EX-99.(K)(7) NEW TRIANGLE AGREEMENT AND PLAN OF MERGER
Published on November 3, 2006
Exhibit
(k) (7)
AGREEMENT AND PLAN OF MERGER
This
Agreement and Plan of Merger (this Agreement),
dated as of November 2, 2006,
is by and among Triangle Capital Corporation, a Maryland corporation (Parent), New
Triangle GP, LLC, a North Carolina limited liability company (the New General Partner),
and Triangle Mezzanine LLC, a North Carolina limited liability company (the Old General
Partner).
Recitals:
WHEREAS, the New General Partner is a wholly-owned subsidiary of Parent; and
WHEREAS, pursuant to the terms and conditions of this Agreement, (i) the Old General Partner
will merge with and into the New General Partner, with the New General Partner continuing as the
surviving entity and as a wholly-owned subsidiary of Parent, and (ii) the members of the Old
General Partner (the GP Members) will receive common stock of Parent on the terms set
forth herein; and
WHERERAS, it is contemplated that these transactions will close concurrently with the closing
of the transactions contemplated by that certain Agreement and Plan of Merger (the Fund Merger
Agreement) by and among Parent, TCC Merger Sub, LLC (Merger Sub) and Triangle
Mezzanine Fund LLLP (the Fund), pursuant to which (i) Merger Sub will merge with and into
the Fund, with the Fund continuing as the surviving entity, and (ii) the limited partners of the
Fund will receive common stock of Parent on the terms set forth therein; and
WHEREAS, it is contemplated that these transactions will close concurrently with the closing
of the initial public offering of shares of common stock by Parent in a firm-commitment
underwritten offering (the Triangle IPO); and
WHEREAS, it is contemplated that the issuance of common stock by Parent to the GP Members
pursuant to this Agreement and to the limited partners of the Fund pursuant to the Fund Merger
Agreement will be exempt from registration pursuant to Section 4(2) of the Securities Act of 1933,
as amended (the Securities Act) and/or Rule 506 thereunder;
NOW, THEREFORE, in consideration of the mutual covenants and undertakings set forth herein,
and subject to and on the terms and conditions set forth herein, the parties hereby agree as
follows:
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ARTICLE I
THE MERGER
THE MERGER
Section 1.1 The Merger. At the Effective Time (as defined below), in accordance with this
Agreement and the North Carolina Limited Liability Company Act (the North Carolina LLC
Act), the Old General Partner will merge with and into the New General Partner (the
Merger), the separate existence of the Old General Partner will cease, and the New
General Partner will continue as the surviving entity as a North Carolina limited liability company
(the Surviving Entity). From and after the Effective Time, the Surviving Entity will
possess all the rights, privileges, immunities and franchises, of a public as well as a private
nature, and will be subject to all liabilities, obligations and penalties of, the New General
Partner and the Old General Partner, all with the effect set forth in the North Carolina LLC Act.
Section 1.2 Articles of Organization and Operating Agreement. The Articles of Organization of
the New General Partner in effect immediately prior to the Effective Time will be the Articles of
Organization of the Surviving Entity, until duly amended in accordance with applicable law. The
Operating Agreement of the New General Partner in effect immediately prior to the Effective Time
will be the Operating Agreement of the Surviving Entity, until duly amended in accordance with
applicable law.
Section 1.3 Conversion of the Old General Partner Ownership Interests.
(a) As of the Effective Time, by virtue of the Merger and without any action on the part of
the Old General Partner, the New General Partner, or the respective members thereof, the ownership
interests of the Old General Partner (the Old GP Ownership Interests) that are
outstanding as of the Effective Time will be converted into the right to receive the Merger
Consideration, as determined pursuant to Section 1.3(b) below. All Old GP Ownership Interests,
when converted in accordance with this Section 1.3(a), will no longer be outstanding, will
automatically be cancelled, and will cease to exist, and will thereafter represent the right to
receive the Merger Consideration in respect of such Old GP Ownership Interests.
(b) The merger consideration (the Merger Consideration) payable to GP Members will
be payable in shares of common stock of Parent in an amount equal to, on an aggregate basis, (i)
$7,500,000 divided by (ii) the initial public offering price per share in the Triangle IPO (the
shares issuable to the GP Members in the Merger, the Merger Shares). The Merger Shares
will be allocated among the GP Members in proportion to the respective ownership interests held in
the Old General Partner by the GP Members as of the Effective Time.
(c) The number of Merger Shares payable to any Old GP Member pursuant to the formula set forth
above will be rounded to the nearest whole number. At the Effective Time, the Parent will issue
Merger Shares to each Old GP Member in the amount determined in accordance with Section 1.3(b)
above, subject to such Old GP Members execution and delivery of a Subscription Agreement in the
form attached hereto as Exhibit A.
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ARTICLE II
CLOSING
CLOSING
Section 2.1 Closing. The closing of the transactions contemplated hereby (the
Closing) will take place at the offices of the parties, 3600 Glenwood Avenue, Suite 104,
Raleigh, North Carolina, concurrently with the closing of the transactions contemplated by the Fund
Merger Agreement and the Triangle IPO, or at such other time and place as the parties mutually
agree. For purposes of this Agreement, Closing Date means the date on which the Closing
occurs.
Section 2.2 Effective Time. Upon the terms and conditions of this Agreement, the parties
shall deliver Articles of Merger to the Secretary of State of the State of North Carolina (the
Articles of Merger) contemporaneously with, or immediately after, the Closing, and shall
make all other filings or recordings as may be required under the North Carolina LLC Act and any
other applicable law in order to effect the Merger. The Merger will become effective at the time
of the filing of the Articles of Merger with the Secretary of State of the State of North Carolina
in accordance with the North Carolina LLC Act, or at such later time as the parties may agree and
as is provided in the Articles of Merger. The date and time at which the Merger will so become
effective is herein referred to as the Effective Time.
ARTICLE III
CONDITIONS TO CLOSING
CONDITIONS TO CLOSING
Section 3.1 Mutual Conditions. The obligations of each party to consummate the transactions
contemplated by this Agreement are subject to the satisfaction at or prior to the Closing of each
of the following conditions (any of which may be waived in writing, in whole or in part, by such
party):
(a) Closing of Triangle IPO. The Triangle IPO must close concurrently with the
closing of the transactions contemplated hereby.
(b) Approval of SBA. The SBA must have consented to the transactions contemplated by,
and related to, this Agreement, the Fund Merger Agreement and the Triangle IPO.
ARTICLE IV
REGISTRATION COVENANT
REGISTRATION COVENANT
Section 4.1 Registration.
(a) Reasonable Best Efforts to Register. Following the first anniversary of the
Closing, Parent shall use its reasonable best efforts to file a registration statement with respect
to the resale of all of the Merger Shares, and to cause such registration statement to become
effective, as soon as practicable following such first anniversary (the Merger Shares to be
registered, the Registered Shares); provided, however, that Parent will not be obligated
to effect any such registration for such period of time, as, in the good faith judgment of the
Board of Directors of Parent, such registration would be seriously detrimental to Parent and the
Board of Directors of Parent concludes, as a result, that it is essential to defer the filing of
such registration statement until such time as such registration would not be detrimental. In
addition, Parent will use reasonable best efforts to cause the Merger Shares to be listed on the
Nasdaq Global Market or other securities
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exchange on which Parents common stock is then listed at such time that the resale of the
Merger Shares is registered.
(b) Expenses. All Registration Expenses (as defined below) incurred in connection
with any registration pursuant to Section 4.1(a) above will be borne by Parent. Any Selling
Expenses (as defined below) relating to the Registered Shares will be borne by the holders of such
securities pro rata on the basis of the number of shares of securities so registered on their
behalf. For purposes of this Agreement, (i) Registration Expenses means all expenses
incurred in effecting any registration pursuant to Section 4.1(a) above, including, without
limitation, all registration, qualification, and filing fees, printing expenses, escrow fees, fees
and disbursements of counsel for Parent, blue sky fees and expenses, expenses of any regular or
special audits incident to or required by any such registration and reasonable fees and
disbursements of one counsel for the GP Members as selling stockholders, but will not include (x)
Selling Expenses and (y) the compensation of regular employees of Parent, which will be paid in any
event by Parent, and (ii) Selling Expenses means any underwriting discounts, selling
commissions and stock transfer taxes applicable to the sale of the Registered Shares and fees and
disbursements of counsel for any Old GP Member (other than the fees and disbursements of one
counsel for the GP Members included in Registration Expenses as set forth above).
ARTICLE V
GENERAL PROVISIONS
GENERAL PROVISIONS
Section 5.1 Survival. None of the representations and warranties, and any covenant to be
performed prior to the Effective Time, set forth herein, shall survive the Effective Time.
Section 5.2 Termination. By written notice, this Agreement may be terminated by either the
Old General Partner, on the one hand, or Parent and the New General Partner, on the other hand, if
the Closing has not occurred on or before June 30, 2007.
Section 5.3 Waiver. No failure to exercise, and no delay in exercising, on the part of any
party, any privilege, any power or any right hereunder will operate as a waiver thereof, nor will
any single or partial exercise of any privilege, right or power hereunder preclude further exercise
of any other privilege, right or power hereunder.
Section 5.4 Entire Agreement and Modification. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this agreement and supersedes
all prior agreements between the parties with respect to its subject matter. This Agreement may
not be amended except by a written agreement signed by the party to be charged with the amendment.
This Agreement shall be amended by the parties if requested by the SBA to comply with SBA
regulations, provided that no such amendment will change the total amount or allocation of the
Merger Consideration.
Section 5.5 Assignment; Binding Effect; No Third Party Beneficiaries. This Agreement may not
be assigned by any party without the prior written consent of the other party(ies). Subject to the
foregoing, this Agreement will be binding upon and shall inure to the benefit of the parties hereto
and their permitted successors and assigns. Nothing in this Agreement will be construed to give
any person other than the parties to this Agreement any legal or equitable right under or with
respect to this Agreement, except such rights as will inure to a successor or permitted assignee
pursuant to this
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Section 5.5.
Section 5.6 Severability. If any provision of this Agreement is held invalid or unenforceable
by any court of competent jurisdiction, the other provisions of this Agreement will remain in full
force and effect.
Section 5.7 Governing Law. This Agreement will be governed by and construed in accordance
with the laws of the State of North Carolina, without regard to the conflict of law provisions
thereof.
Section 5.8 Construction. The language used in this Agreement will be construed, in all
cases, according to its fair meaning, and not for or against any party hereto. The parties
acknowledge that each party has reviewed this Agreement and that rules of construction to the
effect that any ambiguities are to be resolved against the drafting party will not be available in
the interpretation of this Agreement.
Section 5.9 Execution of Agreement; Counterparts. This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same agreement.
Section 5.10 Notices. All notices, consents, waivers, and other communications under this
Agreement must be in writing and must be delivered (i) personally, (ii) by facsimile with
confirmation of transmission by the transmitting equipment, or (iii) by certified or registered
mail (postage prepaid, return receipt requested), and will be deemed given when so delivered
personally or by facsimile, or if mailed, three (3) days after the date of mailing, to the
addresses and facsimile numbers set forth below (or to such other addresses and facsimile numbers
as a party may designate by notice to the other parties):
If to Parent or the New General Partner:
Triangle Capital Corporation
3600 Glenwood Avenue, Suite 104
Raleigh, North Carolina 27612
Attn: President
Facsimile: 919-719-4777
3600 Glenwood Avenue, Suite 104
Raleigh, North Carolina 27612
Attn: President
Facsimile: 919-719-4777
If to the Old General Partner:
Triangle Mezzanine LLC
3600 Glenwood Avenue, Suite 104
Raleigh, North Carolina 27612
Attn: Managing Director
Facsimile: 919-719-4777
3600 Glenwood Avenue, Suite 104
Raleigh, North Carolina 27612
Attn: Managing Director
Facsimile: 919-719-4777
[remainder of page intentionally left blank]
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[signature page of Agreement and Plan of Merger]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.
PARENT: | ||||||||
Triangle Capital Corporation | ||||||||
By: | /s/ Steven C. Lilly | |||||||
Steven C. Lilly, Chief Financial Officer, Secretary and Treasurer | ||||||||
NEW GENERAL PARTNER: | ||||||||
New Triangle GP, LLC | ||||||||
By: | Triangle Capital Corporation, its manager | |||||||
By: | /s/ Garland S. Tucker, III | |||||||
|
||||||||
OLD GENERAL PARTNER: | ||||||||
Triangle Mezzanine LLC | ||||||||
By: | /s/ Garland S. Tucker, III | |||||||
Name: | Garland S. Tucker, III | |||||||
Its: | Manager | |||||||
Exhibit A
Form of Subscription Agreement
[see attached]