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AGREEMENT AND PLAN OF MERGER
DATED AS OF JULY 20, 2007
BY AND AMONG
W. XXXXXX XXXXXXX, XXXXX X. XXXXXXXX,
NORTHSTAR CAPITAL INVESTMENT CORP.
AND
NORTHSTAR PARTNERSHIP, L.P.
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TABLE OF CONTENTS
PAGE
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ARTICLE I
THE MERGERS
Section 1.1 The Mergers......................................................2
Section 1.2 Closing..........................................................3
Section 1.3 Effective Times..................................................3
ARTICLE II
EFFECTS OF THE MERGERS; EXCHANGE OF SHARES
Section 2.1 Merger Consideration.............................................3
Section 2.2 Partnership Merger Consideration.................................5
Section 2.3 Organizational Documents.........................................5
Section 2.4 Directors and Officers of the Surviving Company..................6
Section 2.5 Payment for Securities...........................................6
Section 2.6 No Further Ownership Rights......................................9
Section 2.7 Dissenting NCIC Common Shares....................................9
Section 2.8 Further Assurances..............................................10
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF NCIC AND NSP
Section 3.1 Organization and Good Standing..................................11
Section 3.2 Capitalization..................................................11
Section 3.3 Authority; No Violations........................................12
Section 3.4 Governmental Approvals and Notices..............................12
Section 3.5 Assets..........................................................13
Section 3.6 Inapplicability of Takeover Statutes and Certain Charter and
Bylaw Provisions................................................13
Section 3.7 No Other Representations or Warranties..........................14
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER PARTIES
Section 4.1 Organization and Good Standing..................................14
Section 4.2 Authority; No Violations........................................15
Section 4.3 Governmental Approvals and Notices..............................16
Section 4.4 Net Asset Values................................................16
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Section 4.5 Availability of Funds...........................................16
Section 4.6 Litigation......................................................16
Section 4.7 Certain Relationships...........................................16
Section 4.8 Solvency........................................................17
Section 4.9 No Other Representations or Warranties..........................17
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS PENDING THE MERGERS
Section 5.1 Conduct of Business by NCIC.....................................17
ARTICLE VI
ADDITIONAL COVENANTS
Section 6.1 Proxy Statement; Stockholder Meeting............................19
Section 6.2 Reasonable Best Efforts.........................................20
Section 6.3 No Solicitation of Transactions.................................20
Section 6.4 Board Actions...................................................22
Section 6.5 Public Announcements............................................22
Section 6.6 Indemnification; Directors' and Officers' Insurance.............23
Section 6.7 Fairness Opinion................................................24
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 Conditions to Each Party's Obligation to Effect the Mergers.....24
Section 7.2 Conditions to Obligations of Purchaser Parties..................25
Section 7.3 Conditions to Obligations of NCIC and NSP.......................26
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination.....................................................26
Section 8.2 Break-Up Fee....................................................27
Section 8.3 Effect of Termination...........................................28
Section 8.4 Authorization...................................................28
Section 8.5 Maximum Recovery................................................28
Section 8.6 Amendment.......................................................29
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Nonsurvival of Representations and Warranties...................29
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Section 9.2 Notices.........................................................29
Section 9.3 Interpretation..................................................31
Section 9.4 Specific Performance............................................31
Section 9.5 Counterparts....................................................31
Section 9.6 Entire Agreement; No Third-Party Beneficiaries..................31
Section 9.7 Governing Law...................................................31
Section 9.8 Assignment......................................................31
Section 9.9 Severability....................................................32
Section 9.10 Exhibits; Disclosure Letter.....................................32
Section 9.11 Mutual Drafting.................................................32
Section 9.12 Jurisdiction; Venue.............................................32
Section 9.13 Waiver of Trial by Jury.........................................33
Section 9.14 Expenses........................................................33
ARTICLE X
CERTAIN DEFINITIONS
Section 10.1 Certain Definitions.............................................33
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This AGREEMENT AND PLAN OF MERGER, dated as of July 20, 2007
("Agreement"), by and among W. Xxxxxx Xxxxxxx ("ES") and Xxxxx X. Xxxxxxxx
("DH"), NorthStar Capital Investment Corp., a Maryland corporation ("NCIC") and
NorthStar Partnership, L.P., a Delaware limited partnership ("NSP") (each of
NCIC and NSP, a "Stockholder" and, collectively, the "Stockholders").
W I T N E S S E T H
WHEREAS, promptly following the execution of this Agreement, ES and DH
shall form a Maryland corporation wholly owned by ES and DH ("NCIC Merger Sub")
and shall form a Delaware limited liability company wholly owned by ES and DH
("Partnership Merger Sub" and, together with NCIC Merger Sub, ES and DH,
collectively, the "Purchaser Parties");
WHEREAS, NCIC owns directly or indirectly, including through its
subsidiary NorthStar MHG Subsidiary LLC, 9,122,521 shares (the "NCIC-Owned MHGC
Shares") of common stock, par value $0.01 per share (the "MHGC Common Stock"),
of Morgans Hotel Group Co., a Delaware corporation ("MHGC"), and NSP owns
1,042,177 shares of MHGC Common Stock (the "NSP-Owned MHGC Shares").
WHEREAS, it is proposed that NCIC Merger Sub shall merge with and into
NCIC, with NCIC surviving the merger, all on the terms and subject to the
conditions set forth in this Agreement and in accordance with the Maryland
General Corporation Law (the "MGCL"), and pursuant to which each of the issued
and outstanding shares of common stock, par value $0.01 per share, of NCIC (the
"NCIC Common Shares"), other than the Excluded NCIC Shares (as defined below,
but generally consisting of NCIC Common Shares held by ES and his affiliates and
certain NCIC Common Shares held by DH and his affiliates) and Dissenting NCIC
Shares (as defined herein), shall be converted into and become the right to
receive the Merger Consideration, upon the terms and subject to the conditions
set forth in this Agreement;
WHEREAS, it is proposed that Partnership Merger Sub shall merge with and
into NSP, with NSP surviving the merger, all on the terms and subject to the
conditions set forth in this Agreement and in accordance with the Delaware
Revised Uniform Limited Partnership Act (the "DRULPA") and the LLC Act, and
pursuant to which, upon the terms and subject to the conditions set forth in
this Agreement, each partnership common unit of NSP (whether held by a limited
partner or a general partner) (each, an "LP Unit"), other than the Excluded
Units (as defined below, but generally consisting of LP Units held by ES and his
affiliates and certain LP Units held by DH and his affiliates and by certain
other persons), shall be converted into and become the right to receive the
Partnership Merger Consideration;
WHEREAS, the Stockholders and the NCIC Board of Directors have determined
to sell 8,250,706 of the NCIC-Owned MHGC Shares and 126,970 of the NSP-Owned
MHGC Shares (the "Non-Continuing MHGC Shares") in an underwritten sale (such
underwritten sale, or other contemplated sale of the Non-Continuing MHGC Shares
as may be approved in the sole discretion of the NCIC Board of Directors, to be
referred to herein as the "Sale") and retain the balance of the NCIC-Owned MHGC
Shares and the NSP-Owned Shares (the "Continuing MHGC Shares") and certain of
the net proceeds of such sale, together with certain other consideration and
less certain expenses of NCIC and NSP respectively shall together constitute the
Merger
Consideration and the Partnership Merger Consideration, as described herein,
payable respectively to the shareholders of NCIC and the unitholders of NSP, in
each case, other than with respect to Excluded NCIC Shares and Excluded Units;
WHEREAS, certain holders of NCIC Common Shares and LP Units, in order to
support and effectuate the transactions contemplated hereby have agreed to
support and vote for the transactions contemplated hereby;
WHEREAS, the Board of Directors of NCIC (the "NCIC Board of Directors")
has determined that this Agreement, the Merger, and the other transactions
contemplated hereby (including the NCIC Charter Amendment), taken together, are
fair to, advisable and in the best interests of NCIC and the holders of NCIC
Common Shares (other than the Excluded NCIC Shares); and
WHEREAS, NCIC, in its capacity as sole general partner of NSP, has
adopted this Agreement and approved the Partnership Merger pursuant to DRULPA,
the LLC Act and Section 7.1A(3) of the NSP Partnership Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
subject to the terms and conditions hereof, and intending to be legally bound
hereby, NCIC, NSP and the Purchaser Parties hereby agree as follows:
ARTICLE I.
THE MERGERS
Section 1.1 The Mergers.
(a) Before the Effective Time, upon the terms and subject to the
conditions set forth in this Agreement, at the Partnership Merger Effective
Time, Partnership Merger Sub shall be merged with and into NSP (the "Partnership
Merger") in accordance with DRULPA and the LLC Act, and the separate existence
of Partnership Merger Sub shall cease and NSP shall continue as the surviving
partnership (the "Surviving Partnership"), with NCIC remaining as the general
partner of the Surviving Partnership. The Partnership Merger shall have the
effects set forth in the DRULPA, the LLC Act and this Agreement. Without
limiting the generality of the foregoing, and subject thereto, at the
Partnership Merger Effective Time, all of the property, rights, privileges and
powers of NSP and Partnership Merger Sub will vest in the Surviving Partnership,
and all of the debts, liabilities and duties of NSP and Partnership Merger Sub
will become the debts, liabilities and duties of the Surviving Partnership.
(b) Following the Partnership Merger Effective Time, upon the terms and
subject to the conditions of this Agreement, at the Effective Time, NCIC Merger
Sub shall merge with and into NCIC (the "Merger," and together with the
Partnership Merger, the "Mergers") in accordance with Subtitle 1 of Title 3 of
the MGCL, and the separate corporate existence of NCIC Merger Sub shall cease
and NCIC shall continue as the surviving company (the "Surviving Company") in
accordance with the MGCL. The Merger shall have the effects set forth in
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the MGCL and this Agreement. Without limiting the generality of the foregoing,
and subject thereto, at the Effective Time, all of the property, rights,
privileges and powers of NCIC and NCIC Merger Sub will vest in the Surviving
Company, and all of the debts, liabilities and duties of NCIC and NCIC Merger
Sub will become the debts, liabilities and duties of the Surviving Company.
Section 1.2 Closing. The closing of the Mergers (the "Closing") will
take place at 10:00 a.m., local time, as promptly as practicable but in no event
later than the third (3rd) Business Day after the satisfaction or waiver of all
of the conditions (other than those conditions that by their nature are to be
satisfied by actions taken at Closing, but subject to the fulfillment or waiver
of those conditions) set forth in Article VII (the "Closing Date"), at the
offices of Wachtell, Lipton, Xxxxx & Xxxx, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, unless another date or place is agreed to in writing by the parties.
Section 1.3 Effective Times.
(a) Subject to the provisions of this Agreement, as soon as reasonably
practicable on the Closing Date, the parties shall file with the Delaware
Secretary of State the certificate of merger or other appropriate documents (the
"Partnership Certificate of Merger") in such form as is required by, and
executed in accordance with, the relevant provisions of DRULPA and the LLC Act
and make all other filings, recordings or publications required under DRULPA and
the LLC Act in connection with the Partnership Merger. The Partnership Merger
shall become effective at the time of the filing of the Partnership Certificate
of Merger with, and acceptance for record of such Partnership Certificate of
Merger by, the Delaware Secretary of State in accordance with DRULPA and the LLC
Act, or at such other time as the parties shall agree as specified in such
filings in accordance with applicable Law (the "Partnership Merger Effective
Time").
(b) Subject to the provisions of this Agreement, as soon as reasonably
practicable on the Closing Date, the parties shall file with the State
Department of Assessments and Taxation of Maryland (the "Maryland Department")
the articles of merger or other appropriate documents (the "Articles of Merger")
in such form as is required by, and executed in accordance with, the relevant
provisions of the MGCL and make all other filings, recordings or publications
required under the MGCL in connection with the Merger. The Merger shall become
effective at the time of the filing of the Articles of Merger with, and
acceptance for record of such Articles of Merger by, the Maryland Department in
accordance with the MGCL, or at such other time as the parties shall agree as
specified in such filings in accordance with applicable Law (the "Effective
Time"), it being understood that the parties shall cause the Effective Time to
occur on the Closing Date following the Partnership Merger Effective Time.
ARTICLE II.
EFFECTS OF THE MERGERS; EXCHANGE OF SHARES
Section 2.1 Merger Consideration. At the Effective Time, by virtue of
the Merger and without any further action on the part of NCIC Merger Sub, NCIC
or the holders of NCIC Common Shares:
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(a) Each of the NCIC Common Shares issued and outstanding immediately
prior to the Effective Time that are listed on Annex A, which NCIC Common Shares
are owned by ES, DH or certain of their affiliates and by Xxxx Xxxxxx (such
shares the "Excluded NCIC Shares"), shall remain outstanding as a validly
issued, fully paid and nonassessable share of common stock, par value $0.01 per
share, of the Surviving Company (a "Surviving Company Common Share").
(b) Each NCIC Common Share issued and outstanding immediately prior to
the Effective Time, other than Excluded NCIC Shares and Dissenting NCIC Shares,
automatically shall be converted into the right to receive an amount in cash per
share equal to the sum of (i) $2.30 plus (ii) their "pro rata share" of the
value of the Combined MHGC Shares (or upon an NCIC Distribution Election, their
pro rata share of the number of Combined MHGC Shares), less (iii) the Per Share
Transaction Expenses (such sum, the "Merger Consideration"). All such NCIC
Common Shares, when so converted, shall no longer be outstanding and
automatically shall be canceled and retired and shall cease to exist, and each
holder of an NCIC Common Share shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration to be paid in
consideration therefor in accordance with Section 2.5, without interest. For the
purposes hereof, the "pro rata share" of the value of the Combined MHGC Shares
shall equal (i) for each NCIC Common Share other than an Excluded NCIC Share, an
amount equal to one (1) divided by the total number of Outstanding NCIC Common
Shares, multiplied by the total number of Combined MHGC Shares and then
multiplied by the average price per share of the MHGC Common Stock sold in the
Sale. For purposes hereof, the "pro rata share" of the number of Combined MHGC
Shares shall equal (i) for each NCIC Common Share other than an Excluded NCIC
Share, an amount equal to one (1) divided by the total number of Outstanding
NCIC Common Shares, multiplied by the total number of Combined MHGC Shares. For
the purposes hereof, "Per Share Transaction Expenses" shall be an amount per
share of NCIC Common Stock equal to the aggregate fees and expenses incurred in
connection with the transactions contemplated hereby by NCIC, NSP, the NCIC
Special Committee and the Purchaser Parties (including without limitation legal
fees, premium and expenses incurred to obtain the policy contemplated by Section
6.6(d) to the extent in excess of $550,000, and including all the fees or
expenses to be paid by NCIC, NSP or the NCIC Special Committee to obtain the
Fairness Opinion referred to in Section 7.3(d) to the extent in excess of the
amount set forth in Annex D) divided by the total number of Outstanding NCIC
Common Shares and LP Units outstanding, provided that, the legal fees to be paid
to the law firms listed on Annex C shall not exceed the amounts listed next to
their names on such Annex.
(c) Each share of common stock, par value $0.01 per share, of NCIC
Merger Sub issued and outstanding immediately prior to the Effective Time shall
be converted into and be exchanged for one newly and validly issued, fully paid
and nonassessable share of common stock, par value $0.01 per share, of the
Surviving Company.
(d) Each NCIC Common Share issued and outstanding immediately prior to
the Effective Time that is owned by any wholly owned Subsidiary of NCIC, NCIC
Merger Sub or Partnership Merger Sub shall automatically be canceled and retired
and shall cease to exist, and no payment shall be made with respect thereto.
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Section 2.2 Partnership Merger Consideration.
(a) At the Partnership Merger Effective Time, by virtue of the
Partnership Merger and without any further action on the part of Partnership
Merger Sub, NCIC, NSP or the holders of LP Units, each LP Unit issued and
outstanding immediately prior to the Partnership Merger Effective Time, other
than Excluded Units, automatically shall be converted into the right to receive
cash, without interest thereon, in an amount per LP Unit equal to the sum of (i)
$2.30 plus (ii) the pro rata share of the value of the NSP-Owned MHGC Shares (or
upon the NCIC Distribution Election, a pro rata share of the NSP-Owned MHGC
Shares), less (iii) the Per Share Transaction Expenses (such sum, the
"Partnership Merger Consideration"). For the purposes hereof, the "pro rata
share" of the value of the NSP-Owned MHGC Shares shall equal (i) for each LP
Unit other than an Excluded Unit, the product of one (1) divided by the total
number of LP Units outstanding, multiplied by the total number of NSP-Owned MHGC
Shares, then multiplied by the average price per share of the MHGC Common Stock
sold in the Sale. For purposes hereof, the "pro rata share" of the NSP-Owned
MHGC Shares shall equal (i) for each LP Unit other than an Excluded Unit, the
product of one (1) divided by the total number of LP Units outstanding,
multiplied by the total number of NSP-Owned MHGC Shares.
(b) At the Partnership Merger Effective Time, by virtue of the
Partnership Merger and without any further action on the part of Partnership
Merger Sub, NCIC, NSP or the holders of LP Units, (i) the general partnership
interest of NSP owned by NCIC shall remain outstanding and constitute the only
outstanding general partnership interest in the Surviving Partnership, (ii) all
partnership common units in the aggregate of limited liability company interest
in Partnership Merger Sub shall be converted into and be exchanged for a number
of newly and validly issued, fully paid and nonassessable LP Units in the
Surviving Partnership (a "Surviving Partnership Unit") equal to the number of LP
Units exchanged for cash in the Partnership Merger multiplied by the quotient
obtained (expressed as a decimal) by dividing the amount of cash provided by or
on behalf of Partnership Merger Sub and its partners by the total amount of cash
paid for LP Units in the Partnership Merger, and (iii) each LP Unit issued and
outstanding immediately prior to the Effective Time that is listed on Annex A,
which LP Units so listed are owned by ES, DH or certain of their affiliates and
the Persons listed in such Annex, (each such LP Unit referred to in this clause
(iii), an "Excluded Unit"), shall remain outstanding as a validly issued, fully
paid and nonassessable Surviving Partnership Unit. Annex A may be amended from
time to time up to the date that is ten (10) Business Days prior to the
Effective Time to reflect any holders of LP Units (other than ES, DH and their
affiliates) who elect to include their LP Units as Excluded Units. To the extent
that LP Units receive cash provided by Partnership Merger Sub or its partners,
such LP Units shall be treated as having been sold to the partners of
Partnership Merger Sub.
Section 2.3 Organizational Documents.
(a) At the Effective Time, (i) the charter of the Surviving Company
shall be the charter of NCIC Merger Sub as currently in effect (the "Merger Sub
Charter") and (ii) the bylaws of the Surviving Company shall be the bylaws of
Merger Sub as currently in effect (the "Merger Sub Bylaws"), in each case as
currently in effect, and in each case until further amended by the stockholders
of NCIC Merger Sub in accordance with the provisions thereof and with the MGCL.
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(b) Following the Partnership Merger Effective Time, the certificate of
limited partnership of NSP shall continue to be the certificate of limited
partnership of the Surviving Partnership until further amended in accordance
with the provisions thereof and with the DRULPA and the LLC Act.
Section 2.4 Directors and Officers of the Surviving Company. The
directors of NCIC Merger Sub immediately prior to the Effective Time shall be
elected as the sole initial directors of the Surviving Company, each to hold
office in accordance with the articles of incorporation and bylaws of the
Surviving Company. The officers of NCIC immediately prior to the Effective Time
shall be the sole initial officers of the Surviving Company, each to hold office
in accordance with the articles of incorporation and bylaws of the Surviving
Company.
Section 2.5 Payment for Securities.
(a) Exchange Agent. At or before the Effective Time, NCIC Merger Sub
and Partnership NCIC Merger Sub shall appoint a bank or trust company reasonably
satisfactory to NCIC to act as exchange agent (the "Exchange Agent") for the
payment of the Merger Consideration and the Partnership Merger Consideration
(collectively, such funds, the "Exchange Fund"). On or before the Effective
Time, (i) NCIC and NSP shall deposit by wire transfer of immediately available
funds in an amount equal to the net proceeds received from the sale of the
Non-Continuing MHGC Shares (excluding the net proceeds from the sale of 700,000
of such shares) and NSP shall deposit by wire transfer of immediately available
funds in an amount no less than $29 million (the "NCIC and NSP Contribution")
and (ii) the Purchaser Parties shall deposit by wire transfer of immediately
available funds in an amount equal to the difference between (i) the sum of the
Merger Consideration and the Partnership Merger Consideration less (ii) the NCIC
and NSP Contribution, in each case with the Exchange Agent for the benefit of
the holders of NCIC Common Shares, other than the Excluded NCIC Shares, and LP
Units, other than the Excluded Units, respectively. The Exchange Agent shall
invest any cash included in the Exchange Fund representing the Merger
Consideration as directed by the Surviving Company, and any amounts in the
Exchange Fund representing the Partnership Merger Consideration as directed by
the Surviving Partnership (so long as such directions do not impair the rights
of the holders of NCIC Common Shares or LP Units, as the case may be, or the
ability of the Exchange Agent to make timely payments as required hereby), in
direct obligations of the United States of America or any state thereof,
obligations for which the full faith and credit of the United States of America
or any such state is pledged to provide for the payment of principal and
interest, commercial paper either rated of the highest quality by Xxxxx'x
Investors Service, Inc. or Standard & Poor's Corporation or certificates of
deposit issued by, or other deposit accounts of, a commercial bank having at
least $1,000,000,000 in capital and surplus, in each case with a maturity of
three months or less; provided that no such investment or losses thereon shall
affect the Merger Consideration, the Partnership Merger Consideration or other
amounts payable pursuant to this Article II, and that the Purchaser Parties
shall promptly provide, or shall cause the Surviving Company to provide,
additional funds to the Exchange Agent in the amount of any shortfall in funds
payable pursuant to this Article II. Any net earnings with respect thereto shall
be paid to the Surviving Company or to the Surviving Partnership as and when
requested by the Surviving Company or the Surviving Partnership, as the case may
be. The Exchange Agent shall make payments of the Merger Consideration and the
Partnership Merger Considera-
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tion out of the Exchange Fund in accordance with this Agreement. The Exchange
Fund shall not be used for any other purpose.
(b) Merger Exchange Procedures. (i) The parties acknowledge and agree
that the NCIC Common Shares may exist in book-entry form only and may not be
evidenced by a certificate (the "Uncertificated NCIC Common Shares"), in which
case the exchange of such Uncertificated NCIC Common Shares for the Merger
Consideration shall be effected by book entry and the provisions of Section 2.5
with respect to the surrender of NCIC Common Share Certificates shall be
inapplicable to such Uncertificated NCIC Common Shares.
(ii) As promptly as practicable following the Effective Time (but
in no event later than two (2) Business Days after the Effective Time),
NCIC Merger Sub shall cause the Exchange Agent to mail to each holder of
record of NCIC Common Shares that were converted into the right to receive
the Merger Consideration pursuant to Section 2.1(b): (A) a letter of
transmittal (a "Letter of Transmittal") which shall specify that delivery
shall be effected and risk of loss and title to the NCIC Common Shares
shall pass only upon delivery of the certificates, if any, representing the
NCIC Common Shares (the "NCIC Common Share Certificates") (or affidavits of
loss in lieu thereof in accordance with Section 2.5(f)) or Uncertificated
NCIC Common Shares by book entry in accordance with the reasonable
procedures established by the Exchange Agent for the delivery of
Uncertificated NCIC Common Shares to the Exchange Agent and otherwise upon
delivery of a duly executed Letter of Transmittal to the Exchange Agent and
(B) instructions for use in effecting the surrender of the NCIC Common
Share Certificates (or affidavits of loss in lieu thereof in accordance
with Section 2.5(f)), if any, or Uncertificated NCIC Common Shares by book
entry in exchange for the Merger Consideration, the form of the Letter of
Transmittal and instructions to be reasonably agreed upon by NCIC Merger
Sub and NCIC.
(iii) Upon delivery of a Letter of Transmittal, duly executed, and
any other documents reasonably required by the Exchange Agent or the
Surviving Company, including any NCIC Common Share Certificates (or
affidavits of loss in lieu thereof in accordance with Section 2.5(f)) or
compliance with the reasonable procedures established by the Exchange Agent
for the delivery of Uncertificated NCIC Common Shares, (A) the holder of
such NCIC Common Shares shall be entitled to receive in exchange therefor a
check in the amount equal to the amount of Merger Consideration that such
holder has the right to receive pursuant to the provisions of Section
2.1(b); and (B) any NCIC Common Share Certificate or Uncertificated NCIC
Common Share so surrendered shall forthwith be canceled. Each such holder's
NCIC Common Shares and, if applicable, such holder's NCIC Common Share
Certificate or Uncertificated NCIC Common Shares until surrendered as
contemplated by this Section 2.5, shall be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender
an amount equal to (1) the number of such holder's Common Shares,
multiplied by (2) the Merger Consideration.
(iv) In the event of a transfer of ownership of NCIC Common Shares
that is not registered in the transfer records of NCIC, the Merger
Consideration shall be paid to a transferee if (A) the NCIC Common Share
Certificate evidencing such NCIC
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Common Shares is presented to the Exchange Agent properly endorsed or
accompanied by appropriate stock powers and otherwise in proper form for
transfer and accompanied by all documents reasonably required by the
Exchange Agent to evidence and effect such transfer; and (B) such
transferee shall pay any transfer or other Taxes required by reason of the
payment to a Person other than the registered holder of the NCIC Common
Share Certificate or establish to the satisfaction of the Exchange Agent
and the Surviving Company that such Tax has been paid or is not applicable.
(c) Partnership Merger Exchange Procedures. (i) As promptly as
practicable following the Partnership Merger Effective Time (but in no event
later than two (2) Business Days after the Effective Time), Partnership Merger
Sub shall cause the Exchange Agent to mail to each holder of record of LP Units
immediately prior to the Partnership Merger Effective Time: (A) a letter of
transmittal (a "Unitholder Letter of Transmittal") and (B) instructions for use
in effecting the surrender of the LP Units in exchange for the Partnership
Merger Consideration, the form of the Unitholder Letter of Transmittal and
instructions to be reasonably agreed upon by Partnership Merger Sub and NCIC.
(ii) Upon surrender of an LP Unit for cancellation to the Exchange
Agent, if applicable, together with a Unitholder Letter of Transmittal,
duly executed, and any other documents reasonably required by the Exchange
Agent or the Surviving Partnership, (A) the holder of such LP Unit shall be
entitled to receive in exchange therefor a check in the amount equal to the
amount of Partnership Merger Consideration that such holder has the right
to receive pursuant to the provisions of Section 2.2(a); and (B) the LP
Unit so surrendered shall forthwith be canceled. Until surrendered as
contemplated by this Section 2.5, each such LP Unit shall be deemed at any
time after the Partnership Merger Effective Time to represent only the
right to receive upon such surrender the Partnership Merger Consideration.
(d) Termination of Exchange Fund. Any portion of the Exchange Fund
(including any interest and other income received with respect thereto) that
remains undistributed to the former holders of NCIC Common Shares or LP Units
for one year after the Effective Time shall be delivered to NCIC Merger Sub or
Partnership Merger Sub, as the case may be, upon demand, and any former holders
of NCIC Common Shares or LP Units who have not theretofore received any Merger
Consideration or Partnership Merger Consideration, as applicable, to which they
are entitled under this Article II, shall thereafter look only to NCIC Merger
Sub or Partnership Merger Sub, as the case may be, for payment of their claims
with respect thereto.
(e) Escheat. None of the Purchaser Parties, the Surviving Company or
the Surviving Partnership shall be liable to any holder of NCIC Common Shares or
LP Units for any part of the Merger Consideration or Partnership Merger
Consideration, as applicable, delivered to a public official pursuant to any
applicable abandoned property, escheat or similar Law. Any amounts remaining
unclaimed by holders of any such shares immediately prior to the time at which
such amounts would otherwise escheat to, or become property of, any federal,
state or local government or any court, regulatory or administrative agency or
commission, governmental arbitrator or other governmental authority or
instrumentality, domestic or foreign (a "Governmental Entity"), shall, to the
extent permitted by applicable Law, become the property of the
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Surviving Company or the Surviving Partnership, as applicable, free and clear of
any claims or interest of any such holders or their successors, assigns or
personal representatives previously entitled thereto.
(f) Lost, Stolen or Destroyed Certificates. If any NCIC Common Share
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such NCIC Common Share Certificate
to be lost, stolen or destroyed and, if required by NCIC Merger Sub or the
Surviving Company, the posting by such Person of a bond in such reasonable and
customary amount as NCIC Merger Sub or the Surviving Company may direct as
indemnity against any claim that may be made against it with respect to such
NCIC Common Share Certificate, the Exchange Agent shall pay in exchange for such
lost, stolen or destroyed NCIC Common Share Certificate the appropriate amount
of the Merger Consideration.
(g) Withholdings of Tax. NCIC Merger Sub, Partnership Merger Sub, the
Surviving Company, the Surviving Partnership or the Exchange Agent shall be
entitled to deduct and withhold from the Merger Consideration or the Partnership
Merger Consideration otherwise payable pursuant to this Agreement to any holder
of NCIC Common Shares or LP Units such amount as NCIC Merger Sub, Partnership
Merger Sub, the Surviving Company, the Surviving Partnership, or the Exchange
Agent is required to deduct and withhold with respect to the making of such
payment under the Code or any provision of state, local or foreign Tax Law. To
the extent that amounts are so deducted or withheld and paid over to the
applicable Governmental Entity, such deducted or withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the former
holder of NCIC Common Shares or LP Units in respect of which such deduction and
withholding was made.
Section 2.6 No Further Ownership Rights.
(a) The Merger Consideration paid upon the delivery of the Letter of
Transmittal and, if applicable, surrender or exchange of the NCIC Common Share
Certificates evidencing NCIC Common Shares in accordance with the terms hereof
shall be deemed to have been paid in full satisfaction of all rights pertaining
to such NCIC Common Shares and, after the Effective Time, there shall be no
further registration of transfers on the transfer books of the Surviving Company
of the NCIC Common Shares. If, after the Effective Time, NCIC Common Shares are
presented to the Surviving Company, for any reason, they shall be canceled and
exchanged as provided in this Article II.
(b) The Partnership Merger Consideration paid with respect to the LP
Units in accordance with the terms hereof shall be deemed to have been paid in
full satisfaction of all rights pertaining to such LP Units and, after the
Partnership Merger Effective Time, there shall be no further registration of
transfers on the transfer books of the Surviving Partnership of the LP Units.
If, after the Effective Time, LP Units are presented to the Surviving Company,
for any reason, they shall be canceled and exchanged as provided in this Article
II.
Section 2.7 Dissenting NCIC Common Shares. No holder of NCIC Common
Shares that has perfected a demand for appraisal rights with respect to its NCIC
Common Shares pursuant to Subtitle 2 of Title 3 of the MGCL (a "Dissenting
Stockholder") shall be entitled to receive
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the Merger Consideration with respect to the NCIC Common Shares owned by such
Dissenting Stockholder (the "Dissenting NCIC Shares"), unless and until such
Dissenting Stockholder shall have effectively withdrawn or lost such Dissenting
Stockholder's right to appraisal under the MGCL. Each Dissenting Stockholder
shall be entitled to receive only the payment provided by Subtitle 2 of Title 3
of the MGCL with respect to Dissenting NCIC Shares. NCIC shall give NCIC Merger
Sub (i) prompt notice upon receipt by NCIC of any written demands for appraisal,
attempted withdrawals of such demands, any other instruments served pursuant to
applicable Law that are received by NCIC relating to stockholders' rights of
appraisal and (ii) the opportunity to direct all negotiations and proceedings
with respect to any demand for appraisal under the MGCL. NCIC shall not, except
with the prior written consent of NCIC Merger Sub, voluntarily make any payment
with respect to any demands for appraisal of Dissenting NCIC Shares, offer to
settle or settle any such demands or approve any withdrawal of any such demands.
Section 2.8 Further Assurances.
(a) If at any time after the Effective Time the Surviving Company shall
consider or be advised that any deeds, bills of sale, assignments or assurances
or any other acts or things are reasonably necessary or proper (i) to vest,
perfect or confirm, of record or otherwise, in the Surviving Company its right,
title or interest in, to or under any of the rights, privileges, powers,
franchises, properties or assets of either NCIC Merger Sub or NCIC, or (ii)
otherwise to carry out the purposes of this Agreement, the Surviving Company and
its proper officers and directors or their designees shall be authorized to
execute and deliver, in the name and on behalf of either of NCIC Merger Sub and
NCIC, all such deeds, bills of sale, assignments and assurances and to do, in
the name and on behalf of either NCIC Merger Sub or the Company, all such other
acts and things as may be reasonably necessary or proper to vest, perfect or
confirm the Surviving Company's right, title or interest in, to or under any of
the rights, privileges, powers, franchises, properties or assets of NCIC Merger
Sub or NCIC and otherwise to carry out the purposes of this Agreement.
(b) If at any time after the Partnership Merger Effective Time the
Surviving Partnership shall consider or be advised that any deeds, bills of
sale, assignments or assurances or any other acts or things are reasonably
necessary or proper (i) to vest, perfect or confirm, of record or otherwise, in
the Surviving Partnership its right, title or interest in, to or under any of
the rights, privileges, powers, franchises, properties or assets of either
Partnership Merger Sub or NSP, or (ii) otherwise to carry out the purposes of
this Agreement, the Surviving Partnership and its proper partners, officers and
directors or their designees shall be authorized to execute and deliver, in the
name and on behalf of either of Partnership Merger Sub and NSP, all such deeds,
bills of sale, assignments and assurances and to do, in the name and on behalf
of either Partnership Merger Sub or NSP, all such other acts and things as may
be reasonably necessary or proper to vest, perfect or confirm the Surviving
Company's right, title or interest in, to or under any of the rights,
privileges, powers, franchises, properties or assets of Partnership Merger Sub
or NSP and otherwise to carry out the purposes of this Agreement.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF NCIC AND NSP
Except as (x) set forth in the disclosure letter, dated as of the date
hereof and delivered to NCIC Merger Sub and Partnership Merger Sub in connection
with the execution and delivery of this Agreement (the "NCIC Disclosure Letter")
or (y) actually known to ES or DH, each of NCIC and NSP represents and warrants
to the Purchaser Parties as follows:
Section 3.1 Organization and Good Standing.
(a) NCIC is a corporation duly organized, validly existing and in good
standing under the Laws of the State of Maryland. NCIC has all of the requisite
corporate power and authority and all necessary government approvals or licenses
to own, lease, operate its properties, and to carry on its business as now being
conducted, except for the absence of which would not, individually or in the
aggregate, constitute an NCIC Material Adverse Effect. NCIC is duly qualified or
licensed to do business and is in good standing in each jurisdiction (to the
extent such concepts exist in such jurisdictions) in which the nature of the
business it is conducting, or the ownership, operation or leasing of its
properties or the management of properties for others, makes such qualification
or licensing necessary, except for those jurisdictions where the failure to be
so qualified or licensed or in good standing would not, individually or in the
aggregate, constitute an NCIC Material Adverse Effect.
(b) NSP is a limited partnership duly formed, validly existing and in
good standing under the Laws of the State of Delaware. NSP has all of the
requisite partnership power and authority and all necessary government approvals
or licenses to own, lease, operate its properties, and to carry on its business
as now being conducted, except for the absence of which would not, individually
or in the aggregate, constitute an NCIC Material Adverse Effect. NSP is duly
qualified or licensed to do business and is in good standing in each
jurisdiction (to the extent such concepts exist in such jurisdictions) in which
the nature of the business it is conducting, or the ownership, operation or
leasing of its properties or the management of properties for others, makes such
qualification or licensing necessary, except for those jurisdictions where the
failure to be so qualified or licensed or in good standing would not,
individually or in the aggregate, constitute an NCIC Material Adverse Effect.
Section 3.2 Capitalization.
(a) The authorized shares of stock of NCIC consist of (i) 500,000,000
NCIC Common Shares, par value $0.01 per share and (ii) 100,000,000 shares of
preferred stock of NCIC, par value $0.01 per share. As of July 19, 2007 (the
"Capitalization Date"), there are: (1) 20,946,891 NCIC Common Shares issued and
outstanding and (2) no shares of preferred stock of NCIC issued or outstanding.
Except as set forth in Section 3.2 of the NCIC Disclosure Letter, there are no
issued and outstanding shares or other equity securities of NCIC (or shares or
other equity securities of NCIC reserved for issuance), and there are no
securities of NCIC convertible into or exchangeable for stock or other equity
securities of NCIC, or other subscriptions, options, warrants, conversion
rights, stock appreciation rights, "phantom" stock, stock units, calls, claims,
rights of first refusal, rights (including preemptive rights), commitments,
arrange-
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ments or agreements to which NCIC is a party or by which it is bound in any case
obligating NCIC to issue, deliver, sell, purchase, redeem or acquire, or cause
to be issued, delivered, sold, purchased, redeemed or acquired, stock or other
equity securities of NCIC, or obligating NCIC to grant, extend or enter into any
such subscription, option, warrant, conversion right, stock appreciation right,
call, right, commitment, arrangement or agreement.
(b) As of the Capitalization Date, there are issued and outstanding (i)
27,787,468 aggregate units of general partner and limited partnership interest
in NSP (the "Units") and (ii) NCIC is the sole general partner of NSP, holds all
of the outstanding general partnership interests in NSP, and 20,946,891 Units
(including its combined general and limited partnership interests).
Section 3.3 Authority; No Violations.
(a) NCIC and NSP each has all requisite power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby
(including the NCIC Charter Amendment), subject to the receipt of the
affirmative vote of a majority of all the votes entitled to be cast by the
holders of NCIC Common Shares at the Stockholder Meeting in favor of this
Agreement, the Mergers, the NCIC Charter Amendment and all matters ancillary
thereto (the "Stockholder Approval"); the filing of Articles of Merger pursuant
to the MGCL and acceptance thereof by the Maryland Department; the filing of the
Partnership Certificate of Merger pursuant to the DRULPA and the LLC Act and the
acceptance thereof by the Delaware Secretary of State; and the filing of the
NCIC Charter Amendment and the acceptance thereof by the Maryland Department.
Each of the NCIC Board of Directors and NCIC, as general partner of NSP, has
approved the execution and delivery of this Agreement and the transactions
contemplated by this Agreement, including the Mergers and the NCIC Charter
Amendment, and the NCIC Board of Directors has declared advisable the Merger and
has directed that this Agreement and the transactions contemplated by this
Agreement, including the Merger and the NCIC Charter Amendment, be submitted for
approval by written consent of the holders of NCIC Common Shares or at a special
meeting of the holders of NCIC Common Shares (the "Stockholder Meeting").
(b) This Agreement has been duly executed and delivered by NCIC and NSP
and, subject to receipt of the Stockholder Approval and assuming due
authorization, execution and delivery by each other party hereto, constitutes a
legal, valid and binding obligation of NCIC and NSP, enforceable against NCIC
and NSP in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and other Laws of
general applicability relating to or affecting creditors' rights and by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
Section 3.4 Governmental Approvals and Notices. No consent, approval,
order or authorization of, or registration, declaration or filing with, notice
to or permit from, any Governmental Entity, is required by or on behalf of NCIC
or any NCIC Subsidiary in connection with the execution and delivery of this
Agreement by NCIC or NSP or the consummation by NCIC or NSP of the transactions
contemplated hereby, except for: (a) the filing with the Securities and Exchange
Commission (the "SEC") of such reports under the Securities Exchange Act of
1934,
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as amended (the "Exchange Act"), and such other compliance with the Exchange Act
and the rules and regulations thereunder, as may be required in connection with
this Agreement and the transactions contemplated thereby; (b) the filing and
acceptance of the Articles of Merger pursuant to the MGCL; (c) the filing and
acceptance of the Partnership Certificate of Merger pursuant to the DRULPA and
the LLC Act; (d) the filing and acceptance of the NCIC Charter Amendment
pursuant to the MGCL; (e) such filings and approvals as may be required by any
applicable state securities or "blue sky" Laws; (f) such filings as may be
required in connection with state or local transfer taxes; (g) compliance with
any applicable requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended (the "HSR Act"); (h) compliance with any applicable
requirements of laws, rules and regulations in other foreign jurisdictions
governing antitrust or merger control matters; and (i) any such other consent,
approval, order, authorization, registration, declaration, notice, filing or
permit that the failure to obtain or make, individually or in the aggregate,
would not constitute an NCIC Material Adverse Effect.
Section 3.5 Assets.
(a) NCIC is the owner, beneficially and of record, of 9,122,521 shares
of MHGC Common Stock, free and clear of any Liens or restrictions (other than
restrictions under applicable securities Laws, the Registration Rights
Agreement, the Underwriting Agreement, and the Lock Up Agreements), and may
transfer good and valid title to such shares of MHGC Common Stock free and clear
of any Liens or restrictions (other than restrictions under applicable
securities Laws, the Registration Rights Agreement, the Underwriting Agreement,
and the Lock Up Agreements).
(b) NSP is the owner, beneficially and of record, of 1,042,177 shares
of MHGC Common Stock, free and clear of any Liens or restrictions (other than
restrictions under applicable securities Laws, the Registration Rights
Agreement, the Underwriting Agreement, and the Lock Up Agreements), and may
transfer good and valid title to such shares of MHGC Common Stock free and clear
of any Liens or restrictions (other than restrictions under applicable
securities Laws, the Registration Rights Agreement, the Underwriting Agreement,
and the Lock Up Agreements).
Section 3.6 Inapplicability of Takeover Statutes and Certain Charter
and Bylaw Provisions. NCIC has taken all appropriate and necessary actions to
exempt the Merger, the Partnership Merger, this Agreement and the other
transactions contemplated thereby from the restrictions of any applicable
provision of Subtitles 6 and 7 of Title 3 of the MGCL, as applicable to a
Maryland corporation (collectively, the "Takeover Statute"). No other "control
share acquisition," "fair price," "moratorium" or other anti-takeover Laws apply
to the Merger, the Partnership Merger, this Agreement or the other transactions
contemplated thereby. NCIC and the NCIC Board of Directors have taken all
appropriate and necessary actions to cause the Merger, the Partnership Merger,
this Agreement and the other transactions contemplated hereby to comply with or
be exempted from any provision contained in the NCIC Charter, NCIC Bylaws or in
the comparable organizational document of any NCIC Subsidiary that would
otherwise impose any limitations on ownership of (i) NCIC Common Shares as set
forth in the NCIC Charter and (ii) the limited partner interests in NSP as set
forth in the NSP Partnership Agreement, this Agreement and the other
transactions contemplated hereby.
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Section 3.7 No Other Representations or Warranties. Except for the
representations and warranties contained in Article IV, each of NCIC or NSP
acknowledges that none of the Purchaser Parties nor any other Person on behalf
of any of the Purchaser Parties makes any other express or implied
representation or warranty with respect to the Purchaser Parties or with respect
to any other information provided to NCIC or NSP in connection with the Mergers,
including any information, documents, projections, forecasts or other material
made available to NCIC and NSP in connection with their due diligence
investigation of the Mergers.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER PARTIES
Except as set forth in the disclosure letter, dated as of the date
hereof and delivered to NCIC in connection with the execution and delivery of
this Agreement (the "Purchaser Parties Disclosure Letter"), each Purchaser Party
represents and warrants to NCIC and NSP as follows:
Section 4.1 Organization and Good Standing.
(a) NCIC Merger Sub is a corporation duly incorporated, validly
existing and in good standing under the Laws of the State of Maryland. NCIC
Merger Sub has all of the requisite corporate power and authority and all
necessary government approvals or licenses to own, lease and operate its
properties, and to carry on its business as now being conducted, except for the
absence of which would not, individually or in the aggregate, constitute a
Purchaser Material Adverse Effect. NCIC Merger Sub is duly qualified or licensed
to do business and is in good standing in each jurisdiction (to the extent such
concepts exist in such jurisdictions) in which the nature of the business it is
conducting, or the ownership, operation or leasing of its properties or the
management of properties for others makes such qualification or licensing
necessary, except for those jurisdictions where the failure to be so qualified
or licensed or in good standing would not, individually or in the aggregate,
constitute a Purchaser Material Adverse Effect. Since the date of its
incorporation, NCIC Merger Sub has not engaged in any activities or conducted
any operations other than in connection with or as contemplated by this
Agreement.
(b) Partnership Merger Sub is a limited liability company duly formed,
validly existing and in good standing under the Laws of the State of Delaware.
Partnership Merger Sub has all of the requisite limited liability company power
and authority and all necessary government approvals or licenses to own, lease
and operate its properties, and to carry on its business as now being conducted,
except for the absence of which would not, individually or in the aggregate,
constitute a Purchaser Material Adverse Effect. Partnership Merger Sub is duly
qualified or licensed to do business and is in good standing in each
jurisdiction (to the extent such concepts exist in such jurisdictions) in which
the nature of the business it is conducting, or the ownership, operation or
leasing of its properties or the management of properties for others makes such
qualification or licensing necessary, except for those jurisdictions where the
failure to be so qualified or licensed or in good standing would not,
individually or in the aggregate, constitute a Purchaser Material Adverse
Effect. Since the date of its formation, Partnership Merger Sub has not engaged
in any activities or conducted any operations other than in connection with or
as contemplated by this Agreement.
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(c) NCIC Merger Sub and Partnership Merger Sub have heretofore made
available to the Company complete and correct copies of the charter, bylaws or
other organizational documents of each Purchaser Party, in each case as
currently in effect.
Section 4.2 Authority; No Violations.
(a) Each Purchaser Party has all requisite corporate or limited
liability company power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby, subject to the filing and
acceptance of the Articles of Merger and the Partnership Certificate of Merger.
Each of the board of directors of NCIC Merger Sub, ES and DH, as sole
stockholders of NCIC Merger Sub, and ES and DH, as the sole unitholders of
Partnership Merger Sub, have approved the execution and delivery of this
Agreement and the transactions contemplated by this Agreement, including the
Mergers. No other approval of any equity holder or governing body of any
Purchaser Party is required to approve or adopt this Agreement or the
transactions contemplated by this Agreement.
(b) This Agreement has been duly executed and delivered by each
Purchaser Party and, assuming due authorization, execution and delivery by the
other parties hereto, constitutes a legal, valid and binding obligation of each
Purchaser Party, enforceable against each Purchaser Party in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other Laws of general applicability relating to
or affecting creditors' rights and by general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).
(c) The execution and delivery of this Agreement by the Purchaser
Parties does not, and the consummation of the transactions contemplated hereby
will not, conflict with, or result in any violation of, or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation, or the loss of a
benefit under, or give rise to a right of purchase under, result in the creation
of any Lien upon any of the properties or assets of any Purchaser Party or any
of their Subsidiaries under, require the consent or approval of any third party,
or otherwise result in a detriment or default to any Purchaser Party or any of
their Subsidiaries under, any provision of (i) the charter or organizational
documents of any Purchaser Party or any of their Subsidiaries, (ii) any loan or
credit agreement or note, or any bond, mortgage, indenture, lease, contract or
other agreement, instrument, permit, concession, franchise or license applicable
to any Purchaser Party or any of their Subsidiaries, or to which their
respective properties or assets are bound, or any guarantee by any Purchaser
Party or any of their Subsidiaries of any of the foregoing, (iii) any joint
venture or other ownership arrangement, or (iv) assuming the consents,
approvals, authorizations or permits and filings or notifications referred to in
Section 4.3 are duly and timely obtained or made, any Law or Order applicable to
or binding upon any Purchaser Party or any of their Subsidiaries, or any of
their respective properties or assets, other than, in the case of any of the
foregoing matters, any such conflicts, violations, defaults, rights, Liens or
detriments that, individually or in the aggregate, would not materially impair
or delay the ability of any Purchaser Party to perform its obligations hereunder
or prevent the consummation by any of them of any of the transactions
contemplated hereby.
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Section 4.3 Governmental Approvals and Notices. No consent, approval,
order or authorization of, or registration, declaration or filing with, notice
to or permit from, any Governmental Entity is required by or on behalf of any
Purchaser Party or any of their respective Subsidiaries in connection with the
execution and delivery of this Agreement by any Purchaser Party or the
consummation by any Purchaser Party of the transactions contemplated hereby,
except for: (a) the filing with the SEC of such reports under the Exchange Act,
and such other compliance with the Exchange Act and the rules and regulations
thereunder, as may be required in connection with this Agreement and the
transactions contemplated thereby; (b) the filing and acceptance of the Articles
of Merger pursuant to the MGCL; (c) the filing and acceptance of the Partnership
Certificate of Merger pursuant to DRULPA and the LLC Act; (d) such filings and
approvals as may be required by any applicable state securities or "blue sky"
Laws; (e) such filings as may be required in connection with state or local
transfer taxes; (f) compliance with any applicable requirements of the HSR Act;
(g) compliance with any applicable requirements of laws, rules and regulations
in other foreign jurisdictions governing antitrust or merger control matters and
(h) any such other consent, approval, order, authorization, registration,
declaration, notice, filing or permit that the failure to obtain or make,
individually or in the aggregate, would not constitute a Purchaser Material
Adverse Effect.
Section 4.4 Net Asset Values. No Purchaser Party is aware of any
material information, which would reasonably be expected to render the NAV
Calculations materially and adversely incorrect, as of the time made. The NAV
Calculations were prepared in good faith and are based on underlying assumptions
which the Purchaser Parties reasonably believe provide a reasonable basis for
the NAV Calculations.
Section 4.5 Availability of Funds. The Purchaser Parties shall have
available at the Effective Time and the Partnership Merger Effective Time, funds
(including but not limited to cash or binding and enforceable commitments) in
aggregate amount sufficient to pay the aggregate Merger Consideration and
Partnership Merger Consideration, as applicable, less the NCIC and NSP
Contribution, and to enable the Purchaser Parties to perform all of their other
respective obligations under this Agreement.
Section 4.6 Litigation. To the actual knowledge of any Purchaser Party,
there is no litigation, arbitration, claim, investigation, suit, action or
proceeding pending or threatened against or affecting any Purchaser Party or any
of its Subsidiaries, nor, to the actual knowledge of any Purchaser Party, is
there any Order outstanding against any Purchaser Party or any of its
Subsidiaries, in each case which would reasonably be expected to, individually
or in the aggregate, (i) cause any of the transactions contemplated by this
Agreement, including the Merger and the Partnership Merger, to be rescinded
following their consummation, or (ii) materially impair or delay the ability of
any Purchaser Party to perform its obligations hereunder or prevent the
consummation by any of them of any of the transactions contemplated hereby.
Section 4.7 Certain Relationships. Each of the Purchaser Parties
acknowledges that ES and DH are directors and officers of NCIC and NSP and, as
such, they are fully familiar with the financial condition and affairs of NCIC
and NSP. Each of the Purchaser Parties agree that except for the representations
and warranties contained in Article III, such Purchaser Party has not relied on
any factual representations of NCIC or NSP or any of their Representatives.
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Section 4.8 Solvency. Immediately after giving effect to the Mergers
and the transactions contemplated hereby, including the payment of the Merger
Consideration and the Partnership Merger Consideration, and payment of all
related fees and expenses, the Surviving Company and the Surviving Partnership
shall be Solvent.
Section 4.9 No Other Representations or Warranties. Except for the
representations and warranties contained in Article III, each of the Purchaser
Parties acknowledges that none of NCIC, NSP nor any other Person on behalf of
NCIC or NSP makes any other express or implied representation or warranty with
respect to NCIC or NSP or with respect to any other information provided to the
Purchaser Parties in connection with the Mergers, including any information,
documents, projections, forecasts or other material made available to the
Purchaser Parties in connection with their due diligence investigation of the
Mergers.
ARTICLE V.
COVENANTS RELATING TO CONDUCT OF BUSINESS PENDING THE MERGERS
Section 5.1 Conduct of Business by NCIC.
(a) Subject to Section 5.1(c), during the period from the date of this
Agreement to the earlier of the termination of this Agreement or the Effective
Time, NCIC and NSP shall, and shall cause each of the other NCIC Subsidiaries
to, except as otherwise expressly provided or permitted by this Agreement or to
the extent consented to by NCIC Merger Sub in writing (which consent shall not
be unreasonably withheld, delayed or conditioned), (i) carry on its businesses
in the usual, regular and ordinary course and in compliance in all material
respects with applicable Law and (ii) to the extent consistent with the
foregoing clause (i), use its commercially reasonable efforts to preserve intact
in all material respects its current business organization, goodwill, ongoing
businesses and relationships with third parties, and to keep available the
services of their present officers and employees.
(b) Without limiting the generality of the foregoing, but subject to
Section 5.1(c), during the period from the date of this Agreement to the earlier
of the termination of this Agreement or the Effective Time, except as otherwise
expressly provided or permitted by this Agreement, as set forth in Section
5.1(b) of the NCIC Disclosure Letter, or to the extent consented to by NCIC
Merger Sub in writing (which consent shall not be unreasonably withheld, delayed
or conditioned), as required by existing agreements, or as required by NCIC's or
its Affiliates' duties to joint venture partners or minority shareholders of any
NCIC Affiliate, NCIC and NSP shall not and shall not authorize or commit or
agree to, and shall cause the other NCIC Subsidiaries not to (and not to
authorize or commit or agree to):
(i) (A) declare, set aside for payment or pay any dividends on, or
make any other actual, constructive or deemed distributions (whether in
cash, shares, property or otherwise) in respect of, any of NCIC's shares,
stock or the partnership interests, shares, stock or other equity interests
in any NCIC Subsidiary that is not directly or indirectly wholly owned by
NCIC, other than (1) dividends or distributions payable to holders of LP
Units and GP Units, and (2) dividends or distributions declared, set aside
or paid by any wholly owned NCIC Subsidiary to NCIC or any NCIC Subsidiary
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that is, di-rectly or indirectly, wholly owned by NCIC; (B) split, combine
or reclassify any shares, stock, partnership interests or other equity
interests or issue or authorize the issuance of any securities in respect
of, in lieu of or in substitution for shares of such shares, stock,
partnership interests or other equity interests or; (C) purchase, redeem or
otherwise acquire any NCIC Common Shares, stock, other equity interests or
securities of NCIC or the partnership interests, stock, other equity
interests or securities of any NCIC Subsidiary or any options, warrants or
rights to acquire, or security convertible into, NCIC Common Shares, stock,
other equity interest or securities of NCIC or the partnership interests,
stock or other equity interests in any NCIC Subsidiary, except in each case
pursuant to the terms of any LP Units or upon exercise of existing rights
in favor of NCIC;
(ii) (A) classify or re-classify any unissued NCIC Common Shares,
shares of stock, units, interests, any other voting or redeemable
securities (including LP Units or other partnership interests) or
stock-based performance units of NCIC or any NCIC Subsidiary; (B) authorize
for issuance, issue, deliver, sell, or grant NCIC Common Shares, shares of
stock, units, interests, any other voting or redeemable securities
(including LP Units or other partnership interests); or (C) authorize for
issuance, issue, deliver, sell, or grant any option or other right in
respect of, any NCIC Common Shares, shares of stock, units, interests, any
other voting or redeemable securities (including LP Units or other
partnership interests), or stock-based performance units of NCIC or any
NCIC Subsidiary or any securities convertible into, or any rights, warrants
or options to acquire, any such shares, units, interests, voting securities
or convertible or redeemable securities (except, with respect to each of
clauses (A), (B) and (C), as required under the NSP Partnership Agreement
as presently in effect);
(iii) amend the NCIC Charter or the NCIC Bylaws, or any other
comparable charter or organizational documents of any NCIC Subsidiary,
other than to amend the NCIC Charter to allow for the disparate treatment
of the Excluded NCIC Shares and the other NCIC Common Shares (such
amendment, the "NCIC Charter Amendment");
(iv) (A) merge, consolidate or enter into any other business
combination transaction with any Person, (B) acquire (by merger,
consolidation or acquisition) any corporation, partnership or other entity
or (C) purchase any equity interest in, or all or substantially all of the
assets of, any Person or any division or business thereof;
(v) sell, transfer, subject to Lien, or otherwise dispose of any
of the Continuing MHGC Shares, owned beneficially or of record by NCIC, NSP
or any NCIC Subsidiary;
(vi) authorize, recommend, propose or announce an intention to
adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization of
NCIC or any of the NCIC Subsidiaries other than the adoption by the
shareholders of NCIC of the plan of liquidation that was previously adopted
by the NCIC Board of Directors on February 26, 2007 (the "Plan of
Liquidation"), provided that, except as provided in Section 5.1(c) below,
no action shall be
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taken to sell assets as contemplated by the Plan of Liquidation on or
before the earlier of the Termination Date or the Effective Time; or
(vii) agree in writing or otherwise to take any action
inconsistent with any of the foregoing.
(c) Notwithstanding anything to the contrary contained in this Section
5.1, NCIC and NSP shall be permitted to take the following actions: (i) duly
call, give notice of, convene and hold a stockholders meeting, for the purpose
of obtaining stockholder approval of the Plan of Liquidation; (ii) sell all of
the Non-Continuing MHGC Shares in the Sale, (iii) sell the assets of NSP listed
on Annex B so long as the prices therefore are at least equal to the minimum
prices set forth on Annex B and (iv) enter into and perform their respective
obligations under the Underwriting Agreement, the Lock-Up Agreements, the NCIC
Charter Amendment and documents ancillary thereto.
ARTICLE VI.
ADDITIONAL COVENANTS
Section 6.1 Proxy Statement; Stockholder Meeting.
(a) Proxy. As promptly as practicable after the date hereof, NCIC shall
prepare a proxy statement or an information statement relating to the
Stockholder Meeting (together with any amendments thereof or supplements
thereto, the "Proxy Statement"). NCIC Merger Sub and Partnership Merger Sub
shall furnish all information concerning the Purchaser Parties and their
Affiliates that NCIC may reasonably request in connection with the preparation
of the Proxy Statement. As promptly as practicable, NCIC shall mail the Proxy
Statement to its stockholders. The Proxy Statement shall include the approval of
the Mergers by the NCIC Board of Directors.
(b) Changes. NCIC Merger Sub and Partnership Merger Sub shall promptly
inform NCIC if, at any time prior to the Effective Time, any event or
circumstance relating to any of the Purchaser Parties should be discovered by
NCIC Merger Sub and Partnership Merger Sub that should be set forth in an
amendment or a supplement to the Proxy Statement. NCIC shall promptly inform
NCIC Merger Sub and Partnership Merger Sub if, at any time prior to the
Effective Time, any event or circumstance relating to NCIC, NSP or any NCIC
Subsidiary, should be discovered by NCIC that should be set forth in an
amendment or a supplement to the Proxy Statement.
(c) Accuracy of Information. Each Purchaser Party and each of NCIC and
NSP agrees, as to itself and its Subsidiaries, that none of the information
supplied by it or any of its Subsidiaries for inclusion or incorporation by
reference in the Proxy Statement will, at the date of mailing to stockholders of
NCIC or at the time of the Stockholder Meeting, contain any untrue statement of
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
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(d) Calling of Shareholders Meeting; NCIC Recommendation. Subject to
Sections 6.1(e) and 6.4, NCIC will, as soon as practicable following the date on
which the Proxy Statement is mailed to the stockholders of NCIC, duly call, give
notice of, convene and hold the Stockholder Meeting for the purpose of obtaining
the Stockholder Approval. Except as provided in Sections 6.1(e) and 6.4, the
NCIC Board of Directors shall recommend to its stockholders that they approve
and adopt this Agreement and the transactions contemplated by this Agreement,
including the Merger and the NCIC Charter Amendment (the "NCIC Recommendation"),
and the Proxy Statement shall include the NCIC Recommendation.
(e) Change in Recommendation. Notwithstanding any other provision of
this Agreement to the contrary, in the event that NCIC has received a proposal
from a Person for a Competing Transaction that the NCIC Board of Directors
concludes in good faith, after consultation with its outside counsel, is a
Superior Competing Transaction and that NCIC has complied with the provisions of
Section 6.4(b), then the NCIC Board of Directors shall be permitted to (i) not
recommend to the NCIC stockholders that they provide the Stockholder Approval,
(ii) withdraw or modify in a manner adverse to the Purchaser Parties its
recommendation to the NCIC stockholders that they give the Stockholder Approval,
or (iii) recommend such Superior Competing Transaction (each action described in
clauses (i) through (iii), a "Change in Recommendation").
Section 6.2 Reasonable Best Efforts. Upon the terms and subject to the
conditions set forth in this Agreement, each of the Purchaser Parties, NCIC and
NSP agrees to use its reasonable best efforts to take, or cause to be taken, all
actions and to do, or cause to be done, and to assist and cooperate with the
other parties in doing, all things necessary, proper or advisable to fulfill all
conditions applicable to such party pursuant to this Agreement and to consummate
and make effective, as promptly as reasonably practicable (it being the
understanding of the parties that they shall use all commercially reasonable
efforts to cause the Closing Date to take place no later than fifty (50) days
after the date of this Agreement), the Mergers and the other transactions
contemplated by this Agreement, including (i) the obtaining of all necessary,
proper or advisable actions or nonactions, waivers, consents and approvals from
Governmental Entities and other third parties and the making of all necessary,
proper or advisable registrations, filings and notices and the taking of all
reasonable steps as may be necessary to obtain an approval, waiver, consent or
exemption from any Governmental Entity, (ii) the obtaining of all necessary,
proper or advisable consents, approvals, waivers or exemptions from
non-governmental third parties, and (iii) the execution and delivery of any
additional documents or instruments necessary, proper or advisable to consummate
the transactions contemplated by, and to fully carry out the purposes of this
Agreement. The parties shall cooperate with each other and promptly prepare and
file all necessary documentation, effect all applications, notices, petitions
and filings (including, to the extent necessary, any notification required by
the HSR Act, which shall be filed by the Purchaser Parties no later than ten
days after the date of this Agreement), and shall use reasonable best efforts to
obtain as promptly as practicable all permits, consents, approvals and
authorizations of all third parties and Governmental Entities that are
necessary, appropriate or advisable to consummate the Merger and the other
transactions contemplated by this Agreement.
Section 6.3 No Solicitation of Transactions.
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(a) None of NCIC, NSP or any other NCIC Subsidiary shall, nor shall
they authorize, directly or indirectly, any officer, director, employee, agent,
investment banker, financial advisor, attorney, or other agent, representative
or Affiliate of NCIC, NSP or any other NCIC Subsidiary acting on their behalf to
initiate, solicit, knowingly encourage or knowingly facilitate (including by way
of furnishing nonpublic information or assistance) any inquiries or the making
of any proposal or other action that constitutes, or may reasonably be expected
to lead to, any Competing Transaction, or enter into discussions or negotiate
with any Person in furtherance of such inquiries or to obtain a Competing
Transaction. NCIC and NSP shall take, and NCIC shall cause the other NCIC
Subsidiaries to take, all actions reasonably necessary to cause their respective
officers, directors, employees, investment bankers, financial advisors,
attorneys, and any other agents, representatives or Affiliates to, immediately
cease any discussions, negotiations or communications with any party or parties
with respect to any Competing Transaction. NCIC, NSP and the NCIC Subsidiaries
shall be responsible for any failure on the part of their respective officers,
directors, employees, investment bankers, financial advisors, attorneys,
brokers, finders and any other agents, representatives or Affiliates to comply
with this Section 6.3(a).
(b) NCIC and NSP shall notify the Purchaser Parties, promptly following
receipt, of the material terms of any written proposal (including the identity
of the parties) which any of NCIC, NSP or any of the other NCIC Subsidiaries or
any such officer, director, employee, agent, investment banker, financial
advisor, attorney, or other representative or Affiliate may receive after the
date hereof relating to a Competing Transaction and shall keep the Purchaser
Parties reasonably informed as to the status of and any material developments
regarding any such proposal.
(c) For purposes of this Agreement, a "Competing Transaction" means any
of the following (other than the transactions expressly provided for in this
Agreement): (i) any merger, consolidation, share exchange, business combination
or similar transaction involving NCIC or NSP; (ii) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of any of the Continuing MHGC
Shares (in each case, including by means of an issuance, sale or other
disposition of voting securities) of NCIC and the NCIC Subsidiaries, taken as a
whole, or of 15% or more of any class of voting securities of NCIC, NSP or any
of the NCIC Subsidiaries, in a single transaction or series of related
transactions, excluding any bona fide financing transactions that do not,
individually or in the aggregate, have as a purpose or effect the sale or
transfer of control of such assets; or (iii) any tender offer or exchange offer
for 15% or more of any class of voting securities of NCIC or NSP.
(d) Superior Competing Transaction. For purposes of this Agreement, a
"Superior Competing Transaction" means a bona fide written proposal for (i) any
merger, consolidation, share exchange, business combination or similar
transaction involving NCIC, (ii) any sale, lease, exchange, mortgage, pledge
transfer or other disposition of all or a substantial portion of the Continuing
MHGC Shares of NCIC and the NCIC Subsidiaries, or of 50% or more of the voting
securities of NCIC or (iii) any tender offer or exchange offer for 50% or more
of the voting securities of NCIC that the NCIC Board of Directors determines, in
good faith and after consultation with its legal advisors, is reasonably capable
of being financed and consummated and is on terms that, if consummated, are more
favorable to the NCIC stockholders, from a fi-
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nancial point of view, than the Mergers (taking into account any changes to the
Merger Consideration and Partnership Merger Consideration committed to in
writing by the Purchaser Parties).
Section 6.4 Board Actions.
(a) Receipt of Proposal. Following the receipt by NCIC or any of its
Subsidiaries of a proposal from a Person for a Competing Transaction as
contemplated in Section 6.3(b), and provided that NCIC and NSP are not in breach
of Section 6.3(a), the NCIC Board of Directors may, directly or through any of
its Representatives, (i) contact such Person and its Representatives for the
purpose of clarifying the proposal and any material terms thereof and the
capability of consummation, so as to determine whether the proposal for a
Competing Transaction is reasonably likely to lead to a Superior Competing
Transaction and (ii) if the NCIC Board of Directors determines in good faith
following consultation with its legal advisors that such proposal for a
Competing Transaction is reasonably likely to lead to a Superior Competing
Transaction, the NCIC Board of Directors may (directly or through its
Representatives) (A) furnish non-public information with respect to NCIC and its
Subsidiaries to the Person that made such proposal, (B) participate in
discussions and negotiations with such Person regarding such proposal and (C)
subject to Sections 6.3(b) and 6.4(b), following receipt of a proposal for a
Competing Transaction that the NCIC Board of Directors determines in good faith
is reasonably likely to lead to a Superior Competing Transaction, but prior to
the Stockholder Approval, make a Change in Recommendation. Nothing in this
Agreement shall prevent the NCIC Board of Directors from (1) complying with Rule
14d-9 or Rule 14e-2(a) promulgated under the Exchange Act with respect to a
Competing Transaction, (2) issuing a "stop, look and listen" announcement, (3)
complying with its disclosure obligations under U.S. federal or state law
regarding a Competing Transaction or (4) taking any action that any court of
competent jurisdiction orders NCIC to take.
(b) Change in Recommendation. The NCIC Board of Directors shall not
effect any Change in Recommendation with respect to a Superior Competing
Transaction unless the NCIC Board of Directors has given the Purchaser Parties
at least forty-eight (48) hours' notice of its intent to take such action.
Section 6.5 Public Announcements. Except as provided in Section 6.3(a),
NCIC, NSP and the Purchaser Parties shall consult with each other before issuing
any press release or otherwise making any public statements or filings with
respect to this Agreement or any of the transactions contemplated hereby and
shall not issue any such press release or make any such public statement or
filing without the prior consent of the other party, which consent shall not be
unreasonably withheld or delayed; provided, however, that a party may, without
the prior consent of the other party, issue such press release or make such
public statement or filing as may be required by Law or the applicable rules of
any stock exchange if it has used its commercially reasonable efforts to consult
with the other party and to obtain such party's consent but has been unable to
do so prior to the time such press release or public statement or filing is
required to be released, filed or furnished pursuant to such Law.
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Section 6.6 Indemnification; Directors' and Officers' Insurance.
(a) In the event of any threatened or actual claim, action, suit,
demand, proceeding or investigation, whether civil, criminal or administrative
(each, an "Action"), including any Action in which any person who is now, or has
been at any time prior to the date hereof, or who becomes prior to the Effective
Time, a trustee, director, officer or employee of the NCIC or any of its
Subsidiaries (each, an "Indemnified Party" and collectively, the "Indemnified
Parties") is, or is threatened to be, made a party based in whole or in part on,
or arising in whole or in part out of, or pertaining to (i) the fact that he or
she is or was a trustee, director, officer, employee, or agent of NCIC or any of
its Subsidiaries, or is or was serving at the request of NCIC or any of its
Subsidiaries as a director, officer, employee, partner, member or agent of
another corporation, partnership, joint venture, trust or other enterprise, in
each case at or prior to the Effective Time or (ii) the negotiation, execution
or performance of this Agreement, any agreement or document contemplated hereby
or delivered in connection herewith, or any of the transactions contemplated
hereby, from and after the Effective Time, the Surviving Company (together with
the Company, the "Indemnitors"), shall jointly and severally indemnify and hold
harmless, as and to the fullest extent that a Maryland corporation is permitted
under applicable Law to indemnify its own officers and directors, each
Indemnified Party against any losses, claims, damages, liabilities, costs,
expenses (including reasonable attorneys' fees and expenses), judgments, fines
and amounts paid in settlement in connection with any such Action (collectively,
"Indemnifiable Amounts"), and in the event of any such Action (whether asserted
before or after the Effective Time), the Indemnitors shall promptly (but in any
event within ten (10) calendar days of written request) advance expenses pending
the final disposition of any such Action to each Indemnified Party to the
fullest extent permitted by applicable Law.
(b) The Indemnitors shall have the right to defend each Indemnified
Party in any Action that may give rise to the payment of Indemnifiable Amounts
hereunder; provided, however, that the Indemnitors shall notify such Indemnified
Party of any such decision to defend within twenty (20) calendar days of receipt
of written notice of any such Action, and provided, further, that the
Indemnitors shall not, without the prior written consent of such Indemnified
Party, consent to the entry of any judgment against such Indemnified Party or
enter into any settlement or compromise that (i) includes an admission of fault
of such Indemnified Party or (ii) does not include, as an unconditional term
thereof, the full release of such Indemnified Party from all liability in
respect of such Action, which release shall be in form and substance reasonably
satisfactory to such Indemnified Party.
(c) Notwithstanding Section 6.6(b), if in an Action to which an
Indemnified Party is a party by reason of the Indemnified Party's service as a
trustee, director, officer, employee, or agent of NCIC or any of its
Subsidiaries, (i) such Indemnified Party reasonably concludes, after
consultation with counsel, that he or she may have separate defenses or
counterclaims to assert with respect to any issue which may not be consistent
with the position of other defendants in such Action, (ii) a conflict of
interest or potential conflict of interest exists between such Indemnified Party
and the Indemnitors, or (iii) the Indemnitors fail to assume the defense of such
Action in a timely manner, such Indemnified Party shall be entitled to be
represented by separate legal counsel of such Indemnified Party's choice at the
expense of the Indemnitors; provided, however, that none of the Indemnitors
shall be liable for any settlement effected without its prior written consent
(which consent shall not be unreasonably withheld, con-
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ditioned or delayed) and provided, further, that the Surviving Corporation shall
not be responsible for more than one counsel for all Indemnified Parties, taken
as a whole. Subject to the prior sentence, for the avoidance of doubt, each
Indemnified Party represented by counsel in any Action on or prior to the
Closing Date may, at such Indemnified Party's election, continue to be
represented by such counsel at the expense of the Indemnitors.
(d) The Purchaser Parties agree that all rights to indemnification and
contribution existing in favor of, and all exculpations and limitations of the
personal liability of, the Indemnified Parties provided for in the NCIC Charter
or the NCIC Bylaws, as well as indemnification agreements, as in effect as of
the date hereof, with respect to matters occurring at or prior to the Effective
Time, including the Merger, shall continue in full force and effect in
accordance with their terms. NCIC shall, prior to the Effective Time, obtain and
fully pay for a policy (providing coverage for the Indemnified Parties) with a
claims period of at least six (6) years from the Effective Time from an
insurance carrier with the same or better credit rating as NCIC's current
insurance carrier with respect to directors' and officers' liability insurance
in an amount and scope no less favorable than NCIC's existing policies with
respect to matters existing or occurring at or prior to the Effective Time. From
and after the Effective Time, the Purchaser Parties and the Surviving Company
shall maintain such policy in full force and effect for its full term and shall
continue to honor NCIC's obligations thereunder. The Purchaser Parties will
promptly notify the Indemnified Parties if for any reason such policy will lapse
prior to the conclusion of its six-year term, upon the Purchaser Parties
receiving notice thereof from the insurer or otherwise obtaining knowledge
thereof.
(e) This Section 6.6 is intended for the irrevocable benefit of, and to
grant third party rights to, the Indemnified Parties and shall be binding on all
successors and assigns of NCIC and the Surviving Company. Each of the
Indemnified Parties shall be entitled to enforce the covenants contained in this
Section 6.6.
(f) In the event that the Surviving Company (i) consolidates with or
merges into any other person or entity and shall not be the continuing or
surviving entity of such consolidation or merger or (ii) transfers or conveys
all or substantially all of its properties and assets to any person or entity,
then, and in each such case, such continuing or surviving entity or transferee,
as the case may be, shall assume the obligations set forth in this Section 6.6.
Section 6.7 Fairness Opinion. NCIC shall use its commercially
reasonable efforts to obtain as promptly as practicable a written opinion from a
financial advisor approved by the NCIC Board of Directors regarding the
fairness, from a financial point of view, of the Merger Consideration and the
Partnership Merger Consideration to the holders of NCIC Common Shares and LP
Units (in each case, other than ES, DH and their affiliates) (such opinion, the
"Fairness Opinion").
ARTICLE VII.
CONDITIONS PRECEDENT
Section 7.1 Conditions to Each Party's Obligation to Effect the
Mergers. The respective obligations of NCIC, NSP and the Purchaser Parties to
effect the Mergers and the other
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transactions contemplated by this Agreement on the Closing Date are subject to
the satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Stockholder Approval. The Stockholder Approval of the Merger and of
the NCIC Charter Amendment shall have been obtained.
(b) No Injunctions or Restraints. No applicable Law shall have been
adopted, promulgated or enforced by any Governmental Entity, and no temporary
restraining order, preliminary or permanent injunction or other Order issued by
any court of competent jurisdiction, or other legal restraint or prohibition
preventing the consummation of the Merger, the Partnership Merger or any of the
other transactions or agreements contemplated by this Agreement shall be in
effect.
(c) HSR Act Clearance. Any waiting periods applicable to the
transaction shall have expired or been earlier terminated.
(d) Transfer of Non-Continuing MHGC Shares. Either, (i) all of the
Non-Continuing MHGC Shares shall have been sold in the Sale on or prior to
August 10, 2007 (the "Sale Date"), or (ii) if the Sale has not been effected by
the Sale Date, (x) the NCIC Board of Directors, shall, in its sole discretion,
have elected to cause a distribution to the shareholders of NCIC of all of the
Combined MHGC Shares and (y) NCIC, as the general partner and a limited partner
of NSP, shall, in its sole discretion, have elected to cause a pro rata
distribution in kind of all of the NSP-Owned MHGC Shares, such election in each
case within 10 Business Days of the Sale Date (such actions described in clause
(ii), collectively, the "NCIC Distribution Election"). For the avoidance of
doubt, in no event shall either the NCIC Board of Directors or NCIC have any
obligation whatsoever to make an NCIC Distribution Election or to cause a pro
rata distribution in kind of any of the NCIC-Owned MHGC Shares or NSP-Owned MHGC
Shares, respectively.
(e) NCIC Charter Amendment. The NCIC Charter Amendment shall have been
filed and accepted in accordance with the MGCL.
Section 7.2 Conditions to Obligations of Purchaser Parties. The
obligations of the Purchaser Parties to effect the Mergers and the other
transactions contemplated by this Agreement on the Closing Date are further
subject to the following conditions, any one or more of which may be waived by
any of the Purchaser Parties, subject to applicable Law:
(a) Representations and Warranties of NCIC. The representations and
warranties of NCIC and NSP set forth in this Agreement shall be true and correct
as of the date hereof and as of the Closing Date as if made on and as of the
Closing Date (except to the extent that any such representation or warranty, by
its terms, is expressly limited to a specific date, in which case, as of such
specific date), except where the failure of any such representation or warranty
to be so true and correct would not, individually or in the aggregate,
constitute an NCIC Material Adverse Effect.
(b) Performance of Covenants and Agreements of NCIC. NCIC and NSP shall
have performed in all material respects all covenants and agreements required to
be performed by them under this Agreement at or prior to the Effective Time.
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(c) Officer's Certificate. Purchaser shall have received a certificate
signed on behalf of NCIC by an executive officer of NCIC to the effect specified
in Sections 7.2(a) and 7.2(b)
Section 7.3 Conditions to Obligations of NCIC and NSP. The obligations
of NCIC and NSP to effect the Mergers and the other transactions contemplated by
this Agreement on the Closing Date are further subject to the following
conditions, any one or more of which may be waived by NCIC and NSP, subject to
applicable Law:
(a) Representations and Warranties of Purchaser Parties. The
representations and warranties of the Purchaser Parties set forth in this
Agreement shall be true and correct as of the date hereof and as of the Closing
Date as if made on and as of the Closing Date (except to the extent that any
such representation or warranty, by its terms, is expressly limited to a
specific date, in which case, as of such specific date), except where the
failure of any such representation or warranty to be so true and correct would
not, individually or in the aggregate, constitute a Purchaser Material Adverse
Effect.
(b) Performance of Covenants and Agreements of Purchaser Parties. The
Purchaser Parties shall have performed in all material respects all covenants
and agreements required to be performed by them under this Agreement at or prior
to the Effective Time.
(c) Officer's Certificate. NCIC shall have received a certificate
signed on behalf of NCIC Merger Sub and Partnership Merger Sub by an executive
officer of NCIC Merger Sub and Partnership Merger Sub to the effect specified in
Sections 7.3(a) and 7.3(b).
(d) Fairness Opinion. NCIC shall have received the Fairness Opinion.
ARTICLE VIII.
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time whether before or after the Stockholder Approval:
(a) by the mutual written consent of NCIC, NCIC Merger Sub and
Partnership Merger Sub;
(b) by NCIC or NCIC Merger Sub or Partnership Merger Sub, if the Merger
shall not have occurred on or prior to the date that is 50 days from the date of
this Agreement (the "Termination Date"); provided, however, that a party that
has materially failed to comply with any obligation of such party set forth in
this Agreement shall not be entitled to exercise its right to terminate under
this Section 8.1(b);
(c) by NCIC or NCIC Merger Sub or Partnership Merger Sub, if any Order
by any Governmental Entity of competent authority preventing the consummation of
the Merger shall have become final and nonappealable; or
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(d) by NCIC or NCIC Merger Sub or Partnership Merger Sub if, upon a
vote at the Stockholder Meeting (or any adjournment or postponement thereof),
the Stockholder Approval shall not have been obtained.
(e) by NCIC, if all the closing conditions set forth in Section 7.1 and
Section 7.3 have been satisfied (or are capable of being satisfied) and the
Exchange Fund shall not have been fully funded, no later than three (3) Business
Days prior to the Termination Date, in accordance with Section 2.5(a); or
(f) by NCIC or any Purchaser Party (provided that the terminating party
is not then in material breach of any representation, warranty, covenant or
other agreement contained herein), if (i) there shall have been a material
breach of any of the representations, warranties, covenants or agreements set
forth in this Agreement on the part of the other party, (ii) such breach has
rendered the satisfaction of any conditions contained in Article VII hereof
impossible, (iii) such breach has not been waived in writing by the terminating
party; (iv) such breach has not been cured (following written notice thereof by
the terminating party) on or prior to the third (3rd) Business Day prior to the
Termination Date and (v) such breach has had or would have, individually or in
the aggregate, a material adverse effect on the ability of the breaching party
to timely consummate the Mergers and the other transactions contemplated hereby;
or
(g) by NCIC, if the Sale shall not have been consummated by the Sale
Date, except if the NCIC Board of Directors have elected to cause the NCIC
Distribution Election within ten (10) Business Days of the Sale Date as
contemplated in Section 7.1(d).
A terminating party shall provide written notice of termination to the
other parties specifying with particularity the basis for such termination. If
more than one provision in this Section 8.1 is available to a terminating party
in connection with a termination, a terminating party may rely on any or all
available provisions in this Section 8.1 for any such termination.
Section 8.2 Break-Up Fee. NCIC, NSP and each Purchaser Party agree
that:
(a) NCIC, NSP and each Purchaser Party agree that:
(i) if a Purchaser Party shall terminate this Agreement pursuant
to (i) Section 8.1(d) (No Stockholder Approval), if prior to the
Termination Date there shall have been a Superior Competing Proposal and a
Change of Recommendation or (ii) 8.1(f) (Material Breach), then NCIC shall
pay to the Purchaser Parties, collectively, an amount equal to the Break-Up
Fee; and
(ii) if NCIC shall terminate this Agreement pursuant to Section
8.1(e) (No Funding of Exchange Fund) or Section 8.1(f) (Material Breach),
then the Purchaser Parties, collectively, shall pay to NCIC an amount equal
to the Reverse Break-Up Fee.
(b) For purposes of this Agreement, the "Break-Up Fee" shall be an
amount equal to Five Million Dollars ($5,000,000). Payment of the Break-Up Fee
shall be made, as directed by the Purchaser Parties, by wire transfer of
immediately available funds.
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(c) For purposes of this Agreement, the "Reverse Break-Up Fee" shall be
an amount equal to Five Million Dollars ($5,000,000). Payment of the Reverse
Break-Up Fee shall be made, at the election of the Purchaser Parties, (i) by
wire transfer of immediately available funds and/or (ii) by allowing NCIC to
retain and apply a portion (not to exceed the amount of the Reverse Break-Up
Fee) of any proceeds otherwise distributable to ES or DH or their affiliates as
a result of any sale by NCIC or NSP of the Continuing MHGC Shares or NSP-Owned
MHGC Shares, as applicable or (if there is to be a distribution to stockholders
of NCIC of MHGC Shares) a portion of any MHGC Shares otherwise to be distributed
to ES or DH or their affiliates. NCIC shall have the absolute right to satisfy
any obligations with respect to the Reverse Break-Up Fee which are not
discharged by wire transfer of immediately available funds either by using the
proceeds or by transfer of shares, duly endorsed or accompanied by an instrument
of transfer, described in clause (ii) above.
Section 8.3 Effect of Termination. In the event of termination of this
Agreement by any party as provided in Section 8.1, this Agreement shall
forthwith become void and have no effect, without any liability or obligation on
the part of any party, other than as provided in this Article VIII, provided,
however, that nothing contained herein shall relieve any person of liability for
fraud or a willful breach or NCIC Merger Sub and Partnership Merger Sub's
failure to pay the Merger Consideration or the Partnership Merger Consideration
upon the satisfaction or waiver of the conditions to Closing set forth in
Article VII.
Section 8.4 Authorization. Each of ES and DH hereby expressly
authorizes NCIC to retain and apply from the portion (not to exceed the amount
of the Reverse Break-Up Fee) of any proceeds otherwise distributable to ES or DH
or their affiliates as a result of any sale by NCIC or NSP of the Continuing
MHGC Shares or NSP-Owned MHGC Shares, or (if there is to be a distribution to
stockholders of NCIC of MHGC Shares) the portion of any MHGC Shares otherwise to
be distributed to ES, DH or their affiliates, the amount necessary to satisfy
any obligations that exist with respect to the Reverse Break-Up Fee that have
not been discharged by wire transfer of immediately available funds or by
transfer of shares, duly endorsed or accompanied by an instrument of transfer,
as described in Section 8.2(c) above. The obligations of ES and DH set forth in
this Agreement are several and not joint. and shall be divided equally among
them. ES as DH are each fully responsible for 50% of any obligations of the
other Purchaser Parties.
Section 8.5 Maximum Recovery.
(a) Notwithstanding any other provision of this Agreement to the
contrary, if any Purchaser Party fails to effect the Closing or otherwise are in
breach of this Agreement, then the aggregate liability of the Purchaser Parties
and any of their respective former, current and future direct or indirect equity
holders, controlling persons, stockholders, directors, officers, employees,
agents, Affiliates, members, managers, general or limited partners or assignees
shall be limited to the amount of the Reverse Break-Up Fee and none of the
Purchaser Parties or any of their respective former, current and future direct
or indirect equity holders, controlling persons, stockholders, directors,
officers, employees, agents, Affiliates, members, managers, general or limited
partners or assignees shall have any further liability or obligation relating to
or arising out of this Agreement or the transactions contemplated hereby except
as expressly provided herein.
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(b) Notwithstanding any other provision of this Agreement to the
contrary, if NCIC and NSP fail to effect the Closing or otherwise are in breach
of this Agreement, then the aggregate liability of NCIC, NSP and any of the
respective former, current and future direct or indirect equity holders,
controlling persons, stockholders, directors, officers, employees, agents,
Affiliates, members, managers, general or limited partners or assignees shall be
limited to the amount of the Break-Up Fee and none of the NCIC, NSP or any of
their respective former, current and future direct or indirect equity holders,
controlling persons, stockholders, directors, officers, employees, agents,
Affiliates, members, managers, general or limited partners or assignees shall
have any further liability or obligation relating to or arising out of this
Agreement or the transactions contemplated hereby except as expressly provided
herein.
Section 8.6 Amendment. Notwithstanding anything to the contrary herein,
this Agreement may be amended, and compliance with any provision hereof may be
waived (or the time for performance of any obligation extended), by mutual
agreement of NCIC Merger Sub, Partnership Merger Sub and NCIC in writing at any
time before or after the Stockholder Approval is obtained and prior to the
filing of the Articles of Merger with the Maryland Department with respect to
the Merger; provided, however, that, after the Stockholder Approval is obtained,
no such amendment, modification or supplement shall be made that would under
applicable Law require the approval of the holders of NCIC Common Shares without
obtaining such approval. The failure of any party to this Agreement to assert
any of its rights under this Agreement or otherwise shall not constitute a
waiver of those rights.
ARTICLE IX.
GENERAL PROVISIONS
Section 9.1 Nonsurvival of Representations and Warranties. None of the
representations, warranties or covenants in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time, provided,
however, that Section 6.6, Article VIII and Section 9.14 shall survive the
Effective Time.
Section 9.2 Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing (and also made orally if
so required pursuant to any Section of the Agreement) and shall be deemed given
if delivered personally, sent by overnight courier (providing proof of delivery)
to the parties or sent by telecopy (providing confirmation of transmission) at
the following addresses or telecopy numbers (or at such other address or
telecopy number for a party as shall be specified by like notice):
if to Purchaser Parties, to:
x/x Xxxxxx Xxxxxxx
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
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with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
Xxxxx Xxxx, Jr.
if to NCIC or NSP, to:
Northstar Capital Investment Corp.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. XxXxxxxx
with a copy to:
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
and
NCIC Special Committee
c/o Grove International Partners LLP
000 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxx
and
Xxxxxxxx Xxxxx & Orbe LLP
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxx
and
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Xxxxxxx LLP
Xxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
and
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
Xxxxx Xxxx, Jr.
Section 9.3 Interpretation. When a reference is made in this Agreement
to an Article or a Section, such reference shall be to an Article or a Section
of this Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation." The words "hereof,"
"herein" and "hereby" refer to this Agreement. Any singular term in this
Agreement shall be deemed to include the plural, and any plural term the
singular.
Section 9.4 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any of the provisions of this
Agreement were not to be performed in accordance with the terms hereof and that
the parties shall be entitled to specific performance of the terms hereof in
addition to any other remedies at law or in equity.
Section 9.5 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties. Facsimile transmission of any
signature and/or retransmission of any signature will be deemed the same as
delivery of an original. At the request of any party, the parties will confirm
facsimile transmission by signing a duplicate original document.
Section 9.6 Entire Agreement; No Third-Party Beneficiaries. This
Agreement and the Voting Agreements constitute the entire agreement and
supersede all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter of this Agreement. This
Agreement is not intended to and shall not confer upon any Person other than the
parties hereto any rights or remedies hereunder.
Section 9.7 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MARYLAND, WITHOUT REGARD
TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
Section 9.8 Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned or delegated, in
whole or in part, by operation
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of law or otherwise by any of the parties without the prior written consent of
the other parties, provided that each of NCIC Merger Sub and Partnership Merger
Sub shall be permitted to transfer or assign to one of its Affiliates the right
to enter into the transactions contemplated by this Agreement, but no such
transfer or assignment shall relieve such Person of its obligations hereunder.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of, and be enforceable by, the parties and their respective
successors and assigns.
Section 9.9 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other Governmental Entity to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such a determination, the parties 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 in order that the transactions
contemplated hereby be consummated as originally contemplated to the fullest
extent possible.
Section 9.10 Exhibits; Disclosure Letter. The Exhibits referred to
herein and the NCIC Disclosure Letter, and all exhibits or attachments hereto or
thereto, are intended to be and hereby are specifically made a part of this
Agreement. Any matter set forth in any section or subsection of the NCIC
Disclosure Letter shall be deemed to be a disclosure for all purposes of this
Agreement and all other sections or subsections of the NCIC Disclosure Letter,
but shall expressly not be deemed to constitute an admission by the NCIC or any
of the NCIC Subsidiaries, or otherwise imply, that any such matter rises to the
level of an NCIC Material Adverse Effect, or is otherwise material for purposes
of this Agreement or the NCIC Disclosure Letter.
Section 9.11 Mutual Drafting. This Agreement shall be construed without
regard to any presumption or rule requiring construction or interpretation
against the party drafting or causing this Agreement to be drafted.
Section 9.12 Jurisdiction; Venue. THE PARTIES HEREBY IRREVOCABLY SUBMIT
TO THE JURISDICTION OF THE COURTS OF THE STATE OF MARYLAND AND THE FEDERAL
COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE OF MARYLAND SOLELY
IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS
AGREEMENT AND OF THE DOCUMENTS REFERRED TO IN THIS AGREEMENT, AND IN RESPECT OF
THE TRANSACTIONS CONTEMPLATED HEREBY, AND HEREBY WAIVE, AND AGREE NOT TO ASSERT,
AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR THE INTERPRETATION OR
ENFORCEMENT HEREOF OR OF ANY SUCH DOCUMENT, THAT IT IS NOT SUBJECT THERETO OR
THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE
IN SAID COURTS OR THAT THE VENUE THEREOF MAY NOT BE APPROPRIATE OR THAT THIS
AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS, AND THE
PARTIES HERETO IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO SUCH ACTION OR
PROCEEDING SHALL BE HEARD AND DETERMINED SOLELY IN SUCH A MARYLAND STATE OR
FEDERAL COURT. THE PARTIES HEREBY CONSENT TO AND GRANT ANY SUCH COURT
JURISDICTION OVER THE PERSON OF SUCH PARTIES
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AND OVER THE SUBJECT MATTER OF SUCH DISPUTE AND AGREE THAT MAILING OF PROCESS OR
OTHER PAPERS IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING IN THE MANNER
PROVIDED IN SECTION 9.2 OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY
APPLICABLE LAWS, SHALL BE VALID AND SUFFICIENT SERVICE THEREOF.
Section 9.13 Waiver of Trial by Jury. EACH PARTY ACKNOWLEDGES AND
AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF
THIS WAIVER, (C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH
SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.13.
Section 9.14 Expenses.
(a) Purchaser Parties. Notwithstanding any other provision of this
Agreement to contrary, in the event that the Mergers are not consummated, each
of the Purchaser Parties agrees that it will be responsible for payment of any
legal expenses incurred by them in connection with this Agreement and the
transactions contemplated hereby, and that it shall have no right to seek
reimbursement of such expenses from any other party. In the event that the
Mergers are consummated, all fees and expenses incurred by the Purchaser Parties
in connection with this Agreement and the transactions contemplated hereby,
shall be included in the Per Share Transaction Expenses.
(b) NCIC, NSP and NCIC Special Committee. Notwithstanding any other
provision of this Agreement to contrary, the expenses incurred by NCIC, NSP and
the NCIC Special Committee, including, without limitation, the fees and expenses
of Xxxxxxx LLP, Xxxxxxxx & Xxxxxxxx LLP and Xxxxxxxx Xxxxx & Orbe LLP, the fees
for the Fairness Opinion, and the fees for the policy contemplated by Section
6.6(d), in connection with this Agreement and the transactions contemplated
hereby shall be paid by NCIC.
ARTICLE X.
CERTAIN DEFINITIONS
Section 10.1 Certain Definitions.
(a) For purposes of this Agreement:
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"Affiliate" of any Person has the meaning assigned thereto by Rule
12b-2 under the Exchange Act.
"Business Day" means any day other than a Saturday, Sunday or a day on
which banking institutions in New York, New York are authorized or obligated by
law or executive order to be closed.
"Combined MHGC Shares" means 9,908,114 MHGC Shares (which is determined
by adding (i) the 9,122,521 NCIC-Owned MHGC Shares plus (ii) 75.38% of the
1,042,177 NSP-Owned MHGC Shares).
"Code" means the Internal Revenue Code of 1986, as amended.
"Delaware Secretary of State" means the Secretary of State of the State
of Delaware.
"Law" means any federal, state or local or foreign statute, law,
regulation, permit, license, approval, authorization, rule, ordinance or code of
any Governmental Entity, including any judicial or administrative interpretation
thereof.
"Liens" means any and all pledges, claims, liens, charges, proxies,
preemptive rights, voting trusts, voting agreements, options, rights of first
offer or refusal, encumbrances and security interests of any kind or nature
whatsoever.
"LLC Act" means the Delaware Limited Liability Company Act.
"Lock Up Letters" means the Lock Up Letters dated on or about the date
hereof to Xxxxxx Xxxxxxx & Co. Incorporated and Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated in connection with the MHGC public offering of common stock,
$.01 par value per share.
"MHGC" means Morgans Hotel Group Co., a Delaware corporation.
"MHGC Share" means a share of common stock, par value $0.01 per share,
of MHGC.
"NAV Calculations" means the net asset value calculations and related
information, dated as of July 10, 2007, prepared by management and distributed
to the NCIC Board of Directors.
"NCIC Bylaws" means the bylaws of NCIC in effect as of the date hereof.
"NCIC Charter" means the charter of NCIC in effect as of the date
hereof.
"NCIC Material Adverse Effect" means any change or effect that has a
material adverse effect on the ability of NCIC or NSP to timely consummate the
Mergers and the other transactions contemplated hereby.
"NCIC Special Committee" means the special committee of the NCIC Board
of Directors that was formed pursuant to resolutions dated April 16, 2007 and
confirmed and ratified pursuant to resolutions dated April 26, 2007.
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"NCIC Subsidiary" means each Subsidiary of NCIC; provided, however, the
entities disclosed in Section 10.1 of the NCIC Disclosure Letter shall not be
Subsidiaries of NCIC for purposes of this Agreement.
"NSP Partnership Agreement" means the limited partnership agreement of
NSP.
"Order" means any award, judgment, injunction, consent, ruling, decree
or order (whether temporary, preliminary or permanent) issued, adopted, granted,
awarded or entered into by any Governmental Entity or private arbitrator of
competent jurisdiction.
"Outstanding NCIC Common Shares" means all outstanding NCIC Common
Shares, less all such NCIC Common Shares owned by any wholly owned subsidiary of
NCIC. As of the date hereof, there are 20,946,891 Outstanding NCIC Common
Shares.
"Person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity.
"Purchaser Material Adverse Effect" means any change or effect that has
a material adverse effect on the ability of any Purchaser Party to timely
consummate the Mergers and the other transactions contemplated hereby.
"Representatives" means, with respect to any Person, such Person's
officers, trustees, directors, employees, agents, representatives, investment
bankers, financial advisors, attorneys, brokers, finders, Affiliates and other
representatives.
"Solvent" means, with respect to any Person, as of the date of
determination: (i) the fair value of the assets of such Person (individually)
and such Person and its Subsidiaries on a consolidated basis, at a fair
valuation, will exceed the debts and liabilities, direct, subordinated,
contingent or otherwise, of such Person (individually) and such Person and its
Subsidiaries on a consolidated basis, respectively; (ii) the present fair
saleable value of the property of such Person (individually) and such Person and
its Subsidiaries on a consolidated basis, will be greater than the amount that
will be required to pay the probable liability of such Person (individually) and
such Person and its Subsidiaries on a consolidated basis, respectively, on their
debts and other liabilities, direct, subordinated, contingent or otherwise, as
such debts and other liabilities become absolute and matured; (iii) such Person
(individually) and such Person and its Subsidiaries on a consolidated basis will
be able to pay their debts and liabilities, direct, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured; and (iv)
such Person (individually) and such Person and its Subsidiaries on a
consolidated basis will not have unreasonably small capital with which to
conduct the businesses in which they are engaged as such businesses are now
conducted and are proposed to be conducted following the Closing Date.
"Subsidiary" of any Person means any corporation, partnership, limited
liability company, joint venture or other legal entity of which (i) such Person,
or its Subsidiary, is the general partner or manager or (ii) such Person (either
directly or through or together with another Subsidiary of such Person) owns
more than 50% of the voting stock or value of such corporation, partnership,
limited liability company, joint venture or other legal entity.
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"Tax" or "Taxes" means any U.S. federal, state, local and foreign taxes
and similar governmental charges (together with any interest, penalties, or
additions thereto), including income, gross receipts, license, withholding,
property, recording, stamp, sales, use, franchise, employment, payroll, excise,
environmental, value added, or gains taxes.
"Underwriting Agreement" means the Underwriting Agreement dated on or
about the date hereof among MHGC, Xxxxxx Xxxxxxx & Co. Incorporated and Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated.
(b) Each of the following additional terms is defined in the Section
set forth opposite such term:
TERM SECTION
---- -------
Action.........................................................6.6(a)
Agreement......................................................Preamble
Articles of Merger.............................................1.3(b)
Capitalization Date............................................3.2(a)
Change in Recommendation.......................................6.1(e)
Closing........................................................1.2.
Closing Date...................................................1.2.
Competing Transaction..........................................6.3(c)
Continuing MHGC Shares.........................................Recitals
DH.............................................................Preamble
Dissenting NCIC Shares.........................................2.7.
Dissenting Stockholder.........................................2.7.
DRULPA.........................................................Recitals
Effective Time.................................................1.3(b)
ES.............................................................Preamble
Exchange Act...................................................3.4.
Exchange Agent.................................................2.5(a)
Exchange Fund..................................................2.5(a)
Excluded NCIC Shares...........................................2.1(a)
Excluded Unit..................................................2.2(b)
Fairness Opinion...............................................6.7
Governmental Entity............................................2.5(e)
GP Units.......................................................3.2(b)
HSR Act........................................................3.4.
Indemnifiable Amounts..........................................6.6(a)
Indemnified Parties............................................6.6(a)
Indemnified Party..............................................6.6(a)
Indemnitors....................................................6.6(a)
Letter of Transmittal..........................................2.5(b)(ii)
LP Unit........................................................Recitals
Maryland Department............................................1.3(b)
Merger.........................................................1.1(b)
Merger Consideration...........................................2.1(b)
Merger Sub Bylaws..............................................2.3(a)
Merger Sub Charter.............................................2.3(a)
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Mergers........................................................1.1(b)
MHGC...........................................................Recitals
MHGC Common Stock..............................................Recitals
MGCL...........................................................Recitals
NCIC...........................................................Preamble
NCIC and NSP Contribution......................................2.5(a)
NCIC Board of Directors........................................Recitals
NCIC Charter Amendment.........................................5.1(b)(iii)
NCIC Common Share Certificates.................................2.5(b)(ii)
NCIC Common Shares.............................................Recitals
NCIC Disclosure Letter.........................................Art. III
NCIC Distribution Election.....................................7.1(d)
NCIC Merger Sub................................................Preamble
NCIC-Owned MHGC Common Stock...................................Recitals
NCIC-Owned MHGC Shares.........................................Recitals
NCIC Recommendation............................................6.1(d)
Non-Continuing MHGC Shares.....................................Recitals
NSP............................................................Preamble
Partnership Certificate of Merger..............................1.3(a)
Partnership Merger.............................................1.1(a)
Partnership Merger Consideration...............................2.2(a)
Partnership Merger Effective Time..............................1.3(a)
Partnership Merger Sub.........................................Preamble
Per Share Transaction Expenses.................................2.1(b)
Plan of Liquidation............................................5.1(b)(vi)
Proxy Statement................................................6.1(a)
Purchaser Parties..............................................Preamble
Purchaser Parties Disclosure Letter...........................Art. IV
Sale...........................................................Recitals
Sale Date......................................................7.1(d)
SEC............................................................3.4.
Stockholder....................................................Preamble
Stockholder Approval...........................................3.3(a)
Stockholder Meeting............................................3.3(a)
Stockholders...................................................Preamble
Superior Competing Transaction.................................6.3(d)
Surviving Company..............................................1.1(b)
Surviving Company Common Share.................................2.1(a)
Surviving Partnership..........................................1.1(a)
Surviving Partnership Unit.....................................2.2(b)
Takeover Statute...............................................3.6.
Termination Date...............................................8.1(b)
Uncertificated NCIC Common Shares 2.5(b)
Unitholder Letter of Transmittal...............................2.5(c)(i)
*****
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized, all as of the
date first written above.
/s/ W. XXXXXX XXXXXXX
----------------------------------
W. XXXXXX XXXXXXX
/s/ XXXXX X. XXXXXXXX
----------------------------------
XXXXX X. XXXXXXXX
[Signature Page to the Merger Agreement]
NORTHSTAR CAPITAL INVESTMENT
CORP.
By: /s/ XXXXXXX X. XxXXXXXX
------------------------------
Name: Xxxxxxx X. XxXxxxxx
Title: President
NORTHSTAR PARTNERSHIP, L.P.
By: NORTHSTAR CAPITAL INVESTMENT
CORP., its general partner
By: /s/ XXXXXXX X. XxXXXXXX
------------------------------
Name: Xxxxxxx X. XxXxxxxx
Title: President
[Signature Page to the Merger Agreement]
