Document:

Exhibit 10.2

 

	
 
    	
August 14,   2013
    

 

VIA FACSIMILE AND E-MAIL

 

KSTW Holdings, Inc.

KSTW Acquisition, Inc.

c/o Kohlberg & Company, L.L.C.

111 Radio Circle

Mount Kisco, New York 10549

Facsimile: (914) 241-7476
 Attention: Christopher W. Anderson

 

Re:          Notice of Termination of Agreement and Plan of Merger

 

Reference is made to the Agreement and Plan of Merger, dated as of June 30, 2013 (the “Kohlberg Merger Agreement”), by and among KSTW Holdings, Inc. (“Holdings”), KSTW Acquisition, Inc., (together with Holdings, “you”) and Steinway Musical Instruments, Inc. (“Steinway” or “we”).  Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Kohlberg Merger Agreement.

 

On August 11, 2013, in accordance with Sections 6.6(f) and 6.6(g) of the Kohlberg Merger Agreement, we provided you with a Notice of Superior Proposal that on August 11, 2013, Steinway’s board of directors determined in good faith, after consultation with its legal and financial advisors and in accordance with Sections 6.6(f) and 6.6(g) of the Kohlberg Merger Agreement, (i) that the definitive offer from Paulson & Co. Inc. (“Paulson”) to acquire Steinway for $38.00 per share in cash (the “Paulson Offer”) was a bona fide written proposal that did not result from a breach of Section 6.6 of the Kohlberg Merger Agreement, (ii) that the Paulson Offer constituted a Superior Proposal, (iii) that we intended to effect an Adverse Recommendation Change or to terminate the Kohlberg Merger Agreement as permitted under Section 6.6(f) of the Kohlberg Merger Agreement in order to enter into an Agreement and Plan of Merger with affiliates of Paulson (the “Paulson Merger Agreement”), (iv) that failure to take these actions would be inconsistent with its fiduciary duties under Delaware law, and (v) that we were prepared to negotiate with you and your advisors in good faith, if you so desired, to make adjustments in the terms and conditions of the Kohlberg Merger Agreement and the related documents in accordance with Section 6.6(g) of the Kohlberg Merger Agreement.

 

 

On August 13, 2013, you provided us with a notice (the “Waiver of Match Right”), waiving your right to negotiate with us to make adjustments in the terms and conditions of the Kohlberg Merger Agreement and related documents in accordance with Section 6.6(g) of the Kohlberg Merger Agreement.

 

On August 14, 2013, we provided you with an Amended Notice of Superior Proposal that on August 13, 2013, Paulson amended the Paulson Offer to provide for an increase in purchase price to be paid for shares of Company Common Stock to $40,00 per share in cash and increased the amount of the termination fee  payable by Steinway in certain circumstances to $13.35 million, and the Steinway board of directors determined in good faith, after consultation with its legal and financial advisors and in accordance with Section 6.6(g) of the Kohlberg Merger Agreement that the Paulson Offer, as amended, continues to constitute a Superior Proposal.

 

Accordingly, pursuant to Section 8.1(c)(ii) of the Kohlberg Merger Agreement, we hereby provide notice that we are terminating, and hereby terminate, the Kohlberg Merger Agreement effective immediately and without further action by any party, in order to enter into the Paulson Merger Agreement.

 

Pursuant to Section 8.3(a) of the Kohlberg Merger Agreement and the Waiver of Match Right, we hereby confirm that we have, concurrently with the sending of this notice, directed our bank to immediately initiate payment of the one-time Termination Fee of Six Million Six Hundred Seventy Five Thousand United States Dollars (US$6,675,000) by wire transfer of same day funds, to the bank account you specified in the Waiver of Match Right as follows:

 

Account Information:

JPMorgan Chase Bank

500 Stanton Christiana Road

Newark, DE 19713

ABA #:  021 000 021

Account #:  3285765001

For the Account of:  Kohlberg & Co., LLC

 

2

 

	
 
    	
Sincerely,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Dennis M. Hanson
    
	
 
    	
Name:    Dennis M. Hanson
    
	
 
    	
Title:   Senior   Executive Vice President and Chief Financial Officer
    

 

 

cc:

William Shields

Ropes & Gray LLP

800 Boylston Street

Boston, Massachusetts 02199-3600

Facsimile: (617) 951-7050

 

Kenton J. King

M. Amr Razzak

Skadden, Arps, Slate, Meagher & Flom, LLP

525 University Ave, Suite 1100

Palo Alto, California 94301

Facsimile: (650) 470 - 4570

 

John Gaffney

Gibson, Dunn & Crutcher

200 Park Avenue

New York, New York, 10166

Facsimile: (212) 351- 6326

 

3exhibit41.htm

EXHIBIT 4.1

 

 

 

PROMISSORY NOTE

 

	
$200,000

	
August 6, 2013

 

FOR VALUE RECEIVED, Assured Pharmacy, Inc., a Nevada corporation (the “Corporation”), promises to pay to the order of Pinewood Trading Fund, L.P., or its assigns (the “Shareholder”), the principal sum of Two Hundred Thousand Dollars ($200,000), at 1029 East Drive, Beaumont, Texas 77706 or such place as the Shareholder may from time to time designate in writing, payable as hereinafter provided.

 

The unpaid principal balance hereof shall be payable September 5, 2013, subject to early payment as provided herein, by delivery to the Shareholder of a certified or bank cashier’s check for the appropriate amount.  As long as any principal balance remains outstanding, the Corporation shall not borrow additional money from or incur other additional indebtedness owed to any person (other than the Shareholder), nor shall the Corporation issue any securities, except as may be agreed to by the Shareholder.

 

The Corporation shall use the proceeds of this note solely to: (1) fund and open a store in Denver, Colorado; and (2) provide funding for stores in Kansas City, Kansas and Kirkland, Washington, to maximize profitability.

 

If payment is not made when due, the outstanding principal and accrued interest of this note shall, at the option of the holder and without notice or demand, mature and become immediately due and payable.  The outstanding principal and accrued interest of this note shall automatically mature and become immediately payable in the event the Corporation violates the use of proceeds provided for in this note or becomes the subject of bankruptcy or other insolvency proceedings.  The Corporation hereby waives presentment, demand and notice.

 

The unpaid principal balance hereof shall bear interest from the date hereof at a rate equal to 12% per annum.  Interest shall be calculated for the actual number of days elapsed, using a daily rate determined by dividing the annual rate by 360, and shall be payable on demand of the Shareholder, subject to early payment as provided herein.  All principal, interest and other amounts unpaid after maturity hereof has been accelerated shall bear interest, payable on demand, computed at a rate equal to 6% per annum plus the rate otherwise payable hereunder.  Nothing in this note shall require the Corporation to pay interest at a rate in excess of the maximum rate permitted by applicable law.  All amounts payable on this note shall be payable in lawful money of the United States of America.  This note may be prepaid in full or in part at any time without premium or penalty.

 

This note is not secured by any existing or future mortgages or security agreements between the Shareholder and the Corporation.

 

In case any payment herein provided for shall not be paid when due, the Corporation promises to pay all reasonable costs of collection, including all reasonable attorney’s fees.

 

This note is governed by the internal laws of the State of New York, except to the extent superseded by United States federal law.

 

 

 

 

 

 

  

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The Corporation hereby waives presentment, demand, notice of nonpayment, protest and all other demands and notices in connection with the delivery, acceptance, performance or enforcement of this note.

 

The Corporation hereby consents to the exclusive jurisdiction of any state or federal court situated in New York, New York, and waives any objection based on lack of personal jurisdiction, improper venue or forum non conveniens, with regard to any actions, claims, disputes or proceedings relating to this note, or any document delivered hereunder or in connection herewith, or any transaction arising from or connected to any of the foregoing.  The Corporation waives personal service of any and all process, and consents to all such service of process made by mail or by messenger directed to the address specified below.  Nothing herein shall affect the Shareholder’s right to serve process in any manner permitted by law, or limit the Shareholder’s right to bring proceedings against the Corporation or its property or assets in the competent courts of any other jurisdiction or jurisdictions.

 

The Corporation hereby waives any and all right to trial by jury in any action or proceeding relating to this note, or any document delivered hereunder or in connection herewith, or any transaction arising from or connected to any of the foregoing.  The Corporation represents that this waiver is knowingly, willingly and voluntarily given.

 

If any provision or any portion of any provision contained in this note is held by a court of law to be invalid, illegal, unlawful, void or unenforceable as written in any respect, then it is the intent of all parties hereto that such portion or provision shall be given force to the fullest possible extent that it is legal, valid and enforceable, that the remainder of the note shall be construed as if such illegal, invalid, unlawful, void or unenforceable portion or provision was not contained therein, and the rights, obligations and interests of the Corporation and the Shareholder under the remainder of this note shall continue in full force and effect.

 

Time is of the essence with regard to the performance of the obligations of the Corporation in this note and each and every term, covenant and condition herein by or applicable to the Corporation.

 

Executed as of the date first written above.

 

ASSURED PHARMACY, INC.

By:    /s/  Robert DelVecchio                                    

Name:     Robert DelVecchio

Title:       CEO

 

 

 

 

 

 

 

  

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