AGREEMENT AND PLAN OF MERGER among KANGAROO HOLDINGS, INC., KANGAROO ACQUISITION, INC. and OSI RESTAURANT PARTNERS, INC. Dated as of November 5, 2006
Exhibit
2.1
AGREEMENT
AND PLAN OF MERGER
among
KANGAROO
HOLDINGS, INC.,
KANGAROO
ACQUISITION, INC.
and
Dated
as
of November 5, 2006
W/1081322v1
Table
of Contents
Page
ARTICLE
I
THE
MERGER
Section
1.1 The
Merger…………………………………………………………………………………………………………………………………………………………………1
Section
1.2 Closing………………………………………………………………………………………………………………………………………………………………………1
Section
1.3 Effective
Time………………………………………………………………………………………………………………………………………………………………2
Section
1.4 Effects
of the
Merger………………………………………………………………………………………………………………………………………………………2
Section
1.5 Certificate
of Incorporation and Bylaws of the Surviving
Corporation………………………………………………………………………………………………2
Section
1.6 Directors…………………………………………………………………………………………………………………………………………………………....……..…3
Section
1.7 Officers…………………………………………………………………………………………………………………………………………………………………....…3
ARTICLE
II
CONVERSION
OF SHARES; EXCHANGE OF CERTIFICATES
Section
2.1 Effect
on
Capital
Stock………………………………………………………………………………………………………………………………………………..………3
Section
2.2 Exchange
of
Certificates………………………………………………………………………………………………………………………………………………………5
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Section
3.1 Qualification,
Organization, Subsidiaries,
etc.………………………………………………………………………………………………………………………………8
Section
3.2 Capital
Stock……………………………………………………………………………………………………………………………………………………………....……9
Section
3.3 Corporate
Authority Relative to This Agreement; No
Violation…………………………………………………………………………………………………………11
Section
3.4 Reports
and Financial
Statements…………………………………………………………………………………………………………………………………...………12
Section
3.5 Internal
Controls and
Procedures……………………………………………………………………………………………………………………………………………13
Section
3.6 No
Undisclosed
Liabilities……………………………………………………………………………………………………………………………………………………13
Section
3.7 Compliance
with Law;
Permits……………………………………………………………………………………………………………………………………...…..……14
Section
3.8 Environmental
Laws and
Regulations………………………………………………………………………………………………………………….………...…………14
Section
3.9 Employee
Benefit
Plans…………………………………………………………………………………………………………………………………..………...…………15
Section
3.10 Absence
of Certain Changes or
Events……………………………………………………………………………………………………….………………...…………17
Section
3.11 Investigations;
Litigation…………………………………………………………………………………………………………………….…………………...…………17
Section
3.12 Schedule
13E-3/Proxy Statement; Other
Information……………………………………………………………………………………...…………………...…………17
Section
3.13 Tax
Matters…………………………………………………………………………………………………………………………………….....………………...…………18
Section
3.14 Labor
Matters…………………………………………………………………………………………………………………………………….………………...…………18
Section
3.15 Intellectual
Property……………………………………………………………………………………………………………………………….....………...….….………19
Section
3.16 Real
Property…………………………………………………………………………………………………………………………………………………………......……20
Section
3.17 Opinion
of Financial
Advisor…………………………………………………………………………………………………………………………………………......…20
Section
3.18 Required
Vote of the Company
Stockholders…………………………………………………………………………………………………………………...........……21
Section
3.19 Material
Contracts…………………………………………………………………………………………………………………………………………………….........…21
Section
3.20 Finders
or
Brokers…………………………………………………………………………………………………………………………………………………….........…21
Section
3.21 Insurance………………………………………………………………………………………………………………………………………………………………........…22
Section
3.22 Takeover
Statutes…………………………………………………………………………………………………………………………………………………….........…22
i
Section
3.23 Affiliate
Transactions……………………………………………………………………………………………………………………………………................…..……22
Section
3.24. Indebtedness……………………………………………………………………………………………………………………………………………………...............…22
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF PARENT AND MERGER SUB
Section
4.1 Qualification;
Organization, Subsidiaries,
etc.………………………………………………………………………………………………………....…..…..…………23
Section
4.2 Corporate
Authority Relative to This Agreement; No
Violation…………………………………………………………………………………….....…....…………23
Section
4.3 Investigations;
Litigation……………………………………………………………………………………………………………………………….….……........……24
Section
4.4 Schedule
13E-3/Proxy Statement; Other
Information……………………………………………………………………………………………….…………...........…24
Section
4.5. Financing……………………………………………………………………………………………………………………………………………….…………….…..…24
Section
4.6 Capitalization
of Merger
Sub………………………………………………………………………………………………………………………….…………….…..…25
Section
4.7 No
Vote
of Parent
Stockholders…………………………………………………………………………………………………………………….………………..……26
Section
4.8 Finders
or
Brokers……………………………………………………………………………………………………………………………………….....……….………26
Section
4.9 Lack
of
Ownership of Company Common
Stock…………………………………………………………………………………………………………..………….…26
Section
4.10 Interest
in
Competitors………………………………………………………………………………………………………………………………………...........….…26
Section
4.11 WARN
Act……………………………………………………………………………………………………………………………………………………………....…26
Section
4.12 No
Additional
Representations……………………………………………………………………………………………………………………………………..……26
Section
4.13. Solvency………………………………………………………………………………………………………………………………………………………………....…27
Section
4.14 Management
Agreements……………………………………………………………………………………………………………………………………………....…27
ARTICLE
V
CERTAIN
AGREEMENTS
Section
5.1 Conduct
of Business by the Company and
Parent…………………………………………………………………………………………..............…………………27
Section
5.2 Investigation………………………………………………………………………………………………………………………………………………..............………32
Section
5.3 No
Solicitation……………………………………………………………………………………………………………………………………………………...........…32
Section
5.4 Filings;
Other
Actions…………………………………………………………………………………………………………………………………………..............…35
Section
5.5 Stock
Options and Other Stock-Based Awards; Employee
Matters………………………………………………………………………………………….........…37
Section
5.6 Reasonable
Best
Efforts………………………………………………………………………………………………………………………………………...........……39
Section
5.7 Takeover
Statute………………………………………………………………………………………………………………………………………………….......……41
Section
5.8 Public
Announcements………………………………………………………………………………………………………………………………………...........……41
Section
5.9 Indemnification
and
Insurance……………………………………………………………………………………………………………………………...............……42
Section
5.10 Control
of
Operations……………………………………………………………………………………………………………………………………............………43
Section
5.11 Financing………………………………………………………………………………………………………………………………………………….................……43
ARTICLE
VI
CONDITIONS
TO THE MERGER
Section
6.1 Conditions
to Each Party’s Obligation to Effect the
Merger……………………………………………………………………………...........……………………45
Section
6.2 Conditions
to Obligation of the Company to Effect the
Merger……………………………………………………………………………….....…………………46
Section
6.3 Conditions
to Obligation of Parent to Effect the
Merger………………………………………………………………………………………….................………46
Section
6.4 Frustration
of Closing
Conditions……………………………………………………………………………………………………………………………….......…47
ARTICLE
VII
TERMINATION
Section
7.1 Termination
or
Abandonment……………………………………………………………………………………………………………………………................……47
ii
Section
7.2 Termination
Fees……………………………………………………………………………………………………………………………....................………………49
ARTICLE
VIII
MISCELLANEOUS
Section
8.1 No
Survival of Representations and
Warranties……………………………………………………………………………………….............................…………51
Section
8.2 Expenses…………………………………………………………………………………………………………………………………………................................…51
Section
8.3 Counterparts;
Effectiveness……………………………………………………………………………………………………………………...............................…51
Section
8.4 Governing
Law…………………………………………………………………………………………………………………………………….........................……51
Section
8.5 Jurisdiction;
Enforcement…………………………………………………………………………………………………………………………...........................…51
Section
8.6 WAIVER
OF
JURY
TRIAL……………………………………………………………………………………………………………………….............................…52
Section
8.7 Notices……………………………………………………………………………………………………………………………………………..............................…52
Section
8.8 Assignment;
Binding
Effect……………………………………………………………………………………………………………………..............................…54
Section
8.9 Severability…………………………………………………………………………………………………………………………………………...........................…54
Section
8.10 Entire
Agreement; No Third-Party
Beneficiaries………………………………………………………………………………………………..........................…54
Section
8.11 Amendments;
Waivers………………………………………………………………………………………………………………………………....................…55
Section
8.12 Headings………………………………………………………………………………………………………………………………………….............................…55
Section
8.13 Interpretation………………………………………………………………………………………………………………………………………….....................…55
Section
8.14. Definitions……………………………………………………………………………………………………………………………………..........................………55
iii
AGREEMENT
AND PLAN OF MERGER,
dated
as of November 5, 2006 (this “Agreement”),
among
Kangaroo Holdings, Inc., a Delaware corporation (“Parent”),
Kangaroo Acquisition, Inc., a Delaware corporation and a direct wholly owned
subsidiary of Parent (“Merger
Sub”),
and
OSI Restaurant Partners, Inc., a Delaware corporation (the “Company”).
WHEREAS,
a committee (the “Special
Committee”)
of the
board of directors of the Company (the “Board
of Directors”)
formed
for the purpose of, among other matters, evaluating and making a recommendation
to the full Board of Directors with respect to the merger of Merger Sub with
and
into the Company (the “Merger”)
upon
the terms and subject to the conditions set forth in this Agreement in
accordance with the General Corporation Law of the State of Delaware (the
“DGCL”)
has
determined, and the Board of Directors has determined, that it is in the best
interests of the Company and its stockholders, and declared it advisable, to
enter into this Agreement with Parent and Merger Sub providing for the Merger,
upon the terms and subject to the conditions set forth in this Agreement, and
each of the Special Committee and the Board of Directors has, as of the date
of
this Agreement, approved and adopted this Agreement in accordance with the
DGCL,
upon the terms and subject to the conditions set forth in this Agreement, and
recommended its approval and adoption by the stockholders of the
Company;
WHEREAS,
the board of directors of Merger Sub has approved and adopted this Agreement
and
approved the Merger and the other transactions contemplated by this
Agreement;
WHEREAS,
the board of directors of Parent, and Parent, as the sole stockholder of Merger
Sub, in each case, have approved and adopted this Agreement and approved the
Merger and the other transactions contemplated by this Agreement;
and
WHEREAS,
Parent, Merger Sub and the Company desire to make certain representations,
warranties and agreements specified in this Agreement in connection with this
Agreement.
NOW,
THEREFORE, in consideration of the foregoing and the representations, warranties
and agreements contained in this Agreement, and intending to be legally bound
hereby, Parent, Merger Sub and the Company agree as follows:
ARTICLE
I
THE
MERGER
Section
1.1. The
Merger.
At the
Effective Time, upon the terms and subject to the conditions set forth in this
Agreement, and in accordance with the applicable provisions of the DGCL, Merger
Sub shall be merged with and into the Company, whereupon the separate corporate
existence of Merger Sub shall cease and the Company shall continue as the
surviving corporation in the Merger (the “Surviving
Corporation”)
and a
wholly owned subsidiary of Parent.
Section
1.2. Closing.
The
closing of the Merger (the “Closing”)
shall
take place at the offices of Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 9:00 a.m., local time, on a date to be specified
by the parties (the “Closing
Date”)
which
shall be no later than the third business day after the satisfaction or waiver
(to the extent
1
permitted
by applicable Law) of the conditions set forth in Article VI (other than
those
conditions that by their nature are to be satisfied at the Closing, but subject
to the satisfaction or waiver of such conditions) (the “Satisfaction
Date”),
or at
such other place, date and time as the Company and Parent may agree in writing;
provided,
however,
that if
the Marketing Period has not ended by the Satisfaction Date, the Closing
shall
occur on the date following the Satisfaction Date that is the earliest to
occur
of (a) a date during the Marketing Period to be specified by Parent on no
less
than three business days’ notice to the Company, (b) the final day of the
Marketing Period, and (c) if the Core Financial Information shall have been
furnished pursuant to Section 5.11(b) on or prior to April 2, 2007, the End
Date.
Section
1.3. Effective
Time.
On the
Closing Date, immediately after the Closing, the parties shall cause the Merger
to be consummated by executing and filing a certificate of merger (the
“Certificate
of Merger”)
with
the Secretary of State of the State of Delaware and make all other filings
or
recordings required under the DGCL in connection with the Merger. The Merger
shall become effective at such time as the Certificate of Merger is duly filed
with the Secretary of State of the State of Delaware, or at such later time
as
the parties shall agree and as shall be set forth in the Certificate of Merger
(such time as the Merger becomes effective, the “Effective
Time”).
Section
1.4. Effects
of the Merger.
The
effects of the Merger shall be as provided in this Agreement and in the
applicable provisions of the DGCL. Without limiting the generality of the
foregoing, at the Effective Time, all the property, rights, privileges, powers
and franchises of the Company and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and Merger
Sub
shall become the debts, liabilities and duties of the Surviving Corporation,
all
as provided under the DGCL and the other applicable Laws of the State of
Delaware. At and after the Effective Time, the officers and directors of the
Surviving Corporation will be authorized to execute and deliver, in the name
and
on behalf of the Company or Merger Sub, any deeds, bills of sale, assignments
or
assurances and to take and do, in the name and on behalf of the Company or
Merger Sub, any other actions and things to vest, perfect or confirm of record
or otherwise in the Surviving Corporation any and all right, title and interest
in, to and under any of the rights, properties or assets of the
Company.
Section
1.5. Certificate
of Incorporation and Bylaws of the Surviving Corporation.
(a) The
certificate of incorporation of Merger Sub as in effect at the Effective Time,
in a form reasonably acceptable to the Special Committee, shall be the
certificate of incorporation of the Surviving Corporation until thereafter
amended in accordance with the provisions thereof and the provisions of this
Agreement and applicable Law, in each case consistent with the obligations
set
forth in Section 5.9; provided,
however,
that
Article I of the certificate of incorporation of the Surviving Corporation
shall
be amended in its entirety to read as follows: “The name of the corporation is
OSI Restaurant Partners, Inc.”
(b) The
bylaws of Merger Sub as in effect at the Effective Time, in a form reasonably
acceptable to the Special Committee, shall be the bylaws of the Surviving
Corporation until thereafter amended in accordance with the provisions thereof
and the
2
provisions
of this Agreement and applicable Law, in each case consistent with the
obligations set forth in Section 5.9.
Section
1.6. Directors.
Subject
to applicable Law, the directors of Merger Sub immediately prior to the
Effective Time shall be the initial directors of the Surviving Corporation
and
shall hold office until their respective successors are duly elected and
qualified, or their earlier death, resignation or removal.
Section
1.7. Officers.
The
officers of the Company immediately prior to the Closing Date shall be the
initial officers of the Surviving Corporation and shall hold office until their
respective successors are duly elected and qualified, or their earlier death,
resignation or removal.
ARTICLE
II
CONVERSION
OF SHARES; EXCHANGE OF CERTIFICATES
Section
2.1. Effect
on Capital Stock.
At the
Effective Time, by virtue of the Merger and without any action on the part
of
the Company, Merger Sub or the holders of any securities of the Company or
Merger Sub:
(a) Conversion
of Company Common Stock.
Subject
to Sections 2.1(b), 2.1(d), 2.1(e) and 5.5(a)(iii), each issued and outstanding
share of common stock, par value $0.01 per share, of the Company outstanding
immediately prior to the Effective Time (such shares, collectively,
“Company
Common Stock,”
and
each, a “Share”),
other
than any Cancelled Shares (to the extent provided in Section 2.1(c)) and any
Dissenting Shares (to the extent provided for in Section 2.1(f)) shall thereupon
be converted automatically into and shall thereafter represent the right to
receive $40.00 in cash (the “Merger
Consideration”).
All
Shares that have been converted into the right to receive the Merger
Consideration as provided in this Section 2.1 shall be automatically cancelled
and shall cease to exist, and the holders of certificates which immediately
prior to the Effective Time represented such Shares shall cease to have any
rights with respect to such Shares other than the right to receive the Merger
Consideration.
(b) Rollover
Shares.
Notwithstanding anything in this Agreement to the contrary, each Share
(including a Restricted Share, as defined in Section 5.5(a)(iii) below) that
is
issued and outstanding immediately prior to the Effective Time and that is
owned, beneficially or of record, by any person that is a party to an Employee
Rollover Agreement or a Founder Rollover Agreement (each as hereinafter defined)
and that is expressly designated in such Employee Rollover Agreement or Founder
Rollover Agreement as a “Rollover Share” (each such share, a “Rollover Share”
and each such person, a “Participating
Holder”),
shall
be cancelled immediately prior to the Effective Time and converted into the
number of validly issued, fully paid and nonassessable shares of common stock
of
Parent as described on Schedule A to this Agreement (the “Parent
Common Stock”),
and
shall be subject to terms and conditions as set forth in (A) agreements to
be
entered into between certain employees of the Company who will be Participating
Holders and Parent (the “Employee
Rollover Agreements”)
and
(B) agreements to be entered into between certain stockholders of the Company
who will be
3
Participating
Holders and Parent (the “Founder
Rollover Agreements”).
As of
immediately prior to the Effective Time, the Rollover Shares shall cease
to
exist, and each holder of a certificate representing any such Rollover Shares
shall cease to have any rights with respect thereto, except the right to
receive
the shares of Parent Common Stock as set forth in this Section
2.1(b).
(c) Company,
Parent and Merger Sub-Owned Shares.
Each
Share that is owned, directly or indirectly, by Parent or Merger Sub immediately
prior to the Effective Time or held by the Company, or any Subsidiary of the
Company, immediately prior to the Effective Time (in each case, other than
any
such Shares held on behalf of third parties) (the “Cancelled
Shares”)
shall,
by virtue of the Merger and without any action on the part of the holder
thereof, be cancelled and retired and shall cease to exist, and no consideration
shall be delivered in exchange therefor.
(d) Conversion
of Merger Sub Common Stock.
At the
Effective Time, by virtue of the Merger and without any action on the part
of
the holder thereof, each share of common stock, par value $0.01 per share,
of
Merger Sub issued and outstanding immediately prior to the Effective Time shall
be converted into and become one validly issued, fully paid and nonassessable
share of common stock, par value $0.01 per share, of the Surviving Corporation
with the same rights, powers and privileges as the shares so converted and
shall
constitute the only outstanding shares of capital stock of the Surviving
Corporation. From and after the Effective Time, all certificates representing
the common stock of Merger Sub shall be deemed for all purposes to represent
the
number of shares of common stock of the Surviving Corporation into which they
were converted in accordance with the immediately preceding
sentence.
(e) Adjustments.
If at
any time during the period between the date of this Agreement and the Effective
Time, any change in the outstanding shares of capital stock of the Company
shall
occur as a result of any reclassification, recapitalization, stock split
(including a reverse stock split) or combination, exchange or readjustment
of
shares, or any stock dividend or stock distribution with a record date during
such period (excluding, in each case, normal quarterly cash dividends), the
Merger Consideration shall be equitably adjusted to reflect such
change.
(f) Dissenting
Shares.
(i)
Notwithstanding anything contained in this Agreement to the contrary, no Shares
issued and outstanding immediately prior to the Effective Time, the holder
of
which (A) has not voted in favor of the Merger or consented thereto in writing,
(B) has demanded its rights to appraisal in accordance with Section 262 of
the
DGCL, and (C) has not effectively withdrawn or lost its rights to appraisal
(the
“Dissenting
Shares”),
shall
be converted into or represent a right to receive the Merger Consideration
pursuant to Section 2.1(a). By virtue of the Merger, all Dissenting Shares
shall
be cancelled and shall cease to exist and shall represent the right to receive
only those rights provided under the DGCL. From and after the Effective Time,
a
holder of Dissenting Shares shall not be entitled to exercise any of the voting
rights or other rights of a stockholder, member or equity owner of the Surviving
Corporation. Any portion of the Merger Consideration made available to the
Paying Agent pursuant to Section 2.2 to pay for shares of Company Common Stock
for which appraisal rights have been perfected shall be returned to Parent
upon
demand.
4
(ii) Notwithstanding
the provisions of this Section 2.1(f), if any holder of Shares who demands
dissenters’ rights shall effectively withdraw or lose (through failure to
perfect or otherwise) the right to dissent or its rights of appraisal, then,
as
of the later of the Effective Time and the occurrence of such event, such
holder’s Shares shall no longer be Dissenting Shares and shall automatically be
converted into and represent only the right to receive the Merger Consideration,
without any interest thereon and less any required withholding
Taxes.
(iii) The
Company shall give Parent (A) notice of any written demands for dissenters’
rights of any Shares, withdrawals of such demands, and any other instruments
served pursuant to the DGCL and received by the Company which relate to any
such
demand for dissenters’ rights and (B) the opportunity reasonably to direct all
negotiations and proceedings (subject to the Company’s right to object to any
actions or positions taken by Parent that it deems, in its sole discretion,
unreasonable) with respect to demands for dissenters’ rights under the DGCL. The
Company shall not, except with the prior written consent of Parent (which shall
not be unreasonably withheld or delayed), make any payment with respect to
any
demands for dissenters’ rights or offer to settle or settle any such
demands.
Section
2.2. Exchange
of Certificates.
(a) Paying
Agent.
Prior
to the Effective Time, Parent shall deposit, or shall cause to be deposited,
with a bank or trust company that is organized and doing business under the
Laws
of the United States or any state thereof, and has a combined capital and
surplus of at least $500 million, that shall be appointed to act as a paying
agent hereunder and approved in advance by the Company in writing (and pursuant
to an agreement in form and substance reasonably acceptable to Parent and the
Company) (the “Paying
Agent”),
in
trust for the benefit of holders of the Shares, the Company Stock Options and
the Director Award Accounts (collectively, the “Option
and Stock-Based Award Consideration”),
cash
in U.S. dollars sufficient to pay (i) the aggregate Merger Consideration in
exchange for all of the Shares outstanding immediately prior to the Effective
Time (other than the Cancelled Shares, the Rollover Shares and the Dissenting
Shares), payable upon due surrender of the certificates that immediately prior
to the Effective Time represented Shares (“Certificates”)
(or
effective affidavits of loss in lieu thereof) or non-certificated Shares
represented by book-entry (“Book-Entry
Shares”)
pursuant to the provisions of this Article II and (ii) the Option and
Stock-Based Award Consideration payable pursuant to Section 5.5 (such cash
referred to in subsections (a)(i) and (a)(ii) being hereinafter referred to
as
the “Exchange
Fund”).
(b) Payment
Procedures.
(i) As
soon
as reasonably practicable after the Effective Time and in any event not later
than the second business day following the Effective Time, the Paying Agent
shall mail (x) to each holder of record of Shares whose Shares were converted
into the Merger Consideration pursuant to Section 2.1(a), (A) a letter of
transmittal (which shall specify that delivery shall be effected, and risk
of
loss and title to Certificates shall pass, only upon delivery of Certificates
(or effective affidavits of loss in lieu thereof) or Book-Entry Shares to the
Paying Agent and shall be in such form and have such other provisions as Parent
and the Company may mutually agree), and (B) instructions for use in effecting
the surrender of Certificates (or
5
effective
affidavits of loss in lieu thereof) or Book-Entry Shares in exchange for
the
Merger Consideration, (y) to each holder of a Company Stock Option or a Director
Award Account, a check in an amount, if any, due and payable to such holder
pursuant to Section 5.5(a)(i) or Section 5.5(a)(iii), respectively, in respect
of such Company Stock Option or Director Award Account and (z) to each holder
of
a certificate representing Rollover Shares who is party to a Founder Rollover
Agreement or an Employee Rollover Agreement, upon surrender to the Surviving
Corporation of such certificate and such other documents as may reasonably
be
required by the Surviving Corporation and Parent, a certificate or certificates
representing the number of shares of Parent Common Stock to which such holder
is
entitled pursuant to Section 2.1(b), subject to the terms and conditions
of the
holder’s Employee Rollover Agreement or Founder Rollover Agreement, as the case
may be. No interest shall be paid or accrued on such amounts. In the event
that
any Certificate represents both Rollover Shares and Shares entitled to receive
the Merger Consideration, the Paying Agent shall take such action as necessary
to split the Certificates accordingly.
(ii) Upon
surrender of Certificates (or effective affidavits of loss in lieu thereof)
or
Book-Entry Shares to the Paying Agent together with such letter of transmittal,
duly completed and validly executed in accordance with the instructions thereto,
and such other documents as may customarily be required thereby or by the Paying
Agent, the holder of such Certificates or Book-Entry Shares shall be entitled
to
receive in exchange therefor a check in an amount equal to the product of (x)
the number of Shares represented by such holder’s properly surrendered
Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry
Shares multiplied by (y) the Merger Consideration. No interest will be paid
or
accrued on any amount payable upon due surrender of Certificates or Book-Entry
Shares. In the event of a transfer of ownership of Shares that is not registered
in the transfer records of the Company, a check for any cash to be paid upon
due
surrender of the Certificate may be paid to such a transferee if the Certificate
formerly representing such Shares is presented to the Paying Agent, accompanied
by all documents required to evidence and effect such transfer and to evidence
to the reasonable satisfaction of the Surviving Corporation that any applicable
stock transfer Taxes have been paid or are not applicable. Until surrendered
as
contemplated by this Section 2.2(b), each Certificate and each Book-Entry Share
shall be deemed at any time after the Effective Time to represent only the
right
to receive upon such surrender the applicable Merger Consideration as
contemplated by this Article II.
(iii) The
Paying Agent shall be entitled to deduct and withhold from the consideration
otherwise payable under this Agreement to any holder of Shares or holder of
Company Stock Options, such amounts as are required to be withheld or deducted
under the Internal Revenue Code of 1986 (the “Code”)
or any
provision of state, local or foreign Tax Law with respect to the making of
such
payment. To the extent that amounts are so withheld or deducted and paid over
to
the applicable Governmental Entity, such withheld or deducted amounts shall
be
treated for all purposes of this Agreement as having been paid to the holder
of
the Shares or holder of the Company Stock Options, in respect of which such
deduction and withholding were made.
(c) Closing
of Transfer Books.
At the
Effective Time, the stock transfer books of the Company shall be closed, and
there shall be no further registration of transfers on the stock transfer books
of the Surviving Corporation of the Shares that were outstanding
6
immediately
prior to the Effective Time. If, after the Effective Time, any Certificates
or
any certificates representing any Rollover Shares are presented to the Surviving
Corporation or Parent for transfer, they shall be cancelled and exchanged
in
accordance with and subject to the procedures set forth in this Article
II.
(d) Termination
of Exchange Fund.
Any
portion of the Exchange Fund (including the proceeds of any investments thereof)
that remains undistributed to the former holders of Shares for eighteen (18)
months after the Effective Time shall be delivered to the Surviving Corporation
upon demand, and any former holders of Shares who have not surrendered their
Shares in accordance with this Section 2.2 shall thereafter look only to the
Surviving Corporation for payment of their claim for the Merger Consideration,
without any interest thereon, upon due surrender of their Shares.
(e) No
Liability.
Notwithstanding anything herein to the contrary, none of the Company, Parent,
Merger Sub, the Surviving Corporation, the Paying Agent or any other person
shall be liable to any former holder of Shares for any amount properly delivered
to a public official pursuant to any applicable abandoned property, escheat
or
similar Law. Any portion of the Exchange Fund remaining unclaimed as of a date
which is immediately prior to such time as such amounts would otherwise escheat
to or become property of any Governmental Entity shall, to the extent permitted
by applicable Law, become the property of Parent, free and clear of any claims
or interests of any person previously entitled thereto.
(f) Investment
of Exchange Fund.
The
Paying Agent shall invest all cash included in the Exchange Fund as reasonably
directed by Parent; provided,
however,
that
any investment of such cash shall be limited to direct short-term obligations
of, or short-term obligations fully guaranteed as to principal and interest
by,
the U.S. government or in commercial paper obligations rated A-1 or P-1 or
better by ▇▇▇▇▇’▇ Investors Service, Inc. or Standard & Poor’s Corporation,
respectively, or in certificates of deposit, bank repurchase agreements or
banker’s acceptances of commercial banks with capital exceeding $1 billion
(based on the most recent financial statements of such bank which are then
publicly available). Any interest and other income resulting from such
investments shall be paid to the Surviving Corporation pursuant to Section
2.2(d).
(g) Lost
Certificates.
In the
case of any Certificate or any certificate representing any Rollover Shares
that
has been lost, stolen or destroyed, upon the making of an affidavit of that
fact
by the person claiming such certificate to be lost, stolen or destroyed and,
(i) except as provided in clause (ii), if required by the Paying Agent, the
posting by such person of a bond in customary amount as indemnity against any
claim that may be made against it with respect to such certificate, the Paying
Agent will issue in exchange for such lost, stolen or destroyed Certificate
a
check in the amount of the number of Shares represented by such lost, stolen
or
destroyed Certificate multiplied by the Merger Consideration or (ii) in the
case
of a certificate representing a Rollover Share held by a person who is party
to
a Founder Rollover Agreement or an Employee Rollover Agreement, and subject
to
the terms of such agreement, Parent shall issue a certificate or certificates
representing the number of shares of Parent Common Stock to which such the
Rollover Shares represented by such lost, stolen or destroyed certificate are
convertible as provided in Section 2.1(b).
7
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except
as
disclosed in the Company SEC Documents (other than risk factor and similarly
cautionary and forward looking disclosure contained in the Company SEC Documents
under the headings “Risk Factors”, “Forward Looking Statements” or “Future
Operating Results”), or in the disclosure schedule delivered by the Company to
Parent immediately prior to the execution of this Agreement (the “Company
Disclosure Schedule”),
the
Company represents and warrants to Parent and Merger Sub as
follows:
Section
3.1. Qualification,
Organization, Subsidiaries, etc.
Each of
the Company and its Subsidiaries, and each Company Joint Venture, is a legal
entity duly organized, validly existing and in good standing under the Laws
of
its respective jurisdiction of organization and has all requisite corporate
or
similar power and authority to own, lease and operate its properties and assets
and to carry on its business as presently conducted and is qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
where the ownership, leasing or operation of its assets or properties or conduct
of its business requires such qualification, except where the failure to be
so
organized, validly existing, qualified or in good standing, or to have such
power or authority, would not have, individually or in the aggregate, a Company
Material Adverse Effect. As used in this Agreement, “Company
Joint Venture”
means
any entity (other than Kentucky Speedway) (including partnerships, limited
liability companies and other business associations and joint ventures) that
is
not a Subsidiary in which the Company or a Subsidiary of the Company, directly
or indirectly, owns an equity or ownership interest and (i) does not have voting
power under ordinary circumstances to elect a majority of the board of
directors, board of managers, executive committee or other person or body
performing similar functions but in which the Company or a Subsidiary of the
Company has rights with respect to the management of such person and/or (ii)
which is a general partner or managing partner or equivalent of an entity which
operates, or receives the financial benefits of operating, one or more
restaurants. As used in this Agreement, any reference to any facts,
circumstances, events or changes having a “Company
Material Adverse Effect”
means
any facts, circumstances, events or changes that are materially adverse to
the
business, financial condition or long-term profitability of the Company and
its
Subsidiaries, taken as a whole, but shall not include facts, circumstances,
events or changes (a) generally affecting the casual dining or restaurant
industries in the United States or the economy or the financial or securities
markets in the United States or elsewhere in the world, including regulatory
and
political conditions or developments (including any outbreak or escalation
of
hostilities or acts of war or terrorism) or changes in interest rates or (b)
to
the extent resulting from (i) the announcement or the existence of, or
compliance with, this Agreement or the announcement of the Merger or any of
the
other transactions contemplated by this Agreement (provided
that
compliance by the Company with the requirement to operate in the ordinary course
of business as required by Section 5.1(a) shall not be excluded), (ii) any
litigation arising from allegations of a breach of fiduciary duty or other
violation of applicable Law relating to this Agreement or the transactions
contemplated by this Agreement, (iii) changes in applicable Law, GAAP or
accounting standards, (iv) changes in the market price or trading volume of
the
Company Common Stock, (v) changes in any analyst’s recommendations, any
financial strength rating or any other recommendations or ratings as to the
Company or its Subsidiaries (including, in and of itself, any failure to meet
analyst projections) or (vi) the failure
8
of
the
Company to meet any expected or projected financial or operating performance
target publicly announced prior to the date of this Agreement, as well as
any
change by the Company in any expected or projected financial or operating
performance target as compared with any target publicly announced prior to
the
date of this Agreement, provided,
however,
that
any change, effect, development, event or occurrence described in the foregoing
clause (a) above shall not constitute or give rise to a Company Material
Adverse
Effect only if and to the extent that such change, effect, development, event
or
occurrence does not have a disproportionate effect on the Company and its
Subsidiaries as compared to other persons in the casual dining or restaurant
industries and provided further
that the
facts, circumstances or events underlying the change or failure in each of
clauses (b)(iv), (b)(v) or (b)(vi) shall not be excluded to the extent such
facts, circumstances or events would otherwise constitute a Company Material
Adverse Effect. The Company has made available to Parent prior to the date
of
this Agreement a true and complete copy of the Company’s amended and restated
certificate of incorporation and bylaws, each as amended through the date
of
this Agreement. Such amended and restated certificate of incorporation and
bylaws are in full force and effect. The certificate of incorporation and
bylaws
or similar organizational documents of each Subsidiary of the Company and
each
Company Joint Venture are in full force and effect, except as would not have,
individually or in the aggregate, a Company Material Adverse Effect. Neither
the
Company, any Subsidiary, nor any Company Joint Venture is in violation of
any
provisions of its certificate of incorporation or bylaws or similar
organizational documents, other than such violations as would not have,
individually or in the aggregate, a Company Material Adverse
Effect.
Section
3.2. Capital
Stock.
(a) The
authorized capital stock of the Company consists of 200,000,000 shares of
Company Common Stock and 2,000,000 shares of preferred stock, par value $0.01
per share (“Company
Preferred Stock”).
As of
October 25, 2006, (i) 74,664,974 shares of Company Common Stock were issued
and
outstanding (which number includes 1,227,923 shares of Company Common Stock
subject to transfer restrictions or subject to forfeiture back to the Company
or
repurchase by the Company), (ii) 4,083,648 shares of Company Common Stock were
held in treasury, (iii) 15,201,571 shares of Company Common Stock were reserved
for issuance under the employee and director stock plans of the Company (the
“Company
Stock Plans”),
and
(iv) no shares of Company Preferred Stock were issued or outstanding or held
as
treasury shares. All
outstanding shares of Company Common Stock, and all shares of Company Common
Stock reserved for issuance as noted in clause (iii), when issued in accordance
with the respective terms thereof, are or will be duly authorized, validly
issued, fully paid and non-assessable and free of pre-emptive or similar
rights.
(b) Except
as
set forth in subsection (a) above, as of the date of this Agreement, (i) the
Company does not have any shares of its capital stock or other voting securities
issued or outstanding other than shares of Company Common Stock that have become
outstanding after October 25, 2006, but were reserved for issuance as set forth
in subsection (a) above, and (ii) there are no outstanding subscriptions,
options, warrants, calls, convertible securities or other similar rights,
agreements or commitments relating to the issuance of capital stock or voting
securities to which the Company or any of its Subsidiaries is a party obligating
the Company or any of its Subsidiaries to (A) issue, transfer or sell any shares
of capital stock or other equity interests of the Company or any Subsidiary
of
the Company or securities convertible
9
into
or
exchangeable for such shares or equity interests, (B) grant, extend or enter
into any such subscription, option, warrant, call, convertible securities
or
other similar right, agreement or arrangement, (C) redeem or otherwise acquire,
or vote or dispose of, any such shares of capital stock or other equity
interests, or (D) provide a material amount of funds to, or make any material
investment (in the form of a loan, capital contribution or otherwise) in,
any
Subsidiary.
(c) The
Company Disclosure Schedule lists or, in the case of clause (iii), describes,
as
of October 25, 2006 (the “Measurement
Date”),
(i)
each outstanding Company Stock Option, (ii) each Company Stock-Based Award
and
(iii) each right of any kind, contingent or accrued, to receive shares of
Company Common Stock or benefits measured in whole or in part by the value
of a
number of shares of Company Common Stock granted under the Company Stock Plans,
Company Benefit Plans or otherwise (including restricted stock units, phantom
units, deferred stock units and dividend equivalents) (“Other
Incentive Awards”),
the
number of Shares issuable thereunder or with respect thereto, the vesting
schedule, the expiration date and the exercise price (if any) thereof. From
the
close of business on the Measurement Date, until the date of this Agreement,
no
options to purchase shares of Company Common Stock or Company Preferred Stock
have been granted, no Company Stock-Based Awards have been granted, no Other
Incentive Awards have been granted and no shares of Company Common Stock or
Company Preferred Stock have been issued, except for Shares issued pursuant
to
the exercise of Company Stock Options outstanding on the Measurement Date and
Shares issued pursuant to the settlement of Company Stock-Based Awards
outstanding on the Measurement Date, in each case in accordance with their
terms. Except for awards to acquire or receive shares of Company Common Stock
under any equity incentive plan of the Company and its Subsidiaries, neither
the
Company nor any of its Subsidiaries has outstanding bonds, debentures, notes
or
other obligations, the holders of which have the right to vote (or which are
convertible into or exercisable for securities having the right to vote) with
the stockholders of the Company on any matter.
(d) There
are
no voting trusts or other agreements or understandings to which the Company
or
any of its Subsidiaries is a party with respect to the voting or disposition
of
the capital stock or other equity interest of the Company or any of its
Subsidiaries.
(e) All
the
outstanding shares of capital stock of, or other equity interests in, each
Subsidiary of the Company are duly authorized, validly issued, fully paid and
nonassessable, and were not issued in violation of any preemptive or similar
rights, purchase option, call or right of first refusal or similar rights.
All
the outstanding shares of capital stock of, or other equity interests in, each
Subsidiary of the Company are owned by the Company or a wholly owned Subsidiary
of the Company free and clear of all Liens (other than Permitted Liens and
those
that are immaterial).
(f) All
of
the outstanding ownership interests in each of the Company Joint Ventures are
duly authorized, validly issued, fully paid and nonassessable, and were not
issued in violation of any preemptive or similar rights, purchase option, call
or right of first refusal or similar rights. All the outstanding shares of
capital stock of, or other equity interests in, each Company Joint Venture
are
owned by the Company or a wholly owned Subsidiary of the Company free and clear
of all Liens (other
than Permitted Liens and those that are immaterial).
10
Section
3.3. Corporate
Authority Relative to This Agreement; No Violation.
(a) The
Company has requisite corporate power and authority to enter into this Agreement
and, subject to receipt of the Company Stockholder Approval, to consummate
the
transactions contemplated by this Agreement. The execution and delivery of
this
Agreement and the consummation of the transactions contemplated by this
Agreement have been duly and validly authorized by the Board of Directors and,
to the extent required, by the Special Committee (acting unanimously) and,
except for (i) the Company Stockholder Approval, and (ii) the filing of the
Certificate of Merger with the Secretary of State of Delaware, no other
corporate proceedings on the part of the Company are necessary to authorize
this
Agreement or the consummation of the transactions contemplated by this
Agreement. The Special Committee has unanimously determined and resolved, and
the Board of Directors has determined and resolved (i) that the Merger is fair
to, and in the best interests of, the Company and its stockholders, (ii) to
propose this Agreement for adoption by the Company’s stockholders and to declare
the advisability of this Agreement and (iii) to recommend that the Company’s
stockholders approve this Agreement and the transactions contemplated by this
Agreement (collectively, the “Recommendation”),
all
of which determinations and resolutions have not been rescinded, modified or
withdrawn in any way as of the date of this Agreement. This Agreement has been
duly and validly executed and delivered by the Company and, assuming this
Agreement constitutes the valid and binding agreement of Parent and Merger
Sub,
constitutes the valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms.
(b) Other
than in connection with or in compliance with (i) the DGCL, (ii) the Securities
Exchange Act of 1934 (the “Exchange
Act”),
(iii)
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976 (the “HSR
Act”)
and
(iv) the approvals set forth on Section 3.3(b) of the Company Disclosure
Schedule (collectively, the “Company
Approvals”),
and
subject to the accuracy of the representations and warranties of Parent and
Merger Sub in Section 4.9, no authorization, consent, permit, action or approval
of, or filing with, or notification to, any United States federal, state or
local or foreign governmental or regulatory agency, commission, court, body,
entity or authority (each, a “Governmental
Entity”)
is
necessary, under applicable Law, for the consummation by the Company of the
transactions contemplated by this Agreement, except for such authorizations,
consents, permits, actions, approvals, notifications or filings that, if not
obtained or made, would not have, individually or in the aggregate, a Company
Material Adverse Effect.
(c) The
execution and delivery by the Company of this Agreement does not, and, except
as
described in Section 3.3(b), the consummation of the transactions contemplated
by this Agreement and compliance with the provisions of this Agreement will
not
(i) result in any violation of, or default (with or without notice or lapse
of
time, or both) under, or give rise to a right of termination, amendment,
cancellation or acceleration of any material obligation or to the loss of a
material benefit under any loan, guarantee of Indebtedness or credit agreement,
note, bond, mortgage, indenture, lease, agreement, contract, instrument, permit,
franchise or license agreement (collectively, “Contracts”)
binding upon the Company or any of its Subsidiaries, or to which any of them
is
a party or any of their respective properties are bound, or result in the
creation of any liens, claims, mortgages, encumbrances, pledges, security
interests, equities or charges of any kind (each, a “Lien”),
other
than any such Lien (A) for Taxes or governmental
11
assessments,
charges or claims of payment not yet due, being contested in good faith or
for
which adequate accruals or reserves have been established, (B) which is a
carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
similar lien arising in the ordinary course of business, (C) which is disclosed
on the most recent consolidated balance sheet of the Company (or notes thereto
or securing liabilities reflected on such balance sheet) or (D) which was
incurred in the ordinary course of business since the date of the most recent
consolidated balance sheet of the Company (each of the foregoing, a
“Permitted
Lien”),
upon
any of the properties or assets of the Company or any of its Subsidiaries
or any
Company Joint Venture, (ii) conflict with or result in any violation of any
provision of the certificate of incorporation or bylaws or other equivalent
organizational document, in each case as amended, of the Company or any of
its
Subsidiaries or (iii) conflict with or violate any applicable Laws, other
than,
in the case of clauses (i) and (iii), any such violation, conflict, default,
termination, cancellation, acceleration, right, loss or Lien that would not
have, individually or in the aggregate, a Company Material Adverse
Effect.
(d) Section
3.3(d) of the Company Disclosure Schedule sets forth a list of any consent,
approval, authorization or permit of, action by, registration, declaration
or
filing with or notification to any person under any (i) Company Material
Contract or (ii) material lease, material sublease, material assignment of
lease
or material occupancy agreement (each a “Material
Lease”)
to
which the Company, any of its Subsidiaries or any Company Joint Venture is
a
party which is required in connection with the consummation of the Merger and
the other transactions contemplated by this Agreement, other than those the
failure of which to obtain would not have, individually or in the aggregate,
a
Company Material Adverse Effect.
Section
3.4. Reports
and Financial Statements.
(a) The
Company has filed or furnished all forms, documents and reports (including
exhibits) required to be filed or furnished prior to the date of this Agreement
by it with the Securities and Exchange Commission (the “SEC”)
since
December 31, 2003 (the “Company
SEC Documents”).
As of
their respective dates, or, if amended, as of the date of the last such
amendment, the Company SEC Documents complied in all material respects with
the
requirements of the Securities Act of 1933 and the Exchange Act, as the case
may
be, and the applicable rules and regulations promulgated thereunder, and none
of
the Company SEC Documents contained any untrue statement of a material fact
or
omitted to state or incorporate by reference any material fact required to
be
stated or incorporated by reference therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. No
Subsidiary of the Company is required to file any form or report with the
SEC.
(b) The
consolidated financial statements (including all related notes and schedules)
of
the Company included in the Company SEC Documents have been prepared in
accordance with GAAP and fairly present in all material respects the
consolidated financial position of the Company and its consolidated
Subsidiaries, as at the respective dates thereof, and the consolidated results
of their operations and their consolidated cash flows for the respective periods
then ended (subject, in the case of the unaudited statements, to normal year-end
audit adjustments and to any other adjustments described therein, including
the
notes thereto) in conformity with United States GAAP (except, in the case of
the
unaudited statements, as permitted by the SEC) applied on a consistent basis
during the periods involved (except as may
12
be
indicated therein or in the notes thereto). Since January 1, 2006, there
has
been no material change in the Company’s accounting methods or principles that
would be required to be disclosed in the Company’s financial statements in
accordance with GAAP, except as described in the notes to such Company financial
statements.
Section
3.5. Internal
Controls and Procedures.
The
Company has established and maintains disclosure controls and procedures and
internal control over financial reporting (as such terms are defined in
paragraphs (e) and (f), respectively, of Rule 13a-15 under the Exchange Act)
as
required by Rule 13a-15 under the Exchange Act. The Company’s disclosure
controls and procedures are reasonably designed to ensure that all material
information required to be disclosed by the Company in the reports that it
files
or furnishes under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the SEC,
and that all such material information is accumulated and communicated to the
Company’s management as appropriate to allow timely decisions regarding required
disclosure and to make the certifications required pursuant to Sections 302
and
906 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act”).
The
Company’s management has completed assessment of the effectiveness of the
Company’s internal control over financial reporting in compliance with the
requirements of Section 404 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act for the year ended
December 31, 2005, and such assessment concluded that such controls were
effective. The Company has disclosed, based on its most recent evaluation prior
to the date of this Agreement, to the Company’s auditors and the audit committee
of the Board of Directors and Parent (A) any significant deficiencies and
material weaknesses in the design or operation of internal controls over
financial reporting which are reasonably likely to adversely affect in any
material respect the Company’s ability to record, process, summarize and report
financial information and (B) any fraud, whether or not material, that involves
executive officers or employees who have a significant role in the Company’s
internal controls over financial reporting. As of the date of this Agreement,
to
the knowledge of the Company, the Company has not identified any material
weaknesses in the design or operation of internal controls over financial
reporting. There are no outstanding loans made by the Company or any of its
Subsidiaries to any executive officer (as defined in Rule 3b-7 under the
Exchange Act) or director of the Company.
Section
3.6. No
Undisclosed Liabilities.
Except
(a) as reflected or reserved against in the Company’s consolidated balance
sheets (or the notes thereto) included in the Company’s Quarterly Report on Form
10-Q for the quarter ended June 30, 2006 (other than risk factor and similarly
cautionary and forward looking disclosure under the headings “Risk Factors”,
“Forward Looking Statements” or “Future Operating Results”) (b) for liabilities
permitted or contemplated by this Agreement, (c) for liabilities and obligations
incurred in the ordinary course of business since June 30, 2006 and (d) for
liabilities or obligations which have been discharged or paid in full in the
ordinary course of business, as of the date of this Agreement, neither the
Company nor any Subsidiary of the Company or, to the knowledge of the Company,
any Company Joint Venture, has any liabilities or obligations of any nature,
whether or not accrued, contingent or otherwise, that would be required by
GAAP
to be reflected on a consolidated balance sheet of the Company and its
Subsidiaries (or in the notes thereto), other than those which would not have,
individually or in the aggregate, a Company Material Adverse
Effect.
13
Section
3.7. Compliance
with Law; Permits.
(a) The
Company and each of its Subsidiaries and each of the Company Joint Ventures
are,
and since January 1, 2005, have been, in compliance with and are not in default
under or in violation of any applicable federal, state, local or foreign law,
statute, ordinance, rule, regulation, judgment, order, injunction, decree or
agency requirement of any Governmental Entity (collectively, “Laws”
and
each, a “Law”),
except where such non-compliance, default or violation would not have,
individually or in the aggregate, a Company Material Adverse Effect.
Notwithstanding anything contained in this Section 3.7(a), no representation
or
warranty shall be deemed to be made in this Section 3.7(a) in respect of the
matters referenced in Section 3.4 or Section 3.5, or in respect of
environmental, Tax, employee benefits or labor Law matters.
(b) The
Company and its Subsidiaries and each of the Company Joint Ventures are in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exceptions, consents, certificates, approvals and orders
of any Governmental Entity necessary for the Company and each of its
Subsidiaries to own, lease and operate their respective properties and assets
or
to carry on their respective businesses as they are now being conducted (the
“Company
Permits”),
except where the failure to have any of the Company Permits would not have,
individually or in the aggregate, a Company Material Adverse Effect. All Company
Permits are in full force and effect, except where the failure to be in full
force and effect would not have, individually or in the aggregate, a Company
Material Adverse Effect. Each of the Company, its Subsidiaries and each of
the
Company Joint Ventures have made all filings with all state, provincial and
foreign authorities and obtained all registrations and authorizations required
for the offer and sale of franchises in all states and provinces in the United
States and Canada, and all foreign jurisdictions, where it offers or has offered
or sold franchises, including all amendment and renewal filings, and the Uniform
Franchise Offering Circulars and any other franchise disclosure document
(“UFOCs”)
used
in connection with the offer and sale of franchises for the brands comply in
all
material respects with the requirements of applicable Laws, rules and
regulations, except where the failure to make such filings, obtain such
registrations and authorizations or to so comply would not have, individually
or
in the aggregate, a Company Material Adverse Effect.
Section
3.8. Environmental
Laws and Regulations.
(a) Except
as
would not, individually or in the aggregate, have a Company Material Adverse
Effect, (i) the Company and its Subsidiaries have conducted their respective
businesses in compliance with all applicable Environmental Laws, (ii) to the
knowledge of the Company, none of the properties owned, leased or operated
by
the Company or any of its Subsidiaries contains any Hazardous Substance as
a
result of any activity of the Company or any of its Subsidiaries in amounts
exceeding the levels permitted by applicable Environmental Laws, (iii) since
December 31, 2005, as of the date of this Agreement, neither the Company nor
any
of its Subsidiaries has received any notices, demand letters or requests for
information from any federal, state, local or foreign Governmental Entity
indicating that the Company or any of its Subsidiaries may be in violation
of,
or liable under, any Environmental Law in connection with the ownership or
operation of their respective businesses or any of their respective properties
or assets, (iv) to the knowledge of the Company, no Hazardous Substance has
been
disposed of, released or transported in violation of any applicable
Environmental Law, or in a manner giving
14
rise
to
any liability under Environmental Law, from any properties presently or formerly
owned, leased or operated by the Company or any of its Subsidiaries as a
result
of any activity of the Company or any of its Subsidiaries during the time
such
properties were owned, leased or operated by the Company or any of its
Subsidiaries and (v) neither the Company, its Subsidiaries nor any of their
respective properties are subject to any liabilities relating to any suit,
settlement, court order, administrative order, regulatory requirement, judgment
or written claim asserted or arising under any Environmental Law. It is agreed
and understood that no representation or warranty is made in respect of
environmental matters in any Section of this Agreement other than this Section
3.8. The Company has made available to Parent true and complete copies of
all
material environmental records, reports, notifications, certificates of need,
permits, engineering studies, and environmental studies or assessments, in
each
case as requested by Parent and in the Company’s possession, and in each case as
amended and in effect.
(b) As
used
herein, “Environmental
Law”
means
any Law relating to (x) the protection, preservation or restoration of the
environment (including air, water vapor, surface water, groundwater, drinking
water supply, surface land, subsurface land, plant and animal life or any other
natural resource), or (y) the exposure to, or the use, storage, recycling,
treatment, generation, transportation, processing, handling, labeling,
production, release or disposal of Hazardous Substances, in each case as in
effect at the date of this Agreement.
(c) As
used
herein, “Hazardous
Substance”
means
any substance presently listed, defined, designated or classified as hazardous,
toxic, radioactive, or dangerous, or otherwise regulated, under any
Environmental Law. Hazardous Substance includes any substance to which exposure
is regulated by any Governmental Entity or any Environmental Law including
any
toxic waste, pollutant, contaminant, hazardous substance (including toxic mold),
toxic substance, hazardous waste, special waste, industrial substance or
petroleum or any derivative or byproduct thereof, radon, radioactive material,
asbestos, or asbestos-containing material, urea formaldehyde, foam insulation
or
polychlorinated biphenyls.
Section
3.9. Employee
Benefit Plans.
(a) Section
3.9(a) of the Company Disclosure Schedule sets forth a true and complete list
of
each material employee or director benefit plan, arrangement or agreement,
whether or not written, including, without limitation, any employee welfare
benefit plan within the meaning of Section 3(1) of the Employee Retirement
Income Security Act of 1974 (“ERISA”),
any
employee pension benefit plan within the meaning of Section 3(2) of ERISA
(whether or not such plan is subject to ERISA) and any material bonus,
incentive, deferred compensation, vacation, stock purchase, stock option or
other equity-based plan or arrangement, severance, employment, change of control
or fringe benefit plan, program or agreement (the “Company
Benefit Plans”)
that
is or has been sponsored, maintained or contributed to by the Company or any
of
its Subsidiaries or any Company Joint Venture.
(b) The
Company has made available to Parent true and complete copies of each of the
Company Benefit Plans and material related documents, including, but not limited
to, (i) each writing constituting a part of such Company Benefit Plan, including
all amendments thereto; (ii) the three most recent Annual Reports (Form 5500
Series) and accompanying
15
schedules,
if any; and (iii) the most recent determination letter from the IRS (if
applicable) for such Company Benefit Plan.
(c) (i)
Each
of the Company Benefit Plans has been operated and administered in all material
respects in compliance with applicable Laws, including, but not limited to,
ERISA, the Code and in each case the regulations thereunder; (ii) each of the
Company Benefit Plans intended to be “qualified” within the meaning of Section
401(a) of the Code is so qualified, and to the knowledge of the Company there
are no existing circumstances or any events that have occurred that could
reasonably be expected to adversely affect the qualified status of any such
plan
that would, individually or in the aggregate, result in any material liability
for the Company and its Subsidiaries taken as a whole; (iii) no Company Benefit
Plan is subject to Title IV or Section 302 of ERISA or Section 412 or 4971
of
the Code; (iv) no Company Benefit Plan provides benefits, including, without
limitation, death or medical benefits (whether or not insured), with respect
to
current or former employees or directors of the Company or its Subsidiaries
beyond their retirement or other termination of service, other than (A) coverage
mandated by applicable Law or (B) death benefits or retirement benefits under
any “employee pension plan” (as such term is defined in Section 3(2) of ERISA);
(v) no material liability under Title IV of ERISA has been incurred by the
Company, its Subsidiaries or any ERISA Affiliate of the Company that has not
been satisfied in full, and, to the knowledge of the Company, no condition
exists that presents a material risk to the Company, its Subsidiaries or any
ERISA Affiliate of the Company of incurring a liability thereunder; (vi) no
Company Benefit Plan is a “multiemployer pension plan” (as such term is defined
in Section 3(37) of ERISA) or a plan that has two or more contributing sponsors,
at least two of whom are not under common control, within the meaning of Section
4063 of ERISA; (vii) all material contributions or other amounts payable by
the
Company or its Subsidiaries as of the date of this Agreement with respect to
each Company Benefit Plan in respect of current or prior plan years have been
paid or accrued in accordance with GAAP; (viii) neither the Company nor its
Subsidiaries has engaged in a transaction in connection with which the Company
or its Subsidiaries reasonably could be subject to either a material civil
penalty assessed pursuant to Section 409 or 502(i) of ERISA or a material tax
imposed pursuant to Section 4975 or 4976 of the Code; and (ix) there are no
pending, or to the knowledge of the Company, threatened or anticipated claims
(other than routine claims for benefits) by, on behalf of or against any of
the
Company Benefit Plans or any trusts related thereto which could individually
or
in the aggregate reasonably be expected to result in any material liability
of
the Company and its Subsidiaries taken as a whole. “ERISA
Affiliate”
means,
with respect to any entity, trade or business, any other entity, trade or
business that is a member of a group described in Section 414(b), (c), (m)
or
(o) of the Code or Section 4001(b)(1) of ERISA that includes the first entity,
trade or business, or that is a member of the same “controlled group” as the
first entity, trade or business pursuant to Section 4001(a)(14) of
ERISA.
(d) Neither
the execution, delivery, performance of this Agreement nor the consummation
of
the transactions contemplated by this Agreement (either alone or in conjunction
with any other event) will (i) result in any material payment (including,
without limitation, severance, unemployment compensation and forgiveness of
Indebtedness or otherwise) becoming due to any director or any employee of
the
Company or any of its Subsidiaries from the Company or any of its Subsidiaries
under any Company Benefit Plan or otherwise, (ii) result in any “excess
parachute payment” (within the meaning of Section 280G of
16
the
Code), (iii) materially increase any benefits otherwise payable under any
Company Benefit Plan, (iv) result in any acceleration of any material benefits
or the time of payment or vesting of any such benefits, (v) require the funding
of any such benefits or (vi) limit the ability to amend or terminate any
Company
Benefit Plan or related trust.
Section
3.10. Absence
of Certain Changes or Events.
(a) From
December 31, 2005 through the date of this Agreement, (i) the businesses of
the
Company and its Subsidiaries have been conducted, in all material respects,
in
the ordinary course of business consistent with past practice and (ii) there
has
not been any event, development or state of circumstances that has had,
individually or in the aggregate, a Company Material Adverse
Effect.
(b) Since
the
date of this Agreement, there has not been any event, development or state
of
circumstances that has had, individually or in the aggregate, a Company Material
Adverse Effect.
Section
3.11. Investigations;
Litigation.
As of
the date of this Agreement, (a) there is no investigation or review pending
(or, to the knowledge of the Company, threatened) by any Governmental Entity
with respect to the Company or any of its Subsidiaries or any Company Joint
Venture which would have, individually or in the aggregate, a Company Material
Adverse Effect, and (b) there are no actions, suits, inquiries, investigations,
arbitration, mediation or proceedings pending (or, to the knowledge of the
Company, threatened) against or affecting the Company or any of its Subsidiaries
or any Company Joint Venture, or any of their respective properties at law
or in
equity before, and there are no orders, judgments or decrees of, or before,
any
Governmental Entity, in each case of clause (a) or (b), which would have,
individually or in the aggregate, a Company Material Adverse
Effect.
Section
3.12. Schedule
13E-3/Proxy Statement; Other Information.
None of
the information provided by the Company to be included in (a) the Rule 13e-3
transaction statement on Schedule 13E-3 (the “Schedule
13E-3”)
or (b)
the Proxy Statement will, in the case of the Schedule 13E-3, as of the date
of
its filing and of each amendment or supplement thereto and, in the case of
the
Proxy Statement, (i) at the time of the mailing of the Proxy Statement or any
amendments or supplements thereto and (ii) at the time of the Company Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Each of the Proxy Statement and the Schedule 13E-3, as to
information supplied by the Company, will comply as to form in all material
respects with the provisions of the Exchange Act. The letter to stockholders,
notice of meeting, proxy statement and forms of proxy to be distributed to
stockholders in connection with the Merger to be filed with the SEC are
collectively referred to herein as the “Proxy
Statement.”
Notwithstanding the foregoing, the Company makes no representation or warranty
with respect to the information supplied by Parent or Merger Sub or any of
their
respective Representatives that is contained or incorporated by reference in
the
Proxy Statement or the Schedule 13E-3.
17
Section
3.13. Tax
Matters.
(a) Except
as
would not have, individually or in the aggregate, a Company Material Adverse
Effect, (i) the Company and each of its Subsidiaries have prepared and timely
filed (taking into account any extension of time within which to file) all
Tax
Returns required to be filed by any of them and all such filed Tax Returns
are
complete and accurate, (ii) the Company and each of its Subsidiaries have paid
all Taxes that are required to be paid by any of them, (iii) as of the date
of
this Agreement, there are not pending or, to the knowledge of the Company,
threatened in writing, any audits, examinations, investigations, actions, suits,
claims or other proceedings in respect of Taxes nor has any deficiency for
any
Tax been assessed by any Governmental Entity in writing against the Company
or
any of its Subsidiaries (except, in the case of clause (i), (ii) or (iii) above
or clause (iv) or (v) below, with respect to matters contested in good faith
or
for which adequate reserves have been established in accordance with GAAP),
(iv)
neither
the Company nor any of its Subsidiaries has made any compensatory payments
or
has been or is a party to any compensatory agreement, contract, arrangement,
or
plan that provides for compensatory payments that were not deductible or could
reasonably be expected to be nondeductible under Code section 162(m),
(v)
all
Taxes required to be withheld by the Company and its Subsidiaries have been
withheld and paid over to the appropriate Tax authority, (vi) the Company has
not been a “controlled corporation” or a “distributing corporation” in any
distribution occurring during the two-year period ending on the date of this
Agreement that was intended to be governed by Section 355 of the Code, and
(vii)
neither the Company nor any of its Subsidiaries has entered into any transaction
defined under Sections 1.6011-4(b)(2), -4(b)(3) or -4(b)(4) of the Treasury
Regulations promulgated under the Code.
(b) As
used
in this Agreement, (i) “Taxes”
means
any and all domestic or foreign, federal, state, local or other taxes of any
kind (together with any and all interest, penalties, additions to tax and
additional amounts imposed with respect thereto) imposed by any Governmental
Entity, including taxes on or with respect to income, franchises, windfall
or
other profits, gross receipts, property, sales, use, capital stock, payroll,
employment, unemployment, social security, workers’ compensation or net worth,
and taxes in the nature of excise, withholding, ad valorem or value added,
and
(ii) “Tax
Return”
means
any return, report or similar filing (including the attached schedules) required
to be filed with respect to Taxes, including any information return or
declaration of estimated Taxes.
Section
3.14. Labor
Matters.
(a) Neither
the Company nor any of its Subsidiaries
nor, to
the Company’s knowledge, any of the Company Joint Ventures
is a
party to, or bound by, any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor organization.
To the
Company’s knowledge, there are no labor unions or other organizations attempting
to represent any employees of the Company or any of its Subsidiaries or any
of
the Company Joint Ventures. There are no pending material representation
petitions involving either the Company or any of its Subsidiaries or, to the
Company’s knowledge, any of the Company Joint Ventures before the National Labor
Relations Board or any state labor board, except in each case that
would not, individually or in the aggregate, be material to the Company and
its
Subsidiaries taken as a whole.
Neither
the Company nor any of its Subsidiaries nor, to the Company’s knowledge, any of
the Company Joint Ventures is subject to any material unfair
18
labor
practice charge or complaint, dispute, strike or work stoppage. To the knowledge
of the Company, there are no material organizational efforts with respect
to the
formation of a collective bargaining unit presently being made or threatened
involving employees of the Company or any of its Subsidiaries or any of the
Company Joint Ventures.
(b) The
Company, each of its Subsidiaries and, to the knowledge of the Company, each
of
the Company Joint Ventures is in compliance, in all material respects, with
all
employment agreements, consulting and other service contracts, written employee
or human resources personnel policies (to the extent they contain enforceable
obligations), handbooks or manuals, and severance or separation
agreements,
except
in each case that
would not, individually or in the aggregate, be material to the Company and
its
Subsidiaries taken as a whole. The Company, its Subsidiaries and, to the
knowledge of the Company, the Company Joint Ventures are in compliance in all
material respects with applicable Laws related to employment, employment
practices, wages, hours and other terms and conditions of employment,
except
in each case that
would not, individually or in the aggregate, be material to the Company and
its
Subsidiaries taken as a whole. As of the date of this Agreement, neither the
Company nor any of its Subsidiaries has a material labor or employment dispute
currently subject to any grievance procedure, arbitration or litigation, or
to
the knowledge of the Company, threatened against it.
Section
3.15. Intellectual
Property.
Except
as would not have, individually or in the aggregate, a Company Material Adverse
Effect, either the Company or its Subsidiaries owns, or is licensed or otherwise
possesses legally enforceable rights to use, free and clear of all Liens (other
than Permitted Liens), intellectual property of any type, registered or
unregistered and however denominated, including all material trademarks, trade
names, service marks, service names, ▇▇▇▇ registrations, logos, assumed names,
and other brand or source identifiers, together with the goodwill associated
therewith, registered and unregistered copyrights, patents or applications
and
registrations, know-how, trade secrets and other confidential and proprietary
information, and rights to ▇▇▇ and other choses of action arising from any
of
the foregoing (collectively, the “Intellectual
Property”),
as
such Intellectual Property is used in their respective businesses as currently
conducted.
Except
as would not have, individually or in the aggregate, a Company Material Adverse
Effect, (a) as of the date of this Agreement, there are no pending or, to the
knowledge of the Company, threatened claims by any person alleging infringement,
dilution or misappropriation by the Company or any of its Subsidiaries for
their
use of the Intellectual Property of the Company or any of its Subsidiaries,
(b)
to the knowledge of the Company, the conduct of the business of the Company
and
its Subsidiaries does not infringe any intellectual property rights of any
person and neither the Company nor any of its Subsidiaries has received an
“invitation to license” or other communication from any third party asserting
that the Company or any of its Subsidiaries is or will be obligated to take
a
license under any Intellectual Property owned by any third party in order to
continue to conduct their respective businesses as they are currently conducted,
(c) as of the date of this Agreement, neither the Company nor any of its
Subsidiaries has made any claim of a violation or infringement by others of
its
rights to or in connection with the Intellectual Property of the Company or
any
of its Subsidiaries, (d) to the knowledge of the Company, no person is
infringing, diluting or misappropriating any Intellectual Property of the
Company or any of its Subsidiaries, (e) the execution and delivery of this
Agreement and the consummation of the transactions contemplated by this
Agreement shall not result in the loss or reduction in scope of Intellectual
Property rights licensed to the Company or
19
any
of
its Subsidiaries, whether by termination or expiration of such license, the
performance of such license pursuant to its terms, or other means. The Company
and its Subsidiaries have taken commercially reasonable actions required
to
protect and preserve, and maintain the validity and effectiveness of, all
material Intellectual Property, including without limitation paying all
applicable fees related to the registration, maintenance and renewal of such
owned Intellectual Property.
Section
3.16. Real
Property.
(a) Section
3.16(a) of the Company Disclosure Schedule contains a list of the addresses
and
the store numbers, if applicable, of all real property owned by the Company
or
any Subsidiary of the Company (the “Owned
Real Properties”).
Except
as would not have, individually or in the aggregate, a Company Material Adverse
Effect, the Company or a Subsidiary of the Company has good and valid title
in
fee simple to each of the Owned Real Properties free and clear of all leases,
tenancies, options to purchase or lease, rights of first refusal, claims, liens,
charges, security interests or encumbrances of any nature whatsoever
(collectively, “Property
Encumbrances”),
except
(A) leases to a Subsidiary of the Company or a Company Joint Venture that the
Company or a Subsidiary of the Company may freely amend or terminate without
the
consent of any other person, (B) statutory liens securing payments not yet
due,
(C) Property Encumbrances that do not materially affect the continued use of
the
property for the purposes for which the property is currently being used, (D)
mortgages, or deeds of trust, security interest or other encumbrances on title
related to Indebtedness reflected on the consolidated financial statements
of
the Company, and (E) Permitted Liens.
(b) Section
3.16(b) of the Company Disclosure Schedule contains a list of all leases, with
reference to the addresses and the store numbers, if applicable, for all real
property leased to the Company or any Subsidiary of the Company (the
“Leased
Real Properties”,
and
together with the Owned Real Properties, the “Real
Properties”).
Except as would not have, individually or in the aggregate, a Company Material
Adverse Effect, (i) the Company or a Subsidiary of the Company has good
leasehold title with respect to each of the Leased Real Properties, subject
only
to (A) subleases to a Subsidiary of the Company or a Company Joint Venture
that
the Company or a Subsidiary of the Company may freely amend or terminate without
the consent of any other person, (B) statutory liens securing payments not
yet
due, (C) Property Encumbrances that do not materially affect the continued
use of the property for the purposes for which the property is currently being
used, (D) mortgages, or deeds of trust, security interest or other encumbrances
on title related to Indebtedness reflected on the consolidated financial
statements of the Company, and (E) Permitted Liens; (ii) to the knowledge of
the
Company, each lease of the Leased Real Properties is the legal, valid, binding
obligation of the Company or a Subsidiary of the Company, enforceable in
accordance with its terms; and (iii) neither the Company nor, to the knowledge
of the Company, a Subsidiary of the Company has received a notice of default
under any of such leases.
Section
3.17. Opinion
of Financial Advisor.
The
Special Committee has received the separate opinions of Wachovia Securities
LLC
and ▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. (the “Advisors”)
dated
the date of this Agreement, to the effect that, as of such date, the Merger
Consideration to be received by the holders of the Company Common Stock (other
than Participating Holders) is fair to such holders from a financial point
of
view. An executed copy of
20
each
such
opinion has been made available to Parent. The Company has been authorized
by
the Advisors to permit the inclusion in full of each such opinion in the
Proxy
Statement. As of the date of this Agreement, no such opinion has been withdrawn,
revoked or modified.
Section
3.18. Required
Vote of the Company Stockholders.
Subject
to the accuracy of the representations and warranties of Parent and Merger
Sub
in Section 4.9, the affirmative vote of the holders of a majority of the
outstanding shares of Company Common Stock on the record date of the Company
Meeting, voting together as a single class, is the only vote of holders of
securities of the Company which is required to approve this Agreement and the
Merger (the “Company
Stockholder Approval”).
Section
3.19. Material
Contracts.
(a) Except
for this Agreement, the Company Benefit Plans or as filed with the SEC, as
of
the date of this Agreement, neither the Company nor any of its Subsidiaries
is a
party to or bound by any Contract (i) constituting a “material contract” (as
such term is defined in Item 601(b)(10) of Regulation S-K of the SEC); (ii)
containing covenants binding upon the Company or any of its affiliates that
materially restricts the ability of the Company or any of its affiliates (or
which, following the consummation of the Merger, could materially restrict
the
ability of the Surviving Corporation or its affiliates) to compete in any
business that is material to the Company and its affiliates, taken as a whole,
as of the date of this Agreement, or that restricts the ability of the Company
or any of its affiliates (or which, following the consummation of the Merger,
would restrict the ability of the Surviving Corporation or its affiliates)
to
compete with any person or in any geographic area; (iii) relating to the lease
or license of any material asset, including material Intellectual Property;
(iv)
constituting a franchise agreement entered into between a franchisee and the
Company and one or more of its Subsidiaries; or (v) that would prevent,
materially delay or materially impede the Company’s ability to consummate the
Merger or the other transactions contemplated by this Agreement (all contracts
of the type described in this Section 3.19(a), together with all Material Leases
and all material employment agreements being referred to herein as “Company
Material Contracts”).
(b) Neither
the Company nor any Subsidiary of the Company is in breach of or default under
the terms of any Company Material Contract where such breach or default would
have, individually or in the aggregate, a Company Material Adverse Effect.
To
the knowledge of the Company, no other party to any Company Material Contract
is
in breach of or default under the terms of any Company Material Contract where
such breach or default would have, individually or in the aggregate, a Company
Material Adverse Effect. Each Company Material Contract is a valid and binding
obligation of the Company or the Subsidiary of the Company which is party
thereto and, to the knowledge of the Company, of each other party thereto,
and
is in full force and effect, except that (i) such enforcement may be subject
to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
Laws, now or hereafter in effect, relating to creditors’ rights generally and
(ii) equitable remedies of specific performance and injunctive and other forms
of equitable relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
Section
3.20. Finders
or Brokers.
Except
for the Advisors, neither the Company nor any of its Subsidiaries has employed
any investment banker, broker or finder in connection
21
with
the
transactions contemplated by this Agreement who is entitled to any fee or
any
commission in connection with or upon consummation of the Merger. The Company
has made available to Parent a complete and correct copy of any Contract
with
the Advisors pursuant to which any fees may be payable by the Company in
connection with this Agreement and the transactions contemplated by this
Agreement.
Section
3.21. Insurance.
The
Company, its Subsidiaries and the Company Joint Ventures own or hold policies
of
insurance, or are self-insured, in amounts providing reasonably adequate
coverage against all risks customarily insured against by companies and
subsidiaries in similar lines of business as the Company, its Subsidiaries
or
the Company Joint Ventures, and in amounts sufficient to comply with all
Material Contracts to which the Company, its Subsidiaries or any Company Joint
Venture are parties or are otherwise bound. The annual premium amount of the
current policies of directors’ and officers’ liability insurance and fiduciary
liability insurance maintained by the Company and its Subsidiaries is
set
forth
on Section 3.21 of the Company Disclosure Schedule.
Section
3.22. Takeover
Statutes.
Assuming the accuracy of the representations and warranties of Parent and Merger
Sub set forth in Section 4.9, no “fair price”, “moratorium”, “control share
acquisition”, “business combination” or other similar antitakeover statute or
regulation enacted under state or federal laws in the United States applicable
to the Company is applicable to the Merger or the other transactions
contemplated by the date of this Agreement.
Section
3.23. Affiliate
Transactions.
There
are no material transactions, agreements, arrangements or understandings between
(i) the Company or any of its Subsidiaries, on the one hand, and (ii) any
affiliate of the Company (other than any of its Subsidiaries), on the other
hand, of the type that would be required to be disclosed under Item 404 of
Regulation S-K under the Securities Act which have not been so disclosed prior
to the date hereof (such transactions referred to herein as “Affiliate
Transactions”).
Section
3.24. Indebtedness.
Section
3.24 of the Company Disclosure Schedule sets forth, as of the date of this
Agreement or such other date as is set forth in such schedule, all of the
outstanding indebtedness for borrowed money of, and all the outstanding
guarantees of indebtedness for borrowed money of any person by, the Company,
each of its Subsidiaries and each of the Company Joint Ventures. As of the
date
of this Agreement there is not, and as of the Effective Time there will not
be,
any indebtedness for borrowed money of, or guarantees of indebtedness for
borrowed money of any person by, the Company, each of its Subsidiaries and
each
of the Company Joint Ventures except as set forth on Section 3.24 of the Company
Disclosure Schedule and except as may be incurred in accordance with Section
5.1
hereof.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF PARENT AND MERGER SUB
Except
as
disclosed in the disclosure schedule delivered by Parent to the Company
immediately prior to the execution of this Agreement (the “Parent
Disclosure Schedule”),
Parent
and Merger Sub represent and warrant to the Company as follows:
22
Section
4.1. Qualification;
Organization, Subsidiaries, etc.
Each of
Parent and Merger Sub is a legal entity duly organized, validly existing and
in
good standing under the Laws of its respective jurisdiction of organization
and
has all requisite corporate or similar power and authority to own, lease and
operate its properties and assets and to carry on its business as presently
conducted and is qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the ownership, leasing or operation
of
its assets or properties or conduct of its business requires such qualification,
except where the failure to be so organized, validly existing, qualified or
in
good standing, or to have such power or authority, would not, individually
or in
the aggregate, prevent or materially delay or materially impair the ability
of
Parent or Merger Sub to consummate the Merger and the other transactions
contemplated by this Agreement (a “Parent
Material Adverse Effect”).
Parent
has made available to the Company prior to the date of this Agreement a true
and
complete copy of the certificate of incorporation and bylaws or other equivalent
organizational documents of Parent and Merger Sub, each as amended through
the
date of this Agreement. The certificate of incorporation and bylaws or similar
organizational documents of Parent and Merger Sub are in full force and effect,
except as would not have, individually or in the aggregate, a Parent Material
Adverse Effect. Neither Parent nor Merger Sub is in violation of any provisions
of its certificate of incorporation or bylaws or similar organizational
documents, other than such violations as would not have, individually or in
the
aggregate, a Parent Material Adverse Effect.
Section
4.2. Corporate
Authority Relative to This Agreement; No Violation.
(a) Each
of
Parent and Merger Sub has all requisite corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement and the consummation
of
the transactions contemplated by this Agreement have been duly and validly
authorized by the Boards of Directors of Parent and Merger Sub and by Parent,
as
the sole stockholder of Merger Sub, and, except for the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware,
no
other corporate proceedings on the part of Parent or Merger Sub are necessary
to
authorize this Agreement or the consummation of the transactions contemplated
by
this Agreement. This Agreement has been duly and validly executed and delivered
by Parent and Merger Sub and, assuming this Agreement constitutes the valid
and
binding agreements of the Company, this Agreement constitutes the valid and
binding agreement of Parent and Merger Sub, enforceable against each of Parent
and Merger Sub in accordance with its terms.
(b) Other
than in connection with or in compliance with (i) the provisions of the DGCL,
(ii) the Exchange Act, state securities, takeover and “blue sky” laws and (iii)
the HSR Act (collectively, the “Parent
Approvals”),
no
authorization, consent, permit, action or approval of, or filing with, or
notification to, any Governmental Entity is necessary for the consummation
by
Parent or Merger Sub of the transactions contemplated by this Agreement, except
for such authorizations, consents, permits, actions, approvals, notifications
or
filings, that, if not obtained or made, would not have, individually or in
the
aggregate, a Parent Material Adverse Effect.
(c) The
execution and delivery by Parent and Merger Sub of this Agreement does not,
and,
except as described in Section 4.2(b), the consummation of the transactions
contemplated by this Agreement and compliance with the provisions of this
Agreement will not (i) result in any violation of, or default (with or without
notice or lapse of time, or both) under, or
23
give
rise
to a right of termination, amendment, cancellation or acceleration of any
material obligation or to the loss of a material benefit under any loan,
guarantee of Indebtedness or credit agreement, note, bond, mortgage, indenture,
lease, agreement, contract, instrument, permit, franchise or license agreement
binding upon Parent or any of its Subsidiaries, or to which any of them is
a
party or any of their respective properties are bound, or result in the creation
of any Lien (other than Permitted Liens) upon any of the properties or assets
of
Parent or any of its Subsidiaries, (ii) conflict with or result in any violation
of any provision of the certificate of incorporation or bylaws or other
equivalent organizational document, in each case as amended, of Parent or
any of
its Subsidiaries or (iii) conflict with or violate any applicable Laws, other
than, in the case of clauses (i) and (iii), any such violation, conflict,
default, termination, cancellation, acceleration, right, loss or Lien that
would
not have, individually or in the aggregate, a Parent Material Adverse
Effect.
Section
4.3. Investigations;
Litigation.
There
is no investigation or review pending (or, to the knowledge of Parent,
threatened) by any Governmental Entity with respect to Parent or any of its
Subsidiaries which would have, individually or in the aggregate, a Parent
Material Adverse Effect, and there are no actions, suits, inquiries,
investigations or proceedings pending (or, to Parent’s knowledge, threatened)
against or affecting Parent or its Subsidiaries, or any of their respective
properties at law or in equity before, and there are no orders, judgments or
decrees of, or before, any Governmental Entity, in each case, which would have,
individually or in the aggregate, a Parent Material Adverse Effect.
Section
4.4. Schedule
13E-3/Proxy Statement; Other Information.
None of
the information provided by Parent or its Subsidiaries to be included in the
Schedule 13E-3 or the Proxy Statement will, in the case of the Schedule 13E-3,
as of the date of its filing and of each amendment or supplement thereto and,
in
the case of the Proxy Statement, (i) at the time of the mailing of the Proxy
Statement or any amendments or supplements thereto and (ii) at the time of
the
Company Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading. Notwithstanding the foregoing, neither Parent nor Merger
Sub makes any representation or warranty with respect to any information
supplied by the Company or any of its Representatives that is contained or
incorporated by reference in the Proxy Statement or the Schedule
13E-3.
Section
4.5. Financing.
Section
4.5 of the Parent Disclosure Schedule sets forth true, accurate and complete
copies of (a) executed equity commitment letters to provide equity financing
to
Parent and/or Merger Sub and (b) an executed debt commitment letter and related
term sheets (the “Debt
Commitment Letter”
and
together with the equity commitment letters described in clause (a), the
“Financing
Commitments”)
pursuant to which, and subject to the terms and conditions thereof, certain
lenders and their affiliates have committed to provide and arrange the
financings described therein, the proceeds of which may be used to consummate
the Merger and the other transactions contemplated by this Agreement (the
“Debt
Financing”
and
together with the equity financing referred to in clause (a), the “Financing”).
As of
the date of this Agreement, (i) the Financing Commitments are in full force
and
effect and have not been withdrawn or terminated or otherwise amended or
modified in any respect (except as permitted by this Agreement) and (ii) neither
Parent nor Merger Sub is in breach of any of the terms or conditions set forth
therein and no event has occurred which, with or without notice, lapse of
24
time
or
both, could reasonably be expected to constitute a breach or failure to satisfy
a condition precedent set forth in the Financing Commitments. As of the date
of
this Agreement, subject to the accuracy of the representations and warranties
of
the Company set forth in Article III hereof, and the satisfaction of the
conditions set forth in Sections 6.1 and 6.3 hereof, neither Parent nor Merger
Sub has any reason to believe that it will be unable to satisfy the conditions
of closing to be satisfied by it set forth in the Financing Commitments on
the
Closing Date. Assuming the funding of the Financing in accordance with the
Financing Commitments, the proceeds from such Financing constitute all of
the
financing required for the consummation of the transactions contemplated
by this
Agreement, and, together with cash on hand from operations of the Company
(assuming for such purposes that, as of the Closing Date, such cash on hand
will
equal $50 million and outstanding indebtedness for borrowed money (excluding
guarantees) will equal $308 million), are
sufficient for the satisfaction of all of Parent’s and Merger Sub’s obligations
under this Agreement, including the payment of the Merger Consideration and
the
Option and Stock-Based Award Consideration (and any fees and expenses of
or
payable by Parent, Merger Sub or the Surviving Corporation). All of the
conditions precedent to the obligations of the lenders under the Debt Commitment
Letter to make the Debt Financing available to Parent and/or Merger Sub are
set
forth in the Debt Commitment Letter, and the equity commitment letter contains
all of the conditions precedent to the obligations of the funding party to
make
the equity financing thereunder available to Parent and/or Merger Sub on
the
terms therein. Notwithstanding anything in this Agreement to the contrary,
one
or more Debt Commitment Letters may be amended, modified, supplemented, restated
or superseded at the option of Parent and Merger Sub after the date hereof
but
prior to the Effective Time (the “New
Financing Commitments”);
provided
that the
terms of any New Financing Commitment shall not (i) reduce the aggregate
amount
of the Financing, (ii) expand upon the conditions precedent to the Financing
as
set forth in the Debt Commitment Letter in any respect that would reasonably
be
expected to make such conditions less likely to be satisfied, or (iii)
reasonably be expected to delay the Closing. In such event, the terms “Debt
Commitment Letter” and “Financing Commitments” as used herein shall be deemed to
include the Debt Commitment Letters that are not so amended, modified,
supplemented, restated or superseded at the time in question and the New
Financing Commitments to the extent then in effect. Parent has also delivered
to
the Company a guarantee (each, a “Guarantee”)
addressed to the Company from each of (x) ▇▇▇▇▇▇▇▇▇ Partners VI, L.P. and
▇▇▇▇▇▇▇▇▇ Partners VI, Offshore, L.P. and (y) ▇▇▇▇
Capital Fund IX, L.P. (collectively, the “Guarantors”)
with
respect to certain matters on the terms specified therein. Each Guarantee
is in
full force and effect and is a legal, valid and binding obligation of the
Guarantor subject thereto.
Section
4.6. Capitalization
of Merger Sub.
As of
the date of this Agreement, the authorized capital stock of Merger Sub consists
of 1,000 shares of common stock, par value $0.01 per share, all of which are
validly issued and outstanding. All of the issued and outstanding capital stock
of Merger Sub is, and at the Effective Time will be, owned by Parent or a direct
or indirect wholly owned Subsidiary of Parent. Merger Sub has outstanding no
option, warrant, right, or any other agreement pursuant to which any person
other than Parent may acquire any equity security of Merger Sub. Merger Sub
has
not conducted any business prior to the date of this Agreement and has, and
prior to the Effective Time will have, no assets, liabilities or obligations
of
any nature other than those incident to its formation and pursuant to this
Agreement and the Merger and the other transactions contemplated by this
Agreement.
25
Section
4.7. No
Vote of Parent Stockholders.
No vote
of the stockholders of Parent or the holders of any other securities of Parent
(equity or otherwise) is required by any applicable Law, the certificate of
incorporation or bylaws or other equivalent organizational documents of Parent
or the applicable rules of any exchange on which securities of Parent are
traded, in order for Parent to consummate the transactions contemplated by
this
Agreement.
Section
4.8. Finders
or Brokers.
Neither
Parent nor any of its Subsidiaries has employed any investment banker, broker
or
finder in connection with the transactions contemplated by this Agreement who
is
entitled to any fee or any commission in connection with or upon consummation
of
the Merger.
Section
4.9. Lack
of Ownership of Company Common Stock.
Neither
Parent nor any of its Subsidiaries beneficially owns, directly or indirectly,
any shares of Company Common Stock or other securities convertible into,
exchangeable into or exercisable for shares of Company Common Stock. There
are
no voting trusts or other agreements, arrangements or understandings to which
Parent or any of its Subsidiaries is a party with respect to the voting of
the
capital stock or other equity interest of the Company or any of its Subsidiaries
nor are there any agreements, arrangements or understandings to which Parent
or
any of its Subsidiaries is a party with respect to the acquisition, divestiture,
retention, purchase, sale or tendering of the capital stock or other equity
interest of the Company or any of its Subsidiaries.
Section
4.10. Interest
in Competitors.
Neither
Parent nor Merger Sub owns any interest(s), nor do any of their respective
affiliates insofar as such affiliate-owned interests would be attributed to
Parent or Merger Sub under the HSR Act, in any entity or person that derives
a
substantial portion of its revenues from a line of business within the Company’s
principal lines of business.
Section
4.11. WARN
Act.
Parent
and Merger Sub are neither planning nor contemplating, and Parent and Merger
Sub
have neither made nor taken, any decisions or actions concerning the Company
Employees after the Closing that would require the service of notice under
the
WARN Act or similar local laws.
Section
4.12. No
Additional Representations.
(a) Parent
acknowledges that, to its knowledge, as of the date hereof, it and its
Representatives have received access to such books and records, facilities,
equipment, contracts and other assets of the Company which it and its
Representatives, as of the date hereof, have requested to review, and that
it
and its Representatives have had full opportunity to meet with the management
of
the Company and to discuss the business and assets of the Company.
(b) Parent
acknowledges that neither the Company nor any person has made any representation
or warranty, express or implied, as to the accuracy or completeness of any
information regarding the Company furnished or made available to Parent and
its
Representatives except as expressly set forth in Article III (which includes
the
Company Disclosure Schedule and the Company SEC Documents), and neither the
Company nor any other person shall be subject to any liability to Parent or
any
of its affiliates resulting from the Company’s making available to Parent or
Parent’s use of such information provided or made
26
available
to Parent or its Representatives, or any information, documents or material
made
available to Parent in the due diligence materials provided to Parent, other
management presentations (formal or informal) or in any other form in connection
with the transactions contemplated by this Agreement. Without limiting the
foregoing, the Company makes no representation or warranty to Parent with
respect to any financial projection or forecast relating to the Company or
any
of its Subsidiaries, whether or not included in any management
presentation.
Section
4.13. Solvency.
Assuming (a) satisfaction of the conditions to the obligation of Parent and
Merger Sub to consummate the Merger, (b) the accuracy of the representation
as
warranties of the Company set forth in Article III hereof and (c) the Required
Financial Information fairly present the consolidated financial condition of
the
Company and its Subsidiaries as at the end of the periods covered thereby and
the consolidated results of operations of the Company and its Subsidiaries
for
the periods covered thereby, then immediately after giving effect to the
transactions contemplated by this Agreement (including any financing in
connection with the transactions contemplated by this Agreement), as of the
Closing Date, (i) the aggregate “fair saleable value” of the assets of the
Surviving Corporation and its consolidated Subsidiaries, taken as a whole,
as of
such date, exceeds (A) the value of all “liabilities of the Surviving
Corporation and its consolidated Subsidiaries, taken as a whole, including
contingent and other liabilities”, as of such date, as such quoted terms are
generally determined in accordance with applicable federal laws governing
determinations of the insolvency of debtors, and (B) the amount that will be
required to pay the probable liabilities of the Surviving Corporation and its
consolidated Subsidiaries, taken as a whole, on their existing debts (including
contingent liabilities) as such debts become absolute and matured, (ii) the
Surviving Corporation and its consolidated Subsidiaries, taken as a whole,
do
not have, as of such date, an unreasonably small amount of capital for the
operation of their businesses in which they are engaged or proposed to be
engaged following such date, and (iii) the Surviving Corporation and its
consolidated Subsidiaries, taken as a whole, will be able to pay its
liabilities, including contingent and other liabilities, as they
mature.
Section
4.14. Management
Agreements.
Other
than this Agreement, there are no contracts, undertakings, commitments,
agreements or obligations or understandings between Parent or Merger Sub or
any
of their affiliates, on the one hand, and any member of the Company’s management
or the Board of Directors or any Participating Holders, on the other hand
relating to the transactions contemplated by this Agreement or the operations
of
the Company after the Effective Time.
ARTICLE
V
CERTAIN
AGREEMENTS
Section
5.1. Conduct
of Business by the Company and Parent.
(a) From
and
after the date of this Agreement and prior to the Effective Time or the date,
if
any, on which this Agreement is earlier terminated pursuant to Section 7.1
(the
“Termination
Date”),
and
except (i) as may be required by applicable Law, (ii) as may be agreed in
writing by Parent (which consent shall not be unreasonably withheld, delayed
or
conditioned),
27
(iii)
as may be required, permitted or expressly contemplated by this Agreement
or
(iv) as set forth in Section 5.1 of the Company Disclosure Schedule, the
Company
agrees with Parent that (A) the business of the Company and its Subsidiaries
shall be conducted in, and such entities shall not take any action except
in,
the ordinary course of business and (B) the Company shall use commercially
reasonable efforts to direct the business of the Company Joint Ventures to
be
conducted in the ordinary course of business; provided,
however,
that no
action by the Company or its Subsidiaries or the Company Joint Ventures with
respect to matters specifically addressed by any provision of Section 5.1(b)
shall be deemed a breach of this sentence unless such action would constitute
a
breach of such other provision.
(b) The
Company agrees with Parent, on behalf of itself and its Subsidiaries, that
between the date of this Agreement and the Effective Time or the Termination
Date, without the prior written consent of Parent (which consent shall not
be
unreasonably withheld, delayed or conditioned), the Company:
(i) except
in
the ordinary course of business consistent with past practice, shall not, and
shall not permit any of its Subsidiaries that is not wholly owned to,
authorize, declare or pay any dividends on or make any distribution with respect
to its outstanding shares of capital stock (whether in cash, assets, stock
or
other securities of the Company or its Subsidiaries), except (A) dividends
and
distributions paid or made on a pro rata basis by Subsidiaries and (B) that
the
Company may continue to pay regular quarterly cash dividends, which are
declared, announced and paid prior to the Closing Date, on the Company Common
Stock consistent with past practice (not to exceed $0.13 per share per
quarter);
(ii) shall
not, and shall not permit any of its Subsidiaries to, split, combine or
reclassify any of its capital stock or other equity securities or issue or
authorize or propose the issuance of any other securities in respect of, in
lieu
of or in substitution for shares of its capital stock or other equity
securities, except for any such transaction by a wholly owned Subsidiary of
the
Company which remains a wholly owned Subsidiary after consummation of such
transaction;
(iii) except
as
required by existing written agreements or Company Benefit Plans, or as
otherwise required by applicable Law (including Section 409A of the Code),
shall
not, and shall not permit any of its Subsidiaries to (A) except in the ordinary
course of business or as may be required by contract, increase the compensation
or other benefits payable or provided to the Company’s present or former
directors or officers, (B) except in the ordinary course of business, approve
or
enter into any employment, change of control, severance or retention agreement
with any employee of the Company (except (1) to the extent necessary to attract
a new employee to replace an agreement with a departing employee, (2) for
employment agreements terminable on less than thirty (30) days’ notice without
penalty or severance obligation or (3) for severance agreements entered into
with employees (other than officers) in the ordinary course of business in
connection with terminations of employment), or (C) except as permitted pursuant
to clause (B) above, establish, adopt, enter into, amend, terminate or waive
any
rights with respect to any (x) collective bargaining agreement or (y) any plan,
trust, fund, policy or arrangement for the benefit of any current or former
directors or officers or any of their beneficiaries, except, in the case of
clause (y) only, as would not, individually or in the aggregate, result in
a
material increase in cost to the Company;
28
(iv) shall
not, and shall not permit any of its Subsidiaries to, change in any material
respects any financial accounting policies or procedures or any of its methods
of reporting income, deductions or other material items for financial accounting
purposes, except as required by GAAP, SEC rule or policy or applicable
Law;
(v) shall
not, and shall not permit any of its Subsidiaries to, adopt any amendments
to
its certificate of incorporation or bylaws or similar applicable charter
documents;
(vi) except
for transactions among the Company and its wholly owned Subsidiaries or among
the Company’s wholly owned Subsidiaries, shall not, and shall not permit any of
its Subsidiaries to, issue, sell, pledge, dispose of or encumber, or authorize
the issuance, sale, pledge, disposition or encumbrance of, any shares of its
capital stock or other ownership interest in the Company or any Subsidiaries
or
any securities convertible into or exchangeable for any such shares or ownership
interest, or any rights, warrants or options to acquire or with respect to
any
such shares of capital stock, ownership interest or convertible or exchangeable
securities or take any action to cause to be exercisable any otherwise
unexercisable option under any existing stock option plan (except as otherwise
provided by the terms of this Agreement or the express terms of any
unexercisable options outstanding on the date of this Agreement), other than
(A)
issuances of shares of Company Common Stock in respect of any exercise of
Company Stock Options and settlement of any Company Stock-Based Awards in each
case outstanding on the date of this Agreement or as set forth on Section
5.1(b)(vi) of the Company Disclosure Schedule, (B) issuances of shares of
Company Common Stock in the ordinary course of business pursuant to the Company
Benefits Plans, (C) the sale of shares of Company Common Stock pursuant to
the
exercise of options to purchase Company Common Stock if necessary to effectuate
an optionee direction upon exercise or for withholding of Taxes, and (D) the
grant of equity compensation awards in the ordinary course of business
consistent with past practice and as set forth in Section 5.1(b)(vi) of the
Company Disclosure Schedule;
(vii) except
for transactions among the Company and its wholly owned Subsidiaries or among
the Company’s wholly owned Subsidiaries and except in the ordinary course of
business consistent with past practice, shall not, and shall not permit any
of
its Subsidiaries to, directly or indirectly, purchase, redeem or otherwise
acquire any shares of its capital stock or any rights, warrants or options
to
acquire any such shares;
(viii) shall
not, and shall not permit any of its Subsidiaries to, incur, assume, guarantee,
prepay or otherwise become liable for, modify in any material respect the terms
of, any indebtedness for borrowed money or become responsible for the
obligations of any person (directly, contingently or otherwise), other than
in
the ordinary course of business consistent with past practice and except for
(A)
any intercompany indebtedness for borrowed money among the Company and its
wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, (B)
indebtedness for borrowed money incurred to replace, renew, extend, refinance
or
refund any existing indebtedness for borrowed money set forth on subsections
1(c), 2, 3, 4, 5 or 6 of Section 3.24 of the Company Disclosure Schedule without
increasing the amount of such permitted borrowings or incurring breakage costs,
provided
that any
“road shows” or similar marketing efforts of the Company, or syndication by its
financing sources, in connection with the replacement, renewal, extension or
refinancing of the existing indebtedness for borrowed money set forth on
subsection 1(c) of Section 3.24 of the Company Disclosure
29
Schedule
shall not occur during the Marketing Period and during the period commencing
five business days immediately prior to the Marketing Period, (C) guarantees
by
the Company of indebtedness for borrowed money of the Company, which
indebtedness for borrowed money is incurred in compliance with this Section
5.1(b)(viii), (D) indebtedness for borrowed money incurred pursuant to the
terms
of agreements in effect prior to the execution of this Agreement, including
amounts available but not borrowed as of the date of this Agreement, to the
extent such agreements are set forth on Section 3.24 of the Company Disclosure
Schedule and (E) indebtedness for borrowed money not to exceed $25 million
in
aggregate principal amount outstanding at any time incurred by the Company
or
any of its Subsidiaries other than in accordance with clauses (A)-(E),
inclusive;
(ix) except
for transactions among the Company and its wholly owned Subsidiaries or among
the Company’s wholly owned Subsidiaries, shall not, and shall cause its
Subsidiaries not to, sell, lease, license, transfer, exchange or swap, mortgage
or otherwise encumber (including securitizations), or subject to any Lien (other
than Permitted Liens) or otherwise dispose of (whether by merger, consolidation
or acquisition of stock or assets, license or otherwise, and including by way
of
formation of a Company Joint Venture) any material portion of its or its
Subsidiaries’ material properties or assets, including the capital stock of
Subsidiaries, other than in the ordinary course of business consistent with
past
practice and other than (A) pursuant to existing agreements in effect prior
to
the execution of this Agreement or (B) as may be required by applicable Law
or
any Governmental Entity in order to permit or facilitate the consummation of
the
transactions contemplated by this Agreement;
(x) shall
not, and shall not permit any of its Subsidiaries to, modify, amend, terminate
or waive any rights under any Company Material Contract, or any Contract that
would be a Company Material Contract if in effect on the date of this Agreement,
in any material respect in a manner which is adverse to the Company other than
in the ordinary course of business;
(xi) shall
not, and shall not permit any of its Subsidiaries to, enter into any Company
Material Contracts other than in the ordinary course of business;
and
(xii) shall
not, and shall not permit any of its Subsidiaries to, acquire (whether by
merger, consolidation or acquisition of stock or assets, license or otherwise)
(A) any corporation, partnership or other business organization or division
thereof or any assets, having a value in excess of $3 million individually
or
$10 million in the aggregate, other than purchases of inventory and other assets
in the ordinary course of business or (B) any direct or indirect interest in
any
existing partnership, joint venture or restaurant from any other holder of
an
interest in any of the foregoing or any franchisee, other than in the case
of
this clause (B) such acquisitions as are disclosed in Section 5.1(xii) of the
Company Disclosure Schedule;
30
(xiii) shall
not, and shall not permit any of its Subsidiaries to, open or close, or commit
to open or close, any restaurant locations or enter into any partnership or
joint venture, or authorize or make any other capital expenditures, in each
case
other than in the ordinary course of business;
(xiv) shall
not, and shall not permit any of its Subsidiaries to, make any loans, advances
or capital contributions to, or investments in, any person, in each case other
than (A) in the ordinary course of business, (B) pursuant to actions permitted
by Section 5.1(xiii) or (C) loans, advances and capital contributions to, and
investments in, the Company or a wholly owned Subsidiary of the
Company;
(xv) shall
not, and shall not permit any of its Subsidiaries to, enter into, amend, waive
or terminate (other than terminations in accordance with their terms) any
Affiliate Transaction, other than continuing any Affiliate Transactions in
existence on the date of this Agreement;
(xvi) shall
not, and shall not permit any of its Subsidiaries to, without the prior written
consent of Parent, make any material amendment in any Tax Return other than
in
the ordinary course of business or make or change any material Tax election
except in the ordinary course of business;
(xvii) shall
not, and shall not permit any of its Subsidiaries to, adopt or enter into a
plan
of complete or partial liquidation, dissolution, restructuring, recapitalization
or other reorganization of the Company, or any of its Subsidiaries (other than
the Merger);
(xviii) shall
not, and shall not permit any of its Subsidiaries to, write up, write down
or
write off the book value of any assets that are, individually or in the
aggregate, material to the Company and its Subsidiaries, taken as a whole,
other
than (A) in the ordinary course of business or (B) as may be required by GAAP
or
applicable Law;
(xix) shall
not, and shall not permit any of its Subsidiaries to, pay, discharge, waive,
settle or satisfy any claim, liability or obligation (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than (A) in the ordinary
course of business or (B) any claim, liability or obligation not in excess
of $3
million individually or $10 million in the aggregate;
(xx) shall
not, and shall not permit any of its Subsidiaries to, agree, in writing or
otherwise, or announce an intention, to take any of the foregoing
actions;
(xxi) shall
not
consent to or otherwise voluntarily agree to guarantee or become liable for
any
indebtedness for borrowed money in excess of amounts outstanding as of the
date
of this Agreement of, or increase its obligations to make capital contributions
to, Kentucky Speedway; and
(xxii) shall
use
commercially reasonable efforts to direct the business of the Company Joint
Ventures to be conducted in compliance with the provisions of this Section
5.1
as if the Company Joint Ventures were Subsidiaries of the Company.
(c) Parent
agrees with the Company, on behalf of itself and its Subsidiaries and
affiliates, that, between the date of this Agreement and the Effective Time,
Parent shall not, and shall not permit any of its Subsidiaries or affiliates
to,
take or agree to take any action (including entering into agreements with
respect to any acquisitions, mergers, consolidations or
31
business
combinations) which would reasonably be expected to result in, individually
or
in the aggregate, a Parent Material Adverse Effect.
Section
5.2. Investigation.
(a) The
Company shall afford to Parent and to its officers, employees, accountants,
consultants, legal counsel, financial advisors, prospective financing sources
and agents and other representatives (collectively, “Representatives”)
reasonable access during normal business hours, throughout the period prior
to
the earlier of the Effective Time and the Termination Date, to its and its
Subsidiaries’ officers, employees, properties, contracts, commitments, books and
records and any report, schedule or other document filed or received by it
pursuant to the requirements of applicable Laws and shall furnish Parent with
financial, operating and other data and information as Parent, through its
officers, employees or other authorized representatives, may from time to time
reasonably request in writing. Notwithstanding the foregoing, the Company shall
not be required to afford such access if it would unreasonably disrupt the
operations of the Company or any of its Subsidiaries, would cause a violation
of
any agreement to which the Company or any of its Subsidiaries is a party, would
cause a reasonable risk of a loss of privilege to the Company or any of its
Subsidiaries or would constitute a violation of any applicable Law, nor shall
Parent or any of its Representatives be permitted to perform any onsite
procedure (including any onsite environmental study) with respect to any
property of the Company or any of its Subsidiaries, except, with respect to
any
on site procedure, with the Company’s prior written consent (which consent shall
not be unreasonably withheld, delayed or conditioned if such procedure is
necessary for the Debt Financing).
(b) Parent
hereby agrees that all information provided to it or its Representatives in
connection with this Agreement and the consummation of the transactions
contemplated by this Agreement shall be deemed to be Evaluation Material, as
such term is used in, and shall be treated in accordance with, the
Confidentiality Agreement, dated as of June 9, 2006, between the Company, ▇▇▇▇
Capital Partners, LLC and ▇▇▇▇▇▇▇▇▇ Partners (the “Confidentiality
Agreement”).
Section
5.3. No
Solicitation.
(a) During
the period beginning on the date of this Agreement and continuing until 11:59
p.m. (New York time) on the date that is fifty (50) days after the date of
the
public announcement of this Agreement (the “Solicitation
Period End Date”),
the
Company, its Subsidiaries, and their respective Representatives shall be
permitted to, and shall have the right to, directly or indirectly (acting under
the direction of the Special Committee) (i) solicit, initiate or encourage
any inquiry with respect to, or the making, submission or announcement of,
any
Alternative Proposal and (ii) participate in discussions or negotiations
regarding, and furnish to any person information with respect to, and take
any
other action to facilitate any inquiries or the making of any proposal that
constitutes, or may lead to, an Alternative Proposal; provided,
however,
that
the Company shall not, and shall not authorize or permit any of its Subsidiaries
or any Representative of the Company or its Subsidiaries to, provide to any
third party any material non-public information unless the Company receives
from
such third party an executed confidentiality agreement with confidentiality
provisions in form no more favorable to such
32
person
than those confidentiality provisions contained in the Confidentiality
Agreement. Parent agrees that neither it nor any affiliate or Subsidiary
of
Parent shall, and that it shall use its reasonable best efforts to cause
its and
their respective Representatives not to, directly or indirectly, contact,
discourage, interfere with or participate in discussions with, any person
that,
to Parent’s knowledge, has made, or is considering or participating in
discussions or negotiations with the Company, its Subsidiaries or their
respective Representatives regarding, an Alternative
Proposal.
(b) Subject
to Sections 5.3(c)-(e), and except as it may relate to any person or group
of
related persons from whom the Company has received, prior to the Solicitation
Period End Date, a written indication of interest that the Special Committee
or
the Board of Directors reasonably believes is bona fide and could reasonably
be
expected to result in a Superior Proposal (each such person or group, an
“Excluded
Party”),
(A)
on the Solicitation Period End Date, the Company shall, and shall cause its
Subsidiaries to, and shall direct its and their respective Representatives
to,
immediately cease any discussions or negotiations with any parties that may
be
ongoing with respect to any Alternative Proposal and (B) during the period
beginning on the Solicitation Period End Date and continuing until the Effective
Time or, if earlier, the termination of this Agreement in accordance with
Article VII, the Company agrees that neither it nor any Subsidiary of the
Company shall, and that it shall direct its and their respective Representatives
not to, directly or indirectly, (i) solicit, initiate or knowingly facilitate
or
encourage any inquiry with respect to, or the making, submission or announcement
of, any Alternative Proposal, (ii) participate in any negotiations regarding
an
Alternative Proposal with, or furnish any non-public information or access
to
its properties, books, records or personnel to, any person that has made or,
to
the Company’s knowledge, is considering making an Alternative Proposal, (iii)
engage in discussions regarding an Alternative Proposal with any person that
has
made or, to the Company’s knowledge, is considering making an Alternative
Proposal, except to notify such person as to the existence of the provisions
of
this Section 5.3, (iv) approve, endorse or recommend any Alternative Proposal,
(v) enter into any letter of intent or agreement in principle or any agreement
providing for any Alternative Proposal (except for confidentiality agreements
permitted under Section 5.3(c)), (vi) otherwise cooperate with, or assist or
participate in, or knowingly facilitate or encourage any effort or attempt
by
any person (other than Parent, Merger Sub or their Representatives) with respect
to, or which would reasonably be expected to result in, an Alternative Proposal,
or (vii) exempt any person from the restrictions contained in any state takeover
or similar laws, including Section 203 of the DGCL or otherwise cause such
restrictions not to apply. The Company shall promptly inform its
Representatives, and shall cause its Subsidiaries promptly to inform their
respective Representatives, of the obligations under this Section
5.3(b).
(c) Notwithstanding
the limitations set forth in Section 5.3(b), at any time from the Solicitation
Period End Date and continuing until the earlier of the receipt of the Company
Stockholder Approval and the Termination Date, if the Company receives an
unsolicited bona fide written Alternative Proposal (A) which (i) constitutes
a
Superior Proposal or (ii) which the Special Committee or the Board of Directors
determines in good faith could reasonably be expected to result in a Superior
Proposal and (B) the Special Committee or the Board of Directors determines
in
good faith, after consultation with the Special Committee’s or the Company’s
legal counsel that the failure of the Special Committee or the Board of
Directors to take the actions set forth in clauses (x) and (y) below with
respect to such Alternative Proposal
33
would
be
inconsistent with the directors’ exercise of their fiduciary obligations to the
Company’s stockholders under applicable Law, then the Company may take the
following actions: (x) furnish non-public information to the third party
making
such Alternative Proposal (if, and only if, prior to so furnishing such
information, the Company receives from the third party an executed
confidentiality agreement with confidentiality provisions in form no more
favorable to such person than those confidentiality provisions contained
in the
Confidentiality Agreement) and (y) engage in discussions or negotiations
with
such third party with respect to such Alternative Proposal.
(d) Other
than in accordance with Section 5.3, neither the Special Committee nor Board
of
Directors shall (i) withdraw or modify, or propose publicly to withdraw or
modify in a manner adverse to Parent, the approval or recommendation by the
Special Committee or the Board of Directors of the Merger or this Agreement
or
the other transactions contemplated by this Agreement; (ii) approve, adopt
or
recommend, or propose publicly to approve, adopt or recommend, any Alternative
Proposal; (iii) make any recommendation in connection with a tender offer or
exchange offer other than a recommendation against such offer or (iv) exempt
any
person from the restrictions contained in any state takeover or similar laws,
including Section 203 of the DGCL (each of the foregoing, a “Change
of Recommendation”);
provided,
however,
that,
in response to the receipt of a Superior Proposal that has not been withdrawn
or
abandoned, the Special Committee or the Board of Directors may, at any time,
make a Change of Recommendation if the Special Committee or the Board of
Directors has concluded in good faith, after consultation with the Company’s or
the Special Committee’s legal and financial advisors, that the failure of the
Special Committee or the Board of Directors to effect a Change of Recommendation
would be inconsistent with the directors’ exercise of their fiduciary
obligations to the Company’s stockholders under applicable Law. No Change of
Recommendation shall change the approval of the Special Committee or the Board
of Directors for purposes of causing any state takeover statute or other state
law to be inapplicable to the transactions contemplated by this
Agreement.
(e) Nothing
in this Agreement shall prohibit or restrict the Special Committee or the Board
of Directors from making a Change of Recommendation to the extent that the
Special Committee or the Board of Directors determines in good faith, after
consultation with the Company’s or the Special Committee’s legal counsel, that
the failure of the Special Committee or the Board of Directors to effect a
Change of Recommendation would be inconsistent with the directors’ exercise of
their fiduciary obligations to the Company’s stockholders under applicable
Law.
(f) Nothing
contained in this Agreement shall prohibit the Company or its Board of Directors
from disclosing to its stockholders a position contemplated by Rules 14d-9
and
14e-2(a) promulgated under the Exchange Act.
(g) As
used
in this Agreement, “Alternative
Proposal”
shall
mean any bona fide proposal or offer made by any person or group of persons
(other than a proposal or offer by Parent or any of its Subsidiaries) for (i)
a
merger, reorganization, share exchange, consolidation, business combination,
recapitalization, dissolution, liquidation or similar transaction involving
the
Company, (ii) the direct or indirect acquisition in a single transaction or
series of related transactions by any person of twenty-five percent (25%) or
more of the assets of the Company
34
and
its
Subsidiaries, taken as a whole, (iii) the direct or indirect acquisition
in a
single transaction or series of related transactions by any person of
twenty-five percent (25%) or more of the outstanding shares of Company Common
Stock, (iv) any tender offer or exchange offer that if consummated would
result
in any person beneficially owning twenty-five percent (25%) or more of the
Shares then outstanding, or (v) all or a substantial portion of any Specified
Concept (as defined below). “Specified
Concept”
means
each of the restaurant chains known by the following names: Outback Steakhouse,
Bonefish Grill, Carrabba’s Italian Grill, ▇▇▇▇▇▇▇'▇ Prime Steakhouse and Wine
Bar and Roy’s.
(h) As
used
in this Agreement “Superior
Proposal”
shall
mean an Alternative Proposal (with all percentages, in the definition of
Alternative Proposal increased to 50%) on terms that the Special Committee
or
the Board of Directors determines in good faith, after consultation with the
Company’s or the Special Committee’s financial advisors and legal counsel, and
considering such factors as the Special Committee or the Board of Directors,
as
applicable, consider to be appropriate (including the timing, ability to
finance, financial and regulatory aspects and likelihood of consummation of
such
proposal, and any alterations to this Agreement agreed to in writing by Parent
in response thereto), is more favorable to the Company and its stockholders
than
the transactions contemplated by this Agreement.
Section
5.4. Filings;
Other Actions.
(a) The
Company, Parent and Merger Sub shall each use all reasonable efforts to take
or
cause to be taken such actions as may be required to be taken under the Exchange
Act any other federal securities Laws, and under any applicable state securities
or “blue sky” Laws in connection with the Merger and the other transactions
contemplated by this Agreement, including the Proxy Statement and the Schedule
13E-3. In connection with the Merger and the Company Meeting, the Company shall
prepare and file with the SEC the Proxy Statement and the Schedule 13E-3
relating to the Merger and the other transactions contemplated by this
Agreement, and the Company and Parent shall use all reasonable efforts to
respond to the comments of the SEC and to cause the Proxy Statement to be mailed
to the Company’s stockholders, all as promptly as reasonably practicable;
provided,
however,
that
prior to the filing of the Proxy Statement and the Schedule 13E-3, the Company
shall consult with Parent with respect to such filings and shall afford Parent
or its Representatives reasonable opportunity to comment thereon. Parent and
Merger Sub shall provide the Company with any information for inclusion in
the
Proxy Statement and the Schedule 13E-3 which may be required under applicable
Law and/or which is reasonably requested by the Company. The Company shall
notify Parent of the receipt of comments of the SEC and of any request from
the
SEC for amendments or supplements to the Proxy Statement or the Schedule 13E-3
or for additional information, and will promptly supply Parent with copies
of
all correspondence between the Company or its Representatives, on the one hand,
and the SEC or members of its staff, on the other hand, with respect to the
Proxy Statement, the Schedule 13E-3 or the Merger. Each of the Company, Parent
and Merger Sub shall use its respective reasonable best efforts to resolve
all
SEC comments with respect to the Proxy Statement and the Schedule 13E-3 and
any
other required filings as promptly as practicable after receipt thereof. Each
of
the Company, Parent and Merger Sub agree to correct any information provided
by
it for use in the Proxy Statement which shall have become false or misleading.
If at any time prior to the Company Meeting any event should occur which is
required by applicable Law to be set forth in an amendment of, or a
35
supplement
to, the Proxy Statement or the Schedule 13E-3, the Company will promptly
inform
Parent. In such case, the Company, with the cooperation of Parent, will,
upon
learning of such event, promptly prepare and file such amendment or supplement
with the SEC to the extent required by applicable Law and shall mail such
amendment or supplement to the Company’s stockholders to the extent required by
applicable Law; provided,
however,
that
prior to such filing, the Company shall consult with Parent with respect
to such
amendment or supplement and shall afford Parent or its Representatives
reasonable opportunity to comment thereon. Notwithstanding the forgoing,
the
Company shall have no obligation to notify Parent of any matters to the extent
that the Special Committee or the Board of Directors determines in good faith,
after consultation with the Company’s or the Special Committee’s legal counsel,
that to do so would be inconsistent with the directors’ exercise of their
fiduciary obligations to the Company’s stockholders under applicable
Law.
(b) Prior
to
the earlier of the Effective Time or the Termination Date, the Company and
Parent shall cooperate with each other in order to lift any injunctions or
remove any other legal impediment to the consummation of the transactions
contemplated by this Agreement.
(c) Subject
to the other provisions of this Agreement, the Company shall (i) take all action
necessary in accordance with the DGCL and its amended and restated certificate
of incorporation and bylaws to duly call, give notice of, convene and hold
a
meeting of its stockholders as promptly as reasonably practicable following
the
mailing of the Proxy Statement for the purpose of obtaining the Company
Stockholder Approval (the “Company
Meeting”)
(including mailing the Proxy Statement as soon as reasonably practicable after
the SEC has cleared the Proxy Statement and holding the Company Meeting no
later
than 30 days after mailing the Proxy Statement, unless a later date is mutually
agreed by the Company and by Parent), (ii) include in the Proxy Statement the
recommendation of the Board of Directors, based on the unanimous recommendation
of the Special Committee, that the stockholders of the Company vote in favor
of
the adoption of this Agreement and, subject to the approval of the Advisors,
as
applicable, the written opinions of the Advisors, dated as of the date of this
Agreement, that, as of such date, the Merger Consideration is fair, from a
financial point of view, to the holders of the Company Common Stock and (iii)
use all reasonable efforts to solicit from its stockholders proxies in favor
of
the approval of this Agreement and the transactions contemplated by this
Agreement.
(d) Notwithstanding
anything herein to the contrary, unless this Agreement is terminated in
accordance with Article VII, the Company will take all of the actions
contemplated by Section 5.4(a) and Section 5.4(c) regardless of whether the
Board of Directors (acting through the Special Committee, if then in existence)
has approved, endorsed or recommended an Alternative Proposal or has withdrawn,
modified or amended the Recommendation, and will submit this Agreement for
adoption by the stockholders of the Company at the Company Meeting.
Notwithstanding anything to the contrary contained in this Agreement, the
Company shall not be required to hold the Company Meeting if this Agreement
is
terminated in accordance with Article VII.
36
Section
5.5. Stock
Options and Other Stock-Based Awards; Employee Matters.
(a) Stock
Options and Other Stock-Based Awards.
Except
as otherwise agreed to in writing between the Company, Parent, Merger Sub and
certain members of management of the Company listed in Schedule A to this
Agreement, and solely with respect to such members of management of the Company
and to the extent specified in such Section of the Parent Disclosure
Schedules:
(i) Each
option to purchase shares of Company Common Stock (each, a “Company
Stock Option”)
granted under the Company Stock Plans or otherwise, whether vested or unvested,
that is outstanding immediately prior to the Effective Time shall, as of the
Effective Time, become fully vested and be converted into the right to receive
at the Effective Time an amount in cash in U.S. dollars equal to the product
of
(x) the total number of shares of Company Common Stock subject to such Company
Stock Option and (y) the excess, if any, of the amount of the Merger
Consideration over the exercise price per share of Company Common Stock subject
to such Company Stock Option, with the aggregate amount of such payment rounded
down to the nearest cent (the aggregate amount of such cash hereinafter referred
to as the “Option
Consideration”)
less
such amounts as are required to be withheld or deducted under the Code or any
provision of state, local or foreign Tax Law with respect to the making of
such
payment.
(ii) At
the
Effective Time, each account under the Company’s Directors’
Deferred Compensation Plan, as amended, (each, a “Directors’
Award Account”),
shall
become fully vested and payable and shall entitle the holder thereof to receive,
at the Effective Time, an amount in cash equal to the Merger Consideration
in
respect of each notional Share credited to the holder under his or her Director
Award Account.
(iii) Immediately
prior to the Effective Time, each award of restricted Company Common Stock
(the
“Restricted
Shares”)
shall
be converted into the right to receive the Merger Consideration in an amount
as
determined under Section 2.1(a), payable on a deferred basis at the time that
the underlying Restricted Shares would have vested under their terms as in
effect immediately prior to the Effective Time plus earnings thereon (as
described below), less such amounts as are required to be withheld or deducted
under the Code or any provision of state, local or foreign Tax Law with respect
to the making of such payment and subject to the satisfaction by the holder
of
such Restricted Shares of all terms and conditions to which such vesting was
subject under the terms of the Restricted Shares as in effect immediately prior
to the Effective Time, including without limitation all forfeiture provisions,
provided,
however,
that
the holder’s deferred cash account will become immediately vested and payable
upon termination of such holder’s employment by the Company without cause or
upon the individual’s death or disability. If the holder of such Restricted
Shares fails to satisfy such terms and conditions (as modified hereby), such
holder shall forfeit his or her right to such Merger Consideration and any
earnings thereon, and such amounts shall revert and be forfeited to Parent.
Effective as of the Effective Time, Parent shall establish a grantor trust
and
shall deposit therein the Merger Consideration attributable to the Restricted
Shares. From and after the Effective Time, Parent shall cause such amounts
to be
invested at the option of the account holder in a money market fund or an
S&P 500 Index Fund and shall cause the earnings on such amounts to
37
be
credited to the accounts under such grantor trust of the former holders of
the
Restricted Shares.
(iv) At
the
Effective Time, all amounts held in the accounts denominated in shares of
Company Common Stock under the Partner Equity Deferred Compensation Stock Plan
component of the OSI Restaurant Partners, Inc. Partner Equity Plan (the
“PEP”)
(each,
a “Deferred
Unit Account”)
shall
be converted into an obligation to pay cash with a value equal to the product
of
(A) the Merger Consideration and (B) the number of shares of Company Common
Stock deemed held in such Deferred Unit Account, in accordance with the payment
schedule and consistent with the terms of the PEP as in effect from time to
time.
For
purposes of this Agreement, “Company
Stock-Based Awards”
means
the obligations denominated in and measured by reference to shares of Company
Common Stock that are credited to the accounts under the Directors’ Deferred
Compensation Plan, as amended, and the Partner Equity Deferred Compensation
Stock Plan component of the PEP.
(v) Prior
to
the Effective Time, the Board of Directors or the Compensation Committee of
the
Board of Directors, as applicable, shall adopt amendments to the Company Stock
Plans and the applicable Company Benefit Plans with respect to Company Stock
Options, Company Stock-Based Awards and Restricted Shares to implement the
foregoing provisions of Sections 5.5(a)(i), 5.5(a)(ii), 5.5(a)(iii) and
5.5(a)(iv).
(b) Employee
Matters.
(i) From
and
after the Effective Time, Parent shall honor all Company Benefit Plans and
compensation arrangements and agreements in accordance with their terms as
in
effect immediately before the Effective Time. For a period of two
years
following the Effective Time, Parent shall provide or cause to be provided,
to
each current employee of the Company and its Subsidiaries
(“Company
Employees”)
total
compensation and benefits that are substantially comparable in the aggregate
to
the total compensation and benefits provided to Company Employees immediately
before the Effective Time
(giving
consideration to equity-based compensation, equity-based benefits and
nonqualified deferred compensation programs; provided,
however,
that
Parent shall not be required to provide equity-based compensation, equity-based
benefits and nonqualified deferred compensation programs); provided,
however,
that
nothing herein shall prevent the amendment or termination of any Company Benefit
Plan or interfere with Parent’s or any of its Subsidiaries’ right or obligation
to make such changes as are necessary to conform with applicable Law or shall
cause or require the extension, renewal or amendment of, or prevent the
expiration of, any employment agreement which shall expire, terminate or fail
to
renew pursuant to its terms during such period.
(ii) For
all
purposes (including purposes of vesting, eligibility to participate and level
of
benefits) under the employee benefit plans providing benefits to any Company
Employees after the Effective Time (the “New
Plans”),
each
Company Employee shall be credited with his or her years of service with the
Company and its Subsidiaries and their respective predecessors before the
Effective Time, to the same extent as such Company Employee was entitled, before
the Effective Time, to credit for such service under any similar Company
employee benefit plan in which such Company Employee participated or was
eligible to participate immediately prior to the Effective Time, provided
that the
foregoing shall not
38
apply
with respect to benefit accrual under any defined benefit pension plan or
to the
extent that its application would result in a duplication of benefits with
respect to the same period of service. In
addition, and without limiting the generality of the foregoing, (A) each
Company
Employee shall be immediately eligible to participate, without any waiting
time,
in any and all New Plans to the extent coverage under such New Plan is
comparable to a Company Benefit Plan in which such Company Employee participated
immediately before the consummation of the Merger (such plans, collectively,
the
“Old
Plans”),
and (B)
for
purposes of each New Plan providing medical, dental, pharmaceutical and/or
vision benefits to any Company Employee, Parent shall cause all pre-existing
condition exclusions and actively-at-work requirements of such New Plan to
be
waived for such employee and his or her covered dependents, unless such
conditions would not have been waived under the comparable Old Plans of the
Company or its Subsidiaries in which such employee participated immediately
prior to the Effective Time and Parent shall cause any eligible expenses
incurred by such employee and his or her covered dependents during the portion
of the plan year of the Old Plan ending on the date such employee’s
participation in the corresponding New Plan begins to be taken into account
under such New Plan for purposes of satisfying all deductible, coinsurance
and
maximum out-of-pocket requirements applicable to such employee and his or
her
covered dependents for the applicable plan year as if such amounts had been
paid
in accordance with such New Plan.
(iii) The
parties hereto agree to the additional matters set forth on Section 5.5(b)(iii)
to the Company Disclosure Schedule.
Section
5.6. Reasonable
Best Efforts.
(a) Subject
to the terms and conditions set forth in this Agreement, each of the parties
hereto shall use (and cause its affiliates to use) its reasonable best efforts
(subject to, and in accordance with, applicable Law) to take promptly, or cause
to be taken promptly, all actions, and to do promptly, or cause to be done
promptly, and to assist and cooperate with the other parties in doing, all
things necessary, proper or advisable under applicable Laws to consummate and
make effective the Merger and the other transactions contemplated by this
Agreement, including (i) obtaining all necessary actions or nonactions, waivers,
consents and approvals, including the Company Approvals and the Parent
Approvals, from Governmental Entities and making all necessary registrations
and
filings and taking all steps as may be necessary to obtain an approval or waiver
from, or to avoid an action or proceeding by, any Governmental Entity, (ii)
obtaining all necessary consents, approvals or waivers from third parties and
all consents, approvals and waivers from third parties reasonably requested
by
Parent to be obtained in respect of the Company Material Contracts in connection
with the Merger, this Agreement or the transactions contemplated by this
Agreement, (iii) defending any lawsuits or other legal proceedings, whether
judicial or administrative, challenging this Agreement or the consummation
of
the Merger and the other transactions contemplated by this Agreement and (iv)
executing and delivering any additional instruments necessary to consummate
the
Merger and the other transactions contemplated by this Agreement; provided,
however,
that
prior to the Effective Time in no event shall the Company or any of its
Subsidiaries be required to pay or, absent the prior written consent of Parent
(such consent not to be unreasonably withheld, conditioned or delayed), pay
or
commit to pay any material fee, material penalties or other material
consideration to any landlord or other third party to obtain any consent,
approval or
39
waiver
required for the consummation of the Merger under any real estate leases
or
Company Material Contracts.
(b) Subject
to the terms and conditions herein provided and without limiting the foregoing,
the Company and Parent shall (i) promptly, but in no event later than fifteen
(15) business days after the date of this Agreement, make their respective
filings and thereafter make any other required submissions under the HSR Act;
(ii) use reasonable best efforts to cooperate with each other in (x) determining
whether any filings are required to be made with, or consents, permits,
authorizations, waivers or approvals are required to be obtained from, any
third
parties or other Governmental Entities in connection with the execution and
delivery of this Agreement and the consummation of the transactions contemplated
by this Agreement and (y) timely making all such filings and timely seeking
all
such consents, permits, authorizations or approvals; (iii) use reasonable best
efforts to take, or cause to be taken, all other actions and do, or cause to
be
done, all other things necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement, including taking
all
such further action as reasonably may be necessary to resolve such objections,
if any, as the United States Federal Trade Commission, the Antitrust Division
of
the United States Department of Justice, state antitrust enforcement authorities
or competition authorities of any other nation or other jurisdiction or any
other person may assert under Regulatory Law with respect to the transactions
contemplated by this Agreement, and to avoid or eliminate each and every
impediment under any Law that may be asserted by any Governmental Entity with
respect to the Merger so as to enable the Closing to occur as soon as reasonably
possible (and in any event no later than the End Date), including (x) proposing,
negotiating, committing to and effecting, by consent decree, hold separate
order
or otherwise, the sale, divestiture or disposition of such assets or businesses
of Parent or its Subsidiaries or affiliates or of the Company or its
Subsidiaries and (y) otherwise taking or committing to take actions that after
the Closing Date would limit the freedom of Parent or its Subsidiaries’
(including the Surviving Corporation’s) or affiliates’ freedom of action with
respect to, or its ability to retain, one or more of its or its Subsidiaries’
(including the Surviving Corporation’s) businesses, product lines or assets, in
each case as may be required in order to avoid the entry of, or to effect the
dissolution of, any injunction, temporary restraining order or other order
in
any suit or proceeding which would otherwise have the effect of preventing
or
materially delaying the Closing; (iv) promptly inform the other party upon
receipt of any material communication from the United States Federal Trade
Commission, the Antitrust Division of the United States Department of Justice
or
any other Governmental Entity regarding any of the transactions contemplated
by
this Agreement; and (v) subject to applicable legal limitations and the
instructions of any Governmental Entity, keep each other apprised of the status
of matters relating to the completion of the transactions contemplated thereby,
including promptly furnishing the other with copies of notices or other
communications received by the Company or Parent, as the case may be, or any
of
their respective Subsidiaries, from any third party and/or any Governmental
Entity with respect to such transactions. The Company and Parent shall permit
legal counsel for the other party reasonable opportunity to review in advance,
and consider in good faith the views of the other party in connection with,
any
proposed written communication to any Governmental Entity. Each of the Company
and Parent agrees not to (A) participate in any substantive meeting or
discussion, either in person or by telephone, with any Governmental Entity
in
connection with the proposed transactions unless it consults with the other
party in advance and, to the extent not prohibited by such Governmental Entity,
gives the other party the opportunity to attend and participate, (B) extend
any
waiting period under the
40
HSR
Act
without the prior written consent of the other party (such consent not to
be
unreasonably withheld, conditioned or delayed) and (C) enter into any agreement
with any Governmental Entity not to consummate the transactions contemplated
by
this Agreement without the prior written consent of the other party (such
consent not to be unreasonably withheld, conditioned or
delayed).
(c) In
furtherance and not in limitation of the agreements of the parties contained
in
this Section 5.6, if any administrative or judicial action or proceeding,
including any proceeding by a private party, is instituted (or threatened to
be
instituted) challenging any transaction contemplated by this Agreement as
violative of any Regulatory Law, each of the Company and Parent shall cooperate
in all respects with each other and shall use their respective reasonable best
efforts to contest and resist any such action or proceeding and to have vacated,
lifted, reversed or overturned any decree, judgment, injunction or other order,
whether temporary, preliminary or permanent, that is in effect and that
prohibits, prevents or restricts consummation of the transactions contemplated
by this Agreement. Notwithstanding the foregoing or any other provision of
this
Agreement, nothing in this Section 5.6 shall limit a party’s right to terminate
this Agreement pursuant to Section 7.1(b) or 7.1(c) so long as such party has,
prior to such termination, complied with its obligations under this Section
5.6.
(d) For
purposes of this Agreement, “Regulatory
Law”
means
the ▇▇▇▇▇▇▇ Act of 1890, the ▇▇▇▇▇▇▇ Antitrust Act of 1914, the HSR Act, the
Federal Trade Commission Act of 1914 and all other federal, state or foreign
statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines and other Laws, including any antitrust, competition or trade
regulation Laws, that are designed or intended to (i) prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint
of
trade or lessening competition through merger or acquisition, (ii) preserve
or
promote diversity of media ownership or (iii) protect the national security
or
the national economy of any nation.
Section
5.7. Takeover
Statute.
If any
“fair price,” “moratorium,” “control share acquisition” or other form of
antitakeover statute or regulation shall become applicable to the transactions
contemplated by this Agreement, each of the Company and Parent and the members
of their respective Boards of Directors shall grant such approvals and take
such
actions as are reasonably necessary so that the transactions contemplated by
this Agreement may be consummated as promptly as practicable on the terms
contemplated by this Agreement and otherwise act to eliminate or minimize the
effects of such statute or regulation on the transactions contemplated by this
Agreement.
Section
5.8. Public
Announcements.
The
Company and Parent will consult with and provide each other the reasonable
opportunity to review and comment upon any press release or other public
statement or comment prior to the issuance of such press release or other public
statement or comment relating to this Agreement or the transactions contemplated
by this Agreement and shall not issue any such press release or other public
statement or comment prior to such consultation except as may be required by
applicable Law or by obligations pursuant to any listing agreement with any
national securities exchange. Parent and the Company agree to issue a joint
press release announcing this Agreement.
41
Section
5.9. Indemnification
and Insurance.
(a) Parent
and Merger Sub agree that all rights to exculpation, indemnification and
advancement of expenses now existing in favor of the current or former
directors, officers or employees, as the case may be, of the Company or its
Subsidiaries as provided in their respective certificate of incorporation or
bylaws or other organization documents or in any agreement shall survive the
Merger and shall continue in full force and effect. For a period of six (6)
years from the Effective Time, Parent and the Surviving Corporation shall
maintain in effect exculpation, indemnification and advancement of expenses
provisions no less favorable in the aggregate than those of the Company’s and
any Company Subsidiary’s certificate of incorporation and bylaws or similar
organization documents in effect immediately prior to the Effective Time or
in
any indemnification agreements of the Company or its Subsidiaries with any
of
their respective directors, officers or employees in effect immediately prior
to
the Effective Time, and shall not amend, repeal or otherwise modify any such
provisions, for a period of six (6) years from the Effective Time, in any manner
that would adversely affect the rights thereunder of any individuals who at
the
Effective Time were current or former directors, officers or employees of the
Company or any of its Subsidiaries; provided,
however,
that
all rights to indemnification in respect of any Action pending or asserted
or
any claim made within such period shall continue until the disposition of such
Action or resolution of such claim. From and after the Effective Time, Parent
shall assume, be jointly and severally liable for, and honor, guaranty and
stand
surety for, and shall cause the Surviving Corporation and its Subsidiaries
to
honor, in accordance with their respective terms, each of the agreements
contained in this Section 5.9 without limit as to time.
(b) Each
of
Parent and the Surviving Corporation shall, to the fullest extent permitted
under applicable Law, indemnify and hold harmless (and advance funds in respect
of each of the foregoing) each current and former director or officer of the
Company or any of its Subsidiaries and each person who served as a director,
officer, member, trustee or fiduciary of another corporation, partnership,
joint
venture, trust, pension or other employee benefit plan or enterprise at the
request of the Company, in and to the extent of their capacities as such and
not
as stockholders and/or equity holders of the Company or its Subsidiaries or
otherwise (each, together with such person’s heirs, executors or administrators,
an “Indemnified
Party”)
against any costs or expenses (including advancing attorneys’ fees and expenses
in advance of the final disposition of any claim, suit, proceeding or
investigation to each Indemnified Party to the fullest extent permitted by
law),
judgments, fines, losses, claims, damages, liabilities and amounts paid in
settlement in connection with any actual or threatened claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative (an “Action”),
arising out of, relating to or in connection with any action or omission
occurring or alleged to have occurred whether before or after the Effective
Time
(including acts or omissions in connection with such persons serving as an
officer, director or other fiduciary in any entity if such service was at the
request or for the benefit of the Company); provided,
however,
that
the Surviving Corporation will not be liable for any settlement effected without
the Surviving Corporation’s prior written consent (such consent not to be
unreasonably withheld, conditioned or delayed). In the event of any such Action,
Parent and the Surviving Corporation shall cooperate with the Indemnified Party
in the defense of any such Action.
42
(c) For
a
period of six (6) years from the Effective Time, Parent shall cause to be
maintained in effect the current policies of directors’ and officers’ liability
insurance and fiduciary liability insurance maintained by the Company and its
Subsidiaries with respect to matters arising on or before the Effective Time;
provided,
however,
that
after the Effective Time, Parent shall not be required to pay annual premiums
in
excess of 300% of the last annual premium paid by the Company prior to the
date
of this Agreement in respect of the coverages required to be obtained pursuant
hereto, but in such case shall purchase as much coverage as reasonably
practicable for such amount.
(d) Parent
shall pay all reasonable expenses, including reasonable attorneys’ fees, that
may be incurred by any Indemnified Party in enforcing the indemnity and other
obligations provided in this Section 5.9.
(e) The
rights of each Indemnified Party hereunder shall be in addition to, and not
in
limitation of, any other rights such Indemnified Party may have under the
certificate of incorporation or bylaws or other organization documents of the
Company or any of its Subsidiaries or the Surviving Corporation, any other
indemnification arrangement, the DGCL or otherwise. The provisions of this
Section 5.9 shall survive the consummation of the Merger and expressly are
intended to benefit, and are enforceable by, each of the Indemnified
Parties.
(f) In
the
event Parent, the Surviving Corporation or any of their respective successors
or
assigns (i) consolidates with or merges into any other person and shall not
be
the continuing or surviving corporation or entity in such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any person, then, and in either such case, proper provision shall be made
so
that the successors and assigns of Parent or the Surviving Corporation, as
the
case may be, shall assume the obligations set forth in this Section
5.9.
Section
5.10. Control
of Operations.
Nothing
contained in this Agreement shall give Parent, directly or indirectly, the
right
to control or direct the Company’s operations prior to the Effective Time. Prior
to the Effective Time, the Company shall exercise, consistent with the terms
and
conditions of this Agreement, complete control and supervision over its
operations.
Section
5.11. Financing.
(a) Parent
and Merger Sub shall use its reasonable best efforts to obtain the Financing
on
the terms and conditions described in the Financing Commitments, including
using
its reasonable best efforts (i) to negotiate definitive agreements with respect
thereto on the terms and conditions contained in the Financing Commitments,
(ii)
to satisfy all conditions on a timely basis to obtaining the Financing
applicable to Parent and Merger Sub set forth in such definitive agreements
that
are within its control, (iii) to comply with its obligations under the Debt
Commitment Letter and (iv) to enforce its rights under the Debt Commitment
Letter. Parent shall give the Company prompt notice upon becoming aware of
any
material breach by any party of the Financing Commitments or any termination
of
the Financing Commitments. Parent shall keep the Company informed on a
reasonable basis and in reasonable detail of the status of its efforts to
arrange the Debt Financing and shall not permit any amendment or modification
to
be made to, or any waiver of any material provision or remedy under, the Debt
Commitment Letter except as expressly permitted by Section 4.5. In the event
that Parent becomes aware of any
43
event
or
circumstance that makes procurement of any portion of the Financing unlikely
to
occur in the manner or from the sources contemplated in the Financing
Commitments, Parent shall immediately notify the Company and Parent and Merger
Sub shall use their respective reasonable best efforts to arrange any such
portion from alternative sources (such portion from alternate sources, the
“Alternative
Financing”)
on
terms and conditions, taken as a whole, no less favorable to Parent or Merger
Sub (as determined in the reasonable judgment of Parent and Merger Sub).
The
“Marketing
Period”
for
the
Debt Financing shall mean a period of 20 consecutive business days after
the
Initiation Date throughout which (1) Parent and Merger Sub shall have all
the
Required Financial Information and all such information and data remains
current, and (2) the conditions set forth in Sections 6.1(b) and 6.1(c)(i)
are
and remain satisfied and nothing has occurred and no condition exists that
would
reasonably be expected to cause any of the conditions set forth in Section
6.3
to fail to be satisfied assuming the Closing were to be scheduled for any
time
during such 20 consecutive business day period. For purposes of this Agreement,
“Initiation
Date”
shall
mean the fifth business day after the date that the Proxy Statement is first
mailed to a stockholder of the Company. For the avoidance of doubt, in the
event
that (x) all or any portion of the Debt Financing structured as high yield
financing or real estate securitization financing has not been consummated
notwithstanding that the last day of the Marketing Period shall have occurred,
(y) all closing conditions contained in Article VI (other than those contained
in Sections 6.2(c) and 6.3(c)) shall have been satisfied or waived and (z)
the
bridge facilities contemplated by the Debt Commitment Letter (or alternative
bridge financing obtained in accordance with this Agreement) and the proceeds
thereof are available on the terms and conditions described in the Debt
Commitment Letter (or replacement thereof), then Parent and Merger Sub shall
cause the proceeds of such bridge financing to be used to replace such high
yield financing or real estate financing on the Closing pursuant to the proviso
to Section 1.2.
(b) The
Company shall provide, shall cause its Subsidiaries to provide, and shall use
its reasonable best efforts to cause its and their Representatives (including
legal and accounting) to provide, at Parent’s sole expense, all cooperation
reasonably requested by Parent and Merger Sub in connection with the Financing
or any Alternative Financing, including using reasonable best efforts to (i)
cause, upon reasonable advance notice by Parent and on a reasonable number
of
occasions, appropriate officers and employees to be available on a customary
basis for meetings, including management and other presentations and “road show”
appearances, participation in drafting and due diligence sessions, and the
preparation of disclosure documents in connection with any such financing,
provided
that any
private placement memoranda or prospectuses in relation to high yield debt
securities need not be issued by the Company or any of its Subsidiaries prior
to
the Effective Time, provided further
that any
such memoranda or prospectuses shall contain disclosure and financial statements
with respect to the Company or the Surviving Corporation reflecting the
Surviving Corporation and/or its Subsidiaries as the obligor; (ii) cause its
independent accountants and legal counsel to provide assistance to Parent and
Merger Sub (including providing customary comfort) for fees consistent with
the
Company’s existing arrangements with such accountants and legal counsel; (iii)
furnish Parent and Merger Sub (which they may furnish to, and share with, their
financing sources) as promptly as practicable with such financial and other
pertinent information as may be reasonably requested by Parent or Merger Sub,
including the Core Financial Information (collectively, the “Required
Financial Information”)
(for
purposes hereof, “Core
Financial Information”
shall
mean all financial statements and financial data of the type required by
Regulation S-X and Regulation S-K under the Securities Act (other than Rule
3-10
of Regulation S-X) and of the
44
type
and
form, and for the periods, customarily included in private placements under
Rule
144A of the Securities Act to consummate the offerings of high yield debt
securities contemplated by the Debt Commitment Letter (including replacements
or
restatements thereof, and supplements thereto, if any such information would
go
stale or otherwise being unusable for such purpose and in the case of annual
financial statements, the auditors’ report thereon) at the time during the
Company’s fiscal year such offerings will be made); (iv) cooperate with the
marketing efforts of Parent, Merger Sub and their financing sources for any
portion of the financings contemplated by the Debt Commitment Letter and
assist
Parent, Merger Sub and their financing sources in the timely preparation
of
offering documents and similar documents and materials for lender and rating
agency presentations; (v) in connection with any real estate financing
contemplated by the Debt Commitment Letter, allow Parent, Merger Sub and
their
financing sources to perform reasonable and customary due diligence related
to
such properties, including appropriate appraisals, surveys, and Phase 1
environmental assessments and other reasonable inspections and diligence
(and
documentation), including as shall be necessary to comply with any necessary
rating agencies’ requirements; (vi) satisfy the conditions precedent set forth
in the Debt Commitment Letter (to the extent within the control of the Company
or requiring action or cooperation by the Company); and (vii) obtain
accountants’ comfort letters, surveys and title insurance as reasonably
requested by Parent; provided
that (x)
none of the Company or any of its subsidiaries shall be required to pay any
commitment or other similar fee or incur any other liability in connection
with
the Debt Financing prior to the Effective Time, and (y) such requested
cooperation does not unreasonably interfere with the ongoing operations of
the
Company and its subsidiaries. For purposes of this Section 5.11, the term
“Debt
Financing” shall also be deemed to include any Alternative Financing and the
term “Debt Commitment Letter” shall also be deemed to include any commitment
letter (or similar agreement) with respect to such Alternative
Financing.
ARTICLE
VI
CONDITIONS
TO THE MERGER
Section
6.1. Conditions
to Each Party’s Obligation to Effect the Merger.
The
respective obligations of each party to effect the Merger shall be subject
to
the fulfillment (or waiver by all parties) at or prior to the Effective Time
of
the following conditions:
(a) The
Company Stockholder Approval shall have been obtained (without consideration
as
to the vote of any Company Common Stock by the Participating
Holders).
(b) No
Law,
judgment, injunction, order or decree by any court or other tribunal of
competent jurisdiction which prohibits the consummation of the Merger shall
have
been entered and shall continue to be in effect.
(c) (i)
Any
applicable waiting period (and any extension thereof) under the HSR Act shall
have expired or been earlier terminated and (ii) any other Company Approvals
required to be obtained for the consummation, as of the Effective Time, of
the
transactions contemplated by this Agreement, other than any Company Approvals
the failure to obtain which would not have,
individually or in the aggregate, a Company Material Adverse Effect, shall
have
been obtained.
45
Section
6.2. Conditions
to Obligation of the Company to Effect the Merger.
The
obligation of the Company to effect the Merger is further subject to the
fulfillment of the following conditions:
(a) (i)
The
representations and warranties of Parent and Merger Sub set forth in this
Agreement which are qualified by a “Parent Material Adverse Effect”
qualification shall be true and correct in all respects as so qualified at
and
as of the date of this Agreement and at and as of the Closing Date as though
made at and as of the Closing Date and (ii) the representations and warranties
of Parent and Merger Sub set forth in this Agreement which are not qualified
by
a “Parent Material Adverse Effect” qualification shall be true and correct at
and as of the date of this Agreement and at and as of the Closing Date as though
made at and as of the Closing Date, except for such failures to be true and
correct as would not have, in the aggregate, a Parent Material Adverse Effect;
provided,
however,
that,
with respect to clauses (i) and (ii) above, representations and warranties
that
are made as of a particular date or period shall be true and correct (in the
manner set forth in clauses (i) or (ii), as applicable) only as of such date
or
period.
(b) Parent
shall have in all material respects performed all obligations and complied
with
all the agreements required by this Agreement to be performed or complied with
by it prior to the Effective Time.
(c) Parent
shall have delivered to the Company a certificate, dated the Effective Time
and
signed by its Chief Executive Officer or another senior officer, certifying
to
the effect that the conditions set forth in Sections 6.2(a) and 6.2(b) have
been
satisfied.
(d) Consistent
with Section 2.2(a), Parent shall have caused to be deposited with the Paying
Agent cash in an aggregate amount sufficient to pay the Merger Consideration
in
respect of all Company Common Stock plus cash to pay for the Company Stock
Options and the Directors’ Award Accounts pursuant to Section 5.5.
Section
6.3. Conditions
to Obligation of Parent to Effect the Merger.
The
obligation of Parent to effect the Merger is further subject to the fulfillment
of the following conditions:
(a)
(i)
Other than with respect to Sections
3.2(a), 3.2(b), 3.2(c), 3.10(a)(ii), 3.10(b), 3.20 and 3.24,
the
representations and warranties of the Company set forth in this Agreement which
are qualified by a “Company Material Adverse Effect” qualification shall be true
and correct in all respects as so qualified at and as of the date of this
Agreement and at and as of the Closing Date as though made at and as of the
Closing Date and (ii) other than with respect to Sections 3.2(a), 3.2(b),
3.2(c), 3.10(a)(ii), 3.10(b), 3.20 and 3.24, the representations and warranties
of the Company set forth in this Agreement which are not qualified by a “Company
Material Adverse Effect” qualification shall be true and correct at and as of
the date of this Agreement and at and as of the Closing Date as though made
at
and as of the Closing Date, except for such failures to be true and correct
as
would not have, in the aggregate, a Company Material Adverse Effect, (iii)
the
representations and warranties of the Company set forth in Sections 3.2(a),
3.2(b), 3.2(c), 3.20 and 3.24 shall be true and correct in all respects at
and
as of the date of this Agreement and at and as of the Closing Date as though
made at and as of
46
the
Closing Date (subject, in the case of each of the representations and warranties
set out in Sections 3.2(a), 3.2(b), 3.2(c), 3.20 and 3.24, to such inaccuracies
as do not individually or in the aggregate exceed $18,000,000), and (iv)
the
representations and warranties of the Company set forth in Sections 3.10(a)(ii)
and 3.10(b), shall be true and correct in all respects at and as of the date
of
this Agreement and at and as of the Closing Date as though made at and as
of the
Closing Date; provided,
however,
that,
with respect to clauses (i), (ii), (iii) and (iv) above, representations
and
warranties that are made as of a particular date or period shall be true
and
correct (in the manner set forth in clauses (i), (ii), (iii) or (iv), as
applicable) only as of such date or period.
(b) The
Company shall have in all material respects performed all obligations and
complied with all the agreements required by this Agreement to be performed
or
complied with by it prior to the Effective Time.
(c) The
Company shall have delivered to Parent a certificate, dated the Effective Time
and signed by its Chief Executive Officer or another senior officer, certifying
to the effect that the conditions set forth in Sections 6.3(a) and 6.3(b) have
been satisfied.
Section
6.4. Frustration
of Closing Conditions.
Neither
the Company nor Parent may rely, either as a basis for not consummating the
Merger or for terminating this Agreement and abandoning the Merger, on the
failure of any condition set forth in Section 6.1, Section 6.2 or Section 6.3,
as the case may be, to be satisfied if such failure was caused by such party’s
breach of any provision of this Agreement or failure to use its reasonable
best
efforts to consummate the Merger and the other transactions contemplated by
this
Agreement, as required by and subject to Section 5.6.
ARTICLE
VII
TERMINATION
Section
7.1. Termination
or Abandonment.
Notwithstanding anything contained in this Agreement to the contrary, this
Agreement may be terminated and abandoned at any time prior to the Effective
Time, whether before or after any approval of the matters presented in
connection with the Merger by the stockholders of the Company:
(a) by
the
mutual written consent of the Company and Parent;
(b) by
either
the Company or Parent if (i) the Effective Time shall not have occurred on
or
before April 30, 2007 (the “End
Date”)
and
(ii) the party seeking to terminate this Agreement pursuant to this Section
7.1(b) shall not have breached in any material respect its obligations under
this Agreement in any manner that shall have proximately caused the failure
to
consummate the Merger on or before such date;
(c) by
either
the Company or Parent if an injunction, order, decree or ruling shall have
been
entered permanently restraining, enjoining or otherwise prohibiting the
consummation of the Merger and such injunction shall have become final and
non-appealable, provided
that the
party seeking to terminate this Agreement pursuant to this Section 7.1(c) shall
have used its reasonable best efforts to remove such injunction, order, decree
or ruling as and to the extent required by this Agreement;
47
(d) by
either
the Company or Parent if the Company Meeting (including any adjournments
thereof) shall have concluded and the Company Stockholder Approval contemplated
by this Agreement shall not have been obtained; provided,
however,
that
the right to terminate this Agreement pursuant to this Section 7.1(d) shall
not
be available to any party whose breach of a representation or warranty or
failure to fulfill any obligation under this Agreement caused the failure to
obtain such stockholder approval;
(e) by
the
Company, if Parent shall have breached or failed to perform in any material
respect any of its representations, warranties or agreements contained in this
Agreement, which breach or failure to perform (i) would result in a failure
of a
condition set forth in Section 6.1 or 6.2 and (ii) cannot be cured by the End
Date, provided
that the
Company shall have given Parent written notice, delivered at least thirty (30)
days prior to such termination, stating the Company’s intention to terminate
this Agreement pursuant to this Section 7.1(e) and the basis for such
termination;
(f) by
Parent, if the Company shall have breached or failed to perform in any material
respect any of its representations, warranties or agreements contained in this
Agreement, which breach or failure to perform (i) would result in a failure
of a
condition set forth in Section 6.1 or 6.3 and (ii) cannot be cured by the End
Date, provided
that
Parent shall have given the Company written notice, delivered at least thirty
(30) days prior to such termination, stating Parent’s intention to terminate
this Agreement pursuant to this Section 7.1(f) and the basis for such
termination;
(g) by
the
Company, if the Special Committee or the Board of Directors has concluded in
good faith, after consultation with the Special Committee’s or the Company’s
legal counsel and financial advisors, that, in light of a Superior Proposal,
it
would be inconsistent with the directors’ exercise of their fiduciary
obligations to the Company’s stockholders under applicable Law to (x) make or
not withdraw the Recommendation or (y) fail to effect a Change of Recommendation
in a manner adverse to Parent; and
(h) by
the
Company, if Parent does not (i) satisfy the condition set forth in Section
6.2(d) within five (5) business days after notice by the Company to Parent
that
the conditions set forth in Sections 6.1 and 6.3 are satisfied (or, upon an
immediate Closing, would be satisfied as of such Closing) and (ii) proceed
immediately thereafter to give effect to a Closing; provided,
however,
that
the Company shall have no right to terminate this Agreement pursuant to this
Section 7.1(h)(i) based upon a notice which is delivered prior to the
final
day of the Marketing Period
or (ii)
if the Core Financial Information shall not have been furnished on or prior
to
April 2, 2007.
In
the
event of termination of this Agreement pursuant to this Section 7.1, this
Agreement shall terminate (except for the Confidentiality Agreement referred
to
in Section 5.2 and the provisions of Sections 7.2 and 8.2 through 8.14), and
there shall be no other liability on the part of the Company or Parent to the
other except, subject to Section 7.2(d), liability arising out of an intentional
breach of this Agreement or as provided for in the Confidentiality Agreement,
in
which case the aggrieved party shall be entitled to all rights and remedies
available at law or in equity.
48
Actions
taken by the Company pursuant to this Section 7.1 shall be taken by the Special
Committee if then in existence.
Section
7.2. Termination
Fees.
(a) Notwithstanding
any provision in this Agreement to the contrary if:
(i) (A)
this
Agreement is terminated by the Company pursuant to Section 7.1(b) and (B)
concurrently with or within nine (9) months after such termination, any
definitive agreement providing for a Qualifying Transaction shall have been
entered into that provides a value per Share not less than the Merger
Consideration,
(ii) (A)
prior
to the termination of this Agreement, any Alternative Proposal (substituting
50%
for the 25% threshold set forth in the definition of Alternative Proposal)
or
the bona fide intention of any Person to make an Alternative Proposal (a
“Qualifying
Transaction”)
is
publicly proposed or publicly disclosed or otherwise made known to the Company
prior to, and not withdrawn at the time of, the Company Meeting, (B) this
Agreement is terminated by Parent or the Company pursuant to Section 7.1(d)
and
(C) concurrently with or within nine (9) months after such termination, any
definitive agreement providing for a Qualifying Transaction shall have been
entered into and in any instance such Qualifying Transaction shall have been
consummated,
(iii) this
Agreement is terminated by the Company pursuant to Section 7.1(g) on or prior
to
the Solicitation Period End Date, or
(iv) this
Agreement is terminated by the Company pursuant to Section 7.1(g) after the
Solicitation Period End Date,
then
the
Company shall (a) in the case of clause (i), reimburse Parent for the documented
out-of-pocket fees and expenses reasonably incurred by it in connection with
this Agreement and the transactions contemplated by this Agreement in an
aggregate amount not to exceed $7.5 million in cash; (b) in the case of clause
(ii), pay to (or as directed by) Parent a fee of $45 million in cash;
(c)
in
the case of clause (iii), pay
to
(or as directed by) Parent a fee of $25 million in cash and reimburse Parent
for
the documented out-of-pocket fees and expenses reasonably incurred by it in
connection with this Agreement and the transactions contemplated by this
Agreement in an aggregate amount not to exceed $7.5 million in cash; or
(d)
in
the case of clause (iv), pay
to
(or as directed by) Parent a fee of $45 million in cash (each of such payments,
the “Company
Termination Fee”).
The
Company Termination Fee shall be paid: (a) in the case of clause (i), on the
date such definitive agreement is entered into; (b) in the case of clause (ii),
on the date such Qualifying Transaction is consummated; and (c) in the case
of
clauses (iii) and (iv), on the date this Agreement is terminated by the Company,
in each case by wire transfer of same day funds as directed by Parent reasonably
in advance. Upon payment of the Company Termination Fee, the Company shall
have
no further liability with respect to this Agreement or the transactions
contemplated by this Agreement to Parent or its stockholders. Notwithstanding
any provision in this Agreement to the contrary, in no event shall the Company
be required to pay the Company Termination Fee referred to in this Section
7.2
on more than one occasion.
49
(b) In
the
event that this Agreement is terminated by the Company pursuant to (i) Section
7.1(b) and the conditions set forth in Sections 6.1 and 6.3 would have been
satisfied had the Closing been scheduled on the End Date or (ii) Section 7.1(h),
then Parent or its affiliates shall pay $45 million (the “Parent
Termination Fee”)
to the
Company or as directed by the Company as promptly as reasonably practicable
(and, in any event, within two (2) business days following such termination),
payable by wire transfer of same day funds. Under no circumstances shall the
Parent Termination Fee be payable more than once pursuant to this Section
7.2(b).
(c) Any
payment made pursuant to this Section 7.2 shall be net of any amounts as may
be
required to be deducted or withheld therefrom under the Code or under any
provision of state, local or foreign Tax Law.
(d) Each
of
the Company, Parent and Merger Sub acknowledge that the agreements contained
in
this Section 7.2 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, neither the Company nor Parent
would have entered into this Agreement, and that any amounts payable pursuant
to
this Section 7.2 do not constitute a penalty. If the Company fails to pay as
directed in writing by Parent any amounts due to accounts designated by Parent
pursuant to this Section 7.2 within the time periods specified in this Section
7.2 or Parent fails to pay the Company any amounts due to the Company pursuant
to this Section 7.2 within the time periods specified in this Section 7.2,
the
Company or Parent, as applicable, shall pay the costs and expenses (including
reasonable legal fees and expenses) incurred by Parent or the Company, as
applicable, in connection with any action, including the filing of any lawsuit,
taken to collect payment of such amounts, together with interest on such unpaid
amounts at the prime lending rate prevailing during such period as published
in
The
Wall Street Journal,
calculated on a daily basis from the date such amounts were required to be
paid
until the date of actual payment. Notwithstanding anything to the contrary
in
this Agreement, the Company agrees that (other than in the case of fraud) (i)
the Company’s right to receive payment of the Parent Termination Fee from Parent
pursuant to the terms of this Section 7.2 (and the Guaranteed Amount from the
Guarantors pursuant to the Guarantees) shall be the sole and exclusive remedy
available to the Company, its affiliates and its Subsidiaries against Parent,
Merger Sub, the Guarantors and any of their respective former, current, or
future general or limited partners, stockholders, managers, members, directors,
officers, affiliates or agents in the event that it has incurred any losses
or
damages, or suffered any harm, with respect to this Agreement or the
transactions contemplated by this Agreement (including any loss suffered as
a
result of the failure of the Merger to be consummated), and upon payment of
the
Parent Termination Fee, none of Parent, Merger Sub, the Guarantors or any of
their respective former, current, or future general or limited partners,
stockholders, managers, members, directors, officers, affiliates or agents
shall
have any further liability or obligation relating to or arising out of this
Agreement or the transactions contemplated by this Agreement under any theory
for any reason (except for intentional breach of this Agreement, as set forth
in
subclause (ii)), (ii) in the case of any intentional breach of this Agreement
(and irrespective of whether the Parent Termination Fee has been paid), Parent
and Guarantors shall in no event collectively (whether or not this Agreement
shall have been terminated) be directly or indirectly liable for losses and
damages arising from or in connection with such intentional breach in an
aggregate amount in excess of $215,000,000 (the “Guaranteed
Amount”)
(for
the avoidance of doubt, if Parent (or the Guarantors) pay a Parent Termination
Fee, such fee shall be included in
50
the
calculation of such aggregate amount), (iii) the maximum liability of each
Guarantor, directly or indirectly, shall be limited to the express obligations
of such Guarantor under its Guarantee, and (iv) in no event (other than in
the
case of fraud) shall the Company, its affiliates or Subsidiaries seek or
be
entitled to recover any money damages in the aggregate in excess of the
Guaranteed Amount from Parent, Merger Sub, the Guarantor, or any of their
respective former, current, or future general or limited partners, stockholders,
managers, members, directors, officers, affiliates or agents.
ARTICLE
VIII
MISCELLANEOUS
Section
8.1. No
Survival of Representations and Warranties.
None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Merger or the termination
of this Agreement.
Section
8.2. Expenses.
Except
as set forth in Section 7.2, whether or not the Merger is consummated, all
costs
and expenses incurred in connection with the Merger, this Agreement and the
transactions contemplated by this Agreement shall be paid by the party incurring
or required to incur such expenses, except expenses incurred in connection
with
the printing, filing and mailing of the Proxy Statement (including applicable
SEC filing fees) and all fees paid in respect of any HSR Act or other regulatory
filing shall be borne by Parent.
Section
8.3. Counterparts;
Effectiveness.
This
Agreement may be executed in two or more consecutive counterparts (including
by
facsimile), each of which shall be an original, with the same effect as if
the
signatures thereto and hereto were upon the same instrument, and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered (by telecopy, e-mail or otherwise) to the other
parties.
Section
8.4. Governing
Law.
This
Agreement, and the rights of the parties and all Actions arising in whole or
in
part under or in connection herewith, shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to
any
choice or conflict of law provision or rule (whether of the State of Delaware
or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.
Section
8.5. Jurisdiction;
Enforcement.
The
parties 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. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches
of
this Agreement and to enforce specifically the terms and provisions of this
Agreement exclusively in the Delaware Court of Chancery, or in the event (but
only in the event) that such court does not have subject matter jurisdiction
over such action or proceeding, in the United States District Court for the
District of Delaware. In addition, each of the parties hereto irrevocably agrees
that any legal action or proceeding with respect to this Agreement and the
rights and obligations
51
arising
hereunder, or for recognition and enforcement of any judgment in respect
of this
Agreement and the rights and obligations arising hereunder brought by the
other
party hereto or its successors or assigns, shall be brought and determined
exclusively in the Delaware Court of Chancery, or in the event (but only
in the
event) that such court does not have subject matter jurisdiction over such
action or proceeding, in the United States District Court for the District
of
Delaware. Each of the parties hereto hereby irrevocably submits with regard
to
any such action or proceeding for itself and in respect of its property,
generally and unconditionally, to the personal jurisdiction of the aforesaid
courts and agrees that it will not bring any action relating to this Agreement
or any of the transactions contemplated by this Agreement in any court other
than the aforesaid courts. Each of the parties hereto hereby irrevocably
waives,
and agrees not to assert, by way of motion, as a defense, counterclaim or
otherwise, in any action or proceeding with respect to this Agreement, (a)
any
claim that it is not personally subject to the jurisdiction of the above-named
courts for any reason other than the failure to serve in accordance with
this
Section 8.5, (b) any claim that it or its property is exempt or immune from
jurisdiction of any such court or from any legal process commenced in such
courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or otherwise)
and (c) to the fullest extent permitted by the applicable Law, any claim
that
(i) the suit, action or proceeding in such court is brought in an inconvenient
forum, (ii) the venue of such suit, action or proceeding is improper or (iii)
this Agreement, or the subject matter of this Agreement, may not be enforced
in
or by such courts. Each of the Company, Parent and Merger Sub hereby consents
to
service being made through the notice procedures set forth in Section 8.7
and
agrees that service of any process, summons, notice or document by registered
mail (return receipt requested and first-class postage prepaid) to the
respective addresses set forth in Section 8.7 shall be effective service
of
process for any suit or proceeding in connection with this Agreement or the
transactions contemplated by this Agreement.
Section
8.6. WAIVER
OF JURY TRIAL.
EACH OF
THE PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
Section
8.7. Notices.
Any
notice required to be given hereunder shall be sufficient if in writing, and
sent by facsimile transmission, with confirmation (provided
that any
notice received by facsimile transmission or otherwise at the addressee’s
location not on a business day or on any business day after 5:00 p.m.
(addressee’s local time) shall be deemed to have been received at 9:00 a.m.
(addressee’s local time) on the next business day), by reliable overnight
delivery service (with proof of service), hand delivery or certified or
registered mail (return receipt requested and first-class postage prepaid),
addressed as follows:
To
Parent
or Merger Sub:
c/o
Bain
Capital Partners, LLC
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
52
with
copies to:
▇▇▇▇
Capital Partners
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇▇▇
Partners VI, L.P. and ▇▇▇▇▇▇▇▇▇ Partners VI, Offshore, L.P.
▇▇▇
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
J. ▇▇▇▇▇▇▇ ▇▇▇
and
Ropes
& ▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
To
the
Company:
▇▇▇▇
▇.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇,
▇▇
▇▇▇▇▇
Telecopy:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
Chairmen of the Special Committee
with
copies to:
▇▇▇▇
▇.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇,
▇▇
▇▇▇▇▇
Telecopy:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
and
Wachtell,
Lipton, ▇▇▇▇▇
& ▇▇▇▇
▇▇
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
53
and
▇▇▇▇▇
& ▇▇▇▇▇▇▇▇▇ LLP
3200
National City Center
▇▇▇▇
▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
or
to
such other address as any party shall specify by written notice so given, and
such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed. Any party to this Agreement
may notify any other party of any changes to the address or any of the other
details specified in this paragraph; provided,
however,
that
such notification shall only be effective on the date specified in such notice
or five (5) business days after the notice is given, whichever is later.
Rejection or other refusal to accept or the inability to deliver because of
changed address of which no notice was given shall be deemed to be receipt
of
the notice as of the date of such rejection, refusal or inability to
deliver.
Section
8.8. Assignment;
Binding Effect.
Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other parties; provided,
however,
that
Merger Sub may designate, by written notice to the Company, a Subsidiary that
is
wholly owned by Merger Sub to be merged with and into the Company in lieu of
Merger Sub, in which event this Agreement will be amended such that all
references in this Agreement to Merger Sub will be deemed references to such
Subsidiary, and in that case, and pursuant to such amendment, all
representations and warranties made in this Agreement with respect to Merger
Sub
will be deemed representations and warranties made with respect to such
Subsidiary as of the date of such designation and Parent and Merger Sub may,
without the prior written consent of the other parties, assign any or all of
their respective rights and interests hereunder to one or more of its
affiliates, designate one or more of its affiliates to perform its obligations
hereunder, in each case, so long as Parent is not relieved of any of its
obligations hereunder. Subject to the preceding sentence, this Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns.
Section
8.9. Severability.
Any
term or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement in any other jurisdiction;
provided
that, if
any provision of this Agreement is so broad as to be unenforceable, such
provision shall be interpreted to be only so broad as is enforceable and,
provided,
further
that
upon a determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith
to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the fullest extent possible
Section
8.10. Entire
Agreement; No Third-Party Beneficiaries.
This
Agreement (including the exhibits and schedules hereto), the Guarantees and
the
Confidentiality Agreement
54
constitute
the entire agreement, and supersede all other prior agreements and
understandings, both written and oral, between the parties or their affiliates,
or any of them, with respect to the subject matter of this Agreement and
thereof
and, except for the provisions of Sections 2.1 (after such time as the Exchange
Fund has been returned to the Company from the Paying Agent) and 5.9 (which
in
each case shall inure to the benefit of the persons benefiting therefrom
who are
intended to be third-party beneficiaries thereof), is not intended to and
shall
not confer upon any person other than the parties hereto any rights or remedies
hereunder. No representation, warranty, inducement, promise, understanding
or
condition not set forth in this Agreement has been made or relied upon by
any of
the parties hereto.
Section
8.11. Amendments;
Waivers.
At any
time prior to the Effective Time, any provision of this Agreement may be amended
or waived if, and only if, such amendment or waiver is in writing and signed,
in
the case of an amendment, by the Company (acting through the Special Committee,
if then in existence), Parent and Merger Sub, or in the case of a waiver, by
the
party against whom the waiver is to be effective; provided,
however,
that
after receipt of Company Stockholder Approval, if any such amendment or waiver
shall by applicable Law or in accordance with the rules and regulations of
the
New York Stock Exchange require further approval of the stockholders of the
Company, the effectiveness of such amendment or waiver shall be subject to
the
approval of the stockholders of the Company. Notwithstanding the foregoing,
no
failure or delay by the Company or Parent in exercising any right hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise of any other right
hereunder.
Section
8.12. Headings.
Headings of the Articles and Sections of this Agreement are for convenience
of
the parties only and shall be given no substantive or interpretive effect
whatsoever. The table of contents to this Agreement is for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
Section
8.13. Interpretation.
When a
reference is made in this Agreement to an Article or Section, such reference
shall be to an Article or Section of this Agreement unless otherwise indicated.
Whenever the words “include,” “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without
limitation.” The words “hereof,” “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and
not to any particular provision of this Agreement. All terms defined in this
Agreement shall have the defined meanings when used in any certificate or other
document made or delivered pursuant thereto unless otherwise defined therein.
The definitions contained in this Agreement are applicable to the singular
as
well as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. Each of the parties has participated
in the drafting and negotiation of this Agreement. If an ambiguity or question
of intent or interpretation arises, this Agreement must be construed as if
it is
drafted by all the parties, and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of authorship of any of the
provisions of this Agreement.
Section
8.14. Definitions.
(a) References
in this Agreement to “Subsidiaries”
of
any
party shall mean any corporation, partnership, association, trust or other
form
of legal entity of which (i) more
55
than
50%
of the outstanding voting securities are on the date of this Agreement directly
or indirectly owned by such party, or (ii) such party or any Subsidiary of
such
party is a general partner (excluding partnerships in which such party or
any
Subsidiary of such party does not have a majority of the voting interests
in
such partnership). References in this Agreement (except as specifically
otherwise defined) to “affiliates”
shall
mean, as to any person, any other person which, directly or indirectly,
controls, or is controlled by, or is under common control with, such person.
As
used in this definition, “control”
(including, with its correlative meanings, “controlled by” and “under common
control with”) shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of management or policies of a person, whether
through the ownership of securities or partnership or other ownership interests,
by contract or otherwise. References in this Agreement (except as specifically
otherwise defined) to “person”
shall
mean an individual, a corporation, a partnership, a limited liability company,
an association, a trust or any other entity, group (as such term is used
in
Section 13 of the Exchange Act) or organization, including, a Governmental
Entity, and any permitted successors and assigns of such person. As used
in this
Agreement, “knowledge”
means
(i) with respect to Parent, the actual knowledge after reasonable investigation
of the executive officers of Parent and (ii) with respect to the Company,
the
actual knowledge after reasonable investigation of the Chairman, the Chief
Executive Officer, the Chief Financial Officer, General Counsel and the Chief
Operating Officer of the Company. As used in this Agreement, “business
day”
shall
mean any day other than a Saturday, Sunday or a day on which the banks in
New
York or Florida are authorized by law or executive order to be closed. As
used
in this Agreement, “GAAP”
means
United States generally accepted accounting principles. As used in this
Agreement, “Indebtedness”
means,
with respect to any person, all obligations (including all obligations in
respect of principal, accrued interest, penalties, fees and premiums) of
such
person (i) for borrowed money (including overdraft facilities), (ii) evidenced
by notes, bonds, debentures or similar instruments, (iii) for the deferred
purchase price of property, goods or services (other than trade payables
or
accruals incurred in the ordinary course of business), (iv) under capital
leases
(in accordance with generally accepted accounting principles), (v) in respect
of
letters of credit and bankers’ acceptances, (vi) for Contracts relating to
interest rate protection, swap agreements and collar agreements and (vii)
in the
nature of guarantees of the obligations described in clauses (i) through
(vi)
above of any other person. References in this Agreement to specific laws
or to
specific provisions of laws shall include all rules and regulations promulgated
thereunder. Any statute defined or referred to herein or in any agreement
or
instrument referred to herein shall mean such statute as from time to time
amended, modified or supplemented, including by succession of comparable
successor statutes.
(b) Each
of
the following terms is defined on the pages set forth opposite such
term:
Action………………………………………………………………………………………42
Advisors………………………………………………………………………………………20
Affiliate
Transactions………………………………………………………………………22
affiliates………………………………………………………………………………………55
Agreement………………………………………………………………………………………1
Alternative
Financing…………………………………………………………………………43
Alternative
Proposal…………………………………………………………………………34
Board
of
Directors……………………………………………………………………………1
56
Book-Entry
Shares……………………………………………………………………………5
business
day…………………………………………………………………………………55
Cancelled
Shares………………………………………………………………………………3
Certificate
of Merger…………………………………………………………………………2
Certificates……………………………………………………………………………………5
Change
of
Recommendation………………………………………………………………34
Closing…………………………………………………………………………………………1
Closing
Date…………………………………………………………………………………1
Code…………………………………………………………………………………………6
Company………………………………………………………………………………………1
Company
Approvals…………………………………………………………………………11
Company
Benefit Plans………………………………………………………………………15
Company
Common Stock……………………………………………………………………3
Company
Disclosure Schedule……………………………………………………………8
Company
Employees…………………………………………………………………………38
Company
Joint Venture………………………………………………………………………8
Company
Material Adverse Effect……………………………………………………………8
Company
Material Contracts…………………………………………………………………21
Company
Meeting……………………………………………………………………………36
Company
Permits………………………………………………………………………………14
Company
Preferred Stock………………………………………………………………………9
Company
SEC Documents……………………………………………………………………12
Company
Stock Option………………………………………………………………………36
Company
Stock Plans…………………………………………………………………………9
Company
Stock-Based Award…………………………………………………………………37
Company
Stockholder Approval………………………………………………………………21
Company
Termination Fee………………………………………………………………………49
Confidentiality
Agreement……………………………………………………………………32
Contracts………………………………………………………………………………………11
control…………………………………………………………………………………………55
Core
Financial Information……………………………………………………………………44
Debt
Commitment Letter………………………………………………………………………24
Debt
Financing…………………………………………………………………………………24
Deferred
Unit Amount…………………………………………………………………………37
DGCL……………………………………………………………………………………………1
Directors’
Award Account……………………………………………………………………37
Dissenting
Shares………………………………………………………………………………4
Effective
Time……………………………………………………………………………………2
Employee
Rollover Agreements…………………………………………………………………3
End
Date…………………………………………………………………………………………47
Environmental
Law………………………………………………………………………………15
ERISA……………………………………………………………………………………………15
ERISA
Affiliate…………………………………………………………………………………16
excess
parachute payment……………………………………………………………………15
Exchange
Act………………………………………………………………………………………11
Exchange
Fund………………………………………………………………………………………5
57
Excluded
Party………………………………………………………………………………………33
Financing……………………………………………………………………………………………24
Financing
Commitments……………………………………………………………………………24
Founder
Rollover Agreements……………………………………………………………………3
GAAP…………………………………………………………………………………………………55
Governmental
Entity………………………………………………………………………………11
Guarantee…………………………………………………………………………………………25
Guaranteed
Amount………………………………………………………………………………50
Guarantors………………………………………………………………………………………25
Hazardous
Substance……………………………………………………………………………15
HSR
Act………………………………………………………………………………………11
Indebtedness………………………………………………………………………………………55
Indemnified
Party…………………………………………………………………………………42
Intellectual
Property…………………………………………………………………………………19
Initiation
Date………………………………………………………………………………………44
knowledge………………………………………………………………………………………55
Law………………………………………………………………………………………………13
Laws………………………………………………………………………………………………13
Leased
Real Properties…………………………………………………………………………20
Lien………………………………………………………………………………………………11
Marketing
Period…………………………………………………………………………………43
Material
Lease……………………………………………………………………………………12
Matters……………………………………………………………………………………………16
Measurement
Date………………………………………………………………………………10
Merger………………………………………………………………………………………………1
Merger
Consideration……………………………………………………………………………3
Merger
Sub………………………………………………………………………………………1
New
Financing Commitments…………………………………………………………………25
New
Plans………………………………………………………………………………………38
Old
Plans………………………………………………………………………………………38
Option
and Stock-Based Award Consideration………………………………………………5
Option
Consideration………………………………………………………………………………37
Owned
Real Properties………………………………………………………………………………20
Parent………………………………………………………………………………………………1
Parent
Approvals…………………………………………………………………………………23
Parent
Common Stock………………………………………………………………………………3
Parent
Disclosure Schedule………………………………………………………………………22
Parent
Material Adverse Effect………………………………………………………………………23
Parent
Termination Fee……………………………………………………………………………49
Participating
Holder………………………………………………………………………………3
Paying
Agent………………………………………………………………………………………5
PEP…………………………………………………………………………………………………37
Permitted
Lien………………………………………………………………………………………11
person…………………………………………………………………………………………………55
Property
Encumbrances………………………………………………………………………………20
Proxy
Statement………………………………………………………………………………………17
58
Qualifying
Transaction………………………………………………………………………………48
Real
Properties………………………………………………………………………………………20
Recommendation………………………………………………………………………………………11
Regulatory
Law………………………………………………………………………………………41
Representatives………………………………………………………………………………………32
Required
Financial Information………………………………………………………………………44
Restricted
Shares………………………………………………………………………………………37
Rollover
Share………………………………………………………………………………………3
▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act……………………………………………………………………………………13
Satisfaction
Date………………………………………………………………………………………2
Schedule
13E-3………………………………………………………………………………………17
SEC……………………………………………………………………………………………………12
Share……………………………………………………………………………………………………3
Solicitation
Period End Date…………………………………………………………………………32
Special
Committee………………………………………………………………………………………1
Specified
Concept………………………………………………………………………………………34
Subsidiaries……………………………………………………………………………………………58
Superior
Proposal………………………………………………………………………………………35
Surviving
Corporation………………………………………………………………………………………1
Tax
Return………………………………………………………………………………………………18
Taxes…………………………………………………………………………………………………18
Termination
Date………………………………………………………………………………………27
UFOCs…………………………………………………………………………………………………14
59
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the date first above written.
Kangaroo
Holdings, Inc.
By:
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Title: Vice
President
Kangaroo
Acquisition, Inc.
By:
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Title: Vice
President
By:
/s/
▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇
▇.
▇▇▇▇
Title: Director