EXHIBIT 2.2
AGREEMENT AND PLAN OF MERGER
AMONG
CENTEX DEVELOPMENT COMPANY, L.P.,
3333 DEVELOPMENT CORPORATION,
CENTEX CORPORATION,
CENTEX DEVELOPMENT ACQUISITION, L.P.
AND
CENTEX HOMES
DATED AS OF NOVEMBER 17, 2003
TABLE OF CONTENTS
Page
----
ARTICLE I The Partnership Merger................................................................................. 3
SECTION 1.1 The Partnership Merger....................................................................... 3
SECTION 1.2 Closing...................................................................................... 3
SECTION 1.3 Effective Time............................................................................... 3
SECTION 1.4 Effects of the Partnership Merger............................................................ 3
SECTION 1.5 Certificate of Limited Partnership; Agreement of Limited Partnership......................... 3
SECTION 1.6 General Partner.............................................................................. 4
SECTION 1.7 Employees.................................................................................... 4
SECTION 1.8 Effect on Partnership Interests.............................................................. 4
SECTION 1.9 Cancellation of Centex Warrants.............................................................. 5
SECTION 1.10 Further Assistance........................................................................... 5
SECTION 1.11 Approval and Recommendation of Development................................................... 5
ARTICLE II Limited Partner Consents.............................................................................. 6
SECTION 2.1 Limited Partner Consents..................................................................... 6
ARTICLE III No Dissenters' Rights; Payment for Stockholder Warrants; Related Matters............................. 6
SECTION 3.1 No Dissenters' Rights........................................................................ 6
SECTION 3.2 Payment for Warrants......................................................................... 6
ARTICLE IV Representations and Warranties of the Partnership..................................................... 7
SECTION 4.1 Partnership Existence and Power.............................................................. 7
SECTION 4.2 Authorization; Approvals..................................................................... 7
SECTION 4.3 Governmental Authorization................................................................... 8
SECTION 4.4 Non-Contravention............................................................................ 8
SECTION 4.5 Capitalization............................................................................... 9
SECTION 4.6 Subsidiaries................................................................................. 9
SECTION 4.7 Past SEC Documents; Undisclosed Liabilities.................................................. 10
SECTION 4.8 [Reserved]................................................................................... 11
SECTION 4.9 Absence of Certain Changes................................................................... 11
SECTION 4.10 Litigation................................................................................... 11
SECTION 4.11 [Reserved]................................................................................... 12
SECTION 4.12 Compliance with Laws; Licenses, Permits and Registrations.................................... 12
SECTION 4.13 Contracts.................................................................................... 12
SECTION 4.14 Properties................................................................................... 12
SECTION 4.15 Required Vote; Board Approval................................................................ 13
SECTION 4.16 [Reserved]................................................................................... 13
SECTION 4.17 Finders' Fees................................................................................ 13
SECTION 4.18 Opinion of the Financial Advisor............................................................. 13
SECTION 4.19 [Reserved]................................................................................... 13
ARTICLE V Representations and Warranties of Centex and Acquirer.................................................. 13
SECTION 5.1 Corporate/Partnership Existence and Power.................................................... 13
SECTION 5.2 Authorization; Approvals..................................................................... 14
SECTION 5.3 Governmental Authorization................................................................... 14
SECTION 5.4 Non-Contravention............................................................................ 14
SECTION 5.5 Information in Securities Filings............................................................ 14
SECTION 5.6 Finders' Fees................................................................................ 15
i
ARTICLE VI Covenants............................................................................................. 15
SECTION 6.1 Conduct of Business of the Partnership....................................................... 15
SECTION 6.2 Indemnification and Insurance................................................................ 16
SECTION 6.3 Other Proposals.............................................................................. 17
SECTION 6.4 Public Announcements......................................................................... 19
ARTICLE VII Conditions to Consummation of the Partnership Merger................................................. 19
SECTION 7.1 Conditions to Each Party's Obligation........................................................ 19
SECTION 7.2 Conditions to Acquirer's and Centex's Obligation............................................. 20
SECTION 7.3 Conditions to the Partnership's Obligation................................................... 21
ARTICLE VIII Termination; Amendment; Waiver...................................................................... 21
SECTION 8.1 Termination.................................................................................. 21
SECTION 8.2 Effect of Termination........................................................................ 22
SECTION 8.3 Amendment.................................................................................... 22
SECTION 8.4 Extension; Waiver............................................................................ 22
ARTICLE IX Miscellaneous......................................................................................... 23
SECTION 9.1 Nonsurvival of Representations, Warranties and Agreements.................................... 23
SECTION 9.2 Entire Agreement; Assignment................................................................. 23
SECTION 9.3 Validity..................................................................................... 23
SECTION 9.4 Notices...................................................................................... 23
SECTION 9.5 Defined Terms................................................................................ 24
SECTION 9.6 Governing Law................................................................................ 26
SECTION 9.7 Descriptive Headings......................................................................... 26
SECTION 9.8 Parties in Interest.......................................................................... 26
SECTION 9.9 Counterparts................................................................................. 26
SECTION 9.10 Expenses..................................................................................... 26
SECTION 9.11 Specific Performance......................................................................... 27
ii
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of November 17, 2003 (this
"AGREEMENT"), is entered into by and among Centex Development Company, L.P., a
Delaware limited partnership (the "PARTNERSHIP"), 3333 DEVELOPMENT CORPORATION,
a Nevada corporation and the general partner of the Partnership ("DEVELOPMENT"),
CENTEX CORPORATION, a Nevada corporation ("CENTEX"), Centex Development
ACQUISITION, L.P., a Delaware limited partnership and an indirect partnership
subsidiary of Centex ("ACQUIRER"), and CENTEX HOMES, a Nevada general
partnership and an indirect partnership subsidiary of Centex ("CENTEX HOMES").
R E C I T A L S
A. The holders of Centex common stock, par value $.25 per share
(the "CENTEX COMMON STOCK"), collectively (i) through their ownership of Centex
Common Stock beneficially own all of the (a) general partnership and limited
partnership interests in Acquirer, (b) Class A and Class C Units of limited
partnership interest in the Partnership (collectively "LP UNITS"), and (c)
warrants owned by Centex to purchase Class B limited partnership interests in
the Partnership, and (ii) through a nominee arrangement with Mellon Investor
Services LLC ("NOMINEE"), beneficially own all of the (a) general partnership
interest in the Partnership ("GP UNITS") and (b) warrants to purchase Class B
Units of limited partnership interest in the Partnership (the "STOCKHOLDER
WARRANTS").
B. 3333 Holding Corporation, a Nevada corporation ("HOLDING"),
Centex and 3333 Acquisition Corp., a Nevada corporation and a wholly-owned
subsidiary of Centex ("ACQUISITION CORP."), have entered into an Agreement and
Plan of Merger dated of even date herewith (the "HOLDING MERGER AGREEMENT"),
pursuant to which Acquisition Corp. shall be merged with and into Holding (the
"HOLDING MERGER"), and whereby Holding's common stock will be canceled and the
beneficial interest in Holding's common stock will be converted into the right
to receive cash consideration.
C. It has been proposed that the completion of the Holding Merger
be conditioned on the satisfaction, or waiver thereof, of all the conditions to
the Partnership Merger (as defined below) as set forth in this Agreement.
D. Development, a wholly-owned subsidiary of Holding, as holder
of all the GP Units, is the sole general partner of the Partnership, and Centex
Homes, as holder of all the LP Units, is the sole limited partner of the
Partnership.
E. Centex Homes is the sole general partner of Acquirer, and
Centex Real Estate Corporation, a Nevada corporation and an indirect,
wholly-owned subsidiary of Centex ("CREC"), and Centex Homes are the sole
limited partners of Acquirer.
F. Centex, Centex Homes, CREC and Development desire that
Acquirer be merged with and into the Partnership (the "PARTNERSHIP MERGER"),
upon the terms and subject to the conditions set forth in this Agreement and in
accordance with the applicable provisions of the Delaware Revised Uniform
Limited Partnership Act, Title 6, Chapter 17 of the Delaware Code Annotated, as
amended (the "ACT"), pursuant to which the Stockholder Warrants will be canceled
1
and the beneficial interest in the Stockholder Warrants will be converted into
the right to receive the Merger Consideration (as defined in Section 1.8(d)
below).
G. A special committee of the Board of Directors of Development
(the "SPECIAL COMMITTEE") and the Board of Directors of Development have
received the opinion of Xxxxxxxx Xxxxx Xxxxxx & Xxxxx Financial Advisors, Inc.
(the "FINANCIAL ADVISOR"), dated as of November 17, 2003 (the "FAIRNESS
OPINION") to the effect that, based on, and subject to, the various assumptions
and qualifications set forth therein, as of the date of such opinion, (1) the
Transaction (as defined in Schedule 1), including the Merger Consideration (as
defined in Section 1.8(d) below) to be received by the holders of the beneficial
interest in the Stockholder Warrants pursuant to the Partnership Merger, is fair
from a financial point of view to such holders.
H. The Special Committee has, based in part on the determination
of the Financial Advisor, approved this Agreement, determined and declared that
this Agreement, the Partnership Merger and the transactions contemplated hereby
are fair to, advisable, and in the best interests of, the Partnership, its
partners and the holders of the beneficial interest in the Stockholder Warrants
and has recommended approval of the Partnership Merger and adoption of the
Agreement by the Board of Directors of Development and Centex Homes.
I. The Board of Directors of Development has, based in part on
the determination of the Special Committee, (i) determined and declared that
this Agreement, the Partnership Merger and the transactions contemplated hereby
are fair to, advisable and in the best interests of, the Partnership, its
partners and the holders of the beneficial interest in the Stockholder Warrants,
(ii) approved this Agreement and, subject to the satisfaction, or waiver
thereof, of all the conditions to the Holding Merger as set forth in the Holding
Merger Agreement, the Partnership Merger, and (iii) has determined to submit
this Agreement to Centex Homes for approval.
J. The affirmative vote of Development, as holder of the GP
Units, and Centex Homes, as holder of a all of the Class A LP Units and Class B
LP Units, is required to adopt this Agreement for the Partnership Merger.
K. The Board of Directors of Development has directed that this
Agreement be submitted to Centex Homes for its approval by written consent.
L. The affirmative vote of Centex Homes, as the sole general
partner of Acquirer, and CREC and Centex Homes, as the sole limited partners of
Acquirer, is required to adopt this Agreement for the Partnership Merger.
M. Centex Homes has (i) determined that this Agreement and the
Partnership Merger are fair to and in the best interests of Acquirer and its
partners, and (ii) approved this Agreement and adopted the Partnership Merger as
set forth herein.
N. Centex Homes has directed that this Agreement be submitted to
the limited partners of Acquirer for their approval by written consent.
O. Centex, Acquirer and the Partnership desire to make certain
representations, warranties, covenants and agreements in connection with the
Partnership Merger and also to prescribe various conditions to the Partnership
Merger.
2
NOW, THEREFORE, in consideration of the respective covenants and
promises contained herein and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
ARTICLE I
THE PARTNERSHIP MERGER
SECTION 1.1 The Partnership Merger. Upon the terms and subject to the
conditions hereof, and in accordance with the applicable provisions of the Act,
Acquirer shall be merged with and into the Partnership. The Partnership shall
continue as the surviving limited partnership (the "SURVIVING PARTNERSHIP") in
the Partnership Merger and the separate existence of Acquirer shall cease
(Acquirer and the Partnership are sometimes referred to herein as the
"CONSTITUENT PARTNERSHIPS").
SECTION 1.2 Closing. Unless this Agreement has been terminated and the
transactions herein contemplated have been abandoned pursuant to Article VIII,
and subject to the satisfaction or waiver of the conditions set forth in Article
VII, the closing of the Partnership Merger (the "CLOSING") will take place at
12:00 p.m. on the first business day after satisfaction or waiver of the
conditions set forth in Article VII (the "CLOSING DATE"), at the offices of
Xxxxxxxx & Knight LLP, 0000 Xxxxxxx Xxx., Xxxxx 0000, Xxxxxx, Xxxxx, unless
another date, time or place is agreed to by the parties hereto, but in no event
later than March 31, 2004.
SECTION 1.3 Effective Time. On the Closing Date, the Surviving
Partnership shall file a certificate of merger (the "CERTIFICATE OF MERGER")
executed in accordance with the Act, with the Secretary of State of the State of
Delaware (the "SECRETARY"), and the Partnership Merger shall become effective at
11:59 p.m. Eastern Time on the date the Certificate of Merger is accepted for
filing by the Secretary or at such other time as is specified in the Certificate
of Merger to which Acquirer and the Partnership shall have agreed (the time the
Partnership Merger becomes effective being the "EFFECTIVE TIME").
SECTION 1.4 Effects of the Partnership Merger. The Partnership Merger
shall have the effects set forth in the Section 17-211 of the Act and all other
effects specified in the applicable provisions of the Act, including, without
limitation, that at the Effective Time, all the properties, rights, privileges,
powers and franchises of the Partnership and Acquirer shall vest in the
Surviving Partnership, and all debts, liabilities and duties of the Partnership
and Acquirer shall become the debts, liabilities and duties of the Surviving
Partnership.
SECTION 1.5 Certificate of Limited Partnership; Agreement of Limited
Partnership.
(a) The certificate of limited partnership of Acquirer, as in effect
immediately prior to the Effective Time, shall become the certificate of limited
partnership of the Surviving Partnership, except that the name of the Surviving
Partnership shall remain the name of the Partnership and, as so amended, until
thereafter further amended as provided therein and under the Act, it shall be
the certificate of limited partnership of the Surviving Partnership following
the Partnership Merger.
(b) The agreement of limited partnership of Acquirer as in effect at
the Effective Time shall be the agreement of limited partnership of the
Surviving Partnership following the Partnership Merger until thereafter changed
or amended as provided therein and under the Act.
3
SECTION 1.6 General Partner. At the Effective Time, the general partner
of the Partnership shall resign from its position as the general partner of the
Partnership. The general partner of Acquirer immediately prior to the Effective
Time shall be the general partner of the Surviving Partnership, until the
earlier of its resignation or removal.
SECTION 1.7 Employees. The employees of the Partnership immediately
prior to the Effective Time shall be the employees of the Surviving Partnership,
all such employees to hold their current jobs and office with the Partnership
and any of its Subsidiaries from the Effective Time until the earlier of their
resignation or removal.
A "SUBSIDIARY" of any person means another person if the first person
or a subsidiary thereof owns an amount of the voting securities, other voting
ownership or voting partnership interests which is sufficient to elect at least
a majority of its Board of Directors (or other governing body) of such person
or, if there are no such voting interests, if the first person or a subsidiary
thereof owns 50% or more of the equity interests of such person. Notwithstanding
anything in this Agreement to the contrary, any representation or warranty of
the Partnership with respect to Centex Development Company UK Limited and its
Subsidiaries (which Centex acknowledges are managed by Centex Homes, an
affiliate of Centex, pursuant to a Management Agreement dated as of April 1,
2001 between the Partnership and Centex Homes) is limited to the Knowledge of
the Partnership.
As used in this Agreement, the term "KNOWLEDGE" when referring to the
Partnership or any Subsidiary of the Partnership means the actual knowledge of
Development's current officers and directors without the conduct by any such
person of any independent investigation.
SECTION 1.8 Effect on Partnership Interests. As of the Effective Time,
by virtue of the Partnership Merger and without any action on the part of
Acquirer, Centex Homes, CREC, the Partnership, Development, the Surviving
Partnership or the holder of any partnership interest in Acquirer or the
Partnership:
(a) Conversion of Partnership Interests of Acquirer. Centex Homes' 1%
general partnership interest and 98% limited partnership interest in Acquirer
shall automatically be canceled and shall cease to exist, and no consideration
shall be delivered or deliverable in exchange. CREC's 1% limited partnership
interest in Acquirer shall automatically be canceled and shall cease to exist,
and no consideration shall be delivered or deliverable in exchange.
(b) Conversion of Partnership Interests of the Partnership.
Development's 1% general partnership interest in the Partnership shall be
converted into a 1% limited partnership interest in the Surviving Partnership
and Centex Homes' 99% limited partnership interest in the Partnership shall be
converted into a 98% limited partnership interest and a 1% general partnership
interest in the Surviving Partnership. Each of Development and Centex Homes
shall receive a capital account in the Surviving Partnership equal to its
capital account in the Partnership immediately before the Partnership Merger.
(c) Termination of Nominee Agreement. Pursuant to Section 8.3 of the
Nominee Agreement dated November 30, 1987 by and between Centex, Holding, the
Partnership, and First RepublicBank Dallas, National Association, as initial
Nominee, as amended by the contemplated amendment (the "NOMINEE AGREEMENT"),
subject to and upon the approval of a majority of the shares of Centex Common
Stock present in person or by proxy and entitled to
4
vote thereon at a meeting of the Centex stockholders, which approval will be
sought at a special meeting of the Centex stockholders (the "CENTEX STOCKHOLDER
APPROVAL"), and the consummation of the Merger and the Holding Merger, the
Nominee Agreement will be terminated and canceled in all respects without
effectuation of the Detachment (as defined in the Nominee Agreement) of the
Deposited Securities (as defined in the Nominee Agreement).
(d) Conversion of Stockholder Warrants. Each Stockholder Warrant held
by the Nominee for the benefit of the holders of Centex Common Stock immediately
prior to the Effective Time shall, by virtue of the Partnership Merger and
without any action on the part of the Nominee or the beneficial holders thereof,
be converted into the right to receive from the Surviving Partnership, and
Centex shall cause the Surviving Partnership to pay pursuant to this Agreement,
without interest, consideration equal to an amount that provides to each holder
of a beneficial interest in the Stockholder Warrants $.01 in cash per share of
Centex Common Stock held by such holder at the Effective Time (the "MERGER
CONSIDERATION"), less any required tax withholding. At the Effective Time, all
Stockholder Warrant certificates shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and each
beneficial owner of a certificate representing the Stockholder Warrants, held by
the Nominee on behalf of such beneficial owners, shall, to the extent such
warrant certificate represents such purchase right, cease to have any rights
with respect thereto, except the right to receive the Merger Consideration
applicable thereto, without interest, in accordance with Section 3.2.
As used in this Agreement the term "MERGER CONSIDERATION" shall mean
the per share amount in reference to the consideration designated on a per share
basis and, as the context otherwise requires, shall refer to the aggregate
consideration represented by the per share amount multiplied by the total number
of shares of Centex Common Stock then outstanding.
SECTION 1.9 Cancellation of Centex Warrants. At the Effective Time, the
outstanding warrants to purchase Class B Units of limited partnership interest
in the Partnership (subject to adjustment) owned by Centex at an exercise price
of $500 per unit (subject to adjustment) ("CENTEX WARRANTS"), shall
automatically be canceled and retired and shall cease to exist, and no
consideration shall be delivered or deliverable in exchange therefor.
SECTION 1.10 Further Assistance. If at any time after the Effective
Time, the Surviving Partnership shall consider or be advised that any deeds,
bills of sale, assignments or assurances or any other acts or things are
necessary, desirable or proper (i) to vest, perfect or confirm, of record or
otherwise, in the Surviving Partnership its right, title or interest in, to or
under any of the rights, properties or assets of the Constituent Partnerships
acquired or to be acquired as a result of the Partnership Merger or (ii)
otherwise to carry out the purposes of this Agreement, the Surviving Partnership
and its proper officers and directors or their designees are authorized to
execute and deliver, in the name and on behalf of the Constituent Partnerships,
all such deeds, bills of sale, assignments and assurances and do, in the name
and on behalf of the Constituent Partnerships, all such other acts and things
necessary, desirable or proper to vest, perfect or confirm its right, title or
interest in, to or under any of the rights, properties or assets of the
Constituent Partnerships acquired or to be acquired as a result of the
Partnership Merger and otherwise to carry out the purpose of this Agreement.
SECTION 1.11 Approval and Recommendation of Development. The Board of
Directors of Development hereby approves of and consents to the Partnership
Merger and represents that the Board of Directors of Development (hereafter, the
"DEVELOPMENT BOARD"), at a meeting duly
5
called and held on November 17, 2003, with Xxxxxxx X. Xxxxxxxx abstaining
because of his joint current employment relationship with Centex Service
Company, a wholly-owned subsidiary of Centex, adopted resolutions, in accordance
with the recommendation of the Special Committee, (i) determining that this
Agreement and the transactions contemplated hereby, including the Partnership
Merger, are fair to, and in the best interests of, the Partnership, its partners
and the holders of the beneficial interest in the Stockholder Warrants, (ii)
approving, adopting and declaring advisable this Agreement and the transactions
contemplated hereby and (iii) recommending that Centex Homes vote in favor of
the Partnership Merger, subject to the Development Board's right to withdraw,
modify or amend such recommendation if the Development Board or Special
Committee determines in good faith, after receipt of the advice of its outside
counsel, that such action is necessary for the Development Board to comply with
its fiduciary duties under applicable law. The Partnership agrees to execute an
amendment to the Nominee Agreement, in the form previously provided, that will
allow, subject to the Centex Stockholder Approval, for the termination of the
Nominee Agreement in all respects without effectuation of a Detachment (as
defined in the Nominee Agreement) or distribution of the Deposited Securities
(as defined in the Nominee Agreement). The Financial Advisor has delivered to
the Special Committee and the Development Board its Fairness Opinion to the
effect that, as of the date of such opinion, the Transaction, including the
Merger Consideration, is fair to the holders of the beneficial interest in the
Stockholder Warrants from a financial point of view.
ARTICLE II
LIMITED PARTNER CONSENTS
SECTION 2.1 Limited Partner Consents. In accordance with Sections
17-211 and 17-302 of the Act, as promptly as practicable (i) Development, in its
capacity as general partner of the Partnership, will submit this Agreement to
the sole limited partner of the Partnership, Centex Homes, for its approval by
written consent, and (ii) Centex Homes, in its capacity as general partner of
Acquirer, will submit this Agreement to the other limited partner of Acquirer,
CREC, for its approval by written consent.
ARTICLE III
NO DISSENTERS' RIGHTS; PAYMENT FOR STOCKHOLDER WARRANTS; RELATED MATTERS
SECTION 3.1 No Dissenters' Rights. Pursuant to the provisions of Act,
the agreements governing the Stockholder Warrants and the Nominee Agreement, the
holders of the beneficial interest in the Stockholder Warrants do not have any
dissenters' rights or rights of appraisal as a result of the Partnership Merger
and, upon effectiveness of the Partnership Merger, shall be entitled to receive
only the Merger Consideration.
SECTION 3.2 Payment for Warrants.
(a) Prior to the Effective Time, Centex will engage a paying agent (the
"PAYING AGENT") for the payment of the Merger Consideration upon consummation of
the Partnership Merger. Promptly following the Effective Time, Centex shall
cause the Surviving Partnership to provide to the Paying Agent cash in an amount
sufficient to pay the Merger Consideration pursuant to Section 1.8. All of the
fees and expenses of the Paying Agent shall be borne by the Surviving
Partnership.
6
(b) As soon as practicable after the Effective Time, the Paying Agent
shall cause to be delivered to each beneficial holder of the Stockholder
Warrants (as determined by such holder's status as a record holder of Centex
Common Stock) immediately prior to the Effective Time a check in the amount to
which such holder is entitled, after giving effect to any required tax
withholdings.
(c) No payment of Merger Consideration can be paid to an owner of the
Stockholder Warrants which is not registered in the transfer records of the
Partnership, unless such holder notifies Centex in writing prior to the
Effective Time and such notice is accompanied by all documents required by the
Partnership and the transfer agent, as the case may be, to evidence and effect a
transfer of ownership in the transfer records of the Partnership prior to the
Effective Time.
(d) From and after the Effective Time there shall be no transfers on
the transfer books of the Surviving Partnership of the Stockholder Warrants that
were outstanding immediately prior to the Effective Time.
(e) The Merger Consideration paid in accordance with the terms of this
Article III shall be deemed to have been paid and issued in full satisfaction of
all rights pertaining to the Stockholder Warrants.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP
The Partnership represents and warrants to Centex and Acquirer as
follows:
SECTION 4.1 Partnership Existence and Power. The Partnership is a
limited partnership duly organized, validly existing and in good standing under
the laws of the State of Delaware, and has full power to carry on its business
as presently conducted. The Partnership is duly qualified to do business as a
foreign limited partnership and is in good standing in each jurisdiction where
the character of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except where the failure to be so
qualified or in good standing, individually or in the aggregate, would not have
a Partnership Material Adverse Effect.
As used herein, the term "PARTNERSHIP MATERIAL ADVERSE EFFECT" shall
mean any adverse change, effect, event, occurrence or state of facts (a)
affecting the financial condition, business, assets, properties, operations or
results of operations of the Partnership or any of its Subsidiaries which is
material to the Partnership and its Subsidiaries, taken as a whole, or (b) which
would prevent or materially impair the Partnership from consummating the
Partnership Merger, which has occurred or would reasonably be expected to occur
as a result of any such change, effect, event, occurrence or state of facts.
SECTION 4.2 Authorization; Approvals. Development has the requisite
corporate power and authority to execute and deliver this Agreement on behalf of
the Partnership and, subject to the Limited Partner Approval (as defined in
Section 4.15 below) of this Agreement, as required by applicable law, to
consummate the Partnership Merger. The execution, delivery and performance of
this Agreement by the Partnership and the consummation by the Partnership of the
Partnership Merger have been duly authorized by all necessary action on the part
of
7
Development, and, except for the Limited Partner Approval, no other action on
the part of the Partnership is necessary to authorize the consummation of the
Partnership Merger. This Agreement has been duly executed and delivered by
Development on behalf of the Partnership and, assuming that this Agreement
constitutes a valid and binding obligation of Centex and Acquirer, this
Agreement constitutes a valid and binding obligation of the Partnership,
enforceable against the Partnership in accordance with its terms, except to the
extent that its enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the enforcement
of creditors' rights generally or by general equitable or fiduciary principles.
SECTION 4.3 Governmental Authorization. To the Knowledge of the
Partnership, the execution, delivery and performance by the Partnership of this
Agreement and the consummation by the Partnership of the Partnership Merger
require no action by or in respect of, or filing with, any federal, state or
local governmental authority, or any court, administrative or regulatory agency
or commission or other governmental authority or agency, (each, a "GOVERNMENTAL
ENTITY"), other than, if any, (a) the filing of (i) the Certificate of Merger in
accordance with the Act and (ii) appropriate documents with the relevant
authorities of other states or jurisdictions in which the Partnership or any of
its Subsidiaries is qualified to do business; (b) compliance with any applicable
requirements of the New York Stock Exchange ("NYSE"); (c) compliance with any
applicable requirements of the London Stock Exchange ("LSE"); (d) compliance
with any applicable requirements of the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder (the "SECURITIES ACT") and the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "EXCHANGE ACT"); (e) such as may be required under
any applicable state securities or blue sky laws or state takeover laws; and (f)
such other consents, approvals, actions, orders, authorizations, registrations,
declarations and filings which, if not obtained or made, would not, individually
or in the aggregate, have a Partnership Material Adverse Effect (the filings and
authorizations referred to in clauses (a) through (f) being referred to
collectively as the "PARTNERSHIP REQUIRED GOVERNMENTAL CONSENTS").
SECTION 4.4 Non-Contravention. The execution, delivery and performance
by Development, on behalf of the Partnership, of this Agreement and the
consummation by the Partnership of the Partnership Merger do not and will not
(a) contravene or conflict with the Partnership's certificate of limited
partnership or agreement of limited partnership, (b) assuming that all of the
Partnership Required Governmental Consents are obtained, contravene or conflict
with or constitute a violation of any provision of any law, regulation,
judgment, injunction, order or decree binding upon or applicable to the
Partnership, (c) to the Knowledge of the Partnership constitute a default under
or give rise to a right of termination, cancellation or acceleration (with or
without due notice or lapse of time or both) of any right or obligation of the
Partnership or to a loss of any benefit or status to which the Partnership is
entitled under any provision of any contract or other instrument binding upon
the Partnership (other than any note, mortgage, indenture or loan agreement or
similar instrument made or given by the Partnership or its Subsidiaries) or any
license, franchise, permit or other similar authorization held by the
Partnership or (d) to the Knowledge of the Partnership result in the creation or
imposition of any Lien (as defined below) on any asset of the Partnership, other
than, in the case of each of (b), (c) and (d), any such items that would not,
individually or in the aggregate, have a Partnership Material Adverse Effect.
8
As used in this Agreement, "LIEN" means any mortgage, lien, pledge,
charge, claim, security interest or encumbrance of any kind; provided, however,
that the term "LIEN" shall not include (i) liens for water and sewer charges and
current taxes, assessments and other governmental levies, fees or charges not
yet due and payable or being contested in good faith, (ii) landlords',
mechanics', carriers', workers', repairers', materialmen's, warehousemen's and
similar liens, (iii) purchase money liens and liens securing rental payments
under capital lease arrangements and (iv) liens or imperfections on property
which do not materially detract from the value or the existing use of the
property affected by such lien or imperfection.
SECTION 4.5 Capitalization.
(a) There were, as of the close of business on the date hereof, (i) a
1% general partner interest held by Development and (ii) a 99% limited partner
interest consisting of 32,260 Class A LP Units and 211,142 Class C LP Units
outstanding and held by Centex Homes; no Class B LP Units are outstanding. The
Partnership's second amended agreement of limited partnership authorizes the
general partner of the partnership to cause the Partnership to issue additional
LP Units or series or classes of LP Units or other security from time to time,
upon the consent of a majority of the outstanding LP Units. All outstanding
partnership units of the Partnership are duly authorized, validly issued, fully
paid and not subject to or issued in violation of any purchase option, call
option, right of first refusal, preemptive right, subscription right or any
similar right under any provision of the Act, the Partnership's certificate of
limited partnership, the Partnership's agreement of limited partnership or any
contract to which the Partnership is a party or otherwise bound.
(b) As of the date hereof, except for the Stockholder Warrants and the
Centex Warrants and as described in Section 4.5(a) herein, there are no
outstanding (i) partnership units or other voting securities of the Partnership,
(ii) securities of the Partnership convertible into or exchangeable for
partnership units or voting securities of the Partnership or (iii) options or
other rights to acquire from the Partnership, or obligations of the Partnership
to issue, any partnership units, voting securities or securities convertible
into or exchangeable for partnership units or voting securities of the
Partnership. There are no outstanding obligations of the Partnership or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any LP Units or GP
Units or other partnership units of the Partnership or any of its Subsidiaries
or to provide funds to make any investment (in the form of a loan, capital
contribution or otherwise) in any Subsidiary of the Partnership or other entity,
other than loans to Subsidiaries in the ordinary course of business.
SECTION 4.6 Subsidiaries.
(a) Each Subsidiary of the Partnership is an entity duly organized,
validly existing and in good standing under the laws of its state or country of
organization, and has all powers required to carry on its business as now
conducted, except where the failure to be so organized or in such existence or
standing or have such powers, individually or in the aggregate, would not have a
Partnership Material Adverse Effect. Each Subsidiary of the Partnership is duly
qualified to do business as a foreign entity and is in good standing in each
jurisdiction where the character of the property owned or leased by it or the
nature of its activities makes such qualification necessary, except where the
failure to be so qualified, individually or in the aggregate, would not have a
Partnership Material Adverse Effect.
9
(b) All of the outstanding shares of capital stock of, or other
ownership interest in, each Subsidiary of the Partnership, have been duly
authorized and validly issued and all of the outstanding shares of capital stock
of each Subsidiary that is a corporation are fully paid and nonassessable. All
of the outstanding capital stock or other ownership interest which is owned,
directly or indirectly, by the Partnership in each of its Subsidiaries is owned
free and clear of any Lien and, with respect to corporate Subsidiaries, free of
any other limitation or restriction, including any limitation or restriction on
the right to vote, sell or otherwise dispose of such capital stock or other
ownership interest (other than any of such under the Securities Act or any state
or foreign securities laws) (provided that restrictions on these rights with
respect to non-corporate subsidiaries would not have a Partnership Material
Adverse Effect). There are no outstanding (i) securities of the Partnership or
any of its Subsidiaries convertible into or exchangeable or exercisable for
shares of capital stock or other voting securities or ownership interests in any
Subsidiary of the Partnership, (ii) options, warrants or other rights to acquire
from the Partnership or any of its Subsidiaries, or obligations of the
Partnership or any of its Subsidiaries to issue, any capital stock, voting
securities or other ownership interests in, or any securities convertible into
or exchangeable or exercisable for any capital stock, voting securities or
ownership interests in, any Subsidiary of the Partnership or (iii) obligations
of the Partnership or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any outstanding securities of any Subsidiary of the Partnership or any
capital stock of, or other ownership interests in, any Subsidiary of the
Partnership. There are no other persons in which the Partnership owns, of record
or beneficially, any direct or indirect equity or similar interest or any right
(contingent or otherwise) to acquire the same.
(c) The execution, delivery and performance by Development, on behalf
of the Partnership, of this Agreement and the consummation by the Partnership of
the Partnership Merger do not and will not (a) contravene or conflict with any
Subsidiary of the Partnership's articles of incorporation, by-laws or similar
governing document, (b) assuming that all of the Partnership Required
Governmental Consents are obtained, contravene or conflict with or constitute a
violation of any provision of any law, regulation, judgment, injunction, order
or decree binding upon or applicable to any Subsidiary of the Partnership, (c)
to the Knowledge of the Partnership, constitute a default under or give rise to
a right of termination, cancellation or acceleration (with or without due notice
or lapse of time or both) of any right or obligation of any Subsidiary of the
Partnership or to a loss of any benefit or status to which any Subsidiary of the
Partnership is entitled under any provision of any contract or other instrument
binding upon any Subsidiary of the Partnership (other than any note, mortgage,
indenture or loan agreement or similar instrument given by the Partnership or
its Subsidiaries) or any license, franchise, permit or other similar
authorization held by any Subsidiary of the Partnership or (d) to the Knowledge
of the Partnership, result in the creation or imposition of any Lien on any
asset of any Subsidiary of the Partnership, other than, in the case of each of
(b), (c) and (d), any such items that would not, individually or in the
aggregate, have a Partnership Material Adverse Effect.
SECTION 4.7 Past SEC Documents; Undisclosed Liabilities. The
Partnership has filed, in a timely manner, all reports, filings, registration
statements and other documents required to be filed by it with the Securities
and Exchange Commission ("SEC") after January 1, 2000 and prior to the date of
this Agreement (collectively, the "PAST SEC DOCUMENTS"). As of its respective
filing date or as amended or supplemented prior to the date hereof, each Past
SEC Document, to the Knowledge of the Partnership, complied as to form in all
material respects with the applicable requirements of the Securities Act and/or
the Exchange Act, as the case may be
10
and did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The consolidated financial statements of the Partnership
included in the Past SEC Documents, to the Knowledge of the Partnership, comply
as to form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles ("GAAP")
(except, in the case of unaudited statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated financial
position of the Partnership and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). Except as set forth in the Past SEC Documents filed
and publicly available prior to the date hereof, to the Knowledge of the
Partnership, neither the Partnership nor any of its Subsidiaries has any
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise) required by GAAP to be set forth on a consolidated balance sheet
of the Partnership and its consolidated Subsidiaries or in the notes thereto and
that, individually or in the aggregate, could reasonably be expected to have a
Partnership Material Adverse Effect.
SECTION 4.8 [Reserved].
SECTION 4.9 Absence of Certain Changes. Since June 30, 2003, except as
otherwise expressly contemplated by this Agreement as disclosed or provided for
in the Past SEC Documents, to the Knowledge of the Partnership, the Partnership
and its Subsidiaries have conducted their business in the ordinary course
consistent with past practice and there has not been any damage, destruction or
other casualty loss (whether or not covered by insurance) or any action, event,
occurrence, development or state of circumstances or facts that, individually or
in the aggregate, would have a Partnership Material Adverse Effect. Since June
30, 2003, to the Partnership's Knowledge, neither the Partnership nor any of its
Subsidiaries has taken any action other than in the ordinary course of business
which, if taken after the date hereof, would constitute a breach of any
provision set forth in Section 6.1 hereof, except as disclosed or provided for
in the Past SEC Documents.
SECTION 4.10 Litigation. As of the date of this Agreement except as
disclosed or provided for in the Past SEC Documents, (a) to the Knowledge of the
Partnership there are no pending or threatened actions, suits, claims,
litigation or other governmental or judicial proceedings or investigations or
arbitrations ("PROCEEDINGS") against the Partnership, its Subsidiaries or any of
their respective properties, assets or businesses, or, to the Knowledge of the
Partnership, any of the Partnership's or any of its Subsidiary's current or
former directors or officers (in their capacity as such) or any other person
whom the Partnership or any Subsidiary has agreed to indemnify (that would give
rise to the obligation of the Partnership to indemnify such person); and (b) to
the Knowledge of the Partnership, there are no outstanding orders, judgments,
injunctions, awards or decrees of any Governmental Entity ("ORDERS") against the
Partnership, its Subsidiaries, any of their respective properties, assets or
businesses, or, to the Knowledge of the Partnership, any of the Partnership's or
its Subsidiaries' current or former directors (in their capacity as such) or
officers or any other person whom the Partnership or any Subsidiary has agreed
to indemnify (that would give rise to the obligation of the Partnership to
11
indemnify such person), except where such Proceedings or Orders, individually or
in the aggregate, would not have a Partnership Material Adverse Effect.
SECTION 4.11 [Reserved].
SECTION 4.12 Compliance with Laws; Licenses, Permits and Registrations.
(a) To the Knowledge of the Partnership, neither the Partnership nor
any of its Subsidiaries is in violation of, or has violated, any applicable
provisions of any laws, statutes, ordinances, regulations, judgments,
injunctions, orders or consent decrees (including, without limitation, any laws,
statutes, ordinances, regulations, judgments, injunctions, orders or consent
decrees relating to pollution, protection of human health, safety or the
environment (collectively, "ENVIRONMENTAL LAWS")), except for any such
violations which, individually or in the aggregate, would not have a Partnership
Material Adverse Effect.
(b) To the Knowledge of the Partnership, each of the Partnership and
its Subsidiaries has all permits, licenses, approvals, authorizations of and
registrations with and under all federal, state, local and foreign laws
(including, without limitation, under any Environmental Law), and from all
Governmental Entities required by the Partnership and its Subsidiaries to carry
on their respective businesses as currently conducted, except where the failure
to have any such permits, licenses, approvals, authorizations or registrations,
individually or in the aggregate, would not have a Partnership Material Adverse
Effect.
SECTION 4.13 Contracts. Each material lease, license, contract,
agreement or other similar obligation to which the Partnership or any of its
Subsidiaries is a party or by which any of them or any of their properties may
be bound, to the Knowledge of the Partnership, is valid, binding and enforceable
and in full force and effect with respect to the Partnership or its Subsidiaries
and, to the Knowledge of the Partnership, with respect to the other parties
thereto, except where the failure thereof would not have a Partnership Material
Adverse Effect, and there are no existing defaults thereunder with respect to
the Partnership or any of its Subsidiaries or, to the Partnership's Knowledge,
the other parties thereto, except for those defaults that would not have a
Partnership Material Adverse Effect. Other than any agreement among only the
Partnership and one or more of its wholly-owned Subsidiaries, neither the
Partnership nor any of its Subsidiaries is a party to any agreement that
materially limits the ability of the Partnership or any of its Subsidiaries to
compete in or conduct any material line of its business or compete with any
person or in any geographic area or during any period of time.
SECTION 4.14 Properties. To the Knowledge of the Partnership, the
Partnership and its Subsidiaries own fee simple title to or have a valid
leasehold interest in each of their real properties (the "PARTNERSHIP
PROPERTIES"), free and clear of liens, mortgages or deeds of trust, claims
against title, charges which are liens, security interests or other encumbrances
on title, and the Partnership Properties are not subject to any rights of way,
written agreements, laws, ordinances and regulations affecting building use or
occupancy, or reservations of an interest in title (collectively, "PROPERTY
RESTRICTIONS"), except for, if any, (i) real estate taxes and special
assessments, (ii) inchoate liens imposed for construction work in progress
incurred in the ordinary course of business (iii) real property liens and other
encumbrances of record recorded in the appropriate county or counties where the
property is located; or (iv) Property Restrictions imposed or promulgated by law
or any governmental body or authority with respect to real property, including
zoning regulations, that do not (a) materially adversely affect the current use
12
of the property, (b) materially detract from the value of or materially
interfere with the current use of the property, or (c) materially detract from
the value of or materially interfere with the planned use of any land held for
development or properties being developed or expanded.
SECTION 4.15 Required Vote; Board Approval. The affirmative vote of
Development, as holder of the GP Units, (the "GENERAL PARTNER APPROVAL") and the
affirmative vote of Centex Homes, as holder of a majority of both the Class A LP
Units and the Class C LP Units (the "LIMITED PARTNER APPROVAL") is the only vote
of any class or series of partnership units of the Partnership required by law,
rule or regulation or the certificate of limited partnership or the agreement of
limited partnership of the Partnership to approve this Agreement and the
Partnership Merger. Pursuant to Section 1.11, the Partnership has obtained the
General Partner Approval to this Agreement and the Partnership Merger.
SECTION 4.16 [Reserved].
SECTION 4.17 Finders' Fees. Except for the Financial Advisor, the fees
of which will be paid by the Partnership, in connection with this Agreement, the
Partnership Merger and the transactions contemplated hereby based upon
arrangements made by or on behalf of the Partnership, no investment banker,
broker, finder or other such intermediary has been retained by, or is authorized
to act on behalf of, the Partnership or is entitled to any fee or commission
from the Partnership.
SECTION 4.18 Opinion of the Financial Advisor. The Special Committee
and the Development Board have received the Fairness Opinion from the Financial
Advisor, to the effect that, as of the date of such opinion, the Transaction,
including the Merger Consideration, is fair to the holders of the beneficial
interest in the Stockholder Warrants from a financial point of view. A signed
copy of the Fairness Opinion has been delivered to Acquirer. The Partnership
hereby represents and warrants that it has been authorized by the Financial
Advisor to permit the inclusion of the Fairness Opinion and references thereto
in any required SEC filings. Other than the fee payable to the Financial Advisor
in connection with the Fairness Opinion, the Closing of the Partnership Merger
and the reimbursement and indemnification obligations of the Partnership to the
Financial Advisor related to the Fairness Opinion, neither Development, the
Partnership nor Development's directors has any continuing obligation to the
Financial Advisor with respect to the transactions contemplated hereby.
SECTION 4.19 [Reserved].
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF CENTEX AND ACQUIRER
Centex and Acquirer represent and warrant to the Partnership as
follows:
SECTION 5.1 Corporate/Partnership Existence and Power. Centex is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Nevada and has all full corporate power required to conduct
its business as presently conducted. Acquirer is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has full power to carry on its business as presently conducted.
Since the date of its incorporation, Acquirer has not engaged in any activities
other than in connection with or as contemplated by this Agreement.
13
SECTION 5.2 Authorization; Approvals. Centex and Acquirer each have the
requisite power and authority to execute and deliver this Agreement and, subject
to the approval of Centex Homes and CREC, as the limited partners of Acquirer,
consummate the Partnership Merger. The execution, delivery and performance by
Centex and Acquirer of this Agreement and the consummation by Centex and
Acquirer of the Partnership Merger have been duly authorized by all necessary
action and no other action on the part of Centex or Acquirer is necessary to
authorize the consummation of the Partnership Merger other than the Centex
Stockholder Approval and the approval of Centex Homes and CREC. This Agreement
has been duly and validly executed and delivered by Centex and Acquirer and,
assuming that this Agreement constitutes the valid and binding obligation of the
Partnership, this Agreement constitutes a valid and binding agreement of each of
Centex and Acquirer, enforceable in accordance with its terms, except to the
extent that its enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the enforcement
of creditors' rights generally or by general equitable or fiduciary principles.
SECTION 5.3 Governmental Authorization. The execution, delivery and
performance by Centex and Acquirer of this Agreement and the consummation by
Centex and Acquirer of the Partnership Merger requires no action by or in
respect of, or filing with, any Governmental Entity, other than (a) those set
forth in clauses (a) through (f) of Section 4.3 and (b) such other consents,
approvals, actions, orders, authorizations, registrations, declarations and
filings which, if not obtained or made, would not, individually or in the
aggregate, have a Centex Material Adverse Effect (the filings and authorizations
referred to in clauses (a) and (b) being referred to collectively as the "CENTEX
REQUIRED GOVERNMENTAL CONSENTS").
As used herein, the term "CENTEX MATERIAL ADVERSE EFFECT" shall mean
any adverse change, effect, event, occurrence or state of facts resulting in a
material adverse change in the ability of Centex to consummate the Partnership
Merger and other transactions contemplated by this Agreement, which has occurred
or would reasonably be expected to occur as a result of any such change, effect,
event, occurrence or state of facts.
SECTION 5.4 Non-Contravention. The execution, delivery and performance
by Centex and Acquirer of this Agreement and the consummation by Centex and
Acquirer of the Partnership Merger do not and will not (a) contravene or
conflict with the articles of incorporation or by-laws of Centex or the
certificate of limited partnership or agreement of limited partnership of
Acquirer, (b) assuming that all of the Centex Required Governmental Consents are
obtained, contravene or conflict with or constitute a violation of any provision
of any law, regulation, judgment, injunction, order or decree binding upon or
applicable to Centex or Acquirer, (c) constitute a default under or give rise to
a right of termination, cancellation or acceleration (with or without due notice
or lapse of time or both) of any right or obligation of Centex or Acquirer or to
a loss of any benefit or status to which Centex or Acquirer is entitled under
any provision of any agreement, contract or other instrument binding upon Centex
or Acquirer or any license, franchise, permit or other similar authorization
held by Centex or Acquirer or (d) result in the creation or imposition of any
Lien on any asset of the Centex or Acquirer other than, in the case of each of
(b), (c) and (d), any such items that would not, individually or in the
aggregate, have a Centex Material Adverse Effect.
SECTION 5.5 Information in Securities Filings. All documents required
to be filed by Centex or Acquirer with the SEC in connection with the
Partnership Merger, if any, or any supplement or amendment to any such filings,
will not, at the respective times when such are
14
filed with the SEC and/or are first published, as the case may be, and at the
Effective Time, in each case, contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they are made, not
misleading. The representations and warranties contained in this Section 5.5
will not apply to statements or omissions included in any such filings based
upon information furnished in writing by or on behalf of the Partnership.
SECTION 5.6 Finders' Fees. There is no investment banker, broker,
finder or other intermediary who is entitled to any fee or commission from
Centex or any of its affiliates in connection with the Partnership Merger and
the transactions contemplated hereby based upon arrangements made by or on
behalf of Centex or Acquirer.
ARTICLE VI
COVENANTS
SECTION 6.1 Conduct of Business of the Partnership. Except as expressly
provided in this Agreement or except with the prior consent of Centex from the
date of this Agreement to the Effective Time or the earlier termination of this
Agreement, the Partnership shall, and shall cause each of its Subsidiaries to,
conduct its business in the usual, regular and ordinary course in substantially
the same manner as previously conducted or proposed to be conducted and use all
reasonable efforts to preserve intact its current business organization, and
keep its relationships with customers, suppliers, licensors, licensees,
distributors and others having business dealings with them to the end that its
goodwill and ongoing business shall be unimpaired at the Effective Time. In
addition, and without limiting the generality of the foregoing, until the
Effective Time or the earlier termination of this Agreement the Partnership will
not, and will not permit any of its Subsidiaries to, without the prior consent
of Centex:
(a) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its partnership units or other securities;
(b) split, combine, recapitalize or reclassify any of its partnership
units or issue or authorize the issuance of any other securities in respect of,
in lieu of or in substitution for, its partnership units;
(c) purchase, redeem or otherwise acquire any partnership interest,
shares of capital stock or other ownership interest of the Partnership or any of
its Subsidiaries or any other securities thereof or any rights, warrants or
options to acquire any such partnership units or other securities;
(d) authorize for issuance, issue, deliver, sell, pledge or otherwise
encumber any of its partnership units or other securities of any of its
Subsidiaries, any other voting securities or any securities convertible into, or
any rights, warrants or options to acquire, any such partnership units, voting
securities or convertible securities or any other securities or equity
equivalents (including without limitation stock appreciation rights);
(e) amend its certificate or articles of incorporation, certificate of
limited partnership, agreement of limited partnership, by-laws or other
comparable organizational documents;
(f) adopt resolutions providing for or authorizing a liquidation or a
dissolution, except as part of a Transaction Proposal (as defined in Section 6.3
below); or
15
(g) authorize any of, or commit or agree to take any of, the foregoing
actions.
SECTION 6.2 Indemnification and Insurance.
(a) From and after the Effective Time for six (6) years, Centex and the
Surviving Partnership shall indemnify each present and former director and
officer of Development, including without limitation members of the Special
Committee ("INDEMNIFIED PARTIES"), against any costs or expenses (including
reasonable attorneys' fees), judgments, fines, losses, claims, damages,
penalties or liabilities (collectively, "COSTS") incurred in connection with any
claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to matters
existing or occurring at or prior to the Effective Time, whether asserted or
claimed prior to, at or after the Effective Time, to the fullest extent
permitted by law, and shall, in connection with defending against any action for
which indemnification is available hereunder, either advance expenses to, or
promptly reimburse such Indemnified Parties from time to time upon receipt of
sufficient supporting documentation, for any reasonable costs and expenses
reasonably incurred by such Indemnified Parties; provided that such advancement
or reimbursement shall be conditioned upon such Indemnified Parties' agreement
promptly to return such amounts if (i) a court of competent jurisdiction through
a final nonappealable order shall ultimately determine that indemnification of
such Indemnified Parties is prohibited by applicable law, and (ii) Centex and
the Surviving Partnership have made commercially reasonable good faith efforts
to collect such expenses under the officers' and directors' liability insurance
required by Section 6.2(c), and such efforts are not successful. The foregoing
rights shall be in addition to any rights to which any Indemnified Party may be
entitled by reason of the agreement of limited partnership or the certificate of
limited partnership of the Partnership or the by-laws or articles of
incorporation of any of its Subsidiaries, any contract and/or any applicable
law.
(b) All rights to indemnification and all limitations on liability
existing in favor of any Indemnified Parties as provided in the Partnership's
certificate of limited partnership or partnership agreement, as in effect as of
the date hereof, to the extent relating to acts or omissions occurring prior to
the Effective Time, shall continue in full force and effect in accordance with
their terms from and after the Effective Time. The certificate of limited
partnership and partnership agreement of the Surviving Partnership following the
Effective Time shall contain the provisions with respect to indemnification and
limitations on liability set forth in the Partnership's certificate of limited
partnership or partnership agreement on the date hereof, which provisions, to
the extent relating to acts or omissions occurring on or prior to the Effective
Time, shall not be amended, repealed or otherwise modified in any manner that
would adversely affect the rights thereunder of the Indemnified Parties, unless,
and only to the extent, such modification is required by applicable law.
(c) For six (6) years after the Effective Time, Centex shall provide
officers' and directors' liability insurance in respect of acts or omissions
occurring prior to the Effective Time covering each person currently covered by
the Development's officers' and directors' liability insurance policy on terms
and with respect to coverage and amount not less favorable than those of such
policy in effect on the date hereof (whether through existing policies (and
extensions thereof) or other policies obtained for Centex generally). For the
period after the date that is six (6) years after the Effective Time, Centex
shall provide to each person currently covered by Development's officers' and
directors' liability insurance policy not less than the same officers' and
directors' liability insurance coverage in respect of acts or omissions
occurring prior to the
16
Effective Time as Centex provides with respect to former directors and officers
of Centex generally.
(d) The obligations of Centex and the Surviving Partnership under this
Section 6.2 shall not be terminated or modified in such a manner as to adversely
affect any Indemnified Party to whom this Section applies without the written
consent of such affected Indemnified Party, it is being expressly agreed that
this Section 6.2 shall survive the termination of this Agreement. The rights of
each Indemnified Party under this Section 6.2 shall be in addition to any rights
such Person may have under the Partnership's certificate of limited partnership
or partnership agreement, or under the Act or any other applicable law or under
any agreement of any Indemnified Party with the Partnership. All rights to
indemnification and all limitations on liability existing in favor of any
Indemnified Party as provided in an agreement between any Indemnified Party and
the Partnership as in effect as of the date hereof shall continue in full force
and effect in accordance with their terms after the Effective Time.
(e) If the Surviving Partnership (i) consolidates with or merges into
any other Person and shall not be the continuing or the surviving partnership or
entity of such consolidation or merger, or (ii) transfers or conveys all or
substantially all of its assets or capital securities to any Person, then, and
in each such case, proper provision shall be made with respect to the
obligations set forth in this Section 6.2 so that such obligations of the
Surviving Partnership are performed in accordance with their terms in such
event.
SECTION 6.3 Other Proposals.
(a) From and after the date of this Agreement until the termination of
this Agreement, neither Development, the Partnership, any of its Subsidiaries,
nor any of their respective officers, directors, employees, representatives,
agents or affiliates (including, without limitation, any investment banker,
attorney or accountant retained by Development, the Partnership or any of its
Subsidiaries or affiliates) (collectively, "RESPONSIBLE PARTIES") will directly
or indirectly initiate, solicit or knowingly encourage (including by way of
furnishing non-public information or assistance), or take any other action to
facilitate knowingly, any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to any Transaction Proposal,
or enter into or maintain or continue discussions or negotiate with any
individual, corporation, partnership, joint venture, association, trust,
unincorporated organization or other entity ("PERSON") in furtherance of such
inquiries or to obtain a Transaction Proposal or agree to or endorse any
Transaction Proposal or authorize or permit any Responsible Party to take any
such action; provided, however, that nothing contained in this Agreement shall
prohibit the Development Board or the Special Committee from, prior to the
Centex Stockholder Approval, but subject to compliance with the remaining
provisions of this Section 6.3: (i) furnishing information (other than any
non-public information relating to the terms or structure of the transactions
contemplated by this Agreement) to or entering into discussions or negotiations
with any Person that makes a bona fide Transaction Proposal which was not
directly or indirectly solicited in violation of this Section 6.3 only to the
extent that: (1) the Development Board or Special Committee, after consultation
with its financial advisors and after receipt of advice from outside legal
counsel, determines in good faith that such action is necessary for the Board to
comply with its fiduciary duties to the Partnership's limited partners and, to
the extent of any duties, to the Partnership's warrant holders, in each case
under applicable law and (2) prior to taking such action the Partnership
provides prompt notice to Acquirer to the effect that it is furnishing such
information to or entering into discussions or negotiations with such Person and
17
receives from such Person an executed confidentiality agreement; (ii) failing to
make or withdrawing or modifying its recommendation referred to in Section 1.11
if there exists a Transaction Proposal and the Development Board or Special
Committee, after consultation with its financial advisors and after receipt of
advice from outside legal counsel, determines in good faith that such action is
necessary for the Development Board to comply with its fiduciary duties to the
Partnership's limited partners and, to the extent of any duties, to the
Partnership's warrant holders, in each case under applicable law in connection
with such Transaction Proposal; or (iii) making to the Partnership's partners
any recommendation and related filing with the SEC as required by Rule 14e-2 and
14d-9 under the Exchange Act, with respect to any Transaction Proposal, or
taking any other legally required action with respect to such Transaction
Proposal (including, without limitation, the making of public disclosures as may
be necessary or reasonably advisable under applicable securities laws) if the
Development Board or the Special Committee, after consultation with their
financial advisors and receipt of advice from independent outside legal counsel,
determines in good faith that such action is necessary for the Development Board
to comply with its fiduciary duties to Partnership's limited partners and, to
the extent of any duties, to the Partnership's warrant holders, in each case
under applicable law. Consistent with the foregoing provisions of this Section
6.3, the Partnership shall immediately cease and terminate any currently
existing solicitation, initiation, encouragement, activity, discussion or
negotiation with any Person conducted heretofore by the Partnership or any
Responsible Parties with respect to the foregoing. The Partnership agrees not to
release any third party from, or waive any provisions of, any standstill
agreement to which it is a party or any confidentiality agreement between it and
another Person who has made, or who may reasonably be considered likely to make,
a Transaction Proposal. In the event of an exercise of the Partnership's or the
Development Board's rights under clauses (i), (ii) or (iii) above and subject to
compliance with this Section 6.3, notwithstanding anything contained in this
Agreement to the contrary, such exercise of rights shall not constitute a breach
of this Agreement by the Partnership.
For purposes of this Agreement "TRANSACTION PROPOSAL" shall mean any of
the following (other than the transactions between the Partnership, Acquirer and
Centex contemplated by this Agreement) involving the Partnership or any of its
Subsidiaries: (i) any merger, consolidation, share exchange, recapitalization,
business combination or other similar transaction; (ii) except in the ordinary
course of business, any sale, lease, exchange, mortgage, pledge, transfer or
other disposition of 20% or more of the assets of the Partnership and its
Subsidiaries, taken as a whole, in a single transaction or series of related
transactions; (iii) any tender offer or exchange offer for, or the acquisition
of (or right to acquire) "beneficial ownership" by any person, "group" or entity
(as such terms are defined under Section 13(d) of the Exchange Act), of 20% or
more of the outstanding partnership units of the Partnership or the filing of a
registration statement under the Securities Act in connection therewith; or (iv)
any public announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing or
recapitalization, liquidation, dissolution or similar transaction involving the
Partnership or any of its Subsidiaries.
(b) Prior to the Development Board or Special Committee withdrawing or
modifying its approval or recommendation of this Agreement or the Partnership
Merger, or approving or recommending a Transaction Proposal, or entering into an
agreement with respect to a Transaction Proposal, the Partnership shall provide
Acquirer with a written notice (a "NOTICE OF TRANSACTION PROPOSAL") advising
Acquirer of the Transaction Proposal, specifying the material
18
terms and conditions of such Transaction Proposal, identifying the person making
such Transaction Proposal, and specifying that the Development Board or the
Special Committee has reasonably determined that such Transaction Proposal, if
consummated, would constitute a Superior Transaction; provided, however, that
neither Development, the Partnership nor any Subsidiary shall enter into an
agreement with respect to a Superior Transaction until 72 hours after the Notice
of Transaction Proposal with respect to a given Transaction Proposal was
received by Acquirer.
For purposes of this Agreement, "SUPERIOR TRANSACTION" means a
Transaction Proposal made in writing by a Third Party (a) that provides for (i)
a Transaction Proposal that would substitute for the Merger and the Holding
Merger, and (ii) (1) the repayment (as a condition to the closing of such
transaction) by the Partnership, Holding or their designees of all sums owed by
the Partnership and its subsidiaries to Centex and its subsidiaries, including
debt, unpaid distributions and capital, (2) the release of Centex and its
subsidiaries from guarantees and other credit enhancements for the Partnership
and its subsidiaries, and (3) the termination of the Nominee Agreement on terms
acceptable to Centex in its sole and absolute discretion, and (b) the terms and
conditions of which (including the amount and value of the consideration to be
received) are reasonably determined by the Development Board or the Special
Committee to be, when taken in their entirety, more favorable to the Partnership
for the holders of the beneficial interest in the Stockholder Warrants than the
terms and conditions set forth in this Agreement (or the terms of an offer of
Acquirer, if any, made to the Partnership in response to a Notice of Transaction
Proposal).
For purposes of this Agreement, "THIRD PARTY" means a Person who is not
Centex or its subsidiaries.
SECTION 6.4 Public Announcements. Neither Acquirer nor Centex, on the
one hand, nor the Partnership, on the other hand, will issue any press release
or public statement with respect to the Partnership Merger, without the other
party's prior consent, except as may be required by applicable law, court
process or by obligations pursuant to any listing agreement with, or rule of,
NYSE or LSE and, in any event, to the extent practicable, Centex, Acquirer and
the Partnership will consult with each other before issuing, and provide each
other with the opportunity to review and comment upon, any such press release or
other public statements with respect to the Partnership Merger. The parties
agree that the initial press release or releases to be issued with respect to
the Partnership Merger shall be mutually agreed upon prior to the issuance
thereof.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE PARTNERSHIP MERGER
SECTION 7.1 Conditions to Each Party's Obligation. The respective
obligations of each party to effect the Partnership Merger are subject to the
satisfaction or waiver, at or prior to the Effective Time, of the following
conditions:
(a) A proposal to terminate the Nominee Agreement shall have received
the Centex Stockholder Approval;
(b) All conditions to the Holding Merger set forth in the Holding
Merger Agreement shall have been satisfied or waived;
19
(c) All actions by or in respect of or filings with any Governmental
Entity required to permit the consummation of the Partnership Merger shall have
been obtained, except those that would not reasonably be expected to have a
material adverse effect on any party's ability to consummate the transactions
contemplated by this Agreement; and
(d) No preliminary or permanent injunction or other order issued by any
federal or state court of competent jurisdiction in the United States
prohibiting the consummation of the Partnership Merger shall be in effect.
SECTION 7.2 Conditions to Acquirer's and Centex's Obligation. The
obligation of Acquirer and Centex to effect the Partnership Merger is subject to
the satisfaction or waiver, at or prior to the Effective Time, of the following
conditions:
(a) Acquirer shall have received the approval of Acquirer's limited
partners, Centex Homes and CREC, to this Agreement and the Partnership Merger;
(b) The representations and warranties of the Partnership contained in
this Agreement (i) shall be true and correct in all material respects at and as
of the Closing Date, as if made at and as of the Closing Date, in each case
except as contemplated or permitted by this Agreement and (ii) with respect to
any representations or warranties not qualified by "Partnership Material Adverse
Effect," unless the inaccuracies under such representations and warranties not
so qualified, taken together in their entirety, do not in the aggregate result
in a Partnership Material Adverse Effect;
(c) The Partnership shall have performed in all material respects the
obligations required to be performed by it under the Agreement at or prior to
the Closing Date;
(d) There shall have occurred or taken place no adverse change, effect,
event, occurrence or state of facts (i) affecting the financial condition,
business, assets, properties, operations or results of operations of the
Partnership or any of its Subsidiaries which is material to the Partnership and
its Subsidiaries, taken as a whole, or (ii) which would prevent or materially
impair the Partnership from consummating the Partnership Merger, which has
occurred or would reasonably be expected to occur as a result of any such
change, effect, event, occurrence or state of facts, excluding in each case (1)
changes resulting from the announcement of the transactions described in this
Agreement or the identity of Centex or Acquirer or from the performance of this
Agreement and compliance with the covenants set forth herein and (2) any actions
required under this Agreement to obtain any approval or authorization under
applicable antitrust or competition laws for the consummation of the Partnership
Merger;
(e) The holders of warrants of the Partnership shall not have any
dissenters' rights or rights of appraisal as a result of the Merger and, the
holders of the Stockholder Warrants shall be entitled to receive only the Merger
consideration; and
(f) No state takeover or similar statute or regulation in any
jurisdiction in which the Partnership or any of its Subsidiaries do business
applies or purports to apply to the Partnership Merger or this Agreement.
20
SECTION 7.3 Conditions to the Partnership's Obligation. The obligation
of the Partnership to effect the Partnership Merger is subject to the
satisfaction or waiver, at or prior to the Effective Time, of the following
conditions:
(a) The Partnership shall have received the Limited Partner Approval;
(b) The representations and warranties of Centex and Acquirer contained
in this Agreement (i) shall be true and correct in all material respects at and
as of the Closing Date, as if made at and as of the Closing Date, in each case
except as contemplated or permitted by this Agreement and (ii) with respect to
any representations or warranties not qualified by "Centex Material Adverse
Effect," unless the inaccuracies under such representations and warranties not
so qualified, taken together in their entirety, do not in the aggregate result
in a Centex Material Adverse Effect;
(c) Centex and Acquirer shall have each performed in all material
respects the obligations required to be performed by it under the Agreement at
or prior to the Closing Date;
(d) Centex shall provide to the directors of Development
indemnification contracts executed by Centex containing indemnification
provisions substantially the same as those set forth in Section 6.2(a); and
(e) The Fairness Opinion shall not have been withdrawn or adversely
modified by the Financial Advisor.
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
SECTION 8.1 Termination. This Agreement may be terminated and the
Partnership Merger contemplated hereby may be abandoned at any time
notwithstanding approval thereof by the limited partners of the Partnership, but
prior to the Effective Time:
(a) by mutual written consent of each of Acquirer and the Partnership;
or
(b) by either Acquirer or the Partnership,
(i) if any court of competent jurisdiction in the United
States or other United States or State governmental body shall have
issued an order, decree or ruling or taken any other action
restraining, or otherwise prohibiting the Partnership Merger and such
order, decree, ruling or other action shall have become final and
non-appealable; or
(ii) if the Partnership Merger shall not have occurred by
March 31, 2004, unless the failure to consummate the Partnership Merger
is the result of a material breach or failure to perform in any
material respect of any covenant or other agreement contained in this
Agreement by the party purporting to terminate this Agreement; or
(c) by the Partnership,
(i) substantially concurrently with its approval of a
Transaction Proposal; provided that the Partnership has complied with
all provisions of this Agreement,
21
including the notice provisions herein, and that it pays the Expenses
as provided by and defined in Section 9.10 hereof; or
(ii) in the event of a material breach or failure to
perform in any material respect by Centex or Acquirer of any covenant
or other agreement contained in this Agreement or in the event of a
material breach of any representation or warranty of Centex or Acquirer
in each case which cannot be or has not been cured within 15 days after
the giving of written notice to Centex or Acquirer, and, with respect
to any representations or warranties not qualified by "Centex Material
Adverse Effect," unless the inaccuracies under such representations and
warranties not so qualified, taken as a whole in their entirety, do not
in the aggregate result in a Centex Material Adverse Effect; or
(d) by Acquirer,
(i) if the Partnership (1) enters into a definitive
agreement or agreement in principle with any Person with respect to a
Transaction Proposal or (2) withdraws or adversely modifies its
approval of or recommendation of the Partnership Merger following the
public announcement of a Transaction Proposal; or
(ii) in the event of a material breach or failure to
perform in any material respect by the Partnership of any covenant or
other agreement contained in this Agreement or in the event of a
material breach of any representation or warranty of the Partnership in
each case which cannot be or has not been cured within 15 days after
the giving of written notice to the Partnership, and, with respect to
any representations or warranties not qualified by "Partnership
Material Adverse Effect," unless the inaccuracies under such
representations and warranties not so qualified, taken as a whole in
their entirety, do not in the aggregate result in a Partnership
Material Adverse Effect.
SECTION 8.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 8.1, this Agreement shall be
void and have no effect (except pursuant to Section 6.3, which shall survive
such termination), with no liability on the part of any party hereto or its
affiliates, directors, officers, stockholders or partners.
SECTION 8.3 Amendment. Any provision of this Agreement may be amended
or waived prior to the Effective Time (whether before or after approval of
matters presented in connection with the Partnership Merger by the limited
partners of the Partnership) if, and only if, such amendment or waiver is in
writing and signed, in the case of an amendment, by the Partnership, Centex and
Acquirer or, in the case of a waiver, by the party against whom such waiver is
to be effective; provided that after the adoption of this Agreement by the
limited partners of the Partnership, no amendment shall become effective without
a vote of the limited partners approving such amendment if such limited partner
vote is required by applicable law in order to effect the proposed amendment.
SECTION 8.4 Extension; Waiver. At any time prior to the Effective Time,
the parties may (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document, certificate or writing delivered pursuant hereto or (iii) waive
compliance with any of the agreements or conditions contained herein, except as
otherwise provided by law
22
and except that the provisions of Section 6.2 hereof shall not be waived. Any
agreement on the part of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing on behalf of such party, and
if such extension or waiver has been approved by a majority of the members of
the Special Committee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Nonsurvival of Representations, Warranties and Agreements.
(a) None of the representations, warranties and agreements made herein
shall survive beyond the Effective Time, except for the agreements set forth in
Sections 3.2 and 6.2, and all such representations, warranties and agreements
will be extinguished upon consummation of the Partnership Merger and none of the
Partnership, Centex and Acquirer, nor any officer, director or employee or
stockholder thereof shall be under any liability whatsoever with respect to any
such representation, warranty or agreement after such time.
(b) Each of the parties is a sophisticated person or legal entity that
was advised by knowledgeable counsel and, to the extent it deemed necessary,
other advisors in connection with this Agreement. Accordingly, each of the
parties hereby acknowledges that (i) no party has relied or will rely upon any
document or written or oral information previously furnished to or discovered by
it or its representatives, other than this Agreement and (ii) there are no
representations or warranties by or on behalf of any party hereto or any of its
respective affiliates or representatives other than those expressly set forth
herein, which representations and warranties shall not survive the Effective
Time.
SECTION 9.2 Entire Agreement; Assignment. This Agreement and the
agreements specifically contemplated hereby or referenced herein (a) constitute
the entire agreement between the parties with respect to the subject matter
hereof and thereof and supersede all other prior agreements and understandings,
both written and oral, between the parties or any of them with respect to the
subject matter hereof and (b) shall not be assigned by operation of law or
otherwise; provided that Acquirer may assign its rights and obligations to any
wholly owned, direct or indirect subsidiary of Centex, but no such assignment
shall relieve Acquirer of its obligations hereunder if such assignee does not
perform such obligations. Except as expressly provided in this Agreement,
nothing contained in this Agreement, express or implied, is intended to amend,
modify, revise, supplement, terminate, supersede, cancel, or waive any provision
of, any contract or agreement between or among any of the parties to this
Agreement, including, without limitation, the Nominee Agreement (as amended by
the contemplated amendment thereto).
SECTION 9.3 Validity. The validity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
SECTION 9.4 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by cable, telegram or telex, or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses or at such other addresses as
shall be specified by the parties by like notice.
23
If to Centex or Acquirer:
c/o Centex Corporation
0000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Attention: Chief Executive Officer
with a copy to (such copy not to constitute notice):
Xxxxxxxx & Knight LLP
0000 Xxxxxxx Xxx., Xxxxx 0000
Xxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx III
If to the Partnership:
Centex Development Company, L.P.
c/o 3333 Development Corporation
0000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Attention: President
with a copy to:
The Special Committee of the Board of Directors
x/x Xxxxx Xxxx
0000 Development Corporation
0000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
with a copy to (such copy not to constitute notice):
Akin Gump Xxxxxxx Xxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, P.C.
SECTION 9.5 Defined Terms. The following terms have the meanings
assigned to them in the provisions of this Agreement referred to in the table
below:
Term Section
---- -------
Acquirer Preamble
Acquisition Corp. Recitals
24
Act Recitals
Agreement Preamble
Centex Preamble
Centex Common Stock Recitals
Centex Homes Preamble
Centex Material Adverse Effect Section 5.3
Centex Required Governmental Consents Section 5.3
Centex Stockholder Approval Section 1.8(c)
Centex Warrants Section 1.9
Certificate of Merger Section 1.3
Closing Section 1.2
Closing Date Section 1.2
Constituent Partnerships Section 1.1
Costs Section 6.2(a)
CREC Recitals
Development Preamble
Development Board Section 1.11
Effective Time Section 1.3
Environmental Laws Section 4.12(a)
Exchange Act Section 4.3
Expenses Section 9.10(a)
Fairness Opinion Recitals
Financial Advisor Recitals
GAAP Section 4.7
General Partner Approval Section 4.15
Governmental Entity Section 4.3
GP Units Recitals
Holding Recitals
Holding Merger Recitals
Holding Merger Agreement Recitals
Indemnified Parties Section 6.2(a)
Knowledge Section 1.7
Lien Section 4.4
Limited Partner Approval Section 4.15
LP Units Recitals
LSE Section 4.3
Merger Consideration Section 1.8(d)
Nominee Recitals
Nominee Agreement Section 1.8(c)
Notice of Transaction Proposal Section 6.3(b)
NYSE Section 4.3
Orders Section 4.10
Partnership Preamble
Partnership Material Adverse Effect Section 4.1
Partnership Properties Section 4.14(a)
Partnership Required Governmental Consents Section 4.3
Partnership Merger Recitals
25
Past SEC Documents Section 4.7
Paying Agent Section 3.2(a)
Person Section 6.3(a)
Proceedings Section 4.10
Property Restrictions Section 4.14(a)
Responsible Parties Section 6.3(a)
SEC Section 4.7
Secretary Section 1.3
Securities Act Section 4.3
Special Committee Recitals
Stockholder Warrants Recitals
Subsidiary Section 1.7
Superior Transaction Section 6.3(b)
Surviving Partnership Section 1.1
Third Party Section 6.3(b)
Transaction Schedule 1
Transaction Proposal Section 6.3(a)
SECTION 9.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of Delaware, regardless of the
laws that might otherwise govern under applicable principles of conflict of laws
thereof.
SECTION 9.7 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
SECTION 9.8 Parties in Interest. This Agreement shall be binding upon,
and inure solely to the benefit of, each party hereto, and nothing contained in
this Agreement, express or implied, is intended to create any duties or
obligations to any Person (other than a party hereto) not in existence on the
date hereof, including any fiduciary duty, or to confer upon any other Person
(other than a party hereto) any rights, benefits or remedies of any nature
whatsoever under or by reason of this Agreement, except as expressly provided in
Sections 3.2 and 6.2 (which are intended to be for the benefit of the persons
referred to therein and may be enforced by such persons). The Indemnified
Parties, which include Development's officers and directors, are intended to be
third party beneficiaries of the provisions of Section 6.2 relating to
indemnification and insurance.
SECTION 9.9 Counterparts. This Agreement may be executed by facsimile
in two or more counterparts, each of which shall be deemed to be an original,
but all of which shall constitute one and the same agreement.
SECTION 9.10 Expenses.
(a) If any person (other than Acquirer or any of its affiliates)
shall have made, proposed, communicated or disclosed a Transaction Proposal in a
manner which is or otherwise becomes public and this Agreement is terminated
pursuant to Section 8.1(c)(i), then the Partnership shall, simultaneously with
such termination of this Agreement, pay Purchaser in
26
same day funds all reasonable documented out-of-pocket costs, fees and expenses
of Centex and Acquirer incurred on or after April 1, 2003, related to the
Partnership Merger, this Agreement, and the transactions contemplated hereby and
thereby (including, without limitation, printing fees, filing fees and
reasonable fees and expenses of legal and financial advisors) (collectively the
"EXPENSES"). Further, if this Agreement is terminated pursuant to Section
8.1(d)(i) or (ii), then the Partnership shall, simultaneously with such
termination of this Agreement, pay Acquirer in same day funds the Expenses.
Notwithstanding the foregoing, in no event shall the Expenses paid pursuant to
this Section 9.10 exceed $50,000.
(b) The Partnership agrees that the agreements contained in
Section 9.10(a) above are an integral part of the transactions contemplated by
this Agreement and constitute liquidated damages and not a penalty. If the
Partnership fails to promptly pay to Acquirer any of the amounts due under
Section 9.10(a), the Partnership shall pay the reasonable costs and expenses
(including reasonable legal fees and expenses) in connection with any action,
including the filing of any lawsuit or other legal action, taken to collect
payment thereof, together with interest on the amount of any unpaid Expenses at
the annual rate of four percent above the publicly announced prime rate of Bank
of America, N.A. (or, if lower, the maximum rate permitted by law) from the date
such Expenses were required to be paid by the Partnership to the date of
payment.
(c) Except as provided otherwise in paragraphs (a) and (b) above,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses, except that the Acquirer shall pay all costs and expenses of obtaining
any consents of any third party.
SECTION 9.11 Specific Performance. The parties hereto agree that if for
any reason any party hereto shall have failed to perform its obligations under
this Agreement, then any other party hereto seeking to enforce this Agreement
against such non-performing party shall be entitled to specific performance and
injunctive and other equitable relief, and the parties hereto further agree to
waive any requirement for the securing or posting of any bond in connection with
the obtaining of any such injunctive or other equitable relief. This provision
is without prejudice to any other rights that any party hereto may have against
any other party hereto for any failure to perform its obligations under this
Agreement.
[signatures appear on following page.]
27
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
day and year first above written.
CENTEX DEVELOPMENT COMPANY, L.P.
By: 3333 DEVELOPMENT CORPORATION,
its general partner
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
3333 DEVELOPMENT CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
CENTEX CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President, Chief Legal
Officer and Secretary
CENTEX DEVELOPMENT ACQUISITION, L.P.
By: CENTEX HOMES, its general partner
By: CENTEX REAL ESTATE CORPORATION,
its managing general partner
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and Secretary
28
CENTEX HOMES
By: CENTEX REAL ESTATE CORPORATION,
its managing general partner
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and Secretary
29
SCHEDULE 1
As used in this Agreement, the term "TRANSACTION" shall mean a series of
transactions that will result in the elimination of the arrangement by which the
beneficial interests in the Holding common stock and in the Stockholder Warrants
trade in tandem with the common stock of Centex, including:
(a) the Holding Merger; which is a merger of 3333 Acquisition
Corp., a new wholly-owned subsidiary of Centex, with and into
Holding, with Holding being the surviving entity and
indirectly wholly-owned by Centex. Pursuant to the Holding
Merger, the Holding common stock will be cancelled, with the
payment to the holders of the beneficial interest in Holding
common stock of an amount that is equal to $.01 per share
of Centex common stock;
(b) the Partnership Merger; and
(c) the amendment and termination of the Nominee Agreement between
Centex, Holding, the Partnership and Mellon Investor Services
LLC, as successor nominee and transfer agent.
30
