AGREEMENT AND PLAN OF MERGER
EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of August 2, 2005
(this “Agreement”), by and among Triple Crown Media,
Inc., a Delaware corporation (“TCM”), BR Acquisition
Corp., a Georgia corporation and a direct, wholly-owned
subsidiary of TCM (“Merger Sub”), and Bull Run
Corporation, a Georgia corporation (the “Company”).
Each of TCM, Merger Sub and the Company has determined that it
is advisable and in the best interests of its stockholders for
the parties to enter into a business combination upon the terms
and subject to the conditions set forth herein;
In furtherance of such combination, each of (i) the special
committee of the board of directors of TCM (the “TCM
Special Committee”), (ii) the board of directors of
TCM (the “TCM Board”), (iii) the special
committee of the board of directors of the Company (the
“Company Special Committee”), (iv) the board of
directors of the Company (the “Company Board”),
(v) the board of directors of Merger Sub, (vi) the
sole stockholder of TCM and (vii) the sole stockholder of
Merger Sub has approved the merger (the “Merger”) of
the Company with and into Merger Sub in accordance with the
applicable provisions of the Georgia Business Corporation Code
(“Georgia Law”) and upon the terms and subject to the
conditions set forth herein;
The Company Special Committee and the Company Board have
unanimously determined that this Agreement, the Merger and the
other transactions contemplated hereby (other than the Spin-off
(as defined herein)) are fair to the stockholders of the Company
and has unanimously recommended that the stockholders of the
Company approve and adopt this Agreement, the Merger and the
other transactions contemplated hereby (other than the
Spin-off); and
For U.S. federal income tax purposes, it is intended that
(a) the Merger will qualify as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code of
1986, as amended (the “Code”), (b) this Agreement
shall be, and hereby is, adopted as a plan of reorganization for
purposes of Section 368 of the Code and (c) TCM,
Merger Sub and the Company will each be a party to such
reorganization within the meaning of Section 368(b) of the
Code;
THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be
legally bound hereby, the parties hereto agree as follows:
ARTICLE I.
(a) “1994 Directors’ Plan” shall have the meaning specified in Section 2.06(d). | |
(b) “1994 Plan” shall have the meaning specified in Section 2.06(d). | |
(c) “affiliate” of a person means a person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the first mentioned person. | |
(d) “Agreement” shall mean this Agreement and Plan of Merger, together with all exhibits attached hereto, the Company Disclosure Letter and the TCM Disclosure Letter. | |
(e) “Ancillary Agreements” means any certificates or supporting documents contemplated or delivered pursuant thereto and pursuant to this Agreement. | |
(f) “Articles of Merger” shall have the meaning specified in Section 2.02. |
1
(g) “Assets” means all the properties, assets and contract rights (including, without limitation, cash, cash equivalents, accounts receivable, inventory, equipment, office furniture and furnishings, trade names, trademarks and patents, contracts, agreements, licenses and real estate) of the Company and its subsidiaries, whether tangible or intangible, real, personal or mixed. | |
(h) “books and records” means, with respect to any person, all books and records, including, without limitation, corporate records (such as minute books, seals, stock ledgers and similar items), manuals, price lists, mailing lists, lists of customers, slides and promotional materials, purchasing materials, personnel records, quality control records and procedures, research and development files, financial and accounting records (exclusive of records maintained by the Company’s independent accountants), environmental records and litigation files (regardless of the media in which stated), in each case principally relating to or used by such person. | |
(i) “Blue Sky Laws” shall have the meaning specified in Section 3.05(b). | |
(j) “business day” means any day other than a day on which banks in Atlanta, Georgia are required or authorized to be closed. | |
(k) “Cash Advance” means the cash advances in the aggregate of $6,050,000 made by J. Xxxx Xxxxxxxx to the Company. | |
(l) “CERCLA” shall have the meaning specified in Section 3.15(b). | |
(m) “Certificate” shall have the meaning specified in Section 2.06(c). | |
(n) “Closing” shall have the meaning specified in Section 2.01. | |
(o) “Closing Date” shall have the meaning specified in Section 2.01. | |
(p) “Code” shall have the meaning specified in the Recitals. | |
(q) “Common Stock Exchange Ratio” shall have the meaning specified in Section 2.06(c)(i). | |
(r) “Company” shall mean Bull Run Corporation, a Georgia corporation. | |
(s) “Company Articles of Incorporation” means the Articles of Incorporation of the Company, as amended, in effect as of the date of this Agreement. | |
(t) “Company Board” shall have the meaning specified in the Recitals. | |
(u) “Company By-Laws” shall have the meaning specified in Section 3.02. | |
(v) “Company Capital Stock” means collectively, the Company Common Stock and the Company Preferred Stock. | |
(w) “Company Common Stock” shall have the meaning specified in Section 2.06(a). | |
(x) “Company Disclosure Letter” shall have the meaning specified in Article III. | |
(y) “Company ERISA Affiliate” shall have the meaning specified in Section 3.12(a). | |
(z) “Company Financial Advisor” means SunTrust Xxxxxxxx Xxxxxxxx. | |
(aa) “Company Material Adverse Effect” means a material and adverse effect on the operation of the Company taken as a whole; provided, however, that the following shall not be taken into account in determining whether there has been or would be a “Material Adverse Effect”: (i) any adverse changes or developments resulting from conditions affecting the United States economy generally; (ii) any acts of war, insurrection, sabotage or terrorism; (iii) any adverse change or developments that are primarily caused by conditions affecting the media and advertising industries generally; and (iv) any adverse changes or developments arising primarily out of, or resulting primarily from, actions taken by any party in connection with (but not in breach of) this Agreement and the transactions contemplated hereunder, or which are primarily attributable to the announcement of this Agreement and the transactions contemplated hereby or the identity of TCM. |
2
(bb) “Company Option Plans” shall have the meaning specified in Section 2.06(d). | |
(cc) “Company Permits” shall have the meaning specified in Section 3.08(b). | |
(dd) “Company Plan” shall have the meaning specified in Section 3.12(a). | |
(ee) “Company Preferred Stock” means collectively, the Series D Preferred, the Series E Preferred and the Series F Preferred. | |
(ff) “Company Proxy Statement” shall have the meaning specified in Section 3.07. | |
(gg) “Company Real Property” shall have the meaning set forth in Section 3.15(a). | |
(hh) “Company Representatives” shall have the meaning specified in Section 5.03(a). | |
(ii) “Company SEC Reports” shall have the meaning specified in Section 3.06(a). | |
(jj) “Company Special Committee” shall have the meaning specified in the Recitals. | |
(kk) “Company Stockholder” means each holder of record (as of the Effective Time) of the Company Capital Stock. | |
(ll) “Company Stockholders’ Action” shall have the meaning specified in Section 3.04(a). | |
(mm) “Company Stockholders’ Meeting” shall have the meaning specified in Section 5.02(c). | |
(nn) “Company Stockholders’ Vote Condition” shall have the meaning specified in Section 3.21. | |
(oo) “Company Terminating Breach” shall have the meaning specified in Section 7.01(c). | |
(pp) “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person, whether through the ownership of voting securities or debt which is convertible into voting securities, by contract, credit arrangement or otherwise; provided, however, that the ownership, either alone or through or together with any subsidiary, directly or indirectly, of more than 10% 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 a corporation or other legal entity shall be deemed to constitute “control” of such corporation or other legal entity. | |
(qq) “D&O Insurance” shall have the meaning specified in Section 5.11(b). | |
(rr) “Dissenting Stockholder” means any Company Stockholder exercising dissenters’ rights pursuant to Article 13 of Georgia Law. | |
(ss) “Effective Time” shall have the meaning specified in Section 2.02. | |
(tt) “Encumbrances” means any lien, pledge, hypothecation, claim, infringement, charge, mortgage, security interest, encumbrance, prior assignment, infringement, interference, option, right of first refusal, preemptive right, community property interest or restriction of any nature whatsoever (including any restriction on the voting of any security, any restriction on the transfer of any security or other asset, any restriction on the receipt of any income derived from any asset, any restriction on the use of any asset and any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset). | |
(uu) “Environment” means any surface or subsurface physical medium or natural resource, including, air, land, soil, surface waters, ground waters, stream and river sediments, and biota. | |
(vv) “Environmental Laws” means any federal, state, local or common law, rule, regulation, ordinance, code, order or judgment (including the common law and any judicial or administrative interpretations, guidances, directives, policy statements or opinions) relating to the injury to, or the pollution or protection of human health and safety or the Environment. |
3
(ww) “Environmental Liabilities” means any liability or obligation arising under Environmental Laws to the extent arising from any condition existing or any act or omission occurring prior to the Effective Time, including, without limitation, any claims, demands, assessments, judgments, orders, causes of action, notices of actual or alleged violations or liability (including such notices regarding the disposal or release of Hazardous Substances on the Real Property or elsewhere), proceedings and any associated costs, assessments, investigations, losses, damages (including punitive damages), obligations, liabilities, awards, fines, sanctions, penalties, or amounts paid in settlement (including reasonable costs, fees and expenses of attorneys, accountants, consultants and other agents of such person). | |
(xx) “ERISA” shall have the meaning specified in Section 3.12(a). | |
(yy) “Exchange Act” shall have the meaning specified in Section 3.05(b). | |
(zz) “Exchange Agent” shall have the meaning specified in Section 2.07(a). | |
(aaa) “Existing Stockholder Agreement” means that certain Stockholders’ Agreement dated as of December 17, 1999 by and among Hilton X. Xxxxxx, Xx., Xxxxxxx X. Xxxxxx, Xxxxxxxx-Xxxxxxx Partnership, X. Xxxxx Host and Xxxxxxx X. Xxxxxx. | |
(bbb) “Form S-4” shall have the meaning specified in Section 5.02(a). | |
(ccc) “GAAP” means generally accepted accounting principles. | |
(ddd) “Georgia Law” shall have the meaning specified in the Recitals. | |
(eee) “Governmental Entity” means any foreign governmental or United States federal, state or local governmental, administrative or regulatory authority, commission, body, agency, court or any judicial body or other authority. | |
(fff) “Xxxx” means Xxxx Television, Inc., a Georgia corporation. | |
(ggg) “Xxxx Side Letter” means the letter agreement dated August 2, 2005 between Xxxx and the Company. | |
(hhh) “Hazardous Substances” means any materials or substances, pollutants, contaminants, contaminants or wastes regulated by or defined under any Environmental Law, including, without limitation, petroleum, petroleum products, petroleum derived substances, radioactive materials, asbestos, polychlorinated biphenyls, radon and lead based paint. | |
(iii) “Indebtedness for Borrowed Money” means with respect to any person, all indebtedness in respect of money borrowed, including without limitation all capital leases, and the deferred purchase price of any property or asset, evidenced by a promissory note, bond, indenture or similar written obligation for the payment of money, other than trade payables and accrued expenses incurred in the ordinary course of business. | |
(jjj) information “made available” shall be limited to that information to which access has been granted by the applicable party for review by another party to this Agreement, by placing such information in a data room or otherwise, and shall not include information obtained or discovered through channels other than the providing party such as the Internet or public filings. | |
(kkk) “IRS” shall have the meaning specified in Section 3.12(c). | |
(lll) “Laws” shall have the meaning specified in Section 3.08(a). | |
(mmm) “Merger” shall have the meaning specified in the Recitals. | |
(nnn) “Merger Consideration” means, collectively, (i) the aggregate number of shares of TCM Common Stock to be issued in exchange for the Company Common Stock and to be reserved for Options in accordance with Section 5.06, (ii) the aggregate number of shares of TCM Series A Preferred Stock to be issued in exchange for the Series D Preferred and the Series E Preferred held |
4
by the Series E Affiliated Stockholders, (iii) the aggregate amount of cash to be paid in exchange for the Series E Preferred held by Series E Preferred stockholders (other than Series E Affiliated Stockholders); (iv) the aggregate number of shares of TCM Series A Preferred Stock to be issued in exchange for the accrued and unpaid dividends (through July 1, 2005) on the Series D Preferred and Series E Preferred held by Series E Affiliated Stockholders; (v) the repayment of the Cash Advance; and (vi) the aggregate number of shares of TCM Common Stock to be issued in exchange for the Series F Preferred Stock and all accrued and unpaid dividends thereon (through July 1, 2005). | |
(ooo) “Merger Sub” shall have the meaning specified in the Introduction. | |
(ppp) “Nasdaq” means the Nasdaq National Market. | |
(qqq) “Option” shall have the meaning specified in Section 2.06(d). | |
(rrr) “ordinary course of business” means any action taken by a person that: (i) is consistent in nature, scope and magnitude with the past practices of such person and is taken in the ordinary course of the normal, day-to-day operations of such person; and (ii) does not require authorization by the board of directors or stockholders of such person (or by any person or group of persons exercising similar authority). | |
(sss) “Permitted Encumbrance” shall have the meaning specified in Section 3.18. | |
(ttt) “person” means an individual, corporation, partnership, association, trust, unincorporated organization or other entity or group (as defined in Section 13(d)(3) of the Exchange Act). | |
(uuu) “Refinancing” means a financing in which TCM receives funded debt of at least $120.0 million. | |
(vvv) “Rule 145 Affiliate” shall have the meaning specified in Section 6.04. | |
(www) “Rule 145 Affiliate Agreement” shall have the meaning specified in Section 6.04. | |
(xxx) “SEC” shall have the meaning specified in Section 3.06(a). | |
(yyy) “Securities Act” shall have the meaning specified in Section 3.05(b). | |
(zzz) “Separation and Distribution Agreement” means that certain Separation and Distribution Agreement dated as of August 2, 2005 by and among Xxxx and TCM attached hereto as Exhibit A. | |
(aaaa) “Series D Preferred” means the Series D Convertible Preferred Stock, par value $0.01 per share, of the Company. | |
(bbbb) “Series E Affiliated Stockholder” means J. Xxxx Xxxxxxxx and any transferee of J. Xxxx Xxxxxxxx. | |
(cccc) “Series E Preferred” means the Series E Convertible Preferred Stock, par value $0.01 per share, of the Company. | |
(dddd) “Series E Preferred Stockholder” mean a holder of Series E Preferred. | |
(eeee) “Series F Dividend Amount” means the aggregate of $290,000. | |
(ffff) “Series F Preferred” means the Series F Convertible Preferred Stock, par value $0.01 per share, of the Company. | |
(gggg) “Solvency Opinion” shall have the meaning specified in Section 6.02(g). | |
(hhhh) “Spin-off” means the separation of Xxxx’x newspaper publishing business and Graylink Wireless business from its other businesses, which result will be accomplished by: (i) Xxxx contributing all of the membership interests of Xxxx Publishing, LLC to TCM; and (ii) Xxxx subsequently distributing all of the shares of TCM Common Stock to its stockholders, in each case in accordance with the Separation and Distribution Agreement. |
5
(iiii) “subsidiary” or “subsidiaries” of any person means any corporation, partnership, joint venture or other legal entity of which such person (either alone 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. | |
(jjjj) “Superior Proposal” shall have the meaning specified in Section 5.03(b). | |
(kkkk) “Surviving Corporation” shall have the meaning specified in Section 2.01. | |
(llll) “Surviving Corporation Common Stock” shall have the meaning specified in Section 2.06(b). | |
(mmmm) “Takeover Proposal” shall have the meaning specified in Section 5.03(b). | |
(nnnn) “Takeover Proposal Interest” shall have the meaning specified in Section 5.03(a). | |
(oooo) “Tax” or “Taxes” shall mean taxes, fees, levies, duties, tariffs, imposts and governmental impositions or charges of any kind in the nature of (or similar to) taxes, payable to any federal, state, provincial, local or foreign taxing authority, including, without limitation, (i) income, franchise, profits, gross receipts, ad valorem, net worth, value added, sales, use, service, real or personal property, special assessments, capital stock, license, payroll, withholding, employment, social security, workers’ compensation, unemployment compensation, utility, severance, production, excise, stamp, occupation, premiums, windfall profits, transfer and gains taxes and (ii) interest, penalties, additional taxes and additions to tax imposed with respect thereto. | |
(pppp) “Tax Sharing Agreement” means that certain Tax Sharing Agreement dated as of August 2, 2005 by and among Xxxx and TCM attached hereto as Exhibit B. | |
(qqqq) “Tax Returns” shall mean returns, reports and information statements with respect to Taxes required to be filed with the IRS or any other taxing authority, domestic or foreign, including, without limitation, consolidated, combined and unitary tax returns. | |
(rrrr) “TCM” means Triple Crown Media, Inc., a Delaware corporation. | |
(ssss) “TCM Audited Financial Statements” shall have the meaning specified in Section 4.07. | |
(tttt) “TCM Board” shall have the meaning specified in the Recitals. | |
(uuuu) “TCM Capital Stock” means the TCM Common Stock and the TCM Preferred Stock. | |
(vvvv) “TCM Common Stock” means the common stock of TCM, par value $0.001 per share. | |
(wwww) “TCM Confidentiality Agreement” shall mean the confidentiality agreement dated June 1, 2005 between TCM, Xxxx and the Company. | |
(xxxx) “TCM Disclosure Letter” shall have the meaning specified in Article IV. | |
(yyyy) “TCM Financial Advisor” means Xxxxxxxx Xxxxx Xxxxxx & Xxxxx Financial Advisors, Inc. and its affiliates. | |
(zzzz) “TCM Financial Statements” shall have the meaning specified in Section 4.07. | |
(aaaaa) “TCM Interim Financial Statements” shall have the meaning specified in Section 4.07. | |
(bbbbb) “TCM Material Adverse Effect” means a material and adverse effect on the operation of TCM taken as a whole; provided, however, that the following shall not be taken into account in determining whether there has been or would be a “Material Adverse Effect”: (i) any adverse changes or developments resulting from conditions affecting the United States economy generally; (ii) any acts of war, insurrection, sabotage or terrorism; (iii) any adverse changes or developments that are primarily caused by conditions affecting the newspaper publishing and paging industries generally; and (iv) any adverse changes or developments arising primarily out of, or resulting |
6
primarily from, actions taken by any party in connection with (but not in breach of) this Agreement and the transactions contemplated hereunder, or which are primarily attributable to the announcement of this Agreement and the transactions contemplated hereby or the identity of the Company. | |
(ccccc) “TCM Material Contracts” shall have the meaning specified in Section 4.17. | |
(ddddd) “TCM Permits” shall have the meaning specified in Section 4.09(b). | |
(eeeee) “TCM Preferred Stock” means collectively, the TCM Series A Preferred Stock and the TCM Series B Preferred Stock. | |
(fffff) “TCM Real Property” shall have the meaning specified in Section 4.15(a). | |
(ggggg) “TCM Representatives” shall have the meaning specified in Section 5.03(e). | |
(hhhhh) “TCM Series A Preferred Stock” mean the Series A convertible preferred stock of TCM, par value $0.001 per share. | |
(iiiii) “TCM Series B Preferred Stock” mean the Series B convertible preferred stock of TCM, par value $0.001 per share. | |
(jjjjj) “TCM Special Committee” shall have the meaning specified in the Recitals. | |
(kkkkk) “TCM Superior Proposal” shall have the meaning specified in Section 5.03(f). | |
(lllll) “TCM Takeover Proposal” shall have the meaning specified in Section 5.03(f). | |
(mmmmm) “TCM Takeover Proposal Interest” shall have the meaning specified in Section 5.03(e). | |
(nnnnn) “TCM Terminating Breach” shall have the meaning specified in Section 7.01(d). | |
(ooooo) “Transaction” means the Spin-off and the Merger. | |
(ppppp) “Transaction Expenses” shall have the meaning specified in Section 5.09(a). |
ARTICLE II.
7
(a) At the Effective Time, the Articles of Incorporation of
Merger Sub, as in effect immediately prior to the Effective
Time, shall be the Articles of Incorporation of the Surviving
Corporation.
(b) The By-Laws of Merger Sub, as in effect immediately
prior to the Effective Time, shall be the By-Laws of the
Surviving Corporation.
(i) each share of Company Common Stock outstanding immediately prior to the Effective Time shall be cancelled and extinguished and thereafter represent the right to receive 0.0289 of a share of TCM Common Stock (the “Common Stock Exchange Ratio”); | |
(ii) each share of Series D Preferred outstanding immediately prior to the Effective Time shall be cancelled and extinguished and thereafter represent the right to receive one share of TCM Series A Preferred Stock; | |
(iii) each share of Series E Preferred held by a Series E Affiliated Stockholder and outstanding immediately prior to the Effective Time shall be cancelled and extinguished and thereafter represent the right to receive one share of TCM Series A Preferred Stock; |
8
(iv) each share of Series E Preferred held by a Series E Preferred stockholder (other than a Series E Affiliated Stockholder) and outstanding immediately prior to the Effective Time shall be cancelled and extinguished and thereafter represent the right receive $1,000; and | |
(v) each share of Series F Preferred Stock outstanding immediately prior to Effective Time shall be cancelled and extinguished and thereafter represent the right to receive 22.56 shares of TCM Common Stock. |
9
10
11
ARTICLE III.
The Company represents and warrants to TCM and Merger Sub,
subject to such qualifications and exceptions as are disclosed
in writing in the applicable parts of the disclosure letter
delivered by the Company to TCM and Merger Sub concurrently
herewith (the “Company Disclosure Letter”). The
Company Disclosure Letter shall be arranged in paragraphs
corresponding to the numbered and lettered paragraphs in this
Article III and the disclosure in any paragraph shall
qualify other paragraphs in this Article III only to the
extent that it is specifically indicated in such paragraph.
(a) The authorized capital stock of the Company consists of
100,000,000 shares of Company Common Stock and
5,000,000 shares of Company Preferred Stock, of which
100,000 shares are designated as Series D Preferred,
25,000 shares are designated as Series E Preferred,
and 25,000 shares are designated as Series F
Preferred. As of the date hereof, (i) 6,889,767 shares
of Company Common Stock are issued and outstanding, (ii) no
shares of Company Common Stock are held in the treasury of the
Company, (iii) 293,437 shares of Company Common Stock
are reserved for issuance pursuant to outstanding Options
granted under the Company Option Plans,
(iv) 12,496.71233 shares of Series D Preferred
are issued and outstanding, (v) 7,584.815 shares of
Series E Preferred are issued and outstanding,
(vi) 2,000 shares of Series F Preferred are
issued and outstanding, (vii) no shares of Company
Preferred Stock are held in the treasury of the Company,
(viii) 1,249,671 shares of Company Common Stock are
reserved for issuance upon conversion of issued and outstanding
shares of Series D Preferred,
(ix) 1,083,545 shares of Company Common Stock are
reserved for issuance upon conversion of issued and outstanding
shares of Series E Preferred and
(x) 1,562,500 shares of Company Common Stock are
reserved for issuance upon conversion of issued and outstanding
shares of Series F Preferred. As of the date hereof, there
are no other shares of Company Capital Stock issued and
outstanding or reserved for future issuance. All of the issued
and outstanding shares of Company Capital Stock are duly
authorized, validly issued, fully paid, non-assessable
12
and free of preemptive rights. None of the issued and
outstanding shares of Company Capital Stock has been issued in
violation of any applicable federal or state Law or any
preemptive rights or rights to subscribe for or purchase
securities. All shares of Company Capital Stock subject to
issuance as aforesaid in clauses (iii) and
(viii) through (x), upon issuance on the terms and
conditions specified in the instruments pursuant to which they
are issuable, will be duly authorized, validly issued, fully
paid, non-assessable and free of preemptive rights and, assuming
such issuance prior to the Effective Time, will not have been
issued in violation of the Company Articles of Incorporation,
any applicable federal or state Law or any preemptive rights or
rights to subscribe for or purchase securities. Except as set
forth in this Section 3.03 or Section 3.12, there are
no options, warrants, calls or preemptive rights relating to the
issued or unissued capital stock of the Company or any of its
subsidiaries or obligating the Company or any of its
subsidiaries to issue, transfer, deliver or sell, or cause to be
issued, transferred, delivered or sold, any shares of capital
stock of, or any securities directly or indirectly convertible
into or exercisable or exchangeable for any shares of capital
stock of, the Company or any of its subsidiaries. Neither the
Company nor any of its subsidiaries has issued and outstanding
any stock appreciation rights, phantom stock, performance based
rights or similar rights or obligations. There are no
obligations, contingent or otherwise, of the Company or any of
its subsidiaries to repurchase, redeem or otherwise acquire any
shares of Company Capital Stock or capital stock of any
subsidiary or to provide funds to or make any investment (in the
form of a loan, capital contribution or otherwise) in the
Company, any subsidiary or any other entity, other than
guarantees of bank obligations of subsidiaries entered into in
the ordinary course of business. Except for the Existing
Stockholder Agreement, there are no voting trusts, proxies or
other agreements or understandings with respect to any Company
Capital Stock to which the Company or, to the knowledge of the
Company, any other person is a party or by which the Company or
any such other person is bound. All of the outstanding shares of
capital stock of each of the Company’s subsidiaries are
duly authorized, validly issued, fully paid, non-assessable and
free of preemptive rights, and all such shares are owned of
record and beneficially by the Company or another subsidiary
free and clear of any and all Encumbrances.
(b) Section 3.03(b) of the Company Disclosure Letter
lists all holders of Company Preferred Stock as of the date
hereof, as well as the number, class and series of shares of
Company Preferred Stock held by each such holder.
(c) Section 3.03(c) of the Company Disclosure Letter
sets forth a true and complete list of each current or former
employee, officer, director or consultant of the Company or any
of its subsidiaries that holds an Option as of the date of this
Agreement, together with the number of shares of Company Common
Stock subject to such Option, the date of grant of such Option,
the exercise price of such Option, the expiration date of such
Option, the vesting schedule for such Option and whether or not
such Option is intended to qualify as an “incentive stock
option” within the meaning of Section 422(b) of the
Code. Section 3.03(c) of the Company Disclosure Letter also
sets forth the total number of outstanding Options. No awards of
stock purchase rights have been granted under the Company Option
Plans.
(a) The Company has all necessary corporate power and
authority to execute and deliver this Agreement and each of the
Ancillary Agreements to which the Company is a party (subject to
the receipt of the consents described in Section 3.05(b))
and to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby
(other than the approval and adoption of this Agreement, the
Merger and the other transactions contemplated hereby by the
stockholders of the Company in accordance with Georgia Law and
the Company Articles of Incorporation (the “Company
Stockholders’ Action”). The execution and delivery of
this Agreement and the Ancillary Agreements by the Company and
the consummation by the Company of the transactions contemplated
hereby and thereby have been duly and validly authorized by all
necessary corporate action on the part of the Company, and no
other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or any of the Ancillary
Agreements or to consummate the transactions so contemplated,
other than the Company Stockholders’ Action. This Agreement
has been, and the Ancillary Agreements will be, duly and validly
executed and delivered by the Company and, assuming the due
authorization, execution
13
and delivery of this Agreement and the Ancillary Agreements by
each of the other parties hereto and thereto, constitutes, or,
in the case of the Ancillary Agreements, will constitute, legal,
valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms,
except to the extent such enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws relating to or affecting creditors generally or
by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
(b) The Company Special Committee and the Company Board
(i) have unanimously declared that this Agreement, the
Merger and the other transactions contemplated hereby (other
than the Spin-off) and thereby are advisable, fair to and in the
best interests of the stockholders of the Company,
(ii) have unanimously authorized, approved and adopted this
Agreement, the Ancillary Agreements, the Merger and the other
transactions contemplated hereby and thereby and (iii) have
recommended that the stockholders of the Company authorize,
approve and adopt this Agreement, the Merger and the other
transactions contemplated hereby (other than the Spin-off) and
thereby.
(a) Except as set forth in Section 3.05 of the Company
Disclosure Letter, the execution and delivery of this Agreement
and the Ancillary Agreements by the Company do not, and the
performance of this Agreement and the Ancillary Agreements by
the Company and the consummation by the Company of the
transactions contemplated hereby and thereby will not
(i) conflict with or violate the Company Articles of
Incorporation or Company By-Laws or the equivalent
organizational documents of any of the Company’s
subsidiaries, (ii) conflict with or violate any Law
applicable to the Company or any of its subsidiaries or by which
any of its or any of its subsidiaries’ properties or
operations is bound or affected or (iii) conflict with,
result in any breach of, or constitute a default (or an event
that with notice or lapse of time or both would become a
default) under, or impair the Company’s or any of its
subsidiaries’ rights or entitle any party to rights or
privileges that such party was not entitled to receive
immediately before this Agreement or the Ancillary Agreements
were executed, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the
creation of an Encumbrance (other than a Permitted Encumbrance)
on any of the properties or assets of the Company or any of its
subsidiaries pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries, or any of its or any of its subsidiaries’
properties, is bound or affected, except in the case of
clauses (ii) and (iii), as would not, individually or in
the aggregate, have a Company Material Adverse Effect.
(b) The execution and delivery of this Agreement and the
Ancillary Agreements by the Company do not, and the performance
of this Agreement and the Ancillary Agreements by the Company
and the consummation by the Company of the transactions
contemplated hereby and thereby will not, require any waiver,
consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Entity or other third party,
except (i) for applicable requirements of the Securities
Act of 1933, as amended (the “Securities Act”), the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and state securities laws (“Blue Sky
Laws”), (ii) for the filing of the Articles of Merger
as required by Georgia Law, and (iii) where the failure to
obtain such consents, approvals, authorizations or permits, or
to make such filings or notifications, would not prevent or
delay consummation of the Merger, otherwise prevent or delay the
Company from performing its obligations under this Agreement.
(a) The Company has filed all forms, reports and documents
required to be filed by it pursuant to the Securities Act or the
Exchange Act with the Securities and Exchange Commission (the
“SEC”) since August 31, 2003 (collectively, the
“Company SEC Reports”). The Company SEC Reports
(i) were prepared in compliance in all material respects
with the requirements of the Securities Act or the Exchange Act,
as the case may be, and (ii) did not at the time they were
filed (or if amended or superseded by a filing prior to the date
of this Agreement, then on the date of such filing) contain any
14
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading. None of the Company’s
subsidiaries is required to file any forms, reports or other
documents with the SEC.
(b) The consolidated financial statements (including, in
each case, the related notes thereto) contained in the Company
SEC Reports were prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may
be indicated therein or in the notes thereto), and fairly
present in all material respects the consolidated financial
position of the Company and its subsidiaries as at the
respective dates thereof and the consolidated results of its
operations and cash flows for the periods indicated, except that
the unaudited interim financial statements were or are subject
to normal and recurring year-end adjustments which were not, or
are not expected to be, material in amount and such statements
do not contain notes required by GAAP.
(c) Since the date of the latest Company SEC Report that
included the certifications required by Rule 13a-14(a) of
the Exchange Act, the Company has not materially and adversely
amended its disclosure controls and procedures (as defined in
Rule 13a-15(e) of the Exchange Act) or its internal
controls over financial reporting (as defined in
Rule 13a-15(f) of the Exchange Act), as previously
described in its Company SEC Reports. The Company has made
available to TCM, complete and correct copies of, all formal
written descriptions of, and all policies, manuals and other
documents promulgating, such disclosure controls and procedures.
(d) Since the date of the latest Company SEC Report that
included the certifications required by Rule 13a-14(a) of
the Exchange Act, neither the Company nor any subsidiary nor, to
the Company’s knowledge, any member of the audit committee
or executive officer of the Company or any subsidiary, has
received any complaint, allegation, assertion or claim, whether
made in writing or orally to any such person, regarding the
accounting, internal accounting controls or auditing matters of
the Company or any subsidiary, including any complaint,
allegation, assertion or claim that the Company or any
Subsidiary has engaged in questionable accounting or auditing
matters. Since the date of the latest Company SEC Report that
included the certifications required by Rule 13a-14(a) of
the Exchange Act, no attorney representing the Company or any
subsidiary has reported evidence of a material violation of the
U.S. securities laws, or a material breach of fiduciary
duty by the Company or any of its officers or directors to the
Company Board or any committee thereof or to any executive
officer of the Company. Since the date of the latest Company SEC
Report that included the certifications required by
Rule 13a-14(a) of the Exchange Act, there have been no
internal investigations regarding improper accounting or revenue
recognition initiated at the direction of the chief executive
officer, chief financial officer, general counsel, the Company
Board or any committee thereof.
(e) Except as provided in the Company SEC Reports, there
are no material off balance sheet arrangements (as defined in
Item 303 of Regulation S-K) that have or are
reasonably likely to have a material current or future effect on
the Company’s financial liquidity, capital expenditures or
capital resources.
(f) The Company is in compliance in all material respects
with the applicable provisions of the Sarbanes Oxley Act of 2002
in effect as of the date hereof.
15
amendments or supplements thereto, are collectively referred to
herein as the “Company Proxy Statement.”
(a) Each of the Company and its subsidiaries, and each of
its and its subsidiaries’ properties and operations, are in
compliance with all foreign, federal, state and local statutes,
laws, rules, regulations, ordinances, orders, judgments, decrees
and other authorizations and approvals of Governmental Entities
(collectively, “Laws”), applicable to the Company or
any of its subsidiaries or by which any of its or any of its
subsidiaries’ properties or operations is bound or
affected, except where any such non-compliance would not have a
Company Material Adverse Effect. Neither the Company nor any of
its subsidiaries has received any notice or other communication
(whether written or oral) from any Governmental Entity regarding
any actual, alleged, possible or potential violation of, or any
failure to comply with, any Law, except where any such violation
or failure to comply would not have a Company Material Adverse
Effect.
(b) Each of the Company and its subsidiaries possesses all
permits, licenses, consents, franchises, orders, approvals,
certifications, registrations and authorizations from
Governmental Entities necessary to enable it to continue to own,
lease, operate and use its assets and properties and conduct its
business as presently conducted, including all permits,
licenses, consents, franchises, orders, approvals,
certifications, registrations and authorizations required under
applicable Environmental Laws (collectively, the “Company
Permits”), except where the failure to possess any of the
foregoing would not have a Company Material Adverse Effect. All
of the Company Permits are valid and in full force and effect,
except where any such invalidity would not have a Company
Material Adverse Effect, and there is no proceeding pending to
revoke, cancel, rescind, refuse to renew in the ordinary course
or modify any of the Company Permits. Each of the Company and
its subsidiaries is in compliance with the terms and conditions
of the Company Permits and with all material requirements,
standards and procedures of the Governmental Entities that
issued them, and with any limitation or, to the knowledge of the
Company, proposed limitation on any Company Permit, except where
such non-compliance would not have a Company Material Adverse
Effect, and the Company has no reasonable basis to believe that
the business will not remain capable of continued operation
consistent with past practice and in compliance with the terms
and conditions of the Company Permits following consummation of
the transactions contemplated by this Agreement.
16
obligations under this Agreement or incurred in connection with
the transactions contemplated by this Agreement.
(a) Section 3.12(a) of the Company Disclosure Letter
sets forth a true and complete list of all “employee
benefit plans” within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), and any other material bonus, profit
sharing, compensation, pension, severance, deferred
compensation, fringe benefit, insurance, welfare,
post-retirement, health, life, stock option, stock purchase,
restricted stock, tuition refund, service award, company car,
scholarship, relocation, disability, accident, sick, vacation,
holiday, termination, unemployment, individual employment,
consulting, executive compensation, incentive, commission,
retention, change in control, noncompetition and other plans,
agreements, policies, trust funds or arrangements (whether
written or unwritten, insured or self-insured, domestic or
foreign) (1) established, maintained, sponsored or
contributed to (or with respect to which any obligation to
contribute has been undertaken) by the Company or any entity
that would be deemed a “single employer” with the
Company under Section 414(b), (c), (m) or (o) of
the Code or Section 4001 of ERISA (a “Company ERISA
Affiliate”) on behalf of any employee, officer, director,
consultant or stockholder of the Company or any of its
subsidiaries (whether current, former or retired) or their
beneficiaries or (2) with respect to which the Company or
any Company ERISA Affiliate has or has had any obligation on
behalf of any such employee, officer, director, consultant,
stockholder or beneficiary (each a “Company Plan” and,
collectively, the “Company Plans”). True and complete
copies of each of the Company Plans and related documents have
been delivered or made available to TCM.
(b) None of the Company (including any subsidiary thereof),
any Company ERISA Affiliate or any of their respective
predecessors has within the past six years contributed to,
contributes to, has within the past six years been required to
contribute to, or otherwise participated in or participates in
or in any way, directly or indirectly, has any liability with
respect to any plan subject to Section 412 of the Code,
Section 302 of ERISA or Title IV of ERISA, including,
without limitation, any “multiemployer plan” (within
the meaning of Sections 3(37) or 4001(a)(3) of ERISA or
Section 414(f) of the Code) or any single employer pension
plan (within the meaning of Section 4001(a)(15) of ERISA)
which is subject to Sections 4063 and 4064 of ERISA.
(c) Except as set forth in Section 3.12(c) of the
Company Disclosure Letter, with respect to each of the Company
Plans: (1) each Company Plan intended to qualify under
Section 401(a) of the Code has received a favorable opinion
letter or advisory letter of the master and prototype plan
sponsor of such plan in accordance with Announcement 2001-77 by
the United States Internal Revenue Service (the “IRS”)
and nothing has occurred or, is expected to occur through the
date of the Effective Time that caused or is reasonably likely
to cause the loss of such qualification or the imposition of any
penalty or tax liability; (2) all payments required by such
Company Plan, any collective bargaining agreement or other
agreement, or by Law (including, without limitation, all
contributions, insurance premiums or intercompany charges) with
respect to all prior periods have been made or provided for by
the Company as applicable, in accordance with the provisions of
such Company Plan, applicable Law and United States GAAP;
(3) no claim, lawsuit, arbitration or other action has been
asserted, instituted or, to the knowledge of the
17
Company, is threatened against such Company Plan (other than
routine claims for benefits and appeals of such claims), any
trustee or fiduciaries thereof, the Company (including any
subsidiary thereof), any Company ERISA Affiliate, any director,
officer or employee thereof, or any of the assets of any trust
of such Company Plan; (4) such Company Plan complies and
has been maintained and operated in all material respects in
accordance with its terms and applicable Law, including, without
limitation, ERISA and the Code; (5) no non-exempt
“prohibited transaction,” within the meaning of
Section 4975 of the Code and Section 406 of ERISA, has
occurred or is reasonably expected to occur with respect to such
Company Plan that could result in the imposition of any penalty
or tax on the Company or any Company ERISA Affiliate; and
(6) such Company Plan is not under, and the Company has not
received any notice of, an audit or investigation by the IRS,
U.S. Department of Labor or any other Governmental Entity
and no such completed audit, if any, has resulted in the
imposition of any tax or penalty.
(d) Except as set forth in Section 3.12(d) of the
Company Disclosure Letter, the consummation of the transactions
contemplated by this Agreement alone, or in combination with a
termination of any employee, director or stockholder of the
Company or any of its subsidiaries (whether current, former or
retired), will not give rise to any liability under any Company
Plan, including, without limitation, liability for severance
pay, or accelerate the time of payment or vesting or increase
the amount of compensation or benefits due to any employee,
director or stockholder of the Company or any of its
subsidiaries (whether current, former or retired) or their
beneficiaries. No amounts payable under any Company Plan will
fail to be deductible for federal income tax purposes by virtue
of Sections 280G or 162(m) of the Code. Neither the Company
(including any subsidiary thereof) nor any Company ERISA
Affiliate maintains, contributes to or in any way provides for
any benefits of any kind whatsoever (other than under
Section 4980B of the Code, the Federal Social Security Act
or a plan qualified under Section 401(a) of the Code) to
any current or future retiree or terminee. Any individual who
performs services for the Company or any of its subsidiaries and
who is not treated as an employee for federal income tax
purposes by the Company or any of its subsidiaries is not an
employee under applicable Law or for any purpose including,
without limitation, for tax withholding purposes or Company Plan
purposes.
(e) None of the Company, its subsidiaries and their
respective Company ERISA Affiliates have any unfunded
liabilities pursuant to any Company Plan that is not intended to
be qualified under Section 401(a) of the Code and is an
employee pension benefit plan within the meaning of
Section 3(2) of ERISA, a nonqualified deferred compensation
plan or an excess benefit plan. Each Company Plan that is a
“nonqualified deferred compensation plan” (as defined
under Section 409A(d)(1) of the Code) has been operated and
administered in good faith compliance with Section 409A of
the Code from the period beginning January 1, 2005 through
the date hereof and has not been materially modified since
October 2, 2004.
(a) No employee or former employee of the Company or any of
its subsidiaries is owed any wages, benefits or other
compensation for past services (other than wages, benefits and
compensation accrued in the ordinary course of business during
the current pay period and accrued vacation).
(b) There are no labor disputes, including, without
limitation, charges of unfair labor practices within the meaning
of the National Labor Relations Act, pending or, to the
knowledge of the Company, threatened against the Company or any
of its subsidiaries by any of its employees. Neither the Company
nor any of its subsidiaries, within the past five years, has or
is knowingly engaged in any unfair labor practices within the
meaning of the National Labor Relations Act, except where such
actions would not have a Company Material Adverse Effect.
Neither the Company nor any of its subsidiaries is presently a
party to, or is bound by, any collective bargaining agreement or
union contract with respect to any persons employed by the
Company or any of its subsidiaries, and no collective bargaining
agreement is being negotiated by the Company or any of its
subsidiaries. To the knowledge of the Company, no organizing
activities are presently being made or are threatened by or on
behalf of any labor union with respect to any employees of the
Company or any of its subsidiaries. The Company has no knowledge
of any strikes, slowdowns, work stoppages or lockouts, or
threats thereof, by or with respect to any employees of the
18
Company or any of its subsidiaries, and there have been no such
strikes, slowdowns, work stoppages or lockouts within the past
three years. Each of the Company and its subsidiaries is in
compliance with all applicable Laws relating to employment and
employment practices, workers’ compensation, terms and
conditions of employment, worker safety, wages and hours and the
Worker Adjustment and Retraining Notification Act, except where
such non-compliance would not have a Company Material Adverse
Effect. There has been no harassment, discrimination,
retaliatory act or similar claim against any officer, director
or employee of the Company or any of its subsidiaries at any
time during the past three years, except where any such action
would not have a Company Material Adverse Effect.
(a) Except as set forth in Section 3.14(a) of the
Company Disclosure Letter, each of the Company and its
subsidiaries, and any consolidated, combined, unitary or
aggregate group for Tax purposes of which the Company or any of
its subsidiaries is a member, have timely filed all United
States federal income Tax Returns and all other Tax Returns
required to be filed by them or any of them (taking into account
applicable extensions), and have timely paid and discharged all
material Taxes required to be paid (whether or not shown on such
Tax Returns), other than Taxes the payment of which is being
contested in good faith by appropriate proceedings. The most
recent financial statements contained in the Company SEC Reports
reflect, with respect to any liability for Taxes of the Company
and its subsidiaries for any years ended on or before the date
of such Company SEC Reports and either not finally determined or
with respect to which the applicable statute of limitations has
not expired, an adequate reserve to satisfy any assessment for
such Taxes for such years. All federal income Tax Returns and
all other Tax Returns filed by each of the Company and its
subsidiaries with respect to Taxes are true and correct in all
material respects. Copies of all federal, state and foreign
income Tax Returns for the three years preceding the Closing
Date that are true, complete and correct in all material
respects have been previously provided or made available to TCM.
Neither the IRS nor any other taxing authority or agency is now
asserting or, to the Company’s knowledge, threatening to
assert against the Company or any of its subsidiaries any
deficiency or claim for material additional Taxes which have not
been paid. There are no requests for information from the IRS or
any other taxing authority or agency currently outstanding.
There are no pending audits of the Company or any of its
subsidiaries by any taxing authority nor, to the Company’s
knowledge, are any proceedings (whether administrative or
judicial) currently being conducted with respect to any issues
relating to Taxes. No Tax claim has become a lien on any assets
of the Company or any of its subsidiaries. Neither the Company
nor any of its subsidiaries is required to include in income
(i) any material items in respect of any change in
accounting methods or (ii) any gain with respect to
installment sales.
(b) (i) Neither the Company nor any of its
subsidiaries has any liability for any accumulated earnings tax
or personal holding company tax; (ii) there are no waivers
or extensions of any applicable statute of limitations for the
assessment or collection of Taxes with respect to any Tax Return
that relates to the Company or any of its subsidiaries that
remain in effect; (iii) there are no Tax rulings or closing
agreements relating to the Company or any of its subsidiaries
that would affect its or any of their liability for Taxes for
any period after the Effective Time; and (iv) neither the
Company nor any of its subsidiaries has any liability for Taxes
of any person (other than the Company and its subsidiaries)
under Treasury Regulation Section 1.1502-6 or any
similar state, local or foreign provision.
(c) Neither the Company nor any of its subsidiaries is a
party to any agreement (written or oral) providing for the
allocation or sharing of, or indemnification from, Taxes with
any party other than the Company and/or one or more of its
subsidiaries.
(d) Each of the Company and its subsidiaries has withheld
from each payment made to any of its past or present employees,
officers or directors, or any other person, the amount of all
material Taxes and other deductions required to be withheld
therefrom and paid the same to the proper taxing authorities
within the time required by Law, including , without limitation,
withholding Taxes on Options exercised prior to the Closing.
19
(e) The Company is not, nor was it any time during the
five-year period ending on the date on which the Effective Time
occurs, a “United States real property holding
corporation” within the meaning of Section 897(c) of
the Code.
(f) Neither the Company nor any of its subsidiaries has any
excess loss accounts or deferred intercompany gain.
(a) All of the current and past operations of the Company,
its subsidiaries and the Assets, including any operations at or
from any real property owned, used, leased, occupied, managed or
operated by the Company or any of its subsidiaries (the
“Company Real Property”), comply and have at all times
during the Company’s ownership, use or operation thereof
complied in all material respects with all applicable
Environmental Laws. Neither the Company nor any of its
subsidiaries, or, to the knowledge of the Company, any other
person, has engaged in, authorized, allowed or suffered any
operations or activities upon any of the Company Real Property
for the purpose of or in any way involving the handling,
manufacture, treatment, processing, storage, use, generation,
release, discharge, emission, dumping or disposal of any
Hazardous Substances at, on or under the Company Real Property,
except in compliance with all applicable Environmental Laws.
(b) Neither the Assets nor the Company Real Property
contain any Hazardous Substances in, on, over, under or at it in
concentrations which would presently violate Environmental Laws
or impose liability or obligations on the present or former
owner, manager, or operator of the Company Real Property under
the Environmental Laws for any investigation, corrective action,
remediation or monitoring of Hazardous Substances in, on, over,
under or at the Company Real Property. None of the Company Real
Property is listed or proposed for listing on the National
Priorities List pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act (“CERCLA”),
42 U.S.C. Section 9601 et seq., or any similar
inventory of sites requiring investigation or remediation
maintained by any state. Neither the Company nor any of its
subsidiaries has received any notice, whether oral or written,
from any Governmental Entity or other person of any actual or
threatened Environmental Liabilities with respect to the
Company, its subsidiaries, the Company Real Property or the
Assets or the conduct of the business of the Company or any of
its subsidiaries.
(c) There are no underground storage tanks, asbestos or
asbestos containing materials, polychlorinated biphenyls, urea
formaldehyde, or other Hazardous Substances (other than small
quantities of Hazardous Substances stored and maintained in
accordance and compliance with all applicable Environmental Laws
for use in the ordinary course of business of the Company and
its subsidiaries) in, on, over, under or at any presently owned,
managed or operated Company Real Property.
(d) To the knowledge of the Company, there are no
conditions existing at any Company Real Property or with respect
to the Assets, that require, or which with the giving of notice
or the passage of time or both may require remedial or
corrective action, removal or closure pursuant to the
Environmental Laws.
(e) The Company has provided or made available to TCM all
material environmental reports, assessments, audits, studies,
investigations, data and other material written environmental
information in its custody, possession or control concerning the
Company, its subsidiaries, the Assets or the Company Real
Property.
(f) Neither the Company nor any of its subsidiaries has
contractually, or to the knowledge of the Company, by operation
of law, by the Environmental Laws, by common law or otherwise
assumed or succeeded to any Environmental Liabilities of any
predecessors or any other person.
20
correct copy of all agreements between the Company and the
Company Financial Advisor, pursuant to which such firm would be
entitled to any payment relating to the transactions
contemplated by this Agreement.
21
(a) Except for (i) the representations and warranties
contained in Article IV, (ii) in connection with any
information supplied by TCM for inclusion in the Form S-4
and (iii) the representations and warranties contained in
the Xxxx Side Letter, the Company acknowledges that neither TCM
nor any other person makes any express or implied representation
or warranty with respect to TCM or its subsidiaries, the
business of TCM and its subsidiaries or otherwise or with
respect to any other information provided to the Company,
whether on behalf of TCM or such other persons, including the
success or profitability of the ownership, use or operation of
the business of TCM and its subsidiaries Business after the
Closing.
(b) In connection with the Company’s investigation of
the Assets and the business of TCM and its subsidiaries, the
Company may have received or may receive from or on behalf of
TCM or its subsidiaries certain projections or forward-looking
statements, including projected statements of operating revenues
and income from operations. The Company acknowledges that there
are uncertainties inherent in attempting to make such estimates,
projections and other forecasts and plans, that the Company is
familiar with such uncertainties, that the Company is taking
full responsibility for making its own evaluation of the
adequacy and accuracy of all estimates, projections and other
forecasts and plans so furnished to it, and that the Company, in
the absence of fraud, or except as provided in the next
sentence, shall have no claim against TCM or any of its
subsidiaries or any other person acting on their behalf with
respect thereto whether before or after the execution and
delivery of this Agreement or the Closing Date. Accordingly,
neither TCM nor its subsidiaries make any representation or
warranty with respect to such estimates, projections,
forward-looking statements and other forecasts and plans, except
that TCM and its subsidiaries had a reasonable basis to make
such estimates, projections, forward-looking statements and
other forecasts and plans. Notwithstanding the preceding
sentence, nothing in this Section 3.24(b) shall be
construed to limit the representations and warranties of the
Company set forth in Sections 3.06, 3.07, 3.09, 3.10 and
3.18.
ARTICLE IV.
TCM and Merger Sub represent and warrant to the Company, subject
to such qualifications and exceptions as are disclosed in
writing in the applicable parts of the disclosure letter
delivered by TCM to the Company concurrently herewith (the
“TCM Disclosure Letter”). The TCM Disclosure Letter
shall be arranged in paragraphs corresponding to the numbered
and lettered paragraphs in this Article IV and the
22
disclosure in any paragraph shall qualify other paragraphs in
this Article IV only to the extent that it is specifically
indicated in such paragraph.
23
(a) Each of TCM and Merger Sub has all necessary corporate
power and authority to execute and deliver this Agreement and
each of the Ancillary Agreements to which it is a party and
(subject to the receipt of the consents described in
Section 4.06(b) hereof) to perform its obligations
hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of
this Agreement and the Ancillary Agreements to which it is a
party by TCM and Merger Sub, and the consummation by TCM and
Merger Sub of the transactions contemplated hereby and thereby,
have been duly and validly authorized by all necessary corporate
action on the part of TCM and Merger Sub, as the case may be,
and no other corporate proceedings on the part of TCM or Merger
Sub are necessary to authorize this Agreement or any of the
Ancillary Agreements or to consummate the transactions so
contemplated. This Agreement has been, and the Ancillary
Agreements will be, duly and validly executed and delivered by
TCM and Merger Sub and, assuming the due authorization,
execution and delivery of this Agreement and the Ancillary
Agreements by each of the other parties hereto and thereto,
constitutes, or, in the case of the Ancillary Agreements, will
constitute, legal, valid and binding obligations of TCM and
Merger Sub, enforceable against TCM and Merger Sub in accordance
with their respective terms.
(b) The board of directors of Merger Sub (i) has
declared that this Agreement, the Merger, the Ancillary
Agreements to which it is party and the other transactions
contemplated hereby and thereby are advisable and in the best
interests of its stockholder and (ii) has authorized,
approved and adopted this Agreement, the Ancillary Agreements to
which it is party, the Merger and the other transactions
contemplated hereby and thereby.
(c) The TCM Special Committee and the TCM Board
(i) have unanimously declared that this Agreement, the
Merger, the Ancillary Agreements and the other transactions
contemplated hereby and thereby are advisable, fair to and in
the best interests of the stockholder of TCM and (ii) have
unanimously authorized, approved and adopted this Agreement, the
Ancillary Agreements, the Merger and the other transactions
contemplated hereby and thereby.
(d) The sole stockholder of TCM and the sole stockholder of
Merger Sub have authorized, approved and adopted this Agreement,
the Ancillary Agreements, the Merger and the other transactions
contemplated hereby and thereby.
(a) The execution and delivery of this Agreement and the
Ancillary Agreements by TCM and Merger Sub do not, and the
performance of this Agreement and the Ancillary Agreements by
TCM and Merger Sub and the consummation by TCM and Merger Sub of
the transactions contemplated hereby and thereby will not,
(i) conflict with or violate the organizational documents
of TCM or Merger Sub, (ii) conflict with or violate any Law
applicable to TCM or Merger Sub or by which any of their
respective properties is bound or affected or
(iii) conflict with, result in any breach of, or constitute
a default (or an event that with notice or lapse of time or both
would become a default) under, or impair TCM’s or Merger
Sub’s rights or alter the rights or obligations of any
third party under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the
creation of an Encumbrance (other than a Permitted Encumbrance)
on any of the material properties or assets of TCM or Merger Sub
pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument
or obligation to which TCM or Merger Sub is a party or by which
TCM or Merger Sub or any of their respective properties is bound
or affected except, in the case of clauses (ii) and (iii),
for such conflicts, breaches, violations, defaults, impairments
or alterations that would not prevent or delay consummation of
the Merger, or otherwise prevent or delay TCM or Merger Sub from
performing its obligations under this Agreement.
(b) Except as set forth in Section 4.06(b) of the TCM
Disclosure Letter, the execution and delivery of this Agreement
and the Ancillary Agreements by TCM and Merger Sub do not, and
the performance of this Agreement and the Ancillary Agreements
by TCM and Merger Sub and the consummation by
24
TCM and Merger Sub of the transactions contemplated hereby and
thereby will not, require any waiver, consent, approval,
authorization or permit of, or filing with or notification to,
any Governmental Entity or other third party, except
(i) for applicable requirements of the Securities Act, the
Exchange Act, Blue Sky Laws, and the rules and regulations of
Nasdaq, (ii) for the filing of the Articles of Merger as
required by Georgia Law, and (iii) where the failure to
obtain such consents, approvals, authorizations or permits, or
to make such filings or notifications, would not prevent or
delay consummation of the Merger, or otherwise prevent or delay
TCM or Merger Sub from performing its obligations under this
Agreement.
(a) Each of TCM and its subsidiaries, and each of its and
its subsidiaries’ properties and operations, are in
compliance with all Laws, applicable to TCM or any of its
subsidiaries or by which any of its or any of its
subsidiaries’ properties or operations is bound or
affected, except where any such non-compliance would not have a
TCM Material Adverse Effect. Neither TCM nor any of its
subsidiaries has received any notice or other communication
(whether written or oral) from any Governmental Entity regarding
any actual, alleged, possible or potential violation of, or any
failure to comply with, any Law, except where any such violation
or failure to comply would not have a TCM Material Adverse
Effect.
(b) Each of TCM and its subsidiaries possesses all permits,
licenses, consents, franchises, orders, approvals,
certifications, registrations and authorizations from
Governmental Entities necessary to enable it to continue to own,
lease, operate and use its assets and properties and conduct its
business as presently conducted, including all permits,
licenses, consents, franchises, orders, approvals,
certifications, registrations and authorizations required under
applicable Environmental Laws (collectively, the “TCM
Permits”), except where the failure to possess any of the
foregoing would not have a TCM Material Adverse Effect. All of
the TCM Permits are valid and in full force and effect, except
where any such invalidity would not have a TCM Material Adverse
Effect, and there is no proceeding pending to revoke, cancel,
rescind, refuse to renew in the ordinary course or modify any of
the TCM Permits. Each of TCM and its
25
subsidiaries is in compliance with the terms and conditions of
the TCM Permits and with all material requirements, standards
and procedures of the Governmental Entities that issued them,
and with any limitation or, to the knowledge of TCM, proposed
limitation on any TCM Permit, except where such non-compliance
would not have a TCM Material Adverse Effect, and TCM has no
reasonable basis to believe that the business will not remain
capable of continued operation consistent with past practice and
in compliance with the terms and conditions of the TCM Permits
following consummation of the transactions contemplated by this
Agreement.
(a) No employee or former employee of TCM or any of its
subsidiaries is owed any wages, benefits or other compensation
for past services (other than wages, benefits and compensation
accrued in the ordinary course of business during the current
pay period and accrued vacation).
(b) There are no labor disputes, including, without
limitation, charges of unfair labor practices within the meaning
of the National Labor Relations Act, pending or, to the
knowledge of TCM, threatened against TCM or any of its
subsidiaries by any of its employees. Neither TCM nor any of its
subsidiaries, within the past five years, has or is knowingly
engaged in any unfair labor practices within the meaning of the
National Labor Relations Act, except where such actions would
not have a TCM Material Adverse Effect. Neither TCM nor any of
its subsidiaries is presently a party to, or is bound by, any
collective bargaining agreement or union contract with respect
to any persons employed by TCM or any of its subsidiaries, and
no collective bargaining agreement is being negotiated by TCM or
any of its subsidiaries. To the knowledge of TCM, no organizing
activities are presently being made or are threatened by or on
behalf of any labor union with respect to any employees of TCM
or any of its subsidiaries. TCM has no
26
knowledge of any strikes, slowdowns, work stoppages or lockouts,
or threats thereof, by or with respect to any employees of TCM
or any of its subsidiaries, and there have been no such strikes,
slowdowns, work stoppages or lockouts within the past three
years. Each of TCM and its subsidiaries is in compliance with
all applicable Laws relating to employment and employment
practices, workers’ compensation, terms and conditions of
employment, worker safety, wages and hours and the Worker
Adjustment and Retraining Notification Act, except where such
non-compliance would not have a TCM Material Adverse Effect.
There has been no harassment, discrimination, retaliatory act or
similar claim against any officer, director or employee of TCM
or any of its subsidiaries at any time during the past three
years, except where any such action would not have a TCM
Material Adverse Effect.
(a) Each of TCM and its subsidiaries, and any consolidated,
combined, unitary or aggregate group for Tax purposes of which
TCM or any of its subsidiaries is a member, have timely filed
all United States federal income Tax Returns and all other Tax
Returns required to be filed by them or any of them (taking into
account applicable extensions), and have timely paid and
discharged all material Taxes required to be paid (whether or
not shown on such Tax Returns), other than Taxes the payment of
which is being contested in good faith by appropriate
proceedings. The most recent TCM Financial Statements reflect,
with respect to any liability for Taxes of TCM and its
subsidiaries for any years ended on or before the date of such
TCM Financial Statements and either not finally determined or
with respect to which the applicable statute of limitations has
not expired, an adequate reserve to satisfy any assessment for
such Taxes for such years. All federal income Tax Returns and
all other Tax Returns filed by or with respect to each of TCM
and its subsidiaries with respect to Taxes are true and correct
in all material respects. Copies of all federal, state and
foreign income Tax Returns of or with respect to TCM and its
subsidiaries for the three years preceding the Closing Date that
are true, complete and correct in all material respects have
been previously provided or made available to the Company.
Neither the IRS nor any other taxing authority or agency is now
asserting or, to TCM’s knowledge, threatening to assert
against TCM or any of its subsidiaries any deficiency or claim
for material additional Taxes which have not been paid. There
are no requests for information from the IRS or any other taxing
authority or agency currently outstanding with respect to Taxes
of or with respect to TCM or any of its subsidiaries. There are
no pending audits of TCM or any of its subsidiaries by any
taxing authority nor, to TCM’s knowledge, are any
proceedings (whether administrative or judicial) currently being
conducted with respect to any issues relating to Taxes. No Tax
claim has become a lien on any assets of TCM or any of its
subsidiaries. Neither TCM nor any of its subsidiaries is
required to include in income (i) any material items in
respect of any change in accounting methods or (ii) any
gain with respect to installment sales.
(b) (i) Neither TCM nor any of its subsidiaries has
any liability for any accumulated earnings tax or personal
holding company tax; (ii) there are no waivers or
extensions of any applicable statute of limitations for the
assessment or collection of Taxes with respect to any Tax Return
that relates to TCM or any of its subsidiaries that remain in
effect; (iii) there are no Tax rulings or closing
agreements relating to TCM or any of its subsidiaries that would
affect its or any of their liability for Taxes for any period
after the Effective Time; and (iv) neither TCM nor any of
its subsidiaries has any liability for Taxes of any person
(other than TCM and its subsidiaries) under Treasury
Regulation Section 1.1502-6 or any similar state,
local or foreign provision.
(c) Neither TCM nor any of its subsidiaries is a party to
any agreement (written or oral), except for the Tax Sharing
Agreement, providing for the allocation or sharing of, or
indemnification from, Taxes with any party other than TCM and/or
one or more of its subsidiaries.
(d) Each of TCM and its subsidiaries has withheld from each
payment made to any of its past or present employees, officers
or directors, or any other person, the amount of all material
Taxes and other deductions required to be withheld therefrom and
paid the same to the proper taxing authorities within the time
required by Law.
27
(e) TCM is not, nor was it any time during the five-year
period ending on the date on which the Effective Time occurs, a
“United States real property holding corporation”
within the meaning of Section 897(c) of the Code.
(f) Neither TCM nor any of its subsidiaries has any excess
loss accounts or deferred intercompany gain.
(a) All of the current and past operations of TCM, its
subsidiaries and the Assets, including any operations at or from
any real property presently owned, used, leased, occupied,
managed or operated by TCM or any of its subsidiaries (the
“TCM Real Property”), comply and have at all times
during TCM’s ownership, use or operation thereof complied
in all material respects with all applicable Environmental Laws.
Neither TCM nor any of its subsidiaries, or, to the knowledge of
TCM, any other person, has engaged in, authorized, allowed or
suffered any operations or activities upon any of TCM Real
Property for the purpose of or in any way involving the
handling, manufacture, treatment, processing, storage, use,
generation, release, discharge, emission, dumping or disposal of
any Hazardous Substances at, on or under TCM Real Property,
except in compliance with all applicable Environmental Laws.
(b) Neither the Assets nor TCM Real Property contain any
Hazardous Substances in, on, over, under or at it in
concentrations which would presently violate Environmental Laws
or impose liability or obligations on the present or former
owner, manager, or operator of TCM Real Property under the
Environmental Laws for any investigation, corrective action,
remediation or monitoring of Hazardous Substances in, on, over,
under or at TCM Real Property. None of TCM Real Property is
listed or proposed for listing on the National Priorities List
pursuant to CERCLA, or any similar inventory of sites requiring
investigation or remediation maintained by any state. Neither
TCM nor any of its subsidiaries has received any notice, whether
oral or written, from any Governmental Entity or other person of
any actual or threatened Environmental Liabilities with respect
to TCM, its subsidiaries, TCM Real Property or the Assets or the
conduct of the business of TCM or any of its subsidiaries.
(c) There are no underground storage tanks, asbestos or
asbestos containing materials, polychlorinated biphenyls, urea
formaldehyde, or other Hazardous Substances (other than small
quantities of Hazardous Substances stored and maintained in
accordance and compliance with all applicable Environmental Laws
for use in the ordinary course of business of TCM and its
subsidiaries) in, on, over, under or at any presently owned,
managed or operated TCM Real Property.
(d) To the knowledge of TCM, there are no conditions
existing at any TCM Real Property or with respect to the Assets,
that require, or which with the giving of notice or the passage
of time or both may require remedial or corrective action,
removal or closure pursuant to the Environmental Laws.
(e) TCM has provided to the Company all material
environmental reports, assessments, audits, studies,
investigations, data and other material written environmental
information in its custody, possession or control concerning
TCM, its subsidiaries, the Assets or TCM Real Property.
(f) Neither TCM nor any of its subsidiaries has
contractually, or to the knowledge of TCM, by operation of law,
by the Environmental Laws, by common law or otherwise assumed or
succeeded to any Environmental Liabilities of any predecessors
or any other person.
28
any of TCM’s or its subsidiaries’ assets or
properties, is bound or subject (collectively, the “TCM
Material Contracts”):
(a) any agreement or series of related agreements requiring aggregate payments by or to the Company or any of its subsidiaries of more than $100,000; | |
(b) any agreement with or for the benefit of any current or former officer or director, holder of any security, employee or consultant of TCM or any of its subsidiaries under which TCM or any of its subsidiaries has any obligations as of the date hereof and that (i) involves an obligation of TCM or any of its subsidiaries to make payments exceeding $100,000 in any year, (ii) contains non-competition provisions imposing restrictions on TCM or an executive officer or key employee of TCM, or (iii) involves any severance or termination payments or other similar obligation; | |
(c) any agreement with any labor union or association representing any employee of TCM or any of its subsidiaries; | |
(d) any agreement for the purchase of any materials, supplies, equipment, merchandise or services that contains an escalation clause or that obligates TCM or any of its subsidiaries to purchase all or substantially all of its requirements of a particular product or service from a supplier or to make periodic minimum purchases of a particular product or service from a supplier, that is not terminable on not more than 30 days’ notice (without penalty or premium) and that involves future payments by TCM of more than $100,000; | |
(e) any agreement for the sale of any of the assets, properties or securities of TCM or any of its subsidiaries (other than in the ordinary course of business) or for the grant to any person of any option, right of first refusal or preferential or similar right to purchase any such assets, properties or securities; | |
(f) any agreement of surety, guarantee or indemnification, other than agreements in the ordinary course of business with respect to obligations in an aggregate amount not in excess of $150,000; | |
(g) any agreement with customers or suppliers for the sharing of fees, the rebating of charges or other similar arrangements; | |
(h) any agreement relating to the acquisition by TCM or any of its subsidiaries of any operating business or the capital stock of any other person; | |
(i) any agreement requiring the payment to any person of a brokerage or sale commission or a finder’s or referral fee (other than arrangements to pay commissions or fees to employees or agents in the ordinary course of business or as set forth in Section 4.09 of this Agreement); | |
(j) any agreement, note or other document relating to or evidencing outstanding indebtedness of TCM or any of its subsidiaries for borrowed money (including capitalized lease obligations) in excess of $100,000; | |
(k) any lease, sublease or other agreement under which TCM or any of its subsidiaries is lessor or lessee of any real property or equipment or other tangible property that involves the future payment by the Company of more than $100,000; | |
(l) any agreement with a change of control provision or otherwise requiring any consent, approval, waiver or other action by any person in connection with the Spin-off or the Merger; | |
(m) any phantom stock plan or bonus, incentive or similar agreement, arrangement or understanding; | |
(n) any agreement involving the assignment, transfer, license (whether as licensee or licensor), pledge or Encumbrance of intellectual property of TCM or any of its subsidiaries; | |
(o) any distribution or sales representative agreement or agreement appointing any agent; | |
(p) any other material agreement whether or not made in the ordinary course of business; and |
29
(q) any agreement that would be required to be filed as an exhibit to a periodic report if TCM was required to filed reports under the Exchange Act. |
True and complete copies of all written TCM Material Contracts
and true and complete summaries of all oral TCM Material
Contracts (and all amendments, waivers or other modifications
thereto) have been furnished to the Company. Each Material
Contract is valid, subsisting, in full force and effect and
binding upon TCM or any of its subsidiaries that is party
thereto and, to the knowledge of TCM, the other parties thereto
in accordance with its terms. Neither TCM nor any of its
subsidiaries is in default (and no condition exists that, with
notice or lapse of time or both, would constitute a default by
TCM or such subsidiary) under any Material Contract, which
default would give the other party the right to terminate or
modify such Material Contract or would accelerate any obligation
or payment by TCM, nor, to the knowledge of TCM, is any other
party to any Material Contract in default thereunder (or does
any condition exist that, with notice or lapse of time or both,
would constitute a default by any such party). None of the TCM
Material Contracts is currently being renegotiated, and the
validity, effectiveness and continuation of each of the TCM
Material Contracts will not be materially adversely affected by
the transactions contemplated by this Agreement, except as
otherwise listed on Section 4.17 of the TCM Disclosure
Letter. To the knowledge of TCM, no party to any of the TCM
Material Contracts has made, asserted or has any defense, setoff
or counterclaim under its Material Contract or has exercised any
option granted to it to cancel, terminate or shorten the term of
its Material Contract.
30
than as required under Section 4980B of the Code or
Part 6 of Title I of ERISA). Each such “employee
benefit plan” has received or will apply for a favorable
determination letter from the Internal Revenue Service (which
may be the favorable opinion letter of the master and prototype
or volume submitter plan sponsor of such plan).
(a) Except for (i) the representations and warranties
contained in Article III and (ii) in connection with
any information supplied by the Company for inclusion in the
Form S-4, TCM acknowledges that neither the Company nor any
other person makes any express or implied representation or
warranty with respect to the Company or its subsidiaries, the
business of the Company and its subsidiaries or otherwise or
with respect to any other information provided to TCM, whether
on behalf of the Company or such other persons, including the
success or profitability of the ownership, use or operation of
the business of the Company and its subsidiaries after the
Closing.
(b) In connection with TCM’s investigation of the
Assets and the business of the Company and its subsidiaries, TCM
may have received or may receive from or on behalf of the
Company or its subsidiaries certain projections or
forward-looking statements, including projected statements of
operating revenues and income from operations. TCM acknowledges
that there are uncertainties inherent in attempting to make such
estimates, projections and other forecasts and plans, that TCM
is familiar with such uncertainties, that TCM is taking full
responsibility for making its own evaluation of the adequacy and
accuracy of all estimates, projections and other forecasts and
plans so furnished to it, and that TCM, in the absence of fraud,
or except as provided in the next sentence, shall have no claim
against the Company or any of its subsidiaries or any other
person acting on their behalf with respect thereto whether
before or after the execution and delivery of this Agreement or
the Closing Date. Accordingly, neither the Company nor its
subsidiaries make any representation or warranty with respect to
such estimates, projections, forward-looking statements and
other forecasts and plans, except that the Company and its
subsidiaries had a reasonable basis to make such estimates,
projections, forward-looking statements and other forecasts and
plans. Notwithstanding the foregoing, nothing in this
Section 4.23(b) shall be construed to limit the
representations and warranties of TCM contained in
Sections 4.07, 4.08, 4.10, 4.11 and 4.18.
ARTICLE V.
31
subsidiaries has significant business relations. By way of
amplification and not limitation, except as set forth in
Section 5.01 of the Company Disclosure Letter or except as
shall be mutually agreed in writing by the parties, during the
period from the date of this Agreement and continuing until the
earlier to occur of the termination of this Agreement pursuant
to Article VII and 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 consent of TCM (which consent shall not be
unreasonably withheld or delayed), unless otherwise expressly
permitted under this Agreement:
(a) amend or otherwise change the Company Articles of Incorporation or Company By-Laws or any of the Company’s subsidiaries’ equivalent organizational documents; | |
(b) issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of capital stock of any class, or any options (including, without limitation, any Options), warrants, convertible or exchangeable securities, or other rights of any kind to acquire any shares of Company Capital Stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any of its subsidiaries or affiliates except (A) pursuant to the terms of Options that are outstanding as of the date of this Agreement, (B) upon conversion of the Company Preferred Stock outstanding as of the date of this Agreement and (C) new Options for the exercise of up to an aggregate of 150,000 shares of Company Common Stock; | |
(c) sell, lease, license, pledge, dispose of or encumber any assets of the Company or any of its subsidiaries (except (i) dispositions in the ordinary course of business and in a manner consistent with past practice and that, in the aggregate, are not material in amount and (ii) dispositions of obsolete or worthless assets); | |
(d) (i) amend or change the period (or permit any acceleration, amendment or change) of exercisability of any Options or (ii) authorize cash payments in exchange for any such Options (except for Options that are subject to agreements existing on the date hereof that provide for mandatory acceleration of vesting as a result of the Merger and that have not been waived); | |
(e) (i) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock, except that a wholly owned subsidiary of the Company may declare and pay a dividend to its parent, (ii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any shares of its capital stock or (iii) amend the terms of, repurchase, redeem or otherwise acquire any of its securities, or propose to do any of the foregoing; | |
(f) sell, transfer, license, sublicense or otherwise dispose of, or allow any rights to lapse with respect to, any intellectual property other than in the ordinary course of business or amend or modify any existing agreements with respect to any intellectual property, other than in the ordinary course of business, in each case so long as such action does not involve material intellectual property; | |
(g) (i) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof; (ii) incur any Indebtedness for Borrowed Money or other obligation or liability of any kind (other than accounts payable incurred in the ordinary course of business), or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances to any person, that exceed an aggregate of $5,000,000; (iii) enter into or amend any contract or agreement other than in the ordinary course of business; (iv) authorize or make any capital expenditures or purchase of fixed assets that, quarterly, exceed, $150,000 or, in the aggregate, exceed $250,000; (v) terminate any Material Contract or amend any of its material terms (other than amendments designed to remedy defaults thereunder); or (vi) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 5.01(g); |
32
(h) except as required by applicable Law or the terms of an agreement existing on the date hereof, increase the compensation, bonus or other benefits payable or to become payable to any of the Company’s or its subsidiaries’ officers, directors or employees, grant any severance or termination pay or rights to, or enter into any employment or severance agreement with, any of the Company’s or its subsidiaries’ officers, directors or employees, increase any benefits payable under existing severance or termination pay policies or employment agreements or establish, adopt, enter into or, except as required by law, terminate or amend, any Company Plan, except, in each case, for general increases, grants or agreements for non-executive employees in the ordinary course of business and in a manner consistent with past practice; | |
(i) take any action, other than in the ordinary course of business and in a manner consistent with past practice as required by changes in GAAP, to change accounting policies, principles, methods or practices (including, without limitation, procedures with respect to reserves, revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable); | |
(j) make any Tax election inconsistent with past practice or settle or compromise any Tax liability, in excess of the amount accrued in the most recent financial statements contained in the Company SEC Reports; | |
(k) (i) commence, pay, discharge, settle or satisfy any lawsuits, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the most recent financial statements contained in the Company SEC Reports or incurred in the ordinary course of business and consistent with past practice or (ii) waive any material benefits of any confidentiality, standstill or similar agreements to which the Company or any of its subsidiaries is a party; | |
(l) permit any material increase in the number of employees employed by the Company or any of its subsidiaries on the date hereof; | |
(m) terminate or fail to renew any material Company Permit; | |
(n) enter into any collective bargaining agreement or union contract with any labor organization or union; | |
(o) except in the ordinary course of business and in a manner consistent with past practice, accelerate or defer any material obligation or payment by or to the Company; or | |
(p) take or fail to take, or agree in writing or otherwise to take or fail to take, any of the actions described in Section 5.01(a) through (o) above, or that would result in any of the conditions to the Merger set forth in this Agreement not being satisfied. |
(a) Each of TCM and the Company shall cooperate and as
promptly as practicable prepare, and TCM shall file with the
SEC, a registration statement on Form S-4 (or other
appropriate form) for the purpose of registering under the
Securities Act TCM Common Stock issuable in the Merger
(including any amendment or supplements thereto, the
“Form S-4”). The Form S-4 shall contain a
prospectus relating to such issuance and the issuance of the TCM
Common Stock in the Spin-off and the Company Proxy Statement
with respect to the Company Stockholders’ Meeting. Each of
TCM and the Company shall use their respective reasonable best
efforts to have the S-4 cleared by the SEC and the Form S-4
declared effective by the SEC and to keep the Form S-4
effective as long as is necessary to consummate the Spin-off and
the Merger and any other transactions contemplated thereby. TCM
and the Company shall, as promptly as practicable after receipt
thereof, provide the other party copies of any written comments,
and advise the other party of any oral comments or
communications regarding the Form S-4 received from the
SEC. TCM and the Company shall cooperate and provide the other
with a reasonable opportunity to review and comment on any
amendment or supplement to the Form S-4 prior to filing the
33
same with the SEC, and such parties will provide promptly each
other with a copy of all such filings made with the SEC.
(b) Each of TCM and the Company covenant that the portions
of the Form S-4 concerning itself, its subsidiaries,
management, financial statements, business and the holders of
its capital stock (and in the case of the Company, the special
meeting of the shareholders of the Company) shall comply in all
material respects as to form with the provisions of the
Securities Act and the Exchange Act, and the rules and
regulations thereunder. Each of TCM and the Company shall
furnish all information concerning itself, its subsidiaries,
management, financial statements, business and the holders of
its capital stock and shall take all such other action as may be
reasonably requested in connection with the Form S-4. If at
any time prior to the Effective Time, either party determines
that the Form S-4 contains or is informed by the other
party that the information supplied by it for inclusion in the
Form S-4 contains an untrue statement of a material fact or
omits to state a material fact required to be stated therein in
order to make the statements therein in light of the
circumstances under which they were made not misleading, TCM and
the Company shall promptly prepare and TCM shall file an
amendment or supplement to the Form S-4 to correct the
untrue statement or omission and take all other appropriate
action in respect thereof. Each party will advise the other
party, promptly after it receives notice thereof, of the time
when the Form S-4 has become effective, the issuance of any
stop order, the suspension of the qualification of the TCM
Common Stock issuable in connection with the merger or saleable
in any jurisdiction or any request by the SEC for amendment of
the Form S-4.
(c) The Company shall, in accordance with Georgia Law and
the Company Articles of Incorporation and Company By-Laws, hold
a special meeting of the stockholders of the Company (after
having duly called and given notice of such meeting) (the
“Company Stockholders’ Meeting”), as promptly as
practicable after the execution of this Agreement, to consider
and vote upon the approval and adoption of the Company
Stockholder’s Action. Subject to Section 5.03(c), the
Company Special Committee and the Company Board shall recommend
the approval and adoption of the Company Stockholders’
Action by the stockholders of the Company and shall include such
recommendation in the Company Proxy Statement. Subject to
Section 5.03(c), the Company shall take all lawful action
to solicit from the stockholders of the Company proxies (in
compliance with this Section 5.02(b)) in favor of the
approval and adoption of the Company Stockholders’ Action
and to secure the vote of the stockholders of the Company
required by Georgia Law and the Company Articles of
Incorporation and Company By-Laws to approve and adopt the
Company Stockholders’ Action in accordance with the Company
Stockholders’ Vote Condition. As promptly as
practicable after the Company Proxy Statement contained in the
Form S-4 has been cleared by the SEC, the Company shall
mail the proxy statement/ prospectus/ information statement
contained in the Form S-4 to the Company Stockholders as of
the record date for the Company Stockholders’ Meeting.
(d) Each party shall advise the other parties hereto
promptly of the happening of any event which makes untrue any
statement of a material fact contained in the Form S-4 or
the Company Proxy Statement, as applicable.
(e) The Company shall take all actions necessary to comply
with Article 13 of Georgia Law.
(a) From the date hereof until the earlier of the
termination of this Agreement pursuant to Article VII or
the Effective Time, the Company and its subsidiaries will not,
and the Company and its subsidiaries will not permit or cause
any of their respective officers, directors, employees,
investment bankers, attorneys, affiliates, accountants and other
agents (collectively, the “Company Representatives”)
to, directly or indirectly: (i) initiate, solicit, seek,
encourage knowingly, entertain, support or take any action to
facilitate any inquiries or the making of any offer or proposal
which constitutes or is reasonably likely to lead to any
Takeover Proposal (as defined below); (ii) engage in
negotiations or discussions with, or provide any non-public
information or data concerning the Company to, any person (other
than TCM, Merger Sub and any of their affiliates or
representatives) relating to any Takeover Proposal, whether made
before or after the date of this Agreement or (iii) subject
to Section 5.03(c), enter into any letter of intent,
agreement in principle, acquisition agreement or any other
agreement with respect to any Takeover
34
Proposal; provided, however, that the Company may, in response
to an unsolicited bona fide written Takeover Proposal by any
person, provide such non-public information or data or engage in
negotiations or discussion with such person, if, prior to taking
such actions: (i) the proposal did not result from a breach
of this Section 5.03(a), (ii) the Company Special
Committee determines in good faith, after consultation with
legal counsel, that the failure to take such action is
reasonably likely to result in a breach of its fiduciary duties
under applicable Law, (iii) the Company Special Committee
determines in good faith that such Takeover Proposal is
reasonably likely to be or result in a Superior Proposal (as
defined below), (iv) the Company receives from such person
an executed confidentiality agreement, which is substantially
the same as the TCM Confidentiality Agreement, (v) the
Company has previously notified TCM of the Takeover
Proposal Interest (as defined below) in accordance with the
last sentence of this Section 5.03(a), and (vi) the
Company Stockholders’ Action has not been adopted and
approved in satisfaction of the Company Stockholders’
Vote Condition. Subject to Section 5.03(c), nothing
shall prevent the Company Board or Company Special Committee
from complying with Rule 14e-2 under the Exchange Act. The
Company agrees that it will take the necessary steps to promptly
inform the Company Representatives of the obligations undertaken
in this Section 5.03. From the date hereof until the
earlier of the termination of this Agreement pursuant to
Article VII and the Effective Time, the Company shall
notify TCM as promptly as practicable, and in any event not
later than the next business day, of any inquiries, expressions
of interest, requests for information or access to property,
books or records, proposals or offers relating to any Takeover
Proposal received by the Company, its officers or its directors
or, to the best of its knowledge, any other Company
Representatives, from any person that informs the Company that
it is considering making, or has made, a proposal relating to a
Takeover Proposal (a “Takeover
Proposal Interest”) indicating, in connection with
such notice, the name of the person who made such inquiries,
expressions of interest, requests, proposals or offers and the
material terms and conditions of any proposals or offers, and
thereafter shall keep TCM informed, on a current basis, of any
changes in the status and content of any such proposals or
offers. The Company will, and will cause its subsidiaries and
the officers, directors, employees and other agents of the
Company and its subsidiaries to, immediately cease and cause to
be terminated all discussions and negotiations, if any, that
have taken place prior to the date of this Agreement with any
parties (other than TCM and its subsidiaries) with respect to a
Takeover Proposal.
(b) As used in this Agreement, “Takeover
Proposal” shall mean (i) any proposal or offer for a
merger, share exchange, consolidation or other business
combination concerning the Company or any of its subsidiaries,
(ii) any proposal or offer to the Company or any of its
stockholders to acquire in any manner, directly or indirectly,
any material part of the assets or 10% or more of the equity
securities, as outstanding as of the date hereof, of the Company
or any of its subsidiaries, (iii) any proposal or offer
with respect to any recapitalization or restructuring concerning
the Company or any of its subsidiaries or (iv) any proposal
or offer with respect to any other transaction similar to any of
the foregoing relating to the Company or any of its
subsidiaries. For purposes of this Agreement, “Superior
Proposal” means a Takeover Proposal that involves at least
80% of the Company Capital Stock (or, if such Takeover Proposal
involves a transfer of the assets of the Company and its
subsidiaries, taken as a whole, at least 80% of the fair market
value of such assets) which the Company Special Committee
determines in good faith (taking into account all of the terms
and conditions of the Takeover Proposal, including any
conditions to consummation, break-up fees and expense
reimbursement provisions) to be more favorable and the value of
which exceeds the value of the Merger Consideration (it being
agreed that the Merger Consideration shall be deemed to include
such number of shares of TCM Common Stock as it would have
included pursuant to this Agreement had the transactions
consummated by this Agreement been consummated on the date on
which the Company Special Committee evaluates such Takeover
Proposal).
(c) From the date hereof until the termination of this
Agreement pursuant to Article VII, neither the Company
Board nor any committee thereof shall (i) withdraw, qualify
or modify or propose to withdraw, qualify or modify, in a manner
adverse to TCM, its approval or recommendation of the Company
Stockholders’ Action by the Company Board,
(ii) approve or recommend, or propose to approve or
recommend, a Superior Proposal, or (iii) cause the Company
to enter into any letter of intent, agreement in principle,
acquisition agreement or other agreement with respect to any
Superior Proposal unless (A) an
35
unsolicited, written Superior Proposal has been made and has not
been withdrawn, (B) the Company Special Committee has
complied with its obligations in Section 5.03(a),
(C) the Company Special Committee has concluded in good
faith, after consultation with legal counsel, that, in light of
such Superior Proposal, the failure of the Company Special
Committee to take any of the actions described in
Section 5.03(c) (i), (ii) or (iii) is reasonably
likely to result in a breach of its fiduciary duties to the
Company’s stockholders under applicable Law, (D) the
Company Stockholders Action has not been adopted and approved in
satisfaction of the Company Stockholders’
Vote Condition, (E) the Company Special Committee
provides TCM with at least five business days’ prior notice
of its proposal to take any of the actions described in
Section 5.03(c) (i), (ii) or (iii) during which
time TCM may make, and in such event the Company shall consider,
a counterproposal to such Superior Proposal, and the Company
shall and shall cause its legal advisors to, negotiate with TCM
with respect to the terms and conditions of any such
counterproposal, and (F) the Superior Proposal does not
impose any “break-up” or other fees (including,
without limitation, expense reimbursements) or options or rights
to acquire assets or securities, or any other obligations that
would survive the Effective Time, on the Company or any
subsidiary unless and until this Agreement is terminated in
accordance with its terms.
(d) If the Company Board or any committee
(i) withdraws, qualifies or modifies or proposes to
withdraw, qualify or modify, in a manner adverse to TCM, its
approval or recommendation of the Company Stockholders’
Action by the Company Board, (ii) approves or recommends,
or proposes to approve or recommend, a Superior Proposal, or
(iii) causes the Company to enter into any letter of
intent, agreement in principle, acquisition agreement or other
agreement with respect to any Superior Proposal, and in taking
any such action, has complied with Section 5.03(c), the
Company shall be relieved of its obligation under this Agreement
to duly call, give notice of, convene and hold, the Company
Stockholder’s Meeting to consider and vote upon the
approval and adoption of the Company Stockholders’ Action.
(e) From the date hereof until the earlier of the
termination of this Agreement pursuant to Article VII or
the Effective Time, TCM and its subsidiaries will not, and TCM
and its subsidiaries will not permit or cause any of their
respective officers, directors, employees, investment bankers,
attorneys, affiliates, accountants and other agents
(collectively, the “TCM Representatives”) to, directly
or indirectly: (i) initiate, solicit, seek, encourage
knowingly, entertain, support or take any action to facilitate
any inquiries or the making of any offer or proposal which
constitutes or is reasonably likely to lead to any TCM Takeover
Proposal (as defined below); (ii) engage in negotiations or
discussions with, or provide any non-public information or data
concerning TCM to, any person (other than the Company and any of
its affiliates or representatives) relating to any TCM Takeover
Proposal, whether made before or after the date of this
Agreement or (iii) enter into any letter of intent,
agreement in principle, acquisition agreement or any other
agreement with respect to any TCM Takeover Proposal; provided,
however, that TCM may, in response to an unsolicited bona fide
written TCM Takeover Proposal by any person, provide such
non-public information or data or engage in negotiations or
discussion with such person, if, prior to taking such actions:
(i) the proposal did not result from a breach of this
Section 5.03(e), (ii) the TCM Special Committee
determines in good faith, after consultation with legal counsel,
that the failure to take such action is reasonably likely to
result in a breach of its fiduciary duties under applicable Law,
(iii) the TCM Special Committee determines in good faith
that such Takeover Proposal is reasonably likely to be or result
in a TCM Superior Proposal (as defined below), (iv) TCM
receives from such person an executed confidentiality agreement,
which is substantially the same as the TCM Confidentiality
Agreement, and (v) TCM has previously notified the Company
of the TCM Takeover Proposal Interest (as defined below) in
accordance with the last sentence of this Section 5.03(e).
TCM agrees that it will take the necessary steps to promptly
inform the TCM Representatives of the obligations undertaken in
this Section 5.03. From the date hereof until the earlier
of the termination of this Agreement pursuant to
Article VII and the Effective Time, TCM shall notify the
Company as promptly as practicable, and in any event not later
than the next business day, of any inquiries, expressions of
interest, requests for information or access to property, books
or records, proposals or offers relating to any TCM Takeover
Proposal received by TCM, its officers or its directors or, to
the best of its knowledge, any other TCM Representatives, from
any person that informs TCM that it is considering making, or
has made, a proposal relating to a TCM Takeover Proposal (a
“TCM Takeover Proposal Interest”) indicating, in
connection
36
with such notice, the name of the person who made such
inquiries, expressions of interest, requests, proposals or
offers and the material terms and conditions of any proposals or
offers, and thereafter shall keep the Company informed, on a
current basis, of any changes in the status and content of any
such proposals or offers. TCM will, and will cause its
subsidiaries and the officers, directors, employees and other
agents of TCM and its subsidiaries to, immediately cease and
cause to be terminated all discussions and negotiations, if any,
that have taken place prior to the date of this Agreement with
any parties (other than the Company and its subsidiaries) with
respect to a TCM Takeover Proposal.
(f) As used in this Agreement, “TCM Takeover
Proposal” shall mean (i) any proposal or offer for a
merger, share exchange, consolidation or other business
combination concerning TCM or any of its subsidiaries,
(ii) any proposal or offer to TCM or its stockholder to
acquire in any manner, directly or indirectly, any material part
of the assets or 10% or more of the equity securities, as
outstanding as of the date hereof, of TCM or any of its
subsidiaries, (iii) any proposal or offer with respect to
any recapitalization or restructuring concerning TCM or any of
its subsidiaries or (iv) any proposal or offer with respect
to any other transaction similar to any of the foregoing
relating to TCM or any of its subsidiaries. For purposes of this
Agreement, “TCM Superior Proposal” means a Takeover
Proposal that involves at least 80% of the TCM Capital Stock
(or, if such Takeover Proposal involves a transfer of the assets
of the Company and its subsidiaries, taken as a whole, at least
80% of the fair market value of such assets) which the TCM
Special Committee determines in good faith (taking into account
all of the terms and conditions of the TCM Takeover Proposal,
including any conditions to consummation, break-up fees and
expense reimbursement provisions) to be more favorable and the
value of which exceeds 95% of the value of the common stock of
the Surviving Corporation.
(a) Upon reasonable notice during normal business hours,
each of TCM and the Company shall (and shall cause its
subsidiaries to) afford to the officers, employees, accountants,
counsel and other representatives of the other party reasonable
access, during the period from the date of this Agreement and
until the earlier of the termination of this Agreement and the
Effective Time, to all its properties, books, contracts,
commitments and records, and, during such period, each of TCM
and the Company shall (and shall cause its subsidiaries to)
furnish promptly to the other party all information concerning
its business, properties and personnel as such party may
reasonably request, and shall make available to such other party
the appropriate individuals (including attorneys, accountants,
other professionals, customers and suppliers) for discussion of
its business, properties and personnel as such party may
reasonably request.
(b) The parties acknowledge that TCM and the Company have
previously executed the TCM Confidentiality Agreement which will
continue in full force and effect in accordance with its terms.
(a) Subject to the terms of this Agreement, the Company and
TCM shall each use its commercially reasonable efforts to
(i) take, or cause to be taken, all actions, and do, or
cause to be done, and to assist and cooperate with the other
parties in doing, all things necessary, proper or advisable to
consummate and make effective the transactions contemplated
hereby as promptly as practicable, (ii) obtain from any
Governmental Entity or any other third party any consents,
licenses, permits, waivers, approvals, authorizations or orders
required to be obtained or made by the Company or TCM or any of
their respective subsidiaries in connection with the
authorization, execution and delivery of this Agreement, the
Ancillary Agreements and the consummation of the Merger and
transactions contemplated hereby and thereby, and (iii) as
promptly as practicable, make all necessary filings, and
thereafter make any other required submissions, with respect to
this Agreement and the Merger required under (A) the
Securities Act and the Exchange Act, and any other applicable
U.S. federal or state securities Laws, (B) the rules
and regulations of the National Association of Securities
Dealers Automated Quotation System and (C) any other
applicable Law. The Company and TCM shall cooperate with each
other in connection with the making of all such filings.
37
(b) Each of the Company and TCM shall give (or shall cause
their respective subsidiaries to give) any notices to third
parties, and use, and cause their respective subsidiaries to
use, their commercially reasonable efforts to obtain any third
party consents related to or required in connection with the
Merger that are (i) necessary to consummate the
transactions contemplated hereby, or (ii) required to
prevent a Company Material Adverse Effect from occurring prior
to or after the Effective Time.
(a) At the Effective Time, each outstanding Option, whether
vested or unvested, shall, by virtue of this Agreement and
without any further action of the Company, the Surviving
Corporation, TCM or the holder of any Option, be converted into
a stock option to purchase TCM Common Stock in a manner
consistent with Section 424 of the Code and as provided by
subsection (b) below, and, after the Effective Time,
all references to the Company in the Company Option Plan and the
applicable stock option agreements shall be deemed to refer to
the Surviving Corporation, which shall have retained the Company
Option Plan as of the Effective Time by virtue of this Agreement
and the Merger and without any further action, except that
references to shares of Company Common Stock shall be deemed to
be to TCM Common Stock in accordance with
subsection (b) below.
(b) Each Option so retained by the Surviving Corporation
under this Agreement shall continue to have, and be subject to,
the same terms and conditions set forth in the Company Option
Plan and the applicable stock option agreements as in effect
immediately prior to the Effective Time, except that
(i) such Option will be exercisable for that number of
shares of TCM Common Stock equal to the product of the number of
shares of Company Common Stock that were purchasable under such
Option immediately prior to the Effective Time multiplied by the
Common Stock Exchange Ratio, rounded down to the nearest whole
number of shares of TCM Common Stock and (ii) the per share
exercise price for the TCM Common Stock issuable upon exercise
of such assumed Option shall be equal to the quotient of
(x) the exercise price per share of Company Common Stock at
which such Option was exercisable immediately prior to the
Effective Time, divided by (y) the Common Stock Exchange
Ratio, rounding the resulting exercise price up to the next
whole cent. It is the intention of the parties that the Options
remaining outstanding following the Effective Time will qualify,
to the maximum extent permissible following the Effective Time,
as incentive stock options as defined in Section 422 of the
Code solely to the extent such Options qualified as incentive
stock options prior to the Effective Time.
(c) As soon as reasonably practicable after the Effective
Time, the Company will deliver to Option holders appropriate
notices setting forth such holders’ rights pursuant to the
Company Option Plan and the applicable stock option agreements
evidencing the Options and confirming that the Company Option
Plan and the Options have been converted in accordance with the
terms and conditions required by this Section 5.06. TCM
hereby agrees to register the TCM Common Stock underlying such
Options with the SEC on Form S-8 within ten
(10) business days subsequent to the Effective Time.
(a) The Company shall give prompt notice to TCM of
(i) the occurrence, or non-occurrence, of any event the
occurrence, or non-occurrence, of which would be likely to cause
any representation or warranty of the Company contained in this
Agreement to be untrue or inaccurate in any material respect and
(ii) any failure of the Company to materially comply with
or satisfy any covenant, condition or agreement to be complied
with or satisfied by it hereunder; provided, however, that the
delivery of any notice pursuant to this Section 5.07 shall
not limit or otherwise affect the remedies available hereunder
to TCM or Merger Sub.
(b) TCM shall give prompt notice to the Company of
(i) the occurrence, or non- occurrence, of any event the
occurrence, or non-occurrence, of which would be likely to cause
any representation or warranty of TCM contained in this
Agreement to be untrue or inaccurate and (ii) any failure
of TCM or Merger Sub materially to comply with or satisfy any
covenant, condition or agreement to be complied with or
satisfied by it hereunder; provided, however, that the delivery
of any notice pursuant to this Section 5.07 shall not limit
or otherwise affect the remedies available hereunder to the
Company.
38
(a) Except as otherwise specifically provided in this
Agreement, if the Merger is not consummated, all costs and
expenses incurred in connection with the negotiation of this
Agreement and the Ancillary Agreements, the taking of all
actions (including, without limitation, any due diligence
investigations) contemplated hereby and thereby, including,
without limitation, attorneys’ and accountants’ fees
and fees of any brokers, financial advisors, other advisors,
investment bankers or finders (collectively, the
“Transaction Expenses”), shall be paid by the party
incurring such costs or expenses. If the Merger is consummated,
all Transaction Expenses of the Company, including any amounts
that may become payable due to the execution of this Agreement
or the consummation of the Merger (i.e., change of control,
retention payments or similar fees) shall be the obligation of
TCM.
(b) The Company shall use its commercially reasonably
efforts to cause all persons (including, without limitation,
attorneys, accountants, brokers, financial advisors, other
advisors, investment bankers and finders), who have provided or
will provide the Company with services in connection with this
Agreement, the Merger, the Ancillary Agreements and the
transactions contemplated hereby and thereby, to submit to the
Company, no less than three business days prior to the Effective
Time, invoices with respect to all such services.
(a) From and after the Effective Time, the Surviving
Corporation (or its successors or assigns) shall fulfill and
honor the obligations of the Company pursuant to the
indemnification provisions in the Company Articles of
Incorporation and Company By-Laws existing as in effect on the
date of this Agreement with respect to the Company’s
directors and officers, which provisions shall not be amended,
repealed or otherwise modified for a period of six years from
the Effective Time in any manner that would affect adversely the
rights thereunder of persons who at any time prior to the
Effective Time were entitled to indemnification, advancement or
exculpation under the Company Articles of Incorporation and
Company By-Laws in respect of actions or omissions occurring at
or prior to the Effective Time (including, without limitation,
the transactions contemplated by this Agreement), unless such
modification is required by Law and prior notification is given
to such affected persons.
(b) The Surviving Corporation shall cause to be maintained
for a period of six years from the Effective Time the
Company’s current directors’ and officers’
insurance and indemnification policy and fiduciary liability
policy (“D&O Insurance”), provided that, the
Surviving Corporation may substitute therefor, at is election,
policies or financial guarantees with the same carriers or other
reputable and financially sound carriers of at least the same
coverage and amounts containing terms and conditions which are
no less advantageous that the existing D&O Insurance, to the
extent that such insurance policies provide coverage for events
occurring at or prior to the Effective Time for all persons who
are directors
39
and officers of the Company on the date of this Agreement (or
were prior to the date of this Agreement), so long as the annual
premium after the date of this Agreement for such D&O
Insurance during such six-year period would not exceed 300% of
the annual premium as of the date of this Agreement. If, during
such six-year period, such insurance coverage cannot be obtained
at all or can only be obtained for an amount in excess of 300%
of the annual premium therefor as of the date of this Agreement,
the Surviving Corporation shall use reasonable best efforts to
cause insurance coverage to be obtained for an amount equal to
300% of the current annual premium therefore, on terms and
conditions substantially similar to the existing D&O
Insurance. Set forth in Section 5.11(b) of the Company
Disclosure Letter is the amount of the annual premium currently
paid by the Company for its D&O Insurance.
(c) If any claim or claims shall, subsequent to the
Effective Time and within six years thereafter, be made in
writing against any present or former director or officer of the
Company based on or arising out of the services of such person
at or prior to the Effective Time in the capacity of such person
as a director or officer of the Company (and such director or
officer promptly shall have given the Surviving Corporation
written notice of such claim or claims within such six-year
period), the provisions of Sections 5.11(a) and
(b) respecting the rights to indemnify the current or
former directors or officers under the Company Articles of
Incorporation and Company By-Laws shall continue in effect until
the final disposition of all such claims.
(d) The provisions of this Section 5.11 are intended
to be for the benefit of, and shall be enforceable by each
indemnified party, his or her heirs and representative and may
not be amended, altered or repealed without the prior written
consent of the affected indemnified party.
(b) Prior to the Closing (or at such other times as
requested by counsel), TCM, Merger Sub and the Company shall
execute and deliver to King & Spalding LLP and Xxxxxxxx
Xxxxxxx LLP, tax representation letters (which will be used in
connection with the tax opinions contemplated by
Sections 6.02(f) and 6.03(d)) customary for transactions of
this type.
40
ARTICLE VI.
(a) Xxxx shall have transferred all of the membership interests of Xxxx Publishing, LLC to TCM; | |
(b) Xxxx and TCM have executed and delivered the Separation and Distribution Agreement and the Tax Sharing Agreement; | |
(c) Xxxx shall have completed the Spin-off; | |
(d) the Form S-4 shall have been declared effective by the SEC under the Securities Act and shall not be the subject of any stop order or proceedings seeking a stop order and all state securities or Blue Sky Laws necessary to carry out the transactions contemplated hereby shall have been obtained and be in effect; | |
(e) the Company Stockholders’ Action shall have been approved and adopted by the stockholders of the Company in satisfaction of the Company Stockholders’ Vote Condition at the Company Stockholders’ Meeting or by written consent in accordance with Georgia Law and the Company Articles of Incorporation; | |
(f) all other consents, approvals, orders or authorizations of, or registrations, declarations or filings with, any Governmental Entity required to consummate the Spin-off and to consummate the Merger shall have been filed, made or obtained, except for such consents, approvals, orders or authorizations that involve an immaterial amount of assets and that do not provide for any penalties or fines due to the failure to receive such consents, approvals, orders or authorizations (it being understood that the parties shall use commercially reasonable efforts to put in place a structure in order to provide Merger Sub and indirectly, TCM, with the benefit of such assets); | |
(g) all notices to, and consents, approvals or waivers of, all persons under the agreements, instruments or documents listed in Schedule 6.01(g) shall have been given or obtained in a form and manner reasonably acceptable to TCM and the Company; | |
(h) there shall not have been any action taken, or any Law enacted, promulgated, issued or deemed applicable to the Merger by any Governmental Entity, that would (i) prohibit the Surviving Corporation’s ownership or operation of all or a material portion of the Company’s business or assets, or compel the Surviving Corporation or TCM to dispose of or hold separately all or a material portion of the Company’s or TCM’s business or assets, as a result of the Merger; (ii) render TCM or Merger Sub unable to consummate the Merger; or (iii) impose or confirm material limitations on the ability of TCM or Merger Sub effectively to exercise full rights of ownership of shares of the capital stock of the Surviving Corporation, including without limitation, the right to vote any such shares on all matters properly presented to the stockholders of the Surviving Corporation; | |
(i) no judgment, order, injunction, decree or ruling issued by any Governmental Entity restraining, enjoining or otherwise prohibiting the consummation of the Merger shall have been issued and then be in effect (provided that the parties hereto shall use their commercially reasonable efforts to have any such judgment, order, injunction, decree or ruling vacated or lifted), nor shall there have been any Law enacted, enforced or deemed applicable to the Merger that makes the consummation of the Merger illegal; and | |
(j) the shares of TCM Common Stock to be issued or reserved that constitute the Merger Consideration shall be approved for listing on Nasdaq, subject to official notice of issuance. |
41
(a) The representations and warranties of the Company set forth in this Agreement shall be true and correct in all material respects (except for such representations and warranties that are qualified by their terms by a reference to materiality or to Company Material Adverse Effect, which representations and warranties as so qualified shall be true and correct in all respects) as of the Closing Date as though such representations and warranties were made on and as of the Closing Date, except for those representations and warranties that address matters only as of a particular date, which representations and warranties shall be true and correct in all material respects (except for such representations and warranties that are qualified by their terms by a reference to materiality or to Company Material Adverse Effect, which representations and warranties as so qualified shall be true and correct in all respects) only as of such date, and TCM shall have received a certificate signed on behalf of the Company by the Chief Executive Officer and Chief Financial Officer of the Company to such effect; | |
(b) the Company shall have performed or complied in all material respects with all agreements and covenants required by this Agreement and by each Ancillary Agreement to be performed or complied with by it on or prior to the Effective Time, and TCM shall have received a certificate signed on behalf of the Company by the Chief Executive Officer and Chief Financial Officer of the Company to such effect; | |
(c) Company Stockholders entitled to receive, in the aggregate, not more than 5% of the Merger Consideration shall have demanded appraisal for their shares in accordance with Article 13 of Georgia Law; | |
(d) at or prior to the Effective Time, the Existing Stockholder Agreement shall have been terminated, and TCM shall have received evidence of such termination reasonably satisfactory to it; | |
(e) all corporate actions, proceedings, instruments, and documents required to carry out the transactions contemplated hereby or incidental hereto and all other related legal matters shall have been reasonably satisfactory to and approved by counsel for TCM and such counsel shall have been furnished with such certified copies of such corporate actions and proceedings and such other instruments and documents as it shall have reasonably requested; and | |
(f) TCM shall have received a legal opinion of King & Spalding LLP, dated as of the Closing Date, and subject to the customary assumptions and qualifications, to the effect that the Merger will qualify as a “reorganization” under Section 368(a) of the Code; | |
(g) the special committee of the Board of Directors of TCM and the Board of Directors of TCM shall have received the opinion of a nationally recognized independent valuation firm to the effect that, as of the date of such opinion, based upon and subject to the assumptions, factors and limitations set forth in such opinion, assuming the Spin-off, Merger and Refinancing have been consummated as proposed, immediately after giving effect to the Transaction and the Refinancing, and on a pro forma basis: (A) the fair value and present saleable value of TCM’s assets would exceed TCM’s stated liabilities and identified contingent liabilities, (B) TCM should be able to pay its debts as they become absolute and mature and (C) the capital remaining in TCM would not be unreasonably small for the business in which TCM is engaged, as management has indicated it is proposed to be conducted following the consummation of the Spin-off, Merger and the Refinancing (the “Solvency Opinion”); and | |
(h) Bull Run’s Indebtedness for Borrowed Money at the Effective Time shall not exceed $69.1 million plus any Indebtedness for Borrowed Money incurred by Bull Run pursuant to Section 5.01(g)(ii) (it being understood and agreed that the Cash Advance shall not be considered Indebtedness for Borrowed Money). |
42
(a) The representations and warranties of TCM set forth in this Agreement shall be true and correct in all material respects (except for such representations and warranties that are qualified by their terms by a reference to materiality or to TCM Material Adverse Effect, which representations and warranties as so qualified shall be true and correct in all respects) as of the Closing Date as though such representations and warranties were made on and as of the Closing Date, except for those representations and warranties that address matters only as of a particular date, which representations and warranties shall be true and correct in all material respects (except for such representations and warranties that are qualified by their terms by a reference to materiality or to TCM Material Adverse Effect, which representations and warranties as so qualified shall be true and correct in all respects) only as of such date, and the Company shall have received a certificate signed on behalf of TCM by the Chief Executive Officer and Chief Financial Officer of TCM to such effect; | |
(b) each of TCM and Merger Sub shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Closing Date, and the Company shall have received a certificate signed on behalf of TCM by the Chief Executive Officer and Chief Financial Officer of TCM to such effect; | |
(c) all corporate actions, proceedings, instruments and documents required to carry out the transactions contemplated hereby or incidental hereto and all other related legal matters shall have been reasonably satisfactory to and approved by counsel for the Company Special Committee and such counsel shall have been furnished with such certified copies of such corporate actions and proceedings and such other instruments and documents as it shall have reasonably requested; | |
(d) the Company shall have received a legal opinion of Xxxxxxxx Xxxxxxx LLP, dated as of the Closing Date, and subject to the customary assumptions and qualifications, to the effect that the Merger will qualify as a “reorganization” under Section 368(a) of the Code; | |
(e) the Company shall have received the written opinion of the Company Financial Advisor, in customary form and based on customary assumptions, to the effect that the Merger Consideration to be received by the Company Stockholders pursuant to the Merger is fair to the Company Stockholders from a financial point of view, which opinion shall not have been withdrawn; | |
(f) TCM and its subsidiaries shall have obtained policies of fire and casualty, liability and other forms of insurance in such amounts, with such deductibles and against such risks and losses as are, in TCM’s reasonable judgment, appropriate for the assets and properties of TCM and its subsidiaries and customary in TCM’s industry; | |
(g) TCM’s Indebtedness for Borrowed Money at the Effective Time shall not exceed $40.0 million, which shall include the amount of money that TCM is required to distribute to Xxxx pursuant to Section 6.5 of the Separation and Distribution Agreement; and | |
(h) the Company shall have received a copy of the Solvency Opinion, which shall be in form and substance reasonably satisfactory to the Company. |
43
ARTICLE VII.
(a) by mutual written consent duly authorized by the TCM Board, TCM Special Committee, board of directors of Merger Sub, the Company Board and the Company Special Committee; or | |
(b) by either the TCM Special Committee or the Company Special Committee, if a Governmental Entity shall have (i) issued a non-appealable final judgment, order, injunction, decree or ruling or taken any other action or (ii) enacted, enforced or deemed applicable to the Merger a Law in final form, in each case having the effect of permanently restraining, enjoining, prohibiting or making illegal the consummation of the Merger (provided that the party seeking to terminate pursuant to this Section 7.01(b) shall have used commercially reasonable efforts to have any such judgment, order, injunction, decree, ruling or other action vacated or lifted); or | |
(c) by the TCM Special Committee, (i) upon a breach of any representation, warranty, covenant or agreement of the Company set forth in this Agreement such that the conditions set forth in Section 6.02(a) or 6.02(b) would not be satisfied (a “Company Terminating Breach”), provided that, if such Company Terminating Breach is curable prior to the expiration of 30 days from notice to the Company of its occurrence through the exercise of the Company’s commercially reasonable efforts, and for so long as the Company continues to exercise such commercially reasonable efforts, the TCM Special Committee may not terminate this Agreement under this Section 7.01(c) until the expiration of such 15-day period (but in no event shall the preceding proviso be deemed to extend the date set forth in Section 7.01(e)), or (ii) if satisfaction of any of the conditions set forth in Section 6.02 is or becomes impossible (other than through the failure of TCM or the Merger Sub to comply with its obligations under this Agreement); or | |
(d) by the Company Special Committee, (i) upon a breach of any representation, warranty, covenant or agreement of TCM or Merger Sub set forth in this Agreement such that the conditions set forth in Section 6.03(a) or 6.03(b) would not be satisfied (a “TCM Terminating Breach”), provided that, if such TCM Terminating Breach is curable prior to the expiration of 30 days from notice to TCM of its occurrence through the exercise of TCM’s commercially reasonable efforts, and for so long as TCM continues to exercise such commercially reasonable efforts, the Company Special Committee may not terminate this Agreement under this Section 7.01(d) until the expiration of such 30-day period (but in no event shall the preceding proviso be deemed to extend the date set forth in Section 7.01(e)), or (ii) if satisfaction of any of the conditions set forth in Section 6.03 is or becomes impossible (other than through the failure of the Company to comply with its obligations under this Agreement); or | |
(e) by either the Company Special Committee or the TCM Special Committee, if the Merger has not been consummated by the 12-month anniversary of the execution of this Agreement (provided that the failure to consummate the Merger by such date was not the result of any act or failure to act by the party seeking to terminate this Agreement pursuant to this Section 7.01(e)); or | |
(f) by TCM, if the Company Board and the Company Special Committee shall have failed to recommend or shall be withdrawn, or modified or changed in a manner adverse to TCM its approval or recommendation of this Agreement or the Merger or shall have recommended a Superior Proposal, or the Company shall have entered into a definitive agreement in respect of a Takeover Proposal with a Person other than TCM or its subsidiaries (or the Company Board or the Company Special Committee resolves to do any of the foregoing); or |
44
(g) by the Company, if the Company Board and the Company Special Committee authorizes the Company, subject to complying with Section 5.03 of this Agreement, to enter into a binding agreement concerning a transaction that constitutes a Superior Proposal; | |
(h) by either the TCM Special Committee or the Company Special Committee, if the Stockholder Vote Condition shall not have been satisfied by reason of the failure to obtain the required vote at the Company Stockholders’ Meeting; | |
(i) by either TCM or the Company, if the Separation and Distribution Agreement is terminated; or | |
(j) by the Company, if any material amendment or modification of the Separation and Distribution Agreement to the disadvantage of TCM had been made or if the Separation and Distribution Agreement is breached in any material respect. |
ARTICLE VIII.
(a) If to TCM or Merger Sub:
Triple Crown Media, Inc. | |
0000 Xxxxxxxxx Xxxx | |
Xxxxxxx, Xxxxxxx 00000 | |
Fax No.: (000) 000-0000 | |
Attention: Xxxxx X. Xxxx |
With a copy to:
Proskauer Rose LLP | |
0000 Xxxxxxxx | |
Xxx Xxxx, Xxx Xxxx 00000 | |
Fax No.: (000) 000-0000 | |
Attention: Xxxxxx X. Xxxxxx, Esq. |
45
and:
Chorey, Taylor & Xxxx | |
0000 Xxxxxxxxx Xxxx, X.X. | |
Suite 0000, Xxx Xxxxx Xxxxxxxx | |
Xxxxxxx, Xxxxxxx 00000-0000 | |
Fax No.: (000) 000-0000 | |
Attention: Xxxx Xxxxxx, Esq. |
If to the Company:
Bull Run Corporation | |
Special Committee of the Board of Directors | |
1251 Avenue of the Americas | |
Xxxxx 000 | |
Xxx Xxxx, Xxx Xxxx 00000 | |
Fax No.: (000) 000-0000 | |
Attention: Xxxxxx X. Xxxxxxxx |
With a copy to:
Xxxxxxxxxx Helpern Syracuse & Hirschtritt LLP | |
000 Xxxxx Xxxxxx | |
Xxx Xxxx, Xxx Xxxx 00000-0000 | |
Fax No.: (000) 000-0000 | |
Attention: Xxxxxxx Xxxxxxxxx, Esq. |
and:
Xxxxxxxx Xxxxxxx LLP | |
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000 | |
Xxxxxxx, Xxxxxxx 00000 | |
Fax No.: (000) 000-0000 | |
Attention: Xxxxxx X. Xxxxx, Esq. |
46
determination that any term or other provision is invalid,
illegal or incapable of being enforced, the TCM Special
Committee and the Company Special Committee shall negotiate in
good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are
fulfilled to the extent possible.
Section 8.11 Governing
Law. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
Section 8.14 Jurisdiction;
Forum. Each of the parties hereto (i) consents to
submit itself to the non-exclusive personal jurisdiction of any
federal court located in the City of New York in the event any
dispute arises out of this Agreement or any of the transactions
contemplated by this Agreement and (ii) agrees that it will
not attempt to deny or defeat such personal jurisdiction by
motion or other request for leave from any such court.
47
(a) Terms for which meanings are defined in this Agreement
shall apply equally to the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine and feminine forms.
Words such as “herein,” “hereafter,”
“hereto,” “hereby” and
“hereunder,” when used with reference to this
Agreement, refer to this Agreement as a whole, unless the
context otherwise requires. The words “include”,
“includes,” “included,”
“including” and “such as” shall be construed
as if followed by the phrase “without being limited
to.” No distinction in interpretation shall be made between
the terms “shall” and “will.”
(b) As used herein, the words “knowledge” or
“known” shall mean, (i) with respect to the
Company, the actual knowledge (and not constructive) of Xxxxxx
X. Xxxxxx, Xxxxxxxxx X. Xxxxxxxx and Xxxxxx X.
Xxxxxxx, Xx., each in their capacity as an officer or
director of the Company, (ii) with respect to TCM, the
actual knowledge (and not constructive) of Xxxxxx X.
Xxxxxxx, Xx. and Xxxxx X. Xxxx, each in their capacity as
an officer or director of TCM, and in each case after any of the
foregoing individuals have made due and diligent inquiry as to
the matters which are the subject of the statements which are
“known” by the Company or TCM, as applicable, or made
to the “knowledge” of the Company or TCM, as
applicable.
[Signature page follows.]
48
TRIPLE CROWN MEDIA, INC. |
By: | /s/ Xxxxxx X. Xxxxxxx, Xx. |
|
|
Name: Xxxxxx X. Xxxxxxx, Xx. |
Title: | President and Chief Executive Officer |
BR ACQUISITION CORP. |
By: | /s/ Xxxxx X. Xxxx |
|
|
Name: Xxxxx X. Xxxx |
Title: | Treasurer and Secretary |
BULL RUN CORPORATION |
By: | /s/ Xxxxxxxxx X. Xxxxxxxx |
|
|
Name: Xxxxxxxxx X. Xxxxxxxx |
Title: | Vice President — Finance |
49
Disclosure Letters
Set forth below is a list briefly identifying the contents of the disclosure letter of Triple Crown
Media, Inc. (“TCM”), dated as of August 2, 2005:
• | a list of TCM’s subsidiaries; |
• | a list of all required consents; |
• | a list of certain changes or events; |
• | a list of certain liabilities incurred by TCM since June 30, 2005; |
• | a list of certain claims, suits, actions or proceedings; |
• | a list of certain contracts of TCM; and |
• | a list of certain encumbrances on TCM’s title to, or leasehold interests in, its properties. |
Set forth below is a list briefly identifying the contents of disclosure letter of Bull Run
Corporation (“Bull Run”), dated as of August 2, 2005:
• | a list of Bull Run’s subsidiaries; |
• | a list of the holders of Bull Run’s preferred securities; |
• | a list of each current or former employee, officer, director or consultant that holds an option, along with the number of shares subject to such option, the date of grant, the exercise price, the expiration date, the vesting schedule and whether such options qualify as incentive stock options; |
• | a list of all required consents; |
• | a list of certain changes or events; |
• | a list of certain liabilities incurred by Bull Run since May 31, 2005; |
• | a list of certain claims, suits, actions or proceedings; |
• | a list of all employee benefit plans of Bull Run; |
• | a list of certain matters related to Bull Run’s employee benefit plans; |
• | a list of liabilities under Bull Run’s employee benefit plans as a result of the transactions contemplated by the Agreement and Plan of Merger; |
• | a list of certain taxes of Bull Run; |
• | a list of certain encumbrances on Bull Run’s title to, or leasehold interests in, its properties; |
• | a list of certain insurance matters; |
• | a list of certain exceptions to the covenants of Bull Run regarding the conduct of its business between the period of signing and closing; and |
• | the amount of annual premiums paid by Bull Run for directors and officers insurance. |
Upon the request of the Securities and Exchange Commission, TCM will supplementally furnish (i) a
copy of TCM’s disclosure letter, dated as of August 2, 2005 and (ii) a copy of Bull Run’s
disclosure letter, dated as of August 2, 2005 to the Securities and Exchange Commission.