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Title: |
Agreement and Plan of Merger |
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Date: |
2007 |
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$75 |
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#2831349 |
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
DEERFIELD TRIARC CAPITAL CORP.,
DFR MERGER COMPANY, LLC,
DEERFIELD & COMPANY LLC
AND
TRIARC COMPANIES, INC.
AS SELLERS' REPRESENTATIVE
______________________________
DATED AS OF APRIL 19, 2007
______________________________
===============================================================================
{PAGE}
TABLE OF CONTENTS
-----------------
PAGE
----
ARTICLE I DEFINITIONS.....................................................2
1.1 DEFINED TERMS...................................................2
ARTICLE II THE MERGER.....................................................13
2.1 THE MERGER.....................................................13
2.2 EFFECTIVE TIME.................................................14
2.3 CLOSING........................................................14
2.4 EFFECTS OF THE MERGER..........................................14
2.5 ORGANIZATIONAL INSTRUMENTS.....................................14
2.6 DIRECTORS AND OFFICERS.........................................14
2.7 BUYER BOARD DESIGNATION RIGHTS.................................15
2.8 FURTHER ASSURANCES.............................................15
ARTICLE III CONVERSION OF MEMBERSHIP INTERESTS AND MERGER CONSIDERATION....15
3.1 CALCULATION OF AGGREGATE MERGER CONSIDERATION..................15
3.2 EFFECT ON MEMBERSHIP INTERESTS.................................16
3.3 CLOSING PAYMENTS; EXCHANGE OF MEMBERSHIP INTERESTS.............17
3.4 MEMBER WRITTEN CONSENT.........................................19
3.5 ALLOCATION OF AGGREGATE MERGER CONSIDERATION...................19
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................21
4.1 DUE ORGANIZATION; QUALIFICATION................................21
4.2 SUBSIDIARIES; INVESTMENTS......................................21
4.3 AUTHORIZATION; ENFORCEABILITY; VOTING REQUIREMENTS.............21
4.4 CAPITALIZATION.................................................22
4.5 FINANCIAL STATEMENTS; CASH ON HAND.............................23
4.6 NO MATERIAL ADVERSE CHANGE; ORDINARY COURSE....................23
4.7 NO UNDISCLOSED LIABILITIES.....................................23
4.8 COMPLIANCE WITH LAWS...........................................24
4.9 PERMITS........................................................24
4.10 REGULATORY COMPLIANCE..........................................24
4.11 ENVIRONMENTAL COMPLIANCE.......................................25
4.12 CLIENTS........................................................25
4.13 NON-CONTRAVENTION; CONSENTS AND APPROVALS......................29
4.14 CONTRACTS......................................................30
4.15 PROPERTY.......................................................32
4.16 INTELLECTUAL PROPERTY..........................................33
4.17 LITIGATION.....................................................33
4.18 TAXES..........................................................34
4.19 EMPLOYEE BENEFIT PLANS.........................................34
4.20 EMPLOYEES......................................................35
4.21 BROKERS........................................................36
4.22 RELATED PARTY TRANSACTIONS.....................................36
(i)
{PAGE}
PAGE
----
4.23 INFORMATION PROVIDED...........................................36
4.24 INSURANCE......................................................37
4.25 BOOKS AND RECORDS..............................................37
4.26 CODE OF ETHICS.................................................37
4.27 ANTI-MONEY LAUNDERING POLICY...................................38
4.28 DISCLAIMER REGARDING ESTIMATES AND PROJECTIONS.................38
4.29 EXCLUSIVITY OF REPRESENTATIONS.................................38
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BUYER AND BUYER SUB.....38
5.1 DUE INCORPORATION; QUALIFICATION...............................38
5.2 SUBSIDIARIES; INVESTMENTS......................................39
5.3 AUTHORIZATION; ENFORCEABILITY..................................39
5.4 CAPITALIZATION.................................................40
5.5 SEC REPORTS AND FINANCIAL STATEMENTS...........................40
5.6 REIT QUALIFICATION; INVESTMENT COMPANY ACT.....................41
5.7 NON-CONTRAVENTION..............................................41
5.8 INFORMATION PROVIDED...........................................42
5.9 OPINIONS OF BUYER'S FINANCIAL ADVISORS.........................43
5.10 FINANCING......................................................43
5.11 BROKERS........................................................43
5.12 INVESTMENT INTENT..............................................43
5.13 INDEPENDENT INVESTIGATION......................................44
5.14 EXCLUSIVITY OF REPRESENTATIONS.................................44
ARTICLE VI COVENANTS AND AGREEMENTS.......................................44
6.1 CONDUCT OF BUSINESS OF THE COMPANY.............................44
6.2 CONDUCT OF BUSINESS OF THE BUYER...............................47
6.3 ACCESS TO INFORMATION; CONFIDENTIALITY.........................49
6.4 EXPENSES.......................................................50
6.5 PUBLICITY......................................................50
6.6 FURTHER ACTIONS................................................51
6.7 REQUIRED CONSENTS AND NOTICES FROM GOVERNMENTAL
AUTHORITIES................................................51
6.8 CLIENT CONSENTS................................................52
6.9 PROXY STATEMENT; STOCKHOLDERS MEETING; NYSE LISTING............55
6.10 PRESERVATION OF RECORDS; POST-CLOSING ACCESS TO
INFORMATION AND COOPERATION................................56
6.11 TERMINATION OF RELATED PARTY TRANSACTIONS......................57
6.12 EMPLOYEE MATTERS...............................................57
6.13 OFFICERS AND DIRECTORS.........................................58
6.14 RELEASE........................................................60
6.15 TAX MATTERS....................................................60
6.16 FINANCING......................................................61
6.17 ESCROW AGREEMENT; REGISTRATION RIGHTS AGREEMENT;
REIT QUALIFICATION OPINION.................................63
6.18 MODIFICATION OF EXISTING RESTRICTIONS ON TRANSFER
AND OWNERSHIP OF SHARES....................................63
(ii)
{PAGE}
PAGE
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6.19 NO SHOP........................................................63
6.20 NON-COMPETITION; NON-SOLICITATION..............................64
6.21 DISTRIBUTION AND VESTING OF BUYER COMMON STOCK.................65
6.22 DFP TRANSACTION................................................66
6.23 PERMISSIBLE ACTIVITIES.........................................66
ARTICLE VII CONDITIONS PRECEDENT TO THE OBLIGATION OF THE BUYER AND
AND BUYER SUB TO CLOSE.........................................67
7.1 HSR ACT FILINGS................................................67
7.2 STOCKHOLDER APPROVAL...........................................67
7.3 PROXY STATEMENT................................................67
7.4 NO ORDERS......................................................67
7.5 ACCURACY OF REPRESENTATIONS AND WARRANTIES.....................67
7.6 PERFORMANCE OF COVENANTS AND AGREEMENTS........................67
7.7 CERTIFICATE....................................................68
7.8 NO COMPANY MATERIAL ADVERSE EFFECT.............................68
7.9 CLIENT CONSENTS................................................68
7.10 ESCROW AGREEMENT...............................................68
7.11 FINANCING......................................................68
7.12 SATISFACTION OF PUT RIGHT......................................68
7.13 INVESTMENT BANKING FIRM DETERMINATION..........................68
ARTICLE VIII CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY
TO CLOSE.......................................................69
8.1 HSR ACT FILINGS................................................69
8.2 STOCKHOLDER APPROVAL...........................................69
8.3 NYSE LISTING...................................................69
8.4 PROXY STATEMENT................................................69
8.5 NO ORDERS......................................................69
8.6 ACCURACY OF REPRESENTATIONS AND WARRANTIES.....................69
8.7 PERFORMANCE OF COVENANTS AND AGREEMENTS........................70
8.8 CERTIFICATE....................................................70
8.9 NO BUYER MATERIAL ADVERSE EFFECT...............................70
8.10 REGISTRATION STATEMENT.........................................70
8.11 REIT QUALIFICATION OPINION.....................................70
8.12 MODIFICATION OF EXISTING RESTRICTIONS ON TRANSFER
AND OWNERSHIP OF SHARES....................................70
8.13 NAME CHANGE....................................................71
8.14 ESCROW AGREEMENT...............................................71
8.15 SATISFACTION OF PUT RIGHT......................................71
8.16 INVESTMENT BANKING FIRM DETERMINATION..........................71
ARTICLE IX SELLERS' REPRESENTATIVE........................................71
9.1 APPOINTMENT OF SELLERS' REPRESENTATIVE.........................71
9.2 AUTHORITY......................................................72
9.3 LIMITATION OF LIABILITY........................................72
9.4 RELIANCE.......................................................72
9.5 SUCCESSOR TO SELLERS' REPRESENTATIVE...........................73
9.6 EXPENSES.......................................................73
(iii)
{PAGE}
PAGE
----
ARTICLE X TERMINATION OF AGREEMENT.......................................73
10.1 TERMINATION....................................................73
10.2 SURVIVAL AFTER TERMINATION.....................................74
ARTICLE XI SURVIVAL; INDEMNIFICATION; MISCELLANEOUS.......................74
11.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.....................74
11.2 INDEMNIFICATION................................................75
11.3 INDEMNIFICATION PROCEDURES.....................................76
11.4 LIMITATIONS ON INDEMNIFICATION.................................78
11.5 INDEMNITY ESCROW...............................................79
11.6 TAX MATTERS....................................................80
11.7 NON-RECOURSE...................................................80
11.8 EXCLUSIVITY OF INDEMNITY.......................................80
11.9 CONSENT TO JURISDICTION; SERVICE OF PROCESS; WAIVER
OF JURY TRIAL..............................................80
11.10 NOTICES........................................................81
11.11 ENTIRE AGREEMENT...............................................82
11.12 WAIVERS AND AMENDMENTS.........................................83
11.13 GOVERNING LAW..................................................83
11.14 BINDING EFFECT; ASSIGNMENT.....................................83
11.15 USAGE..........................................................83
11.16 ARTICLES AND SECTIONS..........................................83
11.17 INTERPRETATION.................................................83
11.18 DISCLOSURE.....................................................84
11.19 SEVERABILITY OF PROVISIONS.....................................84
11.20 COUNTERPARTS...................................................84
11.21 NO THIRD PARTY BENEFICIARIES...................................84
11.22 SPECIFIC PERFORMANCE...........................................85
(iv)
{PAGE}
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of April 19, 2007 (this
"AGREEMENT"), by and among Deerfield Triarc Capital Corp., a Maryland
corporation (the "BUYER"), DFR Merger Company, LLC, an Illinois limited
liability company and an indirect wholly owned subsidiary of Buyer ("BUYER
SUB"), Deerfield & Company LLC, an Illinois limited liability company (the
"COMPANY"), and solely for the purposes of Article IX and Sections 2.7, 3.3,
3.5, 6.5, 6.10, 6.15, 6.16, 6.17 and 6.20, Triarc Companies, Inc., a Delaware
corporation (in such capacity, the "SELLERS' REPRESENTATIVE").
WHEREAS, the Buyer and Deerfield Capital Management LLC, a Delaware
limited liability company and a wholly owned subsidiary of the Company ("DCM"),
are parties to that certain Management Agreement, dated December 23, 2004 (as
amended, supplemented or otherwise modified from time to time, the "MANAGEMENT
AGREEMENT");
WHEREAS, a special committee comprised of members of the Board of
Directors of the Buyer who are not directors, officers, employees or affiliates
of the Company or any of its Subsidiaries (the "SPECIAL COMMITTEE") has
unanimously determined that this Agreement and the transactions contemplated
hereby are in the best interests of the Buyer and those stockholders of the
Buyer that are not also, directly or indirectly, beneficial owners of equity
interests of DCM, and has unanimously recommended to the Board of Directors of
the Buyer that the Board of Directors of the Buyer adopt this Agreement and the
transactions contemplated hereby;
WHEREAS, the Board of Directors of the Buyer and the sole member of
Buyer Sub each have determined that this Agreement and the transactions
contemplated hereby, including the merger of Buyer Sub with and into the
Company (the "MERGER"), are advisable and in the best interests of the Buyer
and those stockholders of the Buyer that are not also, directly or indirectly,
beneficial owners of equity interests of DCM and have adopted or approved this
Agreement and the transactions contemplated hereby, including the Merger, and
resolved to recommend that stockholders of the Buyer approve the issuance of
shares of common stock of the Buyer pursuant to this Agreement;
WHEREAS, the Board of Directors of the Company has determined that this
Agreement and the transactions contemplated hereby, including the Merger, are
advisable and in the best interest of the members of the Company and have
adopted or approved this Agreement and the transactions contemplated hereby,
including the Merger, and resolved to recommend that members of the Company
approve this Agreement;
WHEREAS, the parties intend that this Agreement constitute a "plan of
merger" within the meaning of Section 37-20 of the Illinois Limited Liability
Company Act, as amended (the "ILLCA");
{PAGE}
2
WHEREAS, concurrently with the execution and delivery by the parties
hereto of this Agreement, the Buyer, the Sellers' Representative and certain
persons who are entitled to receive shares of capital stock of the Buyer
pursuant to the Merger or as otherwise contemplated by this Agreement, are
executing and delivering a Registration Rights Agreement substantially in the
form attached hereto as ANNEX A (the "REGISTRATION RIGHTS AGREEMENT"), which
Registration Rights Agreement also contemplates the execution and delivery from
time to time after the date hereof by any other person who is entitled to
receive such shares; and
WHEREAS, the parties desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also to
prescribe certain conditions to the Merger.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements entered into herein, and intending
to be legally bound hereby, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS.
(a) For all purposes of this Agreement, the following terms
shall have the respective meanings set forth in this Section 1.1 (such
definitions to be equally applicable to both the singular and plural forms of
the terms herein defined):
"ADVISORY CONTRACT" shall mean any Contract pursuant to which the
Company or any of its Subsidiaries provides Investment Management Services to
any Person, excluding the Management Agreement.
"AFFILIATE" means, with respect to any Person, any other Person,
directly or indirectly through one or more intermediaries, controlling,
controlled by or under common control with such Person. The term "control"
(including, with correlative meaning, the terms "controlled by" and "under
common control with"), as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting or other
securities, by contract or otherwise. Notwithstanding the foregoing, for the
avoidance of doubt, no Client (including, prior to the Closing, the Buyer and
its Subsidiaries) shall be deemed to be an Affiliate of the Company or any of
its Subsidiaries.
"ANCILLARY DOCUMENT" means the Escrow Agreement and the Registration
Rights Agreement.
"BENEFIT PLAN" means any employee benefit plan, arrangement or policy
(whether or not an employee benefit plan within the meaning of Section 3(3) of
{PAGE}
3
ERISA), including any employment, consulting or deferred compensation
agreement, executive compensation, change in control, severance, retention,
bonus, incentive, pension, profit-sharing, savings, retirement, equity, stock
option, restricted stock, stock purchase or severance pay plan, any life,
health, disability or accident insurance plan or any holiday or vacation
practice, other than any multiemployer plan within the meaning of Section 3(37)
of ERISA ("MULTIEMPLOYER PLAN"), as to which the Company or any of its
Subsidiaries (or any trade or business, whether or not incorporated, which is
or has ever been treated as a single employer with any of them under Section
414(b), (c), (m) or (o) of the Code ("ERISA AFFILIATE")) has, or in the future
may have, any material liability.
"BUSINESS DAY" means a day other than Saturday, Sunday or any day on
which banks located in New York, New York are authorized or obligated by Law to
close.
"BUYER COMMON STOCK" means the common stock, par value $0.001 per
share, of the Buyer.
"BUYER MATERIAL ADVERSE EFFECT" means any effect, change, event,
circumstance, impairment, condition, development, occurrence or state of facts
(i) that would reasonably be expected to prevent or materially impair the
ability of the Buyer or Buyer Sub to consummate the transactions contemplated
hereby or (ii) that has been or would be materially adverse to the financial
condition, business, results of operations, liabilities (contingent or
otherwise), properties or assets of the Buyer or Buyer Sub, taken as a whole
(after taking into account any insurance or other third party recourses
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