Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement") is made and entered
into as of February 18, 2004 (the "Agreement Date"), by and among (i) NBC
Holdings Corp., a Delaware corporation (the "Parent"), (ii) New NBC Acquisition
Corp., a Delaware corporation and a wholly-owned subsidiary of the Parent
("Merger Sub"), (iii) NBC Acquisition Corp., a Delaware corporation (the
"Company"), (iv) each of the individuals and entities listed on Schedule 1
hereto, each in their capacity as a stockholder, optionholder and warrantholder
(as the case may be) of the Company (collectively, the "Initial Selling
Stockholders"), (v) each of the individuals that becomes a Selling Stockholder
party to this Agreement after the Agreement Date pursuant to the terms hereof
(together with the Initial Selling Stockholders, the "Selling Stockholders"),
and (vi) HWH Capital Partners, L.P., a Delaware limited partnership, acting in
its capacity as the Stockholder Representative (the "Stockholder
Representative"). Capitalized terms used herein without definition shall have
the respective meanings set forth in Section 10.2 hereof.
WHEREAS, the Board of Directors of the Company has approved and adopted
the form of this Agreement and the consummation of the transactions contemplated
hereby, and has determined to submit the execution and delivery of this
Agreement and the performance of the transactions contemplated hereby to the
holders of the outstanding Company Common Stock for their approval by majority
written consent in accordance with Section 228 of Delaware Law and the Company's
Certificate of Incorporation and Bylaws.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained and intending to be legally bound hereby, the
Parent, Merger Sub, the Company, the Selling Stockholders and the Stockholder
Representative hereby agree as follows:
ARTICLE 1
THE MERGER
1.1 The Merger. Subject to the other terms and conditions of this
Agreement, including those set forth in Article 7 hereof, at the Effective Time,
Merger Sub shall be merged with and into the Company (the "Merger"), and as a
result of the Merger, the separate corporate existence of Merger Sub shall cease
and the Company shall continue as the surviving corporation of the Merger (the
"Surviving Corporation").
1.2 Consummation of the Merger; Effective Time. Subject to the
fulfillment or waiver of all of the conditions contained in Article 7, as soon
as reasonably practicable on or after the later of March 4, 2004 or five (5)
business days following the satisfaction or waiver of all of the conditions
contained in Article 7, a closing (the "Closing") will be held at the offices of
Xxxxxxx XxXxxxxxx LLP in Boston, Massachusetts (or such other place and date as
the parties may agree). The date on which the Closing is actually held is
referred to herein as the "Closing
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Date." On the Closing Date, the Parent, Merger Sub and the Company shall cause
the Merger to be consummated by filing a certificate of merger substantially in
the form attached hereto as Exhibit A (the "Merger Certificate") with the
Secretary of State of the State of Delaware. The term "Effective Time" means the
time on the Closing Date of the filing of the Merger Certificate with the
Secretary of State of the State of Delaware (or such later time as may be agreed
by each of the parties hereto and specified in the Merger Certificate in
accordance with the provisions of the Delaware General Corporation Law
("Delaware Law")).
1.3 Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in the Merger Certificate and as provided by the
applicable provisions of Delaware Law. Without limiting the generality of the
foregoing, and subject thereto, upon the consummation of the Merger, all the
property, rights, privileges, powers and franchises of the Company and Merger
Sub, shall vest in the Surviving Corporation, and all debts, liabilities,
obligations, restrictions, disabilities and duties of each of those corporations
shall become the debts, liabilities, obligations, restrictions, disabilities and
duties of the Surviving Corporation.
1.4 Charter; Bylaws.
(a) At the Effective Time, the Certificate of Incorporation of the
Surviving Corporation (the "Surviving Corporation Charter") shall be the
Certificate of Incorporation of the Company, as amended by the Merger
Certificate.
(b) At the Effective Time, the Bylaws of the Surviving Corporation
shall be the Bylaws of the Company, as in effect immediately prior to the
Effective Time, until thereafter amended as provided by Delaware Law, the
Surviving Corporation Charter and such Bylaws.
1.5 Directors and Officers. The directors of Merger Sub immediately
prior to the Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the Surviving Corporation
Charter and the Bylaws of the Surviving Corporation, and until their respective
successors are duly elected and qualified or until their earlier death,
disability, resignation or removal. The officers of Merger Sub immediately prior
to the Effective Time shall be the initial officers of the Surviving
Corporation, in each case until their respective successors are duly elected or
appointed and qualified or until their earlier death, disability, resignation or
removal.
1.6 Closing Certificates. No later than two (2) business days prior to
the Closing, the Company shall prepare and deliver to the Parent and the
Stockholder Representative the following certificates which shall certify as to
(i) the estimated amount of Indebtedness of the Company to be outstanding at the
Closing (the "Indebtedness Certificate"), (ii) the amount of the LTM EBITDA (the
"EBITDA Certificate") and (iii) the information required to be set forth in
Section 3.5(c) of the Company Disclosure Schedule as of the Effective Time and
the amount of each of the elements included in the calculation of the Aggregate
Merger Consideration (the "Capitalization Certificate" and collectively with the
Indebtedness Certificate and the EBITDA Certificate, the "Closing
Certificates"). The Indebtedness Certificate shall include detail on the
calculation of the Average Net Revolver Balance. Prior to and after delivery of
the Closing Certificates, the Company shall cause its representatives to consult
with the Parent and the
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Stockholder Representative and their respective representatives in its
calculation of the amount of Indebtedness to be outstanding at the Closing.
1.7 Conversion of Securities.
(a) Conversion of Shares. Each share of Company Common Stock
issued and outstanding immediately prior to the Effective Time (other than any
shares of Company Common Stock held by Parent or any of the Parent Affiliates)
will be converted at the Effective Time into the right to receive from the
Parent an amount equal to the Per Share Merger Consideration, calculated in
accordance with the amounts set forth on the Closing Certificates. All such
shares of Company Common Stock, when so converted, shall no longer be
outstanding and shall automatically be cancelled and retired and shall cease to
exist, and each holder of a certificate representing any such shares of Company
Common Stock shall cease to have any rights with respect thereto, except the
right to receive the Per Share Merger Consideration therefor upon the surrender
of such certificate (or delivery of an appropriate lost stock affidavit) in
accordance with Section 2.1. Notwithstanding anything to the contrary in this
Agreement, no Per Share Merger Consideration shall be payable in respect of
shares of Company Common Stock which are Dissenting Shares or which are held by
the Parent, Merger Sub, the Company or any of the Parent Affiliates.
(b) Roll-Over Options. In the Merger, all options to purchase
Company Common Stock listed on Schedule 1.7(b) hereto, whether or not
exercisable, whether or not vested, and whether or not performance-based, which
are outstanding at, and have not expired by their terms prior to, the Effective
Time (each a "Roll-Over Option"), shall at the Effective Time expire and all
rights and obligations of all parties thereunder shall be extinguished. As of
the Effective Time, Parent shall grant each holder of a Roll-Over Option an
option to acquire capital stock of the Parent under the Parent's 2004 Stock
Option Plan (the "Parent Incentive Plan") having those terms and conditions
described on Schedule 1.7(b) hereto (each such Parent option referred to herein
as a "Replacement Option"); provided, that each Replacement Option shall, except
to the extent set forth on Schedule 1.7(b) hereto or in the Parent Incentive
Plan, otherwise have the same terms as the Roll-Over Option it is intended to
replace. Immediately following the Effective Time, Parent will issue to each
person who, immediately prior to the Effective Time was a holder of a Roll-Over
Option, a written document evidencing the corresponding Replacement Option. At
any time after the Effective Time any certificates or other instruments
representing Roll-Over Options shall represent only the right to receive a
written document representing the corresponding Replacement Option pursuant to
this Section 1.7(b). Each Selling Stockholder who holds Roll-Over Options hereby
agrees, notwithstanding the terms of such Roll-Over Options, to the treatment
and disposition of such Roll-Over Options in accordance with the terms of this
Section 1.7(b).
(c) Disposition of Company Options. In the Merger, all options to
purchase Company Common Stock other than any Roll-Over Options, whether or not
exercisable, whether or not vested, and whether or not performance-based, which
are outstanding at, and have not expired by their terms prior to, the Effective
Time (each a "Company Option"), shall not be assumed by the Surviving
Corporation or the Parent, but shall instead be converted at the Effective Time
into the right to receive from the Parent in accordance with Section 2.1 an
amount in cash equal to the excess, if any, of the aggregate Per Share Merger
Consideration that
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would otherwise be payable with respect to all shares of Company Common Stock
that would be issuable upon exercise of such Company Option ("Option Shares")
over the aggregate exercise price otherwise payable pursuant to the terms of
such Company Option by the holder to acquire such Option Shares, and all other
rights and obligations of the parties to the Company Options shall thereafter
cease and terminate. Each Selling Stockholder who holds Company Options hereby
agrees, notwithstanding the terms of such Company Options, to the treatment and
disposition of such Company Options in accordance with the terms of this Section
1.7(c).
(d) Treasury Stock. Each share of Company Common Stock held in the
treasury of the Company immediately prior to the Effective Time shall be
canceled and extinguished at the Effective Time without any conversion thereof
and no payment of cash or any other consideration shall be made with respect
thereto.
(e) Stock of Merger Sub. Each share of common stock of Merger Sub
issued and outstanding immediately prior to the Effective Time shall be
converted into one validly issued fully paid and nonassessable share of common
stock of the Surviving Corporation.
ARTICLE 2
EXCHANGE OF CERTIFICATES; PAYMENTS; STOCKHOLDER REPRESENTATIVE
2.1 Exchange of Certificates and Instruments for Closing Payment.
(a) Exchange Procedures.
(i) Within a reasonable period of time prior to the Closing,
Parent will deliver to the Company forms of the transmittal materials which
Parent will require from the Selling Stockholders in respect of their shares of
Company Common Stock or Company Options, which materials shall not expand the
obligations of the Selling Stockholders hereunder. The Company will distribute
such materials to the Selling Stockholders. Immediately following the Effective
Time, the Parent will pay to each Selling Stockholder who has completed such
transmittal materials and returned them to the Parent at or prior to the Closing
together with the certificate or certificates representing outstanding shares of
Company Common Stock (or appropriate lost stock affidavits) (collectively, the
"Merger Instruments") that portion of the Aggregate Merger Consideration payable
as a result of the Merger to such Selling Stockholder, by check (or a wire
transfer of immediately available funds to the extent that the aggregate amount
owed to any such Selling Stockholder at the Closing is in excess of $2,500,000)
in the amount representing such portion of the Aggregate Merger Consideration to
which such Selling Stockholders are entitled. The Parent shall not be required
to pay any of the Aggregate Merger Consideration to the account of a Selling
Stockholder until receipt from such Selling Stockholder of such Selling
Stockholder's completed Merger Instruments. Parent shall be entitled to rely
entirely on the information contained in the Capitalization Certificate for
purposes of satisfying Parent's obligation to deliver the Aggregate Merger
Consideration.
(ii) Until surrendered as contemplated by this Section 2.1,
each Merger Instrument shall be deemed at any time after the Effective Time to
represent only the right to
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receive upon such surrender the applicable portion of the Aggregate Merger
Consideration payable pursuant to Section 1.7. Upon receipt of such Selling
Stockholder's applicable Merger Instruments, the Parent will deliver to such
Selling Stockholder a check (or a wire transfer of immediately available funds
to the extent that the aggregate amount owed to any such Selling Stockholder at
the Closing is in excess of $2,500,000) representing that portion of the
Aggregate Merger Consideration to which such Selling Stockholder is entitled.
(b) No Further Rights in Merger Instruments and Company Options.
After the Effective Time, holders of Company Common Stock (other than the Parent
or the Parent Affiliates), Roll-Over Options or Company Options outstanding
immediately prior to the Effective Time will cease to be, and will have no
rights as, stockholders or rightholders of the Company or the Surviving
Corporation, other than (i) in the case of Company Common Stock (other than
Dissenting Shares), and Company Options, the rights to receive the applicable
portions of the Aggregate Merger Consideration to be paid hereunder; (ii) in the
case of Roll-Over Options, the right to receive Replacement Options; (iii) in
the case of Dissenting Shares, the rights afforded to the holders thereof under
Section 262 of Delaware Law and (iv) rights under this Agreement.
(c) No Liability. Neither the Parent, the Surviving Corporation
nor the Company shall be liable to any holder of Company Common Stock, Roll-Over
Options or Company Options for any portion of the Aggregate Merger Consideration
or Replacement Options delivered to an appropriate public official pursuant to
any abandoned property, escheat or similar law.
(d) Withholding Rights. Each of the Surviving Corporation and the
Parent shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of Company Common Stock,
Roll-Over Options or Company Options such amounts as it is required to deduct
and withhold with respect to the making of such payment under the Code, or any
provision of state, local or foreign Tax Law. To the extent that amounts are so
withheld by the Surviving Corporation or the Parent, as the case may be, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to such holder in respect of which such deduction and withholding was
made by Surviving Corporation or the Parent, as the case may be.
(e) Repayment of Indebtedness. Notwithstanding anything herein to
the contrary, the portion of the Aggregate Merger Consideration to be paid at
the Closing to any Selling Stockholder shall be reduced by the amount, if any,
of any indebtedness for borrowed money owed by such Selling Stockholder to the
Company or its Subsidiaries which is secured by such Selling Stockholder's
shares of Company Common Stock.
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2.2 Stock Transfer Books. At the Effective Time, the stock transfer
books of the Company shall be closed and there shall be no further registration
of transfers of Company Common Stock (other than any shares of Company Common
Stock held by the Parent or the Parent Affiliates), Roll-Over Options or Company
Options thereafter on the records of the Company. From and after the Effective
Time, the holders of certificates representing such shares outstanding, options
or warrants immediately prior to the Effective Time shall cease to have any
rights with respect to such shares except as otherwise provided herein or by any
applicable Laws.
2.3 Dissenting Shares; Waiver of Appraisal Rights.
(a) Notwithstanding any provision of this Agreement to the
contrary, shares of Company Common Stock that are outstanding immediately prior
to the Effective Time and which are held by stockholders (other than the Parent
or the Parent Affiliates) who shall have not voted in favor of the Merger or
consented thereto in writing and who shall have exercised appraisal rights for
such shares of Company Common Stock in accordance with Delaware Law, and who, as
of the Effective Time, have not effectively withdrawn or lost such appraisal
rights (collectively, the "Dissenting Shares"), shall not be converted into or
represent the right to receive any portion of the amounts to be paid pursuant to
Section 1.7, but the holders thereof shall only be entitled to such rights as
are granted by Delaware Law. All Dissenting Shares held by stockholders who
shall have failed to perfect or who effectively shall have withdrawn or lost
their appraisal rights shall thereupon be deemed to have been converted into and
to have become exchangeable for, as of the later of the Effective Time or the
occurrence of such event, the right to receive an appropriate portion of the
amounts to be paid pursuant to Section 1.7, without any interest thereon, upon
surrender, in the manner provided in Section 2.1, of the Merger Instruments that
formerly evidenced such shares.
(b) The Company shall give the Parent (i) prompt notice of any
demands for appraisal in respect of Company Common Stock received by the
Company, withdrawals of such demands, and any other instruments served pursuant
to Delaware Law, and received by the Company, and (ii) the opportunity to direct
all negotiations and proceedings with respect to demands for appraisal under
Delaware Law. The Company shall not, except with the prior written consent of
the Parent, make any payment with respect to any demands for appraisal in
respect of shares of Company Common Stock or settle or offer to settle any such
demands other than by operation of law or pursuant to a final order of a court
of competent jurisdiction.
(c) Each Selling Stockholder hereby waives all of such Selling
Stockholder's appraisal rights and any right to the fair market value of its
Securities pursuant to Section 262 of Delaware Law or otherwise arising in
connection with the Merger, and agrees not to assert any such appraisal rights
in connection with the Merger.
2.4 Stockholder Representative.
(a) Appointment of Stockholder Representative. By the execution
and delivery of this Agreement, each Selling Stockholder hereby irrevocably
constitutes and appoints the Stockholder Representative as the representative of
such Selling Stockholder under this Agreement being the true and lawful agent
and attorney-in-fact of such Selling Stockholder, effective from and after the
Effective Time, with full authority and power of substitution to act in
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the name, place and stead of such Selling Stockholder with respect to the
consummation of the transactions contemplated hereby in accordance with the
terms of this Section 2.4, and the Stockholder Representative, by its execution
hereof, agrees to accept and discharge such appointment. The Stockholder
Representative may resign as the Stockholder Representative for any reason at
any time by written notice to the Parent and each Selling Stockholder. The
Parent shall be entitled to rely, without any investigation or inquiry, on the
instruction of the Stockholder Representative pursuant to this Section 2.4.
(b) Authority After the Effective Time. From and after the
Effective Time, the Stockholder Representative shall be authorized to:
(i) take all actions required by, and exercise all rights
granted to, the Stockholder Representative in this Agreement;
(ii) receive all notices or other documents given or to be
given to the Stockholder Representative by the Parent or any other person
pursuant to this Agreement;
(iii) negotiate, undertake, compromise, defend, resolve and
settle on behalf of the Selling Stockholders, any suit, proceeding or dispute
under this Agreement between such Selling Stockholder and the Parent or
Surviving Corporation;
(iv) execute and deliver all agreements, certificates and
documents required or deemed appropriate by the Stockholder Representative in
connection with any of the transactions contemplated by this Agreement;
(v) engage special counsel, accountants and other advisors
and incur such other expenses in connection with any of the transactions
contemplated by this Agreement; and
(vi) take such other action as the Stockholder Representative
may deem appropriate, including:
(A) agreeing to any modification or amendment of this
Agreement on behalf of the Selling Stockholders and executing and delivering an
agreement effecting such modification or amendment; and
(B) all such other matters as the Stockholder
Representative may deem necessary or appropriate to carry out the intents and
purposes of this Agreement.
The parties hereto understand and agree that the Stockholder Representative may,
but shall be under no duty or obligation to, take or refrain from taking any or
all of the above actions or any other action, and any taking or refraining from
taking any or all of the above actions or any other action shall not create any
duty or obligation to take or refrain from taking any later or successive
action.
(c) Reimbursement of Expenses. The Stockholder Representative
shall be entitled to receive reimbursement from the Selling Stockholders (on a
pro rata basis, based on the portion of the Aggregate Merger Consideration such
Selling Stockholders are entitled to receive
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at the Effective Time pursuant to this Agreement) for any and all expenses,
charges and liabilities, including reasonable attorneys' fees, incurred by the
Stockholder Representative in the performance or discharge of its rights and
obligations under this Agreement.
(d) Extent and Survival of Authority. The appointment of the
Stockholder Representative is an agency coupled with an interest and is
irrevocable and any action taken by the Stockholder Representative pursuant to
the authority granted in this Section 2.4 shall be effective and absolutely
binding on each of the Selling Stockholders notwithstanding any contrary action
of or direction from such Selling Stockholders, except for actions or omissions
of the Stockholder Representative constituting willful misconduct or gross
negligence. The death or incapacity, or dissolution or other termination of
existence, of any Selling Stockholder shall not terminate the authority and
agency of the Stockholder Representative.
(e) Release from Liability; Indemnification. All actions by the
Stockholder Representative are acknowledged by the parties hereto to be taken by
him solely as agent and attorney-in-fact for each Selling Stockholder. Each
Selling Stockholder hereby consents and agrees to all actions or omissions taken
or omitted to be taken in good faith by the Stockholder Representative pursuant
to this Agreement. Each Selling Stockholder hereby releases the Stockholder
Representative and his representatives from, and each Selling Stockholder agrees
to indemnify and hold harmless the Stockholder Representative and his
representatives against, all damages, losses, liabilities, charges, penalties,
costs and expenses (including, without limitation, court costs and attorney's
fees and expenses) incurred in any claim, action, dispute or proceeding between
any such person and any third party (including, without limitation, the Company,
the Parent, or the Surviving Corporation or any Affiliate thereof) or otherwise
incurred or suffered as a result of or arising out of any action or omission
taken or omitted to be taken in good faith by the Stockholder Representative
pursuant this Agreement. Each of the Parent and the Surviving Corporation, on
behalf of itself and each of its Affiliates, hereby releases the Stockholder
Representative from any claim, action or proceeding based on or arising out of
any action or omission taken or omitted to be taken in good faith by the
Stockholder Representative pursuant to this Agreement. Notwithstanding the
foregoing or anything to the contrary herein, nothing in this Section 2.4 shall
limit the liability of the Stockholder Representative in his capacity as a
Selling Stockholder (and not in his capacity as Stockholder Representative)
under Article 9 of this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY
Each of the Company and the Selling Stockholders hereby represents and
warrants to Parent and Merger Sub, immediately prior to the Effective Time, as
follows, subject in each case to such exceptions as are specifically
contemplated by this Agreement or as are set forth in the attached "Company
Disclosure Schedule" delivered herewith (the "Company Disclosure Schedule").
Notwithstanding any other provision of this Agreement or the Company Disclosure
Schedule, each exception set forth in a Section of the Company Disclosure
Schedule will be deemed to qualify only the representations and warranties set
forth in a particular Section or Sections of this Agreement (i) which Section(s)
are specifically identified (by cross-reference or otherwise) in the Company
Disclosure Schedule as being qualified by such exception, or (ii) with
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respect to which representations and warranties the relevance of such exception
is readily apparent on the face of the disclosure of such exception set forth in
the Company Disclosure Schedule. References to the Company in this Article 3
shall be deemed to include, where applicable, the Company and its Subsidiaries
on a consolidated basis. Notwithstanding anything to the contrary, the Selling
Stockholders shall be solely responsible for any breach of the representations
and warranties contained in this Article 3.
3.1 Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, and the Company has all requisite corporate power and
authority and all authorizations, licenses and permits necessary to own and
operate its properties and to carry on its businesses as now conducted, except
where the failure to hold such authorizations, licenses and permits would not
have a Material Adverse Effect. The Company has made available to Parent and
Merger Sub complete and correct copies of the certificate of incorporation,
by-laws and minute books, each as currently in effect, of the Company.
3.2 Subsidiaries. Except as set forth in Section 3.2 of the Company
Disclosure Schedule, the Company does not own or hold the right to acquire any
stock, partnership interest or joint venture interest or other equity ownership
interest in any other Person. The Company owns all of the issued and outstanding
capital stock of each of its Subsidiaries. Each Subsidiary listed in Section 3.2
of the Company Disclosure Schedule is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, has all requisite corporate power and authority and all
authorizations, licenses and permits necessary to own its properties and to
carry on its businesses as now conducted and is qualified to do business in
every jurisdiction in which its ownership of property or the conduct of business
requires it to qualify, except where the failure to hold such authorizations,
licenses and permits or to be so qualified would not have a Material Adverse
Effect. The Company has made available to Parent and Merger Sub complete and
correct copies of the certificate of incorporation, by-laws and minute books,
each as currently in effect, of each of its Subsidiaries. For purposes of this
Article 3, the term Subsidiary shall be deemed to include Specialty Books, Inc.,
except where the context otherwise requires the term to apply only to the
Principal Subsidiary.
3.3 Authorization; Binding Obligations. Subject to the Stockholder
Approval, the execution and delivery of this Agreement and the consummation of
the transactions contemplated by this Agreement have been approved by all
necessary action on the part of the Company. Subject to the Stockholder
Approval, the Company has full legal right and power and all authority and
approvals required to execute and deliver this Agreement and to perform fully
its obligations hereunder. This Agreement has been duly executed and delivered
by the Company, and assuming due execution and delivery hereof by each of the
other parties hereto, this Agreement constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
3.4 No Conflicts. Except as set forth in Section 3.4 of the Company
Disclosure Schedule, the execution, delivery and performance of this Agreement
by the Company and the consummation of the transactions contemplated hereby do
not:
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(a) violate the certificate of incorporation or bylaws of the
Company or its Subsidiaries;
(b) assuming the termination of the Buy-Sell Agreement, the
Stockholders Agreement and the Registration Rights Agreement as
contemplated by Section 6.7, require the Company or any of its
Subsidiaries to obtain any consents, approvals, authorizations or actions
of, or make any filings with or give any notices to, any Governmental
Authority or any other Person, except for those consents and notices set
forth in Section 3.4 of the Company Disclosure Schedule, filings under the
HSR Act and the Stockholder Approval (collectively, the "Company Consents
and Notices");
(c) if the Company Consents and Notices are obtained or made on a
timely basis, violate, conflict with or result in the breach of any of the
terms and conditions of, otherwise cause the termination of or give any
other contracting party the right to terminate, or constitute (or with
notice or lapse of time or both constitute) a default under, or accelerate
any rights of any party to, any material indenture, mortgage, lease, loan
agreement or other material agreement or instrument to which the Company
or any Subsidiary is bound; or
(d) if the Company Consents and Notices are obtained or made,
violate any laws or orders of any Governmental Authority applicable to the
Company or its Subsidiaries.
3.5 Capital Stock.
(a) The authorized number of shares of capital stock of the
Company consist of 5,000,000 shares of Company Common Stock. As of the date
hereof, 1,187,664.8 shares of Company Stock are issued and outstanding, of which
788,544.4 shares are owned of record by the Selling Stockholders in the amounts
as set forth in Section 3.5 of the Company Disclosure Schedule. All of the
outstanding shares of capital stock of the Company and its Subsidiaries have
been duly authorized and are validly issued, fully paid and nonassessable, and
have not been issued in violation of (nor are any of the authorized shares of
capital stock of the Company subject to) any preemptive or similar rights
created by statute, the certificate of incorporation or bylaws of the Company,
or any agreement to which it is a party or by which it is bound. There are no
declared or accrued but unpaid dividends with respect to any shares of Company
Common Stock. Except as set forth in Section 3.5 of the Company Disclosure
Schedule, neither the Company nor its Subsidiaries has any other capital stock,
equity securities or securities containing any equity features authorized,
issued or outstanding, and there are no rights, subscriptions, warrants,
options, convertible securities or agreements of any kind outstanding to
purchase or otherwise acquire any shares of capital stock or other equity
securities of the Company or its Subsidiaries. Except as set forth in Section
3.5 of the Company Disclosure Schedule, there are no agreements or other
obligations (contingent or otherwise) which require the Company or its
Subsidiaries to repurchase or otherwise acquire any shares of the capital stock
or other equity securities of the Company or its Subsidiaries.
(b) As of the date of this Agreement, (x) 90,446 shares of Company
Common Stock are reserved for issuance upon exercise of outstanding options
issued pursuant to the NBC
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Acquisition Corp. 2003 Performance Stock Option Plan, adopted August 1, 2003, as
amended, the NBC Acquisition Corp. 2003 Stock Option Plan, adopted August 1,
2003, the NBC Acquisition Corp. 1998 Performance Stock Option Plan, adopted June
30, 1998, as amended, and the NBC Acquisition Corp. 1998 Stock Option Plan,
adopted June 30, 1998, as amended (collectively, the "Option Plans") and (y)
116,786 shares of Company Common Stock are held in treasury by the Company.
(c) Section 3.5(c) of the Company Disclosure Schedule sets forth
(i) the name of each Securityholder, (ii) the Securities owned of record by each
Securityholder, (iii) the number of such Securities to be purchased pursuant to
the Stock Purchase Agreement, (iv) the number of such Securities to be
contributed to the Parent pursuant to the Contribution Agreement and (v) in the
case of options, warrants, instruments and other rights to acquire capital stock
of the Company, (A) the per-share exercise price payable therefor, (B) the
number of shares of the Company's capital stock each option, warrant, instrument
or other right are vested or exercisable as of the Agreement Date and (C)
whether such option is a Roll-Over Option or a Company Option.
3.6 LTM EBITDA. The LTM EBITDA was at least $58,000,000.
3.7 Indebtedness; Closing Certificates.
(a) Except as set forth in Section 3.7 of the Company Disclosure
Schedule, there are no contracts, agreements, understandings or other
obligations relating to Indebtedness with respect to the Company or its
Subsidiaries, which would affect the calculation of the Aggregate Equity Value.
(b) Neither the Company nor any Subsidiary has guaranteed any
indebtedness for borrowed money of any third party.
(c) The other financial information contained in the EBITDA
Certificate and the Indebtedness Certificate, including, without limitation, the
calculation of Average Net Revolver Balance, will be true and correct as of the
Effective Time.
3.8 Capitalization Certificate. The information contained in the
Capitalization Certificate will be true and correct as of immediately prior to
the consummation of the transactions contemplated by the Stock Purchase
Agreement and the Contribution Agreement.
3.9 Brokers; Expenses. No finder, broker, agent or other intermediary
has acted for or on behalf of the Company or its Subsidiaries in connection with
the negotiation of this Agreement or the consummation of the transactions
contemplated hereby.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
The Parent and Merger Sub, jointly and severally, hereby represent and
warrant to the Company and each of the Selling Stockholders as of the Effective
Time, as follows, subject in each case to such exceptions as are specifically
contemplated by this Agreement.
4.1 Organization, Good Standing and Qualification. The Parent is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Merger Sub is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Each of
the Parent and Merger Sub has all requisite corporate power and authority to own
and operate its properties and assets, to execute and deliver this Agreement,
and to perform their respective obligations under, this Agreement, and to carry
on its business as presently conducted. Each of the Parent and Merger Sub is
duly qualified to transact business and is in good standing in each jurisdiction
where such qualification is required and in which failure to so qualify would
have a Material Adverse Effect on such Person.
4.2 Authorization; Binding Obligations. The execution and delivery of
this Agreement and the consummation of the transactions contemplated by this
Agreement have been approved by all necessary action on the part of the Parent
and Merger Sub. The Parent and Merger Sub have full legal right and power and
all authority and approvals required to execute and deliver this Agreement and
to perform fully their obligations hereunder. This Agreement has been duly
executed and delivered by the Parent and Merger Sub, and assuming due execution
and delivery hereof by each of the other parties hereto, this Agreement
constitutes the legal, valid and binding obligation of the Parent and Merger
Sub, enforceable against the Parent and Merger Sub in accordance with its terms.
4.3 No Conflicts. The execution, delivery and performance of this
Agreement by the Parent and Merger Sub and the consummation of the transactions
contemplated hereby do not:
(a) violate the certificate of incorporation or bylaws of the
Parent or Merger Sub;
(b) require the Parent or Merger Sub to obtain any consents,
approvals, authorizations or actions of, or make any filings with or give
any notices to, any Governmental Authority or any other Person, except for
filings under the HSR Act;
(c) violate, conflict with or result in the breach of any of the
terms and conditions of, otherwise cause the termination of or give any
other contracting party the right to terminate, or constitute (or with
notice or lapse of time or both constitute) a default under, or accelerate
any rights of any party to, any material indenture, mortgage, lease, loan
agreement or other material agreement or instrument to which the Parent or
Merger Sub is bound; or
(d) violate any laws or orders of any Governmental Authority
applicable to the Parent or Merger Sub, subject to compliance with the HSR
Act.
4.4 Brokers. The Parent and Merger Sub have not incurred, nor will they
incur, any liability for brokerage or finders' fees or agents' commissions or
investment bankers' fees or any
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similar charges in connection with this Agreement or the consummation of the
transactions contemplated hereby or thereby.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS
Each Selling Stockholder hereby, severally and not jointly, represents and
warrants, as of the Agreement Date and as of immediately prior to the Effective
Time, to Parent and Merger Sub, solely as to such Selling Stockholder, as
follows:
5.1 Due Organization. Each such Selling Stockholder that is not an
individual has been duly organized, is validly existing and is in good standing,
as applicable, under the laws of the jurisdiction of its organization.
5.2 Power; Due Authorization; Binding Agreement. Such Selling
Stockholder has full legal capacity, power and authority to execute and deliver
this Agreement, to perform its obligations hereunder, and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement,
and the consummation of the transactions contemplated hereby by any such Selling
Stockholder, have been duly and validly authorized by all necessary action on
the part of such Selling Stockholder, and no other proceedings on the part of
such Selling Stockholder are necessary to authorize its entry into this
Agreement, or to consummate the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by such Selling Stockholder and
constitutes a valid and binding agreement of such Selling Stockholder,
enforceable against such Selling Stockholder in accordance with its respective
terms, except that enforceability may be subject to the effect of any applicable
bankruptcy, reorganization, insolvency, moratorium or other similar laws
affecting or relating to the enforcement of creditors rights generally and to
general principles of equity, regardless of whether enforcement is sought in a
proceeding at law or in equity.
5.3 Ownership of Shares. The shares of the Company's capital stock and
other Securities (including all options, warrants and other contingent
securities) set forth opposite such Selling Stockholder's name on Section 3.5(c)
of the Company Disclosure Schedule (the "Owned Shares") are owned of record and
beneficially by such Selling Stockholder and constitute all of the Securities
owned of record or beneficially by such Selling Stockholder. Such Selling
Stockholder has sole voting power (to the extent the Owned Shares confer such
powers (the "Voting Securities")) and sole dispositive power (to the extent the
Owned Shares are transferable) with respect to all of the Owned Shares owned by
such Selling Stockholder. All of the Owned Shares held by each Selling
Stockholder are free and clear of all liens, pledges, charges or security
interests of any kind or nature (other than those imposed by this Agreement and
the Stockholders Agreement or in favor of the Company). Such Selling Stockholder
has, and shall have, the ability to vote all of the Voting Securities entitled
to vote on this Agreement and the transactions contemplated hereby.
5.4 No Conflicts. Assuming the termination of the Buy-Sell Agreement,
the Stockholders Agreement and the Registration Rights Agreement as contemplated
by Section 6.7, the execution and delivery of this Agreement by such Selling
Stockholder does not, and the
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performance of the terms of this Agreement by such Selling Stockholder will not,
(i) except as may be required pursuant to the HSR Act, require such Selling
Stockholder to obtain the consent or approval of any governmental or regulatory
authority, domestic or foreign (which consent has not been obtained prior to the
date hereof), (ii) in the case of a Selling Stockholder that is not an
individual, conflict with or violate the organizational documents of such
Selling Stockholder, (iii) require the consent or approval of any other person
pursuant to any material agreement, obligation or instrument binding on such
Selling Stockholder or its properties and assets if the failure to obtain such
consent or approval could be reasonably expected to materially adversely affect
the ability of such Selling Stockholder to perform its obligations hereunder,
(iv) conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to such Selling Stockholder or by which any property or asset
of such Selling Stockholder is bound if such violation or conflict would
materially adversely affect the ability of such Selling Stockholder to perform
its obligations hereunder, subject to compliance with the HSR Act, or (v)
violate any other agreement to which such Selling Stockholder is a party
including, without limitation, any voting agreement, stockholders agreement,
irrevocable proxy or voting trust if such violation could be reasonably expected
to materially adversely affect the ability of such Selling Stockholder to
perform its obligations hereunder.
ARTICLE 6
ADDITIONAL AGREEMENTS
6.1 Exclusivity. From the Agreement Date through the earlier of the
termination of this Agreement or Effective Time, the Company will refrain from,
directly or indirectly, including through any officer, director, agent,
representative or otherwise, and will cause its officers, directors, agents and
representatives to refrain from, (i) soliciting, initiating, encouraging,
promoting, recommending or accepting any other inquiries, proposals or offers
from any person relating to (w) any transaction for the purchase of all or any
significant portion of the capital stock or a material portion of the assets of
the Company, (x) any business combination with the Company, or (y) any other
extraordinary business transaction involving intellectual property owned or
licensed by the Company, or (ii) participating in any discussions,
conversations, negotiations or other communications with any other person
regarding any of the foregoing, other than to inform any such third party of the
Company's obligation not to participate in any such discussions or
conversations.
6.2 Public Announcements. At any time after the date hereof, (i) the
Parent and the Surviving Corporation shall not, without the prior written
consent of the Stockholder Representative, issue any press release or otherwise
make any public statements with respect to this Agreement or the Merger and
related transactions, except as may be required by law or in connection with the
financings described in Sections 7.2(h), (i) and (n) and the offers to purchase
described in Sections 7.2(l) and (m), and (ii) the Company and the Stockholder
Representative shall not, without the prior written consent of the Parent, issue
any press release or otherwise make any public statements with respect to this
Agreement or the Merger and related transactions at any time, except as may be
required by law.
6.3 Notice of Developments. After the Closing Date, the Parent, on the
one hand, and the Surviving Corporation, on the other hand, shall be required to
give prompt written notice to
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the other party and to the Stockholder Representative of any material
development causing a breach of any of its own representations and warranties in
this Agreement.
6.4 Further Assurances. Following the Closing Date, each of the Parent,
the Surviving Corporation and the Selling Stockholders will use its commercially
reasonable best efforts to take, or cause to be taken, any further action
necessary or desirable to carry out the purposes of this Agreement.
6.5 Stockholder Approval. Following the execution of this Agreement, the
Company will promptly solicit the approval by written consent of the execution
and delivery by the Company of this Agreement, and the consummation of the
transactions contemplated hereby, by those Selling Stockholders holding the
requisite number of shares of each class of the Company's capital stock required
to approve the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby (the "Stockholder Approval").
6.6 HSR Act. The Company and the shareholders of the Parent have made a
pre-merger notification filing under the HSR Act with respect to the Merger and
the other transactions contemplated hereby prior to the Agreement Date. From and
after the Agreement Date, each of the parties will:
(a) as promptly as is practicable after receiving any governmental
request under the HSR Act for additional information, documents, or other
materials, use its reasonable best efforts to comply with such request;
(b) cooperate with the other in connection with resolving any
governmental inquiry or investigation relating to their respective HSR Act
filings, the Merger or any related inquiry or investigation;
(c) use its reasonable best efforts to obtain an early termination
of the applicable waiting period and to make any further filings pursuant
thereto that may be reasonably necessary, proper or advisable (including,
without limitation, any filing reasonably required such that the Closing will
not be delayed);
(d) promptly inform the other of any communication with, and any
proposed understanding, agreement, or undertaking with any governmental entity
relating to their respective HSR Act filings, the Merger or any related inquiry
or investigation; and
(e) to the extent reasonably practicable, give the other
reasonable advance notice of, and the opportunity to participate in (directly or
through its representatives), any meeting or conference with any governmental
entity, whether domestic or foreign, relating to their respective HSR Act
filings, the Merger or any related inquiry or investigation.
6.7 Termination of Agreements. Each of the Company and each Selling
Stockholder who is party to (i) the Amended and Restated Buy/Sell Agreement,
dated as of July 1, 2003 (the "Buy-Sell Agreement"), by and among the Company
and the Securityholders named therein, (ii) the Amended and Restated
Stockholders Agreement, dated as of July 1, 2003 (the "Stockholders Agreement"),
by and among the Company and the Stockholders named therein, and (iii) the
Amended and Restated Registration Rights Agreement, dated as of July 1, 2003
(the "Registration Rights Agreement"), by and among the Company and the
Stockholders named
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therein, hereby agree that, subject to the consent of the other parties thereto,
effective as of the Effective Time, each of such agreements shall be terminated
in all respects, and shall be of no further force and effect, with no continuing
obligations or liability of any party thereunder.
6.8 Waiver of Certain Rights. Subject to Section 8.2, each Selling
Stockholder who pursuant to the Stockholders Agreement had rights of first
refusal or other rights with respect to shares of Company Common Stock held by
other Stockholders pursuant to the Stockholders Agreement, hereby agrees and
acknowledges that it has irrevocably waived any and all such rights such Selling
Stockholder may have with respect to the transactions contemplated by the
Contribution Agreement, the Stock Purchase Agreement and this Agreement.
6.9 Directors' and Officers' Indemnification. Parent agrees that all
rights to indemnification and exculpation from liabilities for acts or omissions
occurring at or prior to the Effective Time now existing in favor of the current
or former directors or officers of the Company and its Subsidiaries as provided
in their respective certificates of incorporation or bylaws (or comparable
organizational documents) shall survive the Merger and shall continue in full
force and effect in accordance with their terms for a period of six (6) years
following the Effective Time, except for such changes as may be required
pursuant to applicable law. Prior to the Closing, the Company shall obtain a
"tail" insurance policy that would indemnify all of the directors and officers
of the Company in respect of acts or omissions occurring prior to the Effective
Time for a period of three (3) years after the Effective Time (the "Tail
Insurance Policy"). Parent shall cause the Surviving Corporation to reimburse
all expenses, including reasonable attorney's fees, incurred by any Person to
enforce the obligations of Parent and Surviving Corporation under this Section
6.9, except with respect to the cost of the Tail Insurance Policy. This Section
6.9 is intended for the benefit of, and to grant third-party rights to, the
persons entitled to indemnification hereunder, and each of such persons shall be
entitled to enforce the covenants contained herein.
6.10 Agreement to Vote. Each of the Selling Stockholders hereby agrees
that, during the term of this Agreement, at any meeting of the shareholders of
the Company, however called, or any adjournment thereof, or by written consent,
such Selling Stockholder shall be present (in person or by proxy) and vote (or
cause to be voted), or execute a written consent in respect of, all of its Owned
Shares (i) in favor of ratification or approval of this Agreement and the Merger
and (ii) against any action or agreement that would prevent or materially delay
the consummation of the Merger or any other transactions contemplated by this
Agreement, or that would be contrary to or inconsistent with, or result in a
breach by the Company of, or frustrate the essential purposes of this Agreement.
6.11 Conduct of the Business of the Company. The Company covenants and
agrees that, during the period beginning on the Agreement Date and ending on the
earlier of the termination of this Agreement or the Effective Time, unless the
Parent shall otherwise agree in writing, the business of the Company shall be
conducted only in, and the Company shall not take any action except in, the
ordinary course of business and in a manner consistent with past practice, as
contemplated herein or as directed by the Parent. Without limiting the
foregoing, during the period beginning on the Agreement Date and ending on the
earlier of the termination of this Agreement or the Effective Time, the Company
shall not, and shall cause its Subsidiaries not to, directly or indirectly do,
or propose to do, any of the following, without the prior written
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consent of the Parent, with it being understood that each of such clauses below
shall constitute an independent obligation of the Company, not qualified by any
other such clause, and shall be deemed to be cumulative:
(a) Dividends; Repurchases; Changes in Capital Stock. Except as
otherwise specifically contemplated in this Agreement, (i) declare or pay any
dividends on, or make any other distributions (whether in cash, stock or
property) in respect of, any of its capital stock, (ii) issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock, or (iii) repurchase or otherwise acquire,
directly or indirectly, any shares of its capital stock;
(b) Issuance of Securities. Issue any additional options to
purchase Company Common Stock, including grants otherwise to be made by reason
of the satisfaction in the future of performance criteria under the Company's
2003 Performance Stock Option Plan and the Company's 1998 Performance Stock
Option Plan;
(c) Compensation. Pay any special bonuses or special remuneration
to any employee or director, or, increase the salaries, bonuses or wage rates of
its employees; or
(d) Severance Arrangements. Adopt or approve any severance, bonus
or benefit acceleration arrangements (whether individually or more broadly) that
could be triggered after the consummation of the Merger.
6.12 Closing Certificates. The Parent shall promptly deliver to the
Stockholder Representative a copy of the Closing Certificates, if any, delivered
to the Parent pursuant to Sections 1.6 and 7.2(k).
6.13 Reasonable Best Efforts.
(a) Upon the terms and subject to the conditions of this
Agreement, each party hereto will use such party's reasonable best 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 this Agreement and applicable laws
to consummate the transactions contemplated by this Agreement as promptly as
practicable.
(b) Parent and the Company shall use their reasonable best efforts
to obtain as soon as practicable the debt financing described on Exhibits C-1
through C-3 hereto (including, without limitation, satisfying all conditions to
the funding of such financing within the reasonable control of the Parent or the
Company) in a manner consistent with the respective terms contained thereon.
6.14 Instrument of Accession. The Company shall use commercially
reasonable efforts to cause each Selling Stockholder that is not an Initial
Selling Stockholder to become a party to this Agreement as a Selling Stockholder
by executing an instrument of accession to this Agreement in the form of Exhibit
D hereto prior to the Closing Date.
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ARTICLE 7
CONDITIONS TO THE MERGER
7.1 Conditions to the Obligations of Each Party. The obligations of the
Company, the Parent and Merger Sub to consummate the Merger are subject to the
satisfaction of each of the following conditions (provided that if the Closing
occurs, each of the following conditions shall be deemed to have been satisfied
or waived by each of the Company, Parent and Merger Sub):
(a) no order, stay, decree, judgment or injunction shall have been
entered, issued or enforced by any court of competent jurisdiction which
prohibits consummation of the Merger, and there shall not be any action taken by
any Governmental Authority, or any statute, rule, regulation or order enacted,
entered, enforced or deemed applicable to the Merger, which makes the
consummation of the Merger illegal; and
(b) all actions by or in respect of or filings with any Governmental
Authority required to permit the consummation of the Merger in accordance with
the terms hereof shall have been obtained (other than those actions or filings
which, if not obtained or made prior to the consummation of the Merger, would
not have a Material Adverse Effect on the Company prior to or after the
Effective Time or a Material Adverse Effect on Parent after the Effective Time
or be reasonably likely to subject the Company, the Parent, Merger Sub, or any
of their respective subsidiaries or any of their respective officers or
directors to substantial penalties or criminal liability).
7.2 Conditions to the Obligations of Parent and Merger Sub. The
obligations of the Parent and Merger Sub to consummate the Merger are subject to
the satisfaction of the following further conditions (any one of which may be
waived in whole or part by the Parent in its sole discretion, and provided that,
if the Closing occurs, each of the following conditions shall be deemed to have
been satisfied or waived by each of the Parent and Merger Sub):
(a) (i) The Company shall have performed in all material respects
all of its material obligations hereunder required to be performed by it at or
prior to the Effective Time; and (ii) Parent shall have received a certificate
dated as of the Closing Date and signed by the Company's President or Chief
Executive Officer, certifying to the foregoing effect;
(b) (i) each of the representations and warranties of the Company
and the Selling Stockholders contained in this Agreement shall be true and
correct in all material respects as of the Effective Time (as qualified, in the
case of the representations and warranties contained in Article 3, by the
Company Disclosure Schedule), except for those representations and warranties
that are expressly limited by their terms to dates or times other than the
Closing Date, which representations and warranties need only be true and correct
in all material respects as of such other date or time; and (ii) the Company
shall deliver to Parent at the Closing a certificate, dated as of the date of
the Closing and signed by the Company's President or Chief Executive Officer,
certifying to that effect (as it relates to the representations and warranties
contained in Article 3);
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(c) holders of no more than 5% of the aggregate outstanding Company
Common Stock as of the Effective Time shall have elected to, or continue to have
contingent rights to, exercise dissenters, appraisal or similar rights under
Delaware Law with respect to such shares;
(d) Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP will have issued a
legal opinion in the form attached hereto as Exhibit B;
(e) the Company shall have delivered a properly executed statement,
dated as of the Closing Date, in a form reasonably acceptable to the Parent
conforming to the requirements of Treasury Regulation Section 1.1445-2(c)(3);
(f) the Company shall have obtained or made the Company Consents and
Notices;
(g) the Selling Stockholders shall have performed in all material
respects all of their material obligations under this Agreement required to be
performed by them at or prior to the Effective Time;
(h) the Principal Subsidiary shall have obtained the senior secured
debt financing described on Exhibit C-1 on the terms described therein
(including, but not limited to, as to composition, pricing and aggregate amount)
and otherwise on terms satisfactory to the Parent, and all conditions precedent
to funding of such senior secured debt (other than the Merger contemplated
hereby) shall have been satisfied or waived;
(i) the Principal Subsidiary shall have obtained the senior
subordinated debt financing described on Exhibit C-2 on the terms described
therein (including, but not limited to, as to composition, pricing and aggregate
amount) and otherwise on terms satisfactory to the Parent, and all conditions
precedent to funding of such senior subordinated debt (other than the Merger
contemplated hereby) shall have been satisfied or waived;
(j) no Material Adverse Effect shall have occurred or been
discovered by Parent since the Agreement Date;
(k) the Company shall have delivered to Parent and Merger Sub the
Closing Certificates;
(l) the Company, or any affiliate or permitted assignee thereof,
shall have purchased all HoldCo Notes validly tendered and not withdrawn
pursuant to the HoldCo Offer that would satisfy the Minimum Tender Condition (as
defined in the HoldCo Offer Materials);
(m) the Principal Subsidiary, or any affiliate or permitted assignee
thereof, shall have purchased all OpCo Notes validly tendered and not withdrawn
pursuant to the OpCo Offer that would satisfy the Minimum Tender Condition (as
defined in the OpCo Offer Materials);
(n) the Company shall have obtained the debt financing described on
Exhibit C-3 on the terms described therein (including, but not limited to, as to
composition, pricing and
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xxxxxxxxx xxxxxx) and otherwise on terms satisfactory to the Parent, and all
conditions precedent to funding of such debt (other than the Merger contemplated
hereby) shall have been satisfied or waived;
(o) each of the Option Plans shall have been terminated;
(p) the Board of Directors of the Company shall have received a
solvency opinion addressed to them with respect to the transactions contemplated
by this Agreement in form and substance reasonably satisfactory to them; and
(q) all of the transactions contemplated by the Stock Purchase
Agreement shall have been consummated (except to the extent such transactions
have not been consummated as a result of a breach of the Stock Purchase
Agreement by one or more of the Buyers thereunder).
7.3 Conditions to the Obligations of the Company and the Selling
Stockholders. The obligations of the Company and each of the Selling
Stockholders to consummate the Merger are subject to the satisfaction of the
following further conditions (any one of which may be waived in whole or part by
the Company or the Stockholder Representative, and provided that, if the Closing
occurs, each of the following conditions shall be deemed to have been satisfied
or waived by each of the Parent and Merger Sub):
(a) the Parent and Merger Sub shall have performed in all material
respects all of their respective material obligations hereunder required to be
performed by them at or prior to the Effective Time;
(b) (i) each of the representations and warranties of the Parent and
Merger Sub contained in this Agreement shall be true and correct in all material
respects as of the Effective Time; and (ii) the Parent shall deliver to the
Company at the Closing a certificate, dated as of the date of the Closing and
signed by the Parent's President or Chief Executive Officer, certifying to that
effect;
(c) subject to the execution by the Stockholder Representative of a
"reliance letter" in customary form, the Selling Stockholders shall have
received a solvency opinion addressed to the Selling Stockholders with respect
to the transactions contemplated by this Agreement in form and substance
reasonably satisfactory to the Selling Stockholders;
(d) the Company shall have obtained the Tail Insurance Policy; and
(e) all of the transactions contemplated by the Stock Purchase
Agreement shall have been consummated (except to the extent such transactions
have not been consummated as a result of a breach of the Stock Purchase
Agreement by one or more of the Sellers thereunder) .
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ARTICLE 8
TERMINATION
8.1 Termination. This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, notwithstanding any requisite
approval and adoption of this Agreement and the transactions contemplated hereby
by the Selling Stockholders:
(a) by mutual written consent duly authorized by the Boards of
Directors of each of the Parent, Merger Sub, the Company and the Stockholder
Representative; or
(b) by the Parent, or by the Company, if the Effective Time shall
not have occurred by April 30, 2004 (the "Termination Date"); provided, however,
that (i) the Termination Date shall be delayed, without further action of the
parties, until the tenth (10th) business day after the date on which any
applicable waiting periods under the HSR Act have expired or been terminated,
and (ii) the right to terminate this Agreement under this Section 8.1(b) shall
not be available to Parent in the event that the failure of the Effective Time
to occur on or before such date arises out of or is related to Parent's failure
to fulfill any obligation under this Agreement and the right to terminate this
Agreement under this Section 8.1(b) shall not be available to the Company in the
event that the failure of the Effective Time to occur on or before such date
arises out of or is related to the failure by the Company to fulfill any
obligation under this Agreement; or
(c) automatically if there shall be any law that makes consummation
of the Merger illegal or otherwise prohibited or if any court of competent
jurisdiction or Governmental Authority shall have issued an order, decree,
ruling or taken any other action restraining, enjoining or otherwise prohibiting
the Merger and such order, decree, ruling or other action shall have become
final and non-appealable.
8.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 8.1, this Agreement shall forthwith become void,
there shall be no liability under this Agreement on the part of the Parent,
Merger Sub, the Company or the Selling Stockholders or any of their respective
officers, directors, or stockholders, and all rights, waivers and obligations of
any party hereto shall cease, except for liabilities arising from a breach of
this Agreement prior to such termination, which shall survive such termination;
provided, that the provisions of this Article 8 and Article 10 shall also
survive the termination of this Agreement for any reason.
ARTICLE 9
INDEMNIFICATION
9.1 Indemnification by Parent. Subject to the limitations set forth in
Section 9.5 hereof, from and after the Effective Time, the Parent and the
Surviving Corporation, jointly and severally, will indemnify, defend, and hold
harmless each of the Selling Stockholders and each of their respective
directors, officers, employees, representatives and Affiliates (other than the
Parent or the Surviving Corporation), from and against any and all Damages
related to or arising out of or in connection with any breach by the Parent or
Merger Sub of any representation, warranty, covenant, agreement, obligation, or
undertaking made by the Parent or Merger Sub in this Agreement (including any
schedule or exhibit hereto), or any other agreement, instrument, certificate, or
other document delivered by or on behalf of the Parent or Merger Sub in
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connection with this Agreement, the Merger, or any of the other transactions
contemplated hereby.
9.2 Indemnification by the Selling Stockholders. Subject to the
limitations set forth in Sections 9.4 and 9.5 hereof, from and after the
Effective Time, each of the Selling Stockholders shall, severally and not
jointly, indemnify, defend and hold harmless the Parent, the Surviving
Corporation, and each of their respective directors, officers, employees,
representatives and Affiliates (including the stockholders of the Parent), from
and against any and all Damages to the extent that the Damages are sustained or
incurred by reason of:
(i) any breach by the Company or the Selling Stockholders of any
representation or warranty made by the Company or the Selling Stockholders in
Article 3 hereof or any of the Closing Certificates;
(ii) any breach by such Selling Stockholder of any representation or
warranty made by such Selling Stockholder in Article 5 hereof;
(iii) any breach by such Selling Stockholder of any covenant or
agreement made by such Selling Stockholder herein to be performed by such
Selling Stockholder after the Effective Time; and
(iv) any amounts by which the outstanding Indebtedness of the
Company at the Closing differs from the amount thereof specified on the
Indebtedness Certificate or by which the actual amount of any of the other
elements included in the calculation of the Aggregate Merger Consideration
differs from the amount thereof specified on the Closing Certificates to the
extent that the aggregate of such differences would have the result of
increasing the Aggregate Merger Consideration or the Per Share Merger
Consideration if such actual amounts were used to calculate the Aggregate Merger
Consideration or Per Share Merger Consideration.
9.3 Third-Party Claims.
(a) In the event that any Indemnified Party desires to make a
claim against an Indemnifying Party (which term shall be deemed to include all
Indemnifying Parties if more than one) in connection with any third-party
litigation, arbitration, action, suit, proceeding, claim or demand at any time
instituted against or made upon it for which it is or could be entitled to
indemnification hereunder (a "Third-Party Claim"), the Indemnified Party will
promptly, after receiving notice of such Third Party Claim, notify the
Indemnifying Party (or, if the Indemnifying Party is the Selling Stockholders,
the Stockholder Representative), of such Third-Party Claim and of its claims of
indemnification with respect thereto; provided, that failure to promptly give
such notice will not relieve the Indemnifying Party of its indemnification
obligations under this Section 9.3, except to the extent, if any, that the
Indemnifying Party has actually been prejudiced thereby.
(b) The Indemnifying Party will have the right to assume and
control the defense of the Third-Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party by written notice to the
Indemnified Party within thirty (30) calendar days after the Indemnifying Party
has received notice of the Third-Party Claim; provided, however,
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that the Indemnifying Party must conduct the defense of the Third-Party Claim
actively and diligently thereafter in order to preserve its rights in this
regard; and provided, further, that the Indemnified Party may retain separate
co-counsel at its sole cost and expense and participate at its sole cost and
expense in the defense of the Third-Party Claim.
(c) The Indemnifying Party will not consent to the entry of
any judgment or enter into any settlement with respect to the Third-Party Claim
without the prior written consent of the Indemnified Party (which consent will
not be unreasonably conditioned, withheld or delayed by the Indemnified Party)
unless the judgment or proposed settlement (i) includes an unconditional release
of all liability of each Indemnified Party with respect to such Third-Party
Claim, and (ii) involves only the payment of money damages that are fully
covered by the Indemnifying Party and does not impose an injunction or other
equitable relief upon the Indemnified Party. So long as the Indemnifying Party
has assumed and is conducting the defense of the Third-Party Claim in accordance
with Section 9.3(b) above, the Indemnified Party will not consent to the entry
of any judgment or enter into any settlement with respect to the Third-Party
Claim without the prior written consent of the Indemnifying Party (which consent
will not be unreasonably conditioned, withheld or delayed by the Indemnifying
Party).
(d) In the event the Indemnifying Party fails to assume the
defense of the Third-Party Claim in accordance with Section 9.3(b) above, the
Indemnified Party may defend against any such claim or litigation in such manner
as it may reasonably deem appropriate; provided that (i) the Indemnified Party
shall not settle any such claim or litigation without the prior written consent
of the Indemnifying Party (which consent shall not be unreasonably conditioned,
withheld or delayed by the Indemnifying Party); and (ii) the Indemnifying Party
shall have the right to participate in such defense (including with counsel of
its choice at its sole expense) and the Indemnified Party shall cooperate with
the Indemnifying Party in connection with such participation and in all cases
shall keep the Indemnifying Party informed of as to all matters concerning such
claim and shall promptly notify the Indemnifying Party in writing of all
significant developments relating thereto.
9.4 Payment of Claims. In the event of any bona fide claim for
indemnification hereunder not involving a Third Party Claim, the Indemnified
Party will advise the Indemnifying Party that is required to provide
indemnification therefor in writing. With respect to liquidated claims for
Damages specified in writing in reasonable detail, if within thirty (30)
calendar days after the Indemnifying Party has received such written claim it
has not contested such claim in writing, the Indemnifying Party will pay the
full amount thereof in cash, subject to the limitations set forth in Section 9.5
and except as set forth in the following sentence of this Section 9.4, within
ten (10) calendar days after the expiration of such period. All such
indemnification payments required to be made by the Selling Stockholders
hereunder shall be made on a pro rata basis from all Selling Stockholders based
on each Selling Stockholder's Indemnity Percentage (except with respect to any
breach of Article 5 which shall be made entirely by the applicable breaching
Selling Stockholder, subject to the limitations in Section 9.5). Any
indemnification obligations shall be paid in cash. The parties agree that to the
greatest extent possible the payment of any indemnity hereunder shall be treated
as an adjustment to the Aggregate Merger Consideration paid by Parent hereunder
for Tax purposes.
-24-
9.5 Limitations of Liability.
(a) Time Limit. The representations and warranties of the Company
and the Selling Stockholders contained in Sections 3.1 through 3.4, 3.6, 3.7 and
3.9 shall expire on the third anniversary of the Closing Date and the Selling
Stockholders will not be liable for any Damages hereunder with respect to a
breach of such representations and warranties unless a written claim for
indemnification is given by the Parent or the Surviving Corporation to the
Stockholder Representative with respect thereto prior to the third anniversary
of the Closing Date.
(b) Maximum Liability. The parties specifically agree that,
notwithstanding any provision of this Agreement to the contrary, the maximum
aggregate liability of all of the Selling Stockholders for indemnification under
this Article 9 will not exceed the amount of the Aggregate Merger Consideration
received by all Selling Stockholders hereunder. Notwithstanding anything to the
contrary in this Agreement, the maximum aggregate liability of each Selling
Stockholder under this Article 9 for indemnification shall be an amount equal to
such Selling Stockholder's Indemnity Percentage multiplied by the Aggregate
Merger Consideration received by all Selling Stockholders hereunder. No
individual Selling Stockholder will be liable pursuant to this Article 9 for any
Damages in excess of the amount of the Aggregate Merger Consideration received
by such Selling Stockholder in the Merger. Without otherwise limiting the
indemnification obligations of the Selling Stockholders hereunder or of the
Sellers (as named therein) under the Stock Purchase Agreement, in no event shall
the Parent or the Surviving Corporation be entitled to recover any Damages under
this Article 9 to the extent it has previously recovered such Damages under
Article 8 of the Stock Purchase Agreement.
(c) Recovery for Breach of Sections 3.6, 3.7 or 3.8. Notwithstanding
any provision of this Agreement to the contrary, the liability of the Selling
Stockholders with respect to a breach of the representations and warranties
contained in Sections 3.6, 3.7 and 3.8 shall be limited to the pro forma impact
of such breach on the calculation of the Equity Value Per Share or Per Share
Merger Consideration, which shall be computed by reducing the Base Equity Value
by the amount equal to (A) 9 multiplied by (B) the excess, if any, of
$58,000,000 over the actual LTM EBITDA.
(d) Sole and Exclusive Remedy. Without limiting the rights and
obligations of the parties under the Stock Purchase Agreement, each party hereto
acknowledges and agrees that from and after the Closing Date, except with
respect to actual fraud by any party, such party's (and all Indemnified
Parties') sole and exclusive remedy with respect to Damages and any and all
other claims relating to, arising out of or in connection with breaches of the
subject matter of this Agreement or any other agreement, instrument, certificate
or other document delivered in connection with this Agreement and the
transactions contemplated hereby shall be in accordance with, and limited by,
the indemnification provisions set forth in this Article 9.
ARTICLE 10
GENERAL PROVISIONS
10.1 Notices. All notices, claims and demands hereunder, and all other
communications which are required to be given in writing pursuant to this
Agreement, shall be in
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writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person or facsimile (received at the facsimile machine
to which it is transmitted prior to 5 p.m., local time, on a business day for
the party to which it is sent, or if received after 5 p.m., local time, as of
the next business day) or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following addresses
(or at such other address for a party as shall be specified in a notice given in
accordance with this Section 10.1):
if to the Parent or Merger Sub:
x/x Xxxxxx Xxxxxxxx Xxxxxxx
Xxxx Xxxxxxx Xxxxx
00xx Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx XxXxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Facsimile: 000-000-0000
if to the Company:
0000 Xxxxx 00xx Xx.
Xxxxxxx, XX 00000
Attention: President
Facsimile: (000) 000-0000
With a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
if to the Stockholder Representative:
HWH Capital Partners, L.P.
c/o Haas Wheat & Partners, L.P.
000 Xxxxxxxx Xxxxx - Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx,
Xxxxxxx X. Xxxxx, and Xxxx X. Xxxxxxxxx
Facsimile Nos.: (000) 000-0000, and
(000) 000-0000
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10.2 Certain Definitions. For purposes of this Agreement, the term:
"Adjusted Fully-Diluted Common Stock Number" means an amount equal to the
Fully-Diluted Common Stock Number minus (i) all shares of Company Common Stock
then held by the Parent and (ii) the maximum number of shares of Company Common
Stock then issuable upon exercise of all Roll-Over Options, in each case as of
immediately prior to the Effective Time and without giving effect to the
transactions contemplated by the Stock Purchase Agreement but with giving effect
to the transactions contemplated by the Contribution Agreement.
"Affiliate" means, with respect to any person, any person that, directly
or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, such person. Until the consummation of the
Merger, the Company shall not be deemed for any purposes of this Agreement to be
an Affiliate of the Parent.
"Aggregate Equity Value" means the amount equal to (i) the Base Equity
Value, less (ii) Indebtedness as of the Closing Date, plus (iii) the aggregate
exercise price of all Roll-Over Options and Company Options outstanding
immediately prior to Closing under the Option Plans.
"Aggregate Merger Consideration" means the amount equal to (a) (i) the
Equity Value Per Share multiplied by (ii) the Adjusted Fully-Diluted Common
Stock Number, minus (b) fifty percent (50%) of the costs associated with the
Company's purchase and maintenance of the Tail Insurance Policy, minus (c)
$62,500, representing fifty percent (50%) of the filing fees associated with the
filings under the HSR Act related to the transactions contemplated by this
Agreement, minus (d) fifty percent (50%) of any pre-payment premiums, penalties
or similar amounts incurred by the Company and the Principal Subsidiary in
connection with the prepayment of the Public/Bank Debt in connection with the
Closing, minus (e) fifty percent (50%) of all fees and expenses for any solvency
opinion addressed to the Company which is obtained with respect to the
transactions contemplated hereby, minus (f) all additional fees and expenses for
any solvency opinion addressed to the Selling Stockholders which is obtained
with respect to the transactions contemplated hereby (or, if only one solvency
opinion is obtained which is addressed to both the Company and the Selling
Stockholders, one hundred percent (100%) of any amounts incurred by the Company
to cause such opinion to be addressed to the Selling Stockholders to the extent
such amounts would not otherwise have been incurred), minus (g) the amount of
all fees, costs and expenses of legal counsel, financial advisors and other
consultants engaged by or at the direction of the Selling Stockholders related
to the transactions contemplated hereby (including any fees and expenses of
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP and JPMorgan, other than those fees
and expenses of JPMorgan related to the Parent's new financing).
"Average Net Revolver Balance" means the amount of (i) the average
outstanding revolver balance under the Credit Agreement as of the last day of
each of the immediately preceding 52 weeks, minus (ii) the average outstanding
Cash balance as of the last day of each of
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the immediately preceding 52 weeks, and plus (iii) $1,500,000. For the purposes
of this definition, items (i) and (ii) shall be adjusted for the impact of any
acquisitions, divestitures and voluntary prepayments of Indebtedness occurring
during the 52-week period immediately preceding the Closing Date (excluding any
prepayments made in connection with the Merger) to give pro forma effect as if
such transaction occurred on the first day of such period. In addition, for
purposes of calculating Average Net Revolver Balance for any period which
includes any week during the 52-week period that precedes December 10, 2003,
item (ii) shall be adjusted to increase the Cash balance by $24,500,000 for each
week of the 52-week period that precedes December 10, 2003. In addition, for
purposes of calculating Average Net Revolver Balance, item (ii) shall be
adjusted to (x) increase the Cash balance by $125,000 (the amount of the fee
paid by the Company with respect to the filings made under the HSR Act related
to the transactions contemplated by this Agreement) for each week of the 52-week
period that follows February 6, 2004, and (y) to increase the Cash balance by
the amount of any additional cash payments made by the Company after the
Agreement Date in respect of fees and expenses incurred in furtherance of the
Merger (to the extent such fees and expenses would not have been incurred but
for the consummation of the Merger), including, but not limited to, the cost of
obtaining the Tail Insurance Policy, for each week of the 52-week period that
follows the date of such payment. The Average Net Revolver Balance may be either
a positive or negative number.
"Base Equity Value" means $531,000,000.
"business day" (whether such term is capitalized or not) means any day
other than Saturday, Sunday or a legal holiday that banks located in Boston,
Massachusetts are open for business.
"Cash" means the aggregate amount of the Company's and the Subsidiaries'
cash, cash equivalents and short-term investments as of the time of
determination determined on a consolidated basis in accordance with GAAP.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company Common Stock" means the Company's Class A Common Stock, par value
$.01 per share.
"Contribution Agreement" means the Contribution and Exchange Agreement,
dated as of the Agreement Date, among the Parent and the stockholders named
therein.
"Credit Agreement" means the Amended and Restated Credit Agreement, dated
as of February 13, 1998, as amended and restated as of December 10, 2003, among
the Company, the Principal Subsidiary, the several lenders from time to time
party thereto, XX Xxxxxx Chase Bank, as administrative agent, documentation
agent and collateral agent and Citibank Global Markets Inc., as syndication
agent.
"Damages" means all damages, losses, costs, and expenses incurred or
suffered, or that are reasonably likely to be incurred or suffered, by a party
with respect to or relating to an event, circumstance or state of facts. Damages
shall specifically include court costs and the reasonable fees and expenses of
legal counsel arising out of or relating to any direct or third-party claims,
-28-
demands, actions, causes of action, suits, litigations, arbitrations or
liabilities, or incurred to enforce a party's right to indemnification
hereunder.
"Equity Value Per Share" means the amount equal to (i) the Aggregate
Equity Value divided by (ii) the Fully-Diluted Common Stock Number.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"fully-diluted basis" means, with respect to the number of shares of
Company Common Stock outstanding as of a particular time, the sum of (a) the
aggregate number of shares of Company Common Stock issued and outstanding at
such time and (b) the maximum number of shares of Company Common Stock issuable
at such time upon the exercise for cash of unexercised Company Options,
Roll-Over Options and other options, warrants or rights to acquire shares of
Company Common Stock issued and outstanding at such time (whether or not fully
vested), and upon the conversion of all convertible notes or other convertible
securities outstanding at such time.
"Fully-Diluted Common Stock Number" means all of the issued and
outstanding shares of Company Common Stock, calculated on a fully-diluted basis
immediately prior to the Effective Time, including, without limitation, all
shares of Company Common Stock held by the Parent or the Parent Affiliates.
"GAAP" means United States generally accepted accounting principles
consistently applied.
"Governmental Authority" (whether such term is capitalized or not) means
any United States (federal, state or local) or foreign government, or
governmental, regulatory or administrative authority, agency or commission.
"HoldCo Notes" means those certain 10 -3/4% Senior Discount Debentures due
2009 issued by the Company pursuant to the terms of the Indenture, dated as of
February 13, 1998, between the Company and The Bank of New York, as successor.
"HoldCo Offer" means the Company's offer to purchase any and all
outstanding HoldCo Notes from the holders thereof pursuant to the HoldCo Offer
Materials.
"HoldCo Offer Materials" means that Offer to Purchase and Consent
Solicitation mailed on our about February 4, 2004, to holders of the HoldCo
Notes.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended.
"Indebtedness" means, without duplication:
-29-
(i) all indebtedness of or any obligation of the Company and its
Subsidiaries for borrowed money, whether current, short-term, or
long-term, secured or unsecured, including all accrued and unpaid interest
thereon;
(ii) all indebtedness of the Company and its Subsidiaries for the
deferred purchase price for purchases of property which is not evidenced
by trade payables;
(iii) all lease obligations of the Company and its Subsidiaries
under leases which are capital leases in accordance with GAAP;
(iv) all off-balance sheet financings of the Company and its
Subsidiaries, including synthetic leases and project financing;
(v) any payment obligations of the Company or its Subsidiaries in
respect of banker's acceptances or letters of credit (other than letters
of credit in support of ordinary course trade payables);
(vi) any present, future or contingent obligations of the Company or
its Subsidiaries under (A) any phantom stock or equity appreciation
rights, plan or agreement (but expressly excluding any stock options) or
(B) any consulting, deferred pay-out or earn-out arrangements or any
non-competition agreements, in each case, in connection with the purchase
of any Person; and
(vii) PLUS or MINUS, as the case may be, the Average Net Revolver
Balance.
"Indemnified Party" means any person entitled to seek indemnification
pursuant to the provisions of Article 9.
"Indemnifying Party" means any person against whom indemnification may be
sought pursuant to the provisions of Article 9.
"Indemnity Percentage" means, with respect to each Selling Stockholder,
the percentage that portion of the Aggregate Merger Consideration received by
such Selling Stockholder under this Agreement represents of the sum of the
Aggregate Merger Consideration received by all Selling Stockholders under this
Agreement and the aggregate consideration received by all Sellers (as defined
therein) under the Stock Purchase Agreement at the Closing and the closing of
the transactions contemplated by the Stock Purchase Agreement.
"Law" means any United States or foreign judgment, decree, order, law,
license, statute, ordinance, rule or regulation.
"LTM EBITDA" means, for the Company and its Subsidiaries on a consolidated
basis, income from operations for the twelve (12) months ended January 31, 2004,
plus the sum of, to the extent included in determining income from operations
for such period, without duplication:
(i) depreciation expense;
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(ii) amortization expense; and
(iii) other non-cash charges reducing income from operations for such
period (excluding any such non-cash charge to the extent it represents an
accrual of, or reserve for, cash charges in any future period) and non-cash
income increasing income from operations for such period (excluding any such
non-cash income to the extent it arises from cash previously received or cash to
be received in any future period).
For purposes of the foregoing definition, all financial terms and items of
income or expense shall be treated, interpreted and applied in a manner
consistent with their meaning and application in the financial statements of the
Company presented in the Company's Annual Report on Form 10-K for the period
ended March 31, 2003.
"Material Adverse Effect" means (x) with respect to the Company, a
material adverse effect on the assets, properties, businesses, results of
operations or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole (other than with respect to any adverse effects
which, directly or indirectly, relate to or result from (i) the loss of
employees or customers as a result of the public announcement of the
transactions contemplated hereby or (ii) general economic conditions generally
affecting the industry in which the Company and its Subsidiaries compete (other
than conditions affecting the Company and its Subsidiaries in a manner
materially and adversely different from their competitors in general)), and (y)
with respect to the Parent any change or effect that, when taken individually or
together with all other adverse changes or effects, is or is reasonably likely
to be materially adverse to the business, results of operations and financial
condition of the Parent and its respective Subsidiaries, taken as a whole.
"OpCo Notes" means those certain 8 -3/4% Senior Subordinated Notes due
2008 issued by the Principal Subsidiary pursuant to the terms of the Indenture,
dated as of February 13, 1998, between the Principal Subsidiary and The Bank of
New York, as successor.
"OpCo Offer" means the Principal Subsidiary's offer to purchase any and
all outstanding OpCo Notes from the holders thereof pursuant to the OpCo Offer
Materials.
"OpCo Offer Materials" means that Offer to Purchase and Consent
Solicitation mailed on or about February 4, 2004, to holders of the OpCo Notes.
"Parent Affiliates" means Weston Presidio Capital III, L.P., Weston
Presidio Capital IV, L.P., WPC Entrepreneur Fund, L.P. and WPC Entrepreneur Fund
II, L.P., and any affiliates of any of the foregoing.
"Per Share Merger Consideration" means the amount equal to (i) the
Aggregate Merger Consideration divided by (ii) the Adjusted Fully-Diluted Common
Stock Number.
"Person" means an individual, corporation, partnership, limited
partnership, limited liability company, syndicate, person (including a "person"
as defined in Section 13(d)(3) of the Exchange Act), trust, association or
entity or government, political subdivision, agency or instrumentality of a
government.
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"Principal Subsidiary" means Nebraska Book Company, Inc., a Kansas
corporation.
"Public/Bank Debt" means (i) the indebtedness for borrowed money incurred
under the Credit Agreement (ii) the OpCo Notes, and (iii) the HoldCo Notes.
"Securities" means all shares of Company Common Stock, all outstanding
options, warrants, convertible notes, rights of conversion and other rights to
acquire capital stock of the Company, and all shares issuable upon exercise or
conversion of options, warrants, convertible notes, rights of conversion and
other rights to acquire stock of the Company, outstanding from time to time,
whether or not then currently vested, exercisable or convertible.
"Securityholder" means any holder of Securities.
"Stock Purchase Agreement" means the Stock Purchase Agreement dated as of
the date hereof, among the Parent Affiliates named therein, MSD Ventures, L.P.
and HWH Capital Partners, L.P.
"Subsidiary" or "Subsidiaries" (whether or not capitalized) of any person
means any corporation, partnership, limited liability company, association,
trust, joint venture or other legal entity of which such person (either above or
through or together with any other subsidiary), owns, directly or indirectly,
more than 50% of the stock or other equity interests the holders of which are
generally entitled to vote for the election of the board of directors or other
governing body of such corporation or other legal entity.
"Tax" or "Taxes" (and with correlative meaning, "Taxable") means any
federal, state, local, or foreign income, gross receipts, franchise, estimated,
alternative minimum, add-on minimum, sales, use, transfer, registration, value
added, excise, natural resources, severance, stamp, withholding, occupation,
premium, windfall profit, environmental, customs, duties, real property,
personal property, capital stock, net worth, intangibles, social security,
unemployment, disability, payroll, license, employee, or other tax or similar
levy, of any kind whatsoever, including any interest, penalties, or additions to
tax in respect of the foregoing.
The following table sets forth certain other defined terms and the Section
of the Agreement in which the meaning of each such term appears:
Section(s)
----------
"Agreement"................................................. Preamble
"Agreement Date"............................................ Preamble
"Buy-Sell Agreement"........................................ 6.7
"Capitalization Certificate"................................ 1.6
"Closing"................................................... 1.2
"Closing Certificates"...................................... 1.6
"Closing Date".............................................. 1.2
"Company"................................................... Preamble
"Company Consents and Notices".............................. 3.4
"Company Disclosure Schedule"............................... Article 3
"Company Option"............................................ 1.7(c)
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Section(s)
----------
"Delaware Law".............................................. 1.2
"Dissenting Shares"......................................... 2.3(a)
"EBITDA Certificate"........................................ 1.6
"Effective Time"............................................ 1.2
"Financial Statements"...................................... 3.6(b)
"Indebtedness Certificate".................................. 1.6
"Merger".................................................... 1.1
"Merger Certificate"........................................ 1.2
"Merger Instruments"........................................ 2.1(a)(i)
"Merger Sub"................................................ Preamble
"Option Plans".............................................. 3.5(b)
"Option Shares"............................................. 1.7(c)
"Owned Shares".............................................. 5.3
"Parent".................................................... Preamble
"Parent Incentive Plan"..................................... 1.7(b)
"Registration Rights Agreement"............................. 6.7
"Replacement Option"........................................ 1.7(b)
"Roll-Over Option".......................................... 1.7(b)
"Selling Stockholders"...................................... Preamble
"Stockholder Approval"...................................... 6.5
"Stockholder Representative"................................ Preamble
"Stockholders Agreement".................................... 6.7
"Surviving Corporation"..................................... 1.1
"Surviving Corporation Charter"............................. 1.4(a)
"Tail Insurance Policy"..................................... 6.9
"Termination Date".......................................... 8.1(b)
"Third-Party Claim"......................................... 9.3(a)
"Voting Securities"......................................... 5.3
10.3. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of applicable Law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in a mutually acceptable
manner in order that the Merger be consummated as originally contemplated to the
fullest extent possible.
10.4 Entire Agreement; Assignment. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
thereof and supersedes all prior agreements and undertakings, both written and
oral, among the parties, or any of them, with respect to the subject matter
hereof and thereof. This Agreement shall not be assigned by operation of law or
otherwise, except that the Parent may assign all or any of their rights and
obligations hereunder to (i) any Affiliate of Parent; provided, that no such
assignment to an
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Affiliate shall relieve the assigning party of its obligations hereunder, and
(ii) after the Effective Time, the Parent may assign all of its rights and
obligations hereunder to a person that acquires all of the capital stock, or
substantially all of the assets, of the division or business unit of the Parent
responsible for the business of the Company; provided, that such person assumes
this Agreement, in writing, and agrees to be bound by and to comply with all of
the terms and conditions hereof.
10.5 Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, their successors and permitted
assigns and nothing in this Agreement, express or implied is intended to or
shall confer upon any other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
10.6 Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
10.7 Governing Law. This Agreement shall be governed by, and construed in
accordance with the laws of the State of New York applicable to contracts
executed in and to be performed in that state, without regard to the conflict of
laws rules of such state.
10.8 Consent to Jurisdiction.
(a) EACH OF THE PARENT, THE COMPANY AND MERGER SUB HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL
COURTS LOCATED IN THE CITY OF NEW YORK, NEW YORK FOR THE PURPOSE OF ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND EACH OF THE
PARENT, THE COMPANY AND MERGER SUB HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT TO SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED EXCLUSIVELY IN
ANY STATE OR FEDERAL COURT SITTING IN THE CITY OF NEW YORK, NEW YORK. EACH OF
THE PARENT, THE COMPANY AND MERGER SUB AGREES THAT A FINAL JUDGMENT IN ANY
ACTION OR, PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
(b) EACH OF THE PARENT, THE COMPANY AND MERGER SUB IRREVOCABLY
CONSENTS TO THE SERVICE OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS IN
ANY OTHER ACTION OR PROCEEDING RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT, ON BEHALF OF ITSELF OR ITS PROPERTY, BY THE PERSONAL DELIVERY OF
COPIES OF SUCH PROCESS TO SUCH PARTY. NOTHING IN THIS SECTION 10.8 SHALL AFFECT
THE RIGHT OF ANY PARTY TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW.
10.9 Counterparts. This Agreement may be executed and delivered (including
by facsimile transmission) in one or more counterparts, and by the different
parties hereto in
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separate counterparts, each of which when executed and delivered shall be deemed
to be an original but all of which taken together shall constitute one and the
same agreement.
10.10 Fees and Expenses. Subject to certain expenses of the Selling
Stockholders being included in the calculation of "Aggregate Merger
Consideration," all costs and expenses incurred in connection with this
Agreement and the Merger by the Company, the Selling Stockholders, the Parent or
Merger Sub shall be paid by the Company. Notwithstanding anything in this
Agreement to the contrary, none of such costs and expenses shall be deemed
Indebtedness or shall otherwise reduce the Equity Value Per Share. In addition,
in the event that the Merger is not consummated for any reason, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby (including, without limitation, the financings described in
Sections 7.2(h), (i) and (n), the offers to purchase described in Sections
7.2(l) and (m) and the transactions contemplated by the Stock Purchase
Agreement) by the Company, the Selling Stockholders, the Parent or Merger Sub
shall be paid by the Company.
10.11 Amendment. This Agreement may not be amended except by an instrument
in writing, duly authorized by the appropriate boards of directors, signed by
the Parent or its designee, the Merger Sub and the Company and by the
Stockholder Representative.
10.12 Waiver. At any time prior to the Effective Time, the Parent, the
Stockholders Representative and the Company may agree in writing to (a) extend
the time for the performance of any obligation or other act of the other
(including, in the case of the Parent, the Merger Sub) party hereto, (b) waive
any inaccuracy in the representations and warranties of the other contained
herein or in any document delivered pursuant hereto, and (c) waive compliance by
the other, as the case may be, with any agreement or condition contained herein.
Any such extension or waiver shall be valid if set forth in an instrument in
writing signed by the party or parties to be bound thereby.
10.13 Interpretation. When a reference is made in this Agreement to an
Article, Section, Schedule or Exhibit, such reference will be to an Article or
Section of, or a Schedule or Exhibit to, this Agreement unless otherwise
indicated. All Schedules and Exhibits to this Agreement are integral parts of
this Agreement. The table of contents and headings contained in this Agreement
are for reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they will be deemed to be followed by
the words "without limitation". The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement will refer to this Agreement
as a whole and not to any particular provision of this Agreement. The symbol "$"
when used in this Agreement means United States dollars. All terms defined in
this Agreement will have the defined meanings when used in any certificate or
other document made or delivered pursuant hereto unless otherwise defined
therein. The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such term.
10.14 No Conflict of Interest. Each of the parties to this Agreement
hereby agrees that Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP may serve as
counsel to the Company, any Selling Stockholder and any of their respective
Affiliates (other than the Parent) and Xxxxxxx XxXxxxxxx LLP may serve as
counsel to the Parent, the Merger Sub and any of their Affiliates
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(other than the Company and any of the Selling Stockholders) in connection with
the negotiation, preparation, execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, and that Xxxx, Weiss,
Rifkind, Xxxxxxx & Xxxxxxxx LLP (or any successor) may serve as counsel to any
of the Selling Stockholders and any of their Affiliates (other than the Parent
or the Surviving Corporation) or any director, officer, employee or Affiliate of
any one or more of them (other than the Parent or Surviving Corporation) and
Xxxxxxx XxXxxxxxx LLP (or any successor) may serve as counsel to the Parent and
the Surviving Corporation and any of their Affiliates (other than the Selling
Stockholders) or any director, officer, employee or Affiliate of any one or more
of them (other than the Selling Stockholders), in any case, in connection with
any litigation, claim or obligation arising out of or relating to this Agreement
or the transactions contemplated by this Agreement, and each of the parties
hereto hereby consents thereto and waives any conflict of interest arising
therefrom. This Agreement shall not limit, impair or modify any existing
agreement, arrangement or understanding relating to the representation by or of
any of the parties hereto or any beneficial owner of any such party.
10.15 No Third-Party Beneficiaries. Subject to Sections 6.9 and 10.4 and,
except for the provisions of Article 9 relating to persons expressly entitled to
indemnification thereunder, this Agreement shall be binding upon and inure to
the sole benefit of the parties hereto and their permitted assigns and nothing
herein, express or implied, is intended to or shall confer upon any other person
(including any employees of the Company or its Subsidiaries or their
beneficiaries) any legal or equitable right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
[The remainder of the page is intentionally left blank.]
IN WITNESS WHEREOF, the Parent, Merger Sub, the Company, the Selling
Stockholders and the Stockholder Representative have duly executed this
Agreement and Plan of Merger as an instrument under seal as of the date first
above written.
NBC HOLDINGS CORP.
By:
-------------------------------------------
Name: Xxxx X. Xxxx
Title: President
NEW NBC ACQUISITION CORP.
By:
-------------------------------------------
Name: Xxxx X. Xxxx
Title: President
NBC ACQUISITION CORP.
By:
-------------------------------------------
Name:
Title:
STOCKHOLDER REPRESENTATIVE:
HWH CAPITAL PARTNERS, L.P.
By: HWH, L.P., its general partner
By: HWH Incorporated, its general partner
By:
-------------------------------------------
Name:
Title:
SELLING STOCKHOLDERS:
HWH CAPITAL PARTNERS, L.P.
By: HWH, L.P., its general partner
By: HWH Incorporated, its general partner
By:
-------------------------------------------
Name:
Title:
HWH CORNHUSKER PARTNERS, L.P.
By: HWH Cornhusker, L.P., its general partner
By: HWH Cornhusker Incorporated,
its general partner
By:
-------------------------------------------
Name:
Title:
-------------------------------------------
Xxxx X. Xxxxxxxx
-------------------------------------------
Xxxxx X. Major
-------------------------------------------
Xxxx X. Xxxxxx
LIST OF SCHEDULES AND EXHIBITS
SCHEDULES:
Company Disclosure Schedule
Schedule 1: Selling Stockholders
Schedule 1.7(b): Roll-Over Options
EXHIBITS:
Exhibit A: Form of Merger Certificate
Exhibit B: Form of Company Counsel Legal Opinion
Exhibit C-1: Senior Secured Financing Term Sheet
Exhibit C-2: Senior Subordinated Financing Term Sheet
Exhibit C-3: Parent Financing Term Sheet
Exhibit D Instrument of Accession
SCHEDULE 1
INITIAL SELLING STOCKHOLDERS
SELLING STOCKHOLDER
HWH Capital Partners, L.P.
HWH Cornhusker Partners, L.P.
Xxxx X. Xxxxxxxx
Xxxxx X. Major
Xxxx X. Xxxxxx
SCHEDULE 1.7(B)
ROLL-OVER OPTIONS/REPLACEMENT OPTIONS
The following is a summary of the significant terms of the Replacement Options
that will be issued pursuant to Section 1.7(b).
Issuer: NBC Holdings Corp.
Exercise Price: Same exercise price per share as the Roll-Over Option being
replaced.
Number of Shares: Same number of shares (of NBC Holdings Corp.) as the Roll-Over
Option.
Vesting: Replacement Options will be fully-vested upon issuance.
Expiration: Outside termination date is ten years from the date of
issuance of the Replacement Option (i.e., tenth anniversary of
the Effective Time). Upon termination of an employee,
Replacement Options will remain exercisable by such employee
for the duration of their stated term; provided that, in the
event such employee takes work with a competitor, then the
option will expire if unexercised prior to the later of (i) 90
days from termination, or (ii) the date on which the employee
starts employment with a competitor. Upon a change-of-control
of NBC Holdings, Replacement Options will expire if they are
not exercised within a 30-day notice period prior to closing;
provided that they could be exercised on a "net" basis in
connection with such change-in-control.
Option Agreement: Substantially the same terms as the agreement governing the
Roll-Over Option being replaced, as modified to reflect the
provisions summarized on this Schedule 1.7(b).
LIST OF ROLL-OVER OPTIONS
OPTIONHOLDER NUMBER OF ROLL-OVER OPTIONS
------------ ---------------------------
XXXX XXXXXXXX 10,825
XXXXX XXXXX 3,400
XXXXXX XXXX 2,650
XXXXXXX XXXXXXXX 2,800
XXXXXXX XXXXX 1,500
XXXXX MAJOR 9,330
XXXX XXXXXX 7,478
XXXXXX XXXX 3,800
XXXXXXX XXXXX 4,661
XXXXX XXXXXX 300
XXX XXXXX 640
XXXXX XXXXXXXX 200
XXXXX XXXXXX 800
XXXXXX XXXXX 30
XXXXXXX XXXXX 100
XXXXXX XXXXX, XX. 400
XXXXX XXXX 30
XXXX XXXXXXXXXX 100
XXXXXX XXXXXXX 10
XXXX XXXXXXX 225
XXXXX XXXXXXX 64
XXXXX XXXXXX 100
OPTIONHOLDER NUMBER OF ROLL-OVER OPTIONS
------------ ---------------------------
XXXXXXX XXXXX 100
XXXXXX XXXXXXXXX 100
XXXXXX XXXXXX 10
XXXXXXX XXXXXXXX 125
TOTAL 49,778
