AGREEMENT AND PLAN OF MERGER OF CROWN MEDIA HOLDINGS, INC. AND HALLMARK ENTERTAINMENT HOLDINGS, INC.
Exhibit
2.2
OF
CROWN
MEDIA HOLDINGS, INC.
AND
HALLMARK
ENTERTAINMENT HOLDINGS, INC.
AGREEMENT
AND PLAN OF MERGER (this "Merger Agreement"), dated as
of February 26, 2010, between Crown Media Holdings, Inc., a Delaware corporation
("Crown"), and Hallmark
Entertainment Holdings, Inc., a Delaware corporation ("HEH"), pursuant to Section
251 of the Delaware General Corporation Law (the "DGCL").
W I T N E
S S E T H:
WHEREAS,
Crown proposes to enter into the Master Recapitalization Agreement, by and among
Hallmark Cards, Incorporated, H C Crown Corp., HEH, Crown, Crown Media United
States, LLC and subsidiaries of Crown (the “Master Recapitalization
Agreement”) in order to restructure certain of its
obligations;
WHEREAS,
consummation of the transactions contemplated by this Merger Agreement is a
condition subsequent to the consummation of certain other transactions
contemplated by the Master Recapitalization Agreement;
WHEREAS,
the Board of Directors of Crown and the Board of Directors of HEH have each
determined that it is advisable and in the best interests of each of them that
HEH merge with and into Crown upon the terms and subject to the conditions
herein provided;
NOW,
THEREFORE, in consideration of the premises, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:
Section
1. Merger. Upon the
filing of a Certificate of Merger with the Secretary of State of the State of
Delaware or at such later time as set forth therein and as agreed by the parties
(the "Effective Time"),
HEH shall be merged with and into Crown (the "Merger"), and Crown shall be
the corporation surviving the Merger (hereinafter referred to as the "Surviving
Corporation").
Section
2. Directors, Officers and Governing
Documents. The directors of the Surviving Corporation
immediately after the Effective Time shall be the directors of Crown immediately
prior to the Effective Time. The officers of the Surviving
Corporation immediately after the Effective Time shall be the officers of Crown
immediately prior to the Effective Time. These officers and directors
shall hold office in accordance with the Certificate of Incorporation and
By-laws of the Surviving Corporation. The Certificate of
Incorporation and By-laws of Crown, as in effect immediately prior to the
Effective Time, shall be the Certificate of Incorporation and By-laws of the
Surviving Corporation.
Section
3. Name. The name of
the Surviving Corporation shall be: Crown Media Holdings,
Inc.
(a) Each
share of common stock, par value $1.00 per share, of HEH (the “HEH Common Stock”)
outstanding immediately prior to the Effective Time, except for those shares for
which a demand for appraisal is properly made, shall be converted into that
number of shares of Class A Common Stock, par value $0.01 per share, of Crown
(the “Common Stock”)
equal to the number of shares of Common Stock (including shares of Common Stock
issuable upon conversion of Class B Common Stock) owned by HEH immediately prior
to the Effective Time divided by the total number of shares of HEH Common Stock
outstanding immediately prior to the Effective Time.
(b) All
shares of Common Stock outstanding immediately prior to the Effective Time and
held by HEH shall be cancelled.
(c) All
shares of Common Stock outstanding immediately prior to the Effective Time,
other than those held by HEH, shall remain outstanding and unaffected by the
Merger.
(d) Each
share of HEH Common Stock as to which a written demand for appraisal is filed in
accordance with Section 262 of the Delaware General Corporation Law (the “DGCL”) and not withdrawn and
as to which no written consent to this Merger Agreement is filed (each, an
“Appraisal Share”)
shall not be converted into or represent a right to receive the applicable
merger consideration set forth in Section 4(c) hereof unless and until the
holder thereof shall have failed to perfect or shall have effectively withdrawn
or lost such right to appraisal of, and payment for, such share of HEH Common
Stock, at which time such share shall be converted into the right to receive the
applicable merger consideration set forth in Section 4(c) hereof
.
Each
Appraisal Share held by a stockholder who has perfected and has not effectively
withdrawn or lost such right to appraisal of such share of HEH Common Stock
shall only entitle its holder to such rights as are granted by the DGCL and
shall not entitle such holder to vote or to exercise any other rights of a
stockholder of the Surviving Corporation, except as provided by the
DGCL. Each holder of Appraisal Shares who becomes entitled to payment
therefor pursuant to the DGCL shall receive such payment from the Surviving
Corporation in accordance with the DGCL. The holders of any Appraisal
Shares shall be required to look solely to the Surviving Corporation (subject to
abandoned property, escheat and similar laws) as general creditors thereof with
respect to any merger consideration.
(e) The
Merger shall also have the effect set forth in Section 259 of the
DGCL.
Section
5. Further
Assurances. From time to time, as and when required by the
Surviving Corporation or by its successors and assigns, there shall be executed
and delivered on behalf of HEH such deeds and other instruments, and there shall
be taken or caused to be taken by the Surviving Corporation all such further and
other actions, as shall be appropriate or necessary in order to vest, perfect or
confirm in the Surviving Corporation the title to and possession of all
property, interests, assets, rights, privileges, immunities, powers and
authority of HEH, and otherwise to carry out the purposes of this Merger
Agreement. The officers and directors of the Surviving Corporation
are fully authorized, on behalf of the Surviving Corporation or HEH, to take any
and all such actions and to execute and deliver any and all such deeds,
documents and other instruments.
Section
6. Conditions. The
obligations of Crown and HEH to consummate the Merger are subject to the
satisfaction of the following conditions:
(a) This
Merger Agreement shall have been approved and adopted by the stockholders of
Crown and the stockholders of HEH in accordance with the DGCL;
(b) All
conditions to the “Closing Date” set forth in the Master Recapitalization
Agreement shall have been satisfied or waived, and the “Closing” shall occur
concurrent with the Effective Time; and
(c) At the
Effective Time, HEH shall have no material liabilities other than guarantees of
liabilities of Crown and its subsidiaries.
Section
7. Termination. This
Merger Agreement will terminate automatically, whether before or after the
adoption of this Merger Agreement by the stockholders of Crown and the
stockholders of HEH, upon the termination of the Master Recapitalization
Agreement without the “Closing” having occurred thereunder. In
addition, this Merger Agreement may be terminated, and the Merger herein
provided for may be abandoned, by mutual consent of the Boards of Directors of
Crown and HEH at any time prior to the Effective Time notwithstanding adoption
of this Merger Agreement by the stockholders of Crown and HEH.
Section
8. Amendment. At any
time prior to the Effective Time, the Boards of Directors of each of Crown and
HEH may, to the fullest extent permitted by law, amend, modify or supplement
this Merger Agreement in such manner as they may determine.
Section
9. Tax Treatment. This
Merger Agreement is intended to constitute a “plan of reorganization” with
respect to the Merger for United States federal income tax purposes pursuant to
which, for such purposes, the Merger is to be treated as a reorganization within
the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended
(the “Code”). Neither
Crown nor HEH will take any position on any United States federal, state or
local income or franchise tax return, or take any other tax reporting position,
that is inconsistent with the treatment of the Merger as a reorganization within
the meaning of Section 368(a) of the Code, unless required by a “determination”
(as defined in Section 1313(a)(1) of the Code) or by applicable state or local
income or franchise tax law. Prior to the Effective Time, each of
Crown and HEH shall use its best efforts to cause the Merger to qualify as a 368
Reorganization and shall not take any action reasonably likely to cause the
Merger not so to qualify.
Section
10. Assignment; Third Party
Beneficiaries. Neither this Merger Agreement, nor any right,
interest or obligation hereunder, shall be assigned by any of the parties hereto
without the prior written consent of the other parties. This Merger
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. This Agreement is not intended to
confer any rights or benefits upon any person other than the parties hereto and
their respective successors and assigns.
Section
11. Governing Law;
Jurisdiction. This Merger Agreement and the legal relations
between the parties hereto shall be governed by and construed in accordance with
the laws of the State of Delaware, applicable to contracts made and performed
therein.
Any and
all claims arising out of, relating to or in connection with this
Merger Agreement or any of the transactions contemplated hereby or the subject
matter hereof shall be brought exclusively in the Court of Chancery of the State
of Delaware or, if under applicable law exclusive jurisdiction over the matter
is vested in the federal courts, the United States District Court for the
District of Delaware (the "Designated Court"). Each of the parties
hereto hereby irrevocably submits with regard to any such action or proceeding
for itself and in respect of its property, generally and unconditionally, to the
personal jurisdiction of the Designated Court and agrees that it will not bring
any action whether in tort, contract or otherwise arising out of, relating to or
in connection with this Merger Agreement or any of the transactions contemplated
hereby or the subject matter hereof in any court other than the Designated
Court. Each of the parties hereto hereby irrevocably waives, and
agrees not to assert as a defense, counterclaim or otherwise, in any action or
proceeding with respect to this Merger Agreement, (a) any claim that it is not
personally subject to the jurisdiction of the Designated Court, (b) any claim
that it or its property is exempt or immune from jurisdiction of the Designated
Court or from any legal process commenced in such the Designated Court (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution of judgment, execution of judgment or otherwise) and (c) to the
fullest extent permitted by applicable law, any claim that (i) the suit, action
or proceeding in such Designated Court is brought in an inconvenient forum, (ii)
the venue of such suit, action or proceeding is improper or (iii) this Merger
Agreement, or the subject matter hereof, may not be enforced in or by such
Designated Court.
Each
party acknowledges and agrees that any controversy which may arise under this
Merger Agreement is likely to involve complicated and difficult issues, and,
therefore, each such party hereby irrevocably and unconditionally waives any
right such party may have to a trial by jury in respect of any litigation
directly or indirectly arising out of or relating to this Merger Agreement or
the Merger. Each party certifies and acknowledges that (i) no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce the foregoing waiver, (ii) each party understands and has considered
the implications of this waiver, (iii) each party makes this waiver
voluntarily, and (iv) each party has been induced to enter into this agreement
by, among other things, the mutual waivers and certifications in this Section
11.
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IN
WITNESS WHEREOF, the undersigned have executed this Merger Agreement as of the
date first above written.
CROWN
MEDIA HOLDINGS, INC.
By: /s/
XXXXXXX
XXXXXXXX
Name:
XXXXXXX XXXXXXXX
Title:
EXECUTIVE VICE PRESIDENT
HALLMARK
ENTERTAINMENT HOLDINGS, INC.
By: /s/ XXXXXXX
XXXXXXXX
Name:
XXXXXXX XXXXXXXX
Title:
PRESIDENT
