EXHIBIT (c)(1)
AGREEMENT AND PLAN OF MERGER
DATED AS OF FEBRUARY 13, 1998
AMONG
BERTUCCI'S, INC.,
TEN IDEAS, INC.,
AND
TEN IDEAS ACQUISITION CORP.
ARTICLE I
THE MERGER......................................................................... 1
SECTION 1.1. THE MERGER........................................................ 1
SECTION 1.2. CLOSING........................................................... 2
SECTION 1.3. EFFECTIVE TIME.................................................... 2
SECTION 1.4. EFFECTS OF THE MERGER............................................. 2
SECTION 1.5. CERTIFICATE OF INCORPORATION; BY-LAWS............................. 2
SECTION 1.6. DIRECTORS......................................................... 3
SECTION 1.7. OFFICERS.......................................................... 3
SECTION 1.8. TRANSFER OF SHARES TO PARENT...................................... 3
ARTICLE II............................................................................. 3
EFFECT OF THE MERGER ON THE SECURITIES OF THE CONSTITUENT CORPORATIONS............. 3
SECTION 2.1. EFFECT ON CAPITAL STOCK........................................... 3
SECTION 2.2. STOCK OPTIONS..................................................... 4
SECTION 2.3. EXCHANGE OF CERTIFICATES.......................................... 6
ARTICLE III............................................................................ 8
REPRESENTATIONS AND WARRANTIES..................................................... 8
SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................... 8
SECTION 3.2. REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB.................. 14
ARTICLE IV............................................................................. 17
COVENANTS RELATING TO CONDUCT OF BUSINESS.......................................... 17
SECTION 4.1. CONDUCT OF BUSINESS OF THE COMPANY................................ 17
SECTION 4.2. OTHER ACTIONS..................................................... 19
ARTICLE V.............................................................................. 19
ADDITIONAL AGREEMENTS.............................................................. 19
SECTION 5.1. MEETING OF STOCKHOLDERS........................................... 19
SECTION 5.2. PROXY STATEMENT; SCHEDULE 13E-3................................... 19
SECTION 5.3. ACCESS TO INFORMATION; CONFIDENTIALITY............................ 21
SECTION 5.4. COMMERCIALLY REASONABLE EFFORTS................................... 21
SECTION 5.5. FINANCING......................................................... 21
SECTION 5.6. INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE............... 22
SECTION 5.7. PUBLIC ANNOUNCEMENTS.............................................. 23
SECTION 5.8. ACQUISITION PROPOSALS............................................. 24
SECTION 5.9. STOCKHOLDER LITIGATION............................................ 25
SECTION 5.10. BOARD ACTION RELATING TO STOCK OPTION PLANS...................... 25
SECTION 5.11. CONSENTS AND APPROVALS........................................... 25
SECTION 5.12. FINANCIAL STATEMENTS............................................. 26
SECTION 5.13. REPAYMENT OF INDEBTEDNESS........................................ 26
ARTICLE VI............................................................................. 26
CONDITIONS PRECEDENT............................................................... 26
SECTION 6.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER........ 26
SECTION 6.2. CONDITIONS TO OBLIGATIONS OF PARENT AND SUB....................... 27
SECTION 6.3. CONDITIONS TO OBLIGATIONS OF THE COMPANY.......................... 28
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ARTICLE VII............................................................................ 29
TERMINATION, AMENDMENT AND WAIVER.................................................. 29
SECTION 7.1. TERMINATION....................................................... 29
SECTION 7.2. EFFECT OF TERMINATION............................................. 30
SECTION 7.3. AMENDMENT......................................................... 33
SECTION 7.4. EXTENSION; WAIVER................................................. 33
SECTION 7.5. PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR WAIVER......... 33
ARTICLE VIII........................................................................... 33
GENERAL PROVISIONS................................................................. 33
SECTION 8.1. NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES..................... 33
SECTION 8.2. FEES AND EXPENSES................................................. 34
SECTION 8.3. DEFINITIONS....................................................... 34
SECTION 8.4. NOTICES........................................................... 34
SECTION 8.5. INTERPRETATION.................................................... 35
SECTION 8.6. COUNTERPARTS...................................................... 35
SECTION 8.7. ENTIRE AGREEMENT; THIRD-PARTY BENEFICIARIES....................... 35
SECTION 8.8. GOVERNING LAW..................................................... 35
SECTION 8.9. ASSIGNMENT........................................................ 35
SECTION 8.10. ENFORCEMENT...................................................... 36
SECTION 8.11. SEVERABILITY..................................................... 36
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AGREEMENT AND PLAN OF MERGER
DATED AS OF FEBRUARY 13, 1998
AMONG
BERTUCCI'S, INC.,
A MASSACHUSETTS CORPORATION (THE "COMPANY"),
TEN IDEAS, INC.,
A DELAWARE CORPORATION ("PARENT"),
AND
TEN IDEAS ACQUISITION CORP.,
A MASSACHUSETTS CORPORATION AND A WHOLLY OWNED SUBSIDIARY OF
PARENT ("SUB")
WITNESSETH:
WHEREAS, the Board of Directors of each of the Company, Parent and Sub has
adopted resolutions approving Parent's acquisition of the Company upon the terms
set forth in this Agreement and Plan of Merger (the "Agreement");
WHEREAS, pursuant to this Agreement, Sub shall be merged with and into the
Company and the Company shall thereby become a wholly-owned direct subsidiary of
Parent (the "Merger");
WHEREAS, the Company, Parent and Sub desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also to
prescribe various conditions to the Merger;
WHEREAS, in accordance with applicable law, the Company's Restated Articles
of Organization and the terms of this Agreement, the affirmative vote of the
holders of at least two-thirds of the outstanding common stock of the Company is
required to consummate the Merger;
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
ARTICLE I
THE MERGER
SECTION 1.1. THE MERGER. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Massachusetts Business
Corporation Law (the "MBCL"), Sub shall be merged with and into the Company at
the Effective Time (as hereinafter defined). Upon the Effective Time, the
separate existence of Sub shall cease, and the Company shall continue as the
surviving corporation (the "Surviving Corporation").
SECTION 1.2. CLOSING. Unless this Agreement shall have been terminated and
the transactions herein contemplated shall have been abandoned pursuant to
Section 7.1, and subject to the satisfaction or waiver of the conditions set
forth in Article VI, the closing of the Merger (the "Closing") will take place
at 10:00 a.m. Boston time not later than the second business day following the
date on which the last to be fulfilled or waived of the conditions set forth in
Article VI shall be fulfilled or waived in accordance with this Agreement (the
"Closing Date"), at the offices of Posternak, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, L.L.P., ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, unless another date, time or place
is agreed to in writing by the parties hereto.
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SECTION 1.3. EFFECTIVE TIME. The parties hereto will file with the Secretary
of State of the Commonwealth of Massachusetts (the "Massachusetts Secretary of
State") on the date of the Closing (or on such other date as Parent and the
Company may agree) articles of merger or other appropriate documents, executed
in accordance with the relevant provisions of the MBCL, and make all other
filings or recordings required under the MBCL in connection with the Merger. The
Merger shall become effective upon the filing of the articles of merger with the
Massachusetts Secretary of State, or at such later time as is specified in the
articles of merger (the "Effective Time").
SECTION 1.4. EFFECTS OF THE MERGER. The Merger shall have the effects set
forth in Section 80 of the MBCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the properties,
rights, privileges, powers and franchises of the Company and Sub shall vest in
the Surviving Corporation, and all debts, liabilities and duties of the Company
and Sub shall become the debts, liabilities and duties of the Surviving
Corporation.
SECTION 1.5. ARTICLES OF ORGANIZATION; BY-LAWS.
(a) The Company's Restated Articles of Organization, as in effect at the
Effective Time, shall be, from and after the Effective Time, the Articles of
Organization of the Surviving Corporation until thereafter changed or amended as
provided therein or by applicable law.
(b) The Company's Restated By-laws, as in effect at the Effective Time,
shall be, from and after the Effective Time, the By-laws of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law.
SECTION 1.6. DIRECTORS. The directors of Sub at the Effective Time shall
become, from and after the Effective Time, the directors of the Surviving
Corporation, until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be.
SECTION 1.7. OFFICERS. The officers of Sub at the Effective Time shall
become, from and after the Effective Time, the officers of the Surviving
Corporation, until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be.
SECTION 1.8. TRANSFER OF SHARES TO PARENT. At or prior to the Effective
Time, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and the trusts established for the benefit of ▇▇.
▇▇▇▇▇▇▇▇'▇ children (collectively, the "▇▇▇▇▇▇▇▇ Group") shall transfer to
Parent all of the shares of capital stock of the Company held by them. Any
transferees of shares of capital stock held by the ▇▇▇▇▇▇▇▇ Group on the date of
this Agreement shall agree to be bound by the provisions of this Section 1.8.
ARTICLE II
EFFECT OF THE MERGER ON THE SECURITIES OF THE
CONSTITUENT CORPORATIONS
SECTION 2.1. EFFECT ON CAPITAL STOCK. As of the Effective Time, by virtue of
the Merger and without any action on the part of any holder:
(a) COMMON STOCK OF SUB. Each share of the capital stock of 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 $.005 per share, of the Surviving Corporation.
(b) CANCELLATION OF TREASURY STOCK AND PARENT-OWNED STOCK. Each share of the
capital stock of the Company issued or outstanding immediately prior to the
Effective Time that is owned by the Company or
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by Parent or Sub shall be canceled automatically and shall cease to exist, and
no cash or other consideration shall be delivered or deliverable in exchange
therefor.
(c) CONVERSION OF COMPANY SHARES. At the Effective Time, each share of the
Common Stock, par value $.005 per share, of the Company (the "Common Stock")
that is then issued and outstanding (all such shares of Common Stock being
hereinafter referred to collectively as the "Company Shares"), other than (i)
shares to be canceled pursuant to subsection 2.1(b) above and (ii) shares held
by Dissenting Shareholders (as hereinafter defined) (which shares, in the case
of clauses (i) and (ii) above, will not constitute "Company Shares" hereunder),
shall be converted into and become the right to receive, upon surrender of the
certificate representing such Company Share in accordance with Section 2.3, a
payment of $8.00 in cash, without interest thereon (the "Merger Consideration").
(d) DISSENTING SHARES. Notwithstanding anything in this Agreement to the
contrary, shares of Common Stock issued and outstanding immediately prior to the
Effective Time and held by a holder (a "Dissenting Shareholder"), if any, who
has the right to demand, and who properly demands, an appraisal of such shares
in accordance with Section 85 of the MBCL or any successor provision
("Dissenting Shares") shall not be converted into a right to receive the Merger
Consideration unless such Dissenting Shareholder fails to perfect or otherwise
loses or withdraws such Dissenting Shareholder's right to such appraisal, if
any. Provided the holder of any Dissenting Shares complies with the provisions
of the MBCL, such holder shall have with respect thereto solely the rights
provided under Sections 86 through 98, inclusive, of the MBCL. If, after the
Effective Time, such Dissenting Shareholder fails to perfect or otherwise loses
or withdraws any such right to appraisal, each such share of such Dissenting
Shareholder shall be treated as a share that had been converted as of the
Effective Time into the right to receive the Merger Consideration in accordance
with this Section 2.1. The Company shall give prompt notice to Parent of any
demands received by the Company for appraisal of any Dissenting Shares, and
Parent shall have the right to participate in and direct all negotiations and
proceedings with respect to such demands. The Company shall not, except with the
prior written consent of Parent, which consent shall not be unreasonably
withheld, make any payment with respect to, or settle or offer to settle, any
such demands.
(e) CANCELLATION AND RETIREMENT OF COMMON STOCK. As of the Effective Time,
all certificates representing shares of Common Stock, other than certificates
representing shares to be canceled in accordance with Section 2.1(b) or
Dissenting Shares, issued and outstanding immediately prior to the Effective
Time, shall no longer be outstanding and shall automatically be canceled and
shall cease to exist, and each holder of a certificate representing any such
shares of Common Stock shall cease to have any rights with respect thereto,
except the right to receive the Merger Consideration upon surrender of such
certificate in accordance with Section 2.3.
SECTION 2.2. STOCK OPTIONS.
(a) As of the Effective Time, each outstanding, unexercised stock option to
purchase shares of Common Stock (a "Company Stock Option") issued under the
Company's Amended and Restated 1987 Stock Option Plan (the "1987 Plan"), the
1989 Time Accelerated Restricted Stock Option Plan (the "TARSOP"), the 1993
Stock Option Plan for Non-Employee Directors (the "Director Plan") and the 1997
Stock Option Plan (the "1997 Plan") (collectively, the "Company Stock Option
Plans") shall terminate and be canceled and each holder of a Company Stock
Option shall be entitled to receive, in consideration therefor, a cash payment
from the Company (which payment shall be made as soon as practicable after the
Effective Time) equal to the product of (a) the excess, if any, of (x) the
Merger Consideration over (y) the per share exercise price of such Company Stock
Option, times (b) the number of Eligible Shares (as defined below) subject to
such Company Stock Option. Such cash payment shall be net of any required
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withholding taxes. The term "Eligible Shares" shall mean, (i) with respect to
any Company Stock Option granted under the 1987 Plan, the number of shares
subject to such option as to which such option shall then be vested and
exercisable as of the Effective Date, and (ii) with respect to any Company Stock
Option granted under the TARSOP, the Director Plan or the 1997 Plan, the
aggregate number of shares that shall then be subject to such option. The
Company's obligation to make any such cash payment (1) shall be subject to the
obtaining of any necessary consents of optionees to the cancellation of such
Company Stock Options, in form and substance satisfactory to Parent, and (2)
shall not require any action which violates any of the Company Stock Option
Plans. As of the Effective Time, each of the Company Stock Option Plans and the
Company's 1992 Employee Stock Purchase Plan (the "ESPP") shall terminate and be
of no further force or effect, and the Company shall take such action as shall
be necessary to ensure, to Parent's reasonable satisfaction, that no holder of a
Company Stock Option or participant in the ESPP will have any right to acquire
any interest in the Surviving Corporation under the Company Stock Option Plans
or the ESPP.
(b) Notwithstanding the provisions of Section 2.2(a), at Parent's option, in
lieu of canceling the unvested portion of any Company Stock Option granted under
the 1987 Plan, Parent may offer to assume such unvested portion or to grant as
of the Effective Time a substitute or replacement option to purchase shares of
the capital stock of Parent.
(c) The Company's obligation to make the cash payments specified in Section
2.2(a) with respect to any Company Stock Option shall be reduced to the extent
that Parent and the holder of such Company Stock Option shall have mutually
agreed, at or prior to the Effective Time, to the assumption of such Company
Stock Option by Parent or the grant by Parent of a substitute or replacement
stock option, shares of capital stock, stock purchase right or other equity
interest issued by Parent.
SECTION 2.3. EXCHANGE OF CERTIFICATES.
(a) PAYING AGENT. As of the Effective Time, Sub (or the Company, as the
Surviving Corporation) shall deposit, or shall cause to be deposited, with or
for the account of a bank, trust company or other agent designated by Sub, which
shall be reasonably satisfactory to the Company (the "Paying Agent"), for the
benefit of the holders of shares of Common Stock, cash in an aggregate amount
equal to the product of (x) the number of Company Shares, times (y) the Merger
Consideration (such amount being hereinafter referred to as the "Payment Fund").
The Paying Agent shall invest the Payment Fund as directed by the Surviving
Corporation.
(b) EXCHANGE PROCEDURES. As soon as practicable after the Effective Time,
each holder of an outstanding certificate or certificates which prior thereto
represented Company Shares shall, upon surrender to the Paying Agent of such
certificate or certificates and acceptance thereof by the Paying Agent, be
entitled to the amount of cash which the aggregate number of Company Shares
previously represented by such certificate or certificates surrendered shall
have been converted into the right to receive pursuant to subsection 2.1(c). The
Paying Agent shall accept such certificates upon compliance with such reasonable
terms and conditions as the Paying Agent may impose to effect an orderly
exchange thereof in accordance with normal exchange practices. If the
consideration to be paid in the Merger (or any portion thereof) is to be
delivered to any person other than the person in whose name the certificate
representing Company Shares surrendered in exchange therefor is registered, it
shall be a condition to such exchange that the certificate so surrendered shall
be properly endorsed with the signature guaranteed or otherwise be in proper
form for transfer and that the person requesting such exchange shall pay to the
Paying Agent any transfer or other tax required by reason of the payment of such
consideration to a person other than the registered holder of the certificate
surrendered, or shall establish to the satisfaction of the Paying Agent
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that such tax has been paid or is not applicable. After the Effective Time,
there shall be no further transfer on the records of the Company or its transfer
agent of certificates representing Common Stock, and if such certificates are
presented to the Company for transfer, they shall be canceled against delivery
of the Merger Consideration as hereinabove provided. Until surrendered as
contemplated by this subsection 2.3(b), each certificate representing Company
Shares shall be deemed at any time after the Effective Time to represent only
the right to receive upon such surrender the Merger Consideration, without any
interest thereon, as contemplated by Section 2.1. No interest will be paid or
will accrue on any cash payable as Merger Consideration to any holder of Company
Shares.
(c) LETTER OF TRANSMITTAL. Promptly after the Effective Time (but in no
event more than five business days thereafter), the Surviving Corporation shall
require the Paying Agent to mail to each record holder of certificates that
immediately prior to the Effective Time represented Company Shares which have
been converted pursuant to Section 2.1, a form of letter of transmittal and
instructions for use in surrendering such certificates and receiving the
consideration to which such holder shall be entitled therefor pursuant to
Section 2.1.
(d) NO FURTHER OWNERSHIP RIGHTS IN COMMON STOCK. The Merger Consideration
paid upon the surrender for exchange of certificates representing Company Shares
in accordance with the terms of this Article II shall be deemed to have been
issued and paid in full satisfaction of all rights pertaining to the Company
Shares theretofore represented by such certificates, and no holder of Company
Shares shall thereby have any equity interest in the Surviving Corporation.
(e) TERMINATION OF PAYMENT FUND. Any portion of the Payment Fund which
remains undistributed to the holders of the certificates representing Company
Shares for one year after the Effective Time shall be delivered to the Surviving
Corporation, upon demand, and any holders of Company Shares who have not
theretofore complied with this Article II shall thereafter look only to the
Surviving Corporation and only as general creditors thereof for payment of their
claim for the Merger Consideration.
(f) NO LIABILITY. None of Parent, Sub, the Surviving Corporation or the
Paying Agent shall be liable to any person in respect of any cash, shares,
dividends or distributions payable from the Payment Fund delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
If any certificates representing Company Shares shall not have been surrendered
prior to five years after the Effective Time (or immediately prior to such
earlier date on which the Merger Consideration in respect of such certificate
would otherwise escheat to or become the property of any Governmental Entity (as
defined in Section 3.1(c)), any such cash, shares, dividends or distributions
payable in respect of such certificate shall, to the extent permitted by
applicable law, become the property of the Surviving Corporation, free and clear
of all claims or interest of any person previously entitled thereto.
(g) WITHHOLDING RIGHTS. The Surviving Corporation, Parent or Sub shall be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of Company Shares such amounts as the
Surviving Corporation, Parent or Sub is required to deduct and withhold with
respect to the making of such payment under the Code, or any provision of state,
local or foreign tax law, including, without limitation, withholdings required
in connection with payments with respect to Company Stock Options. To the extent
that amounts are so withheld by the Surviving Corporation, Parent or Sub, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder in respect of which such deduction and withholding was
made.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to Parent and Sub as follows:
(a) ORGANIZATION, STANDING AND CORPORATE POWER. The Company is a corporation
duly organized, validly existing and in corporate good standing under the laws
of the Commonwealth of Massachusetts and has the requisite corporate power and
authority and any necessary governmental authority to carry on its business as
now being conducted and to own, operate and lease its properties. The Company is
duly qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed
(individually or in the aggregate) would not have a material adverse effect upon
(i) the business, assets, properties, condition (financial or otherwise) or
results of operations of the Company and the Subsidiaries (as defined in
subsection 3.1(b) hereof) taken as a whole, or (ii) the transactions
contemplated hereby or the legality or validity of this Agreement (a "Material
Adverse Effect"). The Company has delivered to Parent complete and correct
copies of its Restated Articles of Organization and Restated By-laws, as amended
to the date of this Agreement.
(b) SUBSIDIARIES. Section 3.1(b) of the disclosure schedule attached hereto
(the "Disclosure Schedule") sets forth the name, jurisdiction of incorporation,
capitalization and number of shares of outstanding capital stock of each
corporation of which the Company owns, directly or indirectly, a majority of the
outstanding capital stock (individually, a "Subsidiary" and, collectively, the
"Subsidiaries"). All the issued and outstanding shares of capital stock of each
Subsidiary are validly issued, fully paid and nonassessable and are owned,
directly or indirectly, by the Company, beneficially and of record, free and
clear of all liens, pledges, encumbrances or restrictions of any kind. No
Subsidiary has outstanding any securities convertible into or exchangeable or
exercisable for any shares of its capital stock, there are no outstanding
options, warrants or other rights to purchase or acquire any capital stock of
any Subsidiary, there are no irrevocable proxies with respect to such shares,
and there are no contracts, commitments, understandings, arrangements or
restrictions by which any Subsidiary or the Company is bound to issue additional
shares of the capital stock of a Subsidiary. Except for the Subsidiaries, and as
otherwise disclosed in Section 3.1(b) of the Disclosure Schedule, the Company
does not own, directly or indirectly, any capital stock or other equity
securities of any corporation or have any direct or indirect equity interest in
any business. Each Subsidiary (a) is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation; (b) has all requisite corporate power and authority and any
necessary governmental authority to carry on its business as it is now being
conducted and to own, operate and lease its properties, except where the failure
to have such governmental authority would not have a Material Adverse Effect;
and (c) is qualified or licensed to do business as a foreign corporation and is
in good standing in each of the jurisdictions in which (i) the ownership or
leasing of real property or the conduct of its business requires such
qualification or licensing and (ii) the failure to be so qualified or licensed,
either singly or in the aggregate, would have a Material Adverse Effect. The
Company has delivered to Parent complete and correct copies of the Articles of
Organization or other charter documents and By-laws of each Subsidiary, each as
amended to date.
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(c) CAPITALIZATION. As of the date hereof, the authorized capital stock of
the Company consists of 200,000 shares of Preferred Stock, $.01 par value per
share ("Preferred Stock"), and 15,000,000 shares of Common Stock. As of the date
hereof, there are no shares of Preferred Stock issued or outstanding. As of the
date hereof, 8,905,121 shares of Common Stock are issued and outstanding,
566,550 shares of Common Stock are reserved for issuance pursuant to outstanding
Company Stock Options, and no shares of Common Stock are held by the Company in
its treasury. Except as set forth above, no shares of capital stock or other
equity securities of the Company are issued, reserved for issuance or
outstanding. All outstanding shares of capital stock of the Company are, and all
shares which may be issued pursuant to the Company Stock Option Plans will be,
when issued, duly authorized, validly issued, fully paid and nonassessable and
not subject to preemptive rights. Section 3.1(c) of the Disclosure Schedule
accurately sets forth the number of Company Shares issuable upon exercise of
each outstanding Company Stock Option, the vesting schedule thereof, and the
applicable exercise price with respect to each such Company Stock Option. Except
as set forth in Section 3.1(c) of the Disclosure Schedule, the Company has no
outstanding option, warrant, subscription or other right, agreement or
commitment which either (i) obligates the Company to issue, sell or transfer,
repurchase, redeem or otherwise acquire or vote any shares of the capital stock
of the Company or (ii) restricts the transfer of Common Stock. Except as set
forth in Section 3.1(c) of the Disclosure Schedule, the Company has no
outstanding stock appreciation rights, phantom stock or stock equivalents.
(d) AUTHORITY; ENFORCEABILITY; NONCONTRAVENTION. The Company has the
requisite corporate power and authority to enter into this Agreement and,
subject to the approval of its stockholders as set forth in Section 6.1(a) with
respect to the consummation of the Merger, to consummate the Merger and the
other transactions contemplated by this Agreement. The execution and delivery of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, subject to the approval of its
stockholders as set forth in Section 6.1(a). This Agreement has been duly
executed and delivered by the Company and constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except that the enforceability hereof may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and that the remedy 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. The execution and delivery of this Agreement
do not, and the consummation of the transactions contemplated by this Agreement
and compliance with the provisions hereof will not, (i) violate any of the
provisions of the Restated Articles of Organization or Restated By-laws of the
Company, or (ii) subject to the governmental filings and other matters referred
to in the following sentence, contravene any law, rule or regulation of any
state or of the United States or any political subdivision thereof or therein,
including any licensing board or agency, or any order, writ, judgment,
injunction, decree, determination or award currently in effect, which, in the
case of clause (ii) above, singly or in the aggregate, would have a Material
Adverse Effect or prevent consummation of the transactions contemplated hereby.
No consent, approval or authorization of, or declaration or filing with, or
notice to, any governmental agency, board or regulatory authority (a
"Governmental Entity"), which has not been received or made, is required by or
with respect to the Company or any Subsidiary in connection with the execution
and delivery of this Agreement by the Company or the consummation by the Company
of the transactions contemplated hereby, except for (i) the requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), (ii) the
filing of articles of merger with the Massachusetts Secretary of State and
appropriate documents with the relevant authorities of other states
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in which the Company is qualified to do business, and (iii) such other consents,
approvals, authorizations, filings or notices as are set forth in Section 3.1(d)
of the Disclosure Schedule.
(e) FINANCIAL STATEMENTS; SEC REPORTS. The Company has previously furnished
Parent and Sub with true and complete copies of (i) its Annual Report on Form
10-K for the fiscal year ended December 28, 1996 (the "Annual Report") filed by
the Company with the Securities and Exchange Commission (the "SEC"), (ii) its
Quarterly Reports on Form 10-Q for the quarters ended April 19, July 12 and
October 4, 1997 (collectively, the "Quarterly Reports" and, together with the
Annual Report, the "Reports") filed by the Company with the SEC, (iii) proxy
statements relating to all of the Company's meetings of shareholders (whether
annual or special) held or scheduled to be held since December 28, 1996 and (iv)
each other registration statement, proxy or information statement or current
report on Form 8-K filed since December 28, 1996 by the Company with the SEC.
Since December 24, 1992, the Company has complied in all material respects with
its SEC filing obligations under the Exchange Act and the Securities Act of
1933, as amended (the "Securities Act"). The financial statements and related
schedules and notes thereto of the Company contained in the Reports (or
incorporated therein by reference) were prepared in accordance with generally
accepted accounting principles (except, in the case of unaudited quarterly
financial statements, as permitted by Form 10-Q) applied on a consistent basis
except as noted therein, and fairly present in all material respects the
consolidated financial position of the Company and its consolidated Subsidiaries
as of the dates thereof and the consolidated results of their operations and
cash flows for the periods then ended, subject (in the case of interim unaudited
financial statements) to normal year-end audit adjustments, and such financial
statements complied as to form as of their respective dates in all material
respects with applicable rules and regulations of the SEC. Each such
registration statement, proxy statement and Report was prepared in accordance
with the requirements of the Securities Act or the Exchange Act and did not, on
the date of effectiveness in the case of such registration statements, on the
date of mailing in the case of such proxy statements and on the date of filing
in the case of such Reports, contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(f) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as may be disclosed in the
Reports or as otherwise disclosed in Section 3.1(f) of the Disclosure Schedule,
since October 4, 1997 there has not been (1) any declaration, setting aside or
payment of any dividend or other distribution in respect of the capital stock of
the Company or any redemption or other acquisition by the Company of any of its
capital stock; (2) any issuance by the Company, or agreement or commitment of
the Company to issue, any shares of its Common Stock or securities convertible
into or exchangeable for shares of its Common Stock, except for stock options
and stock purchase rights set forth in Section 3.1(c) of the Disclosure
Schedule; (3) any change by the Company in accounting methods, principles or
practices except as required by generally accepted accounting principles; or (4)
any agreement or commitment, whether in writing or otherwise, to take any action
described in this subsection 3.1(f). Since October 4, 1997, the Company and the
Subsidiaries have conducted their respective businesses in all material respects
only in the ordinary course, consistent with past custom and practice, except as
contemplated by this Agreement.
(g) 1997 FINANCIAL INFORMATION. The financial and other information relating
to the Company's 1997 fiscal year and fourth fiscal quarter ended December 27,
1997 set forth in Section 3.1(g) of the Disclosure Schedule was prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with the financial information set forth in the Reports, and fairly
presents in all material respects
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the consolidated financial position of the Company and its consolidated
Subsidiaries as of December 27, 1997 and the consolidated results of their
operations for the fiscal year and fiscal quarter then ended.
(h) NO UNDISCLOSED LIABILITIES. Except as set forth in the Reports or on
Section 3.1(g) of the Disclosure Schedule, neither the Company nor any of its
Subsidiaries has any liabilities (absolute, accrued, contingent or otherwise),
except liabilities (1) in the aggregate adequately provided for in the Company's
audited balance sheet (including any related notes thereto) for the fiscal year
ended December 28, 1996 included in the Annual Report (the "1996 Balance
Sheet"), (2) incurred in the ordinary course of business and not required under
generally accepted accounting principles to be reflected on the 1996 Balance
Sheet, (3) incurred since December 28, 1996 in the ordinary course of business
consistent with past practice, (4) incurred in connection with this Agreement or
(5) which could not reasonably be expected to have a Material Adverse Effect.
(i) COMPLIANCE WITH LAWS. The business of the Company and each of the
Subsidiaries has been operated at all times in material compliance with all
applicable statutes, laws, rules, regulations, permits, licenses, orders,
injunctions and judgments (collectively, "Laws"), including, without limitation,
any applicable Laws regulating environmental matters, immigration, wages and
hours, working conditions or health and safety, except for such violations or
failures to comply that, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect nor have a material adverse effect
on the Financing (as defined herein).
(j) LITIGATION. Except as disclosed in the Reports, there is no suit, action
or proceeding pending or, to the knowledge of the Company, threatened against
the Company or any of the Subsidiaries which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, nor is there any
judgment, decree, injunction, rule or order of any Governmental Entity
outstanding against the Company or any of its Subsidiaries which, individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
(k) COMPANY SCHEDULE 13E-3 AND PROXY MATERIALS. All of the information
supplied by the Company for inclusion in the Rule 13e-3 Transaction Statement on
Schedule 13E-3 (the "Schedule 13E-3") referred to in Section 5.2 hereof will
not, on the date the Schedule 13E-3 is first filed with the SEC, and all of the
information supplied by the Company for inclusion in the definitive proxy
statement (the "Definitive Proxy Statement") referred to in Section 5.2 hereof
will not, on the date when the Definitive Proxy Statement is first mailed to the
Company's shareholders, and the Schedule 13E-3 and the Definitive Proxy
Statement, as then amended or supplemented, will not, on the date of the
Company's stockholders' meeting referred to in Section 5.1 hereof or on the
Closing Date, contain any untrue statement of any 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, the Company makes no
representation or warranty regarding information furnished by Parent or Sub for
inclusion in the Schedule 13E-3 or the Definitive Proxy Statement (or any
amendment or supplement thereto). The Schedule 13E-3 and the Definitive Proxy
Statement will comply as to form and, with respect to information supplied or to
be supplied in writing by or on behalf of the Company for inclusion in the
Definitive Proxy Statement, substance in all material respects with the
requirements of the Exchange Act and the applicable rules and regulations of the
SEC thereunder.
(l) BOARD RECOMMENDATION. The Company's Board of Directors has (i)
recommended that the stockholders of the Company vote for approval and adoption
of this Agreement and the Merger, and (ii) taken such other action as shall be
necessary to exempt this Agreement and the transactions
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contemplated hereby from the provisions set forth in (x) Article 6 of the
Company's Restated Articles of Organization under the captions "Vote Required
for Certain Business Combinations" and "Redemption of Shares" and (y) Article 11
of the Company's Restated By-laws.
(m) FAIRNESS OPINION. The Company's Board of Directors has received from its
financial advisor, NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities, Inc. (the "Financial
Advisor"), a written opinion, or a verbal opinion to be confirmed in writing
prior to the filing with the SEC of the Preliminary Proxy Statement (as defined
herein), addressed to it for inclusion in the Schedule 13E-3 and the Definitive
Proxy Statement to the effect that the consideration to be received by the
stockholders of the Company pursuant to the Merger is fair to such stockholders
from a financial point of view.
(n) BROKERS. No broker, investment banker, financial advisor or other
person, the fees and expenses of which will be paid by the Company, is entitled
to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated by this Agreement,
other than pursuant to an engagement letter with the Financial Advisor, the
terms of which have been disclosed to Parent.
SECTION 3.2. REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB. Parent and
Sub represent and warrant to the Company as follows:
(a) ORGANIZATION, STANDING AND CORPORATE POWER. Parent is a corporation duly
organized, validly existing and in corporate good standing under the laws of the
State of Delaware. Sub is a corporation duly organized, validly existing and in
corporate good standing under the laws of the Commonwealth of Massachusetts.
Each of Parent and Sub has the requisite corporate power and authority to carry
on its business as now being conducted. Each of Parent and Sub is duly qualified
or licensed to do business and is in good standing in each jurisdiction in which
the nature of its business or the ownership or leasing of its properties makes
such qualification or licensing necessary, other than in such jurisdictions
where the failure to be so qualified or licensed (individually or in the
aggregate) would not have a Material Adverse Effect.
(b) CAPITALIZATION. As of the date of this Agreement, the authorized capital
stock of Parent consists of 1,000,000 shares of Common Stock, par value $.01 per
share, 100 shares of which are presently issued and outstanding, and 1,000,000
shares of Preferred Stock, par value $.01 per share, no shares of which are
presently issued and outstanding. As of the date of this Agreement, the
authorized capital stock of Sub consists of 200,000 shares of Common Stock, par
value $.01 per share, 1,000 shares of which are presently issued and
outstanding, which constitutes all of the issued and outstanding capital stock
of Sub. All of the issued and outstanding shares of capital stock of Parent and
Sub are validly issued, fully paid and nonassessable.
(c) AUTHORITY; ENFORCEABILITY; NONCONTRAVENTION. Parent and Sub have all
requisite corporate power and authority to enter into this Agreement and to
consummate the Merger and the other transactions contemplated by this Agreement.
The execution and delivery of this Agreement by Parent and Sub and the
consummation by Parent and Sub of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action on the
part of Parent and Sub. This Agreement has been duly executed and delivered by
and constitutes a valid and binding obligation of each of Parent and Sub,
enforceable against such party in accordance with its terms, except that the
enforceability hereof may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court
I-10
before which any proceeding therefor may be brought. The execution and delivery
of this Agreement do not, and the consummation of the transactions contemplated
by this Agreement and compliance with the provisions of this Agreement will not
(i) violate any of the provisions of the charter documents or By-laws of Parent
or Sub, or (ii) subject to the governmental filings and other matters referred
to in the following sentence, contravene any law, rule or regulation of any
state or of the United States or any political subdivision thereof or therein,
or any order, writ, judgment, injunction, decree, determination or award
currently in effect, which, in the case of clause (ii) above, singly or in the
aggregate, would have a material adverse effect on the business, financial
condition or results of operations of Parent and Sub taken as a whole or prevent
consummation of the transactions contemplated hereby. No consent, approval or
authorization of, or declaration or filing with, or notice to, any Governmental
Entity which has not been received or made is required by or with respect to
Parent or Sub in connection with the execution and delivery of this Agreement by
Parent or Sub or the consummation by Parent or Sub, as the case may be, of any
of the transactions contemplated by this Agreement, except for (i) the
requirements of the Exchange Act, (ii) the filing of the articles of merger with
the Massachusetts Secretary of State and appropriate documents with the relevant
authorities of other states in which the Company is qualified to do business,
and (iii) such other consents, approvals, authorizations, filings or notices as
are set forth in Section 3.1(d) of the Disclosure Schedule.
(d) FINANCING. Parent and Sub have received and accepted a written
commitment or commitments (the "Commitments") from BankBoston, N.A., Fleet
National Bank and BancBoston Securities Inc. dated as of February 13, 1998, to
provide financing for the transactions contemplated hereby, on or prior to the
Closing Date, in an aggregate amount of not less than $77,500,000 (the
"Financing"), which Financing is sufficient to consummate the transactions
currently contemplated by Section 6.2(c). True and correct copies of the
Commitments have been provided to the Company prior to the date hereof.
(e) SCHEDULE 13E-3 AND PROXY MATERIALS. All of the information to be
furnished by Parent or Sub for inclusion in the Schedule 13E-3 and the
Definitive Proxy Statement (or any amendment or supplement thereto) will not, in
the case of the Schedule 13E-3, on the date it is first filed, and in the case
of the Definitive Proxy Statement, on the date it is first mailed to the
Company's shareholders, and in the case of the Schedule 13E-3 and the Definitive
Proxy Statement, as then amended or supplemented, on the date of the Company's
stockholders' meeting referred to in Section 5.1 hereof or on the Closing Date,
contain any statement which is false or misleading with respect to any 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,
Parent and Sub make no representation or warranty regarding information
furnished by the Company for inclusion in the Schedule 13E-3 or the Definitive
Proxy Statement (or any amendment or supplement thereto). The Schedule 13E-3
will comply as to form and, with respect to information supplied or to be
supplied in writing by or on behalf of Parent or Sub for inclusion in the
Schedule 13E-3, substance in all material respects with the requirements of the
Exchange Act and the applicable rules and regulations of the SEC thereunder.
(f) BROKERS. No broker, investment banker, financial advisor or other
person, the fees and expenses of which will be paid by Parent or Sub, is
entitled to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated by this Agreement,
except for fees and expenses payable to BancBoston Securities Inc.
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ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
PRIOR TO MERGER
SECTION 4.1. CONDUCT OF BUSINESS OF THE COMPANY. Except as contemplated by
this Agreement, during the period from the date of this Agreement to the
Effective Time, the Company shall operate, and shall cause each Subsidiary to
operate, its business in the ordinary course of business. Without limiting the
generality of the foregoing, during the period from the date of this Agreement
to the Effective Time, except as expressly contemplated by this Agreement, the
Company and the Subsidiaries shall not, without the prior written consent of
Parent:
(i) (x) declare, set aside or pay any dividends on, or make any other
distributions (whether in cash, stock or property) in respect of, any of the
Company's outstanding capital stock, (y) split, combine or reclassify any of its
outstanding capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
outstanding capital stock, or (z) purchase, redeem or otherwise acquire any
shares of outstanding capital stock or any rights, warrants or options to
acquire any such shares;
(ii) issue, sell, grant, pledge or otherwise encumber any shares of its
capital stock, any other voting securities or any securities convertible into,
or any rights, warrants or options to acquire, any such shares, voting
securities or convertible securities, including under the ESPP, except for the
issuance of shares of Common Stock upon exercise of Company Stock Options
outstanding prior to the date of this Agreement and disclosed in Section 3.1(c),
or take any action that would make the Company's representations and warranties
set forth in Section 3.1(c) not true and correct in all material respects;
(iii) amend its Restated Articles of Organization or Restated By-laws or the
comparable charter or organizational documents of any Subsidiary;
(iv) acquire any business or any corporation, partnership, joint venture,
association or other business organization or division thereof (or any interest
therein), or form any subsidiaries;
(v) sell or otherwise dispose of any of its substantial assets, except in
the ordinary course of business;
(vi) make any capital expenditures, enter into leases or agreements for new
locations, or make other commitments with respect thereto, except capital
expenditures, leases, agreements or commitments (i) set forth on Section 4.1(vi)
of the Disclosure Schedule, or (ii) not exceeding $100,000 in the aggregate as
the Company may, in its discretion, deem appropriate;
(vii) (x) incur any indebtedness for borrowed money or guaranty any such
indebtedness of another person, other than (A) borrowings in the ordinary course
under existing lines of credit (or under any refinancing of such existing
lines), (B) indebtedness owing to, or guaranties of indebtedness owing to, the
Company or (C) in connection with the Financing, or (y) make any loans or
advances to any other person, other than routine advances to employees;
(viii) grant or agree to grant to any employee any increase in wages or
bonus, severance, profit sharing, retirement, deferred compensation, insurance
or other compensation or benefits, or establish any new compensation or benefit
plans or arrangements, or amend or agree to amend any existing Company Plans,
except as may be required under existing agreements or in the ordinary course of
business consistent with past practices;
I-12
(ix) merge, amalgamate or consolidate with any other person or entity in any
transaction, sell all or substantially all of its business or assets, or acquire
all or substantially all of the business or assets of any other person or
entity;
(x) enter into or amend any employment, consulting, severance or similar
agreement with any person;
(xi) change its accounting policies in any material respect, except as
required by generally accepted accounting principles; or
(xii) commit or agree to take any of the foregoing actions.
SECTION 4.2. OTHER ACTIONS. The Company, Parent and Sub shall not take any
action that would, or that could reasonably be expected to, result in (i) any of
the representations and warranties of such party set forth in this Agreement
that are qualified as to materiality becoming untrue, (ii) any of such
representations and warranties that are not so qualified becoming untrue in any
material respect or (iii) any of the conditions of the Merger set forth in
Article VI not being satisfied.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1. MEETING OF STOCKHOLDERS. The Company will promptly take all
action necessary in accordance with applicable law and its Restated Articles of
Organization and Restated By-laws to duly call, give notice of, and convene a
meeting of its stockholders (the "Stockholders' Meeting") to consider and vote
upon the adoption and approval of this Agreement and the Merger and all actions
contemplated hereby which require approval and adoption by the Company's
stockholders; provided, however, that the obligations contained herein shall be
subject to the provisions of Section 5.8. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall agree to cause
all of the shares of capital stock of the Company held by the ▇▇▇▇▇▇▇▇ Group to
be voted, either in person or by proxy, in favor of the adoption and approval of
this Agreement and the Merger at the Stockholders' Meeting.
SECTION 5.2. PROXY STATEMENT; SCHEDULE 13E-3.
(a) The Company will promptly (but in any event within 15 business days from
the date of this Agreement or 5 business days from the Company's receipt of its
independent auditor's report on the Company's fiscal 1997 financial statements,
whichever is later) prepare and file, and the Company will cooperate with Parent
in the preparation and filing of, the Schedule 13E-3 with the SEC with respect
to the transactions contemplated by this Agreement. In connection with the
Stockholders' Meeting contemplated hereby, the Company will promptly (but in any
event within 15 business days from the date of this Agreement or 5 business days
from the Company's receipt of its independent auditor's report on the Company's
fiscal 1997 financial statements, whichever is later) prepare and file, and
Parent will cooperate with the Company in the preparation and filing of, a
preliminary Proxy Statement relating to the transactions contemplated by this
Agreement (the "Preliminary Proxy Statement") with the SEC and will use its
commercially reasonable best efforts to respond to the comments of the SEC
concerning the Schedule 13E-3 and the Preliminary Proxy Statement and to cause
the Definitive Proxy Statement to be mailed to the Company's stockholders, in
each case as soon as reasonably practicable. The Company shall pay the filing
fees for the Schedule 13E-3 and the Preliminary Proxy Statement. Each party to
this Agreement will notify the other parties promptly of the receipt of the
comments of the SEC, if any, and of any request by the SEC for amendments or
supplements to the Schedule 13E-3, the Preliminary Proxy Statement or the
Definitive Proxy Statement or for additional information, and will supply the
other
I-13
parties with copies of all correspondence between such party or its
representatives, on the one hand, and the SEC or members of its staff, on the
other hand, with respect to the Schedule 13E-3, the Preliminary Proxy Statement,
the Definitive Proxy Statement or the Merger.
(b) If at any time prior to the Stockholders' Meeting, any event should
occur relating to the Company or any of the Subsidiaries which should be set
forth in an amendment of, or a supplement to, the Schedule 13E-3 or the
Definitive Proxy Statement, the Company will promptly inform Parent. If at any
time prior to the Stockholders' Meeting, any event should occur relating to
Parent or Sub or any of their respective Associates or Affiliates, or relating
to the plans of any such persons for the Surviving Corporation after the
Effective Time of the Merger, or relating to the Financing, that should be set
forth in an amendment of, or a supplement to, the Schedule 13E-3 or the
Definitive Proxy Statement, the Company, with the cooperation of Parent, will,
upon learning of such event, promptly prepare, file and, if required, mail such
amendment or supplement to the Company's stockholders; provided that, prior to
such filing or mailing, the Company shall consult with Parent with respect to
such amendment or supplement and shall afford Parent reasonable opportunity to
comment thereon.
(c) Parent will furnish to the Company the information relating to Parent
and Sub, their respective Associates and Affiliates and the plans of such
persons for the Surviving Corporation after the Effective Time of the Merger,
and relating to the Financing, which is required to be set forth in the Schedule
13E-3, the Preliminary Proxy Statement or the Definitive Proxy Statement under
the Exchange Act and the rules and regulations of the SEC thereunder. The
Company shall cause to be included, (i) as an exhibit to the Preliminary Proxy
Statement and the Definitive Proxy Statement, the fairness opinion of the
Financial Advisor referred to in Section 3.1(m), and (ii) as an exhibit to the
Schedule 13E-3, any materials delivered to the Company's Board of Directors by
the Financial Advisor in connection with the delivery of such fairness opinion
which are required under Schedule 13E-3 to be filed as exhibits.
SECTION 5.3. ACCESS TO INFORMATION; CONFIDENTIALITY. From and after the date
hereof, the Company will provide to Parent complete access to the Company's
facilities, books and records and shall cause the directors, employees,
accountants, attorneys, financial advisors, lenders and other agents and
representatives (collectively, "Representatives") of the Company to cooperate
fully with Parent and Parent's Representatives in connection with such persons'
due diligence investigation of the Company and the Company's assets, contracts,
liabilities, operations, records and other aspects of its business (including
any environmental investigation of the Company's facilities). Parent shall, and
shall cause Parent's Representatives to, keep all information supplied or made
available to Parent hereunder in confidence and shall not disclose the same to
any party other than its Representatives on a "need to know" basis and only for
purposes of evaluating the Merger and the Financing. Parent will not use such
information except for evaluating the Merger and in connection with procurement
of the Financing. If the Merger is not consummated and this Agreement is
terminated in accordance with its terms, Parent shall return any information
provided hereunder.
SECTION 5.4. COMMERCIALLY REASONABLE EFFORTS. Upon the terms and subject to
the conditions and other agreements set forth in this Agreement, each of the
parties agrees to use commercially reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with the other parties in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable, the
Merger and the other transactions contemplated by this Agreement, including the
satisfaction of the respective conditions set forth in Article VI.
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SECTION 5.5. FINANCING. Each of Parent and Sub shall use commercially
reasonable best efforts to close the Financing on terms consistent with the
Commitments or such other terms as shall be satisfactory to them and to execute
and deliver definitive agreements with respect to the Financing (the "Definitive
Financing Agreements") on or before the Closing Date. Parent and Sub shall use
commercially reasonable best efforts to satisfy on or before the Closing Date
all requirements of the Definitive Financing Agreements which are conditions to
closing the transactions constituting the Financing and to drawing the cash
proceeds thereunder. The obligations contained herein are not intended, nor
shall they be construed, to benefit or confer any rights upon any person, firm
or entity other than the Company.
SECTION 5.6. INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE.
(a) From and after the Effective Time, Parent shall cause the Surviving
Corporation to indemnify and hold harmless each person who is now, at any time
has been or who becomes prior to the Effective Time a "Director/officer" of the
Company (as defined in Article 7 of the Company's Restated By-laws ("Article
7")), and their heirs and personal representatives (the "Indemnified Parties"),
against any and all "Expenses" (as defined in Article 7) incurred in connection
with any "Proceeding" (as defined in Article 7) arising out of or pertaining to
any action or omission occurring prior to the Effective Time (including, without
limitation, any Proceeding which arises out of or relates to the transactions
contemplated by this Agreement), to the full extent permitted under
Massachusetts law and the Surviving Corporation's Restated By-laws in effect as
of the Effective Date or under any indemnification agreement in effect as of the
date of this Agreement.
(b) The Surviving Corporation shall control the defense of any such
Proceeding with counsel selected by the Surviving Corporation, which counsel
shall be reasonably acceptable to the Indemnified Party, provided that the
Indemnified Party shall be permitted to participate in the defense of such
Proceeding at its own expense; except that the Surviving Corporation shall pay
as incurred the reasonable fees and expenses of counsel retained by an
Indemnified Party in the event that (i) the Surviving Corporation and the
Indemnified Party shall have mutually agreed on the retention of such counsel or
(ii) the named parties to any Proceeding include both the Surviving Corporation
and the Indemnified Party and representation of both parties by the same counsel
would be inappropriate, in the reasonable opinion of counsel to the Indemnified
Party, due to actual or potential differing interests between them; and
provided, further, that if any D&O Insurance (as defined in paragraph (c) of
this Section 5.6) in effect at the time shall require the insurance company to
control such defense in order to obtain the full benefits of such insurance and
such provision is consistent with the provisions of the Company's D&O Insurance
existing as of the date of this Agreement, then the provisions of such policy
shall govern. Neither Parent nor the Surviving Corporation shall in any event be
liable for any settlement effected without its written consent, which consent
shall not be withheld unreasonably.
(c) For a period of not less than six years after the Effective Time, Parent
or the Surviving Corporation shall maintain officers' and directors' liability
insurance ("D&O Insurance") covering each Indemnified Party who is presently
covered by the Company's officers' and directors' liability insurance or will be
so covered at the Effective Time with respect to actions or omissions occurring
prior to the Effective Time, on terms no less favorable than such insurance
maintained in effect by the Company as of the date hereof in terms of coverage
and amounts, provided that Parent and the Surviving Corporation shall not be
required to pay in the aggregate an annual premium for D&O Insurance in excess
of 125% of the last annual premium paid prior to the date hereof, but in such
case shall purchase as much coverage as may be obtained for such amount.
I-15
(d) The Restated Articles of Organization and Restated By-laws of the
Surviving Corporation shall contain the provisions with respect to
indemnification set forth in the Restated Articles of Organization and Restated
By-laws of the Surviving Corporation as of the Effective Date, which provisions
shall not be amended, repealed or otherwise modified after the Effective Time in
any manner that would adversely affect the rights thereunder of the Indemnified
Parties in respect of actions or omissions occurring at or prior to the
Effective Time (including, without limitation, the transactions contemplated by
this Agreement), unless such modification is required by law. Parent, Sub and
the Company agree that all rights existing in favor of any Indemnified Party
under any indemnification agreement in effect as of the date hereof shall
survive the Merger and shall continue in full force and effect, without any
amendment thereto.
(e) The provisions of this Section 5.6 are intended to be for the benefit
of, and shall be enforceable by, each of the Indemnified Parties, his or her
heirs and his or her personal representatives and shall be binding on all
successors and assigns of Parent, Sub, the Company and the Surviving
Corporation.
SECTION 5.7. PUBLIC ANNOUNCEMENTS. Parent and Sub, on the one hand, and the
Company, on the other hand, will consult with each other before issuing, and
provide each other the opportunity to review and comment upon, any press release
or other public statements with respect to the existence of and transactions
contemplated by this Agreement, and shall not issue any such press release or
make any such public statement without the consent of the other party following
such consultation, except as may be required by applicable law, regulation or
judicial process, and in such case only after reasonable notice to the other
party.
SECTION 5.8. ACQUISITION PROPOSALS. The Company shall not, nor shall it
authorize or permit any of its Representatives to, directly or indirectly, (i)
solicit, initiate or knowingly encourage the submission of any Acquisition
Proposal (as hereinafter defined) or (ii) participate in any discussions or
negotiations regarding, or furnish to any person any non-public information with
respect to, or take any other action to facilitate any inquiries or the making
of any proposal that constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal; provided, however, that the foregoing shall not prohibit
the Board of Directors of the Company (or, if applicable, the duly appointed
Special Committee thereof) from: (i) furnishing information to, or entering into
discussions or negotiations with, any person in connection with an unsolicited
bona fide Acquisition Proposal by such person if, and to the extent that, the
Board of Directors of the Company (or the Special Committee), after consultation
with independent legal counsel (who may be the Company's regularly engaged
independent counsel), determines in good faith that such action is required for
the Board of Directors of the Company to comply with its fiduciary obligations
to stockholders under applicable law; (ii) withdrawing or modifying its
recommendation referred to in Section 3.1(l) following receipt of a bona fide
unsolicited Acquisition Proposal if the Board of Directors of the Company (or
the Special Committee), after consultation with independent legal counsel (who
may be the Company's regularly engaged independent counsel), determines in good
faith that such action is necessary for the Board of Directors of the Company to
comply with its fiduciary duties to stockholders under applicable law; or (iii)
making to the Company's stockholders any recommendation and related filing with
the SEC as required by Rule 14e-2 and 14d-9 under the Exchange Act, with respect
to any tender offer, or taking any other legally required action (including,
without limitation, the making of public disclosures as may be necessary or
advisable under applicable securities laws); and provided further, however,
that, in the event of an exercise of the Company's or its Board of Director's
(or the Special Committee's) rights under clause (i), (ii) or (iii) above,
notwithstanding anything contained in this Agreement to the contrary, such
failure shall not constitute a breach of this Agreement by the Company. The
Company shall provide immediate written notice to Parent of the receipt of any
such Acquisition
I-16
Proposal and of the Company's intention to furnish information to, or enter into
discussions or negotiations with, such person or entity. For purposes of this
Agreement, "Acquisition Proposal" means any proposal with respect to a merger,
consolidation, share exchange, tender offer or similar transaction involving the
Company, or any purchase or other acquisition of all or any significant portion
of the assets of the Company, or any equity interest in the Company, other than
the transactions contemplated hereby.
SECTION 5.9. STOCKHOLDER LITIGATION. The Company shall give Parent the
opportunity to participate, at the expense of Parent, in the defense or
settlement of any stockholder litigation against the Company and its
Representatives relating to the transactions contemplated by this Agreement;
provided, however, that no such settlement shall be agreed to without Parent's
consent, which consent shall not be unreasonably withheld.
SECTION 5.10. BOARD ACTION RELATING TO STOCK OPTION PLANS. As soon as
practicable following the date of this Agreement, the Board of Directors of the
Company (or, if appropriate, any committee administering a Company Stock Option
Plan) shall adopt such resolutions or take such actions as may be required to
adjust the terms of all outstanding Company Stock Options in accordance with
Section 2.2 and shall make such other changes to the Company Stock Option Plans
and the ESPP as Parent deems appropriate to give effect to the Merger, and to
terminate such plans as of the Effective Time. Promptly following the
termination of the ESPP, the Company or the Surviving Corporation, as the case
may be, shall refund to each participant in the ESPP in cash the amount of
payroll deductions, if any, then credited to such participant's account under
the ESPP in accordance with the provisions of Section 19 of the ESPP.
SECTION 5.11. CONSENTS AND APPROVALS. As soon as practicable following the
date of this Agreement, the Company and Parent shall make all filings required
to be made with and seek all consents, approvals, permits and authorizations
required to be obtained from, any third parties or Governmental Entities in
connection with this Agreement and the transactions contemplated hereby,
including, without limitation, the filing of any required notification under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "H-S-R
Act"), the consent of any licensing board or agency governing the sale of
alcoholic beverages, the consent of any landlord (or of any other person) at any
location leased by the Company or any Subsidiary and any other filing, consent
or approval listed on Section 3.1(d) of the Disclosure Schedule. The Company
shall pay any required filing fees or other expense in connection therewith;
provided that the Company and Parent shall each pay one-half of any filing fees
under the H-S-R Act; provided, further, that Parent shall reimburse the Company
for such payment in the event that this Agreement is terminated pursuant to
Section 7.1 hereof in any manner which does not entitle Parent to reimbursement
from the Company for Expenses as defined in Section 7.2(b)(i).
SECTION 5.12. 1997 FINANCIAL STATEMENTS. As soon as practicable after the
date hereof, and in any event on or prior to February 23, 1998, the Company
shall deliver to Parent a draft of the Company's consolidated financial
statements, with footnotes, for its fiscal year ended December 27, 1997. As soon
as practicable after the date hereof, and in any event on or prior to March 2,
1998, the Company shall deliver to Parent a final copy of the Company's audited
consolidated financial statements for such fiscal year, together with the report
of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP thereon, prepared in accordance with generally accepted
accounting principles applied on a basis consistent with the financial
statements set forth in the Reports, and fairly presenting in all material
respects the consolidated financial position of the Company as of December 27,
1997, and the consolidated results of the Company's operations and cash flows
for such fiscal year. Parent shall be entitled, subject to the confidentiality
obligations of Section 5.3 hereof, to provide such draft and final financial
statements to its Representatives, including any potential financing sources and
their agents and representatives.
I-17
SECTION 5.13. REPAYMENT OF INDEBTEDNESS. Parent shall utilize a portion of
the net proceeds of the Financing to repay, satisfy or otherwise discharge, in
full, all of the Company's indebtedness to BankBoston, N.A. existing on the
Closing Date.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) STOCKHOLDER APPROVAL. This Agreement and the Merger shall have been
adopted and approved by the affirmative vote of the holders of two-thirds of the
outstanding shares of Common Stock as required under the laws of the
Commonwealth of Massachusetts.
(b) THIRD-PARTY AND GOVERNMENTAL CONSENTS. All filings required to be made
prior to the Effective Time with, and all consents, approvals, permits and
authorizations required to be obtained prior to the Effective Time from, any
third party or any Governmental Entities, including, without limitation, those
set forth in Section 3.1(d) of the Disclosure Schedule, in connection with the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by the Company, Parent and Sub, and which,
either individually or in the aggregate, if not obtained would have a Material
Adverse Effect or would prevent consummation of the Merger, shall have been made
or obtained (as the case may be).
(c) NO INJUNCTIONS, RESTRAINTS OR LITIGATION. No temporary restraining
order, judgment, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Merger shall be in effect; provided, however,
that the parties invoking this condition shall use their best efforts to have
any such order or injunction vacated.
SECTION 6.2. CONDITIONS TO OBLIGATIONS OF PARENT AND SUB. The obligations of
Parent and Sub to effect the Merger are further subject to the satisfaction, or
waiver by Parent, on or prior to the Closing Date, of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the Company set forth in Section 3.1 that are qualified by materiality shall be
true and correct and such representations and warranties of the Company set
forth in Section 3.1 that are not so qualified shall be true and correct in all
material respects, in each case as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date, except to the extent
such representations and warranties speak as of an earlier date and except for
changes permitted or contemplated by this Agreement, and Parent shall have
received an officers' certificate signed on behalf of the Company to the effect
set forth in this paragraph.
(b) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date, and Parent shall have
received an officers' certificate signed on behalf of the Company to such
effect.
(c) FINANCING. On or prior to the Effective Time, Parent and/or Sub shall
have received the cash proceeds of the Financing in amounts sufficient to
consummate the transactions contemplated hereby pursuant to the terms of the
Commitments or such other terms as Parent and the Company shall reasonably agree
or as are not materially more onerous than as set forth in the Commitments.
I-18
(d) DISSENTING SHARES. Parent shall have received evidence, in form and
substance reasonably satisfactory to it, that the number of Dissenting Shares
shall constitute no greater than 10% of the total number of shares of Common
Stock outstanding immediately prior to the Effective Time, on a fully diluted
basis.
(e) CONSENTS AND APPROVALS. On or prior to the Effective Date, Parent and/or
Sub shall have received all of the necessary consents or approvals of
Governmental Entities and all third parties in connection with the execution and
delivery of this Agreement and the consummation of the Merger and the other
transactions contemplated hereby, unless the failure to obtain such consent or
approval would not have a Material Adverse Effect nor have a material adverse
effect on the Financing.
(f) BOARD RECOMMENDATION; FAIRNESS OPINION. At or prior to the Effective
Time, the Company's Board of Directors shall not have withdrawn or modified, in
a manner adverse to Parent or Sub, its recommendation pursuant to Section
3.1(l), and the Financial Advisor shall not have withdrawn or modified, in a
manner adverse to Parent or Sub, its fairness opinion referred to in Section
3.1(m).
(g) ABSENCE OF CERTAIN CHANGES OR EVENTS. From and after the date of this
Agreement, no event, occurrence, fact, condition, change, damage, destruction,
loss or other development shall have occurred that has constituted or resulted
in, or would reasonably be expected to constitute or result in, a Material
Adverse Effect.
(h) ABSENCE OF CERTAIN LITIGATION. There shall not be threatened, instituted
or pending any action, proceeding, application or counterclaim by any
Governmental Entity or third party before any court or governmental regulatory
or administrative agency, authority or tribunal (i) which if adversely
determined would have a material adverse effect on the Surviving Corporation or
the ability of Parent or Sub to perform their obligations hereunder or in
connection with the Financing, or (ii) which challenges or seeks to challenge,
restrain or prohibit the consummation of the Merger.
SECTION 6.3. CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligations of
the Company to effect the Merger are further subject to the satisfaction, or
waiver by the Company, on or prior to the Closing Date, of the following
conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties of
Parent and Sub set forth in Section 3.2 that are qualified by materiality shall
be true and correct and such representations and warranties of Parent and Sub
set forth in Section 3.2 that are not so qualified shall be true and correct in
all material respects, in each case as of the date of this Agreement and as of
the Closing Date as though made on and as of the Closing Date, except to the
extent such representations and warranties speak as of an earlier date and
except for changes permitted or contemplated by this Agreement, and the Company
shall have received an officers' certificate signed on behalf of Parent to the
effect set forth in this paragraph.
(b) PERFORMANCE OF OBLIGATIONS OF PARENT AND SUB. Parent and Sub shall have
performed in all material respects all obligations required to be performed by
them under this Agreement at or prior to the Closing Date, and the Company shall
have received an officers' certificate signed on behalf of Parent to such
effect.
(c) ABSENCE OF CERTAIN LITIGATION. There shall not be threatened, instituted
or pending any action, proceeding, application or counterclaim by any
Governmental Entity before any court or governmental regulatory or
administrative agency, authority or tribunal (i) which if adversely determined
would have a material adverse effect on the ability of the Company to perform
its obligations hereunder, or (ii) which challenges or seeks to challenge,
restrain or prohibit the consummation of the Merger.
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(d) FAIRNESS OPINION. At or prior to the Effective Time, the Financial
Advisor shall not have withdrawn its fairness opinion referred to in Section
3.1(m)
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1. TERMINATION. This Agreement may be terminated and abandoned at
any time prior to the Effective Time, whether before or after approval of the
Merger by the stockholders of the Company: (a) by mutual written consent of
Parent and the Company; or (b) by either Parent or the Company: (i) if, upon a
vote at the Stockholders Meeting, or any adjournment thereof, the adoption and
approval of this Agreement and the Merger by the stockholders of the Company
required by Massachusetts law, the Company's Restated Articles of Organization
or the terms of this Agreement shall not have been obtained; or (ii) if the
Merger shall not have been consummated on or before July 31, 1998, provided that
the failure to consummate the Merger is not attributable to the failure of the
terminating party to fulfill its obligations pursuant to this Agreement; or
(iii) if any Governmental Entity shall have issued an order, decree or ruling or
taken any other action permanently enjoining, restraining or otherwise
prohibiting the Merger and such order, decree, ruling or other action shall have
become final and nonappealable; or (c) by the Company, if the Board of Directors
of the Company shall have approved an Acquisition Proposal after determining,
after consultation with independent legal counsel (who may be the Company's
regularly engaged independent counsel), that such approval is necessary in the
exercise of its fiduciary obligations under applicable law; or (d) by Parent, if
the Board of Directors of the Company shall have approved an Acquisition
Proposal or withdrawn or modified, in a manner adverse to Parent or Sub, the
Board of Director's recommendation pursuant to Section 3.1(l); or (e) by Parent,
if any of the conditions set forth in Section 6.2 shall have become incapable of
fulfillment, and shall not have been waived by Parent, or if the Company shall
breach in any material respect any of its representations, warranties or
obligations hereunder and such breach shall not have been cured in all material
respects or waived and the Company shall not have provided reasonable assurance
that such breach will be cured in all material respects on or before the Closing
Date, but only if such breach, singly or together with all other such breaches,
constitutes a failure of the conditions contained in Section 6.2 as of the date
of such termination; or (f) by the Company, if any of the conditions set forth
in Section 6.3 shall have become incapable of fulfillment, and shall not have
been waived by the Company, or if Parent or Sub shall breach in any material
respect any of their respective representations, warranties or obligations
hereunder and such breach shall not have been cured in all material respects or
waived and Parent or Sub, as the case may be, shall not have provided reasonable
assurance that such breach will be cured in all material respects on or before
the Closing Date, but only if such breach, singly or together with all other
such breaches, constitutes a failure of the conditions contained in Section 6.3
as of the date of such termination; provided, however, that the party seeking
termination pursuant to clause (e) or (f) hereof is not in breach of any of its
material representations, warranties, covenants or agreements contained in this
Agreement.
SECTION 7.2. EFFECT OF TERMINATION.
(a) AGREEMENT VOID. In the event of the termination and abandonment of this
Agreement pursuant to Section 7.1 hereof, this Agreement shall forthwith become
void and have no effect, without any liability on the part of any party hereto
or its affiliates, directors, officers or stockholders and all rights and
obligations of any party hereto shall cease except for agreements contained in
Sections 5.3, 7.2 and 8.2; provided, however, that nothing contained in this
Section 7.2 shall relieve any party from liability for any breach of this
Agreement or shall relieve the Company from any liability under this Article 7.
I-20
(b) TERMINATION FEE.
(i) If this Agreement is terminated pursuant to Section 7.1(c) or
7.1(d), pursuant to Section 7.1(e) as a result of a willful breach by the
Company, or pursuant to Section 7.1(e) or 7.1(f) as a result of the
withdrawal or modification of the Financial Advisor's fairness opinion
referred to in Section 3.1(m), then the Company shall (provided that neither
Parent nor Sub is then in material breach of its obligations under this
Agreement) promptly pay to the Parent in cash an amount equal to the
aggregate out-of-pocket costs and reasonable expenses of Parent and Sub in
connection with this Agreement and the transactions contemplated hereby, up
to an aggregate amount not to exceed $750,000, including, without
limitation, commitment, appraisal and other fees relating to the Financing
and the reasonable fees and disbursements of accountants, attorneys and
investment bankers, whether retained by Parent or by any other person
(collectively, "Expenses").
(ii) In addition to any required payment of Expenses, if this Agreement
is terminated pursuant to Section 7.1(c) or 7.1(d), or pursuant to Section
7.1(e) as a result of a willful breach by the Company, then the Company
shall (provided that neither Parent nor Sub is then in material breach of
its obligations under this Agreement) promptly pay to Parent the sum of
$1,500,000 in cash (the "Termination Fee").
(iii) The sum of the Expenses and the Termination Fee, if any, shall be
referred to herein as the "Termination Amount." The rights of Parent to
receive the Termination Amount shall be in lieu of any damages remedy or
claim by Parent or Sub against the Company for termination of this Agreement
pursuant to Section 7.1(c) or 7.1(d), Section 7.1(e) in the event of a
willful breach by the Company or pursuant to Section 7.1(f) as a result of
the Company's reliance on the condition set forth in Section 6.3(d).
(iv) Notwithstanding the provisions of Section 7.2(b)(ii) above, if this
Agreement is terminated pursuant to Section 7.1(f) as a result of the
Company's reliance on the condition set forth in Section 6.3(d) at a time
when Parent is ready, willing and able (other than as a result of an
inability to consummate the Financing solely because of the withdrawal of
the Financial Advisor's fairness opinion referred to in Section 3.1(m)) to
proceed with the transactions contemplated hereby but for the withdrawal of
such fairness opinion, and within one year after such termination, the
Company enters into an agreement relating to an Acquisition Proposal with a
person other than Parent or Sub or their Affiliates and Associates, or the
Company's Board of Directors recommends or resolves to recommend to the
Company's stockholders approval and acceptance of such an Acquisition
Proposal, then, upon the entry into such agreement or the making of such
recommendation or resolution, the Company shall pay to Parent the
Termination Fee.
(c) ACQUISITION PROPOSAL FOLLOWING TERMINATION. At no time prior to or
within one year after termination of this Agreement shall the Company enter into
any agreement relating to an Acquisition Proposal with a person other than
Parent or Sub or their Affiliates and Associates unless such agreement provides
that such person shall, upon the execution of such agreement, pay any
Termination Amount due Parent under this Section 7.2 which at that time remains
unpaid.
(d) REASONABLE INDUCEMENT. The parties acknowledge and agree that the
provisions for payment of the Termination Amount are included herein in order to
reasonably induce Parent to enter into this Agreement and to reimburse Parent
for incurring the costs and expenses related to entering into this Agreement,
obtaining the Commitments and the Financing, and consummating the transactions
contemplated by this Agreement.
I-21
(e) AUTHORITY TO ACT. Notwithstanding the provisions of this Section 7.2,
the Termination Amount shall not be payable as a result of the termination of
this Agreement pursuant to the provisions of Section 7.1(e) if the Company's
breach giving rise to such right of termination resulted from the actions of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ taken in his capacity as an officer or director of the Company
other than in the ordinary course of business and not at the direction of or
with the authorization or approval of the Company's Board of Directors or the
Special Committee.
(f) COSTS OF ENFORCEMENT. Notwithstanding anything to the contrary set forth
in this Agreement, in the event Parent and/or Sub is required to file suit to
seek all or a portion of the Termination Amount, it shall be entitled, in
addition to payment of the Expenses, to payment by the Company of all additional
expenses, including reasonable attorneys' fees and expenses, which it incurs in
enforcing its rights hereunder.
SECTION 7.3. AMENDMENT. Subject to the applicable provisions of the MBCL, at
any time prior to the Effective Time, the parties hereto may modify or amend
this Agreement, by written agreement executed and delivered by duly authorized
officers of the respective parties; provided, however, that after approval of
the Merger by the stockholders of the Company, no amendment shall be made which
reduces the consideration payable in the Merger or adversely affects the rights
of the Company's stockholders hereunder without the approval of such
stockholders. This Agreement may not be amended except by an instrument in
writing' signed on behalf of each of the parties.
SECTION 7.4. EXTENSION; WAIVER. At any time prior to the Effective Time, the
parties may (a) extend the time for the performance of any of the obligations or
other acts of the other parties, (b) waive any inaccuracies in the
representations and warranties of the other parties contained in this Agreement
or in any document delivered pursuant to this Agreement or (c) subject to
Section 7.2, waive compliance with any of the agreements or conditions of the
other parties contained in this Agreement. Any agreement on the part of a party
to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. The failure of any party
to this Agreement to assert any of its rights under this Agreement or otherwise
shall not constitute a waiver of such rights.
SECTION 7.5. PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR WAIVER. A
termination of this Agreement pursuant to Section 7.1, an amendment of this
Agreement pursuant to Section 7.3, an extension or waiver pursuant to Section
7.4, or any other approval or consent required or permitted to be given pursuant
to this Agreement shall, in order to be effective and in addition to
requirements of applicable law, require, in the case of Parent, Sub or the
Company, action by its Board of Directors, a duly authorized committee thereof
(including, in the case of the Company, the Special Committee), or the duly
authorized designee of such Board of Directors or such committee thereof.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.1. NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations and warranties set forth in Article III of this Agreement or in
any instrument delivered pursuant to this Agreement shall survive the Effective
Time. This Section 8.1 shall not limit any covenant or agreement of the parties
which by its terms contemplates performance after the Effective Time, including,
without limitation, Section 5.7.
SECTION 8.2. FEES AND EXPENSES. Except as provided otherwise in this
Agreement, including, without limitation, in Sections 5.2, 5.11 and 7.2, whether
or not the Merger shall be consummated, each party
I-22
hereto shall pay its own expenses incident to preparing for, entering into and
carrying out this Agreement and the consummation of the transactions
contemplated hereby.
SECTION 8.3. DEFINITIONS. For purposes of this Agreement:
(a) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act;
(b) "person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity; and
(c) a "subsidiary" of any person means another person 50% of the equity
securities of which are owned directly or indirectly by such first person.
SECTION 8.4. NOTICES. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given when delivered personally or sent by overnight courier (providing proof of
delivery) or telecopy to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
(a) if to Parent or Sub, to: Ten Ideas, Inc.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
with a copy to: Posternak, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P.C.
(b) if to the Company, to: Bertucci's, Inc.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Board of Directors
with a copy to: ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
SECTION 8.5. INTERPRETATION. When a reference is made in this Agreement to a
Section or Schedule, such reference shall be to a Section of, or a Schedule to,
this Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation."
SECTION 8.6. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
SECTION 8.7. ENTIRE AGREEMENT; THIRD-PARTY BENEFICIARIES. This Agreement and
the other agreements referred to herein constitute the entire agreement, and
supersede all prior agreements and understandings,
I-23
both written and oral, among the parties with respect to the subject matter of
this Agreement. This Agreement is not intended to confer upon any person, other
than the parties hereto and the third party beneficiaries referred to in the
following sentence, any rights or remedies. The parties hereto expressly intend
the provisions of Section 5.6 to confer a benefit upon and be enforceable by, as
third party beneficiaries of this Agreement, the third persons referred to in,
or intended to be benefited by, such provisions.
SECTION 8.8. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Massachusetts,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
SECTION 8.9. ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by any of the parties without the prior
written consent of the other parties, and any such assignment that is not
consented to shall be null and void, except that Parent may assign this
Agreement (i) to any wholly owned subsidiary of Parent or (ii) together with all
of the outstanding capital stock of Sub, to an entity organized under the
corporate or limited liability laws of a jurisdiction of one of the United
States of America, the ownership interests of which entity are substantially
identical to the ownership interests of Parent immediately prior to such
assignment and which entity specifically and expressly assumes by written
agreement the obligations of Parent under this Agreement; in either case without
Parent being released from liability hereunder. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns.
SECTION 8.10. 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
(without requirement to post a bond) the terms and provisions of this Agreement,
this being in addition to any other remedy to which they are entitled at law or
in equity.
SECTION 8.11. SEVERABILITY. Whenever possible, each provision or portion of
any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
[Remainder of Page Intentionally Left Blank.]
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IN WITNESS WHEREOF, the Company, Parent and Sub have caused this Agreement
to be executed as an agreement under seal by their respective officers thereunto
duly authorized, all as of the date first written above.
BERTUCCI'S, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President-Finance, Treasurer and
Chief Financial Officer
TEN IDEAS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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President and Treasurer
TEN IDEAS ACQUISITION CORP.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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President and Treasurer
Agreed to solely as to the provisions of
Sections 1.8 and 5.1 hereof applicable to
the
undersigned:
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I-25