Exhibit 2.1
AGREEMENT OF MERGER
BY AND BETWEEN
TPL ACQUISITION, LLC,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ & ASSOCIATES, LP
AND
TRIAD PARK, LLC
DATED AS OF SEPTEMBER 9, 1997
AGREEMENT OF MERGER
AGREEMENT OF MERGER dated as of September 9, 1997 (this "Merger
Agreement") between TPL ACQUISITION, LLC, a Delaware limited
liability company ("Acquisition"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ & ASSOCIATES, LP,
a California limited partnership ("RCBA") and TRIAD PARK, LLC, a
Delaware limited liability company (the "Company").
W I T N E S S E T H:
WHEREAS, Section 18-209 of the Delaware Limited Liability Company Act
(the "LLCA") authorizes the merger of one Delaware limited liability
company with and into another Delaware limited liability company;
WHEREAS, the manager of Acquisition (the "Acquisition Manager") and
holders of membership interests in Acquisition (the "Acquisition
Share Holders") have determined that it is advisable and in the best
interests of Acquisition and the Acquisition Share Holders, for
Acquisition to merge with and into the Company with the result that
the Acquisition Share Holders shall acquire all of the membership
interests in the Company (the "Company Shares");
WHEREAS, in furtherance of such acquisition, the Acquisition Manager
has approved a merger (the "Merger") of Acquisition with and into the
Company in accordance with the LLCA upon the terms and subject to the
conditions set forth herein, and the manager (the "Company Manager")
and advisory board (the "Advisory Board") of the Company have
approved the Merger in accordance with the LLCA, upon the terms and
subject to the conditions set forth herein, and recommend that the
Merger be accepted by the holders of the Company Shares (the "Company
Share Holders");
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties and agreements contained herein, the
parties hereto agree as follows:
Section 1. MERGER
1.1 MERGER. Upon the terms and subject to the conditions hereof, on
the Effective Date (as defined below in Section 1.2), Acquisition
shall be merged into the Company and the separate existence of
Acquisition shall thereupon cease, and the name of the Company, as
the limited liability company surviving in the Merger (the "Surviving
LLC"), shall by virtue of the Merger remain "Triad Park, LLC."
1.2 EFFECTIVE DATE OF THE MERGER. The Merger shall become effective
when a properly executed Certificate of Merger is duly filed with the
Secretary of State of the State of Delaware, or at such later date
and time as may be specified therein, which filing shall be made as
soon as practicable after the closing of the transactions
contemplated by this Merger Agreement in accordance with Section 3.6.
When used in this Merger Agreement, the term "Effective Date" shall
mean the date and time at which such filing shall have been made or
such later date and time as may be specified in such filing.
1.3 EFFECTS OF THE MERGER. The Merger shall have the effects set
forth in the applicable provisions of the LLCA. Without limiting the
generality of the foregoing, and subject thereto, at the Effective
Date, except as otherwise provided herein, all of the property,
rights, privileges, powers and franchises of Acquisition and the
Company shall vest in the Surviving LLC, and all debts, liabilities
and duties of Acquisition and the Company shall become the debts,
liabilities and duties of the Surviving LLC.
1.4 CERTAIN EXPENSES. Subject to the requirements of this Section
1.4 and beginning with the date of this Merger Agreement, Acquisition
shall promptly pay its and the Company's attorneys' fees and costs
and all legitimate costs of the transaction, including but not
limited to printing and mailing fees and filing fees with the
Securities and Exchange Commission (the "Commission"), as incurred,
in connection with the preparation of documents and solicitation of
proxies required under the federal securities laws. In the event
that the Company retains its counsel for the solicitation of proxies,
Acquisition's obligations under this Section 1.4 shall be limited to
$100,000 for attorney's fees and costs, assuming one round of
comments from the Commission to the submitted documents. Acquisition
shall pay actual time and expenses for work arising out of additional
rounds of comments.
Section 2. THE SURVIVING LLC
2.1 LIMITED LIABILITY COMPANY AGREEMENT. The limited liability
company agreement of Acquisition as in effect immediately prior to
the Effective Date shall be the limited liability company agreement
of the Surviving LLC after the Effective Date except that Section 1.2
thereof shall be amended to state that the name of the company is
Triad Park, LLC, and subject to Section 7.4(c), thereafter may be
amended in accordance with its terms and as provided by law and this
Merger Agreement.
2.2 BY-LAWS. The by-laws of Acquisition as in effect on the
Effective Date shall be the by-laws of the Surviving LLC.
2.3 MANAGER; ADVISORY BOARD. The Acquisition Manager immediately
prior to the Effective Date shall be the manager of the Surviving
LLC. The Surviving LLC shall not have an advisory board.
Section 3. CONVERSION OF SECURITIES
3.1 CONVERSION. As of the Effective Date, by virtue of the Merger
and without any action on the part of any Company Share Holder:
(a) All Company Shares that are held by the Company and any Company
Shares owned by Acquisition shall be canceled.
(b) Each remaining issued and outstanding Company Share issued and
outstanding immediately prior to the Effective Date shall be
converted into the right to receive in cash in the amount of $1.32
per Company Share (the "Merger Consideration").
(c) Each issued and outstanding membership interest in Acquisition
("Acquisition Share") shall be converted into and become one
membership interest in the Surviving LLC.
3.2 DISBURSEMENT OF MERGER CONSIDERATION.
(a) Pursuant to an irrevocable agreement to be entered into on or
before the Effective Date between Acquisition and a disbursing agent
(the "Disbursing Agent") for the benefit of the Company Share Holders
(which shall be a commercial bank or trust company with capital of at
least $350,000,000 or otherwise reasonably satisfactory to the
Company and Acquisition), Acquisition or the Surviving LLC shall
deposit or cause to be deposited with the Disbursing Agent, in trust
for the benefit of the Company's Share Holders, at the Closing, the
Merger Consideration consisting of the cash (in immediately available
funds) to which the Company Share Holders shall be entitled pursuant
to Section 3.1(b). Pending any payments of cash pursuant to Section
3.1(b) of this Merger Agreement, such funds shall be held and
invested by the Disbursing Agent in interest bearing investments with
minimal or no risk to capital as directed by the Surviving LLC, and
any earnings with respect to such funds shall be paid to the
Surviving LLC when requested by the Surviving LLC. Any funds
remaining with the Disbursing Agent one year after the Effective Date
shall be released by the Disbursing Agent to the Surviving LLC after
which time persons entitled thereto may look, subject to applicable
escheat and other similar laws, only to the Surviving LLC for
delivery thereof.
(b) Promptly upon the Effective Date the Surviving LLC shall notify
the Disbursing Agent of the effectiveness of the Merger and shall
cause the Disbursing Agent, pursuant to the irrevocable instructions,
to mail to each person who was, at the Effective Date, a record
holder of an outstanding certificate or certificates which prior
thereto represented Company Shares ("Certificates") a notice and
transmittal form advising such holder of the effectiveness of the
Merger and the procedure for surrendering to the Disbursing Agent
Certificates for exchange for the Merger Consideration. Each holder
of Certificates, upon proper surrender thereof to the Disbursing
Agent together with such transmittal form, duly completed and validly
executed in accordance with the instructions thereto, shall be
entitled to receive the Merger Consideration evidenced by such
Certificates, without any interest thereon, in exchange for such
Certificates and such Certificates shall forthwith be canceled. Until
properly surrendered and exchanged, Certificates shall, after the
Effective Date, be deemed for all purposes to evidence only the right
to receive the Merger Consideration. Notwithstanding the foregoing,
neither the Disbursing Agent nor any party hereto shall be liable to
a holder of Certificates for any amount which may be required to be
paid to a public official pursuant to any applicable abandoned
property, escheat or similar law.
(c) If delivery of the Merger Consideration in respect of canceled
Company Shares is to be made to a person other than the person in
whose name a surrendered Certificate is registered, it shall be a
condition to such delivery or payment that the Certificate so
surrendered shall be properly endorsed or shall be otherwise in
proper form for transfer and that the person requesting such a
delivery or payment shall have paid any transfer and other taxes
required by reason of such delivery or payment in a name other than
that of the registered holder of the Certificate surrendered or shall
have established to the satisfaction of the Surviving LLC and the
Disbursing Agent that such tax either has been paid or is not
payable.
3.3 COMPANY SHARE HOLDERS' MEETING. Unless this Merger Agreement
has been terminated pursuant to Section 9.1, the Company shall take
all action necessary, in accordance with applicable law and its
limited liability company agreement and by-laws, to convene a special
meeting of the Company Share Holders entitled to vote thereat (the
"Company Meeting") as promptly as practicable for the purpose of
considering and taking action upon this Merger Agreement. Subject to
Section 7.6(c), the Company Manager and Advisory Board will recommend
that Company Share Holders entitled to vote thereon vote in favor of
and approve the Merger and the adoption of this Merger Agreement at
the Company Meeting. At the Company Meeting, all of the Company
Shares then owned by Acquisition, or with respect to which
Acquisition holds the power to direct the voting, shall be voted in
favor of approval of the Merger and adoption of this Merger
Agreement.
3.4 CLOSING OF THE COMPANY'S TRANSFER BOOKS. At the close of
business on the Effective Date, the Company Share transfer books
shall be closed and no transfer of any Company Shares shall be made
thereafter. In the event that, after the Effective Date, Certificates
are presented to the Surviving LLC, they shall be canceled and
exchanged for the Merger Consideration as provided in Sections
3.1(b).
3.5 ASSISTANCE IN CONSUMMATION OF THE MERGER. Each of Acquisition
and the Company shall provide all reasonable assistance to, and shall
cooperate with, each other to bring about the consummation of the
Merger as soon as possible in accordance with the terms and
conditions of this Merger Agreement.
3.6 CLOSING. The closing of the transactions contemplated by this
Merger Agreement shall take place (i) at the offices of ▇▇▇▇▇▇▇ ▇.
▇▇▇▇ & Associates, L.P ("RCBA"), ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ at 10:00 A.M. local time as soon as
practicable (but in any event within three business days) after the
day on which the last of the conditions set forth in Section 8 is
fulfilled or waived, but in no event later than January 31, 1998, or
(ii) at such other time and place as Acquisition and the Company
shall agree in writing.
Section 4. REPRESENTATIONS AND WARRANTIES OF ACQUISITION & RCBA
Acquisition and RCBA represent and warrant to the Company as follows:
4.1 EXISTENCE; GOOD STANDING; AUTHORITY. Acquisition is a limited
liability company organized, validly existing and in good standing
under the laws of the State of Delaware, and will be, by October 15,
1997, duly licensed or qualified to do business as a foreign limited
liability company in, and in good standing under the laws of, the
State of California, which constitutes all of the jurisdictions in
which the character of the properties owned or leased by it therein
or in which the transaction of its business makes such qualification
necessary, except where the failure to be so qualified would not
materially and adversely affect the ability of Acquisition to
consummate the transactions contemplated by this Merger Agreement.
RCBA is a limited partnership organized, validly existing and in good
standing under the laws of the State of California, and is in good
standing under the laws of California. Acquisition and RCBA have all
requisite power and authority to own, operate and lease its
properties and carry on its business as and where now conducted. The
copies of the limited liability company agreement and by-laws of
Acquisition to be delivered to the Company within three (3) business
days of the date of this Merger Agreement are true and correct and
are in full force and effect, and there have not been any amendments
or alterations to such documents.
4.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. Acquisition
and RCBA have the requisite power and authority to execute and
deliver this Merger Agreement and to perform their respective
obligations hereunder. The execution and delivery of this Merger
Agreement by Acquisition and RCBA, and consummation by Acquisition of
the transactions contemplated hereby, have been duly authorized by
all requisite action under Acquisition's limited liability company
agreement, RCBA's limited partnership agreement, their respective by-
laws and applicable law. The Acquisition Manager is authorized as it
deems appropriate to execute, acknowledge, verify, deliver, file and
record, for and in the name of Acquisition, the Certificate of Merger
and any and all other documents and instruments required to
consummate the transactions contemplated hereunder. This Merger
Agreement constitutes a valid and binding obligation of Acquisition
and RCBA enforceable against Acquisition and RCBA in accordance with
its terms. No other proceedings on the part of Acquisition or RCBA
are necessary to authorize this Merger Agreement and the transactions
contemplated hereby.
4.3 PROXY STATEMENT. None of the information supplied in writing by
Acquisition and its affiliates specifically for inclusion in the
proxy statement of the Company (the "Proxy Statement") required to be
mailed to the Company Share Holders in connection with the Merger
shall, at the time the Proxy Statement is mailed, at the time of the
Company Meeting or at the Effective Date, 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.
4.4 CONSENTS AND APPROVALS; NO VIOLATION. Neither the execution and
delivery of this Merger Agreement by Acquisition nor the consummation
of the transactions contemplated hereby will (i) conflict with or
result in any breach of any provision of the limited liability
company agreement, limited partnership agreement or the respective
by-laws of Acquisition or RCBA, (ii) require any consent, approval,
authorization or permit of, or filing with or notification to, any
court, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign (each a
"Governmental Entity"), except (A) pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), (B) the filing
of the Certificate of Merger pursuant to the LLCA or (C) where the
failure to obtain such consent, approval, authorization or permit, or
to make such filing or notification, would not prevent or delay
consummation of the Merger or would not otherwise prevent Acquisition
from performing its obligations under this Merger Agreement;
(iii) result in a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or
provisions of any note, license, agreement or other instrument or
obligation to which Acquisition is a party or by which it or any of
its assets may be bound, except for such defaults (or rights of
termination, cancellation or acceleration) as to which requisite
waivers or consents have been obtained or which, in the aggregate,
would not materially and adversely affect the ability of Acquisition
to consummate the transactions contemplated by this Merger Agreement;
or (iv) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Acquisition, or any of its assets, except
for violations which would not materially and adversely affect the
ability of Acquisition to consummate the transactions contemplated by
this Merger Agreement.
4.5 FINANCING. Acquisition at the Effective Date, will have or will
have deposited with the Disbursing Agent (as appropriate) the funds
necessary to consummate the Merger and the transactions contemplated hereby,
and to pay related fees and expenses.
Section 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as provided to the contrary in the attached disclosure
schedule (the "Disclosure Schedule") and the specific Schedules
referenced in this Section 5, the Company makes the representations
and warranties to Acquisition in the following subsections of this
Section. The qualifications, exceptions and disclosures in the
Disclosure Schedule are applicable regardless of whether or not the
individual representation or warranty is qualified by a reference to
all or any part of the Disclosure Schedule. For purposes of this
Section 5, "to the best of the Company's knowledge" or "known to the
Company" or the like shall mean the actual knowledge (without any
obligation of further investigation and without any personal
liability) of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
5.1 EXISTENCE; GOOD STANDING; AUTHORITY. The Company is a limited
liability company organized, validly existing and in good standing
under the laws of the State of Delaware, and is duly licensed or
qualified to do business as a foreign limited liability company in,
and is in good standing under the laws of, the jurisdictions set
forth in Schedule 5.1, which constitute all of the jurisdictions in
which the character of the properties owned or leased by it therein
or in which the transaction of its business makes such qualification
necessary, except where the failure to be so qualified would not have
a Material Adverse Effect (as defined below). The Company has all
requisite power and authority to own, operate and lease its
properties and carry on its business as and where now conducted. The
copies of the limited liability company agreement and by-laws of the
Company delivered to Acquisition are true and correct and are in full
force and effect, and there have not been any amendments or
alterations to such documents. As used in this Merger Agreement,
"Material Adverse Effect" shall mean a material adverse effect on the
business, assets, liabilities, condition (financial or otherwise),
prospects or results of operations of the Company.
5.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. The Company
has the requisite power and authority to execute and deliver this
Merger Agreement and to perform its obligations hereunder. The
execution and delivery of this Merger Agreement by the Company, and
consummation by the Company of the transactions contemplated hereby,
have been duly authorized by all requisite action under the Company's
limited liability company agreement, by-laws and the LLCA, subject
only in the case of this Merger Agreement, to the requisite approval
of this Merger Agreement by the holders of a majority of the Company
Shares. The Company Manager is authorized as it deems appropriate to
execute, acknowledge, verify, deliver, file and record, for and in
the name of the Company the Certificate of Merger and any and all
other documents and instruments required to consummate the
transactions contemplated hereunder. This Merger Agreement
constitutes a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms. Except for the
requisite approval by the holders of Company Shares, no other
proceedings on the part of the Company are necessary to authorize
this Merger Agreement and the transactions contemplated hereby.
5.3 CONSENTS AND APPROVALS; NO VIOLATION. Neither the execution and
delivery of this Merger Agreement by the Company nor the consummation
of the transactions contemplated hereby will (i) conflict with or
result in any breach of any provision of the limited liability
company agreement or by-laws of the Company, (ii) require any
consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Entity, except (A) pursuant to the
Exchange Act, (B) the filing of the Certificate of Merger pursuant to
the LLCA or (C) where the failure to obtain such consent, approval,
authorization or permit, or to make such filing or notification,
would not cause a Material Adverse Effect; (iii) result in a default
(or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions of any
note, license, agreement or other instrument or obligation to which
the Company is a party or by which it or any of its assets may be
bound, except for such defaults (or rights of termination,
cancellation or acceleration) as to which requisite waivers or
consents have been obtained or which, in the aggregate, would not
materially and adversely affect the ability of the Company to
consummate the transactions contemplated by this Merger Agreement; or
(iv) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to the Company or any of its assets, except for
violations which would not cause a Material Adverse Effect.
5.4 CAPITALIZATION. As of the date hereof, 19,708,123 Company Shares
were validly issued and outstanding. As of the date hereof, there are
no bonds, debentures, notes, other indebtedness or any other interest
having the right to vote on any matters on which the Company's Share
Holders may vote issued or outstanding. As of the date hereof, there
are no options, warrants, calls or other rights, agreements or
commitments presently outstanding obligating the Company to issue,
deliver or sell Company Shares or debt securities, or obligating the
Company to grant, extend or enter into any such option, warrant, call
or other such right, agreement or commitment, other than pursuant to
the Rights Agreement ("Rights Agreement") dated as of April 28, 1997,
between the Company and GEMISYS Corporation, as Rights Agent.
5.5 NO SUBSIDIARIES. The Company does not directly or indirectly
own any securities of or any other interest in any other corporation,
partnership, joint venture or other business association or entity.
5.6 REPORTS AND FINANCIAL STATEMENTS. The Company has previously
furnished Acquisition with true and complete copies of (i) its
Registration Statement on Form 10-SB, as filed with the Commission,
(ii) its Quarterly Report on Form 10-QSB for the quarter ended
June 30, 1997, as filed with the Commission and (iii) all other
reports or registration statements filed by the Company with the
Commission that the Company was required to file with the Commission
(the documents listed in clauses (i) through (iii) being referred to
herein collectively as the "Company SEC Reports"). As of their
respective dates, the Company SEC Reports complied in all material
respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, and the rules and regulations of the
Commission thereunder applicable to such Company SEC Reports. As of
their respective dates, the Company SEC Reports did not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading. The audited consolidated financial statements and
unaudited interim financial statements of the Company included in the
Company SEC Reports comply as to form in all material respects with
applicable accounting requirements and with the published rules and
regulations of the Commission with respect thereto, and the financial
statements included in the Company SEC Reports have been prepared in
accordance with generally accepted accounting principles ("GAAP")
applied on a consistent basis (except as may be indicated therein or
in the notes thereto) and fairly present in all material respects the
financial position of the Company at the dates thereof and the
results of its operations and changes in financial position for the
periods then ended, subject, in the case of the unaudited interim
financial statements, to normal year-end audit adjustments and any
other adjustments described therein.
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in
the Company SEC Reports filed prior to the date hereof or in the
Disclosure Schedule, since February 10, 1997, the date the Company
was organized, there has not been (i) any transaction, commitment,
dispute or other event or condition (financial or otherwise) of any
character (whether or not in the ordinary course of business),
individually or in the aggregate, having a Material Adverse Effect;
(ii) any damage, destruction or loss, whether or not covered by
insurance, which, insofar as reasonably can be foreseen, in the
future would be likely to have a Material Adverse Effect; (iii) any
declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to the
Company Shares; (iv) any material increase in the benefits under, or
the establishment or amendment of, any bonus, insurance, severance,
deferred compensation, pension, retirement, profit sharing,
performance awards, Company Share purchase or other employee benefit
plan, or any increase in the compensation payable or to become
payable to any of the employees of the Company, except for increases
in salaries or wages payable or to become payable in the ordinary
course of business and consistent with past practice; (v) any change
by the Company in its significant accounting policies; or (vi) any
entry into any commitment or transaction material to the Company
(including, without limitation, any borrowing or sale of assets)
except in the ordinary course of business consistent with past
practice.
5.8 PROPERTIES.
(a) The title reports identified in the Disclosure Schedule list all
real property owned (the "Owned Property") or leased as lessor or
lessee (the "Leased Property" and collectively with the Owned
Property, the "Property") by the Company.
(b) Except as stated in the Disclosure Schedule, none of the
Property is subject to any purchase options, rights of first refusal
or other preferential purchase rights.
(c) The Leased Property has been leased by the Company on the terms
and conditions stated in the lease and amendments identified in the
Disclosure Schedule. All obligations towards the lessors arising
from the lease agreements referred to before have been complied with
in all material respects. There are no disputes regarding those
agreements pending or, to the knowledge of the Company, threatened.
(d) To the best of the Company's knowledge, except as set forth on
the Disclosure Schedule, no adjacent buildings or improvements extend
across the boundaries of the Owned Property and no buildings or
improvements forming part of the Owned Property extend onto any
adjacent sites.
(e) Other than properties in the Triad Business Park which have been
sold, the Company has not owned or leased any Property except the
Property.
(f) The Disclosure Schedule contains a true, correct and complete
list of all leases, subleases, tenancies, licenses and other rights
of occupancy or use for all or any portion of any Property, and all
guarantees and other agreements in respect thereof, all as amended,
renewed and extended to the date thereof, whether oral or written
(the "Leases").
(g) The Company has heretofore delivered to Acquisition a true,
correct and complete copy of each Lease (or written summary thereof
in the case of oral Leases).
(h) Each current tenant (the "Tenant") is in actual possession of
its leased premises. No Rents violate any applicable law. For
purposes of this Section 5, the term "Rents" is defined to mean the
basic, and additional and percentage rents, all pass-throughs of
taxes, expenses or other items, and all other sums payable by the
Tenant to the lessor (including, without limitation, utility charges)
during the original and any renewal terms thereof.
(i) The following is true with respect to each Lease:
(1) the Lease is valid and subsisting and in full force and effect
strictly in accordance with its terms and has not been modified, in
writing or otherwise, except as set forth on the Disclosure Schedule;
(2) no Lease contains any purchase or similar option;
(3) all obligations of the lessor thereunder which accrue prior to
the Effective Date shall have been performed and paid for in full by
the Company;
(4) to the best of the Company's knowledge, there has been no
default or event which, with the giving of notice or the lapse of
time, or both, would constitute a default, on the part of the Tenant
or the lessor thereunder, and the Tenant has not asserted and has no
defense to, offset or claim against, its Rent or the performance of
its other obligations under the Lease;
(5) the Tenant has not prepaid any Rent; and
(6) the Rents have been assigned to the Company's lender as
additional security.
There are no material construction, management, leasing, service,
equipment, supply, maintenance or concession agreements (oral or
written, formal or informal) with respect to or affecting all or any
portion of the Property except as set forth on Schedule 5.21 (the
"Property Contracts"). A current, complete and correct copy of each
Property Contract has been delivered to Acquisition. Each Property
Contract is valid and subsisting and all amounts due thereunder have
been paid. Except as set out in the Disclosure Schedule, neither the
Company nor any of its agents is in default under any Property
Contract or, to the best of the Company's knowledge, has received any
notice from any party to any Contract claiming the existence of any
default or breach hereunder and no event or omission has occurred
which, with the giving of notice or the lapse of time would
constitute a default. Except as set out in the Disclosure Schedule,
all Property Contracts are terminable without cause on thirty (30)
days' notice or less without payment of any penalty or termination
payment.
(j) To the best of the Company's knowledge, the continued
maintenance, operation and use of any buildings, structures or other
improvements on each Property for their respective present purposes
will not violate any federal, state, county or municipal laws,
ordinances, orders, codes, regulations or requirements in
certificates of occupancy relating to housing, building, safety,
health, fire or zoning (together "Applicable Laws") affecting all or
any portion of each improved Property.
(k) To the best of the Company's knowledge, no written or oral
notice has been given to the Company by any holder of any mortgage or
deed of trust on any Property, by any insurance company which has
issued a policy with respect to any of any Property, or by any board
of fire underwriters (or other body exercising similar functions),
any of which notices claim any defect or deficiency or request the
performance of any repairs, alterations or other work to any
Property.
(l) All state, township, county, school district and other taxes
levied or assessed against any Property and any penalties or interest
due and payable thereon prior to the Effective Date, and all
assessments of any kind levied prior to the Effective Date, if any,
will have been paid in full by the Company and all appropriate tax
returns relating to the same have been filed with the proper
authorities.
(m) The Company has no notice of any proposed increase in the
assessed valuation. To the best of the Company's knowledge, there is
no proceeding pending for the reduction of the assessed valuation of
all or any portion of any Property.
(n) The Company has not received any written or oral notice for
assessments for public improvements against any Property which remain
unpaid, and to the best of the Company's knowledge, no such
assessment has been proposed.
5.9 CONDEMNATION. There is no pending condemnation, expropriation,
eminent domain or similar proceeding affecting all or any portion of
any Property and, to the best of the Company's knowledge, no such
proceeding is contemplated.
5.10 ENVIRONMENTAL MATTERS. For the purposes of this Merger
Agreement:
"Environmental Matters" means any matter arising out of, relating to
or resulting from pollution, protection of the environment and human
health or safety, health or safety of the public or employees,
sanitation, and any matters relating to emissions, discharges,
Releases or threatened Releases of Environmentally Relevant Materials
or otherwise arising out of, resulting from or relating to the
presence, manufacture, packaging, labeling, processing, distribution,
use, generation, treatment, storage, disposal, transport or handling
of or exposure to Environmentally Relevant Materials or arising out
of, resulting from, or relating to compliance with Environmental
Laws.
"Environmental Costs" means, without limitation, any costs of
investigation, remediation, removal, or other response actions,
losses, liabilities, obligations, payments, damages (including, but
not limited to, bodily injury, death or property damage), civil or
criminal fines or penalties, costs of shutdown, diminution in
operations, product withdrawals or discontinuance of distribution of
products (including, but not limited to, direct or indirect damages),
judgments, settlements, interest, costs and expenses (including
attorney's fees and costs) arising out of, relating to or resulting
from any Environmental Matter.
"Environmental Laws" means, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), 42
U.S.C. section 9601 et seq., the Emergency Planning and Community
Right-to-Know Act of 1986, 42 U.S.C. section 11001 et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. section 6901 et seq., the Toxic
Substances Control Act, 15 U.S.C. section 2601 et seq., the Federal
Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. section 136 et seq.,
the Clean Air Act, 42 U.S.C., section 7401 et seq., the Clean Water Act
(Federal Water Pollution Control Act), 33 U.S.C. section 1251 et seq., the
Safe Drinking Water Act, 42 U.S.C. section 300f et seq., the Occupational
Safety and Health Act, 29 U.S.C., section 641 et seq., the Hazardous
Materials Transportation Act, 49 U.S.C. section 1801 et seq., as any of
the above statutes have been or may be amended from time to time, all
rules and regulations promulgated pursuant to any of the above
statutes, and any other federal, state or local law, statute,
ordinance, rule or regulation governing Environmental Matters, as the
same have been or may be amended from time to time, including any
common law cause of action providing any right or remedy with respect
to Environmental Matters, and all applicable judicial and
administrative decisions, orders, and decrees relating to
Environmental Matters.
"Environmentally Relevant Materials" means any pollutants,
contaminants, or hazardous or toxic substances, materials, wastes,
residual materials, constituents or chemicals that are regulated by,
or form the basis for liability under any Environmental Laws,
including but not limited to petroleum products, asbestos and
radioactive materials.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, injecting, discharging, escaping, leaching, dumping or
disposing (or threat of the same occurring) into the environment.
(a) To the best of the Company's knowledge, the Company is in
material compliance with all applicable Environmental Laws. There
are no claims, notices, civil, criminal or administrative actions,
suits, hearings, investigations, penalty assessments, inquiries or
proceedings pending, asserted or, to the knowledge of the Company,
threatened by any governmental or other entity that are based on or
related to any Environmental Matters including, without limitation,
the violation of any Environmental Laws or the violation of or the
failure to have any required permits, licenses, authorizations,
certificates, registrations and other governmental consents and
approvals related to the handling, storage or disposal of
Environmentally Relevant Materials ("Environmental Permits"). There
are presently no outstanding judgments, decrees or orders of any
court or governmental or administrative agency against or affecting
the Company or Property arising from, relating to or resulting from
Environmental Matters.
(b) To the best of the Company's knowledge, except for ongoing
matters related to various creeks, wetlands and wildlife at the
Property, the Company has obtained and is in material compliance with
all Environmental Permits required to be obtained by it under
applicable Environmental Laws in order for the Company to conduct its
business and operations, except where the failure to obtain any
Environmental Permit would not cause a Material Adverse Effect. All
such Environmental Permits are owned by or in the name of the
Company, are in full force and effect and the Company has made in a
timely manner all appropriate filings for issuance or renewal of such
Environmental Permits. No application, action or proceeding is
pending for the renewal or modification of any Environmental Permit;
and no claim, application, complaint, action or proceeding is
pending, asserted or, to the knowledge of the Company, threatened
that may result in the denial of an application for renewal or
transfer or the revocation, modification, non-renewal, restriction,
or suspension of any Environmental Permit. The continued validity
and existence of each of the Environmental Permits is only subject to
the conditions set forth in each such Environmental Permit, and no
additional expenditures are required to be made by the Company or any
third party to maintain or comply with such Environmental Permits
(except as specifically disclosed in such Environmental Permits and
except for changes in applicable Environmental Laws after Closing).
The continued validity of such Environmental Permits is not related
to the continued association of one or more individuals or
corporations or other entities with the Company.
(c) To the best of the Company's knowledge, no Environmentally
Relevant Materials have been Released or are present in connection
with, arising from or relating to any of the Company's operations or
businesses or at, on, about or under any Property either (a) in
violation of applicable Environmental Law or (b) which require or
would require investigation, remediation or other response action
under applicable Environmental Law. No Property is listed or, to the
knowledge of the Company, proposed for listing (for which any of the
Company or the Manager has received notice of such listing or such
listing is otherwise publicly disseminated or a matter of public
record) on the National Priority List pursuant to CERCLA (NPL),
CERCLIS or any similar foreign, federal or state list of sites
requiring investigation, remediation or other response action. To
the best of the Company's knowledge, there are no underground storage
tanks, polychlorinated biphenyls, asbestos-containing materials or
surface impoundments at, on, under or within any Property, and there
have been no underground storage tanks removed from or closed in
place at any Property. The Company has not used any treatment,
storage or disposal site for Environmentally Relevant Materials, or
otherwise treated, stored, disposed of, transported, or arranged for
the treatment, storage or disposal of any Environmentally Relevant
Materials used, generated, handled, or managed by or on behalf of the
Company or in connection with the business or Property to any place
or location which (a) is listed or, to the best of the Company's
knowledge, proposed for listing on the NPL, CERCLIS or any similar
foreign, federal or state list; (b) to the best of the Company's
knowledge, is in violation of any Environmental Laws; or (c) is the
subject of enforcement action or other investigations which could
lead to Environmental Costs to be incurred by any of the Company or
the Surviving LLC. The Company has not, nor, to the best of the
Company's knowledge has any other person reported or received any
oral or written notice of a Release of any Environmentally Relevant
Material used, generated or handled by or for the Company or in
connection with the business or Property. Neither the Company, nor,
to the best of the Company's knowledge, any other person has received
any notice, demand, claim or request for information asserting that
the Company is or may be a potentially responsible party at any
location used for the storage, treatment or disposal of
Environmentally Relevant Materials or where there has been a Release
of any Environmentally Relevant Materials.
(d) Except as listed in the Disclosure Schedule, there have been no
investigations, reports, studies, inspections, audits, tests, reviews
or other analyses conducted by the Company, the Manager, their
respective employees or outside contractors at the direction of any
such person in relation to the following matters: (i) Environmental
Matters, including without limitation potential or actual soil or
groundwater conditions at any Property or business now or previously
owned, operated or leased by the Company; or (ii) the compliance of
the Company's business or Property with applicable Environmental Laws
("Environmental Reports").
(e) To the best of the Company's knowledge, the Company is not aware
of any facts or circumstances related to Environmental Matters
concerning the Company, the business or operations of the Company or
the Property which could reasonably be expected to lead to
Environmental Costs by the Surviving LLC or the Company.
5.11 LITIGATION. Except as listed in the Disclosure Schedule, there
is no suit, action or proceeding pending or, to the best of the
Company's knowledge, threatened against or affecting the Company
which, either alone or in the aggregate, is likely to have a Material
Adverse Effect, nor is there any judgment, decree, injunction, rule
or order of any court, governmental department, commission, agency,
instrumentality or arbitrator outstanding against the Company having,
or which, in the future is likely to have, either alone or in the
aggregate, any Material Adverse Effect.
5.12 INFORMATION IN DISCLOSURE DOCUMENTS. None of the information
supplied or to be supplied by the Company for inclusion or
incorporation by reference in the Proxy Statement or any amendments
or supplements thereto, at the time of the mailing of the Proxy
Statement and any amendments or supplements thereto and at the time
of the Company Meeting, will 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 will comply as to form in all
material respects with the provisions of the Exchange Act and the
rules and regulations thereunder.
5.13 LABOR MATTERS. No labor organization or group of employees of
the Company has made a pending demand for recognition or
certification, and there are no representation or certification
proceedings or petitions seeking a representation proceeding
presently pending or threatened to be brought or filed, with the
National Labor Relations Board or any other labor relations tribunal
or authority. There are no organizing activities, strikes, work
stoppages, slowdowns, lockouts, material arbitrations or material
grievances, or other material labor disputes pending or threatened
against or involving the Company.
5.14 EMPLOYEE BENEFIT PLANS; ERISA. There are no employee benefit
plans, programs, policies, practices, and other arrangements
providing benefits to any employee or former employee (or beneficiary
or dependent thereof) sponsored or maintained by the Company to which
the Company contributes or is obligated to contribute ("Company
Plans").
5.15 COMPANY ACTION. The Manager and the Company Advisory Board (at
a meeting duly called and held) has by the requisite vote (i)
determined that the Merger is advisable and fair and in the best
interests of the Company and its Share Holders, (ii) approved the
Merger in accordance with the provisions of Section 18-209 of the
LLCA, (iii) recommended the approval of this Merger Agreement and the
Merger by the Company Share Holders and directed that the Merger be
submitted for consideration by the Company's Share Holders entitled
to vote thereon at the Company Meeting and (iv) adopted any necessary
resolution having the effect of causing the Company not to be
subject, to the extent permitted by applicable law, to any state
anti-takeover law that may purport to be applicable to the Merger and
the transactions contemplated by this Merger Agreement.
5.16 NO FAIRNESS OPINION. The Company has not received an opinion
of any financial advisors to the Company to the effect that the
consideration to be received by the Company's Share Holders in the
Merger is fair to the Share Holders of the Company.
5.17 FINANCIAL ADVISOR. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in
connection with the Merger or the transactions contemplated by this
Merger Agreement based upon arrangements made by or on behalf of the
Company.
5.18 COMPLIANCE WITH APPLICABLE LAWS. To the best of the Company's
knowledge, the Company holds all permits, licenses, variances,
exemptions, orders and approvals of all Governmental Entities for the
Properties in their current condition (the "Company Permits").
However the real property development business involves a continuous
governmental permitting process and the Company makes no
representation or warranty that the Company holds all permits of
Governmental Entities (including discretionary permits and
ministerial permits such as building permits) that (a) are
additional, supplemental, or ancillary to approval that the Company
currently holds for real property being developed and that would
ordinarily be required or obtained only from time to time as such
development proceeds or (b) would be required for the development of
parts of the Property not yet being developed. The Company is in
compliance with the terms of the Company Permits, except for such
failures to comply which, singly or in the aggregate, would not have
a Material Adverse Effect. To the best of the Company's knowledge,
the businesses of the Company are not being, and have not been,
conducted in violation of any law, ordinance or regulation of any
Governmental Entity, except for possible violations which,
individually or in the aggregate, do not and would not have a
Material Adverse Effect. To the best of the Company's knowledge, no
investigation or review by any Governmental Entity with respect to
the Company is pending or threatened, nor has any Governmental Entity
indicated an intention to conduct the same, other than those the
outcome of which would not have a Material Adverse Effect.
5.19 LIABILITIES. Except as set forth in the Disclosure Schedule,
as of June 30, 1997, the Company did not have any liability or
obligation (absolute, accrued, contingent or otherwise, in contract,
tort or otherwise and whether or not required by GAAP to be reflected
in the Company's balance sheet or other books and records) (a
"Liability"), other than such Liabilities which, individually or in
the aggregate, would not have a Material Adverse Effect. From and
after June 30, 1997, the Company has not incurred, suffered,
permitted to exist or otherwise become subject to any Liability,
other than Liabilities incurred in the ordinary course of business in
accordance with past practice which, individually or in the
aggregate, would not have a Material Adverse Effect.
5.20 TAXES. The Company has filed all material tax returns,
declarations and reports required to be filed by any of them (taking
into account all valid extensions of filing dates) and has paid, or
has set up an adequate liability reserve in accordance with GAAP for
the payment of, all taxes required to be paid in respect of the
periods covered by such returns, declarations and reports. The
information contained in such tax returns, declarations and reports
is true, complete and accurate in all material respects. The Company
is not delinquent in the payment of any tax, assessment or
governmental charge, except where such delinquency has not had or
would not reasonably be expected to have, a Material Adverse Effect.
No material deficiencies for any taxes have been proposed, asserted
or assessed against the Company that have not been finally settled or
paid in full and no requests for waivers of the time to assess any
such tax are pending. No tax return, declaration or report is
currently under audit by any taxing authority, and as of the date
hereof no written notice of any such audit has been received. For
the purposes of this Merger Agreement, the term "tax" shall include
all federal, state, local and foreign income, profits, franchise,
gross receipts, payroll, sales, employment, use, property,
withholding, excise and other taxes, duties and assessments of any
nature whatsoever together with all interest, penalties and additions
imposed with respect to such amounts.
5.21 CERTAIN AGREEMENTS. Except as set forth on Schedule 5.21, the
Company is not a party or subject to any oral or written
(i) agreement, contract, indenture or other instrument relating to
Indebtedness (as defined below) in an amount exceeding $100,000;
(ii) joint venture agreement or arrangement or any other agreement
which has involved or is expected to involve a sharing of revenues;
(iii) lease for real or personal property in which the amounts of
payments which the Company or any subsidiary is required to make on
an annual basis exceeds $25,000; (iv) agreement, contract, policy,
license, document, instrument, arrangement or commitment that limits
in any material respect the freedom of the Company to compete in any
line of business or with any person or in any geographical area or
which would so limit the freedom of the Company after the Effective
Date; (v) employment, consulting, severance, termination, or
indemnification agreement, contract or arrangement providing for
future payments with any current or former officer, consultant or
employee which (A) exceeds $10,000 per annum or (B) requires
aggregate annual payments or total payments over the life of such
agreement, contract or arrangement to such current or former officer,
consultant or employee in excess of $10,000 or $25,000, respectively,
and is not terminable before and after the Merger by it on 30 days'
notice or less without penalty or obligation to make payments related
to such termination; or (vi) other agreement, contract, policy,
license, document, instrument, arrangement or commitment not made in
the ordinary course of business that is material to the Company.
"Indebtedness" means any liability in respect of (A) borrowed money,
(B) capitalized lease obligations, (C) the deferred purchase price of
property or services (other than trade payables in the ordinary
course of business) and (D) guarantees of any of the foregoing. The
Company is not in default (or would be in default with notice or
lapse of time, or both) under any indenture, note, credit agreement,
loan document, lease, contract, policy, license, document,
instrument, arrangement or commitment (a "Contract") whether or not
such default has been waived, which default, alone or in the
aggregate with other such defaults, would have a Material Adverse
Effect. The Company is not a party to or bound by any Contract which
upon execution of this Merger Agreement or consummation of the
transactions contemplated hereby will (either alone or upon the
occurrence of additional acts or events) result in the loss of any
material benefit, the termination thereof or any payment becoming
accelerated or due from the Company or the Surviving LLC which loss,
termination or acceleration would have a Material Adverse Effect.
Section 6. CONDUCT OF BUSINESS PENDING THE MERGER
6.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. Prior to
the Effective Date, unless Acquisition shall otherwise agree in
writing:
(a) the Company shall carry on its business in the usual, regular
and ordinary course in substantially the same manner as heretofore
conducted, and shall use its diligent efforts to preserve intact its
present business organizations, keep available the services of its
present officers and employees and preserve their relationships with
customers, suppliers and others having business dealings with them to
the end that their goodwill and ongoing businesses shall be
unimpaired at the Effective Date. The Company shall (A) maintain
insurance coverages and its books, accounts and records in the usual
manner consistent with prior practices; (B) comply in all material
respects with all laws, ordinances and regulations of Governmental
Entities applicable to the Company; (C) maintain and keep its
properties and equipment in good repair, working order and condition,
ordinary wear and tear excepted; and (D) perform in all material
respects its obligations under all contracts and commitments to which
it is a party or by which it is bound, in each case other than where
the failure to so maintain, comply or perform, either individually or
in the aggregate, would not result in a Material Adverse Effect;
(b) except as required by this Merger Agreement, the Company shall
not and shall not propose to (A) sell or pledge or agree to sell or
pledge any membership interest; (B) amend its limited liability
company agreement or by-laws; (C) split, combine or reclassify its
outstanding membership interests or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in
substitution for shares of membership interests of the Company, or
declare, set aside or pay any dividend or other distribution payable
in cash, securities or other property; or (D) directly or indirectly
redeem, purchase or otherwise acquire or agree to redeem, purchase or
otherwise acquire any Company Shares;
(c) the Company shall not (A) except as contemplated by this Merger
Agreement, issue, deliver or sell or agree to issue, deliver or sell
any additional shares of, or rights of any kind to acquire any shares
of, its membership interest of any class, any Indebtedness or any
options, rights or warrants to acquire, or securities convertible
into membership interests; (B) acquire, lease or dispose of, or agree
to acquire, lease or dispose of, any capital assets or any other
assets other than in the ordinary course of business; (C) incur
additional Indebtedness or encumber or grant a security interest in
any asset or enter into any other material transaction other than in
each case in the ordinary course of business (other than as set forth
in Schedule 6.1); (D) acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial equity interest
in, or by any other manner, any business or any corporation,
partnership, association or other business organization or division
thereof, in each case in this clause (D) which are material,
individually or in the aggregate, to the Company; or (E) enter into
any contract, agreement, commitment or arrangement with respect to
any of the foregoing;
(d) the Company shall not, except as required to comply with
applicable law, (A) adopt, enter into, terminate or amend any bonus,
profit sharing, compensation, severance, termination, stock option,
pension, retirement, deferred compensation, employment or other
Company Plan, agreement, trust, fund or other arrangement for the
benefit or welfare of any current or former officer, employee or
independent contractor; (B) other than as set forth in Schedule 6.1,
increase in any manner the compensation or fringe benefit of any
officer, employee or independent contractor; (C) other than as set
forth in Schedule 6.1, pay any benefit not provided under any
existing plan or arrangement; (D) other than as set forth in Schedule
6.1, grant any awards under any bonus, incentive, performance or
other compensation plan or arrangement or Company Plan (including,
without limitation, the grant of equity based or related awards,
performance units or restricted equity, or the removal of existing
restrictions or the acceleration of exercisability in any Company
Plan or agreements or awards made thereunder); (E) take any action to
fund or in any other way secure the payment of compensation or
benefits under any employee plan, agreement, contract or arrangement
or Company Plan; or (F) adopt, enter into, amend or terminate any
contract, agreement, commitment or arrangement to do any of the
foregoing;
(e) the Company shall not make any investments in non-investment
grade securities; and
(f) the Company shall not, except as required by law or GAAP, change
any of its significant accounting policies or make or rescind any
express or deemed election relating to taxes, settle or compromise
any claim, action, suit, litigation, proceeding, arbitration,
investigation, audit or controversy relating to taxes, or change any
of its methods of reporting income or deductions for federal income
tax purposes from those employed in the preparation of the federal
income tax returns for the last taxable year.
6.2 NOTICE OF BREACH. Each party shall promptly give written notice
to the other party upon becoming aware of the occurrence or, to its
knowledge, impending or threatened occurrence, of any event which
would cause or constitute a breach of any of its representations,
warranties or covenants contained or referenced in this Merger
Agreement and will use its best efforts to prevent or promptly remedy
the same. Any such notification shall not be deemed an amendment of
any Schedule hereto.
Section 7. ADDITIONAL AGREEMENTS
7.1 ACCESS AND INFORMATION. Subject to the limitations imposed by
third party confidentiality agreements, the Company shall afford to
Acquisition and its accountants, counsel and other representatives
full access during normal business hours (and at such other times as
the parties may mutually agree) throughout the period prior to the
Effective Date to all of its properties, books, contracts,
commitments, records and personnel and, during such period, the
Company shall furnish promptly to Acquisition (i) a copy of each
report, schedule and other document filed or received by it pursuant
to the requirements of federal or state securities laws, and (ii) all
other information concerning its business, properties and personnel
as Acquisition may reasonably request. The Company and Acquisition
shall hold, and shall cause its employees and agents to hold, in
confidence all such information in accordance with the terms of the
Confidentiality Agreement, effective August 19, 1997, between
Acquisition and the Company (the "Confidentiality Agreement").
Acquisition shall indemnify and hold the Company harmless from any
and all claims, liens, losses or damage, including attorneys' fees,
arising out of the physical presence of employees, agents or
contractors of Acquisition or RCBA at the Company and out of any
tests or inspections of the Company's Property by or on behalf of
Acquisition or RCBA.
7.2 PROXY STATEMENT.
(a) As promptly as practicable after the execution of this Merger
Agreement, the Company and Acquisition shall prepare and the Company
shall file with the Commission preliminary proxy materials which
shall constitute the preliminary Proxy Statement. As promptly as
practicable after comments are received from the Commission with
respect to the preliminary proxy materials and after the furnishing
by the Company and Acquisition of all information required to be
contained therein, the Company shall file with the Commission the
definitive Proxy Statement.
(b) Acquisition and the Company shall make all necessary filings
with respect to the Merger under the Securities Act and the Exchange
Act and the rules and regulations thereunder and under applicable
blue sky or similar securities laws and shall use all reasonable
efforts to obtain required approvals and clearances with respect
thereto.
7.3 MEETING. As promptly as possible, the Company shall notice a
Share Holder's meeting for the purpose of approving the Merger. The
Company shall solicit management proxies to vote in favor of the
Merger in connection with this meeting.
7.4 INDEMNIFICATION.
(a) All rights to indemnification existing in favor of the current
or former officers or employees of the Company as provided in the
limited liability company agreement or by-laws, as in effect as of
the date hereof, with respect to matters occurring through the
Effective Date, shall survive the Merger and shall continue in full
force and effect for a period of not less than six years from the
Effective Date, provided, however, that, prior to the Effective Time
and with Acquisition's prior consent (such consent not required if
the cost does not exceed $110,000), the Company may purchase
additional policies of directors' and officers' liability insurance
of at least the same coverage as currently maintained by the Company,
such policies to be pre-paid and in effect for a period of six years
from the Effective Date.
(b) In the event that any action, suit, proceeding or investigation
relating hereto or to the transactions contemplated by this Merger
Agreement is commenced, whether before or after the Effective Date,
the parties hereto agree to cooperate and use their respective
reasonable efforts to vigorously defend against and respond thereto.
(c) The provisions of the limited liability company agreement and
by-laws of the Surviving LLC pertaining to indemnification of current
and former directors, officers and employees shall not be amended,
repealed or otherwise modified for a period of six years after the
Effective Date (or, in the case of matters which are pending but
which have not been resolved prior to the sixth anniversary of the
Effective Date, until such matters are finally resolved), in any
manner that would adversely affect the rights thereunder of
individuals who at any time on or prior to the Effective Date were
directors, officers or employees of the Company in respect of actions
or omissions occurring on or prior to the Effective Date (including,
without limitation, the transactions contemplated by this Merger
Agreement).
7.5 ADDITIONAL AGREEMENTS.
(a) Subject to the terms and conditions herein provided, each of the
parties hereto agrees to use all reasonable efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations
to consummate and make effective the transactions contemplated by
this Merger Agreement, including using all reasonable efforts to
obtain all necessary waivers, consents and approvals, to effect all
necessary registrations and filings (including, but not limited to,
filings with all applicable Governmental Entities) and to lift any
injunction or other legal bar to the Merger, subject to the
appropriate vote of the Share Holders. Notwithstanding the
foregoing, Acquisition shall not be required to take any action, and
without Acquisition's prior written consent the Company shall agree
not to take any action, that would in any way restrict or limit the
conduct of business from and after the Effective Date by the
Surviving LLC of either (including, without limitation, any
divestiture of any business, product line or asset).
(b) In case at any time after the Effective Date any further action
is necessary or desirable to carry out the purposes of this Merger
Agreement, the proper officers and/or directors of the Surviving LLC
shall take all such necessary action.
7.6 NO SOLICITATION.
(a) As used herein, the term "Acquisition Proposal" means any
proposed (i) merger, consolidation or similar transaction involving
the Company, (ii) sale, lease or other disposition directly or
indirectly by merger, consolidation, share exchange or otherwise of
either (A) assets of the Company representing 75% or more of the
consolidated assets of the Company (based upon the valuations
contained in the confidential report of the Sedway Group dated July
22, 1997 (the "Sedway Report")) in one transaction (but not
solicitation of sales of individual parcels of the Property), or
(B) all or substantially all of the undeveloped Property in one
transaction (but not solicitation of sales of individual parcels of
the undeveloped Property), (iii) issue, or other acquisition or
disposition of (including by way of merger, consolidation, share
exchange or any similar transaction) securities (or options, rights
or warrants to purchase, or securities convertible into, such
securities) representing 20% or more of the voting power of the
Company or (iv) transaction in which any person shall or would
acquire beneficial ownership (as such term is defined in Rule 13d-3
under the Exchange Act), or the right to acquire beneficial
ownership, or any "group" (as such term is defined under the Exchange
Act) shall have been formed which beneficially owns or would own or
has or would have the right to acquire beneficial ownership of 20% or
more of the outstanding Company Common Stock, other than transactions
contemplated by this Merger Agreement.
(b) The Company shall not, nor shall the Company authorize or permit
its officers, employees, representatives, investment bankers,
attorneys, accountants or other agents or affiliates to, take any
action to solicit, initiate or encourage the submission of any
Acquisition Proposal; provided, however, that if, at any time prior
to the obtaining of Company Share Holder approval of the Merger, the
Advisory Board determines in good faith by a majority vote, with the
advice of outside counsel, that it is necessary to do so to avoid a
breach of its fiduciary duties to Share Holders under applicable law,
the Company may, in response to a written request for information,
furnish information with respect to the Company to any person
pursuant to a customary confidentiality agreement containing terms at
least as favorable to the Company as those contained in the
confidentiality agreements in place between the Company and
Acquisition. The Company may discuss and negotiate terms with
parties making unsolicited Acquisition Proposals.
(c) The Company may continue marketing parcels of the Property as
part of its normal business operations. The Company shall provide
Acquisition with a copy of any proposed agreement for any sale,
exchange or other disposition of any part of the Property and consult
with Acquisition before entering into any binding agreement. After
the approval of this Agreement by the Advisory Board of the Company
and except as provided in Section 7.6(d), the Company will not,
without the express written consent of Acquisition, enter into any
agreement for the disposition of any part of the Property.
(d) Except as expressly permitted by this Section 7.6, neither the
Advisory Board nor the Company Manager shall (i) withdraw or modify,
or propose publicly to withdraw or modify, in a manner adverse to
Acquisition, its approval or recommendation of the adoption and
approval of the matters to be considered at the Company Meeting, (ii)
approve or recommend, or propose publicly to approve or recommend,
any Acquisition Proposal, or (iii) cause the Company to enter into
any letter of intent, agreement in principle, acquisition agreement
or other similar agreement or understanding (written or otherwise)
related to any Acquisition Proposal (each, an "Acquisition
Agreement"). Notwithstanding the foregoing, in the event that prior
to the obtaining of Company Share Holder approval of the Merger,
there exists a Superior Proposal (as defined herein), the Advisory
Board may, if it determines in good faith by a majority vote, with
the advice of outside counsel, that it is necessary to do so to avoid
a breach of its fiduciary duties to Company Share Holders under
applicable law, approve or recommend such Superior Proposal and
terminate this Merger Agreement, provided (x) the Company shall have
given Acquisition written notice (a "Superior Proposal Notice") at
least five business days prior to such termination advising
Acquisition that the Advisory Board has received a Superior Proposal
which the Advisory Board has authorized and intends to effect,
specifying the material terms and conditions of such Superior
Proposal and identifying the person making such Superior Proposal,
and (y) the Company, prior to terminating this Merger Agreement,
makes irrevocable arrangements for Acquisition to be paid the amounts
contemplated by Section 9.2(b) upon the termination of this Merger
Agreement. For purposes of this Merger Agreement, a "Superior
Proposal" means a definitive unconditioned agreement with a third
party, with all due diligence investigations completed, to acquire,
directly or indirectly, more than 50% of the membership interests of
the Company, assets of the Company representing 75% or more of the
real estate assets of the Company (based upon the valuations
contained in the Sedway Report) in one transaction (but not
solicitation of sales of individual parcels of the Property) or all
or substantially all of the undeveloped Property in one transaction
(but not solicitation of sales of individual parcels of the
undeveloped Property), and otherwise on terms which the Advisory
Board determines in its good faith judgment to be more favorable from
a financial point of view to the Company Share Holders than this
Merger Agreement, the Merger and the transactions contemplated hereby
and for which financing, to the extent required, is then committed.
(e) In addition to the obligations set forth in paragraphs (b) and
(d) of this Section 7.6, the Company will promptly communicate to
Acquisition a copy of any requests for information or proposals,
including the identity of the person and its affiliates making the
same, that it may receive.
(f) Nothing contained in this Section 7.6 shall prohibit the Company
from taking and disclosing to the Company Share Holders a position
contemplated by Rule 14e-2(a) promulgated under the Exchange Act or
from making any disclosure to the Company Share Holders if, in the
good faith judgment of the Advisory Board, with the advice of outside
counsel, failure so to disclose would result in a violation of
applicable law; provided, however, that neither the Company, the
Company Manager nor the Advisory Board shall withdraw or modify, or
propose publicly to withdraw or modify, its position with respect to
the matters to be considered at the Company Meeting or approve or
recommend, or propose publicly to approve or recommend, an
Acquisition Proposal, except as provided in Section 7.6(d).
7.7 REDEMPTION OF RIGHTS. The Company shall, immediately prior to
the Effective Date, cause the redemption of the rights issued under
the Rights Agreement so that thereafter the holders of such rights
shall have no rights thereunder other than the right to receive the
redemption price therefor. The Company shall not amend the Rights
Agreement in any manner that has the effect of rendering the Rights
Agreement inapplicable, in whole or in part, to any third party
unless, prior to or concurrently therewith, the Company takes
substantially equivalent action with respect to Acquisition and in
addition releases Acquisition from any limitations or restrictions
imposed by the Confidentiality Agreement, including without
limitation, restrictions upon the purchase of Company Shares, that
prohibits Acquisition from purchasing Company Shares to the same
extent and upon substantially equivalent terms as such third party.
Section 8. CONDITIONS PRECEDENT
8.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligations of each party to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Date of the
following conditions:
(a) This Merger Agreement and the transactions contemplated hereby
shall have been approved and adopted by the requisite vote of the
Company Share Holders.
(b) No temporary restraining order, preliminary or permanent
injunction or other order by any court or other judicial or
administrative body of competent jurisdiction (each, an "Injunction")
which prohibits or prevents the consummation of the Merger shall have
been issued and remain in effect (each party agreeing to use its best
efforts to have any such Injunction lifted), and there shall not be
any action taken, or any statute, rule, regulation or order (whether
temporary, preliminary or permanent) enacted, entered or enforced
which makes the consummation of the Merger illegal or prevents or
prohibits the Merger.
8.2 CONDITIONS TO OBLIGATION OF THE COMPANY TO EFFECT THE MERGER.
The obligation of the Company to effect the Merger shall be subject
to the fulfillment at or prior to the Effective Date of the
additional following conditions, unless waived by the Company:
(a) Acquisition shall have performed in all material respects its
agreements contained in this Merger Agreement required to be
performed on or prior to the Effective Date and the representations
and warranties of Acquisition contained in this Merger Agreement
shall be true in all material respects when made and on and as of the
Effective Date as if made on and as of such date, except for
representations and warranties that are by their express provisions
made as of a specific date or dates, which were or will be true in
all material respects at such time or times as stated therein, and
the Company shall have received a certificate of the Acquisition
Manager to that effect.
(b) Intentionally Omitted.
(c) The Merger Consideration shall have been deposited with the
Dispersing Agent with irrevocable instructions to exchange the
Company Shares for the Merger Consideration in accordance with
Section 3.2(b) immediately upon notification by the Company and
Acquisition of the Effective Date.
8.3 CONDITIONS TO OBLIGATIONS OF ACQUISITION TO EFFECT THE MERGER.
The obligation of Acquisition to effect the Merger shall be subject
to the fulfillment at or prior to the Effective Date of the
additional following conditions, unless waived by Acquisition:
(a) The Company shall have performed in all material respects its
agreements contained in this Merger Agreement required to be
performed on or prior to the Effective Date and the representations
and warranties of the Company contained in this Merger Agreement
shall be true in all material respects (except for any such
representations or warranties which are qualified as to Material
Adverse Effect, which shall be true and correct in all respects) when
made and on and as of the Effective Date as if made on and as of such
date, except for representations and warranties that are by their
express provisions made as of a specific date or dates which were or
will be true in all material respects (except for any such
representations or warranties which are qualified as to Material
Adverse Effect, which were or will be true and correct in all
respects) at such date or dates, and Acquisition shall have received
a certificate of the Company Manager to that effect.
(b) Intentionally Omitted.
(c) The Company shall have obtained all consents, appeals, releases
or authorizations from, and shall have made all filings and
registrations to or with, any person, including but not limited to
any Governmental Entity, necessary to be obtained or made in order to
consummate the transactions contemplated by this Merger Agreement.
(d) Acquisition shall be satisfied, in its sole and absolute
discretion, with the results of its due diligence investigation of
the Company; provided, however, that this condition must be satisfied
or waived no later than Monday September 8, 1997 at noon San
Francisco time or the Company may elect to terminate this Agreement.
As of the date of this Merger Agreement, the condition specified in
this Section 8.3(d) has been satisfied.
Section 9. TERMINATION, AMENDMENT AND WAIVER
9.1 TERMINATION. This Merger Agreement may be terminated at any
time prior to the Effective Date, whether before or after approval by
the Company Share Holders:
(a) by mutual consent of the Board of Directors of Acquisition and
the Advisory Board;
(b) by either Acquisition or the Company, if the Merger shall not
have been consummated on or before January 31, 1998; provided that
the right to terminate this Agreement pursuant to this Section 9.1(b)
shall not be available to any party whose failure to perform in any
material respect any covenant under this Merger Agreement has been
the cause of or resulted in whole or in part in the failure of the
Merger to be consummated before such date;
(c) by either Acquisition or the Company, if there shall be any
Order which is final and nonappealable preventing the consummation of
the Merger;
(d) by either Acquisition or the Company, if this Merger Agreement
and the transactions contemplated hereby shall fail to receive the
requisite vote for approval and adoption by the Company Share Holders
at the Company Meeting;
(e) by Acquisition if this Merger Agreement and the transactions
contemplated hereby shall not have been submitted for approval and
adoption by the Company Share Holders at the Company Meeting prior to
January 31, 1998 unless the meeting is held later solely due to
delays in obtaining approval of the Proxy Statement by the Commission;
(f) by Acquisition, if the Advisory Board withdraws, modifies in a
manner adverse to Acquisition, or refrains from making its
recommendation concerning the Merger referred to in Section 3.3, or
the Advisory Board shall have recommended to the Company Share
Holders any Acquisition Proposal or the Company shall have entered
into an Acquisition Agreement, or, other than in connection with the
Company's delivery of a Superior Proposal Notice, the Advisory Board
shall have resolved to do any of the foregoing; or
(g) by the Company, if, pursuant to Section 7.6(d), (A) the Advisory
Board has delivered to Acquisition a Superior Proposal Notice, (B)
the Company has paid the Termination Fee (as defined in Section 9.2),
and (C) five business days have passed since Acquisition received the
Superior Proposal Notice.
9.2 EFFECT OF TERMINATION; FEES.
(a) In the event of termination of this Merger Agreement by either
Acquisition or the Company, as provided above, this Merger Agreement
shall forthwith become void and (except for the willful breach of
this Merger Agreement by any party hereto) there shall be no
liability on the part of either the Company or Acquisition or their
respective officers or employees; provided that the last sentence of
Section 7.1 and Sections 9.2, 11.3 and 11.7 shall survive the
termination.
(b) The Company shall pay to Acquisition a Termination Fee (as
defined below) if: (i) Acquisition terminates this Merger Agreement
pursuant to Section 9.1(e) or (f); or (ii) if Acquisition has waived
the condition precedent in Section 8.3(d) within three business days
after the receipt by Acquisition of the Superior Proposal Notice, the
Company terminates this Merger Agreement pursuant to Section 9.1(g)
and executes the agreement contemplating the Superior Proposal.
(c) The Termination Fee shall be equal to $1.3 million. The
Termination Fee shall be paid as promptly as practicable and in no
event later than (A) in the event of termination by the Company as
described in clause (ii) of Section 9.2(b), upon termination of the
Merger Agreement and the execution of the Superior Proposal; or (B)
in the event of termination by Acquisition as described in clause (i)
of Section 9.2(b), five business days after such termination.
9.3 AMENDMENT. This Merger Agreement may be amended by the parties
hereto, by or pursuant to action taken by the Acquisition Manager and
the Advisory Board, at any time before or after approval hereof by
the Company Share Holders, but, after such approval, no amendment
shall be made which changes the amount or form of Merger
Consideration or which in any way materially adversely affects the
rights of the Company Share Holders, without the further approval of
such Company Share Holders. This Merger Agreement may not be amended
except by an instrument in writing signed on behalf of each of the
parties hereto.
9.4 WAIVER. At any time prior to the Effective Date, the parties
hereto, by or pursuant to action taken by the Acquisition Manager and
Advisory Board, may (i) extend the time for the performance of any of
the obligations or other acts of the other parties hereto, (ii) waive
any inaccuracies in the representations and warranties contained
herein or in any documents delivered pursuant hereto, and (iii)
waive compliance with any of the agreements or conditions contained
herein; provided, however, that no such waiver shall materially
adversely affect the rights of the Company Share Holders and
Acquisition. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid if set forth in an instrument in
writing signed on behalf of such party.
Section 10. COMMITMENTS OF RCBA
RCBA shall cause Acquisition to be capitalized with all funds
necessary for Acquisition to fulfill its obligations under the Merger
Agreement and the transactions contemplated hereby. RCBA shall
indemnify and hold the Company harmless from any and all claims,
liens, losses or damage, including attorneys' fees, arising out of
the physical presence of employees, agents or contractors of
Acquisition or RCBA at the Company, out of any tests or inspections
of the Company's Property by or on behalf of Acquisition or RCBA or
out of a failure of Acquisition to pay the costs and expenses as
provided for in Section 1.4.
Section 11. GENERAL PROVISIONS
11.1 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. No
representations, warranties or agreements in this Merger Agreement
shall survive the Merger, except for the agreements contained in
Sections 3.1, 3.2 and 3.4 and the agreements referred to in Sections
7.4, 7.5, 11.1, 11.3 and 11.7. No claims for any breach of any
representation or warranty may be brought by either party after the
Effective Date.
11.2 NOTICES. All notices or other communications under this Merger
Agreement shall be in writing and shall be given (and shall be deemed
to have been duly given upon receipt) by delivery in person, by
cable, telegram, telex, telecopy or other standard form of
telecommunications, or by registered or certified mail, postage
prepaid, return receipt requested, addressed as follows:
If to the Company:
3055 Management Corp.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
McCutchen, Doyle, ▇▇▇▇▇ & Enersen, LLP
Three ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy No.: 415-393-2286
If to Acquisition or RCBA:
TPL Acquisition, LLC
c/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ & Associates, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy No.: 415-434-3130
or to such other address as any party may have furnished to the other
parties in writing in accordance with this Section 11.2.
11.3 EXPENSES. All costs and expenses incurred in connection with
this Merger Agreement and the transactions contemplated hereby
(regardless of whether the Merger is consummated) shall be paid by
the party incurring such expenses, and the incurrence and payment of
transaction expenses by the Company shall not affect the Merger
Consideration.
11.4 PUBLICITY. So long as this Merger Agreement is in effect,
Acquisition and the Company agree to consult with each other in
issuing any press release or otherwise making any public statement
with respect to the transactions contemplated by this Merger
Agreement, and none of them shall issue any press release or make any
public statement prior to such consultation, except as may be
required by law.
11.5 SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event that any of the
provisions of this Merger Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Merger
Agreement and to enforce specifically the terms and provisions hereof
in any court of the United States or any state having jurisdiction,
this being in addition to any other remedy to which they are entitled
at law or in equity.
11.6 INTERPRETATION. The headings contained in this Merger
Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Merger Agreement.
11.7 MISCELLANEOUS. This Merger Agreement (including the documents
and instruments referred to herein) (a) constitute the entire
agreement and supersede all other prior agreements and
understandings, both written and oral, among the parties, or any of
them, with respect to the subject matter hereof (other than as
provided in the Confidentiality Agreement, as the same may be
amended); (b) except as provided in Section 7.4 of this Merger
Agreement, are not intended to confer upon any other person any
rights or remedies hereunder; (c) except for an assignment by
Acquisition to one of its affiliates, shall not be as assigned by
operation of law or otherwise; and (d) shall be governed in all
respects, including validity, interpretation and effect, by the laws
of the State of Delaware (without giving effect to the provisions
thereof relating to conflicts of law). This Merger Agreement may be
executed in two or more counterparts which together shall constitute
a single agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Merger
Agreement to be signed by their respective officers thereunder duly
authorized all as of the date first written above.
TPL ACQUISITION, LLC
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ & ASSOCIATES, LP
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ & ASSOCIATES, INC.,
its sole general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Its: Managing Director and
Chief Financial Officer
TRIAD PARK, LLC
By: 3055 MANAGEMENT CORP.,
its Manager
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Vice President
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ & ASSOCIATES, LP
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ & ASSOCIATES, INC.,
its sole general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Its: Managing Director and
Chief Financial Officer