EXHIBIT 2.1
EXECUTION COPY
AGREEMENT AND PLAN
OF MERGER
AMONG
MONMOUTH CAPITAL
CORPORATION,
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
AND
ROUTE 9 ACQUISITION,
INC.
DATED AS OF MARCH
26, 2007
TABLE OF
CONTENTS
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Article I
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Certain Definitions
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1
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2.1.
2.2.
2.3.
2.4.
2.5.
2.6.
2.7.
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The Merger
Certificate of Incorporation and Bylaws
Effective Time
Closing
Directors and Officers of the Surviving Company; Composition of the
Company Board
Provisions Relating to Record Dates for Final Dividends
Further Assurances
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7
7
7
7
8
8
8
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Article III
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Merger Consideration; Conversion of Stock
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8
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3.1.
3.2.
3.3.
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Conversion of Juniper Stock
Exchange of Certificates
Withholding Rights
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8
10
12
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Article IV
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Representations and Warranties
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12
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4.1.
4.2.
4.3.
4.4.
4.5.
4.6.
4.7.
4.8.
4.9.
4.10.
4.11.
4.12.
4.13.
4.14.
4.15.
4.16.
4.17.
4.18.
4.19.
4.20.
4.21.
4.22.
4.23.
4.24.
4.25.
4.26.
4.27.
4.28.
4.29.
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Definition of a Party's Knowledge
Existence; Good Standing; Authority; Compliance with Law
Authorization, Takeover Laws, Validity and Effect of Agreements
Capitalization
Subsidiaries
Other Interests
Consents and Approvals; No Violations
No Restraints
SEC Reports; Financial Statements
Litigation
Permits
Absence of Certain Changes
Taxes
Real Property
Assets
Environmental Matters
Employee Benefit Plans
Labor and Employment Matters
No Brokers
Opinion of Financial Advisor
Vote Required
Material Contracts
Insurance
Proxy Statement; Party Information
No Payments to Employees, Officers or Directors
Intellectual Property
Investment Company Act of 1940
Dissenters Rights
Suspension of Juniper DRIP and SIP
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13
13
14
14
15
15
15
16
16
18
19
19
19
22
24
24
25
26
26
27
27
27
28
28
28
29
29
29
29
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Article V
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Conduct of Business Pending the Merger
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30
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5.1.
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Conduct of the Parties
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30
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6.1.
6.2.
6.3.
6.4.
6.5.
6.6.
6.7.
6.8.
6.9.
6.10.
6.11.
6.12.
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Joint Proxy Statement/Prospectus; Registration
Statement
Access to Information; Confidentiality
Stockholders Meetings
Additional Agreements
No Solicitations
Officers' and Directors' Indemnification
Public Announcements
Certain Tax Matters
Notice Obligations
Listing
Acknowledgement of Holders of Juniper Stock Options
Termination of Juniper DRIP
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32
32
33
34
35
36
38
38
39
39
39
39
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Article VII
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Conditions to the Merger
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40
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7.1.
7.2.
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Conditions to the Obligations of each Party to
Effect the Merger
Frustration of Closing Conditions
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40
41
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Article VIII
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Termination, Amendment and Waiver
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41
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8.1.
8.2.
8.3.
8.4.
8.5.
8.6.
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Termination
Effect of Termination
Fees and Expenses
Payment of Breakup Fee or Expenses
Amendment
Extension; Waiver
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41
43
43
44
45
45
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Article IX
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General Provisions
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46
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9.1.
9.2.
9.3.
9.4.
9.5.
9.6.
9.7.
9.8.
9.9.
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Notices
Interpretation
Trial by Jury
Non-Survival of Representations, Warranties, Covenants and
Agreements
Miscellaneous
Assignment; Benefit; Severability
Choice of Law/Consent to Jurisdiction
Waiver
Counterparts
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46
46
48
48
48
48
49
49
49
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Exhibits:
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Exhibit A:
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Second Amended and Restated Certificate of
Incorporation of Monmouth Capital Corporation
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Exhibit B:
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Amended and Restated By-Laws of Monmouth
Capital Corporation
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Exhibit C:
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Company and Surviving Company Directors and
Officers
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Schedules (1)
:
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Schedule 4.1:
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Definition of a Party’s Knowledge
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Schedule 4.2(b):
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Existence; Good Standing; Authority;
Compliance with Law
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Schedule 4.4(a):
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Capitalization (Equity)
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Schedule 4.4(b):
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Capitalization (Bonds; Debentures; Notes)
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Schedule 4.4(d):
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Capitalization (Registration Rights)
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Schedule 4.5:
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Subsidiaries
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Schedule 4.7:
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Consents and Approvals; No Violations
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Schedule 4.9:
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SEC Reports; Financial Statements
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Schedule 4.10:
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Litigation
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Schedule 4.14(a):
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Real Property (Interests)
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Schedule 4.14(c):
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Real Property (Pending Agreements)
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Schedule 4.14(i):
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Real Property (Joint Ventures)
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Schedule 4.16:
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Environmental Matters
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Schedule 4.17(a):
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Employee Benefit Plans (Employee Programs)
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Schedule 4.17(c):
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Employee Benefit Plans (Commitments)
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Schedule 4.17(d):
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Employee Benefit Plans (Payments Resulting
from the Merger)
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Schedule 4.17(e):
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Employee Benefit Plans (Nonqualified Deferred
Compensation Plans)
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Schedule 4.19:
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Financial Advisor
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Schedule 4.21:
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Vote Required
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Schedule 4.22(a):
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Material Contracts
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Schedule 4.22(b):
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Material Contracts (Debt Instruments)
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Schedule 4.25:
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No Payments to Employees, Officers or
Directors
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Schedule 5.1:
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Conduct of the Parties
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_________________
(1)
Upon
request from the SEC, the Company will provide to the SEC a copy of
any Disclosure Schedules.
THIS
AGREEMENT AND PLAN OF MERGER (this " Agreement "), dated as
of March 26, 2007, is made by and among Monmouth Capital
Corporation, a New Jersey corporation (" Juniper "),
Monmouth Real Estate Investment Corporation, a Maryland corporation
(the " Company "), and Route 9 Acquisition, Inc., a New
Jersey corporation and a wholly-owned subsidiary of the Company ("
MergerCo ").
WHEREAS, the Parties wish to effect a business combination through
a merger of MergerCo with and into Juniper (the " Merger ")
on the terms and conditions set forth in this Agreement and in
accordance with the Maryland General Corporation Law (the "
MGCL ") and the New Jersey Business Corporation Act (the "
NJBCA ");
WHEREAS, Juniper's Special Committee (as hereinafter defined) has
authorized Juniper to enter into this Agreement and has recommended
to Juniper's Board of Directors, and Juniper's Board of Directors
has declared advisable and submitted to Juniper's stockholders for
approval, this Agreement, the Merger and the other transactions
contemplated by this Agreement;
WHEREAS, the Company's Special Committee (as hereinafter defined)
has authorized the Company to enter into this Agreement and has
recommended to the Company's Board of Directors, and the Company's
Board of Directors has declared advisable and submitted to the
Company's stockholders for approval, the Merger on the terms set
forth in this Agreement;
WHEREAS, the Board of Directors of MergerCo has authorized MergerCo
to enter into this Agreement, determined that the Merger and the
other transactions contemplated by this Agreement are advisable and
has submitted this Agreement, the Merger and the other transactions
contemplated by this Agreement to the sole stockholder of MergerCo
for its approval, and the Company, as the sole stockholder of
MergerCo, has approved this Agreement, the Merger and the other
transactions contemplated by this Agreement;
WHEREAS, the Company, MergerCo and Juniper desire to make certain
representations, warranties, covenants and agreements in connection
with the Merger, and also to prescribe various conditions to the
Merger; and
WHEREAS, for United States federal income tax purposes, it is
intended that the Merger shall qualify as a reorganization within
the meaning of Section 368(a)(1)(C) of the Internal Revenue
Code of 1986, as amended.
NOW,
THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements set forth herein, and
intending to be legally bound, the Company, MergerCo and Juniper
hereby agree as follows:
ARTICLE
I CERTAIN DEFINITIONS.
For
purposes of this Agreement, the term:
"
Acquisition Proposal " means any inquiry, proposal,
offer or expression of interest by any third party relating to a
merger, consolidation or other business combination involving
Juniper, or any purchase of more than 20% of the consolidated
assets of Juniper (including the shares and assets of its
subsidiaries) or more than 20% of the shares of Juniper (other than
pursuant to the exercise of Juniper Stock Options in accordance
with their terms) or the issuance of any securities (or rights to
acquire securities) of Juniper or any subsidiary of Juniper, or any
similar transaction, or any agreement, arrangement or understanding
requiring Juniper to abandon, terminate or fail to consummate the
Merger or any other transaction contemplated by this Agreement. Any
material modification of an Acquisition Proposal (including any
modification of the economic terms) shall constitute a new
Acquisition Proposal.
"
Affiliate " of any Person means a Person that
directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, the
first-mentioned Person.
"
Board of Directors " or " Board "
means, with respect to any Party, that Party's board of directors
or any duly authorized committee thereof.
"
Business Day " means any day other than (a) a
Saturday or Sunday or (b) a day on which the SEC is closed for
business.
"
Code " means the Internal Revenue Code of 1986, as
amended.
"
Common Stock " of a Party means, as applicable, the
Juniper Common Stock or the Company Common Stock.
"
Confidential Information " of a Party means any
non-public information disclosed by a Party to the Other Party or
its authorized representatives pursuant to Section 6.2(a) but
excluding information or materials that the Other Party can prove
(i) are or became generally known or available to the public
through no fault of the Other Party; (ii) were lawfully disclosed
to the Other Party by a third party who is not, to the Other
Party's knowledge, under any obligation, whether contractual,
fiduciary, statutory, or otherwise, of confidentiality to the Party
with respect to such Proprietary Information; (iii) were at any
time developed by the Other Party independently without use of, or
reference to, the Confidential Information of the Party or (iv)
were disclosed pursuant to the order or requirement of a court,
administrative agency, or other governmental body with proper
jurisdiction.
"
DRIP " of a Party means that Party's Dividend
Reinvestment and Share Purchase Plan.
"
Environment " means soil, sediment, surface or
subsurface strata, surface water, ground water, ambient air and any
biota living in or on such media.
"
Environmental Laws " means any federal, state or
local statute, law, including common laws, ordinance, regulation,
rule, code, or binding order, including any judicial or
administrative order, consent decree, judgment, injunction, permit
or authorization, in each case having the force and effect of law,
relating to the pollution, protection, or restoration of the
Environment, including, without limitation, those relating to the
use, handling, presence, transportation, treatment, storage,
disposal, release or discharge of Hazardous Substances.
"
ERISA " means the Employee Retirement Income Security
Act of 1974, as amended.
"
ERISA Affiliate " means an Affiliate of any Person if
it would have ever been considered a single employer with such
Person under ERISA Section 4001(b) or part of the same
"controlled group" as such Person for purposes of ERISA
Section 302(d)(8)(C).
"
Exchange Act " means the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated
thereunder.
"
FFO " means a Party's net income, excluding gains or
losses from sales of property, and adding back real estate
depreciation.
"
GAAP " means generally accepted accounting principles
as applied in the United States.
"
Hazardous Substance " means any "hazardous waste" as
defined in either the Resource Conservation and Recovery Act or
regulations adopted pursuant to said act, any "hazardous
substances" or "pollutant" or "contaminant" as defined in the
Comprehensive Environmental Response, Compensation and Liability
Act and, to the extent not included in the foregoing, any petroleum
or fractions thereof and any materials subject to regulation under
Environmental Laws.
"
Indebtedness " means, with respect to any Person,
without duplication, (a) all indebtedness of such Person for
borrowed money, whether secured or unsecured, (b) all
obligations of such Person under conditional sale or other title
retention agreements relating to property purchased by such Person,
(c) all capitalized lease obligations of such Person,
(d) all obligations of such Person under interest rate or
currency hedging transactions (valued at the termination value
thereof), and (e) all guarantees of such Person of any such
Indebtedness of any other Person.
"
IRS " means the United States Internal Revenue
Service.
"
Juniper Indentures " means, collectively, the
Indenture, dated as of October 23, 2003, between Juniper and
Wilmington Trust Company, a banking corporation organized under the
laws of the State of Delaware, and the Indenture, dated as of March
30, 2005, between Juniper and Wilmington Trust Company.
"
Liens " means, with respect to any asset (including
any security), any mortgage, claim, lien, pledge, charge, security
interest or encumbrance of any kind in respect to such asset.
"
Material Adverse Effect " means with respect to
either Party, as applicable, an effect, event or change which has a
material adverse effect on (x) the assets, results of
operations, or financial condition of the Party and the Party's
Subsidiaries on a consolidated basis taken as a whole, other than
effects, events or changes arising out of or resulting from
(a) changes in conditions in the U.S. economy or
(b) changes in general legal, regulatory, political, economic
or business conditions or changes in generally accepted accounting
principles that, in each case, generally affect industries in which
the Party and the Party's Subsidiaries conduct business, unless, in
each case, such effect, event or change has a substantially
disproportionate impact on the Party and its Subsidiaries, or
(y) on the ability of the Party to perform its obligations
hereunder, or that would prevent or delay the consummation of the
transactions contemplated hereby. In determining whether there has
been a Material Adverse Effect, any event, circumstance, change or
effect shall be considered both individually and together with all
other events, circumstances, changes or effects and any event,
circumstance, change or effect that reasonably would be expected to
result in a Material Adverse Effect (individually or together with
one or more other events, circumstances, changes or effects) shall
be considered a Material Adverse Effect.
"
Material Contracts " means with respect to any
Person: (a) each contract, agreement or understanding of such
Person or its Subsidiaries in the last fiscal year where such
contract, agreement or understanding involves more than 5% of such
Person's consolidated annual revenues, other than any such
contract, agreement or understanding that by its terms is
terminable within 30 days (without termination fee or penalty) of
the date of this Agreement; (b) all acquisition, merger, asset
purchase or sale agreements entered into by such Person or its
Subsidiaries in the last two fiscal years with a transaction value
in excess of 5% of such Person's consolidated annual revenues;
(c) all employment agreements to which such Person is a party;
and (d) any other agreements within the meaning set forth in
Item 601(b)(10) of Regulation S-K of Title 17,
Part 229 of the Code of Federal Regulations.
"
NASDAQ " means the Nasdaq Global Stock Market or the
Nasdaq Global Select Stock Market.
"
Party " means, in Article IV (but excluding Section
4.13), Section 8.5 and Sections 9.2 through 9.6 of
this Agreement, each of the Company and MergerCo, jointly and
severally, on the one hand, and Juniper, on the other hand, and in
any other Article of this Agreement (including Section 4.13), each
of the Company, on the one hand, and Juniper, on the other hand. In
either case, the other party to this Agreement is referred to as
the " Other Party ."
"
Permitted Liens " means (i) Liens for Taxes not
yet delinquent and Liens for Taxes being contested in good faith
and for which there are adequate reserves on the financial
statements of the Party (if such reserves are required pursuant to
GAAP); (ii) inchoate mechanics' and materialmen's Liens for
construction in progress or arising in the ordinary course of
business of the Party or any of its Subsidiaries; (iii) zoning
restrictions, survey exceptions, utility easements, rights of way
and similar Liens that are imposed or promulgated by any
Governmental Entity having jurisdiction thereon or by Law or
otherwise are typical for the applicable Property type and locality
that do not materially adversely affect the value or marketability
of a Property; (iv) any title exception, easement agreements and
all other matters disclosed in any Title Insurance Policy provided
or made available to representatives of the Special Committee of
the Other Party, (v) Liens and obligations arising under the
Party's Material Contracts (including but not limited to any Lien
securing mortgage debt disclosed in Section 4.22(b) of the
Party's Disclosure Schedule), (vi) the Party's Leases and (vii) any
other Lien or exception to title that does not interfere materially
with the current use of such property (assuming its continued use
in the manner in which it is currently used) or materially
adversely affect the value or marketability of a Property.
"
Person " means an individual, corporation, limited
liability company, partnership, association, trust, unincorporated
organization, other entity or group (as defined in
Section 13(d) of the Exchange Act).
"
Proxy Statement " means the joint proxy
statement/prospectus to be sent to the stockholders of the Company
and Juniper in connection with the Stockholders Meetings.
"
Registration Statement " means the registration
statement on Form S-4, including any amendments or supplements,
pursuant to which the shares of Company Common Stock to be issued
in connection with the Merger will be registered under the
Securities Act.
"
REIT " means a real estate investment trust within
the meaning of the Code.
"
SEC " means the U.S. Securities and Exchange
Commission.
"
Securities Act " means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"
Special Committee " means, with respect to any Party,
the Special Committee of that Party's Board formed for the purpose
of negotiating, approving or recommending the transactions
contemplated by this Agreement.
"
Stock " of a Party means the Common Stock of the
Party and equity securities of that Party of any other class or
series.
"
Stock Options " of a Party means qualified or
nonqualified options to purchase equity securities of such Party,
whether or not issued pursuant to a Stock Option Plan.
"
Stock Option Plan " of a Party means any plan
pursuant to which such Party may issue Stock Options or make any
other equity-based compensatory awards.
"
Subsidiary " means any corporation more than 50% of
whose outstanding voting securities, or any partnership, limited
liability company, joint venture or other entity more than 50% of
whose total equity interest, is directly or indirectly owned by the
Company or Juniper, as the case may be.
"
Warrant " of a Party means an outstanding warrant to
purchase shares of the Party's Stock of any class or series.
"
Warrant Agreement " means an agreement evidencing a
Warrant.
The
following terms are defined elsewhere in this Agreement, as
indicated below:
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" Agreement "
" Assets "
" Break-up Fee "
" Certificate "
" Claim "
" Closing Date "
" Closing "
" Company Common Stock "
" Company "
" Debt Instruments "
" Disclosure Schedule "
" Drop Dead Date "
" Effective Time "
" Employee Programs "
" Environmental Permits "
" Exchange Agent "
" Exchange Fund "
" Exchange Ratio "
" Excluded Shares "
" Expenses "
" Final Juniper Dividend "
" Financial Advisor "
" Governmental Entity "
" Ground Leases "
" Indemnified Parties "
" Initial REIT Year "
" Initial Tax Year "
" Intellectual Property "
" Joint Venture Party "
" Juniper Common Stock "
" Juniper "
" Laws "
" Leases "
" Merger Consideration "
" Merger "
" MergerCo "
" MGCL "
" NJBCA "
" Permits "
" Permitted Purpose "
" Property "
" Qualifying Income "
" Recommendation "
" SEC Reports "
" Secretary "
" Securities Laws "
" SOX "
" Stock Certificate "
" Stockholder Approval "
" Stockholders Meeting "
" Surviving Company "
" Tax Returns "
" Tax "
" Third Party "
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Preamble
Section 4.15
Section 8.2(b)
Section 2.3
Section 6.6(b)
Section 2.4
Section 2.4
Section 3.1(c)
Preamble
Section 4.22(b)
Article IV
Section 8.1(b)(ii)
Section 2.3
Section 4.17(a)
Section 4.16(a)
Section 3.2(a)
Section 3.2(a)
Section 3.1(c)
Section 3.1(b)
Section 8.3(b)
Section 2.6
Section 4.19
Section 4.7
Section 4.14(f)
Section 6.6(a)
Section 4.13(i)
Section 4.13(a)
Section 4.26
Section 4.14(i)
Section 2.6
Preamble
Section 4.7
Section 4.14(e)
Section 3.1(c)
Recitals
Preamble
Recitals
Recitals
Section 4.10
Section 6.2(b)
Section 4.14(a)
Section 8.4(a)
Section 6.3(b)
Section 4.9(a)
Section 2.3
Section 4.9(a)
Section 4.9(a)
Section 3.1(c)
Section 4.21
Section 6.3(a)
Section 2.1
Section 4.13(b)
Section 4.13(b)
Section 4.14(g)
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ARTICLE
II THE MERGER
2.1. The Merger .
Subject to the terms and conditions of this Agreement, at the
Effective Time, Juniper and MergerCo shall consummate the Merger,
pursuant to which (a) MergerCo shall be merged with and into
Juniper and the separate corporate existence of MergerCo shall
thereupon cease and (b) Juniper shall be the surviving
corporation in the Merger (the " Surviving Company ") and
shall thereafter be a wholly owned subsidiary of the Company. From
and after the Effective Time, the Surviving Company shall succeed
to and assume all the rights and obligations of Juniper. The Merger
shall have the effects specified in the NJBCA.
2.2. Certificate of Incorporation
and Bylaws .
The
name of the Surviving Company shall be Monmouth Capital
Corporation. At the Effective Time, the certificate of
incorporation and Bylaws of the Surviving Company shall be amended
and restated in the forms set forth as Exhibit A and Exhibit B
hereto, until thereafter amended.
2.3. Effective Time .
Subject to the provisions of this Agreement, prior to the Closing,
the Company, MergerCo and Juniper shall prepare, and on the Closing
Date, the Company shall cause to be filed with the Secretary of
State of the State of New Jersey (the " Secretary "), a
certificate of merger (the " Certificate ") in such form as
is required by, and executed in accordance with, the relevant
provisions of the NJBCA and shall make all other filings or
recordings required under applicable Laws. The Merger shall become
effective at (a) such time as the Certificate has been
accepted for record by the Secretary or (b) such other time as
is agreed upon by the Company and Juniper and specified in the
Certificate. Such time is hereinafter referred to as the "
Effective Time. "
2.4. Closing .
The
closing of the Merger (the " Closing ") shall occur as
promptly as practicable (but in no event later than the second
Business Day) after all of the conditions set forth in Article VII
(other than conditions that by their terms are required to be
satisfied or waived at the Closing, but subject to such conditions)
shall have been satisfied or, to the extent permitted by applicable
law, waived by the Party entitled to the benefit of the same
(unless extended by the mutual agreement of the Parties), provided
that the Closing shall not be later than November 15, 2007,
and, subject to the foregoing, shall take place at 10:00 a.m.,
local time, on such date (the " Closing Date ") at the
offices of Venable LLP, Two Hopkins Plaza, Suite 1800, Baltimore,
Maryland 21201, or at such other time or place as mutually agreed
to by the Parties.
2.5. Directors and Officers of the
Surviving Company; Composition of the Company Board.
Prior to the Closing, the Company and Juniper will take all actions
necessary to cause the persons named on Exhibit C hereto to be the
directors and officers of the Company and the Surviving Company
from and after the Effective Time, each to hold office in
accordance with the charter or certificate of incorporation and
bylaws of the Company and the Surviving Company, as applicable.
2.6. Provisions Relating to Record
Dates for Final Dividends.
Notwithstanding anything to the contrary in this Agreement, and to
the extent necessary for Juniper to satisfy the requirements of
Code Section 857(a)(1) for the taxable year of Juniper ending
at the Effective Time and, if applicable, the preceding taxable
year (and to allow Juniper to distribute 100% of its "real estate
investment trust taxable income" (as such term is used in Code
Section 857(a) and taking into account any dividends
previously paid during the tax year that would be expected to give
rise to a dividends-paid deduction for such tax year, but before
reduction for the dividend contemplated by this Section 2.6)
in order to avoid the payment of any Tax with respect to
undistributed income or gain), Juniper shall declare a dividend
(the " Final Juniper Dividend ") to holders of Juniper's
common stock, par value $1.00 per share (the " Juniper Common
Stock "), the record date for which shall precede the Effective
Time, in an amount equal to the minimum dividend sufficient to
permit Juniper to satisfy such requirements. Any dividends payable
hereunder to holders of shares of Juniper Common Stock shall be
paid prior to the Closing Date.
2.7. Further Assurances .
If
at any time after the Effective Time, the Surviving Company shall
consider or be advised that any bills of sale, assignments or
assurances or any other acts or things are necessary, desirable or
proper (a) to vest, perfect or confirm, of record or
otherwise, in the Surviving Company its right, title or interest
in, to or under any of the rights, privileges, powers, franchises,
properties or assets of Juniper or (b) otherwise to carry out
the purposes of this Agreement, the Surviving Company and its
proper officers and directors or their designees shall be
authorized to execute and deliver, in the name and on behalf of
Juniper, all such deeds, bills of sale, assignments and assurances
and do, in the name and on behalf of Juniper, all such other acts
and things necessary, desirable or proper to vest, perfect or
confirm its rights, title or interest in, to or under any of the
rights, privileges, powers, franchises, properties or assets of
Juniper and otherwise to carry out the purposes of this
Agreement.
ARTICLE
III MERGER CONSIDERATION; CONVERSION
OF STOCK
3.1. Conversion of Juniper
Stock.
At
the Effective Time, by virtue of the Merger and without any action
on the part of any holder thereof:
(a)
Stock of MergerCo. Each share of common stock of MergerCo,
par value $0.01 per share, issued and outstanding immediately prior
to the Effective Time shall be automatically converted into one
share of Juniper Common Stock.
(b)
Cancellation of Company-Owned and MergerCo-Owned Juniper Common
Stock . Each issued and outstanding common share of Juniper
Common Stock that is owned by the Company, MergerCo or any
Subsidiary of the Company immediately prior to the Effective Time
(collectively, the " Excluded Shares ") shall automatically
be canceled and retired and shall cease to exist, and no cash,
stock or other consideration shall be delivered or deliverable in
exchange therefor.
(c)
Exchange of Juniper Common Stock for Company Common Stock .
Subject to Section 3.2, each share of Juniper Common Stock,
other than the Excluded Shares, issued and outstanding immediately
prior to the Effective Time shall be automatically converted into
and exchanged for the right to receive 0.655 (the " Exchange
Ratio ") shares (the " Merger Consideration ") of common
stock of the Company, par value $0.01 per share (the " Company
Common Stock "), in accordance with this Agreement, and each
such share shall automatically be cancelled and retired and shall
cease to exist and, from and after the Effective Time, shall no
longer be outstanding, and each holder of a certificate
representing any such shares of Juniper Common Stock (a " Stock
Certificate ") shall cease to have any rights with respect to
such shares, except, in all cases, the right to receive the Merger
Consideration upon surrender of such Stock Certificate in
accordance with Section 3.2. The right of any holder of any
share of Juniper Common Stock to receive the Merger Consideration
shall be subject to and reduced by the amount of any withholding
that is required under applicable Tax law.
(d)
Conversion of Juniper Stock Options . From and after the
Effective Time, each outstanding Juniper Stock Option will be
exercisable for a number of shares of Company Common Stock equal to
the number of shares of Juniper Common Stock subject to such
Juniper Stock Option immediately before the Effective Time
multiplied by the Exchange Ratio (rounded down to the nearest whole
share), for an exercise price per share of Company Common Stock
equal to the exercise price of such Juniper Stock Option
immediately before the Effective Time divided by the Exchange Ratio
(rounded up to the nearest whole cent). At or before the Effective
Time, the Company Board will have adopted a resolution providing
for the reservation of sufficient shares of Company Common Stock
for issuance upon the exercise of such Juniper Stock Options.
Notwithstanding the foregoing, to the extent a Juniper Stock Option
is unvested and unexercisable as of the Effective Time, such
Juniper Stock Option shall remain subject to the same vesting and
exercise terms and conditions immediately after the Effective Time
as in effect immediately prior to the Effective Time. For the
avoidance of doubt, no Juniper Stock Option that is unvested and
unexercisable as of the Effective Time shall become vested and
exercisable solely by reason of the Merger.
(e)
Effect on Outstanding Juniper Convertible Debentures . From
and after the Effective Time, provided that the provisions of
Section 701 of the respective Juniper Indenture have been complied
with, Juniper's outstanding 8% Convertible Subordinated Debentures
due 2013 and 8% Convertible Subordinated Debentures due 2015 will
remain outstanding obligations of the Surviving Company and will
become convertible into shares of Company Common Stock in
accordance with the terms thereof.
(f)
Adjustments to Exchange Ratio . The Exchange Ratio shall be
adjusted to reflect fully the effect of any reclassification,
combination, subdivision, stock split, reverse split, stock
dividend (including any dividend or distribution of securities
convertible into shares of Juniper Common Stock or Company Common
Stock), reorganization, recapitalization or other like change with
respect to Juniper Common Stock or Company Common Stock occurring
(or for which a record date is established) after the date hereof
and prior to the Effective Time.
3.2. Exchange of
Certificates.
(a)
Exchange Agent. Prior to mailing the Proxy Statement (as
hereinafter defined), the Company shall appoint a bank or trust
company reasonably satisfactory to Juniper to act as Exchange Agent
(the " Exchange Agent ") for the Merger Consideration. By
10:00 a.m., eastern time, on the Closing Date, the Company shall
deliver to the Exchange Agent certificates evidencing the shares of
Company Common Stock sufficient to deliver the aggregate Merger
Consideration and the amount of cash sufficient to pay any cash
payable in lieu of fractional shares (the " Exchange Fund
"). The Exchange Agent shall not be entitled to vote or exercise
any rights of ownership with respect to the shares of Company
Common Stock held by it from time to time hereunder, except that it
shall receive and hold all dividends or other distributions paid or
distributed with respect to such shares of Company Common Stock for
the account of the Persons entitled thereto.
(b)
Stock Transfer Books. At the Effective Time, the common
stock transfer books of Juniper shall be closed and thereafter
there shall be no further registration of transfers of shares of
Juniper Common Stock on the records of Juniper. From and after the
Effective Time, the holders of Stock Certificates representing
ownership of shares of Juniper Common Stock outstanding immediately
prior to the Effective Time shall cease to have rights with respect
to such shares of Juniper Common Stock, except as otherwise
provided for herein. On or after the Effective Time, any Stock
Certificates presented to the Exchange Agent or the Company for any
reason shall be converted into the applicable Merger Consideration
with respect to the shares of Juniper Common Stock formerly
represented thereby.
(c)
Exchange Procedures. As soon as possible after the Effective
Time (but in any event within three Business Days), the Company and
the Surviving Company shall cause the Exchange Agent to mail to
each holder of record of each Stock Certificate that immediately
prior to the Effective Time evidenced outstanding shares of Juniper
Common Stock whose shares were converted into the right to receive
Merger Consideration pursuant to Section 3.1: (i) a
letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Stock Certificate shall
pass to the Exchange Agent, only upon delivery of the Stock
Certificate to the Exchange Agent, and which letter shall be in
such form and have such other provisions as the Company may
reasonably specify) and (ii) instructions for use in effecting
the surrender of the Stock Certificate in exchange for the Merger
Consideration to which the holder thereof is entitled. Upon
surrender of a Stock Certificate for cancellation to the Exchange
Agent or to such other agent or agents reasonably satisfactory to
Juniper as may be appointed by the Company, together with such
letter of transmittal, duly executed and completed in accordance
with the instructions thereto, and such other documents as may
reasonably be required by the Exchange Agent, the holder of such
Stock Certificate shall be entitled to receive in exchange therefor
the Merger Consideration payable in respect of the shares of
Juniper Common Stock previously represented by such Stock
Certificate pursuant to the provisions of this Article III, and the
Stock Certificate so surrendered shall forthwith be canceled. In
the event of a transfer of ownership of one or more shares of
Juniper Common Stock that are not registered in the stock transfer
records of Juniper, payment may be made to a person other than the
person in whose name the Stock Certificate so surrendered is
registered, if such Stock 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 Stock Certificate or establish to the satisfaction of the
Company that such tax has been paid or is not applicable. Until
surrendered as contemplated by this Section 3.2, each Stock
Certificate shall be deemed at any time after the Effective Time to
evidence only the right to receive, upon such surrender, the Merger
Consideration as contemplated by this Section 3.2.
(d)
No Further Ownership Rights in shares of Juniper Common Stock
Exchanged for Merger Consideration. The Merger Consideration
paid upon the surrender for exchange of Stock Certificates
representing shares of Juniper Common Stock in accordance with the
terms of this Article III shall be deemed to have been paid in full
satisfaction of all rights pertaining to the shares of Juniper
Common Stock exchanged for Merger Consideration theretofore
represented by such Stock Certificates.
(e)
No Liability. None of the Company, MergerCo, the Surviving
Company, Juniper or the Exchange Agent, or any employee, officer,
director, agent or Affiliate thereof, shall be liable to any Person
in respect of Merger Consideration from the Exchange Fund delivered
to a public official pursuant to any applicable abandoned property,
escheat or similar Law.
(f)
No Fractional Shares. No certificate or scrip representing
fractional shares of Juniper Common Stock shall be issued upon the
surrender for exchange of Stock Certificates, and such fractional
share interests will not entitle the owner thereof to vote or to
any other rights of a stockholder of the Company. Notwithstanding
any other provision of this Agreement, each holder of a share of
Juniper Common Stock exchanged pursuant to the Merger who would
otherwise have been entitled to receive a fraction of a share of
Company Common Stock (after taking into account all Stock
Certificates delivered by such holder) shall promptly receive, in
lieu thereof, cash (rounding up to the nearest whole cent and
without interest) in an amount equal to such fractional part of one
share of Company Common Stock multiplied by the average closing
price of the Company Common Stock on the NASDAQ during the ten
trading-day period ended two trading days before the Closing
Date.
(g)
Lost Certificates. If any Stock Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that
fact by the Person claiming such Stock Certificate to be lost,
stolen or destroyed and the posting of a bond to the reasonable
satisfaction of the Company and the Exchange Agent, the Exchange
Agent will issue in exchange for such lost, stolen or destroyed
Stock Certificate the Merger Consideration payable in respect
thereof, pursuant to this Agreement.
(h)
Distributions with Respect to Unexchanged Shares . No
dividends or other distributions with respect to shares of Company
Common Stock constituting all or a portion of the Merger
Consideration with a record date after the Effective Time and on or
before the date of surrender of such Stock Certificates shall be
paid to the holder of any unsurrendered Stock Certificate
representing shares of Juniper Common Stock until such Stock
Certificates are surrendered as provided in this Section 3.2.
Subject to the effect of applicable laws, following such surrender,
there shall be paid, without interest, to the record holder of the
shares of Company Common Stock that form a part of the Merger
Consideration issued in respect of such Stock Certificates,
(i) at the time of such surrender, the amount of such
dividends or other distributions payable on or before the date of
such surrender with respect to such shares of Company Common Stock
and not previously paid, less the amount of any withholding taxes
which may be required thereon, and (ii) at the appropriate
payment date, the amount of such dividends or other distributions
with a payment date after the date of surrender payable with
respect to such shares of Company Common Stock, less the amount of
any withholding taxes which may be required thereon.
(i)
Termination of Exchange Fund . Any portion of the Exchange
Fund which remains undistributed to the holders of the Stock
Certificates for twelve (12) months after the Effective Time
shall be delivered to the Company, and any holders of shares of
Juniper Common Stock before the Effective Time who have not
theretofore complied with this Article III shall thereafter look
only to the Company and only as general creditors thereof for
payment of the Merger Consideration.
(j)
Investment of Exchange Fund . The Exchange Agent shall
invest any cash included in the Exchange Fund, as directed by the
Company, on a daily basis. Any interest and other income resulting
from such investments shall be paid to the Company. To the extent
that there are losses with respect to such investments, the Company
shall promptly replace or restore the portion of the Exchange Fund
lost through investments.
3.3. Withholding Rights.
The
Surviving Company or the Exchange Agent, as applicable, shall be
entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of shares of
Juniper Common Stock such amounts as it is required to deduct and
withhold with respect to the making of such payment under the Code,
and the rules and regulations promulgated thereunder, or any Tax
law. To the extent that amounts are so withheld by the Surviving
Company or the Exchange Agent, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to
the holder of shares of Juniper Common Stock in respect of which
such deduction and withholding was made by the Surviving Company or
the Exchange Agent.
ARTICLE
IV REPRESENTATIONS AND WARRANTIES
Concurrently with the execution of this Agreement, each Party has
delivered to the Other Party a disclosure schedule with numbered
sections corresponding to the relevant sections in this Agreement
(as applicable to each Party, such Party's " Disclosure
Schedule "). Any exception, qualification, limitation, document
or other item described in any provision, subprovision, section or
subsection of any Section of the Party's Disclosure Schedule with
respect to a particular representation or warranty contained in
this Article IV shall be deemed to be listed or fully disclosed
with respect to all other sections or subsections of the Party's
Disclosure Schedule as, and to the extent that, it is reasonably
clear that such item applies to such other section or subsection.
Subject to the exceptions and qualifications set forth in each
Party's Disclosure Schedule, each Party represents and warrants to
the Other Party as follows:
4.1. Definition of a Party's
Knowledge.
As
used in this Agreement, the phrase "to the knowledge of the Party"
or any similar phrase means the actual (and not the constructive or
imputed) knowledge of those individuals identified in
Section 4.1 of the Party's Disclosure Schedule.
4.2. Existence; Good Standing;
Authority; Compliance with Law.
(a) The
Party is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation.
The Party is duly qualified or licensed to do business as a foreign
corporation and is in good standing under the laws of any other
jurisdiction in which the character of the properties owned, leased
or operated by it therein or in which the transaction of its
business makes such qualification or licensing necessary, except
where the failure to be so qualified or licensed would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on such Party. The Party has all requisite
corporate power and authority to own, operate, lease and encumber
its assets and carry on its business as now conducted.
(b) The
name and jurisdiction of incorporation or organization of each
Subsidiary of the Party is listed in Section 4.2(b) of the
Party's Disclosure Schedule and each such Subsidiary is a
corporation, limited partnership, limited liability company or
trust, duly formed, validly existing and in good standing under the
laws of its jurisdiction of incorporation or organization. Each
Subsidiary of the Party is duly qualified or licensed to do
business and is in good standing in each jurisdiction in which the
ownership or leasing of its property or the conduct of its business
requires such qualification or licensing, except for jurisdictions
in which such failure to be so qualified, licensed or to be in good
standing would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Party. Each
Subsidiary of the Party has all requisite corporate or other power
and authority to own, operate, lease and encumber its assets and
carry on its business as now conducted. The predecessors of the
Party are listed in Section 4.2(b) of the Party's Disclosure
Schedule.
(c) Neither
the Party nor any of its Subsidiaries is in violation of any order
of any court, governmental authority or arbitration board or
tribunal, or any law, ordinance, governmental rule or regulation to
which the Party or any of its Subsidiaries or any of their
respective properties or assets is subject, where such violation,
alone or together with all other violations, would reasonably be
expected to have a Material Adverse Effect on the Party. The Party
and its Subsidiaries have obtained all licenses, permits and other
authorizations and have taken all actions required by applicable
law or governmental regulations in connection with their businesses
as now conducted, except where the failure to obtain any such
license, permit or authorization or to take any such action, alone
or together with all other such failures, would not reasonably be
expected to have a Material Adverse Effect on the Party.
(d) The
Party has previously provided or made available to representatives
of the Other Party's Special Committee true and complete copies of
the articles or certificate of incorporation and bylaws and the
other charter documents, bylaws, organizational documents and
partnership, limited liability company, trust agreements and joint
venture agreements (and in each such case, all amendments thereto)
of the Party and each of its Subsidiaries as in effect on the date
of this Agreement.
4.3. Authorization, Takeover Laws,
Validity and Effect of Agreements.
The
Party has all requisite corporate power to execute and deliver this
Agreement and to consummate the transactions contemplated hereby
and perform its obligations hereunder. Subject only to obtaining
the Stockholder Approvals, the execution, delivery and performance
by the Party of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on behalf of the Party. In connection
with the foregoing, the Party and its Board of Directors has taken
such actions and votes as are necessary on its part to render the
provisions of any "fair price," "moratorium," "control share
acquisition" or any other anti-takeover statute or similar federal
or state statute inapplicable to this Agreement, the Merger and the
transactions contemplated by this Agreement. This Agreement,
assuming due and valid authorization, execution and delivery hereof
by the Other Party, constitutes a valid and legally binding
obligation of the Party, enforceable against the Party in
accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights or by
general principles of equity.
4.4. Capitalization.
(a) The
number of authorized, issued and outstanding shares of Stock of the
Party of each class and series is listed in Section 4.4(a) of
the Party's Disclosure Schedule. Section 4.4(a) of the Party's
Disclosure Schedule lists, as of February 28, 2007, (i) the number
of shares, and the class and series of such shares, of stock of the
Party reserved for issuance, and the purpose for which such shares
are reserved, (ii) each Stock Option Plan of the Party, and each
Stock Option of the Party outstanding under each such Plan,
including the name of the Person to whom such Stock Option has been
granted, the class, series and number of shares of stock subject to
each such Stock Option and the per share exercise price for each
such Stock Option and (iii) any other outstanding securities of the
Party or any of its Subsidiaries, any options, warrants, calls,
subscriptions or convertible securities, or any other rights,
agreements, commitments or contractual obligations, which obligate
the Party or any of its Subsidiaries to issue, transfer, sell or
repurchase, redeem or otherwise acquire any shares of stock,
beneficial interest, member interest, partnership interest or any
other securities of the Party or any of its Subsidiaries. As of the
date of this Agreement, the Party has not issued any restricted
stock awards, stock appreciation rights or other equity-based
compensatory awards that may involve the future issuance of the
Party's Stock, other than the Party's Stock Options. All of the
outstanding shares of the Party's Stock are, and all shares thereof
which may be issued prior to the Closing Date will be, when issued,
duly authorized, validly issued, fully paid, nonassessable and free
of preemptive rights.
(b)
Section 4.4(b) of the Party's Disclosure Schedule lists all of
the outstanding bonds, debentures, notes or other obligations of
the Party and each of its Subsidiaries, the holders of which have
the right to vote (or which are convertible into or exercisable for
securities having the right to vote) with the stockholders of the
Party on any matter.
(c) There
are no agreements or understandings to which the Party or any of
its Subsidiaries is a party with respect to the voting of any
shares of stock of the Party or which restrict the transfer of any
such shares, nor does the Party have knowledge of any third party
agreements or understandings with respect to the voting of any such
shares or which restrict the transfer of any such shares.
(d) Except
as set forth in Section 4.4(d) of the Party's Disclosure
Schedule, neither the Party nor any of its Subsidiaries is under
any obligation, contingent or otherwise, by reason of any agreement
to register the offer and sale or resale of any of their securities
under the Securities Act.
4.5. Subsidiaries.
Except as set forth in Section 4.5 of the Party's Disclosure
Schedule, all of the issued and outstanding shares or other equity
interests of each of the Party's Subsidiaries are (a) owned
directly or indirectly by the Party free and clear of all Liens and
(b) free of all other restrictions (including restrictions on
the right to vote, sell or otherwise dispose of such capital stock
or other ownership interests) other than those set forth in the
organizational documents and those imposed by applicable Securities
Laws.
4.6. Other Interests .
Except for the interests in the Party's Subsidiaries and except as
set forth in Section 4.15 of the Party's Disclosure Schedule,
neither the Party nor any of its Subsidiaries owns directly or
indirectly any interest or investment (whether equity or debt) in
any Person.
4.7. Consents and Approvals; No
Violations.
Except as set forth in Section 4.7 of the Party's Disclosure
Schedule, assuming that the Stockholder Approvals have been
obtained and except (a) for filings, permits, authorizations,
consents and approvals as may be required under, and other
applicable requirements of, the Exchange Act, the Securities Act,
state securities or state "blue sky" laws, NASDAQ requirements and
any antitrust laws and (b) for filing of the Certificate, none
of the execution, delivery or performance of this Agreement by the
Party, the consummation by the Party of the transactions
contemplated hereby or compliance by the Party with any of the
provisions hereof will (i) conflict with or result in any
breach of any provision of the organizational documents of the
Party or any of its Subsidiaries, (ii) require any filing by
the Party with, notice to, or permit, authorization, consent or
approval of, any state or federal government or governmental
authority or by any United States or state court of competent
jurisdiction (a " Governmental Entity "), (iii) result
in a violation or breach by the Party of, or constitute (with or
without due notice or lapse of time or both) a default (or give
rise to any right of termination, cancellation or acceleration or
any loss of benefit) under, any of the terms, conditions or
provisions of any Material Contract to which the Party or any of
its Subsidiaries is a party or by which it or any of its Properties
or Assets may be bound, or (iv) violate any order, writ,
injunction, decree, statute, rule or regulation (collectively, "
Laws ") applicable to the Party or any of its Subsidiaries
or any of their respective properties or assets; excluding from the
foregoing clauses (ii), (iii) and (iv) such filings,
notices, permits, authorizations, consents, approvals, violations,
breaches or defaults which would not, individually or in the
aggregate, (A) prevent or materially delay consummation of the
Merger, (B) otherwise prevent or materially delay performance
by the Party of its material obligations under this Agreement or
(C) reasonably be expected to have a Material Adverse Effect
on the Party.
4.8. No Restraints .
Neither the Party nor any of its Subsidiaries is or will be subject
to any outstanding judgment, order, restraining order, and/or
injunction (temporary or otherwise), decree, statute, law,
ordinance, rule or regulation, entered, enacted, promulgated,
enforced or issued by any court or other Governmental Entity or
other legal restraint or prohibition, or is party to any written
agreement, consent agreement or memorandum of understanding that
materially restricts the conduct of its business or that relates to
policies, affairs, managements or its business, except any such
judgments, orders, injunctions, decrees, statutes, laws,
ordinances, rules, regulations or restrictions that would not have
a Material Adverse Effect on the Party.
4.9. SEC Reports; Financial
Statements.
Except as set forth in Section 4.9 of the Party's Disclosure
Schedule:
(a) The
Party has timely filed (and, from the date hereof until the Closing
Date, will timely file) all required forms, reports and
registration statements (and any and all certificates required
pursuant to the Sarbanes-Oxley Act of 2002 (" SOX "), as
applicable) with the SEC since the first day of the Party's fiscal
year ended in 2004 (collectively, the Party's " SEC Reports
"), all of which were (and will be) prepared in all material
respects in accordance with the applicable requirements of the
Exchange Act, the Securities Act and the rules and regulations
promulgated thereunder (the " Securities Laws "). At the
time filed, furnished or communicated (and, in the case of
registration statements and proxy statements, on the dates of
effectiveness and the dates of the relevant meetings,
respectively), the Party's SEC Reports (i) complied as to form
in all material respects with the applicable requirements of the
Securities Laws and (ii) 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 made therein, in
the light of the circumstances under which they were made, not
misleading.
(b) Each
of the consolidated balance sheets of the Party included in or
incorporated by reference into the Party's SEC Reports (including
the related notes and schedules) complied as to form, as of their
report filing dates, in all material respects with the Securities
Laws and fairly presents in all material respects the consolidated
financial position of the Party and its Subsidiaries as of its date
and each of the consolidated statements of income, retained
earnings and cash flows of the Party included in or incorporated by
reference into the Party's SEC Reports (including any related notes
and schedules) fairly presents in all material respects the results
of operations, retained earnings or cash flows, as the case may be,
of the Party and its Subsidiaries for the periods set forth
therein, in each case in accordance with GAAP consistently applied
during the periods involved, except as may be noted therein and
except, in the case of the unaudited statements, as permitted by
Form 10-Q pursuant to Sections 13 or 15(d) of the Exchange Act
and for normal year-end audit adjustments which would not be
material in amount or effect. To the knowledge of the Party, there
are no outstanding and unresolved comments from the SEC with
respect to any of the Party's SEC Reports. There are no liabilities
of the Party or any of its Subsidiaries of any kind whatsoever,
known or unknown, whether or not accrued and whether or not
contingent or absolute, other than (i) liabilities disclosed
in the Party's consolidated balance sheet as of the last day of the
most recently completed fiscal year of the Party included in the
Party's Annual Report on Form 10-K for the fiscal year ended on
such date and (ii) liabilities incurred in the ordinary course
of business consistent with past practice since such date, none of
which are reasonably expected to result in a Material Adverse
Effect on the Party.
(c) The
Party is in compliance in all material respects with the applicable
listing and corporate governance rules and regulations of NASDAQ.
Except as permitted by the Exchange Act, including Sections
13(k)(2) and (3) or the rules of the SEC, since the enactment of
SOX, neither the Party nor any of its Subsidiaries has made or
arranged any loan or other extension of credit to any executive
officer or director of the Party and there are no outstanding loans
or other extensions of credit to any executive officers or
directors of the Party or any of its Subsidiaries.
(d) No
Subsidiary of the Party is required to make any filing with the
SEC.
(e) The
Party has established and maintains a system of "disclosure
controls and procedures" and "internal control over financial
reporting" (as such terms are defined in paragraphs (e) and
(f), respectively, of Rule 13a-15 under the Exchange Act)
sufficient to provide reasonable assurance (A) that
transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP, consistently applied,
(B) that transactions are executed only in accordance with the
authorization of management and (C) regarding prevention or
timely detection of the unauthorized acquisition, use or
disposition of the Party's assets. As of the last day of the most
recently completed fiscal year of the Party, (x) there were no
"material weaknesses" (as defined by the Public Company Accounting
Oversight Board) and (y) there was no series of multiple
"significant deficiencies" (as defined by the Public Company
Accounting Oversight Board) that was reasonably likely to
collectively represent a "material weakness" in the design or
operation of the Party's internal controls. Since the last day of
the most recently completed fiscal year of the Party, neither the
Party nor any of its Subsidiaries nor, to the Party's knowledge,
the Party's independent auditors, have identified or been made
aware of (A) any material weakness in the system of internal
controls utilized by the Party and its Subsidiaries, (B) any
fraud, whether or not material, that involves the Party's
management or other employees who have a role in the preparation of
financial statements or the internal controls utilized by the Party
and its Subsidiaries or (C) any material claim or allegation
regarding any of the foregoing.
(f) The
"disclosure controls and procedures" (as defined in Rules 13a-15(e)
and 15d-15(e) of the Exchange Act) utilized by the Party are
reasonably designed to ensure that all information (both financial
and non-financial) required to be disclosed by the Party in the
reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the SEC, and that all
such information required to be disclosed is accumulated and
communicated to the Party's management as appropriate to allow
timely decisions regarding required disclosure and to enable the
Principal Executive Officer and Principal Financial Officer of the
Party to make the certifications required under the Exchange Act
with respect to such reports.
(g) Since
the first day of the Party's fiscal year ended in 2004, no material
complaints from any source regarding accounting, internal
accounting controls or auditing matters, and no concerns from the
Party's employees regarding questionable accounting or auditing
matters, have been received by the Party. No attorney representing
the Party or any of its Subsidiaries, whether or not employed by
the Party or any of its Subsidiaries, has reported evidence of a
violation of securities laws, breach of fiduciary duty or similar
violation by the Party or any of its officers, directors, employees
or agents to the Party's chief legal officer, audit committee (or
other committee designated for the purpose) of the Board of
Directors or the Board of Directors pursuant to the rules adopted
pursuant to Section 307 of SOX or any Company policy contemplating
such reporting, including in instances not required by those
rules.
(h) The
Party has provided to representatives of the Special Committee of
the Other Party's Board of Directors true and complete copies of
all management letters received from its independent auditors since
the first day of the Party's fiscal year ended in 2004, and if no
such management letters have been received, the Party has provided
copies of all correspondence from its independent auditors during
such period relating to subject matter of the same type as would be
included in a management letter.
(i) The
date of each Stock Option of the Party that is reflected in the
Party's books and records is the actual date of grant thereof, as
determined under GAAP. All of the Party's Stock Options were
granted with an exercise price at least equal to the fair market
value of the Party's Common Stock on the actual date of grant of
such Stock Option and no Stock Option of the Party has been amended
to reduce the exercise price from that in effect on the actual date
of grant, except pursuant to non-discretionary antidilution
provisions governing such Stock Option. The financial statements of
the Party included in the Party's SEC Reports fairly reflect in all
material respects amounts required to be shown as expense in
connection with the grant and/or amendment of any of the Party's
Stock Options.
4.10. Litigation.
Except as set forth in Section 4.10 of the Party's Disclosure
Schedule, no suit, claim, action, proceeding or investigation is
pending nor, to the knowledge of the Party, threatened against the
Party or any of its Subsidiaries, nor is there any outstanding
order, writ, judgment, injunction or decree of any Governmental
Entity or other person against the Party or any of its
Subsidiaries.
4.11. Permits
The
Party and its Subsidiaries hold all permits, licenses, variances,
exemptions, orders and approvals of all Governmental Entities
necessary for the lawful conduct of their respective businesses
(such Party's " Permits "), except for failures to hold
Permits that would not have a Material Adverse Effect on the Party.
The Party and its Subsidiaries are in compliance with the terms of
its Permits, except where the failure so to comply would not have a
Material Adverse Effect on the Party. The businesses of the Party
and its Subsidiaries have not been and are not being conducted in
violation of any law except for violations that would not have a
Material Adverse Effect on the Party. No investigation or review by
any Governmental Entity with respect to the Party or any of its
Subsidiaries is pending or, to the knowledge of the Party,
threatened, nor has any Governmental Entity indicated an intention
to conduct any such investigation or review, other than, in each
case, where the outcome would not have a Material Adverse Effect on
the Party.
4.12. Absence of Certain
Changes.
Except as disclosed in the Party's SEC Reports, (i) from the
beginning of the Party's fiscal year ended in 2006 through the date
hereof, there has not been, and no event has occurred or failed to
occur that, with the passage of time, will cause, a Material
Adverse Effect on the Party and (ii) the Party and its Subsidiaries
have conducted their businesses only in the ordinary course of
business and there has not been any action contemplated by
Section 5.1.
4.13. Taxes .
Except as otherwise provided in Section 4.13 of the Party's
Disclosure Schedule:
(a) Beginning
with their taxable year ended in 2000 or, if later, their first
taxable year (the Party's or Subsidiary's " Initial Tax Year
"), and each taxable year thereafter, each of the Party and its
Subsidiaries (i) has timely filed all Tax Returns and reports
required to be filed by it (after giving effect to any filing
extension properly granted by a Governmental Entity having
authority to do so), and all such Tax Returns and reports are true,
accurate and complete in all material respects, and (ii) has
paid (or the Party has paid on its behalf) within the time and
manner prescribed by law, all Taxes other than, in each case, where
the failure to file such Tax Returns or pay such Taxes, as
applicable, would not have a Material Adverse Effect on the Party.
True, correct and complete copies of all Tax Returns of the Party
and its Subsidiaries and all written communications with any taxing
authority relating to such Tax Returns requested by the
representatives of the Other Party's Special Committee have been
delivered or made available to such representatives.
Section 4.13 of the Party's Disclosure Schedule lists all
federal and state income Tax Returns filed with respect to the
Party and its Subsidiaries beginning with the Party's or
Subsidiary's Initial Tax Year that have been audited, and indicates
those Tax Returns, if any, that currently are the subject of audit.
No unpaid deficiencies for any Taxes have been proposed, asserted
or assessed in writing against the Party or any of its
Subsidiaries, including claims by any taxing authority in a
jurisdiction where neither the Party nor any of its Subsidiaries
files Tax Returns that the Party or any of its Subsidiaries is, or
may be, subject to taxation by that jurisdiction, and no requests
for waivers of any statute of limitations in respect of Taxes have
been made and no extensions of the time to assess or collect any
such Tax are pending and no such waiver remains in effect. Neither
the Party nor any of its Subsidiaries is a party to or the subject
of any audit, examination, action or proceedings by any taxing
authority for assessment or collection of any Tax, to the knowledge
of the Party no audit, examination, action or proceeding in respect
of Taxes involving the Party or any of its Subsidiaries is being
considered by any taxing authority, and no claim for assessment or
collection of any Tax has been assessed against the Party or any of
its Subsidiaries.
(b) For
the purpose of this Agreement, (i) the term " Tax " or
" Taxes " shall mean any federal, state, local or foreign
income, gross receipts, license, payroll, employment, excise,
severance, windfall profits, environmental (including taxes under
Code Section 59A), franchise, profits, withholding, social
security (or similar), unemployment, disability, real property,
personal property, sales, use, transfer, rollback, registration,
value added, alternative or add-on minimum, estimated,
