AGREEMENT AND PLAN OF MERGER by and among SOUTHERN ENERGY HOMES, INC. T MERGER SUB, INC. and CAVALIER HOMES, INC. June 14, 2009
Exhibit
10.1
AGREEMENT
AND PLAN OF MERGER
by
and among
SOUTHERN
ENERGY HOMES, INC.
T
MERGER SUB, INC.
and
CAVALIER
HOMES, INC.
June
14, 2009
|
ARTICLE
I THE MERGER
|
1
|
|
|
1.1
|
The
Merger
|
1
|
|
1.2
|
Effective
Time
|
2
|
|
1.3
|
Closing
|
2
|
|
1.4
|
Directors
and Officers of the Surviving Corporation
|
2
|
|
1.5
|
Stockholders’
Meeting
|
2
|
|
ARTICLE
II CONVERSION OF SECURITIES
|
3
|
|
|
2.1
|
Conversion
of Capital Stock
|
3
|
|
2.2
|
Exchange
of Certificates
|
3
|
|
2.3
|
Dissenting
Shares
|
5
|
|
2.4
|
Company
Option Plans; Equity Based Awards
|
5
|
|
ARTICLE
III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
|
6
|
|
|
3.1
|
Corporate
Organization
|
6
|
|
3.2
|
Capitalization
|
7
|
|
3.3
|
Authority
|
8
|
|
3.4
|
Consents
and Approvals; No Violations
|
8
|
|
3.5
|
SEC
Reports and Financial Statements
|
9
|
|
3.6
|
Absence
of Certain Changes
|
9
|
|
3.7
|
No
Undisclosed Liabilities
|
10
|
|
3.8
|
Internal
Controls and Procedures
|
10
|
|
3.9
|
Legal
Proceedings
|
10
|
|
3.10
|
Compliance
with Applicable Law
|
11
|
|
3.11
|
Company
Information
|
11
|
|
3.12
|
Employee
Matters
|
11
|
|
3.13
|
Environmental
Matters
|
12
|
|
3.14
|
Takeover
Statutes
|
13
|
|
3.15
|
Properties
|
13
|
|
3.16
|
Tax
Returns and Tax Payments
|
13
|
|
3.17
|
Intellectual
Property
|
14
|
|
3.18
|
Identified
Agreements
|
14
|
- i
-
|
3.19
|
Insurance
|
14
|
|
3.20
|
Board
Recommendation
|
14
|
|
3.21
|
Opinion
of Financial Advisor
|
15
|
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ARTICLE
IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
|
15
|
|
|
4.1
|
Corporate
Organization
|
15
|
|
4.2
|
Authority
|
15
|
|
4.3
|
Consents
and Approvals; No Violation
|
15
|
|
4.4
|
Broker’s
Fees
|
16
|
|
4.5
|
Merger
Sub’s Operation
|
16
|
|
4.6
|
Parent
or Merger Sub Information
|
16
|
|
4.7
|
Merger
Consideration
|
16
|
|
4.8
|
Stock
Ownership
|
16
|
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ARTICLE
V COVENANTS
|
17
|
|
|
5.1
|
Conduct
of Businesses Prior to the Effective Time
|
17
|
|
5.2
|
No
Solicitation
|
18
|
|
5.3
|
Publicity
|
20
|
|
5.4
|
Notification
of Certain Matters
|
20
|
|
5.5
|
Access
to Information
|
20
|
|
5.6
|
Further
Assurances
|
21
|
|
5.7
|
Indemnification
|
22
|
|
5.8
|
Employee
Benefit Plans
|
23
|
|
5.9
|
Additional
Agreements
|
24
|
|
ARTICLE
VI CONDITIONS TO THE MERGER
|
24
|
|
|
6.1
|
Conditions
to Each Party’s Obligation To Effect the Merger
|
24
|
|
6.2
|
Conditions
to Obligations of Parent and Merger Sub to Effect the
Merger
|
24
|
|
6.3
|
Conditions
to Obligations of the Company to Effect the Merger
|
25
|
|
6.4
|
Frustration
of Closing Conditions
|
25
|
|
ARTICLE
VII TERMINATION
|
26
|
|
|
7.1
|
Termination
|
26
|
|
7.2
|
Effect
of Termination
|
27
|
|
7.3
|
Termination
Fee; Expenses
|
27
|
|
ARTICLE
VIII MISCELLANEOUS
|
28
|
|
- ii
-
|
8.1
|
Amendment
and Modification
|
28
|
|
8.2
|
Extension;
Waiver
|
28
|
|
8.3
|
Nonsurvival
of Representations and Warranties
|
28
|
|
8.4
|
Notices
|
28
|
|
8.5
|
Counterparts
|
29
|
|
8.6
|
Entire
Agreement; Third Party Beneficiaries
|
29
|
|
8.7
|
Severability
|
30
|
|
8.8
|
Governing
Law
|
30
|
|
8.9
|
Assignment
|
30
|
|
8.10
|
Headings;
Interpretation
|
30
|
|
8.11
|
Enforcement
|
30
|
- iii
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TABLE
OF DEFINED TERMS
|
DEFINED
TERM
|
PAGE
OR SECTION #
|
|
“Acquisition
Agreement”
|
5.2(b)
|
|
“Agreement”
|
1
|
|
“Cavalier
Homes, Inc.
|
1.1
|
|
“Certificate
of Merger”
|
1.2
|
|
“Certificates”
|
2.2(b)
|
|
“Closing
Date”
|
1.3
|
|
“Closing”
|
1.3
|
|
“Code”
|
2.2(e)
|
|
“Company”
|
1
|
|
“Company
Benefit Plans”
|
3.12(a)
|
|
“Company
Bylaws”
|
3.1
|
|
“Company
Charter”
|
3.1
|
|
“Company
Common Stock”
|
1
|
|
“Company
Disclosure Schedule”
|
3.2
|
|
“Company
Employees”
|
5.8
|
|
“Company
Material Adverse Effect”
|
3.1
|
|
“Company
Preferred Stock”
|
3.2
|
|
“Company
SEC Documents”
|
3.5
|
|
“Company
Stock Option Plans”
|
2.4(a)
|
|
“Company
Stock Options”
|
2.4(a)
|
|
“Company
Stockholder Approval”
|
3.3(a)
|
|
“DGCL”
|
1.1
|
|
“Dissenting
Shares”
|
2.3
|
|
“Effective
Time”
|
1.2
|
|
“Environmental
Laws”
|
3.13
|
|
“Equity
Based Awards”
|
2.4(b)
|
|
“Equity
Based Plans”
|
2.4(b)
|
|
“ERISA
Affiliate”
|
3.12(a)
|
|
“ERISA”
|
3.12(a)
|
|
“Exchange
Act”
|
3.4(a)
|
|
“Final
Order”
|
7.1(b)(i)
|
- iv
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|
DEFINED
TERM
|
PAGE
OR SECTION #
|
|
“Financial
Advisor”
|
1.5(a)(iii)
|
|
“GAAP”
|
3.1
|
|
“Governmental
Entity”
|
3.4(a)
|
|
“Indemnified
Liabilities”
|
5.7(a)
|
|
“Indemnified
Parties”
|
5.7(a)
|
|
“Liens”
|
3.2(b)
|
|
“Material
Adverse Effect”
|
3.1
|
|
“Merger
Consideration”
|
1
|
|
“Merger
Sub Common Stock”
|
2.1
|
|
“Merger
Sub”
|
1
|
|
“Merger”
|
1
|
|
“Parent”
|
1
|
|
“Paying
Agent”
|
2.2(a)
|
|
“Proxy
Statement”
|
1.5(a)(ii)
|
|
“Representatives”
|
5.5(c)
|
|
“SEC”
|
1.5(a)(ii)
|
|
“Secretary
of State”
|
1.2
|
|
“Securities
Act”
|
3.4(a)
|
|
“Shares”
|
1
|
|
“Special
Meeting”
|
1.5(a)(i)
|
|
“Subsidiary”
|
3.1
|
|
“Superior
Proposal”
|
5.2(e)(ii)
|
|
“Surviving
Corporation”
|
1.1
|
|
“Takeover
Proposal”
|
5.2(e)(i)
|
|
“Tax
Return”
|
3.16
|
|
“Taxes”
|
3.16
|
|
“Termination
Fee”
|
7.3
|
- v
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AGREEMENT
AND PLAN OF MERGER
AGREEMENT
AND PLAN OF MERGER (this “Agreement”), dated as of June 14, 2009, by and among
Southern Energy Homes, Inc., a Delaware corporation (“Parent”), T Merger Sub,
Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger
Sub”), and Cavalier Homes, Inc., a Delaware corporation (the
“Company”).
ARTICLE
I
1.1 The
Merger
Subject
to the terms and conditions of this Agreement and the provisions of the Delaware
General Corporation Law (the “DGCL”), at the Effective Time, the Company and
Merger Sub shall consummate the Merger, pursuant to which (a) Merger Sub shall
be merged with and into the Company and the separate corporate existence of
Merger Sub shall thereupon cease, (b) the Company shall be the successor or
surviving corporation in the Merger (the “Surviving Corporation”) under the name
“Cavalier Homes, Inc.” and shall continue to be governed by the laws of the
State of Delaware, and (c) the separate corporate existence of the Company with
all its rights, privileges, immunities, powers, franchises, liabilities and
obligations shall continue unaffected by the Merger. The certificate
of incorporation and bylaws of Merger Sub as in effect at the Effective Time
shall be the certificate of incorporation and bylaws of the Surviving
Corporation, provided that Article First of the certificate of incorporation of
the Surviving Corporation shall be amended to read in its entirety as
follows: “FIRST. The name of the Corporation is Cavalier
Homes, Inc.” The Merger shall have the effects set forth in the
DGCL.
- 1
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1.2 Effective Time
Parent,
Merger Sub, and the Company shall cause an appropriate Certificate of Merger
(the “Certificate of Merger”) to be executed and filed on the date of the
Closing (as defined in Section 1.3) (or on such other date as Parent and the
Company may agree) with the Secretary of State of the State of Delaware (the
“Secretary of State”) as provided in the DGCL. The Merger shall
become effective on the date on which the Certificate of Merger has been duly
filed with the Secretary of State or such later time as is agreed upon by the
parties and specified in the Certificate of Merger, and such time is hereinafter
referred to as the “Effective Time.”
1.3 Closing
The
closing of the Merger (the “Closing”) shall take place at 10:00 a.m. on the
first business day after satisfaction or waiver of all of the conditions set
forth in Article VI hereof (the “Closing Date”), at, or directed from, the
offices of Parent, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, unless another
date or place is agreed to in writing by the parties hereto.
The
directors and officers of Merger Sub immediately prior to the Effective Time
shall, from and after the Effective Time, be the directors and officers of the
Surviving Corporation until their successors shall have been duly elected or
appointed or qualified or until their earlier death, resignation or removal in
accordance with the Surviving Corporation’s certificate of incorporation and
bylaws.
(a) The
Company, acting through its Board of Directors, shall, in accordance with
applicable law:
(i) duly
call, give notice of, convene and hold a special meeting of its stockholders for
the purpose of considering and taking action upon this Agreement (the “Special
Meeting”) as soon as practicable following the date hereof;
(ii) prepare
and file with the United States Securities and Exchange Commission (the “SEC”),
as soon as reasonably practicable (but in no event later than ten business days
after the date hereof), a preliminary proxy statement relating to the Merger and
this Agreement and use its reasonable efforts (x) to obtain and furnish the
information required to be included by the federal securities laws (and the
rules and regulations thereunder) in the Proxy Statement (as hereinafter
defined) and, after consultation with Parent, to respond promptly to any
comments made by the SEC with respect to the preliminary proxy statement and, as
soon as practicable thereafter, to cause a definitive proxy statement (the
“Proxy Statement”) to be mailed to its stockholders and (y) to obtain the
necessary approvals of the Merger and this Agreement by its stockholders as soon
as practicable; and
(iii) include
in the Proxy Statement (1) the recommendation of the Board that stockholders of
the Company vote in favor of the approval of the Merger and the adoption of this
Agreement, unless such recommendation has been withdrawn, or as such
recommendation has been modified or amended, in each case in accordance with
Section 5.2, and (2) the opinion of Avondale Partners, LLC (the “Financial
Advisor”) described in Section 3.21.
- 2
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(b) Parent
shall provide the Company with the information concerning Parent and Merger Sub
required to be included in the Proxy Statement. Parent shall vote, or
cause to be voted, all of the Shares (if any) then owned by it, Merger Sub or
any of its other subsidiaries and affiliates in favor of the approval of the
Merger and the adoption of this Agreement.
ARTICLE
II
As of the
Effective Time, by virtue of the Merger and without any action on the part of
the holders of any shares of Company Common Stock or of the common stock, par
value $.0l per share, of Merger Sub (the “Merger Sub Common
Stock”):
(a) Merger
Sub Common Stock. Each issued and outstanding share
of Merger Sub Common Stock shall be converted into and become one
validly issued, fully paid and nonassessable share of common stock, par value
$.10 per share, of the Surviving Corporation.
(b) Cancellation
of Treasury Stock and Parent-Owned Stock. All shares of Company
Common Stock that are owned by the Company as treasury stock, all shares of
Company Common Stock owned by any subsidiary of the Company and any shares of
Company Common Stock owned by Parent, Merger Sub or any other wholly owned
subsidiary of Parent shall be canceled and retired and shall cease to exist and
no consideration shall be delivered in exchange therefor.
- 3
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profit
resulting from, or interest or income produced by, such investments will be
payable to Parent.
- 4
-
Notwithstanding
any provision of this Agreement to the contrary, if and to the extent required
by the DGCL, shares of Company Common Stock that are issued and outstanding
immediately prior to the Effective Time and that are held by holders of such
shares of Company Common Stock who have properly exercised appraisal rights with
respect thereto (the “Dissenting Shares”) in accordance with Section 262 of the
DGCL, shall not be exchangeable for the right to receive the Merger
Consideration, and holders of such Dissenting Shares shall be entitled to
receive payment of the appraised value of such Dissenting Shares in accordance
with the provisions of Section 262 of the DGCL unless and until such holders
fail to perfect or effectively withdraw or otherwise lose their rights to
appraisal and payment under the DGCL. If, after the Effective Time,
any such holder fails to perfect or effectively withdraws or loses such right,
such Dissenting Shares shall thereupon be treated as if they had been converted
into and had become exchangeable for, at the Effective Time, the right to
receive the Merger Consideration, without any interest
thereon. Notwithstanding anything to the contrary contained in this
Section 2.3, if this Agreement is terminated prior to the Effective Time, then
the right of any stockholder to be paid the fair value of such stockholder’s
Dissenting Shares pursuant to Section 262 of the DGCL shall
cease. The Company shall give Parent (i) prompt notice of any demands
received by the Company for appraisal of Dissenting Shares, withdrawals of such
demands and any other instruments served pursuant to the DGCL that are received
by the Company, and (ii) the opportunity to direct all negotiations and
proceedings with respect to demands for appraisal under the DGCL. The
Company shall not, except with the prior written consent of Parent, make any
payment with respect to any demands for appraisal or offer to settle or settle
any such demands.
(a) Immediately
prior to the Effective Time, all options to purchase shares of Company Common
Stock (the “Company Stock Options”) granted under the Cavalier Homes, Inc. 2005
Non-Employee Directors Stock Option Plan and the Cavalier Homes, Inc. 2005
Incentive Compensation Plan, each as amended through the date
hereof and any other plan, arrangement or agreement that provide for
the grant of Company Stock Options (the “Company Stock Option Plans”) shall be
cancelled by the Company and shall no longer be outstanding thereafter. In
consideration for such cancellation, the holder thereof shall thereupon be
entitled to receive, immediately prior to the Effective Time, a cash payment
from the Company in respect of such cancellation in an amount (if any) equal to
the product of (x) the number of shares of Company Common Stock subject to such
Company Stock Option (whether or not vested at the time of such cancellation)
and (y) the excess, if any, of the Merger Consideration over the
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exercise
price per share of Company Common Stock subject to such Company Stock Option,
reduced by any income or employment tax required to be withheld with respect to
such payment.
(b) Prior
to the Effective Time, Parent and the Company shall use their respective
reasonable efforts to establish a procedure to effect the surrender of the
Company Stock Options contemplated by this Section 2.4. Prior to the Effective
Time, the Board of Directors (or, if appropriate, any committee thereof), will
adopt appropriate resolutions and take such other actions necessary or
appropriate to provide that (i) the Company Stock Option Plans and all awards
issued thereunder (including, without limitation, the Company Stock Options)
will terminate immediately prior to the Effective Time and (ii) the provisions
in any other plan, program, arrangement or agreement providing for the issuance
or grant of any other interest in respect of the equity of the Company shall be
of no further force or effect and shall terminate as of immediately prior to the
Effective Time. Prior to the Closing, the Company shall take all necessary and
appropriate actions to give effect to, and accomplish, the transactions
contemplated by this Section 2.4 immediately prior to the Effective
Time.
ARTICLE
III
The
Company represents and warrants to Parent and Merger Sub as
follows:
Each of
the Company and its subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization and has the requisite corporate power and authority to own or lease
all of its properties and assets and to carry on its business as it is now being
conducted. Each of the Company and its subsidiaries is duly licensed
or qualified to do business in each jurisdiction in which the nature of the
business conducted by it or the character or location of the properties and
assets owned or leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed or qualified would not reasonably be
expected to have, individually or when aggregated with all other such failures,
a Material Adverse Effect (as defined below) on the Company (“Company Material
Adverse Effect”). The copies of the Certificate of Incorporation and
Bylaws of the Company (the “Company Charter” and “Company Bylaws”), and the
copies of the Certificate of Incorporation and Bylaws or similar organizational
documents of each Company subsidiary, in each case in the form delivered to
Merger Sub and Parent, are true, complete and correct copies of such documents
as in effect as of the date of this Agreement. As used in this
Agreement, the term “Material Adverse Effect” means, with respect to the
Company, on the one hand, or Parent, on the other hand, a material adverse
effect on (i) the ability of the Company, on the one hand, or Parent and Merger
Sub, on the other hand, to consummate the transactions contemplated hereby, or
(ii) the business, results of operations, properties, assets, liabilities or
financial condition of such party and its subsidiaries, taken as a whole, except
to the extent such material adverse effect under this clause (ii) results from
(A) any changes in general United States or global economic conditions, (B) any
changes in general economic conditions in industries in that such party and its
subsidiaries operate, which changes do not affect such party disproportionately
relative to other entities operating in such industries, or (C) any decline in
the market price of the common stock of such party. For purposes of
analyzing whether any state of facts, change, development, effect, occurrence or
condition has
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resulted
in a Company Material Adverse Effect, Parent and Merger Sub will not be deemed
to have knowledge of any state of facts, change, development, effect, occurrence
or condition relating to the Company or its subsidiaries unless it is disclosed
in the Company’s SEC Documents (as defined in Section 3.5 or the Company
Disclosure Schedule (as defined in Section 3.2(a). As used in
this Agreement, the word “subsidiary” when used with respect to any party means
any corporation, partnership or other organization, whether incorporated or
unincorporated, (i) of which at least a majority of the securities or other
interests having by their terms voting power to elect a majority of the board of
directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly beneficially owned
or controlled by such party or by any one or more of its subsidiaries, or by
such party and one or more of its subsidiaries, or (ii) that would be required
to be consolidated in such party’s financial statements under generally accepted
accounting principles as adopted (whether or not yet effective) in the United
States (“GAAP”).
3.2 Capitalization
(a) The
authorized capital stock of the Company consists of 50,000,000 shares of Company
Common Stock, par value $.10 per share, 300,000 shares of preferred stock (the
“Company Preferred Stock”), par value $0.01 per share, and 200,000 shares of
Series A Junior Participating Preferred Stock, par value $0.01 per
share. At the date hereof, there were (i) 17,598,830 shares of
Company Common Stock issued and outstanding, (ii) 477,998 shares of Company
Common Stock issuable upon the exercise of outstanding Company Stock Options
(whether or not presently exercisable) pursuant to the Option Plans, (iii) no
shares of Company Preferred Stock outstanding, and (iv) no shares of Series A
Junior Participating Preferred Stock outstanding. All of the issued
and outstanding shares of Company Stock have been, and any shares of Company
Common Stock issued upon the exercise of Company Stock Options will be, duly
authorized and validly issued and are or will be fully paid, nonassessable and
free of preemptive rights. Except as set forth above or in Section
3.2(a) of the Company’s disclosure schedule delivered to Parent concurrently
with the execution of this Agreement (the “Company Disclosure Schedule”), as of
the date hereof, there are not, and as of the Effective Time there will not be,
any outstanding securities, options, warrants, calls, rights, commitments,
agreements, derivative contracts, forward sale contracts or undertakings of any
kind to which the Company or any of its subsidiaries is a party, or by which the
Company or any of its subsidiaries is bound, obligating the Company or any of
its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of capital stock or other voting securities of the
Company or of any subsidiary of the Company or obligating the Company or any
subsidiary of the Company to issue, grant, extend or enter into any such
security, option, warrant, call, right, commitment, agreement, derivative
contract, forward sale contract or undertaking, or obligating the Company to
make any payment based on or resulting from the value or price of the Company
Common Stock or of any such security, option, warrant, call, right, commitment,
agreement, derivative contract, forward sale contract or
undertaking. There are no outstanding contractual obligations of the
Company or any of its subsidiaries to repurchase, redeem or otherwise acquire
any shares of capital stock of the Company or any of its
subsidiaries.
(b) Except
as disclosed in Section 3.2(b) of the Company disclosure Schedule, the Company
owns, directly or indirectly, all of the issued and outstanding shares of
capital stock or other ownership interests of each of its subsidiaries, free and
clear of any liens, charges,
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encumbrances,
adverse rights or claims and security interests whatsoever (“Liens”), and all of
such shares are duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights.
(c) Disclosed
in Section 3.2(c) of the Company Disclosure Schedule is a true and complete list
of all outstanding Company Stock Options, the exercise price therefor, and the
holder thereof.
3.3 Authority
(a) The
Company has all necessary corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated hereby, subject
to obtaining the approval of holders of a majority of the outstanding shares of
Company Common Stock (the “Company Stockholder Approval”) prior to the
consummation of the Merger in accordance with Section 251 of the
DGCL. The Company Stockholder Approval is the only vote of the
holders of any class or series of the Company’s securities necessary to approve
this Agreement, the Merger and the other transactions contemplated
hereby. The execution, delivery and performance by the Company of
this Agreement, and the consummation by it of the transactions contemplated
hereby, have been duly authorized by its Board of Directors and, except for
obtaining the Company Stockholder Approval as contemplated by Section 1.5 hereof
and as required by the DGCL, no other corporate action on the part of the
Company is necessary to authorize the execution and delivery by the Company of
this Agreement and the consummation by it of the transactions contemplated
hereby. This Agreement has been duly executed and delivered by the
Company and, assuming due and valid authorization, execution and delivery hereof
by the other parties thereto, constitutes a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except
that such enforceability (i) may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting or relating to the enforcement of
creditors’ rights generally and (ii) is subject to general principles of
equity.
(b) The
Board of Directors of the Company has approved and taken all corporate action
required to be taken by the Board of Directors for the consummation by the
Company of the transactions contemplated by this Agreement.
(a) Except
for (i) the consents and approvals set forth in Section 3.4(a) of the Company
Disclosure Schedule, (ii) the filing of the Certificate of Merger with the
Secretary of State pursuant to the DGCL, (iii) applicable requirements under the
Securities Act of 1933, as amended (the “Securities Act”) and Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and (iv) the Company
Stockholder Approval, no consents or approvals of, or filings, declarations or
registrations with, any federal, state or local court, administrative or
regulatory agency or commission or other governmental authority or
instrumentality, domestic or foreign (each a “Governmental Entity”), are
necessary for the consummation by the Company of the transactions contemplated
hereby.
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(b) Except
as set forth in Section 3.4(b) of the Company Disclosure Schedule, neither the
execution and delivery of this Agreement by the Company nor the consummation by
the Company of the transactions contemplated hereby, nor compliance by the
Company with any of the terms or provisions hereof, will (i) conflict with or
violate any provision of the Company Charter or Company Bylaws or any of the
similar organizational documents of any of its subsidiaries or (ii) assuming
that the authorizations, consents and approvals referred to in Section 3.4(a)
and the authorization hereof by the Company’s stockholders are duly obtained in
accordance with the DGCL, (x) violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction applicable to the
Company or any of its subsidiaries or any of their respective properties or
assets, or (y) violate, conflict with, result in the loss of any material
benefit under, constitute a default (or an event that, with notice or lapse of
time, or both, would constitute a default) under, result in the termination of
or a right of termination or cancellation under, accelerate the performance
required by, or result in the creation of any Lien upon any of the respective
properties or assets of the Company or any of its subsidiaries under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, deed of
trust, license, lease, agreement or other instrument or obligation to which the
Company or any of its subsidiaries is a party, or by which they or any of their
respective properties or assets may be bound or affected.
Since
December 31, 2005, the Company has filed or furnished all reports required to be
filed or furnished by it with the SEC pursuant to the Securities Act and the
Exchange Act, as such documents have been amended since the date of their filing
(collectively, the “Company SEC Documents”). The Company SEC Documents, as of
their respective filing dates, or if amended, as of the date of the last such
amendment, did not contain 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 were
made, not misleading. The audited consolidated financial statements and
unaudited consolidated interim financial statements of the Company included in
the Company SEC Documents fairly present in all material respects the
consolidated financial position of the Company and its consolidated
Subsidiaries, as at the respective dates thereof, and the consolidated results
of their operations and their consolidated cash flows for the respective periods
indicated (subject, in the case of the unaudited statements, to normal year-end
audit adjustments and other adjustments described therein, including in the
notes thereto) in conformity with GAAP (except, in the case of the unaudited
statements, as permitted by the SEC) applied on a consistent basis during the
periods involved (except as may be indicated therein or in the notes
thereto).
Since
December 31, 2008, neither the Company nor any of its subsidiaries has, to the
Company’s knowledge, incurred any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) required, if known, to be
reflected or reserved against on a consolidated balance sheet of the Company
prepared in accordance with GAAP except (i) as and to the extent set forth on
the audited balance sheet of the Company and its subsidiaries as of December 31,
2008 (including the notes thereto) included in the Company SEC Documents, (ii)
as incurred in connection with the transactions contemplated by this Agreement,
(iii) as incurred after December 31, 2008 in the ordinary course of business and
consistent with past practice, or (iv) as described in Section 3.6 of the
Company Disclosure Schedule. If, at any time prior to the
Effective Time, the Company shall obtain
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knowledge
of any material facts that would require supplementing or amending any of the
foregoing documents in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or to comply with
applicable laws, such amendment or supplement shall, if required by law, be
promptly disseminated to the stockholders of the Company with a copy of such
information immediately provided to Parent.
Except as
set forth in Schedule 3.7 of the company Disclosure Schedule, and for
liabilities and obligations (a) incurred in the ordinary course of business
since December 31, 2008, (b) disclosed in the Company SEC Documents, or (c)
incurred in connection with the transactions contemplated by this Agreement,
since December 31, 2008, neither the Company nor any of its Subsidiaries has
incurred any material liabilities or obligations that would be required to be
reflected or reserved against in a consolidated balance sheet of the Company and
its consolidated Subsidiaries prepared in accordance with GAAP, other than those
that would not have, individually or in the aggregate, a Company Material
Adverse Effect.
The
Company has established and maintains disclosure controls and procedures and
internal control over financial reporting (as such terms are defined in
paragraphs (e) and (f), respectively, of Rule 13a-15 under the Exchange Act) as
required by Rule 13a-15 under the Exchange Act. The Company’s disclosure
controls and procedures are reasonably designed to ensure that all material
information required to be disclosed by the Company in the reports that it files
or furnishes under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the SEC,
and that all such material information is accumulated and communicated to the
Company’s management as appropriate to allow timely decisions regarding required
disclosure and to make the certifications required pursuant to Section 906 of
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002. The Company’s management has conducted an
evaluation of the effectiveness of the Company’s internal control over financial
reporting in compliance with the requirements of temporary SEC rules for the
year ended December 31, 2008, and such evaluation concluded that such controls
were effective and the Company’s management has issued a report concluding that
the Company maintained effective internal control over financial reporting as of
December 31, 2008. Except as disclosed in Section 3.8 of the Company
Disclosure Schedule, the Company is unaware of any “significant
deficiencies,” as defined by the Public Company Accounting Oversight Board, in
the structure or application of its internal control over financial
reporting.
(a) Except
as set forth in Section 3.9(a) of the Company Disclosure Schedule, there is no
action, suit or proceeding, claim, arbitration or investigation pending or, to
the Company’s knowledge, threatened against the Company or any of its
subsidiaries, and neither the Company nor any or its subsidiaries is a party to
any action, suit or proceeding, arbitration or investigation.
(b) There
is no material injunction, order, judgment, decree or regulatory restriction
imposed upon the Company, any of its subsidiaries or the assets of the Company
or any of its subsidiaries.
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Except as
disclosed in Section 3.10 of the Company Disclosure Schedule, the Company and
each of its subsidiaries hold all material licenses, franchises, permits and
authorizations necessary for the lawful conduct of their respective businesses
as presently conducted and are in compliance with the terms thereof, except
where the failure to hold such license, franchise, permit or authorization or
such noncompliance could not, individually or when aggregated with all other
such failures or noncompliance, reasonably be expected to have a Company
Material Adverse Effect, and neither the Company nor any of its subsidiaries
knows of, or has received notice of, any material violations of any applicable
law, statute, order, rule, regulation, policy and/or guideline of any
Governmental Entity relating to the Company or any of its subsidiaries, which,
individually or in the aggregate, could reasonably be expected to have a Company
Material Adverse Effect.
3.11 Company
Information
The
information relating to the Company and its subsidiaries to be provided by or on
behalf of the Company for inclusion in the Proxy Statement, or in any other
document filed with any Governmental Entity or provided to the Company’s
stockholders in connection herewith, at the respective times filed with such
Governmental Entity and first published, sent or given to stockholders of the
Company and, in addition, in the case of the Proxy Statement, at the date it or
any amendment or supplement is mailed to holders of the shares of Company Common
Stock, at the time of the Special Meeting and at the Effective Time, will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances in which
they are made, not misleading (except that no representation is made by the
Company to such portions thereof that contain information supplied by or on
behalf of Parent or Merger Sub for inclusion therein). The Proxy
Statement will comply as to form in all material respects with the of applicable
requirements of the Exchange Act.
3.12 Employee
Matters
(a) Section
3.12(a) of the Company Disclosure Schedule contains a full and complete copy or
description of each employment, severance, bonus, change-in-control, profit
sharing, compensation, termination, stock option, stock appreciation right,
restricted stock, phantom stock, performance unit, pension, retirement, deferred
compensation, welfare or other employee benefit agreement, trust fund or other
arrangement and any union, guild or collective bargaining agreement maintained
or contributed to or required to be contributed to by the Company or any of its
ERISA Affiliates (as defined below), for the benefit or welfare of any director,
officer, employee or former employee of the Company or any of its ERISA
Affiliates (such plans and arrangements being collectively the “Company Benefit
Plans”). Each of the Company Benefit Plans is in material compliance
with all applicable laws including the Employee Retirement Income Security Act
of 1974, as amended (“ERISA”), and the Code. The Internal Revenue
Service has determined that the form of each Company Benefit Plan that is
intended to be a qualified plan under Section 401(a) of the Code complies with
such section and the Company is aware of no event occurring after the date of
such determination that would adversely affect such
determination. The liabilities accrued under each such plan are
reflected on the latest balance sheet of the Company included in the Recent
Public Reports in accordance with GAAP applied on a consistent
basis. No condition exists that is reasonably likely to subject the
Company or any of its subsidiaries to any direct or indirect liability under
Title IV of ERISA or to a civil penalty under Section 502(j) of ERISA or
liability under Section 4069 of ERISA or
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4975,
4976, or 4980B of the Code or other liability with respect to the Company
Benefit Plans that is not reflected on such balance sheet or that is reasonably
likely to result in any loss of a federal tax deduction under Section 280G of
the Code. There are no pending or to the Company’s knowledge,
threatened, claims (other than routine claims for benefits or immaterial claims)
by, on behalf of or against any of the Company Benefit Plans or any trusts
related thereto. “ERISA Affiliate” means, with respect to any person,
any trade or business, whether or not incorporated, that together with such
person would be deemed a “single employer” within the meaning of Section
4001(a)(15) of the ERISA.
(b) Neither
the Company nor any of its subsidiaries is a party to, or bound by, any
collective bargaining agreement or other contract or understanding with a labor
union or labor organization. There is no (i) unfair labor practice,
labor dispute or labor arbitration proceeding pending, (ii) to the knowledge of
the Company, any activity or proceeding by a labor union or representative
thereof to organize any employees of the Company or any of its subsidiaries or
(iii) lockout, strike, slowdown, work stoppage or, to the knowledge of the
Company, threat thereof by or with respect to such employees.
(c) The
consummation of the transactions contemplated by this Agreement shall not result
in any contractual or legal obligation on the part of the Company or any of its
subsidiaries to make any severance, sale award, “golden or tin parachute,”
change of control or other payment to any of their respective directors,
officers, or employees, or any other persons, except as listed and quantified in
Section 3.12(a) of the Company Disclosure Schedule.
Except as
set forth in Section 3.13 of the Company’s Disclosure Schedule, there are no
legal, administrative, arbitral or other proceedings, claims, actions, causes of
action, required environmental remediation activities or, to the knowledge of
the Company, governmental investigations of any nature seeking to impose, or
that reasonably could be expected to result in the imposition, on the Company or
any of its subsidiaries of any material liability or obligations arising under
common law standards relating to environmental protection, human health or
safety, or under any local, state, federal, national or supernational
environmental statute, regulation or ordinance, including the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
(collectively, “Environmental Laws”), pending or, to the knowledge of the
Company, threatened, against the Company or any of its
subsidiaries. Each of the Company and its subsidiaries is in
substantial compliance with all applicable Environmental Laws and has obtained
and is in compliance with all permits with respect thereto necessary for the
conduct of its business. To the knowledge of the Company, during or prior to the
period of (i) its or any of its subsidiaries’ ownership or operation of any of
their respective current properties, (ii) its or any of its subsidiaries’
participation in the management of any property, or (iii) its or any of its
subsidiaries’ holding of a security interest or other interest in any property,
there was no release or threatened release of hazardous, toxic, radioactive or
dangerous materials or other materials regulated under Environmental Laws in,
on, under or affecting any such property or operations. Neither the
Company nor any of its subsidiaries is subject to any agreement, order,
judgment, decree, letter or memorandum by or with any court, governmental
authority, regulatory agency or third party imposing any material liability or
obligations pursuant to or under any Environmental Law that would have or could
reasonably be expected to have a Company Material Adverse Effect.
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3.14 Takeover Statutes
The
Company has taken action such that no restrictive provision of any “moratorium,”
“control share,” “fair price,” “business combination,” “interested stockholder”
or other similar anti-takeover statute or regulation (including, without
limitation, Section 203 of the DGCL) or restrictive provision of any applicable
anti-takeover provision in the governing documents of the Company is, or at the
Effective Time will be, applicable to the Company, Parent, Merger Sub, the
shares of Company Common Stock (including shares of Company Common Stock
acquired in the Merger), the Merger or any other transaction contemplated by
this Agreement. The Company is not a party to any stockholder rights
agreement or otherwise subject to a stockholder rights plan or similar
arrangement.
3.15 Properties
Except as
disclosed in Section 3.15 of the Company Disclosure Schedule, each of the
Company and its subsidiaries (i) has good and indefeasible title to all the
properties and assets reflected on the latest audited balance sheet included in
the SEC Documents as being owned by the Company or one of its subsidiaries or
acquired after the date thereof which are, individually or in the aggregate,
material to the Company’s business on a consolidated basis (except properties
sold or otherwise disposed of since the date thereof in the ordinary course of
business), free and clear of (A) all Liens except (1) statutory liens securing
payments not yet due and (2) such imperfections or irregularities of title or
other Liens (other than real property mortgages or deeds of trust) as do not
materially affect the use of the properties or assets subject thereto or
affected thereby or otherwise materially impair business operations at such
properties, and (B) all real property mortgages and deeds of trust except such
secured indebtedness as is properly reflected in the latest audited balance
sheet included in the SEC Documents, and (ii) is the lessee of all leasehold
estates reflected in the latest audited financial statements included in the SEC
Documents or acquired after the date thereof that are material to its business
on a consolidated basis and is in possession of the properties purported to be
leased thereunder, and each such lease is valid without material default
thereunder by the lessee or, to the knowledge of the Company, the
lessor.
Except as
disclosed in Section 3.16 of the Company Disclosure Schedule, (a) the Company
and its subsidiaries have timely filed, or obtained extensions for filing and
then time timely filed, (or, as to subsidiaries, the Company has filed on behalf
of such subsidiaries) all Tax Returns (as defined below) required to be filed by
it, (b) the Company and its subsidiaries have paid (or, as to subsidiaries, the
Company has paid on behalf of such subsidiaries) all Taxes (as defined below)
shown to be due on such Tax Returns or has provided (or, as to subsidiaries, the
Company has made provision on behalf of such subsidiaries) in its most recent
financial statements contained in the Company SEC Documents, in
accordance with GAAP, an adequate reserve for all Taxes payable by the Company
and its subsidiaries for all taxable periods through the date of such financial
statements, for any Taxes that have not been paid, whether or not shown as being
due on any Tax Returns, (c) neither the Company nor any of its subsidiaries has
granted any request that remains in effect for waivers of the time to assess any
Taxes, (d) no claim for unpaid Taxes has been asserted against the Company or
any of its subsidiaries in writing by a Tax authority that, if resolved in a
manner unfavorable to the Company or any of its subsidiaries, as the case may
be, could reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect, (e) there are no Liens for Taxes upon the
assets of the Company or any subsidiary, except for Liens for Taxes not yet due
and payable or for Taxes that are being disputed in good faith by appropriate
proceedings and with respect to which adequate reserves have been taken, (f) no
audit of any Tax
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Return of
the Company or any of its subsidiaries is being conducted by a Tax authority,
(g) none of the Company or any of its subsidiaries has made an election under
Section 341(f) of the Code, and (h) neither the Company nor any of its
subsidiaries has any liability for Taxes of any person (other than the Company
and its subsidiaries) under Treasury Regulation Section 1.1502-6 (or any
comparable provision of state, local or foreign law). As used herein,
“Taxes” shall mean all taxes of any kind, including, without limitation, those
on or measured by or referred to as income, gross receipts, sales, use, ad
valorem, franchise, profits, license, value added, property or windfall profits
taxes, customs, duties or similar fees, assessments or charges of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts imposed by any governmental authority, domestic or
foreign. As used herein, “Tax Return” shall mean any return, report
or statement required to be filed with any governmental authority with respect
to Taxes.
Except as
set forth in Section 3.17 of the Company’s Disclosure Schedule, the Company or
its subsidiaries own, or are licensed or otherwise possess legally enforceable
rights to use all material patents, trademarks, trade names, service marks,
copyrights and any applications therefor, technology, know-how, trade secrets,
computer software programs or applications, domain names and tangible or
intangible proprietary information or materials that are used in the respective
businesses of the Company and its subsidiaries as currently
conducted. All patents, registered trademarks and service marks and
registered copyrights held by the Company or its subsidiaries are subsisting and
in force.
Other
than contracts or agreements between the Company and its subsidiaries or between
subsidiaries of the Company, Section 3.18 of the Company Disclosure Schedule
lists each of the contracts and agreements to which the Company or any of its
subsidiaries is a party as of the date hereof, that are (a) material contracts
or agreements between the Company and any of its affiliates, (b) contracts or
arrangements between the Company or any of its subsidiaries, on the one hand,
and any executive officer or director of the Company or any of its affiliates or
associates (as defined in the Securities Exchange Act of 1934, as amended), on
the other hand, (c) stockholder, voting trust or similar contracts or agreements
relating to the voting of Company Common Stock or other equity interests of the
Company or any of its subsidiaries, and (d) otherwise material to the Company
and its subsidiaries, taken as a whole.
3.19 Insurance
To the
knowledge of the Company, all insurance policies of any kind or nature owned by
or issued to the Company or any of its subsidiaries, including, without
limitation, policies for fire, life, theft, product liability, public liability,
property damage, other casualty, workers’ compensation, employee health and
welfare, title, property and liability, with respect to the Company’s business
or assets and properties are in full force and effect and are of a nature and
provide such coverage as is customarily carried by companies engaged in business
similar to the Company’s business.
3.20 Board
Recommendation
The Board
of Directors of the Company, at a meeting duly called and held, has (A)
unanimously approved this Agreement (including all terms and conditions set
forth herein) and the transactions contemplated hereby, including the Merger,
(B) determined that the Merger is advisable and that the terms of the Merger are
fair to, and in the
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best
interests of, the Company’s stockholders, and (C) subject to Section 5.2,
resolved to recommend that the Company’s stockholders approve and adopt this
Agreement and the Merger.
The
Financial Advisor has delivered to the Company’s Board of Directors its opinion
(in writing or to be confirmed in writing) to the effect that, as of the date
hereof and based upon and subject to the factors and assumptions set forth
therein, $2.75 per Share in cash to be received by the holders of the Shares
pursuant to the Merger is fair to such holders from a financial point of
view.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF
PARENT
AND MERGER SUB
Parent
and Merger Sub jointly and severally represent and warrant to the Company as
follows:
Each of
Parent and Merger Sub is a corporation duly organized, validly existing and in
good standing under the laws of its respective jurisdiction of incorporation and
has the requisite corporate power and authority to own or lease all of its
properties and assets and to carry on its business as it is now being
conducted.
4.2 Authority
Each of
Parent and Merger Sub has all necessary corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery and performance by Parent and Merger
Sub of this Agreement, and the consummation of the transactions contemplated
hereby, have been duly authorized and approved by their Boards of Directors and
by Parent as the sole stockholder of Merger Sub and no other corporate action on
the part of Parent or Merger Sub is necessary to authorize the execution and
delivery by Parent and Merger Sub of this Agreement and the consummation by them
of the transactions contemplated hereby. This Agreement has been duly
executed and delivered by Parent and Merger Sub, and, assuming due and valid
authorization, execution and delivery hereof by the Company, is a valid and
binding obligation of each of Parent and Merger Sub, enforceable against each of
them in accordance with its terms, except that such enforceability may be
limited by (a) bankruptcy, insolvency, moratorium or other similar laws
affecting or relating to the enforcement of creditors’ rights generally or (b)
general principles of equity.
(a) Except
for (i) the filing of the Certificate of Merger with the Secretary of State
pursuant to the DGCL, and (ii) applicable requirements under the Exchange Act,
no consents or approvals of, or filings, declarations or registrations with, any
Governmental Entity are necessary for the consummation by Parent and Merger Sub
of the transactions contemplated hereby.
(b) Neither
the execution and delivery of this Agreement by Parent or Merger Sub, nor the
consummation by Parent or Merger Sub of the transactions contemplated
hereby,
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nor
compliance by Parent or Merger Sub with any of the terms or provisions hereof,
will (i) conflict with or violate any provision of the Articles of Incorporation
or Bylaws of Parent or the Certificate of Incorporation or Bylaws of Merger Sub
or (ii) assuming that the authorizations, consents and approvals referred to in
Section 4.3(a) are obtained (A) violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction applicable to Parent,
Merger Sub or any of their respective properties or assets, or (B) violate,
conflict with, result in the loss of any material benefit under, constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, result in the termination of or a right of
termination or cancellation under, accelerate the performance required by, or
result in the creation of any Lien upon any of the properties or assets of
Parent or Merger Sub under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which Parent or Merger Sub is a party, or by
which they or any of their respective properties or assets may be bound or
affected.
4.4 Broker’s
Fees
Neither
Parent nor Merger Sub nor any of their respective officers or directors on
behalf of Parent or Merger Sub has employed any financial advisor, broker or
finder in a manner that would result in any liability of the Company for any
broker’s fees, commissions or finder’s fees in connection with any of the
transactions contemplated hereby or that would result in any reduction of the
consideration payable to the stockholders of the Company.
Merger
Sub was formed solely for the purpose of engaging in the transactions
contemplated hereby and has not engaged in any business activities or conducted
any operations other than in connection with the transactions contemplated
hereby.
The
information relating to Parent and its subsidiaries, including Merger Sub, to be
provided by or on behalf of Parent or Merger Sub to be contained in the Proxy
Statement, or in any other document filed with any Governmental Entity in
connection herewith, at the respective time filed with such Governmental Entity
and, in addition, in the case of the Proxy Statement, at the date it or any
amendment or supplement is mailed to holders of the Shares, at the time of the
Special Meeting and at the Effective Time, will not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances in which they are made, not
misleading.
Parent
and Merger Sub collectively have and will have at the Effective Time sufficient
funds to pay the Merger Consideration in cash for all outstanding shares of
Company Common Stock converted into cash pursuant to the Merger, to perform
Parent’s and Merger Sub’s obligations under this Agreement and to pay all fees
and expenses related to the transactions contemplated by this Agreement payable
by them.
4.8 Stock
Ownership
As of the
date hereof, neither Parent nor any of its subsidiaries beneficially owns any
shares of Company Common Stock.
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ARTICLE
V
Except as
expressly contemplated or permitted by this Agreement, or as required by
applicable law, rule or regulation, during the period from the date of this
Agreement to the Effective Time, unless Parent otherwise agrees in writing, the
Company shall, and shall cause its subsidiaries to, in all material respects,
conduct its business in the usual, regular and ordinary course consistent with
past practice and use all reasonable efforts to maintain and preserve intact its
business organization and the good will of those having business relationships
with it and retain the services of its present officers and key
employees. Without limiting the generality of the foregoing, and
except as set forth in Section 5.1 of the Company Disclosure Schedule, as
expressly contemplated or permitted by this Agreement, or as required by
applicable law, rule or regulation, during the period from the date of this
Agreement to the Effective Time, the Company shall not, and shall not permit any
of its subsidiaries to, without the prior written consent of Parent in each
instance:
(a) (i)
issue, sell, grant, dispose of, pledge or otherwise encumber, or authorize or
propose the issuance, sale, disposition or pledge or other encumbrance of (A)
any additional shares of its capital stock or any securities or rights
convertible into, exchangeable for, or evidencing the right to subscribe for any
shares of its capital stock, or any rights, warrants, option, calls, commitments
or any other agreements of any character to purchase or acquire any shares of
its capital stock or any securities or rights convertible into, exchangeable
for, or evidencing the right to subscribe for, any shares of capital stock of
the Company or any of its subsidiaries, or (B) any other securities in respect
of, in lieu of, or in substitution for, any shares of capital stock or options
of the Company or any of its subsidiaries outstanding on the date hereof, other
than the issuance of shares of Company Common Stock pursuant to the exercise of
Company Stock Options outstanding as of the date hereof; (ii) accelerate the
vesting of any Company Stock Options; (iii) redeem, purchase or otherwise
acquire, or propose to redeem, purchase or otherwise acquire, any of the
outstanding shares of capital stock of the Company or any of its subsidiaries;
or (iv) split, combine, subdivide or reclassify any shares of its capital stock
or declare, set aside for payment or pay any dividend, or make any other actual,
constructive or deemed distribution, in respect of any shares of its capital
stock or otherwise make any payments to its stockholders in their capacity as
such;
(b) other
than in the ordinary course of business consistent with past practice, incur any
indebtedness for borrowed money or guarantee any such indebtedness or make any
loans, advances or capital contributions to, or investments in, any other person
other than the Company or its direct or indirect wholly owned
subsidiaries;
(c) sell,
transfer, mortgage, encumber or otherwise dispose of any of its properties or
assets with a minimum value in excess of $100,000 to any individual, corporation
or other entity other than a direct or indirect wholly owned subsidiary of the
Company, or cancel, release or assign to any such person any indebtedness in
excess of $100,000 or any claims related thereto, in each case that is material
to the Company and its subsidiaries, taken as a
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whole,
except (i) in the ordinary course of business consistent with past practice, or
(ii) pursuant to contracts or agreements in force at the date of this
Agreement;
(d) increase
its inventory as computed on a GAAP basis, but excluding finished goods
inventory being serviced under the Floor Plan Servicing Agreement dated June 2,
2009, between the Company and Triad Financial Services, Inc., by more than
$500,000 over the amount stated on the Company's condensed consolidated balance
sheet (unaudited) as of March 28, 2009;
(e) increase
its accounts receivable, net of allowance for losses, by more than $500,000 over
the amount stated on the Company's condensed consolidated balance sheet
(unaudited) as of March 28, 2009;
(f) employ
or engage any employee, agent or consultant at a general manager or officer
level of responsibility;
(g) other
than in the ordinary course of business consistent with past practice, make any
acquisition or investment having a value in excess of $100,000 in a business
either by purchase of stock or securities, merger or consolidation,
contributions to capital, loans, advances, property transfers, or purchases of
any property or assets in excess of $100,000 of any other individual,
corporation or other entity other than a direct or indirect wholly owned
subsidiary of the Company;
(h) settle
or compromise for $50,000 or more any claim (including arbitration) or
litigation, or related series of claims or actions;
(i) increase
in any manner the compensation of any of its directors, officers or employees or
enter into, establish, amend or terminate any Company Benefit Plans, for or in
respect of, any stockholder, officer, director, other employee, agent,
consultant or affiliate other than (i) as required pursuant to the terms of
agreements in effect on the date of this Agreement, and (ii) increases in
salaries, wages and benefits of employees who are not directors or executive
officers of the Company made in the ordinary course of business and in a manner
consistent with past practice;
(j) amend
its charter, bylaws, or similar organizational documents;
(k) waive
or fail to enforce any provision of any confidentiality or standstill agreement
to which it is a party; or
(l) make
any commitment to take any of the actions prohibited by this Section
5.1.
5.2 No
Solicitation
(a) The
Company shall immediately cease any discussions or negotiations with any parties
that may be ongoing with respect to a Takeover Proposal (as hereinafter defined)
and shall seek to have returned to the Company any confidential information that
has been provided in any such discussions or negotiations. From the
date hereof, the Company shall
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not, nor
shall it permit any of its subsidiaries to, nor shall it authorize or permit any
of its officers, directors or employees or any affiliate, investment banker,
financial advisor, attorney, accountant or other representative retained by it
or any of its subsidiaries to, directly or indirectly, (i) solicit, initiate or
knowingly encourage (including by way of furnishing information that has not
been previously publicly disseminated), or take any other action designed to
facilitate, any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Takeover Proposal or (ii) participate in
any discussions or negotiations regarding any Takeover Proposal; provided,
however, that if, following the receipt of an unsolicited bona fide Takeover
Proposal, the Board of Directors of the Company determines that such Takeover
Proposal is a Superior Proposal, the Company may, in response to such Takeover
Proposal and subject to compliance with Section 5.2(c), (A) request information
from the party making such Takeover Proposal for the sole purpose of the Board
of Directors of the Company informing itself about the Takeover Proposal that
has been made and the party that made it, (B) furnish information with respect
to the Company to the party making such Takeover Proposal pursuant to a
customary confidentiality agreement, provided that (1) such confidentiality
agreement contains terms not less favorable to the Company than the
confidentiality agreement, dated May 4, 2009, between the Company and Parent,
and (2) the Company advises Parent of all such nonpublic information delivered
to such person concurrently with its delivery to the requesting party, and (C)
participate in negotiations with such party regarding such Takeover
Proposal.
(b) Nothing
contained in this Agreement shall prevent the Company or the Company’s Board of
Directors from complying with Rule 14d-9 and Rule 14e-2 under the Exchange Act
with respect to an Takeover Proposal, provided that such Rules will in no way
eliminate or modify the effect that any action pursuant to such Rules would
otherwise have under this Agreement.
(c) In
addition to the obligations of the Company set forth in subsection (a) of this
Section 5.2, the Company shall promptly (within two business days) advise Parent
orally and in writing of any Takeover Proposal, the material terms and
conditions of such Takeover Proposal and the identity of the person making such
Takeover Proposal and shall keep Parent appraised of all significant
developments that could reasonably be expected to culminate in the Board of
Directors of the Company withdrawing, modifying or amending its recommendation
of this Agreement, the Merger and the transactions contemplated by this
Agreement, or in exercising any of its other rights under Sections
5.2(a).
(d) Nothing
contained in this Section 5.2 or Section 5.3 shall prohibit the Company from
making any disclosure to the Company’s stockholders.
(e) For
purposes of this Agreement:
(i) “Takeover
Proposal” means any inquiry, proposal or offer from any person (other than
Parent and its subsidiaries, affiliates, and representatives) relating to any
direct or indirect acquisition or purchase of 15% or more of the assets of the
Company or any of its subsidiaries or 15% or more of any class of equity
securities of the Company or any of its subsidiaries, any tender offer or
exchange offer that if consummated would result in any person beneficially
owning 15% or more of any class of equity securities of the Company or any of
its
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subsidiaries,
or any merger, consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or similar transaction involving the
Company or any of its subsidiaries, other than the transactions contemplated by
this Agreement.
(ii) “Superior
Proposal” means a bona fide written Takeover Proposal which the Company’s Board
of Directors concludes in good faith to be more favorable from a financial point
of view to its stockholders than the Merger and the other transactions
contemplated hereby (1) after receiving the advice of its financial advisors,
(2) after taking into account the likelihood of consummation of the proposed
transaction on the terms set forth therein (as compared to, and with due regard
for, the terms herein) and (3) after taking into account all legal (with the
advice of outside counsel), financial (including the financing terms of any such
proposal), regulatory (including the advice of outside counsel regarding the
potential for regulatory approval of any such proposal) and other aspects of
such proposal and any other relevant factors permitted under applicable
law.
5.3 Publicity
The
initial press release with respect to the execution of this Agreement shall be a
joint press release reasonably acceptable to Parent and the
Company. Thereafter, so long as this Agreement is in effect, none of
the Company, Parent or Merger Sub, nor any of their respective affiliates shall
issue or cause the publication of any press release or other announcement with
respect to the Merger, this Agreement or the other transactions contemplated
hereby without the prior consultation of the other parties, except as may be
required by law or by any listing agreement with a national securities exchange
as determined in the good faith judgment of the party wanting to make such
release.
The
Company shall give prompt notice to Parent if any of the following occur after
the date of this Agreement: (i) receipt of any notice or other communication in
writing from any person alleging that the consent or approval of such third
party is or may be required in connection with the transactions contemplated by
this Agreement; (ii) receipt of any notice or other communication from any
Governmental Entity (or any securities market) in connection with the
transactions contemplated by this Agreement; or (iii) the occurrence of an event
that could or could be reasonably likely in the future to (A) have a Company
Material Adverse Effect or prevent or delay the consummation of the Merger or
(B) cause any condition to the Merger to be unsatisfied; provided, however, that
the delivery of any notice pursuant to this Section 5.4 shall not limit or
otherwise affect the remedies of Parent and Merger Sub available
hereunder.
(a) Upon
reasonable notice and subject to applicable laws relating to the exchange of
information, the Company shall, and shall cause each of its subsidiaries to,
afford to the Representatives (as defined in Section 5.5(c)) of the Parent,
during normal business hours during the period prior to the Effective Time,
reasonable access to all its properties, books, contracts, commitments and
records, and to its officers, employees, accountants, counsel and other
representatives and, during such period, the Company shall, and shall cause its
subsidiaries to, make available to Parent (i) a copy of each report and other
document made available to its stockholders during such period and (ii) all
other information concerning its business, properties and personnel as such
other party may reasonably request; provided, however, that such
access
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shall be
reasonably related to the transactions contemplated hereby and shall not
interfere unnecessarily with normal operations of the Company and shall not
include or be construed to include access to any information of the Company or
its subsidiaries which would directly or indirectly waive the attorney-client
privilege.
(b) No
investigation by any of the parties or their respective representatives shall
affect the representations, warranties, covenants or agreements of any other
party set forth herein.
(c) The
information provided pursuant to Section 5.5(a) shall be used solely for the
purpose of the transactions contemplated hereby, and unless and until the Merger
is consummated, such information shall be kept confidential by Parent and Merger
Sub, except that the information provided pursuant to Section 5.5(a) or portions
thereof may be disclosed to those of Parent’s and Merger Sub’s or their
affiliates’ directors, officers, employees, agents and advisors (collectively,
the “Representatives”) who (i) need to know such information for the purpose of
the transactions contemplated hereby, (ii) shall be advised by Parent or Merger
Sub, as the case may be, of this provision, and (iii) agree to hold the
information provided pursuant to Section 5.5(a) as
confidential. Parent and Merger Sub jointly agree to be responsible
for any breach of this Section 5.5 by any of their
Representatives. If this Agreement is terminated, Parent shall, and
shall cause Merger Sub and each of their Representatives to, return or destroy
(and certify destruction of) all information provided pursuant to Section
5.5(a).
(a) Subject
to the terms and conditions of this Agreement, each of Parent and the Company
shall, and shall cause its subsidiaries to, use all reasonable efforts (i) to
take, or cause to be taken, all actions necessary, proper or advisable to comply
promptly with all legal requirements that may be imposed on such party or its
subsidiaries with respect to the Merger and, subject to the conditions set forth
in Article VI hereof, to consummate the transactions contemplated by this
Agreement, including, without limitation, the Merger, as promptly as practicable
and (ii) to obtain (and to cooperate with the other party to obtain) any
consent, authorization, order or approval of, or any exemption by, any
Governmental Entity and any other third party that is required to be obtained by
the Company or Parent or any of their respective subsidiaries in connection with
the Merger and the other transactions contemplated by this Agreement, and to
comply with the terms and conditions of any such consent, authorization, order
or approval.
(b) Subject
to the terms and conditions of this Agreement, each of Parent and the Company
shall use all reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective, as soon as practicable after the date of this
Agreement, the transactions contemplated hereby, including, without limitation,
using all reasonable efforts to lift or rescind any injunction or restraining
order or other order adversely affecting the ability of the parties to
consummate the transactions contemplated hereby and using all reasonable efforts
to defend any litigation seeking to enjoin, prevent or delay the consummation of
the transactions contemplated hereby or seeking material damages.
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(c) Notwithstanding
subsections (a) and (b) of this section or any other provision of this Agreement
to the contrary, in no event shall Parent or Merger Sub be required to agree to
(i) any prohibition of or limitation on the ownership or operation by Parent,
Merger Sub, the Company or any of their respective subsidiaries or affiliates of
any portion of their respective businesses or assets, (ii) divest, hold separate
or otherwise dispose of any portion of its or their respective businesses or
assets, (iii) any limitation on the ability of Parent, Merger Sub, the Company
or any of their respective subsidiaries, as the case may be, to acquire or hold,
or exercise full rights of ownership of, the Company Common Stock and any
capital stock of any subsidiary of the Company, or (iv) any other limitation on
Parent’s, Merger Sub’s, the Company’s or any of their respective subsidiaries’
ability to effectively control their respective businesses or
operations.
5.7 Indemnification
(a) From
and after the Effective Time, Parent shall, and shall cause the Surviving
Corporation to, indemnify, defend and hold harmless each person who is now, or
has been at any time prior to the date of this Agreement or who becomes such
prior to the Effective Time, an officer or director of the Company or any of its
subsidiaries (the “Indemnified Parties”) against (i) any and all losses, claims,
damages, costs, expenses, fines, liabilities or judgments or amounts that are
paid in settlement with the approval of the indemnifying party (which approval
shall not be unreasonably withheld) of or in connection with any claim, action,
suit, proceeding or investigation based in whole or in part on or arising in
whole or in part out of the fact that such person is or was a director or
officer of the Company or any of its subsidiaries whether pertaining to any
action or omission existing or occurring at or prior to the Effective Time and
whether asserted or claimed prior to, or at or after, the Effective Time
(“Indemnified Liabilities”), and (ii) all Indemnified Liabilities based in whole
or in part on, or arising in whole or in part out of, or pertaining to this
Agreement or the transactions contemplated hereby; provided, however, that, in
the case of Merger Sub and the Surviving Corporation such indemnification shall
only be to the fullest extent a corporation is permitted under the DGCL, as
applicable, to indemnify its own directors and officers, and in the case of
Parent, such indemnification shall not be limited by the DGCL but such
indemnification shall not be applicable to any claims made against the
Indemnified Parties (A) if a judgment or other final adjudication established
that their acts or omissions were committed in bad faith or were the result of
active and deliberate dishonesty and were material to the cause of action so
deliberated or (B) arising out of, based upon or attributable to the gaining in
fact of any financial profit or other advantage to which they were not legally
entitled. Parent, Merger Sub, and the Surviving Corporation, as the
case may be, will pay all expenses of each Indemnified Party in advance of the
final disposition of any such action or proceeding to the fullest extent
permitted by law upon receipt of any undertaking contemplated by Section 145(e)
of the DGCL. Without limiting the foregoing, in the event any such
claim, action, suit, proceeding or investigation is brought against any
Indemnified Party (whether arising before or after the Effective Time), (i) the
Indemnified Parties may retain counsel satisfactory to them and Parent and
Merger Sub, (ii) Parent shall, or shall cause the Surviving Corporation to, pay
all reasonable fees and expenses of such counsel for the Indemnified Parties
promptly as statements therefor are received, and (iii) Parent shall, and shall
cause the Surviving Corporation to, use all reasonable efforts to assist in the
vigorous defense of any such matter, provided that none of Parent, Merger Sub or
the Surviving Corporation shall be liable for any settlement of any claim
effected without its written consent,
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which
consent, however, shall not be unreasonably withheld. Any Indemnified
Party wishing to claim indemnification under this Section 5.7, upon learning of
any such claim, action, suit, proceeding or investigation, shall notify Parent,
Merger Sub or the Surviving Corporation (but the failure to so notify an
indemnifying party shall not relieve it from any liability that it may have
under this Section 5.7 except to the extent such failure materially prejudices
such party), and shall deliver to Merger Sub and the Surviving Corporation the
undertaking contemplated by Section 145(e) of the DGCL. The
Indemnified Parties as a group may retain only one law firm to represent them
with respect to each such matter unless there is, under applicable standards of
professional conduct, a conflict on any significant issue between the positions
of any two or more Indemnified Parties.
For
purposes of all employee benefit plans (as defined in Section 3(3) of ERISA) and
other employment agreements, arrangements and policies of Parent under which an
employee’s benefits or eligibility to participate depends, in whole or in part,
on length of service, credit will be given to current employees of the Company
and its subsidiaries for service with the Company or any of its subsidiaries
prior to the Effective Time, provided that such crediting of service does not
result in duplication of benefits. Parent shall, and shall cause the
Surviving Corporation to, honor in accordance with their terms all employee
benefit plans (as defined in Section 3(3) of ERISA) and the other Company
Benefit Plans; provided, however, that Parent or the Surviving Corporation may
amend, modify or terminate any individual Company Benefit Plan in accordance
with its terms and applicable law (including obtaining the consent of the other
parties to and beneficiaries of such Company Benefit Plan to the extent required
thereunder); provided, further, that, for a period of one year, no such
amendment, modification or termination shall result in compensation and benefits
to the employees or former employees of the Company and its subsidiaries (the
“Company Employees”) that are less favorable, in the aggregate, than the
compensation and benefits that are provided to the Company Employees immediately
prior to the Effective Time. Notwithstanding the foregoing or
anything else in this Agreement to the contrary, the Surviving Corporation and
its subsidiaries shall not, after the Effective Time, provide (i) retiree
medical health insurance benefits except as may be required by law, or (ii) any
form of equity-based compensation,
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including,
without limitation, options to purchase shares of capital stock in the Company
or any of its subsidiaries. Nothing in this Section and nothing else
in this Agreement shall constitute any right of continued employment of, or to
confer any such right upon, any Company Employee after the Effective
Time.
In case
at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement or to vest the Surviving
Corporation with full title to all properties, assets, rights, approvals,
immunities and franchises of any of the parties to the Merger, the proper
officers and directors of each party to this Agreement and their respective
subsidiaries shall take all such necessary action as may be reasonably requested
by, and at the sole expense of, Parent.
ARTICLE
VI
The
respective obligation of each party to effect the Merger shall be subject to the
satisfaction on or prior to the Closing Date of each of the following
conditions:
The
obligations of Parent and Merger Sub to effect the Merger are subject to the
satisfaction on or prior to the Closing Date of the following conditions (which
may be waived in whole or in part by Parent):
(a) The
representations and warranties of the Company set forth in this Agreement that
are qualified by materiality shall be true and correct in all respects, and the
representations and warranties of the Company set forth in this Agreement that
are not so qualified shall be true and correct in all material respects, in each
case, as of the date of this Agreement and as of the Closing Date as though made
on or as of such date (or, in the case of representations and warranties that
address matters only as of a particular date, as of such date), and Parent and
Merger Sub shall have received a certificate to such effect signed on behalf of
the Company by its chief executive officer and chief financial
officer.
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(b) The
Company shall have performed or complied with, as applicable, all material
obligations, agreements and covenants required by this Agreement to be performed
or complied with by it (including without limitation the Company not having
entered into any definitive agreement or any agreement in principle with any
person with respect to a Takeover Proposal or similar business combination with
the Company in violation of Section 5.2 and receipt of the consents and
approvals set forth in Section 3.4(a) of the Company Disclosure Schedule), and
Parent and Merger Sub shall have received a certificate to such effect signed on
behalf of the Company by its chief executive officer and chief financial
officer.
(c) No
statute, rule, regulation, judgment, order or injunction shall have been
promulgated, entered, enforced, enacted, issued or applicable to the Merger by
any Governmental Entity that (1) prohibits, or imposes any material limitations
on, Parent’s ownership or operation of any portion of its or its subsidiaries’
businesses or assets, or Parent’s, Merger Sub’s or the Company’s ownership or
operation of any portion of the Company’s and its subsidiaries’ businesses and
assets, or (2) imposes material limitations on the ability of Parent effectively
to exercise full rights of ownership of the shares of the Surviving Corporation,
and no action or proceeding by any Governmental Entity shall be pending that
seeks any of the results described in clauses (1) and (2).
The
obligation of the Company to effect the Merger is subject to the satisfaction on
or prior to the Closing Date of the following conditions (which may be waived in
whole or in part by the Company):
(a) The
representations and warranties of Parent and Merger Sub set forth in this
Agreement that are qualified by materiality shall be true and correct in all
respects, and the representations and warranties of Parent and Merger Sub set
forth in this Agreement that are not so qualified shall be true and correct in
all material respects, in each case, as of the date of this Agreement and as of
the Closing Date as though made on or as of such date (or, in the case of
representations and warranties that address matters only as of a particular
date, as of such date), and the Company shall have received a certificate to
such effect signed on behalf of Parent by an officer of Parent.
(b) Parent
and Merger Sub shall have performed or complied with, as applicable, all
material obligations, agreements and covenants required by this Agreement to be
performed or complied with by each of them, and the Company shall have received
a certificate to such effect signed on behalf of Parent by an officer of
Parent.
(c) CMH
Manufacturing, Inc. shall have executed the Guaranty Agreement attached hereto
as Exhibit A.
None of
Parent, Merger Sub or the Company may rely on the failure of any condition to
its obligation to consummate the Merger set forth in Sections 6.1, 6.2, or 6.3,
as the case may be, to be satisfied if such failure was caused by such party’s
failure (subject, in the case of Parent and Merger Sub, to Section 5.6(c)) to
use its reasonable efforts to consummate the Merger and the other transactions
contemplated by this Agreement.
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ARTICLE
VII
7.1 Termination
Anything
herein or elsewhere to the contrary notwithstanding, this Agreement may be
terminated and the Merger contemplated herein may be abandoned at any time prior
to the Effective Time, whether before or after stockholder approval
thereof:
(a) By
the mutual consent of the Parent and the Company.
(b) By
either of the Company or Parent:
(i) if
any Governmental Entity shall have issued an order, decree or ruling or taken
any other action in each case permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement and such order,
decree, ruling or other action shall have become final and non-appealable (any
such order, decree, ruling or other action, a “Final Order”); provided that the
party seeking to terminate this Agreement shall have used all reasonable efforts
(subject, in the case of Parent and Merger Sub, to Section 5.6(c)) to challenge
such order, decree, ruling or other action; or
(ii) if
the Effective Time shall not have occurred on or before December 1, 2009,
provided, that, a party may not terminate the Agreement pursuant to this Section
7.1(b)(ii) if its failure to perform any of its obligations under this Agreement
results in the failure of the Effective Time to occur by such time;
(c) By
the Company:
(i) if
the required approval of the stockholders of the Company shall not have been
obtained by reason of the failure to obtain the required vote upon a vote held
at a duly held meeting of stockholders or at any adjournment
thereof;
(ii) if
concurrently it enters into a definitive agreement providing for a Superior
Proposal entered into in accordance with Section 5.2, provided that prior
thereto or simultaneously therewith the Company has paid the Termination Fee to
Parent in accordance with Section 7.3; or
(iii) if
the representations and warranties of Parent or Merger Sub set forth in this
Agreement that are qualified by materiality shall not be true and correct in any
respect, or if the representations and warranties of Parent and Merger Sub set
forth in this Agreement that are not so qualified shall not be true and correct
in all material respects, in each case as of the date of this Agreement and as
of the Closing Date as if made on such date (or, in the case of representations
and warranties that address matters only as of a particular date, as of such
date), or either Parent or Merger Sub shall have breached or failed in any
material respect to perform or comply with any material obligation, agreement or
covenant required by this Agreement to be performed or complied with by it,
which inaccuracy or breach cannot be cured or has not been cured within fifteen
(15) business days after the Company gives written notice of such inaccuracy or
breach to Parent.
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(d) By
Parent:
(i) if
the required approval of the stockholders of the Company shall not have been
obtained by reason of the failure to obtain the required vote upon a vote held
at a duly held meeting of stockholders or at any adjournment
thereof;
(ii) if
the Board of Directors of the Company or any committee thereof shall have
withdrawn or modified, or proposed publicly to withdraw or modify, in a manner
adverse to Parent its approval or recommendation of this Agreement, the Merger
and the other transactions contemplated hereby, or failed to reconfirm its
recommendation within three (3) business days after a written request to do so,
or approved or recommended, or proposed publicly to approve or recommend, any
Takeover Proposal, or the Board of Directors of the Company or any committee
thereof shall have resolved to take any of the foregoing actions;
or
(iii) if
the representations and warranties of the Company set forth in this Agreement
that are qualified by materiality shall not be true and correct in any respect,
or if the representations and warranties of the Company set forth in this
Agreement that are not so qualified shall not be true and correct in all
material respects, in each case as of the date of this Agreement and as of the
Closing Date as if made on such date (or, in the case of representations and
warranties that address matters only as of a particular date, as of such date),
or the Company shall have breached or failed in any material respect to perform
or comply with any material obligation, agreement or covenant required by this
Agreement to be performed or complied with by it, which inaccuracy or breach
cannot be cured or has not been cured within fifteen (15) business days after
Parent gives written notice of such inaccuracy or breach to the
Company.
In the
event of the termination of this Agreement as provided in Section 7.1, written
notice thereof shall forthwith be given to the other party or parties specifying
the provision hereof pursuant to which such termination is made, and this
Agreement (other than Sections 5.5(b), 5.5(c), 7.2, 7.3, 8.4, 8.6, 8.7, 8.8 and
8.9 hereof) shall forthwith become null and void, and there shall be no
liability on the part of the Parent or the Company, except as provided in
Section 7.3; provided, however, that nothing in this Section shall relieve any
party from liability for any breach (occurring prior to any such termination) of
any of the representations, warranties, covenants, or agreements set forth in
this Agreement.
Except as
provided in this Section 7.3, all fees and expenses incurred by the parties
hereto shall be borne solely by the party that has incurred such fees and
expenses. In the event that (i) a Takeover Proposal shall have been
made known to the Company or shall have been made directly to its stockholders
generally or any person shall have publicly announced an intention (whether or
not conditional) to make a Takeover Proposal and thereafter this Agreement is
terminated either (a) pursuant to Sections 7.1(b)(ii), 7.1(c)(i), or 7.1(d)(i)
or (b) pursuant to Section 7.1(b)(i), but only if, in the case of this clause
(b), the applicable Final Order is based on the existence of such Takeover
Proposal (whether or not modified after it was first made), and such Takeover
Proposal (whether or not modified after it was first made) is consummated within
one (1) year of such termination or (ii) this Agreement is terminated by Parent
pursuant to Section 7.1(d)(ii), or is terminated by the Company pursuant to
Section 7.1(c)(ii), then the Company shall pay to Parent on the date of such
termination, or in the case of subclause (i) upon such consummation, a
termination fee equal to three percent (3%) of
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the
Merger Consideration (the “Termination Fee”), payable by wire transfer of same
day funds. The Company acknowledges that the agreements contained in
this Section 7.3 are an integral part of the transactions contemplated by this
Agreement and that, without these agreements, Parent and Merger Sub would not
enter into this Agreement. The fee arrangement contemplated hereby
shall be paid pursuant to this Section 7.3 regardless of any alleged breach by
Parent of its obligations hereunder, provided, that no payment made by the
Company pursuant to this Section 7.3 shall operate or be construed as a waiver
by the Company of any breach of this Agreement by Parent or Merger Sub or of any
rights of the Company in respect thereof.
ARTICLE
VIII
Subject
to applicable law, this Agreement may be amended, modified and supplemented in
any and all respects, whether before or after any vote of the stockholders of
the Company contemplated hereby, by written agreement of the parties hereto at
any time prior to the Closing Date with respect to any of the terms contained
herein; provided, however, that no amendment, modification or supplement of this
Agreement shall be made following the approval of this Agreement by the
stockholders unless, to the extent required, approved by the
stockholders.
At any
time prior to the Effective Time, the parties may (a) extend the time for the
performance of any of the obligations or other acts of the other parties, (b)
waive any inaccuracies in the representations and warranties contained in this
Agreement or in any document delivered pursuant to this Agreement or (c) subject
to the proviso of Section 8.1, waive compliance with any of the agreements or
conditions contained in this Agreement. Any agreement on the part of
a party to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. The failure of
any party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of such rights.
None of
the representations and warranties in this Agreement or in any schedule,
instrument or other document delivered pursuant to this Agreement shall survive
the Effective Time.
8.4 Notices
All
notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally, telecopied (which is confirmed) or sent by
an overnight courier service, such as Federal Express, to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
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(a) if
to Parent or Merger Sub, to:
Southern Energy Company,
Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Executive
Vice President
and General Counsel
Telephone No.: (▇▇▇)
▇▇▇-▇▇▇▇
with a
copy to:
Cabaniss, Johnston, ▇▇▇▇▇▇▇, ▇▇▇▇▇
& ▇'▇▇▇▇ LLP
Suite 700
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇
Telephone No.: (▇▇▇)
▇▇▇-▇▇▇▇
(b) if
to the Company, to:
Cavalier Homes, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇, General
Counsel
Telephone No.: (▇▇▇)
▇▇▇-▇▇▇▇
with a
copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Boult ▇▇▇▇▇▇▇▇
LLP
One Federal Place, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇
Telephone No.: (▇▇▇)
▇▇▇-▇▇▇▇
8.5 Counterparts
This
Agreement may be executed in two or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when two or
more counterparts have been signed by each of the parties and delivered to the
other parties, it being understood that all parties need not sign the same
counterpart.
This
Agreement (including the Exhibits hereto and the documents and the instruments
referred to herein): (a) constitutes the entire agreement and supersedes all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof, and (b) except as provided in Section
5.7, is not intended to confer upon any person other than the parties hereto any
rights or remedies hereunder. Section 5.7 is intended for the benefit
of, and shall be enforceable by, the Indemnified Parties.
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8.7 Severability
If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void, unenforceable or
against its regulatory policy, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated, so long as the economic
and legal substance of the transactions contemplated hereby, taken as a whole,
are not affected in a manner materially adverse to any party
hereto.
8.8 Governing Law
This
Agreement shall be governed and construed in accordance with the laws of the
State of Delaware without giving effect to the principles of conflicts of law
thereof or of any other jurisdiction.
8.9 Assignment
Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other parties, except that
Merger Sub may assign, in its sole discretion, any or all of its rights,
interests and obligations hereunder to Parent or to any direct or indirect
wholly owned subsidiary of Parent. Subject to the preceding sentence,
this Agreement shall be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.
The
descriptive headings used herein are inserted for convenience of reference only
and are not intended to be part of or to affect the meaning or interpretation of
this Agreement. “Include,” “includes,” and “including” shall be
deemed to be followed by “without limitation” whether or not they are in fact
followed by such words or words of like import. “Knowledge” and
“known” means the actual knowledge after reasonable inquiry of the executive
officers of the Company or Parent, as the case may be.
8.11 Enforcement
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 State of Delaware or of the United States
located in the State of Delaware in the event any dispute arises out of this
Agreement or any of the transactions contemplated by this Agreement, and each
party will not attempt to deny or defeat personal jurisdiction or venue in any
such court by motion or other request for leave from any such
court.
|
Southern
Energy Homes, Inc.
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
|
|
|
Name: ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇
Title: President
|
||
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|
T
Merger Sub, Inc.
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
|
|
|
Name: ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇
Title: President
|
||
|
Cavalier
Homes, Inc.
|
||
|
By:
|
/s/
▇▇▇▇▇ ▇▇▇▇▇▇
|
|
|
Name: ▇▇▇▇▇
▇▇▇▇▇▇
Title: President
and Chief Executive
Officer
|
||
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