EXHIBIT A
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
NEWMARK HOMES CORP.
XXXXX HOLDINGS CORP.
AND
TECHNICAL OLYMPIC, INC.
Dated: April 8, 2002
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TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS AND TERMS........................................... A-6
SECTION 1.01 Specific Definitions........................................ A-6
SECTION 1.02 Construction and Interpretation............................. A-9
ARTICLE II. THE MERGER TRANSACTION......................................... A-9
SECTION 2.01 Merger...................................................... A-9
SECTION 2.02 Closing..................................................... A-10
SECTION 2.03 Filing and Effectiveness.................................... A-10
SECTION 2.04 Effect of the Merger........................................ A-10
SECTION 2.05 Conversion of Xxxxx Shares.................................. A-11
SECTION 2.06 Procedure for Exchange...................................... A-11
SECTION 2.07 Cooperation................................................. A-11
SECTION 2.08 Ohio Savings Credit Facility................................ A-11
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF XXXXX HOLDINGS.............. A-12
SECTION 3.01 Qualification, Organization and Corporate Power............. A-12
SECTION 3.02 Authorization, Execution and Delivery....................... A-12
SECTION 3.03 Capitalization.............................................. A-12
SECTION 3.04 Noncontravention............................................ A-13
SECTION 3.05 Consents.................................................... A-13
SECTION 3.06 Financial Statements........................................ A-13
SECTION 3.07 Absence of Certain Events................................... A-13
SECTION 3.08 Employee Matters............................................ A-14
SECTION 3.09 Properties, Title and Related Matters....................... A-14
SECTION 3.10 Legal Proceedings........................................... A-15
SECTION 3.11 Insurance................................................... A-15
SECTION 3.12 Material Contracts.......................................... A-15
SECTION 3.13 Brokerage................................................... A-16
SECTION 3.14 Intellectual Property....................................... A-16
SECTION 3.15 Environmental Matters....................................... A-16
SECTION 3.16 Taxes....................................................... A-17
SECTION 3.17 Labor Matters............................................... A-18
SECTION 3.18 Permits..................................................... A-18
SECTION 3.19 Bank Accounts............................................... A-18
SECTION 3.20 SEC Filings................................................. A-18
SECTION 3.21 Prohibited Payments......................................... A-18
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE XXXXX STOCKHOLDER........
A-18
SECTION 4.01 Power and Authority......................................... A-18
SECTION 4.02 Execution and Delivery...................................... A-19
SECTION 4.03 Noncontravention............................................ A-19
SECTION 4.04 Consents.................................................... A-19
SECTION 4.05 Litigation.................................................. A-19
SECTION 4.06 Stock Ownership............................................. X-00
X-0
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SECTION 4.07 Securities Law Matters...................................... A-19
SECTION 4.08 Brokerage................................................... A-20
SECTION 4.09 Operations during the Xxxxx Stockholder's Ownership
Period...................................................... A-20
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF NEWMARK....................... A-20
SECTION 5.01 Qualification, Organization and Corporate Power............. A-20
SECTION 5.02 Authorization, Execution and Delivery....................... A-21
SECTION 5.03 Noncontravention............................................ A-21
SECTION 5.04 Consents.................................................... A-21
SECTION 5.05 Authorization for Newmark Common Stock...................... A-21
SECTION 5.06 Brokerage................................................... A-21
SECTION 5.07 SEC Documents............................................... A-21
SECTION 5.08 Securities Law Matters...................................... A-21
ARTICLE VI. COVENANTS...................................................... A-22
SECTION 6.01 Conduct of Business by Xxxxx Holdings....................... A-22
SECTION 6.02 Conduct of Business by Newmark.............................. A-23
SECTION 6.03 Maintenance of Assets and Operations........................ A-23
SECTION 6.04 Access to Information....................................... A-23
SECTION 6.05 Reasonable Efforts.......................................... A-23
SECTION 6.06 Xxxxx Stockholder Vote...................................... A-24
SECTION 6.07 Tax Allocation Agreement.................................... A-24
ARTICLE VII. SPECIAL RIGHTS................................................ A-24
SECTION 7.01 Registration Rights......................................... A-24
SECTION 7.02 Corporate Name.............................................. A-24
ARTICLE VIII. CONDITIONS TO NEWMARK'S OBLIGATIONS.......................... A-24
SECTION 8.01 Accuracy of Representations and Warranties.................. A-24
SECTION 8.02 Performance of Covenants and Agreements..................... A-24
SECTION 8.03 Consents.................................................... A-24
SECTION 8.04 Governmental Approvals...................................... A-24
SECTION 8.05 Certificates................................................ A-25
SECTION 8.06 Material Adverse Effect..................................... A-25
SECTION 8.07 Legal Proceedings........................................... A-25
SECTION 8.08 Nasdaq...................................................... A-25
SECTION 8.09 Refinancing................................................. A-25
ARTICLE IX. CONDITIONS TO XXXXX HOLDINGS AND THE XXXXX STOCKHOLDER'S
OBLIGATIONS.................................................... A-25
SECTION 9.01 Accuracy of Representations and Warranties.................. A-25
SECTION 9.02 Performance of Covenants and Agreements..................... A-25
SECTION 9.03 Consents.................................................... A-25
SECTION 9.04 Governmental Approvals...................................... A-25
SECTION 9.05 Certificates................................................ A-25
SECTION 9.06 Material Adverse Effect..................................... X-00
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SECTION 9.07 Legal Proceedings........................................... A-26
SECTION 9.08 Nasdaq...................................................... A-26
SECTION 9.09 Refinancing................................................. A-26
ARTICLE X. TERMINATION PRIOR TO CLOSING.................................... A-26
SECTION 10.01 Termination................................................. A-26
SECTION 10.02 Effect on Obligations....................................... A-26
ARTICLE XI. MISCELLANEOUS.................................................. A-26
SECTION 11.01 Limited Survival............................................ A-26
SECTION 11.02 Entire Agreement............................................ A-27
SECTION 11.03 Successors and Assigns...................................... A-27
SECTION 11.04 Expenses.................................................... A-27
SECTION 11.05 Invalidity.................................................. A-27
SECTION 11.06 Counterparts................................................ A-27
SECTION 11.07 Headings; Construction and References....................... A-27
SECTION 11.08 Third Party Beneficiaries................................... A-27
SECTION 11.09 Modification and Waiver..................................... A-27
SECTION 11.10 Notices..................................................... A-28
SECTION 11.11 Governing Law; Interpretation............................... A-29
EXHIBITS
2.04(b)(i) Form of Certificate of Amendment to Certificate of
Incorporation
2.04(d)(i) Directors of the Surviving Corporation following the Merger
2.04(d)(ii) Officers of the Surviving Corporation following the Merger
7.01 Form of Registration Rights Agreement
SCHEDULES
1.01(a) Outstanding Indebtedness
3.01 Qualification, Organization and Corporate Power
3.02 Authorization, Execution and Delivery
3.03(c) Subsidiaries of Xxxxx Homes
3.03(d) Options or Other Rights for Capital Stock
3.04 Noncontravention
3.05 Consents
3.06 Material Liabilities
3.07 Absence of Certain Events
3.08 Employee Benefit Plans
3.09(a) Personal Property Encumbrances
3.09(b) Real Property Encumbrances
3.10 Legal Proceedings
3.11 Insurance Policies
3.12(a) Material Contracts
3.13 Brokerage
3.14 Intellectual Property Not Owned or Licensed
3.15 Environmental Matters
3.16 Taxes
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3.17 Labor Matters
3.18 Permits
3.19 Bank Accounts
4.03 Noncontravention
4.04 Consents
4.05 Litigation
4.06 Stock Ownership
4.09 Operations
5.03 Noncontravention
5.04 Consents
5.06 Brokerage
6.01(a) Conduct of Business by Xxxxx Holdings
6.01(b) Conduct of Business by Xxxxx Holdings
7.02 Corporate Name
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AGREEMENT AND PLAN OF MERGER
This
Agreement and Plan of Merger (this "Agreement") is dated as of April
8, 2002, by and among
NEWMARK HOMES CORP., a Delaware corporation ("Newmark"),
XXXXX HOLDINGS CORP., a Delaware corporation ("Xxxxx Holdings") and TECHNICAL
OLYMPIC, INC., a Delaware corporation, as the sole stockholder of Xxxxx Holdings
(the "Xxxxx Stockholder") (collectively with Newmark and Xxxxx Holdings, the
"Parties").
W I T N E S S E T H:
WHEREAS, Xxxxx Stockholder is the holder of all of the issued and
outstanding capital stock of Xxxxx Holdings;
WHEREAS, the respective Boards of Directors of Newmark and Xxxxx Holdings
have approved a merger of Xxxxx Holdings with and into Newmark pursuant to which
the issued and outstanding shares of common stock of Xxxxx Holdings would be
converted into shares of common stock of Newmark, on the terms and conditions
set forth herein (the "Merger");
WHEREAS, the Special Committee of the Board of Directors of Newmark has
received the opinion of Deutsche Bank Securities Inc. that the Conversion Ratio
(as defined herein) is fair, from a financial point of view, to the public
holders of common stock of Newmark, other than the Xxxxx Stockholder;
WHEREAS, as a consequence of the Merger, Xxxxx Homes, Inc. ("Xxxxx Homes"),
a Florida corporation and wholly-owned subsidiary of Xxxxx Holdings, will become
a wholly-owned subsidiary of Newmark;
WHEREAS, the Parties hereto wish to set forth the representations,
warranties, agreements and conditions with respect to the Merger; and
WHEREAS, the Parties intend for the Merger to be a tax-free reorganization
under Section 368(a) of the Code.
NOW, THEREFORE, in consideration of the premises, the representations,
warranties and agreements herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:
ARTICLE I.
DEFINITIONS AND TERMS
SECTION 1.01 Specific Definitions. As used in this Agreement, the
following terms have the following meanings:
"AFFILIATE" means, with respect to a Person, any other Person, directly or
indirectly, controlling, controlled by or under common control with such Person.
The term "controls" as used herein means the possession of the power to direct
or cause the direction of the management and policies of a Person by virtue of
ownership of voting securities or otherwise.
"AGREEMENT" has the meaning set forth in the preface above.
"CERTIFICATE OF MERGER" has the meaning set forth in the Delaware General
Corporation Law.
"CLOSING" has the meaning set forth in Section 2.02.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CLOSING DATE" has the meaning set forth in Section 2.02.
"CONSIDERATION SHARES" has the meaning set forth in Section 2.06(a).
"CONVERSION RATIO" has the meaning set forth in Section 2.05(a).
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"DELAWARE GENERAL CORPORATION LAW" means the General Corporation Law of the
State of Delaware, as amended.
"EFFECTIVE TIME" has the meaning set forth in Section 2.03.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan," as such term is
defined in ERISA Section 3(3), and any other material employee benefit plan,
program or arrangement, including any stock bonus, stock ownership, stock
option, stock purchase, stock appreciation right, phantom stock or other stock
plan and any bonus or incentive or deferred compensation plan or fringe benefit
arrangement.
"ENCUMBRANCE" means any mortgage, pledge, lien, encumbrance, charge or
other security interest, other than (a) mechanic's, materialmen's, statutory and
similar liens, (b) liens for Taxes not yet due and payable or for Taxes that the
taxpayer is contesting in good faith through appropriate proceedings, (c)
purchase money liens and liens securing rental payments under capital lease
arrangements, to the extent such capital leases are disclosed in the Financial
Statements or the Xxxxx Disclosure Schedule, and (d) liens arising in the
ordinary course of business that are not materially adverse to the business or
assets of Xxxxx Holdings and the Xxxxx Subsidiaries and are not incurred in
connection with the borrowing of money.
"XXXXX CREDIT FACILITY" means that certain Credit Agreement among Xxxxx
Homes as borrower, several lenders parties thereto, Bank of America N.A. as
Administrative Agent, Banc of America Securities LLC, as sole lead arranger and
sole book manager dated as of November 22, 2000, as amended from time to time.
"XXXXX DISCLOSURE SCHEDULE" has the meaning set forth in Section 3.02.
"XXXXX HOLDINGS" has the meaning set forth in the preface above.
"XXXXX HOMES" has the meaning set forth in the preface above.
"XXXXX SHARE" means a share of common stock, $0.01 par value per share, of
Xxxxx Holdings.
"XXXXX STOCKHOLDER" has the meaning set forth in the preface above.
"XXXXX SUBSIDIARIES" means Xxxxx Homes and its Subsidiaries.
"XXXXX 2001 10-K" has the meaning set forth in Section 3.20.
"ENVIRONMENTAL AND LAND USE LAW" means any Law that relates to (i) the
prevention, abatement, remediation or elimination of pollution, (ii) the
protection of the environment, (iii) the protection of individuals or property
from actual or potential exposure (or the effects of exposure) to an actual or
potential spill, release or threatened release of a Hazardous Substance, (iv)
the operation, manufacture, processing, production, gathering, transportation,
importation, use, treatment, storage or disposal, arrangement for transportation
or arrangement for disposition of a Hazardous Substance, or (v) classification
and/or restrictions on the use of privately owned real property such as zoning
laws, laws restricting the development of real property for residential housing,
moratoria on building permits, and other similar conservation or land use laws
or regulations. The term "Environmental Law" includes the Clean Air Act, the
Comprehensive Environmental, Response, Compensation, and Liability Act of 1980,
the Federal Water Pollution Control Act, the Occupational Safety and Health Act
of 1970, the Resource Conservation and Recovery Act of 1976, the Safe Drinking
Water Act, the Toxic Substances Control Act, the Hazardous & Solid Waste
Amendments Act of 1984, the Superfund Amendments and Reauthorization Act of
1986, the Hazardous Materials Transportation Act, the Oil Pollution Act of 1990,
and any state Laws similar or related to the foregoing federal Laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" means any entity which is considered one employer with
Xxxxx Holdings, other than Newmark or its Subsidiaries, under Section 4001 of
ERISA or Section 414 of the Code.
"FINANCIAL STATEMENTS" has the meaning set forth in Section 3.06.
"GAAP" means United States generally accepted accounting principles.
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"GOVERNMENTAL ENTITY" means the United States federal government or any
state government, including any agency, department, commission, board, bureau,
instrumentality or political subdivision thereof.
"HAZARDOUS SUBSTANCE" means any substance, chemical, pollutant, waste or
other material (i) that consists, wholly or in part, of a substance that is
regulated under any Environmental Law, or (ii) that exists in a condition or
under circumstances that constitute a violation of an Environmental Law. The
term "Hazardous Substance" includes but is not limited to asbestos in any form
which is or may become friable, urea formaldehyde foam insulation, radon gas,
polychlorinated biphenyls or dielectric fluids containing polychlorinated
biphenyls, lead-containing paint or other products, and petroleum, including
crude oil and any fraction thereof.
"IRS" means the Internal Revenue Service.
"KNOWLEDGE" means, with respect to a Party, the actual knowledge of the
executive officers of such Party and in the case of Xxxxx Holdings, after
reasonable inquiry of the following persons: Xxxx Xxxxxxxx and Xxxx Xxxxxxx.
"LAWS" means any federal, state, local or foreign law, statute, ordinance,
rule, regulation, order or decree.
"LIEN" means any mortgage, pledge, lien, encumbrance, charge, security
interest, or equitable claim.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, assets, or financial condition of the subject party and its direct and
indirect Subsidiaries, taken as a whole, or (ii) the ability of the subject
party to consummate the transactions contemplated by this Agreement, other than
any effect resulting from a change or occurrence affecting the homebuilding
industry generally or any change in general economic conditions.
"MATERIAL CONTRACTS" has the meaning set forth in Section 3.12(b).
"MERGER" has the meaning set forth in the preface above.
"NEWMARK" has the meaning set forth in the preface above.
"NEWMARK CREDIT FACILITY" means that certain Credit Agreement among Newmark
Homes L.P. as borrower, Bank of America N.A., as administrative agent, swingline
lender and letter of credit issuing lender, other financial institutions parties
thereto and Banc of America Securities, LLC, as sole lead arranger and sole book
manager dated as of June 27, 2000, as amended from time to time.
"NEWMARK DISCLOSURE SCHEDULE" has the meaning set forth in Section 5.03.
"NEWMARK SHARE" means a share of common stock, $0.01 par value per share,
of Newmark.
"OHIO SAVINGS CREDIT FACILITY" means that certain Credit Agreement
originally among Xxxxx Stockholder as borrower, certain bank and financial
institutions thereto, Banc of America Mortgage Capital Corporation as
administrative agent and Banc of America Securities LLC, as sole lead arranger
and sole book manager; (i) as amended by the First Amendment to Credit Agreement
dated May 22, 2001; (ii) as amended, modified and assigned by the Assignment and
Acceptance dated September 21, 2001, among Banc of America Mortgage Capital
Corporation as former agent, Ohio Savings Bank, as administrative agent and
Xxxxx Stockholder as borrower; and (iii) as modified by the Modification
Agreement dated September 21, 2001, among Xxxxx Stockholder as borrower, Ohio
Savings Bank as administrative agent and certain banks and financial
institutions thereto.
"PARTIES" has the meaning set forth in the preface above.
"PERMITS" means all permits, authorizations, registrations, licenses,
certificates or variances granted by or obtained from any Governmental Entity.
"PERSON" means an individual, corporation, partnership, limited liability
company, joint stock company, joint venture, business trust or other legal
entity, association or unincorporated organization, or a Governmental Entity.
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"PLANS" has the meaning set forth in Section 3.08.
"REFINANCING" means the placement by the Surviving Corporation of
approximately $350 million aggregate principal amount of notes of the Surviving
Corporation, the execution by the Surviving Corporation of a new credit facility
and the application of net proceeds from such note offering and new credit
facility to the repayment by the Surviving Corporation of all outstanding
indebtedness under and termination of the Xxxxx Credit Facility, the Newmark
Credit Facility, the Ohio Savings Credit Facility and certain other indebtedness
as reflected on Schedule 1.01(a).
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"SUBSIDIARIES" of any Person shall mean any corporation, partnership,
limited liability company, joint stock company, joint venture, business trust or
other legal entity, association or unincorporated organization in which
securities or other ownership interests representing more than 50% of the
ordinary voting power are owned (beneficially or of record) or controlled,
directly or indirectly, by such Person, and any joint venture, partnership or
limited liability company of which such Person or any Subsidiary of such Person
is a general partner or manager.
"SURVIVING CORPORATION" has the meaning set forth in Section 2.01.
"TAX" means any federal, state, local or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
profits, environmental (including Taxes under Section 59A of the Code), customs
duties, capital stock, franchise, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value-added, alternative or add-on minimum, estimated or
other tax of any kind whatsoever, including any interest, penalty, or addition
thereto.
"TAX ALLOCATION AGREEMENT" means that certain Tax Allocation Agreement by
and between Xxxxx Stockholder, Xxxxx Holdings and its wholly-owned subsidiaries
and affiliates dated November 22, 2000.
"TAX RETURN" means any return, declaration, report, claim for refund, or
information return relating to Taxes, including any schedule or attachment
thereto, as well as any amendment thereof.
SECTION 1.02 Construction and Interpretation. The following rules of
construction and interpretation shall apply to this Agreement, unless elsewhere
specifically indicated to the contrary:
(a) all terms defined herein in the singular shall include the plural, as
the context requires, and vice-versa;
(b) pronouns stated in the neuter gender shall include the masculine, the
feminine and the neuter genders;
(c) the term "or" is not exclusive and shall be deemed to mean "and/or";
(d) the term "including" (or any form thereof) shall not be limiting or
exclusive and shall be deemed to mean "including, without limitation"; and
(e) unless otherwise indicated, any reference made in this Agreement to a
Section is a reference to a section of this Agreement, any reference to an
exhibit is a reference to an exhibit to this Agreement.
ARTICLE II.
THE MERGER TRANSACTION
SECTION 2.01 Merger. In accordance with the provisions of this Agreement
and the Delaware General Corporation Law, Xxxxx Holdings will be merged with and
into Newmark at the Effective Time. The separate existence of Xxxxx Holdings
shall cease and Newmark shall survive the Merger and shall continue to be
governed by the laws of the State of Delaware, and Newmark shall be, and is
herein sometimes referred to
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as, the "Surviving Corporation," and the name of the Surviving Corporation shall
be "Technical Olympic USA, Inc."
SECTION 2.02 Closing. The closing ("Closing") of the transactions
contemplated by this Agreement will take place at the offices of Xxxxxx & Xxxxxx
L.L.P. in Houston,
Texas, commencing at 9:00 a.m. local time on the second
business day following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions contemplated hereby,
other than those conditions with respect to actions that will take place at the
Closing itself, or such other date as the Parties may mutually determine (the
"Closing Date").
SECTION 2.03 Filing and Effectiveness. The Merger shall become effective
when the following actions shall have been completed:
(a) All of the conditions precedent to the consummation of the Merger
specified in this Agreement are satisfied or duly waived by the Party entitled
to satisfaction thereof; and
(b) An executed Certificate of Merger meeting the requirements of the
Delaware General Corporation Law is filed with the Secretary of State of the
State of Delaware.
The date and time when the Merger shall become effective, as aforesaid, is
herein called the "Effective Time."
SECTION 2.04 Effect of the Merger.
(a) General. At the Effective Time, the separate existence of Xxxxx
Holdings shall cease and Newmark, as the Surviving Corporation, (i) shall
continue to possess all of its assets, rights, powers and property as
constituted at and as of the Effective Time, (ii) shall succeed, without other
transfer, to all of the assets, rights, powers and property of Xxxxx Holdings,
(iii) shall continue to be subject to all of its debts, liabilities and
obligations as constituted at and as of the Effective Time, and (iv) shall
succeed, without other transfer, to all of the debts, liabilities and
obligations of Xxxxx Holdings in the same manner as if Newmark had itself
incurred them, all as more fully provided under the applicable provisions of the
Delaware General Corporation Law. At and after the Effective Time, the Merger
will have the effects specified in Section 259 of the Delaware General
Corporation Law.
(b) Certificate of Incorporation. Except as described below, the
certificate of incorporation of Newmark as in effect at and as of the Effective
Time shall continue in full force and effect as the certificate of incorporation
of the Surviving Corporation until duly amended in accordance with the
provisions thereof and applicable law. The certificate of incorporation of
Newmark will be amended, by the Certificate of Amendment in substantially the
form of Exhibit 2.04(b)(i), in connection with and immediately prior to the
Merger to (i) change the corporate name to Technical Olympic USA, Inc., (ii)
increase the authorized common stock from 30,000,000 shares to 67,000,000 shares
and (iii) increase the maximum number of authorized directors on the board from
10 to 15 directors.
(c) Bylaws. The bylaws of Newmark, as in effect at and as of the Effective
Time, shall continue in full force and effect as the bylaws of the Surviving
Corporation until duly amended in accordance with the provisions thereof and
applicable law, provided that such bylaws shall be amended, pursuant to the
Merger, to recognize the corporate name change and to amend Section 3.02 to
increase the number of directors on the board from 10 to 15 directors.
(d) Directors and Officers. The authorized number of persons to serve as
directors of Newmark following the Merger will be increased from 10 to 15
directors. The persons set forth in Exhibit 2.04(d)(i) shall serve as directors
of Newmark following the Merger until their respective successors have been duly
elected and qualified or until as otherwise provided by law, or by the
certificate of incorporation or the bylaws of the Surviving Corporation. The
persons to serve as officers of Newmark following the Merger until their
respective successors have been duly elected and qualified or until as otherwise
provided by law shall be those persons set forth in Exhibit 2.04(d)(ii).
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SECTION 2.05 Conversion of Xxxxx Shares.
(a) General. At and as of the Effective Time, each Xxxxx Share issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger, be changed and converted into fully paid and nonassessable Newmark
Shares at the Conversion Ratio (as defined below). The conversion ratio
("Conversion Ratio") shall be the ratio of 1,724.08294 Newmark Shares to one
Xxxxx Share; provided, however, that the Conversion Ratio shall be subject to an
equitable adjustment in the event of any stock split, stock dividend, reverse
stock split, or other change in the number of Xxxxx Shares or Newmark Shares
outstanding. No Xxxxx Shares shall be deemed to be outstanding or to have any
rights after the Effective Time.
(b) Fractional Shares. No fractional Newmark Shares shall be issued in the
Merger. To the extent the application of the Conversion Ratio to Xxxxx Shares
held by the Xxxxx Stockholder would result in a fractional number of Newmark
Shares being issued to the Xxxxx Stockholder in the Merger, the number of
Newmark Shares issuable in the Merger shall be rounded down to the next whole
number.
SECTION 2.06 Procedure for Exchange.
(a) Immediately after the Effective Time, the Xxxxx Stockholder will
surrender to Newmark each Xxxxx Share for cancellation and exchange, and the
Xxxxx Stockholder will be entitled to receive in exchange therefor a Newmark
Share certificate or certificates representing the product of (i) the Conversion
Ratio times (ii) the number of Xxxxx Shares surrendered for exchange (the
"Consideration Shares").
(b) Each certificate representing a Newmark Share so issued in the Merger
shall bear the same legend, if any, with respect to the restrictions on
transferability as the certificate for an Xxxxx Share so converted and given in
exchange therefor, unless otherwise determined by the board of directors of the
Surviving Corporation in compliance with applicable laws.
(c) If any certificate for a Newmark Share is to be issued in a name other
than that in which the certificate surrendered in exchange therefor is
registered, it shall be a condition of issuance thereof that the certificate so
surrendered shall be properly endorsed and otherwise in proper form for
transfer, that such transfer otherwise be proper and that the Person requesting
such transfer pay to Newmark any transfer or other Taxes payable by reason of
the issuance of such new certificate in a name other than that of the registered
holder of the certificate surrendered or establish to the satisfaction of
Newmark that such Tax has been paid or is not payable.
SECTION 2.07 Cooperation.
The Parties hereby agree to cooperate in the preparation and filing (as
soon as practicable following execution of this Agreement) with the SEC of an
Information Statement on Schedule 14C or Proxy Statement on Schedule 14A, as
required with respect to the Merger under the rules and regulations promulgated
by the SEC.
SECTION 2.08 Ohio Savings Credit Facility.
The Parties acknowledge that immediately prior to the effective time of the
Merger, the Ohio Savings Credit Facility, which was entered into by the Xxxxx
Stockholder in connection with its acquisition of Xxxxx Homes, will be assumed
by Xxxxx Homes or the Surviving Corporation and that the Ohio Savings Credit
Facility shall be paid off in connection with and as part of the Refinancing.
The additional indebtedness evidenced by the Ohio Savings Credit Facility shall
be considered to be indebtedness of Xxxxx Homes in the Parties' calculation of
the Conversion Ratio and for purposes of the Deutsche Bank Securities Inc.
fairness opinion.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF XXXXX HOLDINGS
Xxxxx Holdings represents and warrants to Newmark the following:
SECTION 3.01 Qualification, Organization and Corporate Power.
(a) Each of Xxxxx Holdings and each Xxxxx Subsidiary is a corporation,
limited liability company or partnership duly organized, validly existing and in
good standing under the laws of its state of incorporation or organization and
has all requisite corporate or partnership power and authority to conduct its
business as currently conducted and to own, operate and lease the assets it now
owns, operates or holds under lease. Each of Xxxxx Holdings and each Xxxxx
Subsidiary is duly qualified and authorized to do business and is in good
standing under the laws of each jurisdiction in which the conduct of its
business or the ownership or leasing of its assets requires it to be so
qualified or licensed, except where the lack of such qualification, individually
or in the aggregate, would not have a Material Adverse Effect on Xxxxx Holdings
or on the ability of Xxxxx Holdings or the Xxxxx Stockholder to consummate the
transactions contemplated by this Agreement. Xxxxx Holdings has previously
delivered to Newmark true and correct copies of the charter and bylaws or other
governing documents of Xxxxx Holdings and each Xxxxx Subsidiary as in effect on
the date hereof.
(b) Xxxxx Holdings was formed in November 2000 in connection with the
purchase of Xxxxx Homes by the Xxxxx Stockholder and, except as described in
Section 3.01 of the Xxxxx Disclosure Schedule accompanying this Agreement (the
"Xxxxx Disclosure Schedule"), Xxxxx Holdings has not conducted any substantial
business since its inception other than to acquire, finance and hold all of the
outstanding shares of capital stock of Xxxxx Homes.
SECTION 3.02 Authorization, Execution and Delivery.
(a) Except as set forth in Section 3.02 of the Xxxxx Disclosure Schedule,
(i) Xxxxx Holdings has full power and authority to execute and deliver this
Agreement and to perform its obligations hereunder and (ii) the execution and
delivery of this Agreement by Xxxxx Holdings and the performance of its
obligations hereunder have been duly authorized by all necessary corporate
action.
(b) From and after the Closing, this Agreement will constitute a legal,
valid and binding obligation of Xxxxx Holdings, enforceable against Xxxxx
Holdings in accordance with its terms, except as such enforceability may be
limited by or subject to (i) any bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights generally and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
SECTION 3.03 Capitalization.
(a) The authorized capital stock of Xxxxx Holdings consists of 50,000
shares of common stock par value $.01 per share, of which 9,500 shares are
issued and outstanding. All of the outstanding Xxxxx Shares have been duly
authorized and are validly issued, fully paid and nonassessable and were not
issued in violation of any preemptive or other similar rights.
(b) The Xxxxx Stockholder is the record owner of all issued and outstanding
Xxxxx Shares.
(c) Xxxxx Holdings owns no capital stock or equity interests in any Person
except for its ownership in Xxxxx Homes. Section 3.03(c) of the Xxxxx Disclosure
Schedule lists all of the Subsidiaries of Xxxxx Homes. All of the shares of
issued and outstanding capital stock of each of Xxxxx Homes' Subsidiaries which
is a corporation are duly authorized and are validly issued, fully paid and
nonassessable and were not issued in violation of any preemptive or other
similar rights. Except as set forth on Section 3.03(c) of the Xxxxx Disclosure
Schedule, all of the capital stock or other equity interests of the Subsidiaries
of Xxxxx Homes are owned, beneficially and of record, directly or indirectly, by
Xxxxx Holdings and the Xxxxx Stockholder, free and clear of any Liens.
(d) Except as set forth in Section 3.03(d) of the Xxxxx Disclosure
Schedule, there are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights or other
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commitments or agreements, arrangements or understandings of any kind or
character obligating Xxxxx Holdings or any Xxxxx Subsidiary (i) to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
capital stock of Xxxxx Holdings or any Xxxxx Subsidiary or any securities or
obligations convertible into or exchangeable for such shares or (ii) to grant,
extend or enter into any such option, warrant, convertible security, call,
right, commitment, preemptive right, agreement, arrangement or understanding
described in this Section 3.03(d).
(e) There are no registration covenants or transfer or voting restrictions
with respect to outstanding securities of Xxxxx Holdings or any Xxxxx
Subsidiary.
SECTION 3.04 Noncontravention. To the Knowledge of Xxxxx Holdings and
except as listed in Section 3.04 of the Xxxxx Disclosure Schedule, neither the
execution and delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (i) violate any statute, regulation,
rule, injunction, judgment, order, ruling, charge or other restriction of any
Governmental Entity or court to which Xxxxx Holdings or any Xxxxx Subsidiary is
subject, (ii) violate any provision of the charter or the bylaws or other
governing documents of Xxxxx Holdings or any Xxxxx Subsidiary or (iii) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any Person the right to accelerate, terminate, modify
or cancel, or require any notice under any agreement, contract, lease, license,
instrument or other arrangement to which Xxxxx Holdings or any Xxxxx Subsidiary
is a party or by which it is bound or to which any of its assets is subject (or
result in the imposition of any Encumbrance upon any of its assets); except
where the violation, cancellation, failure to give notice, or Encumbrance would
not have a Material Adverse Effect on Xxxxx Holdings or on the ability of Xxxxx
Holdings or the Xxxxx Stockholder to consummate the transactions contemplated by
this Agreement.
SECTION 3.05 Consents. Except as set forth in Section 3.05 of the Xxxxx
Disclosure Schedule hereto, the execution, delivery and performance of this
Agreement by Xxxxx Holdings and the consummation by Xxxxx Holdings of the
transactions contemplated hereby do not require the consent, approval,
clearance, waiver, order or authorization of any Person except for consents,
approvals, clearances, waivers, orders or authorizations which have been
obtained or which, if not obtained, would not have a Material Adverse Effect on
Xxxxx Holdings.
SECTION 3.06 Financial Statements. True and correct copies of the audited
consolidated balance sheet of Xxxxx Homes and its Subsidiaries as of December
31, 2001, and the related consolidated statements of income and accumulated
deficit and cash flows for the year ended December 31, 2001, (collectively, the
"Financial Statements"), have been filed with the SEC. The Financial Statements
fairly present the consolidated financial position of Xxxxx Homes and its
Subsidiaries as of the dates thereof and the cash flows and results of
operations for the periods covered thereby, and have been prepared in accordance
with GAAP consistently applied by Xxxxx Homes and its Subsidiaries, except for
normal year-end adjustments for interim periods and as set forth in Section
3.06(a) of the Xxxxx Disclosure Schedule. Except as set forth in Section 3.06(b)
of the Xxxxx Disclosure Schedule, Xxxxx Holdings and the Xxxxx Subsidiaries did
not have any material liability of any kind or manner, either direct, accrued,
absolute, contingent or otherwise, that is not reflected or disclosed in the
Financial Statements and that was required under GAAP, as consistently applied
by Xxxxx Holdings and the Xxxxx Subsidiaries, to have been reflected or
disclosed in such Financial Statements.
SECTION 3.07 Absence of Certain Events. Except as set forth on Section
3.07 of the Xxxxx Disclosure Schedule, since December 31, 2001, there has not
been (a) any Material Adverse Effect on Xxxxx Holdings through the date hereof,
(b) any declaration, setting aside or payment of any dividend (whether in cash,
stock or property) with respect to any of Xxxxx Holdings' capital stock, (c) any
granting by Xxxxx Holdings or any Xxxxx Subsidiary to any executive officer of
Xxxxx Holdings or any Engle Subsidiary of any increase in compensation outside
the ordinary course of business, (d) any granting by Xxxxx Holdings or any Xxxxx
Subsidiary to any executive officer of any increase in severance or termination
pay, or (e) any entry by Xxxxx Holdings or any Xxxxx Subsidiary into any
employment, severance or termination agreement with any executive officer, (f)
any damage, destruction or loss, whether or not covered by insurance, that has
or could reasonably be expected to have a Material Adverse Effect on Xxxxx
Holdings, (g) any change in accounting
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methods, principles or practices by Xxxxx Holdings or the Xxxxx Subsidiaries
materially affecting their respective assets, liabilities or business, except
insofar as may have been required by a change in GAAP, (h) any condition, event
or occurrence through the date hereof which, individually or in the aggregate,
could reasonably be expected (1) to prevent, hinder or delay, in any material
respect, the ability of Xxxxx Holdings or the Xxxxx Stockholder to consummate
the transactions contemplated by this Agreement or (2) to result in the loss of
a material benefit under this Agreement to any Party to this Agreement or (i)
any agreement, in writing or otherwise, by Xxxxx Holdings or any Xxxxx
Subsidiary or any corporate action by Xxxxx Holdings or any Xxxxx Subsidiary
with respect to the foregoing.
SECTION 3.08 Employee Matters.
(a) Section 3.08(a) of the Xxxxx Disclosure Schedule contains a list of
each Employee Benefit Plan and all employment, severance, consulting or other
similar contracts or agreements (except for any employment or consulting
contract or agreement that is for an amount which does not exceed $50,000 per
annum or is terminable within 30 days without penalty) to which Xxxxx Holdings
or any Xxxxx Subsidiary or any ERISA Affiliate is or was a party or with respect
to which Xxxxx Holdings or any Xxxxx Subsidiary or any ERISA Affiliate has any
material obligation (collectively, the "Plans"). Xxxxx has made available to
Newmark true and complete copies of each Plan that is in writing (and summaries
of those Plans that are not in writing). Except as specifically provided by this
Agreement or referenced in Section 3.08(a) of the Xxxxx Disclosure Schedule,
neither Xxxxx Holdings nor any Xxxxx Subsidiary or any ERISA Affiliate has any
material commitment (i) to create, incur any material liability with respect to
or cause to exist any other employee benefit plan, program or arrangement, (ii)
to enter into any material contract or agreement to provide compensation or
benefits to any individual or (iii) to modify or change, in any material
respect, or terminate any Plan, other than with respect to a modification,
change or termination required by ERISA or the Code.
(b) Except as set forth on Section 3.08(b) of the Xxxxx Disclosure
Schedule, (i) none of the Plans is subject to Title IV of ERISA or Section 412
of the Code or is a multiemployer plan, as defined in Section 3(37) of ERISA;
(ii) each Plan that is intended to be qualified under Section 401(a) or 401(k)
of the Code has received a favorable determination letter from the IRS that it
is so qualified and that Xxxxx Holdings has no Knowledge that any amendment or
other action or omission has occurred that would adversely affect its
qualification; (iii) each Plan is now and has always been operated in all
material respects in accordance with its terms and the requirements of all
applicable laws, and Xxxxx Holdings and each Xxxxx Subsidiary and ERISA
Affiliate have performed all material obligations required to be performed by
them under, are not in any material respect in default under or in violation of,
and have no knowledge of any material default or violation of applicable law by
any party to, any Plan; (iv) no Plan has any liability to provide benefits to
any person following his termination of employment except as may be required by
part 6 of subtitle B of title I of ERISA; (v) there are no pending actions,
claims, investigations, audits, or lawsuits (other than routine claims for
benefits) which have been asserted or instituted against the Plans or any Plan
sponsor, administrator, or fiduciary; and (vi) none of Xxxxx Holdings, any Xxxxx
Subsidiary, or any ERISA Affiliate has engaged in or is a successor or affiliate
or any entity that has engaged in a transaction described in Sections 4069 or
4212(c) of ERISA.
(c) Except as set forth in Section 3.08(c) of the Xxxxx Disclosure
Schedule, all interest amounts of employer contributions and premiums accrued
but unpaid with respect to the Plans which are required in accordance with GAAP
to be accrued though the year ended December 31, 2001 are reflected in accruals
on Xxxxx Homes' financial statements which are contained in Xxxxx Homes' Form
10-K for the year ended December 31, 2001 filed with the SEC.
SECTION 3.09 Properties, Title and Related Matters.
(a) Each Xxxxx Subsidiary has good and marketable title to all of its
personal property that is material to their respective businesses, free and
clear of all Encumbrances, except for those Encumbrances set forth on Section
3.09 of the Xxxxx Disclosure Schedule.
(b) Xxxxx Holdings and each Xxxxx Subsidiary has good and marketable title
to all of the real property owned by it in fee simple absolute, free and clear
of all Encumbrances, except for Encumbrances as set forth
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in Section 3.09(b) of the Xxxxx Disclosure Schedule. To the Knowledge of Xxxxx
Holdings, no material parcel of real property owned by any Xxxxx Subsidiary is
subject to any governmental decree or is being condemned, expropriated or
otherwise taken by any public authority, with or without payment of compensation
therefor, and no such condemnation, expropriation or taking has been proposed;
provided, however, that immaterial easements arising after the date of this
Agreement that do not materially adversely affect the operations of the Xxxxx
Subsidiaries in the ordinary course of business or the value or use of the Xxxxx
Subsidiaries' material assets shall not constitute a violation of this Section
3.09(b).
SECTION 3.10 Legal Proceedings. Except as set forth on Section 3.10 of
the Xxxxx Disclosure Letter, there is no legal, judicial, administrative,
governmental, arbitration or other action or proceeding or governmental
investigation pending or threatened against Xxxxx Holdings or any Xxxxx
Subsidiary or affecting any of their respective assets, nor is there any order
of any Governmental Entity, court or arbitrator outstanding against Xxxxx
Holdings or any Xxxxx Subsidiary in which the potential exposure to Xxxxx
Holdings and the Xxxxx Subsidiaries is reasonably believed to be in excess of
$50,000. Neither Xxxxx Holdings nor any Xxxxx Subsidiary is in violation of or
in default under any Laws or judgments of any Governmental Entity, court or
arbitrator applicable to its business if such violation or default would have a
Material Adverse Effect on Xxxxx Holdings. There are no judgments, orders or
decrees of any Governmental Entity, court or arbitrator in which either Xxxxx
Holdings or any Xxxxx Subsidiary is a named party or any of its assets are
identified and subject, which would be reasonably likely to have a Material
Adverse Effect on Xxxxx Holdings.
SECTION 3.11 Insurance. Section 3.11 of the Xxxxx Disclosure Schedule
sets forth all existing insurance policies held by Xxxxx Holdings and the Xxxxx
Subsidiaries relating to the business, assets, employees or agents of Xxxxx
Holdings and the Xxxxx Subsidiaries. Each such policy is in full force and
effect and is with insurance carriers believed by Xxxxx Holdings to be
responsible. To the Knowledge of Xxxxx Holdings, there is no dispute with
respect to such policies.
SECTION 3.12 Material Contracts.
(a) Except as set forth in Section 3.12(a) of the Xxxxx Disclosure Schedule
and as permitted by Section 6.01 of this Agreement for contracts, agreements,
commitments or leases entered into after the date hereof, neither Xxxxx Holdings
nor any Xxxxx Subsidiary is a party to or bound by:
(i) any agreement, indenture or other instrument which contains
restrictions with respect to the payment of dividends or any other
distribution in respect of its capital stock or the purchase, redemption or
other acquisition of capital stock;
(ii) other than capital expenditures regularly made in the ordinary
course of business of Xxxxx Holdings and the Xxxxx Subsidiaries, any
agreement, contract or commitment relating to any individual capital
expenditure in excess of $250,000 or a series of related capital
expenditures in excess of $1,000,000 (provided that for purposes hereof
land and lot development costs and home building commitments shall not be
deemed to be capital expenditures);
(iii) any outstanding loan or advance by Xxxxx Holdings or any Xxxxx
Subsidiary to, or investment by Xxxxx Holdings or Xxxxx Subsidiary in, any
Person, or any agreement, contract, commitment or understanding relating to
the making of any such loan, advance or investment (excluding trade
receivables, and advances to employees for expenses arising in the ordinary
course of business);
(iv) any contract, agreement, indenture, note or other instrument
involving more than $250,000 and relating to (A) the borrowing of money by
Xxxxx Holdings or any Xxxxx Subsidiary or the granting of any Encumbrance
or (B) any guarantee or other contingent liability (identifying the primary
contract or agreement to which such guarantee or contingent liability
relates or the agreement pursuant to which such guarantee was delivered) in
respect of any indebtedness, commitment, liability or obligation of any
Person (other than the endorsement of negotiable instruments for deposit or
collection in the ordinary course of business);
(v) any agreement, contract or commitment limiting the freedom of
Xxxxx Holdings or any Xxxxx Subsidiary to engage in any line of business,
to own, operate, sell, transfer, pledge or otherwise dispose of
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or encumber any asset or to compete with any Person or to engage in any
business or activity in any geographic area;
(vi) any agreement, lease, contract or commitment or series of related
agreements, leases, contracts or commitments not entered into in the
ordinary course of business that is not cancelable under the terms of such
agreement, lease, contract or commitment without penalty to Xxxxx Holdings
or any Xxxxx Subsidiary within 30 days;
(vii) any agreement, contract or commitment of Xxxxx Holdings or any
Xxxxx Subsidiary that Xxxxx Holdings expects could reasonably have a
Material Adverse Effect on Xxxxx Holdings; or
(viii) to the Knowledge of Xxxxx Holdings, any material agreement or
instrument to which Xxxxx Holdings or any Xxxxx Subsidiary is a party or by
which any of them is bound under which the execution and delivery of this
Agreement or of any document to be delivered in accordance with this
Agreement or the consummation of the transactions contemplated by this
Agreement would give rise to a right of termination, amendment,
cancellation or the loss of a material benefit under such agreement or
instrument, or the acceleration or maturity of any material obligation or
the creation of any "put" right or offer or requirement to purchase or any
lien, pledge, security interest, charge or other encumbrance on any assets
of Xxxxx Holdings or any Xxxxx Subsidiary.
(b) To the Knowledge of Xxxxx Holdings, none of Xxxxx Holdings, the Xxxxx
Subsidiaries and the other contracting parties thereto have breached any
provision of or are in default (and no event or circumstance exists, with
respect to other Parties, that with notice, or the lapse of time or both, would
constitute a default) under the terms of any agreement or contract listed in
Section 3.12(a) of the Xxxxx Disclosure Schedule or any agreement or contract
that it believes is otherwise material to the business and operations of Xxxxx
Holdings or the Xxxxx Subsidiaries ("Material Contracts"), other than breaches,
defaults or events which would not have a Material Adverse Effect on Xxxxx
Holdings. To the Knowledge of Xxxxx Holdings, all Material Contracts are in full
force and effect.
SECTION 3.13 Brokerage. Except as set forth in Section 3.13 of the Xxxxx
Disclosure Schedule, no investment banker, broker or finder has acted directly
or indirectly for Xxxxx Holdings or the Xxxxx Stockholder in connection with
this Agreement or the transactions contemplated hereby and no investment banker,
broker, finder or other Person is entitled to any brokerage or finder's fee or
similar commission in respect thereof based in any way on agreements,
arrangements or understandings made by or on behalf of Xxxxx Holdings or the
Xxxxx Stockholder.
SECTION 3.14 Intellectual Property. Except as set forth on Section 3.14
of the Xxxxx Disclosure Schedule, Xxxxx Holdings or an Xxxxx Subsidiary owns, or
is licensed or otherwise has the right to use all patents, trademarks,
copyrights, and other proprietary rights ("Intellectual Property") that are
material to the conduct of the business and operations of either Xxxxx Holdings
or the Xxxxx Subsidiaries. To the Knowledge of Xxxxx Holdings, (a) the use of
the Intellectual Property by either Xxxxx Holdings or the Xxxxx Subsidiaries
does not infringe on the rights of any Person, subject to such claims and
infringements as do not, in the aggregate, give rise to any liability on the
part of either Xxxxx Holdings or any Xxxxx Subsidiary which could have a
Material Adverse Effect on Xxxxx Holdings and (b) no Person is infringing on any
right of Xxxxx Holdings or any Xxxxx Subsidiary with respect to any Intellectual
Property. To the Knowledge of Xxxxx Holdings, no claims are pending or
threatened that either Xxxxx Holdings or any Xxxxx Subsidiary is infringing or
otherwise adversely affecting the rights of any Person with regard to any
Intellectual Property. To the Knowledge of Xxxxx Holdings, no Person is
infringing the rights of either Xxxxx Holdings or any Xxxxx Subsidiary with
respect to any Intellectual Property.
SECTION 3.15 Environmental Matters.
(a) (i) Xxxxx Holdings and the Xxxxx Subsidiaries have all environmental
permits which are necessary to enable them to conduct their businesses as they
currently are being conducted without violating, in any material respect,
Environmental and Land Use Laws; (ii) except as set forth on Section 3.15 of the
Xxxxx Disclosure Schedule, neither Xxxxx Holdings nor any Xxxxx Subsidiary has
received any notice of noncompliance or material liability under any
Environmental and Land Use Law which is now pending; (iii) neither
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Xxxxx Holdings nor any Xxxxx Subsidiary has performed any acts, including but
not limited to releasing, storing or disposing of hazardous materials and, to
the Knowledge of Xxxxx Holdings, there is no condition on any property owned or
leased by Xxxxx Holdings or any Xxxxx Subsidiary, that would be a basis for
material liability of Xxxxx Holdings or any Xxxxx Subsidiary under any
Environmental Law; (iv) except as set forth on Section 3.15 of the Xxxxx
Disclosure Schedule, neither Xxxxx Holdings nor any Xxxxx Subsidiary is subject
to any order of any court or governmental agency requiring Xxxxx Holdings or any
Xxxxx Subsidiary to take, or refrain from taking, any actions in order to comply
with any Environmental and Land Use Law and no action or proceeding seeking such
an order is pending or, insofar as any officer of Xxxxx Holdings is aware,
threatened against Xxxxx Holdings or any Engle Subsidiary; (v) to the Knowledge
of Xxxxx Holdings, there has not been exposure of persons to a release or
threatened release of hazardous materials in connection with the operations of
Xxxxx Holdings or any Xxxxx Subsidiary that could reasonably be expected to lead
to tort claims by third parties of material damages or compensation; and (vi)
except as set forth on Section 3.15 of the Xxxxx Disclosure Schedule, Xxxxx
Holdings or the Xxxxx Subsidiaries have no Knowledge regarding any currently
proposed Environmental and Land Use Laws or other organized initiatives that
would prohibit or otherwise substantially restrict any of Xxxxx Holdings' or the
Xxxxx Subsidiaries' existing material operations or businesses.
SECTION 3.16 Taxes. Except as set forth in Section 3.16 of the Xxxxx
Disclosure Schedule:
(a) Xxxxx Holdings and each Xxxxx Subsidiary has filed when due (taking
account of extensions) all Tax Returns relating to federal, state and foreign
income taxes (other than states for which the Tax Returns are not material), and
all other material Tax Returns, which it has been required to file and has paid
in full all Taxes shown to be due on those returns or subsequent assessments
with respect thereto. Those Tax Returns are true, correct and complete in all
material respects and accurately reflect all material Taxes required to have
been paid, except to the extent of items which may be disputed by applicable
taxing authorities but for which Xxxxx Holdings believes there is authority to
support the position taken by Xxxxx Holdings or any Xxxxx Subsidiary and for
which Xxxxx Holdings has provided adequate reserves (if and to the extent
required in accordance with GAAP) on the balance sheet dated December 31, 2001
included in the Xxxxx Homes Form 10-K filed with the SEC for the year ended
December 31, 2001. Xxxxx Holdings has maintained all documents, books and
records as are required to be maintained by it and the Xxxxx Subsidiaries under
applicable Tax laws, rules and regulations.
(b) Xxxxx Holdings and the Xxxxx Subsidiaries have withheld and paid over
all material Taxes required to have been withheld and paid over, and complied,
in all material respects, with all information reporting and backup withholding
requirements, including maintenance of required records with respect thereto, in
connection with amounts paid or owing to any employee, creditor, independent
contractor or other third party.
(c) (i) No extension of time given by Xxxxx Holdings or any Xxxxx
Subsidiary for assessment of Tax with respect to any of their federal income Tax
Returns or other material Tax Returns is in effect, (ii) to the Knowledge of
Xxxxx Holdings, no Tax lien has arisen and no Tax lien or levy has been filed by
any taxing authority against Xxxxx Holdings or any Xxxxx Subsidiary or any of
their assets relating to Taxes in excess of $50,000 in any instance, or $250,000
in aggregate (other than for current Taxes not yet due and payable), (iii) no
federal income Tax Return, or state or local Tax Return, of Xxxxx Holdings or
any Xxxxx Subsidiary is the subject of a pending audit or other administrative
proceeding or court proceeding, (iv) neither Xxxxx Holdings nor any Xxxxx
Subsidiary is a party to any agreement providing for the allocation or sharing
of Taxes (other than agreements solely between Xxxxx Holdings and the Xxxxx
Subsidiaries or among the Xxxxx Subsidiaries), (v) neither Xxxxx Holdings nor
any Xxxxx Subsidiary has participated in or cooperated with an international
boycott as that term is used in Section 999 of the Code, (vi) to the Knowledge
of Xxxxx Holdings, no event, transaction, act or omission has occurred which
could reasonably be expected to result in Xxxxx Holdings becoming liable to pay
or to bear any Tax as a transferee, successor or otherwise which is primarily or
directly chargeable or attributable to any other person, firm or company other
than any Xxxxx Subsidiary, and Xxxxx Holdings has no actual or contingent
liability (whether by reason of any indemnity, warranty or otherwise) to any
other Person in respect of any actual, contingent or deferred liability of such
person for Taxes, (vii) Xxxxx Holdings is not required to include in income any
adjustment pursuant to Section 481(a) of the Code by reason of a voluntary
change in accounting method initiated by Xxxxx
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Holdings, and the IRS has not proposed any such adjustment or change in
accounting method, and (viii) neither Xxxxx Holdings nor any Xxxxx Subsidiary
has filed a consent pursuant to Section 341(f) of the Code or agreed to have
Section 341(f)(2) of the Code apply to any disposition of a Subsection (f) asset
(as that term is defined in Section 341(f)(4) of the Code) owned by Xxxxx
Holdings or any Xxxxx Subsidiary.
(d) There are no contracts, agreements or other arrangements which could
reasonably be expected to result in the payment by the Company or by any
Subsidiary of an "Excess Parachute Payment" as that term is used in Section 280G
of the Code or the payment by Xxxxx Holdings or any Xxxxx Subsidiary of
compensation which will not be deductible because of Section 162(m) of the Code.
(e) Xxxxx Holdings is not currently involved in any proceedings contesting
the payment of any material Taxes.
SECTION 3.17 Labor Matters. Except as set forth in Section 3.17 of the
Xxxxx Disclosure Schedule, there are no collective bargaining or other labor
union agreements to which Xxxxx Holdings or any Xxxxx Subsidiary is a party or
by which it is bound. At the date hereof, there are no disputes with employees
in general to which Xxxxx Holdings or any Xxxxx Subsidiary is a party. At the
date hereof, neither Xxxxx Holdings nor any Engle Subsidiary has received notice
from any union or employees setting forth demands for representation, elections
or for present or future changes in wages, terms of employment or working
conditions. Xxxxx Holdings and each Xxxxx Subsidiary is in compliance, in all
material respects, with all applicable laws, agreements, contracts and policies
relating to employment, employment practices, wages, hours and terms and
conditions of employment of the employees.
SECTION 3.18 Permits. Xxxxx Holdings and the Xxxxx Subsidiaries hold all
material Permits necessary for the conduct of the operations of their business
as currently conducted. To the Knowledge of Xxxxx Holdings and the Xxxxx
Subsidiaries, all such Permits are in full force and effect and no material
violations currently exist in respect of any provision thereof, except as set
forth in Section 3.18 of the Xxxxx Disclosure Letter.
SECTION 3.19 Bank Accounts. Section 3.19 of the Xxxxx Disclosure Schedule
includes the names and locations of all banks in which Xxxxx Holdings or any
Xxxxx Subsidiary has an account or safe deposit box and the names of all Persons
authorized to draw thereon or to have access thereto.
SECTION 3.20 SEC Filings. The Annual Report of Xxxxx Homes on Form 10-K
for the year ended December 31, 2001 (the "Xxxxx 2001 10-K") which Xxxxx Homes
filed with the SEC, at the time filed, complied in all material respects with
the applicable requirements of the Securities Exchange Act and did not contain
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made in it, in light of the
circumstances under which they were made, not misleading. Xxxxx Homes has filed
with the SEC all forms, statements, reports and documents required by the rules
and regulations promulgated by the SEC to be filed with the SEC since November
22, 2000.
SECTION 3.21 Prohibited Payments. Neither Xxxxx Holdings nor any Xxxxx
Subsidiary has, directly or indirectly, made or agreed to make any contribution,
payment or gift to any government official, employee or agent where either the
contribution, payment or gift or the purpose thereof was illegal under the laws
of any federal, state, local or foreign jurisdiction.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE XXXXX STOCKHOLDER
The Xxxxx Stockholder represents and warrants to Newmark the following:
SECTION 4.01 Power and Authority. The Xxxxx Stockholder has the full
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. The execution and delivery of this Agreement by the Xxxxx
Stockholder and the performance of its obligations hereunder have been duly
authorized by all necessary corporate action.
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SECTION 4.02 Execution and Delivery. The Xxxxx Stockholder has duly
executed and delivered this Agreement. This Agreement constitutes a legal, valid
and binding obligation of the Xxxxx Stockholder, enforceable against the Xxxxx
Stockholder in accordance with its terms, except as such enforceability may be
limited by or subject to (a) any bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights generally and (b)
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
SECTION 4.03 Noncontravention. To the Knowledge of the Xxxxx Stockholder
and except as set forth in Section 4.03 of the Xxxxx Disclosure Schedule,
neither the execution and delivery of this Agreement by the Xxxxx Stockholder,
nor the consummation of the transactions contemplated hereby, will (i) violate
any statute, regulation, rule, injunction, judgment, order, ruling, charge or
other restriction of any Governmental Entity (including for purposes of this
Section 4.03 any foreign governmental authority which has jurisdiction over the
Xxxxx Stockholder), court or arbitrator to which the Xxxxx Stockholder is
subject, (ii) violate any provision of the certificate of incorporation or the
bylaws or any voting agreement of the Xxxxx Stockholder or (iii) conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any Party the right to accelerate, terminate, modify or cancel,
require any notice under any agreement, contract, lease, license, instrument or
other arrangement to which the Xxxxx Stockholder is a party or by which it is
bound or to which any of the assets of Xxxxx Holdings or any Xxxxx Subsidiary
are subject (or result in the imposition of any Encumbrance upon any of its
assets); except where the violation, cancellation, failure to give notice, or
Encumbrance would not have a Material Adverse Effect on Xxxxx Holdings.
SECTION 4.04 Consents. Except as set forth in Section 4.04 of the Xxxxx
Disclosure Schedule, no material consents, approvals or authorizations of any
Person (including for purposes of this Section 4.04 any foreign governmental
authority which has jurisdiction over the Xxxxx Stockholder) are required on the
part of the Xxxxx Stockholder in connection with the execution and delivery of
this Agreement or the consummation of the transactions contemplated hereby.
SECTION 4.05 Litigation. To the Knowledge of the Xxxxx Stockholder and
except as set forth in Section 4.05 of the Xxxxx Disclosure Schedule, there is
no legal, judicial, administrative, governmental, arbitration or other action or
proceeding pending or threatened against the Xxxxx Stockholder that could
reasonably be expected to affect the ability of the Xxxxx Stockholder to perform
its obligations under this Agreement.
SECTION 4.06 Stock Ownership. The Xxxxx Stockholder is the record and
beneficial owner of all issued and outstanding Xxxxx Shares, and has full
authority to vote all of such shares as contemplated by this Agreement and
otherwise and, except as set forth in Section 4.06 of the Xxxxx Disclosure
Schedule, the Xxxxx Shares owned by the Xxxxx Stockholder are owned free and
clear of any Liens. The Xxxxx Stockholder has, or as of the Effective Date will
have, full authority to transfer pursuant to the Merger all of the shares of
common stock of Xxxxx Holdings free and clear of any Liens.
SECTION 4.07 Securities Law Matters.
(a) The Xxxxx Stockholder recognizes and understands that the Consideration
Shares will not be registered under the Securities Act, or under the securities
laws of any state. The Consideration Shares are not being so registered in
reliance upon exemptions from the Securities Act and the securities laws of any
state, which are predicated, in part, on the representations, warranties and
agreements of the shareholders contained herein.
(b) The Xxxxx Stockholder represents and warrants that (i) the Xxxxx
Stockholder has business knowledge and experience and is capable of evaluating
the merits and risks of an investment in the Consideration Shares and the
suitability thereof as an investment and (ii) the Consideration Shares will be
acquired solely for investment and not with a view toward resale or
redistribution in violation of the securities laws. The Xxxxx Stockholder
understands that Newmark is not under any obligation to file a registration
statement or to take any other action under the securities laws with respect to
any such securities except as expressly set forth in Article VII hereof.
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(c) The Xxxxx Stockholder has been furnished with (i) the revised
definitive proxy statement filed with the SEC in connection with the annual
meeting of shareholders of Newmark as held on October 1, 2001 and (ii) Newmark's
Annual Report on Form 10-K for the year ended December 31, 2001, filed with the
SEC. Newmark has made available to the Xxxxx Stockholder the opportunity to ask
questions and receive answers concerning the terms and conditions of the
transactions contemplated by this Agreement and to obtain any additional
information which it possesses or could reasonably acquire for the purpose of
verifying the accuracy of information furnished to it as set forth herein or for
the purpose of considering the transactions contemplated hereby.
(d) The Xxxxx Stockholder agrees that the certificates representing the
Consideration Shares may be imprinted with the following legend, the terms of
which are specifically agreed to:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, OR THE SECURITIES LAWS OF ANY STATE, IN RELIANCE
UPON EXEMPTIONS FROM REGISTRATION REQUIREMENTS. WITHOUT SUCH REGISTRATION, SUCH
SHARES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED, EXCEPT
UPON DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE COMPANY THAT REGISTRATION IS NOT REQUIRED FOR SUCH SALE, PLEDGE,
HYPOTHECATION OR TRANSFER OR THE SUBMISSION TO THE COMPANY OF SUCH OTHER
EVIDENCE AS MAY BE SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH SALE,
PLEDGE, HYPOTHECATION OR TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES
ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS OR ANY RULE OR REGULATION
PROMULGATED THEREUNDER.
SECTION 4.08 Brokerage. Except as set forth in Section 3.13 of the Xxxxx
Disclosure Schedule, no investment banker, broker, finder or other Person is
entitled to any brokerage or finder's fee or similar commission in respect of
this Agreement or the transactions contemplated hereby based in any way on
agreements, arrangements or understandings made by or on behalf of the Xxxxx
Stockholder or its Affiliates (other than Newmark).
SECTION 4.09 Operations during the Xxxxx Stockholder's Ownership Period.
Except as disclosed in Section 4.09 of the Xxxxx Disclosure Schedule,
(a) From November 22, 2000 and through the date of this Agreement (the
"Xxxxx Stockholder's Ownership Period), the business of Xxxxx Holdings and the
Xxxxx Subsidiaries has been conducted in the ordinary course of business.
(b) To the Knowledge of the Xxxxx Stockholder, during the Xxxxx
Stockholder's Ownership Period, there has not occurred any liability of any kind
or nature that is not reflected or disclosed in the Financial Statements and
that would be required under GAAP, as consistently applied by Xxxxx Holdings and
the Xxxxx Subsidiaries, to have been reflected or disclosed in such Financial
Statements, other than liabilities which individually or in the aggregate would
not have a Material Adverse Effect on Xxxxx Holdings.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF NEWMARK
Newmark hereby represents and warrants to Xxxxx Holdings and the Xxxxx
Stockholder the following:
SECTION 5.01 Qualification, Organization and Corporate Power. Newmark is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to conduct its business as currently conducted and to own, operate and
lease the assets it now owns, operates or holds under lease. Newmark is duly
qualified and authorized to do business and is in good standing under the laws
of each jurisdiction in which the conduct of its business or the ownership or
leasing of its assets requires it to be so qualified or licensed, except where
the lack of such qualification,
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individually or in the aggregate, would not have a Material Adverse Effect on
Newmark or on the ability of Newmark to consummate the transactions contemplated
by this Agreement.
SECTION 5.02 Authorization, Execution and Delivery. Newmark has full
power and authority to execute and deliver this Agreement and perform its
obligations hereunder. The execution and delivery of this Agreement by Newmark
and the performance of its obligations hereunder have been duly authorized by
all necessary corporate action. This Agreement constitutes a legal, valid and
binding obligation of Newmark, enforceable against Newmark in accordance with
its terms, except as such enforceability may be limited by or subject to (a) any
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to creditors' rights generally and (b) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
SECTION 5.03 Noncontravention. To the Knowledge of Newmark and except as
set forth in Section 5.03 of the Newmark Disclosure Schedule accompanying this
Agreement (the "Newmark Disclosure Schedule"), neither the execution and
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (i) violate any statute, regulation, rule, injunction,
judgment, order, ruling, charge or other restriction of any Governmental Entity,
court or arbitrator to which Newmark is subject, (ii) violate any provisions of
the certificate of incorporation or the bylaws of Newmark or (iii) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any Party the right to accelerate, terminate, modify
or cancel, or require any notice under any agreement, contract, lease, license,
instrument or other arrangement to which Newmark is a party or by which it is
bound or to which any of its assets is subject (or result in the imposition of
any Encumbrance upon any of its assets); except where the violation,
cancellation, failure to give notice or Encumbrance would not have a Material
Adverse Effect on Newmark or on the ability of Newmark to consummate the
transactions contemplated by this Agreement.
SECTION 5.04 Consents. Except as set forth in Section 5.04 of the Newmark
Disclosure Schedule, the execution, delivery or performance of this Agreement by
Newmark of the transactions contemplated hereby do not require any material
consent, approval, clearance, waiver, order or authorization of any Person.
SECTION 5.05 Authorization for Newmark Common Stock. Upon consummation of
the Merger, Newmark will have taken all necessary action to permit it to issue
the Consideration Shares required to be issued pursuant to the terms of this
Agreement. Newmark Shares issued pursuant to the terms of this Agreement and the
Merger will, when issued, be (a) validly issued, fully paid and nonassessable,
(b) not subject to preemptive rights and (c) free and clear of any Encumbrances.
SECTION 5.06 Brokerage. Except as set forth in Section 5.06 of the
Newmark Disclosure Schedule, no investment banker, broker, finder or other
Person is entitled to any brokerage or finder's fee or similar commission in
respect of this Agreement or the transactions contemplated hereby based in any
way on agreements, arrangements or understandings made by or on behalf of
Newmark.
SECTION 5.07 SEC Documents.
(a) Newmark has made all filings with the SEC that it has been required to
make under the Securities Act and the Securities Exchange Act (collectively the
"SEC Documents"). Each of the SEC Documents complied in all material respects
with the requirements of the Securities Exchange Act. None of the SEC Documents,
as of their respective date, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. Newmark has delivered to the Xxxxx
Shareholder a correct and complete copy of each SEC Document, together with all
exhibits and schedules thereto and as amended.
(b) Since December 31, 2001, there has not been any event, occurrence or
circumstance which has had or is reasonably likely to result in a Material
Adverse Effect on Newmark.
SECTION 5.08 Securities Law Matters. Newmark has business knowledge and
experience and is capable of evaluating the merits and risks of entering into
the Merger.
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ARTICLE VI.
COVENANTS
The Parties covenant and agree as follows:
SECTION 6.01 Conduct of Business by Xxxxx Holdings.
(a) Except as expressly contemplated by this Agreement, as referenced in
Section 6.01(a) of the Xxxxx Disclosure Schedule or with the written consent of
Newmark, Xxxxx Holdings shall not, and shall not permit any Xxxxx Subsidiary to:
(i) take any action or enter into any agreement or incur any
obligation which is outside the normal course of business;
(ii) increase the rate or form of compensation payable to any employee
or increase any employee benefits or adopt or amend (other than amendments
that reduce the amounts payable by Xxxxx Holdings and Xxxxx Subsidiaries or
are required by law to preserve the qualified status of a plan or
contract), in any respect, any Employee Benefit Plan, other than increases
in the ordinary course of business of Xxxxx Holdings and the Xxxxx
Subsidiaries for Persons who are not officers of Xxxxx Holdings and the
Xxxxx Subsidiaries, or enter into any employment, severance or similar
contract with any Person (including, without limitation, contracts with
management of Xxxxx Holdings and the Xxxxx Subsidiaries that might require
that payments be made upon the consummation of the transactions
contemplated hereby) or amend any such existing contracts to increase any
amounts payable thereunder or benefits provided thereunder;
(iii) sell, lease or otherwise dispose of any assets or any interests
therein, or enter into, or consent to the entering into of, any agreement
granting to any third Person a right to purchase, lease or otherwise
acquire any assets or interests therein, except in each case in the
ordinary course of business;
(iv) amend its charter or bylaws;
(v) enter into any agreement or incur any obligation, the terms of
which would be violated by the consummation of the transactions
contemplated by this Agreement;
(vi) organize, invest in or acquire an equity interest in any
corporation, partnership, joint venture, association or other entity or
organization except in the ordinary course of business;
(vii) create, incur, assume, guarantee or otherwise become liable or
obligated with respect to any indebtedness for monies borrowed in a
principal amount in excess of $1,000,000 any loan or advance to any Person
(other than trade receivables, and advances to employees for expenses not
to exceed $250,000 in the aggregate at any one time, in the ordinary course
of business);
(viii) issue, deliver, sell or authorize the issuance, delivery or
sale of any stock appreciation rights or of any shares of its capital stock
or other ownership interests of any class, or any securities convertible
into or exchangeable for, or rights, warrants or options to acquire, any
such shares, interests or convertible or exchangeable securities or enter
into any agreement or understanding or offer or propose to do any of the
foregoing or take any preliminary action with respect to such matters; or
(ix) maintain its books of account other than in accordance with past
practice or, except as required by generally accepted accounting
principles, make any change in any of its accounting methods or practices.
(b) Except as expressly contemplated by this Agreement, as referenced in
Section 6.01(b) of the Xxxxx Disclosure Schedule or with the written consent of
Newmark, Xxxxx Holdings shall not, and will not permit Xxxxx Holdings or any
Xxxxx Subsidiary to, (i) declare or pay any dividend on or make any other
distribution in respect of any of its capital stock, (ii) split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of, its
capital stock, or (iii) purchase, redeem or otherwise acquire any shares of its
capital stock.
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SECTION 6.02 Conduct of Business by Newmark. Except as contemplated by
this Agreement or with the written consent of the Xxxxx Stockholder, Newmark
shall not:
(i) take any action or enter into any agreement or incur any
obligation which is outside the normal course of business;
(ii) amend its charter or bylaws;
(iii) except as contemplated in the
Newmark Homes Corp. Annual and
Long-Term Incentive Plan, issue, deliver, sell or authorize the issuance,
delivery or sale of any stock appreciation rights or of any shares of its
capital stock or other ownership interests of any class, or any securities
convertible into, or exchangeable for, or rights, warrants or options to
acquire, any such shares, interests, or convertible or exchangeable
securities or enter into any agreement or understanding or offer or propose
to do any of the foregoing to take any preliminary action with respect to
such matters; or
(iv) (a) declare or pay any dividend on or make any other distribution
in respect of any of its capital stock, (b) split, combine or reclassify
any of its capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu or in substitution for shares of, its
capital stock or (c) purchase, redeem or otherwise acquire any shares of
its capital stock.
SECTION 6.03 Maintenance of Assets and Operations. Each Party shall (a)
carry on its business in the ordinary course consistent with past practices and
in compliance with all applicable laws, rules and regulations, except where the
failure to be in such compliance would not have a Material Adverse Effect on
such Party, (b) use its reasonable efforts to collect its accounts receivable,
(c) use its reasonable efforts to preserve its business organization, maintain
its rights and franchises, keep available the services of its officers and
employees and preserve the goodwill and its relationships with customers,
suppliers and others having business dealings with it, (d) use its reasonable
efforts to preserve in full force and effect all leases, operating agreements,
easements, rights-of-way, Permits, and other agreements which relate to its
assets (other than those expiring by their terms and those whose failure to
preserve would not have a Material Adverse Effect on such Party), (e) use its
reasonable efforts to perform or cause to be performed all of its obligations in
or under any of such leases, agreements and contracts, except where the failure
to perform would not have a Material Adverse Effect on such Party) and (f)
consistent with past practices, use its reasonable efforts to safeguard and
maintain secure all engineering data, reports and other confidential data in its
possession relating to its assets.
SECTION 6.04 Access to Information.
(a) Except to the extent otherwise required by Law and any applicable
confidentiality arrangements, Xxxxx Holdings and Newmark shall, and shall cause
each of their respective officers and employees to, afford to the other, and to
the other's accountants, counsel, financial advisors and other representatives,
reasonable access during the period from the date hereof to the Effective Time
to its properties, books, contracts, commitments and records and,during such
period, Xxxxx Holdings and Newmark shall, and shall cause each of their
respective officers and employees to, furnish promptly to the other all
information concerning its business, properties, financial condition, operations
and personnel as the other may from time to time reasonably request.
(b) Except as required by Law, each of Xxxxx Holdings, Newmark and the
Xxxxx Stockholder shall hold, and cause its respective directors, officers,
employees, accountants, counsel, financial advisors and representatives and
Affiliates to hold, any nonpublic information in confidence. Any investigation
by any Party of the assets and business of the other Party and its Subsidiaries
shall not affect any representations and warranties hereunder or either Party's
right to terminate this Agreement as provided in Article X hereof.
SECTION 6.05 Reasonable Efforts. Upon the terms and subject to the
conditions set forth in this Agreement, each of the Parties agree to use
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the other Parties in doing,
all things necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the Merger, and the other transactions
contemplated by this Agreement, including (i) the obtaining of all necessary
actions or
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nonactions, waivers, consents and approvals from Governmental Entities and the
making of all necessary registrations and filings (including filings with
Governmental Entities, if any) and the taking of all reasonable steps as may be
necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by, any Governmental Entity, (ii) the obtaining of all necessary
consents, approvals or waivers from third parties and (iii) the execution and
delivery of any additional instruments necessary to consummate the transactions
contemplated by this Agreement.
SECTION 6.06 Xxxxx Stockholder Vote. The Xxxxx Stockholder will vote (or
consent with respect to) or cause to be voted (or a consent to be given with
respect to) the Newmark Shares beneficially owned by it or any of its Affiliates
(other than Newmark) or with respect to which it or any of its Affiliates has
the power (by agreement, proxy or otherwise) to cause to be voted (or to provide
a consent) in favor of the adoption and approval of this Agreement.
SECTION 6.07 Tax Allocation Agreement. The Tax Allocation Agreement shall
be terminated as of the Effective Time.
ARTICLE VII.
SPECIAL RIGHTS
SECTION 7.01 Registration Rights. At the Closing, Newmark will enter into
and deliver to the Xxxxx Stockholder a Registration Rights Agreement in
substantially the form attached hereto as Exhibit 7.01 hereto which affords to
the Xxxxx Stockholder certain demand and piggyback registration rights with
respect to its Consideration Shares.
SECTION 7.02 Corporate Name. At the Closing, Newmark's corporate name
will be changed to Technical Olympic USA, Inc. The Xxxxx Stockholder hereby
grants to Newmark its approval and consent to use the "Technical Olympic" name
in any and all geographical regions. Except as disclosed in Section 7.02 of the
Xxxxx Disclosure Schedule, to the Knowledge of the Xxxxx Stockholder the use of
the name "Technical Olympic" by Newmark does not infringe on the rights of any
Person, subject to such claims and infringements as would not, in the aggregate,
give rise to any material liability on Newmark.
ARTICLE VIII.
CONDITIONS TO NEWMARK'S OBLIGATIONS
The obligations of Newmark to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction (or waiver by Newmark) on or
prior to the Closing of all of the following conditions:
SECTION 8.01 Accuracy of Representations and Warranties. The
representations and warranties of Xxxxx Holdings and the Xxxxx Stockholder set
forth in this Agreement (a) to the extent qualified by Material Adverse Effect
or any other materiality qualification, shall be true and correct and (b) to the
extent not qualified by Material Adverse Effect or any other materiality
qualification, shall be true and correct in all material respects, as of the
date when made and at and as of the Closing.
SECTION 8.02 Performance of Covenants and Agreements. Xxxxx Holdings and
the Xxxxx Stockholder shall have duly performed and complied in all material
respects with the covenants, agreements and conditions required by this
Agreement to be performed by or complied with by them prior to or at the
Effective Time.
SECTION 8.03 Consents. All consents and approvals required for the
consummation of the Merger which, if not obtained, would have a Material Adverse
Effect on Xxxxx Holdings or Newmark shall have been obtained and be effective.
SECTION 8.04 Governmental Approvals. All necessary actions or nonactions,
waivers, consents and approvals from Governmental Entities (other than
governmental consents, which the failure to obtain would not prohibit the Merger
or have a Material Adverse Effect on Xxxxx Holdings or Newmark) and the making
of all necessary registrations and filings (including filings with Governmental
Entities, if any) and the taking of
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all reasonable steps as may be necessary to obtain an approval or waiver from,
or to avoid an action or proceeding by, any Governmental Entity shall have been
obtained, made or lapsed and shall be in full force and effect.
SECTION 8.05 Certificates. Newmark shall have received certificates on
behalf of Xxxxx Holdings and the Xxxxx Stockholder, as to compliance with the
matters set forth in Sections 8.01 and 8.02 hereof.
SECTION 8.06 Material Adverse Effect. Since the date of execution of this
Agreement, there shall not have occurred any events or occurrences which have
resulted in a Material Adverse Effect on Xxxxx Holdings.
SECTION 8.07 Legal Proceedings. No preliminary or permanent injunction or
other order, decree or ruling issued by a Governmental Entity, and no rule,
regulation or executive order promulgated or enacted by a Governmental Entity,
shall be in effect which restrains, prohibits, enjoins or otherwise makes
illegal the consummation of the transactions contemplated hereby.
SECTION 8.08 Nasdaq. Any approvals of the Nasdaq Stock Market required
for the common stock of the Surviving Corporation to continue to be listed and
trade on the Nasdaq Stock Market shall have been obtained and be in full force
and effect.
SECTION 8.09 Refinancing. The Refinancing shall have been consummated
with the Xxxxx Credit Facility, Newmark Credit Facility, Ohio Savings Credit
Facility and the other indebtedness listed on Schedule 1.01(a) being paid in
full.
ARTICLE IX.
CONDITIONS TO XXXXX HOLDINGS AND
THE XXXXX STOCKHOLDER'S OBLIGATIONS
The obligations of Xxxxx Holdings and the Xxxxx Stockholder to consummate
the transactions contemplated by this Agreement shall be subject to the
satisfaction (or waiver by Xxxxx Holdings and the Xxxxx Stockholder) on or prior
to the Closing of all of the following conditions:
SECTION 9.01 Accuracy of Representations and Warranties. The
representations and warranties of Newmark set forth in this Agreement (a) to the
extent qualified by Material Adverse Effect or any other materiality
qualification, shall be true and correct and (b) to the extent not qualified by
Material Adverse Effect or any other materiality qualification, shall be true
and correct in all material respects, as of the date when made and at and as of
the Closing.
SECTION 9.02 Performance of Covenants and Agreements. Newmark shall have
duly performed and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed by or
complied with by it prior to or at the Effective Time.
SECTION 9.03 Consents. All consents and approvals required for the
consummation of the Merger which, if not obtained, would have a Material Adverse
Effect on Xxxxx Holdings or Newmark shall have been obtained and be effective.
SECTION 9.04 Governmental Approvals. All necessary actions or nonactions,
waivers, consents and approvals from Governmental Entities (other than
governmental consents) and the making of all necessary registrations and filings
(including filings with Governmental Entities, if any) and the taking of all
reasonable steps as may be necessary to obtain an approval or waiver from, or to
avoid an action or proceeding by, any Governmental Entity shall have been
obtained, made or lapsed and shall be in full force and effect.
SECTION 9.05 Certificates. Xxxxx Holdings and the Xxxxx Stockholder shall
have received certificates on behalf of Newmark, as to compliance with the
matters set forth in Sections 9.01 and 9.02 hereof.
SECTION 9.06 Material Adverse Effect. Except as disclosed or contemplated
in the SEC Documents, since the date of execution of this Agreement, there shall
not have occurred any events or occurrences which have resulted in a Material
Adverse Effect on Newmark.
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SECTION 9.07 Legal Proceedings. No preliminary or permanent injunction or
other order, decree or ruling issued by a Governmental Entity, and no rule,
regulation or executive order promulgated or enacted by a Governmental Entity,
shall be in effect which restrains, prohibits, enjoins or otherwise makes
illegal the consummation of the transactions contemplated hereby.
SECTION 9.08 Nasdaq. Any approvals of the Nasdaq Stock Market required
for the common stock of the Surviving Corporation to continue to be listed and
trade on the Nasdaq Stock Market shall have been obtained.
SECTION 9.09 Refinancing. The Refinancing shall have been consummated
with the Xxxxx Credit Facility, Newmark Credit Facility, Ohio Savings Credit
Facility and the other indebtedness listed on Schedule 1.01(a) being paid in
full.
ARTICLE X.
TERMINATION PRIOR TO CLOSING
SECTION 10.01 Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) By the mutual written consent of Newmark, Xxxxx Holdings and the Xxxxx
Stockholder; or
(b) By any of Newmark, Xxxxx Holdings and the Xxxxx Stockholder in writing
if the Merger shall not have been consummated on or before December 31, 2002,
unless the failure to consummate the Merger is the result of a default by the
Party seeking to terminate this Agreement; or
(c) By Newmark in writing if Xxxxx Holdings or the Xxxxx Stockholder shall
be in material default of any provisions of this Agreement, which default is
continuing ten days after Newmark provides notice thereof to Xxxxx Holdings and
the Xxxxx Stockholder; or
(d) By Xxxxx Holdings or the Xxxxx Stockholder in writing if Newmark shall
be in material default of any provisions of this Agreement, which default is
continuing ten days after the Xxxxx Stockholder provides notice thereof to
Newmark; or
(e) By any of Newmark, Xxxxx Holdings or the Xxxxx Stockholder in writing
if any court of competent jurisdiction or any Governmental Entity shall have
issued an order, decree or ruling enjoining, restraining or otherwise
prohibiting the consummation of the Merger or shall have authorized the filing
or taking of any action seeking to enjoin, restrain or otherwise prohibit the
consummation of the Merger;
SECTION 10.02 Effect on Obligations. Termination of this Agreement
pursuant to this Article X shall terminate all obligations of the Parties
hereunder; provided, however, that termination pursuant to clauses (c) or (d) of
Section 10.01 hereof shall not relieve any defaulting Party from any liability
to the other Parties hereto.
ARTICLE XI.
MISCELLANEOUS
SECTION 11.01 Limited Survival.
(a) The representations and warranties of the Parties contained in this
Agreement shall terminate and not survive the Closing provided that the
representations and warranties made by the Xxxxx Stockholder in Section 4.09
shall survive 180 days from Closing.
(b) Any claim by Newmark against the Xxxxx Stockholder with respect to a
breach of the representation or warranty of the Engle Stockholder must be made
by Newmark in writing and must be given to the Xxxxx Stockholder on or prior to
180 days from Closing.
(c) The Xxxxx Stockholder shall have the option of satisfying any claim
under this Section 11.01 by delivering cash to Newmark or by returning
Consideration Shares (or shares into which such Consideration
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Shares are converted) to Newmark with a valuation equal to the amount of such
claim (as same may be agreed or adjudicated). For purposes hereof, the
Consideration Shares then held by the Engle Stockholder shall be valued at the
greater of (i) $29,343.89156 which is the per share value attributable to said
shares in the Merger and (ii) the average closing price of a share of Common
Stock of Newmark on the Nasdaq Stock Market or such other exchange on which such
share may be traded for the fifteen trading days immediately preceding the
payment in satisfaction of such claim.
SECTION 11.02 Entire Agreement. This Agreement and the other agreements
contemplated hereby constitute the sole understanding of the Parties with
respect to the matters provided for herein and supersede any previous agreements
and understandings between the Parties with respect to the subject matter
hereof. No amendment, modification or alteration of the terms or provisions of
this Agreement shall be binding unless the same shall be in writing and duly
executed by the Parties hereto.
SECTION 11.03 Successors and Assigns. This Agreement will inure to the
benefit of and be binding upon the Parties hereto and their respective
successors and assigns, heirs, executors, administrators and legal
representatives. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the Parties hereto without the
prior written consent of the other Parties hereto.
SECTION 11.04 Expenses. Whether or not the transactions contemplated by
this Agreement are consummated, other than as expressly provided for herein,
each of the Parties hereto shall pay the fees and expenses of its respective
counsel, accountants and other experts, and all other expenses incurred by such
Party incident to the negotiation, preparation and execution of this Agreement
and the consummation of the transactions contemplated hereby.
SECTION 11.05 Invalidity. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic and legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any Party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the Parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the Parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the extent
possible.
SECTION 11.06 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument.
SECTION 11.07 Headings; Construction and References.
(a) The headings of the Sections and paragraphs of this Agreement and of
the Schedules hereto are included for convenience only and shall not be deemed
to constitute part of this Agreement or to affect the construction or
interpretation hereof or thereof.
(b) Words used in this Agreement, regardless of the number or gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context shall require. Unless otherwise specified, all references in this
Agreement to Sections, paragraphs or clauses are deemed references to the
corresponding Sections, paragraphs or clauses in this Agreement, and all
references in this Agreement to Schedules are references to the corresponding
Schedules attached to this Agreement.
SECTION 11.08 Third Party Beneficiaries. Except as specifically provided
in Section 11.01, this Agreement is not intended to confer upon any other Person
any rights or remedies hereunder.
SECTION 11.09 Modification and Waiver. Any of the terms or conditions of
this Agreement may be waived in writing at any time by the Party which is
entitled to the benefits thereof. No waiver of any of the provisions of this
Agreement shall be deemed to or shall constitute a waiver of any other
provisions hereof (whether or not similar).
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SECTION 11.10 Notices. Any notice, request, instruction or other document
to be given hereunder by any Party hereto to any other Party shall be in writing
and delivered personally, by facsimile (with receipt confirmed) or by registered
or certified mail, postage prepaid:
if to Xxxxx Holdings to:
Xxxxx Holdings Corp.
0000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxx Xxxxx, Xxxxx 00000
Attn: Xxxxx XxXxxx
Fax: 000-000-0000
with a copy to:
Technical Olympic, Inc.
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxxx
Fax: 000-000-0000
if to Newmark to:
Newmark Homes Corp.
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxx 00000
Attn: Xxxxxx Xxxxxxx
Fax: 000-000-0000
with a copy to:
Xxxxxxx & Xxxxx L.L.P.
600 Xxxxxx, 0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Fax: 000-000-0000
if to the Xxxxx Stockholder, to:
Technical Olympic, Inc.
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxxx
Fax: 000-000-0000
with a copy to:
Xxxxxx & Xxxxxx L.L.P.
1001 Xxxxxx, 0000 Xxxxx Xxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: T. Xxxx Xxxxx
Fax: 000-000-0000
or at such other address for a Party as shall be specified by like notice. Any
notice which is delivered personally in the manner provided herein shall be
deemed to have been duly given to the Party to whom it is directed upon actual
receipt by such Party (or its agent for notices hereunder). Any notice which is
addressed and mailed in the manner herein provided shall be conclusively
presumed to have been duly given to the Party to which it is addressed at the
close of business, local time of the recipient, on the fifth day after the day
it is so placed in the mail. Any notice which is sent by facsimile shall be
deemed to have been duly given to the Party to which it is addressed upon
telephonic confirmation of the same as provided herein. A copy of any notices
delivered by facsimile shall promptly be mailed in the manner herein provided to
the Party to which such notice was given.
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SECTION 11.11 Governing Law; Interpretation. Except to the extent the
provisions of the Delaware General Corporation Law are required by the laws of
the State of
Texas to be applied to the Merger, this Agreement shall be
construed in accordance with and governed by the laws of the State of
Texas,
without regard to the conflicts or choice of law rules of the State of
Texas.
IN WITNESS WHEREOF, each of the Parties hereto have caused this Agreement
to be executed on its behalf as of the date first above written.
XXXXX HOLDINGS CORP.
By: /s/ XXXXXXXXXXX STENGOS
------------------------------------
Name: Xxxxxxxxxxx Stengos
Title: President and Chairman of the
Board
NEWMARK HOMES CORP.
By: /s/ XXXXXX X. XXXXXXX
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
TECHNICAL OLYMPIC, INC.
By: /s/ XXXXXXXXXXX STENGOS
------------------------------------
Name: Xxxxxxxxxxx Stengos
Title: President and Chairman of the
Board
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