EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
CACTUS ACQUISITION, INC.
AND
WESTERN BEEF, INC.
Dated as of July 29, 1999
TABLE OF CONTENTS
Page
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ARTICLE I. The Merger........................................................1
Section 1.1. The Merger..............................................1
Section 1.2. Effective Time..........................................1
Section 1.3. Closing.................................................1
Section 1.4. Certificate of Incorporation; By-laws; Officers
and Directors...........................................1
Section 1.5. Effect on Common Stock..................................2
Section 1.6. Dissenting Shares.......................................3
Section 1.7. Treatment of Options....................................3
Section 1.8. Exchange of Certificates................................3
Section 1.9. Proxy Statement and Schedule 13E-3......................5
Section 1.10. Additional Agreements and Provisions....................6
ARTICLE II. Representations and Warranties of Western Beef...................7
Section 2.1. Organization of Western Beef and its Subsidiaries.......7
Section 2.2. Capitalization of Western Beef; Ownership...............7
Section 2.3. Subsidiaries of Western Beef............................7
Section 2.4. Authorization...........................................7
Section 2.5. Fairness Opinion and Approval by the Special Committee..8
Section 2.6. Brokers and Finders.....................................8
Section 2.7. SEC Documents; Undisclosed Liabilities..................8
Section 2.8. Absence of Certain Changes or Events....................9
ARTICLE III. Representations and Warranties of Cactus........................9
Section 3.1. Organization and Authority of Cactus....................9
Section 3.2. Capitalization of Cactus................................9
Section 3.3. Authorization...........................................9
Section 3.4. Brokers and Intermediaries..............................9
Section 3.5. Proxy Statement.........................................9
Section 3.6. Financing..............................................10
ARTICLE IV. Certain Covenants and Agreements................................10
Section 4.1. Announcement...........................................10
Section 4.2. Notification of Certain Matters........................10
Section 4.3. Directors' And Officers' Indemnification...............10
Section 4.4. Proxy Statement and Schedule 13E-3.....................11
ARTICLE V. Conditions Precedent.............................................11
Section 5.1. Conditions to Each Party's Obligation to
Effect the Merger......................................11
Section 5.2. Conditions to the Obligation of Western Beef
to Effect the Merger...................................11
Section 5.3. Conditions to the Obligation of Acquisition to
Effect the Merger......................................12
ARTICLE VI. Termination, Amendment and Waiver...............................12
Section 6.1. Termination............................................12
Section 6.2. Effect of Termination..................................13
Section 6.3. Amendment..............................................13
Section 6.4. Waiver.................................................13
ARTICLE VII. Miscellaneous..................................................13
Section 7.1. Non-Survival of Representations and Warranties.........13
Section 7.2. Expenses...............................................13
Section 7.3. Applicable Law.........................................14
Section 7.4. Notices................................................14
Section 7.5. Entire Agreement.......................................15
Section 7.6. Assignment.............................................15
Section 7.7. Headings; References...................................15
Section 7.8. Counterparts...........................................15
Section 7.9. No Third Party Beneficiaries...........................15
Section 7.10. Severability; Enforcement.. ...........................15
(ii)
AGREEMENT AND PLAN OF MERGER, dated as of July 29, 1999 (the
"Agreement"), by and between Cactus Acquisition, Inc., a Delaware corporation
("Cactus"), and Western Beef, Inc., a Delaware corporation ("Western Beef").
WHEREAS, the Board of Directors of Western Beef, upon the
recommendation of the special committee established to consider the fairness of
the transaction contemplated by this Agreement (the "Special Committee"), has
unanimously approved, and deems advisable and in the best interests of its
stockholders, the merger of Cactus with and into Western Beef in accordance with
Section 251 of the Delaware General Corporation Law (the "DGCL") and upon the
terms, and subject to the conditions, of this Agreement (the "Merger");
WHEREAS, the Board of Directors of Cactus has unanimously approved, and
deems advisable and in the best interests of its stockholders, the Merger in
accordance with Section 251 of the DGCL and upon the terms, and subject to the
conditions, of this Agreement;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties hereto,
intending to be legally bound, agree as follows:
ARTICLE I.
The Merger
Section 1.1. The Merger. At the Effective Time (as hereinafter
defined), upon the terms and subject to the conditions set forth in this
Agreement and in accordance with the DGCL, Cactus shall be merged with and into
Western Beef, the separate existence of Cactus shall cease, and Western Beef
shall continue as the surviving corporation (the "Surviving Corporation"). The
Merger shall have the effects as provided by the DGCL and other applicable law.
Section 1.2. Effective Time. As soon as practicable following the
satisfaction or waiver of the conditions set forth in Article V, the parties
shall file with the Secretary of State of the State of Delaware a certificate of
merger (the "Certificate of Merger") executed in accordance with the relevant
provisions of the DGCL. The Merger shall become effective at such time as the
Certificate of Merger is duly filed in the Department of State of the State of
Delaware, or at such other time as is permissible in accordance with the DGCL
and as Cactus and Western Beef shall agree and as specified in the Certificate
of Merger (the time the Merger becomes effective being the "Effective Time").
Section 1.3. Closing. The closing of the Merger (the "Closing") will
take place at the offices of Xxxxxxx Xxxx & Xxxxxxxxx, 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 at 9:00 a.m. (New York time) on the date which is no later
than the third business day following satisfaction of the conditions provided in
Article V, or at such other time and place as Cactus and Western Beef shall
agree (the "Closing Date").
Section 1.4. Certificate of Incorporation; By-laws; Officers and
Directors. Pursuant to the Merger: (a) the Certificate of Incorporation and
By-laws of Western Beef as in effect
immediately prior to the Effective Time shall be the Certificate of
Incorporation and By-laws of the Surviving Corporation following the Merger,
until thereafter changed or amended as provided therein and in accordance with
applicable law; (b) the directors of Cactus shall be the directors of the
Surviving Corporation following the Merger and until the earlier of their death,
resignation or removal or until their respective successors are duly elected or
appointed and qualified; and (c) the officers of Western Beef immediately prior
to the Effective Time shall be the officers of the Surviving Corporation until
the earlier of their death, resignation or removal or until their respective
successors are duly elected or appointed and qualified.
Section 1.5. Effect on Common Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of Cactus, Western Beef
or the holders of any shares of common stock, par value $.05 per share ("Western
Beef Common Stock"), of Western Beef:
(a) Common Stock of Cactus. Each share of common stock, no par
value per share ("Cactus Common Stock"), of Cactus, which is issued and
outstanding immediately prior to the Effective Time, shall be converted into and
become one share of common stock, par value $.05 per share, of the Surviving
Corporation.
(b) Common Stock of Western Beef. Subject to Sections 1.5(c),
1.5(d) and 1.6, each share of Western Beef Common Stock which is issued and
outstanding immediately prior to the Effective Time shall be converted into and
become a right to receive $8.75 in cash (the "Merger Consideration") and, when
so converted, shall automatically be canceled and retired and shall cease to
exist, and each holder of a certificate representing any such shares of Western
Beef Common Stock shall, to the extent such certificate represents such shares,
cease to have any rights with respect thereto, except the right to receive the
Merger Consideration allocable to the shares formerly represented by such
certificate upon surrender of such certificate in accordance with Section 1.8.
(c) Cancellation of Treasury Stock. Each share of Western Beef
Common Stock that is owned immediately prior to the Effective Time by Western
Beef or any Subsidiary of Western Beef (as hereinafter defined) that constitutes
treasury stock in the hands of the holder thereof, shall be canceled and retired
and shall cease to exist, and no consideration shall be delivered in exchange
therefor, and each holder of a certificate representing any such shares shall
cease to have any rights with respect thereto. The term "Subsidiary" means any
corporation, joint venture, partnership, limited liability company or other
entity of which Western Beef, directly or indirectly, owns or controls capital
stock (or other equity interests) representing more than fifty percent of the
general voting power of such entity under ordinary circumstances.
(d) Western Beef Common Stock Held by Cactus. Each share of Western
Beef Common Stock that is owned immediately prior to the Effective Time by
Cactus shall be canceled and retired and shall cease to exist, and no
consideration shall be delivered in exchange therefor, and Cactus shall cease to
have any rights with respect to any certificates representing any such shares.
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Section 1.6. Dissenting Shares.
(a) Notwithstanding anything in this Agreement to the contrary,
shares of Western Beef Common Stock outstanding immediately prior to the
Effective Time and held by a holder who has demanded and perfected such holder's
right to appraisal of such shares in accordance with Section 262 of the DGCL
("Dissenting Shares") shall not be converted into the right to receive the
Merger Consideration, but the holder thereof shall instead be entitled to such
rights as are afforded under the DGCL with respect to such holder's Dissenting
Shares, unless such holder fails to perfect or withdraws or otherwise loses such
holder's right to appraisal.
(b) If any holder of shares of Western Beef Common Stock who
demands appraisal of such holder's shares pursuant to the DGCL fails to perfect
or withdraws or otherwise loses such holder's right to appraisal, at the later
of the Effective Time or upon the occurrence of such event, the Dissenting
Shares of such holder shall be converted into and represent the right to receive
the Merger Consideration, without interest thereon, in accordance with Section
1.5(b).
(c) Western Beef shall give Cactus (i) prompt notice of any written
demand for appraisal or payment of the fair value of any shares of Western Beef
Common Stock, withdrawals of such demands, and any other instruments served
pursuant to the DGCL received by the Western Beef and (ii) the opportunity to
direct all negotiations and proceedings with respect to demands for appraisal
under the DGCL. Western Beef shall not voluntarily make any payment with respect
to any demand for appraisal and shall not, except with the prior written consent
of Cactus, settle or offer to settle any such demands.
Section 1.7. Treatment of Options.
(a) Pursuant to the Merger, at the Effective Time, each outstanding
option to purchase shares of Western Beef Common Stock (a "Western Beef Stock
Option"), whether or not vested, will be terminated and, in exchange for such
Western Beef Stock Option, the holder will be entitled to receive, for each
share of Western Beef Common Stock subject to such Western Beef Stock Option, a
cash payment equal to the excess, if any, of the Merger Consideration over the
applicable exercise price.
(b) Prior to the Effective Time, Western Beef shall use its best
efforts to (i) obtain any consents from holders of the Western Beef Stock
Options and (ii) make any amendments to the terms of the Western Beef Stock
Option Plan and any options granted thereunder that, in case of either (i) or
(ii), are necessary or appropriate to give effect to the transactions
contemplated by this Section 1.7.
Section 1.8. Exchange of Certificates.
(a) Exchange Agent. Prior to the Effective Time, Western Beef shall
appoint a bank or trust company to act as exchange agent (the "Exchange Agent")
for the payment of the Merger Consideration. As of the Effective Time, Western
Beef shall have deposited with the Exchange Agent, for the benefit of the
holders of shares of Western Beef Common Stock, for exchange in accordance with
this Section 1.8, the aggregate amount of cash payable pursuant to Section
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1.5(b) hereof in exchange for outstanding shares of Western Beef Common
Stock (the "Exchange Fund").
(b) Exchange Procedures. Promptly after the Effective Time, the
Exchange Agent shall mail to each holder of record of a certificate or
certificates, which immediately prior to the Effective Time represented
outstanding shares of Western Beef Common Stock, whose shares were converted
into the right to receive cash pursuant to Section 1.5(b), a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the certificates representing such shares of Western Beef
Common Stock shall pass, only upon delivery of the certificates representing
such shares of Western Beef Common Stock to the Exchange Agent and shall be in
such form and have such other provisions as the Exchange Agent may reasonably
specify), and instructions for use in effecting the surrender of the
certificates representing such shares of Western Beef Common Stock, in exchange
for the Merger Consideration. Upon surrender to the Exchange Agent of a
certificate or certificates formerly representing shares of Western Beef Common
Stock and acceptance thereof by the Exchange Agent, the holder thereof shall be
entitled to the amount of cash into which the number of shares of Western Beef
Common Stock formerly represented by such certificate or certificates
surrendered shall have been converted pursuant to this Agreement. The Exchange
Agent shall accept such certificates upon compliance with such reasonable terms
and conditions as the Exchange Agent may impose to effect an orderly exchange
thereof in accordance with normal exchange practices. After the Effective Time,
there shall be no further transfer on the records of Western Beef or its
transfer agent of certificates representing shares of Western Beef Common Stock
and if such certificates are presented to Western Beef for transfer, they shall
be canceled against delivery of the Merger Consideration allocable to the shares
of Western Beef Common Stock represented by such certificate or certificates. If
any Merger Consideration is to be remitted to a name other than that in which
the certificate for the Western Beef Common Stock surrendered for exchange is
registered, it shall be a condition of such exchange that the certificate so
surrendered shall be properly endorsed, with signature guaranteed, or otherwise
in proper form for transfer and that the person requesting such exchange shall
pay to Western Beef, or its transfer agent, any transfer or other taxes required
by reason of the payment of the Merger Consideration to a name other than that
of the registered holder of the certificate surrendered, or establish to the
satisfaction of Western Beef or its transfer agent that such tax has been paid
or is not applicable. Until surrendered as contemplated by this Section 1.8,
each certificate for shares of Western Beef Common Stock shall be deemed at any
time after the Effective Time to represent only the right to receive upon such
surrender the Merger Consideration allocable to the shares represented by such
certificate as contemplated by Section 1.5(b). No interest will be paid or will
accrue on any amount payable as Merger Consideration.
(c) No Further Ownership Rights in Western Beef Stock. The Merger
Consideration paid upon the surrender for exchange of certificates formerly
representing shares of Western Beef Common Stock in accordance with the terms of
this Section 1.8 shall be deemed to have been paid in full satisfaction of all
rights pertaining to the shares of Western Beef Common Stock formerly
represented by such certificates.
(d) Termination of Exchange Fund. Any portion of the Exchange Fund
(including any interest and other income received by the Exchange Agent in
respect of all such funds) which
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remains undistributed to the holders of the certificates formerly
representing shares of Western Beef Common Stock for six months after the
Effective Time shall be delivered to the Surviving Corporation, upon demand, and
any holders of shares of Western Beef Common Stock prior to the Merger who have
not theretofore complied with this Section 1.8 shall thereafter look only to the
Surviving Corporation, and only as general creditors thereof, for payment of
their claim for Merger Consideration to which such holders may be entitled.
(e) No Liability. No party to this Agreement shall be liable to any
Person (as hereinafter defined) in respect of any amount from the Exchange Fund
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law. The term "Person" means any individual, corporation,
partnership, trust or unincorporated organization or a government or any agency
or political subdivision thereof.
(f) Lost Certificates. In the event any certificate or certificates
formerly representing shares of Western Beef Common Stock shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the Person
claiming such certificate or certificates to be lost, stolen or destroyed, and
if required by the Surviving Corporation, the posting by such Person of a bond
in such amount as the Surviving Corporation may reasonably require as indemnity
against any claim that may be made against it with respect to such certificate,
the Exchange Agent will issue in exchange for such lost, stolen or destroyed
certificate the Merger Consideration deliverable in respect thereof as
determined in accordance with this Section 1.8.
(g) Withholding Rights. The Surviving Corporation and the Exchange
Agent shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of shares of Western Beef
Common Stock such amounts as the Surviving Corporation or the Exchange Agent is
required to deduct and withhold with respect to the making of such payment under
the United States Internal Revenue Code of 1986, as amended (the "Code"), or any
provision of state, local or foreign tax law applicable to the making of such
payment. To the extent that amounts are so withheld by the Surviving Corporation
or the Exchange Agent, such withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the holder of the shares of Western
Beef Common Stock in respect of which such deduction and withholding was made by
the Surviving Corporation or the Exchange Agent.
Section 1.9. Proxy Statement and Schedule 13E-3.
(a) Western Beef shall prepare, in consultation with Cactus, the
Proxy Statement on Schedule 14A (the "Proxy Statement") to be distributed to
holders of the Western Beef Common Stock for the purpose of soliciting proxies
for use at the annual or special meeting of stockholders of Western Beef at
which the adoption of this Agreement and the approval of the transactions
contemplated thereby shall be sought. In the Proxy Statement, subject to the
fiduciary duties of its Board of Directors, Western Beef shall recommend to its
stockholders the approval of the Merger, this Agreement and the transactions
contemplated hereby. Western Beef shall file the Proxy Statement with the
Securities and Exchange Commission (the "SEC") as soon as is reasonably
practicable after the date hereof and shall use all reasonable efforts to
respond to comments from the SEC and to cause the Proxy Statement to be mailed
to Western Beef's stockholders at the earliest practicable time.
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(b) None of the information to be supplied by Western Beef for
inclusion in the Proxy Statement will, at the time of the mailing of the Proxy
Statement and any amendments or supplements thereto, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The Proxy Statement
will, as of its date, comply as to form in all material respects with all
applicable laws, including the provisions of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the rules and regulations promulgated
thereunder. Western Beef will not mail, amend or supplement the Proxy Statement
unless the Proxy Statement or any amendment or supplement thereof is
satisfactory in content to Cactus in the exercise of its reasonable judgment.
(c) As soon as practicable after the date of this Agreement,
Cactus, its stockholders and Western Beef shall file with the SEC a Rule 13e-3
Transaction Statement on Schedule 13E-3 (the "Schedule 13E-3 Transaction
Statement"), with respect to the Merger. Each of the parties hereto agrees to
use its reasonable best efforts to cooperate and to provide each other with such
information as any of such parties may reasonably request in connection with the
preparation of the Proxy Statement and the Schedule 13E-3 Transaction Statement.
Each party hereto agrees promptly to supplement, update and correct any
information provided by it for use in the Proxy Statement and the Schedule 13E-3
Transaction Statement if and to the extent that such information is or shall
have become incomplete, false or misleading.
Section 1.10. Additional Agreements and Provisions. Upon the terms
and subject to the conditions of this Agreement, each of the parties hereto
agrees to use its reasonable best efforts (a) to cause its respective conditions
set forth in Article V of this Agreement to be fulfilled and (b) to take, or
cause to be taken, all additional action and to do, or cause to be done, all
additional things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement. If at any time after the Effective Time, any further action is
necessary or desirable to carry out the purposes of this Agreement or to vest
the Surviving Corporation with full title to all properties, assets, rights,
approvals, immunities and franchises of either Western Beef or Cactus, the
proper officers and directors of each corporation that is a party to this
Agreement shall take all such necessary action. The parties hereto agree to use
their respective best efforts to challenge any action brought seeking a
temporary restraining order or preliminary or permanent injunctive relief which
would prohibit, or materially interfere with, the consummation of the
transactions contemplated by this Agreement.
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ARTICLE II.
Representations and Warranties of Western Beef
Western Beef hereby represents and warrants to Cactus as follows:
Section 2.1. Organization of Western Beef and its Subsidiaries.
Western Beef and each of its Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization and has all the requisite corporate power and authority to carry on
its business as now being conducted and to own, lease, use and operate the
properties owned and used by it. Western Beef and each of its Subsidiaries is
qualified and in good standing to do business in each jurisdiction in which the
nature of its business requires it to be so qualified, except to the extent the
failure to be so qualified has not had, and would not reasonably be expected to
have, a Material Adverse Effect. The term "Material Adverse Effect" means a
material adverse effect on the business, assets, liabilities, results of
operations or financial condition of Western Beef and its Subsidiaries, taken as
a whole.
Section 2.2. Capitalization of Western Beef; Ownership. The
authorized capital stock of Western Beef consists of 15,000,000 shares of
Western Beef Common Stock, of which 5,475,153 shares are issued and outstanding
as of the date hereof. All of the issued and outstanding shares of capital stock
of Western Beef are duly authorized, validly issued, fully paid and
non-assessable and free of preemptive rights. Except for outstanding Western
Beef Stock Options to purchase an aggregate of no more than 109,763 shares of
Western Beef Common Stock, there are no outstanding options, warrants or other
rights of any kind to acquire (including preemptive rights) any additional
shares of capital stock of Western Beef or securities convertible into or
exchangeable for, or which otherwise confer on the holder thereof any right to
acquire, any such additional shares, nor is Western Beef committed to issue any
such option, warrant, right or security. Following the Merger, Western Beef will
have no obligation to issue, transfer or sell any shares of its capital stock or
other securities of Western Beef pursuant to any employee benefit plan or
otherwise.
Section 2.3. Subsidiaries of Western Beef. All outstanding shares of
capital stock or other equity interests of each Subsidiary are owned by Western
Beef, free and clear of any and all liens, claims, security interests or
options, except for restrictions on transfer under federal and state securities
laws. All shares of capital stock of each Subsidiary which is a corporation have
been validly issued and are fully paid and non-assessable. There are no
outstanding options, warrants or other rights of any kind to acquire (including
preemptive rights) any additional equity interests of any Subsidiary or
securities convertible into or exchangeable for, or which otherwise confer on
the holder thereof any right to acquire, any additional equity interests of any
Subsidiary, nor is any Subsidiary committed to issue any such option, warrant,
right or security. Other than the Subsidiaries referred to in this Section 2.3,
Western Beef does not own, directly or indirectly, any equity interest in any
other corporation, joint venture, partnership, limited liability company or
other entity.
Section 2.4. Authorization. Western Beef has all requisite corporate
power and authority to enter into this Agreement and, subject to any necessary
approval of the Merger by the
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stockholders of Western Beef, to carry out its obligations hereunder
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all requisite corporate action on the part
of Western Beef (other than the approval of this Agreement and the transactions
contemplated hereby by the stockholders of Western Beef). The Board of Directors
of Western Beef has adopted resolutions approving this Agreement and the Merger,
and has determined that the terms of the Merger are fair to, and in the best
interests of, Western Beef's stockholders other than Cactus and/or its
stockholders (the "Public Stockholders"). Western Beef has taken all action
necessary to exempt the Merger and the other transactions contemplated hereby
with Cactus and its affiliates from the operation of Section 203 of the DGCL.
This Agreement has been duly executed and delivered by Western Beef and,
assuming the due authorization, execution and delivery hereof by Cactus,
constitutes the valid and binding obligation of Western Beef, enforceable
against Western Beef in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally or by general equitable principles.
Section 2.5. Fairness Opinion and Approval by the Special Committee.
On or prior to the date hereof, the Special Committee recommended that the Board
of Directors of Western Beef approve and authorize this Agreement and declare
its advisability. The Special Committee has received an opinion of Xxxxxxxx
Xxxxx Xxxxxx & Xxxxx to the effect that the consideration to be received by the
Public Stockholders in the Merger is fair to such stockholders from a financial
point of view.
Section 2.6. Brokers and Finders. Other than Xxxxxxxx Xxxxxx Xxxxxx
& Xxxxx, neither Western Beef nor any Subsidiary has employed any broker,
finder, advisor or intermediary in connection with the transactions contemplated
by this Agreement which would be entitled to a broker's, finder's or similar fee
or commission in connection therewith or upon the consummation thereof. Any such
fees due to Xxxxxxxx Xxxxxx Xxxxxx & Xxxxx shall be paid by Western Beef.
Section 2.7. SEC Documents; Undisclosed Liabilities. Western Beef
has filed all required reports, schedules, forms, statements and other documents
with the Securities and Exchange Commission (the "SEC") since January 1, 1998
(the "SEC Documents"). As of their respective dates, the SEC Documents complied
in all material respects with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as the case may be, and the rules and regulations
of the SEC promulgated thereunder applicable to such SEC Documents. Except to
the extent that information contained in any SEC Document has been revised or
superseded by a later filed SEC Document, none of the SEC Documents contains any
untrue statement of a material fact or omits 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. The
financial statements of Western Beef included in the SEC Documents comply as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with GAAP (except, in the case of unaudited statements,
as permitted by applicable instructions or regulations of the SEC relating to
the preparation of quarterly reports on Form 10-Q) applied on a consistent basis
during the period involved (except as may be indicated in the notes thereto) and
fairly present the
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financial position of Western Beef as of the dates thereof and the results of
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).
Section 2.8. Absence of Certain Changes or Events. Except as
disclosed in the SEC Documents filed and publicly available prior to the date of
this Agreement, since the date of the most recent audited financial statements
included in the filed SEC Documents, Western Beef has conducted its business
only in the ordinary course, and there has not been any material adverse change
in the business or financial condition of Western Beef and its Subsidiaries
taken as a whole.
ARTICLE III.
Representations and Warranties of Cactus
Section 3.1. Organization and Authority of Cactus. Cactus is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware. Cactus was incorporated solely for the purpose of
merging with and into Western Beef and since its incorporation, it has conducted
no business of any kind whatsoever.
Section 3.2. Capitalization of Cactus. The authorized capital stock
of Cactus consists of 10,000 shares of Cactus Common Stock, of which 100 shares
are issued and outstanding as of the date hereof. All of the issued and
outstanding shares of capital stock of Cactus are duly authorized, validly
issued, fully paid and non-assessable and free of preemptive rights.
Section 3.3. Authorization. Cactus has all corporate power and
authority to enter into this Agreement and to perform its obligations hereunder
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all requisite corporate action on the part
of Cactus. This Agreement has been duly executed and delivered by Cactus and,
assuming the due authorization, execution and delivery hereof by Western Beef,
constitutes the valid and binding obligation of Cactus, enforceable against
Cactus in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, or similar laws
affecting creditors' rights generally or by general equitable principles.
Section 3.4. Brokers and Intermediaries. Cactus has not employed any
broker, finder, advisor or intermediary in connection with the transactions
contemplated by this Agreement which would be entitled to a broker's, finder's,
or similar fee or commission in connection therewith or upon the consummation
thereof.
Section 3.5. Proxy Statement. None of the information to be supplied
by Cactus or its stockholders for inclusion in the Proxy Statement will, at the
time of the mailing of the Proxy Statement and any amendments or supplements
thereto, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading.
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Section 3.6. Financing. Cactus has received a letter (the
"Commitment Letter") from North Fork Bank committing to provide to Cactus, upon
the terms and subject to the conditions therein, up to $8.5 million in financing
in connection with the Merger. Cactus has furnished a copy of the Commitment
Letter to the Special Committee and its advisers.
Section 3.7. Sale of Western Beef. Neither Cactus nor any of its
affiliates has any agreement, understanding or any present intention to sell
Western Beef or any material part of Western Beef.
ARTICLE IV.
Certain Covenants and Agreements
Section 4.1. Announcement. Neither Western Beef nor Cactus shall
issue any press release or otherwise make any public statement with respect to
this Agreement and the transactions contemplated hereby without the prior
consent of the other (which consent shall not be unreasonably withheld), except
as may be required by applicable law or stock exchange regulation.
Notwithstanding anything in this Section 4.1 to the contrary, Cactus and Western
Beef will, to the extent practicable, consult with each other before issuing,
and provide each other the opportunity to review and comment upon, any such
press release or other public statement with respect to this Agreement and the
transactions contemplated hereby whether or not required by law.
Section 4.2. Notification of Certain Matters. Western Beef shall
give prompt notice to Cactus, and Cactus shall give prompt notice to Western
Beef, of (a) the occurrence or non-occurrence of any event the occurrence or
non-occurrence of which would be likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material respect
at or prior to the Effective Time and (b) any material failure of Western Beef,
or Cactus, as the case may be, to comply with or satisfy any covenant, condition
or agreement to be complied with or satisfied by it hereunder; provided,
however, that the delivery of any notice pursuant to this Section 4.2 shall not
limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
Section 4.3. Directors' And Officers' Indemnification.
(a) The Certificate of Incorporation and the By-laws of the
Surviving Corporation shall contain the provisions with respect to
indemnification and limitation of liability of directors and officers set forth
in Western Beef's Certificate of Incorporation and By-laws on the date of this
Agreement, which provisions shall not be amended, repealed or otherwise modified
for a period of six years from the Effective Time in any manner that would
adversely affect the rights thereunder of individuals who on or prior to the
Effective Time were directors or officers of Western Beef, unless such
modification is required by law.
(b) The Surviving Corporation shall maintain in effect for six
years from the Effective Time policies of directors' and officers' liability
insurance containing terms and conditions which are not less advantageous to the
insured than any such policies of Western Beef currently in effect
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on the date of this Agreement (the "Western Beef Insurance Policies"),
with respect to matters occurring prior to the Effective Time, to the extent
available, and having the maximum available coverage under any such Western Beef
Insurance Policies; provided, that in no event shall the Surviving Corporation
be required to pay annual premiums for insurance under this Section 4.3(b) in
excess of 125% of the annual premiums currently paid by Western Beef and
provided further, however, that if the annual premiums for such insurance
coverage exceed 125% of the annual premiums currently paid by Western Beef, the
Surviving Corporation shall be obligated to obtain a policy with the greatest
coverage that can be obtained for premiums that are 125% of the annual premiums
currently paid by Western Beef.
Section 4.4. Stockholders Meeting. Western Beef agrees to seek and
solicit the requisite vote of stockholders at the Stockholders Meeting for the
adoption and approval of this Agreement and the transactions contemplated
hereby. Cactus agrees to vote all shares of Western Beef Common Stock owned by
it, and to cause its stockholders to vote any and all shares of Western Beef
Common Stock that they may be entitled to vote, at the Stockholders Meeting in
favor of the adoption and approval of this Agreement and the transactions
contemplated hereby.
ARTICLE V.
Conditions Precedent
Section 5.1. Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger shall be
subject to the satisfaction on or prior to the Closing Date of each of the
following conditions (any of which may be waived by the parties hereto in
writing, in whole or in part, to the extent permitted by applicable law):
(a) No Injunction or Proceeding. No preliminary or permanent
injunction, temporary restraining order or other decree of a court, legislature
or other agency or instrumentality of federal, state or local government (a
"Governmental Entity") shall be in effect, no statute, rule or regulation shall
have been enacted by a Governmental Entity and no action, suit or proceeding by
any Governmental Entity shall have been instituted or threatened, which
prohibits the consummation of the Merger or materially challenges the
transactions contemplated hereby.
(b) Consents. Other than filing the Certificate of Merger, all
consents, approvals and authorizations of and filings with Governmental Entities
required for the consummation of the transactions contemplated hereby, shall
have been obtained or effected or filed.
(c) Approval of Holders of Western Beef Common Stock. This
Agreement and the Merger shall have been adopted by the affirmative vote or
written consent of a majority of the shares of Western Beef Common Stock
outstanding.
Section 5.2. Conditions to the Obligation of Western Beef to Effect
the Merger. The obligation of Western Beef to effect the Merger is further
subject to the satisfaction or waiver of each of the following conditions prior
to or at the Closing Date:
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(a) Representations and Warranties. The representations and
warranties of Cactus contained in this Agreement shall be true and correct in
all material respects at and as of the Effective Time as though made at and as
of the Effective Time and Western Beef shall have received a certificate of the
President of Cactus to that effect.
(b) Agreements. Cactus shall have performed and complied in all
material respects with all its undertakings and agreements required by this
Agreement to be performed or complied with by it prior to or at the Closing
Date.
Section 5.3. Conditions to the Obligation of Cactus to Effect the
Merger. The obligation of Cactus to effect the Merger is further subject to the
satisfaction or waiver of each of the following conditions prior to or at the
Closing Date:
(a) Representations and Warranties. The representations and
warranties of Western Beef contained in this Agreement shall be true and correct
in all material respects at and as of the Effective Time as though made at and
as of the Effective Time and Cactus shall have received a certificate of the
President and Chief Executive Officer of Western Beef to that effect.
(b) Agreements. Western Beef shall have performed and complied in
all material respects with all of its undertakings and agreements required by
this Agreement to be performed or complied with by it prior to or at the Closing
Date.
(c) No Material Adverse Change. Except as set forth in the Western
Beef SEC Reports filed on or prior to the date of this Agreement, since December
31, 1998 there shall have been no material adverse change in the business,
assets, liabilities, results of operations or financial condition of Western
Beef and its Subsidiaries, taken as a whole.
(d) Availability of Funds. Cactus shall have funds available to it
at the Closing sufficient to pay the aggregate Merger Consideration, pursuant to
the Commitment Letter or any other commitment acceptable to Cactus.
(e) Appraisal Rights. The holders of not more than 5% of the issued
and outstanding shares of Western Beef Common Stock shall have exercised their
rights to dissent from the Merger in accordance with Section 262 of the DGCL and
pursuant to Section 1.6 of this Agreement.
ARTICLE VI.
Termination, Amendment and Waiver
Section 6.1. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, whether before
or after stockholder approval thereof:
(a) by the mutual written consent of Cactus and Western Beef;
(b) by either Cactus or Western Beef, in each case by written
notice to the other, if:
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(i) the Merger has not been consummated on or prior to
December 31, 1999; provided, however, that the right to terminate this
Agreement under this Section 6.1(b)(i) shall not be available to any
party whose failure to fulfill any obligation under this Agreement has
been the cause of, or resulted in, the failure of the Merger to occur
on or prior to such date; or
(ii) the Special Committee shall have withdrawn, or
modified or changed in any manner adverse to Cactus its approval of
this Agreement or the Merger after having concluded in good faith after
consultation with independent legal counsel that there is a reasonable
probability that the failure to take such action would result in a
violation of its fiduciary obligations under applicable law.
Section 6.2. Effect of Termination. In the event of the termination
of this Agreement as provided in Section 6.1, this Agreement shall become null
and void, and there shall be no liability on the part of Cactus or Western Beef
(except as set forth in Section 7.2 hereof, which shall survive any termination
of this Agreement); provided that nothing herein shall relieve any party from
any liability or obligation with respect to any breach of this Agreement.
Section 6.3. Amendment. This Agreement may be amended in writing by
the parties hereto.
Section 6.4. Waiver. At any time prior to the Effective Time,
whether before or after the approval of the holders of Western Beef Common Stock
referred to in Section 5.1(c) hereof, either party may (i) extend the time for
the performance of any of the obligations or other acts of the other party
hereto or (ii) waive compliance with any of the agreements of the other party or
fulfillment of any conditions to its own obligations hereunder. Any agreement on
the part of a party hereto to any such extension or waiver shall be valid only
if set forth in an instrument in writing signed on behalf of such party by a
duly authorized officer.
ARTICLE VII.
Miscellaneous
Section 7.1. Non-Survival of Representations and Warranties. None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time, and
neither Cactus, Western Beef or any Subsidiary, nor any of their respective
officers, directors, employees, advisors or stockholders shall have any
liability whatsoever with respect to any such representation or warranty after
such time. This Section 7.1 shall not limit any covenant or agreement of the
parties which by its terms contemplates performance after the Effective Time.
Section 7.2. Expenses. Except as contemplated by this Agreement, all
costs and expenses incurred in connection with the Agreement and the
consummation of the transactions contemplated hereby shall be the obligation of
the party incurring such expenses. All costs and expenses incurred by Cactus in
connection with the Agreement and the consummation of the
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transactions contemplated hereby shall, after the Effective Time, be
obligations of the Surviving Corporation.
Section 7.3. Applicable Law. This Agreement shall be governed by the
law, excluding conflicts of law rules, of the State of Delaware.
Section 7.4. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given or made as
follows: (a) if sent by registered or certified mail in the United States return
receipt requested, upon receipt; (b) if sent by reputable overnight air courier,
two business days after being so sent; (c) if sent by telecopy transmission,
with a copy mailed on the same day in the manner provided in clauses (a) or (b)
above, when transmitted and receipt is confirmed by telephone; or (d) if
otherwise actually personally delivered, when delivered, and shall be sent or
delivered as follows:
If to Western Beef, to:
Xxxxx X. Xxxxxxxx
Controller and Secretary
Western Beef, Inc.
00-00 Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
(000) 000-0000 (facsimile)
with a copy to:
Xxxxxxx X. Xxxxxxxx, Esq.
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
(000) 000-0000 (facsimile)
If to Cactus, to:
Xxxxx Xxxxxxxxxx, Xx.
President
Cactus Acquisition, Inc.
00-00 Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
(000) 000-0000 (facsimile)
with a copy to:
Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxxxx, Xxxxxx & Golieb
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000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
(000) 000-0000 (facsimile)
Such names and addresses may be changed by such notice.
Section 7.5. Entire Agreement. This Agreement (including the
documents and instruments referred to herein) contains the entire understanding
of the parties hereto with respect to the subject matter contained herein, and
supersedes and cancels all prior agreements, negotiations, correspondence,
undertakings and communications of the parties, oral or written, respecting such
subject matter.
Section 7.6. Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any either party
hereto (whether by operation of law or otherwise) without the prior written
consent of the other party.
Section 7.7. Headings; References. The article, section and
paragraph headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.
Section 7.8. Counterparts. This Agreement may be executed in one or
more counterparts, each counterpart shall be deemed to be an original but all of
which shall be considered one and the same agreement.
Section 7.9. No Third Party Beneficiaries. Except as provided in
Sections 1.8 and 4.3, nothing in this Agreement, express or implied, is intended
to confer upon any Person not a party to this Agreement any rights or remedies
under or by reason of this Agreement.
Section 7.10. Severability; Enforcement. Any term or provision of
this Agreement that is invalid or unenforceable in any jurisdiction shall, as to
that jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or unenforceability
of any of the terms or provisions of this Agreement in any other jurisdiction.
If any provision of this Agreement is so broad as to be unenforceable, the
provisions shall be interpreted to be only so broad as is enforceable.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
WESTERN BEEF, INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Controller and Secretary
CACTUS ACQUISITION, INC.
By: /s/ Xxxxx Xxxxxxxxxx, Xx.
---------------------------------
Name: Xxxxx Xxxxxxxxxx, Xx.
Title: President
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