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EXHIBIT 17
AGREEMENT AND PLAN OF MERGER
AMONG
RGI HOLDINGS, INC.
LP ACQUISITION CORP.
AND
LEGEND PROPERTIES, INC.
DATED AS OF JANUARY 6, 2000
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TABLE OF CONTENTS
PAGE
ARTICLE I
THE MERGER
SECTION 1.01. The Merger..................................................................................1
SECTION 1.02. Closing.....................................................................................1
SECTION 1.03. Effective Time..............................................................................1
SECTION 1.04. Effects of the Merger.......................................................................2
SECTION 1.05. Certificate of Incorporation and Bylaws.....................................................2
SECTION 1.06. Directors...................................................................................2
SECTION 1.07. Officers....................................................................................2
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
SECTION 2.01. Effect on Capital Stock.....................................................................2
SECTION 2.02. Exchange of Certificates....................................................................3
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01. Organization................................................................................4
SECTION 3.02. Capitalization..............................................................................4
SECTION 3.03. Authority...................................................................................5
SECTION 3.04. SEC Reports and Financial Statements........................................................5
SECTION 3.05. State Takeover Statutes.....................................................................6
SECTION 3.06. Brokers; Fees and Expenses..................................................................6
SECTION 3.07. Vote Required...............................................................................6
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
SECTION 4.01. Organization................................................................................6
SECTION 4.02. Authority...................................................................................7
SECTION 4.03. Consents and Approvals; No Violations.......................................................7
SECTION 4.04. Litigation..................................................................................7
SECTION 4.05. Information Supplied........................................................................7
SECTION 4.06. Interim Operations of Sub...................................................................7
SECTION 4.07. Brokers.....................................................................................8
SECTION 4.08. Board Determination.........................................................................8
SECTION 4.09. Full Disclosure.............................................................................8
ARTICLE V
COVENANTS
SECTION 5.01. Covenants of the Company....................................................................8
SECTION 5.02. No Solicitation............................................................................10
SECTION 5.03. Other Actions..............................................................................11
(i)
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PAGE
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Stockholder Approval; Preparation of Proxy Statement.......................................12
SECTION 6.02. Access to Information......................................................................13
SECTION 6.03. Reasonable Efforts.........................................................................13
SECTION 6.04. Company Stock Options; Plans...............................................................13
SECTION 6.05. Confidentiality............................................................................14
SECTION 6.06. Fees and Expenses..........................................................................14
SECTION 6.07. Indemnification; Insurance.................................................................14
SECTION 6.08. Employment and Benefit Arrangements........................................................15
ARTICLE VII
CONDITIONS
SECTION 7.01. Conditions to Each Party's Obligation To Effect the Merger.................................15
SECTION 7.02. Conditions to Obligations of Parent and Sub to Effect the Merger...........................16
SECTION 7.03. Conditions to Obligations of the Company to Effect the Merger..............................16
ARTICLE VIII
TERMINATION AND AMENDMENT
SECTION 8.01. Termination................................................................................17
SECTION 8.02. Effect of Termination......................................................................18
SECTION 8.03. Amendment..................................................................................18
SECTION 8.04. Extension; Waiver..........................................................................18
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Nonsurvival of Representations and Warranties..............................................18
SECTION 9.02. Notices....................................................................................19
SECTION 9.03. Interpretation.............................................................................19
SECTION 9.04. Counterparts...............................................................................20
SECTION 9.05. Entire Agreement; Third Party Beneficiaries................................................20
SECTION 9.06. Governing Law..............................................................................20
SECTION 9.07. Publicity..................................................................................20
SECTION 9.08. Assignment.................................................................................20
SECTION 9.09. Enforcement................................................................................20
(ii)
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is made and entered into as of
January 6, 2000, among RGI Holdings, Inc., a Washington corporation ("PARENT"),
LP Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of
Parent ("SUB"), and Legend Properties, Inc., a Delaware corporation (the
"COMPANY").
WHEREAS the respective Boards of Directors of Parent, Sub and the
Company have approved the acquisition of the Company by Parent on the terms and
subject to the conditions set forth in this Agreement; and
WHEREAS the respective Boards of Directors of Parent, Sub and the
Company have each approved the merger of Sub into the Company (the "MERGER"),
upon the terms and subject to the conditions set forth in this Agreement,
whereby each outstanding share (collectively, the "SHARES") of common stock, par
value $0.01 per share, of the Company (the "COMPANY COMMON STOCK"), other than
those Shares of Company Common Stock owned directly or indirectly by Parent or
the Company, will be converted into the right to receive $0.50 in cash; and
WHEREAS Parent, Sub and the Company 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 foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Parent, Sub and the Company hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. THE MERGER. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the Delaware General
Corporation Law (the "CORPORATION LAW"), Sub shall be merged with and into the
Company at the Effective Time (as defined in Section 1.03). Following the
Effective Time, the separate corporate existence of Sub shall cease and the
Company shall continue as the surviving corporation (the "SURVIVING
CORPORATION") and shall succeed to and assume all the rights and obligations of
Sub in accordance with the Corporation Law. At the election of Parent, any
direct or indirect wholly owned subsidiary (as defined in Section 9.03) of
Parent may be substituted for Sub as a constituent corporation in the Merger. In
such event, the parties agree to execute an appropriate amendment to this
Agreement in order to reflect the foregoing.
SECTION 1.02. CLOSING. The closing of the Merger will take place at
10:00 a.m. (Miami time) on a date to be specified by Parent or Sub, which shall
be no later than the fifth business day after satisfaction or waiver of the
conditions set forth in Article VII (the "CLOSING DATE"), at the offices of
Greenberg, Traurig, P.A., counsel to Parent, unless another date, time or place
is agreed to in writing by the parties hereto.
SECTION 1.03. EFFECTIVE TIME. Subject to the provisions of this
Agreement, as soon as practicable on or after the Closing Date, the parties
shall file a Certificate of Merger or other appropriate documents (in any such
case, the "CERTIFICATE OF MERGER") executed in accordance with the relevant
provisions of the Corporation Law and shall make all other filings or recordings
required under the Corporation Law. The Merger shall become effective at such
time as the Certificate of Merger is duly filed with the Delaware Secretary of
State, or at such other time as Sub and the Company shall agree should
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be specified in the Certificate of Merger (the time the Merger becomes effective
being hereinafter referred to as the "EFFECTIVE TIME").
SECTION 1.04. EFFECTS OF THE MERGER. The Merger shall have the effects
set forth in the applicable provisions of the Corporation Law.
SECTION 1.05. CERTIFICATE OF INCORPORATION AND BYLAWS.
(a) The Certificate of Incorporation of Sub as in effect
immediately prior to the Effective Time shall be the Certificate of
incorporation of the Surviving Corporation until thereafter changed or amended
as provided therein or by applicable law; provided that Article I thereof shall
be amended to provide that the corporate name of the Surviving Corporation is
"Legend Properties, Inc."
(b) The bylaws of Sub as in effect immediately prior to the
Effective Time shall be the bylaws of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
SECTION 1.06. DIRECTORS. The directors of Sub immediately prior to 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.
SECTION 1.07. OFFICERS. The officers of the Company immediately prior
to the Effective Time or such other persons as Parent shall designate 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
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
SECTION 2.01. EFFECT ON CAPITAL STOCK. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
Shares or any shares of capital stock of Sub:
(a) CAPITAL STOCK OF SUB. Each issued and outstanding share of
capital stock of Sub shall be converted into and become one fully paid and
nonassessable share of Common Stock, par value $.01 per share, of the Surviving
Corporation.
(b) CANCELLATION OF PARENT OWNED STOCK. Each share of Company
Common Stock that is owned by Parent, Sub or any other subsidiary of Parent
shall automatically be canceled and retired and shall cease to exist, and no
consideration shall be delivered in exchange therefor.
(c) CANCELLATION OF COMPANY OWNED STOCK. All Shares (if any)
that are held in the treasury of the Company or by any wholly owned subsidiary
of the Company shall be canceled and no consideration shall be delivered in
exchange therefor.
(d) CONVERSION OF COMPANY COMMON STOCK. Each Share (other than
Shares to be canceled in accordance with Section 2.01(b) or (c)) shall be
converted into the right to receive from the Surviving Corporation in cash,
without interest, $0.50 (the "MERGER CONSIDERATION"). As of the Effective Time,
all such Shares shall no longer be outstanding and shall automatically be
canceled and retired and shall cease to exist, and each holder of a certificate
representing any such Shares shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration, without interest.
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SECTION 2.02. EXCHANGE OF CERTIFICATES.
(a) PAYING AGENT. Prior to the Effective Time, Parent shall
designate a bank or trust company to act as paying agent in the Merger (the
"PAYING AGENT"), and, from time to time on, prior to or after the Effective
Time, Parent shall make available, or cause the Surviving Corporation to make
available, to the Paying Agent funds in amounts and at the times necessary for
the payment of the Merger Consideration upon surrender of certificates
representing Shares, or, in situations involving lost, stolen or destroyed
certificates, upon delivery of an affidavit of lost, stolen or destroyed
certificate accompanied by a bond as indemnity against a claim in such sum as
reasonably required by Parent, as part of the Merger pursuant to Section 2.01
(it being understood that any and all interest earned on funds made available to
the Paying Agent pursuant to this Agreement shall be payable to Parent).
(b) EXCHANGE PROCEDURE. As soon as reasonably practicable
after the Effective Time, the Paying Agent shall mail to each holder of record
of a certificate or certificates which immediately prior to the Effective Time
represented Shares (the "CERTIFICATES"), (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 Paying
Agent and shall be in a form and have such other provisions as Parent may
reasonably specify) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for the Merger Consideration. Upon surrender of a
Certificate for cancellation to the Paying Agent or to such other agent or
agents as may be appointed by Parent, together with such letter of transmittal,
duly executed, and such other documents as may reasonably be required by the
Paying Agent, the holder of such Certificate shall be entitled to receive in
exchange therefor the amount of cash into which the Shares theretofore
represented by such Certificate shall have been converted pursuant to Section
2.01, and the Certificate so surrendered shall forthwith be canceled. In the
event of a transfer of ownership of Shares that is not registered in the
transfer records of the Company, payment may be made to a person other than the
person in whose name the Certificate so surrendered is registered, if such
Certificate shall be properly endorsed or otherwise be in proper form for
transfer and the person requesting such payment shall pay any transfer or other
taxes required by reason of the payment to a person other than the registered
holder of such Certificate or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not applicable. Until surrendered
as contemplated by this Section 2.02, each Certificate shall be deemed at any
time after the Effective Time to represent only the right to receive upon such
surrender the amount of cash, without interest, into which the Shares
theretofore represented by such Certificate shall have been converted pursuant
to Section 2.01. No interest will be paid or will accrue on the cash payable
upon the surrender of any Certificate. In the event any Certificate shall have
been lost, stolen or destroyed, Parent may, in its discretion and as a condition
precedent to the payment of the Merger Consideration in respect of the shares
represented by such Certificate, require the owner of such lost, stolen or
destroyed Certificate to deliver a bond in such sum as it may reasonably direct
as indemnity against any claim that may be made against Parent, the Surviving
Corporation or the Paying Agent.
(c) NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. All
cash paid upon the surrender of Certificates in accordance with the terms of
this Article II shall be deemed to have been paid in full satisfaction of all
rights pertaining to the Shares theretofore represented by such Certificates. At
the Effective Time, the stock transfer books of the Company shall be closed, and
there shall be no further registration of transfers on the stock transfer books
of the Surviving Corporation of the Shares that were outstanding immediately
prior to the Effective Time. If, after the Effective Time, Certificates are
presented to the Surviving Corporation or the Paying Agent for any reason, they
shall be canceled and exchanged as provided in this Article II.
(d) NO LIABILITY. At any time following the expiration of six
months after the Effective Time, the Surviving Corporation shall be entitled to
require the Paying Agent to deliver to it any funds (including any interest
received with respect thereto, which shall be payable to Parent at Parent's
request) which had been made available to the Paying Agent and which have not
been disbursed to holders of Certificates, and thereafter such holders shall be
entitled to look to the Surviving Corporation (subject
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to any applicable abandoned property, escheat or similar law) only as general
creditors thereof with respect to the Merger Consideration payable upon due
surrender of their Certificates, without any interest thereon. Notwithstanding
the foregoing, none of Parent, Sub, the Company or the Paying Agent shall be
liable to any person in respect of any cash delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub as follows:
SECTION 3.01. ORGANIZATION. 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 and has all requisite corporate
power and authority to carry on its business as now being conducted, except
where the failure to be so organized, existing and in good standing or to have
such power and authority could not be reasonably expected to (i) prevent or
materially delay the consummation of the Merger, or (ii) have a material adverse
effect (as defined in Section 9.03) on the Company. The Company and each of its
subsidiaries is duly qualified or licensed to do business and in good standing
in each jurisdiction in which the property owned, leased or operated by it or
the nature of the business conducted by it makes such qualification or licensing
necessary, except in such jurisdictions where the failure to be so duly
qualified or licensed and in good standing could not reasonably be expected to
have a material adverse effect on the Company or prevent or materially delay the
consummation of the Merger. The Company has made available to Parent complete
and correct copies of its Amended and Restated Certificate of Incorporation and
Bylaws and the certificates of incorporation and bylaws (or similar
organizational documents) of the Company's subsidiaries.
SECTION 3.02. CAPITALIZATION. The authorized capital stock of the
Company consists of 10,000,000 shares of Company Common Stock and 5,000,000
shares of preferred stock, par value $0.01 per share ("COMPANY PREFERRED
STOCK"). At the close of business on December 31, 1999, (i) 6,290,844 shares of
Company Common Stock were issued and outstanding, (ii) 40,000 shares of Company
Common Stock were reserved for issuance upon exercise of outstanding Company
Stock Options (as defined in Section 6.04) and (iii) no shares of Company
Preferred Stock were issued and outstanding. Except as set forth above, as of
the date of this Agreement, no shares of capital stock or other voting
securities of the Company were issued, reserved for issuance or outstanding. All
outstanding shares of capital stock of the Company are, and all shares which may
be issued will be, when issued, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights. There are no bonds,
debentures, notes or other indebtedness of the Company having the right to vote
(or convertible into, or exchangeable for, securities having the right to vote)
on any matters on which stockholders of the Company may vote. Except as set
forth above, there are not any securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to which the
Company or any of the Subsidiaries is a party or by which any of them is bound
obligating the Company or any of the Subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock or
other voting securities of the Company or of any of the Subsidiaries or
obligating the Company or any of the Subsidiaries to issue, grant, extend or
enter into any such security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking. There are not any outstanding contractual
obligations (i) of the Company or any of the Subsidiaries to repurchase, redeem
or otherwise acquire any shares of capital stock of the Company or (ii) of the
Company to vote or to dispose of any shares of the capital stock of any of the
Subsidiaries. There are no restrictions on the right of the Company to vote or
dispose of any shares of the capital stock of the Subsidiaries.
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SECTION 3.03. AUTHORITY.
(a) The Company has the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby (other than, with respect to the Merger, the
approval and adoption of the terms of this Agreement by the holders of a
majority of the Shares (the "COMPANY STOCKHOLDER APPROVAL")). The execution,
delivery and performance of this Agreement and the consummation by the Company
of the Merger and of the other transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the Company and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions so contemplated (in
each case, other than, with respect to the Merger, the Company Stockholder
Approval). This Agreement has been duly executed and delivered by the Company
and, assuming this Agreement constitutes a valid and binding obligation of
Parent and Sub, constitutes a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as limited
by applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors' rights generally.
(b) The Board of Directors of the Company, as well as a
special committee (the "SPECIAL COMMITTEE") comprised of three independent
members of the Company's Board of Directors, at meetings duly called and held on
January 6, 2000, duly and unanimously adopted resolutions (i) approving this
Agreement and the Merger (and such approval is sufficient to render inapplicable
the provisions of Section 203 of the Corporation Law), (ii) determining that the
terms of the Merger are substantively and procedurally fair to, and in the best
interests of, the Company's stockholders, and (iii) recommending that the
Company's stockholders approve and adopt this Agreement.
(c) The Company's Board of Directors and the Special Committee
have received the written opinion, dated as of the date hereof, of Josephthal &
Co. Inc., that the Merger Consideration to be received by the holders of Shares
is fair from a financial point of view, together with the written presentation
of Josephthal & Co. Inc. to the Board of Directors and the Special Committee,
relating thereto.
SECTION 3.04. SEC REPORTS AND FINANCIAL STATEMENTS. The Company has
filed with the SEC, and has heretofore made available to Parent true and
complete copies of, all forms, reports, schedules, statements and other
documents (other than preliminary materials) required to be filed by it under
the Exchange Act or the Securities Act of 1933 (the "SECURITIES ACT") from and
after December 31, 1997 (such forms, reports, schedules, statements and other
documents, including any financial statements or schedules included therein, are
referred to as the "COMPANY SEC DOCUMENTS"). The Company SEC Documents, at the
time filed, (a) did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and (b) complied in all material respects with the
applicable requirements of the Exchange Act and the Securities Act, as the case
may be, and the applicable rules and regulations of the SEC thereunder. Except
to the extent revised or superseded by a subsequently filed Company SEC
Document, the Company SEC Documents do not contain an untrue statement of a
material fact or omit to state a material fact required to be stated or
incorporated by reference therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the Company SEC
Documents as well as the Company's financial statements as of and for the three
months and nine months ended September 30, 1999 heretofore delivered to Parent,
as of the dates thereof comply as to form 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 applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Rule 10-01 of Regulation S-X promulgated
by the SEC) and fairly present (subject, in the case of the unaudited
statements, to normal, recurring audit adjustments, none of which will be
material) the consolidated
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financial position of the Company and the Subsidiaries as at the dates thereof
and the consolidated results of their operations and cash flows for the periods
then ended. None of the Subsidiaries is required to file any forms, reports,
schedules, statements or other documents with the SEC.
SECTION 3.05. STATE TAKEOVER STATUTES. The Board of Directors of the
Company has approved the Merger and this Agreement and such approval is
sufficient to render inapplicable to the Merger, this Agreement and the
transactions contemplated by this Agreement, the provisions of Section 203 of
the Corporation Law. To the best knowledge of the Company, no other state
takeover statute or similar statute or regulation applies or purports to apply
to the Merger, this Agreement or any of the transactions contemplated by this
Agreement.
SECTION 3.06. BROKERS; FEES AND EXPENSES. No broker, investment banker,
financial advisor or other person, other than Josephthal & Co. Inc., the fees
and expenses of which will be paid by the Company, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company. The Company has furnished to Parent true
and complete copies of all written agreements or arrangements, and reduced to
writing and furnished to Parent the terms of all unwritten agreements or
arrangements, providing for any such broker's, finder's financial advisor's or
similar fee or commission between the Company and Josephthal & Co. Inc.
SECTION 3.07. VOTE REQUIRED. The affirmative vote of the holders of a
majority of the outstanding shares of Company Common Stock is the only vote of
the holders of any class of capital stock NECESSARY to approve this Agreement
and the Merger.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub represent and warrant to the Company as follows:
SECTION 4.01. ORGANIZATION. Each of Parent and Sub is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to carry on its business as now being conducted, except where the
failure to be so organized, existing and in good standing or to have such power
and authority could not be reasonably expected to prevent or materially delay
the consummation of the Merger. Each of Parent and Sub is duly qualified or
licensed to do business and in good standing in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification or licensing necessary, except in such
jurisdictions where the failure to be so duly qualified or licensed and in good
standing could not reasonably be expected to prevent or materially delay the
consummation of the Merger. Each of Parent and Sub has made available to the
Company complete and correct copies of its articles/certificate of incorporation
and bylaws.
SECTION 4.02. AUTHORITY. Parent and Sub have requisite corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of Parent and
Sub and no other corporate proceedings on the part of Parent and Sub are
necessary to authorize this Agreement or to consummate such transactions. No
vote of Parent stockholders is required to approve this Agreement or the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Parent and Sub, as the case may be, and, assuming this Agreement
constitutes a valid and binding obligation of the Company, constitutes a valid
and binding obligation of each of Parent and Sub enforceable against them in
accordance with its terms, except as limited by
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applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors' rights generally.
SECTION 4.03. CONSENTS AND APPROVALS; NO VIOLATIONS. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act (including the
filing with the SEC of a Rule 13E-3 Transaction Statement on Schedule 13E-3
(together with all supplements and amendments thereto, the "SCHEDULE 13E-3"),
the HSR Act and Section 251 of the Corporation Law, neither the execution,
delivery or performance of this Agreement by Parent and Sub nor the consummation
by Parent and Sub of the transactions contemplated hereby will (i) conflict with
or result in any breach of any provision of the respective articles/certificate
of incorporation or bylaws of Parent and Sub, (ii) require any filing with, or
permit, authorization, consent or approval of, any Governmental Entity (except
where the failure to obtain such permits, authorizations, consents or approvals
or to make such filings could not be reasonably expected to prevent or
materially delay the consummation of the Merger), (iii) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, amendment, cancellation or
acceleration) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, lease, contract, agreement or other
instrument or obligation to which Parent or Sub is a party or by which either of
them or any of their properties or assets may be bound or (iv) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to
Parent or Sub or any of their properties or assets, except in the case of
clauses (iii) and (iv) for violations, breaches or defaults which could not,
individually or in the aggregate, be reasonably expected to prevent or
materially delay the consummation of the Merger.
SECTION 4.04. LITIGATION. There is no suit, claim, action or proceeding
pending before any Governmental Entity or, to the best knowledge of Parent or
Sub, threatened against Parent or Sub that could reasonably be expected to
prevent or materially delay the consummation of the Merger.
SECTION 4.05. INFORMATION SUPPLIED. None of the information supplied or
to be supplied by Parent or Sub specifically for inclusion or incorporation by
reference in the Proxy Statement or the Schedule 13E-3 will at the time the
Proxy Statement is first mailed to the Company's stockholders or at the time of
the Stockholders Meeting, 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 are made, not misleading. The Schedule 13E-3 to be filed by Parent in
connection with the transactions contemplated hereby will comply as to form in
all material respects with the requirements of the Exchange Act and the rules
and regulations thereunder, except that no representation or warranty is made by
Parent or Sub with respect to statements made or incorporated by reference
therein based on information supplied by the Company specifically for inclusion
or incorporation by reference therein.
SECTION 4.06. INTERIM OPERATIONS OF SUB. Sub was formed solely for the
purpose of engaging in the transactions contemplated hereby, has engaged in no
other business activities and has conducted its operations only as contemplated
hereby.
SECTION 4.07. BROKERS. No broker, investment banker, financial advisor
or other person is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission in connection with the transactions contemplated
by this Agreement based upon arrangements made by or on behalf of Parent or Sub.
SECTION 4.08. BOARD DETERMINATION. The Board of Directors of each of
Parent and Sub have duly and unanimously adopted resolutions approving this
Agreement and the Merger.
SECTION 4.09. FULL DISCLOSURE. No statement contained in any
certificate or schedule furnished or to be furnished by Parent or Sub to the
Company in, or pursuant to the provisions of, this
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Agreement contains or shall contain any untrue statement of a material fact or
omits or will omit to state any material fact necessary, in the light of the
circumstances under which it was made, in order to make the statements herein or
therein not misleading.
ARTICLE V
COVENANTS
SECTION 5.01. COVENANTS OF THE COMPANY. The Company agrees as to itself
and the Subsidiaries that (except as expressly contemplated or permitted by this
Agreement or to the extent that Parent shall otherwise consent in advance, which
consent shall not be unreasonably withheld and shall subsequently be confirmed
in writing):
(a) ORDINARY COURSE. The Company shall, and shall cause the
Subsidiaries to, carry on their respective businesses in the usual, regular and
ordinary course and the Company shall, and shall cause the Subsidiaries to, use
all reasonable efforts to preserve intact their present business organizations,
keep available the services of their present officers and employees and preserve
their relationships with customers, suppliers and others having business
dealings with the Company and the Subsidiaries.
(b) DIVIDENDS; CHANGES IN STOCK. The Company shall not, and
shall not permit any of the Subsidiaries to, (i) declare or pay any dividends on
or make other distributions in respect of any of its capital stock, except for
dividends by a direct or indirect wholly owned subsidiary of the Company to its
parent, (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 any shares of capital stock of the Company or the
Subsidiaries or any other securities thereof.
(c) ISSUANCE OF SECURITIES. The Company shall not, and shall
not permit any of the Subsidiaries to, issue, deliver, sell, pledge or encumber,
or authorize or propose the issuance, delivery, sale, pledge or encumbrance of,
any shares of its capital stock of any class or any securities convertible into,
or any rights, warrants, calls, subscriptions or options to acquire, any such
shares or convertible securities, or any other ownership interest (including
stock appreciation rights or phantom stock) other than (i) the issuance of
shares of Company Common Stock upon the exercise of Company Stock Options
outstanding on the date of this Agreement and in accordance with the terms of
such Company Stock Options, or (ii) issuances by a Subsidiary of the Company of
its capital stock to the Company.
(d) GOVERNING DOCUMENTS. The Company shall not, and shall not
permit any of the Subsidiaries to, amend or propose to amend its certificate of
incorporation or bylaws (or similar organizational documents).
(e) NO ACQUISITIONS. The Company shall not, and shall not
permit any of the Subsidiaries to, acquire or agree to acquire by merging or
consolidating with, or by purchasing any equity interest in or any substantial
assets of (other than inventory and equipment in the ordinary course consistent
with past practice, to the extent not otherwise prohibited by this Agreement),
or by any other manner, any business or any corporation, partnership, joint
venture, association or other business organization or division thereof.
(f) NO DISPOSITIONS. Other than dispositions in the ordinary
course of business consistent with past practice, the Company shall not, and
shall not permit any of the Subsidiaries to, sell, lease, license, encumber or
otherwise dispose of, or agree to sell, lease, license, encumber or otherwise
dispose of, any of its assets.
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(g) INDEBTEDNESS. The Company shall not, and shall not permit
any of the 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 debt securities of the Company or any of the
Subsidiaries, guarantee any debt securities of others, enter into any
"keep-well" or other agreement to maintain any financial statement condition of
another person or enter into any arrangement having the economic effect of any
of the foregoing, except for working capital borrowings under the Company's
existing construction revolving line of credit, including any extensions thereof
or amendments thereto, or (ii) make any loans, advances or capital contributions
to, or investments in, any other person, other than, with respect to both clause
(i) and (ii) above, (A) to the Company or any direct or indirect wholly owned
subsidiary of the Company, or (B) any advances to employees in accordance with
past practice.
(h) ADVICE OF CHANGES; FILINGS. The Company shall confer with
Parent on a regular and frequent basis as reasonably requested by Parent, report
on operational matters and promptly advise Parent orally and, if requested by
Parent, in writing of any change or event having, or which, insofar as can
reasonably be foreseen, is likely to have, a material adverse effect on the
Company. The Company shall promptly provide to Parent (or its counsel) copies of
all filings made by the Company with any Governmental Entity in connection with
this Agreement and the transactions contemplated hereby.
(i) ACCOUNTING CHANGES. The Company shall not make any
material change, other than in the ordinary course of business, consistent with
past practice, or as required by the SEC or law, with respect to any accounting
methods, principles or practices used by the Company (except insofar as may be
required by a change in generally accepted accounting principles, of which the
Company shall promptly notify Parent).
(j) DISCHARGE OF LIABILITIES. Except for fees and expenses
related to the transactions contemplated herein, the Company shall not, and
shall not permit any of the Subsidiaries to, pay, discharge, settle or satisfy
any claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge,
settlement or satisfaction, in the ordinary course of business consistent with
past practice or in accordance with their terms, of (i) liabilities recognized
or disclosed in the Most Recent Financial Statements, or (ii) liabilities
incurred since the date of such financial statements in the ordinary course of
business consistent with past practice. The Company shall not, and shall not
permit any of the Subsidiaries to, waive the benefits of, or agree to modify in
any manner, any confidentiality, standstill or similar agreement to which the
Company or any of the Subsidiaries is a party.
(k) COMPENSATION OF COMPANY EMPLOYEES. Except as provided in
Section 6.04, the Company and the Subsidiaries will not, without the prior
written consent of Parent, except as may be required by law, (i) enter into,
adopt, amend or terminate any Company Benefit Plan or other employee benefit
plan or any agreement, arrangement, plan or policy for the benefit of any
director, executive officer or current or former key employee, (ii) increase in
any manner the compensation or fringe benefits of, or pay any bonus to, any
director, executive officer or key employee, except as required by any Company
Benefit Plan or agreement with such employees existing on the date of this
Agreement, (iii) enter into, adopt, amend or terminate any Company Benefit Plan
or other benefit plan or agreement, arrangement, plan or policy for the benefit
of any employees who are not directors, executive offices or current or former
key employees of the Company, other than increases in the compensation of
employees made in the ordinary course of business consistent with past practice,
or (iv) pay any benefit not required by any plan or arrangement as in effect as
of the date hereof (including the granting of, acceleration of exercisability of
or vesting of stock options, stock appreciation rights or restricted stock).
(l) MATERIAL CONTRACTS. Neither the Company nor any of the
Subsidiaries shall (i) modify, amend or terminate any material contract or
agreement to which the Company or such Subsidiary is a party, or (ii) waive,
release or assign any material rights or claims.
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(m) NO DISSOLUTION, ETC. The Company shall not authorize,
recommend, propose or announce an intention to adopt a plan of complete or
partial liquidation of the Company or any of the Subsidiaries.
(n) TAX ELECTION. The Company shall not make any tax election
or settle or compromise any material income tax liability.
(o) OTHER ACTIONS. The Company shall not nor will it permit
any of the Subsidiaries to take or agree or commit to take any action that is
reasonably likely to result in any of the Company's representations or
warranties hereunder being untrue in any material respect at, or as of any time
prior to, the Effective Time.
(p) GENERAL. The Company shall not, and shall not permit any
of the Subsidiaries to, authorize any of, or commit or agree to take any of, the
foregoing actions described in this Section 5.01.
SECTION 5.02. NO SOLICITATION.
(a) The Company and its officers, directors, employees,
representatives and agents shall immediately cease any discussions or
negotiations with any parties that may be ongoing with respect to an Acquisition
Proposal (as hereinafter defined). From and after the date hereof until the
termination of this Agreement, the Company shall not, nor shall it permit any of
the Subsidiaries to, authorize or permit any of its officers, directors or
employees or any investment banker, financial advisor, attorney, accountant or
other representative retained by it or any of the Subsidiaries to, directly or
indirectly, (i) solicit, initiate or knowingly encourage (including by way of
furnishing non-public information or assistance), or knowingly take any other
action to facilitate, any inquiries or the making of any proposal which
constitutes, or may reasonably be expected to lead to, any Acquisition Proposal,
or (ii) participate in any discussions or negotiations regarding any Acquisition
Proposal; PROVIDED, HOWEVER, that if, at any time the Board of Directors of the
Company determines in good faith, based upon the opinion of independent legal
counsel (who may be the Company's regularly engaged independent counsel), that
it is necessary to do so in order to comply with its fiduciary duties to the
Company's stockholders under applicable law, the Company may, in response to an
unsolicited Superior Proposal (as hereinafter defined), and subject to
compliance with Section 5.02(c), (x) furnish information with respect to the
Company to the person making such unsolicited Superior Proposal pursuant to a
customary confidentiality agreement, and (y) participate in discussions or
negotiations regarding such Superior Proposal. For purposes of this Agreement,
"ACQUISITION PROPOSAL" means any inquiry, proposal or offer from any person
relating to any direct or indirect acquisition or purchase of 20% or more of the
total value of the assets of the Company and the Subsidiaries or 20% or more of
any class of equity securities of the Company or any of the Subsidiaries, any
tender offer or exchange offer that if consummated would result in any person
beneficially owning 20% or more of any class of equity securities of the Company
or any of the Subsidiaries, any merger, consolidation, business combination,
sale of all or substantially all the assets, recapitalization, liquidation,
dissolution or similar transaction involving the Company or any of the
Subsidiaries (other than the transactions between the parties hereto
contemplated by this Agreement), or any other transaction the consummation of
which could reasonably be expected to impede, interfere with, prevent or
materially delay the Merger or which could reasonably be expected to dilute
materially the benefits to Parent of the transactions contemplated hereby. For
purposes of this Agreement, a "SUPERIOR PROPOSAL" means any bona fide proposal
made by a third party to acquire, directly or indirectly, for consideration
consisting of cash and/or securities, 20% or more of the shares of Company
Common Stock then outstanding or all or substantially all the assets of the
Company and otherwise on terms which the Board of Directors of the Company
determines in its good faith judgment (based on the advice of Josephthal & Co.
Inc. to be more favorable to the Company's stockholders than the terms of the
Merger set forth in this Agreement.
(b) Except as set forth in this Section 5.02, neither the
Board of Directors of the Company nor any committee thereof shall (i) withdraw
or modify, or propose to withdraw or modify, in a
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manner adverse to Parent, the approval or recommendation of this Agreement or
the Merger by such Board of Directors or such committee, (ii) approve or
recommend, or propose to approve or recommend, any Acquisition Proposal, or
(iii) cause the Company to enter into any agreement with respect to any
Acquisition Proposal. Notwithstanding the foregoing, in the event that the Board
of Directors of the Company determines in good faith, based upon the opinion of
independent legal counsel (who may be the Company's regularly engaged
independent counsel), that it is necessary to do so in order to comply with its
fiduciary duties to the Company's stockholders under applicable law, the Board
of Directors of the Company may (subject to the other provisions of Section
5.02) withdraw or modify its approval or recommendation of this Agreement and
the Merger, approve or recommend a Superior Proposal (as defined above), cause
the Company to enter into an agreement with respect to a Superior Proposal or
terminate this Agreement, but in each case only at a time that is after the
fifth business day following Parent's receipt of written notice (a "NOTICE OF
SUPERIOR PROPOSAL") advising Parent that the Board of Directors of the Company
has received a Superior Proposal, specifying the material terms and conditions
of such Superior Proposal and identifying the person making such Superior
Proposal. In addition, if the Company proposes to enter into an agreement with
respect to any Acquisition Proposal, it shall concurrently with entering into
such agreement pay, or cause to be paid, to Parent the Termination Fee (as such
term is defined in Section 6.06(b)).
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 5.02, the Company shall promptly advise
Parent orally and in writing of any request for information or of any
Acquisition Proposal, the material terms and conditions of such request or
Acquisition Proposal and the identity of the person making such request or
Acquisition Proposal.
(d) Nothing contained in this Section 5.02 shall prohibit the
Company from taking and disclosing to its stockholders a position contemplated
by Rule 14e-2(a) promulgated under the Exchange Act or from making any
disclosure to the Company's stockholders if, in the good faith judgment of the
Board of Directors of the Company, after consultation with independent legal
counsel (who may be the Company's regularly engaged independent counsel),
failure so to disclose would be inconsistent with its fiduciary duties to the
Company's stockholders under applicable law; PROVIDED, HOWEVER, neither the
Company nor its Board of Directors nor any committee thereof shall, except as
permitted by Section 5.02(b), withdraw or modify, or propose to withdraw or
modify, its position with respect to this Agreement or the Merger or approve or
recommend, or propose to approve or recommend, an Acquisition Proposal.
SECTION 5.03. OTHER ACTIONS. Except as contemplated by Section 5.02 or
the other provisions of this Agreement, the Company shall not, and shall not
permit any of the Subsidiaries to, take any action that could reasonably be
expected to result in (i) any of the representations and warranties of the
Company set forth in this Agreement that are qualified as to materiality
becoming untrue, (ii) any of such representations and warranties that are not so
qualified becoming untrue in any material respect, or (iii) any of the
conditions to the Merger set forth in Article VII hereof not being satisfied in
all material respects.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. STOCKHOLDER APPROVAL; PREPARATION OF PROXY STATEMENT.
(a) The Company shall, as soon as practicable, duly call, give
notice of, convene and hold a meeting of its stockholders (the "STOCKHOLDER
MEETING") for the purpose of obtaining the Company Stockholder Approval. The
Company shall, through its Board of Directors, recommend to its stockholders
that the Company Stockholder Approval be given. The Company shall, at the
direction of Parent, solicit from holders of Shares entitled to vote at the
Stockholder Meeting proxies in favor of the Company Stockholder Approval and
shall take all other action necessary or, in the judgment of Parent, helpful to
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secure the vote or consent of such holders required by the Corporation Law or
this Agreement to effect the Merger.
(b) Parent and the Company shall, as soon as practicable,
jointly prepare and the Company shall file a preliminary Proxy Statement (or, if
requested by Parent and applicable, an information statement in lieu of a proxy
statement pursuant to Rule 14C under the Exchange Act, with all references
herein to the Proxy Statement being deemed to refer to such information
statement, to the extent applicable) with the SEC and shall use its best efforts
to respond to any comments of the SEC or its staff and to cause the Proxy
Statement to be mailed to the Company's stockholders as promptly as practicable
after responding to all such comments to the satisfaction of the staff. The
Company shall notify Parent 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 shall
supply Parent 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 shall promptly
prepare and mail to its stockholders such an amendment or supplement. The
Company shall not mail any Proxy Statement, or any amendment or supplement
thereto, to which Parent reasonably objects. The Company and its counsel shall
permit Parent and its counsel to participate in all communications with the SEC
and its staff, including all meetings and telephone conferences, relating to the
Proxy Statement, the Merger or this Agreement.
(c) Parent agrees to cause all Shares owned by Parent or any
subsidiary of Parent to be voted in favor of the Company Stockholder Approval.
(d) The Company hereby consents to the inclusion in the Proxy
Statement of the recommendation of the Company's Board and the recommendation of
the Board's Special Committee, described in Section 3.03, subject to any
modification, amendment or withdrawal thereof.
(e) In connection with the Merger, the Company shall cause its
transfer agent to furnish Sub promptly with mailing labels containing the names
and addresses of the record holders of Shares as of a recent date and of those
persons becoming record holders subsequent to such date, together with copies of
all lists of stockholders, security position listings and computer files and all
other information in the Company's possession or control regarding the
beneficial owners of Shares, and shall furnish to Sub such information and
assistance (including updated lists of stockholders, security position listings
and computer files) as Parent may reasonably request. Subject to the
requirements of applicable law, and except for such steps as are necessary to
disseminate the documents necessary to consummate the Merger, Parent and Sub and
their agents shall hold in confidence the information contained in any such
labels, listings and files, shall use such information only in connection with
the Merger and, if this Agreement shall be terminated, shall, upon request,
deliver, and shall use their best efforts to cause their agents to deliver, to
the Company all copies of such information then in their possession or control.
SECTION 6.02. ACCESS TO INFORMATION. Upon reasonable notice and subject
to restrictions contained in confidentiality agreements to which the Company is
subject (from which it shall use reasonable efforts to be released), the Company
shall, and shall cause each of the Subsidiaries to, afford to Parent and to the
officers, employees, accountants, counsel and other representatives of Parent
access, during normal business hours to all their respective properties, books,
contracts, commitments and records and, during such period, the Company shall
(and shall cause each of the Subsidiaries to) furnish promptly to Parent (a) a
copy of each report, schedule, registration statement and other document filed
or received by it during such period pursuant to SEC requirements, and (b) all
other information concerning its business, properties and personnel as Parent
may reasonably request.
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SECTION 6.03. REASONABLE EFFORTS. Each of the Company, Parent and Sub
agrees to use its reasonable efforts to take, or cause to be taken, all actions
necessary to comply promptly with all legal requirements which may be imposed on
itself with respect to the Merger (which actions shall include furnishing all
information required under the HSR Act and in connection with approvals of or
filings with any other Governmental Entity) and shall promptly cooperate with
and furnish information to each other in connection with any such requirements
imposed upon any of them or any of their subsidiaries in connection with the
Merger. Each of the Company, Parent and Sub will, and the Company shall cause
each of the Subsidiaries to, use its reasonable efforts to take all reasonable
actions necessary to obtain (and will cooperate with each other in obtaining)
any consent, authorization, order or approval of, or any exemption by, any
Governmental Entity or other public or private third party required to be
obtained or made by Parent, Sub, the Company or any of their subsidiaries in
connection with the Merger or the taking of any action contemplated by this
Agreement, except that no party need waive any substantial rights or agree to
any substantial limitation on its operations or to dispose of or hold separate
any material assets.
SECTION 6.04. COMPANY STOCK OPTIONS; PLANS.
(a) Parent and the Company shall, effective as of the
Effective Time, (i) cause each outstanding option to purchase Company Common
Stock (a "COMPANY STOCK OPTION") issued pursuant to the Company's 1993 Executive
and Directors' Stock Option Plan (the "COMPANY STOCK OPTION PLAN"), whether or
not exercisable or vested, to become fully exercisable and vested, (ii) cause
each Company Stock Option that is outstanding to be canceled, and (iii) in
consideration of such cancellation and, except to the extent that Parent or Sub
and the holder of any such Company Stock Option otherwise agree, cause the
Company (or, at Parent's option, Sub) to pay such holders of Company Stock
Options an amount in respect thereof equal to the product of (x) the excess, if
any, of the Merger Consideration over the exercise price of each such Company
Stock Option, and (y) the number of shares of Company Common Stock subject to
the Company Stock Option immediately prior to its cancellation (such payment to
be net of applicable withholding taxes).
(b) Except as may otherwise be agreed by Parent or Sub and the
Company, the Company Stock Option Plan shall terminate as of the Effective Time,
and no holder of Company Stock Options or any participant in the Company Stock
Option Plan shall have any rights thereunder to acquire any equity securities of
the Company, the Surviving Corporation or any subsidiary thereof.
(c) Except as may otherwise be agreed by Parent or Sub and the
Company, all other plans, programs or arrangements providing for the issuance or
grant of any other interest in respect of the capital stock of the Company or
any of the Subsidiaries shall terminate as of the Effective Time, and no
participant in any such plans, programs or arrangements shall have any rights
thereunder to acquire any equity securities of the Company, the Surviving
Corporation or any subsidiary thereof.
SECTION 6.05. CONFIDENTIALITY. Prior to the Closing, each of Parent and
Sub shall, and shall cause its affiliates (as defined in Section 9.03) and its
and their employees, agents, accountants, legal counsel and other
representatives and advisers to, hold in strict confidence all, and not divulge
or disclose any information of any kind concerning the Company and its business;
provided, however, that the foregoing obligation of confidence shall not apply
to (i) information that is or becomes generally available to the public other
than as a result of a disclosure by Parent, Sub, any of their respective
affiliates or any of their respective employees, agents, accountants, legal
counsel or other representatives or advisers, (ii) information that is or
becomes available to Parent, Sub, any of their respective affiliates or any of
their respective employees, agents, accountants, legal counsel or other
representatives or advisers on a nonconfidential basis, and (iii) information
that is required to be disclosed by Parent, Sub, any of their respective
affiliates or any of their respective employees, agents, accountants, legal
counsel or other representatives or advisers as a result of any applicable law,
rule or regulation of any Governmental Entity; and provided further that Parent
promptly shall notify the Company of any disclosure pursuant to clause (iii) of
this Section 6.05. Promptly after any termination of this Agreement, Parent, Sub
and their
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representatives shall return to the Company or destroy all copies of
documentation with respect to the Company that were supplied by or on behalf of
the Company pursuant to this Agreement, without retaining any copy thereof, and
destroy any notes or analyses Parent, Sub and/or their representatives may have
prepared containing information derived from such materials.
SECTION 6.06. FEES AND EXPENSES.
(a) Except as provided below in this Section 6.06, all fees
and expenses incurred in connection with the Merger, this Agreement and the
transactions contemplated by this Agreement shall be paid by the party incurring
such fees or expenses and Parent shall reimburse the Company for all such fees
and expenses incurred by the Company.
(b) If (i) Parent or Sub terminates this Agreement under
Section 8.01(c) or Section 8.01(d), or (ii) the Company terminates this
Agreement pursuant to Section 8.01(e), then Parent shall have no obligation to
reimburse the Company for its fees and expenses and the Company shall assume and
pay to Parent, or cause to be paid, all out-of-pocket expenses actually incurred
by Parent and Sub in connection with the transactions contemplated hereby (such
sum is referred to herein as the "TERMINATION FEE").
SECTION 6.07. INDEMNIFICATION; INSURANCE.
(a) Parent and Sub agree that all rights to indemnification
for acts or omissions occurring prior to the Effective Time now existing in
favor of the current or former directors or officers (the "INDEMNIFIED PARTIES")
of the Company and the Subsidiaries as provided in their respective certificates
of incorporation or bylaws (or similar organizational documents) or existing
indemnification contracts shall survive the Merger and shall continue in full
force and effect in accordance with their terms.
(b) In addition, Parent will provide, or cause the Surviving
Corporation to provide, for a period of not less than two years after the
Effective Time, the Company's current directors and officers an insurance and
indemnification policy that provides coverage for events occurring at or prior
to the Effective Time (the "D&O INSURANCE") that is no less favorable than the
Company's existing D&O Insurance policy or, if substantially equivalent
insurance coverage is unavailable, the best available coverage; provided,
however, that Parent and the Surviving Corporation shall not be required to pay
an annual premium for the D&O Insurance in excess of 200% of the annual premium
currently paid by the Company for such insurance, but in such case shall
purchase as much such coverage as possible for such amount.
(c) This Section 6.07 shall survive the consummation of the
Merger at the Effective Time, is intended to benefit the Company, Parent, the
Surviving Corporation and the Indemnified Parties and their respective heirs,
personal representatives, successors and assigns, and shall be binding on all
successors and assigns of Parent and the Surviving Corporation.
SECTION 6.08. EMPLOYMENT AND BENEFIT ARRANGEMENTS.
(a) From and after the Effective Time, Parent shall cause the
Surviving Corporation to honor all employment, severance, termination and
retirement agreements to which the Company is a party, as such agreements are in
effect on the date hereof.
(b) For a one-year period following the Effective Time, Parent
shall cause the Surviving Corporation to provide those employees who are
employees of the Surviving Corporation at the Effective Time with benefits that
are, in the aggregate, no less favorable to such employees as are the benefits
of the Company available to such employees immediately prior to the Effective
Time.
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(c) The provisions of this Section 6.08 are not intended to
create rights of third party beneficiaries.
ARTICLE VII
CONDITIONS
SECTION 7.01. 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) This Agreement and the Merger shall have been approved and
adopted by the affirmative vote or consent of the holders of at least a majority
of the outstanding shares of Company Common Stock;
(b) All consents, authorizations, orders and approvals of (or
filings or registrations with) any Governmental Authority or other regulatory
body required in connection with the execution, delivery and performance of this
Agreement, the failure to obtain which would prevent the consummation of the
Merger or have a material adverse effect on the Company, shall have been
obtained without the imposition of any condition having a material adverse
effect on Company;
(c) If applicable, early termination shall have been granted
or applicable waiting periods shall have expired under the HSR Act; and
(d) No Governmental Authority or other regulatory body
(including any court of competent jurisdiction) shall have enacted, issued,
promulgated, enforced or entered any law, rule, regulation, executive order,
decree, injunction or other order (whether temporary, preliminary or permanent)
which is then in effect and has the effect of making illegal, materially
restricting or in any way preventing or prohibiting the Merger or the
transactions contemplated by this Agreement.
SECTION 7.02. CONDITIONS TO OBLIGATIONS OF PARENT AND SUB TO EFFECT THE
MERGER. The obligations of Parent and Sub to effect the Merger are further
subject to satisfaction or waiver at or prior to the Effective Time of the
following conditions.
(a) There shall not have occurred any change, condition, event
or development that has resulted in, or could reasonably be expected to result
in, a material adverse effect on the Company;
(b) The representations and warranties of the Company in this
Agreement that are qualified by materiality shall be true and correct in all
respects as of the date of this Agreement and as of the Effective Time;
(c) The representations and warranties of the Company in this
Agreement that are not qualified by materiality shall be true and correct in all
material respects as of the date of this Agreement and as of the Effective Time,
except in any case where such failure to be true and correct would not, in the
aggregate, (x) have a material adverse effect on the Company or Parent, or (y)
prevent or materially delay the consummation of the Merger;
(d) The Company shall have performed in all material respects
all obligations required to be performed by it under this Agreement;
(e) An officer of the Company shall have delivered to Parent
and Sub a certificate to the effect that each of the conditions specified in
Sections 7.02(b), (c) and (d) is satisfied in all respects;
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(f) All authorizations, consents, waivers and approvals from
parties to contracts or other agreements to which any of the Company or the
Subsidiaries is a party, or by which any of them is bound, as may be required to
be obtained by them in connection with the performance of this Agreement, the
failure to obtain which would prevent the consummation of the Merger or have,
individually or in the aggregate, a material adverse effect on Company, shall
have been obtained;
(g) At the mailing date of the Proxy Statement and the date of
the Stockholders Meeting, the Proxy Statement shall not contain any untrue
statement of a material fact, or omit to state any material fact necessary in
order to make the statements therein not misleading; and
(h) Parent shall have received an opinion, dated the Effective
Time, of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Ltd., counsel to the Company, in form and substance
reasonably satisfactory to Parent, with respect to the matters set forth in
Sections 3.01, 3.02 and 3.03 (including as to the Company Stockholder Approval)
hereof.
SECTION 7.03. CONDITIONS TO OBLIGATIONS OF THE COMPANY TO EFFECT THE
MERGER. The obligations of the Company to effect the Merger are further subject
to satisfaction or waiver at or prior to the Effective Time of the following
conditions:
(a) The representations and warranties of Parent and Sub in
this Agreement that are qualified by materiality shall be true and correct in
all respects as of the date of this Agreement and as of the Effective Time;
(b) The representations and warranties of the Parent and Sub
in this Agreement that are not qualified by materiality shall be true and
correct in all material respects as of the date of this Agreement and as of the
Effective Time;
(c) Parent and Sub shall have performed in all material
respects all obligations required to be performed by them under this Agreement;
and
(d) Parent and Sub shall have delivered to the Company a
certificate to the effect that each of the conditions specified in Sections
7.03(a), (b) and (c) is satisfied in all respects.
(e) The Company shall have received an opinion, dated the
Effective Time, of ▇▇▇▇▇▇▇▇▇ Traurig, P.A., counsel to Parent and Sub, in form
and substance reasonably satisfactory to the Company, with respect to the
matters set forth in Sections 4.01, 4.02, 4.03(i) and 4.08 hereof, provided that
such opinion may rely, as to matters of Washington law, upon an opinion of
counsel licensed to practice in the State of Washington and reasonably
acceptable to the Company.
ARTICLE VIII
TERMINATION AND AMENDMENT
SECTION 8.01. TERMINATION. This Agreement may be terminated at
any time prior to the Effective Time, whether before or after approval of the
terms of this Agreement by the stockholders of the Company:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company if any Governmental Entity
shall have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the acceptance for
payment of, or payment for, shares of Company Common Stock pursuant to the
Merger and such order, decree or ruling or other action shall have become final
and nonappealable;
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PROVIDED, HOWEVER, that the right to terminate this Agreement pursuant to this
Section 8.01(b) shall not be available to any party that has failed to perform
its obligations under Section 6.03 or the proviso contained in Section 7.01(b);
(c) by Parent or Sub, if
(i) any representation or warranty of the Company
shall not have been true and correct in all material respects when made, except
in any case where such failure to be true and correct would not, in the
aggregate, (x) have a material adverse effect on the Company, or (y) prevent or
materially delay the consummation of the Merger;
(ii) any representation or warranty of the Company
(other than representations and warranties made as of a specified date) shall
have ceased at any later date to be true and correct in all material respects as
if made at such later date, except in any case where such failure to be true and
correct would not, (x) in the aggregate, have a material adverse effect or (y)
prevent or materially delay the consummation of the Merger; or
(iii) the Company shall have failed to comply in any
material respect with any of its material obligations or covenants contained
herein;
(d) by Parent or Sub, if
(i) the Board of Directors of the Company or the
Special Committee shall have failed to approve and recommend or shall have
withdrawn or modified in a manner adverse to Parent or Sub its approval or
recommendation of the Merger or this Agreement, or approved or recommended any
Acquisition Proposal;
(ii) the Company shall have entered into any
agreement with respect to any Superior Proposal in accordance with Section
5.02(b); or
(iii) the Board of Directors of the Company or the
Special Committee shall have resolved to take any of the foregoing actions;
(e) by the Company in connection with entering into a
definitive agreement in accordance with Section 5.02(b), provided it has
complied with all provisions thereof, including the notice provisions therein
and the payment of the Termination Fee, and provided that the Company shall not
have breached in any material respect the provisions of Section 5.02(a); or
(f) by the Company, if
(i) any representation or warranty of Parent or Sub
shall not have been true and correct in all material respects when made or
(unless made as of a specified date) shall have ceased at any later date to be
true and correct in all material respects as if made at such later date; or
(ii) Parent or Sub fails to comply in any material
respect with any of its material obligations or covenants contained herein.
SECTION 8.02. EFFECT OF TERMINATION. In the event of a termination of
this Agreement by either the Company or Parent as provided in Section 8.01, this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Parent, Sub or the Company or their respective
officers, directors, stockholders or affiliates, except with respect to Section
3.06, Section 4.06, Section 6.05, Section 6.06, this Section 8.02 and Article
IX; PROVIDED, HOWEVER, that nothing herein shall relieve any party for liability
for any breach hereof.
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SECTION 8.03. AMENDMENT. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors,
at any time before or after obtaining the Company Stockholder Approval, but,
after any such approval, no amendment shall be made which by law requires
further approval by such stockholders (or which reduces the amount or changes
the Merger Consideration to be delivered to such stockholders) without obtaining
such further approval. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties hereto.
SECTION 8.04. EXTENSION; WAIVER. At any time prior to the Effective
Time, the parties hereto, by action taken or authorized by their respective
Boards of Directors, 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 or (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.
The failure of any party to this Agreement to assert any of its rights under
this Agreement or otherwise shall not constitute a waiver of those rights.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time or, in the
case of the Company, shall survive the acceptance for payment of, and payment
for, Shares by Sub pursuant to this Agreement.
SECTION 9.02. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed), sent by overnight courier (providing proof of
delivery) 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 Parent or Sub, to: RGI Holdings, Inc.
c/o Resource Group International
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirm No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇▇ Traurig, P.A.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirm No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
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(b) if to the Company, to: Legend Properties, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirm No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Ltd.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirm No.: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 9.03. INTERPRETATION. When a reference is made in this
Agreement to an Article or a Section, such reference shall be to an Article or a
Section of this Agreement unless otherwise indicated. 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. As used in this Agreement, the term "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, and the term "AFFILIATE"
shall have the meaning set forth in Rule 12b-2 promulgated under the Exchange
Act. As used in this Agreement, "MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE
EFFECT" means, when used in connection with the Company, any change or effect
(or any development that, insofar as can reasonably be foreseen, is likely to
result in any change or effect) that, individually or in the aggregate with any
such other changes or effects, is materially adverse to the business, prospects,
assets (including intangible assets), financial condition or results of
operations of the Company and the Subsidiaries taken as a whole. Notwithstanding
the foregoing, a "MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" shall
not include changes in general economic conditions or changes affecting the
industries generally in which the Company operates.
SECTION 9.04. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when said 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.
SECTION 9.05. ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This
Agreement (including the documents and the instruments referred to herein) (a)
constitute the entire agreement and supersede 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 Section 6.07, are not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
SECTION 9.06. GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware without regard to
any applicable conflicts of law.
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SECTION 9.07. PUBLICITY. Except as otherwise required by law, for so
long as this Agreement is in effect, neither the Company, Sub nor Parent shall,
nor shall the Company permit any of the 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 or delayed.
SECTION 9.08. 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, except that Sub may assign, in its sole
discretion, any or all of its rights, interests and obligations hereunder to
Parent or to any direct or indirect wholly owned subsidiary of Parent. 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.
SECTION 9.09. ENFORCEMENT. The parties agree that irreparable damage
would occur in the event that any of the provisions of this 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 Agreement and to enforce specifically
the terms and provisions of this Agreement. In addition, each of the parties
hereto (i) consents to submit such party to the personal jurisdiction of any
Federal court located in the State of Delaware in the event any dispute arises
out of this Agreement or any of the transactions contemplated hereby, (ii)
agrees that such party will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, and (iii)
agrees that such party will not bring any action relating to this Agreement or
any of the transactions contemplated hereby in any court other than a Federal
court sitting in the State of Delaware. The prevailing party in any judicial
action shall be entitled to receive from the other party reimbursement for the
prevailing party's reasonable attorneys' fees and disbursements, and court
costs.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized as
of the date first written above.
RGI Holdings, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
LP Acquisition Corp.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
Legend Properties, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: President and Chief Executive Officer
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