1
Exhibit 2.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
dated as of December 30, 1995,
among
AMRE, Inc.
AMRE-Congressional Acquisition, Inc.
Congressional Construction Corporation
and, for the limited purposes set forth herein,
the Shareholders that are signatories hereto.
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TABLE OF CONTENTS
Page
AGREEMENT AND PLAN OF MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1 THE MERGER, EFFECTIVE TIME, EXCHANGE AMOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Effect of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Consummation of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Articles of Incorporation; Bylaws; Directors and Officers . . . . . . . . . . . . . . . . . . . . . 2
1.5 Conversion of Company Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.6 Exchange of Certificates Representing Company Stock . . . . . . . . . . . . . . . . . . . . . . . . 4
1.7 Adjustment of Exchange Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF AMRE AND
MERGER SUB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1 Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.3 No Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.4 Consents; Effect of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.5 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.6 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.7 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.8 Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.9 Environmental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.10 Ownership, Quality and Location of Material Assets . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.11 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.12 Continuity of Business Enterprise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND
THE SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.1 Organization, Qualification and Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.2 Authorized Capitalization of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.3 HSR Applicability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.4 Owned Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.5 Consents; Effect of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.6 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.7 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.8 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.9 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.10 Environmental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.11 Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.12 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.13 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.14 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.15 Patents, Trademarks, Franchises, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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3.16 Loans, Notes, Accounts Receivable and Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . 22
3.17 Corporate Documents, Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.18 Absence of Sensitive Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.19 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.20 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.21 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.22 Transactions with Related Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.23 Directors and Officers; Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.24 Ownership, Quality and Location of Material Assets . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.25 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.26 No Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.27 Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.28 Shareholder Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.29 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.30 Dividend Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 4 CONDUCT OF BUSINESS PENDING THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.1 Conduct of Business by the Company Pending the Merger. . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 5 ADDITIONAL COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.1 Registration Statement and Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.2 Letter to the Company's Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.3 Company Board Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.4 Consent of Shareholders of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.5 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.6 Additional Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.7 No Shopping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.8 Notification of Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.9 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.10 Information for Other Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.11 Sub-License Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.12 Affiliate Letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.13 Pooling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.14 Listing Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.15 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.16 Operation of the Company's Business Following the Effective Date . . . . . . . . . . . . . . . . . . 34
ARTICLE 6 CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.1 Conditions to Obligation of Each Party to Effect the Merger . . . . . . . . . . . . . . . . . . . . 35
6.2 Additional Conditions to the Obligation of the Company . . . . . . . . . . . . . . . . . . . . . . . 36
6.3 Additional Conditions to the Obligations of AMRE and Merger Sub. . . . . . . . . . . . . . . . . . . 38
ARTICLE 7 TERMINATION, AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.3 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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ARTICLE 8 GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.2 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.3 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.4 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.5 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.6 CHOICE OF LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.7 Jurisdiction and Venue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.9 Complete Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.10 Binding Effect; Benefit; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.11 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.12 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
AGREEMENT AND PLAN OF MERGER SIGNATURE PAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
EXHIBITS
A. Articles of Incorporation of the Company
B. Bylaws of the Company
C. Form of Sub-License Agreement
D Form of Affiliate Letter
E. Form of Employment Agreement
SCHEDULES
1.4 Directors and Officers of Merger Sub
2.4 Conflicts with AMRE Material Agreements
2.5 Other AMRE Liabilities
2.6 Absence of AMRE Changes
2.7 Unfiled AMRE Tax Returns
2.8 AMRE Legal Proceedings
2.10 Material Assets
3.2 Options, Warrants, Etc.
3.5 Acceleration
3.6(d) Other Company Liabilities
3.7 Absence of Company Changes
3.8 Unfiled Company Tax Returns
3.9 Real Property
3.11 Personal Property
3.12 Contracts
3.13 Legal Proceedings
3.14 Labor Matters
3.15 Intellectual Property
3.19 Insurance
3.20 Payroll Register and Employment Contracts
3.21 Company Benefit Plans
3.22 Affiliated Party Transactions
3.23 Directors, Officers and Bank Accounts
3.24 Material Assets
3.27 Permits
3.30 Dividends
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "AGREEMENT"), dated as of
December 30, 1995, by and among AMRE, Inc., a Delaware corporation ("AMRE"),
AMRE- Congressional Acquisition, Inc., a Delaware corporation and a newly
formed, wholly owned subsidiary of AMRE ("MERGER SUB"), Congressional
Construction Corporation, a Virginia corporation (the "COMPANY") and, for the
limited purposes of Article 3, Article 5, and Article 8, the shareholders of
the Company that are signatories hereto (the "SHAREHOLDERS"). The Company and
Merger Sub are hereinafter collectively referred to as the "CONSTITUENT
CORPORATIONS."
PRELIMINARY STATEMENTS
A. AMRE, as the sole stockholder of Merger Sub, and the
respective Boards of Directors of Merger Sub and the Company, have each
approved the execution of this Agreement which provides for, among other
things, the merger of Merger Sub into the Company in accordance with the
Virginia Stock Corporation Act (the "VIRGINIA LAW"), Delaware General
Corporation Law (the "DELAWARE LAW"), and the provisions of this Agreement.
The Board of Directors of the Company has directed that the Merger, as
hereinafter defined, be submitted for approval by the Company's shareholders.
B. It is intended that for federal income tax purposes the Merger
provided for herein shall qualify as a reorganization within the meaning of
Section 368(a)(1)(A) by reason of Section 368(a)(2)(E) of the Internal Revenue
Code of 1986, as amended (the "CODE"). The parties expect that the Merger will
further certain of their business objectives.
C. It is intended that the Merger be treated as a "pooling of
interests" for accounting purposes.
D. It is understood and agreed that following the Merger and in
connection with the implementation of employee benefits for employees of the
Surviving Corporation (as defined below), it is the intention of AMRE to
terminate, or cause to be terminated, the Congressional Construction
Corporation Employee Stock Ownership Plan and Trust (the "ESOP").
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and for other good, valid and binding consideration,
the receipt and sufficiency of which are hereby acknowledged, AMRE, Merger Sub,
the Company and, for the limited purposes of Article 3, Article 5, and Article
8, the Shareholders, intending to be legally bound, hereby agree as follows:
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STATEMENT OF AGREEMENT
ARTICLE 1
THE MERGER, EFFECTIVE TIME, EXCHANGE AMOUNT
1.1 The Merger. At the Effective Time (as defined in Section 1.3
hereof), in accordance with this Agreement, the Virginia Law and the Delaware
Law, Merger Sub shall be merged (such merger being herein referred to as the
"MERGER") with and into the Company, the separate existence of Merger Sub shall
cease, and the Company shall continue as the surviving corporation. The
Company hereinafter sometimes is referred to as the "SURVIVING CORPORATION."
1.2 Effect of the Merger. When the Merger has been effected, the
Surviving Corporation shall thereupon and thereafter possess all of the public
and private rights, privileges, powers and franchises and be subject to all the
restrictions, disabilities and duties of each of the Constituent Corporations;
all and each of the rights, privileges, powers and franchises of each of the
Constituent Corporations and all property, real, personal and mixed, and all
debts due to either of the Constituent Corporations on whatever account. All
other things belonging to each of such corporations shall be vested in the
Surviving Corporation and all property, rights, privileges, powers and
franchises, and all and every other interest shall be thereafter as effectually
as possible the property of the Surviving Corporation. Title to any real
estate vested by deed or otherwise, in either Constituent Corporation, shall
not revert or be in any way impaired by reason of the Merger. All rights of
creditors and all liens upon any property of any of the Constituent
Corporations shall be preserved unimpaired. All debts, liabilities and duties
of the respective Constituent Corporations shall thenceforth attach to the
Surviving Corporation, and may be enforced against it to the same extent as if
such debts, liabilities and duties had been incurred or contracted by it.
1.3 Consummation of the Merger. As soon as is practicable after
the satisfaction or waiver of the conditions set forth in Article 6 hereof and
provided that this Agreement shall not have been terminated as provided in
Article 7, the parties hereto will cause the Merger to be consummated by filing
with the State Corporation Commission of Virginia (the "VIRGINIA COMMISSION")
articles of merger in such form as required by, and executed in accordance
with, the relevant provisions of the Virginia Law and by filing with the
Secretary of State of Delaware a certificate of merger in such form as required
by, and executed in accordance with, the relevant provisions of the Delaware
Law (the latest of (i) the later of the time of such filings, (ii) the issuance
of a certificate of merger by the Virginia Commission and (iii) the effective
time set forth in such filings being the "EFFECTIVE TIME" and the date of the
Effective Time being the "EFFECTIVE DATE").
1.4 Articles of Incorporation; Bylaws; Directors and Officers.
The Articles of Incorporation and bylaws of the Surviving Corporation shall be
the Articles of Incorporation and bylaws of the Company as in effect
immediately prior to the Effective Time. Such documents shall be amended and
restated immediately after the Effective Time as approved by the sole
shareholder of the Surviving Corporation. The directors of Merger Sub
immediately prior to the Effective Time will be the initial directors of the
Surviving Corporation and shall serve until their successors have been duly
elected or appointed and qualified or until their earlier death,
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resignation or removal in accordance with the Surviving Corporation's Articles
of Incorporation and bylaws (as so amended) and the Virginia Law. The officers
of Merger Sub immediately prior to the Effective Time will be the initial
officers of the Surviving Corporation and shall serve until their successors
have been duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the Surviving Corporation's Articles
of Incorporation and bylaws and the Virginia Law. It is the current intention
of AMRE and Merger Sub that the directors and officers of Merger Sub
immediately prior to the Effective Time shall be those persons identified on
Schedule 1.4 hereto.
1.5 Conversion of Company Stock. At the Effective Time, by virtue
of the Merger and without any action on the part of AMRE, Merger Sub, the
Company, the holders of any of the shares (the "COMMON SHARES") of common
stock, par value $1.00 per share of the Company (the "COMPANY COMMON STOCK"),
or the holders of any of the shares (the "PREFERRED SHARES" and together with
the Common Shares, the "SHARES") of convertible preferred stock, without par
value, of the Company (the "COMPANY PREFERRED STOCK" and together with the
Company Common Stock, the "COMPANY STOCK"):
(a) Each Common Share issued and outstanding immediately
prior to the Effective Time (other than Dissenting Shares, as
hereinafter defined, and Common Shares held in the treasury of the
Company) shall be canceled and retired and be converted into 601.20
(the "COMMON STOCK EXCHANGE AMOUNT") validly issued, fully paid and
non-assessable shares of $0.01 par value common stock of AMRE ("AMRE
COMMON STOCK").
(b) Each Preferred Share issued and outstanding
immediately prior to the Effective Time (other than Dissenting Shares
and Preferred Shares held in the Treasury of the Company) shall be
canceled and retired and be converted into 857.14 (the "PREFERRED
STOCK EXCHANGE AMOUNT") validly issued, fully paid and non-assessable
shares of $.01 par value AMRE Common Stock.
(c) Each Share which is issued and outstanding
immediately prior to the Effective Time and which is held in the
treasury of the Company shall be canceled and retired, and no payment
shall be made with respect thereto.
(d) No fractional shares of AMRE Common Stock shall be
issued in connection with the Merger. In lieu thereof, one additional
share of AMRE Common Stock will be issued for any fractional share
that would have otherwise been issued.
(e) Notwithstanding anything in this Agreement to the
contrary, Shares which are outstanding immediately prior to the
Effective Time and which are held by shareholders of the Company who
shall (i) not have consented to the adoption of this Agreement and the
approval of the Merger, (ii) have delivered a written notice of intent
to demand payment for such Shares in the manner provided in Section
13.1-733 of the Virginia Law ("DISSENTING SHARES") and (iii) have
complied with the provisions of Section 13.1-735 of the Virginia Law
shall not be converted into or be exchangeable for the right to
receive the payment to be paid for each Share converted pursuant to
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Section 1.5(a) or Section 1.5(b) hereof, as applicable, but the
holders thereof shall be entitled to payment of the fair value of such
shares in accordance with the provisions of Article 15 of the Virginia
Law; provided, however, that (i) if any holder of Dissenting Shares
withdraws the demand for an appraisal and the Surviving Corporation
accepts such withdrawal, (ii) if the Merger is abandoned, or (iii) if
no demand or petition for an appraisal by a court is made or filed
within the statutory time periods, or (iv) if a court determines the
holder is not entitled to payment, such holder or holders (as the case
may be) shall forfeit the right to appraisal of such shares, and such
shares shall thereupon be deemed to have become exchangeable for, as
of the Effective Time, the right to receive the payment to be paid for
each Share converted pursuant to Section 1.5(a) or Section 1.5(b)
hereof, as applicable; except that, in the case of (ii) directly
above, holders of such dissenting shares shall have no rights
whatsoever under this Agreement. The Surviving Corporation shall
assume the obligation, if any, to pay the fair value of any Shares as
to which the holders thereof have perfected dissenters rights under
Article 15 of the Virginia Law.
(f) As a result of the Merger and without action on the
part of the holder thereof, all Shares shall cease to be outstanding
and shall be canceled and returned and shall cease to exist, and each
holder of a certificate formerly representing any Shares of Company
Stock (a "CERTIFICATE") shall thereafter cease to have any rights with
respect to such Shares except the right to receive, without interest,
certificates representing AMRE Common Stock or cash pursuant to
Section 1.5(e) upon the surrender of such Certificates, and each ESOP
Plan participant with an allocation of any Preferred Shares shall
thereafter cease to have any rights with respect to such Preferred
Shares except whatever rights such participants shall have in the
shares of AMRE Common Stock issued in exchange therefor by virtue of
being participants in the ESOP.
1.6 Exchange of Certificates Representing Company Stock.
(a) As of the Effective Time, AMRE shall deposit, or
shall cause to be deposited with AMRE's Transfer Agent (the "EXCHANGE
AGENT") for the benefit of the holders of the Shares of Company Stock,
for exchange in accordance with this Article 1, certificates
representing the shares of AMRE's Common Stock to be issued in
exchange for the Shares of Company Stock. AMRE shall pay all charges
and expenses of the Exchange Agent.
(b) Promptly after the Effective Time, AMRE shall cause
the Exchange Agent to mail to each holder of record of Shares of
Company Stock (i) a letter of transmittal which shall specify that
delivery shall be effective, and risk of loss and title to such Shares
shall pass, only upon delivery of the Certificates to the Exchange
Agent and which shall be in such form and have such other provisions
as AMRE or the Exchange Agent may reasonably specify and (ii)
instructions for use in affecting the surrender of such Certificates
in exchange for certificates representing shares of AMRE Common Stock.
Upon surrender of a Certificate for cancellation to the Exchange Agent
together with such letter of transmittal, duly executed and completed,
in accordance with the instructions thereto, the holder of the Shares
of Company Stock represented by such Certificate shall be entitled to
receive in exchange therefor a certificate representing that
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number of shares of AMRE Common Stock determined pursuant to Section
1.5(a), 1.5(b) or 1.5(d) above, as applicable, and the Certificate so
surrendered shall be canceled. In the event of a transfer of
ownership of Company Stock which is not registered in the transfer
records of the Company, a certificate representing the proper number
of shares of AMRE Common Stock may be issued to such a transferee if
the Certificate representing such Company Stock is presented to the
Exchange Agent, accompanied by all documents required to evidence and
effect such transfer and to evidence that any applicable stock
transfer taxes have been paid.
(c) Notwithstanding any other provisions of this
Agreement, no dividends or other distributions declared after the
Effective Time on AMRE Common Stock shall be paid with respect to any
of the Shares of Company Stock until such Certificate representing
those Shares is surrendered for exchange as provided herein. Subject
to the effect of applicable laws, following surrender of any such
Certificate, there shall be paid to the holder of the certificates
representing shares of AMRE Common Stock issued in exchange therefor,
without interest, (i) at the time of such surrender, the amount of
dividends or other distributions with a record date after the
Effective Time theretofore payable with respect to such shares of AMRE
Common Stock and not paid, less the amount of any withholding taxes
which may be required thereon, and (ii) at the appropriate payment
date, the amount of dividends or other distributions with a record
date after the Effective Time but prior to surrender and with a
payment date subsequent to surrender payable with respect to such
shares of AMRE Common Stock, less the amount of any withholding taxes
which may be required thereon.
(d) At or after the Effective Time, there shall be no
transfers on the stock transfer books of the Company of the Shares of
Company Stock which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are
presented to the Company, such Certificates shall be canceled and
exchanged for certificates of shares of AMRE Common Stock deliverable
in respect thereof pursuant to this Agreement in accordance with the
procedures set forth in this Section 1.6. Certificates surrendered
for exchange by any person constituting an "affiliate" of the Company
for purposes of Rule 145(c) under the Securities Act of 1933, as
amended (the "SECURITIES ACT"), shall not be exchanged until AMRE has
received the executed letter from such person as provided in Section
5.12 below.
(e) None of AMRE, the Company, the Exchange Agent or any
other person shall be liable to any former holder of Shares of Company
Stock for any amount properly delivered to a public official pursuant
to applicable abandoned property, escheat or similar laws.
(f) In the event any Certificate representing Shares of
Company Stock 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 AMRE,
the posting by such person of a bond in such reasonable amount as AMRE
may direct as indemnity against any claim that may be made against it
with respect to such certificate, the Exchange Agent will issue in
exchange for such lost, stolen or destroyed Certificate the shares of
AMRE Common Stock and unpaid dividends and distributions
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on shares of AMRE Common Stock deliverable in respect thereof pursuant
to this Agreement.
1.7 Adjustment of Exchange Amount. In the event that, subsequent
to the date of this Agreement but prior to the Effective Time, the outstanding
shares of AMRE Common Stock, Company Preferred Stock or Company Common Stock,
respectively, shall have been changed into a different number of shares or a
different class as a result of a stock split, reverse stock split, stock
dividend, subdivision, reclassification, split, combination, exchange,
recapitalization or other similar transaction, the Common Stock Exchange Amount
and/or the Preferred Stock Exchange Amount, as applicable, shall be
appropriately adjusted.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF
AMRE AND MERGER SUB
AMRE and Merger Sub jointly and severally represent and warrant to the
Company and the Shareholders the following:
2.1 Organization and Qualification. Each of AMRE and Merger Sub
is a Delaware corporation duly organized, validly existing and in good standing
under Delaware law and has the requisite corporate power and authority to own,
operate and lease its properties and to carry on its business as now conducted.
AMRE is duly qualified as a foreign corporation to do business, and is in good
standing, in each jurisdiction where the character of its properties owned or
leased or the nature of its activities make such qualification necessary.
However, the failure to be so qualified or in good standing in any given
jurisdiction will not be deemed to be a breach of this Section 2.1 unless the
failure of AMRE to be in good standing in any such jurisdiction individually or
in all such jurisdictions collectively has or is likely to have a material
adverse effect upon the business operations, assets, liabilities or financial
condition of (a "MATERIAL ADVERSE EFFECT") AMRE or on the transactions
contemplated herein.
2.2 Authority. Each of AMRE and Merger Sub has the requisite
corporate power and authority to enter into this Agreement and to perform its
obligations hereunder. The execution and delivery of this Agreement by AMRE
and Merger Sub and the consummation by AMRE and Merger Sub of the transactions
contemplated hereby have been duly authorized by the Boards of Directors of
AMRE and Merger Sub and by AMRE as the sole stockholder of Merger Sub as of the
date of this Agreement, and no other corporate proceedings on the part of AMRE
or Merger Sub are necessary to authorize this Agreement and the transactions
contemplated hereby, except for any corporate action or proceedings which may
be necessary to amend the Certificate of Incorporation of AMRE to authorize the
issuance of additional shares of AMRE Common Stock and the approval of this
Agreement and the transactions contemplated hereby by the holders of a majority
of the outstanding AMRE Common Stock. This Agreement has been duly executed
and delivered by AMRE and Merger Sub and (assuming that it has been duly
executed and delivered by the Company and the Shareholders) constitutes a
legal, valid and binding obligation of each such company, enforceable against
each such company in accordance with its terms except as enforcement thereof
may be limited by liquidation, conservatorship, bankruptcy,
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insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally from time to time in effect and
except that equitable remedies are subject to judicial discretion.
2.3 No Brokers. AMRE and Merger Sub represent and warrant that no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the Merger based upon arrangements
made by or on behalf of AMRE or Merger Sub.
2.4 Consents; Effect of Agreement. Other than in connection with
or in compliance with (i) the provisions of the Delaware Law, (ii) the filing
with the Securities and Exchange Commission (the "SEC") of such reports as may
be required under Section 13 of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT") and the Securities Act and (iii) "Blue Sky" approvals and
permits, no notice to, filing with, or authorization, consent or approval of,
any third party, judicial, governmental or other public body or authority is
necessary for the consummation by AMRE or Merger Sub of the transactions
contemplated by this Agreement which will not have been obtained prior to the
Effective Time, except where failures to give such notices, make such filings,
or obtain authorizations, consents or approvals would, in the aggregate, not
have a Material Adverse Effect on AMRE, Merger Sub or the transactions
contemplated herein. Except as set forth in Schedule 2.4, neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will conflict with, violate or result in a
breach of (i) any material agreement to which either AMRE or Merger Sub is a
party; (ii) any provision of the charter documents or bylaws of AMRE or Merger
Sub; or (iii) any material law, rule, regulation or ordinance applicable to
AMRE or Merger Sub.
2.5 Financial Statements.
(a) AMRE and Merger Sub have delivered to the Company and
the Shareholders or their representatives audited consolidated
financial statements of AMRE as of December 31, 1994, and for the year
then ended, including, without limitation, a statement of operations
and changes in stockholders' equity, balance sheet, statement of cash
flows, and all notes relating thereto (the "1994 AMRE FINANCIAL
STATEMENTS") which have been audited by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, the
independent public accountants of AMRE.
(b) AMRE has also delivered to the Company and the
Shareholders or their representatives unaudited consolidated financial
statements of AMRE as of October 1, 1995, and for the 9-month period
then ended, consisting of a balance sheet and statement of operations
(the "AMRE INTERIM FINANCIAL STATEMENTS"), certified by the chief
financial officer of AMRE.
(c) The 1994 AMRE Financial Statements and the AMRE
Interim Financial Statements, which are collectively referred to
herein as "AMRE FINANCIAL STATEMENTS" (which statements may be in
Quarterly Reports on Form 10-Q or Annual Reports on Form 10-K, as
appropriate), (i) are in accordance with the books and records of
AMRE; and (ii) except as set forth therein (including the notes
thereto), fairly present in accordance with generally accepted
accounting principles, the financial position and
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results of operations of AMRE as of and for the periods indicated,
except for the lack of notes to the AMRE Interim Financial Statements,
consistently applied throughout the periods involved.
(d) There are no liabilities of the kind required by
generally accepted accounting principles to be reflected, noted or
reserved against on the balance sheets of AMRE as of December 31, 1994
and October 1, 1995, except those which have been reflected, noted or
reserved against in the AMRE Financial Statements. Except as set
forth in the preliminary proxy materials filed pursuant to Section
14(a) of the Exchange Act by AMRE on December 22, 1995 with the SEC
and the AMRE SEC filings incorporated therein by reference
(collectively, the "PROXY STATEMENT") or as incurred in the ordinary
course of business since October 1, 1995, AMRE has no material
liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) that would be required to be reflected on or
reserved against, in a balance sheet of AMRE or in the notes thereto
prepared in accordance with generally accepted accounting principles
consistently applied. Except as set forth in Schedule 2.5, all
liabilities of AMRE can be prepaid without penalty at any time.
2.6 Absence of Certain Changes or Events. Except as disclosed in
the Proxy Statement or on Schedule 2.6, since September 30, 1995, AMRE has
conducted its business only in the ordinary course of business and:
(a) There has not been any Material Adverse Effect on
AMRE;
(b) There has not been any damage, destruction or loss to
any material asset of AMRE, whether or not covered by insurance; and
(c) There has not been any material change in the
operation of the business of or any material transactions entered
into, except such changes and transactions occurring in the ordinary
course of business and not otherwise required to be disclosed pursuant
to this section, or those occurring in contemplation of this Agreement
and the effectuation thereof.
2.7 Taxes. Except as disclosed in the Proxy Statement or in
Schedule 2.7 hereto, AMRE has timely filed or caused to be timely filed
(including allowable extensions) all federal, state, local, foreign and other
tax returns for income taxes, sales taxes, withholding taxes, employment taxes,
property taxes, franchise taxes and all other taxes of every kind whatsoever
which are required by law to have been filed. All of the tax returns that have
been filed accurately reflect in all material respects the facts regarding the
income, deduction, credits, assets, operations, activities and all other
matters and information required to be shown thereon. AMRE has paid or caused
to be paid all taxes, assessments, fees, penalties and other governmental
charges which were shown to be due pursuant to said returns. All other
material taxes and related assessments, fees, penalties and other governmental
charges which have become due and payable have been paid. The provisions for
income and other taxes reflected in the balance sheet included in the AMRE
Financial Statements make adequate provision for all accrued and unpaid taxes
of AMRE, whether or not disputed, and AMRE has made and will continue to make
adequate provision for such taxes on its books and records, including any taxes
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arising from the transactions contemplated by this Agreement; provided however,
no provision has been made or will be made in the AMRE Financial Statements or
the Subsequent Company Financials for any taxes resulting from any tax election
made by the Surviving Corporation subsequent to the Effective Time. Except as
set forth in Schedule 2.7, AMRE is not party to any action or proceeding
pending or, to the best knowledge of AMRE, threatened by any governmental
authority for assessment or collection of taxes; no unresolved claim for
assessment or collection of such taxes has been asserted against AMRE, and, to
the best knowledge of AMRE, no audit or investigation by state or local
government authorities is under way that would have a Material Adverse Effect
on AMRE.
2.8 Legal Proceedings. Except as disclosed in the Proxy Statement
or set forth in Schedule 2.8, there are no claims, actions, suits,
arbitrations, grievances, proceedings or investigations pending or, to the best
knowledge of AMRE, threatened against AMRE or its subsidiaries, at law, in
equity, or before any federal, state, municipal or other governmental or
nongovernmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, and there are no outstanding or
unsatisfied judgments, orders, decrees or stipulations to which AMRE is a
party, which involve the transactions contemplated herein or which, if
adversely decided, would have a Material Adverse Effect upon AMRE. AMRE is not
in violation of or in default with respect to any applicable judgment, order,
writ, injunction or decree, the violation of which would have a Material
Adverse Effect on AMRE.
2.9 Environmental.
(a) Except as disclosed in the Proxy Statement, to the
best of AMRE'S knowledge, AMRE has not used, stored, treated,
transported, manufactured, handled, produced or disposed of any
Hazardous Materials (as defined hereafter) on, under, at, from, or in
any way affecting any of the owned, leased or operated properties or
assets of AMRE, or otherwise, in any manner which violated any
applicable Environmental Law (as defined hereafter).
(b) Except as disclosed in the Proxy Statement, there
have been no Releases (as defined hereafter) of any Hazardous Material
by AMRE on, under, at, from or in any way affecting any property
owned, leased or operated by AMRE.
(c) Except as disclosed in the Proxy Statement, to the
best of AMRE'S knowledge, AMRE is in material compliance with all
applicable Environmental Laws, and AMRE has not received any
communication, written or oral, that alleges that AMRE is not in
compliance with applicable Environmental Laws.
(d) To the best of AMRE'S knowledge, AMRE does not have
any material liabilities, assessed and, no pending claims have been
received by AMRE and at present no outstanding citations or notices
have been received by AMRE which in the case of any of the foregoing
have been or are imposed by reason of or based upon any provision of
any applicable Environmental Laws, including, but not limited to, any
such liabilities relating to or arising out of or attributable, in
whole or in part, to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, presence or handling of any
Hazardous Materials by AMRE.
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(e) There are no proceedings by any governmental
authority or third party pending regarding pollution or protection of
human health or the environment to which AMRE is a party, nor are
there any decrees, or orders, or other administrative or judicial
requirements, outstanding under any Environmental Law with respect to
AMRE.
(f) To the best of AMRE's knowledge the real property
currently used, owned or leased by AMRE contains no underground
storage tanks, or underground piping associated with underground
storage tanks.
(g) To the best of AMRE'S knowledge, AMRE has obtained
and is in material compliance with all permits, licenses and other
authorizations and has made all registrations and given all
notifications that are required under Environmental Laws, and is in
compliance with all terms and conditions of such permits, licenses and
other authorizations. No notice to, approval of or authorization or
consent from any governmental authority is necessary for the transfer
of or modification to any such permit, and the consummation of the
transaction contemplated by this Agreement will not violate, alter,
impair or invalidate, in any respect, any such permit.
(h) To the best of AMRE'S knowledge, except as previously
disclosed, there are no environmental reports, audits, investigations
or assessments of AMRE or any real or personal property or operations
which are now or have been previously owned, leased, operated or
managed by AMRE.
(i) AMRE has disclosed to the Company all relevant
material facts of which it has knowledge regarding potential or actual
environmental liabilities of AMRE.
(j) Definitions:
(1) as used herein, the term "HAZARDOUS MATERIALS"
means those chemicals, materials or substances which are
defined as or included in the definition of "hazardous
substances," "hazardous wastes," "toxic pollutants,"
"pollutants," "contaminants," or words of similar import under
any Environmental Law;
(2) the term "ENVIRONMENTAL LAWS" means all federal,
state and local laws, rules and regulations relating to
pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata), including,
without limitation, laws and regulations relating to Releases
or threatened Releases of Hazardous Materials, or otherwise
relating to the manufacture, processing, distribution, use
treatment, storage, disposal, transport or handling of
Hazardous Materials; and
(3) the term "RELEASES" means any release, spill,
emission, leaking, injection, deposit, disposal, discharge,
dispersal, leaching or migration into the atmosphere, soil
surface water, groundwater or property.
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2.10 Ownership, Quality and Location of Material Assets. AMRE does
not utilize in its business any assets not reflected in the Financial
Statements or disclosed in the Proxy Statement except for assets which have
been fully amortized or depreciated and which are owned or leased by AMRE and
franchises, licenses, trademarks and tradenames. Except as set forth in
Schedule 2.10, all properties and assets of AMRE are in the possession and
control of AMRE. As of the date hereof, except as set forth in Schedule 2.10,
no physical assets of any value are on the premises at the locations operated
by AMRE which do not belong to or are not leased by AMRE.
2.11 Full Disclosure. No material information furnished, or to be
furnished, by AMRE to the Company or its representatives in connection with
this Agreement (including, but not limited to, the Financial Statements and all
information in the Schedules hereto) is, or will be, false or misleading, and
such information includes all facts required to be stated therein or necessary
to make the statements therein not misleading. No representation or warranty
by or on behalf of AMRE contained in this Agreement, and no statement contained
in any certificate, list, exhibit, or other instrument furnished or to be
furnished to AMRE pursuant hereto contains or will contain any untrue statement
of a material fact, or omits or will omit to state any material facts which are
necessary in order to make the statement contained herein or therein, in light
of the circumstances under which they are made, not misleading. The breach of
this Section 2.11 will not result in a breach of this Agreement or any
condition or covenant herein except where such breach would have a Material
Adverse Effect on AMRE.
2.12 Continuity of Business Enterprise. AMRE and Merger Sub will
continue to operate at least one historic business line, or to use at least a
significant portion of the Company's historic business assets in a business, in
each case within the meaning of Treasury Regulation Section 1.368-1(d).
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY AND THE SHAREHOLDERS
The Company and each of the Shareholders jointly and severally
represent and warrant to AMRE and Merger Sub as follows:
3.1 Organization, Qualification and Authority.
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Virginia, and has all requisite corporate power and authority to own,
operate and lease its properties and to carry on its business as now
being conducted. The Company is duly qualified as a foreign
corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or leased or
the nature of its activities make such qualification necessary.
However, the failure to be so qualified or in good standing in any
jurisdictions will not be deemed to be a breach of this Section 3.1(a)
unless the failure of the Company to be in good standing in any such
jurisdiction individually or in all such
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jurisdictions collectively has or is likely to have a Material Adverse
Effect upon the Company or on the transactions contemplated herein.
(b) The Company has the requisite corporate and other
power and authority to enter into this Agreement and, subject to
obtaining any necessary shareholder approval of the Merger as required
by the Virginia Law or the ESOP plan document, ERISA or the Code, to
perform its obligations hereunder. The execution and delivery of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by the
Board of Directors of the Company, and no other corporate proceedings
on the part of the Company are necessary for the execution and
delivery of this Agreement by the Company, and, subject to obtaining
any necessary shareholder approval of the Merger as required by
Virginia Law, ERISA (as defined herein), the ESOP plan document, and
the Code, the consummation by the Company of the transactions
contemplated hereby. This Agreement has been duly executed and
delivered by the Company and the Shareholders (assuming that it has
been duly executed and delivered by AMRE and Merger Sub) and, subject
to obtaining any necessary shareholder approval of the Merger,
constitutes a legal, valid and binding obligation of the Company and
the Shareholders, enforceable against the Company and the Shareholders
in accordance with its terms except as enforcement thereof may be
limited by ERISA, the ESOP, the Code, liquidation, conservatorship,
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally from time to
time in effect and except that equitable remedies are subject to
judicial discretion.
3.2 Authorized Capitalization of the Company. The authorized
capital stock of the Company consists of 1,000 Shares of Company Common Stock,
and 700 Shares of Company Preferred Stock. As of December 29, 1995, there were
499 Shares Company of Common Stock and 700 Shares of Company Preferred Stock
issued and outstanding. The Company has no outstanding bonds, debentures,
notes or other obligations the holders of which have the right to vote (or
which are convertible into or exercisable for securities having the right to
vote) with the shareholders of the Company on any matter. All issued and
outstanding shares of Company Common Stock are duly authorized, validly issued,
fully paid, nonassessable and free of preemptive or rescission rights. Except
as disclosed on Schedule 3.2, (i) there are no outstanding or authorized
subscriptions, options, warrants, calls, rights (including any preemptive
rights), commitments, or other agreements of any character whatsoever which
obligate or may obligate the Company to issue or sell any additional shares of
its capital stock or any securities convertible into or evidencing the right to
subscribe for any shares of its capital stock or securities convertible into or
exchangeable for such shares; (ii) there are no outstanding or authorized stock
appreciation, phantom stock, profit participation or similar plans or contracts
or rights with respect to the Company or any of its subsidiaries which are
effective as of the date hereof or which have been executed or agreed to as of
the date hereof with an effective date after the date hereof; and (iii) there
are no shareholders' agreements, voting trusts, proxies or other agreements or
understandings with respect to the voting of the capital stock of the Company
to which the Company or any of the Shareholders is or are a party which are
presently effective or have been executed or agreed to as of the date hereof
and provide for an effective date after the date hereof or to which any officer
or director of the Company or any stockholder
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owned or controlled by such officer or director is or will be a party in
accordance with the terms hereof.
3.3 HSR Applicability. The Company does not meet the applicable
"size of person" test established under the ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended (the "HSR ACT").
3.4 Owned Interests. The Company does not own, directly or
indirectly, any interest or investment (whether equity or debt) in any
corporation, partnership, joint venture, business, trust or entity other than
investments in short term investment securities.
3.5 Consents; Effect of Agreement. The execution, delivery and
performance of this Agreement by the Company and the Shareholders and the
consummation by the Company of the transactions contemplated hereby will not
require any notice to, filing with, or the consent, approval or authorization
of any person or governmental authority, except for filings required under the
Virginia Law. Except as set forth in Schedule 3.5, neither the execution and
delivery of this Agreement nor the consummation of the transactions
contemplated hereby will (i) result in the acceleration or termination of, or
the creation in any party of the right to accelerate, terminate, modify or
cancel, any indenture, contract, lease, sublease, loan agreement, note or other
obligation or liability to which the Company is a party or is bound or to which
any of its assets are subject, (ii) conflict with, violate or result in a
breach of any provision of the charter documents or bylaws of the Company,
(iii) or to the best knowledge of the Company and the Shareholders, conflict
with or violate any law, rule, regulation, ordinance, order, writ, injunction
or decree applicable to the Company or by which any of its properties or assets
is bound or affected or (iv) conflict with or result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or result in the creation of any lien, charge or
encumbrance on any of the properties or assets of the Company pursuant to any
of the terms, conditions or provisions of any indenture, contract, lease,
sublease, loan agreement, note, permit, license, franchise, agreement or other
instrument, obligation or liability to which the Company or any Shareholder is
a party or by which the Company or any of its assets is bound or affected.
3.6 Financial Statements.
(a) The Company has delivered to AMRE and Merger Sub or
their representatives audited consolidated financial statements of the
Company as of December 31, 1994, and for the year then ended,
including, without limitation, a statement of operations and changes
in stockholders' equity (deficit), balance sheet, statement of
operations and changes in stockholders' equity, balance sheet,
statement of cash flows, and all notes relating thereto (the "1994
FINANCIAL STATEMENTS") which have been audited by Deloitte & Touche
LLP, the independent public accountants of the Company.
(b) The Company has also delivered to AMRE and Merger Sub
or their representatives unaudited consolidated financial statements
of the Company as of September 30, 1995, and for the 9-month period
then ended, consisting of a balance
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sheet and statement of operations, (the "INTERIM FINANCIAL
STATEMENTS") certified by the President of the Company .
(c) The 1994 Financial Statements and the Interim
Financial Statements (collectively, the "FINANCIAL STATEMENTS") (i)
are in accordance with the books and records of the Company, and (ii)
except as set forth therein (including the notes thereto), fairly
present in accordance with generally accepted accounting principles,
the financial position and results of operations or the Company as of
and for the periods indicated except for the lack of notes to the
Interim Financial Statements, consistently applied throughout the
periods involved.
(d) There are no liabilities of the kind required by
generally accepted accounting principles to be reflected, noted or
reserved against on the balance sheets of the Company as of December
31, 1994 and September 30, 1995, except those which have been
reflected, noted or reserved against in the Financial Statements or
except as are disclosed in Schedule 3.6(d). Except as set forth in
Schedule 3.6(d), or as incurred in the ordinary course of business,
the Company has no material liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) that would be
required to be reflected on or reserved against, in a balance sheet of
the Company or in the notes thereto prepared in accordance with
generally accepted accounting principles consistently applied. Except
as set forth in Schedule 3.6(d), all liabilities of the Company can be
prepaid without penalty at any time.
(e) Except for the reserves applicable thereto, the notes
and accounts receivable of the Company included on the Interim
Financial Statements, other than those collected prior to the
Effective Time, will, as of the Effective Time, constitute valid and
collectible receivables and are not subject to any defense or setoff.
3.7 Absence of Certain Changes or Events. Except as disclosed in
Schedule 3.7, since September 30, 1995, the Company has conducted its business
only in the ordinary course of business, and:
(a) the Company has not incurred any obligation or
liability in excess of $20,000 (contingent or otherwise), except
current liabilities incurred in the ordinary course of business;
(b) the Company has not discharged or satisfied any lien
or encumbrance or paid any obligation or liability (contingent or
otherwise) in excess of $20,000, except current liabilities
outstanding on the applicable date set forth above, current
liabilities incurred since such date in the ordinary course of
business and obligations and liabilities under contracts listed in
Schedule 3.12 hereto;
(c) the Company has not mortgaged, pledged or subjected
to lien, charge, security interest or other encumbrance any of its
assets or properties, except in the ordinary course of business;
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(d) the Company has not sold, transferred, leased or
otherwise disposed of any of its assets or properties, except in the
ordinary course of business and for a fair consideration;
(e) the Company has not canceled or compromised any debt
owed to it or claimed by it, except in the ordinary course of
business;
(f) the Company has not knowingly and expressly waived or
released any rights of substantial value;
(g) the Company has not sold, assigned, transferred or
granted any rights under any licenses, franchises, patents,
inventions, trademarks, service marks, trade names, or copyrights or
rights with respect to any know-how or other intangible assets, which
sale, assignment, transfer or grant would have a Material Adverse
Effect on the Company;
(h) the Company has not amended or terminated any
contract, franchise, agreement or license to which it is a party,
which amendment or termination would have a Material Adverse Effect on
the Company;
(i) the Company has not knowingly disposed of or
permitted to lapse any rights for the use of any patent, trademark,
service ▇▇▇▇, trade name or copyright or knowingly disposed of or
disclosed to any person not an employee, supplier, broker, distributor
or customer any trade secret, process or know-how not theretofore a
matter of public knowledge, which dispositions or disclosures would
have a material adverse effect on its operations;
(j) the Company has not terminated the employment of any
department head or officer of the Company or entered into (i) any
written employment agreement not terminable without penalty by any
party thereto upon 60 days' notice, or (ii) any oral employment
agreement not terminable without penalty by any party thereto upon 60
days' notice;
(k) the Company has not increased the rate of
compensation or bonus payments payable or to become payable to any of
its officers or directors (including, without limitation, any payment
of or promise to pay any bonus or special compensation) other than in
the ordinary course of business;
(l) the Company has not declared any dividend or made any
payment or distribution to its shareholders;
(m) the Company has not purchased, redeemed, issued, sold
or otherwise acquired or disposed of any of its shares of capital
stock or other equity securities, or agreed to do so, or granted any
options, warrants or other rights to purchase or convert any
obligation into any shares of its capital stock or any evidence of
indebtedness or other securities;
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(n) the Company has not entered into any other
transaction, contract or commitment other than in the ordinary course
of business;
(o) the Company has not agreed to do any of the things
described in the preceding clauses (a) through (n);
(p) there has not been any Material Adverse Effect on the
Company; and
(q) there has not been any damage, destruction or loss of
or to any material asset of the Company, whether or not covered by
insurance.
3.8 Taxes.
(a) Except as disclosed in Schedule 3.8 hereto, the
Company has timely filed or caused to be timely filed (including
allowable extensions) all federal, state, local, foreign and other tax
returns for income taxes, sales taxes, withholding taxes, employment
taxes, property taxes, franchise taxes and all other taxes of every
kind whatsoever which are required by law to have been filed. All of
the tax returns that have been filed accurately reflect in all
material respects the facts regarding the income, deductions, credits,
assets, operations, activities and all other matters and information
required to be shown thereon. The Company has paid or caused to be
paid all taxes, assessments, fees, penalties and other governmental
charges which were shown to be due pursuant to said returns. All
other material taxes and related assessments, fees, penalties and
other governmental charges which have become due and payable have been
paid or are being contested in good faith. The Company has not filed
or entered into any election, consent or extension agreement that
extends the applicable statute of limitations with respect to its
liability for taxes, except as set forth in Schedule 3.8 hereto. The
provisions for income and other taxes reflected in the balance sheet
included in the Financial Statements make adequate provision for all
accrued and unpaid taxes of the Company, whether or not disputed, and
the Company has made and will continue to make adequate provision for
such taxes on its books and records until the Effective Time,
including any taxes arising from the transactions contemplated by this
Agreement; provided however, no provision has been made or will be
made in the Financial Statements or the Subsequent Company Financials
for any taxes resulting from any tax election made by the Surviving
Corporation subsequent to the Effective Time. Except as set forth in
Schedule 3.8, the Company is not party to any action or proceeding
pending or, to the best knowledge of the Company and the Shareholders,
threatened by any governmental authority for assessment or collection
of taxes; no unresolved claim for assessment or collection of such
taxes has been asserted against the Company, and, to the best
knowledge of the Company and the Shareholders, no audit or
investigation by state or local government authorities is under way
that would have a Material Adverse Effect on the Company.
(b) The Company has not filed and will not file prior to
the Effective Time any consent agreement under Section 341(f) of the
Code or agree to have Section 341(f)(2) of the Code apply to any
disposition of a "subsection (f) asset" (as such term is defined in
Section 341(f)(4) of the Code) owned by the Company.
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(c) The Company is not a party to any tax-sharing or
allocation agreement. In addition, the Company does not owe any
amounts under any tax-sharing or allocation agreement.
(d) The Company has made no payments, is not obligated to
make any payments, and is not a party to any agreement that under
certain circumstances could obligate it to make any payments that will
not be deductible by reason of Section 280G of the Code.
(e) Since June 1993 (prior to which time the Company
filed consolidated returns with its parent company, Kenwood Financial,
Inc.), the Company has not been a member of an affiliated group within
the meaning of Section 1502 of the Code during any part of any
consolidated return year and has not had, and to the best knowledge of
the Company and the Shareholders, does not currently have any
liability for unpaid taxes because it once was a member of an
affiliated group.
(f) The Company is not and has not been a United States
real property holding corporation within the meaning of Section
897(c)(2) during the applicable period specified in Section
897(c)(1)(A)(ii).
3.9 Real Property.
(a) Schedule 3.9 contains a complete and accurate list of
as of November 30, 1995 of all real property owned or leased by the
Company (the "SCHEDULE 3.9 PROPERTY"). Except as otherwise disclosed
in Schedule 3.9 and except for liens for taxes not yet due and payable
and title defects which could not reasonably be expected to have any
material adverse effect on the Schedule 3.9 property or the use
thereof, the Schedule 3.9 property owned by the Company is free and
clear of all liens, mortgages, pledges, security interests,
conditional sales agreements, charges, encumbrances and other adverse
claims or interests of any nature whatsoever. All improvements on the
Schedule 3.9 property are in good condition and repair, reasonable
wear and tear excepted.
(b) Except as disclosed in Schedule 3.9, there are no
existing leases, subleases, tenancies, licenses and other material
contracts or agreements relating to the Schedule 3.9 property to which
the Company is a party (the "LEASES").
(c) Except as disclosed in Schedule 3.9, (i) each of the
Leases is valid, and neither the Company nor, to the knowledge of the
Company or the Shareholders, any other party thereto is in default
thereunder, nor is there any event which with notice or lapse of time,
or both, would constitute a default thereunder by the Company or, to
the knowledge of the Company or the Shareholders, any other party
thereto (other than with respect to immaterial matters of
noncompliance) and (ii) the Company has not received notice that any
party to any Lease intends to cancel, terminate or refuse to renew the
same or to exercise or decline to exercise any option or other right
thereunder.
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(d) None of the Schedule 3.9 property has ever been used
by the Company or, to the best knowledge of the Company or the
Shareholders, by any previous owners and/or operators to generate,
manufacture, refine, produce, store, handle, transfer, process or
transport any hazardous wastes or substances and the Company has not
used in the past any of the Schedule 3.9 property for the principal or
primary purpose of generating, manufacturing, refining, producing,
storing, handling, transferring, processing or transporting of
hazardous wastes or substances.
(e) The Company has all easements of ingress and egress
necessary for all operations conducted by it from the real properties
referred to in Schedule 3.9; and none of such properties has been
condemned, requisitioned or otherwise taken by any public authority,
and to the knowledge of the Company or the Shareholders, no such
action is threatened or contemplated.
3.10 Environmental.
(a) To the best knowledge of the Company and the
Shareholders, the Company has not used, stored, treated, transported,
manufactured, handled, produced or disposed of any Hazardous Materials
on, under, at, from, or in any way affecting any of the owned, leased
or operated properties or assets described in Schedules 3.9 and 3.11,
or otherwise, in any manner which violated any applicable
Environmental Law.
(b) There have been no Releases by the Company of any
Hazardous Material on, under, at, from or in any way affecting any of
the owned, leased or operated properties or assets described in
Schedules 3.9 and 3.11 or otherwise.
(c) To the best knowledge of the Company and the
Shareholders, the Company is in material compliance with all
applicable Environmental Laws, and the Company has not received any
communication, written or oral, that alleges that the Company is not
in compliance with applicable Environmental Laws.
(d) The Company does not have any liabilities, assessed
or to the best knowledge of the Company and the Shareholders,
unassessed, no pending claims have been received by the Company and at
present no outstanding citations or notices have been received by the
Company, which in the case of any of the foregoing have been or are
imposed by reason of or based upon any provision of any applicable
Environmental Laws, including, but not limited to, any such
liabilities relating to or arising out of or attributable, in whole or
in part, to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, presence or handling of any Hazardous
Materials by the Company at any of the Schedule 3.9 property or
otherwise.
(e) There are no proceedings by any governmental
authority or third party pending regarding pollution or protection of
human health or the environment to which the Company is a party, nor
are there any decrees, or orders, or other administrative or judicial
requirements, outstanding under any Environmental Law with respect to
the Company.
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(f) To the best knowledge of the Company and the
Shareholders, the real property currently used, owned or leased by the
Company contains no underground storage tanks, or underground piping
associated with underground storage tanks.
(g) To the best knowledge of the Company and the
Shareholders, the Company has obtained and is in material compliance
with all permits, licenses and other authorizations and has made all
registrations and given all notifications that are required under
Environmental Laws, and is in compliance with all terms and conditions
of such permits, licenses and other authorizations. No notice to,
approval of or authorization or consent from any governmental
authority is necessary for the transfer of or modification to any such
permit, and the consummation of the transaction contemplated by this
Agreement will not violate, alter, impair or invalidate, in any
respect, any such permit.
(h) To the best knowledge of the Company and the
Shareholders, except as previously disclosed, there are no
environmental reports, audits, investigations or assessments of the
Company or any real or personal property or operations which are now
or have been previously owned, leased, operated or managed by the
Company.
(i) The Company has disclosed to AMRE and Merger Sub all
relevant material facts of which it or the Shareholders has knowledge
regarding potential or actual environmental liabilities of the
Company.
3.11 Personal Property.
(a) Schedule 3.11 contains a complete and accurate list
as of November 30, 1995, of all personal property owned by the Company
and all personal property whether owned or subject to any (i) lease,
(ii) license, (iii) rental agreement, (iv) contract of sale or (v)
other agreement to which the Company is a party. The personal
property set forth on Schedule 3.11, other than personal property
disposed of in the ordinary course of business since November 30,
1995, all other personal property acquired by the Company since
November 30, 1995 and all personal property subjected, subsequent to
November 30, 1995, to any of the agreements described in (i) through
(v) of the preceding sentence is hereafter referred to as the
"SCHEDULE 3.11 PROPERTY".
(b) Except as otherwise described in Schedule 3.11 or as
may be disclosed in the Financial Statements, the Schedule 3.11
property is (i) free and clear of all liens, other than liens for
taxes not yet due and payable, mortgages, pledges, security interests,
conditional sales agreements, charges, encumbrances and other adverse
claims or interests of any nature whatsoever (other than any
immaterial items), and (ii) is in good operating condition and repair,
reasonable wear and tear excepted. The Schedule 3.11 property, taken
as a whole, is fit and usable for the purposes for which it is being
used, sufficient for all current operations and business of the
Company and conforms with all applicable ordinances, regulations and
laws. Each lease, license, rental agreement, contract of sale or
other agreement to which any Schedule 3.11 property is subject is
valid and neither the Company nor, to the best knowledge of the
Company or the Shareholders, any other party thereto is in default
thereunder, nor is there any event which with notice or lapse of time,
or both, would constitute a default thereunder by the
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Company or, to the best knowledge of the Company or the Shareholders,
any other party thereto. The Company has not received notice that any
party to any such lease, license, rental agreement, contract of sale
or other agreement intends to cancel, terminate or refuse to renew the
same or to exercise or decline to exercise any option or other right
thereunder.
(c) The inventory of the Company as reflected by the
Company Financials and the inventory as the same shall exist on the
date hereof, consisted and will consist of items which were and will
be of the usual quality and quantity necessary for the normal conduct
of the business of the Company and is reasonably expected to be usable
or saleable within a reasonable period of time in the ordinary course
of the business of the Company. With respect to inventory in the
hands of suppliers for which the Company is committed as of the date
hereof, such inventory is reasonably expected to be usable within 90
days in the ordinary course of the business of the Company as
presently being conducted.
3.12 Contracts. Schedule 3.12 contains a complete and accurate
list of each of the following to which the Company is a party or by which it or
its assets is bound:
(a) material oral contracts;
(b) mortgages, security agreements, chattel mortgages or
conditional sales agreements or any similar instruments or agreements,
involving a present or future obligation of an amount in excess of
$10,000;
(c) agreements, commitments, notes, indentures or other
instruments relating to the borrowing of money, or the guaranty of any
such obligations for the borrowing of money;
(d) joint venture or other agreements with any person,
firm, corporation or unincorporated association doing business either
within or outside the United States relating to sharing of present or
future commissions, fees or other income or profits;
(e) leases of personal property to the Company, involving
a present or future obligation of an amount in excess of $10,000;
(f) franchise agreements;
(g) non-competition agreements relating to independent
contractors and employees other than non- competition agreements which
are identical in all material respects to the standard Company
non-competition agreement;
(h) broker or distributorship contracts;
(i) advertising, marketing and promotional agreements
(including, but not limited to, any agreements providing for discounts
and/or rebates), involving a present or future obligation of an amount
in excess of $10,000; or
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(j) agreements with suppliers, involving a present or
future obligation of an amount in excess of $10,000.
Except as disclosed in Schedule 3.12, each of the above is valid and
enforceable, to the best knowledge of the Company and the Shareholders, the
Company has performed all obligations imposed upon them thereunder, and neither
the Company nor, to the best knowledge of the Company or the Shareholders, any
other party thereto (other than immaterial defaults, with respect to such third
parties) is in default thereunder, nor is there any event which with notice or
lapse of time, or both, would constitute a default thereunder by the Company
or, to the best knowledge of the Company or the Shareholders, any other party
thereto.
3.13 Legal Proceedings. Except as set forth in Schedule 3.13,
there are no claims, actions, suits, arbitrations, grievances, proceedings or
investigations pending or, to the best knowledge of the Company or the
Shareholders, threatened against the Company, at law, in equity, or before any
federal, state, municipal or other governmental or nongovernmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, and
there are no outstanding or unsatisfied judgments, orders, decrees or
stipulations to which the Company is a party, which involve the transactions
contemplated herein or which, if adversely decided, would have a Material
Adverse Effect upon the Company. Except as set forth in Schedule 3.13, the
Company is not currently engaged in or contemplating any legal action to
recover moneys due or damages sustained. The Company is not in violation of or
in default with respect to any applicable judgment, order, writ, injunction or
decree the violation of which would have a Material Adverse Effect on the
Company.
3.14 Labor Matters. Except as set forth on Schedule 3.14 attached
hereto, the Company is not a party to, nor bound by, any collective bargaining
agreement, contract or other agreement or understanding with a labor union or
labor organization. There is no unfair labor practice or labor arbitration
proceeding pending or, to the best knowledge of the Company, threatened against
the Company relating to its business. To the best knowledge of the Company and
the Shareholders, there are no organizational efforts with respect to the
formation of a collective bargaining unit presently being made or threatened
involving employees of Company.
3.15 Patents, Trademarks, Franchises, etc. A true and complete
list of (i) all patents, patent applications, patent agreements, license
arrangements relating to patents, consulting agreements relating to patents,
trademark registrations and applications therefor, trade names, service marks
and copyright registrations and applications therefor, and franchises and
franchise agreements to which the Company is a party or which are used in its
businesses and are owned by or licensed to the Company and (ii) any
interference actions or adverse claims made or, to the best knowledge of the
Company or the Shareholders, threatened in respect thereof and any claims made
or, to the best knowledge of the Company or the Shareholders, threatened for
alleged infringement thereof, is set forth in Schedule 3.15. All patents and
trademarks listed on Schedule 3.15 as being owned by the Company and registered
in the U.S. Patent and Trademark Office have been duly issued or registered
therein, all such registrations have been validly issued and all are in full
force and effect. The Company in its operations does not to the best knowledge
of the Company and the Shareholder infringe any valid patent, trademark, trade
name, service ▇▇▇▇ or copyright of any other person or entity. All agreements
listed in Schedule 3.15 are valid and enforceable, the Company has currently
performed all obligations
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imposed upon it thereunder, and the Company nor, to the best knowledge of the
Company or the Shareholders, any other party thereto is in default thereunder,
nor is there any event which with notice or lapse of time, or both, would
constitute a default thereunder by the Company or, to the best knowledge of the
Company or the Shareholders, any other party thereto. The Company has not
received notice that any party to any such agreement intends to cancel,
terminate or refuse to renew the same or to exercise or decline to exercise any
option or other right thereunder.
3.16 Loans, Notes, Accounts Receivable and Accounts Payable. To
the best knowledge of the Company and the Shareholders, the loans, notes and
accounts receivable reflected in the Financial Statements and all such loans,
notes and accounts receivable arising after the applicable dates of such
Financial Statements arose, and have arisen, from bona fide transactions of the
Company. Accounts payable of the Company reflected in such Financial
Statements and all accounts payable arising after the applicable dates of such
Financial Statements arose, and have arisen, from bona fide transactions.
3.17 Corporate Documents, Books and Records. Each of (i) the
Articles of Incorporation and bylaws of the Company, attached hereto as Exhibit
A and Exhibit B, respectively, including all amendments thereto; (ii) the
minute books of the Company; and (iii) the stock transfer book of the Company,
are true, correct and complete in all material respects.
3.18 Absence of Sensitive Payment. The Company has not made or
maintained (i) any contributions, payments or gifts of its funds or property to
any governmental official, employee or agent where either the payment or the
purpose of such contribution, payment or gift was or is illegal under the laws
of the United States or any state thereof, or any other jurisdiction (foreign
or domestic); or (ii) any contribution, or reimbursement of any political gift
or contribution made by any other person, to candidates for public office,
whether federal, state, local or foreign, where such contributions by the
Company were or would be a violation of applicable law.
3.19 Insurance. The properties and employees of the Company are
insured by the insurers or through the funds and with the types and amounts of
insurance (including, but not limited to, property, professional liability,
automobile, workers compensation, business interruption and excess indemnity
insurance) set forth in Schedule 3.19 (the "COMPANY INSURANCE COVERAGE").
Since January 1, 1993, the Company has not failed or does not currently fail to
maintain any insurance coverage which may be required by the laws of the states
in which the Company does business. The premiums due on the insurance which
covers calendar year 1995 have been paid in full (or are not delinquent) and
the premiums due for the period from January 1, 1996 to the Effective Time have
been or will be paid in full as and when due. All such insurance complies in
all material respects with the terms of each of its leases and each of the
mortgages, deeds of trust, service agreements with third parties and/or loan
agreements to which Company is a party.
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3.20 Employees.
Except as disclosed in Schedule 3.20, the Company is not a
party to any:
(a) management, employment or other contract providing
for the employment or rendition of executive services;
(b) contract for the employment of any employee which is
not terminable by the Company on 60 days' notice;
(c) material bonus, incentive, deferred compensation,
severance pay, pension, profit-sharing, retirement, stock purchase,
stock option, employee benefit or similar plan, agreement or
arrangement; or
(d) any other current employment contract or other
compensation agreement or arrangement affecting or relating to current
or former employees of the Company.
3.21 Employee Benefit Plans. (a) All employee benefit plans, as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), all arrangements providing compensation, severance or
other benefits to any employee or director or former employee or director of
the Company or of any ERISA Affiliate of the Company (the "COMPANY BENEFIT
PLANS") are listed in Schedule 3.21. Unless otherwise disclosed in Schedule
3.21, to the extent applicable, any Company Benefit Plan intended to be
qualified under Section 401(a) of the Code has been determined by the Internal
Revenue Service (the "IRS") to be so qualified and no such Company Benefit Plan
has been amended in any way that would alter its qualified status. Neither the
Company nor any ERISA Affiliate of the Company (during the period of its
affiliated status and prior thereto, to its knowledge) maintains, contributes
to or has in the past maintained or contributed to any benefit plan which is
covered by Title IV of ERISA or Section 412 of the Code. No Company Benefit
Plan nor the Company nor any fiduciary has had imposed any liability or penalty
under Section 4975 of the Code or Section 502(i) or 409 of ERISA. To the best
knowledge of the Company and the Shareholders after diligent inquiry, each
Company Benefit Plan has been maintained and administered in all material
respects in compliance with its terms and with ERISA and the Code to the extent
applicable thereto. There are no pending or anticipated claims against or
otherwise involving any of the Company Benefit Plans and no suit, action or
other liability (excluding claims for benefits incurred in the ordinary course
of Company Benefit Plan activities) has been brought against or with respect to
any such Company Benefit Plan, except for any of the foregoing which could not
reasonably be expected to have a Material Adverse Effect on the Company. All
contributions required to be made as of the date hereof to Company Benefit
Plans have been timely made or provided for. All required payments of
principal and interest under any loan to a Company Benefit Plan that is an
employee stock ownership plan have been timely made and no default has occurred
under any such loan other than defaults that have been waived by the applicable
lender or remedied, written evidence of which reasonably satisfactory to AMRE
shall have been provided to AMRE prior to the Effective Date. Neither the
Company nor any ERISA Affiliate of the Company has contributed to, or been
required to
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contribute to, any "multiemployer plan" (as defined in Sections 3(37) and
4001(a)(3) of ERISA). Except for benefits as may be required to be provided
under applicable provisions of federal or state law, there are no plans or
arrangements which provide or has any liability to provide life insurance or
medical or other employee welfare benefits to any employee or former employee
upon his retirement or termination of employment. The only severance
agreements or severance policies applicable to the Company are the agreements
and policies specifically referred to in Schedule 3.20 (and, in the case of
such agreements, the form of which is attached to Schedule 3.20).
(b) True and correct copies of the following documents relating to
Company Benefit Plans will be made available to AMRE or its representatives
including, without limitation, the following: (i) any and all plan documents,
ancillary documents, trust instruments and insurance contracts, together with
amendments or other agreements relating to rights or obligations thereunder,
(ii) any or all of the most recent summary plan descriptions, summary of
material modifications, memoranda to employees, forms or other written
description or disclosure to participants with respect to each plan, (iii) any
and all filings and correspondence within the last two years, and the most
recent determination letters, written rulings, interpretations or other
pronouncements with or from any governmental agency, including the IRS and the
Department of Labor, or any Company Benefit Plan of the Company or any ERISA
Affiliate of the Company or any of their trustees, representatives or
fiduciaries, (iv) copies of any complaint or other action initiating a lawsuit
or any written claims and correspondence threatening or which would reasonably
be expected to result in a lawsuit filed with any court with respect to any
such lawsuit, and (v) loan documents and stock purchase documents relating to
any employee stock ownership plan.
For purposes of this Agreement "ERISA AFFILIATE" means any business or
entity which is a member of the same "controlled group of corporations," is
under "common control" or is a member of an "affiliated service group" with an
entity within the meanings of Sections 414(b), (c) or (m) of the Code, or
required to be aggregated with the entity under Section 414(o) of the Code, or
is under "common control" with the entity, within the meaning of Section
4001(b) of ERISA, or any regulations promulgated or proposed under any of the
foregoing Sections.
3.22 Transactions with Related Parties. Except for transactions
disclosed in Schedule 3.22, there have been no loans or other transactions
between the Company and any officer, director or shareholder of the Company.
Except as disclosed in Schedule 3.22, neither the Company, any officer or
director of the Company nor any spouse or relative of any such person owns or
has any interest in, directly or indirectly, any real or personal property
owned by or leased to the Company or any copyrights, patents, trademarks,
service marks, trade names or trade secrets licensed by the Company.
3.23 Directors and Officers; Banks. Schedule 3.23 contains a true
and complete list showing (i) the names of all the officers and directors of
the Company; (ii) the name of each bank in which the Company has an account or
a safety deposit box and the names of the persons authorized to draw thereon or
having access thereto; and (iii) the name of each
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person holding a general or limited power of attorney from the Company and the
extent of such power.
3.24 Ownership, Quality and Location of Material Assets. The
Company does not utilize in its business any assets not reflected in the
Financial Statements except for assets which have been fully amortized or
depreciated and which are owned or leased by the Company and franchises,
licenses, trademarks and tradenames. Except as set forth in Schedule 3.24, all
properties and assets of the Company are in the possession and control of the
Company. As of the date hereof, except as set forth in Schedule 3.24, no
physical assets of any value are on the premises at the locations operated by
the Company which do not belong to or are not leased by the Company.
3.25 Absence of Undisclosed Liabilities. The Company does not have
liabilities of any nature, whether accrued, absolute, contingent or otherwise,
not disclosed elsewhere herein or in the Schedules hereto or adequately
reflected or reserved against in the Financial Statements, other than current
liabilities incurred in the ordinary course of business since November 30,
1995.
3.26 No Brokers. Neither the Company nor the Shareholders has
retained any broker or finder in connection with the transactions contemplated
by this Agreement. If any other broker or finder asserts a claim for a fee as
a result of such transactions, based upon a contract, written or oral, with
either the Company or any of the Shareholders, such claim shall be payable by
the Shareholders.
3.27 Permits. Except as specifically set forth in Schedule 3.27,
to the best knowledge of the Company and the Shareholders, (a) the Company has
all material licenses, clearances, permits, franchises, grants, authorizations,
easements, consents, certificates and orders necessary to conduct its business
and to operate its properties and assets, and such licenses, clearances,
permits, franchises, grants, authorizations, easements, consents, certificates
and orders are in full force and effect; (b) no material violations exist in
respect of any license, clearance, permit, franchise, grant, authorization,
easement, consent, certificate or order of the Company; (c) no proceeding is
pending or threatened looking toward the revocation or limitation of any such
license, clearance, permit, franchise, grant, authorization, easement, consent,
certificate or order and there is no basis or ground for any such revocation or
limitation except as specifically set forth in Schedule 3.27. Except as
specifically set forth in Schedule 3.27, the Company has complied with all
laws, rules, regulations, ordinances, codes, licenses, clearances, permits,
franchises, grants, authorizations, easements, consents, certificates and
orders relating to any of its properties or applicable to its business,
including, but not limited to, labor, equal employment opportunity,
occupational safety and health, consumer protection, environmental, securities
and antitrust laws and regulations. The Company is not in violation of any
applicable zoning, building or environmental regulation, ordinance or other
law, order, regulation, restriction or requirement relating to its operations
or properties, whether such properties are owned or leased, and no governmental
body or other person has claimed that any such violation exists, or called
attention to the need for any work, repairs, construction, alterations or
installation on or in connection with the properties of the Company. Neither
the Company nor the Shareholders has any knowledge of any pending or threatened
action or proceeding which
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could result in a modification or termination of the zoning laws which
modification or termination would adversely affect the Company or any of its
property. The breach of this Section 3.27 will not result in a breach of this
Agreement or any condition or covenant herein except where such breach would
have a Material Adverse Effect on the Company.
3.28 Shareholder Information. None of the information to be
distributed to shareholders of the Company in connection with the Merger nor
any amendments or supplements of or to any of the foregoing (collectively, the
"SHAREHOLDER INFORMATION"), between the date the Shareholder Information is
first mailed to shareholders and the Effective Time, will contain any material
statement which, at such time and in light of the circumstances under which it
is made, will be false or misleading with respect to any material fact, or will
omit to state any fact necessary in order to make the statements therein not
false or misleading, provided however, that the Company and the Shareholders
make no representation or warranty with respect to any information that AMRE or
Merger Sub will independently supply for use in the Shareholder Information.
3.29 Full Disclosure. No material information furnished, or to be
furnished, by either the Company or any of the Shareholders to AMRE or Merger
Sub or their representatives in connection with this Agreement (including, but
not limited to, the Financial Statements and all information in the Schedules
hereto) is, or will be, false or misleading, and such information includes all
facts required to be stated therein or necessary to make the statements therein
not misleading. No representation or warranty by or on behalf of the Company
contained in this Agreement, and no statement contained in any certificate,
list, exhibit, or other instrument furnished or to be furnished to AMRE
pursuant hereto contains or will contain any untrue statement of a material
fact, or omits or will omit to state any material facts which are necessary in
order to make the statement contained herein or therein, in light of the
circumstances under which they are made, not misleading. The breach of this
Section 3.29 will not result in a breach of this Agreement or any condition or
covenant herein except where such breach would have a Material Adverse Effect
on the Company.
3.30 Dividend Payments. Except as set forth in Schedule 3.30
hereto, as of December 29, 1995, the Company has timely paid or made all
dividends and other distributions on the Company Preferred Stock.
ARTICLE 4
CONDUCT OF BUSINESS PENDING THE MERGER
4.1 Conduct of Business by the Company Pending the Merger. The
Company covenants and agrees that, prior to the Effective Time, unless AMRE and
Merger Sub shall otherwise agree in writing or as otherwise expressly
contemplated by this Agreement:
(a) The business of the Company shall be conducted only
in, and the Company shall not take any action except in, the ordinary
course of business, and the Company shall use commercially reasonable
efforts to maintain and preserve its
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business organization, assets, prospects, employees and advantageous
business relationships;
(b) The Company shall not, directly or indirectly, do any
of the following: (i) authorize for issuance, issue, sell, pledge,
deliver, or agree or commit to issue, sell, pledge or deliver (whether
through the issuance or grant of options, warrants, commitments,
subscriptions, rights to purchase or otherwise) any capital stock of
the Company or securities or rights convertible into or exchangeable
for, shares of capital stock or securities convertible into or
exchangeable for such shares; (ii) pledge, dispose of or encumber,
except in the ordinary course of business, any assets of the Company
(including any indebtedness owed to it or any claims held by it);
(iii) amend or propose to amend its Articles of Incorporation or
bylaws or similar organizational documents, except as may be necessary
in the opinion of the Board of Directors of the Company, counsel to
the Company and, to the extent applicable, the ESOP Trustee and its
ESOP counsel in order to effectuate the transactions contemplated
herein; (iv) split, combine or reclassify any shares of its capital
stock or declare, set aside or pay any dividend or distribution,
payable in cash, stock, property or otherwise, with respect to any of
its capital stock, except as in the ordinary course of the operation
of the ESOP; (v) redeem, purchase or otherwise acquire or offer to
redeem, purchase or otherwise acquire any capital stock of the
Company; (vi) transfer any assets or liabilities to any affiliate; or
(vii) authorize or propose any of the foregoing or enter into any
contract, agreement, commitment or arrangement to do any of the
foregoing;
(c) The Company shall not, directly or indirectly, (i)
acquire (by merger, consolidation or acquisition of stock or assets)
any corporation, partnership or other business organization or
division thereof or make any investment either by purchase of stock or
securities, contributions to capital, property transfer or purchase of
any amount of property or assets of any other individual or entity;
(ii) acquire any assets for a value in excess of $10,000 other than in
the ordinary course of business; (iii) dispose of any assets with a
value in excess of $10,000 other than in the ordinary course of
business; (iv) incur any indebtedness for borrowed money or issue any
debt securities or assume, guarantee, endorse or otherwise as an
accommodation become responsible for, the obligations of any other
individual or entity, make any loans or advances or enter into any
other transaction, except in the ordinary course of business and
consistent with past practice; (v) authorize, recommend or propose any
change in its capitalization or any release or relinquishment of any
contract right; or (vi) authorize or propose any of the foregoing or
enter into or modify any contract, agreement, commitment or
arrangement with respect to any of the foregoing;
(d) The Company shall not enter into or adopt any new, or
amend any existing, severance or termination benefit arrangements,
consulting agreements, any employment benefit plans, or arrangement,
other than in the ordinary course of business;
(e) Without the prior written consent of AMRE, which
consent shall not be unreasonably withheld, the Company (except for
routine salary increases or other
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adjustments to employee benefit arrangements in the ordinary course of
business) shall not adopt or amend any bonus, profit sharing,
compensation, stock option, pension, retirement, deferred
compensation, employment or other employee benefit plan, agreement,
trust, plan, fund or other arrangement for the benefit or welfare of
any employee or increase or pay any benefit not required by any
existing plan and arrangement, including without limitation any
Company Benefit Plan as defined in Section 3.21 hereof;
(f) The Company shall not pay, discharge or satisfy any
claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction in the ordinary course of business of
liabilities reflected or reserved against in the Company's Financial
Statements or incurred in the ordinary course of business;
(g) The Company shall not waive, release, grant or
transfer any franchises, franchise agreements, patents, patent rights,
trademarks, trademark rights, trade names, trade name rights,
copyrights or know-how or modify or change in any respect any existing
license, lease, contract franchise, franchise agreement or other
document, other than in the ordinary course of business;
(h) The Company shall use commercially reasonable efforts
to preserve its business organization intact, to keep available the
services of its current officers and key employees and to maintain
satisfactory relationships with licensors, licensees, suppliers,
contractors, distributors, customers and others having significant
business relationships with the Company;
(i) The Company shall not make capital expenditures in
the aggregate in excess of $20,000.
ARTICLE 5
ADDITIONAL COVENANTS
5.1 Registration Statement and Proxies. AMRE and the Company
shall cooperate and promptly prepare and AMRE shall file with the SEC as soon
as practicable following receipt of SEC comments to the Proxy Statement a Proxy
Statement/Registration Statement on Form S-4 (the "FORM S-4") with respect to
the AMRE Common Stock issuable in the Merger, a portion of which Form S-4 shall
serve as the proxy statement with respect to the meeting of the shareholders of
the Company in connection with the Merger (the "JOINT PROXY
STATEMENT/PROSPECTUS"). The respective parties will cause the Joint Proxy
Statement/Prospectus and the Form S-4 to comply as to form in all material
respects with the provisions of the Securities Act, the Exchange Act and the
rules and regulations thereunder. AMRE shall use commercially reasonable
efforts, and the Company will cooperate with AMRE, to have the Form S-4
declared effective by the SEC as promptly as practicable. AMRE shall use
commercially reasonable efforts to obtain, prior to the effective date of the
Form S-4, all necessary state securities law or "Blue Sky" permits or approvals
required to carry out the transactions contemplated by this Agreement and will
pay all expenses incident
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thereto. AMRE agrees that the Joint Proxy Statement/Prospectus and each
amendment or supplement thereto at the time of mailing thereof and at the time
of the meeting of shareholders of the Company, or, in the case of the Form S-4
and each amendment or supplement thereto, at the time it is filed or becomes
effective, will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that the foregoing shall not apply to the
extent that any such untrue statement of a material fact or omission to state a
material fact was made by AMRE in reliance upon and in conformity with
information concerning the Company or the Shareholders furnished to AMRE by the
Company or the Shareholders in writing specifically for use in the Joint Proxy
Statement/Prospectus. The Company agrees that the written information
concerning the Company provided by it for inclusion in the Joint Proxy
Statement/Prospectus and each amendment or supplement thereto, at the time of
mailing thereof and at the time of the meetings of the stockholders of AMRE and
the Company, or, in the case of written information concerning the Company
provided by the Company for inclusion in the Form S-4 or any amendment or
supplement thereto, at the time it is filed or becomes effective, will not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. No
amendment or supplement to the Joint Proxy Statement/Prospectus or the Form S-4
nor any request for acceleration thereof will be made by AMRE or the Company
without the approval of the other party, except as required by law. AMRE will
advise the Company, promptly after it receives notice, of the time when the
Form S-4 or any post effective supplement or amendment thereto has become
effective, the issuance of any stop order, the suspension of the qualification
of the AMRE Common Stock issuable in connection with the Merger for offering or
sale in any jurisdiction, any request by the SEC for amendment of the Joint
Proxy Statement/Prospectus or the Form S-4 or requests by the SEC for
additional information and will promptly provide the Company with copies of any
responses filed by AMRE to SEC comments on the Form S-4.
5.2 Letter to the Company's Accountants. The Company shall use
its best efforts to cause to be delivered to AMRE a letter from Deloitte &
Touche LLP, the Company's independent public accountants, dated a date within
two business days before the date on which the Form S-4 shall become effective
and addressed to AMRE and the Company, in form and substance reasonably
satisfactory to AMRE and customary in scope and substance of letters delivered
by independent public accountants in connection with registration statements
similar to the Form S-4.
5.3 Company Board Action. The Joint Proxy Statement/Prospectus
shall state, among other things, that the Board of Directors of the Company has
approved by unanimous vote the Merger Agreement and the Merger.
5.4 Consent of Shareholders of the Company. The Company shall use
its best efforts to take all action necessary, in accordance with the Virginia
Law and its Articles of Incorporation and bylaws, to transmit the Joint Proxy
Statement/Prospectus to its shareholders and obtain its shareholders' approval
of the Merger as promptly as reasonably practicable. Upon approval of the
Merger by the shareholders of the Company in accordance
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with the Virginia Law, the Company shall send to each of its shareholders, at
each shareholder's address as it appears on the Company's records, by certified
or registered mail, return receipt requested, notice in accordance with Section
13.1-734 of the Virginia Law (the "APPRAISAL RIGHTS NOTICE") as to the
Effective Date and the availability of appraisal rights under Article 15 of the
Virginia Law.
5.5 Expenses. All expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such expenses whether or not the Merger is consummated.
5.6 Additional Agreements. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to (i) use all commercially
reasonable efforts to take, or cause to be taken, all action and (ii) use all
commercially reasonable efforts to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement and to cooperate
with each other in connection with the foregoing, (iii) use all commercially
reasonable efforts to obtain all necessary waivers, consents and approvals from
other parties to material loan agreements, leases and other contracts and to
notify each of the other parties hereto of any request for prepayment with
respect thereto; provided however, all commercially reasonable efforts with
respect to obtaining waivers, consents and approvals under loan agreements does
not obligate the parties hereto to make any prepayment on any such loan, (iv)
use all commercially reasonable efforts to obtain all necessary consents,
approvals and authorizations as are required to be obtained under any federal,
state, local or foreign law or regulations, (v) use commercially reasonable
efforts to defend all lawsuits or other legal proceedings challenging this
Agreement or the consummation of the transactions contemplated hereby, (vi) use
all commercially reasonable efforts to lift or rescind any injunction or
restraining order or other order adversely affecting the ability of the parties
to consummate the transactions contemplated hereby, (vii) use all commercially
reasonable efforts to effect all necessary registrations and filings and
submissions of information required or requested by governmental authorities,
(viii) use all commercially reasonable efforts to cause the Merger to be
treated as a "pooling of interests" for accounting purposes, and (ix) use all
commercially reasonable efforts to cause the Merger to be treated as a Section
368 tax-free reverse triangular merger for federal income tax purposes.
5.7 No Shopping. Subject to fiduciary duties under applicable law
as advised in writing by legal counsel, the Company shall not, directly or
indirectly, through any officer, director, agent, representative or otherwise,
(i) solicit, initiate or encourage submission of proposals or offers from any
person (other than AMRE and Merger Sub), relating to any acquisition or
purchase of all or substantially all of the assets of, or any equity interest
in, the Company or any merger, consolidation, or business combination with the
Company, or (ii) participate in any discussions or negotiations regarding, or
furnish to any person (other than AMRE and Merger Sub) any information with
respect to, any of the foregoing, or (iii) otherwise cooperate in any way with,
or assist or participate in, facilitate or encourage, any effort or attempt by
any other person to do or seek any of the foregoing. The Company shall
promptly notify AMRE and Merger Sub in writing as provided herein if it
receives any such proposal or offer or any inquiry or contact with respect
thereto.
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5.8 Notification of Certain Matters. Each party will promptly
give written notice as provided herein to the other parties upon becoming aware
of the occurrence or failure to occur, or impending or threatened occurrence or
failure to occur, of any event that would cause or constitute, or would be
likely to cause or constitute, a breach of any of its representations,
warranties or covenants contained in this Agreement and will use all reasonable
efforts to prevent or promptly remedy the occurrence or failure. No such
notification shall limit or affect the representations, warranties, covenants
or conditions or remedies of the parties hereunder.
5.9 Access to Information.
(a) The Company and the Company's officers, directors,
employees and agents shall afford the officers, employees and agents
of AMRE and Merger Sub complete access at all reasonable times to its
officers, employees, agents, properties, facilities, books, records
and contracts and shall furnish AMRE and Merger Sub all financial,
operating and other data and information as AMRE and Merger Sub
through their officers, employees or agents, may reasonably request.
AMRE and Merger Sub will hold and will cause their respective
representatives to hold in strict confidence all documents and
information concerning the Company furnished to AMRE or Merger Sub in
connection with the transactions contemplated by this Agreement
(except to the extent that such information can be shown to have been
(i) previously known by AMRE or Merger Sub (or their respective
affiliates) prior to its disclosure to AMRE or Merger Sub by the
Company, (ii) in the public domain through no fault of AMRE or Merger
Sub or (iii) later lawfully acquired by AMRE or Merger Sub (or their
respective affiliates) from other sources), and will not release or
disclose such information to any other person, except in connection
with this Agreement to their respective auditors, attorneys, financial
advisors and other consultants or advisors or responsible financial
institutions and individuals after AMRE or Merger Sub, as the case may
be, has caused such financial institutions and individuals to agree to
be bound by the provisions of this Section 5.9 as if the reference to
AMRE or Merger Sub herein were to them (it being understood that such
persons shall be informed by AMRE or Merger Sub of the confidential
nature of such information and shall be directed by AMRE or Merger Sub
to treat such information confidentially); provided that AMRE, Merger
Sub and their respective representatives may provide such documents
and information in connection with its SEC filings or in response to
judicial or administrative process or applicable governmental laws,
rules, regulations, orders or ordinances, but only that portion of the
documents or information which, on the advice of counsel, is legally
required to be furnished, and provided that AMRE or Merger Sub, as the
case may be, notifies the Company of its obligation to provide such
information prior to such disclosure and fully cooperates with the
Company to protect the confidentiality of such documents and
information under applicable law. If the transactions contemplated by
this Agreement are not consummated, and AMRE or Merger Sub will
destroy or return to the Company all copies of written information
furnished by the Company to AMRE, Merger Sub or their respective
affiliates, agents, representatives or advisers.
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(b) Each of AMRE and Merger Sub shall, and shall cause
its subsidiaries, officers, directors, employees and agents to,
provide the officers, employees and agents of the Company and the ESOP
Trustees with such information concerning AMRE and Merger Sub as may
be necessary for the Company to ascertain the accuracy and
completeness of the information supplied by AMRE and Merger Sub for
inclusion in the Shareholder Information, or in any other document
filed with any other governmental agency or authority and to verify
the performance of and compliance with their representations,
warranties, covenants and conditions herein contained. Subject to the
requirements of law, the Company and the Shareholders shall hold in
confidence all such information, and, upon the termination of this
Agreement, the Company and the Shareholders will deliver to AMRE all
documents, work papers and other material (including copies) obtained
by the Company or the Shareholders, or on their behalf, from AMRE or
Merger Sub, as a result of this Agreement or in connection herewith,
whether so obtained before or after the execution hereof.
(c) No investigation pursuant to this Section 5.9 shall
affect any representations or warranties of the parties herein or the
conditions to the obligations of the parties hereto.
(d) Any schedule which is not attached hereto at the time
that AMRE and Merger Sub execute this Agreement or which is
subsequently updated shall not be binding upon AMRE or Merger Sub
unless such schedule or update is accepted in writing by AMRE and
Merger Sub. If such schedule or update is not so accepted, then any
disclosure contained therein shall not be deemed to have been made for
purposes hereunder, including but not limited to for purposes of
modifying the representations and warranties made hereunder.
(e) Any schedule which is not attached hereto at the time
that the Company and the Shareholders execute this Agreement or which
is subsequently updated shall not be binding upon the Company or the
Shareholders unless such schedule or update is accepted in writing by
the Company or the Shareholders, as the case may be. If such schedule
or update is not so accepted, then any disclosure contained therein
shall not be deemed to have been made for purposes hereunder,
including but not limited to for purposes of modifying the
representations and warranties made hereunder.
5.10 Information for Other Filings. The parties represent to each
other that the information provided and to be provided by AMRE, Merger Sub and
the Company, respectively, for use in any document to be filed with any
governmental agency or authority in connection with the transactions
contemplated hereby shall, at the respective times such documents are filed
with the governmental agency or authority and on the Effective Date be true and
correct in all material respects and shall not omit to state any material fact
required to be stated therein or necessary in order to make such information
not false or misleading, and the Company, AMRE and Merger Sub each agree to so
correct any such information provided by it for use in such documents that
shall have become false or misleading.
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5.11 Sub-License Agreement. No later than December 31, 1995, AMRE
and the Company shall have entered into a Sub-License Agreement, in
substantially the form of Exhibit C hereto.
5.12 Affiliate Letters. Prior to the Effective Time, the Company
shall deliver to AMRE a list (the "COMPANY AFFILIATE LIST") of names and
addresses of those persons who, as of the date of this Agreement, were
"affiliates" (each such person, an "AFFILIATE OF THE COMPANY") of the Company
within the meaning of Rule 145 of the rules and regulations promulgated under
the Securities Act and under the SEC guidelines and interpretations applicable
to "poolings of interests." The Company Affiliate List will be updated as
appropriate from time to time, up to and including the Effective Time. The
Company shall provide AMRE such information and documents as AMRE shall
reasonably request for purposes of reviewing such list. The Company shall use
its best efforts to deliver or cause to be delivered to AMRE, concurrently with
the Effective Time, from each Affiliate of the Company identified in the
Company Affiliate List, an Affiliate Letter substantially in the form attached
hereto as Exhibit D (the "COMPANY AFFILIATE LETTER"). AMRE shall be entitled
to place legends as specified in such Affiliate Letters on the certificates
evidencing any AMRE Common Stock to be received by each Affiliate of the
Company, pursuant to the terms of this Agreement, and to issue appropriate stop
transfer instructions to the transfer agent for the AMRE Common Stock,
consistent with the terms of such Company Affiliate Letters.
5.13 Pooling. From and after the date hereof and until the
expiration of the Restricted Period (as defined below), none of AMRE, Merger
Sub, the Shareholders or the Company shall or shall knowingly permit any of its
or their "affiliates" (as referred to in Section 5.12) to take any action, or
fail to take any action, that would jeopardize the treatment of the Merger as a
"pooling of interests" for accounting purposes. For purposes hereof, the term
"RESTRICTED PERIOD" shall mean the period commencing on the date hereof and
terminating on the date on which 30 days of combined operations are publicly
announced by AMRE.
5.14 Listing Application. AMRE shall prepare and submit to the
NYSE a listing application covering AMRE Common Stock to be issued in
connection with the Merger and shall use its reasonable efforts to obtain,
prior to the Effective Time, approval for the listing of such AMRE Common Stock
upon official notice of issuance.
5.15 Public Announcements. AMRE, Merger Sub and their affiliates,
on the one hand, and the Company, the Shareholders and their affiliates, on the
other hand, will consult with and receive the consent of each other before
issuing any press release or otherwise making any public statements with
respect to the transactions contemplated by this Agreement, and shall not issue
any such press release or make any such public statement prior to such
consultation; provided, however, that (i) each party shall be permitted to make
such disclosures to the public or to governmental agencies as its counsel shall
deem necessary to maintain compliance with and to prevent violations of
applicable federal or state laws, provided it first notifies the other parties
in writing and furnishes it with a copy of any such proposed disclosure; and
(ii) each party may make necessary disclosures to its employees or to certain
other parties whose consent or approval may be required in
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connection with the Merger, and such disclosures may be made without any prior
written consent.
5.16 Operation of the Company's Business Following the Effective
Date. (i) AMRE and Merger Sub agree that ▇▇▇▇ ▇. ▇▇▇▇▇, current President of
the Company, will maintain responsibility for the normal course-of-business
hiring and firing and the material employee decisions for the former employees
of the Company, subject in all respects to the reasonable discretion of the
Chief Executive Officer of AMRE and consistent with AMRE's human resource
policies; (ii) AMRE and Merger Sub agree to provide a benefit package to the
former employees of the Company which is substantially equivalent to the
benefits afforded to the employees of AMRE prior to the Effective Date, in the
event that the current benefit package available to the Company's employees is
terminated or restructured as a result of the transactions contemplated herein;
(iii) AMRE and Merger Sub agree to continue any current insurance policies
which cover the Board of Directors or the ESOP trustees in full force and
effect until (x) the complete termination of the ESOP or (y) the receipt of a
favorable determination letter from the IRS on the qualified status of the ESOP
at termination and distribution of all assets from the ESOP, whichever of (x)
and (y) is later; (iv) AMRE will cause the Surviving Corporation to observe any
indemnification provisions now existing in the articles of incorporation or
bylaws of the Company or the ESOP Plan for the benefit of any individual who
served as a director or officer of the Company at any time prior to the
Effective Time, and will cause the Surviving Corporation to indemnify each
individual who served as a director or officer or Trustee of the Company or the
ESOP at any time prior to the Effective Time from and against any and all
actions, suits, proceedings, hearings, investigations, charges, complaints,
claims, demands, injunctions, judgments, orders, decrees, rulings, damages,
dues, penalties, fines, costs, amounts paid in settlement, liabilities,
obligations, taxes, liens, losses, expenses and fees, including all court costs
and reasonable attorneys' fees and expenses, resulting from, arising out of,
relating to, in the nature of, or caused by this Agreement or any of the
transactions contemplated herein; and (v) AMRE agrees to cause Surviving
Corporation to expressly assume all obligations of the Company as such
obligations arise under the following agreements to which the Company is a
party: (A) that certain ESOP Loan and Security Agreement and ESOP Term Note of
June 30, 1993, as modified on June 30, 1995, by and between the Company and
NationsBank, N.A., as successor in interest to Maryland National Bank; and (B)
that certain ESOP Mirror Loan and Pledge Agreement of June 30, 1993, by and
between the Company and the ESOP (the "ESOP Mirror Loan"); (vi) AMRE will make
or cause the Surviving Corporation to make cash contributions and to issue cash
dividends to the ESOP in such amounts and at such times which will enable the
ESOP to pay when due all amounts owing by the ESOP under or with respect to the
ESOP Mirror Loan and/or that certain Secured Promissory Note dated June 30,
1993 (the "Secured Note") from the ESOP, whether for principal or interest. A
cash contribution or dividend by AMRE or the Surviving Corporation to the ESOP
to enable the ESOP to make any given payment on the Secured Note shall be made
sufficiently prior to the date such payment is due to provide for timely
payment under the ESOP Mirror Loan and the Secured Note and shall be in
immediately available funds. AMRE's obligation under this Section 5.16(vi)
shall continue until such time as all amounts owed by the ESOP pursuant to the
ESOP Mirror Loan and the Secured Note have been satisfied through the payment
of contributions or dividends to the ESOP or through other means that are
permissible under the ESOP plan document, the Code and
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ERISA; provided, however, that AMRE will not cause allocated stock to be sold
to repay the ESOP Mirror Loan; (vii) it is the present intent of AMRE to cause
the Surviving Corporation to terminate the ESOP (and distribute its assets
(e.g., allocated AMRE Common Stock) to its participants following the giving of
all applicable notices and the receipt and conclusion of all appropriate and/or
required (a) IRS determination letters, (b) consents, (c) allocations and (d)
accountings) following consummation of the Merger; (viii) AMRE will not permit
any previously unallocated shares of stock held in the ESOP to be allocated
after the Effective Time to individuals other than those who are participants
in the ESOP as of the Effective Time; and (ix) AMRE will not take any action or
cause the Surviving Corporation or the fiduciary of the ESOP to take any action
in connection with the termination of the ESOP that does not comply in all
material respects with the ESOP plan document, ERISA and the Code.
ARTICLE 6
CONDITIONS
6.1 Conditions to Obligation of Each Party to Effect the Merger.
The obligations of each of AMRE, Merger Sub and the Company to effect the
Merger shall be subject to the fulfillment or waiver at or prior to the
Effective Time of the following conditions:
(a) the Merger shall have been approved and adopted by
the requisite consent of the shareholders of the Company required by
applicable law and the applicable regulations of any stock exchange;
(b) the Form S-4 shall have been declared effective and
shall be effective at the Effective Time, and no stop order suspending
effectiveness of the Form S-4 shall have been issued;
(c) no preliminary or permanent injunction or other
order, decree or ruling issued by a court of competent jurisdiction or
by a governmental, regulatory or administrative agency or commission
nor any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority shall be in effect that would
make the acquisition or holding directly or indirectly by AMRE of the
shares of Common Stock of the Surviving Corporation illegal or
otherwise prevent the consummation of the Merger. In the event any
such order or injunction shall have been issued, each party agrees to
use its reasonable efforts to have any such injunction lifted or order
reversed;
(d) all consents, authorizations, orders and approvals of
(or filings or registrations with) any governmental commission, board
or other regulatory body required in connection with the execution,
delivery and performance of this Agreement shall have been obtained or
made, except for filings in connection with the Merger and any other
documents required to be filed after the Effective Time and except
where the failure to have obtained or made any such consent,
authorization,
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order, approval, filing or registration would not have a Material
Adverse Effect on either the Company or AMRE;
(e) the AMRE Common Stock to be issued to Company
shareholders in connection with the Merger shall have been approved
for listing on the NYSE, subject only to official notice of issuance;
(f) no action shall be pending which has been filed by
any state or federal authority or any other party seeking to enjoin
consummation of the transactions contemplated by this Agreement,
including, but not limited to, the Merger and no injunction shall have
been issued and shall be effective or enforceable or under appeal if
the effectiveness or enforceability thereof has been lifted or stayed
by a court or other authority of competent jurisdiction, preventing
the Merger, or imposing conditions on, the Merger which are materially
adverse to AMRE, Merger Sub, the Company or any of their shareholders;
(g) AMRE shall have duly completed all corporate actions
and proceedings to amend and shall have amended its Certificate of
Incorporation to authorize the issuance of additional shares of AMRE
Common Stock if necessary to consummate the transactions contemplated
hereby; and
(h) Kenwood Financial, Inc. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ shall
have been released by NationsBank, N.A. from all liability in
connection with the ESOP Loan and Security Agreement and ESOP Term
Note by and between NationsBank, N.A. and the Company and any
collateral security agreements related thereto.
6.2 Additional Conditions to the Obligation of the Company. The
obligation of the Company to effect the Merger is also subject to the
fulfillment at or prior to the Effective Time of the following conditions
(unless waived) or except as otherwise contemplated or permitted by this
Agreement:
(a) each of AMRE and Merger Sub shall in all material
respects have performed each obligation and agreement and complied
with each covenant to be performed and complied with by it hereunder
on or prior to the Effective Time;
(b) the representations and warranties of AMRE and Merger
Sub in this Agreement shall be true and correct in all material
respects when made and at the Effective Time with the same force and
effect as though made at such time, except as affected by the
transactions contemplated hereby;
(c) AMRE and Merger Sub shall have furnished to the
Company a certificate, dated the Effective Date, signed by a
responsible officer of each of AMRE and Merger Sub, to the effect that
to the best of their knowledge, all conditions set forth in Section
6.2(a) and (b) have been satisfied; provided however, such officer
shall have no personal liability therefore unless such officer knew
the certificate to be false at the time such certificate was executed;
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(d) AMRE and Merger Sub shall have provided or made
available to the Company or its designated representatives the
information and documents as specified in Section 5.9(b) for review by
the Company and its agents and representatives and the results of the
due diligence review undertaken by or on behalf of the Company,
including, without limitation, the financial condition of AMRE, shall
be deemed materially satisfactory by the Company;
(e) AMRE shall have entered into an employment agreement
with ▇▇▇▇ ▇▇▇▇▇ substantially in the form attached hereto as Exhibit F
(the "EMPLOYMENT AGREEMENT");
(f) The Company shall have received the opinion of Ernst
& Young LLP dated on or about the Effective Date to the effect that
(i) the Merger will constitute a reorganization within the meaning of
Section 368(a)(1)(A) of the Code by reason of Section 368(a)(2)(E) of
the Code; (ii) AMRE, Merger Sub, and the Company will each be a party
to the reorganization within the meaning of Section 368(b) of the
Code; (iii) the Merger will result in the recognition of no gain or
loss to AMRE, Merger Sub, the Company, or the shareholders of each,
except for any cash paid in connection with the exercise of
dissenters' rights; (iv) the adjusted basis of each former shareholder
of the Company in the AMRE Common Stock received in the Merger will be
the same as the adjusted basis of the Company stock surrendered in
exchange therefor; (v) the holding period of the AMRE Common Stock
received by shareholders of the Company will include the holding
period of the Company stock surrendered in exchange therefor; and (vi)
effectuation of the intended termination of the ESOP, any sale of the
unallocated shares, and distribution of the allocated shares to the
ESOP participants will not invalidate the tax-free status of the
reorganization; and
(g) The ESOP shall have received the opinion of ▇▇▇▇▇
▇▇▇▇▇▇▇, Ltd. or such other qualified independent appraiser (as
defined in Section 401(a)(28)(C) of the Code) at the Effective Time
that (i) the exchange of the Preferred Shares for AMRE Common Stock by
the ESOP was for adequate consideration (as defined in Section 3(18)
of ERISA and the proposed regulations thereunder), and (ii) the
transactions contemplated by the Agreement (including such exchange)
are fair to the ESOP from a financial point of view.
(h) The Company shall have received copies of the
resolutions of the Board of Directors of AMRE and the Board of
Directors of Merger Sub authorizing the execution, delivery and
performance of the Agreement and the consummation of the transactions
contemplated hereby and a copy of the resolutions or other consent of
the shareholder of Merger Sub approving the Merger, all certified by
the Secretary of AMRE or the Secretary of Merger Sub, as the case may
be, on the Effective Date. Such certificates shall state that the
resolutions set forth therein have not been amended, modified, revoked
or rescinded as of the date of such certificates;
(i) The Company shall have received certificates of the
Secretary of AMRE and the Secretary of Merger Sub dated the Effective
Date, as to the
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incumbency and signature of the officers of AMRE and Merger Sub
executing this Agreement and any certificate, agreement or other
documents to be delivered pursuant hereto, together with evidence of
the incumbency of each such Secretary;
6.3 Additional Conditions to the Obligations of AMRE and Merger
Sub. The obligations of AMRE and Merger Sub to effect the Merger are also
subject to the fulfillment at or prior to the Effective Time of the following
conditions (unless waived) or except as otherwise contemplated or permitted by
this Agreement:
(a) the Company shall in all material respects have
performed each obligation and agreement and complied with each
covenant to be performed and complied with by it hereunder on or prior
to the Effective Time;
(b) the representations and warranties of the Company and
the Shareholders in this Agreement shall be true and correct in all
material respects when made and at the Effective Time with the same
force and effect as though made at such time, except as affected by
the transactions contemplated hereby;
(c) the Company shall have furnished to AMRE and Merger
Sub a certificate, dated the Effective Date, signed by a responsible
officer of the Company, to the effect that to the best of his
knowledge, all conditions set forth in Section 6.3(a) and (b) have
been satisfied; provided, however, no such officer shall have no
personal liability therefor unless such officer knew the certificate
to be false at the time such certificate was executed;
(d) the Company shall have provided or made available to
AMRE and Merger Sub or their designated representatives the
information and documents as specified in Section 5.9(a) for review by
AMRE and its agents and representatives, and the results of the due
diligence review undertaken by or on behalf of AMRE, including,
without limitation, the financial condition of the Company, shall be
deemed materially satisfactory by AMRE;
(e) all of the members of the Company's Board of
Directors shall have irrevocably tendered their resignations effective
as of the Effective Time and the Company shall have accepted such
resignations;
(f) AMRE and Merger Sub shall have received an opinion
dated the Effective Date of ▇▇▇▇▇▇▇, Berenson & ▇▇▇▇▇▇, counsel to the
Company, which opinion shall be reasonably satisfactory to counsel for
AMRE and Merger Sub;
(g) AMRE and the Company shall have received the written
consent of NationsBank, N.A. to the Merger and the other transactions
contemplated hereby, which consent will contain a waiver of any event
of default or acceleration which would result from the execution of
this Agreement or the consummation of the transactions contemplated
hereby;
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(h) AMRE and Merger Sub shall have received a copy of the
resolutions of the Board of Directors of the Company authorizing the
execution, delivery and performance of the Agreement and the
consummation of the transactions contemplated hereby and a copy of the
resolutions or other consent of the shareholders of the Company
approving the Merger, all certified by the Secretary of the Company on
the Effective Date. Such certificates shall state that the
resolutions set forth therein have not been amended, modified, revoked
or rescinded as of the date of such certificates;
(i) AMRE and Merger Sub shall have received a certificate
of the Secretary of the Company dated the Effective Date, as to the
incumbency and signature of the officers of the Company executing this
Agreement and any certificate, agreement or other documents to be
delivered pursuant hereto, together with evidence of the incumbency of
such Secretary;
(j) The Company shall have delivered to AMRE and Merger
Sub all material consents, waivers, authorizations and approvals;
(k) AMRE shall have received a letter from ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP that the Merger will be treated as a pooling of interests
for accounting purposes and the Company shall have delivered to AMRE a
letter from Deloitte and Touche LLP that the Company is a poolable
entity; and
(l) Holders of not more than 10% of any class of Shares
shall have exercised and properly perfected dissenter's rights under
Article 15 of the Virginia Law.
ARTICLE 7
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time whether before or after approval of the Merger by
the Shareholders :
(a) by mutual written consent of the Boards of Directors
of AMRE, Merger Sub and the Company;
(b) by either of the Boards of Directors of Merger Sub or
the Company if the Effective Time shall not have occurred on or before
April 30, 1996; provided, however, that the right to terminate under
this Section 7.1(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 Effective Time to occur on or
before such date;
(c) if a court of competent jurisdiction or governmental,
regulatory or administrative agency or commission shall have issued an
order, decree or ruling or taken any other action (which order, decree
or ruling the parties hereto shall use all reasonable efforts to
lift), in each case permanently restraining, enjoining or otherwise
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prohibiting the transactions contemplated by this Agreement, and such
order, decree, ruling or other action shall have become final and
nonappealable;
(d) by the Company in the event a third party makes a
bona fide offer to acquire substantially all of the assets of the
Company, merge, consolidate or otherwise enter into a combination of
interests with the Company.
The date on which this Agreement is terminated pursuant to any of the
foregoing subsections of this Section 7.1 is herein referred to as the
"TERMINATION DATE."
7.2 Effect of Termination. Except as set forth in Sections 5.5,
5.9(a), 5.9(b), and 7.3 upon the termination of this Agreement pursuant to
Section 7.1, this Agreement shall forthwith become null and void, except that
nothing herein shall relieve any party from liability for any breach of this
Agreement prior to such termination.
7.3 Fees and Expenses.
(a) In the event the Company terminates this Agreement
pursuant to Section 7.1(d), the Company shall pay AMRE a fee equal to
$500,000 (the "TERMINATION FEE") at the earlier of the Termination
Date or the acceptance of the bona fide offer. Sections 7.3(a) and
7.3(b) are intended to be mutually exclusive with respect to any
Termination Fee imposed upon the Company so that no more than one
Termination Fee may be imposed; and
(b) In the event (i) the Agreement is terminated pursuant
to Section 7.1(b) or (ii) in the event the Effective Time shall not
have occurred on or before April 30, 1996 and either (i) or (ii) occur
for any reason other than the failure to meet the conditions under
Sections 6.1 and 6.3, AMRE shall pay the Company an amount equal to
the Termination Fee.
ARTICLE 8
GENERAL PROVISIONS
8.1 Notices. All notices and other communications hereunder shall
be in writing and, except where notice is specifically required to be given by
telecopier or facsimile shall be deemed to have been duly given if delivered
personally, mailed by certified mail (return receipt requested) or sent by
cable, telegram, telecopier or telex to the parties at the following addresses
or at such other addresses as shall be specified by the parties by like notice:
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(a) if to AMRE or Merger Sub, a copy of each of the
President and the General Counsel at:
AMRE, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, P.C.
(b) if to the Company:
Congressional Construction Corporation
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
with copies to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇.▇. ▇▇▇▇▇▇▇▇
(c) if to the ESOP:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇.▇. ▇▇▇▇▇▇▇▇, Esq.
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with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
(d) if to the Shareholders:
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
and
Kenwood Financial, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Notice shall be given by telecopy followed by overnight
delivery and notice so given shall be deemed to be given and received
on the date of actual transmission.
8.2 Representations and Warranties. The representations and
warranties contained in: (i) Sections 2.5, 2.9, 2.11, 3.6, 3.10, 3.21 and 3.29
shall survive until the distribution of the assets from the ESOP contemplated
by Section 5.16(vii), and (ii) Section 2.12 shall survive until the expiration
of one year from the Effective Time. All other representations and warranties
of AMRE, Merger Sub, the Company and the Shareholders shall expire on the
Effective Date.
8.3 Closing. The Closing of the transactions contemplated by this
Agreement shall take place at Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P., ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or such other place as
the parties may agree, as soon as practicable after the satisfaction or waiver
of the conditions set forth in Article 6.
8.4 Severability. If any provision of this Agreement shall be
held to be illegal, invalid or unenforceable under any applicable law, then
such contravention or invalidity shall not invalidate the entire Agreement.
Such provision shall be deemed to be modified to the extent necessary to render
it legal, valid and enforceable, and if no such modification shall render it
legal, valid and enforceable, then this Agreement shall be construed as if not
containing the provision held to be invalid, and the rights and obligations of
the parties shall be construed and enforced accordingly.
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8.5 Headings. The headings of the Articles, Sections and
paragraphs of this Agreement have been inserted for convenience of reference
only and do not constitute a part of this Agreement.
8.6 CHOICE OF LAW. EXCEPT TO THE EXTENT ASPECTS OF THE MERGER ARE
SPECIFICALLY GOVERNED BY DELAWARE LAW OR VIRGINIA LAW, THIS AGREEMENT WILL BE
GOVERNED BY THE INTERNAL LAW, INCLUDING VALIDITY, INTERPRETATION AND EFFECT,
AND NOT THE LAW OF CONFLICTS, OF THE STATE OF TEXAS.
8.7 Jurisdiction and Venue. Any legal action or proceeding with
respect to this Agreement may be brought in the courts of the State of Texas or
of the United States for the Northern District of Texas, and, by execution and
delivery of this Agreement, the parties hereby irrevocably accept for
themselves and in respect of their property, generally and unconditionally, the
jurisdiction of the aforesaid courts. The parties hereby irrevocably waive any
objection which they may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in connection with this
Agreement brought in the courts referred to above and hereby further
irrevocably waive and agree not to plead or claim in any such court that any
such action or proceeding brought in any such court has been brought in an
inconvenient forum.
8.8 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, with the
same effect as if all parties had signed the same document. All such
counterparts shall be deemed an original, shall be construed together and shall
constitute one and the same instrument.
8.9 Complete Agreement. This Agreement, those documents expressly
referred to herein and other documents of even date herewith embody the
complete agreement and understanding among the parties and supersede and
preempt any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof
in any way.
8.10 Binding Effect; Benefit; Assignment. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns, and the ESOP shall be deemed a
third party beneficiary of this Agreement, which Agreement shall inure to the
benefit of the ESOP, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by of the parties hereto
or the ESOP without the prior written consent of the other parties.
8.11 Amendment. This Agreement may be amended by the Boards of
Directors of the Company, Merger Sub and AMRE at any time before or after
approval of the Merger by the shareholders of the Company, but, after any such
approval, no amendment shall be made that changes the form or reduces the
amount of consideration to be paid to the shareholders of the Company or that
in any other way materially adversely affects the rights of such shareholders
(other than a termination of this Agreement in accordance with the provisions
hereof) without the further approval of such shareholders. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the parties hereto.
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8.12 Waiver. At any time prior to the Effective Time, any term,
provision or condition of this Agreement may be waived in writing (or the time
for performance of any of the obligations or other acts of the parties hereto
may be extended) by the party that is entitled to the benefits thereof.
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AGREEMENT AND PLAN OF MERGER SIGNATURE PAGE
IN WITNESS WHEREOF, AMRE, Merger Sub, the Company and for the limited
purposes set forth herein, the Shareholders have caused this Agreement to be
executed as of the date first written above.
AMRE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Printed Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Title: President and Chief Executive Officer
-----------------------------------------
AMRE - CONGRESSIONAL ACQUISITION, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Printed Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Title: President and Chief Executive Officer
-----------------------------------------
CONGRESSIONAL CONSTRUCTION CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Printed Name: ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Title: /s/ President
--------------------------
For the limited purposes of Article 3, Article 5 and Article 8:
SHAREHOLDERS
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇▇▇▇▇
S-1
50
KENWOOD FINANCIAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------
Printed Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Title: President, Kenwood Financial, Inc.
-----------------------------------
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