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Document Preview Agreement and Plan of Merger |
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Title: |
Agreement and Plan of Merger |
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Entities: |
Source Interlink Companies Inc.; Bank of America, NA; Armstrong Teasdale; Willkie Farr & Gallagher |
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Date: |
2001 |
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Size: |
Preview shows 18KB of 136KB total |
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Price: |
$52 |
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ID: |
#337045 |
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AGREEMENT AND PLAN OF MERGER
AMONG
THE SOURCE INFORMATION MANAGEMENT COMPANY,
SOURCE-INTERLINK ACQUISITION, INC.,
THE INTERLINK COMPANIES, INC.
AND
THE SHAREHOLDERS AND OPTION HOLDERS OF
THE INTERLINK COMPANIES, INC.
MAY 31, 2001
AND
CONSENT TO MERGER
BY
THE SHAREHOLDERS OF
THE INTERLINK COMPANIES, INC.
{PAGE} 2
TABLE OF CONTENTS
{TABLE}
{C} {S} {C}
1. Definitions............................................................................... 4
2. The Merger................................................................................ 8
(a) Effect of Merger..................................................................... 8
(b) Procedure for Payment................................................................ 9
(c) Dividends............................................................................ 9
(d) Fractional Shares.................................................................... 9
(e) Closing of Transfer Records.......................................................... 9
(f) Consents of Sellers to Merger........................................................ 9
(g) The Closing..........................................................................10
(h) Deliveries at the Closing............................................................10
3. Representations and Warranties Concerning the Merger......................................10
(a) Representations and Warranties of the Sellers........................................10
(b) Representations and Warranties of the Buyer and BuyerSub.............................11
4. Representations and Warranties Concerning the Company and Its Subsidiaries................12
(a) Organization, Qualification, and Corporate Power.....................................12
(b) Capitalization.......................................................................12
(c) Noncontravention.....................................................................12
(d) Brokers' Fees........................................................................12
(e) Title to Assets......................................................................12
(f) Subsidiaries.........................................................................12
(g) Financial Statements.................................................................12
(h) Events Subsequent to Most Recent Fiscal Year End.....................................12
(i) Undisclosed Liabilities..............................................................12
(j) Legal Compliance.....................................................................12
(k) Tax Matters..........................................................................12
(l) Real Property........................................................................12
(m) Intellectual Property................................................................12
(n) Tangible Assets......................................................................12
(o) Inventory............................................................................12
(p) Contracts............................................................................12
(q) Notes and Accounts Receivable........................................................12
(r) Powers of Attorney...................................................................12
(s) Insurance............................................................................12
(t) Litigation...........................................................................12
(u) Employees............................................................................12
(v) Employee Benefits....................................................................12
(w) Guaranties...........................................................................12
(x) Environment, Health, and Safety Matters..............................................12
(y) Certain Business Relationships With the Company and Its Subsidiaries.................12
(z) Disclosure...........................................................................12
5. Pre-Closing Covenants.....................................................................12
(a) General..............................................................................12
(b) Notices and Consents.................................................................12
(c) Operation of Business................................................................12
(d) Preservation of Business.............................................................12
{/TABLE}
i
{PAGE} 3
{TABLE}
{C} {S} {C}
(e) Full Access..........................................................................12
(f) Notice of Developments...............................................................12
(g) Exclusivity..........................................................................12
6. Post-Closing Covenants....................................................................12
(a) General..............................................................................12
(b) Litigation Support...................................................................12
(c) Transition...........................................................................12
(d) Confidentiality......................................................................12
(e) Covenant Not to Compete..............................................................12
(f) Buyer Shares.........................................................................12
(g) Registration Rights..................................................................12
(h) Limitations on Sale of Buyer Shares..................................................12
7. Conditions to Obligation to Close.........................................................12
(a) Conditions to Obligation of the Buyer................................................12
(b) Conditions to Obligation of the Company..............................................12
8. Survival of Representation and Warranties.................................................12
9. Tax Matters...............................................................................12
(a) Certain Taxes........................................................................12
(b) Tax Free Treatment...................................................................12
(c) Withholding Obligations..............................................................12
10. Termination...............................................................................12
(a) Termination of Agreement.............................................................12
(b) Effect of Termination................................................................12
11. Miscellaneous.............................................................................12
(a) Press Releases and Public Announcements..............................................12
(b) No Third-Party Beneficiaries.........................................................12
(c) Entire Agreement.....................................................................12
(d) Succession and Assignment............................................................12
(e) Counterparts.........................................................................12
(f) Headings.............................................................................12
(g) Notices..............................................................................12
(h) Governing Law........................................................................12
(i) Amendments and Waivers...............................................................12
(j) Severability.........................................................................12
(k) Expenses.............................................................................12
(l) Construction.........................................................................12
(m) Incorporation of Exhibits, Annexes, and Schedules....................................12
{/TABLE}
ii
{PAGE} 4
Exhibit A-1 - Shareholders of the Company
Exhibit A-2 - Number of Buyer Shares to Each Holder of Common Stock
Exhibit A-3 - Cash Consideration to each Holder of Preferred Stock/Fractional
Share Distributions
Exhibit B - Historical Financial Statements
Exhibit C - Form of Employment Agreements - Norman Raben and David Buescher
Exhibit D - Form of Opinion of Counsel to the Sellers
Exhibit E - Form of Opinion of Counsel to the Buyer
Annex I - Exceptions to the Sellers' Representations and Warranties
Concerning the Merger
Annex II - Exceptions to the Buyer's Representations and Warranties
Concerning the Merger
Disclosure Schedule - Exceptions to Representations and Warranties
Concerning the Company and Its Subsidiaries
iii
{PAGE} 5
AGREEMENT AND PLAN OF MERGER
Agreement and Plan of Merger ("Agreement") entered into on May 31,
2001, by and among THE SOURCE INFORMATION MANAGEMENT COMPANY, a Missouri
corporation (the "Buyer"), SOURCE-INTERLINK ACQUISITION, INC., a Delaware
corporation and a wholly owned subsidiary of Buyer (the "BuyerSub"), THE
INTERLINK COMPANIES, INC., a Delaware corporation (the "Company") (formerly
DEYCO ACQUISITION CORPORATION) and THE SHAREHOLDERS AND OPTION HOLDERS OF THE
COMPANY LISTED ON EXHIBIT A (collectively the "Sellers" and singularly a
"Seller"). The Buyer, the Company and the Sellers are referred to collectively
herein as the "Parties".
WHEREAS, Sellers, in the aggregate, own of record and beneficially (i)
1,232,329 shares of the Common Stock of the Company, representing 100% of the
issued and outstanding Common Stock of the Company (other than the shares and
convertible securities owned by Buyer and the Options); (ii) Options to purchase
100,000 shares of Common Stock; and (iii) 1,200 shares of the Company's Series A
Preferred Stock, representing 100% of the issued and outstanding Series A
Preferred Stock;
WHEREAS, Buyer owns (i) 235,117 shares of the Company's Common Stock,
representing approximately 15%, on a fully diluted basis, of the issued and
outstanding Common Stock of the Company (excluding Options and the convertible
securities held by Buyer), and (ii) 294,497 shares of the Series B Preferred
Stock, representing 100% of the Series B Preferred Stock;
WHEREAS, Buyer acquired the Common Stock and Series B Preferred Stock
pursuant to the Investment and Services Agreement ("Investment Agreement") dated
October 31, 2000 between the Company and Buyer, as amended, and the documents
referenced therein (the "Financing");
WHEREAS, the Investment Agreement, inter alia, constituted a portion of
the financing for the Company's acquisition of the capital stock of certain
entities as described in the Stock Purchase Agreement dated August 18, 2000 (as
amended, the "Acquisition Agreement") between the Company and Yaqui Investments
Limited, a company duly organized under the laws of British Virgin Islands
("Yaqui"), which acquisition was consummated on February 22, 2001 (such
acquisition and related financing by Yaqui being referred to herein as the "IPD
Transaction"). In connection with the IPD Transaction, certain subsidiaries of
the Company entered into a financing arrangement (the "Congress Financing") with
Congress Financial Corporation (Western); and
WHEREAS, this Agreement contemplates a merger (the "Merger") in which
the Buyer will acquire the Company, in a merger transaction.
WHEREAS, the parties intend that the Merger will qualify as a tax-free
"reorganization" under Section 368(a)(1(A) and Section 368(a)(2)(D) of the Code.
{PAGE} 6
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows.
1. Definitions.
"Accredited Investor" has the meaning set forth in Regulation D
promulgated under the Securities Act.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable
amounts paid in settlement, liabilities, obligations, taxes, liens, losses,
expenses, and fees, including court costs and reasonable attorneys' fees and
expenses.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act but in the case of the Company
excludes the Buyer and its Affiliates.
"Affiliated Group" means any affiliated group within the meaning of
Code ss.1504(a) or any similar group defined under a similar provision of state,
local, or foreign law.
"Applicable Rate" means the corporate base rate of interest publicly
announced from time to time by Bank of America, N.A.
"Buyer" has the meaning set forth in the preface above.
"Buyer Owned Shares" means Company Shares owned by Buyer.
"Buyer SEC Reports" shall mean the Buyer's Annual Report on Form 10-K
for the fiscal year ended January 31, 2001.
"Buyer Shares" means shares of common stock, par value $0.01 per share,
of Buyer.
"BuyerSub" has the meaning set forth in the preface above.
"Closing" has the meaning set forth in ss.2(g) below.
"Closing Date" has the meaning set forth in ss.2(g) below.
"COBRA" means the requirements of Part 6 of Subtitle B of Title I of
ERISA and Code ss.4980B.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means all of the common stock of the Company, $.001 par
value per share.
"Company" has the meaning set forth in the preface above.
2
{PAGE} 7
"Company Shares" means all of the Common Stock and the Series A
Preferred Stock.
"Confidential Information" means any information concerning the
businesses and affairs of the Company and its Subsidiaries that is not already
generally available to the public.
"Consent" has the meaning set forth in ss. 2(f) below.
"Controlled Groups" has the meaning set forth in Code ss.1563.
"Disclosure Schedule" has the meaning set forth in ss.4 below.
"Employee Benefit Plan" means any (a) nonqualified deferred
compensation or retirement plan or arrangement, (b) qualified defined
contribution retirement plan or arrangement which is an Employee Pension Benefit
Plan, (c) qualified defined benefit retirement plan or arrangement which is an
Employee Pension Benefit Plan (including any Multiemployer Plan), or (d)
Employee Welfare Benefit Plan or material fringe benefit or other retirement,
bonus, or incentive plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA
ss.3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA
ss.3(1).
"Environmental, Health, and Safety Requirements" shall mean all
federal, state, local and foreign statutes, regulations, ordinances and similar
provisions having the force or effect of law, all judicial and administrative
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