STOCK PURCHASE AGREEMENT
By and Among
Casual Dining Ventures, Inc.
and
DAKA International, Inc.
and
Edgebrook, Inc.
Dated as of March 31, 1996
TABLE OF CONTENTS
ARTICLE I. PURCHASE AND SALE OF SHARES
Section 1.01. Plan; Purchase and Sale of the Shares
Section 1.02. Consideration
Section 1.03. Adjustments to Consideration
Section 1.04. General Releases
Section 1.05. Closing
Section 1.06. Deliveries at Closing
Section 1.07. Actions Subsequent to Closing
ARTICLE II. REPRESENTATION AND WARRANTIES OF EDGEBROOK
Section 2.01. Making of Representations and Warranties
Section 2.02. Ownership of Capital Stock; Related Rights
Section 2.03. Authority of Edgebrook
Section 2.04. Investment Representations
Section 2.05. General Release Representations
Section 2.06. Information Supplied to the Company
Section 2.07. Investment Banking; Brokerage
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.01. Making of Representations and Warranties
Section 3.02. Organization and Corporate Power
Section 3.03. Authority
Section 3.04. Investment Banking; Brokerage
Section 3.05. DAKA Common Stock
Section 3.06. Investment Representation
ARTICLE IV. COVENANTS
Section 4.01. Sale of Shares; Acquisition Proposals
Section 4.02. Consents and Approvals
Section 4.03. Breach of Representations and Warranties
Section 4.04. Confidentiality
Section 4.05. Non-Hire of ADC Employees
ARTICLE V. CONDITIONS
Section 5.01. Conditions to the Obligations of the Company
Section 5.02. Conditions to the Obligations of Edgebrook
(i)
ARTICLE VI. TERMINATION OF AGREEMENT
Section 6.01. Termination
Section 6.02. Effect of Termination
Section 6.03. Right to Proceed
ARTICLE VII. SURVIVAL; INDEMNIFICATION
Section 7.01. Survival of Representations, Warranties, Etc.
Section 7.02. Indemnification by Edgebrook
Section 7.03. Limitations on Indemnification by Edgebrook
Section 7.04. Indemnification by the Company
Section 7.05. No Limitation of Rights
Section 7.06. Notice; Defense of Claims
ARTICLE VIII. REGISTRATION RIGHTS
Section 8.01. Definitions
Section 8.02. Resale Registration
Section 8.03. Registration Procedures
Section 8.04. Registration Expenses
Section 8.05. Indemnification and Contribution
Section 8.06. Restrictions on Sale
Section 8.07. Transfer of Registration Rights
ARTICLE IX. MISCELLANEOUS
Section 9.01. Law Governing
Section 9.02. Notices
Section 9.03. Prior Agreements Superseded
Section 9.04. Assignability
Section 9.05. Fees and Expenses
Section 9.06. Publicity and Disclosures
Section 9.07. Captions
Section 9.08. Execution in Counterparts
Section 9.09. Certain Remedies; Severability
Section 9.10. Amendments; Waivers
(ii)
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made as of the 31st
day of March, 1996, by and among DAKA International, Inc., a Delaware
corporation ("DAKA"), Casual Dining Ventures, Inc., a Delaware corporation and a
wholly-owned subsidiary of DAKA ("CDVI"), and Edgebrook, Inc., a Minnesota
corporation ("Edgebrook") and a stockholder of Americana Dining Corp., a
Delaware corporation ("ADC"). DAKA and CDVI are referred to herein collectively
as the "Company."
W I T N E S S E T H
WHEREAS, Edgebrook is the record and beneficial owner of 505,000 shares
of common stock, par value $.01 per share, of ADC ("ADC Common Stock"); and
WHEREAS, the shares of ADC Common Stock owned beneficially and of
record by Edgebrook are hereinafter referred to collectively as the "Shares;"
and
WHEREAS, CDVI is the record and beneficial owner of 2,295,000 shares of
ADC Common Stock and of 466,667 shares of preferred stock, par value $.01 per
share, of ADC and DAKA is the record and beneficial owner of all issued and
outstanding shares of capital stock of CDVI; and
WHEREAS, Edgebrook desires to transfer to CDVI all of the Shares in
exchange for shares of the common stock, par value $.01 per share, of DAKA (the
"DAKA Common Stock") to be issued by DAKA to CDVI and immediately transferred by
CDVI to Edgebrook and CDVI desires to acquire from Edgebrook all of the Shares
in exchange for such shares of DAKA Common Stock in an arrangement qualifying as
a reorganization under the provisions of Section 368(a)(1)(B) of the Internal
Revenue Code of 1986, as amended (the "Code"), whereby, after giving effect to
such transactions, CDVI will own beneficially and of record in excess of 80% of
the issued and outstanding shares of ADC Common Stock, on the terms and
conditions hereinafter set forth;
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
ARTICLE I. PURCHASE AND SALE OF SHARES.
Section 1.01. Plan; Purchase and Sale of the Shares. CDVI and Edgebrook
hereby adopt a plan of reorganization pursuant to the provisions of Section
368(a)(1)(B) of the Code. The terms and conditions governing this plan of
reorganization are hereinafter set forth. Subject to the terms and conditions of
this Agreement and in reliance on the representations, warranties and covenants
herein set forth, CDVI hereby agrees to purchase from Edgebrook, and Edgebrook
hereby agrees to sell and deliver to CDVI, at the Closing (as hereinafter
defined in Section 1.05 hereof), the Shares free and clear of any and all liens,
claims, options, charges, encumbrances or rights of any nature ("Claims").
Section 1.02. Consideration. Subject to the terms and conditions of
this Agreement and in reliance on the representations, warranties and covenants
set forth herein, and in consideration of the sale and delivery by Edgebrook of
the Shares, CDVI hereby agrees to issue to Edgebrook .18182 of one share of DAKA
Common Stock, for each Share of ADC Common Stock sold and delivered to CDVI,
subject to possible adjustment, as provided in Section 1.03 hereof. No
fractional shares will be issued by CDVI to Edgebrook. Instead, the total number
of shares of DAKA Common Stock to be issued to Edgebrook (regardless of whether
Edgebrook's Shares are represented by a single or multiple certificates) will be
rounded up or down to the nearest number of whole shares of DAKA Common Stock
(or in the case of .5, to the next higher whole number). Reference is made to
the representations and warranties of Edgebrook set forth in Section 2.04
hereof, including, without limitation, the acknowledgment and understanding that
(a) the DAKA Common Stock to be issued to Edgebrook hereunder has not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
or any state securities laws, (b) the DAKA Common Stock to be issued to
Edgebrook hereunder will be subject to transfer restrictions under the
Securities Act and applicable state securities laws and may not be transferred
unless (x) it is subsequently registered under the Securities Act and applicable
state securities laws or (y) there is delivered to DAKA an opinion of counsel
satisfactory to DAKA that such registration is not required, and (c) DAKA will
place a restrictive legend to the foregoing effect on the certificate(s)
representing the DAKA Common Stock to be issued to Edgebrook hereunder.
Section 1.03. Adjustments to Consideration. In the event that (a) on
the Closing Date (as such term is hereinafter defined), the Closing Price (as
such term is hereinafter defined) of a share of DAKA Common Stock is less than
$21.00 per share and (b) Edgebrook elects to terminate this Agreement pursuant
to Section 6.01(e) hereof, then CDVI will have the right to rescind such
termination by adjusting the consideration for the Shares as follows, in which
case Edgebrook will be obligated to proceed with the sale and delivery of the
Shares: in consideration for each Share of ADC Common Stock to be sold by
Edgebrook, CDVI will deliver a fraction of one share of DAKA Common Stock
(determined to the nearest one-tenth of one-thousandth of a share) calculated by
multiplying (i) .18182 by (ii) the quotient of (x) $21.00 divided by (y) the
Closing Price. For purposes of this Agreement, the term "Closing Price" shall
mean the average per share closing sale price of DAKA Common Stock as reported
on the Nasdaq National Market over the twenty (20) trading days immediately
preceding the second trading day prior to the Closing Date. Notwithstanding the
foregoing, if between the date of this Agreement and the Closing Date the
outstanding shares of DAKA Common Stock or ADC Common Stock are changed into a
different number of shares or a different class or series, by reason of any
stock dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares, the consideration described above shall be
correspondingly and proportionately adjusted to reflect such stock dividend,
subdivision, reclassification, recapitalization, split, combination or exchange
of shares.
Section 1.04. General Releases.
(a) Edgebrook, by executing and delivering this Agreement, and
in consideration of the covenants and agreements of the Company contained herein
and other good and valuable consideration hereby:
(i) releases and discharges ADC, DAKA, and their respective subsidiaries, each
of the present and former stockholders, directors, officers, employees and
agents of ADC, DAKA, and their respective subsidiaries, affiliates of any
of the foregoing and their respective successors and assigns (each a
"Released Party") of and from any and all commitments, indebtedness, suits,
demands, claims, obligations and liabilities, contingent or otherwise, of
every kind and nature, including claims and causes of action both at law
and in equity, which Edgebrook and/or its successors, administrators or
assigns ever had, now has or, to the extent arising from or in connection
with any act, omission or state of facts taken or existing on or prior to
the date hereof and the Closing Date, may have after the date hereof
against any Released Party, whether asserted, unasserted, absolute,
contingent, known or unknown, other than claims or causes of action arising
under or pursuant to this Agreement, and each document executed in
connection herewith, including, without limitation, rights to
indemnification under Article VII of this Agreement; and
(ii) waives any rights Edgebrook may have under that certain Shareholders
Agreement dated as of March 28, 1994, by and among ADC and the stockholders
of ADC (the "Shareholders Agreement"), including, without limitation, any
rights of first refusal and any rights of pro rata participation.
(b) The foregoing release shall be fully effective and
unconditional upon execution and delivery of this Agreement and shall not be
affected by termination of this Agreement other than (i) termination by the
Company in breach of the provisions of Section 6.01 hereof or (ii) termination
by Edgebrook pursuant to Section 6.01(d) hereof.
Section 1.05. Closing. The sale and delivery and the purchase and
acceptance of the Shares (the "Closing") shall take place at the offices of the
Company on the day on which all of the conditions to Closing set forth in
Article V (other than conditions to be satisfied at the Closing which shall be
satisfied or waived as of the Closing) have been satisfied or waived in
accordance with the terms hereof, such day being referred to herein as the
Closing Date.
Section 1.06. Deliveries at Closing. At the Closing, (a) DAKA shall
issue to CDVI the number of shares of DAKA Common Stock to be delivered by CDVI
to Edgebrook hereunder in consideration of the Shares and CDVI shall execute in
favor of and deliver to DAKA a promissory note in an original principal amount
equal to the product of (x) the Closing Price on the Closing Date by (y) such
number of shares of DAKA Common Stock; (b) Edgebrook shall deliver a certificate
or certificates representing all Shares owned beneficially and of record by
Edgebrook, together with stock powers (or the equivalent) duly executed in 3
blank and such other documents as may be required to transfer to CDVI good and
valid title to such Shares free and clear of all Claims and (c) CDVI shall
deliver to Edgebrook a certificate or certificates representing the appropriate
number of shares of DAKA Common Stock bearing the legend provided in Section
2.04(d) hereof issued in the name of Edgebrook. All transfer, excise or similar
taxes arising out of the sale or delivery of the Shares to CDVI shall be paid by
the Edgebrook.
Section 1.07. Actions Subsequent to Closing. Edgebrook and the Company
after the Closing, and without further consideration, shall from time to time
execute and deliver or cause to be executed and delivered such further
instruments of transfer, assignments, consents or documents as may be reasonably
necessary or appropriate to carry out the intent and purposes hereof.
ARTICLE II. REPRESENTATION AND WARRANTIES OF EDGEBROOK.
Section 2.01. Making of Representations and Warranties. As a material
inducement to the Company to enter into this Agreement and to consummate the
transactions contemplated hereby, Edgebrook makes to the Company the
representations and warranties contained in this Article II.
Section 2.02. Ownership of Capital Stock; Related Rights.
(a) Edgebrook owns beneficially and of record all of the
Shares set forth in the preamble hereof. Upon delivery to CDVI at the Closing of
the certificates representing the Shares duly endorsed in blank for transfer or
with stock powers attached duly executed in blank, against delivery of the
consideration therefor described in Article I hereof, good and valid title to
the Shares shall be transferred to CDVI, free and clear of any and all Claims.
(b) Except for the Shareholders Agreement, Edgebrook has no
outstanding subscriptions, options, warrants, commitments, agreements,
arrangements or commitments of any kind for or relating to the issuance, or sale
of, or outstanding securities convertible into or exchangeable for, any shares
of capital stock of any class or other equity interests of ADC; (b) Edgebrook
has no preemptive right, right of first refusal or similar right to acquire the
Shares or any other shares of capital stock of ADC in connection with the
transactions contemplated by this Agreement or otherwise; (c) there are no
restrictions on the transfer of the Shares, other than those imposed by relevant
state and federal securities or insurance laws; (d) ADC has no obligation to
purchase, redeem or otherwise acquire any of the Shares or to pay any dividend
or make any other distribution in respect thereto; and (e) there are no voting
trusts or proxies relating to any of the Shares.
Section 2.03. Authority of Edgebrook.
(a) Edgebrook has full authority and power to enter into this
Agreement and each agreement, document and instrument to be executed and
delivered by or on behalf of Edgebrook pursuant to or as contemplated by this
Agreement and to carry out the transactions contemplated hereby and thereby.
This Agreement and each agreement, document and instrument to be executed and
delivered by Edgebrook or pursuant to or as contemplated by this Agreement
constitute, or when executed and delivered by Edgebrook will constitute, valid
and binding obligations of Edgebrook enforceable in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and other laws applicable to creditors' rights and remedies and to
the exercise of judicial discretion in accordance with general principles of
equity.
(b) The execution, delivery and performance by Edgebrook of
this Agreement and each such agreement, document and instrument:
(i) do not and will not violate any provision of the charter or by- laws or
governing partnership agreement or other organizational document, if any,
of Edgebrook;
(ii) do not and will not violate any laws, rules or regulations of the United
States or any state or other jurisdiction applicable to Edgebrook, or
require Edgebrook to obtain any approval, consent or waiver of, or to make
any filing with, any person (governmental or otherwise) that has not been
obtained or made; and
(iii)do not and will not result in a breach of, constitute a default under,
accelerate any obligation under or give rise to a right of termination of
any indenture or loan or credit agreement or any other agreement, contract,
instrument, mortgage, lien, lease, permit, authorization, order, writ,
judgment, injunction, decree, determination or arbitration award to which
Edgebrook is a party or by which the property of Edgebrook is bound or
affected, or result in the creation or imposition of any mortgage, pledge,
lien, security interest or other charge or encumbrance on the Shares or any
other asset or property of Edgebrook.
Section 2.04. Investment Representations.
(a) Edgebrook is acquiring the shares of DAKA Common Stock to
be issued to it hereunder in exchange for its Shares for Edgebrook's own account
for investment only and not with a view to, or with any intention of, a
distribution or resale thereof, in whole or in part, in violation of the
Securities Act or any rule or regulation thereunder, as amended from time to
time.
(b) Edgebrook (i) is not directly or indirectly controlled
by, or acting on behalf of any person which is, an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, required to
register as such under such Act or (ii) was not formed solely for the purpose of
acquiring the DAKA Common Stock to be issued to it hereunder.
(c) Edgebrook (i) has carefully reviewed the disclosure
information provided by the Company; (ii) has requested and received such other
information, as it has deemed relevant, regarding the Company for purposes of
evaluating its acquisition of the DAKA Common Stock to be issued to it
hereunder; (iii) is aware of the risks associated with an investment in the DAKA
Common Stock; and (iv) has not received any form of general solicitation or
advertising in connection with its decision to acquire the DAKA Common Stock to
be issued to it hereunder. Edgebrook has not relied in any way on any
information with respect to the DAKA Common Stock or the Company generally other
than the representations of the Company contained herein or materials furnished
by the Company in writing in connection herewith.
(d) Edgebrook acknowledges and understands that (i) the DAKA
Common Stock to be issued to it hereunder has not been registered under the
Securities Act, or any state securities laws; (ii) the DAKA Common Stock to be
issued to it hereunder will be subject to transfer restrictions under the
Securities Act and applicable state securities laws and may not be transferred
unless (x) it is subsequently registered under the Securities Act and applicable
state securities laws or (y) there is delivered to DAKA an opinion of counsel
satisfactory to DAKA that such registration is not required; and (iii) DAKA will
place a restrictive legend on the certificate(s) representing the DAKA Common
Stock to be issued to Edgebrook hereunder, containing the following language:
"The shares represented by this Certificate were issued
without registration under the Securities Act of 1933, as
amended (the "Act") and without registration under applicable
state securities laws, in reliance upon exemptions contained
in the Act and such laws. No transfer of these shares or any
interest therein may be made except pursuant to effective
registration statements under said laws unless this
Corporation has received an opinion of counsel satisfactory to
it that such transfer or disposition does not require
registration under said laws and, for any sales under Rule 144
of the Act, such evidence as it shall request for compliance
with that rule."
(e) Edgebrook (i) is able to bear the economic risks of the
acquisition of shares of DAKA Common Stock hereunder and has adequate means of
providing for current needs and possible contingencies; (ii) either alone or
with its advisors has had the opportunity to ask questions and receive answers
concerning the Company and the terms and conditions of the acquisition of DAKA
Common Stock in exchange for the Shares, as well as the opportunity to obtain
any additional information necessary to verify the accuracy of information
furnished in connection therewith which the Company possesses or can acquire
without unreasonable effort or expense; and (iii) together with its advisors, if
any, has such knowledge and experience in financial and business matters that
Edgebrook is capable of evaluating the merits and risks of this acquisition of
DAKA Common Stock in exchange for the Shares, and of making an informed
investment decision, and has relied solely upon the advice of its own counsel,
accountant and other advisors, with regard to the legal, investment, tax and
other considerations regarding such acquisition.
Section 2.05. General Release Representations. With respect to the
general release of the Released Parties, as defined in Section 1.04 hereof, by
Edgebrook (a) Edgebrook has not assigned any claim or possible claim against any
Released Party, (b) Edgebrook fully intends to release all claims against the
Released Parties including, without limitation, known, unknown and contingent
claims (other than those specifically reserved in Section 1.04 hereof), and
(iii) Edgebrook has consulted with counsel with respect to the general release
set forth in Section 1.04 hereof and has been fully apprised of the consequences
thereof.
Section 2.06. Information Supplied to the Company. To the best of
Edgebrook's knowledge, neither this Agreement, nor any certificate furnished
pursuant to or in connection with this Agreement by or on behalf of Edgebrook
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained therein not misleading
in the light of the circumstances under which they were made.
Section 2.07. Investment Banking; Brokerage. There are no claims for
investment banking fees, brokerage commissions, finder's fees or similar
compensation (exclusive of professional fees of lawyers and accountants) in
connection with the transactions contemplated by this Agreement based on any
arrangement or agreement made by or on behalf of Edgebrook.
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Section 3.01. Making of Representations and Warranties. As a material
inducement to Edgebrook to enter into this Agreement and to consummate the
transactions contemplated hereby, the Company hereby makes to it the
representations and warranties contained in this Article III.
Section 3.02. Organization and Corporate Power. Each of DAKA and CDVI
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware with full corporate power and authority to own or
lease its properties and to conduct its business in the manner and in the places
where such properties are owned or leased or such business is conducted and to
enter into this Agreement and each agreement, document and instrument to be
executed and delivered by it pursuant to or as contemplated by this Agreement
and to carry out the transactions contemplated hereby and thereby.
Section 3.03. Authority. The execution, delivery and performance of
this Agreement and each agreement, document and instrument to be executed and
delivered by the Company pursuant to this Agreement have been duly authorized by
all necessary corporate action of the Company, and no other corporate action on
the part of the Company is required in connection therewith. This Agreement and
each such agreement, document and instrument constitutes, or when executed and
delivered by the Company will constitute, valid and binding obligations of the
Company enforceable in accordance with their respective terms. The execution,
delivery and performance by the Company of this Agreement and each such
agreement, document and instrument:
(a) do not and will not violate any provisions of the
certificate of incorporation or by-laws of DAKA or CDVI;
(b) do not and will not result in any violation by the Company
of any laws, rules or regulations of the United States or any state or other
jurisdiction applicable to the Company or any of its affiliates, or require the
Company or any of its affiliates to obtain any approval, consent or waiver of,
or to make any filing of any notice with, any person (governmental or otherwise)
that has not been obtained or made; and
(c) do not and will not result in a breach of, constitute a
default under, accelerate any obligation under or give rise to a right of
termination of any indenture or loan or credit agreement or any other agreement,
contract, instrument, mortgage, lien, order, writ, judgment, injunction, decree,
determination or arbitration award to which the Company is a party or by which
the property of the Company is bound or affected, or result in the creation or
imposition of any mortgage, pledge, lien, security interest or other charge or
encumbrance on any property or asset owned by the Company except for such
occurrence that would not have a material adverse effect on the properties,
business, condition (financial or otherwise), or prospects of the Company.
Section 3.04. Investment Banking; Brokerage. There are no claims for
investment banking fees, brokerage commissions, finder's fees or similar
compensation (exclusive of professional fees of lawyers and accountants) in
connection with the transactions contemplated by this Agreement based on any
arrangement or agreement made by or on behalf of ADC or the Company.
Section 3.05. DAKA Common Stock. The DAKA Common Stock to be issued
hereunder in exchange for the Shares shall, when issued in accordance with this
Agreement, be validly issued, fully paid and non-assessable.
Section 3.06. Investment Representation. All Shares of ADC Common Stock
being acquired by CDVI under the terms of this Agreement are being acquired by
CDVI for investment for its own account without a view to, and not for sale in
connection with, any distribution of the ADC Common Stock.
ARTICLE IV. COVENANTS.
Section 4.01. Sale of Shares; Acquisition Proposals. Unless and until
this Agreement is terminated in accordance with its terms for any reason,
Edgebrook shall not directly or indirectly exchange, deliver, assign, pledge,
encumber or otherwise transfer or dispose of any Shares (including options in
respect thereof) owned beneficially and of record, nor shall Edgebrook directly
or indirectly grant any right of any kind to acquire, dispose of, vote or
otherwise control in any manner any Shares. Unless and until this Agreement is
terminated in accordance with its terms, neither Edgebrook nor any director,
officer, employee or agent of Edgebrook shall, directly or indirectly, (a) take
any action to solicit, initiate submission of or encourage proposals or offers
from any person relating to any acquisition or purchase of all or any portion of
the Shares or all or (other than in the ordinary course of business consistent
with past practice) any portion of any assets of, or any equity interest in,
Edgebrook or ADC, any merger or business combination with Edgebrook or ADC, or
any other acquisition, transaction or financing or joint venture involving
Edgebrook or ADC (an "Acquisition Proposal"), (b) participate in any
negotiations regarding an Acquisition Proposal with any person other than the
Company and its affiliates and representatives, (c) furnish any information with
respect to or afford access to the properties, books or records of Edgebrook or
ADC to any person who may consider making or has made an offer with respect to
an Acquisition Proposal other than the Company and its affiliates and
representatives, or (d) otherwise cooperate in any way with, or assist or
participate in, facilitate or encourage, any effort or attempt by any person
other than the Company and its affiliates and representatives to do or seek any
of the foregoing. Edgebrook shall promptly notify the Company upon receipt of
any offer or indication that any person is considering making an offer with
respect to an Acquisition Proposal or any request for information relative to
ADC, and will keep the Company fully informed of the status and details of any
such offer, indication or request.
Section 4.02. Consents and Approvals.
(a) Edgebrook will use its best efforts to cause all
conditions to the obligations of the parties hereunder to be satisfied and to
obtain or cause to be obtained prior to the Closing Date all necessary consents
and approvals to the performance of its obligations under this Agreement.
Edgebrook will cooperate in all respects with the Company with a view toward
obtaining timely satisfaction of the conditions to the Closing set forth herein.
(b) The Company will use its best efforts to cause all
conditions to the obligations of the parties hereunder to be satisfied and to
obtain or cause to be obtained prior to the Closing Date all necessary consents
and approvals to the performance of the obligations of the Company under this
Agreement. The Company will cooperate in all respects with Edgebrook with a view
toward obtaining timely satisfaction of the conditions to the Closing set forth
herein.
Section 4.03. Breach of Representations and Warranties. Promptly upon
Edgebrook becoming aware of any breach, or the impending or threatened
occurrence of any event which would cause or constitute a breach, or would have
caused or constituted a breach had such event occurred or been known prior to
the date hereof, of any of its representations and warranties contained in or
referred to in this Agreement and made as of the date hereof, Edgebrook shall
give detailed written notice thereof to the Company and shall use its best
efforts to prevent or promptly remedy the same.
Section 4.04. Confidentiality. In the course of Edgebrook's involvement
with ADC as stockholders or employees or otherwise, Edgebrook has had, and may
from time to time after the date hereof have, access to confidential records,
data, customer lists, trade secrets and similar confidential information owned
or used by ADC in the course of its business (the "Confidential Information").
Accordingly, Edgebrook agrees (a) to hold the Confidential Information in strict
confidence, (b) not to disclose Confidential Information to any person, and (c)
not to use, directly or indirectly, any of the Confidential Information for any
competitive or commercial purpose; provided, however, that the limitations set
forth above shall not apply to any Confidential Information which (i) is then
generally known to the public other than by reason of a breach of this Section
4.04; or (ii) is disclosed in accordance with an order of a court of competent
jurisdiction or applicable law. Upon request by the Company, all data,
memoranda, customer lists, notes, programs and other papers and items, and
reproductions thereof relating to the foregoing matters in Edgebrook's
possession or control shall be returned to the Company or ADC.
Section 4.05. Non-Hire of ADC Employees. ▇▇▇▇▇ ▇▇▇▇▇ ▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇▇
shall not hire or attempt to hire any officer or other employee of ADC or
encourage any officer or other employee to terminate his or her relationship
with ADC.
ARTICLE V. CONDITIONS.
Section 5.01. Conditions to the Obligations of the Company. The
obligation of the Company to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, prior to or at the Closing, of the
following additional conditions precedent:
(a) Representations; Warranties; Covenants. Each of the
representations and warranties of Edgebrook made pursuant to this Agreement
shall be true and correct in all material respects on and as of the Closing
Date, with the same effect as though made on and as of the Closing Date;
Edgebrook shall, on or before the Closing Date, have performed and satisfied all
of their covenants and agreements set forth herein, which by the terms hereof,
are to be performed and satisfied on or before the Closing Date; and Edgebrook
shall have delivered to the Company certificates executed as of the Closing Date
certifying to the foregoing effect.
(b) Other Documents. On the Closing Date, the Company shall
have received such other certificates and documents with respect to Edgebrook as
counsel for the Company shall have reasonably requested at least two (2)
business days prior to the Closing Date.
(c) No Actions or Proceedings. No action or proceeding by or
before any court, administrative body or governmental agency shall have been
instituted or threatened by or on behalf of Edgebrook or which seeks to enjoin,
restrain or prohibit, or might result in money damages to any party hereto in
respect of, this Agreement or the complete consummation of the transactions
contemplated by this Agreement, or which otherwise would in the reasonable
judgment of the Company make it inadvisable to consummate such transactions. No
law or regulation shall be in effect and no court order shall have been entered
in any action or proceeding instituted by any party which enjoins, restrains or
prohibits this Agreement or the complete consummation of the transactions
contemplated by this Agreement.
(d) Company Approvals and Consents. The Company shall have
made all filings with and notifications of governmental authorities, regulatory
agencies and other entities required to be made by it in connection with the
execution and delivery of this Agreement and the performance by it of the
transactions contemplated hereby; the Company shall have received all required
authorizations, waivers, consents and permits to permit the consummation of the
transactions contemplated by this Agreement, in form and substance reasonably
satisfactory to the Company, from all third parties.
(e) Deliveries. Edgebrook shall have delivered or entered into
the documents and instruments contemplated by this Agreement, in each case, in
form and substance satisfactory to the Company and its counsel.
(f) ADC Approvals and Consents. ADC shall have made all
filings with and notifications of governmental authorities, regulatory agencies
and other entities, if any, required to be made in connection with the execution
and delivery of this Agreement, the performance of the transactions contemplated
hereby and the continued operation of the business of ADC subsequent to the
Closing Date, and ADC shall have received all required authorizations, waivers,
consents and permits to permit the consummation of the transactions contemplated
by this Agreement, in the form and substance reasonably satisfactory to the
Company, with any conditions or limitations contained therein or imposed thereby
subject to the approval of the Company, from all third parties, including,
without limitation, applicable governmental authorities, regulatory agencies,
lessors, lenders and contract parties, required in connection with transactions
contemplated by this Agreement or by ADC's permits, leases, licenses and
franchises, to avoid a breach, default, termination, acceleration or
modification of any agreement, contract, instrument, mortgage, lien, lease,
permit, authorization, order, writ, judgment, injunction, decree, determination
or arbitration award as a result of the execution or performance of this
Agreement, or otherwise in connection with the execution and performance of this
Agreement.
(g) Material Adverse Changes. There shall not have been since
the date of this Agreement, any change or series of changes that, in the
reasonable business judgment of the Company, acting in good faith, have or could
reasonably be anticipated to have a material adverse effect on the properties,
business, condition (financial or otherwise) or prospects of ADC.
(h) Proceedings Satisfactory to the Company. All proceedings
to be taken by Edgebrook in connection with the consummation of the Closing and
the other transactions contemplated hereby and all certificates, opinions,
instruments and other documents required to effect the transaction contemplated
hereby reasonably requested by the Company will be reasonably satisfactory in
the form and substance to the Company and its counsel.
Section 5.02. Conditions to the Obligations of Edgebrook. The
obligation of Edgebrook to consummate the transactions contemplated by this
Agreement are subject to the fulfillment of, prior to or at the Closing, the
following additional conditions precedent:
(a) Representations; Warranties; Covenants. Each of the
representations and warranties of the Company contained in this Agreement shall
be true and correct in all material respects on and as of the Closing Date, with
the same effect as though made on and as of the Closing Date; the Company shall,
on or before the Closing Date, have performed and satisfied all of its covenants
and agreements set forth herein which by the terms hereof are to be performed
and satisfied by the Company on or before the Closing Date; and the Company
shall have delivered to Edgebrook a certificate as of the Closing Date
certifying to the foregoing effect.
(b) Other Documents. On the Closing Date, Edgebrook shall have
received such other certificates and documents as counsel to Edgebrook shall
have reasonably requested from the Company at least five (5) business days prior
to the Closing Date.
(c) No Actions or Proceedings. No action or proceeding by or
before any court, administrative body or governmental agency shall have been
instituted or threatened which seeks to enjoin, restrain or prohibit, or might
result in damages in respect of, this Agreement or the complete consummation of
the transactions as contemplated by this Agreement. No law or regulation shall
be in effect and no court order shall have been entered in any action or
proceeding instituted by any party which enjoins, restrains or prohibits this
Agreement or the complete consummation of the transactions as contemplated by
this Agreement.
ARTICLE VI. TERMINATION OF AGREEMENT.
Section 6.01. Termination. This Agreement may be terminated any time
prior to the Closing Date as follows:
(a) With the mutual consent of CDVI and Edgebrook.
(b) By either CDVI or Edgebrook, if the Closing has not
occurred on or before June 1, 1996; provided, however, that if the only reason
why the Closing has not occurred is that the condition set forth in Section
5.01(f) has not been satisfied, then such date shall be automatically extended
until August 31, 1996.
(c) By CDVI, if there has been a material misrepresentation or
breach of warranty on the part of Edgebrook in the representations and
warranties contained herein or a material breach of covenants on the part of
Edgebrook and the same has not been cured within 10 days after notice thereof.
In the event of any termination pursuant to this Section 6.01(c), written notice
setting forth the reasons therefor shall forthwith be given by CDVI to
Edgebrook.
(d) By Edgebrook, if there has been a material
misrepresentation or breach of warranty on the part of the Company in the
representations and warranties contained herein or a material breach of
covenants on the part of the Company and the same has not been cured within 10
days after notice thereof. In the event of any termination pursuant to this
Section 6.01(d), written notice setting forth the reasons therefor shall
forthwith be given by Edgebrook to the Company.
(e) By Edgebrook, if the Closing Price (as defined in Section
1.02 hereof) of the DAKA Common Stock is less than $21.00; provided, however,
that such termination shall be deemed rescinded and not effective if CDVI elects
to adjust the consideration for the Shares as provided in Section 1.03.
Notwithstanding anything herein to the contrary, the right to terminate
this Agreement under Section 6.01 shall not be available to any party to the
extent the failure of such party, respectively, to fulfill any of its
obligations under this Agreement has been the cause of, or resulted in, the
failure of the Closing to occur on or before such date (as a result, for
example, of an action or failure to act causing a failure of a condition
precedent).
Section 6.02. Effect of Termination. All obligations of the parties
hereunder shall cease upon any termination pursuant to Section 6.01; provided,
however, that (i) the provisions of this Article VI shall survive any
termination of this Agreement; (ii) Edgebrook's general release set forth in
Section 1.04 hereof shall be and remain fully effective and unconditional
regardless of such termination, except in the event of termination by Edgebrook
pursuant to Section 6.01(d); (iii) nothing herein shall relieve any party from
any liability for a material error or omission in any of its representations or
warranties contained herein or a material failure to comply with any of its
covenants, conditions or agreements contained herein; and (iv) any party may
proceed as further set forth in Section 6.03 below.
Section 6.03. Right to Proceed. Anything in this Agreement to the
contrary notwithstanding, if any of the conditions specified in Section 5.01
hereof have not been satisfied, the Company shall have the right to proceed with
the transactions contemplated hereby without waiving any of its rights
hereunder, and if any of the conditions specified in Section 5.02 hereof have
not been satisfied, Edgebrook, shall have the right to proceed with the
transactions contemplated hereby without waiving any of its rights hereunder.
ARTICLE VII. SURVIVAL; INDEMNIFICATION.
Section 7.01. Survival of Representations, Warranties, Etc. All
representations, warranties, agreements, covenants and obligations herein or in
any schedule or certificate delivered by any party incident to the transactions
contemplated hereby are material and may be relied upon by the party receiving
the same and shall survive the Closing regardless of any investigation by or
knowledge of such party and shall not merge into the performance of any
obligation by any party hereto.
Section 7.02. Indemnification by Edgebrook. Edgebrook, on behalf of
itself and its respective successors, administrators, estates, and permitted
assigns, agrees subsequent to the Closing Date to indemnify and hold harmless
the Company, ADC, their respective affiliates and their respective shareholders,
officers, directors, employees and agents (individually, a "Company Indemnified
Party" and collectively, the "Company Indemnified Parties") from and against and
in respect of all losses, liabilities, obligations, damages, deficiencies,
actions, suits, proceedings, demands, assessments, orders, judgments, fines,
penalties, costs and expenses (including the reasonable fees, disbursements and
expenses of attorneys, accountants and consultants) of any kind or nature
whatsoever (whether or not arising out of third-party claims and including all
amounts paid in investigation, defense or settlement of the foregoing)
sustained, suffered or incurred by or made against a party entitled to
indemnification (a "Loss" or "Losses"), as such losses are incurred, arising out
of, based upon or in connection with:
(i) conditions, circumstances or occurrences which constitute or result in any
breach of any representation or warranty made by Edgebrook in this
Agreement or in any schedule, exhibit, certificate, financial statement,
agreement or other instrument delivered under or in connection with this
Agreement, or by reason of any claim, action or proceeding asserted or
instituted arising out of any matter or thing covered by any such
representations or warranties (collectively, "Representation and Warranty
Claims");
(ii) any breach of any covenant or agreement made by Edgebrook in this Agreement
or in any schedule, exhibit, certificate, financial statement, agreement or
other instrument delivered under or in connection with this Agreement, or
by reason of any claim, action or proceeding asserted or instituted arising
out of any matter or thing covered by any such covenant or agreement;
(iii)any fees and expenses of Edgebrook (including without limitation legal
fees and accounting fees) relating to the execution, delivery and
performance of this Agreement paid, assumed or otherwise borne by ADC.
Section 7.03. Limitations on Indemnification by Edgebrook.
Notwithstanding anything herein to the contrary, recovery by Company Indemnified
Parties on account of indemnification claims made pursuant to Section 7.02
hereof shall not be subject to any limitation, and they shall be entitled to
dollar-for-dollar recovery, in seeking indemnification from Edgebrook with
respect to (i) Losses arising from fraud or an intentional misrepresentation on
the part of Edgebrook; (ii) Losses arising from intentional breach of a covenant
by Edgebrook; (iii) Losses involving a breach by Edgebrook of the
representations and warranties contained in Sections 2.02 and 2.03
Section 7.04. Indemnification by the Company. The Company agrees to
indemnify and hold harmless Edgebrook from and against and in respect of all
Losses sustained, suffered or incurred by or made against any of them arising
out of, based upon or in connection with (a) conditions, circumstances or
occurrences which constitute or result in any breach of any representation or
warranty made by the Company in this Agreement or in any schedule, exhibit,
certificate, financial statement, agreement or other instrument delivered under
or in connection with this Agreement, or by reason of any claim, action or
proceeding asserted or instituted arising out of any matter or thing covered by
any such representations and (b) any breach of any covenant or agreement made by
the Company in this Agreement or in any schedule, exhibit, certificate,
financial statement, agreement or other instrument delivered under or in
connection with this Agreement, or by reason of any claim, action or proceeding
asserted or instituted arising out of any matter or thing covered by any such
covenant or agreement.
Section 7.05. No Limitation of Rights. Notwithstanding anything herein
to the contrary, the limitations set forth in this Article VII shall apply only
with respect to post-Closing indemnification obligations and shall in no way
limit any rights the Company or Edgebrook may have in law or equity in the event
the Closing does not occur.
Section 7.06. Notice; Defense of Claims. Promptly after receipt by an
indemnified party of notice of any claim, liability or expense to which the
indemnification obligations hereunder would apply, the indemnified party shall
give notice thereof in writing to the indemnifying party, but the omission to so
notify the indemnifying party promptly will not relieve the indemnifying party
from any liability except to the extent that the indemnifying party shall have
been prejudiced as a result of the failure or delay in giving such notice. Such
notice shall state the information then available regarding the amount and
nature of such claim, liability or expense and shall specify the provision or
provisions of this Agreement under which the liability or obligation is
asserted. If within 20 days after receiving such notice the indemnifying party
gives written notice to the indemnified party stating that (i) it would be
liable under the provisions hereof for indemnity in the amount of such claim if
such claim were successful, (ii) that it shall be fully responsible (with no
reservation of any rights) for all liabilities relating to such claim, liability
or expense and that it will provide full indemnification (whether or not
otherwise required hereunder) to the indemnified party with respect to such
claim, liability or expense and (iii) that it disputes and intends to defend
against such claim, liability or expense at its own cost and expense, then
counsel for the defense shall be selected by the indemnifying party (subject to
the consent of the indemnified party which consent shall not be unreasonably
withheld) and the indemnified party shall not be required to make any payment
with respect to such claim, liability or expense as long as the indemnifying
party is conducting a good faith and diligent defense at its own expense;
provided, however, that the assumption of defense of any such matters by the
indemnifying party shall relate solely to the claim, liability or expense that
is subject or potentially subject to indemnification, and provided further that
prior to such assumption of defense the indemnifying party shall enter into an
agreement with the indemnified party in form and substance satisfactory to the
indemnified party pursuant to which the indemnifying party unconditionally
guarantees the payment and performance of any liability or obligation which may
arise out of or in any way relating to such claim, liability or expense or the
facts giving rise thereto. The indemnifying party shall have the right, with the
consent of the indemnified party, which consent shall not be unreasonably
withheld, to settle all indemnifiable matters related to claims by third parties
which are susceptible to being settled provided its obligation to indemnify the
indemnifying party therefor will be fully satisfied. The indemnifying party
shall keep the indemnified party apprised of the status of the claim, liability
or expense and any resulting suit, proceeding or enforcement action, shall
furnish the indemnified party with all documents and information that the
indemnified party shall reasonably request and shall consult with the
indemnified party prior to acting on major matters, including settlement
discussions. Notwithstanding anything herein stated to the contrary, the
indemnified party shall at all times have the right to fully participate in such
defense at its own expense directly or through counsel; provided, however, if
the named parties to the action or proceeding include both the indemnifying
party and the indemnified party and representation of both parties by the same
counsel would be inappropriate under applicable standards of professional
conduct, the expense of separate counsel for the indemnified party shall be paid
by the indemnifying party. If no such notice of intent to dispute and defend is
given by the indemnifying party, or if such diligent good faith defense is not
being or ceases to be conducted, the indemnified party shall, at the expense of
the indemnifying party, undertake the defense of (with counsel selected by the
indemnified party), and shall have the right to compromise or settle (exercising
reasonable business judgment), such claim, liability or expense. If such claim,
liability or expense is one that by its nature cannot be defended solely by the
indemnifying party, then the indemnified party shall make available all
information and assistance that the indemnifying party may reasonably request
and shall cooperate with the indemnifying party in such defense.
ARTICLE VIII. REGISTRATION RIGHTS.
Section 8.01. Definitions.
As used in this Article VIII, the following terms shall have the
following meanings:
"Advice" has the meaning set forth in Section 8.03.
"Affiliate" means, with respect to any specified person, any other
person who, directly or indirectly, controls, is controlled by, or is under
common control with such specified person.
"Commission" means the Securities and Exchange Commission.
"Controlling Persons" has the meaning set forth in Section 8.05(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor statute, and the rules and regulations of
the Commission promulgated thereunder.
"Holder" means (i) Edgebrook and (ii) each person (other than DAKA and
its Affiliates) to whom Edgebrook transfers Securities as provided in Section
8.07 hereof, if the person to whom such Securities are transferred acquires such
Securities as Registrable Securities.
"Lock-up Period" has the meaning set forth in Section 8.06.
"Lock-up Request" has the meaning set forth in Section 8.06.
"Prospectus" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, and by
all other amendments and supplements to the prospectus, including post-effective
amendments, and in each case including all material incorporated by reference or
deemed to be incorporated by reference in such prospectus.
"Registrable Securities" means the Securities; provided, however, that
any Securities shall cease to be Registrable Securities when (i) a Registration
Statement covering such Registrable Securities has been declared effective and
such Registrable Securities have been disposed of pursuant to such effective
Registration Statement, (ii) such Registrable Securities become eligible for
sale pursuant to Rule 144 (or any similar provision then in force) under the
Securities Act or (iii) such Securities cease to be outstanding.
"Registration Statement" means any registration statement of DAKA that
covers any of the Registrable Securities pursuant to the provisions of this
Agreement and all amendments and supplements to any such registration statement,
including post-effective amendments, in each case including the Prospectus, all
exhibits, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
"Securities" means the shares of DAKA Common Stock issued to Edgebrook
pursuant to this Agreement so long as they are owned beneficially and of record
by a Holder.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor statute, and the rules and regulations of the
Commission promulgated thereunder.
"Suspension Notice" has the meaning set forth in Section 8.03.
"Suspension Period" has the meaning set forth in Section 8.03.
Section 8.02. Resale Registration.
(a) Filing; Effectiveness. If on any one (1) occasion after
October 1, 1996, one or more Holders holding an aggregate of at least 9,000
Registrable Securities shall notify DAKA in writing that they intend to offer or
cause to be offered for public resale all or any portion of their Registrable
Securities, DAKA will notify all of the Holders of Registrable Securities of its
receipt of such notification and upon the written request of any such Holder
delivered to DAKA within 15 days after receipt from DAKA of such notification,
DAKA shall use reasonable efforts to prepare and file a registration statement
on Form S-3 (the "Resale Registration Statement") under the Securities Act
covering the resale by such Holders of their Registrable Securities pursuant to
Rule 415 under the Securities Act from time to time in transactions not
involving any underwritten public offering and use reasonable efforts (i) to
cause such Resale Registration Statement to be declared effective by the
Commission for such Registrable Securities as soon as practicable thereafter and
(ii) to keep the Resale Registration Statement continuously effective until the
earliest of (x) the date on which such Holders no longer hold any Registrable
Securities registered under the Resale Registration Statement or (y) the second
anniversary of the Closing Date; provided, however, that (A) upon the request of
one or more Holders holding an aggregate of at least 9,000 Registrable
Securities received prior to October 1, 1996, DAKA will proceed promptly and in
good faith to prepare the Resale Registration Statement, even if DAKA is not
required to file it with the Commission until October 1, 1996, so as to avoid a
delay past October 1, 1996 in making such filing and (B) if DAKA prior to
October 1, 1996 files any registration statement with the Commission under the
Securities Act (other than on Form S-4 or a similar form relating to business
combinations or exchanges or Form S-8 or a similar form relating to any employee
benefit plan), then DAKA shall give the Holders notice thereof and the Holders
may demand registration pursuant to this Section 8.02 immediately after such
filing. DAKA shall not be required to cause a registration statement requested
pursuant to this Section 8.02 to become effective prior to 90 days following the
effective date of a registration statement initiated by DAKA if any managing
underwriter named in such registration statement has advised DAKA in writing
that the registration or sale of additional securities by stockholders of DAKA
within such 90-day period would have a material adverse effect on the likelihood
of success of such underwritten offering; provided, however, that DAKA shall use
its best efforts to achieve such effectiveness promptly following such 90-day
period if the request pursuant to this Section 8.02 has been made prior to the
expiration of such 90-day period. DAKA may postpone the filing of any
Registration Statement required hereunder for a reasonable period of time, not
to exceed 60 days, if DAKA has been advised by outside legal counsel that such
filing would require the disclosure of a material transaction or other matter
and DAKA determines reasonably and in good faith that such disclosure would have
a material adverse effect on DAKA; provided, however, that DAKA shall (A) use
reasonable efforts to disclose such material transaction or other matter as soon
as in its good faith judgment it is prudent to do so and (B) may so postpone
such filing only if all other persons who are named as selling securityholders
under then effective registration statements filed by DAKA with the Commission
and all directors of DAKA are advised of the fact that a material transaction or
other matter is not being disclosed during the length of such postponement and
of the consequences of such nondisclosure under the Securities Act and the
Exchange Act.
(b) Effective Registration. A registration will not be deemed
to have been effected as a Resale Registration unless the Resale Registration
Statement with respect thereto has been declared effective by the Commission;
provided, however, that if after it has been declared effective, the offering of
Registrable Securities pursuant to a Resale Registration Statement is interfered
with by any stop order, injunction or other order or requirement of the
Commission or any other governmental agency or court, such Resale Registration
Statement will be deemed not to have become effective during the period of such
interference until the offering of Registrable Securities pursuant to such
Resale Registration Statement may legally resume.
Section 8.03. Registration Procedures. In connection with the
obligations of DAKA to effect or cause the registration of any Registrable
Securities pursuant to the terms and conditions of this Agreement, DAKA shall
use reasonable efforts to effect the registration and sale of such Registrable
Securities in accordance with the intended method of distribution thereof, and
in connection therewith:
(a) DAKA shall prepare and file with the Commission a
Registration Statement on Form S-3 or other similar form under the Securities
Act which permits secondary sales of securities in a "shelf registration," and
use reasonable efforts to cause such Registration Statement to become effective
and remain effective in accordance with the provisions of this Agreement;
(b) DAKA shall promptly prepare and file with the Commission
such amendments and post-effective amendments to each Registration Statement as
may be necessary to keep such Registration Statement effective for as long as
such registration is required to remain effective pursuant to the terms hereof;
shall cause the Prospectus to be supplemented by any required Prospectus
supplement, and, as so supplemented, to be filed pursuant to Rule 424 under the
Securities Act; and shall comply with the provisions of the Securities Act
applicable to it with respect to the disposition of all Registrable Securities
covered by such Registration Statement during the applicable period in
accordance with the intended methods of disposition by the Holders set forth in
such Registration Statement or supplement to the Prospectus;
(c) DAKA shall promptly furnish to any Holder such number of
copies of the Prospectus (including each preliminary Prospectus) and any
amendments or supplements thereto, as such Holder may reasonably request in
order to facilitate the public sale or other disposition of the Registrable
Securities being sold by such Holder;
(d) DAKA shall, on or prior to the date on which a
Registration Statement is declared effective, use reasonable efforts to register
or qualify the Registrable Securities covered by such Registration Statement
under such other securities or "blue sky" laws of such states of the United
States as any Holder requests; provided, however, that DAKA shall not be
required (i) to qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 8.03(d) or (ii)
to file any general consent to service of process;
(e) DAKA shall promptly notify each Holder, (i) when a
Prospectus or any Prospectus supplement or post-effective amendment has been
filed and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the
Commission or any state securities authority for amendments and supplements to a
Registration Statement and Prospectus or for additional information after the
Registration Statement has become effective, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of a Registration
Statement, (iv) of the issuance by any state securities commission or other
regulatory authority of any order suspending the qualification or exemption from
qualification of any of the Registrable Securities under state securities or
"blue sky" laws, and (v) of the happening of any event which makes any statement
made in a Registration Statement or related Prospectus untrue or which requires
the making of any changes in such Registration Statement or Prospectus so that
they will not contain any untrue statement of a material fact or omit to state
any 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. As soon as practicable following expiration of the Suspension
Period (as defined below), DAKA shall prepare and file with the Commission and
furnish a supplement or amendment to such Prospectus so that, as thereafter
deliverable to the purchasers of such Registrable Securities, such Prospectus
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
In the case of a Resale Registration Statement, each Holder, upon
receipt of any notice (a "Suspension Notice") from DAKA of the happening of any
event of the kind described in Section 8.03(e)(v), shall forthwith discontinue
disposition of the Registrable Securities pursuant to the Resale Registration
Statement covering such Registrable Securities until such Holder's receipt of
the copies of the supplemented or amended Prospectus contemplated by Section
8.03(e) or until it is advised in writing (the "Advice") by DAKA that the use of
the Prospectus may be resumed, and has received copies of any additional or
supplemental filings which are incorporated by reference in the Prospectus, and,
if so directed by DAKA, such Holder will, or will request any broker-dealer
acting as such Holder's agent or as an underwriter to, deliver to DAKA (at
DAKA's expense) all copies, other than permanent file copies then in such
Holder's or broker-dealer's possession, of the Prospectus covering such
Registrable Securities current at the time of receipt of such notice; provided,
however, that in no event shall the period from the date on which any Holder
receives a Suspension Notice to the date on which any Holder receives either the
Advice or copies of the supplemented or amended Prospectus contemplated by
Section 8.03(e) (the "Suspension Period") exceed 60 days; and provided further
that such Suspension Notice shall not be effective unless DAKA has
contemporaneously given an analogous notice to all other persons named as
selling securityholders in then effective registration statements filed by DAKA
with the Commission and to DAKA's directors. In the event that DAKA shall give
any Suspension Notice, the time periods for which a Resale Registration
Statement is required to be kept effective pursuant to Section 8.02 hereof shall
be extended by the number of days during the Suspension Period.
Section 8.04. Registration Expenses. DAKA shall bear all expenses
incurred in connection with the registration of the Registrable Shares pursuant
to Section 8.02 of this Agreement. Such expenses shall include, without
limitation, all printing, legal and accounting expenses incurred by DAKA and all
registration and filing fees imposed by the Commission, any state securities
commission or the NASDAQ National Market. The Holders shall be responsible for
any brokerage or underwriting commissions and taxes of any kind (including,
without limitation, transfer taxes) with respect to any disposition, sale or
transfer of Registrable Securities and for any legal, accounting and other
expenses incurred by them.
Section 8.05. Indemnification and Contribution.
(a) Indemnification by DAKA. DAKA agrees to indemnify and
hold harmless, to the full extent permitted by law, each Holder, its partners,
officers, directors, trustees, stockholders, employees and agents, and each
person who controls such Holder within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, or is under common control
with, or is controlled by, such Holder, together with the partners, officers,
directors, trustees, stockholders, employees and agents of such controlling
person (collectively, the "Controlling Persons"), from and against all losses,
claims, damages, liabilities and expenses (including without limitation
reasonable legal fees and expenses incurred by any Holder or any such
Controlling Person documented in writing) (collectively, the "Damages") to which
such Holder, its partners, officers, directors, trustees, stockholders,
employees and agents, and any such Controlling Person may become subject under
the Securities Act or otherwise, insofar as such Damages (or proceedings in
respect thereof) arise out of or are based upon any untrue or alleged untrue
statement of material fact contained in any Registration Statement (or any
amendment thereto) pursuant to which Registrable Securities were registered
under the Securities Act, or caused by any omission or alleged omission to state
therein a material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading, or caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Prospectus (as amended or supplemented if DAKA shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact necessary to make the statements
therein in light of the circumstances under which they were made not misleading,
except insofar as such Damages arise out of or are based upon any such untrue
statement or omission based upon information relating to such Holder furnished
in writing to DAKA by such Holder specifically for use therein; provided,
however, that DAKA shall not be liable to any Holder under this Section 8.05(a)
to the extent that any such Damages were caused by the fact that such Holder
sold Securities to a person as to whom it shall be established that there was
not sent or given, at or prior to the written confirmation of such sale, a copy
of the Prospectus as then amended or supplemented if, and only if, (i) DAKA has
previously furnished copies of such amended or supplemented Prospectus to such
Holder and (ii) such Damages were caused by any untrue statement or omission or
alleged untrue statement or omission contained in the Prospectus so delivered
which was corrected in such amended or supplemented Prospectus.
(b) Indemnification by the Holders. Each Holder agrees,
severally and not jointly, to indemnify and hold harmless DAKA, its
stockholders, directors, officers and each person, if any, who controls DAKA
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from DAKA to such
Holder, but only with reference to information relating to such Holder furnished
in writing to DAKA by such selling Holder specifically for use in any
Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto); provided, however, that such selling Holder
shall not be obligated to provide such indemnity to the extent that such Damages
result from the failure of DAKA to promptly amend or take action to correct or
supplement any such Registration Statement or Prospectus on the basis of
corrected or supplemental information provided by such selling Holder to DAKA
expressly for such purpose. In no event shall the liability of any Holder of
Registrable Securities hereunder be greater in amount than the amount of the
proceeds received by such Holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.
(c) Contribution. To the extent that the indemnification
provided for in paragraph (a) or (b) of this Section 8.05 is unavailable to an
indemnified party or insufficient in respect of any Damages, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such Damages in such proportion as is
appropriate to reflect the relative fault of DAKA on the one hand and the
Holders on the other hand in connection with the statements or omissions that
resulted in such Damages, as well as any other relevant equitable
considerations. The relative fault of DAKA on the one hand and of the Holders on
the other hand shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
DAKA or by the Holders and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
If indemnification is available under paragraph (a) or (b) of this
Section 8.05, the indemnifying parties shall indemnify each indemnified party to
the full extent provided in such paragraphs without regard to the relative fault
of said indemnifying party or indemnified party or any other equitable
consideration provided for in this Section 8.05(c).
DAKA and each Holder agrees that it would not be just or equitable if
contribution pursuant to this Section 8.05(c) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to herein.
Section 8.06. Restrictions on Sale. In the event of an underwritten
public offering for the account of DAKA, upon the written request (the "Lock-up
Request") of the managing underwriter (or underwriters) of such offering, each
Holder agrees not to effect any public sale or distribution of any securities
similar to those being registered in such offering (other than pursuant to such
offering), including, without limitation, through sales of Securities pursuant
to a Resale Registration Statement, during the 14 days prior to, and during the
90-day period beginning on the effective date of the Registration Statement
relating to such offering (the "Lock-up Period"); provided, however, that the
Holders shall not be required to comply with such Lock-up Request unless DAKA
simultaneously demands analogous restrictions on sale and uses all reasonable
efforts to obtain from all other persons who are contractually bound with DAKA
to comply with such Lock-up Requests and from DAKA's directors. In the event of
the delivery of a Lock-up Request, the time periods for which a Resale
Registration Statement is required to be kept effective pursuant to Section 8.02
hereof shall be extended by the number of days during the Lock-up Period.
Section 8.07. Transfer of Registration Rights. The registration rights
of Edgebrook and any Holders under this Article VIII may be transferred to any
transferee of Registrable Securities that acquires at least 1,000 shares of
Registrable Securities (appropriately adjusted for stock splits, stock dividends
and the like). Each such transferee shall be deemed to be a "Holder" for
purposes of this Article VIII.
ARTICLE IX. MISCELLANEOUS.
Section 9.01. Law Governing. This Agreement shall be construed under
and governed by the internal laws, and not the law of conflicts, of the State of
Minnesota.
Section 9.02. Notices. Any notice, request, demand or other
communication required or permitted hereunder shall be in writing and shall be
deemed to have been given if delivered or sent by facsimile transmission
(promptly followed by hard copy confirmation), upon receipt, or if sent by
registered or certified mail upon the sooner of the expiration of three days
after deposit in United States post office facilities properly addressed with
postage prepaid or acknowledgment of receipt, as follows:
To the Company: One Corporate Place
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇.
Senior Vice President and General Counsel
with a copy to: ▇▇▇▇▇▇▇, Procter & ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, P.C.
To Edgebrook: One Financial Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
or to such other address of which any party may notify the other parties as
provided above.
Section 9.03. Prior Agreements Superseded. This Agreement supersedes
all prior understandings and agreements among the parties relating to the
subject matter hereof.
Section 9.04. Assignability. This Agreement shall be assignable by the
Company (a) prior to the Closing to a subsidiary of the Company although no such
assignment shall relieve the Company of any liabilities or obligations under
this Agreement and (b) after the Closing, to any person. This Agreement shall
not otherwise be assignable by the Company without the prior written consent of
Edgebrook or (except as otherwise permitted by Section 8.07 hereof) by Edgebrook
without prior written consent of the Company. This Agreement shall be binding
upon and enforceable by, and shall inure to the benefit of, the parties hereto
and their respective successors, heirs, executors, administrators and permitted
assigns, and no others. Notwithstanding the foregoing, nothing in this Agreement
is intended to give any person not named herein the benefit of any legal or
equitable right, remedy or claim under this Agreement, except as expressly
provided herein.
Section 9.05. Fees and Expenses. Each of the parties to this Agreement
shall pay its own expenses and costs associated with the negotiation, execution
and delivery of this Agreement and any agreement or instrument contemplated
hereby and the consummation of the transactions contemplated hereby, including
all fees and expenses of counsel, accountants and financial advisors or other
professionals acting on behalf of such party.
Section 9.06. Publicity and Disclosures. None of the parties hereto nor
any of their respective stockholders, affiliates, officers, directors or
employees shall issue or cause the publication of any press release or other
announcement with respect to this Agreement or the transactions contemplated
hereby without the prior written consent of the Company and Edgebrook, except to
the extent disclosure is required by any applicable law or regulation or by any
court or authorized administrative or governmental agency.
Section 9.07. Captions. The captions in this Agreement are for
convenience only and shall not affect the construction or interpretation of any
term or provision hereof.
Section 9.08. Execution in Counterparts. For the convenience of the
parties and to facilitate execution, this Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same document.
Section 9.09. Certain Remedies; Severability. It is specifically
understood and agreed that any breach of this Agreement by any of the parties
will result in irreparable injury to the aggrieved party, that the remedy at law
alone will be an inadequate remedy for such breach and that, in addition to any
other remedy for such breach and that, in addition to any other remedy it may
have, such aggrieved party shall be entitled to enforce the specific performance
of this Agreement by the breaching party and to seek both temporary and
permanent injunctive relief, without the necessity of proving actual damages,
but without limitation of their rights to recover such damages. In case any of
the provisions contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable in any respect, any such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement, but this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had been limited or modified (consistent with its
general intent) to the extent necessary to make it valid, legal and enforceable,
or if it shall not be possible to so limit or modify such invalid, illegal or
unenforceable provision or part of a provision, this Agreement shall be
construed as if such invalid, illegal or unenforceable provision or part of a
provision had never been contained in this Agreement.
Section 9.10. Amendments; Waivers. This Agreement may not be amended or
modified except by a writing duly and validly executed by the Company and
Edgebrook. Any party hereto may waive any covenant or condition intended for its
benefit in its discretion, but delay on the part of any party in exercising any
right, power or privilege hereunder shall not operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right, power or privilege,
preclude any further exercise thereof or the exercise of any other such right,
power or privilege. The rights and remedies of any party arising out of or
otherwise in respect of any inaccuracy in or breach of any representation or
warranty, or any failure to perform or comply with any covenant or agreement,
contained in this Agreement shall in no way be limited by the fact that the act,
omission, occurrence or other state of facts upon which any claim of any such
inaccuracy, breach or failure is based may also be the subject matter of any
other representation, warranty, covenant or agreement contained in this
Agreement (or in any other agreement between the parties) as to which there is
no inaccuracy, breach or failure.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be executed as of the date set forth above.
CASUAL DINING VENTURES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President
DAKA INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President
EDGEBROOK, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: President
