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Exhibit 2.1
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement"), made and
entered into this 2nd day of April, 1998, by and among Cleveland Indians
Baseball Company, Inc., an Ohio corporation (the "Company"), Cleveland Baseball
Corporation, an Ohio corporation ("CBC"), MJC Baseball, Inc., an Ohio
corporation ("MJC"), Ballpark Management Company, an Ohio corporation ("Ballpark
Management"), Cleveland Indians Baseball Company Limited Partnership, an Ohio
limited partnership (the "Partnership"), Xxxxxxx X. Xxxxxx, Trustee Under
Declaration of Trust dated April 23, 1987 (the "Xxxxxxx X. Xxxxxx Trust"),
Xxxxxxx X. Xxxxxx, Trustee of the Xxxxx X. Xxxxxx Marital Trust (the "Xxxxx X.
Xxxxxx Marital Trust"), and Xxxxxx X. Xxxxxx, an individual ("Xxxxxx");
WITNESSETH:
WHEREAS, the Company has been formed to acquire a controlling general
partnership interest in the Partnership and intends to sell its Class A Common
Shares, without par value ("Class A Common Shares"), in a registered initial
public offering (the "Offering"), pursuant to a Registration Statement on Form
S-1 (the "Registration Statement") to be filed with the Securities and Exchange
Commission (the "Commission") after the execution and delivery of this Agreement
by all parties hereto; and
WHEREAS, CBC is the 99.9% general partner of the Partnership and MJC is
the .1% limited partner of the Partnership; and
WHEREAS, the Company desires to acquire Ballpark Management through the
merger of Ballpark Management into the Company in exchange for the issuance of
Class B Common Shares, without par value, of the Company ("Class B Common
Shares") and Class A Common Shares and thereafter contribute to the Partnership
the assets, business, contract rights and liabilities related to the business of
Ballpark Management in exchange for an interest in the Partnership; and
WHEREAS, the Company desires to acquire MJC through the Merger of MJC
into the Company in exchange for cash and the issuance of Class A Common Shares
and Class B Common Shares; and
WHEREAS, the Company desires to acquire certain of CBC's interest as a
general partner in the Partnership with the proceeds of the Offering; and
WHEREAS, CBC desires to sell interests in the Partnership to the
Company as described above; and
WHEREAS, upon completion of the transactions described above, CBC and
the Company desire to amend and restate the Limited Partnership Agreement of the
Partnership to provide, among other things, that all of CBC's interest in the
Partnership will
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be as a limited partner and all of the Company's interest in the Partnership
will be as a general partner; and
WHEREAS, the parties desire that the foregoing transactions be
conditioned upon and be completed concurrently with completion of the Offering;
NOW, THEREFORE, the parties hereto, intending to be legally bound, in
consideration of the mutual premises contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, agree as follows:
ARTICLE I
REORGANIZATION
Section 1.1 REORGANIZATION TRANSACTIONS. At or immediately prior to the
Closing (defined below), each of the transactions set forth in this Section 1.1
shall be effected.
a. MERGER OF BALLPARK MANAGEMENT INTO THE COMPANY. Ballpark Management
shall be merged (the "Ballpark Management Merger") with and into the Company,
with the Company as the surviving corporation. In the Ballpark Management
Merger, (i) each issued and outstanding Common Share of Ballpark Management
shall be converted into the right to receive 22,816.67 Class B Common Shares
(with the total number of shares issued to a shareholder being rounded to the
nearest whole share); and (ii) each Class A Common Share issued and outstanding
immediately prior to the Ballpark Management Merger shall remain issued and
outstanding and unaffected by the Ballpark Management Merger. The Ballpark
Management Merger shall be effected by the filing by the Company of a
certificate of merger (the "Certificate of Merger") with the Ohio Secretary of
State which complies with Section 1701.81 of the Ohio Revised Code. The articles
of incorporation and regulations of the Company in effect immediately prior to
the filing of the Certificate of Merger shall be the articles of corporation and
regulations of the surviving corporation. The effect of the Merger shall be as
provided in Section 1701.82 of the Ohio Revised Code.
b. MERGER OF MJC INTO THE COMPANY. MJC shall be merged (the "MJC
Merger") with and into the Company, with the Company as the surviving
corporation. In the MJC Merger (i) each outstanding share of MJC shall be
converted into the right to receive (A) a number of Class A Common Shares equal
to the quotient of 6,043 divided by the number of common shares of MJC
outstanding immediately prior to the effective time of the MJC Merger, (B) a
number of Class B Common Shares equal to the quotient of 2,290 divided by the
number of common shres of MJC outstanding immediately prior to the effective
time of the MJC Merger, and (C) an amount of cash equal to the quotient of
55,800 divided by the number of common shares of MJC immediately prior to the
effective time of
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the MJC Merger, and (ii) each Class A Common Share issued and outstanding
immediately prior to the MJC Merger shall remain issued and outstanding and
unaffected by the MJC Merger. The MJC Merger shall be effected by the filing by
the Company of a certificate of merger with the Ohio Secretary of State which
complies with Section 1701.81 of the Ohio Revised Code and which may be the
Certificate of Merger used to effect the Ballpark Management Merger. The
articles of incorporation and regulations of the Company in effect immediately
prior to the filing of the certificate of merger shall be the articles of
incorporation and regulations of the surviving corporation.
c. CONTRIBUTION OF BALLPARK MANAGEMENT ASSETS, BUSINESS AND CONTRACT
RIGHTS TO THE PARTNERSHIP. Upon completion of the Merger, the Company shall
immediately transfer and contribute to the Partnership (the "Contribution") all
of the assets, business, contract rights and liabilities held by Ballpark
Management immediately prior to the Merger in exchange for 2,281,667 Units in
the Partnership (there being 12,333,333 total Partnership Units outstanding
after giving effect to the contribution). Each of CBC and the Company, as the
only partners of the Partnership prior to the Contribution, hereby agree and
consent to the Contribution and the issuance of such Partnership Units in
exchange therefor. Immediately following the Contribution (and prior to the
transactions described in Section 1.1(d)), the Company and CBC, as the only
partners of the Partnership, agree that the number of Partnership Units held by
them shall be as follows:
Partner Partnership Units
------- -----------------
The Company 2,294,000
CBC 10,039,333
Total: 12,333,333
The Contribution shall be effected by the execution and delivery by the Company
and the Partnership of one or more assignment instruments reasonably
satisfactory to the Company.
d. SALE OF PARTNERSHIP INTERESTS. Upon completion of the Contribution,
the Company immediately purchase from CBC and CBC shall immediately sell, convey
and transfer to the Company, 3,996,000 Partnership Units for a cash purchase
price per Unit equal to the initial public offering price per share of the Class
A Common Shares in the Offering, less the underwriting discount. If more than
4,000,000 Class A Common Shares are sold in the Offering pursuant to the
underwriters' over-allotment option or otherwise, the Company shall purchase
from CBC, at the same price per Unit, a number of Units in the Partnership
equal to the number of additional Class A Common Shares sold in the Offering .
The sale of the CBC partnership interests to the Company shall be effected by
the execution and delivery by CBC of an assignment instrument, in form and
substance reasonably satisfactory to the Company, against payment of the
purchase price therefor. Upon completion of the Partnership Interest Sale, the
Company and CBC shall enter into an Amended and Restated Agreement of Limited
Partnership for the Partnership to provide, among other things, that all of
CBC's interest in the Partnership upon completion of the transactions
contemplated by this
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Agreement shall be a limited partnership interest and all of the Company's
interest in the Partnership upon completion of the transactions contemplated by
this Agreement shall be a general partnership interest.
e. PAYMENT OF SUBSCRIPTION OBLIGATION. The entire amount of the
outstanding obligations of the Xxxxxxx X. Xxxxxx Trust, the Xxxxx X. Xxxxxx
Marital Trust (together, the "Trusts"), and Xxxxxx X. Xxxxxx under the
Subscription to Purchase Shares dated April 2, 1998 shall be paid in full.
ARTICLE II
CLOSING
Section 2.1 CLOSING. Completion of the transactions contemplated by
this Agreement (the "Closing") shall take place on the date of the closing of
the Offering (the "Closing Date") at the offices of Xxxxx & Xxxxxxxxx LLP, 3200
National City Center, Cleveland, Ohio, or at such other place as the Company
shall determine. The Closing shall be effected by the delivery or filing (in the
case of the Certificate of Merger) of the documents referred to in Section 1.1.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY,
BALLPARK MANAGEMENT AND MJC
Each of the Company, Ballpark Management and MJC represents and
warrants to each other party hereto as follows:
Section 3.1 ORGANIZATION AND STANDING. It is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Ohio.
Section 3.2 POWER AND AUTHORITY. It has all requisite power and
authority, corporate and otherwise, to conduct its business as presently
conducted, to execute and deliver this Agreement and to consummate the
transactions provided for herein.
Section 3.3 DUE AUTHORIZATION. The execution and delivery of this
Agreement and the consummation of the transactions provided for herein have been
duly authorized and approved by all necessary corporate action, and this
Agreement constitutes its legal, valid and binding agreement and obligation,
enforceable in accordance with the terms hereof.
Section 3.4 CONFLICTS; DEFAULTS. Neither the execution and delivery of
this Agreement by it nor the consummation of the transactions provided for
herein will violate, conflict with, or constitute a breach of or default under,
any of the terms of its articles of incorporation or regulations, or any
provision of, or result in the acceleration of any
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obligation under, any contract, lien, permit, lease, instrument, order,
judgment, decree or agreement to which it is a party or by which any of its
assets are bound, and will not constitute an event which, after notice or lapse
of time, or both, will result in such violation, conflict, breach, default or
acceleration.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP
The Partnership represents and warrants to each other party hereto as
follows:
Section 4.1 STATUS. The Partnership is a limited partnership validly
existing under the laws of the State of Ohio.
Section 4.2 POWER AND AUTHORITY. The Partnership has all requisite
power and authority, partnership and otherwise, to conduct its business as
presently conducted, to execute and deliver this Agreement and to consummate the
transactions provided for herein.
Section 4.3 DUE AUTHORIZATION. The execution and delivery of this
Agreement and the consummation of the transactions provided for herein have been
duly authorized and approved by all necessary partnership action, and this
Agreement constitutes the legal, valid and binding agreement and obligation of
the Partnership, enforceable in accordance with the terms hereof.
Section 4.4 CONFLICTS; DEFAULTS. Neither the execution and delivery of
this Agreement by the Partnership nor the consummation of the transactions
provided for herein will violate, conflict with, or constitute a breach of or
default under, any of the terms of the Original Partnership Agreement, or any
provision of, or result in the acceleration of any obligation under, any
contract, lien, permit, deed, lease, instrument, order, judgment, decree or
agreement to which the Partnership is a party or by which the Partnership is
bound, and will not constitute an event which, after notice or lapse of time, or
both, will result in such violation, conflict, breach, default or acceleration.
ARTICLE V
INVESTMENT REPRESENTATIONS
Section 5.1 The Shareholders (as defined below) represent and warrant
to the Company as follows:
(a) Each of the Xxxxxxx X. Xxxxxx Trust, the Xxxxx X. Xxxxxx Marital
Trust and Xxxxxx (the "Shareholders") is acquiring Class A or Class B Common
Shares of the Company in connection with the Ballpark Management Merger or the
MJC Merger and such shares are being acquired for such Shareholder's own account
and not directly or
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indirectly with a view to, or for sale in connection with, any distribution
thereof. Such Shareholder acknowledges that (i) such shares have not been
registered under the Securities Act of 1933 (the "Securities Act"), (ii) such
shares may not be resold unless they are subsequently registered under the
Securities Act, or an exemption from such registration is available, and (iii)
restrictive legends to that effect will be placed on the certificates
representing such shares.
(b) Each Shareholder is an accredited investor as such term is defined
in Regulation D under the Securities Act. In addition, (i) each Shareholder has
been granted the opportunity to ask questions of, and receive answers from,
representatives of the Company concerning the Company and the terms and
conditions of the Ballpark Management Merger and the MJC Merger contemplated by
this Agreement and to obtain any additional information that such Shareholder
deems necessary, and (ii) such Shareholder's knowledge and experience in
financial business matters is such that such Shareholder is capable of
evaluating the merits and risks of the investment in such shares.
ARTICLE VI
GENERAL PROVISIONS
Section 6.1 NOTICES. All notices or other communications provided for
herein to be given or sent to a party by another party shall be deemed validly
given or sent if in writing and mailed, postage prepaid, by registered or
certified United State mail, or if personally delivered, addressed to the
parties at their addresses set forth below. Any party may give notice to the
other parties at any time, by the method specified above, of a change in the
address at which, or the person to whom, notice is to be addressed.
Section 6.2 WAIVER. The failure of a party to enforce any term,
provision, or condition of this Agreement at any time or times shall not be
deemed a waiver of that term, provision, or condition for the future, nor shall
any specific waiver of a term, provision, or condition at one time be deemed a
waiver of such term, provision, or condition for any future time or times.
Section 6.3 PARTIES. This Agreement shall be binding upon, and shall
inure to the benefit of, the parties hereto and their successors and assigns.
Section 6.4 GOVERNING LAW. The validity, interpretation, and
performance of this Agreement shall be governed by the laws of the State of
Ohio, without giving effect to the principles of conflicts of laws thereof.
Section 6.5 CAPTIONS. The captions of this Agreement have been assigned
thereto for convenience only and shall not be construed to limit, define or
modify the substantive terms hereof.
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Section 6.6 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto concerning the subject matter hereof, and
supersedes all prior agreements, memoranda, correspondence, conversations and
negotiations.
Section 6.7 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in one or more counterparts which together shall constitute but one and the same
Agreement. This Agreement may be executed by the parties executing separate
counterpart signature pages, each of which may contain the signature of one or
more but fewer than all the parties.
CLEVELAND INDIANS BASEBALL COMPANY,
INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxx, President
CLEVELAND BASEBALL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxx, President
BALLPARK MANAGEMENT COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------------
Xxxxxxx X. Xxxxxx, President
MJC BASEBALL, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------------
Xxxxxx X. Xxxxxx, President
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CLEVELAND INDIANS BASEBALL COMPANY
LIMITED PARTNERSHIP
By: Cleveland Baseball Corporation,
its General Partner
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxx, President
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, Trustee Under Declaration of
Trust dated April 23, 1987
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, Trustee Under the
Xxxxx X. Xxxxxx Marital Trust
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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