EXHIBIT 2.1
AGREEMENT AND PLAN
OF MERGER
PI NEVADA BUILDING
COMPANY
|
Dated as of April 7, 2009
|
Table of
Contents
|
|
|
|
|
Page
|
|
ARTICLE I
|
|
THE
MERGER
|
|
Section 1.1
|
|
The Merger
|
|
2
|
|
Section 1.2
|
|
Closing
|
|
2
|
|
Section 1.3
|
|
Effective Time
|
|
2
|
|
Section 1.4
|
|
Effects of the
Merger
|
|
2
|
|
Section 1.5
|
|
Articles of Incorporation
and By-laws of the Surviving Corporation
|
|
2
|
|
Section 1.6
|
|
Directors
|
|
3
|
|
Section 1.7
|
|
Officers
|
|
3
|
|
ARTICLE II
|
|
CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES
|
|
Section 2.1
|
|
Effect on Capital
Stock
|
|
3
|
|
Section 2.2
|
|
Exchange of
Shares
|
|
4
|
|
ARTICLE III
|
|
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
|
|
Section 3.1
|
|
Qualification;
Organization, Subsidiaries, etc
|
|
7
|
|
Section 3.2
|
|
Capital Stock
|
|
8
|
|
Section 3.3
|
|
Corporate Authority
Relative to This Agreement; No Violation
|
|
9
|
|
Section 3.4
|
|
Reports and Financial
Statements
|
|
10
|
|
Section 3.5
|
|
Internal Controls and
Procedures
|
|
11
|
|
Section 3.6
|
|
No Undisclosed
Liabilities
|
|
11
|
|
Section 3.7
|
|
Compliance with Law;
Permits
|
|
12
|
|
Section 3.8
|
|
Environmental Laws and
Regulations
|
|
12
|
|
Section 3.9
|
|
Employee Benefit
Plans
|
|
13
|
|
Section 3.10
|
|
Absence of Certain Changes
or Events
|
|
15
|
|
Section 3.11
|
|
Investigations;
Litigation
|
|
15
|
|
Section 3.12
|
|
Information
Supplied
|
|
15
|
|
Section 3.13
|
|
Tax Matters
|
|
16
|
|
Section 3.14
|
|
Employment and Labor
Matters
|
|
17
|
|
Section 3.15
|
|
Intellectual
Property
|
|
17
|
|
Section 3.16
|
|
Real Property
|
|
17
|
|
Section 3.17
|
|
Required Vote of the
Company Stockholders
|
|
19
|
|
Section 3.18
|
|
Opinion of Financial
Advisor
|
|
19
|
|
Section 3.19
|
|
Material
Contracts
|
|
19
|
|
Section 3.20
|
|
Finders or
Brokers
|
|
20
|
|
Section 3.21
|
|
Insurance
|
|
20
|
|
Section 3.22
|
|
Tax Treatment
|
|
21
|
|
Section 3.23
|
|
Rights Plan
|
|
21
|
|
Section 3.24
|
|
Anti-Takeover
Laws
|
|
21
|
|
Section 3.25
|
|
No Additional
Representations
|
|
21
|
|
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
|
|
Section 4.1
|
|
Qualification; Organization, Subsidiaries,
etc
|
|
22
|
|
Section 4.2
|
|
Capital Stock
|
|
23
|
|
Section 4.3
|
|
Corporate Authority Relative to This
Agreement; No Violation
|
|
24
|
|
Section 4.4
|
|
Reports and Financial Statements
|
|
25
|
|
Section 4.5
|
|
Internal Controls and Procedures
|
|
26
|
|
Section 4.6
|
|
No Undisclosed Liabilities
|
|
26
|
|
Section 4.7
|
|
Compliance with Law; Permits
|
|
26
|
|
Section 4.8
|
|
Environmental Laws and Regulations
|
|
27
|
|
Section 4.9
|
|
Employee Benefit Plans
|
|
27
|
|
Section 4.10
|
|
Absence of Certain Changes or Events
|
|
28
|
|
Section 4.11
|
|
Investigations; Litigation
|
|
29
|
|
Section 4.12
|
|
Information Supplied
|
|
29
|
|
Section 4.13
|
|
Tax Matters
|
|
29
|
|
Section 4.14
|
|
Employment and Labor Matters
|
|
30
|
|
Section 4.15
|
|
Intellectual Property
|
|
30
|
|
Section 4.16
|
|
Real Property
|
|
31
|
|
Section 4.17
|
|
Required Vote of Parent Stockholders; Merger
Sub Approval
|
|
32
|
|
Section 4.18
|
|
Opinion of Financial Advisor
|
|
33
|
|
Section 4.19
|
|
Material Contracts
|
|
33
|
|
Section 4.20
|
|
Finders or Brokers
|
|
33
|
|
Section 4.21
|
|
Lack of Ownership of Company Common
Stock
|
|
34
|
|
Section 4.22
|
|
Insurance
|
|
34
|
|
Section 4.23
|
|
Tax Treatment
|
|
34
|
|
Section 4.24
|
|
Rights Plan
|
|
34
|
|
Section 4.25
|
|
No Additional Representations
|
|
34
|
|
ARTICLE V
COVENANTS AND AGREEMENTS
|
|
Section 5.1
|
|
Conduct of Business by the Company
|
|
35
|
|
Section 5.2
|
|
Conduct of Business by Parent
|
|
39
|
|
Section 5.3
|
|
Investigation
|
|
41
|
|
Section 5.4
|
|
Non-Solicitation
|
|
41
|
|
Section 5.5
|
|
Filings; Other Actions
|
|
44
|
|
Section 5.6
|
|
Stock Options and Other Stock-Based Awards;
Employee Matters
|
|
46
|
|
Section 5.7
|
|
Reasonable Best Efforts
|
|
51
|
|
Section 5.8
|
|
Takeover Statute
|
|
53
|
|
Section 5.9
|
|
Public Announcements
|
|
53
|
|
Section 5.10
|
|
Indemnification and Insurance
|
|
53
|
|
Section 5.11
|
|
Control of Operations
|
|
55
|
|
Section 5.12
|
|
Certain Transfer Taxes
|
|
55
|
|
Section 5.13
|
|
Section 16 Matters
|
|
55
|
|
Section 5.14
|
|
Tax Matters
|
|
56
|
|
Section 5.15
|
|
Listing of Shares of Parent Common
Stock
|
|
56
|
|
Section 5.16
|
|
Board of Directors of Parent
|
|
56
|
-ii-
|
Section 5.17
|
|
Dallas Business Presence
|
|
56
|
|
Section 5.18
|
|
Officers of Parent
|
|
56
|
|
Section 5.19
|
|
Rights Agreements
|
|
56
|
|
ARTICLE VI
CONDITIONS TO THE MERGER
|
|
Section 6.1
|
|
Conditions to Each Party’s Obligation to
Effect the Merger
|
|
57
|
|
Section 6.2
|
|
Conditions to Obligation of the Company to
Effect the Merger
|
|
58
|
|
Section 6.3
|
|
Conditions to Obligation of Parent to Effect
the Merger
|
|
59
|
|
ARTICLE VII
TERMINATION
|
|
Section 7.1
|
|
Termination or Abandonment
|
|
60
|
|
Section 7.2
|
|
Termination Fees
|
|
61
|
|
ARTICLE VIII
MISCELLANEOUS
|
|
Section 8.1
|
|
No Survival of Representations and
Warranties
|
|
63
|
|
Section 8.2
|
|
Expenses
|
|
63
|
|
Section 8.3
|
|
Counterparts; Effectiveness
|
|
63
|
|
Section 8.4
|
|
Governing Law
|
|
63
|
|
Section 8.5
|
|
Jurisdiction; Enforcement
|
|
63
|
|
Section 8.6
|
|
Waiver of Jury Trial
|
|
64
|
|
Section 8.7
|
|
Notices
|
|
64
|
|
Section 8.8
|
|
Assignment; Binding Effect
|
|
65
|
|
Section 8.9
|
|
Severability
|
|
66
|
|
Section 8.10
|
|
Entire Agreement
|
|
66
|
|
Section 8.11
|
|
Amendments; Waivers
|
|
66
|
|
Section 8.12
|
|
Headings
|
|
66
|
|
Section 8.13
|
|
Interpretation
|
|
66
|
|
Section 8.14
|
|
Definitions
|
|
67
|
|
|
|
EXHIBITS
|
|
|
|
|
|
|
|
Exhibit A – Articles of
Incorporation
|
|
|
|
Exhibit B – By-Laws
|
|
|
-iii-
AGREEMENT
AND PLAN OF MERGER, dated as of April 7, 2009 (the “
Agreement ”), among Pulte Homes, Inc., a Michigan
corporation (“ Parent ”), Pi Nevada Building
Company, a Nevada corporation and a direct wholly owned subsidiary
of Parent (“ Merger Sub ”) and Centex
Corporation, a Nevada corporation (the “ Company
”).
WHEREAS, the parties intend that
Merger Sub be merged with and into the Company (the
“Merger”), with the Company surviving the Merger as a
wholly owned subsidiary of Parent;
WHEREAS, the Board of Directors of
the Company (the “ Company Board ”) has (a)
determined that it is in the best interests of the Company and its
stockholders, and declared it advisable, to enter into this
Agreement, (b) adopted this Agreement and approved the consummation
of the transactions contemplated hereby, including the Merger, upon
the terms and subject to the conditions set forth herein and (c)
resolved to recommend approval of this Agreement and the
transactions contemplated hereby by the stockholders of the
Company;
WHEREAS, the Board of Directors of
Parent (the “ Parent Board ”) has (a) determined
that it is in the best interests of Parent and its stockholders,
and declared it advisable, to enter into this Agreement, (b)
approved the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby,
including the Merger, and (c) resolved to recommend to its
stockholders approval of the Charter Amendment and the Stock
Issuance;
WHEREAS, Parent, as the sole
stockholder of Merger Sub, has approved this Agreement and the
transactions contemplated hereby, including the Merger;
WHEREAS, as an inducement to the
parties entering into this Agreement and incurring the obligations
set forth herein, concurrently with the execution and delivery of
this Agreement certain of the directors and officers of the Company
and Parent are entering into separate Voting Agreements pursuant to
which they have agreed to support the Merger upon the terms and
conditions set forth therein (collectively, the “ Voting
Agreements ”);
WHEREAS, for Federal income tax
purposes, it is intended that the Merger shall qualify as a
“reorganization” within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the “
Code ”), and that this Agreement will be, and hereby
is, adopted as a plan of reorganization; and
WHEREAS, Parent, Merger Sub and
the Company desire to make certain representations, warranties,
covenants and agreements specified herein in connection with this
Agreement.
NOW, THEREFORE, in consideration
of the foregoing and the representations, warranties, covenants and
agreements contained herein, and intending to be legally bound
hereby, Parent, Merger Sub and the Company agree as follows:
-1-
ARTICLE I
THE MERGER
Section 1.1 The
Merger
. At the Effective Time,
upon the terms and subject to the conditions set forth in this
Agreement and in accordance with the applicable provisions of the
Nevada Revised Statutes (the “ NRS ”), Merger
Sub shall be merged with and into the Company, whereupon the
separate corporate existence of Merger Sub shall cease, and the
Company shall continue its corporate existence under Nevada law as
the surviving corporation in the Merger (the “ Surviving
Corporation ”) and a direct wholly owned subsidiary of
Parent.
Section 1.2 Closing . The
closing of the Merger (the “ Closing ”) shall
take place at the offices of Sidley Austin LLP, One South Dearborn,
Chicago, Illinois at 10:00 a.m., local time, on a date to be
specified by the parties (the “ Closing Date ”)
which shall be no later than the second business day after the
satisfaction or waiver (to the extent permitted by applicable Law)
of the conditions set forth in Article VI (other than those
conditions that by their nature are to be satisfied at the Closing,
but subject to the satisfaction or waiver of such conditions), or
at such other place, date and time as the Company and Parent may
agree in writing.
Section 1.3 Effective
Time
. On the Closing Date,
the Company and Merger Sub shall file the articles of merger (the
“ Articles of Merger ”), executed in accordance
with, and containing such information as is required by, the
relevant provisions of the NRS with the Secretary of State of the
State of Nevada. The Merger shall become effective at such time as
the Articles of Merger is duly filed with the Secretary of State of
the State of Nevada, or at such later time as is agreed between the
parties and specified in the Articles of Merger in accordance with
the applicable provisions of the NRS (such date and time is
hereinafter referred to as the “ Effective Time
”).
Section 1.4 Effects
of the
Merger . The
effects of the Merger shall be as provided in this Agreement and in
the applicable provisions of the NRS. Without limiting the
generality of the foregoing, and subject thereto, at the Effective
Time, all of the property, rights, privileges, powers and
franchises of the Company and Merger Sub shall vest in the
Surviving Corporation, and all debts, liabilities and duties of the
Company and Merger Sub shall become the debts, liabilities and
duties of the Surviving Corporation, all as provided under the
NRS.
Section 1.5 Articles
of Incorporation and
By-laws of the Surviving Corporation .
(a) At the Effective Time, the
articles of incorporation of Merger Sub as in effect immediately
prior to the Effective Time, in the form attached hereto as
Exhibit A , shall be the articles of incorporation of the
Surviving Corporation until thereafter amended in accordance with
the provisions thereof and hereof and applicable Law, in each case
consistent with the obligations set forth in Section 5.10;
provided , however , that Section 1 of the articles
of incorporation of the Surviving Corporation shall be amended in
its entirety to read as follows: “Name of Corporation: Centex
Corporation.”
-2-
(b) At the
Effective Time, the by-laws of Merger Sub as in effect immediately
prior to the Effective Time, in the form attached hereto as
Exhibit B , shall be the by-laws of the Surviving
Corporation until thereafter amended in accordance with the
provisions thereof and hereof and applicable Law, in each case
consistent with the obligations set forth in Section 5.10.
Section 1.6 Directors
. Subject to applicable
Law, the directors of Merger Sub immediately prior to the Effective
Time shall be the initial directors of the Surviving Corporation
and shall hold office until their respective successors are duly
elected and qualified, or their earlier death, resignation or
removal.
Section 1.7 Officers . The
officers of the Company immediately prior to the Effective Time
shall be the initial officers of the Surviving Corporation and
shall hold office until their respective successors are duly
elected and qualified, or their earlier death, resignation or
removal.
CONVERSION OF
SHARES; EXCHANGE OF CERTIFICATES
Section 2.1 Effect on Capital
Stock . At the Effective Time, by virtue of the Merger and
without any action on the part of the Company, Merger Sub or the
holders of any securities of the Company or Merger Sub:
(a) Conversion of Company
Common Stock . Subject to Sections 2.1(b) and 2.1(d), each
issued and outstanding share of common stock, par value $.25 per
share, of the Company (together with the preferred share purchase
rights granted pursuant to the Company Rights Agreement (the
“ Company Rights ”)) outstanding immediately
prior to the Effective Time (such shares, collectively, “
Company Common Stock, ” and each, a “
Share ”), other than any Cancelled Shares shall
thereupon be converted automatically into and shall thereafter
represent the right to receive 0.975 (the “ Exchange
Ratio ”) fully paid and nonassessable shares of common
stock, par value $0.01 per share (“ Parent Common
Stock ”), including the preferred share purchase rights
granted pursuant to the Parent Rights Agreement (the “
Parent Rights ”), of Parent (the “ Merger
Consideration ”). All references in this Agreement to
Parent Common Stock shall be deemed to include the associated
Parent Rights unless the context requires otherwise. As a result of
the Merger, at the Effective Time, each holder of Shares shall
cease to have any rights with respect thereto, except the right to
receive the Merger Consideration payable in respect of such Shares
which are issued and outstanding immediately prior to the Effective
Time, any cash in lieu of fractional shares of Parent Common Stock
payable pursuant to Section 2.1(d) and any dividends or other
distributions payable pursuant to Section 2.2(c), all to be issued
or paid, without interest, in consideration therefor upon the
surrender of such Shares in accordance with Section 2.2(b) .
(b) Cancellation of Shares
. Each Share that is owned by Parent or Merger Sub immediately
prior to the Effective Time or held by the Company immediately
prior to the Effective Time (in each case, other than any other
Shares held on behalf of third parties) (the “ Cancelled
Shares ”) shall, by virtue of the Merger and without any
action on the part of the
-3-
holder thereof, be cancelled and retired
and shall cease to exist, and no consideration shall be delivered
in exchange for such cancellation and retirement.
(c) Conversion of Merger Sub
Common Stock . At the Effective Time, by virtue of the Merger
and without any action on the part of the holder thereof, each
share of common stock, par value $0.01 per share, of Merger Sub
issued and outstanding immediately prior to the Effective Time
shall be converted into and become one validly issued, fully paid
and nonassessable share of common stock, par value $0.01 per share,
of the Surviving Corporation and shall constitute the only
outstanding shares of capital stock of the Surviving Corporation.
From and after the Effective Time, all certificates representing
the common stock of Merger Sub shall be deemed for all purposes to
represent the number of shares of common stock of the Surviving
Corporation into which they were converted in accordance with the
immediately preceding sentence.
(d) Fractional
Shares
. No fractional shares
of Parent Common Stock shall be issued in the Merger, but in lieu
thereof each holder of Shares otherwise entitled to a fractional
share of Parent Common Stock will be entitled to receive, from the
Exchange Agent in accordance with the provisions of this Section
2.1(d), a cash payment in lieu of such fractional share of Parent
Common Stock equal to the product obtained by multiplying (A) such
fractional share interest to which such holder (after taking into
account all fractional share interests then held by such holder,
and rounding such fractional share interest to four decimal places)
would otherwise be entitled by (B) the per share value calculated
as the average of the closing sale prices of one share of Parent
Common Stock for the five most recent days that the Parent Common
Stock has traded ending on the last full trading day immediately
prior to the Effective Time. The parties acknowledge that payment
of cash in lieu of fractional shares of Parent Common Stock is
solely for the purpose of avoiding the expense and inconvenience to
Parent of issuing fractional shares and does not represent
separately bargained-for consideration. As promptly as practicable
after the determination of the aggregate amount of cash, if any, to
be paid to holders of Shares that would otherwise receive
fractional shares of Parent Common Stock, the Exchange Agent shall
so notify Parent, and Parent shall reasonably promptly thereafter
deposit such amount with the Exchange Agent and shall cause the
Exchange Agent to forward payments to such holders without
interest, subject to and in accordance with the terms of Section
2.2.
(e) Adjustments to the Exchange
Ratio . If at any time during the period between the date of
this Agreement and the Effective Time, any change in the
outstanding shares of capital stock of the Company or Parent shall
occur as a result of any reclassification, stock split (including a
reverse stock split) or combination, exchange or readjustment of
shares, or any stock dividend or stock distribution with a record
date during such period, the Exchange Ratio, the Merger
Consideration and any other similarly dependent items shall be
equitably adjusted to reflect such change.
Section 2.2 Exchange of Shares
.
(a) Exchange Agent . Prior
to the Effective Time, Parent shall appoint Computershare Trust
Company, N.A. or such other exchange agent reasonably acceptable to
the Company (the “ Exchange Agent ”) for the
purpose of exchanging Shares for the Merger
-4-
Consideration. Prior to the Effective
Time, Parent shall deposit, or shall cause to be deposited, with
the Exchange Agent, in trust for the benefit of holders of the
Shares, the Restricted Shares and Restricted Stock Units,
certificates representing the shares of Parent Common Stock
issuable pursuant to Sections 2.1(a) and 5.6(a)(ii) (or appropriate
alternative arrangements shall be made by Parent if uncertificated
shares of Parent Common Stock will be issued). Following the
Effective Time, Parent agrees to make available to the Exchange
Agent, from time to time as needed, cash sufficient to pay any
dividends and other distributions pursuant to Section 2.2(c) . All
certificates representing shares of Parent Common Stock (including
the amount of any dividends or other distributions payable with
respect thereto pursuant to Section 2.2(c) and cash in lieu of
fractional shares of Parent Common Stock to be paid pursuant to
Section 2.1(d)) are hereinafter referred to as the “
Exchange Fund .”
(b) Exchange
Procedures
. As soon as reasonably
practicable after the Effective Time and in any event not later
than the third business day following the Effective Time, Parent
shall cause the Exchange Agent to mail to each holder of Shares,
which at the Effective Time were converted into the right to
receive the Merger Consideration pursuant to Section 2.1, (i) a
letter of transmittal (which shall specify that delivery shall be
effected, and that risk of loss and title to the Shares shall pass,
only upon delivery of the Shares to the Exchange Agent and which
shall be in form and substance reasonably satisfactory to Parent
and the Company) and (ii) instructions for use in effecting the
surrender of the Shares in exchange for certificates representing
whole shares of Parent Common Stock (or appropriate alternative
arrangements shall be made by Parent if uncertificated shares of
Parent Common Stock will be issued), cash in lieu of any fractional
shares of Parent Common Stock pursuant to Section 2.1(d) and any
dividends or other distributions payable pursuant to Section 2.2(c)
. Upon surrender of Shares for cancellation to the Exchange Agent,
together with such letter of transmittal, duly completed and
validly executed in accordance with the instructions thereto, and
such other documents as may reasonably be required by the Exchange
Agent, the holder of such Shares shall be entitled to receive in
exchange therefor that number of whole shares of Parent Common
Stock (after taking into account all Shares surrendered by such
holder) to which such holder is entitled pursuant to Section 2.1
(which shall be in uncertificated book entry form unless a physical
certificate is requested), payment by cash or check in lieu of
fractional shares of Parent Common Stock which such holder is
entitled to receive pursuant to Section 2.1(d) and any dividends or
distributions payable pursuant to Section 2.2(c), and the Shares so
surrendered shall forthwith be cancelled. If any portion of the
Merger Consideration is to be registered in the name of a person
other than the person in whose name the applicable surrendered
Share is registered, it shall be a condition to the registration
thereof that the surrendered Share be in proper form for transfer
and that the person requesting such delivery of the Merger
Consideration pay any transfer or other similar Taxes required as a
result of such registration in the name of a person other than the
registered holder of such Share or establish to the satisfaction of
the Exchange Agent that such Tax has been paid or is not payable.
Until surrendered as contemplated by this Section 2.2(b), each
Share shall be deemed at any time after the Effective Time to
represent only the right to receive the Merger Consideration (and
any amounts to be paid pursuant to Section 2.1(d) or Section
2.2(c)) upon such surrender. No interest shall be paid or shall
accrue on any amount payable pursuant to Section 2.1(d) or Section
2.2(c) . If any certificate representing any Share(s) shall have
been lost, stolen or destroyed, Parent may, in its discretion and
as a condition precedent to the issuance of any certificate or
evidence of shares in book-entry form representing Parent Common
Stock, require the owner of such lost, stolen or
-5-
destroyed certificate representing any
Share(s) to provide a customary affidavit and to deliver a bond in
a reasonable amount as Parent may reasonably direct as indemnity
against any claim that may be made against the Exchange Agent,
Parent or the Surviving Corporation with respect to such
certificate representing such Share(s).
(c) Distributions
with Respect to
Unexchanged Shares . No dividends or other distributions
with respect to shares of Parent Common Stock with a record date
after the Effective Time shall be paid to the holder of any
unsurrendered Share with respect to the shares of Parent Common
Stock represented thereby, and no cash payment in lieu of
fractional shares of Parent Common Stock shall be paid to any such
holder pursuant to Section 2.1(d), until in either case, such Share
has been surrendered in accordance with this Article II. Following
surrender of any such Share, there shall be paid to the
recordholder thereof, without interest, (i) promptly after such
surrender, the number of whole shares of Parent Common Stock
issuable in exchange therefor pursuant to this Article II, together
with any cash payable in lieu of a fractional share of Parent
Common Stock to which such holder is entitled pursuant to Section
2.1(d) and the amount of dividends or other distributions with a
record date after the Effective Time theretofore paid with respect
to such whole shares of Parent Common Stock and (ii) at the
appropriate payment date, the amount of dividends or other
distributions with a record date after the Effective Time and a
payment date subsequent to such surrender payable with respect to
such whole shares of Parent Common Stock. The Exchange Agent,
Parent or the Surviving Corporation, as applicable, shall be
entitled to deduct and withhold from the consideration otherwise
payable under this Agreement to any holder of Shares or holder of
Restricted Shares or Restricted Stock Units, such amounts as are
required to be withheld or deducted under the Code or any provision
of U.S. state or local Tax Law with respect to the making of such
payment. To the extent that amounts are so withheld or deducted and
paid over to the applicable Governmental Entity, such withheld or
deducted amounts shall be treated for all purposes of this
Agreement as having been paid to the person in respect of which
such deduction and withholding were made.
(d) No Further Ownership Rights
in Company Common Stock; Closing of Transfer Books . All shares
of Parent Common Stock issued upon the surrender for exchange of
Shares in accordance with the terms of this Article II and any cash
paid pursuant to Section 2.1(d) or Section 2.2(c) shall be deemed
to have been issued (or paid) in full satisfaction of all rights
pertaining to the Shares previously represented by such Shares.
After 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 which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Shares are presented
to the Surviving Corporation or the Exchange Agent for any reason,
they shall be cancelled and exchanged as provided in this Article
II.
(e) Termination of Exchange
Fund . Any portion of the Exchange Fund (including the proceeds
of any investments thereof) that remains undistributed to the
former holders of Shares for one year after the Effective Time
shall be delivered to the Surviving Corporation upon demand, and
any holders of Shares who have not theretofore complied with this
Article II shall thereafter look only to Parent for payment of
their claim for the Merger Consideration, any cash in lieu of
fractional shares of Parent Common Stock pursuant to Section 2.1(d)
and any dividends or distributions pursuant to Section 2.2(c),
subject to applicable abandoned property, escheat or similar Law.
If any certificate representing any Share shall not
-6-
have been surrendered prior to five years
after the Effective Time (or immediately prior to such earlier date
on which any shares of Parent Common Stock or any dividends or
other distributions payable to the holder of such certificate
representing any Share would otherwise escheat to or become the
property of any Governmental Entity), any such shares of Parent
Common Stock, dividends or other distributions in respect of such
certificate representing any Share shall, to the extent permitted
by applicable Law, become the property of Parent, free and clear of
all claims or interest of any person previously entitled
thereto.
(f) No Liability .
Notwithstanding anything in this Agreement to the contrary, none of
the Company, Parent, Merger Sub, the Surviving Corporation, the
Exchange Agent or any other person shall be liable to any former
holder of Shares for any amount properly delivered to a public
official pursuant to any applicable abandoned property, escheat or
similar Law.
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
Except as disclosed in the Company
SEC Documents filed or furnished with the SEC since January 1, 2007
but prior to the date hereof (but excluding any risk factor
disclosures contained under the heading “Risk Factors,”
any disclosure of risks included in any “forward-looking
statements” disclaimer or any other statements that are
similarly predictive or forward-looking in nature, other than, in
the case of any such disclosures or other statements, any factual
or historical information contained therein) or in the disclosure
schedule delivered by the Company to Parent immediately prior to
the execution of this Agreement (the “ Company Disclosure
Schedule ”), the Company represents and warrants to
Parent and Merger Sub as follows:
Section 3.1 Qualification;
Organization, Subsidiaries, etc .
(a) Each of the Company and its
Subsidiaries is a legal entity duly organized, validly existing and
in good standing under the Laws of its respective jurisdiction of
organization and has all requisite corporate or similar power and
authority to own, lease and operate its properties and assets and
to carry on its business as presently conducted and is qualified to
do business and is in good standing as a foreign legal entity in
each jurisdiction where the ownership, leasing or operation of its
assets or properties or conduct of its business requires such
qualification, except where the failure to be so organized, validly
existing, qualified or in good standing, or to have such power or
authority, is not having or would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse
Effect. As used in this Agreement, a “ Company Material
Adverse Effect ” means an event, change, effect,
development, state of facts, condition, circumstance or occurrence
that is materially adverse to the business, financial condition or
continuing results of operations of the Company and its
Subsidiaries, taken as a whole, but shall not be deemed to include
any event, change, effect, development, state of facts, condition,
circumstance or occurrence: (i) in or affecting economic conditions
generally (including changes in interest rates) or the financial,
mortgage or securities markets in the United States or elsewhere in
the world, (ii) in or affecting the industries in which the Company
or its Subsidiaries operate generally or in any specific
jurisdiction or geographical area or (iii) resulting from or
arising out of (A) the announcement or the existence of, or
compliance with, or
-7-
taking any action required or permitted
by this Agreement or the transactions contemplated hereby, (B) any
taking of any action at the written request of Parent or Merger
Sub, (C) any litigation arising from allegations of a breach of
fiduciary duty or other violation of applicable Law relating to
this Agreement or the transactions contemplated hereby, (D) any
adoption, implementation, promulgation, repeal, modification,
reinterpretation or proposal of any rule, regulation, ordinance,
order, protocol or any other Law of or by any national, regional,
state or local Governmental Entity, (E) any changes in GAAP or
accounting standards or interpretations thereof, (F) any
weather-related or other force majeure event or outbreak or
escalation of hostilities or acts of war or terrorism, except to
the extent that the Company and its Subsidiaries are adversely
affected in a disproportionate manner relative to other
participants in the industries in which the Company or its
Subsidiaries operate, or (G) any changes in the share price or
trading volume of the Shares, in the Company’s credit rating
or in any analyst’s recommendations, or the failure of the
Company to meet projections or forecasts (including any
analyst’s projections) (provided that the event, change,
effect, development, condition or occurrence underlying such change
shall not be excluded to the extent such event, change, effect,
development, condition or occurrence would otherwise constitute a
Company Material Adverse Effect).
(b) The Company has made available
to Parent prior to the date of this Agreement a true and complete
copy of the Company’s amended and restated articles of
incorporation and by-laws, each as amended through the date hereof
(collectively, the “ Company Organizational
Documents
”).
Section 3.2 Capital Stock .
(a) The authorized capital stock
of the Company consists of 300,000,000 shares of Company Common
Stock and 5,000,000 shares of preferred stock (“ Company
Preferred Stock ”). As of the close of business on April
2, 2009 (the “ Company Capitalization Date ”),
(i) 127,760,487 shares of Company Common Stock were issued and
outstanding (including 831,146 Restricted Shares), (ii) 3,323,454
shares of Company Common Stock were held in treasury, (iii)
5,949,993 shares of Company Common Stock were issuable pursuant to
the Company Stock Plans in respect of Company Stock Options, (iv)
355,163 shares of Company Common Stock were issuable pursuant to
the Company Stock Plans in respect of Restricted Stock Units, (v)
no shares of Company Preferred Stock were issued or outstanding and
(vi) 250,000 shares of Company Preferred Stock were reserved and
available for issuance pursuant to the Company Rights Agreement.
All outstanding shares of Company Common Stock are, and all shares
of Company Common Stock reserved for issuance as noted in clauses
(iii) and (iv), when issued in accordance with the respective terms
thereof, will be duly authorized, validly issued, fully paid and
nonassessable and free of pre-emptive rights.
(b) From the close of business on
the Company Capitalization Date through the date of this Agreement,
there have been no issuances of shares of the capital stock or
equity securities of the Company or any other securities of the
Company other than issuances of shares of Company Common Stock
pursuant to the exercise of Company Stock Options or the settlement
of Restricted Stock Units outstanding as of the Company
Capitalization Date under the Company Stock Plans. Except as set
forth in Section 3.2(a), as of the date hereof, there are no
outstanding subscriptions, options, warrants, calls, convertible
securities or other similar
-8-
rights, agreements or commitments
relating to the issuance of capital stock to which the Company or
any of its Subsidiaries is a party obligating the Company or any of
its Subsidiaries to (i) issue, transfer or sell any shares of
capital stock or other equity interests of the Company or any
Subsidiary of the Company or securities convertible into or
exchangeable or exercisable for such shares or equity interests,
(ii) grant, extend or enter into any such subscription, option,
warrant, call, convertible securities or other similar right,
agreement or commitment, (iii) redeem or otherwise acquire any such
shares of capital stock or other equity interests or (iv) provide a
material amount of funds to, or make any material investment (in
the form of a loan, capital contribution or otherwise) in, any
Subsidiary.
(c) Except for awards to acquire
shares of Company Common Stock under the Company Stock Plans,
neither the Company nor any of its Subsidiaries has outstanding
bonds, debentures, notes or other obligations, the holders of which
have the right to vote (or which are convertible into or
exchangeable or exercisable for securities having the right to
vote) with the stockholders of the Company on any matter.
(d) There are no outstanding
obligations of the Company or any of its Subsidiaries restricting
the transfer of, containing any right of first refusal or granting
any antidilution rights with respect to, any shares of capital
stock or other ownership interests of the Company or any of its
Subsidiaries. There are no voting trusts or other agreements or
understandings to which the Company or any of its Subsidiaries is a
party with respect to the voting of the capital stock or other
equity interest of the Company or any of its Subsidiaries. No
Subsidiary of the Company owns any shares of capital stock of the
Company.
Section 3.3 Corporate Authority
Relative to This Agreement; No Violation .
(a) The Company has the requisite
corporate power and authority to enter into this Agreement and,
subject to receipt of the Company Stockholder Approval, to
consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the
Company Board, and the Company Board has (i) determined that it is
in the best interests of the Company and its stockholders, and
declared it advisable, to enter into this Agreement and (ii)
adopted this Agreement and approved the consummation of the
transactions contemplated hereby, including the Merger, upon the
terms and subject to the conditions set forth herein. Except for
the Company Stockholder Approval, no other corporate proceedings on
the part of the Company are necessary to authorize the consummation
of the transactions contemplated hereby. As of the date hereof, the
Company Board has resolved to recommend that the Company’s
stockholders approve this Agreement and the transactions
contemplated hereby (the “ Company Recommendation
”) and directed that this Agreement be submitted to the
holders of Company Common Stock for approval. This Agreement has
been duly and validly executed and delivered by the Company and,
assuming this Agreement constitutes the legal, valid and binding
agreement of Parent and Merger Sub, constitutes the legal, valid
and binding agreement of the Company, enforceable against the
Company in accordance with its terms.
(b) Other than in connection with
or in compliance with (i) the NRS, (ii) the Securities Exchange Act
of 1934 (the “ Exchange Act ”), (iii) the
Securities Act of 1933 (the “ Securities Act ”),
(iv) the rules and regulations of the New York Stock Exchange (the
“ NYSE ”)
-9-
and (v) the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (the “ HSR Act ”) and,
subject to the accuracy of the representations and warranties of
Parent and Merger Sub in Section 4.21, no authorization, consent or
approval of, or filing with, any United States, state of the United
States or foreign governmental or regulatory agency, commission,
court, body, entity or authority (each, a “ Governmental
Entity ”) is necessary, under applicable Law, for the
consummation by the Company of the transactions contemplated by
this Agreement, except for such authorizations, consents, approvals
or filings that, if not obtained or made, would not reasonably be
expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
(c) The execution and delivery by
the Company of this Agreement do not, and, except as described in
Section 3.3(b), the consummation of the transactions contemplated
hereby and compliance with the provisions hereof will not (i)
result in any violation of, or result in a default (with or without
notice or lapse of time, or both) under, or require any consent or
approval under, or give rise to a right of termination,
cancellation, acceleration or amendment of any material obligation
under, or give rise to (except with respect to any Company Benefit
Plans or other compensatory programs or arrangements) any vesting,
guaranteed payment or loss of a material benefit under, any loan,
guarantee of indebtedness or credit agreement, note, bond,
mortgage, indenture, lease, agreement, contract, instrument,
permit, concession, franchise, right or license (each, a “
Contract ”) binding upon or inuring to the benefit of
the Company or any of its Subsidiaries or result in the creation of
any liens, claims, mortgages, encumbrances, pledges, security
interests, equities or charges of any kind (each, a “
Lien ”), other than any such Lien (A) for Taxes or
governmental assessments, charges or claims of payment not yet due,
being contested in good faith or for which adequate accruals or
reserves have been established, (B) which is a carriers’,
warehousemen’s, mechanics’, materialmen’s,
repairmen’s or other similar lien arising in the ordinary
course of business or (C) which would not reasonably be expected to
materially impair the continued use of a Company Owned Real
Property or a Company Leased Real Property as currently operated,
upon any of the properties or assets of the Company or any of its
Subsidiaries, (ii) conflict with or result in any violation of any
provision of the articles of incorporation or by-laws or other
equivalent organizational document, in each case as amended, of the
Company or any of its Subsidiaries or (iii) conflict with or
violate any applicable Laws, other than, in the case of clauses (i)
and (iii), any such consent, approval, violation, conflict,
default, termination, cancellation, acceleration, amendment, right,
loss or Lien that would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse
Effect.
Section 3.4 Reports and Financial
Statements .
(a) From December 31, 2007 through
the date of this Agreement, the Company has filed or furnished all
forms, documents and reports required to be filed or furnished by
it with the Securities and Exchange Commission (the “
SEC ”) (the “ Company SEC Documents
”). None of the
Company’s Subsidiaries is required to make any filings with
the SEC. As of their respective dates or, if amended prior to the
date hereof, as of the date of the last such amendment, the Company
SEC Documents complied in all material respects with the
requirements of the Securities Act and the Exchange Act, as the
case may be, and the applicable rules and regulations promulgated
thereunder, and none of the Company SEC Documents contained any
untrue statement of a material fact or omitted to state any
material fact required to
-10-
be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading.
(b) The consolidated financial
statements (including all related notes and schedules) of the
Company included in the Company SEC Documents (i) have been
prepared from, and are based upon the books and records of the
Company and its consolidated subsidiaries and (ii) fairly present
in all material respects the consolidated financial position of the
Company and its consolidated subsidiaries, as at the respective
dates thereof, and the consolidated results of their operations and
their consolidated cash flows for the respective periods then ended
(subject, in the case of the unaudited statements, to normal
year-end audit adjustments and to any other adjustments described
therein, including the notes thereto) in conformity with United
States generally accepted accounting principles (“
GAAP ”) (except, in the case of the unaudited
statements, as permitted by the SEC) applied on a consistent basis
during the periods involved (except as may be indicated therein or
in the notes thereto).
(c) To the knowledge of the
Company, as of the date of this Agreement, there are no SEC
inquiries or investigations, other governmental inquiries or
investigations or internal investigations pending or threatened, in
each case regarding any accounting practices of the Company.
Section 3.5 Internal
Controls and
Procedures .
The Company has established and maintains 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) as required by Rule 13a-15 under the
Exchange Act. The Company’s disclosure controls and
procedures are reasonably designed to ensure that all material
information required to be disclosed by the Company in the reports
that it files or furnishes 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
material information is accumulated and communicated to the
Company’s management as appropriate to allow timely decisions
regarding required disclosure and to make the certifications
required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act
of 2002 (the “ Sarbanes-Oxley Act ”). The
Company’s management has completed an assessment of the
effectiveness of the Company’s disclosure controls and
procedures in accordance with Rule 13a-15 and, to the extent
required by applicable Law, presented in any applicable Company SEC
Document that is a report on Form 10-K or Form 10-Q its conclusions
about the effectiveness of the disclosure controls and procedures
as of the end of the period covered by such report based on such
evaluation. Based on the Company’s management’s most
recently completed evaluation of the Company’s internal
control over financial reporting prior to the date of this
Agreement, (i) to the knowledge of the Company, the Company had no
significant deficiencies or material weaknesses in the design or
operation of its internal control over financial reporting that
would reasonably be expected to adversely affect the
Company’s ability to record, process, summarize and report
financial information and (ii) the Company does not have knowledge
of any fraud, whether or not material, that involves management or
other employees who have a significant role in the Company’s
internal control over financial reporting.
Section 3.6 No
Undisclosed
Liabilities .
Except (a) as reflected or reserved against in the Company’s
consolidated balance sheets (or the notes thereto) included in
the
-11-
Company SEC Documents filed with the SEC prior to the date
hereof, (b) as permitted or contemplated by this Agreement, (c) for
liabilities and obligations incurred in the ordinary course of
business since December 31, 2008 and (d) for liabilities or
obligations which have been discharged or paid in full in the
ordinary course of business, as of the date hereof, neither the
Company nor any Subsidiary of the Company has any liabilities or
obligations of any nature, whether or not accrued, contingent or
otherwise, that would be required by GAAP to be reflected on a
consolidated balance sheet of the Company and its consolidated
Subsidiaries (or in the notes thereto), other than those which are
not having or would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse
Effect.
Section 3.7 Compliance with Law;
Permits .
(a) The Company and each of its
Subsidiaries are in compliance with and are not in default under or
in violation of any applicable federal, state, local or foreign
law, statute, ordinance, rule, regulation, judgment, order,
injunction, decree or agency requirement of any Governmental Entity
(collectively, “ Laws ” and each, a “
Law ”), except where such non-compliance, default or
violation is not having or would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse
Effect.
(b) The Company and its
Subsidiaries are in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances,
exceptions, consents, certificates, approvals and orders of any
Governmental Entity necessary for the Company and its Subsidiaries
to own, lease and operate their properties and assets or to carry
on their businesses as they are now being conducted (the “
Company Permits ”), except for any of the foregoing
franchises, grants, authorizations, licenses, permits, easements,
variances, exceptions, consents, certificates, approvals and orders
related to the residential construction activities of the Company
and its Subsidiaries that the Company or such Subsidiaries have
applied for or are endeavoring to obtain in the ordinary course of
business and except where the failure to have any of the Company
Permits is not having or would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse
Effect. All Company Permits are in full force and effect, except
where the failure to be in full force and effect is not having or
would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.
(c) Notwithstanding anything
contained in this Section 3.7, no representation or warranty shall
be deemed to be made in this Section 3.7 in respect of the matters
referenced in Section 3.4 or 3.5, or in respect of environmental,
Tax, employee benefits or labor Law matters.
Section 3.8 Environmental Laws and
Regulations .
(a) Except as is not having or
would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect: (i) since January 1,
2006, no notice, notification, demand, request for information,
citation, summons, complaint or order has been received, no penalty
has been assessed, no action, claim, suit or proceeding is pending,
and, to the knowledge of the Company, no action, claim, suit or
proceeding is threatened nor is any investigation or review pending
or threatened, in each case, by any Governmental Entity or other
person relating to the Company or any of its Subsidiaries and
relating to or arising out of
-12-
any Environmental Law; (ii) the Company
and its Subsidiaries are in compliance with all Environmental Laws
with respect to their properties and operations, and are in
compliance with all permits required under Environmental Laws for
the conduct of their respective businesses (“
Environmental Permits ”); (iii) neither the Company
nor any of its Subsidiaries is obligated to conduct or pay for, and
is not conducting or paying for, any response or corrective action
under any Environmental Law at any location; and (iv) neither the
Company nor any of its Subsidiaries is party to any order, judgment
or decree that imposes any obligations under any Environmental
Law.
(b) For purposes of this Agreement:
(i) “
Environment ” means any ambient air, surface water,
drinking water, groundwater, land surface (whether below or above
water), wetlands, subsurface strata, sediment, plant or animal life
and natural resources.
(ii) “ Environmental Law
” means any Law, any common law theory of liability or any
binding agreement issued or entered by or with any Governmental
Entity relating to: (A) the Environment, including pollution,
contamination, cleanup, preservation, protection, mitigation and
reclamation of the Environment; (B) any discharge, emission,
release or threatened release of any Hazardous Materials, including
investigation, assessment, testing, monitoring, mitigation,
containment, removal, remediation and cleanup of any such emission,
discharge, release or threatened release or the protection of human
health from exposure to Hazardous Materials; (C) the management of
any Hazardous Materials, including the use, labeling, processing,
disposal, storage, treatment, transport or recycling of any
Hazardous Materials; or (D) the presence of Hazardous Materials in
any building, physical structure, product or fixture.
(iii) “
Hazardous Materials ” means any pollutant or
contaminant (including any constituent, raw material, product or
by-product thereof), petroleum, asbestos or asbestos-containing
material, polychlorinated biphenyls, lead paint, any hazardous,
industrial or solid waste, any toxic, radioactive, infectious or
hazardous substance, material or agent, or any other substance or
waste regulated under or for which liability or standards of care
are imposed by any Environmental Law.
Section 3.9 Employee Benefit Plans .
(a) Section 3.9(a) of the Company
Disclosure Schedule lists all material Company Benefit Plans. For
purposes of this Agreement, “ Company Benefit Plans
” means all compensation or employee benefit plans, programs,
policies, agreements or other arrangements, whether or not
“employee benefit plans” (within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974
(“ ERISA ”), whether or not subject to ERISA),
providing cash- or equity-based incentives, including bonus,
profit-sharing, deferred compensation, incentive compensation,
stock ownership, stock purchase, stock options, phantom stock,
restricted stock, restricted stock units, performance stock,
performance stock units, stock appreciation rights, health,
medical, dental, vision, disability, accident or life insurance
benefits or vacation, sick leave, holiday pay, fringe benefit,
severance, retirement, pension or savings benefits, that are
sponsored, maintained or contributed to by the Company or any of
its
-13-
Subsidiaries for the benefit of current
or former employees or directors of the Company or its Subsidiaries
and all employee agreements providing compensation, vacation,
holiday pay, severance or other benefits to any current or former
officer or employee of the Company or its Subsidiaries.
(b) Each Company Benefit Plan has
been maintained and administered in compliance with its terms and
with applicable Law, including ERISA and the Code to the extent
applicable thereto, except for such non-compliance which is not
having or would not reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse Effect. Any Company
Benefit Plan intended to be qualified under Section 401(a) or
401(k) of the Code has received a determination letter from the
Internal Revenue Service (the “ IRS ”) and, to
the knowledge of the Company, after consultation with employees of
the Company who are responsible for the day-to-day administration
of such Company Benefit Plans, (i) there are no circumstances
likely to result in the revocation of any such favorable
determination letter and (ii) there are no circumstances indicating
that any such plan is not so qualified in operation. To the
knowledge of the Company, no prohibited transaction described in
Section 406 of ERISA or Section 4975 of the Code has occurred,
except as is not having or would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse
Effect. Neither the Company nor any of its Subsidiaries maintains
or contributes to any plan or arrangement which provides retiree
medical or welfare benefits nor has any liability or obligation to
provide such benefits, except as required by applicable Law. There
is no pending, or to the knowledge of the Company, threatened
litigation or claims (other than routine claims for benefits)
relating to the Company Benefit Plans which are having or would
reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect.
(c) None of the Company, any of
its Subsidiaries or any other person or entity that together with
any other person or entity is treated as a single employer under
Section 414 of the Code or Section 4001 of ERISA (each, an “
ERISA Affiliate ”) contributes to or maintains an
“employee benefit plan” (within the meaning of Section
3(3) of ERISA) (an “ ERISA Plan ”) subject to
Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code
or have contributed to or maintained any such plan at any time
during the past six years and no liability has been or is expected
to be incurred by the Company or any of its Subsidiaries with
respect to any such plan. None of the Company, any of its
Subsidiaries or any ERISA Affiliate of the Company or its
Subsidiaries has contributed, or been obligated to contribute, to
any “multiemployer plan” (within the meaning of Section
3(37) of ERISA) at any time during the past six years and no
liability has been or is expected to be incurred by the Company or
any Subsidiary with respect to any such plan.
(d) The consummation of the
transactions contemplated by this Agreement will not, either alone
or in combination with another event, (i) entitle any current or
former employee, consultant or officer of the Company or any of its
Subsidiaries to severance pay, unemployment compensation or any
other payment, except as expressly provided in this Agreement or as
required by applicable Law or (ii) accelerate the time of payment
or vesting, or increase the amount of compensation due any such
employee, consultant or officer, except as expressly provided in
this Agreement.
-14-
Section 3.10
Absence of Certain Changes or Events .
(a) From December 31, 2008 through
the date of this Agreement, (i) the businesses of the Company and
its Subsidiaries have been conducted, in all material respects, in
the ordinary course of business, and (ii) there has not been any
event, change, effect, development, state of facts, condition,
circumstance or occurrence that has had, individually or in the
aggregate, a Company Material Adverse Effect.
(b) Since the date of this
Agreement, there has not been any event, change, effect,
development, state of facts, condition, circumstance or occurrence
that is having or would reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse
Effect.
Section 3.11
Investigations; Litigation . (a) There is no investigation or
review pending (or, to the knowledge of the Company, threatened) by
any Governmental Entity with respect to the Company or any of its
Subsidiaries, and (b) there are no actions, suits, inquiries,
investigations or proceedings pending (or, to the knowledge of the
Company, threatened) against or affecting the Company or any of its
Subsidiaries, or any of their respective properties at law or in
equity before, and there are no orders, judgments or decrees of, or
before, any Governmental Entity which, in the case of clause (a) or
(b), are having or would reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse
Effect.
Section 3.12 Information
Supplied
. None of the
information provided by the Company for inclusion or incorporation
by reference in (a) the registration statement on Form S-4 to be
filed with the SEC by Parent in connection with the issuance of
Parent Common Stock in the Merger (including any amendments or
supplements, the “ Form S-4 ”) will, at the time
the Form S-4 becomes effective under the Securities Act, contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make
the statements therein not misleading or (b) the proxy
statement/prospectus relating to the Company Stockholders’
Meeting and the proxy statement relating to the Parent
Stockholders’ Meeting (such proxy statements together, in
each case as amended or supplemented from time to time, the “
Joint Proxy Statement ”) will, at the date it is first
mailed to the Company’s stockholders and Parent’s
stockholders or at the time of the Company Stockholders’
Meeting or the Parent 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 were made, not misleading. The Joint Proxy Statement (other
than the portion thereof relating solely to the Parent
Stockholders’ Meeting) and the Form S-4 (solely with respect
to the portion thereof relating to the Company Stockholders’
Meeting) will comply as to form in all material respects with the
requirements of the Securities Act and the Exchange Act.
Notwithstanding the foregoing provisions of this Section 3.12, no
representation or warranty is made by the Company with respect to
information or statements made or incorporated by reference in the
Form S-4 or the Joint Proxy Statement which were not supplied by or
on behalf of the Company.
-15-
Section 3.13
Tax Matters .
(a) Except as would not reasonably
be expected to have, individually or in the aggregate, a Company
Material Adverse Effect, (i) other than with respect to matters
contested in good faith or for which adequate reserves have been
established in accordance with GAAP (A) the Company and each of its
Subsidiaries have prepared and timely filed (taking into account
any extension of time within which to file) all Tax Returns
required to be filed by any of them and all such filed Tax Returns
are complete and accurate, and (B) the Company and each of its
Subsidiaries have paid all Taxes that are required to be paid by
any of them, (ii) all deficiencies asserted or assessed by a taxing
authority against the Company or any of its Subsidiaries have been
paid in full or are adequately reserved, in accordance with GAAP,
(iii) as of the date of this Agreement, there are not pending or,
to the knowledge of the Company, threatened in writing any audits,
examinations, investigations or other proceedings in respect of
income or franchise Taxes and there are no currently effective
waivers (or requests for waivers) of the time to assess any Taxes,
(iv) there are no Liens for income or franchise Taxes on any of the
assets of the Company or any of its Subsidiaries other than Company
Permitted Liens, (v) the Company has not been a “controlled
corporation” or a “distributing corporation” in
any distribution occurring during the three-year period ending on
the date hereof (or otherwise as part of a “plan (or series
of related transactions)” within the meaning of Section
355(e) of the Code of which the Merger is also a part) that was
purported or intended to be governed by Section 355 of the Code,
(vi) neither the Company nor any of its Subsidiaries (A) is a party
to or is bound by any Tax sharing, allocation or indemnification
agreement with persons other than wholly owned Subsidiaries of the
Company or (B) has any liability for Taxes of any other person
(other than the Company and its Subsidiaries) pursuant to Treasury
Regulation Section 1.1502 -6 (or any similar provision of state,
local or foreign Law), as a transferee or successor, by contract or
otherwise, (vii) as of the date hereof, neither the Company nor any
of its Subsidiaries is required to include in income any adjustment
pursuant to Section 481(a) of the Code, no such adjustment has been
proposed by the IRS and no pending request for permission to change
any accounting method has been submitted by the Company or any of
its Subsidiaries, (viii) neither the Company nor any of its
Subsidiaries has participated in any “listed
transaction” within the meaning of Treasury Regulation
Section 1.6011 -4(b)(2) and (ix) to the knowledge of the Company,
as of the date hereof and without regard to this Agreement, the
Company has not undergone an “ownership change” within
the meaning of Section 382 of the Code.
(b) As used in this Agreement,
“ Taxes ” means any and all domestic or foreign,
federal, state, local or other taxes of any kind (together with any
and all interest, penalties, additions to tax and additional
amounts imposed with respect thereto) imposed by any Governmental
Entity, including taxes on or with respect to income, franchises,
windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, unemployment, social security,
workers’ compensation, margin or net worth, and taxes in the
nature of excise, withholding, ad valorem or value added.
(c) As used in this Agreement,
“ Tax Return ” means any return, report or
similar document (including any attached schedules) filed or
required to be filed with respect to Taxes, including any
information return, claim for refund, amended return or declaration
of estimated Taxes.
-16-
Section
3.14 Employment and Labor Matters
. Except for such matters
which are not having or would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse
Effect, (a) (i) there are no strikes or lockouts with respect to
any employees of the Company or any of its Subsidiaries (“
Company Employees ”), (ii) the Company and its
Subsidiaries are not parties to any collective bargaining agreement
and, to the knowledge of the Company, there is no union organizing
effort pending or threatened against the Company or any of its
Subsidiaries, (iii) there is no labor dispute (other than routine
individual grievances) or labor arbitration proceeding pending or,
to the knowledge of the Company, threatened against the Company or
any of its Subsidiaries, (iv) there is no slowdown or work stoppage
in effect or, to the knowledge of the Company, threatened with
respect to Company Employees, and (v) to the knowledge of the
Company, there is no charge, complaint, or investigation pending or
threatened by any Governmental Entity against the Company or any of
its Subsidiaries concerning any alleged violation of any applicable
Law respecting employment or employment practices, workplace health
and safety, terms and conditions of employment, wages and hours, or
unfair labor practices, and (b) the Company and its Subsidiaries
are in compliance with all applicable Laws respecting (i)
employment and employment practices, (ii) workplace health and
safety, (iii) terms and conditions of employment and wages and
hours, and (iv) unfair labor practices. Neither the Company nor any
of its Subsidiaries has any liabilities or is in breach of any
obligations under the Worker Adjustment and Retraining Notification
Act of 1988 (the “ WARN Act ”) or any similar
state or local Law as a result of any action taken by the Company
(other than at the written direction of Parent) that would
reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect. It is agreed and understood that
no representation or warranty is made by the Company in respect of
labor matters in any section of this Agreement other than this
Section 3.14.
Section 3.15 Intellectual
Property
. Except as is not
having or would not reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse Effect, either the
Company or a Subsidiary of the Company owns, or is licensed or
otherwise possesses legally enforceable rights to use, all material
trademarks, trade names, service marks, service names, mark
registrations, logos, assumed names, registered and unregistered
copyrights, patents or applications and registrations used in their
respective businesses as currently conducted (collectively, the
“ Intellectual Property ”). Except as is not
having or would not reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse Effect, (a) there are
no pending or, to the knowledge of the Company, threatened claims
by any person alleging infringement by the Company or any of its
Subsidiaries for their use of the Intellectual Property of the
Company or any of its Subsidiaries, (b) to the knowledge of the
Company, the conduct of the business of the Company and its
Subsidiaries does not infringe any intellectual property rights of
any person, (c) neither the Company nor any of its Subsidiaries has
any claim pending of a violation or infringement by others of its
rights to or in connection with the Intellectual Property of the
Company or any of its Subsidiaries and (d) to the knowledge of the
Company, no person is infringing any Intellectual Property of the
Company or any of its Subsidiaries.
Section 3.16 Real Property .
(a) With respect to the real
property owned by the Company or any Subsidiary (such property
collectively, the “ Company Owned Real Property
”), except as is not
-17-
having or would not reasonably be
expected to have, individually or in the aggregate, a Company
Material Adverse Effect, (i) either the Company or a Subsidiary of
the Company has good and valid title to such Company Owned Real
Property, free and clear of all Liens other than any such Lien (A)
for Taxes or governmental assessments, charges or claims of payment
not yet due, being contested in good faith or for which adequate
accruals or reserves have been established, (B) which is a
carriers’, warehousemen’s, mechanics’,
materialmen’s, repairmen’s, or other similar lien
arising in the ordinary course of business, (C) which is disclosed
on the most recent consolidated balance sheet of the Company or
notes thereto included in the Company SEC Documents filed prior to
the date hereof or securing liabilities reflected on such balance
sheet, (D) which was incurred in the ordinary course of business
since the date of such recent consolidated balance sheet of the
Company or (E) which would not reasonably be expected to materially
impair the continued use of a Company Owned Real Property or a
Company Leased Real Property as currently operated (each of the
foregoing, a “ Company Permitted Lien ”) (and
conditions, covenants, encroachments, easements, restrictions and
other encumbrances that do not materially adversely affect the use
of the Company Owned Real Property by the Company for residential
home building), (ii) there are no reversion rights, outstanding
options or rights of first refusal in favor of any other party to
purchase, lease, occupy or otherwise utilize such Company Owned
Real Property or any portion thereof or interest therein that would
reasonably be expected to materially adversely affect the use by
the Company for residential home building of the Company Owned Real
Property affected thereby and (iii) neither the Company nor its
Subsidiaries have collaterally assigned or granted a security
interest in the Company Owned Real Property except for Company
Permitted Liens. Neither the Company nor any of its Subsidiaries
has received notice of any pending, and to the knowledge of the
Company there is no pending or threatened condemnation or eminent
domain proceeding with respect to any Company Owned Real Property,
except proceedings which are not having or would not reasonably be
expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
(b) Except as is not having or
would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, (i) each material
lease, sublease, license, easement and other agreement under which
the Company or any of its Subsidiaries uses or occupies or has the
right to use or occupy any material real property at which the
material operations of the Company and its Subsidiaries are
conducted (the “ Company Leased Real Property
”), is valid, binding and in full force and effect and (ii)
no uncured default of a material nature on the part of the Company
or, if applicable, its Subsidiary or, to the knowledge of the
Company, the landlord or other parties to such lease or other
agreement thereunder exists with respect to any Company Leased Real
Property. Except as is not having or would not reasonably be
expected to have, individually or in the aggregate, a Company
Material Adverse Effect, the Company and each of its Subsidiaries
has a good and valid leasehold interest, subject to the terms of
any lease, sublease or other agreement applicable thereto, in each
parcel of Company Leased Real Property, free and clear of all
Liens, except for Company Permitted Liens (and conditions,
covenants, encroachments, easements, restrictions and other
encumbrances that do not adversely affect the use of the Company
Leased Real Property by the Company for residential home building).
Except as is not having or would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse
Effect, neither the Company nor any of its Subsidiaries has (x)
received notice of any pending, and, to the knowledge of the
Company, there is no threatened, condemnation proceeding with
respect to any Company Leased Real Property, (y) collaterally
assigned or granted a security interest in the
-18-
Company Leased Real Property except for
Company Permitted Liens, or (z) received any written notice of any
default under lease or other agreement for a Company Leased Real
Property and, to the knowledge of Company, no event has occurred
and no condition exists that, with notice or lapse of time, or
both, would constitute a default by Company or any of its
Subsidiaries, as applicable, under any such leases and
agreements.
(c) Except as is not having or
would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, no judgment,
injunction, order, decree, statute, ordinance, rule, regulation,
moratorium, or other action by or before a Governmental Entity
exists or is pending or threatened that restricts the development
or sale of Company Owned Real Property currently under development
or all or a portion of which is being held for sale by the Company
or any of its Subsidiaries.
(d) No developer-related charges
or assessments imposed by any Governmental Entity (or any other
person) for public improvements (or otherwise) against any Company
Owned Real Property held for development, are unpaid (other than
those reflected on the most recent financial statements of the
Company, and those incurred since the date of such financial
statements of the Company to the extent in the ordinary course of
the Company’s business and consistent with past practices),
except for such charges and assessments as, in the aggregate, are
not having or would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse
Effect.
Section 3.17 Required
Vote of the Company
Stockholders .
Subject to the accuracy of the representations and warranties of
Parent and Merger Sub in Section 4.21, the affirmative vote of a
majority of the outstanding Company Common Stock entitled to vote
on this Agreement and the Merger is the only vote of holders of
securities of the Company which is required to approve this
Agreement and the Merger (the “ Company Stockholder
Approval ”).
Section 3.18 Opinion
of Financial
Advisors . The
Company Board has received the opinion of Goldman, Sachs & Co.
dated the date of this Agreement, substantially to the effect that,
as of such date, the Exchange Ratio is fair to the holders of
Company Common Stock from a financial point of view.
Section 3.19 Material Contracts
.
(a) Section 3.19(a) of the Company
Disclosure Schedule contains a complete list as of the date hereof
of the following types of Contracts, whether written or oral, that
are intended by the Company or any of its Subsidiaries, as
applicable, to be legally binding, and to which the Company or any
of its Subsidiaries is a party (such Contracts, being the “
Company Material Contracts ”):
(i) each “material contract” (as such
term is defined in Item 610(b)(10) of Regulation S-K of the SEC)
with respect to the Company and its Subsidiaries (other than
compensatory contracts with, or which include as participants, any
current or former director or officer of the Company or any of its
Subsidiaries);
(ii) all contracts and agreements
evidencing indebtedness for borrowed money in excess of $50 million
in principal amount; and
-19-
(iii)
all non-competition agreements or any other agreements or
arrangements (A) that materially limit or otherwise materially
restrict the Company and its Subsidiaries from conducting a
material portion of the business of the Company and its
Subsidiaries, taken as a whole, or (B) that would, after the
Effective Time, materially limit or materially restrict Parent or
any of its Subsidiaries (other than the Surviving Corporation and
its Subsidiaries) from engaging or competing in any material line
of business or in any material geographic area, or that would
materially limit or materially restrict a material portion of the
business of Parent and its Subsidiaries, taken as a whole
(including for purposes of such determination, the Surviving
Corporation and its Subsidiaries), after giving effect to the
Merger.
(b) Neither the Company nor any
Subsidiary of the Company is in breach of or default under the
terms of any Company Material Contract where such breach or default
is having or would reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse Effect. To the
knowledge of the Company, no other party to any Company Material
Contract is in breach of or default under the terms of any Company
Material Contract where such breach or default is having or would
reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect. Except as is not having or would
not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, each Company Material
Contract is a legal, valid and binding obligation of the Company or
the Subsidiary of the Company which is party thereto and, to the
knowledge of the Company, of each other party thereto, and is in
full force and effect, except that (i) such enforcement may be
subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar Laws, now or hereafter in effect,
relating to creditors’ rights generally and (ii) equitable
remedies of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(c) The Company has made available
to Parent correct and complete copies in all material respects of
all Company Material Contracts, including any material amendments
or material waivers thereto.
Section 3.20 Finders
or Brokers
. Except for Goldman,
Sachs & Co., neither the Company nor any of its Subsidiaries
has employed any investment banker, broker or finder in connection
with the transactions contemplated by this Agreement who might be
entitled to any fee or any commission in connection with or upon
consummation of the Merger. The Company has made available to
Parent for informational purposes only a true and complete copy of
all agreements between the Company and Goldman, Sachs & Co.
pursuant to which such firm would be entitled to any payment
relating to the Merger.
Section 3.21 Insurance
. Section 3.21 of the
Company Disclosure Schedule sets forth (i) a true and complete list
of the material insurance policies covering the Company and its
Subsidiaries as of the date hereof and (ii) the last annual premium
paid by the Company for the Company’s directors’ and
officers’ insurance policy. Except as is not having or would
not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, (a) each insurance
policy under which the Company or any of its Subsidiaries is an
insured or otherwise the principal beneficiary of coverage
(collectively, the “ Company Insurance
-20-
Policies ”) is in full force
and effect, all premiums due thereon have been paid in full and the
Company and its Subsidiaries are in compliance with the terms and
conditions of such Company Insurance Policy, (b) neither the
Company nor any of its Subsidiaries is in breach or default under
any Company Insurance Policy and (c) no event has occurred which,
with notice or lapse of time, would constitute such breach or
default, or permit termination or modification, under the
policy.
Section 3.22 Tax
Treatment
. Neither the Company
nor any of its Subsidiaries has taken or agreed to take any action
or knows of any fact that would prevent or impede, or would be
reasonably likely to prevent or impede, the Merger from qualifying
as a “reorganization” within the meaning of Section
368(a) of the Code.
Section 3.23 Rights
Plan
. The Company has taken
all action necessary (a) to render the Rights Agreement, dated
February 24, 2009 (the “ Company Rights Agreement
”), between the Company and Mellon Investor Services LLC, as
Rights Agent, inapplicable to the Merger, this Agreement, the
Voting Agreements executed by stockholders of the Company and the
transactions contemplated hereby or thereby, including the Merger,
(b) to ensure that (i) neither Parent, Merger Sub nor any of their
Affiliates will become an “Acquiring Person” (as such
term is defined in the Company Rights Agreement) by reason of the
approval, execution, announcement or consummation of this Agreement
or the Voting Agreements executed by stockholders of the Company or
the transactions contemplated hereby or thereby, including the
Merger, and (ii) neither a “Shares Acquisition Date”
nor a “Distribution Date” (each as defined in the
Company Rights Agreement) shall occur, in each case, by reason of
the approval, execution, announcement or consummation of this
Agreement or the Voting Agreements executed by stockholders of the
Company or the transactions contemplated hereby or thereby,
including the Merger, and (c) to cause the Company Rights Agreement
to terminate at the Effective Time.
Section 3.24 Anti
-Takeover Laws. Assuming
the accuracy of Parent’s representations and warranties in
Section 4.21, the Company Board has taken all action necessary to
render the provisions of Sections 78.411 to 78.444, inclusive, of
the NRS inapplicable to this Agreement and the transactions
contemplated hereby. No other “moratorium,”
“control share,” “fair price,”
“business combination,” “supermajority,”
“affiliate transactions” or other anti-takeover Laws or
any similar provisions under the Company Organizational Documents
are applicable to this Agreement or the transactions contemplated
hereby.
Section 3.25 No
Additional
Representations . The Company acknowledges that
neither Parent nor Merger Sub makes any representation or warranty
as to any matter whatsoever except as expressly set forth in this
Agreement or in any certificate delivered by Parent or Merger Sub
to the Company in accordance with the terms hereof, and
specifically (but without limiting the generality of the foregoing)
that neither Parent nor Merger Sub makes any representation or
warranty with respect to (a) any projections, estimates or budgets
delivered or made available to the Company (or any of their
respective affiliates or Representatives) of future revenues,
results of operations (or any component thereof), cash flows or
financial condition (or any component thereof) of Parent and its
Subsidiaries or (b) the future business and operations of Parent
and its Subsidiaries.
-21-
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES OF PARENT AND MERGER SUB
Except as disclosed in the Parent
SEC Documents filed or furnished with the SEC since January 1, 2007
but prior to the date hereof (but excluding any risk factor
disclosures contained under the heading “Risk Factors,”
any disclosure of risks included in any “forward-looking
statements” disclaimer or any other statements that are
similarly predictive or forward-looking in nature, other than, in
the case of any such disclosures or other statements, any factual
or historical information contained therein) or in the disclosure
schedule delivered by Parent to the Company immediately prior to
the execution of this Agreement (the “ Parent Disclosure
Schedule ”), Parent and Merger Sub represent and warrant
to the Company as follows:
Section 4.1 Qualification;
Organization, Subsidiaries, etc .
(a) Each of Parent and Merger Sub
is a legal entity duly organized, validly existing and in good
standing under the Laws of its respective jurisdiction of
organization and has all requisite corporate or similar power and
authority to own, lease and operate its properties and assets and
to carry on its business as presently conducted and is qualified to
do business and is in good standing as a foreign legal entity in
each jurisdiction where the ownership, leasing or operation of its
assets or properties or conduct of its business requires such
qualification, except where the failure to be so organized, validly
existing, qualified or in good standing, or to have such power or
authority, is not having or would not reasonably be expected to
have, individually or in the aggregate, a Parent Material Adverse
Effect. As used in this Agreement, a “ Parent Material
Adverse Effect ” means an event, change, effect,
development, state of facts, condition, circumstance or occurrence
that is materially adverse to the business, financial condition or
continuing results of operations of Parent and its Subsidiaries,
taken as a whole, but shall not be deemed to include any event,
change, effect, development, state of facts, condition,
circumstance or occurrence: (i) in or affecting economic conditions
generally (including changes in interest rates) or the financial,
mortgage or securities markets in the United States or elsewhere in
the world, (ii) in or affecting the industries in which Parent or
its Subsidiaries operate generally or in any specific jurisdiction
or geographical area or (iii) resulting from or arising out of (A)
the announcement or the existence of, or compliance with, or taking
any action required or permitted by this Agreement or the
transactions contemplated hereby, (B) any taking of any action at
the written request of the Company, (C) any litigation arising from
allegations of a breach of fiduciary duty or other violation of
applicable Law relating to this Agreement or the transactions
contemplated hereby, (D) any adoption, implementation,
promulgation, repeal, modification, reinterpretation or proposal of
any rule, regulation, ordinance, order, protocol or any other Law
of or by any national, regional, state or local Governmental
Entity, (E) any changes in GAAP or accounting standards or
interpretations thereof, (F) any weather-related or other force
majeure event or outbreak or escalation of hostilities or acts of
war or terrorism, except to the extent that Parent and its
Subsidiaries are adversely affected in a disproportionate manner
relative to other participants in the industries in which Parent
and its Subsidiaries operate or (G) any changes in the share price
or trading volume of the Parent Common Stock, in Parent’s
credit rating or in any analyst’s recommendations, or the
failure of Parent to meet projections or forecasts (including any
analyst’s projections) (provided that the event, change,
effect, development, condition or occurrence underlying such change
shall not be excluded to the extent such event, change, effect,
-22-
development, condition or occurrence
would otherwise constitute a Parent Material Adverse Effect).
(b) Parent has made available to
the Company prior to the date of this Agreement a true and complete
copy of the articles of incorporation and by-laws of Parent and
Merger Sub, each as amended through the date hereof (collectively,
the “ Parent Organizational Documents ”).
Section 4.2 Capital Stock .
(a) The authorized capital stock
of Parent consists of 400,000,000 shares of Parent Common Stock and
25,000,000 shares of preferred stock par value $0.01 per share
(“ Parent Preferred Stock ”). As of the close of
business on April 3, 2009 (the “ Parent Capitalization
Date
”), (i) 258,563,448
shares of Parent Common Stock were issued and outstanding
(including 3,819,346 restricted share units (“ Parent
RSUs ”)), (ii) no shares of Parent Common Stock were held
in treasury, (iii) 19,890,366 shares of Parent Common Stock were
reserved for issuance in respect of outstanding Parent Stock
Options, (iv) no shares of Parent Preferred Stock were issued or
outstanding and (v) 400,000 shares of Parent Preferred Stock were
reserved and available for issuance pursuant to the Parent Rights
Agreement. All outstanding shares of Parent Common Stock are, and
all shares of Parent Common Stock reserved for issuance as noted in
clause (iii), when issued in accordance with the respective terms
thereof, will be duly authorized, validly issued, fully paid and
nonassessable and free of preemptive rights.
(b) From the close of business on
the Parent Capitalization Date through the date of this Agreement,
there have been no issuances of shares of the capital stock or
equity securities of Parent or any other securities of Parent other
than issuances of shares of Parent Common Stock pursuant to the
exercise of Parent Stock Options under the employee and director
stock plans of Parent. Except as set forth in Section 4.2(a), as of
the date hereof, there are no outstanding subscriptions, options,
warrants, calls, convertible securities or other similar rights,
agreements or commitments relating to the issuance of capital stock
to which Parent or any of its Subsidiaries is a party obligating
Parent or any of its Subsidiaries to (i) issue, transfer or sell
any shares of capital stock or other equity interests of Parent or
any Subsidiary of Parent or securities convertible into or
exchangeable or exercisable for such shares or equity interests,
(ii) grant, extend or enter into any such subscription, option,
warrant, call, convertible securities or other similar right,
agreement or commitment, (iii) redeem or otherwise acquire any such
shares of capital stock or other equity interests or (iv) provide a
material amount of funds to, or make any material investment (in
the form of a loan, capital contribution or otherwise) in, any
Subsidiary.
(c) Except for awards to acquire
shares of Parent Common Stock under the employee and director stock
plans of Parent, neither Parent nor any of its Subsidiaries has
outstanding bonds, debentures, notes or other obligations, the
holders of which have the right to vote (or which are convertible
or exchangeable into or exercisable for securities having the right
to vote) with the stockholders of Parent on any matter.
(d) There are no outstanding
obligations of Parent or any of its Subsidiaries restricting the
transfer of, containing any right of first refusal or granting any
antidilution rights
-23-
with respect to, any shares of capital
stock or other ownership interests of Parent or any of its
Subsidiaries. There are no voting trusts or other agreements or
understandings to which Parent or any of its Subsidiaries is a
party with respect to the voting of the capital stock or other
equity interest of Parent or any of its Subsidiaries.
(e) As of the date of this
Agreement, the authorized capital stock of Merger Sub consists of
1,000 shares of common stock, par value $0.01 per share, all of
which are validly issued and outstanding. All of the issued and
outstanding capital stock of Merger Sub is, and at the Effective
Time all of the issued and outstanding capital stock of the
Surviving Corporation will be, owned by Parent or a direct or
indirect wholly owned Subsidiary of Parent. Merger Sub has
outstanding no option, warrant, right or any other agreement
pursuant to which any person other than Parent may acquire any
equity security of Merger Sub. Merger Sub has not conducted any
business prior to the date hereof and has, and prior to the
Effective Time will have, no assets, liabilities or obligations of
any nature other than those incident to its formation and pursuant
to this Agreement and the Merger and the other transactions
contemplated by this Agreement.
Section 4.3 Corporate Authority
Relative to This Agreement; No Violation .
(a) Each of Parent and Merger Sub
has the requisite corporate power and authority to enter into this
Agreement and, subject to receipt of the Parent Stockholder
Approvals, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly
authorized by the Boards of Directors of Parent and Merger Sub and
by Parent, as the sole stockholder of Merger Sub, and, except for
the Parent Stockholder Approvals, no other corporate proceedings on
the part of Parent or Merger Sub are necessary to authorize the
consummation of the transactions contemplated hereby. As of the
date hereof, the Parent Board has resolved to recommend that
Parent’s stockholders (A) approve an amendment to
Parent’s Articles of Incorporation to increase the total
number of shares of authorized Parent Common Stock as set forth on
Section 4.3(a) of the Parent Disclosure Schedule (the “
Charter Amendment ”) and (B) approve the issuance of
shares of Parent Common Stock in connection with the Merger (the
“ Stock Issuance ”) (collectively, the “
Parent Recommendation ”), and has directed that the
Charter Amendment and Stock Issuance be submitted to the holders of
Parent Common Stock for approval. This Agreement has been duly and
validly executed and delivered by Parent and Merger Sub, and,
assuming this Agreement constitutes the legal, valid and binding
agreement of the Company, this Agreement constitutes the legal,
valid and binding agreement of each of Parent and Merger Sub,
enforceable against Parent and Merger Sub in accordance with its
terms.
(b) Other than in connection with
or in compliance with (i) the NRS, (ii) the Exchange Act, (iii) the
Securities Act, (iv) the rules and regulations of the NYSE and (v)
the HSR Act, no authorization, consent or approval of, or filing
with, any Governmental Entity is necessary, under applicable Law,
for the consummation by Parent or Merger Sub of the transactions
contemplated by this Agreement, except for such authorizations,
consents, approvals or filings that, if not obtained or made, would
not reasonably be expected to have, individually or in the
aggregate, a Parent Material Adverse Effect.
(c) The execution and delivery by
Parent and Merger Sub of this Agreement do not, and, except as
described in Section 4.3(b), the consummation of the
transactions
-24-
contemplated hereby and compliance with
the provisions hereof will not (i) result in any violation of, or
result in a default (with or without notice or lapse of time, or
both) under, or require any consent or approval under, or give rise
to a right of termination, cancellation, acceleration or amendment
of any material obligation under, or give rise to (except with
respect to any Parent Benefit Plans or other compensatory programs
or arrangements) any vesting, guaranteed payment or loss of a
material benefit under, any Contract binding upon or inuring to the
benefit of Parent or any of its Subsidiaries or result in the
creation of any Lien, other than any such Lien (A) for Taxes or
governmental assessments, charges or claims of payment not yet due,
being contested in good faith or for which adequate accruals or
reserves have been established, (B) which is a carriers’,
warehousemen’s, mechanics’, materialmen’s,
repairmen’s or other similar lien arising in the ordinary
course of business or (C) which would not reasonably be expected to
materially impair the continued use of a Parent Owned Real Property
or a Parent Leased Real Property as currently operated, upon any of
the properties or assets of Parent or any of its Subsidiaries, (ii)
conflict with or result in any violation of any provision of the
articles of incorporation or by-laws or other equivalent
organizational document, in each case as amended, of Parent or any
of its Subsidiaries or (iii) conflict with or violate any
applicable Laws, other than, in the case of clauses (i) and (iii),
any such consent, approval, violation, conflict, default,
termination, cancellation, acceleration, amendment, right, loss or
Lien that would not reasonably be expected to have, individually or
in the aggregate, a Parent Material Adverse Effect.
Section 4.4 Reports and Financial
Statements .
(a) From December 31, 2007 through
the date of this Agreement, Parent has filed or furnished all
forms, documents and reports required to be filed or furnished by
it with the SEC (the “ Parent SEC Documents ”).
None of Parent’s Subsidiaries is required to make any filings
with the SEC. As of their respective dates, or, if amended prior to
the date hereof, as of the date of the last such amendment, the
Parent SEC Documents complied in all material respects with the
requirements of the Securities Act and the Exchange Act, as the
case may be, and the applicable rules and regulations promulgated
thereunder, and none of the Parent SEC Documents contained any
untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading.
(b) The consolidated financial
statements (including all related notes and schedules) of Parent
included in the Parent SEC Documents (i) have been prepared from,
and are based upon the books and records of Parent and its
consolidated subsidiaries and (ii) fairly present in all material
respects the consolidated financial position of Parent and its
consolidated subsidiaries, as at the respective dates thereof, and
the consolidated results of their operations and their consolidated
cash flows for the respective periods then ended (subject, in the
case of the unaudited statements, to normal year-end audit
adjustments and to any other adjustments described therein,
including the notes thereto) in conformity with GAAP (except, in
the case of the unaudited statements, as permitted by the SEC)
applied on a consistent basis during the periods involved (except
as may be indicated therein or in the notes thereto).
(c) To the knowledge of Parent, as
of the date of this Agreement, there are no SEC inquiries or
investigations, other governmental inquiries or investigations or
internal investigations pending or threatened, in each case
regarding any accounting practices of Parent.
-25-
Section 4.5
Internal Controls and Procedures
. Parent has established
and maintains 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) as required by Rule 13a-15 under the Exchange Act.
Parent’s disclosure controls and procedures are reasonably
designed to ensure that all material information required to be
disclosed by Parent in the reports that it files or furnishes 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 material information is accumulated and
communicated to Parent’s management as appropriate to allow
timely decisions regarding required disclosure and to make the
certifications required pursuant to Sections 302 and 906 of the
Sarbanes-Oxley Act. Parent’s management has completed an
assessment of the effectiveness of Parent’s disclosure
controls and procedures in accordance with Rule 13a-15 and, to the
extent required by applicable Law, presented in any applicable
Parent SEC Document that is a report on Form 10-K or Form 10-Q its
conclusions about the effectiveness of the disclosure controls and
procedures as of the end of the period covered by such report based
on such evaluation. Based on Parent’s management’s most
recently completed evaluation of Parent’s internal control
over financial reporting prior to the date of this Agreement, (i)
to the knowledge of Parent, Parent had no significant deficiencies
or material weaknesses in the design or operation of its internal
control over financial reporting that would reasonably be expected
to adversely affect Parent’s ability to record, process,
summarize and report financial information and (ii) Parent does not
have knowledge of any fraud, whether or not material, that involves
management or other employees who have a significant role in
Parent’s internal control over financial
reporting.
Section 4.6 No
Undisclosed
Liabilities .
Except (a) as reflected or reserved against in Parent’s
consolidated balance sheets (or the notes thereto) included in the
Parent SEC Documents filed with the SEC prior to the date hereof,
(b) as permitted or contemplated by this Agreement, (c) for
liabilities and obligations incurred in the ordinary course of
business since December 31, 2008 and (d) for liabilities or
obligations which have been discharged or paid in full in the
ordinary course of business, as of the date hereof, neither Parent
nor any Subsidiary of Parent has any liabilities or obligations of
any nature, whether or not accrued, contingent or otherwise, that
would be required by GAAP to be reflected on a consolidated balance
sheet of Parent and its consolidated Subsidiaries (or in the notes
thereto), other than those which are not having or would not
reasonably be expected to have, individually or in the aggregate, a
Parent Material Adverse Effect.
Section 4.7 Compliance with Law;
Permits .
(a) Parent and each of its
Subsidiaries are in compliance with and are not in default under or
in violation of any applicable Law, except where such
non-compliance, default or violation is not having or would not
reasonably be expected to have, individually or in the aggregate, a
Parent Material Adverse Effect.
(b) Parent and its Subsidiaries
are in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents,
certificates, approvals and orders of any Governmental Entity
necessary for Parent and its Subsidiaries to own, lease and operate
their properties and assets or to carry on their businesses as they
are now being conducted (the “ Parent Permits
”), except for any of the foregoing franchises, grants,
-26-
