AGREEMENT AND PLAN OF MERGER
Exhibit (k) (8)
AGREEMENT AND PLAN OF MERGER
This
Agreement and Plan of Merger (the “Agreement”),
dated as of November 2, 2006,
is by and among Triangle Capital Corporation, a Maryland corporation (“Parent”), TCC Merger
Sub, LLC, a North Carolina limited liability company (“Merger Sub”), and Triangle Mezzanine
Fund LLLP, a North Carolina limited liability limited partnership (the “Fund”).
Recitals:
WHEREAS, Merger Sub is a wholly-owned subsidiary of Parent; and
WHEREAS, pursuant to the terms and conditions of this Agreement, (i) Merger Sub will merge
with and into the Fund, with the Fund continuing as the surviving entity and as a subsidiary of
Parent whose sole limited partner will be Parent and whose sole general partner will be New
Triangle GP, LLC, a North Carolina limited liability company which is a wholly-owned subsidiary of
Parent (the “New General Partner”) (the New General Partner will make a capital
contribution to the Fund concurrently with the consummation of the transactions contemplated hereby
in exchange for its general partnership interest in the Fund), and (ii) the limited partners of the
Fund (the “Fund Limited Partners”) will receive common stock of Parent on the terms set
forth herein; and
WHERERAS, it is contemplated that these transactions will close concurrently with the closing
of the transactions contemplated by that certain Agreement and Plan of Merger (the “GP Merger
Agreement”) by and among Parent, the New General Partner and Triangle Mezzanine LLC (the
“Old General Partner”), pursuant to which (i) the Old General Partner will merge with and
into the New General Partner, with the New General Partner continuing as the surviving entity, and
(ii) the members of the New General Partner will receive common stock of Parent on the terms set
forth therein; and
WHEREAS, it is contemplated that these transactions will close concurrently with the closing
of the initial public offering of shares of common stock by Parent in a firm-commitment
underwritten offering (the “Triangle IPO”); and
WHEREAS, it is contemplated that the issuance of common stock by Parent to the Fund Limited
Partners pursuant to this Agreement and to the members of the Old General Partner pursuant to the
GP Merger Agreement will be exempt from registration pursuant to Section 4(2) of the Securities Act
of 1933, as amended (the “Securities Act”) and/or Rule 506 thereunder;
NOW, THEREFORE, in consideration of the mutual covenants and undertakings set forth herein,
and subject to and on the terms and conditions set forth herein, the parties hereby agree as
follows:
1
ARTICLE I
THE MERGER
THE MERGER
Section 1.1 The Merger. At the Effective Time (as defined below), in accordance with this
Agreement and the North Carolina Revised Uniform Limited Partnership Act (the “North Carolina
Limited Partnership Act”) and the North Carolina Limited Liability Company Act (the “North
Carolina LLC Act”), Merger Sub will merge with and into the Fund (the “Merger”), the
separate existence of Merger Sub will cease, and the Fund will continue as the surviving entity as
a North Carolina limited liability limited partnership (the “Surviving Entity”). From and
after the Effective Time, the Surviving Entity will possess all the rights, privileges, immunities
and franchises, of a public as well as a private nature, and will be subject to all liabilities,
obligations and penalties of, the Fund and Merger Sub, all with the effect set forth in the North
Carolina Limited Partnership Act and the North Carolina LLC Act.
Section 1.2 Certificate of Limited Partnership and Limited Partnership Agreement. The
Certificate of Limited Partnership of the Fund in effect immediately prior to the Effective Time
will be the Certificate of Limited Partnership of the Surviving Entity, until duly amended in
accordance with applicable law. The Limited Partnership Agreement of the Fund in effect immediately
prior to the Effective Time will be the Limited Partnership Agreement of the Surviving Entity,
until duly amended in accordance with applicable law; provided, that it is anticipated that the
Limited Partnership Agreement of the Fund as of the date hereof will be amended to (i) provide that
the partnership interests in the Fund shall consist of a 0.1% general partnership interest to be
held by the New General Partner and a 99.9% limited partnership interest to be held by Parent; (ii)
eliminate all preferred returns and “catch up” provisions in the Fund, so that all profits, losses,
distributions and other attributes shall be allocated in accordance with the relative partnership
interests in the Fund (i.e., 0.1% to the New General Partner and 99.9% to Parent); and (iii) provide
for the Fund to be self-managed by the Parent.
Section 1.3 General Partner. The General Partner will merge with and into the New General
Partner effective as of the Effective Time pursuant to the GP Merger Agreement, with the New
General Partner surviving the merger, and the New General Partner will be the general partner of
the Surviving Entity as of the Effective Time. Effective as of the Effective Time, the New General
Partner will make a capital contribution to the Surviving Entity in exchange for a 0.1% general
partnership interest in the Surviving Entity as set forth in Section 1.4(b) below.
Section 1.4 Conversion of Fund Partnership Interests.
(a) As of the Effective Time, by virtue of the Merger and without any action on the part of
the Fund, Merger Sub, or the respective partners thereof, the limited partnership interests of the
Fund (the “Fund Partnership Interests”) that are outstanding as of the Effective Time will
be converted into the right to receive the Merger Consideration, as determined pursuant to Section
1.4(c) below. All Fund Partnership Interests, when converted in accordance with this Section
1.4(a), will no longer be outstanding, will automatically be cancelled, and will cease to exist,
and will thereafter represent the right to receive the Merger Consideration in respect of such Fund
Partnership Interests.
2
(b) As of the Effective Time, by virtue of the Merger and without any action on the part of
the Fund, Merger Sub, or the respective partners thereof, the 100% ownership interest held by
Parent in Merger Sub (the “Merger Sub Ownership Interest”) will be converted into a 99.9%
limited partnership interest of the Surviving Entity. The Surviving Entity will issue a 0.1%
general partnership interest to the New General Partner effective as of the Effective Time in
consideration of a capital contribution made by the New General Partner to the Surviving Entity as
of the Effective Time. The Merger Sub Ownership Interest, when converted in accordance with this
Section 1.4(b), will no longer be outstanding, will automatically be cancelled, and will cease to
exist.
(c) The merger consideration (the “Merger Consideration”) payable to the Fund Limited
Partners will be payable in shares of common stock of Parent in an amount equal to, on an aggregate
basis, (i) $21,250,000 (the “Total Dollar Merger Amount”), divided by (ii) the initial
public offering price per share in the Triangle IPO (the shares issuable to the Fund Limited
Partners in the Merger, the “Merger Shares”); provided, however, that, if, at the pricing
of the initial public offering of Parent, there is any residual value above the Total Dollar Merger
Amount payable to the Fund Limited Partners as set forth above, then the Fund Limited Partners will
receive 100% of such excess. In such event, this Agreement will be amended by the parties hereto
prior to Closing pursuant to Section 7.4 to increase the Total Dollar Merger Amount otherwise
payable to the limited partners by the amount of such excess. The Merger Shares will be allocated
among the Fund Limited Partners in proportion to the respective partnership interests held in the
Fund by the Fund Limited Partners as of the Effective Time.
(d) The number of Merger Shares payable to any Fund Limited Partner pursuant to the formula
set forth above will be rounded to the nearest whole number. At the Effective Time, the Parent
will issue Merger Shares to each Fund Limited Partner in the amount determined in accordance with
Section 1.4(c) above, subject to such Fund Limited Partner’s execution and delivery of a
Subscription Agreement in the form attached as an Exhibit to the Confidential Information
Statement/Private Placement Memorandum dated as of October 10, 2006, delivered by the Fund and
Parent to the Fund Limited Partners.
ARTICLE II
CLOSING
CLOSING
Section 2.1 Closing. The closing of the transactions contemplated hereby (the
“Closing”) will take place at the offices of the parties, 0000 Xxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxx Xxxxxxxx, concurrently with the closing of the transactions contemplated by the GP
Merger Agreement and the Triangle IPO, or at such other time and place as the parties mutually
agree. For purposes of this Agreement, “Closing Date” means the date on which the Closing
occurs.
Section 2.2 Effective Time. Upon the terms and conditions of this Agreement, the parties
shall deliver Articles of Merger to the Secretary of State of the State of North Carolina (the
“Articles of Merger”) contemporaneously with, or immediately after, the Closing, and shall
make all other filings or recordings as may be required under the North Carolina Limited
Partnership Act and the North Carolina LLC Act and any other applicable law in order to effect the
Merger. The Merger will become effective at the time of the filing of the Articles of Merger with
the Secretary of State of the State of North Carolina in accordance with the North Carolina Limited
Partnership Act and the North Carolina LLC Act, or at such later time as the parties may agree and
as is provided in the Articles of
3
Merger. The date and time at which the Merger will so become effective is herein referred to
as the “Effective Time.”
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE FUND
REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund hereby represents and warrants to Parent and Merger Sub as follows:
Section 3.1 Organization and Good Standing. The Fund is a limited liability limited
partnership duly formed, validly existing and in good standing under the laws of the State of North
Carolina, with full limited partnership power and authority to conduct its business as it is now
being conducted.
Section 3.2 Authority. This Agreement constitutes the valid and binding obligation of the
Fund, enforceable against the Fund in accordance with its terms. The Fund has all requisite
limited partnership power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement by the Fund and the
consummation of the transactions contemplated hereby have been duly and validly authorized and
approved by the Fund.
Section 3.3 Capitalization. The limited partnership interests of the Fund are owned by the
persons and in percentages set forth in Schedule 3.3. There are no options, warrants,
calls, subscriptions, convertible securities, or other rights, agreements or commitments that
obligate the Fund to issue, transfer or sell any partnership interests in the Fund except as may be
set forth in the Limited Partnership Agreement of the Fund dated as of January 3, 2003, as amended
(the “Fund LP Agreement”).
Section 3.4 No Conflict. Neither the execution and delivery of this Agreement by the Fund nor
the consummation of the transactions contemplated hereby will, directly or indirectly (with or
without notice or lapse of time): (i) conflict with any legal requirement or order of any court or
governmental authority to which the Fund is subject, (ii) conflict with the Fund LP Agreement or
the Certificate of Limited Partnership of the Fund, or (iii) breach any provision of any contract
to which the Fund is a party. Except for any consents required to be obtained from the United
States Small Business Administration (the “SBA”), the Fund is not and will not be required
to give any notice to or obtain any consent or approval from any person in connection with the
execution and delivery of this Agreement or the consummation of the transactions under this
Agreement.
Section 3.5 Legal Proceedings; Orders. There are no legal proceedings or actions pending or,
to the knowledge of the Fund, threatened, against the Fund that challenge, or that may have the
effect of preventing, delaying, making illegal or otherwise interfering with, any of the
transactions contemplated hereby. There are no orders pending or, to the knowledge of the Fund,
threatened, against the Fund that challenge, or that may have the effect of preventing, delaying,
making illegal or otherwise interfering with, any of the transactions contemplated hereby.
4
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Each of Parent and Merger Sub jointly and severally represents and warrants to the Fund as
follows:
Section 4.1 Organization and Good Standing. Parent is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Maryland, with full corporate
power and authority to conduct its business as it is now being conducted. Merger Sub is a limited
liability company duly formed, validly existing and in good standing under the laws of the State of
North Carolina, with full limited liability company power and authority to conduct its business as
it is now being conducted.
Section 4.2 Authority. This Agreement constitutes the valid and binding obligation of each of
Parent and Merger Sub, enforceable against each of Parent and Merger Sub in accordance with its
terms. Parent has all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. Merger Sub has all requisite
limited liability company power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of this Agreement by
Parent and Merger Sub and the consummation of the transactions contemplated hereby have been duly
and validly authorized and approved by Parent and Merger Sub.
Section 4.3 Valid Issuance of Merger Shares. The Merger Shares being issued hereunder have
been duly and validly authorized, and will be duly and validly issued, fully paid and nonassessable
after issuance and sale to the Fund Limited Partners pursuant to this Agreement, and will be free
of any liens, encumbrances or restrictions on transfer other than restrictions on transfer under
applicable federal and state securities laws.
Section 4.4 No Conflict. Neither the execution and delivery of this Agreement by Parent or
Merger Sub nor the consummation of the transactions contemplated hereby will, directly or
indirectly (with or without notice or lapse of time): (i) conflict with any legal requirement or
order of any court or governmental authority to which Parent or Merger Sub is subject, (ii)
conflict with the Articles of Incorporation or Bylaws of Parent or the Articles of Organization or
Operating Agreement of Merger Sub, or (iii) breach any provision of any contract to which the
Parent or Merger Sub is a party. Except for any consents required to be obtained from the SBA,
neither Parent nor Merger Sub is or will be required to give any notice to or obtain any consent or
approval from any person in connection with the execution and delivery of this Agreement or the
consummation of the transactions under this Agreement.
Section 4.5 Legal Proceedings; Orders. There are no legal proceedings or actions pending or,
to the knowledge of Parent or Merger Sub, threatened, against Parent or Merger Sub that challenge,
or that may have the effect of preventing, delaying, making illegal or otherwise interfering with,
any of the transactions contemplated hereby. There are no orders pending or, to the knowledge of
Parent or Merger Sub, threatened, against Parent or Merger Sub that challenge, or that may have the
effect of preventing, delaying, making illegal or otherwise interfering with, any of the
transactions contemplated hereby.
5
ARTICLE V
CONDITIONS TO CLOSING
CONDITIONS TO CLOSING
Section 5.1 Mutual Conditions. The obligations of each party to consummate the transactions
contemplated by this Agreement are subject to the satisfaction at or prior to the Closing of each
of the following conditions (any of which may be waived in writing, in whole or in part, by such
party):
(a) Closing of Triangle IPO. The Triangle IPO must close concurrently with the
closing of the transactions contemplated hereby.
(b) Approval of SBA. The SBA must have consented to the transactions contemplated by,
and related to, this Agreement, the GP Merger Agreement and the Triangle IPO.
Section 5.2 Conditions to Obligations of Parent and Merger Sub. The obligations of Parent and
Merger Sub to consummate the transactions contemplated by this Agreement are subject to the
satisfaction at or prior to the Closing of the following condition (which may be waived in writing,
in whole or in part, by Parent and Merger Sub):
(a) Representations and Warranties. The representations and warranties of the Fund in
Article III must be true and correct in all material respects as of the Closing.
Section 5.3 Conditions to Obligations of the Fund. The obligations of the Fund to consummate
the transactions contemplated by this Agreement are subject to the satisfaction at or prior to the
Closing of the following condition (which may be waived in writing, in whole or in part, by the
Fund):
(a) Representations and Warranties. The representations and warranties of Parent and
Merger Sub in Article IV must be true and correct in all material respects as of the Closing.
ARTICLE VI
REGISTRATION COVENANT
REGISTRATION COVENANT
Section 6.1 Registration.
(a) Reasonable Best Efforts to Register. Following the first anniversary of the
Closing, Parent shall use its reasonable best efforts to file a registration statement with respect
to the resale of all of the Merger Shares, and to cause such registration statement to become
effective, as soon as practicable following such first anniversary (the Merger Shares to be
registered, the “Registered Shares”); provided, however, that Parent will not be obligated
to effect any such registration for such period of time, as, in the good faith judgment of the
Board of Directors of Parent, such registration would be seriously detrimental to Parent and the
Board of Directors of Parent concludes, as a result, that it is essential to defer the filing of
such registration statement until such time as such registration would not be detrimental. In
addition, Parent will use reasonable best efforts to cause the Merger Shares to be listed on the
Nasdaq Global Market or other securities
6
exchange on which Parent’s common stock is then listed at such time that the resale of the
Merger Shares is registered.
(b) Expenses. All Registration Expenses (as defined below) incurred in
connection with any registration pursuant to Section 6.1(a) above will be borne by the Parent. Any
Selling Expenses (as defined below) relating to the Registered Shares will be borne by the holders
of such securities pro rata on the basis of the number of shares of securities so registered on
their behalf. For purposes of this Agreement, (i) “Registration Expenses” means all
expenses incurred in effecting any registration pursuant to Section 6.1(a) above, including,
without limitation, all registration, qualification, and filing fees, printing expenses, escrow
fees, fees and disbursements of counsel for Parent, blue sky fees and expenses, expenses of any
regular or special audits incident to or required by any such registration and reasonable fees and
disbursements of one counsel for the Fund Limited Partners as selling stockholders, but will not
include (x) Selling Expenses and (y) the compensation of regular employees of the Parent, which
will be paid in any event by the Parent, and (ii) “Selling Expenses” means any underwriting
discounts, selling commissions and stock transfer taxes applicable to the sale of the Registered
Shares and fees and disbursements of counsel for any Fund Limited Partner (other than the fees and
disbursements of one counsel for the Fund Limited Partners included in Registration Expenses as set
forth above).
ARTICLE VII
GENERAL PROVISIONS
GENERAL PROVISIONS
Section 7.1 Survival. None of the representations and warranties, and any covenant to be
performed prior to the Effective Time, set forth herein, shall survive the Effective Time.
Section 7.2 Termination. By written notice, this Agreement may be terminated by either the
Fund, on the one hand, or Parent and Merger Sub, on the other hand, if the Closing has not occurred
on or before June 30, 2007.
Section 7.3 Waiver. No failure to exercise, and no delay in exercising, on the part of either
party, any privilege, any power or any right hereunder will operate as a waiver thereof, nor will
any single or partial exercise of any privilege, right or power hereunder preclude further exercise
of any other privilege, right or power hereunder.
Section 7.4 Entire Agreement and Modification. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this agreement and supersedes
all prior agreements between the parties with respect to its subject matter. This Agreement may
not be amended except by a written agreement signed by the party to be charged with the amendment.
This Agreement shall be amended by the parties (i) in accordance with Section 1.4(c) prior to
Closing in the event the Total Dollar Merger Amount is increased pursuant to the terms set forth
therein, and (ii) if requested by the SBA to comply with SBA regulations, provided that no such
amendment pursuant to this clause (ii) will change the total amount or allocation of the Merger
Consideration.
Section 7.5 Assignment; Binding Effect; No Third Party Beneficiaries. This Agreement may not
be assigned by any party without the prior written consent of the other party(ies). Subject to the
foregoing, this Agreement will be binding upon and shall inure to the benefit of the parties hereto
and their permitted successors and assigns. Nothing in this Agreement will be construed to give
any person other than the parties to this Agreement any legal or equitable right under or with
respect to
7
this Agreement, except such rights as will inure to a successor or permitted assignee pursuant
to this Section 7.5.
Section 7.6 Severability. If any provision of this Agreement is held invalid or unenforceable
by any court of competent jurisdiction, the other provisions of this Agreement will remain in full
force and effect.
Section 7.7 Governing Law. This Agreement will be governed by and construed in accordance
with the laws of the State of North Carolina, without regard to the conflict of law provisions
thereof.
Section 7.8 Construction. The language used in the Agreement will be construed, in all cases,
according to its fair meaning, and not for or against any party hereto. The parties acknowledge
that each party has reviewed this Agreement and that rules of construction to the effect that any
ambiguities are to be resolved against the drafting party will not be available in the
interpretation of this Agreement.
Section 7.9 Execution of Agreement; Counterparts. This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same agreement.
Section 7.10 Notices. All notices, consents, waivers, and other communications under this
Agreement must be in writing and must be delivered (i) personally, (ii) by facsimile with
confirmation of transmission by the transmitting equipment, or (iii) by certified or registered
mail (postage prepaid, return receipt requested), and will be deemed given when so delivered
personally or by facsimile, or if mailed, three (3) days after the date of mailing, to the
addresses and facsimile numbers set forth below (or to such other addresses and facsimile numbers
as a party may designate by notice to the other parties):
If to Parent or Merger Sub:
Triangle Capital Corporation
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: President
Facsimile: 000-000-0000
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: President
Facsimile: 000-000-0000
If to the Fund:
Triangle Mezzanine Fund, LLLP
c/o Triangle Mezzanine LLC, its general partner
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Managing Director
Facsimile: 000-000-0000
c/o Triangle Mezzanine LLC, its general partner
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Managing Director
Facsimile: 000-000-0000
8
[signature page of Agreement and Plan of Merger]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.
| PARENT: | ||||||||
| Triangle Capital Corporation | ||||||||
| By: | /s/ Xxxxxx X. Xxxxx | |||||||
| Xxxxxx X. Xxxxx, Chief Financial Officer, Secretary and Treasurer |
||||||||
| MERGER SUB: |
||||||||
| TCC Merger Sub, LLC | ||||||||
| By: | Triangle Capital Corporation, its manager | |||||||
| By: | /s/ Xxxxxxx X. Xxxxxx, III | |||||||
| Xxxxxxx X. Xxxxxx, III, Chairman of the Board, Chief Executive Officer and President | ||||||||
| FUND: | ||||||||
| Triangle Mezzanine Fund LLLP | ||||||||
| By: | Triangle Mezzanine LLC, its general partner | |||||||
| By: | /s/ Xxxxxxx X. Xxxxxx, III | |||||||
| Name: | Xxxxxxx X. Xxxxxx, III | |||||||
| Its: | Manager | |||||||
9
Schedule 3.3
Limited Partnership Interests
[see attached]
