EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of July
28, 2003 is made by and between JANUS HOTELS AND RESORTS, INC., a Delaware
corporation (the "Company"), and Janus Acquisition, Inc., a Delaware corporation
(the "Purchaser").
BACKGROUND
The Board of Directors of each of the Company and the Purchaser deem it
advisable and in the best interests of their respective companies and
stockholders to consummate the merger of the Company with and into the
Purchaser, upon the terms and subject to the conditions set forth herein (the
"Merger"), and have adopted resolutions in accordance with Section 251 of the
General Corporation Law of the State of Delaware (the "DGCL"), adopting and
approving this Agreement, the Merger and the other transactions contemplated
herein.
NOW THEREFORE, in consideration of the mutual agreements contained in
this agreement, and for other good and valuable consideration, the value,
receipt and sufficiency of which are acknowledged, the parties agree as follows:
ARTICLE I
THE MERGER
Section 1.1. The Merger
Subject to the terms and conditions of this Agreement, at the Effective Time (as
defined in Section 1.3) the Company will be merged with and into the Purchaser
in accordance with the provisions of the DGCL. Following the Merger, the
Purchaser will continue as the surviving corporation (the "Surviving
Corporation") and the separate corporate existence of the Company will cease.
The Purchaser and the Company are sometimes referred to collectively as the
"Constituent Corporations."
Section 1.2 The Closing
Unless this Agreement has been terminated pursuant to Section 7.1, the closing
of the transactions contemplated by this Agreement (the "Closing") will take
place at 10:00 a.m., local time, on a date to be specified by the parties that
is no later than the third business day following satisfaction or waiver of the
conditions set forth in Article VI (the "Closing Date"), at the offices of
Xxxxxxxx & Shohl LLP, 000 X. Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000, unless
another date, time or place is agreed to in writing by the parties.
Section 1.3 Effective Time
Upon the terms and subject to the conditions of this Agreement, on the Closing
Date (or on such other date as the parties may agree) the Purchaser will file
with the Delaware Secretary of State the appropriate certificate of merger (the
"Certificate of Merger") and make all other fillings or
recordings required by the DGCL to consummate the Merger. The Merger will be
consummated on the later of the date on which the Certificates of Merger have
been filed with the Delaware Secretary of State or such time as is agreed upon
by the parties and specified in such Certificates of Merger. The time the Merger
becomes effective in accordance with the DGCL is referred to in this Agreement
as the "Effective Time."
Section 1.4 Effects of the Merger
The Merger will have the effects set forth in this Agreement and the DGCL.
Without limiting the generality of the foregoing, as of the Effective Time, the
Surviving Corporation will succeed to all the properties, rights, privileges,
powers, franchises and assets of the Constituent Corporations, and all debts,
liabilities and duties of the Constituent Corporations will become debts,
liabilities and duties of the Surviving Corporation.
Section 1.5 Organizational Documents
At the Effective Time, the certificate of incorporation and bylaws of the
Purchaser (as in effect immediately prior to the Effective Time), will become
the certificate of incorporation and bylaws of the Surviving Corporation until
thereafter amended in accordance with their respective terms and the DGCL.
Section 1.6 Directors and Officers
The directors and the officers of the Purchaser at the Effective Time will be
the initial directors and officers of the Surviving Corporation and will hold
office from the Effective Time in accordance with the certificate of
incorporation and bylaws of the Surviving Corporation until their respective
successors are duly elected or appointed and commence serving.
Section 1.7 Conversion of Shares
As of the Effective Time, by virtue of the Merger and without any action on the
part of the Company or the Purchaser or their respective stockholders:
(a) each share of the Company's common stock, par value $0.01 per
share, issued and outstanding immediately prior to the
Effective Time (the "Shares"), other than Shares owned by the
Purchaser that are to be canceled pursuant to (b), below, and
Dissenting Shares (as defined in (c) below) will be converted
into the right to receive, upon the surrender of the
certificate formerly representing such Share in accordance
with this Agreement, $.65 in cash, without interest (the
"Merger Consideration");
(b) each Share owned immediately prior to the Effective Time by
the Purchaser will be canceled and extinguished; and
(c) notwithstanding anything in this Agreement to the contrary,
Shares outstanding immediately prior to the Effective Time and
held by a holder who has not voted in favor of the Merger or
consented thereto in writing and who has delivered a
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written demand in the manner provided by Section 262 of the
DGCL and who, as of the Effective Time, shall not have
effectively withdrawn or lost such right to relief as a
dissenting stockholder ("Dissenting Shares"), will not be
converted into a right to receive the Merger Consideration. To
the extent permitted by Section 262 of the DGCL, the
Dissenting Shares shall not entitle the holder thereof to vote
such stock for any purpose or to receive the payment of any
dividend, or distribution. All payments with respect to the
Dissenting Shares shall be made in accordance with Section 262
of the DGCL.
(d) At the Effective Time, each issued and outstanding share of
Series B preferred stock, par value $0.01 per share, of the
Company will become one issued and outstanding share of
non-voting Common Stock, par value $0.01 per share, of the
Purchaser.
Section 1.8 Purchaser Common Stock
Each share of common stock, par value $0.01 per share, of the Purchaser
outstanding immediately prior to the Effective Time will be unaffected by the
Merger.
Section 1.9 Tax Effect
The parties intend that the transactions contemplated by this Agreement
constitute a reorganization described in Section 368(a)(1)(A) of the Internal
Revenue Code of 1986, as amended.
ARTICLE II
PAYMENT
Section 2.1 Surrender of Certificates
From and after the Effective Time, each holder (except for Purchaser) of a
certificate that immediately prior to the Effective Time represented an
outstanding Share (a "Certificate") will be entitled to receive in exchange
therefor, upon surrender thereof to the Exchange Agent (as defined in Section
2.2), the Merger Consideration into which the Shares evidenced by such
Certificate were converted pursuant to the Merger. No interest will be payable
on the Merger Consideration to be paid to any holder of a Certificate
irrespective of the time at which such Certificate is surrendered for exchange.
Section 2.2 Exchange Agent; Certificate Surrender Procedures
(a) On or prior to the Effective Time, the Purchaser and the
Company will designate (and enter into an agreement with) an
institution or trust company to act as exchange agent for the
Merger Consideration (the "Exchange Agent"). As soon as
reasonably practicable after the Effective Time, the Surviving
Corporation will deposit with the Exchange Agent, for the
benefit of the holders of Shares, the aggregate Merger
Consideration required to be paid hereunder. Pending payment
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of such funds to the holders of Certificates, the Merger
Consideration will be held and may be invested by the Exchange
Agent as the Surviving Corporation directs (so long as such
directions do not impair the rights of holders of Shares) in
direct obligations of the United States for which the full
faith and credit of the United States is pledged to provide
for the payment of principal and interest, or commercial paper
of the highest quality by Xxxxx'x Investors Services, Inc. or
Standard & Poor's Corporation. Any net profit resulting from,
or interest or income produced by, such investments will be
payable to the Surviving Corporation or its designee, in the
Surviving Corporation's sole discretion. The Purchaser will
promptly replace any funds lost through any investment made
pursuant to this section. The Exchange Agent will, pursuant to
irrevocable instructions, deliver to each holder of Shares
under and in accordance with (b) below, the Merger
Consideration payable to each such holder. The Merger
Consideration deposited with the Exchange Agent will not be
used for any purpose other than as set forth in this
Agreement.
(b) As soon as reasonably practicable after the Effective Time,
the Surviving Corporation will instruct the Exchange Agent to
mail to each record holder of a Certificate (i) a letter of
transmittal (which will specify that delivery will be
effected, and risk of loss and title to such Certificates will
pass, only upon delivery of Certificates to the Exchange
Agent, and will be in such form and have such other provisions
as the Surviving Corporation will reasonably specify) and (ii)
instructions for use in effecting the surrender of
Certificates for the Merger Consideration. Upon the surrender
to the Exchange Agent of such Certificates together with a
duly executed and completed letter of transmittal and all
other documents and other materials required by the Exchange
Agent to be delivered in connection therewith, the holder will
be entitled to receive the Merger Consideration into which the
Certificates so surrendered have been converted in accordance
with the provisions of this Agreement. Until so surrendered,
each outstanding Certificate will be deemed from and after the
Effective Time, for all corporate purposes, to evidence the
right to receive the Merger Consideration into which the
Shares represented by such Certificate have been converted in
accordance with the provisions of this Agreement.
Section 2.3 Transfer Books
The stock transfer books of the Company will be closed at the Effective Time,
and no transfer of any Shares will thereafter be recorded on any of the stock
transfer books. In the event of a transfer of ownership of any Shares prior to
the Effective Time that is not registered in the stock transfer records of the
Company at the Effective Time, the Merger Consideration into which such Shares
have been converted in the Merger will be paid to the transferee in accordance
with the provisions of Section 2.2 only if the Certificate is surrendered as
provided in Section 2.1 and accompanied by all documents required to evidence
and effect such transfer (including evidence of payment of any applicable stock
transfer taxes).
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Section 2.4 Termination of Funds
Any portion of the Merger Consideration that remains undistributed one hundred
eighty (180) days after the Effective Time will be delivered to the Surviving
Corporation upon demand, and each holder of Shares who has not previously
surrendered Certificates in accordance with the provisions of this Article II
will thereafter look only to the Surviving Corporation for satisfaction of any
claims for the Merger Consideration such holder may have. Notwithstanding the
foregoing, neither the Purchaser nor the Surviving Corporation will be liable to
any former holder of Shares for any portion of the Merger Consideration
delivered to any public official pursuant to any applicable abandoned property,
escheat or similar Law.
Section 2.5 Lost Certificates
If any Certificate has been lost, stolen or destroyed, upon the making of an
affidavit (in form and substance reasonably acceptable to the Exchange Agent and
the Surviving Corporation) of that fact by the person making such a claim, and,
if required by the Surviving Corporation, the posting by such person of a bond
in such reasonable amount as the Surviving Corporation may direct as indemnity
against any claim that may be made against or with respect to such Certificate,
and after fulfillment of any other conditions required by the Exchange Agent or
the Surviving Corporation, the Exchange Agent will deliver in exchange for such
lost, stolen or destroyed Certificate the Merger Consideration pursuant to
Section 2.2.
Section 2.6 No Rights as Stockholder
From and after the Effective Time, the holders of Certificates will cease to
have any rights as stockholders of the Surviving Corporation, except as
otherwise expressly provided in this Agreement or by applicable Laws, and the
Surviving Corporation will be entitled to treat each Certificate that has not
yet been surrendered for exchange solely as evidence of the right to receive the
Merger Consideration into which the Shares evidenced by such Certificate have
been converted pursuant to the Merger.
Section 2.7 Withholding
The Surviving Corporation will be entitled to deduct and withhold from the
Merger Consideration otherwise payable to any former holder of Shares all
amounts required by Law to be deducted or withheld therefrom. To the extent that
amounts are so withheld by the Surviving Corporation, such withheld amounts will
be treated for all purposes of this Agreement as having been paid to the holder
of the Shares in respect of which such deduction and withholding was made by the
Purchaser.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as disclosed in the disclosure schedules of the Company (the
"Disclosure Schedules") or the SEC Documents (as defined in Section 3.6), the
Company represents and warrants to the Purchaser as follows:
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Section 3.1 Corporate Existence and Power
The Company is a corporation duly organized, validly existing and in good
standing under the Laws of Delaware, and has all requisite corporate power and
authority to own, lease and operate its properties and assets and to carry on
its businesses as presently being conducted. The Company is duly qualified or
licensed to conduct business as a foreign corporation in each jurisdiction where
such qualification or licensing is necessary, except where the failure to be so
qualified would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect (as defined below). For purposes of this
Agreement, the term "Material Adverse Effect" means any change, effect,
occurrence or state of facts that is materially adverse to the business,
financial condition, operations or results of operations or prospects of the
Company; provided, however, that the following are excluded from the definition
of "Material Adverse Effect" and from the determination of whether such a
Material Adverse Effect has occurred: (i) any change, effect or occurrence that
is generally applicable to the hotel and/or the hospitality industry or the
economy in general; or (ii) changes in Laws (for purposes of this Agreement
"Laws" is defined as each federal, state and local law, statute, rule,
regulation, ordinance, permit, order or writ to which the Company or any of its
assets or properties is subject) (including common law, rules and regulations or
the interpretation thereof) or applicable accounting regulations and principles.
Section 3.2 Corporate Authorization; Approvals
(a) The execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the
transactions contemplated hereby are within the Company's
corporate powers and, except for the Stockholder Approval (as
defined in (c) below), have been duly authorized by all
necessary corporate action. Assuming that this Agreement
constitutes the valid and binding obligation of the Purchaser,
this Agreement constitutes a valid and binding agreement of
the Company, enforceable in accordance with its terms (except
as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer
and similar Laws of general applicability relating to or
affecting creditors' rights, or by general equity principles,
including principles of commercial reasonableness, good faith
and fair dealing).
(b) The Company's Board of Directors, or an appropriate committee
thereof, has taken (or will take prior to the Merger) all
action necessary so that the exemption contemplated by Rule
16b-3(e) promulgated pursuant to the Securities Exchange Act
of 1934, as amended (together with the rules and regulations
promulgated thereunder, the "Exchange Act") is applicable to
the disposition of Shares, options to acquire Shares and
appreciation rights based on the Shares in connection with the
Merger by all directors and/or officers of the Company.
(c) The affirmative vote of the holders of a majority of the
outstanding Shares on the applicable record date (the
"Stockholder Approval") is the only vote of the holders of any
class or series of the Company's capital stock necessary to
approve the Merger and the consummation of the transactions
contemplated hereby.
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Section 3.3 Governmental Authorization
The execution, delivery and performance by the Company of this Agreement and the
consummation by the Company of the transactions contemplated hereby do not
require any filing or registration with, notification to, or authorization,
consent or approval of, any federal, state or local governmental authority,
court, administrative or regulatory agency or commission (each a "Governmental
Entity"), other than: (a) the filing of (i) the Certificates of Merger with the
Delaware Secretary of State in accordance with the DGCL and (ii) appropriate
documents with the relevant authorities of other states or jurisdictions in
which the Company is qualified to do business; (b) compliance with any
applicable requirements of the Securities Act of 1933, as amended (together with
the rules and regulations promulgated thereunder, the "Securities Act"), and the
Exchange Act; (c) such actions as may be required under any applicable state
securities or blue sky Laws; and (d) such other actions or filings that, if not
obtained or made, would not, individually or in the aggregate, reasonably be
expected to have either a Material Adverse Effect, or to prevent or materially
impair the ability of the Company to consummate the transactions contemplated by
this Agreement.
Section 3.4 Non-Contravention
The execution, delivery and performance by the Company of this Agreement and the
consummation by the Company of the transactions contemplated hereby do not
contravene or conflict with the Company's certificate of incorporation or
bylaws.
Section 3.5 Capitalization
(a) The authorized capital stock of the Company consists of
15,000,000 Shares and 5,000,000 shares of Series B Preferred
Stock (the "Preferred Shares"). As of the close of business on
July 25, 2003 (i) 5,564,005 Shares were issued and
outstanding; and (ii) 3,100 Preferred Shares were issued and
outstanding. As of the close of business on July 25, 2003,
Options to acquire an aggregate of 110,000 Shares are
outstanding under the option plans maintained by the Company.
Stock Appreciation Rights with respect to 20,000 Shares have
been issued by the Company. All outstanding shares of the
capital stock of the Company have been duly authorized and
validly issued, and are fully paid, non-assessable and free of
preemptive rights.
(b) Except as described above, as of the date hereof there are no
outstanding (i) shares of capital stock or other voting
securities of the Company; (ii) securities of the Company
convertible into or exchangeable for shares of capital stock
or voting securities of the Company; or (iii) options,
warrants or other rights to acquire from the Company, any
capital stock, voting securities or securities convertible
into or exchangeable for capital stock or voting securities of
the Company. There are no outstanding obligations of the
Company to repurchase, redeem or otherwise acquire any Shares.
Section 3.6 SEC Documents
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The Company has filed all material forms, reports and documents required to be
filed by it with the Securities and Exchange Commission ("SEC") prior to the
date of this Agreement (together with the amendments and supplements to such
filings, the "SEC Documents"). Each SEC Document, as of its filing date (or if
amended, as of the date of its last amendment) complied as to form in all
material respects with the applicable requirements of the Securities Act and the
Exchange Act, as the case may be. No SEC Document filed pursuant to the Exchange
Act or the Securities Act, as of its filing date or effective date, as
applicable (or if amended or supplemented, as of the filing date or effective
date, as applicable, of its last amendment or supplement), contained any untrue
statement of a material fact or omitted to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
Section 3.7 Financial Statements; Liabilities
(a) Each of the balance sheets included in the SEC Documents
fairly presents in all material respects the financial
position of the Company as of the respective dates thereof,
and the other related consolidated financial statements
(including the notes thereto) included therein fairly present
in all material respects the results of operations and cash
flows of the Company for the respective periods or as of the
respective dates set forth therein (collectively, the
"Financial Statements"). As of the respective filing date for
the applicable SEC Document in which it was included, each of
the Financial Statements (including the notes thereto)
complied in all material respects with the then-applicable
accounting requirements and the published rules and
regulations of the SEC with respect thereto, and was prepared
in accordance with accounting principles generally accepted in
the United States ("GAAP") applied on a consistent basis
during the periods or as of the respective dates involved,
except as otherwise noted therein and subject, in the case of
unaudited interim financial statements, to normal year-end
adjustments.
(b) There are no material liabilities or obligations of the
Company of any kind whatsoever, whether accrued or unaccrued,
absolute or contingent, liquidated or unliquidated, or due or
to become due, in each case, other than liabilities or
obligations referenced (whether by value or otherwise) or
reflected in the SEC Documents, the Financial Statements or
disclosed in the notes thereto (i) incurred since December 31,
2002 in the ordinary course of business; (ii) under this
Agreement or in connection with the transactions contemplated
hereby; (iii) of the Company under the agreements, material
contracts ("Contracts"), leases, or licenses to which they are
parties; and (iv) which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
Section 3.8 Information to Be Supplied
The information to be supplied by the Company expressly for inclusion or
incorporation by reference in the Proxy Statement (as such term is defined in
Section 5.4) will comply with the applicable provisions of Section 5.4. The
Proxy Statement will (with respect to the Company) comply as to form in all
material respects with the applicable requirements of the Securities Act and the
Exchange Act. Notwithstanding the foregoing, the Company makes no
representations
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or warranties with respect to any information supplied by, or related to, the
Purchaser or any of its Affiliates (as such term is defined in Rule 12b-2 of the
regulations promulgated under the Exchange Act, "Affiliates") or advisors that
is contained in, or incorporated by reference into, the Proxy Statement.
Section 3.9 Absence of Certain Changes
Except as otherwise contemplated by this Agreement, since December 31, 2002, the
Company has conducted its business in the ordinary course consistent with past
practice, and there has not been (a) any damage, destruction or other casualty
loss (whether or not covered by insurance) affecting the business or assets of
the Company that would, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect or (b) any action, event, occurrence,
development or state of circumstances or facts that would, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 3.10 Brokers' Fees; Opinion of Financial Advisor
(a) Except for Xxxxxx, Xxxxxx & Co., Inc. (the "Financial
Advisor"), there is no investment banker, broker or finder
that has been retained by, or is authorized to act on behalf
of, the Company who might be entitled to any fee or commission
from the Company or the Purchaser upon consummation of the
transactions contemplated by this Agreement.
(b) The Company has received an opinion from the Financial Advisor
dated July 28, 2003 that the Merger Consideration is fair to
the Company's stockholders, other than the Purchaser and its
affiliates, from a financial point of view.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Company as follows:
Section 4.1 Corporate Existence and Power
The Purchaser is a corporation duly organized, validly existing and in good
standing under the Laws of the State of Delaware, and has all requisite
corporate power and authority to own, lease and operate its properties and
assets and to carry on its business as presently being conducted. The Purchaser
is duly qualified or licensed to conduct business as a foreign corporation in
each jurisdiction where such qualification or licensing is necessary, except
where the failure to be so qualified would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on its
ability to consummate the transactions contemplated by this Agreement. Since the
date of its incorporation, the Purchaser has not engaged in any activities other
than in connection with or as contemplated by this Agreement.
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Section 4.2 Corporate Authorization; Approvals
The execution, delivery and performance by the Purchaser of this Agreement and
the consummation by the Purchaser of the transactions contemplated hereby are
within the Purchaser's corporate powers and have been duly authorized by all
necessary corporate action. Assuming that this Agreement constitutes the valid
and binding obligation of the Company, this Agreement constitutes a valid and
binding agreement of the Purchaser, enforceable in accordance with its terms
(except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar Laws of general
applicability relating to or affecting creditors' rights, or by general equity
principles, including principles of commercial reasonableness, good faith and
fair dealing).
Section 4.3 Share Ownership
Purchaser owns 3,914,907 Shares.
Section 4.4 Governmental Authorization
The execution, delivery and performance by the Purchaser of this Agreement and
the consummation by the Purchaser of the transactions contemplated hereby do not
require any filing or registration with, notification to, or authorization,
consent or approval of any Governmental Entity on behalf of the Purchaser, other
than (a) the filing of the Certificates of Merger in accordance with the DGCL;
(b)compliance with any applicable requirements of the Securities Act and the
Exchange Act; (c) such actions as may be required under any applicable state
securities or blue sky Laws, and (d) such other actions or filings that, if not
obtained or made, would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the ability of the Purchaser to
consummate the transactions contemplated by this Agreement.
Section 4.5 Non-Contravention
The execution, delivery and performance by the Purchaser of this Agreement and
the consummation by the Purchaser of the transactions contemplated hereby do not
contravene or conflict with the Purchaser's certificate of incorporation or
bylaws in any manner which would, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on the ability of the Purchaser to
consummate the transactions contemplated by this Agreement.
Section 4.6 Information To Be Supplied
The information to be supplied by the Purchaser expressly for inclusion or
incorporation by reference in the Proxy Statement will comply with the
applicable provisions of Section 5.4. The Proxy Statement will (with respect to
the Purchaser) comply as to form in all material respects with the applicable
requirements of the Securities Act and the Exchange Act. Notwithstanding the
foregoing, the Purchaser makes no representations or warranties with respect to
any information supplied by, or related to, the Company or any of its advisors
that is contained in, or incorporated by reference into, any of the foregoing
documents.
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Section 4.7 Litigation
As of the date hereof, there are no claims, actions, suits, proceedings or
investigations pending or to the knowledge of the Purchaser, threatened by or
against the Purchaser that would, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on its ability to consummate the
transactions contemplated by this Agreement. The Purchaser is not subject to any
outstanding judgment, injunction, order or decree of any Governmental Entity
that would, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on its ability to consummate the transactions
contemplated by this Agreement. There are no judicial or administrative actions,
proceedings or investigations pending, or to the knowledge of the Purchaser,
threatened, which question the validity of this Agreement or any action taken or
to be taken by the Purchaser in connection with this Agreement.
Section 4.8 Availability of Funds
The Purchaser has, or has received a financing commitment pursuant to which it
will have, sufficient funds available to enable it to consummate the
transactions contemplated by this Agreement as of the Effective Date of the
Merger.
Section 4.9 Brokers' Fees
No investment banker, broker or finder has been retained by, or is authorized to
act on behalf of, the Purchaser and no broker, finder or financial advisor is
entitled to any brokerage, finder's or other fee or commission from Purchaser in
connection with the transactions contemplated by this Agreement.
ARTICLE V
COVENANTS
Section 5.1 Reasonable Best Efforts
(a) Subject to the terms and conditions hereof, each party will
use its reasonable best efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things
necessary, proper or advisable to consummate the transactions
contemplated by this Agreement as promptly as reasonably
practicable, provided that nothing in this section will
require the Company to take any action which would be
inconsistent with the fiduciary duties of its Board of
Directors as such duties would exist under applicable Law in
the absence of this section.
(b) Prior to the Closing Date, each of the parties will (i) give
all required notices to third parties and Governmental
Entities and use its reasonable best efforts to obtain all
third party and governmental consents and approvals that it is
required to obtain in connection with this Agreement, the
Merger and the other transactions contemplated hereby and (ii)
use its reasonable best efforts to prevent
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any preliminary or permanent injunction or other order by a
Governmental Entity that seeks to modify, delay or prohibit
the consummation of the transactions contemplated by this
Agreement and, if issued, to appeal any such injunction or
order through the appellate court or body for the relevant
jurisdiction. In connection with the foregoing, each party (y)
will promptly notify the other party in writing of any
communication received by that party or its Affiliates from
any Governmental Entity, and subject to applicable Law,
provide the other party with a copy of any such written
communication (or written summary of any oral communication),
and (z) not participate in any substantive meeting or
discussion with any Governmental Entity in respect of any
filing, investigation or inquiry concerning the transactions
contemplated by this Agreement unless it consults with the
other party in advance, and to the extent permitted by such
Governmental Entity, give the other party the opportunity to
attend and participate thereat.
(c) In connection with and without limiting the foregoing, the
Purchaser and the Company will (i) take all action reasonably
necessary to ensure that no state takeover statute or similar
statute or regulation is or becomes applicable to the Merger,
this Agreement or any of the other transactions contemplated
hereby and (ii) if any such statute or regulation becomes
applicable hereto, take all action reasonably necessary to
ensure that the Merger and the other transactions contemplated
hereby may be consummated as promptly as reasonably
practicable on the terms contemplated by this Agreement and
otherwise to minimize or eliminate the effect of such statute
or regulation on the Merger and the other transactions
contemplated by this Agreement. The Company and the Purchaser
will each furnish to one another and to their respective
counsel all such information as may be required in order to
accomplish the foregoing actions.
Section 5.2 Interim Operations
From the date hereof until the Effective Time, the Company will conduct its
business in all material respects in the ordinary course consistent with past
practice and will use its reasonable best efforts to preserve intact its present
business organization, assets, licenses, permits, Contracts and relationships
with suppliers, customers and others having business relations with it.
Section 5.3 Stockholder Meeting
(a) As soon as reasonably practicable, the Company will duly call,
give notice of, convene and hold a special meeting of its
stockholders (the "Stockholder Meeting") for the purpose of
obtaining the Stockholder Approval. The Company will set the
date for the Stockholder Meeting.
(b) The Company's Board of Directors may authorize the Company to
engage in discussions or negotiations with any person who
(without any solicitation or initiation, directly or
indirectly, by the Company or any representative of the
Company after the date of this Agreement) seeks to initiate
such discussions or negotiations and may furnish such third
party information concerning, and access
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to, the Company and its subsidiaries and their respective
businesses, properties and assets, and the Company's Board of
Directors may direct the Company's representative to cooperate
with and be available to consult with any such person;
provided that the Company's Board of Directors shall have
determined in the exercise of its fiduciary duties that such
action is in the best interests of the Company's stockholders.
Following receipt of an Acquisition Proposal (as defined
below) that is financially superior to the Merger (as
determined in good faith by the Company's Board of Directors),
the Board of Directors of the Company may withdraw, modify or
not make its Recommendation in favor of the Merger, provided
that the Company's Board of Directors shall have concluded in
good faith that such action is necessary in order for the
Company's Board of Directors to act in a manner that is
consistent with its fiduciary obligations under applicable
law. The Company's Board of Directors may take and disclose to
the Company's stockholders any position required under the
Securities Exchange Act of 1934, as amended. Except to the
extent the Company's Board of Directors deems it necessary not
to do so in the exercise of its fiduciary obligations to its
stockholders, the Company will promptly notify Purchaser of
the receipt of any Acquisition Proposal, including the
identity of the person or group making such Acquisition
Proposal and the material terms and conditions of such
Acquisition Proposal; provided that, except to the extent the
Company's Board of Directors deems it necessary not to do so
in the exercise of its fiduciary obligation to its
stockholders, in no event shall the Company enter into a
definitive agreement in connection with the Acquisition
Proposal less than five business days after the Company's
initial notification to Purchaser of an inquiry or proposal
relating to an Acquisition Proposal.
(c) For purposes of this Agreement, "Acquisition Proposal" means
any offer or proposal, or any indication of interest in making
an offer or proposal, made by a person or group at any time
which is structured to permit such person or group to acquire
beneficial ownership of at least 20% of the assets of the
Company and its subsidiaries taken as a whole, or at least 20%
of the outstanding shares of capital stock of the Company
pursuant to a merger, consolidation or other business
combination, sale of shares of capital stock, sale of assets,
tender offer or exchange offer or similar transaction,
including any single or multi-step transaction or series
related transactions, in each case other than the Merger.
Section 5.4 Certain Filings
(a) As promptly as reasonably practicable, the Company will
prepare and file with the SEC a proxy statement relating to
the Stockholder Meeting (together with any amendments thereof
or supplements thereto, the "Proxy Statement"). Each of the
Company and the Purchaser will furnish all information
concerning it and the holders of its capital stock as the
other may reasonably request in connection with the
preparation of the Proxy Statement. The Company will mail the
Proxy Statement to its stockholders as promptly as reasonably
practicable and, if necessary, after the Proxy Statement has
been so mailed, promptly circulate
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amended, supplemental or supplemented proxy material, and, if
required in connection therewith, re-solicit proxies.
(b) No amendment or supplement to the Proxy Statement will be made
by the Company without the approval of the Purchaser. The
Company will advise the Purchaser, promptly after it receives
notice thereof, of any request by the SEC for amendment of the
Proxy Statement, or comments thereon and responses thereto, or
requests by the SEC for additional information. The Company
will use its reasonable best efforts to prepare and file any
such amendments and/or respond to any such requests as
promptly as reasonably practicable.
(c) The Company agrees that the information supplied by the
Company for inclusion in the Proxy Statement will not, at (i)
the time the Proxy Statement (or any amendment thereof or
supplement thereto) is first mailed to the stockholders of the
Company; (ii) the time of the Stockholder Meeting; and (iii)
the Effective Time, contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
(d) The Purchaser agrees that the information supplied by the
Purchaser for inclusion in the Proxy Statement will not
contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(e) If at any time prior to the Effective Time, the Company or the
Purchaser discovers any information relating to either party
or any of their respective officers or directors that should
be set forth in an amendment or supplement to the Proxy
Statement, so that such document would not include any
misstatement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, the
party that discovers such information will promptly provide
written notice to the other party hereto and the Company will
prepare an appropriate amendment or supplement describing such
information that will be promptly filed with the SEC and, to
the extent required by Law, disseminated to the stockholders
of the Company.
Section 5.5 Indemnification and Insurance
(a) Purchasers agree that all rights to indemnification existing
in favor of the present or former directors, officers and
employees (or any person who served at the Company's or any of
its subsidiaries' request as an officer, director or agent) of
the Company or any of its subsidiaries (or any other entity or
enterprise, such as, a partnership, joint venture, trust or
employee benefit plan) as provided in the Company's
Certificate of Incorporation or bylaws, or the articles of
organization, bylaws or similar documents of any of the
Company's subsidiaries or other entity
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or enterprise and the indemnification agreements, if any, with
such person or persons, as in effect as of the date hereof
with respect to matters occurring prior to the Effective Time
shall survive the Merger and shall continue in full force and
effect without modification (other than modifications that
would enlarge the indemnification rights) for a period of not
less than the statutes of limitations applicable to such
matters, and the Surviving Corporation shall comply fully with
its obligations hereunder and thereunder. The certificate of
incorporation and bylaws of the Surviving Corporation shall
not be amended, repealed or otherwise modified for the period
set forth in the preceding sentence in any manner that would
adversely affect the rights thereunder of individuals who as
of the date hereof were directors, officers or employees of
the Company or otherwise entitled to indemnification under the
certificate of incorporation or bylaws of the Company (the
"Indemnified Parties"). It is understood and agreed that the
Company shall, to the fullest extent permitted under
applicable law and regardless of whether the Merger becomes
effective, indemnify, defend and hold harmless, and after the
Effective Time, the Surviving Corporation shall, to the
fullest extent permitted under applicable law, indemnify,
defend and hold harmless, each Indemnified Party against any
costs or expenses (including reasonable attorney's fees),
judgments, fines, losses, claims, damages, liabilities, and
amounts paid in settlement entered into with the consent of
the Surviving Corporation (which consent shall not be
unreasonably withheld) in connection with any claim, action,
suit, proceeding or investigation, including without
limitation, liabilities arising out of this Agreement and the
transactions contemplated hereby, to the extent that it was
based on the fact that such Indemnified Party is or was a
director, officer or employee of the Company and arising out
of actions or omissions or alleged actions or omissions
occurring at or prior to the Effective Time, and in the event
of any such claim, action, suit proceeding or investigation
(whether arising before or after the Effective Time) (i) the
Company or the Surviving Corporation, as applicable, shall pay
the reasonable fees and expenses of one counsel (provided that
if different Indemnified Parties are subject to different
claims, actions, suits, proceedings or investigations, each
Indemnified Party may select his or her own counsel which
counsel shall be reasonably satisfactory to the Company or the
Surviving Corporation), promptly as statements therefor are
received and (ii) the Company and the Surviving Corporation
will cooperate in the defense of such matter.
(b) The Company shall maintain in effect until the Effective Time,
in respect of acts or omissions occurring prior to the
Effective Time and in the current coverage amounts, policies
of directors' and officers' liability insurance and fiduciary
insurance covering the persons described in Section 5.5(a).
Nothing herein shall require the Surviving Corporation to
continue to maintain such insurance subsequent to the
Effective Time; provided, however, that if the Surviving
Corporation elects not to maintain such insurance, or if the
Surviving Corporation maintains such insurance and then allows
the insurance to lapse without renewal, the obligations of the
Surviving Corporation to the Indemnified Parties under Section
5.5(a) shall be personally guaranteed, jointly and severally,
by Xxxxx X.
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Xxxx and Xxxxx X. Xxxxxx pursuant to the terms of a Guaranty
Agreement executed and delivered prior to the Effective Time
in form and substance satisfactory to the Audit Committee of
the Board of Directors of the Company.
(c) This Section 5.5 shall survive the consummation of the Merger
and is intended to benefit, and shall be enforceable, by any
person or entity entitled to be indemnified hereunder. The
Surviving Corporation shall pay all reasonable costs and
expenses, including attorney's fees, that may be incurred by
any Indemnified Parties in enforcing the indemnity and other
obligations provided for in this Section 5.5.
Section 5.6 Public Announcements
The initial press releases, if any, issued by each party announcing the Merger
and the transactions contemplated by this Agreement will be in a form that is
mutually acceptable to the Purchaser and the Company. Thereafter, the Purchaser
and the Company will consult with one another before issuing any press releases
or otherwise making any public announcements (including communications with
employees) with respect to the transactions contemplated by this Agreement, and
except as may be required by fiduciary duties, applicable Law or by the rules
and regulations of the SEC or of the National Association of Securities Dealers
in connection with the trading of the Shares on the over-the-counter market,
will not issue any such press release or make any such announcement prior to
such consultation.
Section 5.7 Access to Information
The Company will afford the Purchaser and its officers, employees, agents and
representatives full access to all premises, properties, employees, information,
books, records, Contracts and documents of or pertaining to the Company.
Section 5.8 Notice of Developments
The Company and the Purchaser will each give prompt written notice to the other
of the occurrence of any event that would reasonably be expected to result in a
Material Adverse Effect on either party. Each of the Company and the Purchaser
will give prompt written notice to the other of the occurrence or failure to
occur of an event that would, or, with the lapse of time would reasonably be
expected to cause any condition to the consummation of the Merger not to be
satisfied.
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ARTICLE VI
CONDITIONS TO THE CONSUMMATION OF THE MERGER
Section 6.1 Conditions to the Obligations of Each Party
The respective obligations of each party to consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction at or prior to
the Closing Date of each of the following conditions:
(a) the Company will have obtained the Stockholder Approval; and
(b) no order, decree, ruling, judgment or injunction will have
been enacted, entered, promulgated or enforced by any
Governmental Entity of competent jurisdiction that prohibits
the Merger and the consummation of the transactions
contemplated by this Agreement substantially on the terms
contemplated hereby, and continue to be in effect.
Section 6.2 Conditions to the Obligations of the Company
The obligations of the Company to consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction at or prior to
the Closing Date of each of the following conditions, any of which may be waived
by the Company:
(a) the representations and warranties of the Purchaser set forth
in Article IV will be true and correct in all material
respects, in each case as of the Effective Time (except to the
extent expressly made as of an earlier date, in which case, as
of such date);
(b) the Purchaser will have performed or complied with in all
material respects all covenants and obligations required to be
performed or complied with by it under this Agreement at or
prior to the Effective Time; and
(c) the Purchaser will have delivered to the Company a
certificate, dated as of the Closing Date and signed by an
executive officer, certifying the satisfaction of the
conditions set forth.
Section 6.3 Conditions to the Obligations of the Purchaser
The obligations of the Purchaser to consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction at or prior to
the Closing Date of each of the following conditions, any of which may be waived
by the Purchaser:
(a) the representations and warranties of the Company set forth in
Article III will be true and correct in all material respects,
in each case as of the Effective Time (except to the extent
expressly made as of an earlier date, in which case, as of
such date);
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(b) the Company will have performed or complied with in all
material respects all obligations required to be performed or
complied with by it under this Agreement at or prior to the
Effective Time;
(c) from the date of this Agreement to the Effective Time, there
will not have been any event or development that has or could,
individually or in the aggregate, have a Material Adverse
Effect with respect to the Company;
(d) the Company will have delivered to the Purchaser a
certificate, dated as of the Closing Date and signed by an
executive officer, certifying the satisfaction of the
conditions set forth above; and
(e) no new claim, action, suit, proceeding or investigation will
be pending or threatened against the Company that relates to
the transactions contemplated by this Agreement or that
otherwise may reasonably be expected to have a Material
Adverse Effect with respect to the Company.
(f) all options or stock appreciation rights previously granted by
the Company will have been cancelled pursuant to written
agreements between the Company and the holders thereof.
ARTICLE VII
TERMINATION
Section 7.1 Termination
This Agreement may be terminated at any time prior to the Effective Time:
(a) by mutual written agreement of the Purchaser and the Company;
(b) by either the Purchaser or the Company, if:
(i) the Merger has not been consummated by February 29,
2004 (the "Outside Date"); provided, that the party
seeking to terminate this Agreement pursuant to this
clause has not breached in any material respect its
obligation under this Agreement in any manner that
has substantially contributed to the failure to
consummate the Merger on or before the Outside Date;
(ii) (A) an order, decree, ruling, judgment or injunction
has been entered by a Governmental Entity of
competent jurisdiction permanently restraining,
enjoining or otherwise prohibiting the consummation
of the Merger and such order, decree, ruling,
judgment or injunction has become final and
non-appealable, and (B) the party seeking to
terminate this Agreement pursuant to this clause has
used its reasonable best efforts to remove such
order, decree, ruling, judgment or injunction; or
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(iii) at the Stockholder Meeting (including any adjournment
or postponement thereof), the Stockholder Approval
will not have been obtained, unless such failure to
obtain the Stockholder Approval is the result of a
material breach of this Agreement by the party
seeking to terminate this Agreement;
(c) by the Company if (i) the Purchaser (A) breaches or fails to
perform or comply with any of its material covenants and
agreements contained herein, or (B) breaches its
representations and warranties in any material respect such
that the conditions in Section 6.1 or Section 6.2 would not be
satisfied, and such breach is not cured within thirty (30)
days after written notice of such breach is given by the
Company, or (ii) subject to compliance with the provisions of
Section 5.3, if the Company's Board of Directors has withdrawn
the Recommendation; and
(d) by the Purchaser if (i) the Company (A) breaches or fails to
perform or comply with any of its material covenants and
agreements contained herein, or (B) breaches its
representations and warranties in any material respect such
that the conditions in Section 6.1 or Section 6.3 would not be
satisfied, and such breach is not cured within 20 days after
written notice of such breach is given by the Purchaser, (ii)
the Company's Board of Directors has withdrawn the
Recommendation, or (iii) a claim, action, suit, proceeding or
investigation is filed, instituted, commenced or threatened
against the Company on or after the date of this Agreement
that relates to the transactions contemplated by this
Agreement or that otherwise may reasonably be expected to have
a Material Adverse Effect with respect to the Company.
Section 7.2 Effect of Termination
If any party terminates this Agreement pursuant to Section 7.1, all rights and
obligations of the parties hereunder will terminate without any liability of any
party to any other party, except for any liability of any party then in breach,
provided that the provisions of this section, Section 7.3 and Article VIII will
remain in full force and effect and survive any termination of this Agreement.
Section 7.3 Fees and Expenses
All fees and expenses incurred in connection with the transactions contemplated
hereby will be paid by the party incurring such expenses, whether or not the
Merger is consummated.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Survival of Representations and Warranties
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None of the representations and warranties contained in this Agreement or in any
certificate, instrument or other writing delivered pursuant to this Agreement
will survive the Merger or the termination of this Agreement. Only the covenants
contained in Article I and Article II, Section 5.5, Section 7.2, Section 7.3 and
Article VIII will survive the Effective Time.
Section 8.2 Successors and Assigns
Neither this Agreement nor any of the rights, interests or obligations provided
by this Agreement may be assigned by any of the parties (whether by operation of
Law or otherwise) without the prior written consent of the other parties.
Subject to the preceding sentence, this Agreement will be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns.
Section 8.3 Amendment
This Agreement may be amended by the execution and delivery of a written
instrument by or on behalf of the Purchaser and the Company at any time before
or after the Stockholder Approval, provided that after obtaining the Stockholder
Approval, no amendment to this Agreement will be made without the approval of
the stockholders of the Company if and to the extent such approval is required
under the DGCL.
Section 8.4 Severability
If any provision of this Agreement is held to be illegal, invalid or
unenforceable under any present or future Law, and if the rights or obligations
of any party hereto under this Agreement will not be materially and adversely
affected thereby, (a) such provision will be fully severable, (b) this Agreement
will be construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part hereof, (c) the remaining provisions of
this Agreement will remain in full force and effect and will not be affected by
the illegal, invalid or unenforceable provision or by its severance herefrom,
and (d) in lieu of such illegal, invalid or unenforceable provision, there will
be added automatically as a part of this Agreement a legal, valid and
enforceable provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible.
Section 8.5 Extension of Time; Waiver
At any time prior to the Effective Time, the parties may extend the time for
performance of or waive compliance with any of the covenants, agreements or
conditions of the other party to this Agreement, and may waive any breach of the
representations or warranties of such other party. No agreement extending or
waiving any provision of this Agreement will be valid or binding unless it is in
writing and is executed and delivered by or on behalf of the party against which
it is sought to be enforced.
Section 8.6 Counterparts
This Agreement may be executed in two or more counterparts, each of which will
be deemed an original, but all such counterparts taken together will constitute
one and the same Agreement.
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Section 8.7 Descriptive Headings
The descriptive headings of this Agreement are inserted for convenience only and
will not constitute a part of this Agreement.
Section 8.8 Notices
Any notice, request, instruction or other document to be given hereunder will be
in writing and delivered personally or sent by registered or certified mail
(postage prepaid) or by facsimile, according to the instructions set forth
below. Such notices will be deemed given: at the time delivered by hand, if
personally delivered; three business days after being sent by registered or
certified mail; and at the time when receipt is confirmed by the receiving
facsimile machine if sent by facsimile, as follows:
If to the Purchaser: Xx. Xxxxx X. Xxxx
Janus Hotels and Resorts, Inc.
0000 Xxxxxxxxx Xxxxxxxxx, X.X.
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000-0000
With a copy to: Xxxx X. Xxxxxx, Esq.
Xxxxxxxx & Shohl LLP
1900 Chemed Center
000 X. Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
If to the Company: Xx. Xxxxxxx Xxxxxx
Janus Hotels and Resorts, Inc.
0000 Xxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000-0000
With a copy: Xxxxxxxx X. Xxxxxxx, Esq.
Xxxxxxx, Del Deo, Dolan,
Griffinger & Xxxxxxxxx
Xxx Xxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
or to such other address or to the attention of such other party that the
recipient party has specified by prior written notice to the sending party in
accordance with the preceding.
Section 8.9 No Third-Party Beneficiaries
Except as provided pursuant to Section 5.5, the terms and provisions of this
Agreement will not confer third-party beneficiary rights or remedies upon any
person or entity other than the parties hereto and their respective successors
and permitted assigns.
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Section 8.10 Entire Agreement
This Agreement, the Disclosure Schedules and the other documents referred to
herein collectively constitute the entire agreement among the parties and
supersede any prior and contemporaneous understandings, agreements or
representations by or among the parties, written or oral, that may have related
in any way to the subject matter hereof.
Section 8.11 Governing Law
This Agreement will be governed by and construed in accordance with the laws of
the State of Delaware, without giving effect to any law or rule that would cause
the laws of any jurisdiction other than the State of Delaware to be applied.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK. THE SIGNATURE PAGE
IMMEDIATELY FOLLOWS.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the date first set
forth above.
JANUS HOTELS AND RESORTS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President of Finance
("Company")
JANUS ACQUISITION, INC.
By: /s/ Xxxxx X. Xxxx
------------------------------
Name: Xxxxx X. Xxxx
Title: Chief Executive Officer
("Purchaser")
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