EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
DATED AS OF AUGUST _____, 2002
BETWEEN
LEVY ACQUISITION CO.,
AND
ORIOLE HOMES CORP.
TABLE OF CONTENTS
ARTICLE I THE MERGER ......................................................... 2
1.1 The Merger .......................................................... 2
1.2 Closing ............................................................. 2
1.3 Effective Time of the Merger ........................................ 2
1.4 Effects of the Merger ............................................... 3
1.5 Articles of incorporation; Bylaws ................................... 3
1.6 Directors; Officers ................................................. 3
ARTICLE II CANCELLATION OF THE CAPITAL STOCK OF THE COMPANY AND
PAYMENT WITH RESPECT THERETO ................................................. 3
2.1 Effect on Capital Stock ............................................. 3
2.2 Delivery of Merger Consideration .................................... 4
2.3 Stock Options with Respect to Company Common Stock .................. 6
ARTICLE III REPRESENTATIONS AND WARRANTIES ................................... 7
3.1 Representations and Warranties of the Company ....................... 7
3.2 Representations and Warranties of Levy Acquisition Co. .............. 15
ARTICLE IV COVENANTS RELATING TO CONDUCT OF BUSINESS ......................... 17
4.1 Covenants of Company ................................................ 17
4.2 Covenants of Levy Acquisition Co. ................................... 20
4.3 Competing Transactions .............................................. 21
ARTICLE V ADDITIONAL AGREEMENTS .............................................. 22
5.1 Preparation of the Proxy Statement and Schedule 13E-3 ............... 22
5.2 Stockholders' Meeting ............................................... 22
5.3 Legal Conditions to Merger .......................................... 23
5.4 Brokers or Finders .................................................. 23
5.5 Indemnification ..................................................... 23
5.6 Shareholder Lists ................................................... 24
5.7 Shareholder Litigation .............................................. 24
5.8 Communication to Employees .......................................... 24
ARCTICLE VI CONDITIONS PRECEDENT ............................................. 25
6.1 Conditions to Each Party's Obligation To Effect the Merger .......... 25
6.2 Conditions to Obligations of Levy Acquisition Co. ................... 25
6.3 Conditions to Obligations of Company ................................ 27
ARTICLE VII TERMINATION AND AMENDMENT ........................................ 27
7.1 Termination ......................................................... 27
7.2 Effect of Termination ............................................... 29
7.3 Fees, Expenses and Other Payments ................................... 29
7.4 Amendment ........................................................... 30
7.5 Extension; Waiver ......................................................... 30
ARTICLE VIII GENERAL PROVISIONS ........................................................ 30
8.1 Survival of Representations, Warranties and Agreements .................... 30
8.2 Notices ................................................................... 30
8.3 Certain Definitions ....................................................... 31
8.4 Interpretation ............................................................ 32
8.5 Counterparts .............................................................. 32
8.6 Entire Agreement; No Third Party Beneficiaries; Rights of Ownership ....... 32
8.7 Governing Law; Consent to Jurisdiction .................................... 33
8.8 Severability; No Remedy in Certain Circumstances .......................... 33
8.9 Publicity ................................................................. 33
8.10 Assignment ............................................................... 34
8.11 Adjustment ............................................................... 34
EXHIBIT A Articles of Incorporation of Levy Acquisition Co. ............................ A-1
EXHIBIT B Bylaws of Levy Acquisition Co. ............................................... B-1
INDEX OF DEFINED TERMS
----------------------
Acquisition .............................................................. 1
Acquisition Group ........................................................ 1
Affiliate ................................................................
Agreement ................................................................ 1
Articles of Merger ....................................................... 3
Balance Sheet ............................................................ 10
Beneficial Ownership ..................................................... 27
Beneficially Own ......................................................... 27
Board .................................................................... 1
Certificates ............................................................. 4
Closing .................................................................. 2
Closing Date ............................................................. 2
Code ..................................................................... 6
Company .................................................................. 1
Company Common Stock ..................................................... 1
Company Disclosure Letter ................................................ 7
Company SEC Documents .................................................... 10
Company Stock Options .................................................... 6
Company Stock Plans ...................................................... 6
Competing Transaction .................................................... 17
Consents ................................................................. 21
Effective Time ........................................................... 3
Expenses ................................................................. 25
FBCA ..................................................................... 1
Fairness Opinion ......................................................... 9
GAAP ..................................................................... 10
Governmental Entity ...................................................... 10
Group .................................................................... 27
HSR Filings .............................................................. 10
Independent Advisor ...................................................... 1
Independent Committee .................................................... 1
Levy Acquisition Co. ..................................................... 1
Levy Acquisition Co. Disclosure Letter ................................... 13
Litigation ............................................................... 11
Material ................................................................. 7
Material Adverse Effect .................................................. 7
Merger ................................................................... 1
Option Consideration ..................................................... 6
Payment Agent ............................................................ 4
Payment Fund ............................................................. 4
Person ................................................................... 27
Requisite Regulatory Approvals ........................................... 21
Schedule 13E-3 ........................................................... 18
SEC ....................................................................... 10
Securities Act ............................................................ 10
Shares .................................................................... 1
Stockholders' Meeting ..................................................... 9
Subsidiary ................................................................ 28
Superior Proposal ......................................................... 17
Surviving Corporation ..................................................... 2
Violation ................................................................. 9
Voting Debt ............................................................... 8
Year-End Financial Statements ............................................. 10
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of August
____, 2002, between Levy Acquisition Co., a Florida corporation ("Levy
Acquisition Co.") and Oriole Homes Corp., a Florida corporation (the "Company").
RECITALS
WHEREAS, Levy Acquisition Co. together with its affiliates, including
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇, are the beneficial owners of
1,119,519 shares of Class A Common Stock, par value $.10 per share, of the
Company (the "Class A Stock"), which represents approximately 60.1% of the
outstanding shares of Class A Stock (not including outstanding shares held by
the Company in its treasury or by its Subsidiaries) and 693,299 shares of Class
B Common Stock, par value $.10 per share, of the Company (the "Class B Stock"),
which represents approximately 25.0% of the outstanding Class B Stock (not
including outstanding shares held by the Company in its treasury or by its
Subsidiaries); the Class A Stock and the Class B Stock are collectively referred
to herein as the "Company Common Stock."
WHEREAS, Levy Acquisition Co. has proposed that Levy Acquisition Co.
acquire (the "Acquisition") all of the issued and outstanding shares of Company
Common Stock (the "Shares") not beneficially owned (within the meaning of Rule
13d-3 of the Exchange Act (as defined below)) by Levy Acquisition Co. or any
other Affiliate (as hereinafter defined) of Levy Acquisition Co. (collectively,
the "Acquisition Group").
WHEREAS, in furtherance of the Acquisition, it is proposed that Levy
Acquisition Co. shall be merged with and into the Company, with the Company
continuing as the surviving corporation (the "Merger"), in accordance with the
Florida Business Corporation Act (the "FBCA") and upon the terms and subject to
the conditions set forth herein.
WHEREAS, a special committee of the Board of Directors of the Company
(the "Board"), consisting entirely of non-management directors of the Company
who are not Affiliates (as defined below) of the Acquisition Group (the
"Independent Committee"), was established for, among other purposes, the purpose
of evaluating the Acquisition and making a recommendation to the Board with
regard to the Acquisition.
WHEREAS, the Independent Committee has received the opinion of
vFinance, Inc. (the "Independent Advisor") an independent financial advisor to
the Independent Committee, which was selected by it, that, as of the date
hereof, the consideration to be received by the holders of Shares pursuant to
the Merger is fair to such holders from a financial point of view.
WHEREAS, the Independent Committee, has, after consultation with the
Independent Advisor and independent legal counsel selected by the Independent
Committee, and in light of and subject to the terms and conditions set forth
herein, (i) determined that (x) the Merger Consideration (as defined below), is
fair to the holders of Shares and (y) the Merger is advisable and in the best
interests of the Company and the holders of Shares; (ii) approved, and declared
the advisability of, this Agreement and (iii) determined to recommend that the
Board and the stockholders of the Company vote to adopt this Agreement.
WHEREAS, the Board, based on the unanimous recommendation and approval
of the Independent Committee, has, after consultation with ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇,
LLP, as counsel for the Company, in light of and subject to the terms and
conditions set forth herein, (i) determined that (x) the Merger Consideration
(as defined below), is fair to the holders of Shares and (y) the Merger is
advisable and in the best interests of the Company and the holders of Shares;
(ii) approved, and declared the advisability of, this Agreement and (iii)
determined to recommend that the stockholders of the Company vote to adopt this
Agreement.
WHEREAS, the board of directors of Levy Acquisition Co. has approved
this Agreement, and the shareholders of Levy Acquisition Co. have adopted this
Agreement.
WHEREAS, the Company and Levy Acquisition Co. desire to make certain
representations, warranties, covenants and agreements in connection with the
merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements contained herein, the
parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the FBCA, Levy Acquisition Co. shall
be merged with and into the Company at the Effective Time. At the Effective
Time, the separate existence of Levy Acquisition Co. shall cease, and the
Company shall continue as the surviving corporation (the "Surviving
Corporation") and shall continue under the name "Oriole Homes Corp."
1.2 Closing. Unless this Agreement shall have been terminated pursuant
to Section 7.1 and subject to the satisfaction or waiver of the conditions set
forth in Article VI, the closing of the Merger (the "Closing") will take place
on January 15, 2003, or as promptly thereafter as practicable (and in any event
within two business days) following satisfaction or waiver of the conditions set
forth in Article VI (the "Closing Date"), at 10:00 a.m., Miami, Florida time, at
the offices of ▇▇▇▇▇▇ & ▇▇▇▇, P.A., ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, unless another date (in no event prior to January 15, 2003), time
or place is agreed to in writing by the parties hereto.
1.3 Effective Time of the Merger. As soon as practicable following the
satisfaction or waiver of the conditions set forth in Article VI, the Surviving
Corporation shall file Articles of Merger conforming to the requirements of
Subchapter XI of the FBCA (the "Articles of Merger") with the Secretary of State
of the State of Florida and make all other filings or recordings required by the
FBCA in connection with the Merger. The Merger shall become effective at such
time as the Articles of Merger is duly filed with the Secretary of State of the
State of Florida, or such other time thereafter as is provided in the Articles
of Merger in accordance with the FBCA (the "Effective Time").
1.4 Effects of the Merger. The Merger shall have the effects set forth
in this Agreement and in the applicable provisions of the FBCA.
1.5 Articles of Incorporation; Bylaws. (a) The articles of
incorporation of Levy Acquisition Co. which is attached as Exhibit A hereto, as
in effect immediately prior to the Effective Time, shall be the articles of
incorporation of the Surviving Corporation until thereafter changed or amended
as provided therein or by applicable law; provided that Article I of the
articles of incorporation of the Surviving Corporation shall be amended by the
Articles of Merger to read as follows: "The name of the corporation is: Oriole
Homes Corp."
(b) The bylaws of Levy Acquisition Co. which are attached as
Exhibit B hereto shall be the bylaws of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law.
1.6 Directors; Officers. (a) The directors of Levy Acquisition Co. at
the Effective Time shall be the directors of the Surviving Corporation, until
the earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.
(b) The officers of Levy Acquisition Co. at the Effective Time
shall be the officers of the Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors are duly elected and
qualified, as the case may be.
ARTICLE II
CANCELLATION OF THE CAPITAL STOCK OF THE COMPANY AND PAYMENT WITH RESPECT
THERETO
2.1 Effect on Capital Stock. At the Effective Time, by virtue of the
Merger, and without any action on the part of the holder thereof:
(a) except as set forth in Sections 2.1(b) and (c), each Share issued
and outstanding immediately prior to the Effective Time, shall be converted into
the right to receive an amount in cash, without interest, equal to $4.90 (the
"Merger Consideration") in the manner provided in Section 2.2 hereof;
(b) each share of Company Common Stock issued and held in the Company's
treasury or held by any Subsidiary of the Company immediately prior to the
Effective Time, shall, by virtue of the Merger, cease to be outstanding and
shall be cancelled and retired without payment of any consideration therefor;
(c) each share of Company Common Stock held by any member of the
Acquisition Group immediately prior to the Effective Time shall be cancelled and
retired; and
(d) each share of common stock, par value $.01 per share, of Levy
Acquisition Co. ("Levy Acquisition Co. Common Stock") issued and outstanding
immediately prior to the Effective Time shall be converted into and become one
fully paid and nonassessable share of common stock of the Surviving Corporation.
2.2 Delivery of Merger Consideration.
(a) Payment Agent. As of the Effective Time, Levy Acquisition Co. shall
deposit, or shall cause to be deposited, with a national bank, a state bank with
its principal office in Florida or a trust company designated by Levy
Acquisition Co. (the "Payment Agent"), for the benefit of the holders of Shares,
for payment in accordance with this Article II through the Payment Agent, the
Merger Consideration to be paid in respect of all Shares (such funds deposited
with the Payment Agent, the "Payment Fund").
(b) Payment Procedures. As soon as reasonably practicable after the
Effective Time, the Payment Agent shall mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented Shares (the "Certificates"), the following documents: (i) a letter
of transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Payment Agent and shall be in such form and have such other
provisions as Levy Acquisition Co. may reasonably specify); and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for payment with respect thereto. Upon surrender of a Certificate for
cancellation to the Payment Agent together with such letter of transmittal, duly
executed, the holder of such Certificate shall be entitled to receive in
exchange therefor the Merger Consideration payable with respect to the Shares
represented by such Certificate pursuant to the provisions of this Article II,
and the Certificate so surrendered shall forthwith be cancelled. In the event
that a holder has lost or misplaced a Certificate, an affidavit of loss thereof
(together with an appropriate indemnity and/or bond if Levy Acquisition Co. so
requires by notice in writing to the holder of such Certificate) satisfactory in
form and substance to the Company's transfer agent and the Payment Agent shall
accompany such letter of transmittal in lieu of the applicable Certificate. In
the event of a transfer of ownership of Shares which is not registered in the
transfer records of the Company, payment of the applicable Merger Consideration
may be made to a transferee if the Certificate representing such Shares is
presented to the Payment Agent, accompanied by all documents required to
evidence and effect such transfer and by evidence that any applicable stock
transfer taxes have been paid. Until surrendered as contemplated by this Section
2.2, each Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the Merger Consideration
with respect thereto as contemplated by this Section 2.2. No interest shall
accrue or be paid to any beneficial owner of Shares or any holder of any
Certificate with respect to the Merger Consideration payable upon the surrender
of any Certificate.
(c) No Further Ownership Rights in the Shares. The Merger Consideration
paid with respect to the cancellation of Shares in accordance with the terms
hereof shall be deemed to have been paid in full satisfaction of all rights
pertaining to such Shares and there shall be no
further registration of transfers on the stock transfer books of the Surviving
Corporation of the Shares which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to the
Surviving Corporation for any reason, they shall be cancelled and exchanged as
provided in this Article II.
(d) Termination of Payment Fund. Any portion of the Payment Fund which
remains undistributed to the stockholders of the Company for six (6) months
after the Effective Time shall be delivered to the Surviving Corporation, upon
demand, and any stockholders of the Company who have not theretofore complied
with this Article II shall thereafter look only to the Surviving Corporation for
payment of their claim for the Merger Consideration. Upon termination of the
Payment Fund pursuant to this Section 2.2(d) and upon delivery to the Surviving
Corporation of the balance thereof, the Surviving Corporation shall have the
right to invest any such amount delivered to it in its sole discretion.
(e) No Liability. If any Certificates shall not have been surrendered
prior to five (5) years after the Effective Time (or immediately prior to such
earlier date on which the Merger Consideration in respect of such certificate
would otherwise escheat to or become the property of any Governmental Entity (as
hereinafter defined)), any cash or other property payable in respect of such
Certificate shall, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all claims or interest
of any person previously entitled thereto. Notwithstanding the foregoing, none
of the Surviving Corporation, Levy Acquisition Co. or the Payment Agent shall be
liable to any holder of a Certificate or the shares represented thereby for any
Merger Consideration delivered in respect of such Certificate or the shares
represented thereby to a public official pursuant to any abandoned property,
escheat or other similar law.
(f) Investment of Payment Fund. The Payment Agent shall invest any cash
included in the Payment Fund as directed by the Surviving Corporation. Any
interest or other income resulting from such investments shall be paid to the
Surviving Corporation. The Surviving Corporation shall replace any net losses
incurred by the Payment Fund as a result of investments made pursuant to this
Section 2.2(f).
(g) Withholding Rights. Levy Acquisition Co. or the Payment Agent shall
be entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of Certificates or Shares represented
thereby such amounts (if any) as Levy Acquisition Co. or the Payment Agent is
required to deduct and withhold with respect to the making of such payment under
the Internal Revenue Code of 1986, as amended (the "Code"), or any provision of
state, local or foreign tax law. To the extent that amounts are so withheld by
Levy Acquisition Co. or the Payment Agent, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the holder of
the Shares in respect of which such deduction and withholding was made by Levy
Acquisition Co. or the Payment Agent.
2.3 Stock Options with Respect to Company Common Stock. (a) The Company
shall take all actions necessary pursuant to the terms and provisions of any
outstanding options to acquire shares of Company Common Stock, to cause the
following: (i) all outstanding options to
acquire shares of Company Common Stock granted under the 1994 and 1998 Stock
Option Plans (the "Company Stock Plans") or otherwise (the "Company Stock
Options") shall be exercisable in full immediately prior to the Effective Time,
and (ii) all Company Stock Options that are not exercised prior to the Effective
Time will terminate and expire as of the Effective Time. The Company shall give
written notice to the holders of all Company Stock Options of the foregoing,
which written notice shall include an offer to pay such holder at the Effective
Time, in exchange for the cancellation of such holder's Company Stock Options at
the Effective Time, an amount in cash determined by multiplying (A) the excess,
if any of the Merger Consideration over the applicable exercise price per share
of the Company Stock Option by (B) the number of Shares such holder could have
purchased had such holder exercised such Company Stock Option in full
immediately prior to the Effective Time (such amount, the "Option
Consideration"), and each such Company Stock Option shall thereafter be
canceled. All actions required to be taken pursuant to this Section 2.3(a) with
respect to Company Stock Options has been, or prior to the Effective Time will
be, taken by the Company. Notwithstanding the foregoing no Option Consideration
shall be paid with respect to Company Stock Options beneficially owned by the
Acquisition Group.
(b) Promptly after the Effective Time, the Surviving Corporation shall
cause to be mailed to each holder of Company Stock Options a check payable to
such holder in an amount equal to the Option Consideration payable with respect
to all Company Stock Options held by such holder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. The Company
represents and warrants to Levy Acquisition Co. that, except as specifically
disclosed in the letter dated the date hereof and delivered by the Company to
Levy Acquisition Co. simultaneously with the execution and delivery of this
Agreement (the "Company Disclosure Letter"):
(a) Organization, Standing and Power. Each of the Company and its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, has all
requisite power and authority and all necessary governmental approvals to own,
lease and operate its properties and assets and to conduct its business as it is
now being conducted and is duly qualified and in good standing to do business in
each jurisdiction in which the nature of its business or the ownership or
leasing of its properties and assets makes such qualification necessary, other
than in such jurisdictions where the failure so to qualify would not,
individually or in the aggregate, have a Material Adverse Effect on the Company.
As used in this Agreement, (i) any reference to any event, change or effect
being "material" with respect to any entity means an event, change or effect
which is material in relation to the condition (financial or otherwise),
properties, assets, liabilities, businesses, operations or prospects of such
entity and its Subsidiaries taken as a whole, and (ii) the term "Material
Adverse Effect" means, with respect to the Company, any change, event or effect
shall have occurred that, when taken together with all other adverse changes,
events or effects that
have occurred would or would reasonably be expected to (a) be materially adverse
to the business, assets, properties, results of operations or condition
(financial or otherwise) of such party and its Subsidiaries taken as a whole,
(b) prevent or materially delay the consummation of the Merger; provided,
however, that (i) any adverse effect (economic or otherwise) that is caused by
conditions affecting the economy or security markets generally shall not be
taken into account in determining whether there has been a Material Adverse
Effect, but this exception is not applicable to any such adverse effect that is
caused by condition(s) affecting the industry in which the Company competes or
economies in any locations where the Company owns material assets, including
real property, or has material operations or sales or customers; and (ii) any
direct, adverse effect that results solely from the public announcement of the
transactions contemplated by this Agreement shall not be taken into account in
determining whether there has been a Material Adverse Effect.
The Company has made available to Levy Acquisition Co. true and
complete copies of its articles of incorporation and bylaws and the articles of
incorporation and bylaws (or equivalent organizational documents) of each
Subsidiary of the Company, each as amended to date. Such certificates of
incorporation, bylaws or equivalent organizational documents are in full force
and effect, and neither the Company nor any Subsidiary of the Company is in
violation of any provision of its articles of incorporation, bylaws or
equivalent organizational documents.
(b) Subsidiaries. The Company owns, directly or indirectly, all of the
outstanding capital stock or other equity interests in each of its Subsidiaries
free and clear of any claim, lien, encumbrance, security interest or agreement
with respect thereto. Other than the capital stock or other interests held by
the Company in such Subsidiaries, neither the Company nor any such Subsidiary
owns any direct or indirect equity interest in any person, domestic or foreign.
All of the outstanding shares of capital stock in each of its corporate
Subsidiaries are duly authorized, validly issued, fully paid and nonassessable
and were issued free of preemptive rights and in compliance with applicable
securities laws and regulations. There are no irrevocable proxies or similar
obligations with respect to such capital stock of such Subsidiaries and no
equity securities or other interests of any of its Subsidiaries are or may
become required to be issued or purchased by reason of any options, warrants,
rights to subscribe to, puts, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into or exchangeable for,
shares of any capital stock or any other equity interest of any such Subsidiary,
and there are no agreements, contracts, commitments, understandings or
arrangements by which any such Subsidiary is bound to issue additional shares of
its capital stock or other equity interests, or options, warrants or rights to
purchase or acquire any additional shares of its capital stock or other equity
interests or securities convertible into or exchangeable for such shares or
other equity interests.
(c) Capital Structure. (i) The authorized capital stock of the Company
consists of 20,000,000 shares of Company Common Stock. As of the date hereof,
(A) 1,863,149 shares of Class A Stock were outstanding, (B) 2,772,375 shares of
Class B Stock were outstanding, (C) 29,995 Company Stock Options were
outstanding pursuant to the Company Stock Plan, each such option entitling the
holder thereof to purchase one share of Company Common Stock, (D) 420,000 shares
of Company Common Stock are authorized and reserved for issuance upon the
exercise of outstanding Company Stock Options, and (E) no shares of Company
Common Stock were held by the Company in its treasury or by its Subsidiaries.
The Company Disclosure Letter sets forth a true and complete list of the
outstanding Company Stock Options, including the exercise prices and vesting
schedules therefor.
(ii) No bonds, debentures, notes or other indebtedness having the
right to vote (or convertible into or exercisable for securities having the
right to vote) on any matters on which stockholders may vote ("Voting Debt") of
the Company are issued or outstanding.
(iii) All outstanding shares of the Company's capital stock are
validly issued, fully paid and nonassessable and free of preemptive rights and
were issued in compliance with applicable securities laws and regulations. All
shares of Company Common Stock subject to issuance upon the exercise of Company
Stock Options, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and nonassessable and free of preemptive rights and
will be issued in compliance with applicable securities laws and regulations.
(iv) Except for this Agreement and the Company Stock Plan, there
are no options, warrants, calls, rights, convertible securities, subscriptions,
stock appreciation rights, phantom stock plans or stock equivalents, or other
rights, commitments or agreements of any character to which the Company or any
Subsidiary of the Company is a party or by which it is bound obligating the
Company or any Subsidiary of the Company to issue, deliver or sell, or cause to
be issued, delivered or sold, additional shares of capital stock or any Voting
Debt of the Company or of any Subsidiary of the Company or obligating the
Company or any Subsidiary of the Company to grant, extend or enter into any such
option, warrant, call, right, commitment or agreement. There are no outstanding
contractual obligations of the Company or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any shares of capital stock of the Company or any of
its Subsidiaries.
(d) Authority. (i) The Company has all requisite corporate power and
authority to enter into this Agreement and, subject to approval by the
stockholders of the Company, to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, other than such approval by the
stockholders of the Company. This Agreement has been duly executed and delivered
by the Company and constitutes a valid and binding obligation of the Company
enforceable in accordance with its terms, except as affected by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law). The
affirmative vote of a majority of the outstanding shares of Class A Stock
entitled to vote thereon and of a majority of the outstanding shares of Class B
Stock entitled to vote thereon, each voting as a separate class (the "Company
Shareholder Approval"), at a duly called and held meeting of stockholders (the
"Stockholders' Meeting") is the only vote of the Company's stockholders
necessary to approve this Agreement, the Merger and the other transactions
contemplated by this Agreement. The Independent Committee has been duly
authorized and constituted and the Board, based on the approval and
recommendation of the Independent Committee at a meeting duly called and held,
has (A) determined that (x) the Merger Consideration is fair to the holders of
Shares and (y) the Merger is advisable and in the best interests of the Company
and the holders of Shares, (B) approved and declared the advisability of this
Agreement in accordance with the provisions of the FBCA. The Independent
Committee has received the written opinion (the "Fairness Opinion") of the
Independent Advisor to the effect that, as of the date hereof, the Merger
Consideration to be paid to holders of Shares is fair to such holders from a
financial point of view, and, as of the date hereof, such Fairness Opinion has
not been withdrawn.
(ii) Subject to compliance with the applicable requirements of the
Exchange Act and the filing of the Articles of Merger as contemplated by Section
1.3, the execution and delivery of this Agreement and the Articles of Merger,
the consummation of the transactions contemplated hereby and thereby, and
compliance of the Company with any of the provisions hereof or thereof will not
breach, constitute an ultra ▇▇▇▇▇ act under, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation or the
loss of a material benefit under, or the creation of a lien, pledge, security
interest, charge or other encumbrance on assets (any such breach, ultra ▇▇▇▇▇
act, violation, default, right of termination, cancellation, acceleration loss
or creation, a "Violation") pursuant to, (x) any provision of the articles of
incorporation or bylaws of the Company or the governing instruments of any
Subsidiary of the Company or (y) subject to obtaining or making the consents,
approvals, orders, authorizations, registrations, declarations and filings
referred to in paragraph (iii) below or in the Company Disclosure Letter, any
loan or credit agreement, note, mortgage, indenture, lease, or other agreement,
obligation, instrument, permit, concession, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to the Company or
any Subsidiary of the Company or their respective properties or assets except
Violations under clause (y) which would not have a Material Adverse Effect on
the Company.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign (a "Governmental Entity"), is required by or with respect to the Company
or any Subsidiary of the Company in connection with the execution and delivery
of this Agreement and the Articles of Merger by the Company, the consummation by
the Company of the transactions contemplated hereby and thereby, and compliance
of the Company with any of the provisions hereof or thereof, the failure to
obtain which would have a Material Adverse Effect on the Company, except for (A)
the filing with the Securities and Exchange Commission (the "SEC") of (1) a
Proxy Statement in definitive form relating to the meeting of the Company's
stockholders to be held in connection with the Merger (2) a Transaction
Statement on Schedule 13E-3 (as hereinafter defined) and (3) such other filings
under the Exchange Act as may be required in connection with this Agreement and
the transactions contemplated hereby, (B) the filing of the Articles of Merger
as contemplated by Section 1.1 and appropriate documents with the relevant
authorities of states in which the Company is qualified to do business, and (C)
filings pursuant to the rules of the American Stock Exchange.
(e) SEC Documents. The Company has made available to Levy Acquisition
Co. a true and complete copy of each report, schedule, registration statement
and definitive proxy statement filed by the Company with the SEC since December
31, 1997 (as such documents have since the time of their filing been amended,
the "Company SEC Documents"), which are all the documents (other than
preliminary material) that the Company was required to file with the SEC since
such date. As of their respective dates, (i) the Company SEC Documents complied
in all material respects with the requirements of the Securities Act of 1933, as
amended (the "Securities Act") or the Exchange Act, as the case may be, and the
rules and regulations of the SEC thereunder applicable to such Company SEC
Documents, and (ii) none of the Company SEC Documents contained any untrue
statement of a material fact or omitted 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. Except as disclosed in
the Company Disclosure Letter, the consolidated financial statements of the
Company included in the Company SEC Documents (including, without limitation,
the audited balance sheet and related statements of operations, stockholders'
equity and cash flows of the Company and its Subsidiaries for the fiscal year
ended December 31, 2001, as audited by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP (such balance sheet
is referred to hereinafter as the "Balance Sheet" and the Balance Sheet and
related statements are referred to hereinafter as the "Year-End Financial
Statements"), complied in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a consistent basis during the periods
involved and fairly present the consolidated financial position of the Company
and its consolidated Subsidiaries as at the dates thereof and the consolidated
results of their operations, stockholders' equity and cash flows for the periods
then ended in accordance with GAAP. As of December 31, 2001, neither the Company
nor any of its Subsidiaries had any liabilities or obligations of any nature,
whether or not accrued, contingent or otherwise, that would be required by GAAP
to be reflected on a consolidated balance sheet of the Company and its
Subsidiaries (including the notes thereto) and which were not reflected on the
Balance Sheet. Since December 31, 2001, except as and to the extent set forth in
the Company SEC Documents and except for liabilities or obligations incurred in
the ordinary course of business consistent with past practice and of
substantially the same character, type and magnitude as incurred in the past,
neither the Company nor any of its Subsidiaries has incurred any liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise, that
would have a Material Adverse Effect on the Company. All agreements, contracts
and other documents required to be filed as exhibits to any of the Company SEC
Documents have been so filed. No Subsidiary of the Company is required to file
any form, report or other document with the SEC.
(f) Information Supplied. None of the information included or
incorporated by reference in the Proxy Statement or the Schedule 13E-3 (other
than information concerning Levy Acquisition Co. provided in writing by Levy
Acquisition Co. or their counsel specifically for inclusion or incorporation by
reference therein) will, at the date of mailing to stockholders of the Company
and at the time of the meeting of stockholders to be held in connection with the
Merger, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The Proxy Statement and Schedule
13E-3 (except for information concerning Levy Acquisition Co. provided in
writing by Levy Acquisition Co. or their counsel specifically for inclusion or
incorporation by reference therein) will comply as to form in all material
respects with the provisions of the Exchange Act and the rules and regulations
thereunder.
(g) Absence of Certain Changes or Events. Except as contemplated by
this Agreement or as disclosed in the Company Disclosure Letter or in the
Company SEC Documents, since December 31, 2001, the Company and its Subsidiaries
have conducted their respective businesses only in the ordinary course and
consistent with prior practice and there has not been any event, occurrence,
fact, condition, change, development or effect that has had or could reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
on the Company.
(h) Compliance with Applicable Laws. The Company and its Subsidiaries
have been operating at all times in compliance with all applicable laws and
regulations, and are not in default or violation of any notes, bonds, mortgages,
indentures, contracts, agreements, leases, licenses, permits, franchises, or
other instruments or obligations to which the Company or any of its Subsidiaries
is a party or by which any of their property or assets is bound, except where
any such noncompliance, conflicts, defaults or violations would not have a
Material Adverse Effect on the Company. As of the date hereof, no investigation
by any Governmental Entity with respect to the Company or any of its
Subsidiaries is pending or, to the Company's best knowledge, threatened.
(i) Environmental. Except for any matters which, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect on
the Company, (i) the Company and each of its Subsidiaries is and at all times
has been in compliance with all applicable laws relating to Environmental
Matters; (ii) the Company and each of its Subsidiaries has obtained, and is in
compliance with, all permits, licenses or approvals required by applicable laws
for the use, storage, treatment, transportation, release, emission and disposal
of raw materials, by-products, wastes and other substances, including, without
limitation, hazardous substances and wastes, used or produced by or otherwise
relating to the operations of any of them; and (iii) there are no past or
present events, conditions, activities or practices that would prevent
compliance or continued compliance with any law or give rise to any
Environmental Liability. There are no claims either by any Governmental Entity
or any third party pending, or to the Company's knowledge, threatened, against
the Company or any of its Subsidiaries arising from any Environmental Matter.
As used in this Agreement, the term "Environmental Matters" means any
matter arising out of or relating to pollution or protection of the environment,
human safety or health, or sanitation, including, without limitation, matters
relating to food preparation and handling, emissions, discharges, releases,
exposures or threatened releases of pollutants, contaminants or hazardous or
toxic materials or wastes including petroleum and its fractions, radiation,
polychlorinated byphenols, biohazards and all toxic agents of whatever type or
nature into ambient air, surface water, ground water or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants,
contaminants or hazardous or toxic materials or wastes including petroleum and
its fractions, radiation, biohazards and all toxic agents of whatever type or
nature. "Environmental Liability" means any liability or obligation arising
under any law or under any other theory of law or equity (including, without
limitation, any liability for personal injury, property damage or remediation)
arising from or relating to any Environmental Matters.
(j) Litigation. Except as set forth in the Company SEC Documents, there
are no material claims, actions, suits or legal or administrative arbitrations
or other proceedings or investigations ("Litigation") pending against the
Company or any of its Subsidiaries, or, to the Company's knowledge, threatened
against or affecting the Company or any of its Subsidiaries, or to which the
Company or any of its Subsidiaries is a party, before or by any Federal,
foreign, state, local or other governmental or non-governmental department,
commission, board, bureau, agency, court or other instrumentality, or by any
private person or entity. There are no existing or, to the best knowledge of the
Company, threatened material orders, judgments or decrees of any court or other
Governmental Entity which specifically apply to the Company, any of its
Subsidiaries or any of their respective properties or assets.
(k) Taxes. (i) Each Tax Entity has timely filed all Tax Returns
required to be filed by any of them (subject to permitted extensions). All such
Tax Returns were true, correct and complete when filed, except for such
instances which individually or in the aggregate could not have a Material
Adverse Effect on the Company. All Taxes of each Tax Entity which are (i) shown
as due on such Tax Returns, (ii) otherwise due and payable or (iii) claimed or
asserted by any taxing authority to be due, have been paid, except for those
Taxes being contested in good faith and for which adequate reserves have been
established in the financial statements included in the Company SEC Documents in
accordance with GAAP. The Company does not know of any proposed or threatened
Tax claims or assessments which, if upheld, could individually or in the
aggregate have a Material Adverse Effect on the Company. Each Tax Entity has
withheld and paid over to the relevant taxing authority all Taxes required to
have been withheld and paid in connection with payments to employees,
independent contractors, creditors, shareholders or other third parties, except
for such Taxes which individually or in the aggregate could not have a Material
Adverse Effect on the Company. No material deficiencies for any Taxes have been
proposed, asserted or assessed against any Tax Entity that are not adequately
reserved for, no audit of any Tax Return of any Tax Entity is being conducted by
a tax authority, and no extension of the statute of limitations on the
assessment of any taxes has been granted to any Tax Entity and is currently in
effect. For purposes of this Agreement, (a) "Tax" (and, with correlative
meaning, "Taxes") means any federal, state, local or foreign income, gross
receipts, property, sales, use, license, excise, franchise, employment, payroll,
premium, withholding, alternative or added minimum, ad valorem, transfer or
excise tax, or any other tax, custom, duty, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or
penalty, imposed by any Governmental Entity; (b) "Tax Return" means any return,
report or similar statement required to be filed with respect to any Tax
(including any attached schedules), including, without limitation, any
information return, claim for refund, amended return or declaration of estimated
Tax; and (c) "Tax Entity" means the Company, each of the Company's Subsidiaries,
and each consolidated, combined, unitary or similar group of which the
Company or any of its Subsidiaries is now, or within the preceding eight (8)
years has been, a member.
(ii) No Tax Entity has executed any closing agreement pursuant to
Section 7121 of the Code of any predecessor provisions thereof, or any similar
provision of foreign, state or local law, or has any ruling request pending with
any tax authority. There are no tax certiorari proceedings currently pending,
tax abatements currently in effect or proposed materially increased tax
assessments of which any Tax Entity has been notified or has knowledge in the
contest of such Tax Entity's real estate assets. No assets of any Tax Entity
constitutes tax-exempt financed property or tax-exempt use property within the
meaning of Section 168 of the Code, and no assets of any Tax Entity are subject
to a lease, safe-harbor lease, or other arrangement as a result of which any Tax
Entity is not treated as the owner for federal income tax purposes. No Tax
Entity has filed a consent pursuant to Section 341(f) of the Code or agreed to
have Section 341(f)(2) of the Code apply to any disposition of a "subsection (f)
asset" (as such term is defined in Section 341(f)(4) of the Code). No Tax Entity
(i) is required or has agreed to make any adjustments pursuant to Section 481(a)
of the Code or any similar provision of foreign, state or local law by reason of
a change in accounting method initiated by it or any other relevant party, (ii)
has knowledge that any tax authority has proposed any such adjustment or change
in accounting method, and/or (iii) has an application pending with any tax
authority requesting permission for any changes in accounting methods that
relate to the business or assets of any Tax Entity. No Tax Entity is a party to
any contract, agreement, plan or arrangement covering any periods that,
individually or collectively, could give rise to any amount not being deductible
by reason of Section 280G of the Code. The Company and each of its Subsidiaries
are not, have not been within the preceding eight (8) years, own no interest in,
and have never owned an interest in, "S corporations" within the meaning of
Section 1361(a)(1) of the Code, "qualified subchapter S Subsidiaries" within the
meaning of Section 1361(b)(3)(B) of the Code, "person holding companies" within
the meaning of Section 542 of the Code, "controlled foreign corporations" within
the meaning of Section 957 of the Code, "foreign personal holding companies"
within the meaning of Section 52 of the Code, "passive foreign investment
companies" within the meaning of Section 1296 of the Code, "foreign investment
companies" within the meaning of Section 1246 of the Code, an "FSC" within the
meaning of Section 922 of the Code, or a "DISC" or "Former DISC" within the
meaning of Section 92 of the Code. No Tax Entity has made, been party to, or
been the subject of, any elections under Sections 108, 168, 338, 441, 472,1017,
1033 or 4977 of the Code. No Tax Entity has entered into any transfer pricing
agreements with any tax authority. No assets of any Tax Entity are held in an
arrangement for which partnership Tax Returns are being filed or are required to
be filed. No Tax Entity has availed itself of any Tax amnesty or similar relief
in any taxing jurisdiction. None of Parent or any of its Subsidiaries will be
required to withhold tax under Section 1445 of the Code with respect to any
consideration paid pursuant to this Agreement.
(l) Employee Benefit Plans. All employee benefit plans, compensation
arrangements and other benefit arrangements covering employees of the Company or
any of its subsidiaries (the "Company Benefit Plans") and all employee
agreements providing compensation, severance or other benefits to any employee
or former employee of the Company or any of its Subsidiaries which are not
disclosed in the Company SEC Documents and which
exceed $50,000 per annum are set forth in the Company Disclosure Letter. True
and complete copies of the Company Benefit Plans have been made available to
Parent. To the extent applicable, the Company Benefit Plans comply in all
material respects with the requirements of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and the Code, and any Company
Benefit Plan intended to be qualified under Section 401(a) of the Code has
received a determination letter and, to the knowledge of the Company, continues
to satisfy the requirements for such qualification. Neither the Company nor any
of its Subsidiaries nor any ERISA Affiliate of the Company maintains,
contributes to or is obligated to contribute to or has maintained or contributed
or been obligated to contribute to in the past six (6) years to any benefit plan
which is covered by Title IV of ERISA or Section 412 of the Code or a
"multi-employer plan" within the meaning of Section 3(37) of ERISA or Section
4001(a)(3) of the Code. No Company Benefit Plan nor the Company nor any
Subsidiary has incurred any liability or penalty under Section 4975 of the Code
or Section 502(i) of ERISA or, to the knowledge of the Company, engaged in any
transaction that would reasonably be expected to result in any such liability or
penalty. Each Company Benefit Plan has been maintained and administered in
compliance with its terms and with ERISA and the Code to the extent applicable
thereto, except for such non-compliance which individually or in the aggregate
would not have a Material Adverse Effect on the Company. There is no pending or,
to the knowledge of the Company, anticipated, Litigation against or otherwise
involving any of the Company Benefit Plans and no Litigation (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. All
contributions required to be made as of the date hereof to the company Benefit
Plans have been made or provided for. Except as described in the Company SEC
Documents or as required by law, neither the Company nor any of its Subsidiaries
maintains or contributes to any plan or arrangement which provides 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, and neither the Company nor any of its Subsidiaries has ever
represented, promised or contracted (whether in oral or written form) to any
employee or former employee that such benefits would be provided. No Company
Benefit Plan is under investigation or audit by either the United States
Department of Labor or the Internal Revenue Service. Except as provided of in
this Agreement, the execution of, and performance of the transactions
contemplated in, this Agreement will not (either alone or upon the occurrence of
any additional or subsequent events) constitute an event under any benefit plan,
policy, arrangement or agreement or any trust or loan that will or may result in
any payment (whether of severance pay or otherwise), acceleration, forgiveness
of indebtedness, vesting, distribution, increase in benefits or obligation to
fund benefits with respect to any employee. No payment or benefit which will or
may be made by the Company, any of its Subsidiaries or Parent with respect to
any employee of the Company or any of its Subsidiaries will constitute an
"excess parachute payment" within the meaning of Section 280G(b)(1) of the Code.
For the purposes of this Agreement "ERISA Affiliate" means any business
or entity which is a member of the same "controlled group of corporations,"
under "common control" or an "affiliated service group" with the Company within
the meaning of Sections 414(b), (c) or (m) of the Code, as required to be
aggregated with the Company under Section 414(o) of the Code, or is under
"common control" with the Company, within the meaning of
Section 4001(a)(14) of ERISA, or any regulations promulgated or proposed under
any of the foregoing Sections.
(m) Sections 607.0901 and 607.0902 of the FBCA and the Articles of
Incorporation. The Board and the Independent Committee has approved the Merger
and this Agreement, and such approval is sufficient to comply with or render
inapplicable to the Merger and this Agreement, and the transactions contemplated
by this Agreement, the provisions of Sections 607.0901 and 607.0902 of the FBCA
and the articles of incorporation of the Company. No other state takeover
statute or similar statute or regulation applies or purports to apply to the
Merger, this Agreement or the transactions contemplated by this Agreement. No
provision of the articles of incorporation, bylaws and/or other governing
instruments of the Company or any of its Subsidiaries would restrict or impair
the ability of Levy Acquisition Co. to vote, or otherwise to exercise the rights
of a stockholder with respect to, shares of the Company and any of its
Subsidiaries that may be acquired or controlled by Levy Acquisition Co.
(n) Opinion of Financial Advisor. The Independent Committee and the
Board of Directors has received the opinion of the Independent Advisor dated
__________, 2002, in form and content acceptable to the Independent Committee to
the effect that, as of such date, the consideration to be received by the
holders of the Shares pursuant to this Agreement is fair to holders of the
Shares from a financial point of view, a signed copy of which opinion has been
delivered to Levy Acquisition Co.
3.2 Representations and Warranties of Levy Acquisition Co Levy
Acquisition Co. represents and warrants to the Company as follows:
(a) Organization, Standing and Power. Levy Acquisition Co. is a
corporation, duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, has all requisite power and
authority and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted, and is
duly qualified and in good standing to do business in each jurisdiction in which
the nature of its business or the ownership or leasing of its properties makes
such qualification necessary, other than in such jurisdictions where the failure
so to qualify would not, individually or in the aggregate, have a Material
Adverse Effect on Levy Acquisition Co.
(b) Authority. (i) Levy Acquisition Co. has all requisite corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Levy Acquisition Co.
This Agreement has been duly executed and delivered by Levy Acquisition Co. and
constitutes a valid and binding obligation of Levy Acquisition Co., enforceable
in accordance with its terms, except as affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law).
(ii) Subject to compliance with the applicable requirements of the
Exchange Act and the filing of the Articles of Merger, the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby will not result in any Violation pursuant to (x) any provision of the
articles of incorporation or bylaws of Levy Acquisition Co. or the governing
instruments of any Subsidiary of Levy Acquisition Co. or (y) except as disclosed
in the letter dated the date hereof and delivered by Levy Acquisition Co. to the
Company simultaneously with the execution and delivery of this Agreement (the
"Levy Acquisition Co. Disclosure Letter") and subject to obtaining or making the
consents, approvals, orders, authorizations, registrations, declarations and
filings referred to in paragraph (iii) below or in the Levy Acquisition Co.
Disclosure Letter, any loan or credit agreement, note, mortgage, indenture,
lease, benefit plan or other agreement, obligation, instrument, permit,
concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Levy Acquisition Co., or any
Subsidiary of Levy Acquisition Co. or their respective properties or assets
except Violations under clause (y) above which do not or would not have a
Material Adverse Effect on Levy Acquisition Co..
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is required by
or with respect to Levy Acquisition Co. or any Subsidiary of Levy Acquisition
Co. in connection with the execution and delivery of this Agreement by Levy
Acquisition Co., the consummation by Levy Acquisition Co. of the transactions
contemplated hereby, and compliance by Levy Acquisition Co. with any of the
provisions hereof, the failure to obtain which would have a Material Adverse
Effect on Levy Acquisition Co. except for (A) such filings under the Exchange
Act as may be required in connection with this Agreement and the transactions
contemplated hereby, including the filing of the Schedule 13E-3, and (B) the
filing of the Articles of Merger as contemplated by Section 1.3 and appropriate
documents with the relevant authorities of states in which Levy Acquisition Co.
is qualified to do business.
(c) Ownership of Company Common Stock. The persons listed on the
Joinder hereto (the "Levy Stockholders") are collectively the beneficial owners
of 1,119,519 shares of Class A Stock and 693,299 shares of Class B Stock (the
"Levy Shares"). The Levy Stockholders will, at or prior to the earlier of
Closing or a breach of this Agreement by Levy Acquisition Co., transfer the Levy
Shares to Levy Acquisition Co. The Levy Shares are duly and validly issued and
authorized, fully paid and non-assessable.
(d) Information Supplied. None of the information concerning Levy
Acquisition Co. provided by or on behalf of Levy Acquisition Co. specifically
for inclusion or incorporation by reference in the Proxy Statement or the
Schedule 13E-3 will, at the date of mailing to stockholders and at the times of
the meetings of stockholders to be held in connection with the Merger, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(e) Interim Operations of Levy Acquisition Co. Levy Acquisition Co. was
incorporated on _________, 2002 has engaged in no other business activities and
has conducted its operations only as contemplated hereby.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
4.1 Covenants of Company. During the period from the date of this
Agreement and continuing until the Effective Time, the Company agrees as to
itself and its Subsidiaries that (except as expressly contemplated or permitted
by this Agreement or to the extent that Levy Acquisition Co. shall otherwise
consent in writing):
(a) Ordinary Course. The Company and its Subsidiaries shall carry on
their respective businesses in the usual, regular and ordinary course and use
commercially reasonable efforts to preserve intact their present business
organizations, maintain their rights and preserve their relationships with
employees, officers, customers, suppliers and others having business dealings
with them. The Company and its Subsidiaries shall maintain in force all
insurance policies and Consents (as defined in Section 6.1) with respect to the
Company and its Subsidiaries and shall maintain all assets and properties of the
Company and its Subsidiaries in customary repair, order and condition,
reasonable wear and tear excepted. The Company shall not, nor shall it permit
any of its Subsidiaries to, (i) enter into any new material line of business or
(ii) incur or commit to any significant capital expenditures or any obligations
or liabilities other than capital expenditures and obligations or liabilities
incurred or committed to as disclosed in the Company Disclosure Letter. The
Company and its Subsidiaries will comply with all applicable laws and
regulations wherever its business is conducted, including without limitation the
timely filing of all reports, forms or other documents with the SEC required
pursuant to the Securities Act or the Exchange Act, except where such
noncompliance would not have a Material Adverse Effect on the Company.
(b) Dividends; Changes in Stock. The Company shall not, nor shall it
permit any of its Subsidiaries to, nor shall the Company propose to, (i) declare
or pay any dividends on or make other distributions in respect of any of its
capital stock, other than cash dividends payable by a Subsidiary of the Company
to the Company or one of its Subsidiaries, (ii) split, combine or reclassify any
of its capital stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock, or (iii) repurchase, redeem or otherwise acquire, or permit any
Subsidiary to purchase or otherwise acquire any shares of its capital stock or
any securities convertible into or exercisable for any shares of its capital
stock.
(c) Issuance of Securities. The Company shall not, nor shall it permit
any of its Subsidiaries to, issue, deliver or sell, or authorize or propose the
issuance, delivery or sale of, any shares of its capital stock of any class, any
Voting Debt or any securities convertible into or exercisable for (including any
stock appreciation rights, phantom stock plans or stock equivalents), or any
rights, warrants or options to acquire, any such shares or Voting Debt, or
enter into any agreement with respect to any of the foregoing, other than
issuances of Company Common Stock pursuant to exercises of Company Stock Options
or Company Common Stock awards to directors listed in the Company Disclosure
Letter.
(d) Governing Documents. The Company shall not amend or propose to
amend, nor shall it permit any of its Subsidiaries to amend, their respective
certificates of incorporation, bylaws or other governing instruments.
(e) No Acquisitions. The Company shall not, nor shall it permit any of
its Subsidiaries to, (i) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial equity interest in or a substantial portion
of the assets of, or by any other manner, any business or any corporation,
limited liability company, partnership, association or other business
organization or division thereof or (ii) other than in the ordinary course of
business, otherwise acquire or agree to acquire any assets which, in the case of
this clause (ii), are material, individually or in the aggregate, to the
Company.
(f) No Dispositions. The Company shall not, nor shall it permit any of
its Subsidiaries to, sell, lease, encumber or otherwise dispose of, or agree to
sell, lease, encumber or otherwise dispose of any of its assets (including
capital stock of Subsidiaries), except as disclosed in the Company Disclosure
Letter and for dispositions in the ordinary course of business and consistent
with past practice and of substantially the same character, type and magnitude
as dispositions in the past.
(g) Indebtedness. The Company shall not, nor shall it permit any of its
Subsidiaries to, (i) incur any indebtedness for borrowed money or guarantee any
such indebtedness or issue or sell any debt securities or warrants or rights to
acquire any long-term debt securities of the Company or any of its Subsidiaries
or guarantee any long-term debt securities of others or enter into or amend any
contract, agreement, commitment or arrangement with respect to any of the
foregoing, other than (x) in replacement for existing or maturing debt, (y)
indebtedness of any Subsidiary of the Company to the Company or to another
Subsidiary of the Company or (z) other borrowing under existing lines of credit
in the ordinary course of business consistent with prior practice and of
substantially the same character, type and magnitude as borrowings made in the
past or (ii) make any loans, advances or capital contributions to any person.
(h) Other Actions. The Company shall not, nor shall it permit any of
its Subsidiaries to, take any action that would, or might reasonably be expected
to, result in any of its representations and warranties set forth in this
Agreement being or becoming untrue in any material respect, or in any of the
conditions to the Merger set forth in Article VI not being satisfied, or which
would adversely affect the ability of any of them to obtain any of the Requisite
Regulatory Approvals without imposition of a condition or restriction of the
type referred to in Section 6.2(d) and the Company shall, in the event of, or
promptly after the occurrence of, or promptly after obtaining knowledge of the
occurrence of or the impending or threatened occurrence of, any fact or event
which would cause or constitute a breach of any of the representations and
warranties set forth in this Agreement, the non-satisfaction of any of the
conditions to the Merger set forth in Article VI or the failure to obtain the
Requisite Regulatory
Approvals, in each case at any time after the date hereof and through the
Closing Date, give detailed notice thereof to Levy Acquisition Co., and the
Company shall use its best efforts to prevent or promptly to remedy such breach,
non-satisfaction or failure, as the case may be.
(i) Advice of Changes; Government Filings. The Company shall confer on
a regular basis with Levy Acquisition Co., report on operational matters and
promptly advise Levy Acquisition Co., orally and in writing, of any material
change or event or any change or event which would cause or constitute a
material breach of any of the representations, warranties or covenants of the
Company contained herein. The Company shall file all reports required to be
filed by the Company with the SEC between the date of this Agreement and the
Effective Time and shall deliver to Levy Acquisition Co. copies of all such
reports promptly after the same are filed. The Company shall cooperate with Levy
Acquisition Co. in determining whether any filings are required to be made with,
or consents required to be obtained from, or fees or expenses required to be
paid to, any third party or Governmental Entity prior to the Effective Time in
connection with this Agreement or the transactions contemplated hereby, and
shall cooperate in making any such filings promptly and in seeking to obtain
timely any such consents and, subject to Levy Acquisition Co.'s approval, paying
any such fees or expenses. The Company shall promptly provide Levy Acquisition
Co. with copies of all other filings made by the Company with any Governmental
Entity in connection with this Agreement, the Merger or the other transactions
contemplated hereby.
(j) Accounting Methods. The Company shall not change its methods of
accounting in effect at January 1, 2002, except as required by changes in GAAP
as concurred in by the Company's independent auditors.
(k) Benefit Plans. During the period from the date of this Agreement
and continuing until the Effective Time, the Company agrees as to itself and its
Subsidiaries that it will not, without the prior written consent of Levy
Acquisition Co. except as set forth in the Company Disclosure Letter, (i) enter
into, adopt, amend (except as may be required by law) or terminate any employee
benefit plan or any agreement, arrangement, plan or policy between the Company
or any of its Subsidiaries, on the one hand, and one or more of its or their
directors or officers, on the other hand, (ii) except for normal increases in
the ordinary course of business and consistent with past practice and of
substantially the same character, type and magnitude as increases in the past
that in the aggregate, do not result in a material increase in benefits or
compensation expense to the Company or any of its Subsidiaries, increase in any
manner the compensation or fringe benefits of any director, officer or employee
or pay any benefit not required by any plan and arrangement as in effect as of
the date hereof (including, without limitation, the granting of stock options,
stock appreciation rights, restricted stock, restricted stock units or
performance units or shares) or enter into any contract, agreement, commitment
or arrangement to do any of the foregoing, or (iii) enter into or renew any
contract, agreement, commitment or arrangement providing for the payment to any
director, officer or employee of the Company or any of its Subsidiaries of
compensation or benefits contingent, or the terms of which are materially
altered, upon the occurrence of any of the transactions contemplated by this
Agreement.
(l) Tax Elections. Except in the ordinary course of business and
consistent with past practice and of substantially the same character, type and
magnitude as elections made in the past, the Company shall not make any material
tax election or settle or compromise any material federal, state, local or
foreign income tax claim or liability or amend any previously filed tax return
in any respect.
4.2 Covenants of Levy Acquisition Co. Except as expressly contemplated
by this Agreement, after the date hereof and prior to the Effective Time,
without the prior written consent of the Company (upon the recommendation of the
Independent Committee):
(a) Other Actions. Levy Acquisition Co. shall not, nor shall it permit
any of its Subsidiaries to, take any action that would, or might reasonably be
expected to, result in any of its representations and warranties set forth in
this Agreement being or becoming untrue in any material respect, or in any of
the conditions to the Merger set forth in Article VI not being satisfied, or
which would adversely affect the ability of any of them to obtain any of the
Requisite Regulatory Approvals without imposition of a condition or restriction
of the type referred to in Section 6.2(d).
(b) Government Filings. Levy Acquisition Co. shall cooperate with the
Company in determining whether any filings are required to be made with, or
consents required to be obtained from, any third party or Governmental Entity
prior to the Effective Time in connection with this Agreement or the
transactions contemplated hereby, and shall cooperate in making any such filings
promptly and in seeking to obtain timely any such consents. The Levy Acquisition
Co. shall promptly provide the Company with copies of all other filings made by
the Levy Acquisition Co. with any state or Federal Governmental Entity in
connection with this Agreement, the Merger or the other transactions
contemplated hereby.
4.3 Competing Transactions. Nothing contained in this Agreement shall
prohibit the Company (upon the recommendation of the Independent Committee)
from, prior to the date of the Stockholder's Meeting (i) furnishing information
to, or entering into discussions or negotiations with, any person that makes an
unsolicited written, bona fide proposal to the Company with respect to a
Competing Transaction which could reasonably be expected to result in a Superior
Proposal, if, (A) the failure to take such action would be inconsistent with the
Board's and the Independent Committee's fiduciary duties to the Company's
stockholders under applicable law, and (B) prior to furnishing such information
to, or entering into discussions or negotiations with, such person, the Company
(x) provides reasonable notice to Levy Acquisition Co. to the effect that it is
furnishing information to, or entering into discussions or negotiations with,
such person and (y) receives from such person a fully executed confidentiality
agreement, (ii) complying with Rule 14d-9 or Rule 14e-2 promulgated under the
Exchange Act with regard to a tender or exchange offer, or (iii) failing to make
or withdrawing or modifying its recommendation referred to in Section 5.2, or
recommending an unsolicited, bona fide proposal with respect to a Competing
Transaction which could reasonably be expected to result in a Superior Proposal,
following the receipt of such a proposal, if the failure to take such action
would be inconsistent with the Board's and the Independent Committee's fiduciary
duties to the Company's stockholders under applicable law. As used in this
Agreement, "Competing
Transaction" shall mean any of the following (other than the transactions
contemplated by this Agreement) involving the Company or any of its
Subsidiaries: (i) any merger, consolidation, share exchange, exchange offer,
business combination, recapitalization, liquidation, dissolution or other
similar transaction involving the Company or any of its Subsidiaries; (ii) any
sale, lease, exchange, mortgage, pledge, transfer or other disposition of assets
representing 20% or more of the total assets of the Company and its
Subsidiaries, in a single transaction or series of transactions; (iii) any
tender offer or exchange offer for 20% or more of the outstanding shares of
capital stock of the Company or the filing of a registration statement under the
Securities Act in connection therewith; (iv) any person or group having acquired
Beneficial Ownership of 15% or more or such person or group having increased its
Beneficial Ownership beyond 15% of the outstanding shares of capital stock of
the Company; provided, however, that this clause shall not apply to the "Loeb
Group" consisting of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇▇▇ Family Fund, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇. as Trustees for Loeb ▇▇▇▇▇▇
Hornblower Profit Sharing Trading for Account of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.,
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇ Arbitrage Management, Inc., Loeb Arbitrage
Fund, and Loeb Partners Corporation; or (v) any public announcement of a
proposal, plan or intention to do any of the foregoing or any agreement to
engage in any of the foregoing. For purposes of this Agreement, "Superior
Proposal" means any bona fide written proposal to acquire, directly or
indirectly, for consideration consisting of cash and/or securities, all of the
shares of Company Common Stock then outstanding or all or substantially all of
the assets of the Company and the assumption of the liabilities and obligations
of the Company to be followed by a pro rata distribution of the sale proceeds to
stockholders of the Company, that (i) provides holders of Company Common Stock
with per share consideration that the Independent Committee determines in good
faith, after receipt of advice of its financial advisor, is more favorable from
a financial point of view than the consideration to be received by holders of
Company Common Stock in the Merger, (ii) is determined by the Independent
Committee in its good faith judgment, after receipt of advice of its financial
advisor and outside legal counsel, to be likely of being completed (taking into
account all legal, financial, regulatory and other aspects of the proposal, the
Person making the proposal and the expected timing to complete the proposal),
(iii) does not, in the definitive agreement, contain any "due diligence"
conditions, and (iv) has not been obtained by or on behalf of the Company in
violation of this Section 4.3.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Preparation of the Proxy Statement and Schedule 13E-3. (a) The
Company shall as promptly as practicable prepare and file a proxy or information
statement relating to the Stockholders' Meeting (together with all amendments,
supplements and exhibits thereto, the "Proxy Statement") with the SEC and will
use its best efforts to respond to the comments of the SEC and to cause the
Proxy Statement to be mailed to the Company's stockholders at the earliest
practical time. The Company shall use its best efforts to obtain from the
Financial Advisor an opinion (that shall not at the time of mailing of the Proxy
Statement to the stockholders of the Company be subject to adverse comment by
the SEC) as to the fairness of the transactions
contemplated hereby and to cause the same to be reproduced and furnished to its
stockholders in connection with the Proxy Statement. The Company will notify
Levy Acquisition Co. promptly of the receipt of any comments from the SEC or its
staff and of any request by the SEC or its staff for amendments or supplements
to the Proxy Statement or for additional information and will supply Levy
Acquisition Co. with copies of all correspondence between the Company or any of
its representatives, on the one hand, and the SEC or its staff, on the other
hand, with respect to the Proxy Statement or the Merger. If at any time prior to
the Stockholders' Meeting there shall occur any event that should be set forth
in an amendment or supplement to the Proxy Statement, the Company will promptly
prepare and mail to its stockholders such an amendment or supplement. The
Company will not mail any Proxy Statement, or any amendment or supplement
thereto, to which Levy Acquisition Co. reasonably objects. The Company hereby
consents to the inclusion in the Proxy Statement of the recommendation of the
Board described in Section 5.2, subject to any modification, amendment or
withdrawal thereof, and represents that the Independent Advisor has, subject to
the terms of its engagement letter with the Company, consented to the inclusion
of references to its opinion in the Proxy Statement.
(b) The Company and Levy Acquisition Co. shall together prepare and
file a Transaction Statement on Schedule 13E-3 (together with all amendments and
exhibits thereto, the "Schedule 13E-3") under the Exchange Act. Levy Acquisition
Co. shall furnish all information concerning it, its affiliates and the holders
of its capital stock required to be included in the Schedule 13E-3 and, after
consultation with each other, shall respond promptly to any comments made by the
SEC with respect to the Schedule 13E-3.
5.2 Stockholders' Meeting. The Company shall call the Stockholders'
Meeting to be held as promptly as practicable for the purpose of voting upon the
approval of this Agreement, the Merger and the other transactions contemplated
hereby. The Company will, through its Board and the Independent Committee,
recommend to its stockholders approval of such matters, unless the taking of
such action would be inconsistent with the Board's and the Independent
Committee's fiduciary duties to stockholders under applicable laws. The Company
shall, at the direction of Levy Acquisition Co., solicit from Company
stockholders entitled to vote at the Stockholders' Meeting proxies in favor of
such approval and shall take all other action necessary or, in the judgment of
Levy Acquisition Co., helpful to secure the vote or consent of such holders
required by the FBCA or this Agreement to effect the Merger. The Company shall
coordinate and cooperate with Levy Acquisition Co. with respect to the timing of
such meeting.
5.3 Legal Conditions to Merger. Each of the Company and Levy
Acquisition Co. shall, and shall cause its Subsidiaries to, use all reasonable
best efforts (i) to take, or cause to be taken, all actions necessary to comply
promptly with all legal requirements which may be imposed on such party or its
Subsidiaries with respect to the Merger and to consummate the transactions
contemplated by this Agreement, subject to the approval of stockholders of the
Company described in Section 6.1 (a), and (ii) to obtain (and to cooperate with
the other party to obtain) any consent, authorization, order or approval of, or
any exemption by, any Governmental Entity and of any other public or private
third party which is required to be obtained or made by such party or any of its
Subsidiaries in connection with the Merger and
the transactions contemplated by this Agreement; provided, however, that a party
shall not be obligated to take any action pursuant to the foregoing if the
taking of such action or such compliance or the obtaining of such consent,
authorization, order, approval or exemption is likely, in such party's
reasonable opinion, (x) to be materially burdensome to such party and its
Subsidiaries taken as a whole or to impact in a materially adverse manner the
economic or business benefits of the transactions contemplated by this Agreement
so as to render uneconomic the consummation of the Merger or (y) in the case of
the Company, to result in the imposition of a condition or restriction on the
Company, the Surviving Corporation or any of their respective Subsidiaries of
the type referred to in Section 6.2(d). Each of the Company and Levy Acquisition
Co. will promptly cooperate with and furnish information to the other in
connection with any such burden suffered by, or requirement imposed upon, any of
them or any of their Subsidiaries in connection with the foregoing.
5.4 Brokers or Finders. Except as disclosed to the other party in
writing prior to the date hereof, each of Levy Acquisition Co. and the Company
represents, as to itself, its Subsidiaries and its affiliates, that no agent,
broker, investment banker, financial advisor or other firm or person is or will
be entitled to any broker's or finder's fee or any other commission or similar
fee in connection with any of the transactions contemplated by this Agreement,
except the Independent Advisor, whose fees and expenses will be paid by the
Company in accordance with the Company's agreement with such firm (a copy of
which has been delivered by the Company to Levy Acquisition Co. prior to the
date of this Agreement), and each party agrees to indemnify the other party and
hold the other party harmless from and against any and all claims, liabilities
or obligations with respect to any other fees, commissions or expenses asserted
by any person on the basis of any act or statement alleged to have been made by
such first party or its affiliates.
5.5 Indemnification. (a) As of the Effective Time, the articles of
incorporation of the Surviving Corporation shall contain provisions no less
favorable with respect to indemnification than are set forth in the articles of
incorporation of the Company, which provisions shall not be amended, repealed or
otherwise modified for a period of six years from the Effective Time in any
manner that would adversely affect the rights thereunder of individuals who at
the Effective Time were directors, officers or employees of the Company. Levy
Acquisition Co. and the Company agree that the directors, officers and employees
of the Company covered thereby are intended to be third party beneficiaries
under this Section 5.5 and shall have the right to enforce the obligations of
the Surviving Corporation and the Levy Acquisition Co..
(b) In addition to the indemnification provisions set forth in the
articles of incorporation of the Surviving Corporation as described in
subsection (a) above, Levy Acquisition Co. shall indemnify and hold harmless the
individuals who at any time from the date hereof to the Effective Time were
members of the Board of Directors of the Company (collectively, the "Indemnified
Parties") from and against any and all claims, losses, liabilities and damages,
including, without limitation, amounts paid in settlement, costs of
investigation and fees and disbursements of counsel (whether at the pre-trial,
trial or appellate levels), arising out of or resulting from any action brought
against an Indemnified Party by a third party
(including a security holder of the Company) in their capacity as a member of
the Board of Directors of the Company for any of the following:
(i) any breach of duty, neglect, error, misstatement, misleading
statement, omission or act by such Indemnified Party in their respective
capacities, or any matter claimed against such Indemnified Party solely by
reason of their status as directors of the Company; or
(ii) an alleged violation of any law, regulation or rule, whether
statutory or common law, which arises out of, is based upon or is attributable
to, in party or in whole, the purchase or sale, or offer or solicitation of an
offer to purchase or sell, any securities of the Company.
5.6 Shareholder Lists. The Company shall promptly upon request of Levy
Acquisition Co., or shall cause its transfer agent to promptly, furnish Levy
Acquisition Co. with mailing labels containing the names and addresses of all
record holders of Company Common Stock and with security position listings of
Company Common Stock held in stock depositories, each as of the most recent
practicable date, together with all other available listings and computer files
containing names, addresses and security position listings of record holders and
beneficial owners of Company Common Stock. The Company shall furnish Levy
Acquisition Co. with such additional information, including, without limitation,
updated listings and computer files of stockholders, mailing labels and security
position listings, and such other assistance as Levy Acquisition Co. or its
agents may reasonably request.
5.7 Shareholder Litigation. The Company shall give Levy Acquisition Co.
the opportunity to participate in the defense or settlement of any shareholder
litigation against the Company and its directors relating to the transactions
contemplated by this Agreement; provided, however, that no such settlement shall
be agreed to without Company's and Levy Acquisition Co.'s consent, which shall
not be unreasonably withheld.
5.8 Communication to Employees. The Company and Levy Acquisition Co.
will cooperate with each other with respect to, and endeavor in good faith to
agree in advance upon the method and content of, all written or oral
communications or disclosure to employees of the Company or any of its
Subsidiaries with respect to the Merger and any other transactions contemplated
by this Agreement. Upon reasonable notice, the Company shall provide Levy
Acquisition Co. access to the Company's and its Subsidiaries' employees and
facilities.
5.9 Vote of Levy Acquisition Co.. Levy Acquisition Co. and the Levy
Stockholders shall vote all of their respective shares of Company Common Stock
at the Stockholders' Meeting in favor of the approval of this Agreement, the
Merger and the other transactions contemplated hereby.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions to Each Party's Obligation To Effect the Merger. The
respective obligation of each party to effect the Merger shall be subject to the
satisfaction prior to the Closing Date of the following conditions:
(a) Stockholder Approval. The Company Shareholder Approval shall have
been obtained.
(b) Other Approvals. All authorizations, consents, orders or approvals
of, or declarations or filings with, and all expirations or early terminations
of waiting periods imposed by, any Governmental Entity (all the foregoing,
"Consents") which are necessary for the consummation of the Merger shall have
been filed, occurred or been obtained (all such permits, approvals, filings and
consents and the lapse of all such waiting periods being referred to as the
"Requisite Regulatory Approvals") and all such Requisite Regulatory Approvals
shall be in full force and effect.
(c) No Injunctions or Restraints; Illegality. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect, nor shall any proceeding by any
Governmental Entity seeking any of the foregoing be pending. There shall not be
any action taken, or any statute, rule, regulation or order enacted, entered,
enforced or deemed applicable to the Merger, which makes the consummation of the
Merger illegal.
6.2 Conditions to Obligations of Levy Acquisition Co. The obligations
of Levy Acquisition Co. to effect the Merger are subject to the satisfaction of
the following conditions unless waived by Levy Acquisition Co.:
(a) Representations and Warranties. The representations and warranties
of the Company set forth in this Agreement shall be true and correct in all
respects as of the Effective Time as though made on or as of such time (ignoring
for purposes of this determination any materiality or Material Adverse Effect
qualifications contained within individual representations and warranties),
except for (i) those representations and warranties that address matters only as
of a particular date or only with respect to a specific period of time which
need only be true and correct as of such date or with respect to such period and
(ii) such failures to be true and correct as would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect on the
Company.
(b) Performance of Obligations of Company. The Company shall have
performed and complied in all material respects with all obligations required to
be performed or complied
with by it under this Agreement at or prior to the Closing Date, and Levy
Acquisition Co. shall have received a certificate signed on behalf of the
Company by the President and Chief Executive Officer of the Company and by the
Chief Financial Officer of the Company to such effect.
(c) Consents Under Agreements. The Company shall have obtained the
consent or approval of, except for those consents or approvals for which failure
to obtain such consents or approvals could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company, each Person (other than the Requisite Regulatory Approvals) whose
consent or approval shall be required in order to permit the succession by the
Surviving Corporation pursuant to the Merger to any obligation, right or
interest of the Company or any Subsidiary of the Company under any loan or
credit agreement, note, mortgage, indenture, lease, license or other agreement
or instrument.
(d) Burdensome Condition. There shall not be any action taken, or any
statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the Merger, by any Governmental Entity which, in connection with
the grant of a Requisite Regulatory Approval, imposes any requirement upon Levy
Acquisition Co., the Surviving Corporation or their respective Subsidiaries
which would so materially adversely impact the economic or business benefits of
the transactions contemplated by this Agreement as to render uneconomic the
consummation of the Merger, or which would require Levy Acquisition Co. or any
of its Subsidiaries to dispose of any asset which is material to Levy
Acquisition Co. prior to the Effective Time.
(e) Material Adverse Effect. Since the date of this Agreement, there
shall not have occurred any Material Adverse Effect with respect to the Company.
(f) Legal Opinion of Counsel to the Company. The Company shall have
delivered to Levy Acquisition Co. the opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, as
counsel for the Company, dated as of the Closing Date, in form and substance
satisfactory to Levy Acquisition Co. and its counsel.
(g) Proceedings. All proceedings to be taken on the part of the Company
in connection with the transactions contemplated by this Agreement and all
documents incident thereto shall be reasonably satisfactory in form and
substance to Levy Acquisition Co., and Levy Acquisition Co. shall have received
copies of all such documents and other evidences as Levy Acquisition Co. may
reasonably request in order to establish the consummation of such transactions
and the taking of all proceedings in connection therewith.
(h) No Action. No action, suit or proceeding shall have been
instituted, or shall be pending or threatened (i) seeking to restrain in any
material respect or prohibit the consummation of the Merger, (ii) seeking to
obtain from the Company or Levy Acquisition Co. any damages which would result
in a Material Adverse Effect or (iii) seeking to impose the restrictions,
prohibitions or limitations referred to in subsection (d) above.
6.3 Conditions to Obligations of Company. The obligation of the Company
to effect the Merger is subject to the satisfaction of the following conditions
unless waived by the Company:
(a) Representations and Warranties. The representations and warranties
of Levy Acquisition Co. set forth in this Agreement shall be true and correct in
all respects as of the Effective Time as though made on or as of such time
(ignoring for purposes of this determination any materiality or Material Adverse
Effect qualifications contained within individual representations and
warranties), except for (i) those representations and warranties that address
matters only as of a particular date or only with respect to a specific period
of time which need only be true and correct as of such date or with respect to
such period and (ii) such failures to be true and correct as would not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect on Levy Acquisition Co..
(b) Performance of Obligations of Levy Acquisition Co. Levy Acquisition
Co. shall have performed and complied in all material respects with all
obligations required to be performed by it under this Agreement at or prior to
the Closing Date, and the Company shall have received a certificate signed on
behalf of Levy Acquisition Co. by the President and Chief Executive Officer of
Levy Acquisition Co. or a Corporate Vice President of Levy Acquisition Co., and
by the Senior Vice President and Chief Financial Officer of Levy Acquisition Co.
or the Corporate Vice President and Treasurer of Levy Acquisition Co. to such
effect.
ARTICLE VII
TERMINATION AND AMENDMENT
7.1 Termination. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after approval of the matters presented in
connection with the Merger by the stockholders of the Company:
(a) by mutual consent of Levy Acquisition Co. and the Company (upon the
recommendation of the Independent Committee) in a written instrument, whether or
not the Merger has been approved by the stockholders of the Company;
(b) by Levy Acquisition Co., upon a material breach of any
representation, warranty, covenant or agreement on the part of the Company set
forth in this Agreement, or if any representation or warranty of the Company
shall have become untrue such that the conditions set forth in Section 6.2,
would be incapable of being satisfied by March 31, 2003 (or such later date as
Levy Acquisition Co. may agree to in writing);
(c) by the Company (upon the recommendation of the Independent
Committee), upon a material breach of any representation, warranty, covenant or
agreement on the part of Levy Acquisition Co. set forth in this Agreement, or if
any representation or warranty of Levy Acquisition Co. shall have become untrue
such that the conditions set forth in Section 6.3, would be incapable of being
satisfied by March 31, 2003;
(d) by either Levy Acquisition Co. or the Company (upon the
recommendation of the Independent Committee), if any permanent injunction or
action by any Governmental Entity preventing the consummation of the Merger
shall have become final and nonappealable;
(e) by either Levy Acquisition Co. or the Company (upon the
recommendation of the Independent Committee), if the Merger shall not have been
consummated on or prior to March 31, 2003 (or such later date as may be agreed
to in writing by the Company and Levy Acquisition Co.) (other than due to the
failure of the party seeking to terminate this Agreement to perform its
obligations under this Agreement required to be performed at or prior to the
Effective Time);
(f) by either Levy Acquisition Co. or the Company (upon the
recommendation of the Independent Committee), if any approval of the
stockholders of the Company required for the consummation of the Merger shall
not have been obtained by reason of the failure to obtain the required vote at a
Stockholders' Meeting or at any adjournment thereof;
(g) by Levy Acquisition Co., if the Independent Committee or the
Company (upon the recommendation of the Independent Committee) shall have (i)
withdrawn, modified or changed its approval or recommendation of this Agreement,
the Merger or any of the other transactions contemplated herein in any manner
which is adverse to Levy Acquisition Co. or shall have resolved to do the
foregoing; or (ii) approved or have recommended to the stockholders of the
Company a Competing Transaction or a Superior Proposal, entered into an
agreement with respect to a Competing Transaction or Superior Proposal or shall
have resolved to do the foregoing; or
(h) by Levy Acquisition Co., if (i) the Company shall have exercised a
right specified in the first sentence of Section 4.3 with respect to any
transaction referred to therein and shall, directly or through agents or
representatives, continue discussions with any third party concerning such
transaction for more than 14 calendar days after the date of receipt of such
Competing Transaction, or (ii) (x) a tender offer or exchange offer or a
proposal by a third party to acquire the Company or the Shares pursuant to a
merger, consolidation, share exchange, business combination, tender or exchange
offer or similar transaction shall have been commenced or publicly proposed
which contains a proposal as to price (without regard to the specificity of such
price proposal) and (y) the Company shall not have rejected such proposal within
10 business days of its commencement or the date such proposal first becomes
publicly disclosed, if sooner.
7.2 Effect of Termination. In the event of termination of this
Agreement and abandonment of the Merger by either the Company or Levy
Acquisition Co. as provided in Section 7.1, this Agreement shall forthwith
terminate and there shall be no liability or obligation on the part of Levy
Acquisition Co. or the Company or their respective officers or directors except
with respect to the Sections 5.5 and 7.3; provided, however, that, subject to
the provisions of Section 8.8, nothing herein shall relieve any party of
liability for any breach hereof.
7.3 Fees, Expenses and Other Payments. (a) Except as otherwise provided
in this Section 7.3, whether or not the Merger is consummated, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby (including, without limitation, fees and disbursements of
counsel, financial advisors and accountants) shall be borne solely and entirely
by the party which has incurred such costs and expenses (with respect to such
party, its "Expenses").
(b) The Company agrees that if this Agreement shall be terminated
pursuant to:
(i) Section 7.1(b) and such termination is the result of material
breach of any covenant, agreement, representation or warranty contained herein,
or Section 7.1(e) if the agreement shall have been terminated by the Company and
in each such event at any time during the period commencing on the date hereof
and ending twelve months after the date of termination of this Agreement, a
Competing Transaction shall have been consummated or the Company shall have
entered into a definitive agreement providing for a Competing Transaction;
(ii) Section 7.1(f) because the Agreement and the Merger shall
fail to receive the requisite vote for approval and adoption by the stockholders
of the Company at a meeting of the stockholders of the Company called to vote
thereon, and at the time of such meeting there shall exist a proposal with
respect to a Competing Transaction which either (x) the Board or the Independent
Committee has not publicly opposed or (y) is consummated, or a definitive
agreement with respect to which is entered into, at any time during the period
commencing on the date hereof and ending twelve months after the date of
termination of this Agreement; or
(iii) Section 7.1(g) or Section 7.1(h);
then in each such event the Company shall pay to Levy Acquisition Co. an amount
equal to (A) Levy Acquisition Co.'s Expenses which such Expenses shall not
exceed $350,000 plus (B) if a Competing Transaction is consummated during the
period commencing on the date hereof and ending twelve months after the date of
termination of this Agreement, an additional amount equal to $750,000.
(c) The Company agrees that if this Agreement shall be terminated
pursuant to Section 7.1(b), then the Company shall pay to Levy Acquisition Co.
an amount equal to Levy Acquisition Co.'s Expenses not to exceed $350,000;
provided that the Company shall not be obligated to make any payment pursuant to
this Section 7.3(c) if the Company shall be obligated to make a payment to Levy
Acquisition Co. pursuant to Section 7.3(b).
(d) Any payment required to be made pursuant to Section 7.3(b) or
Section 7.3(c) shall be made as promptly as practicable but not later than five
business days after termination of this Agreement and shall be made by wire
transfer of immediately available funds to an account designated by Levy
Acquisition Co., except that any payment to be made as the result of an event
described in Section 7.3(b)(i) or clause (y) of Section 7.3(b)(ii) shall be made
as promptly as practicable but not later than five business days after the
earlier of (1) date on which a
Competing Transaction shall have been consummated or (2) the date on which the
Company shall have entered into a definitive agreement providing for a Competing
Transaction.
7.4 Amendment. This Agreement may be amended by the parties hereto, by
action taken or authorized by their respective Boards of Directors and the
Independent Committee, at any time before or after approval of the matters
presented in connection with the Merger by the stockholders of the Company or of
Levy Acquisition Co., but, after any such approval, no amendment shall be made
which by law requires further approval by such stockholders without such further
approval. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
7.5 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken or authorized by their respective Boards of
Directors and the Independent Committee, may, to the extent legally allowed, (i)
extend the time for the performance of any of the obligations or other acts of
the other parties hereto, (ii) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto and
(iii) waive compliance with any of the agreements or conditions contained
herein. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in a written instrument signed on behalf
of such party.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Survival of Representations, Warranties and Agreements. None of the
representation, warranties, covenants and agreements in this Agreement or in any
instrument delivered to this Agreement shall survive the Effective Time, except
for the agreements contained in Articles I, II, Sections 5.5, 5.6, 5.8, 7.3 and
Article VIII.
8.2 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (with
confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
(a) if to Levy Acquisition Co., to:
Levy Acquisition Co.
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Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ & ▇▇▇▇, P.A.
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Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
(b) if to the Company, to:
Oriole Homes Corp.
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Attention: ▇▇▇▇ ▇. ▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With a copies to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
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Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
8.3 Certain Definitions. For purposes of this Agreement:
(a) an "Affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person;
(b) "Beneficially Own" or "Beneficial Ownership" with respect to any
securities, means having "beneficial ownership" of such securities in accordance
with the provisions of Rule 13d-3 under the Exchange Act. Without duplicative
counting of the same securities by the same holder, securities beneficially
owned by a person include securities beneficially owned by all other persons
with whom such person would constitute a group;
(c) "Group" means two or more persons acting together for the purpose
of acquiring, holding, voting or disposing of any securities, which persons
would be required to file a Schedule 13D or Schedule 13G with the SEC as a
"person" within the meaning of Section 13(d)(3) of the Exchange Act if such
persons beneficially owned a sufficient amount of such securities to require
such a filing under the Exchange Act;
(d) "Person" means an individual, corporation, limited liability
company, partnership, joint venture, association, trust, unincorporated
organization or other legal entity;
(e) a "Subsidiary" of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
person;
(f) Any accounting term that is used in the context of describing or
referring to an accounting concept and that is not specifically defined herein
shall be construed in accordance with GAAP as applied in the preparation of the
financial statements of the Company included in the Company SEC Documents
(including, without limitation, the Year-End Financial Statements and the
Balance Sheet).
8.4 Interpretation. When a reference is made in this Agreement to
Sections or Exhibits, such reference shall be to a Section of or Exhibit to this
Agreement unless otherwise indicated. The recitals hereto constitute an integral
part of this Agreement. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation". The phrase "made available" in this
Agreement shall mean that the information referred to has been made available if
requested by the party to whom such information is to be made available. The
phrases "the date of this Agreement", the date hereof and terms of similar
import, unless the context otherwise requires, shall be deemed to refer to
___________, 2002.
8.5 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
8.6 Entire Agreement; No Third Party Beneficiaries; Rights of
Ownership. This Agreement (including the documents and the instruments referred
to herein) (a) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof; and (b) except as provided in Sections
2.2, 2.3 and 5.5, is not intended to confer upon any person other than the
parties hereto any rights or remedies hereunder. The parties hereby acknowledge
that, except as hereinafter agreed to in writing, no party shall have the right
to acquire or shall be deemed to have acquired shares of common stock of the
other party pursuant to the Merger until consummation thereof.
8.7 Governing Law; Consent to Jurisdiction. (a) This Agreement shall be
governed by and construed in accordance with the laws of the State of Florida
without regard to the principles of conflicts of laws thereof.
(b) Each of the parties hereto (i) consents to submit itself to the
exclusive personal jurisdiction of any Florida state court or any federal court
located in the State of Florida in the event any dispute arises out of this
Agreement or any of the transactions contemplated by this Agreement and (ii)
agrees that it shall not attempt to deny or defeat such personal jurisdiction by
motion or other request for leave from any such court.
8.8 Severability; No Remedy in Certain Circumstances. Any term or
provision of this Agreement that is invalid or unenforceable in any situation in
any jurisdiction shall not affect the validity or enforceability of the
remaining terms and provisions hereof or the validity or enforceability of the
offending term or provision in any other situation or in any other jurisdiction.
If the final judgment of a court of competent jurisdiction declares that any
term or provision hereof is invalid or unenforceable, the parties agree that the
court making the determination of invalidity or unenforceability shall have the
power to reduce the scope, duration, or area of the term or provision, to delete
specific words or phrases, or to replace any invalid or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified after the
expiration of the time within which the judgment may be appealed unless the
foregoing inconsistent action or the failure to take an action constitutes a
material breach of this Agreement or makes this Agreement impossible to perform,
in which case this Agreement shall terminate pursuant to Article VII hereof.
Except as otherwise contemplated by this Agreement, to the extent that a party
hereto took an action inconsistent herewith or failed to take action consistent
herewith or required hereby pursuant to an order or judgment of a court or other
competent authority, such party shall incur no liability or obligation unless
such party did not in good faith seek to resist or object to the imposition or
entering of such order or judgment.
8.9 Publicity. Except as otherwise required by law or the rules of the
American Stock Exchange, so long as this Agreement is in effect, neither the
Company nor Levy Acquisition Co. shall, or shall permit any of its Subsidiaries
to, issue or cause the publication of any press release or other public
announcement with respect to the transactions contemplated by this Agreement
without the consent of the other party, which consent shall not be unreasonably
withheld.
8.10 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and assigns.
8.11 Adjustment. All dollar amounts and share numbers set forth herein,
including without limitation the Merger Consideration, shall be subject to
equitable adjustment in the event of any stock split, stock dividend, reverse
stock split or similar event affecting the Company Common Stock, between the
date of this Agreement and the Effective Time, to the extent appropriate.
IN WITNESS WHEREOF, Levy Acquisition Co. and the Company have caused
this Agreement, to be signed by their respective officers thereunto duly
authorized, all as of ___________, 2002.
LEVY ACQUISITION CO.
By:____________________________________
Name:__________________________________
Title:_________________________________
ORIOLE HOMES CORP.
By:____________________________________
Name:__________________________________
Title:_________________________________
JOINDER AND ACCEPTANCE
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Each of the undersigned, intending to be legally bound, and
understanding that Levy Acquisition Co. and Oriole Homes Corp. have entered into
that certain Agreement and Plan of Merger, dated as of the date hereof (the
"Agreement"), covenants that it shall be bound by the terms and conditions
contained Section 3.2(c) and Section 5.9 of the Agreement.
The undersigned have executed this Joinder and Acceptance as of the
____ day of ___________, 2002.
By:__________________________________________
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By:__________________________________________
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By:__________________________________________
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Hapco Company
By:__________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, General Partner
Levor Associates
By:__________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇, General Partner
Grandco Associates
By:__________________________________________
▇▇▇▇ ▇. ▇▇▇▇, General Partner