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EXHIBIT (d)(1)
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
DATED AS OF OCTOBER 12, 2000
AMONG
TECHNICAL OLYMPIC USA, INC.
A DELAWARE CORPORATION,
HELIOS ACQUISITION CORP.
A FLORIDA CORPORATION,
AND
XXXXX HOMES, INC.
A FLORIDA CORPORATION
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TABLE OF CONTENTS
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ARTICLE I. THE TENDER OFFER......................................................................................2
1.1 The Offer...............................................................................................2
1.2 SEC Filings.............................................................................................3
1.3 Company Action..........................................................................................5
1.4 Composition of the Company Board........................................................................5
ARTICLE II. THE MERGER...........................................................................................7
2.1 The Merger..............................................................................................7
2.2 Closing.................................................................................................7
2.3 Effective Time..........................................................................................7
2.4 Effect of the Merger....................................................................................7
2.5 Articles of Incorporation...............................................................................7
2.6 Bylaws..................................................................................................7
2.7 Officers and Directors of Surviving Corporation.........................................................7
2.8 Effect on Capital Stock.................................................................................8
2.9 Surrender and Payment...................................................................................8
ARTICLE III. REPRESENTATIONS AND WARRANTIES.....................................................................11
3.1 Representations and Warranties of the Company..........................................................11
3.2 Representations and Warranties of Parent and Acquisition...............................................18
ARTICLE IV. ACTIONS PRIOR TO THE MERGER..........................................................................19
4.1 Covenants Relating to Conduct of Business of the Company...............................................19
4.2 HSR Act Filings........................................................................................21
4.3 Approval by the Company's Shareholders.................................................................21
4.4 No Solicitation of Offers; Notice of Proposals from Others.............................................22
4.5 Takeover Statutes......................................................................................23
4.6 Third Party Standstill Agreements......................................................................24
4.7 Stock Options..........................................................................................24
4.8 Financing Covenants of Parent and Acquisition..........................................................24
4.9 Maintenance of Parent Funds............................................................................24
ARTICLE V. CONDITIONS PRECEDENT.................................................................................24
5.1 Conditions to Each Party's Obligation to Effect the Merger.............................................24
ARTICLE VI. TERMINATION.........................................................................................25
6.1 Termination............................................................................................25
6.2 Manner of Terminating Agreement........................................................................28
6.3 Effect of Termination..................................................................................28
ARTICLE VII. ABSENCE OF BROKERS.................................................................................29
7.1 Representations and Warranties Regarding Brokers and Others............................................29
ARTICLE VIII. OTHER AGREEMENTS..................................................................................29
8.1 Other Actions; Filings; Consents.......................................................................29
8.2 Notification of Certain Matters........................................................................30
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ARTICLE IX. GENERAL.............................................................................................30
9.1 Expenses...............................................................................................30
9.2 Directors' and Officers' Insurance and Indemnification.................................................30
9.3 Third Party Beneficiaries..............................................................................31
9.4 Access to Properties, Books and Records................................................................31
9.5 Press Releases.........................................................................................31
9.6 Entire Agreement.......................................................................................32
9.7 Captions...............................................................................................32
9.8 Prohibition Against Assignment.........................................................................32
9.9 Definitions............................................................................................32
9.10 Notices and Other Communications.......................................................................33
9.11 Governing Law..........................................................................................34
9.12 Amendments.............................................................................................34
9.13 Counterparts...........................................................................................34
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This AGREEMENT AND PLAN OF MERGER, dated as of October 12, 2000 (this
"Agreement"), by and among TECHNICAL OLYMPIC USA, INC., a Delaware corporation
("Parent"), HELIOS ACQUISITION CORP., a Florida corporation and a wholly owned
Subsidiary of Parent ("Acquisition"), and XXXXX HOMES, INC., a Florida
corporation (the "Company").
WITNESSETH:
WHEREAS, the respective Boards of Directors of Parent, Acquisition and
the Company have each approved the Offer (as defined herein) and the Merger (as
defined herein) and have determined that it is in the best interests of their
respective companies and shareholders for Parent to acquire the Company upon the
terms and subject to the conditions set forth herein;
WHEREAS, in order to complete such acquisition, the respective Boards
of Directors of Parent, Acquisition and the Company have approved the merger of
Acquisition with and into the Company (the "Merger"), upon the terms and subject
to the conditions of this Agreement and in accordance with the Florida Business
Corporation Act (the "FBCA"), whereby each issued and outstanding share of
Company Common Stock (as defined herein) not owned directly or indirectly by
Parent or the Company will be converted into the right to receive the price per
share in cash actually paid in the Offer;
WHEREAS, the Board of Directors of the Company (the "Company Board")
has unanimously approved this Agreement, the Shareholders Agreement (as defined
below), the Offer and the Merger, has determined that the Offer and the Merger
are fair to, and in the best interests of, the Company's shareholders, and is
recommending that the Company's shareholders accept the Offer, tender their
shares of Company Common Stock thereunder and adopt and approve the Merger and
this Agreement;
WHEREAS, Parent, Acquisition and the shareholders of the Company named
therein have entered into a Stock Voting and Tender Agreement dated as of the
date hereof (the "Shareholders Agreement");
WHEREAS, simultaneously with the execution and delivery of this
Agreement, certain corporate officers and certain key employees of the Company
are entering into employment agreements (the "Employment Agreements") with the
Company, which have been approved by a committee of independent and
disinterested members of the Company Board and which will become effective
immediately preceding the consummation of the Offer;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, the parties hereto agree as follows:
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ARTICLE I.
THE TENDER OFFER
1.1 THE OFFER.
(a) Provided that this Agreement shall not have been
terminated in accordance with Article VI hereof and none of the conditions set
forth in Annex A hereto (the "Offer Conditions") shall have occurred or be
existing, within six Business Days of the date hereof, Acquisition will, and
Parent will cause Acquisition to, commence a tender offer (the "Offer") for all
of the outstanding shares of common stock, par value $0.01 per share, of the
Company (the "Company Common Stock") at a price per share of the Company Common
Stock of U.S. $19.10 net to the seller in cash (such price, or any higher price
paid in the Offer, the "Price Per Share") upon the terms and conditions set
forth in this Agreement, including Annex A hereto.
(b) Provided that this Agreement shall not have been
terminated in accordance with Article VI hereof, the obligation of Acquisition
to, and Parent to cause Acquisition to, accept for payment, purchase and pay for
any Company Common Stock tendered pursuant to the Offer shall be subject only to
the satisfaction or waiver of the Offer Conditions including the condition that
at least that number of shares of Company Common Stock equivalent to a majority
of the total issued and outstanding shares of Company Common Stock on a fully
diluted basis on the date such shares are purchased pursuant to the Offer shall
have been validly tendered and not withdrawn prior to the expiration of the
Offer (the "Minimum Condition"); provided that for the purpose of determining
whether the Minimum Condition has been met, any shares of Company Common Stock
that have been acquired by Parent pursuant to the option granted to Parent in
the Shareholders Agreement shall be deemed to have been validly tendered and not
withdrawn prior to the expiration of the Offer. The Company agrees that no
shares of Company Common Stock held by the Company or any of its Subsidiaries
will be tendered to Acquisition pursuant to the Offer. Acquisition expressly
reserves the right, in its sole discretion, to waive any of the Offer Conditions
(other than the Minimum Condition), to increase the consideration payable in the
Offer and to make any other changes in the terms of the Offer; provided,
however, that Acquisition will not, and Parent will cause Acquisition not to,
without the prior written consent of the Company (such consent to be authorized
by the Company Board): (i) waive the Minimum Condition, (ii) decrease the amount
or change the form of consideration payable in the Offer, (iii) decrease the
number of shares of Company Common Stock sought in the Offer, (iv) impose
additional conditions to the Offer, (v) change any Offer Condition, (vi) amend
any other term of the Offer in any manner materially adverse to the holders of
Company Common Stock (other than Parent or Acquisition) or (vii) except as
provided below, extend the Offer. Subject to the terms and conditions hereof,
the Offer shall remain open until midnight, New York City time, on the date that
is twenty Business Days after the Offer is commenced (within the meaning of Rule
14d-2 promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")); provided, however, that without the consent of the Company
Board, Acquisition may (x) extend the Offer, if at the scheduled expiration date
of the Offer any of the Offer Conditions shall not have been satisfied or
waived, for one or more periods (each such period shall not exceed ten Business
Days) until such time as such conditions are satisfied or waived, (y) extend the
Offer for such period as may be required by any rule, regulation, interpretation
or position of the Securities and Exchange Commission ("SEC") or the staff
thereof applicable to the Offer, or (z) extend the Offer for an aggregate period
of not more than ten Business Days beyond the latest
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expiration date that would otherwise be permitted under clause (x) or (y) of
this sentence if on such expiration date the Offer Conditions shall have been
satisfied or waived but there shall not have been tendered and not withdrawn
that number of shares of Company Common Stock which would equal 80% or more of
the then outstanding shares of Company Common Stock on a fully diluted basis
(exclusive of unexercised options subject to an agreement of the type
contemplated in clause (iii) of Section 4.7) and Parent and Acquisition
irrevocably expressly waive any condition (other than the Minimum Condition)
that subsequently may not be satisfied during such extension of the Offer
pursuant to this clause (z). Acquisition agrees that (i) if all of the Offer
Conditions are not satisfied on any scheduled expiration date of the Offer, then
Acquisition shall, and Parent shall cause Acquisition to, extend the Offer for a
period of not more than ten Business Days if requested to do so by the Company
(provided that the Company shall be entitled to make only one such request) and
(ii) if on the scheduled expiration date all of the Offer Conditions have been
satisfied except for the condition set forth in clause (iii) of paragraph (c) of
Annex A and less than 10 Business Days have passed since Parent gave the written
notice contemplated by such clause, then Acquisition shall, and Parent shall
cause Acquisition to, extend the Offer until the date that is 10 Business Days
after such notice if requested to do so by the Company (provided that the
Company shall be entitled to make only one such request); provided that
Acquisition shall not, pursuant to this or the preceding sentence, extend the
Offer beyond the Outside Date (as defined below) or, if earlier, the date of
termination of this Agreement in accordance with the terms hereof. On the terms
of the Offer and subject to the Offer Conditions and this Agreement, Acquisition
shall, and Parent shall cause Acquisition to, pay for all shares of Company
Common Stock validly tendered and not withdrawn pursuant to the Offer that
Acquisition becomes obligated to purchase pursuant to the Offer as soon as
practicable after the expiration of the Offer. Acquisition may, at its election,
provide for a "subsequent offering period" for Company Common Stock (as
contemplated by and in accordance with Rule 14d-11 promulgated under the
Exchange Act).
1.2 SEC FILINGS.
(a) As soon as reasonably practicable on the date of
commencement of the Offer, Acquisition shall, and Parent shall cause Acquisition
to, file with the SEC a Tender Offer Statement on Schedule TO with respect to
the Offer (as supplemented or amended from time to time, the "Schedule TO") to
provide for the purchase of the issued and outstanding shares of Company Common
Stock in accordance with the terms hereof. Parent and Acquisition agree, as to
the Schedule TO, the Offer to Purchase and related Letter of Transmittal (which
documents, as supplemented or amended from time to time, together constitute the
"Offer Documents") will comply as to form and content in all material respects
with the applicable provisions of the federal securities laws and the Offer
Documents, on the date first published, sent or given to the Company's
shareholders, shall not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation is made by Parent or
Acquisition with respect to any information supplied by the Company or its
officers, directors or affiliates in writing for inclusion in the Offer
Documents or any amendment or supplement thereto. The Company and its counsel
shall be given a reasonable opportunity to review and comment upon the Offer
Documents and any amendment or supplement thereto prior to the filing thereof
with the SEC, and Parent and Acquisition shall consider such comments in good
faith. Parent and Acquisition agree to provide to the Company
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and its counsel any comments which Parent, Acquisition or their counsel may
receive from the staff of the SEC promptly after receipt thereof, and any
proposed responses thereto, with respect to the Offer Documents and any
amendment or supplement thereto. Parent, Acquisition and the Company agree to
promptly provide corrections to any information provided by any of them for use
in the Offer Documents (to the party responsible for filing such documents)
which shall have become false or misleading in any material respect, and Parent
and Acquisition further agree to take all steps necessary to cause the Schedule
TO as so corrected to be filed with the SEC and to disseminate any revised Offer
Documents to the Company's shareholders, in each case as and to the extent
required by the applicable provisions of the federal securities laws.
(b) The Company Board shall recommend acceptance of the
Offer to its shareholders in a Solicitation/Recommendation Statement on Schedule
14D-9 (as supplemented or amended from time to time, the "Schedule 14D-9"),
which the Company shall file with the SEC as soon as reasonably practicable on
the date of commencement of the Offer and which will comply as to form and
content in all material respects with the applicable provisions of the federal
securities laws and, on the date filed with the SEC and on the date first
published, sent or given to the Company's shareholders, shall not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
that no representation is made by the Company with respect to any information
supplied by Parent or Acquisition or either of its officers, directors or
affiliates in writing for inclusion in the Schedule 14D-9 or any amendment or
supplement thereto; provided, however, that the Company Board may amend, modify
or withdraw its recommendation, or make no recommendation, if the Company Board
determines, following consultation with the Company's outside legal counsel,
that such action is required in order to comply with applicable law. The Company
will cooperate with Parent and Acquisition in mailing or otherwise disseminating
the Schedule 14D-9 with the appropriate Offer Documents to the shareholders of
the Company. Parent and its counsel shall be given a reasonable opportunity to
review and comment upon the Schedule 14D-9 and any amendment or supplement
thereto prior to the filing thereof with the SEC, and the Company shall consider
any such comments in good faith. The Company agrees to provide to Parent and
Acquisition and their counsel any comments which the Company or its counsel may
receive from the staff of the SEC promptly after receipt thereof, and any
proposed responses thereto, with respect to the Schedule 14D-9 and any amendment
or supplement thereto. The Company, Parent and Acquisition agree to correct
promptly any information provided by any of them for use in the Schedule 14D-9
which shall have become false or misleading in any material respect, and the
Company further agrees to take all steps necessary to cause such Schedule 14D-9
as so corrected to be filed with the SEC and disseminated to the Company's
shareholders, in each case as and to the extent required by the applicable
provisions of the federal securities laws. Parent, Acquisition and the Company
each hereby agree to provide promptly such information necessary to the
preparation of the exhibits and schedules to the Schedule 14D-9 and the Offer
Documents which the respective party responsible therefor shall reasonably
request. The Company hereby consents to the inclusion in the Offer Documents of
the recommendations and approvals referred to in this Section 1.2.
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1.3 COMPANY ACTION.
(a) The Company hereby represents and warrants to Parent
and Acquisition that, the Company Board (at a meeting duly called and held) has
unanimously (i) determined that each of this Agreement, the Offer and the Merger
is fair to, and in the best interests of, the Company and the holders of Company
Common Stock; (ii) approved this Agreement, the Offer, the Merger and the
Shareholders Agreement, and the transactions contemplated hereby, in accordance
with the provisions of the FBCA; and (iii) recommended the acceptance of the
Offer, the tender of the Company Common Stock in the Offer and the approval and
adoption of this Agreement and the Merger by the shareholders of the Company.
Such approval by the Company Board constitutes adoption and approval of this
Agreement, the Offer, the Merger and the Shareholders Agreement for purposes of
Sections 607.0901 and 607.0902 of the FBCA.
(b) In connection with the Offer, the Company shall, not
later than two Business Days after the date of this Agreement, cause its
transfer agent to furnish Acquisition promptly with such information (including,
to the extent the Company possesses or controls such information, a list of the
record holders of the Company Common Stock and their addresses, as well as
mailing labels containing the names and addresses of all record holders of
Company Common Stock, lists of non-objecting beneficial owners of Company Common
Stock and lists of security positions of Company Common Stock held in stock
depositories, in each case as of the most recent practicable date), and shall
thereafter render such assistance as Parent, Acquisition or their agents may
reasonably request in communicating the Offer to the record and beneficial
holders of Company Common Stock. Subject to the requirements of applicable law
and except for such steps as are necessary to disseminate the Offer Documents
and any other documents necessary to consummate the Offer and the Merger, Parent
and Acquisition shall (i) hold in confidence the information contained in any of
such labels and lists; (ii) use such information only in connection with the
Offer and the Merger; and (iii) if this Agreement is terminated, shall, upon
request, deliver to the Company or destroy all copies of such information then
in their possession.
1.4 COMPOSITION OF THE COMPANY BOARD.
(a) Promptly upon the acceptance for payment of, and
payment by Acquisition in accordance with the Offer for, not less than a
majority of the outstanding shares of Company Common Stock pursuant to the
Offer, Parent and Acquisition shall be entitled to designate such number of
members of the Company Board, rounded up to the next whole number, equal to that
number of directors which equals the product of the total number of directors on
the Company Board (giving effect to the directors elected pursuant to this
sentence) multiplied by the percentage that such number of shares of Company
Common Stock owned in the aggregate by Acquisition and/or Parent, upon such
acceptance for payment, bears to the number of shares of Company Common Stock
outstanding. Upon the written request of Parent or Acquisition and in the manner
as directed in such request, the Company shall, on the date of such request, (i)
either increase the size of the Company Board or use its reasonable best efforts
to secure the resignations of such number of its incumbent directors, or both,
as is necessary to enable Parent's and Acquisition's designees to be so elected
or appointed to the Company Board (including by nomination and approval by the
current Company Board) and (ii) cause Parent's and Acquisition's designees to be
so elected or appointed, in each case as may be necessary to
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comply with the foregoing provisions of this Section 1.4(a). At such time, the
Company shall, if requested by Parent, also cause directors designated by Parent
and Acquisition to constitute at least the same percentage (rounded up to the
next whole number) as is on the Company Board of each committee of the Company
Board. The provisions of this Section 1.4(a) are in addition to and shall not
limit any rights which Parent or Acquisition may have as a holder or beneficial
owner of Company Common Stock as a matter of applicable law with respect to the
election of directors or otherwise.
(b) The Company's obligation to cause designees of Parent
and Acquisition to be elected or appointed to the Company Board shall be subject
to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. The
Company shall promptly take all actions required pursuant to Section 14(f) and
Rule 14f-1 in order to fulfill its obligations under this Section 1.4, and shall
include in the Schedule 14D-9 such information with respect to Parent or
Acquisition and their designees as is required under Section 14(f) and Rule
14f-1; provided, however, Parent and Acquisition will supply to the Company in
writing and be solely responsible for any information with respect to any of
them and their designees, officers, directors and affiliates required by Section
14(f) and Rule 14f-1 and any other applicable rules and regulations.
(c) After the time that Parent's and Acquisition's
designees constitute at least a majority of the Company Board and until the
Effective Time, the Company Board shall always have at least two members (the
"Independent Directors") who are neither officers of Parent or Acquisition nor
designees, shareholders or affiliates of Parent or Acquisition or Parent's
affiliates; provided that the Company shall continue to comply with The Nasdaq
Stock Market requirements with respect to independent directors. During such
period, any (i) amendment or termination of this Agreement by the Company, (ii)
extension of time for the performance, or waiver, of the obligations or other
acts of Parent or Acquisition or (iii) waiver of the Company's rights hereunder,
shall require the approval of a majority of the Independent Directors in
addition to any required approval thereof by the full Company Board. If the
number of Independent Directors shall be reduced below two for any reason
whatsoever, the remaining Independent Director shall be entitled to designate a
person to fill the vacancy, which designee shall not be a current or former
officer or affiliate of Parent or Acquisition or any of Parent's affiliates, or,
if no Independent Directors then remain, the other directors shall designate two
persons to fill such vacancies who shall not be current or former officers or
affiliates of Parent or Acquisition or any of Parent's affiliates, and such
persons shall be deemed to be Independent Directors for purposes of this
Agreement. The Company Board shall not delegate any matter set forth in this
Section 1.4(c) to any committee of the Company Board.
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ARTICLE II.
THE MERGER
2.1 THE MERGER. Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the FBCA, Acquisition shall be merged
with and into the Company at the Effective Time. Following the Merger, the
separate corporate existence of Acquisition shall cease, and the Company shall
continue as the surviving corporation (the "Surviving Corporation") in
accordance with the FBCA.
2.2 CLOSING. The closing of the Merger (the "Closing") will take place
as soon as practicable (but not later than the third Business Day) after
satisfaction or waiver (as permitted by this Agreement and applicable law) of
the conditions (excluding conditions that, by their terms, cannot be satisfied
until the Closing Date) set forth in Article V hereof (the "Closing Date"),
unless another time or date is agreed to in writing by the parties hereto. The
Closing shall be held at the offices of Xxxxxx & Xxxxxx L.L.P. located at 2300
First City Tower, 0000 Xxxxxx, Xxxxxxx, Xxxxx 00000, unless another place is
agreed to in writing by the parties hereto.
2.3 EFFECTIVE TIME. Upon the Closing, the parties shall file with the
Department of State of the State of Florida articles of merger (the "Articles of
Merger") executed in accordance with the relevant provisions of the FBCA and
shall make all other filings, recordings or publications required under the FBCA
or applicable law in connection with the Merger. The Merger shall become
effective at such time as the Articles of Merger are duly filed with the
Department of State of the State of Florida, or at such other time as the
parties may agree and specify in the Articles of Merger (the time the Merger
becomes effective being the "Effective Time").
2.4 EFFECT OF THE MERGER. At and after the Effective Time, the Merger
will have the effects specified in the FBCA.
2.5 ARTICLES OF INCORPORATION. At the Effective Time and without any
further action on the part of the Company and Acquisition, the articles of
incorporation of the Company shall be amended to read in their entirety as the
articles of incorporation of Acquisition in effect immediately prior to the
Effective Time until thereafter changed or amended as provided therein or by
applicable law, provided that such articles of incorporation shall be further
amended to reflect Xxxxx Homes, Inc. as the name of the Surviving Corporation.
2.6 BYLAWS. The bylaws of Acquisition as in effect immediately prior to
the Effective Time shall be the bylaws of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law; provided
that references in the By-Laws to the Surviving Corporation shall be to Xxxxx
Homes, Inc.
2.7 OFFICERS AND DIRECTORS OF SURVIVING CORPORATION. The officers and
directors of Acquisition and/or any individuals designated by Acquisition
immediately prior to the Effective Time shall be the initial officers and
directors, respectively, of the Surviving Corporation, until the earlier of
their resignation or removal or otherwise ceasing to be an officer or director,
as the case may be, or until their respective successors are duly elected and
qualified.
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2.8 EFFECT ON CAPITAL STOCK. As of the Effective Time, by virtue of the
Merger and without any action on the part of Parent, Acquisition, the Company or
any holder of any shares of Company Common Stock or any shares of capital stock
of Acquisition:
(a) CAPITAL STOCK OF ACQUISITION. Each issued and
outstanding share of capital stock of Acquisition shall be converted into and
become one fully paid and nonassessable share of common stock, par value $0.01
per share, of the Surviving Corporation.
(b) CANCELLATION OF TREASURY STOCK AND PARENT-OWNED
STOCK. Each share of Company Common Stock that is owned by the Company or any
direct or indirect wholly-owned Subsidiary of the Company and each share of
Company Common Stock that is owned by Parent or Acquisition shall automatically
be canceled and shall cease to exist, and no Merger Consideration shall be
delivered in exchange therefor.
(c) CONVERSION OF COMPANY COMMON STOCK. Subject to
Section 2.9(h), at the Effective Time each issued and outstanding share of
Company Common Stock (other than shares to be canceled in accordance with
Section 2.8(b)) shall be converted into the right to receive the Price Per Share
in cash, without interest (the "Merger Consideration"). As of the Effective
Time, all such shares of Company Common Stock shall no longer be outstanding and
shall automatically be canceled and shall cease to exist, and, subject to
Section 2.9(h), each holder of a certificate representing any such shares of
Company Common Stock shall cease to have any rights with respect thereto, except
the right to receive the Merger Consideration upon surrender of such certificate
in accordance with Section 2.9.
2.9 SURRENDER AND PAYMENT.
(a) EXCHANGE AGENT. Prior to the Effective Time, Parent
shall designate a bank or trust company reasonably acceptable to the Company to
act as agent for the holders of shares of Company Common Stock in connection
with the Merger (the "Exchange Agent") to receive the Merger Consideration to
which holders of shares of Company Common Stock shall become entitled pursuant
to Section 2.8. Prior to the filing of the Articles of Merger with the
Department of State of the State of Florida, Parent shall, or shall cause
Acquisition to, deposit with the Exchange Agent cash in an aggregate amount
equal to the product of (i) the number of shares of Company Common Stock
outstanding (and not to be canceled pursuant to Section 2.8(b)) immediately
prior to the Effective Time, multiplied by (ii) the Merger Consideration (the
"Payment Fund"). The Exchange Agent shall cause the Payment Fund to be (A) held
for the benefit of the holders of Company Common Stock and (B) promptly applied
to making the payments provided for in Section 2.8(c). The Payment Fund shall
not be used for any purpose that is not provided for herein.
(b) EXCHANGE PROCEDURES. As soon as reasonably
practicable after the Effective Time, Parent shall cause the Exchange Agent to
mail to each holder of record of a certificate or certificates (the
"Certificates") which immediately prior to the Effective Time represented
outstanding shares of Company Common Stock, other than shares to be canceled in
accordance with Section 2.8(b), (i) a Letter of Transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates to the Exchange Agent) and
(ii) instructions for use in effecting the surrender of the
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Certificates in exchange for the Merger Consideration. Subject to Section
2.9(h), upon surrender of a Certificate for cancellation to the Exchange Agent,
together with such Letter of Transmittal, duly executed, and such other
documents as may reasonably be required by the Exchange Agent, the Exchange
Agent shall pay the holder of such Certificate the Merger Consideration in
respect of such Certificate, less any required withholding taxes, and the
Certificate so surrendered shall forthwith be canceled. If any portion of the
Merger Consideration is to be paid to a Person other than the registered holder
of the shares represented by the Certificate or Certificates surrendered in
exchange therefor, it shall be a condition to such payment that the Certificate
or Certificates so surrendered shall be properly endorsed or otherwise be in
proper form for transfer and that the Person requesting such payment shall pay
to the Exchange Agent any transfer or other taxes required as a result of such
payment to a Person other than the registered holder of such shares or establish
to the satisfaction of the Exchange Agent that such tax has been paid or is not
payable. Until surrendered as contemplated by this Section 2.9, each Certificate
(other than Certificates representing shares of Company Common Stock held by
Dissenting Shareholders (as defined below) or shares of Company Common Stock to
be canceled pursuant to Section 2.8(b)) shall be deemed at any time after the
Effective Time to represent only the right to receive the Merger Consideration
upon such surrender.
(c) NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK.
All Merger Consideration paid upon the surrender for exchange of Certificates in
accordance with the terms of this Article II shall be deemed to have been paid
in full satisfaction of all rights pertaining to the shares of Company Common
Stock theretofore represented by such Certificates. There shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of Company Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation or the Exchange Agent
for any reason, they shall be canceled and exchanged as provided in this Article
II, except as otherwise provided by law.
(d) UNCLAIMED FUNDS. Any portion of the Payment Fund made
available to the Exchange Agent pursuant to Section 2.9(a) that remains
unclaimed by holders of the Certificates for six months after the Effective Time
shall be delivered to Parent, upon demand, and any holders of Certificates who
have not theretofore complied with this Article II shall thereafter look only to
Parent for payment of their claim for Merger Consideration and any portion of
the Merger Consideration made available to the Exchange Agent to pay for Company
Common Stock for which dissenters' rights have been perfected shall be returned
to Parent, upon demand.
(e) NO LIABILITY. None of Parent, Acquisition, the
Company or the Exchange Agent shall be liable to any Person in respect of any
Merger Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law. If any Certificate has not been
surrendered prior to five years after the Effective Time (or immediately prior
to such earlier date on which Merger Consideration in respect of such
Certificate would otherwise escheat to or become the property of any public
official), any such shares, cash, dividends or distributions in respect of such
Certificate shall, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all claims or interest
of any person previously entitled thereto.
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(f) INVESTMENT OF FUNDS. The Payment Fund shall be
invested by the Exchange Agent in obligations of, or guaranteed by, the United
States of America or in commercial paper obligations rated A-1 or P-1 or better
by Xxxxx'x Investor Services or Standard & Poor's Corporation, respectively, in
each case with maturities not exceeding seven days. All earnings thereon shall
inure to the benefit of Parent or Acquisition.
(g) LOST CERTIFICATES. In the event that any Certificate
shall have been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the Person claiming such Certificate to be lost, stolen or
destroyed and, if required by Parent, the granting of an indemnity reasonably
satisfactory to Parent against any claim that may be made against it, the
Surviving Corporation or the Exchange Agent, with respect to such Certificate,
will issue in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration with respect to such Certificate, to which such Person is entitled
pursuant hereto.
(h) DISSENTING SHARES. Notwithstanding anything in this
Agreement to the contrary, if required under the FBCA, but only to the extent
required thereby, shares of Company Common Stock that are issued and outstanding
immediately prior to the Effective Time and which are held by shareholders
("Dissenting Shareholders") who (i) have not voted in favor of or consented to
the Merger, (ii) in the manner provided in Section 607.1320 of the FBCA, shall
have delivered a written notice of intent to demand payment for such shares of
Company Common Stock if the Merger is effectuated in the time and manner
provided in the FBCA and (iii) shall not have failed to perfect or shall not
have effectively withdrawn or lost their rights to appraisal and payment under
the FBCA, shall not be converted into the right to receive the Merger
Consideration, but shall, in lieu thereof, be entitled to receive the
consideration as shall be determined pursuant to Sections 607.1301 through
607.1320 of the FBCA; provided, however, that any such holder who shall have
failed to perfect or shall have effectively withdrawn or lost his, her or its
right to appraisal and payment under the FBCA, if any, shall thereupon be deemed
to have had such person's shares of Company Common Stock converted, at the
Effective Time, into the right to receive the Merger Consideration set forth
herein in accordance with the other provisions of this Section 2.9, without any
interest or dividends thereon. Notwithstanding anything to the contrary
contained in this Section 2.9(h), if (A) the Merger is rescinded or abandoned or
(B) the shareholders of the Company revoke the authority to effect the Merger,
then the right of any Dissenting Shareholder to be paid the fair value of such
Dissenting Shareholder's shares of Company Common Stock pursuant to Section
607.1302 of the FBCA shall cease as provided in Section 607.1320 of the FBCA.
The Company will give Parent prompt notice of any demands received by the
Company for appraisals of Company Common Stock. The Company shall not, except
with the prior written consent of Parent, make any payment with respect to any
demands for appraisal or offer to settle or settle any such demands.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to Parent and Acquisition as follows:
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida.
(b) The Company has all corporate power and authority
necessary to enable it to enter into this Agreement and carry out the
transactions contemplated by this Agreement. All corporate actions
necessary to authorize the Company to enter into this Agreement and
carry out the transactions contemplated by it, other than, to the
extent necessary, approval of the Merger and of this Agreement by the
shareholders of the Company, have been taken. This Agreement has been
duly executed and delivered by the Company. Assuming due authorization,
execution and delivery of this Agreement by each of Parent and
Acquisition, this Agreement is a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by bankruptcy,
reorganization, fraudulent conveyance, insolvency, moratorium or
similar laws affecting the rights and remedies of creditors generally
and by equitable principles of general application (regardless of
whether such enforceability is considered in a proceeding at law or in
equity). The Company Board has determined that the Offer and the Merger
are fair to, and in the best interests of, the Company's shareholders
and has adopted this Agreement and has voted to recommend to the
Company's shareholders to accept the Offer, tender their shares of
Company Common Stock thereunder and that they vote in favor of
approving and adopting the Merger and this Agreement.
(c) Except as shown on Schedule 3.1-C, neither the execution
and delivery of this Agreement or of any document to be delivered in
accordance with this Agreement nor the consummation of the transactions
contemplated by this Agreement or by any document to be delivered in
accordance with this Agreement will violate, result in a breach of, or
constitute a default (or an event which, with notice or lapse of time
or both, would constitute a default) under, the articles of
incorporation or bylaws of the Company or any of the terms of any
material agreement or instrument to which either the Company or any of
its Subsidiaries is a party or by which any of them is bound. Included
on Schedule 3.1-C are all material agreements or instruments to which
either the Company or any of its Subsidiaries is a party or by which
any of them is bound under which the execution and delivery of this
Agreement or of any document to be delivered in accordance with this
Agreement or the consummation of the transactions contemplated by this
Agreement would give rise to a right of termination, amendment,
cancellation or the loss of a material benefit under such agreement or
instrument, or the acceleration or maturity of any material obligation
or the creation of any "put" right or offer or requirement to purchase
or any lien, pledge, security interest, charge or other encumbrance on
any assets of the Company or any of its Subsidiaries.
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(d) Except (i) as shown on Schedule 3.1-D and (ii) for
filings, permits, authorizations, consents and approvals as may be
required under, and other applicable requirements of, (A) the Exchange
Act (including the filing with the SEC of the Schedule 14D-9), (B) the
Xxxx-Xxxxx Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act") and (C) the FBCA, no governmental filings, authorizations,
approvals, or consents, or other governmental actions are required to
permit the Company to fulfill all its obligations under this Agreement,
other than governmental filings, authorizations, approvals, consents or
other governmental actions the absence of which would not have a
Material Adverse Effect on the Company.
(e) The Company and each of its Subsidiaries is qualified to
do business as a foreign corporation in each state in which it is
required to be qualified, except states in which the failure to
qualify, in the aggregate, would not have a Material Adverse Effect on
the Company. As used in this Agreement, the term "Material Adverse
Effect" on a company means a material adverse effect on (i) the
business, operations, results of operations, properties, assets,
liabilities or financial condition of that company and its Subsidiaries
taken as a whole or (ii) the ability of that company to consummate the
Offer or the Merger, other than a material adverse effect resulting
from (x) a change in United States generally accepted accounting
principles ("GAAP"), (y) a change or occurrence affecting the
homebuilding industry generally, or (z) a change in general economic
conditions (including, without limitation, a change in interest rates).
(f) The only authorized stock of the Company is 25,000,000
shares of Company Common Stock, and 1,000,000 shares of preferred
stock, par value $.01 per share. As of October 11, 2000, there were
10,871,539 shares of Company Common Stock outstanding and no shares of
preferred stock outstanding. Except as set forth above and except for
shares issued upon exercise since October 11, 2000 of employee stock
options granted on or prior to October 11, 2000, the Company has no
outstanding shares of capital stock. All the outstanding shares of
Company Common Stock have been duly authorized and issued, are fully
paid and non-assessable and were not issued in violation of any
preemptive or other similar rights. Except as shown on Schedule 3.1-F,
the Company has no outstanding options, warrants or convertible or
exchangeable securities, and is not a party to any other agreements,
which require, or upon the passage of time, the payment of money or the
occurrence of any other event may require, the Company to issue or sell
any of its capital stock. Schedule 3.1-F sets forth all options for
Company Common Stock outstanding as of October 11, 2000 and includes
the names of the grantees of such options, the number of shares subject
to such options, the exercise prices thereof and the dates on which
such options expire.
(g) The number of shares of Company Common Stock which the
Company repurchased between October 31, 1999 and the date of this
Agreement did not exceed 508,500 shares and the total amount the
Company paid for those shares did not exceed $5.1 million. The Company
has not repurchased any Company Common Stock since July 27, 2000.
(h) Except as shown on Schedule 3.1-H, (i) each of the
Company's Subsidiaries has been duly organized, and is validly existing
and in good standing under
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the laws of its jurisdiction of incorporation or organization, (ii)
each of the Business Entities (as defined below) is wholly owned,
directly or indirectly, by Parent, (iii) all the shares of issued and
outstanding capital stock of each of the Company's Subsidiaries which
is a corporation are owned by the Company or a Subsidiary of the
Company and are duly authorized, validly issued, fully paid and
non-assessable and were not issued in violation of any preemptive or
other similar rights, (iv) none of the Company's Subsidiaries has
issued any options, warrants or convertible or exchangeable securities,
(v) none of Company or any of the Company's Subsidiaries is a party to
any agreements which require, or upon the passage of time, the payment
of money or the occurrence of any other event may require, the Company
or any Subsidiary to issue or sell any stock or other equity interests
in any of the Company's Subsidiaries, and (vi) there are no
registration covenants or transfer or voting restrictions with respect
to outstanding securities of any of the Company's Subsidiaries.
(i) The Company has filed with the SEC all forms, statements,
reports and documents required to be filed under the Securities Act of
1933, as amended (the "Securities Act"), the Exchange Act or the rules
and regulations thereunder since October 31, 1996.
(j) The Company's Annual Report on Form 10-K for the year
ended October 31, 1999 (the "Company 1999 10-K") and its Quarterly
Reports on Form 10-Q for the interim periods ended January 31, 2000,
April 30, 2000 and July 31, 2000 (the "Company 2000 10-Q's") which the
Company filed with the SEC, at the time filed, complied in all material
respects with the applicable requirements of the Exchange Act and did
not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made in it, in
light of the circumstances under which they were made, not misleading.
Without limiting what is said in the preceding sentence, the financial
statements included in the Company 1999 10-K were prepared, and the
financial information included in the Company 2000 10-Q's was derived
from financial statements which were prepared in accordance with GAAP
applied on a consistent basis (except as permitted by Rule 10-01 of
Regulation S-X and except that financial information included in the
Company 2000 10-Q's is subject to normal year-end adjustments) and
present fairly in all material respects the consolidated financial
condition and the consolidated results of operations of the Company and
its Subsidiaries at the dates, and for the periods, to which they
relate. The Company has not filed any reports with the SEC with regard
to any period which ended, or any event which occurred, after July 31,
2000.
(k) Since October 31, 1999, (i) the Company and its
Subsidiaries have in all material respects conducted their respective
businesses in the ordinary course and in the same manner in which they
were conducted prior to October 31, 1999, and (ii) nothing has occurred
which, individually or in aggregate, has had a Material Adverse Effect
on the Company.
(l) The Company and it Subsidiaries have at all times
complied, and currently are complying, with all applicable federal,
state, local and foreign laws and regulations,
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except failures to comply which would not reasonably be expected, in
the aggregate, to have a Material Adverse Effect on the Company.
(m) Except as shown on Schedule 3.1-M, the Company and its
Subsidiaries have all licenses and permits which are required to enable
them to conduct their businesses as they currently are being conducted,
except licenses or permits the lack of which would not reasonably be
expected, in the aggregate, to have a Material Adverse Effect on the
Company.
(n) The Company and each of its Subsidiaries and each business
entity in which the Company or any of its Subsidiaries owns an equity
interest (each, a "Business Entity") has filed when due (taking account
of extensions) all Tax Returns (as defined below) relating to federal
and state income taxes (other than states for which the Tax Returns are
not material), and all other material Tax Returns, which it has been
required to file and has paid in full all Taxes shown to be due on
those returns or subsequent assessments with respect thereto. Those Tax
Returns are true, correct and complete in all material respects and
accurately reflect all Taxes required to have been paid, except to the
extent of items which may be disputed by applicable taxing authorities
but for which there is substantial authority to support the position
taken by the Company or the Subsidiary or the Business Entity and for
which the Company has provided adequate reserves (in accordance with
GAAP) on the balance sheet at July 31, 2000 included in the Company's
Quarterly Report on Form 10-Q for the nine-month period ended July 31,
2000 (the "Company July 10-Q"). The Company has maintained all
documents, books and records as are required to be maintained by it and
its Subsidiaries and Business Entities under applicable Tax laws, rules
and regulations. The Company and its Subsidiaries and Business Entities
have withheld and paid over all Taxes required to have been withheld
and paid over, and complied with all information reporting and backup
withholding requirements, including maintenance of required records
with respect thereto, in connection with amounts paid or owing to any
employee, creditor, independent contractor, or other third party.
Except as shown on Schedule 3.1-N, (i) no extension of time given by
the Company or any of its Subsidiaries or Business Entities for
assessment of Tax with respect to any of their federal income Tax
Returns or other material Tax Returns is in effect, (ii) no Tax lien
has arisen and no Tax lien or levy has been filed by any taxing
authority against the Company or any of its Subsidiaries or Business
Entities or any of their assets relating to Taxes in excess of $50,000
in any instance, or $250,000 in aggregate (other than for current Taxes
not yet due and payable), (iii) no federal income Tax Return, or state,
local or foreign Tax Return, of the Company or any Subsidiary or
Business Entity, is the subject of a pending audit or other
administrative proceeding or court proceeding, (iv) neither the Company
nor any Subsidiary or Business Entity is a party to any agreement
providing for the allocation or sharing of Taxes (other than agreements
solely between the Company and its direct or indirect wholly owned
Subsidiaries or among direct or indirect wholly owned Subsidiaries of
the Company), (v) neither the Company nor any Subsidiary has
participated in or cooperated with an international boycott as that
term is used in Section 999 of the Code, (vi) estimated Taxes paid and
the liabilities and reserves for Taxes reflected in the consolidated
balance sheet at July 31, 2000 included in the Company July 10-Q cover
all Taxes for all periods ended at or prior to the date of such balance
sheet
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and have been determined in accordance with GAAP and there is no
material liability for Taxes attributable to any period beginning after
the date of such balance sheet other than Taxes arising in the ordinary
course of business and other than Tax liabilities assumed or incurred
in the purchase of real estate in the ordinary course of business which
are not material in the aggregate, (vii) no event, transaction, act or
omission has occurred which could reasonably be expected to result in
the Company's becoming liable to pay or to bear any Tax as a
transferee, successor or otherwise which is primarily or directly
chargeable or attributable to any other person, firm or company other
than its Subsidiaries, and the Company has no actual or contingent
liability (whether by reason of any indemnity, warranty or otherwise)
to any other person in respect of any actual, contingent or deferred
liability of such person for Taxes, (viii) the Company is not required
to include in income any adjustment pursuant to Section 481(a) of the
Code by reason of a voluntary change in accounting method initiated by
the Company, and the Internal Revenue Service (the "IRS") has not
proposed any such adjustment or change in accounting method, and (ix)
neither the Company nor any Subsidiary has filed a consent pursuant to
Section 341(f) of the Code or agreed to have Section 341(f)(2) of the
Code apply to any disposition of a Subsection (f) asset (as that term
is defined in Section 341(f)(4) of the Code) owned by the Company or
any Subsidiary. For the purposes of this Agreement, the term "Taxes"
means taxes of any kind (including, but not limited to, income,
franchise, sales and use, excise, real property, personal property and
withholding taxes), assessments, fees, levies and other governmental
charges, together with any interest thereon, penalties, additions to
tax or additional amounts with respect thereto, and any interest in
respect of any such penalties, additions or additional amounts. For the
purposes of this Agreement, the term "Tax Return" means any return,
declaration, report, claim for refund, or information return or
statement relating to Taxes, including any schedule or attachment
thereto, and including any amendment thereof.
(o) (i) The Company and its Subsidiaries have all
environmental permits which are necessary to enable them to conduct
their businesses as they currently are being conducted without
violating any Environmental and Land Use Laws in a manner which would
have a Material Adverse Effect on the Company, (ii) except as shown on
Schedule 3.1-O, neither the Company nor any Subsidiary has received any
written notice of material noncompliance or material liability under
any Environmental and Land Use Law which is now pending, (iii) neither
the Company nor any Subsidiary has performed any acts, including but
not limited to releasing, storing or disposing of hazardous materials,
there is no condition on any property owned or leased by the Company or
a Subsidiary, and there was no condition on any property formerly owned
or leased by the Company or a Subsidiary while the Company or a
Subsidiary owned or leased that property, that would be a basis for
liability of the Company or a Subsidiary under any Environmental and
Land Use Law, in each case, which would have a Material Adverse Effect
on the Company; (iv) except as shown on Schedule 3.1-O, and except for
those which would not have a Material Adverse Effect on the Company,
neither the Company nor any Subsidiary is subject to any order of any
court or governmental agency requiring the Company or any Subsidiary to
take, or refrain from taking, any actions in order to comply with any
Environmental and Land Use Law and no action or proceeding seeking such
an order is pending or, insofar as any officer of the Company is aware,
threatened against the Company; (v) there has not been exposure of
persons to a release or
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threatened release of hazardous materials in connection with the
operations of the Company or its Subsidiaries that could reasonably be
expected to lead to tort claims by third parties of damages or
compensation that individually or in the aggregate would constitute a
Material Adverse Effect; (vi) there has not been any physical injury to
any person, persons, or property in connection with the operations of
the Company or its Subsidiaries that could reasonably be expected to
lead to tort or workers' compensation claims of damages or compensation
that individually or in the aggregate would constitute a Material
Adverse Effect; and (vii) except as shown on Schedule 3.1-O and except
for those which would not have a Material Adverse Effect on the
Company, the Company and its Subsidiaries have no knowledge regarding
any currently proposed Environmental and Land Use Laws or other
organized initiatives that would prohibit or otherwise substantially
restrict any of the Company's and Subsidiaries' existing operations or
businesses. As used in this Agreement, the term "Environmental and Land
Use Law" means any federal, state or local law, rule, regulation,
guideline or other legally enforceable requirement of a governmental
authority relating to (i) the protection of health, safety, or the
environment, and (ii) classification and/or restrictions on the use of
privately owned real property such as zoning laws, laws restricting the
development of real property for residential housing, moratoria on
building permits, and other similar conservation or land use laws or
regulations.
(p) Schedule 3.1-P contains a true and complete list of all
employee benefit plans (within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
and all bonus, equity-based compensation, incentive, deferred
compensation or other benefit or compensation plans, programs or
arrangements, and all employment, severance, consulting or other
similar contracts or agreements (except for any employment or
consulting contract or agreement that is for an amount which does not
exceed $50,000 and is terminable within 30 days without penalty) to
which the Company or any Subsidiary is a party or with respect to which
the Company or any Subsidiary has any obligation (collectively, the
"Plans"). The Company has made available to Parent or Acquisition true
and complete copies of each Plan that is in writing (and summaries of
those Plans that are not in writing) and each material document
prepared in connection with each such Plan. Except as specifically
provided by this Agreement, neither the Company nor any Subsidiary has
any commitment (i) to create, incur liability with respect to or cause
to exist any other employee benefit plan, program or arrangement, (ii)
to enter into any contract or agreement to provide compensation or
benefits to any individual or (iii) to modify, change or terminate any
Plan, other than with respect to a modification, change or termination
required by ERISA or the Internal Revenue Code of 1986, as amended (the
"Code").
(q) Except as set forth on Schedule 3.1-Q, (i) none of the
Plans is subject to Title IV of ERISA or Section 412 of the Code or is
a multiemployer plan, as defined in Section 3(37) of ERISA; (ii) each
Plan that is intended to be qualified under Section 401(a) or 401(k) of
the Code has received a favorable determination letter from the
Internal Revenue Service that it is so qualified and the Company has no
knowledge that any amendment or other action or omission has occurred
that would adversely affect its qualification; (iii) each Plan is now
and has always been operated in all material respects in accordance
with the requirements of all applicable laws, and the Company and each
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Subsidiary have performed all material obligations required to be
performed by them under, are not in any material respect in default
under or in violation of, and have no knowledge of any material default
or violation by any party to, any Plan; (iv) the Company's financial
statements contained in the Company July 10-Q reflect an accrual
(through July 31, 2000) of all material amounts of employer
contributions and premiums accrued but unpaid with respect to the
Plans; (v) no Plan has any liability to provide benefits to any person
following his termination of employment, except as may be required by
part 6 of subtitle B of title I of ERISA; and (vi) each Plan may be
unilaterally terminated at any time by the Company or a Subsidiary
without material liability.
(r) (i) There are no material employment related controversies
and there is not any labor strike, organized work stoppage, slowdown,
lockout, or other organized labor controversy pending and, to the
knowledge of the Company or any Subsidiary, none of the above is
threatened between the Company or any Subsidiary and any of their
respective employees; (ii) neither the Company nor any Subsidiary is a
party to any collective bargaining agreement or other labor union
contract applicable to persons employed by the Company or any
Subsidiary, nor does the Company or any Subsidiary know of any
activities or proceedings of any labor union to organize any such
employees; and (iii) the Company and each Subsidiary is in compliance
with all applicable laws, agreements, contracts and policies relating
to employment, employment practices, wages, hours and terms and
conditions of employment of the employees.
(s) The Company Board has received the oral opinion of Xxxxxxx
Xxxxx Xxxxxx Inc., financial advisor to the Company (which opinion will
be confirmed in writing within two days of receipt of such opinion),
dated the date of this Agreement, in form satisfactory to the Company
and the Company Board, to the effect that, as of such date, the cash
consideration to be received in the Offer and the Merger is fair from a
financial point of view to the holders of Company Common Stock (other
than to Parent and its affiliates), and such opinion has not been
withdrawn or materially adversely modified. A true and correct copy of
this opinion will be provided to Parent for informational purposes.
(t) Except as shown on Schedule 3.1-T, there are no contracts,
agreements or other arrangements which could reasonably be expected to
result in the payment by the Company or by any Subsidiary of an "Excess
Parachute Payment" as that term is used in Section 280G of the Code or
the payment by the Company or any of its Subsidiaries of compensation
which will not be deductible because of Section 162(m) of the Code.
(u) Schedule 3.1-U includes a list and description of all
claims or litigation to which the Company of any of its Subsidiaries is
a party with potential exposure greater than $10,000. Except as is
described in the Company 1999 10-K or a subsequent report filed with
the SEC, neither the Company nor any Subsidiary is a party to any
litigation which is required to be disclosed in an Annual Report on
Form 10-K of the Company or, if determined adversely to the Company or
any of its Subsidiaries, would have a Material Adverse Effect on the
Company.
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(v) No "fair price," "moratorium," "control share
acquisition," "interested shareholder," "business combination" or other
similar anti-takeover statute or regulation (including, without
limitation, Sections 607.0901 and 607.0902 of the FBCA) (each a
"Takeover Statute") or restrictive provision of any applicable
anti-takeover provision in the articles of incorporation of the Company
or bylaws of the Company is applicable to the Offer, the Merger, this
Agreement, the Shareholders Agreement, or any of the transactions
contemplated by this Agreement. The Company does not have any
shareholder rights plans or similar anti-takeover device in effect.
3.2 REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION. Each of
Parent and Acquisition represents and warrants to the Company as follows:
(a) Parent is a corporation duly organized, validly existing
and in good standing under the laws of the state of Delaware, and
Acquisition is a corporation duly organized, validly existing and in
good standing under the laws of the state of Florida. Acquisition is a
wholly owned Subsidiary of Parent.
(b) Each of Parent and Acquisition has all corporate power and
authority necessary to enable it to enter into this Agreement and carry
out the transactions contemplated by this Agreement. All corporate
actions necessary to authorize each of Parent and Acquisition to enter
into this Agreement and carry out the transactions contemplated by it
have been taken. This Agreement has been duly executed and delivered by
each of Parent and Acquisition. Assuming due authorization, execution
and delivery of this Agreement by the Company, this Agreement is a
valid and binding obligation of Parent and Acquisition, enforceable
against each of them in accordance with its terms, except as such
enforceability may be limited by bankruptcy, reorganization, fraudulent
conveyance, insolvency, moratorium or similar laws affecting the rights
and remedies of creditors generally and by equitable principles of
general application (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
(c) Neither the execution and delivery of this Agreement or of
any document to be delivered in accordance with this Agreement nor the
consummation of the transactions contemplated by this Agreement or by
any document to be delivered in accordance with this Agreement will
violate, result in a breach of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a
default) under, the certificate of incorporation or bylaws of Parent or
the articles of incorporation or bylaws of Acquisition or any of the
terms of any agreement or instrument to which either Parent or
Acquisition is a party or by which either of them is bound, except for
violations, breaches, or defaults that could not prevent or materially
delay the consummation of the Offer and/or the Merger.
(d) Except as shown on Schedule 3.2-D, no governmental
filings, authorizations, approvals, or consents, or other governmental
action, other than the expiration or termination of waiting periods
under the HSR Act, if any, are required to permit each of Parent and
Acquisition to fulfill all its obligations under this Agreement.
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(e) There is no suit, claim, action, proceeding or
investigation pending or, to the knowledge of Parent, threatened
against Parent or any Subsidiary of Parent which if determined
adversely to Parent or such Subsidiary would prevent or materially
delay the Offer or prevent or materially delay the Company from
consummating the Merger or the other transactions contemplated by this
Agreement.
(f) Parent (i) has delivered a true and correct copy of a
financing commitment letter issued by Bank of America, N.A. to Parent,
which financing, together with funds set forth in clause (ii) below and
such other funds that may be available from the Company after
consummation of the Offer, will provide the funds necessary to
consummate the Offer and the Merger on the terms contemplated by this
Agreement and to fund the related option cancellation payments and all
fees and expenses related to transactions contemplated in this
Agreement, (ii) has received and retained a subordinated loan from its
ultimate parent company (or a subsidiary thereof) of at least $80
million, which loan is subordinated to all obligations of Parent to the
Company pursuant to or arising under this Agreement and (iii) has no
material indebtedness owed to any person.
(g) Acquisition is not and has never been a party to any
material agreements and has not conducted any activities other than in
connection with the organization of Acquisition, the commencement of
the Offer, the negotiation and execution of this Agreement and the
Shareholders Agreement and the consummation of the transactions
contemplated hereby. Acquisition has no Subsidiaries.
ARTICLE IV.
ACTIONS PRIOR TO THE MERGER
4.1 COVENANTS RELATING TO THE CONDUCT OF BUSINESS OF THE COMPANY. From
the date of this Agreement until the earlier of (i) the Effective Time, (ii)
such time as designees of Parent and Acquisition shall constitute a majority of
the Company Board, and (iii) such time as this Agreement may be terminated in
accordance with Article VI, the Company will, and will cause each of its
Subsidiaries to, except as expressly contemplated or permitted by this
Agreement, as set forth in Schedule 4.1 attached hereto, or with the written
consent of Parent:
(a) Operate its business in the ordinary course and in a
manner consistent with the manner in which it is being operated at the
date of this Agreement.
(b) Take all reasonable steps available to it to maintain the
goodwill of its business and the continued employment of its executives
and other employees and to maintain good relationships with the
vendors, suppliers, contractors and others with which it does business.
(c) At its expense, maintain all its assets in good repair and
condition, except to the extent of reasonable wear and use and damage
by fire or other casualty and maintain in effect all insurance policies
(or substitute policies with substantially similar coverage) in effect
as of the date of this Agreement.
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(d) Not make any borrowings other than borrowings in the
ordinary course of business under working capital lines which are
disclosed in the notes to the consolidated balance sheet at October 31,
1999 included in the Company 1999 10-K or under the Company's Credit
Agreement, as amended, with lenders for which SunTrust Bank, South
Florida, National Association is the administrative agent and
NationsBank, N.A. is the documentation agent (the "Credit Agreement").
(e) Not enter into any contractual commitments involving
capital expenditures, loans or advances, and not voluntarily incur any
contingent liabilities, except in each case in the ordinary course of
business.
(f) Not redeem or purchase any of its stock and not declare or
pay any dividends, or make any other distributions or repayments of
debt to its shareholders (other than payments by Subsidiaries of the
Company to the Company or to other wholly-owned Subsidiaries of the
Company).
(g) Not make any loans or advances (other than advances for
travel and other normal business expenses and other advances to
non-officers that do not exceed $50,000 in the aggregate) to
shareholders, directors, officers or employees.
(h) Maintain its books of account and records in the usual
manner, in accordance with GAAP applied on a basis consistent with the
basis on which they were applied in prior years, subject to normal
year-end adjustments and accruals.
(i) Comply in all material respects with all applicable laws
and regulations of governmental agencies.
(j) Not purchase, sell or otherwise dispose of or encumber any
property or assets, or engage in any activities or transactions, except
in each case in the ordinary course of business; provided that any new
land purchase contract exceeding $8 million and any new land sale
contract (other than an individual lot sale) is deemed not to be in the
ordinary course of business.
(k) Not enter into or amend any employment, severance or
similar agreements or arrangements (other than the hiring of any
non-officer for at-will employment), or increase the salaries of any
employees (other than through normal annual increases or as required by
any Plan existing on the date of this Agreement).
(l) Not adopt or become an employer with regard to any
employee compensation, employee benefit or post-employment benefit plan
or amend any Plan.
(m) Not amend its articles of incorporation or bylaws.
(n) Not (i) issue or sell any of its stock (except upon
exercise of options which are outstanding on the date of this
Agreement) or any options, warrants or convertible or exchangeable
securities or (ii) split, combine, or reclassify its outstanding stock.
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(o) Not intentionally take, or intentionally fail to take, any
action that would result in any of the representations and warranties
of the Company contained in this Agreement not being complete and
accurate;
(p) Not authorize or enter into any agreement to take any of
the actions referred to in subparagraphs (a) through (o) above.
4.2 HSR ACT FILINGS. The Company and Parent will each make as promptly
as practicable any filing that may be required under the HSR Act with regard to
the transactions which are the subject of this Agreement and each of them will
take, if applicable, all reasonable steps within its control (including
providing information to the Federal Trade Commission and the Department of
Justice) to cause the waiting periods required by the HSR Act to be terminated
or to expire as promptly as practicable. The Company and Parent will each
provide information and cooperate in all other respects to assist the other of
them in making its filing, or securing an exemption from filing, under the HSR
Act.
4.3 APPROVAL BY THE COMPANY'S SHAREHOLDERS.
(a) If required by the FBCA or any other applicable law or the
Company's articles of incorporation or bylaws in order to consummate
the Merger or if Parent, in its sole discretion, shall so request,
subsequent to the acceptance for payment of and payment for the shares
of Company Common Stock pursuant to the Offer, the Company shall, at
Parent's option and direction and as soon as practicable either (i)
duly call, give notice of, convene and hold a meeting of its
shareholders (the "Company Shareholders Meeting") or (ii) submit the
Merger to its shareholders for approval through shareholder action by
written consent in lieu of a meeting for the purpose of obtaining the
required votes or consents of the shareholders of the Company, and, the
Company shall, through the Company Board, recommend to its shareholders
that they vote in favor of the approval and adoption of this Agreement
and the Merger; provided, however, that the Company Board may amend,
modify or withdraw its recommendation if the Company Board determines,
following consultation with the Company's outside legal counsel, that
such action is required in order to comply with applicable law and so
long as the Company Board submits the Merger to the Company's
shareholders for approval at a meeting or by written consent with no
recommendation and in accordance with FBCA Section 607.1103(2)(a). If
applicable, Parent and Acquisition shall vote or cause to be voted all
the shares of Company Common Stock owned of record by Parent,
Acquisition or any other Subsidiary of Parent in favor of the approval
and adoption of the Merger and this Agreement.
(b) Notwithstanding the preceding paragraph or any other
provision of this Agreement, in the event Parent, Acquisition or any
other Subsidiary of Parent shall beneficially own, in the aggregate, at
least 80% of the issued and outstanding shares of the Company Common
Stock and Parent, in its sole discretion, shall elect to effect the
Merger pursuant to Section 607.1104 of the FBCA, the Company shall not
be required to call the Company Shareholders Meeting or to file or mail
a proxy statement relating to the Company Shareholders Meeting (the
"Proxy Statement") or an information statement relating to approval of
the Merger and this Agreement by written consent (the
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"Information Statement"), and the parties hereto shall, at the request
of Parent and subject to Article V, take all necessary and appropriate
action to cause the Merger to become effective as soon as practicable
after the acceptance for payment of and payment for shares of the
Company Common Stock by Acquisition pursuant to the Offer without a
meeting of shareholders of the Company in accordance with the FBCA.
(c) If required by applicable law or requested by Parent, as
soon as practicable following Parent's request, subsequent to the
acceptance for payment of and payment for the shares of Company Common
Stock pursuant to the Offer, the Company and Parent shall prepare and
file with the SEC the Proxy Statement or the Information Statement, as
applicable. Each of the Company and Parent shall use reasonable best
efforts to cause the Proxy Statement or Information Statement, as
applicable, to be mailed to the Company's shareholders as promptly as
practicable and to solicit proxies, if applicable, in favor of the
adoption of this Agreement and the approval of the Merger; provided,
however, in the event the Company Board withdraws its recommendation
for the adoption of this Agreement and the approval of the Merger, the
Company shall solicit proxies regarding this Agreement and this Merger
in a neutral fashion; provided that such obligation to solicit proxies
in a neutral fashion shall not prohibit the Company Board from
communicating the basis for its determination not to make a
recommendation to the extent required by FBCA Section 607.1103(2)(a).
(d) Unless required by the rules of the National Association
of Securities Dealers, subsequent to Acquisition's acceptance of the
Company Common Stock pursuant to the Offer and prior to the Effective
Time, the Company shall not take any action to cause the Company Common
Stock to be removed from quotation on The Nasdaq National Market System
and de-registered under the Exchange Act.
4.4 NO SOLICITATION OF OFFERS; NOTICE OF PROPOSALS FROM OTHERS.
(a) Neither the Company nor any of its Subsidiaries will, and
the Company will use its best efforts to cause its and its
Subsidiaries' respective directors, officers, employees, investment
bankers, attorneys and other agents and representatives not to,
directly or indirectly (x) solicit, initiate or knowingly facilitate or
encourage (including by way of furnishing or disclosing information)
any inquiry or the making of any offer or proposal by any corporation,
partnership, trust, person or other entity or group other than Parent
or its affiliates (a "Third Party") with respect to, or that could
reasonably be expected to lead to, any merger, consolidation, share
acquisition, asset purchase, share exchange, business combination,
tender offer, exchange offer or similar transaction involving the
acquisition of all or a substantial portion of the assets of the
Company and its Subsidiaries, taken as a whole, or a significant equity
interest in (including by way of tender offer), or a recapitalization
or restructuring of, the Company or any of its Subsidiaries (any of
those transactions being an "Acquisition Transaction") or (y)
negotiate, explore or otherwise communicate in any way with any Third
Party with respect to any possible Acquisition Transaction, or enter
into, approve or recommend any agreement, arrangement or understanding
requiring it to abandon, terminate or otherwise fail to consummate the
Merger or any other of the material transactions contemplated by
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this Agreement; provided however, that the Company may, in response to
a proposal which was not solicited after the date of this Agreement,
furnish information to, and engage in discussions or negotiations with,
a Third Party, if, but only if, (A) the Company Board determines in
good faith, after consultation with a financial advisor of nationally
recognized reputation, that the Third Party is financially capable of
completing the transaction that is the subject of the proposal and
that, if completed, that transaction would result in greater value to
the Company's shareholders than the transactions contemplated by this
Agreement and would be more favorable to the Company and its
shareholders than the transactions contemplated by this Agreement and
(B) before furnishing or disclosing any non-public information to, or
entering into discussions or negotiations with, the Third Party, the
Company receives from the Third Party an executed confidentiality
agreement with terms no less favorable in the aggregate to the Company
than those contained in the Confidentiality Agreement between Parent
and the Company, which confidentiality agreement does not provide for
any exclusive right to negotiate with the Company or any payments by
the Company. Nothing in this Section will prohibit the Company Board
from complying with Rule 14e-2 and Rule 14d-9 under the Exchange Act
with regard to a tender offer or an exchange offer or prohibit the
Company from selling assets or properties in the ordinary course of
business.
(b) The Company will (w) no later than the end of the first
Business Day after the Company receives an inquiry, proposal or offer
with respect to a possible Acquisition Transaction or a request for
non-public information relating to the Company in connection with a
possible Acquisition Transaction or for access to its or any of its
Subsidiaries' properties, books or records by any Third Party that
informs the Company Board that the Third Party is considering making,
or has made, a proposal or offer with respect to an Acquisition
Transaction (any such inquiry, proposal, offer or request being an
"Acquisition Proposal"), notify Parent in writing of the inquiry,
proposal, offer or request, (x) in that written notice, indicate in
reasonable detail the terms and conditions of the proposal or offer
and, to the extent consistent with agreements to which the Company is
bound as of the date of this Agreement, the identity of the Third Party
(including the name of the Third Party) and, (y) promptly notify Parent
of any determination by the Company Board that the Company should
furnish information to, or engage in discussions or negotiations with,
any Third Party, and (z) keep Parent reasonably informed of the
progress of any discussions or negotiations with any Third Party.
(c) The Company will immediately cease and cause to be
terminated any existing activities, discussions or negotiations with
any parties (other than Parent and Acquisition) which have been
conducted before the date of this Agreement with respect to any
possible Acquisition Transaction, and, if contacted by any such
parties, will inform any such parties of the Company's obligations
under this Section 4.4.
4.5 TAKEOVER STATUTES. If any Takeover Statute shall become applicable
to the transactions contemplated hereby, the Company and the members of the
Company Board shall grant such approvals and take such actions as are necessary
so that the transactions contemplated hereby may be consummated as promptly as
practicable on the terms contemplated hereby and otherwise act to eliminate or
minimize the effects of such Takeover Statute on the transactions contemplated
hereby.
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4.6 THIRD PARTY STANDSTILL AGREEMENTS. During the period from the date
of this Agreement through the Effective Time, and unless the Company Board
determines in good faith, based upon the advice of the Company's outside legal
counsel, that such action is required to comply with applicable law, the Company
shall not terminate, amend, modify or waive any provision of any confidentiality
or standstill or similar agreement to which the Company or any of its
Subsidiaries is a party (other than involving Parent). Subject to the foregoing,
during such period, the Company agrees to enforce, to the fullest extent
permitted under applicable law, the provisions of any such agreements, including
seeking to obtain injunctions to prevent any breaches of such agreements and to
enforce specifically the terms and provisions thereof and any court having
jurisdiction.
4.7 STOCK OPTIONS. As promptly as practicable following the execution
of this Agreement, the Company shall use its best efforts (which include, but
are not limited to, satisfying the requirements of Rule 16b-3(e) promulgated
under Section 16 of the Exchange Act, without incurring any liability in
connection therewith) to cause each holder of an unexercised and
then-outstanding option for Company Common Stock granted under any Company
employee benefit plan or otherwise to either (i) exercise all such options prior
to the consummation of the Offer, (ii) execute and deliver an agreement with the
Company and Parent prior to the consummation of the Offer agreeing to exercise
all unexercised options immediately preceding the consummation of the Merger and
acknowledging that all such options shall be canceled and cease to be
outstanding upon consummation of the Merger or (iii) execute and deliver an
agreement with the Company and Parent prior to the consummation of the Offer
agreeing to exchange such options within five days following the consummation of
the Offer for payment of an amount in respect thereof equal to the product of
(1) the excess, if any, of the Price Per Share over the per share exercise price
thereof and (2) the number of shares subject thereto (such payment to be net of
applicable withholding taxes).
4.8 FINANCING COVENANTS OF PARENT AND ACQUISITION. Parent and
Acquisition shall keep the Company reasonably apprised as to the status of the
financing to be obtained in connection with the Offer and the Merger and the
related documentation.
4.9 MAINTENANCE OF PARENT FUNDS. Parent shall at all times prior to
consummation of the Offer and the Merger refrain from (i) repaying any portion
of the subordinated loan described in clause (ii) of Section 3.2(f) and (ii)
making any distribution, dividend, loan or advance of the funds advanced to
Parent pursuant to such subordinated loan to any person except for the purpose
of consummating the Offer or the Merger.
ARTICLE V.
CONDITIONS PRECEDENT
5.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
obligations of the Company, Parent and Acquisition to effect the Merger are
subject to the satisfaction or waiver (subject to Section 1.4(c)) on or prior to
the Effective Time of the following conditions:
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(a) SHAREHOLDER APPROVAL. The Company shall have obtained
all approvals of holders of shares of capital stock of the Company necessary to
approve this Agreement and the Merger to the extent required by law.
(b) NO INJUNCTION OR RESTRAINTS; ILLEGALITY. No temporary
restraining order, preliminary or permanent injunction or other order issued by
a court or other governmental entity of competent jurisdiction shall be in
effect and have the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger; provided, however, that each of the parties shall
have used its commercially reasonable efforts (subject to the other terms and
conditions of this Agreement) to prevent the entry of any such injunction or
other order and to appeal as promptly as possible any injunction or other order
that may be entered prior to it having become final and nonappealable.
(c) REQUIRED REGULATORY APPROVALS. All authorizations,
consents, orders and approvals of, and declarations and filings with, and all
expirations of waiting periods imposed by, any governmental entity which, if not
obtained in connection with the consummation of the transactions contemplated
hereby, could reasonably be expected to have a Material Adverse Effect on the
Company or prevent the Company, Parent or Acquisition from consummating the
Merger (collectively, "Required Regulatory Approvals"), shall have been
obtained, have been declared or filed or have occurred, as the case may be, and
all such Required Regulatory Approvals shall be in full force and effect.
(d) COMPLETION OF THE OFFER. Acquisition shall have
purchased, pursuant to the terms and conditions of the Offer, all shares of
Company Common Stock duly tendered and not withdrawn; provided, however, that
neither Parent nor Acquisition shall be entitled to rely on this condition if
either of them shall have failed to purchase shares of Company Common Stock
pursuant to the Offer in breach of their obligations under this Agreement.
ARTICLE VI.
TERMINATION
6.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time, by action taken or authorized by the Board of Directors of
the terminating party or parties, whether before or after approval of this
Agreement and the matters contemplated herein, including the Merger, by the
shareholders of the Company:
(a) By mutual written consent of Parent and the Company, by
action of their respective Boards of Directors;
(b) By either the Company or Parent if (i) the Offer
shall have expired without any Shares being purchased pursuant thereto, or (ii)
the Offer shall not have been consummated by the date which is four months from
the date of this Agreement (the "Outside Date"); provided that the right to
terminate this Agreement under this Section 6.1(b) shall not be available to any
party whose failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of the Offer to be consummated on or
before such date;
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(c) By either the Company or Parent if any court or other
governmental entity shall have issued an order, decree or ruling or taken any
other action (that has not been vacated, withdrawn, or overturned) permanently
restraining, enjoining or otherwise prohibiting the Offer or the Merger, and
such order, decree, ruling or other action shall have become final and
nonappealable;
(d) By Parent, prior to the purchase by Acquisition of
shares of Company Common Stock pursuant to the Offer, if (i) the Company Board
(or any committee thereof) shall have withdrawn or adversely modified (including
by amendment of the Schedule 14D-9) its approval or recommendation of the Offer,
the Merger or this Agreement or the Company Board, upon request by Parent
following receipt by the Company of an Acquisition Proposal, shall fail to
reaffirm such approval or recommendation within ten Business Days after such
request or shall have resolved to do any of the foregoing; (ii) the Company
Board shall have recommended to the shareholders of the Company that they
approve an Acquisition Proposal other than transactions contemplated by this
Agreement; (iii) a tender offer or exchange offer is commenced for shares of
Company Common Stock (other than by Parent or an affiliate of Parent) and the
Company Board recommends that the shareholders of the Company tender their
shares in such tender or exchange offer; or (iv) any Person other than Parent,
Acquisition, or any of their affiliates or any group of which any of them is a
member, shall have entered into a definitive agreement or an agreement in
principle with the Company or any of its Subsidiaries with respect to an
Acquisition Proposal or the Company Board (or any committee thereof) shall have
approved any of the foregoing;
(e) By Parent, prior to the purchase by Acquisition of
shares of Company Common Stock pursuant to the Offer, if (i) any of the
representations and warranties of the Company contained in this Agreement is not
complete and accurate, individually or in the aggregate with the other
representations and warranties of the Company contained in this Agreement,
without regard to any qualification or limitation contained in or related to any
such representation or warranty relating to materiality or to Material Adverse
Effect, in a manner that has, or could reasonably be expected to have, a
Material Adverse Effect on the Company, as if such representations and
warranties were made as of such time on or after the date of this Agreement
(except to the extent that such representations and warranties speak as of a
specific date, in which case such representations and warranties shall not be so
complete and accurate in a manner that has, or could reasonably be expected to
have, a Material Adverse Effect on the Company as of such specific date); or
(ii) any of the representations and warranties contained in Section 3.1(f) or
Section 3.1(h) are not complete and accurate in all material respects as of such
time on or after the date of this Agreement; provided that for the purposes of
this provision, the representations and warranties contained in Section 3.1(h)
shall be deemed complete and accurate in all material respects if they are
complete and accurate in all material respects with respect to the Significant
Subsidiaries listed on Schedule 6.1-E, (iii) the Company has breached in any
material respect any covenant or agreement contained in this Agreement and has
not cured that breach within ten Business Days after written notice from Parent,
or (iv) any change or event shall have occurred that has, or could reasonably be
expected to have, a Material Adverse Effect on the Company;
(f) By the Company, if (i) it is determined that any of
the representations and warranties of Parent or Acquisition contained in this
Agreement is not complete and accurate,
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individually or in the aggregate with the other representations and warranties
of Parent and Acquisition contained in this Agreement, without regard to any
qualification or limitation contained in or related to any such representation
or warranty relating to materiality, in a manner that has, or could reasonably
be expected to have, a material adverse effect on the ability of Parent or
Acquisition to consummate the Offer or the Merger or (ii) Parent or Acquisition
has breached in any material respect any covenant or agreement contained in this
Agreement and has not cured that breach within ten Business Days after written
notice from the Company;
(g) By the Company, if Acquisition fails to (i) commence
the Offer or keep the Offer open as required in Section 1.1 hereof or (ii)
purchase validly tendered shares of the Company Common Stock in violation of the
terms of the Offer and this Agreement; or
(h) By the Company, prior to the purchase by Acquisition
of shares of Company Common Stock pursuant to the Offer, if (i) the Company
receives an Acquisition Proposal in which a person or group (a "Potential
Acquiror") makes a specific proposal for an Acquisition Transaction on specific
terms (a "Firm Proposal"), or a Potential Acquiror commences a cash tender offer
or exchange offer for at least a majority of the Company's outstanding stock
(other than any already owned by the Potential Acquiror), (ii) within 15
Business Days after the Company receives the Firm Proposal or the tender offer
or exchange offer is commenced, the Company Board determines that the Firm
Proposal or the tender offer or exchange offer is a Superior Proposal and
resolves to accept the Superior Proposal, or to recommend that shareholders vote
for, authorize, or tender their shares in response to, the Superior Proposal,
unless Parent and Acquisition agree within five Business Days to increase the
Price Per Share to an amount per share at least as great as the consideration
per share the Company's shareholders would receive as a result of the Superior
Proposal, (iii) the Company has given Parent at least five Business Days' prior
notice (A) of the terms of the Superior Proposal (including the consideration
per share, valuing non-cash consideration as described below, which the
Company's shareholders would receive as a result of the Superior Proposal), and
(B) that unless Parent agrees in writing within the five Business Day period to
increase the Price Per Share to an amount per share at least as great as the
consideration per share the Company's shareholders would receive as a result of
the Superior Proposal, as set forth in the notice, this Agreement will
terminate, and (iv) the Company has (x) paid Parent $8.5 million, (y) reimbursed
Parent for all the expenses which Parent or its Subsidiaries (including
Acquisition) incurred in connection with this Agreement and the transactions
contemplated by it (including reasonable fees and expenses of professionals and
other consultants, commitment fees and other financing costs, and out of pocket
costs incurred by employees in investigating the business and financial
condition of the Company and in connection with the negotiation of this
Agreement and efforts to carry out the transactions which are the subject of
this Agreement) ("Parent Expenses") regarding which Parent has presented
reasonable documentation to the Company, and (z) agreed in writing to reimburse
Parent for all Parent Expenses for which Parent subsequently presents reasonable
documentation to the Company (up to a total reimbursement of Parent Expenses
under clauses (y) and (z) not exceeding $3 million). A "Superior Proposal" is a
proposal for an Acquisition Transaction or a tender offer or exchange offer
which (A) would result in the Company's shareholders' receiving consideration
which is greater than the Price Per Share (valuing non-cash consideration at its
fair value as determined in good faith by the Company Board after consultation
with its financial advisor), (B) is not subject to the outcome of due diligence
or any other form of investigation, and (C) is not subject to a financing
contingency
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and is from a proposed acquiror which the Company Board determines in good faith
after consultation with its independent financial advisor has the financial
resources necessary to carry out the transaction and (D) the Company Board
determines in good faith to be more favorable to the Company's shareholders than
the transactions contemplated by this Agreement. A notice that this Agreement
will terminate given pursuant to clause (iii) of the first sentence of this
subparagraph will be irrevocable (unless Parent consents in writing to its being
withdrawn by the Company) and (unless Parent and Acquisition agree within five
Business Days to increase the Price Per Share to an amount per share at least as
great as the consideration per share the Company's shareholders would receive as
a result of the Superior Proposal) will result in the termination of this
Agreement on the later of the date specified in the notice or the date the
Company makes the payments and provides the agreement described in clause (iv)
of the first sentence of this subparagraph.
6.2 MANNER OF TERMINATING AGREEMENT. If at any time the Company or
Parent has the right under Section 6.1 to terminate this Agreement, it can
terminate this Agreement by a written notice to the other of them that it is
terminating this Agreement.
6.3 EFFECT OF TERMINATION.
(a) If this Agreement is terminated pursuant to Section
6.1, after this Agreement is terminated, neither party will have any further
rights or obligations under this Agreement other than the obligations under the
last sentence of Section 1.3(b), the agreement to reimburse expenses described
in Section 6.1(h), this Section 6.3, Section 7.1, Section 9.1, the last sentence
of Section 9.6, Section 9.12, Section 9.13, and Section 9.14. Nothing contained
in this Section will, however, relieve either party of liability for any breach
of this Agreement which occurs before this Agreement is terminated.
(b) In the event that this Agreement is terminated by
Parent pursuant to Section 6.1(d) or Section 6.1(e)(iii), then the Company shall
pay Parent $8.5 million and up to $3 million of Parent Expenses incurred in
connection with the Offer and Merger. In the event that (i) this Agreement is
terminated pursuant to Section 6.1(b) and the Minimum Condition shall not have
been satisfied or pursuant to Section 6.1(e)(i), (ii) or (iv), (ii) prior to
such termination, an Acquisition Proposal was made or any Person (other than
Parent or Acquisition) acquired beneficial ownership (as defined in Rule 13d-3
promulgated under the Exchange Act) of more than 20% of the outstanding voting
securities of the Company or was granted an option or right to acquire more than
20% of such voting securities of the Company and (iii) an Acquisition
Transaction is consummated within twelve months of the date of such termination,
then the Company shall pay Parent $8.5 million and up to $3 million of Parent
Expenses incurred in connection with the Offer and Merger. The amounts set forth
in this Section 6.3(b) shall be payable by wire transfer of immediately
available funds (i) in the event of a fee payable pursuant to the first sentence
of this Section 6.3(b), on the date of termination by Parent and (ii) in the
event of a fee payable pursuant to the second sentence of this Section 6.3(b),
on the date such Acquisition Transaction is consummated. The Company
acknowledges that the agreements contained in this Section 6.3(b) and 6.1(h) are
an integral part of the transactions contemplated in this Agreement, and that,
without these agreements, Parent and Acquisition would not enter into this
Agreement.
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ARTICLE VII.
ABSENCE OF BROKERS
7.1 REPRESENTATIONS AND WARRANTIES REGARDING BROKERS AND OTHERS. The
Company and Parent each represents and warrants to the other of them that nobody
acted as a broker, a finder or in any similar capacity in connection with the
transactions which are the subject of this Agreement, except that Banc of
America Securities LLC acted as a financial adviser to Parent and Acquisition
and Xxxxxxx Xxxxx Xxxxxx Inc. acted as a financial advisor to the Company.
Parent will pay all the fees and other charges of Banc of America Securities
LLC. The Company will pay all the fees and other charges of Xxxxxxx Xxxxx Barney
Inc., which fees shall not exceed the amount set forth in the engagement letter
referred to in the last sentence of this Section 7.1. The Company indemnifies
Parent and Acquisition against, and agrees to hold each of them harmless from,
all losses, liabilities and expenses (including, but not limited to, reasonable
fees and expenses of counsel and costs of investigation) incurred because of any
claim by anyone for compensation as a broker, a finder or in any similar
capacity by reason of services allegedly rendered to the Company in connection
with the transactions which are the subject of this Agreement. Parent
indemnifies the Company against, and agrees to hold it harmless from, all
losses, liabilities and expenses (including, but not limited to, reasonable fees
and expenses of counsel and costs of investigation) incurred because of any
claim by anyone for compensation as a broker, a finder or any similar capacity
by reason of services allegedly rendered to Parent or Acquisition in connection
with the transactions which are the subject of this Agreement. The Company has
provided a true and correct copy of the engagement letter (or any other
arrangement for compensation) with Xxxxxxx Xxxxx Xxxxxx Inc.
ARTICLE VIII.
OTHER AGREEMENTS
8.1 OTHER ACTIONS; FILINGS; CONSENTS. Subject to the terms and
conditions contained in this Agreement, Parent and the Company each will (i) use
its commercially reasonable efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, all other things, which are necessary (or, upon
the reasonable request of any party, proper or appropriate) under applicable
laws and regulations, or are required to be taken by any governmental
authorities, to consummate the transactions contemplated by this Agreement as
promptly as practicable, (ii) use its commercially reasonable efforts to make as
promptly as practicable all necessary filings, and subsequently make any other
required submissions, with regard to this Agreement or the transactions
contemplated by this Agreement under (A) the Securities Act, the Exchange Act
and any other applicable federal or state securities laws or regulations, (B)
the HSR Act and any related governmental requests under that Act and (C) any
other applicable or federal, state, local or foreign statutes, laws, rules or
regulations, (iii) use its commercially reasonable efforts to obtain from
governmental authorities any consents, licenses, permits, waivers, approvals,
authorizations and orders required to be obtained by the Company or Parent or
any of their respective Subsidiaries in connection with the authorization,
execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement, (iv) use its commercially
reasonable efforts to resolve any objections which may be asserted by any
governmental authority with regard to the Merger or any other transactions
contemplated by this Agreement under any anti-trust, trade or regulatory laws or
regulations, (v) furnish the other of them, upon request, with copies of all
correspondence, filings and
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communications between it and its affiliates and representatives, on the one
hand, and any governmental authority or member of the staff of any governmental
authority, on the other hand, with respect to this Agreement or the transactions
contemplated by this Agreement, (vi) furnish the other of them with all
information and reasonable assistance which the other of them may reasonably
request in connection with the preparation of filings, registrations or
submissions of information required by any governmental authorities and (vii)
use its commercially reasonable efforts to cause any injunction, restraining
order or other order of any court or governmental authority which adversely
effects the ability of the parties to consummate the transactions contemplated
by this Agreement to be dissolved, and to defend vigorously any litigation
seeking to enjoin, prevent or delay the consummation of the Offer or the Merger
or seeking material changes in the terms of the Offer or the Merger. At Parent's
reasonable request, the Company shall use its commercially reasonable efforts to
obtain each consent of any third party required to be obtained by the Company
under any agreement or instrument to which either the Company or any or its
Subsidiaries is a party or by which any of them is bound in connection with the
transactions contemplated by this Agreement; provided, however, that the Company
shall not be required to obtain the consent of any of the Company's lenders or
noteholders.
8.2 NOTIFICATION OF CERTAIN MATTERS. The Company will cause one or more
of its representatives to confer on a regular and frequent basis with
representatives of Parent and to report to Parent on the general status of its
ongoing operations. Each party will give prompt notice to the other party of (i)
any written notice or other communication from any third party alleging that the
consent of that third party is or may be required in connection with the
transactions contemplated by this Agreement, (ii) its receipt of written notice
of any governmental complaint, investigation or hearing, or any litigation,
which may impair the parties' ability to consummate the transactions
contemplated by this Agreement or may have a Material Adverse Effect on the
Company, (iii) any change or event that in the party's good faith judgment is
reasonably likely to impair the party's ability to consummate the transactions
contemplated by this Agreement or is reasonably likely to have a Material
Adverse Effect on the Company or (iv) the occurrence or the existence of any
event that would, or could with a passage of time or otherwise, make any
representation or warranty in this Agreement untrue.
ARTICLE IX.
GENERAL
9.1 EXPENSES. Except as provided in Sections 6.1(h) and 6.3(b), the
Company and Parent will each pay its own expenses (and Parent will pay
Acquisition's expenses) in connection with the transactions which are the
subject of this Agreement, including legal fees.
9.2 DIRECTORS' AND OFFICERS' INSURANCE AND INDEMNIFICATION. (a) Parent
and the Surviving Corporation will at all times after the Effective Time
indemnify and hold harmless each person who is at the date of this Agreement, or
has been at any time prior to the date of this Agreement, a director, officer or
employee of the Company or any of its Subsidiaries ("Indemnified Parties"), in
each case to the fullest extent permitted by applicable law, with respect to any
claim, liability, loss, damage, cost or expense (whenever asserted or claimed)
based in whole or in part, or arising in whole or in part out of, any act or
omission by that person at or prior to the Effective Time in connection with
that person's duties as a director,
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officer or employee of the Company or any of its Subsidiaries or affiliates, to
the same extent and on the same terms (including with respect to advancement of
expenses) provided in the Company's articles of incorporation or bylaws, or in
any indemnification agreements, in effect on the date of this Agreement. Parent
and the Surviving Corporation will pay all reasonable expenses, including
attorney's fees, that may be incurred by any Indemnified Party in enforcing the
indemnity and other obligations of Parent and the Surviving Corporation under
this Section.
(b) Parent will cause the Surviving Corporation to keep in effect for
at least six years after the Effective Time the policies of directors' and
officers' liability insurance maintained by the Company and its Subsidiaries at
the date of this Agreement; provided that (i) Parent may substitute policies
having the same coverage and amounts and containing terms and conditions which
are no less advantageous to the persons who are currently covered by the
Company's policies and with carriers comparable in terms of credit worthiness to
those which have written the policies maintained by the Company at the date of
this Agreement and (ii) neither Parent nor the Surviving Corporation will be
required to pay an annual premium for that insurance in excess of three times
the annual premium relating to the year during which this Agreement is executed,
but if they are not able to maintain the required insurance for an annual
premium for that amount, they will purchase as much coverage as it can obtain
for that amount.
9.3 THIRD PARTY BENEFICIARIES. Except as specifically provided in
Section 9.2, this Agreement is not intended to confer upon any other Person any
rights or remedies hereunder.
9.4 ACCESS TO PROPERTIES, BOOKS AND RECORDS. From the date of this
Agreement until the Effective Time, the Company will, and will cause each of its
Subsidiaries to, upon the reasonable request of Parent, give representatives of
Parent full access during normal business hours to all of their respective
properties, books and records. Until the Effective Time, Parent will, and will
cause its representatives to, hold all information it receives as a result of
its access to the properties, books and records of the Company or its
Subsidiaries in confidence, except to the extent that information (i) is or
becomes available to the public (other than through a breach of this Agreement),
(ii) becomes available to Parent or a Subsidiary from a third party which,
insofar as Parent is aware, is not under an obligation to the Company, or to a
Subsidiary of the Company, to keep the information confidential, (iii) was known
to Parent or a Subsidiary before it was made available to Parent or its
representative by the Company or a Subsidiary, (iv) otherwise is independently
developed by Parent or a Subsidiary, or (v) Parent reasonably believes, based on
the advice of independent counsel, is required to be included in the Offer
Documents or, if applicable, the Proxy Statement or the Information Statement.
If this Agreement is terminated prior to the Effective Time, Parent will, at the
request of the Company, deliver to the Company all documents and other material
obtained by Parent from the Company or a Subsidiary in connection with the
transactions which are the subject of this Agreement or evidence that such
material has been destroyed by Parent.
9.5 PRESS RELEASES. The initial press release with respect to the Offer
and the Merger shall be a joint press release. Thereafter, the Company and
Parent will consult with each other before issuing any press release or
otherwise making any public statement with respect to this Agreement, the Offer
or the Merger, except that nothing in this Section will prevent either
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party from making any statement when and as required by law or by the rules of
any securities exchange or securities quotation or trading system on which
securities of that party or an affiliate are listed, quoted or traded.
9.6 ENTIRE AGREEMENT. This Agreement and the documents to be delivered
in accordance with this Agreement contain the entire agreement among the
Company, Parent and Acquisition relating to the transactions which are the
subject of this Agreement and those other documents, all prior negotiations,
understandings and agreements between the Company and either Parent or
Acquisition are superseded by this Agreement and those other documents, and
there are no representations, warranties, understandings or agreements
concerning the transactions which are the subject of this Agreement or those
other documents other than those expressly set forth in this Agreement or those
other documents.
9.7 CAPTIONS. The captions of the articles and paragraphs of this
Agreement are for reference only, and do not affect the meaning or
interpretation of this Agreement.
9.8 PROHIBITION AGAINST ASSIGNMENT. Neither this Agreement nor any
right of any party under it may be assigned.
9.9 DEFINITIONS. As used in this Agreement unless the context requires
otherwise:
(a) "affiliate" means any Person directly or indirectly
controlling, controlled by or under common control with such other Person at the
time at which the determination of affiliation is being made. The term "control"
(including, with correlative meanings, the term "controlled by" or "under common
control with"), as applied to any Person, means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of such person, whether through the ownership of voting securities or
other ownership interest, by contract or otherwise.
(b) "Business Day" means any day on which banks are not
required or authorized to close in the City of New York.
(c) "Code" means the Internal Revenue Code of 1986, as
amended or replaced and as in effect from time to time.
(d) "Person" means an individual, corporation,
partnership, limited liability company, association, trust, unincorporated
organization, entity or group (as defined in Section 13(d)(3) of the Exchange
Act).
(e) "Subsidiary" when used with respect to any Person
means any corporation or other organization, whether incorporated or
unincorporated, (i) of which such Person or any other Subsidiary of such Person
is a general partner (excluding partnerships, the general partnership interests
of which held by such Person or any of its Subsidiaries of such Person do not
have a majority of the voting and economic interests in such partnership) or
(ii) at least a majority of the securities or other interests of which having by
their terms ordinary voting power to elect a majority of the Board of Directors
or others performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such
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Person or by any one or more of its Subsidiaries, or by such Person and one or
more of its Subsidiaries.
9.10 NOTICES AND OTHER COMMUNICATIONS. Any notice or other
communication under this Agreement must be in writing and will be deemed given
when it is delivered in person or sent by facsimile (with proof of receipt at
the number to which it is required to be sent), on the Business Day after the
day on which it is sent by a major nationwide overnight delivery service, or on
the third Business Day after the day on which it is mailed by first class mail
from within the United States, to the following addresses (or such other address
as may be specified after the date of this Agreement by the party to which the
notice or communication is sent):
If to Parent or Acquisition:
Technical Olympic USA, Inc.
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxxx
Xxxxxx & Xxxxxx L.L.P.
2300 First City Tower
0000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
If to the Company:
Xxxxx Homes, Inc.
000 X.X. 00xx Xxxxxx
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxxxxxxx
Xxxxxxxxx Traurig, LLP
Xxx X. Xxxxxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
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9.11 GOVERNING LAW. This Agreement will be governed by, and construed
under, the substantive laws of the State of Delaware.
9.12 AMENDMENTS. This Agreement may be amended only by a document in
writing signed by both the Company and Parent.
9.13 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, some of which may be signed by fewer than all the parties or may
contain facsimile copies of pages signed by some of the parties. Each of those
counterparts will be deemed to be an original copy of this Agreement, but all of
them together will constitute one and the same agreement.
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IN WITNESS WHEREOF, Parent, the Company and Acquisition have caused
this Agreement to be signed by their respective officers thereunto duly
authorized, all as of the day shown on the first page of this Agreement.
XXXXX HOMES, INC.
By: /s/ Xxxx Xxxxxxxxxx
------------------------------------
Name: Xxxx Xxxxxxxxxx
Title: President
TECHNICAL OLYMPIC USA, INC.
By: /s/ Xxxxxxxxxxx Stengos
------------------------------------
Name: Xxxxxxxxxxx Stengos
Title: President
HELIOS ACQUISITION CORP.
By: /s/ Xxxxxxxxxxx Stengos
------------------------------------
Name: Xxxxxxxxxxx Stengos
Title: President
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ANNEX A
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, and subject to the
terms and conditions of the Agreement, Acquisition shall not be obligated to
accept for payment any shares of Company Common Stock until the expiration of
any waiting periods applicable under the HSR Act and Acquisition shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC (including Rule 14e-1(c) promulgated under the Exchange
Act) pay for, and may delay the acceptance for payment of or payment for, any
shares of Company Common Stock tendered in the Offer if, (i) immediately prior
to the expiration of the Offer (as extended in accordance with the Agreement)
the Minimum Condition shall not have been satisfied or (ii) prior to the time of
acceptance of any shares of Company Common Stock pursuant to the Offer any of
the following shall occur:
(a) there shall be threatened or pending any action,
litigation or proceeding (hereinafter, an "Action") by any governmental entity:
(i) challenging the acquisition by Parent or Acquisition of shares of Company
Common Stock or seeking to restrain or prohibit the consummation of the Offer or
the Merger; (ii) seeking to prohibit or impose any material limitation
(including any hold separate obligation) on Parent's, Acquisition's or any of
their respective affiliates' ownership or operation of all or any material
portion of the business or assets of the Company and its Subsidiaries taken as a
whole or Parent and its Subsidiaries taken as a whole; or (iii) seeking to
impose material limitations on the ability of Parent or Acquisition effectively
to acquire or hold, or to exercise full rights of ownership of, the shares of
Company Common Stock including the right to vote the shares of Company Common
Stock purchased by them on an equal basis with all other shares of Company
Common Stock on all matters properly presented to the shareholders of the
Company;
(b) any statute, rule, regulation, order or injunction
shall be enacted, promulgated, entered, enforced or deemed to or become
applicable to the Agreement, the Offer, or the Merger, or a Required Regulatory
Approval shall not have been obtained or shall not be in full force and effect
or any other action shall have been taken, by any court or other governmental
entity, that, in such case, could reasonably be expected to result in any of the
effects of, or have any of the consequences sought to be obtained or achieved
in, any Action referred to in clauses (i) through (iii) of paragraph (a) above;
(c) (i) any of the representations and warranties of the
Company contained in the Agreement is not complete and accurate, individually or
in the aggregate with the other representations and warranties of the Company
contained in the Agreement, without regard to any qualification or limitation
contained in or related to any such representation or warranty relating to
materiality or to Material Adverse Effect, in a manner that has, or could
reasonably be expected to have, a Material Adverse Effect on the Company, as if
such representations and warranties were made as of such time on or after the
date of the Agreement (except to the extent that such representations and
warranties speak as of a specific date, in which case such representations and
warranties shall not be so complete and accurate in a manner that has, or could
reasonably be expected to have, a Material Adverse Effect on the Company as of
such specific date); or (ii) any of the representations and warranties contained
in Section 3.1(f) or
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Section 3.1(h) are not complete and accurate in all material respects as of such
time on or after the date of the Agreement; provided that for the purposes of
this provision, the representations and warranties contained in Section 3.1(h)
shall be deemed complete and accurate in all material respects if they are
complete and accurate in all material respects with respect to the Significant
Subsidiaries listed on Schedule 6.1-E, (iii) the Company has breached in any
material respect any covenant or agreement contained in the Agreement and has
not cured that breach within ten Business Days after written notice from Parent
or prior to the expiration of the Offer, if earlier, or (iv) any change or event
shall have occurred that has, or could reasonably be expected to have, a
Material Adverse Effect on the Company;
(d) there shall have occurred (i) any general suspension
of trading in, or limitation on prices for, securities on the New York Stock
Exchange or the National Association of Securities Dealers Automated Quotation;
(ii) a declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States or a member state of the European Union;
(iii) any limitation (whether or not mandatory) by any governmental entity on
the extension of credit by banks or other lending institutions; (iv) a
suspension of, or limitation on, the currency exchange markets or the imposition
of, or material changes in, any currency or exchange control laws in the United
States or abroad; (v) a commencement of a war or armed hostilities or other
national or international calamity directly or indirectly involving the United
States or a member state of the European Union; or (vi) in the case of any of
the foregoing existing at the time of the commencement of the Offer, a material
acceleration or a worsening thereof;
(e) the Company Board (or any special committee thereof)
shall have withdrawn, modified or changed in any manner adverse to Parent or
Acquisition its approval or recommendation of the Offer, the Merger or the
Agreement or resolved to do any of the foregoing;
(f) the Company shall have entered into or shall have
publicly announced its intention to enter into, an agreement or agreement in
principle with respect to any Acquisition Proposal or the Company Board shall
have resolved to do any of the foregoing;
(g) any Person, other than Parent or any of its
affiliates, shall have acquired or entered into a definitive agreement or
agreement in principle to acquire beneficial ownership (determined for the
purposes of this paragraph as set forth in Rule 13d-3 promulgated under the
Exchange Act) of 50% or more of the then outstanding shares of Company Common
Stock, or shall have been granted any option, right or warrant, conditional or
otherwise, to acquire beneficial ownership of 50% or more of the then
outstanding shares of Company Common Stock; or
(h) the Agreement shall have been terminated in accordance
with its terms.
The conditions set forth in clauses (a) through (h) are for the sole
benefit of Parent and Acquisition and may be asserted by Parent and Acquisition
regardless of the circumstances giving rise to such condition and may be waived
by Parent and Acquisition in whole or in part at any time and from time to time,
by express and specific action to that effect, in their sole discretion. The
failure by Parent or Acquisition at any time to exercise any of the foregoing
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rights shall not be deemed a waiver of any such right, the waiver of any such
right with respect to particular facts and other circumstances shall not be
deemed a waiver with respect to any other facts and circumstances, and each such
right shall be deemed an ongoing right that may be asserted at any time and from
time to time.
The capitalized terms used in this Annex A shall have the meanings set
forth in the Agreement to which it is annexed, except that the term "the
Agreement" shall be deemed to refer to the attached Agreement.
3
