,
from a financial point of view, than the Merger (taking into account all
factors relating to such proposed transaction deemed relevant by the Board
of Directors of the Company, including, without limitation, the financing
thereof and all other conditions thereto).
(b) Except as set forth in this Section 4.8, neither the
Company nor the Board of Directors, or any committee thereof, shall (i)
withdraw or modify, or propose publicly to withdraw or modify, in a manner
adverse to Purchaser, the approval or recommendation by such Board of
Directors of the Company of the Company Proposals, (ii) approve or
recommend, or propose publicly to approve or recommend, any Company
Takeover Proposal or (iii) cause the Company to enter into any letter of
intent, agreement in principle, acquisition agreement or other similar
agreement (each, a "Company Acquisition Agreement") related to any Company
Takeover Proposal. Notwithstanding the foregoing, in the event that prior
to the Company shareholder meeting with respect to the transactions
contemplated hereby, the Board of Directors of the Company determines in
good faith, based on the advice of outside legal counsel, that the failure
to do so would result in a breach of its fiduciary duties to the Company's
shareholders under applicable Law, the Board of Directors of the Company
may (subject to this and the following sentences) (x) withdraw or modify
its approval or recommendation of the Company Proposals or (y) approve or
recommend a Company Superior Proposal, but in each case, only at a time
that is after the second business day following Purchaser's receipt of
written notice advising Purchaser that the Company's Board of Directors has
received a Company Superior Proposal, specifying the material terms and
conditions of such Company Superior Proposal, and identifying the person
making such Company Superior Proposal.
(c) In addition to the obligations of the Company set
forth in paragraphs (a) and (b) of this Section 4.8, the Company shall
promptly advise Purchaser orally and in writing of any request for
information or of any Company Takeover Proposal, the material terms and
conditions of such request or the Company Takeover Proposal and the
identity of the person making such request or Company Takeover Proposal and
shall keep Purchaser fully informed on a prompt basis with respect to any
developments with respect to the foregoing.
(d) Nothing contained in this Agreement shall prohibit
the Board of Directors of the Company from taking and disclosing to its
shareholders a position contemplated by Rule 14e-2(a) promulgated under the
Securities Exchange Act or from making any disclosure to the Company's
shareholders if, in the good faith judgment of the Board of Directors of
the Company, based on the advice of its outside counsel, failure so to
disclose would result in a breach of its fiduciary duties to the Company's
shareholders under applicable law; provided, however, neither the Company
nor its Board of Directors, shall, except as permitted by Section 4.8(b),
withdraw or modify, or propose publicly to withdraw or modify, its position
with respect to the Company Proposals or approve or recommend, or propose
publicly to approve or recommend, a Company Takeover Proposal.
Notwithstanding anything to the contrary contained herein, the Company
Proposals shall be submitted to the shareholders of the Company at the
meeting of such shareholders for the purpose of approving the Company
Proposals and the Merger, and, subject to termination of this Agreement in
accordance with the terms of Article VII hereof, nothing in this Agreement
to the contrary shall be deemed to relieve Company of such obligation.
4.9. Tax Opinion Certificate. The Company shall execute
and deliver a certificate, in form reasonably satisfactory to Purchaser,
(the "Company Tax Opinion Certificate") signed by an officer of the Company
setting forth factual representations and covenants that will serve as a
basis for the tax opinion required pursuant to Section 6.2(e) of this
Agreement.
4.10. SEC and Shareholder Filings. The Company shall send
to Purchaser a copy of all material public reports and materials as and
when it sends the same to its shareholders, the SEC or any state or foreign
securities commission.
ARTICLE V
ADDITIONAL COVENANTS OF PURCHASER
Purchaser covenants and agrees as follows:
5.1. Access and Information. Between the date of this
Agreement and the Effective Time, Purchaser will give, and shall direct its
accountants and legal counsel to give, the Company and its authorized
representatives (including, without limitation, its financial advisors,
accountants and legal counsel), at all reasonable times, access as
reasonably requested to all offices and other facilities and to all
contracts, agreements, commitments, books and records of or pertaining to
Purchaser and its subsidiaries or to any Pending Purchaser Transactions, if
any, and to the parties thereto, will permit the foregoing to make such
reasonable inspections as they may require and will cause its officers
promptly to furnish the Company with (a) such financial and operating data
and other information with respect to the business and properties of
Purchaser and its subsidiaries as the Company may from time to time
reasonably request and (b) a copy of each material report, schedule and
other document filed or received by Purchaser or any of its subsidiaries
pursuant to the requirements of applicable securities laws or the NYSE.
5.2. Notification of Certain Matters. Notification of
Certain Matters. Purchaser shall give prompt notice to the Company if any
of the following occur after the date of this Agreement: (i) receipt of any
notice or other communication in writing from any third party alleging that
the Consent of such third party is or may be required in connection with
the transactions contemplated by this Agreement, provided that such Consent
would have been required to have been disclosed in this Agreement; (ii)
receipt of any material notice or other communication from any Governmental
Authority (including, but not limited to, the NYSE or any securities
exchange) in connection with the transactions contemplated by this
Agreement; (iii) the occurrence of an event which would be reasonably
likely to have a Purchaser Material Adverse Effect or (iv) the commencement
or threat of any Litigation involving or affecting Purchaser or any of its
subsidiaries, or any of their respective properties or assets, or, to its
knowledge, any employee, agent, director or officer, in his or her capacity
as such, of Purchaser or any of its subsidiaries which, if pending on the
date hereof, would have been required to have been disclosed in this
Agreement or which relates to the consummation of the Merger.
5.3. Reasonable Best Efforts. Subject to the terms and
conditions herein provided, Purchaser agrees to use its reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary, proper or advisable to consummate and make
effective as promptly as practicable the Merger and the other transactions
contemplated by this Agreement, including, but not limited to, (i)
obtaining all Consents from Governmental Authorities and other third
parties required for the consummation of the Merger and the other
transactions contemplated hereby and (ii) timely making all necessary
filings under the HSR Act. Upon the terms and subject to the conditions
hereof, Purchaser agrees to use reasonable best efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things
necessary to satisfy the other conditions to Closing set forth herein.
5.4. Compliance. In consummating the Merger and the
other transactions contemplated hereby, Purchaser shall comply in all
material respects with the provisions of the Securities Exchange Act and
the Securities Act and shall comply, and/or cause its subsidiaries to
comply or to be in compliance, in all material respects, with all other
applicable Laws.
5.5. SEC and Shareholder Filings. Purchaser shall send to
the Company a copy of all material public reports and materials as and when
it sends the same to its shareholders, the SEC or any state or foreign
securities commission.
5.6. Tax Opinion Certificate. Purchaser shall execute and
deliver a certificate, in form reasonably satisfactory to Company, (the
"Purchaser Tax Opinion Certificate") signed by an officer of Purchaser
setting forth factual representations and covenants that will serve as a
basis for the tax opinions required pursuant to Section 6.3(f) of this
Agreement.
5.7. Indemnification. (a) As of the Effective Time, the
indemnification and exculpation provisions contained in the Bylaws and the
Articles of Incorporation of the Surviving Corporation shall be at least as
favorable to individuals who immediately prior to the Closing Date were
directors, officers, agents or employees of the Company or otherwise
entitled to indemnification under the Company's Bylaws or Articles of
Incorporation (an "Indemnified Party") as those contained in the Bylaws and
the Articles of Incorporation of the Company, respectively, and shall not
be amended, repealed or otherwise modified for a period of six years after
the Closing Date in any manner that would adversely affect the rights
thereunder of any Indemnified Party. The Company hereby covenants that it
shall, to the fullest extent permitted under Minnesota law and regardless
of whether the Merger becomes effective, indemnify, defend and hold
harmless, and after the Effective Time, Purchaser and the Surviving
Corporation shall jointly and severally, to the fullest extent permitted
under Delaware law, indemnify, defend and hold harmless, each Indemnified
Party against any costs or expenses (including reasonable attorneys' fees),
judgments, fines, losses, claims, damages, liabilities and amounts paid in
settlement in connection with any claim, action, suit, proceeding or
investigation, including, without limitation, liabilities arising out of
this Agreement or under the Securities Exchange Act, occurring through the
Closing Date, and in the event of any such claim, action, suit, proceeding
or investigation (whether arising before or after the Effective Time), (i)
the Company or the Surviving Corporation shall pay the reasonable fees and
expenses of counsel selected by the Indemnified Parties, which counsel
shall be reasonably satisfactory to the Company or the Surviving
Corporation, promptly as statements therefor are received, and (ii) the
Company and the Surviving Corporation will cooperate in the defense of any
such matter; provided, however, that neither the Company nor the Surviving
Corporation shall be liable for any settlement effected without its written
consent (which consent shall not be unreasonably withheld); and provided,
further, that neither the Company nor the Surviving Corporation shall be
obliged pursuant to this Section 5.7 to pay the fees and disbursements of
more than one counsel for all Indemnified Parties in any single action
except to the extent that, in the opinion of counsel for the Indemnified
Parties, two or more of such Indemnified Parties have conflicting interests
in the outcome of such action. Purchaser shall cause the Surviving
Corporation to reimburse all expenses, including reasonable attorney's fees
and expenses, incurred by any person to enforce the obligations of
Purchaser and the Surviving Corporation under this Section 5.7. To the
fullest extent permitted by law, Purchaser shall cause the Surviving
Corporation to advance expense in connection with the foregoing
indemnification.
(b) If the Surviving Corporation or any of its successors
or assigns (i) consolidates with or merges into any other person and shall
not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any person, then and in each such case, proper
provision shall be made so that the successors and assigns of the Surviving
Corporation assume the obligations set forth in this Section 5.7.
5.8. Benefit Plans and Employee Matters.
----------------------------------
(a) Purchaser shall to the extent practicable cause the
Surviving Corporation to provide employee benefits and programs to the
Company's and the Company Subsidiaries' employees that, in the aggregate,
are substantially comparable to those of Purchaser. From and after the
Effective Time, Purchaser shall honor, in accordance with their terms, all
employment and severance agreements in effect immediately prior to the
Closing Date that are applicable to any current or former employees or
directors of the Company or any Company Subsidiaries.
(b) To the extent that service is relevant for purposes
of eligibility, level of participation, or vesting under any employee
benefit plan, program or arrangement established or maintained by
Purchaser, the Company or any of their respective subsidiaries, employees
of the Company and its subsidiaries shall be credited for service accrued
or deemed accrued prior to the Effective Time with the Company or such
subsidiary, as the case may be. Under no circumstances shall employees
receive credit for service accrued or deemed accrued prior to the Effective
Time with the Company or such Subsidiary, as the case may be, for benefit
accruals under any employee pension benefit plan (as defined by Section
3(2) of ERISA) or any retiree health plan.
ARTICLE VI
CONDITIONS
6.1. Conditions to Each Party's Obligations. The
respective obligations of each party to effect the Merger shall be subject
to the fulfillment or waiver at or prior to the Effective Time of the
following conditions:
(a) Shareholder Approval. The Company Proposals shall
have been approved at or prior to the Effective Time by the requisite vote
of the shareholders of the Company required under the MBCA.
(b) No Injunction or Action. No order, statute, rule,
regulation, executive order, stay, decree, judgment or injunction shall
have been enacted, entered, promulgated or enforced by any court or other
Governmental Authority since the date of this Agreement which prohibits or
prevents the consummation of the Merger which has not been vacated,
dismissed or withdrawn prior to the Effective Time. The Company and
Purchaser shall use their reasonable best efforts to have any of the
foregoing vacated, dismissed or withdrawn by the Effective Time.
(c) HSR Act. Any waiting period applicable to the Merger
under the HSR Act shall have expired or early termination thereof shall
have been granted.
(d) Registration Statement. The Registration Statement
shall have been declared effective and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
action, suit, proceeding or investigation for that purpose shall have been
initiated or threatened by any Governmental Authority.
(e) Blue Sky. Purchaser shall have received all state
securities law authorizations necessary to consummate the transactions
contemplated hereby.
(f) Listing of Purchaser Stock. The shares of
Purchaser Stock comprising the Merger Consideration shall have been
approved for listing on the NYSE.
6.2. Conditions to Obligations of the Company. The
obligation of the Company to effect the Merger shall be subject to the
fulfillment at or prior to the Effective Time of the following additional
conditions, any one or more of which may be waived by the Company:
(a) Purchaser Representations and Warranties. The
representations and warranties of Purchaser and Merger Sub set forth in
this Agreement shall be true and correct in all material respects (except
that where any statement in a representation or warranty expressly includes
a "material adverse effect", "material" or other materiality qualifier,
such representation or warranty shall be true and correct in all respects)
as of date hereof and as of the Closing Date as if made on and as of the
Closing Date, except those representations and warranties that speak of an
earlier date, which shall be true and correct as of such earlier date (it
being understood that, for purposes of determining the accuracy of such
representations and warranties, any update of or modification to the
Purchaser Disclosure Schedule made or purported to have been made after the
date of this Agreement shall be disregarded).
(b) Performance by Purchaser. Each of Purchaser and
Merger Sub shall have performed and complied with all the covenants and
agreements in all material respects and satisfied in all material respects
all the conditions required by this Agreement to be performed or complied
with or satisfied by Purchaser and/or Merger Sub at or prior to the
Effective Time.
(c) No Material Adverse Change. There shall have been no
changes, conditions, events, or developments (including but not limited to
with respect to any matters described in this Agreement or in the Purchaser
Securities Filings or on the Purchaser Disclosure Schedule) that have or
would reasonably be expected to have a Purchaser Material Adverse Effect
since the date of this Agreement; provided, however, that for purposes of
determining whether there shall have been any such Purchaser Material
Adverse Effect, (i) any adverse change resulting from or relating to
general business or economic conditions shall be disregarded, (ii) any
adverse change resulting from or relating to conditions generally affecting
the industry in which Purchaser competes shall be disregarded, and (iii)
any adverse change resulting from or relating to the taking of any action
contemplated by this Agreement shall be disregarded.
(d) Certificates and Other Deliveries. Purchaser shall
have delivered, or caused to be delivered, to the Company: (i) a
certificate executed on its behalf by its President or another authorized
officer to the effect that the conditions set forth in Sections 6.2(a), (b)
and (c) hereof have been satisfied; (ii) a certificate of good standing
from the Secretary of State of the State of Delaware stating that Purchaser
is a validly existing corporation in good standing; (iii) a certificate of
good standing from the Secretary of State of Delaware stating that Merger
Sub is a validly existing corporation in good standing; (iv) duly adopted
resolutions of the Board of Directors of Purchaser and the Board of
Directors and the shareholder of Merger Sub approving the execution,
delivery and performance of this Agreement and the instruments contemplated
hereby, each certified by its respective Secretary; (v) the duly executed
Purchaser Tax Opinion Certificate; and (vi) such other documents and
instruments as the Company reasonably may request.
(e) Tax Opinion. The Company shall have received an
opinion from its tax counsel substantially to the effect that, if the
Merger is consummated in accordance with the provisions of this Agreement,
under current Law, for federal income tax purposes, the Merger will qualify
as a reorganization within the meaning of Section 368(a) of the Code. For
purposes of rendering its opinion, the Company's tax counsel may rely on
the statements and representations set forth in the Company Tax Opinion
Certificate and the Purchaser Tax Opinion Certificate, without regard to
any qualification as to knowledge and belief.
6.3. Conditions to Obligations of Purchaser. The
obligations of Purchaser to effect the Merger shall be subject to the
fulfillment at or prior to the Effective Time of the following additional
conditions, any one or more of which may be waived by Purchaser:
(a) Company Representation and Warranties. The
representations and warranties of the Company set forth in this Agreement
shall be true and correct in all material respects (except that where any
statement in a representation or warranty expressly includes a "material
adverse effect", "material" or other materiality qualifier, such
representation or warranty shall be true and correct in all respects) as of
the date hereof and as of the Closing Date as if made on and as of the
Closing Date, except those representations and warranties that speak of an
earlier date, which shall be true and correct as of such earlier date (it
being understood that, for purposes of determining the accuracy of such
representations and warranties, any update of or modification to the
Company Disclosure Schedule made or purported to have been made after the
date of this Agreement shall be disregarded).
(b) Performance by the Company. The Company shall have
performed and complied with all the covenants and agreements in all
material respects and satisfied in all material respects all the conditions
required by this Agreement to be performed or complied with or satisfied by
the Company at or prior to the Effective Time.
(c) No Material Adverse Change. There shall have
been no changes, conditions, events, or developments (including but not
limited to with respect to any matters described in this agreement or in
the Company Securities Filings or on the Company Disclosure Schedule) that
have or would reasonably be expected to have a Company Adverse Effect since
the date of this Agreement; provided, however, that for purposes of
determining whether there shall have been any such Company Material Adverse
Effect, (i) any adverse change resulting from or relating to general
business or economic conditions shall be disregarded, (ii) any adverse
change resulting from or relating to conditions generally affecting the
industry in which the Company competes shall be disregarded, and (iii) any
adverse change resulting from or relating to the taking of any action
contemplated by this Agreement shall be disregarded.
(d) Certificates and Other Deliveries. The Company shall
have delivered, or caused to be delivered, to Purchaser (i) a certificate
executed on its behalf by its President or another duly authorized officer
to the effect that the conditions set forth in Sections 6.3(a), (b) and (c)
hereof have been satisfied; (ii) a certificate of good standing from the
Secretary of State of the State of Minnesota stating that the Company is a
validly existing corporation in good standing; (iii) duly adopted
resolutions of its Board of Directors approving the execution, delivery and
performance of this Agreement and the instruments contemplated hereby, and
of the Company's shareholders approving the Company Proposals, each
certified by the Secretary of the Company; (iv) a true and complete copy of
the Articles of Incorporation of the Company certified by the Secretary of
State of the State of Minnesota, and a true and complete copy of the Bylaws
of the Company certified by the Secretary thereof; (v) the duly executed
Company Tax Opinion Certificate; and (vi) such other documents and
instruments as Purchaser reasonably may request.
(e) Tax Opinion. Purchaser shall have received an opinion
from its tax counsel substantially to the effect that, if the Merger is
consummated in accordance with the provisions of this Agreement, under
current Law, for federal income tax purposes, the Merger will qualify as a
reorganization within the meaning of Section 368(a) of the Code. For
purposes of rendering its opinion, Purchaser's tax counsel may rely on the
statements and representations set forth in the Purchaser Tax Opinion
Certificate and the Company Tax Opinion Certificate, without regard to any
qualification as to knowledge and belief.
(f) Governmental Approval. All Consents of any
Governmental Authority required for the consummation of the Merger and the
transactions contemplated by this Agreement shall have been obtained,
except as may be waived by Purchaser or those Consents the failure or which
to obtain will not have a Company Material Adverse Effect or a Purchaser
Material Advise Effect.
(g) Required Consents. Except with respect to any
Waived Consents, any material required Consents of any person to the Merger
or the transactions contemplated hereby shall have been obtained and be in
full force and effect.
(h) Employee Termination, Consulting and Non-Competition
Agreements. Concurrently with the execution and delivery of this Agreement,
Purchaser, is entering into an Employee Termination, Consulting and Non-
Competition Agreement, in the form of Exhibit B hereto with each of the
directors and officers named therein and each of such Employee Termination,
Consulting and Non-Competition Agreements shall be in full force and
effect.
6.4. Frustration of Conditions. Neither Purchaser nor the
Company may rely on the failure of any condition set forth in this Article
VI to be satisfied if such failure was caused by such party's failure to
comply with or perform any of its covenants or obligations set forth in
this Agreement.
ARTICLE VII
TERMINATION AND ABANDONMENT
7.1. Termination. This Agreement may be terminated at
any time prior to the Effective Time, whether before or after approval of
the shareholders of the Company and the shareholders of Purchaser described
herein:
(a) by mutual written consent of Purchaser and the
Company;
(b) by either Purchaser or the Company if:
(i) the Merger shall not have been consummated on or
prior to August 31, 2000, provided, however, that the right to terminate
this Agreement pursuant to this Section 7.1(b) (i) shall not be available
to any party whose failure to perform any of its obligations under this
Agreement results in the failure of the Merger to be consummated by such
time;
(ii) the vote of the Company's shareholders shall have
been taken at a meeting duly convened therefor or at any adjournment or
postponement thereof and shall be insufficient to approve the Company
Proposals;
(iii) any Governmental Authority shall have issued an
order, decree or ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the consummation of the Merger and
such order, decree or ruling or other action shall have become final and
nonappealable;
(c) by Purchaser if the Company shall have breached in
any material respect any of its representations, warranties, covenants or
other agreements contained in this Agreement, which breach or failure to
perform is incapable of being cured or has not been cured within 20
business days after the giving of written notice to the Company;
(d) by Purchaser if (i) the Board of Directors of the
Company shall have withdrawn or modified in a manner adverse to Purchaser
its approval or recommendation of any of the Company Proposals, or failed
to reconfirm its recommendation within 15 business days after a written
request to do so, or approved or recommended any Company Superior Proposal
or (ii) the Board of Directors of the Company shall have resolved to take
any of the foregoing actions;
(e) by the Company if Purchaser shall have breached in
any material respect any of its representations, warranties, covenants or
other agreements contained in this Agreement, which breach or failure to
perform is incapable of being cured or has not been cured within 20
business days after the giving of written notice to Purchaser;
(f) by Purchaser on or before the Decision Date if any
one or more material Consents required from third parties (other than
Governmental Authorities) in connection with this Agreement and the
transactions contemplated hereby have not been obtained; and
(g) without any action on the part of any party hereto on
the day immediately following the Decision Date in the event that, and only
in the event that, (i) Purchaser has not terminated this Agreement by or on
the Decision Date pursuant to Section 7.1(f) or (ii) Purchaser has not
waived any material Consents specified in the Consent Notice and which are
required from third parties (other than Governmental Authorities) in
connection with this Agreement and the transactions contemplated hereby
which have not been obtained by the Company prior to or on the Decision
Date.
The party desiring to terminate this Agreement pursuant to the preceding
paragraphs shall give written notice of such termination to the other party
in accordance with Section 8.7 hereof.
7.2. Effect of Termination and Abandonment. (a) In the
event of termination of this Agreement and the abandonment of the Merger
pursuant to this Article VII, this Agreement (other than Sections 7.2, 8.1,
8.4, 8.5, 8.6, 8.7, 8.8, 8.9, 8.10, 8.11, 8.12, 8.13, 8.14, 8.15, 8.16,
8.17 and 8.18) shall become void and of no effect with no liability on the
part of any party hereto (or of any of its directors, officers, employees,
agents, legal or financial advisors or other representatives); provided,
however, that no such termination shall relieve any party hereto from any
liability for any breach of this Agreement prior to termination. If this
Agreement is terminated as provided herein, each party shall use its
reasonable best efforts to redeliver all documents, work papers and other
material (including any copies thereof) of any other party relating to the
transactions contemplated hereby, whether obtained before or after the
execution hereof, to the party furnishing the same.
(b) In the event that prior to termination of this
Agreement a bona fide Company Takeover Proposal shall have been made known
to the Company or has been made directly to its shareholders generally or
any person shall have publicly announced an intention (whether or not
conditional) to make a bona fide Company Takeover Proposal (a "Competing
Company Takeover Proposal"), and thereafter this Agreement is (x)
terminated pursuant to Section 7.1(b)(i), 7.1(b)(ii) or 7.1(g) or (y)
terminated by Purchaser pursuant to Section 7.1(c), 7.1(d) or 7.1(f), then
the Company shall promptly, but in no event later than, in the case of
termination by Purchaser, two days after, or in the case of termination by
the Company, immediately prior to, termination of this Agreement giving
rise to the Company's payment obligation, pay Purchaser a fee equal to
$1,000,000 (the "Termination Fee"), payable by wire transfer of same day
funds. The Company acknowledges that the agreements contained in this
Section 7.2(b) are an integral part of the transactions contemplated by
this Agreement and that, without these agreements, Purchaser would not
enter into this Agreement. Notwithstanding the foregoing, no fee or expense
reimbursement shall be paid pursuant to this Section 7.2(b) if Purchaser
shall be in material breach of its obligations hereunder.
(c) Purchaser acknowledges that payments made under
Section 7.2(b) hereof shall constitute its exclusive remedy with respect to
any termination of this Agreement that gives rise to such payment
obligation.
ARTICLE VIII
MISCELLANEOUS
8.1. Confidentiality. Unless (i) otherwise expressly
provided in this Agreement, (ii) required by applicable Law or any listing
agreement with, or the rules and regulations of, any applicable securities
exchange or the NASD, (iii) necessary to secure any required Consents as to
which the other party has been advised or (iv) consented to in writing by
Purchaser and the Company, any information or documents furnished in
connection herewith shall be kept strictly confidential by the Company,
Purchaser and their respective officers, directors, employees and agents.
Prior to any disclosure pursuant to the preceding sentence, the party
intending to make such disclosure shall consult with the other party
regarding the nature and extent of the disclosure. Nothing contained herein
shall preclude disclosures to the extent necessary to comply with
accounting, SEC and other disclosure obligations imposed by applicable Law.
To the extent required by such disclosure obligations, Purchaser or the
Company, after consultation with the other party, may file with the SEC a
Report on Form 8-K pursuant to the Securities Exchange Act with respect to
the Merger, which report may include, among other things, financial
statements and pro forma financial information with respect to the other
party. In connection with any filing with the SEC of a registration
statement or amendment thereto under the Securities Act, the Company or
Purchaser, after consultation with the other party, may include a
prospectus containing any information required to be included therein with
respect to the Merger, including, but not limited to, financial statements
and pro forma financial information with respect to the other party, and
thereafter distribute said prospectus. Purchaser and the Company shall
cooperate with the other and provide such information and documents as may
be required in connection with any such filings. In the event the Merger is
not consummated, each party shall return to the other any documents
furnished by the other and all copies thereof any of them may have made and
will hold in absolute confidence any information obtained from the other
party except to the extent (i) such party is required to disclose such
information by Law or such disclosure is necessary or desirable in
connection with the pursuit or defense of a claim, (ii) such information
was known by such party prior to such disclosure or was thereafter
developed or obtained by such party independent of such disclosure or (iii)
such information becomes generally available to the public other than by
breach of this Section 8.1. Prior to any disclosure of information pursuant
to the exception in clause (i) of the preceding sentence, the party
intending to disclose the same shall so notify the party which provided the
name in order that such party may seek a protective order or other
appropriate remedy should it choose to do so.
8.2. The Rainforest Cafe Friends of the Future
Foundation. At the Effective Time, the directors of Rainforest Cafe Friends
of the Future Foundation (the "Foundation"), shall resign and shall elect
successor directors as designated by Purchaser. For all purposes of this
Agreement, the Foundation shall be deemed a "Company Subsidiary."
8.3. Additional Approvals. If, contrary to the parties'
understanding, the approval of the shareholders of Purchaser shall be
required to effectuate the transactions contemplated hereby, Purchaser
shall, as soon as reasonably practicable, call, give notice of, convene and
hold a meeting of its shareholders for purpose of seeking to obtain such
approval. Notwithstanding anything to the contrary contained herein, no
such approval of the shareholders of Purchaser as described in the
preceding sentence shall be deemed a breach of any representation,
warranty, covenant, agreement or other provision of this Agreement.
8.4. Amendment and Modification. This Agreement may be
amended, modified or supplemented only by a written agreement among the
Company, Purchaser and Merger Sub.
8.5. Waiver of Compliance; Consents. Any failure of the
Company on the one hand, or Purchaser on the other hand, to comply with any
obligation, covenant, agreement or condition herein may be waived by
Purchaser on the one hand, or the Company on the other hand, only by a
written instrument signed by the party granting such waiver, but such
waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto,
such consent shall be given in writing in a manner consistent with the
requirements for a waiver of compliance as set forth in this Section 8.5.
8.6. Survival. The respective representations,
warranties, covenants and agreements of the Company and Purchaser contained
herein or in any certificates or other documents delivered prior to or at
the Closing shall survive the execution and delivery of this Agreement,
notwithstanding any investigation made or information obtained by the other
party, but shall terminate at the Effective Time, except for those
covenants contained in Sections 1.4, 1.5, 1.6, 1.7, 1.13, 5.7, 8.1 and 8.16
hereof, which shall survive beyond the Effective Time in accordance with
their terms.
8.7. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given
when delivered in person, by facsimile, receipt confirmed, or on the next
business day when sent by overnight courier or on the second succeeding
business day when sent by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following
addresses (or at such other address for a party as shall be specified by
like notice):
(i) if to the Company, to:
Rainforest Cafe, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telecopy: 000-000-0000
with a copy to (but which shall not constitute notice to the Company):
Maslon, Edelman, Xxxxxx & Brand
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telecopy: 000-000-0000
and
(ii) if to Purchaser or Merger Sub, to:
Xxxxxx'x Seafood Restaurants, Inc.
0000 Xxxx Xxx Xxxx., Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx
Telecopy: 000-000-0000
with a copy to (but which shall not constitute notice to Purchaser):
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telecopy: 000-000-0000
8.8. Binding Effect; Assignment. This Agreement and all
of the provisions hereof shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns.
Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto prior to the
Effective Time without the prior written consent of the other parties
hereto.
8.9. Expenses. All costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby
shall be paid by the party incurring such costs or expenses.
8.10. Governing Law. This Agreement shall be deemed to be
made in, and in all respects shall be interpreted, construed and governed
by and in accordance with the internal laws of, the State of Delaware. Each
of the Company, Purchaser and Merger Sub hereby irrevocably and
unconditionally consents to submit to the jurisdiction of the federal and
state courts located in Delaware for any litigation arising out of or
relating to this Agreement and the transactions contemplated hereby (and
agrees not to commence any litigation relating thereto except in such
courts), waives any objection to the laying of venue of any such litigation
in such courts and agrees not to plead or claim in any such court that such
litigation brought therein has been brought in an inconvenient forum.
8.11. Counterparts. This Agreement may be executed in
one or more counterparts, each of which together be deemed an original, but
all of which together shall constitute one and the same instrument.
8.12. Interpretation. The article and section headings
contained in this Agreement are solely for the purpose of reference, are
not part of the agreement of the parties and shall not in any way affect
the meaning or interpretation of this Agreement. As used in this Agreement,
(i) the term "Person" shall mean and include an individual, a partnership,
a joint venture, a corporation, a limited liability company, a trust, an
association, an unincorporated organization, a Governmental Authority and
any other entity, (ii) unless otherwise specified herein, the term
"affiliate," with respect to any person, shall mean and include any person
controlling, controlled by or under common control with such person, (iii)
the term "subsidiary" of any specified person shall mean any corporation
any of the outstanding voting power of which, or any partnership, joint
venture, limited liability company or other entity any of the total equity
interest of which, is directly or indirectly owned by such specified
person, (iv) the term "knowledge," when used with respect to the Company,
shall mean the knowledge of the directors and executive officers of the
Company when used with respect to Purchaser, shall mean the knowledge of
the directors and executive officers of Purchaser, and (v) the term
"including" shall mean "including, without limitation".
8.13. Entire Agreement. This Agreement and the documents
or instruments referred to herein including, but not limited to, the
Exhibit(s) attached hereto and the Disclosure Schedules referred to herein,
which Exhibit(s) and Disclosure Schedules are incorporated herein by
reference, embody the entire agreement and understanding of the parties
hereto in respect of the subject matter contained herein. There are no
restrictions, promises, representations, warranties, covenants, or
undertakings, other than those expressly set forth or referred to herein.
This Agreement supersedes all prior agreements and the understandings
between the parties with respect to such subject matter.
8.14. Severability. In case any provision in this
Agreement shall be held invalid, illegal or unenforceable in a
jurisdiction, such provision shall be modified or deleted, as to the
jurisdiction involved, only to the extent necessary to render the same
valid, legal and enforceable, and the validity, legality and enforceability
of the remaining provisions hereof shall not in any way be affected or
impaired thereby nor shall the validity, legality or enforceability of such
provision be affected thereby in any other jurisdiction.
8.15. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms
or were otherwise breached. Accordingly, the parties further agree that
each party shall be entitled to an injunction or restraining order to
prevent breaches of this Agreement and to enforce specifically the terms
and provisions hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other right or remedy to which
such party may be entitled under this Agreement, at law or in equity.
8.16. Third Parties. Nothing contained in this Agreement
or in any instrument or document executed by any party in connection with
the transactions contemplated hereby shall create any rights in, or be
deemed to have been executed for the benefit of, any person or entity that
is not a party hereto or thereto or a successor or permitted assign of such
a party; provided however, that the parties hereto specifically acknowledge
that the provisions of Sections 5.7 and 5.9 hereof are intended to be for
the benefit of, and shall be enforceable by, the current or former
employees, officers and directors of the Company and/or the Company
Subsidiaries affected thereby and their heirs and representatives.
8.17. Disclosure Schedules. The Company and Purchaser
acknowledge that the Company Disclosure Schedule and the Purchaser
Disclosure Schedule (i) relate to certain matters concerning the
disclosures required and transactions contemplated by this Agreement, (ii)
are qualified in their entirety by reference to specific provisions of this
Agreement and (iii) are not intended to constitute and shall not be
construed as indicating that such matter is required to be disclosed, nor
shall such disclosure be construed as an admission that such information is
material with respect to the Company or Purchaser, as the case may be,
except to the extent required by this Agreement.
8.18. Obligation of Purchaser. Whenever this Agreement
requires Merger Sub to take any action, such requirement shall be deemed to
include an undertaking on the part of Purchaser to cause Merger Sub to take
such action.
IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement
and Plan of Merger to be signed and delivered by their respective duly
authorized officers as of the date first above written.
XXXXXX'X SEAFOOD RESTAURANTS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman, President and
Chief Executive Officer
RAINFOREST CAFE, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
LSR ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
TABLE OF CONTENTS
Page
ARTICLE I
TERMS OF THE MERGER
1.1. The Merger..........................................................2
1.2. The Closing; Effective Time.........................................2
1.3. Merger Consideration................................................3
1.4. Election Procedure..................................................4
1.5. Issuance of Purchaser Stock and Payment of
Cash Consideration; Proration.......................................6
1.6. Issuance of Purchaser Stock.........................................8
1.7. Payment of Cash Consideration.......................................9
1.8. Options............................................................10
1.9. Dissenting Shares..................................................11
1.10. Articles of Incorporation and Bylaws...............................12
1.11. Stock Transfer Books...............................................12
1.12. Directors and Officers.............................................12
1.13. Other Effects of Merger............................................12
1.14. Registration Statement Prospectus/Proxy Statement..................12
1.15. Tax-Free Reorganization............................................15
1.16. Additional Actions.................................................15
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
2.1. Due Incorporation and Good Standing................................15
2.2. Capitalization.....................................................16
2.3. Subsidiaries.......................................................16
2.4. Authorization; Binding Agreement...................................17
2.5. Governmental Approvals.............................................18
2.6. No Violations......................................................18
2.7. Securities Filings.................................................19
2.8. Company Financial Statements.......................................19
2.9. Absence of Certain Changes or Events; No Undisclosed Liabilities...20
2.10. Compliance with Laws...............................................20
2.11. Permits............................................................20
2.12. Litigation.........................................................21
2.13. Contracts..........................................................21
2.14. Employee Benefit Plans.............................................21
2.15. Taxes and Returns..................................................23
2.16. Intellectual Property..............................................24
2.17. Finders and Investment Bankers.....................................26
2.18. Fairness Opinion...................................................26
2.19. Insurance..........................................................26
2.20. Vote Required; Ownership of Purchaser Capital Stock;
State Takeover Statutes............................................26
2.21. Title to Properties................................................27
2.22. Environmental Matters..............................................28
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
3.1. Due Incorporation and Good Standing................................29
3.2. Capitalization.....................................................29
3.3. Authorization; Binding Agreement...................................30
3.4. Governmental Approvals.............................................30
3.5. No Violations......................................................30
3.6. Securities Filings.................................................31
3.7. Purchaser Financial Statements.....................................32
3.8. Absence of Certain Changes or Events; No Undisclosed Liabilities...32
3.9. Compliance with Laws...............................................32
3.10. Litigation.........................................................32
3.11. Tax Returns........................................................33
3.12. Finders and Investment Bankers.....................................33
3.13. Fairness Opinion...................................................33
3.14. No Prior Activities................................................33
3.15. Ownership of Company Stock.........................................33
ARTICLE IV
ADDITIONAL COVENANTS OF THE COMPANY
4.1. Conduct of Business of the Company and
the Company Subsidiaries...........................................34
4.2. Notification of Certain Matters....................................37
4.3. Access and Information.............................................38
4.4. Shareholder Approval...............................................38
4.5. Reasonable Best Efforts............................................38
4.6. Public Announcements...............................................39
4.7. Compliance.........................................................40
4.8. No Solicitation....................................................40
4.9. Tax Opinion Certificate............................................42
4.10. SEC and Shareholder Filings........................................43
ARTICLE V
ADDITIONAL COVENANTS OF PURCHASER
5.1. Access and Information.............................................43
5.2. Notification of Certain Matters....................................43
5.3. Reasonable Best Efforts............................................44
5.4. Compliance.........................................................44
5.5. SEC and Shareholder Filings........................................44
5.6. Tax Opinion Certificate............................................44
5.7. Indemnification....................................................44
5.8. Benefit Plans and Employee Matters.................................46
ARTICLE VI
CONDITIONS
6.1. Conditions to Each Party's Obligations.............................46
6.2. Conditions to Obligations of the Company...........................47
6.3. Conditions to Obligations of Purchaser.............................49
6.4. Frustration of Conditions..........................................51
ARTICLE VII
TERMINATION AND ABANDONMENT
7.1. Termination........................................................51
7.2. Effect of Termination and Abandonment..............................52
ARTICLE VIII
MISCELLANEOUS
8.1. Confidentiality....................................................53
8.2. The Rainforest Cafe Friends of the Future Foundation...............54
8.3. Additional Approvals...............................................55
8.4. Amendment and Modification.........................................55
8.5. Waiver of Compliance; Consents.....................................55
8.6. Survival...........................................................55
8.7. Notices............................................................55
8.8. Binding Effect; Assignment.........................................57
8.9. Expenses...........................................................57
8.10. Governing Law......................................................57
8.11. Counterparts.......................................................57
8.12. Interpretation.....................................................57
8.13. Entire Agreement...................................................58
8.14. Severability.......................................................58
8.15. Specific Performance...............................................58
8.16. Third Parties......................................................59
8.17. Disclosure Schedules...............................................59
8.18. Obligation of Purchaser............................................59
Exhibits:
Exhibit A - Form of Stockholder Agreements
Exhibit B - Form of Employee Termination, Consulting and Non-Competition
Agreement
