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EXECUTION VERSION
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EXHIBIT 2.2
FIRST AMENDMENT
TO
AGREEMENT AND PLAN OF MERGER
FIRST AMENDMENT made as of November 16, 1994 to Agreement and Plan of
Merger dated as of August 23, 1994 (the "Agreement"), by and among GRR, Inc., a
Delaware corporation ("Parent"), GRR Acquisition Corp., a New York corporation
and a wholly-owned subsidiary of Parent ("Purchaser"), and Ground Round
Restaurants, Inc., a New York corporation (the "Company"). Any capitalized
term used in this First Amendment and not defined herein will have the meaning
given to it in the Agreement.
1. Section 4.9 of the Agreement is hereby deleted in its entirety and the
following is substituted in its place:
4.9 NO SOLICITATION. (a) The Company shall immediately cease,
and cause each of its, and its subsidiaries', representatives, agents
and advisors to terminate, any existing activities, discussions or
negotiations previously conducted with any parties other than Parent
and Purchaser with respect to any Alternative Transaction (as defined
in this Section 4.9); and after such date, the Company shall not, and
shall cause each of its, and its subsidiaries', officers, directors,
representatives, agents and advisors not to, solicit or encourage
inquiries or proposals with respect to, or furnish any non-public
information relating to or participate in any negotiations or
discussions concerning, any proposal regarding an acquisition or
purchase of all or a substantial portion of the assets of, or a
substantial equity interest in, the Company or any of its subsidiaries
or any merger or other business combination with the Company or any of
its subsidiaries or any recapitalization involving the Company or any
of its subsidiaries resulting in an extraordinary dividend or
distribution to the Company's shareholders or a self-tender for or the
redemption of some or all of the Shares (hereinafter collectively
referred to as an "Acquisition Proposal") other than as contemplated
by this Section 4.9. Notwithstanding the immediately preceding
sentence, neither the Company nor its Board of Directors shall be
prohibited from (i) engaging in discussions or negotiations with a
third party which orally or in writing has made, or expressed an
interest in making, an inquiry with regard to a possible Acquisition
Proposal and thereafter providing to such third party information
previously provided or made available to Parent, provided the third
party shall have entered into a confidentiality agreement
substantially similar to the Letter Agreement, (ii) following receipt
of an Acquisition Proposal which satisfies the conditions set forth in
the proviso of this sentence (a "Qualifying Acquisition Proposal"),
taking and disclosing to its shareholders a position contemplated by
Rule 14e-2(a) under the Exchange Act or otherwise making disclosure of
the Qualifying Acquisition Proposal to its shareholders or (iii)
following receipt of a Qualifying Acquisition Proposal, withdrawing
its recommendation referred to in Section 4.4 or adjourning or
otherwise postponing the Special Meeting; PROVIDED, HOWEVER, that the
Company shall engage, and
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EXECUTION VERSION
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shall permit its, and its subsidiaries', officers, directors,
representatives, agents and advisors to engage, in any of the
activities referred to in clauses (ii) and (iii) of this sentence only
to the extent that the Board of Directors of the Company (or an
authorized committee thereof) shall have determined in good faith that
such action is required under the fiduciary duties owed by the Board
of Directors of the Company to the shareholders of the Company on the
basis of a written opinion from the Company's counsel and a written
analysis of the Acquisition Proposal by its financial advisor Smith
Barney which analysis shall include a comparison of the financial
terms of such Acquisition Proposal and the transactions contemplated
in this Agreement. As used herein, the term Alternative Transaction
means either (i) a transaction pursuant to which a person other than
Parent or its affiliates (a "Third Party") acquires more than 50% of
the Shares then outstanding, whether from the Company or pursuant to a
tender offer or exchange offer or otherwise, (ii) a merger or other
business combination involving the Company pursuant to which any Third
Party acquires more than 50% of the outstanding equity securities of
the Company or the entity surviving such merger or business
combination, (iii) any other transaction pursuant to which any Third
Party acquires control of all or substantially all of the Company's
assets, (iv) a recapitalization of the Company resulting in
extraordinary dividends or distributions to the Company's shareholders
or (v) a self-tender for, or redemption of, in the aggregate during
such one-year period of more than ten percent of the Shares
outstanding immediately prior to the commencement of such initial
tender or redemption; provided, however, that the term "Alternative
Transaction" shall not include any acquisition of securities by a
broker-dealer in connection with a bona fide public offering of such
securities.
2. Section 6.1 of the Agreement is hereby deleted in its entirety and the
following is substituted in its place:
6.1 TERMINATION. This Agreement may be terminated and the
Merger contemplated hereby may be abandoned (a) by the mutual consent
of the boards of directors of Parent, Purchaser and the Company; (b)
by the Company, if Parent or Purchaser is in material breach of any of
the representations and warranties, covenants or obligations contained
in this Agreement or the Letter Agreement and, in the case of a
material breach of any covenant or obligation, such breach has not
been cured within ten (10) business days after the Company has
notified Parent of such breach; (c) by the Parent or Purchaser, if the
Company is in material breach of any representations and warranties,
covenants or obligations contained in this Agreement and, in the case
of a material breach of any covenant or obligation, such breach has
not been cured within ten (10) business days after Parent has notified
the Company of such breach; (d) by either Parent and Purchaser, on the
one hand, or the Company, on the other hand, if the Merger is not
consummated on or before January 31, 1995 (the "Expiration Date");
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EXECUTION VERSION
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PROVIDED, HOWEVER, that the right to terminate this Agreement under
this Section 6.1(d) shall not be available to any party whose failure
to fulfill any obligation under this Agreement has been the primary
cause of, or primarily results in, the failure of the Merger to have
been consummated within such period; (e) by either Parent and
Purchaser, on the one hand, or the Company, on the other hand, if the
holders of at least two-thirds of the Shares fail to adopt this
Agreement at the Special Meeting as required by applicable law; (f) by
either Parent and Purchaser, on the one hand, or the Company, on the
other hand, if either one is prohibited by an order or injunction
(other than an order or injunction issued on a temporary or
preliminary basis) of a court of competent jurisdiction from
consummating the Merger and all means of appeal and all appeals from
such order or injunction have been finally exhausted; (g) by the
Company, if the Company receives a Qualifying Acquisition Proposal
prior to shareholder adoption of this Agreement; provided, however,
that a condition to the effectiveness of the termination of this
Agreement and the abandonment of the merger pursuant to clause (g) of
this sentence is the payment of the Expenses (as defined in Section
6.10); (h) by the Parent or Purchaser upon at least five (5) business
days' notice, if within ten (10) business days after the Board of
Directors of the Company (x) withdraws or modifies its recommendation
referred to in Section 4.4 or (y) adjourns or otherwise postpones the
Special Meeting, the Board of Directors of the Company has not renewed
its recommendation in favor of the Merger and the adoption and
approval of this Agreement; or (i) by the Company, if the condition
set forth in Section 5.3.1 shall not have been satisfied. In the
event of any termination and abandonment pursuant to this Section 6.1,
no party hereto (or any of its directors or officers) will have any
liability or further obligation to any other party to this Agreement,
except for obligations in this Section 6.1, 6.10 and under the last
sentence of Section 4.2 and except that nothing herein will relieve
any party from liability for any breach of this Agreement.
Notwithstanding clause (d) of the second preceding sentence, if the
conditions set forth in Sections 5.1.2, 5.2.2, 5.2.3 and 5.2.4 have
been satisfied, either the Company or Parent may extend the Expiration
Date by up to thirty (30) days if the condition set forth in Section
5.2.5 has not been satisfied due to the inability to transfer or
otherwise retain liquor licenses.
3. Section 6.10 of the Agreement is hereby deleted in its entirety and
the following is substituted in its place:
6.10 EXPENSES. (a) In the event that this Agreement is
terminated, the Company shall be responsible for its own expenses
incurred in connection with the transactions contemplated hereby.
Except as otherwise provided in Section 6.10(b), the Company will
reimburse Purchaser for its expenses incurred in connection with the
transactions contemplated hereby ("Expenses") up to a maximum of one
million five hundred thousand dollars ($1,500,000) unless this
Agreement has been terminated under
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the circumstances delineated in the next following sentence.
Notwithstanding any other provision of this Section 6.10(a), the
Company shall have no obligation to reimburse Parent for any Expenses
in the event that (x) this Agreement is terminated pursuant to Section
6.1(a), (b) or (d) (but only if terminated by the Company under
circumstances in which (I) Parent's or Purchaser's failure to fulfill
any obligation under this Agreement, or the failure of the condition
in Section 5.2.1 to be satisfied, has been the primary cause of, or
primarily resulted in, the failure of the Effective Time to occur on
or before the date specified therein, (II) as of the date of such
termination, the conditions set forth in Sections 5.2.2, 5.2.3 and
5.2.4 were satisfied, and (III) as of such date, Smith Barney has not
withdrawn or, in any material respect, amended or modified the
Fairness Opinion) or (y) Parent and Purchaser have elected not to
consummate the Merger because of the failure of the condition in
Section 5.2.1 to be satisfied, PROVIDED that at such time there was no
reasonable basis to conclude that the other conditions set forth in
Sections 5.1 and 5.2 would not have been satisfied on or before the
Expiration Date.
(b) Under the circumstances set forth in the next
following sentence, the Company and Parent shall bear responsibility
for Expenses as follows: (i) Parent shall be responsible for the
first five hundred thousand dollars ($500,000) of Expenses, (ii) the
Company shall be responsible to reimburse Parent for the next five
hundred thousand dollars ($500,000) of Expenses, and (iii) the Company
shall be responsible to reimburse Parent for fifty percent (50%) of
the next two million dollars ($2,000,000) of Expenses; PROVIDED,
HOWEVER that under no circumstances shall the Company be responsible
to reimburse Parent for more than one million five hundred thousand
dollars ($1,500,000) of Expenses. The allocation of responsibility
for Expenses set forth in the immediately preceding sentence shall be
applicable if this Agreement is terminated pursuant to (x) Section
6.1(f) or (y) Section 6.1(d), PROVIDED, with respect to this clause
(y), that the failure of the Merger to be consummated prior to the
Expiration Date has primarily resulted from (I) the failure of the
conditions set forth in either Section 5.1.1 or Section 5.2.6 to be
satisfied or waived, and in each case Smith Barney has not withdrawn
or, in any material respect, amended or modified the Fairness Opinion,
or (II) the failure of the condition set forth in Section 5.2.5 to be
satisfied is due to the inability to transfer or otherwise retain
liquor licenses as contemplated by Section 5.2.5 unless waived.
4. The Agreement, as supplemented and modified by this First Amendment,
and any other writing referred to in the Agreement or delivered pursuant
thereto which forms a part thereof contain the entire agreement among the
parties with respect to the subject matter thereof, and amend, restate and
supersede all prior and contemporaneous arrangements or understandings with
respect thereto.
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EXECUTION VERSION
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5. Upon execution of this First Amendment, on and after the date hereof,
each reference in the Agreement to "Agreement," "Merger Agreement," "hereof,"
"herein" or words of like import, and each reference in the other documents
entered into in connection with the Agreement shall mean and be a reference to
the Agreement, as amended hereby. Except as specifically amended above, the
Agreement will remain in full force and effect and is hereby ratified and
confirmed as of the date of this Amendment.
6. This First Amendment will be governed by and construed in accordance
with the laws of the State of New York, without giving effect to the principles
of conflict of laws thereof.
7. This First Amendment may be executed in any number of counterparts,
each of which will be deemed to be an original but all of which together will
constitute but one agreement, and shall become effective when one or more
counterparts have been signed by each party and delivered to the other parties,
it being understood that all parties need not sign the same counterpart.
* * * * *
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EXECUTION VERSION
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IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to be executed in counterparts by their duly authorized officers all
as of the day and year first written above.
GRR, INC.
By /s/ Joseph Silvestri
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Joseph Silvestri
Vice President
GRR ACQUISITION CORP.
By /s/ Joseph Silvestri
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Joseph Silvestri
Vice President
GROUND ROUND RESTAURANTS, INC.
By /s/ Michael P. O'Donnell
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Michael P. O'Donnell
Chairman, President and
Chief Executive Office
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