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EXHIBIT 2
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AGREEMENT AND PLAN OF MERGER
AMONG
BUFFETS, INC.,
BIG BOY HOLDINGS, INC.,
AND
BIG BOY MERGER CORPORATION
DATED AS OF JUNE 4, 2000
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TABLE OF CONTENTS
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Page
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ARTICLE I THE MERGER.............................................................................................1
1.01 Merger...............................................................................................1
1.02 Effective Time of the Merger.........................................................................1
1.03 Articles of Incorporation and By-Laws of the Surviving Corporation...................................2
1.04 Board of Directors and Officers of the Surviving Corporation.........................................2
1.05 Conversion of Shares.................................................................................2
1.06 Dissenters' Rights...................................................................................3
1.07 Stock Options........................................................................................3
1.08 Payment for Shares...................................................................................4
1.09 No Further Rights or Transfers.......................................................................5
1.10 Tender Offer.........................................................................................5
ARTICLE II CLOSING...............................................................................................6
2.01 Generally............................................................................................6
2.02 Deliveries at the Closing............................................................................6
ARTICLE III REPRESENTATIONS AND WARRANTIES.......................................................................6
3.01 Representations and Warranties of the Company........................................................6
3.02 Representations and Warranties of Buyer and Buyer Subsidiary........................................21
ARTICLE IV CONDUCT AND TRANSACTIONS BEFORE THE EFFECTIVE TIME...................................................24
4.01 Operation of Business of the Company Until Effective Time...........................................24
4.02 Shareholders' Meeting; Proxy Material...............................................................26
4.03 No Shopping.........................................................................................26
4.04 Access to Information...............................................................................27
4.05 Amendment of the Company's Employee Plans...........................................................27
4.06 HSR Act.............................................................................................27
4.07 Certain Resignations................................................................................28
4.08 Confidentiality Agreement...........................................................................28
4.09 Options.............................................................................................28
4.10 Amendment to Rights Agreement.......................................................................28
4.11 Additional Agreements: Reasonable Efforts..........................................................28
4.12 Substitute Financing................................................................................28
ARTICLE V CONDITIONS PRECEDENT..................................................................................29
5.01 Conditions to the Obligations of Buyer and Buyer Subsidiary.........................................29
5.02 Conditions to the Obligations of the Company........................................................30
ARTICLE VI CONDUCT AND TRANSACTIONS AFTER THE EFFECTIVE TIME....................................................31
6.01 Employee Matters.......................................................................................31
6.02 Indemnification........................................................................................32
6.03 Directors and Officers Liability Insurance.............................................................32
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ARTICLE VII TERMINATION AND ABANDONMENT.........................................................................33
7.01 Generally...........................................................................................33
7.02 Procedure and Effect of Termination and Abandonment.................................................34
ARTICLE VIII MISCELLANEOUS PROVISIONS...........................................................................34
8.01 Termination of Representations and Warranties of the Company........................................34
8.02 Amendment and Modification..........................................................................34
8.03 Waiver of Compliance; Consents......................................................................35
8.04 Expenses and Termination Fee........................................................................35
8.05 Press Releases and Public Announcements.............................................................37
8.06 Additional Agreements...............................................................................37
8.07 Notices.............................................................................................37
8.08 Assignment..........................................................................................38
8.09 Interpretation......................................................................................38
8.10 Governing Law.......................................................................................39
8.11 Counterparts........................................................................................39
8.12 Headings; Internal References.......................................................................39
8.13 Entire Agreement....................................................................................39
8.14 Severability........................................................................................39
8.15 Disclosure Letter...................................................................................39
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger is dated as of June 4, 2000, among
Buffets, Inc., a Minnesota corporation (the "Company"), Big Boy Holdings, Inc.,
a Delaware corporation ("Buyer"), and Big Boy Merger Corporation, a Minnesota
corporation and a wholly owned subsidiary of Buyer ("Buyer Subsidiary" and,
together with the Company, sometimes referred to as the "Constituent
Corporations").
RECITALS
Buyer desires to acquire the Company by effecting a merger (the
"Merger") of Buyer Subsidiary with and into the Company under the terms hereof,
whereby the shareholders of the Company will receive cash for their shares of
capital stock of the Company.
The Board of Directors of each of the Constituent Corporations deems
the Merger desirable and in the best interests of the shareholders of the
Constituent Corporation.
AGREEMENT
Now, therefore, in consideration of the premises and of the mutual
covenants, representations, warranties, and agreements herein contained, the
parties hereby agree as follows:
ARTICLE I
THE MERGER
1.01 MERGER. At the Effective Time (as defined in Section 1.02), and in
accordance with the terms of this Agreement and the Minnesota Business
Corporation Act (the "Minnesota Act"), Buyer Subsidiary shall be merged with and
into the Company, the separate corporate existence of Buyer Subsidiary shall
thereupon cease, and the Company shall be the surviving corporation in the
Merger (sometimes referred to as the "Surviving Corporation"). At the Effective
Time, the Merger shall have the other effects provided in the applicable
provisions of the Minnesota Act.
1.02 EFFECTIVE TIME OF THE MERGER. Subject to, and promptly following
(but not more than one business day (unless the Company and Buyer shall
otherwise mutually agree)), the receipt of the vote of the shareholders of the
Company approving this Agreement and the satisfaction or waiver of all other
conditions to the consummation of the Merger set forth in Article V of this
Agreement, the Company and Buyer Subsidiary shall execute in the manner required
by the Minnesota Act and deliver for filing to the Secretary of State of the
State of Minnesota articles of merger with respect to the Merger ("Articles of
Merger"). The Merger shall become effective upon the filing of the Articles of
Merger with the Minnesota Secretary of State in accordance with Section 302A.615
of the Minnesota Act. The term "Effective Time" means the date and time when the
Merger becomes effective.
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1.03 ARTICLES OF INCORPORATION AND BY-LAWS OF THE SURVIVING
CORPORATION. The Articles of Incorporation of Buyer Subsidiary in effect
immediately before the Effective Time shall be the Articles of Incorporation of
the Surviving Corporation, until amended in accordance with the laws of the
State of Minnesota and such Articles of Incorporation. The By-Laws of Buyer
Subsidiary in effect immediately before the Effective Time shall be the By-Laws
of the Surviving Corporation, until further amended in accordance with the laws
of the State of Minnesota, the Articles of Incorporation of the Surviving
Corporation, and such By-Laws.
1.04 BOARD OF DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. The
directors of Buyer Subsidiary immediately before the Effective Time shall be the
directors of the Surviving Corporation, each of such directors to hold office,
subject to the applicable provisions of the Articles of Incorporation and
By-Laws of the Surviving Corporation, until the expiration of the term for which
such director was elected and until his or her successor is elected and has
qualified or as otherwise provided in the Articles of Incorporation or By-Laws
of the Surviving Corporation. The officers of the Company immediately before the
Effective Time shall be the officers of the Surviving Corporation until their
respective successors are chosen and have qualified or as otherwise provided in
the By-Laws of the Surviving Corporation.
1.05 CONVERSION OF SHARES. The manner and basis of converting the
shares of stock of each of the Constituent Corporations shall be as follows:
(a) At the Effective Time, each share of Common Stock of the
Company, par value $.01 per share ("Company Common Stock"), issued and
outstanding immediately before the Effective Time (other than (i)
Dissenting Shares (as defined below) and (ii) shares of Company Common
Stock held of record by Buyer or Buyer Subsidiary or any other direct
or indirect wholly owned subsidiary of Buyer or the Company immediately
before the Effective Time) shall, by virtue of the Merger and without
any action on the part of the holder thereof, be converted into and
represent the right to receive $13.85 in cash (the "Merger
Consideration"), without interest.
(b) At the Effective Time, each share of Common Stock of Buyer
Subsidiary, par value $.01 per share, issued and outstanding
immediately before the Effective Time shall, by virtue of the Merger
and without any action on the part of the holder thereof, be converted
into and exchanged for one fully paid and nonassessable share of Common
Stock of the Surviving Corporation ("Surviving Corporation Common
Stock"), which shall constitute the only issued and outstanding shares
of capital stock of the Surviving Corporation immediately after the
Effective Time. From and after the Effective Time, each outstanding
certificate theretofore representing shares of Common Stock of Buyer
Subsidiary shall be deemed for all purposes to evidence ownership and
to represent the same number of shares of Surviving Corporation Common
Stock.
(c) At the Effective Time, each share of Company Common Stock
held of record by Buyer or Buyer Subsidiary or any other direct or
indirect wholly owned subsidiary of Buyer or the Company immediately
before the Effective Time shall, by
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virtue of the Merger and without any action on the part of the holder
thereof, be canceled and cease to exist, and no payment shall be made
with respect thereto.
1.06 DISSENTERS' RIGHTS.
(a) Notwithstanding Section 1.05 hereof, shares of Company
Common Stock issued and outstanding immediately before the Effective
Time, if any, that are held of record or beneficially owned by a person
who has properly exercised and preserved and perfected dissenters'
rights with respect to such shares under Sections 302A.471 and 302A.473
of the Minnesota Act and has not withdrawn or lost such rights
("Dissenting Shares") shall not be converted into or represent the
right to receive the Merger Consideration for such shares, but instead
shall be treated in accordance with Sections 302A.471 and 302A.473 of
the Minnesota Act unless and until such person effectively withdraws or
loses such person's right to payment under Section 302A.473 of the
Minnesota Act (through failure to preserve or protect such right or
otherwise). If, after the Effective Time, any such person shall
effectively withdraw or lose such right, then each such Dissenting
Share held of record or beneficially owned by such person will
thereupon be treated as if it had been converted into, at the Effective
Time, the right to receive the Merger Consideration, without interest.
(b) Each person holding of record or beneficially owning
Dissenting Shares who becomes entitled, under the provisions of
Sections 302A.471 and 302A.473 of the Minnesota Act, to payment of the
fair value of such Dissenting Shares shall receive payment therefor
(plus interest determined in accordance with Section 302A.473 of the
Minnesota Act) from the Surviving Corporation.
(c) The Company shall give Buyer prompt written notice upon
receipt by the Company at any time before the Effective Time of any
notice of intent to demand the fair value of any shares of Company
Common Stock under Section 302A.473 of the Minnesota Act and any
withdrawal of any such notice. The Company will not, except with the
prior written consent of Buyer, negotiate, voluntarily make any payment
with respect to, or settle or offer to settle, any such demand at any
time before the Effective Time.
1.07 STOCK OPTIONS. Immediately before the Effective Time, each holder
of a then-outstanding option (collectively, the "Options" and individually, an
"Option") to purchase shares of Company Common Stock granted under any employee
stock option or compensation plan of, or other arrangement with, the Company
shall be entitled (whether or not such Option is then exercisable) to receive in
cancellation of such Option a cash payment from the Company in an amount equal
to the amount, if any, by which the Merger Consideration exceeds the per-share
exercise price of such Option, multiplied by the number of shares of Company
Common Stock then subject to such Option (the "Option Settlement Amount"),
without interest, but subject to all required tax withholdings by the Company.
The Company shall take all steps necessary including giving such notices and
entering into such instruments consistent with the foregoing to give effect to
this Section 1.07.
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1.08 PAYMENT FOR SHARES.
(a) Immediately before the Effective Time, Buyer or Buyer
Subsidiary shall deposit or cause to be deposited in immediately
available funds with American Stock Transfer Company or any other
disbursing agent having capital, surplus and undivided profits
exceeding $500 million that is selected by Buyer and reasonably
satisfactory to the Company (the "Disbursing Agent"), cash in an amount
equal to the product (rounded up or down to the nearest $.01) of (i)
the number of shares of Company Common Stock issued and outstanding
immediately before the Effective Time (other than (i) Dissenting Shares
and (ii) shares then held of record by Buyer or Buyer Subsidiary or any
other direct or indirect wholly owned subsidiary of Buyer or the
Company) times (ii) the Merger Consideration (such amount being
referred to as the "Fund").
(b) At or before the Effective Time, Buyer shall deliver
irrevocable written instructions to the Disbursing Agent in form and
substance reasonably satisfactory to the Company to make, out of the
Fund, the payments referred to in Section 1.05(a) in accordance with
Section 1.08(c). The Fund shall not be used for any other purpose,
except as provided in this Agreement.
Any amount remaining in the Fund including, without
limitation, all interest and other income received by the Disbursing
Agent in respect of amounts in the Fund six months after the Closing
Date (as defined below) may be refunded to the Surviving Corporation,
at its option; PROVIDED, HOWEVER, that the Surviving Corporation shall
continue to be liable for any payments required to be made thereafter
under Section 1.05(a) hereof. If any Merger Consideration shall not
have been disbursed prior to two years after the Effective Time (or
immediately prior to such earlier date on which any Merger
Consideration or Option Settlement Amount payable to the former holder
of Company Common Stock or Option would otherwise escheat to or become
the property of any governmental authority), any such Merger
Consideration or Option Settlement Amount shall, to the extent
permitted by applicable law, become the property of the Surviving
Corporation, free and clear of all claims or interest of any person
previously entitled thereto.
(c) As soon as practicable after the Effective Time, the
Disbursing Agent shall mail to each holder of record (other than Buyer
or Buyer Subsidiary or any other direct or indirect wholly owned
subsidiary of Buyer or the Company) of a certificate or certificates
that, immediately before the Effective Time, represented issued and
outstanding shares of Company Common Stock (other than Dissenting
Shares) a letter of transmittal for return to the Disbursing Agent, and
instructions for use in effecting the surrender of such certificate or
certificates and the receipt of cash for each of such holder's shares
of Company Common Stock under Section 1.05(a). The Disbursing Agent, as
soon as practicable following receipt of any such certificate or
certificates together with a duly executed letter of transmittal and
any other items specified in the letter of transmittal, shall pay by
cashier's check of the Disbursing Agent to the persons entitled thereto
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(subject to any required withholding of taxes by the Surviving
Corporation) the amount (rounded up or down to the nearest $.01)
determined by multiplying the number of shares of Company Common Stock
represented by the certificate or certificates so surrendered by the
Merger Consideration. No interest will be paid or accrued on the cash
payable upon the surrender of any such certificate or certificates. If
payment is to be made to a person other than the person in whose name
the certificate surrendered is registered, it shall be a condition of
payment that the certificate so surrendered be properly endorsed or
otherwise be in proper form for transfer and that the person requesting
such payment pay any transfer or other taxes required by reason of the
payment to a person other than the registered holder of the certificate
surrendered or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not applicable.
(d) If any such certificate or certificates shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact
and customary indemnification against loss by the person claiming such
certificate or certificates to have been lost, stolen or destroyed, the
Disbursing Agent will pay in exchange for such lost, stolen or
destroyed certificate to the persons entitled thereto (subject to any
required withholding of taxes by the Surviving Corporation) the
applicable Merger Consideration in respect thereof calculated pursuant
to Section 1.08(c) upon receipt by the Disbursing Agent of such
affidavit and indemnification against loss.
1.09 NO FURTHER RIGHTS OR TRANSFERS. At the Effective Time, all shares
of Company Common Stock issued and outstanding immediately before the Effective
Time shall be canceled and cease to exist, and each holder of a certificate or
certificates that represented shares of Company Common Stock issued and
outstanding immediately before the Effective Time shall cease to have any rights
as a shareholder of the Company with respect to the shares of Company Common
Stock represented by such certificate or certificates, except for the right to
surrender such certificate or certificates in exchange for the payment provided
under Section 1.05(a) or to preserve and perfect such holder's right to receive
payment for such holder's shares under Section 302A.473 of the Minnesota Act and
Section 1.06 hereof if such holder has validly exercised and not withdrawn or
lost such right, and no transfer of shares of Company Common Stock issued and
outstanding immediately before the Effective Time shall be made on the stock
transfer books of the Surviving Corporation.
1.10 TENDER OFFER. Notwithstanding anything to the contrary in this
Agreement, Buyer shall have the right to commence a cash tender offer to
purchase all the outstanding shares of Common Stock (with at least a majority of
the fully-diluted shares of Common Stock as a minimum condition, which cannot be
waived without the written consent of the Company) at a price equal to or in
excess of what would have been the Merger Consideration. The only conditions to
acceptance of the shares shall be such conditions as are set forth in Section
5.01 and the minimum condition, unless the Company in its sole discretion shall
agree to other conditions. Notwithstanding Buyer's exercise of its right to
commence such an offer, this Agreement shall remain in full force and effect.
Any shares of Common Stock not purchased in such offer shall, as promptly as
possible, be acquired on the terms set forth in this Agreement, provided that if
Buyer acquires, directly or indirectly, at least 90% of the outstanding shares
pursuant to the offer,
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Buyer will take all necessary and appropriate action to cause the Merger to
become effective in accordance with Section 302A.621 of the Minnesota Act
without a meeting of the shareholders as soon as practicable after the purchase
of the shares pursuant to such offer.
ARTICLE II
CLOSING
2.01 GENERALLY. Subject to Articles V and VII, the closing (the
"Closing") of the Merger shall occur not later than the business day next
following the special meeting of shareholders of the Company to be called under
Section 4.02, or at such other time as the Company and Buyer may mutually agree
(the "Closing Date"). The Closing shall be held at the offices of Paul, Weiss,
Rifkind, Wharton & Garrison in New York, New York, or at such other place as the
Company and Buyer may mutually agree.
2.02 DELIVERIES AT THE CLOSING. Subject to Articles V and VII, at the
Closing:
(a) there shall be delivered to Buyer, Buyer Subsidiary and
the Company the certificates and other documents and instruments the
delivery of which is contemplated under Article V;
(b) the Company and Buyer Subsidiary shall cause the Articles
of Merger to be filed as provided in Section 1.02 and shall take all
other lawful actions and do all other lawful things necessary to cause
the Merger to become effective; and
(c) subject to the right of the Surviving Corporation to
receive a refund of amounts remaining in the Fund six months after the
Closing Date under Section 1.08(b), Buyer or Buyer Subsidiary shall
irrevocably deposit with the Disbursing Agent the amount designated as
the Fund in Section 1.08(a).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to Buyer and Buyer Subsidiary as follows:
(a) ORGANIZATION, STANDING, QUALIFICATION. Each of the Company
and the corporations listed in Section 3.01(a) of the Disclosure Letter
delivered by the Company to Buyer on June 4, 2000 (the "Disclosure
Letter") under the heading "Subsidiaries" (collectively, the
"Subsidiaries" and individually, a "Subsidiary") is a corporation duly
incorporated, validly existing and in good standing under the laws of
the jurisdiction of its incorporation (as identified in the Disclosure
Letter) and has the requisite corporate power and corporate authority
to own, lease and operate its properties and assets and to carry on its
business as it is now being conducted. The Company has no subsidiaries
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other than the Subsidiaries. Each of the Company and its Subsidiaries
is duly qualified or licensed as a foreign corporation to do business,
and is in good standing, in each jurisdiction where the character of
the properties owned, operated or leased by it, or the nature of its
business, makes such qualification or licensing necessary, except such
jurisdictions where failure to be so qualified, licensed or in good
standing would not have, individually or in the aggregate, a material
adverse effect upon the business, operations, properties or financial
condition of the Company and its Subsidiaries, taken as a whole (a
"Material Adverse Effect"). The copies of the Articles or Certificate
of Incorporation and By-Laws or similar organizational documents of the
Company and each Subsidiary provided to Buyer are complete and correct
as of the date of this Agreement.
(b) CAPITALIZATION. The authorized capital stock of the
Company consists of 60 million shares of Company Common Stock, of
which, as of the date of this Agreement, 41,577,129 shares are issued
and outstanding, and five million shares of Preferred Stock, par value
$.01 per share, of which 600,000 shares have been designated as Series
A Junior Participating Preferred Stock ("Series A Preferred Stock"),
none of which, as of the date of this Agreement, is issued and
outstanding. All of the issued and outstanding shares of capital stock
of the Company and of each Subsidiary have been duly authorized and
validly issued, are fully paid and nonassessable and were not granted
in violation of any preemptive rights. There are no outstanding
subscriptions, options, warrants, calls or other agreements or
commitments under which the Company or any Subsidiary is or may become
obligated to issue, sell, transfer or otherwise dispose of, or
purchase, redeem or otherwise acquire, any shares of capital stock of,
or other equity interests in, the Company or any Subsidiary, and there
are no outstanding securities convertible into or exchangeable for any
such capital stock or other equity interests, except for (i) Options to
purchase up to 5,440,897 shares of Company Common Stock (as of the date
of this Agreement) at the exercise prices set forth in Section 3.01(b)
of the Disclosure Letter, (ii) the Rights Agreement dated as of October
24, 1995 between the Company and American Stock Transfer and Trust
Company (the "Rights Agreement") under which each outstanding share of
Company Common Stock has attached to it certain rights (the "Rights"),
including rights under certain circumstances to purchase a fraction of
a share of Series A Preferred Stock at $65 per right, subject to
adjustment, and (iii) the Company's 7% Convertible Subordinated Notes
due 2002 (the "Convertible Notes") in aggregate principal amount of
$41,465,000 as of the date of this Agreement. At the Effective Time,
the Options referred to in clause (i) will be cancelled in accordance
with Section 1.07, the Rights Agreement will not be applicable to the
Merger and the other transactions contemplated by this Agreement and
the holders of the Rights will have no rights under the Rights or the
Rights Agreement and the Convertible Notes will be convertible solely
into the right to receive approximately $1,187.143 in cash for each
$1,000 principal amount converted thereunder. The Company owns,
directly or indirectly, all of the issued and outstanding shares of
capital stock of every class of each Subsidiary, free and clear of all
liens, security interests, pledges, charges and other encumbrances.
Section 3.01(b) of the Disclosure Letter contains a complete and
correct list of each corporation, limited liability company,
partnership, joint venture, other
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business association or person in which the Company has any direct or
indirect equity ownership interest.
(c) AUTHORIZATION AND EXECUTION. The Company has the corporate
power and corporate authority to execute and deliver this Agreement
and, subject to approval by the holders of the Company Common Stock at
the special meeting of shareholders referred to in Section 4.02, to
consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by the Company have been
duly authorized by the Board of Directors of the Company, and no
further corporate action of the Company, other than the approval of its
shareholders, is necessary to consummate the transactions contemplated
hereby. This Agreement has been duly executed and delivered by the
Company and, assuming the accuracy of the representations and
warranties set forth in Section 3.02(b), constitutes the legal, valid
and binding obligation of the Company, enforceable against the Company
in accordance with its terms, except to the extent that enforceability
may be limited by applicable bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally, and subject,
as to enforceability, to general principles of equity (regardless of
whether enforcement is sought in a court of law or equity).
(d) NO CONFLICTS. Neither the execution and delivery of this
Agreement by the Company nor the consummation by the Company of the
transactions contemplated hereby, will (i) conflict with or result in a
breach of the Articles or Certificate of Incorporation, By-Laws or
similar organizational documents, as currently in effect, of the
Company or any of its Subsidiaries, (ii) except for the requirements
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), compliance with the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the filing of the Articles
of Merger with the Secretary of State of the State of Minnesota,
require any filing with, or consent or approval of, any governmental
authority having jurisdiction over any of the business or assets of the
Company or any of its Subsidiaries, (iii) violate any statute, law,
ordinance, rule or regulation applicable to the Company or any of its
Subsidiaries or any injunction, judgment, order, writ or decree to
which the Company or any of its Subsidiaries has been specifically
identified as subject, or (iv) result in a breach of, or constitute a
default or an event that, with the passage of time or the giving of
notice, or both, would constitute a default, give rise to a right of
termination, cancellation or acceleration, create any entitlement of
any third party to any material payment or benefit, require the consent
of any third party, or result in the creation of any lien on the assets
of the Company or any of its Subsidiaries under, any Material Contract
(as defined below), except, in the case of clauses (ii), (iii), and
(iv), where such violation, breach, default, termination, cancellation,
acceleration, payment, benefit or lien, or the failure to make such
filing or obtain such consent or approval, would not, individually or
in the aggregate, materially impair the ability of the Company to
consummate the transactions contemplated by this Agreement or have a
Material Adverse Effect.
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(e) SEC REPORTS; FINANCIAL STATEMENTS; NO UNDISCLOSED
LIABILITIES.
(i) The Company has made available to Buyer, in the
form filed with the Securities and Exchange Commission (the
"SEC"), all reports, registration statements, and other
filings (including amendments to previously filed documents)
filed by the Company with the SEC since January 1, 1997 (all
such reports, proxy statements, registration statements and
filings, other than the Proxy Statement (as defined below),
are collectively called the "SEC Reports" and individually
called an "SEC Report"). No SEC Report, as of its filing date,
contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not
misleading, and each SEC Report at the time of its filing
complied as to form in all material respects with all
applicable requirements of the Securities Act of 1933, as
amended (the "Securities Act"), the Exchange Act, and the
rules and regulations of the SEC promulgated thereunder. Since
January 1, 1997, the Company has filed all reports that it was
required to file with the SEC under the Exchange Act and the
rules and regulations of the SEC.
(ii) The consolidated financial statements contained
in the SEC Reports were prepared in accordance with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved (except as may be indicated in
the notes thereto) and fairly present, in all material
respects, the consolidated financial position of the Company
and its Subsidiaries as at the respective dates thereof and
the consolidated results of operations and consolidated cash
flows of the Company and its Subsidiaries for the periods
indicated, subject, in the case of interim financial
statements, to normal year-end adjustments, and except that
the interim financial statements do not contain all of the
footnote disclosures required by generally accepted accounting
principles.
(iii) Except as and to the extent reflected or
reserved against on the most recent balance sheet contained in
the Company's Annual Report on Form 10-K for the fiscal year
ended December 29, 1999 (the "Balance Sheet"), neither the
Company nor any of its Subsidiaries had, as of the date of
such Balance Sheet, any material obligations or liabilities of
any nature that as of such date would have been required to be
included on a balance sheet prepared in accordance with
generally accepted accounting principles as in effect on such
date (without regard to any events, incidents, assertions or
state of knowledge occurring after such date).
(f) PROXY STATEMENT. The Proxy Statement will not, at the time
the Proxy Statement is mailed, 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 were made, not misleading, and
will not, at the time of the meeting of shareholders to which the Proxy
Statement relates
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or at the Effective Time, as then amended or supplemented, omit to
state any material fact necessary to correct any statement which has
become false or misleading in any earlier communication with respect to
the solicitation of any proxy for such meeting (except that no
representation is made by the Company with respect to statements made
in, or incorporated by reference into, the Proxy Statement based on
information furnished by Buyer or Buyer Subsidiary in writing
specifically for inclusion in the Proxy Statement).
(g) ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of
the Balance Sheet and to and including the date of this Agreement, the
Company and its Subsidiaries have conducted their respective businesses
and operations in the ordinary course consistent with past practices
and neither the Company nor any of its Subsidiaries has (i) split,
combined or reclassified any shares of its capital stock or made any
other changes in its equity capital structure; (ii) purchased, redeemed
or otherwise acquired, directly or indirectly, any shares of its
capital stock or any options, rights or warrants to purchase any such
capital stock or any securities convertible into or exchangeable for
any such capital stock; (iii) declared, set aside or paid any dividend
or made any other distribution in respect of shares of its capital
stock, except for dividends or distributions by any Subsidiary to the
Company or another Subsidiary; (iv) issued any shares of its capital
stock or granted any options, rights or warrants to purchase any such
capital stock or any securities convertible into or exchangeable for
any such capital stock, except for issuances of shares of Company
Common Stock upon the exercise of Options and grants of Options for
308,000 shares of Company Common Stock; (v) purchased any business,
purchased any stock of any corporation, or merged or consolidated with
any person; (vi) sold, leased or otherwise disposed of any assets or
properties which were material to the Company and its Subsidiaries,
taken as a whole, other than dispositions in the ordinary course of
business; (vii) incurred, assumed or guaranteed any indebtedness for
money borrowed other than intercompany indebtedness; (viii) changed or
modified in any material respect any existing accounting method,
principle or practice, other than as required by reason of a concurrent
change in generally accepted accounting principles; (ix) amended any
terms of any of its outstanding securities, including, without
limitation, the rights under the indenture governing the Company's 7%
Convertible Subordinated Notes due 2002; (x) created or assumed any
Lien (as defined below) on any material asset other than in the
ordinary course of business consistent with past practices; (xi) except
in the ordinary course of business consistent with past practice, (A)
granted any severance or termination pay to any director, executive
officer or key employee, (B) entered into any employment, deferred
compensation or other similar agreement (or any amendment to any such
existing agreement) with any director, executive officer or key
employee, (C) increased benefits payable under any existing severance
or termination pay policies or employment agreements with any director,
executive officer or key employee, or (D) increased compensation, bonus
or other benefits payable to directors, executives, officers or key
employees; (xii) cancelled any material debts or claims or waived any
material rights; (xiii) amended its charter or by-laws; (xiv) made any
loans, advances or capital contributions to, or other investments in,
any other person, other than to any direct or indirect wholly-owned
Subsidiary; (xv) experienced a material adverse change with respect to
a material supplier relationship; (xvi) made any material revaluation
of any of
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its significant assets; (xvii) except for this Agreement, entered into
any commitment to do any of the foregoing; or (xviii) suffered any
business interruption, damage to or destruction of its properties or
other incident, occurrence or event which interruption, damage,
destruction, incident, occurrence or event has had or would reasonably
be expected to have (after giving effect to insurance coverage) a
Material Adverse Effect. "LIEN" means, with respect to any asset or
right, any mortgage, deed of trust, lien (statutory or other), pledge,
hypothecation, assignment, claim, charge, security interest,
conditional sale agreement, title, exception, or encumbrance, option,
right of first offer or refusal, easement, servitude, transfer
restriction, or any other right of another to or adverse claim of any
kind in respect of such asset or right, including, without limitation,
under any stockholder agreement.
(h) TAX MATTERS.
(i) The Company and its Subsidiaries have timely
filed (or received appropriate extensions of time to file) all
material federal, state, local and foreign tax returns
(collectively, "Tax Returns") required to be filed by them
with respect to income, gross receipts, withholding, social
security, unemployment, payroll, franchise, property, excise,
sales, use and other taxes of whatever kind (collectively,
"Taxes"), and have paid on a timely basis all Taxes required
to be paid, including, without limitation, those shown on such
Tax Returns to the extent such Taxes have become due.
(ii) No Tax Returns filed by the Company or any of
its Subsidiaries are the subject of pending audits as of the
date of this Agreement. Neither the Company nor any of its
Subsidiaries has received, before the date of this Agreement,
a notice of deficiency or assessment of additional Taxes which
notice or assessment remains unresolved. Neither the Company
nor any of its Subsidiaries has extended the period for
assessment or payment of any Tax, which has not since expired.
(iii) The Company and its Subsidiaries have withheld
and paid over to the appropriate governmental authorities all
Taxes required by law to have been withheld and paid in
connection with amounts paid or owing to any employee, except
for any such Taxes that are immaterial in amount and except
for self-reported employee tips.
(iv) Neither the Company nor any of its Subsidiaries
has been a member of an affiliated group (as such term is
defined in Section 1504 of the Internal Revenue Code of 1986,
as amended (the "Code")) filing a consolidated federal income
tax return for any tax year since January 1, 1992 other than a
group the common parent of which was the Company.
(v) Neither the Company nor any of its Subsidiaries
has filed a consent under Code Section 341(f) concerning
collapsible corporations.
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(vi) Neither the Company nor any of its Subsidiaries
has been a United States real property holding corporation
within the meaning of Code Section 897(c)(2) during the
applicable period specified in Code Section 897(c)(1)(A)(ii).
(vii) Neither the Company nor any of its Subsidiaries
is a party to any Tax allocation or sharing agreement other
than between the Company and the Subsidiaries.
(viii) The Company has delivered or made available to
the Buyer true and complete copies of all requested federal,
state, local and foreign income tax returns with respect to
the Company and each of its Subsidiaries.
(ix) There is no contract, agreement, plan or
arrangement covering any employee or former employee of the
Company or any of its Subsidiaries that, individually or
collectively, could give rise to the payment of any amount
that would not be deductible under Section 280G of the Code.
(i) REAL AND PERSONAL PROPERTY.
(i) OWNED PROPERTY; PERSONALTY. Section 3.01(i)(i) of
the Disclosure Letter sets forth a list of all real property owned in
fee by the Company or any Subsidiary. One or more of the Company and
its Subsidiaries has good and marketable title to all such real
property (including all buildings, fixtures and other improvements
thereto, the "Owned Real Property"), free and clear of all mortgages,
liens, security interests, charges and encumbrances, except (i) liens
for taxes, assessments and other governmental charges that are not due
and payable or that are being contested in good faith and in respect of
which adequate reserves have been established, (ii) mechanics',
materialmen's, carriers', workmen's, warehousemen's, repairmen's,
landlord's or other similar liens securing obligations that are not due
and payable or that are being contested in good faith and in respect of
adequate reserves have been established, (iii) mortgages, liens,
security interests, charges and encumbrances evidenced by any lease,
contract or agreement that is described in the Disclosure Letter or in
the SEC Reports filed before the date of this Agreement or the
non-disclosure of which therein does not constitute a misrepresentation
under Section 3.01(j), (iv) imperfections of title and liens, charges
and encumbrances that do not materially detract from the value or
materially interfere with the present use of the properties subject
thereto or affected thereby, (v) in the case of any Owned Real Property
subject to a title commitment described in the Disclosure Letter,
imperfections of title and mortgages, liens, security interests,
charges and encumbrances that are shown on such title commitment or are
otherwise of record, and (vi) other mortgages, liens, security
interests, charges and encumbrances described in the Disclosure Letter
or in the SEC Reports filed before the date of this Agreement (clauses
(i) through (iv) and clause (vi) being collectively the "Permitted
Encumbrances"). The Company and its Subsidiaries have good and
marketable title to, or the right to use, all of their other tangible
properties
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<PAGE>
and assets necessary to conduct their respective businesses as
currently conducted, except for Permitted Encumbrances and other Liens
of an immaterial nature. All of the Real Property (as hereinafter
defined) and other tangible properties and assets are in good condition
and repair, normal wear and tear excepted, and adequate in all material
respects for the continued conduct of the business of the Company and
its Subsidiaries in the manner in which it is currently conducted. The
Company is not a guarantor of the tenant's obligations under the leases
for the seven store sites indicated with an asterisk in Section
3.01(i)(i) of the Disclosure Letter.
(ii) LEASED REAL PROPERTY. Section 3.01(i)(ii) of the
Disclosure Letter sets forth a list of all leases, subleases and other
agreements (collectively, the "Real Property Leases") under which the
Company or any Subsidiary uses or occupies or has the right to use or
occupy, now or in the future, any real property that is not Owned Real
Property (the land, buildings and other improvements covered by the
Real Property Leases being herein called the "Leased Real Property").
The Company has provided the Buyer with a true and correct copy of each
Real Property Lease and any amendments thereto. Each Real Property
Lease is valid, binding and in full force and effect, unless the
failure of any Real Property Lease to be in full force and effect has
not had and would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect. Neither the Company nor
any of its Subsidiaries nor, to the knowledge of the Company, any
landlord under any Real Property Leases is in breach of or in default
under any of the Real Property Leases, except for breaches or defaults
which have not had and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. Except for
Permitted Encumbrances, the Company's and its Subsidiaries' interest in
the Leased Real Property is free and clear of Liens. A Subsidiary of
the Company, but not the Company, is the tenant under all of the Real
Property Leases.
(iii) ENTIRE PREMISES. All of the land, buildings,
structures and other improvements used by the Company or any of the
Subsidiaries in the conduct of their businesses are included in the
Owned Real Property or the Leased Real Property. The Leased Real
Property and the Owned Real Property are hereinafter collectively
referred to as the "Real Property."
(iv) SPACE LEASES. Section 3.01(i)(iv) of the
Disclosure Letter contains a true, correct and complete schedule of all
leases, subleases and other agreements (collectively, the "Space
Leases") granting to any person or entity other than the Company or any
of the Subsidiaries any right to the possession, use, occupancy or
enjoyment of the Real Property or any portion thereof. The Company has
provided the Buyer with a true and correct copy of each Space Lease. To
the Company's knowledge, no notice of default or termination under any
Space Lease is outstanding and no termination event or condition or
uncured default on the part of the Company, any of the Subsidiaries or
the Space Tenant exists under any Space Lease, except for those
defaults or terminations which have not had and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect.
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<PAGE>
(v) CONDEMNATION. The Company and the Subsidiaries
have not received notice of, and to the knowledge of the Company, there
is not any pending, threatened or contemplated condemnation proceeding
affecting the Real Property or any part thereof, or any sale or other
disposition of the Real Property or any part thereof in lieu of
condemnation.
(J) MATERIAL CONTRACTS. Except as set forth in Section 3.01(j)
of the Disclosure Letter or in the SEC Reports filed before the date of
this Agreement, and except for contracts entered into after the date
hereof in compliance with Section 4.01, neither the Company nor any of
its Subsidiaries is a party to or bound by any:
(i) employment agreement (other than those that are
terminable by the Company or any Subsidiary without cost or
penalty upon 60 days' or less notice);
(ii) operating or capital lease, whether as lessor or
lessee, with respect to any real property;
(iii) contract, whether as licensor or licensee, for
the license of any patent, know-how, trademark, trade name,
service mark, copyright or other intangible asset (other than
non-negotiated licenses of commercial off-the-shelf computer
software);
(iv) loan or guaranty agreement, indenture or other
instrument, contract or agreement under which any money has
been borrowed or loaned or any note, bond or other evidence of
indebtedness has been issued;
(v) mortgage, security agreement, conditional sales
contract, capital lease or similar agreement which effectively
creates a lien on any assets of the Company or any of its
Subsidiaries;
(vi) contract restricting the Company or any of its
Subsidiaries in any material respect from engaging in business
or from competing with any other parties;
(vii) plan of reorganization;
(viii) partnership or joint venture agreement;
(ix) collective bargaining agreement;
(x) that is a "material contract" (as defined in Item
601(b)(10) of Regulation S-K of the SEC);
(xi) franchise, restaurant services management,
royalty or similar agreement;
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(xii) agreements relating to the acquisition of any
business (but excluding any acquisition of restaurant
locations consistent with past practices);
(xiii) investment banking agreement; or
(xiv) except for negotiable instruments in the
process of collection, any power of attorney outstanding or
any contract, commitment or liability (whether absolute,
accrued, contingent or otherwise) as guarantor, surety,
cosigner, endorser, co-maker, indemnitor in respect of the
contract or commitment of any other person, corporation,
partnership, joint venture, association, organization or other
entity (other than the Subsidiaries).
All of the foregoing are collectively called
"Material Contracts." To the extent Material Contracts are evidenced by
documents, true and complete copies thereof have been delivered or made
available to Buyer. Each Material Contract is in full force and effect,
unless the failure of any Material Contracts to be in full force and
effect has not had and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. Neither
the Company nor any of its Subsidiaries nor, to the knowledge of the
Company, any other party is in breach of or in default under any of the
Material Contracts, except for breaches or defaults which have not had
and would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
(k) INTELLECTUAL PROPERTY. Section 3.01(k) of the Disclosure
Letter contains a complete and correct list of all United States and
foreign material patents and registered trademarks, trade names,
service marks, Internet Domain names and copyrights, and all
applications for any of the foregoing (collectively, "Proprietary
Rights"), and all material licenses held by the Company and its
Subsidiaries. Except as set forth in Section 3.01(k) of the Disclosure
Letter, the Proprietary Rights constitute all the intellectual property
rights that are required or reasonably necessary for the conduct of the
business of the Company or its Subsidiaries as currently conducted.
Except as set forth in Section 3.01(k) of the Disclosure Letter, the
Company owns or otherwise possesses legally enforceable rights to use,
sell and license, free and clear of any and all liens or material
restrictions, any and all material intellectual property used in the
conduct of the business of the Company and the Subsidiaries as
currently conducted or proposed to be conducted, and the consummation
of the transactions contemplated hereby will not materially adversely
alter or impair any such right . None of the Proprietary Rights have
been declared unenforceable or otherwise invalid by any court or
governmental agency. There is, to the knowledge of the Company, no
material existing infringement, misuse or misappropriation of any
Proprietary Rights by others. Since January 1, 1997, neither the
Company nor any of its Subsidiaries has received any written notice
alleging that the operation of the business of the Company or any of
its Subsidiaries infringes, misuses or misappropriates in any material
respect the intellectual property rights of others.
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<PAGE>
(l) LITIGATION. Except as described in Section 3.01(l) of the
Disclosure Letter or in the SEC Reports filed at least five (5)
business days before the date of this Agreement, no litigation,
arbitration or administrative proceeding is pending or, to the
knowledge of the Company, threatened against the Company or any
Subsidiary that, would have, individually or in the aggregate, a
Material Adverse Effect, or that seeks to enjoin or otherwise
challenges the consummation of the transactions contemplated by this
Agreement. Neither the Company nor any of its Subsidiaries is
specifically identified as a party subject to any material restrictions
or limitations under any injunction, writ, judgment, order or decree of
any court, administrative agency or commission or other governmental
authority.
(m) COMPLIANCE WITH LAWS. The Company and each of the
Subsidiaries is and at all times since January 1, 1997 has been in
compliance with and, to the knowledge of the Company, is not under
investigation with respect to and has not been threatened in writing to
be charged with or given written notice of any violation of, any
statute, law, rule, regulation, judgment, decree, order, permit,
license or other governmental authorization or approval applicable to
the Company or any of the Subsidiaries or by which any property, asset
or operation of the Company or any of the Subsidiaries is bound or
effected, except for failures to comply or violations (A) that have not
had, or cannot reasonably be expected to have individually or in the
aggregate, a Material Adverse Effect or (B) that have not resulted in,
or could not reasonably be expected to result in, the imposition of a
criminal fine, penalty or sanction against the Company, any of the
Subsidiaries or any of their respective officers or directors.
(n) NO BROKERS OR FINDERS. Except for U.S. Bancorp Piper
Jaffray Inc., the Company has not engaged any investment banker, broker
or finder in connection with the transactions contemplated hereby. The
Surviving Corporation shall be liable for all obligations of the
Company under its engagement letter with U.S. Bancorp Piper Jaffray
Inc., a copy of which has previously been provided to Buyer.
(o) RETIREMENT AND BENEFIT PLANS.
(i) Each employee pension benefit plan ("Pension Plan"), as
defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), each employee welfare benefit plan
("Welfare Plan"), as defined in Section 3 of ERISA, and each deferred
compensation, bonus, incentive, stock incentive, option, stock
purchase, severance or other material employee benefit plan, agreement,
commitment or arrangement ("Benefit Plan"), which is currently
maintained by the Company or any Subsidiary or to which the Company or
any Subsidiary currently contributes or is under any current obligation
to contribute, or under which the Company or any Subsidiary has any
current liability (collectively, the "Employee Plans" and individually,
an "Employee Plan") is listed in Section 3.01(o) of the Disclosure
Letter and, true and complete copies of all written plans have been
delivered or made available to Buyer. In addition, summaries of all
oral agreements, copies of the annual report (Form 5500 Series)
required to be filed with any governmental agency with respect to
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<PAGE>
each Pension Plan and Welfare Plan for the most recent plan year of
such plan for which reports have been filed, the most recent IRS
determination letters, if relevant, and summary plan descriptions have
been delivered or made available to Buyer.
(ii) The Company and each Subsidiary has made on a timely
basis all contributions or payments required to be made by it under the
terms of the Employee Plans, ERISA, the Code or other applicable laws,
unless such contributions or payments that have not been made are
immaterial in amount and the failure to make such payments or
contributions will not materially and adversely affect the Employee
Plans.
(iii) Each Employee Plan (and any related trust or other
funding instrument) has been administered in all material respects in
compliance with its terms and in both form and operation is in
compliance in all material respects with the applicable provisions of
ERISA, the Code and other applicable laws and regulations (other than
adoption of any plan amendments for which the deadline has not yet
expired), and all material reports required to be filed with any
governmental agency with respect to each Employee Plan have been timely
filed.
(iv) Each Employee Plan that is intended to be qualified
within the meaning of Code section 401(a) is so qualified and has
received a favorable determination letter from the IRS as to its
qualification, and nothing has occurred, whether by action or failure
to act, that could reasonably be expected to cause the loss of such
qualification.
(v) Except as set forth in Section 3.01(o)(v) of the
Disclosure Letter, no Employee Plan exists that could result in the
payment to any present or former employee of the Company or any
Subsidiary of any money or other property or accelerate or provide any
other rights or benefits to any present or former employee of the
Company or its Subsidiaries as a result of the transaction contemplated
by this Agreement, whether or not such payment would constitute a
parachute payment within the meaning of Code section 280G.
(vi) Except as set forth in Section 3.01(o)(vi) of the
Disclosure Letter, none of the Company or the Subsidiaries has or will
have any obligation or liability under a Welfare Plan which provides
medical or dental benefits with respect to current or former employees
of the Company beyond their termination of employment other than
required by COBRA or other applicable laws, and all Welfare Plans are
in compliance with the requirements of COBRA, to the extent applicable.
(vii) There has been no "mass layoff" or "plant closing" as
each such term is defined by the Workers Adjustment and Retraining
Notification Act ("WARN"), with respect to the employees of the Company
or any of its Subsidiaries, with respect to which there could be any
future liability to such employees under WARN.
(viii) There is no material litigation, arbitration or
administrative proceeding pending or, to the knowledge of the Company,
threatened against the Company or any
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Subsidiary or, to the knowledge of the Company, any plan fiduciary by
the Internal Revenue Service, the U.S. Department of Labor, the Pension
Benefit Guaranty Corporation, any participant or beneficiary, or any
other governmental agency, with respect to any Employee Plan. None of
the Company, any Subsidiary, any ERISA affiliate, or to the knowledge
of the Company, any plan fiduciary of any Pension or Welfare Plan has
engaged in any transaction in violation of Section 406(a) or (b) of
ERISA for which no exemption exists under Section 408 of ERISA or any
"prohibited transaction" (as defined in Section 4975(c)(1) of the Code)
for which no exemption exists under Section 4975(c)(2) or 4975(d) of
the Code, or is subject to any excise tax imposed by the Code or ERISA
with respect to any Employee Plan.
(v) Neither the Company nor any Subsidiary nor any ERISA
Affiliate (as defined below) currently maintains, nor at any time in
the previous six calendar years maintained or had an obligation to
contribute to, any defined benefit pension plan subject to Title IV of
ERISA, or any "multiemployer plan" as defined in Section 3(37) of
ERISA.
(vi) Neither the Company nor any Subsidiary has any liability
with respect to any plan, program or arrangement maintained or
contributed to by any ERISA Affiliate that would be an Employee Plan if
it were maintained by the Company.
(vii) For purposes of this Section 3.01(o), "ERISA Affiliate"
means (A) any trade or business with which the Company is under common
control within the meaning of Section 4001(b) of ERISA, (B) any
corporation with which the Company is a member of a controlled group of
corporations within the meaning of Section 414(b) of the Code, (C) any
entity with which the Company is under common control within the
meaning of Section 414(c) of the Code, (D) any entity with which the
Company is a member of an affiliated service group within the meaning
of Section 414(m) of the Code, and (E) any entity with which the
Company is aggregated under Section 414(o) of the Code.
(p) ENVIRONMENTAL MATTERS.
(i) For purposes of this Section 3.01(p),
(a) "Environmental Law" means the Comprehensive
Environmental Response, Compensation and Liability Act, 42
U.S.C. Section 9601 et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901 et seq., the Federal
Water Pollution Control Act, 33 U.S.C. Section 1201 et seq.,
the Clean Water Act, 33 U.S.C. Section 1321 et seq., the
Clean Air Act, 42 U.S.C. Section 7401 et seq., and any other
federal, state, local or other governmental statute,
regulation, law or ordinance dealing with the protection of
human health, natural resources or the environment; and
(b) "Hazardous Substance" means any pollutant,
contaminant, hazardous substance or waste, solid waste,
petroleum or any fraction thereof,
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or any other chemical, substance or material listed or
identified in or regulated by any Environmental Law.
(ii) Except as described in Section 3.01(p) of the Disclosure
Letter or in the SEC Reports filed before the date of this Agreement:
(a) The Company and each of its Subsidiaries are in
full compliance in all material respects with all applicable
Environmental Laws, including all limitations, restrictions,
conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in all
applicable Environmental Laws.
(b) The Company and each of its Subsidiaries have
obtained, are in material compliance with, and have made all
appropriate filings for issuance or renewal of, all material
permits, licenses, authorizations, registrations and other
governmental consents required by applicable Environmental
Laws ("ENVIRONMENTAL PERMITS"), including, without limitation,
those regulating emissions, discharges or releases of
Hazardous Substances, or the use, storage, treatment,
transportation, release, emission and disposal of raw
materials, by-products, wastes and other substances used or
produced by or otherwise relating to the business of the
Company or any of its Subsidiaries.
(c) Neither the Company nor any Subsidiary has
released any Hazardous Substances onto any real property owned
or leased by the Company or any of its Subsidiaries in such a
manner so as to create any material liability for the Company
or any of its Subsidiaries.
(d) There are no claims, notices, civil, criminal or
administrative actions, suits, hearing investigations,
inquiries or proceedings pending or, to the Knowledge of the
Company, threatened against the Company or any of its
Subsidiaries that are based on or related to the failure to
have any required Environmental Permits.
(e) To the knowledge of the Company, there are no
past or present conditions, events, circumstances, facts,
activities, practices, incidents, actions, omissions or plans
(i) that is reasonably likely to give rise to any material
liability or other material obligation for the Company under
any Environmental Laws or (ii) that is reasonably likely to
form the basis of any claim, action, suit, proceeding,
hearing, investigation or inquiry against or involving the
Company or any of its Subsidiaries resulting in material
liability for the Company or any of its Subsidiaries.
(f) Neither the Company nor any of its Subsidiaries
has received written notice from any governmental agency that
any of them have any material
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liability with respect to the release of any Hazardous
Substances from any underground or aboveground storage tanks.
(g) Neither the Company nor any of its Subsidiaries
has received any written notice that any of them is or may be
a potentially responsible person under the Comprehensive
Environmental Response Compensation and Liability Act, 42
U.S.C. Section. 9601 ET SEQ., or any similar state or local
statute, in connection with any waste disposal site allegedly
containing any Hazardous Substances, or other location used
for the disposal of any Hazardous Substances.
(h) Neither the Company nor any of its Subsidiaries
has received any written notice that it has any material
liability pursuant to any failure of the Company or any of its
Subsidiaries to comply in any material respect with any
Environmental Law or the requirements of any Environmental
Permit.
(i) Neither the Company nor any of its Subsidiaries
has been in material violation of any Environmental Laws, nor
has it been requested or required by any governmental entity
to perform any investigatory or remedial activity or other
action in connection with any actual or alleged release of
Hazardous Substances or any other environmental matter.
(q) INSURANCE. The Disclosure Letter contains a list of all
insurance policies maintained by the Company and its Subsidiaries as of
the date of this Agreement, together with a brief description of the
coverages afforded thereby. All of such insurance policies are in full
force and effect as of the date of this Agreement.
(r) NO UNDISCLOSED LIABILITIES. Except as set forth in Section
3.01(r) of the Disclosure Letter or in the SEC Reports filed prior to
the date hereof, neither the Company nor any Subsidiary has any
liabilities (absolute, accrued, contingent or otherwise) which
individually, or in the aggregate, are reasonably likely to have a
Material Adverse Effect.
(s) LABOR MATTERS. Except as set forth in Section 3.01(s) of
the Disclosure Letter, (i) the Company has no knowledge of any strikes,
slowdowns, work stoppages, lockouts, or threats thereof, by or with
respect to any employees or former employees of the Company or of any
Subsidiary, and (ii) neither the Company nor any Subsidiary is a party
to any collective bargaining agreements and there are no labor unions
or other organizations representing, purporting to represent, or
attempting to represent, any employee of the Company.
(t) OPINION OF FINANCIAL ADVISOR. The Board of Directors of
the Company has received the opinion of U.S. Bancorp Piper Jaffray
Inc., a copy of which has been provided to Buyer, to the effect that,
as of the date of this Agreement, the consideration to be received in
the Merger by the holders of shares of Company Common Stock (other than
Buyer or its affiliates) is fair to such holders from a financial point
of view.
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(u) VOTE REQUIRED. The only vote of the holders of any class
or series of Company capital stock necessary to approve the Merger is
the affirmative vote of the holders of not less than a majority of the
votes entitled to be cast by the holders of all of the outstanding
shares of Company Common Stock.
(v) STATE TAKEOVER STATUTES. The Company has taken all actions
necessary under the Minnesota Act to approve the transactions
contemplated by this Agreement. The Agreement and the Merger have been
approved by a committee of the Board of Directors of the Company formed
pursuant to Section 302A.673(d) of the Minnesota Act. Assuming for
purposes of this Section 3.01(v) that no person or entity associated or
affiliated with Buyer is an "interested shareholder" (as such term is
defined in the Minnesota Act) 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 Minnesota Act
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 Minnesota Act 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 do not, and the consummation of the transactions contemplated
hereunder do not, and any formation of a "group" for purposes of
Section 13(d)(3) of the Exchange Act in connection with this Agreement
will not, result in a "control share acquisition" as defined in Section
302A.011 of the Minnesota Act. 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.
(w) AFFILIATE TRANSACTIONS. Except to the extent disclosed in
any SEC Report, there are no other transactions, agreements,
arrangements or understandings between the Company or any Subsidiary,
on the one hand, and the Company's affiliates (other than wholly-owned
Subsidiaries of the Company) or other persons, on the other hand, that
would be required to be disclosed under Item 404 of Regulation S-K
under the Securities Act of 1933, as amended. For purposes of this
Agreement, the term "affiliate," when used with respect to any person,
means any other person directly or indirectly controlling, controlled
by, or under common control with such person. As used in the definition
of "affiliate," the term "control" means possession, directly or
indirectly, of the power to direct or cause the direction of the
management or policies of a person, whether through the ownership of
voting securities, by contract or otherwise.
3.02 REPRESENTATIONS AND WARRANTIES OF BUYER AND BUYER SUBSIDIARY.
Buyer and Buyer Subsidiary jointly and severally represent and warrant to the
Company as follows:
(a) ORGANIZATION, STANDING, EQUITY OWNERSHIP. Each of Buyer
and Buyer Subsidiary is a corporation duly incorporated, validly
existing and in good standing under the laws of its state of
incorporation. Buyer owns all of the issued and outstanding capital
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stock of Buyer Subsidiary. The copies of the Articles or Certificate of
Incorporation and By-Laws of Buyer and Buyer Subsidiary provided to the
Company are complete and correct as of the date of this Agreement.
Buyer Subsidiary was formed solely for the purpose of effecting the
Merger and has not engaged in any business activities or conducted any
operations other than in connection with the Merger and the financing
thereof.
(b) AUTHORIZATION AND EXECUTION. Each of Buyer and Buyer
Subsidiary has the corporate power and corporate authority to execute
and deliver this Agreement and consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement by
each of Buyer and Buyer Subsidiary have been duly authorized by the
respective Boards of Directors of Buyer and Buyer Subsidiary and by
Buyer as the sole shareholder of Buyer Subsidiary, and no further
corporate action of Buyer or Buyer Subsidiary is necessary to
consummate the transactions contemplated hereby. This Agreement has
been duly executed and delivered by each of Buyer and Buyer Subsidiary
and, assuming the accuracy of the representations and warranties set
forth in Section 3.01(c), constitutes the legal, valid and binding
obligation of each of Buyer and Buyer Subsidiary, enforceable against
Buyer and Buyer Subsidiary in accordance with its terms, except to the
extent that enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting the enforcement of creditors'
rights generally, and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
court of law or equity).
(c) NO CONFLICTS. Neither the execution and delivery of this
Agreement by Buyer and Buyer Subsidiary, nor the consummation by Buyer
and Buyer Subsidiary of the transactions contemplated hereby, will (i)
conflict with or result in a breach of the Articles or Certificate of
Incorporation or By-Laws, as currently in effect, of Buyer or Buyer
Subsidiary, (ii) except for the requirements under the HSR Act,
compliance with the Exchange Act, and the filing of the Articles of
Merger with the Secretary of State of the State of Minnesota, require
any filing with, or consent or approval of, any governmental authority
having jurisdiction over any of the business or assets of Buyer or
Buyer Subsidiary, (iii) violate any statute, law, ordinance, rule or
regulation applicable to Buyer or Buyer Subsidiary or any injunction,
judgment, order, writ or decree to which Buyer or Buyer Subsidiary has
been specifically identified as subject, or (iv) result in a breach of,
or constitute a default or an event which, with the passage of time or
the giving of notice, or both, would constitute a default under, or
require the consent of any third party under, any instrument, contract
or agreement to which Buyer or Buyer Subsidiary is a party or by which
Buyer or Buyer Subsidiary is bound, except, in the case of clauses
(ii), (iii) and (iv), where such violation, breach or default, or the
failure to make such filing or obtain such consent or approval, would
not, individually or in the aggregate, materially impair the ability of
Buyer or Buyer Subsidiary to consummate the transactions contemplated
by this Agreement.
(d) PROXY STATEMENT. None of the information furnished or to
be furnished by Buyer or Buyer Subsidiary in writing specifically for
inclusion in the Proxy Statement
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will, at the time the Proxy Statement is mailed, 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 were
made, not misleading, or will, at the time of the meeting of
shareholders to which the Proxy Statement relates or at the Effective
Time, as then amended or supplemented, omit to state any material fact
necessary to correct any statement which has become false or misleading
in any earlier communication with respect to the solicitation of any
proxy for such meeting.
(e) LITIGATION. No litigation, arbitration or administrative
proceeding is pending or, to the knowledge of Buyer or Buyer
Subsidiary, threatened against Buyer or Buyer Subsidiary as of the date
of this Agreement that seeks to enjoin or otherwise challenges the
consummation of the transactions contemplated by this Agreement.
(f) NO BROKERS OR FINDERS. Neither Buyer nor Buyer Subsidiary
has engaged any investment banker, broker or finder in connection with
the transactions contemplated hereby, except for persons and their
affiliates name in clause (g) of this Section 3.02. Buyer shall be
liable for all obligations of Buyer and Buyer Subsidiary to any such
persons.
(g) AVAILABILITY OF FUNDS.
(i) With respect to senior bank financing, Buyer has
delivered to the Company a true and complete copy of a
commitment of Lehman Brothers Commercial Paper, Inc. and Fleet
National Bank (the "Senior Commitment"). The Senior Commitment
is in full force and effect, and neither Buyer nor Buyer
Subsidiary has any reason to expect that the conditions
included in the Senior Commitment will not be satisfied before
the Effective Time.
(ii) With respect to mezzanine financing, Buyer has
delivered to the Company a true and complete copy of a
commitment of Credit Suisse First Boston (the "Mezzanine
Commitment"). The Mezzanine Commitment is in full force and
effect, and neither Buyer nor Buyer Subsidiary has any reason
to expect that the conditions included in the Mezzanine
Commitment will not be satisfied before the Effective Time.
(iii) With respect to equity financing, Buyer has
delivered to the Company a commitment letter of Caxton-Iseman
Capital, Inc. ("Caxton-Iseman Capital"). The Caxton-Iseman
Capital commitment is in full force and effect, and neither
Buyer nor Buyer Subsidiary has any reason to expect that the
conditions included in this commitment will not be satisfied
before the Effective Time.
(iv) Buyer believes that the financing described in
paragraphs (i) through (iii) above is sufficient to enable
Buyer to complete the transactions contemplated by this
Agreement.
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ARTICLE IV
CONDUCT AND TRANSACTIONS BEFORE THE EFFECTIVE TIME
4.01 OPERATION OF BUSINESS OF THE COMPANY UNTIL EFFECTIVE TIME.
(a) From the date hereof to the Effective Time, the Company
will, and will cause each Subsidiary to, exercise reasonable commercial
efforts to preserve intact in all material respects its business
organization, keep available for itself and the Surviving Corporation
the services of its present officers and key employees, and preserve
its present relationships with other persons having significant
business dealings with the Company or any Subsidiary, except as
otherwise consented to in writing by Buyer.
(b) From the date hereof to the Effective Time, the Company
will, and will cause each Subsidiary to, conduct its business and
operations in the ordinary and usual course, except as otherwise
required or permitted by this Agreement or consented to in writing by
Buyer.
(c) Except as otherwise required or permitted by this
Agreement or consented to in writing by Buyer, the Company will not,
from the date hereof until the Effective Time, (i) split, combine or
reclassify any shares of its capital stock or make any other changes in
its equity capital structure; (ii) purchase, redeem or otherwise
acquire, directly or indirectly, any shares of its capital stock or any
options, rights or warrants to purchase any such capital stock or any
securities convertible into or exchangeable for any such capital stock;
(iii) declare, set aside or pay any dividend or make any other
distribution in respect of shares of its capital stock; or (iv) enter
into any commitment to do any of the foregoing.
(d) Except as otherwise required or permitted by this
Agreement or consented to in writing by Buyer, the Company will not,
and will not permit any Subsidiary to, from the date hereof until the
Effective Time,
(i) amend its Articles or Certificate of
Incorporation, By-Laws or similar organizational documents;
(ii) issue any shares of its capital stock or any
options, rights or warrants to purchase any such capital stock
or any securities convertible into or exchangeable for any
such capital stock, except for option grants to employees
consistent with past practices or issuances of shares of
Company Common Stock upon the exercise of any Options or of
any Rights under the Rights Agreement or upon the conversion
of the Company's 7% Convertible Subordinated Notes due 2002,
or designate any class or series of capital stock from its
authorized but undesignated Preferred Stock;
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(iii) purchase any capital assets or make any capital
expenditures (except as set forth in the Company's capital
expenditures budget previously delivered to Buyer), purchase
any business, purchase any stock of any corporation, or merge
or consolidate with any person and in no event enter into any
commitment to purchase or develop any enterprise resource or
management information system (provided, however, that the
Company may continue to fund the exploration of such systems,
such funding not to exceed $500,000);
(iv) sell, lease or otherwise dispose of any assets
or properties that are material to the Company and its
Subsidiaries, taken as a whole, other than dispositions in the
ordinary course of business and other than those consistent
with the Company's existing asset impairment policies, but in
no event shall such dispositions exceed $5 million in the
aggregate;
(v) incur, assume or guarantee any indebtedness for
money borrowed other than intercompany indebtedness;
(vi) enter into any new employee benefit plan,
program or arrangement, or any new employment or severance
agreement, modify in any respect materially adverse to the
Company or any Subsidiary any existing employee benefit plan,
program or arrangement (except as required by law), or any
existing employment or severance agreement, or, except as
required under existing agreements or in the ordinary course
of business, grant any increases in employee compensation or
benefits consistent with past practice, provided, however,
that no additional options, warrants, stock appreciation
rights or similar securities representing interests in the
equity of the Company or any of its Subsidiaries shall be
awarded or granted;
(vii) enter into any collective bargaining agreement,
except as required by law;
(viii) change or modify in any material respect any
existing accounting method, principle or practice, other than
as required by changes in generally accepted accounting
principles after the date hereof;
(ix) enter into any new Material Contract (other than
in the ordinary course of business, including real estate
leases, land purchase agreements, and development agreements),
or modify in any respect materially adverse to the Company or
any Subsidiary any existing Material Contract;
(x) settle the existing securities class action
lawsuit against the Company and certain present and former
directors and officers of the Company, such consent of Buyer
not to be unreasonably withheld; or
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(xi) enter into any commitment to do any of the
foregoing.
4.02 SHAREHOLDERS' MEETING; PROXY MATERIAL.
(a) The Company shall use reasonable best efforts to cause a
special meeting of its shareholders to be duly called and held as soon
as reasonably practicable after the execution of this Agreement for the
purpose of voting on the approval of this Agreement. The Board of
Directors of the Company shall recommend approval of this Agreement by
the shareholders of the Company, unless the Board of Directors of the
Company, after consulting with its legal and financial advisors,
determines that to do so would result in a breach of the fiduciary
duties of the Board of Directors of the Company under applicable law.
(b) The Company (i) as promptly as reasonably practicable
following the execution of this Agreement, shall prepare and file with
the SEC a proxy statement, together with a form of proxy, with respect
to such shareholders meeting (such proxy statement, together with any
amendments thereof or supplements thereto, being called the "Proxy
Statement"), (ii) shall use reasonable best efforts to have the Proxy
Statement cleared by the SEC as soon as reasonably practicable, and
(iii) as soon as reasonably practicable thereafter, shall cause copies
of such Proxy Statement and form of proxy to be mailed to its
shareholders in accordance with the provisions of the Minnesota Act
(unless the Board of Directors of the Company shall determine, in the
good-faith exercise of its fiduciary duties, that such mailing should
not be made). Before the filing of the Proxy Statement and form of
proxy with the SEC, the Company shall provide reasonable opportunity
for Buyer to review and comment upon the contents of the Proxy
Statement and form of proxy. The Proxy Statement and form of proxy
shall comply as to form in all material respects with the applicable
requirements of the Exchange Act and the rules and regulations of the
SEC promulgated thereunder. After the delivery to the Company's
shareholders of copies of the Proxy Statement and form of proxy, the
Company shall use reasonable efforts to solicit proxies in connection
with such shareholders meeting in favor of approval of this Agreement,
unless the Board of Directors of the Company, after receiving a bona
fide unsolicited Third Party Acquisition Offer (as defined below) and
after consulting with its legal and financial advisors, determines that
to do so would result in a breach of the fiduciary duties of the Board
of Directors of the Company under applicable law.
4.03 NO SHOPPING. From the date hereof until the Effective Time, the
Company will not, and will not permit any officer, director, financial adviser
or other agent or representative of the Company, directly or indirectly, to (a)
take any action to seek, initiate or solicit any offer, proposal or indication
of interest from any person or group to acquire any shares of capital stock of
the Company or any Subsidiary, to merge, consolidate or enter into any business
combination with the Company or any Subsidiary, or to otherwise acquire, except
to the extent not prohibited by Section 4.01(d)(iv), any significant portion of
the assets of the Company and its Subsidiaries, taken as whole (a "Third-Party
Acquisition Offer"), or (b) except to the extent the Board of Directors of the
Company shall otherwise determine, after receiving a bona fide unsolicited Third
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Party Acquisition Offer and after consulting with its legal and financial
advisors, that to do otherwise would result in a breach of the fiduciary duties
of the Board of Directors of the Company under applicable law, engage in
negotiations concerning a Third-Party Acquisition Offer with any person or
group, or disclose financial information relating to the Company or any
Subsidiary or any confidential or proprietary trade or business information
relating to the business of the Company or any Subsidiary, or afford access to
the properties, books or records of the Company or any Subsidiary, to any person
or group that the Company has reason to believe may be considering a Third-Party
Acquisition Offer.
The Company will as promptly as reasonably practicable notify Buyer
after receipt of any Third-Party Acquisition Offer or any indication that any
person is considering making a Third-Party Acquisition Offer or any request for
nonpublic information relating to the Company or any of its Subsidiaries or for
access to the properties, books or records of the Company or any of its
Subsidiaries by any person that may be considering making, or has made, a
Third-Party Acquisition Offer or that the Company intends to engage in
negotiations with, or to provide information to any such person. The Company
shall as promptly as reasonably practicable provide Buyer with a reasonable
description of such Third-Party Acquisition Offer and a copy of such Third-Party
Acquisition Offer. The Company shall require that such person enter into a
confidentiality agreement with terms no less favorable to the Company than the
Confidentiality Agreement referred in Section 4.08. The Company shall keep Buyer
fully informed on a current basis of the status and details of any such
Third-Party Acquisition Offer, indication or request.
4.04 ACCESS TO INFORMATION. From the date hereof until the Effective
Time, the Company will give Buyer and its counsel, financial advisers, auditors
and other authorized representatives and its financing sources reasonable access
to the offices, properties, books and records of the Company and each Subsidiary
at all reasonable times and upon reasonable notice, and will instruct the
employees, counsel, financial advisers and auditors of the Company and each
Subsidiary to cooperate with Buyer and each such representative and financing
source in all reasonable respects in its investigation of the business of the
Company and its Subsidiaries. Buyer and each such representative and financing
source will conduct such investigation in a manner as not to unreasonably
interfere with the operations of the Company and its Subsidiaries and will take
all necessary precautions (including obtaining the written agreement of its
respective employees or representatives involved in such investigation) to
protect the confidentiality of any information of the Company and its
Subsidiaries disclosed to such persons during such investigation.
4.05 AMENDMENT OF THE COMPANY'S EMPLOYEE PLANS. The Company will,
effective at or immediately before the Effective Time, cause any Employee Plans
that it may have to be amended, to the extent, if any, reasonably requested by
Buyer, for the purpose of permitting such Employee Plan to continue to operate
in conformity with ERISA and the Code following the Merger.
4.06 HSR ACT. Each of the Company, Buyer and Buyer Subsidiary will file
all Notification and Report Forms and related material that it may be required
to file with the Federal Trade Commission and the Antitrust Division of the
United States Department of Justice
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under the HSR Act, will exercise reasonable efforts to obtain an early
termination of the applicable waiting period, and will make any further filings
pursuant thereto that may be necessary or advisable.
4.07 CERTAIN RESIGNATIONS. The Company will use its reasonable efforts
to assist Buyer in procuring the resignation, effective as of the Effective
Time, of all of the members of the Boards of Directors of the Company and its
Subsidiaries.
4.08 CONFIDENTIALITY AGREEMENT. The Confidentiality Agreement between
the Company and Buyer dated February 25, 2000 shall remain in full force and
effect until the Effective Time. Until the Effective Time, the Company and Buyer
shall comply with the terms of the Confidentiality Agreement.
4.09 OPTIONS. The Company will take such actions as are necessary to
cause each Option outstanding immediately before the Effective Time (whether or
not such Option is then exercisable) to be canceled immediately before the
Effective Time in consideration for a cash payment by the Company equal to the
Option Settlement Amount for such Option, subject to all applicable tax
withholding. The Company shall comply with all applicable requirements regarding
income tax withholding in connection with the foregoing.
4.10 AMENDMENT TO RIGHTS AGREEMENT. Before, or simultaneously with, the
execution and delivery of this Agreement, the Board of Directors of the Company
amended the Rights Agreement to provide that (a) neither Buyer nor Buyer
Subsidiary will become an "Acquiring Person" (as defined in the Rights
Agreement) as a result of the execution of this Agreement or the consummation of
the Merger, (b) no "Shares Acquisition Date," "Distribution Date," "Section
11(a)(ii) Event," or "Section 13 Event" (as such terms are defined in the Rights
Agreement) will occur as a result of the consummation of the Merger, and (c) all
outstanding Rights issued and outstanding under the Rights Agreement will expire
immediately before the Effective Time. Anything in this Agreement to the
contrary notwithstanding, the Company shall have the right at any time after the
date of this Agreement and before the Effective Time to further amend, or take
any other action with respect to, the Rights Agreement as deemed necessary by
the Company; PROVIDED, HOWEVER, that any such further action or amendment shall
not contravene the amendment referred to in this Section 4.10; PROVIDED FURTHER,
HOWEVER, that any such amendment or action shall be subject to the prior written
approval of Buyer which approval shall not be unreasonably withheld.
4.11 ADDITIONAL AGREEMENTS; REASONABLE EFFORTS. Subject to the terms
and conditions of this Agreement, each of the parties agrees to use all
reasonable efforts to take or cause to be taken, all action and to do, or to
cause to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement,
including cooperating fully with the other party and with Buyer's financing
sources. In case 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 of the Constituent
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Corporations, the proper officers and directors of the Surviving Corporation
may take all such necessary action.
4.12 SUBSTITUTE FINANCING. If for any reason any portion of the
financing described in Section 3.02(g) (the "Financing") shall not be available,
Purchaser shall use its reasonable best efforts to secure one or more substitute
financing commitments on terms no less favorable to Purchaser than those
contained in the commitment letters relating to the Financing until the earlier
of the termination of this Agreement and December 31, 2000.
ARTICLE V
CONDITIONS PRECEDENT
5.01 CONDITIONS TO THE OBLIGATIONS OF BUYER AND BUYER SUBSIDIARY. The
obligations of Buyer and Buyer Subsidiary to effect the Merger shall be subject
to the fulfillment at or before the Effective Time of the following conditions,
any one or more of which (except for the conditions set forth in Sections
5.01(b) and (e)) may be waived by Buyer and Buyer Subsidiary:
(a) The representations and warranties of the Company
contained in Section 3.01 of this Agreement shall be true and correct
in all respects as of the date of this Agreement and immediately before
the Effective Time, except to the extent any inaccuracies in any such
representation or warranty, individually or in the aggregate, do not
materially impair the ability of the Company to consummate the
transactions contemplated hereby and has not had and is not reasonably
likely to have a Material Adverse Effect (provided that, solely for
purposes of this Section 5.01(a), any representation or warranty in
Section 3.01 that is qualified by Material Adverse Effect language or
other materiality qualifier shall be read as if such language were not
present), except those representations and warranties that speak of an
earlier date, which shall be true and correct as of such earlier date.
The Company shall have performed and complied in all material respects
with the agreements and obligations contained in this Agreement
required to be performed and complied with by it immediately before the
Effective Time; and Buyer and Buyer Subsidiary shall have received a
certificate signed by an executive officer of the Company to the
effects set forth in this Section 5.01(a).
(b) This Agreement shall have been approved at the meeting of
the shareholders of the Company referred to in Section 4.02 by the vote
required by the Minnesota Act and the Company's Articles of
Incorporation.
(c) Neither the Company nor any Subsidiary shall have, since
the date of this Agreement, suffered any business interruption, damage
to or destruction of its properties or other incident, occurrence,
change or event (other than incidents, occurrences or events generally
applicable to the industry in which the Company and the Subsidiaries
operate or changes in general economic or market conditions) that has
had or would reasonably be
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expected to have (after giving effect to any insurance coverage) a
Material Adverse Effect; PROVIDED, HOWEVER, that none of the items set
forth in the Disclosure Letter shall be deemed to have had a Material
Adverse Effect for purposes of this Section 5.01(c).
(d) There shall not be pending any action or proceeding
brought by any governmental or other regulatory or administrative
agency or commission requesting or looking toward an injunction, writ,
order, judgment or decree that, in the reasonable judgment of Buyer, is
reasonably likely, if issued, to restrain or prohibit the consummation
of any of the transactions contemplated hereby or require rescission of
this Agreement or any such transactions or result in material damages
to Buyer, Buyer Subsidiary or the Surviving Corporation or their
respective officers or directors if the transactions contemplated
hereby are consummated, nor shall there be in effect any provision of
applicable law prohibiting the consummation of the Merger or any
injunction, writ, judgment, preliminary restraining order or other
order or decree of any nature issued by a court or governmental agency
of competent jurisdiction directing that any of the transactions
provided for herein not be consummated as so provided.
(e) All applicable waiting periods (and any extensions
thereof) under the HSR Act shall have expired or otherwise been
terminated.
(f) No Rights shall have become exercisable under the Rights
Agreement.
(g) Funds in the amount of the Senior Commitment and the
Mezzanine Commitment shall have been made available to Buyer or Buyer
Subsidiary as contemplated in Sections 3.02(g)(i) and (ii).
(h) The holders of not more than 10% of the outstanding shares
of Common Stock shall have exercised dissenters' rights in accordance
with the Minnesota Act.
(i) All actions by or in respect of or filings with any
governmental body, agency, official or authority required to permit the
consummation of the Merger shall have been made or obtained.
(j) Immediately prior to the Effective Time, the Company shall
have cash and cash equivalents (as determined in accordance with
generally accepted accounting principals) of at least $110 million.
5.02 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The obligations of
the Company to effect the Merger shall be subject to the fulfillment at or
before the Effective Time of the following conditions, any one or more of which
(except for the conditions set forth in Section 5.02(b) and (d)) may be waived
by the Company:
(a) The representations and warranties of Buyer and Buyer
Subsidiary contained in Section 3.02 of this Agreement shall be true
and correct in all material respects as of the date of this Agreement
and immediately before the Effective Time,
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except those representations and warranties that speak of an earlier
date, which shall be true and correct as of such earlier date. Each of
Buyer and Buyer Subsidiary shall have performed and complied in all
material respects with the agreements and obligations contained in this
Agreement required to be performed and complied with by it immediately
before the Effective Time; and the Company shall have received a
certificate signed by an executive officer of each of Buyer and Buyer
Subsidiary to the effects set forth in this Section 5.02(a).
(b) This Agreement shall have been approved at the meeting of
the shareholders of the Company referred to in Section 4.02 by the vote
required by the Minnesota Act and the Company's Articles of
Incorporation.
(c) There shall not be in effect any provision of applicable
law prohibiting the consummation of the Merger or any injunction, writ,
judgment, preliminary restraining order or other order or decree of any
nature issued by a court or governmental agency of competent
jurisdiction directing that any of the transactions provided for herein
not be consummated as so provided.
(d) All applicable waiting periods (and any extension thereof)
under the HSR Act shall have expired or otherwise been terminated.
(e) All actions by or in respect of or filings with any
governmental body, agency, official or authority required to permit the
consummation of the Merger shall have been made or obtained.
ARTICLE VI
CONDUCT AND TRANSACTIONS AFTER THE EFFECTIVE TIME
6.01 EMPLOYEE MATTERS.
(a) For a period of at least one year after the Effective
Time, Buyer shall, or shall cause the Surviving Corporation, a
Subsidiary or any other affiliate of Buyer to maintain welfare and
pension benefit plans, programs and arrangements that are, in the
aggregate, for the employees as a whole who were active full-time
employees of the Company or any Subsidiary immediately before the
Effective Time and continue to be active full-time employees of Buyer,
the Surviving Corporation, any Subsidiary or any other affiliate of
Buyer, no less favorable than those provided by the Company and its
Subsidiaries immediately before the Effective Time (provided that
nothing herein shall obligate Buyer, the Surviving Corporation, any
Subsidiary or any other affiliate of Buyer to provide such employees
with any equity or stock-based compensation).
(b) From and after the Effective Time, for purposes of
determining eligibility, vesting and entitlement to vacation and
severance benefits for employees actively
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employed full-time by the Company or any Subsidiary immediately before
the Effective Time under any compensation, severance, welfare, pension,
benefit or savings plan of Buyer or any of its affiliates in which
active full-time employees of the Company and its Subsidiaries become
eligible to participate (whether under Section 6.01(a) above or
otherwise), service with the Company or any of its Subsidiaries
(whether before or after the Effective Time) shall be credited as if
such service had been rendered to Buyer or such affiliate.
(c) If the Surviving Corporation or any of the Subsidiaries,
or any of their respective successors or assigns, transfers all or
substantially all of its properties and assets to any person or persons
(other than Buyer or an affiliate of Buyer) within one year of the
Effective Date, then, and in each such case, proper provision shall be
made so that the transferee assumes (and if more than one, the
transferees assume, jointly and severally) the obligations set forth in
this Section 6.01.
6.02 INDEMNIFICATION. All rights to indemnification, expense
advancement and exculpation existing in favor of any present or former director,
officer or employee of the Company or any of its Subsidiaries as provided in the
Articles or Certificate of Incorporation, By-Laws or similar organizational
documents of the Company or any of its Subsidiaries or by law as in effect on
the date hereof shall survive the Merger for a period of at least six years
after the Effective Time (or, in the event any relevant claim is asserted or
made within such six-year period, until final disposition of such claim) with
respect to matters occurring at or before the Effective Time, and no action
taken during such period shall be deemed to diminish the obligations set forth
in this Section 6.02. Buyer hereby guarantees, effective at the Effective Time,
all obligations of the Surviving Corporation and the Subsidiaries in respect of
such indemnification and expense advancement.
6.03 DIRECTORS AND OFFICERS LIABILITY INSURANCE. For a period of at
least six years after the Effective Time, the Surviving Corporation shall,
and Buyer (for so long as it shall control the Surviving Corporation) shall
cause the Surviving Corporation to, maintain in effect either (i) the current
policy of directors' and officers' liability insurance maintained by the
Company (provided that Buyer or the Surviving Corporation may substitute
therefor policies of at least the same coverage and amounts containing terms
and conditions which are no less advantageous in any material respect to the
insured parties thereunder) with respect to claims arising from facts or
events that occurred at or before the Effective Time (including consummation
of the Merger), or (ii) a run-off (i.e., "tail") policy or endorsement with
respect to the current policy of directors' and officers' liability insurance
covering claims asserted within six years after the Effective Time arising
from facts or events that occurred at or before the Effective Time (including
consummation of the Merger); and such policies or endorsements shall name as
insureds thereunder all present and former directors and officers of the
Company or any of its Subsidiaries; PROVIDED, HOWEVER, that the Surviving
Corporation shall not be obligated to spend more than 200% of the average
annual premium in effect during the last three years in connection with this
Section 6.03. Notwithstanding the foregoing, if the amount of the coverage
required by this Section exceeds 200% of the amount of the average annual
premium in effect
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during the last three years, Buyer and the Surviving Corporation shall use all
reasonable efforts to maintain the most advantageous policies of directors' and
officers' insurance obtainable for an annual premium equal to no more than such
200% amount. If Buyer or the Surviving Corporation or any of their respective
successors or assigns (i) consolidates with or merges into any other person and
is not 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, proper provisions shall be made so that the successors and
assigns of Buyer and/or the Surviving Corporation are bound by the obligations
of the respective party set forth in Section 6.02 and this Section 6.03.
ARTICLE VII
TERMINATION AND ABANDONMENT
7.01 GENERALLY. This Agreement may be terminated and abandoned at any
time before the Effective Time, whether before or after approval of this
Agreement by the shareholders of the Company:
(a) by mutual consent of the Boards of Directors of Buyer and
the Company;
(b) by Buyer or the Company if the transactions contemplated
hereby shall not have been consummated on or before December 31, 2000
(which date may be extended by mutual agreement of Buyer and the
Company), PROVIDED that such failure is not due to the failure of the
party seeking to terminate this Agreement (or, in the event Buyer is
seeking to terminate this Agreement, of Buyer Subsidiary) to comply in
all material respects with its obligations under this Agreement;
(c) by Buyer, if (i) any of the conditions set forth in
Section 5.01 shall become impossible to fulfill other than for reasons
within the control of Buyer or Buyer Subsidiary, and such conditions
shall not have been waived by Buyer under Section 8.03, or (ii) the
shareholders of the Company shall fail to approve this Agreement by the
vote required by the Minnesota Act and the Company's Articles of
Incorporation at the first shareholders meeting called for that purpose
or any adjournment thereof;
(d) by the Company, if (i) any of the conditions set forth in
Section 5.02 shall become impossible to fulfill other than for reasons
within the control of the Company, and such conditions shall not have
been waived by the Company under Section 8.03, or (ii) the shareholders
of the Company shall fail to approve this Agreement by the vote
required by the Minnesota Act and the Company's Articles of
Incorporation at the first shareholders meeting called for that purpose
or any adjournment thereof;
(e) by the Company upon not less than five days notice to
Buyer, if the Board of Directors of the Company, in the good-faith
exercise of its fiduciary duties, withdraws or adversely modifies its
recommendation of the Merger, or if a bona fide Third-Party Acquisition
Offer is received by the Company or its shareholders, which the Board
of
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Directors of the Company determines, in the good faith exercise of its
fiduciary duties, to accept, approve or recommend (provided, however,
that the parties agree that the provision of any notice under this
Section 7.01(e) shall not in itself provide Buyer with any right to
terminate this Agreement); or
(f) by the Buyer, if the Board of Directors of the Company
withdraws or adversely modifies its recommendation of the Merger, or if
the Board of Directors of the Company accepts, approves or recommends,
or publicly proposes to accept, approve or recommend, a Third-Party
Acquisition Offer, or if there is any public announcement that any
person or group has made or intends to make a Third-Party Acquisition
Proposal and such Third-Party Acquisition Proposal is not rejected by
the Board of Directors of the Company within 30 days of such
announcement.
(g) by Buyer, if the Company shall have breached any
representation or obligation contained in this Agreement, such breach
would give rise to a failure of the condition set forth in Section
5.01(a) and such breach has not been cured within 30 days after the
giving of written notice to the Company.
(h) by the Company, if Buyer shall have breached any
representation or obligation contained in this Agreement, such breach
would give rise to a failure of the condition set forth in Section
5.02(a) and such breach has not been cured within 30 days after the
giving of written notice to Buyer.
7.02 PROCEDURE AND EFFECT OF TERMINATION AND ABANDONMENT. In the event
of termination of this Agreement by the Company or Buyer under Section 7.01,
written notice thereof shall forthwith be given to the other party and this
Agreement shall terminate and the Merger shall be abandoned without further
action by any of the parties. If this Agreement is terminated as provided
herein, no party hereto shall have any liability or further obligation to any
other party to this Agreement, except as otherwise provided in Section 8.04 or
to the extent that the termination is a direct result of a willful and material
breach or violation by such party of a representation, warranty, or covenant
contained in this Agreement.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.01 TERMINATION OF REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
representations and warranties of the parties set forth in this Agreement
(including those set forth in the Disclosure Letter) or in any certificate
furnished under this Agreement shall not survive the Effective Time.
8.02 AMENDMENT AND MODIFICATION. To the extent permitted by applicable
law, this Agreement may be amended, modified or supplemented only by written
agreement of the parties hereto at any time before the Effective Time with
respect to any of the terms contained herein, except that after the meeting of
shareholders contemplated by Section 4.02, the amount of the
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Merger Consideration shall not be decreased and the form of the Merger
Consideration shall not be altered without the approval of the shareholders.
8.03 WAIVER OF COMPLIANCE; CONSENTS. Any failure of Buyer or Buyer
Subsidiary, on the one hand, or the Company, on the other hand, to comply with
any obligation, covenant, agreement or condition herein (except the conditions
in Sections 5.01(b) and (e) and 5.02(b) and (d) of this Agreement) may be waived
in writing by the Company or by Buyer and Buyer Subsidiary, respectively, 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 8.03.
8.04 EXPENSES AND TERMINATION FEE.
(a) Except as otherwise provided in Sections 8.04(b) and (e),
all expenses incurred in connection with this Agreement and the
consummation of the transactions contemplated hereby shall be paid by
the party incurring such expenses. Any such expenses incurred by the
Company and not paid before the Effective Time shall be liabilities of
the Surviving Corporation. Provided that if the Merger is completed,
Buyer's expenses incurred in connection with this Agreement and the
consummation of the transactions contemplated hereby will be paid by
the Surviving Corporation immediately following the Effective Time.
(b) If this Agreement is terminated under Section 7.01 and if
Buyer is entitled to a Termination Fee (as defined below) under
paragraph (c) of this Section 8.04 or the Agreement is terminated in
accordance with Section 7.01(c)(ii) or 7.01(d)(ii) and Buyer is not
entitled to a Termination Fee under paragraph (c) of this Section 8.04
and has not materially breached its obligations hereunder, then the
Company shall, at the same time as the Termination Fee is required to
be paid under paragraph (c) of this Section 8.04 (or not later than
five business days following such termination under Section 7.01(c)(ii)
or 7.01(d)(ii)), pay Buyer an amount equal to all reasonable,
documented out-of-pocket expenses incurred by or on behalf of Buyer or
Buyer Subsidiary in connection with the negotiation, preparation,
financing, execution or consummation of this Agreement and the
transactions contemplated hereby, including reasonable legal,
accounting, travel, filing, printing, financing commitment and other
out-of-pocket expenses; PROVIDED, HOWEVER, that the aggregate expenses
payable by the Company to Buyer under this Section 8.04(b) in the event
Buyer is entitled to a Termination Fee shall not exceed $6.43 million,
and that the aggregate expenses payable by the Company to Buyer under
this Section 8.04(b) in the event of a termination under Section
7.01(c)(ii) or 7.01(d)(ii) where no Termination Fee is payable shall
not exceed $4 million.
(c) The Company shall, within five business days after
termination of this Agreement under Section 8.04(c)(i) and within five
business days after the consummation or the execution of the definitive
agreement referred to in Section 8.04(c)(ii), pay Buyer a
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fee of $19.29 million (a "Termination Fee"), in addition to the
expenses set forth in Section 8.04(b), if any of the following occurs:
(i) this Agreement is terminated (A) by the Company
under Section 7.01(e), (B) by Buyer under Section 7.01(f) or
(C) by Buyer if there shall have been any material breach of
any provision of Section 4.02 or 4.03; or
(ii) this Agreement is terminated (A) by Buyer under
Section 7.01(b) or (c)(i) and the condition giving rise to
Buyer's right of termination resulted from a breach by the
Company of any of its representations, warranties or covenants
contained in this Agreement (except as provided in paragraph
8.04(c)(i)(C)), (B) by Buyer under Section 7.01(c)(ii), or (C)
by the Company under Section 7.01(d)(ii); PROVIDED, HOWEVER,
that (I) prior to any termination under Section 7.01(b) or
(c)(i)) or in the case of a termination under Section
7.01(c)(ii) or (d)(ii) prior to any meeting of the
shareholders of the Company called for purposes of approving
this Agreement either (A) any person or group shall have
informed the Company that such person or group proposes,
intends to propose, is considering proposing, or will or may,
if the Merger is delayed, abandoned or not approved by the
Company's shareholders, propose, a Third-Party Transaction (as
defined below), or (B) any such person or group or the Company
publicly announces (including any filing with any federal or
state office or agency) that such person or group has
proposed, intends to propose, is considering proposing, or
will or may, if the Merger is delayed, abandoned or not
approved by the Company's shareholders, propose, a Third-Party
Transaction; AND (II) within six months after such termination
a Third-Party Transaction is consummated or a binding
agreement providing for a Third-Party Transaction is entered
into by the Company.
(d) In no event shall more than one Termination Fee be payable
under this Section 8.04. As used herein, "Third-Party Transaction"
means the occurrence of any of the following events:
(i) the acquisition of the Company by merger,
consolidation, statutory share exchange or other business
combination transaction by any person other than Buyer, Buyer
Subsidiary or any affiliate thereof (a "Third Party"), in
which transaction the holders of shares of Company Common
Stock immediately before the transaction receive a per-share
consideration in excess of the Merger Consideration;
(ii) the acquisition by any Third Party of 30% or
more (in book value or market value) of the total assets of
the Company and its Subsidiaries, taken as a whole, for
consideration that indicates a total value for the Company and
its Subsidiaries in excess of the sum of (A) the product of
the number of shares of Company Common Stock outstanding on
the date of this Agreement multiplied
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by the Merger Consideration, plus (B) the aggregate of the
Option Settlement Amounts for all Options outstanding on the
date of this Agreement; or
(iii) the acquisition by a Third Party of 30% or more
of the outstanding shares of Company Common Stock, whether by
tender offer, exchange offer or otherwise, for a per-share
consideration in excess of the Merger Consideration.
8.05 PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No party to this
Agreement shall issue any press release or make any public announcement relating
to the subject matter of this Agreement without prior written approval of the
other parties, which approval shall not be unreasonably withheld or delayed;
PROVIDED, HOWEVER, that each of the Company and Buyer may make any public
disclosure it believes in good faith is required by applicable law or any
listing or trading agreement concerning its publicly traded securities (in which
case the disclosing party will provide the other parties to this Agreement with
a draft of the proposed disclosure sufficiently in advance to permit such other
parties to provide comments to the disclosure and the disclosing party will
revise such disclosure to reflect all reasonable comments before making the
disclosure).
8.06 ADDITIONAL AGREEMENTS. Subject to the terms and conditions of this
Agreement, each of the parties agrees to use all reasonable efforts to take or
cause to be taken all action, and do or cause to be done all things necessary,
proper or advisable under applicable laws and regulations, to ensure that the
conditions set forth in Article V are satisfied and 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, the proper officers and directors of each
corporation that is a party to this Agreement shall take all such necessary
action.
8.07 NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, effective when
delivered, or if delivered by express delivery service, effective when
delivered, or if mailed by registered or certified mail (return receipt
requested), effective three business days after mailing, to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) If to Buyer or Buyer Subsidiary, to it at:
Big Boy Holdings, Inc.
667 Madison Avenue
New York, NY 10021
Attention: Frederick J. Iseman
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
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New York, NY 10019-6064
Attention: Carl L. Reisner, Esq.
(b) If to the Company, to it at:
1460 Buffet Way
Eagan, Minnesota 55121
Attention: Roe H. Hatlen
with a copy to each of:
H. Thomas Mitchell, General Counsel
Buffets, Inc.
1460 Buffet Way
Eagan, Minnesota 55121
And
Douglas P. Long
Faegre & Benson LLP
2200 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402
8.08 ASSIGNMENT. This Agreement and all of the provisions hereof shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any party
hereto without the prior written consent of the other parties; PROVIDED,
HOWEVER, that Buyer and Buyer Subsidiary may assign all or any of their rights
hereunder to any of their respective affiliates or to any person providing
financing to Buyer or Buyer Subsidiary provided that no such assignment shall
relieve the assigning party of its obligations hereunder. Except for the
provisions of Article I and Sections 6.01, 6.02 and 6.03, this Agreement is not
intended to confer upon any other person except the parties hereto any rights or
remedies hereunder.
8.09 INTERPRETATION. As used in this Agreement, (i) "including" means
"including without limitation"; (ii) "person" includes an individual, a
partnership, a limited liability company, a joint venture, a corporation, a
trust, an incorporated organization and a government or any department or agency
thereof; (iii) "affiliate" has the meaning set forth in Rule 12b-2 promulgated
under the Exchange Act; (iv) "business day" means any day other than a Saturday,
Sunday or a day which is a statutory holiday under the laws of the United States
or the State of Minnesota; (v) all dollar amounts are expressed in United States
funds; (vi) the phrase "to the
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knowledge of the Company" or any similar phrase shall mean the actual knowledge
of one or more of the executive officers of the Company; and (vii) "subsidiary"
of any specified corporation shall mean any person of which the outstanding
securities having ordinary voting power to elect a majority of the board of
directors are directly or indirectly owned by such specified corporation.
8.10 GOVERNING LAW. The Agreement shall be governed by the laws of the
State of Minnesota without giving effect to conflict-of-laws principles.
8.11 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute the same instrument.
8.12 HEADINGS; INTERNAL REFERENCES. The Article and Section headings
contained in this Agreement are solely for the purpose of reference, and are not
part of the agreement of the parties and shall not affect in any way the meaning
or interpretation of this Agreement.
8.13 ENTIRE AGREEMENT. This Agreement, including the Disclosure Letter
and the exhibits hereto, and the Confidentiality Agreement described in Section
4.08, embody the entire agreement and understanding of the parties hereto in
respect of the subject matter contained herein, and supersede all prior
agreements and understandings among the parties with respect to such subject
matter. There are no restrictions, promises, representations, warranties
(express or implied), covenants or undertakings of the parties, other than those
expressly set forth or referred to in this Agreement or such Confidentiality
Agreement.
8.14 SEVERABILITY. If any term, provision, covenant, agreement or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants, agreements and restrictions of this Agreement will continue in full
force and effect and will in no way be affected, impaired or invalidated.
8.15 DISCLOSURE LETTER. Matters reflected in the Disclosure Letter are
not necessarily limited to matters required by this Agreement to be reflected in
the Disclosure Letter. Such additional matters are set forth for informational
purposes and do not necessarily include other matters of a similar nature. A
disclosure made by the Company in any Section of this Agreement or the
Disclosure Letter shall qualify other sections of the Agreement or the
Disclosure Letter only to the extent that it is reasonably apparent from a
reading of such disclosure that it also qualifies or applies to such other
sections.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
BUFFETS, INC.
By: /s/ Kerry A. Kramp
----------------------------------------------
Its: President and Chief Operating Officer
-----------------------------------------
BIG BOY HOLDINGS, INC.
By: /s/ Frederick J. Iseman
----------------------------------------------
Its: President
-----------------------------------------
BIG BOY MERGER CORPORATION
By: /s/ Frederick J. Iseman
----------------------------------------------
Its: President
-----------------------------------------
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For the benefit of Buffets, Inc., the undersigned, Caxton-Iseman
Capital, Inc., hereby makes to Buffets, Inc. the representations and warranties
contained in Section 3.02(g) of the Agreement and Plan of Merger (replacing the
term "Buyer" with Caxton-Iseman Capital, Inc.) and undertakes and agrees to
cause Buyer to perform Buyer's agreements under Section 4.12 of the Agreement
and Plan of Merger. The undersigned hereby represents and warrants to Buffets,
Inc. that (i) it has full corporate power and authority to execute and deliver
this agreement and perform its obligations hereunder, (ii) it has taken all
actions necessary to authorize the execution, delivery and performance of this
agreement by it, (iii) such execution, delivery and performance do not conflict
with, violate or otherwise result in a default under its Certificate of
Incorporation, Bylaws or other organizational documents, and (iv) this agreement
is the legal, valid and binding obligation of the undersigned, enforceable in
accordance with its terms. Buffets, Inc., by its execution of the Agreement and
Plan of Merger, acknowledges that the undersigned is not a party to or bound by
the terms thereof except to the extent that it involves the representations and
warranties and undertakings set forth in this paragraph.
CAXTON-ISEMAN CAPITAL, INC.
By: /s/ Frederick J. Iseman
----------------------------------
Its: President
-----------------------------
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