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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. )*
Dave & Buster's, Inc.
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(Name of Issuer)
Common Stock, par value $.01 per share
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(Title of Class of Securities)
23833N104
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(CUSIP Number)
Greg S. Feldman
Wellspring Capital Management LLC
Lever House
390 Park Avenue
New York, NY 10022
(212) 318-9800
(Continued on following pages)
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Copy to
William S. Rubenstein
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10022
(212) 735-3000
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
December 8, 2005
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(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check
the following box [_].
Note. Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7 for
other parties to whom copies are to be sent.
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
WS Midway Holdings, Inc.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_]
(b) [x]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
BK, AF
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5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7. NUMBER OF SHARES BENEFICIALLY
OWNED BY EACH REPORTING
NUMBER OF PERSON WITH SOLE VOTING POWER
SHARES
BENEFICIALLY None
OWNED BY
EACH
REPORTING ------------------------------------------
PERSON 8. SHARED VOTING POWER
WITH
1,095,302*
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9. SOLE DISPOSITIVE POWER
None
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10. SHARED DISPOSITIVE POWER
None
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,095,302*
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12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11)EXCLUDES CERTAIN SHARES [_]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.66%*
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14. TYPE OF REPORTING PERSON
CO
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* See discussion in Items 4 and 5 of this Schedule 13D.
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Wellspring Capital Management LLC
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_]
(b) [x]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
OO
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5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7. NUMBER OF SHARES BENEFICIALLY
OWNED BY EACH REPORTING
NUMBER OF PERSON WITH SOLE VOTING POWER
SHARES
BENEFICIALLY None
OWNED BY
EACH -------------------------------------------
REPORTING 8. SHARED VOTING POWER
PERSON
WITH 1,095,302*
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9. SOLE DISPOSITIVE POWER
None
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10. SHARED DISPOSITIVE POWER
None
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,095,302*
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12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.66%*
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14. TYPE OF REPORTING PERSON
OO
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* See discussion in Items 4 and 5 of this Schedule 13D.
The information set forth in response to each separate Item below shall be
deemed to be a response to all Items where such information is relevant.
Item 1. Security and Issuer.
This Statement on Schedule 13D (this "Statement") relates to the shares of
Common Stock, $.01 par value per share ("Common Stock"), of Dave & Buster's,
Inc., a Missouri corporation ("Dave & Buster's"). The principal executive
offices of Dave & Buster's are located at 2481 Manana Drive, Dallas, Texas
75220.
Item 2. Identity and Background.
(a) - (c) This Statement is filed by Wellspring Capital Management LLC, a
Delaware limited liability company ("Wellspring"), and WS Midway Holdings,
Inc., a Delaware corporation and wholly owned subsidiary of Wellspring ("WS
Holdings" and, together with Wellspring, the "Reporting Persons", and each a
"Reporting Person"). The principal business address of each of the Reporting
Persons is 390 Park Avenue, 5th Floor, New York, NY 10022. Wellspring's
principal business is managing investment funds that acquire, hold and dispose
of investments in various companies. Holdings is a newly formed subsidiary of
Wellspring organized to acquire and hold all of the issued and outstanding
capital stock of Dave & Buster's following the Merger (as defined below).
The (i) name, (ii) business address, (iii) present principal occupation or
employment, (iv) name, principal business and address of any corporation or
other organization in which such employment is conducted, and (v) citizenship
of each director and executive officer of WS Holdings and Wellspring are set
forth on Schedule I hereto and incorporated herein by reference.
(d) - (e) During the last five years, none of the Reporting Persons, nor,
to the knowledge of any of the Reporting Persons, any of the individuals
referred to in Schedule I, has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or has been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
resulting in a judgment, decree or final order enjoining future violations of,
or prohibiting or mandating activities subject to, federal or state securities
laws, or finding violations with respect to such laws.
(f) Wellspring is a Delaware limited liability company. WS Holdings is a
Delaware corporation.
Item 3. Source and Amount of Funds or Other Consideration.
Pursuant to the Agreement and Plan of Merger, dated as of December 8, 2005
(the "Merger Agreement"), among WS Holdings, Dave & Buster's and WS Midway
Acquisition Sub, Inc., a Missouri corporation and wholly owned subsidiary of WS
Holdings ("Merger Sub"), subject to the conditions set forth in the Merger
Agreement, Merger Sub will be merged with and into Dave & Buster's, with Dave &
Buster's continuing as the surviving entity and a wholly owned subsidiary of WS
Holdings (the "Merger"). Holders of Common Stock will receive $18.05 per share
in cash in the Merger. The source of the Merger consideration will be (i) the
proceeds from a
credit facility to be entered into at Closing by Merger Sub and J.P.
Morgan Securities Inc. and JPMorgan Chase Bank, N.A. and (ii) an equity
contribution by WS Holdings to Merger Sub.
The Merger is subject to the approval of Dave & Buster's shareholders. In
addition, the Merger is subject to expiration or earlier termination of
applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements
Act, the receipt of certain required consents, as well as other customary
closing conditions. The Merger Agreement has been filed as Exhibit 99.1 and is
incorporated herein by reference.
Item 4. Purpose of Transaction.
This filing on Schedule 13D has been made because WS Holdings entered into
a Voting Agreement (the "Voting Agreement"), dated as of December 8, 2005, with
David O. Corriveau, the President of Dave & Buster's, James W. Corley, the
Chief Executive Office and Chief Operating Officer of Dave & Buster's, William
C. Hammett, Jr., the Chief Financial Officer and Senior Vice President of Dave
& Buster's, and Sterling R. Smith, the Senior Vice President - Operations of
Dave & Buster's (collectively, the "Shareholders"). The Voting Agreement was
entered into as an inducement for, and in consideration of, WS Holdings
entering into the Merger Agreement. WS Holdings did not pay additional
consideration to the Shareholders in connection with the execution and delivery
of the Voting Agreement.
Pursuant to the Voting Agreement, the Shareholders, who collectively own
or are entitled to direct the voting of 1,095,302 shares of Common Stock, which
represents approximately 7.66%(2) of the shares of Common Stock deemed to be
outstanding pursuant to Rule 13d-3(d)(1) and approximately 7.66% of the voting
power of Dave & Buster's, have agreed to vote (or cause to be voted) their
shares of Common Stock (i) in favor of the approval of the Merger Agreement and
(ii) against any alternative proposal of any other person providing for (x) the
acquisition of Dave & Buster's by merger or other business combination, (y) an
acquisition of 15% or more of the assets of Dave & Buster's and its
subsidiaries, taken as a whole or (z) an acquisition of 15% or more of the
outstanding Common Stock. In addition, the Shareholders cannot sell, transfer,
convert or otherwise dispose of the shares subject to the Voting Agreement, if
such sale, transfer, conversion or disposition would result in the
Shareholders' inability to vote such shares as required pursuant to the terms
of the Voting Agreement.
The purpose of the Voting Agreement is to facilitate stockholder approval
for WS Holdings and Dave & Buster's to consummate the transactions contemplated
by the Merger Agreement. A copy of the Voting Agreement is filed as Exhibit
99.2 hereto and is incorporated herein by reference.
Upon the consummation of the Merger, the directors of Merger Sub
immediately prior to the effective time of the Merger will be the directors of
the surviving company, until their respective successors are duly elected or
appointed and qualified. Upon consummation of the Merger, the officers of Dave
& Buster's immediately prior to the effective time of the Merger will
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(1) The share ownership percentages described in this Schedule are based on
14,292,500 shares of Common Stock outstanding as of December 7, 2005.
be the initial officers of the surviving company, until their respective
successors are duly appointed.
At the effective time of the Merger, the articles of incorporation of
Merger Sub, as in effect immediately prior to the effective time of the Merger,
shall be the articles of incorporation of the surviving company until
thereafter changed or amended as provided by the General and Business
Corporation Law of the State of Missouri (the "GBCL") or therein, except that
as of the effective time, paragraph 1 of the articles of incorporation of the
surviving company shall be amended to reflect the name of Dave & Buster's as
the name of the surviving company.
At the effective time of the Merger, the bylaws of Merger Sub, as in
effect immediately prior to the Effective Time, shall become the bylaws of the
surviving company, until thereafter changed or amended as provided by the GBCL,
the articles of incorporation of the surviving company and such bylaws.
If the Merger is consummated, Dave & Buster's will become a wholly-owned
subsidiary of WS Holdings and WS Holdings will seek to cause the Common Stock
to be deregistered under the Exchange Act and the Securities Act of 1933, as
amended, and delisted from the New York Stock Exchange.
Except as set forth in this Item 4, none of the Reporting Persons nor, to
the knowledge of any Reporting Person, any of the individuals referred to in
Schedule I, has any plans or proposals which relate to or would result in any
of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D
(although WS Holdings and Wellspring reserve the right to develop such plans).
The foregoing summary of certain provisions of the Merger Agreement and
the Voting Agreement is not intended to be complete and is qualified in its
entirety by reference to the full text of such agreements.
Item 5. Interest in Securities of the Issuer.
(a)-(b) As of the filing date of this Schedule 13D, as a result of the
Voting Agreement, the Reporting Persons may be deemed to have (i) beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) and (ii)
shared power to vote or direct the vote of 1,059,302 shares of Common Stock,
which represents approximately 7.66% of the shares of Common Stock deemed to be
outstanding pursuant to Rule 13d-3(d)(1).
The Reporting Persons are not entitled to any rights of a shareholder of
Dave & Buster's. None of the Reporting Persons has (i) sole power to vote or
direct the vote or (ii) sole or shared power to dispose or direct the
disposition of Common Stock. Each of the Reporting Persons expressly disclaims
any beneficial ownership of any Common Stock under the Voting Agreement. Other
than as set forth above, neither any Reporting Person nor any subsidiary of any
Reporting Person, nor, to the knowledge of any Reporting Person, any of the
individuals referred to in Schedule I, has the sole or shared power to vote or
to direct the vote or has the sole or shared power to dispose or to direct the
disposition of any shares of Common Stock.
(c) Except as set forth or incorporated herein, neither any Reporting
Person, nor, to the knowledge of any Reporting Person, any of the individuals
referred to in Schedule I, has effected any transaction in Common Stock during
the past 60 days.
(d) Not applicable
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
Other than the Merger Agreement and the Voting Agreement, to the knowledge
of the Reporting Persons, there are no contracts, arrangements, understandings
or relationships (legal or otherwise) among the persons named in Item 2 and
Schedule I and between any such persons and any other person with respect to
the securities of Dave & Buster's, including, but not limited to, transfer or
voting of any of the securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or
loss, or the giving or withholding of proxies.
Item 7. Material to be filed as Exhibits.
99.1. Agreement and Plan of Merger, dated December 8, 2005, by and
among Dave & Buster's, Inc., a Missouri corporation, WS Midway
Acquisition Sub, Inc., a Missouri corporation, and WS Midway
Holdings, Inc., a Delaware corporation (incorporated herein by
reference to Exhibit 2.1 to the Current Report on Form 8-K filed
by Dave & Buster's on December 9, 2005).
99.2. Voting Agreement, dated December 8, 2005, by and between WS
Midway Holdings, Inc., a Delaware corporation, and the
Shareholders listed therein.
99.3. Joint Filing Agreement, dated December 15, 2005, by and between
WS Midway Holdings, Inc. and Wellspring Capital Management LLC.
After reasonable inquiry and to the best of each of the undersigned's
knowledge and belief, the undersigned certify that the information set forth in
this statement is true, complete and correct.
Dated: December 16, 2005
WS MIDWAY HOLDINGS, INC.
By: /s/ Greg S. Feldman
----------------------
Greg S. Feldman
President
WELLSPRING CAPITAL
MANAGEMENT LLC
By: /s/ Greg S. Feldman
----------------------
Greg S. Feldman
Managing Partner
SCHEDULE I
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Set forth below is a list of each executive officer and director of WS
Midway Holdings, Inc. and Wellspring Capital Management LLC setting forth the
business address and present principal occupation or employment (and the name
and address of any corporation or organization in which such employment is
conducted) of each person. The persons named below are citizens of the United
States.
Directors and Officers of WS Holdings:
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Name Principal Occupation Address
Greg Feldman Managing Partner, Wellspring 390 Park Avenue, 5th Floor,
Capital Management LLC New York, NY 10022
Jason Fortin Partner, Wellspring Capital 390 Park Avenue, 5th Floor,
Management LLC New York, NY 10022
Directors and Officers of Wellspring Capital Management:
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Name Principal Occupation Address
Greg S. Feldman Managing Partner, Wellspring 390 Park Avenue, 5th Floor,
Capital Management LLC New York, NY 10022
David C. Mariano Managing Partner, Wellspring 390 Park Avenue, 5th Floor,
Capital Management LLC New York, NY 10022
William F. Dawson, Jr. Partner, Wellspring Capital 390 Park Avenue, 5th Floor,
Management LLC New York, NY 10022
Carl M. Stanton Partner, Wellspring Capital 390 Park Avenue, 5th Floor,
Management LLC New York, NY 10022
Jason B. Fortin Partner, Wellspring Capital 390 Park Avenue, 5th Floor,
Management LLC New York, NY 10022
Joshua C. Cascade Principal, Wellspring Capital 390 Park Avenue, 5th Floor,
Management LLC New York, NY 10022
Alexander E. Carles Principal, Wellspring Capital 390 Park Avenue, 5th Floor,
Management LLC New York, NY 10022
David J. Kass Chief Financial Officer, Wellspring 390 Park Avenue, 5th Floor,
Capital Management LLC New York, NY 10022
INDEX TO EXHIBITS
Exhibit
Number Document
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99.1. Agreement and Plan of Merger, dated December 8, 2005, by and among
Dave & Buster's, Inc., a Missouri corporation, WS Midway
Acquisition Sub, Inc., a Missouri corporation and WS Midway
Holdings, Inc., a Delaware corporation (incorporated herein by
reference to Exhibit 2.1 to the Current Report on Form 8-K filed
by Dave & Buster's, Inc. on December 9, 2005).
99.2. Voting Agreement, dated December 8, 2005, by and between WS Midway
Holdings, Inc., a Delaware corporation, and the Shareholders
listed therein.
99.3. Joint Filing Agreement, dated December 15, 2005, by and between WS
Midway Holdings, Inc. and Wellspring Capital Management LLC.
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Exhibit 99.2
VOTING AGREEMENT
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VOTING AGREEMENT (this "Agreement") dated as of December 8, 2005, is
by and among WS MIDWAY HOLDINGS, INC., a Delaware corporation ("Holdings"), and
each of the shareholders of Dave & Buster's, Inc., a Missouri corporation,
listed on the signature page hereof as a shareholder (each, a "Shareholder"
and, collectively, the "Shareholders"). For purposes of this Agreement,
capitalized terms used and not defined herein shall have the respective
meanings ascribed to them in the Agreement and Plan of Merger, dated as of the
date hereof (the "Merger Agreement"), by and among Holdings, WS Midway
Acquisition Sub, Inc., a Missouri corporation ("Merger Sub"), and the Company.
RECITALS
A. Each Shareholder "beneficially owns" (as such term is defined in
Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended)
and is entitled to dispose of (or to direct the disposition of) and to vote (or
to direct the voting of) the number of shares of common stock, par value $0.01
per share, of the Company (the "Common Stock") set forth opposite such
Shareholder's name on Schedule A hereto (such shares of Common Stock, together
with all other shares of capital stock of the Company acquired by any
Shareholder after the date hereof and during the term of this Agreement, being
collectively referred to herein as the "Subject Shares").
B. Concurrently with the execution and delivery of this Agreement,
Holdings, Merger Sub and the Company are entering into the Merger Agreement
providing for the merger of Merger Sub with and into the Company, with the
Company surviving the Merger (the "Merger") upon the terms and subject to the
conditions set forth therein.
C. As a condition to entering into the Merger Agreement, Holdings has
required that the Shareholders enter into this Agreement, and the Shareholders
desire to enter into this Agreement to induce Holdings to enter into the Merger
Agreement.
D. The Board of Directors of the Company has taken all actions
necessary and within its authority such that no restrictive provision of any
"fair price," "moratorium," "control share acquisition," "business
combination," "stockholder protection," "interested shareholder" or other
similar anti-takeover statute or regulation (including, without limitation,
Sections 351.407 and 351.459 of the General and Business Corporation Law of the
State of Missouri) or restrictive provision of any applicable provision in the
Restated Articles of Incorporation or Amended and Restated By-Laws of the
Company or comparable charter documents and by-laws of any of its Subsidiaries
is, or at the Effective Time will be, applicable to the Company, its
Subsidiaries, Holdings, Merger Sub, Common Stock, the Merger or any other
transaction contemplated by this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
premises, representations, warranties, covenants and agreements contained
herein, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. Representations and Warranties of Each Shareholder.
Each Shareholder, severally and not jointly, represents and warrants
to Holdings as follows:
(a) Authority. Such Shareholder has all requisite legal
power (corporate or other) and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. This Agreement has been
duly authorized, executed and delivered by such Shareholder and constitutes a
valid and binding obligation of such Shareholder enforceable in accordance with
its terms subject to (i) bankruptcy, insolvency, moratorium and other similar
laws now or hereafter in effect relating to or affecting creditors' rights
generally, and (ii) general principles of equity (regardless of whether
considered in a proceeding at law or in equity).
(b) No Conflicts. (i) No filing by such Shareholder with any
governmental body or authority, and no authorization, consent or approval of
any other person is necessary for the execution of this Agreement by such
Shareholder and the consummation by such Shareholder of the transactions
contemplated hereby and (ii) none of the execution and delivery of this
Agreement by such Shareholder, the consummation by such Shareholder of the
transactions contemplated hereby or compliance by such Shareholder with any of
the provisions hereof shall (A) result in, or give rise to, a violation or
breach of or a default under (with or without notice or lapse of time, or both)
any of the terms of any contract, trust agreement, loan or credit agreement,
note, bond, mortgage, indenture, lease, permit, understanding, agreement or
other instrument or obligation to which such shareholder is a party or by which
such shareholder or any of its Subject Shares or assets may be bound, or (B)
violate any applicable order, writ, injunction, decree, judgment, statute, rule
or regulation, except for any of the foregoing as would not prevent such
Shareholder from performing its obligations under this Agreement.
(c) The Subject Shares. Schedule A sets forth, opposite such
Shareholder's name, the number of Subject Shares over which such Shareholder
has record or beneficial ownership as of the date hereof. As of the date
hereof, such Shareholder is the record or beneficial owner of the Subject
Shares denoted as being owned by such Shareholder on Schedule A and has the
sole power to vote (or cause to be voted) such Subject Shares. Except as set
forth on such Schedule A, neither such Shareholder nor any controlled affiliate
of such Shareholder owns or holds any right to acquire any additional shares of
any class of capital stock of the Company or other securities of the Company or
any interest therein or any voting rights with respect to any securities of the
Company. Such Shareholder has good and valid title to the Subject Shares
denoted as being owned by such Shareholder on Schedule A, free and clear of any
and all pledges, mortgages, liens, charges, proxies, voting agreements,
encumbrances, adverse claims, options, security interests and demands of any
nature or kind whatsoever, other than (i) those created by this Agreement, (ii)
as disclosed on Schedule A, or (iii) as would not prevent such Shareholder from
performing its obligations under this Agreement.
(d) Reliance By Holdings. Such Shareholder understands and
acknowledges that Holdings is entering into the Merger Agreement in reliance
upon such Shareholder's execution and delivery of this Agreement.
(e) Litigation. As of the date hereof, there is no action,
proceeding or investigation pending or threatened against such Shareholder that
questions the validity of this Agreement or any action taken or to be taken by
such Shareholder in connection with this Agreement.
2. Representations and Warranties of Holdings.
Holdings hereby represents and warrants to the Shareholders as
follows:
(a) Due Organization, etc. Holdings is duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Holdings has all requisite corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by Holdings and
constitutes a valid and binding obligation of Holdings enforceable in
accordance with its terms subject to (i) bankruptcy, insolvency, moratorium and
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally, and (ii) general principles of equity (regardless
of whether considered in a proceeding at law or in equity).
(b) Conflicts. (i) No filing by Holdings with any
governmental body or authority, and no authorization, consent or approval of
any other person is necessary for the execution of this Agreement by Holdings
and the consummation by Holdings of the transactions contemplated hereby and
(ii) none of the execution and delivery of this Agreement by Holdings, the
consummation by Holdings of the transactions contemplated hereby or compliance
by Holdings with any of the provisions hereof shall (A) conflict with or result
in any breach of the certificate of incorporation or by-laws of Holdings, (B)
result in, or give rise to, a violation or breach of or a default under (with
or without notice or lapse of time, or both) any of the terms of any contract,
loan or credit agreement, note, bond, mortgage, indenture, lease, permit,
understanding, agreement or other instrument or obligation to which Holdings is
a party or by which Holdings or any of its assets may be bound, or (C) violate
any applicable order, writ, injunction, decree, judgment, statute, rule or
regulation, except for any of the foregoing as would not prevent Holdings from
performing its obligations under this Agreement.
(c) Reliance by the Shareholders. Holdings understands and
acknowledges that the Shareholders are entering into this Agreement in reliance
upon the execution and delivery of the Merger Agreement by Holdings.
3. Covenants of Each Shareholder.
Until the termination of this Agreement in accordance with Section 5,
each Shareholder, in its capacity as such, agrees as follows:
(a) At the Company Shareholders Meeting or at any
adjournment, postponement or continuation thereof or in any other circumstances
occurring prior to the Company Shareholders Meeting upon which a vote or other
approval with respect to the Merger and the Merger Agreement is sought, each
Shareholder shall vote (or cause to be voted) the Subject Shares (and each
class thereof) held by such Shareholder (i) in favor of the approval of the
Merger and the approval and adoption of the Merger Agreement; and (ii) except
with the written consent of Holdings, against any Acquisition Proposal. Any
such vote shall be cast in accordance with such procedures relating thereto so
as to ensure that it is duly counted for purposes of determining that a quorum
is present and for purposes of recording the results of such vote. Each
Shareholder agrees not to enter into any agreement or commitment with any
person the effect of which would be inconsistent with or violative of the
provisions and agreements contained in this Section 3(a).
(b) Each Shareholder agrees not to, directly or indirectly,
(i) sell, transfer, tender, pledge, encumber, assign or otherwise dispose of
(collectively, a "Transfer") or enter into any agreement, option or other
arrangement with respect to, or consent to a Transfer of, or convert or agree
to convert, any or all of the Subject Shares to any person, other than in
accordance with the Merger Agreement, or (ii) grant any proxies (other than the
Company proxy card in connection with the Company Shareholders Meeting if and
to the extent such proxy is consistent with the Shareholder's obligations under
Section 3(a) hereof), deposit any Subject Shares into any voting trust or enter
into any voting arrangement, whether by proxy, voting agreement or otherwise,
with respect to any of the Subject Shares, other than pursuant to this
Agreement. Such Shareholder further agrees not to commit or agree to take any
of the foregoing actions or take any action that would have the effect of
preventing, impeding, interfering with or adversely affecting its ability to
perform its obligations under this Agreement.
(c) Such Shareholder shall not, nor shall such Shareholder
permit any controlled affiliate of such Shareholder to, nor shall such
Shareholder act in concert with or permit any controlled affiliate to act in
concert with any person to make, or in any manner participate in, directly or
indirectly, a "solicitation" (as such term is used in the rules of the
Securities and Exchange Commission) of proxies or powers of attorney or similar
rights to vote, or seek to advise or influence any person with respect to the
voting of, any shares of Common Stock intended to facilitate any Acquisition
Proposal or to cause shareholders of the Company not to vote to approve and
adopt the Merger Agreement. Such Shareholder shall not, and shall direct any
investment banker, attorney, agent or other adviser or representative of such
Shareholder not to, directly or indirectly, through any officer, director,
agent or otherwise, enter into, solicit, initiate, conduct or continue any
discussions or negotiations with, or knowingly encourage or respond to any
inquiries or proposals by, or provide any information to, any person, other
than Holdings, relating to any Acquisition Proposal. Each Shareholder hereby
represents that, as of the date hereof, it is not engaged in discussions or
negotiations with any party other than Holdings and Merger Sub with respect to
any Acquisition Proposal.
4. Shareholder Capacity.
Notwithstanding any provision herein to the contrary, no Person
executing this Agreement who is or becomes during the term of this Agreement a
director or officer of the Company shall be deemed to make any agreement or
understanding in this Agreement in such Person's capacity as a director or
officer. Each Shareholder is entering into this Agreement solely in his or her
capacity as the record holder or beneficial owner of, or the trustee of a trust
whose beneficiaries are the beneficial owners of, such Shareholder's Subject
Shares and nothing herein shall limit or affect any actions taken by a
Shareholder in his or her capacity as a director or officer of the Company to
the extent specifically permitted by the Merger Agreement or following the
termination of the Merger Agreement.
5. Termination.
This Agreement shall terminate upon the earliest of (A) the approval
and adoption of the Merger Agreement, (B) the termination of the Merger
Agreement pursuant to Sections 7.1(a) or 7.1(b), (C) the termination of the
Merger Agreement pursuant to Sections 7.1(d), 7.1(e), or 7.1(f)(i) provided
that at no time after the date of the Merger Agreement and at or before the
date of such termination shall a proposal with respect to an Acquisition
Proposal have been publicly announced or disclosed (whether or not conditional)
or disclosed to the Board of Directors of the Company or any committee thereof,
and (D) twelve months after the termination of the Merger Agreement pursuant to
(i) Sections 7.1(d), 7.1(e) or 7.1(f)(i) if after the date of the Merger
Agreement and at or before the date of such termination a proposal with respect
to an Acquisition Proposal shall have been publicly announced or disclosed
(whether or not conditional) or disclosed to the Board of Directors of the
Company or any committee thereof or (ii) Sections 7.1(c), 7.1(f)(ii), 7.1(g) or
7.1(h).
6. Appraisal Rights.
To the extent permitted by applicable law, each Shareholder hereby
waives any rights of appraisal or rights to dissent from the Merger that it may
have under applicable law.
7. Publication.
Each Shareholder hereby authorizes Holdings and the Company to publish
and disclose in the Proxy Statement/Prospectus and the Registration Statement
(including any and all documents and schedules filed with the Securities and
Exchange Commission relating thereto) its identity and ownership of shares of
Common Stock and the nature of its commitments, arrangements and understandings
pursuant to this Agreement.
8. Governing Law.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Missouri applicable to contracts executed in and to be
performed entirely within that State.
9. Waiver of Jury Trial.
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND
THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH
PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH
SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH SUCH PARTY HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 9.
10. Specific Performance.
The parties agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement in any court of the United States located in the State of
Missouri or in Missouri state court, this being in addition to any other remedy
to which they are entitled at law or in equity.
11. Amendment, Waivers, Etc.
This Agreement may be amended by Holdings and the Shareholders at any
time before or after adoption of the Merger Agreement by the shareholders of
the Company; provided, however, that after such adoption, no amendment shall be
made that by law or in accordance with the rules of any relevant stock exchange
or automated inter-dealer quotation system requires further approval by such
shareholders without such further approval. This Agreement may not be amended
except by an instrument in writing signed by Holdings and the Shareholders. At
any time prior to the Effective Time, Holdings and the Shareholders may, to the
extent legally allowed, (i) extend the time for the performance of any of the
obligations or acts of the other party; (ii) waive any inaccuracies in the
representations and warranties of the other party contained herein or in any
document delivered pursuant to this Agreement; and (iii) waive compliance with
any of the agreements or conditions of the other party contained herein;
provided, however, that no failure or delay by Holdings or the Shareholders in
exercising any right hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right hereunder. Any agreement on the part
of Holdings or the Shareholders to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of such party.
12. Assignment; No Third Party Beneficiaries.
Neither this Agreement nor any of the rights, benefits or obligations
hereunder may be assigned by any of the parties hereto (whether by operation of
law or otherwise) without the prior written consent of all of the other
parties, except that Holdings may assign its rights hereunder to a controlled
affiliate of Wellspring. Subject to the preceding sentence, this Agreement will
be binding upon, inure to the benefit of and be enforceable by the parties
hereto and their respective successors and permitted assigns. Nothing in this
Agreement, express or implied, is intended to or shall confer upon any Person
(other than Holdings, Wellspring and the Shareholders and their respective
successors and permitted assigns) any legal or equitable right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement, and no
person (other than as so specified) shall be deemed a third party beneficiary
under or by reason of this Agreement.
13. Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made (i) as of the date delivered or sent by facsimile if delivered
personally or by facsimile and (ii) on the third business day after deposit in
the U.S. mail, if mailed by registered or certified mail (postage prepaid,
return receipt requested), in each case to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice, except that notices of changes of address shall be effective upon
receipt):
if to Holdings, to:
c/o Wellspring Capital Management LLC
Lever House
390 Park Avenue
New York, New York 10022-4608
Attention: Greg S. Feldman, Managing Partner
Telephone: (212) 318-9898
Facsimile: (212) 318-9810
If to any Shareholder, at the address set forth under such
Shareholder's name on Schedule A hereto or to such other address as the party
to whom notice is to be given may have furnished to the other parties in
writing in accordance herewith.
14. Severability.
If any term or other provision of this Agreement is invalid, illegal
or incapable of being enforced by any rule of law, or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner adverse to any party. Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that transactions
contemplated hereby are fulfilled to the maximum extent possible.
15. Integration.
This Agreement (together with the Merger Agreement to the extent
referenced herein), including Schedule A hereto, constitutes the full and
entire understanding and agreement of the parties with respect to the subject
matter hereof and thereof and supersedes any and all prior understandings or
agreements relating to the subject matter hereof and thereof.
16. Mutual Drafting.
Each party hereto has participated in the drafting of this Agreement,
which each party acknowledges is the result of extensive negotiations between
the parties.
17. Section Headings.
The section headings of this Agreement are for convenience of
reference only and are not to be considered in construing this Agreement.
18. Counterparts.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, and of which when executed
shall be deemed to be an original but all which shall constitute one and due
some agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and date first above written.
WS MIDWAY HOLDINGS, INC.
By: /s/ Greg S. Feldman
------------------------------
Name: Greg S. Feldman
Title: President
SHAREHOLDERS:
-------------
/s/ David O. Corriveau
---------------------------------
David O. Corriveau
/s/ James W. Corley
---------------------------------
James W. Corley
/s/ William C. Hammett, Jr.
---------------------------------
William C. Hammett, Jr.
/s/ Sterling R. Smith
---------------------------------
Sterling R. Smith
Schedule A
----------
SHAREHOLDERS
------------
Shareholder Common Stock Shares Pledged
----------- ------------ --------------
David O. Corriveau 472,085 372,085
2481 Manana Drive
Dallas, TX 75220
James W. Corley 537,717 0
2481 Manana Drive
Dallas, TX 75220
William C. Hammett, Jr. 50,500 0
2481 Manana Drive
Dallas, TX 75220
Sterling R. Smith 35,000 0
2481 Manana Drive
Dallas, TX 75220 ____________ ____________
Total 1,095,302 372,085
Exhibit 99.3
Joint Filing Agreement Pursuant to Rule 13d-1(k)(1)
This agreement is made pursuant to Rule 13d-1(k)(1) under the
Securities Exchange Act of 1934 (the "Act") by and among the parties listed
below, each referred to herein as a "Joint Filer". The Joint Filers agree that
a statement of beneficial ownership as required by Section 13(d) of the Act and
the Rules thereunder may be filed on each of their behalf on Schedule 13D or
Schedule 13G, as appropriate, and that said joint filing may thereafter be
amended by further joint filings. The Joint Filers state that they each satisfy
the requirements for making a joint filing under Rule 13d-1.
Date: December 15, 2005
WS MIDWAY HOLDINGS, INC.
By: /s/ Greg S. Feldman
---------------------------
Greg S. Feldman
President
WELLSPRING CAPITAL
MANAGEMENT LLC
By: /s/ Greg S. Feldman
--------------------------
Greg S. Feldman
Managing Partner