FIRST AMENDMENT
EXHIBIT 2.1
FIRST AMENDMENT
FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER, dated as of August 23, 2005 (“First
Amendment”), by and among North American Senior Care, Inc., a Delaware corporation
(“Parent”), NASC Acquisition Corp., a Delaware corporation and a wholly-owned direct
Subsidiary of Parent (“Merger Sub”), Xxxxxxx Enterprises, Inc., a Delaware corporation (the
“Company”) and, solely for purposes of Article 9 of the Merger Agreement (as hereinafter
defined) and Section 3 of this First Amendment, SBEV Property Holdings LLC, a Delaware limited
liability company (“SBEV”).
WHEREAS, Parent, Merger Sub, the Company and SBEV are parties to an Agreement and Plan of
Merger dated as of August 16, 2005 (the “Merger Agreement”) (capitalized terms used but not
defined herein shall have the definitions given to them in the Merger Agreement);
WHEREAS, subsequent to the Merger Agreement, the Company received a Takeover Proposal that the
Company’s Board of Directors concluded was a Superior Proposal (the “Formation Offer”);
WHEREAS, Parent and Merger Sub have offered to amend the terms of the Merger Agreement set
forth herein, and the Company’s Board of Directors has concluded that the Merger Agreement as
amended hereby is superior to the Formation Offer;
WHEREAS, the respective Boards of Directors of Parent, Merger Sub and the Company have
approved and declared advisable the Merger upon the terms and subject to the conditions of the
Merger Agreement as amended hereby and in accordance with the DGCL;
WHEREAS, the respective Boards of Directors of Parent and the Company have determined that the
Merger as so amended (as amended, the “Merger”) is in furtherance of, and consistent with,
their respective business strategies and is in the best interest of their respective stockholders,
and Parent has approved this First Amendment and the Merger as the sole stockholder of Merger Sub,
and the Company Board has approved the Merger; and
WHEREAS, Parent, Merger Sub and the Company wish 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 foregoing and the respective representations,
warranties, covenants and agreements set forth in this First Amendment and intending to be legally
bound hereby, the Parties agree as follows:
Article 1
Representations and Warranties
Section 1.1 The Company represents and warrants to Parent and Merger Sub as follows:
(a) The Company has all necessary corporate power and authority to execute and deliver this
First Amendment, to perform its obligations hereunder and to consummate the transactions
contemplated by the Merger Agreement as amended by this First Amendment. The execution and
delivery of this First Amendment by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly and validly authorized by all necessary corporate
action and no other corporate proceedings on the part of the Company and no stockholder votes are
necessary to authorize this First Amendment or to consummate the transactions contemplated hereby
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other than, with respect to the Merger, the Stockholder Approval. This First Amendment has been
duly authorized and validly executed and delivered by the Company and, assuming this First
Amendment and the Merger Agreement are valid and binding obligations of Parent and Merger Sub, the
Merger Agreement as amended by this First Amendment constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with its terms, subject to
the Bankruptcy and Equity Exception.
(b) The Company has complied in all material respects with Section 6.4 of the Merger
Agreement.
Section 1.2 Parent and Merger Sub jointly and severally represent and warrant to the Company
as follows:
Each of Parent and Merger Sub has all necessary corporate power and authority to execute and
deliver this First Amendment, to perform its obligations hereunder and to consummate the transactions contemplated by the Merger Agreement as amended by this First
Amendment. The execution and delivery of this First Amendment by the Parent and Merger Sub and the
consummation by Parent and Merger Sub of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action and no other corporate proceedings on the part
of Parent and Merger Sub and no stockholder votes are necessary to authorize this First Amendment
or to consummate the transactions contemplated hereby. This First Amendment has been duly
authorized and validly executed and delivered by the Parent and Merger Sub and, assuming this First
Amendment and the Merger Agreement are valid and binding obligations of the Company, the Merger
Agreement as amended by this First Amendment constitutes a legal, valid and
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binding obligation of Parent and Merger Sub, enforceable against each of them in accordance with its terms, subject to
the Bankruptcy and Equity Exception.
Article 2
Amendments to Merger Agreement
Section 2.1 The Merger Consideration provided for in Section 3.1.1 of the Merger Agreement is
increased from $12.80 to $13.00.
Section 2.2 Section 6.1(j) of the Merger Agreement is amended in its entirety to read as
follows:
(j) (i) open any new Company Health Care Facility or engage in any substantial
renovation of any existing Company Health Care Facility (except as permitted
pursuant to Section 6.1(i)), or (ii) enter into any new line of business outside of
its existing business segments;
Section 2.3 The third sentence of Section 6.4.2 of the Merger Agreement is amended in its
entirety to read as follows:
Any Takeover Proposals, bids, offers or other proposals already received by the Company, any
Company Subsidiary or any Company Representatives on or prior to August 23, 2005 and/or
during the bid process shall be deemed not to be Superior Proposals or reasonably likely to
constitute a Superior Proposal.
Section 2.4 The following language is added at the end of Section 6.4.4 of the Merger
Agreement after the words “Section 6.4.2” and immediately prior to the full stop:
or the Parent’s termination rights and rights to receive a Termination Fee in accordance
with Article VIII
Section 2.5 The second sentence of Section 6.5.2 of the Merger Agreement is amended in its
entirety to read as follows:
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On or before October 7, 2005, Parent shall, and shall cause each other member of the Parent
Group, if applicable, to, submit all applications or other materials, if any, required to
commence the process of obtaining such Government Consents, including payment of all
required fees related thereto.
Section 2.6 The first sentence of Section 6.13 of the Merger Agreement is amended in its
entirety to read as follows:
Not later than September 22, 2005, Parent shall cause to be delivered to the Company an
opinion from Houlihan, Lokey, Xxxxxx & Zukin, or such other nationally recognized accounting
or investment banking firm as the Company may reasonably approve, valuing the Company as a
going-concern (including goodwill), on a pro forma basis, immediately after and giving
effect to the transactions contemplated hereby and by the Commitments, and opining that,
assuming, in each case, the transactions contemplated hereby and by the Commitments had been
consummated as proposed, immediately after and giving effect to such transactions on a pro
forma basis, (i) the fair value and present fair saleable value to the Company’s assets
would exceed the Company’s stated liabilities and identified contingent liabilities; (ii)
the Company should be able to pay its debts as they become absolute and mature; and (iii)
the capital remaining in the Company after the transactions contemplated hereby would not be
unreasonably small for the business in which the Company is engaged, as management has
indicated it is now conducted and is proposed to be conducted by Parent following the
consummation of such transactions, and otherwise in form and substance reasonably
satisfactory to the Company, addressed to the Company Board and to Parent, supporting the conclusion that, after giving effect to all of
the transactions contemplated by this Agreement, each of Parent and the Surviving
Corporation will be solvent (or the equivalent thereof, as determined in the reasonable
discretion of the Company) (such opinion, the “Solvency Opinion”).
Section 2.7 (a) The first sentence of Section 6.18 of the Merger Agreement is amended in its
entirety to read as follows:
In consideration for the Company entering into, and as an inducement and condition to the
willingness of the Company to enter into, this Agreement, Parent has transferred to the
Company $7,000,000 in immediately available funds as a good faith deposit (the “Initial
BIF Deposit”).
(b) The second sentence of Section 6.18 of the Merger Agreement is amended in its entirety to
read as follows:
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No later than 5:00 P.M. New York City time on September 22, 2005, Parent shall (A) either
(i) make an additional $53,000,000 good faith deposit (the “Subsequent BIF Deposit”
and, together with the Initial BIF Deposit, the “BIF Deposit”) by wire transfer of
immediately available funds to an account specified in writing by the Company or (ii)
deliver to the Company an irrevocable letter of credit duly executed by HSBC USA, N.A., or
another financial institution reasonably acceptable to the Company, substantially in the
form of Exhibit B hereto (including any substitute letter of credit as provided below, the
“Letter of Credit”), and (B) provide an updated Equity Commitment Letter in
substantially the form attached hereto as Annex 1 and otherwise reasonably satisfactory in
form and substance to the Company.
(c) The sixth sentence of Section 6.18 of the Merger Agreement is amended in its entirety to
read as follows:
The Company and Parent further agree that if Parent fails to (i) make the Subsequent BIF
Deposit or deliver the Letter of Credit or (ii) deliver the updated firm Equity Commitment
Letter described above in form and substance reasonably satisfactory to the Company, in each
case on or before 5:00 P.M. New York City time on September 22, 2005, the Company shall
thereupon be entitled to terminate this Agreement pursuant to Section 8.1(c)(iii), and the
Company shall have the right to retain the Initial BIF Deposit as the Business Interruption Fee and withdraw it from the separate account described above,
it being understood that, notwithstanding anything herein to the contrary, the right of the
Company to terminate this Agreement pursuant to Section 8.1(c)(iii) and retain the Initial
BIF Deposit (and accrued interest thereon) as a Business Interruption Fee shall be the
Company’s sole remedy for failure to make the Subsequent BIF Deposit or deliver the Letter
of Credit.
Section 2.8 Section 8.1(c)(i) of the Merger Agreement is amended in its entirety to read as
follows:
if (x) Parent or Merger Sub shall have breached any of the covenants or
agreements contained in this Agreement to be complied with by Parent or Merger Sub
such that the closing condition set forth in Section 7.3.2 would not be satisfied,
(y) there exists a breach of any representation or warranty of Parent or Merger Sub
contained in this Agreement such that the closing condition set forth in Section
7.3.1 would not be satisfied or (z) the obligor under the Equity Commitment Letter
shall have breached the Equity Commitment Letter or there shall have been a breach
of Section 6.14, and, in the case of (x), (y) or (z), such breach is incapable of
being cured by the Termination Date or is not cured within twenty (20) Business Days
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(or, in the case of clause (z), ten (10) Business Days) after Parent or Merger Sub
receives written notice of such breach from the Company;
Section 2.9 Section 8.1(c)(iii) of the Merger Agreement is amended in its entirety to read as
follows:
if Parent fails (i) to provide the Subsequent BIF Deposit or deliver the Letter of Credit,
or (ii) to provide the Solvency Opinion or (iii) to provide the firm Equity Commitment
Letter referred to in Section 6.18, in each case on or before 5:00 P.M. New York City time
on September 22, 2005.
Section 2.10 Section 8.1(d)(iv) of the Merger Agreement is deleted in its entirety.
Section 2.11 Section 8.4.1 of the Merger Agreement is amended in its entirety to read as
follows:
If this Agreement is terminated pursuant to Section 8.1(b)(i) in the event no Third Party
shall have publicly made, proposed, communicated or disclosed an intention to make a bona
fide Takeover Proposal after the date hereof and prior to the date of termination (or such a
Takeover Proposal shall have become publicly disclosed) and neither Parent,
Merger Sub nor SBEV is in material default of this Agreement at the time of such
Termination, then the Company shall pay Parent the Parent Expenses, not to exceed
$30,000,000. If this Agreement is terminated pursuant to Section 8.1(c)(ii) and neither
Parent, Merger Sub nor SBEV is in material default of this Agreement at the time of such
termination, then the Company shall pay Parent (i) $40,000,000 if such termination occurs
prior to Parent’s performance of its obligations pursuant to Section 6.18 hereof to (w) make
the Subsequent BIF Deposit or deliver the Letter of Credit and (x) deliver the updated
Equity Commitment Letter, or (ii) $60,000,000 in the event of such termination at any time
following Parent’s compliance with such obligation, in any case not later than the day of
such termination. If this Agreement is terminated pursuant to Section 8.1(b)(i) or Section
8.1(d)(i) and neither Parent, Merger Sub nor SBEV is in material default of this Agreement
at the time of such termination, then, in the event that, (i) after the date hereof and
prior to such termination, any Third Party shall have made, proposed, communicated or
disclosed an intention to make a bona fide Takeover Proposal and (ii) within nine (9) months
of the termination of this Agreement the Company enters into a definitive agreement with any
Third Party with respect to a Takeover Proposal (with all percentages in the definition of
Takeover Proposal increased to fifty (50) percent) or any Takeover Proposal is consummated
by a Third Party (with all percentages in the definition of Takeover Proposal increased to
fifty (50) percent), then the Company shall pay, or cause to be paid to, Parent (A)
$40,000,000, in the event of such termination prior to
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Parent’s performance of its obligations pursuant to Section 6.18 hereof to (w) make the Subsequent BIF Deposit or
deliver the Letter of Credit and (x) deliver the updated Equity Commitment Letter, or (B)
$60,000,000 in the event of such termination at any time following Parent’s compliance with
such obligation, in either case upon consummation of such Takeover Proposal. If this
Agreement is terminated pursuant to Section 8.1(d)(ii) in circumstances unrelated to a
Takeover Proposal and neither Parent, Merger Sub nor SBEV is in material default of this
Agreement at the time of such termination, the Company shall pay Parent an amount equal to
the Parent Expenses, not to exceed the lesser of (x) the BIF Deposit at the time of such
termination (including funds available under the Letter of Credit), and (y) $30,000,000. If
this Agreement is terminated pursuant to Section 8.1.(d)(ii) in circumstances related to a
Takeover Proposal and neither Parent, Merger Sub nor SBEV is in material default of this
Agreement at the time of such termination, the Company shall pay Parent (i) $40,000,000 if
such termination occurs prior to Parent’s performance of its obligations pursuant to Section
6.18 hereof to (w) make the Subsequent BIF Deposit or deliver the Letter of Credit and (x)
deliver the updated Equity Commitment Letter, or (ii) $60,000,000 in the event of such
termination at any time following Parent’s compliance with such obligation. Any amount paid
pursuant to this Section 8.4.1, whether characterized as Parent Expenses or otherwise, the
“Termination Fee”. The Termination Fee (including any Parent Expenses) shall be
paid by wire transfer of immediately available funds to an account designated in writing to
the Company by Parent. For the avoidance of doubt, in no event shall the Company be
obligated to pay, or cause to paid, the Termination Fee (including any Parent Expenses) on
more than one occasion.
Section 2.12 The final sentence of Section 8.6 of the Merger Agreement is amended in its
entirety to read as follows:
The failure of any Party to assert any of its rights under this Agreement (including,
without limitation, any right of termination pursuant to Section 8.1 hereof, regardless of
when such right arises) or otherwise shall not constitute a waiver of those rights.
Section 2.13 Section 9.6 of the Merger Agreement is amended in its entirety to read as
follows:
This Agreement, as amended by that certain First Amendment dated as of August 23, 2005 by
and among Parent, Merger Sub, the Company and, solely for purposes of Article 3 thereof,
SBEV (the “First Amendment”), (together with the Exhibits, Parent Disclosure
Schedule, Company Disclosure Schedule and the other documents delivered pursuant hereto),
the Commitments and the Confidentiality
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Agreement constitute the entire agreement of the Parties and supersede all prior agreements and undertakings, both written and oral, between
the Parties, or any of them, with respect to the subject matter hereof and thereof and,
except as otherwise expressly provided herein, are not (other than in the case of Sections
3.5, 6.8, 6.9 and 6.13) intended to confer upon any other Person any rights or remedies
hereunder. EACH PARTY HERETO AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN THIS AGREEMENT, THE FIRST AMENDMENT AND THE DISCLOSURE SCHEDULES, NONE OF
PARENT, MERGER SUB AND THE COMPANY MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES, AND EACH
HEREBY DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES MADE BY ITSELF OR ANY OF ITS
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, FINANCIAL AND LEGAL ADVISORS OR OTHER
REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT, THE FIRST
AMENDMENT OR THE MERGER, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE OTHER OR THE
OTHER’S REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION WITH RESPECT TO ANY ONE OR
MORE OF THE FOREGOING.
Article 3
General Provisions
Section 3.1 The Company Disclosure Schedules, as delivered to Parent and Merger Sub on the
date hereof, shall replace the Company Disclosure Schedules attached to the Merger Agreement in
their entirety.
Section 3.2 Except as expressly amended hereby, the Merger Agreement shall remain in full
force and effect.
Section 3.3 The provisions of Article 9 of the Merger Agreement shall apply to this First
Amendment as if set forth herein in their entirety.
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IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this Agreement to be
executed as of the date first written above by their respective officers thereunto duly authorized.
NORTH AMERICAN SENIOR CARE, INC. | ||||
By: |
/s/ Xxxx Xxxxxxxxx | |||
Name: Xxxx Xxxxxxxxx | ||||
Title: President | ||||
NASC ACQUISITION CORP. | ||||
By: |
/s/ Xxxx Xxxxxxxxx | |||
Name: Xxxx Xxxxxxxxx | ||||
Title: President | ||||
XXXXXXX ENTERPRISES, INC. | ||||
By: |
/s/ Xxxxxxx X. Xxxxx | |||
Name: Xxxxxxx X. Xxxxx | ||||
Title: Chairman, President and Chief Executive Officer | ||||
SBEV PROPERTY HOLDINGS LLC | ||||
By: |
/s/ Xxxxxxx Xxxxxxxxx | |||
Name: Xxxxxxx Xxxxxxxxx | ||||
Title: Manager |
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