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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
February 18, 2000 (February 9, 2000)
RAINFOREST CAFE, INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 000-27366 41-1779527
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
720 SOUTH FIFTH STREET
HOPKINS, MINNESOTA 55343
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 945-5400
NOT APPLICABLE
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On February 9, 2000, Landry's Seafood Restaurants, Inc. (the "Company")
and Rainforest Cafe, Inc. ("Rainforest") announced that they entered into an
Agreement and Plan of Merger (the "Merger Agreement"), dated as of February 9,
2000, by and among Rainforest, the Company and LSR Acquisition Corp., a wholly
owned subsidiary of the Company ("Merger Sub"). Pursuant to the Merger
Agreement, Rainforest will be merged with and into Merger Sub, with Merger Sub
being the surviving corporation in the merger.
Pursuant to the Merger Agreement, each share of Rainforest common stock will be
converted, at the shareholder's election, into the right to receive $5.23 in
cash or .5816 shares of the Company's common stock for each share of Rainforest
common stock outstanding, subject to mandatory proration. As a result of the
transaction, approximately 65% of the shares of Rainforest common stock will
be converted into the Company's common stock and approximately 35% of the
shares of Rainforest common stock will be converted into cash. The Company
will issue approximately 9,028,000 shares of its common stock and pay
approximately $43,750,000 in cash for all of the outstanding shares of common
stock of Rainforest.
The merger transaction is subject to various conditions including, among
others, approval of holders of Rainforest common stock and regulatory approvals
and consents.
It is intended that the merger transaction qualify as a tax-free reorganization
under Section 368(a) of the Internal Revenue Code of 1986, as amended.
In connection with the transactions contemplated by the Merger Agreement, Lyle
Berman and Steven Schussler, shareholders of Rainforest holding approximately
6.6% and 4.1% of Rainforest's outstanding shares of common stock, respectively,
have entered into agreements with Landry's to, among other things, vote their
shares of common stock in favor of the transaction. Additionally, Lyle Berman
(Chairman of the Board/Chief Executive Officer of Rainforest), Kenneth W.
Brimmer (President of Rainforest), Steven Schussler (Senior Vice President -
Development of Rainforest), and Ercument Ucan (Senior Vice President - Retail
of Rainforest) have entered into employee termination, consulting and
non-competition agreements with Landry's.
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ITEM 7. FINANCIAL STATEMENT, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Not required.
(b) Pro Forma Financial Information.
Not required.
(c) Exhibits
2.1 Agreement and Plan of Merger dated as of February 9, 2000, by and
among Rainforest Cafe, Inc., a Minnesota corporation, Landry's
Seafood Restaurants, Inc., a Delaware corporation, and LSR
Acquisition Corp., a Delaware corporation and wholly owned
subsidiary of Landry's.
99.1 Press Release of Rainforest Cafe, Inc. dated February 9, 2000.
Certain schedules and exhibits (the "Attachments") to the Agreement and
Plan of Merger (Exhibit 2.1) are not being filed herewith. The Registrant
undertakes to furnish a copy of any omitted Exhibit to the Commission upon
request.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RAINFOREST CAFE, INC.
(Registrant)
Date: February 18, 2000 By: /s/ Kenneth W. Brimmer
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Name: Kenneth W. Brimmer
Title: President
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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2.1 Agreement and Plan of Merger dated as of February 9, 2000, by and
among Rainforest Cafe, Inc., a Minnesota corporation, Landry's
Seafood Restaurants, Inc., a Delaware corporation, and LSR
Acquisition Corp., a Delaware corporation and wholly owned
subsidiary of Landry's.
99.1 Press Release of Rainforest Cafe, Inc. dated February 9, 2000.
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Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
By and Among
LANDRY'S SEAFOOD RESTAURANTS, INC.,
LSR ACQUISITION CORP.
and
RAINFOREST CAFE, INC.
Dated as of February 9, 2000
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TABLE OF CONTENTS
Page
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ARTICLE I
TERMS OF THE MERGER
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1.1. The Merger.......................................................................2
1.2. The Closing; Effective Time......................................................2
1.3. Merger Consideration.............................................................3
1.4. Election Procedure...............................................................4
1.5. Issuance of Purchaser Stock and Payment of
Cash Consideration; Proration....................................................6
1.6. Issuance of Purchaser Stock......................................................8
1.7. Payment of Cash Consideration....................................................9
1.8. Options.........................................................................10
1.9. Dissenting Shares...............................................................11
1.10. Articles of Incorporation and Bylaws............................................12
1.11. Stock Transfer Books............................................................12
1.12. Directors and Officers..........................................................12
1.13. Other Effects of Merger.........................................................12
1.14. Registration Statement Prospectus/Proxy Statement...............................12
1.15. Tax-Free Reorganization.........................................................15
1.16. Additional Actions..............................................................15
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
2.1. Due Incorporation and Good Standing.............................................15
2.2. Capitalization..................................................................16
2.3. Subsidiaries....................................................................16
2.4. Authorization; Binding Agreement................................................17
2.5. Governmental Approvals..........................................................18
2.6. No Violations...................................................................18
2.7. Securities Filings..............................................................19
2.8. Company Financial Statements....................................................19
2.9. Absence of Certain Changes or Events; No Undisclosed Liabilities................20
2.10. Compliance with Laws............................................................20
2.11. Permits.........................................................................20
2.12. Litigation......................................................................21
2.13. Contracts.......................................................................21
2.14. Employee Benefit Plans..........................................................21
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2.15. Taxes and Returns...............................................................23
2.16. Intellectual Property...........................................................24
2.17. Finders and Investment Bankers..................................................26
2.18. Fairness Opinion................................................................26
2.19. Insurance.......................................................................26
2.20. Vote Required; Ownership of Purchaser Capital Stock;
State Takeover Statutes.........................................................26
2.21. Title to Properties.............................................................27
2.22. Environmental Matters...........................................................28
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
3.1. Due Incorporation and Good Standing.............................................29
3.2. Capitalization..................................................................29
3.3. Authorization; Binding Agreement................................................30
3.4. Governmental Approvals..........................................................30
3.5. No Violations...................................................................30
3.6. Securities Filings..............................................................31
3.7. Purchaser Financial Statements..................................................32
3.8. Absence of Certain Changes or Events; No Undisclosed Liabilities................32
3.9. Compliance with Laws............................................................32
3.10. Litigation......................................................................32
3.11. Tax Returns.....................................................................33
3.12. Finders and Investment Bankers..................................................33
3.13. Fairness Opinion................................................................33
3.14. No Prior Activities.............................................................33
3.15. Ownership of Company Stock......................................................33
ARTICLE IV
ADDITIONAL COVENANTS OF THE COMPANY
4.1. Conduct of Business of the Company and
the Company Subsidiaries........................................................34
4.2. Notification of Certain Matters.................................................37
4.3. Access and Information..........................................................38
4.4. Shareholder Approval............................................................38
4.5. Reasonable Best Efforts.........................................................38
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4.6. Public Announcements............................................................39
4.7. Compliance......................................................................40
4.8. No Solicitation.................................................................40
4.9. Tax Opinion Certificate.........................................................42
4.10. SEC and Shareholder Filings.....................................................43
ARTICLE V
ADDITIONAL COVENANTS OF PURCHASER
5.1. Access and Information..........................................................43
5.2. Notification of Certain Matters.................................................43
5.3. Reasonable Best Efforts.........................................................44
5.4. Compliance......................................................................44
5.5. SEC and Shareholder Filings.....................................................44
5.6. Tax Opinion Certificate.........................................................44
5.7. Indemnification.................................................................44
5.8. Benefit Plans and Employee Matters..............................................46
ARTICLE VI
CONDITIONS
6.1. Conditions to Each Party's Obligations..........................................46
6.2. Conditions to Obligations of the Company........................................47
6.3. Conditions to Obligations of Purchaser..........................................49
6.4. Frustration of Conditions.......................................................51
ARTICLE VII
TERMINATION AND ABANDONMENT
7.1. Termination.....................................................................51
7.2. Effect of Termination and Abandonment...........................................52
ARTICLE VIII
MISCELLANEOUS
8.1. Confidentiality.................................................................53
8.2. The Rainforest Cafe Friends of the Future Foundation............................54
8.3. Additional Approvals............................................................55
8.4. Amendment and Modification......................................................55
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8.5. Waiver of Compliance; Consents..................................................55
8.6. Survival........................................................................55
8.7. Notices.........................................................................55
8.8. Binding Effect; Assignment......................................................57
8.9. Expenses........................................................................57
8.10. Governing Law...................................................................57
8.11. Counterparts....................................................................57
8.12. Interpretation..................................................................57
8.13. Entire Agreement................................................................58
8.14. Severability....................................................................58
8.15. Specific Performance............................................................58
8.16. Third Parties...................................................................59
8.17. Disclosure Schedules............................................................59
8.18. Obligation of Purchaser.........................................................59
</TABLE>
Exhibits:
Exhibit A - Form of Stockholder Agreements
Exhibit B - Form of Employee Termination, Consulting and Non-Competition
Agreement
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement") is made and entered into as
of February 9, 2000, by and among Rainforest Cafe, Inc., a Minnesota corporation
(the "Company"), Landry's Seafood Restaurants, Inc., a Delaware corporation
("Purchaser"), and LSR Acquisition Corp., a Delaware corporation and wholly
owned subsidiary of Purchaser ("Merger Sub").
WITNESSETH:
WHEREAS, the respective Boards of Directors of Merger Sub, Purchaser and the
Company have approved the merger (the "Merger") of the Company with and into
Merger Sub in accordance with the laws of the State of Minnesota and the State
of Delaware and the provisions of this Agreement;
WHEREAS, as a condition and inducement to Purchaser's and the Merger Sub's
entering into this Agreement and incurring the obligations set forth herein,
concurrently with the execution and delivery of this Agreement, Purchaser is
entering into Stockholder Agreements, in the form of Exhibit A hereto (the
"Stockholder Agreements"), with each of the stockholders named therein, pursuant
to which, among other things, such stockholders have agreed to vote their
Company Shares (as defined in Section 1.3) in favor of the Merger provided for
herein;
WHEREAS, the Board of Directors of the Company (including all of the
disinterested directors of the Company's Board of Directors) has approved the
transactions contemplated by this Agreement and the Stockholder Agreements in
accordance with the provisions of Sections 302A.613 and 302A.673 of the
Minnesota Business Corporation Act ("MBCA");
WHEREAS, for United States federal income tax purposes, it is intended that the
Merger provided for herein shall qualify as a reorganization under Section
368(a) of the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder (the "Code"), and this Agreement is intended
to be and is adopted as a plan of reorganization within the meaning of Section
368 of the Code; and
WHEREAS, the Company, Merger Sub and Purchaser desire to make certain
representations, warranties and agreements in connection with, and establish
various conditions precedent to, the Merger.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements hereinafter set forth, the parties hereto
agree as follows:
ARTICLE I
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TERMS OF THE MERGER
1.1. The Merger. Upon the terms and subject to the conditions of this
Agreement, the Merger shall be consummated in accordance with the MBCA and the
Delaware General Corporation Law (the "DGCL"). At the Effective Time (as defined
below), upon the terms and subject to the conditions of this Agreement, the
Company shall be merged with and into Merger Sub in accordance with the MBCA and
the DGCL and the separate existence of the Company shall thereupon cease, and
Merger Sub, as the surviving corporation in the Merger (the "Surviving
Corporation") shall continue its corporate existence under the laws of the State
of Delaware as a subsidiary of Purchaser. The parties shall prepare and execute
Articles of Merger (the "Articles of Merger") and a Certificate of Merger (the
"Certificate of Merger") in order to comply in all respects with the
requirements of the MBCA and the DGCL, respectively, and with the provisions of
this Agreement.
1.2. The Closing; Effective Time. (a) The closing of the Merger (the
"Closing") shall take place at the offices of Skadden, Arps, Slate Meagher &
Flom LLP, Four Times Square, New York, New York 10036, at 10:00 a.m. local time
on a date to be specified by the parties which shall be no later than the third
business day after the date that all of the closing conditions set forth in
Article VI have been satisfied or waived (if waivable) unless another time, date
or place is agreed upon in writing by the parties hereto.
(b) The Merger shall become effective at the time of the filing of
the Articles of Merger with the Secretary of State of the State of Minnesota and
the Certificate of Merger with the Secretary of State of the State of Delaware
in accordance with the applicable provisions of the MBCA and the DGCL or at such
later time as may be specified in the Articles of Merger and Certificate of
Merger. The time when the Merger shall become effective is herein referred to as
the "Effective Time" and the date on which the Effective Time occurs is herein
referred to as the "Closing Date."
1.3. Merger Consideration. (a) Subject to the provisions of this
Agreement and any applicable backup or other withholding requirements, each of
the issued shares (the "Company Shares") of common stock, no par value, of the
Company (the "Company Stock") outstanding immediately prior to the Effective
Time (except for Company Shares to be canceled, as set forth in Section 1.3(d)
and Dissenting Shares, as defined in Section 1.9 hereof) shall be converted, by
virtue of the Merger and without any action on the part of the holder thereof,
into the right to receive such number of shares of the common stock, par value
$.01 per share, of Purchaser (the "Purchaser Stock") or cash, without any
interest thereon, as specified in Section 1.5 hereof, subject to payment of cash
in lieu of any fractional share as hereinafter provided (the "Merger
Consideration").
(b) No fractional shares of Purchaser Stock shall be issued pursuant
to the Merger nor will any fractional share interest involved entitle the holder
thereof to vote, to receive dividends or to exercise any other rights of a
shareholder of Purchaser. In lieu thereof, any
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holder of Company Stock who would otherwise be entitled to a fractional share of
Purchaser Stock pursuant to the provisions hereof shall receive an amount in
cash pursuant to Section 1.5(h) hereof.
(c) Subject to the provisions of this Agreement, at the Effective
Time, each share of Merger Sub common stock outstanding immediately prior to the
Merger shall be converted, by virtue of the Merger and without any action on the
part of the holder thereof, into one share of common stock of the Surviving
Corporation (the "Surviving Corporation Common Stock"), which shares of
Surviving Corporation Common Stock shall constitute all of the issued and
outstanding capital stock of the Surviving Corporation and shall be wholly owned
by Purchaser.
(d) Any shares of Company Stock owned by Purchaser, Merger Sub or any
other wholly owned subsidiaries of Purchaser immediately prior to the Merger
shall be canceled and retired at the Effective Time and shall cease to exist and
no Purchaser Stock or other consideration shall be delivered in exchange
therefor.
(e) On and after the Effective Time, holders of certificates
representing shares of Company Stock (the "Certificates") immediately prior to
the Effective Time shall cease to have any rights as stockholders of the
Company, except the right to receive the Merger Consideration for each Company
Share held by them or the right, if so demanded, to receive payment from the
Company of the "fair value" of such Company Shares as determined in accordance
with the MBCA.
1.4. Election Procedure. Each holder of Company Shares (other than
holders of Company Shares to be canceled as set forth in Section 1.3(d)) shall
have the right to submit a request specifying the number of Company Shares that
such holder desires to have converted into Purchaser Stock in the Merger and the
number of Company Shares that such holder desires to have converted into the
right to receive $5.23 in cash per Company Share (the "Purchaser Share Price"),
without interest (the "Cash Consideration"), in the Merger in accordance with
the following procedure:
(a) Each holder of Company Shares may specify in a request made in
accordance with the provisions of this Section 1.4 (herein called an "Election")
(i) the number of Company Shares owned by such holder that such holder desires
to have converted into Purchaser Stock in the Merger (a "Stock Election") and
(ii) the number of Company Shares owned by such holder that such holder desires
to have converted into the right to receive the Cash Consideration in the Merger
(a "Cash Election").
(b) Purchaser shall prepare a form (the "Form of Election") pursuant
to which each holder of Company Shares at the close of business on the Election
Deadline (as defined in Section 1.4(d)) may make an election and which shall be
mailed to the Company's stockholders in accordance with Section 1.4(c) so as to
permit the Company's stockholders to exercise their
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right to make an Election prior to the Election Deadline.
(c) Purchaser shall use all reasonable efforts to mail the Form of
Election available to all stockholders of the Company at least ten business days
prior to the Election Deadline.
(d) Any Company stockholder's election shall have been made properly
only if the person authorized to receive Elections and to act as exchange agent
under this Agreement, which exchange agent shall be mutually acceptable to the
Company and Purchaser (the "Exchange Agent") shall have received, by 5:00 p.m.
local time in the city in which the principal office of such Exchange Agent is
located, on the date of the Election Deadline, a Form of Election properly
completed and signed and accompanied by certificates for the Company Shares to
which such Form of Election relates (or by an appropriate guarantee of delivery
of such certificates, as set forth in such Form of Election, from a member of
any registered national securities exchange or of the National Association of
Securities Dealers, Inc. or a commercial bank or trust company in the United
States provided such certificates are in fact delivered to the Exchange Agent by
the time required in such guarantee of delivery). Failure to deliver Company
Shares covered by such a guarantee of delivery within the time set forth on such
guarantee shall be deemed to invalidate any otherwise properly made Election. As
used herein, "Election Deadline" means the date announced by Purchaser, as the
last day on which Forms of Election will be accepted; provided, that such date
shall be a business day no earlier than twenty business days prior to the
Effective Time and no later than the date on which the Effective Time occurs.
(e) Any Company stockholder may at any time prior to the Election
Deadline change his Election by written notice received by the Exchange Agent
prior to the Election Deadline accompanied by a revised Form of Election
properly completed and signed.
(f) Any Company stockholder may, at any time prior to the Election
Deadline, revoke his Election by written notice received by the Exchange Agent
prior to the Election Deadline or by withdrawal prior to the Election Deadline
of his certificates for Company Shares, or of the guarantee of delivery of such
certificates, previously deposited with the Exchange Agent. All Elections shall
be revoked automatically if the Exchange Agent is notified in writing by
Purchaser or the Company that this Agreement has been terminated. Any Company
stockholder who shall have deposited certificates for Company Shares with the
Exchange Agent shall have the right to withdraw such certificates by written
notice received by the Exchange Agent and thereby revoke his Election as of the
Election Deadline if the Merger shall not have been consummated prior thereto.
(g) Purchaser shall have the right to make rules, not inconsistent
with the terms of this Agreement, governing the validity of the Forms of
Election, the manner and extent to which Elections are to be taken into account
in making the determinations prescribed by Section 1.5, the issuance and
delivery of certificates for Purchaser Stock into which Company Shares are
converted in the Merger and the payment of cash for Company Shares converted
into
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the right to receive the Cash Consideration in the Merger.
1.5. Issuance of Purchaser Stock and Payment of Cash Consideration;
Proration. The manner in which each Company Share (other than Dissenting Shares
and Company Shares to be canceled as set forth in Section 1.3(d)) shall be
converted into Purchaser Stock or the right to receive the Cash Consideration on
the Effective Date shall be as set forth in this Section 1.5. All references to
"outstanding" Company Shares in this Section 1.5 shall mean all Company Shares
outstanding immediately prior to the Effective Time minus Company Shares owned
by Purchaser or by any direct or indirect wholly-owned subsidiary of Purchaser.
(a) As is more fully set forth below, the number of Company Shares to
be converted into Purchaser Stock in the Merger pursuant to this Agreement shall
be equal as nearly as practicable to 65% of all outstanding Company Shares and
the number of Company Shares to be converted into the right to receive the Cash
Consideration in the Merger pursuant to this Agreement shall be equal as nearly
as practicable to 35% of all outstanding Company Shares.
(b) If Stock Elections are received for a number of Company Shares
that is 65% or less of the outstanding Company Shares, each Company Share
covered by a Stock Election shall be converted in the Merger into 0.5816 of a
share of Purchaser Stock (the "Conversion Fraction"). The parties hereto
acknowledge that the Conversion Fraction was based on an agreed upon value of
$9.00 per share of Purchaser Stock. In the event that between the date of this
Agreement and the Effective Time, the issued and outstanding shares of Purchaser
Stock shall have been affected or changed into a different number of shares or a
different class of shares as a result of a stock split, reverse stock split,
stock dividend, spin-off, extraordinary dividend, recapitalization,
reclassification or other similar transaction, the Conversion Fraction shall be
appropriately adjusted.
(c) If Stock Elections are received for more than 65% of the
outstanding Company Shares, each Non-Electing Company Share (as defined in
Section 1.5(g)) and each Company Share for which a Cash Election has been
received shall be converted into the right to receive the Cash Consideration in
the Merger, and the Company Shares for which Stock Elections have been received
shall be converted into Purchaser Stock and the right to receive the Cash
Consideration in the following manner:
(1) The Exchange Agent will distribute to each holder of
Company Shares as to which a Stock
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Election has been made a number of shares of Purchaser Stock equal to the
Conversion Fraction for a fraction of such Company Shares, the numerator of
which fraction shall be 65% of the number of then outstanding Company Shares and
the denominator of which shall be the aggregate number of Company Shares as to
which Stock Elections have been made.
(2) Company Shares covered by a Stock Election and not fully
converted into the right to receive Purchaser Stock as set forth in
clause (1) above shall be converted in the Merger into the right to
receive the Cash Consideration for each such Company Share, in an
amount to offset the reduction of shares of Purchaser Stock affected
pursuant to clause (1) above.
(d) If Cash Elections are received for a number of Company Shares
that is 35% or less of the outstanding Company Shares, each Company Share
covered by a Cash Election shall be converted in the Merger into the right to
receive the Cash Consideration.
(e) If Cash Elections are received for a number of Company Shares
that is more than 35% of the outstanding Company Shares, each Non-Electing
Company Share (as defined in Section 1.5(g)) and each Company Share for which a
Stock Election has been received shall be converted in the Merger into a
fraction of a share of Purchaser Stock equal to the Conversion Fraction, and the
Company Shares for which Cash Elections have been received shall be converted
into the right to receive the Cash Consideration and Purchaser Stock in the
following manner:
(1) The Exchange Agent will distribute to each holder of
Company Shares as to which a Cash Election has been made the Cash
Consideration for a fraction of such Company Shares, the numerator of
which fraction shall be 35% of the number of then outstanding Company
Shares and the denominator of which shall be the aggregate number of
Company Shares covered by Cash Elections.
(2) Company Shares covered by a Cash Election and not fully
converted into the right to receive the Cash Consideration as set
forth in clause (1) above shall be converted in the Merger into the
right to receive a number of shares of Purchaser
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Stock equal to the Conversion Fraction for each such Company Share to
offset the reduction in Cash Consideration affected pursuant to
clause (1) above.
(f) If Non-Electing Company Shares are not converted under either
Section 1.5(c) or Section 1.5(e), the Exchange Agent shall convert each
Non-Electing Company Share into such combination of Purchaser Stock and Cash
Consideration such that the sum of the number of Company Shares converted into
cash pursuant to this Section 1.5(f) and the number of Company Shares for which
Cash Elections have been received is as close as practicable to 35% of the
outstanding Company Shares. The portion of each Non-Electing Company Share not
so converted into the right to receive the Cash Consideration pursuant to clause
(i) above shall be converted in the Merger into a fraction of a share of
Purchaser Stock equal to the Conversion Fraction.
(g) For the purposes of this Section 1.5, outstanding Company Shares
as to which an Election is not in effect at the Election Deadline shall be
called "Non-Electing Company Shares." If Purchaser and the Company shall
determine that any Election is not properly made with respect to any Company
Shares, such Election shall be deemed to be not in effect, and the Company
Shares covered by such Election shall, for purposes hereof, be deemed to be
Non-Electing Company Shares.
(h) Notwithstanding anything to the contrary contained herein, no
certificates or scrip representing fractional shares of Purchaser Stock shall be
issued upon the surrender for exchange of Certificates, no dividend or
distribution with respect to Company Shares shall be payable on or with respect
to any fractional share and such fractional share interests shall not entitle
the owner thereof to vote or to any other rights of a stockholder of Purchaser.
In lieu of any such fractional share of Purchaser Stock, Purchaser shall pay to
each former stockholder of the Company who otherwise would be entitled to
receive a fractional share of Purchaser Stock an amount in cash determined by
multiplying (i) the Purchaser Share Price by (ii) the fractional interest in a
share of Purchaser Stock to which such holder would otherwise be entitled.
1.6. Issuance of Purchaser Stock. Immediately prior to the Effective
Time, Purchaser shall deliver, in trust, to the
Exchange Agent certificates
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representing an aggregate number of shares of Purchaser Stock as nearly as
practicable equal to the number of shares to be converted into Purchaser Stock
as determined in Section 1.5. As soon as practicable after the Effective Time,
each holder of Company Shares converted into Purchaser Stock pursuant to Section
1.3(a), upon surrender to the Exchange Agent (to the extent not previously
surrendered with a Form of Election) of one or more certificates for such
Company Shares for cancellation, shall be entitled to receive certificates
representing the number of shares of Purchaser Stock into which such Company
Shares shall have been converted in the Merger. No dividends or distributions
that have been declared will be paid to persons entitled to receive certificates
for shares of Purchaser Stock until such persons surrender their certificates
for Company Shares, at which time all such dividends shall be paid. In no event
shall the persons entitled to receive such dividends be entitled to receive
interest on such dividends. If any certificate for such Purchaser Stock is to be
issued in a name other than that in which the certificate for Company Shares
surrendered in exchange therefor is registered, it shall be a condition of such
exchange that the person requesting such exchange shall pay to the Exchange
Agent any transfer or other taxes required by reason of issuance of certificates
for such Purchaser Stock in a name other than the registered holder of the
certificate surrendered, or shall establish to the satisfaction of the Exchange
Agent that such tax has been paid or is not applicable. Notwithstanding the
foregoing, neither the Exchange Agent nor any party hereto shall be liable to a
holder of Company Shares for any Purchaser Stock or dividends thereon delivered
to a public official pursuant to any applicable abandoned property, escheat or
similar law.
1.7. Payment of Cash Consideration. Immediately following the
Effective Time, Purchaser shall deposit in trust with the Exchange Agent an
amount in cash up to an amount equal to the Purchaser Share Price multiplied by
the number of Company Shares to be converted into the right to receive the Cash
Consideration as determined in Section 1.5. As soon as practicable after the
Effective Time, the Exchange Agent shall distribute to holders of Company Shares
converted into the right to receive the Cash Consideration pursuant to Section
1.3(a), upon surrender to the Exchange Agent (to the extent not previously
surrendered with a Form of Election) of one or more certificates for such
Company Shares for cancellation, a bank check for an amount equal to the
Purchaser Share Price times the number of Company Shares so converted. In no
event shall the holder of any such surrendered certificates be entitled to
receive interest on any of the Cash Consideration to be received in the Merger.
If such check is to be issued in the name of a person other than the person in
whose name the certificates for the Company Shares surrendered for exchange
therefor are registered, it shall be a condition of the exchange that the person
requesting such exchange shall pay to the Exchange Agent any transfer or other
taxes required by reason of issuance of such check to a person other than the
registered holder of the certificates surrendered, or shall establish to the
satisfaction of the Exchange Agent that such tax has been paid or is not
applicable. Notwithstanding the foregoing, neither the Exchange Agent nor any
party hereto shall be liable to a holder of Company Shares for any amount paid
to a public official pursuant to any applicable abandoned property, escheat or
similar law.
1.8. Options. (a) Except as provided in paragraph (b) below with
respect to
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the Company's 1996 Employee Stock Purchase Plan, as amended (the "Company
ESPP"), at the Effective Time, each then outstanding and unexercised option (the
"Company Options") exercisable for shares of Company Stock shall become fully
vested and exercisable (by virtue of their terms) and Purchaser shall cause each
holder of a Company Option to receive, by virtue of the Merger and without any
action on the part of the holder thereof, options exercisable for shares of
Purchaser Stock ("Purchaser Replacement Options") having the same terms and
conditions as the Company Options (including such terms and conditions as may be
incorporated by reference into the agreements evidencing the Company Options
pursuant to the plans or arrangements pursuant to which such Company Options
were granted) except that the exercise price and the number of shares issuable
upon exercise shall be divided and multiplied, respectively, by the Conversion
Fraction, and rounded to the nearest whole cent or number, respectively.
Purchaser shall use all reasonable efforts to ensure that any Company Options
that qualified as incentive stock options under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code") prior to the Effective Time
continue to so qualify after the Effective Time. Purchaser shall take all
corporate action necessary to reserve for issuance a sufficient number of shares
of Purchaser Stock for delivery upon the exercise of Purchaser Replacement
Options after the Effective Time. Promptly after the Effective Time, Purchaser
shall file or cause to be filed all registration statements on Form S-8 or other
appropriate form as may be necessary in connection with the purchase and sale of
Purchaser Stock contemplated by such Purchaser Replacement Options subsequent to
the Effective Time, and shall maintain the effectiveness of such registration
statements (and maintain the current status of the prospectus or prospectuses
contained therein) for so long as any of the Purchaser Replacement Options
registered thereunder remain outstanding. As soon as practicable after the
Effective Time, Purchaser shall qualify under applicable state securities laws
the issuance of such shares of Purchaser Stock issuable upon exercise of
Purchaser Replacement Options. Purchaser's Board of Directors shall take all
actions necessary on the part of Purchaser to enable the acquisition of
Purchaser Stock, Purchaser Replacement Options and subsequent transactions in
Purchaser Stock after the Effective Time pursuant to Purchaser Replacement
Options by persons subject to the reporting requirements of Section 16(a) of the
Securities Exchange Act (as defined below) to be exempt from the application of
Section 16(b) of the Securities Exchange Act, to the extent permitted
thereunder.
(b) The current offerings in process as of the date of this Agreement
under the Company ESPP shall continue, and Company Shares shall be issued to
participants thereunder on the next currently scheduled purchase dates
thereunder occurring after the date hereof as provided under, and subject to the
terms and conditions of, the Company ESPP. The Company may, consistent with past
practice, commence new offering periods under the Company ESPP on or after the
date hereof and prior to the Effective Time at an exercise price for each such
offering not less than as is required under the Company ESPP. Immediately prior
to the Effective Time, pursuant to the Company ESPP, all offerings under the
Company ESPP shall be terminated, and each participant shall be deemed to have
purchased immediately prior to the Effective Time, to the extent of payroll
deductions accumulated by such participant as of such offering period end, the
number of whole shares of Company Stock at a per share price determined pursuant
to the provisions of the Company ESPP, and each participant shall receive a cash
payment equal to the
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balance, if any, of such accumulated payroll deductions remaining after such
purchase of such shares. As of the Effective Time, each participant shall
receive, by virtue of the Merger, the number of whole shares of Purchaser Stock
or cash into which the shares of Company Stock such participant has so purchased
under the Company ESPP have been converted pursuant to the Merger as provided in
Section 1.3(a) hereof, plus the cash value of any fraction of a share of
Purchaser Common Stock as provided in Section 1.5(h) hereof, plus any dividends
or distributions as provided in Section 1.6. The Company ESPP and all purchase
rights thereunder shall terminate effective as of the Effective Time.
1.9. Dissenting Shares. Notwithstanding any provision of this
Agreement to the contrary, each outstanding share of Company Stock, the holder
of which has demanded and perfected such holder's right to dissent from the
Merger and to be paid the fair value of such shares in accordance with Sections
302A.471 and 302A.473 of the MBCA and, as of the Effective Time, has not
effectively withdrawn or lost such dissenters' rights ("Dissenting Shares"),
shall not be converted into or represent a right to receive the Purchaser Stock
into which shares of Company Stock are converted, or to receive cash, pursuant
to Section 1.5 hereof, but the holder thereof shall be entitled only to such
rights as are granted by the MBCA. Purchaser shall cause the Company to make all
payments to holders of shares of Company Stock with respect to such demands in
accordance with the MBCA. The Company shall give Purchaser (i) prompt written
notice of any notice of intent to demand fair value for any shares of Company
Stock, withdrawals of such notices, and any other instruments served pursuant to
the MBCA and received by the Company, and (ii) the opportunity to conduct
jointly all negotiations and proceedings with respect to demands for fair value
for shares of Company Stock under the MBCA. The Company shall not, except with
the prior written consent of Purchaser or as otherwise required by law,
voluntarily make any payment with respect to any demands for fair value for
shares of Company Stock or offer to settle or settle any such demands.
1.10. Articles of Incorporation and Bylaws. Subject to Section 5.7
hereof, at and after the Effective Time until the same have been duly amended,
(i) the Articles of Incorporation of the Surviving Corporation shall be
identical to the Articles of Incorporation of Merger Sub in effect at the
Effective Time, except that the name of the Surviving Corporation shall be
Rainforest Cafe, Inc. (or a name comparable thereto), and (ii) and the Bylaws of
the Surviving Corporation shall be identical to the Bylaws of Merger Sub in
effect at the Effective Time.
1.11. Stock Transfer Books. At the Effective Time, the stock transfer
books of the Company shall be closed and no transfer of Company Shares shall
thereafter be made. If, after the Effective Time, Certificates are presented to
the Surviving Corporation, they shall be canceled and exchanged for cash and/or
certificates representing Purchaser Stock pursuant to this Article I.
1.12. Directors and Officers. At and after the Effective Time, the
directors of Merger Sub immediately prior to the Effective Time shall be the
directors of the Surviving
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Corporation, and the officers of the Merger Sub immediately prior to the
Effective Time shall be the officers of the Surviving Corporation, in each case
until their successors are elected or appointed and qualified. If, at the
Effective Time, a vacancy shall exist on the Board of Directors or in any office
of the Surviving Corporation, such vacancy may thereafter be filled in the
manner provided by law.
1.13. Other Effects of Merger. The Merger shall have all further
effects as specified in the applicable provisions of the MBCA and the DGCL.
1.14. Registration Statement Prospectus/Proxy Statement.
(a) For the purposes of (i) registering Purchaser Stock for issuance
to holders of the Company Shares in connection with the Merger with the
Securities and Exchange Commission ("SEC") under the Securities Act of 1933, as
amended, and the rules and regulations thereunder (the "Securities Act"), and
complying with applicable state securities laws, and (ii) holding the meeting of
the Company's shareholders to vote upon the approval of this Agreement and the
Merger and the other transactions contemplated hereby (collectively, the
"Company Proposals"), Purchaser and the Company will cooperate in the
preparation of a registration statement on Form S-4 (such registration
statement, together with any and all amendments and supplements thereto, being
herein referred to as the "Registration Statement"), including a
prospectus/proxy statement satisfying all requirements of applicable state
securities laws, the Securities Act and the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder (the "Securities Exchange
Act"). Such prospectus/proxy statement in the form mailed by the Company to its
shareholders, together with any and all amendments or supplements thereto, is
herein referred to as the "Prospectus/Proxy Statement."
(b) The Company will furnish Purchaser with such information
concerning the Company and its subsidiaries as is necessary in order to cause
the Prospectus/Proxy Statement, insofar as it relates to the Company and its
subsidiaries, to comply with applicable Law. None of the information relating to
the Company and its subsidiaries supplied by the Company for inclusion in the
Prospectus/Proxy Statement will be false or misleading with respect to any
material fact or will omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Company agrees
promptly to advise Purchaser if, at any time prior to the meeting of the
shareholders of the Company, referenced herein, any information provided by it
in the Prospectus/Proxy Statement is or becomes incorrect or incomplete in any
material respect and to provide Purchaser with the information needed to correct
such inaccuracy or omission. The Company will furnish Purchaser with such
supplemental information as may be necessary in order to cause the
Prospectus/Proxy Statement, insofar as it relates to the Company and its
subsidiaries, to comply with applicable Law after the mailing thereof to the
shareholders of the Company.
(c) Purchaser will furnish the Company with such information
concerning
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Purchaser and its subsidiaries as is necessary in order to cause the
Prospectus/Proxy statement, insofar as it relates to Purchaser and its
subsidiaries, to comply with applicable Law. None of the information relating to
Purchaser and its subsidiaries supplied by Purchaser for inclusion in the
Prospectus/Proxy Statement will be false or misleading with respect to any
material fact or will omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Purchaser agrees
promptly to advise the Company if, at any time prior to the meeting of
shareholders of the Company referenced herein, any information provided by it in
the Prospectus/Proxy Statement is or becomes incorrect or incomplete in any
material respect and to provide the Company with the information needed to
correct such inaccuracy or omission. Purchaser will furnish the Company with
such supplemental information as may be necessary in order to cause the
Prospectus/Proxy Statement, insofar as it relates to Purchaser and its
subsidiaries, to comply with applicable Law after the mailing thereof to the
shareholders of the Company.
(d) The Company and Purchaser agree to cooperate in making any
preliminary filings of the Prospectus/Proxy Statement with the SEC, as promptly
as practicable, pursuant to Rule 14a-6 under the Securities Exchange Act.
(e) Purchaser will file the Registration Statement with the SEC and
appropriate materials with applicable state securities agencies as promptly as
practicable and will use all reasonable efforts to cause the Registration
Statement to become effective under the Securities Act and all such state filed
materials to comply with applicable state securities Laws. Purchaser shall
provide the Company for its review a copy of the Registration Statement at least
such amount of time prior to each filing thereof as is customary in transactions
of the type contemplated hereby and shall not make any filing with the SEC
without the prior written consent of the Company, which consent shall not be
unreasonably withheld or delayed. The Company authorizes Purchaser to utilize in
the Registration Statement and in all such state filed materials, the
information concerning the Company and its subsidiaries provided to Purchaser in
connection with, or contained in, the Prospectus/Proxy Statement. Purchaser
promptly will advise the Company when the Registration Statement has become
effective, and of any supplements or amendments thereto, and Purchaser will
furnish the Company with copies of all documents. Except for the
Prospectus/Proxy Statement or the preliminary prospectus/proxy statement,
neither Purchaser nor the Company shall distribute any written material that
might constitute a "prospectus" relating to the Merger or the Company Proposals
within the meaning of the Securities Act or any applicable state securities Law
without the prior written consent of the other party.
1.15. Tax-Free Reorganization. The parties intend that the Merger
qualify as a reorganization within the meaning of Section 368(a) of the Code.
None of the parties will knowingly take any action that would cause the Merger
to fail to qualify as a reorganization within the meaning of Section 368(a) of
the Code.
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1.16. Additional Actions. If, at any time after the Effective Time,
the Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of Merger Sub or the Company or otherwise carry out this
Agreement, the officers and directors of the Surviving Corporation shall be
authorized to execute and deliver, in the name and on behalf of Merger Sub or
the Company, all such deeds, bills of sale, assignments and assurances and to
take and do, in the name and on behalf of Merger Sub or the Company, all such
other actions and things as may be necessary or desirable to vest, perfect or
confirm any and all right, title and interest in, to and under such rights,
properties or assets in the Surviving Corporation or otherwise to carry out this
Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedule from the Company to Purchaser to
be delivered upon the execution of this Agreement, which sets forth certain
disclosures concerning the Company and its business (the "Company Disclosure
Schedule"), each section of which only qualifies the correspondingly numbered
representation or warranty, the Company hereby represents and warrants to
Purchaser and Merger Sub as follows:
2.1. Due Incorporation and Good Standing. The Company and each
subsidiary of the Company (the "Company Subsidiaries") is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted. The Company and each of the Company Subsidiaries is duly
qualified or licensed and in good standing to do business in each jurisdiction
in which the character of the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification or licensing
necessary, except where the failure to be so duly qualified or licensed and in
good standing would not be reasonably likely to have a material adverse effect
on the business, assets, prospects, condition (financial or otherwise),
liabilities or the results of operations of the Company and its subsidiaries
taken as a whole, except in each case for any such effects resulting from,
arising out of, or relating to (i) general business or economic conditions, (ii)
conditions generally affecting the industry in which the Company competes, or
(iii) the taking of any action contemplated by this Agreement (a "Company
Material Adverse Effect"). The Company has heretofore made available to
Purchaser accurate and complete copies of the Articles of Incorporation and
Bylaws, as currently in effect, of the Company.
2.2. Capitalization. As of the date hereof, the authorized capital
stock of the Company consists of 50 million shares of capital stock. As of
February 8, 2000, 23,272,232
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shares of Company Stock were issued and outstanding. No other shares of capital
stock of the Company is authorized or issued. As of February 8, 2000, a total of
4,966,716 Company Shares are reserved for future issuance to employees and
directors upon exercise of any Company Options, warrants or other rights to
purchase or acquire any shares of capital stock of the Company (including
restricted stock, stock equivalents and stock units). As of February 8, 2000,
there were 1,452,387 Company Options with an exercise price of $5.625 or less.
Since February 2, 2000, the Company has not issued or granted additional Company
Options. All issued and outstanding shares of the Company Stock are, and all
shares which may be issued upon exercise of then outstanding Company Options
will be when issued, duly authorized, validly issued, fully paid and
non-assessable. Except as otherwise contemplated by this Agreement, as of the
date hereof there are no outstanding rights, subscriptions, warrants, puts,
calls, unsatisfied preemptive rights, options or other agreements of any kind
relating to any of the outstanding, authorized but unissued or unauthorized
shares of capital stock or any other security of the Company, and there is no
authorized or issued security of any kind convertible into or exchangeable, for
any such capital stock or other security.
2.3. Subsidiaries. Section 2.3 of the Company Disclosure Schedule
sets forth the name and jurisdiction of incorporation or organization of each
Company Subsidiary, each of which is wholly owned by the Company except as
otherwise indicated in said Section 2.3 of the Company Disclosure Schedule. All
of the capital stock and other interests of the Company Subsidiaries so held by
the Company are owned by it or a Company Subsidiary as indicated in said Section
2.3 of the Company Disclosure Schedule, free and clear of any claim, lien,
encumbrance, security interest or agreement with respect thereto. All of the
outstanding shares of capital stock in each of the Company Subsidiaries directly
or indirectly held by the Company are duly authorized, validly issued, fully
paid and non-assessable and were issued free of preemptive rights and in
compliance with applicable Laws. No equity securities or other interests of any
of the Company Subsidiaries are or may become required to be issued or purchased
by reason of any options, warrants, rights to subscribe to, puts, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of any capital stock of any Company
Subsidiary, and there are no contracts, commitments, understandings or
arrangements by which any Company Subsidiary is bound to issue additional shares
of its capital stock, or options, warrants or rights to purchase or acquire any
additional shares of its capital stock or securities convertible into or
exchangeable for such shares.
2.4. Authorization; Binding Agreement. The Company has all requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby,
including, but not limited to, the Merger, have been duly and validly authorized
by the Company's Board of Directors, and no other corporate proceedings on the
part of the Company or any Company Subsidiary are necessary to authorize the
execution and delivery of this Agreement or to consummate the transactions
contemplated hereby (other than the requisite approval of this Agreement and the
Merger by the
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<PAGE> 20
shareholders of the Company in accordance with the MBCA). This Agreement has
been duly and validly executed and delivered by the Company and constitutes the
legal, valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except to the extent that enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights generally and
by principles of equity regarding the availability of remedies ("Enforceability
Exceptions"). The Company's Board of Directors (including all of the
disinterested directors of the Company's Board of Directors) has approved for
purposes of Sections 302A.613 and 302A.673 of the MBCA (a) this Agreement and
the Stockholder Agreements and the transactions contemplated hereby and thereby,
and (b) the formation of any "group" for purposes of Section 13(d)(3) of the
Securities Exchange Act that may be deemed to exist as a result of the execution
and delivery of the Stockholder Agreements or otherwise in connection with the
transactions contemplated by this Agreement and the Stockholder Agreements.
2.5. Governmental Approvals. No consent, approval, waiver or
authorization of, notice to or declaration or filing with ("Consent"), any
nation or government, any state or other political subdivision thereof, any
entity, authority or body exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government,
including, without limitation, any governmental or regulatory authority, agency,
department, board, commission, administration or instrumentality, any court,
tribunal or arbitrator or any self regulatory organization ("Governmental
Authority") on the part of the Company or any of the Company Subsidiaries is
required in connection with the execution or delivery by the Company of this
Agreement or the consummation by the Company of the transactions contemplated
hereby other than (i) the filing of the Articles of Merger with the Secretary of
State of the State of Minnesota in accordance with the MBCA and the filing of
the Certificate of Merger with the Secretary of State of the State of Delaware
in accordance with the DGCL, (ii) filings with the SEC, state securities laws
administrators and the National Association of Securities Dealers, Inc.
("NASD"), (iii) filings under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the rules and regulations promulgated thereunder (the
"HSR Act"), (iv) such filings as may be required in any jurisdiction where the
Company is qualified or authorized to do business as a foreign corporation in
order to maintain such qualification or authorization and (v) those Consents
that, if they were not obtained or made, would not be reasonably likely to have
a Company Material Adverse Effect.
2.6. No Violations. The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and compliance by the
Company with any of the provisions hereof will not (i) conflict with or result
in any breach of any provision of the Articles of Incorporation or Bylaws or
other governing instruments of the Company or any of the Company Subsidiaries,
(ii) except as set forth on Section 2.6 of the Company Disclosure Schedule,
require any Consent under or result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any agreement or other instrument to which the
Company or any Company Subsidiaries are parties or by which
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their respective assets are bound, (iii) result in the creation or imposition of
any lien or encumbrance of any kind upon any of the assets of the Company or any
Company Subsidiary or (iv) subject to obtaining the Consents from Governmental
Authorities referred to in Section 2.5 hereof, contravene any applicable
provision of any statute, law, rule or regulation or any order, decision,
injunction, judgment, award or decree ("Law") to which the Company or any
Company Subsidiary or its or any of their respective assets or properties are
subject, except, in the case of clauses (ii), (iii) and (iv) above, for any
deviations from the foregoing which would not be reasonably likely to have a
Company Material Adverse Effect.
2.7. Securities Filings. (a) The Company has made available to
Purchaser true and complete copies of (i) its Annual Reports on Form 10-K for
the years ended January 3, 1999, December 28, 1997 and December 29, 1996 as
filed with the SEC, (ii) its proxy statements relating to all of the meetings of
shareholders (whether annual or special) of the Company since December 29, 1996,
as filed with the SEC, and (iii) all other reports, statements and registration
statements and amendments thereto (including, without limitation, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K, as amended) filed by the
Company with the SEC since December 29, 1996. The reports and statements set
forth in clauses (i) through (iii) above, and those subsequently provided or
required to be provided pursuant to this Section 2.7, are referred to
collectively herein as the "Company Securities Filings." As of their respective
dates, and as of the date of the last amendment thereof, if amended after
filing, none of the Company Securities Filings contained or, as to the Company
Securities Filings subsequent to the date hereof, will contain, any untrue
statement of a material fact or omitted or, as to the Company Securities Filings
subsequent to the date hereof, will omit, to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each of the Company
Securities Filings at the time of filing and as of the date of the last
amendment thereof, if amended after filing, complied or, as to the Company
Securities Filings subsequent to the date hereof, will comply in all material
respects with the Securities Exchange Act or the Securities Act, as applicable.
2.8. Company Financial Statements. The audited consolidated financial
statements and unaudited interim financial statements of the Company included in
the Company Securities Filings (the "Company Financial Statements") have been
prepared or will be prepared in accordance with generally accepted accounting
principles applied on a consistent basis (except as may be indicated therein or
in the notes thereto) and present or will present fairly, in all material
respects, the financial position of the Company and its subsidiaries as at the
dates thereof and the results of their operations and cash flows for the periods
then ended, subject, in the case of the unaudited interim financial statements,
to normal year-end audit adjustments, any other adjustments described therein
and the fact that certain information and notes have been condensed or omitted
in accordance with the Securities Exchange Act. All accounts receivable of the
Company, whether reflected in the Company Financial Statements or otherwise,
represent sales actually made in the ordinary course of business, and are
current and collectible net of any reserves shown in the Company Financial
Statements filed prior to the date hereof.
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2.9. Absence of Certain Changes or Events; No Undisclosed
Liabilities. Except as set forth in Section 2.9 of the Company Disclosure
Schedule, since January 3, 1999, through the date of this Agreement, there has
not been: (i) any event that has had or would reasonably be expected to have a
Company Material Adverse Effect, (ii) any declaration, payment or setting aside
for payment of any dividend or other distribution or any redemption or other
acquisition of any shares of capital stock or securities of the Company by the
Company or any Company Subsidiary, (iii) any material damage or loss to any
material asset or property, whether or not covered by insurance, or (iv) any
change by the Company in accounting principles or practices. Except as set forth
in Section 2.9 of the Company Disclosure Schedule, since June 30, 1999, through
the date of this Agreement, there has not been any action taken by the Company
or any of the Company Subsidiaries that, if taken during the period from the
date of this Agreement through the Effective Time, would constitute a breach of
Section 4.1. Except for those liabilities that are fully reflected or reserved
against on the balance sheet of the Company included in its January 3, 1999 Form
10-K and for liabilities incurred in the ordinary course of business consistent
with past practice, since January 3, 1999, neither the Company nor any of the
Company Subsidiaries has incurred any liability of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and whether due or to become
due) that, either individually or in the aggregate, has had or would be
reasonably likely to have a Company Material Adverse Effect.
2.10. Compliance with Laws. The business of the Company and each of
the Company Subsidiaries has been operated in compliance with all Laws
applicable thereto, except for any instances of non-compliance which would not
be reasonably likely to have a Company Material Adverse Effect.
2.11. Permits. (i) The Company and each of the Company Subsidiaries
have all permits (including signage permits) certificates, licenses, approvals
and other authorizations required in connection with the operation of their
respective businesses (collectively, "Company Permits"), (ii) neither the
Company nor any of the Company Subsidiaries is in violation of any Company
Permit and (iii) no proceedings are pending or, to the knowledge of the Company,
threatened, to revoke or limit any Company Permit, except, in each case, those
the absence or violation of which would not be reasonably likely to have a
Company Material Adverse Effect.
2.12. Litigation. Except as disclosed in the Section 2.12 of the
Company Disclosure Schedule, there is no suit, action or proceeding
("Litigation") pending or, to the knowledge of the Company, threatened against
the Company or any of the Company Subsidiaries which, individually or in the
aggregate, would be reasonably likely to have a Company Material Adverse Effect,
nor is there any judgment, decree, injunction, rule or order of any Governmental
Authority outstanding against the Company or any of the Company Subsidiaries
which, individually or in the aggregate, would be reasonably likely to have a
Company Material Adverse Effect.
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2.13. Contracts.
(a) Neither the Company nor any of the Company Subsidiaries is a
party or is subject to any franchise, management, royalty, license, lease or
joint venture agreement or any material note, bond, mortgage, indenture,
contract, lease, license, agreement or instrument ("Company Material Contract")
that is not so listed in Section 2.13(a) of the Company Disclosure Schedule. All
such Company Material Contracts are valid and binding and are in full force and
effect and enforceable against the Company or such Company Subsidiary in
accordance with their respective terms, subject to the Enforceability
Exceptions. Neither the Company nor any of the Company Subsidiaries is in
violation or breach of or default under any such Company Material Contract where
such violation or breach would be reasonably likely to have a Company Material
Adverse Effect.
(b) Except as is listed in Section 2.13(b) of the Company Disclosure
Schedule, neither the Company nor any Company Subsidiary is a party to, or has
any of its assets or properties subject to, any agreement, arrangement or
understanding (written or oral) with any other person (including a Company
Subsidiary or an affiliate of the Company or of any Company Subsidiary), which
(i) provides capital, surplus, balance sheet or any other form of economic or
financial support to such other person, (ii) guarantees the obligations of, or
performance of any acts, by such other person, or (iii) imposes legal liability
on the Company or any Company Subsidiary for any payments (contingent or
otherwise) under any note, guarantee, debt, bond, mortgage, indenture, contract,
lease, license, agreement or instrument.
2.14. Employee Benefit Plans. (a) Section 2.14 of the Company
Disclosure Schedule contains a complete and accurate list of all material
Benefit Plans (as defined below) maintained or contributed to by the Company or
any of the Company Subsidiaries ("Company Benefit Plan"). A "Benefit Plan" shall
include (i) an employee benefit plan as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended, together with all
regulations thereunder ("ERISA"), and (ii) whether or not described in the
preceding clause, any pension, profit sharing, stock bonus, deferred or
supplemental compensation, retirement, thrift, stock purchase or stock option
plan or any other compensation, welfare, fringe benefit or retirement plan,
program, policy or arrangement providing for benefits for or the welfare of any
or all of the current or former employees or agents of the Company or any of its
subsidiaries or their beneficiaries or dependents; provided that Benefit Plans
shall not include any multiemployer plan, as defined in Section 3(37) of ERISA
(a "Multiemployer Plan"). Each of the Company Benefit Plans has been maintained
in compliance in all material respects with its terms and all applicable Law.
Neither the Company nor any of the Company Subsidiaries contributes to, or has
any outstanding liability with respect to, any Multiemployer Plan.
(b) The Company has identified in Section 2.14(b) of the Company
Disclosure Schedule and has made available to Purchaser true and complete copies
of (1) all severance, employment consulting and other agreements with directors,
executive officers, key employees
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or consultants of the Company; (2) all severance programs and policies of each
of the Company and each Company Subsidiary with or relating to its employees or
directors; and (3) all plans, programs, agreements and other arrangements of
each of the Company and each Company Subsidiary with or relating to its
employees which contain change in control provisions. Except as set forth in
Section 2.14(b) of the Company Disclosure Schedule (which includes the amount of
the payments due under such agreements, programs, policies, plans, or other
arrangements referred to in the preceding sentence), neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will (either alone or in conjunction with any other event, such as
termination of employment) (A) result in any material payment (including,
without limitation, severance, unemployment compensation, golden parachute or
otherwise) becoming due to any director or any employee of the Company or any
Company Subsidiary or affiliate from the Company or any Company Subsidiary or
affiliate under any Company Benefit Plan or otherwise, (B) materially increase
any benefits otherwise payable under any Company Benefit Plan or (C) result in
any acceleration of the time of payment or vesting of any material benefits.
(c) Except as set forth in Section 2.14(c) of the Company Disclosure
Schedule, neither the Company nor any Company Subsidiary is a party to any
contract, plan, or arrangement under which it is obligated to make or to
provide, or could become obligated to make or to provide, a payment or benefit
that would be nondeductible by virtue of Section 162(m) or 280G of the Code.
2.15. Taxes and Returns. (a) The Company and each of its subsidiaries
has timely filed, or caused to be timely filed, all Tax Returns (as defined
below) required to be filed by it, and has paid, collected or withheld, or
caused to be paid, collected or withheld, all Taxes (as defined below) required
to be paid, collected or withheld, other than such Taxes for which adequate
reserves in the Company Financial Statements have been established. There are no
claims or assessments pending against the Company or any of the Company
Subsidiaries for any alleged deficiency in any Tax, and the Company has not been
notified in writing of any proposed Tax claims or assessments against the
Company or any of the Company Subsidiaries (other than, in each case, claims or
assessments for which adequate reserves in the Company Financial Statements have
been established or which are being contested in good faith or are immaterial in
amount). Neither the Company nor any of the Company Subsidiaries has any
outstanding waivers or extensions of any applicable statute of limitations to
assess any material amount of Taxes. There are no outstanding requests by the
Company or any of the Company Subsidiaries for any extension of time within
which to file any Tax Return or within which to pay any Taxes shown to be due on
any return. There are no liens for material amounts of Taxes on the assets of
the Company or any of the Company Subsidiaries except for statutory liens for
current Taxes not yet due and payable.
(b) None of the Company or any of the Company Subsidiaries has taken
or agreed to take any action that would prevent the Merger from constituting a
reorganization qualifying under the provisions of Section 368(a) of the Code.
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(c) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby (either alone or in combination with
another event) will not result in any payment (whether of severance pay,
unemployment compensation, golden parachute, bonus or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits or
obligation to fund benefits with respect to any employee or director of the
Company or any of the Company Subsidiaries.
(d) None of the Company or any of the Company Subsidiaries has been a
member of any consolidated, combined, unitary or affiliated group of
corporations for any Tax purposes other than a group of which the Company is or
was the common parent corporation.
(e) None of the Company or any of the Company Subsidiaries has made
any change in accounting method or received a ruling from, or signed an
agreement with, any taxing authority that could reasonably be expected to have a
Company Material Adverse Effect following the Closing.
(f) None of Company or any of the Company Subsidiaries is currently
being audited by any taxing authority and none of the Company or any of its
Subsidiaries has been notified by any tax authority that any such audit is
contemplated or pending.
(g) For purposes of this Agreement, the term "Tax" shall mean any
tax, custom, duty, governmental fee or other like assessment or charge of any
kind whatsoever, imposed by any Governmental Authority (including, but not
limited to, any federal, state, local, foreign or provincial income, gross
receipts, property, sales, use, license, excise, franchise, employment, payroll,
alternative or added minimum, ad valorem, transfer or excise tax) together with
any interest, addition or penalty imposed thereon. The term "Tax Return" shall
mean a report, return or other information (including any attached schedules or
any amendments to such report, return or other information) required to be
supplied to or filed with a Governmental Authority with respect to any Tax,
including an information return, claim for refund, amended return or declaration
or estimated Tax.
2.16. Intellectual Property. (a) The Company or the Company
Subsidiaries own, or are licensed or otherwise possess legally enforceable
rights to use all: (i) trademarks and service marks (registered or
unregistered), trade dress, trade names and other names and slogans embodying
business goodwill or indications of origin, all applications or registrations in
any jurisdiction pertaining to the foregoing and all goodwill associated
therewith; (ii) patentable inventions, technology, computer programs and
software (including password unprotected interpretive code or source code,
object code, development documentation, programming tools, drawings,
specifications and data) and all applications and patents in any jurisdiction
pertaining to the foregoing, including re-issues, continuations, divisions,
continuations-in-part, renewals or extensions; (iii) trade secrets, including
confidential and other non-public information;
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(iv) copyrights in writings, designs, software programs, mask works or other
works, applications or registrations in any jurisdiction for the foregoing and
all moral rights related thereto; (v) databases and all database rights; and
(vi) Internet Web sites, domain names and applications and registrations
pertaining thereto that, in each case, are used in the respective businesses of
the Company or the Company Subsidiaries as currently conducted (as described in
clauses (i) through (vi) above, collectively, "Company Intellectual Property"),
except for any such failures to own, be licensed or possess that would not be
reasonably likely to have a Company Material Adverse Effect.
(b) Except as set forth on Section 2.16(b) of the Company Disclosure
Schedule, to the Company's knowledge, there are no conflicts with or
infringements of any material Company Intellectual Property by any third party
and the conduct of the businesses as currently conducted does not conflict with
or infringe any proprietary right of a third party, except for any such
conflicts or infringements that would not be reasonably likely to have a Company
Material Adverse Effect.
(c) Section 2.16 (c) of the Company Disclosure Schedule sets forth a
complete list of all material trademarks, registrations and applications
pertaining to the Company Intellectual Property owned by the Company and the
Company Subsidiaries. All such Company Intellectual Property listed is owned by
the Company and/or the Company Subsidiaries, free and clear of liens or
encumbrances of any nature.
(d) Section 2.16(d) of the Company Disclosure Schedule sets forth a
complete list of all licenses, sublicenses and other agreements in which the
Company and the Company Subsidiaries have granted rights to any person to use
the Company Intellectual Property. The Company will not, as a result of the
execution and delivery of this Agreement or the performance of its obligations
under this Agreement, be in breach of any license, sublicense or other agreement
relating to the Company Intellectual Property.
(e) The Company and each of the Company Subsidiaries own or have the
right to use all computer software currently used in and material to the
businesses, except for any failures to own or have the right to use that would
not be reasonably likely to have a Company Material Adverse Effect.
(f) All Company Intellectual Property was developed by: (i) employees
of the Company within the scope of their employment; or (ii) independent
contractors as "works- made-for-hire" as that term is defined under Section 101
of the United States copyright laws, pursuant to written agreements.
2.17. Finders and Investment Bankers. Other than pursuant to the
Piper Engagement Letter, neither the Company nor any of its officers or
directors has employed any broker or finder or otherwise incurred any liability
for any brokerage fees, commissions or finders' fees in connection with the
transactions contemplated hereby. For purposes of this
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Agreement, the term "Piper Engagement Letter" means the letter dated December
16, 1999 from U.S. Bancorp Piper Jaffray to the Company, as amended by a letter
dated February 8, 2000 from U.S. Bancorp Piper Jaffray to the Company. A true
and complete copy of the Piper Engagement Letter has been delivered by the
Company to Purchaser prior to the date hereof.
2.18. Fairness Opinion. The Company has received from U.S. Bancorp
Piper Jaffray, its financial advisor, a written opinion addressed to it for
inclusion in the Prospectus/Proxy Statement to the effect that the consideration
to be received in the Merger by the Company's shareholders is fair to the
Company's shareholders from a financial point of view.
2.19. Insurance. Section 2.19 of the Company Disclosure Schedule sets
forth a true and complete list of all insurance policies carried by, or covering
the Company and the Company Subsidiaries with respect to their businesses,
assets and properties and with respect to which records are maintained at the
Company's principal executive offices, together with, in respect of each such
policy, the amount of coverage and the deductible. The Company and the Company
Subsidiaries maintain insurance policies against all risk of a character,
including without limitation, business interruption insurance, and in such
amounts as are usually insured against by similarly situated companies in the
same or similar businesses. Each insurance policy set forth on Section 2.19 of
the Company Disclosure Schedule is in full force and effect and all premiums due
thereon have been paid in full.
2.20. Vote Required; Ownership of Purchaser Capital Stock; State
Takeover Statutes. (a) The approval of the Company Proposal by a vote of a
majority of the holders of the issued and outstanding Company Shares is the only
vote of the holders of any class or series of the Company's capital stock
necessary to approve the Merger and the transactions contemplated hereunder.
(b) Neither the Company nor any of the Company Subsidiaries
beneficially owns, either directly or indirectly, any shares of Purchaser
capital stock.
(c) The Company has taken all actions necessary under the MBCA to
approve the transactions contemplated by this Agreement and the Stockholder
Agreements. Assuming for purposes of this Section 2.20(c) that no person or
entity associated or affiliated with Purchaser is an "interested shareholder"
(as such term is defined in the MBCA) of the Company who has not continuously
been an interested shareholder of the Company during the four-year period
preceding the Merger, Section 302A.673 of the MBCA applicable to a "business
combination" does not, and will not, prohibit the transactions contemplated
hereunder, and the restrictions contained in Section 302A.671 of the MBCA
applicable to "control share acquisitions" will not prohibit the authorization,
execution, delivery and performance of this Agreement or the consummation of the
Merger by the Company. The authorization, execution and delivery of this
Agreement and the Stockholder Agreements do not, and the consummation of the
transactions contemplated hereunder and thereunder do not, and any formation of
a "group" for purposes of Section 13(d)(3) of the Securities Exchange Act in
connection with this
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Agreement and the Stockholder Agreements will not, result in a "control share
acquisition" as defined in Section 302A.011 of the MBCA. No other "fair price,"
"moratorium," or other similar anti-takeover statute or regulation prohibits (by
reason of Company's participation therein) the Merger or the other transactions
contemplated by this Agreement.
2.21. Title to Properties. Section 2.21 of the Company Disclosure
Schedule sets forth a complete list of all material real property owned in fee
by Company or any of the Company Subsidiaries and sets forth all material real
property leased by Company or any of the Company Subsidiaries as lessee as of
the date hereof (such owned and leased material real property, including all
improvements thereon, referred to collectively as the "Company Real Property").
The Company Real Property set forth in Section 2.21 of the Company Disclosure
Schedule comprises all of the material real property necessary and/or currently
used in the operations of the business of the Company and the Company
Subsidiaries. The Company and the Company Subsidiaries have good and valid title
to, or, as to Company Real Property designated as leased, a valid leasehold
interest in, all of the Company Real Property. The Company Real Property is free
of encumbrances, except for (a) liens with respect to Taxes either not
delinquent or being diligently contested in appropriate proceedings; (b)
mechanics', materialmen's or similar statutory liens for amounts not yet due or
being diligently contested in appropriate proceedings; and (c) other exceptions
with respect to title to Company Real Property (including easements of public
record) that do not and would not materially interfere with the current and
intended use of such Company Real Property (clauses, (a), (b), and (c) being
referred to herein as "Permitted Encumbrances"), and the consummation of the
transactions contemplated hereby will not create any encumbrance (other than
Permitted Encumbrances) on any of the Company Real Property. Each of the Company
and the Company Subsidiaries enjoys peaceful and undisturbed possession under
all leases of Company Real Property, except for such breaches of the right to
peaceful and undisturbed possession that do not materially interfere with the
ability of the Company and the Company Subsidiaries to conduct their business on
such property.
2.22. Environmental Matters. The Company has not, and no third party
has, generated, treated, stored, released or disposed of, or otherwise placed,
deposited in or located on the Company Real Property, any toxic or hazardous
substances or wastes, pollutants or contaminants (including, without
limitations, asbestos, urea formaldehyde, the group of organic compounds known
as polychlorinated biphenyls, petroleum products including gasoline, fuel oil,
crude oil and various constituents of such products, and any hazardous substance
as defined in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA"), 42 U.S.C. ss. 9601-9657, as amended)
(collectively, "Hazardous Substances") except in material compliance with all
applicable Laws, and no Hazardous Substances have been generated, treated,
stored, released or disposed of, or otherwise placed, deposited in or located on
the Company Real Property except in material compliance with all applicable
Laws, nor has any activity been undertaken on the Company Real Property that
would cause or contribute to (a) the Company Real Property becoming a treatment,
storage or disposal facility in material violation of, the Resource Conservation
and Recovery Act of 1976 ("RCRA"), 42 U.S.C. ss. 6901 et seq., or
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any similar state law or local ordinance, (b) a release or threatened release of
toxic or hazardous wastes or substances, pollutants or contaminants from the
Company Real Property in material violation of CERCLA or any similar state law
or local ordinance, or (c) the discharge of pollutants or effluents into any
water source or system, the dredging or filling of any waters or the discharge
into the air of any emissions, for which the Company does not have all material
required permits under the Federal Water Act, 33 U.S.C. ss. 1251 et seq., or the
Clean Air Act, 42 U.S.C. ss. 7401 et seq., or any similar state law or local
ordinance, in each case except for any such noncompliance, violations, or
failures as would not be reasonably likely to have a Company Material Adverse
Effect. There are no substances or conditions in or on the Company Real Property
that may support a claim or cause of action under RCRA, CERCLA or any other
federal, state or local environmental statutes, regulations, ordinances or other
environmental regulatory requirements, except for any such claims or causes of
action as would not be reasonably likely to have a Company Material Adverse
Effect. There are no above ground or underground tanks that have been located
under, in or about the Company Real Property which have been subsequently
removed or filled. To the extent storage tanks exist on or under the Company
Real Property, such storage tanks have been duly registered with all appropriate
regulatory and governmental bodies and are otherwise in compliance with
applicable federal, state and local statutes, regulations, ordinances and other
regulatory requirements.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Except as set forth in the disclosure schedule from Purchaser to the Company to
be delivered upon the execution of this Agreement, which sets forth certain
disclosures concerning Purchaser and its business (the "Purchaser Disclosure
Schedule"), each section of which qualifies only the correspondingly numbered
representation or warranty, Purchaser hereby represents and warrants to the
Company as follows:
3.1. Due Incorporation and Good Standing. Each of Purchaser and
Merger Sub is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
and has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being conducted. Purchaser is
duly qualified or licensed and in good standing to do business in each
jurisdiction in which the character of the property owned, leased or operated by
it or the nature of the business conducted by it makes such qualification or
licensing necessary, except where the failure to be so duly qualified or
licensed and in good standing would not be reasonably likely to have a material
adverse effect on the business, assets, prospects, condition (financial or
otherwise), liabilities or the results of operations of Purchaser and its
subsidiaries taken as a whole except in each case for any such effects resulting
from, arising out of, or relating to (i) general business or economic
conditions, (ii) conditions generally affecting the industry in which Purchaser
competes, or (iii) the taking of any action contemplated by this Agreement
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("Purchaser Material Adverse Effect"). Purchaser has heretofore made available
to the Company accurate and complete copies of the Articles of Incorporation and
Bylaws, as currently in effect, of Purchaser.
3.2. Capitalization. As of the date hereof, the authorized capital
stock of Purchaser consists of sixty million shares of common stock, par value
$.01 per share, and two million shares of preferred stock, par value $.01 per
share. As of February 4, 2000, 24,824,133 shares of Purchaser Stock were issued
and outstanding and 6,421,157 shares of Purchaser were held in the treasury of
Purchaser. No other capital stock of Purchaser is authorized or issued. All
issued and outstanding shares of the Purchaser Stock are, and all such shares to
be issued to Company stockholders in connection with the Merger will upon
issuance be, duly authorized, validly issued, fully paid and non-assessable.
3.3. Authorization; Binding Agreement. Purchaser and Merger Sub have
all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby, including, but not limited to, the Merger, have been duly
and validly authorized by the respective Boards of Directors of Purchaser and
Merger Sub, as appropriate, and no other corporate proceedings on the part of
Purchaser or Merger Sub are necessary to authorize the execution and delivery of
this Agreement or to consummate the transactions contemplated hereby (other than
the requisite approval by the sole shareholder of Merger Sub of this Agreement
and the Merger). This Agreement has been duly and validly executed and delivered
by each of Purchaser and Merger Sub and constitutes the legal, valid and binding
agreement of Purchaser and Merger Sub, enforceable against each of Purchaser and
Merger Sub in accordance with its terms, subject to the Enforceability
Exceptions.
3.4. Governmental Approvals. No Consent from or with any Governmental
Authority on the part of Purchaser or Merger Sub is required in connection with
the execution or delivery by Purchaser of this Agreement or the consummation by
Purchaser of the transactions contemplated hereby other than (i) the filing of
the Articles of Merger with the Secretary of State of the State of Minnesota in
accordance with the MBCA and the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware in accordance with the DGCL; (ii)
filings with the SEC, state securities laws administrators and the New York
Stock Exchange (the "NYSE"); (iii) filings under the HSR Act; (iv) such filings
as may be required in any jurisdiction where Purchaser is qualified or
authorized to do business as a foreign corporation in order to maintain such
qualification or authorization; and (v) those Consents that, if they were not
obtained or made, would not be reasonably likely to have a Purchaser Material
Adverse Effect.
3.5. No Violations. Except as set forth in Section 3.5 of the
Purchaser Disclosure Schedule, the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and compliance by Purchaser
and Merger Sub with any of the
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provisions hereof will not (i) conflict with or result in any breach of any
provision of the Articles of Incorporation or Bylaws or other governing
instruments of Purchaser or Merger Sub, (ii) require any Consent under or result
in a violation or breach of, or constitute (with or without due notice or lapse
of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or provisions
of any agreement or other instrument to which Purchaser is a party or by which
its assets are bound, (iii) result in the creation or imposition of any lien or
encumbrance of any kind upon any of the assets of Purchaser or Merger Sub or
(iv) subject to obtaining the Consents from Governmental Authorities referred to
in Section 3.4 hereof, contravene any Law to which Purchaser or Merger Sub or
its or any of their respective assets or properties are subject, except, in the
case of clauses (ii), (iii) and (iv) above, for any deviations from the
foregoing which would not be reasonably likely to have a Purchaser Material
Adverse Effect.
3.6. Securities Filings. Purchaser has made available to the Company
true and complete copies of (i) its Annual Reports on Form 10-K for the year
ended December 31, 1998, as filed with the SEC, (ii) its proxy statements
relating to all of the meetings of shareholders (whether annual or special) of
Purchaser since December 31, 1998, as filed with the SEC, and (iii) all other
reports, statements and registration statements and amendments thereto
(including, without limitation, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K, as amended) filed by Purchaser with the SEC since December
31, 1998. The reports and statements set forth in clauses (i) through (iii)
above, and those subsequently provided or required to be provided pursuant to
this Section 3.6, are referred to collectively herein as the "Purchaser
Securities Filings." As of their respective dates, or as of the date of the last
amendment thereof, if amended after filing, none of the Purchaser Securities
Filings contained or, as to Purchaser Securities Filings subsequent to the date
hereof, will contain, any untrue statement of a material fact or omitted or, as
to Purchaser Securities Filings subsequent to the date hereof, will omit, to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Each of the Purchaser Securities Filings at the time of filing
or as of the date of the last amendment thereof, if amended after filing,
complied or, as to Purchaser Securities Filings subsequent to the date hereof,
will comply in all material respects with the Securities Exchange Act or the
Securities Act, as applicable.
3.7. Purchaser Financial Statements. The audited consolidated
financial statements and unaudited interim financial statements of Purchaser
included in the Purchaser Securities Filings (the "Purchaser Financial
Statements") have been prepared or will be in accordance with generally accepted
accounting principles applied on a consistent basis (except as may be indicated
therein or in the notes thereto) and present or will present fairly, in all
material respects, the financial position of Purchaser and its subsidiaries as
at the dates thereof and the results of their operations and cash flows for the
periods then ended, subject, in the case of the unaudited interim financial
statements, to normal year-end audit adjustments, any other adjustments
described therein and the fact that certain information and notes have been
condensed or omitted in accordance with the Securities Exchange Act.
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3.8. Absence of Certain Changes or Events; No Undisclosed
Liabilities. Except as set forth in Section 3.8 of the Purchaser Disclosure
Schedule, since December 31, 1998, through the date of this Agreement, there has
not been (i) any event that has had or would reasonably be expected to have a
Purchaser Material Adverse Effect or (ii) any declaration, payment or setting
aside for payment any dividend or other distribution or redemption or other
acquisition of any shares of capital stock of Purchaser by Purchaser. Except for
those liabilities that are fully reflected or reserved against on the
consolidated balance sheet of Purchaser included in its December 31, 1998, Form
10-K and for liabilities incurred in the ordinary course of business consistent
with past practice, since December 31, 1998, neither Purchaser nor any of the
Purchaser Subsidiaries has incurred any liability of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and whether due or to become
due) that, either individually or in the aggregate, has had or would be
reasonably likely to result in a Purchaser Material Adverse Effect.
3.9. Compliance with Laws. The business of Purchaser and each of its
subsidiaries has been operated in compliance with all Laws applicable thereto,
except for any instances of non-compliance which would not be reasonably likely
to have a Purchaser Material Adverse Effect.
3.10. Litigation. Except as disclosed in Section 3.10 of the
Purchaser Disclosure Schedule, there is no Litigation pending or, to the
knowledge of Purchaser, threatened against, Purchaser or any of its subsidiaries
which, individually or in the aggregate, would be reasonably likely to have a
Purchaser Material Adverse Effect, nor is there any judgment, decree,
injunction, rule or order of any Governmental Authority outstanding against
Purchaser or any of its subsidiaries which, individually or in the aggregate,
would be reasonably likely to have a Purchaser Material Adverse Effect.
3.11. Tax Returns. Purchaser has timely filed, or caused to be timely
filed, all material Tax Returns required to be filed by it, and has paid,
collected or withheld, or caused to be paid, collected or withheld, all material
amounts of Taxes required to be paid, collected or withheld, other than such
Taxes for which adequate reserves in the Purchaser Financial Statements have
been established or which are being contested in good faith. There are no
material claims or assessments pending against Purchaser for any alleged
deficiency in any Tax. To Purchaser's knowledge, none of Purchaser or any of the
Purchaser Subsidiaries has taken or agreed to take any action that would prevent
the Merger from constituting a reorganization qualifying under the provisions of
Section 368(a) of the Code.
3.12. Finders and Investment Bankers. Other than Banc of America
Securities LLC, neither Purchaser nor any of its officers or directors has
employed any broker or finder or otherwise incurred any liability for any
brokerage fees, commissions or finders' fees in connection with the transactions
contemplated hereby.
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3.13. Fairness Opinion. Purchaser's Board of Directors has received
from its financial advisor, Banc of America Securities LLC, a written opinion
addressed to it for inclusion in the Prospectus/Proxy Statement to the effect
that the Merger Consideration is fair to Purchaser from a financial point of
view.
3.14. No Prior Activities. Except for obligations or liabilities
incurred in connection with its incorporation or organization or the negotiation
and consummation of this Agreement and the transactions contemplated hereby,
Merger Sub has not incurred any obligations or liabilities, and has not engaged
in any business or activities of any type or kind whatsoever or entered into any
agreements or arrangements with any person or entity.
3.15. Ownership of Company Stock. Purchaser does not beneficially
own, either directly or indirectly, more than 100 shares of Company Stock. None
of the Purchaser Subsidiaries beneficially owns, either directly or indirectly,
any shares of Company Stock.
3.16. Financing. Purchaser will have prior to the satisfaction of the
conditions to the Merger, sufficient funds available to purchase the Company
Shares converted into the right to receive Cash Consideration.
ARTICLE IV
ADDITIONAL COVENANTS OF THE COMPANY
The Company covenants and agrees as follows:
4.1. Conduct of Business of the Company and the Company Subsidiaries.
(a) Unless Purchaser shall otherwise agree in writing and except as expressly
contemplated by this Agreement or as set forth on Section 4.1 of the Company
Disclosure Schedule (the inclusion of any item having been consented to by
Purchaser), during the period from the date of this Agreement to the Effective
Time, (i) the Company shall conduct, and it shall cause each of the Company
Subsidiaries to conduct, its or their businesses in the ordinary course and
consistent with past practice, and the Company shall, and it shall cause each of
the Company Subsidiaries to, use its or their reasonable best efforts to
preserve intact its business organization, to keep available the services of its
officers and employees, to maintain satisfactory relationships with all persons
with whom it does business, and to preserve the possession, control and
condition of all of its assets and (ii) without limiting the generality of the
foregoing, neither the Company nor any Company Subsidiary will:
(A) amend or propose to amend its Articles of Incorporation or Bylaws
(or comparable governing instruments);
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(B) authorize for issuance, issue, grant, sell, pledge, dispose of or
propose to issue, grant, sell, pledge or dispose of any shares of, or any
options, warrants, commitments, subscriptions or rights of any kind to acquire
or sell any shares of, the capital stock or other securities of the Company or
any of its subsidiaries including, but not limited to, any securities
convertible into or exchangeable for shares of stock of any class of the Company
or any of its subsidiaries, except for (i) the issuance of Company Shares
pursuant to the exercise of stock options outstanding on the date of this
Agreement in accordance with their present terms, and (ii) subject to the
limitations set forth in Section 1.8, the grant of purchase rights pursuant to
the Company ESPP or the issuance of Company Stock upon the exercise of such
purchase rights;
(C) split, combine or reclassify any shares of its capital stock or
declare, pay or set aside any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of its capital stock,
other than dividends or distributions to the Company or any Company Subsidiary,
or directly or indirectly redeem, purchase or otherwise acquire or offer to
acquire any shares of its capital stock or other securities and other than
pursuant to commitments outstanding on the date of this Agreement in accordance
with their present terms as set forth on Schedule 4.1 of the Company Disclosure
Schedule.
(D) (a) create, incur, assume, forgive or make any changes to the
terms or collateral of any debt, receivables or employee or officer loans or
advances, except incurrences that constitute refinancing of existing obligations
on terms that are no less favorable to the Company or its subsidiaries than the
existing terms; (b) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, indirectly, contingently or otherwise) for the
obligations of any person; (c) make any capital expenditures or incur any
pre-opening expenses, other than consistent as set forth in Section 4.1 of the
Company Disclosure Schedule; (d) make any loans, advances or capital
contributions to, or investments in, any other person (other than to a Company
subsidiary and customary travel, relocation or business advances to employees);
(e) acquire the stock or assets of, or merge or consolidate with, any other
person; (f) voluntarily incur any material liability or obligation (absolute,
accrued, contingent or otherwise) other than in the ordinary course of business
consistent with past practice; or (g) sell, transfer, mortgage, pledge, or
otherwise dispose of, or encumber, or agree to sell, transfer, mortgage, pledge
or otherwise dispose of or encumber, any assets or properties, real, personal or
mixed material to the Company and the Company Subsidiaries taken as a whole
other than to secure debt permitted under subclause (a) of this clause (D) or
other than in the ordinary course of business consistent with past practice;
(E) increase in any manner the wages, salaries, bonus, compensation
or other benefits of any of its officers or employees or enter into, establish,
amend or terminate any employment, consulting, retention, change in control,
collective bargaining, bonus or other incentive compensation, profit sharing,
health or other welfare, stock option or other equity, pension, retirement,
vacation, severance, termination, deferred compensation or other compensation or
benefit plan, policy, agreement, trust, fund or arrangement with, for or in
respect of, any shareholder, officer, director, other employee, agent,
consultant or affiliate other
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than as required pursuant to the terms of agreements in effect on the date of
this agreement, or enter into or engage in any agreement, arrangement or
transaction with any of its directors, officers, employees or affiliates except
current compensation and benefits in the ordinary course of business, consistent
with past practice;
(F) (i) commence or settle any litigation or other proceedings with
any Governmental Authority or other person, or (ii) make or rescind any election
relating to Taxes, settle any claim, action, suit, litigation, proceeding,
arbitration, investigation, audit or controversy relating to Taxes, file any
amended Tax Return or claim for refund, change any method of accounting or make
any other material change in its accounting or Tax policies or procedures, or
commit or omit to do any act which act or omission would cause the Merger to
fail to qualify as a reorganization within the meaning of Section 368(a) of the
Code.
(G) adopt or amend any resolution or agreement concerning
indemnification of its directories, officers, employees or agents;
(H) commit or omit to do any act which act or omission would cause a
breach of any covenant contained in this Agreement or would cause any
representation or warranty contained in this Agreement to become untrue, as if
each such representation and warranty were continuously made from and after the
date hereof;
(I) fail to maintain its books, accounts and records in the usual
manner on a basis consistent with that heretofore employed;
(J) materially increase or decrease the average restaurant, corporate
or warehouse facility inventory or house bank accounts in any restaurant;
(K) enter into any new line of business;
(L) enter into any lease, contract or agreement pursuant to which the
Company is obligated to pay or incur obligations of more than $25,000 per year,
other than (i) the purchase of inventory in the ordinary course of business
consistent with past practice or in connection with the construction of
restaurants as listed in Section 4.1 of the Company Disclosure Schedule and
approved, if required, pursuant to clause (N) below;
(M) make any changes to its current investment strategy, policy or
practices;
(N) make, engage or incur costs for the design or construction of any
new restaurant, the remodeling or renovation of existing restaurants or
restaurants under construction without approval by Purchaser (it being
understood that Purchaser shall have approval of all design and construction
matters);
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(O) allow any employee or other person to remove any Company asset,
display, proprietary asset, retail item or other property from the corporate
office, warehouses, restaurants of the Company or any other Company facilities;
(P) issue any gift certificates, coupons or complimentary rights for
dining or retail other than in such amounts as are in the ordinary course of
business consistent with past practice; or
(Q) authorize any of, or agree to commit to do any of, the foregoing
actions.
(b) The Company shall, and the Company shall cause each of its
subsidiaries to, use its or their reasonable best efforts to comply in all
material respects with all Laws applicable to it or any of its properties,
assets or business and maintain in full force and effect all the Company Permits
necessary for, or otherwise material to, such business.
4.2. Notification of Certain Matters. The Company shall give prompt
notice to Purchaser if any of the following occur after the date of this
Agreement: (i) receipt of any notice or other communication in writing from any
third party alleging that the Consent of such third party is or may be required
in connection with the transactions contemplated by this Agreement, provided
that such Consent would have been required to have been disclosed in this
Agreement; (ii) receipt of any material notice or other communication from any
Governmental Authority (including, but not limited to, the NASD or any
securities exchange) in connection with the transactions contemplated by this
Agreement; (iii) the occurrence of an event which would be reasonably likely to
have a Company Material Adverse Effect; or (iv) the commencement or threat of
any Litigation involving or affecting the Company or any Company Subsidiary, or
any of their respective properties or assets, or, to its knowledge, any
employee, agent, director or officer, in his or her capacity as such, of the
Company or any Company Subsidiary which, if pending on the date hereof, would
have been required to have been disclosed in this Agreement or which relates to
the consummation of the Merger.
4.3. Access and Information. Between the date of this Agreement and
the Effective Time, the Company will give, and shall direct its accountants and
legal counsel to give, Purchaser and its respective authorized representatives
(including, without limitation, its financial advisors, accountants and legal
counsel), at all reasonable times, access as reasonably requested to all offices
and other facilities and to all contracts, agreements, commitments, books and
records of or pertaining to the Company and its subsidiaries, will permit the
foregoing to make such reasonable inspections as they may require and will cause
its officers promptly to furnish Purchaser with (a) such financial and operating
data and other information with respect to the business and properties of the
Company and the Company Subsidiaries as Purchaser may from time to time
reasonably request, and (b) a copy of each material report, schedule and other
document filed or received by the Company or any Company Subsidiary pursuant to
the requirements of applicable securities laws or the NASD.
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4.4. Shareholder Approval. As soon as practicable, the Company shall
call, give notice of, convene and hold a meeting of its shareholders for the
purpose of approving the Company Proposals and for such other purposes as may be
necessary or desirable in connection with effectuating the transactions
contemplated hereby. Except as otherwise contemplated by this Agreement, the
Company will use reasonable best efforts to obtain any necessary approval by the
Company's shareholders of the Company Proposals. Notwithstanding the foregoing,
unless the Board of Directors of the Company, based on the opinion of its
outside legal counsel, determines that to do so would result in a breach of the
fiduciary duties of the Company's Board of Directors under applicable law, the
Company, acting through its Board of Directors, shall include in the
Prospectus/Proxy Statement the recommendation of the Board of Directors that
shareholders of the Company vote in favor of the Company Proposals.
4.5. Reasonable Best Efforts.
(a) Subject to the terms and conditions herein provided, the Company
agrees to use its reasonable best efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective as promptly as practicable the Merger
and the other transactions contemplated by this Agreement, including, but not
limited to, (i) obtaining all Consents from Governmental Authorities and other
third parties required for the consummation of the Merger and the transactions
contemplated hereby (provided that the Company shall not make any payment or
amend the terms of any agreement in connection with obtaining any such Consent
without the prior written approval of Purchaser) and (ii) timely making all
necessary filings under the HSR Act. Upon the terms and subject to the
conditions hereof, the Company agrees to use reasonable best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary to satisfy the other conditions to Closing set forth herein.
(b) The Company agrees to inform Purchaser regularly, and to respond
to requests of Purchaser, as to the status of whether or not each material
Consent required from third parties (other than Governmental Authorities) in
connection with this Agreement and the transactions contemplated hereby have
been obtained. The Company shall promptly deliver to Purchaser in writing a
reasonably detailed notice (the "Consent Notice") as to the status of all such
material Consents on the sixtieth calendar day (such date, the "Consent Notice
Date") following public announcement of the Merger. In the event that the
Company has not obtained any one or more of such material Consents by the
Consent Notice Date, then Purchaser shall have up to and including the date (the
"Decision Date") which is ten business days following the later of the date of
its receipt of such written notice and the Consent Notice Date to (i) terminate
this Agreement in accordance with Section 7.1(f) hereof or (ii) waive any such
one or more material Consents by delivery of a reasonably detailed written
notice to the Company (any such material Consents so waived in writing by
Purchaser, collectively, the "Waived Consents"); provided, however, that in the
event that Purchaser has not by or on the Decision Date either (i) terminated
this Agreement in accordance with Section 7.1(f) hereof or (ii) waived all such
material Consents, then this Agreement shall terminate without any action by any
party hereto in
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accordance with Section 7.1(g) hereof. Notwithstanding any such waiver of
material Consents, if Purchaser has not so terminated this Agreement, the
Company shall continue to use its reasonable best efforts to actually obtain the
Waived Consents pursuant to Section 4.5(a) up to the Closing Date.
4.6. Public Announcements. So long as this Agreement is in effect,
the Company shall not, and shall cause its affiliates not to, (a) issue or cause
the publication of any press release or any other announcement or communication
with respect to the Merger or the other transactions contemplated hereby without
the written consent of Purchaser, or (b) discuss with the press or the media
this Agreement, the Merger or the transactions contemplated hereby (and will
refer any and all questions and inquiries to Purchaser), except in any case
under (a) or (b) where such release or announcement is required by applicable
Law or pursuant to any applicable listing agreement with, or rules or
regulations of, the NASD, in which case the Company, prior to making such
announcement, will consult with Purchaser regarding the same.
4.7. Compliance. In consummating the Merger and the other
transactions contemplated hereby, the Company shall comply in all material
respects with the provisions of the Securities Exchange Act and the Securities
Act and shall comply, and/or cause its subsidiaries to comply or to be in
compliance, in all material respects, with all other applicable Laws.
4.8. No Solicitation. (a) The Company shall, and shall direct and
cause its officers, directors, employees, representatives and agents to,
immediately cease any discussions or negotiations with any parties that may be
ongoing with respect to a Company Takeover Proposal (as defined below) and
immediately request that all confidential information furnished by or on behalf
of the Company be returned. The Company shall not, nor shall it permit any of
its subsidiaries to, nor shall it authorize or permit any of its officers,
directors or employees or any investment banker, financial advisor, attorney,
accountant or other representative retained by it or any of its subsidiaries,
directly or indirectly, to (i) solicit, initiate or encourage (including by way
of furnishing information), or take any other action knowingly designed or
reasonably likely to facilitate, any inquiries or the making of any proposal
which constitutes, or may reasonably be expected to lead to, any Company
Takeover Proposal or (ii) participate in any discussion or negotiations
regarding any Company Takeover Proposal; provided, however, that if, at any time
prior to the Company shareholder meeting with respect to the transactions
contemplated hereby, the Board of Directors of the Company determines in good
faith, based on the advice of its outside legal counsel, that the failure to do
so would result in a breach of its fiduciary duties to the Company's
shareholders under applicable Law, the Company may, in response to a Company
Superior Proposal (as defined below), and subject to compliance with Section
4.8(c), (x) furnish information with respect to the Company to any person
pursuant to a customary confidentiality agreement (as determined by the Company
after consultation with outside legal counsel) and (y) participate in
negotiations regarding such Company Takeover
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Proposal for purposes of determining in good faith if such Company Takeover
Proposal is a Company Superior Proposal. "Company Takeover Proposal" means any
inquiry, proposal or offer from any person relating to (1) any direct or
indirect acquisition or purchase of assets representing 20% or more of the
consolidated assets of the Company and the Company Subsidiaries, (2) any
issuance, sale, or other disposition of (including by way of merger,
consolidation, business combination, share exchange, joint venture, or any
similar transaction) securities (or options, rights or warrants to purchase, or
securities convertible into or exchangeable for, such securities) representing
20% or more of the voting power of the Company, (3) any tender offer, exchange
offer or other transaction in which, if consummated, any person shall acquire
beneficial ownership (as such term is defined in Rule 13d-3 under the Securities
Exchange Act), or the right to acquire beneficial ownership, or any "group" (as
such term is defined under the Securities Exchange Act) shall have been formed
which beneficially owns or has the right to acquire beneficial ownership, of,
20% or more of the outstanding voting capital stock of the Company, or, (4) any
merger, consolidation, share exchange, business combination, recapitalization,
liquidation, dissolution or similar transaction involving the Company or any
Company Subsidiary, other than the transactions contemplated by this Agreement.
Notwithstanding any provision to the contrary contained in this Section 4.8, the
provision by the Company of copies of its SEC filings by its investor relations
department to third parties in a manner consistent with its historical
practices, shall not be deemed a violation of this Section 4.8. For purposes of
this Agreement, a "Company Superior Proposal" means any bona fide proposal made
by a third party to acquire, directly or indirectly, for consideration
consisting of cash and/or securities, more than a majority of the combined
voting power of the Company Shares then outstanding or all or substantially all
the assets of the Company, on terms which the Board of Directors of the Company
determines in its good faith judgment based on the advice of the Company's
financial advisers and outside legal counsel to be more favorable to the
Company's shareholders, from a financial point of view, than the Merger (taking
into account all factors relating to such proposed transaction deemed relevant
by the Board of Directors of the Company, including, without limitation, the
financing thereof and all other conditions thereto).
(b) Except as set forth in this Section 4.8, neither the Company nor
the Board of Directors, or any committee thereof, shall (i) withdraw or modify,
or propose publicly to withdraw or modify, in a manner adverse to Purchaser, the
approval or recommendation by such Board of Directors of the Company of the
Company Proposals, (ii) approve or recommend, or propose publicly to approve or
recommend, any Company Takeover Proposal or (iii) cause the Company to enter
into any letter of intent, agreement in principle, acquisition agreement or
other similar agreement (each, a "Company Acquisition Agreement") related to any
Company Takeover Proposal. Notwithstanding the foregoing, in the event that
prior to the Company shareholder meeting with respect to the transactions
contemplated hereby, the Board of Directors of the Company determines in good
faith, based on the advice of outside legal counsel, that the failure to do so
would result in a breach of its fiduciary duties to the Company's shareholders
under applicable Law, the
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Board of Directors of the Company may (subject to this and the following
sentences) (x) withdraw or modify its approval or recommendation of the Company
Proposals or (y) approve or recommend a Company Superior Proposal, but in each
case, only at a time that is after the second business day following Purchaser's
receipt of written notice advising Purchaser that the Company's Board of
Directors has received a Company Superior Proposal, specifying the material
terms and conditions of such Company Superior Proposal, and identifying the
person making such Company Superior Proposal.
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 4.8, the Company shall promptly advise
Purchaser orally and in writing of any request for information or of any Company
Takeover Proposal, the material terms and conditions of such request or the
Company Takeover Proposal and the identity of the person making such request or
Company Takeover Proposal and shall keep Purchaser fully informed on a prompt
basis with respect to any developments with respect to the foregoing.
(d) Nothing contained in this Agreement shall prohibit the Board of
Directors of the Company from taking and disclosing to its shareholders a
position contemplated by Rule 14e-2(a) promulgated under the Securities Exchange
Act or from making any disclosure to the Company's shareholders if, in the good
faith judgment of the Board of Directors of the Company, based on the advice of
its outside counsel, failure so to disclose would result in a breach of its
fiduciary duties to the Company's shareholders under applicable law; provided,
however, neither the Company nor its Board of Directors, shall, except as
permitted by Section 4.8(b), withdraw or modify, or propose publicly to withdraw
or modify, its position with respect to the Company Proposals or approve or
recommend, or propose publicly to approve or recommend, a Company Takeover
Proposal. Notwithstanding anything to the contrary contained herein, the Company
Proposals shall be submitted to the shareholders of the Company at the meeting
of such shareholders for the purpose of approving the Company Proposals and the
Merger, and, subject to termination of this Agreement in accordance with the
terms of Article VII hereof, nothing in this Agreement to the contrary shall be
deemed to relieve Company of such obligation.
4.9. Tax Opinion Certificate. The Company shall execute and deliver a
certificate, in form reasonably satisfactory to Purchaser, (the "Company Tax
Opinion Certificate") signed by an officer of the Company setting forth factual
representations and covenants that will serve as a basis for the tax opinion
required pursuant to Section 6.2(e) of this Agreement.
4.10. SEC and Shareholder Filings. The Company shall send to Purchaser
a copy of all material public reports and materials as and when it sends the
same to its shareholders, the SEC or any state or foreign securities commission.
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ARTICLE V
ADDITIONAL COVENANTS OF PURCHASER
Purchaser covenants and agrees as follows:
5.1. Access and Information. Between the date of this Agreement and
the Effective Time, Purchaser will give, and shall direct its accountants and
legal counsel to give, the Company and its authorized representatives
(including, without limitation, its financial advisors, accountants and legal
counsel), at all reasonable times, access as reasonably requested to all offices
and other facilities and to all contracts, agreements, commitments, books and
records of or pertaining to Purchaser and its subsidiaries or to any Pending
Purchaser Transactions, if any, and to the parties thereto, will permit the
foregoing to make such reasonable inspections as they may require and will cause
its officers promptly to furnish the Company with (a) such financial and
operating data and other information with respect to the business and properties
of Purchaser and its subsidiaries as the Company may from time to time
reasonably request and (b) a copy of each material report, schedule and other
document filed or received by Purchaser or any of its subsidiaries pursuant to
the requirements of applicable securities laws or the NYSE.
5.2. Notification of Certain Matters. Notification of Certain
Matters. Purchaser shall give prompt notice to the Company if any of the
following occur after the date of this Agreement: (i) receipt of any notice or
other communication in writing from any third party alleging that the Consent of
such third party is or may be required in connection with the transactions
contemplated by this Agreement, provided that such Consent would have been
required to have been disclosed in this Agreement; (ii) receipt of any material
notice or other communication from any Governmental Authority (including, but
not limited to, the NYSE or any securities exchange) in connection with the
transactions contemplated by this Agreement; (iii) the occurrence of an event
which would be reasonably likely to have a Purchaser Material Adverse Effect or
(iv) the commencement or threat of any Litigation involving or affecting
Purchaser or any of its subsidiaries, or any of their respective properties or
assets, or, to its knowledge, any employee, agent, director or officer, in his
or her capacity as such, of Purchaser or any of its subsidiaries which, if
pending on the date hereof, would have been required to have been disclosed in
this Agreement or which relates to the consummation of the Merger.
5.3. Reasonable Best Efforts. Subject to the terms and conditions
herein provided, Purchaser agrees to use its reasonable best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the Merger and the other transactions contemplated by this
Agreement, including, but not limited to, (i) obtaining all Consents from
Governmental Authorities and other third parties required for the consummation
of the Merger and the other transactions contemplated hereby and (ii) timely
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making all necessary filings under the HSR Act. Upon the terms and subject to
the conditions hereof, Purchaser agrees to use reasonable best efforts to take,
or cause to be taken, all actions and to do, or cause to be done, all things
necessary to satisfy the other conditions to Closing set forth herein.
5.4. Compliance. In consummating the Merger and the other
transactions contemplated hereby, Purchaser shall comply in all material
respects with the provisions of the Securities Exchange Act and the Securities
Act and shall comply, and/or cause its subsidiaries to comply or to be in
compliance, in all material respects, with all other applicable Laws.
5.5. SEC and Shareholder Filings. Purchaser shall send to the Company
a copy of all material public reports and materials as and when it sends the
same to its shareholders, the SEC or any state or foreign securities commission.
5.6. Tax Opinion Certificate. Purchaser shall execute and deliver a
certificate, in form reasonably satisfactory to Company, (the "Purchaser Tax
Opinion Certificate") signed by an officer of Purchaser setting forth factual
representations and covenants that will serve as a basis for the tax opinions
required pursuant to Section 6.3(f) of this Agreement.
5.7. Indemnification. (a) As of the Effective Time, the
indemnification and exculpation provisions contained in the Bylaws and the
Articles of Incorporation of the Surviving Corporation shall be at least as
favorable to individuals who immediately prior to the Closing Date were
directors, officers, agents or employees of the Company or otherwise entitled to
indemnification under the Company's Bylaws or Articles of Incorporation (an
"Indemnified Party") as those contained in the Bylaws and the Articles of
Incorporation of the Company, respectively, and shall not be amended, repealed
or otherwise modified for a period of six years after the Closing Date in any
manner that would adversely affect the rights thereunder of any Indemnified
Party. The Company hereby covenants that it shall, to the fullest extent
permitted under Minnesota law and regardless of whether the Merger becomes
effective, indemnify, defend and hold harmless, and after the Effective Time,
Purchaser and the Surviving Corporation shall jointly and severally, to the
fullest extent permitted under Delaware law, indemnify, defend and hold
harmless, each Indemnified Party against any costs or expenses (including
reasonable attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement in connection with any claim, action,
suit, proceeding or investigation, including, without limitation, liabilities
arising out of this Agreement or under the Securities Exchange Act, occurring
through the Closing Date, and in the event of any such claim, action, suit,
proceeding or investigation (whether arising before or after the Effective
Time), (i) the Company or the Surviving Corporation shall pay the reasonable
fees and expenses of counsel selected by the Indemnified Parties, which counsel
shall be reasonably satisfactory to the Company or the Surviving Corporation,
promptly as statements therefor are received, and (ii) the Company
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and the Surviving Corporation will cooperate in the defense of any such matter;
provided, however, that neither the Company nor the Surviving Corporation shall
be liable for any settlement effected without its written consent (which consent
shall not be unreasonably withheld); and provided, further, that neither the
Company nor the Surviving Corporation shall be obliged pursuant to this Section
5.7 to pay the fees and disbursements of more than one counsel for all
Indemnified Parties in any single action except to the extent that, in the
opinion of counsel for the Indemnified Parties, two or more of such Indemnified
Parties have conflicting interests in the outcome of such action. Purchaser
shall cause the Surviving Corporation to reimburse all expenses, including
reasonable attorney's fees and expenses, incurred by any person to enforce the
obligations of Purchaser and the Surviving Corporation under this Section 5.7.
To the fullest extent permitted by law, Purchaser shall cause the Surviving
Corporation to advance expense in connection with the foregoing indemnification.
(b) If the Surviving Corporation or any of its successors or assigns
(i) consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfers all or substantially all of its properties and assets to any
person, then and in each such case, proper provision shall be made so that the
successors and assigns of the Surviving Corporation assume the obligations set
forth in this Section 5.7.
5.8. Benefit Plans and Employee Matters.
(a) Purchaser shall to the extent practicable cause the Surviving
Corporation to provide employee benefits and programs to the Company's and the
Company Subsidiaries' employees that, in the aggregate, are substantially
comparable to those of Purchaser. From and after the Effective Time, Purchaser
shall honor, in accordance with their terms, all employment and severance
agreements in effect immediately prior to the Closing Date that are applicable
to any current or former employees or directors of the Company or any Company
Subsidiaries.
(b) To the extent that service is relevant for purposes of
eligibility, level of participation, or vesting under any employee benefit plan,
program or arrangement established or maintained by Purchaser, the Company or
any of their respective subsidiaries, employees of the Company and its
subsidiaries shall be credited for service accrued or deemed accrued prior to
the Effective Time with the Company or such subsidiary, as the case may be.
Under no circumstances shall employees receive credit for service accrued or
deemed accrued prior to the Effective Time with the Company or such Subsidiary,
as the case may be, for benefit accruals under any employee pension benefit plan
(as defined by Section 3(2) of ERISA) or any retiree health plan.
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ARTICLE VI
CONDITIONS
6.1. Conditions to Each Party's Obligations. The respective
obligations of each party to effect the Merger shall be subject to the
fulfillment or waiver at or prior to the Effective Time of the following
conditions:
(a) Shareholder Approval. The Company Proposals shall have been
approved at or prior to the Effective Time by the requisite vote of the
shareholders of the Company required under the MBCA.
(b) No Injunction or Action. No order, statute, rule, regulation,
executive order, stay, decree, judgment or injunction shall have been enacted,
entered, promulgated or enforced by any court or other Governmental Authority
since the date of this Agreement which prohibits or prevents the consummation of
the Merger which has not been vacated, dismissed or withdrawn prior to the
Effective Time. The Company and Purchaser shall use their reasonable best
efforts to have any of the foregoing vacated, dismissed or withdrawn by the
Effective Time.
(c) HSR Act. Any waiting period applicable to the Merger under the
HSR Act shall have expired or early termination thereof shall have been granted.
(d) Registration Statement. The Registration Statement shall have
been declared effective and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no action, suit, proceeding or
investigation for that purpose shall have been initiated or threatened by any
Governmental Authority.
(e) Blue Sky. Purchaser shall have received all state securities law
authorizations necessary to consummate the transactions contemplated hereby.
(f) Listing of Purchaser Stock. The shares of Purchaser Stock
comprising the Merger Consideration shall have been approved for listing on the
NYSE.
6.2. Conditions to Obligations of the Company. The obligation of the
Company to effect the Merger shall be subject to the fulfillment at or prior to
the Effective Time of the following additional conditions, any one or more of
which may be waived by the Company:
(a) Purchaser Representations and Warranties. The representations
and warranties of Purchaser and Merger Sub set forth in this Agreement shall be
true and correct in all material respects (except that where any statement in a
representation or warranty expressly includes a "material adverse effect",
"material" or other materiality qualifier, such
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representation or warranty shall be true and correct in all respects) as of date
hereof and as of the Closing Date as if made on and as of the Closing Date,
except those representations and warranties that speak of an earlier date, which
shall be true and correct as of such earlier date (it being understood that, for
purposes of determining the accuracy of such representations and warranties, any
update of or modification to the Purchaser Disclosure Schedule made or purported
to have been made after the date of this Agreement shall be disregarded).
(b) Performance by Purchaser. Each of Purchaser and Merger Sub shall
have performed and complied with all the covenants and agreements in all
material respects and satisfied in all material respects all the conditions
required by this Agreement to be performed or complied with or satisfied by
Purchaser and/or Merger Sub at or prior to the Effective Time.
(c) No Material Adverse Change. There shall have been no changes,
conditions, events, or developments (including but not limited to with respect
to any matters described in this Agreement or in the Purchaser Securities
Filings or on the Purchaser Disclosure Schedule) that have or would reasonably
be expected to have a Purchaser Material Adverse Effect since the date of this
Agreement; provided, however, that for purposes of determining whether there
shall have been any such Purchaser Material Adverse Effect, (i) any adverse
change resulting from or relating to general business or economic conditions
shall be disregarded, (ii) any adverse change resulting from or relating to
conditions generally affecting the industry in which Purchaser competes shall be
disregarded, and (iii) any adverse change resulting from or relating to the
taking of any action contemplated by this Agreement shall be disregarded.
(d) Certificates and Other Deliveries. Purchaser shall have
delivered, or caused to be delivered, to the Company: (i) a certificate executed
on its behalf by its President or another authorized officer to the effect that
the conditions set forth in Sections 6.2(a), (b) and (c) hereof have been
satisfied; (ii) a certificate of good standing from the Secretary of State of
the State of Delaware stating that Purchaser is a validly existing corporation
in good standing; (iii) a certificate of good standing from the Secretary of
State of Delaware stating that Merger Sub is a validly existing corporation in
good standing; (iv) duly adopted resolutions of the Board of Directors of
Purchaser and the Board of Directors and the shareholder of Merger Sub approving
the execution, delivery and performance of this Agreement and the instruments
contemplated hereby, each certified by its respective Secretary; (v) the duly
executed Purchaser Tax Opinion Certificate; and (vi) such other documents and
instruments as the Company reasonably may request.
(e) Tax Opinion. The Company shall have received an opinion from its
tax counsel substantially to the effect that, if the Merger is consummated in
accordance with the provisions of this Agreement, under current Law, for federal
income tax purposes, the Merger will qualify as a reorganization within the
meaning of Section 368(a) of the Code.
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For purposes of rendering its opinion, the Company's tax counsel may rely on the
statements and representations set forth in the Company Tax Opinion Certificate
and the Purchaser Tax Opinion Certificate, without regard to any qualification
as to knowledge and belief.
6.3. Conditions to Obligations of Purchaser. The obligations of
Purchaser to effect the Merger shall be subject to the fulfillment at or prior
to the Effective Time of the following additional conditions, any one or more of
which may be waived by Purchaser:
(a) Company Representation and Warranties. The representations and
warranties of the Company set forth in this Agreement shall be true and correct
in all material respects (except that where any statement in a representation or
warranty expressly includes a "material adverse effect", "material" or other
materiality qualifier, such representation or warranty shall be true and correct
in all respects) as of the date hereof and as of the Closing Date as if made on
and as of the Closing Date, except those representations and warranties that
speak of an earlier date, which shall be true and correct as of such earlier
date (it being understood that, for purposes of determining the accuracy of such
representations and warranties, any update of or modification to the Company
Disclosure Schedule made or purported to have been made after the date of this
Agreement shall be disregarded).
(b) Performance by the Company. The Company shall have performed and
complied with all the covenants and agreements in all material respects and
satisfied in all material respects all the conditions required by this Agreement
to be performed or complied with or satisfied by the Company at or prior to the
Effective Time.
(c) No Material Adverse Change. There shall have been no changes,
conditions, events, or developments (including but not limited to with respect
to any matters described in this agreement or in the Company Securities Filings
or on the Company Disclosure Schedule) that have or would reasonably be expected
to have a Company Adverse Effect since the date of this Agreement; provided,
however, that for purposes of determining whether there shall have been any such
Company Material Adverse Effect, (i) any adverse change resulting from or
relating to general business or economic conditions shall be disregarded, (ii)
any adverse change resulting from or relating to conditions generally affecting
the industry in which the Company competes shall be disregarded, and (iii) any
adverse change resulting from or relating to the taking of any action
contemplated by this Agreement shall be disregarded.
(d) Certificates and Other Deliveries. The Company shall have
delivered, or caused to be delivered, to Purchaser (i) a certificate executed on
its behalf by its President or another duly authorized officer to the effect
that the conditions set forth in Sections 6.3(a), (b) and (c) hereof have been
satisfied; (ii) a certificate of good standing from the Secretary of State of
the State of Minnesota stating that the Company is a validly existing
corporation in good standing; (iii) duly adopted resolutions of its Board of
Directors
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<PAGE> 47
approving the execution, delivery and performance of this Agreement and the
instruments contemplated hereby, and of the Company's shareholders approving the
Company Proposals, each certified by the Secretary of the Company; (iv) a true
and complete copy of the Articles of Incorporation of the Company certified by
the Secretary of State of the State of Minnesota, and a true and complete copy
of the Bylaws of the Company certified by the Secretary thereof; (v) the duly
executed Company Tax Opinion Certificate; and (vi) such other documents and
instruments as Purchaser reasonably may request.
(e) Tax Opinion. Purchaser shall have received an opinion from its
tax counsel substantially to the effect that, if the Merger is consummated in
accordance with the provisions of this Agreement, under current Law, for federal
income tax purposes, the Merger will qualify as a reorganization within the
meaning of Section 368(a) of the Code. For purposes of rendering its opinion,
Purchaser's tax counsel may rely on the statements and representations set forth
in the Purchaser Tax Opinion Certificate and the Company Tax Opinion
Certificate, without regard to any qualification as to knowledge and belief.
(f) Governmental Approval. All Consents of any Governmental
Authority required for the consummation of the Merger and the transactions
contemplated by this Agreement shall have been obtained, except as may be waived
by Purchaser or those Consents the failure or which to obtain will not have a
Company Material Adverse Effect or a Purchaser Material Advise Effect.
(g) Required Consents. Except with respect to any Waived Consents,
any material required Consents of any person to the Merger or the transactions
contemplated hereby shall have been obtained and be in full force and effect.
(h) Employee Termination, Consulting and Non-Competition Agreements.
Concurrently with the execution and delivery of this Agreement, Purchaser, is
entering into an Employee Termination, Consulting and Non-Competition Agreement,
in the form of Exhibit B hereto with each of the directors and officers named
therein and each of such Employee Termination, Consulting and Non-Competition
Agreements shall be in full force and effect.
6.4. Frustration of Conditions. Neither Purchaser nor the Company may
rely on the failure of any condition set forth in this Article VI to be
satisfied if such failure was caused by such party's failure to comply with or
perform any of its covenants or obligations set forth in this Agreement.
ARTICLE VII
TERMINATION AND ABANDONMENT
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7.1. Termination. This Agreement may be terminated at any time prior
to the Effective Time, whether before or after approval of the shareholders of
the Company and the shareholders of Purchaser described herein:
(a) by mutual written consent of Purchaser and the Company;
(b) by either Purchaser or the Company if:
(i) the Merger shall not have been consummated on or prior to August
31, 2000, provided, however, that the right to terminate this Agreement pursuant
to this Section 7.1(b) (i) shall not be available to any party whose failure to
perform any of its obligations under this Agreement results in the failure of
the Merger to be consummated by such time;
(ii) the vote of the Company's shareholders shall have been taken at
a meeting duly convened therefor or at any adjournment or postponement thereof
and shall be insufficient to approve the Company Proposals;
(iii) any Governmental Authority shall have issued an order, decree or
ruling or taken any other action permanently enjoining, restraining or otherwise
prohibiting the consummation of the Merger and such order, decree or ruling or
other action shall have become final and nonappealable;
(c) by Purchaser if the Company shall have breached in any material
respect any of its representations, warranties, covenants or other agreements
contained in this Agreement, which breach or failure to perform is incapable of
being cured or has not been cured within 20 business days after the giving of
written notice to the Company;
(d) by Purchaser if (i) the Board of Directors of the Company shall
have withdrawn or modified in a manner adverse to Purchaser its approval or
recommendation of any of the Company Proposals, or failed to reconfirm its
recommendation within 15 business days after a written request to do so, or
approved or recommended any Company Superior Proposal or (ii) the Board of
Directors of the Company shall have resolved to take any of the foregoing
actions;
(e) by the Company if Purchaser shall have breached in any material
respect any of its representations, warranties, covenants or other agreements
contained in this Agreement, which breach or failure to perform is incapable of
being cured or has not been cured within 20 business days after the giving of
written notice to Purchaser;
(f) by Purchaser on or before the Decision Date if any one or more
material Consents required from third parties (other than Governmental
Authorities) in
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<PAGE> 49
connection with this Agreement and the transactions contemplated hereby have not
been obtained; and
(g) without any action on the part of any party hereto on the day
immediately following the Decision Date in the event that, and only in the event
that, (i) Purchaser has not terminated this Agreement by or on the Decision Date
pursuant to Section 7.1(f) or (ii) Purchaser has not waived any material
Consents specified in the Consent Notice and which are required from third
parties (other than Governmental Authorities) in connection with this Agreement
and the transactions contemplated hereby which have not been obtained by the
Company prior to or on the Decision Date.
The party desiring to terminate this Agreement pursuant to the preceding
paragraphs shall give written notice of such termination to the other party in
accordance with Section 8.7 hereof.
7.2. Effect of Termination and Abandonment. (a) In the event of
termination of this Agreement and the abandonment of the Merger pursuant to this
Article VII, this Agreement (other than Sections 7.2, 8.1, 8.4, 8.5, 8.6, 8.7,
8.8, 8.9, 8.10, 8.11, 8.12, 8.13, 8.14, 8.15, 8.16, 8.17 and 8.18) shall become
void and of no effect with no liability on the part of any party hereto (or of
any of its directors, officers, employees, agents, legal or financial advisors
or other representatives); provided, however, that no such termination shall
relieve any party hereto from any liability for any breach of this Agreement
prior to termination. If this Agreement is terminated as provided herein, each
party shall use its reasonable best efforts to redeliver all documents, work
papers and other material (including any copies thereof) of any other party
relating to the transactions contemplated hereby, whether obtained before or
after the execution hereof, to the party furnishing the same.
(b) In the event that prior to termination of this Agreement a bona
fide Company Takeover Proposal shall have been made known to the Company or has
been made directly to its shareholders generally or any person shall have
publicly announced an intention (whether or not conditional) to make a bona fide
Company Takeover Proposal (a "Competing Company Takeover Proposal"), and
thereafter this Agreement is (x) terminated pursuant to Section 7.1(b)(i),
7.1(b)(ii) or 7.1(g) or (y) terminated by Purchaser pursuant to Section 7.1(c),
7.1(d) or 7.1(f), then the Company shall promptly, but in no event later than,
in the case of termination by Purchaser, two days after, or in the case of
termination by the Company, immediately prior to, termination of this Agreement
giving rise to the Company's payment obligation, pay Purchaser a fee equal to
$1,000,000 (the "Termination Fee"), payable by wire transfer of same day funds.
The Company acknowledges that the agreements contained in this Section 7.2(b)
are an integral part of the transactions contemplated by this Agreement and
that, without these agreements, Purchaser would not enter into this Agreement.
Notwithstanding the foregoing, no fee or expense reimbursement shall be paid
pursuant to this Section 7.2(b) if Purchaser shall be in material breach of its
obligations hereunder.
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<PAGE> 50
(c) Purchaser acknowledges that payments made under Section 7.2(b)
hereof shall constitute its exclusive remedy with respect to any termination of
this Agreement that gives rise to such payment obligation.
ARTICLE VIII
MISCELLANEOUS
8.1. Confidentiality. Unless (i) otherwise expressly provided in this
Agreement, (ii) required by applicable Law or any listing agreement with, or the
rules and regulations of, any applicable securities exchange or the NASD, (iii)
necessary to secure any required Consents as to which the other party has been
advised or (iv) consented to in writing by Purchaser and the Company, any
information or documents furnished in connection herewith shall be kept strictly
confidential by the Company, Purchaser and their respective officers, directors,
employees and agents. Prior to any disclosure pursuant to the preceding
sentence, the party intending to make such disclosure shall consult with the
other party regarding the nature and extent of the disclosure. Nothing contained
herein shall preclude disclosures to the extent necessary to comply with
accounting, SEC and other disclosure obligations imposed by applicable Law. To
the extent required by such disclosure obligations, Purchaser or the Company,
after consultation with the other party, may file with the SEC a Report on Form
8-K pursuant to the Securities Exchange Act with respect to the Merger, which
report may include, among other things, financial statements and pro forma
financial information with respect to the other party. In connection with any
filing with the SEC of a registration statement or amendment thereto under the
Securities Act, the Company or Purchaser, after consultation with the other
party, may include a prospectus containing any information required to be
included therein with respect to the Merger, including, but not limited to,
financial statements and pro forma financial information with respect to the
other party, and thereafter distribute said prospectus. Purchaser and the
Company shall cooperate with the other and provide such information and
documents as may be required in connection with any such filings. In the event
the Merger is not consummated, each party shall return to the other any
documents furnished by the other and all copies thereof any of them may have
made and will hold in absolute confidence any information obtained from the
other party except to the extent (i) such party is required to disclose such
information by Law or such disclosure is necessary or desirable in connection
with the pursuit or defense of a claim, (ii) such information was known by such
party prior to such disclosure or was thereafter developed or obtained by such
party independent of such disclosure or (iii) such information becomes generally
available to the public other than by breach of this Section 8.1. Prior to any
disclosure of information pursuant to the exception in clause (i) of the
preceding sentence, the party intending to disclose the same shall so notify the
party which provided the name in order that such party may seek a protective
order or other appropriate remedy should it choose to do so.
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<PAGE> 51
8.2. The Rainforest Cafe Friends of the Future Foundation. At the
Effective Time, the directors of Rainforest Cafe Friends of the Future
Foundation (the "Foundation"), shall resign and shall elect successor directors
as designated by Purchaser. For all purposes of this Agreement, the Foundation
shall be deemed a "Company Subsidiary."
8.3. Additional Approvals. If, contrary to the parties'
understanding, the approval of the shareholders of Purchaser shall be required
to effectuate the transactions contemplated hereby, Purchaser shall, as soon as
reasonably practicable, call, give notice of, convene and hold a meeting of its
shareholders for purpose of seeking to obtain such approval. Notwithstanding
anything to the contrary contained herein, no such approval of the shareholders
of Purchaser as described in the preceding sentence shall be deemed a breach of
any representation, warranty, covenant, agreement or other provision of this
Agreement.
8.4. Amendment and Modification. This Agreement may be amended,
modified or supplemented only by a written agreement among the Company,
Purchaser and Merger Sub.
8.5. Waiver of Compliance; Consents. Any failure of the Company on
the one hand, or Purchaser on the other hand, to comply with any obligation,
covenant, agreement or condition herein may be waived by Purchaser on the one
hand, or the Company on the other hand, only by a written instrument signed by
the party granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf of
any party hereto, such consent shall be given in writing in a manner consistent
with the requirements for a waiver of compliance as set forth in this Section
8.5.
8.6. Survival. The respective representations, warranties, covenants
and agreements of the Company and Purchaser contained herein or in any
certificates or other documents delivered prior to or at the Closing shall
survive the execution and delivery of this Agreement, notwithstanding any
investigation made or information obtained by the other party, but shall
terminate at the Effective Time, except for those covenants contained in
Sections 1.4, 1.5, 1.6, 1.7, 1.13, 5.7, 8.1 and 8.16 hereof, which shall survive
beyond the Effective Time in accordance with their terms.
8.7. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given when delivered in person,
by facsimile, receipt confirmed, or on the next business day when sent by
overnight courier or on the second succeeding business day when sent by
registered or certified mail (postage prepaid,
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return receipt requested) to the respective parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
(i) if to the Company, to:
Rainforest Cafe, Inc.
720 South Fifth Street
Hopkins, Minnesota 55343
Attention: Kenneth W. Brimmer
Telecopy: 612-945-5484
with a copy to (but which shall not constitute notice to the Company):
Maslon, Edelman, Borman & Brand
3300 Norwest Center
Minneapolis, Minnesota 55402
Attention: Neil P. Ayotte, Esq.
Telecopy: 612-672-8397
and
(ii) if to Purchaser or Merger Sub, to:
Landry's Seafood Restaurants, Inc.
1400 Post Oak Blvd., Suite 1010
Houston, Texas 77056
Attention: Steven L. Scheinthal
Telecopy: 713-623-4702
with a copy to (but which shall not constitute notice to Purchaser):
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attention: Paul T. Schnell, Esq.
Telecopy: 212-735-2001
8.8. Binding Effect; Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and
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their respective successors and permitted assigns. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto prior to the Effective Time without the prior written
consent of the other parties hereto.
8.9. Expenses. All costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such costs or expenses.
8.10. Governing Law. This Agreement shall be deemed to be made in, and
in all respects shall be interpreted, construed and governed by and in
accordance with the internal laws of, the State of Delaware. Each of the
Company, Purchaser and Merger Sub hereby irrevocably and unconditionally
consents to submit to the jurisdiction of the federal and state courts located
in Delaware for any litigation arising out of or relating to this Agreement and
the transactions contemplated hereby (and agrees not to commence any litigation
relating thereto except in such courts), waives any objection to the laying of
venue of any such litigation in such courts and agrees not to plead or claim in
any such court that such litigation brought therein has been brought in an
inconvenient forum.
8.11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which together be deemed an original, but all of which
together shall constitute one and the same instrument.
8.12. Interpretation. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement. As used in this Agreement, (i) the term
"Person" shall mean and include an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an association, an
unincorporated organization, a Governmental Authority and any other entity, (ii)
unless otherwise specified herein, the term "affiliate," with respect to any
person, shall mean and include any person controlling, controlled by or under
common control with such person, (iii) the term "subsidiary" of any specified
person shall mean any corporation any of the outstanding voting power of which,
or any partnership, joint venture, limited liability company or other entity any
of the total equity interest of which, is directly or indirectly owned by such
specified person, (iv) the term "knowledge," when used with respect to the
Company, shall mean the knowledge of the directors and executive officers of the
Company when used with respect to Purchaser, shall mean the knowledge of the
directors and executive officers of Purchaser, and (v) the term "including"
shall mean "including, without limitation".
8.13. Entire Agreement. This Agreement and the documents or
instruments referred to herein including, but not limited to, the Exhibit(s)
attached hereto and the Disclosure Schedules referred to herein, which
Exhibit(s) and Disclosure Schedules are incorporated herein by reference, embody
the entire agreement and understanding of the
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<PAGE> 54
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, representations, warranties, covenants, or undertakings,
other than those expressly set forth or referred to herein. This Agreement
supersedes all prior agreements and the understandings between the parties with
respect to such subject matter.
8.14. Severability. In case any provision in this Agreement shall be
held invalid, illegal or unenforceable in a jurisdiction, such provision shall
be modified or deleted, as to the jurisdiction involved, only to the extent
necessary to render the same valid, legal and enforceable, and the validity,
legality and enforceability of the remaining provisions hereof shall not in any
way be affected or impaired thereby nor shall the validity, legality or
enforceability of such provision be affected thereby in any other jurisdiction.
8.15. Specific Performance. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. Accordingly, the parties further agree that each party shall be
entitled to an injunction or restraining order to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction, this being in
addition to any other right or remedy to which such party may be entitled under
this Agreement, at law or in equity.
8.16. Third Parties. Nothing contained in this Agreement or in any
instrument or document executed by any party in connection with the transactions
contemplated hereby shall create any rights in, or be deemed to have been
executed for the benefit of, any person or entity that is not a party hereto or
thereto or a successor or permitted assign of such a party; provided however,
that the parties hereto specifically acknowledge that the provisions of Sections
5.7 and 5.9 hereof are intended to be for the benefit of, and shall be
enforceable by, the current or former employees, officers and directors of the
Company and/or the Company Subsidiaries affected thereby and their heirs and
representatives.
8.17. Disclosure Schedules. The Company and Purchaser acknowledge that
the Company Disclosure Schedule and the Purchaser Disclosure Schedule (i) relate
to certain matters concerning the disclosures required and transactions
contemplated by this Agreement, (ii) are qualified in their entirety by
reference to specific provisions of this Agreement and (iii) are not intended to
constitute and shall not be construed as indicating that such matter is required
to be disclosed, nor shall such disclosure be construed as an admission that
such information is material with respect to the Company or Purchaser, as the
case may be, except to the extent required by this Agreement.
8.18. Obligation of Purchaser. Whenever this Agreement requires Merger
Sub to take any action, such requirement shall be deemed to include an
undertaking on the part of Purchaser to cause Merger Sub to take such action.
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<PAGE> 55
IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement and
Plan of Merger to be signed and delivered by their respective duly authorized
officers as of the date first above written.
LANDRY'S SEAFOOD RESTAURANTS, INC.
By: /s/ Tilman J. Fertitta
-----------------------------------
Name: Tilman J. Fertitta
Title: Chairman, President and
Chief Executive Officer
RAINFOREST CAFE, INC.
By: /s/ Kenneth W. Brimmer
-----------------------------------
Name: Kenneth W. Brimmer
Title: President
LSR ACQUISITION CORP.
By: /s/ Tilman J. Fertitta
-----------------------------------
Name: Tilman J. Fertitta
Title: President
<PAGE> 1
Exhibit 99.1
------------
- --------------------------------------------------------------------------------
RAINFOREST CAFE, INC. A Wild Place to Shop and Eat(R)
720 South Fifth Street Hopkins, MN 55343
For Further Information Contact:
Kenneth Brimmer
President
www.rainforestcafe.com 612-945-5400
NASDAQ: RAIN
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RAINFOREST CAFE ANNOUNCES ACQUISITION
AGREEMENT
- --------------------------------------------------------------------------------
WITH LANDRY'S SEAFOOD RESTUARANTS, INC.
(MINNEAPOLIS, MINNESOTA - FEBRUARY 9, 2000) RAINFOREST CAFE, INC. (NASDAQ: RAIN)
RAINFOREST CAFE, A WILD PLACE TO SHOP AND EAT(R), today announced the signing of
a definitive merger agreement to be acquired by Landry's Seafood Restaurants,
Inc. ("LNY"/NYSE), for approximately $125 million to be paid by Landry's in a
combination of common stock (65%) and cash (35%). (based on an assumed value of
$9.00 per share of Landry's common stock). The transaction has an initial value
of $125 million, or $5.23 per Rainforest share (based on an assumed value of
$9.00 per share of Landry's common stock) or a current value of approximately
$5.54 per Rainforest share based upon today's closing price of Landry's.
However, the transaction value to the Rainforest shareholder will increase or
decrease depending upon changes in Landry's stock price.
Landry's is the second largest and fastest growing casual-dining seafood
restaurant chain in the Unites States. With over 150 restaurants in 30 states,
Landry's has been one of the preeminent restaurant growth stocks since becoming
a public company in 1993. The Company plans to open 15 to 16 new restaurants in
2000. Landry's operates its seafood restaurants under several brand names,
including the industry leading Joe's Crab Shack restaurant, Landry's Seafood
House division and the Crab House restaurants. Landry's also is the developer
and operator of the Kemah Boardwalk in Houston, Texas. This project is a 40-acre
development, largely owned in fee simple by Landry's, that includes eight
Landry's restaurants, an upscale hotel,
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<PAGE> 2
multiple retail shops, amusement attractions, plazas, fountains, and a 450-slip
marina. The entire project and its businesses are owned and operated by
Landry's.
Mr. Lyle Berman, Chairman of Rainforest Cafe, said "I have personally know the
Landry's management team since we started the Rainforest Cafe concept. Through
our business dealings over the years, and from watching the growth of the
Landry's chain of restaurants, I have developed the utmost respect for Tilman J.
Fertitta as a restaurant operator, businessman and as the leader of a public
company. As a result of my faith in his leadership and others in his
organization, I am confident this is the team to take Rainforest Cafe to the
next level. "
Upon the merger of Landry's and Rainforest, there will be no changes in the
executive officers or directors of Landry's and the company will have over
22,000 employees in 30 states. The combined companies expect to achieve in 2000
combined revenues of approximately $750 million on a pro forma full year basis
and EBITDA of nearly $90 million. Landry's management expects the merger to
close by May 1, 2000, and to be accretive to 2000 earnings by up to $0.05 per
share.
Under the terms of the merger agreement, Rainforest Cafe will be merged with a
subsidiary of Landry's, thereby becoming a wholly-owned subsidiary of Landry's.
The purchase method of accounting will be used for the merger. In the merger,
each share of Rainforest stock will be converted, at the shareholder's election,
into the right to receive $5.23 in cash, or .5816 shares of Landry's common
stock for each Rainforest common share outstanding, subject to mandatory
proration, so that as a result of the transaction, 65% of Rainforest shares will
be converted into Landry's stock and the remaining 35% into cash. Landry's will
issue approximately 9,028,000 common shares and pay $43,750,000 in cash for all
of the outstanding stock of Rainforest.
In connection with the merger, Lyle Berman and Steven Schussler, major
shareholders of Rainforest holding 7.8% and 2.8% of Rainforest's outstanding
shares, respectively, have entered into agreements with Landry's to, among other
things, vote their shares in favor of the transaction. Lyle Berman, Kenneth W.
Brimmer, Steven W. Schussler and Ercument Ucan, the Chairman of the Board/Chief
Executive Officer, President, Senior Vice President - Development, and Senior
Vice President - Retail, of Rainforest, respectively, have entered into employee
termination, consulting and non-competition agreements with Landry's.
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<PAGE> 3
The transaction is subject to customary conditions including, among others,
approval of Rainforest's shareholders and regulatory approvals and consents.
RAINFOREST CAFE, Inc. develops, owns and operates combination restaurant/retail
facilities offering a stimulating and entertaining rain forest theme providing
visitors with "A Wild Place to Shop and Eat"(R). There are currently 38
RAINFOREST CAFE(R) units open including 28 domestic locations and 10
international units. RAINFOREST CAFE, Inc. common shares are traded on the
NASDAQ National Market under the symbol RAIN.
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