Agreement and Plan of Reorganization - Outback Steakhouse Inc., Outback Steakhouse of Florida Inc., Samuel Tancredi and Tancredi Inc.
AGREEMENT AND PLAN OF REORGANIZATION
AMONG
OUTBACK STEAKHOUSE, INC.
OUTBACK STEAKHOUSE OF FLORIDA, INC.
SAMUEL TANCREDI
AND
TANCREDI, INC.
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TABLE OF CONTENTS
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ARTICLE 1 - PLAN OF ACQUISITION................................................1
1.1 The Merger............................................................1
1.2 Adjustments...........................................................2
1.3 Closing...............................................................2
1.4 Execution and Delivery of Closing Documents...........................2
1.5 Execution and Filing of Merger Documents..............................2
1.6 Effectiveness of Merger...............................................3
1.7 Further Assurances....................................................3
1.8 Certificates..........................................................3
1.9 Closing of Transfer Books.............................................3
1.10 Fractional Shares.....................................................3
1.11 Accounting Treatment..................................................3
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES OF TI AND
TANCREDI 3
2.1 Organization and Good Standing........................................3
2.2 Power and Authority...................................................4
2.3 Foreign Corporation...................................................4
2.4 Authority and Validity................................................4
2.5 Binding Effect........................................................4
2.6 Compliance with Other Instruments.....................................4
2.7 Capitalization of TI..................................................5
2.8 Absence of Certain Changes............................................5
2.9 Tax Liabilities.......................................................6
2.10 No Undisclosed Liabilities............................................6
2.11 Title to Properties...................................................6
2.12 Contracts.............................................................7
2.13 Litigation and Government Claims......................................7
2.14 No Violation of Any Instrument........................................7
2.15 Necessary Approvals and Consents......................................7
2.16 Compliance With Laws..................................................7
2.17 Accuracy of Information Furnished.....................................7
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF TANCREDI.........................8
3.1 Authority and Validity................................................8
3.2 Binding Effect........................................................8
3.3 Ownership.............................................................8
3.4 Voting................................................................8
3.5 Residency.............................................................8
3.6 Compliance with Other Instruments.....................................8
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES OF OSI AND
OUTBACK 9
4.1 Organization and Good Standing........................................9
4.2 Foreign Qualification.................................................9
4.3 Power and Authority...................................................9
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TABLE OF CONTENTS (continued)
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4.4 Authority and Validity................................................9
4.5 Binding Effect........................................................9
4.6 Compliance with Other Instruments.....................................9
4.7 Capitalization of OSI.................................................9
4.8 SEC Reports...........................................................10
4.9 Litigation and Government Claims......................................10
4.10 Necessary Approvals and Consents......................................10
4.11 Absence of Certain Changes or Events..................................10
ARTICLE 5 - JOINT COVENANTS OF TI, TANCREDI, OSI AND OUTBACK..................10
5.1 Notice of any Material Change.........................................11
5.2 Cooperation...........................................................11
5.3 Post-Closing Adjustment...............................................11
5.4 Distribution and Allocation...........................................12
5.5 Additional Agreements.................................................12
ARTICLE 6 - COVENANTS OF TI AND TANCREDI......................................12
6.1 Securities Law Compliance; Restrictions on Shares.....................12
6.2 Payment of Liabilities................................................14
6.3 Pooling...............................................................14
ARTICLE 7 - COVENANTS OF OSI AND OUTBACK......................................14
7.1 Employment Agreements.................................................14
7.2 Assumed Liabilities...................................................14
ARTICLE 8 - JOINT CONDITIONS PRECEDENT TO CLOSING OBLIGATIONS.................14
8.1 Consents to Transaction...............................................14
8.2 Absence of Litigation.................................................15
8.3 Dissenter's Rights....................................................15
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS OF TI.........................15
9.1 Compliance............................................................15
9.2 Representations and Warranties........................................15
9.3 Material Adverse Changes..............................................15
ARTICLE 10 - CONDITIONS PRECEDENT TO OBLIGATIONS OF OSI AND
OUTBACK...............................................................16
10.1 Compliance............................................................16
10.2 Representations and Warranties........................................16
10.3 Current Financial Status..............................................16
10.4 Material Adverse Changes..............................................16
10.5 Pooling...............................................................16
ARTICLE 11 - INDEMNIFICATION...................................................16
11.1 Indemnification Based on Agreement....................................16
11.2 Limitation............................................................17
11.3 Cooperation...........................................................17
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TABLE OF CONTENTS (continued)
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11.4 Notice................................................................17
ARTICLE 12 - MISCELLANEOUS.....................................................17
12.1 Termination...........................................................17
12.2 Expenses..............................................................18
12.3 Entire Agreement......................................................18
12.4 Survival of Representations and Warranties............................18
12.5 Counterparts..........................................................18
12.6 Notices...............................................................19
12.7 Successors and Assigns................................................19
12.8 Governing Law.........................................................19
12.9 Waiver and Other Action...............................................19
12.10 Severability..........................................................19
12.11 Headings..............................................................19
12.12 Construction..........................................................19
12.13 Jurisdiction and Venue................................................19
12.14 Enforcement...........................................................20
12.15 Further Assurances....................................................20
12.16 Equitable Remedies....................................................20
EXHIBIT A
ARTICLES OF MERGER.............................................................A-1
EXHIBIT B
DISCLOSURE SCHEDULES...........................................................B-1
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made
and entered effective as of the 1st day of April, 1998, by and among OUTBACK
STEAKHOUSE, INC., a Delaware corporation ("OSI"), OUTBACK STEAKHOUSE OF
FLORIDA, INC., a Florida corporation ("Outback"), TANCREDI, INC., a Kentucky
corporation ("TI") and SAMUEL TANCREDI, an individual residing in the State of
Indiana ("Tancredi").
W I T N E S S E T H:
WHEREAS, Outback is a wholly-owned subsidiary of OSI; and
WHEREAS, Tancredi is the sole owner of the issued and outstanding
common stock of TI, and Tancredi is the sole director, President and is
responsible for the day-to-day operations of TI; and
WHEREAS, Outback and TI have entered into that certain Florida limited
partnership known as Outback/Indianapolis-II, Limited Partnership
("Partnership");
WHEREAS, the Partnership operates Outback Steakhouse restaurants in
the states of Indiana and Kentucky; and
WHEREAS, the Board of Directors of TI has approved the merger of TI
into Outback (the "Merger") upon the terms and conditions set forth in this
Agreement; and
WHEREAS, for federal income tax purposes it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, pursuant to the Merger, TI will be merged with and into
Outback and all of the outstanding shares of capital stock of TI will be
converted into shares of common stock, par value $.01, of OSI (the "OSI Common
Stock"); and
WHEREAS, the parties hereto desire by this Agreement to set forth the
terms and conditions upon which they are willing to consummate the Merger.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements contained herein, the parties hereto covenant and
agree as follows:
ARTICLE 1
PLAN OF ACQUISITION
1.1 The Merger. Subject to and upon the terms and conditions
contained herein, TI shall be merged with and into Outback, with Outback being
the surviving corporation, in accordance with the Articles of Merger
substantially in the form attached to this Agreement as EXHIBIT A (the "Merger
Agreement"), which will be executed and delivered by OSI, Outback, and TI prior
to the Merger. As a result of the Merger, each voting and nonvoting common
share of TI outstanding immediately before the
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Effective Date (as herein defined) shall, by virtue of the Merger and without
any further action being required by the holders thereof, be converted into and
exchanged for 535 shares of OSI Common Stock.
1.2 Adjustments.
(a) Except as otherwise provided in this SECTION 1.2,
the total number of shares of OSI Common Stock to be issued pursuant
to the Merger shall be Fifty-Three Thousand Five Hundred (53,500.)
(b) If, between the date of this Agreement and the
Closing Date or the Effective Date, as the case may be, (i) the
outstanding shares of capital stock of TI shall have been changed into
a different number of shares or a different class by reason of any
reclassification, recapitalization, split-up, combination, exchange of
shares, or readjustment, with a record date within such period, or a
stock dividend thereon shall be declared with a record date within
such period or (ii) TI shall have issued additional shares of its
capital stock, the number of shares of OSI Common Stock received in
exchange for each share of TI's capital stock shall be adjusted so
that the aggregate number of shares of OSI Common Stock received in
exchange for all shares of TI's capital stock (assuming no Dissenting
Shares) remains at Fifty Three Thousand Five Hundred (53,500.)
(c) If, between the date of this Agreement and the
Closing Date or the Effective Date, as the case may be, the
outstanding shares of OSI Common Stock shall have been changed into a
different number of shares or a different class by reason of any
reclassification, recapitalization, split-up, combination, exchange of
shares, or readjustment, with a record date within such period, or a
stock dividend thereon shall be declared with a record date within
such period, the number of shares of OSI Common Stock received in
exchange for each share of capital stock of TI (as specified in
SECTION 1.1 hereof) shall be adjusted to accurately reflect such
change.
1.3 Closing. The closing of the transactions contemplated by this
Agreement, including the Merger (the "Closing"), shall take place at 10:00
a.m., Tampa time, at the offices of Outback on April 1, 1998, or on such date
and at such other time and place as is agreed upon by the parties hereto. The
day on which the Closing occurs is herein referred to as the "Closing Date." If
any of the conditions to the obligations of the parties to this Agreement have
not been satisfied or waived by the Closing Date, then the party to this
Agreement that is unable to meet such condition or conditions shall be entitled
to postpone the Closing by written notice to the other parties until such
condition shall have been satisfied (which such party shall seek to cause to
happen at the earliest practicable date) or waived, but the Closing shall occur
not later than May 15, 1998, unless further extended by written agreement of
the parties to this Agreement. The parties shall use their best efforts to
effectuate a timely closing as provided in this SECTION 1.3.
1.4 Execution and Delivery of Closing Documents. Before the
Closing, each party shall cause to be prepared and at the Closing the parties
shall execute and deliver each agreement and instrument required by this
Agreement or the Merger Agreement to be so executed and delivered and not
theretofore accomplished. At the Closing, each party also shall execute and
deliver such other appropriate and customary documents as the other parties
reasonably may request for the purpose of consummating the transactions
contemplated by this Agreement and the Merger Agreement. All actions taken at
the Closing shall be deemed to have been taken simultaneously at the time the
last of any such actions is taken or completed.
1.5 Execution and Filing of Merger Documents. At the time of
completion of the Closing, OSI, Outback, TI and Tancredi agree to take the
following actions:
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(a) to execute and deliver all documents and
certificates relating to the Merger required to be executed by them
that have not already been so executed and that are required under
applicable federal, state and local laws to be filed in order validly
to effectuate the Merger; and
(b) to cause Articles of Merger to be filed with the
Secretary of State of the state of Florida and the Secretary of State
of the state of Kentucky and a Certificate of Merger to be issued by
each such officer.
1.6 Effectiveness of Merger. The Merger shall become effective
under the laws of Florida upon the later of (i) filing of these Articles of
Merger with the Secretary of State of the state of Florida and the Secretary of
State of the state of Kentucky; or (ii) April 1, 1998 (the "Effective Date").
Such Effective Date shall be indicated on Certificates of Merger issued by the
Secretary of State of the state of Florida and by the Secretary of State of the
state of Kentucky pursuant to the provisions of Sections 607.1101-607.1107 of
the Florida Business Corporation Act (the "Florida Act") and the laws of the
State of Kentucky ("Kentucky Law").
1.7 Further Assurances. After the Closing, the parties hereto
shall execute and deliver such additional documents and take such additional
actions as may reasonably be deemed necessary or advisable by any party in
order to consummate the transactions contemplated by this Agreement and by the
Merger Agreement, and to vest more fully in Outback the ownership of and the
rights to the business and assets of TI as existed immediately before the
Effective Date.
1.8 Certificates. As soon as practicable after the Effective
Date, OSI shall make available and each holder of capital stock of TI shall be
entitled to receive upon surrender of stock certificates of TI representing TI
capital stock for cancellation, certificates representing the number of shares
of OSI Common Stock into which such shares are converted in the Merger as
provided in SECTION 1.1 hereof. The OSI Common Stock into which such TI capital
stock is converted shall be deemed issued at the Effective Date.
1.9 Closing of Transfer Books. At the Closing Date, the stock
transfer books of TI shall be closed and no transfer of capital stock of TI,
shall thereafter be made.
1.10 Fractional Shares. No fractional shares of OSI Common Stock
and no certificates or scrip therefor shall be issued. Instead, one whole share
of OSI Common Stock shall be issued for each fractional share of .5 or more of
one whole share and each fractional share of less than .5 of one whole share
shall be disregarded.
1.11 Accounting Treatment. It is the intention of the parties
hereto that the Merger will be treated for financial reporting purposes as a
pooling of interests.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF TI AND TANCREDI
Each of TI and Tancredi, jointly and severally, represent and warrant
to OSI and Outback as follows:
2.1 Organization and Good Standing. TI is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Kentucky.
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2.2 Power and Authority. TI has the requisite power and authority
and all material licenses and permits required by governmental authorities to
own, lease and operate its properties and assets and to carry on its businesses
as currently being conducted.
2.3 Foreign Corporation. TI is duly qualified or licensed to do
business and in good standing as a foreign corporation in Indiana and in every
other jurisdiction where the failure to so qualify could have a material
adverse effect on its respective business, operations, assets or financial
condition.
2.4 Authority and Validity.
(a) TI has the corporate power and authority to execute,
deliver and perform its obligations under this Agreement, the Merger
Agreement and the other documents executed or to be executed by TI in
connection with this Agreement; and the execution, delivery and
performance by TI of this Agreement, the Merger Agreement and the
other documents executed or to be executed by TI in connection with
this Agreement have been duly authorized by all necessary corporate
action. The execution, delivery and performance by TI of this
Agreement, the Merger Agreement and any other documents executed or to
be executed in connection with this Agreement and the consummation of
the transactions provided for herein have been duly authorized and
approved by the board of directors and shareholders of TI as required
under the laws of the State of Kentucky and TI's corporate governance
documents.
(b) Tancredi has the power and authority to execute,
deliver and perform his obligations under this Agreement and the other
documents executed or to be executed by Tancredi in connection with
this Agreement.
2.5 Binding Effect. This Agreement, the Merger Agreement and the
other documents executed or to be executed by TI and Tancredi in connection
with this Agreement have been or will have been duly executed and delivered by
TI and Tancredi, and are or will be, when executed and delivered, the legal,
valid and binding obligations of each of TI and Tancredi enforceable in
accordance with their terms except that:
(a) enforceability may be limited by bankruptcy,
insolvency or other similar laws affecting creditors' rights; and
(b) the availability of equitable remedies may be
limited by equitable principles of general applicability.
2.6 Compliance with Other Instruments. Neither the execution and
delivery by TI nor Tancredi of this Agreement and the Merger Agreement, nor the
consummation by them of the transactions contemplated hereby and thereby, will
violate, breach, be in conflict with, or constitute a default under, or permit
the termination or the acceleration of maturity of, or result in the imposition
of any lien, claim or encumbrance upon any material property or asset of TI or
Tancredi pursuant to, its certificate of incorporation, bylaws, partnership
agreement, operating agreement or other charter or governance document, or any
note, bond, indenture, mortgage, deed of trust, evidence of indebtedness, loan
or lease agreement, other agreement or instrument (including with customers),
judgment, order, injunction or decree by which TI or Tancredi is bound, to
which either of them is a party, or to which any assets of either of them are
subject; provided, however, this SECTION 2.6 shall not apply with respect to
any of the foregoing if TI is bound thereby, a party thereto, or its assets
subject, solely by reason of its status as a partner in the Partnership.
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2.7 Capitalization of TI.
(a) The authorized capital stock of TI consists of one
thousand (1,000) common shares. There are one hundred (100) common
shares issued and outstanding, all of which are owned by Tancredi.
There are no other shareholders of TI and no other persons with rights
or options to acquire capital stock of TI. All of the issued and
outstanding shares of capital stock of TI have been duly authorized
and validly issued and are fully paid and nonassessable. There are no
shares of capital stock of TI held in its treasury.
(b) There are no voting trusts, shareholder agreements
or other voting arrangements to which the shareholder of TI is a
party.
(c) There is no outstanding subscription, contract,
convertible or exchangeable security, option, warrant, call or other
right obligating TI to issue, sell, exchange or otherwise dispose of,
or to purchase, redeem or otherwise acquire, shares of, or securities
convertible into or exchangeable for, capital stock of TI.
2.8 Absence of Certain Changes. From December 31, 1997 to the
Closing Date, (except solely as a result of TI's status as a partner in the
Partnership) TI has not:
(a) suffered any material adverse change in its
business, results of operations, working capital, assets, liabilities,
or condition (financial or otherwise) or the manner of conducting its
business;
(b) suffered any material damage or destruction to or
loss of its assets not covered by insurance, or any loss of suppliers
or employees;
(c) acquired or disposed of any asset, or incurred,
assumed, guaranteed, endorsed, paid or discharged any indebtedness,
liability or obligation, or subjected or permitted to be subjected any
material amount of assets to any lien, claim or encumbrance of any
kind, except in the ordinary course of business or pursuant to
agreements in force at the date of this Agreement and identified in
Item 2.8(c) of the Disclosure Schedules;
(d) forgiven, compromised, canceled, released, waived or
permitted to lapse any material rights or claims;
(e) entered into or terminated any lease, agreement,
commitment or transaction, or agreed to or made any changes in any
leases or agreements, other than transactions and commitments entered
into in the ordinary course of business;
(f) written up, written down or written off the book
value of any assets;
(g) declared, paid or set aside for payment any dividend
or distribution with respect to its capital stock;
(h) redeemed, purchased or otherwise acquired, or sold,
granted or otherwise disposed of, directly or indirectly, any of its
capital stock or securities or any rights to acquire such capital
stock or securities, or agreed to changes in the terms and conditions
of any such rights outstanding as of the date of this Agreement;
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(i) except in the ordinary course of business, increased
the compensation of any employee or paid any bonuses to any employee
or contributed to any employee benefit plan;
(j) entered into any employment, consulting,
compensation or collective bargaining agreement with any person or
group, except oral employment agreements which can be terminated at
will; or
(k) entered into, adopted or amended any employee
benefit plan or severance agreements.
2.9 Tax Liabilities. TI has filed all federal, state, county,
local and foreign tax returns and reports required to be filed by them by the
date hereof, including those with respect to income, payroll, property,
withholding, social security, unemployment, franchise, excise and sales taxes;
TI has either paid in full all taxes that have become due as reflected on any
return or report and any interest and penalties with respect thereto or have
fully accrued on their books or have established adequate reserves for all
taxes payable but not yet due; and have made cash deposits with appropriate
governmental authorities representing estimated payments of taxes, including
income taxes and employee withholding tax obligations. No extension or waiver
of any statute of limitations or time within which to file any return has been
granted to TI with respect to any tax. No unsatisfied deficiency, delinquency
or default for any tax, assessment or governmental charge has been claimed,
proposed or assessed against TI nor has TI received notice of any such
deficiency, delinquency or default. TI has no reason to believe that TI has or
may have any tax liabilities other than those reflected on the unaudited
balance sheet of TI as of December 31, 1997, with any notes thereto, and the
related unaudited statements of income for the twelve months ended December 31,
1997, together with supplemental information on TI, each prepared and attested
to by the chief financial officer of TI (the "Balance Sheets") and those
arising in the ordinary course of business since the date thereof. With regard
to the foregoing, TI has relied on the accuracy and completeness of the
Schedule K-1 provided by the Partnership.
Tancredi shall have sole responsibility for filing all required tax
returns for TI. OSI shall assist Tancredi in preparing income tax returns and
shall cooperate with Tancredi to the extent necessary therefor, and Tancredi
shall provide OSI with copies of all such returns at least fifteen (15) days
prior to filing.
2.10 No Undisclosed Liabilities. There are no liabilities or
obligations of TI (other than material liabilities arising solely by reason of
TI's status as a partner in the Partnership) of any nature, whether absolute,
accrued, contingent or otherwise, other than liabilities or obligations
indicated in Items 2.10(a) and 2.10(b) of the Disclosure Schedules.
2.11 Title to Properties. TI has good and marketable title to the
assets reflected in its books and records as being owned by it, (except as they
have since been affected by transactions in the ordinary course of business and
consistent with past practices) the real and personal properties reflected in
the Balance Sheets (except for assets subject to financing leases required to
be capitalized under generally accepted accounting principles, all of which are
so reflected in the Balance Sheet or notes thereto) and all assets purchased by
TI since the date of the Balance Sheet, in each case free and clear of any
lien, claim or encumbrance, except as reflected in the Balance Sheet or notes
thereto and in Item 2.11 of the Disclosure Schedule and except for liens for
taxes, assessments or other governmental charges not yet due and payable.
Except for those assets acquired since the date of the Balance Sheets,
all material properties and assets owned by TI are properly reflected on the
applicable Balance Sheets and notes thereto.
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2.12 Contracts. Excluding (i) contracts and commitments between
Outback or OSI and TI or the Partnership, (ii) contracts and commitments
entered into by the Partnership to which Outback or OSI is a party, (iii)
contracts and commitments entered into by TI in the ordinary course of the
Partnership's business without violation of the provisions of the Partnership
Agreement, and (iv) contracts and commitments entered into with the written
consent of OSI or Outback, Item 2.12 of the Disclosure Schedule is a complete
and accurate list of all of the contracts and commitments (including summaries
of oral contracts) to which TI is a party or by which TI is bound.
2.13 Litigation and Government Claims. Except as indicated in Item
2.13 of the Disclosure Schedule, there is no pending suit, claim, action or
litigation or administrative, arbitration or other proceeding or governmental
investigation or inquiry against TI or the Partnership or to which any of their
business or assets is subject. Except as indicated in Item 2.13 of the
Disclosure Schedule, there are no such proceedings threatened or, to the best
knowledge of TI or Tancredi, contemplated or, to the best knowledge of TI or
Tancredi, any basis for any unasserted claims (whether or not the potential
claimant may be aware of the claim) of any nature that might be asserted
against TI or the Partnership.
2.14 No Violation of Any Instrument. Except as indicated in Item
2.14 of the Disclosure Schedule, TI is not in violation of or default under nor
has any event occurred that, with the lapse of time or the giving of notice or
both, would constitute a violation of or default under or permit the
termination or the acceleration of maturity of or result in the imposition of a
lien, claim or encumbrance upon any property or asset of TI pursuant to, the
articles or certificates of incorporation, bylaws or other chartering or
governance document of TI or (excluding any of the following entered into by
the Partnership and to which Outback or OSI is a signatory or to which Outback
or OSI consented in writing or which were entered into by TI in the ordinary
course of business without violation of the provisions of the Partnership
Agreement) any note, bond, indenture, mortgage, deed of trust, evidence of
indebtedness, loan or lease agreement, other material agreement or instrument
(including with customers), judgment, order, injunction or decree to which TI
is a party, by which TI is bound or to which any of the assets of TI are
subject.
2.15 Necessary Approvals and Consents. Other than (a) in
connection with or in compliance with the laws of the States of Florida and
Kentucky with respect to effectuating the Merger, (b) consents required to be
obtained from applicable liquor control authorities, (c) consents required to
be obtained from lessors, and (d) under the provisions of the Securities Act of
1933, as amended, the Securities Exchange Act of 1934, as amended, or state
securities or blue sky laws, no authorization, consent, permit or license or
approval of or declaration, registration or filing with, any person or
governmental or regulatory authority or agency is necessary for the execution
and delivery by each of TI and Tancredi of this Agreement, the Merger Agreement
and the other agreements executed or to be executed by them in connection with
this Agreement, and the consummation by TI and Tancredi of the transactions
contemplated by this Agreement and the Merger Agreement, and the ownership and
operation by Outback of the respective businesses and properties of TI after
the Effective Date in substantially the same manner as now operated.
2.16 Compliance With Laws. Tancredi has no actual knowledge that
TI or the Partnership are not in compliance with any such laws applicable to
their respective business, where failure to so comply would have a material
adverse effect on their business, operations, properties, assets or conditions.
2.17 Accuracy of Information Furnished. No representation or
warranty by TI or Tancredi in this Agreement nor any information in the
Financial Statements or in the Disclosure Schedule contains any untrue
statement of a material fact or omits to state any material fact that would
make the statements herein or therein, in light of the circumstances under
which they were made, false or misleading. Each of TI and
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Tancredi have disclosed to OSI and Outback all facts known to them that are
material to TI's and the Partnership's respective businesses, operations,
financial condition or prospects.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF TANCREDI
In addition to the representations and warranties contained in ARTICLE
2, Tancredi represents and warrants to OSI and Outback as follows:
3.1 Authority and Validity. He has the capacity and authority to
execute, deliver and perform this Agreement and all other agreements and
documents he is executing or will execute in connection herewith or therewith.
3.2 Binding Effect. This Agreement and the other documents
executed or to be executed by Tancredi in connection with this Agreement have
been or will have been duly executed and delivered by him and are or will be,
when executed and delivered, his legal, valid and binding obligations
enforceable in accordance with their terms except that:
(a) enforceability may be limited by bankruptcy,
insolvency or other similar laws affecting creditors' rights; and
(b) the availability of equitable remedies may be
limited by equitable principles of general applicability.
3.3 Ownership. Tancredi is the sole record and beneficial
shareholder of TI and no other person has any rights (in any form) to acquire
any capital stock of TI.
3.4 Voting. He acknowledges that in his individual capacity as
shareholder and director of TI, he has voted in favor of the execution and
delivery of this Agreement and the Merger Agreement.
3.5 Residency. Tancredi is, and has been at all times during the
one year period ending on the date hereof, a resident of the State of Indiana.
3.6 Compliance with Other Instruments. Neither the execution and
delivery by Tancredi of this Agreement and the Merger Agreement, nor the
consummation by him of the transactions contemplated hereby and thereby will
violate, breach, be in conflict with or constitute a default under or permit
the termination or the acceleration of maturity of or result in the imposition
of any lien, claim or encumbrance upon any material property or asset of
Tancredi pursuant to any note, bond, indenture, mortgage, deed of trust,
evidence of indebtedness, loan or lease agreement, other agreement or
instrument (including with customers), judgment order, injunction or decree by
which Tancredi is bound, to which he is a party or to which he is subject.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF OSI AND OUTBACK
OSI and Outback jointly and severally represent and warrant to TI and
Tancredi as follows:
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4.1 Organization and Good Standing. OSI and Outback are
corporations duly organized, validly existing and in good standing under the
laws of the States of Delaware and Florida, respectively.
4.2 Foreign Qualification. Outback is duly qualified or licensed
to do business and in good standing as a foreign corporation in Delaware and in
every other jurisdiction where the failure to so qualify could have a material
adverse effect on its respective business, operations, assets or financial
condition.
4.3 Power and Authority. OSI and Outback each have the corporate
power and authority and all licenses and permits required by governmental
authorities to own, lease and operate their respective properties and assets
and to carry on their respective business as currently being conducted.
4.4 Authority and Validity. OSI and Outback each have the
corporate power and authority to execute, deliver and perform their respective
obligations under this Agreement, the Merger Agreement and the other documents
executed or to be executed by OSI and Outback in connection with this Agreement
and the execution, delivery and performance by OSI and Outback of this
Agreement, the Merger Agreement and the other documents executed or to be
executed by OSI and Outback in connection with this Agreement have been duly
authorized by all necessary corporate action.
4.5 Binding Effect. This Agreement, the Merger Agreement and the
other documents executed or to be executed by OSI and Outback in connection
with this Agreement have been or will have been duly executed and delivered by
OSI and Outback and are or will be, when executed and delivered, the legal,
valid and binding obligations of OSI and Outback, enforceable in accordance
with their terms except that:
(a) enforceability may be limited by bankruptcy,
insolvency or other similar laws affecting creditors' rights; and
(b) the availability of equitable remedies may be
limited by equitable principles of general applicability.
4.6 Compliance with Other Instruments. Neither the execution and
delivery by OSI and/or Outback of this Agreement, the Merger Agreement, nor the
consummation by it of the transactions contemplated hereby and thereby will
violate, breach, be in conflict with or constitute a default under or permit
the termination or the acceleration of maturity of or result in the imposition
of any lien, claim or encumbrance upon any property or asset of OSI or Outback
pursuant to, the certificate of incorporation or bylaws of OSI or Outback or
any note, bond, indenture, mortgage, deed of trust, evidence of indebtedness,
loan or lease agreement, other agreement or instrument, judgment order,
injunction or decree by which OSI or Outback is bound, to which it is a party
or to which its assets are subject.
4.7 Capitalization of OSI. The authorized capital stock of OSI
consists of Two Hundred Million (200,000,000) shares of Common Stock, $.01 par
value and Two Million (2,000,000) shares of Preferred Stock, $.01 par value, of
which approximately 48,559,385 shares of Common Stock and no shares of
Preferred Stock were issued and outstanding as of March 18, 1998. All of the
issued and outstanding shares of OSI Common Stock have been duly authorized and
validly issued and are fully paid and nonassessable. The shares of OSI Common
Stock to be issued in exchange for TI's capital stock at the Effective Date,
when issued and delivered, will be duly authorized, validly issued, fully paid
and nonassessable. As of the date hereof, except for (i) employee and director
stock options to acquire shares of OSI Common Stock and (ii) employee stock
ownership plans, there are no options, warrants or other rights, agreements or
commitments outstanding obligating Outback or OSI to issue shares of its
capital
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stock. All of the outstanding shares of capital stock of Outback are owned by
OSI, free and clear of any lien or encumbrance.
4.8 SEC Reports. OSI has delivered to TI and Tancredi true and
complete copies of its (i) Annual Report on Form 10-K for the year ended
December 31, 1997; (ii) Proxy Statement used in connection with its 1998 Annual
Meeting of Shareholders; (iii) 1998 Annual Report to Shareholders; (iv) all
periodic reports, if any, on Form 8-K filed with the Securities and Exchange
Commission since December 31, 1997 to the date hereof; and (v) all Forms 10-Q,
if any, filed with the Securities and Exchange Commission since December 31,
1997, to the date hereof. Such documents and reports did not on their dates or
the date of filing, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. OSI has filed all material documents required to be filed by it
with the SEC and all such documents complied as to form with the applicable
requirements of law. Copies of all other reports filed by OSI with the SEC from
the date hereof to and including the Effective Date have been or will be
delivered to TI and Tancredi. All financial statements and schedules included
in the documents referred to in this SECTION 4.8 were prepared in accordance
with generally accepted accounting principles, applied on a consistent basis
except as noted therein and fairly present the information purported to be
shown therein.
4.9 Litigation and Government Claims. There is no pending suit,
claim, action or litigation or administrative, arbitration or other proceeding
or governmental investigation or inquiry against OSI or Outback which would,
severally or in the aggregate, have a material adverse effect on the business,
results of operations, assets or the condition, financial or otherwise, of OSI
and its subsidiaries, taken as a whole. There are no such proceedings
threatened or, to the knowledge of OSI or Outback, contemplated or any
unasserted claims (whether or not the potential claimant may be aware of the
claim), which might, severally or in the aggregate have a material adverse
effect on the business, results of operations, assets or the condition,
financial or otherwise, of OSI and its subsidiaries, taken as a whole.
4.10 Necessary Approvals and Consents. Other than (a) in
connection with or in compliance with the laws of the States of Florida and
Delaware with respect to effectuating the Merger, (b) consents required to be
obtained from applicable liquor control authorities and (c) consents required
to be obtained from lessors, no authorization, consent, permit or license or
approval of or declaration, registration or filing with, any person or
governmental or regulatory authority or agency is necessary for the execution
and delivery by OSI and Outback of this Agreement, the Merger Agreement and the
other agreements executed or to be executed by either of them in connection
with this Agreement and the consummation by OSI and Outback of the transactions
contemplated by this Agreement and the Merger Agreement.
4.11 Absence of Certain Changes or Events. Except as disclosed in
public filings by OSI with the Securities and Exchange Commission prior to the
date hereof and the Closing Date, since December 31, 1997, there has not been
any material adverse change in the financial condition, results of operations
or the business, properties, assets or liabilities of Outback or OSI.
ARTICLE 5
JOINT COVENANTS OF TI, TANCREDI, OSI AND OUTBACK
TI and Tancredi, jointly and severally, on the one hand, and OSI and
Outback, jointly and severally on the other hand, covenant with each other as
follows:
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5.1 Notice of any Material Change. Until the Effective Date, each
of TI, Tancredi, OSI and Outback shall, promptly after the first notice or
occurrence thereof but prior to the Effective Date, advise the others in
writing of any event or the existence of any state of facts that:
(a) would make any of its representations and warranties
in this Agreement untrue in any material respect; or
(b) would otherwise constitute a material adverse change
in the business, results of operation, working capital, assets,
liabilities or condition (financial or otherwise) of OSI, Outback or
TI and their respective subsidiaries, taken as a whole. No supplement
or amendment to any Disclosure Schedule shall have any effect for the
purpose of determining the satisfaction of or compliance with the
conditions to the obligations of the parties to consummate the Merger
set forth elsewhere in this Agreement.
5.2 Cooperation. Until the Effective Date, each of the parties
hereto shall and shall cause each of its affiliates to use its best efforts to:
(a) proceed promptly to make or give the necessary
applications, notices, requests and filings to obtain at the earliest
practicable date and, in any event, before the Closing Date, the
approvals, authorizations and consents necessary to consummate the
transactions contemplated by this Agreement;
(b) cooperate with and keep the other informed in
connection with this Agreement; and
(c) take such actions as the other parties may
reasonably request to consummate the transactions contemplated by this
Agreement and use its best efforts and diligently attempt to satisfy,
to the extent within its control, all conditions precedent to the
obligations to close this Agreement.
5.3 Post-Closing Adjustment. As soon as practicable after the
Effective Date, but in no event more than forty-five (45) days thereafter, OSI
shall determine and report in writing to all parties hereto:
(a) the amount of current assets of TI as of the
Effective Date;
(b) the amount of all liabilities of TI (other than
liabilities specified in Item 6.2 of the TI Disclosure Schedule to the
extent assumed by Outback) which were not paid in full prior to the
Effective Date; and
(c) the estimated amount of all federal and state taxes,
including, but not limited to, federal and state income taxes, payable
by TI for the short tax year ending on the Effective Date;
Upon receipt of such report, Tancredi (by notice to OSI as provided
herein) shall have a period of ten (10) days in which to object in writing to
any portion or item of such report. In the event no objection is timely made,
OSI's report shall be final and binding on all parties. If timely objection is
made, the chief financial officer of OSI and Tancredi (and at the expense of
Tancredi) shall meet and attempt to agree on the items to which objection was
made. If such persons cannot agree within thirty (30) days from the date of
written objection, the items on which agreement has not been reached shall be
submitted to the Tampa, Florida office of Price Waterhouse (or other agreed
upon independent "Big Six" accounting firm)
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for a resolution of such items and whose decision shall be final and binding on
all parties. The fees and expenses of Price Waterhouse (or other accounting
firm) shall be paid by the non-prevailing party.
If, as finally determined, the sum of Subsection (a) above exceeds the
sum of Subsections (b) and (c), OSI shall pay such excess to Tancredi within
ten (10) days of such final determination. If, as finally determined, the sum
of Subsections (b) and (c) exceeds the sum of Subsection (a), Tancredi shall
pay such excess to OSI within ten (10) days of the final determination.
5.4 Distribution and Allocations. The parties acknowledge and
agree that notwithstanding the effective date of the Merger, Outback shall be
entitled to TI's entire share of Partnership distributions of cash flow, and
shall be allocated TI's shares of profit and loss, from and after April 1,
1998.
5.5 Additional Agreements.
(a) Subject to the terms and conditions herein provided,
each of the parties hereto agrees to use all 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 under applicable laws and
regulations to consummate and make effective the transactions
contemplated by this Agreement, including using all reasonable efforts
to obtain all necessary waivers, consents and approvals, to effect all
necessary registrations and filings and to lift any injunction or
other legal bar to the Merger (and, in such case, to proceed with the
Merger as expeditiously as possible), subject, however, to the
appropriate vote of the shareholders of TI.
(b) In case at any time after the Effective Date any
further action is necessary or desirable to carry out the purposes of
this Agreement, the proper officers and/or directors of OSI and
Outback and Tancredi shall take all such necessary action.
(c) Neither Outback, OSI, TI nor Tancredi shall take any
action which would jeopardize the characterization of the Merger as a
reorganization within the meaning of Section 368(a) of the Code or the
treatment of the Merger for financial reporting purposes as a pooling
of interests.
ARTICLE 6
COVENANTS OF TI AND TANCREDI
TI and Tancredi covenant and agree with OSI as follows:
6.1 Securities Law Compliance. Tancredi represents and warrants,
and covenants to Outback and OSI that:
(a) Tancredi has received all schedules and exhibits and
the documents furnished to TI pursuant to SECTION 4.8;
(b) Tancredi has had the opportunity to ask questions of
and receive answers from representatives of the management of OSI
concerning the terms and conditions of the transactions contemplated
hereby and to obtain all additional information that OSI possesses or
could acquire without unreasonable expense that is necessary to verify
the accuracy of information furnished to Tancredi.
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(c) OSI and Outback have furnished him with all
information requested and full access to materials concerning OSI and
Outback which Tancredi and/or his advisors deemed necessary to
properly evaluate the Merger. Such information and access have been
made available and utilized to the extent Tancredi considers necessary
and advisable in making an informed investment decision, and Tancredi
has consulted his own tax advisor and understands the evaluation of
such materials may require the assistance of experts and Tancredi has
utilized such experts to the extent deemed necessary.
(d) Tancredi understands that the OSI Common Stock to be
received is an investment of a speculative nature and Tancredi must
bear the risks thereof for an indefinite period of time. Tancredi has
adequate means for providing for his needs, is able to bear the
economic risk of the investment and has no need for liquidity in the
OSI Common Stock to be received in the Merger.
(e) Tancredi and/or his representatives or advisors who
have acted with or on behalf of Tancredi and who have advised Tancredi
in this matter have such knowledge and experience in financial and
business matters that Tancredi is capable of evaluating the merits and
risks of the Merger for OSI Common Stock.
(f) Tancredi is participating in the Merger solely for
his account as a private investment, and Tancredi has no present
agreement, understanding, arrangement or intention to sell or transfer
all or any portion of the shares of OSI Common Stock to be issued in
the Merger to any other person or persons. Tancredi does not presently
intend to enter into any such agreement or undertaking and there are
no present circumstances which will compel Tancredi to sell any OSI
Common Stock so received. Tancredi will not sell or otherwise transfer
the shares (except for de minimis gifts of shares) unless they are
registered under the Securities Act and applicable state securities
laws or, in the opinion of OSI and its counsel, an exemption from
registration is available therefor.
(g) The investment by Tancredi in OSI Common Stock
pursuant to the Merger is a suitable investment for Tancredi given the
investment goals and objectives of Tancredi.
(h) Tancredi agrees to indemnify and hold OSI and
Outback and each of their respective officers, directors and advisors
harmless against all liability arising out of or in connection with
any purchase, resale or distribution by Tancredi of any OSI Common
Stock received hereby which is effected other than in strict
compliance with the terms hereof and applicable law.
(i) Tancredi understands that the shares of OSI Common
Stock to be issued in the Merger will not be registered under the
Securities Act, nor any state securities laws, and such OSI Common
Stock may not be sold or transferred except in compliance with such
laws. Neither OSI nor Outback will have any obligation to register any
OSI Common Stock hereof.
(j) Tancredi understands that OSI will place an
appropriate legend on the certificate representing OSI Common Stock to
be received restricting the transfer of the shares and stop-transfer
instructions will be given to the transfer agent for the OSI Common
Stock with respect to such certificates.
(k) Tancredi is a natural person (i) whose net worth
(the excess of total assets over total liabilities), individually or
jointly with his spouse, exceeds $1,000,000 (inclusive of the value of
home, home furnishings and automobiles); or (ii) who had an Individual
Annual Adjusted Gross
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Income in excess of $200,000 in each of the two most recent tax years
or joint income with Tancredi's spouse in excess of $300,000 in each
of those years and reasonably expects to reach the same income level
in the current tax year.
6.2 Payment of Liabilities. TI and Tancredi covenant and agree
that all debts and liabilities of TI relating to periods prior to the Closing
Date shall be paid or satisfied in full prior to the Effective Date, except
only current liabilities and those debts and liabilities of TI assumed by
Outback as specified in Item 6.2 of the Disclosure Schedules.
6.3 Pooling. Tancredi agrees that until such time as financial
results of OSI covering at least thirty (30) days of combined operations of OSI
and TI subsequent to the Effective Date have been published, he will not sell
or otherwise dispose of any shares of OSI Common Stock held by him as of the
Effective Date or any of such shares thereafter acquired by him at any time or
from time to time prior to the date of such publication. OSI shall give
instructions to its transfer agent and registrar, Bank of New York, Inc., with
respect to the shares of OSI Common Stock issued pursuant to the Merger, to the
effect that no transfer of such shares shall be effected until the date on
which the requisite financial results have been published and OSI and the
transfer agent may take any action, including placing an appropriate legend on
the certificates, they deem necessary to enforce this provision.
ARTICLE 7
COVENANTS OF OSI AND OUTBACK
OSI and Outback, jointly and severally, covenant and agree with TI and
Tancredi as follows:
7.1 Employment Agreements. Solely with respect to the Merger, and
any consequential termination of any partnership by operation of law, Outback
agrees not to elect to terminate the Employment Agreements between the
Partnership, as employer, and the general managers of the Partnership's Outback
Steakhouse(R) restaurants, as employees. Outback shall succeed to all rights
and obligations of the Partnership under such Employment Agreements. Nothing
contained herein shall be construed as in any way limiting Outback's right to
terminate any such Employment Agreement as a result of any circumstance or
event other than the Merger and consequential termination of the Partnership by
operation of law.
7.2 Assumed Liabilities. OSI and Outback agree to assume and pay
the liabilities specified in Item 6.2 (subject to the amount limits specified
in Item 6.2 of the Disclosure Schedules) and to indemnify and hold harmless
Tancredi from any loss or liability therefor.
ARTICLE 8
JOINT CONDITIONS PRECEDENT TO CLOSING OBLIGATIONS
Except as may be waived by OSI, the obligations of TI, Tancredi, OSI
and Outback to consummate the transactions contemplated by this Agreement shall
be subject to the satisfaction, on or before the Closing Date, of each of the
following conditions:
8.1 Consents to Transaction. TI, Outback and OSI shall have
received all consents or approvals and made all applications, requests, notices
and filings with, any person, governmental authority or governmental agency
required to be obtained or made in connection with the consummation of the
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transactions contemplated by this Agreement. There shall have been obtained
from all state and local governments and governmental agencies all approvals
and consents necessary to enable TI and/or the Partnership, as applicable, to
transfer their liquor licenses and permits to Outback, to enable Outback to
assume such licenses and permits or to enable Outback to operate restaurants
(of the kind and quality customarily operated by Outback) using such permits or
licenses. Copies of all consents and approvals received by any party pursuant
to this SECTION 8.1 shall be furnished to the other party.
8.2 Absence of Litigation. No governmental agency or authority
shall have instituted or threatened in writing to institute, any action or
proceeding seeking to delay, restrain, enjoin or prohibit the consummation of
the transactions contemplated by this Agreement and no order, judgment or
decree by any court or governmental agency or authority shall be in effect that
enjoins, restrains or prohibits the same or otherwise would materially
interfere with the operation of the assets and business of TI or the
Partnership or OSI and its subsidiaries, including the surviving corporation in
the Merger, after the Closing Date.
8.3 Dissenter's Rights. The number of shares of capital stock of
TI for which shareholders have exercised appraisal or dissenters' rights under
applicable law shall be a number which, in the sole and absolute discretion of
OSI, does not jeopardize the financial reporting and accounting treatment of
the Merger specified in SECTION 1.11 or is otherwise not contrary to the best
interests of Outback or OSI.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS OF TI
The obligations of TI and Tancredi to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction on or
before the Closing Date of each of the following conditions:
9.1 Compliance. OSI and Outback shall have, or shall have caused
to be, satisfied or complied with and performed in all material respects all
terms, covenants and conditions of this Agreement to be complied with or
performed by OSI and Outback on or before the Closing Date.
9.2 Representations and Warranties. All of the representations
and warranties made by OSI and Outback in this Agreement, and in all
certificates and other documents delivered by OSI and Outback to TI and
Tancredi pursuant hereto or in connection with the transactions contemplated
hereby, shall have been true and correct in all material respects as of the
date hereof and shall be true and correct in all material respects at the
Closing Date with the same force and effect as if such representations and
warranties had been made at and as of the Closing Date, except for changes
permitted or contemplated by this Agreement.
9.3 Material Adverse Changes. Since the date hereof, there shall
have occurred no material adverse change in the business, properties, assets,
liabilities, results of operations or condition, financial or otherwise, of OSI
and Outback, taken as a whole.
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ARTICLE 10
CONDITIONS PRECEDENT TO OBLIGATIONS OF OSI AND OUTBACK
Except as may be waived by OSI and Outback, the obligations of OSI and
Outback to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction, on or before the Closing Date, of each of the
following conditions:
10.1 Compliance. TI and Tancredi shall have or shall have caused
to be satisfied or complied with and performed in all material respects all
terms, covenants and conditions of this Agreement to be complied with or
performed by any of them on or before the Closing Date.
10.2 Representations and Warranties. All of the representations
and warranties made by TI and/or Tancredi in this Agreement, the Disclosure
Schedule, and in all certificates and other documents delivered by TI or
Tancredi pursuant hereto or in connection with the transactions contemplated
hereby, shall have been true and correct in all material respects as of the
date hereof and shall be true and correct in all material respects at the
Closing Date with the same force and effect as if such representations and
warranties had been made at and as of the Closing Date, except for changes
permitted or contemplated by this Agreement.
10.3 Current Financial Status. OSI shall have received the
unaudited financial statements of TI as of March 31, 1998, for the month then
ended.
10.4 Material Adverse Changes. Since December 31, 1997, there
shall have occurred no material adverse change in the business, properties,
assets, liabilities, results of operations or condition, financial or
otherwise, of TI or the Partnership.
10.5 Pooling. OSI shall have received a letter from Deloitte &
Touche, in form and substance satisfactory to OSI and dated not more than five
days prior to the Closing Date, to the effect that the Merger shall qualify as
a pooling of interests for financial reporting purposes.
ARTICLE 11
INDEMNIFICATION
Tancredi, on the one hand, and OSI and Outback, jointly and severally,
on the other hand, agree as follows:
11.1 Indemnification Based on Agreement. Subject to the
limitations contained in SECTION 11.2 hereof, Tancredi shall indemnify and hold
harmless OSI, Outback and TI, and OSI, Outback and TI, jointly and severally,
shall indemnify and hold harmless Tancredi, against any losses, claims, damages
or liabilities to which such indemnified party may become subject, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any facts or circumstances that would constitute
a breach by the other of any representation, warranty or covenant contained
herein or in any agreement executed pursuant hereto and will reimburse any
legal or other expenses reasonably incurred by any indemnified party in
connection with investigating or defending any such loss, claim, damage,
liability or action.
In addition to the above, Tancredi shall indemnify OSI, Outback and
TI, as provided in the first paragraph of this SECTION 11.1, against any loss,
claim, damage or liability arising out of (i) any tax liability of TI for any
period prior to and including March 31, 1998 and (ii) any debt of TI (other
than the
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debts specified in Item 6.2 of the Disclosure Schedule to the extent assumed by
Outback), and (iii) all claims, obligations, causes of action and liabilities,
of whatever kind or character, of any of TI which arise out of or are based
upon events first occurring on or before the Effective Date, except only the
liabilities assumed by Outback as specified in Item 6.2 of the Disclosure
Schedule.
11.2 Limitation. Tancredi shall have no obligation under SECTION
11.1 to indemnify OSI, Outback or TI for any liability, loss, claim or damage
arising out of or based upon facts or actions first occurring after the
Effective Date. All obligations of indemnity (other than those relating to tax
obligations of TI under SECTION 11.1 above which shall continue for the period
specified in SECTION 12.4(B) hereof) shall terminate two (2) years from the
Closing Date; provided, however, the obligations of indemnity shall not
terminate with respect to any matter for which indemnification is claimed
within two (2) years from the Closing Date.
11.3 Cooperation. If any claim, demand, action, suit, proceeding
or investigation arising out of or pertaining to this Agreement or the
transactions contemplated hereby is begun or asserted, whether begun or
asserted before or after the Closing Date, the parties hereto will cooperate
and use their best efforts to defend against and respond thereto.
11.4 Notice. An indemnified party shall give notice to the
indemnifying party or parties within ten (10) business days after actual
receipt of service or summons to appear in any action begun in respect of which
indemnity may be sought hereunder. Failure to so notify the indemnifying party
or parties shall cause the indemnified party to be liable for any damage caused
by failure to give timely notice. The indemnifying party or parties may
participate at their own expense and with their counsel in the defense of such
action. If the indemnifying party or parties so elect within a reasonable time
after receipt of such notice, they may assume the defense of such action with
counsel chosen by the indemnifying party or parties and approved by the
indemnified party in such action, unless the indemnified party reasonably
objects to such assumption on the ground that its counsel has advised it that
there may be legal defenses available to it that are different from or in
addition to those available to the indemnifying party or parties, in which case
the indemnified party shall have the right to employ counsel approved by the
indemnifying party or parties. If the indemnifying party or parties assume the
defense of such action, the indemnifying party or parties shall not be liable
for fees and expenses of counsel for the indemnified party incurred thereafter
in connection with such action. In no event shall the indemnifying party or
parties be liable for the fees and expenses of more than one counsel for the
indemnified parties in connection with any one action or separate but similar
or related actions in the same jurisdiction arising out of the same general
allegations or circumstances unless, in the reasonable opinion of such counsel,
there is, under applicable standards of professional conduct, a conflict on any
significant issue between the positions of any two or more indemnified parties.
ARTICLE 12
MISCELLANEOUS
12.1 Termination. This Agreement and the transactions contemplated
hereby may be terminated at any time on or before the Closing Date
(notwithstanding approval by the shareholders of TI):
(a) by mutual consent of TI and OSI;
(b) by OSI if there has been a material
misrepresentation or breach of warranty in the representations and
warranties of TI or Tancredi set forth herein or if there has been any
material failure on the part of TI or Tancredi to comply with their
obligations hereunder;
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(c) by TI if there has been a material misrepresentation
or breach of warranty in the representations and warranties of OSI or
Outback set forth herein or if there has been any material failure on
the part of OSI or Outback to comply with their obligations hereunder;
(d) by either OSI, TI or Tancredi, if the transactions
contemplated by this Agreement have not been consummated by May 30,
1998, unless such failure of consummation is due to the failure of the
terminating party to perform or observe the covenants, agreements and
conditions hereof to be performed or observed by it at or before the
Closing Date;
(e) by either OSI, or TI if the conditions precedent to
its obligations to close this Agreement have not been satisfied or
waived by it at or before the Closing Date; and
(f) by either TI or OSI if the transactions contemplated
hereby violate any nonappealable final order, decree or judgment of
any court or governmental body or agency having competent
jurisdiction.
12.2 Expenses. Each party hereto shall pay its own expenses
incurred in connection with this Agreement and the transactions contemplated
hereby.
12.3 Entire Agreement. This Agreement and the exhibits and
Disclosure Schedules hereto constitute and contain the complete agreement among
the parties with respect to the transactions contemplated hereby and supersede
all prior agreements and understandings among the parties with respect to such
transactions. The parties hereto have not made any representation or warranty
except as expressly set forth in this Agreement, the Merger Agreement or in any
certificate or schedule delivered pursuant hereto. The obligations of any party
under any agreement executed pursuant to this Agreement shall not be affected
by this SECTION 12.3.
12.4 Survival of Representations and Warranties.
(a) The representations, warranties and indemnification
obligations of OSI and Outback contained herein or in any exhibit,
certificate, document or instrument delivered pursuant to this
Agreement shall survive the Closing for a period of two years;
provided, however, that the obligations of OSI and Outback under
ARTICLE 7 and ARTICLE 11 hereof shall survive for the periods provided
therein.
(b) Except where otherwise specifically provided in this
Agreement, the representations, warranties and indemnification
obligations of Tancredi contained herein or in any exhibit, schedule,
certificate, document or instrument delivered pursuant to this
Agreement shall survive the Closing for a period of three years from
the Effective Date; provided, however, the representations and
warranties contained in SECTION 2.9 (Tax Liabilities) shall survive
the Closing for a period ending four years after the filing of TI's
federal income tax return for the period including the Effective Date.
12.5 Counterparts. This Agreement may be executed in any number of
identical counterparts, each of which when so executed and delivered shall be
deemed an original and such counterparts together shall constitute only one
original.
12.6 Notices. All notices, demands, requests or other
communications that may be or are required to be given, served or sent by any
party to any other party pursuant to this Agreement shall be
18
<PAGE> 23
in writing and shall be mailed by registered or certified mail, return receipt
requested, postage prepaid or transmitted by hand delivery, recognized national
overnight delivery service, telegram or telex, addressed as follows:
If to TI or Tancredi: TANCREDI, INC.
8935 N. Meredian Street Suite 109
Indianapolis, IN 46260
Attention: Samuel Tancredi
If to OSI or Outback: OUTBACK STEAKHOUSE, INC.
550 North Reo Street, Suite 200
Tampa, Florida 33609
Attention: Joseph J. Kadow, General Counsel
Each party may designate by notice in writing a new address to which
any notice, demand, request or communication may thereafter be so given, served
or sent. Each notice, demand, request or communication that is mailed,
delivered or transmitted in the manner described above shall be deemed
sufficiently given, served, sent and received for all purposes at such time as
it is delivered to the addressee (with the return receipt, the delivery
receipt, the affidavit of messenger or (with respect to a telex) the answer
back being deemed conclusive evidence of such delivery) or at such time as
delivery is refused by the addressee upon presentation.
12.7 Successors and Assigns. This Agreement and the rights,
interests and obligations hereunder shall be binding upon and shall inure to
the benefit of the parties hereto and, except as otherwise specifically
provided for herein, their respective successors and assigns.
12.8 Governing Law. This Agreement shall be construed and enforced
in accordance with the laws of the State of Florida without giving effect to
principles of comity or conflicts of law thereof.
12.9 Waiver and Other Action. This Agreement may be amended,
modified or supplemented only by a written instrument executed by the parties
against which enforcement of the amendment, modification or supplement is
sought.
12.10 Severability. If any provision of this Agreement is held to
be illegal, invalid or unenforceable, such provision shall be fully severable
and this Agreement shall be construed and enforced as if such illegal, invalid
or unenforceable provision were never a part hereof; the remaining provisions
hereof shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance; and in lieu of
such illegal, invalid or unenforceable provision, there shall be added
automatically as part of this Agreement, a provision as similar in its terms to
such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
12.11 Headings. All headings and captions in this Agreement are
intended solely for the convenience of the parties and none shall be deemed to
affect the meaning or construction of any provision hereof.
12.12 Construction. All references herein to the masculine, neuter
or singular shall be construed to include the masculine, feminine, neuter or
plural, where applicable.
12.13 Jurisdiction and Venue. The parties agree that any action
brought by either party against the other in any court, whether federal or
state, shall be brought within the State of Florida in the judicial
19
<PAGE> 24
circuit in which OSI has its principal place of business. Each party hereby
agrees to submit to the personal jurisdiction of such courts and hereby waives
all questions of personal jurisdiction or venue for the purpose of carrying out
this provision, including, without limitation, the claim or defense therein
that such courts constitute an inconvenient forum.
12.14 Enforcement. In the event it is necessary for any party to
retain legal counsel or institute legal proceedings to enforce the terms of
this Agreement, including, without limitation, obligations upon expiration or
termination, the prevailing party shall be entitled to receive from the
non-prevailing party, in addition to all other remedies, all costs of such
enforcement including, without limitation, attorney's fees and court costs and
including appellate proceedings.
12.15 Further Assurances. Each party covenants and agrees to
execute and deliver, prior to or after the Merger, such further documents as
may reasonably be requested by another party to fully effectuate the
transactions provided for herein.
12.16 Equitable Remedies. The parties hereto acknowledge that a
refusal by a party to consummate the transactions contemplated hereby will
cause irreparable harm to the other parties, for which there may be no adequate
remedy at law. A party not in default at the time of such refusal shall be
entitled, in addition to other remedies at law or in equity, to specific
performance of this Agreement by the party that refused to consummate the
transactions contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
"OSI"
Attest: OUTBACK STEAKHOUSE, INC.
a Delaware corporation
By: /s/ Joseph J. Kadow By: /s/ Robert D. Basham
------------------------------- ------------------------------------
JOSEPH J. KADOW, Secretary ROBERT D. BASHAM, President
"Outback"
Attest: OUTBACK STEAKHOUSE OF FLORIDA, INC.,
a Florida corporation
By: /s/ Joseph J. Kadow By: /s/ Robert D. Basham
------------------------------- ------------------------------------
JOSEPH J. KADOW, Secretary ROBERT D. BASHAM, Chief Operating
Officer
20
<PAGE> 25
"TI"
Attest: TANCREDI, INC.
a Kentucky corporation
By: /s/ Samuel Tancredi By: /s/ Samuel Tancredi
------------------------------- ------------------------------------
SAMUEL TANCREDI, Secretary SAMUEL TANCREDI, President
Witness: "TANCREDI"
/s/ /s/ Samuel Tancredi
---------------------------------- ---------------------------------------
SAMUEL TANCREDI
/s/
----------------------------------
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<PAGE> 26
EXHIBIT A
ARTICLES OF MERGER
THIS AGREEMENT, PLAN AND ARTICLES OF MERGER ("Articles of Merger"),
dated as of April 1, 1998, is entered into by and among TANCREDI, INC., a
Kentucky corporation ("TI"); OUTBACK STEAKHOUSE, INC., a Delaware corporation
("OSI"); and OUTBACK STEAKHOUSE OF FLORIDA, INC., a Florida corporation
("Outback").
W I T N E S E T H:
WHEREAS, TI is a corporation duly organized and validly existing under
the laws of the State of Kentucky, and the authorized and outstanding capital
stock of TI is as follows:
<CAPTION>
Authorized Shares Issued
Corporation Capital Stock And Outstanding
----------- ------------- ---------------
TANCREDI, Inc. 1,000 common shares 100 common shares
WHEREAS, OSI is a corporation duly organized and validly existing
under the laws of the State of Delaware; and
WHEREAS, OSI is authorized to issue 2,000,000 shares of Preferred
Stock, par value $.01, none of which are outstanding and 200,000,000 shares of
Common Stock, $.01 par value (the "OSI Common Stock"), of which approximately
48,559,385 shares of OSI Common Stock are issued and outstanding as of March
18, 1998; and
WHEREAS, Outback is a wholly owned subsidiary of OSI; and
WHEREAS, the respective Boards of Directors of each of TI, Outback,
and OSI deem it advisable, for the benefit of their respective corporations and
shareholders, that TI be merged into Outback, with Outback as the surviving
corporation (in its capacity as surviving corporation, Outback is hereinafter
sometimes referred to as the "Surviving Corporation"), pursuant to the
provisions of Sections 607.1101-607.1107 of the Florida Business Corporation
Act (the "Florida Act") and the laws of the State of Kentucky ("Kentucky Law"),
and have approved these Articles of Merger; and
WHEREAS, the Board of Directors of TI has directed that these Articles
of Merger be submitted to its voting shareholder for approval and adoption and
the voting shareholder of TI has approved and adopted these Articles of Merger
in accordance with Kentucky Law and the corporate governance documents of TI by
unanimous written consent dated April 1, 1998; and
WHEREAS, OSI as the sole shareholder of Outback has approved and
adopted these Articles of Merger by written consent on April 1, 1998; and
WHEREAS, the Agreement and Plan of Reorganization (the "Reorganization
Agreement"), which Outback, OSI, and TI have entered, contemplates the
execution and delivery of these Articles of Merger.
A-1
<PAGE> 27
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein and for the purpose of prescribing the terms and
conditions of the merger and such other details and provisions as are deemed
necessary or desirable, the parties hereto agree as follows:
1. MERGER. The names of the corporations which propose to merge
are TANCREDI, INC., a Kentucky corporation ("TI"), and OUTBACK STEAKHOUSE OF
FLORIDA, INC. ("Outback"). In accordance with the provisions of the Florida Act
and Kentucky Law at the Effective Date (as hereinafter defined), TI shall be
merged into Outback, and Outback shall be the Surviving Corporation and as such
shall continue to be governed by the laws of the State of Florida. The plan of
merger set forth in these Articles of Merger was duly authorized by each of
Outback and TI, respectively, by all action required by the laws under which it
was incorporated or organized and by its constituent documents.
2. CONTINUATION OF CORPORATE EXISTENCE. The corporate existence
and identity of Outback, with all its purposes, powers, franchises, privileges,
rights and immunities, shall continue unaffected and unimpaired by the merger
and the corporate existence and identity of TI with all its purposes, powers,
franchises, privileges, rights and immunities at the Effective Date shall be
merged with and into that of Outback, and Outback as the Surviving Corporation
shall be vested fully therewith, and the separate corporate existence and
identity of TI shall thereafter cease except to the extent continued by
statute.
3. EFFECTIVE DATE. The merger shall become effective
(hereinbefore and hereinafter called the "Effective Date") upon the later of
(i) filing of these Articles of Merger with the Secretary of State of the state
of Florida and the Secretary of State of the state of Kentucky; or (ii) April
1, 1998. Such Effective Date shall be indicated on Certificates of Merger
issued by the Secretary of State of the state of Florida and by the Secretary
of State of the state of Kentucky pursuant to the Florida Act and Kentucky Law.
4. CORPORATE GOVERNMENT.
(a) The Certificate of Incorporation of Outback, as in
effect on the Effective Date, shall continue in full force and effect
and shall be the Certificate of Incorporation of the Surviving
Corporation.
(b) The Bylaws of Outback, as in effect as of the
Effective Date, shall continue in full force and effect and shall be
the Bylaws of the Surviving Corporation.
(c) The members of the Board of Directors and the
officers of the Surviving Corporation shall be the persons holding
such positions for Outback as of the Effective Date.
5. CONVERSION OF SHARES. The manner and basis of converting the
capital stock of TI into OSI Common Stock, subject to SECTION 5(C) below with
respect to fractional shares, shall be as follows:
(a) Each share of TI common stock which shall be
outstanding immediately prior to the Effective Date shall at the
Effective Date, by virtue of the merger and without any action on the
part of the holder thereof, be converted into and exchanged for 535
shares of OSI Common Stock.
(b) The Outback capital stock outstanding immediately
prior to the Effective Date shall be unaffected by the merger.
A-2
<PAGE> 28
(c) The stock transfer books of TI shall be closed as of
the close of business on the Effective Date and no transfer of record
of any of its capital stock shall take place thereafter.
(d) No fractional shares of OSI Common Stock and no
certificates or scrip therefor shall be issued. Instead one whole
share of OSI Common Stock shall be issued to each holder of shares of
common stock of the merging corporations whose fractional share
interest is .5 or more of one whole share; each fraction of less than
.5 of one whole share shall be disregarded.
(e) Notwithstanding the foregoing, the OSI shall not be
required to issue or distribute more than 53,500 shares of OSI Common
Stock pursuant to the merger, less any shares reserved for dissenters'
rights, as described in Article 1 of the Reorganization Agreement.
(f) All of the shares of OSI Common Stock, when
delivered pursuant to the provisions of these Articles of Merger,
shall be validly issued, fully paid and nonassessable.
(g) At the Effective Date, each holder of certificates
representing shares of the common stock of TI shall thereupon cease to
have any rights with respect to such shares and shall be deemed to be
a shareholder of OSI to the extent of the number of shares of OSI
Common Stock to which such shareholder shall be entitled in accordance
with these Articles of Merger; and shall surrender certificates
representing shares of the common stock of TI to the OSI, whereupon
such holder shall receive a certificate or certificates for the number
of shares of OSI Common Stock to which such holder is entitled
hereunder.
6. RIGHTS AND LIABILITIES OF THE SURVIVING CORPORATION. The
Surviving Corporation shall have the following rights and obligations:
(a) The Surviving Corporation shall have all the rights,
privileges, immunities and powers and shall be subject to all the
duties and liabilities of a corporation organized under the laws of
the State of Florida.
(b) The Surviving Corporation shall possess all of the
rights, privileges, immunities and franchises, of either a public or
private nature, of Outback, and TI and all property, real, personal
and mixed and all debts due on whatever account, including
subscription to shares and all other chooses in action and every other
interest of or belonging or due to TI shall be taken and deemed to be
transferred or invested in the Surviving Corporation without further
act or deed.
(c) At the Effective Date, the Surviving Corporation
shall thenceforth be responsible and liable for all liabilities and
obligations of TI and any claim existing or action or proceeding
pending by or against TI or Outback may be prosecuted as if the merger
had not occurred or the Surviving Corporation may be substituted in
its place. Neither the rights of creditors nor any liens upon the
property of TI or Outback shall be impaired by the merger.
7. CONSENT OF SHAREHOLDERS. These Articles of Merger have been
adopted by the shareholders of TI in accordance with Kentucky Law and its
corporate governance documents by unanimous written consent effective as of
April 1, 1998. These Articles of Merger have been adopted by the written
consent of the sole shareholder of Outback dated as of April 1, 1998, to the
Florida Act.
A-3
<PAGE> 29
8. DISSENTING SHAREHOLDERS. If any shareholder of TI files a
written objection to these Articles of Merger before a vote of the shareholders
is taken hereon and complies with the further provisions of the Florida Act or
Kentucky Law, as applicable, he may be paid the fair value of his shares. If
any shareholder of TI lawfully elects, pursuant to the Florida Act or Kentucky
Law, as applicable, to exercise or pursue his right to dissent from any of the
corporate actions referred to in these Articles of Merger with respect to the
shares of common stock of TI owned by such shareholder (the "Dissenting
Shares"), such shareholder shall be entitled to exercise only those rights
available to him as set forth in the Florida Act or Kentucky Law, as
applicable, and, in that event, only in the manner set forth therein. During
the period in which any such shareholder shall be exercising or pursuing any of
such shareholder's rights of dissent as specified in the Florida Act or
Kentucky Law, as applicable, such shareholder shall have no other rights
pursuant to or arising from these Articles of Merger.
9. REORGANIZATION AGREEMENT. These Articles of Merger are
intended to supplement the Reorganization Agreement and are not intended to
conflict with or supersede that agreement and, in the event of any conflict,
the provisions of the Reorganization Agreement shall control.
10. COPIES. A copy of these Articles of Merger shall be on file
at the principal place of business of the Surviving Corporation located at 550
North Reo Street, Suite 200, Tampa, Florida 33609. A copy of these Articles of
Merger will be furnished by the Surviving Corporation, on request and without
cost, to any shareholder of any corporation that is a party hereto.
IN WITNESS WHEREOF, the undersigned have executed these Articles of
Merger as of the day and year first above written.
"OSI"
Attest: OUTBACK STEAKHOUSE, INC.
a Delaware corporation
By: By:
----------------------------------- -------------------------------
JOSEPH J. KADOW, Secretary ROBERT D. BASHAM, President
A-4
<PAGE> 30
STATE OF FLORIDA )
) ss
COUNTY OF HILLSBOROUGH )
On this ______ day of ____________, 1998, before me, personally came
ROBERT D. BASHAM and JOSEPH J. KADOW, President and Secretary, respectively, of
OUTBACK STEAKHOUSE, INC., a Delaware corporation, who are personally known to
me, and each being first duly sworn, did depose and say that they executed the
foregoing on behalf of said corporation by order of the Board of Directors of
said corporation.
(NOTARY SEAL)
-------------------------------------------
(Notary Signature)
NOTARY PUBLIC
Commission No.
-----------------------------
"Outback"
Attest: OUTBACK STEAKHOUSE OF FLORIDA, INC.,
a Florida corporation
By: By:
----------------------------- ----------------------------------------
JOSEPH J. KADOW, Secretary ROBERT D. BASHAM, Chief Operating
Officer
STATE OF FLORIDA )
) ss
COUNTY OF HILLSBOROUGH )
On this ______ day of _______________, 1998, before me, personally
came ROBERT D. BASHAM and JOSEPH J. KADOW, Chief Operating Officer and
Secretary, respectively, of OUTBACK STEAKHOUSE OF FLORIDA, INC., a Florida
corporation, who are personally known to me, and each being first duly sworn,
did depose and say that they executed the foregoing on behalf of said
corporation by order of the Board of Directors of said corporation.
(NOTARY SEAL)
-------------------------------------------
(Notary Signature)
NOTARY PUBLIC
Commission No.
-----------------------------
A-5
<PAGE> 31
"TI"
Attest: TANCREDI, INC.
a Kentucky corporation
By: By:
---------------------------- ----------------------------------------
SAMUEL TANCREDI, Secretary SAMUEL TANCREDI, President
STATE OF PENNSYLVANIA )
) ss
COUNTY OF
------------- )
On this ______ day of _________________, 1998 before me, personally
came SAMUEL TANCREDI, President and Secretary, respectively, of TANCREDI, INC.,
a Kentucky corporation, who are personally known to me, and each being first
duly sworn, did depose and say that they executed the foregoing on behalf of
said corporation by order of the Board of Directors of said corporation.
(NOTARY SEAL)
----------------------------------------------------
(Notary Signature)
NOTARY PUBLIC
Commission No.
--------------------------------------
A-6
<PAGE> 32
EXHIBIT B
DISCLOSURE SCHEDULES
Item 2.8(c) Any asset acquired or disposed of, or indebtedness incurred,
assumed, guaranteed, endorsed, paid or discharged; any
material amount of assets subjected or permitted to be
subjected to any liability or obligation or to any lien,
claim or encumbrance of any kind, except in the ordinary
course of business or pursuant to agreements in force at the
date of this Agreement and identified below:
None.
Item 2.10(a) Material liabilities or obligations, contingent or otherwise
of the Partnership of any nature:
None.
Item 2.10(b) Liabilities or obligations of TI (other than material
liabilities arising solely by reason of TI's status as a
partner in the Partnership) of any nature, whether absolute,
accrued, contingent or otherwise:
None.
Item 2.11 Liens and encumbrances on real and personal property
purchased by TI or the Partnership since the date of the
Balance Sheet, except for liens for taxes, assessments or
other governmental charges not yet due and payable.
None.
Item 2.12 Contracts and commitments not in the ordinary course of the
Partnership's business.
None.
Item 2.13 Pending suits, claims, actions or litigation or
administrative, arbitration or other proceedings or
governmental investigations or inquiries against TI or the
Partnership to which any of their business or assets is
subject.
None.
Item 2.14 Violations and defaults of TI and the Partnership.
None.
Item 6.2 Current liabilities and those debts and liabilities of TI
agreed to be assumed by Outback:
None.
B-1