0000950144-95-002630.txt : 19950920
0000950144-95-002630.hdr.sgml : 19950920
ACCESSION NUMBER: 0000950144-95-002630
CONFORMED SUBMISSION TYPE: SC 14D1
PUBLIC DOCUMENT COUNT: 25
FILED AS OF DATE: 19950919
SROS: NYSE
GROUP MEMBERS: NELSON ACQUISITION CORP.
GROUP MEMBERS: NELSON THOMAS INC
GROUP MEMBERS: THOMAS NELSON, INC.
SUBJECT COMPANY:
COMPANY DATA:
COMPANY CONFORMED NAME: GIBSON C R CO INC
CENTRAL INDEX KEY: 0000041365
STANDARD INDUSTRIAL CLASSIFICATION: BLANKBOOKS, LOOSELEAF BINDERS & BOOKBINDING & RELATED WORK [2780]
IRS NUMBER: 060361615
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: SC 13D
SEC ACT: 1934 Act
SEC FILE NUMBER: 005-16451
FILM NUMBER: 95574836
BUSINESS ADDRESS:
STREET 1: 32 KNIGHT ST
CITY: NORWALK
STATE: CT
ZIP: 06856
BUSINESS PHONE: 2038474543
MAIL ADDRESS:
STREET 1: 32 KNIGHT STREET
CITY: NORWALK
STATE: CT
ZIP: 06856
FORMER COMPANY:
FORMER CONFORMED NAME: GIBSON JOHN CO
DATE OF NAME CHANGE: 19700522
SUBJECT COMPANY:
COMPANY DATA:
COMPANY CONFORMED NAME: GIBSON C R CO INC
CENTRAL INDEX KEY: 0000041365
STANDARD INDUSTRIAL CLASSIFICATION: BLANKBOOKS, LOOSELEAF BINDERS & BOOKBINDING & RELATED WORK [2780]
IRS NUMBER: 060361615
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: SC 14D1
SEC ACT: 1934 Act
SEC FILE NUMBER: 005-16451
FILM NUMBER: 95574837
BUSINESS ADDRESS:
STREET 1: 32 KNIGHT ST
CITY: NORWALK
STATE: CT
ZIP: 06856
BUSINESS PHONE: 2038474543
MAIL ADDRESS:
STREET 1: 32 KNIGHT STREET
CITY: NORWALK
STATE: CT
ZIP: 06856
FORMER COMPANY:
FORMER CONFORMED NAME: GIBSON JOHN CO
DATE OF NAME CHANGE: 19700522
FILED BY:
COMPANY DATA:
COMPANY CONFORMED NAME: NELSON THOMAS INC
CENTRAL INDEX KEY: 0000071023
STANDARD INDUSTRIAL CLASSIFICATION: BOOKS: PUBLISHING OR PUBLISHING AND PRINTING [2731]
IRS NUMBER: 620679364
STATE OF INCORPORATION: TN
FISCAL YEAR END: 0331
FILING VALUES:
FORM TYPE: SC 14D1
BUSINESS ADDRESS:
STREET 1: P O BOX 141000
CITY: NASHVILLE
STATE: TN
ZIP: 37214-1000
BUSINESS PHONE: 6158899000
MAIL ADDRESS:
STREET 1: P O BOX 141000
CITY: NASHVILLE
STATE: TN
ZIP: 37214-1000
FORMER COMPANY:
FORMER CONFORMED NAME: ROYAL PUBLISHERS INC
DATE OF NAME CHANGE: 19721019
FILED BY:
COMPANY DATA:
COMPANY CONFORMED NAME: NELSON THOMAS INC
CENTRAL INDEX KEY: 0000071023
STANDARD INDUSTRIAL CLASSIFICATION: BOOKS: PUBLISHING OR PUBLISHING AND PRINTING [2731]
IRS NUMBER: 620679364
STATE OF INCORPORATION: TN
FISCAL YEAR END: 0331
FILING VALUES:
FORM TYPE: SC 14D1
BUSINESS ADDRESS:
STREET 1: P O BOX 141000
CITY: NASHVILLE
STATE: TN
ZIP: 37214-1000
BUSINESS PHONE: 6158899000
MAIL ADDRESS:
STREET 1: P O BOX 141000
CITY: NASHVILLE
STATE: TN
ZIP: 37214-1000
FORMER COMPANY:
FORMER CONFORMED NAME: ROYAL PUBLISHERS INC
DATE OF NAME CHANGE: 19721019
SC 14D1
1
THOMAS NELSON, INC. SCHEDULE 14D1
1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 19, 1995
---------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
SCHEDULE 14D-1
Tender Offer Statement
Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
and
SCHEDULE 13D
Under the Securities Exchange Act of 1934
September 13, 1995
Date of event which requires filing of this Schedule 13D
THE C. R. GIBSON COMPANY
(Name of subject company)
NELSON ACQUISITION CORP.
THOMAS NELSON, INC.
(Bidders)
Common Stock, $0.10 par value
(Title of class of securities)
374762-10-2
(CUSIP number of class of securities)
JOE L. POWERS
EXECUTIVE VICE PRESIDENT AND SECRETARY
THOMAS NELSON, INC.
NELSON PLACE AT ELM HILL PIKE
NASHVILLE, TENNESSEE 37214-1000
TELEPHONE: (615) 889-9000
(Name, address and telephone number of person authorized
to receive notices and communications on behalf of bidders)
Copy to:
JAMES H. CHEEK, III, ESQ.
BASS, BERRY & SIMS
FIRST AMERICAN CENTER
NASHVILLE, TENNESSEE 37238
TELEPHONE: (615) 742-6200
CALCULATION OF FILING FEE
Transaction Valuation(1) Amount of Filing Fee(2)
--------------------------------------------------------------------------------------------
$69,772,932 $13,955
/ / Check box if any part of the fee is offset as provided by Rule 0-11(a) and
identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount Previously Paid: Not Applicable Filing Party: Not Applicable
Form or Registration No.: Not Applicable Date Filed: Not Applicable
---------------
(1) The Transaction Valuation was calculated by multiplying $9.00, the per share
tender offer price, by 7,752,548, the sum of (i) the 7,444,039 shares of
Common Stock of the subject Company outstanding and (ii) the 308,509 shares
of Common Stock of the subject Company subject to options outstanding. Such
number of shares represents the number of shares outstanding as of
September 14, 1995, and assumes the exercise of all outstanding options to
acquire shares from the subject Company.
(2) Calculated in accordance with Rule 0-11(d) promulgated under the Securities
Exchange Act of 1934, as amended.
Exhibit Index is Located on Page 8
2
CUSIP NO. 374762-10-2 14D-1/13D Page 2 of Pages
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Nelson Acquisition Corp.
I.R.S. Identification No. 62-1614561
2. Check the Appropriate Box if a Member of a Group* (a) / /
(b) / /
3. SEC Use Only
4. Source of Funds*
AF
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(e) or 2(f) / /
6. Citizenship or Place of Organization
Delaware
7. Aggregate Amount Beneficially Owned by Each Reporting
Person
2,004,246 Shares which may be deemed beneficially owned
pursuant to the Stock Option Agreements described
herein**
8. Check Box if the Aggregate Amount in Row (7)
Excludes Certain Shares*................................. / /
9. Percent of Class Represented by Amount in Row (7)
26.9%
10. Type of Reporting Person*
CO
* SEE INSTRUCTIONS BEFORE FILLING OUT.
** Pursuant to the Stock Option Agreements described herein, the reporting
person may be deemed to have shared voting and dispositive power, together
with Thomas Nelson, Inc., with respect to the indicated shares.
2
3
CUSIP NO. 374762-10-2 14D-1/13D Page 3 of Pages
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Thomas Nelson, Inc.
I.R.S. Identification No. 62-0679364
2. Check the Appropriate Box if a Member of a Group* (a) / /
(b) / /
3. SEC Use Only
4. Source of Funds*
BK
5. Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) / /
6. Citizenship or Place of Organization
Tennessee
7. Aggregate Amount Beneficially Owned by Each Reporting
Person
2,004,246 Shares which may be deemed beneficially owned
pursuant to the Stock Option Agreements described
herein**
8. Check Box if the Aggregate Amount in Row (7)
Excludes Certain Shares*................................. / /
9. Percent of Class Represented by Amount in Row (7)
26.9%
10. Type of Reporting Person*
CO
* SEE INSTRUCTIONS BEFORE FILLING OUT.
** Pursuant to the Stock Option Agreements described herein, the reporting
person may be deemed to have shared voting and dispositive power, together
with Nelson Acquisition Corp., with respect to the indicated shares.
3
4
TENDER OFFER
This Tender Offer Statement on Schedule 14D-1 and Schedule 13D (this
"Statement") relates to the offer by Nelson Acquisition Corp., a Delaware
corporation ("Offeror") and wholly-owned subsidiary of Thomas Nelson, Inc., a
Tennessee corporation ("Parent"), to purchase all outstanding shares of common
stock, par value $0.10 per share (the "Shares"), of The C.R. Gibson Company, a
Delaware corporation, at a price of $9.00 per Share, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Offer to Purchase
dated September 19, 1995 (the "Offer to Purchase") and in the related Letter of
Transmittal (which together constitute the "Offer"), copies of which are
attached hereto as Exhibits (a)(1) and (a)(2), respectively.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is The C.R. Gibson Company, a Delaware
corporation (the "Company"), which has its principal executive offices at 32
Knight Street, Norwalk, Connecticut 06856.
(b) The class and amount of equity securities being sought is all the
outstanding Shares of common stock, par value $0.10 per share, of the Company.
The information set forth in the Introduction and Section 1 ("Terms of the
Offer") of the Offer to Purchase is incorporated herein by reference.
(c) The information concerning the principal market in which the Shares are
traded and certain high and low sales prices for the Shares in such principal
market set forth in Section 6 ("Price Range of Shares; Dividends") of the Offer
to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) This Statement is filed by Offeror and Parent. The
information set forth in the Introduction, Section 9 ("Certain Information
Concerning the Parent and the Offeror") and Schedule I of the Offer to Purchase
is incorporated herein by reference.
(e) and (f) During the last five years, none of Offeror or Parent, and, to
the best knowledge of Offeror and Parent, none of the persons listed in Schedule
I of the Offer to Purchase has been (i) convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting activities subject
to, federal or state securities laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introduction, Section 11
("Background of the Offer; Past Contacts, Transactions or Negotiations with the
Company"), Section 12 ("Purpose of the Offer and the Merger; Plans for the
Company") and Section 13 ("The Tender Offer and Merger Agreement and the Stock
Option Agreements") is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(c) The information set forth in Section 10 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in the Introduction, Section 10 ("Source
and Amount of Funds"), Section 11 ("Background of the Offer, Past Contacts,
Transactions or Negotiations with the Company") and Section 12 ("Purpose of the
Offer and the Merger; Plans for the Company") of the Offer to Purchase is
incorporated herein by reference.
(f) and (g) The information set forth in Section 7 ("Effect of the Offer on
AMEX Listing; Market for Shares and Registration under the Exchange Act") of the
Offer to Purchase is incorporated herein by reference.
4
5
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) and (b) The information set forth in Section 9 ("Certain Information
Concerning the Parent and the Offeror") and Schedule I of the Offer to Purchase
is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, Section 11 ("Background of
the Offer; Past Contacts, Transactions or Negotiations with the Company") and
Section 13 ("The Tender Offer and Merger Agreement and the Stock Option
Agreements") of the Offer to Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and Section 17 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9 ("Certain Information Concerning the
Parent and the Offeror") of the Offer to Purchase is incorporated herein by
reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) Not applicable.
(b)-(e) The information set forth in Section 7 ("Effect of the Offer on
AMEX Listing, Market for Shares and Registration Under the Exchange Act") and
Section 16 ("Certain Regulatory and Legal Matters") of the Offer to Purchase is
incorporated herein by reference.
(f) The information set forth in the Offer to Purchase, the Letter of
Transmittal, the Tender Offer and Merger Agreement, dated as of September 13,
1995, among Parent, Offeror and the Company, and the Stock Option Agreements
dated as of September 13, 1995 among Parent, Offeror and certain stockholders of
the Company, copies of which are attached hereto as Exhibits (a)(1), (a)(2),
(c)(1) and (c)(2), is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) -- Offer to Purchase, dated September 19, 1995.
(a)(2) -- Letter of Transmittal.
(a)(3) -- Notice of Guaranteed Delivery.
(a)(4) -- Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
(a)(5) -- Form of Letter from Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees to Clients.
(a)(6) -- Form of Letter to Participants in the Employee Stock Ownership Plan
and Trust.
(a)(7) -- Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(8) -- Summary Advertisement as published in The Wall Street Journal on
September 19, 1995.
(a)(9) -- Text of Press Release issued by Parent and the Company on September
14, 1995.
5
6
(b)(1) -- Credit Agreement dated as of November 30, 1992, among the Company,
Third National Bank in Nashville, First National Bank of Louisville,
First American National Bank in Nashville, NationsBank of Texas, N.A.
in Dallas, and Creditanstalt-Bankverein in New York, as amended by
First Amendment to Credit Agreement dated as of February 26, 1993,
Second Amendment to Credit Agreement dated as of September 19, 1994,
Third Amendment to Credit Agreement dated as of December 23, 1994,
and Fourth Amendment to Credit Agreement and First Amendment to
Revolving Credit Notes dated as of March 13, 1995.
(b)(2) -- Letter dated as of September 15, 1995, among the Parent and Third
National Bank in Nashville, regarding interim financing.
(c)(1) -- Tender Offer and Merger Agreement, dated as of September 13, 1995,
among Parent, Offeror and the Company.
(c)(2) -- Stock Option Agreement, dated as of September 13, 1995, among Parent,
Offeror and Overseas Private Investor Partners.
(c)(3) -- Stock Option Agreement, dated as of September 13, 1995, among Parent,
Offeror and John G. Russell.
(c)(4) -- Stock Option Agreement, dated as of September 13, 1995, among Parent,
Offeror and Robert G. Bowman.
(c)(5) -- Stock Option Agreement, dated as of September 13, 1995, among Parent,
Offeror and James M. Harrison.
(c)(6) -- Stock Option Agreement, dated as of September 13, 1995, among Parent,
Offeror and Frank A. Rosenberry.
(c)(7) -- Stock Option Agreement, dated as of September 13, 1995, among Parent,
Offeror and Willard J. Overlock.
(c)(8) -- Stock Option Agreement, dated as of September 13, 1995, among Parent,
Offeror and Rudolf Eberstadt, Jr.
(c)(9) -- Stock Option Agreement, dated as of September 13, 1995, among Parent,
Offeror and Rudolf Eberstadt Charitable Remainder Unitrust.
(c)(10) -- Stock Option Agreement, dated as of September 13, 1995, among Parent,
Offeror and Overseas Equity Investor Partners.
(c)(11) -- Stock Option Agreement, dated as of September 13, 1995, among Parent,
Offeror and Bradford Venture Partners, L.P.
(c)(12) -- Engagement letter, dated as of January 18, 1994, by and between
Parent and PaineWebber Incorporated.
(c)(13) -- Dealer Manager Agreement, dated as of September 15, 1995, by and
among Parent, the Offeror and PaineWebber Incorporated.
(d) -- None.
(e) -- Not applicable.
(f) -- None.
6
7
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
September 19, 1995 NELSON ACQUISITION CORP.
By: /s/ JOE L. POWERS
-----------------------------
Joe L. Powers
Secretary
THOMAS NELSON, INC.
By: /S/ JOE L. POWERS
-----------------------------
Joe L. Powers
Executive Vice President and
Secretary
7
8
EXHIBIT INDEX
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
----------------------------------------------------------------------------------------------
(a)(1) -- Offer to Purchase, dated September 19, 1995..........................
(a)(2) -- Letter of Transmittal................................................
(a)(3) -- Notice of Guaranteed Delivery........................................
(a)(4) -- Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees...................................................
(a)(5) -- Form of Letter from Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees to Clients..............................
(a)(6) -- Form of Letter to Participants in the Company's Employee Stock
Ownership Plan and Trust.
(a)(7) -- Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9..................................................
(a)(8) -- Summary Advertisement as published in The Wall Street Journal on
September 19, 1995...................................................
(a)(9) -- Text of Press Release issued by Parent and the Company on September
14, 1995.............................................................
(b)(1) -- Credit Agreement dated as of November 30, 1992, among the Company,
Third National Bank in Nashville, First National Bank of Louisville,
First American National Bank in Nashville, NationsBank of Texas, N.A.
in Dallas, and Creditanstalt-Bankverein in New York, as amended by
First Amendment to Credit Agreement dated as of February 26, 1993,
Second Amendment to Credit Agreement dated as of September 19, 1994,
Third Amendment to Credit Agreement dated as of December 23, 1994,
and Fourth Amendment to Credit Agreement and First Amendment to
Revolving Credit Notes dated as of March 13, 1995....................
(b)(2) -- Letter dated as of September 15, 1995, among the Parent and Third
National Bank in Nashville, regarding interim financing..............
(c)(1) -- Tender Offer and Merger Agreement, dated as of September 13, 1995,
among Parent, Offeror and the Company................................
(c)(2) -- Stock Option Agreement, dated as of September 13, 1995, among Parent,
Offeror and Overseas Private Investor Partners.......................
(c)(3) -- Stock Option Agreement, dated as of September 13, 1995, among Parent,
Offeror and John G. Russell..........................................
(c)(4) -- Stock Option Agreement, dated as of September 13, 1995, among Parent,
Offeror and Robert G. Bowman.........................................
(c)(5) -- Stock Option Agreement, dated as of September 13, 1995, among Parent,
Offeror and James M. Harrison........................................
(c)(6) -- Stock Option Agreement, dated as of September 13, 1995, among Parent,
Offeror and Frank A. Rosenberry......................................
(c)(7) -- Stock Option Agreement, dated as of September 13, 1995, among Parent,
Offeror and Willard J. Overlock......................................
(c)(8) -- Stock Option Agreement, dated as of September 13, 1995, among Parent,
Offeror and Rudolf Eberstadt, Jr.....................................
(c)(9) -- Stock Option Agreement, dated as of September 13, 1995, among Parent,
Offeror and Rudolf Eberstadt Charitable Remainder Unitrust...........
8
9
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
----------------------------------------------------------------------------------------------
(c)(10) -- Stock Option Agreement, dated as of September 13, 1995, among Parent,
Offeror and Overseas Equity Investor Partners........................
(c)(11) -- Stock Option Agreement, dated as of September 13, 1995, among Parent,
Offeror and Bradford Venture Partners, L.P...........................
(c)(12) -- Engagement letter, dated as of January 18, 1994, by and between
Parent and PaineWebber Incorporated..................................
(c)(13) -- Dealer Manager Agreement, dated as of September 15, 1995, by and
among Parent, the Offeror and PaineWebber Incorporated...............
(d) -- None.................................................................
(e) -- Not applicable.......................................................
(f) -- None.................................................................
9
EX-99.A1
2
OFFER TO PURCHASE
1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
THE C.R. GIBSON COMPANY
AT
$9.00 NET PER SHARE IN CASH
BY
NELSON ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
THOMAS NELSON, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, OCTOBER 17, 1995,
UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED BY THE EXPIRATION DATE AND NOT WITHDRAWN THAT NUMBER OF SHARES OF
COMMON STOCK OF THE C.R. GIBSON COMPANY REPRESENTING AT LEAST A MAJORITY OF THE
OUTSTANDING SHARES ON A FULLY DILUTED BASIS, AND (II) SATISFACTION OF CERTAIN
OTHER TERMS AND CONDITIONS. SEE SECTION 15. THE OFFER IS NOT SUBJECT TO A
FINANCING CONDITION.
THE OFFER IS BEING MADE IN CONNECTION WITH THE TENDER OFFER AND MERGER
AGREEMENT DATED AS OF SEPTEMBER 13,1995, AMONG THOMAS NELSON, INC., NELSON
ACQUISITION CORP., AND THE C.R. GIBSON COMPANY. THE BOARD OF DIRECTORS OF THE
C.R. GIBSON COMPANY HAS APPROVED THE OFFER, THE MERGER AND THE TENDER OFFER AND
MERGER AGREEMENT, HAS DETERMINED THAT THE TERMS OF EACH OF THE OFFER AND THE
MERGER AND THE TERMS OF THE TENDER OFFER AND MERGER AGREEMENT ARE FAIR TO AND IN
THE BEST INTERESTS OF THE C.R. GIBSON COMPANY'S STOCKHOLDERS AND RECOMMENDS THAT
THE C.R. GIBSON COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES
IN THE OFFER.
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
shares of common stock, par value $0.10 per share (the "Shares"), of The C.R.
Gibson Company should either (i) complete and sign the Letter of Transmittal or
a facsimile thereof in accordance with the instructions in the Letter of
Transmittal and deliver the Letter of Transmittal with the Shares and all other
required documents to the Depositary, or follow the procedure for book-entry
transfer set forth in Section 3 or (ii) request his broker, dealer, commercial
bank, trust company or other nominee to effect the transaction for such
stockholder. A stockholder having Shares registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact such person
if he desires to tender his Shares.
Any stockholder who desires to tender Shares and cannot deliver such Shares
and all other required documents to the Depositary by the expiration of the
Offer must tender such Shares pursuant to the guaranteed delivery procedure set
forth in Section 3.
Questions and requests for assistance or additional copies of this Offer to
Purchase, the Letter of Transmittal and other tender offer materials may be
directed to the Information Agent or the Dealer Manager at their respective
addresses and telephone numbers set forth on the back cover of this Offer to
Purchase.
------------------------
The Dealer Manager for the Offer is:
PAINEWEBBER INCORPORATED
SEPTEMBER 19, 1995
2
TABLE OF CONTENTS
PAGE
----
INTRODUCTION..................................................................... 2
1. TERMS OF THE OFFER............................................................... 4
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.................................... 5
3. PROCEDURE FOR TENDERING SHARES................................................... 6
4. WITHDRAWAL RIGHTS................................................................ 8
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.......................................... 8
6. PRICE RANGE OF SHARES; DIVIDENDS................................................. 9
7. EFFECT OF THE OFFER ON AMEX LISTING, MARKET FOR SHARES AND REGISTRATION UNDER THE
EXCHANGE ACT..................................................................... 10
8. CERTAIN INFORMATION CONCERNING THE COMPANY....................................... 11
9. CERTAIN INFORMATION CONCERNING THE PARENT AND THE OFFEROR........................ 12
10. SOURCE AND AMOUNT OF FUNDS....................................................... 14
11. BACKGROUND OF THE OFFER; PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE
COMPANY.......................................................................... 14
12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY....................... 16
13. THE TENDER OFFER AND MERGER AGREEMENT AND THE STOCK OPTION AGREEMENTS............ 18
14. DIVIDENDS AND DISTRIBUTIONS...................................................... 24
15. CERTAIN CONDITIONS TO THE OFFER.................................................. 24
16. CERTAIN REGULATORY AND LEGAL MATTERS............................................. 26
17. FEES AND EXPENSES................................................................ 27
18. MISCELLANEOUS.................................................................... 27
SCHEDULE I. CERTAIN INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS
OF THE PARENT AND THE OFFEROR
3
TO THE HOLDERS OF COMMON STOCK OF
THE C.R. GIBSON COMPANY:
INTRODUCTION
Nelson Acquisition Corp., a Delaware corporation (the "Offeror") and a
wholly owned subsidiary of Thomas Nelson, Inc., a Tennessee corporation (the
"Parent"), hereby offers to purchase all outstanding shares of Common Stock, par
value $0.10 per share (the "Shares"), of The C.R. Gibson Company, a Delaware
corporation (the "Company"), at a purchase price of $9.00 per Share, net to the
seller in cash, without interest, upon the terms and subject to the conditions
set forth in this Offer to Purchase and in the related Letter of Transmittal
(which together constitute the "Offer"). Tendering holders of Shares will not be
obligated to pay brokerage fees or commissions or, except as set forth in the
Letter of Transmittal, transfer taxes on the purchase of Shares by the Offeror
pursuant to the Offer. The Offeror will pay all charges and expenses of
PaineWebber Incorporated (the "Dealer Manager"), Trust Company Bank (the
"Depositary") and D. F. King & Co., Inc. (the "Information Agent"), in
connection with the Offer.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY HAS APPROVED THE OFFER,
THE MERGER (AS HEREINAFTER DEFINED) AND THE MERGER AGREEMENT (AS HEREINAFTER
DEFINED), HAS DETERMINED THAT THE TERMS OF EACH OF THE OFFER, THE MERGER AND THE
MERGER AGREEMENT ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY'S
STOCKHOLDERS, AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER
AND TENDER THEIR SHARES IN THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER
OF SHARES WHICH CONSTITUTES AT LEAST A MAJORITY OF THE SHARES OUTSTANDING ON A
FULLY DILUTED BASIS ON THE DATE OF PURCHASE (THE "MINIMUM CONDITION"). THE OFFER
IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS. SEE SECTION 15. THE OFFER IS NOT
SUBJECT TO A FINANCING CONDITION. THE OFFEROR AND THE PARENT HAVE OBTAINED FROM
CERTAIN STOCKHOLDERS OF THE COMPANY AGREEMENTS TO TENDER PURSUANT TO THE OFFER
APPROXIMATELY 26.9% OF THE OUTSTANDING SHARES.
The Offer is being made pursuant to the Tender Offer and Merger Agreement,
dated as of September 13, 1995 (the "Merger Agreement"), among the Parent, the
Offeror and the Company. The Merger Agreement provides that, among other things,
as soon as practicable after the purchase of Shares pursuant to the Offer and
the satisfaction of the other conditions set forth in the Merger Agreement and
in accordance with the relevant provisions of the General Corporation Law of the
State of Delaware ("DGCL"), the Offeror will be merged with and into the Company
(the "Merger"). See Section 12. Following consummation of the Merger, the
Company will continue as the surviving corporation (the "Surviving Corporation")
and will be a wholly owned subsidiary of the Parent. At the effective time of
the Merger (the "Effective Time"), each issued and outstanding Share (other than
Shares owned by the Company as treasury stock, Shares owned by the Parent or the
Offeror or any subsidiary thereof, or Shares with respect to which appraisal
rights are properly exercised under the DGCL ("Dissenting Shares")) will be
converted into and represent the right to receive $9.00 (or any higher price
that may be paid for each Share pursuant to the Offer) in cash, without interest
thereon (the "Offer Price"). See Section 5 for a description of certain tax
consequences of the Offer and the Merger.
The Parent, the Offeror and certain stockholders of the Company, including
certain directors and affiliates of the Company (together the "Selling
Stockholders"), have entered into separate Stock Option Agreements, dated as of
September 13, 1995 (the "Option Agreements"), pursuant to which the Selling
Stockholders have given the Parent an option to purchase, upon the terms and
subject to the conditions set forth in the Option Agreements, 2,004,246 Shares
(the "Subject Shares") beneficially owned by such Selling Stockholders,
representing approximately 26.9% of the outstanding Shares. The Option
Agreements further provide, among other things, that the Selling Stockholders
are required to tender all of the Subject Shares in the Offer. See Section 13.
The Company has advised the Offeror that as of September 14, 1995, there
were (a) 7,444,039 Shares issued and outstanding, and (b) outstanding stock
options to purchase an aggregate of 308,509 Shares (all of
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which had exercise prices less than $9.00). As of the date hereof, neither the
Offeror nor the Parent beneficially owns any Shares (other than as a result of
the Option Agreements). If the Offeror acquires at least 3,876,275 Shares in the
Offer, it will control a majority of the outstanding Shares on a fully diluted
basis. Accordingly, the Offeror would have sufficient voting power to approve
the Merger without the affirmative vote of any other stockholder. In the event
the Offeror acquires 90% or more of the outstanding Shares through the Offer,
the Offeror and the Parent would be able to effect the Merger pursuant to the
short form merger provisions of the DGCL, without prior notice to, or any action
by, any other stockholder of the Company.
On September 11, 1995, the Company declared a quarterly dividend of $0.04
per Share, payable on October 5, 1995, to stockholders of record on September
25, 1995. Tendering Shares pursuant to the Offer will not affect the right of
stockholders of record on September 25, 1995 to receive this dividend.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
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1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension or
amendment), the Offeror will accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 4. The term "Expiration Date" means 12:00 Midnight, New
York City time, on Tuesday, October 17, 1995, unless the Offeror shall have
extended the period of time for which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as so
extended by the Offeror, shall expire.
If the Offeror shall decide, in its sole discretion, to increase the
consideration offered in the Offer to holders of Shares and if, at the time that
notice of such increase in the consideration being offered is first published,
sent or given to holders of Shares in the manner specified below, the Offer is
scheduled to expire at any time earlier than the expiration of a period ending
on the tenth business day from, and including, the date that such notice is
first so published, sent or given, then the Offer will be extended until the
expiration of such period of ten business days. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or a federal holiday,
and consists of the time period from 12:01 a.m. through 12:00 Midnight, New York
City time.
THE MERGER AGREEMENT AND THE OFFER MAY BE TERMINATED BY THE OFFEROR AND THE
PARENT IF, AMONG OTHER THINGS, THE MINIMUM CONDITION IS NOT SATISFIED. THE OFFER
IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS. SEE SECTION 15. THE OFFER IS NOT
SUBJECT TO A FINANCING CONDITION. The Offeror reserves the right (but shall not
be obligated), in accordance with applicable rules and regulations of the United
States Securities and Exchange Commission (the "Commission"), subject to the
limitations set forth in the Merger Agreement and described below, to waive or
reduce the Minimum Condition or to waive any other condition to the Offer. If
the Minimum Condition or any of the other conditions set forth in Section 15
have not been satisfied by 12:00 Midnight, New York City time, on Tuesday,
October 17, 1995 (or any other time then set as the Expiration Date), the
Offeror may, subject to the terms of the Merger Agreement as described below,
elect to (1) extend the Offer and, subject to applicable withdrawal rights,
retain all tendered Shares until the expiration of the Offer, as extended, (2)
subject to complying with applicable rules and regulations of the Commission,
accept for payment all Shares so tendered and not extend the Offer, or (3)
terminate the Offer and not accept for payment any Shares and return all
tendered Shares to tendering stockholders.
Subject to the limitations set forth in the Merger Agreement and described
below, the Offeror reserves the right (but will not be obligated), at any time
or from time to time in its sole discretion, to extend the period during which
the Offer is open by giving oral or written notice of such extension to the
Depositary and by making a public announcement of such extension. There can be
no assurance that the Offeror will exercise its right to extend the Offer.
Subject to the applicable rules and regulations of the Commission and
subject to the limitations set forth in the Merger Agreement, the Offeror also
expressly reserves the right, at any time and from time to time, in its sole
discretion, (i) to delay payment for any Shares regardless of whether such
Shares were theretofore accepted for payment, or to terminate the Offer and not
to accept for payment or pay for any Shares not theretofore accepted for payment
or paid for, upon the occurrence of any of the conditions set forth in Section
15, by giving oral or written notice of such delay or termination to the
Depositary, and (ii) at any time or from time to time, to amend the Offer in any
respect. The Offeror's right to delay payment for any Shares or not to pay for
any Shares theretofore accepted for payment is subject to the applicable rules
and regulations of the Commission, including Rule 14e-1(c) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), relating to the Offeror's
obligation to pay for or return tendered Shares promptly after the termination
or withdrawal of the Offer.
Any extension of the period during which the Offer is open, delay in
acceptance for payment, or payment, termination or amendment of the Offer will
be followed, as promptly as practicable, by public announcement thereof, such
announcement in the case of an extension to be issued not later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date in accordance with the public announcement requirements of Rules
14d-4(c), 14d-6(d) and 14e-1(d) under the Exchange Act. Without
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limiting the obligation of the Offeror under such rules or the manner in which
the Offeror may choose to make any public announcement, the Offeror currently
intends to make announcements by issuing a press release to Dow Jones News
Service and making any appropriate filing with the Commission.
If the Offeror makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer (including a waiver of the Minimum Condition), the Offeror will
disseminate additional tender offer materials and extend the Offer if and to the
extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act or
otherwise. The minimum period during which a tender offer must remain open
following material changes in the terms of the offer or the information
concerning the offer, other than a change in price or a change in percentage of
securities sought, will depend upon the facts and circumstances, including the
relative materiality of the terms or information changes. With respect to a
change in price or a change in percentage of securities sought, a minimum ten
business day period is generally required to allow for adequate dissemination to
stockholders and investor response.
The Company has provided the Offeror with the Company's list of
stockholders and security position listings for the purpose of disseminating the
Offer to holders of Shares. This Offer to Purchase and the Letter of Transmittal
will be mailed to record holders of the Shares and will be furnished to brokers,
dealers, commercial banks, trust companies and similar persons whose names, or
the names of whose nominees, appear on the list of stockholders or, if
applicable, who are listed as participants in a clearing agency's security
position listing for subsequent transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Offeror will accept for payment and will pay for all Shares
validly tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 4 promptly after the later to occur of (a) the
Expiration Date and (b) subject to compliance with Rule 14e-1(c) under the
Exchange Act, the satisfaction or waiver of the conditions set forth in Section
15. Subject to compliance with Rule 14e-1(c) promulgated under the Exchange Act,
the Offeror expressly reserves the right to delay payment for Shares in order to
comply in whole or in part with any applicable law. See Sections 1 and 16. In
all cases, payment for Shares accepted for payment pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) certificates for such
Shares or timely confirmation (a "Book-Entry Confirmation") of a book-entry
transfer of such Shares into the Depositary's account at The Depository Trust
Company, the Midwest Securities Trust Company or the Philadelphia Depository
Trust Company (collectively, the "Book-Entry Transfer Facilities"), pursuant to
the procedures set forth in Section 3, (ii) a properly completed and duly
executed Letter of Transmittal (or a manually signed facsimile thereof) with all
required signature guarantees or, in the case of a book-entry transfer, an
Agent's Message (as defined below) and (iii) any other documents required by the
Letter of Transmittal.
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Offeror may enforce such agreement against the participant.
For purposes of the Offer, the Offeror will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as, if
and when the Offeror gives oral or written notice to the Depositary of the
Offeror's acceptance of such Shares for payment. In all cases, payment for
Shares purchased pursuant to the Offer will be made by deposit of the purchase
price with the Depositary, which will act as agent for tendering stockholders
for the purpose of receiving payment from the Offeror and transmitting such
payment to tendering stockholders. If, for any reason whatsoever, acceptance for
payment of any Shares tendered pursuant to the Offer is delayed, or the Offeror
is unable to accept for payment Shares tendered pursuant to the Offer, then,
without prejudice to the Offeror's rights under Section 1, the Depositary may,
nevertheless, on behalf of the Offeror, retain tendered Shares, and such Shares
may not be withdrawn except to the extent that the tendering stockholders are
entitled to withdrawal rights as described in Section 4 below
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and as otherwise required by Rule 14e-1(c) under the Exchange Act. Under no
circumstances will interest be paid by the Offeror because of any delay in
making such payment.
If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason, or if certificates are submitted for
more Shares than are tendered, certificates for such unpurchased or untendered
Shares will be returned, without expense to the tendering stockholder (or, in
the case of Shares delivered by book-entry transfer to a Book-Entry Transfer
Facility, such Shares will be credited to an account maintained within such
Book-Entry Transfer Facility), as promptly as practicable after the expiration,
termination or withdrawal of the Offer.
If, prior to the Expiration Date, the Offeror increases the price being
paid for Shares accepted for payment pursuant to the Offer, such increased
consideration will be paid to all stockholders whose Shares are purchased
pursuant to the Offer.
3. PROCEDURE FOR TENDERING SHARES.
Valid Tenders. For Shares to be validly tendered pursuant to the Offer, a
properly completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof), with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message, and any other required documents, must
be received by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase prior to the Expiration Date, or the tendering
stockholder must comply with the guaranteed delivery procedures set forth below.
In addition, either (i) certificates representing such Shares must be received
by the Depositary or such Shares must be tendered pursuant to the procedure for
book-entry transfer set forth below, and a Book-Entry Confirmation must be
received by the Depositary, in each case prior to the Expiration Date, or (ii)
the guaranteed delivery procedures must be complied with as set forth below. No
alternative, conditional or contingent tenders will be accepted. DELIVERY OF
DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY
TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Book-Entry Transfer. The Depositary will make a request to establish an
account with respect to the Shares at each Book-Entry Transfer Facility for
purposes of the Offer within two business days after the date of this Offer to
Purchase. Any financial institution that is a participant in a Book-Entry
Transfer Facility's system may make book-entry delivery of Shares by causing a
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at a Book-Entry Transfer Facility in accordance with such Book-Entry
Transfer Facility's procedures for transfer. Although delivery of Shares may be
effected through book-entry at a Book-Entry Transfer Facility prior to the
Expiration Date, (i) the Letter of Transmittal (or a manually signed facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or an Agent's Message in connection with a book-entry transfer, and
any other required documents, must, in any case, be transmitted to and received
by the Depositary at one of its addresses set forth on the back cover of this
Offer to Purchase or (ii) the guaranteed delivery procedures must be complied
with as set forth below.
Signature Guarantee. Signatures on the Letter of Transmittal must be
guaranteed by a member in good standing of the Securities Transfer Agents
Medallion Program, or by any other bank, broker, dealer, credit union, savings
association or other entity which is an "eligible guarantor institution," as
such term is defined in Rule 17Ad-15 under the Exchange Act (each of the
foregoing being referred to as an "Eligible Institution" and, collectively, as
"Eligible Institutions"), unless the Shares tendered thereby are tendered (i) by
a registered holder of Shares who has not completed either the box labeled
"Special Delivery Instructions" or the box labeled "Special Payment
Instructions" on the Letter of Transmittal or (ii) for the account of any
Eligible Institution. If the certificates evidencing Shares are registered in
the name of a person or persons other than the signer of the Letter of
Transmittal, or if payment is to be made, or delivered to, or certificates for
unpurchased Shares are to be issued or returned to, a person other than the
registered owner or owners, then the tendered certificates must be endorsed or
accompanied by duly executed stock powers, in either case signed exactly as the
name or names of the registered owner or owners appear on the certificates, with
the signatures on the certificates or stock powers guaranteed by an Eligible
Institution as provided in the Letter of Transmittal. See Instructions 1 and 5
to the Letter of Transmittal.
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Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or time will not permit all required documents to reach the Depositary
prior to the Expiration Date or the procedure for book-entry transfer cannot be
completed on a timely basis, such Shares may nevertheless be tendered if all of
the following guaranteed delivery procedures are duly satisfied:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Offeror herewith, is
received by the Depositary, as provided below, prior to the Expiration
Date; and
(iii) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation), together with a properly completed
and duly executed Letter of Transmittal (or a manually signed facsimile
thereof), and any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message, and any other documents required
by the Letter of Transmittal, are received by the Depositary within three
American Stock Exchange ("AMEX") trading days after the date of such Notice
of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, telex, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in the
Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY,
IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for such Shares or a Book-Entry
Confirmation, (ii) a properly completed and duly executed Letter of Transmittal
(or a manually signed facsimile thereof), with all required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message, and
(iii) any other documents required by the Letter of Transmittal.
BACKUP FEDERAL INCOME TAX WITHHOLDING. UNDER THE FEDERAL INCOME TAX LAWS
THE DEPOSITARY MAY, UNDER CERTAIN CIRCUMSTANCES, BE REQUIRED TO WITHHOLD 31% OF
THE AMOUNT OF ANY PAYMENTS MADE TO CERTAIN STOCKHOLDERS PURSUANT TO THE OFFER.
TO PREVENT BACKUP WITHHOLDING WITH RESPECT TO PAYMENT TO ANY STOCKHOLDER, EACH
STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH HIS CORRECT TAXPAYER IDENTIFICATION
NUMBER ("TIN") AND CERTIFY THAT HE IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX
WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF
TRANSMITTAL. SEE INSTRUCTION 9 SET FORTH IN THE LETTER OF TRANSMITTAL.
Determination of Validity. All questions as to the validity, eligibility
(including time of receipt) and acceptance for payment of any tender of Shares
will be determined by the Offeror, in its sole discretion, and its determination
will be final and binding on all parties. The Offeror reserves the absolute
right to reject any or all tenders of any Shares that are determined by it not
to be in proper form or the acceptance of or payment for which may, in the
opinion of the Offeror, be unlawful. The Offeror also reserves the absolute
right to waive any of the conditions of the Offer, subject to the limitations
set forth in the Merger Agreement, or any defect or irregularity in the tender
of any Shares. The Offeror's interpretation of the terms and conditions of the
Offer (including the Letter of Transmittal and the Instructions to the Letter of
Transmittal) will be final and binding on all parties. No tender of Shares will
be deemed to have been validly made until all defects and irregularities have
been cured or waived. None of the Offeror, the Parent, the Dealer Manager, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification.
Appointment as Proxy. By executing the Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of the Offeror as
such stockholder's proxies, each with full power of substitution, in the manner
set forth in the Letter of Transmittal, to the full extent of such stockholder's
right with respect to the Shares tendered by such stockholder and accepted for
payment by the Offeror (and any
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and all other Shares or other securities or rights issued or issuable in respect
of such Shares on or after September 26, 1995). All such proxies shall be
considered coupled with an interest in the tendered Shares. This appointment is
effective when, and only to the extent that, the Offeror accepts for payment the
Shares deposited with the Depositary. Upon acceptance for payment all prior
proxies given by the stockholder with respect to such Shares or other securities
or rights will, without further action, be revoked and no subsequent proxies may
be given or written consents executed (and, if given or executed, will not be
deemed effective). The designees of the Offeror will, with respect to the Shares
and other securities or rights, be empowered to exercise all voting and other
rights of such stockholder as they in their sole judgment deem proper in respect
of any annual or special meeting of the Company's stockholders, or any
adjournment or postponement thereof. The Offeror reserves the right to require
that, in order for Shares to be deemed validly tendered, immediately upon the
Offeror's payment for such Shares, the Offeror must be able to exercise full
voting and other rights with respect to such Shares and the other securities or
rights issued or issuable in respect of such Shares, including voting at any
meeting of stockholders (whether annual or special or whether or not adjourned)
in respect of such Shares.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares made
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date and, unless theretofore
accepted for payment pursuant to the Offer, may also be withdrawn at any time
after Friday, November 17, 1995. If purchase of or payment for Shares is delayed
for any reason or if the Offeror is unable to purchase or pay for Shares for any
reason, then, without prejudice to the Offeror's rights under the Offer,
tendered Shares may be retained by the Depositary on behalf of the Offeror and
may not be withdrawn except to the extent that tendering stockholders are
entitled to withdrawal rights as set forth in this Section 4, subject to Rule
14e-1(c) under the Exchange Act, which provides that no person who makes a
tender offer shall fail to pay the consideration offered or return the
securities deposited by or on behalf of security holders promptly after the
termination or withdrawal of the Offer.
For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase. Any notice of withdrawal must specify the name of the person who
tendered the Shares to be withdrawn, the number of Shares to be withdrawn and
the name in which the certificates representing such Shares are registered, if
different from that of the person who tendered the Shares. If certificates for
Shares to be withdrawn have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of such certificates, the serial
numbers shown on such certificates must be submitted to the Depositary and,
unless such Shares have been tendered by an Eligible Institution, the signatures
on the notice of withdrawal must be guaranteed by an Eligible Institution. If
Shares have been tendered pursuant to the procedure for book-entry transfer set
forth in Section 3, any notice of withdrawal must also specify the name and
number of the account at the applicable Book-Entry Transfer Facility to be
credited with the withdrawn Shares. All questions as to the form and validity
(including time of receipt) of notices of withdrawal will be determined by the
Offeror, in its sole discretion, and its determination will be final and binding
on all parties. None of the Offeror, the Parent, the Dealer Manager, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in any notice of withdrawal
or incur any liability for failure to give any such notification.
Any Shares properly withdrawn will be deemed not validly tendered for
purposes of the Offer, but may be retendered at any subsequent time prior to the
Expiration Date by following any of the procedures described in Section 3.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following is a summary of the principal federal income tax consequences
of the Offer and the Merger to holders whose Shares are purchased pursuant to
the Offer or whose Shares are converted to cash in the Merger (including
pursuant to the exercise of appraisal rights). The discussion applies only to
holders of Shares in whose hands Shares are capital assets, and may not apply to
Shares received pursuant to the exercise
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of employee stock options or otherwise as compensation, or to holders of Shares
who are in special tax situations (such as insurance companies, tax-exempt
organizations or non-U.S. persons).
THE FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW ARE INCLUDED FOR
GENERAL INFORMATIONAL PURPOSES ONLY AND ARE BASED UPON CURRENT LAW. BECAUSE
INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH HOLDER OF SHARES SHOULD CONSULT SUCH
HOLDER'S OWN TAX ADVISOR TO DETERMINE THE APPLICABILITY OF THE RULES DISCUSSED
BELOW TO SUCH STOCKHOLDER AND THE PARTICULAR TAX EFFECTS OF THE OFFER AND THE
MERGER, INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL AND OTHER INCOME
TAX LAWS.
The receipt of cash for Shares pursuant to the Offer or the Merger
(including pursuant to the exercise of appraisal rights) will be a taxable
transaction for federal income tax purposes (and also may be a taxable
transaction under applicable state, local and other income tax laws). In
general, for federal income tax purposes, a holder of Shares will recognize gain
or loss equal to the difference between his adjusted tax basis in the Shares
sold pursuant to the Offer or converted to cash in the Merger and the amount of
cash received therefor. Gain or loss must be determined separately for each
block of Shares (i.e., Shares acquired at the same cost in a single transaction)
sold pursuant to the Offer or converted to cash in the Merger. Such gain or loss
will be capital gain or loss (other than, with respect to the exercise of
appraisal rights, amounts, if any, which are or are deemed to be interest for
federal income tax purposes, which amounts will be taxed as ordinary income) and
will be long-term gain or loss if, on the date of sale (or, if applicable, the
date of the Merger), the Shares were held for more than one year.
Payments in connection with the Offer or the Merger may be subject to
"backup withholding" at a rate of 31%. Backup withholding generally applies if
the stockholder (a) fails to furnish his social security number or Taxpayer
Identification Number ("TIN"), (b) furnishes an incorrect TIN, (c) fails to
properly include a reportable interest or dividend payment on his federal income
tax return, or (d) under certain circumstances, fails to provide a certified
statement, signed under penalties of perjury, that the TIN provided is his
correct number and that he is not subject to backup withholding. Backup
withholding is not an additional tax but merely an advance payment, which may be
refunded to the extent it results in an overpayment of tax. Certain persons
generally are entitled to exemption from backup withholding, including
corporations and financial institutions. Certain penalties apply for failure to
furnish correct information and for failure to include reportable payments in
income. Each stockholder should consult with his own tax advisor as to his
qualification for exemption from backup withholding and the procedure for
obtaining such exemption. Tendering stockholders may be able to prevent backup
withholding by completing the Substitute Form W-9 included in the Letter of
Transmittal. See Section 3.
6. PRICE RANGE OF SHARES; DIVIDENDS.
The Shares are principally traded on the AMEX under the symbol GIB. The
following table sets forth for the periods indicated the high and low sales
prices as reported on the AMEX and cash dividends per Share.
LOW HIGH DIVIDEND
---- ----- --------
1993
First Quarter.................................................... $6 1/8 $7 3/8 $ .035
Second Quarter................................................... 6 7 1/4 .035
Third Quarter.................................................... 6 1/8 7 .035
Fourth Quarter................................................... 6 7/8 9 .040
1994
First Quarter.................................................... 7 1/8 8 7/8 .040
Second Quarter................................................... 6 3/4 8 1/8 .040
Third Quarter.................................................... 6 7/8 7 7/8 .040
Fourth Quarter................................................... 6 5/8 7 7/8 .040
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LOW HIGH DIVIDEND
---- ----- --------
1995
First Quarter.................................................... 5 1/4 6 7/8 .040
Second Quarter................................................... 5 5/8 71 5/16 .040
Third Quarter (through September 18, 1995)....................... 7 5/8 91 1/16 .040
On May 24, 1995, the last full day of trading prior to the public
announcement by the Company that it had engaged Goldman, Sachs & Co. ("Goldman
Sachs") to assist in evaluating its strategic alternatives, the closing price
per Share as reported on the AMEX Composite Tape was $6 1/4. On September 13,
1995, the last full day of trading prior to the public announcement of the
execution of the Merger Agreement, the closing price per Share as reported on
the AMEX Composite Tape was $8 3/4. On September 18, 1995, the last full day of
trading prior to the commencement of the Offer, the closing price per Share as
reported on the AMEX Composite Tape was $8 7/8.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
The Company has paid cash dividends without interruption since 1940. Under
the terms of long-term loan agreements, future dividends which the Company may
declare are restricted to $1,500,000 plus 50% of net income as defined therein.
Future dividends depend on many factors, including internal estimates of future
performance and the Company's need for funds.
On September 11, 1995, the Company declared a quarterly dividend of $0.04
per Share, payable on October 5, 1995, to stockholders of record on September
25, 1995. Tendering Shares pursuant to the Offer will not affect the right of
stockholders of record on September 25, 1995 to receive this dividend. Under the
terms of the Merger Agreement, the Company is prohibited from paying any further
dividends, other than regular quarterly cash dividends in an amount not to
exceed $0.04 per share in accordance with past practices. See Section 13.
7. EFFECT OF THE OFFER ON AMEX LISTING, MARKET FOR SHARES AND REGISTRATION UNDER
THE EXCHANGE ACT.
The purchase of the Shares by the Offeror pursuant to the Offer will reduce
the number of Shares that might otherwise trade publicly and will reduce the
number of holders of Shares which could adversely affect the liquidity and
market value of the remaining Shares held by stockholders other than the
Offeror. The Company has advised the Offeror that, as of September 15, 1995,
there were approximately 678 stockholders of record and approximately 2,300
beneficial owners of the Shares.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the standards for continued listing on the AMEX. If
trading volume were lower than such standards, quotations might continue to be
published in the "additional list" or in one of the "local lists," or such
quotations might not be published at all. If the number of holders of Shares
falls below 300, the AMEX might cease to provide quotations but quotations might
still be available from other sources. The Offeror cannot predict whether the
AMEX trading volume standards for publication will be met after the Offer.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application by the Company to the Commission
if there are fewer than 300 record holders of Shares. It is the intention of the
Offeror to seek to cause an application for such termination to be made as soon
after consummation of the Offer as the requirements for termination of
registration of the Shares are met. If such registration were terminated, the
Company would no longer legally be required to disclose publicly in proxy
materials distributed to stockholders the information which it now must provide
under the Exchange Act or to make public disclosure of financial and other
information in annual, quarterly and other reports required to be filed with the
Commission under the Exchange Act; and the officers, directors and 10%
stockholders of the Company would no longer be subject to the "short-swing"
insider trading reporting and profit recovery provisions of the Exchange Act.
Furthermore, if such registration were terminated, persons holding "restricted
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securities" of the Company may be deprived of their ability to dispose of such
securities under Rule 144 promulgated under the Securities Act of 1933, as
amended.
The Shares are currently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board"),
which has the effect, among other things, of allowing brokers to extend credit
on the collateral of the Shares. Depending upon factors similar to those
described above regarding listing and market quotations, it is possible that,
following the purchase of Shares pursuant to the Offer, the Shares would no
longer constitute "margin securities" for the purposes of the margin regulations
of the Federal Reserve Board and therefore could no longer be used as collateral
for loans made by brokers. If registration of Shares under the Exchange Act were
terminated, the Shares would no longer be "margin securities".
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
The Company is a Delaware corporation with its principal executive offices
located at 32 Knight Street, Norwalk, Connecticut 06856. Except as otherwise set
forth herein, the information concerning the Company contained in this Offer to
Purchase, including financial information, has been furnished by the Company or
has been taken from or based upon publicly available documents and records on
file with the Commission and other public sources. Although neither the Offeror
nor the Parent has any knowledge that would indicate that statements contained
herein based upon such documents are untrue, neither the Offeror nor the Parent
assumes any responsibility for the accuracy or completeness of the information
concerning the Company, furnished by the Company, or contained in such documents
and records or for any failure by the Company to disclose events which may have
occurred or may affect the significance or accuracy of any such information but
which are unknown to the Offeror and the Parent.
The Company and its subsidiaries are engaged in the business of printing
and publishing memory and record books, photograph albums, guest books and
scrapbooks, gift books, consisting generally of adult inspirational books,
church publications and other church products, gift wrap, invitations, greeting
cards, paper tableware, personalized stationery and social stationery.
Set forth below is certain selected consolidated financial data with
respect to the Company excerpted or derived from financial information contained
in the Company's Annual Report on Form 10-K for the year ended December 31,
1994, and the Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1995. More comprehensive financial information is included in such reports
and other documents filed by the Company with the Commission, and the following
selected financial data is qualified in its entirety by reference to such
reports and such other documents and all the financial information (including
any related notes) contained therein. Such reports and other documents should be
available for inspection and copies thereof should be obtainable in the manner
set forth below.
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THE C.R. GIBSON COMPANY
SELECTED FINANCIAL DATA(1)
AS OF AND FOR THE
AS OF AND FOR THE SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
--------------------------- -----------------
1994 1993 1992 1995 1994
------- ------- ------- ------- -------
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Net sales........................................ $67,331 $63,585 $63,396 $35,565 $33,076
======= ======= ======= ======= =======
Net income from continuing operations............ $ 3,204 $ 3,459 $ 3,374 $ 1,859 $ 1,728
Net income (loss) from discontinued operations... (3,586) 165 0 (1,749) (1,260)
------- ------- ------- ------- -------
Net income (loss)................................ $ (382) $ 3,624 $ 3,374 $ 110 $ 468
======= ======= ======= ======= =======
Net income (loss) per common share from:
Continuing operations.......................... $ 0.43 $ 0.46 $ 0.44 $ 0.26 $ 0.23
Discontinued operations........................ (0.48) 0.02 0.00 (0.24) (0.17)
------- ------- ------- ------- -------
Net income (loss) per common share............... $ (0.05) $ 0.48 $ 0.44 $ 0.02 $ 0.06
======= ======= ======= ======= =======
Dividend per share............................... $ 0.16 $ 0.15 $ 0.14 $ 0.08 $ 0.08
Working capital.................................. $24,430 $23,601 $23,350 $23,617 $29,998
Total assets..................................... $59,083 $53,151 $45,882 $55,541 $59,422
Long-term obligations............................ $13,105 $ 8,582 $ 9,042 $13,018 $13,294
Stockholders' equity............................. $30,723 $32,955 $30,787 $29,612 $33,429
Weighted average common shares outstanding....... 7,455 7,538 7,617 7,289 7,472
---------------
(1) Restated to reflect the results of the Company's Rytex subsidiary as a
discontinued operation.
The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files periodic reports, proxy statements and
other information with the Commission relating to its business, financial
condition and other matters. The Company is required to disclose in such proxy
statements certain information, as of particular dates, concerning the Company's
directors and officers, their remuneration, stock options granted to them, the
principal holders of the Company's securities and any material interests of such
persons in transactions with the Company. Such reports, proxy statements and
other information may be inspected at the public reference facilities maintained
by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the regional offices of the Commission located at Seven World Trade
Center, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West
Madison Street (Suite 1400), Chicago, Illinois 60661. Such material should also
be available for inspection at the offices of the AMEX, 86 Trinity Place, New
York, New York 10006.
9. CERTAIN INFORMATION CONCERNING THE PARENT AND THE OFFEROR.
The Offeror is a newly incorporated Delaware corporation and a wholly owned
subsidiary of the Parent, which is a Tennessee corporation. To date, the Offeror
has not conducted any business other than that incident to its formation, the
execution and delivery of the Merger Agreement and the commencement of the
Offer. Accordingly, no meaningful financial information with respect to the
Offeror is available.
The principal executive offices of the Offeror and the Parent are located
at Nelson Place at Elm Hill Pike, P.O. Box 141000, Nashville, Tennessee
37214-1000. The Parent is a leading publisher, producer and distributor of books
and recorded music emphasizing Christian, inspirational and family value themes,
and believes it is the largest commercial publisher of the Bible in English
language translations. The Parent also designs and markets a broad line of gift
and stationery products.
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Set forth below is certain summary consolidated financial data with respect
to the Parent excerpted or derived from financial information contained in the
Parent's Annual Report on Form 10-K for the year ended March 31, 1995, and the
Parent's Quarterly Report on Form 10-Q for the quarter ended June 30, 1995. More
comprehensive financial information is included in such reports and other
documents filed by the Parent with the Commission, and the following summary is
qualified in its entirety by reference to such reports and such other documents
and all the financial information (including any related notes) contained
therein.
THOMAS NELSON, INC.
SUMMARY FINANCIAL DATA
THREE MONTHS ENDED
YEAR ENDED MARCH 31, JUNE 30,
---------------------------------- ---------------------
1995 1994 1993(1) 1995 1994
-------- -------- -------- -------- --------
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
STATEMENT OF INCOME DATA:
Net revenues........................ $265,107 $226,434 $143,072 $ 61,106 $ 49,103
Gross profit........................ 131,457 111,233 68,097 32,083 23,829
Operating income.................... 26,037 19,968 12,186 2,042 1,007
Interest expense.................... 8,585 6,903 3,027 2,561 1,917
-------- -------- -------- -------- --------
Income (loss) before income taxes... 18,349 13,292 9,337 (568) (864)
-------- -------- -------- -------- --------
Net income (loss)................... $ 11,710 $ 9,081 $ 6,282 $ (358) $ (544)
Net income (loss) per share......... $ 0.88 $ 0.68 $ 0.47 $ (0.03) $ (0.04)
Weighted average number of shares
outstanding....................... 13,374 13,355 13,268 13,567 13,364
Fully diluted net income (loss) per
share(2).......................... $ 0.83 $ 0.67 $ 0.47 $ (0.03) $ (0.04)
JUNE 30, 1995 MARCH 31, 1995
-------------- --------------
(UNAUDITED)
BALANCE SHEET DATA:
Working capital................................................... $145,899 $129,441
Total assets...................................................... 260,929 249,869
Long-term debt (including current portion)........................ 139,169 121,000
Shareholders' equity.............................................. 71,821 72,729
---------------
(1) Includes the operations of Word, Incorporated subsequent to its acquisition
by the Parent on November 30, 1992.
(2) Reflects the impact of the conversion of the Parent's outstanding 5 3/4%
Convertible Subordinated Notes due 1999 into 3,235,294 shares of Common
Stock and exercise of stock options, in periods in which such conversion or
exercise would be dilutive.
The Parent is subject to the informational requirements of the Exchange Act
and in accordance therewith files periodic reports and other information with
the Commission relating to its business, financial condition and other matters.
Such reports and other information are available for inspection and copying at
the offices of the Commission in the same manner as set forth with respect to
the Company in Section 8. Such material should also be available for inspection
at the offices of the New York Stock Exchange ("NYSE"), 20 Broad Street, New
York, New York, 10005.
Except as described in this Offer to Purchase, none of the Offeror, the
Parent, nor, to the best knowledge of the Offeror and the Parent, any of the
persons listed in Schedule I to this Offer to Purchase owns or has any right to
acquire any Shares and none of them has effected any transaction in the Shares
during the past 60 days.
Except as provided in the Merger Agreement and the Option Agreements, and
as otherwise described in this Offer to Purchase, none of the Offeror, Parent
nor, to the best knowledge of the Offeror and Parent, any of
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the persons listed in Schedule I to this Offer to Purchase, has any contract,
arrangement, understanding or relationship with any other person with respect to
any securities of the Company, including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or voting of
such securities, joint ventures, loan or option arrangements, puts or calls,
guaranties of loans, guaranties against loss or the giving or withholding of
proxies. Except as set forth in this Offer to Purchase, neither the Offeror nor
Parent nor, to the best knowledge of the Offeror and Parent, any of the persons
listed on Schedule I hereto, has had any business relationship or transaction
with the Company or any of its executive officers, directors or affiliates that
is required to be reported under the rules and regulations of the Commission
applicable to the Offer. Except as set forth in this Offer to Purchase, there
have been no contracts, negotiations or transactions between any of the Offeror,
Parent, or any of their respective subsidiaries, or, to the best knowledge of
the Offeror and Parent, any of the persons listed in Schedule I to this Offer to
Purchase, on the one hand, and the Company or its affiliates, on the other hand,
concerning a merger, consolidation or acquisition, tender offer or other
acquisition of securities, an election of directors or a sale or other transfer
of a material amount of assets.
10. SOURCE AND AMOUNT OF FUNDS.
If all Shares (including Shares covered by options which have exercise
prices of less than $9.00) outstanding at September 14, 1995 are validly
tendered and purchased by the Offeror, the aggregate purchase price and all
estimated fees and expenses (including the cash out of stock options and
estimated expenses of the Company) will be approximately $71.0 million. The
Offeror will obtain all such funds from the Parent, which will obtain these
funds through bank borrowings and available working capital.
The Parent plans to obtain a substantial portion of the funds needed for
the Offer and related transactions through unsecured borrowings under its
existing credit facilities (individually, a "Credit Facility" and together, the
"Credit Facilities") from a syndicate of financial institutions led by Third
National Bank in Nashville ("Third National Bank"). The Credit Facilities
consist of a $100 million credit facility and a $5 million credit facility.
Borrowings under the Credit Facilities bear interest at either the prime rate
or, at the Parent's option, the relevant London Interbank Offered Rate ("LIBOR")
plus 1.5% (7.31% at September 18, 1995). The balance outstanding under the $100
million Credit Facility at May 31, 1997 will be converted into a four year term
loan payable in equal quarterly principal installments thereafter. At September
18, 1995, the Company had $38.5 million outstanding, and $61.5 million available
for borrowing under the Credit Facility. The Company also has obtained a
commitment for interim financing from Third National Bank in the amount of up to
$60 million to be used for the acquisition of Shares pursuant to the Offer (the
"Interim Financing"). All principal and interest for the Interim Financing is
due and payable on December 31, 1995. The Interim Financing is, in all other
respects, on substantially the same terms and conditions as the Credit
Facilities. The commitment for Interim Financing is subject only to the
negotiation, execution and delivery of definitive documentation.
The foregoing description of the Credit Facilities and the Interim
Financing is qualified in its entirety by reference to the text of the Credit
Facilities and the Interim Financing Commitment filed as exhibits to the Tender
Offer Statement on Schedule 14D-1 of the Offeror and the Parent (the "Schedule
14D-1") filed with the Commission in connection with the Offer and is
incorporated herein by reference.
Following consummation of the Offer and the Merger, the Parent intends to
evaluate its business and operational needs and the adequacy of its existing
credit facilities, and will take such actions as it deems appropriate under the
circumstances then existing. It is anticipated that borrowings under the Credit
Facilities and the Interim Financing will be repaid from funds generated
internally by the Parent and its subsidiaries (including the Company) and from
other sources.
THE OFFER IS NOT SUBJECT TO A FINANCING CONDITION.
11. BACKGROUND OF THE OFFER; PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH
THE COMPANY.
The Parent's business strategy seeks to capitalize on the growing demand
for products that convey traditional, Christian and family value themes by
expanding its core publishing, music and gift product lines.
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To implement this growth strategy, Parent periodically reviews strategic
acquisitions of complementary product lines that utilize common distribution
channels. In particular, the Parent has a strong commitment to build its gifts
products division and the Company, as a leader in this industry, was a natural
candidate as a strategic alliance partner for the Parent.
From late 1992 through late 1993, senior management of the Company
periodically held informal communications with certain stockholders of the
Company, including representatives of Bradford Ventures Ltd., regarding the
business of the Company and such investors' belief that a strategic alliance
between the Parent and the Company would benefit each of the companies and their
respective stockholders.
As a result of these communications and a review of publicly available
information concerning the Company, the Parent engaged PaineWebber, Incorporated
("PaineWebber") in January 1994 as its financial advisor to assist the Parent in
evaluating its options with respect to a potential acquisition of the Company.
On January 17, 1994, Sam Moore, the President and Chairman of the Board of the
Parent, sent a letter to Robert G. Bowman, Chairman of the Board of the Company,
outlining the terms of a proposed combination of the Company and the Parent
whereby the Company's stockholders would receive shares of the Parent's Common
Stock valued at $12.00 (based on the market value of the Parent's Common Stock
at that time) in exchange for all outstanding Shares. The Parent stated that the
proposed combination should be a tax-free transaction to be accounted for as a
pooling of interests. Certain other terms and conditions which would have been
required in any definitive agreement were not identified and the proposal was
subject to due diligence review on the part of the Company as well as the
Parent. On February 2, 1994, the Parent was advised in a letter from Mr. Bowman
that the Company's Board of Directors had considered the Parent's January 17,
1994 letter with the assistance of its legal and financial advisors, and had
unanimously decided that pursuing the Parent's proposal was not in the best
interests of the Company or its stockholders at that time. Subsequent thereto,
the Parent's Board of Directors determined not to pursue its proposal.
On May 24, 1995, the Company announced the engagement of Goldman Sachs to
act as its financial advisor in connection with a review of strategic
alternatives available to the Company. On June 19, 1995, the Parent and the
Company entered into a confidentiality agreement, pursuant to which, in
consideration of the Parent's consideration of a possible transaction with the
Company, the Company agreed to furnish information to the Parent for the purpose
of enabling the Parent to conduct a due diligence review of the business of the
Company. In July 1995, representatives of the Parent contacted Goldman Sachs to
indicate a preliminary interest in continuing discussions with the Company. The
Parent is advised that the Board of Directors of the Company at a meeting held
on July 14, 1995 authorized continued discussions with certain of the companies,
including the Parent, which had indicated preliminary interest in continuing
discussions with the Company. In late July 1995, certain members of Parent's
management were permitted to review various documents and data at the Company's
headquarters in Norwalk, Connecticut and to ask questions of the Company's
management concerning the Company's business and operations.
On August 21, 1995, Goldman Sachs delivered, on behalf of the Company, a
letter and a proposed draft of a merger agreement to various potential
acquirors, including the Parent, pursuant to which such entities were requested
to submit proposals with respect to the potential acquisition of the Company and
comments to the draft merger agreement. The letter required all proposals to be
submitted in writing not later than 12:00 p.m., New York time, on September 6,
1995 and described further conditions upon which proposals would be considered.
On September 6, 1995, the Parent transmitted comments to the draft merger
agreement, together with a letter proposing that the Parent would acquire the
Company through a two-step combination of the Parent and the Offeror, consisting
of a cash tender offer for all the outstanding Shares at a price of $9.00 per
Share and a subsequent merger of the Offeror with and into the Company. Included
in such proposal was a requirement that the Parent receive "lock up options in
customary form" from each of Bradford Venture Partners, Robert G. Bowman, John
G. Russell and Peter B. Cannell & Co.
The Parent is advised that on September 7, 1995, the Board of Directors of
the Company convened to consider the various proposals submitted to acquire the
Company. Following such meeting, the Company's financial advisors contacted the
financial advisors for the Parent to discuss certain terms of the Parent's
proposal. Based on these communications and assuming the acceptance by the
Company of all changes
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requested by the Parent to the proposed merger agreement, the Parent agreed to
increase the price to be offered by the Parent in the Offer to $9.50 per Share.
Following a meeting of the Company's Board of Directors on September 8, 1995,
subsequent negotiations occurred relating to a variety of significant terms of
the proposed merger agreement, including the representations and warranties
requested of the Company therein, the termination fee, the covenant of the
Company relating to alternative Acquisition Proposals and issues relating to
employment benefits, which resulted in a variety of changes to the proposed
merger agreement. Based on the Company's inability to give a representation and
warranty relating to intellectual properties in the form requested by the
Parent, the Parent indicated that it would be unable to proceed with a
transaction without additional due diligence. At the conclusion of such due
diligence, senior management of the Parent telephoned senior management of the
Company on September 12, 1994 to express the Parent's reluctance to proceed with
the Offer at a per Share price of $9.50. During that conversation, the Parent
agreed to proceed with the Offer at $9.00 per Share in cash.
On September 12, 1995, the Executive Committee of the Board of Directors of
the Parent was presented with substantially final terms of the proposed
acquisition. After reviewing presentations from the Parent's senior management
and legal counsel, and after receiving PaineWebber's opinion that the terms of
the proposed acquisition were fair to the Parent and its shareholders from a
financial point of view, the Executive Committee unanimously authorized
management to enter into definitive documentation relating to the proposed
acquisition of the Company through a cash tender offer, followed by a
second-step merger, to acquire all of the outstanding Shares at $9.00 per Share.
The Parent is advised that on September 13, 1995, the Company's Board of
Directors held a meeting to review the terms and conditions of the proposed
transaction and the Merger Agreement in its final form and to discuss the
proposed transaction and the Merger Agreement with the Company's legal and
financial advisors. At that meeting, the Company's Board of Directors
unanimously approved the Merger Agreement.
After the Company's meeting was concluded, the Merger Agreement was
executed by each of the Company, the Parent and the Offeror, and the Option
Agreements were executed by the Parent, the Offeror and the Selling
Stockholders.
At 9:00 a.m., New York time, on September 14, 1995, the Company and the
Parent issued a joint press release announcing the Offer and execution of the
Merger Agreement.
12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY.
The purpose of the Offer, the Merger, the Merger Agreement and the Option
Agreement is to enable the Parent to acquire control of, and the entire equity
interest in, the Company. Upon consummation of the Merger, the Company will
become a wholly owned subsidiary of the Parent. The Offer is being made pursuant
to the Merger Agreement.
Under the DGCL, the approval of the Board of Directors of the Company and
the affirmative vote of the holders of a majority of the outstanding Shares are
required to approve and adopt the Merger Agreement and the Merger. The Board of
Directors of the Company has approved the Offer, the Merger and the Merger
Agreement and the transactions contemplated therein and, unless the Merger is
consummated pursuant to the short form merger provisions under the DGCL
described below, the only remaining required corporate action of the Company is
the approval and adoption of the Merger Agreement and Merger by the affirmative
vote of the holders of a majority of the Shares. If the Minimum Condition is
satisfied, the Offeror will have sufficient voting power to cause the approval
and adoption of the Merger Agreement and the Merger without the affirmative vote
of any other stockholder.
In the Merger Agreement, the Company has agreed to take all action
necessary to convene a meeting of its stockholders as promptly as practicable
after the consummation of the Offer for the purpose of considering and taking
action on the Merger Agreement and the Merger, if such action is required by the
DGCL. The Parent has agreed that, subject to applicable law, all Shares owned by
the Offeror or any other subsidiary of the Parent will be voted in favor of the
Merger Agreement and the Merger.
Short Form Merger. Under the DGCL, if the Offeror acquires at least 90% of
the outstanding Shares, the Offeror will be able to approve the Merger without a
vote of the Company's stockholders. In such event, the
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Offeror anticipates that it will take all necessary and appropriate action to
cause the Merger to become effective as soon as reasonably practicable after
such acquisition without a meeting of the Company's stockholders. If the
conditions to the Offeror's obligation to purchase Shares in the Offer are
satisfied prior to 90% of the outstanding shares being tendered into the Offer,
the Offeror may, subject to certain limitations set forth in the Merger
Agreement, delay its purchase of the Shares tendered to it in the Offer. See
Section 1. If the Offeror does not acquire at least 90% of the outstanding
Shares pursuant to the Offer or otherwise, a significantly longer period of time
may be required to effect the Merger, because a vote of the Company's
stockholders would be required under the DGCL. Pursuant to the Merger Agreement,
the Company has agreed to take all action necessary under the DGCL and its
Certificate of Incorporation and Bylaws to convene a meeting of its stockholders
promptly following consummation of the Offer to consider and vote on the Merger,
if a stockholders' vote is required. If the Offeror owns a majority of the
outstanding Shares, approval of the Merger can be obtained without the
affirmative vote of any other stockholder of the Company.
Appraisal Rights. Holders of Shares do not have appraisal rights as a
result of the Offer. However, if the Merger is consummated, holders of Shares at
that time will have certain rights under the DGCL to dissent and demand
appraisal of their Shares. Such rights to dissent, if the statutory procedures
are complied with, could lead to a judicial determination of the fair value of
the Shares required to be paid in cash to such dissenting stockholders for their
Shares. In addition, such dissenting stockholders would be entitled to receive
payment in cash of a fair rate of interest from the date of consummation of the
Merger on the amount determined to be the fair value of their Shares. In
determining the fair value of the Shares, a Delaware court would be required to
take into account all relevant factors. Accordingly, such determination could be
based upon considerations other than, or in addition to, the price paid in the
Offer and Merger, the market value of the Shares, asset values and earning
capacity. The costs of appraisal litigation (including fees of counsel and
experts retained by the parties) will be taxed upon the parties, or either of
them, in such manner as appears equitable to the court. Therefore, although the
Company and the Parent believe that a price of $9.00 per Share is fair, the
value so determined in any appraisal proceeding could be different from the
price being paid in the Offer and the Merger. Moreover, the Company and the
Parent may argue in an appraisal proceeding that, for the purpose of such
proceeding, the fair value of the Shares is less than $9.00 per Share.
THE FOREGOING SUMMARY OF RIGHTS OF DISSENTING STOCKHOLDERS DOES NOT PURPORT
TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY HOLDERS OF SHARES
DESIRING TO EXERCISE THEIR DISSENTERS' RIGHTS. THE PRESENTATION AND EXERCISE OF
DISSENTERS' RIGHTS ARE CONDITIONED ON STRICT ADHERENCE TO THE APPLICABLE
PROVISIONS OF THE DGCL.
Rule 13e-3. The Commission has adopted Rule 13e-3 under the Exchange Act
which is applicable to certain "going private" transactions and which may under
certain circumstances be applicable to the Merger or another business
combination following the purchase of Shares pursuant to the Offer or otherwise
in which the Offeror seeks to acquire the remaining Shares not held by it. The
Offeror believes, however, that Rule 13e-3 will not be applicable to the Merger
if the Merger is consummated within one year after the termination of the Offer
at the same per Share price as paid in the Offer. If applicable, Rule 13e-3
requires, among other things, that certain financial information concerning the
Company and certain information relating to the fairness of the proposed
transaction and the consideration offered to minority stockholders in such
transaction, be filed with the Commission and distributed to minority
stockholders prior to consummation of the transaction.
Plans for the Company. Except as otherwise set forth in this Offer to
Purchase, it is expected that, initially following the Merger, the business and
operations of the Company will be continued substantially as they are currently
being conducted.
The Parent will continue to evaluate the business and operations of the
Company during the pendency of the Offer and after the consummation of the Offer
and the Merger, and will take such actions as it deems appropriate under the
circumstances then existing. The Parent intends to seek additional information
about the Company during this period. Thereafter, the Parent intends to review
such information as part of a comprehensive review of the Company's business,
operations, capitalization and management with a view to optimizing exploitation
of the Company's potential in conjunction with the Parent's business.
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13. THE TENDER OFFER AND MERGER AGREEMENT AND THE STOCK OPTION AGREEMENTS.
The following summary of certain provisions of the Merger Agreement and the
Option Agreements, copies of which are filed as exhibits to the Schedule 14D-1,
is qualified in its entirety by reference to the text of the Merger Agreement
and the Option Agreements.
The Merger Agreement
The Offer. The Offeror commenced the Offer in accordance with the terms of
the Merger Agreement. Pursuant to the terms and conditions of the Merger
Agreement, the Parent, the Offeror and the Company are required to use all
reasonable efforts to take all action as may be necessary or appropriate in
order to effectuate the Offer and the Merger as promptly as possible and to
carry out the transactions provided for or contemplated by the Merger Agreement.
Company Actions. Pursuant to the Merger Agreement, the Company has agreed
that on the date of the commencement of the Offer, it will file with the
Commission and mail to its stockholders, a Solicitation/Recommendation Statement
on Schedule 14D-9 containing the recommendation of the Board of Directors that
the Company's stockholders accept the Offer and approve the Merger and the
Merger Agreement.
The Merger. The Merger Agreement provides that, upon the terms and subject
to the conditions of the Merger Agreement, and in accordance with the DGCL, the
Offeror shall be merged with and into the Company at the Effective Time.
Following the Merger, the separate corporate existence of the Offeror shall
cease and the Company shall continue as the Surviving Corporation and shall
succeed to and assume all the rights and obligations of the Offeror in
accordance with the DGCL. The directors of the Offeror immediately prior to the
time of the Merger shall, upon consummation of the Merger be the directors of
the Surviving Corporation, together with such additional directors as may
thereafter be elected. The officers of the Company immediately prior to the time
of the Merger shall, upon consummation of the Merger, be the officers of the
Surviving Corporation together with such additional officers as may thereafter
be elected.
Conversion of Securities. At the Effective Time, each Share issued and
outstanding immediately prior thereto shall be canceled and extinguished and
each Share (other than Shares held by the Company as treasury Shares, Shares
owned by the Offeror or any subsidiary thereof, and Dissenting Shares) shall, by
virtue of the Merger and without any action on the part of the Offeror, the
Company or the holders of the Shares, be converted into and represent the right
to receive the highest price paid per Share pursuant to the Offer. Each share of
common stock of the Offeror issued and outstanding immediately prior to the
Effective Time shall, at the Effective Time, by virtue of the Merger and without
any action on the part of the Offeror, the Company or the holders of Shares, be
converted into and shall thereafter evidence one validly issued and outstanding
share of common stock of the Surviving Corporation.
Dissenting Shares. If required by the DGCL, Shares which are held by
holders who have properly exercised appraisal rights with respect thereto in
accordance with Section 262 of the DGCL will not be exchangeable for the right
to receive the Offer Price, and holders of such Shares will be entitled to
receive payment of the appraised value of such Shares unless such holders fail
to perfect or withdraw or lose their right to appraisal and payment under the
DGCL.
Representations and Warranties. In the Merger Agreement, the Company has
made customary representations and warranties to the Offeror, including, but not
limited to, representations and warranties relating to the Company's
organization and qualification, capitalization, its authority to enter into the
Merger Agreement and carry out the related transactions, filings made by the
Company with the Commission under the Exchange Act (including financial
statements included in the documents filed by the Company under these acts),
required consents and approvals, compliance with applicable laws, assets,
properties, labor relations, employment matters and employee benefit plans,
environmental matters, intellectual property matters, litigation, material
liabilities of the Company and its subsidiaries, the payment of taxes and the
absence of certain material adverse changes or events.
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The Offeror and the Parent have also made customary representations and
warranties to the Company, including, but not limited to, representations and
warranties relating to the Offeror's and the Parent's organization and
qualification, authority to enter into the Merger Agreement, required consents
and approvals, and the availability of sufficient funds to consummate the Offer.
Covenants Relating to the Conduct of Business. The Company has agreed that
prior to consummation of the Offer, unless otherwise approved in writing by the
Parent, it will, and will cause its subsidiaries to, (a) maintain its books,
records and accounts in accordance with generally accepted accounting principles
consistently applied, (b) comply in all material respects with all laws
applicable to the conduct of its business except where the failure so to comply
could not reasonably be expected to have a material adverse effect on the
business, results of operations, properties or financial condition of the
Company on a consolidated basis, (c) conduct its business only in the usual,
regular and customary course and in substantially the same manner as currently
being conducted, (d) duly and timely file required tax returns and related
documents and pay all taxes indicated by such returns to be due or otherwise
lawfully levied or assessed, (e) use reasonable efforts to keep current or
comparable insurance of the types currently maintained in force, (f) make all
payments and contributions to Employee Plans (as defined in the Merger
Agreement) on or before the due date thereof and (g) make all filings required
to be made with the Commission. The Company also agreed, among other things, to
take action to exempt the transactions contemplated by the Merger Agreement and
any business combination between the Company and the Parent from any applicable
state takeover law, to enforce certain confidentiality agreements and, prior to
consummation of the Offer, to modify and change its accrual and reserve policies
and practices so as to be applied consistently on a basis with those of the
Parent.
The Company has agreed that, except as contemplated by the Merger Agreement
or as disclosed by the Company to the Parent prior to the execution of the
Merger Agreement, it shall not and shall not permit any of its subsidiaries to,
without the prior written consent of the Parent:
(a) propose or adopt any change to its certificate of incorporation or
bylaws;
(b) lease, sell, mortgage, subject to lien, pledge, assign, encumber,
swap or otherwise dispose of any of its assets, except (i) in the ordinary
course of business, and (ii) for adequate consideration, or enter into any
transaction that would have the practical effect of an acquisition by any
other person of a material interest in such assets;
(c) redeem, purchase, reclassify, retire or otherwise acquire any
shares of its capital stock, or any securities or obligations convertible
into or exchangeable for any shares of its capital stock;
(d) make any change in the number of the authorized, issued or
outstanding shares of capital stock or other equity security of the Company
(other than pursuant to the exercise of options, rights or similar
securities outstanding as of the date of the Merger Agreement), grant any
option or commitment relating to its capital stock or any security
convertible into such capital stock or any security, the value of which is
measured by such capital stock, or any security subordinated to the claims
of general creditors, or issue, sell or retire any debt obligations except
in the ordinary course of business;
(e) declare, set aside or pay any dividend or other distribution in
respect of any shares of capital stock in liquidation or otherwise
(including, without limitation, any stock dividend or distribution) other
than dividends declared and paid by any of the Company's subsidiaries to
the Company and with respect to the Company, other than regular quarterly
cash dividends in an amount not to exceed $0.04 per share in accordance
with past practices;
(f) incur any material direct or contingent liabilities or commitments
except in the ordinary course of business consistent with past practice;
(g) (i) merge or consolidate with any other corporation or other
entity; (ii) acquire any stock or other equity securities or interest in,
or purchase or otherwise acquire any assets of, any corporation or other
entity (except in the ordinary course of business); or (iii) effect any
reorganization or recapitalization;
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(h) terminate, amend, modify, establish or enter into any employment
or severance contract or any employee benefit plan, program, or arrangement
or fringe benefits; or enter into, commit to enter into, renew or amend any
employee severance agreement other than in the ordinary course of business
consistent with past practice; or grant any material increases in the
compensation or benefits to an officer, director or employee whose
aggregate annual remuneration exceeds $50,000; provided, however, the
Company may hire employees reasonably necessary for the conduct of the
business of the Company and its subsidiaries as employees at will on terms
substantially similar to those of current employees performing comparable
tasks and having comparable responsibilities;
(i) enter into any new lines of business, engage or participate in any
material transaction other than in the ordinary course of business
(including, without limitation, acquiring material real or personal
property), or make any capital expenditures in excess of an aggregate of
$25,000 per month with respect to any project (including repairs, renewals
and replacements) provided that the aggregate expenditures with respect to
any individual project shall not exceed $250,000, except relocations as may
be necessary as a result of fire or other natural disaster and expenditures
from net insurance proceeds received with respect to damage to or the
destruction of any property to repair, renew or replace such property; or
enter into any new, or amend or modify any existing, material contract,
agreement, arrangement or commitment other than in the ordinary course of
business;
(j) other than as may be specifically required or permitted by the
Merger Agreement, authorize or make any material change in the (i) business
or operations, (ii) operational policies, activities or practices, (iii)
accounting policies, standards or practices, except as may be required by
changes in generally accepted accounting principles as concurred in by the
Company's independent auditors;
(k) except in the ordinary course of business, waive or release any
material right or other debt or claim; provided, however, that the Company
may take any such action if, within five business days after the Company
requests in writing that the Parent consent to the taking of such action,
the Parent has approved such request in writing or has not responded in
writing to such request;
(l) amend, modify, terminate or fail to renew or preserve the business
organization, material rights, franchises, permits or licenses of the
Company and its subsidiaries;
(m) for any amount in excess of the sum of (i) $50,000, (ii) the
proceeds of any applicable insurance and (iii) any amounts reserved or
accrued by the Company with respect to any litigation or potential
litigation as of June 30, 1995, settle or otherwise take any action to
release or reduce any rights with respect to any litigation (whether by
counterclaim or otherwise) in which the Company or any of its subsidiaries
is or becomes a defendant; or
(n) enter into any agreement or obligation, the terms of which would
be violated by the consummation of the transactions contemplated by the
Merger Agreement, take any action which would make any of its
representations or warranties contained in the Merger Agreement untrue or
incorrect in any material respect if made or deemed to be made immediately
thereafter, or cause any of the conditions set forth in the Merger
Agreement not to be satisfied.
During the period from the date of the Merger Agreement through the
Effective Time, the Offeror shall not engage in any activities of any nature
except as provided in or contemplated by the Merger Agreement.
No Solicitation. The Company has agreed in the Merger Agreement that
neither the Company nor its subsidiaries shall, and the Company shall direct and
use its reasonable best efforts to cause its officers, directors, employees,
authorized agents and representatives (including, without limitation, any
investment banker, attorney or accountant retained by it or any of its
subsidiaries) not to initiate, solicit or encourage, directly or indirectly, any
inquiries or the making or implementation of any proposal or offer (including,
without limitation, any proposal or offer to its stockholders, but excluding the
transaction contemplated by the Merger Agreement) with respect to a merger,
acquisition, consolidation or similar transaction involving the Company or its
subsidiaries, or any purchase of all or any significant portion of the assets or
more than 25% of any equity securities of, the Company or its subsidiaries (an
"Acquisition Proposal"), or engage in any
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negotiations concerning, or provide any confidential information or data to, or
have any discussions with, any person relating to an Acquisition Proposal, or
otherwise facilitate any effort or attempt to make or implement an Acquisition
Proposal, and that it will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore and will take the necessary steps to inform such parties of the
obligations undertaken in the Merger Agreement. The Company has agreed to notify
the Parent promptly if any such inquiries or proposals are received by, any such
information is requested from, or any such negotiations or discussions are
sought to be initiated or continued with, the Company or any of its
representatives, and will promptly communicate to the Parent the terms of any
proposal or inquiry which it may receive. Notwithstanding the foregoing, the
Board of Directors of the Company may furnish information to, or enter into
discussions or negotiations with, any person that makes an unsolicited bona fide
proposal in writing, not subject to a financing condition, to acquire the
Company pursuant to a merger, consolidation, share exchange, purchase of a
substantial portion of the assets, business combination or other similar
transaction if, and only to the extent that (i) the Board of Directors
determines in good faith (based on a written opinion of the Company's outside
counsel) that such action is required for the Board of Directors to comply with
its fiduciary duties to stockholders imposed by law, (ii) the Board of Directors
determines in good faith (based on the written opinion of a financial adviser of
nationally recognized reputation) that such transaction would be more favorable
to the Company's stockholders than the Offer, (iii) prior to or concurrently
with furnishing such information or entering into such discussions, the Company
provides written notice to the Parent to the effect that it is furnishing
information to, or entering discussions or negotiations with, such a person or
entity and (iv) the Company keeps the Parent informed of the status of any such
discussions or negotiations.
Options. Pursuant to the Merger Agreement, all outstanding stock options
(the "Company Stock Options") granted under the Company's 1988 Stock Option Plan
for Key Employees (the "Stock Option Plan") or otherwise shall become fully
exercisable and vested, and shall, as of the Effective Time, be canceled by the
Company and converted into the right to receive a cash payment in an amount
equal to the number of Shares subject to each option multiplied by the
difference between the exercise price per Share covered by the option and the
Offer Price. The Merger Agreement also provides that the Company shall grant no
additional stock options.
Indemnification. From and after the Effective Time, the Parent agrees that
provisions for indemnification not materially less favorable than those now
existing in form of the employees, agents, directors and officers of the Company
or its subsidiaries pursuant to the Company's and its subsidiaries' respective
certificate or articles of incorporation and bylaws and agreements as in effect
as of the date of the execution of the Merger Agreement shall survive the Merger
and continue in full force and effect for acts and omissions occurring at or
prior to the Effective Time for a period of six years after the Effective Time.
The Parent will provide, or cause the Surviving Corporation to maintain, for a
period of not less than two years after the Effective Time, the Company's
current director and officer insurance and indemnification policy that provides
coverage for events occurring at or prior to the Effective Time, or
substantially equivalent insurance coverage as provided by the existing policy.
Employee Benefits. The Parent has agreed that continuing employees of the
Company and its subsidiaries following the consummation of the Offer will be
eligible to participate in employee benefit plans that are no less favorable
than those being provided to employees of the Parent. For purposes of
eligibility to participate in and vesting in all benefits provided to continuing
employees, continuing employees of the Company and its subsidiaries will be
granted credit for their years of service with the Company and its subsidiaries.
Employment Agreements. The Merger Agreement provides that as of the
consummation of the Offer, the Parent shall assume and agree to perform the
Employment Agreements (collectively, the "Employment Agreements"), each dated
December 31, 1994, between the Company and each of Frank A. Rosenberry, the
Company's President and Chief Executive Officer, James M. Harrison, the
Company's Executive Vice President, Chief Operating Officer, Treasurer and
Secretary, and Williard D. Finch III, Steven P. Mack and J. Ted Theriault, each
of whom is a Vice-President of the Company, in the same manner and to the same
extent that the Company is then required to perform them.
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Board Representation. The Merger Agreement provides that promptly upon the
purchase by Parent or any of its subsidiaries of such number of Shares as
represents at least a majority of the outstanding Shares and from time to time,
thereafter, the Parent shall be entitled to designate such number of directors,
rounded up to the next whole number, on the Company's Board of Directors as will
give the Parent, subject to compliance with Section 14(f) of the Exchange Act,
representation on the Board of Directors of the Company equal to the product of
the number of directors on the Board of Directors of the Company and the
percentage that such number of Shares so purchased bears to the number of Shares
outstanding. The Company has agreed, upon the request of the Parent, to promptly
increase the size of its Board of Directors and/or exercise its best efforts to
secure the resignations of such number of Directors as is necessary to enable
the Parent's designees to be elected to the Company's Board of Directors.
Conditions Precedent. The respective obligations of each party to effect
the Merger shall be subject to the fulfillment at or prior to the Effective Time
of the consummation of the Offer. See Section 15.
Termination. The Merger Agreement provides that it may be terminated at any
time prior to the consummation of the Merger, whether prior to or after approval
by the stockholders of the Company: (a) by mutual written consent of the Parent
and the Company; (b) by the Company if: (i) in the event any representation or
warranty of the Parent or the Offeror contained in the Merger Agreement is or
becomes materially inaccurate or any covenant or agreement of the Parent or the
Offeror is materially breached by the Parent or the Offeror, (ii) the Parent or
the Offeror fails to cure such inaccuracy or breach within 30 days of its
receipt of written notice thereof from the Company and (iii) the Company
provides the Parent or the Offeror with written notice of termination within 30
days after the earlier of the expiration of such 30-day period or the date the
Company receives written notice from the Parent or the Offeror stating that the
Parent or the Offeror is unable or unwilling to cure such inaccuracy or breach;
(c) by the Parent if: (i) in the event any representation or warranty of the
Company contained in the Merger Agreement is or becomes materially inaccurate or
any covenant or agreement of the Company is materially breached by the Company
prior to consummation of the Offer, (ii) the Company fails to cure such
inaccuracy or breach within 30 days of its receipt of written notice thereof
from the Parent and (iii) the Parent provides the Company with a written notice
of termination within 30 days after the earlier of the expiration of such 30-day
period or the date the Parent receives a written notice from the Company stating
that the Company is unable or unwilling to cure such inaccuracy or breach; (d)
by either the Parent or the Company if: (i) there shall have been a judicial or
regulatory determination that any material provision of the Merger Agreement or
the Merger is illegal, invalid, or unenforceable (unless the illegal, invalid or
unenforceable provision is waived by the party whom such provision is intended
to benefit); or (ii) the Offer shall expire or have been terminated on or after
March 31, 1996 without any Shares being purchased pursuant to the Offer;
provided, however, that the right to terminate the Merger Agreement pursuant to
this clause shall not be available to any party whose failure to fulfill any
covenant of the Merger Agreement has been the cause of, or resulted in, the
failure of the Merger to have occurred on or prior to such date.
If the Merger Agreement is terminated, the Merger Agreement will become
void and there will be no liability or further obligation on the part of the
Offeror, the Parent or the Company or their respective stockholders, officers or
directors, except for the Company's obligations, under certain circumstances, to
pay the Termination Fee (as defined below) or to reimburse the Parent for
certain expenses, except for the confidentiality obligations of the parties,
obligations regarding the payment of the parties' fees and expenses and
liability arising out of the breach of the Merger Agreement.
Fees and Expenses. Whether or not the Merger is consummated, all costs and
expenses incurred in connection with the Merger Agreement and the transactions
contemplated thereby shall be paid by the party incurring such costs and
expenses. The Company has agreed in the Merger Agreement that, in the event that
(i) any person (other than the Parent or any of its affiliates) shall have
become, prior to the termination of the Merger Agreement, the beneficial owner
of 50% or more of the outstanding Shares, (ii) the Offer shall have expired at a
time when the Minimum Condition shall not have been satisfied and at any time on
or prior to one year after the date of the expiration of the Offer any person
(other than the Offeror or any of its affiliates) shall acquire beneficial
ownership of 50% or more of the outstanding Shares or shall consummate an
Acquisition
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Proposal, or (iii) at any time prior to the termination of the Merger Agreement
any person (other than the Offeror or any of its affiliates) shall publicly
announce any Acquisition Proposal and, at any time on or prior to one year after
the date of the termination of the Merger Agreement, shall become the beneficial
owner of 50% or more of the outstanding Shares or shall consummate an
Acquisition Proposal, then the Company shall promptly, but in no event later
than two business days after the first of such events to occur, pay the Offeror
the sum of $3.0 million (the "Termination Fee") and the documented out of pocket
fees and expenses incurred or paid by Parent including, without limitation, all
legal, investment banking, printing, depositary and related fees and expenses,
attributable to the Offer, the Merger and the transactions contemplated by the
Merger Agreement (the "Expenses"); provided, however, that the amount of the
Expenses paid to the Parent and the Offeror shall not exceed $500,000. In the
event the Board of Directors of the Company shall modify or amend its
recommendation of the Offer and/or the Merger in a manner adverse to the Parent
or shall withdraw its recommendation of the Offer, or shall resolve to do any of
the foregoing, or shall have failed to reject any Acquisition Proposal within 10
business days after receipt by the Company or public announcement thereof, the
Company shall reimburse the Parent and the Offeror (not later than five business
days after submission of statements therefor) for the Expenses (up to $500,000).
If the Company fails to pay any such amount when due, and the Parent commences a
suit which results in a judgment against the Company for the Termination Fee,
the Parent shall be entitled to the payment from the Company, in addition to any
such amount, of its costs and expenses incurred in procuring such judicial
determination, together with interest on the Termination Fee and the Expenses at
the rate of 10% per annum.
Amendment. The Company, the Parent and the Offeror may amend, modify or
supplement the Merger Agreement in whole or in part before or after approval of
the Merger Agreement by the stockholders of the Company; provided that any
amendment after such stockholder approval will be subject to further approval of
such stockholders if such further approval is required under Delaware law;
provided, further, that any amendment of the Merger Agreement after consummation
of the Offer which would decrease the Offer Price or impose additional
conditions on the obligations of the Parent or the Offeror will become effective
only if approved by the holders of a majority of the Shares then outstanding not
owned by the Parent, the Offeror or any of their subsidiaries.
The Stock Option Agreements
Tender of the Shares and Stock Option. The Selling Stockholders have agreed
to tender to the Offeror all of the Subject Shares pursuant to the Offer and not
to withdraw any Subject Shares tendered into the Offer. The Selling Stockholders
also have granted to the Offeror an option (the "Stock Option") to purchase all
of the Subject Shares at a purchase price equal to the greatest of the Offer
Price (ii) the price per Share paid in the Offer or (iii) the price paid in any
transaction in which any person or entity shall become the beneficial owner of
50% or more of the Shares, exercisable at any time beginning on the final
business day before (i) the Expiration Date and (ii) ending on the Effective
Date or the termination of the Merger Agreement, as the case may be. In the case
of certain Selling Stockholders, the obligation to sell Subject Shares to the
Offeror is subject to certain rights of first refusal granted by such Selling
Stockholders pursuant to a Stockholders Agreement between the Company and
certain of its stockholders. In the event that such rights of first refusal are
exercised by any of the beneficiaries thereof, the Selling Stockholders who are
also beneficiaries of such rights of first refusal have agreed to exercise such
rights of first refusal to the fullest extent they are permitted to, and any
Shares so acquired will thereafter be deemed Subject Shares.
Conditions to Delivery of the Shares. The Option Agreements provide that
the obligation of the Selling Stockholders to deliver the Subject Shares upon
any exercise of the Stock Option is subject to the following conditions: (i) the
purchase of the Subject Shares would not otherwise violate or cause the
violation of, any applicable law or regulations (including the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), the Exchange
Act, and the rules and regulations thereunder, or the rules of the NYSE or
AMEX), (ii) no statute, rule, regulation, decree, order or injunction shall have
been promulgated, enacted, entered into or enforced by any governmental agency
or authority or court which prohibits delivery of the Subject Shares, whether
temporary, preliminary or permanent and (iii) there shall have been no material
breach of the Merger Agreement by the Offeror or Parent.
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Representations and Warranties. The Option Agreements contain various
customary representations and warranties by the Selling Stockholders, including
those relating to (i) title to the Shares being sold and (ii) authority to
execute, deliver and perform the Option Agreement. The Option Agreements also
contain various customary representations and warranties by the Parent and the
Offeror, including those relating to the authority to execute, deliver and
perform the Option Agreements, among others.
Voting Agreement and Proxy. The Option Agreements provide that, during the
time the Option Agreements are in effect, designees of the Offeror will be
irrevocably appointed the proxy of the Selling Stockholders to vote all of the
Subject Shares on matters relating to (i) the Merger, (ii) any action or
agreement that would impede, interfere with or attempt to discourage the Offer
or the Merger, (iii) any action or agreement that would result in a breach of
any covenant, representation or warranty or any other obligation of the Company
under the Merger Agreement and (iv) any other material change in the corporate
structure or business of the Company.
Sale of the Subject Shares by the Offeror. The Option Agreements provide
that the Selling Stockholders shall not sell, transfer, pledge, encumber, assign
or otherwise dispose of the Subject Shares during the term of such Option
Agreements except for transfers to family members, trusts for the benefit of the
Selling Stockholder or family members or in connection with estate planning but
only if the transferee of such Subject Shares agrees in writing to be bound by
the provisions of the Option Agreement with respect to such Subject Shares.
Termination Date. Each of the Option Agreements will terminate upon the
earliest to occur of (i) the date on which the Parent, the Offeror and the
Selling Stockholder mutually agree in writing, (ii) the successful consummation
of the Offer and (iii) the termination of the Merger Agreement pursuant to its
terms.
14. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that neither the Company nor any of its
subsidiaries will, among other things, prior to the consummation of the Offer
(i) declare, pay, or set aside any dividend or other distribution in respect to
any shares of its capital stock, other than dividends payable to the Company
declared by any of the Company's subsidiaries and other than regular quarterly
cash dividends in an amount not to exceed $0.04 per share in accordance with
past practices, (ii) redeem, purchase, reclassify or retire any shares of its
capital stock or any securities or obligations convertible into or exchangeable
for any shares of its capital stock or (iii) make any change in the number of
the authorized, issued or outstanding shares of capital stock or other equity
security of the Company (other than pursuant to the exercise of options, rights
or similar securities outstanding as of the date of the Merger Agreement), grant
any option or commitment relating to its capital stock or any security
convertible into such capital stock or any security, the value of which is
measured by such capital stock, or any security subordinated to the claims of
general creditors, or issue, sell or retire any debt obligations except in the
ordinary course of business.
15. CERTAIN CONDITIONS TO THE OFFER.
Notwithstanding any other term of the Offer or the Merger Agreement, the
Offeror shall not be required to accept for payment or pay for, subject to any
applicable rules and regulations of the Commission, including Rule 14e-1(c) of
the Exchange Act, any Shares not theretofore accepted for payment or paid for
and may terminate or amend the Offer as to such Shares unless (i) there shall
have been validly tendered and not withdrawn prior to the expiration of the
Offer that number of Shares which would represent at least a majority of the
outstanding Shares on a fully diluted basis, and (ii) any waiting period under
the HSR Act applicable to the purchase of Shares pursuant to the Offer shall
have expired or been terminated. Furthermore, notwithstanding any other term of
the Offer or the Merger Agreement, the Offeror shall not be required to accept
for payment or, subject as aforesaid, to pay for any Shares not theretofore
accepted for payment or paid for, and may terminate or amend the Offer if at any
time on or after the date of the Merger Agreement and
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before the acceptance of such Shares for payment or the payment therefor, unless
all of the following conditions shall have been satisfied:
(a) None of the Parent, the Offeror or the Company shall be subject to
any order, decree or injunction of a court or governmental agency of
competent jurisdiction which enjoins or prohibits the consummation of the
transactions contemplated by the Merger Agreement or the exercise of
control by the Parent over the Company following the Offer.
(b) Any of the representations and warranties of the Company contained
in the Merger Agreement that are qualified as to materiality shall be true
and correct and any of the representations and warranties that are not so
qualified shall be true and correct in all material respects on and as of
the date of consummation of the Offer as if such representations and
warranties were made on and as of such date (except where such
representations and warranties are stated as of a specific date), and the
Company shall have performed in all material respects all agreements and
covenants required by the Merger Agreement to be performed by it on or
prior to such date, provided, however, that no representation and warranty
shall be deemed to have been breached, and no covenant shall be deemed to
have been violated as a result of actions taken by the Company pursuant to
adjustments in accordance with Section 6.3(d) of the Merger Agreement.
(c) The Company shall have furnished to the Parent a certificate dated
as of the date of consummation of the Offer, signed by the Company's Chief
Executive Officer and Chief Financial Officer, to the effect that (i) to
the best knowledge of each of them, the representations and warranties of
the Company contained in the Merger Agreement are true and correct in all
material respects as of such date (except where such representations and
warranties are stated as of a specific date) and the Company has performed
in all material respects all agreements, covenants and obligations required
to be performed by it pursuant to the Merger Agreement on or prior to such
date.
(d) There shall not have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on the New York Stock
Exchange, (ii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States or (iii) any material
limitation (whether or not mandatory) by any governmental authority on, or
any other event which might materially affect the extension of credit by
lending institutions.
(e) There shall have not occurred any material adverse change in the
business, financial condition, results of operations or properties of the
Company and its subsidiaries on a consolidated basis.
(f) (i) The Board of Directors of the Company shall not have withdrawn
or modified in a manner adverse to the Parent or the Offeror its approval
or recommendation of the Offer, the Merger or the Merger Agreement, or
approved or recommended any Acquisition Proposal (other than with the
Parent or any of its affiliates), (ii) the Company shall not have entered
into any agreement with respect to any Acquisition Proposal (other than
with the Parent or any of its affiliates) and (iii) the Board of Directors
of the Company or any committee thereof shall not have resolved to take any
of the foregoing actions.
The foregoing conditions are for the sole benefit of the Parent and the
Offeror and may be asserted by the Parent or the Offeror regardless of the
circumstances giving rise to any such condition and may be waived by the Parent
or the Offeror, in whole or in part, at any time and from time to time, in the
sole discretion of the Parent or the Offeror. The failure by the Parent or the
Offeror at any time to exercise any of the foregoing rights will not be deemed a
waiver of any right, the waiver of such right with respect to any particular
facts or circumstances shall not be deemed a waiver with respect to any other
facts or circumstances, and each right will be deemed an ongoing right which may
be asserted at any time and from time to time.
Should the Offer be terminated pursuant to the foregoing provisions, all
tendered Shares not theretofore accepted for payment shall forthwith be returned
by the Depositary to the tendering stockholders.
25
27
16. CERTAIN REGULATORY AND LEGAL MATTERS.
Except as set forth in this section, the Offeror is not aware of any
approval or other action by any governmental or administrative agency which
would be required for the acquisition or ownership of Shares by the Offeror as
contemplated herein. Should any such approval or other action be required, it
will be sought, but the Offeror has no current intention to delay the purchase
of Shares tendered pursuant to the Offer pending the outcome of any such matter,
subject, however, to the Offeror's right to decline to purchase Shares if any of
the conditions specified in Section 15 shall not have been satisfied. There can
be no assurance that any such approval or other action, if needed, will be
obtained or will be obtained without substantial conditions, or that adverse
consequences might not result to the Company's business or that certain parts of
the Company's business might not have to be disposed of if any such approvals
are not obtained or other action taken.
Antitrust. Under the provisions of the HSR Act applicable to the Offer, the
acquisition of Shares under the Offer may be consummated following the
expiration of a 15-day waiting period following the filing by the Parent, on
behalf of itself and the Offeror, of a Notification and Report Form with respect
to the Offer, unless the Parent receives a request for additional information or
documentary material from the Department of Justice, Antitrust Division (the
"Antitrust Division") or the Federal Trade Commission ("FTC") or unless early
termination of the waiting period is granted. The Parent made such a filing on
September 19, 1995 and, accordingly, the initial waiting period will expire on
October 4, 1995. If, within the initial 15-day waiting period, either the
Antitrust Division or the FTC requests additional information or material from
the Parent concerning the Offer, the waiting period will be extended to the
tenth calendar day after the date of substantial compliance by the Parent with
such request. Complying with a request for additional information or material
can take a significant amount of time.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the Offeror's proposed acquisition of
the Company. At any time before or after the Offeror's acquisition of Shares
pursuant to the Offer, the Antitrust Division or the FTC could take such action
under the antitrust laws as either deems necessary or desirable in the public
interest, including (i) seeking to enjoin the purchase of Shares pursuant to the
Offer or the consummation of the Merger or (ii) seeking the divestiture of
Shares acquired by the Offeror pursuant to the Offer or the divestiture of
substantial assets of the Company or its subsidiaries or the Parent or its
subsidiaries. Private parties may also bring legal action under the antitrust
laws under certain circumstances. There can be no assurance that a challenge to
the Offer on antitrust grounds will not be made, or, if such a challenge is
made, of the result thereof.
If any applicable waiting period under the HSR Act has not expired or been
terminated prior to the Expiration Date, the Offeror will not be obligated to
proceed with the Offer or the purchase of any Shares not theretofore purchased
pursuant to the Offer. See Section 15.
State Takeover Laws. The Company is incorporated under the laws of the
State of Delaware. In general, Section 203 of the DGCL ("Section 203") prevents
an "interested stockholder" (including a person who owns or has the right to
acquire 15% or more of a corporation's outstanding voting stock) from engaging
in a "business combination" (defined to include mergers and certain other
actions) with a Delaware corporation for a period of three years following the
date such person became an interested stockholder unless, among other things, a
corporation in its certificate of incorporation elects not to be subject to
Section 203. Although the Company's certificate of incorporation does not
provide that the Company is not subject to Section 203, Section 203 is
inapplicable to the Offer and the Merger because the Offer and the Merger have
been approved by the Board of Directors of the Company.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects in such states. In Edgar v. MITE Corp., in 1982, the Supreme
Court of the United States (the "U.S. Supreme Court") invalidated on
constitutional grounds the Illinois Business Takeover Act, which, as a matter of
state securities law, made takeovers of corporations meeting certain
requirements more difficult. However in 1987, in CTS Corp. v. Dynamics Corp. of
America,the U.S. Supreme Court held that the State of Indiana may, as a
26
28
matter of corporate law and, in particular, with respect to those aspects of
corporate law concerning corporate governance, constitutionally disqualify a
potential acquirer from voting on the affairs of a target corporation without
the prior approval of the remaining stockholders. The state law before the U.S.
Supreme Court was by its terms applicable only to corporations that had a
substantial number of stockholders in the state and were incorporated there.
The Company, directly or through subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws. The Offeror does not know whether any of these laws will, by
their terms, apply to the Offer or the Merger and has not complied with any such
laws. Should any person seek to apply any state takeover law, the Offeror will
take such action as then appears desirable, which may include challenging the
validity or applicability of any such statute in appropriate court proceedings.
In the event it is asserted that one or more state takeover laws are applicable
to the Offer or the Merger, and an appropriate court does not determine that it
is inapplicable or invalid as applied to the Offer, the Offeror might be
required to file certain information with, or receive approvals from, the
relevant state authorities. In addition, if enjoined, the Offeror might be
unable to accept for payment any Shares tendered pursuant to the Offer, or be
delayed in continuing or consummating the Offer and the Merger. In such case,
the Offeror may not be obligated to accept for payment any Shares tendered. See
Section 15.
17. FEES AND EXPENSES.
Neither the Offeror nor the Parent, nor any officer, director, stockholder,
agent or other representative of the Offeror or the Parent, will pay any fees or
commissions to any broker, dealer or other person (other than the Dealer
Manager, the Information Agent and the Depositary) for soliciting tenders of
Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust
companies and other nominees will, upon request, be reimbursed by the Offeror
for customary mailing and handling expenses incurred by them in forwarding
materials to their customers.
PaineWebber Incorporated ("PaineWebber") is acting as Dealer Manager in
connection with the Offer and has provided certain financial advisory services
to the Parent and the Offeror in connection with the proposed acquisition of the
Shares, including the delivery of an opinion to the Parent's Board of Directors
that the consideration to be paid for the Shares pursuant to the Offer and
Merger is fair to the shareholders of the Parent from a financial point of view.
Pursuant to its engagement letter with PaineWebber, the Parent paid PaineWebber
a retainer of $50,000 upon the execution of the engagement letter and has agreed
to pay PaineWebber a transaction fee of $750,000 (against which the retainer
will be credited), payable upon the consummation of the Offer. In addition, the
Parent and PaineWebber have entered into a dealer manager agreement (the "Dealer
Manager Agreement") pursuant to which PaineWebber has agreed to act as the
Dealer Manager for the Offer. Pursuant to the Dealer Manager Agreement, the
Parent paid PaineWebber a $50,000 fee upon execution of such agreement. The
Offeror has also agreed to reimburse PaineWebber for certain reasonable
out-of-pocket expenses incurred by PaineWebber in connection with the Offer,
including the reasonable fees of its counsel (subject to certain limitations),
and to indemnify PaineWebber against certain liabilities and expenses, including
certain liabilities under the federal securities laws.
The Offeror has retained D.F. King & Co., Inc., as Information Agent, and
Trust Company Bank, as Depositary, in connection with the Offer. The Information
Agent and the Depositary will receive reasonable and customary compensation for
their services hereunder and reimbursement for their reasonable out-of-pocket
expenses. The Information Agent and the Depositary also will be indemnified by
the Offeror against certain liabilities in connection with the Offer.
18. MISCELLANEOUS.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares residing in any jurisdiction in which the making or
acceptance thereof would not be in compliance with the securities, blue sky or
other laws of such jurisdiction. In any jurisdiction where the securities, blue
sky or other laws require the Offer to be made by a licensed broker or dealer,
the Offer shall be deemed to be made on
27
29
behalf of the Offeror by the Dealer Manager or one or more registered brokers or
dealers licensed under the laws of such jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of the Offeror other than as contained in this Offer to
Purchase or in the Letter of Transmittal, and, if any such information or
representation is given or made, it should not be relied upon as having been
authorized by the Offeror.
The Offeror and the Parent have filed with the Commission the Schedule
14D-1, pursuant to Section 14(d)(1) of the Exchange Act and Rule 14d-1
promulgated thereunder, furnishing certain information with respect to the
Offer. Such Schedule 14D-1 and any amendments thereto, including exhibits, may
be examined and copies may be obtained at the same places and in the same manner
as set forth with respect to the Company in Section 8 (except that they will not
be available at the regional offices of the Commission).
NELSON ACQUISITION CORP.
September 19, 1995
28
30
SCHEDULE I
CERTAIN INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE
OFFICERS OF THE PARENT AND THE OFFEROR
1. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARENT. Set forth below are the
name, age, current business address, citizenship, present principal occupation
or employment and five-year employment history of each director and executive
officer of the Parent. Unless otherwise indicated, each person identified below
has been an employee of the firm(s) listed below as his principal occupation for
more than the last five years, and each such person's business address is Nelson
Place at Elm Hill Pike, P.O. Box 141000, Nashville, Tennessee 37214-1000. All
persons listed below are citizens of the United States.
DIRECTOR/OFFICER
NAME AGE POSITION WITH THE PARENT SINCE
-------------------------------- --- ---------------------------------------- ----------------
Sam Moore....................... 64 Chairman of the Board of Directors, 1961
Chief Executive Officer, President and
Director
S. Joseph Moore................. 32 Executive Vice President and Director 1995
Joe L. Powers................... 49 Executive Vice President and Secretary 1980
Charles Z. Moore................ 61 Senior Vice President, International 1983
Ray Capp........................ 42 Senior Vice President, Operations 1995
Roland Lundy.................... 45 President, Word Records and 1993
Music Division
Byron D. Williamson............. 49 President, Word Publishing Division 1993
Vance Lawson.................... 36 Vice President, Finance 1988
Stuart A. Heaton................ 39 Vice President and General Counsel 1989
Phyllis E. Williams............. 47 Treasurer 1988
Brownlee O. Currey, Jr.......... 66 Director 1984
W. Lipscomb Davis, Jr........... 66 Director 1984
Robert J. Niebel, Sr............ 57 Director 1973
Millard V. Oakley............... 65 Director 1972
Joe M. Rodgers.................. 61 Director 1992
Cal Turner, Jr.................. 55 Director 1991
Andrew J. Young................. 63 Director 1993
Sam Moore has been the Chairman of the Board, Chief Executive Officer,
President and a Director of the Parent since its founding in 1961.
S. Joseph Moore was appointed Executive Vice President of the Parent in
1995, and, prior to such appointment, he served as Divisional Vice President of
the Parent in various capacities since 1991. S. Joseph Moore is the son of Sam
Moore.
Joe L. Powers was appointed Executive Vice President of the Parent in 1995
and has been the Secretary of the Parent since 1990. Previously, Mr. Powers
served as Vice President of the Parent since 1980.
Charles Z. Moore has been a Vice President of the Parent since 1983 and was
appointed Senior Vice President, International in 1986. Charles Moore is the
brother of Sam Moore.
Ray Capp was appointed Senior Vice President, Operations of the Parent in
1995. Prior to joining the Parent, Mr. Capp was the President and Chief
Operating Officer of Ingram Merchandising Services and Assistant to the Chairman
of Ingram Distribution, Inc. since 1992 and Executive Vice President and Chief
Operating Officer of Ingram Entertainment from 1987 to 1992.
Roland Lundy has been the President of the Parent's Word Records and Music
Division since 1993. Mr. Lundy was formerly President of Word since 1989.
31
Byron D. Williamson has been the President of the Parent's Word Publishing
Division since 1993. Mr. Williamson was formerly Executive Vice President of
Word Publishing since 1988.
Vance Lawson has been the Vice President, Finance of the Parent since 1993.
Mr. Lawson was formerly Vice President of Finance and Operations at Word since
1988.
Stuart A. Heaton has been the Vice President and General Counsel of the
Parent since 1991. Previous to that time, Mr. Heaton served as the Parent's
corporate counsel since 1989.
Phyllis E. Williams has been the Treasurer of the Parent since 1992. Mrs.
Williams was previously Controller for the Parent since 1988.
Brownlee O. Currey, Jr. is the Chairman of the Board and President of the
Nashville Banner Publishing Company, a newspaper company, a Director of OCC,
Inc., the principal subsidiary of Osborn Communications Corporation, a
diversified media company, and A+ Communications, Inc., a provider of paging
communications and telemessaging services.
W. Lipscomb Davis, Jr. is a Partner of Hillsboro Enterprises, an investment
company, and a Director of Third National Bank, a Tennessee bank, American
General Corporation, an insurance holding company, and Genesco, Inc., a consumer
products company.
Robert J. Niebel is the Senior Vice President of 20th Century Christian,
Inc., a publishing company.
Millard V. Oakley is a businessman managing private investments.
Joe M. Rodgers is the Chairman of the JMR Group (investments), a Director
of AMR Corporation, an airline, BellSouth Telecommunications, a
telecommunications company, Gaylord Entertainment Company, a diversified
entertainment and communications company, Gryphon Holding, Inc., an insurance
company, LaFarge Corp., a cement and construction materials company, and Willis
Corroon plc, an insurance holding company. Mr. Rodgers previously was the
Chairman and CEO of Berlitz International from December 1991 until February
1993.
Cal Turner, Jr. is the Chairman and Chief Executive Officer of Dollar
General Corp., an operator of general merchandise stores, and a Director of
First American Corporation, a Tennessee bank holding company, and Shoney's,
Inc., a national restaurant company.
Andrew J. Young is the Vice President of Law Companies Group, an
engineering company, Chairman of the Atlanta Commission for Olympic Games, and a
Director of Delta Airlines and Host Marriott Corporation, a lodging company. Mr.
Young previously served as the Mayor of Atlanta, Georgia from 1980 to 1990.
2. DIRECTORS AND EXECUTIVE OFFICERS OF THE OFFEROR. S. Joseph Moore is the
sole director and the President of the Offeror, and Joe L. Powers is the
Secretary of the Offeror. Such persons are the sole officers of the Offeror.
Each of Messrs. Moore and Powers has been employed by the Parent for the last
five years and all information concerning the current business address, present
principal occupation or employment and five-year employment history for each of
Messrs. Moore and Powers is the same as the information given above. Each of
Messrs. Moore and Powers were elected to their respective positions in September
1995 upon the formation of the Offeror.
32
Facsimile copies of the Letter of Transmittal will be accepted. The Letter
of Transmittal and certificates for Shares and any other required documents
should be sent or delivered by each stockholder of the Company or his broker,
dealer, commercial bank, trust company or other nominee to the Depositary at one
of the addresses set forth below:
The Depositary for the Offer is:
TRUST COMPANY BANK
---------------------
By Hand: By Overnight Courier: By Mail:
58 Edgewood Avenue 58 Edgewood Avenue P.O. Box 4625
Room 225 Annex Room 225 Annex Atlanta, Georgia 30302
Atlanta, Georgia 30303 Atlanta, Georgia 30303
By Facsimile:
(404) 332-3875
(404) 332-3966
Confirm by telephone:
(800) 568-3476
Any questions or request for assistance or additional copies of the Offer
to Purchase and the Letter of Transmittal and Notice of Guaranteed Delivery may
be directed to the Information Agent or the Dealer Manager at their respective
telephone numbers and locations listed below. Stockholders may also contact
their broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 WATER STREET
NEW YORK, NEW YORK 10005
BANKS AND BROKERS CALL COLLECT: (212) 269-5550
ALL OTHERS CALL TOLL-FREE: (800) 735-3568
The Dealer Manager for the Offer is:
PAINEWEBBER INCORPORATED
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
TOLL-FREE (800) 520-5698
OR CALL COLLECT
(212) 713-1425
EX-99.A2
3
LETTER OF TRANSMITTAL
1
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
of
THE C. R. GIBSON COMPANY
Pursuant to the Offer to Purchase
Dated September 19, 1995
by
NELSON ACQUISITION CORP.
a wholly owned subsidiary of
THOMAS NELSON, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, OCTOBER 17, 1995, UNLESS THE OFFER IS EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
TRUST COMPANY BANK
By Hand: By Overnight Courier: By Mail:
58 Edgewood Avenue 58 Edgewood Avenue P.O. Box 4625
Room 225 Annex Room 225 Annex Atlanta, Georgia 30302
Atlanta, Georgia 30303 Atlanta, Georgia 30303
By Facsimile:
(404) 332-3875
(404) 332-3966
Confirm by Telephone:
(800) 568-3476
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN A BOOK-ENTRY
TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution
----------------------------------------------
Check box of Book-Entry Transfer Facility:
/ / The Depository Trust Company / / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number
-------------------------------------------------------------
Transaction Code Number
----------------------------------------------------
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name of Registered Owner(s)
------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
-------------------------
Name of Institution that Guaranteed Delivery
-------------------------------
If delivered by book-entry transfer check box:
-----------------------------
/ / The Depository Trust Company / / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number
-------------------------------------------------------------
Transaction Code Number
----------------------------------------------------
2
This Letter of Transmittal is to be used either if certificates for Shares
(as such terms are defined below) are to be forwarded herewith or, unless an
Agent's Message (as defined in Section 2 of the Offer to Purchase) is utilized,
if delivery of Shares is to be made by book-entry transfer to an account
maintained by the Depositary at a Book-Entry Transfer Facility as defined in and
pursuant to the procedures set forth in Section 2 of the Offer to Purchase.
Stockholders who deliver Shares by book-entry transfer are referred to herein as
"Book-Entry Stockholders" and other stockholders are referred to herein as
"Certificate Stockholders." Stockholders whose certificates for Shares are not
immediately available or who cannot deliver either the certificates for, or a
Book-Entry Confirmation (as defined in Section 2 of the Offer to Purchase) with
respect to, their Shares and all other documents required hereby to the
Depository prior to the Expiration Date (as defined in Section 1 of the Offer to
Purchase) must tender their Shares in accordance with the guaranteed delivery
procedures set forth in Section 2 of the Offer to Purchase. See Instruction 2.
Delivery of documents to a Book-Entry Transfer Facility does not constitute
delivery to the Depositary.
--------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
----------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED OWNER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) ON SHARES TENDERED
CERTIFICATE(S)) (ATTACH ADDITIONAL LIST IF NECESSARY)
----------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)(1) CERTIFICATE(S)(1) TENDERED(2)
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
TOTAL SHARES TENDERED
----------------------------------------------------------------------------------------------------------
(1) Need not be completed by Book-Entry Stockholders.
(2) Unless otherwise indicated, it will be assumed that all Shares described herein are being tendered.
See Instruction 4.
----------------------------------------------------------------------------------------------------------
3
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Nelson Acquisition Corp., a Delaware
corporation (the "Offeror"), which is a wholly owned subsidiary of Thomas
Nelson, Inc., a Tennessee corporation, the above-described shares of Common
Stock, par value $0.10 per share (the "Shares"), of The C. R. Gibson Company, a
Delaware corporation (the "Company"), upon the terms and subject to the
conditions set forth in the Offeror's Offer to Purchase dated September 19, 1995
and this Letter of Transmittal (which, together with any amendments or
supplements thereto or hereto, collectively constitute the "Offer"), receipt of
which is hereby acknowledged.
Upon the terms of the Offer, subject to, and effective upon, acceptance for
payment of, and payment for, the Shares tendered herewith in accordance with the
terms of the Offer, the undersigned hereby sells, assigns and transfers to, or
upon the order of, the Offeror all right, title and interest in and to all the
Shares that are being tendered hereby (and, except for the quarterly dividend of
$0.04 per Share payable to record holders of the Shares on September 25, 1995,
any dividends, distributions and all other Shares or other securities or rights
issued or issuable in respect thereof on or after September 14, 1995), and
irrevocably constitutes and appoints Trust Company Bank (the "Depositary"), the
true and lawful agent and attorney-in-fact of the undersigned, with full power
of substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to the full extent of the undersigned's rights with
respect to such Shares (and any such other Shares or securities or rights), to
(a) deliver certificates for such Shares (and any such other Shares or
securities or rights) or transfer ownership of such Shares (and any such other
Shares or securities or rights) on the account books maintained by a Book-Entry
Transfer Facility together, in any such case, with all accompanying evidences of
transfer and authenticity to, or upon the order of, the Offeror, (b) present
such Shares (and any such other Shares or securities or rights) for transfer on
the Company's books and (c) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares (and any such other Shares or
securities or rights), all in accordance with the terms of the Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the tendered
Shares (and any and all other Shares or other securities or rights issued or
issuable in respect of such Shares on or after September 14, 1995) and, when the
same are accepted for payment by the Offeror, the Offeror will acquire good
title thereto, free and clear of all liens, restrictions, claims and
encumbrances, and the same will not be subject to any adverse claim. The
undersigned will, upon request, execute any additional documents deemed by the
Depositary or the Offeror to be necessary or desirable to complete the sale,
assignment and transfer of the tendered Shares (and, except for the quarterly
dividend of $0.04 per Share payable to record holders of the Shares on September
25, 1995, any dividends, distributions and all other Shares or other securities
or rights issued or issuable in respect thereof on or after September 14, 1995).
All authority conferred or agreed to be conferred pursuant to this Letter
of Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned hereby irrevocably appoints S. Joseph Moore and Joe L.
Powers, and each of them, and any other designees of the Offeror, the
attorneys-in-fact and proxies of the undersigned, each with full power of
substitution, to vote at any annual, special or adjourned meeting of the
Company's stockholders or otherwise in such manner as each such attorney-in-fact
and proxy or his substitute shall in his sole discretion deem proper with
respect to, to execute any written consent concerning any matter as each such
attorney-in-fact and proxy or his substitute shall in his sole discretion deem
proper with respect to, and to otherwise act as each such attorney-in-fact and
proxy or his substitute shall in his sole discretion deem proper with respect
to, the Shares tendered hereby that have been accepted for payment by the
Offeror prior to the time any such action is taken and with respect to which the
undersigned is entitled to vote (and any and all other Shares or other
securities or rights issued or issuable in respect of such Shares on or after
September 14, 1995). This appointment is effective when, and only to the extent
that, the Offeror accepts for payment such Shares as provided in the Offer to
Purchase. This power of attorney and proxy are irrevocable and are granted in
consideration of the acceptance for payment of such Shares in accordance with
the terms of the Offer. Upon such acceptance for payment, all prior powers of
attorney, proxies and consents given by the undersigned with respect to such
Shares or other securities or rights will, without further action, be revoked
and no subsequent powers of attorney, proxies, consents or revocations may be
given (and, if given, will not be deemed effective) by the undersigned.
The undersigned understands that the valid tender of Shares pursuant to any
of the procedures described in Section 3 of the Offer to Purchase and in the
Instructions hereto will constitute a binding agreement between the undersigned
and the Offeror upon the terms and subject to the conditions of the Offer.
Without limiting the foregoing, if the price to be paid in the Offer is amended
in accordance with the Offer, the price to be paid to the undersigned will be
the amended price notwithstanding the fact that a different price is stated in
this Letter of Transmittal.
4
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any certificates for
Shares not tendered or accepted for payment in the name(s) of the registered
holder(s) appearing under "Description of Shares Tendered." Similarly, unless
otherwise indicated under "Special Delivery Instructions," please mail the check
for the purchase price and/or return any certificates for Shares not tendered or
accepted for payment (and accompanying documents, as appropriate) to the
addressee(s) of the registered holder(s) appearing under "Description of Shares
Tendered." In the event that both the Special Delivery Instructions and the
Special Payment Instructions are completed, please issue the check for the
purchase price and/or return any certificates for Shares not tendered or
accepted for payment (and any accompanying documents, as appropriate) in the
name of, and deliver such check and/or return such certificates (and any
accompanying documents, as appropriate) to the person or persons so indicated.
Unless otherwise indicated herein under "Special Payment Instructions," please
credit any Shares tendered herewith by book-entry transfer that are not accepted
for payment by crediting the account at the Book-Entry Transfer Facility (as
defined herein) designated above. The undersigned recognizes that the Offeror
has no obligation pursuant to the Special Payment Instructions to transfer any
Shares from the name of the registered holder thereof if the Offeror does not
accept for payment any of the Shares so tendered.
/ / CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT
YOU OWN HAVE BEEN LOST OR DESTROYED AND SEE INSTRUCTION 11.
------------------------------------------------------------
------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7) (SEE INSTRUCTIONS 5, 6 AND 7)
To be completed ONLY if certificates for To be completed ONLY if certificates for
Shares not tendered or not accepted for Shares not tendered or not accepted for
payment and/or the check for the purchase payment and/or the check for the purchase
price of Shares accepted for payment are to price of Shares accepted for payment are to
be issued in the name of someone other than be sent to someone other than the
the undersigned, or if Shares delivered by undersigned, or to the undersigned at an
book-entry transfer that are not accepted for address other than that above.
payment are to be returned by credit to an
account maintained at a Book-Entry Transfer Mail: / / Check / / Certificate(s)
Facility other than the account indicated to:
above. Name:
---------------------------------------
Issue: / / Check / / Certificate(s) (Please Print)
to: Address:
Name: ------------------------------------
-------------------------------------- (Include Zip Code)
(Please Print)
Address: (Employer Identification or Social Security
----------------------------------- Number)
(Include Zip Code)
(Employer Identification or Social Security
Number)
/ / Credit unpurchased Shares delivered by
book-entry transfer to the Book-Entry
Transfer
Facility account set forth below:
Check appropriate Box:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
(Account Number)
------------------------------------------------------------
------------------------------------------------------------
5
---------------------------------------------------------------------------------
SIGN SIGN HERE
HERE (ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
_________________________________________________________________________________
_________________________________________________________________________________
(SIGNATURE(S) OF STOCKHOLDER(S))
Dated: ____________________ , 1995
(Must be signed by registered holder(s) as name(s) appear(s) on the
certificate(s) for the Shares or on a security position listing or
by person (s) authorized to become registered holder(s) by
certificates and documents transmitted herewith. If signature is by
trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or
representative capacity, please provide the following information
and see Instruction 5.)
Dated: ____________________ , 1995
Name(s) _______________________________________________________________________
_______________________________________________________________________________
(PLEASE PRINT)
Capacity (Full Title) _________________________________________________________
Address: ______________________________________________________________________
_______________________________________________________________________________
(INCLUDE ZIP CODE)
Daytime Area Code and Telephone No. ___________________________________________
Employer Identification or Social Security Number _____________________________
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature __________________________________________________________
Name __________________________________________________________________________
_______________________________________________________________________________
(PLEASE PRINT)
Name of Firm _________________________________________________________________
Address ______________________________________________________________________
______________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone No. ( ) __________________________________________
Dated: _________________ , 1995
---------------------------------------------------------------------------------
6
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this Section, includes any
participant in any of the Book-Entry Transfer Facilities' systems whose name
appears on a security position listing as the owner of the Shares) of Shares
tendered herewith, unless such registered holder(s) has completed either the box
entitled "Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on the Letter of Transmittal or (b) if such Shares are tendered
for the account of a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in the
Security Transfer Agents Medallion Program, or which is an "eligible guarantor
institution," as such term is defined in Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended (an "Eligible Institution"). In all other
cases, all signatures on this Letter of Transmittal must be guaranteed by an
Eligible Institution. See Instruction 5.
2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed by
stockholders either if certificates are to be forwarded herewith or, unless an
Agent's Message (as defined below) is utilized, if delivery of Shares is to be
made pursuant to the procedures for book-entry transfer set forth in Section 2
of the Offer to Purchase. For a stockholder validly to tender Shares pursuant to
the Offer, either (a) a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), together with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message, and
any other required documents, must be received by the Depositary at any one of
its addresses set forth herein prior to the Expiration Date and either
certificates for tendered Shares must be received by the Depositary at one of
such addresses or Shares must be delivered pursuant to the procedures for
book-entry transfer set forth herein (and a Book-Entry Confirmation received by
the Depositary), in each case prior to the Expiration Date, or (b) the tendering
stockholder must comply with the guaranteed delivery procedures set forth below
and in Section 2 of the Offer to Purchase.
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver their certificates and all other required documents to the
Depositary or complete the procedures for book-entry transfer prior to the
Expiration Date may tender their Shares by properly completing and duly
executing the Notice of Guaranteed Delivery pursuant to the guaranteed delivery
procedures set forth in Section 2 of the Offer to Purchase. Pursuant to such
procedures, (a) such tender must be made by or through an Eligible Institution,
(b) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by the Offeror, must be received by the
Depositary prior to the Expiration Date and (c) the certificates for all
tendered Shares, in proper form for transfer (or a Book-Entry Confirmation with
respect to all such Shares), together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message, and any other required documents must be received by the Depositary
within three trading days after the date of execution of such Notice of
Guaranteed Delivery. A "trading day" is any day on which the American Stock
Exchange is open for business.
The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgement from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Offeror may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE
OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or facsimile thereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. PARTIAL TENDERS (APPLICABLE TO CERTIFICATE STOCKHOLDERS ONLY). If fewer
than all the Shares evidenced by any certificate submitted are to be tendered,
fill in the number of Shares that are to be tendered in the box entitled "Number
of Shares Tendered." In any such case, new certificate(s) for the remainder of
the Shares that were evidenced by the old certificate(s) will be sent to the
registered holder, unless otherwise provided in the appropriate box on this
Letter of Transmittal, as soon as practicable after the expiration of the Offer.
All Shares represented by certificates delivered to the Depositary will be
deemed to have been tendered unless otherwise indicated.
7
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder of the Shares
tendered hereby, the signature must correspond with the name as written on the
face of the certificate(s) without any change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Offeror of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment or certificates for Shares not
tendered or accepted for payment are to be issued to a person other than the
registered owner(s). Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the certificates listed, the certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or names of the registered owner or owners appear on the
certificates. Signatures on such certificates or stock powers must be guaranteed
by an Eligible Institution.
6. STOCK TRANSFER TAXES. The Offeror will pay any stock transfer taxes with
respect to the transfer and sale of Shares to it or its order pursuant to the
Offer. If, however, payment of the purchase price is to be made to, or if
certificates for Shares not tendered or accepted for payment are to be
registered in the name of, any person(s) other than the registered holder(s), or
if tendered certificates are registered in the name(s) of any person(s) other
than the person(s) signing this Letter of Transmittal, the amount of any stock
transfer taxes (whether imposed on the registered holder(s) or such person(s))
payable on account of the transfer to such person(s) will be deducted from the
purchase price unless satisfactory evidence of the payment of such taxes or
exemption therefrom is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued in
the name of, and/or certificates for Shares not accepted for payment are to be
returned to, a person other than the signer of this Letter of Transmittal or if
a check is to be sent and/or such certificates are to be returned to a person
other than the signer of this Letter of Transmittal or to an address other than
that shown above, the appropriate boxes on this Letter of Transmittal should be
completed. Any stockholder(s) delivering Shares by Book-Entry Transfer may
request that Shares not accepted for payment be credited to such account
maintained at a Book-Entry Transfer Facility as such stockholder(s) may
designate.
8. WAIVER OF CONDITIONS. The Offeror reserves the absolute right in its
sole discretion to waive any of the specified conditions of the Offer, in whole
or in part in the case of any Shares tendered.
9. 31% BACKUP WITHHOLDING. In order to avoid "backup withholding" of
Federal income tax on payments of cash pursuant to the Offer, a stockholder
surrendering shares in the Offer must, unless an exemption applies, provide the
Depositary with such stockholder's correct taxpayer identification number
("TIN") on Substitute Form W-9 in this Letter of Transmittal and certify under
penalties of perjury that such TIN is correct and that such stockholder is not
subject to backup withholding. If a stockholder does not provide such
stockholder's correct TIN or fails to provide the certifications described
above, the Internal Revenue Service (the "IRS") may impose a $50 penalty on such
stockholder and payment of cash to such stockholder pursuant to the Offer may be
subject to backup withholding of 31%.
Backup withholding is not an additional income tax. Rather, the amount of
the backup withholding can be credited against the Federal income tax liability
of the person subject to the backup withholding, provided that the required
information is given to the IRS. If backup withholding results in an overpayment
of tax, a refund can be obtained by the stockholder upon filing an income tax
return.
The stockholder is required to give the Depositary the TIN (i.e., social
security number or employer identification number) of the record owner of the
Shares. If the Shares are held in more than one name or are not in the name of
the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% on all payments made prior to the time a properly
8
certified TIN is provided to the Depositary. However, such amounts will be
refunded to such stockholder if a TIN is provided to the Depositary within 60
days.
Certain stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding.
Tendering stockholders who are exempt from backup withholding should check the
box in Part 4 of the Substitute Form W-9. Noncorporate foreign stockholders
should complete and sign the main signature form and a Form W-8, Certificate of
Foreign Status, a copy of which may be obtained from the Depositary, in order to
avoid backup withholding. See the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for more instructions.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance or additional copies of the Offer to Purchase, the Letter of
Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
directed to the Information Agent or the Dealer Manager at their respective
addresses set forth below.
11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate representing
Shares has been lost, destroyed or stolen, the stockholder should promptly
notify the Depositary by checking the box immediately preceding the special
payment/special delivery instructions and indicating the number of Shares lost.
The stockholder will then be instructed as to the steps that must be taken in
order to replace the certificate. This Letter of Transmittal and related
documents cannot be processed until the procedures for replacing lost or
destroyed certificates have been followed.
9
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF), TOGETHER WITH ANY
REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN
AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE AND EITHER CERTIFICATES FOR TENDERED
SHARES MUST BE RECEIVED BY THE DEPOSITARY OR SHARES MUST BE DELIVERED PURSUANT
TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH CASE PRIOR TO THE EXPIRATION
DATE, OR THE TENDERING STOCKHOLDER MUST COMPLY WITH THE PROCEDURES FOR
GUARANTEED DELIVERY.
------------------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: TRUST COMPANY BANK
------------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE
FORM W-9 BOX AT RIGHT AND CERTIFY BY SIGNING
AND DATING BELOW -----------------------------------------
Social Security Number(s)
OR
--------------------------------------
Employer Identification Number(s)
-------------------------------------------------------------------------------------------------
PART 2 -- Certification -- Under penalties of perjury, I certify that: PART 3 --
Department of the
Treasury Internal (1) the number shown on this form is my correct Taxpayer Identification Awaiting TIN / /
Revenue Service Number (or I am waiting for a number to be issued to me); and
----------------------
Payer's Request (2) I am not subject to backup withholding because (a) I am exempt from
for Taxpayer backup withholding or (b) I have not been notified by the Internal Revenue PART 4 --
Identification Service (the "IRS") that I am subject to backup withholding as a result
Number (TIN) of a failure to report all interest or dividends or (c) the IRS has Exempt TIN / /
notified me that I am no longer subject to backup withholding.
-------------------------------------------------------------------------------------------------
Certification instructions -- You must cross out item (2) in Part 2 above if you have been notified
by the IRS that you are subject to backup withholding because of under-reporting interest or
dividends on your tax returns. However, if after being notified by the IRS that you were subject to
backup withholding you received another notification from the IRS stating that you are no longer
subject to backup withholding, do not cross out such item (2). If you are exempt from backup
withholding, check the box in Part 4 above.
SIGNATURE DATE , 1995
--------------------------------------------- --------------------------
------------------------------------------------------------------------------------------------------------------------------
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b)
I intend to mail or deliver an application in the near future. I understand
that, if I do not provide a taxpayer identification number to the Depositary,
31% of all reportable payments made to me will be withheld, but will be refunded
if I provide a certified taxpayer identification number within 60 days.
------------------------------------------------------ -----------------------------------------------------
Signature Date
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL INFORMATION.
10
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 WATER STREET
NEW YORK, NEW YORK 10005
(212) 269-5550 (CALL COLLECT)
OR
TOLL-FREE (800) 735-3568
The Dealer Manager for the Offer is:
PAINEWEBBER INCORPORATED
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
TOLL-FREE (800) 520-5698
OR CALL COLLECT
(212) 713-1425
SEPTEMBER 19, 1995
EX-99.A3
4
NOTICE OF GUARANTEED DELIVERY
1
NOTICE OF GUARANTEED DELIVERY
for
Tender of Shares of Common Stock
of
THE C.R. GIBSON COMPANY
This Notice of Guaranteed Delivery, or one substantially in form equivalent
hereto, must be used to accept the Offer (as defined below) if certificates for
shares of common stock, $0.10 par value per share (the "Shares"), of The C.R.
Gibson Company, a Delaware corporation (the "Company"), are not immediately
available or if the procedure for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary on or prior to the Expiration Date (as defined in the Offer to
Purchase). This Notice of Guaranteed Delivery may be delivered by hand or
facsimile transmission, or mail to the Depositary. See Section 3 of the Offer to
Purchase, dated September 19, 1995 (the "Offer to Purchase"). The method of
delivery is at the option and risk of the tendering stockholders.
THE DEPOSITARY FOR THE OFFER IS:
TRUST COMPANY BANK
By Hand: By Overnight Courier: By Mail:
58 Edgewood Avenue 58 Edgewood Avenue P.O. Box 4625
Room 225 Annex Room 225 Annex Atlanta, Georgia 30302
Atlanta, Georgia 30303 Atlanta, Georgia 30303
By Facsimile:
(404) 332-3875
(404) 332-3966
Confirm By Telephone:
(800) 568-3476
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR
TRANSMISSION OF INSTRUMENTS VIA A FACSIMILE, OTHER THAN AS SET FORTH ABOVE, DOES
NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal or an
Agent's Message and certificates for Shares to the Depositary within the time
period shown herein. Failure to do so could result in a financial loss to such
Eligible Institution.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
2
Ladies and Gentlemen:
The undersigned hereby tenders to Nelson Acquisition Corp., a Delaware
corporation, upon the terms and subject to the conditions set forth in the Offer
to Purchase, and the related Letter of Transmittal (which together constitute
the "Offer"), receipt of which is hereby acknowledged, Shares of the Company,
pursuant to the guaranteed delivery procedure set forth in Section 3 of the
Offer to Purchase.
Number of Shares: SIGN HERE
---------------------------
Certificate No(s) (if available): Name(s) of Record Holder(s):
-------------------------------------------- ------------------------------------------
-------------------------------------------- ------------------------------------------
(Please Print)
If Securities will be tendered by book-entry
transfer: Address:
----------------------------------- ----------------------------------
------------------------------------------
(Zip Code)
Name of Tendering Institution(s) Area Code and Telephone No.
-------------------------------------------- ------------------------------------------
Account No.: at
------------------------------ ------------------------------------------
/ / The Depository Trust Company Signature(s):
/ / Midwest Securities Trust Company -----------------------------
/ / Philadelphia Depository Trust Company
------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a bank, broker, dealer, credit union, savings association
or other entity which is a member in good standing of the Securities Transfer
Agents Medallion Program or a bank, broker, dealer, credit union, savings
association or other entity which is an "eligible guarantor institution," as
such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934,
as amended, guarantees the delivery to the Depositary of the Shares tendered
hereby, together with a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile(s) thereof) and any other required
documents, or an Agent's Message (as defined in the Offer to Purchase) in the
case of a book-entry delivery of Shares, all within three American Stock
Exchange trading days of the date hereof.
Name of Firm: Title:
----------------------------- ------------------------------------
Name:
------------------------------------------ -------------------------------------
(Authorized Signature) (Please print or Type)
Address: Area Code and Telephone No.:
---------------------------------- --------------
DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED
DELIVERY -- CERTIFICATES SHOULD BE SENT WITH THE LETTER OF TRANSMITTAL
Dated: , 1995
-----------------------
2
EX-99.A4
5
FORM OF LETTER TO BROKER, DEALERS, BANKS
1
PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, New York 10019
Toll Free (800) 520-5698
Or Call Collect:
(212) 713-1425
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
THE C.R. GIBSON COMPANY
at
$9.00 NET PER SHARE
by
NELSON ACQUISITION CORP.
a wholly owned subsidiary of
THOMAS NELSON, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, OCTOBER 17, 1995,
UNLESS THE OFFER IS EXTENDED
September 19, 1995
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees
We have been appointed by Nelson Acquisition Corp., a Delaware corporation
("Offeror") and a wholly owned subsidiary of Thomas Nelson, Inc., a Tennessee
corporation ("Parent"), to act as Dealer Manager in connection with Offeror's
offer to purchase all outstanding shares (the "Shares") of common stock, par
value $0.10 per share of The C.R. Gibson Company, a Delaware corporation (the
"Company"), at a price of $9.00 per Share, net to the seller in cash, upon the
terms and subject to the conditions set forth in Offeror's Offer to Purchase,
dated September 19, 1995 (the "Offer to Purchase"), and the related Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer") enclosed herewith. Please furnish copies of the enclosed materials to
those of your clients for whose accounts you hold Shares registered in your name
or in the name of your nominee.
The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the expiration of the Offer a number of
Shares which constitutes at least a majority of the Shares outstanding on a
fully diluted basis.
Enclosed for your information and forwarding to your clients are copies of
the following documents:
1. Offer to Purchase, dated September 19, 1995;
2. Letter of Transmittal to be used by holders of Shares in accepting
the Offer and tendering Shares and for the information of your clients
(facsimile copies of the Letter of Transmittal may be used to tender
Shares);
2
3. Notice of Guaranteed Delivery to be used to accept the Offer if the
Shares and all other required documents are not immediately available or
cannot be delivered to Trust Company Bank (the "Depositary") by the
Expiration Date (as defined in the Offer to Purchase) or if the procedure
for book-entry transfer cannot be completed by the Expiration Date;
4. A letter to stockholders of the Company from Frank A. Rosenberry,
President and Chief Executive Officer of the Company, together with a
Solicitation/Recommendation Statement on Schedule 14D-9 filed with the
Securities and Exchange Commission by the Company;
5. A letter which may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominee, with
space provided for obtaining such clients' instructions with regard to the
Offer;
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. Return envelope addressed to the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, OCTOBER 17, 1995, UNLESS THE OFFER IS EXTENDED.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of certificates
evidencing such Shares (or a confirmation of a book-entry transfer of such
Shares into the Depositary's account at one of the Book-Entry Transfer
Facilities (as defined in the Offer to Purchase)), a Letter of Transmittal (or
facsimile thereof) properly completed and duly executed and any other required
documents in accordance with the instructions contained in the Letter of
Transmittal.
If a holder of Shares wishes to tender Shares, but cannot deliver such
holder's certificates or other required documents, or cannot comply with the
procedure for book-entry transfer, prior to the expiration of the Offer, a
tender of Shares may be effected by following the guaranteed delivery procedure
described in Section 3 of the Offer to Purchase.
We are asking you to contact your clients for whom you hold Shares
registered in your name (or in the name of your nominee) or who hold Shares
registered in their own names. Please bring the Offer to their attention as
promptly as possible. Offeror will not pay any fees or commissions to any
broker, dealer or other person (other than the Dealer Manager, the Depositary
and the Information Agent as described in the Offer) in connection with the
solicitation of tenders of Shares pursuant to the Offer. However, Offeror will
reimburse you for customary mailing and handling expenses incurred by you in
forwarding any of the enclosed materials to your clients. Offeror will pay or
cause to be paid any stock transfer taxes payable with respect to the transfer
of Shares to it, except as otherwise provided in Instruction 6 of the Letter of
Transmittal.
Any inquiries you may have with respect to the Offer and requests for
additional copies of the enclosed material should be addressed to the
Information Agent, D.F. King & Co., Inc. at (800) 735-3568 (toll free) or (212)
269-5550 (collect). You may also contact the undersigned at our address and
telephone number set forth on the back cover page of the Offer to Purchase.
Very truly yours,
PAINEWEBBER INCORPORATED
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF PARENT, OFFEROR, THE COMPANY, THE DEALER
MANAGER, INFORMATION AGENT OR THE DEPOSITARY, OR OF ANY AFFILIATE OF ANY OF
THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR TO MAKE ANY
STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
2
EX-99.A5
6
FORM OF LETTER FROM BROKERS, DEALERS TO CLIENTS
1
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
THE C.R. GIBSON COMPANY
at
$9.00 NET PER SHARE
by
NELSON ACQUISITION CORP.
a wholly owned subsidiary of
THOMAS NELSON, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, OCTOBER 17, 1995
UNLESS THE OFFER IS EXTENDED.
September 19, 1995
To Our Clients:
Enclosed for your consideration is an Offer to Purchase, dated September
19, 1995 (the "Offer to Purchase") and a related Letter of Transmittal (which,
as amended from time to time, together constitute the "Offer") in connection
with the Offer by Nelson Acquisition Corp., a Delaware corporation ("Offeror")
and a wholly owned subsidiary of Thomas Nelson, Inc., a Tennessee corporation,
to purchase all outstanding shares (the "Shares") of common stock, par value
$0.10 per share, of The C.R. Gibson Company, a Delaware corporation (the
"Company"), at a price of $9.00 per Share, net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer.
We are the holder of record of Shares held by us for your account. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares held by us for your account, upon the terms and
subject to the conditions set forth in the Offer.
Your attention is invited to the following:
1. The tender price is $9.00 per Share, net to the seller in cash.
2. The Offer is being made for all outstanding Shares.
3. The Board of Directors of the Company unanimously has determined
that the terms of each of the Offer, the Merger and the Merger Agreement
are fair to, and in the best interests of, the stockholders of the Company,
and recommends that stockholders accept the Offer and tender their Shares
pursuant to the Offer.
2
4. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Tuesday, October 17, 1995, unless the Offer is extended.
5. The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the expiration of the Offer a
number of Shares which constitutes at least a majority of the Shares
outstanding on a fully diluted basis.
6. Tendering shareholders will not be obligated to pay brokerage fees
or commissions or, except as otherwise provided in Instruction 6 of the
Letter of Transmittal, stock transfer taxes with respect to the purchase of
Shares by Offeror pursuant to the Offer.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form contained
in this letter. An envelope in which to return your instructions to us is
enclosed. If you authorize the tender of your Shares, all such Shares will be
tendered unless otherwise specified in your instructions. YOUR INSTRUCTIONS
SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR
BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and is being made to all holders of Shares. Offeror is not aware of
any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. If Offeror becomes aware of
any valid state statute prohibiting the making of the Offer or the acceptance of
Shares pursuant thereto, Offeror will make a good faith effort to comply with
such state statute. If, after such good faith effort, Offeror cannot comply with
such state statute, the Offer will not be made to (nor will tenders be accepted
from or on behalf of) the holders of Shares in such state. In any jurisdiction
where the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of
Offeror by one or more registered brokers or dealers licensed under the laws of
such jurisdiction.
3
Instructions with Respect to
the Offer to Purchase for Cash
all Outstanding Shares of Common Stock
of
THE C.R. GIBSON COMPANY
by
NELSON ACQUISITION CORP.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated September 19, 1995, and the related Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer"), in connection with the offer by Nelson Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of Thomas Nelson, Inc., a Tennessee
corporation, to purchase all outstanding shares (the "Shares") of common stock,
par value $0.10 per share, of The C.R. Gibson Company, a Delaware corporation.
This will instruct you to instruct your nominee to tender the number of
Shares indicated below (or, if no number is indicated below, all Shares) that
are held for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
------------------------------------
Number of Shares to be Tendered: SIGN HERE
Shares*
------------------------------------ ------------------------------------
------------------------------------
Signature(s)
------------------------------------
Dated: , 1995 ------------------------------------
Please type or print name(s)
------------------------------------
------------------------------------
Please type or print address
------------------------------------
Area Code and Telephone Number
------------------------------------
Taxpayer Identification or
Social Security Number
---------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
EX-99.A6
7
FORM OF LETTER TO PARTICIPANTS IN ESOP
1
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
THE C.R. GIBSON COMPANY
at
$9.00 NET PER SHARE
by
NELSON ACQUISITION CORP.
a wholly owned subsidiary of
THOMAS NELSON, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, OCTOBER 17, 1995
UNLESS THE OFFER IS EXTENDED.
September 19, 1995
To Participants in The C.R. Gibson Company Employee Stock Ownership Plan and
Trust:
Enclosed for your consideration is an Offer to Purchase, dated September
19, 1995 (the "Offer to Purchase") and a related Letter of Transmittal (which,
as amended from time to time, together constitute the "Offer") in connection
with the Offer by Nelson Acquisition Corp., a Delaware corporation ("Offeror")
and a wholly owned subsidiary of Thomas Nelson, Inc., a Tennessee corporation,
to purchase all outstanding shares (the "Shares") of common stock, par value
$0.10 per share (the "Common Stock"), of The C.R. Gibson Company, a Delaware
corporation (the "Company"), at a price of $9.00 per Share, net to the seller in
cash, upon the terms and subject to the conditions set forth in the Offer.
OUR NOMINEE IS THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT AS A
PARTICIPANT IN THE COMPANY'S EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST (THE
"PLAN"). A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US THROUGH OUR NOMINEE AS
THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF
TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY
YOU TO TENDER SHARES HELD IN YOUR PLAN ACCOUNT.
We request instructions as to whether you wish to have us instruct our
nominee to tender on your behalf any or all of the Shares held in your Plan
account, upon the terms and subject to the conditions set forth in the Offer.
Your attention is invited to the following:
1. The tender price is $9.00 per Share, net to the seller in cash.
2. The Offer is being made for all outstanding Shares.
3. The Board of Directors of the Company unanimously has determined
that the terms of each of the Offer, the Merger and the Merger Agreement
are fair to, and in the best interests of, the stockholders of
2
the Company, and recommends that stockholders accept the Offer and tender
their Shares pursuant to the Offer.
4. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Tuesday, October 17, 1995, unless the Offer is extended.
5. The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the expiration of the Offer at
least a majority of the Shares outstanding on a fully diluted basis.
6. Tendering shareholders will not be obligated to pay brokerage fees
or commissions or, except as otherwise provided in Instruction 6 of the
Letter of Transmittal, stock transfer taxes with respect to the purchase of
Shares by the Offeror pursuant to the Offer.
If you wish to have us tender any or all of the Shares held in your Plan
account, please so instruct us by completing, executing and returning to us the
instruction form enclosed with this letter and the Substitute Form W-9 by 5:00
p.m., New York City time, on Monday, October 16, 1995, unless the Offer is
extended. If you authorize the tender of such Shares, all such Shares will be
tendered unless otherwise specified in your instructions. An envelope in which
to return your instructions to us is enclosed. YOUR AUTHORIZATION SHOULD BE
FORWARDED TO US IN AMPLE TIME TO PERMIT US TO INSTRUCT OUR NOMINEE TO SUBMIT A
TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and is being made to all holders of Shares. Offeror is not aware of
any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. If Offeror becomes aware of
any valid state statute prohibiting the making of the Offer or the acceptance of
Shares pursuant thereto, Offeror will make a good faith effort to comply with
such state statute. If, after such good faith effort, Offeror cannot comply with
such state statute, the Offer will not be made to (nor will tenders be accepted
from or on behalf of) the holders of Shares in such state. In any jurisdiction
where the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of
Offeror by one or more registered brokers or dealers licensed under the laws of
such jurisdiction.
Fleet Bank, N.A.
as Plan Agent
3
Instructions with Respect to
the Offer to Purchase for Cash
all Outstanding Shares of Common Stock
of
THE C.R. GIBSON COMPANY
by
NELSON ACQUISITION CORP.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated September 19, 1995, and the related Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer"), in connection with the offer by Nelson Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of Thomas Nelson, Inc., a Tennessee
corporation, to purchase all outstanding shares (the "Shares") of common stock,
par value $0.10 per share, of The C.R. Gibson Company, a Delaware corporation.
The undersigned understand(s) that the Offer applies to Shares allocated to the
account of the undersigned in the Company's Employee Stock Ownership Plan and
Trust (the "Plan").
This will instruct you, as Agent for the Plan, to instruct your nominee to
tender the number of Shares indicated below (or, if no number is indicated
below, all Shares) that are held for the Plan account of the undersigned, upon
the terms and subject to the conditions set forth in the Offer.
------------------------------------
Number of Shares to be Tendered in SIGN HERE
my account
Shares*
------------------------------------ ------------------------------------
------------------------------------
Signature(s)
------------------------------------
Dated: , 1995 ------------------------------------
Please type or print name(s)
------------------------------------
------------------------------------
Please type or print address
------------------------------------
Area Code and Telephone Number
------------------------------------
Taxpayer Identification or
Social Security Number
---------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your Plan account are to be tendered, including any additional Shares credited
to your account through the Expiration Date (as defined in the Offer to
Purchase).
MAIL THIS FORM IN THE ENCLOSED REPLY ENVELOPE TO:
Fleet Bank, N.A.
CTEHFO3G
One Constitutional Plaza
Hartford, CT 06115
Attention: Charles Arntsen
4
------------------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: TRUST COMPANY BANK
------------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE
FORM W-9 BOX AT RIGHT AND CERTIFY BY SIGNING
AND DATING BELOW -----------------------------------------
Social Security Number(s)
OR
-----------------------------------------
Employer Identification Number(s)
-------------------------------------------------------------------------------------------------
PART 2 -- Certification -- Under penalties of perjury, I certify that: PART 3 --
Department of the
Treasury Internal (1) the number shown on this form is my correct Taxpayer Identification Awaiting TIN / /
Revenue Service Number (or I am waiting for a number to be issued to me) and
----------------------
Payer's Request (2) I am not subject to backup withholding because (a) I am exempt from
for Taxpayer backup withholding or (b) I have not been notified by the Internal PART 4 --
Identification Revenue Service (the "IRS") that I am subject to backup withholding
Number (TIN) as a result of a failure to report all interest or dividends or Exempt TIN / /
(c) the IRS has notified me that I am no longer subject to backup
withholding.
-------------------------------------------------------------------------------------------------
Certification instructions -- You must cross out item (2) in Part 2 above if you have been notified
by the IRS that you are subject to backup withholding because of under reporting interest or
dividends on your tax returns. However, if after being notified by the IRS that you were subject to
backup withholding you received another notification from the IRS stating that you are no longer
subject to backup withholding, do not cross out such item (2). If you are exempt from backup
withholding, check the box in Part 4 above.
SIGNATURE DATE , 1995
------------------------------------------------------------------------------------------------------------------------------
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b)
I intend to mail or deliver an application in the near future. I understand
that, if I do not provide a taxpayer identification number to the Depositary,
31% of all reportable payments made to me will be withheld, but will be refunded
if I provide a certified taxpayer identification number within 60 days.
----------------------------------- -----------------------------------
Signature Date
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL INFORMATION.
EX-99.A7
8
GUIDELINES AND SUBSTITUTE FORM W-9
1
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the Payer.
---------------------------------------------------------
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF--
---------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, the
first individual on
the account(1)
3. Husband and wife (joint The actual owner of
account) the account or, if
joint funds, the
first individual on
the account(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint account) The adult, or if
the minor is the
only contributor,
the minor(1)
6. Account in the name of guardian The ward, minor, or
or committee for a designated incompetent
ward, minor, or incompetent person(3)
person
7. a. The usual revocable savings The grantor-
trust account (grantor is trustee(1)
also trustee)
b. So-called trust account that The actual owner(1)
is not a legal or valid trust
under State law
---------------------------------------------------------
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--
---------------------------------------------------------
8. Sole proprietorship account The owner(4)
9. A valid trust, estate, or Legal entity (Do
pension trust not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization
account
12. Partnership account held in the The partnership
name of the business
13. Association, club, or other The organization
tax-exempt organization
14. A broker or registered nominee The broker or
nominee
15. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State
or local government, school
district or prison) that
receives agricultural program
payments
--------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner. If the owner does not have an employer
identification number, furnish the owner's social security number.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on interest, dividends, and
broker transactions payments include the following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan, or a custodial account under Section 403(b)(7).
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or any
political subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals.
NOTE: You may be subject to backup withholding if this interest is $600
or more and is paid in the course of the payer's trade or business and you have
not provided your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1993, payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT
YOUR TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE.
EX-99.A8
9
SUMMARY ADVERTISEMENT, WALL STREET JOURNAL 9-19-95
1
EXHIBIT (a)(8)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares. The Offer is being made solely by the Offer to
Purchase and the related Letter of Transmittal and is being made to all
holders of Shares. The Offeror is not aware of any State where the
making of the Offer is prohibited by administrative or judicial action
pursuant to any valid state statute. If the Offeror becomes aware of
any valid state statute prohibiting the making of the Offer or the
acceptance of Shares pursuant thereto, the Offeror will make a good
faith effort to comply with such state statute or seek to have such
state statute declared inapplicable to the Offer. If, after such
good faith effort, the Offeror cannot comply with such state statute,
the Offer will not be made to, nor will tenders be accepted from
or on behalf of, the holders of Shares in such state. In any
jurisdiction where the securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer
shall be deemed to be made on behalf of the Offeror by
PaineWebber Incorporated or one or more registered brokers
or dealers that are licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
THE C.R. GIBSON COMPANY
at
$9.00 Net Per Share
by
Nelson Acquisition Corp.
a wholly owned subsidiary of
THOMAS NELSON, INC.
Nelson Acquisition Corp., a Delaware corporation ("Offeror") and a
wholly owned subsidiary of Thomas Nelson, Inc., a Tennessee corporation
("Parent"), is offering to purchase all outstanding shares (the "Shares") of
common stock, par value $0.10 per share of The C.R. Gibson Company, a Delaware
corporation (the "Company"), at a price of $9.00 per Share, net to the seller
in cash, upon the terms and subject to the conditions set forth in the Offer
to Purchase, dated September 19, 1995 (the "Offer to Purchase"), and in the
related Letter of Transmittal (which, as amended from time to time, together
constitute the "Offer"). Tendering stockholders will not be obligated to pay
brokerage fees or commissions or, subject to Instruction 6 of the Letter of
Transmittal, transfer taxes on the transfer of Shares pursuant to the Offer.
The purpose of the Offer is to acquire for cash as many outstanding Shares as
possible as a first step in acquiring the entire equity interest in the
Company. Following the Offer, Offeror intends to effect the Merger described
below.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON TUESDAY, OCTOBER 17, 1995 UNLESS THE OFFER IS EXTENDED.
2
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES WHICH CONSTITUTES AT LEAST A MAJORITY OF THE SHARES OUTSTANDING ON A
FULLY DILUTED BASIS (THE "MINIMUM CONDITION"). THE OFFER IS ALSO SUBJECT TO
OTHER TERMS AND CONDITIONS. THE OFFER IS NOT SUBJECT TO A FINANCING CONDITION.
OFFEROR AND PARENT HAVE OBTAINED FROM CERTAIN STOCKHOLDERS OF THE COMPANY
AGREEMENTS TO TENDER PURSUANT TO THE OFFER APPROXIMATELY 26.9% OF THE
OUTSTANDING SHARES.
The Offer is being made pursuant to a Tender Offer and Merger
Agreement, dated as of September 13, 1995 (the "Merger Agreement") by and among
Parent, Offeror and the Company. The Merger Agreement provides that, among
other things, as soon as practicable after the purchase of Shares pursuant to
the Offer and the satisfaction of the other conditions set forth in the Merger
Agreement and in accordance with the relevant provisions of the General
Corporation Law of the State of Delaware, Offeror will be merged with and into
the Company (the "Merger"). Following consummation of the Merger, the Company
will continue as the surviving corporation and will be a wholly owned
subsidiary of Parent. At the effective time of the Merger (the "Effective
Time"), each Share issued and outstanding immediately prior to the Effective
Time (other than Shares held in the treasury of the Company or owned by
Offeror, Parent or any direct or indirect wholly owned subsidiary of Parent)
will be cancelled and converted automatically into the right to receive $9.00
in cash, or any higher price that may be paid per Share in the Offer, without
interest.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT
EACH OF THE OFFER AND THE MERGER IS FAIR TO, AND IN THE BEST INTERESTS OF, THE
STOCKHOLDERS OF THE COMPANY, AND UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
For purposes of the Offer, Offeror will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when Offeror gives oral or written notice to Trust Company
Bank (the "Depositary"), of Offeror's acceptance for payment of such Shares
pursuant to the Offer. Upon the terms and subject to the conditions of the
Offer, payment for Shares accepted for payment pursuant to the Offer will be
made by deposit of the purchase price therefor with the Depositary, which will
act as agent for tendering stockholders for the purpose of receiving payments
from Offeror and transmitting such payments to tendering stockholders whose
Shares have been accepted for payment. Under no circumstances will interest on
the purchase price of shares be paid, regardless of any delay in making such
payment. In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of (i) the certificates evidencing such Shares (the "Share Certificates") or
timely confirmation of a book entry transfer of such Shares into the
Depositary's account at one of the Book Entry Transfer Facilities (as defined
in Section 2 of the Offer to Purchase) pursuant to the procedures set forth in
Section 3 of the Offer to Purchase, (ii) the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees and (iii) any other documents required under the Letter of
Transmittal.
Offeror expressly reserves the right, in its sole discretion (but
subject to the terms and conditions of the Merger Agreement), at any time and
from time to time, to extend for any reason the period of time during which the
Offer is open, including the occurrence of any of the conditions specified in
Section 15 of the Offer to Purchase, by giving oral or written notice of such
extension to the Depositary. Any such extension will be followed as promptly
as practicable by the public announcement thereof, such announcement to be made
no later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled expiration date of the Offer. During any such extension,
all Shares previously tendered and not withdrawn will remain subject to the
Offer, subject to the rights of a tendering stockholder to withdraw such
stockholder's Shares.
Tenders of Shares made pursuant to the Offer are irrevocable except
that such Shares may be withdrawn at any time prior to 12:00 Midnight, New York
City time, on Tuesday, October, 17, 1995 (or the latest time and date at which
the Offer, if extended by Offeror, shall expire) and, unless theretofore
accepted for payment by Offeror pursuant to the Offer, may also be withdrawn at
any time after Friday, November 17, 1995. For the withdrawal to be effective,
a written, telegraphic or facsimile transmission notice of withdrawal must be
timely received by the Depositary at its address set forth on the back cover
page of the Offer to Purchase. Any such notice of withdrawal must specify the
name of the person who tendered the Shares to be withdrawn, the number of
Shares to be withdrawn and the name of the registered holder of such Shares if
different from that of the person who tendered such Shares. If Share
Certificates evidencing Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such Share
Certificates, the serial numbers shown on such Share Certificates must be
submitted to the Depositary and the signature(s) on the notice of withdrawal
must be guaranteed by an Eligible Institution (as defined in Section 3 of the
Offer to Purchase) unless such Shares have been tendered for the account of an
Eligible Institution. If Shares have been tendered pursuant to the procedure
for book entry transfer as set forth in Section 3 of the Offer to Purchase, any
notice of withdrawal must specify the name and number of the account at the
Book Entry Transfer Facility to be credited with the withdrawn Shares.
3
All questions as to form and validity (including the time of receipt) of any
notice of withdrawal will be determined by Offeror, in its sole discretion,
whose determination will be final and binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of
the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
The Company has provided Offeror with the Company's stockholder list
and security position listings for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase and the related Letter of Transmittal
will be mailed to record holders of Shares whose names appear on the Company's
stockholder list and will be furnished to brokers, dealers, commercial banks,
trust companies and similar persons whose names, or the names of whose
nominees, appear on the stockholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
Questions and requests for assistance or for additional copies of the
Offer to Purchase and the related Letter of Transmittal and other tender offer
materials may be directed to the Information Agent or Dealer Manager as set
forth below, and copies will be furnished promptly at Offeror's expense. No
fees or commissions will be paid to the brokers, dealers or other persons
(other than the Dealer Manager) for soliciting tenders of Shares pursuant to
the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect:
(212) 269-5550
All Others Call Toll Free:
(800) 735-3568 (Toll Free)
The Dealer Manager for the Offer is:
PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, New York 10019
Toll Free (800) 520-5698
or Call Collect:
(212) 713-1425
September 19, 1995
EX-99.A9
10
TEXT OF PRESS RELEASE
1
EXHIBIT (a)(9)
Contact: Joe L. Powers, Executive Vice President and Secretary,
Thomas Nelson, Inc.
(615) 889-9000, ext. 1300
James M. Harrison, Executive Vice President and Secretary,
The C.R. Gibson Company
(203) 847-4543, ext. 206
THOMAS NELSON, INC.
TO ACQUIRE THE C.R. GIBSON COMPANY
IN CASH TRANSACTION VALUED AT $67 MILLION
NASHVILLE, Tennessee (September 14, 1995) - Thomas Nelson, Inc. (NYSE:TNM) and
The C.R. Gibson Company (AMEX:GIB) today announced that Thomas Nelson has
signed a definitive agreement to acquire all of the outstanding shares of C.R.
Gibson in a cash transaction valued at approximately $67 million.
Thomas Nelson will make a cash tender offer of $9.00 per share,
pursuant to the agreement that has been unanimously approved by C.R. Gibson's
Board of Directors. The tender offer will commence as soon as practicable.
C.R. Gibson, headquartered in Norwalk, Connecticut, was founded in
1870. The company presently manufactures and markets a wide range of paper
gift and stationery products, primarily under the C.R. Gibson(R), Creative
Papers(R), and Clinton Prints(R) brand names. Products include baby and
wedding memory books, stationery, giftwrap, greeting cards and paper
tableware. For the year ended December 31, 1994, C.R. Gibson reported net
revenues of $67.5 million.
Sam Moore, Thomas Nelson's Chairman and President, said, "C.R. Gibson
is a well-established leader in the gift product industry. This acquisition is
another important achievement
.....................MORE.........................
2
Page -2-
News Release
9/14/95
for Thomas Nelson and will result in a significant increase in the product
offerings and distribution channels for our growing gift division. As a
result of the acquisition, our publishing, music and gift divisions will be
approximately equal in size. C.R. Gibson is an excellent fit with Thomas
Nelson and we believe the integration of our businesses will allow the combined
entities to expand the product offerings of gift and gift-related products to
our customers. We are excited about the opportunities provided by this
acquisition."
Frank Rosenberry, President and Chief Executive Officer of C.R.
Gibson, said, "We are pleased that C.R. Gibson will become part of the Thomas
Nelson family and we believe this transaction, which has been unanimously
approved by our Board of Directors, represents a fair offer to our stockholders
and an opportunity for employees to continue to be a part of a growing
organization. Thomas Nelson has given C.R. Gibson's management a strong
mandate to continue to grow and expand. Our companies complement each other in
many ways and we will both be able to offer customers significant new benefits
and features."
Thomas Nelson, Inc. is a leading publisher, producer and distributor of
books and recorded music emphasizing Christian, inspirational and family value
themes, and believes it is the largest commercial publisher of the Bible in
English language translations. The Company also designs and markets a broad
line of gift and stationery products. The Company believes it is the largest
publisher of Christian and inspirational books and the largest producer of
recorded Christian music in the United States.
-END-
EX-99.B1
11
CREDIT AGREEMENT 11-30-92
1
EXHIBIT (b)(1)
EXECUTION COUNTERPART
================================================================================
CREDIT AGREEMENT
DATED AS OF NOVEMBER 30, 1992
AMONG
THOMAS NELSON, INC.,
THE LENDERS LISTED HEREIN,
AND
THIRD NATIONAL BANK IN NASHVILLE
AS AGENT
================================================================================
2
TABLE OF CONTENTS
PAGE
----
ARTICLE I. DEFINITIONS; CONSTRUCTION . . . . . . . . . . . 1
SECTION 1.01. DEFINITIONS . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATION. . . . . . . 18
SECTION 1.03. OTHER DEFINITIONAL TERMS. . . . . . . . . . . . 18
SECTION 1.04. EXHIBITS AND SCHEDULES. . . . . . . . . . . . . 18
ARTICLE II. REVOLVING LOANS . . . . . . . . . . . . . . . . 18
SECTION 2.01. INTENTIONALLY OMITTED . . . . . . . . . . . . . 18
SECTION 2.02. REVOLVING LOAN COMMITMENT . . . . . . . . . . . 18
SECTION 2.03. USE OF PROCEEDS . . . . . . . . . . . . . . . . 19
SECTION 2.04. INTENTIONALLY OMITTED . . . . . . . . . . . . . 19
SECTION 2.05. REVOLVING CREDIT NOTES: REPAYMENT
OF PRINCIPAL. . . . . . . . . . . . . . . . . . 19
SECTION 2.06. INTENTIONALLY OMITTED . . . . . . . . . . . . . 19
SECTION 2.07. VOLUNTARY REDUCTION OF REVOLVING
LOAN COMMITMENTS. . . . . . . . . . . . . . . . 19
SECTION 2.08. MANDATORY REDUCTION OF REVOLVING
LOAN COMMITMENTS. . . . . . . . . . . . . . . . 20
SECTION 2.09. EXTENSION OF CONVERSION DATE AND FINAL
MATURITY DATE . . . . . . . . . . . . . . . . . 20
ARTICLE III. CONVERSION OF REVOLVING CREDIT LOANS
TO TERM LOANS . . . . . . . . . . . . . . . . . 21
SECTION 3.01. TERM LOANS. . . . . . . . . . . . . . . . . . . 21
SECTION 3.02. REPAYMENT OF PRINCIPAL. . . . . . . . . . . . . 21
SECTION 3.03. MANDATORY PREPAYMENTS . . . . . . . . . . . . . 22
ARTICLE IV. GENERAL LOAN TERMS. . . . . . . . . . . . . . . 22
SECTION 4.01. FUNDING NOTICES . . . . . . . . . . . . . . . . 22
SECTION 4.02. DISBURSEMENT OF FUNDS . . . . . . . . . . . . . 23
SECTION 4.03. INTEREST. . . . . . . . . . . . . . . . . . . . 24
SECTION 4.04. INTEREST PERIODS. . . . . . . . . . . . . . . . 25
SECTION 4.05. FEES. . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.06. VOLUNTARY PREPAYMENTS OF BORROWINGS . . . . . . 26
SECTION 4.07. PAYMENTS, ETC . . . . . . . . . . . . . . . . . 27
SECTION 4.08. INTEREST RATE NOT ASCERTAINABLE, ETC. . . . . . 29
SECTION 4.09. ILLEGALITY. . . . . . . . . . . . . . . . . . . 30
SECTION 4.10. INCREASED COSTS . . . . . . . . . . . . . . . . 30
SECTION 4.11. LENDING OFFICES . . . . . . . . . . . . . . . . 32
SECTION 4.12. FUNDING LOSSES. . . . . . . . . . . . . . . . . 32
-i-
3
SECTION 4.13. ASSUMPTIONS CONCERNING FUNDING OF
LIBOR ADVANCES. . . . . . . . . . . . . . . . . 32
SECTION 4.14. APPORTIONMENT OF PAYMENTS . . . . . . . . . . . 32
SECTION 4.15. SHARING OF PAYMENTS, ETC. . . . . . . . . . . . 33
SECTION 4.16. CAPITAL ADEQUACY. . . . . . . . . . . . . . . . 33
SECTION 4.17. BENEFITS TO GUARANTORS. . . . . . . . . . . . . 34
SECTION 4.18. LIMITATION ON CERTAIN PAYMENT OBLIGATIONS . . . 34
ARTICLE VA. CONDITIONS TO BORROWINGS. . . . . . . . . . . . 35
SECTION 5A.01. CONDITIONS PRECEDENT TO INITIAL LOANS . . . . . 35
SECTION 5A.02. CONDITIONS TO ALL LOANS . . . . . . . . . . . . 38
ARTICLE VB. NOTICE PERIOD REGARDING CONDITIONS. . . . . . . 39
ARTICLE VIA. REPRESENTATIONS AND WARRANTIES. . . . . . . . . 40
SECTION 6A.01. CORPORATE EXISTENCE; COMPLIANCE WITH LAW. . . . 40
SECTION 6A.02. CORPORATE POWER; AUTHORIZATION. . . . . . . . . 41
SECTION 6A.03. ENFORCEABLE OBLIGATIONS . . . . . . . . . . . . 41
SECTION 6A.04. NO LEGAL BAR. . . . . . . . . . . . . . . . . . 41
SECTION 6A.05. NO MATERIAL LITIGATION. . . . . . . . . . . . . 41
SECTION 6A.06. INVESTMENT COMPANY ACT, ETC . . . . . . . . . . 41
SECTION 6A.07. MARGIN REGULATIONS. . . . . . . . . . . . . . . 42
SECTION 6A.08. COMPLIANCE WITH ENVIRONMENTAL LAWS. . . . . . . 42
SECTION 6A.09. INSURANCE . . . . . . . . . . . . . . . . . . . 42
SECTION 6A.10. NO DEFAULT. . . . . . . . . . . . . . . . . . . 43
SECTION 6A.11. NO BURDENSOME RESTRICTIONS. . . . . . . . . . . 43
SECTION 6A.12. TAXES . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6A.13. SUBSIDIARIES. . . . . . . . . . . . . . . . . . 43
SECTION 6A.14. FINANCIAL STATEMENTS. . . . . . . . . . . . . . 43
SECTION 6A.15. ERISA . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6A.16. PATENTS, TRADEMARKS, LICENSES, ETC. . . . . . . 45
SECTION 6A.17. OWNERSHIP OF PROPERTY . . . . . . . . . . . . . 45
SECTION 6A.18. INDEBTEDNESS. . . . . . . . . . . . . . . . . . 46
SECTION 6A.19. FINANCIAL CONDITION . . . . . . . . . . . . . . 46
SECTION 6A.20. INTENTIONALLY OMITTED . . . . . . . . . . . . . 46
SECTION 6A.21. LABOR MATTERS . . . . . . . . . . . . . . . . . 47
SECTION 6A.22. PAYMENT OR DIVIDEND RESTRICTIONS. . . . . . . . 47
SECTION 6A.23. DISCLOSURE. . . . . . . . . . . . . . . . . . . 47
ARTICLE VIB. REPRESENTATION AND WARRANTY NOTICE PERIOD . . . 48
ARTICLE VIC. REPRESENTATIONS AND WARRANTIES REGARDING
SCHEDULE 7A.01 SUBSIDIARIES . . . . . . . . . . 48
ARTICLE VIIA. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . 49
-ii-
4
SECTION 7A.01. CORPORATE EXISTENCE, ETC. . . . . . . . . . . . 49
SECTION 7A.02. COMPLIANCE WITH LAWS, ETC . . . . . . . . . . . 49
SECTION 7A.03. PAYMENT OF TAXES AND CLAIMS, ETC. . . . . . . . 49
SECTION 7A.04. KEEPING OF BOOKS. . . . . . . . . . . . . . . . 49
SECTION 7A.05. VISITATION, INSPECTION, ETC . . . . . . . . . . 49
SECTION 7A.06. INSURANCE; MAINTENANCE OF PROPERTIES. . . . . . 50
SECTION 7A.07. REPORTING COVENANTS . . . . . . . . . . . . . . 50
SECTION 7A.08. FINANCIAL COVENANTS . . . . . . . . . . . . . . 55
SECTION 7A.09. NOTICES UNDER CERTAIN OTHER INDEBTEDNESS. . . . 56
SECTION 7A.10. ADDITIONAL CREDIT PARTIES AND COLLATERAL. . . . 56
SECTION 7A.11. TERMINATION OF DESIGNATED SUBSIDIARIES . . . . 56
ARTICLE VIIB. SCHEDULE AMENDMENTS . . . . . . . . . . . . . . 56
ARTICLE VIII. NEGATIVE COVENANTS. . . . . . . . . . . . . . . 57
SECTION 8.01. INDEBTEDNESS. . . . . . . . . . . . . . . . . . 57
SECTION 8.02. LIENS . . . . . . . . . . . . . . . . . . . . . 57
SECTION 8.03. MERGERS, ACQUISITIONS, SALES, ETC . . . . . . . 58
SECTION 8.04. DIVIDENDS, ETC. . . . . . . . . . . . . . . . . 59
SECTION 8.05. INVESTMENTS, LOANS, ETC . . . . . . . . . . . . 59
SECTION 8.06. SALE AND LEASEBACK TRANSACTIONS . . . . . . . . 60
SECTION 8.07. TRANSACTIONS WITH AFFILIATES. . . . . . . . . . 60
SECTION 8.08. OPTIONAL PREPAYMENTS. . . . . . . . . . . . . . 60
SECTION 8.09. CHANGES IN BUSINESS . . . . . . . . . . . . . . 61
SECTION 8.10. ERISA . . . . . . . . . . . . . . . . . . . . . 61
SECTION 8.11. ADDITIONAL NEGATIVE PLEDGES . . . . . . . . . . 61
SECTION 8.12. LIMITATION ON PAYMENT RESTRICTIONS
AFFECTING CONSOLIDATED COMPANIES. . . . . . . . 61
SECTION 8.13. ACTIONS UNDER CERTAIN DOCUMENTS . . . . . . . . 62
ARTICLE IX. EVENTS OF DEFAULT . . . . . . . . . . . . . . . 62
SECTION 9.01. PAYMENTS. . . . . . . . . . . . . . . . . . . . 62
SECTION 9.02. COVENANTS WITHOUT NOTICE. . . . . . . . . . . . 62
SECTION 9.03. OTHER COVENANTS . . . . . . . . . . . . . . . . 63
SECTION 9.04. REPRESENTATIONS . . . . . . . . . . . . . . . . 63
SECTION 9.05. NON-PAYMENTS OF OTHER INDEBTEDNESS. . . . . . . 63
SECTION 9.06. DEFAULTS UNDER OTHER AGREEMENTS . . . . . . . . 63
SECTION 9.07. BANKRUPTCY. . . . . . . . . . . . . . . . . . . 63
SECTION 9.08. ERISA . . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.09. MONEY JUDGMENT. . . . . . . . . . . . . . . . . 64
SECTION 9.10. CHANGE IN CONTROL OF NELSON . . . . . . . . . . 64
SECTION 9.11. DEFAULT UNDER OTHER CREDIT DOCUMENTS. . . . . . 65
SECTION 9.12. ATTACHMENTS . . . . . . . . . . . . . . . . . . 65
SECTION 9.13. ADJUSTMENT TO PRO RATA SHARE. . . . . . . . . . 65
ARTICLE X. THE AGENT . . . . . . . . . . . . . . . . . . . 66
-iii-
5
SECTION 10.01. APPOINTMENT OF AGENT. . . . . . . . . . . . . . 66
SECTION 10.02. AUTHORIZATION OF AGENT WITH RESPECT
TO THE SECURITY DOCUMENTS . . . . . . . . . . . 67
SECTION 10.03. NATURE OF DUTIES OF AGENT . . . . . . . . . . . 67
SECTION 10.04. LACK OF RELIANCE ON THE AGENT . . . . . . . . . 67
SECTION 10.05. CERTAIN RIGHTS OF THE AGENT . . . . . . . . . . 68
SECTION 10.06. RELIANCE BY AGENT . . . . . . . . . . . . . . . 68
SECTION 10.07. INDEMNIFICATION OF AGENT. . . . . . . . . . . . 69
SECTION 10.08. THE AGENT IN ITS INDIVIDUAL CAPACITY. . . . . . 69
SECTION 10.09. HOLDERS OF NOTES. . . . . . . . . . . . . . . . 69
SECTION 10.10. SUCCESSOR AGENT . . . . . . . . . . . . . . . . 70
ARTICLE XI. MISCELLANEOUS . . . . . . . . . . . . . . . . . 70
SECTION 11.01. NOTICES . . . . . . . . . . . . . . . . . . . . 70
SECTION 11.02. AMENDMENTS, ETC . . . . . . . . . . . . . . . . 71
SECTION 11.03. NO WAIVER; REMEDIES CUMULATIVE. . . . . . . . . 71
SECTION 11.04. PAYMENT OF EXPENSES, ETC. . . . . . . . . . . . 72
SECTION 11.05. RIGHT OF SETOFF . . . . . . . . . . . . . . . . 73
SECTION 11.06. BENEFIT OF AGREEMENT. . . . . . . . . . . . . . 74
SECTION 11.07. GOVERNING LAW; SUBMISSION TO JURISDICTION . . . 76
SECTION 11.08. INDEPENDENT NATURE OF LENDERS, RIGHTS . . . . . 77
SECTION 11.09. COUNTERPARTS. . . . . . . . . . . . . . . . . . 77
SECTION 11.10. EFFECTIVENESS; SURVIVAL . . . . . . . . . . . . 77
SECTION 11.11. SEVERABILITY. . . . . . . . . . . . . . . . . . 77
SECTION 11.12. INDEPENDENCE OF COVENANTS . . . . . . . . . . . 78
SECTION 11.13. CHANGE IN ACCOUNTING PRINCIPLES,
FISCAL YEAR OR TAX LAWS . . . . . . . . . . . . 78
SECTION 11.14. HEADINGS DESCRIPTIVE; ENTIRE AGREEMENT. . . . . 78
SECTION 11.15. INTEREST. . . . . . . . . . . . . . . . . . . . 78
SCHEDULES
SCHEDULE 5A.01(H) UCC SEARCH LOCATIONS
SCHEDULE 6A.01 ORGANIZATION AND OWNERSHIP OF
SUBSIDIARIES
SCHEDULE 6A.05 CERTAIN PENDING AND THREATENED
LITIGATION
SCHEDULE 6A.08(A) ENVIRONMENTAL COMPLIANCE
SCHEDULE 6A.08(B) ENVIRONMENTAL NOTICES
SCHEDULE 6A.08(C) ENVIRONMENTAL PERMITS
SCHEDULE 6A.11 BURDENSOME RESTRICTIONS
SCHEDULE 6A.12 TAX FILINGS AND PAYMENTS
SCHEDULE 6A.13 WORD, INCORPORATED AND ITS SUBSIDIARIES
SCHEDULE 6A.14 LEASES OF WORD, INCORPORATED
SCHEDULE 6A.15 EMPLOYEE BENEFIT MATTERS
SCHEDULE 6A.16 PATENT, TRADEMARK, LICENSE, AND
OTHER INTELLECTUAL PROPERTY
MATTERS
SCHEDULE 6A.17 OWNERSHIP OF PROPERTIES
-iv-
6
SCHEDULE 6A.18 REFINANCED INDEBTEDNESS
SCHEDULE 6A.21 LABOR AND EMPLOYMENT MATTERS
SCHEDULE 6A.22 DIVIDEND RESTRICTIONS
SCHEDULE 7A.01 SUBSIDIARIES OF THOMAS NELSON, INC.
EXCLUDED FROM CERTAIN PROVISIONS OF
CREDIT AGREEMENT
SCHEDULE 7A.08 FINANCIAL COVENANT CALCULATIONS
SECOND QUARTER 1992
SCHEDULE 8.01(B) EXISTING INDEBTEDNESS
SCHEDULE 8.02 EXISTING LIENS
EXHIBITS
EXHIBIT A FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
EXHIBIT B INTENTIONALLY OMITTED
EXHIBIT C FORM OF CONTRIBUTION
AGREEMENT
EXHIBIT D FORM OF ESCROW LETTER
EXHIBIT E FORM OF GUARANTY AGREEMENT
EXHIBIT F INTENTIONALLY OMITTED
EXHIBIT G FORM OF REVOLVING CREDIT NOTE
EXHIBIT H FORM OF TERM NOTE
EXHIBIT I FORM OF CLOSING CERTIFICATE
EXHIBIT J FORM OF OPINION OF BASS, BERRY & SIMS
EXHIBIT K FORM OF REVOLVING CREDIT PROMISSORY NOTE
EXHIBIT L FORM OF WORD, INCORPORATED PLEDGE
AGREEMENT
-v-
7
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement") is made and entered into
as of the 30th day of November, 1992, by and among THOMAS NELSON, INC., a
Tennessee corporation ("Nelson"), THIRD NATIONAL BANK IN NASHVILLE, a national
banking association ("TNB"), the other banks and lending institutions listed on
the signature pages hereof and any assignees of TNB or such other banks and
lending institutions that become "Lenders" as provided herein (TNB, and such
other banks, lending institutions and assignees are referred to collectively
herein as the "Lenders"), and THIRD NATIONAL BANK IN NASHVILLE, in its capacity
as agent for the Lenders and each successor agent for such Lenders as may be
appointed from time to time pursuant to Article X hereof (the "Agent");
W I T N E S S E T H:
WHEREAS, Nelson has requested and the Lenders have agreed to
provide certain credit facilities to Nelson on the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, Nelson, the Lenders and the Agent agree upon the
terms and subject to the conditions set forth herein as follows:
ARTICLE I.
DEFINITIONS: CONSTRUCTION
SECTION 1.01. Definitions. In addition to the other terms defined
herein, the following terms used herein shall have the meanings herein
specified (to be equally applicable to both the singular and plural forms of
the terms defined):
"Accepted Commitment" shall have the meaning ascribed to it in Section 4.05(a).
"Accounts" shall mean all of Nelson's accounts, now existing or
hereafter acquired, as that term is defined by the Uniform Commercial Code now
in effect in Tennessee.
"Advance" shall mean any principal amount advanced and remaining
outstanding at any time under the Revolving Loans or the Term Loans, which
Advance shall be made or outstanding as a Base Rate Advance or a LIBOR Advance,
as the case may be.
8
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by, or under common control with, such
Person, whether through the ownership of voting securities, by contract or
otherwise. For purposes of this definition, "control," (including with
correlative meanings, the terms "controlling," "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 that Person.
"Agent" shall mean Third National Bank in Nashville, a national
banking association, and any successor agent appointed pursuant to Section
10.10 hereto.
"Agreement" shall mean this Credit Agreement, as amended,
restated or supplemented from time to time.
"Applicable Base Rate Margin" shall mean, with respect to all
outstanding Borrowings consisting of Base Rate Advances through March 31, 1994,
one percent (1.00%) per annum, and with respect to all outstanding Borrowings
consisting of Base Rate Advances thereafter, the higher relevant percentage
indicated below based on the percentages indicated for Nelson's Interest
Coverage Ratio and Leverage Ratio as determined on the date that is ninety (90)
days after the end of each fiscal year of Nelson based upon the audited
financial statements for the immediately preceding fiscal year, with such
Applicable Base Rate Margin to be immediately effective as of such date with
respect to all outstanding amounts under the Revolving Loans or Term Loans, as
the case may be:
===========================================================================================
Interest
Revolving Term Coverage Leverage
Loans Loans Ratio Ratio
-------------------------------------------------------------------------------------------
0.75% 1.0% less than greater than
2.0:1.0 0.45:1.0
-------------------------------------------------------------------------------------------
0.0% 0.25% greater than less than or equal to
or equal to 0.45:1.0 and greater
2.0:1.0 than 0.35:1.0
and less than 3.2:1.0
-------------------------------------------------------------------------------------------
0.0% 0.0% greater than less than or equal to
or equal to 0.35:1.0
3.2:1.0
===========================================================================================
Notwithstanding the foregoing, in the event Nelson does not
deliver the audited financial statements for the immediately preceding fiscal
year in a manner that permits the determinations
-2-
9
required in the definition of Applicable Base Rate Margin within ninety (90)
days of the end of Nelson's fiscal year, commencing at the end of such ninety
(90) day period and continuing until such audited financial statements are made
available, the Applicable Base Rate Margin shall be the highest rates
applicable to Revolving Loans and Terms Loans, as the case may be, as set forth
in the preceding chart.
"Applicable LIBOR Rate Margin" shall mean, with respect to all
outstanding Borrowings consisting of LIBOR Advances through March 31, 1994, two
and three quarters percent (2.75%) per annum, and with respect to all
outstanding Borrowings consisting of LIBOR Advances thereafter, the higher
relevant percentage indicated below based upon the percentages indicated for
Nelson's Interest Coverage Ratio and Leverage Ratio as determined on the date
that is ninety (90) days after the end of each fiscal year of Nelson based upon
the audited financial statements for the immediately preceding fiscal year,
with such Applicable LIBOR Rate Margin to be immediately effective as of such
date with respect to all outstanding amounts under the Revolving Loans or Term
Loans, as the case may be:
===========================================================================================
Interest
Revolving Loans Term Coverage Leverage
Loans Ratio Ratio
2.50% 2.75% less than greater than 0.45:1.0
2.0:1.0
-------------------------------------------------------------------------------------------
1.50% 1.75% greater than less than or equal to
or equal to 0.45:1.0 and greater
2.0:1.0 than 0.35:1.0
and less than 3.2:1.0
-------------------------------------------------------------------------------------------
1.0% 1.25% greater than less than or equal to
or equal to 0.35:1.0
3.2:1.0
===========================================================================================
Notwithstanding the foregoing, in the event Nelson does not
deliver the audited financial statements for the immediately preceding fiscal
year in a manner that permits the determinations required in the definition of
Applicable LIBOR Rate Margin within ninety (90) days of the end of Nelson's
fiscal year, commencing at the end of such ninety (90) day period and
continuing until such audited financial statements are made available, the
Applicable LIBOR Rate Margin shall be the highest rates applicable to Revolving
Loans and Terms Loans, as the case may be, as set forth in the preceding chart.
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"Asset Sale" shall mean any sale or other disposition (or a
series of related sales or other dispositions), including without limitation,
loss, damage, destruction or taking, by any Consolidated Company to any Person
other than a Consolidated Company, of any property or asset (including capital
stock but excluding the issuance and sale by Nelson of its own capital stock)
having an aggregate Asset Value in excess of $100,000, other than sales or
other dispositions made in the ordinary course of business of any Consolidated
Company.
"Asset Value" shall mean, with respect to any property or asset
of any Consolidated Company as of any particular date, an amount equal to the
greater of (a) the then book value of such property or asset as established in
accordance with GAAP, or (b) the then fair market value of such property or
asset as determined in good faith by the board of directors of such
Consolidated Company.
"Assignment and Acceptance" shall mean an Assignment and
Acceptance Agreement entered into by a Lender and an Eligible Assignee in
accordance with the terms of this Agreement and substantially in the form of
Exhibit A attached hereto.
"Bankruptcy Code" shall mean The Bankruptcy Code of 1978, as
amended and in effect from time to time (11 U.S.C. Section 101 et seq.).
"Base Rate" shall mean the higher of (a) the rate that the Agent
publicly announces from time to time to be its prime lending rate, as in effect
from time to time, or (b) the Federal Funds Rate, as in effect from time to
time, plus one-half of one percent (0.50%) per annum (with any changes in such
rates to be effective as of the date of change any change in such rates). The
Agent's prime lending rate is a reference rate and does not necessarily
represent the lowest or best rate charged to any customers. The Agent may make
commercial loans or other loans at rates of interest at, above or below the
Agent's prime lending rate.
"Base Rate Advance" shall mean an Advance made or outstanding as
a Revolving Loan or a Term Loan, as the case may be, bearing interest based on
the Base Rate.
"Borrowing" shall mean the incurrence by Nelson under any
Facility of Advances of one Type concurrently having the same Interest Period
or the continuation or conversion of an existing Borrowing or Borrowings in
whole or in part.
"Business Day" shall mean any day excluding Saturday, Sunday and
any other day on which banks are required or authorized to close in Nashville,
Tennessee or New York, New York.
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"Change in Control Provision" shall mean any term or provision
contained in any indenture, debenture, note or other agreement or document
evidencing or governing Indebtedness of Nelson evidencing debt or a commitment
to extend loans in excess of $1,000,000.00 which requires or permits the
holder(s) of such Indebtedness of Nelson to require that such Indebtedness of
Nelson be redeemed, repurchased, defeased, prepaid or repaid, either in whole
or in part, or the maturity of such Indebtedness of Nelson to be accelerated in
any respect, as a result of a change in ownership of the capital stock of
Nelson or voting rights with respect thereto.
"Closing Date" shall mean the date on or before November 30,
1992, on which the initial Loans are made and the conditions set forth in
Article VA are satisfied.
"Consolidated Companies" shall mean, collectively, Nelson and all
of its Subsidiaries, including Word, Incorporated and its Subsidiaries.
"Consolidated EBIT" shall mean, for any fiscal period of Nelson,
an amount equal to (a) the sum for such fiscal period of its Consolidated Net
Income (Loss) plus, to the extent subtracted in determining such Consolidated
Net Income (Loss), provisions for (i) taxes based on income, (ii) Consolidated
Interest Expense, and (iii) charges taken in conformity with FASB-106, minus
(b) any items of gain (or plus any items of loss) that were (A) not realized in
the ordinary course of business, and (B) the result of any sale of assets.
"Consolidated Interest Expense" shall mean, for any fiscal period
of Nelson, total interest expense of the Consolidated Companies (including
without limitation, interest expense attributable to capitalized leases)
determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income (Loss)" shall mean, for any fiscal
period of Nelson, the net income (or loss) of the Consolidated Companies on a
consolidated basis for such period (taken as a single accounting period)
determined in conformity with GAAP, but excluding therefrom (to the extent
otherwise included therein) any income (or loss) of any Person accrued prior to
the date such Person becomes a Subsidiary of Nelson or is merged into or
consolidated with any Consolidated Company or all or substantially all of such
Person's assets are acquired by any Consolidated Company.
"Consolidated Net Worth" shall mean, as of any date of
determination, Shareholders' Equity of Nelson.
"Contractual Obligation" of any Person shall mean any provision
of any security issued by such Person or of any
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agreement, instrument or undertaking under which such Person is obligated or by
which it or any of the property owned by it is bound.
"Contribution Agreement" shall mean the Contribution Agreement
executed by each of the Guarantors, substantially in the form of Exhibit C
attached hereto, as the same may be amended, restated or supplemented from time
to time.
"Conversion Date" shall mean the date on which the Revolving Loan
Commitments shall terminate, April 30, 1996, unless further extended in
accordance with Section 2.09, with all amounts outstanding thereunder to be
paid in full or converted to a Term Loan in accordance with Section 3.01
hereof.
"Creditanstalt - Bankverein Adjusted Pro Rata Share" shall equal
the quotient of the following formula:
(Creditanstalt - Bankverein's Pro Rata Share of
the outstanding principal amount
under the Facilities
-----------------------------------------------
(Total Outstanding Principal)
"Credit Documents" shall mean, collectively, this Agreement, the
Notes, the Guaranty Agreement, the Word, Incorporated Pledge Agreement and all
other Security Documents, if any.
"Credit Parties" shall mean, collectively, each of Nelson, the
Guarantors and every other Person who from time to time executes a Security
Document with respect to all or any portion of the Obligations.
"Default" shall mean any condition or event that, with notice or
lapse of time or both, would constitute an Event of Default.
"DOL" shall have the meaning ascribed to it in Section
7A.07(j)(iv).
"Dollar" and "U.S. Dollar" and the sign "$" shall mean lawful
money of the United States of America.
"Eligible Assignee" shall mean (a) a commercial bank organized
under the laws of the United States, or any state thereof, having total assets
in excess of $1,000,000,000 or any commercial finance or asset based lending
Affiliate of any such commercial bank and (b) any Lender or any Affiliate of
any Lender.
"Environmental Laws" shall mean all federal, state and local
statutes, laws, codes, regulations, rules and ordinances, and all orders or
decrees issued, promulgated or approved thereunder,
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now or hereafter in effect (including, without limitation, those with respect
to asbestos or asbestos containing material or exposure to asbestos or asbestos
containing material), relating to, regulating or imposing liability or
standards of conduct concerning (a) pollution or protection of the environment,
(b) emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals or industrial toxic or hazardous constituents,
substances or wastes, including without limitation, any Hazardous Substance,
petroleum including crude oil or any fraction thereof, any petroleum product or
other waste, chemicals or substances regulated by any Environmental Law into
the environment (including without limitation, ambient air, surface water,
ground water, land surface or subsurface strata), (c) the manufacture,
processing, distribution, use, generation, treatment, storage, disposal,
transport or handling of any Hazardous Substance, petroleum including crude oil
or any fraction thereof, any petroleum product or other waste, chemicals or
substances regulated by any Environmental Law, or (d) underground storage tanks
and related piping, and emissions, discharges and releases or threatened
releases therefrom, such Environmental Laws to include, without limitation (i)
the Clean Air Act (42 U.S.C. Section 7401 et seq.), (ii) the Clean Water Act
(33 U.S.C. Section 1251 et sea.), (iii) the Resource Conservation and Recovery
Act (42 U.S.C. Section 6901 et seq.), (iv) the Toxic Substances Control Act
(15 U.S.C. Section 2601 et seq.), (v) the Comprehensive Environmental
Response, Compensation and Liability Act, as amended by the Superfund
Amendments and Reauthorization Act (42 U.S.C. Section 9601 et seq.), (vi) any
"Superfund" or "Superlien" law, including without limitation the Tennessee
Hazardous Waste Management Acts of 1977 and of 1983, as amended Tennessee Code
Annotated Section 68-212-101 et seq. and Section 68-212-201 et seq., and
(vii) all applicable national and local laws or regulations with respect to
environmental control.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended and in effect from time to time.
"ERISA Affiliate" shall mean, with respect to any Person, each
trade or business (whether or not incorporated) that is a member of a group of
which that Person is a member and that is under common control within the
meaning of the regulations promulgated under Section 414 of the Tax Code.
"Escrow Letter" shall mean a letter agreement between Nelson and
the Agent substantially in the form of Exhibit D attached hereto.
"Event of Default" shall have the meaning ascribed to it in
Article IX.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute thereto.
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"Executive Officer" shall mean with respect to any Person, the
president, vice presidents, chief financial officer, treasurer, secretary and
any Person holding comparable offices or duties.
"Facility" or "Facilities" shall mean the Revolving Loan
Commitments or the Term Loans, as the context may indicate.
"Facility Fee" has the meaning ascribed to it in Section 4.05(a).
"FASB-106" shall mean Financial Accounting Standards Board
Statement No. 106, as in effect on the date of this Agreement, specifying
applicable accounting principles with respect to accrual of the expected cost
of providing post retirement benefits to employees or their dependents.
"Federal Funds Rate" shall mean for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with member banks
of the Federal Reserve System arranged by Federal funds brokers, as published
for such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of Atlanta, or, if such rate is not
so published for any day that is a Business Day, the average of the quotations
for such day on such transactions received by the Agent from three (3) Federal
funds brokers of recognized standing selected by the Agent.
"Final Maturity Date" shall mean the earlier of (a) November 30,
1999, unless further extended in accordance with Section 2.09, and (b) the date
on which all amounts outstanding under this Agreement have been declared or
have automatically become due and payable pursuant to the provisions of Article
IX.
"First American National Bank Adjusted Pro Rata Share" shall
equal the quotient of the following formula:
(First American National Bank's Pro Rata Share of
the outstanding principal amount under the
Facilities + the outstanding principal amount
under the First American National Bank
Letter of Credit Facility
-------------------------------------------------
(Total Outstanding Principal)
"First American National Bank Letter of Credit Facility" shall
mean that certain letter of credit facility evidenced by the Amended and
Restated Revolving Credit Note executed July 15, 1992 by Nelson to the order of
First American National Bank.
"First National Bank of Louisville Adjusted Pro Rata Share" shall
equal the quotient of the following formula:
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(First National Bank of Louisville's Pro Rata
Share of the outstanding principal amount under
the Facilities + the outstanding principal amount
under the First National Bank of Louisville
Letter of Credit Facility
-------------------------------------------------
(Total Outstanding Principal)
"First National Bank of Louisville Letter of Credit Facility"
shall mean that certain $6,000,000 commercial letter of credit facility
pursuant to which First National Bank of Louisville issues commercial trade
letters of credit for the account of Nelson, which facility shall mature
September 30, 1993.
"Fixed Charge Coverage Ratio" shall mean, as of the last day of
any fiscal period of Nelson, the ratio of (a) the sum of Consolidated Net
Income plus, to the extent subtracted in determining such Consolidated Net
Income, depreciation and amortization expense to (b) the sum of (i) cash
dividends paid, (ii) capital expenditures, and (iii) principal payments due in
the following twelve (12) months, in each case determined on a consolidated
basis in accordance with GAAP. In computing the amount of capital expenditures
for purposes of this definition, the amount of capital expenditures relating to
the indebtedness evidenced and/or secured by (A) that certain Promissory Note
in the original principal amount of $5,000,000 executed March 31, 1992 by
Nelson to the order of TNB, (B) that certain Construction Loan Agreement
executed March 31, 1992 by and between Nelson and TNB, and (C) that certain
Tennessee Deed of Trust, Assignment of Rents and Fixture Filing executed by
Nelson for the benefit of TNB, of record in Book 8589, page 428, Register's
Office for Davidson County, Tennessee, shall be excluded.
"Funded Debt" shall mean all Indebtedness for money borrowed,
Indebtedness evidenced or secured by purchase money Liens, capitalized leases,
conditional sales contracts and similar title retention debt instruments,
including any current maturities of such Indebtedness that by its terms matures
more than one year from the date of any calculation thereof and/or that is
renewable or extendable at the option of the obligor to a date beyond one (1)
year from such date of calculation. The calculation of Funded Debt shall
include all Funded Debt of the Consolidated Companies, plus all Funded Debt of
other Persons to the extent guaranteed by a Consolidated Company, to the extent
supported by a letter of credit issued for the account of a Consolidated
Company, or as to which and to the extent which a Consolidated Company or its
assets otherwise have become liable for payment thereof.
"GAAP" shall mean generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such
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other entity as may be approved by a significant segment of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
"Guarantors" shall mean, collectively, all of Nelson's
Subsidiaries, including without limitation, Word, Incorporated (upon its
acquisition by Nelson), and their respective successors and permitted assigns,
but excluding those Subsidiaries of Nelson set forth on Schedule 7A.01.
"Guaranty" shall mean any contractual obligation, contingent or
otherwise, of a Person with respect to any Indebtedness or other obligation or
liability of another Person, including without limitation, any such
Indebtedness, obligation or liability directly or indirectly guaranteed,
endorsed, co-made or discounted or sold with recourse by that Person, or in
respect of which that Person is otherwise directly or indirectly liable,
including Contractual Obligations (contingent or otherwise) arising through any
agreement to purchase, repurchase or otherwise acquire such Indebtedness,
obligation or liability or any security therefor, or any agreement to provide
funds for the payment or discharge thereof (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or to maintain
solvency, assets, level of income or other financial condition or to make any
payment other than for value received. The amount of any Guaranty shall be
deemed to be an amount equal to the stated or determinable amount of the
primary obligation in respect of which guaranty is made or, if not so stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Guaranty Agreement" shall mean, collectively, the joint and
several Guaranty Agreement executed by each of the Guarantors in favor of the
Lenders and the Agent, substantially in the form of Exhibit E attached hereto,
as the same may be amended, restated or supplemented from time to time.
"Hazardous Substance" shall have the meaning assigned to that
term in the Comprehensive Environmental Response Compensation and Liability Act
of 1980, as amended by the Superfund Amendments and Reauthorization Acts of
1986.
"Indebtedness" of any Person shall mean, without duplication (a)
all obligations of such Person that in accordance with GAAP would be shown on
the balance sheet of such Person as a liability (including, without limitation,
obligations for borrowed money and for the deferred purchase price of property
or services, and obligations evidenced by bonds, debentures, notes or other
similar instruments); (b) all rental obligations under leases required to be
capitalized under GAAP; (c) all Guaranties of such Person (including contingent
reimbursement obligations under
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undrawn letters of credit); (d) Indebtedness of others secured by any Lien upon
property owned by such Person, whether or not assumed; and (e) obligations or
other liabilities under currency contracts, interest rate hedging contracts or
similar agreements or combinations thereof.
"Indemnitee" shall have the meaning ascribed to it in Section
11.04(c).
"Interest Coverage Ratio" shall mean, as of the end of any fiscal
period of Nelson, the ratio of (a) Consolidated EBIT to (b) the sum of
Consolidated Interest Expense.
"Interest Period" shall have the meaning set forth in Section
4.04.
"Inventory" shall mean all of Nelson's inventory, raw materials,
work in process, finished goods, parts, goods of Nelson held on consignment,
returned goods or inventory, goods held for sale or lease or furnished or to be
furnished under contracts of service in which Nelson now has or hereafter
acquires any right and all additions, substitutions and replacements thereof
wherever located together with all goods and materials used or usable in
manufacturing, processing, packaging or shipping the Inventory.
"Investment" shall mean, when used with respect to any Person,
any direct or indirect advance (excluding advances made to authors or artists
in the ordinary course of business), loan or other extension of credit (other
than the creation of receivables in the ordinary course of business) or capital
contribution by such Person (by means of transfers of property to others or
payments for property or services for the account or use of others, or
otherwise) to any Person, or any direct or indirect purchase or other
acquisition by such Person of, or of a beneficial interest in, capital stock,
partnership interests, bonds, notes, debentures or other securities issued by
any other Person.
"IRS" shall have the meaning ascribed in Section 7A.07(j)(iv).
"Lender" or "Lenders" shall mean TNB, the other banks and lending
institutions listed on the signature pages hereof and each assignee thereof, if
any, pursuant to Section 11.06(c).
"Lending Office" shall mean for each Lender the office such
Lender may designate in writing from time to time to Nelson and the Agent with
respect to each Type of Loan.
"Leverage Ratio" shall mean the ratio, expressed as a percentage,
of Senior Funded Debt to Total Capital for the Consolidated Companies.
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"LIBOR" shall mean, for any Interest Period, the offered rates
for deposits in U.S. Dollars for a period comparable to the Interest Period and
in an amount comparable to the Agent's portion of such Advances determined by
the Agent from Telerate Page 3750 as of 11:00 A.M. (London, England time) on
the day that is two Business Days prior to the first day of the Interest
Period. If two or more of such rates appear on the Telerate Page, the rate for
that Interest Period shall be the arithmetic mean of such rates, rounded, if
necessary, to the next higher 1/16 of 1.0%, if the rate is not such a multiple,
and in either case as such rates may be adjusted for any applicable reserve
requirements. If such rate is unavailable on such service, then such rate shall
be determined by and based on any other interest rate reporting service of
recognized standing designated in writing by the Agent to Nelson and the other
Lenders.
"LIBOR Advance" shall mean any Advance made or outstanding as a
Revolving Loan or a Term Loan, as the case may be, bearing interest at LIBOR.
"Lien" shall mean any mortgage, pledge, security interest, lien,
charge, hypothecation, assignment, deposit arrangement, title retention,
preferential property right, trust or other arrangement having the practical
effect of the foregoing and shall include the interest of a vendor or lessor
under any conditional sale agreement, capitalized lease or other title
retention agreement.
"Loans" shall mean, collectively, the Revolving Loans and the
Term Loans.
"Margin Regulations" shall mean Regulation G, Regulation T,
Regulation U and Regulation X of the Board of Governors of the Federal Reserve
System, as the same may be in effect from time to time.
"Materially Adverse Effect" shall mean any materially adverse
change in (a) the business, results of operations, financial condition, assets
or prospects of the Consolidated Companies, taken as a whole, (b) the ability
of Nelson to perform its obligations under this Agreement, or (c) the ability
of the other Credit Parties (taken as a whole) to perform their respective
obligations under the Credit Documents.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"NationsBank of Texas, N.A. Adjusted Pro Rata Share" shall equal
the quotient of the following formula:
(NationsBank of Texas, N.A.'s Pro Rata Share of
the outstanding principal amount under the Facilities
-----------------------------------------------------
(Total Outstanding Principal)
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"Nelson" shall mean Thomas Nelson, Inc., a Tennessee corporation,
its successors and permitted assigns.
"Net Proceeds" shall mean, with respect to any Asset Sale, all
cash, including (a) cash receivables (when received) by way of deferred payment
pursuant to a promissory note, a receivable or otherwise (other than interest
payable thereon), and (b) with respect to Asset Sales resulting from the loss,
damage, destruction or taking of property, the proceeds of insurance
settlements and condemnation awards (other than the portion of the proceeds of
such settlements and such awards that are used to repair, replace, improve or
restore the item of property in respect of which such settlement or award was
paid provided that the recipient of such proceeds enters into a binding
contractual obligation to effect such repair, replacement, improvement or
restoration within six (6) months of such loss, damage or destruction and
completes such repair, replacement, improvement or restoration within twelve
(12) months of such loss, damage, destruction or taking) as and when received
in cash, in either case, received by any Consolidated Company as a result of or
in connection with such transaction, net of reasonable sale expenses, fees and
commissions incurred, and taxes paid or expected to be payable within the
succeeding 12-month period in connection therewith, and net of any payment
required to be made with respect to the outstanding principal amount of,
premium or penalty, if any, and interest on any Indebtedness (other than the
Loans) secured by a Lien (to the extent permitted by Section 8.02) upon the
asset sold in such Asset Sale.
"Notes" shall mean, collectively, the Revolving Credit Notes and
the Term Notes.
"Notice of Borrowing" shall have the meaning ascribed to it in
Section 4.01(a).
"Notice of Change" shall have the meaning ascribed to it in
Article VIIB.
"Notice of Conversion/Continuation" shall have the meaning
ascribed to it in Section 4.01(b).
"Notice of Extension" shall have the meaning ascribed to it in
Section 2.09.
"Notice Period" shall have the meaning ascribed to it in Article
VB.
"Obligations" shall mean all amounts owing to the Agent or any
Lender pursuant to the terms of this Agreement or any other Credit Document,
including without limitation, all Loans (including all principal and interest
payments due thereunder), fees, expenses, indemnification and reimbursement
payments, indebtedness, liabilities, and obligations of the Credit Parties,
direct or
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indirect, absolute or contingent, liquidated or unliquidated, now existing or
hereafter arising, together with all renewals, extensions, modifications or
refinancings thereof.
"Payment Office" shall mean, at any time for any Lender, the
Payment Office set forth opposite such Lender's name on the signature pages
hereof, as the same may be amended pursuant to Section 11.02.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or
any successor thereto.
"Person" shall mean any individual, partnership, firm,
corporation, association, joint venture, trust or other entity, or any
government or political subdivision or agency, department or instrumentality
thereof.
"Plan" shall mean any "employee benefit plan" (as defined in
Section 3(3) of ERISA), including, but not limited to, any defined benefit
pension plan, profit sharing plan, money purchase pension plan, savings or
thrift plan, stock bonus plan, employee stock ownership plan, Multiemployer
Plan, or any plan, fund, program, arrangement or practice providing for medical
(including post-retirement medical), hospitalization, accident, sickness,
disability, or life insurance benefits.
"Prescribed Forms" shall mean such duly executed forms or
statements, and in such number of copies, which may, from time to time, be
prescribed by law and which, pursuant to applicable provisions of (a) an income
tax treaty between the United States and the country of residence of the Lender
providing the form or statement, (b) the Tax Code, or (c) any applicable rule
or regulation under the Tax Code, permit Nelson to make payments hereunder for
the account of such Lender free, or subject to a reduced rate, of deduction or
withholding of income or similar taxes.
"Pro Rata Share" shall mean, with respect to each of the
Revolving Loan Commitments of each Lender and each Loan to be made by and each
payment (including, without limitation, any payment of principal, interest or
fees) to be made to each Lender, the percentage designated as such Lender's Pro
Rata Share of such Revolving Loan Commitments, such Loans or such payments, as
applicable, set forth under the name of such Lender on the respective signature
page for such Lender, in each case as such Pro Rata Share may change from time
to time as a result of assignments or amendments made pursuant to this
Agreement.
"Refinanced Indebtedness" shall mean the Indebtedness of the
Consolidated Companies to be paid on the Closing Date with the proceeds of the
initial Borrowings under the Revolving Loan Commitments as more particularly
described on Schedule 6A.18.
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"Required Lenders" shall mean at any time prior to the Conversion
Date, Lenders holding at least sixty-six and two-thirds percent (66-2/3%) of
the then aggregate amount of the Revolving Loan Commitments or, following the
Conversion Date, Lenders holding at least sixty-six and two-thirds percent
(66-2/3%) of the aggregate outstanding Term Loans.
"Requirement of Law" for any person shall mean the articles or
certificate of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or a court or other governmental authority, in
each case applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject.
"Revolving Credit Notes" shall mean, collectively, the promissory
notes evidencing the Revolving Loans in the form attached hereto as Exhibit G.
"Revolving Loan Commitment" shall mean, at any time for any
Lender, the amount of the Revolving Loan Commitment set forth opposite such
Lender's name on the signature pages hereof, as the same may be increased or
decreased from time to time as a result of any reduction thereof pursuant to
Sections 2.07 or 2.08, any assignment thereof pursuant to Section 11.06, or any
amendment thereof pursuant to Section 11.02.
"Revolving Loans" shall mean, collectively, the revolving credit
loans made to Nelson by the Lenders pursuant to Section 2.02.
"Security Documents" shall mean, collectively, the Guaranty
Agreement, the Word, Incorporated Pledge Agreement and each other guaranty
agreement, mortgage, deed of trust, security agreement, pledge agreement or
other security or collateral document guaranteeing or securing the Obligations,
as the same may be amended, restated or supplemented from time to time.
"Senior Funded Debt" shall mean all Funded Debt minus the
Subordinated Debt.
"Shareholders' Equity" shall mean, with respect to any Person as
at any date of determination, shareholders' equity of such Person determined in
accordance with GAAP.
"Subordinated Debt" shall mean other Indebtedness of Nelson
subordinated to all obligations of Nelson or any other Credit Party arising
under this Agreement, the Notes, the Guaranty Agreement and all other Credit
Documents on terms and conditions satisfactory in all respects to the Agent and
the Required Lenders, including without limitation, with respect to interest
rates, payment terms, maturities, amortization schedules, covenants, defaults,
remedies
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and subordination provisions, as evidenced by the written approval of the Agent
and Required Lenders.
"Subsidiary" shall mean, with respect to any Person, any
corporation or other entity (including, without limitation, partnerships, joint
ventures, and associations) regardless of its jurisdiction of organization or
formation, at least a majority of the total combined voting power of all
classes of voting stock or other ownership interests of which shall, at the
time as of which any determination is being made, be owned by such Person,
either directly or indirectly through one or more other Subsidiaries.
"Take-Out" shall have the meaning ascribed to it in Section 2.06.
"Tax Code" shall mean the Internal Revenue Code of 1986, as
amended and in effect from time to time.
"Taxes" shall mean any present or future taxes, levies, imposts,
duties, fees, assessments, deductions, withholdings or other charges of
whatever nature, including without limitation, income, receipts, excise,
property, sales, transfer, license, payroll, withholding, social security and
franchise taxes now or hereafter imposed or levied by the United States, or any
state, local or foreign government or by any department, agency or other
political subdivision or taxing authority thereof or therein and all interest,
penalties, additions to tax and similar liabilities with respect thereto.
"Telerate" shall mean, when used in connection with any
designated page and LIBOR, the display page so designated on the Dow Jones
Telerate Service (or such other page as may replace that page on that service
for the purpose of displaying rates comparable to LIBOR).
"Term Loans" shall mean, collectively, the term loans that may,
subject to the terms and conditions hereof, repay all amounts outstanding
pursuant to the Revolving Loan Commitments on the Conversion Date pursuant to
Section 3.01.
"Term Notes" shall mean, collectively, the promissory notes
evidencing the Term Loans in the form attached hereto as Exhibit H.
"TNB" shall mean Third National Bank in Nashville, a national
banking association.
"TNB Five Million Dollar Revolving Credit Facility" shall have
the meaning ascribed to it in Section 8.01(g).
"TNB Letter of Credit Facility" shall mean that certain
$4,000,000 commercial letter of credit facility pursuant to which
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TNB issues commercial trade letters of credit for the account of Nelson, which
facility shall mature September 30, 1993.
"TNB Adjusted Pro Rata Share" shall equal the quotient of the
following formula:
(TNB's Pro Rata Share of the outstanding principal
amount under the Facilities + the outstanding
principal amount under the TNB Five Million Dollar
Revolving Credit Facility + the outstanding
principal amount under the TNB Letter of Credit Facility
--------------------------------------------------------
(Total Outstanding Principal)
"Total Capital" shall mean the sum of Funded Debt and
Consolidated Net Worth of the Consolidated Companies.
"Total Commitment" shall mean, for any Lender at any time prior
to the Conversion Date, such Lender's Revolving Loan Commitment and at any time
following the Conversion Date, the outstanding amount of such Lender's Term
Loan, and "Total Commitments" shall mean, for all Lenders at any time, the sum
of the Total Commitment of all Lenders.
"Total Outstanding Principal" shall mean the outstanding
principal amount under the Facilities, plus the outstanding principal amount
under the TNB Five Million Dollar Revolving Credit Facility, plus the
outstanding principal amount under the TNB Letter of Credit Facility, plus the
outstanding principal amount under the First American National Bank Letter of
Credit Facility, plus the outstanding principal amount under the First National
Bank of Louisville Letter of Credit Facility.
"Type" of Borrowing shall mean a Borrowing consisting of Base
Rate Advances or LIBOR Advances.
"Word, Incorporated Corrections" shall have the meaning ascribed
to it in Article VIB.
"Word, Incorporated Information" shall have the meaning ascribed
to it in Article VB.
"Word, Incorporated Pledge Agreement" shall mean that certain
Pledge Agreement executed in favor of the Agent, substantially in the form of
Exhibit L attached hereto, providing for the grant of a first-priority Lien on
all outstanding common stock of Word, Incorporated, as the same may be amended,
restated or supplemented from time to time.
"Working Capital" shall mean, as of the date of any determination
for the Consolidated Companies, (a) current assets of the Consolidated
Companies, minus (b) current liabilities of the Consolidated Companies
(excluding the current portion of Funded
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Debt), in each case as determined on a consolidated basis in accordance with
GAAP.
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATION. Unless
otherwise defined or specified herein, all accounting terms shall be construed
herein, all accounting determinations hereunder shall be made, all financial
statements required to be delivered hereunder shall be prepared, and all
financial records shall be maintained in accordance with GAAP; provided,
however, that compliance with the financial covenants and calculations set
forth in Section 7A.08, Article VIII and elsewhere herein, and in the
definitions used in such covenants and calculations, shall be calculated, made
and applied in accordance with GAAP as in effect on the date of this Agreement
applied on a basis consistent with the preparation of the financial statements
referred to in Section 6A.14 unless and until Nelson and the Required Lenders
enter into an agreement with respect thereto in accordance with Section 11.13.
SECTION 1.03. OTHER DEFINITIONAL TERMS. The words "hereof,"
"herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and the words Article, Section, Schedule, Exhibit
and like references are to this Agreement unless otherwise specified.
SECTION 1.04. EXHIBITS AND SCHEDULES. All Exhibits and Schedules
attached hereto are by reference made a part hereof.
ARTICLE II.
REVOLVING LOANS
SECTION 2.01. Intentionally Omitted.
SECTION 2.02. REVOLVING LOAN COMMITMENT. (a) Subject to and upon
the terms and conditions herein set forth, each Lender severally agrees to make
to Nelson from time to time on and after the Closing Date, but prior to the
Conversion Date, Revolving Loans in an aggregate amount outstanding at any time
not to exceed such Lender's Revolving Loan Commitment. Nelson shall be entitled
to repay and reborrow Revolving Loans in accordance with the provisions hereof.
(b) Each Revolving Loan shall, at the option of Nelson, be
made, continued as or converted into part of one or more Borrowings that shall
consist entirely of Base Rate Advances and LIBOR Advances. Each Borrowing of
Revolving Loans comprised of LIBOR Advances shall not be less than $5,000,000
or a greater integral multiple of $500,000, and each Borrowing of Revolving
Loans comprised of Base Rate Advances shall be not less than
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$250,000 or a greater integral multiple of $100,000. At no time shall the
number of Borrowings outstanding under this Article II of LIBOR Advances exceed
eight (8).
SECTION 2.03. USE OF PROCEEDS. The proceeds of the Revolving
Loans shall be used solely for the following purposes:
(a) Approximately $24,000,000 shall be used
initially to repay Refinanced Indebtedness of the Consolidated
Companies on the Closing Date; and
(b) Approximately $22,000,000 shall be used
initially to acquire all of the outstanding common stock of Word,
Incorporated, including the cost of such common stock and any and
all acquisition costs associated therewith, including attorneys'
fees and expenses.
(c) All other amounts shall be used as working
capital and for other general corporate purposes, including
acquisitions and capital expenditures of the Consolidated
Companies.
SECTION 2.04. Intentionally Omitted.
SECTION 2.05. REVOLVING CREDIT NOTES: REPAYMENT OF PRINCIPAL. (a)
Nelson's obligations to pay the principal of and interest on the Revolving
Loans to each Lender shall be evidenced by the records of the Agent and such
Lender and by the Revolving Credit Note payable to such Lender (or the assignor
of such Lender) completed in conformity with this Agreement.
(b) All outstanding principal amounts under the Revolving
Loans shall be due and payable in full on the Conversion Date, subject to the
provisions of Section 3.01.
SECTION 2.06. Intentionally Omitted.
SECTION 2.07. VOLUNTARY REDUCTION OF REVOLVING LOAN COMMITMENTS.
Subject to Section 2.06 upon at least three (3) Business Days prior telephonic
notice (promptly confirmed in writing) to the Agent, Nelson shall have the
right, without premium or penalty, to terminate the Revolving Loan Commitments,
in part or in whole, provided that (a) any such termination shall apply to
proportionately and permanently reduce the Revolving Loan Commitments of each
of the Lenders, (b) any prepayment of LIBOR Advances must be in minimum
principal amounts of $5,000,000 and in multiples of $500,000, and any
prepayment of Base Rate Advances must be in minimum principal amounts of
$250,000 and in multiples of $100,000, and (c) no such reduction shall be
permitted that would require a prepayment that is not permitted by Section
4.06. If the aggregate outstanding amount of the Revolving Loans exceeds the
amount of the Revolving Loan Commitments as so reduced, Nelson
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shall immediately repay the Revolving Loans by an amount equal to such excess,
together with all accrued but unpaid interest on such excess amount and any
amounts due under Section 4.12 hereof.
SECTION 2.08. MANDATORY REDUCTION OF REVOLVING LOAN COMMITMENTS.
Subject to Section 2.06, no mandatory reduction shall be required pursuant to
this Section 2.08 until the aggregate amount of Asset Sales (based on the Asset
Values thereof but excluding Asset Sales resulting from loss, damage,
destruction or taking where the proceeds thereof are utilized so as to be
excluded from the definition of Net Proceeds) occurring after November 30,
1992, exceeds $2,500,000. Within ten (10) Business Days after each date on or
prior to the Conversion Date on which any Consolidated Company receives any Net
Proceeds as a result of or in connection with an Asset Sale by any Consolidated
Company, the Revolving Loan Commitments shall be permanently and ratably
reduced by an amount equal to one hundred percent (100%) of such Net Proceeds
plus interest accrued and unpaid on the amount of such prepayment. Any such
reduction of the Revolving Loan Commitments shall apply as a proportional and
permanent reduction of the Revolving Loan Commitments of each of the Lenders.
If the aggregate outstanding amount of the Revolving Loans exceeds the amount
of the Revolving Loan Commitments as so reduced, Nelson shall immediately repay
the Revolving Loans by an amount equal to such excess. Nothing in this Section
2.08 shall be deemed to authorize any Asset Sale not permitted by Section 8.03.
Each mandatory prepayment of Revolving Loans pursuant to this Section 2.08
shall be applied first to Base Rate Advances to the full extent thereof before
application to LIBOR Advances; provided, however, that, so long as no Default
or Event of Default has occurred and is continuing, in lieu of application of
such prepayment to LIBOR Advances prior to the expiration of the respective
Interest Periods with respect thereto, Nelson, at its option, may execute an
Escrow Letter with respect to such prepayment and deposit with the Agent funds
equal to the amount of such prepayment for application in accordance with the
terms of such Escrow Letter.
SECTION 2.09. EXTENSION OF CONVERSION DATE AND FINAL MATURITY
DATE. (a) As long as no Default or Event of Default has occurred and is
continuing, Nelson shall have the right to notify Agent in writing at its
Payment Office at least sixty (60) Business Days prior to the Conversion Date
of Nelson's desire to extend the Conversion Date for a one (1) year period (a
"Notice of Extension"). Each Notice of Extension shall request an extension to
the Conversion Date of a one (1) year period, no more, no less, provided,
however, Nelson may, but shall not be obligated to, submit an unlimited number
of Notices of Extensions to Agent prior to the Conversion Date provided such
Notices of Extension comply with this Section 2.09.
(b) The Agent shall promptly give each Lender notice in
writing of its receipt of any Notice of Extension. Within twenty
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(20) Business Days of Agent's receipt of the Notice of Extension, Agent shall
notify Nelson in writing of the Lenders' acceptance or rejection of such Notice
of Extension. The Notice of Extension shall only be accepted upon Agent's
receipt from one hundred percent (100%) of the Lenders of their approval of the
Notice of Extension. The Lenders' determination shall be final, conclusive and
binding upon all parties hereto.
(c) Once Nelson's Notice of Extension has been agreed to and
accepted by one hundred percent (100%) of the Lenders and the Agent has advised
Nelson of such determination in accordance with Section 2.09(b), such Notice of
Conversion shall be irrevocable.
(d) In the event there is a one (1) year extension in the
Conversion Date pursuant to the terms of this Section 2.09, there shall be a
corresponding one (1) year extension to the Final Maturity Date automatically
without further amendment to this Agreement, provided the Obligations are
unsecured.
(e) The Agent's and Lenders' review of any Notice of
Extension shall in no way obligate the Lenders to agree to extend the
Conversion Date in accordance with such Notice of Extension. The acceptance of
any one (1) Notice of Extension by the Lenders shall in no way obligate the
Lenders to agree to or accept any future Notices of Extensions received by
Agent from Nelson.
ARTICLE III
CONVERSION OF REVOLVING CREDIT LOANS TO TERM LOANS
SECTION 3.01. TERM LOANS. (a) Subject to and upon the terms and
conditions herein set forth, on the Conversion Date, provided that there exists
no Default or Event of Default, Nelson may satisfy its obligation to repay the
principal amount of the then outstanding Revolving Loans by executing and
delivering to each of the Lenders a Term Note in accordance with the provisions
of Section 3.01(b).
(b) Each Term Note shall be dated the Conversion Date and
shall be payable to the applicable Lender in a principal amount equal to such
Lender's Revolving Loans outstanding on the Conversion Date.
SECTION 3.02. REPAYMENT OF PRINCIPAL. Nelson shall repay the Term
Loans in fifteen (15) consecutive equal quarterly installments beginning May
31, 1996. All Term Loans, if not sooner paid, shall be due and payable in full
on the Final Maturity Date.
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SECTION 3.03. MANDATORY PREPAYMENTS. Subject to Section 2.06, no
mandatory prepayment shall be required pursuant to this Section 3.03 until the
aggregate amount of Asset Sales (based on the Asset Values thereof but
excluding Asset Sales resulting from loss, damage, destruction or taking where
the proceeds thereof are utilized so as to be excluded from the definition of
Net Proceeds) occurring after November 30, 1992 exceeds $2,500,000. Within ten
(10) Business Days after each date after the Conversion Date on which any
Consolidated Company receives any Net Proceeds as a result of or in connection
with an Asset Sale by any Consolidated Company, the Term Loans outstanding
under Section 3.01 shall be proportionately prepaid by an amount equal to one
hundred percent (100%) of such Net Proceeds. All such prepayments under this
Section 3.03 shall be applied in each case against all remaining scheduled
amortization payments in inverse order of maturity. Nothing in this Section
3.03 shall be deemed to authorize any Asset Sale not permitted by Section 8.03
of this Agreement. Each mandatory prepayment of Term Loans pursuant to this
Section 3.03 shall be applied first to Base Rate Advances to the full extent
thereof before application to LIBOR Advances; provided, however, that, so long
as no Default or Event of Default has occurred and is continuing, in lieu of
application of such prepayment to LIBOR Advances prior to the expiration of the
respective Interest Periods with respect thereto, Nelson, at its option, may
execute an Escrow Letter with respect to such prepayments and deposit with the
Agent funds equal to such prepayments for application in accordance with the
terms of such Escrow Letter.
ARTICLE IV.
GENERAL LOAN TERMS
SECTION 4.01. FUNDING NOTICES. (a) Whenever Nelson desires to
make a Borrowing with respect to the Revolving Loan Commitments (other than one
resulting from a conversion or continuation pursuant to Section 4.01(b)), it
shall give the Agent prior written notice (or telephonic notice promptly
confirmed in writing) of such Borrowing (a "Notice of Borrowing"), such Notice
of Borrowing to be given prior to 11:00 A.M. (local time for the Agent) at its
Payment Office (i) one (1) Business Day prior to the requested date of such
Borrowing in the case of Base Rate Advances, and (ii) two (2) Business Days
prior to the requested date of such Borrowing in the case of LIBOR Advances.
Notices received after 11:00 A.M. shall be deemed received on the next Business
Day. Each Notice of Borrowing shall be irrevocable and shall specify the
aggregate principal amount of the Borrowing, the date of Borrowing (which shall
be a Business Day), and whether the Borrowing is to consist of Base Rate
Advances or LIBOR Advances.
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(b) Whenever Nelson desires to convert all or a portion of an
outstanding Borrowing under the Revolving Credit Commitments or a portion of
the Term Loans, which Borrowing consists of Base Rate Advances or LIBOR
Advances, into one or more Borrowings consisting of Advances of another Type,
or to continue outstanding a Borrowing consisting of LIBOR Advances for a new
Interest Period, it shall give the Agent at least one (1) Business Day's prior
written notice (or telephonic notice promptly confirmed in writing) of each
such Borrowing being converted into or continued as Base Rate Advances, and at
least two (2) Business Days prior written notice (or telephonic notice promptly
confirmed in writing) of each such Borrowing to be converted into or continued
as LIBOR Advances. Such notice (a "Notice of Conversion/Continuation") shall be
given prior to 11:00 A.M (local time for the Agent) on the date specified at
the Payment Office of the Agent. Each such Notice of Conversion/Continuation
shall be irrevocable and shall specify the aggregate principal amount of the
Advances to be converted or continued, the date of such conversion or
continuation, whether the Advances are being converted into or continued as
Base Rate Advances or LIBOR Advances and (in the case of LIBOR Advances) the
Interest Period applicable thereto. If, upon the expiration of any Interest
Period in respect of any Borrowing, Nelson shall have failed to deliver the
Notice of Conversion/Continuation, Nelson shall be deemed to have elected to
convert or continue such Borrowing to a Borrowing consisting of Base Rate
Advances. So long as any Executive Officer of Nelson has knowledge that any
Default or Event of Default shall have occurred and be continuing, no Borrowing
may be converted into or continued as (upon expiration of the current Interest
Period) LIBOR Advances unless the Agent and each of the Lenders shall have
otherwise consented in writing. No conversion of any Borrowing of LIBOR
Advances shall be permitted except on the last day of the Interest Period in
respect thereof.
(c) Without in any way limiting Nelson's obligation to
confirm in writing any telephonic notice, the Agent may act without liability
upon the basis of telephonic notice believed by the Agent in good faith to be
from Nelson prior to receipt of written confirmation. In each such case, Nelson
hereby waives the right to dispute the Agent's record of the terms of such
telephonic notice.
(d) The Agent shall promptly give each Lender notice by
telephone (confirmed in writing) or by telex, telecopy or facsimile
transmission of the matters covered by the notices given to the Agent pursuant
to this Section 4.01 with respect to the Revolving Credit Commitments and the
Term Loans.
SECTION 4.02. DISBURSEMENT OF FUNDS. (a) No later than noon
(local time for the Agent) on the date of each Borrowing pursuant to the
Revolving Loan Commitments (other than one resulting from a conversion or
continuation pursuant to Section 4.01(b)), each Lender will make available its
Pro Rata Share of the amount of such Borrowing in immediately available funds
at the Payment Office of
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the Agent. The Agent will make available to Nelson the aggregate of the amounts
(if any) so made available by the Lenders to the Agent in a timely manner by
crediting such amounts to Nelson's demand deposit account maintained with the
Agent or at Nelson's option, to effect a wire transfer of such amounts to
Nelson's account specified by an authorized representative of Nelson by the
close of business on such Business Day.
(b) Unless the Agent shall have been notified by any Lender
prior to the date of a Borrowing that such Lender does not intend to make
available to the Agent such Lender's portion of the Borrowing to be made on
such date, the Agent may assume that such Lender will make such amount
available to the Agent on such date and the Agent may make available to Nelson
a corresponding amount. If such corresponding amount is not in fact made
available to the Agent by such Lender on the date of Borrowing, the Agent shall
be entitled to recover such corresponding amount on demand from such Lender
together with interest at the Federal Funds Rate. If such Lender does not pay
such corresponding amount forthwith upon the Agent's demand therefor, the Agent
shall promptly notify Nelson, and Nelson shall immediately pay such
corresponding amount to the Agent together with interest at the rate specified
for the Borrowing which includes such amount paid and any amounts due under
Section 4.12 hereof. Nothing in this Section 4.02(b) shall be deemed to relieve
any Lender from its obligation to fund its Total Commitments hereunder or to
prejudice any rights that Nelson may have against any Lender as a result of any
default by such Lender hereunder.
(c) All Borrowings under the Revolving Loan Commitments shall
be loaned by the Lenders on the basis of their Pro Rata Share of the Revolving
Loan Commitments. No Lender shall be responsible for any default by any other
Lender in its obligations hereunder, and each Lender shall be obligated to make
the Loans provided to be made by it hereunder, regardless of the failure of any
other Lender to fund its Total Commitments hereunder.
SECTION 4.03. INTEREST. (a) Nelson agrees to pay interest in
respect of all unpaid principal amounts of the Revolving Loans and Term Loans
from the respective dates such principal amounts were advanced to maturity
(whether by acceleration, notice of prepayment or otherwise) at rates per annum
equal to the applicable rates indicated below:
(i) For Base Rate Advances -- The Base Rate plus
the Applicable Base Rate Margin;
(ii) For LIBOR Advances -- LIBOR plus the Applicable
LIBOR Rate Margin.
(b) Overdue principal and, to the extent not prohibited by
applicable law, overdue interest, in respect of the Revolving
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Loans, Term Loans and all other overdue amounts owing hereunder shall bear
interest from each date that such amounts are overdue at a rate equal to the
higher of (i) the Base Rate plus an additional two percent (2.0%) per annum, or
(ii) the interest rate otherwise applicable to such amount plus two percent
(2.0%) per annum.
(c) Interest on each Loan shall accrue from and including
the date of such Loan to but excluding the date of any repayment thereof;
provided that, if a Loan is repaid on the same day made, one day's interest
shall be paid on such Loan. Interest on all outstanding Base Rate Advances
shall be payable monthly in arrears on the last calendar day of each calendar
month each year. Interest on all outstanding LIBOR Advances shall be payable on
the last day of each Interest Period applicable thereto, and, in the case of
LIBOR Advances having an Interest Period in excess of three (3) months, on each
day that occurs every three (3) months after the initial date of such Interest
Period. Interest on all Loans shall be payable on any conversion of any
Advances comprising such Loans into Advances of another Type, prepayment (on
the amount prepaid), at maturity (whether by acceleration, notice of prepayment
or otherwise) and, after maturity, on demand.
SECTION 4.04. INTEREST PERIODS. In connection with the making or
continuation of, or conversion into, each Borrowing of LIBOR Advances, Nelson
shall select an interest period (each an "Interest Period") to be applicable to
such LIBOR Advances, which Interest Period shall be either a one (1), two (2),
three (3) or six (6) month period; provided that:
(a) The initial Interest Period for any Borrowing of
LIBOR Advances shall commence on the date of such Borrowing
(including the date of any conversion from a Borrowing consisting
of Advances of another Type) and each Interest Period occurring
thereafter in respect of such Borrowing shall commence on the day
on which the next preceding Interest Period expires;
(b) If any Interest Period would otherwise expire on a
day that is not a Business Day, such Interest Period shall expire
on the next succeeding Business Day, provided that if any
Interest Period in respect of LIBOR Advances would otherwise
expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business
Day;
(c) Any Interest Period in respect of LIBOR Advances
that begins on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period shall, subject to Section 4.04(d), expire on the
last Business Day of such calendar month;
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(d) No Interest Period shall extend beyond any date upon
which any principal payment is due with respect to the Term
Loans, unless the aggregate principal amount of Term Loans that
are Base Rate Advances, or that have Interest Periods that will
expire on or before the date of the respective payment or
prepayment, is equal to or in excess of the amount of any
principal payment to be made;
(e) No Interest Period with respect to the Loans shall
extend beyond the Conversion Date or the Final Maturity Date.
SECTION 4.05. FEES. (a) Nelson shall pay to the Agent, for the
account of and distribution of the respective Pro Rata Share to each Lender, a
facility fee equal to (i) .25% of the commitment amount of the Facilities
accepted by Nelson (the "Accepted Commitment"), which fee shall be deemed to
have been earned at the time of such acceptance, and (ii) .25% of the
commitment amount of the Facilities closed on the Closing Date in accordance
with the terms of this Agreement (collectively, the "Facility Fee"). The
Facility Fee shall be paid upon the earlier to occur of (A) the Closing Date,
or (B) cancellation of the Accepted Commitment.
(b) Intentionally Omitted.
(c) Nelson shall pay to the Agent, for the account of and
distribution of the respective Pro Rata Share to each Lender, a commitment fee
for the period commencing on the Closing Date and continuing up to but
excluding the Conversion Date, computed at a rate equal to one-half of one
percent (0.50%) per annum on the average daily unused portion of the Revolving
Loan Commitments of such Lenders, computed quarterly, such fee being payable
quarterly in arrears on the last calendar day of each fiscal quarter of Nelson
and on the Conversion Date.
(d) Nelson shall pay to the Agent an annual administrative
fee in an amount equal to .05% per annum of the amount committed under the
Loans, payable quarterly in advance on the Closing Date and on the first day of
each quarter thereafter as long as any of the Obligations remain outstanding.
SECTION 4.06. VOLUNTARY PREPAYMENTS OF BORROWINGS. (a) Nelson
may, at its option, prepay Borrowings consisting of Base Rate Advances at any
time in whole, or from time to time in part, in amounts aggregating $250,000 or
any greater integral multiple of $100,000, by paying the principal amount to be
prepaid together with interest accrued and unpaid thereon to the date of
prepayment. Those Borrowings consisting of LIBOR Advances may be prepaid, at
Nelson's option, in whole, or from time to time in part, in amounts aggregating
$2,500,000 or any greater integral multiple of $500,000, by paying the
principal amount to be prepaid, together with interest accrued and unpaid
thereon to the date of prepayment,
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and all compensation payments pursuant to Section 4.12 if such prepayment is
made on a date other than the last day of an Interest Period applicable
thereto. Each such optional prepayment shall be applied in accordance with
Section 4.06(c).
(b) Nelson shall give written notice (or telephonic notice
confirmed in writing) to the Agent of any intended prepayment of the Revolving
Loans or Term Loans (i) not less than one (1) Business Day prior to any
prepayment of Base Rate Advances, and (ii) not less than two (2) Business Days
prior to any prepayment of LIBOR Advances. Such notice, once given, shall be
irrevocable. Upon receipt of such notice of prepayment pursuant to the first
sentence of this Section 4.06(b), the Agent shall promptly notify each Lender
of the contents of such notice and of such Lender's share of such prepayment.
(c) Nelson, when providing notice of prepayment pursuant to
Section 4.06(b), may designate the Types of Advances and the specific Borrowing
or Borrowings that are to be prepaid, provided that (i) if any prepayment of
LIBOR Advances made pursuant to a single Borrowing of the Revolving Loans or
Term Loans shall reduce the outstanding Advances made pursuant to such
Borrowing to an amount less than $2,500,000, such Borrowing shall immediately
be converted into Base Rate Advances; and (ii) each prepayment made pursuant to
a single Borrowing shall be applied pro rata among the Loans comprising such
Borrowing. In the absence of a designation by Nelson, the Agent shall, subject
to the foregoing, make such designation in its sole discretion. All voluntary
prepayments shall be applied to the payment of interest before application to
principal and shall be applied against scheduled amortization payments in the
inverse order of maturity.
SECTION 4.07. PAYMENTS, ETC. (a) Except as otherwise specifically
provided herein, all payments under this Agreement and the other Credit
Documents shall be made without defense, set-off or counterclaim to the Agent,
for the account of and distribution of the respective Pro Rata Share to each
Lender except in the case of payments made under Section 4.05(d), which shall
be made solely to Agent, not later than 11:00 A.M. (local time for the Agent)
on the date when due and shall be made in Dollars in immediately available
funds at its Payment Office.
(b)(i) All such payments shall be made free and clear of
and without deduction or withholding for any Taxes in respect of
this Agreement, the Notes or other Credit Documents, or any
payments of principal, interest, fees or other amounts payable
hereunder or thereunder (but excluding, except as provided in
Section 4.07(b)(iii) hereof, (A) any Taxes imposed on the overall
net or gross income of the Lenders pursuant to the laws of the
jurisdictions with taxing authority over such Lenders, (B) any
franchise or similar taxes imposed on the Lenders
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pursuant to the laws of the jurisdictions with taxing authority
over such Lenders (other than the state of Tennessee), but only
where such franchise or similar taxes are imposed in lieu of
Taxes on the overall net or gross income of the Lenders, and (C)
any franchise or similar taxes imposed on the Lenders pursuant to
the laws of the state of Tennessee). If any Taxes are so levied
or imposed, Nelson agrees (I) to pay the full amount of such
Taxes, and such additional amounts as may be necessary so that
every net payment of all amounts due hereunder and under the
Notes and other Credit Documents, after withholding or deduction
for or on account of any such Taxes (including additional sums
payable under this Section 4.07), will not be less than the full
amount provided for herein had no such deduction or withholding
been required, (II) to make such withholding or deduction, and
(III) to pay the full amount deducted to the relevant authority
in accordance with applicable law. Nelson will furnish to the
Agent and each Lender, within thirty (30) days after the date the
payment of any Taxes is due pursuant to applicable law, certified
copies of tax receipts evidencing such payment by Nelson. Nelson
will indemnify and hold harmless the Agent and each Lender and
reimburse the Agent and each Lender upon written request for the
amount of any Taxes so levied or imposed and paid by the Agent or
Lender and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or
not such Taxes were correctly or illegally asserted. A
certificate as to the amount of such payment by such Lender or
the Agent, absent manifest error, shall be final, conclusive and
binding for all purposes.
(ii) Notwithstanding Section 4.07(b)(i), Nelson
shall be entitled, to the extent it is required to do so by law,
to deduct or withhold income or other similar Taxes imposed by
the United States of America from interest, fees or other amounts
payable hereunder for the account of any Lender other than a
Lender who (A) is a domestic corporation (as such term is defined
in Section 7701 of the Tax Code) for federal income tax purposes,
or (B) has the Prescribed Forms on file with Nelson for the
applicable year to the extent deduction or withholding of such
Taxes is not required as a result of the filing of such
Prescribed Forms, provided that if Nelson shall so deduct or
withhold any such Taxes, it shall provide a statement to the
Agent and such Lender setting forth the amount of such Taxes so
deducted or withheld, the applicable rate and any other
information or documentation that such Lender may reasonably
request for assisting such Lender to obtain any allowable credits
or deductions for the Taxes so deducted or withheld in the
jurisdiction or jurisdictions in which such Lender is subject to
tax.
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(iii) Nelson shall also reimburse the Agent and each
Lender, upon written request, for any Taxes imposed (including,
without limitation, Taxes imposed on the overall gross or net
income of the Agent or such Lender pursuant to the laws of the
jurisdictions with taxing authority over Agent or such Lender) as
the Agent or such Lender shall determine are payable by the Agent
or such Lender in respect of amounts paid by or on behalf of
Nelson to or on behalf of the Agent or such Lender pursuant to
Section 4.07(b)(i).
(c) Subject to Section 4.04(b), whenever any payment to be
made hereunder or under any Note shall be stated to be due on a day that is not
a Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest thereon shall
be payable at the applicable rate during such extension.
(d) All computations of interest and fees shall be made on
the basis of a year of three hundred and sixty (360) days for the actual number
of days (including the first day but excluding the last day) occurring in the
period for which such interest or fees are payable (to the extent computed on
the basis of days elapsed). Interest on Base Rate Advances shall be calculated
based on the Base Rate from and including the date of such Loan to but
excluding the date of the repayment or conversion thereof. Interest on LIBOR
Advances shall be calculated as to each Interest Period from and including the
first day thereof to but excluding the last day thereof. Each determination by
the Agent of an interest rate or fee hereunder shall be made in good faith and,
except for manifest error, shall be final, conclusive and binding for all
purposes.
(e) Payment by Nelson to the Agent in accordance with the
terms of this Agreement shall, as to Nelson, constitute payment to the Lenders
under this Agreement.
SECTION 4.08. INTEREST RATE NOT ASCERTAINABLE, ETC. In the event
that the Agent, in the case of LIBOR, shall have determined (which
determination shall be made in good faith and, absent manifest error, shall be
final, conclusive and binding upon all parties) that on any date for
determining LIBOR for any Interest Period, by reason of any changes arising
after the date of this Agreement affecting the London interbank market or the
Agent's position in such market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in the
definition of LIBOR, then, and in any such event, the Agent shall forthwith
give notice (by telephone confirmed in writing) to Nelson and to the Lenders of
such determination and a summary of the basis for such determination. Until the
Agent notifies Nelson that the circumstances giving rise to the notice
described herein no longer exist, the obligations of the Lenders to make or
permit portions of the Revolving Loans or Term Loans to remain outstanding
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past the last day of then current Interest Periods as LIBOR Advances shall be
suspended, and such affected Advances shall bear the same interest as Base Rate
Advances.
SECTION 4.09. ILLEGALITY. (a) In the event that any Lender shall
have determined (which determination shall be made in good faith and, absent
manifest error, shall be final, conclusive and binding upon all parties) at any
time that the making or continuance of any LIBOR Advance has become unlawful by
compliance by such Lender in good faith with any applicable law, governmental
rule, regulation, guideline or order (whether or not having the force of law
and whether or not failure to comply therewith would be unlawful), then, in any
such event, the Lender shall give prompt notice (by telephone confirmed in
writing) to Nelson and to the Agent of such determination and a summary of the
basis for such determination (which notice the Agent shall promptly transmit to
the other Lenders).
(b) Upon the giving of the notice to Nelson referred to in
Section 4.09(a), (i) Nelson's right to request and such Lender's obligation to
make LIBOR Advances shall be immediately suspended, and such Lender shall make
an Advance as part of the requested Borrowing of LIBOR Advances as a Base Rate
Advance, which Base Rate Advance shall, for all other purposes, be considered
part of such Borrowing, and (ii) if the affected LIBOR Advance or Advances are
then outstanding, Nelson shall immediately, or if permitted by applicable law,
no later than the date permitted thereby, upon at least one Business Days
written notice to the Agent and the affected Lender, convert each such Advance
into a Base Rate Advance or Advances, provided that if more than one Lender is
affected at any time, then all affected Lenders must be treated the same
pursuant to this Section 4.09(b).
SECTION 4.10. INCREASED COSTS. (a) If by reason of (i) after the
date hereof, the introduction of or any change (including, without limitation,
any change by way of imposition or increase of reserve requirements) in or in
the interpretation of any law or regulation, or (ii) the compliance with any
guideline or request from any central bank or other governmental authority or
quasi-governmental authority exercising control over banks or financial
institutions generally (whether or not having the force of law):
(A) any Lender (or its applicable Lending Office)
shall be subject to any tax, duty or other charge with respect to
its LIBOR Advances or its obligation to make LIBOR Advances, or
the basis of taxation of payments to any Lender of the principal
of or interest on its LIBOR Advances or its obligation to make
LIBOR Advances shall have changed (except for changes in the tax
on the overall gross or net income of such Lender imposed by the
jurisdictions with taxing authority over such Lender); or
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(B) any reserve (including, without limitation, any
reserve imposed by the Board of Governors of the Federal Reserve
System), special deposit or similar requirement against assets
of, deposits with or for the account of, or credit extended by,
any Lender's applicable Lending Office shall be imposed or deemed
applicable or any other condition affecting its LIBOR Advances or
its obligation to make LIBOR Advances shall be imposed on any
Lender or its applicable Lending Office or the London interbank
market;
and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining LIBOR Advances (except to
the extent already included in the determination of LIBOR for LIBOR Advances),
or there shall be a reduction in the amount received or receivable by such
Lender or its applicable Lending office, then Nelson shall from time to time
(subject, in the case of certain Taxes, to the applicable provisions of Section
4.07(b)), upon written notice from and demand by such Lender on Nelson (with a
copy of such notice and demand to the Agent), pay to the Agent for the account
of such Lender within ten (10) days after the date of such notice and demand,
additional amounts sufficient to indemnify such Lender against such increased
cost. A certificate as to the amount of such increased cost, submitted to
Nelson and the Agent by such Lender in good faith and accompanied by a
statement prepared by such Lender describing in reasonable detail the basis for
and calculation of such increased cost, shall, except for manifest error, be
final, conclusive and binding for all purposes.
(b) If any Lender shall advise the Agent that at any time,
because of the circumstances described in Section 4.10(a)(i) or (ii) or any
other circumstances beyond such Lender's reasonable control arising after the
date of this Agreement affecting such Lender or the London interbank market or
such Lender's position in such market, LIBOR as determined by the Agent will
not adequately and fairly reflect the cost to such Lender of funding its LIBOR
Advances, then, and in any such event:
(i) the Agent shall forthwith give notice (by
telephone confirmed in writing) to Nelson and to the other
Lenders of such advice;
(ii) Nelson's right to request and such Lender's
obligation to make or permit portions of the Loans to remain
outstanding past the last day of the then current Interest
Periods as LIBOR Advances shall be immediately suspended; and
(iii) such Lender shall make a Loan as part of the
requested Borrowing of LIBOR Advances as a Base Rate Advance,
which such Base Rate Advance shall, for all other purposes, be
considered part of such Borrowing.
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SECTION 4.11. LENDING OFFICES. Each Lender agrees that, if
requested by Nelson, it will use reasonable efforts (subject to overall policy
considerations of such Lender) to designate an alternate Lending Office with
respect to any of its LIBOR Advances affected by the matters or circumstances
described in Sections 4.07(b), 4.08, 4.09 or 4.10 to reduce the liability of
Nelson or avoid the results provided thereunder, so long as such designation is
not disadvantageous to such Lender as determined by such Lender, which
determination if made in good faith, shall be conclusive and binding on all
parties hereto. Nothing in this Section 4.11 shall affect or postpone any of
the obligations of Nelson or any right of any Lender provided hereunder.
SECTION 4.12. FUNDING LOSSES. Nelson shall compensate each
Lender, upon its written request to Nelson (which request shall set forth the
basis for requesting such amounts in reasonable detail and which request shall
be made in good faith and, absent manifest error, shall be final, conclusive
and binding upon all of the parties hereto), for all losses, expenses and
liabilities (including, without limitation, any interest paid by such Lender to
lenders of funds borrowed by it to make or carry its LIBOR Advances, in either
case to the extent not recovered by such Lender in connection with the
reemployment of such funds), which the Lender may sustain: (a) if for any
reason (other than a default by such Lender) a borrowing of, or conversion to
or continuation of, LIBOR Advances to Nelson does not occur on the date
specified therefor in a Notice of Borrowing, Notice of Conversion/Continuation
(whether or not withdrawn), (b) if any repayment (including mandatory
prepayments and any conversions pursuant to Section 4.09(b)) of any LIBOR
Advances to Nelson occurs on a date that is not the last day of an Interest
Period applicable thereto, or (c), if, for any reason, Nelson defaults in its
obligation to repay its LIBOR Advances when required by the terms of this
Agreement.
SECTION 4.13. ASSUMPTIONS CONCERNING FUNDING OF LIBOR ADVANCES.
Calculation of all amounts payable to a Lender under this Article IV shall be
made as though that Lender had actually funded its relevant LIBOR Advances
through the purchase of deposits in the relevant market bearing interest at the
rate applicable to such LIBOR Advances in an amount equal to the amount of the
LIBOR Advances and having a maturity comparable to the relevant Interest
Period; provided, however, that each Lender may fund each of its LIBOR Advances
in any manner it sees fit and the foregoing assumption shall be used only for
calculation of amounts payable under this Article IV.
SECTION 4.14. APPORTIONMENT OF PAYMENTS. Aggregate principal and
interest payments in respect of Loans and payments in respect of facility fees
and commitment fees shall be apportioned among all outstanding Total
Commitments and Loans to which such payments relate proportionately to the
Lenders' respective Pro Rata
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Share of such Total Commitments and outstanding Loans. The Agent shall use its
reasonable efforts to distribute promptly to each Lender at its Payment Office
its share of all such payments received by the Agent on the same Business Day
such payments are received by Agent, but not later than the next succeeding
Business Day following receipt by Agent of such payments if such payments are
received by Agent later than 11:00 A.M. (local time for the Agent).
SECTION 4.15. SHARING OF PAYMENTS, ETC. If any Lender shall
obtain any payment or reduction (including, without limitation, any amounts
received as adequate protection of a deposit treated as cash collateral under
the Bankruptcy Code) of the Obligations (whether voluntary, involuntary,
through the exercise of any right of set-off or otherwise) in excess of its Pro
Rata Share of payments or reductions of such Obligations obtained by all the
Lenders, such Lender shall forthwith (a) notify each of the other Lenders and
Agent of such receipt, and (b) purchase from the other Lenders such
participations in the affected Obligations as shall be necessary to cause such
purchasing Lender to share the excess payment or reduction, net of costs
incurred in connection therewith, ratably with each of them, provided that if
all or any portion of such excess payment or reduction is thereafter recovered
from such purchasing Lender or additional costs are incurred, the purchase
shall be rescinded and the purchase price restored to the extent of such
recovery or such additional costs, but without interest unless the Lender
obligated to return such funds is required to pay interest on such funds.
Nelson agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 4.15 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of Nelson in the amount of such participation.
SECTION 4.16. CAPITAL ADEQUACY. Without limiting any other
provision of this Agreement, in the event that any Lender shall have determined
that any law, treaty, governmental (or quasi-governmental) rule, regulation,
guideline or order regarding capital adequacy not currently in effect or fully
applicable as of the Closing Date, or any change therein or in the
interpretation or application thereof after the Closing Date, or compliance by
such Lender with any request or directive regarding capital adequacy not
currently in effect or fully applicable as of the Closing Date (whether or not
having the force of law and whether or not failure to comply therewith would be
unlawful) from a central bank or governmental authority or body having
jurisdiction, does or shall have the effect of reducing the rate of return on
such Lender's capital as a consequence of its obligations hereunder to a level
below that which such Lender could have achieved but for such law, treaty,
rule, regulation, guideline or order, or such change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy) by an
amount deemed by such Lender to
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be material, then within ten (10) Business Days after written notice and demand
by such Lender (with copies thereof to the Agent), Nelson shall from time to
time pay to such Lender additional amounts sufficient to compensate such Lender
for such reduction (but, in the case of outstanding Base Rate Advances, without
duplication of any amounts already recovered by such Lender by reason of an
adjustment in the applicable Base Rate). Each certificate as to the amount
payable under this Section 4.16 (which certificate shall set forth the basis
for requesting such amounts in reasonable detail), submitted to Nelson by any
Lender in good faith, shall, absent manifest error, be final, conclusive and
binding for all purposes.
SECTION 4.17. BENEFITS TO GUARANTORS. In consideration for the
execution and delivery by the Guarantors of their Guaranty Agreement, Nelson
agrees to make the benefit of extensions of credit hereunder available to the
Guarantors.
SECTION 4.18. LIMITATION ON CERTAIN PAYMENT OBLIGATIONS. (a) Each
Lender or Agent shall make written demand on Nelson for indemnification or
compensation pursuant to Section 4.07 no later than ninety (90) days after the
earlier of (i) the date on which such Lender or Agent makes payment of such
Taxes, or (ii) the date on which the relevant taxing authority or other
governmental authority makes written demand upon such Lender or Agent for
payment of such Taxes.
(b) Each Lender or Agent shall make written demand on Nelson
for indemnification or compensation pursuant to Section 4.12 no later than
ninety (90) days after the event giving rise to the claim for indemnification
or compensation occurs.
(c) Each Lender or Agent shall make written demand on Nelson
for indemnification or compensation pursuant to Sections 4.10 and 4.16 no later
than three hundred sixty-five (365) days after the occurrence giving rise to a
claim pursuant to such Sections.
(d) In the event that the Lenders or Agent fail to give
Nelson notice within the time limitations prescribed in Section 4.18 (a) or
(b), Nelson shall not have any obligation to pay such claim for compensation or
indemnification. In the event that the Lender or Agent fail to give Nelson
notice within the time limitation prescribed in Section 4.18(c), Nelson shall
not have any obligation to pay any amount with respect to claims accruing prior
to the ninetieth (90th) day preceding such written demand.
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ARTICLE VA.
CONDITIONS TO BORROWINGS
The obligations of each Lender to make Advances to Nelson
hereunder and to accept a Term Note on the Conversion Date is subject to the
satisfaction of the following conditions:
SECTION 5A.01. CONDITIONS PRECEDENT TO INITIAL LOANS. At the time
of the funding of the initial Loans hereunder, all obligations of Nelson
hereunder incurred prior to the initial Loans (including, without limitation,
Nelson's obligations to reimburse the reasonable fees and expenses of counsel
to the Agent and any fees and expenses payable to the Agent and the Lenders as
previously agreed with Nelson), shall have been paid in full, and the Agent
shall have received the following, in form and substance reasonably
satisfactory in all respects to the Agent:
(a) the duly executed counterparts of this Agreement;
(b) the duly completed Revolving Notes evidencing the
Revolving Loan Commitments and, on the Conversion Date,
the duly executed Term Notes;
(c) the Guaranty Agreement, the Contribution Agreement, the
Word, Incorporated Pledge Agreement (all of which as to
Word, Incorporated and its Subsidiaries shall be deemed
delivered immediately following the consummation of the
acquisition referenced in Section 5A.01(t)) and any and
all other Credit Documents required by Agent;
(d) certificate of Nelson in substantially the form of
Exhibit I attached hereto and appropriately completed;
(e) certificates of the Secretary or Assistant Secretary of
each of the Credit Parties (all of which as to Word,
Incorporated and its Subsidiaries shall be deemed
delivered immediately following the consummation of the
acquisition referenced in Section 5A.01(t)) attaching and
certifying copies of the resolutions of the boards of
directors of the Credit Parties, authorizing as
applicable (i) the execution, delivery and performance of
the Credit Documents and (ii) the granting of the pledges
and security interests granted pursuant to the Word,
Incorporated Pledge Agreement;
(f) certificates of the Secretary or an Assistant Secretary
of each of the Credit Parties (all of which
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as to Word, Incorporated and its Subsidiaries shall be
deemed delivered immediately following the consummation of
the acquisition referenced in Section 5A.01(t)) certifying
(i) the name, title and true signature of each officer of
such entities executing the Credit Documents, and (ii) the
bylaws or comparable governing documents of such entities;
(g) certified copies of the certificate or articles of
incorporation of each Credit Party certified by the
Secretary of State, together with certificates of good
standing or existence, as may be available from the
Secretary of State of the jurisdiction of incorporation
or organization of such Credit Party;
(h) examination reports from the Uniform Commercial Code
records of those locations set forth on Schedule 5A.01(h)
attached hereto, showing no outstanding liens or security
interests granted by any Credit Party other than (i)
Liens permitted by Section 8.02, and (ii) Liens securing
the Refinanced Indebtedness which are being released on
the Closing Date;
(i) copies of all documents and instruments, including all
consents, approvals, authorizations, registrations and
filings required or advisable under any Requirement of
Law or by any material Contractual Obligation of the
Credit Parties, in connection with the execution,
delivery, performance, validity and enforceability of the
Credit Documents and the other documents to be executed
and delivered hereunder, and such consents, approvals,
authorizations, registrations and filings shall be in
full force and effect and all applicable waiting periods
shall have expired;
(j) Intentionally Omitted;
(k) Intentionally Omitted;
(l) agreement by the lenders of the Refinanced Indebtedness
to accept payment in full of all obligations outstanding
under the Refinanced Indebtedness and termination of all
credit facilities relating thereto and to release all
Liens securing Refinanced Indebtedness, and the
establishment of escrow or other arrangements for such
repayment and release of Liens acceptable to the Agent
and the Lenders;
(m) certified copies of indentures, credit agreements,
instruments and other documents evidencing or securing
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Indebtedness of any Consolidated Company described on
Schedule 8.01(b), in any single case in an amount not
less than $500,000;
(n) certificates, reports and other information as the Agent
may reasonably request from any Consolidated Company in
order to satisfy the Lenders as to the absence of any
material liabilities or obligations arising from matters
relating to employees of the Consolidated Companies,
including employee relations, collective bargaining
agreements, Plans, and other compensation and employee
benefit plans;
(o) certificates, reports, environmental audits and
investigations, and other information as the Agent may
reasonably request from any Consolidated Company in order
to satisfy the Lenders as to the absence of any material
liabilities or obligations arising from Environmental
Laws, including without limitation, OSHA laws and
regulations to which the Consolidated Companies may be
subject, and the plans of the Consolidated Companies with
respect thereto;
(p) certificates, reports and other information as the Agent
may reasonably request from any Consolidated Company in
order to satisfy the Lenders as to the absence of any
material liabilities or obligations arising from
litigation (including without limitation, products
liability and patent infringement claims) pending or
threatened against the Consolidated Companies;
(q) a summary set forth in format and detail reasonably
acceptable to the Agent of the types and amounts of
insurance (property and liability) maintained by the
Consolidated Companies;
(r) the favorable opinion of Bass, Berry & Sims, counsel to
the Credit Parties, substantially in the form of Exhibit
J attached hereto and addressed to the Agent and each of
the Lenders; and
(s) financial statements of the Consolidated Companies for
their most recently completed fiscal quarter on a
consolidated basis.
(t) evidence that Nelson's acquisition of all of the
outstanding common stock of Word, Incorporated pursuant
to the terms of the Stock Purchase Agreement between
Nelson and ABC Holding Company, Inc. dated September 28,
1992 will be closed contemporaneously with the funding of
the Loans.
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In addition to the foregoing, the following conditions shall have been
satisfied or shall exist, all to the satisfaction of the Agent, as of the time
the initial Loans are made hereunder:
(x) the Loans to be made on the Closing Date and the use of
proceeds thereof shall not contravene, violate or
conflict with, or involve the Agent or any Lender in a
violation of, any law, rule, injunction or regulation, or
determination of any court of law or other governmental
authority; and
(y) all corporate proceedings and all other legal matters in
connection with the authorization, legality, validity and
enforceability of the Credit Documents shall be
reasonably satisfactory in form and substance to the
Required Lenders.
SECTION 5A.02. CONDITIONS TO ALL LOANS. At the time of the making
of all Loans (including the Term Loans) (before as well as after giving effect
to such Loans and to the proposed use of the proceeds thereof), the following
conditions shall have been satisfied or shall exist:
(a) there shall exist no Default or Event of Default;
(b) all representations and warranties by Nelson
contained herein shall be true and correct in all
material respects with the same effect as though such
representations and warranties had been made on and as of
the date of such Loans (except that the representation
and warranty set forth in Section 6A.19 shall not be
deemed to relate to any time subsequent to the date of
the initial Loans hereunder);
(c) since the date of the most recent financial statements of
the Consolidated Companies described in Section 6A.14,
there shall have been no change that has had or could
reasonably be expected to have a Materially Adverse
Effect in any Consolidated Company's financial condition,
properties, business, operations or prospects (whether or
not any notice with respect to such change has been
furnished to the Lenders pursuant to Section 7A.07);
(d) there shall be no action or proceeding instituted or
pending before any court or other governmental authority
or, to the knowledge of Nelson, threatened that
reasonably could be expected to have a Materially Adverse
Effect in any Consolidated Company's financial condition,
properties, business, operations or prospects, including
without limitation any action or proceeding seeking to
prohibit or restrict one or more
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Credit Party's ownership or operation of any portion of
its business or assets, or to compel one or more Credit
Party to dispose of or hold separate all or any portion of
its businesses or assets, where such portion or portions
of such business(es) or assets, as the case may be,
constitute a material portion of the total businesses or
assets of the Consolidated Companies;
(e) the Loans to be made and the use of proceeds thereof
shall not contravene, violate or conflict with, or
involve the Agent or any Lender in a violation of, any
law, rule, injunction or regulation, or determination of
any court of law or other governmental authority
applicable to Nelson; and
(f) the Agent shall have received such other documents or
legal opinions as the Agent or any Lender may reasonably
request, all in form and substance reasonably
satisfactory to the Agent.
Each request for a Borrowing and the acceptance by Nelson of the
proceeds thereof and the execution of the Term Notes shall constitute a
representation and warranty by Nelson, as of the date of the Loans comprising
such Borrowing, that the applicable conditions specified in Sections 5A.01 and
5A.02 have been satisfied.
ARTICLE VB.
NOTICE PERIOD REGARDING CONDITIONS
Nelson, Agent and the Lenders hereby acknowledge that
contemporaneously with the funding of the Loans, Nelson is acquiring all of the
outstanding common stock of Word, Incorporated. Pursuant to Sections 5A.01(d),
(f)(ii), (g), (h), (i), (m), (n), (o), (p), (q) and (s) and Sections 5A.02(b),
(c) and (d), Nelson is required to provide and confirm to Agent certain
information with respect to the Consolidated Companies, including Word,
Incorporated and its Subsidiaries. Although Nelson has performed certain due
diligence in connection with its acquisition of Word, Incorporated, Nelson has
not owned or been in control of Word, Incorporated and its Subsidiaries prior
to the funding of the Loans. Consequently, in order to provide Nelson with an
opportunity to further review the records and affairs of Word, Incorporated and
its Subsidiaries in connection with the information to be provided and
confirmed pursuant to Sections 5A.01(d), (f)(ii), (g), (h), (i), (m), (n), (o),
(p), (q) and (s) and Sections 5A.02(b), (c) and (d), Nelson, Agent and the
Lenders agree that beginning on the
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Closing Date and continuing for the three (3) month period thereafter (the
"Notice Period"), Nelson shall have the right to provide and confirm the
information required by Sections 5A.01(d), (f)(ii), (g), (h), (i), (m), (n),
(o), (p), (q) and (s) and Sections 5A.02(b), (c) and (d) with respect to Word,
Incorporated and any of its Subsidiaries (the "Word, Incorporated
Information"). During the Notice Period, any information provided or confirmed
pursuant to Sections 5A.01(d), (f)(ii), (g), (h), (i), (m), (n), (o), (p), (q)
and (s) and Sections 5A.02(b), (c) and (d) with respect to Word, Incorporated
and its Subsidiaries shall not be subject to the provisions of Section 9.03.
All Word, Incorporated Information must be in writing and received by Agent
during the Notice Period. Agent's receipt of Word, Incorporated Information
prior to the end of the Notice Period shall not constitute an Event of Default
hereunder. In no event shall any Word, Incorporated Information be permitted
with respect to Nelson or any of its Subsidiaries other than Word, Incorporated
and its Subsidiaries. Upon termination of the Notice Period, all information
provided and confirmed pursuant to Sections 5A.01(d), (f)(ii), (g), (h), (i),
(m), (n), (o), (p), (q) and (s) and Sections 5A.02(b), (c) and (d), as amended
by any Word, Incorporated Information, if any, shall be subject to the
provisions of Section 9.03.
ARTICLE VIA.
REPRESENTATIONS AND WARRANTIES
Nelson (as to itself and all other Consolidated Companies)
represents and warrants (subject to the provisions of Article VIB) as follows:
SECTION 6A.01. CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of
the Consolidated Companies is a corporation duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its incorporation.
Each of the Consolidated Companies (a) has the corporate power and authority
and the legal right to own and operate its property and to conduct its
business, (b) is duly qualified as a foreign corporation and in good standing
under the laws of each jurisdiction where its ownership of property or the
conduct of its business requires such qualification, and (c) is in compliance
with all Requirements of Law, where (i) the failure to have such power,
authority and legal right as set forth in Section 6A.01(a), (ii) the failure to
be so qualified or in good standing as set forth in Section 6A.01(b), or (iii)
the failure to comply with Requirements of Law as set forth in Section
6A.01(c), would reasonably be expected, in the aggregate, to have a Materially
Adverse Effect. The jurisdiction of incorporation or organization, and the
ownership of all issued and outstanding
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capital stock, for each Subsidiary of Nelson as of the date of this Agreement
is accurately described on Schedule 6A.01.
SECTION 6A.02. CORPORATE POWER; AUTHORIZATION. Each of the Credit
Parties has the corporate power and authority to make, deliver and perform the
Credit Documents to which it is a party and has taken all necessary corporate
action to authorize the execution, delivery and performance of such Credit
Documents. No consent or authorization of, or filing with, any Person
(including, without limitation, any governmental authority), is required in
connection with the execution, delivery or performance by any Credit Party, or
the validity or enforceability against any Credit Party, of the Credit
Documents, other than such consents, authorizations or filings that have been
made or obtained.
SECTION 6A.03. ENFORCEABLE OBLIGATIONS. This Agreement has been
duly executed and delivered, and each other Credit Document will be duly
executed and delivered, by the respective Credit Parties, and this Agreement
constitutes, and each other Credit Document when executed and delivered will
constitute, legal, valid and binding obligations of the Credit Parties,
respectively, enforceable against the Credit Parties in accordance with their
respective terms, except as may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium, or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity.
SECTION 6A.04. NO LEGAL BAR. The execution, delivery and
performance by the Credit Parties of the Credit Documents will not violate any
Requirement of Law or cause a breach or default under any of their respective
Contractual Obligations which would have a Materially Adverse Effect.
SECTION 6A.05. NO MATERIAL LITIGATION. Except as set forth on
Schedule 6A.05, no litigation, investigations or proceedings of or before any
courts, tribunals, arbitrators or governmental authorities are pending or, to
the knowledge of Nelson, threatened by or against any of the Consolidated
Companies, or against any of their respective properties or revenues, whether
such properties or revenues currently exist or may exist in the future, (a)
with respect to any Credit Document, or any of the transactions contemplated
hereby or thereby, or (b) which, if adversely determined, would reasonably be
expected to have a Materially Adverse Effect.
SECTION 6A.06. INVESTMENT COMPANY ACT, ETC. None of the Credit
Parties is an "investment company" or a company "controlled" by an "investment
company" (as each of the quoted terms is defined or used in the Investment
Company Act of 1940, as amended). None of the Credit Parties is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, or any foreign, federal or local statute or regulation limiting its
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ability to incur indebtedness for money borrowed, guarantee such indebtedness,
or pledge its assets to secure such indebtedness, as contemplated hereby or by
any other Credit Document.
SECTION 6A.07. MARGIN REGULATIONS. No part of the proceeds of any
of the Loans will be used for any purpose that violates, or that would be
inconsistent or not in compliance with, the provisions of the applicable Margin
Regulations.
SECTION 6A.08. COMPLIANCE WITH ENVIRONMENTAL LAWS. (a) The
Consolidated Companies have received no notices of claims or potential
liability under, and are in compliance with, all applicable Environmental Laws,
where such claims and liabilities under, and failures to comply with, such
statutes, regulations, rules, ordinances, laws or licenses, would reasonably be
expected to result in penalties, fines, claims or other liabilities to the
Consolidated Companies in amounts in excess of $1,000,000, either individually
or in the aggregate (including any such penalties, fines, claims, or
liabilities relating to the matters set forth on Schedule 6A.08(a)), except as
set forth on Schedule 6A.08(a).
(b) Except as set forth on Schedule 6A.08(b), none of the
Consolidated Companies has received any notice of violation, or notice of any
action, either judicial or administrative, from any governmental authority
(whether United States or foreign) relating to the actual or alleged violation
of any Environmental Law, including, without limitation, any notice of any
actual or alleged spill, leak or other release of any Hazardous Substance,
waste or hazardous waste by any Consolidated Company or its employees or
agents, or as to the existence of any contamination on any properties owned by
any Consolidated Company, where any such violation, spill, leak, release or
contamination would reasonably be expected to result in penalties, fines,
claims or other liabilities to the Consolidated Companies in amounts in excess
of $1,000,000, either individually or in the aggregate.
(c) Except as set forth on Schedule 6A.08(c), the
Consolidated Companies have obtained all necessary governmental permits,
licenses and approvals that are material to the operations conducted on their
respective properties, including without limitation, all required material
permits, licenses and approvals for (i) the emission of air pollutants or
contaminants, (ii) the treatment or pretreatment and discharge of waste water
or storm water, (iii) the treatment, storage, disposal or generation of
hazardous wastes, (iv) the withdrawal and usage of ground water or surface
water, and (v) the disposal of solid wastes.
SECTION 6A.09. INSURANCE. The Consolidated Companies currently
maintain insurance with respect to their respective properties and businesses,
with financially sound and reputable insurers, having coverages against losses
or damages of the kinds customarily insured against by reputable companies in
the same or
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similar businesses, such insurance being in amounts no less than those amounts
that are customary for such companies under similar circumstances. The
Consolidated Companies have paid all material amounts of insurance premiums now
due and owing with respect to such insurance policies and coverages, and such
policies and coverages are in full force and effect.
SECTION 6A.10. NO DEFAULT. None of the Consolidated Companies is
in default under or with respect to any Contractual Obligation in any respect
that has had or is reasonably expected to have a Materially Adverse Effect.
SECTION 6A.11. NO BURDENSOME RESTRICTIONS. Except as set forth on
Schedule 6A.11, none of the Consolidated Companies is a party to or bound by
any Contractual Obligation or Requirement of Law that has had or would
reasonably be expected to have a Materially Adverse Effect.
SECTION 6A.12. TAXES. Except as set forth on Schedule 6A.12, each
of the Consolidated Companies has filed or caused to be filed all declarations,
reports and tax returns or tax extensions that are required to have been filed,
and has paid all taxes, custom duties, levies, charges and similar
contributions ("taxes" in this Section 6A.12) shown to be due and payable on
said returns or on any assessments made against them or their properties, and
all other taxes, fees or other charges imposed on them or any of their
properties by any governmental authority (other than those the amount or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have
been provided in its books); and no tax liens have been filed and, to the
knowledge of Nelson, no claims are being asserted with respect to any such
taxes, fees or other charges.
SECTION 6A.13. SUBSIDIARIES. Except as disclosed on Schedule
6A.01, on the date of this Agreement, Nelson has no Subsidiaries and neither
Nelson nor any Subsidiary is a joint venture partner or general partner in any
partnership. After the date of this Agreement and funding of the Obligations,
except as disclosed on Schedule 6A.01 and Schedule 6A.13, Nelson shall have no
Subsidiaries.
SECTION 6A.14. FINANCIAL STATEMENTS. Nelson has furnished to the
Agent and the Lenders (a) the audited consolidated balance sheet as of March
31, 1992 of the Consolidated Companies and the related consolidated statements
of income, shareholders' equity and cash flows for the fiscal year then ended,
including in each case the related schedules and notes, and (b) the unaudited
balance sheet of the Consolidated Companies presented on a consolidated basis
as at the end of the second fiscal quarter of 1993, and the related unaudited
consolidated statements of income, shareholders' equity and cash flows
presented on a consolidated basis for the
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year-to-date period then ended, setting forth in each case in comparative form
the figures for the corresponding quarter of the Consolidated Companies'
previous fiscal year. The foregoing financial statements fairly present in all
material respects the consolidated financial condition of the Consolidated
Companies as at the dates thereof and results of operations for such periods in
conformity with GAAP consistently applied (subject, in the case of the
quarterly financial statements, to normal year-end audit adjustments and the
absence of certain footnotes). The Consolidated Companies taken as a whole do
not have any material contingent obligations, material contingent liabilities,
or material liabilities for known taxes, long-term leases (except leases of
Word, Incorporated as set forth on Schedule 6A.14 hereto) or unusual forward or
long-term commitments not reflected in the foregoing financial statements or
the notes thereto. Since March 31, 1992, there have been no changes with
respect to the Consolidated Companies that has had or would reasonably be
expected to have a Materially Adverse Effect.
SECTION 6A.15. ERISA. Except as disclosed on Schedule 6A.15:
(a) Identification of Plans. None of the Consolidated
Companies nor any of their respective ERISA Affiliates maintains or contributes
to, or has during the past two years maintained or contributed to, any Plan
that is subject to Title IV of ERISA;
(b) Compliance. Each Plan maintained by the Consolidated
Companies has at all times been maintained by its terms and in operation in
compliance with all applicable laws, and the Consolidated Companies are subject
to no tax or penalty with respect to any Plan of such Consolidated Company or
any ERISA Affiliate thereof, including without limitation, any tax or penalty
under Title I or Title IV of ERISA or under Chapter 43 of the Tax Code, or any
tax or penalty resulting from a loss of deduction under Sections 162, 404 or
419 of the Tax Code, where the failure to comply with such laws, and such taxes
and penalties, together with all other liabilities referred to in this Section
6A.15 (taken as a whole), would in the aggregate have a Materially Adverse
Effect;
(c) Liabilities. The Consolidated Companies are subject to no
liabilities (including withdrawal liabilities) with respect to any Plans of
such Consolidated Companies or any of their ERISA Affiliates, including without
limitation, any liabilities arising from Titles I or IV of ERISA, other than
obligations to fund benefits under an ongoing Plan and to pay current
contributions, expenses and premiums with respect to such Plans where such
liabilities, together with all other liabilities referred to in this Section
6A.15 (taken as a whole), would in the aggregate have a Materially Adverse
Effect;
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(d) Funding. The Consolidated Companies and, with respect to
any Plan that is subject to Title IV of ERISA, each of their respective ERISA
Affiliates, have made full and timely payment of all amounts (i) required to be
contributed under the terms of each Plan and applicable law, and (ii) required
to be paid as expenses (including PBGC or other premiums) of each Plan, where
the failure to pay such amounts (when taken as a whole, including any penalties
attributable to such amounts) would have a Materially Adverse Effect. No Plan
subject to Title IV of ERISA has an "amount of unfunded benefit liabilities"
(as defined in Section 4001(a)(18) of ERISA), determined as if such Plan
terminated on any date on which this representation and warranty is deemed
made, in any amount that, together with all other liabilities referred to in
this Section 6A.15 (taken as a whole), would have a Materially Adverse Effect
if such amount were then due and payable. The Consolidated Companies are
subject to no liabilities with respect to post- retirement medical benefits in
any amounts that, together with all other liabilities referred to in this
Section 6A.15 (taken as a whole), would have a Materially Adverse Effect if
such amounts were then due and payable.
SECTION 6A.16. PATENTS, TRADEMARKS, LICENSES, ETC. Except as set
forth on Schedule 6A.16, (a) the Consolidated Companies have obtained and hold
in full force and effect all material patents, trademarks, service marks, trade
names, copyrights, licenses and other such rights, free from burdensome
restrictions, that are necessary for the operation of their respective
businesses as presently conducted, and (b) to the best of Nelson's knowledge,
no product, process, method, service or other item presently sold by or
employed by any Consolidated Company in connection with such business infringes
any patents, trademark, service mark, trade name, copyright, license or other
right owned by any other Person and there is not presently pending, or to the
knowledge of Nelson, threatened, any claim or litigation against or affecting
any Consolidated Company contesting such Person's right to sell or use any such
product, process, method, substance or other item where the result of such
failure to obtain and hold such benefits or such infringement would have a
Materially Adverse Effect.
SECTION 6A.17. OWNERSHIP OF PROPERTY. Except as set forth on
Schedule 6A.17, each Consolidated Company has good and marketable fee simple
title to or a valid leasehold interest in all of its real property and good
title to, or a valid leasehold interest in, all of its other property, as such
properties are reflected in the consolidated balance sheet of the Consolidated
Companies as of March 31, 1992 referred to in Section 6A.14, other than
properties disposed of in the ordinary course of business since such date or as
otherwise permitted by the terms of this Agreement, subject to no Lien or title
defect of any kind, except Liens permitted hereby and title defects not
constituting material impairments in the intended use for such properties. The
Consolidated Companies enjoy peaceful and undisturbed possession
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under all of their respective leases. Those locations set forth on Schedule
5A.01(h) are all of the locations (a) at which property owned or leased by the
Consolidated Companies is located other than (i) property in transit in the
ordinary course of business, and (ii) sun tan oil constituting inventory owned
by Lars Desert Oasis Sun Care Products, Inc. that is located in Orange County,
California, and (b) representing each of the Consolidated Companies' place of
business if only one (1) exists or chief executive office if more than one (1)
place of business exists.
SECTION 6A.18. INDEBTEDNESS. (a) Except as set forth on Schedules
6A.18 and 8.01(b), none of the Consolidated Companies is an obligor in respect
of any Indebtedness for borrowed money, or any commitment to create or incur
any Indebtedness for borrowed money, in an amount not less than $500,000 in any
single case, and such Indebtedness and commitments for amounts less than
$500,000 do not exceed $1,000,000 in the aggregate for all such Indebtedness
and commitments of the Consolidated Companies.
(b) The Indebtedness listed on Schedule 6A.18 (the
"Refinanced Indebtedness") and accrued and unpaid interest thereon and fees in
respect thereof have been paid in full or provision for restructuring such
Indebtedness hereunder has been made such that, in accordance with the express
provisions of the instruments governing the same, upon funding of the initial
Loans hereunder, the Consolidated Companies will be released from all liability
and contractual obligations with respect thereto other than indemnifications
contained therein, and releases in recordable form of any and all Liens
previously securing the Refinanced Indebtedness will be obtained, including
terminations of all financing statements and other filings in respect thereof.
SECTION 6A.19. FINANCIAL CONDITION. On the Closing Date and after
giving effect to the transactions contemplated by this Agreement and the other
Credit Documents, including without limitation, the use of the proceeds as
provided in Section 2.03, (a) the assets of each Credit Party at fair valuation
and based on their present fair saleable value (including, without limitation,
the fair and realistic value of any contribution or subrogation rights in
respect of any Guaranty Agreement given by such Credit Party) will exceed such
Credit Party's debts, including contingent liabilities (as such liabilities may
be limited under the express terms of any Guaranty Agreement of such Credit
Party), (b) the remaining capital of such Credit Party will not be unreasonably
small to conduct the Credit Party's business, and (c) such Credit Party will
not have incurred debts, or have intended to incur debts, beyond the Credit
Party's ability to pay such debts as they mature. For purposes of this Section
6A.19, "debt" means any liability on a claim, and "claim" means (A) the right
to payment, whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured, or (B) the
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right to an equitable remedy for breach of performance if such breach gives
rise to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.
SECTION 6A.20. Intentionally Omitted.
SECTION 6A.21. LABOR MATTERS. Except as set forth in Schedule
6A.21, the Consolidated Companies have experienced no strikes, labor disputes,
slow downs or work stoppages due to labor disagreements that have had, or would
reasonably be expected to have, a Materially Adverse Effect, and, to the best
knowledge of Nelson, there are no such strikes, disputes, slow downs or work
stoppages threatened against any Consolidated Company. The hours worked and
payment made to employees of the Consolidated Companies have not been in
violation in any material respect of the Fair Labor Standards Act or any other
applicable law dealing with such matters. All payments due from the
Consolidated Companies, or for which any claim may be made against the
Consolidated Company, on account of wages and employee health and welfare
insurance and other benefits have been paid or accrued as liabilities on the
books of the Consolidated Companies where the failure to pay or accrue such
liabilities would reasonably be expected to have a Materially Adverse Effect.
SECTION 6A.22. PAYMENT OR DIVIDEND RESTRICTIONS. Except as set
forth in Section 8.04 or described on Schedule 6A.22, none of the Consolidated
Companies is party to or subject to any agreement or understanding restricting
or limiting the payment of any dividends or other distributions by any such
Consolidated Company.
SECTION 6A.23. DISCLOSURE. No factual information, representation
or warranty contained in this Agreement (including the Schedules attached
hereto) or in any other document furnished from time to time pursuant to the
terms of this Agreement, when viewed in conjunction with all such other factual
information, representations or warranties in this Agreement or in any other
document furnished pursuant to the terms of this Agreement, contains or will
contain any untrue statement of a material fact or omits or will omit to state
any material fact necessary to make the statements herein or therein not
misleading in any material respect as of the date made or deemed to be made.
Except as may be set forth herein (including the Schedules attached hereto) or
in any notice furnished to the Lenders pursuant to Section 7A.07 at or prior to
the respective times the representations and warranties set forth in this
Section 6A.23 are made or deemed to be made hereunder, there is no fact known
to Nelson that has had, or is reasonably expected to have, a Materially Adverse
Effect.
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ARTICLE VIB.
REPRESENTATION AND WARRANTY NOTICE PERIOD
Nelson, Agent and the Lenders hereby acknowledge that
contemporaneously with the funding of the Loans, Nelson is acquiring all of the
outstanding common stock of Word, Incorporated. Pursuant to Article VIA, Nelson
is making certain representations and warranties with respect to the
Consolidated Companies, including Word, Incorporated and its Subsidiaries.
Although Nelson has performed certain due diligence in connection with its
acquisition of Word, Incorporated, Nelson has not owned or been in control of
Word, Incorporated and its Subsidiaries prior to the funding of the Loans.
Consequently, in order to provide Nelson with an opportunity to further review
the records and affairs of Word, Incorporated and its Subsidiaries in
connection with the representations and warranties made in Article VIA, Nelson,
Agent and the Lenders agree that during the Notice Period, Nelson shall have
the right to modify this Agreement by adding to Article VIA any schedules that
Nelson deems necessary to correct, clarify and/or modify any representation or
warranty made with respect to Word, Incorporated and any of its Subsidiaries
(the "Word, Incorporated Corrections"). During the Notice Period, any
representations and warranties contained in Article VIA with respect to Word,
Incorporated and its Subsidiaries shall not be subject to the provisions of
Section 9.04. All Word, Incorporated Corrections must be in writing and
received by Agent during the Notice Period. Agent's receipt of a Word,
Incorporated Correction prior to the end of the Notice Period shall not
constitute an Event of Default hereunder. In no event shall any Word,
Incorporated Correction be permitted with respect to Nelson or any of its
Subsidiaries other than Word, Incorporated and its Subsidiaries. Upon
termination of the Notice Period, all representations and warranties contained
in Article VIA, as amended by any Word, Incorporated Corrections, if any, shall
be subject to the provisions of Section 9.04.
ARTICLE VIC.
REPRESENTATIONS AND WARRANTIES REGARDING
SCHEDULE 7A.01 SUBSIDIARIES
Nelson represents and warrants that the net worths of those
Subsidiaries of Nelson set forth on Schedule 7A.01 are within the ranges set
forth opposite the respective names of such Subsidiaries on Schedule 7A.01.
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ARTICLE VIIA.
AFFIRMATIVE COVENANTS
So long as any Revolving Loan Commitment or Term Loan remains in
effect hereunder or any Note shall remain unpaid, Nelson will:
SECTION 7A.01. CORPORATE EXISTENCE, ETC. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, its corporate
existence, its material rights, franchises, and licenses, and its material
patents and copyrights (for the scheduled duration thereof), trademarks, trade
names, and service marks, necessary or desirable in the normal conduct of its
business, and its qualification to do business as a foreign corporation in all
jurisdictions where it conducts business or other activities making such
qualification necessary, where the failure to be so qualified would reasonably
be expected to have a Materially Adverse Effect.
SECTION 7A.02. COMPLIANCE WITH LAWS, ETC. Comply, and cause each
of its Subsidiaries to comply with all Requirements of Law (including, without
limitation, the Environmental Laws subject to the exception set forth in
Section 6A.08 where the penalties, claims, fines, and other liabilities
resulting from noncompliance with such Environmental Laws do not involve
amounts in excess of $1,000,000 in the aggregate) and Contractual Obligations
applicable to or binding on any of them where the failure to comply with such
Requirements of Law and Contractual Obligations would reasonably be expected to
have a Materially Adverse Effect.
SECTION 7A.03. PAYMENT OF TAXES AND CLAIMS, ETC. Pay, and cause
each of its Subsidiaries to pay, (a) all taxes, assessments and governmental
charges imposed upon it or upon its property, and (b) all claims (including,
without limitation, claims for labor, materials, supplies or services) that
might, if unpaid, become a Lien upon its property, unless, in each case, the
validity or amount thereof is being contested in good faith by appropriate
proceedings and adequate reserves are maintained with respect thereto.
SECTION 7A.04. KEEPING OF BOOKS. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account, containing complete
and accurate entries in all material respects of all their respective financial
and business transactions.
SECTION 7A.05. VISITATION, INSPECTION, ETC. Permit, and cause
each of its Subsidiaries to permit, any representative of the Agent or any
Lender to visit and inspect any of its property, to examine its books and
records and to make copies and take extracts
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therefrom, and to discuss its affairs, finances and accounts with its officers,
all at such reasonable times and as often as the Agent or such Lender may
reasonably request after reasonable prior notice to Nelson; provided, however,
that at any time following the occurrence and during the continuance of a
Default or an Event of Default, no prior notice to Nelson shall be required.
SECTION 7A.06. INSURANCE; MAINTENANCE OF PROPERTIES. (a)Maintain
or cause to be maintained with financially sound and reputable insurers,
insurance with respect to its properties and business, and the properties and
business of its Subsidiaries, against loss or damage of the kinds customarily
insured against by reputable companies in the same or similar businesses, such
insurance to be of such types and in such amounts as is customary for such
companies under similar circumstances; provided, however, that in any event
Nelson shall use its best efforts to maintain, or cause to be maintained,
insurance in amounts and with coverages not materially less favorable to any
Consolidated Company as in effect on the date of this Agreement, except where
the costs of maintaining such insurance would, in the judgment of both Nelson
and the Agent, be excessive.
(b) Cause, and cause each of the Consolidated Companies to
cause, all properties used or useful in the conduct of its business to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, settlements and improvements thereof, all as in the
judgment of Nelson may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section 7A.06(b) shall prevent Nelson
from discontinuing the operation or maintenance of any such properties if such
discontinuance is, in the judgment of Nelson, desirable in the conduct of its
business or the business of any Consolidated Company.
SECTION 7A.07. REPORTING COVENANTS. Furnish to each Lender:
(a) Annual Financial Statements. As soon as available and in
any event within ninety (90) days after the end of each fiscal year of Nelson,
balance sheets of the Consolidated Companies as at the end of such year,
presented on a consolidated and consolidating basis, and the related statements
of income, shareholders' equity, and cash flows of the Consolidated Companies
for such fiscal year, presented on a consolidated and consolidating basis
(which consolidating report need not be audited), setting forth in each case in
comparative form the figures for the previous fiscal year as then reported, all
in reasonable detail and accompanied by a report thereon of Arthur Andersen &
Co. or other independent public accountants of comparable recognized national
standing, which such report shall be unqualified as to going concern and scope
of audit and shall state that such financial statements present fairly in
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all material respects the financial condition as at the end of such fiscal year
on a consolidated basis, and the results of operations and statements of cash
flows of the Consolidated Companies for such fiscal year in accordance with
GAAP and that the examination by such accountants in connection with such
consolidated financial statements has been made in accordance with generally
accepted auditing standards;
(b) Quarterly Financial Statements. As soon as available and
in any event within sixty (60) days after the end of each fiscal quarter of
Nelson (other than the fourth fiscal quarter), balance sheets of the
Consolidated Companies as of the end of such quarter presented on a
consolidated basis and the related statements of income, shareholders' equity,
and cash flows of the Consolidated Companies for such fiscal quarter and for
the portion of Nelson's fiscal year ended at the end of such quarter, presented
on a consolidated basis setting forth in each case in comparative form the
figures for the corresponding quarter and the corresponding portion of Nelson's
previous fiscal year, all in reasonable detail and certified by the chief
financial officer or principal accounting officer of Nelson that such financial
statements fairly present in all material respects the financial condition of
the Consolidated Companies as of the end of such fiscal quarter on a
consolidated basis, and the results of operations and statements of cash flows
of the Consolidated Companies for such fiscal quarter and such portion of
Nelson's fiscal year, in accordance with GAAP consistently applied (subject to
normal year-end audit adjustments and the absence of certain footnotes);
(c) No Default/Compliance Certificate. Together with the
financial statements required pursuant to Section 7A.07(a) and (b), a
certificate of the president, chief financial officer or principal accounting
officer of Nelson (i) to the effect that, based upon a review of the activities
of the Consolidated Companies and such financial statements during the period
covered thereby, there exists no Event of Default and no Default under this
Agreement, or if there exists an Event of Default or a Default hereunder,
specifying the nature thereof and the proposed response thereto, and (ii)
demonstrating in reasonable detail compliance as of the end of such fiscal year
or such fiscal quarter with Section 7A.08 and Sections 8.01 through 8.05;
(d) Auditor's No Default Certificate. Together with the
financial statements required pursuant to Section 7A.07(a), a certificate of
the accountants who prepared the report referred to therein, to the effect
that, based upon their audit, there exists no Default or Event of Default under
this Agreement, or if there exists a Default or Event of Default hereunder,
specifying the nature thereof;
(e) Intentionally Omitted;
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(f) Notice of Default. Promptly after any Executive Officer
of Nelson has notice or knowledge of the occurrence of an Event of Default or a
Default, a certificate of the chief financial officer or principal accounting
officer of Nelson specifying the nature thereof and the proposed response
thereto;
(g) Asset Sales. Together with the financial statements
required pursuant to Section 7A.07(a), a certificate of the chief financial
officer or principal accounting officer of Nelson reporting all Asset Sales
effected by the Consolidated Companies during the fiscal year covered by such
financial statements which involved Asset Values in excess of $100,000 in any
single transaction or related series of transactions, including the Asset Value
of such assets and the amounts received by the Consolidated Companies with
respect to such sales, and such other information regarding such transactions
as the Agent or any Lender may reasonably request;
(h) Litigation. Promptly after (i) the occurrence thereof,
notice of the institution of or any material adverse development in any
material action, suit or proceeding or any governmental investigation or any
arbitration, before any court or arbitrator or any governmental or
administrative body, agency or official, against any Consolidated Company, or
any material property of any thereof, or (ii) actual knowledge thereof, notice
of the threat of any such action, suit, proceeding, investigation or
arbitration;
(i) Environmental Notices. Promptly after receipt thereof,
notice of any actual or alleged violation, or notice of any action, claim or
request for information, either judicial or administrative, from any
governmental authority relating to any actual or alleged claim, notice of
potential liability under or violation of any Environmental Law, or any actual
or alleged spill, leak, disposal or other release of any waste, petroleum
product, or hazardous waste or Hazardous Substance by any Consolidated Company
that could result in penalties, fines, claims or other liabilities to any
Consolidated Company in amounts in excess of $250,000;
(j) ERISA. (i) Promptly after Nelson has knowledge
or should have had knowledge of the occurrence thereof with
respect to any Plan of any Consolidated Company or any ERISA
Affiliate thereof, or any trust established thereunder, notice of
(A) a "reportable event" described in Section 4043 of ERISA and
the regulations issued from time to time thereunder (other than a
"reportable event" not subject to the provisions for 30-day
notice to the PBGC under such regulations), or (B) any other
event which could reasonably be expected to subject any
Consolidated Company to any tax, penalty or liability under Title
I or Title IV of ERISA or Chapter 43 of the Tax Code, or any tax
or penalty resulting from a loss of deduction under Sections 162,
404 or 419 of the Tax Code, or any tax, penalty or
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liability under any Requirement of Law applicable, where any such
taxes, penalties or liabilities exceed or could reasonably be
expected to exceed $250,000 in the aggregate;
(ii) Promptly after such notice must be provided to the
PBGC, or to a Plan participant, beneficiary or alternative payee,
any notice referred to or required under Section 101(d),
302(f)(4), 303, 307 or 4041(c)(1)(A) of ERISA or under Section
412 of the Tax Code with respect to any Plan of any Consolidated
Company or any ERISA Affiliate thereof;
(iii) Promptly after receipt, (A) any notice received by
any Consolidated Company or any ERISA Affiliate thereof
concerning the intent of the PBGC or any other governmental
authority to terminate a Plan of such Consolidated Company or
ERISA Affiliate thereof that is subject to Title IV of ERISA, (B)
any notice received by any Consolidated Company or any ERISA
Affiliate thereof concerning the intent of the PBGC or any other
governmental authority to impose any liability on such
Consolidated Company or ERISA Affiliate thereof under Title IV of
ERISA, or (C) any notice received by any Consolidated Company or
any ERISA Affiliate thereof concerning the intent of the Internal
Revenue Service or any other governmental authority to impose any
liability on such Consolidated Company or ERISA Affiliate thereof
under Chapter 43 of the Tax Code, which action under Section
7A.07(j)(iii)(C) could reasonably be expected to have a
Materially Adverse Effect;
(iv) Upon the request of the Agent, promptly upon
the filing thereof with the Internal Revenue Service ("IRS") or
the Department of Labor ("DOL"), a copy of IRS Form 5500 or
annual report for each Plan of any Consolidated Company or ERISA
Affiliate thereof that is subject to Title IV of ERISA;
(v) Upon the request of the Agent, (A) true and
complete copies of any and all documents, government reports and
IRS determination or opinion letters or rulings for any Plan of
any Consolidated Company from the IRS, PBGC or DOL, (B) any
reports filed with the IRS, PBGC or DOL with respect to a Plan of
the Consolidated Companies or any ERISA Affiliate thereof, or (C)
a current statement of withdrawal liability for each
Multiemployer Plan of any Consolidated Company or any ERISA
Affiliate thereof;
(k) Liens. Promptly upon any Consolidated Company becoming
aware thereof, notice of the filing of any federal statutory Lien, tax or other
state or local government Lien or any other Lien affecting their respective
properties, other than those Liens expressly permitted by Section 8.02;
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(l) Public Filings, Etc. Promptly upon the filing thereof or
otherwise becoming available, copies of all financial statements, annual,
quarterly and special reports, proxy statements and notices sent or made
available generally by Nelson to its public security holders, of all regular
and periodic reports and all registration statements and prospectuses, if any,
filed by any of them with any securities exchange, and of all financial press
releases and other statements made available generally to the public containing
material developments in the business or financial condition of Nelson and the
other Consolidated Companies;
(m) Accountants' Reports. Promptly upon receipt thereof,
copies of all financial statements of, and all reports submitted by,
independent public accountants to any of the Consolidated Companies in
connection with each annual, interim or special audit of the Consolidated
Companies' financial statements, including without limitation, the comment
letter submitted by such accountants to management in connection with their
annual audit;
(n) Burdensome Restrictions, Etc. Promptly upon the existence
or occurrence thereof, notice of the existence or occurrence of (i) any
Contractual Obligation or Requirement of Law described in Section 6A.11, (ii)
failure of any Consolidated Company to hold in full force and effect those
material trademarks, service marks, patents, trade names, copyrights, licenses
and similar rights necessary in the normal conduct of its business, and (iii)
any strike, labor dispute, slow down or work stoppage as described in Section
6A.21;
(o) New Subsidiaries. Within thirty (30) days after the
formation or acquisition of any Subsidiary, or any other event resulting in the
creation of a new Subsidiary, notice of the formation or acquisition of such
Subsidiary or such occurrence, including a description of the assets of such
entity, the activities in which it will be engaged, and such other information
as the Agent may request;
(p) Intercompany Asset Transfers. Promptly upon the
occurrence thereof, notice of the transfer of any assets from any Consolidated
Company to any other Consolidated Company (in any transaction or series of
related transactions), excluding sales or other transfers of assets in the
ordinary course of business, where the Asset Value of such assets is greater
than $1,000,000;
(q) Asset sales. At any time that the aggregate amount of
Asset Sales made by the Consolidated Companies after November 30, 1992 exceeds
$2,500,000 (based on the Asset Values), prompt notice of any additional Asset
Sale or related series of Asset Sales involving Asset Values of $100,000 or
more; and
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(r) Other Information. With reasonable promptness, such other
information about the Consolidated Companies as the Agent or any Lender may
reasonably request from time to time.
SECTION 7A.08. FINANCIAL COVENANTS. (a) Working Capital. Maintain
as of the last day of each fiscal quarter, Working Capital of at least
$60,000,000.
(b) Fixed Charge Coverage. Maintain as of the last day of
each fiscal quarter, a minimum Fixed Charge Coverage Ratio, calculated for the
immediately preceding four fiscal quarters of 1.1 to 1.0.
(c) Funded Debt to Total Capital. Maintain as of the last
day of each fiscal quarter, a maximum ratio of Funded Debt to Total Capital,
calculated quarterly, as shown below for each fiscal quarter ending during the
fiscal quarters indicated:
Fiscal Quarter Maximum Ratio
-------------- -------------
Through September 30, 1993 .75:1.0
December 31, 1993 through March 31, 1994 .70:1.0
June 30, 1994 through March 31, 1995 .65:1.0
Thereafter .60:1.0
(d) Leverage Ratio. Maintain as of the last day of each
fiscal quarter, a maximum Leverage Ratio of less than or equal to 0.50:1.0.
(e) Interest Coverage Ratio. Maintain as of the last day of
each fiscal quarter, a minimum Interest Coverage Ratio, calculated for the
immediately preceding four fiscal quarters, as shown below for each fiscal
quarter indicated:
Fiscal Quarter Maximum Ratio
-------------- -------------
Through March 31, 1994 1.50:1.00
June 30, 1994 through March 31, 1995 2.00:1.00
June 30, 1995 through March 31, 1996 2.50:1.00
Thereafter 3.00:1.00
(f) Second Fiscal Quarter 1992 Calculations. Acknowledge that
Schedule 7A.08 sets forth the calculation of the financial covenant amounts,
ratios, and percentages required by Section 7A.08(a) through (e) calculated as
of September 30, 1992.
SECTION 7A.09. NOTICES UNDER CERTAIN OTHER INDEBTEDNESS.
Immediately upon Nelson's receipt thereof, furnish the Agent a copy of any
notice received by it or any other Consolidated Company from the holder(s) of
Indebtedness referred to in Section 8.01(b), (f) or (g) (or from any trustee,
agent, attorney, or other party acting
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on behalf of such holder(s)) in an amount that exceeds $500,000, where such
notice states or claims (a) the existence or occurrence of any actual or
alleged default or event of default with respect to such Indebtedness under the
terms of any indenture, loan or credit agreement, debenture, note or other
document evidencing or governing such Indebtedness, or (b) the existence or
occurrence of any event or condition that requires or permits holder(s) of any
Indebtedness to exercise rights under any Change in Control Provision. Nelson
agrees to take such actions as may be necessary to require the holder(s) of any
Indebtedness (or any trustee or agent acting on their behalf) incurred pursuant
to documents executed or amended and restated after the Closing Date, to
furnish copies of all such notices directly to the Agent simultaneously with
the furnishing thereof to Nelson, and that such requirement may not be altered
or rescinded without the prior written consent of the Agent.
SECTION 7A.10. ADDITIONAL CREDIT PARTIES AND COLLATERAL. Promptly
after the formation, creation or acquisition (provided that nothing in this
Section 7A.10 shall be deemed to authorize the acquisition of any entity) of
any Subsidiary not listed on Schedule 6A.01 and Schedule 6A.13, Nelson shall
execute and deliver, and cause to be executed and delivered a Guaranty
Agreement from each such Subsidiary, together with related documents of the
kind described in Article VA as Agent shall require, all in form and substance
satisfactory to the Agent and the Required Lenders.
SECTION 7A.11. TERMINATION OF DESIGNATED SUBSIDIARIES. Within the
ninety (90) day period following the Closing Date, Nelson shall provide the
Agent with Articles of Termination evidencing the dissolution and/or
termination of Thomas Nelson Export, Inc., a Tennessee corporation, and Thomas
Nelson Service Corporation, a Minnesota corporation, both Subsidiaries of
Nelson.
ARTICLE VIIB.
SCHEDULE AMENDMENTS
In the event notice is provided by Nelson pursuant to the terms
of Article VIIA ("Notice of Change"), any information contained in a Notice of
Change shall become a part of the Schedule relating to such information only
upon the written approval of the Required Lenders as evidenced by an amendment
to this Agreement.
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ARTICLE VIII.
NEGATIVE COVENANTS
So long as any Revolving Loan Commitment or Term Loan remains in
effect hereunder or any Note shall remain unpaid, Nelson will not and will not
permit any Subsidiary to:
SECTION 8.01. INDEBTEDNESS. Create, incur, assume or suffer to
exist any Indebtedness, other than:
(a) Indebtedness evidenced by the Notes;
(b) Indebtedness outstanding on the date hereof or pursuant
to lines of credit in effect on the date hereof, all as described on Schedule
8.01(b) (excluding Refinanced Indebtedness);
(c) purchase money Indebtedness acceptable to Agent and
Lenders not to exceed an aggregate amount of $1,000,000 outstanding at any one
time;
(d) unsecured current liabilities (other than liabilities
for borrowed money or liabilities evidenced by promissory notes, bonds or
similar instruments) incurred in the ordinary course of business and either (i)
not more than sixty (60) days past due, or (ii) being disputed in good faith by
appropriate proceedings with reserves for such disputed liability maintained in
conformity with GAAP;
(e) Intentionally Omitted;
(f) Subordinated Debt not to exceed $55,000,000 (unless the
Revolving Loan Commitment is permanently reduced by an amount equal to the
excess over $55,000,000 of Subordinated Debt issued) on terms and conditions
acceptable to Agent and Lenders;
(g) Indebtedness owed to Agent by Nelson, which Indebtedness
is evidenced by a Revolving Credit Promissory Note in the original principal
amount of $5,000,000 substantially in the form attached hereto as Exhibit K the
("TNB Five Million Dollar Revolving Credit Facility");
(h) Other Indebtedness not to exceed $1,000,000 at any one
time outstanding.
SECTION 8.02. LIENS. Create, incur, assume or suffer to exist any
Lien on any of its property now owned or hereafter acquired to secure any
Indebtedness other than:
(a) any Lien required under this Agreement;
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(b) Liens existing on the date hereof disclosed on Schedule
8.02 (excluding Liens securing Refinanced Indebtedness);
(c) any Liens securing purchase money Indebtedness described
in Section 8.01(c);
(d) Liens for taxes not yet due (and in the case of Liens on
real property in Tennessee, not then delinquent), and Liens for taxes that are
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves are being maintained;
(e) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law created in
the ordinary course of business for amounts not yet due or that are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves are being maintained;
(f) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money); and
(g) Liens (other than those permitted by Sections (a) through
(f) of this Section 8.02) encumbering assets having an Asset Value not greater
than $1,000,000 in the aggregate at any one time.
SECTION 8.03. MERGERS, ACQUISITIONS, SALES, ETC. Merge or
consolidate with any other Person, or sell, lease or otherwise dispose of its
accounts, property or other assets (including capital stock of Subsidiaries),
or purchase, lease or otherwise acquire all or any substantial portion of the
property or assets (including capital stock) of any Person; provided, however,
that the foregoing restrictions on asset sales shall not be applicable to (a)
sales of equipment or other personal property being replaced by other equipment
or other personal property purchased as a capital expenditure item, (b) other
sales of assets (including stock of Subsidiaries) in an aggregate amount not to
exceed ten percent (10%) of Consolidated Net Worth computed as of March 31,
1993 subject to Sections 2.08 and 3.03, and (c) sales of inventory in the
ordinary course of business; provided further, that the foregoing restrictions
on mergers shall not apply to mergers between Subsidiaries or Nelson provided
that upon consummation of such merger, Nelson is in compliance with Section
7A.08 hereof and is the surviving corporation of such merger; provided,
however, that no transaction pursuant to Section 8.03(a) or (b) or the second
proviso in this Section 8.03 shall be permitted if any
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Default or Event of Default otherwise exists at the time of such transaction or
would otherwise exist as a result of such transaction.
SECTION 8.04. DIVIDENDS, ETC. Declare or pay any dividend on its
capital stock, or make any payment to purchase, redeem, retire or acquire any
of its Subordinated Debt or capital stock or any option, warrant, or other
right to acquire such Subordinated Debt or capital stock, other than:
(a) dividends payable solely in shares of capital stock;
(b) cash dividends declared and paid, and all other such
payments made, after March 31, 1992 in an aggregate
amount at any time not to exceed (i) $1,600,000, plus
(ii) thirty percent (30%) of Consolidated Net Income (or
minus one hundred percent (100%) of Consolidated Net
Loss) earned during Nelson's 1993 fiscal year and
thereafter (such period to be treated as one accounting
period); and
(c) redemption of Subordinated Debt upon the exercise of
conversion rights contained in that certain Indenture
dated as of November 30, 1992, between Nelson and
Boatmen's Trust Company, as Trustee, evidencing the
Subordinated Debt;
provided, however, no such dividend or other payment may be declared or paid
pursuant to Section 8.04(b) unless (A) the full amount of the mandatory
prepayment required by Section 2.08 or Section 3.03, as the case may be, has
been made, and (B) no Default or Event of Default exists at the time of such
declaration or payment, or would exist as a result of such declaration or
payment.
SECTION 8.05. INVESTMENTS, LOANS, ETC. Make, permit or hold any
Investments in any Person, or otherwise acquire or hold any Subsidiaries, other
than:
(a) Investments in Subsidiaries that are Guarantors under
this Agreement, whether such Subsidiaries are Guarantors on the Closing Date or
become Guarantors in accordance with Section 7A.10 after the Closing Date;
provided, however, nothing in this Section 8.05 shall be deemed to authorize an
investment pursuant to this Section 8.05(a) in any entity that is not a
Subsidiary and a Guarantor prior to such investment;
(b) Intentionally Omitted;
(c) direct obligations of the United States or any agency
thereof, or obligations guaranteed by the United States or any agency thereof,
in each case supported by the full faith and credit
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of the United States and maturing within one year from the date of creation
thereof;
(d) commercial paper maturing within one year from the date
of creation thereof rated in the highest grade by a nationally recognized
credit rating agency;
(e) time deposits maturing within one (1) year from the date
of creation thereof with, including certificates of deposit issued by, any
office located in the United States of any bank or trust company that is
organized under the laws of the United States or any state thereof and has
capital, surplus and undivided profits aggregating at least $500,000,000,
including without limitation, any such deposits in eurodollars issued by a
foreign branch of any such bank or trust company;
(f) those loans or extensions of credit made by any
Consolidated Company to another Consolidated Company; and
(g) Investments (other than those permitted by Section
8.05(a) through (f)) in an aggregate amount not to exceed $10,000,000.
SECTION 8.06. SALE AND LEASEBACK TRANSACTIONS. Sell or transfer
any property, real or personal, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property that any Consolidated
Company intends to use for substantially the same purpose or purposes as the
property being sold or transferred.
SECTION 8.07. TRANSACTIONS WITH AFFILIATES. Enter into any
material transaction or series of related transactions with any Affiliate of
any Consolidated Company (but excluding any Affiliate that is also a
Consolidated Company), other than on terms and conditions substantially as
favorable to such Consolidated Company as would be obtained by such
Consolidated Company at the time in a comparable arm's-length transaction with
a Person other than an Affiliate.
SECTION 8.08. OPTIONAL PREPAYMENTS. Directly or indirectly,
prepay, purchase, redeem, retire, defease or otherwise acquire or make any
optional payment on account of any principal of, interest on, or premium
payable in connection with the optional prepayment, redemption or retirement
of, any of its Indebtedness, or give a notice of redemption with respect to any
such Indebtedness, or make any payment in violation of the subordination
provisions of any Subordinated Debt, except with respect to (a) the Obligations
under this Agreement and the Notes, (b) those loans or extensions of credit
made by any Consolidated Company to another Consolidated Company, (c) the
Indebtedness more particularly described in Section 8.01(g), and (d) redemption
of Subordinated Debt upon the exercise of conversion rights contained in that
certain Indenture
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dated as of November 30, 1992, between Nelson and Boatmen's Trust Company, as
Trustee, evidencing the Subordinated Debt; provided, however, that no
prepayment pursuant to this Section 8.08 shall be permitted if any Default or
Event of Default otherwise exists at the time of such prepayment or would
otherwise exist as a result of such prepayment.
SECTION 8.09. CHANGES IN BUSINESS. Enter into any business that
is substantially different from that presently conducted by the Consolidated
Companies taken as a whole (which includes the publishing, distribution and
sale of bibles, music and books and the sale and distribution of gift
products), except where the aggregate Investment made and other funds expended
or committed with respect to such business does not exceed $2,500,000;
provided, however, that any Investment permitted by this Section 8.09 shall be
included in the calculation of Investments as set forth in Section 8.05(g).
SECTION 8.10. ERISA. Take or fail to take any action with respect
to any Plan or any Consolidated Company or, with respect to its ERISA
Affiliates, any Plans which are subject to Title IV of ERISA or to continuation
health care requirements for group health plans under the Tax Code, including
without limitation (a) establishing any such Plan, (b) amending any such Plan
(except where required to comply with applicable law), (c) terminating or
withdrawing from any such Plan, or (d) incurring an amount of unfunded benefit
liabilities, as defined in Section 4001(a)(18) of ERISA, or any withdrawal
liability under Title IV of ERISA with respect to any such Plan, without first
obtaining the written approval of the Required Lenders, where such actions or
failures could reasonably be expected to have a Materially Adverse Effect.
SECTION 8.11. ADDITIONAL NEGATIVE PLEDGES. Create or otherwise
cause or suffer to exist or become effective, directly or indirectly, any
prohibition or restriction on the creation or existence of any Lien upon any
asset of any Consolidated Company, other than pursuant to (a) Section 8.02, (b)
the terms of any agreement, instrument or other document pursuant to which any
Indebtedness, permitted by Section 8.01(c) is incurred by any Consolidated
Company, so long as such prohibition or restriction applies only to the
property or asset being financed by such Indebtedness and (c) any requirement
of applicable law or any regulatory authority having jurisdiction over any of
the Consolidated Companies.
SECTION 8.12. LIMITATION ON PAYMENT RESTRICTIONS AFFECTING
CONSOLIDATED COMPANIES. Create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction on the ability of any
Consolidated Company to (a) pay dividends or make any other distributions on
such Consolidated Company's stock, (b) pay any indebtedness owed to Nelson or
any other Consolidated Company, or (c) transfer any of its property or assets
to Nelson or
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any other Consolidated Company, except any consensual encumbrance or
restriction existing under the Credit Documents.
SECTION 8.13. ACTIONS UNDER CERTAIN DOCUMENTS. Without the prior
written consent of the Agent (which consent shall not be unreasonably
withheld), modify, amend, cancel or rescind any agreements or documents
evidencing or governing Subordinated Debt, except that current interest accrued
thereon as of the date of this Agreement and all interest subsequently accruing
thereon (whether or not paid currently) may be paid unless a Default or Event
of Default has occurred and is continuing.
Notwithstanding any other provision set forth in this Agreement,
as long as any Revolving Loan Commitment or Term Loan remains in effect
hereunder or any Note shall remain unpaid, Nelson will not permit any
Subsidiary listed on Schedule 7A.01 to receive (a) any proceeds of the Loans,
(b) any proceeds of any loans made by any Consolidated Company, (c) any assets
from any Consolidated Company other than in the ordinary course of business, or
(d) any assets from any Consolidated Company in the ordinary course of
business; provided such assets received by all the Subsidiaries listed on
Schedule 7A.01 in the ordinary course of business shall not in the aggregate
exceed $50,000 during any one calendar year.
ARTICLE IX.
EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the
following specified events (each an "Event of Default"):
SECTION 9.01. PAYMENTS. Nelson shall fail to make promptly when
due (including, without limitation, by mandatory prepayment) any principal
payment with respect to the Loans, or Nelson shall fail to make within three
(3) days after the due date thereof any payment of interest, fee or other
amount payable hereunder;
SECTION 9.02. COVENANTS WITHOUT NOTICE. Nelson shall fail to
observe or perform any covenant or agreement contained in Sections 7A.07(f),
7A.08, 8.01 through 8.06, 8.08, 8.09 and 8.11 through 8.13;
SECTION 9.03. OTHER COVENANTS. Nelson shall fail to observe or
perform any covenant or agreement contained in this Agreement, other than those
referred to in Sections 9.01 and 9.02, and, if capable of being remedied, such
failure shall remain unremedied for thirty (30) days after the earlier of (a)
Nelson's obtaining
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knowledge thereof, or (b) written notice thereof shall have been given to
Nelson by Agent or any Lender;
SECTION 9.04. REPRESENTATIONS. Any representation or warranty
made or deemed to be made by Nelson or any other Credit Party or by any of its
officers under this Agreement or any other Credit Document (including the
Schedules attached thereto), or any certificate or other document submitted to
the Agent or the Lenders by any such Person pursuant to the terms of this
Agreement or any other Credit Document, shall be incorrect in any material
respect when made or deemed to be made or submitted;
SECTION 9.05. NON-PAYMENTS OF OTHER INDEBTEDNESS. Any
Consolidated Company shall fail to make when due (whether at stated maturity,
by acceleration, on demand or otherwise, and after giving effect to any
applicable grace period) any payment of principal, interest or any other amount
owed on any Indebtedness (other than the Obligations) exceeding $1,000,000 in
the aggregate;
SECTION 9.06. DEFAULTS UNDER OTHER AGREEMENTS. Any Consolidated
Company shall fail to observe or perform within any applicable grace period any
covenants or agreements contained in any agreements or instruments relating to
any of its Indebtedness (other than the Obligations) exceeding $1,000,000 in
the aggregate, or any other event shall occur if the effect of such failure or
other event is to accelerate, or to permit the holder of such Indebtedness or
any other Person to accelerate, the maturity of such Indebtedness, or any such
Indebtedness shall be required to be prepaid (other than by a regularly
scheduled required prepayment) in whole or in part prior to its stated
maturity;
SECTION 9.07. BANKRUPTCY. Nelson or any other Consolidated
Company shall commence a voluntary case concerning itself under the Bankruptcy
Code; or an involuntary case for bankruptcy is commenced against any
Consolidated Company and the petition is not controverted within ten (10) days,
or is not dismissed within sixty (60) days, after commencement of the case; or
a custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or any substantial part of the property of any Consolidated
Company; or any Consolidated Company commences proceedings of its own
bankruptcy or to be granted a suspension of payments or any other proceeding
under any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction,
whether now or hereafter in effect, relating to any Consolidated Company or
there is commenced against any Consolidated Company any such proceeding that
remains undismissed for a period of sixty (60) days; or any Consolidated
Company is adjudicated insolvent or bankrupt; or any order of relief or other
order approving any such case or proceeding is entered; or any Consolidated
Company suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of sixty
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(60) days; or any Consolidated Company makes a general assignment for the
benefit of creditors; or any Consolidated Company shall fail to pay, or shall
state that it is unable to pay, or shall be unable to pay, its debts generally
as they become due; or any Consolidated Company shall call a meeting of its
creditors with a view to arranging a composition or adjustment of its debts; or
any Consolidated Company shall by any act or failure to act indicate its
consent to, approval of or acquiescence in any of the foregoing; or any
corporate action is taken by any Consolidated Company for the purpose of
effecting any of the foregoing;
SECTION 9.08. ERISA. A Plan of a Consolidated Company or a Plan
subject to Title IV of ERISA of any of its ERISA Affiliates
(a) shall fail to be funded in accordance with the
minimum funding standard required by applicable law, the terms of such
Plan, Section 412 of the Tax Code or Section 302 of ERISA for any plan
year or a waiver of such standard is sought or granted with respect to
such Plan under applicable law, the terms of such Plan or Section 412
of the Tax Code or Section 303 of ERISA; or
(b) is terminated, or is the subject of termination
proceedings under applicable law or the terms of such Plan; or
(c) shall require a Consolidated Company to provide
security under applicable law, the terms of such Plan, Section 412 of
the Tax Code or Section 306 or 307 of ERISA;
and any such failure, waiver, termination or other event shall result in a
liability of a Consolidated Company to the PBGC or a Plan that would have a
Materially Adverse Effect.
SECTION 9.09. MONEY JUDGMENT. A judgment or order for the
payment of money in excess of $1,000,000 (for which the Consolidated Company is
not insured) or otherwise having a Materially Adverse Effect shall be rendered
against any Consolidated Company and such judgment or order shall continue
unsatisfied (in the case of a money judgment) and in effect for a period of
thirty (30) days during which execution shall not be effectively stayed or
deferred (whether by action of a court, by agreement or otherwise);
SECTION 9.10. CHANGE IN CONTROL OF NELSON. (a) Any "person" or
"group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act),
other than Sam Moore or his estate, heirs or beneficiaries, shall become the
"beneficial owner(s)" (as defined in said Rule 13d-3) of more than twenty five
percent (25%) of the shares of the outstanding common stock of Nelson entitled
to vote for members of Nelson's board of directors, or (b) any event or
condition shall occur or exist that, pursuant to the terms of any Change in
Control Provision, requires or permits the holder(s) of
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Indebtedness of any Consolidated Company to require that such Indebtedness be
redeemed, repurchased, defeased, prepaid or repaid, in whole or in part, or the
maturity of such Indebtedness to be accelerated in any respect;
SECTION 9.11. DEFAULT UNDER OTHER CREDIT DOCUMENTS. There shall
exist or occur any "Event of Default" as provided under the terms of any other
Credit Document, or any Credit Document ceases to be in full force and effect or
the validity or enforceability thereof is disaffirmed by or on behalf of Nelson
or any other Credit Party, or at any time it is or becomes unlawful for Nelson
or any other Credit Party to perform or comply with its obligations under any
Credit Document, or the obligations of Nelson or any other Credit Party under
any Credit Document are not or cease to be legal, valid and binding on Nelson or
any such Credit Party;
SECTION 9.12. ATTACHMENTS. An attachment or similar action shall
be made on or taken against any of the assets of any Consolidated Company with
an Asset Value exceeding $1,000,000 in aggregate and is not removed, suspended
or enjoined within thirty (30) days of the same being made or any suspension or
injunction being lifted;
then, and in any such event, and at any time thereafter if any Event of Default
shall then be continuing, the Agent may, and upon the written or telex request
of the Required Lenders, shall, by written notice to Nelson, take any or all of
the following actions, without prejudice to the rights of the Agent, any Lender
or the holder of any Note to enforce its claims against Nelson or any other
Credit Party: (a) declare the Total Commitments terminated, whereupon the pro
rata Total Commitments of each Lender shall terminate immediately and any
commitment fee shall forthwith become due and payable without any other notice
of any kind; and (b) declare the principal of and any accrued interest on the
Loans, and all other Obligations owing hereunder, to be, whereupon the same
shall become, forthwith due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by Nelson; provided,
that, if an Event of Default specified in Section 9.07 shall occur, the result
which would occur upon the giving of written notice by the Agent to any Credit
Party, as specified in clauses (a) and (b) of this Section, shall occur
automatically without the giving of any such notice.
SECTION 9.13. ADJUSTMENT TO PRO RATA SHARE. Upon the occurrence
of any Event of Default, the Pro Rata Share of each Lender shall be amended to
the amount designated opposite such Lender's name below in the following chart
in order to recognize the outstanding indebtedness evidenced by (a) the TNB Five
Million Dollar Revolving Credit Facility, (b) the TNB Letter of Credit Facility,
(c) the First National Bank of Louisville Letter of Credit Facility, and (d) the
First American National Bank Letter of Credit Facility:
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Third National Bank
in Nashville: TNB Adjusted Pro Rata Share as of
the occurrence of such Event of
Default.
First National Bank
of Louisville: First National Bank of Louisville
Adjusted Pro Rata Share as of the
occurrence of such Event of Default.
First American National Bank: First American National Bank
Adjusted Pro Rata Share as of the
occurrence of such Event of Default.
NationsBank of Texas, N.A.: NationsBank of Texas, N.A. Adjusted
Pro Rata Share as of the occurrence
of such Event of Default.
Creditanstalt - Bankverein: Creditanstalt - Bankverein Adjusted
Pro Rata Share as of the occurrence
of such Event of Default.
ARTICLE X.
THE AGENT
SECTION 10.01. APPOINTMENT OF AGENT. Each Lender hereby
designates TNB as Agent to administer all matters concerning the Loans and to
act as herein specified. Each Lender hereby irrevocably authorizes, and each
holder of any Note by the acceptance of a Note shall be deemed irrevocably to
authorize, the Agent to take such actions on its behalf under the provisions of
this Agreement, the other Credit Documents and all other instruments and
agreements referred to herein or therein, and to exercise such powers and to
perform such duties hereunder and thereunder as are specifically delegated to
or required of the Agent by the terms hereof and thereof and such other powers
as are reasonably incidental thereto. The Agent may perform any of its duties
hereunder by or through its agents or employees.
SECTION 10.02. AUTHORIZATION OF AGENT WITH RESPECT TO THE
SECURITY DOCUMENTS. (a) Each Lender hereby authorizes the Agent to enter into
each of the Security Documents substantially in the form attached hereto, and
to take all action contemplated thereby. All rights and remedies under the
Security Documents may be exercised
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by the Agent for the benefit of the Agent and the Lenders and the other
beneficiaries thereof upon the terms thereof. The Lenders further agree that
the Agent may assign its rights and obligations under any of the Security
Documents to any Affiliate of the Agent or to any trustee, if necessary or
appropriate under applicable law, which assignee in each such case shall
(subject to compliance with any requirements of applicable law governing the
assignment of such Security Documents) be entitled to all the rights of the
Agent under and with respect to the applicable Security Document.
(b) In each circumstance where, under any provision of any
Security Document, the Agent shall have the right to grant or withhold any
consent, exercise any remedy, make any determination or direct any action by
the Agent under such Security Document, the Agent shall act in respect of such
consent, exercise of remedies, determination or action, as the case may be,
with the consent of and at the direction of the Required Lenders; provided,
however, that no such consent of the Required Lenders shall be required with
respect to any consent, determination or other matter that is, in the Agent's
reasonable judgment, ministerial or administrative in nature. In each
circumstance where any consent of or direction from the Required Lenders is
required, the Agent shall send to the Lenders a notice setting forth a
description in reasonable detail of the matter as to which consent or direction
is requested and the Agent's proposed course of action with respect thereto. In
the event the Agent shall not have received a response from any Lender within
five (5) Business Days after such Lender's receipt of such notice, such Lender
shall be deemed to have agreed to the course of action proposed by the Agent.
SECTION 10.03. NATURE OF DUTIES OF AGENT. The Agent shall have no
duties or responsibilities except those expressly set forth in this Agreement
and the other Credit Documents. None of the Agent nor any of its respective
officers, directors, employees or agents shall be liable for any action taken
or omitted by it as such hereunder or in connection herewith, unless caused by
its or their gross negligence or willful misconduct. The duties of the Agent
shall be ministerial and administrative in nature; the Agent shall not have by
reason of this Agreement a fiduciary relationship in respect of any Lender; and
nothing in this Agreement, express or implied, is intended to or shall be so
construed as to impose upon the Agent any obligations in respect of this
Agreement or the other Credit Documents except as expressly set forth herein.
SECTION 10.04. LACK OF RELIANCE ON THE AGENT. (a) Independently
and without reliance upon the Agent, each Lender, to the extent it deems
appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of the Credit Parties in
connection with the taking or not taking of any action in connection herewith,
and (ii) its own appraisal of the creditworthiness of the Credit Parties, and,
except as expressly provided in this Agreement, the Agent
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shall have no duty or responsibility, either initially or on a continuing
basis, to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or
at any time or times thereafter.
(b) The Agent shall not be responsible to any Lender for any
recitals, statements, information, representations or warranties herein or in
any document, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of this Agreement, the Notes, the
Guaranty Agreement, the Word, Incorporated Pledge Agreement, or any other
documents contemplated hereby or thereby, or the financial condition of the
Credit Parties, or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement, the Notes, the Guaranty Agreement, the Word, Incorporated Pledge
Agreement, or the other documents contemplated hereby or thereby, or the
financial condition of the Credit Parties or the existence or possible
existence of any Default or Event of Default; provided, however, to the extent
that the Agent has been advised that a Lender has not received any information
formally delivered to the Agent pursuant to Section 7A.07, the Agent shall
deliver or cause to be delivered such information to such Lender.
SECTION 10.05. CERTAIN RIGHTS OF THE AGENT. If the Agent shall
request instructions from the Required Lenders with respect to any action or
actions (including the failure to act) in connection with this Agreement, the
Agent shall be entitled to refrain from such act or taking such act, unless and
until the Agent shall have received instructions from the Required Lenders; and
the Agent shall not incur liability to any Person by reason of so refraining.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against the Agent as a result of the Agent acting or refraining from
acting hereunder in accordance with the instructions of the Required Lenders.
SECTION 10.06. RELIANCE BY AGENT. The Agent shall be entitled to
rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, certificate, telex, teletype or telecopier
message, cable gram, radiogram, order or other documentary, teletransmission or
telephone message believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person. The Agent may consult with legal
counsel (including counsel for any Credit Party), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
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SECTION 10.07. INDEMNIFICATION OF AGENT. To the extent the Agent
is not reimbursed and indemnified by the Credit Parties, each Lender will
reimburse and indemnify the Agent, ratably according to the respective amounts
of the Loans outstanding under all Facilities (or if no amounts are
outstanding, ratably in accordance with the Total Commitments), in either case,
for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including counsel fees
and disbursements) or disbursements of any kind or nature whatsoever that may
be imposed on, incurred by or asserted against the Agent in performing its
duties hereunder, in any way relating to or arising out of this Agreement or
the other Credit Documents; provided that no Lender shall be liable to the
Agent for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct; provided
further, that a Lender shall not be liable to the Agent for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Agent's negligence,
if such Lender shall have given the Agent timely written notice of the Lender's
objections to the act or omission constituting negligence on the Agent's part.
SECTION 10.08. THE AGENT IN ITS INDIVIDUAL CAPACITY. With respect
to its obligation to lend under this Agreement, the Loans made by it and the
Notes issued to it, the Agent shall have the same rights and powers hereunder
as any other Lender or holder of a Note and may exercise the same as though it
were not performing the duties of Agent specified herein; and the terms
"Lenders," "Required Lenders," "holders of Notes," or any similar terms shall,
unless the context clearly otherwise indicates, include the Agent in its
individual capacity. The Agent may accept deposits from, lend money to, and
generally engage in any kind of banking, trust, financial advisory or other
business with the Consolidated Companies or any Affiliate of the Consolidated
Companies as if it were not performing the duties specified herein as Agent,
and may accept fees and other consideration from the Consolidated Companies for
services in connection with this Agreement and otherwise without having to
account for the same to the Lenders.
SECTION 10.09. HOLDERS OF NOTES. The Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
a written notice of the assignment or transfer thereof shall have been filed
with the Agent. Any request, authority or consent of any Person who, at the
time of making such request or giving such authority or consent, is the holder
of any Note shall be conclusive and binding on any subsequent holder,
transferee or assignee of such Note or of any Note or Notes issued in exchange
therefor.
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SECTION 10.10. SUCCESSOR AGENT. (a) The Agent may resign at any
time by giving written notice thereof to the Lenders and Nelson and may be
removed at any time with or without cause by the Required Lenders; provided,
however, the Agent may not resign or be removed until a successor Agent has
been appointed and shall have accepted such appointment. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent subject to Nelson's prior written approval. If no successor
Agent shall have been so appointed by the Required Lenders, and shall have
accepted such appointment, within thirty (30) days after the retiring Agent's
giving of notice of resignation or the Required Lenders' removal of the
retiring Agent, then the retiring Agent may, on behalf of the Lenders, appoint
a successor Agent subject to Nelson's prior written approval, which shall be a
bank that maintains an office in the United States, or a commercial bank
organized under the laws of the United States of America or any State thereof,
or any Affiliate of such bank, having a combined capital and surplus of at
least $100,000,000. If at any time TNB is removed as a Lender pursuant to
Section 11.06(g), TNB shall simultaneously resign as Agent.
(b) Upon the acceptance of any appointment as the Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Article X shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was an
Agent under this Agreement.
ARTICLE XI.
MISCELLANEOUS
SECTION 11.01. NOTICES. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, telecopy or similar teletransmission or writing) and shall be given to
such party at its address or applicable teletransmission number set forth
opposite such party's name on the signature pages hereof, or such other address
or applicable teletransmission number as such party may hereafter specify by
notice to the Agent and Nelson. Each such notice, request or other
communication shall be effective (a) if given by telex, when such telex is
transmitted to the telex number specified in this Section 11.01 and the
appropriate answerback is received, (b) if given by mail, seventy-two (72)
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, (c) if given by telecopy, when
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such telecopy is transmitted to the telecopy number specified in this Section
11.01 and the appropriate confirmation is received, or (d) if given by any
other means (including, without limitation, by air courier), when delivered or
received at the address specified in this Section 11.01; provided that notices
to the Agent shall not be effective until received.
SECTION 11.02. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement or the other Credit Documents, nor consent to any
departure by any Credit Party therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided that no amendment, waiver or consent
shall, unless in writing and signed by all the Lenders do any of the following:
(a) waive any of the conditions specified in Section 5A.01 or 5A.02 or amend
either such Section or, for the purposes of such Sections, the definition of
any term contained in, or otherwise material to, either Section, (b) increase
any of the Total Commitments or other contractual obligations to Nelson under
this Agreement or amend Section 2.09 or the definition of the Conversion Date,
(c) reduce the principal of, or interest on, the Notes or any fees hereunder,
(d) postpone any date fixed for the payment in respect of principal of, or
interest on, the Notes or any fees hereunder, (e) change the percentage of any
of the Total Commitments or of the aggregate unpaid principal amount of the
Notes, or the number or identity of Lenders that shall be required for the
Lenders or any of them to take any action hereunder, (f) agree to release any
of the outstanding common stock of Word, Incorporated (except pursuant to the
terms of the Word, Incorporated Pledge Agreement) from the Lien of the Security
Documents to the extent securing the Obligations or to release any Guarantor
from its obligations under any Guaranty Agreement, (g) modify the definition of
"Required Lenders," or (h) modify this Section 11.02. Notwithstanding the
foregoing, no amendment, waiver or consent shall, unless in writing and signed
by the Agent in addition to the Lenders required hereinabove to take such
action, affect the rights or duties of the Agent under this Agreement or under
any other Credit Document.
SECTION 11.03. NO WAIVER; REMEDIES CUMULATIVE. No failure or
delay on the part of the Agent, any Lender or any holder of a Note in
exercising any right or remedy hereunder or under any other Credit Document,
and no course of dealing between any Credit Party and the Agent, any Lender or
the holder of any Note shall operate as a waiver thereof, nor shall any single
or partial exercise of any right or remedy hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right or remedy hereunder or thereunder. The rights and remedies herein
expressly provided are cumulative and not exclusive of any rights or remedies
that the Agent, any Lender or the holder of any Note would otherwise have. No
notice to or demand on any
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Credit Party not required hereunder or under any other Credit Document in any
case shall entitle any Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Agent, the Lenders or the holder of any Note to any other or further action in
any circumstances without notice or demand.
SECTION 11.04. PAYMENT OF EXPENSES, ETC. Nelson shall:
(a) whether or not the transactions hereby contemplated are
consummated, pay all reasonable, out-of-pocket costs and expenses of the Agent
in the administration (both before and after the execution hereof and including
reasonable expenses actually incurred relating to advice of counsel as to the
rights and duties of the Agent and the Lenders with respect thereto) of, and in
connection with the preparation, execution and delivery of, preservation of
rights under, enforcement of, and, after a Default or Event of Default,
refinancing, renegotiation or restructuring of, this Agreement and the other
Credit Documents and the documents and instruments referred to therein, and any
amendment, waiver or consent relating thereto (including, without limitation,
the reasonable fees actually incurred and disbursements of counsel for the
Agent), and in the case of enforcement of this Agreement or any Credit Document
after an Event of Default, all such reasonable, out-of-pocket costs and
expenses (including, without limitation, the reasonable fees actually incurred
and disbursements of counsel), for any of the Lenders; provided, however, that
in no event shall Nelson be obligated to pay any attorneys' fees and related
expenses incurred by any Lender other than Agent prior to the occurrence of an
Event of Default;
(b) subject, in the case of certain Taxes, to the applicable
provisions of Section 4.07(b), pay and hold each of the Lenders harmless from
and against any and all present and future stamp, documentary, and other
similar Taxes with respect to this Agreement, the Notes and any other Credit
Documents, any collateral described therein, or any payments due thereunder,
and save each Lender harmless from and against any and all liabilities with
respect to or resulting from any delay or omission to pay such Taxes; and
(c) indemnify the Agent and each Lender, and their respective
officers, directors, employees, representatives and agents from, and hold each
of them harmless against, any and all costs, losses, liabilities, claims,
damages or expenses incurred by any of them (whether or not any of them is
designated a party thereto) (an "Indemnitee") arising out of or by reason of
any investigation, litigation or other proceeding related to any actual or
proposed use of the proceeds of any of the Loans or any Credit Party's entering
into and performing of the Agreement, the Notes or the other Credit Documents,
including, without limitation, the reasonable fees actually incurred and
disbursements of counsel
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incurred in connection with any such investigation, litigation or other
proceeding; provided, however, Nelson shall not be obligated to indemnify any
Indemnitee for any of the foregoing arising out of such Indemnitee's gross
negligence or willful misconduct;
(d) without limiting the indemnities set forth in Section
11.04(c), indemnify each Indemnitee for any and all expenses and costs
(including without limitation, remedial, removal, response, abatement, cleanup,
investigative, closure and monitoring costs), losses, claims (including claims
for contribution or indemnity and including the cost of investigating or
defending any claim and whether or not such claim is ultimately defeated, and
whether such claim arose before, during or after any Credit Party's ownership,
operation, possession or control of its business, property or facilities or
before, on or after the date hereof, and including also any amounts paid
incidental to any compromise or settlement by the Indemnitee or Indemnitees to
the holders of any such claim), lawsuits, liabilities, obligations, actions,
judgments, suits, disbursements, encumbrances, liens, damages (including
without limitation damages for contamination or destruction of natural
resources), penalties and fines of any kind or nature whatsoever (including
without limitation in all cases the reasonable fees actually incurred, other
charges and disbursements of counsel in connection therewith) incurred,
suffered or sustained by that Indemnitee based upon, arising under or relating
to Environmental Laws based on, arising out of or relating to in whole or in
part, the existence or exercise of any rights or remedies by any Indemnitee
under this Agreement, any other Credit Document or any related documents.
If and to the extent that the obligations of Nelson under this Section 11.04
are unenforceable for any reason, Nelson hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations that is
permissible under applicable law.
SECTION 11.05. RIGHT OF SETOFF. In addition to and not in limitation
of all rights of offset that any Lender or other holder of a Note may have
under applicable law, each Lender or other holder of a Note shall, upon the
occurrence of any Event of Default and whether or not such Lender or such
holder has made any demand or any Credit Party's obligations are matured, have
the right to appropriate and apply to the payment of any Credit Party's
obligations hereunder and under the other Credit Documents owed to such Lender
or other holder of a Note, all deposits of any Credit Party (general or
special, time or demand, provisional or final) then or thereafter held by and
other Indebtedness or property then or thereafter owing by such Lender or other
holder to any Credit Party, whether or not related to this Agreement or any
transaction hereunder. Each Lender shall promptly notify Nelson of any offset
hereunder.
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SECTION 11.06. BENEFIT OF AGREEMENT. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto, provided that Nelson may not
assign or transfer any of its interest hereunder without the prior written
consent of the Lenders.
(b) Any Lender may make, carry or transfer Loans at, to or for the
account of, any of its branch offices or the office of an Affiliate of such
Lender.
(c) Each Lender may assign all or a portion of its interests,
rights and obligations under this Agreement (including all or a portion of any
of its Total Commitments and the Loans at the time owing to it and the Notes
held by it) to any Eligible Assignee; provided, however, that (i) the Agent and
Nelson must give their prior written consent to such assignment (which consent
shall not be unreasonably withheld) unless such assignment is to an Affiliate
of the assigning Lender, (ii) the amount of any of the Total Commitments, in
the case of the Revolving Loan Commitments, or Loans, in the case of assignment
of Term Loans, of the assigning Lender subject to each assignment (determined
as of the date the assignment and acceptance with respect to such assignment is
delivered to the Agent) shall not be less than $5,000,000, and (iii) the
parties to each such assignment shall execute and deliver to the Agent an
Assignment and Acceptance, together with a Note or Notes subject to such
assignment and, unless such assignment is to an Affiliate of such Lender, a
processing and recordation fee of $2500 payable to Agent by such Eligible
Assignee. Nelson shall not be responsible for such processing and recordation
fee or any costs or expenses incurred by any Lender or the Agent in connection
with such assignment. From and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least five (5)
Business Days after the execution thereof, the assignee thereunder shall be a
party hereto and to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement.
Notwithstanding the foregoing, the assigning Lender must retain after the
consummation of such Assignment and Acceptance, a minimum aggregate amount of
Total Commitments or Term Loans, as the case may be, of $10,000,000; provided,
however, no such minimum amount shall be required with respect to any such
assignment made at any time there exists an Event of Default hereunder. Within
five (5) Business Days after receipt of the notice and the Assignment and
Acceptance, Nelson, at its own expense, shall execute and deliver to the Agent,
in exchange for the surrendered Note or Notes, a new Note or Notes to the order
of such assignee in a principal amount equal to the applicable Total
Commitments or Term Loans assumed by it pursuant to such Assignment and
Acceptance and new Note or Notes to the assigning Lender in the amount of its
retained Total Commitments or amount of its retained Term Loans. Such new Note
or Notes shall be dated the date of the surrendered Note or Notes that
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they replace, and shall otherwise be in substantially the forms of the
appropriate Notes attached hereto.
(d) Each Lender may, without the consent of Nelson or the Agent,
sell participations to one or more banks or other entities in all or a portion
of its post-assignment rights and obligations under this Agreement (including
all or a portion of its Total Commitments in the Loans owing to it and the
Notes held by it), provided, however, that (i) no Lender may sell a
participation in its aggregate Total Commitments or Term Loans (after giving
effect to any permitted assignment hereof) in an amount in excess of fifty
percent (50%) of such aggregate Total Commitments or Term Loans and any such
Lender must retain after consummation of the sale of such participation a
minimum aggregate amount of Total Commitments or Term Loans, as the case may
be, of $10,000,000, provided, however, sales of participations to an Affiliate
of such Lender shall not be included in such calculations; provided, however,
no such limitation shall be applicable to any such participation sold at any
time there exists an Event of Default hereunder, (ii) such Lender's obligations
under this Agreement shall remain unchanged, (iii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iv) the participating bank or other entity shall not be entitled
to the benefit (except through its selling Lender) of the cost protection
provisions contained in Article IV of this Agreement, and (v) Nelson and the
Agent and other Lenders shall continue to deal solely and directly with each
Lender in connection with such Lender's rights and obligations under this
Agreement and the other Credit Documents, and such Lender shall retain the sole
right to enforce the obligations of Nelson relating to the Loans and to approve
any amendment, modification or waiver of any provisions of this Agreement. Any
Lender selling a participation hereunder shall provide prompt written notice to
Nelson of the name of such participant.
(e) Any Lender or participant may, in connection with the
assignment or participation or proposed assignment or participation, pursuant
to this Section 11.06(e), disclose to the assignee or participant or proposed
assignee or participant any information relating to Nelson or the other
Consolidated Companies furnished to such Lender by or on behalf of Nelson or
any other Consolidated Company. With respect to any disclosure of confidential,
non-public, proprietary information, such proposed assignee or participant
shall agree to use the information only for the purpose of making any necessary
credit judgments with respect to the Facilities and not to use the information
in any manner prohibited by any law, including without limitation, the
securities laws of the United States. The proposed participant or assignee
shall agree not to disclose any of such information except (i) to directors,
employees, auditors or counsel to whom it is necessary to show such
information, each of whom shall be informed of the confidential nature of the
information, (ii) in any statement or
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testimony pursuant to a subpoena or order by any court, governmental body or
other agency asserting jurisdiction over such entity, or as otherwise required
by law (provided prior notice is given to Nelson and the Agent unless otherwise
prohibited by the subpoena, order or law), and (iii) upon the request or demand
of any regulatory agency or authority with proper jurisdiction. The proposed
participant or assignee shall further agree to return all documents or other
written material and copies thereof received from any Lender, the Agent or
Nelson relating to such confidential information unless otherwise properly
disposed of by such entity.
(f) Any Lender may at any time assign all or any portion of its
rights in this Agreement and the Notes issued to it to a Federal Reserve Bank;
provided that no such assignment shall release the Lender from any of its
obligations hereunder.
(g) If (i) any Taxes referred to in Section 4.07(b) have been
levied or imposed so as to require withholdings or deductions by Nelson and
payment by Nelson of additional amounts to any Lender as a result thereof, (ii)
any Lender shall make demand for payment of any material additional amounts as
compensation for increased costs pursuant to Section 4.10 or for its reduced
rate of return pursuant to Section 4.16, or (iii) any Lender shall decline to
consent to a modification or waiver of the terms of this Agreement or the other
Credit Documents requested by Nelson, then and in such event, upon request from
Nelson delivered to such Lender and the Agent, such Lender shall assign, in
accordance with the provisions of Section 11.06(c), all of its rights and
obligations under this Agreement and the other Credit Documents to another
Lender or an Eligible Assignee selected by Nelson, in consideration for the
payment by such assignee to the Lender of the principal of, and interest on,
the outstanding Loans accrued to the date of such assignment, and the
assumption of such Lender's Total Commitment hereunder, together with any and
all other amounts owing to such Lender under any provisions of this Agreement
or the other Credit Documents accrued to the date of such assignment.
SECTION 11.07. GOVERNING LAW; SUBMISSION TO JURISDICTION. (A) THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND UNDER THE
NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW (WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF) OF THE STATE OF
TENNESSEE.
(B) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT,
THE NOTES OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE CHANCERY COURTS
FOR DAVIDSON COUNTY, TENNESSEE OR IN THE FEDERAL COURTS FOR THE MIDDLE DISTRICT
OF TENNESSEE, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, NELSON HEREBY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVE TRIAL BY JURY, AND NELSON HEREBY IRREVOCABLY WAIVES
ANY OBJECTION, INCLUDING, WITHOUT
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LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
(C) NELSON IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY
OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO NELSON AT
ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH
MAILING.
(d) Nothing herein shall affect the right of the Agent, any
Lender, any holder of a Note or any Credit Party to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against Nelson in any other jurisdiction.
SECTION 11.08. INDEPENDENT NATURE OF LENDERS, RIGHTS. The amounts
payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights pursuant to this Agreement and its Notes, and it shall not be necessary
for any other Lender to be joined as an additional party in any proceeding for
such purpose.
SECTION 11.09. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.
SECTION 11.10. EFFECTIVENESS; SURVIVAL. (a) This Agreement shall
become effective on the date on which all of the parties hereto shall have
executed a copy hereof (whether the same or different copies) and shall have
delivered the same to the Agent pursuant to Section 11.01 or, in the case of
the Lenders, shall have given to the Agent written or telex notice (actually
received) that the same has been executed and mailed to them.
(b) The obligations of Nelson under Sections 4.07(b), 4.10, 4.12,
4.16 and 11.04 hereof shall survive the payment in full of the Notes after the
Final Maturity Date. All representations and warranties made herein, in the
certificates, reports, notices and other documents delivered pursuant to this
Agreement shall survive the execution and delivery of this Agreement, the other
Credit Documents, and such other agreements and documents, the making of the
Loans hereunder, and the execution and delivery of the Notes.
SECTION 11.11. SEVERABILITY. In case any provision in or obligation
under this Agreement or the other Credit Documents shall be invalid, illegal or
unenforceable, in whole or in part, in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or
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84
obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.
SECTION 11.12. INDEPENDENCE OF COVENANTS. All covenants hereunder
shall be given independent effect so that if a particular action or condition
is not permitted by any of such covenants, the fact that it would be permitted
by an exception to, or be otherwise within the limitation of, another covenant,
shall not avoid the occurrence of a Default or an Event of Default if such
action is taken or condition exists.
SECTION 11.13. CHANGE IN ACCOUNTING PRINCIPLES, FISCAL YEAR OR TAX
LAWS. If (a) any preparation of the financial statements referred to in Section
7A.07 hereafter occasioned by the promulgation of rules, regulations,
pronouncements and opinions by or required by the Financial Accounting
Standards Board or the American Institute of Certified Public Accountants (or
successors thereto or agencies with similar functions) (other than changes
mandated by FASB-106) result in a material change in the method of calculation
of financial covenants, standards or terms found in this Agreement, (b) there
is any change in Nelson's fiscal quarter or fiscal year, or (c) there is a
material change in federal tax laws that materially affects any of the
Consolidated Companies' ability to comply with the financial covenants,
standards or terms found in this Agreement, Nelson and the Required Lenders
agree to enter into negotiations in order to amend such provisions so as to
equitably reflect such changes with the desired result that the criteria for
evaluating any of the Consolidated Companies' financial condition shall be the
same after such changes as if such changes had not been made. Unless and until
such provisions have been so amended, the provisions of this Agreement shall
govern.
SECTION 11.14. HEADINGS DESCRIPTIVE; ENTIRE AGREEMENT. The headings of
the several Sections and subsections of this Agreement are inserted for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement. This Agreement, the other Credit Documents,
and the agreements and documents required to be delivered pursuant to the terms
of this Agreement constitute the entire agreement among the parties hereto and
thereto regarding the subject matters hereof and thereof and supersede all
prior agreements, representations and understandings related to such subject
matters.
SECTION 11.15. INTEREST. The parties to this Agreement intend to
conform strictly to applicable usury laws as presently in effect. Accordingly,
if the transactions contemplated hereby would be usurious under applicable law
(including the laws of the United States of America and the State of
Tennessee), then, in that event, notwithstanding anything to the contrary in
any Credit Document or agreement executed in connection with or as security for
any of the Notes, Nelson and Lenders agree as follows: (a) the aggregate of all
consideration that constitutes interest under applicable law
-78-
85
which is contracted for, charged or received under any of the Notes, this
Agreement or any of the other Credit Documents or agreements, or otherwise in
connection with the Notes, shall under no circumstances exceed the maximum
lawful rate of interest permitted by applicable law, and any excess shall be
credited on the applicable Notes by the holder thereof (or, if the Notes shall
have been paid in full, refunded to Nelson); and (b) in the event that the
maturity of any of the Notes is accelerated by reason of an election of the
holder resulting from any Event of Default under this Agreement or otherwise,
or in the event of any required or permitted prepayment, then such
consideration that constitutes interest may never include more than the maximum
amount of interest permitted by applicable law, and excess interest, if any,
for which this Agreement provides, or otherwise, shall be cancelled
automatically as of the date of such acceleration or prepayment and, if
previously paid, shall be credited on the applicable Notes (or, if the Notes
shall have been paid in full, refunded to Nelson).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in Nashville, Tennessee, by their duly
authorized officers as of the day and year first above written.
Address for Notices: THOMAS NELSON, INC.
P.O. Box 141000
Nashville, Tennessee 37214 By:
Attention: Vice President -------------------------------
and Chief Financial Title:
Officer ----------------------------
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86
Address for Notices: THIRD NATIONAL BANK IN NASHVILLE,
AS AGENT
P.O. Box 305110
Nashville, TN 37230-5110 By:
Attention: Fred Turner -------------------------------
Title:
----------------------------
Telex No.:
----------------
Answerback:
-------------
Telecopy No.: 615-748-5161
Payment Office:
--------------
P.O. Box 305110
Nashville, TN 37230-5110
Attention: Fred Turner
-80-
87
Address for Notices: THIRD NATIONAL BANK IN NASHVILLE
P.O. Box 305110
Nashville, TN 37230-5110 By:
Attention: Fred Turner --------------------------------
Title:
----------------------------
Telex No.:
----------------
Answerback:
-------------
Telecopy No.: 615-748-5161
Payment Office:
--------------
P.O. Box 305110
Nashville, TN 37230-5110
Attention: Fred Turner
REVOLVING LOAN COMMITMENT: $19,500,000
PRO RATA SHARE OF REVOLVING
LOAN COMMITMENTS: 26%
-81-
88
Address for Notices: FIRST NATIONAL BANK OF LOUISVILLE
101 South Fifth St.
7th Floor By:
Louisville, KY 40202 --------------------------------
Attention: Debbie M. Myers
Title:
----------------------------
Telex No.:
----------------
Answerback:
-------------
Telecopy No.: 502-581-5122
Payment Office:
--------------
101 South Fifth St.
7th Floor
Louisville, KY 40202
Attention: Debbie M. Myers
REVOLVING LOAN COMMITMENT: $16,500,000
PRO RATA SHARE OF REVOLVING
LOAN COMMITMENTS: 22%
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89
Address for Notices: FIRST AMERICAN NATIONAL BANK
National Division
Nashville, TN 37237-0310 By:
Attention: Scott M. Bane -------------------------------
Vice President Title:
----------------------------
Telex No.: 6823023
Answerback:
-------------
Telephone No.: 615-736-6206
Telecopy No.: 615-748-2485
Payment Office:
--------------
327 Union Street
Nashville, TN 37237-0310
Attention: Fernisa Joy
Commercial Loan Operations
Telephone No.: 615-736-6747
Telecopy No.: 615-748-2184
REVOLVING LOAN COMMITMENT: $15,000,000
PRO RATA SHARE OF REVOLVING
LOAN COMMITMENTS: 20%
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90
Address for Notices: NATIONSBANK OF TEXAS, N.A.
-------------------
901 Main Street, 67th Floor
Dallas, TX 75283 By:
-------------------------------
or Title:
----------------------------
P.O. Box 831000
Dallas, TX 75283
Attention: Jay Tweed
Telex No.: 6829317
Answerback: NationsBK DAL
Telecopy No.: 214-508-0944
Payment Office:
--------------
901 Main Street, 67th Floor
Dallas, TX 75283
or
P.O. Box 831000
Dallas, TX 75283
Attention: Jay Tweed
REVOLVING LOAN COMMITMENT: $12,750,000
PRO RATA SHARE OF REVOLVING
LOAN COMMITMENTS: 17%
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91
Address for Notices: CREDITANSTALT - BANKVEREIN
-------------------
245 Park Avenue, 27th Floor
New York, New York 10167-0096
Attention: Donato R. Giuseppi By:
-------------------------------
Telecopy No.: 212/856-1234 Title:
----------------------------
With a copy to: By:
-------------- -------------------------------
Two Ravinia Drive Title:
----------------------------
Suite 1680
Atlanta, Georgia 30346
Attention: Joseph P. Longosz
Telecopy No.: 404/390-1851
Payment Office:
--------------
245 Park Avenue, 27th Floor
New York, NY 10167-0096
Attention: Sophie Ziegler
Telephone No.: 212/856-1000
Telecopy No.: 212/856-1234
REVOLVING LOAN COMMITMENT: $11,250,000
PRO RATA SHARE OF REVOLVING
LOAN COMMITMENTS: 15%
-85-
92
FIRST AMENDMENT TO CREDIT AGREEMENT
This First Amendment to Credit Agreement (this "First Amendment") is
made as of the 26th day of February, 1993 by and between THOMAS NELSON, INC., a
Tennessee corporation ("Nelson"), THIRD NATIONAL BANK IN NASHVILLE, a national
banking association ("TNB"), the other banks and lending institutions listed on
the signature pages hereof and any assignees of TNB or such other banks and
lending institutions that become "Lenders" as provided herein (TNB, and such
other banks, lending institutions and assignees are referred to collectively
herein as the "Lenders") , and THIRD NATIONAL BANK IN NASHVILLE, in its
capacity as agent (the "Agent") for the Lenders and each successor agent for
such Lenders as may be appointed from time to time pursuant to Article X of the
Credit Agreement dated as of November 30, 1992 by and between Nelson, Lenders
and Agent (as it may be amended from time to time, the "Credit Agreement").
W I T N E S S E T H:
WHEREAS, Nelson, Lenders and Agent entered into the Credit Agreement to
evidence the extension of certain credit facilities to Nelson as more
particularly described in the Credit Agreement; and
WHEREAS, Nelson has represented to Lenders and Agent that Nelson
Acquisition Corp. ("Nelson Acquisition") is a shell corporation that was formed
for the sole and exclusive purpose of the acquisition and subsequent spin-off
of Dodd-Mead, Inc. and has been used for no other purpose since that
transaction; and
WHEREAS, Nelson has further represented to Lenders and Agent that
Nelson Acquisition has no employees, conducts no business of any kind, and that
no Nelson funds of any nature pass through any accounts of Nelson Acquisition;
and
WHEREAS, Nelson has further represented to Lenders and Agent that the
status of Nelson Acquisition will remain the same and that no Nelson assets or
funds of any nature will be diverted into Nelson Acquisition without the prior
written consent of Agent; and
WHEREAS, based upon these representations of Nelson, Lenders, Nelson
and Agent have agreed to amend the Credit Agreement to add Nelson Acquisition
as a party to Schedule 7A.01, thereby excluding it from certain provisions of
the Credit Agreement.
NOW, THEREFORE, for and in consideration of the foregoing premises and
other good and valuable considerations, the receipt and sufficiency of which
are hereby acknowledged, the undersigned hereby agree as follows:
1. Schedule 7A.01 of the Credit Agreement is hereby amended to add
Nelson Acquisition as a Subsidiary under Triunity, Inc., and to reflect Nelson
Acquisition's Range of Net Worth as Zero.
93
2. This First Amendment may be executed in multiple counterparts,
and all such executed counterparts shall constitute the same agreement. It
shall be necessary to account for only one such counterpart in proving the
existence or terms of this First Amendment.
3. Except as hereby amended, the Credit Agreement shall remain in
full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be duly executed and delivered by their duly authorized officers as of the
day and year first above written.
Address for Notices: THOMAS NELSON, INC.
-------------------
P.O. Box 141000 By: /s/ Joe L. Powers
Nashville, Tennessee 37214 --------------------------------
Attention: Vice President Title:
and Chief Financial -----------------------------
Officer
Address for Notices: THIRD NATIONAL BANK IN
------------------- NASHVILLE, AS AGENT
P.O. Box 305110 By: /s/ J. Fred Turner
Nashville, TN 37230-5110 --------------------------------
Attention: Fred Turner Title:
-----------------------------
Address for Notices: THIRD NATIONAL BANK IN NASHVILLE
-------------------
P.O. Box 305110 By: /s/ J. Fred Turner
Nashville, TN 37230-5110 --------------------------------
Attention: Fred Turner Title:
-----------------------------
Address for Notices: FIRST NATIONAL BANK OF
------------------- LOUISVILLE
101 South Fifth St. By: /s/ Debbie M. Myers
7th Floor --------------------------------
Louisville, KY 40202 Title:
Attention: Debbie M. Myers -----------------------------
94
Address for Notices: FIRST AMERICAN NATIONAL BANK
-------------------
National Division By: /s/ Scott M. Bane
Nashville, TN 37237-0310 --------------------------------
Attention: Scott M. Bane Title:
Vice President -----------------------------
Address for Notices: NATIONSBANK OF TEXAS, N.A.
-------------------
901 Main Street, 67th Floor By: /s/ Jay S. Tweed
Dallas, TX 75283 --------------------------------
Title:
-----------------------------
or
P.O. Box 831000
Dallas, TX 75283
Attention: Jay Tweed
Address for Notices: CREDITANSTALT - BANKVEREIN
-------------------
245 Park Avenue, 27th Floor By: /s/ Robert M. Biringer
New York, New York 10167-0096 --------------------------------
Attention: Donato R. Giuseppi Title:
-----------------------------
With a copy to: By: /s/ Dennis C. O'Dowd
-------------- --------------------------------
Two Ravinia Drive Title:
Suite 1680 ------------------------------
Atlanta, Georgia 30346
Attention: Joseph P. Longosz
95
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (the "Second Amendment")
dated this 19th day of September, 1994, by and among THOMAS NELSON, INC., a
Tennessee corporation ("Nelson"), THIRD NATIONAL BANK IN NASHVILLE, a national
banking association ("TNB"), the other banks and lending institutions listed on
the signature pages hereof and any assignees of TNB or such other banks and
lending institutions that become "lenders" as provided herein (TNB and such
other banks, lending institutions and assignees are referred to collectively
herein as the "Lenders") and THIRD NATIONAL BANK IN NASHVILLE (the "Agent") in
its capacity as Agent for the Lenders and each successor agent for such Lenders
as may be appointed from time to time pursuant to Article X of the Credit
Agreement (as hereinafter defined).
W I T N E S S E T H :
WHEREAS, Nelson, Lenders and Agent entered into a Credit Agreement
dated as of November 30, 1992 (the "Credit Agreement") governing the terms of
certain credit facilities more particularly described in the Credit Agreement;
and
WHEREAS, Nelson has requested certain revisions to the Credit
Agreement, and Lenders and Agent have agreed to the revisions subject to the
terms and conditions of this Second Amendment;
NOW, THEREFORE, for and in consideration of the foregoing premises, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Section 7A.08(c) of the Credit Agreement is deleted in its entirety
and the following is substituted in lieu thereof:
(c) Funded Debt to Total Capital.
i) Maintain as of the last day of each fiscal quarter, a maximum
ratio of Funded Debt to Total Capital, calculated quarterly, as shown below for
each fiscal quarter ending during the fiscal quarters indicated:
Fiscal Ouarter Maximum Ratio
-------------- -------------
June 30, 1994 and thereafter .70:1.0
(ii) Maintain as of the last day of each fiscal year, a maximum
ratio of Funded Debt to Total Capital, calculated annually, as below for each
fiscal year ending during the fiscal years indicated:
96
Fiscal Year Maximum Ratio
----------- -------------
March 31, 1995 and thereafter .65:1.0
2. Except as herein modified and amended, the terms and
conditions of the Credit Agreement shall remain in full force and effect.
3. This Second Amendment shall be governed by and construed in
accordance with the laws of the State of Tennessee.
4. This Second Amendment is executed on the date set forth above,
but is to be effective as of June 29, 1994.
IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment as of the date first written above.
THOMAS NELSON, INC.
By: /s/ Joe L. Powers
--------------------------------------
Title:
------------------------------------
THIRD NATIONAL BANK IN NASHVILLE, AS AGENT
By: /s/ J. Fred Turner
--------------------------------------
Title:
------------------------------------
THIRD NATIONAL BANK IN NASHVILLE
By: /s/ J. Fred Turner
--------------------------------------
Title:
------------------------------------
NATIONAL CITY BANK, KENTUCKY
By: /s/ C.C. Tate
--------------------------------------
Title:
------------------------------------
FIRST AMERICAN NATIONAL BANK
By: /s/ Scott M. Bane
--------------------------------------
Title:
------------------------------------
97
NATIONSBANK OF TEXAS, N.A.
By: /s/ Jay S. Tweed
--------------------------------------
Title:
------------------------------------
CREDITANSTALT-BANKVEREIN
By: /s/ Robert M. Biringer
--------------------------------------
Title:
------------------------------------
By: /s/ Joseph P. Longosz
--------------------------------------
Title:
------------------------------------
98
THIRD AMENDMENT TO CREDIT AGREEMENT
This Third Amendment to Credit Agreement (this "Amendment") dated this
23rd day of December, 1994, by and among THOMAS NELSON, INC., a Tennessee
corporation ("Nelson"), THIRD NATIONAL BANK IN NASHVILLE, a national banking
association ("TNB") , the other banks and lending institutions listed on the
signature pages hereof and any assignees of TNB or such other banks and lending
institutions that become "Lenders" as provided herein (TNB, and such other
banks, lending institutions and assignees are referred to collectively herein
as the "Lenders"), and THIRD NATIONAL BANK IN NASHVILLE (the "Agent") in its
capacity as agent for the Lenders and each successor agent for such Lenders as
may be appointed from time to time pursuant to Article X of the Credit
Agreement (as hereinafter defined).
W I T N E S S E T H:
WHEREAS, Nelson, Lenders and Agent entered into a Credit Agreement
dated as of November 30, 1992 (the "Credit Agreement") governing the terms of
certain credit facilities more particularly described in the Credit Agreement;
and
WHEREAS, Nelson has requested certain revisions to the Credit
Agreement, and Lenders and Agent have agreed to the revisions subject to the
terms and conditions of this Amendment.
NOW, THEREFORE, for and in consideration of the foregoing premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. The definition of "Applicable Base Rate Margin" is hereby deleted
from pages 2 and 3 of the Credit Agreement and the following definition is
substituted in lieu thereof, effective as of December 23, 1994:
"Applicable Base Rate Margin" shall mean, with respect to all
outstanding Borrowings consisting of Base Rate Advances through March
31, 1994, one percent (1.00%) per annum, and with respect to all
outstanding Borrowings consisting of Base Rate Advances thereafter,
the higher relevant percentage indicated below based on the
percentages indicated for Nelson's Interest Coverage Ratio and
Leverage Ratio as determined on the date that is ninety (90) days
after the end of each fiscal year of Nelson based upon the audited
financial statements for the immediately preceding fiscal year, with
such Applicable Base Rate Margin to be immediately effective as of
such date with respect to all outstanding amounts under the Revolving
Loans or Term Loans, as the case may be:
99
Interest
Revolving Term Coverage Leverage
Loans Loans Ratio Ratio
--------- ----- -------- --------
0.75% 1.0 % less than greater than
2.1:1.0 0.45:1.0
0.0 % 0.25% greater than less than or
or equal to equal to
2.0:1.0 and 0.45:1.0 and
less than greater than
3.2:1.0 0.35:1.0
0.0 % 0.0 % greater than less than or
or equal to equal to
3.2:1.0 0.35:1.0
Notwithstanding the foregoing, in the event Nelson does not
deliver the audited financial statements for the immediately preceding
fiscal year in a manner that permits the determinations required in
the definition of Applicable Base Rate Margin within ninety (90) days
of the end of Nelson's fiscal year, commencing at the end of such
ninety (90) day period and continuing until such audited financial
statements are made available, the Applicable Base Rate Margin shall
be the highest rates applicable to Revolving Loans and Terms Loans, as
the case may be, as set forth in the preceding chart.
2. The definition of "Applicable LIBOR Rate Margin" is hereby deleted
from page 3 of the Credit Agreement and the following definition is substituted
in lieu thereof, effective as of December 23, 1994:
"Applicable LIBOR Rate Margin" shall mean, with respect to all
outstanding Borrowings consisting of LIBOR Advances through March 31,
1994, two and three quarters percent (2.75%) per annum, and with
respect to all outstanding Borrowings consisting of LIBOR Advances
thereafter, the higher relevant percentage indicated below based upon
the percentages indicated for Nelson's Interest Coverage Ratio and
Leverage Ratio as determined on the date that is ninety (90) days
after the end of each fiscal year of Nelson based upon the audited
financial statements for the immediately preceding fiscal year, with
such Applicable LIBOR Rate Margin to be immediately effective as of
such date with respect to all outstanding amounts under the Revolving
Loans or Term Loans, as the case may be:
100
Interest
Revolving Term Coverage Leverage
Loans Loans Ratio Ratio
--------- ----- -------- --------
2.50% 2.75% less than greater than
2.0:1.0 0.45:1.0
1.50% 1.75% greater than less than or
or equal to equal to
2.0:1.0 and 0.45:1.0 and
less than greater than
3.2:1.0 0.35:1.0
1.0 % 1.25% greater than less than or
or equal to equal to
3.2:1.0 0.35:1.0
Notwithstanding the foregoing, in the event Nelson does not
deliver the audited financial statements for the immediately preceding
fiscal year in a manner that permits the determinations required in
the definition of Applicable LIBOR Rate Margin within ninety (90) days
of the end of Nelson' s fiscal year, commencing at the end of such
ninety (90) day period and continuing until such audited financial
statements are made available, the Applicable LIBOR Rate Margin shall
be the highest rates applicable to Revolving Loans and Terms Loans, as
the case may be, as set forth in the preceding chart.
3. The definition of "Conversion Date" is hereby amended to delete
the date "April 30, 1996" on the second line of the definition and to substitute
in lieu thereof the date "April 30, 1997."
4. The definition of "Final Maturity Date" is hereby amended to
delete the date "November 30, 1999" on the second line of the definition and
to substitute in lieu thereof the date "April 30, 2001."
5. Section 2.09 (c) of the Credit Agreement is hereby revised to
delete the phrase "Notice of Conversion" in the fourth line of this
subparagraph and to insert in lieu thereof the phrase "Notice of Extension."
6. Nelson shall pay to the Agent, for the account of and
distribution of the respective Pro Rata Share (as defined in the Credit
Agreement) to each Lender, a one-time fee (the "Revision Fee") of $93,750.00,
representing one-eighth of one percent (.125%) of the original principal amount
of the Facilities (as defined in the Credit Agreement). One-half of the
Revision Fee shall be paid upon the execution of this Amendment, and the
remaining one-half shall be paid on January 3, 1995.
101
7. Except as herein modified and amended, the terms and conditions
of the Credit Agreement shall remain in full force and effect.
8. This Amendment shall be governed by and construed in accordance
with the laws of the State of Tennessee.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first written above.
THOMAS NELSON, INC.
By: /s/ Joe L. Powers
------------------------------
Title:
----------------------------
THIRD NATIONAL BANK IN NASHVILLE,
AS AGENT
By: /s/ J. Fred Turner
------------------------------
Title:
----------------------------
THIRD NATIONAL BANK IN NASHVILLE
By: /s/ J. Fred Turner
------------------------------
Title:
----------------------------
NATIONAL CITY BANK
By: /s/ C.C. Tate
------------------------------
Title:
----------------------------
FIRST AMERICAN NATIONAL BANK
By: /s/ Scott M. Bane
------------------------------
Title:
----------------------------
102
NATIONSBANK OF TEXAS, N.A.
By: /s/ David James
------------------------------
Title:
----------------------------
CREDITANSTALT - BANKVEREIN
By: /s/ Robert M. Biringer
------------------------------
Title:
----------------------------
By:
-------------------------------
Title:
----------------------------
103
FOURTH AMENDMENT TO CREDIT AGREEMENT
AND FIRST AMENDMENT TO REVOLVING CREDIT NOTES
This Fourth Amendment to Credit Agreement and First Amendment to
Revolving Credit Notes (this "Amendment") dated as of the 31st day of March
1995, by and among THOMAS NELSON, INC., a Tennessee corporation ("Nelson"),
THIRD NATIONAL BANK IN NASHVILLE, a national banking association ("TNB"), the
other banks and lending institutions listed on the signature pages hereof and
any assignees of TNB or such other banks and lending institutions that become
"Lenders" as provided herein (TNB, and such other banks, lending institutions
and assignees are referred to collectively herein as the "Lenders"), and THIRD
NATIONAL BANK IN NASHVILLE (the "Agent") in its capacity as agent for the
Lenders and each successor agent for such Lenders as may be appointed from time
to time pursuant to Article X of the Credit Agreement (as hereinafter defined).
W I T N E S S E T H:
WHEREAS, Nelson, Lenders and Agent entered into a Credit Agreement dated
as of November 30, 1992 (as amended, the "Credit Agreement") governing the terms
of the Loans (terms defined therein and not otherwise defined herein are being
used herein as therein defined); and
WHEREAS, Nelson has requested that Lenders extend additional credit to
Nelson in the amount of Twenty-Five Million and No/100 Dollars ($25,000,000.00),
and Lenders and Agent have agreed to the extension of additional funds subject
to the terms and conditions of this Amendment.
NOW, THEREFORE, for and in consideration of the foregoing premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. All references to the amount of "$19,500,000.00" in the
Revolving Credit Note dated November 30, 1992 executed by Nelson to the order of
TNB are hereby deleted and the amount of "$26,000,000.00" is hereby substituted
in lieu thereof.
2. All references to the amount of "$16,500,000.00" in the
Revolving Credit Note dated November 30, 1992 executed by Nelson to the order of
National City Bank, Kentucky (formerly known as First National Bank of
Louisville) are hereby deleted and the amount of "$22,000,000.00" is hereby
substituted in lieu thereof.
3. All references to the amount of "$15,000,000.00" in the
Revolving Credit Note dated November 30, 1992 executed by Nelson to the order of
First American National Bank are hereby deleted and the amount of
"$20,000,000.00" is hereby substituted in lieu thereof.
104
4. All references to the amount of "$12,750,000.00" in the
Revolving Credit Note dated November 30, 1992 executed by Nelson to the order of
NationsBank of Texas, N.A. are hereby deleted and the amount of "$17,000,000.00"
is hereby substituted in lieu thereof.
5. All references to the amount of "$11,250,000.00" in the
Revolving Credit Note dated November 30, 1992 executed by Nelson to the order of
Creditanstalt - Bankverein are hereby deleted and the amount of "$15,000,000.00"
is hereby substituted in lieu thereof.
6. The amount of "$19,500,000" shown as TNB's portion of the
Revolving Loan Commitment next to its signature block in the Credit Agreement is
hereby deleted and the amount of "$26,000,000" is hereby substituted in lieu
thereof.
7. The amount of "$16,500,000" shown as National City Bank,
Kentucky's (formerly known as First National Bank of Louisville) portion of the
Revolving Loan Commitment next to its signature block in of the Credit Agreement
is hereby deleted and the amount of "$22,000,000" is hereby substituted in lieu
thereof.
8. The amount of "$15,000,000" shown as First American National
Bank's portion of the Revolving Loan Commitment next to its signature block in
the Credit Agreement is hereby deleted and the amount of "$20,000,000" is hereby
substituted in lieu thereof.
9. The amount of "$12,750,000" shown as NationsBank of Texas,
N.A.'s portion of the Revolving Loan Commitment next to its signature block in
the Credit Agreement is hereby deleted and the amount of "$17,000,000" is hereby
substituted in lieu thereof.
10. The amount of "$11,250,000" shown as Creditanstalt-Bankverein's
portion of the Revolving Loan Commitment next to its signature block in the
Credit Agreement is hereby deleted and the amount of "$15,000,000" is hereby
substituted in lieu thereof.
11. Nelson shall pay a fee of $31,250 to the Agent as a fee for the
extension of additional credit to Nelson in the principal amount of
$25,000,000. Such fee shall be shared pro rata among the Lenders.
12. The definition of "Credit Documents" in the Credit Agreement is
hereby amended to add the following phrase to the end of such definition: ", as
they may be amended and/or restated from time to time."
13. The definition of "Final Maturity Date" in the Credit Agreement
is hereby amended to delete the date "April 30, 2001, and to substitute in lieu
thereof the date "February 28, 2001."
14. The definition of "Revolving Credit Notes" in the Credit
Agreement is hereby amended to add the following phrase to the end
2
105
of such definition: ", as they may be amended and/or restated from time to
time."
15. The definition of "Term Notes" in the Credit Agreement is hereby
amended to add the following phrase to the end of such definition: ", as they
may be amended and/or restated from time to time."
16. The word "fifteen (15)" in Section 3.02 of the Credit Agreement
is hereby deleted and the word "sixteen (16)" is hereby substituted in lieu
thereof. Also in Section 3.02 of the Credit Agreement, the date "May 31, 1996"
is hereby deleted and the date "May 31, 1997" is hereby substituted in lieu
thereof.
17. Section 2.02(b) of the Credit Agreement is amended by deleting
the figure "$5,000,000" in the fifth line thereof and replacing such figure with
the figure "$2,000,000."
18. The following sentence, which is the last sentence of Section
2.02(b), is hereby deleted:
"At no time shall the number of Borrowings outstanding under
this Article II of LIBOR Advances exceed eight (8)."
19. Except as herein modified and amended, the terms and conditions
of the Credit Agreement shall remain in full force and effect.
20. This Amendment shall be governed by and construed in accordance
with the laws of the State of Tennessee.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first written above.
THOMAS NELSON, INC.
By: /s/ Joe L. Powers
------------------------------
Title:
----------------------------
THIRD NATIONAL BANK IN NASHVILLE,
AS AGENT
By: /s/ J. Fred Turner
------------------------------
Title:
----------------------------
3
106
THIRD NATIONAL BANK IN NASHVILLE
/s/ J. Fred Turner
----------------------------------
NATIONAL CITY BANK, KENTUCKY
(formerly known as First National
Bank of Louisville)
By: /s/ John Simms
------------------------------
Title:
----------------------------
FIRST AMERICAN NATIONAL BANK
By: /s/ Scott M. Bane
------------------------------
Title:
----------------------------
NATIONSBANK OF TEXAS, N.A.
By: /s/ Gregory Meador
------------------------------
Title:
----------------------------
CREDITANSTALT - BANKVEREIN
By: /s/ Robert M. Biringer
------------------------------
Title:
----------------------------
The undersigned join in the execution of this Amendment in
order to acknowledge their consent to the terms and provisions of this
Amendment and to confirm that the execution of this Amendment by the parties
hereto in no way affects the undersigneds' respective obligations under the
Guaranty Agreement executed as of November 30, 1992 by Word, Incorporated, a
corporation organized and existing under the laws of the State of Delaware,
Editorial Caribe, Inc., a corporation organized and existing under the laws of
the State of Florida, ____________________, a corporation
4
107
organized and existing under the laws of the State of Tennessee, Nelson Media,
Inc., a corporation organized and existing under the laws of the State of
Tennessee, Nelson Communications, Inc., a corporation organized and existing
under the laws of the State of Tennessee, Dominion Publishers, Inc., a
corporation organized and existing under the laws of the State of Tennessee,
Royal Publishers, Inc., a corporation organized and existing under the laws of
the State of Tennessee, Word, Communications Ltd., a corporation organized and
existing under the laws of British Columbia, Canada, Word Direct Marketing
Services, Inc., a corporation organized and existing under the laws of the
State of Texas, TNI Cassette Corp., a corporation organized and existing under
the laws of the State of Texas, and Word (UK) Limited, a corporation organized
and existing under the laws of the United Kingdom, in favor of Third National
Bank in Nashville, a national banking association, in its capacity as agent for
banks and other lending institutions parties to the Credit Agreement and each
assignee thereof becoming a "Lender" as provided therein. Each person
executing this Amendment on behalf of each of the undersigned is duly
authorized to so execute and deliver this Amendment on behalf of each of the
undersigned entities.
WORD, INCORPORATED
By: /s/ Joe L. Powers
------------------------------
Title:
----------------------------
EDITORIAL CARIBE, INC.
By: /s/ Joe L. Powers
------------------------------
Title:
----------------------------
NELSON MEDIA, INC
By: /s/ Joe L. Powers
------------------------------
Title:
----------------------------
5
108
NELSON COMMUNICATIONS, INC.
By: /s/ Joe L. Powers
------------------------------
Title:
----------------------------
DOMINION PUBLISHERS, INC.
By: /s/ Joe L. Powers
------------------------------
Title:
----------------------------
ROYAL PUBLISHERS, INC.
By: /s/ Joe L. Powers
------------------------------
Title:
----------------------------
WORD, COMMUNICATIONS LTD.
By: /s/ Joe L. Powers
------------------------------
Title:
----------------------------
WORD DIRECT MARKETING SERVICES,
INC.
By: /s/ Joe L. Powers
-------------------------------
Title:
-----------------------------
TNI CASSETTE CORP.
By: /s/ Joe L. Powers
------------------------------
Title:
----------------------------
6
109
WORD (UK) LIMITED
By: /s/ Joe L. Powers
------------------------------
Title:
----------------------------
THIRD NATIONAL BANK IN NASHVILLE,
AS AGENT
By: /s/ J. Fred Turner
------------------------------
Title:
----------------------------
THIRD NATIONAL BANK IN NASHVILLE
By: /s/ J. Fred Turner
------------------------------
Title:
----------------------------
NATIONAL CITY BANK, KENTUCKY
(formerly known as First National
Bank of Louisville)
By: /s/ John P. Simms
------------------------------
Title:
----------------------------
FIRST AMERICAN NATIONAL BANK
By: /s/ Scott M. Bane
------------------------------
Title:
----------------------------
NATIONSBANK OF TEXAS, N.A.
By: /s/ Gregory Meador
------------------------------
Title:
----------------------------
7
110
CREDITANSTALT - BANKVEREIN
By: /s/ Robert M. Biringer
------------------------------
Title:
----------------------------
By: /s/ Joseph P. Longosz
------------------------------
Title:
----------------------------
The undersigned join in the execution of this Amendment in
order to acknowledge their consent to the terms and provisions of this
Amendment and to confirm that the execution of this Amendment by the parties
hereto in no way affects the undersigneds' respective obligations under the
Guaranty Agreement executed as of November 30, 1992 by Word, Incorporated, a
corporation organized and existing under the laws of the State of Delaware,
Editorial Caribe, Inc., a corporation organized and existing under the laws of
the State of Florida, PrintPlus Publications, Inc., a corporation organized and
existing under the laws of the State of Tennessee, Nelson Media, Inc., a
corporation organized and existing under the laws of the State of Tennessee,
Nelson Communications, Inc., a corporation organized and existing under the
laws of the State of Tennessee, Dominion Publishers, Inc., a corporation
organized and existing under the laws of the State of Tennessee, Royal
Publishers, Inc., a corporation organized and existing under the laws of the
State of Tennessee, Word, Communications Ltd., a corporation organized and
existing under the laws of British Columbia, Canada, Word Direct Marketing
Services, Inc., a corporation organized and existing under the laws of the
State of Texas, International Cassette Corp., a corporation organized and
existing under the laws of the State of Texas, and Word (UK) Limited, a
corporation organized and existing under the laws of the United Kingdom, in
favor of Third National Bank in Nashville, a national banking association, in
its capacity as agent for banks and other lending institutions parties to the
Credit Agreement and each assignee thereof becoming a "Lender" as provided
therein. Each person executing this Amendment on behalf of each of the
undersigned is duly authorized to so execute and deliver this Amendment on
behalf of each of the undersigned entities.
WORD, INCORPORATED
By: /s/ Joe L. Powers
------------------------------
Title:
----------------------------
8
EX-99.B2
12
LETTER DATED 9-15-95 REGARDING INTERIM FINANCING
1
EXHIBIT(b)(2)
September 15, 1995
Thomas Nelson, Inc.
Nelson Place at Elm Hill Pike
Nashville, TN 37214
Gentlemen:
Third National Bank in Nashville, as agent (the "Agent") is pleased to
advise Thomas Nelson, Inc. (the "Company") of the commitment to provide a
bridge credit facility of up to $60,000,000 principal amount (the "Facility").
This commitment is subject to the final negotiation, execution and delivery
of definitive documentation (including opinions of counsel for the Company) with
respect to the Facility satisfactory to the Agent and its counsel.
The Facility will be a bridge facility and will be available to the Company
until December 31, 1995. On December 31, 1995, all principal, interest and
other amounts due and owing under the Facility shall be due and payable in
full.
The Facility will be funded by a group of banks to be designated and
approved by the Agent.
In consideration for issuing this commitment letter and the commitment to
fund the Facility, a non-refundable commitment fee of $60,000 will be due and
payable by the Company. This amount will be due and payable in full at the
time this commitment letter is executed and accepted by the Company. In
addition, all reasonable fees and expenses (including reasonable attorneys'
fees) of the Agent shall be paid by the Company.
Interest on the Facility shall be due and payable as follows:
(i) for Base Rate Advances - the Base Rate plus the Applicable Base Rate
Margin;
(ii) for LIBOR Advances - LIBOR plus the Applicable LIBOR Rate Margin.
2
The defined terms used in this paragraph shall be defined as set forth in that
certain Credit Agreement, dated as of November 30, 1992, among Thomas Nelson,
Inc., the lenders listed therein, and Third National Bank in Nashville, as
Agent, as amended (the "Credit Agreement").
The Facility shall be cross-defaulted with the Credit Agreement, and a
default under either the Facility or the Credit Agreement shall be deemed to be
a default under both the Credit Agreement and the Facility.
The proceeds of the Facility shall be used only for the acquisition of all
of the outstanding stock of C.R. Gibson & Company. In the event the Company
acquires such stock of C.R. Gibson & Company, the Company shall use proceeds of
the Facility for such purpose prior to requesting advances, if any, for such
purpose under the Credit Agreement.
This commitment for the Facility, if not used by the Company, shall
terminate on December 31, 1995.
Very truly yours,
THIRD NATIONAL BANK IN NASHVILLE, as
Agent
By:_________________________________
Its:________________________________
ACCEPTED AND AGREED TO:
THOMAS NELSON, INC.
By:_______________________________
Title:____________________________
Dated: September_____, 1995
EX-99.C1
13
TENDER OFFER AND MERGER AGREEMENT
1
EXHIBIT(c)(1)
TENDER OFFER AND MERGER AGREEMENT
by and between
THOMAS NELSON, INC.,
a Tennessee corporation,
NELSON ACQUISITION CORP.,
a Delaware corporation,
and
THE C.R. GIBSON COMPANY,
a Delaware corporation
Date: September 13, 1995
2
TABLE OF CONTENTS
PAGE
1. The Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. The Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Corporate Action. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3. Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. Merger and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1. Merger; C.R. Gibson Common. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2. Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3. Stockholder Rights; Stock Transfers . . . . . . . . . . . . . . . . . . . . . . . 4
2.4. Articles of Incorporation; By-laws; Directors; Officers . . . . . . . . . . . . . 4
2.5. Exchange Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3. Representations and Warranties of Acquiror and Merger Subsidiary. . . . . . . . . . . . . . . 4
3.1. Organization, Good Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.2. Corporate Authorizations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.3. Tender Offer Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.4. Absence of Conflicts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.5. Sufficient Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.6. Information in Proxy or Information Statement . . . . . . . . . . . . . . . . . . 6
3.7. Brokers and Finders Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.8. Reliance on Representations of C.R. Gibson. . . . . . . . . . . . . . . . . . . . 6
4. Representations and Warranties of C.R. Gibson . . . . . . . . . . . . . . . . . . . . . . . . 7
4.1. Organization, Good Standing and Capital Stock of C.R. Gibson; C.R.
Gibson Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.2. Corporate Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.3. Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.4. Absence of Conflicts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.5. The C.R. Gibson Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.6. Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.7. Compliance with Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.8. Litigation; Regulatory Action . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.9. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.10. Confidentiality Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.11. Information in Proxy or Information Statement and Offer Documents . . . . . . . . 12
4.12. Employee Retirement Income Security Act of 1974 and Other Employment Matters. . . 12
4.13. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.14. Schedule 14D-9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.15. Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.16. Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.17. State Takeover Laws; Stockholder Rights . . . . . . . . . . . . . . . . . . . . . 17
4.18. Broker's and Finder's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.19. Intellectual Property. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3
PAGE
5. Conduct of Business Pending Consummation of the Offer. . . . . . . . . . . . . . . . . . . 18
5.1. Negative Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.2. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6. Additional Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.1. Covenants of Acquiror . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(a) Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(b) Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(c) Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(d) Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(e) Amendment of Offer. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.2. Joint Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(a) Certain Events. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(b) Taking of Necessary Action. . . . . . . . . . . . . . . . . . . . . . . . 22
(c) Press Releases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(d) Cooperation; Access to Information. . . . . . . . . . . . . . . . . . . . 23
(e) Consents; Stockholder Approval. . . . . . . . . . . . . . . . . . . . . . 23
6.3. Additional Covenants of C.R. Gibson . . . . . . . . . . . . . . . . . . . . . . . 24
(a) Acquisition Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(b) State Takeover Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(c) Confidentiality Agreements. . . . . . . . . . . . . . . . . . . . . . . . 25
(d) Adjustments to Reserves . . . . . . . . . . . . . . . . . . . . . . . . . 25
7. Securities Law Filings and HSR Filing. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.1. Preparation of Proxy or Information Statement . . . . . . . . . . . . . . . . . . 26
7.2. Hart-Scott-Rodino Filing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8. Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.1. Fairness Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.2. Condition to Consummation of Merger . . . . . . . . . . . . . . . . . . . . . . . 27
8.3. Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9. Abandonment and Termination of the Merger. . . . . . . . . . . . . . . . . . . . . . . . . 27
9.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.2. Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.3. Fees and Expenses Upon Certain Events . . . . . . . . . . . . . . . . . . . . . . 28
10. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.1. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(a) Acquiror's Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(b) Gibson's Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11. Amendment and Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.1. Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.2. Waiver; Cumulative Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
12. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
12.1. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
13. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
14. Other Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
-ii-
4
PAGE
14.1. Termination of Representations and Warranties. . . . . . . . . . . . . . . . . 35
14.2. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
14.3. Whole Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
14.4. Benefit and Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . . . 35
14.5. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
14.6. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
-iii-
5
TENDER OFFER AND MERGER AGREEMENT
THIS TENDER OFFER AND MERGER AGREEMENT (this "Agreement") dated as of
September 13, 1995, by and between THOMAS NELSON, INC., a Tennessee corporation
("Acquiror"), and NELSON ACQUISITION CORP., a Delaware corporation and
wholly-owned subsidiary of Acquiror ("Merger Subsidiary"), and THE C.R. GIBSON
COMPANY, a Delaware corporation ("C.R. Gibson").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of Acquiror, Merger Subsidiary and
C.R. Gibson have, prior to the date hereof, determined that it is advisable and
in the best interests of their respective stockholders to effect the merger
(the "Merger") of Merger Subsidiary into C.R. Gibson subject to the conditions
and other provisions contained herein; and
WHEREAS, the Boards of Directors of Acquiror, Merger Subsidiary, and
C.R. Gibson have approved the acquisition of C.R. Gibson by Acquiror, and in
furtherance of such acquisition, Merger Subsidiary will commence a tender offer
to purchase all outstanding shares of C.R. Gibson Common (as defined below) at
a price (the "Offer Price") of $9.00 per share, net to the seller in cash (the
"Offer"), and the Merger will follow consummation of the Offer, upon the terms
and subject to the conditions set forth herein, and
WHEREAS, the Board of Directors of C.R. Gibson has resolved to
recommend that C.R. Gibson stockholders accept the Offer.
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants and agreements contained herein, the parties hereto agree as
follows:
1. THE OFFER
1.1 The Offer. So long as none of the events set forth
in Exhibit A hereto shall have occurred or be existing and this Agreement has
not been terminated in accordance with the provisions hereof, Merger Subsidiary
shall, and Acquiror shall cause Merger Subsidiary to, commence (within the
meaning of Rule 14d-2(a) promulgated under the Securities Exchange Act of 1934,
as amended (the "1934 Act")), as promptly as practicable after the date hereof,
the Offer pursuant to Section 14(d) of the 1934 Act. The Offer shall be
subject only to the conditions set forth in Exhibit A hereto, any of which
conditions may be waived in the sole discretion of Acquiror and Merger
Subsidiary. Upon the terms and subject to the conditions of the Offer, Merger
Subsidiary shall accept for payment and thereby purchase all outstanding shares
of C.R. Gibson Common properly tendered pursuant thereto as soon as legally
permissible following the consummation thereof, and following such consummation
shall pay for all such shares as promptly as practicable thereafter.
6
1.2 Corporate Action. C.R. Gibson hereby consents to the
Offer and represents that its Board of Directors has, at a meeting duly called
and held, (a) determined that the Offer and the Merger are fair to, and in the
best interests of, C.R. Gibson and its stockholders, (b) approved this
Agreement, the Offer and the Merger and (c) resolved to recommend that the
holders of the C.R. Gibson Common (i) accept the Offer and tender their shares
of C.R. Gibson Common pursuant thereto, (ii) approve the Merger and (iii)
approve and adopt this Agreement. C.R. Gibson represents that Goldman, Sachs &
Co. has advised the Board of Directors of C.R. Gibson that the $9.00 per share
consideration to be received by the holders of C.R. Gibson Common in the Offer
or the Merger is fair to such holders. On the date the Offer Documents (as
hereinafter defined) are filed with the Securities and Exchange Commission (the
"SEC"), C.R. Gibson shall file with the SEC and mail to its stockholders a
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
reflecting such recommendations. C.R. Gibson hereby consents to the inclusion
in the Offer of the recommendations referred to in the first sentence of this
Section 1.2.; provided, however, that the Board of Directors may withdraw,
modify or change such recommendation in accordance with the provisions of
Section 6.3.(a). C.R. Gibson will promptly furnish to or arrange to have
furnished to, Merger Subsidiary a list of the holders of outstanding shares of
C.R. Gibson Common and mailing labels containing the names and addresses of all
record holders of outstanding shares of C.R. Gibson Common and lists of
security positions of shares of C.R. Gibson Common held in stock depositories,
each as of a recent date, and will promptly furnish to or arrange to have
furnished to Merger Subsidiary such additional information, including updated
lists of the stockholders of C.R. Gibson, mailing labels and updated lists of
security positions, and such assistance as Merger Subsidiary or its agents may
reasonably request in communicating the Offer to the holders of outstanding
C.R. Gibson Common. C.R. Gibson has been advised by each of its directors that
each such person intends to tender all shares of C.R. Gibson Common owned by
such person pursuant to the Offer.
1.3 Directors. Promptly upon the purchase by Acquiror or
any of its subsidiaries of such number of shares of C.R. Gibson Common as
represents at least a majority of the outstanding C.R. Gibson Common and from
time to time thereafter, Acquiror shall be entitled to designate such number of
directors, rounded up to the next whole number, on the Board of Directors of
C.R. Gibson as will give Acquiror, subject to compliance with Section 14(f) of
the 1934 Act, representation on the Board of Directors of C.R. Gibson equal to
the product of the number of directors on the Board of Directors of C.R. Gibson
and the percentage that such number of shares of C.R. Gibson Common so
purchased bears to the number of shares of C.R. Gibson Common outstanding, and
C. R. Gibson shall, upon request by Acquiror, promptly increase the size of the
Board of Directors of C.R. Gibson or exercise its best efforts to secure the
resignations of such number of directors as is necessary to enable Acquiror's
designees to be elected to the Board of Directors of C.R. Gibson. At the
request of Acquiror, C.R. Gibson shall take, at its expense, all action
necessary to effect any such election, including calling a special meeting of
its stockholders and mailing to its stockholders the information required by
Section 14(f) of the 1934 Act and Rule 14f-1 promulgated thereunder.
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2. MERGER AND EXCHANGE
2.1 Merger; C.R. Gibson Common. Subject to the
satisfaction (or, where permissible, waiver) of the terms and conditions of
this Agreement, including, without limitation, receipt of the approval of the
stockholders of C.R. Gibson, the affiliation of the parties shall be carried
out in the following manner: on the date (the "Effective Date") and at the
time (the "Effective Time") that all conditions to the Merger set forth in this
Agreement have been satisfied or waived in accordance with the terms hereof,
including the execution and delivery by Merger Subsidiary and C.R. Gibson of a
certificate of merger (the "Certificate of Merger") substantially in the form
attached hereto as Exhibit B, and as soon as practicable following the
consummation of the Offer, Merger Subsidiary shall be merged with and into C.R.
Gibson pursuant to the Certificate of Merger, with C.R. Gibson to be the
surviving corporation (the "Surviving Corporation"), and (a) each share of C.R.
Gibson's Common Stock, $0.10 par value (the "C.R. Gibson Common"), issued and
outstanding immediately prior to the Effective Time not owned by Merger
Subsidiary or Acquiror or any other direct or indirect subsidiary of the
Acquiror (collectively, the "Acquiror Subsidiaries") (other than shares held by
stockholders who take all of the steps required to be taken in order to entitle
such stockholders to be paid the fair value of such shares (the "Dissenting
Shares") under Section 262 of the Delaware General Corporation Law ("GCL"), any
such stockholder being a "Dissenting Stockholder")) shall thereupon by virtue
of the Merger and without further action on the part of the holder thereof, be
converted into the right to receive the highest price paid per share of C.R.
Gibson Common pursuant to the Offer in cash (the "Exchange Price"); (b) each
share of Merger Subsidiary's capital stock issued and outstanding immediately
prior to the Effective Time shall thereupon by virtue of the Merger and without
further action on the part of the holder thereof be converted into one share of
C.R. Gibson Common; and (c) each share of C.R. Gibson Common issued and
outstanding immediately prior to the Effective Time owned by Acquiror, Merger
Subsidiary or any of the other Acquiror Subsidiaries or held in the treasury of
C.R. Gibson shall be cancelled and retired, and no payment shall be made with
respect thereto. Notwithstanding this Section 2.1. the Acquiror may elect at
any time prior to the fifth business day immediately preceding the date on
which the Proxy or Information Statement (as hereinafter defined) is initially
mailed to the Company's stockholders (or, if a "short-form" merger is to be
effected, at any time prior thereto) that instead of merging the Merger
Subsidiary into C.R. Gibson as hereinabove provided, to merge C.R. Gibson into
the Acquiror, the Merger Subsidiary or another direct or indirect wholly owned
subsidiary of the Acquiror; provided, however, that C.R. Gibson shall not be
deemed to have breached any of its representations, warranties or covenants
herein solely by reason of such election. In such event, the parties agree to
execute an appropriate amendment to this Agreement in order to reflect the
foregoing and to provide that the merger Subsidiary or such other subsidiary of
the Acquiror shall be the Surviving Corporation.
2.2 Options. Subject to the rights of certain officers
of C.R. Gibson under their respective Employment Agreements (as hereinafter
defined), as of the Effective Time, each option to purchase shares of C.R.
Gibson Common (the "Options"), which is then outstanding and unexercised
whether pursuant to the C.R. Gibson 1988 Stock Option Plan for Key Employees
(the "Option Plan") or otherwise and whether or not then exercisable, shall, by
virtue of the Merger, automatically and without any action on the part of the
holder thereof, be
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converted into the right to receive cash in an amount equal to (i) the excess
of the Exchange Price over the exercise price per share provided in such Option
multiplied by (ii) the number of shares subject to such Option. A list of the
Options outstanding on the date hereof is attached hereto as Schedule 2.2.
2.3 Stockholder Rights; Stock Transfers. On the
Effective Date, holders of C.R. Gibson Common immediately prior to the
Effective Time and holders of Options shall cease to be, and shall have no
rights as, stockholders of C.R. Gibson, other than the right to receive the
consideration provided under this Article 2. and otherwise set forth in the
Certificate of Merger. After the Effective Date, there shall be no transfers
on the stock transfer books of C.R. Gibson of the shares of C.R. Gibson Common
which were issued and outstanding immediately prior to the Effective Date.
2.4 Articles of Incorporation; By-laws; Directors;
Officers. The articles of incorporation and by-laws of the Surviving
Corporation shall be those of C.R. Gibson immediately prior to the Effective
Time until duly amended in accordance with their terms and the provisions of
applicable law. The directors of Merger Subsidiary in office immediately prior
to the Effective Time shall be the directors of the Surviving Corporation,
together with such additional directors as may thereafter be elected, who shall
hold office until such time as their successors are elected and qualified. The
officers of C.R. Gibson in office immediately prior to the Effective Time shall
be the officers of the Surviving Corporation together with such additional
officers as may thereafter be elected, who shall hold such office until such
time as their successors are elected and qualified.
2.5 Exchange Procedures. As promptly as practicable
after the Effective Date, Acquiror shall send or cause to be sent to each
former stockholder of C.R. Gibson of record immediately prior to the Effective
Date (other than Acquiror, Merger Subsidiary or any of the other Acquiror
Subsidiaries and other than Dissenting Stockholders) transmittal materials for
use in exchanging such stockholder's certificates representing C.R. Gibson
Common for the Exchange Price for the shares represented thereby. The cash
into which the shares of C.R. Gibson Common represented by such certificate has
been converted will be delivered to such stockholder upon delivery to Acquiror
of the certificates representing all of such shares of C.R. Gibson Common (or
indemnity reasonably satisfactory to Acquiror if any of such certificates are
lost, stolen or destroyed).
3. REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND MERGER SUBSIDIARY
Acquiror and Merger Subsidiary each represent and warrant to
C.R. Gibson as follows:
3.1 Organization, Good Standing. Each of Acquiror and
Merger Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of the States of Tennessee and Delaware, respectively,
and has all requisite corporate power and authority (i) to enter into this
Agreement and the Certificate of Merger and to perform the obligations
hereunder and thereunder to be performed by it and (ii) to own, operate and
lease its properties
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and carry on its business as it is now being conducted. Each of Acquiror and
each of the Acquiror Subsidiaries is duly qualified to do business and is in
good standing in each jurisdiction where the character of the properties owned
or leased by it or the nature of the business transacted by it requires that it
be so qualified, except where the failure to so qualify or be in good standing
could not reasonably be expected to have a material adverse effect on the
business, financial condition, results of operations or properties of Acquiror
and Acquiror Subsidiaries on a consolidated basis.
3.2 Corporate Authorizations. The execution, delivery
and performance of this Agreement and the Certificate of Merger and
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by all necessary corporate action on the part of
Acquiror and Merger Subsidiary. This Agreement has been duly executed and
delivered by Acquiror and Merger Subsidiary and constitutes a valid and binding
obligation of Acquiror and Merger Subsidiary enforceable against Acquiror and
Merger Subsidiary in accordance with its terms. The Certificate of Merger,
when executed and delivered by Acquiror and Merger Subsidiary, will constitute
a valid and binding obligation of Acquiror and Merger Subsidiary enforceable
against Acquiror and Merger Subsidiary in accordance with its terms.
3.3 Tender Offer Documents. The documents (as the same
may be amended, the "Offer Documents") pursuant to which the Offer will be
made, including the Schedule 14D-1 to be filed pursuant to the 1934 Act and all
amendments thereof or supplements thereto (collectively, the "Schedule 14D-1"),
will conform as to form in all material respects with the requirements of the
1934 Act and the rules and regulations promulgated thereunder. The information
contained in the Offer Documents will not contain, as of the respective dates
they are filed with the SEC, any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. The foregoing representations shall not apply to any
information taken or to be taken from the most recent reports filed by C.R.
Gibson under the 1934 Act containing such information or furnished by or on
behalf of C.R. Gibson for inclusion in the Offer Documents.
3.4 Absence of Conflicts. The execution and delivery
by Acquiror and Merger Subsidiary of this Agreement and the Certificate of
Merger and the consummation of the transactions herein and therein contemplated
(assuming the truth and accuracy of each representation and warranty of C.R.
Gibson and compliance by C.R. Gibson with all of its obligations hereunder and
the expiration or termination of the waiting period described in Exhibit A
hereto), do not and will not violate or conflict with, any statute, regulation,
judgment, order, writ, decree or injunction applicable to Acquiror or any of
Acquiror Subsidiaries or any of Acquiror's or the Acquiror Subsidiaries'
properties or assets, except for violations or conflicts that singly or in the
aggregate are not material to the business, operations, financial condition or
properties of Acquiror and the Acquiror Subsidiaries on a consolidated basis.
The execution and delivery by Acquiror and Merger Subsidiary of this Agreement
and the Certificate of Merger and the consummation of the transactions herein
and therein contemplated do not and will not violate, conflict with, result in
a breach of, constitute a default (or an event which with due notice
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or lapse of time or both would constitute a default) under, result in the
termination of, accelerate the performance required by, or result in the
creation of any lien, pledge, security interest, charge or other encumbrance
upon any of the properties or assets of Acquiror or any of the Acquiror
Subsidiaries under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, loan agreement or other agreement,
instrument or obligation to which Acquiror or any of the Acquiror Subsidiaries
is a party, or by which it or any of its respective properties or assets may be
bound or affected, except for any of the foregoing that singly or in the
aggregate are not material to the business, financial condition, results of
operations or properties of Acquiror and Acquiror Subsidiaries on a
consolidated basis.
3.5 Sufficient Funds. Acquiror has and will continue
to have sufficient funds to consummate the transactions contemplated hereby,
including, without limitation, to pay the consideration set forth in Articles
1. and 2. hereof in accordance with the terms of this Agreement, and has all
requisite power and authority to make payment of such funds in the manner
described herein and such funds are and will be at the times of the
consummation of the Offer and the Merger free and clear of all claims, liens
and encumbrances. To the extent such funds have been or will be obtained
through any loan or financing arrangement, the execution, delivery and
performance of any agreements relating to such arrangements, by Acquiror and
the other party or parties have been duly and validly authorized by all
necessary corporate action on the part of Acquiror and such other party or
parties and constitute valid and binding obligations of Acquiror and such other
party or parties in accordance with their terms. All conditions to the
obligations of the other party or parties to such loan or financing
arrangements to make the loans contemplated thereby have been fulfilled or
waived.
3.6 Information in Proxy or Information Statement.
None of the information supplied or to be supplied by Acquiror or any of the
Acquiror Subsidiaries for inclusion or incorporation by reference in the Proxy
or Information Statement (as hereinafter defined) and any amendment or
supplement thereto will, at the date of mailing to stockholders and at the time
of the meeting of stockholders of C.R. Gibson to be held in connection with the
Merger, contain any untrue statement of a 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.
3.7 Broker's and Finder's Fees. Except for PaineWebber
Incorporated, no agent, broker, investment banker, person or firm acting on
behalf of Acquiror or Merger Subsidiary or under its authority is or will be
entitled to any broker's or finder's fee or any other commission or similar fee
directly or indirectly in connection with any of the transactions contemplated
herein.
3.8 Reliance on Representations of C.R. Gibson. Each
of Acquiror and Merger Subsidiary acknowledges that, except for the
representations and warranties of C.R. Gibson specifically set forth in Article
4. hereof, it has not relied on any information provided by C.R. Gibson to
Acquiror and/or Merger Subsidiary in connection with the transactions
contemplated by this Agreement as constituting a representation or warranty of
C.R. Gibson.
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4. REPRESENTATIONS AND WARRANTIES OF C.R. GIBSON
C.R. Gibson represents and warrants to Acquiror and Merger Subsidiary as
follows:
4.1 Organization, Good Standing and Capital Stock of C.R.
Gibson; C.R. Gibson Subsidiaries.
(a) Each of C.R. Gibson and the C.R. Gibson
Subsidiaries (as defined below) is a corporation duly organized, validly
existing and in good standing under the laws of its state of incorporation.
C.R. Gibson has all requisite corporate power and authority to enter into this
Agreement and the Certificate of Merger and to perform the obligations
hereunder and thereunder to be performed by it, and each of C.R. Gibson and the
C.R. Gibson Subsidiaries have all requisite corporate power and authority to
own, operate and lease its properties and carry on its business as it is now
being conducted. Each of C.R. Gibson and the C.R. Gibson Subsidiaries is duly
qualified and in good standing in each jurisdiction where the character of the
properties owned or leased by it or the nature of the business transacted by it
requires that it be so qualified, except where the failure to so qualify or be
in good standing could not reasonably be expected to have a material adverse
effect on the business, financial condition, results of operations or
properties of C.R. Gibson and the C.R. Gibson Subsidiaries on a consolidated
basis. The authorized capital stock of C.R. Gibson consists of 15,000,000
shares of C.R. Gibson Common and 200,000 shares of Preferred Stock, $10.00 par
value (the "C.R. Gibson Preferred Stock"). As of the close of business on July
31, 1995, (i) 7,439,451 shares of C.R. Gibson Common and no shares of C.R.
Gibson Preferred were outstanding, (ii) there were 322,509 shares of C.R.
Gibson Common subject to Options then outstanding and unexercised with option
exercise prices therefor as set forth in Schedule 2.2. hereto, and (iii)
320,662 shares of C.R. Gibson Common were held in the treasury of C.R. Gibson.
All outstanding shares of C.R. Gibson Common have been duly authorized and are
validly issued, fully paid and nonassessable. The C.R. Gibson Common is not
subject to any restriction on transfer under the articles of incorporation or
by-laws of C.R. Gibson. Except as set forth in the Schedules hereto, C.R.
Gibson has not issued or granted nor is it a party to any outstanding warrants,
options, rights, calls or commitments of any kind relating to, or any presently
effective agreements or understandings with respect to, its capital stock,
whether issued or unissued, or securities convertible into its capital stock.
Other than as set forth in the C.R. Gibson Reports, C.R. Gibson is not a party
to, or bound by, any contract, indenture, agreement or instrument or any note,
debenture, bond or other security, under the terms of which, or pursuant to
which, its right to declare or pay dividends on its capital stock is
restricted. C.R. Gibson's capital stock is not subject to any preemptive
rights of any stockholder.
(b) A list of all subsidiaries of C.R. Gibson (the
"C.R. Gibson Subsidiaries") and the number of shares and percentage of capital
stock owned by C.R. Gibson in such subsidiary is set forth on Schedule 4.1.(b)
hereof. All of the outstanding shares of capital stock of each of the C.R.
Gibson Subsidiaries owned by C.R. Gibson have been duly authorized and validly
issued and are fully paid and nonassessable and are owned by C.R. Gibson free
and clear of all claims, liens and encumbrances.
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4.2 Corporate Authorizations. The execution, delivery and
performance of this Agreement and the Certificate of Merger have been duly and
validly authorized by all necessary corporate action on the part of C.R.
Gibson, except that this Agreement and the Merger must be approved by its
stockholders in accordance with the GCL. This Agreement has been duly executed
and delivered by C.R. Gibson and constitutes a valid and binding obligation of
C.R. Gibson enforceable against C.R. Gibson in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally. The Certificate of Merger, when executed and
delivered by C.R. Gibson, will constitute a valid and binding obligation of
C.R. Gibson enforceable against C.R. Gibson in accordance with its terms.
4.3 Absence of Certain Changes. Since June 30, 1995, there has
not been any material adverse change in the business, financial condition,
results of operations or properties of C.R. Gibson and the C.R. Gibson
Subsidiaries on a consolidated basis and no event or condition has occurred or
exists that could reasonably be expected to result in such a material adverse
change. Except as disclosed in the C.R. Gibson Reports (as hereinafter
defined) or in Schedule 4.3. hereto, since June 30, 1995, there has not been
(a) any declaration, setting aside or payment of any dividend or other
distribution in respect of the C.R. Gibson Common, other than regular quarterly
cash dividends, or any redemption or other acquisition by C.R. Gibson of any
shares of its capital stock; (b) any increase in the rate or terms of
compensation, severance or termination benefits payable or to become payable by
C.R. Gibson to its directors, officers or employees whose aggregate annual
remuneration exceeds $50,000, except increases occurring in the ordinary course
of business in accordance with its customary practices (which shall include
normal periodic performance reviews and related compensation and benefit
increases); (c) any increase in the rate or terms of any bonus, insurance,
pension or other employee benefit plan, payment or arrangement made to, for or
with any such directors, officers or employees whose aggregate annual
remuneration exceeds $50,000, except increases occurring in the ordinary course
of business in accordance with its customary practices (which shall include
normal periodic performance reviews and related compensation and benefit
increases); (d) any entry into any agreement, commitment or transaction by C.R.
Gibson which is material to C.R. Gibson and its subsidiaries taken as a whole,
except agreements, commitments or transactions in the ordinary course of
business; or (e) any change by C.R. Gibson in accounting methods, principles or
practices except as required or permitted by generally accepted accounting
principles.
4.4 Absence of Conflicts. The execution and delivery by C.R.
Gibson of this Agreement and the Certificate of Merger and the consummation of
the transactions herein and therein contemplated (subject to receipt of the
stockholder approval referred to in Section 6.2.(e) hereof and assuming the
truth and accuracy of each representation and warranty of Acquiror and Merger
Subsidiary and compliance by Acquiror and Merger Subsidiary with all of their
obligations hereunder and the expiration or termination of the waiting period
described in Exhibit A hereto), do not and will not violate or conflict with,
any statute, regulation, judgment, order, writ, decree or injunction applicable
to C.R. Gibson or the C.R. Gibson Subsidiaries or any of C.R. Gibson's or the
C.R. Gibson Subsidiaries' properties or assets, except for violations or
conflicts that singly or in the aggregate are not material to the business,
financial condition, results of operations or properties of C.R. Gibson and the
C.R. Gibson Subsidiaries on a consolidated basis. Except as otherwise
disclosed in Schedule 4.4. hereto, the execution and
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delivery by C.R. Gibson of this Agreement and the Certificate of Merger and the
consummation of the transactions herein and therein contemplated do not and
will not violate, conflict with, result in a breach of, constitute a default
(or an event which with due notice or lapse of time or both would constitute a
default) under, result in the termination of, accelerate the performance
required by, or result in the creation of any lien, pledge, security interest,
charge or other encumbrance upon any of the properties or assets of C.R. Gibson
or the C.R. Gibson Subsidiaries under, any of the terms, conditions, or
provisions of any note, bond, mortgage, indenture, deed of trust, loan
agreement or other agreement, instrument or obligation to which C.R. Gibson or
any of the C.R. Gibson Subsidiaries is a party, or by which it or any of its
properties or assets may be bound or affected, except for any of the foregoing
that singly or in the aggregate are not material to the business, financial
condition, results of operations or properties of C.R. Gibson and the C.R.
Gibson Subsidiaries on a consolidated basis.
4.5 The C.R. Gibson Reports. Since December 31, 1991, C.R.
Gibson has timely filed all reports and other documents required to be filed by
it under the 1934 Act. C.R. Gibson's Annual Reports on Form 10-K for the years
ended December 31, 1992, 1993, and 1994, its Quarterly Reports for the periods
ended March 31, 1995 and June 30, 1995 and its Proxy Statement dated April 14,
1995 (collectively, the "C.R. Gibson Reports"), as of their respective dates,
complied as to form in all materials respects with the published rules and
regulations of the SEC with respect thereto and did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements in or incorporated by reference into the C.R. Gibson Reports,
including any related notes and schedules, complied as to form in all material
respects on the dates thereof with the then applicable accounting requirements
and published rules and regulations of the SEC with respect thereto and fairly
present the consolidated financial position of C.R. Gibson and the C.R. Gibson
Subsidiaries as at the dates thereof and the consolidated results of
operations, changes in shareholders' equity, and cash flows of C.R. Gibson and
the C.R. Gibson Subsidiaries for the periods set forth therein, in each case in
accordance with generally accepted accounting principles consistently applied
during the periods involved (except as may be noted therein or, in the case of
unaudited financial statements, as permitted by Regulation S-X of the SEC) and
subject, in the case of unaudited financial statements, to normal recurring
year-end adjustments which are not material. Except as set forth in the C.R.
Gibson Reports or with respect to the agreements identified in Items 1 and 2 of
Schedule 4.12.(f) hereto, neither C.R. Gibson nor any of the C.R. Gibson
Subsidiaries has any liability or obligation of any nature (whether accrued,
absolute, contingent or otherwise) which would be required to be reflected on a
balance sheet, or in the notes thereto, prepared in accordance with generally
accepted accounting principles, except for liabilities and obligations incurred
in the ordinary course of business consistent with past practice since June 30,
1995 which would not, individually or in the aggregate, have a material adverse
effect on the business, financial conditions, results of operations, properties
or prospects of C.R. Gibson and the C.R. Gibson Subsidiaries on a consolidated
basis.
4.6 Compliance with Laws. Neither C.R. Gibson nor any of the
C.R. Gibson Subsidiaries is in violation of any statute, rule, regulation,
order, writ, decree, or injunction of any court or governmental agency or any
body having jurisdiction over it or any of its properties
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which violation has had, or, if enforced, could reasonably be expected to have,
singly or in the aggregate, a material adverse effect on the business,
financial condition, results of operations or properties of C.R. Gibson and the
C.R. Gibson Subsidiaries on a consolidated basis.
4.7 Compliance with Agreements. Neither C.R. Gibson nor any of
the C.R. Gibson Subsidiaries is in default under or in violation of any
provision of its certificate of incorporation or by-laws (or equivalent
documents) or any note, bond, indenture, mortgage, deed of trust, loan
agreement or any other agreement to which it is a party or by which it is bound
or to which any of its properties or assets is subject, other than such
defaults or violations as could not reasonably be expected to have, singly or
in the aggregate, a material adverse effect on the business, financial
condition, results of operations or properties of C.R. Gibson and the C.R.
Gibson Subsidiaries on a consolidated basis. All contracts and agreements to
which C.R. Gibson or any of the C.R. Gibson Subsidiaries is a party or by which
any of their respective assets is bound are valid and binding, in full force
and effect and enforceable against the parties thereto in accordance with their
respective terms, other than (i) such failures to be so valid and binding, in
full force and effect or enforceable which would not, either individually or in
the aggregate, be reasonably likely to have a material adverse effect on the
business, financial condition, results of operations or properties of C.R.
Gibson and the C.R. Gibson Subsidiaries on a consolidated basis and (ii)
subject to applicable bankruptcy, insolvency, moratorium or other similar laws
relating to creditors' rights and general principles of equity. There is not
under any such contract or agreement any existing default, or event which,
after notice or lapse of time, or both, would constitute a default, by C.R.
Gibson or any of the C.R. Gibson Subsidiaries, or to C.R. Gibson's knowledge,
any other party, except to the extent such default would not be reasonably
likely to cause a material adverse effect on the business, financial condition,
results of operations or properties of C.R. Gibson and the C.R. Gibson
Subsidiaries on a consolidated basis.
4.8 Litigation; Regulatory Action. Except as otherwise
disclosed on Schedule 4.8. hereto, neither C.R. Gibson nor any of the C.R.
Gibson Subsidiaries is engaged in, or party to any legal action or other
proceeding or investigation, nor, to the knowledge of C.R. Gibson, is any such
claim, legal action or other proceeding or investigation threatened against
C.R. Gibson or any of the C.R. Gibson Subsidiaries, nor, to the knowledge of
C.R. Gibson, does any state of facts exist other than those previously
disclosed to Acquiror in writing which is reasonably likely to result in any
such claim, legal action or other proceeding against C.R. Gibson or any of the
C.R. Gibson Subsidiaries, before any court, arbitrator or governmental agency,
the outcome of which could reasonably be expected to materially adversely
affect the business, financial condition, results of operations or properties
of C.R. Gibson and the C.R. Gibson Subsidiaries on a consolidated basis. There
are no outstanding orders, rulings, decrees, judgments, memoranda of
understanding or stipulations to which C.R. Gibson or any of the C.R. Gibson
Subsidiaries is a party or by which it is bound by or with any court,
arbitrator or governmental agency that singly or in the aggregate is reasonably
likely to have a material adverse effect on the business, financial condition,
results of operations or properties of C.R. Gibson and the C.R. Gibson
Subsidiaries on a consolidated basis.
4.9 Taxes. Each of C.R. Gibson and the C.R. Gibson
Subsidiaries has filed with appropriate governmental agencies all federal,
state, local and foreign tax returns (including,
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without limitation, estimated tax returns, employer's withholding tax returns,
other withholding tax returns and Federal Unemployment Tax Act returns)
required to be filed by it and have made available to Acquiror complete and
accurate copies of such filings; and each such return is complete and accurate
in all material respects. Each of C.R. Gibson and the C.R. Gibson Subsidiaries
has paid all Taxes and other assessments due and has paid any amounts that are
required to be paid without any return required to be filed. There are
included, in each of the balance sheets contained in the C.R. Gibson Reports,
adequate provisions for the payment of all unpaid Taxes of C.R. Gibson and the
C.R. Gibson Subsidiaries, including interest and penalties (if any), whether or
not disputed, for the periods then ended and all periods prior thereto. Except
as otherwise disclosed on Schedule 4.9. hereto, there are no liens for Taxes
upon C.R. Gibson or the C.R. Gibson Subsidiaries or their assets, except liens
for current taxes not yet due and payable, and neither C.R. Gibson nor any of
the C.R. Gibson Subsidiaries is a party to any action or proceeding by any
governmental authority for assessment or collection of Taxes, nor has any claim
or assessment for collection of Taxes been asserted against it, nor to the best
knowledge of C.R. Gibson is any such claim or assessment threatened. There is
no audit examination, deficiency or refund litigation or matter in controversy
with respect to any Taxes that might result in a determination the effect of
which could reasonably be expected to be materially adverse to the financial
condition or results of operations of C.R. Gibson and the C.R. Gibson
Subsidiaries on a consolidated basis. None of C.R. Gibson and the C.R. Gibson
Subsidiaries is currently the beneficiary of any extension of time within which
to file any tax return other than extensions applicable to its tax returns for
the year ended December 31, 1994. No claim has been made by an authority in a
jurisdiction where any of C.R. Gibson and the C.R. Gibson Subsidiaries does not
file tax returns that it is or may be subject to taxation by that jurisdiction.
Neither C.R. Gibson nor any of the C.R. Gibson Subsidiaries are liable for
Taxes of any member of any affiliated group (other than the consolidated group
in which C.R. Gibson is the common parent) that at the time included as a
member C.R. Gibson or any of the C.R. Gibson Subsidiaries (or any predecessor
thereto, by merger or otherwise) by reason of C.R. Gibson or any of the C.R.
Gibson Subsidiaries being severally liable for the entire tax of such
affiliated group pursuant to the Treasury Regulations Section 1.1502-6 or any
analogous state or local tax provision. None of C.R. Gibson and the C.R.
Gibson Subsidiaries has waived any statute of limitations in respect of Taxes
or agreed to any extension of time with respect to a tax assessment or
deficiency. None of C.R. Gibson and the C.R. Gibson Subsidiaries has filed a
consent under Code Section 341(f) concerning collapsible corporations. The
transactions contemplated by this Agreement will not result in a payment or
series of payments to any employee of C.R. Gibson or any of the C.R. Gibson
Subsidiaries or any other person of an "excess parachute payment" within the
meaning of Section 280G of the Code. As used in this Agreement, the term
"Taxes" includes, without limitation, any federal, state, local or foreign
income, leasing, franchise, excise, gross receipts, sales, use, occupational,
tangible and intangible personal property and stamp taxes, payments in lieu of
taxes, levies, duties, imposts, assessments, fees, charges, and withholdings of
any nature whatsoever, together with any related penalties fines, additions to
tax or interest thereon.
4.10 Confidentiality Agreement. C.R. Gibson has entered into
agreements with each of the parties to whom an Offering Memorandum in the form
delivered on behalf of C.R. Gibson to Acquiror providing that such party will
retain in confidence the confidential information provided by or on behalf of
C.R. Gibson and that such party will not make or
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encourage an Acquisition Proposal (as hereinafter defined) for a period of at
least one year from the date of such agreement
4.11 Information in Proxy or Information Statement and Offer
Documents. None of the information supplied or to be supplied by C.R. Gibson
or any of the C.R. Gibson Subsidiaries for inclusion or incorporation by
reference in the Proxy or Information Statement or the Offer Documents and any
amendment or supplement thereto will, at the date of mailing to stockholders
and with respect to the Proxy or Information Statement, at the time of the
meeting of stockholders of C.R. Gibson to be held in connection with the Merger
or at the date of the last required written consent of a stockholder of C.R.
Gibson if no meeting is held in connection with the Merger, contain any untrue
statement of a 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. The Proxy or
Information Statement (except for such portions thereof that relate only to
Acquiror) will comply in all material respects with the provisions of the 1934
Act and the rules and regulations thereunder.
4.12 Employee Retirement Income Security Act of 1974 and Other
Employment Matters.
(a) Except for the Employment Agreements or as set
forth or described in Schedule 4.12.(a) hereto, neither C.R. Gibson nor the
C.R. Gibson Subsidiaries has established and maintains or contributes to, or
has an obligation to contribute to, or has liability with respect to, any plan,
program, arrangement, agreement or commitment which is an employment, or
deferred compensation agreement, or an executive compensation, incentive bonus
or other bonus, employee pension, profit-sharing, savings, retirement, stock
option, stock purchase, severance pay, life, health, disability or accident
insurance or vacation, plan, program, arrangement, agreement or commitment,
including, without limitation, any "employee benefit plan" as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") (individually, an "Employee Plan," and collectively, the "Employee
Plans"). No Employee Plan is a multi-employer plan (as defined in Section
4001(a)(3) of ERISA) or a multiple employer plan (as defined in Section 413(c)
of the Internal Revenue Code of 1986 (the "Code"));
(b) With respect to each employee benefit plan
(including, without limitation, the Employee Plans and any plan maintained by
any entity which would be treated as a "single employer" together with C.R.
Gibson or any C.R. Gibson Subsidiary (within the meaning of Section 4001(b)(1)
of ERISA)) that is subject to the provisions of Title IV of ERISA and with
respect to which C.R. Gibson or any C.R. Gibson Subsidiary may, directly or
indirectly, incur any liability:
(i) No such plan has been terminated so as to
result, directly or indirectly, in any material liability, contingent or
otherwise in excess of amounts already accrued or otherwise reflected in the
financial records of C.R. Gibson or any C.R. Gibson Subsidiary as of June 30,
1995, of C.R. Gibson or any C.R. Gibson Subsidiary under Title IV of ERISA;
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(ii) No complete or partial withdrawal from such
plan has been made by C.R. Gibson or any C.R. Gibson Subsidiary, or by any
other person, so as to result in a liability of C.R. Gibson or any C.R. Gibson
Subsidiary, whether such liability is contingent or otherwise, except as
otherwise reflected in the financial records of C.R. Gibson or any C.R. Gibson
Subsidiary as of June 30, 1995;
(iii) No condition or event currently exists or
currently is expected to occur that could result, directly or indirectly, in
any material liability of C.R. Gibson or any C.R. Gibson Subsidiary under Title
IV of ERISA, whether to the Pension Benefit Guaranty Corporation ("PBGC") or
otherwise in excess of amounts already accrued or otherwise reflected in the
financial records of C.R. Gibson or any C.R. Gibson Subsidiary as of June 30,
1995 (except for required premium payments under Title IV of ERISA, which
payments have been or will be made when due), on account of the termination of
any such plan;
(iv) If any such plan were to be terminated as of
the date hereof or as of the Effective Time, none of C.R. Gibson, any of the
C.R. Gibson Subsidiaries or the Acquiror would incur any material liability
under Title IV of ERISA in excess of amounts already accrued or otherwise
reflected in the financial records of C.R. Gibson or any C.R. Gibson Subsidiary
as of June 30, 1995;
(v) No "reportable event" (as defined in Section
4043 of ERISA) has occurred with respect to any such plan (other than any such
reportable events for which the 30-day notice period has been waived by the
PBGC); and
(vi) No such plan which is subject to Section 302
of ERISA or Section 412 of the Code has incurred any "accumulated funding
deficiency" (as defined in Section 302 of ERISA and Section 412 of the Code,
respectively), whether or not waived;
(c) No event has occurred in connection with which C.R.
Gibson, any C.R. Gibson Subsidiary or any Employee Plan, directly or
indirectly, could be subject to any material liability under ERISA, the Code or
any other law, regulation or governmental order applicable to any Employee Plan
or under any agreement, instrument, statute, rule of law or regulation pursuant
to or under which C.R. Gibson or a C.R. Gibson Subsidiary has agreed to
indemnify or is required to indemnify any person against liability incurred
under, or for a violation or failure to satisfy the requirements of, any such
statute, regulation or order, other than the obligation to pay benefits or plan
expenses in accordance with the terms of any Employee Plan and any applicable
trust thereunder;
(d) With respect to each Employee Plan, (i) all
payments due from C.R. Gibson or any of the C.R. Gibson Subsidiaries to date
have been made when due, and all amounts properly accrued to date or as of the
date of consummation of the Offer as liabilities of C.R. Gibson or any of the
C.R. Gibson Subsidiaries which have not been paid have been or will be properly
recorded in the financial records of C.R. Gibson or such C.R. Gibson
Subsidiary; (ii) each of C.R. Gibson and the C.R. Gibson Subsidiaries has
complied with, and each Employee Plan is in compliance in all material respects
with, all applicable laws and regulations, including,
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without limitation, ERISA and the Code to the extent applicable;
(iii) each Employee Plan which is an "employee pension benefit plan" (as
defined in Section 3(2) of ERISA) and intended to qualify under Section 401 of
the Code has received a favorable determination letter from the Internal
Revenue Service with respect to such qualification, its related trust has been
determined to be exempt from taxation under Section 501(a) of the Code, and
nothing has occurred since the date of such letter that has adversely affected
or is likely adversely to affect such qualification or exemption; (iv) each
Employee Plan which is an "employee welfare benefit plan" (as defined in
Section 3(1) of ERISA) and its related trust (if any) is in compliance in all
material respects with all applicable requirements of the Code (including
Section 4980B of the Code) for obtaining the tax benefits the Code permits and
for which the trust is intended to qualify with respect to such Employee Plan;
and (v) there are no actions, suits or claims pending (other than routine
claims for benefits) or threatened with respect to any Employee Plan or against
the assets of any Employee Plan or against any trust established to fund the
benefits under any Employee Plan;
(e) All material obligations of C.R. Gibson and the
C.R. Gibson Subsidiaries, whether arising by operation of law, by contract or
by past custom, for payments to trusts or other funds or to any governmental
agency or to any individual, director, officer, employee or agent (or his or
her heirs, legatees or legal representatives) with respect to unemployment
compensation or Social Security benefits, or for vacation or holiday pay,
bonuses and other forms of compensation, which are payable to its directors,
officers, employees or agents, have been paid when due;
(f) No Employee Plan provides benefits, including,
without limitation, death or medical benefits (whether or not insured) with
respect to current or former employees of C.R. Gibson or the C.R. Gibson
Subsidiaries beyond their retirement or other termination of service (other
than (i) coverage mandated by Part 6 of Title I of ERISA or Section 4980B of
the Code, (ii) retirement or death benefits under any employee pension benefit
plan that is qualified under Section 401 of the Code, (iii) disability or death
benefits under any employee welfare benefit plan that have been fully provided
for by insurance or otherwise, (iv) unfunded pension plan benefits accrued as
liabilities in the C.R. Gibson Reports, (v) benefits pursuant to agreements
listed on Schedule 4.12.(f) hereto, (vi) benefits in the nature of severance
pay, or (vii) the right to exercise stock options under Employee Plans that are
stock option or stock purchase plans);
(g) Except as otherwise set forth on Schedule 4.12.(g)
hereto, the consummation of the transactions contemplated by this Agreement
will not result (either alone or in conjunction with any other event) in the
payment or series of payments by C.R. Gibson, any of the C.R. Gibson
Subsidiaries or the Acquiror of an "excess parachute payment" within the
meaning of Section 280G of the Code;
(h) Except as otherwise set forth in this Agreement or
the Certificate of Merger or Schedule 4.12.(h) hereto, the consummation of the
transactions contemplated by this Agreement itself and without further action
on the part of any person will not, except as described herein or as may arise
under agreements or obligations referred to in the Schedules hereto or in the
C.R. Gibson Reports, (i) entitle any current or former employee or director of
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C.R. Gibson or the C.R. Gibson Subsidiaries to severance pay, unemployment
compensation or any other payment or (ii) accelerate the time of payment or
vesting, or increase the amount of compensation due to any such current or
former employee or director, under any Employee Plan or otherwise result in
any liability for benefits with respect to any Employee Plan; and
(i) None of C.R. Gibson or the C.R. Gibson Subsidiaries
has a formal plan or commitment, whether legally binding or not, to create any
additional Employee Plan, or to amend or modify any existing Employee Plan
other than amendments required by applicable law which do not materially
increase the cost to C.R. Gibson or any of the C.R. Gibson Subsidiaries of
maintaining such Employee Plan.
4.13 Environmental Matters. Except as otherwise described in
Schedule 4.13. hereto, C.R. Gibson has not received any written notification of
any judicial, administrative, arbitral or other legal proceedings, claims,
actions, causes of action pending or threatened against C.R. Gibson or any of
the C.R. Gibson Subsidiaries seeking to impose on C.R. Gibson or any of the
C.R. Gibson Subsidiaries, that is reasonably likely to result in the imposition
on C.R. Gibson or any of the C.R. Gibson Subsidiaries of, any liability, as a
result of the violation of the Environmental Laws (as defined in Section 13.
hereof), which liability could reasonably be expected to have a material
adverse effect on the business, financial condition, results of operations or
properties of C.R. Gibson and the C.R. Gibson Subsidiaries on a consolidated
basis. Except as otherwise described in Schedule 4.13. hereto, there is no
past or present event, condition or circumstance affecting or activities
related to any real property currently owned or leased by C.R. Gibson or any of
the C.R. Gibson Subsidiaries or any real property collateral securing any loan
or other asset of C.R. Gibson or any of the C.R. Gibson Subsidiaries that is
reasonably likely to give rise to any such material liability.
4.14 Schedule 14D-9. The Schedule 14D-9 shall comply as to form
in all material respects with the applicable requirements of the 1934 Act and
the rules and regulations thereunder and will not, at the respective times the
Schedule 14D-9 or any amendments thereof or supplements thereto are filed with
the SEC, contain any untrue statement of a 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 are made,
not misleading. C.R. Gibson will promptly correct any statements in the
Schedule 14D-9 that have become false or misleading and will take all steps
reasonably necessary to cause such Schedule 14D-9 as so corrected to be filed
with the SEC and to be disseminated to holders of shares of C.R. Gibson Common,
in each case as and to the extent required by applicable law.
4.15 Title to Properties. Each of C.R. Gibson and the C.R.
Gibson Subsidiaries has good and, as to real property, marketable title to all
its properties and assets, real and personal, tangible and intangible,
reflected in its books and records as being owned, free and clear of all liens
and encumbrances, (a) except such as are reflected on the balance sheet of C.R.
Gibson as of June 30, 1995 or incurred thereafter in the ordinary course of
business, (b) except for liens for current taxes not yet due and payable, (c)
except for liens or encumbrances which are normal to the business of C.R.
Gibson and the C.R. Gibson Subsidiaries and are not, in the aggregate, material
in relation to the assets of C.R. Gibson and the C.R. Gibson Subsidiaries on a
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consolidated basis, and (d) except for such imperfections of title, easements
and encumbrances, if any, as do not materially interfere with the present use
of the properties subject thereto or affected thereby, or otherwise materially
impair the consolidated business operations of C.R. Gibson and the C.R. Gibson
Subsidiaries.
4.16 Labor.
(a) Except as would not be reasonably likely to have a
material adverse effect on the business, financial condition, results of
operations or properties of C.R. Gibson and the C.R. Gibson Subsidiaries on a
consolidated basis, (i) each of C.R. Gibson and the C.R. Gibson Subsidiaries
is, and at all times has been, in compliance in all material respects with all
federal, state or other applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, and has not
and is not engaged in any unfair labor practice; (ii) no unfair labor practice
complaint against C.R. Gibson or any of the C.R. Gibson Subsidiaries is pending
before the National Labor Relations Board; (iii) there is no labor strike,
dispute, slowdown or stoppage actually pending or threatened against or
involving C.R. Gibson or any of the C.R. Gibson Subsidiaries; (iv) no
representation question exists respecting the employees of C.R. Gibson or any
of the C.R. Gibson Subsidiaries; (v) no agreement is pending and no claim
therefor has been asserted; (vi) no collective bargaining agreement is
currently being negotiated by C.R. Gibson or any of the C.R. Gibson
Subsidiaries; and (vii) C.R. Gibson and the C.R. Gibson Subsidiaries taken as a
whole have not experienced any material labor difficulty during the last three
years.
(b) Except as set forth in the Schedules hereto,
neither C.R. Gibson nor any of the C.R. Gibson Subsidiaries has any written, or
to the knowledge of C.R. Gibson, any binding oral, employment or severance
agreement with any person.
4.17 State Takeover Laws; Stockholder Rights. By action of the
Board of Directors of C.R. Gibson prior to the date hereof (and prior to the
execution hereof), resolutions were duly adopted (a) approving the execution,
delivery and performance of this Agreement and the Certificate of Merger and
transactions contemplated hereby and thereby and (b) exempting from the
requirements of Section 203 of the GCL any and all "business combinations" as
defined in the GCL of any type, whether now or hereafter contemplated, between
C.R. Gibson and Acquiror and/or any of its existing and future subsidiaries or
affiliates.
4.18 Broker's and Finder's Fees. Except for Goldman, Sachs &
Co. pursuant to an engagement letter dated May 9, 1995, a true and correct copy
of which will be furnished to Acquiror, no agent, broker, investment banker,
person or firm acting on behalf of C.R. Gibson or under its authority is or
will be entitled to any broker's or finder's fee or any other commission or
similar fee directly or indirectly in connection with any of the transactions
contemplated hereby.
4.19 Intellectual Property. Schedule 4.19. hereto is an
accurate and complete list of all (i) material trademarks, trade names, service
marks, service names and any applications therefor, title to all of which is
held by C.R. Gibson or the C.R. Gibson Subsidiaries free and clear of all
adverse claims, liens, security agreements, registrations or other encumbrances
and
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(ii) material licenses (whether as licensor or licensee) of C.R. Gibson and
each C.R. Gibson Subsidiary used or required by C.R. Gibson or any C.R. Gibson
Subsidiary in the operation of their respective businesses. For the purposes of
this Section 4.19., a material license shall be defined as any license
agreement under which, during the year ending December 31, 1994, C.R. Gibson
generated sales equal to or exceeding $250,000. Except as specifically noted
in Schedule 4.19., all material licenses are valid and binding, in full force
and effect and, to the knowledge of C.R. Gibson, enforceable against the
parties thereto in accordance with their terms. The intellectual property
described in (i) and (ii) above is collectively referred to herein as the
"C.R.Gibson Intellectual Property." There is no complaint, arbitration,
lawsuit, suit, claim or other dispute which asserts that C.R. Gibson or any
C.R. Gibson Subsidiary is violating or infringing upon any trademark, trade
name, service mark, service name, copyright or other intellectual property of
any other person in which a determination adverse to C.R. Gibson or the C.R.
Gibson Subsidiary would be reasonably likely to have a material adverse effect
on the business, financial condition, results of operations or properties of
C.R. Gibson and the C.R. Gibson Subsidiaries on a consolidated basis. Except
as set forth in Schedule 4.19., neither C.R. Gibson or any C.R. Gibson
Subsidiary is any way making use of any trademark, trade name, service mark,
service name, copyright, know-how, process, confidential information,
proprietary technology, trade secret or other intellectual property of any
person which is material to the business of C.R. Gibson and the C.R. Gibson
Subsidiaries taken as a whole, except with the consent of such person. To the
knowledge of C.R. Gibson, there is no person violating or infringing upon the
license rights, trademarks, trade names, service marks, service names,
copyrights and any applications therefor or making any use of any know-how,
process, confidential information, proprietary technology or trade secret of
C.R. Gibson or any C.R. Gibson Subsidiary. Except as described in Schedule
4.19., neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will conflict with or
result in any violation or default (with or without notice or lapse of time or
both) or give rise to any right of termination, cancellation or acceleration or
the payment of any material additional sum under any of the terms, conditions
or provisions of any material license or the loss or encumbrance of any C.R.
Gibson Intellectual Property or material benefit related thereto.
5. CONDUCT OF BUSINESS PENDING CONSUMMATION OF THE OFFER
5.1 Negative Covenants. C.R. Gibson covenants and agrees with
Acquiror and Merger Subsidiary that, from and after the date hereof until the
consummation of the Offer, except as specifically contemplated by this
Agreement and the Certificate of Merger or otherwise approved in writing by
Acquiror, none of C.R. Gibson or the C.R. Gibson Subsidiaries shall, directly
or indirectly, do or agree to do any of the following:
(a) Propose or adopt any change to its articles of
incorporation or by-laws (or equivalent documents);
(b) Lease, sell, mortgage, subject to lien, pledge,
assign, encumber, swap or otherwise dispose of any of its assets, except (i) in
the ordinary course of business, and (ii) for adequate consideration, or enter
into any transaction that would have the practical effect of an acquisition by
any other person of a material interest in it;
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(c) Redeem, purchase, reclassify, retire or otherwise
acquire any shares of its capital stock, any securities or obligations
convertible into or exchangeable for any shares of its capital stock;
(d) Make any change in the number of the authorized,
issued or outstanding shares of capital stock or other equity security of it
(other than, with respect to C.R. Gibson, pursuant to the exercise of options,
rights or similar securities outstanding as of the date hereof) grant any
option or commitment relating to its capital stock or any security convertible
into such capital stock or any security, the value of which is measured by such
capital stock or any security subordinated to the claims of general creditors,
or issue, sell or retire any debt obligations except in the ordinary course of
business;
(e) Declare, set aside or pay any dividend or other
distribution in respect of any shares of capital stock in liquidation or
otherwise (including, without limitation, any stock dividend or distribution)
other than dividends declared and paid by any of the C.R. Gibson Subsidiaries
to C.R. Gibson and with respect to C.R. Gibson, other than regular quarterly
cash dividends in an amount not to exceed $0.04 per share in accordance with
past practices;
(f) Incur any material direct or contingent liabilities
or commitments except in the ordinary course of business consistent with past
practice;
(g) (i) Merge or consolidate with any other corporation
or other entity; (ii) acquire any stock or other equity securities or interest
in, or purchase or otherwise acquire any assets of, any corporation, other
entity (except in the ordinary course of business); or (iii) effect any
reorganization or recapitalization;
(h) Terminate, amend, modify, establish or enter into
any employment or severance contract or any Employee Plan or other employee
benefit plan, program or arrangement or fringe benefits; or enter into, commit
to enter into, renew or amend any employee severance agreement other than in
the ordinary course of business consistent with past practice or grant any
material increases in the compensation or benefits to any director, officer or
employee whose aggregate annual remuneration exceeds $50,000. In addition, the
foregoing shall not prevent the hiring of employees reasonably necessary for
the conduct of the business of C.R. Gibson and the C.R. Gibson Subsidiaries as
employees at will on terms substantially similar to those of current employees
performing comparable tasks and having comparable responsibilities;
(i) Enter into any new lines of business, engage or
participate in any material transaction other than in the ordinary course of
business (including, without limitation, acquiring material real or personal
property), or make any capital expenditures in excess of an aggregate of
$25,000 per month with respect to any project (including repairs, renewals and
replacements) provided that the aggregate expenditures with respect to any
individual project shall not exceed $250,000, except relocations as may be
necessary as a result of fire or other natural disaster and expenditures from
net insurance proceeds received with respect to damage to or the destruction of
any property to repair, renew or replace such property; or enter into any
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new, or amend or modify any existing, material contract, agreement, arrangement
or commitment other than in the ordinary course of business;
(j) Other than as may be specifically required or
permitted by this Agreement, authorize or make any material change in the
following or any of them: (i) business or operations, (ii) operational
policies, activities or practices, (iii) accounting policies, standards or
practices, except as may be required by changes in generally accepted
accounting principles as concurred in by C.R. Gibson's independent auditors;
(k) Except in the ordinary course of business, waive or
release any material right or other debt or claim; provided, however, that C.R.
Gibson may take any such action if, within five business days after C.R. Gibson
requests in writing that Acquiror consent to the taking of such action,
Acquiror has approved such request in writing or has not responded in writing
to such request;
(l) Amend, modify, terminate or fail to renew or
preserve the business organization, material rights, franchises, permits or
licenses of C.R. Gibson and the C.R. Gibson Subsidiaries;
(m) For any amount in excess of the sum of (i) $50,000,
(ii) the proceeds of any applicable insurance and (iii) any amounts reserved or
accrued by C.R. Gibson with respect to any litigation or potential litigation
as of June 30, 1995, settle or otherwise take any action to release or reduce
any rights with respect to any litigation (whether by counterclaim or
otherwise) in which C.R. Gibson or any of the C.R. Gibson Subsidiaries is or
becomes a defendant; or
(n) Enter into any agreement or obligation, the terms
of which would be violated by the consummation of the transactions contemplated
by this Agreement, take any action which would make any of its representations
or warranties contained herein untrue or incorrect in any material respect if
made or deemed to be made immediately thereafter, or cause any of the
conditions set forth in Article 8. hereof not to be satisfied.
5.2 Affirmative Covenants. C.R. Gibson covenants and agrees
with Acquiror and Merger Subsidiary that, from and after the date hereof until
the consummation of the Offer, except as specifically contemplated by this
Agreement and the Certificate of Merger or otherwise approved in writing by
Acquiror, each of C.R. Gibson and the C.R. Gibson Subsidiaries shall:
(a) Maintain its books, accounts and records in
accordance with generally accepted accounting principles consistently applied
except for changes required under applicable accounting principles;
(b) Comply in all material respects with all laws
applicable to the conduct of its business and with this Agreement, it being
understood, however, that this covenant shall not apply where the failure so to
comply could not reasonably be expected to have a
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material adverse effect on the business, results of operations, properties or
financial condition of C.R. Gibson and the C.R. Gibson Subsidiaries on a
consolidated basis;
(c) Conduct its business only in the usual, regular and
ordinary course and in substantially the same manner as currently being
conducted;
(d) Duly and timely file all reports, tax returns and
other documents required to be filed with federal, state, local and other
authorities and, unless contesting the same in good faith after establishing
reasonable reserves, pay when required to be paid all taxes indicated by such
returns or otherwise lawfully levied or assessed upon C.R. Gibson or the C.R.
Gibson Subsidiaries or any of their properties;
(e) Use reasonable efforts to keep in force with
reputable insurers, at not less than present limits, commercial and other
similar insurance of the types currently maintained by it;
(f) Make all payments and contributions to and under
all Employee Plans on or before the date on which such payments and
contributions shall be due; and
(g) With respect to C.R. Gibson, make all filings
required to be filed by C.R. Gibson with the SEC prior to the Closing Date and
furnish to Acquiror copies of all such reports promptly after they are filed.
6. ADDITIONAL COVENANTS
6.1 Covenants of Acquiror. Acquiror hereby covenants and
agrees with C.R. Gibson as follows:
(a) Employees. Acquiror shall have the right (but not
the obligation) to employ, as officers and employees of Acquiror or the
Surviving Corporation or other subsidiaries of Acquiror immediately following
the Effective Time, all persons who are officers and employees of C.R. Gibson
or the C.R. Gibson Subsidiaries immediately before the Effective Time;
provided, however, that this provision imposes no obligation on any officer or
employee to accept employment with Acquiror or any of its subsidiaries.
(b) Employee Benefits. (i) Acquiror shall, with
respect to each person who remains an employee of the Surviving Corporation or
any of its subsidiaries following the consummation of the Offer (each a
"Continued Employee"), provide the benefits described in this Section 6.1.(b);
(ii) each Continued Employee shall be eligible, as an employee of Acquiror or
any of its subsidiaries, to participate in such employee benefit plans, as
defined in Section 3(3) of ERISA, or nonqualified employee benefit plans or
deferred compensation, stock option, bonus or incentive plans or other employee
benefit or fringe benefit programs on terms that are no less favorable than
those available to other employees of Acquiror (the "Acquiror's Plans"). For
purposes of vesting and eligibility to begin participation with respect to
Acquiror's Plans, each
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Continued Employee shall be credited with his or her term of service with C.R.
Gibson or the C.R. Gibson Subsidiaries.
(c) Employment Agreements. As of the consummation of
the Offer, the Acquiror shall assume and agree to perform the Employment
Agreements in the same manner and to the same extent that C.R. Gibson is then
required to perform them.
(d) Indemnification. Acquiror agrees that provisions
for indemnification not materially less favorable than those now existing in
favor of the employees, agents, directors or officers of C.R. Gibson or any of
the C.R. Gibson Subsidiaries as provided in their respective certificate or
articles of incorporation or by-laws or pursuant to any agreement shall survive
the Merger and shall continue in full force and effect with respect to acts or
omissions occurring prior to the Effective Time for a period of six years. In
the event of any claim or litigation giving rise to such indemnification,
Acquiror will provide the indemnified party with reasonable access to and the
right to copy all documents and other information relating to the subject
matter of the litigation and will reasonably cooperate in the defense of such
litigation. Acquiror agrees to maintain for a period of two years directors'
and officers' liability insurance coverage maintained by C.R. Gibson on the
date hereof (or substantially equivalent coverage under substitute policies)
with respect to any claims arising out of any actions or omissions prior to the
Effective Time.
(e) Amendment of Offer. Acquiror and Merger Subsidiary
reserve the right to waive any condition set forth in Exhibit A to this
Agreement, to increase the price per share payable in the Offer or to make
other changes in the terms and conditions of the Offer, provided that no change
may be made which decreases the price per share payable or the maximum number
of shares to be purchased in the Offer or which imposes conditions to the Offer
additional to those set forth in Exhibit A to this Agreement without the prior
approval of the Board of Directors of C.R. Gibson.
6.2 Joint Covenants. Each of the parties hereto covenants and
agrees with the other as follows:
(a) Certain Events. If, prior to the consummation of
the Offer, either party becomes aware of the occurrence of any event which
would (i) constitute or cause a material breach by it of any of the
representations and warranties herein or would have constituted or caused a
material breach by it of the representations and warranties herein had such
event occurred or been known prior to the date hereof or (ii) cause, or be
reasonably likely to cause, any condition included in Article 8. hereof not to
be satisfied, such party shall promptly give written notice thereof to the
other party, and shall, unless the same has been waived in writing by the other
party, use its reasonable efforts to remedy the same.
(b) Taking of Necessary Action. Subject to the terms
and conditions of this Agreement, each party shall use its best efforts to take
or cause to be taken all actions and to do or cause to be done all things
necessary, proper or advisable under applicable laws and
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regulations to bring about the transactions contemplated by this Agreement and
the Certificate of Merger as soon as practicable, including without limitation
obtaining the approval of this Agreement and the Merger as promptly as
practicable following consummation of the Offer, unless this Agreement is
terminated as provided herein, and shall not willfully or intentionally breach
this Agreement or the Certificate of Merger.
(c) Press Releases. No public announcement of the
execution of this Agreement or the transactions contemplated hereby shall be
made by or on behalf of C.R. Gibson or Acquiror or Merger Subsidiary except in
a press release mutually agreed upon by C.R. Gibson and Acquiror. C.R. Gibson
and Acquiror shall cooperate in the development and distribution of all news
releases and other public disclosures with respect to the transactions
contemplated by this Agreement and shall not issue any press release or written
statement for general circulation relating to this Agreement or the
transactions contemplated hereby without the mutual agreement of C.R. Gibson
and Acquiror, unless disclosure is otherwise required under laws or regulations
applicable to C.R. Gibson or Acquiror.
(d) Cooperation; Access to Information. Each party
shall cooperate fully with the other in carrying out the transactions
contemplated hereby or by the Certificate of Merger. On and after the date
hereof, C.R. Gibson shall, after receipt of prior written notice, give to
Acquiror and its representatives reasonable access to its and its subsidiaries'
books, records, reports to regulatory authorities, offices and other facilities
and to its and its subsidiaries' employees, agents, attorneys and independent
accountants, and shall comply with all reasonable requests for the furnishing
of financial statements (including all its monthly and quarterly financial
statements) and other information and documents, subject to limitations upon
the disclosure of certain matters imposed by law or as to which it has an
obligation to its or its subsidiaries' customers to maintain confidentiality.
The availability or actual delivery of information shall not affect the
covenants, representations and warranties of the party providing such
information that are contained in this Agreement or in the Certificate of
Merger or in any certificates or other documents delivered pursuant hereto, or
any of the rights of the recipient of such information. In the event that this
Agreement is terminated, Acquiror shall return all nonpublic documents
furnished hereunder, shall destroy all documents or portions thereof prepared
by Acquiror that contain nonpublic information furnished by C.R. Gibson
pursuant hereto and, in any event, shall hold all nonpublic information
received pursuant hereto in the same degree of confidence with which it
maintains its own like information unless or until such information is or
becomes a matter of public knowledge or is or becomes known to Acquiror through
persons (other than the party providing such information) having no obligation
to maintain such information in confidence. Notwithstanding any other
provision hereof, the parties hereto shall continue to be bound by all
confidentiality agreements previously executed by and between them.
(e) Consents; Stockholder Approval. Each party shall
use its best efforts to obtain as promptly as practicable (and in any event
prior to the Closing) all consents or waivers that may be required under any
loan or other agreement or document to which it or any of its subsidiaries is a
party, or by which it or any of its subsidiaries is bound, and to obtain, give
and make as promptly as practicable such other consents, approvals, notices and
filings as are
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necessary or advisable in connection with the Offer, the Merger and this
Agreement. C.R. Gibson shall, through its Board of Directors, call a meeting
of the holders of the C.R. Gibson Common to be held as soon as practicable
following the consummation of the Offer or accept written consents from
stockholders of C.R. Gibson for the purpose of approving this Agreement and the
Merger. C.R. Gibson shall, through its Board of Directors (subject to the
provisions of Section 6.3.(a)), recommend approval of this Agreement and the
Merger and as reasonably requested by Acquiror shall use its best efforts
(including, without limitation, soliciting proxies for such approval, if
necessary) to obtain such stockholder approval. At any such meeting, all
outstanding shares of C.R. Gibson Common then owned by Acquiror, Merger
Subsidiary or any of the Acquiror Subsidiaries will be voted in favor of the
Merger and for approval and adoption of this Agreement.
6.3 Additional Covenants of C.R. Gibson. Except as
specifically contemplated by this Agreement or otherwise approved in writing by
Acquiror, C.R. Gibson further covenants and agrees with Acquiror as follows:
(a) Acquisition Proposals. C.R. Gibson agrees (a) that
neither it nor any of the C.R. Gibson Subsidiaries shall, and it shall direct
and use its best efforts to cause its and the C.R. Gibson Subsidiaries'
officers, directors, employees, agents, representatives and affiliates
(including, without limitation, any investment banker, attorney or accountant
retained by it or any of the C.R. Gibson Subsidiaries) (collectively, the "C.R.
Gibson Representatives") not to, initiate, solicit or encourage, directly or
indirectly, any inquiries or the making or implementation of any proposal or
offer (including, without limitation, any proposal or offer to its stockholders
but excluding the transaction contemplated by this Agreement) with respect to a
merger, acquisition, consolidation, business combination, recapitalization,
liquidation or similar transaction involving, or any purchase of a significant
amount of the assets of or more than 25% of any equity securities of, C.R.
Gibson (any such proposal or offering being hereinafter referred to as an
"Acquisition Proposal") or engage or participate in any negotiations or
discussions concerning, or provide any confidential information or data to, or
have any discussions with, any corporation, partnership, person or other entity
or group relating to any Acquisition Proposal, or otherwise assist or
facilitate any effort to attempt to make or implement an Acquisition Proposal;
(b) that it will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing and will take the necessary steps to
inform the individuals or entities referred to above of the obligations
undertaken in this Section 6.3.(a); and (c) that it will notify Acquiror
promptly if any such inquiries or proposals (whether formal or informal) are
received by, any such information is requested from, or any such negotiations
or discussions are sought to be initiated or continued with it or any of the
C.R. Gibson Representatives and will promptly communicate to Acquiror the terms
of any proposal or inquiry which it may receive. Notwithstanding the foregoing
and provided none of C.R. Gibson, the C.R. Gibson Subsidiaries or the C.R.
Gibson Representatives is otherwise in violation of this Section 6.3.(a), the
Board of Directors of C.R. Gibson may furnish information to, or enter into
discussions or negotiations with, any person that makes an unsolicited bona
fide proposal in writing, not subject to any financing contingency, to acquire
C.R. Gibson pursuant to a merger, consolidation, share exchange, purchase of a
substantial portion of the assets, business combination or other similar
transaction, if, and only to the extent
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that (A) the Board of Directors determines in good faith (based on the written
opinion of C.R. Gibson's outside counsel) that such action is required for the
Board of Directors to comply with its fiduciary duties to stockholders imposed
by law, (B) the Board of Directors determines in good faith (based on the
written opinion of a financial advisor of nationally recognized reputation)
that such transaction would be more favorable to C.R. Gibson's stockholders
than the Offer; (C) prior to or concurrently with furnishing such information
to, or entering into discussions or negotiations with, such a person or entity,
C.R. Gibson provides written notice to Acquiror to the effect that it is
furnishing information to, or entering into discussions or negotiations with,
such a person or entity, and (D) C.R. Gibson keeps Acquiror informed of the
status of any such discussions or negotiations.
(b) State Takeover Laws. C.R. Gibson shall use its
best efforts in good faith to take all reasonable steps required to be taken on
or after the date hereof to exempt the transactions contemplated by this
Agreement and the Certificate of Merger and any business combination between
C.R. Gibson and Acquiror from any applicable state takeover law, including,
without limitation, any business combination law.
(c) Confidentiality Agreements. C.R. Gibson shall not
terminate, amend, modify or waive any provision of any confidentiality or
standstill agreement to which C.R. Gibson or any of the C.R. Gibson
Subsidiaries is a party. C.R. Gibson agrees to enforce, to the extent
reasonably requested by Acquiror, the provisions of any such agreements,
including, but not limited to, the seeking of injunctions to prevent any
breaches of such agreements and to enforce specifically the terms and
provisions thereof in any court of the United States or any state thereof
having jurisdiction.
(d) Adjustments to Reserves. Prior to the consummation
of the Offer, C.R. Gibson shall review and, to the extent determined necessary
or advisable, consistent with generally accepted accounting principles and the
accounting rules, regulations and interpretations of the SEC and its staff,
modify and change its accrual and reserve policies and practices (including
classifications and levels of reserves and other accruals and reserves to (i)
reflect the Surviving Corporation's plans with respect to the conduct of C.R.
Gibson's business following the Merger and (ii) make adequate provision and
accrue for the costs and expenses relating thereto including without limitation
expenses relating to taxes, stock option plans, employment agreements,
severance benefits and split dollar insurance premiums) so as to be applied
consistently on a basis with those of Acquiror. Prior to consummation of the
Offer, C.R. Gibson also will adjust account receivables and inventory reserves
as may be appropriate, consistent with generally accepted accounting principles
and the accounting rules, regulations and interpretations of the SEC and its
staff, in light of the then anticipated post-Closing disposition of certain
C.R. Gibson assets. The parties agree to cooperate in preparing for the
implementation of the adjustments contemplated by this Section 6.3.(d).
Notwithstanding the foregoing, C.R. Gibson shall not be obligated to take in
any respect of any such action pursuant to this Section 6.3.(d) (other than
pursuant to the preceding sentence) unless and until Acquiror acknowledges in
writing that all conditions to its obligation to consummate the Offer have been
satisfied. But, upon such acknowledgement, C.R. Gibson will take such actions
as are necessary to complete the payments, expenses and adjustments
contemplated by this Section 6.3.(d).
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7. SECURITIES LAW FILINGS AND HSR FILING
7.1 Preparation of Proxy or Information Statement. If
necessary to consummate the Merger promptly after the termination or expiration
of the Offer, C.R. Gibson shall prepare and each of the parties hereto will
cooperate fully with each other in such preparation, of a proxy statement of
C.R. Gibson, for solicitation of proxies in connection with the meeting of
stockholders referred to in Section 6.2.(e) hereof or an information statement
relating to the Merger if no such solicitation of proxies is required under
applicable law (any such proxy statement or information statement being
collectively referred to herein as the "Proxy or Information Statement") (and
any and all amendments thereto) and supply all information necessary, in the
opinion of their respective counsel, in order to complete the preparation of
the Proxy Statement.
7.2 Hart-Scott-Rodino Filing. Each of the parties hereto shall
use its best efforts in good faith to take or cause to be taken all such steps
as shall be necessary or advisable to effectuate the filing of a Notification
and Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976
(the "HSR Act") in connection with the Offer and the Merger. Without limiting
the generality of the undertaking in this Section 7.2., the Acquiror shall:
(a) take promptly any or all of the following actions
to the extent reasonably necessary to eliminate any concerns on the part of any
federal, state, local or foreign governmental authority with jurisdiction over
the enforcement of any applicable antitrust laws ("Government Antitrust
Authority") regarding the legality under any antitrust law of the consummation
of the Offer or the Merger: entering into negotiations, providing information,
making proposals, entering into and performing agreements or submitting to
judicial or administrative orders, or selling or otherwise disposing of, or
holding separate (through the establishment of a trust or otherwise),
particular assets or categories of assets, or businesses, of C.R. Gibson or any
of the C.R. Gibson Subsidiaries;
(b) use its best reasonable efforts to prevent the
entry in a judicial or administrative proceeding brought under any antitrust
law by any Government Antitrust Authority or any other party of the permanent
or preliminary injunction or other order that would make consummation of the
Offer or the Merger in accordance with the terms of this Agreement unlawful or
that would prevent or delay such consummation, including without limitation
taking the steps contemplated by Section 7.2.(a);
(c) take promptly, in the event that such an injunction
or order has been issued in such a proceeding, any and all steps, including,
without limitation, the appeal thereof, the posting of a bond or the steps
contemplated by Section 7.2.(a), reasonably necessary to vacate, modify or
suspend such injunction or order so as to permit such consummation as promptly
as practicable; and
(d) take promptly all other actions and do all other
things reasonably necessary and proper to avoid or eliminate each and every
impediment under any antitrust law
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that may be asserted by any Government Antitrust Authority or any other party
to the consummation of the Offer or the Merger in accordance with the terms of
this Agreement.
8. CONDITIONS
8.1 Fairness Letter. It shall be a condition to the obligation
of the Board of Directors of C.R. Gibson to recommend acceptance of the Offer
that C.R. Gibson shall have received a letter from Goldman, Sachs & Co., dated
the date of the Schedule 14D-9, to the effect that the consideration to be
received by the holders of C.R. Gibson Common pursuant to this Agreement is
fair to such holders.
8.2 Condition to Consummation of Merger. It shall be a
condition to the obligations of Acquiror, Merger Subsidiary and C.R. Gibson to
cause the Merger to be consummated that the Offer has been consummated.
8.3 Closing. Subject to the satisfaction or waiver of the
condition precedent specified in Section 8.2. hereof and of the terms set
forth herein, the consummation of the transactions contemplated hereby (the
"Closing") shall take place at the offices of Acquiror in Nashville, Tennessee,
at 10:00 am local time on the fifth business day after the later of the date
upon which the waiting period specified in Section (b) of Exhibit A hereto has
expired or been terminated or the date stockholder approval of the Merger is
obtained (or at such other place or on such other date and time as the parties
may agree) (the "Closing Date") At the Closing, the parties shall execute the
Certificate of Merger and such other documents as may be deemed necessary or
advisable in the opinion of Acquiror or C.R. Gibson to effectuate the Merger as
promptly as practicable. At the Closing, the parties shall cause their
representatives to file the Certificate of Merger with the Secretary of State
of the State of Delaware and shall take such other actions as may be deemed
necessary or advisable in the opinion of Acquiror or C.R. Gibson to effectuate
the Merger.
9. ABANDONMENT AND TERMINATION OF THE MERGER
9.1 Termination. This Agreement and the Certificate of Merger
may be abandoned and terminated at any time before the Effective Time, whether
before or after any stockholder action, as follows:
(a) At any time prior to consummation of the Offer, by
the mutual consent of C.R. Gibson and Acquiror evidenced in a written
instrument;
(b) At any time prior to consummation of the Offer, by
C.R. Gibson or Acquiror if there shall have been a judicial or regulatory
determination that any material provision of this Agreement or the Certificate
of Merger is illegal, invalid, or unenforceable (unless the illegal, invalid or
unenforceable provision is waived by the party whom such provision is intended
to benefit);
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(c) By C.R. Gibson or Acquiror, if the Offer shall
expire or have been terminated on or after March 31, 1996 without any shares of
C.R. Gibson Common being purchased thereunder; provided, however, that the
right to terminate this Agreement pursuant to this clause shall not be
available to any party whose failure to fulfill any covenant of this Agreement
has been the cause of, or resulted in the failure of the Offer to have been
consummated on or prior to such date;
(d) By Acquiror (i) in the event any representation or
warranty of C.R. Gibson contained herein is or becomes materially inaccurate or
any covenant or agreement of C.R. Gibson is materially breached by C.R. Gibson
prior to consummation of the Offer, (ii) C.R. Gibson fails to cure such
inaccuracy or breach within 30 days of its receipt of written notice thereof
from Acquiror and (iii) Acquiror provides C.R. Gibson with a written notice of
termination within 30 days after the earlier of the expiration of such 30-day
period or the date it receives a written notice from C.R. Gibson stating that
C.R. Gibson is unable or unwilling to cure such inaccuracy or breach; or
(e) By C.R. Gibson (i) in the event any representation
or warranty of Acquiror or Merger Subsidiary contained herein is or becomes
materially inaccurate or any covenant or agreement of Acquiror or Merger
Subsidiary is materially breached by Acquiror or Merger Subsidiary, (ii)
Acquiror or Merger Subsidiary fails to cure such inaccuracy or breach within 30
days of its receipt of written notice thereof from C.R. Gibson and (iii) C.R.
Gibson provides Acquiror or Merger Subsidiary with written notice of
termination within 30 days after the earlier of the expiration of such 30-day
period or the date it receives written notice from Acquiror or Merger
Subsidiary stating that Acquiror or Merger Subsidiary is unable or unwilling to
cure such inaccuracy or breach.
In the event any party elects to effect any termination as set forth
in Section 9.1. above, it shall give written notice to the other party hereto
specifying the basis for such termination.
9.2 Effect of Termination. In the event of termination of this
Agreement pursuant to Section 9.1. hereof, this Agreement (and the Certificate
of Merger, if it shall have been executed and delivered prior thereto) shall
become void and have no effect, except that the penultimate sentence of Section
6.2.(d), Section 9.3. and Section 10.1. shall remain in full force and effect,
and there shall be no further liability on the part of Acquiror, Merger
Subsidiary or C.R. Gibson or their respective officers or directors to any of
the others except under such Sections and except for any liability arising out
of a breach of this Agreement.
9.3 Fees and Expenses Upon Certain Events. In the event that
(A) any person (other than Acquiror or any of its affiliates) shall have
become, prior to the termination of this Agreement, the beneficial owner of 50%
or more of the outstanding shares of C.R. Gibson Common, (B) the Offer shall
have expired at a time when the condition set forth in paragraph (a) of Exhibit
A hereto shall not have been satisfied and at any time on or prior to one year
after the expiration of the Offer any person (other than Acquiror or any of its
affiliates) shall acquire beneficial ownership of 50% or more of the
outstanding shares of C.R. Gibson Common or shall
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consummate an Acquisition Proposal, (C) at any time prior to the termination of
this Agreement, any person (other than Acquiror or any of its affiliates) shall
publicly announce any Acquisition Proposal and, at any time on or prior to one
year after the termination of this Agreement, shall become the beneficial owner
of 50% or more of the outstanding shares of C.R. Gibson Common or shall
consummate an Acquisition Proposal, then C.R. Gibson shall promptly, but in no
event later than two business days after the first of such events to occur, pay
Acquiror $3.0 million and Acquiror's Expenses (as hereinafter defined) in an
amount up to but not to exceed $500,000 by wire transfer of same day funds. In
the event the Board of Directors of C.R. Gibson shall modify or amend its
recommendation of the Offer in a manner adverse to Acquiror or shall withdraw
its recommendation of the Offer, or shall resolve to do any of the foregoing,
or shall have failed to reject any Acquisition Proposal within 10 business days
after receipt by C.R. Gibson or public announcement thereof, then C.R. Gibson
shall pay Acquiror's Expenses (up to $500,000) within five business days of the
submission of statements therefor. "Acquiror's Expenses" shall mean documented
out-of-pocket fees and expenses incurred or paid by or on behalf of Acquiror in
connection with the Offer, the Merger or the consummation of any of the
transactions contemplated by this Agreement, including, without limitation, all
legal, investment banking, printing, depositary and related fees and expenses.
C.R. Gibson acknowledges that the agreements contained in this Section 9.3. are
an integral part of the transactions contemplated in this Agreement;
accordingly, if C.R. Gibson fails to promptly pay the amount due pursuant to
this Section 9.3., and, in order to obtain such payment, Acquiror commences a
suit which results in a judgment against C.R. Gibson for the fee set forth in
this Section 9.3., C.R. Gibson shall pay to Acquiror its costs and expenses
(including attorneys' fees) in connection with such suit, together with
interest on the amount of the fee at the rate of 10% per annum.
10. EXPENSES
10.1 Expenses. Except as otherwise provided herein, the costs
and expenses (out of pocket or otherwise) incurred by the parties in connection
with the transactions contemplated by this Agreement and the Certificate of
Merger shall be borne as follows:
(a) Acquiror's Expenses. Acquiror shall bear all fees
and expenses of its and Merger Subsidiary's counsel, accountants and investment
bankers, and all other costs and expenses incurred by it and Merger Subsidiary
in preparation of this Agreement, the Offer Documents to be distributed by it,
and the Certificate of Merger, its preparation and filing and prosecution of
all applications for regulatory approval and any appeals therefrom and filings
made under the HSR Act (including all blue sky fees and expenses) and the cost
of the printing and filing of the Proxy or Information Statement.
(b) C.R. Gibson's Expenses. C.R. Gibson shall bear all
fees and expenses of its counsel, accountants and investment bankers and all
other costs and expenses incurred by it in preparation of this Agreement and
the Certificate of Merger and the calling and holding of a meeting of its
stockholders to consider and act upon this Agreement and the Merger and the
furnishing of information to or other cooperation with Acquiror in connection
with preparation of the Offer Documents and any securities filings and
regulatory applications, and any appeals therefrom.
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11. AMENDMENT AND WAIVER
11.1 Amendment. The parties hereto may amend, modify or
supplement this Agreement in whole or in part by written agreement between the
parties hereto specifically referring to the provision or provisions to be
amended, modified or supplemented at any time before or after the adoption of
this Agreement and the Certificate of Merger by the stockholders contemplated
hereby; provided, however, that after any such stockholder approval any such
amendment will be subject to further approval of such stockholders if such
further approval is required under Delaware law; provided, further, that any
amendment hereof after consummation of the Offer which would decrease the
Exchange Price or impose additional conditions on the obligation of Acquiror or
Merger Subsidiary to consummate the Merger shall become effective only if
approved by the holders of a majority of the C.R. Gibson Common then
outstanding which is not owned by Acquiror, Merger Subsidiary or any of the
Acquiror Subsidiaries.
11.2 Waiver; Cumulative Rights. Any terms or provisions of this
Agreement (other than the requirement for stockholder approval or any other
matter which cannot under applicable law be waived such as filings required by
the HSR Act) may be waived at any time by the party which is entitled to the
benefits thereof by an instrument in writing specifically referring to the
provision or provisions to be waived. Each and every right granted to any
party hereunder or under the Certificate of Merger, or under any other document
delivered in connection herewith or therewith, and each and every right allowed
it by law or equity, shall be cumulative and may be exercised from time to
time. The failure of either party at any time or times to require performance
of any provision hereof shall in no manner affect such party's right at a later
time to enforce the same. No waiver by either party of a condition or of the
breach of any term, covenant, representation or warranty contained in this
Agreement or the Certificate of Merger, in any one or more instances, shall be
deemed to be or construed as a further or continuing waiver of any such
condition or breach or a waiver of any other condition or of the breach of any
other term, covenant, representation or warranty of this Agreement or the
Certificate of Merger. No investigation, review or audit by Acquiror of C.R.
Gibson or by C.R. Gibson of Acquiror prior to or after the date hereof shall
stop or prevent Acquiror or C.R. Gibson from exercising any right hereunder or
be deemed to be a waiver of any such right.
12. NOTICES
12.1 Notices. All notices, requests, demands, and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered or delivered by reliable overnight courier
or by facsimile transmission or mailed, first class postage prepaid (and shall
be deemed delivered upon delivery) as follows:
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To Acquiror:
Thomas Nelson, Inc.
Nelson Place at Elm Hill Pike
Nashville, Tennessee 37214
Attn: President
Facsimile number: (615) 883-6353
with required copies to:
James H. Cheek, III
Bass, Berry & Sims
First American Center
Nashville, Tennessee 37238
Facsimile number: (615) 742-6298
To C.R. Gibson:
The C.R. Gibson Company
32 Knight Street
Norwalk, Connecticut 06856
Attn: Frank A. Rosenberry, President and Chief Executive Officer
Facsimile Number: (203) 847-7613
with required copies to:
Paul G. Hughes, Esq.
Cummings & Lockwood
P.O. Box 120
Four Stamford Plaza
Stamford, Connecticut 06904
Facsimile Number: (203) 351-4499
or to such other address and to such other or additional persons as either
party hereto may designate in a writing delivered to the other hereunder.
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13. DEFINITIONS
13.1 "1934 Act" shall have the meaning assigned to it in
Section 1.1. of this Agreement.
13.2 "Acquiror" shall have the meaning assigned to it in the
first paragraph of this Agreement.
13.3 "Acquiror Subsidiaries" shall have the meaning assigned
to it in Section 2.1. of this Agreement.
13.4 "Acquiror's Plans" shall have the meaning assigned to it
in Section 6.1.(b) of this Agreement.
13.5 "Acquisition Proposal" shall have the meaning assigned to
it in Section 6.3.(a) of this Agreement.
13.6 "Agreement" shall mean this Tender Offer and Merger
Agreement as the same may be amended from time to time.
13.7 "C.R. Gibson" shall have the meaning assigned to it in
the first paragraph of this Agreement.
13.8 "C.R. Gibson Common" shall have the meaning assigned to
it in Section 2.1. of this Agreement.
13.9 "C.R. Gibson Intellectual Property" shall have the
meaning assigned to it in Section 4.19. of this Agreement.
13.10 "C.R. Gibson Preferred Stock" shall have the meaning
assigned to it in Section 4.1.(a) of this Agreement.
13.11 "C.R. Gibson Reports" shall have the meaning assigned to
it in Section 4.5. of this Agreement.
13.12 "C.R. Gibson Representatives" shall have the meaning
assigned to it in Section 6.3.(a) of this Agreement.
13.13 "C.R. Gibson Subsidiaries" shall mean the corporations
listed on Schedule 4.1.(b) hereto.
13.14 "Certificate of Merger" shall have the meaning assigned
to it in Section 2.1. of this Agreement.
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13.15 "Closing Date" shall have the meaning assigned to it in
Section 8.3. of this Agreement.
13.16 Acquiror's Expenses" shall have the meaning assigned to
it in Section 9.3. of this Agreement.
13.17 "Closing" shall have the meaning assigned to it in
Section 8.3. of this Agreement.
13.18 "Code" shall have the meaning assigned to it in Section
4.12.(a) of this Agreement.
13.19 "Continued Employee" shall have the meaning assigned to
it in Section 6.1.(b) of this Agreement.
13.20 "Dissenting Shares" shall have the meaning assigned to it
in Section 2.1. of this Agreement.
13.21 "Dissenting Stockholder" shall have the meaning assigned
to it in Section 2.1. of this Agreement.
13.22 "ERISA" shall have the meaning assigned to it in Section
4.12.(a) of this Agreement.
13.23 "Effective Date" shall have the meaning assigned to it in
Section 2.1. of this Agreement.
13.24 "Effective Time" shall have the meaning assigned to it in
Section 2.1. of this Agreement.
13.25 "Employee Plan" shall have the meaning assigned to it in
Section 4.12.(a) of this Agreement.
13.26 "Employee Plans" shall have the meaning assigned to it in
Section 4.12.(a) of this Agreement.
13.27 "Employment Agreements" shall mean the Employment
Agreements listed on Schedule 13.27. hereto.
13.28 "Environmental Laws" shall mean any state or federal
environmental statute, code, authorization, regulation or ordinance relating to
the protection, preservation or restoration of the environment.
13.29 "Exchange Price" shall have the meaning assigned to it in
Section 2.1. of this Agreement.
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13.30 "GCL" shall have the meaning assigned to it in Section
4.2. of this Agreement.
13.31 "Government Antitrust Authority" shall have the meaning
assigned to it in Section 7.2. of this Agreement.
13.32 "HSR Act" shall have the meaning assigned to it in
Section 7.2. of this Agreement.
13.33 "Merger" shall have the meaning assigned to it in the
first "WHEREAS" clause of this Agreement.
13.34 "Merger Subsidiary" shall have the meaning assigned to it
in the first paragraph of this Agreement.
13.35 "Offer" shall have the meaning assigned to it in the
second "WHEREAS" clause of this Agreement.
13.36 "Offer Documents" shall have the same meaning assigned to
it in Section 3.3. of this Agreement.
13.37 "Offer Price" shall have the meaning assigned to it in
the second "WHEREAS" clause of this Agreement.
13.38 "Option Plan" shall have the meaning assigned to it in
Section 2.2. of this Agreement.
13.39 "Options" shall have the meaning assigned to it in
Section 2.2. of this Agreement.
13.40 "PBGC" shall have the meaning assigned to it in Section
4.12.(b)(iii) of this Agreement.
13.41 "Proxy or Information Statement" shall have the meaning
assigned to it in Section 7.2. of this Agreement.
13.42 "SEC" shall have the meaning assigned to it in Section
1.2. of this Agreement.
13.43 "Schedule 14D-9" shall have the meaning assigned to it in
Section 1.2. of this Agreement.
13.44 "Schedule 14D-1" shall have the meaning assigned to it in
Section 3.3. of this Agreement.
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13.45 "Surviving Corporation" shall have the meaning assigned
to it in Section 2.1. of this Agreement.
13.46 "Taxes" shall have the meaning assigned to it in Section
4.9. of this Agreement.
14. OTHER PROVISIONS
14.1 Termination of Representations and Warranties. All
representations and warranties in this Agreement or in any closing certificate
delivered pursuant hereto shall expire with, and be terminated and extinguished
at, the consummation of the Offer.
14.2 Governing Law. Except where federal law specifically
applies, this Agreement shall be construed and interpreted according to the
laws of the State of Delaware without regard to conflicts of laws principles
thereof.
14.3 Whole Agreement. This Agreement together with the
exhibits and schedules hereto, embody the entire contract between the parties,
and no understanding or agreement, verbal or otherwise, with respect to the
subject matter hereof exists between the parties, except as expressly set forth
herein or in any such document.
14.4 Benefit and Binding Effect. This Agreement and the
Certificate of Merger shall be binding upon and inure to the benefit of the
parties named herein and therein and their respective successors and assigns;
provided, however, that neither this Agreement, the Certificate of Merger nor
any of the rights, interests or obligations hereunder or thereunder shall be
assigned by any of the parties hereto without the prior written consent of the
other party hereto. It is the intention of the parties hereto that, following
consummation of the Offer, the holders of C.R. Gibson Common then outstanding
other than Acquiror, Merger Subsidiary or any of the Acquiror Subsidiaries
shall be third party beneficiaries of this Agreement.
14.5 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
14.6 Headings. Article headings and section headings as
contained in this Agreement are inserted for convenience of reference only and
shall not affect the meaning or interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.
ATTEST: THOMAS NELSON, INC.
/s/ Stuart A. Heaton By /s/ Joe L. Powers
--------------------------------- -------------------------------------------
Title: EVP & Secretary
----------------------------------------
ATTEST: NELSON ACQUISITION CORP.
/s/ Stuart A. Heaton By /s/ S. Joseph Moore
-------------------------------- --------------------------------------------
Title: President
-----------------------------------------
ATTEST: THE C.R. GIBSON COMPANY
/s/ James M. Harrison By /s/ Frank A. Rosenberry
------------------------------ -------------------------------------------
James M. Harrison Frank A. Rosenberry
Secretary President and Chief Executive Officer
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EXHIBITS
Exhibit A - Conditions of the Offer
Exhibit B - Certificate of Merger
41
EXHIBIT A
Conditions of the Offer
Conditions to Consummation of Offer. The obligations of Acquiror and
Merger Subsidiary to cause the Offer to be consummated shall be subject to the
satisfaction on or before the consummation thereof of all of the following
conditions, except as Acquiror may waive such conditions in writing:
(a) Minimum Number of Shares Tendered. Not less than a
majority of the sum of the outstanding shares of C.R. Gibson Common and the
Options shall have been properly tendered and not withdrawn pursuant to the
Offer.
(b) Expiration or Termination of Waiting Period Under HSR
Act. The waiting period under the HSR Act applicable to the consummation of
the Offer shall have expired or been terminated.
(c) No Proceedings, Etc. None of Acquiror, Merger
Subsidiary or C.R. Gibson shall be subject to any order, decree or injunction
of a court or governmental agency of competent jurisdiction which enjoins or
prohibits the consummation of the transactions contemplated by this Agreement
or the exercise of control by Acquiror over C.R. Gibson following the Offer.
(d) Representations, Warranties and Covenants. Any
representations and warranties of C.R. Gibson contained in this Agreement that
are qualified as to materiality shall be true and correct and any of the
representations and warranties that are not so qualified shall be true and
correct in all material respects on and as of the date of consummation of the
Offer as if such representations and warranties were made on and as of the date
of such date (except where such representations and warranties are stated as of
a specific date), and C.R. Gibson shall have performed in all material respects
all agreements and covenants required by this Agreement to be performed by it
on or prior to such date, provided, however, that no representation and
warranty shall be deemed to have been breached and no covenant shall be deemed
to have been violated as a result of actions taken by C.R. Gibson pursuant to
Section 6.3.(d) of the Agreement.
(e) Officers' Certificates. C.R. Gibson shall have
furnished to Acquiror a certificate dated as of the date of consummation of the
Offer, signed by C.R. Gibson's Chief Executive Officer and Chief Financial
Officer, to the effect that (i) to the best knowledge of each of them, the
representations and warranties of C.R. Gibson contained in this Agreement are
true and correct in all material respects as of such date (except where such
representations and warranties are stated as of a specific date) and C.R.
Gibson has performed in all material respects all agreements, covenants and
obligations hereunder required to be performed by it on or prior to such date.
42
(f) There shall not have occurred (i) any general
suspension of trading in, or limitation on prices for, securities on the New
York Stock Exchange, (ii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States, or (iii) any
material limitation (whether or not mandatory) by any governmental authority
on, or any other event which might materially affect the extension of credit
generally by lending institutions.
(g) There shall have not occurred any material adverse
change in the business, financial condition, results of operations or
properties of C.R. Gibson and the C.R. Gibson Subsidiaries on a consolidated
basis.
(h) (i) The Board of Directors of C.R. Gibson shall not
have withdrawn or modified in a manner adverse to Acquiror or Merger Subsidiary
its approval or recommendation of the Offer, the Merger or this Agreement, or
approved or recommended any Acquisition Proposal (other than with Acquiror or
any of its affiliates), (ii) C.R. Gibson shall not have entered into any
agreement with respect to any Acquisition Proposal (other than with Acquiror or
any of its affiliates) and (iii) the Board of Directors of C.R. Gibson or any
committee thereof shall not have resolved to take any of the foregoing actions.
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EXHIBIT B
CERTIFICATE OF MERGER
OF
MERGER SUBSIDIARY
INTO
THE C.R. GIBSON COMPANY
The undersigned, The C.R. Gibson Company., a corporation
organized and existing under and by virtue of the General Corporation Law of
the State of Delaware, does hereby certify:
FIRST: That the name and state of incorporation of each of
the constituent corporations of the merger are as follows:
NAME STATE OF INCORPORATION
---- ----------------------
The C.R. Gibson Company Delaware
Nelson Acquisition Corp. Delaware
SECOND: That a Tender Offer and Merger Agreement (the "Merger
Agreement") between Thomas Nelson, Inc., Nelson Acquisition Corp. and The C.R.
Gibson Company providing for the merger (the "Merger") of Nelson Acquisition
Corp. with and into The C.R. Gibson Company has been approved, adopted,
certified, executed and acknowledged by each of the constituent corporations in
accordance with the requirements of Section 252(c) of the General Corporation
Law of the State of Delaware.
THIRD: That the name of the surviving corporation of the
merger is The C.R. Gibson Company, a Delaware corporation.
FOURTH: That the Certificate of Incorporation of The C.R.
Gibson Company, a Delaware corporation, and the surviving corporation of the
Merger, shall be the Certificate of Incorporation of the surviving corporation
of the Merger.
FIFTH: That the executed Merger Agreement is on file at the
principal place of business of the surviving corporation, the address of which
is 32 Knight Street, Norwalk, Connecticut, 06856.
44
SIXTH: That a copy of the Merger Agreement will be furnished
by the surviving corporation, on request and without cost, to any stockholder
of any constituent corporation.
Dated:
---------------------------
The C.R. Gibson Company
a Delaware corporation
By:
----------------------------------
Name: Frank A. Rosenberry
Title: President and Chief Executive Officer
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SCHEDULES
Schedule 2.2. List of Outstanding Options
Schedule 4.1.(b) Subsidiaries
Schedule 4.3. Certain Changes
Schedule 4.4. Consents
Schedule 4.8. Litigation
Schedule 4.9. Taxes
Schedule 4.12.(a) Employee Matters
Schedule 4.12.(f) Retirement Plans
Schedule 4.12.(g) Excess Parachute Payments
Schedule 4.12.(h) Severance and Related Matters
Schedule 4.13. Environmental Matters
Schedule 4.19. Intellectual Property
Schedule 13.27. Employment Agreements
EX-99.C2
14
STOCK OPTION AGREEMENT, OVERSEAS PRIVATE PARTNERS
1
EXHIBIT (c)(2)
STOCK OPTION AGREEMENT
Stock Option Agreement dated as of September 13, 1995, by and
among Thomas Nelson, Inc., a Tennessee corporation ("Parent"), Nelson
Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of
Parent ("Purchaser"), and OVERSEAS PRIVATE INVESTOR PARTNERS ("Stockholder").
RECITALS
A. Concurrently herewith, Parent, Purchaser and The C.R.
Gibson Company, a Delaware corporation ("C.R. Gibson"), are entering into a
Tender Offer and Merger Agreement of even date herewith (the "Merger
Agreement"; capitalized terms used but not defined herein shall have the
meanings set forth in the Merger Agreement), which contemplates, among other
things, that Purchaser will commence a tender offer to purchase all outstanding
shares of C.R. Gibson Common at a price of $9.00 per share (the "Offer").
Subject to the terms and conditions of the Merger Agreement, the Offer will be
followed by a merger (the "Merger") of Purchaser with and into C.R. Gibson.
B. As of the date hereof, Stockholder owns 405,743
shares of the outstanding C.R. Gibson Common (the "Shares") and desires to (i)
grant to Purchaser the option to acquire all of such Shares at a per share
price equal to the greatest of (x) $9.00, (y) the price per share of C.R.
Gibson Common paid for C.R. Gibson purchased in the Offer or (z) the price paid
in any transaction in which any person or entity shall become the beneficial
owner of 50% or more of the outstanding shares of C.R. Gibson Common; (ii)
grant to Purchaser an irrevocable proxy covering the Shares; (iii) enter into
an agreement whereby the Stockholder agrees to tender and not withdraw the
Shares in the Offer; and (iv) agree not to dispose of the Shares or any
interest therein other than in accordance with this Agreement.
C. Parent and Purchaser will enter into the Merger
Agreement in part in reliance on Stockholder's representations, warranties and
agreements under this Agreement.
AGREEMENT
To implement the foregoing and in consideration of the mutual
agreements contained herein, the parties agree as follows:
2
2
1. THE CONDITIONAL PURCHASE OPTION
1.1. GRANT OF OPTION. Stockholder hereby grants to Purchaser an
irrevocable option to purchase the Shares at a per share price equal to the
greatest of (i) $9.00, (ii) the price per share of C.R. Gibson Common paid for
C.R. Gibson Common purchased in the Offer or (iii) the price paid in any
transaction in which any person or entity shall become the beneficial owner of
50% or more of the C.R. Gibson Common and on the terms and subject to the
conditions set forth herein (the "Option").
1.2 EXERCISE OF OPTION.
(a) The Option may be exercised by Purchaser (or its
designee, which designee must be Parent or a direct or indirect wholly owned
subsidiary of Parent), in whole or in part, at any time, or from time to time,
during the period beginning on the final business day before the expiration
date of the Offer and ending on the Expiration Date. As used herein, the term
"Expiration Date" means the first to occur of any of the following dates:
(x) consummation of the Offer; or (y) the termination of the
Merger Agreement pursuant to its terms (unless Purchaser has
theretofore sent the written notice specified in Section 1.2(b)).
(b) If Purchaser wishes to exercise the Option (the "Option
Purchase"), Purchaser shall send a written notice to Stockholder of its
intention to exercise the Option, specifying the number of Shares to be
purchased, whether Purchaser and/or a designee of Purchaser will be purchasing
the Shares and the place, and, if then known, time and date of the closing of
such purchase (the "Closing Date" or the "Closing"), which date shall not be
less than two business days nor more than ten business days from the date on
which such notice is delivered; provided, that the Closing shall be held only
if (i) such purchase would not otherwise violate or cause the violation of, any
applicable law or regulations (including, the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and regulations
thereunder, or the rules of the New York Stock Exchange or American Stock
Exchange, (ii) no statute, rule, regulation, decree, order or injunction shall
have been promulgated, enacted, entered into or enforced by any governmental
agency or authority or court which prohibits delivery of the Shares, whether
temporary, preliminary or permanent (provided, however, that the parties hereto
shall use their reasonable efforts to have any such order, decree or injunction
vacated or reversed) and (iii) there has been no material breach of the Merger
Agreement by the Purchaser or Parent. In the event the Closing is delayed as a
result of clause (i) or (ii) above, the Closing Date shall be within five
business days following the cessation of such violation,
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3
statute, rule, regulation, decree, order or injunction, as the case may be but
not later than the Expiration Date.
If within one year following an exercise of the Option, there
occurs a transaction in which any person or entity (other than Purchaser,
Parent or an affiliate of either of them) becomes the beneficial owner of 50%
or more of the C.R. Gibson Common and in which the consideration paid to
Purchaser or Parent exceeds the exercise price of the Option, the Purchaser
will, promptly following consummation of such transaction, pay to the
Stockholder an amount equal to the excess of the consideration paid in such
transaction per share of C.R. Gibson Common over the exercise price per share,
multiplied by the number of shares acquired upon exercise of the Option. The
provisions of this paragraph shall terminate at such time as Purchaser, Parent
or any affiliate of either of them owns 100% of the C.R. Gibson Common then
outstanding.
Notwithstanding the foregoing, if a transaction is proposed in
which any person or entity (other than Purchaser, Parent or an affiliate of
either of them) would become the beneficial owner of 50% or more of the
outstanding C.R. Gibson Common and if the exercise price per share under the
Option shall be the amount proposed to be paid in such transaction, any notice
given pursuant to this Section 1.2(b) shall be given to Stockholder not less
than five business days prior to the termination of Stockholder's rights to
participate in such transaction. In the event notice of exercise is given by
Purchaser in accordance with the preceding sentence, the obligation of
Purchaser to purchase the Shares described in such notice shall be subject to
the condition that the transaction in which the person or entity would become
the beneficial owner of 50% or more of the C.R. Gibson Common shall have been
consummated.
2. AGREEMENT TO TENDER SHARES. Stockholder agrees to accept the Offer,
to tender the Shares into the Offer and not to withdraw such Shares prior to
consummation of the Offer or withdrawal of the Offer by Purchaser, unless a
transaction is proposed in which any person or entity (other than Purchaser or
Parent) would become the beneficial owner of 50% or more of the outstanding
C.R. Gibson Common and Purchaser shall not have exercised the Option.
3. IRREVOCABLE PROXY. Stockholder hereby irrevocably appoints S. Joseph
Moore and Joe L. Powers, or either of them, as its attorney and proxy, with
full power of substitution, to vote or to express written consent or dissent in
such manner as such attorney and proxy or its substitute shall, in its sole
discretion, deem proper, and otherwise act (including pursuant to any corporate
action in writing without a meeting) with respect to all of the Shares which it
is entitled to vote at any meeting of stockholders (whether annual or special
and whether or not an adjourned meeting) of C.R. Gibson, or pursuant to written
action taken in lieu of any such meeting or otherwise; provided, however, that
Stockholder grants a proxy hereunder only with respect to the following matters
(the "Designated
4
4
Matters"): (i) votes or consents with respect to the Merger; (ii) votes or
consents with respect to any action or agreement that would result in a breach
of any covenant, representation or warranty or any other obligation or
agreement of C.R. Gibson under the Merger Agreement; (iii) votes or consents
with respect to any action or agreement that would impede, interfere with,
delay, postpone or attempt to discourage the Offer or the Merger, including,
but not limited to, (a) any extraordinary corporate transaction (other than the
Offer and the Merger), such as a merger, other business combination,
reorganization or liquidation involving C.R. Gibson, (b) a sale or transfer of
a material amount of assets of C.R. Gibson or any of its subsidiaries, (c) any
change in the board of directors of C.R. Gibson, except as otherwise agreed to
in writing by Parent, or (d) any material change in the present capitalization
of C.R. Gibson; and (iv) votes or consents relating to any other material
change in the corporate structure or business of C.R. Gibson. This proxy is
irrevocable, is coupled with an interest sufficient in law to support an
irrevocable proxy and is granted in consideration of and as an inducement to
cause the Parent and Purchaser to enter into the transactions contemplated by
this Agreement and the Merger Agreement. This proxy shall revoke any other
proxy granted by Stockholder at any time with respect to the Shares and no
subsequent proxies will be given with respect thereto by Stockholder. In
addition, if subsequent to the date hereof Stockholder is entitled to vote the
Shares for any purpose, it shall take all actions necessary to vote the Shares
pursuant to instructions received from Purchaser; provided, however, that the
provisions of this sentence shall only apply to the Designated Matters. It is
expressly understood and acknowledged by the parties hereto that nothing
contained herein is intended to restrict the Stockholder (if the Stockholder is
also a director of C.R. Gibson) from voting on any matter, or otherwise from
acting, in the Stockholder's capacity as a director of C.R. Gibson with
respect to any matter, including but not limited to, the general management of
over-all operation of C.R. Gibson.
4. EXERCISE OF RIGHTS OF FIRST REFUSAL. The Stockholder hereby agrees
that if Robert G. Bowman or John G. Russell makes a written offer to sell any
shares of C.R. Gibson Common to the New Stockholders (as such term is defined
in the Stockholders Agreement dated as of November 29, 1988 (the "Stockholders
Agreement") between C.R. Gibson and the stockholders who are signatories
thereto) under Section 2(a) of the Stockholders Agreement and if any New
Stockholders exercise their rights to purchase shares under Section 2 of the
Stockholders Agreement, the Stockholder shall elect to accept such offer and
exercise the Stockholder's rights under such Section 2 to the fullest extent
permitted by the Stockholders Agreement, but in no event shall the Stockholder
accept such offer for less than all of its Allocation (as defined in the
Stockholders Agreement). Stockholder further agrees to pay for such shares
pursuant to the Stockholders Agreement and shall not agree to any amendment,
waiver or modification of the terms of the Stockholders Agreement (other than
pursuant to the terms of an Agreement dated the date hereof among Bradford
Venture Partners, L.P., Overseas Private Investor Partners, Robert G. Bowman
and John G. Russell) without Parent's prior written consent. Any shares of
C.R. Gibson
5
5
Common acquired by the Stockholder pursuant to Section 2 of the Stockholders
Agreement shall thereafter for purposes of this Agreement be deemed to be
"Shares" subject to this Agreement.
5. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder represents
and warrants to Parent and Purchaser as follows:
5.1 OWNERSHIP OF SHARES. On the date hereof, the Shares are all
of the shares of C.R. Gibson Common currently beneficially owned by the
Stockholder. (1) Stockholder does not have any rights to acquire any
additional shares of C.R. Gibson Common from C.R. Gibson, (2) Stockholder
currently has, and at the exercise of the Option and the sale of the Shares to
Purchaser in accordance with this Agreement will have, good, valid and
marketable title to the Shares, free and clear of all liens, encumbrances,
restrictions, options, warrants, rights to purchase and claims of every kind
(other than the encumbrances created by this Agreement and other than
restrictions on transfer under applicable Federal and State securities laws,
(3) the sale of Shares to Purchaser hereunder will transfer to Purchaser good,
valid and marketable title to said Shares included in such transaction, free of
all liens, encumbrances, restrictions and claims of every kind other than
restrictions on transfer under applicable Federal and State securities laws,
and (4) to the Stockholder's knowledge the Stockholders Agreement has not been
modified or amended except by an Agreement dated the date hereof and remains in
full force and effect as so amended.
5.2. POWER; BINDING AGREEMENT. Stockholder has the full legal
right, power and authority to enter into and perform all of Stockholder's
obligations under this Agreement. The execution and delivery of this Agreement
by Stockholder will not violate any other agreement to which Stockholder is a
party including, without limitation, any voting agreement, stockholders
agreement, voting trust or proxy. This Agreement has been duly executed and
delivered by Stockholder and constitutes a legal, valid and binding agreement
of Stockholder, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws, now or hereafter in effect affecting creditors'
rights and remedies generally or general principles of equity. Neither the
execution or delivery of this Agreement nor the consummation by Stockholder of
the transactions contemplated hereby will (i) require any consent or approval
of or filing by Stockholder with any governmental or other regulatory body
except for filings on Schedule 13D or Schedule 13G and a Form 4 under the
Exchange Act, or (ii) constitute a violation of, conflict with or constitute a
default under, any contract, commitment, agreement, understanding, arrangement
or other restriction of any kind to which Stockholder is a party or by which
Stockholder is bound.
6
6
5.3. FINDER'S FEE. No person is, or will be, entitled to any
commission or finder's fees from Stockholder in connection with this Agreement
or the transactions contemplated hereby.
6. REPRESENTATION AND WARRANTIES OF PARENT AND PURCHASER. Each of Parent
and Purchaser represents and warrants to Stockholder as follows:
6.1. POWERS; BINDING AGREEMENT. Each of Parent and Purchaser has
full legal right, power and authority to enter into and perform all of its
obligations under this Agreement. The execution and delivery of this Agreement
by Parent and Purchaser has been authorized by all necessary corporate action
on the part of Parent and Purchaser and will not violate any other agreement to
which Parent and Purchaser is a party. This Agreement has been duly executed
and delivered by each of Parent and Purchaser and constitutes a legal, valid
and binding agreement of Parent and Purchaser, enforceable in accordance with
its terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws, now or hereafter in
effect affecting creditors' rights and remedies generally or general principles
of equity. Neither the execution or delivery of this Agreement nor the
consummation by Parent or Purchaser of the transactions contemplated hereby
will (i) require any consent or approval of or filing by Parent or Purchaser
with any governmental or other regulatory body except for (x) the filings
required under the HSR Act and (y) filings on Schedule 13D under the Exchange
Act, or (ii) constitute a violation of, conflict with or constitute a default
under, any contract, commitment, agreement, understanding, arrangement or other
restriction of any kind to which Parent or Purchaser is a party or by which
Parent or Purchaser is bound.
6.2 FINDER'S FEES. Other than the fee payable by Parent as
disclosed in the Merger Agreement, no person is, or will be, entitled to any
commission or finder's fees from Parent or Purchaser in connection with this
Agreement or the transactions contemplated hereby.
6.3 NO CONFLICT; REQUIRED FILINGS AND CONSENTS. The purchase of
Shares from the Stockholder pursuant to this Agreement is for the account of
the Purchaser for the purpose of investment and not with a view to or for sale
in connection with any distribution thereof within the meaning of the
Securities Act and the rules and regulations promulgated thereunder.
7. FURTHER ASSURANCES. From time to time, at the other party's request
and without further consideration, each party hereto shall execute and deliver
such additional documents and take all such further action as may be necessary
or desirable to consummate the transactions contemplated by this Agreement,
including, without limitation, to vest in Purchaser good title to any Shares
purchased hereunder.
7
7
8. CERTAIN COVENANTS OF THE STOCKHOLDER. Except in accordance with the
provisions of this Agreement, Stockholder agrees, while this Agreement is in
effect, not to, directly or indirectly:
(a) sell, transfer, pledge, encumber, assign or otherwise
dispose of or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares other than transfers to
family members, trusts for the benefit of the Stockholder or family members or
in connection with estate planning but only if the transferee of such Shares
agrees in writing to be bound by the provisions of this Agreement with respect
to such Shares;
(b) grant any proxies, deposit any Shares into a voting
trust or enter into a voting agreement with respect to any Shares; or
(c) except as otherwise permitted to C.R. Gibson and the
directors of C.R. Gibson pursuant to Section 6.3(a) of the Merger Agreement and
in circumstances where the Stockholder or its representative is acting solely
in his or her capacity as a director of C.R. Gibson, take any action to
encourage, solicit, initiate, or participate in any way in discussions or
negotiations with, or furnish any information to, or afford any access to the
properties, books or records of the Company or any of its subsidiaries to, or
otherwise assist, facilitate or encourage, any person or entity (other than
Parent and Purchaser, or officers, directors, representatives, agents,
affiliates or associates) in connection with any possible or proposed merger,
consolidation, business combination, liquidation, reorganization, sale or other
disposition of assets, sale of shares of capital stock or similar transactions
involving the Company or any division of the Company.
9. CERTAIN COVENANTS OF PURCHASER AND PARENT.
9.1 OFFER AND MERGER. Parent and Purchaser agree to make the
Offer, and to follow such Offer with the Merger pursuant to the terms, and
subject to the conditions, contained in the Merger Agreement.
9.2 HSR ACT FILINGS. Parent and Purchaser agree to make in a
timely manner any filings required to be made by them under the HSR Act in
connection with the transactions contemplated by this Agreement and the Merger
Agreement.
10. TERMINATION. This Agreement shall terminate on the earliest of:
(a) the date on which Parent, Purchaser and Stockholder
mutually consent to terminate this Agreement in writing;
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(b) following the successful consummation of the Offer;
and
(c) prior to the successful consummation of the Offer,
the termination of the Merger Agreement pursuant to its terms.
11. NOTICES. All notices or other communications required or permitted
hereunder shall be in writing (except as otherwise provided herein) and shall
be deemed duly given when received by delivery in person, by telecopy, telex or
telegram or by certified mail, postage prepaid, or by an overnight courier
service, addressed as follows:
If to Purchaser or Parent: If to Stockholder:
Joe L. Powers
Executive Vice President ----------------------
Thomas Nelson, Inc. ----------------------
501 Nelson Place ----------------------
Nashville, TN 37214
Telephone: (615) 889-9000
Facsimile: (615) 883-6353
with a copy to: with a copy to:
James H. Cheek, III ----------------------
Bass, Berry & Sims ----------------------
2700 First American Center ----------------------
Nashville, TN 37238 ----------------------
12. ENTIRE AGREEMENT; AMENDMENT. This Agreement, together with the
documents expressly referred to herein, constitute the entire agreement among
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and understandings among the parties with
respect to such subject matter. This Agreement may not be modified, amended,
altered or supplemented except by an agreement in writing executed by the party
against whom such modification, amendment, alteration or supplement is sought
to be enforced.
13. ASSIGNS. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and assigns, but
neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto without the prior
written consent of the other parties, except that Purchaser may assign any or
all of its rights and obligations hereunder to Parent or any direct or indirect
wholly owned subsidiary of Parent without the consent of Stockholder, but no
such
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transfer shall relieve Purchaser of its obligations under this Agreement if such
subsidiary does not perform the obligations of Purchaser hereunder.
14. GOVERNING LAW. This Agreement, and all matters relating hereto, shall
be governed by, and construed in accordance with the laws of the State of
Delaware without giving effect to the principles of conflicts of laws thereof.
15. INJUNCTIVE RELIEF. The parties agree that in the event of a breach of
any provision of this Agreement, the aggrieved party may be without an adequate
remedy at law. The parties therefore agree that in the event of a breach of
any provision of this Agreement, the aggrieved party may elect to institute and
prosecute proceedings in any court of competent jurisdiction to enforce
specific performance or to enjoin the continuing breach of such provision, as
well as to obtain damages for breach of this Agreement and such aggrieved party
may take any such actions without the necessity of posting a bond. By seeking
or obtaining such relief, the aggrieved party will not be precluded from
seeking or obtaining any other relief to which it may be entitled.
16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
17. SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provisions of
this Agreement are so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
18. FURTHER ASSURANCES. Each party hereto shall execute and deliver such
additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
19. THIRD PARTY BENEFICIARIES. Nothing in this Agreement, expressed or
implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
THOMAS NELSON, INC.
By: /s/ Joe L. Powers
-----------------------------------
Title: EVP & Secretary
--------------------------
NELSON ACQUISITION CORP.
By: /s/ S. Joseph Moore
-----------------------------------
Title: President
--------------------------
OVERSEAS PRIVATE INVESTOR
PARTNERS
By: /s/ Robert J. Simon
-----------------------------------
Title:
--------------------------
STOCKHOLDER
EX-99.C3
15
STOCK OPTION AGREEMENT, JOHN RUSSELL
1
EXHIBIT (c)(3)
STOCK OPTION AGREEMENT
Stock Option Agreement dated as of September 13, 1995, by and
among Thomas Nelson, Inc., a Tennessee corporation ("Parent"), Nelson
Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of
Parent ("Purchaser"), and JOHN G. RUSSELL ("Stockholder").
RECITALS
A. Concurrently herewith, Parent, Purchaser and The C.R.
Gibson Company, a Delaware corporation ("C.R. Gibson"), are entering into a
Tender Offer and Merger Agreement of even date herewith (the "Merger
Agreement"; capitalized terms used but not defined herein shall have the
meanings set forth in the Merger Agreement), which contemplates, among other
things, that Purchaser will commence a tender offer to purchase all outstanding
shares of C.R. Gibson Common at a price of $9.00 per share (the "Offer").
Subject to the terms and conditions of the Merger Agreement, the Offer will be
followed by a merger (the "Merger") of Purchaser with and into C.R. Gibson.
B. As of the date hereof, Stockholder owns 389,472
shares of the outstanding C.R. Gibson Common (the "Shares") and desires to (i)
grant to Purchaser the option to acquire all of such Shares at a per share
price equal to the greatest of (x) $9.00, (y) the price per share of C.R.
Gibson Common paid for C.R. Gibson purchased in the Offer or (z) the price paid
in any transaction in which any person or entity shall become the beneficial
owner of 50% or more of the outstanding shares of C.R. Gibson Common; (ii)
grant to Purchaser an irrevocable proxy covering the Shares; (iii) enter into
an agreement whereby the Stockholder agrees to tender and not withdraw the
Shares in the Offer; and (iv) agree not to dispose of the Shares or any
interest therein other than in accordance with this Agreement.
C. Parent and Purchaser will enter into the Merger
Agreement in part in reliance on Stockholder's representations, warranties and
agreements under this Agreement.
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AGREEMENT
To implement the foregoing and in consideration of the mutual
agreements contained herein, the parties agree as follows:
1. THE CONDITIONAL PURCHASE OPTION
1.1 GRANT OF OPTION. Stockholder hereby grants to
Purchaser an irrevocable option to purchase the Shares at a per share price
equal to the greatest of (i) $9.00, (ii) the price per share of C.R. Gibson
Common paid for C.R. Gibson Common purchased in the Offer or (iii) the price
paid in any transaction in which any person or entity shall become the
beneficial owner of 50% or more of the C.R. Gibson Common and on the terms and
subject to the conditions set forth herein (the "Option").
1.2 EXERCISE OF OPTION.
(a) The Option may be exercised by Purchaser (or
its designee, which designee must be Parent or a direct or indirect wholly
owned subsidiary of Parent), in whole or in part, at any time, or from time to
time, during the period beginning on the final business day before the
expiration date of the Offer and ending on the Expiration Date. As used
herein, the term "Expiration Date" means the first to occur of any of the
following dates:
(x) consummation of the Offer; or (y) the termination of the
Merger Agreement pursuant to its terms (unless Purchaser has
theretofore sent the written notice specified in Section
1.2(b)).
(b) If Purchaser wishes to exercise the Option
(the "Option Purchase"), Purchaser shall send a written notice to Stockholder
of its intention to exercise the Option, specifying the number of Shares to be
purchased, whether Purchaser and/or a designee of Purchaser will be purchasing
the Shares and the place, and, if then known, time and date of the closing of
such purchase (the "Closing Date" or the "Closing"), which date shall not be
less than two business days nor more than ten business days from the date on
which such notice is delivered; provided, that the Closing shall be held only
if (i) such purchase would not otherwise violate or cause the violation of, any
applicable law or regulations (including, the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and regulations
thereunder, or the rules of the New York Stock Exchange or American Stock
Exchange, (ii) no statute, rule, regulation, decree, order or injunction shall
have been promulgated, enacted, entered into or enforced by any
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governmental agency or authority or court which prohibits delivery of the
Shares, whether temporary, preliminary or permanent (provided, however, that
the parties hereto shall use their reasonable efforts to have any such order,
decree or injunction vacated or reversed) and (iii) there has been no material
breach of the Merger Agreement by the Purchaser or Parent. In the event the
Closing is delayed as a result of clause (i) or (ii) above, the Closing Date
shall be within five business days following the cessation of such violation,
statute, rule, regulation, decree, order or injunction, as the case may be but
not later than the Expiration Date.
If within one year following an exercise of the Option, there
occurs a transaction in which any person or entity (other than Purchaser,
Parent or an affiliate of either of them) becomes the beneficial owner of 50%
or more of the C.R. Gibson Common and in which the consideration paid to
Purchaser or Parent exceeds the exercise price of the Option, the Purchaser
will, promptly following consummation of such transaction, pay to the
Stockholder an amount equal to the excess of the consideration paid in such
transaction per share of C.R. Gibson Common over the exercise price per share,
multiplied by the number of shares acquired upon exercise of the Option. The
provisions of this paragraph shall terminate at such time as Purchaser, Parent
or any affiliate of either of them owns 100% of the C.R. Gibson Common then
outstanding.
Notwithstanding the foregoing, if a transaction is proposed in
which any person or entity (other than Purchaser, Parent or an affiliate of
either of them) would become the beneficial owner of 50% or more of the
outstanding C.R. Gibson Common and if the exercise price per share under the
Option shall be the amount proposed to be paid in such transaction, any notice
given pursuant to this Section 1.2(b) shall be given to Stockholder not less
than five business days prior to the termination of Stockholder's rights to
participate in such transaction. In the event notice of exercise is given by
Purchaser in accordance with the preceding sentence, the obligation of
Purchaser to purchase the Shares described in such notice shall be subject to
the condition that the transaction in which the person or entity would become
the beneficial owner of 50% or more of the C.R. Gibson Common shall have been
consummated.
2. AGREEMENT TO TENDER SHARES. Stockholder agrees to accept the Offer,
to tender the Shares into the Offer and not to withdraw such Shares prior to
consummation of the Offer or withdrawal of the Offer by Purchaser, unless a
transaction is proposed in which any person or entity (other than Purchaser or
Parent) would become the beneficial owner of 50% or more of the outstanding
C.R. Gibson Common and Purchaser shall not have exercised the Option.
3. IRREVOCABLE PROXY. Stockholder hereby irrevocably appoints S. Joseph
Moore and Joe L. Powers, or either of them, as its attorney and proxy, with
full power of substitution, to vote or to express written consent or dissent in
such manner as such attorney and proxy
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or its substitute shall, in its sole discretion, deem proper, and otherwise act
(including pursuant to any corporate action in writing without a meeting) with
respect to all of the Shares which it is entitled to vote at any meeting of
stockholders (whether annual or special and whether or not an adjourned
meeting) of C.R. Gibson, or pursuant to written action taken in lieu of any
such meeting or otherwise; provided, however, that Stockholder grants a proxy
hereunder only with respect to the following matters (the "Designated
Matters"): (i) votes or consents with respect to the Merger; (ii) votes or
consents with respect to any action or agreement that would result in a breach
of any covenant, representation or warranty or any other obligation or
agreement of C.R. Gibson under the Merger Agreement; (iii) votes or consents
with respect to any action or agreement that would impede, interfere with,
delay, postpone or attempt to discourage the Offer or the Merger, including,
but not limited to, (a) any extraordinary corporate transaction (other than the
Offer and the Merger), such as a merger, other business combination,
reorganization or liquidation involving C.R. Gibson, (b) a sale or transfer of
a material amount of assets of C.R. Gibson or any of its subsidiaries, (c) any
change in the board of directors of C.R. Gibson, except as otherwise agreed to
in writing by Parent, or (d) any material change in the present capitalization
of C.R. Gibson; and (iv) votes or consents relating to any other material
change in the corporate structure or business of C.R. Gibson. This proxy is
irrevocable, is coupled with an interest sufficient in law to support an
irrevocable proxy and is granted in consideration of and as an inducement to
cause the Parent and Purchaser to enter into the transactions contemplated by
this Agreement and the Merger Agreement. This proxy shall revoke any other
proxy granted by Stockholder at any time with respect to the Shares and no
subsequent proxies will be given with respect thereto by Stockholder. In
addition, if subsequent to the date hereof Stockholder is entitled to vote the
Shares for any purpose, it shall take all actions necessary to vote the Shares
pursuant to instructions received from Purchaser; provided, however, that the
provisions of this sentence shall only apply to the Designated Matters. It is
expressly understood and acknowledged by the parties hereto that nothing
contained herein is intended to restrict the Stockholder (if the Stockholder is
also a director of C.R. Gibson) from voting on any matter, or otherwise from
acting, in the Stockholder's capacity as a director of C.R. Gibson with respect
to any matter, including but not limited to, the general management of over-all
operation of C.R. Gibson.
4. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder represents
and warrants to Parent and Purchaser as follows:
4.1 OWNERSHIP OF SHARES. On the date hereof, the Shares
are all of the shares of C.R. Gibson Common currently beneficially owned by the
Stockholder. (1) Stockholder does not have any rights to acquire any
additional shares of C.R. Gibson Common from C.R. Gibson, (2) Stockholder
currently has, and at the exercise of the Option and the sale of the Shares to
Purchaser in accordance with this Agreement will
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have, good, valid and marketable title to the Shares, free and clear of all
liens, encumbrances, restrictions, options, warrants, rights to purchase and
claims of every kind (other than the encumbrances created by this Agreement and
other than restrictions on transfer under applicable Federal and State
securities laws and subject to the Stockholders Agreement), (3) the sale of
Shares to Purchaser hereunder will transfer to Purchaser good, valid and
marketable title to said Shares included in such transaction, free of all
liens, encumbrances, restrictions and claims of every kind other than
restrictions on transfer under applicable Federal and State securities laws,
subject to the Stockholders Agreement and (4) to the Stockholder's knowledge
the Stockholders Agreement has not been modified or amended except by an
Agreement dated the date hereof and remains in full force and effect as so
amended.
4.2 POWER; BINDING AGREEMENT. Stockholder has the full
legal right, power and authority to enter into and perform all of Stockholder's
obligations under this Agreement. Subject to the Stockholders Agreement, the
execution and delivery of this Agreement by Stockholder will not violate any
other agreement to which Stockholder is a party including, without limitation,
any voting agreement, stockholders agreement, voting trust or proxy. This
Agreement has been duly executed and delivered by Stockholder and, subject to
the Stockholders Agreement, constitutes a legal, valid and binding agreement of
Stockholder, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws, now or hereafter in effect affecting creditors'
rights and remedies generally or general principles of equity. Subject to the
Stockholders Agreement, neither the execution or delivery of this Agreement nor
the consummation by Stockholder of the transactions contemplated hereby will
(i) require any consent or approval of or filing by Stockholder with any
governmental or other regulatory body except for filings on Schedule 13D or
Schedule 13G and a Form 4 under the Exchange Act, or (ii) constitute a
violation of, conflict with or constitute a default under, any contract,
commitment, agreement, understanding, arrangement or other restriction of any
kind to which Stockholder is a party or by which Stockholder is bound.
4.3 FINDER'S FEE. No person is, or will be, entitled to
any commission or finder's fees from Stockholder in connection with this
Agreement or the transactions contemplated hereby.
5. REPRESENTATION AND WARRANTIES OF PARENT AND PURCHASER. Each of Parent
and Purchaser represents and warrants to Stockholder as follows:
5.1 POWERS; BINDING AGREEMENT. Each of Parent and
Purchaser has full legal right, power and authority to enter into and perform
all of its obligations under this Agreement. The execution and delivery of
this Agreement by Parent and Purchaser has been authorized by all necessary
corporate action on the part of Parent and Purchaser
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and will not violate any other agreement to which Parent and Purchaser is a
party. This Agreement has been duly executed and delivered by each of Parent
and Purchaser and constitutes a legal, valid and binding agreement of Parent
and Purchaser, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws, now or hereafter in effect affecting creditors'
rights and remedies generally or general principles of equity. Neither the
execution or delivery of this Agreement nor the consummation by Parent or
Purchaser of the transactions contemplated hereby will (i) require any consent
or approval of or filing by Parent or Purchaser with any governmental or other
regulatory body except for (x) the filings required under the HSR Act and (y)
filings on Schedule 13D under the Exchange Act, or (ii) constitute a violation
of, conflict with or constitute a default under, any contract, commitment,
agreement, understanding, arrangement or other restriction of any kind to which
Parent or Purchaser is a party or by which Parent or Purchaser is bound.
5.2 FINDER'S FEES. Other than the fee payable by Parent
as disclosed in the Merger Agreement, no person is, or will be, entitled to any
commission or finder's fees from Parent or Purchaser in connection with this
Agreement or the transactions contemplated hereby.
5.3 NO CONFLICT; REQUIRED FILINGS AND CONSENTS. The
purchase of Shares from the Stockholder pursuant to this Agreement is for the
account of the Purchaser for the purpose of investment and not with a view to
or for sale in connection with any distribution thereof within the meaning of
the Securities Act and the rules and regulations promulgated thereunder.
6. FURTHER ASSURANCES. From time to time, at the other party's request
and without further consideration, each party hereto shall execute and deliver
such additional documents and take all such further action as may be necessary
or desirable to consummate the transactions contemplated by this Agreement,
including, without limitation, to vest in Purchaser good title to any Shares
purchased hereunder.
7. CERTAIN COVENANTS OF THE STOCKHOLDER. Except in accordance with the
provisions of this Agreement, Stockholder agrees, while this Agreement is in
effect, not to, directly or indirectly:
(a) sell, transfer, pledge, encumber, assign or
otherwise dispose of or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares other than transfers to
family members, trusts for the benefit of the Stockholder or family members or
in connection with estate planning but only if the transferee of such Shares
agrees in writing to be bound by the provisions of this Agreement with respect
to such Shares;
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(b) grant any proxies, deposit any Shares into a
voting trust or enter into a voting agreement with respect to any Shares; or
(c) except as otherwise permitted to C.R. Gibson
and the directors of C.R. Gibson pursuant to Section 6.3(a) of the Merger
Agreement and in circumstances where the Stockholder or its representative is
acting solely in his or her capacity as a director of C.R. Gibson, take any
action to encourage, solicit, initiate, or participate in any way in
discussions or negotiations with, or furnish any information to, or afford any
access to the properties, books or records of the Company or any of its
subsidiaries to, or otherwise assist, facilitate or encourage, any person or
entity (other than Parent and Purchaser, or officers, directors,
representatives, agents, affiliates or associates) in connection with any
possible or proposed merger, consolidation, business combination, liquidation,
reorganization, sale or other disposition of assets, sale of shares of capital
stock or similar transactions involving the Company or any division of the
Company.
8. CERTAIN COVENANTS OF PURCHASER AND PARENT.
8.1 OFFER AND MERGER. Parent and Purchaser agree to make
the Offer, and to follow such Offer with the Merger pursuant to the terms, and
subject to the conditions, contained in the Merger Agreement.
8.2 HSR ACT FILINGS. Parent and Purchaser agree to make
in a timely manner any filings required to be made by them under the HSR Act in
connection with the transactions contemplated by this Agreement and the Merger
Agreement.
9. TERMINATION. This Agreement shall terminate on the earliest of:
(a) the date on which Parent, Purchaser and Stock
holder mutually consent to terminate this Agreement in writing;
(b) following the successful consummation of the
Offer; and
(c) prior to the successful consummation of the
Offer, the termination of the Merger Agreement pursuant to its terms.
10. NOTICES. All notices or other communications required or permitted
hereunder shall be in writing (except as otherwise provided herein) and shall
be deemed duly given when received by delivery in person, by telecopy, telex or
telegram or by certified mail, postage prepaid, or by an overnight courier
service, addressed as follows:
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If to Purchaser or Parent: If to Stockholder:
Joe L. Powers John G. Russell
Executive Vice President ------------------------------
Thomas Nelson, Inc. 2780 Redding Rd.
Nashville, TN 37214 ------------------------------
Telephone: (615) 889-9000 Fairfield, CT 06430
Facsimile: (615) 883-6353 ------------------------------
with a copy to: with a copy to:
James H. Cheek, III ------------------------------
Bass, Berry & Sims ------------------------------
2700 First American Center ------------------------------
Nashville, TN 37238 ------------------------------
11. ENTIRE AGREEMENT; AMENDMENT. This Agreement, together with the
documents expressly referred to herein, constitute the entire agreement among
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and understandings among the parties with
respect to such subject matter. This Agreement may not be modified, amended,
altered or supplemented except by an agreement in writing executed by the party
against whom such modification, amendment, alteration or supplement is sought
to be enforced.
12. ASSIGNS. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and assigns, but
neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto without the prior
written consent of the other parties, except that Purchaser may assign any or
all of its rights and obligations hereunder to Parent or any direct or indirect
wholly owned subsidiary of Parent without the consent of Stockholder, but no
such transfer shall relieve Purchaser of its obligations under this Agreement
if such subsidiary does not perform the obligations of Purchaser hereunder.
13. GOVERNING LAW. This Agreement, and all matters relating hereto, shall
be governed by, and construed in accordance with the laws of the State of
Delaware without giving effect to the principles of conflicts of laws thereof.
14. INJUNCTIVE RELIEF. The parties agree that in the event of a breach of
any provision of this Agreement, the aggrieved party may be without an adequate
remedy at law. The parties therefore agree that in the event of a breach of
any provision of this Agreement, the aggrieved party may elect to institute and
prosecute proceedings in any court of competent
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jurisdiction to enforce specific performance or to enjoin the continuing breach
of such provision, as well as to obtain damages for breach of this Agreement
and such aggrieved party may take any such actions without the necessity of
posting a bond. By seeking or obtaining such relief, the aggrieved party will
not be precluded from seeking or obtaining any other relief to which it may be
entitled.
15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
16. SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provisions of
this Agreement are so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
17. FURTHER ASSURANCES. Each party hereto shall execute and deliver such
additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
18. THIRD PARTY BENEFICIARIES. Nothing in this Agreement, expressed or
implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
THOMAS NELSON, INC.
By: /s/ Joe L. Powers
----------------------------------
Title: EVP & Secretary
--------------------------
NELSON ACQUISITION CORP.
By: /s/ S. Joseph Moore
----------------------------------
Title: President
--------------------------
/s/ John G. Russell
--------------------------------------
John G. Russell
STOCKHOLDER
EX-99.C4
16
STOCK OPTION AGREEMENT, ROBERT BOWMAN
1
EXHIBIT (c)(4)
STOCK OPTION AGREEMENT
Stock Option Agreement dated as of September 13, 1995, by and
among Thomas Nelson, Inc., a Tennessee corporation ("Parent"), Nelson
Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of
Parent ("Purchaser"), and ROBERT G. BOWMAN ("Stockholder").
RECITALS
A. Concurrently herewith, Parent, Purchaser and The C.R.
Gibson Company, a Delaware corporation ("C.R. Gibson"), are entering into a
Tender Offer and Merger Agreement of even date herewith (the "Merger
Agreement"; capitalized terms used but not defined herein shall have the
meanings set forth in the Merger Agreement), which contemplates, among other
things, that Purchaser will commence a tender offer to purchase all outstanding
shares of C.R. Gibson Common at a price of $9.00 per share (the "Offer").
Subject to the terms and conditions of the Merger Agreement, the Offer will be
followed by a merger (the "Merger") of Purchaser with and into C.R. Gibson.
B. As of the date hereof, Stockholder owns 498,000
shares of the outstanding C.R. Gibson Common (the "Shares") and desires to (i)
grant to Purchaser the option to acquire all of such Shares at a per share
price equal to the greatest of (x) $9.00, (y) the price per share of C.R.
Gibson Common paid for C.R. Gibson purchased in the Offer or (z) the price paid
in any transaction in which any person or entity shall become the beneficial
owner of 50% or more of the outstanding shares of C.R. Gibson Common; (ii)
grant to Purchaser an irrevocable proxy covering the Shares; (iii) enter into
an agreement whereby the Stockholder agrees to tender and not withdraw the
Shares in the Offer; and (iv) agree not to dispose of the Shares or any
interest therein other than in accordance with this Agreement.
C. Parent and Purchaser will enter into the Merger
Agreement in part in reliance on Stockholder's representations, warranties and
agreements under this Agreement.
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AGREEMENT
To implement the foregoing and in consideration of the mutual
agreements contained herein, the parties agree as follows:
1. THE CONDITIONAL PURCHASE OPTION
1.1 GRANT OF OPTION. Stockholder hereby grants to
Purchaser an irrevocable option to purchase the Shares at a per share price
equal to the greatest of (i) $9.00, (ii) the price per share of C.R. Gibson
Common paid for C.R. Gibson Common purchased in the Offer or (iii) the price
paid in any transaction in which any person or entity shall become the
beneficial owner of 50% or more of the C.R. Gibson Common and on the terms and
subject to the conditions set forth herein (the "Option").
1.2 EXERCISE OF OPTION.
(a) The Option may be exercised by Purchaser (or
its designee, which designee must be Parent or a direct or indirect wholly
owned subsidiary of Parent), in whole or in part, at any time, or from time to
time, during the period beginning on the final business day before the
expiration date of the Offer and ending on the Expiration Date. As used
herein, the term "Expiration Date" means the first to occur of any of the
following dates:
(x) consummation of the Offer; or (y) the termination of the
Merger Agreement pursuant to its terms (unless Purchaser has
theretofore sent the written notice specified in Section
1.2(b)).
(b) If Purchaser wishes to exercise the Option
(the "Option Purchase"), Purchaser shall send a written notice to Stockholder
of its intention to exercise the Option, specifying the number of Shares to be
purchased, whether Purchaser and/or a designee of Purchaser will be purchasing
the Shares and the place, and, if then known, time and date of the closing of
such purchase (the "Closing Date" or the "Closing"), which date shall not be
less than two business days nor more than ten business days from the date on
which such notice is delivered; provided, that the Closing shall be held only
if (i) such purchase would not otherwise violate or cause the violation of, any
applicable law or regulations (including, the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and regulations
thereunder, or the rules of the New York Stock Exchange or American Stock
Exchange, (ii) no statute, rule, regulation, decree, order or injunction shall
have been promulgated, enacted, entered into or enforced by any governmental
agency or authority or court which prohibits delivery of the Shares, whether
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temporary, preliminary or permanent (provided, however, that the parties hereto
shall use their reasonable efforts to have any such order, decree or injunction
vacated or reversed) and (iii) there has been no material breach of the Merger
Agreement by the Purchaser or Parent. In the event the Closing is delayed as a
result of clause (i) or (ii) above, the Closing Date shall be within five
business days following the cessation of such violation, statute, rule,
regulation, decree, order or injunction, as the case may be but not later than
the Expiration Date.
If within one year following an exercise of the Option, there
occurs a transaction in which any person or entity (other than Purchaser,
Parent or an affiliate of either of them) becomes the beneficial owner of 50%
or more of the C.R. Gibson Common and in which the consideration paid to
Purchaser or Parent exceeds the exercise price of the Option, the Purchaser
will, promptly following consummation of such transaction, pay to the
Stockholder an amount equal to the excess of the consideration paid in such
transaction per share of C.R. Gibson Common over the exercise price per share,
multiplied by the number of shares acquired upon exercise of the Option. The
provisions of this paragraph shall terminate at such time as Purchaser, Parent
or any affiliate of either of them owns 100% of the C.R. Gibson Common then
outstanding.
Notwithstanding the foregoing, if a transaction is proposed in
which any person or entity (other than Purchaser, Parent or an affiliate of
either of them) would become the beneficial owner of 50% or more of the
outstanding C.R. Gibson Common and if the exercise price per share under the
Option shall be the amount proposed to be paid in such transaction, any notice
given pursuant to this Section 1.2(b) shall be given to Stockholder not less
than five business days prior to the termination of Stockholder's rights to
participate in such transaction. In the event notice of exercise is given by
Purchaser in accordance with the preceding sentence, the obligation of
Purchaser to purchase the Shares described in such notice shall be subject to
the condition that the transaction in which the person or entity would become
the beneficial owner of 50% or more of the C.R. Gibson Common shall have been
consummated.
2. AGREEMENT TO TENDER SHARES. Stockholder agrees to accept the Offer,
to tender the Shares into the Offer and not to withdraw such Shares prior to
consummation of the Offer or withdrawal of the Offer by Purchaser, unless a
transaction is proposed in which any person or entity (other than Purchaser or
Parent) would become the beneficial owner of 50% or more of the outstanding
C.R. Gibson Common and Purchaser shall not have exercised the Option.
3. IRREVOCABLE PROXY. Stockholder hereby irrevocably appoints S. Joseph
Moore and Joe L. Powers, or either of them, as its attorney and proxy, with
full power of substitution, to vote or to express written consent or dissent in
such manner as such attorney and proxy or its substitute shall, in its sole
discretion, deem proper, and otherwise act (including
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pursuant to any corporate action in writing without a meeting) with respect to
all of the Shares which it is entitled to vote at any meeting of stockholders
(whether annual or special and whether or not an adjourned meeting) of C.R.
Gibson, or pursuant to written action taken in lieu of any such meeting or
otherwise; provided, however, that Stockholder grants a proxy hereunder only
with respect to the following matters (the "Designated Matters"): (i) votes or
consents with respect to the Merger; (ii) votes or consents with respect to any
action or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of C.R. Gibson
under the Merger Agreement; (iii) votes or consents with respect to any action
or agreement that would impede, interfere with, delay, postpone or attempt to
discourage the Offer or the Merger, including, but not limited to, (a) any
extraordinary corporate transaction (other than the Offer and the Merger), such
as a merger, other business combination, reorganization or liquidation
involving C.R. Gibson, (b) a sale or transfer of a material amount of assets of
C.R. Gibson or any of its subsidiaries, (c) any change in the board of
directors of C.R. Gibson, except as otherwise agreed to in writing by Parent,
or (d) any material change in the present capitalization of C.R. Gibson; and
(iv) votes or consents relating to any other material change in the corporate
structure or business of C.R. Gibson. This proxy is irrevocable, is coupled
with an interest sufficient in law to support an irrevocable proxy and is
granted in consideration of and as an inducement to cause the Parent and
Purchaser to enter into the transactions contemplated by this Agreement and the
Merger Agreement. This proxy shall revoke any other proxy granted by
Stockholder at any time with respect to the Shares and no subsequent proxies
will be given with respect thereto by Stockholder. In addition, if subsequent
to the date hereof Stockholder is entitled to vote the Shares for any purpose,
it shall take all actions necessary to vote the Shares pursuant to instructions
received from Purchaser; provided, however, that the provisions of this
sentence shall only apply to the Designated Matters. It is expressly
understood and acknowledged by the parties hereto that nothing contained herein
is intended to restrict the Stockholder (if the Stockholder is also a director
of C.R. Gibson) from voting on any matter, or otherwise from acting, in the
Stockholder's capacity as a director of C.R. Gibson with respect to any matter,
including but not limited to, the general management of over-all operation of
C.R. Gibson.
4. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder represents
and warrants to Parent and Purchaser as follows:
4.1 OWNERSHIP OF SHARES. On the date hereof, the Shares
are all of the shares of C.R. Gibson Common currently beneficially owned by the
Stockholder. (1) Stockholder does not have any rights to acquire any
additional shares of C.R. Gibson Common from C.R. Gibson, (2) Stockholder
currently has, and at the exercise of the Option and the sale of the Shares to
Purchaser in accordance with this Agreement will have, good, valid and
marketable title to the Shares, free and clear of all liens,
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encumbrances, restrictions, options, warrants, rights to purchase and claims of
every kind (other than the encumbrances created by this Agreement and other
than restrictions on transfer under applicable Federal and State securities
laws and subject to the Stockholders Agreement ), (3) the sale of Shares to
Purchaser hereunder will transfer to Purchaser good, valid and marketable title
to said Shares included in such transaction, free of all liens, encumbrances,
restrictions and claims of every kind other than restrictions on transfer under
applicable Federal and State securities laws, subject to the Stockholders
Agreement and (4) to the Stockholder's knowledge the Stockholders Agreement has
not been modified or amended except by an Agreement dated the date hereof and
remains in full force and effect as so amended.
4.2 POWER; BINDING AGREEMENT. Stockholder has the full
legal right, power and authority to enter into and perform all of Stockholder's
obligations under this Agreement. Subject to the Stockholders Agreement, the
execution and delivery of this Agreement by Stockholder will not violate any
other agreement to which Stockholder is a party including, without limitation,
any voting agreement, stockholders agreement, voting trust or proxy. This
Agreement has been duly executed and delivered by Stockholder and, subject to
the Stockholders Agreement, constitutes a legal, valid and binding agreement of
Stockholder, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws, now or hereafter in effect affecting creditors'
rights and remedies generally or general principles of equity. Subject to the
Stockholders Agreement, neither the execution or delivery of this Agreement nor
the consummation by Stockholder of the transactions contemplated hereby will
(i) require any consent or approval of or filing by Stockholder with any
governmental or other regulatory body except for filings on Schedule 13D or
Schedule 13G and a Form 4 under the Exchange Act, or (ii) constitute a
violation of, conflict with or constitute a default under, any contract,
commitment, agreement, understanding, arrangement or other restriction of any
kind to which Stockholder is a party or by which Stockholder is bound.
4.3 FINDER'S FEE. No person is, or will be, entitled to
any commission or finder's fees from Stockholder in connection with this
Agreement or the transactions contemplated hereby.
5. REPRESENTATION AND WARRANTIES OF PARENT AND PURCHASER. Each of Parent
and Purchaser represents and warrants to Stockholder as follows:
5.1 POWERS; BINDING AGREEMENT. Each of Parent and
Purchaser has full legal right, power and authority to enter into and perform
all of its obligations under this Agreement. The execution and delivery of
this Agreement by Parent and Purchaser has been authorized by all necessary
corporate action on the part of Parent and Purchaser and will not violate any
other agreement to which Parent and Purchaser is a party. This
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Agreement has been duly executed and delivered by each of Parent and Purchaser
and constitutes a legal, valid and binding agreement of Parent and Purchaser,
enforceable in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium and similar
laws, now or hereafter in effect affecting creditors' rights and remedies
generally or general principles of equity. Neither the execution or delivery
of this Agreement nor the consummation by Parent or Purchaser of the
transactions contemplated hereby will (i) require any consent or approval of or
filing by Parent or Purchaser with any governmental or other regulatory body
except for (x) the filings required under the HSR Act and (y) filings on
Schedule 13D under the Exchange Act, or (ii) constitute a violation of,
conflict with or constitute a default under, any contract, commitment,
agreement, understanding, arrangement or other restriction of any kind to which
Parent or Purchaser is a party or by which Parent or Purchaser is bound.
5.2 FINDER'S FEES. Other than the fee payable by Parent
as disclosed in the Merger Agreement, no person is, or will be, entitled to any
commission or finder's fees from Parent or Purchaser in connection with this
Agreement or the transactions contemplated hereby.
5.3 NO CONFLICT; REQUIRED FILINGS AND CONSENTS. The
purchase of Shares from the Stockholder pursuant to this Agreement is for the
account of the Purchaser for the purpose of investment and not with a view to
or for sale in connection with any distribution thereof within the meaning of
the Securities Act and the rules and regulations promulgated thereunder.
6. FURTHER ASSURANCES. From time to time, at the other party's request
and without further consideration, each party hereto shall execute and deliver
such additional documents and take all such further action as may be necessary
or desirable to consummate the transactions contemplated by this Agreement,
including, without limitation, to vest in Purchaser good title to any Shares
purchased hereunder.
7. CERTAIN COVENANTS OF THE STOCKHOLDER. Except in accordance with the
provisions of this Agreement, Stockholder agrees, while this Agreement is in
effect, not to, directly or indirectly:
(a) sell, transfer, pledge, encumber, assign or
otherwise dispose of or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares other than transfers to
family members, trusts for the benefit of the Stockholder or family members or
in connection with estate planning but only if the transferee of such Shares
agrees in writing to be bound by the provisions of this Agreement with respect
to such Shares;
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(b) grant any proxies, deposit any Shares into a
voting trust or enter into a voting agreement with respect to any Shares; or
(c) except as otherwise permitted to C.R. Gibson
and the directors of C.R. Gibson pursuant to Section 6.3(a) of the Merger
Agreement and in circumstances where the Stockholder or its representative is
acting solely in his or her capacity as a director of C.R. Gibson, take any
action to encourage, solicit, initiate, or participate in any way in
discussions or negotiations with, or furnish any information to, or afford any
access to the properties, books or records of the Company or any of its
subsidiaries to, or otherwise assist, facilitate or encourage, any person or
entity (other than Parent and Purchaser, or officers, directors,
representatives, agents, affiliates or associates) in connection with any
possible or proposed merger, consolidation, business combination, liquidation,
reorganization, sale or other disposition of assets, sale of shares of capital
stock or similar transactions involving the Company or any division of the
Company.
8. CERTAIN COVENANTS OF PURCHASER AND PARENT.
8.1 OFFER AND MERGER. Parent and Purchaser agree to make
the Offer, and to follow such Offer with the Merger pursuant to the terms, and
subject to the conditions, contained in the Merger Agreement.
8.2 HSR ACT FILINGS. Parent and Purchaser agree to make
in a timely manner any filings required to be made by them under the HSR Act in
connection with the transactions contemplated by this Agreement and the Merger
Agreement.
9. TERMINATION. This Agreement shall terminate on the earliest of:
(a) the date on which Parent, Purchaser and
Stockholder mutually consent to terminate this Agreement in writing;
(b) following the successful consummation of the
Offer; and
(c) prior to the successful consummation of the
Offer, the termination of the Merger Agreement pursuant to its terms.
10. NOTICES. All notices or other communications required or permitted
hereunder shall be in writing (except as otherwise provided herein) and shall
be deemed duly given when received by delivery in person, by telecopy, telex or
telegram or by certified mail, postage prepaid, or by an overnight courier
service, addressed as follows:
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If to Purchaser or Parent: If to Stockholder:
Joe L. Powers Robert G. Bowman
Executive Vice President ------------------------
Thomas Nelson, Inc. 800 Beach Rd., #169
501 Nelson Place ------------------------
Nashville, TN 37214 Vero Beach, FL 32963
Telephone: (615) 889-9000 ------------------------
Facsimile: (615) 883-6353
with a copy to: with a copy to:
James H. Cheek, III
Bass, Berry & Sims ----------------------
2700 First American Center ----------------------
Nashville, TN 37238 ----------------------
----------------------
11. ENTIRE AGREEMENT; AMENDMENT. This Agreement, together with the
documents expressly referred to herein, constitute the entire agreement among
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and understandings among the parties with
respect to such subject matter. This Agreement may not be modified, amended,
altered or supplemented except by an agreement in writing executed by the party
against whom such modification, amendment, alteration or supplement is sought
to be enforced.
12. ASSIGNS. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and assigns, but
neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto without the prior
written consent of the other parties, except that Purchaser may assign any or
all of its rights and obligations hereunder to Parent or any direct or indirect
wholly owned subsidiary of Parent without the consent of Stockholder, but no
such transfer shall relieve Purchaser of its obligations under this Agreement
if such subsidiary does not perform the obligations of Purchaser hereunder.
13. GOVERNING LAW. This Agreement, and all matters relating hereto, shall
be governed by, and construed in accordance with the laws of the State of
Delaware without giving effect to the principles of conflicts of laws thereof.
14. INJUNCTIVE RELIEF. The parties agree that in the event of a breach of
any provision of this Agreement, the aggrieved party may be without an adequate
remedy at law. The parties therefore agree that in the event of a breach of
any provision of this Agreement, the aggrieved party may elect to institute and
prosecute proceedings in any court of competent
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jurisdiction to enforce specific performance or to enjoin the continuing breach
of such provision, as well as to obtain damages for breach of this Agreement
and such aggrieved party may take any such actions without the necessity of
posting a bond. By seeking or obtaining such relief, the aggrieved party will
not be precluded from seeking or obtaining any other relief to which it may be
entitled.
15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
16. SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provisions of
this Agreement are so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
17. FURTHER ASSURANCES. Each party hereto shall execute and deliver such
additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
18. THIRD PARTY BENEFICIARIES. Nothing in this Agreement, expressed or
implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
THOMAS NELSON, INC.
By: /s/ Joe L. Powers
--------------------------------------
Title: EVP & Secretary
--------------------------------
NELSON ACQUISITION CORP.
By: /s/ S. Joseph Moore
-------------------------------------
Title: President
------------------------------
/s/ Robert G. Bowman
-----------------------------------------
Robert G. Bowman
STOCKHOLDER
EX-99.C5
17
STOCK OPTION AGREEMENT, JAMES HARRISON
1
EXHIBIT (c)(5)
STOCK OPTION AGREEMENT
Stock Option Agreement dated as of September 13, 1995, by and
among Thomas Nelson, Inc., a Tennessee corporation ("Parent"), Nelson
Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of
Parent ("Purchaser"), and JAMES M. HARRISON ("Stockholder").
RECITALS
A. Concurrently herewith, Parent, Purchaser and
The C.R. Gibson Company, a Delaware corporation ("C.R. Gibson"), are entering
into a Tender Offer and Merger Agreement of even date herewith (the "Merger
Agreement"; capitalized terms used but not defined herein shall have the
meanings set forth in the Merger Agreement), which contemplates, among other
things, that Purchaser will commence a tender offer to purchase all outstanding
shares of C.R. Gibson Common at a price of $9.00 per share (the "Offer").
Subject to the terms and conditions of the Merger Agreement, the Offer will be
followed by a merger (the "Merger") of Purchaser with and into C.R. Gibson.
B. As of the date hereof, Stockholder owns
20,723 shares of the outstanding C.R. Gibson Common (the "Shares") and desires
to (i) grant to Purchaser the option to acquire all of such Shares at a per
share price equal to the greatest of (x) $9.00, (y) the price per share of C.R.
Gibson Common paid for C.R. Gibson purchased in the Offer or (z) the price paid
in any transaction in which any person or entity shall become the beneficial
owner of 50% or more of the outstanding shares of C.R. Gibson Common; (ii)
grant to Purchaser an irrevocable proxy covering the Shares; (iii) enter into
an agreement whereby the Stockholder agrees to tender and not withdraw the
Shares in the Offer; and (iv) agree not to dispose of the Shares or any
interest therein other than in accordance with this Agreement.
C. Parent and Purchaser will enter into the
Merger Agreement in part in reliance on Stockholder's representations,
warranties and agreements under this Agreement.
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AGREEMENT
To implement the foregoing and in consideration of the mutual
agreements contained herein, the parties agree as follows:
1. THE CONDITIONAL PURCHASE OPTION
1.1. GRANT OF OPTION. Stockholder hereby grants
to Purchaser an irrevocable option to purchase the Shares at a per share price
equal to the greatest of (i) $9.00, (ii) the price per share of C.R. Gibson
Common paid for C.R. Gibson Common purchased in the Offer or (iii) the price
paid in any transaction in which any person or entity shall become the
beneficial owner of 50% or more of the C.R. Gibson Common and on the terms and
subject to the conditions set forth herein (the "Option").
1.2. EXERCISE OF OPTION.
(a) The Option may be exercised by
Purchaser (or its designee, which designee must be Parent or a direct or
indirect wholly owned subsidiary of Parent), in whole or in part, at any time,
or from time to time, during the period beginning on the final business day
before the expiration date of the Offer and ending on the Expiration Date. As
used herein, the term "Expiration Date" means the first to occur of any of the
following dates:
(x) consummation of the Offer; or (y) the termination of the
Merger Agreement pursuant to its terms (unless Purchaser has
theretofore sent the written notice specified in Section
1.2(b)).
(b) If Purchaser wishes to exercise the
Option (the "Option Purchase"), Purchaser shall send a written notice to
Stockholder of its intention to exercise the Option, specifying the number of
Shares to be purchased, whether Purchaser and/or a designee of Purchaser will
be purchasing the Shares and the place, and, if then known, time and date of
the closing of such purchase (the "Closing Date" or the "Closing"), which date
shall not be less than two business days nor more than ten business days from
the date on which such notice is delivered; provided, that the Closing shall be
held only if (i) such purchase would not otherwise violate or cause the
violation of, any applicable law or regulations (including, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the rules and regulations thereunder, or the rules of the New York Stock
Exchange or American Stock Exchange, (ii) no statute, rule, regulation, decree,
order or injunction shall have been promulgated, enacted, entered into or
enforced by any governmental agency or authority or court which prohibits
delivery of the Shares, whether
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temporary, preliminary or permanent (provided, however, that the parties hereto
shall use their reasonable efforts to have any such order, decree or injunction
vacated or reversed) and (iii) there has been no material breach of the Merger
Agreement by the Purchaser or Parent. In the event the Closing is delayed as a
result of clause (i) or (ii) above, the Closing Date shall be within five
business days following the cessation of such violation, statute, rule,
regulation, decree, order or injunction, as the case may be but not later than
the Expiration Date.
If within one year following an exercise of the Option, there
occurs a transaction in which any person or entity (other than Purchaser,
Parent or an affiliate of either of them) becomes the beneficial owner of 50%
or more of the C.R. Gibson Common and in which the consideration paid to
Purchaser or Parent exceeds the exercise price of the Option, the Purchaser
will, promptly following consummation of such transaction, pay to the
Stockholder an amount equal to the excess of the consideration paid in such
transaction per share of C.R. Gibson Common over the exercise price per share,
multiplied by the number of shares acquired upon exercise of the Option. The
provisions of this paragraph shall terminate at such time as Purchaser, Parent
or any affiliate of either of them owns 100% of the C.R. Gibson Common then
outstanding.
Notwithstanding the foregoing, if a transaction is proposed in
which any person or entity (other than Purchaser, Parent or an affiliate of
either of them) would become the beneficial owner of 50% or more of the
outstanding C.R. Gibson Common and if the exercise price per share under the
Option shall be the amount proposed to be paid in such transaction, any notice
given pursuant to this Section 1.2(b) shall be given to Stockholder not less
than five business days prior to the termination of Stockholder's rights to
participate in such transaction. In the event notice of exercise is given by
Purchaser in accordance with the preceding sentence, the obligation of
Purchaser to purchase the Shares described in such notice shall be subject to
the condition that the transaction in which the person or entity would become
the beneficial owner of 50% or more of the C.R. Gibson Common shall have been
consummated.
2. AGREEMENT TO TENDER SHARES. Stockholder agrees to accept the
Offer, to tender the Shares into the Offer and not to withdraw such Shares
prior to consummation of the Offer or withdrawal of the Offer by Purchaser,
unless a transaction is proposed in which any person or entity (other than
Purchaser or Parent) would become the beneficial owner of 50% or more of the
outstanding C.R. Gibson Common and Purchaser shall not have exercised the
Option.
3. IRREVOCABLE PROXY. Stockholder hereby irrevocably appoints S.
Joseph Moore and Joe L. Powers, or either of them, as its attorney and proxy,
with full power of substitution, to vote or to express written consent or
dissent in such manner as such attorney and proxy or its substitute shall, in
its sole discretion, deem proper, and otherwise act (including
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pursuant to any corporate action in writing without a meeting) with respect to
all of the Shares which it is entitled to vote at any meeting of stockholders
(whether annual or special and whether or not an adjourned meeting) of C.R.
Gibson, or pursuant to written action taken in lieu of any such meeting or
otherwise; provided, however, that Stockholder grants a proxy hereunder only
with respect to the following matters (the "Designated Matters"): (i) votes or
consents with respect to the Merger; (ii) votes or consents with respect to any
action or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of C.R. Gibson
under the Merger Agreement; (iii) votes or consents with respect to any action
or agreement that would impede, interfere with, delay, postpone or attempt to
discourage the Offer or the Merger, including, but not limited to, (a) any
extraordinary corporate transaction (other than the Offer and the Merger), such
as a merger, other business combination, reorganization or liquidation
involving C.R. Gibson, (b) a sale or transfer of a material amount of assets of
C.R. Gibson or any of its subsidiaries, (c) any change in the board of
directors of C.R. Gibson, except as otherwise agreed to in writing by Parent,
or (d) any material change in the present capitalization of C.R. Gibson; and
(iv) votes or consents relating to any other material change in the corporate
structure or business of C.R. Gibson. This proxy is irrevocable, is coupled
with an interest sufficient in law to support an irrevocable proxy and is
granted in consideration of and as an inducement to cause the Parent and
Purchaser to enter into the transactions contemplated by this Agreement and the
Merger Agreement. This proxy shall revoke any other proxy granted by
Stockholder at any time with respect to the Shares and no subsequent proxies
will be given with respect thereto by Stockholder. In addition, if subsequent
to the date hereof Stockholder is entitled to vote the Shares for any purpose,
it shall take all actions necessary to vote the Shares pursuant to instructions
received from Purchaser; provided, however, that the provisions of this
sentence shall only apply to the Designated Matters. It is expressly
understood and acknowledged by the parties hereto that nothing contained herein
is intended to restrict the Stockholder (if the Stockholder is also a director
of C.R. Gibson) from voting on any matter, or otherwise from acting, in the
Stockholder's capacity as a director of C.R. Gibson with respect to any matter,
including but not limited to, the general management of over-all operation of
C.R. Gibson.
4. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder represents
and warrants to Parent and Purchaser as follows:
4.1. OWNERSHIP OF SHARES. On the date hereof, the
Shares are all of the shares of C.R. Gibson Common currently beneficially
owned by the Stockholder. (1) Stockholder does not have any rights to acquire
any additional shares of C.R. Gibson Common from C.R. Gibson, (2) Stockholder
currently has, and at the exercise of the Option and the sale of the Shares to
Purchaser in accordance with this Agreement will have, good, valid and
marketable title to the Shares, free and clear of all liens, encumbrances,
restrictions, options, warrants, rights to purchase and claims of every kind
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(other than the encumbrances created by this Agreement and other than
restrictions on transfer under applicable Federal and State securities laws and
(3) the sale of Shares to Purchaser hereunder will transfer to Purchaser good,
valid and marketable title to said Shares included in such transaction, free of
all liens, encumbrances, restrictions and claims of every kind other than
restrictions on transfer under applicable Federal and State securities laws.
4.2. POWER; BINDING AGREEMENT. Stockholder has
the full legal right, power and authority to enter into and perform all of
Stockholder's obligations under this Agreement. The execution and delivery of
this Agreement by Stockholder will not violate any other agreement to which
Stockholder is a party including, without limitation, any voting agreement,
stockholders agreement, voting trust or proxy. This Agreement has been duly
executed and delivered by Stockholder and constitutes a legal, valid and
binding agreement of Stockholder, enforceable in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws, now or hereafter in effect
affecting creditors' rights and remedies generally or general principles of
equity. Neither the execution or delivery of this Agreement nor the
consummation by Stockholder of the transactions contemplated hereby will (i)
require any consent or approval of or filing by Stockholder with any
governmental or other regulatory body except for filings on Schedule 13D or
Schedule 13G and a Form 4 under the Exchange Act, or (ii) constitute a
violation of, conflict with or constitute a default under, any contract,
commitment, agreement, understanding, arrangement or other restriction of any
kind to which Stockholder is a party or by which Stockholder is bound.
4.3. FINDER'S FEE. No person is, or will be,
entitled to any commission or finder's fees from Stockholder in connection with
this Agreement or the transactions contemplated hereby.
5. REPRESENTATION AND WARRANTIES OF PARENT AND PURCHASER. Each of Parent
and Purchaser represents and warrants to Stockholder as follows:
5.1. POWERS; BINDING AGREEMENT. Each of Parent
and Purchaser has full legal right, power and authority to enter into and
perform all of its obligations under this Agreement. The execution and
delivery of this Agreement by Parent and Purchaser has been authorized by all
necessary corporate action on the part of Parent and Purchaser and will not
violate any other agreement to which Parent and Purchaser is a party. This
Agreement has been duly executed and delivered by each of Parent and Purchaser
and constitutes a legal, valid and binding agreement of Parent and Purchaser,
enforceable in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium and similar
laws, now or hereafter in effect affecting creditors' rights and remedies
generally or general principles of equity. Neither the execution or delivery
of this Agreement nor the consummation by Parent or
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Purchaser of the transactions contemplated hereby will (i) require any consent
or approval of or filing by Parent or Purchaser with any governmental or other
regulatory body except for (x) the filings required under the HSR Act and (y)
filings on Schedule 13D under the Exchange Act, or (ii) constitute a violation
of, conflict with or constitute a default under, any contract, commitment,
agreement, understanding, arrangement or other restriction of any kind to which
Parent or Purchaser is a party or by which Parent or Purchaser is bound.
5.2. FINDER'S FEES. Other than the fee payable by
Parent as disclosed in the Merger Agreement, no person is, or will be, entitled
to any commission or finder's fees from Parent or Purchaser in connection with
this Agreement or the transactions contemplated hereby.
5.3. NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
The purchase of Shares from the Stockholder pursuant to this Agreement is for
the account of the Purchaser for the purpose of investment and not with a view
to or for sale in connection with any distribution thereof within the meaning
of the Securities Act and the rules and regulations promulgated thereunder.
6. FURTHER ASSURANCES. From time to time, at the other party's request
and without further consideration, each party hereto shall execute and deliver
such additional documents and take all such further action as may be necessary
or desirable to consummate the transactions contemplated by this Agreement,
including, without limitation, to vest in Purchaser good title to any Shares
purchased hereunder.
7. CERTAIN COVENANTS OF THE STOCKHOLDER. Except in accordance with the
provisions of this Agreement, Stockholder agrees, while this Agreement is in
effect, not to, directly or indirectly:
(a) sell, transfer, pledge, encumber,
assign or otherwise dispose of or enter into any contract, option or other
arrangement or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of, any of the Shares other than
transfers to family members, trusts for the benefit of the Stockholder or
family members or in connection with estate planning but only if the transferee
of such Shares agrees in writing to be bound by the provisions of this
Agreement with respect to such Shares;
(b) grant any proxies, deposit any
Shares into a voting trust or enter into a voting agreement with respect to any
Shares; or
(c) except as otherwise permitted to
C.R. Gibson and the directors of C.R. Gibson pursuant to Section 6.3(a) of the
Merger Agreement and in circumstances where the Stockholder or its
representative is acting solely in his or her
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capacity as a director of C.R. Gibson, take any action to encourage, solicit,
initiate, or participate in any way in discussions or negotiations with, or
furnish any information to, or afford any access to the properties, books or
records of the Company or any of its subsidiaries to, or otherwise assist,
facilitate or encourage, any person or entity (other than Parent and Purchaser,
or officers, directors, representatives, agents, affiliates or associates) in
connection with any possible or proposed merger, consolidation, business
combination, liquidation, reorganization, sale or other disposition of assets,
sale of shares of capital stock or similar transactions involving the Company
or any division of the Company.
8. CERTAIN COVENANTS OF PURCHASER AND PARENT.
8.1. OFFER AND MERGER. Parent and Purchaser agree
to make the Offer, and to follow such Offer with the Merger pursuant to the
terms, and subject to the conditions, contained in the Merger Agreement.
8.2. HSR ACT FILINGS. Parent and Purchaser agree
to make in a timely manner any filings required to be made by them under the
HSR Act in connection with the transactions contemplated by this Agreement and
the Merger Agreement.
9. TERMINATION. This Agreement shall terminate on the earliest of:
(a) the date on which Parent, Purchaser
and Stockholder mutually consent to terminate this Agreement in writing;
(b) following the successful
consummation of the Offer; and
(c) prior to the successful consummation
of the Offer, the termination of the Merger Agreement pursuant to its terms.
10. NOTICES. All notices or other communications required or permitted
hereunder shall be in writing (except as otherwise provided herein) and shall
be deemed duly given when received by delivery in person, by telecopy, telex or
telegram or by certified mail, postage prepaid, or by an overnight courier
service, addressed as follows:
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If to Purchaser or Parent: If to Stockholder:
Joe L. Powers -------------------------------
Executive Vice President -------------------------------
Thomas Nelson, Inc. -------------------------------
501 Nelson Place
Nashville, TN 37214
Telephone: (615) 889-9000
Facsimile: (615) 883-6353
with a copy to: with a copy to:
James H. Cheek, III -------------------------------
Bass, Berry & Sims -------------------------------
2700 First American Center -------------------------------
Nashville, TN 37238 -------------------------------
11. ENTIRE AGREEMENT; AMENDMENT. This Agreement, together with the
documents expressly referred to herein, constitute the entire agreement among
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and understandings among the parties with
respect to such subject matter. This Agreement may not be modified, amended,
altered or supplemented except by an agreement in writing executed by the party
against whom such modification, amendment, alteration or supplement is sought
to be enforced.
12. ASSIGNS. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and assigns, but
neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto without the prior
written consent of the other parties, except that Purchaser may assign any or
all of its rights and obligations hereunder to Parent or any direct or indirect
wholly owned subsidiary of Parent without the consent of Stockholder, but no
such transfer shall relieve Purchaser of its obligations under this Agreement
if such subsidiary does not perform the obligations of Purchaser hereunder.
13. GOVERNING LAW. This Agreement, and all matters relating hereto,
shall be governed by, and construed in accordance with the laws of the State of
Delaware without giving effect to the principles of conflicts of laws thereof.
14. INJUNCTIVE RELIEF. The parties agree that in the event of a breach
of any provision of this Agreement, the aggrieved party may be without an
adequate remedy at law. The parties therefore agree that in the event of a
breach of any provision of this Agreement, the aggrieved party may elect to
institute and prosecute proceedings in any court of competent
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jurisdiction to enforce specific performance or to enjoin the continuing breach
of such provision, as well as to obtain damages for breach of this Agreement
and such aggrieved party may take any such actions without the necessity of
posting a bond. By seeking or obtaining such relief, the aggrieved party will
not be precluded from seeking or obtaining any other relief to which it may be
entitled.
15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
16. SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provisions of
this Agreement are so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
17. FURTHER ASSURANCES. Each party hereto shall execute and deliver
such additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
18. THIRD PARTY BENEFICIARIES. Nothing in this Agreement, expressed or
implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the date first above written.
THOMAS NELSON, INC.
By: /s/ Joe L. Powers
------------------------------------
Title: EVP & Secretary
------------------------------
NELSON ACQUISITION CORP.
By: /s/ S. Joseph Moore
------------------------------------
Title: /s/ President
------------------------------
/s/ James M. Harrison
---------------------------------------
James M. Harrison
STOCKHOLDER
EX-99.C6
18
STOCK OPTION AGREEMENT, FRANK ROSENBERRY
1
EXHIBIT (c)(6)
STOCK OPTION AGREEMENT
Stock Option Agreement dated as of September 13, 1995, by and among
Thomas Nelson, Inc., a Tennessee corporation ("Parent"), Nelson Acquisition
Corp., a Delaware corporation and a wholly owned subsidiary of Parent
("Purchaser"), and FRANK A. ROSENBERRY ("Stockholder").
RECITALS
A. Concurrently herewith, Parent, Purchaser and The C.R.
Gibson Company, a Delaware corporation ("C.R. Gibson"), are entering into a
Tender Offer and Merger Agreement of even date herewith (the "Merger
Agreement"; capitalized terms used but not defined herein shall have the
meanings set forth in the Merger Agreement), which contemplates, among other
things, that Purchaser will commence a tender offer to purchase all outstanding
shares of C.R. Gibson Common at a price of $9.00 per share (the "Offer").
Subject to the terms and conditions of the Merger Agreement, the Offer will be
followed by a merger (the "Merger") of Purchaser with and into C.R. Gibson.
B. As of the date hereof, Stockholder owns 55,060 shares
of the outstanding C.R. Gibson Common (the "Shares") and desires to (i) grant
to Purchaser the option to acquire all of such Shares at a per share price
equal to the greatest of (x) $9.00, (y) the price per share of C.R. Gibson
Common paid for C.R. Gibson purchased in the Offer or (z) the price paid in any
transaction in which any person or entity shall become the beneficial owner of
50% or more of the outstanding shares of C.R. Gibson Common; (ii) grant to
Purchaser an irrevocable proxy covering the Shares; (iii) enter into an
agreement whereby the Stockholder agrees to tender and not withdraw the Shares
in the Offer; and (iv) agree not to dispose of the Shares or any interest
therein other than in accordance with this Agreement.
C. Parent and Purchaser will enter into the Merger
Agreement in part in reliance on Stockholder's representations, warranties and
agreements under this Agreement.
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AGREEMENT
To implement the foregoing and in consideration of the mutual
agreements contained herein, the parties agree as follows:
1. THE CONDITIONAL PURCHASE OPTION
1.1. GRANT OF OPTION. Stockholder hereby grants to
Purchaser an irrevocable option to purchase the Shares at a per share price
equal to the greatest of (i) $9.00, (ii) the price per share of C.R. Gibson
Common paid for C.R. Gibson Common purchased in the Offer or (iii) the price
paid in any transaction in which any person or entity shall become the
beneficial owner of 50% or more of the C.R. Gibson Common and on the terms and
subject to the conditions set forth herein (the "Option").
1.2. EXERCISE OF OPTION.
(a) The Option may be exercised by Purchaser (or
its designee, which designee must be Parent or a direct or indirect wholly
owned subsidiary of Parent), in whole or in part, at any time, or from time to
time, during the period beginning on the final business day before the
expiration date of the Offer and ending on the Expiration Date. As used
herein, the term "Expiration Date" means the first to occur of any of the
following dates:
(x) consummation of the Offer; or (y) the termination of the
Merger Agreement pursuant to its terms (unless Purchaser has
theretofore sent the written notice specified in Section
1.2(b)).
(b) If Purchaser wishes to exercise the Option
(the "Option Purchase"), Purchaser shall send a written notice to Stockholder
of its intention to exercise the Option, specifying the number of Shares to be
purchased, whether Purchaser and/or a designee of Purchaser will be purchasing
the Shares and the place, and, if then known, time and date of the closing of
such purchase (the "Closing Date" or the "Closing"), which date shall not be
less than two business days nor more than ten business days from the date on
which such notice is delivered; provided, that the Closing shall be held only
if (i) such purchase would not otherwise violate or cause the violation of, any
applicable law or regulations (including, the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and regulations
thereunder, or the rules of the New York Stock Exchange or American Stock
Exchange, (ii) no statute, rule, regulation, decree, order or injunction shall
have been promulgated, enacted, entered into or enforced by any governmental
agency or authority or court which prohibits delivery of the Shares, whether
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temporary, preliminary or permanent (provided, however, that the parties hereto
shall use their reasonable efforts to have any such order, decree or injunction
vacated or reversed) and (iii) there has been no material breach of the Merger
Agreement by the Purchaser or Parent. In the event the Closing is delayed as a
result of clause (i) or (ii) above, the Closing Date shall be within five
business days following the cessation of such violation, statute, rule,
regulation, decree, order or injunction, as the case may be but not later than
the Expiration Date.
If within one year following an exercise of the Option, there
occurs a transaction in which any person or entity (other than Purchaser,
Parent or an affiliate of either of them) becomes the beneficial owner of 50%
or more of the C.R. Gibson Common and in which the consideration paid to
Purchaser or Parent exceeds the exercise price of the Option, the Purchaser
will, promptly following consummation of such transaction, pay to the
Stockholder an amount equal to the excess of the consideration paid in such
transaction per share of C.R. Gibson Common over the exercise price per share,
multiplied by the number of shares acquired upon exercise of the Option. The
provisions of this paragraph shall terminate at such time as Purchaser, Parent
or any affiliate of either of them owns 100% of the C.R. Gibson Common then
outstanding.
Notwithstanding the foregoing, if a transaction is proposed in
which any person or entity (other than Purchaser, Parent or an affiliate of
either of them) would become the beneficial owner of 50% or more of the
outstanding C.R. Gibson Common and if the exercise price per share under the
Option shall be the amount proposed to be paid in such transaction, any notice
given pursuant to this Section 1.2(b) shall be given to Stockholder not less
than five business days prior to the termination of Stockholder's rights to
participate in such transaction. In the event notice of exercise is given by
Purchaser in accordance with the preceding sentence, the obligation of
Purchaser to purchase the Shares described in such notice shall be subject to
the condition that the transaction in which the person or entity would become
the beneficial owner of 50% or more of the C.R. Gibson Common shall have been
consummated.
2. AGREEMENT TO TENDER SHARES. Stockholder agrees to accept the Offer,
to tender the Shares into the Offer and not to withdraw such Shares prior to
consummation of the Offer or withdrawal of the Offer by Purchaser, unless a
transaction is proposed in which any person or entity (other than Purchaser or
Parent) would become the beneficial owner of 50% or more of the outstanding
C.R. Gibson Common and Purchaser shall not have exercised the Option.
3. IRREVOCABLE PROXY. Stockholder hereby irrevocably appoints S. Joseph
Moore and Joe L. Powers, or either of them, as its attorney and proxy, with
full power of substitution, to vote or to express written consent or dissent in
such manner as such attorney and proxy or its substitute shall, in its sole
discretion, deem proper, and otherwise act (including
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pursuant to any corporate action in writing without a meeting) with respect to
all of the Shares which it is entitled to vote at any meeting of stockholders
(whether annual or special and whether or not an adjourned meeting) of C.R.
Gibson, or pursuant to written action taken in lieu of any such meeting or
otherwise; provided, however, that Stockholder grants a proxy hereunder only
with respect to the following matters (the "Designated Matters"): (i) votes or
consents with respect to the Merger; (ii) votes or consents with respect to any
action or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of C.R. Gibson
under the Merger Agreement; (iii) votes or consents with respect to any action
or agreement that would impede, interfere with, delay, postpone or attempt to
discourage the Offer or the Merger, including, but not limited to, (a) any
extraordinary corporate transaction (other than the Offer and the Merger), such
as a merger, other business combination, reorganization or liquidation
involving C.R. Gibson, (b) a sale or transfer of a material amount of assets of
C.R. Gibson or any of its subsidiaries, (c) any change in the board of
directors of C.R. Gibson, except as otherwise agreed to in writing by Parent,
or (d) any material change in the present capitalization of C.R. Gibson; and
(iv) votes or consents relating to any other material change in the corporate
structure or business of C.R. Gibson. This proxy is irrevocable, is coupled
with an interest sufficient in law to support an irrevocable proxy and is
granted in consideration of and as an inducement to cause the Parent and
Purchaser to enter into the transactions contemplated by this Agreement and the
Merger Agreement. This proxy shall revoke any other proxy granted by
Stockholder at any time with respect to the Shares and no subsequent proxies
will be given with respect thereto by Stockholder. In addition, if subsequent
to the date hereof Stockholder is entitled to vote the Shares for any purpose,
it shall take all actions necessary to vote the Shares pursuant to instructions
received from Purchaser; provided, however, that the provisions of this
sentence shall only apply to the Designated Matters. It is expressly
understood and acknowledged by the parties hereto that nothing contained herein
is intended to restrict the Stockholder (if the Stockholder is also a director
of C.R. Gibson) from voting on any matter, or otherwise from acting, in the
Stockholder's capacity as a director of C.R. Gibson with respect to any matter,
including but not limited to, the general management of over-all operation of
C.R. Gibson.
4. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder represents
and warrants to Parent and Purchaser as follows:
4.1. OWNERSHIP OF SHARES. On the date hereof, the Shares are all
of the shares of C.R. Gibson Common currently beneficially owned by the
Stockholder. (1) Stockholder does not have any rights to acquire any
additional shares of C.R. Gibson Common from C.R. Gibson, (2) Stockholder
currently has, and at the exercise of the Option and the sale of the Shares to
Purchaser in accordance with this Agreement will have, good, valid and
marketable title to the Shares, free and clear of all liens, encumbrances,
restrictions, options, warrants, rights to purchase and claims of every kind
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(other than the encumbrances created by this Agreement and other than
restrictions on transfer under applicable Federal and State securities laws and
(3) the sale of Shares to Purchaser hereunder will transfer to Purchaser good,
valid and marketable title to said Shares included in such transaction, free of
all liens, encumbrances, restrictions and claims of every kind other than
restrictions on transfer under applicable Federal and State securities laws.
4.2. POWER; BINDING AGREEMENT. Stockholder has the full legal
right, power and authority to enter into and perform all of Stockholder's
obligations under this Agreement. The execution and delivery of this Agreement
by Stockholder will not violate any other agreement to which Stockholder is a
party including, without limitation, any voting agreement, stockholders
agreement, voting trust or proxy. This Agreement has been duly executed and
delivered by Stockholder and constitutes a legal, valid and binding agreement
of Stockholder, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws, now or hereafter in effect affecting creditors'
rights and remedies generally or general principles of equity. Neither the
execution or delivery of this Agreement nor the consummation by Stockholder of
the transactions contemplated hereby will (i) require any consent or approval
of or filing by Stockholder with any governmental or other regulatory body
except for filings on Schedule 13D or Schedule 13G and a Form 4 under the
Exchange Act, or (ii) constitute a violation of, conflict with or constitute a
default under, any contract, commitment, agreement, understanding, arrangement
or other restriction of any kind to which Stockholder is a party or by which
Stockholder is bound.
4.3. FINDER'S FEE. No person is, or will be, entitled to any
commission or finder's fees from Stockholder in connection with this Agreement
or the transactions contemplated hereby.
5. REPRESENTATION AND WARRANTIES OF PARENT AND PURCHASER. Each of Parent
and Purchaser represents and warrants to Stockholder as follows:
5.1. POWERS; BINDING AGREEMENT. Each of Parent and Purchaser has
full legal right, power and authority to enter into and perform all of its
obligations under this Agreement. The execution and delivery of this Agreement
by Parent and Purchaser has been authorized by all necessary corporate action
on the part of Parent and Purchaser and will not violate any other agreement to
which Parent and Purchaser is a party. This Agreement has been duly executed
and delivered by each of Parent and Purchaser and constitutes a legal, valid
and binding agreement of Parent and Purchaser, enforceable in accordance with
its terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws, now or hereafter in
effect affecting creditors' rights and remedies generally or general principles
of equity. Neither the execution or delivery of this Agreement nor the
consummation by Parent or
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Purchaser of the transactions contemplated hereby will (i) require any consent
or approval of or filing by Parent or Purchaser with any governmental or other
regulatory body except for (x) the filings required under the HSR Act and (y)
filings on Schedule 13D under the Exchange Act, or (ii) constitute a violation
of, conflict with or constitute a default under, any contract, commitment,
agreement, understanding, arrangement or other restriction of any kind to which
Parent or Purchaser is a party or by which Parent or Purchaser is bound.
5.2. FINDER'S FEES. Other than the fee payable by Parent as
disclosed in the Merger Agreement, no person is, or will be, entitled to any
commission or finder's fees from Parent or Purchaser in connection with this
Agreement or the transactions contemplated hereby.
5.3. NO CONFLICT; REQUIRED FILINGS AND CONSENTS. The
purchase of Shares from the Stockholder pursuant to this Agreement is for the
account of the Purchaser for the purpose of investment and not with a view to
or for sale in connection with any distribution thereof within the meaning of
the Securities Act and the rules and regulations promulgated thereunder.
6. FURTHER ASSURANCES. From time to time, at the other party's request
and without further consideration, each party hereto shall execute and deliver
such additional documents and take all such further action as may be necessary
or desirable to consummate the transactions contemplated by this Agreement,
including, without limitation, to vest in Purchaser good title to any Shares
purchased hereunder.
7. CERTAIN COVENANTS OF THE STOCKHOLDER. Except in accordance with the
provisions of this Agreement, Stockholder agrees, while this Agreement is in
effect, not to, directly or indirectly:
(a) sell, transfer, pledge, encumber, assign or
otherwise dispose of or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares other than transfers to
family members, trusts for the benefit of the Stockholder or family members or
in connection with estate planning but only if the transferee of such Shares
agrees in writing to be bound by the provisions of this Agreement with respect
to such Shares;
(b) grant any proxies, deposit any Shares into a
voting trust or enter into a voting agreement with respect to any Shares; or
(c) except as otherwise permitted to C.R. Gibson
and the directors of C.R. Gibson pursuant to Section 6.3(a) of the Merger
Agreement and in circumstances where the Stockholder or its representative is
acting solely in his or her
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capacity as a director of C.R. Gibson, take any action to encourage, solicit,
initiate, or participate in any way in discussions or negotiations with, or
furnish any information to, or afford any access to the properties, books or
records of the Company or any of its subsidiaries to, or otherwise assist,
facilitate or encourage, any person or entity (other than Parent and Purchaser,
or officers, directors, representatives, agents, affiliates or associates) in
connection with any possible or proposed merger, consolidation, business
combination, liquidation, reorganization, sale or other disposition of assets,
sale of shares of capital stock or similar transactions involving the Company
or any division of the Company.
8. CERTAIN COVENANTS OF PURCHASER AND PARENT.
8.1. OFFER AND MERGER. Parent and Purchaser agree to make
the Offer, and to follow such Offer with the Merger pursuant to the terms, and
subject to the conditions, contained in the Merger Agreement.
8.2. HSR ACT FILINGS. Parent and Purchaser agree to make
in a timely manner any filings required to be made by them under the HSR Act in
connection with the transactions contemplated by this Agreement and the Merger
Agreement.
9. TERMINATION. This Agreement shall terminate on the earliest of:
(a) the date on which Parent, Purchaser and
Stockholder mutually consent to terminate this Agreement in writing;
(c) following the successful consummation of the
Offer; and
(d) prior to the successful consummation of the
Offer, the termination of the Merger Agreement pursuant to its terms.
10. NOTICES. All notices or other communications required or permitted
hereunder shall be in writing (except as otherwise provided herein) and shall
be deemed duly given when received by delivery in person, by telecopy, telex or
telegram or by certified mail, postage prepaid, or by an overnight courier
service, addressed as follows:
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If to Purchaser or Parent: If to Stockholder:
Joe L. Powers F. A. Rosenberry
Executive Vice President ---------------------------
Thomas Nelson, Inc. 828 Hollow Tree
501 Nelson Place ---------------------------
Nashville, TN 37214 Darien, CT 06820
Telephone: (615) 889-9000 ---------------------------
Facsimile: (615) 883-6353
with a copy to: with a copy to:
James H. Cheek, III --------------------------
Bass, Berry & Sims --------------------------
2700 First American Center --------------------------
Nashville, TN 37238 --------------------------
11. ENTIRE AGREEMENT; AMENDMENT. This Agreement, together with the
documents expressly referred to herein, constitute the entire agreement among
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and understandings among the parties with
respect to such subject matter. This Agreement may not be modified, amended,
altered or supplemented except by an agreement in writing executed by the party
against whom such modification, amendment, alteration or supplement is sought
to be enforced.
12. ASSIGNS. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and assigns, but
neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto without the prior
written consent of the other parties, except that Purchaser may assign any or
all of its rights and obligations hereunder to Parent or any direct or indirect
wholly owned subsidiary of Parent without the consent of Stockholder, but no
such transfer shall relieve Purchaser of its obligations under this Agreement
if such subsidiary does not perform the obligations of Purchaser hereunder.
13. GOVERNING LAW. This Agreement, and all matters relating hereto,
shall be governed by, and construed in accordance with the laws of the State of
Delaware without giving effect to the principles of conflicts of laws thereof.
14. INJUNCTIVE RELIEF. The parties agree that in the event of a breach
of any provision of this Agreement, the aggrieved party may be without an
adequate remedy at law. The parties therefore agree that in the event of a
breach of any provision of this Agreement, the aggrieved party may elect to
institute and prosecute proceedings in any court of competent
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9
jurisdiction to enforce specific performance or to enjoin the continuing breach
of such provision, as well as to obtain damages for breach of this Agreement
and such aggrieved party may take any such actions without the necessity of
posting a bond. By seeking or obtaining such relief, the aggrieved party will
not be precluded from seeking or obtaining any other relief to which it may be
entitled.
15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
16. SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provisions of
this Agreement are so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
17. FURTHER ASSURANCES. Each party hereto shall execute and deliver
such additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
18. THIRD PARTY BENEFICIARIES. Nothing in this Agreement, expressed or
implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the date first above written.
THOMAS NELSON, INC.
By: /s/ Joe L. Powers
------------------------------------
Title: EVP & Secretary
-----------------------------
NELSON ACQUISITION CORP.
By: /s/ S. Joseph Moore
-----------------------------------
Title: President
----------------------------
/s/ Frank A. Rosenberry
---------------------------------------
Frank A. Rosenberry
STOCKHOLDER
EX-99.C7
19
STOCK OPTION AGREEMENT, WILLARD OVERLOCK
1
EXHIBIT (c)(7)
STOCK OPTION AGREEMENT
Stock Option Agreement dated as of September 13, 1995, by and among
Thomas Nelson, Inc., a Tennessee corporation ("Parent"), Nelson Acquisition
Corp., a Delaware corporation and a wholly owned subsidiary of Parent
("Purchaser"), and WILLARD J. OVERLOCK ("Stockholder").
RECITALS
A. Concurrently herewith, Parent, Purchaser and The C.R. Gibson
Company, a Delaware corporation ("C.R. Gibson"), are entering into a Tender
Offer and Merger Agreement of even date herewith (the "Merger Agreement";
capitalized terms used but not defined herein shall have the meanings set forth
in the Merger Agreement), which contemplates, among other things, that
Purchaser will commence a tender offer to purchase all outstanding shares of
C.R. Gibson Common at a price of $9.00 per share (the "Offer"). Subject to the
terms and conditions of the Merger Agreement, the Offer will be followed by a
merger (the "Merger") of Purchaser with and into C.R. Gibson.
B. As of the date hereof, Stockholder owns 20,000 shares of the
outstanding C.R. Gibson Common (the "Shares") and desires to (i) grant to
Purchaser the option to acquire all of such Shares at a per share price equal
to the greatest of (x) $9.00, (y) the price per share of C.R. Gibson Common
paid for C.R. Gibson purchased in the Offer or (z) the price paid in any
transaction in which any person or entity shall become the beneficial owner of
50% or more of the outstanding shares of C.R. Gibson Common; (ii) grant to
Purchaser an irrevocable proxy covering the Shares; (iii) enter into an
agreement whereby the Stockholder agrees to tender and not withdraw the Shares
in the Offer; and (iv) agree not to dispose of the Shares or any interest
therein other than in accordance with this Agreement.
C. Parent and Purchaser will enter into the Merger Agreement in
part in reliance on Stockholder's representations, warranties and agreements
under this Agreement.
AGREEMENT
To implement the foregoing and in consideration of the mutual
agreements contained herein, the parties agree as follows:
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1. THE CONDITIONAL PURCHASE OPTION
1.1. GRANT OF OPTION. Stockholder hereby grants to Purchaser an
irrevocable option to purchase the Shares at a per share price equal to the
greatest of (i) $9.00, (ii) the price per share of C.R. Gibson Common paid for
C.R. Gibson Common purchased in the Offer or (iii) the price paid in any
transaction in which any person or entity shall become the beneficial owner of
50% or more of the C.R. Gibson Common and on the terms and subject to the
conditions set forth herein (the "Option").
1.2. EXERCISE OF OPTION.
(a) The Option may be exercised by Purchaser (or its
designee, which designee must be Parent or a direct or indirect wholly owned
subsidiary of Parent), in whole or in part, at any time, or from time to time,
during the period beginning on the final business day before the expiration
date of the Offer and ending on the Expiration Date. As used herein, the term
"Expiration Date" means the first to occur of any of the following dates:
(x) consummation of the Offer; or (y) the termination of the Merger
Agreement pursuant to its terms (unless Purchaser has theretofore
sent the written notice specified in Section 1.2(b)).
(b) If Purchaser wishes to exercise the Option (the
"Option Purchase"), Purchaser shall send a written notice to Stockholder of its
intention to exercise the Option, specifying the number of Shares to be
purchased, whether Purchaser and/or a designee of Purchaser will be purchasing
the Shares and the place, and, if then known, time and date of the closing of
such purchase (the "Closing Date" or the "Closing"), which date shall not be
less than two business days nor more than ten business days from the date on
which such notice is delivered; provided, that the Closing shall be held only
if (i) such purchase would not otherwise violate or cause the violation of, any
applicable law or regulations (including, the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and regulations
thereunder, or the rules of the New York Stock Exchange or American Stock
Exchange, (ii) no statute, rule, regulation, decree, order or injunction shall
have been promulgated, enacted, entered into or enforced by any governmental
agency or authority or court which prohibits delivery of the Shares, whether
temporary, preliminary or permanent (provided, however, that the parties hereto
shall use their reasonable efforts to have any such order, decree or injunction
vacated or reversed) and (iii) there has been no material breach of the Merger
Agreement by the Purchaser or Parent. In the event the Closing is delayed as a
result of clause (i) or (ii) above, the
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Closing Date shall be within five business days following the cessation of such
violation, statute, rule, regulation, decree, order or injunction, as the case
may be but not later than the Expiration Date.
If within one year following an exercise of the Option,
there occurs a transaction in which any person or entity (other than Purchaser,
Parent or an affiliate of either of them) becomes the beneficial owner of 50%
or more of the C.R. Gibson Common and in which the consideration paid to
Purchaser or Parent exceeds the exercise price of the Option, the Purchaser
will, promptly following consummation of such transaction, pay to the
Stockholder an amount equal to the excess of the consideration paid in such
transaction per share of C.R. Gibson Common over the exercise price per share,
multiplied by the number of shares acquired upon exercise of the Option. The
provisions of this paragraph shall terminate at such time as Purchaser, Parent
or any affiliate of either of them owns 100% of the C.R. Gibson Common then
outstanding.
Notwithstanding the foregoing, if a transaction is proposed
in which any person or entity (other than Purchaser, Parent or an affiliate of
either of them) would become the beneficial owner of 50% or more of the
outstanding C.R. Gibson Common and if the exercise price per share under the
Option shall be the amount proposed to be paid in such transaction, any notice
given pursuant to this Section 1.2(b) shall be given to Stockholder not less
than five business days prior to the termination of Stockholder's rights to
participate in such transaction. In the event notice of exercise is given by
Purchaser in accordance with the preceding sentence, the obligation of
Purchaser to purchase the Shares described in such notice shall be subject to
the condition that the transaction in which the person or entity would become
the beneficial owner of 50% or more of the C.R. Gibson Common shall have been
consummated.
2. AGREEMENT TO TENDER SHARES. Stockholder agrees to accept the Offer, to
tender the Shares into the Offer and not to withdraw such Shares prior to
consummation of the Offer or withdrawal of the Offer by Purchaser, unless a
transaction is proposed in which any person or entity (other than Purchaser or
Parent) would become the beneficial owner of 50% or more of the outstanding
C.R. Gibson Common and Purchaser shall not have exercised the Option.
3. IRREVOCABLE PROXY. Stockholder hereby irrevocably appoints S. Joseph
Moore and Joe L. Powers, or either of them, as its attorney and proxy, with
full power of substitution, to vote or to express written consent or dissent in
such manner as such attorney and proxy or its substitute shall, in its sole
discretion, deem proper, and otherwise act (including pursuant to any corporate
action in writing without a meeting) with respect to all of the Shares which it
is entitled to vote at any meeting of stockholders (whether annual or special
and whether or not an adjourned meeting) of C.R. Gibson, or pursuant to written
action taken in lieu of any such meeting or otherwise; provided, however, that
Stockholder
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grants a proxy hereunder only with respect to the following matters (the
"Designated Matters"): (i) votes or consents with respect to the Merger; (ii)
votes or consents with respect to any action or agreement that would result in
a breach of any covenant, representation or warranty or any other obligation or
agreement of C.R. Gibson under the Merger Agreement; (iii) votes or consents
with respect to any action or agreement that would impede, interfere with,
delay, postpone or attempt to discourage the Offer or the Merger, including,
but not limited to, (a) any extraordinary corporate transaction (other than the
Offer and the Merger), such as a merger, other business combination,
reorganization or liquidation involving C.R. Gibson, (b) a sale or transfer of
a material amount of assets of C.R. Gibson or any of its subsidiaries, (c) any
change in the board of directors of C.R. Gibson, except as otherwise agreed to
in writing by Parent, or (d) any material change in the present capitalization
of C.R. Gibson; and (iv) votes or consents relating to any other material
change in the corporate structure or business of C.R. Gibson. This proxy is
irrevocable, is coupled with an interest sufficient in law to support an
irrevocable proxy and is granted in consideration of and as an inducement to
cause the Parent and Purchaser to enter into the transactions contemplated by
this Agreement and the Merger Agreement. This proxy shall revoke any other
proxy granted by Stockholder at any time with respect to the Shares and no
subsequent proxies will be given with respect thereto by Stockholder. In
addition, if subsequent to the date hereof Stockholder is entitled to vote the
Shares for any purpose, it shall take all actions necessary to vote the Shares
pursuant to instructions received from Purchaser; provided, however, that the
provisions of this sentence shall only apply to the Designated Matters. It is
expressly understood and acknowledged by the parties hereto that nothing
contained herein is intended to restrict the Stockholder (if the Stockholder is
also a director of C.R. Gibson) from voting on any matter, or otherwise from
acting, in the Stockholder's capacity as a director of C.R. Gibson with respect
to any matter, including but not limited to, the general management of over-all
operation of C.R. Gibson.
4. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder represents
and warrants to Parent and Purchaser as follows:
4.1. OWNERSHIP OF SHARES. On the date hereof, the Shares are
all of the shares of C.R. Gibson Common currently beneficially owned by the
Stockholder. (1) Stockholder does not have any rights to acquire any
additional shares of C.R. Gibson Common from C.R. Gibson, (2) Stockholder
currently has, and at the exercise of the Option and the sale of the Shares to
Purchaser in accordance with this Agreement will have, good, valid and
marketable title to the Shares, free and clear of all liens, encumbrances,
restrictions, options, warrants, rights to purchase and claims of every kind
(other than the encumbrances created by this Agreement and other than
restrictions on transfer under applicable Federal and State securities laws and
(3) the sale of Shares to Purchaser hereunder will transfer to Purchaser good,
valid and marketable title to said Shares included in such transaction, free of
all liens, encumbrances, restrictions and claims
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of every kind other than restrictions on transfer under applicable Federal and
State securities laws.
4.2. POWER; BINDING AGREEMENT. Stockholder has the full legal
right, power and authority to enter into and perform all of Stockholder's
obligations under this Agreement. The execution and delivery of this Agreement
by Stockholder will not violate any other agreement to which Stockholder is a
party including, without limitation, any voting agreement, stockholders
agreement, voting trust or proxy. This Agreement has been duly executed and
delivered by Stockholder and constitutes a legal, valid and binding agreement
of Stockholder, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws, now or hereafter in effect affecting creditors'
rights and remedies generally or general principles of equity. Neither the
execution or delivery of this Agreement nor the consummation by Stockholder of
the transactions contemplated hereby will (i) require any consent or approval
of or filing by Stockholder with any governmental or other regulatory body
except for filings on Schedule 13D or Schedule 13G and a Form 4 under the
Exchange Act, or (ii) constitute a violation of, conflict with or constitute a
default under, any contract, commitment, agreement, understanding, arrangement
or other restriction of any kind to which Stockholder is a party or by which
Stockholder is bound.
4.3. FINDER'S FEE. No person is, or will be, entitled to any
commission or finder's fees from Stockholder in connection with this Agreement
or the transactions contemplated hereby.
5. REPRESENTATION AND WARRANTIES OF PARENT AND PURCHASER. Each of Parent
and Purchaser represents and warrants to Stockholder as follows:
5.1. POWERS; BINDING AGREEMENT. Each of Parent and Purchaser has
full legal right, power and authority to enter into and perform all of its
obligations under this Agreement. The execution and delivery of this Agreement
by Parent and Purchaser has been authorized by all necessary corporate action
on the part of Parent and Purchaser and will not violate any other agreement to
which Parent and Purchaser is a party. This Agreement has been duly executed
and delivered by each of Parent and Purchaser and constitutes a legal, valid
and binding agreement of Parent and Purchaser, enforceable in accordance with
its terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws, now or hereafter in
effect affecting creditors' rights and remedies generally or general principles
of equity. Neither the execution or delivery of this Agreement nor the
consummation by Parent or Purchaser of the transactions contemplated hereby
will (i) require any consent or approval of or filing by Parent or Purchaser
with any governmental or other regulatory body except for (x) the filings
required under the HSR Act and (y) filings on Schedule 13D under the Exchange
Act, or (ii) constitute a violation of, conflict with or constitute a default
under,
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any contract, commitment, agreement, understanding, arrangement or other
restriction of any kind to which Parent or Purchaser is a party or by which
Parent or Purchaser is bound.
5.2. FINDER'S FEES. Other than the fee payable by Parent as
disclosed in the Merger Agreement, no person is, or will be, entitled to any
commission or finder's fees from Parent or Purchaser in connection with this
Agreement or the transactions contemplated hereby.
5.3. NO CONFLICT; REQUIRED FILINGS AND CONSENTS. The purchase of
Shares from the Stockholder pursuant to this Agreement is for the account of
the Purchaser for the purpose of investment and not with a view to or for sale
in connection with any distribution thereof within the meaning of the
Securities Act and the rules and regulations promulgated thereunder.
6. FURTHER ASSURANCES. From time to time, at the other party's request and
without further consideration, each party hereto shall execute and deliver such
additional documents and take all such further action as may be necessary or
desirable to consummate the transactions contemplated by this Agreement,
including, without limitation, to vest in Purchaser good title to any Shares
purchased hereunder.
7. CERTAIN COVENANTS OF THE STOCKHOLDER. Except in accordance with the
provisions of this Agreement, Stockholder agrees, while this Agreement is in
effect, not to, directly or indirectly:
(a) sell, transfer, pledge, encumber, assign or otherwise
dispose of or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares other than transfers to
family members, trusts for the benefit of the Stockholder or family members or
in connection with estate planning but only if the transferee of such Shares
agrees in writing to be bound by the provisions of this Agreement with respect
to such Shares;
(b) grant any proxies, deposit any Shares into a voting
trust or enter into a voting agreement with respect to any Shares; or
(c) except as otherwise permitted to C.R. Gibson and the
directors of C.R. Gibson pursuant to Section 6.3(a) of the Merger Agreement and
in circumstances where the Stockholder or its representative is acting solely
in his or her capacity as a director of C.R. Gibson, take any action to
encourage, solicit, initiate, or participate in any way in discussions or
negotiations with, or furnish any information to, or afford any access to the
properties, books or records of the Company or any of its subsidiaries to, or
otherwise assist, facilitate or encourage, any person or entity (other than
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Parent and Purchaser, or officers, directors, representatives, agents,
affiliates or associates) in connection with any possible or proposed merger,
consolidation, business combination, liquidation, reorganization, sale or other
disposition of assets, sale of shares of capital stock or similar transactions
involving the Company or any division of the Company.
8. CERTAIN COVENANTS OF PURCHASER AND PARENT.
8.1. OFFER AND MERGER. Parent and Purchaser agree to make the
Offer, and to follow such Offer with the Merger pursuant to the terms, and
subject to the conditions, contained in the Merger Agreement.
8.2. HSR ACT FILINGS. Parent and Purchaser agree to make in a
timely manner any filings required to be made by them under the HSR Act in
connection with the transactions contemplated by this Agreement and the Merger
Agreement.
9. TERMINATION. This Agreement shall terminate on the earliest of:
(a) the date on which Parent, Purchaser and Stockholder
mutually consent to terminate this Agreement in writing;
(b) following the successful consummation of the Offer;
and
(c) prior to the successful consummation of the Offer,
the termination of the Merger Agreement pursuant to its terms.
10. NOTICES. All notices or other communications required or permitted
hereunder shall be in writing (except as otherwise provided herein) and shall
be deemed duly given when received by delivery in person, by telecopy, telex or
telegram or by certified mail, postage prepaid, or by an overnight courier
service, addressed as follows:
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If to Purchaser or Parent: If to Stockholder:
Joe L. Powers Willard J. Overlock
Executive Vice President ----------------------------
Thomas Nelson, Inc. Cummings & Lockwood
501 Nelson Place ----------------------------
Nashville, TN 37214 P. O. Box 120
Telephone: (615) 889-9000 ----------------------------
Facsimile: (615) 883-6353 Stamford, CT 06904
with a copy to: with a copy to:
James H. Cheek, III ----------------------------
Bass, Berry & Sims ----------------------------
2700 First American Center ----------------------------
Nashville, TN 37238 ----------------------------
11. ENTIRE AGREEMENT; AMENDMENT. This Agreement, together with the
documents expressly referred to herein, constitute the entire agreement among
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and understandings among the parties with
respect to such subject matter. This Agreement may not be modified, amended,
altered or supplemented except by an agreement in writing executed by the party
against whom such modification, amendment, alteration or supplement is sought
to be enforced.
12. ASSIGNS. This Agreement shall be binding upon and inure to the benefit
of the parties hereto, and their respective successors and assigns, but neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto without the prior written consent of
the other parties, except that Purchaser may assign any or all of its rights
and obligations hereunder to Parent or any direct or indirect wholly owned
subsidiary of Parent without the consent of Stockholder, but no such transfer
shall relieve Purchaser of its obligations under this Agreement if such
subsidiary does not perform the obligations of Purchaser hereunder.
13. GOVERNING LAW. This Agreement, and all matters relating hereto, shall
be governed by, and construed in accordance with the laws of the State of
Delaware without giving effect to the principles of conflicts of laws thereof.
14. INJUNCTIVE RELIEF. The parties agree that in the event of a breach of
any provision of this Agreement, the aggrieved party may be without an adequate
remedy at law. The parties therefore agree that in the event of a breach of
any provision of this Agreement, the aggrieved party may elect to institute
and prosecute proceedings in any court of competent
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jurisdiction to enforce specific performance or to enjoin the continuing
breach of such provision, as well as to obtain damages for breach of
this Agreement and such aggrieved party may take any such actions without the
necessity of posting a bond. By seeking or obtaining such relief, the
aggrieved party will not be precluded from seeking or obtaining any other
relief to which it may be entitled.
15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
16. SEVERABILITY. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provisions of
this Agreement are so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
17. FURTHER ASSURANCES. Each party hereto shall execute and deliver such
additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
18. THIRD PARTY BENEFICIARIES. Nothing in this Agreement, expressed or
implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
THOMAS NELSON, INC.
By: /s/ Joe L. Powers
-------------------------------
Title: EVP & Secretary
-------------------------
NELSON ACQUISITION CORP.
By: /s/ S. Joseph Moore
-------------------------------
Title: President
-------------------------
/s/ Willard J. Overlock
----------------------------------
Willard J. Overlock
STOCKHOLDER
EX-99.C8
20
STOCK OPTION AGREEMENT, RUDOLF EBERSTADT, JR.
1
EXHIBIT (c)(8)
STOCK OPTION AGREEMENT
Stock Option Agreement dated as of September 13, 1995, by and
among Thomas Nelson, Inc., a Tennessee corporation ("Parent"), Nelson
Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of
Parent ("Purchaser"), and RUDOLF EBERSTADT, JR. ("Stockholder").
RECITALS
A. Concurrently herewith, Parent, Purchaser and The C.R.
Gibson Company, a Delaware corporation ("C.R. Gibson"), are entering into a
Tender Offer and Merger Agreement of even date herewith (the "Merger
Agreement"; capitalized terms used but not defined herein shall have the
meanings set forth in the Merger Agreement), which contemplates, among other
things, that Purchaser will commence a tender offer to purchase all outstanding
shares of C.R. Gibson Common at a price of $9.00 per share (the "Offer").
Subject to the terms and conditions of the Merger Agreement, the Offer will be
followed by a merger (the "Merger") of Purchaser with and into C.R. Gibson.
B. As of the date hereof, Stockholder owns 44,089 shares
of the outstanding C.R. Gibson Common (the "Shares") and desires to (i) grant
to Purchaser the option to acquire all of such Shares at a per share price
equal to the greatest of (x) $9.00, (y) the price per share of C.R. Gibson
Common paid for C.R. Gibson purchased in the Offer or (z) the price paid in any
transaction in which any person or entity shall become the beneficial owner of
50% or more of the outstanding shares of C.R. Gibson Common; (ii) grant to
Purchaser an irrevocable proxy covering the Shares; (iii) enter into an
agreement whereby the Stockholder agrees to tender and not withdraw the Shares
in the Offer; and (iv) agree not to dispose of the Shares or any interest
therein other than in accordance with this Agreement.
C. Parent and Purchaser will enter into the Merger
Agreement in part in reliance on Stockholder's representations, warranties and
agreements under this Agreement.
Agreement
To implement the foregoing and in consideration of the mutual
agreements contained herein, the parties agree as follows:
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1. THE CONDITIONAL PURCHASE OPTION
1.1. GRANT OF OPTION. Stockholder hereby grants to
Purchaser an irrevocable option to purchase the Shares at a per share price
equal to the greatest of (i) $9.00, (ii) the price per share of C.R. Gibson
Common paid for C.R. Gibson Common purchased in the Offer or (iii) the price
paid in any transaction in which any person or entity shall become the
beneficial owner of 50% or more of the C.R. Gibson Common and on the terms and
subject to the conditions set forth herein (the "Option").
1.2. EXERCISE OF OPTION.
(a) The Option may be exercised by Purchaser (or
its designee, which designee must be Parent or a direct or indirect wholly
owned subsidiary of Parent), in whole or in part, at any time, or from time to
time, during the period beginning on the final business day before the
expiration date of the Offer and ending on the Expiration Date. As used
herein, the term "Expiration Date" means the first to occur of any of the
following dates:
(x) consummation of the Offer; or (y) the termination of the Merger
Agreement pursuant to its terms (unless Purchaser has theretofore
sent the written notice specified in Section 1.2(b)).
(b) If Purchaser wishes to exercise the Option
(the "Option Purchase"), Purchaser shall send a written notice to Stockholder
of its intention to exercise the Option, specifying the number of Shares to be
purchased, whether Purchaser and/or a designee of Purchaser will be purchasing
the Shares and the place, and, if then known, time and date of the closing of
such purchase (the "Closing Date" or the "Closing"), which date shall not be
less than two business days nor more than ten business days from the date on
which such notice is delivered; provided, that the Closing shall be held only
if (i) such purchase would not otherwise violate or cause the violation of, any
applicable law or regulations (including, the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and regulations
thereunder, or the rules of the New York Stock Exchange or American Stock
Exchange, (ii) no statute, rule, regulation, decree, order or injunction shall
have been promulgated, enacted, entered into or enforced by any governmental
agency or authority or court which prohibits delivery of the Shares, whether
temporary, preliminary or permanent (provided, however, that the parties hereto
shall use their reasonable efforts to have any such order, decree or injunction
vacated or reversed) and (iii) there has been no material breach of the Merger
Agreement by the Purchaser or Parent. In the event the Closing is delayed as a
result of clause (i) or (ii) above, the
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Closing Date shall be within five business days following the cessation of such
violation, statute, rule, regulation, decree, order or injunction, as the case
may be but not later than the Expiration Date.
If within one year following an exercise of the Option, there
occurs a transaction in which any person or entity (other than Purchaser,
Parent or an affiliate of either of them) becomes the beneficial owner of 50%
or more of the C.R. Gibson Common and in which the consideration paid to
Purchaser or Parent exceeds the exercise price of the Option, the Purchaser
will, promptly following consummation of such transaction, pay to the
Stockholder an amount equal to the excess of the consideration paid in such
transaction per share of C.R. Gibson Common over the exercise price per share,
multiplied by the number of shares acquired upon exercise of the Option. The
provisions of this paragraph shall terminate at such time as Purchaser, Parent
or any affiliate of either of them owns 100% of the C.R. Gibson Common then
outstanding.
Notwithstanding the foregoing, if a transaction is proposed in
which any person or entity (other than Purchaser, Parent or an affiliate of
either of them) would become the beneficial owner of 50% or more of the
outstanding C.R. Gibson Common and if the exercise price per share under the
Option shall be the amount proposed to be paid in such transaction, any notice
given pursuant to this Section 1.2(b) shall be given to Stockholder not less
than five business days prior to the termination of Stockholder's rights to
participate in such transaction. In the event notice of exercise is given by
Purchaser in accordance with the preceding sentence, the obligation of
Purchaser to purchase the Shares described in such notice shall be subject to
the condition that the transaction in which the person or entity would become
the beneficial owner of 50% or more of the C.R. Gibson Common shall have been
consummated.
2. AGREEMENT TO TENDER SHARES. Stockholder agrees to accept the Offer,
to tender the Shares into the Offer and not to withdraw such Shares prior to
consummation of the Offer or withdrawal of the Offer by Purchaser, unless a
transaction is proposed in which any person or entity (other than Purchaser or
Parent) would become the beneficial owner of 50% or more of the outstanding
C.R. Gibson Common and Purchaser shall not have exercised the Option.
3. IRREVOCABLE PROXY. Stockholder hereby irrevocably appoints S. Joseph
Moore and Joe L. Powers, or either of them, as its attorney and proxy, with
full power of substitution, to vote or to express written consent or dissent in
such manner as such attorney and proxy or its substitute shall, in its sole
discretion, deem proper, and otherwise act (including pursuant to any corporate
action in writing without a meeting) with respect to all of the Shares which it
is entitled to vote at any meeting of stockholders (whether annual or special
and whether or not an adjourned meeting) of C.R. Gibson, or pursuant to written
action taken in lieu of any such meeting or otherwise; provided, however, that
Stockholder
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grants a proxy hereunder only with respect to the following matters (the
"Designated Matters"): (i) votes or consents with respect to the Merger; (ii)
votes or consents with respect to any action or agreement that would result in
a breach of any covenant, representation or warranty or any other obligation or
agreement of C.R. Gibson under the Merger Agreement; (iii) votes or consents
with respect to any action or agreement that would impede, interfere with,
delay, postpone or attempt to discourage the Offer or the Merger, including,
but not limited to, (a) any extraordinary corporate transaction (other than the
Offer and the Merger), such as a merger, other business combination,
reorganization or liquidation involving C.R. Gibson, (b) a sale or transfer of
a material amount of assets of C.R. Gibson or any of its subsidiaries, (c) any
change in the board of directors of C.R. Gibson, except as otherwise agreed to
in writing by Parent, or (d) any material change in the present capitalization
of C.R. Gibson; and (iv) votes or consents relating to any other material
change in the corporate structure or business of C.R. Gibson. This proxy is
irrevocable, is coupled with an interest sufficient in law to support an
irrevocable proxy and is granted in consideration of and as an inducement to
cause the Parent and Purchaser to enter into the transactions contemplated by
this Agreement and the Merger Agreement. This proxy shall revoke any other
proxy granted by Stockholder at any time with respect to the Shares and no
subsequent proxies will be given with respect thereto by Stockholder. In
addition, if subsequent to the date hereof Stockholder is entitled to vote the
Shares for any purpose, it shall take all actions necessary to vote the Shares
pursuant to instructions received from Purchaser; provided, however, that the
provisions of this sentence shall only apply to the Designated Matters. It is
expressly understood and acknowledged by the parties hereto that nothing
contained herein is intended to restrict the Stockholder (if the Stockholder is
also a director of C.R. Gibson) from voting on any matter, or otherwise from
acting, in the Stockholder's capacity as a director of C.R. Gibson with
respect to any matter, including but not limited to, the general management of
over-all operation of C.R. Gibson.
4. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder represents
and warrants to Parent and Purchaser as follows:
4.1. OWNERSHIP OF SHARES. On the date hereof, the Shares
are all of the shares of C.R. Gibson Common currently beneficially owned by the
Stockholder. (1) Stockholder does not have any rights to acquire any
additional shares of C.R. Gibson Common from C.R. Gibson, (2) Stockholder
currently has, and at the exercise of the Option and the sale of the Shares to
Purchaser in accordance with this Agreement will have, good, valid and
marketable title to the Shares, free and clear of all liens, encumbrances,
restrictions, options, warrants, rights to purchase and claims of every kind
(other than the encumbrances created by this Agreement and other than
restrictions on transfer under applicable Federal and State securities laws and
(3) the sale of Shares to Purchaser hereunder will transfer to Purchaser good,
valid and marketable title to said Shares included in such transaction, free of
all liens, encumbrances, restrictions and claims
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of every kind other than restrictions on transfer under applicable Federal and
State securities laws.
4.2. POWER; BINDING AGREEMENT. Stockholder has the full
legal right, power and authority to enter into and perform all of Stockholder's
obligations under this Agreement. The execution and delivery of this Agreement
by Stockholder will not violate any other agreement to which Stockholder is a
party including, without limitation, any voting agreement, stockholders
agreement, voting trust or proxy. This Agreement has been duly executed and
delivered by Stockholder and constitutes a legal, valid and binding agreement
of Stockholder, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws, now or hereafter in effect affecting creditors'
rights and remedies generally or general principles of equity. Neither the
execution or delivery of this Agreement nor the consummation by Stockholder of
the transactions contemplated hereby will (i) require any consent or approval
of or filing by Stockholder with any governmental or other regulatory body
except for filings on Schedule 13D or Schedule 13G and a Form 4 under the
Exchange Act, or (ii) constitute a violation of, conflict with or constitute a
default under, any contract, commitment, agreement, understanding, arrangement
or other restriction of any kind to which Stockholder is a party or by which
Stockholder is bound.
4.3. FINDER'S FEE. No person is, or will be, entitled to
any commission or finder's fees from Stockholder in connection with this
Agreement or the transactions contemplated hereby.
5. REPRESENTATION AND WARRANTIES OF PARENT AND PURCHASER. Each of Parent
and Purchaser represents and warrants to Stockholder as follows:
5.1. POWERS; BINDING AGREEMENT. Each of Parent and
Purchaser has full legal right, power and authority to enter into and perform
all of its obligations under this Agreement. The execution and delivery of
this Agreement by Parent and Purchaser has been authorized by all necessary
corporate action on the part of Parent and Purchaser and will not violate any
other agreement to which Parent and Purchaser is a party. This Agreement has
been duly executed and delivered by each of Parent and Purchaser and
constitutes a legal, valid and binding agreement of Parent and Purchaser,
enforceable in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium and similar
laws, now or hereafter in effect affecting creditors' rights and remedies
generally or general principles of equity. Neither the execution or delivery
of this Agreement nor the consummation by Parent or Purchaser of the
transactions contemplated hereby will (i) require any consent or approval of or
filing by Parent or Purchaser with any governmental or other regulatory body
except for (x) the filings required under the HSR Act and (y) filings on
Schedule 13D under the Exchange Act, or (ii) constitute a violation of,
conflict with or constitute a default under,
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any contract, commitment, agreement, understanding, arrangement or other
restriction of any kind to which Parent or Purchaser is a party or by which
Parent or Purchaser is bound.
5.2. FINDER'S FEES. Other than the fee payable by Parent
as disclosed in the Merger Agreement, no person is, or will be, entitled to any
commission or finder's fees from Parent or Purchaser in connection with this
Agreement or the transactions contemplated hereby.
5.3. NO CONFLICT; REQUIRED FILINGS AND CONSENTS. The
purchase of Shares from the Stockholder pursuant to this Agreement is for the
account of the Purchaser for the purpose of investment and not with a view to
or for sale in connection with any distribution thereof within the meaning of
the Securities Act and the rules and regulations promulgated thereunder.
6. FURTHER ASSURANCES. From time to time, at the other party's request
and without further consideration, each party hereto shall execute and deliver
such additional documents and take all such further action as may be necessary
or desirable to consummate the transactions contemplated by this Agreement,
including, without limitation, to vest in Purchaser good title to any Shares
purchased hereunder.
7. CERTAIN COVENANTS OF THE STOCKHOLDER. Except in accordance with the
provisions of this Agreement, Stockholder agrees, while this Agreement is in
effect, not to, directly or indirectly:
(a) sell, transfer, pledge, encumber, assign or
otherwise dispose of or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares other than transfers to
family members, trusts for the benefit of the Stockholder or family members or
in connection with estate planning but only if the transferee of such Shares
agrees in writing to be bound by the provisions of this Agreement with respect
to such Shares;
(b) grant any proxies, deposit any Shares into a
voting trust or enter into a voting agreement with respect to any Shares; or
(c) except as otherwise permitted to C.R. Gibson
and the directors of C.R. Gibson pursuant to Section 6.3(a) of the Merger
Agreement and in circumstances where the Stockholder or its representative is
acting solely in his or her capacity as a director of C.R. Gibson, take any
action to encourage, solicit, initiate, or participate in any way in
discussions or negotiations with, or furnish any information to, or afford any
access to the properties, books or records of the Company or any of its
subsidiaries to, or otherwise assist, facilitate or encourage, any person or
entity (other than
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Parent and Purchaser, or officers, directors, representatives, agents,
affiliates or associates) in connection with any possible or proposed merger,
consolidation, business combination, liquidation, reorganization, sale or other
disposition of assets, sale of shares of capital stock or similar transactions
involving the Company or any division of the Company.
8. CERTAIN COVENANTS OF PURCHASER AND PARENT.
8.1. OFFER AND MERGER. Parent and Purchaser agree to make
the Offer, and to follow such Offer with the Merger pursuant to the terms, and
subject to the conditions, contained in the Merger Agreement.
8.2. HSR ACT FILINGS. Parent and Purchaser agree to make
in a timely manner any filings required to be made by them under the HSR Act in
connection with the transactions contemplated by this Agreement and the Merger
Agreement.
9. TERMINATION. This Agreement shall terminate on the earliest of:
(a) the date on which Parent, Purchaser and
Stockholder mutually consent to terminate this Agreement in writing;
(b) following the successful consummation of the
Offer; and
(c) prior to the successful consummation of the
Offer, the termination of the Merger Agreement pursuant to its terms.
10. NOTICES. All notices or other communications required or permitted
hereunder shall be in writing (except as otherwise provided herein) and shall
be deemed duly given when received by delivery in person, by telecopy, telex or
telegram or by certified mail, postage prepaid, or by an overnight courier
service, addressed as follows:
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If to Purchaser or Parent: If to Stockholder:
Joe L. Powers 719 Valley Road
Executive Vice President ----------------------
Thomas Nelson, Inc. New Canaan, CT 06840
501 Nelson Place ----------------------
Nashville, TN 37214 ----------------------
Telephone: (615) 889-9000
Facsimile: (615) 883-6353
with a copy to: with a copy to:
James H. Cheek, III ----------------------
Bass, Berry & Sims ----------------------
2700 First American Center ----------------------
Nashville, TN 37238 ----------------------
11. ENTIRE AGREEMENT; AMENDMENT. This Agreement, together with the
documents expressly referred to herein, constitute the entire agreement among
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and understandings among the parties with
respect to such subject matter. This Agreement may not be modified, amended,
altered or supplemented except by an agreement in writing executed by the party
against whom such modification, amendment, alteration or supplement is sought
to be enforced.
12. ASSIGNS. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and assigns, but
neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto without the prior
written consent of the other parties, except that Purchaser may assign any or
all of its rights and obligations hereunder to Parent or any direct or indirect
wholly owned subsidiary of Parent without the consent of Stockholder, but no
such transfer shall relieve Purchaser of its obligations under this Agreement
if such subsidiary does not perform the obligations of Purchaser hereunder.
13. GOVERNING LAW. This Agreement, and all matters relating hereto, shall
be governed by, and construed in accordance with the laws of the State of
Delaware without giving effect to the principles of conflicts of laws thereof.
14. INJUNCTIVE RELIEF. The parties agree that in the event of a breach of
any provision of this Agreement, the aggrieved party may be without an adequate
remedy at law. The parties therefore agree that in the event of a breach of
any provision of this Agreement, the aggrieved party may elect to institute
and prosecute proceedings in any court of competent
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jurisdiction to enforce specific performance or to enjoin the continuing
breach of such provision, as well as to obtain damages for breach of
this Agreement and such aggrieved party may take any such actions without the
necessity of posting a bond. By seeking or obtaining such relief, the
aggrieved party will not be precluded from seeking or obtaining any other
relief to which it may be entitled.
15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
16. SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provisions of
this Agreement are so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
17. FURTHER ASSURANCES. Each party hereto shall execute and deliver such
additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
18. THIRD PARTY BENEFICIARIES. Nothing in this Agreement, expressed or
implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
THOMAS NELSON, INC.
By: /s/ Joe L. Powers
------------------------------------
Title: EVP & Secretary
---------------------------
NELSON ACQUISITION CORP.
By: /s/ S. Joseph Moore
------------------------------------
Title: President
---------------------------
/s/ Rudolf Eberstadt, Jr.
---------------------------------------
Rudolf Eberstadt, Jr.
STOCKHOLDER
EX-99.C9
21
STOCK OPTION AGREEMENT, R.E. CHARITABLE UNITRUST
1
EXHIBIT (c)(9)
STOCK OPTION AGREEMENT
Stock Option Agreement dated as of September 13, 1995, by and
among Thomas Nelson, Inc., a Tennessee corporation ("Parent"), Nelson
Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of
Parent ("Purchaser"), and RUDOLPH EBERSTADT CHARITABLE REMAINDER UNITRUST
("Stockholder").
RECITALS
A. Concurrently herewith, Parent, Purchaser and The C.R.
Gibson Company, a Delaware corporation ("C.R. Gibson"), are entering into a
Tender Offer and Merger Agreement of even date herewith (the "Merger
Agreement"; capitalized terms used but not defined herein shall have the
meanings set forth in the Merger Agreement), which contemplates, among other
things, that Purchaser will commence a tender offer to purchase all outstanding
shares of C.R. Gibson Common at a price of $9.00 per share (the "Offer").
Subject to the terms and conditions of the Merger Agreement, the Offer will be
followed by a merger (the "Merger") of Purchaser with and into C.R. Gibson.
B. As of the date hereof, Stockholder owns 52,083 shares
of the outstanding C.R. Gibson Common (the "Shares") and desires to (i) grant
to Purchaser the option to acquire all of such Shares at a per share price
equal to the greatest of (x) $9.00, (y) the price per share of C.R. Gibson
Common paid for C.R. Gibson purchased in the Offer or (z) the price paid in any
transaction in which any person or entity shall become the beneficial owner of
50% or more of the outstanding shares of C.R. Gibson Common; (ii) grant to
Purchaser an irrevocable proxy covering the Shares; (iii) enter into an
agreement whereby the Stockholder agrees to tender and not withdraw the Shares
in the Offer; and (iv) agree not to dispose of the Shares or any interest
therein other than in accordance with this Agreement.
C. Parent and Purchaser will enter into the Merger
Agreement in part in reliance on Stockholder's representations, warranties and
agreements under this Agreement.
AGREEMENT
To implement the foregoing and in consideration of the mutual
agreements contained herein, the parties agree as follows:
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1. THE CONDITIONAL PURCHASE OPTION
1.1. GRANT OF OPTION. Stockholder hereby grants to
Purchaser an irrevocable option to purchase the Shares at a per share price
equal to the greatest of (i) $9.00, (ii) the price per share of C.R. Gibson
Common paid for C.R. Gibson Common purchased in the Offer or (iii) the price
paid in any transaction in which any person or entity shall become the
beneficial owner of 50% or more of the C.R. Gibson Common and on the terms and
subject to the conditions set forth herein (the "Option").
1.2 EXERCISE OF OPTION.
(a) The Option may be exercised by Purchaser (or
its designee, which designee must be Parent or a direct or indirect wholly
owned subsidiary of Parent), in whole or in part, at any time, or from time to
time, during the period beginning on the final business day before the
expiration date of the Offer and ending on the Expiration Date. As used
herein, the term "Expiration Date" means the first to occur of any of the
following dates:
(x) consummation of the Offer; or (y) the termination of the
Merger Agreement pursuant to its terms (unless Purchaser has
theretofore sent the written notice specified in Section
1.2(b)).
(b) If Purchaser wishes to exercise the Option
(the "Option Purchase"), Purchaser shall send a written notice to Stockholder
of its intention to exercise the Option, specifying the number of Shares to be
purchased, whether Purchaser and/or a designee of Purchaser will be purchasing
the Shares and the place, and, if then known, time and date of the closing of
such purchase (the "Closing Date" or the "Closing"), which date shall not be
less than two business days nor more than ten business days from the date on
which such notice is delivered; provided, that the Closing shall be held only
if (i) such purchase would not otherwise violate or cause the violation of, any
applicable law or regulations (including, the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and regulations
thereunder, or the rules of the New York Stock Exchange or American Stock
Exchange, (ii) no statute, rule, regulation, decree, order or injunction shall
have been promulgated, enacted, entered into or enforced by any governmental
agency or authority or court which prohibits delivery of the Shares, whether
temporary, preliminary or permanent (provided, however, that the parties hereto
shall use their reasonable efforts to have any such order, decree or injunction
vacated or reversed) and (iii) there has been no material breach of the Merger
Agreement by the Purchaser or Parent. In the event the Closing is delayed as a
result of clause (i) or (ii) above, the Closing Date shall be within five
business days following the cessation of such violation,
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statute, rule, regulation, decree, order or injunction, as the case may be but
not later than the Expiration Date.
If within one year following an exercise of the Option, there
occurs a transaction in which any person or entity (other than Purchaser,
Parent or an affiliate of either of them) becomes the beneficial owner of 50%
or more of the C.R. Gibson Common and in which the consideration paid to
Purchaser or Parent exceeds the exercise price of the Option, the Purchaser
will, promptly following consummation of such transaction, pay to the
Stockholder an amount equal to the excess of the consideration paid in such
transaction per share of C.R. Gibson Common over the exercise price per share,
multiplied by the number of shares acquired upon exercise of the Option. The
provisions of this paragraph shall terminate at such time as Purchaser, Parent
or any affiliate of either of them owns 100% of the C.R. Gibson Common then
outstanding.
Notwithstanding the foregoing, if a transaction is proposed in
which any person or entity (other than Purchaser, Parent or an affiliate of
either of them) would become the beneficial owner of 50% or more of the
outstanding C.R. Gibson Common and if the exercise price per share under the
Option shall be the amount proposed to be paid in such transaction, any notice
given pursuant to this Section 1.2(b) shall be given to Stockholder not less
than five business days prior to the termination of Stockholder's rights to
participate in such transaction. In the event notice of exercise is given by
Purchaser in accordance with the preceding sentence, the obligation of
Purchaser to purchase the Shares described in such notice shall be subject to
the condition that the transaction in which the person or entity would become
the beneficial owner of 50% or more of the C.R. Gibson Common shall have been
consummated.
2. AGREEMENT TO TENDER SHARES. Stockholder agrees to accept the Offer,
to tender the Shares into the Offer and not to withdraw such Shares prior to
consummation of the Offer or withdrawal of the Offer by Purchaser, unless a
transaction is proposed in which any person or entity (other than Purchaser or
Parent) would become the beneficial owner of 50% or more of the outstanding
C.R. Gibson Common and Purchaser shall not have exercised the Option.
3. IRREVOCABLE PROXY. Stockholder hereby irrevocably appoints S. Joseph
Moore and Joe L. Powers, or either of them, as its attorney and proxy, with
full power of substitution, to vote or to express written consent or dissent in
such manner as such attorney and proxy or its substitute shall, in its sole
discretion, deem proper, and otherwise act (including pursuant to any corporate
action in writing without a meeting) with respect to all of the Shares which it
is entitled to vote at any meeting of stockholders (whether annual or special
and whether or not an adjourned meeting) of C.R. Gibson, or pursuant to written
action taken in lieu of any such meeting or otherwise; provided, however, that
Stockholder grants a proxy hereunder only with respect to the following matters
(the "Designated
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Matters"): (i) votes or consents with respect to the Merger; (ii) votes or
consents with respect to any action or agreement that would result in a breach
of any covenant, representation or warranty or any other obligation or
agreement of C.R. Gibson under the Merger Agreement; (iii) votes or consents
with respect to any action or agreement that would impede, interfere with,
delay, postpone or attempt to discourage the Offer or the Merger, including,
but not limited to, (a) any extraordinary corporate transaction (other than the
Offer and the Merger), such as a merger, other business combination,
reorganization or liquidation involving C.R. Gibson, (b) a sale or transfer of
a material amount of assets of C.R. Gibson or any of its subsidiaries, (c) any
change in the board of directors of C.R. Gibson, except as otherwise agreed to
in writing by Parent, or (d) any material change in the present capitalization
of C.R. Gibson; and (iv) votes or consents relating to any other material
change in the corporate structure or business of C.R. Gibson. This proxy is
irrevocable, is coupled with an interest sufficient in law to support an
irrevocable proxy and is granted in consideration of and as an inducement to
cause the Parent and Purchaser to enter into the transactions contemplated by
this Agreement and the Merger Agreement. This proxy shall revoke any other
proxy granted by Stockholder at any time with respect to the Shares and no
subsequent proxies will be given with respect thereto by Stockholder. In
addition, if subsequent to the date hereof Stockholder is entitled to vote the
Shares for any purpose, it shall take all actions necessary to vote the Shares
pursuant to instructions received from Purchaser; provided, however, that the
provisions of this sentence shall only apply to the Designated Matters. It is
expressly understood and acknowledged by the parties hereto that nothing
contained herein is intended to restrict the Stockholder (if the Stockholder is
also a director of C.R. Gibson) from voting on any matter, or otherwise from
acting, in the Stockholder's capacity as a director of C.R. Gibson with
respect to any matter, including but not limited to, the general management of
over-all operation of C.R. Gibson.
4. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder represents
and warrants to Parent and Purchaser as follows:
4.1 OWNERSHIP OF SHARES. On the date hereof, the Shares
are all of the shares of C.R. Gibson Common currently beneficially owned by the
Stockholder. (1) Stockholder does not have any rights to acquire any
additional shares of C.R. Gibson Common from C.R. Gibson, (2) Stockholder
currently has, and at the exercise of the Option and the sale of the Shares to
Purchaser in accordance with this Agreement will have, good, valid and
marketable title to the Shares, free and clear of all liens, encumbrances,
restrictions, options, warrants, rights to purchase and claims of every kind
(other than the encumbrances created by this Agreement and other than
restrictions on transfer under applicable Federal and State securities laws and
(3) the sale of Shares to Purchaser hereunder will transfer to Purchaser good,
valid and marketable title to said Shares included in such transaction, free of
all liens, encumbrances, restrictions and claims
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of every kind other than restrictions on transfer under applicable Federal and
State securities laws.
4.2 POWER; BINDING AGREEMENT. Stockholder has the full
legal right, power and authority to enter into and perform all of Stockholder's
obligations under this Agreement. The execution and delivery of this Agreement
by Stockholder will not violate any other agreement to which Stockholder is a
party including, without limitation, any voting agreement, stockholders
agreement, voting trust or proxy. This Agreement has been duly executed and
delivered by Stockholder and constitutes a legal, valid and binding agreement
of Stockholder, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws, now or hereafter in effect affecting creditors'
rights and remedies generally or general principles of equity. Neither the
execution or delivery of this Agreement nor the consummation by Stockholder of
the transactions contemplated hereby will (i) require any consent or approval
of or filing by Stockholder with any governmental or other regulatory body
except for filings on Schedule 13D or Schedule 13G and a Form 4 under the
Exchange Act, or (ii) constitute a violation of, conflict with or constitute a
default under, any contract, commitment, agreement, understanding, arrangement
or other restriction of any kind to which Stockholder is a party or by which
Stockholder is bound.
4.3 FINDER'S FEE. No person is, or will be, entitled to
any commission or finder's fees from Stockholder in connection with this
Agreement or the transactions contemplated hereby.
5. REPRESENTATION AND WARRANTIES OF PARENT AND PURCHASER. Each of Parent
and Purchaser represents and warrants to Stockholder as follows:
5.1 POWERS; BINDING AGREEMENT. Each of Parent and
Purchaser has full legal right, power and authority to enter into and perform
all of its obligations under this Agreement. The execution and delivery of
this Agreement by Parent and Purchaser has been authorized by all necessary
corporate action on the part of Parent and Purchaser and will not violate any
other agreement to which Parent and Purchaser is a party. This Agreement has
been duly executed and delivered by each of Parent and Purchaser and
constitutes a legal, valid and binding agreement of Parent and Purchaser,
enforceable in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium and similar
laws, now or hereafter in effect affecting creditors' rights and remedies
generally or general principles of equity. Neither the execution or delivery
of this Agreement nor the consummation by Parent or Purchaser of the
transactions contemplated hereby will (i) require any consent or approval of or
filing by Parent or Purchaser with any governmental or other regulatory body
except for (x) the filings required under the HSR Act and (y) filings on
Schedule 13D under the Exchange Act, or (ii) constitute a violation of,
conflict with or constitute a default under,
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any contract, commitment, agreement, understanding, arrangement or other
restriction of any kind to which Parent or Purchaser is a party or by which
Parent or Purchaser is bound.
5.2 FINDER'S FEES. Other than the fee payable by Parent
as disclosed in the Merger Agreement, no person is, or will be, entitled to any
commission or finder's fees from Parent or Purchaser in connection with this
Agreement or the transactions contemplated hereby.
5.3 NO CONFLICT; REQUIRED FILINGS AND CONSENTS. The
purchase of Shares from the Stockholder pursuant to this Agreement is for the
account of the Purchaser for the purpose of investment and not with a view to
or for sale in connection with any distribution thereof within the meaning of
the Securities Act and the rules and regulations promulgated thereunder.
6. FURTHER ASSURANCES. From time to time, at the other party's request
and without further consideration, each party hereto shall execute and deliver
such additional documents and take all such further action as may be necessary
or desirable to consummate the transactions contemplated by this Agreement,
including, without limitation, to vest in Purchaser good title to any Shares
purchased hereunder.
7. CERTAIN COVENANTS OF THE STOCKHOLDER. Except in accordance with the
provisions of this Agreement, Stockholder agrees, while this Agreement is in
effect, not to, directly or indirectly:
(a) sell, transfer, pledge, encumber, assign or
otherwise dispose of or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares other than transfers to
family members, trusts for the benefit of the Stockholder or family members or
in connection with estate planning but only if the transferee of such Shares
agrees in writing to be bound by the provisions of this Agreement with respect
to such Shares;
(b) grant any proxies, deposit any Shares into a
voting trust or enter into a voting agreement with respect to any Shares; or
(c) except as otherwise permitted to C.R. Gibson
and the directors of C.R. Gibson pursuant to Section 6.3(a) of the Merger
Agreement and in circumstances where the Stockholder or its representative is
acting solely in his or her capacity as a director of C.R. Gibson, take any
action to encourage, solicit, initiate, or participate in any way in
discussions or negotiations with, or furnish any information to, or afford any
access to the properties, books or records of the Company or any of its
subsidiaries to, or otherwise assist, facilitate or encourage, any person or
entity (other than
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Parent and Purchaser, or officers, directors, representatives, agents,
affiliates or associates) in connection with any possible or proposed merger,
consolidation, business combination, liquidation, reorganization, sale or other
disposition of assets, sale of shares of capital stock or similar transactions
involving the Company or any division of the Company.
8. CERTAIN COVENANTS OF PURCHASER AND PARENT.
8.1 OFFER AND MERGER. Parent and Purchaser agree to make
the Offer, and to follow such Offer with the Merger pursuant to the terms, and
subject to the conditions, contained in the Merger Agreement.
8.2 HSR ACT FILINGS. Parent and Purchaser agree to make
in a timely manner any filings required to be made by them under the HSR Act in
connection with the transactions contemplated by this Agreement and the Merger
Agreement.
9. TERMINATION. This Agreement shall terminate on the earliest of:
(a) the date on which Parent, Purchaser and
Stockholder mutually consent to terminate this Agreement in writing;
(b) following the successful consummation of the
Offer; and
(c) prior to the successful consummation of the
Offer, the termination of the Merger Agreement pursuant to its terms.
10. NOTICES. All notices or other communications required or permitted
hereunder shall be in writing (except as otherwise provided herein) and shall
be deemed duly given when received by delivery in person, by telecopy, telex or
telegram or by certified mail, postage prepaid, or by an overnight courier
service, addressed as follows:
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If to Purchaser or Parent: If to Stockholder:
Joe L. Powers 427 Bridgeport Ave.
Executive Vice President -----------------------
Thomas Nelson, Inc. Shelton, CT 06484
501 Nelson Place -----------------------
Nashville, TN 37214
Telephone: (615) 889-9000 -----------------------
Facsimile: (615) 883-6353
with a copy to: with a copy to:
James H. Cheek, III -----------------------
Bass, Berry & Sims -----------------------
2700 First American Center -----------------------
Nashville, TN 37238 -----------------------
11. ENTIRE AGREEMENT; AMENDMENT. This Agreement, together with the
documents expressly referred to herein, constitute the entire agreement among
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and understandings among the parties with
respect to such subject matter. This Agreement may not be modified, amended,
altered or supplemented except by an agreement in writing executed by the party
against whom such modification, amendment, alteration or supplement is sought
to be enforced.
12. ASSIGNS. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and assigns, but
neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto without the prior
written consent of the other parties, except that Purchaser may assign any or
all of its rights and obligations hereunder to Parent or any direct or indirect
wholly owned subsidiary of Parent without the consent of Stockholder, but no
such transfer shall relieve Purchaser of its obligations under this Agreement
if such subsidiary does not perform the obligations of Purchaser hereunder.
13. GOVERNING LAW. This Agreement, and all matters relating hereto, shall
be governed by, and construed in accordance with the laws of the State of
Delaware without giving effect to the principles of conflicts of laws thereof.
14. INJUNCTIVE RELIEF. The parties agree that in the event of a breach of
any provision of this Agreement, the aggrieved party may be without an adequate
remedy at law. The parties therefore agree that in the event of a breach of
any provision of this Agreement, the aggrieved party may elect to institute
and prosecute proceedings in any court of competent
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jurisdiction to enforce specific performance or to enjoin the continuing
breach of such provision, as well as to obtain damages for breach of
this Agreement and such aggrieved party may take any such actions without the
necessity of posting a bond. By seeking or obtaining such relief, the
aggrieved party will not be precluded from seeking or obtaining any other
relief to which it may be entitled.
15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
16. SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provisions of
this Agreement are so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
17. FURTHER ASSURANCES. Each party hereto shall execute and deliver such
additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
18. THIRD PARTY BENEFICIARIES. Nothing in this Agreement, expressed or
implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
THOMAS NELSON, INC.
By:
------------------------
Title:
------------------
NELSON ACQUISITION CORP.
By:
------------------------
Title:
------------------
RUDOLPH EBERSTADT CHARITABLE
REMAINDER UNITRUST
By: /s/ Rudolph Eberstadt
-----------------------
Title: Trustee
-----------------
STOCKHOLDER
EX-99.C10
22
STOCK OPTION AGREEMENT, OVERSEAS EQUITY PARTNERS
1
EXHIBIT (c)(10)
STOCK OPTION AGREEMENT
Stock Option Agreement dated as of September 13, 1995, by and
among Thomas Nelson, Inc., a Tennessee corporation ("Parent"), Nelson
Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of
Parent ("Purchaser"), and OVERSEAS EQUITY INVESTOR PARTNERS ("Stockholder").
RECITALS
A. Concurrently herewith, Parent, Purchaser and The C.R.
Gibson Company, a Delaware corporation ("C.R. Gibson"), are entering into a
Tender Offer and Merger Agreement of even date herewith (the "Merger
Agreement"; capitalized terms used but not defined herein shall have the
meanings set forth in the Merger Agreement), which contemplates, among other
things, that Purchaser will commence a tender offer to purchase all outstanding
shares of C.R. Gibson Common at a price of $9.00 per share (the "Offer").
Subject to the terms and conditions of the Merger Agreement, the Offer will be
followed by a merger (the "Merger") of Purchaser with and into C.R. Gibson.
B. As of the date hereof, Stockholder owns 113,333
shares of the outstanding C.R. Gibson Common (the "Shares") and desires to (i)
grant to Purchaser the option to acquire all of such Shares at a per share
price equal to the greatest of (x) $9.00, (y) the price per share of C.R.
Gibson Common paid for C.R. Gibson purchased in the Offer or (z) the price paid
in any transaction in which any person or entity shall become the beneficial
owner of 50% or more of the outstanding shares of C.R. Gibson Common; (ii)
grant to Purchaser an irrevocable proxy covering the Shares; (iii) enter into
an agreement whereby the Stockholder agrees to tender and not withdraw the
Shares in the Offer; and (iv) agree not to dispose of the Shares or any
interest therein other than in accordance with this Agreement.
C. Parent and Purchaser will enter into the Merger
Agreement in part in reliance on Stockholder's representations, warranties and
agreements under this Agreement.
AGREEMENT
To implement the foregoing and in consideration of the mutual
agreements contained herein, the parties agree as follows:
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1. THE CONDITIONAL PURCHASE OPTION
1.1. GRANT OF OPTION. Stockholder hereby grants to
Purchaser an irrevocable option to purchase the Shares at a per share price
equal to the greatest of (i) $9.00, (ii) the price per share of C.R. Gibson
Common paid for C.R. Gibson Common purchased in the Offer or (iii) the price
paid in any transaction in which any person or entity shall become the
beneficial owner of 50% or more of the C.R. Gibson Common and on the terms and
subject to the conditions set forth herein (the "Option").
1.2. EXERCISE OF OPTION.
(a) The Option may be exercised by Purchaser (or
its designee, which designee must be Parent or a direct or indirect wholly
owned subsidiary of Parent), in whole or in part, at any time, or from time to
time, during the period beginning on the final business day before the
expiration date of the Offer and ending on the Expiration Date. As used
herein, the term "Expiration Date" means the first to occur of any of the
following dates:
(x) consummation of the Offer; or (y) the termination of the
Merger Agreement pursuant to its terms (unless Purchaser has
theretofore sent the written notice specified in Section 1.2(b)).
(b) If Purchaser wishes to exercise the Option
(the "Option Purchase"), Purchaser shall send a written notice to Stockholder
of its intention to exercise the Option, specifying the number of Shares to be
purchased, whether Purchaser and/or a designee of Purchaser will be purchasing
the Shares and the place, and, if then known, time and date of the closing of
such purchase (the "Closing Date" or the "Closing"), which date shall not be
less than two business days nor more than ten business days from the date on
which such notice is delivered; provided, that the Closing shall be held only
if (i) such purchase would not otherwise violate or cause the violation of, any
applicable law or regulations (including, the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and regulations
thereunder, or the rules of the New York Stock Exchange or American Stock
Exchange, (ii) no statute, rule, regulation, decree, order or injunction shall
have been promulgated, enacted, entered into or enforced by any governmental
agency or authority or court which prohibits delivery of the Shares, whether
temporary, preliminary or permanent (provided, however, that the parties hereto
shall use their reasonable efforts to have any such order, decree or injunction
vacated or reversed) and (iii) there has been no material breach of the Merger
Agreement by the Purchaser or Parent. In the event the Closing is delayed as a
result of clause (i) or (ii) above, the Closing Date shall be within five
business days following the cessation of such violation,
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statute, rule, regulation, decree, order or injunction, as the case may be but
not later than the Expiration Date.
If within one year following an exercise of the Option, there
occurs a transaction in which any person or entity (other than Purchaser,
Parent or an affiliate of either of them) becomes the beneficial owner of 50%
or more of the C.R. Gibson Common and in which the consideration paid to
Purchaser or Parent exceeds the exercise price of the Option, the Purchaser
will, promptly following consummation of such transaction, pay to the
Stockholder an amount equal to the excess of the consideration paid in such
transaction per share of C.R. Gibson Common over the exercise price per share,
multiplied by the number of shares acquired upon exercise of the Option. The
provisions of this paragraph shall terminate at such time as Purchaser, Parent
or any affiliate of either of them owns 100% of the C.R. Gibson Common then
outstanding.
Notwithstanding the foregoing, if a transaction is proposed in
which any person or entity (other than Purchaser, Parent or an affiliate of
either of them) would become the beneficial owner of 50% or more of the
outstanding C.R. Gibson Common and if the exercise price per share under the
Option shall be the amount proposed to be paid in such transaction, any notice
given pursuant to this Section 1.2(b) shall be given to Stockholder not less
than five business days prior to the termination of Stockholder's rights to
participate in such transaction. In the event notice of exercise is given by
Purchaser in accordance with the preceding sentence, the obligation of
Purchaser to purchase the Shares described in such notice shall be subject to
the condition that the transaction in which the person or entity would become
the beneficial owner of 50% or more of the C.R. Gibson Common shall have been
consummated.
2. AGREEMENT TO TENDER SHARES. Stockholder agrees to accept the Offer,
to tender the Shares into the Offer and not to withdraw such Shares prior to
consummation of the Offer or withdrawal of the Offer by Purchaser, unless a
transaction is proposed in which any person or entity (other than Purchaser or
Parent) would become the beneficial owner of 50% or more of the outstanding
C.R. Gibson Common and Purchaser shall not have exercised the Option.
3. IRREVOCABLE PROXY. Stockholder hereby irrevocably appoints S. Joseph
Moore and Joe L. Powers, or either of them, as its attorney and proxy, with
full power of substitution, to vote or to express written consent or dissent in
such manner as such attorney and proxy or its substitute shall, in its sole
discretion, deem proper, and otherwise act (including pursuant to any corporate
action in writing without a meeting) with respect to all of the Shares which it
is entitled to vote at any meeting of stockholders (whether annual or special
and whether or not an adjourned meeting) of C.R. Gibson, or pursuant to written
action taken in lieu of any such meeting or otherwise; provided, however, that
Stockholder grants a proxy hereunder only with respect to the following matters
(the "Designated
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Matters"): (i) votes or consents with respect to the Merger; (ii) votes or
consents with respect to any action or agreement that would result in a breach
of any covenant, representation or warranty or any other obligation or
agreement of C.R. Gibson under the Merger Agreement; (iii) votes or consents
with respect to any action or agreement that would impede, interfere with,
delay, postpone or attempt to discourage the Offer or the Merger, including,
but not limited to, (a) any extraordinary corporate transaction (other than the
Offer and the Merger), such as a merger, other business combination,
reorganization or liquidation involving C.R. Gibson, (b) a sale or transfer of
a material amount of assets of C.R. Gibson or any of its subsidiaries, (c) any
change in the board of directors of C.R. Gibson, except as otherwise agreed to
in writing by Parent, or (d) any material change in the present capitalization
of C.R. Gibson; and (iv) votes or consents relating to any other material
change in the corporate structure or business of C.R. Gibson. This proxy is
irrevocable, is coupled with an interest sufficient in law to support an
irrevocable proxy and is granted in consideration of and as an inducement to
cause the Parent and Purchaser to enter into the transactions contemplated by
this Agreement and the Merger Agreement. This proxy shall revoke any other
proxy granted by Stockholder at any time with respect to the Shares and no
subsequent proxies will be given with respect thereto by Stockholder. In
addition, if subsequent to the date hereof Stockholder is entitled to vote the
Shares for any purpose, it shall take all actions necessary to vote the Shares
pursuant to instructions received from Purchaser; provided, however, that the
provisions of this sentence shall only apply to the Designated Matters. It is
expressly understood and acknowledged by the parties hereto that nothing
contained herein is intended to restrict the Stockholder (if the Stockholder is
also a director of C.R. Gibson) from voting on any matter, or otherwise from
acting, in the Stockholder's capacity as a director of C.R. Gibson with
respect to any matter, including but not limited to, the general management of
over-all operation of C.R. Gibson.
4. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder represents
and warrants to Parent and Purchaser as follows:
4.1. OWNERSHIP OF SHARES. On the date hereof, the Shares
are all of the shares of C.R. Gibson Common currently beneficially owned by the
Stockholder. (1) Stockholder does not have any rights to acquire any
additional shares of C.R. Gibson Common from C.R. Gibson, (2) Stockholder
currently has, and at the exercise of the Option and the sale of the Shares to
Purchaser in accordance with this Agreement will have, good, valid and
marketable title to the Shares, free and clear of all liens, encumbrances,
restrictions, options, warrants, rights to purchase and claims of every kind
(other than the encumbrances created by this Agreement and other than
restrictions on transfer under applicable Federal and State securities laws and
(3) the sale of Shares to Purchaser hereunder will transfer to Purchaser good,
valid and marketable title to said Shares included in such transaction, free of
all liens, encumbrances, restrictions and claims
5
5
of every kind other than restrictions on transfer under applicable Federal and
State securities laws.
4.2. POWER; BINDING AGREEMENT. Stockholder has the full
legal right, power and authority to enter into and perform all of Stockholder's
obligations under this Agreement. The execution and delivery of this Agreement
by Stockholder will not violate any other agreement to which Stockholder is a
party including, without limitation, any voting agreement, stockholders
agreement, voting trust or proxy. This Agreement has been duly executed and
delivered by Stockholder and constitutes a legal, valid and binding agreement
of Stockholder, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws, now or hereafter in effect affecting creditors'
rights and remedies generally or general principles of equity. Neither the
execution or delivery of this Agreement nor the consummation by Stockholder of
the transactions contemplated hereby will (i) require any consent or approval
of or filing by Stockholder with any governmental or other regulatory body
except for filings on Schedule 13D or Schedule 13G and a Form 4 under the
Exchange Act, or (ii) constitute a violation of, conflict with or constitute a
default under, any contract, commitment, agreement, understanding, arrangement
or other restriction of any kind to which Stockholder is a party or by which
Stockholder is bound.
4.3. FINDER'S FEE. No person is, or will be, entitled to
any commission or finder's fees from Stockholder in connection with this
Agreement or the transactions contemplated hereby.
5. REPRESENTATION AND WARRANTIES OF PARENT AND PURCHASER. Each of Parent
and Purchaser represents and warrants to Stockholder as follows:
5.1. POWERS; BINDING AGREEMENT. Each of Parent and
Purchaser has full legal right, power and authority to enter into and perform
all of its obligations under this Agreement. The execution and delivery of
this Agreement by Parent and Purchaser has been authorized by all necessary
corporate action on the part of Parent and Purchaser and will not violate any
other agreement to which Parent and Purchaser is a party. This Agreement has
been duly executed and delivered by each of Parent and Purchaser and
constitutes a legal, valid and binding agreement of Parent and Purchaser,
enforceable in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium and similar
laws, now or hereafter in effect affecting creditors' rights and remedies
generally or general principles of equity. Neither the execution or delivery
of this Agreement nor the consummation by Parent or Purchaser of the
transactions contemplated hereby will (i) require any consent or approval of or
filing by Parent or Purchaser with any governmental or other regulatory body
except for (x) the filings required under the HSR Act and (y) filings on
Schedule 13D under the Exchange Act, or (ii) constitute a violation of,
conflict with or constitute a default under,
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any contract, commitment, agreement, understanding, arrangement or other
restriction of any kind to which Parent or Purchaser is a party or by which
Parent or Purchaser is bound.
5.2. FINDER'S FEES. Other than the fee payable by Parent
as disclosed in the Merger Agreement, no person is, or will be, entitled to any
commission or finder's fees from Parent or Purchaser in connection with this
Agreement or the transactions contemplated hereby.
5.3. NO CONFLICT; REQUIRED FILINGS AND CONSENTS. The
purchase of Shares from the Stockholder pursuant to this Agreement is for the
account of the Purchaser for the purpose of investment and not with a view to
or for sale in connection with any distribution thereof within the meaning of
the Securities Act and the rules and regulations promulgated thereunder.
6. FURTHER ASSURANCES. From time to time, at the other party's request
and without further consideration, each party hereto shall execute and deliver
such additional documents and take all such further action as may be necessary
or desirable to consummate the transactions contemplated by this Agreement,
including, without limitation, to vest in Purchaser good title to any Shares
purchased hereunder.
7. CERTAIN COVENANTS OF THE STOCKHOLDER. Except in accordance with the
provisions of this Agreement, Stockholder agrees, while this Agreement is in
effect, not to, directly or indirectly:
(a) sell, transfer, pledge, encumber, assign or
otherwise dispose of or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares other than transfers to
family members, trusts for the benefit of the Stockholder or family members or
in connection with estate planning but only if the transferee of such Shares
agrees in writing to be bound by the provisions of this Agreement with respect
to such Shares;
(b) grant any proxies, deposit any Shares into a
voting trust or enter into a voting agreement with respect to any Shares; or
(c) except as otherwise permitted to C.R. Gibson
and the directors of C.R. Gibson pursuant to Section 6.3(a) of the Merger
Agreement and in circumstances where the Stockholder or its representative is
acting solely in his or her capacity as a director of C.R. Gibson, take any
action to encourage, solicit, initiate, or participate in any way in
discussions or negotiations with, or furnish any information to, or afford any
access to the properties, books or records of the Company or any of its
subsidiaries to, or otherwise assist, facilitate or encourage, any person or
entity (other than
7
7
Parent and Purchaser, or officers, directors, representatives, agents,
affiliates or associates) in connection with any possible or proposed merger,
consolidation, business combination, liquidation, reorganization, sale or other
disposition of assets, sale of shares of capital stock or similar transactions
involving the Company or any division of the Company.
8. CERTAIN COVENANTS OF PURCHASER AND PARENT.
8.1. OFFER AND MERGER. Parent and Purchaser agree to make
the Offer, and to follow such Offer with the Merger pursuant to the terms, and
subject to the conditions, contained in the Merger Agreement.
8.2. HSR ACT FILINGS. Parent and Purchaser agree to make
in a timely manner any filings required to be made by them under the HSR Act in
connection with the transactions contemplated by this Agreement and the Merger
Agreement.
9. TERMINATION. This Agreement shall terminate on the earliest of:
(a) the date on which Parent, Purchaser and
Stockholder mutually consent to terminate this Agreement in writing;
(b) following the successful consummation of the
Offer; and
(c) prior to the successful consummation of the
Offer, the termination of the Merger Agreement pursuant to its terms.
10. NOTICES. All notices or other communications required or permitted
hereunder shall be in writing (except as otherwise provided herein) and shall
be deemed duly given when received by delivery in person, by telecopy, telex or
telegram or by certified mail, postage prepaid, or by an overnight courier
service, addressed as follows:
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If to Purchaser or Parent: If to Stockholder:
Joe L. Powers ---------------------
Executive Vice President ---------------------
Thomas Nelson, Inc. ---------------------
501 Nelson Place
Nashville, TN 37214
Telephone: (615) 889-9000
Facsimile: (615) 883-6353
with a copy to: with a copy to:
James H. Cheek, III ---------------------
Bass, Berry & Sims ---------------------
2700 First American Center ---------------------
Nashville, TN 37238 ---------------------
11. ENTIRE AGREEMENT; AMENDMENT. This Agreement, together with the
documents expressly referred to herein, constitute the entire agreement among
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and understandings among the parties with
respect to such subject matter. This Agreement may not be modified, amended,
altered or supplemented except by an agreement in writing executed by the party
against whom such modification, amendment, alteration or supplement is sought
to be enforced.
12. ASSIGNS. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and assigns, but
neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto without the prior
written consent of the other parties, except that Purchaser may assign any or
all of its rights and obligations hereunder to Parent or any direct or indirect
wholly owned subsidiary of Parent without the consent of Stockholder, but no
such transfer shall relieve Purchaser of its obligations under this Agreement
if such subsidiary does not perform the obligations of Purchaser hereunder.
13. GOVERNING LAW. This Agreement, and all matters relating hereto, shall
be governed by, and construed in accordance with the laws of the State of
Delaware without giving effect to the principles of conflicts of laws thereof.
14. INJUNCTIVE RELIEF. The parties agree that in the event of a breach of
any provision of this Agreement, the aggrieved party may be without an adequate
remedy at law. The parties therefore agree that in the event of a breach of
any provision of this Agreement, the aggrieved party may elect to institute
and prosecute proceedings in any court of competent
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9
jurisdiction to enforce specific performance or to enjoin the continuing
breach of such provision, as well as to obtain damages for breach of
this Agreement and such aggrieved party may take any such actions without the
necessity of posting a bond. By seeking or obtaining such relief, the
aggrieved party will not be precluded from seeking or obtaining any other
relief to which it may be entitled.
15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
16. SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provisions of
this Agreement are so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
17. FURTHER ASSURANCES. Each party hereto shall execute and deliver such
additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
18. THIRD PARTY BENEFICIARIES. Nothing in this Agreement, expressed or
implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
THOMAS NELSON, INC.
By: /s/ Joe L. Powers
------------------------------------
Title: EVP & Secretary
---------------------------
NELSON ACQUISITION CORP.
By: /s/ S. Joseph Moore
------------------------------------
Title: President
---------------------------
OVERSEAS EQUITY INVESTOR PARTNERS
By: /s/ Robert J. Simon
------------------------------------
Title:
--------------------------
STOCKHOLDER
11
STOCK OPTION AGREEMENT
Stock Option Agreement dated as of September 13, 1995, by and
among Thomas Nelson, Inc., a Tennessee corporation ("Parent"), Nelson
Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of
Parent ("Purchaser"), and OVERSEAS EQUITY INVESTOR PARTNERS ("Stockholder").
See Document No. 171236.
EX-99.C11
23
STOCK OPTION AGREEMENT, BRADFORD VENTURE PARTNERS
1
EXHIBIT (c)(11)
STOCK OPTION AGREEMENT
Stock Option Agreement dated as of September 13, 1995, by and
among Thomas Nelson, Inc., a Tennessee corporation ("Parent"), Nelson
Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of
Parent ("Purchaser"), and BRADFORD VENTURE PARTNERS, L.P. ("Stockholder").
RECITALS
A. Concurrently herewith, Parent, Purchaser and The
C.R. Gibson Company, a Delaware corporation ("C.R. Gibson"), are entering
into a Tender Offer and Merger Agreement of even date herewith (the "Merger
Agreement"; capitalized terms used but not defined herein shall have the
meanings set forth in the Merger Agreement), which contemplates, among other
things, that Purchaser will commence a tender offer to purchase all outstanding
shares of C.R. Gibson Common at a price of $9.00 per share (the "Offer").
Subject to the terms and conditions of the Merger Agreement, the Offer will be
followed by a merger (the "Merger") of Purchaser with and into C.R. Gibson.
B. As of the date hereof, Stockholder owns 405,743
shares of the outstanding C.R. Gibson Common (the "Shares") and desires
to (i) grant to Purchaser the option to acquire all of such Shares at a per
share price equal to the greatest of (x) $9.00, (y) the price per share of C.R.
Gibson Common paid for C.R. Gibson purchased in the Offer or (z) the price paid
in any transaction in which any person or entity shall become the beneficial
owner of 50% or more of the outstanding shares of C.R. Gibson Common; (ii)
grant to Purchaser an irrevocable proxy covering the Shares; (iii) enter into
an agreement whereby the Stockholder agrees to tender and not withdraw the
Shares in the Offer; and (iv) agree not to dispose of the Shares or any
interest therein other than in accordance with this Agreement.
C. Parent and Purchaser will enter into the Merger
Agreement in part in reliance on Stockholder's representations,
warranties and agreements under this Agreement.
AGREEMENT
To implement the foregoing and in consideration of the mutual
agreements contained herein, the parties agree as follows:
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1. THE CONDITIONAL PURCHASE OPTION
1.1. GRANT OF OPTION. Stockholder hereby grants to
Purchaser an irrevocable option to purchase the Shares at a per share price
equal to the greatest of (i) $9.00, (ii) the price per share of C.R. Gibson
Common paid for C.R. Gibson Common purchased in the Offer or (iii) the price
paid in any transaction in which any person or entity shall become the
beneficial owner of 50% or more of the C.R. Gibson Common and on the terms and
subject to the conditions set forth herein (the "Option").
1.2. EXERCISE OF OPTION.
(a) The Option may be exercised by Purchaser
(or its designee, which designee must be Parent or a direct or indirect
wholly owned subsidiary of Parent), in whole or in part, at any time,
or from time to time, during the period beginning on the final business day
before the expiration date of the Offer and ending on the Expiration Date. As
used herein, the term "Expiration Date" means the first to occur of any of the
following dates:
(x) consummation of the Offer; or (y) the termination
of the Merger Agreement pursuant to its terms (unless
Purchaser has theretofore sent the written notice
specified in Section 1.2(b)).
(b) If Purchaser wishes to exercise the Option
(the "Option Purchase"), Purchaser shall send a written notice to Stockholder
of its intention to exercise the Option, specifying the number of Shares
to be purchased, whether Purchaser and/or a designee of Purchaser will
be purchasing the Shares and the place, and, if then known, time and date of
the closing of such purchase (the "Closing Date" or the "Closing"), which date
shall not be less than two business days nor more than ten business days from
the date on which such notice is delivered; provided, that the Closing shall be
held only if (i) such purchase would not otherwise violate or cause the
violation of, any applicable law or regulations (including, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the rules and regulations thereunder, or the rules of the New York Stock
Exchange or American Stock Exchange, (ii) no statute, rule, regulation, decree,
order or injunction shall have been promulgated, enacted, entered into or
enforced by any governmental agency or authority or court which prohibits
delivery of the Shares, whether temporary, preliminary or permanent (provided,
however, that the parties hereto shall use their reasonable efforts to have any
such order, decree or injunction vacated or reversed) and (iii) there has been
no material breach of the Merger Agreement by the Purchaser or Parent. In the
event the Closing is delayed as a result of clause (i) or (ii) above, the
Closing Date shall be within five business days following the cessation of such
violation,
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statute, rule, regulation, decree, order or injunction, as the case may be but
not later than the Expiration Date.
If within one year following an exercise of the Option, there
occurs a transaction in which any person or entity (other than Purchaser,
Parent or an affiliate of either of them) becomes the beneficial owner of 50%
or more of the C.R. Gibson Common and in which the consideration paid to
Purchaser or Parent exceeds the exercise price of the Option, the Purchaser
will, promptly following consummation of such transaction, pay to the
Stockholder an amount equal to the excess of the consideration paid in such
transaction per share of C.R. Gibson Common over the exercise price per share,
multiplied by the number of shares acquired upon exercise of the Option. The
provisions of this paragraph shall terminate at such time as Purchaser, Parent
or any affiliate of either of them owns 100% of the C.R. Gibson Common then
outstanding.
Notwithstanding the foregoing, if a transaction is proposed in
which any person or entity (other than Purchaser, Parent or an affiliate of
either of them) would become the beneficial owner of 50% or more of the
outstanding C.R. Gibson Common and if the exercise price per share under the
Option shall be the amount proposed to be paid in such transaction, any notice
given pursuant to this Section 1.2(b) shall be given to Stockholder not less
than five business days prior to the termination of Stockholder's rights to
participate in such transaction. In the event notice of exercise is given by
Purchaser in accordance with the preceding sentence, the obligation of
Purchaser to purchase the Shares described in such notice shall be subject to
the condition that the transaction in which the person or entity would become
the beneficial owner of 50% or more of the C.R. Gibson Common shall have been
consummated.
2. AGREEMENT TO TENDER SHARES. Stockholder agrees to accept the Offer,
to tender the Shares into the Offer and not to withdraw such Shares prior to
consummation of the Offer or withdrawal of the Offer by Purchaser, unless a
transaction is proposed in which any person or entity (other than Purchaser or
Parent) would become the beneficial owner of 50% or more of the outstanding
C.R. Gibson Common and Purchaser shall not have exercised the Option.
3. IRREVOCABLE PROXY. Stockholder hereby irrevocably appoints S. Joseph
Moore and Joe L. Powers, or either of them, as its attorney and proxy, with
full power of substitution, to vote or to express written consent or dissent in
such manner as such attorney and proxy or its substitute shall, in its sole
discretion, deem proper, and otherwise act (including pursuant to any corporate
action in writing without a meeting) with respect to all of the Shares which it
is entitled to vote at any meeting of stockholders (whether annual or special
and whether or not an adjourned meeting) of C.R. Gibson, or pursuant to written
action taken in lieu of any such meeting or otherwise; provided, however, that
Stockholder grants a proxy hereunder only with respect to the following matters
(the "Designated
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Matters"): (i) votes or consents with respect to the Merger; (ii) votes or
consents with respect to any action or agreement that would result in a breach
of any covenant, representation or warranty or any other obligation or
agreement of C.R. Gibson under the Merger Agreement; (iii) votes or consents
with respect to any action or agreement that would impede, interfere with,
delay, postpone or attempt to discourage the Offer or the Merger, including,
but not limited to, (a) any extraordinary corporate transaction (other than the
Offer and the Merger), such as a merger, other business combination,
reorganization or liquidation involving C.R. Gibson, (b) a sale or transfer of
a material amount of assets of C.R. Gibson or any of its subsidiaries, (c) any
change in the board of directors of C.R. Gibson, except as otherwise agreed to
in writing by Parent, or (d) any material change in the present capitalization
of C.R. Gibson; and (iv) votes or consents relating to any other material
change in the corporate structure or business of C.R. Gibson. This proxy is
irrevocable, is coupled with an interest sufficient in law to support an
irrevocable proxy and is granted in consideration of and as an inducement to
cause the Parent and Purchaser to enter into the transactions contemplated by
this Agreement and the Merger Agreement. This proxy shall revoke any other
proxy granted by Stockholder at any time with respect to the Shares and no
subsequent proxies will be given with respect thereto by Stockholder. In
addition, if subsequent to the date hereof Stockholder is entitled to vote the
Shares for any purpose, it shall take all actions necessary to vote the Shares
pursuant to instructions received from Purchaser; provided, however, that the
provisions of this sentence shall only apply to the Designated Matters. It is
expressly understood and acknowledged by the parties hereto that nothing
contained herein is intended to restrict the Stockholder (if the Stockholder is
also a director of C.R. Gibson) from voting on any matter, or otherwise from
acting, in the Stockholder's capacity as a director of C.R. Gibson with
respect to any matter, including but not limited to, the general management of
over-all operation of C.R. Gibson.
4. EXERCISE OF RIGHTS OF FIRST REFUSAL. The Stockholder hereby agrees
that if Robert G. Bowman or John G. Russell makes a written offer to sell any
shares of C.R. Gibson Common to the New Stockholders (as such term is defined
in the Stockholders Agreement dated as of November 29, 1988 (the "Stockholders
Agreement") between C.R. Gibson and the stockholders who are signatories
thereto) under Section 2(a) of the Stockholders Agreement and if any New
Stockholders exercise their rights to purchase shares under Section 2 of the
Stockholders Agreement, the Stockholder shall elect to accept such offer and
exercise the Stockholder's rights under such Section 2 to the fullest extent
permitted by the Stockholders Agreement, but in no event shall the Stockholder
accept such offer for less than all of its Allocation (as defined in the
Stockholders Agreement). Stockholder further agrees to pay for such shares
pursuant to the Stockholders Agreement and shall not agree to any amendment,
waiver or modification of the terms of the Stockholders Agreement (other than
pursuant to the terms of an Agreement dated the date hereof among Bradford
Venture Partners, L.P., Overseas Private Investor Partners, Robert G. Bowman
and John G. Russell) without Parent's prior written consent. Any shares of
C.R. Gibson
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Common acquired by the Stockholder pursuant to Section 2 of the Stockholders
Agreement shall thereafter for purposes of this Agreement be deemed to be
"Shares" subject to this Agreement.
5. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder represents
and warrants to Parent and Purchaser as follows:
5.1. OWNERSHIP OF SHARES. On the date hereof, the
Shares are all of the shares of C.R. Gibson Common currently beneficially
owned by the Stockholder. (1) Stockholder does not have any rights to acquire
any additional shares of C.R. Gibson Common from C.R. Gibson, (2) Stockholder
currently has, and at the exercise of the Option and the sale of the Shares to
Purchaser in accordance with this Agreement will have, good, valid and
marketable title to the Shares, free and clear of all liens, encumbrances,
restrictions, options, warrants, rights to purchase and claims of every kind
(other than the encumbrances created by this Agreement and other than
restrictions on transfer under applicable Federal and State securities laws,
(3) the sale of Shares to Purchaser hereunder will transfer to Purchaser good,
valid and marketable title to said Shares included in such transaction, free of
all liens, encumbrances, restrictions and claims of every kind other than
restrictions on transfer under applicable Federal and State securities laws,
and (4) to the Stockholder's knowledge the Stockholders Agreement has not been
modified or amended except by an Agreement dated the date hereof and remains in
full force and effect as so amended.
5.2. POWER; BINDING AGREEMENT. Stockholder has the
full legal right, power and authority to enter into and perform all of
Stockholder's obligations under this Agreement. The execution and delivery of
this Agreement by Stockholder will not violate any other agreement to which
Stockholder is a party including, without limitation, any voting agreement,
stockholders agreement, voting trust or proxy. This Agreement has been duly
executed and delivered by Stockholder and constitutes a legal, valid and
binding agreement of Stockholder, enforceable in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws, now or hereafter in effect
affecting creditors' rights and remedies generally or general principles of
equity. Neither the execution or delivery of this Agreement nor the
consummation by Stockholder of the transactions contemplated hereby will (i)
require any consent or approval of or filing by Stockholder with any
governmental or other regulatory body except for filings on Schedule 13D or
Schedule 13G and a Form 4 under the Exchange Act, or (ii) constitute a
violation of, conflict with or constitute a default under, any contract,
commitment, agreement, understanding, arrangement or other restriction of any
kind to which Stockholder is a party or by which Stockholder is bound.
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6
5.3. FINDER'S FEE. No person is, or will be, entitled
to any commission or finder's fees from Stockholder in connection with this
Agreement or the transactions contemplated hereby.
6. REPRESENTATION AND WARRANTIES OF PARENT AND PURCHASER. Each of Parent
and Purchaser represents and warrants to Stockholder as follows:
6.1. POWERS; BINDING AGREEMENT. Each of Parent and
Purchaser has full legal right, power and authority to enter into and
perform all of its obligations under this Agreement. The execution and
delivery of this Agreement by Parent and Purchaser has been authorized by all
necessary corporate action on the part of Parent and Purchaser and will not
violate any other agreement to which Parent and Purchaser is a party. This
Agreement has been duly executed and delivered by each of Parent and Purchaser
and constitutes a legal, valid and binding agreement of Parent and Purchaser,
enforceable in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium and similar
laws, now or hereafter in effect affecting creditors' rights and remedies
generally or general principles of equity. Neither the execution or delivery
of this Agreement nor the consummation by Parent or Purchaser of the
transactions contemplated hereby will (i) require any consent or approval of or
filing by Parent or Purchaser with any governmental or other regulatory body
except for (x) the filings required under the HSR Act and (y) filings on
Schedule 13D under the Exchange Act, or (ii) constitute a violation of,
conflict with or constitute a default under, any contract, commitment,
agreement, understanding, arrangement or other restriction of any kind to which
Parent or Purchaser is a party or by which Parent or Purchaser is bound.
6.2. FINDER'S FEES. Other than the fee payable by Parent
as disclosed in the Merger Agreement, no person is, or will be, entitled
to any commission or finder's fees from Parent or Purchaser in connection with
this Agreement or the transactions contemplated hereby.
6.3. NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
The purchase of Shares from the Stockholder pursuant to this Agreement is for
the account of the Purchaser for the purpose of investment and not with a view
to or for sale in connection with any distribution thereof within the meaning
of the Securities Act and the rules and regulations promulgated thereunder.
7. FURTHER ASSURANCES. From time to time, at the other party's request
and without further consideration, each party hereto shall execute and deliver
such additional documents and take all such further action as may be necessary
or desirable to consummate the transactions contemplated by this Agreement,
including, without limitation, to vest in Purchaser good title to any Shares
purchased hereunder.
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8. CERTAIN COVENANTS OF THE STOCKHOLDER. Except in accordance with the
provisions of this Agreement, Stockholder agrees, while this Agreement is in
effect, not to, directly or indirectly:
(a) sell, transfer, pledge, encumber, assign or
otherwise dispose of or enter into any contract, option or other arrangement
or understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of the Shares other than transfers
to family members, trusts for the benefit of the Stockholder or family
members or in connection with estate planning but only if the transferee
of such Shares agrees in writing to be bound by the provisions of this
Agreement with respect to such Shares;
(b) grant any proxies, deposit any Shares into a
voting trust or enter into a voting agreement with respect to any Shares;
or
(c) except as otherwise permitted to C.R. Gibson
and the directors of C.R. Gibson pursuant to Section 6.3(a) of the Merger
Agreement and in circumstances where the Stockholder or its representative
is acting solely in his or her capacity as a director of C.R. Gibson,
take any action to encourage, solicit, initiate, or participate in any
way in discussions or negotiations with, or furnish any information to, or
afford any access to the properties, books or records of the Company or any of
its subsidiaries to, or otherwise assist, facilitate or encourage, any person
or entity (other than Parent and Purchaser, or officers, directors,
representatives, agents, affiliates or associates) in connection with any
possible or proposed merger, consolidation, business combination, liquidation,
reorganization, sale or other disposition of assets, sale of shares of capital
stock or similar transactions involving the Company or any division of the
Company.
9. CERTAIN COVENANTS OF PURCHASER AND PARENT.
9.1. OFFER AND MERGER. Parent and Purchaser agree
to make the Offer, and to follow such Offer with the Merger pursuant to the
terms, and subject to the conditions, contained in the Merger Agreement.
9.2. HSR ACT FILINGS. Parent and Purchaser agree
to make in a timely manner any filings required to be made by them under the
HSR Act in connection with the transactions contemplated by this Agreement and
the Merger Agreement.
10. TERMINATION. This Agreement shall terminate on the earliest
of:
(a) the date on which Parent, Purchaser and
Stockholder mutually consent to terminate this Agreement in writing;
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(b) following the successful consummation of the
Offer; and
(c) prior to the successful consummation of the
Offer, the termination of the Merger Agreement pursuant to its terms.
11. NOTICES. All notices or other communications required or permitted
hereunder shall be in writing (except as otherwise provided herein) and shall
be deemed duly given when received by delivery in person, by telecopy, telex or
telegram or by certified mail, postage prepaid, or by an overnight courier
service, addressed as follows:
If to Purchaser or Parent: If to Stockholder:
Joe L. Powers
Executive Vice President --------------------------
Thomas Nelson, Inc. --------------------------
501 Nelson Place --------------------------
Nashville, TN 37214
Telephone: (615) 889-9000
Facsimile: (615) 883-6353
with a copy to: with a copy to:
James H. Cheek, III --------------------------
Bass, Berry & Sims --------------------------
2700 First American Center --------------------------
Nashville, TN 37238 --------------------------
12. ENTIRE AGREEMENT; AMENDMENT. This Agreement, together with the
documents expressly referred to herein, constitute the entire agreement among
the parties hereto with respect to the subject matter contained herein and
supersede all prior agreements and understandings among the parties with
respect to such subject matter. This Agreement may not be modified, amended,
altered or supplemented except by an agreement in writing executed by the party
against whom such modification, amendment, alteration or supplement is sought
to be enforced.
13. ASSIGNS. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and assigns, but
neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto without the prior
written consent of the other parties, except that Purchaser may assign any or
all of its rights and obligations hereunder to Parent or any direct or indirect
wholly owned subsidiary of Parent without the consent of Stockholder, but no
such
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transfer shall relieve Purchaser of its obligations under this Agreement if such
subsidiary does not perform the obligations of Purchaser hereunder.
14. GOVERNING LAW. This Agreement, and all matters relating hereto, shall
be governed by, and construed in accordance with the laws of the State of
Delaware without giving effect to the principles of conflicts of laws thereof.
15. INJUNCTIVE RELIEF. The parties agree that in the event of a breach of
any provision of this Agreement, the aggrieved party may be without an adequate
remedy at law. The parties therefore agree that in the event of a breach of
any provision of this Agreement, the aggrieved party may elect to institute and
prosecute proceedings in any court of competent jurisdiction to enforce
specific performance or to enjoin the continuing breach of such provision, as
well as to obtain damages for breach of this Agreement and such aggrieved party
may take any such actions without the necessity of posting a bond. By seeking
or obtaining such relief, the aggrieved party will not be precluded from
seeking or obtaining any other relief to which it may be entitled.
16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
17. SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provisions of
this Agreement are so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
18. FURTHER ASSURANCES. Each party hereto shall execute and deliver such
additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
19. THIRD PARTY BENEFICIARIES. Nothing in this Agreement, expressed or
implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the date first above written.
THOMAS NELSON, INC.
By: /s/ Joe L. Powers
--------------------------
Title: EVP & Secretary
--------------------
NELSON ACQUISITION CORP.
By: /s/ S. Joseph Moore
---------------------------
Title: President
---------------------
BRADFORD VENTURE PARTNERS, L.P.
By: /s/ Robert J. Simon
----------------------------
Title:
---------------------
STOCKHOLDER
EX-99.C12
24
ENGAGEMENT LETTER 1-18-94, PAINEWEBBER, INC.
1
EXHIBIT(c)(12)
[LOGO] THOMAS NELSON
Nelson Place at Elm Hill Pike, P.O. Box 141000 Nashville, Tenn., 37214-1000
January 18, 1994
Confidential
------------
PaineWebber Incorporated
1285 Avenue of the Americas
New York, NY 10019
Attention: George C. Stephenson
Gentlemen:
We are pleased to engage PaineWebber Incorporated ("PaineWebber") to act as a
financial advisor to Thomas Nelson, Inc. (the "Company") in connection with
the Company's proposed acquisition transaction with Santa Claus (a code name
known to both of us) (the "Acquisition Candidate"). This Agreement confirms
the terms of your engagement.
As used in this Agreement, the term "acquisition transaction" means, whether
effected in one transaction or a series of transactions: (a) any merger,
consolidation, reorganization or other business combination pursuant to which
the business of the Acquisition Candidate and its subsidiaries is combined with
that of the Company or a subsidiary of the Company or (b) the acquisition,
directly or indirectly, by the Company of more than 50% of the capital stock of
the Acquisition Candidate or assets of the Acquisition Candidate and its
subsidiaries, taken as a whole, by way of tender or exchange offer, negotiated
purchase or otherwise.
On the terms and subject to the conditions of this Agreement, PaineWebber will
assist the Company in analyzing, structuring, negotiating and effecting the
proposed acquisition transaction with the Acquisition Candidate.
If requested by the Company, PaineWebber will render such opinions as may be
required (the "Opinion") as to whether or not the consideration to be paid in a
proposed acquisition transaction with the Acquisition Candidate is fair, from a
financial point of view, to the Company and its shareholders.
For PaineWebber's financial advisory services, the Company will pay PaineWebber
a retention fee of $50,000, payable on the date of this Agreement. If, (a)
during this engagement, the Company executes a definitive agreement with the
Acquisition Candidate or (b) within six months thereafter if the Company
terminates the engagement hereunder, (i) the Company executes a definitive
agreement which subsequently results in an acquisition transaction, or (ii) an
acquisition transaction is consummated with the Acquisition Candidate, the
Company will pay PaineWebber a transaction fee of $750,000 payable in cash upon
the closing of such acquisition transaction against which PaineWebber's
retainer fee will be credited.
In addition to any fees payable to PaineWebber, the Company will reimburse
PaineWebber, upon request made from time to time, for all of its reasonable
out-of-pocket expenses incurred in connection with this engagement, including
the fees, disbursements and other charges of its legal counsel, provided that
PaineWebber gives advance notice to the Company for its approval of any
anticipated significant expenses.
It is further understood that the Opinion, if rendered, will be prepared solely
for the confidential use of the Board of Directors of the Company and will not
be reproduced, summarized, described or referred to or given to any other
person otherwise made public without PaineWebber's prior written consent which
will
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G. Stephenson
1/18/94
not be unreasonably withheld, provided that the Opinion and the various matters
considered and the analyses performed by PaineWebber in arriving at the Opinion
may be included in any proxy statement, registration statement or other
required filing made by the Company in connection with an acquisition
transaction subject to any such inclusion being in form and substance
reasonably acceptable to PaineWebber.
The Company will furnish PaineWebber (and, if negotiations proceed with the
Acquisition Candidate, will request that the Acquisition Candidate furnish
PaineWebber) with such information as PaineWebber reasonably believes
appropriate to its assignment (all such information so furnished being the
"Information"). The Company recognizes and confirms that PaineWebber (a) will
use and rely primarily on the Information and on information available from
generally recognized public sources in performing the services contemplated by
this Agreement and in rendering the Opinion without having independently
verified the same, (b) does not assume responsibility for the accuracy or
completeness of the Information and such other information and (c) will not
make an appraisal of any assets of the Acquisition Candidate or the Company.
To the best of the Company's knowledge, the information about the Company to be
furnished by the Company, when delivered, will be true and correct in all
material respects and will not contain any material misstatement of fact or omit
to state any material fact necessary to make the statements contained therein
not misleading. The Company will promptly notify PaineWebber if it learns of
any material inaccuracy or misstatement in, or material omission from, any
Information theretofore delivered to PaineWebber.
It is understood that PaineWebber is being engaged hereunder solely to provide
the services described above to the Company, and that PaineWebber is not acting
as an agent or fiduciary of, and shall have no duties or liability to, the
equity holders of the Company or any other third party in connection with its
engagement hereunder all of which are hereby expressly waived.
The Company agrees to the indemnification and other agreements set forth in the
Indemnification Agreement attached hereto, the provisions of which are
incorporated herein by reference and shall survive the termination, expiration
or supersession of this Agreement.
PaineWebber's engagement hereunder may be terminated by either the Company or
PaineWebber at any time upon written notice to that effect to the other party,
it being understood that the provisions relating to indemnification and
contribution will survive any such termination and those relating to the
payment of fees and expense will survive only if the Company shall terminate
PaineWebber's engagement.
This Agreement will be governed by, and construed in accordance with, the laws
of the State of New York applicable to agreements made and to be performed
entirely in such State.
Each of the Company and PaineWebber agree that any action or proceeding
based hereon, or arising out of PaineWebber's engagement hereunder, shall
be brought and maintained exclusively in the courts of the State of New
York located in the City and County of New York or in the United States
District Court for the Southern District of New York. The Company and
PaineWebber each hereby irrevocably submit to the jurisdiction of the
courts of the State of New York located in the City and County of New
York and of the United States District Court for the Southern District of
New York for the purpose of any such action or proceeding as set forth
above and irrevocably agree to be bound by any judgement rendered thereby
in connection with such action or proceeding. Each of the Company and
PaineWebber hereby irrevocably waive to the fullest extent permitted by
law, any objection which it may have or hereafter may have to the laying
of venue of any such action or proceeding brought in any such court
referred to above and any claim that any such action or proceeding has
been brought in an inconvenient forum.
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G. Stephenson
1/18/94
This Agreement may not be assigned by either party without the prior written
consent of the other party.
This Agreement (including the attached Indemnification Agreement) embodies the
entire agreement and understanding between the parties hereto and supersedes
all prior agreements and understandings relating to the subject matter hereof.
If any provision of this Agreement is determined to be invalid or unenforceable
in any respect, such determination will not affect such provision in any other
respect or any other provision of this Agreement, which will remain in full
force and effect. This Agreement may not be amended or otherwise modified or
waived except by an instrument in writing signed by both PaineWebber and the
Company.
Please confirm that the foregoing correctly sets forth our agreement by signing
and returning to PaineWebber the enclosed duplicate copy of this Agreement.
Very truly yours,
THOMAS NELSON, INC.
By: /s/ Joe L. Powers
----------------------
Vice President
Accepted and Agreed to as of the
date first written above:
PAINEWEBBER INCORPORATED
By: /s/ George C. Stephenson
------------------------
Managing Director
4
[LOGO] THOMAS NELSON
Nelson Place at Elm Hill Pike, P.O. Box 141000 Nashville, Tenn., 37214-1000
January 18, 1994
PaineWebber Incorporated
1285 Avenue of the Americas
New York, NY 10019
PAINEWEBBER INDEMNIFICATION AGREEMENT
Gentlemen:
In connection with the engagement of PaineWebber Incorporated ("PaineWebber")
to advise and assist the undersigned (referred to herein as "we", "our" or
"us") with the matters set forth in the Agreement dated January 18, 1993
between us and PaineWebber, we hereby agree to indemnify and hold harmless
PaineWebber, its affiliated companies, and each of PaineWebber's and such
affiliated companies' respective officers, directors, agents, employees and
controlling persons (within the meaning of each of Section 20 of the Securities
Exchange Act of 1934 and Section 15 of the Securities Act of 1933) (each of the
foregoing, including PaineWebber, being hereinafter referred to as an
"Indemnified Person") to the fullest extent permitted by law from and against
any and all losses, claims, damages, expenses (including reasonable fees,
disbursements and other charges of counsel), actions (including actions brought
by us or our equity holders or derivative actions brought by any person
claiming through us or in our name), proceedings or investigations (whether
formal or informal), or threats thereof (all of the foregoing being hereinafter
referred to as "Liabilities"), based upon, relating to or arising out of such
engagement or any Indemnified Person's role therein; provided, however, that we
shall not be liable under this paragragh: (a) for any amount paid in settlement
of claims without our written consent, unless our consent is unreasonably
withheld, or (b) to the extent that it is finally judicially determined that
such Liabilities resulted primarily from the bad faith or negligence of the
Indemnified Person seeking indemnification. In connection with our obligation
to indemnify for expenses as set forth above, we further agree to reimburse each
Indemnified Person for all such expenses (including reasonable fees,
disbursements and other charges of counsel) as they are incurred by such
Indemnified Person; provided, however, that if an Indemnified Person is
reimbursed hereunder for any expenses, the amount so paid shall be refunded if
and to the extent is finally judicially determined that the Liabilities in
question resulted primarily from the bad faith or negligence of such
Indemnified Person. We hereby also agree that neither PaineWebber nor any other
Indemnified Person shall have any liability to us (or anyone claiming through
us or in our name) in connection with PaineWebber's engagement by us except to
the extent that such Indemnified Person has engaged in negligent or bad faith
conduct.
Promptly after PaineWebber receives notice of the commencement of any action or
other proceeding in respect of which indemnification or reimbursement may be
sought hereunder, PaineWebber will notify us thereof; but the omission so to
notify us shall not relieve us from any obligation hereunder unless, and only
to the extent that, such omission results in our forfeiture of substantive
rights or defenses or such procedural rights or defenses as may adversely
affect our opportunity to successfully defend such action or proceeding. If
any such action or other proceeding shall be brought against any Indemnified
Person, we shall, upon written notice given reasonably promptly
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PaineWebber Indemnification Agr.
1/18/94
following your notice to us of such action or proceeding, be entitled to
assume the defense thereof at our expense with counsel chosen by us; provided,
however, that any Indemnified Person may at its own expense retain separate
counsel to participate in such defense.
Notwithstanding the foregoing, such Indemnified Person shall have the right to
employ separate counsel at our expense and to control its own defense of such
action or proceeding if, in the reasonable opinion of counsel to such
Indemnified Person, (i) there are or may be legal defenses available to such
Indemnified Person or to other Indemnified Persons that are different from or
additional to those available to us, or (ii) a difference of position or
potential difference of position exists between us and such Indemnified Person
that would make such separate representation advisable; provided, however, that
in no event shall we be required to pay fees and expenses under this Indemnity
for more than one firm of attorneys (in addition to local counsel) in any
jurisdiction in any one legal action or group of related legal actions. We
agree that we will not, without the prior written consent of PaineWebber,
settle or compromise or consent to the entry of any judgement in any pending or
threatened claim, action or proceeding relating to the matters contemplated by
PaineWebber's engagement (whether or not any Indemnified Person is a party
thereto) unless such settlement, compromise or consent includes an
unconditional release of PaineWebber and each other Indemnified Person from all
liability arising or that may arise out of such claim, action or proceeding.
In the indemnification of an Indemnified Person provided for hereunder is
finally judicially determined by a court of competent jurisdiction to be
unenforceable, then we agree, in lieu of indemnifying such Indemnified Person,
to contribute to the amount paid or payable by such Indemnified Person as a
result of such Liabilities in such proportion as is appropriate to reflect the
relative benefits received, or sought to be received, by us on the one hand and
by PaineWebber on the other from the transactions in connection with which
PaineWebber has been engaged. If the allocation provided in the preceding
sentence is not permitted by applicable law, then we agree to contribute to the
amount paid or payable by such Indemnified Person as a result of such
Liabilities in such proportion as is appropriate to reflect not only the
relative benefits referred to in such preceding sentence but also the relative
fault of us and of such Indemnified Person. Nothwithstanding the foregoing, in
no event shall the aggregate amount required to be contributed by all
Indemnified Persons taking into account our contributions as described above
exceed the amount of fees actually received by PaineWebber pursuant to such
engagement. The relative benefits received or sought to be received by us on
the one hand and by PaineWebber on the other shall be deemed to be in the same
proportion as (a) the total value of the transactions with respect to which
PaineWebber has been engaged bears to (b) the fees paid or payable to
PaineWebber with respect to such engagement.
The rights accorded to Indemnified Persons hereunder shall be in addition to
any rights that any Indemnified Person may have at common law, by separate
agreement or otherwise.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE. WE HEREBY CONSENT, SOLELY FOR THE PURPOSE OF
ALLOWING AN INDEMNIFIED PERSON TO ENFORCE ITS RIGHTS HEREUNDER, TO PERSONAL
JURISDICTION AND SERVICE AND VENUE IN ANY COURT IN WHICH ANY CLAIM FOR WHICH
INDEMNIFICATION MAY BE SOUGHT HEREUNDER IS BROUGHT AGAINST PAINEWEBBER OR ANY
OTHER INDEMNIFIED PERSON. This Agreement may not be amended or otherwise
modified except by an instrument signed by both PaineWebber and us. If any
provision hereof shall be determined to be invalid or unenforceable in any
respect, such determination shall not affect such provision in any other
respect or any other provision of this Agreement, which shall remain in full
force and effect. If there is more than one indemnitor hereunder, each
indemnifying person agrees that its liabilities hereunder shall be joint and
several. Each Indemnified Person is an intended beneficiary hereunder.
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PaineWebber Indemnification Agr.
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The foregoing Indemnification Agreement shall remain in effect indefinitely,
notwithstanding any termination of PaineWebber's engagement.
Very truly yours,
THOMAS NELSON, INC.
By: /s/ Joe L. Powers
-----------------
Name: Joe L. Powers
Title: Vice President
Acknowledged and Agreed to:
PAINEWEBBER INCORPORATED
By: /s/ George C. Stephenson
------------------------
Name: George C. Stephenson
Title: Managing Director
EX-99.C13
25
DEALER MANAGER AGREEMENT 9-15-95
1
EXHIBIT (C)(13)
Dealer-Manager Agreement
September 18, 1995
PaineWebber Incorporated
1285 Avenue of the Americas
New York, NY 10019
Gentlemen:
Nelson Acquisition Corp., a Delaware corporation (the "Purchaser"), and
a wholly-owned subsidiary of Thomas Nelson, Inc., a Tennessee corporation (the
"Parent"), proposes to make an offer to purchase (together with any extensions
or amendments thereof or supplements thereto, the "Tender Offer") all of the
common stock, par value $0.10 per share (the "Securities"), of The C.R. Gibson
Company, a Delaware corporation (the "Subject Company"). The making of the
Tender Offer, the purchase of Securities pursuant thereto, and all related
incidental acts and transactions are hereinafter referred to collectively as
the "Tender Offer Transactions." The following sets forth the agreement (the
"Agreement") between the Purchaser and the Parent and PaineWebber Incorporated
("PaineWebber"):
1. Appointment as Dealer Manager. The Purchaser and the Parent
hereby appoint PaineWebber on an exclusive basis to act as financial advisor
with respect to the Tender Offer Transactions and as sole dealer manager for
the Tender Offer, and hereby authorize PaineWebber to act as such in connection
therewith. PaineWebber agrees to perform those services as dealer manager with
respect to the Tender Offer as are customarily performed by PaineWebber in
connection with tender offers of a like nature (which services are comparable
to those generally performed in the industry), including (but not limited to)
using its best efforts to solicit tenders of Securities pursuant to the Tender
Offer and in communicating with other brokers, dealers, commercial banks, trust
companies and nominees (collectively, "Dealers"). In soliciting or obtaining
tenders, (i) PaineWebber, as dealer manager, shall not be deemed to be acting
as the agent of the Purchaser or the Parent other than pursuant to this
Agreement or as the agent of any Dealer and (ii) no Dealer shall be deemed to
be acting as the agent of PaineWebber. It is understood that PaineWebber is
being engaged hereunder solely to provide the services described above on
behalf of the Purchaser and the Parent, and that PaineWebber is not acting as
an agent or fiduciary of, and shall have no duties or liability to, the
equityholders of the Purchaser or the Parent or any other third party in
connection with its engagement hereunder, all of which are hereby expressly
waived.
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2. Tender Offer Materials. As soon as practicable following the
commencement of the Tender Offer, but in no event later than required by
applicable law, the Purchaser will file with the Securities and Exchange
Commission (the "Commission") a statement on Schedule 14D-1 with respect to the
Tender Offer and will promptly file as required any and all necessary
amendments and supplements to such statement on Schedule 14D-1. Such
statement, as amended from time to time, and the several exhibits thereto, are
hereinafter referred to as the "Schedule." The Schedule, the Offer to Purchase
and Letter of Transmittal contained therein, and all other statements and
documents filed or to be filed with any federal, state or local regulatory
authority and all other documents (including advertisements and other
communications) that the Purchaser or the Parent authorizes for use in
connection with the solicitation of tenders for the Securities, in each case as
amended or supplemented from time to time, are hereinafter referred to as the
"Tender Offer Documents." The Purchaser and the Parent agree to furnish
PaineWebber, at their expense, with as many copies as PaineWebber may request
of the Offer to Purchase, the Letter of Transmittal, and any other Tender Offer
Document that PaineWebber may reasonably request. The Purchaser and the Parent
represent to PaineWebber that the Tender Offer Documents are, and at all times
during the Tender Offer (as from time to time amended or supplemented) will be,
in compliance as to form in all material respects with all applicable rules and
regulations, including, without limitation, the Securities Exchange Act of
1934, as amended (the "Exchange Act") and, the rules and regulations
thereunder, and that none of the Tender Offer Documents contains or will
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
that no representation is made with respect to any statements contained in the
Tender Offer Documents in reliance upon and in conformity with information
furnished in writing by PaineWebber expressly for use therein.
The Purchaser and the Parent agree that, a reasonable time prior to
using any material in connection with the Tender Offer or filing any such
material with the Commission or any other federal or state agency, commission
or instrumentality (collectively, "Other Agencies"), the Purchaser will submit
copies of such material to PaineWebber and will consult with PaineWebber and
give reasonable consideration to its comments, if any, with respect thereto.
In the event that (i) the Purchaser or the Parent uses or permits the use of
any material in connection with the Tender Offer or files any such material
with the Commission or Other Agencies (a) that has not been submitted to
PaineWebber for its comments or (b) that has been so submitted and with respect
to which PaineWebber made material comments to the Purchaser or the Parent but
which comments have not been reflected to PaineWebber's reasonable
satisfaction, or (ii) either the Purchaser or the Parent shall have breached,
in any material respect, any of its representations, warranties, agreements or
covenants herein, then PaineWebber shall be entitled to withdraw as dealer
manager in connection with the Tender Offer without any liability or penalty or
loss of rights on the part of PaineWebber or any other person or entity defined
in paragraph 6 hereof as an "Indemnified Person," and PaineWebber shall remain
entitled to receive the payment of all fees and expenses payable under this
Agreement that have accrued to the date of any such withdrawal.
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3. Compensation. In addition to the compensation to be paid by
the Parent pursuant to a letter agreement dated January 18, 1994 between
PaineWebber and the Parent, the Parent shall pay PaineWebber upon the signing
of this Agreement a fee of $50,000 in connection with its services under this
Agreement.
4. Expenses; Reimbursement Thereof. The Purchaser and/or the
Parent will pay or cause to be paid (i) all fees and expenses relating to the
preparation, printing, filing, mailing and publishing of all documents
pertaining to the Tender Offer; (ii) all fees and expenses of any depositary,
information agent or other agents, attorneys and other persons retained by the
Purchaser in connection with the Tender Offer; (iii) all fees, if any, payable
to Dealers (including PaineWebber) as reimbursement for their customary mailing
and handling expenses in forwarding materials related to the Tender Offer to
their customers; (iv) all advertising charges; and (v) all other fees and
expenses incurred in connection with or relating to the Tender Offer. In
addition, the Purchaser and the Parent, jointly and severally, agree to
reimburse PaineWebber and its affiliates, promptly upon request, for all
reasonable out-of-pocket expenses, including (without limiting the foregoing)
the fees, costs and expenses of PaineWebber's legal counsel, incurred in
connection with the Tender Offer Transactions.
5. Limitation on Liability. Neither PaineWebber nor any
affiliate thereof shall have any liability to the Purchaser or the Parent or
any affiliate thereof for any losses, claims, damages, liabilities or expenses
arising from any act or omission on the part of any Dealer, or from
PaineWebber's acts or omissions in performing its obligations hereunder or
otherwise in connection with the Tender Offer Transactions, except to the
extent that such losses, claims, damages, liabilities or expenses are finally
judicially determined by a court of competent jurisdiction to have resulted
primarily from PaineWebber's bad faith, willful misconduct or gross negligence.
6. Indemnification and Contribution. The Purchaser and the
Parent, jointly and severally, hereby agree (i) to indemnify and hold harmless
PaineWebber, its affiliated companies, and each of PaineWebber's and such
affiliated companies' respective officers, directors, agents, employees and
controlling persons (within the meaning of Section 20 of the Exchange Act and
Section 15 of the Securities Act of 1933, as amended) (each of the foregoing,
including PaineWebber, being hereafter sometimes called an "Indemnified
Person"), to the fullest extent permitted by law from and against any and all
losses, claims, damages, expenses (including reasonable fees, disbursements and
other charges of counsel), actions (including actions brought by the Parent,
the Purchaser or their respective equityholders or derivative actions brought
by any person claiming through the Parent, the Purchaser or in either of their
names), proceedings or investigations (whether formal or informal), or threats
thereof (all of the foregoing being hereinafter referred to as "Liabilities"),
based on or arising out of (1) any untrue statement or alleged untrue statement
of any material fact in any Tender Offer Document, (2) any omission or alleged
omission of any material fact required to be stated in any Tender Offer
Document or necessary to make the statements made in any Tender Offer Document,
in light of the circumstances under which they were made, not misleading, (3)
any withdrawal, termination or cancellation of any one or more of the Tender
Offer Transactions for any reason whatsoever,
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(4) any tender, purchase or other acquisition by the Purchaser or the Parent or
any affiliate thereof of Securities (including, without limiting the foregoing,
any purchase prior to any date hereof as to which PaineWebber acted an broker
or dealer), (5) any violation by or conflict of the Tender Offer or any of the
Tender Offer Transactions of or with any law, rule, regulation, order, award,
judgment, determination, writ, injunction or decree of any United States
federal, state, local or foreign court or governmental authority, (6) any
breach by the Purchaser or the Parent of any representation or warranty or any
failure to comply with any of the agreements contained herein or any agreements
relating to the Tender Offer or the Tender Offer Transactions or (7) otherwise
arising out of, relating to or in connection with the Tender Offer, the Tender
Offer Transactions or PaineWebber's engagement hereunder, and (ii) in
connection with the foregoing obligations, to reimburse each Indemnified Person
for all reasonable expenses (including fees, disbursements and other charges of
counsel) as they are incurred by such Indemnified Person in connection with
investigating, preparing to defend or defending any such action (including
actions brought by us or our equityholders or derivative actions brought by any
person claiming through us or in our name), proceeding, investigation or
inquiry, or threat thereof, whether or not any such action, proceeding,
investigation or inquiry is actually or formally commenced or any such
Indemnified Person is a party thereto or subject thereof. Notwithstanding the
foregoing, the Purchaser and the Parent shall not be obligated to indemnify any
such Indemnified Person under this Section 6 with respect to any Liability, and
amounts paid in reimbursement of expenses under this Section 6 shall be
refunded, to the extent, but only to the extent, that it is finally judicially
determined (a) that such Liability resulted primarily from an untrue statement
of any material fact in any Tender Offer Document or any omission to state any
material fact required to be stated in any Tender Offer Document, or necessary
to make the statements made therein, in light of the circumstances under which
they were made, not misleading, if, in any such case, such statement or
omission was made in such Tender Offer Document in reliance upon and in
conformity with written information prepared by PaineWebber and furnished to
the Purchaser or the Parent in writing by PaineWebber or (b) in the case of
Liabilities against which Indemnified Persons are indemnified solely under
clause (i) (7) of the preceding sentence, that such Liability resulted
primarily from the bad faith, willful misconduct or gross negligence of such
Indemnified Person.
If any litigation, proceeding or investigation is instituted or
threatened against any Indemnified Person in respect of which indemnity may be
sought against the Purchaser or the Parent pursuant to this Section 6, such
Indemnified Person shall promptly notify the Purchaser or the Parent thereof,
but the omission so to notify the Purchaser or the Parent shall not relieve the
Purchaser or the Parent from any obligation or liability under this Section 6,
unless, and only to the extent that, such omission so to notify results in the
loss of substantive rights or defenses. If any such litigation or proceeding
shall be brought against any Indemnified Person, the Purchaser and/or the
Parent shall be entitled to participate in such litigation or proceeding, and,
after written notice from the Purchaser or the Parent to such Indemnified
Person, to assume the defense of such litigation or proceeding with counsel of
the Purchaser's or the Parent's choice at its expense; provided, however, that
such counsel shall be reasonably satisfactory to the Indemnified Person.
Notwithstanding the election of the Purchaser or the Parent to assume the
defense of such litigation or proceeding, such Indemnified Person shall have
the right to employ
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separate counsel and to control its own defense of such litigation or
proceeding, and the Purchaser and the Parent, jointly and severally, shall bear
the fees and disbursements of such separate counsel, if, in the reasonable
opinion of counsel to such Indemnified Person, (i) there may be legal defenses
available to such Indemnified Person or to other Indemnified Persons that are
different from or additional to those available to the Purchaser or the Parent
or (ii) a conflict or potential conflict otherwise exists between such
Indemnified Person and the Purchaser or the Parent that would make such
separate representation advisable; provided, however, that the Purchaser and
the Parent shall not under any circumstances be liable hereunder for the
expenses of more than one firm of attorneys in any jurisdiction in any one
legal action or group of related legal actions. The Purchaser and the Parent
agree that they will not, without the prior written consent of PaineWebber
(which consent shall not be unreasonably withheld), settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action
or proceeding relating to the Tender Offer Transactions or PaineWebber's
engagement hereunder (whether or not any Indemnified Person is a party thereto)
unless such settlement, compromise or consent includes an unconditional release
of PaineWebber and each other Indemnified Person from all liability arising or
that may arise out of such claim, action or proceeding.
If the indemnification provided for in this Section 6 is held by a
court of competent jurisdiction to be unavailable to any Indemnified Person in
respect of any Liabilities referred to herein (other than as a consequence of a
final judicial determination as set forth in the second sentence of the first
paragraph of this Section 6, then the Purchaser and the Parent, in lieu of
indemnifying such Indemnified Person, shall, jointly and severally, contribute
to the amount paid or payable by such Indemnified Person as a result of such
Liabilities in such proportion as is appropriate to reflect the relative
benefits received by the Purchaser and the Parent on the one hand and by such
Indemnified Person on the other from the Tender Offer Transactions. If the
allocation provided in the preceding sentence is not permitted by applicable
law, or as a consequence of a final judicial determination as set forth in the
second sentence of the first paragraph of this Section 6, then the Purchaser
and the Parent agree to contribute to the amount paid or payable by such
Indemnified Person as a result of such Liabilities in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
preceding sentence, but also the relative fault of the Purchaser and the Parent
on the one hand and of such Indemnified Person on the other in connection with
the statements or omissions or other actions relating to or in connection with
the Tender Offer Transactions or PaineWebber's engagement hereunder that
resulted in such Liabilities. Notwithstanding the foregoing, in no event shall
the aggregate amount contributed by the Indemnified Persons taking into account
the contribution of Purchaser and the Parent as described above exceed the
amount actually paid to PaineWebber by the Purchaser and the Parent pursuant to
this Agreement in connection with the Tender Offer Transactions. The relative
benefits received by the Purchaser and the Parent on the one hand and
PaineWebber on the other shall be deemed to be in the same proportion as (i)
the aggregate purchase price paid or proposed to be paid for the maximum number
of Securities offered to be purchased pursuant to the Tender Offer bears to
(ii) the fees paid to PaineWebber pursuant to this Agreement. The relative
fault of the Purchaser and the Parent on the one hand and of PaineWebber on the
other shall be determined by reference to, among other things, whether any
untrue or alleged untrue statement of, or any omission or alleged omission to
state a material fact
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relates to information supplied by the Purchaser or the Parent or by
PaineWebber and by reference to the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The foregoing indemnification and contribution agreement shall be in
addition to any rights that any Indemnified Person may have at common lav, by
separate agreement or otherwise.
7. Representations, Warranties and Covenants. The Purchaser
and the Parent, jointly and severally, represent and warrant to, and covenant
with, PaineWebber that:
(i) each of the Purchaser and the Parent is a corporation duly
organized and validly existing in good standing under the laws of its state of
incorporation, and each of the Purchaser and the Parent has all necessary
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the Tender Offer Transactions;
(ii) each of the Purchaser and the Parent have taken all necessary
corporate action to authorize the Tender Offer Transactions, and no other
corporate proceedings by the Purchaser or the Parent are necessary to authorize
any such transactions;
(iii) this Agreement has been duly authorized, executed and delivered
by, and is a legal, valid and binding agreement of, each of the Purchaser and
the Parent and is enforceable against the Purchaser and the Parent in
accordance with its terms;
(iv) the Tender Offer Transactions comply and will comply in all
material respects with all applicable requirements of law, including without
limitation all federal securities laws, the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), the corporate laws of the
state in which the Subject Company in incorporated and any applicable state
takeover or "blue sky" laws;
(v) neither the Purchaser, the Parent nor any of their affiliates has
any knowledge of any material fact or information concerning the Subject
Company that is required to be disclosed to the public as a condition to the
purchase of Securities and that has not been, or is not being, or will not be,
disclosed to the public through the Tender Offer Documents or otherwise;
(vi) except as may be required by law and except with respect to
advice or opinions previously made public by PaineWebber, neither the
Purchaser, the Parent nor any affiliate thereof shall publicly disclose or
refer to any opinion or advice rendered by PaineWebber to the Purchaser or the
Parent without PaineWebber's prior written consent; and
(vii) except as would not have a material adverse effect on the
ability of the Purchaser or the Parent to perform its obligations hereunder and
to consummate the Tender Offer Transactions and the other transactions
contemplated herein, the Tender Offer Transactions and the execution and
delivery of, and the consummation of the transactions contemplated in, this
Agreement do not and will not (i) conflict with or violate the certificate of
incorporation or by-
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law of the Purchaser or the Parent, (ii) conflict with or violate any order,
judgment or decree applicable to the Purchaser or the Parent or by which any
property or asset of the Purchaser or the Parent is bound, or (iii) result in a
breach of or constitute a default (or any event which with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or other encumbrance on any property or asset of the
Purchaser or the Parent pursuant to, any loan or credit agreement, indenture,
mortgage, note or other agreement or instrument to which the Purchaser or the
Parent or any of their subsidiaries or affiliates is a party or by which any of
them or any of their respective properties or assets is bound.
8. Certain Events. The Purchaser will advise PaineWebber as
promptly as is practicable of (i) the occurrence of any event which might
reasonably cause the Purchaser to withdraw, rescind or terminate the Tender
Offer, or which might reasonably permit the Purchaser to exercise any right not
to purchase Securities tendered pursuant to the Tender Offer or to consummate
the transactions contemplated in the Tender Offer Documents, (ii) any material
information relating to the Tender Offer, including, without limitation, any
proposal or requirement to make, amend or supplement any filing required by the
Exchange Act, (iii) the issuance of any comment or order or the taking of any
other action by the Commission or any Other Agency concerning the Tender Offer,
(iv) any request for additional information or other action by the Federal
Trade Commission or the Antitrust Division of the Department of Justice under
the HSR Act, or the rules promulgated thereunder, and (v) any other information
relating to the Tender Offer or the transactions contemplated in the Tender
Offer Documents which PaineWebber may from time to time reasonably request.
9. Securityholder Information. The Purchaser and the Parent will
cause PaineWebber to be provided, to the extent the same is available to the
Purchaser and the Parent, with any cards or lists showing the names and
addresses of, and the number of Securities held by, the holders of Securities
as of a recent date and will endeavor to cause PaineWebber to be advised from
day to day (or from time to time as may be reasonable in the circumstances)
during the period of the Tender Offer as to any transfers of record of the
Securities known to the Purchaser and the Parent.
The Purchaser and the Parent have appointed, and authorize PaineWebber
to communicate with, Trust Company Bank to serve as Depositary and D.F. King &
Co., Inc. to serve as Information Agent in connection with the Tender Offer
and have instructed the Depositary to advise you daily as to such matters as
you may reasonably request.
10. Miscellaneous. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely in such state.
The agreements contained in Sections 3, 5 and 6 and the
representations and warranties contained in Sections 2 and 7 shall remain
operative and in full force regardless of (i) any failure to commence, or the
withdrawal, termination or consummation of, the Tender Offer, (ii) any
investigation made by or on behalf of any Indemnified Person, (iii) any
withdrawal by PaineWebber
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as dealer manager for the Tender Offer pursuant to Section 2 or otherwise or
(iv) any termination of this Agreement.
Simultaneously with the execution and delivery of this Agreement, the
Purchaser and the Parent shall deliver to you the opinion of Bass, Berry &
Sims, counsel for the Purchaser and the Parent, in the form attached hereto as
Exhibit A.
This Agreement shall be binding upon the parties hereto, and the
respective successors and permitted assigns of each, and shall inure to the
benefit of the parties hereto and the other Indemnified Persons, and the
respective successors and permitted assigns of the foregoing.
If any provision of this Agreement shall be determined to be invalid
or unenforceable in any respect, such determination shall not affect such
provision in any other respect or any other provision of this Agreement, which
shall remain in full force and effect. This Agreement may not be amended or
otherwise modified or waived except by an instrument in writing signed by each
party hereto.
All notices and other communications required or permitted to be given
under this Agreement shall be in writing and shall be deemed to have been duly
given if delivered in person, by cable, telecopy, telegram or telex or by
registered or certified mail (postage prepaid, return receipt requested) to the
parties hereto as follows (or, as to each party, at such other address as shall
be designated by such party in a written notice complying as to delivery with
the terms of this paragraph):
(a) If to PaineWebber:
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Telecopy No.: (212) 713-1053
Attention: George C. Stephenson
(b) If to the Parent or Purchaser:
Thomas Nelson, Inc.
Nelson Place at Elm Hill Pike
Nashville, Tennessee 37214
Attention: Joe L. Powers
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PAINEWEBBER INCORPORATED
By: /s/ Jeffrey A. Raich
---------------------------
Name: Jeffrey A. Raich
Title: Vice President
THOMAS NELSON, INC.
By: /s/ Joe L. Powers
---------------------------
Name: Joe L. Powers
Title: Executive Vice President
and Secretary
NELSON ACQUISITION CORP.
By: /s/ Joe L. Powers
---------------------------
Name: Joe L. Powers
Title: Secretary
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Exhibit A
It is our opinion that:
(1) Thomas Nelson, Inc. (the "Parent") is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Tennessee and has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being conducted,
except where the failure to be so existing or to have such power or authority
would not, in the aggregate, have a material adverse effect on the business of
the Parent and its subsidiaries, taken as a whole;
(2) Nelson Acquisition Corp. (the "Purchaser") is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted, except where the failure to be so existing and in good standing or
to have such power or authority would not, in the aggregate, have a material
adverse effect on the business of the Purchaser. All of the outstanding
capital stock of the Purchaser is owned, directly or indirectly, by the Parent;
(3) the Dealer Manager Agreement has been duly authorized by each
of the Purchaser and the Parent and is a legal, valid and binding agreement of
each of them, except that (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought;
(4) all legally required proceedings in connection with the making
and
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consummation of the Tender Offer and financing thereof, in accordance with the
terms of the Offer to Purchase, have been taken, and all orders, consents or
other authorizations or approvals of any public board or body legally required
for such purchase or of any transaction involving the Purchaser or the Parent
thereunder have been obtained, except as set forth in the Offer to Purchase;
(5) to the best of our knowledge, there is no restraining or other
order in effect and there is no legal or governmental proceeding pending or
threatened to which the Purchaser or the Parent is, or is threatened to be, a
party or of which the business or property of the Purchaser or the Parent is,
or is threatened to be, the subject, that is related to the Tender Offer,
except as set forth in the Offer to Purchase;
(6) except as set forth in the Offer to Purchase, neither the
Purchaser nor the Parent is in violation of its Certificate of Incorporation or
Bylaws, nor to the best of our knowledge is the Purchaser or the Parent in
default in the performance of any obligation, agreement or condition contained
in any license, franchise, permit, mortgage, bond, debenture, note, indenture,
other evidence of indebtedness or other agreement known to us, where such
default could have a material adverse effect on the ability of the Purchaser or
the Parent to consummate the Tender Offer or the transactions contemplated by
the Dealer Manager Agreement, and the execution and delivery of the Dealer
Manager Agreement and the making and consummation of the Tender Offer and the
fulfillment of the terms thereof will not conflict with, or constitute a breach
of or default under, the Certificate of Incorporation or Bylaws of the
Purchaser or the Parent or any agreement, indenture or other instrument known
to us to which the Purchaser or the Parent is a party or by which either of
them or their respective property is bound
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or any law, rule, regulation, order, written injunction or court or
governmental decree known to us which is applicable to the Purchaser or the
Parent; and
(7) Except as to (i) financial statements, schedules and other
financial and statistical data and (ii) information relating to the business or
description of the Subject Company included therein, as to which we do not
express any opinion, (A) we are of the opinion that any application made by the
Purchaser and the Parent under the HSR Act and the regulations thereunder (the
"HSR Application"), the Offer to Purchase, the Schedule, any filing made with
the New York Stock Exchange or American Stock Exchange and any applications
made by the Purchaser or the Parent under takeover statutes, securities laws
and Blue Sky laws of various states, in connection with the Tender Offer (the
"Other Applications"), if any, do or will, as filed, comply as to form in all
material respects with applicable legal requirements, including, but not
limited to, the Securities Act of 1933, as amended, the Exchange Act and the
rules and regulations promulgated thereunder and, in the case of the Offer to
Purchase and the Schedule, include the documents required to be filed as
exhibits with the Commission, and (B) nothing has come to our attention that
causes us to believe that the HSR Application, the Offer to Purchase, the
Schedule, or the Other Applications, if any, contains or will contain any
untrue statements of material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.
Very truly yours,
Bass, Berry & Sims
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