1
EXHIBIT 99.1
E X E C U T I O N C O P Y
Exhibit 1
ACQUISITION AGREEMENT
among
OAKWOOD HOMES CORPORATION,
A & B ACQUISITION CORP.
and
XXXXXX HOMES CORPORATION
Dated as of January 5, 1998
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TABLE OF CONTENTS
ARTICLE 1 THE MERGER...................................................... i
1.1 The Merger...................................................... i
1.2 The Closing..................................................... i
1.3 Effective Time.................................................. i
ARTICLE 2 ARTICLES OF INCORPORATION AND BYLAWS OF THE SURVIVING
CORPORATION..................................................... i
2.1 Articles of Incorporation....................................... i
2.2 Bylaws.......................................................... i
ARTICLE 3 CONVERSION OF XXXXXX COMMON STOCK............................... i
3.1 Conversion of Shares................................. i
3.2 Stock Options................................................... i
3.3 Exchange Agent; Funding......................................... i
3.4 Withholding Rights.............................................. i
3.5 Dissenting Shares............................................... i
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF XXXXXX........................ i
4.1 Organization and Qualification: Subsidiaries.................... i
4.2 Articles of Incorporation and Bylaws............................ i
4.3 Capitalization.................................................. i
4.4 Authority Relative to this Agreement............................ i
4.5 No Conflict; Required Filings and Consents...................... i
4.6 Compliance...................................................... i
4.7 Other Interests ................................................ i
4.8 SEC Filings; Financial Statements............................... i
4.9 Subsequent Events............................................... i
4.10 Tax Matters..................................................... i
4.11 Employees and Fringe Benefit Plans.............................. i
4.12 Title to Assets................................................. i
4.13 Condition of Tangible Assets.................................... i
4.14 Leases.......................................................... i
4.15 Adequacy of Assets.............................................. i
4.16 Arms-Length Transaction......................................... i
4.17 Lawfully Operating.............................................. i
4.18 Litigation...................................................... i
4.19 State Takeover Laws............................................. i
4.20 Labor Matters................................................... i
4.21 No Brokers...................................................... i
4.22 Bank Accounts................................................... i
4.23 Insurance....................................................... i
4.24 Warranty and Product Liability Matters.......................... i
4.25 Warranty, Repurchase and Other Service Obligations.............. i
4.26 Dealer Arrangements............................................. i
4.27 Guarantees...................................................... i
4.28 Prospective Changes............................................. i
4.29 Full Disclosure................................................. i
i
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ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF OAKWOOD AND MERGER
SUB....................................................................... ii
5.1 Organization and Qualification............................................ ii
5.2 Authority Relative to this Agreement...................................... ii
5.3 No Conflict: Required Filings and Consents................................ ii
5.4 Brokers................................................................... ii
5.5 Full Disclosure........................................................... ii
ARTICLE 6 COVENANTS................................................................. ii
6.1 Covenants of Oakwood and Xxxxxx........................................... ii
6.2 Covenants of Xxxxxx....................................................... ii
6.3 Covenants of Oakwood...................................................... ii
ARTICLE 7 CONDITIONS................................................................ ii
7.1 Conditions to Each Party's Obligation to Effect the Merger................ ii
7.2 Conditions to Obligation of Xxxxxx to Effect the Merger................... ii
7.3 Conditions to Obligation of Oakwood and Merger Sub to Effect the Merger... ii
ARTICLE 8 TERMINATION............................................................... ii
8.1 Termination by Mutual Consent............................................. ii
8.2 Termination by Either Oakwood or Xxxxxx................................... ii
8.3 Termination by Xxxxxx..................................................... ii
8.4 Termination by Oakwood.................................................... ii
8.5 Effect of Termination and Abandonment..................................... ii
8.6 Extension: Waiver......................................................... ii
8.7 Cost Reimbursement Agreement.............................................. ii
ARTICLE 9 GENERAL PROVISIONS........................................................ ii
9.1 Notices................................................................... ii
9.2 Expenses.................................................................. ii
9.3 Assignment, Binding Effect, Benefit....................................... ii
9.4 Entire Agreement.......................................................... ii
9.5 Amendment................................................................. ii
9.6 Governing Law............................................................. ii
9.7 Counterparts.............................................................. ii
9.8 Headings.................................................................. ii
9.9 Interpretation............................................................ ii
9.10 Waivers................................................................... ii
9.11 Severability.............................................................. ii
9.12 Enforcement of Agreement.................................................. ii
9.13 Effectiveness............................................................. ii
ii
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ACQUISITION AGREEMENT
This ACQUISITION AGREEMENT (the "Agreement"), is made and entered into as
of the 5th day of January 1998, by and among OAKWOOD HOMES CORPORATION, a north
Carolina corporation ("Oakwood"), A & B ACQUISITION CORP., a newly formed
Indiana corporation and wholly-owned subsidiary of Oakwood ("Merger Sub"), and
XXXXXX HOMES CORPORATION, an Indiana corporation ("Xxxxxx").
WITNESSETH:
WHEREAS, The Boards of Directors of Oakwood, Merger Sub and Xxxxxx each
have determined that a business combination pursuant to which Merger Sub will
merge with and into xxxxxx and xxxxxx will become a wholly-owned subsidiary of
Oakwood is in the best interests of the respective companies and their
shareholders, and accordingly have approved the merger provided for herein upon
the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE 1
THE MERGER
1.1 The Merger. Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with the Indiana Business Corporation Law
("IBCL"), at the Effective Time (as defined in Section 1.3), Merger Sub shall
be merged with and into Xxxxxx and the separate corporate existence of Merger
Sub shall thereupon cease (the "Merger"). Xxxxxx shall be the surviving
corporation in the Merger (sometimes hereinafter referred to as the "Surviving
Corporation") and shall be a wholly-owned subsidiary of Oakwood.
1.2 The Closing. Subject to the terms and conditions of this Agreement,
the closing of the Merger (the "Closing") shall take place (a) at the offices
of Xxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxxx, L.L.P., NationsBank Corporate Center,
Suite 4200, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx, at 9:00 a.m.,
Charlotte time, as promptly as practicable (and in any event within two
business days) following the day on which the last to be fulfilled or waived of
the conditions set forth in Article 7 shall be fulfilled or waived in
accordance herewith or (b) at such other time, date or place as Oakwood and
Xxxxxx may agree. The date on which the Closing occurs is hereinafter referred
to as the "Closing Date".
1.3 Effective Time. If all of the conditions to the Merger set forth in
Article 7 shall have been fulfilled or waived in accordance herewith and this
Agreement shall not have been terminated as provided in Article 9, on the
Closing Date the parties hereto shall cause Articles of Merger meeting the
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requirements of Section 23-1-40-5 of the IBCL and substantially in the form of
Exhibit A attached hereto (the "Articles of Merger") to be properly executed
and filed, together with a Plan of Merger meeting the requirements of Section
23-1-40-1 of the IBCL and substantially in the form of Exhibit B attached
hereto (the "Plan of Merger" and together with the Articles of Merger, the
"Merger Documents"), with the Secretary of State of Indiana. The Merger shall
become effective at the time of filing of the Merger Documents or at such later
time which the parties hereto shall have agreed upon and designated in such
filing as the effective time of the Merger (the "Effective Time").
ARTICLE 2
ARTICLES OF INCORPORATION AND BYLAWS OF THE SURVIVING CORPORATION
2.1 Articles of Incorporation. The Articles of Incorporation of Xxxxxx in
effect immediately prior to the Effective Time shall be the Articles of
Incorporation of the Surviving Corporation, until duly amended in accordance
with applicable law.
2.2 Bylaws. The Bylaws of Xxxxxx in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation, until duly
amended in accordance with applicable law.
ARTICLE 3
CONVERSION OF XXXXXX COMMON STOCK
3.1 Conversion of Shares.
(a) At the Effective Time, by virtue of the Merger and without any action
on the part of Oakwood, Merger Sub, Xxxxxx or the holders of any of their
respective securities, each Common Share of Xxxxxx ("Xxxxxx Common Stock")
issued and outstanding immediately prior to the Effective Time (other than any
Dissenting Shares (if applicable and as defined in Section 3.5(a)) shall be
converted into the right to receive a cash amount equal to $22.50 per share
(the "Merger Consideration"). At the Effective Time, all shares of Xxxxxx
Common Stock shall automatically be canceled and retired and shall cease to
exist, and each certificate previously evidencing any such shares shall
thereafter represent the right to receive the cash consideration provided for
in this Agreement or, in the case of Dissenting Shares, the fair value therefor
as described in Section 3.5(a). The holders of certificates previously
evidencing such shares of Xxxxxx Common Stock outstanding immediately prior to
the Effective Time shall cease to have any rights with respect to such shares
except to receive the Merger Consideration as otherwise provided herein or by
law.
(b) At the Effective Time, by virtue of the Merger and without any action
on the part of Oakwood, Merger Sub or Xxxxxx, each share of Common Stock of
Merger Sub ("Merger Sub Common Stock") issued and outstanding prior to the
Effective Time, shall be converted into one share of Common Stock of Xxxxxx as
the Surviving Corporation. From and after the Effective Time, Oakwood, as
holder of all of the outstanding shares of Merger Sub Common Stock, shall have
the right to receive a certificate evidencing ownership of Common Stock of
Xxxxxx as provided hereinabove upon its surrender of the certificate or
certificates representing all shares of Merger Sub Common Stock. Until
surrender, each outstanding certificate which prior to the Effective Time
represented Merger Sub Common Stock shall be deemed for all corporate purposes
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to evidence ownership of the number of whole shares of Xxxxxx Common Stock into
which the shares of Merger Sub Common Stock have been so converted.
3.2 Stock Options. Prior to the Effective Time, each holder of an
outstanding Xxxxxx Stock Option (as defined in Section 4.3) to purchase shares
of Xxxxxx Common Stock, shall have either (a) exercised such options (so long
as such option is vested and exercisable at such time) or (b) agreed to the
amendment of such options in the manner described in the following sentence.
The Xxxxxx Stock Options outstanding as of the Effective Time shall be amended
such that Oakwood shall be substituted for Xxxxxx as a party thereto and shall
continue to have, and be subject to, the same terms and conditions as set forth
in the stock option plans and agreements pursuant to which such Xxxxxx Stock
Options were issued as in effect immediately prior to the Effective Time,
except that (a) each Xxxxxx Stock Option shall be exercisable for that number
of whole shares of Oakwood Common Stock equal to the product of the number of
shares of Xxxxxx Common Stock covered by such Xxxxxx Stock Option immediately
prior to the Effective Time multiplied by the fraction obtained by dividing
$22.50 by the closing price of Oakwood Common Stock on the New York Stock
Exchange on the date hereof (the "Exchange Ratio") and rounded up to the
nearest whole number of shares of Oakwood Common Stock and (b) the price at
which each such Xxxxxx Stock Option is exercisable shall be equal to the
exercise price of the Xxxxxx Stock Option immediately prior to the Effective
Time divided by the Exchange Ratio and rounded up to the nearest cent. Oakwood
shall (i) reserve for issuance the aggregate number of shares of Oakwood Common
Stock that will become issuable upon the exercise of such Xxxxxx Stock Options
pursuant to this Section 3.2 and (ii) as soon as practicable after the
Effective Time, file a registration statement on Form S-3 or Form S-8 (or any
successor or other appropriate form), as determined by Oakwood, with respect to
the shares of Oakwood Common Stock subject to such options and shall use its
reasonable efforts to maintain the effectiveness of such registration statement
(and maintain the current status of the prospectus or prospectuses contained
therein) for so long as such options remain outstanding. Nothing in this
Section 3.2 shall affect the schedule of vesting with respect to the Xxxxxx
Stock Options to be assumed by Oakwood. For each outstanding Xxxxxx Stock
Option, Schedule 3.2 sets forth the number of shares of Xxxxxx Common Stock for
which such option is exercisable and the exercise price with respect thereto.
3.3 Exchange Agent; Funding.
(a) Exchange Agent. Oakwood shall designate and engage an exchange agent,
subject to the reasonable approval of Xxxxxx (the "Exchange Agent"),
sufficiently in advance of the Effective Time so that the exchange of cash for
shares of Xxxxxx Common Stock to be effected pursuant to the Merger Documents
can be commenced as soon as possible after the Effective Time. Such Exchange
Agent shall be a bank or trust company mutually acceptable to Oakwood and
Xxxxxx, it being agreed that Xxxxxx Trust, Xxxxxx'x transfer agent, is mutually
acceptable.
(b) Funding. Subject to the terms and conditions of this Agreement,
Oakwood shall cause (i) there to be available to the Exchange Agent, at or
prior to the Effective Time, for purposes of the conversion and exchange of
shares of Xxxxxx Common Stock in the Merger, the aggregate amount of cash to be
delivered to the shareholders of Xxxxxx pursuant to the Plan of
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Merger and (ii) Merger Sub to take such other actions as shall be necessary for
it to consummate the Merger.
3.4 Withholding Rights.
Oakwood, Xxxxxx or the Exchange Agent shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to
any holder of shares of or options to acquire Xxxxxx Common Stock such amounts
as Oakwood, Xxxxxx or the Exchange Agent is required to deduct and withhold
with respect to the making of such payment under the Code (hereinafter defined)
or any provision of state, local or foreign tax law. To the extent that
amounts are so withheld by Oakwood, Xxxxxx or the Exchange Agent, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of the shares of Xxxxxx Common Stock in respect of which such
deduction and withholding was made by Oakwood, Xxxxxx or the Exchange Agent.
3.5 Dissenting Shares.
(a) If provided for under the IBCL, notwithstanding any other provision of
this Agreement to the contrary, shares of Xxxxxx Common Stock that are
outstanding immediately prior to the Effective Time and which are held by
shareholders of Xxxxxx who shall not have voted in favor of the Merger or
consented thereto in writing and who shall have demanded properly in writing
payment for such shares in accordance with Sections 23-1-44 et seq. of the IBCL
and who shall not have withdrawn such demand or have been deemed or otherwise
have forfeited the right to payment (such shares of Xxxxxx Common Stock being
referred to as the "Dissenting Shares") shall not be converted into or
represent the right to receive the Merger Consideration. Such shareholders
instead shall be entitled to receive payment of the fair value of such shares
of Xxxxxx Common Stock held by them in accordance with the provisions of the
IBCL, except that all Dissenting Shares held by shareholders who shall have
failed to perfect or who effectively shall have withdrawn or lost their rights
to payment for such shares of Xxxxxx Common Stock under the IBCL shall
thereupon be deemed to have been converted into and to have become
exchangeable, as of the Effective Time, for the right to receive, without any
interest thereon, the Merger Consideration, upon surrender of the certificate
or certificates that formerly evidenced such shares of Xxxxxx Common Stock.
(b) Xxxxxx shall give Oakwood (i) prompt notice of any demands for payment
received by Xxxxxx, withdrawals of such demands, and any other instruments
delivered pursuant to the IBCL and received by Xxxxxx and (ii) the opportunity
to direct all negotiations and proceedings with respect to demands for payment
under the IBCL. Xxxxxx shall not, except with the prior written consent of
Oakwood, make or commit to make any payment with respect to any demands for
payment, or offer to settle, or settle, any such demands.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF XXXXXX
Xxxxxx hereby makes the representations and warranties contained in this
Article 4. As used herein, where a statement is made "to the knowledge" or
"the best knowledge" of Xxxxxx or a Xxxxxx Subsidiary (as defined below) or a
statement is made that Xxxxxx or a Xxxxxx Subsidiary "knows" a particular fact
or circumstance, such knowledge shall include the knowledge of the officers and
key employees of Xxxxxx and each Xxxxxx Subsidiary after (a) review by such
officers and key employees of the pertinent business records of Xxxxxx and each
Xxxxxx Subsidiary in their files and (b) inquiry by one or more of such
officers and key employees of each attorney or accountant retained by Xxxxxx or
any Xxxxxx Subsidiary who is reasonably believed to have relevant information
about the matter as to which such knowledge or lack of knowledge is asserted
(the scope of such review and inquiry being that of a reasonable person under
the circumstances). As used herein, the term "Xxxxxx Material Adverse Effect"
means any change or effect that is or would be materially adverse to the
business, results of operations or financial condition of Xxxxxx and the Xxxxxx
Subsidiaries, taken as a whole, excluding any changes or effects caused by
changes in general economic conditions or changes generally affecting Xxxxxx'x
industry. As used herein, the term "Disclosure Memorandum" means a memorandum
delivered by Xxxxxx to Oakwood within ten days following the date hereof in
form satisfactory to Oakwood in its reasonable judgment and containing certain
disclosures regarding Xxxxxx and the Xxxxxx Subsidiaries under this Agreement.
In the event that, in Oakwood's reasonable judgment, any information or
disclosures, individually or in the aggregate, contained in the Disclosure
Memorandum constitutes or would have a Xxxxxx Material Adverse Effect, Oakwood
shall be entitled to terminate this Agreement by giving written notice to
Xxxxxx on or before the second business day after the Due Diligence Completion
Date (as defined in Section 7.3(d)).
4.1 Organization and Qualification: Subsidiaries.
Xxxxxx and each subsidiary of Xxxxxx (a "Xxxxxx Subsidiary"), which
subsidiaries and their capitalization are set forth in the Disclosure
Memorandum (as defined above), is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite power and authority and all necessary
governmental approvals to own, lease and operate its properties and to carry on
its business as it is now being conducted, except where the failure to be so
organized, existing or in good standing or to have such power, authority and
governmental approvals would not, individually or in the aggregate, have a
Xxxxxx Material Adverse Effect (as defined below). Xxxxxx and each Xxxxxx
Subsidiary are duly qualified or licensed as foreign corporations to do
business, and are in good standing, in each jurisdiction where the character of
the properties owned, leased or operated by them or the nature of their
business makes such qualification or licensing necessary, except for such
failures to be so qualified or licensed and in good standing that would not,
individually or in the aggregate, have a Xxxxxx Material Adverse Effect.
4.2 Articles of Incorporation and Bylaws.
Xxxxxx has heretofore made available to Oakwood a complete and correct
copy of the Articles of Incorporation and the Bylaws or equivalent
organizational documents, each as amended to date, of Xxxxxx and each Xxxxxx
Subsidiary. Such Articles of Incorporation, Bylaws and equivalent
organizational documents are in full force and effect. Neither Xxxxxx or any
Xxxxxx
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Subsidiary is in violation of any provisions of its Articles of Incorporation,
Bylaws or equivalent organizational documents.
4.3 Capitalization.
The authorized capital stock of Xxxxxx consists of 10,000,000 shares of
Xxxxxx Common Stock and 2,000,000 Preferred Shares. As of the date hereof, (i)
4,475,875 shares of Xxxxxx Common Stock were issued and outstanding, all of
which shares were validly issued, fully paid and nonassessable and were not
issued in violation of any preemptive rights, (ii) 180,000 shares of Xxxxxx
Common Stock were reserved for future issuance pursuant to outstanding employee
stock options granted pursuant to Xxxxxx'x 1995 Share Incentive Plan and any
other employee stock option plan or program, which options were not granted in
violation of any preemptive rights, (iii) 9,177 shares of Xxxxxx Common Stock
were reserved for future issuance pursuant to outstanding director units
granted pursuant to Xxxxxx'x Directors Deferred Compensation Plan and any other
director award or stock option plan or program, which units were not granted in
violation of any preemptive rights, (iv) 381 shares were reserved for issuance
under Xxxxxx'x Employee Share Purchase Plan pursuant to payroll deductions made
on or before the date hereof, which shares are to be purchased in January 1998
on a per share price based on the closing price for Xxxxxx Common Stock on the
American Stock Exchange on December 31, 1997, (v) 8,000 shares of Xxxxxx Common
Stock were reserved for future issuance pursuant to an option granted to Xxxx
Xxxx with an aggregate option price of $1.00 (the "Wolf Option") (the Wolf
Option and any employee or director stock option or award issued under any plan
described in the preceding clauses (ii) through (iv) being a "Xxxxxx Stock
Option") and (vi) no Preferred Shares are currently outstanding. Except as set
forth in this Section 4.3, there are no outstanding options, warrants or other
rights, agreements, arrangements or commitments of any character relating to
the issued or unissued capital stock of Xxxxxx or any Xxxxxx Subsidiary
obligating Xxxxxx or any Xxxxxx Subsidiary to issue or sell any shares of
capital stock of, or other equity interests in, Xxxxxx or any Xxxxxx
Subsidiary. All shares of Xxxxxx Common Stock subject to issuance as
aforesaid, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and nonassessable. There are no outstanding
contractual obligations of Xxxxxx or any Xxxxxx Subsidiary to repurchase,
redeem or otherwise acquire any shares of Xxxxxx Common Stock or any capital
stock of any Xxxxxx Subsidiary, or make any material investment (in the form of
a loan, capital contribution or otherwise) in, any Xxxxxx Subsidiary or any
other person or entity. Each outstanding share of capital stock of each Xxxxxx
Subsidiary has been duly authorized, validly issued, and is fully paid and
nonassessable, was not issued in violation of any preemptive rights and is
owned beneficially and of record by Xxxxxx or a Xxxxxx Subsidiary. Each such
outstanding share of capital stock of a Xxxxxx Subsidiary is owned by Xxxxxx or
a Xxxxxx Subsidiary free and clear of all security interests, liens, claims,
pledges, options, rights of first refusal, agreements, limitations on Xxxxxx'x
or such other Xxxxxx Subsidiary's voting rights, charges and other encumbrances
of any nature whatsoever. All offers and sales of Xxxxxx Common Stock and the
capital stock of any Xxxxxx Subsidiary prior to the date hereof were at all
relevant times duly registered under or exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
and were duly registered under or exempt from the registration requirements of
the applicable state securities or "blue sky" laws ("Blue Sky Laws").
4.4 Authority Relative to this Agreement.
Xxxxxx has all necessary power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Xxxxxx and the consummation by it of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate action and no
other proceedings on the part of Xxxxxx are necessary to authorize this
Agreement or to
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consummate the transactions contemplated herein (other than, with respect to
the Merger, any approval and adoption of this Agreement and the Plan of Merger
by the holders of Xxxxxx Common Stock and the filing and recordation of
appropriate merger documents as required by Indiana law). This Agreement has
been duly and validly executed and delivered by Xxxxxx and, assuming the due
authorization, execution and delivery by Oakwood and Merger Sub, constitutes a
legal, valid and binding obligation of Xxxxxx enforceable against it in
accordance with its terms, subject to the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting creditors'
rights generally and subject to the effect of general principles of equity,
including without limitation concepts of materiality, reasonableness, good
faith and the possible unavailability of specific performance or injunctive
relief, regardless of whether considered in a proceeding in equity or at law.
4.5 No Conflict; Required Filings and Consents.
(a) Except as set forth in the Disclosure Memorandum or in the exceptions
in Section 4.5(b) below, the execution and delivery of this Agreement by Xxxxxx
do not, and the performance of the transactions contemplated herein by Xxxxxx
will not, (i) conflict with or violate the Articles of Incorporation or Bylaws
or equivalent organizational documents of Xxxxxx or any Xxxxxx Subsidiary, (ii)
conflict with or violate any law, rule, regulation, order, judgment or decree
applicable to Xxxxxx or any Xxxxxx Subsidiary or by which property or assets of
Xxxxxx or any Xxxxxx Subsidiary is bound or affected, or (iii) result in any
breach of or constitute a default (or any event which with notice or lapse of
time or both would become a default) under, result in the loss of a material
benefit under, or give to others any right of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or other
encumbrance on any property or asset of Xxxxxx or any Xxxxxx Subsidiary
pursuant to any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which Xxxxxx or
any Xxxxxx Subsidiary is a party or by which Xxxxxx or any Xxxxxx Subsidiary or
any property or asset of Xxxxxx or any Xxxxxx Subsidiary is bound or affected.
(b) The execution and delivery of this Agreement by Xxxxxx do not, and the
performance of this Agreement by Xxxxxx will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, domestic or foreign (each a "Governmental
Entity"), except for (i) applicable requirements, if any, of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), (ii) the pre-merger
notification requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, and the rules and regulations thereunder (the "HSR" Act")
and (iii) filing and recordation of the Merger Documents as required by Indiana
law.
4.6 Compliance.
Except as set forth in the Disclosure Memorandum, neither Xxxxxx or any
Xxxxxx Subsidiary is in conflict with, or in default or violation of, (a) any
law, rule, regulation, order, judgment or decree applicable to Xxxxxx or any
Xxxxxx Subsidiary or by which any property or asset of Xxxxxx or any Xxxxxx
Subsidiary is bound or affected or (b) the provisions of any note, bond,
mortgage, indenture, contract, agreement, understanding, arrangement,
commitment, lease, license, permit, franchise or other instrument or obligation
to which Xxxxxx or any Xxxxxx Subsidiary is a party or by which Xxxxxx or any
Xxxxxx Subsidiary or any property or asset of
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Xxxxxx or any Xxxxxx Subsidiary is bound or affected, nor does any circumstance
exist which with notice or the passage of time or both would result in such a
conflict, default, or violation, except where such conflict, violation or
default would not prevent or delay consummation of the Merger in any material
respect, or otherwise prevent Xxxxxx from performing its obligations under this
Agreement in any material respect, and would not, individually or in the
aggregate, have a Xxxxxx Material Adverse Effect.
4.7 Other Interests.
Other than the Xxxxxx Subsidiaries or as set forth in the Disclosure
Memorandum, Xxxxxx does not own directly or indirectly any interest or
investment in any corporation, partnership, limited liability company, joint
venture, business, trust or other entity.
4.8 SEC Filings; Financial Statements.
(a) Xxxxxx has filed all forms, reports and documents required to be filed
by it with the SEC since June 15, 1995, and has heretofore delivered to
Oakwood, in the form filed with the SEC, (i) its Annual Report on Form 10-K for
the fiscal year ended June 28, 1997, (ii) its Quarterly Report on Form 10-Q for
the period ended September 27, 1997, (iii) all proxy statements relating to
Xxxxxx'x meetings of shareholders (whether annual or special) held since
January 1, 1996 and (iv) all other forms, reports and other registration
statements filed by Xxxxxx with the SEC since June 15, 1995 (the forms, reports
and other documents referred to in clauses (i), (ii), (iii), and (iv) above
being referred to herein, collectively, as the "Xxxxxx SEC Reports"). The
Xxxxxx SEC Reports and any other forms, reports and other documents filed by
Xxxxxx with the SEC after the date of this Agreement (x) at the time of filing
were or will be prepared in all material respects in accordance with the
requirements of the Securities Act and the Exchange Act, as the case may be,
and the rules and regulations thereunder and (y) did not at the time they were
filed, or will not at the time they are filed, 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 made therein, in the light of the
circumstances under which they were made, not misleading.
(b) Each of the consolidated financial statements (including, in each
case, any notes thereto) contained in the Xxxxxx SEC Reports (the "Financial
Statements") was prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods indicated
(except as may be indicated in the notes thereto) and each fairly presented the
consolidated financial position, results of operations and cash flows of Xxxxxx
and the Xxxxxx Subsidiaries, as at the respective dates thereof and for the
respective periods indicated therein (subject, in the case of unaudited
statements, to normal and recurring year-end adjustments which were not and are
not expected, individually or in the aggregate, to be material in amount). The
Financial Statements have been prepared from the books and records of Xxxxxx
and the Xxxxxx Subsidiaries which accurately and fairly reflect the
transactions and dispositions of the assets of Xxxxxx and the Xxxxxx
Subsidiaries in accordance with generally accepted accounting principles.
(c) As of September 27, 1997, or any subsequent date for which a balance
sheet is provided, Xxxxxx had no known material liabilities, contingent or
otherwise, whether due or to become due, other than as indicated on the balance
sheet, or in the notes thereto, as of such date, and Xxxxxx'x reserves for
uncollectible receivables and contingent liabilities were adequate. Xxxxxx and
the Xxxxxx Subsidiaries have adequately funded all accrued employee benefit
costs and such funding (to the date thereof) is reflected in the September 27
Balance Sheet (as such term is defined in Section 4.12(c)).
(d) All Debt of Xxxxxx and any Xxxxxx Subsidiary is set forth in the
Disclosure Memorandum. The term "Debt" means all liabilities, obligations and
indebtedness for borrowed
12
money including but not limited to (a) obligations evidenced by bonds,
debentures, notes or other similar instruments and (b) all obligations of any
lessee under any lease of any property that should, in accordance with
generally accepted accounting principles, be classified and accounted for as a
capital lease on a consolidated balance sheet of Xxxxxx and the Xxxxxx
Subsidiaries. Except as set forth in the Disclosure Memorandum, all such Debt
may be prepaid in full without premium or penalty.
4.9 Subsequent Events. Except as set forth in the Disclosure Memorandum
or as specifically described in the footnotes to the Financial Statements,
since June 28, 1997 there has not been:
(a) any Xxxxxx Material Adverse Effect, and no Xxxxxx Material Adverse
Effect is reasonably expected to occur;
(b) any disposition or issuance by Xxxxxx or any Xxxxxx Subsidiary of any
of its capital stock (other than in connection with the exercise of a vested
and exerciseable Xxxxxx Stock Option), or of any option or right or privilege
to acquire any of its capital stock, or any acquisition or retirement by Xxxxxx
of any of its capital stock;
(c) any sale, mortgage, pledge, grant, dividend or other disposition or
transfer of any asset or interest owned or possessed by Xxxxxx or any Xxxxxx
Subsidiary, other than those occurring in the ordinary and regular course of
business consistent with past practices and prior periods;
(d) any expenditure or commitment by Xxxxxx or any Xxxxxx Subsidiary for
the acquisition of assets of any kind, other than expenditures or commitments
in the ordinary and regular course of business consistent with past practices
and prior periods;
(e) any damage, destruction or loss of such character as to interfere
materially with the continued operation of any part of the business of Xxxxxx
or any Xxxxxx Subsidiary (whether or not such loss was insured against) or to
have a Xxxxxx Material Adverse Effect;
(f) any increase in the compensation payable or to become payable by
Xxxxxx or any Xxxxxx Subsidiary to any officer or key employee of Xxxxxx or any
Xxxxxx Subsidiary, or any agreement therefor;
(g) any change made or authorized in the Articles of Incorporation or
Bylaws (or other organizational documents) of Xxxxxx or any Xxxxxx Subsidiary;
(h) any loans or advances by or to Xxxxxx or any Xxxxxx Subsidiary, other
than renewals or extensions of existing indebtedness and uses of lines of
credit in the ordinary course of business;
(i) any cancellation or payment by Xxxxxx or any Xxxxxx Subsidiary of any
indebtedness owing to or owed by it other than in the ordinary course of
business, or any cancellation or settlement by Xxxxxx or any Xxxxxx Subsidiary
of any claims against others;
(j) any failure by Xxxxxx or any Xxxxxx Subsidiary to operate its business
other than in the ordinary course of business, any change from past practices
in the manner of building or
13
depleting inventories, incurring or collecting receivables, or incurring or
paying trade payables or accrued liabilities;
(k) any failure to maintain the books and records of Xxxxxx or any Xxxxxx
Subsidiary consistent with past practices, or any write-down of assets shown on
the books and records of Xxxxxx or any Xxxxxx Subsidiary, or the establishment
of any reserves or accruals in an amount or nature that is not consistent with
past practices or prior periods;
(l) any change in accounting practices; or
(m) any agreement or commitment by or on behalf of Xxxxxx or any Xxxxxx
Subsidiary to do or to take any of the actions referred to in the foregoing
subparagraphs (a) through (1).
4.10 Tax Matters
Xxxxxx and the Xxxxxx Subsidiaries have duly filed all Tax reports and
returns required to be filed by them as of the date hereof or have validly
extended the due date for the filing thereof and have duly paid all Taxes and
other charges (whether or not shown on any Tax return) due or expressly claimed
to be due from them by federal, foreign, state or local taxing authorities as
of the date hereof or an adequate reserve has been established therefor in the
Financial Statements; and true and correct copies of all federal income and
state franchise and income Tax reports and returns beginning with the 1992 tax
year have been heretofore delivered to Oakwood. The reserves for Taxes
contained in the Financial Statements and carried on the books of Xxxxxx (other
than any reserve for deferred taxes established to reflect temporary
differences between book and tax income) are adequate to cover all Tax
liabilities as of the date of this Agreement. Since December 31, 1996, neither
Xxxxxx nor any Xxxxxx Subsidiary has incurred any material Tax liabilities
other than in the ordinary course of business; there are no Tax liens (other
than liens for current Taxes not yet due) upon any properties or assets of
Xxxxxx or any Xxxxxx Subsidiary (whether real, personal or mixed, tangible or
intangible), and, except as set forth in the Disclosure Memorandum and as
reflected in the Financial Statements, there are no pending or, to the best
knowledge of Xxxxxx and each Xxxxxx Subsidiary, threatened questions or
examinations relating to, or claims asserted for, Taxes or assessments against
Xxxxxx or any Xxxxxx Subsidiary. Neither Xxxxxx nor any Xxxxxx Subsidiary has
granted or been requested to grant any extension of the limitation period
applicable to any claim for Taxes or assessments with respect to Taxes. Except
as set forth in the Disclosure Memorandum, neither Xxxxxx nor any Xxxxxx
Subsidiary is a party to any Tax allocation or sharing agreement. Xxxxxx and
the Xxxxxx Subsidiaries have withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor or shareholder that required withholding. For
purposes of this Agreement, "Tax" means any federal, state, local, or foreign
income, gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under
Section 59A of the Internal Revenue Code of 1986, as amended (the "Code")),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property,
sales, use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not. Xxxxxx has never made an
election under Section 341(f) of the Internal Revenue Code of 1954, as amended
and all federal tax elections under the Code that are in effect with respect to
Xxxxxx for the current and immediately preceding fiscal year are set forth in
the Disclosure Memorandum
4.11 Employees and Fringe Benefit Plans.
(a) The Disclosure Memorandum sets forth the names and titles of all
members of the Boards of Directors and officers of Xxxxxx and the Xxxxxx
Subsidiaries and the names and positions
14
of all employees of Xxxxxx and the Xxxxxx Subsidiaries whose annual rate of
compensation exceeds $150,000 per annum, and the annual rate of compensation
(and bonuses) being paid to each such member of the Boards of Directors,
officer and employee as of the date hereof.
(b) The Disclosure Memorandum sets forth each employment agreement of
Xxxxxx or any Xxxxxx Subsidiary and each employment, bonus, deferred
compensation, pension, stock option, stock appreciation right, profit-sharing
or retirement plan, arrangement or practice, each medical, vacation, retiree
medical, severance pay plan, and each other agreement or fringe benefit plan,
arrangement or practice, of Xxxxxx or any Xxxxxx Subsidiary, whether legally
binding or not, which affects its employees generally or affects one or more
groups of its employees, including all "employee benefit plans" as defined by
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") (each a "Plan" and collectively, the "Plans").
(c) For each Plan which is an "employee benefit plan" under Section 3(3)
of ERISA, Xxxxxx or the Xxxxxx Subsidiary has delivered to Oakwood correct and
complete copies of the plan documents and summary plan descriptions, the most
recent determination letter received from the Internal Revenue Service, the
most recent Form 5500 Annual Report, the most recent trust statement or other
document detailing the investments and assets of such Plan, and all related
trust agreements, insurance contracts, investment advisory contracts, service
agreements and funding agreements that involve the operation or administration
of such Plan.
(d) Neither Xxxxxx or any Xxxxxx Subsidiary has any commitment, whether
formal or informal and whether legally binding or not, (i) to create any
additional Plan; (ii) to modify or change any Plan in any material respect; or
(iii) to maintain for any period of time any such Plan. An accurate and
complete description of the funding policies (and commitments, if any) of
Xxxxxx or any Xxxxxx Subsidiary with respect to each such existing Plan is set
forth in the Disclosure Memorandum. None of the Plans is an "employee stock
ownership plan" as defined by Section 4975(e)(7) of the Code or Section
407(d)(6) of ERISA or is invested in any securities issued by Xxxxxx or any of
its affiliates.
(e) None of Xxxxxx or any Xxxxxx Subsidiary or any Plan or any trustee,
administrator, fiduciary or sponsor of any Plan has engaged in any prohibited
transaction, as defined in Section 406 of ERISA or Section 4975 of the Code,
for which there is no statutory exemption in Section 408 of ERISA or Section
4975 of the Code; all filings, reports and descriptions as to the Plans
(including Form 5500 Annual Reports, summary plan descriptions, and summary
annual reports) required to have been made or distributed to participants, the
Internal Revenue Service, the United States Department of Labor and other
governmental agencies have been made in a timely manner; there is no
litigation, disputed claim, governmental proceeding or investigation pending
or, to the best knowledge of Xxxxxx and each Xxxxxx Subsidiary, threatened with
respect to any of the Plans, the related trusts or other funding media, or any
fiduciary, trustee, administrator or sponsor of the Plans except (i) as set
forth in the Disclosure Memorandum or (ii) for claims for health or medical
benefits arising in the normal course of plan administration that have not
progressed beyond the Plan's internal claims procedures and, if granted, will
not differ in any material respect from the plan benefits historically provided
under the Plan; except as set forth in the Disclosure Memorandum such Plans
have been established, maintained and administered in all material respects in
accordance with their governing documents and in compliance in all material
respects with all applicable provisions of ERISA and the Code; and, except as
set forth
15
in the Disclosure Memorandum each Plan which is intended to be a qualified
plan under Section 401(a) of the Code has received a favorable determination
letter from the Internal Revenue Service with respect to its qualified plan
status covering such Plan's current terms and provisions and, since the date of
each most recent determination letter, no event has occurred and no condition
or circumstance has existed that resulted or is likely to result in the
revocation of any such determination or that could adversely affect the
qualified status of any such Plan.
(f) Xxxxxx and each Xxxxxx Subsidiary have complied in all material
respects with all applicable federal, state and local laws, rules and
regulations relating to employees' employment and/or employment relationships,
including, without limitation, wage and hour related laws, anti-discrimination
laws, employee safety and workers compensation laws and the coverage
continuation requirements of Code Section 4980B and Part 6 of Subtitle B of
Title I of ERISA ("COBRA").
(g) Except as set forth in the Disclosure Memorandum, the consummation of
the transactions contemplated by this Agreement will not (i) result in the
payment or series of payments by Xxxxxx or any Xxxxxx Subsidiary to any
employee or other person of an "excess parachute payment" within the meaning of
Section 280G of the Code, (ii) entitle any employee or former employee of
Xxxxxx or any Xxxxxx Subsidiary to severance pay, unemployment compensation or
any other payment, or (iii) accelerate the time of payment or vesting of any
stock option, stock appreciation right, deferred compensation or other employee
benefits under any Plan (including vacation and sick pay).
(h) None of the Plans that are "welfare benefit plans," within the meaning
of Section 3(l) of ERISA, provide for continuing benefits or coverage after
termination or retirement from employment, except for COBRA rights under a
"group health plan" as defined in Code Section 4980B(g) and ERISA Section 607.
(i) Neither Xxxxxx nor any "affiliate" of Xxxxxx (defined herein to mean
an entity which is a member of a "controlled group of corporations," or under
"common control," with Xxxxxx as defined in Code Sections 414(b) or (c) or in
the regulations promulgated thereunder) has ever participated in, contributed
to or withdrawn from a multiemployer plan as defined in Section 4001(a)(3) of
ERISA, and neither Xxxxxx nor any Xxxxxx Subsidiary has incurred, or owes, any
liability as a result of any partial or complete withdrawal by any employer
from such a multiemployer plan as described under Sections 4201, 4203 or 4205
of ERISA.
(j) None of Xxxxxx nor any Xxxxxx Subsidiary nor any "affiliate" of Xxxxxx
(as defined above) has ever sponsored, maintained, participated in or
contributed to an employee benefit plan or arrangement that is or was subject
to Title IV of ERISA or any of the minimum funding standards or requirements of
Section 412 of the Code.
16
4.12 Title to Assets.
(a) Real Property and Leasehold Interests. All real property and
improvements owned by Xxxxxx or any Xxxxxx Subsidiary (the "Real Property") and
all leases of real property under which Xxxxxx or any Xxxxxx Subsidiary is a
lessee or sublessee (the "Leases") are set forth in the Disclosure Memorandum.
Xxxxxx or a Xxxxxx Subsidiary, as the case may be, has good and marketable
indefeasible fee simple title to the Real Property free and clear of all liens,
charges, security interests, easements, reservations, restrictions,
encumbrances and other defects of title (collectively, "Encumbrances"), other
than exceptions set forth in the Disclosure Memorandum (the "Exceptions") which
Exceptions do not have a material adverse effect on the current use or
occupancy of the Real Property or the value thereof. Xxxxxx has delivered to
Oakwood copies of all Leases, including all amendments or supplements thereto
and all notices from the landlord thereunder or its leasing agent with respect
thereto, all of which are set forth in the Disclosure Memorandum. Xxxxxx or
the Xxxxxx Subsidiary, as the case may be, has a valid and enforceable
leasehold interest under all of the Leases, subject only to the terms and
conditions set forth in the Leases and the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting creditors'
rights generally and subject to the effect of general principles of equity,
including without limitation concepts of materiality, reasonableness, good
faith and the possible unavailability of specific performance or injunctive
relief, regardless of whether considered in a proceeding in equity or at law.
Neither Xxxxxx nor any Xxxxxx Subsidiary is in default under any Lease, and
there does not exist any event which with notice or the lapse of time or both
would constitute a default by either Xxxxxx or any Xxxxxx Subsidiary
thereunder, except for such defaults that in the aggregate would not constitute
a Xxxxxx Material Adverse Effect. To the best knowledge of Xxxxxx and each
Xxxxxx Subsidiary, the landlord under each Lease is not in default thereunder
and there does not exist any event which with notice or the lapse of time or
both would constitute a default by such landlord thereunder, except for such
defaults that in the aggregate would not constitute a Xxxxxx Material Adverse
Effect. To the best knowledge of Xxxxxx and any Xxxxxx Subsidiary, each
landlord under the Leases has good and marketable fee simple title to the
premises leased under the Lease, subject to the leasehold interest of the
lessee under the Lease. As to all such real property owned or leased by Xxxxxx
or any Xxxxxx Subsidiary (the "Property"), except as set forth in the
Disclosure Memorandum:
(i) Xxxxxx and all Xxxxxx Subsidiaries have adequate rights
of ingress and egress to all such Property;
(ii) to the best knowledge of Xxxxxx and each Xxxxxx
Subsidiary, there is no interest of any third party which impairs
the current use of the Property by Xxxxxx or any Xxxxxx
Subsidiary;
(iii) the Property, as currently used by Xxxxxx or any Xxxxxx
Subsidiary, is not in violation of any existing applicable,
federal, state or local statute, ordinance, order, requirement,
law, rule or regulation (including, without limitation, building
or environmental laws) affecting the Property which in any
material respect would affect the value thereof or materially
interfere with or materially impair the present and continued use
thereof in the usual and normal conduct of the business of Xxxxxx
or any Xxxxxx Subsidiary;
17
(iv) no notice of violation of any applicable, federal, state
or local statute, law, ordinance, rule, regulation, order or
requirement, or of any covenant, condition, restriction or
easement, affecting the Property or with respect to the use or
occupancy of the Property, has been given to Xxxxxx or any Xxxxxx
Subsidiary (or, to their knowledge, any of the lessors) by any
governmental authority having jurisdiction over the Property or by
any other person entitled to enforce the same;
(v) to the best knowledge of Xxxxxx and each Xxxxxx
Subsidiary, there is no (A) intended public improvement which may
involve any charge being levied or assessed or which may result in
the creation of any lien upon the Property, (B) intended or
proposed, federal, state or local statute ordinance, order,
requirement, law or regulation (including, but not limited to,
zoning changes) which may adversely affect the current or proposed
use of the Property, or (C) suit, action, or legal,
administrative, arbitration or other proceeding (including,
without limitation, any proceeding for condemnation) or
governmental investigation pending, threatened or contemplated
against or affecting the Property or the use thereof of any part;
(vi) there are no encroachments onto the Property or any
improvements on any adjoining property which in any material
respect would affect the value thereof or interfere with or
materially impair the present and continued use thereof in the
usual and normal conduct of the business of Xxxxxx or any Xxxxxx
Subsidiary, and no improvement on the Property materially
encroaches on any adjoining property or any easements or
right-of-ways on, under or over the Property;
(vii) neither Xxxxxx nor any Xxxxxx Subsidiary is in breach
of any, and each of them is currently complying in all material
respects with all, covenants, conditions, restrictions, easements
and similar matters affecting the Property;
(viii) the buildings and improvements located on the
Property, and the present use thereof, comply with all city, state
and local zoning laws, ordinances and regulations; and
(ix) the utilities (including electrical, gas, water supply
and sewage) and the waste disposal facilities available at each
such Property have been adequate for the business of Xxxxxx and
the Xxxxxx Subsidiaries as currently conducted and as proposed to
be conducted in the future.
(b) Fixtures and Equipment. Xxxxxx or a Xxxxxx Subsidiary, as the case
may be, has good and marketable fee simple title to all fixtures, structures
and leasehold improvements on the Real Property (together with all fixtures,
structures and leasehold improvements on the real property that is the subject
of the Leases, the "Fixtures") and to all machinery and equipment, computers,
office supplies, furniture, parts, transportation equipment and other tangible
personal property (other than Inventory (hereinafter defined)) used in the
businesses of Xxxxxx and the Xxxxxx Subsidiaries (the "Equipment"), free and
clear of all Encumbrances other than those set forth in the Disclosure
Memorandum (the "Permitted Encumbrances").
(c) Inventory. Xxxxxx and each Xxxxxx Subsidiary has good and marketable
fee simple title to all of their inventories of manufactured housing units
reflected on the balance sheet included in the consolidated financial
statements for Xxxxxx and the Xxxxxx Subsidiaries for the quarter ended
September 27, 1997 (the "September 27, 1997 Balance Sheet") and all furniture,
furnishings, raw materials, appliances, parts, tools and maintenance supplies
and other personal
18
property related thereto as reflected in the September 27, 1997 Balance Sheet
plus additions made to such inventories and other personal property related
thereto since September 27, 1997 and less such inventories and other personal
property related thereto disposed of in the ordinary course of business since
September 27, 1997 (the "Inventory"), free and clear of all Encumbrances except
those set forth in the Disclosure Memorandum. Each item of Inventory is in
good condition, not obsolete or materially defective and useable or saleable in
the usual and ordinary course of business.
(d) Receivables. At the Closing, all accounts receivable of Xxxxxx and
any Xxxxxx Subsidiary reflected on the September 27, 1997 Balance Sheet plus
additional accounts receivable of Xxxxxx or any Xxxxxx Subsidiary arising after
September 27, 1997 and less any accounts receivables collected in full after
September 27, 1997 (the "Receivables") will constitute valid and enforceable
claims of Xxxxxx or the Xxxxxx Subsidiary, as the case may be, enforceable by
it in accordance with the terms of the instruments or documents creating them,
subject to the effect of any applicable bankruptcy, reorganization, insolvency,
moratorium or similar laws affecting creditors' rights generally and subject to
the effect of general principles of equity, including without limitation
concepts of materiality, reasonableness, good faith and the possible
unavailability of specific performance or injunctive relief, regardless of
whether considered in a proceeding in equity or at law.
(e) Intangible Property. Xxxxxx has the right to use all material trade
names, trademarks, service marks, copyrights, patents, and registrations
thereof or applications therefor, and trade secrets, secret processes, customer
lists, inventions, formula and other intellectual property used by Xxxxxx, all
of which are set forth in the Disclosure Memorandum (collectively, the
"Intangible Property"), in connection with its business as and where now
conducted and as and where such Intellectual Property is now used, and, except
as set forth in the Disclosure Memorandum neither Xxxxxx nor any Xxxxxx
Subsidiary is a party to any agreement with any other person or entity with
respect to the use of any of the Intangible Property. Each of Xxxxxx and the
Xxxxxx Subsidiaries owns or possesses all licenses and permits, and all rights
to use all trademarks, trade names, software or copyrights necessary or being
used to conduct its business as and where now conducted and has not received
any notice of conflict with the asserted rights of any others. An accurate and
complete listing of all such trademarks, trade names, software or copyrights
owned by, registered, licensed or used by Xxxxxx or any Xxxxxx Subsidiary which
are material to the business of Xxxxxx and each Xxxxxx Subsidiary taken as a
whole is set forth in the Disclosure Memorandum. There are no instances where
it has been held or claimed, and, to the best knowledge of Xxxxxx and each
Xxxxxx Subsidiary, there is no basis upon which a valid claim may be made, that
any of the Intangible Property or any use of the Intangible Property by Xxxxxx
or any Xxxxxx Subsidiary infringes upon any rights of any third party. To the
best knowledge of Xxxxxx and the Xxxxxx Subsidiaries there has not been any
material infringement or alleged infringement by any person of any of the
Intangible Property.
(f) Contract Rights. The Disclosure Memorandum sets forth all of the
existing executory material contracts, agreements and commitments of Xxxxxx and
each Xxxxxx Subsidiary of any kind or nature (excluding "Dealer Agreements" as
hereinafter defined), including without limitation contracts, agreements and
commitments which require Xxxxxx or any Xxxxxx Subsidiary to make payments
thereunder during the next 12 months from the date of this Agreement in excess
of $500,000 and including without limitation all joint venture, partnership and
participation
19
agreements, license agreements, leases, notes or other evidences of
indebtedness, security agreements, mortgages, noncompetition agreements, and
powers of attorney, whether written or unwritten, and all material supply
agreements (collectively, the "Material Contracts"). The rights of Xxxxxx or
any Xxxxxx Subsidiary, as the case may be, under all Material Contracts are
valid and enforceable by Xxxxxx or the Xxxxxx Subsidiary, as the case may be,
in accordance with their respective terms except as such enforceability may be
limited by applicable bankruptcy, insolvency and other similar laws affecting
creditors' rights generally and by such principles of equity as may affect the
availability of equitable remedies. Neither Xxxxxx or the Xxxxxx Subsidiary,
as the case may be, is in default in any material respects (nor does any
circumstance exist which, with notice or the passage of time or both, would
result in such a default) under the Material Contracts (including without
limitation the Leases). To the best knowledge of Xxxxxx and each Xxxxxx
Subsidiary, the other party to each Material Contract is not in default
thereunder in any material respect (nor does any circumstance exist which, with
notice or the passage of time or both, would result in such a default). All
amendments or supplements to the Material Contracts and all notices with
respect to such Material Contracts are set forth in the Disclosure Memorandum.
4.13 Condition of Tangible Assets.
(a) Fixtures. The Fixtures are in good condition and repair, ordinary
wear and tear excepted.
(b) Environmental Matters.
For purposes of this Agreement, the following terms shall have the
following meanings:
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S. C. Sections 9601 et seq.;
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations or proceedings relating in any way
to any Environmental Law (for purposes of (i) and (ii) below, "Claims") or to
any material provision of any permit issued under any such Environmental Law,
including without limitation:
(i) any and all Claims by governmental or regulatory authorities for
investigation, oversight, enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law; and
(ii) any and all Claims by any third party seeking damages, response
costs, contribution, indemnification, cost recovery, compensation or injunctive
relief resulting from Hazardous Materials, relating to violations or alleged
violations of Environmental Laws, or arising from alleged injury or threat of
injury to health, safety or the environment arising from Hazardous Materials;
"Environmental Law" means any federal, state or local statute, law, rule,
regulation, ordinance, code, written policy, or rule of common law now in
effect and as amended, and any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent, decree or
judgment, relating to the environment, health or safety, or Hazardous
Materials, including without limitation: CERCLA; the Toxic Substances Control
Act, as amended, 15 U.S.C. Sections 2601 et seq.; the Clean Air Act, as
amended, 42 U.S.C. Sections 7401 et seq.; the Federal Water Pollution
Control Act, as amended, 33 U.S.C. Sections 1251 et seq.; the Federal
Insecticide, Fungicide, and Rodenticide Act, as amended, 7 U.S.C. Sections 136,
et seq.; the Hazardous Materials
20
Transportation Act, as amended, 49 U.S.C. Sections 1801 et seq.; the
Resource Conservation and Recovery Act, as amended, 42 U.S.C. Sections
6901 et seq.; ("RCRA"); the Safe Drinking Water Act, 42 U.S.C. Sections
300f et seq.; the Occupational Safety and Health Act 29 U.S.C. Sections
651 et seq.; and any similar state or local law;
"Hazardous Materials" shall mean "hazardous substances" as defined in
Section 101(14) of CERCLA, "hazardous waste" and "hazardous constituents" as
defined in RCRA and its implementing regulations, and any other substances,
wastes or materials defined as pollutants, contaminants, toxic, hazardous or
harmful or dangerous to human health or the environment under any federal,
state or local law, rules, regulation, ordinance, code or written policy,
including, but not limited to:
(i) any petroleum or petroleum products, chlorinated solvents,
explosives, radioactive materials, asbestos, asbestos products,
urea formaldehyde foam insulation, polychlorinated biphenyl
(PCB's), including transformers or other equipment that contain
dielectric fluid containing detectable levels of polychlorinated
biphenyl's, and radon gas;
(ii) any hazardous, toxic or dangerous waste, substance or
material defined as such, or as harmful or dangerous to human
health or the environment, in (or for purposes of) any current
Environmental Law or currently listed as such pursuant to any
Environmental Law; and
(iii) any other chemical, material or substance, the addition of
which to the air, earth, surface water or groundwater is
prohibited, limited or regulated by any Environmental Law;
"Improperly" means done in any manner that poses threat to human health,
safety or the environment;
"Xxxxxx Property" shall mean (i) any real property and improvements
presently owned, leased, used, operated or occupied by Xxxxxx or any Xxxxxx
Subsidiary, and (ii) any other real property and improvements at any previous
time owned, leased, used, operated or occupied by Xxxxxx or any Xxxxxx
Subsidiary (the "Former Property"); provided, however, that the representations
and warranties in this Section 4.13 relating to the condition of any Former
Property during the periods occurring after Xxxxxx'x or a Xxxxxx Subsidiary's
ownership, lease, use, operation or occupation thereof shall be made on the
basis of the best knowledge of Xxxxxx or the Xxxxxx Subsidiary;
"Release" means disposing, depositing, discharging, injecting, spilling,
leaking, leaching, dumping, emitting, escaping, emptying, seeping, placing and
the like, into or upon any land or water (including surface or ground water) or
air, or otherwise entering into in to the environment.
Except as set forth in the Disclosure Memorandum, to the best knowledge of
Xxxxxx and each Xxxxxx Subsidiary:
21
(i) Hazardous Materials have not at any time in any material
respect been illegally generated, used, treated or stored on, or
transported to or from, any Xxxxxx Property;
(ii) no asbestos-containing materials or other Hazardous
Materials have been installed in or affixed to structures on any
Xxxxxx Property;
(iii) Hazardous Materials have not at any time in any
material respect been disposed of or otherwise Released on any
Xxxxxx Property, and Hazardous Materials used on or generated at
any Xxxxxx Property have not at any time in any material respect
been illegally or Improperly disposed of on any other property;
(iv) Xxxxxx and each Xxxxxx Subsidiary is currently, and has
at all times in the past (except for such past infractions for
which Xxxxxx and the Xxxxxx Subsidiaries are expected to have no
current liability) been, in compliance in all material respects
with all applicable Environmental Laws and the material
requirements of any permits issued under such Environmental Laws
with respect to any Xxxxxx Property;
(v) there are no pending or threatened Environmental Claims
against Xxxxxx, any Xxxxxx Subsidiary or any Xxxxxx Property and
there have been no past Environmental Claims against Xxxxxx, any
Xxxxxx Subsidiary or any Xxxxxx Property except (A) those set
forth in the Disclosure Memorandum and (B) those which have been
finally settled more than ten (10) years from the date hereof and
for which Xxxxxx and the Xxxxxx Subsidiaries have no current
liability;
(vi) there are no facts or circumstances, conditions or
occurrences on any Xxxxxx Property or otherwise that could
reasonably be anticipated by Xxxxxx or any Xxxxxx Subsidiary:
(A) to form the basis of an Environmental Claim against
Xxxxxx or any Xxxxxx Property; or
(B) to materially interfere with the ownership,
occupancy or use of such Xxxxxx Property as currently used,
or the ability to transfer such Xxxxxx Property, or the
value of such Xxxxxx Property, under or as a result of any
Environmental Law;
(vii) there are not now, nor have there been at any time, any
aboveground or underground storage tanks located on any Xxxxxx Property.
(c) Equipment. All of the Equipment is in good condition and repair,
ordinary wear and tear excepted.
(d) Inventory. All of the Inventory consists of items of a quality and
quantity usable in the ordinary course of Xxxxxx'x and any Xxxxxx Subsidiary's
business.
4.14 Leases.
Except as set forth in the Disclosure Memorandum, none of the Property or
Equipment is leased by Xxxxxx or any Xxxxxx Subsidiary to any other party and,
except for the premises subject to the Leases, none of the real or tangible
personal property with a value of $50,000 or more used in the business of
Xxxxxx or any Xxxxxx Subsidiary is leased by them from any other party.
22
4.15 Adequacy of Assets.
Xxxxxx and the Xxxxxx Subsidiaries own or otherwise have the right to use
all of the assets and rights used in and forming a part of the business of
Xxxxxx and the Xxxxxx Subsidiaries. Except as set forth in the Disclosure
Memorandum (including the Xxxxxx capital expenditure budget for the current
fiscal year included therein) and capital expenditures for any building
expansions in Xxxxxx'x 1999 fiscal year, Xxxxxx and the Xxxxxx Subsidiaries do
not have any current plans to make any individual capital expenditures in
excess of $250,000 during the two fiscal years beginning June 29, 1997.
4.16 Arms-Length Transaction.
Except as set forth in the Disclosure Memorandum, since June 28, 1997, all
of the material transactions with other persons by Xxxxxx or a Xxxxxx
Subsidiary have been conducted on an arms-length basis. Except as set forth in
the Disclosure Memorandum, to the best knowledge of Xxxxxx and each Xxxxxx
Subsidiary, none of the officers or directors of Xxxxxx or their respective
Affiliates or Relatives (as such capitalized terms are hereafter defined) has
any direct or indirect interest, ownership (other than through non-controlling
investments in securities of publicly-held corporations) or profit
participation in businesses which are competitors or potential competitors of
Xxxxxx or a Xxxxxx Subsidiary. Except as set forth in the Disclosure
Memorandum, neither Xxxxxx nor a Xxxxxx Subsidiary has any outstanding loans or
other advances to any officer, director or employee of Xxxxxx or a Xxxxxx
Subsidiary or their respective Affiliates or Relatives. Except as set forth in
the Disclosure Memorandum, to the best knowledge of Xxxxxx and each Xxxxxx
Subsidiary, none of the shareholders, officers or directors of Xxxxxx or any
Xxxxxx Subsidiary or their respective Affiliates or Relatives is an Affiliate
of any Dealer (as hereinafter defined) or of any other entity that has a
material business relationship with Xxxxxx or any Xxxxxx Subsidiary (a
"Material Business Entity"). "Affiliate" shall mean any person or entity which
(a) directly or indirectly controls, is controlled by or is under common
control with a specified person or entity, (b) owns or controls 5% or more of
the outstanding equity interests of a specified entity or (c) is an officer,
director, general partner, trustee, manager, administrator, representative or
agent of a specified entity. As used in this definition, the term "control"
means possession, directly or indirectly (through one or more intermediaries),
of the power to direct or cause the direction of management and policies of an
entity through ownership of voting securities or other ownership interests,
contract, voting trust or otherwise. "Relative" means any brother or sister
(whether by whole or half blood or adoption), spouse or lineal ascendant or
descendant.
4.17 Lawfully Operating.
Except as set forth in the Disclosure Memorandum, Xxxxxx and each Xxxxxx
Subsidiary have been and currently are conducting their business, and the
Property has been and now is being used and operated, in compliance with all
statutes, regulations, laws, orders, covenants, restrictions or plans of
federal, state, regional, county or municipal authorities, agencies or board
applicable to the same.
4.18 Litigation.
All pending and, to the best knowledge of Xxxxxx and each Xxxxxx
Subsidiary, threatened lawsuits or administrative proceedings or investigations
against Xxxxxx and any Xxxxxx Subsidiary are set forth in the Disclosure
Memorandum. There are currently no pending, or, to the best knowledge of
Xxxxxx and each Xxxxxx Subsidiary, threatened, lawsuits or administrative
23
proceedings or investigations against Xxxxxx or any Xxxxxx Subsidiary or to
which any of their assets are subject, which, if adversely determined, could
have a Xxxxxx Material Adverse Effect or prevent or delay consummation of the
Merger in any material respect, or otherwise prevent Xxxxxx from performing its
obligations under this Agreement in any material respect. Neither Xxxxxx nor
any Xxxxxx Subsidiary is subject to any currently existing order, writ,
injunction, or decree relating to its operations. Except as set forth in the
Disclosure Memorandum there are no material "loss contingencies" (as defined in
Statement of Financial Accounting Standards No. 5 issued by the Financial
Accounting Standards Board in March 1975 ("SFAS 5")), which would be required
by SFAS 5 to be disclosed or accrued in consolidated financial statements of
Xxxxxx and the Xxxxxx Subsidiaries were such statements prepared at the time
this warranty is made or deemed made.
4.19 State Takeover Laws.
No action is necessary on the part of Xxxxxx or any Xxxxxx Subsidiary to
exempt any of the transactions contemplated by this Agreement from any
applicable "moratorium," "control share," "fair price," "business combination"
and other anti-takeover laws of any state, including Article 23-1-42 of the
IBCL.
4.20 Labor Matters.
Except as set forth in the Disclosure Memorandum, since December 31, 1992,
neither Xxxxxx nor any Xxxxxx Subsidiary has been a party to any collective
bargaining agreement or has been the subject of any union activity or labor
dispute, and there has not been any strike of any kind called or, to the best
knowledge of Xxxxxx and each Xxxxxx Subsidiary, threatened to be called against
Xxxxxx or any Xxxxxx Subsidiary. To the best knowledge of Xxxxxx and each
Xxxxxx Subsidiary, neither Xxxxxx nor any Xxxxxx Subsidiary has violated any
applicable federal or state law or regulation relating to labor or labor
practices or has any liability to any of its employees, agents, or consultants
in connection with grievances by, or the termination of, such employees, agents
or consultants.
4.21 No Brokers.
Except as set forth in the Disclosure Memorandum, neither Xxxxxx nor any
Xxxxxx Subsidiary has entered into any contract, arrangement or understanding
with any person or firm which may result in the obligation of Xxxxxx or a
Xxxxxx Subsidiary or Oakwood or Merger Sub to pay any finder's fees, brokerage
or agent's commissions or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the transactions
contemplated hereby. Neither Xxxxxx nor any Xxxxxx Subsidiary is aware of any
claim for payment of any finder's fees, brokerage or agent's commissions or
other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated hereby.
4.22 Bank Accounts.
The Disclosure Memorandum sets forth all bank accounts, vaults and safe
deposit boxes used by, or in the name of, Xxxxxx or any Xxxxxx Subsidiary,
including the account, vault or box number, the institution at which the
account, vault or box is maintained, and the signatories authorized for the
account or persons authorized to have access to the vault or box.
4.23 Insurance.
Xxxxxx and the Xxxxxx Subsidiaries have fire and casualty insurance
policies with extended coverage (subject to certain deductibles) sufficient to
allow them to replace any of their properties or assets that might be damaged
or destroyed. Xxxxxx and the Xxxxxx Subsidiaries have business interruption
insurance policies with coverage sufficient to allow them to recover losses
associated with any business interruption. The Disclosure Memorandum sets
forth all policies of insurance now in effect covering the assets, properties
and business of Xxxxxx and the Xxxxxx Subsidiaries and all life insurance
policies maintained by them and Xxxxxx has delivered an accurate and complete
24
copy of each of such policies to Oakwood. Neither Xxxxxx or any Xxxxxx
Subsidiary has done anything by way of action or inaction that invalidates any
of such policies in whole or in part where such invalidation would have,
individually or in the aggregate, a Xxxxxx Material Adverse Effect.
4.24 Warranty and Product Liability Matters.
Except as set forth in the Disclosure Memorandum, the products and
services provided by Xxxxxx and the Xxxxxx Subsidiaries are in compliance in
all material respects with and meet all express and implied warranties and the
requirements and standards of all federal and state laws and regulations
applicable to the sale or provision of such products and services, including
without limitation the National Manufactured Housing Construction and Safety
Standards Act of 1974, the Xxxxxxxx-Xxxx Warranty Federal Trade Commission
Improvement Act and the regulations promulgated by the Consumer Products Safety
Commission. Except as set forth in the Disclosure Memorandum, no product or
service warranty or liability claims are pending or, to the best knowledge of
Xxxxxx and each Xxxxxx Subsidiary, threatened against Xxxxxx or any Xxxxxx
Subsidiary or in respect of products or services sold or provided by it, except
such claims that in the aggregate would not have a Xxxxxx Material Adverse
Effect.
4.25 Warranty, Repurchase and Other Service Obligations.
To the best knowledge of Xxxxxx and each Xxxxxx Subsidiary, (a) all
material warranty obligations of Xxxxxx or any Xxxxxx Subsidiary and all
material warranty contracts, agreements, understandings or arrangements to
which Xxxxxx or any Xxxxxx Subsidiary is a party or by which any of its or
their property or assets is bound, including without limitation express
warranties, implied warranties and warranties established by a course of
dealing and (b) all material service and repurchase contracts, agreements,
understandings or arrangements to which Xxxxxx or any Xxxxxx Subsidiary is a
party or by which any of its or their property or assets is bound are set forth
in the Disclosure Memorandum and true and complete copies of any such
agreements have heretofore been delivered to Oakwood.
4.26 Dealer Arrangements.
The terms of any loans to any dealer to whom Xxxxxx or a Xxxxxx
Subsidiary currently sells manufactured homes (a "Dealer") are set forth in the
Disclosure Memorandum. Any agreement, understanding or arrangement between
Xxxxxx and/or any Xxxxxx Subsidiary, on the one hand, and a Dealer, on the
other hand, is referred to herein as a "Dealer Agreement". True and complete
copies of all written Dealer Agreements have heretofore been delivered to
Oakwood. The Disclosure Memorandum sets forth (a) a general description of the
arrangements generally applicable to the Dealers, including arrangements
providing for rebates, discounts or other payments or concessions to the
Dealers and (b) a list of the 25 Dealers who purchased the greatest number of
manufactured homes from Xxxxxx during the fiscal year ended June 28, 1997 and
during the 5 month period beginning June 29, 1997 (based on the dollar amount
of such purchases and ranked in descending order) and a description of the
specific arrangements to provide any rebates, discounts or other payments or
concessions to each such Dealer. The rights of Xxxxxx or any Xxxxxx Subsidiary
under each Dealer Agreement are valid and enforceable by Xxxxxx or the Xxxxxx
Subsidiary, as the case may be, in accordance with their respective terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency and other similar laws affecting creditors' rights generally and by
such principles of equity as may affect the availability of equitable remedies.
Neither Xxxxxx nor any Xxxxxx Subsidiary, as the case may be, is in default
25
in any material respect (nor does any circumstance exist which, with notice or
the passage of time or both, would result in such a default) under the Dealer
Agreements. To the best knowledge of Xxxxxx and each Xxxxxx Subsidiary, the
other party to each Dealer Agreement is not in default thereunder in any
material respect (nor does any circumstance exist which, with notice or the
passage of time or both, would result in such a default). All amendments or
supplements to the Dealer Agreements and all notices received since July 1,
1997 with respect to such Dealer Agreements are set forth in the Disclosure
Memorandum. Except as set forth in the Disclosure Memorandum, no Dealer has
indicated in any written or oral communication to Xxxxxx or a Xxxxxx Subsidiary
that such Dealer has ceased to sell or otherwise deal in manufactured housing
of Xxxxxx or any Xxxxxx Subsidiary, is experiencing financial difficulties, or
is considering the cessation of business (or the material reduction in its
level of business) with Xxxxxx or any Xxxxxx Subsidiary or with Oakwood
following the Closing Date, or that Xxxxxx'x or any Xxxxxx Subsidiary's
relationship with such Dealer will be adversely affected by the transactions
contemplated by the Merger.
4.27 Guarantees.
Except as set forth in the Disclosure Memorandum, neither Xxxxxx or any
Xxxxxx Subsidiary is a guarantor or otherwise liable for any liability or
obligation (including indebtedness) of any other person.
4.28 Prospective Changes.
Except as set forth in the Disclosure Memorandum, Xxxxxx knows of no
impending changes in Xxxxxx'x or any Xxxxxx Subsidiary's business, assets,
liabilities, relations with employees, competitive situation or relations with
suppliers or customers, or in any governmental actions or regulations affecting
Xxxxxx'x and Xxxxxx Subsidiaries' business, which, if they occur, could have a
Xxxxxx Material Adverse Effect, except for (a) general economic conditions, (b)
matters having a similar effect on Oakwood and Xxxxxx, (c) matters of general
knowledge in the industry of which Oakwood should be aware due to the nature of
its business or (d) pending or adopted federal statutes, laws and regulations
with general applicability in the states where Oakwood currently does business.
4.29 Full Disclosure.
To the best knowledge of Xxxxxx and each Xxxxxx Subsidiary, all of the
information set forth in the Disclosure Memorandum and their representations
herein or in any Schedules and Exhibits hereto are true, correct, and complete
in all material respects and no written representation, warranty, or statement
made by Xxxxxx or any Xxxxxx Subsidiary in or pursuant to this Agreement
contains or will contain any untrue statement of a material fact or omits or
will omit to state any material fact necessary to make such representation,
warranty, or statement, in light of the circumstances under which it was made,
not misleading to Oakwood.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF OAKWOOD AND MERGER SUB
Oakwood and Merger Sub hereby jointly and severally represent and
warrant Xxxxxx that:
5.1 Organization and Qualification.
Each of Oakwood and Merger Sub is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation. Merger Sub has not
26
engaged in any activities other than in connection with the transactions
contemplated by this Agreement.
5.2 Authority Relative to this Agreement.
Each of Oakwood and Merger Sub has all necessary power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated herein. The execution and delivery of
this Agreement by Oakwood and Merger Sub and the consummation by Oakwood and
Merger Sub of the transactions contemplated herein have been duly and validly
authorized by all necessary corporate action and no other corporate proceedings
on the part of Oakwood or Merger Sub are necessary to authorize this Agreement
or to consummate the transactions contemplated herein (other than the filing
and recordation of the appropriate merger documents as required by Indiana
law). This Agreement has been duly and validly executed and delivered by
Oakwood and Merger Sub and, assuming the due authorization, execution and
delivery by Xxxxxx, constitutes a legal, valid and binding obligation of each
of Oakwood and Merger Sub, enforceable against them in accordance with its
terms, subject to the effect of any applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting creditors' rights generally
and subject, as to enforceability, to the effect of general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).
5.3 No Conflict: Required Filings and Consents.
(a) Except as set forth in Schedule 5.3 attached hereto, the execution
and delivery of this Agreement by Oakwood and Merger Sub do not, and the
performance of the transactions contemplated herein by Oakwood and Merger Sub
will not, (i) conflict with or violate the Articles of Incorporation or Bylaws
of Oakwood or Merger Sub, (ii) conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to Oakwood or Merger Sub or by
which any property or asset of Oakwood or Merger Sub is bound or affected, or
(iii) result in any breach of or constitute a default (or any event which with
notice or the passage of time or both would result in a default) under, result
in the loss of a material benefit under or give to others any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or other encumbrance on any property or asset of Oakwood or
Merger Sub pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which Oakwood or Merger Sub is a party or by which Oakwood or Merger Sub or
any property or asset of Oakwood or Merger Sub is bound or affected.
(b) The execution and delivery of this Agreement by Oakwood and Merger
Sub do not, and the performance of this Agreement by Oakwood and Merger Sub
will not, require any consent, approval, authorization or permit of, or filing
with or notification to, any Governmental Entity, except (i) for (A) the
pre-merger notification requirements of the HSR Act and (B) filing and
recordation of appropriate merger documents as required by Indiana law, and
(ii) where failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not prevent or delay
consummation of the Merger in any material respect, or otherwise prevent
Oakwood or Merger Sub from performing its obligations under this Agreement in
any material respect.
27
5.4 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated herein based upon arrangements made by, or on behalf
of, Oakwood.
5.5 Full Disclosure. To the best knowledge of Oakwood, all of the
written information provided by it and its representations herein or in the
Exhibits or any Schedules hereto are true, correct, and complete in all
material respects and no written representation, warranty, or statement made by
Oakwood in or pursuant to this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state any material fact
necessary to make such representation, warranty, or statement, in light of the
circumstances under which it was made, not misleading to Xxxxxx.
ARTICLE 6
COVENANTS
6.1 Covenants of Oakwood and Xxxxxx. During the period from the date
hereof and continuing until the Effective Time (except as expressly
contemplated or permitted hereby, or to the extent Xxxxxx consents in writing
in the case of Oakwood's obligations and to the extent Oakwood consents in
writing in the case of Xxxxxx'x obligations), each of Oakwood and Xxxxxx
covenants with the other that, insofar as the obligations relate to it:
(a) Except as and to the extent required by law, Oakwood and Xxxxxx and
their respective subsidiaries hereby agree not to disclose or use, and each
shall cause its representatives not to disclose or use, any confidential
information with respect to the other party(ies) hereto furnished, or to be
furnished, by such other party(ies) or their representatives in connection
herewith at any time or in any manner other than in connection with its
evaluation of the Merger. Except as required by law, none of Xxxxxx or Oakwood
or their respective representatives shall make any public statements regarding
the Merger or this Agreement without the prior approval of the other party.
(b) As soon as practicable Oakwood, Merger Sub and Xxxxxx shall
cooperate and use their respective best efforts to file a Notification and
Report Form for Certain Mergers and Acquisitions under the HSR Act with the
Department of Justice and the Federal Trade Commission. Oakwood and Xxxxxx
shall cooperate and consult with each other with respect to the preparation of
the Notification and Report Forms and any other submissions, including but not
limited to responses to written or oral comments or requests for additional
information or documenting material by the Federal Trade Commission or the
Antitrust Division of the Department of Justice, required to be made pursuant
to the HSR Act in connection with the transactions contemplated hereby.
(c) Oakwood, Merger Sub and Xxxxxx shall cooperate and use their
respective best efforts (i) to prepare all documentation, to effect all filings
and to obtain all permits, consents, approvals and authorizations of all third
parties and other governmental authorities necessary to consummate the
transactions contemplated by this Agreement and (ii) to cause the transactions
contemplated by this Agreement to be consummated as expeditiously as is
reasonably practicable.
(d) Until July 1, 1998, Oakwood and Xxxxxx and their respective
subsidiaries shall not solicit employment of any employees of the other party
or its respective subsidiaries.
6.2 Covenants of Xxxxxx.
28
Xxxxxx covenants and agrees that between the date hereof and continuing until
the Effective Time (except as expressly contemplated or permitted hereby, or to
the extent that Oakwood shall otherwise consent in writing):
(a) Xxxxxx and each Xxxxxx Subsidiary shall carry on and conduct their
respective businesses only in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted and shall use all
reasonable efforts to preserve intact their present business organizations,
maintain their rights and franchises and preserve their relationships with
Dealers, customers, suppliers and others having business dealings with them to
the end that their goodwill and ongoing businesses shall not be impaired in any
material respect at the Effective Time.
(b) From the date hereof to the Effective Time, each of Xxxxxx and the
Xxxxxx Subsidiaries shall allow all designated officers, attorneys, accountants
and other representatives of Oakwood access at all reasonable times during
regular business hours to the records and files, correspondence, audits,
properties, personnel and accountants, as well as to all information relating
to commitments, contracts, titles and financial position, or otherwise
pertaining to the business and affairs, of Xxxxxx and the Xxxxxx Subsidiaries.
(c) Xxxxxx agrees (i) that it shall not, and shall direct and use its
best efforts to cause Xxxxxx'x directors, officers, employees, shareholders,
advisors, accountants and attorneys (the "Representatives"), including such
Representatives of any of Xxxxxx'x affiliated entities or persons, not to
initiate, solicit or encourage, directly or indirectly, any inquiries or the
making or implementation of any proposal or offer (including, without
limitation, any proposal or offer to its shareholders) with respect to a
merger, share exchange, acquisition, consolidation or similar transaction
involving, or any purchase of all or any significant portion of the assets or
any equity securities (whether to be sold by Xxxxxx or any of its shareholders)
of Xxxxxx or any Xxxxxx Subsidiary (any such proposal or offer being
hereinafter referred to as an "Acquisition Proposal") or engage in any
negotiations or discussions concerning, or provide any confidential information
or data to, or have any discussions with, any person relating to an Acquisition
Proposal, or otherwise facilitate any effort or attempt to make or implement an
Acquisition Proposal; (ii) that it will immediately cease and cause to be
terminated any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any of the foregoing and will take
the necessary steps to inform the individuals or entities referred to above of
the obligations undertaken in this Section 6.2(c); and (iii) that it will
notify Oakwood immediately if any such inquiries or proposals are received by,
any such information is requested from, or any such negotiations or discussions
are sought to be initiated or continued with, it; provided, however, that
nothing contained in this Section 6.2(c) shall prohibit the Board of Directors
of Xxxxxx from furnishing information to, or entering into discussions or
negotiations with, or otherwise facilitating any effort or attempt to make or
implement an Acquisition Proposal with, any person or entity that after the
date hereof makes an unsolicited written, bona fide proposal (an "Unsolicited
Proposal") to acquire Xxxxxx or its assets pursuant to a merger, consolidation,
share exchange, sale of stock or sale of assets or other similar transaction,
if, and only to the extent that (A) the Board of Directors of Xxxxxx receives
the written opinion of counsel that such action is necessary for the Board of
Directors of Xxxxxx to comply with its fiduciary duties to shareholders under
applicable law and (B) prior to furnishing such information to, or entering
into discussions or negotiations with, such person or entity, Xxxxxx provides
reasonable notice to Oakwood to the effect that it is furnishing information
to, or entering into discussions or negotiations with, or
29
otherwise facilitating any effort or attempt to make or implement an
Acquisition Proposal with, such person or entity.
(d) Xxxxxx shall use its best efforts to obtain and furnish to Oakwood
prior to the Effective Time the written consents required as a closing
condition pursuant to Section 7.3(f).
(e) Xxxxxx shall cause a meeting of its shareholders to be duly called
and held as soon as reasonably practicable after the date hereof for the
purpose of considering and acting upon approval of the Plan of Merger. Xxxxxx
will, through its Board of Directors, recommend to its shareholders approval of
the Plan of Merger, unless the Board of Directors determines, after
consultation with its legal and financial advisors, that such recommendation
would be inconsistent with its performance of its fiduciary duties under
applicable law. In connection with such meeting, Xxxxxx shall prepare and file
an appropriate proxy statement in accordance with the requirements of the
Exchange Act and the rules and regulations thereunder (the "Proxy Statement")
and mail it to Xxxxxx'x shareholders. The form and content of the Proxy
Statement shall be reasonably satisfactory to Oakwood and its counsel. Xxxxxx
and Oakwood will promptly advise each other if, at any time before the date of
Xxxxxx'x shareholders meeting or the Effective Time, it becomes aware that the
Proxy Statement contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements contained therein, in the light of the circumstances under which
they were made, not misleading. In such event, Xxxxxx or Oakwood, as the case
may be, will provide the others with the information needed to correct such
misstatement or omission. Oakwood will furnish to Xxxxxx for inclusion in the
Proxy Statement all such information relating to Oakwood or Merger Sub as
Xxxxxx or its counsel shall reasonably request. Xxxxxx shall notify Oakwood
promptly of the receipt by it of any comments of the SEC and of any requests or
supplements to the proxy Statement and will supply Oakwood with copies of all
correspondence between it and its representatives, on the one hand, and the SEC
or the members of its staff, on the other hand, with respect to the Proxy
Statement.
(f) Xxxxxx and the Xxxxxx Subsidiaries will make all normal and
customary repairs, replacements, and improvements to their facilities, and,
except with the prior consent of Oakwood, will not dispose of any capital
assets with a fair market value in excess of $50,000 other than Xxxxxx'x idle
facility in Ellaville, Georgia and a tract of approximately 2 acres in Redwood
Falls, Minnesota.
(g) Without limiting the generality of the covenants set forth in
Section 6.2(a), neither Xxxxxx or any Xxxxxx Subsidiary will:
(i) change any provision of the Articles of Incorporation or the
Bylaws or equivalent organizational documents of Xxxxxx or any Xxxxxx
Subsidiary;
(ii) change the number of shares of the authorized, issued or
outstanding capital stock of Xxxxxx or any Xxxxxx Subsidiary other than
as the result of the issuance of shares of Xxxxxx Common Stock in
connection with the exercise of a vested Xxxxxx Stock Option, including
any issuance, purchase, redemption, split, combination or
reclassification thereof, or issue or grant any option, warrant, call,
commitment, subscription, right or agreement to purchase relating to the
authorized or issued capital stock of Xxxxxx or any Xxxxxx Subsidiary, or
declare, set aside or pay any dividend or other distribution in cash or
in kind with respect to the outstanding capital stock of Xxxxxx or any
Xxxxxx Subsidiary;
(iii) incur any liabilities or obligations, whether directly or
indirectly, or by way of guaranty, and whether or not evidenced by any
note, bond, debenture, or similar instrument, except in the ordinary
course of business consistent with past practices and prior periods;
30
(iv) except as set forth in the Disclosure Memorandum (including the
Xxxxxx capital expenditure budget for the current fiscal year, make any
capital expenditures other than reasonable expenditures necessary to
maintain existing assets in good working order and repair, reasonable
wear and tear excepted;
(v) pay any bonuses to any executive officer of Xxxxxx or any Xxxxxx
Subsidiary except as set forth in the Disclosure Memorandum, enter into
any new or amend any existing employment agreement with any person; adopt
any new or amend in any respect any existing Plan, except as may be
otherwise required by law; grant any increase in compensation or benefits
of any kind to its employees, officers or directors, except regularly
scheduled general increases in the ordinary course of business and
consistent with past practices and policies; or effect any change in any
respect in retirement benefits to any class of employees or officers,
except as otherwise required by law;
(vi) sell, mortgage, pledge, or otherwise dispose of or encumber any
asset owned by Xxxxxx or any Xxxxxx Subsidiary, other than sales,
mortgages, pledges, or other dispositions or encumbrances occurring in
the ordinary and regular course of business consistent with past
practices and prior periods;
(vii) increase or deplete inventories, incur or collect receivables,
or incur or pay trade payables or accrued liabilities in any manner other
than consistent with past practices and prior periods, and in the
ordinary course of business;
(viii) cancel without payment or satisfaction in full, waive or
extend the time for performance of, any notes, loans, or other
obligations inuring to the benefit of Xxxxxx or any Xxxxxx Subsidiary;
(ix) make any material modification of or amendment to any of the
contracts set forth in the Disclosure Memorandum pursuant to this
Agreement;
(x) fail to maintain in full force and effect all insurance now
carried by Xxxxxx or any Xxxxxx Subsidiary;
(xi) institute any changes in management policy of a significant
nature;
(xii) take any action or fail to take any action that, if taken or
omitted, would be required to be disclosed under the provisions of
Section 4.9 of this Agreement; or
(xiii) make any agreement or commitment by or on behalf of Xxxxxx to
do or take any of the actions referred to in the foregoing subparagraphs
(i) through (xii).
(h) Without the prior written consent of Oakwood, Xxxxxx shall not take
any action which would cause or would be likely to cause the conditions upon
the obligations of the parties hereto to effect the transactions contemplated
hereby not to be fulfilled, including without limitation, taking, causing to be
taken, or permitting or suffering to be taken or to exist any action, condition
or thing which would cause the representations and warranties made by Xxxxxx or
any
31
Xxxxxx Subsidiary herein not to be true, correct and accurate as of any time
between the date hereof and the Closing Date.
(i) Xxxxxx shall promptly provide to Oakwood monthly and quarterly
consolidated financial statements of Xxxxxx.
(j) Xxxxxx, prior to the Closing Date, shall deliver to Oakwood a copy of
any reports filed with the SEC subsequent to the date of this Agreement,
including without limitation its Quarterly Report on Form 10-Q for the quarter
ended in December 1997, a copy of which shall have been delivered to Oakwood
prior to its filing with the SEC and at least concurrently with a draft or copy
of such report being delivered to Xxxxxx'x counsel.
6.3 Covenants of Oakwood. Oakwood covenants and agrees that between the
date hereof and continuing until the Effective Time (except as expressly
contemplated or permitted hereby, or to the extent that Xxxxxx shall otherwise
consent in writing):
(a) Oakwood shall not take any action which would cause or tend to cause
the conditions upon the obligations of the parties hereto to effect the
transactions contemplated hereby not to be fulfilled, including without
limitation, taking, causing to be taken, or permitting or suffering to be taken
or to exist any action, condition or thing which would cause the
representations and warranties made by Oakwood herein not to be true, correct
and accurate as of any time between the date hereof and the Closing Date.
(b) Oakwood shall not, and it shall cause its subsidiaries and affiliates
to not, purchase any equity interest in Xxxxxx between the date hereof and
February 15, 1998.
(c) Oakwood has secured a commitment letter from NationsBank, N.A., and
NationsBanc Xxxxxxxxxx Securities, Inc. dated January 2, 1998, and Oakwood
agrees to negotiate in good faith with the agents for the lenders thereunder to
obtain the financing contemplated thereby and to use its reasonable best
efforts to complete and satisfy the conditions to financing set forth in such
commitment letter.
ARTICLE 7
CONDITIONS
7.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger shall be subject to
the fulfillment at or prior to the Closing Date of the following conditions:
(a) The Plan of Merger and the transactions contemplated hereby shall have
been approved in the requisite manner by the holders of the issued and
outstanding shares of capital stock of Xxxxxx entitled to vote thereon, which
approval and the voting thereon shall be certified by the Chief Executive
Officer of Xxxxxx.
(b) No action or proceeding shall have been instituted before a court or
other governmental body by any governmental agency or public authority to
restrain or prohibit the transactions contemplated by this Agreement or to
obtain an amount of damages or other material relief in connection with the
execution of the Agreement or the related agreements or the consummation of the
Merger; and no governmental agency shall have given notice to any party hereto
to the effect that consummation of the transactions contemplated by this
Agreement would
32
constitute a violation of any law or that it intends to commence proceedings
to restrain consummation of the Merger.
(c) All consents, authorizations, orders and approvals of (or filings or
registrations with) any governmental commission, board or other regulatory body
required in connection with the execution, delivery and performance of this
Agreement shall have been obtained or made, except for filings in connection
with the Merger and any other documents required to be filed after the
Effective Time and except where the failure to have obtained or made any such
consent, authorization, order, approval, filing or registration would not have
a material adverse effect on the business of Oakwood and Xxxxxx, taken as a
whole, following the Effective Time.
(d) The applicable waiting period under the HSR Act shall have expired or
been terminated.
(e) The Board of Directors of Xxxxxx shall have received the written
opinion of Chicago Corp., dated as of the date of the mailing of the Proxy
Statement, which opinion shall not have been withdrawn as of the Closing Date,
that the Merger Consideration is fair to the shareholders of Xxxxxx.
7.2 Conditions to Obligation of Xxxxxx to Effect the Merger. The
obligations of Xxxxxx to effect the Merger shall be subject to the fulfillment
at or prior to the Closing Date of the following conditions:
(a) Oakwood shall have performed its agreements contained in this
Agreement required to be performed on or prior to the Closing Date and the
representations and warranties of Oakwood and Merger Sub contained in this
Agreement shall be true and correct as of the Closing Date, and Xxxxxx shall
have received a certificate of the president or the chief financial officer of
Oakwood, dated the Closing Date, certifying to such effect.
(b) Xxxxxx shall have received a good standing certificate dated no
earlier than five days prior to the Effective Time for Oakwood from the
Secretary of State of North Carolina and for Merger Sub from the Secretary of
State of Indiana.
(c) Xxxxxx shall have received from Oakwood and Merger Sub certified
copies of all resolutions adopted by the Board of Directors and shareholders of
Oakwood and Merger Sub in connection with this Agreement and the transactions
contemplated hereby.
7.3 Conditions to Obligation of Oakwood and Merger Sub to Effect the
Merger. The obligations of Oakwood and Merger Sub to effect the Merger shall
be subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) Xxxxxx shall have performed its agreements contained in this Agreement
required to be performed on or prior to the Closing Date and the
representations and warranties of Xxxxxx contained in this Agreement shall be
true and correct as of the Closing and Oakwood shall have received a
certificate of the Chief Executive Officer of Xxxxxx, dated the Closing Date,
certifying to such effect to the best of such officer's knowledge and belief.
33
(b) From the date of this Agreement through the Effective Time, there
shall not have occurred any material adverse change in the financial condition,
business, operations or prospects of Xxxxxx or the Xxxxxx Subsidiaries, other
than any such change that affects both Xxxxxx and Oakwood in a substantially
similar manner.
(c) Oakwood shall have received a written opinion letter, dated as of the
Closing Date, from Xxxxx & Xxxxxxx substantially in the form of Exhibit C
attached hereto; provided, however, that such opinion letter may also contain
any additional opinions reasonably requested by Oakwood that relate to matters
that arise during Oakwood's due diligence review or otherwise in connection
with the consummation of this Agreement and the transactions contemplated
hereby.
(d) Oakwood shall have completed a review of Xxxxxx'x business operations
and any matters disclosed pursuant to this Agreement and the Disclosure
Memorandum (which review shall be completed no later than the later of January
23, 1998 or ten (10) days after the date on which the Disclosure Memorandum in
satisfactory form is received by Oakwood (the "Due Diligence Completion
Date")), and such review shall not disclose (i) any information or conditions
not previously disclosed to the public which an investor would reasonably
expect, in the aggregate, to have a Xxxxxx Material Adverse Effect or (ii)
information or conditions, which even though previously generally disclosed to
the public in whole or in part, indicates that the business, financial
condition or results of operations of Xxxxxx and the Xxxxxx Subsidiaries, taken
as a whole and excluding any changes or effects caused by changes in general
economic conditions or changes generally affecting Xxxxxx'x industry, is
materially adversely different from what would be reasonably expected by an
investor generally familiar with the Xxxxxx SEC Reports.
(e) Xxxxxx and the holder of each unexercised Xxxxxx Stock Option shall
have entered into agreements satisfactory to Oakwood as described in Section
3.5.
(f) Consents in form satisfactory to Oakwood shall have been obtained with
respect to those matters set forth in the Disclosure Memorandum as exceptions
to the representations in Section 4.5(a) other than those consents where the
failure to obtain such consents, in the aggregate or individually, would not,
in Oakwood's reasonable judgment, constitute or result in a Xxxxxx Material
Adverse Effect.
(g) Oakwood shall have received certificates of existence for Xxxxxx and
each Xxxxxx Subsidiary dated no earlier than five days prior to the Effective
Time from the Secretary of State of each of their respective states of
organization and from the Secretary of State of each state where Xxxxxx or any
Xxxxxx Subsidiary is qualified to do business.
(h) Oakwood shall have received Phase I environmental assessment reports
covering all of the real property owned or leased by Xxxxxx or any Xxxxxx
Subsidiary (which reports shall have been supplemented by additional Phases and
reports if deemed necessary by the environmental consultant preparing such
report to fully assess any environmental concerns) (the "Environmental
Assessment"), the completeness of which reports shall be acceptable to Oakwood
and shall not disclose remediation, clean-up, monitoring, removal and other
work deemed advisable by the consultant exceeding $500,000. The costs of any
Phase I environmental assessment reports (and any additional Phases and
reports) prepared at Oakwood's request will be paid by Oakwood. Oakwood shall
also have performed such additional due diligence with respect to any potential
environmental liability of Xxxxxx or any Xxxxxx Subsidiary as it deems
necessary or advisable and such additional due diligence shall not disclose any
condition, circumstance or liability that would have, in Oakwood's reasonable
judgment, either individually or in the aggregate, a Xxxxxx Material Adverse
Effect.
34
(i) The number of holders of Xxxxxx Common Stock who shall have asserted
or are entitled to assert their rights as a dissenter with respect to their
shares of Xxxxxx Common Stock and who shall not have withdrawn or lost such
dissenters' rights shall not exceed 7.5% of the aggregate number of outstanding
shares of Xxxxxx Common Stock.
(j) Oakwood shall have received from Xxxxxx certified copies of all
resolutions adopted by the Board of Directors and shareholders of Xxxxxx in
connection with this Agreement and the transactions contemplated hereby.
(k) Each of the officers and directors of Xxxxxx shall have resigned from
Xxxxxx.
(l) The following five employees of Xxxxxx shall have executed agreements,
in form reasonably satisfactory to Oakwood and such employee, providing for (a)
a two-year noncompetition period from the Effective Time, (b) a salary
continuation through the second anniversary of the Effective Time at such
employee's salary for Xxxxxx'x fiscal year ended June 28, 1997 if Oakwood
terminates such employee's employment for any reason, and (c) continuation of
Xxxxxx'x current severance policy for payment of severance benefits upon
termination for other than cause in an amount equal to one-half week of pay for
each year of service: Xxxxxx X. Xxxxx, Xxxxx X. Xxxxxxxxx, Xxxx X.
Xxxxxxxxxx, Xxxxxxx X. Xxxxxx and Xxxxxxxxx X. Xxxxxxxxxx.
(m) Oakwood shall have obtained financing, in the amount of $100 million
and on terms and conditions set forth in the commitment letter with
NationsBank, N.A., and NationsBanc Xxxxxxxxxx Securities, Inc. dated January 2,
1998.
(n) Oakwood shall have received a certificate dated the Closing Date from
Xxxxxx Trust, Xxxxxx'x transfer agent, as to the aggregate number of shares of
capital stock of Xxxxxx issued and outstanding as of the Closing Date.
35
ARTICLE 8
TERMINATION
8.1 Termination by Mutual Consent. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, before or
after the approval of this Agreement, by the mutual consent of Oakwood and
Xxxxxx.
8.2 Termination by Either Oakwood or Xxxxxx. This Agreement may be
terminated and the Merger may be abandoned by action or authorization of the
Board of Directors of either Oakwood or Xxxxxx if (a) the Merger shall not have
been consummated by May 15, 1997, or (b) the approval of Xxxxxx'x shareholders
required by Section 7.1(a) shall not have been obtained at a meeting duly
convened therefor or at any adjournment thereof, or (c) a United States federal
or state court of competent jurisdiction or United States federal or state
governmental, regulatory or administrative agency or commission shall have
issued an order, decree or ruling or taken any other action 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 nonappealable; provided, however, that the party seeking to
terminate this Agreement pursuant to this clause (c) shall have used all
reasonable efforts to remove such injunction, order or decree. In addition,
this Agreement is subject to termination by Oakwood as provided in the preamble
to Article IV.
8.3 Termination by Xxxxxx. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, before or
after the approval by the shareholders of Xxxxxx, by action or authorization of
the Board of Directors of Xxxxxx if (a) there has been a material breach of any
of the covenants or agreements set forth in this Agreement on the part of
Oakwood, which breach is not curable or, if curable, is not cured within 10
days after written notice of such breach is given by Xxxxxx to Oakwood or (b)
prior to the approval by Xxxxxx'x shareholders of the transactions contemplated
by this Agreement, Xxxxxx shall have received an Unsolicited Proposal and the
Board of Directors of Xxxxxx, after consulting with its counsel, determines
that to proceed with the Merger would violate its fiduciary duties and, not
later than the time of such termination, Xxxxxx has paid any amount due Oakwood
pursuant to Section 8.7.
8.4 Termination by Oakwood. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, by action or
authorization of the Board of Directors of Oakwood if (a) there has been a
breach by Xxxxxx or any Xxxxxx Subsidiary of any representation or warranty
contained in this Agreement which would have or would be reasonably likely to
have a Xxxxxx Material Adverse Effect, (b) there has been a material breach of
any of the covenants or agreements set forth in this Agreement on the part of
Xxxxxx or any Xxxxxx Subsidiary, which breach is not curable or, if curable, is
not cured within 10 days after written notice of such breach is given by
Oakwood to Xxxxxx or the Subsidiary.
8.5 Effect of Termination and Abandonment. Upon termination of this
Agreement pursuant to this Article or as provided in the preamble to Article
IV, this Agreement shall be void and of no other effect (other than with
respect to Sections 6.1(a) and 8.7 which shall remain in effect notwithstanding
the termination of this Agreement), and there shall be no liability by reason
of this Agreement or the termination thereof on the part of any party hereto
(other than for the willful breach by a party of any of its representations,
warranties, covenants or agreements contained herein), or on the part of the
respective directors, officers, employees or agents of any of them.
36
8.6 Extension: Waiver.
At any time prior to the Effective Time, any party hereto may, to the
extent legally allowed, (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties made to such party contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions for the benefit of such party
contained herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
8.7 Cost Reimbursement Agreement.
(a) Cost Reimbursement Agreement. Xxxxxx recognizes that Oakwood has and
will spend significant time and resources in effecting the Merger. In
recognition thereof, if, prior to July 15, 1998, Xxxxxx or its shareholders
publicly announce, enter into a letter of intent relating to, enter into a
definitive agreement providing for, or consummate, a transaction other than the
Merger (a "Subsequent Transaction"), which, as announced, or as provided in
such letter or agreement or as consummated, provides for or relates to
(including all prior distributions to shareholders after the date hereof) the
disposition of a controlling interest in Xxxxxx or any of the Xxxxxx
Subsidiaries, or the sale, transfer or other distribution of assets
constituting a majority (measured by fair market value) of the consolidated
assets of Xxxxxx and the Xxxxxx Subsidiaries, Xxxxxx agrees to pay to Oakwood
an amount equal to (1) 100 percent of the difference, up to $1 million, and
(2) 50 percent of the remaining difference above $1 million, between (i) the
consideration to be paid in the Subsequent Transaction (including any and all
distributions from Xxxxxx to its shareholders from the date hereof through the
later of such announcement, letter of intent, agreement or consummation) and
(ii) the amount of $22.50 multiplied by the number of outstanding shares of
Xxxxxx Common Stock on the date hereof; provided, however, the maximum amount
payable under this Section 8.7 shall not exceed $3 million. If such Subsequent
Transaction occurs following one or more distributions (including redemptions
of securities) to Xxxxxx'x shareholders after the date hereof, the
consideration to be paid in such Subsequent Transaction shall be deemed to
include the fair market value of all assets so transferred to Xxxxxx'x
shareholders. If such Subsequent Transaction involves less than all of the
outstanding securities or assets of Xxxxxx, the consideration to be paid in
such Subsequent Transaction shall be deemed to be the amount that would have
been attributable to all of such outstanding securities, or assets, as the case
may be, if all of the same had sold for total consideration proportionate to
that paid for the portion thereof actually sold (or with respect to which there
was an announcement, an agreement was reached or letter executed, as the case
may be).
(b) Any payment required to be made pursuant to this Section 8.7 shall be
made as promptly as practicable but not later than five business days after the
public announcement of the Subsequent Transaction, its consummation or the
execution of the letter of intent, agreement in principle or definitive
agreement, or understanding similar to the foregoing, for a Subsequent
Transaction, whichever is earlier.
37
ARTICLE 9
GENERAL PROVISIONS
9.1 Notices. Any notice to be given to a party in connection with this
Agreement shall be in writing addressed to such party at such party's "Notice
Address" set forth below, which Notice Address may be changed from time to time
by such party by notice thereof to the other parties as herein provided. Any
such notice shall be deemed effectively given to a party on the first to occur
of (a) the third business day after the date of mailing thereof, if mailed to
such party by first class registered or certified United States mail, postage
prepaid, addressed to such party at such party's Notice Address, or (b) the
date on which such notice is actually delivered (whether by mail, courier, hand
delivery, facsimile transmission or otherwise) to such party's Notice Address
and addressed to such party, if such delivery occurs on a business day, or if
such delivery occurs on a day which is not a business day, then on the next
business day after the date of such delivery, or (c) the date on which such
notice is actually received by such party (or, in the case of a party that is
not an individual, actually received by the individual designated in the Notice
Address of such party). For purposes of the preceding sentence, a "business
day" is any day other than a Saturday, Sunday or legal holiday at the place
where the Notice Address of the recipient is located. The Notice Address of
each party is as follows:
(a) Oakwood or Merger Sub:
Oakwood Homes Corporation
0000 XxXxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxxx, L.L.P.
NationsBank Corporate Center, Suite 4200
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
38
(b) Xxxxxx:
Xxxxxx Homes Corporation
221 X.X. 00 Xxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxx & Xxxxxxx
000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
9.2 Expenses.
All costs and expenses incurred by a party in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses; provided, however, that in no event shall
any costs and expenses incurred by any party hereto reduce the consideration to
be received by the shareholders of the Xxxxxx in exchange for their shares of
Xxxxxx Common Stock as provided in the Plan of Merger.
9.3 Assignment, Binding Effect, Benefit.
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.
Subject to the preceding sentence, this Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and assigns.
9.4 Entire Agreement.
This Agreement, the Exhibits and the Schedules constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings among the parties with
respect thereto. No addition to or modification of any provision of this
Agreement shall be binding upon any party hereto unless made in writing and
signed by all parties hereto.
9.5 Amendment.
This Agreement may be amended by the parties hereto at any time before or
after approval of matters presented in connection with the Merger by the
shareholders of Xxxxxx, but after any such shareholder approval, no amendment
shall be made which by law requires the further approval of shareholders
without obtaining such further approval. This Agreement may
39
not be modified or amended except by an instrument in writing signed on behalf
of Oakwood, Merger Sub and Xxxxxx.
9.6 Governing Law.
The validity of this Agreement, the construction of its terms and the
determination of the rights and duties of the parties hereto shall be governed
by and construed in accordance with the laws of the United States and those of
the State of North Carolina applicable to contracts made and to be performed
wholly within such state.
9.7 Counterparts.
This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all of the parties hereto.
9.8 Headings.
Headings of the Articles and Sections of this Agreement are for the
convenience of the parties only, and shall be given no substantive or
interpretive effect whatsoever.
9.9 Interpretation.
In this Agreement, unless the context otherwise requires, words describing
the singular number shall include the plural and vice versa, and words denoting
any gender shall include all genders and words denoting natural persons shall
include corporations, partnerships, limited liability companies, trusts,
associations and other entities.
9.10 Waivers.
Except as provided in this Agreement, no action taken pursuant to this
Agreement, including, without limitation, any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the party taking such
action of compliance with any representations, warranties, covenants or
agreements contained in this Agreement. The waiver by any party hereto of a
breach of any provision hereunder shall not operate or be construed as a waiver
of any prior or subsequent breach of the same or any other provision hereunder.
9.11 Severability.
Any term or provision of this Agreement which is invalid or unenforceable
in any jurisdiction shall, as to that jurisdiction, be ineffective to the
extent of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or affecting
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction. If any provision of this Agreement is so
broad as to be unenforceable, the provision shall be interpreted to be only so
broad as is enforceable.
9.12 Enforcement of Agreement.
The parties hereto agree that irreparable damage would occur in the event
that any of the provisions of this Agreement was not performed in accordance
with its specific terms or was 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
hereof in any court of competent jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.
9.13 Effectiveness.
40
This Agreement shall be effective upon the execution hereof by Oakwood,
Merger Sub and Xxxxxx, and upon such execution shall constitute a legal, valid
and binding obligation of each of Oakwood, Merger Sub and Xxxxxx.
***
41
IN WITNESS WHEREOF, the parties have executed this Agreement and caused the
same to be duly delivered on their behalf on the any and year first written
above.
OAKWOOD HOMES CORPORATION
ATTEST:
By:___________________________ By:____________________________________
Name: _________________________________
Title: ________________________________
XXXXXX HOMES CORPORATION
ATTEST:
By:___________________________ By:____________________________________
Name: _________________________________
Title: ________________________________
A & B ACQUISITION CORP.
ATTEST:
By:___________________________ By:____________________________________
Name: _________________________________
Title: ________________________________
42
SCHEDULE 3.2
OPTIONS
NAME YEAR NUMBER OF OPTIONS OPTION PRICE
---- ---- ----------------- ------------
Xxxxxx X. Xxxxx 1995 12,000 $12.71
Xxxxxxxxx X. Xxxxxxxxxx 1995 3,600 $12.71
Xxxxxxx X. Xxxxxxx 1995 6,000 $12.71
Xxxxx X. Xxxxxxxxx 1995 9,000 $12.71
Xxxxxxx X. Xxxxxx 1995 6,000 $12.71
Xxxx X. Xxxxxxxxxx 1995 12,000 $12.71
Xxxxx Xxxxx 1995 4,800 $12.71
Xxxxxx Xxxxx 1995 4,800 $12.71
Xxxxxx Xxxxx 1995 2,100 $12.71
Xxxx Xxxxxxxxx 1995 4,800 $12.71
Xxx Xxxxx 1995 4,800 $12.71
Xxxx Xxxxxx 1995 4,800 $12.71
Xxx Xxxxxxx 1995 4,800 $12.71
Xxx Xxxx 1995 4,800 $12.71
Xxx Xxxxxxx 0000 4,800 $12.71
Art Xxxxxxx 1995 2,100 $12.71
Xxxx Xxxx 1995 4,800 $12.71
Xxxxxx X. Xxxxx 1996 6,000 $19.79
Xxxxxxxxx X. Xxxxxxxxxx 1996 2,400 $19.79
Xxxxxxx X. Xxxxxxx 1996 2,400 $19.79
Xxxxx X. Xxxxxxxxx 1996 4,950 $19.79
Xxxxxxx X. Xxxxxx 1996 3,000 $19.79
Xxxx X. Xxxxxxxxxx 1996 6,000 $19.79
Xxxxx Xxxxx 1996 2,400 $19.79
Xxxxxx Xxxxx 1996 2,400 $19.79
Xxxxxx Xxxxx 1996 600 $19.79
Xxxx Xxxxxxxxx 1996 2,400 $19.79
Xxx Xxxxx 1996 2,400 $19.79
Xxxx Xxxxxx 1996 2,400 $19.79
Xxx Xxxxxxx 1996 2,400 $19.79
Xxx Xxxx 1996 2,400 $19.79
Xxxx Xxxxxxx 1996 4,800 $19.79
Xxx Xxxxxxx 0000 2,400 $19.79
Art Xxxxxxx 1996 1,050 $19.79
Xxxx Xxxx 1996 2,400 $19.79
Xxxxxx Xxxxx 1997 9,000 $18.125
Xxxx Xxxxxxxxx 1997 9,000 $18.125
43
Xxx Xxxxx 1997 9,000 $18.125
Xxxx Xxxxxx 1997 9,000 $18.125
Xxx Xxxxxxx 1997 9,000 $18.125
Xxx Xxxx 1997 4,000 $18.125
Xxxx Xxxx 1997 9,000 $18.125
Art Xxxxxxx 1997 2,000 $18.125
Granted Under Employment Letter Dated December, 1997:
Xxxx Xxxx subject to agreement 8,000 -----
44
SCHEDULE 5.3
Required Filings and Consents
None.
45
EXHIBIT A
ARTICLES OF MERGER
OF
A & B ACQUISITION CORP.
WITH AND INTO
XXXXXX HOMES CORPORATION
Pursuant to Section 23-1-40-5 of the Indiana Business Corporation Law,
the undersigned Indiana corporation, as the surviving corporation in a merger,
hereby submits the following Articles of Merger:
1. The name of the surviving corporation is Xxxxxx Homes Corporation, a
corporation organized under the laws of Indiana; and the name of the
merged corporation is A & B Acquisition Corp., a corporation organized
under the laws of Indiana.
2. Attached is a copy of the Plan of Merger that was duly adopted in the
manner prescribed by law.
3. The Plan of Merger was approved unanimously by the Board of Directors of
the surviving corporation. Prior to the consummation of the merger
effected hereby the surviving corporation had outstanding _____________
Common Shares, no par value, each of which entitled the holder thereof to
one vote with respect to approval of the Plan of Merger. ___________
shares were voted in favor of the Plan of Merger and _________ were voted
against the Plan of Merger.
4. The Plan of Merger was approved unanimously by the Board of Directors of
the merged corporation. Prior to the consummation of the merger effected
hereby the merged corporation had outstanding 1,000 shares of Common
Stock, $.50 par value, each of which entitled the holder thereof to one
vote with respect to approval of the Plan of Merger. All of the merged
corporation's outstanding shares were voted in favor of the Plan of
Merger.
This the _____ day of ___, 1998
XXXXXX HOMES CORPORATION
By: _____________________________
Name:____________________________
Title:___________________________
46
EXHIBIT B
PLAN OF MERGER
OF
A & B ACQUISITION CORP.
WITH AND INTO
XXXXXX HOMES CORPORATION
This Plan of Merger sets forth the terms and conditions upon which,
at the Effective Time (as hereinafter defined), A & B Acquisition Corp.
shall be merged with and into Xxxxxx Homes Corporation:
1. Constituent Corporations; Surviving Corporation. The constituent
corporations party to this Plan of Merger (the "Constituent
Corporations") are Xxxxxx Homes Corporation, an Indiana Corporation
("Xxxxxx"), and A & B Acquisition Corp., an Indiana corporation ("Merger
Sub"). Merger Sub shall be merged with and into Xxxxxx (the "Merger"),
and Xxxxxx shall be the surviving corporation in the Merger (the
"Surviving Corporation"), with its corporate name continuing to be
"Xxxxxx Homes Corporation."
2. Effective Time. The Merger shall become effective at the time
appropriate Articles of Merger, including this Plan of Merger, are filed
with the Secretary of State of Indiana (the "Effective Time").
3. Terms and Conditions of Merger; Abandonment. The Merger shall be
effected in accordance with the terms and conditions set forth in this
Plan of Merger. The Merger may be abandoned at any time prior to the
Effective Time in the event that the Acquisition Agreement, dated as of
January 5, 1998 (the "Merger Agreement"), by and among the Constituent
Corporations and Oakwood Homes Corporation, a North Carolina corporation
("Oakwood"), shall be terminated. The obligations of the Constituent
Corporations to cause Articles of Merger to be filed to effect the Merger
are subject to the satisfaction or waiver of the conditions to the
closing under the Merger Agreement.
4. Effect of Merger. At the Effective Time, Merger Sub will be
merged with and into Xxxxxx with the effects set forth in Section
23-1-40-6 of the Indiana Business Corporation Law, and the separate
corporate existence of Merger Sub shall cease and the corporate existence
of Xxxxxx shall continue as the Surviving Corporation. The Articles of
Incorporation and Bylaws of Xxxxxx as in effect immediately prior to the
Effective Time shall continue to be the Articles of Incorporation and
Bylaws of the Surviving Corporation after the Effective Time until they
may be thereafter duly amended in accordance with applicable law. The
manner and basis of converting and exchanging the shares of the
Constituent Corporations is set forth in Section 5 hereof.
5. Conversion of Shares. At the Effective Time, (a) each Common Share
of Xxxxxx ("Xxxxxx Common Stock") issued and outstanding immediately prior
47
to the Effective Time [(other than any Dissenting Shares, if applicable and
as defined in Section 6(f) below)] shall be automatically converted into the
right to receive a cash amount equal to $22.50 per share (the "Per Share
Amount"); and (b) each share of Common Stock of Merger Sub ("Merger Sub
Common Stock") issued and outstanding immediately prior to the Effective
Time shall be automatically converted into one share of Common Stock of the
Surviving Corporation. From and after the Effective Time, Oakwood, as
holder of all the outstanding shares of Merger Sub Common Stock, shall have
the right to receive a certificate evidencing ownership of all of the Common
Stock of the Surviving Corporation as provided hereinabove upon its
surrender of the certificate or certificates representing all shares of
Merger Sub Common Stock. Until such surrender, each certificate evidencing
ownership of any such shares of Merger Sub Common Stock shall, at the
Effective Time, evidence ownership of the same number of shares of the
Common Stock of the Surviving Corporation without any requirement for any
exchange of certificates or further action.
6. Exchange of Certificates and Cash.
(a) Deposit of Merger Consideration. Immediately prior to the
Effective Time, Oakwood shall deposit, or cause to be deposited, with or for
the account of a bank or trust company designated by Oakwood and mutually
acceptable to Oakwood and Xxxxxx (the "Exchange Agent"), for the benefit of
the holders of shares of Xxxxxx Common Stock [(other than any Dissenting
Shares (as defined in subsection (f) below)], for exchange in accordance
with this Section 6, cash in the aggregate amount required to be exchanged
for all outstanding shares of Xxxxxx Common Stock [(including for this
purpose Dissenting Shares)] pursuant to Section 5 hereof (the "Merger
Consideration"). The Exchange Agent shall, pursuant to irrevocable
instructions, hold the Merger Consideration pending remittance thereof to
holders of shares of Xxxxxx Common Stock [(or, with respect to Dissenting
Shares, to the Surviving Corporation)] in accordance with this Section 6.
The Merger Consideration shall not be used for any other purpose. The
Merger Consideration may be invested only in permitted investments specified
by Oakwood to the Exchange Agent prior to the Effective Time. In the event
that any such investments reduce the Merger Consideration to an amount which
is less than that required to be exchanged for all shares of Xxxxxx Common
Stock [(including for this purpose Dissenting Shares)] pursuant to Section 5
hereof which have not theretofore been exchanged, the Surviving Corporation
shall, upon written notice thereof from the Exchange Agent, promptly make up
any such shortfall. Any interest, dividends or other income earned on the
investment of the Merger Consideration while held by the Exchange Agent
shall be for the account of the Surviving Corporation.
(b) Surrender of Certificates; Payment of Merger Consideration. As
soon as reasonably practicable after the Effective Time, the Surviving
Corporation will instruct the Exchange Agent to mail to each holder of
record, as of immediately prior to the Effective Time, of the outstanding
shares of Xxxxxx Common Stock [(other than Dissenting Shares)] (a) a letter
of transmittal and (b) instructions to effect the surrender of such holder's
certificates for such holder's shares of Xxxxxx Common Stock (the
"Certificates") in exchange for the cash such holder is entitled to receive
hereunder, each in a form approved by Oakwood prior to the Effective Time.
Upon surrender of a Certificate for cancellation to the Exchange Agent,
together with the duly executed letter of transmittal, the holder of record
of such Certificate shall be entitled to receive in exchange therefor cash
in an amount equal to the Per
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48
Share Amount multiplied by the number of shares of Xxxxxx Common Stock
evidenced by the Certificate. No interest from the Effective Time will
be accrued or paid on any cash payable upon surrender of Certificates.
In the event of a transfer of ownership of any shares of Xxxxxx Common
Stock which is not registered in the transfer records of Xxxxxx, cash may
be paid in accordance with this Section 6 to a transferee if the
Certificate evidencing such shares of Xxxxxx Common Stock is presented to
the Exchange Agent, accompanied by all documents necessary to evidence
and effect such transfer and by evidence that any applicable stock
transfer taxes have been paid. Until surrendered as contemplated by this
Section 6(b), each Certificate shall be deemed at any time after the
Effective Time to evidence, and the holder of shares of Xxxxxx Common
Stock evidenced thereby shall have, only the right to receive upon such
surrender the appropriate portion of the Merger Consideration; and all
other rights of such holder as a shareholder of Xxxxxx shall cease at the
Effective Time, except as otherwise required by the Indiana Business
Corporation Law.
(c) Lost, Stolen or Destroyed Certificates. In the event any
Certificate shall have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming such Certificate to be
lost, stolen or destroyed and, if required by the Surviving Corporation,
the posting by such person of a bond in such amount as the Surviving
Corporation may reasonably direct as indemnity against any claim that may
be made against it with respect to such Certificate, the Exchange Agent
will issue in exchange for such lost, stolen or destroyed Certificate the
cash deliverable in respect thereof pursuant to Section 5 hereof.
(d) Termination of Deposit with the Exchange Agent. Any portion of
the Merger Consideration deposited with the Exchange Agent which remains
undistributed to the holders of shares of Xxxxxx Common Stock for 270
days after the Effective Time shall be delivered to the Surviving
Corporation, upon demand, and any holders of shares of Xxxxxx Common
Stock who have not theretofore complied with this Section 6 shall
thereafter look only to the Surviving Corporation for the Merger
Consideration to which they are entitled pursuant to this Section 6.
Neither Oakwood nor the Surviving Corporation shall be liable to any
holder of shares of Xxxxxx Common Stock for any cash from the Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
(e) Closing of Stock Transfer Books. At the Effective Time, the
stock transfer books of Xxxxxx shall be closed and there shall be no
further registration of transfers of shares of Xxxxxx Common Stock
thereafter on the records of Xxxxxx.
[(f) Dissenting Shares. Notwithstanding any other provision of this
Agreement, shares of Xxxxxx Common Stock that are outstanding immediately
prior to the Effective Time and which are held by a holder of shares of
Xxxxxx Common Stock who shall have (i) duly given written notice to
Xxxxxx, prior to the taking of the vote by Xxxxxx'x shareholders on
approval of this Plan of Merger, of such holder's intent to dissent from
the Merger and demand payment of the "fair value" of such shares in
accordance with Sections 23-1-44 et seq. of the Indiana Business
Corporation Law (the "Dissenters' Rights Provisions"), (ii) not voted
such shares in favor of the Merger, and (iii) not withdrawn, waived or
otherwise lost or forfeited such holder's dissenter's rights under the
Dissenters' Rights Provisions prior to the
xlv
49
Effective Time (collectively, the "Dissenting Shares"), shall not be
converted into or represent the right to receive any part of the Merger
Consideration. Such Dissenting Shares shall instead be converted into
the right to receive from the Surviving Corporation payment of the "fair
value" thereof in accordance with the Dissenters' Rights Provisions,
except that all Dissenting Shares held by holders who after the
Effective Time shall have failed to perfect or who effectively shall
have withdrawn, waived or otherwise lost or forfeited their dissenters'
rights under such Dissenters' Rights Provisions shall thereupon be
deemed to have been converted into and to become exchangeable, as of the
Effective Time, for the right to receive, without any interest thereon,
the appropriate part of the Merger Consideration, upon surrender, in the
manner provided in this Section 6, of the Certificate or Certificates
that formerly evidenced such shares of Xxxxxx Common Stock. Upon
application by the Surviving Corporation to the Exchange Agent therefor,
accompanied by the Certificate or Certificates formerly evidencing
Dissenting Shares and a certificate of the Surviving Corporation to the
effect that there has been paid, or will be paid contemporaneously with
the remittance to the Surviving Corporation of the Merger Consideration
otherwise allocable to such Dissenting Shares, the amount to which the
holder thereof is entitled, or has agreed with the Surviving Corporation
to receive, as payment for such Dissenting Shares pursuant to the
exercise of such holder's dissenters' rights, then the Exchange Agent
shall remit to the Surviving Corporation that part of the Merger
Consideration otherwise (but for the exercise of such dissenters'
rights) allocable to such Dissenting Shares. In such event, remittance
to the Surviving Corporation shall be a full acquittance of the Exchange
Agent with respect thereto, and, to the extent such payment was not
previously made, the holder of such Dissenting Shares shall look only to
the Surviving Corporation for the payment to which such holder is
entitled with respect to such Dissenting Shares.]
*****
End of Plan of Merger
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50
EXHIBIT C
FORM OF OPINION OF XXXXXX'X COUNSEL
[Date]
Oakwood Homes Corporation
0000 XxXxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Ladies and Gentlemen:
We have acted as counsel to Xxxxxx Homes Corporation, an Indiana
corporation (the "Company"), in connection with the transactions
contemplated by the Acquisition Agreement dated January 5, 1997 (the
"Agreement") between the Company, Oakwood Homes Corporation, a North
Carolina corporation ("Oakwood"), and A & B Acquisition Corp., an Indiana
corporation ("Merger Sub"). This opinion letter is delivered pursuant to
Section 7.3(c) of the Agreement. All capitalized terms used herein and
not otherwise defined herein shall have the same meanings herein as are
ascribed to them in the Agreement.
As such counsel, we have examined originals or copies of the
Agreement, the Articles of Merger and the Plan of Merger (all of such
documents being referred to collectively herein as the "Transaction
Documents"). We have also examined the articles of incorporation and
bylaws of the Company and each Xxxxxx Subsidiary, certified resolutions
of the Board of Directors of the Company with respect to the transactions
contemplated by the Transaction Documents, certificates of officers of
the Company and public officials, and such other documents, and have made
such other investigations, as we have deemed necessary or appropriate for
the purpose of giving the opinions herein expressed. As such counsel, we
have participated in the preparation of the Transaction Documents and
have consulted with officers of the Company concerning the terms and
provisions thereof and the representations and warranties made by the
Company therein.
In giving the opinions expressed herein and making our investigations
in connection herewith, we have assumed (a) the due authorization,
execution and delivery by the parties thereto other than the Company and
the Xxxxxx Subsidiaries of the documents examined by us, (b) the
genuineness of all signatures of individuals, (c) the personal legal
capacity of all individual signatories, (d) the authenticity of all
documents presented to us as originals, (e) the conformity to the
originals of all documents presented to us as copies, and (f) the
integrity and completeness corporate minute books of the Company and each
Xxxxxx Subsidiary presented to us for our examination. We have also
assumed that the terms of the Transaction Documents have not been
modified, supplemented or qualified by any other agreements or
understandings (written or oral) of the parties thereto, or by any course
of dealing or trade custom or usage, in any manner affecting the opinions
expressed herein. Nothing has come to our attention in the course of our
representation of the Company in connection with the
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Oakwood Homes Corporation
____________, 1998
Page xlviii of 5
transactions contemplated by the Transaction Documents that would cause us
to believe that the foregoing assumptions are unwarranted.
We note that the Agreement provides that it is to be governed by the
laws of North Carolina. Our opinion herein as to the legality, validity,
binding effect and enforceability of the Agreement is intended to address
both the effectiveness under Indiana law of such choice of law provision and
the legality, validity, binding effect and enforceability of the Agreement
under Indiana and federal law were the Agreement, notwithstanding such
provision, governed by the laws of the State of Indiana, and is not intended
to address matters of North Carolina law.
We express no opinion herein concerning the possible application to the
Transaction Documents, the transactions contemplated thereby, or the
obligations of the parties thereunder of Section 548 of the Bankruptcy Code,
11 U.S.C. Section 548 or other similar laws relating to "fraudulent
transfers" or "fraudulent conveyances."
Opinions or statements herein given "to the best of our knowledge" and
the factual matters on which we have relied in giving other opinions herein
(except for our opinions as to corporate matters that we have given in
reliance upon our own investigation of the Company's corporate minute books
and stock records and certificates of officers of the Company and public
officials) are based upon (a) information coming to our attention in the
course of our representation of the Company in connection with the
transactions contemplated by the Transaction Documents, or otherwise
actually known to the lawyers in our firm who have given substantive
attention to such transactions, (b) the Company's representations and
warranties contained in the Transaction Documents, and (c) inquiries of
representatives of the Company whom we believe to be reasonably well
informed as to the factual matters in question, but without any other
investigations made for purposes of giving such opinions or statements
unless otherwise stated herein. However, nothing has come to our attention
in the course of our representation of the Company in connection with the
transactions contemplated by the Transaction Documents that would cause us
to believe that our reliance thereon for purposes of such opinions is
unwarranted.
Based upon and subject to the foregoing and the further limitations and
qualifications hereinafter expressed, it is our opinion that:
1. The Company is a corporation duly organized and validly existing in
good standing under the laws of Indiana and has the full corporate power and
authority to own its properties and to carry on its business as now being
conducted. Each Xxxxxx Subsidiary is a corporation duly organized and
validly existing in good standing under the laws of its state of
incorporation and has the full corporate power and authority to own its
properties and to carry on business as now being conducted.
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Oakwood Homes Corporation
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Page xlix of 5
2. The Company is duly qualified and in good standing as a foreign
corporation to do business in ____________, _____________ and
_____________.[Add parallel for subsidiaries, if applicable]
3. The Company has full corporate power and authority to execute and
deliver and perform its obligations under the Transaction Documents, and
all corporate actions or approvals required for the execution, delivery
and performance thereof by the Company have been duly taken or obtained.
The Merger and the Plan of Merger have been duly and validly approved by
the Board of Directors and the shareholders of the Company in accordance
with the Indiana Business Corporation Law.
4. The authorized capital of the Company consists of (a) 10,000,000
Common Shares, without par value (the "Common Stock"), of which 4,475,875
shares are issued and outstanding, including __________ shares issued
pursuant to the Company's Employee Share Purchase Plan during January
1998 and __________ shares issued in connection with exercises of
outstanding Xxxxxx Stock Options since January 5, 1998, and __________
shares are reserved for issuance upon the exercise of options granted
under the Company's 1995 Share Incentive Plan and any other employee
stock option plan or program, ______ shares are reserved for issuance
upon the exercise of options granted under the Company's Directors
Deferred Compensation Plan and any other director stock option plan or
program and 8,000 shares are reserved for future issuance pursuant to an
option granted to Xxxx Xxxx with an aggregate option price of $1.00 and
(b) 2,000,000 Preferred Shares, none of which are issued or outstanding.
All of the issued and outstanding shares of Common Stock were validly
issued, fully paid and nonassessble and were not issued in violation of
any preemptive rights. All shares of Common Stock subject to issuance
pursuant to a Xxxxxx Stock Option, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are
issuable, will be duly authorized, validly issued, fully paid and
nonassessable and such options were not granted in violation of any
preemptive rights. Except for the Xxxxxx Stock Options, to the best of
our knowledge there are no outstanding options, warrants, or conversion,
subscription or similar rights which obligate or may in the future
obligate the Company to issue any additional shares of its capital stock.
The authorized capital stock of each Xxxxxx Subsidiary is as follows:
[insert name and capital structure]. Each outstanding share of capital
stock of a Xxxxxx Subsidiary has been duly authorized, validly issued,
and is fully paid and nonassessable, was not issued in violation of any
preemptive rights and is owned by the Company or a Xxxxxx Subsidiary free
and clear of all security interests, liens, claims, pledges, options,
rights of first refusal, agreements or limitations on the Company's or
such other Xxxxxx Subsidiaries' voting rights, charges, and other
encumbrances of any nature whatsoever.
5. Each of the Transaction Documents has been duly executed and
delivered by the Company and constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms.
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Oakwood Homes Corporation
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Page 1 of 5
i. Neither the execution and delivery by the Company of the Transaction
Documents nor its compliance with the provisions thereof constitute or
will constitute a violation of the articles of incorporation or bylaws of
the Company or any Xxxxxx Subsidiary or any applicable law or regulation,
or, to the best of our knowledge, conflict with or result in any breach of
any material contract or agreement to which either the Company or any
Xxxxxx Subsidiary is now a party or by which it or its property is bound,
or any judgment, writ, order or decree of any judicial or administrative
authority by which the Company, any Xxxxxx Subsidiary or their property is
bound. To the best of our knowledge, no consent, approval or
authorization of, or prior notice to or prior filing with, any
governmental authority or other third party, not heretofore obtained,
given or filed as required, is required of the Company in connection with
the execution and delivery by the Company of the Transaction Documents or
as a condition to the enforceability thereof, other than the filing of
Articles of Merger with the Indiana Secretary of State.
7. To the best of our knowledge, except as set forth in the
Disclosure Memorandum there are no pending or overtly threatened actions,
suits or proceedings against the Company or any Xxxxxx Subsidiary or its
properties, nor do any facts exist which could serve as the basis for any
such action, suit or proceeding, before any court, arbitrator or
governmental or administrative body or agency (a) seeking to enjoin,
prevent or challenge the transactions contemplated by the Transaction
Documents or claiming damages with respect thereto, or (b) in which the
likelihood of an outcome materially and adversely affecting the Company,
its business or financial condition, or its ability to duly perform its
obligations under the Transaction Documents, is not remote.
8. Upon the filing of the Articles of Merger, together with the Plan
of Merger attached thereto, with the Indiana Secretary of State, the
Merger shall be effective in accordance with the terms of the Plan of
Merger and the Indiana Business Corporation Law.
9. The Proxy Statement and the Company's Annual Report on Form 10-K
for the fiscal year ended June 28, 1997, when filed with the Securities
and Exchange Commission (the "Commission"), complied as to form in all
material respects with the Securities Exchange Act of 1934 (the "Exchange
Act") and the rules and regulations of the Commission thereunder. We
participated in the preparation of the Proxy Statement and such Form 10-K
and, based solely on such participation, we advise you that we have no
reason to believe that, with respect to the Proxy Statement as of its date
and as of the date hereof, and with respect to the Form 10-K as of the
date it was filed with the Commission, either the Proxy Statement or the
Form 10-K contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements made therein, in
light of the circumstances in which they were made, not misleading.
10. The shareholders of Xxxxxx do not have dissenters' rights under
the Indiana Business Corporation Law in connection with the Merger.
This opinion letter is delivered solely for your benefit in
connection with the closing under the Agreement and may not be relied upon
by any other person or for any other purpose without our prior written
consent. The opinions set forth herein are limited to matters governed by
the laws of the State
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Oakwood Homes Corporation
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Page li of 5
of Indiana and the federal laws of the United States, and the laws of the
States of Incorporation of the Xxxxxx Subsidiaries with respect to which, with
your permission, we are relying on the opinions of counsel licensed to practice
in such jurisdictions attached hereto. Our opinions expressed herein are as of
the date hereof, and we undertake no obligation to advise you of any changes in
applicable law or any other matters that may come to our attention after the
date hereof that may affect our opinions expressed herein.
Very truly yours,
XXXXX & XXXXXXX
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Oakwood Homes Corporation
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Page lii of 5
END OF ACQUISITION AGREEMENT
