EXHIBIT 2.1
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PLAN AND AGREEMENT OF MERGER
MERGING
KLLLC MERGERCO, LLC
WITH AND INTO
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This Plan and Agreement of Merger, dated this 6th day of April, 2007,
pursuant to Title 6, Section 18-209 of the Delaware Limited Liability
Company Act ("Delaware Law"), between Kaanapali Land, LLC, a Delaware
limited liability company ("Kaanapali"), and KLLLC Mergerco, LLC, a
Delaware limited liability company ("KLLLC"), has been approved by (1)
Written Consent by Pacific Trail Holdings, LLC, a Delaware limited
liability company ("Pacific Trail"), in its capacity as the Manager of
Kaanapali, (2) Unanimous Written Consent of the Directors of Pacific Trail
Holdings, Inc., a Delaware corporation, the Managing Member of Pacific
Trail, and (3) Written Consent of Pacific Trail as the sole Member of
KLLLC, each on April 6, 2007.
FIRST: MERGER. Pursuant to the provisions of the Delaware Law and the
respective organizational documents of Kaanapali and KLLLC,
KLLLC shall be merged with and into Kaanapali with Kaanapali
being the surviving entity (the "Merger"). The Merger shall
become effective upon the filing of the Certificate of Merger
with the Delaware Secretary of State in accordance with
Delaware Law or at such other time as specified in the
Certificate of Merger in accordance with Delaware Law (the
"Effective Time"). At the Effective Time, Kaanapali shall
continue its corporate existence as a limited liability
company formed under Delaware Law (sometimes hereinafter
referred to as the "Surviving Entity"). The separate
existence of KLLLC shall cease at the Effective Time.
SECOND: CERTIFICATE OF FORMATION. The Certificate of Formation of the
Surviving Entity from and after the Effective Time shall be the
Certificate of Formation of Kaanapali in effect immediately
prior to the Effective Time and said Certificate of Formation
shall continue in full force and effect as provided under
Delaware Law.
THIRD: OPERATING AGREEMENT. The operating agreement of the Surviving
Entity from and after the Effective Time will be the operating
agreement of Kaanapali in effect immediately prior to the
Effective Time and will continue in full force and effect until
thereafter amended as provided therein and under Delaware Law.
FOURTH: OFFICERS. Until their successors are duly elected and shall
have qualified, the officers and manager of Kaanapali
immediately prior to the Effective Time shall be the initial
officers and manager of the Surviving Entity from and after
the Effective Time.
FIFTH: EFFECT ON CLASS A SHARES AND CLASS B SHARES. At the Effective
Time, by virtue of the Merger and without any further action on
the part of KLLLC or Kaanapali, or their respective managers or
members:
(a) The membership interest in KLLLC owned by Pacific Trail
shall automatically be cancelled and shall cease to exist
and no payment shall be made with respect thereto;
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(b) Each Class B Share of Kaanapali immediately prior to the
Effective Time shall remain issued and outstanding and
continue to represent a membership interest in the
Surviving Entity, but shall no longer be denominated as
Class B Shares and instead shall be redesignated as a
percentage interest in the Surviving Entity equal to the
fraction, expressed as a percentage, of one Class B Share
divided by the total number of Class B Shares issued and
outstanding immediately prior to the Effective Time;
(c) Each Class A Share of Kaanapali issued and outstanding
immediately prior to the Effective Time, including all
accrued and unpaid distributions thereon, if any, shall
automatically be converted into and become the right to
receive $43.25 (the "Class A Merger Consideration"). The
Class A Merger Consideration shall be paid in cash. At
the Effective Time, all such Class A Shares (and the
membership interests represented thereby) shall
automatically be canceled and shall cease to exist,
and each holder of Class A Shares in Kaanapali
(a "Class A Shareholder") immediately prior to the
Effective Time (i) who was a member of Kaanapali shall
cease to be a member of Kaanapali and shall not be a
member of the Surviving Entity, and (ii) shall cease
to have any rights with respect to such Class A
Shares, except the right to receive the Class A Merger
Consideration; and,
(d) Notwithstanding anything to the contrary in this
Agreement, if the Merger is of another type or structure
contemplated by Section NINTH below, (i) each Class A
Share shall be converted into the right to receive the
Class A Merger Consideration, and (ii) the other
provisions of this Section FIFTH shall be modified by the
parties hereto to give the effect to such type of
structure.
SIXTH: AUTHORIZATION AND EXECUTION OF DOCUMENTS. Upon satisfaction of
all of the conditions to the Merger set forth herein, or at
such earlier time as may be determined by the respective
officers of Kaanapali and KLLLC, each officer of Kaanapali and
KLLLC is hereby authorized to execute and file the Certificate
of Merger on behalf of said entities in conformity with
Delaware Law and the proper officers of Kaanapali and KLLLC are
hereby authorized, empowered and directed to do any and all
acts and things, and to make, execute, deliver, file and/or
record any and all instruments, papers and documents which
shall be or become necessary, proper or convenient to carry out
or put into effect any of the provisions contained in this Plan
and Agreement of Merger or to otherwise effectuate the Merger
including, without limitation, the qualification of this
Company to transact business as a foreign corporation in such
jurisdictions he, she or they may deem advisable.
SEVENTH: SUCCESSOR TO ASSETS AND LIABILITIES. At and after the
Effective Time, the Surviving Entity shall possess all the
rights, privileges, powers and franchises, of both a public and
private nature, and be subject to all the restrictions,
disabilities and duties of KLLLC and all property real,
personal and mixed, and all debts due on whatever account, and
all other things in action or belonging to KLLLC shall be
vested in the Surviving Entity; and all debts, liabilities,
duties and obligations of KLLLC shall thenceforth attach to
the Surviving Entity and may be enforced against the Surviving
Entity to the same extent as if said debts, liabilities, duties
and obligations have been incurred or contracted by the
Surviving Entity in the same manner and to the same extent as
enforceable against KLLLC.
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EIGHTH: VESTING OF PROPERTY RIGHTS BY OPERATION OF LAW. The Merger
shall not be deemed to constitute an assignment or transfer to
the Surviving Entity of any interest in any property, lease or
other contract; it being understood that any and all such
interests shall be vested in the Surviving Entity without
revision or impairment by virtue of the Merger and without any
further action by any person whatsoever.
NINTH: CHANGE OF MERGER STRUCTURE. Notwithstanding anything to the
contrary in this Agreement, the parties shall have the right,
in their sole discretion, to (i) change the type or structure
of, and/or the parties to, the Merger, including changing the
structure of the Merger so that (x) Kaanapali merges with and
into KLLLC with KLLLC being the surviving entity, (y) an
affiliate of Pacific Trail other than KLLLC merges with and
into Kaanapali with Kaanapali being the surviving entity and
(z) an affiliate of Pacific Trail other than KLLLC merges with
and into Kaanapali with such other affiliate being the
surviving entity and/or (ii) assign any or all of their rights,
interests, duties or obligations under this Agreement to any
affiliate of Pacific Trail, provided that any action taken by
any party pursuant to this Section NINTH shall not,
individually or when taken together with any or all other
actions under this Section NINTH, have an adverse effect on any
member of Kaanapali or KLLLC. If an entity other than KLLLC is
a party to the Merger, then, without the need for any
additional act or consent of any other person or entity, such
entity shall execute a counterpart to the Agreement and shall
thereupon become a party hereto.
TENTH: (a) DEPOSIT OF PAYMENT FUND. On or before the Effective
Time, Kaanapali shall deposit, or cause to be deposited,
with ▇▇▇▇▇ Fargo Bank, N.A., as paying agent for the
payment of the Class A Merger Consideration (the "Paying
Agent"), at least an amount in cash equal to the sum of
the product of (i) the Class A Merger Consideration and
(ii) the number of Class A Shares (the "Payment Fund").
(b) PAYMENT PROCEDURE. As soon as reasonably practicable
after the Effective Time Kaanapali shall use commercially
reasonable efforts to cause the Paying Agent to mail to
each Class A Shareholder of record immediately prior to
the Effective Time whose Class A Shares were converted
into the right to receive the Class A Merger
Consideration, pursuant to Section 2.1(c) and (d) and
this Section 2.2(b), a form of letter of transmittal (the
"Letter of Transmittal") which shall specify that
delivery shall be effected, and risk of loss and title to
the Class A Shares held by a person or entity shall pass,
only upon delivery or presentation to the Paying Agent of
evidence reasonably satisfactory to the Paying Agent that
such person or entity was, immediately prior to the
Effective Time, the holder of Class A Shares it purported
to own as of such ("Ownership Evidence"). Upon delivery
or presentation to the Paying Agent of a properly
completed and executed Letter of Transmittal, together
with Ownership Evidence (including any information or
certification required for tax purposes) and such other
documents or evidence as the Surviving Entity or the
Paying Agent may reasonably request, the Class A
Shareholder shall be entitled to receive the Class A
Merger Consideration for each Class A Share owned
immediately prior to the Effective Time, as determined
pursuant to this Agreement. No interest shall be paid or
shall accrue on any Class A Merger Consideration payable
pursuant to this Agreement or otherwise.
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(c) NO FURTHER OWNERSHIP RIGHTS IN CLASS A SHARES. All
Class A Merger Consideration paid in exchange for Class A
Shares in accordance with this Section TENTH shall be
full satisfaction for such Class A Shares exchanged for
such Class A Merger Consideration and all rights related
to such Class A Shares. At the close of business on the
date on which the Effective Time occurs, the transfer
records of Kaanapali pertaining to the Class A Shares
shall be closed and there shall be no further
registration of transfers, on the transfer records of
Kaanapali, of Class A Shares that were outstanding
immediately prior to the Effective Time.
(d) TERMINATION OF PAYMENT FUND. Any portion of the Payment
Fund that remains undistributed to Class A Shareholders
for twelve (12) months after the Effective Time shall be
delivered to the Surviving Entity, upon demand, and any
Class A Shareholders who have not theretofore complied
with this Section TENTH shall thereafter look solely to
the Surviving Entity for, and, subject to Section TENTH
(e), the Surviving Entity shall remain liable for,
payment of their claim for Class A Merger Consideration.
(e) NO LIABILITY. None of Kaanapali, KLLLC, Pacific Trail,
the Surviving Entity or the Paying Agent shall be liable
to any person or entity in respect of cash from the
Payment Fund in each case delivered to a public official
pursuant to any applicable abandoned property, escheat or
similar law. If any Class A Shares have not been
exchanged for Class A Merger Consideration prior to the
second anniversary of the date on which the Effective
Time shall occur (or immediately prior to such earlier
date on which any Class A Merger Consideration would
otherwise escheat to or become the property of any
governmental entity), any such Class A Merger
Consideration in respect thereof shall, to the extent
permitted by applicable law, become the property of the
Surviving Entity, free and clear of all claims or
interest of any person or entity previously entitled
thereto.
(f) INVESTMENT OF PAYMENT FUND. The Paying Agent shall invest
the Payment Fund on a daily basis as directed by the
Surviving Entity; provided, however, that such
investments shall be solely in one or ore of the
following: (a) direct obligations of, or obligations the
principal of and interest on which are unconditionally
guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed
by the full faith and credit of the United States of
America), in each case maturing within one year from the
date of acquisition thereof; (b) investments in
commercial paper maturing within two hundred seventy
(270) days from the date of acquisition thereof and
having, at such date of acquisition, the highest credit
rating obtainable from S&P or ▇▇▇▇▇'▇; (c) investments in
certificates of deposit, banker's acceptances and time
deposits maturing within one hundred eighty (180) days
from the date of acquisition thereof issued or guaranteed
by or placed with, and money market deposit accounts
issued or offered by, any domestic office of any
commercial bank organized under the laws of the United
States of America or any State thereof which has a
combined capital and surplus and undivided profits of not
less than $500,000,000; (d) fully collateralized
repurchase agreements with a term of not more than thirty
(30) days for securities described in clause (a) above
and entered into with a financial institution satisfying
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the criteria described in clause (c) above; and
(e) investments in money market funds that (i) comply
with the criteria set forth in Securities and Exchange
Commission Rule 2a-7 under the Investment Company
Act of 1940, (ii) are rated AAA by S&P and Aaa by ▇▇▇▇▇'▇
and (iii) have portfolio assets of at least
$5,000,000,000. All interest and other income resulting
from such investments shall be paid to the Surviving
Entity on at least as often as quarterly; provided,
however, that as additional consideration for this
Agreement, Paying Agent may retain and pay over to
itself, at the same time(s) that the balance of such
interest is remitted to the Company, the greater of
(x) 20% of the amount of such interest, and (y) the
lesser of the amount of such interest of $100 per month
for the months during which such interest was earned
(prorated for any partial months), and, provided,
further, that Paying Agent shall be entitled to retain
all interest earned from and after 24 months after the
Effective Time.
(g) WITHHOLDING RIGHTS. The Surviving Entity and/or the
Paying Agent shall be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this
Agreement to any Class A Shareholder such amounts as the
Surviving Entity or the Paying Agent is required to
deduct and withhold with respect to making such payment
under the Internal Revenue Code or any provision of
domestic or foreign (whether national, federal, state,
provincial, local, or otherwise) tax law, To the extent
that amounts are so withheld and paid over to the
appropriate taxing authority by the Surviving Entity or
the Paying Agent, such withheld amounts shall be treated
for all purposes of this Agreement as having been paid to
the Class A Shareholder in respect of which such
deduction and withholding was made by the Surviving
Entity or the Paying Agent.
ELEVENTH: CONDITIONS TO EACH PARTY'S OBLIGATIONS TO EFFECT THE MERGER.
The respective obligations of each party to consummate the
transactions contemplated by this Agreement are subject to the
satisfaction or waiver of the following conditions at or prior
to the Closing Date:
(a) Each of Kaanapali and KLLLC shall have received all
governmental approvals and third party consents required
to be obtained in connection with the Merger except where
the failure to so obtain any such approval or consent
would not, individually or in the aggregate, reasonably
be expected (i) to have a material adverse effect on the
business, financial condition or results of operations of
Kaanapali and/or KLLLC or (ii) to increase the costs of
the Merger in any material respect (including an increase
in the Class A Merger Consideration) (a "Material Adverse
Effect");
(b) No temporary restraining order, preliminary or permanent
injunction or other order or decree issued by any court
or governmental entity of competent jurisdiction or other
legal restraint or prohibition that could reasonably be
expected to have (i) a Material Adverse Effect or (ii)
the effect of preventing the consummation of the Merger,
shall be in effect; and,
(c) There shall be no pending or threatened litigation or
governmental action or proceeding challenging the Merger
that could reasonably be expected to have a Material
Adverse Effect.
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TWELFTH: TERMINATION. Either party may, at its sole discretion, upon
failure of any of the conditions set forth in Section ELEVENTH,
or for any other reason or no reason, at any time after the
date hereof and prior to the Effective Time, give the other
party notice terminating this Agreement and abandoning the
Merger. In the event of the termination of this Agreement and
the abandonment of the Merger pursuant hereto, this Agreement
shall thereupon become null and void and have no effect and no
party hereto (or any of its direct or indirect partners or
members, or any of their respective, officers, directors,
members, managers, employees or agents) shall have any
liability or obligation to any Class A Shareholder or to any
other party to this Agreement.
THIRTEENTH: FURTHER ASSURANCES. Unless this Agreement is terminated under
Section TWELFTH, each of Kaanapali and KLLLC shall use its
reasonable efforts to take all actions necessary and
appropriate to effectuate the Merger, including, if necessary,
executing any additional documents or other instruments and
filing such documents or other instruments with the appropriate
governmental authorities.
FOURTEENTH: NO APPRAISAL RIGHTS. The Class A Shareholders are not entitled
to any appraisal or dissenters' rights under the operating
agreement of Kaanapali or applicable law as a result of the
Merger.
FIFTEENTH: GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
SIXTEENTH: ENTIRE AGREEMENT. This Agreement, including the exhibits
hereto, reflects the entire agreement of the parties regarding
the subject matter hereof and supersedes all prior agreements
and understandings among the parties with respect thereto.
SEVENTEENTH:SEVERABILITY. If any provision of this Agreement is held or
deemed to be void, unenforceable or otherwise of no force and
effect, each other provision of this Agreement shall remain in
full force and effect and shall be construed without giving
effect to the provision that is void, unenforceable or of no
force and effect.
EIGHTEENTH: AMENDMENT. This Agreement shall be amended only by a writing
signed by all parties hereto.
NINETEENTH: NO THIRD PARTY BENEFICIARY. This Agreement shall be for the
sole and exclusive benefit of the parties hereto, and no other
party shall have any direct or indirect right or interest in or
arising out of this Agreement.
TWENTIETH: COUNTERPARTS. This Agreement may be signed in two or more
counterparts which, when taken together, shall constitute a
fully executed version of this Agreement.
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IN WITNESS WHEREOF, the undersigned entities have caused this Plan
and Agreement of Merger to be executed by their duly authorized officers
this 6th day of April, 2007.
KAANAPALI LAND, LLC
a Delaware limited liability company
By: Pacific Trail Holdings, LLC,
its manager
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Vice President
KLLLC, LLC
a Delaware limited liability company
By: Pacific Trail Holdings, LLC,
its sole member
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Vice President
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