EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
dated
July 24, 2006
by and among
RYAN'S RESTAURANT GROUP, INC.,
BUFFETS, INC.
and
BUFFETS SOUTHEAST, INC.
TABLE OF CONTENTS
ARTICLE I THE MERGER 1
Section 1.1 The Merger 1
Section 1.2 The Closing 1
Section 1.3 Effective Time 2
Section 1.4 Effects of the Merger 2
Section 1.5 Organizational Documents 2
Section 1.6 Directors and Officers 2
Section 1.7 Conversion of Shares 2
Section 1.8 Company Options and Equity-Based
Awards 3
Section 1.9 Employee Stock Purchase Plan 5
Section 1.10 Adjustments 5
ARTICLE II PAYMENT 5
Section 2.1 Surrender of Certificates 5
Section 2.2 Paying Agent; Certificate Surrender
Procedures 5
Section 2.3 Transfer Books 6
Section 2.4 Termination of Payment Fund 7
Section 2.5 Lost Certificates 7
Section 2.6 No Rights as Stockholder 7
Section 2.7 Withholding 7
Section 2.8 Escheat 8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE
COMPANY 8
Section 3.1 Corporate Existence and Power 8
Section 3.2 Capitalization 9
Section 3.3 Authorization of Transaction 11
Section 3.4 Vote Required 12
Section 3.5 Noncontravention; Approvals 12
Section 3.6 Company Filings; Information in the
Proxy Statement 13
Section 3.7 No Undisclosed Liabilities 14
Section 3.8 Absence of Company Material Adverse
Effect 14
Section 3.9 Litigation and Legal Compliance 15
Section 3.10 Contract Matters 15
Section 3.11 Tax Matters 17
Section 3.12 Employee Benefit Matters 19
Section 3.13 Environmental Matters 21
Section 3.14 Real Estate 22
Section 3.15 Intellectual Property Matters 24
Section 3.16 Labor Matters 26
Section 3.17 Amendment to the Rights Agreement 27
Section 3.18 Takeover Laws 27
Section 3.19 Insurance 28
Section 3.20 Brokers' Fees 28
Section 3.21 Opinion of Financial Advisor 28
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PARENT
AND THE MERGER SUBSIDIARY 29
Section 4.1 Corporate Existence and Power 29
Section 4.2 Authorization of Transaction; Non-
Contravention; Approvals 29
Section 4.3 Financing Capability 30
Section 4.4 Information in the Proxy Statement 31
Section 4.5 Litigation 31
Section 4.6 Brokers' and Finders' Fees 31
ARTICLE V COVENANTS 31
Section 5.1 General 31
Section 5.2 Further Assurances 31
Section 5.3 Interim Conduct of the Company 32
Section 5.4 Control of Operations 35
Section 5.5 Proxy Statement; Company Stockholders
Meeting 35
Section 5.6 Financing 37
Section 5.7 Additional Reports 39
Section 5.8 Acquisition Proposals 39
Section 5.9 Indemnification 42
Section 5.10 Public Announcements 43
Section 5.11 Full Access 43
Section 5.12 Actions Regarding Anti-takeover
Statutes 44
Section 5.13 Continued Benefit Plans 44
Section 5.14 Standstill Provisions 44
Section 5.15 Notification of Certain Matters;
Supplemental Disclosure 44
Section 5.16 Nonqualified Excess Plans 45
Section 5.17 Title Insurance 45
Section 5.18 Surveys 45
ARTICLE VI CONDITIONS TO THE CONSUMMATION OF THE MERGER 46
Section 6.1 Conditions to the Obligations of Each
Party 46
Section 6.2 Conditions to the Obligation of the
Company 46
Section 6.3 Conditions to the Obligation of the
Parent and the Merger Subsidiary 47
Section 6.4 Frustration of Closing Conditions 47
ARTICLE VII TERMINATION 48
Section 7.1 Termination 48
Section 7.2 Effect of Termination 50
Section 7.3 Fees and Expenses 50
Section 7.4 Other Company Termination Fee and
Expense Reimbursement Matters 51
Section 7.5 Parent Termination Fee. 52
ARTICLE VIII MISCELLANEOUS 52
Section 8.1 Nonsurvival of Representations 52
Section 8.2 Specific Performance 53
Section 8.3 Successors and Assigns 53
Section 8.4 Amendment 53
Section 8.5 Severability 53
Section 8.6 Extension of Time; Waiver 53
Section 8.7 Counterparts 53
Section 8.8 Descriptive Headings 54
Section 8.9 Notices 54
Section 8.10 No Third-Party Beneficiaries 55
Section 8.11 Entire Agreement 55
Section 8.12 Construction 55
Section 8.13 Governing Law 56
EXHIBITS
Exhibit A - Form of Surviving Corporation Articles of
Incorporation
Exhibit B - Form of Surviving Corporation Bylaws
TABLE OF DEFINED TERMS
Defined Term Section
Acquisition Proposal Section 5.8(g)
Affiliate Section 5.2
Agreement Preamble
Agreement Date Preamble
Antitrust Laws Section 3.5
Articles of Merger Section 1.3
Brookwood Engagement Letter Section 3.20
Certificate Section 2.1
Closing Section 1.2
Closing Date Section 1.2
Code Section 2.7
Commitment Letters Section 4.3(a)
Company Preamble
Company Common Stock Recitals
Company Intellectual Property Section 3.15(a)
Company Material Adverse Effect Section 3.1(b)
Company Material Agreements Section 3.10(a)
Company Options Section 1.8(a)
Company Plans. Section 3.12(a)
Company Recommendation Section 5.5(a)
Company Representatives Section 5.6(c)
Company SEC Documents Section 3.6(a)
Company Stock Plans Section 1.8(a)
Company Stockholders Section 3.21
Company Stockholders Approval Section 3.4
Company Stockholders Meeting Section 5.5(a)
Confidentiality Agreement Section 5.8(b)
Construction Projects Section 3.14(i)
Continuing Employees Section 5.13
Drawbridge Section 4.3(a)
Effective Time. Section 1.3
Employee Pension Benefit Plan. Section 3.12(a)
Employee Welfare Benefit Plan Section 3.12(a)
Environmental Laws Section 3.13(b)
ERISA Section 3.12(a)
ERISA Affiliate Section 3.12(c)
ESPP Section 1.9
Exchange Act Section 1.8(a)
Expense Reimbursement Section 7.3(b)
Financial Statements Section 3.6(b)
Financing Section 4.3(a)
Financing Agreements Section 5.6(a)
GAAP Section 3.6(b)
Governmental Authority Section 3.5
Hazardous Substance Section 3.13(c)
HSR Act Section 3.5
Indemnified Parties Section 5.9(a)
Intellectual Property Section 3.15(a)
IP Licenses Section 3.15(a)
Laws Section 3.9(b)
Leased Real Property Section 3.14(b)
Lien Section 3.2(e)
Material Adverse Effect Section 3.1(b)
Merger Section 1.1
Merger Consideration Section 1.7(a)
Merger Subsidiary Preamble
Nonqualified Excess Plan Section 5.16
Option Consideration Section 1.8(b)
Owned Real Property Section 3.14(a)
Parent Preamble
Parent Material Adverse Effect Section 4.1
Paying Agent Section 2.2(a)
Payment Fund Section 2.2(b)
Permitted Leased Real Property Exceptions Section 3.14(b)
Permitted Lien Section 3.14(a)
Person Section 3.1(b)
Proxy Statement Section 3.6(f)
Real Property. Section 3.14(c)
Real Property Leases Section 3.14(b)
Rights Agreement Section 3.17
SCBA Section 1.1
SC Code Section 3.3(c)
SEC Section 5.6(e)
Securities Act Section 3.6(a)
Share Section 1.7(a)
Shares Section 1.7(a)
Software Section 3.15(a)
SOXA Section 3.6(a)
Space Leases Section 3.14(d)
Structures Section 3.14(f)
Subsidiary Section 1.7(b)
Superior Proposal Section 5.8(h)
Surviving Corporation Section 1.1
Tax Section 3.11(c)
Taxes Section 3.11(c)
Tax Returns Section 3.11(a)
Trade Secrets Section 3.15(a)
Vested Options Section 1.8(a)
WARN Section 3.16
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"),
dated July 24, 2006 (the "Agreement Date"), by and among
RYAN'S RESTAURANT GROUP, INC., a South Carolina corporation
(the "Company"), BUFFETS, INC., a Minnesota corporation (the
"Parent"), and BUFFETS SOUTHEAST, INC., a South Carolina
corporation and a wholly-owned subsidiary of the Parent (the
"Merger Subsidiary").
BACKGROUND
WHEREAS, the Board of Directors of each of the
Parent, the Merger Subsidiary and the Company deem it
advisable and in the best interests of their respective
companies and stockholders to consummate the merger of the
Merger Subsidiary with and into the Company, upon the terms
and subject to the conditions set forth herein, and have
unanimously adopted resolutions adopting, approving and
declaring the advisability of this Agreement, the Merger and
the other transactions contemplated herein.
WHEREAS, pursuant to the Merger, shares of the
Company's common stock, par value $1.00 per share (the
"Company Common Stock"), shall be, except as otherwise
provided herein, converted into the right to receive the
Merger Consideration in the manner set forth herein, and the
Company shall become a wholly-owned subsidiary of the
Parent.
NOW, THEREFORE, in consideration of the mutual
agreements contained in this Agreement, and for other good
and valuable consideration, the value, receipt and
sufficiency of which are acknowledged, the parties agree as
follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger
. Subject to the terms and conditions
of this Agreement, at the Effective Time the Merger
Subsidiary shall be merged with and into the Company (the
"Merger") in accordance with the provisions of the South
Carolina Business Corporation Act of 1988, as amended (the
"SCBA"). Following the Merger, the Company shall continue
as the surviving corporation (the "Surviving Corporation")
and the separate corporate existence of the Merger
Subsidiary shall cease. As a result of the Merger, the
Surviving Corporation shall become a wholly-owned subsidiary
of the Parent.
Section 1.2 The Closing
. Unless this Agreement has been
terminated pursuant to Section 7.1, the closing of the
Merger (the "Closing") shall take place on a date no later
than the third business day following satisfaction or waiver
of the conditions set forth in Article VI (the "Closing
Date"), at the New York offices of ▇▇▇▇, Weiss, Rifkind,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP, unless another date or place is
agreed to in writing by the parties.
Section 1.3 Effective Time
. Upon the terms and subject to the
satisfaction or waiver of the conditions of this Agreement,
at the Closing (or at such other time as the parties may
agree) the Company and the Merger Subsidiary shall
(a) execute and file with the South Carolina Secretary of
State appropriate articles of merger (the "Articles of
Merger") in accordance with Section ▇▇-▇▇-▇▇▇ of the SCBA
and (b) make all other filings or recordings required by the
SCBA in connection with the Merger. The Merger shall be
consummated upon the filing of the Articles of Merger with
the South Carolina Secretary of State or such later time as
is agreed upon by the parties and specified in the Articles
of Merger. The time the Merger becomes effective in
accordance with the SCBA is referred to in this Agreement as
the "Effective Time."
Section 1.4 Effects of the Merger
. The Merger shall have the effects set
forth in this Agreement and the relevant provisions of the
SCBA.
Section 1.5 Organizational Documents
. At the Effective Time, and without
any further action on the part of any Person, the articles
of incorporation and bylaws of the Company shall be amended
in their entirety to read as set forth on Exhibits A and B,
respectively, and thereby shall become the articles of
incorporation and bylaws of the Surviving Corporation until
thereafter amended in accordance with their respective terms
and the SCBA.
Section 1.6 Directors and Officers
. The directors and the officers of the
Merger Subsidiary immediately before the Effective Time
shall at the Effective Time become the directors and
officers of the Surviving Corporation and shall hold office
from the Effective Time in accordance with the articles of
incorporation and bylaws of the Surviving Corporation until
their respective successors are duly elected or appointed
and qualified or until their earlier death, resignation or
removal.
Section 1.7 Conversion of Shares
. As of the Effective Time, by virtue
of the Merger and without any action on the part of the
Company, the Parent or the Merger Subsidiary or their
respective stockholders:
(a) each share of Company Common Stock (a "Share" and
collectively, the "Shares"), other than Shares to be
canceled in accordance with subsection (b) below, issued and
outstanding immediately prior to the Effective Time shall be
converted into the right to receive $16.25 in cash, without
interest (the "Merger Consideration"), payable to the holder
thereof upon surrender of the Certificate formerly
representing such Share in the manner provided in
Section 2.2. All such Shares, when so converted, shall no
longer be outstanding and shall automatically be canceled
and shall cease to exist, and each holder of a Certificate
shall cease to have any rights with respect to such Shares,
except the right to receive the Merger Consideration,
without interest, upon the surrender of such Certificate in
accordance with Section 2.2;
(b) each Share owned immediately prior to the Effective
Time by the Company, the Parent, the Merger Subsidiary or
any of their respective Subsidiaries, shall be canceled and
extinguished and no consideration shall be delivered in
exchange therefor. For purposes of this Section 1.7(b),
Company Common Stock owned beneficially or held of record by
any plan, program or arrangement sponsored or maintained for
the benefit of any current or former employee of the
Company, the Parent, the Merger Subsidiary or any of their
respective Subsidiaries, shall not be deemed to be held by
the Company, the Parent, the Merger Subsidiary or any such
Subsidiary, regardless of whether the Company, the Parent,
the Merger Subsidiary or any such Subsidiary has the power,
directly or indirectly, to vote or control the disposition
of such shares. For purposes of this Agreement, the term
"Subsidiary" means, with respect to any Person, any other
Person fifty percent (50%) or more of the outstanding voting
ownership securities of which (or if there are no such
voting interests, fifty percent (50%) or more of the equity
interests of which) are owned, directly or indirectly, by
such first Person; and
(c) Section 1.7 of the Company Disclosure Letter sets forth
by employee each Share that is pledged (or held in escrow)
and any outstanding loan or indebtedness (including the
principal balance and interest) whether to the Company or
third party lender in connection with the Company's
Operating Partner and District Partner programs, as of the
Agreement Date, which list shall be updated 2 business days
prior to the Effective Time. Notwithstanding the foregoing,
in the case of any employee who has pledged Shares purchased
by such employee in connection with the Company's Operating
Partner or District Partner programs as collateral for any
outstanding loan or indebtedness (whether to the Company or
otherwise), the aggregate Merger Consideration, after
applicable withholding Taxes (as set forth in Section 2.7),
shall be applied by the Surviving Corporation to the
repayment of such loan or indebtedness, and the employee
shall be entitled to receive any remaining Merger
Consideration following such repayment; and
(d) each share of common stock, par value $0.01 per share,
of the Merger Subsidiary issued and outstanding immediately
prior to the Effective Time will, by virtue of the Merger
and without any action on the part of the holder thereof, be
converted into one share of common stock, par value $0.01
per share, of the Surviving Corporation and shall constitute
the only outstanding shares of capital stock of the
Surviving Corporation.
Section 1.8 Company Options and Equity-Based Awards.
(a) As soon as practicable following the Agreement Date,
the Company shall take such actions as shall be required:
(i) to effectuate the cancellation of any outstanding but
unvested options ("Unvested Options") and vested options
("Vested Options", which term shall include any option that
would vest under its applicable Company Stock Plan (defined
below) as a consequence of the transaction contemplated by
this Agreement) to purchase shares of Company Common Stock
(collectively, the "Company Options") granted pursuant to
the Ryan's Family Steak Houses, Inc. 1987 Stock Option Plan,
the Ryan's Family Steak Houses, Inc. 1991 Stock Option Plan,
the Ryan's Family Steak Houses, Inc. 1998 Stock Option Plan
and the Ryan's Family Steak Houses, Inc. 2002 Stock Option
Plan (or any other stock option plan, program, agreement or
arrangement of the Company and its Subsidiaries
(collectively, the "Company Stock Plans")), as of the
Effective Time and to cause all Company Options to no longer
represent the right to purchase Company Common Stock or any
other equity security of the Company, the Parent, the
Surviving Corporation or any other Person; (ii) to cause,
pursuant to the Company Stock Plans, each outstanding Vested
Option to represent as of the Effective Time solely the
right to receive, in accordance with this Section 1.8, a
lump sum cash payment in the amount of the Option
Consideration, if any, with respect to such Vested Option,
and each Unvested Option shall be canceled and forfeited
without the receipt of any consideration; and (iv) to cause
the transactions contemplated by this section to be exempt
from the provisions of Section 16(b) of the Securities
Exchange Act of 1934, as amended (together with the rules
and regulations promulgated thereunder, the "Exchange Act").
(b) Parent shall cause the Surviving Corporation to pay to
each holder of a Vested Option, in respect and in
consideration of each Vested Option so cancelled, as soon as
practicable following the Effective Time (but in any event
not later than five (5) business days after the Effective
Time), an amount equal to the product of (i) the excess, if
any, of (A) the Merger Consideration over (B) the exercise
price per share of Company Common Stock subject to such
Vested Option, multiplied by (ii) the total number of shares
of Company Common Stock issuable upon exercise of such
Vested Option (whether or not then vested or exercisable),
without any interest thereon (the "Option Consideration").
(c) As soon as practicable following the execution of this
Agreement, the Company shall mail to each person who is a
holder of Company Options a letter describing the treatment
of and payment (if such option is a Vested Option) for such
Company Options pursuant to this Section 1.8 and providing
instructions for obtaining payment for such Vested Options.
The Parent shall at all times from and after the Effective
Time cause the Surviving Corporation to maintain sufficient
liquid funds to satisfy its obligations to holders of Vested
Options pursuant to this Section 1.8.
(d) As of the Effective Time, the Company Stock Plans shall
terminate and all rights under any provision of any other
plan, program or arrangement providing for the issuance or
grant of any other interest in respect of the capital stock
of the Company shall be canceled. At and after the
Effective Time, no Person shall have any right under the
Company Options, the Company Stock Plans or any other plan,
program or arrangement with respect to equity securities of
the Surviving Corporation or any Subsidiary thereof, except
the right to receive the amount payable under this
Section 1.8.
(e) No additional Company Options or other equity-based
awards or other rights to acquire Company Common Stock shall
be granted pursuant to the Company Stock Plans or otherwise
after the Agreement Date.
(f) The Board of Directors of the Company shall adopt such
resolutions or take such other actions as may be required or
appropriate such that, upon the Effective Time, each Company
Option and Company Stock Plan is treated in accordance with
this Section 1.8.
Section 1.9 Employee Stock Purchase Plan.
As soon as practicable following the
Agreement Date, the Board of Directors of the Company (or if
appropriate, any committee of the Board of Directors of the
Company administering the Employee Stock Purchase Plan (the
"ESPP")) shall adopt such resolutions or take such other
actions as may be required to provide that (i) participants
may not increase their payroll deductions or purchase
elections from those in effect as of the Agreement Date,
(ii) no offering period shall commence after the Agreement
Date, (iii) each participant's outstanding right to purchase
shares of Company Common Stock under the ESPP shall
terminate on the day immediately following the Agreement
Date, provided that all amounts allocated to each
participant's account under the ESPP as of such date shall
thereupon be used to purchase whole shares of Company Common
Stock at the applicable price determined under the ESPP for
then outstanding offering periods using such date as the
final purchase date for each offering period and (iv) the
ESPP shall terminate immediately following the purchases of
Company Common Stock on the day prior to the day on which
the Effective Time occurs.
Section 1.10 Adjustments.
In the event of any stock split,
reverse stock split, stock dividend (including any dividend
or distribution of securities convertible into capital
stock), reorganization, reclassification, combination,
recapitalization, exchange, readjustment or other like
change with respect to the Company Common Stock occurring
after the Agreement Date and prior to the Effective Time,
all references in this Agreement to specified numbers of
shares of any class or series affected thereby, and all
calculations provided for that are based upon numbers of
shares of any class or series affected thereby, shall be
adjusted to the extent necessary to provide the parties the
same economic effect as contemplated by this Agreement prior
to such stock split, reverse stock split, stock dividend,
reorganization, reclassification, combination,
recapitalization, exchange, readjustment or other like
change.
ARTICLE II
PAYMENT
Section 2.1 Surrender of Certificates.
From and after the Effective Time,
each holder of a certificate that immediately prior to the
Effective Time represented an outstanding Share (a
"Certificate") shall be entitled to receive in exchange
therefor, upon surrender thereof to the Paying Agent, the
Merger Consideration into which the Shares formerly
evidenced by such Certificate were converted into the right
to receive pursuant to the Merger. No interest shall be
payable on the Merger Consideration to be paid to any holder
of a Certificate irrespective of the time at which such
Certificate is surrendered for exchange.
Section 2.2 Paying Agent; Certificate Surrender
Procedures.
(a) Prior to the Effective Time, the Parent (with the
approval of the Company, not to be unreasonably conditioned,
withheld or delayed) shall designate, or shall cause to be
designated, a bank or trust company based in the United
States, to act as agent for the payment of the Merger
Consideration upon surrender of Certificates (the "Paying
Agent").
(b) Immediately prior to the Effective Time, the Parent
shall deposit, or cause to be deposited, with the Paying
Agent, an amount in cash sufficient to provide all funds
necessary for the Paying Agent to make payment of the
aggregate Merger Consideration payable pursuant to
Section 1.7 (the "Payment Fund"). For purposes of
determining the amount of Merger Consideration to be so
deposited, the Parent and the Merger Subsidiary shall assume
that no holder of Company Common Stock shall perfect any
right to dissent from the Merger and obtain payment for his,
her or its Company Common Stock pursuant to Chapter 13 of
the SCBA. Pending payment of such funds to the holders of
Certificates, the Payment Fund shall be held and may be
invested by the Paying Agent pursuant to the terms of the
agreement entered into between the Parent and the Paying
Agent. The Parent shall replenish the Payment Fund to the
extent of any investment losses any monies lost through any
investment made pursuant to this subsection (b).
(c) As soon as reasonably practicable, and in any event not
later than three (3) business days after the Effective Time,
the Parent shall instruct the Paying Agent to mail to each
record holder of a Certificate (i) a letter of transmittal
(which shall specify that delivery shall be effected, and
risk of loss and title to such Certificates shall pass, only
upon delivery of the Certificates to the Paying Agent and
shall be in customary form) and (ii) instructions for use in
effecting the surrender of Certificates for the Merger
Consideration. Upon the surrender to the Paying Agent of a
Certificate together with a duly executed and completed
letter of transmittal and all other documents and other
materials required by the Paying Agent to be delivered in
connection therewith, the holder shall be entitled to
receive promptly in exchange therefor the Merger
Consideration into which the Shares formerly represented by
such Certificates so surrendered have been converted into
the right to receive in accordance with the provisions of
this Agreement and the Certificates so surrendered shall
forthwith be canceled. If payment of the Merger
Consideration is to be made to a Person other than the
Person in whose name the surrendered Certificate is
registered, it shall be a condition precedent of payment
that (i) the Certificate so surrendered shall be properly
endorsed or shall be otherwise in proper form for transfer
and (ii) the Person requesting such payment shall have paid
any transfer and other Taxes required by reason of the
payment of the Merger Consideration to a Person other than
the registered holder of the Certificate surrendered or
shall have established to the satisfaction of the Surviving
Corporation that such Tax either has been paid or is not
required to be paid. Until so surrendered, each outstanding
Certificate shall be deemed from and after the Effective
Time, for all corporate purposes, to evidence the right to
receive the Merger Consideration without interest thereon,
into which the Shares represented by such Certificate have
been converted into the right to receive in accordance with
the provisions of this Agreement.
Section 2.3 Transfer Books.
The stock transfer books of the
Company shall be closed at the Effective Time, and no
transfer of any shares of Company Common Stock shall
thereafter be recorded on any of the stock transfer books.
In the event of a transfer of ownership of any shares of
Company Common Stock prior to the Effective Time that is not
registered in the stock transfer records of the Company at
the Effective Time, the Merger Consideration into which such
Company Common Stock has been converted into the right to
receive in the Merger shall be paid to the transferee in
accordance with the provisions of Section 2.2 only if the
Certificate is surrendered as provided in Section 2.2 and
accompanied by all documents required to evidence and effect
such transfer (including evidence of payment of any
applicable stock transfer taxes).
Section 2.4 Termination of Payment Fund.
Any portion of the Payment Fund
(including any interest received with respect thereto) that
remains undistributed one hundred eighty (180) days after
the Effective Time shall be delivered to the Parent upon
demand, and each holder of Company Common Stock as of the
Effective Time who has not previously surrendered
Certificates in accordance with the provisions of this
Article II shall thereafter look only to the Parent (subject
to abandoned property, escheat or similar laws) as general
creditors thereof with respect to the Merger Consideration
payable upon due surrender of their Certificates or
affidavits of loss in lieu thereof, without any interest
thereon.
Section 2.5 Lost Certificates.
If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit
(in form and substance reasonably acceptable to the Parent)
of that fact by the Person making such a claim, and, if
required by the Parent, the posting by such Person of a bond
in such reasonable amount as the Parent may direct as
indemnity against any claim that may be made against or with
respect to such Certificate, the Paying Agent shall pay the
Merger Consideration in respect of each Share represented by
such lost, stolen or destroyed Certificate.
Section 2.6 No Rights as Stockholder.
From and after the Effective Time,
the holders of Certificates shall cease to have any rights
as a stockholder of the Surviving Corporation except as
otherwise expressly provided in this Agreement or by
applicable Laws, and the Parent shall be entitled to treat
each Certificate that has not yet been surrendered for
exchange solely as evidence of the right to receive the
Merger Consideration into which the Company Common Stock
evidenced by such Certificate has been converted pursuant to
the Merger.
Section 2.7 Withholding.
Each of the Parent, the Merger
Subsidiary, the Surviving Corporation and the Paying Agent
shall be entitled to deduct and withhold from the Merger
Consideration and/or Option Consideration payable to any
former holder of Company Common Stock and Company Options,
or pursuant to Sections 1.8 and 1.9, all amounts required to
be deducted or withheld therefrom by the Internal Revenue
Code of 1986, as amended (the "Code"), or other applicable
state, local or foreign tax Laws. To the extent that
amounts are so deducted and withheld and paid to the
appropriate Governmental Authority, such amounts shall be
treated for all purposes of this Agreement as having been
paid to the holder thereof in respect of which such
deduction and withholding was made by the Parent or the
Surviving Corporation. All payments to any Governmental
Authority required to be made in connection with the
withholding Taxes as described in this Section 2.7 shall be
paid to the relevant Governmental Authority through the
withholding tax payment systems of the Surviving
Corporation.
Section 2.8 Escheat.
Neither the Parent, the Merger
Subsidiary nor the Company shall be liable to any former
holder of Company Common Stock for any portion of the Merger
Consideration delivered to any public official pursuant to
any applicable abandoned property, escheat or similar Law.
In the event any Certificate has not been surrendered for
the Merger Consideration prior to the sixth anniversary of
the Closing Date, or prior to such earlier date as of which
such Certificate or the Merger Consideration payable upon
the surrender thereof would otherwise escheat to or become
the property of any Governmental Authority, then the Merger
Consideration otherwise payable upon the surrender of such
Certificate will, to the extent permitted by applicable
Laws, become the property of the Surviving Corporation, free
and clear of all rights, interests and adverse claims of any
person.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except (i) with respect to Sections 3.7 through
3.16 and Section 3.19, as disclosed in any report, schedule,
form, statement or other document filed with, or furnished
to, the Securities and Exchange Commission (the "SEC") by
the Company and publicly available at least two (2) business
days prior to the date of this Agreement and, for the
avoidance of doubt, without giving effect to any change of
fact or circumstance subsequent to the date such document
was filed or furnished, or (ii) as set forth in the letter
dated the Agreement Date from the Company to the Parent (the
"Company Disclosure Letter") (it being understood that any
information set forth in one section or subsection of the
Company Disclosure Letter shall be deemed to apply to and
qualify the section or subsection of this Agreement to which
it corresponds in number and each other section or
subsection of this Agreement to the extent that it is
reasonably apparent on its face that such information is
relevant to such other section or subsection), the Company
represents and warrants to the Parent and Merger Subsidiary
that:
Section 3.1 Corporate Existence and Power.
(a) Each of the Company and its Subsidiaries is a
corporation or limited liability company duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, and has
all requisite corporate or limited liability company power
and authority to own, lease and operate its properties and
assets and to carry on its business as presently being
conducted, except when the failure to be in good standing or
have such power and authority, individually or in the
aggregate, would not reasonably be expected to have a
Company Material Adverse Effect. Each of the Company and
its Subsidiaries is duly qualified or licensed to conduct
business and is in good standing in each jurisdiction in
which the properties owned, leased or operated by it or the
nature of the business conducted by it makes such
qualification or license necessary, except where the failure
to be so qualified or licensed and in good standing
individually or in the aggregate, would not reasonably be
expected to have a Company Material Adverse Effect. The
Company has made available to the Parent or its counsel,
true, correct and complete copies of the charter and bylaws
or other equivalent organizational documents, as applicable
of each of the Company and its Subsidiaries, in each case as
amended and in effect on the Agreement Date. Neither the
Company nor any of its Subsidiaries is in violation of any
of the provisions of its charter or bylaws or equivalent
organizational documents.
(b) For the purposes of this Agreement, "Company Material
Adverse Effect" means a Material Adverse Effect with respect
to the Company and "Material Adverse Effect" means any
event, circumstance, condition, change, development or
effect that, individually or in the aggregate with all other
events, circumstances, conditions, changes, developments or
effects, would have a material adverse effect on the
business, financial condition, assets, liabilities,
operations or results of operations of a Person and its
Subsidiaries taken as a whole, or the ability of a Person to
consummate the Merger and to perform its obligations under
this Agreement. For purposes of this Agreement, "Person"
means an individual, a corporation, a limited liability
company, a partnership, a joint venture, an association, a
trust, an unincorporated organization or any other entity or
organization, including any Governmental Authority.
Notwithstanding the foregoing, a Company Material Adverse
Effect shall not include any event, circumstance, condition,
change, development or effect (i) relating to financial,
credit or securities markets or economic conditions in
general; (ii) relating to changes in Law or applicable
accounting regulations or principles or interpretations
thereof, to the extent such event, circumstances, condition,
change, development or effect described in this clause (ii)
does not materially, disproportionately impact the Company
and its Subsidiaries taken as a whole relative to other
companies operating in the restaurant industry; (iii)
relating to the restaurant industry generally, to the extent
such event, circumstance, condition, change, development or
effect described in this clause (iii) does not materially,
disproportionately impact the Company and its Subsidiaries
taken as a whole relative to other companies operating in
such industry; (iv) consisting of any change in the Company
Common Stock price or trading volume, in and of itself, or
any failure, in and of itself, by the Company to meet
revenue or earnings projections (it being understood that
the facts or occurrences giving rise to or contributing to
such change in the Company Common Stock price, trading
volume or failure to meet revenue or earnings projections
may be taken into account in determining whether there has
been a Company Material Adverse Effect); (v) relating to the
announcement of this Agreement (including any termination
of, reduction in or similar negative impact on relationships
with any suppliers, distributors or employees of the Company
and its Subsidiaries, to the extent such change or effect
was due to the identity of Parent or its Affiliates) and the
transactions contemplated hereby and performance of and
compliance with the terms of this Agreement.
Notwithstanding the foregoing, any occurrence of any food
borne illness at any restaurant owned or operated by the
Company that results in death or serious bodily injury which
would reasonably be expected to cause the consolidated
earnings before income taxes of the Company to decline by
more than 10% over a period of at least one year shall be
deemed to have had a Company Material Adverse Effect.
Section 3.2 Capitalization.
(a) The authorized capital stock of the Company
consists of
One Hundred Million (100,000,000) shares of Company Common
Stock. As of the close of business on July 21, 2006,
42,325,415.38 shares of Company Common Stock were issued and
outstanding and 2,896,347 shares were reserved for issuance
pursuant to the Company Stock Plans. All of the issued and
outstanding shares of the capital stock of the Company are,
and all shares which may be issued pursuant to the exercise
of the Company Options or pursuant to the Company Stock
Plans shall be, when issued in accordance with the
respective terms thereof, duly authorized, validly issued,
fully paid and non-assessable and not subject to or issued
in violation of any purchase option, call option, right of
first refusal, preemptive right, subscription right or any
similar right under any provision of the SCBA, the Company's
articles of incorporation or bylaws or any contract or
commitment to which the Company is a party or otherwise
bound and (ii) issued in compliance with all applicable
Laws, including federal and state securities Laws and all
requirements set forth in applicable contracts governing the
issuance of such Company Options. The Company has granted
no Company Options outside of the Company Stock Plans.
(b) There are no outstanding or authorized options, calls,
warrants, subscription rights, convertible securities,
conversion rights, exchange rights or other contracts,
agreements or commitments that could require the Company or
any of its Subsidiaries to issue, transfer, sell or
otherwise cause to become outstanding any of its capital
stock or other securities. There are no outstanding stock
appreciation, phantom stock, profit participation or similar
rights with respect to the Company or any of its
Subsidiaries or other equity interest in the Company or any
of its Subsidiaries, or securities convertible into or
exchangeable for such shares or equity interests. The
Company Disclosure Letter sets forth a list of all
outstanding Company Options and any other awards, the plan
under which the options or other awards were granted, as
well as the respective exercise prices, dates of grant and
vesting schedules thereof. Except as set forth in
Article I, the Company is not party to or bound by any
obligation to accelerate the vesting of any Company Options.
(c) Neither the Company nor any of its Subsidiaries is a
party to, bound by, or has knowledge of, any voting trust,
proxy or other agreement or understanding with respect to
the voting of any capital stock of the Company or any of its
Subsidiaries.
(d) The Board of Directors of the Company has not declared
any dividend or distribution with respect to the Company
Common Stock the record or payment date for which is on or
after the Agreement Date.
(e) Other than with respect to the Subsidiaries listed on
Section 3.2(e) of the Company Disclosure Letter, the Company
does not directly or indirectly own any securities or
beneficial ownership interests in any other Person
(including through joint ventures or partnership
arrangements) or have any investment in any other Person.
All of the outstanding shares of capital stock of the
Company's Subsidiaries that are owned by the Company are
duly authorized, validly issued, fully paid and non-
assessable and not subject to or issued in violation of any
purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar right
under any provision of the Laws applicable to such
Subsidiary in such Subsidiary's state of incorporation, such
Subsidiary's articles of incorporation or bylaws (or the
equivalent thereof) or any contract or commitment to which
such Subsidiary is a party or otherwise bound, and
(ii) issued in compliance with all applicable Laws,
including federal and state securities laws, and are owned
by the Company or one of its Subsidiaries, free and clear of
any and all Liens. For purposes of this Agreement, "Lien"
means any lien, pledge, mortgage, deed of trust, security
interest, claim, community property interest, equitable
interest, lease, license, charge, option, right of first
refusal, easement, servitude, restrictive covenant, right of
way, encroachment or other survey defect, title defect,
encumbrance, including any restriction on use, voting,
transfer, receipt of income or exercise of any other
attribution of ownership or other restriction or limitation
whatsoever.
(f) As of the Agreement Date, (i) no bonds, debentures,
notes or other indebtedness of the Company having the right
to vote are issued or outstanding, and (ii) there are no
outstanding contractual obligations of the Company or any of
its Subsidiaries to repurchase, redeem or otherwise acquire
any shares of capital stock of the Company or any of its
Subsidiaries.
(g) The Company Common Stock is listed for quotation on the
NASDAQ National Market. No other securities of the Company
or any of its Subsidiaries are listed or quoted for trading
on any United States domestic or foreign securities
exchange.
(h) Holders of Company Common Stock are not entitled to
dissenters' rights under Chapter 13 of the SCBA.
Section 3.3 Authorization of Transaction.
(a) The Company has full corporate power and authority
and has taken all requisite corporate action to enable it to
execute and deliver this Agreement, and, subject to
obtaining the Company Stockholders Approval, to enter into
this Agreement and to consummate the transactions
contemplated hereby and to perform its obligations
hereunder. This Agreement has been duly authorized,
executed and delivered by the Company and, assuming the due
authorization, execution and delivery thereof by the Parent
and the Merger Subsidiary, constitutes a valid and legally
binding agreement of the Company enforceable against the
Company in accordance with its terms, except that (i) such
enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer
or similar Laws of general applicability relating to or
affecting enforcement of creditors' rights generally and
(ii) 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.
(b) In connection with its adoption of the resolutions of
the Board of Directors of the Company described in the
Preamble to this Agreement, the Board of Directors of the
Company received the opinion of Brookwood referenced in
Section 3.21.
(c) The Company has taken all action required to be taken
by it in order to exempt this Agreement and the transactions
contemplated hereby from, and this Agreement, and the
transactions contemplated hereby are exempt from, the
requirements of any "moratorium," "control share," "fair
price," "affiliate transaction," "business combination" or
other anti takeover Laws of the State of South Carolina,
including Chapter 2 of Title 35 of the 1976 Code of Laws of
South Carolina, as amended (the "SC Code"). The Company has
taken all action required to be taken by it in order to make
this Agreement and the transactions contemplated hereby
comply with, and this Agreement, and the transactions
contemplated hereby do comply with, the requirements of any
articles, sections or provisions of its articles of
incorporation and bylaws concerning "business combination,"
"fair price," "voting requirement," "constituency
requirement" or other related provisions.
Section 3.4 Vote Required.
The affirmative vote of the holders
of two-thirds of the outstanding shares of Company Common
Stock (the "Company Stockholders Approval") is the only vote
of the holders of any class or series of the Company's
capital stock necessary to adopt this Agreement and approve
the Merger and the consummation of the transactions
contemplated hereby.
Section 3.5 Noncontravention; Approvals.
Except for (a) filings and approvals
necessary to comply with the applicable requirements of the
Exchange Act, (b) filings pursuant to the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and any other applicable competition, merger control,
antitrust or similar laws or regulations (collectively with
the HSR Act, the "Antitrust Laws"), (c) the Company
Stockholders Approval and the filing of the Articles of
Merger pursuant to the SCBA, and any similar certificates or
filings to be made pursuant to the corporation laws of other
jurisdictions in which the Company or any of its
Subsidiaries is qualified to do business, and (d) any
filings required under the rules and regulations of the
NASDAQ National Market, neither the execution and delivery
of this Agreement by the Company, nor the consummation by
the Company of the transactions contemplated hereby, shall
(i) violate or conflict with any provision of the articles
of incorporation or bylaws of the Company or the equivalent
organizational documents of any of its Subsidiaries,
(ii) result in a violation or breach of, be in conflict
with, or constitute or create (with or without due notice or
lapse of time or both) a default (or give rise to any right
of termination, cancellation or acceleration) under any of
the terms, conditions or provisions of any Company Material
Agreement, (iii) violate any Laws applicable to the Company,
any of its Subsidiaries or any of their properties or
assets, (iv) require any filing or registration with,
notification to, or authorization, consent or approval of,
any government or any agency, bureau, board, commission,
court, department, official, political subdivision, tribunal
or other instrumentality of any government with appropriate
jurisdiction over the Company, any of its Subsidiaries or
their respective properties or assets, whether federal,
state or local, domestic or foreign (each a "Governmental
Authority") or (v) result in the creation or imposition of
any Lien on any of the property or assets of the Company or
any of its Subsidiaries; except in the case of clauses (ii),
(iii), (iv), and (v) for such violations, breaches, defaults
or Liens that, or filings, registrations, notifications,
authorizations, consents or approvals the failure of which
to obtain, individually or in the aggregate, would not
reasonably be expected to have a Company Material Adverse
Effect (excluding for this purpose only clause (vi) of the
penultimate sentence of Section 3.1(b)).
Section 3.6 Company Filings; Information in the Proxy
Statement.
(a) The Company has filed on a timely basis all proxy
statements, reports, schedules, forms, statements and other
documents (including exhibits thereto), and all amendments
thereto, required to be filed by it with the SEC since
January 1, 2005 (collectively, together with the information
incorporated by reference therein, the "Company SEC
Documents"). Each of the Company SEC Documents, as of its
filing date (or if amended or superseded by a filing prior
to the Agreement Date, then as of the date of such filing)
complied in all material respects with the applicable
requirements of the Securities Act of 1933, as amended
(together with the rules and regulations thereunder, the
"Securities Act"), the Exchange Act or the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act of 2002 ("SOXA") (as the case may be) and the applicable
rules and regulations of the SEC thereunder, and did not
contain any untrue statement of a material fact or omit to
state a 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. No Subsidiary of the Company is required to
file any statements, reports, schedules, forms or other
documents with the SEC.
(b) Each of the consolidated financial statements
(including, in each case, any related notes thereto)
contained in the Company SEC Documents (the "Financial
Statements"), (i) complied as to form in all material
respects with the published rules and regulations of the SEC
with respect thereto, (ii) was prepared in accordance with
accounting principles generally accepted in the United
States ("GAAP") applied on a consistent basis throughout the
periods involved (except in the case of unaudited interim
statements, to the extent they may exclude footnotes or may
be condensed or summary statements as may be permitted by
the SEC on Form 10-Q, 8-K or any successor form under the
Exchange Act), and (iii) fairly presented in all material
respects the consolidated financial position of the Company
and its Subsidiaries as of the respective dates thereof and
the consolidated results of the Company's and its
Subsidiaries' operations and cash flows for the periods
indicated, subject, in the case of the unaudited interim
financial statements, to normal and recurring year-end audit
adjustments. Except as reflected in the Financial
Statements, neither the Company nor any of its Subsidiaries
is a party to any material off-balance sheet arrangements
(as defined in Item 303 of Regulation S-K promulgated under
the Exchange Act). As of the Agreement Date, the Company
has not had any material dispute with KPMG, LLP regarding
accounting matters or policies during any of its past two
full fiscal years or during the current fiscal year that is
currently outstanding or that has resulted in (x) a passed
adjustment or (y) any restatement of the Financial
Statements.
(c) Without limiting the generality of the foregoing, KPMG,
LLP has not resigned nor been dismissed as independent
public accountant of the Company as a result of or in
connection with any disagreement with the Company on a
matter of accounting practices which materially impacts or
would require the restatement of any previously issued
financial statements, covering one or more years or interim
periods for which the Company is required to provide
financial statements, such that they should no longer be
relied on.
(d) As of the Agreement Date, to the knowledge of the
Company, no investigation by the SEC with respect to the
Company or any of its Subsidiaries is pending or threatened.
(e) As required by Rule 13a-15 of the Exchange Act, the
Company has established and maintains (i) internal control
over financial reporting (as defined in Rule 13a-15(f) of
the Exchange Act), which is designed to provide reasonable
assurance regarding the reliability of the Company's
financial reporting and its preparation of financial
statements for external purposes in accordance with GAAP and
(ii) disclosure controls and procedures (as defined in Rule
13a-15(e) of the Exchange Act), which are designed to ensure
that all material information required to be disclosed by
the Company in the Company SEC Documents is accumulated and
communicated to the Company's and its Subsidiaries'
management, as appropriate to allow timely decisions
regarding required disclosure. Each Company SEC Document
that was required to be accompanied by the certifications
required of the Company's principal executive officer and
principal financial officer pursuant to Sections 302 and 906
of SOXA and the rules and regulations promulgated thereunder
was accompanied by such certification and, at the time of
filing or submission of each such certification, to the
knowledge of the Company's principal executive officer and
principal financial officer, such certification was true and
accurate and complied with SOXA and the rules and
regulations promulgated thereunder as of the date filed.
(f) The proxy statement to be provided to the Company's
stockholders in connection with the Company Stockholders
Meeting (such proxy statement and any amendment thereof or
supplement thereto, the "Proxy Statement") on the date
mailed to the Company's stockholders and at the time of the
Company Stockholders Meeting, shall not contain any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to
make the statements therein, in the light of the
circumstances under which they were made, not misleading.
The Proxy Statement will comply in all material respects
with the provisions of the Exchange Act and the rules and
regulations thereunder.
Section 3.7 No Undisclosed Liabilities.
Neither the Company nor any of its
Subsidiaries has any liabilities or obligations of any
nature (whether accrued or unaccrued, absolute or
contingent, liquidated or unliquidated, or due or to become
due) required by GAAP to be set forth on a consolidated
balance sheet of the Company and its Subsidiaries or in the
notes thereto, except for (a) liabilities and obligations
accrued or reserved in the Financial Statements as of
December 28, 2005 or otherwise disclosed in the Company SEC
Documents, (b) liabilities and obligations incurred in the
ordinary course of business, consistent with past practice,
since December 28, 2005, (c) other liabilities and
obligations that, individually or in the aggregate, would
not reasonably be expected to have a Company Material
Adverse Effect and (d) liabilities and obligations which
have been discharged or paid prior to the Agreement Date.
Section 3.8 Absence of Company Material Adverse
Effect.
Since December 28, 2005, (i) to the
Agreement Date, there has not been a Company Material
Adverse Effect, nor does there exist or has there occurred
any event, change, circumstance, condition, development or
effect that, individually or in the aggregate, would
reasonably be expected to have a Company Material Adverse
Effect, and (ii) neither the Company nor any of its
Subsidiaries has taken or authorized the taking of any
action prohibited by, or that would be, if taken after the
Agreement Date, in violation of, Section 5.3.
Section 3.9 Litigation and Legal Compliance.
(a) Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material
Adverse Effect (i) there are no claims, actions, suits or
proceedings pending, or to the Company's knowledge,
threatened by or against the Company or any of its
Subsidiaries, (ii) to the Company's knowledge there is no
investigation pending or threatened by or against the
Company or any of its Subsidiaries and (iii) neither the
Company nor any of its Subsidiaries is subject to any
outstanding judgment, injunction, order or decree of any
Governmental Authority. There are no judicial or
administrative actions or proceedings pending, or to the
Company's knowledge, threatened, and to the Company's
knowledge there are no investigations pending or threatened
by or against the Company, that question the validity of
this Agreement or any action taken or to be taken by the
Company in connection with this Agreement.
(b) Except for instances of noncompliance that,
individually or in the aggregate, would not reasonably be
expected to have a Company Material Adverse Effect, the
Company and its Subsidiaries are in compliance with each
applicable federal, state, local and foreign law, statute,
rule, regulation, ordinance, code, license, permit, order,
legal doctrine, writ, injunction, judgment, decree,
requirement or agreement with any Governmental Authority
(including common law or the interpretation thereof)
(collectively, the "Laws") to which the Company, any of its
Subsidiaries, or any of their respective assets or
properties may be subject. The Company and its Subsidiaries
have all permits, licenses, approvals, authorizations of and
registrations with and under all Laws, and from all
Governmental Authorities, required by the Company and its
Subsidiaries to carry on their respective businesses as
currently conducted, except where the failure to have such
permits, licenses, approvals, authorizations and
registrations would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse
Effect.
Section 3.10 Contract Matters.
(a) Section 3.10 of the Company Disclosure Letter lists
each of the Company Material Agreements that as of the
Agreement Date are in effect or otherwise binding on the
Company or any of its Subsidiaries or their respective
properties or assets, other than those contracts or
agreements that have been filed as exhibits to the Company
SEC Documents. Section 3.10 of the Company Disclosure
Letter shall be deemed to be amended to include any contract
or agreement that would qualify as a Company Material
Agreement which is entered into by the Company during the
period between the date of this Agreement and the Effective
Time; provided that the Company shall have delivered written
notice to the Parent of its entry into any such contract or
agreement promptly, and in any event within two business
days of its execution thereof. "Company Material
Agreements" means (i) any credit agreement, note, bond,
guarantee, mortgage, indenture, lease (excluding leases
covered by Section 3.14(b) or not required to be scheduled
pursuant to that section), or other instrument or obligation
pursuant to which any "indebtedness" of the Company or any
of its Subsidiaries of more than $250,000 is outstanding or
may be incurred; (ii) any contract or agreement under which
the Company or any Subsidiary has, directly or indirectly,
made any advance, loan, extension of credit or capital
contribution to any person in excess of $250,000 (other than
to the Company or any Subsidiary and other than extensions
of trade credit in the ordinary course of business,
consistent with past practice); (iii) any agreement,
contract or binding commitment which was, or which was
required to be, filed as an exhibit to the Company SEC
Documents; and (iv) any (A) collective bargaining agreement;
(B) employment agreement contract or binding commitment
providing for annual compensation or payments in excess of
$250,000 in the current or any future year; (C) agreement,
contract or commitment of indemnification or guaranty not
entered into in the ordinary course of business consistent
with past practice which would reasonably be expected to
exceed $250,000, as well as any agreement, contract or
commitment of indemnification or guaranty between the
Company or any of its Subsidiaries and any of their
respective officers or directors, irrespective of the
amount; (D) agreement, contract or binding commitment
containing any covenant directly or indirectly limiting the
freedom of the Company or any of its Subsidiaries to engage
in any line of business, compete with any Person, or sell
any product or service; (E) agreement, contract or binding
commitment that shall result in the payment by, or the
creation of any commitment or obligation (absolute or
contingent) to pay on behalf of the Company or any of its
Subsidiaries any severance, termination, change of control,
"golden parachute," or other similar payments to any current
or former employee, officer, director or consultant
following termination of employment or otherwise as a result
of the consummation of the transactions contemplated by this
Agreement; (F) agreement, contract or binding commitment by
the Company or any of its Subsidiaries entered into since
January 1, 2005 or that has material obligations that are to
be performed subsequent to the Agreement Date, relating to
the disposition or acquisition of material assets not in the
ordinary course of business or any ownership interest in any
Subsidiary or other Person; (G) material agreements,
contracts or binding commitments regarding the development,
ownership or use of Intellectual Property (including
material licenses to or from third parties but other than
commercial off-the-shelf software, as that term is commonly
understood); (H) material partnership, joint venture or
similar agreement or arrangement; (I) any contract or
agreement involving a standstill or similar obligation of
the Company or any of its Subsidiaries to a third party; (J)
any franchise agreement; (K) each contract or agreement the
terms of which the Company or any Subsidiary is or will be
bound to share its profits or pay any royalties; (L) each
supplier agreement requiring payments in excess of $250,000;
(M) each power of attorney granted in favor of any Person;
or (N) other agreement, contract or binding commitment which
is material to the operation of the Company's and its
Subsidiaries' businesses. For purposes of this section,
"indebtedness" shall mean, with respect to any Person,
without duplication, (1) all obligations of such Person for
borrowed money, (2) all obligations of others secured by any
Lien on property or assets owned or acquired by such Person,
whether or not the obligations secured thereby have been
assumed, (3) all letters of credit issued for the account of
such Person (excluding letters of credit issued for the
benefit of suppliers to support accounts payable to
suppliers incurred in the ordinary course of business or to
support workers' compensation insurance obligations or
performance obligations under contracts entered into in the
ordinary course) and (4) all obligations, the principal
component of which are obligations under leases that are, or
should be pursuant to GAAP, classified as capital leases;
provided that, any obligations between or among the Company
and its wholly-owned Subsidiaries shall not be considered to
be "indebtedness" hereunder.
(b) Each Company Material Agreement is valid, binding and
enforceable upon the Company or the Subsidiary that is a
party thereto, and to the Company's knowledge each other
party thereto, and is, and following consummation of the
transactions contemplated by this Agreement shall remain, in
full force and effect (except that (i) such enforcement may
be subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar
Laws of general applicability relating to or affecting the
enforcement of creditors' rights, and (ii) 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). There are no defaults or breaches
under any Company Material Agreement by the Company or any
of its Subsidiaries, or to its knowledge any other party
thereto.
Section 3.11 Tax Matters.
(a) The Company and each of its Subsidiaries have
(i) timely filed with the appropriate Governmental
Authorities every material return, report or other document
or information (including any election, declaration,
disclosure, schedule, estimate or information return)
required to be supplied to a taxing authority or agent
thereof in connection with Taxes ("Tax Returns") required to
be filed for all periods ending on or prior to the Effective
Time, and for which a tax return is required by applicable
Law to be filed on or prior to such Effective Time
(including pursuant to extensions properly obtained), and
such filed Tax Returns are correct and complete in all
material respects, (ii) timely paid in full or made adequate
provision for the payment of all Taxes and (iii) timely
withheld and paid all Taxes required by applicable Laws to
have been withheld and paid as of the Effective Time in
connection with amounts paid or owing to any employee,
independent contractor, creditor, or other third party. The
liabilities and reserves for Taxes reflected in the balance
sheet included in the Company Reports as of and for the
period ended December 28, 2005 are adequate to cover all
Taxes of the Company and its Subsidiaries for all periods
ending at and prior to the date of such balance sheet and
there are no material Liens for Taxes upon any property or
asset of the Company or any of its Subsidiaries, except for
Liens for Taxes not yet due. The Company has delivered to
the Parent correct and complete copies of all federal income
Tax Returns filed for 2002, 2003 and 2004 and any amended
federal income Tax Returns filed within the three-year
period ending on the Agreement Date, and all state, local
and foreign income Tax Returns filed for 2004. The Company
and its Subsidiaries have each disclosed on their respective
Tax Returns all positions taken therein that could give rise
to a substantial understatement of Tax within the meaning of
Code Section 6662 or any similar provision of applicable
Law, and is in possession of supporting documentation as may
be required under any such provision.
(b) Neither the Company nor any of its Subsidiaries:
(i) has waived any statute of limitations in respect of
Taxes or agreed to any extension of time with respect to a
Tax assessment or deficiency other than waivers and
extensions which are no longer in effect; (ii) has received
any written notice indicating an intent to open an audit or
other review, a request for information related to Tax
matters, or notice of deficiency or proposed adjustment for
any amount of Tax proposed, asserted or assessed (and no
audit or administrative or judicial Tax proceeding is
pending or being conducted with respect to the Company or
any of its Subsidiaries); (iii) has been subject to a
written claim by a Governmental Authority in a jurisdiction
where the Company or any of its Subsidiaries does not file
Tax Returns that it is or may be subject to taxation by that
jurisdiction; (iv) is a party to any agreement providing for
the allocation or sharing of Taxes with any person that is
not, directly or indirectly, a wholly owned Subsidiary of
the Company; (v) for taxable years after 2001, has
"participated" (within the meaning of Treasury Regulation
Section 1.6011-4(c)(3)(i)(A)) in any "listed transaction"
within the meaning of Code Section 6011 or any similar
provision of state, local or foreign Law; (vi) is presently
required, or shall be required, to include any taxable
income for any period ending after the Closing Date as a
result of (A) a change in method of accounting under Code
Section 481 made prior to the Closing Date, (B) any
intercompany transaction, (C) an installment sale or open
transaction disposition made on or prior to the Closing
Date, or (D) a prepaid amount received on or prior to the
Closing Date (or under any provision of Law of any
jurisdiction with similar consequences as any of (vi)(A)
through (vi)(D) above); or (vii) is a party to any material
agreement, contract, arrangement or plan (A) pursuant to
which any one of them is required to make a compensatory
payment to any individual more than two and one-half (2 1/2)
months after the calendar year in which services were
performed as an employee in such calendar year commencing in
2005, (B) that has resulted or would result, separately or
in the aggregate, in the payment of any "excess parachute
payment" within the meaning of Code Section 280G, or any
amount that would not be fully deductible as a result of
Code Section 162(m), or (C) pursuant to which it is bound to
compensate any Person for excise or other additional Taxes
paid pursuant to Code Sections 409A or 4999 or any similar
provision of state, local or foreign Law. There are no
unresolved issues of law or fact which, to the knowledge of
the Company, arise out of a notice of deficiency, proposed
deficiency or assessment from the Internal Revenue Service
or any other Governmental Authority with respect to Taxes of
the Company or any of its Subsidiaries.
(c) For purposes of this Agreement, "Tax" or "Taxes" shall
mean (i) any and all taxes, fees, levies, duties, tariffs,
imposts, and other like charges imposed by the United States
or any other Governmental Authority (together with any and
all interest, penalties, loss, damage, liability, expense,
additions to tax and additional amounts or costs incurred or
imposed with respect thereto), whether disputed or not,
including (A) taxes or other charges on or with respect to
income, estimated income, franchise, escheat, windfall or
other profits, gross receipts, real or personal property,
sales, use, capital gains, capital stock or shares, premium,
payroll, employment, social security (or similar), workers'
compensation, occupation, unemployment compensation,
disability, environmental (including taxes under Code
Section 59A), alternative or add-on minimum, estimated or
net worth; (B) taxes or other charges in the nature of
excise, withholding, ad valorem, license, registration,
stamp, transfer, value added, or gains taxes; and
(C) customs duties, tariffs, import and export taxes and
similar charges; (ii) any liability for payment of amounts
described in clause (i) whether as a result of transferee
liability, of being a member of an affiliated, consolidated,
combined or unitary group for any period, or otherwise
through operation of law; and (iii) any liability for
payment of amounts described in clauses (i) and (ii) as a
result of any tax sharing, tax indemnity or tax allocation
agreement or any other express or implied agreement to
indemnify any Person.
Section 3.12 Employee Benefit Matters.
(a) Each plan, program, agreement or arrangement
of the Company or any of its Subsidiaries constituting (i) an
employee welfare benefit plan as defined in Section 3(1) of
the Employee Retirement Income Security Act of 1974 (as
amended, "ERISA") is referred to herein as an "Employee
Welfare Benefit Plan" and (ii) an employee pension benefit
plan as defined in Section 3(2) of ERISA is referred to
herein as an "Employee Pension Benefit Plan." The Employee
Welfare Benefit Plans, Employee Pension Benefit Plans and
each other employee benefit plan, agreement, program or
arrangement or employment practice maintained by the Company
or any of its Subsidiaries with respect to any of its
current or former employees, officers, directors or
consultants or to which the Company or any of its
Subsidiaries contributes or is required to contribute with
respect to any of its current or former employees, officers,
directors or consultants are collectively referred to herein
as the "Company Plans." With respect to each Company Plan:
(i) such Company Plan (and each related
trust, insurance contract or fund, if applicable) has been
administered in a manner consistent in all material respects
with its written terms and complies in all material respects
in form and operation with the applicable requirements of ERISA
and the Code and other applicable Laws;
(ii) all required reports, returns, similar
documents and descriptions (including Form 5500 Annual Reports,
Summary Annual Reports and Summary Plan Descriptions) have been
filed or distributed appropriately with respect to such
Company Plan and there are no investigations by any
Governmental Authority with respect to termination
proceedings or other claims (except claims for benefits
payable in the normal operation of the Company Plans), suits
or proceedings against or involving any company Plan or
asserting any rights or claims to benefits under any company
Plan that would give rise to any material liability, and to
the knowledge of the Company, there are no facts that could
give rise to any material liability in the event of any such
investigation, claim, suit or proceeding;
(iii) The requirements of Part 6 of Subtitle
B of Title I of ERISA and Code Section 4980B have been met in all
material respects with respect to each such Company Plan
which is an Employee Welfare Benefit Plan;
(iv) all material contributions, premiums
or other payments (including all employer contributions and
employee salary reduction contributions) that are required
to be made under the terms of any Company Plan have been timely
made and properly provided for in the Financial Statements
contained in the most recent Company SEC Documents;
(v) each such Company Plan which is an
Employee Pension Benefit Plan intended to be a "qualified plan"
under Code Section 401(a) has received a favorable determination
letter from the Internal Revenue Service stating that such plan is
a qualified plan and exempt from income tax under
Sections 401(a) and 501(a) of the Code, and no event has
occurred which would reasonably be expected to cause the
loss, revocation or denial of any such favorable
determination letter;
(vi) to the extent applicable, the Company
has previously delivered to the Parent, upon its request, correct
and complete copies of the plan documents (or in the case of any
unwritten Company Plan, a description thereof) and most
recent summary plan descriptions, the most recent
determination letter received from the Internal Revenue
Service, the three (3) most recent Form 5500 Annual Report,
has previously delivered the most recent actuarial report,
the most recent audited financial statements, and all
related trust agreements, insurance contracts and other
funding agreements that implement such Company Plan; and
(vii) all Company Plans are by their terms able
to be amended or terminated by the Company without advance notice
and without incurring additional liabilities.
(b) With respect to each Employee Welfare Benefit Plan or
Employee Pension Benefit Plan that the Company or any of its
Subsidiaries maintains or ever has maintained, or to which
any of them contributes, ever has contributed or ever has
been required to contribute, there have been no non-exempt
prohibited transactions (as defined in Section 406 of ERISA
and Code Section 4975) with respect to such plan, no
fiduciary has any liability for breach of fiduciary duty or
any other failure to act or comply in connection with the
administration or investment of the assets of such plan, and
no action, suit, proceeding, hearing or, to the Company's
knowledge, investigation with respect to the administration
or the investment of the assets of such plan (other than
routine claims for benefits) is pending or, to the Company's
knowledge, threatened.
(c) Neither the Company nor any of its Subsidiaries, nor
any other entity which, together with the Company or any of
its Subsidiaries, would be treated as a single employer
under Section 4001 of ERISA or Section 414 of the Code (an
"ERISA Affiliate") contributes to or has in the past six
years sponsored, maintained, contributed to or had any
liability in respect of any defined benefit pension plan (as
defined in Section 3(35) of ERISA) or plan subject to
Section 412 of the Code or Section 302 of ERISA.
(d) No Company Plan is a Multiemployer Plan and neither the
Company, its Subsidiaries nor any of their respective ERISA
Affiliates has at any time sponsored or contributed to, or
had any liability or obligation in respect of, any
Multiemployer Plan.
(e) Neither the Company nor any of its Subsidiaries has any
obligation to provide medical, health, life insurance or
other welfare benefits for currently retired or future
retired or terminated employees, their spouses or their
dependents (other than in accordance with Code
Section 4980B), including any such obligations resulting
from transactions contemplated by this Agreement.
(f) Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby
will (either alone or in combination with another event)
(i) result in any payment becoming due, or increase the
amount of any compensation due, to any current or former
employee, officer, director or consultant of the Company;
(ii) increase any benefits otherwise payable under any
Company Plan; (iii) result in the acceleration of the time
of payment or vesting of any such compensation or benefits;
(iv) result in the payment of any amount that could,
individually or in combination with any other such payment,
constitute an "excess parachute payment," as defined in
Section 280G(b)(1) of the Code; or (v) result in the
triggering or imposition of any restrictions or limitations
on the rights of the Company to amend or terminate any
Company Plan.
(g) Prior to the execution of this Agreement, for each
Company Stock Option Plan, the Board of Directors or other
body authorized to administer and interpret such Company
Stock Option Plan has made the determination and directed,
in each case in accordance with the terms of such Company
Stock Option Plan, that the Company Stock Options shall be
treated as set forth in Section 1.8 of this Agreement.
Section 3.13 Environmental Matters.
(a) (i) The Company and its Subsidiaries are and
have been in compliance with all applicable Environmental Laws
and have all permits, licenses and authorizations required by
such Environmental Laws necessary for the operation of their
businesses as presently conducted; (ii) there is no order,
claim, action, proceeding or demand for information pending
or, to the knowledge of the Company, threatened in writing
against the Company or any of its Subsidiaries pursuant to
Environmental Laws; (iii) the Company is not otherwise
subject to any liability under Environmental Laws including
any liability arising out of the release or disposal of
hazardous, toxic, dangerous or regulated substances into the
environment; and (iv) the Company and its Subsidiaries have
not received any notice, demand letter or request for
information from any Governmental Authority or third party,
which has not heretofore been resolved with such
Governmental Authority or third party, indicating that the
Company or any of its Subsidiaries may be in violation of,
or liable under, any Environmental Laws; provided, however,
that no representation or warranty is made in the foregoing
clauses (i), (ii), (iii) and (iv) with respect to matters
that, individually or in the aggregate, would not reasonably
be expected to have a Company Material Adverse Effect.
(b) For purposes of this Agreement, "Environmental Laws"
means any Federal, state, local or foreign Laws relating to
(i) the protection, preservation or restoration of the
environment (including air, water vapor, surface water,
groundwater, drinking water supply, surface land, subsurface
land, plant and animal life or any other natural resource)
or (ii) the exposure to, or the use, storage, recycling,
treatment, generation, transportation, processing, handling,
labeling production, release or disposal of, Hazardous
Substances, in each case as amended. The term
"Environmental Laws" includes the Comprehensive
Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. 9601 et seq., as amended by the Superfund
Amendment and Reauthorization Act of 1986 and as further
amended, the Federal Water Pollution Control Act, 33 U.S.C.
1251 et seq., as amended, the Solid Waste Disposal Act of
1976, 42 U.S.C. 6901 et seq., as amended, the Clean Air
Act, 42 U.S.C. 7401 et seq., as amended, the Toxic
Substances Control Act, 15 U.S.C. 2601 et seq., as
amended, the Hazardous Material Transportation Act,
49 Ap. U.S.C.A. 1801 et seq., as amended, the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. 136
et seq., as amended, and comparable state and local Laws.
(c) For purposes of this Agreement, "Hazardous Substance"
means any substance presently or hereafter listed, defined,
designated or classified as hazardous, toxic, radioactive,
or dangerous, or otherwise regulated, under any
Environmental Laws. Hazardous Substance includes any
substance to which exposure is regulated by any Governmental
Authority or any Environmental Laws including any toxic
waste, pollutant, contaminant, hazardous substance, toxic
substance, hazardous waste, special waste, industrial
substance or petroleum or any derivative or by-product
thereof, radon, radioactive material, asbestos, or asbestos
containing material, urea formaldehyde foam insulation, lead
or polychlorinated biphenyls.
Section 3.14 Real Estate.
(a) The Company or one of its Subsidiaries is the
owner of good, marketable and insurable fee title to the land
described in Section 3.14(a) of the Company Disclosure
Letter and to all of the buildings, structures and other
improvements located thereon (collectively, the "Owned Real
Property"), free and clear of all Liens except for Permitted
Liens. For purposes of this Agreement, "Permitted Lien"
means (i) Liens for Taxes not delinquent or the validity of
which are being contested in good faith by appropriate
proceedings and as to which adequate reserves have been
established on the Company's financial statements in
accordance with GAAP consistently applied; (ii) statutory
landlord's, mechanic's, carrier's, workmen's, repairmen's or
other similar Liens arising or incurred in the ordinary
course of business and securing amounts that are not past
due and as to which adequate reserves have been established
on the Company's financial statements in accordance with
GAAP consistently applied; and (iii) other Liens arising in
the ordinary course of business, other than liens for
indebtedness or other monetary obligation, which do not
(x) interfere in any material respect with the use or
occupancy of the affected property as currently used or
operated or (y) materially reduce the market value of the
Real Property below the fair market value the Real Property
would have had but for such encumbrance.
(b) Section 3.14(b)(1) of the Company Disclosure Letter
contains a true, correct and complete schedule of all
leases, subleases, licenses and other agreements (including
all modifications, amendments and supplements thereto)
(collectively, the "Real Property Leases") under which the
Company or any of its Subsidiaries uses or occupies or has
the right to use or occupy, now or in the future, any real
property (the land, buildings and other real property
improvements covered by the Real Property Leases being
herein called the "Leased Real Property"), which schedule
sets forth the date of and parties to each Real Property
Lease, the date of and parties to each amendment,
modification and supplement thereto, the term and renewal
terms (whether or not exercised) thereof and a brief
description of the Leased Real Property covered thereby.
The Company has heretofore delivered to the Parent true,
correct and complete copies of all Real Property Leases.
Each Real Property Lease is valid, binding and in full force
and effect. Except for the matters listed in
Section 3.14(b)(2) of the Company Disclosure Letter
(collectively, the "Permitted Leased Real Property
Exceptions"), the Company or its Subsidiary, as applicable,
holds the leasehold estate under and interest in each Real
Property Lease free and clear of all Liens. There are no
material disputes with respect to each Real Property Lease
and except as disclosed in Section 3.14(b)(3) of the Company
Disclosure Letter, neither the Company, nor, to the
knowledge of the Company, any other party to each Real
Property Lease, is in breach or default under such Real
Property Lease, and no event has occurred or failed to occur
or circumstance exists which, with the delivery of notice,
the passage of time or both, would constitute such a breach
or default, or permit the termination, modification or
acceleration of rent under such Real Property Lease. Except
as set forth in Section 3.14(b)(4) of the Company Disclosure
Letter, no consent by the landlord or other third party
under any of the Real Property Leases is required in
connection with the consummation of the transactions
contemplated herein and each of the Real Property Leases
will continue to be in full force and effect on identical
terms following the Closing. Except as disclosed in
Section 3.14(b)(5) of the Company Disclosure Letter, the
Company or its Subsidiary has non-disturbance agreements
with the landlord's lender with respect to each Real
Property Lease.
(c) All of the land, buildings, structures and other
improvements and all appurtenances thereto used by each of
the Company and its Subsidiaries in the conduct of its
business are included in the Owned Real Property and the
Leased Real Property. The Leased Real Property and the
Owned Real Property are hereinafter collectively referred to
as the "Real Property."
(d) Section 3.14(d) of the Company Disclosure Letter
contains a true, correct and complete schedule of all
material leases, subleases, licenses and other agreements
(including all modifications, amendments and supplements
thereto) (collectively, the "Space Leases") granting to any
person other than the Company or any of its Subsidiaries any
right to the possession, use, occupancy or enjoyment of the
Real Property or any portion thereof. The Company has
heretofore delivered to the Parent true, correct and
complete copies of all Space Leases.
(e) Neither the Company nor any of its Subsidiaries
owns or holds, or is obligated under or a party to, any option,
right of first refusal, right of first offer or other
contractual right to purchase, acquire, sell or dispose of
the Real Property or any portion thereof or interest
therein.
(f) All buildings, structures, fixtures, building systems
and equipment included in the Real Property (the
"Structures") are in reasonably good condition and repair in
all material respects and sufficient for the operation of
the business of the Company, subject to reasonable wear and
tear and subject to replacements and upgrades of fixed
assets consistent with the Company's capital expenditures
budget and in the ordinary course of business. There are no
facts or conditions affecting any of the Structures which
would interfere in any material respect with the use or
occupancy of the Structures or any portion thereof in the
operation of the business of the Company.
(g) Neither the Company nor any of its Subsidiaries has
received notice or has knowledge of any pending, threatened
or contemplated condemnation proceeding affecting the Real
Property or any part thereof or of any sale or other
disposition of the Real Property or any part thereof in lieu
of condemnation.
(h) The present use of the land and Structures on the
Real Property are in conformity in all material respects with
all applicable laws, rules, regulations and ordinances,
including all applicable zoning laws, land use laws and
restrictions, building codes, setback requirements,
ordinances and regulations and with all registered deeds,
restrictions of record, reciprocal easement agreements or
other agreements affecting such Real Property, and neither
the Company nor any of its Subsidiaries has knowledge of any
proposed change therein that would so affect any of the Real
Property or its use and neither the Company nor any of its
Subsidiaries has knowledge of any violation thereof. To the
Company's or any applicable Subsidiary's knowledge, there
exists no conflict or dispute with any regulatory authority
or other Person relating to any Real Property or the
activities thereon which would be reasonably likely to
result in a Material Adverse Effect. No damage or
destruction has occurred with respect to any of the Real
Property that would reasonably be expected to result in a
Material Adverse Effect.
(i) Section 3.14(i) of the Company Disclosure Letter sets
forth a list of all construction and material alteration
projects currently ongoing with respect to any Real Property
(the "Construction Projects"). The Construction Projects
are proceeding in a workmanlike fashion in compliance in all
material respects with all applicable laws, rules,
regulations and ordinances, and, to the Company's knowledge,
there are no facts or conditions affecting any of the
Construction Projects which would interfere in any
significant respect with the completion of the Construction
Projects, or the use, occupancy or operation thereof, which
interference would reasonably be expected to result in a
Material Adverse Effect. No Construction Project or portion
thereof is dependent for its access, operation or utility on
any land, building or other improvement not included in the
Real Property.
Section 3.15 Intellectual Property Matters.
(a) Either the Company or one of its Subsidiaries owns, or
otherwise has the right pursuant to a valid written license,
sublicense or other agreement to use, all Intellectual
Property used in connection with the business of the Company
or any of its Subsidiaries as presently conducted or
contemplated (the "Company Intellectual Property"), free and
clear of all Liens. "Intellectual Property" shall mean all
intellectual property or other proprietary rights of any
kind, as they exist anywhere in the world, including (i) all
copyrights, all renewals and extensions thereof, and all
registrations and applications thereof, (ii) domain names,
Internet addresses, and other computer identifiers, web
sites, and web pages, and similar rights and items,
(iii) patents, patent applications, inventions (whether or
not patentable) and other patent rights, (iv) computer
software programs, including all source code, object code,
specifications, databases, designs and related documentation
(collectively, "Software"), (v) trademarks, service marks,
trade dress, trade names, brand names, designs, logos, or
corporate names, all registrations and applications for
registration thereof, and all goodwill associated therewith,
(vi) trade secrets, know-how, inventions, processes,
procedures, customer information, confidential business
information, and technical information (collectively, "Trade
Secrets"), and (vii) licenses, sublicenses, distribution
agreements, covenants not to ▇▇▇ and other agreements and
permissions relating to items (i)-(vi) (collectively, "IP
Licenses").
(b) Section 3.15(b)(i) of the Company Disclosure Letter
sets forth a true and complete list of all registrations,
issuances, filings and applications for any Intellectual
Property owned or filed by the Company or any of its
Subsidiaries as well as all material unregistered Company
Intellectual Property. All such items of Intellectual
Property are valid, subsisting, enforceable and in full
force and effect.
(c) Each of the Company and its Subsidiaries has taken
all necessary and desirable actions to maintain and protect
each item of Company Intellectual Property owned or purported
to be owned by the Company or any of its Subsidiaries,
including taking all reasonable or necessary actions and
precautions to protect the secrecy, confidentiality, and
value of its Trade Secrets and the proprietary nature and
value of its Intellectual Property.
(d) To the Company's knowledge, (i) none of the Company
Intellectual Property, business operations, products or
services owned, used, developed, provided, sold, licensed,
imported or otherwise exploited by the Company or any of its
Subsidiaries, or made for, used or sold by or licensed to
the Company or any of its Subsidiaries by any person nor the
conduct of the Company or its subsidiaries' business
infringes upon, misappropriates or otherwise violates any
Intellectual Property rights of others, and (ii) no person
is infringing upon or otherwise violating the Intellectual
Property rights of the Company or any of its Subsidiaries.
There are no claims pending or, to the Company's knowledge,
threatened, and there is no fact, event, condition or
circumstance that, directly or indirectly, may give rise to
or serve as a basis for the commencement of any claim,
(x) contesting the right of the Company or any of its
Subsidiaries to use any of the Company's or such
Subsidiary's products or services currently or previously
used by the Company or such Subsidiary or (y) opposing or
attempting to cancel any rights of the Company or such
Subsidiary in or to any Company Intellectual Property.
(e) Section 3.15(e) of the Company Disclosure Letter sets
forth a true and complete list and description of all
Software used by the Company or any of its Subsidiaries
(except for "off-the-shelf software," as such term is
commonly understood, that is commercially available on a
retail basis under non-discriminatory pricing terms and used
solely on the desktop personal computers of the Company).
All Software used by the Company or any of its Subsidiaries
performs in conformance with its documentation, is free from
any material software defect and does not contain any
malicious code. The Company and each of its Subsidiaries
has made back-ups of all such Software (specifically
including all databases) and has maintained such backups at
a secure off-site location. The Company and each of its
Subsidiaries is in compliance with each IP License relating
to Software to which it is a party, and each such IP License
shall remain in full force and effect following the
consummation of the transactions contemplated herein.
(f) After the consummation of the transactions contemplated
herein, the Company will own all right, title, and interest
in and to or have a valid written license to use all Company
Intellectual Property on identical terms and conditions as
each of the Company or its subsidiaries enjoyed immediately
prior to such transactions.
(g) Each of the Company and its Subsidiaries has security
measures and safeguards in place that are adequate and
appropriate in all material respects to protect information
it collects from customers and other parties from illegal or
unauthorized access or use by its personnel or third parties
or access or use by its personnel or third parties in a
manner that could reasonably be expected to lead to a
violation of the privacy rights of third parties. Neither
the Company nor any of its Subsidiaries has collected,
received or used such information in an unlawful manner or
in violation of the privacy rights of third parties, and to
the Company's knowledge, no Person has gained unauthorized
access to or made any unauthorized use of such information
in any manner that has led or could reasonably be expected
to lead to a material legal liability of the Company or its
Subsidiaries.
Section 3.16 Labor Matters.
Neither the Company nor any of its
Subsidiaries is a party to any collective bargaining
agreements, memoranda of understanding, settlements or other
labor agreements with any union or labor organization.
There are no material disputes or controversies pending or,
to the Company's knowledge, threatened between the Company
or any of its Subsidiaries and any of their current or
former employees or any labor or other collective bargaining
unit representing any such employee that, individually or in
the aggregate, would reasonably be expected to have a
Company Material Adverse Effect. To the Company's
knowledge, as of the Agreement Date, there is no
organizational effort presently being made or threatened by
or on behalf of any labor union with respect to employees of
the Company or any of its Subsidiaries. To the Company's
knowledge, as of the Agreement Date, there are no current
Department of Labor, Office of Federal Contract Compliance
Programs or Equal Employment Opportunity Commission audits
pending with respect to the Company or any of its
Subsidiaries except for audits arising in the ordinary
course of business or that would not, individually or in the
aggregate, reasonably be expected to have a Company Material
Adverse Effect. To the Company's knowledge, it is in
material compliance with all local, state and federal wage
and hours laws (including the Federal Fair Labor Standards
Act) and all federal immigration laws. There are no
material liabilities or obligations relating to any
individual's current or former employment with the Company
or its Subsidiaries or related entities arising in
connection with any violation of any Laws. No individual
who has performed services for the Company or any of its
Subsidiaries has been improperly excluded from participation
in any Company Plan, and neither the Company nor any of its
Subsidiaries has any direct or indirect liability, whether
actual or contingent, with respect to any misclassification
of any person as an independent contractor rather than as an
employee, or with respect to any employee leased from
another employer. Neither the Company nor any of its
Subsidiaries has incurred any liability or obligation and
none of the employees of the Company or any of its
Subsidiaries have experienced or will experience an
employment loss (as defined by the federal Worker Adjustment
and Retraining Notification Act of 1988, including the
regulations promulgated thereto ("WARN") or any similar
state or local statute) during the 90 day period immediately
prior to the Closing, or that if such employment losses do
occur, with prior written notice to the Parent, that the
Company will timely give all notices required to be issued
under, and otherwise comply with, WARN and any similar state
or local statues and regulations of any applicable
jurisdiction related to "plant closings", "mass layoffs" (or
similar triggering event) caused by the Company. To the
extent that, after the Closing, the Parent operates the
business of the Company and its Subsidiaries in the same
manner operated by the Company and its Subsidiaries during
the six-month period prior to the Closing, the Parent will
not incur any liability under WARN or any similar state or
local statute.
Section 3.17 Amendment to the Rights Agreement.
The Company has taken and will
maintain in effect all necessary action to prevent the
Shareholder Rights Agreement, dated as of February 18, 2005,
by and between the Company and American Stock Transfer &
Trust Company, as Rights Agent, as amended (the "Rights
Agreement"), from being applicable to this Agreement and the
transactions contemplated hereby, including preventing any
right issued or issuable under the Rights Agreement from
becoming exercisable by virtue of this Agreement, the Merger
or any other transaction contemplated by this Agreement and
ensuring that (a) neither the Parent nor the Merger
Subsidiary nor any of their "Affiliates" (as defined in the
Rights Agreement) or "Associates" (as defined in the Rights
Agreement) is considered to be an "Acquiring Person" (as
defined in the Rights Agreement) by virtue of this
Agreement, the Merger or any other transaction contemplated
by this Agreement, (b) the provisions of the Rights
Agreement, including the occurrence of a Share Acquisition
Date (as defined in the Rights Agreement) or Distribution
Date (as defined in the Rights Agreement), are not and shall
not be triggered by reason of the execution, announcement or
consummation of this Agreement, the Merger any other
transaction contemplated by this Agreement and (c) each
right issued and outstanding immediately prior to the
Effective Time shall expire without additional payment at
the Effective Time. The Company has delivered to the Parent
a true and correct copy of the Rights Agreement as amended
and supplemented to the date of this Agreement.
Section 3.18 Takeover Laws.
The restrictions contained in
Chapter 2 of Title 35 of the SC Code do not apply to the
Company, this Agreement, the Merger or the other
transactions contemplated herein. The Company has taken all
necessary action to render any other potentially applicable
anti-takeover or similar statute or regulation or provision
of the articles of incorporation or by-laws, or other
organizational or constitutive document or governing
instruments of the Company or any of its Subsidiaries,
inapplicable to this Agreement and the transactions
contemplated by this Agreement.
Section 3.19 Insurance.
Section 3.19 of the Company
Disclosure Letter sets forth a list of all material
insurance policies that the Company and each of its
respective Subsidiaries maintain. Such policies or binders
of insurance cover risks in amounts adequate for the Company
and its Subsidiaries' respective businesses and operations
and are customary in the industry in which the Company and
its Subsidiaries operate. All material insurance policies
maintained by the Company and its Subsidiaries are in full
force and effect, all premiums due and payable thereon have
been paid (and no further premiums or payments are due after
the Effective Time with respect to any coverage prior to the
Effective Time), and the Company and its Subsidiaries are
otherwise in compliance in all material respects with the
terms and conditions of such policies. No limit imposed on
any such insurance policy has been exhausted or
significantly diminished and each provider of the insurance
policies listed in Section 3.19 of the Company Disclosure
Letter is solvent as of the Agreement Date. The Company has
made available to the Parent true and correct copies of all
loss run reports for the past five years which have been
provided to the Company, its Subsidiaries or any of their
insurance agents.
Section 3.20 Brokers' Fees.
Except for the fees and expenses
payable by the Company to Brookwood Associates, LLC
("Brookwood") pursuant to a letter agreement dated January
27, 2006 (the "Brookwood Engagement Letter"), a complete
copy of which has been previously delivered to the Parent,
neither the Company nor any of its Subsidiaries has any
liability or obligation to pay any fees or commissions to
any financial advisor, broker, finder or agent with respect
to the transactions contemplated by this Agreement.
Section 3.21 Opinion of Financial Advisor.
The Company has received the opinion
of Brookwood, dated the Agreement Date, to the effect that,
as of the date the opinion was delivered, the consideration
to be received by the holders of Company Common Stock (the
"Company Stockholders") pursuant to this Agreement is fair
to the Company Stockholders, other than the Parent, the
Merger Subsidiary and their respective Subsidiaries, from a
financial point of view. Upon the Company's receipt of the
written version of such opinion, the Company will promptly
provide the Parent with a copy of such opinion. The Company
has received the consent of Brookwood to include its final
written opinion in the Proxy Statement subject to the terms
and provisions of the Brookwood Engagement Letter.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE PARENT AND THE MERGER SUBSIDIARY
The Parent and the Merger Subsidiary, jointly and
severally, represent and warrant to the Company that:
Section 4.1 Corporate Existence and Power.
Each of the Parent and the Merger
Subsidiary is a corporation duly organized, validly existing
and in good standing under the Laws of the jurisdiction of
its incorporation and has all requisite corporate power and
authority to own, lease and operate its properties and
assets and to carry on its business as presently being
conducted, except when the failure to be in good standing or
have such power and authority, individually or in the
aggregate, would not reasonably be expected to have a
material adverse effect on the ability of the Parent or the
Merger Subsidiary to consummate the Merger (a "Parent
Material Adverse Effect"). Each of the Parent and the
Merger Subsidiary is duly qualified or licensed to conduct
business and is in good standing in each jurisdiction in
which the properties owned, leased or operated by it or the
nature of the business conducted by it makes such
qualification or license necessary, except where the failure
to be so qualified or licensed and in good standing,
individually or in the aggregate, would not reasonably be
expected to have a Parent Material Adverse Effect. Since
the date of its incorporation, the Merger Subsidiary has not
engaged in any activities other than in connection with, or
as contemplated by, this Agreement.
Section 4.2 Authorization of Transaction; Non-
Contravention; Approvals.
(a) The Parent and the Merger Subsidiary have full
corporate power and authority and have taken all requisite
corporate action to enter into this Agreement and, subject
to the adoption of this Agreement by the Parent as the sole
stockholder of the Merger Subsidiary (which shall occur
promptly after the execution and delivery hereof), to
consummate the transactions contemplated hereby and to
perform its obligations hereunder. This Agreement has been
duly authorized, executed and delivered by the Parent and
the Merger Subsidiary and, assuming the due authorization,
execution and delivery thereof by the Company, constitutes a
valid and legally binding agreement of the Parent and the
Merger Subsidiary enforceable against each of them in
accordance with its terms, except that (i) such enforcement
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or similar
Laws of general applicability relating to or affecting
enforcement of creditors' rights generally and (ii) 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.
(b) Except for (a) filings and approvals necessary to
comply with the applicable requirements of the Exchange Act,
(b) filings pursuant to the HSR Act and any other applicable
Antitrust Laws, (c) the filing of the Articles of Merger
pursuant to the SCBA and (d) any filings required under the
rules and regulations of the NASDAQ National Market, neither
the execution and delivery of this Agreement by the Parent
and the Merger Subsidiary, nor the consummation by the
Parent and the Merger Subsidiary of the transactions
contemplated hereby, shall (i) violate or conflict with any
provision of the articles of incorporation or bylaws of the
Parent or the Merger Subsidiary, (ii) violate any Laws
applicable to the Parent or the Merger Subsidiary or any of
their respective properties or assets, or (iii) require any
filing or registration with, notification to, or
authorization, consent or approval of, any Governmental
Authority; except in the case of clauses (ii) and (iii) for
such violations, breaches or defaults that, or filings,
registrations, notifications, authorizations, consents or
approvals that the failure to obtain, individually or in the
aggregate, would not reasonably be expected to have a Parent
Material Adverse Effect.
Section 4.3 Financing Capability.
(a) The Parent has entered into a sale-leaseback
facility commitment letter with Drawbridge Special Opportunity
Fund, LLC dated July 23, 2006 ("Drawbridge") and the Parent
and the Merger Subsidiary have entered into a debt financing
commitment letter from Credit Suisse Securities (USA) LLC
and UBS Securities LLC (together with Drawbridge, the
"Lenders") dated July 24, 2006 (the "Commitment Letters")
pursuant to which the sale-leaseback facility and debt
financing sources identified therein have committed to
provide to the Parent up to $1.5 billion in the aggregate
(the "Financing"), subject to the terms and conditions
therein and assuming that the conditions set forth in
Sections 6.1 and 6.2 are satisfied as of the Closing. The
Parent has delivered correct and complete copies of the
Commitment Letters to the Company. As of the date hereof,
the Commitment Letters (i) are in full force and effect,
(ii) are binding and enforceable against the Parent and, to
the knowledge of Parent, each of the other parties thereto
in accordance with their respective terms, except that
(A) such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar Laws of general applicability
relating to or affecting enforcement of creditors' rights
generally and (B) 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,
and (iii) have not been amended or terminated in any manner
adverse to the Company. As of the date of this Agreement,
the Parent does not believe that the Commitment Letters will
be terminated or amended in any material respect in a manner
adverse to the Company. As of the date of this Agreement,
the Lenders have not advised Parent, Merger Subsidiary or
any of their respective Affiliates of any facts which cause
them to believe the financings contemplated by the
Commitment Letters will not be consummated substantially in
accordance with the terms thereof. All commitment fees and
other fees required to be paid pursuant to the Commitment
Letters on or prior to the date hereof have been paid.
(b) To the knowledge of the Parent, as of the date hereof,
there are no conditions precedent related to the funding of
the Financing other than as set forth in the Commitment
Letters.
Section 4.4 Information in the Proxy Statement.
The information supplied by the
Parent or the Merger Subsidiary expressly for inclusion or
incorporation by reference in the Proxy Statement shall not
contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary in order to make the statements made therein, in
the light of the circumstances under which they were made,
not misleading.
Section 4.5 Litigation.
As of the Agreement Date, there are no claims,
actions or proceedings pending or, to the knowledge of the
Parent, threatened against the Parent or any of its
Subsidiaries before any Governmental Authority that seek to
restrain or enjoin the consummation of the Merger or that,
if adversely determined, would adversely affect in any
material respect Parent or any of its Subsidiaries' ability
(financial or otherwise) to consummate the Merger. As of
the Agreement Date, neither the Parent nor any of its
Subsidiaries is subject to any to any outstanding judgment,
injunction, order or decree of any Governmental Authority
which prohibits or restricts the consummation of the
transactions contemplated by this Agreement.
Section 4.6 Brokers' and Finders' Fees.
Except for the fees and expenses
payable by the Parent to Berenson & Company, LLC pursuant to
a letter agreement dated May 31, 2006, the Parent has not
incurred any liability for brokerage or finders' fees or
agents' commissions or any similar charges in connection
with this Agreement or any transaction contemplated hereby.
ARTICLE V
COVENANTS
Section 5.1 General.
Subject to the terms and conditions
of this Agreement, each of the parties shall take all
actions and do all things necessary, proper or advisable to
perform its obligations under this Agreement which are
required to be performed on or prior to the Closing, and use
its reasonable efforts to consummate and make effective the
transactions contemplated by this Agreement as promptly as
reasonably practical.
Section 5.2 Further Assurances.
Prior to the Closing Date, each of
the parties shall give all required notices to third parties
and Governmental Authorities and shall use its reasonable
efforts to obtain all material third party and governmental
consents and approvals that it is required to obtain in
connection with this Agreement, the Merger and the other
transactions contemplated hereby. No later than ten (10)
business days after the date of the execution of this
Agreement, each of the parties shall file a Notification and
Report Form and related material with the Federal Trade
Commission and the Antitrust Division of the United States
Department of Justice under the HSR Act and any other
applicable Antitrust Laws, shall use its respective
reasonable efforts to obtain termination of the applicable
waiting period under all Antitrust Laws and shall take all
further actions and make all further filings pursuant to the
Antitrust Laws that may be necessary, proper or advisable.
Notwithstanding anything to the contrary contained herein,
nothing contained in this Agreement shall be deemed to
require the Parent or any of its Subsidiaries or the Company
or any of its Subsidiaries to enter into any agreement,
consent decree or other commitment requiring the Parent or
any of its Subsidiaries or the Company or any of its
Subsidiaries to divest any assets or properties or to agree
to any restriction on the operations of the Parent, the
Surviving Corporation, the Company or any of their
respective Subsidiaries after the Effective Time or to
litigate, pursue or defend any action or proceeding by any
Governmental Authority challenging any of the transactions
contemplated hereby as violative of any Antitrust Laws. In
connection with the foregoing, each party (i) shall promptly
notify the other party in writing of any communication
received by that party or its Affiliates from any
Governmental Authority, and subject to applicable Laws,
provide the other party with a copy of any such written
communication (or written summary of any oral
communication), and (ii) not participate in any substantive
meeting or discussion with any Governmental Authority in
respect of any filing, investigation or inquiry concerning
the transactions contemplated by this Agreement unless it
consults with the other party in advance, and to the extent
permitted by such Governmental Authority, give the other
party the opportunity to attend and participate thereat.
For purposes of this Agreement, "Affiliate" will mean, with
respect to any Person, any other Person that (i) owns 10% or
more of the voting securities of the first Person or any of
its Subsidiaries, (ii) is a director, executive or officer
of the first Person or any of its Subsidiaries, or
(iii) directly or indirectly controls, is controlled by or
is under common control with the first Person or any of its
Subsidiaries.
Section 5.3 Interim Conduct of the Company.
(a) Except as expressly permitted by this Agreement,
set forth in Section 5.3 of the Company Disclosure Letter, or
pursuant to the Parent's prior written consent, which
consent shall not be unreasonably withheld, conditioned or
delayed (it being understood that reasonableness for this
purpose will be assessed both from the Parent's perspective
assuming the Closing will take place in accordance with this
Agreement and from the Company's perspective in connection
with its operational needs), from and after the Agreement
Date through the Effective Time, the Company shall, and
shall cause each of its Subsidiaries, (i) to conduct its
operations in accordance with its ordinary course of
business in all material respects, consistent with past
practice, and (ii) use its reasonable efforts to preserve
intact its business organization, keep available the
services of its current officers and employees, preserve the
goodwill of those having business relationships with the
Company and its Subsidiaries, preserve its relationships
with customers, creditors and suppliers, maintain its books,
accounts and records and comply in all material respects
with applicable Laws.
(b) Without limiting the generality of the foregoing,
except as provided in this Agreement, or in Section 5.3 of
the Company Disclosure Letter, from and after the Agreement
Date through the Effective Time, the Company shall not, and
shall not cause or permit any of its Subsidiaries to, take
any of the following actions without the prior written
consent of the Parent:
(i) amend or propose to amend its certificate
(or articles) of incorporation or bylaws or file any certificate
of designation or similar instrument with respect to any shares
of its authorized but unissued capital stock;
(ii) authorize or effect any stock split,
combination or reclassification of shares of its capital stock
or amend any term of any outstanding security of the Company or
repurchase, redeem or otherwise acquire any shares of its
capital stock;
(iii) declare, pay or set aside any dividend or
distribution with respect to the Company Common Stock or any
other of its capital stock (other than dividends payable by
a wholly-owned Subsidiary of the Company to the Company or
another wholly-owned Subsidiary), authorize for issuance or
issue, sell, grant any shares of its capital stock (other
than in connection with the exercise of Company Options
outstanding on the Agreement Date and listed in the Company
Disclosure Letter or in connection with any offering period
under the ESPP that has commenced prior to the Agreement
Date; provided, however, that participants may not increase
their payroll deductions or purchase selections from those
in effect as of the Agreement Date.), options, warrants,
stock appreciation rights, phantom equity, commitments,
subscriptions, other rights of any kind (including Company
Stock Based Awards) to acquire any shares of capital stock,
or any other securities exercisable or exchangeable for or
convertible into shares of its capital stock, or repurchase,
redeem or otherwise acquire any shares of its capital stock
or any other securities exercisable or exchangeable for or
convertible into shares of its capital stock;
(iv) merge or consolidate with any entity
or liquidate, dissolve or effect any recapitalization or
reorganization in any form or create any new Subsidiary;
(v) sell, lease, license, pledge, encumber
or otherwise dispose of any (A) Owned Real Property (other
than in connection with any definitive agreement to sell,
lease, pledge, encumber or otherwise dispose of any such
Owned Real Property entered into prior to the date hereof)
or (B) any other assets or any interests (including any shares
of the capital stock of any of the Subsidiaries) that are
material to the Company and its Subsidiaries, taken as a whole,
other than assets used, consumed, replaced or sold in the
ordinary course of business, consistent with past practice;
(vi) acquire (whether by purchase of assets,
purchase of stock, merger or otherwise) (A) any assets
(including any equity interests) other than in the ordinary
course of business or (B) any equity interest of any Person
or any business or division of any business, or enter into any
joint venture, partnership agreement, joint development
agreement, strategic alliance agreement or other similar
agreement (other than teaming or other similar agreements
entered into by the Company and/or its Subsidiaries in the
ordinary course of business, consistent with past practice);
(vii) create, incur, assume or otherwise become
liable for any indebtedness for borrowed money, or guarantee any
such indebtedness; issue or sell any debt securities or
warrants or rights to acquire any debt securities of the
Company or its Subsidiaries; guarantee any debt securities
of others; enter into any "keep well" or other contract to
maintain any financial statement condition of any Person
other than a wholly-owned Subsidiary or enter into any
arrangement having the economic effect of the foregoing,
other than indebtedness existing as of the Agreement Date or
incurred to refinance existing indebtedness on monetary
terms, including with respect to prepayment, no less
favorable to the Company or its Subsidiaries than the
indebtedness being refinanced, borrowings under existing
credit lines or any of the foregoing created, incurred or
assumed in the ordinary course of business, consistent with
past practice and intercompany indebtedness among the
Company and its wholly-owned Subsidiaries;
(viii) except as required as a result of
changes in Law, GAAP or Regulation S-X of the Exchange Act,
change any of the accounting principles or practices used by
it as of December 28, 2005 that would reasonably be expected to
materially affect the assets, liabilities or results of
operation of the Company or any of its Subsidiaries;
(ix) make or change any Tax election, settle or
compromise any Tax liability involving a payment of more than
$1,000,000, change in any material respect any accounting
method in respect of Taxes, file any amendment to a material
Tax Return, enter into any closing agreement, settle any
material claim or material assessment in respect of Taxes
involving a payment of more than $1,000,000, or consent to
any extension or waiver of the limitation period applicable
to any claim or assessment in respect of Taxes, except, in
each case, in the ordinary course of business consistent
with past practice, or make any Tax payment outside the
ordinary course of business consistent with past practice;
(x) other than (A) as set forth in Section
5.3(x) of the Company Disclosure Letter or (B) as required to
comply with applicable Laws or the terms of any employment-
related agreement in effect on the Agreement Date, increase the
compensation payable or to become payable to any director or
officer (other than increases in cash compensation to
employees who are not directors or officers, made in the
ordinary course of business, consistent with past practice)
or adopt, enter into, or increase any bonus, insurance,
severance, pension or other benefit plan, payment or
arrangement made to, for or with any such directors,
officers or other employees, or grant any severance or
termination pay to any officer or director or to any other
employee except payments made in connection with the
termination of employees who are not officers or directors
in amounts consistent with its policies (existing
immediately prior to the Agreement Date) and past practice;
(xi) enter into, adopt, amend or terminate any
Company Plan or collective bargaining agreement;
(xii) make any capital expenditure, capital
addition or capital improvement in an amount exceeding $100,000
or $1,000,000 in the aggregate;
(xiii)(A) enter into any contract, agreement
or commitment (excluding purchase contracts for food or
beverage supplies that (x) either do not require any volume
commitments or (y) to the extent they do require volume
commitments (I) could not require payments of $1,000,000 in
the aggregate over the term of any such contract and (II) do
not expire on or after December 31, 2006) of a character
that is, or would reasonably be expected to be, material to
the Company and its Subsidiaries taken as a whole, or could
require payments of more than $1,000,000 in the aggregate
over the term of any such contract, agreement or commitment
or (B) terminate, renew or amend in any material respect any
contract, agreement or commitment that is, or would
reasonably be expected to be, material to the Company and
its Subsidiaries taken as a whole, or could require payments
of more than $1,000,000 in the aggregate over the term of
any such contract, agreement or commitment;
(xiv) waive, release or assign any material
rights, claims or benefits of the Company or any Subsidiary
under any Company Material Agreement;
(xv) engage in any "reportable transaction,
" including any "listed transaction," each within the meaning
of Code Section 6011 or any other applicable federal Law,
including any Internal Revenue Service ruling, procedure,
notice or other pronouncement;
(xvi) waive or release any rights that are
material to the Company and its Subsidiaries, taken as a whole,
or pay, discharge or satisfy any claims, liabilities or
obligations that are, or would reasonably be expected to be,
material to the Company and its Subsidiaries, taken as a whole,
before the same come due in accordance with their terms, except
in either case other than the payment, discharge and
satisfaction in the ordinary course of business of
liabilities reflected on or reserved for in the Financial
Statements of the Company included in the Company SEC
Documents or otherwise incurred in the ordinary course of
business, consistent with past practice;
(xvii) settle or compromise any pending or
threatened suit, action or proceeding involving a settlement
payment by the Company or any of its Subsidiaries in excess
of $250,000 or requiring the Surviving Corporation to take or
refrain from taking any material action after the Effective Time;
(xviii) acquire, sell, lease, license, transfer,
pledge, encumber, grant or dispose of (whether by merger,
consolidation, purchase, sale or otherwise) any material
Company Intellectual Property, or enter into any material
commitment or transaction or take any material action, with
respect to any Intellectual Property outside the ordinary
course of business consistent with past practice, or do any
act or knowingly omit to do any act whereby any Company
Intellectual Property material to the business of the
Company or any of its Subsidiaries may become invalidated,
abandoned, unmaintained, unenforceable or dedicated to the
public domain; or
(xix) agree, resolve or commit to do any of
the foregoing.
Section 5.4 Control of Operations.
Nothing contained in this Agreement
shall give to the Parent, directly or indirectly, rights to
control or direct the operations of the Company prior to the
Effective Time. Prior to the Effective Time, the Company
shall exercise, consistent with the terms and conditions of
this Agreement, complete control and supervision of its and
its Subsidiaries' operations.
Section 5.5 Proxy Statement; Company Stockholders
Meeting.
(a) As promptly as practicable after the Agreement
Date, the Company shall commence preparation of a Proxy
Statement relating to a special meeting of the Company's
stockholders meeting (the "Company Stockholders Meeting") for
the purpose of obtaining the Company Stockholders Approval,
and file a preliminary Proxy Statement with the SEC or its staff.
The Company shall use its reasonable efforts to respond to any
comments by the SEC or its staff to such preliminary Proxy
Statement and to cause a definitive Proxy Statement to be
mailed to the Company Stockholders as soon as possible
following the Agreement Date. The Company shall notify the
Parent promptly of the receipt of and shall respond promptly
to any (i) comments from the SEC or its staff and
(ii) request by the SEC or its staff for amendments or
supplements to the Proxy Statement or for additional
information and shall supply the Parent with copies of all
correspondence between the Company or any of its
representatives, on the one hand, and the SEC or its staff,
on the other hand, with respect to the Proxy Statement or
the Merger. The Parent and its counsel shall be given a
reasonable opportunity to review and comment upon the Proxy
Statement and any amendment or supplement thereto and any
such correspondence prior to its filing with the SEC or
dissemination to the Company Stockholders. If necessary,
after the Proxy Statement has been so mailed, the Company
shall promptly circulate amended, supplemental or
supplemented proxy materials, and if required in connection
therewith, resolicit proxies. Subject to Section 5.8(d),
the Company shall include in the definitive Proxy Statement
the unanimous recommendation of the Company's Board of
Directors that the Company Stockholders vote in favor of
approval of the Merger and the adoption of this Agreement
(the "Company Recommendation").
(b) The Parent shall provide the Company with information
concerning or relating to the Parent or the Merger
Subsidiary that may be required in connection with the
preparation and filing of the Proxy Statement pursuant to
this Section 5.5. The information supplied by the Parent
and the Company for inclusion in the Proxy Statement shall
not at the time (i) the Proxy Statement is filed with the
SEC, (ii) the Proxy Statement is first mailed to the Company
Stockholders, or (iii) of the Company Stockholders Meeting,
contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary in order to make the statements therein, in light
of the circumstances under which they were made, not
misleading. For purposes of the foregoing, it is understood
and agreed that information concerning or relating to the
Parent or the Merger Subsidiary will be deemed to have been
supplied by the Parent, and all other information will be
deemed to have been supplied by the Company. The Company
shall cause all documents filed with the SEC in connection
with the Merger to comply as to form and substance in all
material respects with the applicable requirements of the
Exchange Act.
(c) The Company, acting through the Company's Board of
Directors, shall in accordance with applicable Law and as
soon as possible following the Agreement Date, establish a
record date for, duly call, give notice of, convene and hold
the Company Stockholders Meeting for the purpose of voting
upon this Agreement and the Merger, and the Company shall
submit this Agreement at such meeting. The Company shall
use its reasonable efforts (it being understood that such
reasonable efforts shall not prevent the Company from
withdrawing, modifying or changing its recommendation
pursuant to Section 5.8(d)) to solicit from the Company
Stockholders proxies in favor of the adoption of this
Agreement and take all actions reasonably necessary or, in
the reasonable opinion of the Parent, advisable to secure
the Company Stockholders Approval. Without limiting the
generality of the foregoing, the Company's obligation
pursuant to the preceding two sentences will not be affected
by the commencement, public proposal, public disclosure or
communication to the Company of any Acquisition Proposal or
Superior Proposal or any withdrawal of the Company
Recommendation. Subject to the Company withdrawing,
modifying or changing its recommendation pursuant to
Section 5.8(d), the Company, acting through the Company's
Board of Directors, shall make the Company Recommendation at
the Company Stockholders Meeting.
Section 5.6 Financing.
(a) The Parent and the Merger Subsidiary shall use
commercially reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable to (i) maintain in
effect the Commitment Letters and to satisfy the conditions
(to the extent such conditions are under the reasonable
control of the Parent) to obtaining the Financing set forth
therein, (ii) enter into definitive financing agreements
(the "Financing Agreements") with respect to the Financing
so that the Financing Agreements are in effect as promptly
as practicable (but no later than the third business day)
following satisfaction of the conditions to this Agreement
and (iii) consummate the Financing as soon as practicable
following satisfaction of the conditions to this Agreement.
The Parent shall keep the Company reasonably informed of the
status of the financing process and shall advise the Company
if, at any time after the date hereof, any of the
representations and warranties set forth in Section 4.3 are
no longer true and correct in any material respect.
(b) If the Commitment Letters or the Financing
Agreements expire or are terminated, amended, modified or
supplemented for any reason, the Parent shall (i) promptly
notify the Company of such expiration, termination, amendment,
modification or supplement and the reasons therefor and
(ii) in the case of the termination or expiration of either
of the Commitment Letters, use commercially reasonable
efforts to obtain alternative financing to consummate the
transactions contemplated by this Agreement; it being
understood, however, that such commercially reasonable
efforts would not require the Parent to obtain financing
that is on terms less favorable, in substance, to the Parent
and the Merger Subsidiary thereunder than those set forth in
the Commitment Letters or the Financing Agreements, as the
case may be.
(c) The Company shall, and shall cause its Subsidiaries,
to reasonably cooperate with the Parent in connection with the
fulfillment of the obligations of the Parent under
Sections 5.6(a) and 5.6(b) of the Agreement and the
fulfillment of the condition set forth in Section 6.3(d) of
the Agreement, including causing the Company and any of its
Subsidiaries and each of their respective directors,
officers, employees, agents, attorneys, accountants,
investment bankers and other representatives (collectively,
the "Company Representatives") to (i) provide, as promptly
as reasonably practicable after the execution of this
Agreement, the Parent with all audited financial statements
and interim financial statements of the Company that would
be required to be included in a registration statement of
the Parent filed under the Securities Act of 1933, as
amended, pursuant to Rule 3-05 of Regulation S-X,
(ii) provide, as promptly as reasonably practicable after
the execution of this Agreement, all financial information
required by the Parent to produce pro forma financial
statements for the Parent in accordance with Article 11 of
Regulation S-X, (iii) assist with the preparation of such
offering memoranda and documentation as is required under
the Commitment Letters, (iv) meet with potential lenders and
financing sources, (v) remove all Liens (other than Liens
arising after the date of this Agreement in the ordinary
course of business in favor of mechanics, contractors or
repairmen for amounts which are not material to the business
of the Company and its Subsidiaries, which are being
contested in good faith by appropriate proceedings
diligently prosecuted, which proceedings have the effect of
preventing the forfeiture or sale of the property subject
thereto, and in each case for which adequate reserves in
accordance with GAAP are being maintained) that are not
Permitted Liens from the Leased Real Property and the Owned
Real Property, (vi) obtain consents, estoppel certificates,
memorandums of leases, and subordination, non-disturbance
and attornments agreements from the lessors of the Leased
Real Property, (vii) permit Phase II environmental
investigations on up to 12 of the Owned Real Properties and
Leased Real Properties and (viii) timely notify all third
parties holding rights of first refusal, rights of first
offers and purchase options against the Owned Real Property
of the Financing and seek to obtain waivers of those rights.
(d) The Company shall, and shall cause its Subsidiaries,
to provide the Parent with financial statements and related
information sufficient to permit the Parent to fulfill its
obligations to provide financial disclosure relating to the
Company, on a timely basis in any report under the Exchange
Act.
(e) Upon the request of the Parent, the Company shall
(i) use its commercially reasonable efforts to cause its
independent auditors to deliver to the SEC any auditor's
consent that is required to be included in any filing with
the SEC that includes or incorporates by reference the
financial statements and related information of the Company
and (ii) to the extent the Parent or any of its Subsidiaries
conducts or intends to conduct an offering of securities
(and if the registration statement, prospectus or offering
memorandum for such offering includes or incorporates by
reference the financial statements relating to the Company),
use its commercially reasonable efforts to cause its
independent auditors to deliver a letter containing
statements and information of the type ordinarily included
in accountant's "cold comfort letters" with respect to the
financial statements and financial information relating to
the Company contained or incorporated by reference in any
such document relating to any such offering, in the case of
each of (i) and (ii) above, within the time period
reasonably requested by the Parent or any of its
Subsidiaries. In addition, in connection with any SEC
filing required to be made by the Parent or any of its
Subsidiaries (or any SEC review of such filing), the Company
shall permit the Parent and its authorized representatives
to have reasonable access, during normal business hours and
upon reasonable advance notice, to the properties, books and
records of the Company and its Subsidiaries relating to the
Company solely for the purpose of preparing any such SEC
filing or responding to SEC questions, comments or requests
on such SEC filing.
Section 5.7 Additional Reports.
The Company will furnish to the
Parent drafts of any Company SEC Documents within a
reasonable time prior to filing with the SEC, and copies of
any Company SEC Documents that it files with the SEC on or
after the date hereof, and the Company represents and
warrants that as of the respective dates thereof, such filed
reports will (i) comply as to form in all material respects
with the published rules and regulations of the SEC with
respect thereto, (ii) contain financial statements prepared
in accordance with GAAP applied on a consistent basis
throughout the periods involved (except as may be indicated
in the notes thereto or, in the case of unaudited interim
financial statements, as may be permitted by the SEC on
Form 10-Q, 8-K or any successor form under the Exchange
Act), and (iii) contain financial statements that fairly
present in all material respects the consolidated financial
position of the Company and its Subsidiaries as of the
respective dates thereof and the consolidated results of the
Company's and its Subsidiaries' operations and cash flows
for the periods indicated, except that the unaudited interim
financial statements may not contain footnotes and may be
subject to normal and recurring year-end adjustments.
Section 5.8 Acquisition Proposals.
(a) From the Agreement Date until the Effective Time,
the Company shall, and shall cause its Subsidiaries and each of
the Company Representatives, to immediately cease all
existing discussions, negotiations or other action with any
other Person conducted heretofore with respect to any
Acquisition Proposal. From the Agreement Date until the
Effective Time, the Company shall not, and shall cause its
Subsidiaries and each of the Company Representatives not to,
(i) solicit, initiate, knowingly facilitate or knowingly
encourage, directly or indirectly, the making or submission
of any Acquisition Proposal, (ii) enter into any letter of
intent, agreement, arrangement or understanding with respect
to any Acquisition Proposal, or agree to approve or endorse
any Acquisition Proposal or enter into any agreement,
arrangement or understanding that would require the Company
to abandon, terminate or fail to consummate the Merger or
any other transaction contemplated by this Agreement,
(iii) initiate or participate in any way in any discussions
or negotiations with, or furnish or disclose any information
to, any Person (other than the Parent or the Merger
Subsidiary) in furtherance of any proposal that constitutes,
or could reasonably be expected to lead to, any Acquisition
Proposal, or (iv) facilitate or further in any other manner
any inquiries or the making or submission of any proposal
that constitutes, or could reasonably be expected to lead
to, any Acquisition Proposal. Without limiting the
foregoing, it is agreed that any violation of the foregoing
restrictions by any Company Representative, whether or not
such Person is purporting to act on behalf of the Company or
any of its Subsidiaries, or otherwise, will be deemed to be
a breach of this Section 5.8(a) by the Company.
(b) Notwithstanding the restrictions set forth in
Section 5.8(a), if at any time prior to obtaining the
Company Stockholders Approval, the Company's Board of
Directors receives a bona fide, unsolicited Acquisition
Proposal (under circumstances in which there has not been a
violation of Section 5.8(a)) and the Company's Board of
Directors determines in good faith (after consulting with
its financial advisor and outside legal counsel) that such
Acquisition Proposal is, or is reasonably likely to result
in a Superior Proposal (as such term is defined in
subsection (h) below) and that failure to take the action
permitted under this paragraph would be inconsistent with
its fiduciary duties to the Company Stockholders under
applicable Laws, the Company may (or permit the Company
Representatives), subject to providing the Parent with the
information required pursuant to subsection (c) below,
(A) furnish information with respect to the Company and its
Subsidiaries to the Person making such Acquisition Proposal
pursuant to a customary confidentiality agreement not less
restrictive (including with respect to standstill
provisions) on the other party than the confidentiality
agreement dated March 20, 2006 (the "Confidentiality
Agreement"), and (B) participate in discussions or
negotiations with the Person making such Acquisition
Proposal.
(c) The Company shall as promptly as practical, and in
any event within forty-eight (48) hours, notify the Parent of
any Acquisition Proposal or of any request for information
or inquiry that could reasonably be expected to lead to an
Acquisition Proposal, which notification shall include a
copy of the applicable Acquisition Proposal or a reasonably
detailed written summary thereof, request or inquiry (or, if
oral, a written statement setting forth in reasonable detail
the material terms and conditions of such Acquisition
Proposal, request or inquiry), including the identity of the
third party making such Acquisition Proposal, request or
inquiry. The Company shall keep the Parent advised on a
reasonably current basis of the status and content of any
discussions or negotiations involving any Acquisition
Proposal, request or inquiry and shall promptly make
available to the Parent any non-public information furnished
to any third party in connection therewith that has not been
previously provided to the Parent. The Company will notify
the Parent in writing promptly after any determination by
the Board of Directors of the Company that an Acquisition
Proposal is, or would reasonably be likely to result in or
lead to, a Superior Proposal.
(d) Neither the Company's Board of Directors nor any
committee thereof will withdraw, modify or change, or
propose publicly to withdraw, modify or change, in a manner
adverse to the Parent, the Merger Subsidiary or the
transactions contemplated by this Agreement, the Company
Recommendation, unless prior to obtaining the Company
Stockholders Approval, (A) the Company's Board of Directors
determines in good faith (after consultation with outside
legal counsel) that the failure to take such action would be
inconsistent with its fiduciary duties to the Company
Stockholders under applicable Laws, and (B) if such
withdrawal, modification or public proposal is taken in
response to a Superior Proposal, then unless the Company
also first gives the Parent three (3) business days written
notice of the material terms and provisions of such Superior
Proposal, during which three (3) business day period the
Company will and will cause the Company Representatives to
negotiate in good faith with the Parent, so that the Parent
may propose an amendment to this Agreement for the purpose
of causing the Acquisition Proposal to no longer constitute
a Superior Proposal. In the case of (i) subclause (A) of
the immediately preceding sentence, the Company may
withdraw, modify or change its recommendation and shall give
the Parent prompt notification thereof; and (ii) subclause
(B) of the immediately preceding sentence, if at the end of
such three (3) business day period, the Company's Board of
Directors continues to believe in good faith, after
receiving the advice of its financial advisors and outside
legal counsel, that the Acquisition Proposal continues to be
a Superior Proposal, and the Company has concurrently
satisfied its obligations pursuant to Sections 7.3 and 7.4,
then the Company may withdraw, modify or change the Company
Recommendation by written notice to the Parent and terminate
this Agreement pursuant to Section 7.1(c)(ii).
(e) Unless the Company's Board of Directors has previously
withdrawn or modified, or is concurrently withdrawing or
modifying, the Company Recommendation in accordance with
this section, the Company's Board of Directors shall not
recommend any Acquisition Proposal to the Company
Stockholders. Notwithstanding the foregoing, nothing
contained in this Agreement shall prevent the Company's
Board of Directors from complying with Rule 14e-2(a) and
Rule 14d-9 promulgated under the Exchange Act with respect
to any Acquisition Proposal or making any disclosure
required by applicable Laws.
(f) The Company shall not release nor permit the
release of any Person from, or waive or permit the waiver
of any provision of, and the Company shall use its reasonable
efforts to enforce or cause to be enforced, any
confidentiality, "standstill" or similar agreement to which
any of the Company or any of its Subsidiaries is a party,
unless the Company's Board of Directors determines in good
faith (after consultation with outside legal counsel) that
the failure to take such action would be inconsistent with
its fiduciary duties to the Company Stockholders under
applicable Laws; provided, however, that the Company shall
not release or permit the release from, or waive or permit
the waiver of, any provision of any standstill or similar
agreement the effect of which would be to permit such Person
to effect a transaction without the approval of the
Company's Board of Directors.
(g) The term "Acquisition Proposal" means an inquiry,
proposal, indication of interest or offer from any Person
other than Parent or any of its Affiliates relating to any
(i) acquisition or sale of (1) 20% or more of the
consolidated assets of the Company and its Subsidiaries, or
(2) 20% or more (in number or voting power) of the equity
securities of the Company (or any of its Subsidiaries, as
applicable), (ii) tender offer or exchange offer, as defined
pursuant to the Exchange Act, that, if consummated, would
result in any Person beneficially owning 20% or more (in
number or voting power) of the equity securities of the
Company (or a Company Subsidiary as applicable), or
(iii) merger, consolidation, business combination,
reorganization, recapitalization, liquidation, dissolution
or other similar transaction involving the Company or any of
its Subsidiaries, other than the transactions contemplated
by this Agreement or a merger involving only the Company and
one or more of its wholly-owned Subsidiaries.
(h) The term "Superior Proposal" means a bona fide,
written Acquisition Proposal that is (i) not received in
violation of Section 5.8(a); (ii) for at least a majority of
the outstanding Company Common Stock or all or substantially
all or a majority of the assets of the Company on a
consolidated basis, provided that, a sale-leaseback or similar
transaction shall not be deemed a Superior Proposal;
(iii) fully financed or for which financing, to the extent
required, is reasonably likely to be available; and (iv) on
terms that the Company's Board of Directors determines in
good faith (A) would result in a transaction that is more
favorable to the Company Stockholders, from a financial
point of view, than the transaction contemplated hereby, and
(B) is reasonably capable of being completed according to
its terms.
Section 5.9 Indemnification.
(a) From and after the Effective Time, the Surviving
Corporation shall fulfill and honor in all respects the
obligations of the Company pursuant to any indemnification,
exculpation and advancement of expenses provisions in favor
of the current or former directors, officers, employees or
agents of the Company or any of its Subsidiaries or any
other person who, at the request of the Company or any of
its Subsidiaries, served as a director, officer, member,
trustee or fiduciary of another corporation, partnership,
joint venture, trust, employee benefit plan or other
enterprise (the "Indemnified Parties") under the
constitutional documents of the Company and its Subsidiaries
or any agreement between an Indemnified Party and the
Company or any of its Subsidiaries in effect as of the
Agreement Date. The articles of incorporation and bylaws of
the Surviving Corporation shall contain provisions with
respect to indemnification, exculpation and advancement of
expenses that are at least as favorable to the Indemnified
Parties as those contained in the articles of incorporation
and bylaws of the Company in effect on the Agreement Date,
and such provisions shall not be amended, repealed or
otherwise modified for a period of six (6) years from the
Effective Time in any manner that would adversely affect the
rights of any of the Indemnified Parties thereunder.
(b) The Surviving Corporation shall obtain, at the
Effective Time, prepaid (or "tail") directors' and officers'
liability insurance policies in respect of acts or omissions
occurring at or prior to the Effective Time for six (6)
years from the Effective Time, covering each Indemnified
Party on terms with respect to such coverage and amounts no
less favorable than those of such policies in effect on the
date of this Agreement. In the event the Surviving
Corporation is unable to obtain such "tail" insurance
policies, then, for a period of six (6) years from the
Effective Time, the Surviving Corporation shall maintain in
effect the Company's current directors' and officers'
liability insurance policies in respect of acts or omissions
occurring at or prior to the Effective Time, covering each
Indemnified Party on terms with respect to such coverage and
amounts (including with respect to the payment of attorneys'
fees) no less favorable than those of such policies in
effect on the date of this Agreement. Notwithstanding the
provisions of this section, the Surviving Corporation shall
not be obligated to make total annual premium payments with
respect to such policies of insurance to the extent such
premiums exceed two hundred and twenty-five percent (225%)
of the last annual premium paid by the Company prior to the
Agreement Date. If the annual premium costs necessary to
maintain such insurance coverage exceed the foregoing
amount, the Surviving Corporation shall maintain as much
comparable directors and officers liability insurance and
fiduciary liability insurance reasonably obtainable for an
annual premium not exceeding the foregoing amount. The
Company represents that the amount of the last annual
premium paid by the Company prior to the Agreement Date was
the amount set forth on Section 5.9(b) of the Company
Disclosure Letter.
(c) The Parent shall cause the Surviving Corporation to
honor the provisions of this Section 5.9 and all
indemnification agreements entered into by the Company and
its Subsidiaries listed in Section 5.9 of the Company
Disclosure Letter.
(d) The rights of each Indemnified Party hereunder shall
be in addition to any other rights such Indemnified Party may
have under the SCBA or otherwise. Notwithstanding anything
to the contrary contained in this Agreement or otherwise,
the provisions of this Section 5.9 shall survive the
consummation of the Merger, and each Indemnified Party will,
for all purposes, be a third party beneficiary of the
covenants and agreements contained in this Section 5.9 and,
accordingly, shall be treated as a party to this Agreement
for purposes of the rights and remedies relating to
enforcement of such covenants and agreements and shall be
entitled to enforce any such rights and exercise any such
remedies directly against the Parent and the Surviving
Corporation.
(e) If the Surviving Corporation or any of its successors
or assigns (i) consolidates with or merges into any other
Person and is not the continuing or surviving corporation or
entity of such consolidation or merger or (ii) transfers or
conveys all or substantially all of its properties and
assets to any Person, then, and in each such case, to the
extent necessary, proper provision will be made so that the
successors and assigns of the Surviving Corporation will
assume the obligations set forth in this Section 5.9.
Section 5.10 Public Announcements.
The initial press releases issued by
each party announcing the Merger and the transactions
contemplated by this Agreement shall be in a form that is
mutually acceptable to the Parent and the Company.
Thereafter, the Parent and the Company shall consult with
one another before issuing any press releases or otherwise
making any public announcements with respect to the
transactions contemplated by this Agreement, and except as
may be required by applicable Laws or by the rules and
regulations of the NASDAQ National Market shall not issue
any such press release or make any such announcement prior
to such consultation, except that (a) the Parent and the
Company shall agree on the content of the first announcement
made to the Company's employees regarding the execution of
this Agreement and the transactions contemplated hereby and
(b) the Company may otherwise communicate with the Company's
employees as it deems appropriate, provided that, in any
formal communications with such employees (other than as
contemplated by Section 1.8), the Company shall not make any
commitments to the employees that might reasonably be
expected to be binding upon the Parent or the Surviving
Corporation after the Closing.
Section 5.11 Full Access.
(a) Between the Agreement Date and the Effective Time,
the Company shall, and shall cause its Subsidiaries to, afford
the Parent and its Representatives reasonable access during
normal business hours and upon reasonable notice, to the
officers, employees, agents, properties, books and records
of the Company and its Subsidiaries.
(b) The Parent shall hold, and shall cause its directors,
officers, employees, agents and representatives to hold, all
information provided to them pursuant to this Section 5.11
in confidence in accordance with the terms of the
Confidentiality Agreement and, in the event of the
termination of this Agreement for any reason, the Parent
promptly shall return or destroy all such information in
accordance with the terms of the Confidentiality Agreement.
Section 5.12 Actions Regarding Anti-takeover Statutes.
If (a) the provisions of Chapter 2 of
Title 35 of the SC Code or (b) any other potentially
applicable anti-takeover or similar statute or regulation is
or becomes applicable to the transactions contemplated by
this Agreement, the Board of Directors of the Company shall
grant such approvals and take such other actions as may be
required so that the transactions contemplated hereby may be
consummated as promptly as practicable on the terms and
conditions set forth in this Agreement.
Section 5.13 Continued Benefit Plans.
From the date on which the Effective
Time occurs through December 31, 2006, the employees of the
Company who remain in the employment of the Surviving
Corporation and its Subsidiaries (the "Continuing
Employees") shall receive employee benefits that in the
aggregate are either (i) substantially comparable to the
employee benefits provided under the Company's employee
benefit plans to such employees immediately prior to the
Effective Time or (ii) at the Parent's election,
substantially comparable to the employee benefits provided
to similarly situated employees of the Parent; provided that
neither the Parent nor the Surviving Corporation nor any of
their Subsidiaries shall have any obligation to issue, or
adopt any plans or arrangements providing for the issuance
of, capital stock, warrants, options, stock appreciation
rights or other rights in respect of any shares of capital
stock of any entity or any securities convertible or
exchangeable into such shares pursuant to any such plans or
arrangements. Nothing contained herein shall be construed
as requiring, and the Company shall take no action that
would have the effect of requiring, the Parent or the
Surviving Corporation to adopt or continue any specific
plans or to continue the employment of any specific person.
Section 5.14 Standstill Provisions.
The restrictions on the Parent and the Merger
Subsidiary contained in Section 10 of the Confidentiality
Agreement are hereby waived by the Company but only to the
extent reasonably necessary to permit the Parent and the
Merger Subsidiary to consummate the transactions
contemplated by this Agreement and/or to comply with their
obligations or exercise their legal remedies under this
Agreement.
Section 5.15 Notification of Certain Matters;
Supplemental Disclosure.
Each party shall give the other
reasonably prompt notice upon learning of any event that is
reasonably likely to cause any of the conditions set forth
in Article VI not to be satisfied. The Company shall give
prompt written notice to the Parent of the occurrence of any
event that, individually or in the aggregate, would
reasonably be expected to result in a Company Material
Adverse Effect. Each of the Company, the Parent and the
Merger Subsidiary agrees to use their respective reasonable
efforts to prevent or promptly remedy, (i) the occurrence or
failure to occur or the impending or threatened occurrence
or failure to occur, of any event which occurrence or
failure to occur would be likely to cause any of its
representations or warranties in this Agreement to be untrue
or inaccurate in any material respect at any time from the
Agreement Date to the Effective Time and (ii) any material
failure on its part to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by
it hereunder. Each party shall give prompt written notice
to the other of any material development which would give
rise to a failure of a condition set forth in Article VI.
The delivery of any notice pursuant to this Section 5.15
shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice nor be deemed
to have amended any of the disclosures set forth in the
Company Disclosure Letter, to have qualified the
representations and warranties contained herein or to have
cured any misrepresentation or breach of a representation or
warranty that otherwise might have existed hereunder by
reason of such material development. No disclosure after
the Agreement Date of the untruth of any representation and
warranty made in this Agreement will operate as a cure of
any breach of the failure to disclose the information, or of
any untrue representation or warranty made herein.
Section 5.16 Nonqualified Excess Plans.
As soon as practicable following the
Agreement Date, the Board of Directors of the Company (or if
appropriate, any committee of the Board of Directors of the
Company administering the Company Nonqualified Excess Plan
and the Company Executive Nonqualified Excess Plan
(collectively, the "Nonqualified Excess Plans")) shall adopt
such resolutions or take such other actions as may be
required (in form and substance satisfactory to Parent) to
provide that the Nonqualified Excess Plans shall terminate
immediately prior to the Effective Time, provided further
that the distribution or payout of account balances with
respect to the Nonqualified Excess Plans shall not be made
until the last day of the month following the six month
anniversary of the termination of such plans. The Parent
shall cause the Surviving Corporation to maintain
sufficient funds to meet the Company's obligation to pay out
such account balances which amounts as of the date of this
Agreement are set forth in Section 5.16 of the Company
Disclosure Letter.
Section 5.17 Title Insurance.
The Company shall use reasonable
efforts to assist the Parent in obtaining, at Closing, from
First American Title Insurance Company and Commonwealth Land
Title Company (collectively, the "Title Company") title
insurance policies, in such amounts as the Parent reasonably
determines to be the value of the Owned Real Property or
Leased Real Property insured thereunder (the "Title
Policies"). It is anticipated that each of the Title
Policies shall provide extended coverage over the general or
standard exceptions and have those endorsements attached
thereto which are customary and reasonable for a transaction
involving real property of this value and type. The Company
shall provide the Title Company with such affidavits,
undertaking or other assurances as may reasonably be
requested by the Title Company to issue the Title Policies.
The Parent shall pay all fees, costs and expenses with
respect to the Title Commitments and Title Policies.
Section 5.18 Surveys.
The Company shall use reasonable best
efforts to assist the Parent in obtaining, before Closing, a
survey for each Owned Real Property and Leased Real
Property, dated no earlier than the date of this Agreement,
prepared by a licensed surveyor satisfactory to the Parent,
conforming to 2005 ALTA/ACSM Minimum Detail Requirements for
Urban Land Title Surveys, and in a form reasonably
satisfactory to the Parent (the "Surveys"). The Parent
shall pay all fees, costs and expenses with respect to the
Surveys.
ARTICLE VI
CONDITIONS TO THE CONSUMMATION OF THE MERGER
Section 6.1 Conditions to the Obligations of Each Party
. The respective obligation of each
party to consummate the Merger and the other transactions
contemplated hereby is subject to the satisfaction at or
prior to the Closing Date of each of the following
conditions, any of which may be waived by the written
agreement of the parties:
(a) the Company shall have obtained the Company
Stockholders Approval;
(b) no order, decree, ruling, judgment or injunction
will have been enacted, entered, promulgated or enforced by any
Governmental Authority of competent jurisdiction making
illegal or otherwise prohibiting the Merger and the
consummation of the transactions contemplated by this
Agreement substantially on the terms contemplated hereby,
and continue to be in effect; and
(c) all applicable waiting periods under the HSR Act will
have expired or been terminated.
Section 6.2 Conditions to the Obligation of the Company.
The obligations of the Company to
consummate the Merger and the other transactions
contemplated hereby, are subject to the satisfaction at or
prior to the Closing Date of each of the following
conditions, any of which may be waived, in writing,
exclusively by the Company:
(a) the representations and warranties of the
Parent and the Merger Subsidiary contained herein (which
for purposes of this subparagraph shall be read as though
none of them contained any Parent Material Adverse Effect
or materiality qualification) shall be true and correct in
all respects as of the Closing Date with the same effect as
though made as of the Closing Date (provided that, any
representations and warranties made as of a specified date
shall be required only to continue on the Closing Date to be
true and correct as of such specified date), except for any
failure of such representations and warranties to be true and
correct that, individually or in the aggregate, would not
reasonably be expected to have a Parent Material Adverse Effect;
(b) each of the Parent and the Merger Subsidiary shall have
performed or complied with in all material respects all
covenants and obligations required to be performed or
complied with by it under this Agreement at or prior to the
Effective Time; and
(c) the Parent shall have delivered to the Company a
certificate, dated the Closing Date and signed by an
executive officer of the Parent, certifying the satisfaction
of the conditions set forth in subsections (a) and
(b) above.
Section 6.3 Conditions to the Obligation of the Parent
and the Merger Subsidiary.
The obligations of the Parent and the
Merger Subsidiary to consummate the Merger and the other
transactions contemplated hereby, are subject to the
satisfaction at or prior to the Closing Date of each of the
following conditions, any of which may be waived, in
writing, exclusively by the Parent:
(a) the representations and warranties of the Company
contained herein (which for purposes of this subparagraph
shall be read as though none of them contained any Company
Material Adverse Effect or materiality qualification) shall
be true and correct in all respects as of the Closing Date
with the same effect as though made as of the Closing Date
(provided that, any representations and warranties made as
of a specified date shall be required only to continue on
the Closing Date to be true and correct as of such specified
date), except for any failure of such representations and
warranties to be true and correct that, individually or in
the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect;
(b) the Company shall have performed or complied with
in all material respects all obligations required to be
performed or complied with by it under this Agreement at or
prior to the Effective Time;
(c) since the Agreement Date, there shall have been no
Company Material Adverse Effect;
(d) the Company shall have delivered to the Parent a
certificate, dated the Closing Date and signed by an
executive officer of the Company, certifying the
satisfaction of the conditions set forth in subsections (a)
through (c) above;
(e) the Company or its Subsidiaries shall have received
the proceeds of the sale leaseback transaction with Drawbridge
immediately prior to the Effective Time, and the Parent and
the Merger Subsidiary shall have received the other proceeds
of the Financing, in each case on terms that are no less
favorable in substance to the Parent, the Merger Subsidiary
or the Surviving Corporation thereunder than those set forth
in the Commitment Letters or the Financing Agreements, as
the case may be; and
(f) the Company shall have delivered an affidavit meeting
the requirements of Code Section 1445(b)(3) and the
regulations promulgated thereunder, certifying that either:
(i) the Company is not and has not been a United States real
property holding corporation (within the meaning of Code
Section 897(c)(2)) during the period described in Code
Section 897(c)(1)(A)(ii); or (ii) as of the Effective Time,
interests in the Company are not United States real property
interests by reason of Code Section 897(c)(1)(B).
Section 6.4 Frustration of Closing Conditions.
None of the Company, the Parent or
the Merger Subsidiary may rely on the failure of any
condition set forth in Sections 6.1, 6.2 or 6.3, as the case
may be, to be satisfied if such party's material breach of
this Agreement has been a principal cause of the failure of
such condition to be satisfied.
ARTICLE VII
TERMINATION
Section 7.1 Termination.
This Agreement may be terminated at
any time prior to the Effective Time, whether before or,
subject to the terms hereof, after the Company Stockholders
Approval has been obtained:
(a) by mutual written agreement of the Parent and the
Company;
(b) by either the Parent or the Company, if:
(i) the Closing has not occurred by January 15,
2007 (the "Outside Date"); provided, that the party seeking to
terminate this Agreement pursuant to this
subsection (b)(i) has not breached in any material respect
its obligations under this Agreement in any manner that has
been the principal cause of, or resulted in, the failure of
the Closing to occur on or before such date;
(ii) (A) there are any Laws that prohibit or
make the Merger illegal, or if an order, decree, ruling, judgment
or injunction has been entered by a Governmental Authority of
competent jurisdiction permanently restraining, enjoining or
otherwise prohibiting the Merger and such order, decree,
ruling, judgment or injunction has become final and non-
appealable, and (B) the party seeking to terminate this
Agreement pursuant to this subsection (b)(ii) has used its
reasonable efforts to resist, resolve or remove such Laws,
order, decree, ruling, judgment or injunction;
(iii) at the Company Stockholder Meeting
(including any adjournment or postponement thereof), the Company
Stockholders Approval has not been obtained, unless such
failure to obtain the Company Stockholders Approval is the
result of a material breach of this Agreement by the party
seeking to terminate this Agreement; or
(iv) any one of the following shall have
occurred; provided, however, that the party seeking to terminate
this Agreement pursuant to this subsection (b)(iv) has used
reasonable efforts to resist, resolve or remove the impediments
to the Closing set forth in subparagraphs (A), (B), and (C) of this
subsection (b)(iv):
(A) the waiting period applicable
to the consummation of the Merger under the HSR Act shall
not have expired or been terminated by the Outside Date;
(B) any Governmental Authority
files a complaint or otherwise commences a proceeding
seeking a judgment, injunction, order or decree enjoining
the consummation of the Merger or restraining or prohibiting
the operation of the business of the Parent or any of its
Subsidiaries or the Company or any of its Subsidiaries after
the Effective Time; or
(C) the Parent receives notice
that the United States Federal Trade Commission has
authorized its staff to file a complaint, or that the
Assistant Attorney General or other appropriate official at
the United States Department of Justice has authorized the
staff of the Antitrust Division to seek a preliminary
injunction, as the case may be, enjoining consummation of
the Merger;
(c) by the Company:
(i) if (A) the representations and warranties
of the Parent and/or the Merger Subsidiary contained in Article IV
of this Agreement fail to be true and correct in any respect that
causes a failure of the condition set forth in
Section 6.2(a) or (B) the Parent or the Merger Subsidiary
materially breaches or materially fails to perform its
covenants and other agreements contained herein; provided
that, in each of the foregoing clauses (A) and (B), such
breach or failure cannot be or has not been cured in all
material respects within thirty (30) days after the
Company's written notice thereof to the Parent or the Merger
Subsidiary; or
(ii) prior to obtaining the Company Stockholders
Approval, if (A) the Board of Directors of the Company approves and
authorizes the Company to enter into a definitive agreement
providing for the implementation of a Superior Proposal, and
(B) immediately following termination of this Agreement the
Company enters into such definitive agreement; provided
that, concurrent with the termination of this Agreement
pursuant to this subsection and as a condition precedent
thereof, the Company pays to the Parent the Company
Termination Fee and Expense Reimbursement in accordance with
Sections 7.3 and 7.4; or
(iii) if (a) either of the Commitment Letters
expires or terminates prior to the Outside Date (or is amended,
such that the total amount of the Financing is not sufficient to
consummate the transactions contemplated hereby), and Parent
has not secured a replacement Commitment Letter (on terms
that are no less favorable, in substance, to Parent and the
Merger Subsidiary than the expired or terminated Commitment
Letter or Letters) within thirty (30) days after the date of
such expiration, termination or amendment.
(d) by the Parent if:
(i) (A) the representations and warranties
of the Company contained in Article III of this Agreement fail
to be true and correct in any respect that causes a failure of the
conditions set forth in Section 6.3(a) of this Agreement or
(B) the Company materially breaches or materially fails to
perform its covenants and other agreements contained herein;
provided that, in each of the foregoing clauses (A) and (B),
such breach or failure cannot be or has not been cured in
all material respects within thirty (30) days after the
Parent's written notice thereof to the Company;
(ii) (A) the Company's Board of Directors
(or any committee thereof) withdraws or modifies in a manner
adverse to the Parent or Merger Subsidiary the Company
Recommendation or exempts any Person other than the Parent or
Merger Subsidiary from the provisions of Chapter 2 of Title 35 of
the SC Code or the Rights Agreement; (B) the Company's Board
of Directors fails to reconfirm the Company Recommendation
within ten (10) business days after receipt of a request by
the Parent, provided that, any such request may be made only
after notice of any of the following events (as any of the
following events may occur from time to time): (1) the
public announcement of the receipt by the Company of an
Acquisition Proposal or any material change thereto; or
(2) a public announcement of any transaction to acquire a
material portion of the Company Common Stock by a Person
other than the Merger Subsidiary, the Parent or any of their
Affiliates; or
(iii) the Company enters into a definitive agreement
with respect to an Acquisition Proposal, or approves or
recommends any Acquisition Proposal.
Section 7.2 Effect of Termination.
If any party terminates this
Agreement pursuant to Section 7.1 above, all rights and
obligations of the parties hereunder shall terminate without
any liability of any party to any other party, other than
the provisions of this Section 7.2, Sections 7.3, 7.4 and
7.5 and Article VIII of this Agreement which shall remain in
full force and effect and survive any termination of this
Agreement; provided, however, that, subject to such
provisions, any such termination shall not relieve any party
hereto from liability for any willful breach of this
Agreement; it being understood that payment of the amounts
described in Sections 7.3 and 7.4 and 7.5 will not be in
lieu of damages incurred in the event of any such willful
breach. No termination of this Agreement shall affect the
obligations of the parties contained in the Confidentiality
Agreement, all of which obligations shall survive
termination of this Agreement in accordance with its terms.
Section 7.3 Fees and Expenses.
(a) Except as set forth in this Section 7.3 and in
Section 7.4, all fees and expenses incurred in connection
with the transactions contemplated hereby shall be paid by
the party incurring such expenses, whether or not the Merger
is consummated.
(b) If this Agreement is validly terminated pursuant
to Section 7.1(c)(ii), then the Company shall (i) pay to the
Parent a fee of $25,000,000 less the amount set forth in
clause (ii) of this Section 7.3(b) (the "Company Termination
Fee") and (ii) reimburse for the Parent's documented out-of-
pocket expenses in connection with the transactions
contemplated by this Agreement up to $10,000,000 (the
"Expense Reimbursement") at the time set forth in
Section 7.4.
(c) If this Agreement is validly terminated pursuant
to Section 7.1(d)(ii) or Section 7.1(d)(iii), then the Company
will pay to the Parent the Company Termination Fee and the
Expense Reimbursement at the time set forth in Section 7.4.
(d) If this Agreement is validly terminated pursuant
to Section 7.1(b)(i), Section 7.1(b)(iii), or Section
7.1(d)(i), then if (A) prior to such termination there
exists an Acquisition Proposal (whether or not such offer or
proposal has been rejected or has been withdrawn prior to
the time of such termination) and (B) within twelve (12)
months of such termination, the Company or any of its
Subsidiaries accepts a written offer for, or otherwise
enters into a definitive agreement to consummate or
consummates, an Acquisition Proposal, then the Company shall
pay to the Parent the Company Termination Fee and the
Expense Reimbursement at the time set forth in Section 7.4;
provided, however, no payment shall be due to the Parent
pursuant to this Section 7.3(d) if this Agreement is
terminated by the Parent pursuant to Section 7.1(b)(i) under
circumstances in which the Parent Termination Fee set forth
in Section 7.5(a) is payable. For purposes of the foregoing
clause (d) only, references in the definition of the term
"Acquisition Proposal" to the figure "20%" shall be deemed
to be replaced by the figure "50%."
(e) Notwithstanding anything to the contrary contained
herein, if the Company pays the Parent both the Company
Termination Fee and the Expense Reimbursement, the Company
Termination Fee shall be reduced so that the total amount
paid by the Company to the Parent shall be no more than
$25,000,000.
Section 7.4 Other Company Termination Fee and Expense
Reimbursement Matters.
(a) The parties shall make all payments required by
Section 7.3 by wire transfer of immediately available funds
to an account designated by the receiving party in writing.
(b) The Company Termination Fee and the Expense
Reimbursement shall be paid as follows:
(i) if payments are due pursuant to Section
7.3(b), then the Expense Reimbursement and the Company
Termination Fee shall be paid to the Parent by the Company
concurrently with, and as a condition precedent to, such
termination of this Agreement by the Company pursuant to
Section 7.1(c)(ii);
(ii) if payments are due pursuant to Section
7.3(c), then the Expense Reimbursement and the Company
Termination Fee, as applicable, shall be paid to the Parent
by the Company within two (2) business days following such
termination of this Agreement by the Parent; and
(iii) if payments are to be made pursuant to
Section 7.3(d), then the Expense Reimbursement and the
Company Termination Fee shall be paid to the Parent by the
Company on the earlier of the date of the Company's entry
into a definitive agreement providing for, or consummating,
an Acquisition Proposal.
(c) The parties agree that (i) the provisions of
Sections 7.3 and 7.4 are an integral part of the
transactions contemplated by this Agreement and (ii) the
amount of, and basis for payment of, the Company Termination
Fee and Expense Reimbursement are reasonable and appropriate
in all respects. Accordingly, if the Company fails to pay
in a timely manner a Company Termination Fee and/or Expense
Reimbursement, and in order to obtain such payment, the
Parent makes a claim that results in a judgment for the
amounts set forth in Section 7.3, the Company shall pay to
the Parent its reasonable costs and expenses (including
reasonable attorneys' fees and expenses) in connection with
such suit, together with interest on the amount set forth in
Section 7.3 at the rate announced by Credit Suisse as its
prime rate in effect on the date such payment was required
to be made hereunder.
Section 7.5 Parent Termination Fee.
(a) If this Agreement is terminated by the Company
pursuant to Section 7.1(c)(iii) or if all conditions to Closing set
forth in Article VI are satisfied (other than the condition
in Section 6.3(e) and conditions that, by their nature, are
to be and are capable of being satisfied at Closing), and
this Agreement is terminated pursuant to Section 7.1(b)(i)
(a "Parent Payment Event"), then Parent shall pay to Company
an amount (the "Parent Termination Fee") equal to
$7,500,000; provided that, no Parent Payment Event shall be
deemed to have occurred and no Parent Termination Fee shall
be payable if the Company shall have breached in any
material respect any of its representations, warranties or
covenants, provided that, such breach cannot be or has not
been cured in all material respects within thirty (30) days
after the Parent's written notice thereof to the Company, or
if there shall have been a failure of the conditions set
forth in Section 6.3(c). Such payment shall be made as
promptly as reasonably practicable (and, in any event,
within two (2) business days following the date such payment
becomes due and payable) by wire transfer of immediately
available funds.
(b) The parties agree that (i) the provisions of this
Section 7.5 are an integral part of the transactions
contemplated by this Agreement and (ii) the amount of, and
basis for payment of, the Parent Termination Fee are
reasonable and appropriate in all respects. Accordingly, if
the Parent fails to pay in a timely manner the Parent
Termination Fee, and in order to obtain such payment, the
Company makes a claim that results in a judgment for the
amounts set forth in Section 7.5(a), the Parent shall pay to
the Company its reasonable costs and expenses (including
reasonable attorneys' fees and expenses) in connection with
such suit, together with interest on the amount set forth in
Section 7.5(a) at the rate announced by Credit Suisse as its
prime rate in effect on the date such payment was required
to be made hereunder.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Nonsurvival of Representations.
None of the representations and
warranties contained in this Agreement or in any schedule,
certificate, instrument or other writing delivered pursuant
to this Agreement shall survive the Merger or the
termination of this Agreement. This Section 8.1 shall not
limit any covenant or agreement of the parties hereto which
by its terms contemplates performance after the Effective
Time and this Article VIII shall survive the Effective Time.
Section 8.2 Specific Performance.
The parties agree that irreparable
damage would occur and the non-breaching party could not be
made whole by monetary damages in the event any of the
provisions of this Agreement were not performed in
accordance with their specific terms, and it is accordingly
agreed that the parties shall be entitled to specific
performance of the terms of this Agreement, without posting
a bond or other security, this being in addition to any
other remedy to which they are entitled hereunder, at law or
in equity.
Section 8.3 Successors and Assigns.
Neither this Agreement nor any of the
rights, interests or obligations provided by this Agreement
shall be assigned by any of the parties (whether by
operation of law or otherwise) without the prior written
consent of the other parties. Subject to the preceding
sentence, this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective
successors and permitted assigns.
Section 8.4 Amendment.
This Agreement may be amended in
accordance with its terms by the execution and delivery of a
written instrument by or on behalf of the Parent, the Merger
Subsidiary and the Company at any time before or after the
Company Stockholders Approval; provided that, after
obtaining the Company Stockholders Approval, no amendment to
this Agreement shall be made without the approval of the
stockholders of the Company if and to the extent such
approval is required under applicable Law or in accordance
with the rules of any relevant stock exchange.
Section 8.5 Severability.
Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be
effective and valid under applicable Laws, but if any
provision of this Agreement is held to be prohibited by or
invalid under applicable Laws, such provision shall be
ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this
Agreement. The parties hereto agree to replace any such
void or unenforceable provision of this Agreement with a
valid and enforceable provision that shall achieve, to the
greatest extent possible, the economic, business and other
purposes of such void or unenforceable provision.
Section 8.6 Extension of Time; Waiver.
Except as set forth elsewhere in this
Agreement, at any time prior to the Effective Time, the
parties may extend the time for performance of or waive
compliance with any of the covenants, agreements or
conditions of the other parties to this Agreement, and may
waive any breach of the representations or warranties of
such other parties. No agreement extending or waiving any
provision of this Agreement shall be valid or binding unless
it is in writing and is executed and delivered by or on
behalf of the party against which it is sought to be
enforced. Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.
Section 8.7 Counterparts.
This Agreement may be executed in two
or more counterparts (whether by facsimile or otherwise),
each of which shall be deemed an original, but all such
counterparts taken together shall constitute one and the
same Agreement.
Section 8.8 Descriptive Headings.
The descriptive headings of this
Agreement are inserted for convenience only and shall not
constitute a part of this Agreement.
Section 8.9 Notices.
Any notice, request, instruction or
other document to be given hereunder shall be sent in
writing and delivered personally, sent by reputable,
overnight courier service (charges prepaid), sent by
registered or certified mail, postage prepaid, or by
facsimile, according to the instructions set forth below.
Such notices shall be deemed given: at the time delivered by
hand, if personally delivered; one business day after being
sent, if sent by reputable, overnight courier service; at
the time received, if sent by registered or certified mail;
and at the time when confirmation of successful transmission
is received by the sending facsimile machine, if sent by
facsimile.
If to the Parent or Buffets, Inc.
the Merger ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
Subsidiary, to: ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (651) 365-263
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention:H. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
Executive Vice President
with a copy (which ▇▇▇▇, Weiss, Rifkind,
shall not constitute ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
notice) to: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention:▇▇▇▇ ▇. ▇▇▇▇▇▇▇,Esq.
If to the Company, Ryan's Restaurant Group, Inc.
to: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention:▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Senior Vice President - Finance
with copies (which Wyche, Burgess, ▇▇▇▇▇▇▇ &
shall not constitute ▇▇▇▇▇▇, P.A.
notice) to: ▇.▇. ▇▇▇ ▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ (29601)
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
and ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
2700 International Tower
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention:▇▇▇▇▇▇ ▇. ▇▇▇, Esq.
or to such other address or to the attention of such other
party that the recipient party has specified by prior
written notice to the sending party in accordance with the
preceding.
Section 8.10 No Third-Party Beneficiaries.
Except as provided pursuant to
Section 5.9, the terms and provisions of this Agreement will
not confer third-party beneficiary rights or remedies upon
any person or entity other than the parties hereto and their
respective successors and permitted assigns. The provisions
of Section 5.9 are intended to be for the benefit of, and
shall be enforceable by, the Indemnified Parties and shall
be binding on the Parent and the Surviving Corporation and
their successors and assigns. In the event the Parent or
the Surviving Corporation or one of their successors or
assigns (i) consolidates with or merges into any other
Person and shall not be the continuing or surviving
corporation or entity in such consolidation or merger or
(ii) transfers all or substantially all of its properties
and assets to any Person, then, and in each case, proper
provision shall be made so that the successors or assigns of
the Parent or the Surviving Corporation, as the case may be,
honor the obligations set forth in Section 5.9.
Section 8.11 Entire Agreement.
This Agreement, the Confidentiality
Agreement, the Company Disclosure Letter and the other
documents referred to herein collectively constitute the
entire agreement among the parties and supersede any prior
and contemporaneous understandings, agreements or
representations by or among the parties, written or oral,
that may have related in any way to the subject matter
hereof.
Section 8.12 Construction.
For purposes of this Agreement:
(a) References to "applicable" Law or Laws with
respect to a particular Person, thing or matter shall include
only such Law or Laws as to which the Governmental Authority
that enacted or promulgated such Law or Laws has jurisdiction
over such Person, thing or matter as determined under such
Laws.
(b) Whenever the context requires, the singular
number shall include the plural, and vice versa, the masculine
gender shall include the feminine and neuter genders, the
feminine gender shall include the masculine and neuter
genders, and the neuter gender shall include masculine and
feminine genders.
(c) The words "include" and "including," and variations
thereof, shall not be deemed to be terms of limitation, but
rather shall be deemed to be followed by the words "without
limitation."
(d) Except as otherwise indicated, all references in this
Agreement to "Sections" and "Exhibits" are intended to refer
to Sections and Exhibits to this Agreement.
(e) The terms "hereof," "hereunder," "herein" and words of
similar import shall refer to this Agreement as a whole and
not to any particular provision of this Agreement.
(f) As it relates to the Company, "knowledge" means the
actual knowledge of the persons set forth in Section 8.12 of
the Company Disclosure Letter with no further duty of
inquiry.
(g) Each party hereto has participated in the drafting of
this Agreement, which each party acknowledges is the result
of extensive negotiations between the parties, and
consequently, this Agreement shall be interpreted without
reference to any rule or precept of Law to the effect that
any ambiguity in a document be construed against the
drafter.
Section 8.13 Governing Law.
THIS AGREEMENT AND THE COMPANY
DISCLOSURE LETTER WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF SOUTH CAROLINA,
WITHOUT GIVING EFFECT TO ANY LAW OR RULE THAT WOULD CAUSE
THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF SOUTH
CAROLINA TO BE APPLIED.
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective
authorized officers as of the day and year first above
written.
BUFFETS, INC.
By: /s/R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr.
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr.
Title: Chief Executive Officer
BUFFETS SOUTHEAST, INC.
By: /s/R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr.
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr.
Title: Chief Executive Officer
RYAN'S RESTAURANT GROUP, INC.
By: /s/▇▇▇▇▇▇▇ ▇. Way
Name: ▇▇▇▇▇▇▇ ▇. Way
Title: Chairman and Chief Executive Officer
EXHIBIT A
Form of Articles of Incorporation
Buffets Southeast, Inc.
Name of Corporation
STATE OF SOUTH CAROLINA
SECRETARY OF STATE
ARTICLES OF INCORPORATION
TYPE OR PRINT CLEARLY IN BLACK INK
1. The name of the proposed corporation is Buffets Southeast, Inc.
2. The initial registered office of the corporation is
1301 Gervais Street, 17th Floor
Street Address
Columbia Richland SC 29201
City County State Zip Code
and the initial registered agent at such address is:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Print Name
I hereby consent to the appointment as registered agent of the
corporation
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Agent's Signature
3. The corporation is authorized to issue shares of stock as
follows. Complete "a" or "b", whichever is applicable:
a.(x) The corporation is authorized to issue a
single class of shares, the total number of shares
authorized is 1,000
b. The corporation is authorized to issue more than
one class of shares:
Class of Shares Authorized No. of Each Class
The relative rights, preferences, and limitations of the
shares of each class, and of each series within a class, are
as follows:
4. The existence of the corporation shall begin as of the
filing date with the Secretary of State unless a delayed
date is indicated (See Section 33-1-230(b) of the 1976 South
Carolina Code of Laws, as amended
5. The optional provisions which the corporation includes in
the articles of incorporation are as follows (See the
applicable provisions of Sections 33-2-102, 35-2-105, and 35-
2-221 of the 1976 South Carolina Code of Laws, as amended).
6. The name, address, and signature of each incorporator are
as follows (only one is required)
a.▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇; ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Address
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Signature
b.
Name
Address
Signature
c.
Name
Address
Signature
7. I, ▇▇▇▇ ▇. ▇▇▇▇▇▇, an attorney licensed to
practice in the State of South Carolina, certify that the
corporation to whose articles of incorporation this
certificate is attached has complied with the requirements
of Chapter 2, Title 33 of the 1976 South Carolina Code of
Laws, as amended, relating to the articles of incorporation.
Date July 21, 2006 /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Signature
▇▇▇▇ ▇. ▇▇▇▇▇▇
Type or Print Name
▇▇▇▇▇▇ Law Firm, P.A.
Address
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Telephone Number
EXHIBIT B
Form of Bylaws
BYLAWS
OF
BUFFETS SOUTHEAST, INC.
ARTICLE I. OFFICE
The principal office of the Corporation shall be located in
Eagan, Minnesota, or in such other location as the Board of
Directors may designate. The Corporation may have such other
offices, either within or without South Carolina, as the Board of
Directors may designate or as the business of the Corporation may
require from time to time.
The registered office of the Corporation required by the
South Carolina Business Corporation Act of 1988 to be maintained
in South Carolina may be, but need not be, identical with the
principal office of the Corporation, and the address of the
registered office may be changed from time to time by the
Corporation in the manner provided by law.
ARTICLE II. SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the
shareholders shall be held within six months of the end of each
fiscal year for the purpose of electing directors and for the
transaction of such other business as may come before the
meeting. The exact time and place of the annual meeting shall be
determined by the Board of Directors.
Section 2. Substitute Annual Meeting. If the annual
meeting shall not be held within the period designated by these
bylaws, a substitute annual meeting may be called in accordance
with the provisions of Section 5 of this Article. A meeting so
called shall be designated and treated for all purposes as the
annual meeting.
Section 3. Special Meetings. Special meetings of the
shareholders, for any purpose or purposes, unless otherwise
prescribed by statute, may be called by the Board of Directors
and shall be called if the holders of at least ten percent of all
the votes entitled to be cast on any issue proposed to be
considered at the proposed special meeting sign, date and deliver
to the Corporation's Secretary one or more written demands for
the meeting describing the purpose for which it is to be held.
Section 4. Place of Meeting. The Board of Directors may
designate any place, either within or without South Carolina, as
the place of meeting for any annual meeting or for any special
meeting. A waiver of notice signed by all shareholders entitled
to vote at a meeting may designate any place, either within or
without South Carolina, as the place for holding such meeting. If
no designation is made, the place of meeting shall be the
principal office of the Corporation.
Section 5. Notice of Meeting. Notice of the date, time
and place of each annual and special meeting shall be given no
fewer than 10 nor more than 60 days before the date of the
meeting. Such notice shall be given in writing unless oral notice
is reasonable under the circumstances. Notice may be communicated
in person, by telephone, telegraph, teletype or other form of
wire or wireless communication or by mail or private carrier or
any other lawful means, by or at the direction of the President,
or the Secretary, or the officer or persons calling the meeting,
to each shareholder of record entitled to vote at such meeting.
If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the shareholder
at such shareholder's address as it appears on the stock transfer
books of the Corporation, with postage thereon prepaid.
In the case of an annual or substitute annual meeting,
the notice of meeting need not specifically state the business to
be transacted thereat. In the case of a special meeting, the
notice of meeting shall state the purpose or purposes for which
the meeting is called.
When a meeting is adjourned, it is not necessary to
give any notice of the adjourned meeting other than by
announcement at the meeting at which the adjournment is taken. If
a new record date for the adjourned meeting is or must be fixed,
however, notice of the adjourned meeting must be given to persons
who are shareholders as of the new record date.
Section 6. Fixing of Record Date. For the purpose of
determining shareholders entitled to notice of a shareholders'
meeting, to demand a special meeting of shareholders, to vote or
to take any other action, or shareholders entitled to receive a
distribution, or in order to make a determination of shareholders
for any other proper purpose, the Board of Directors of the
Corporation may fix a future date as the record date, such date
in any case to be not more than 70 days before the meeting or
action date requiring such determination of shareholders. If no
record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or
shareholders entitled to receive a distribution, the close of
business on the day before the first notice of the meeting is
delivered to shareholders or the date on which the Board of
Directors authorizes such distribution, as the case may be, shall
be the record date for such determination of shareholders. When a
determination of shareholders entitled to notice of or to vote at
any meeting of shareholders has been made as provided in this
section, such determination shall apply to any adjournment
thereof unless the Board of Directors fixes a new record date
which it must do if the meeting is adjourned to a date more than
120 days after the date fixed for the original meeting.
Section 7. Shareholders' Lists. After fixing a record
date for a meeting, the officer or agent having charge of the
stock transfer books shall prepare a list of shareholders
entitled to notice of the meeting, arranged in alphabetical
order, showing the address of, and the number of shares held by,
each such shareholder. The list must be arranged by voting group
and within each voting group by class or series of shares. The
list shall be available for inspection by any shareholder from
the date notice of the meeting to which it pertains is first
given and continuing through the meeting at the Corporation's
principal office or a place identified in the meeting notice in
the city where the meeting is to be held. Any shareholder, or
such shareholder's agent or attorney, shall be entitled on
written demand to inspect and, subject to the requirements of
Section ▇▇-▇▇-▇▇▇ of the South Carolina Business Corporation Act
of 1988, or any successor thereto, as amended from time to time,
to copy the list, during regular business hours and at such
shareholder's expense, during the period it is available for
inspection. The list shall also be available at the meeting and
any shareholder, or such shareholder's agent or attorney, shall
be entitled to inspect the list at any time during the meeting or
any adjournment.
The Corporation's original stock transfer books shall
be prima facie evidence as to who are the shareholders entitled
to examine such list or to receive notice of or vote at any
meeting of shareholders.
Section 8. Quorum. Except as otherwise provided by law
or the Corporation's articles of incorporation, a majority of the
votes entitled to be cast on a matter by a voting group,
represented in person or by proxy, shall constitute a quorum of
that voting group for action on that matter. If less than a
majority of the outstanding shares are represented at a meeting,
a majority of the shares so represented may adjourn the meeting
from time to time. No further notice shall be required for an
adjourned meeting unless a new record date is or must be fixed
for such meeting. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted
which might have been transacted at the meeting as originally
notified. Once a share is represented for any purpose at a
meeting, it shall be considered present for quorum purposes for
the remainder of the meeting and for any adjournment of that
meeting unless a new record date is or must be fixed for the
adjourned meeting. Shares entitled to vote as a separate voting
group may take action on a matter only if a quorum of those
shares exists with respect to that matter. Action may be taken by
one voting group on a matter even though no action is taken by
another voting group entitled to vote on the matter.
Section 9. Proxies. A shareholder may vote such
shareholder's shares in person or by proxy. A shareholder may
appoint a proxy to vote or otherwise act for such shareholder,
including giving waivers and consents, by signing an appointment
form, either in person or by such shareholder's attorney in fact.
An appointment of a proxy shall be effective when received by the
Secretary of the Corporation or other officer or agent authorized
to tabulate votes.
Section 10. Voting of Shares. Except as otherwise
provided by law or the Corporation's articles of incorporation,
each outstanding share of the Corporation, regardless of class,
shall be entitled to one vote upon each matter submitted to a
vote at a meeting of shareholders.
If a quorum exists, action on a matter (other than the
election of directors) by a voting group shall be approved if the
votes cast within the voting group favoring such action exceed
the votes cast opposing such action unless a greater number of
affirmative votes is required by law or the articles of
incorporation of the Corporation.
Section 11. Informal Action by Shareholders. Any action
required or permitted to be taken at a meeting of the
shareholders, including the annual meeting, may be taken without
a meeting if the action is taken by all the shareholders entitled
to vote on the action. The action must be evidenced by one or
more written consents describing the action taken, signed by all
the shareholders entitled to vote on the action, and delivered to
the Corporation for inclusion in the minutes or filing with the
corporate records. Such written consents may be executed in one
or more counterparts.
Section 12. Order of Business. The order of business at
the annual meeting and, so far as practicable at all other
meetings of the shareholders, shall be as follows:
1. Call of roll or other method of ascertaining the
amount of stock entitled to voting rights which is
represented in person or by proxy
2. Proof of due notice of meeting
3. Reading and disposal of any unapproved minutes
4. Reports of officers
5. Election of directors
6. Unfinished business
7. New business
8. Adjournment
ARTICLE III. BOARD OF DIRECTORS
Section 1. General Powers. The business and affairs of
the Corporation shall be managed under the direction of its Board
of Directors.
Section 2. Number, Tenure and Qualifications. The number
of directors of the Corporation shall be three, or such other
number as may be determined from time to time by the Board of
Directors. At each annual meeting, the shareholders shall elect
directors to hold office until the next annual meeting. Except as
otherwise required by law or the Corporation's articles of
incorporation, any directorships not filled by the shareholders
shall be treated as vacancies to be filled by and in the
discretion of the Board of Directors. Each director shall hold
office until the next annual meeting of shareholders and until
such director's successor shall have been elected and qualified
or until such director's earlier resignation, removal from
office, death or incapacity. Directors need not be residents of
South Carolina or shareholders of the Corporation.
Section 3. Regular Meetings. A regular meeting of the
Board of Directors shall be held without other notice than this
bylaw immediately after, and at the same place as, the annual
meeting of the shareholders. The Board of Directors may provide,
by resolution, the time and place, either within or without South
Carolina, for the holding of additional regular meetings.
Section 4. Special Meetings. Special meetings of the
Board of Directors may be held at any time and place upon the
call of any director. Special meetings may be held at any time
and place and without special notice by unanimous consent of the
directors or such meetings may be held by telephone or
teleconference.
Section 5. Notice. Notice of the time, date and place of
any special meeting shall be given at least two days previously
thereto. Such notice shall be given in writing unless oral notice
is reasonable under the circumstances. Notice may be communicated
in person, by telephone, telegraph, teletype or other form of
wire or wireless communication or by mail or private carrier or
any other lawful means. A director's attendance at or
participation in a meeting shall constitute a waiver of notice of
such meeting, unless the director at the beginning of the meeting
(or promptly upon such director's arrival) objects to holding the
meeting or transacting business at the meeting and does not
thereafter vote for or assent to action taken at the meeting.
Notice of an adjourned meeting need not be given if the time and
place are fixed at the meeting adjourning.
Section 6. Quorum. A majority of the number of directors
fixed as provided in Section 2 of this Article III shall
constitute a quorum for the transaction of business at any
meeting of the Board of Directors, but if less than such majority
is present at a meeting, a majority of the directors present may
adjourn the meeting from time to time without further notice.
Section 7. Manner of Acting. The act of the majority of
the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors, except as otherwise
provided in this Section.
The creation of a committee and the appointment of
members to it must be approved by the greater (i) a majority of
all the directors in office when the action is taken or (ii) the
majority of the number of directors fixed as provided in Section
2 of this Article III.
Section 8. Vacancies. Except as otherwise expressly
required by the provisions of the South Carolina Business
Corporation Act of 1988 or successor thereto, as amended from
time to time, or the Corporation's articles of incorporation, any
vacancy occurring in the Board of Directors may be filled by the
affirmative vote of a majority of the remaining directors though
less than a quorum of the Board of Directors. A director elected
to fill a vacancy shall hold office only until the next
shareholders' meeting at which directors are elected and until a
successor shall be elected and qualified.
Section 9. Informal Action by Directors. Action required
or permitted to be taken at a meeting of the Board of Directors
may be taken without a meeting if the action is assented to by
all members of the Board of Directors.
Section 10. Order of Business. The regular order of
business at meetings of the Board of Directors shall be as
follows:
1. Reading and disposal of any unapproved minutes
2. Reports of officers
3. Unfinished business
4. New business
5. Adjournment
Section 11. Committees. The Board of Directors then in
office may create one or more committees of the Board of
Directors and appoint members of the Board of Directors to serve
on them. Each committee must have two or more members. To the
extent specified by the Board of Directors, between meetings of
the Board of Directors and subject to such limitations as may be
required by law, the Corporation's articles of incorporation,
these bylaws or imposed by resolution of the Board of Directors,
such committees may exercise all of the authority of the Board of
Directors in the management of the Corporation. The creation of,
delegation of authority to or action by a committee shall not
alone constitute compliance by a director with the standards of
conduct prescribed by the South Carolina Business Corporation Act
of 1988.
Meetings of the committees may be held at any time
on call of the President or of any member of the committee. A
majority of the members shall constitute a quorum for all
meetings. Committees shall keep minutes of their proceedings and
submit them to the next succeeding meeting of the Board of
Directors for approval.
Section 12. Compensation. The Board of Directors may
authorize payment to all directors of a uniform fixed sum for
attendance at each meeting or a uniform stated annual or monthly
fee for serving as directors. Directors who are also salaried
officers of the Corporation shall not receive additional
compensation for service as directors. The Board of Directors may
also authorize the payment of, or reimbursement for, all expenses
of each director related to such director's attendance at
meetings.
ARTICLE IV. OFFICERS
Section 1. Number. The officers of the Corporation shall
be a President, a Treasurer, a Secretary, one or more Vice
Presidents if and when such Vice President(s) shall be deemed
necessary or desirable by the Board of Directors, and such other
officers and assistant officers as the Board of Directors shall
deem necessary or desirable. Any two or more offices may be held
by the same person, and an officer may act in more than one
capacity where action of two or more officers is required.
Section 2. Appointment of Officers. The officers of the
Corporation shall be appointed annually by the Board of Directors
at the first meeting of the Board of Directors held after each
annual meeting of the shareholders or at such time or times as
the Board of Directors shall determine.
Section 3. Removal. Any officer or agent appointed by
the Board of Directors may be removed by the Board of Directors,
with or without cause, whenever in its judgment the best
interests of the Corporation would be served thereby, but such
removal shall be without prejudice to the contract rights, if
any, of the person so removed.
Section 4. Vacancies. A vacancy in an office because of
death, resignation, removal, disqualification or otherwise, may
be filled for the unexpired portion of the term by a person
designated by the Board of Directors.
Section 5. President. The President shall be the chief
executive officer of the Corporation and, subject to the control
of the Board of Directors, shall in general supervise and control
all of the business and affairs of the Corporation. The
President shall, when present, preside at all meetings of the
shareholders. The President may sign, with the Secretary or any
other proper officer of the Corporation thereunto authorized by
the Board of Directors, certificates for shares of the
Corporation and any deeds, mortgages, bonds, contracts or other
instruments which the Board of Directors has authorized to be
executed, except in cases where the signing and execution thereof
shall be expressly delegated by the Board of Directors or by
these bylaws to some other officer or agent of the Corporation,
or shall be required by law to be otherwise signed or executed;
and in general shall perform all duties incident to the office of
President and such other duties as may be prescribed by the Board
of Directors from time to time.
Section 6. Vice Presidents. Each Vice President (if and
when appointed) shall familiarize herself or himself with the
affairs of the Corporation, and shall have such powers and
perform such duties as may be prescribed from time to time by the
President or the Board of Directors. At the request of the
President, or, in the event of the absence or disability of the
President, at the request of the Board of Directors, any Vice
President may act temporarily in the place of the President and
when so acting shall possess all the powers of and perform all
the duties of that officer.
Section 7. Secretary. The Secretary shall: (a) keep the
minutes of the shareholders' and of the Board of Directors' and
its Committees, if any, meetings in one or more books provided
for that purpose; (b) see that all notices are duly given in
accordance with the provisions of these bylaws or as required by
law; (c) be custodian of the corporate records and of the seal of
the Corporation and see that the seal of the Corporation is
affixed to all documents the execution of which on behalf of the
Corporation under its seal is duly authorized; (d) keep a
register of the post office address of each shareholder which
shall be furnished to the Secretary by such shareholder; (e) sign
with the President, or a Vice President, certificates for shares
of the Corporation, the issuance of which shall have been
authorized by resolution of the Board of Directors; (f) have
general charge of the stock transfer books of the Corporation;
(g) authenticate records of the Corporation when such
authentication is required; and (h) in general perform all duties
incident to the office of the Secretary and such other duties as
from time to time may be assigned by the President or the Board
of Directors.
Section 8. Treasurer. The Treasurer shall: (a) have
charge and custody of and be responsible for all funds and
securities of the Corporation, receive and give receipts for
moneys due and payable to the Corporation from any source
whatsoever, and deposit all such moneys in the name of the
Corporation in such banks, trust companies or other depositaries
as shall be selected in accordance with the provisions of Article
V of these bylaws; and (b) in general perform all of the duties
incident to the office of Treasurer and such other duties as from
time to time may be assigned by the President or the Board of
Directors.
Section 9. Compensation. The compensation of the
officers shall be fixed from time to time by the Board of
Directors and no officer shall be prevented from receiving
compensation by reason of the fact that such officer is also a
director of the Corporation.
Section 10. Bonds. Any or all officers and agents shall,
respectively, if required by the Board of Directors, give bonds
for the faithful discharge of their duties in such sums and with
such sureties as the Board of Directors shall determine.
ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. Contracts. The Board of Directors may
authorize any officer or officers or agent or agents to enter
into any contract or execute and deliver any instruments in the
name and on behalf of the Corporation, and such authority may be
general or confined to specific instances.
Section 2. Loans. Except for loans which are incurred in
the ordinary course of business, no loans shall be contracted on
behalf of the Corporation and no evidences of indebtedness shall
be issued in its name unless authorized by a resolution of the
Board of Directors. Such authority may be general or confined to
specific instances.
Section 3. Checks and Drafts. All checks, drafts or
other orders for the payment of money, notes or other evidences
of indebtedness issued in the name of the Corporation shall be
signed by such officer or officers or agent or agents of the
Corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
Section 4. Deposits. All funds of the Corporation not
otherwise employed shall be deposited from time to time to the
credit of the Corporation in such banks, trust companies or other
depositaries as the Board of Directors may select.
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1. Certificates for Shares. Certificates
representing shares of the Corporation shall be in such form as
shall be determined by the Board of Directors. Such certificates
shall be signed by, or bear the facsimile signature of, the
President or Vice President and the Secretary or an Assistant
Secretary and may be sealed with a corporate seal or a facsimile
thereof. All certificates for shares shall be consecutively
numbered or otherwise identified. The name and address of the
person to whom the shares represented thereby are issued, with
the number of shares and date of issue, shall be entered on the
stock transfer books of the Corporation. All certificates
surrendered to the Corporation for transfer shall be canceled and
no new certificate shall be issued until the former certificate
for a like number of shares shall have been surrendered and
canceled, except that in case of a lost, destroyed or mutilated
certificate a new one may be issued therefor upon such terms and
indemnity to the Corporation as the Board of Directors may
prescribe.
Section 2. Transfer of Shares. Transfer of shares of the
Corporation shall be made only (a) on the stock transfer books of
the Corporation by the holder of record thereof or by such
holder's legal representative, who shall furnish proper evidence
of authority to transfer, or by such shareholder's attorney
thereunto authorized by power of attorney duly executed and filed
with the Secretary of the Corporation, and (b) on surrender for
cancellation of the certificate for such shares. The person in
whose name shares stand on the books of the Corporation shall be
deemed by the Corporation to be the owner thereof for all
purposes.
ARTICLE VII. FISCAL YEAR
The fiscal year of the Corporation shall be the calendar
year unless and until otherwise determined by the Board of
Directors.
ARTICLE VIII. DISTRIBUTIONS
The Board of Directors may from time to time authorize, and
the Corporation may make, distributions to its shareholders in
the manner and upon the terms and conditions provided by law and
its articles of incorporation.
ARTICLE IX. SEAL
The Board of Directors may provide a corporate seal which
may be circular in form and shall have inscribed thereon the name
of the Corporation and the word "Seal".
ARTICLE X. WAIVER OF NOTICE
Whenever any notice is required to be given to any
shareholder or director of the Corporation under the provisions
of the South Carolina Business Corporation Act of 1988, or
successor thereto, as amended from time to time, or under the
provisions of the articles of incorporation or bylaws of the
Corporation, a waiver thereof in writing, signed by the person or
persons entitled to such notice, whether before or after the time
stated therein, and delivered to the Corporation for inclusion or
filing with the minutes or corporate records, shall be equivalent
to the giving of such notice.
ARTICLE XI. AMENDMENTS
These bylaws may be amended or repealed and new bylaws may
be adopted by the Board of Directors or the shareholders. Any
notice of a meeting of shareholders at which these bylaws are to
be amended or repealed or new bylaws adopted shall include notice
of such proposed action.