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Agreement and Plan of Merger

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Title:

Agreement and Plan of Merger

Entities:

Bear, Stearns & Co. Inc.; Impac Commercial Holdings Inc; Skadden, Arps, Slate, Meagher & Flom LLP; Willkie Farr & Gallagher

Date:

2000

Size:

Preview shows 17KB of 78KB total

Price:

$49

ID:

#1557703

► Plans ► Agreements ► Agreements & Plans of Merger
► Financial
► Services ► Legal

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y41310ex99-e_1.txt

AGREEMENT AND PLAN OF MERGER

by and among

FORTRESS INVESTMENT CORP.

FORTRESS IMPAC ACQUISITION CORP.

and

IMPAC COMMERCIAL HOLDINGS, INC.

October 6, 2000

AGREEMENT AND PLAN OF MERGER

ARTICLE I

THE OFFER AND MERGER

Section 1.1 The Offer............................................................................. 2

Section 1.2 Company Actions....................................................................... 3

Section 1.3 The Merger............................................................................ 3

Section 1.4 Effective Time........................................................................ 4

Section 1.5 Closing............................................................................... 4

Section 1.6 Directors and Officers of the Surviving Corporation................................... 4

Section 1.7 Subsequent Actions.................................................................... 5

Section 1.8 Stockholders' Meeting; Short-Form Merger.............................................. 5

Section 1.9 Amendment of Rights Agreement......................................................... 6

Section 1.10 Effect of the Merger................................................................. 6

ARTICLE II

CONVERSION OF SECURITIES

Section 2.1 Conversion of Capital Stock........................................................... 7

Section 2.2 Surrender of Certificates............................................................. 8

Section 2.3 Dissenting Shares..................................................................... 10

Section 2.4 Option Plans.......................................................................... 10

ARTICLE III

COVENANTS

Section 3.1 Competing Acquisition Proposals....................................................... 11

Section 3.2 State Takeover Laws .................................................................. 12

Section 3.3 Directors' and Officers' Insurance and Indemnification ............................... 12

Section 3.4 Approvals and Consents; Cooperation................................................... 14

ARTICLE IV

CONDITIONS PRECEDENT

Section 4.1 Conditions to Each Party's Obligation to Effect the Merger............................ 14

ARTICLE V

TERMINATION

Section 5.1 Termination........................................................................... 15

Section 5.2 Effect of Termination................................................................. 17

ARTICLE VI

MISCELLANEOUS

Section 6.1 Amendment and Modification............................................................ 18

Section 6.2 Brokers............................................................................... 18

Section 6.3 Notices............................................................................... 19

Section 6.4 Interpretation........................................................................ 20

Section 6.5 Counterparts.......................................................................... 21

Section 6.6 Entire Agreement; Third Party Beneficiaries........................................... 21

Section 6.7 Severability.......................................................................... 21

Section 6.8 Governing Law......................................................................... 21

Section 6.9 Enforcement........................................................................... 21

Section 6.10 Assignment........................................................................... 22

Section 6.11 Expenses............................................................................. 22

Section 6.12 Headings............................................................................. 22

Section 6.13 Extension; Waiver.................................................................... 22

ANNEX A CONDITIONS TO THE OFFER.......................................................... A-1

INDEX OF DEFINED TERMS

Acquiring Person ........................................... 1.9

Acquisition Proposal ....................................... 3.1(c)

Agreement .................................................. Preamble

Articles of Merger ......................................... 1.4

Board ...................................................... Preamble

Certificates ............................................... 2.2(b)

Claim ...................................................... 3.3(a)

Closing .................................................... 1.5

Closing Date ............................................... 1.5

Company .................................................... Preamble

Company Acquisition Agreement .............................. 3.1(b)

Company Common Stock ....................................... Preamble

Company Notice ............................................. 3.1(a)

Convertible Stock .......................................... Preamble

Dissenting Shares .......................................... 2.3

Effective Time ............................................. 1.4

Excess Share Provision Waiver .............................. 1.2

Exchange Act ............................................... 1.1(a)

Indemnified Parties ........................................ 3.3(a)

Indemnified Party .......................................... 3.3(a)

Independent Committee ...................................... Preamble

Independent Counsel ........................................ 3.3(b)

Initial Expiration Date .................................... 1.1(a)

Merger ..................................................... Preamble

Merger Agreement ........................................... Annex A

Merger Consideration ....................................... 2.1(b)

MGCL ....................................................... Preamble

Offer ...................................................... Preamble

Offer Price ................................................ Preamble

Option ..................................................... 2.4(a)

Option Plan ................................................ 2.4(1)

Parent ..................................................... Preamble

Paying Agent ............................................... 2.2(a)

Potential Acquiror ......................................... 3.1(a)

Proxy Statement ............................................ 1.8(a)

Public Stockholders ........................................ Preamble

Purchaser .................................................. Preamble

SDAT ....................................................... 1.4

Section 3-602 Approval ..................................... 1.2

Shares ..................................................... Preamble

Special Meeting ............................................ 1.8(a)

Superior Proposal .......................................... 3.1(d)

Surviving Corporation ...................................... 1.3

Third Party Acquiror ....................................... 5.2(b)

Transaction Expenses ....................................... 5.2(b)

AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER, dated as of October 6, 2000

(this "Agreement"), by and among Fortress Investment Corp., a Maryland

corporation ("Parent"), Fortress Impac Acquisition Corp., a Maryland corporation

and a wholly-owned subsidiary of Parent ("Purchaser"), and Impac Commercial

Holdings, Inc., a Maryland corporation (the "Company").

WHEREAS, the Board of Directors of Parent, the Board of

Directors of Purchaser and the Committee of Independent Directors, consisting

entirely of nonmanagement directors unaffiliated with Parent or Purchaser (the

"Independent Committee"), of the Board of Directors of the Company (the "Board")

have determined that it is advisable and in the best interests of their

respective corporations for Purchaser to acquire the Company upon the terms and

subject to the conditions set forth herein;

WHEREAS, in furtherance of such acquisition, Purchaser has

agreed to commence a tender offer (the "Offer") to purchase for cash any and all

of the issued and outstanding shares of common stock, par value $0.01 per share,

of the Company ("Company Common Stock") not already owned by Parent, Purchaser

or any wholly owned subsidiary of Purchaser (collectively, the "Shares"), at a

price of $7.55 per share, net to the seller in cash (such price, or such higher

price per share as may be paid in the Offer, being referred to herein as the

"Offer Price"), less any amounts required by law to be withheld and paid to

governmental entities, upon the terms and subject to the conditions of this

Agreement;

WHEREAS, the Board, acting upon the unanimous recommendation

of the Independent Committee, the Board of Directors of Parent and the Board of

Directors of Purchaser, have each approved the making of the Offer, and the

Board has determined to recommend that stockholders of the Company (other than

Parent, Purchaser and their respective affiliates) (the "Public Stockholders")

tender their Shares pursuant to the Offer;

WHEREAS, Parent is the owner of 832,400 shares of Company

Common Stock and 479,999 shares of the Company's Series B 8.5% Cumulative

Convertible Preferred Stock ($25 liquidation preference per share) (the

"Convertible Stock") which is convertible into 1,683,635 shares of Company

Common Stock, constituting in the aggregate 31.5% of the Company's outstanding

voting stock and Parent has agreed to contribute cash, the 832,400 shares of

Company Common Stock

it already owns and the Convertible Stock to Purchaser in order to facilitate

the making of the Offer and the other transactions contemplated by this

Agreement;

WHEREAS, it is further proposed that following the

consummation of the Offer, Parent will cause Purchaser to merge with and into

the Company (the "Merger") in accordance with the Maryland General Corporation

Law, as amended (the "MGCL");

WHEREAS, the Independent Committee has determined that this

Agreement and the transactions contemplated hereby, including the Offer and the

Merger, are advisable and in the best interests of the Public Stockholders, and

the Board, acting upon the unanimous recommendation of the Independent

Committee, (i) has approved the Offer, the Merger, this Agreement and the other

transactions contemplated hereby and (ii) has recommended that the Public

Stockholders approve this Agreement and the Merger; and

WHEREAS, in furtherance of such transactions, the Offer, the

Merger and the other transactions contemplated hereby have been approved by the

Board of Directors of Purchaser and by all required corporate action of Parent

upon the terms and subject to the conditions set forth herein;

NOW, THEREFORE, in consideration of the foregoing and the

agreements set forth herein, and other good and valuable consideration, the

receipt and sufficiency of which are hereby acknowledged, the parties hereto

agree as follows:

ARTICLE I

THE OFFER AND MERGER

Section 1.1 The Offer.

(a) As promptly as practicable Purchaser shall

commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of

1934, as amended (the "Exchange Act")), the Offer to purchase for cash any and

all of the Shares at the Offer Price. Purchaser shall, on the terms and subject

to the prior satisfaction or waiver of the conditions of the Offer, accept for

payment and pay for all Shares validly tendered and not withdrawn pursuant to

the Offer as soon as it is legally permitted to do so under applicable law. The

Offer shall be made by means of

an offer to purchase containing the terms set forth in this Agreement and having

only the conditions set forth in Annex A hereto. Purchaser shall not decrease

the Offer Price or decrease the number of Shares sought in the Offer, change the

form of consideration to be paid for Shares pursuant to the Offer, or amend or

add any other term or condition of the Offer (including the conditions set forth

in Annex A hereto), in each case, in any manner adverse to the holders of the

Shares without the prior written consent of the Company. The initial expiration

date of the Offer shall be the twenty-fifth business day following the date that

the Offer is commenced within the meaning of Rule 14d-2 under the Exchange Act

(the "Initial Expiration Date"). The Company and the Independent Committee and

their counsel shall be given a reasonable opportunity to review and comment on

any documents that will be filed with the SEC in connection with the Offer and

related transactions prior to such filing.

(b) Parent shall cause Purchaser to have available on

a timely basis the funds necessary to accept for payment, and pay for, any

shares that Purchaser becomes obligated to pay for pursuant to the Offer or

Article I hereof.

Section 1.2 Company Actions. The Company hereby approves of

and consents to the Offer and represents and warrants that the Independent

Committee has determined that this Agreement and the transactions contemplated

hereby, including the Offer and the Merger, are advisable and in the best

interests of the Public Stockholders, and the Board, at a meeting duly called

and held and acting on the unanimous recommendation of the Independent

Committee, has (i) duly approved this Agreement and the transactions

contemplated hereby, including the Offer and the Merger; and (ii) resolved to

recommend that the Public Stockholders accept the Offer, tender their Shares

thereunder and approve this Agreement and the Merger. The Company further

represents and warrants that by resolution of the Board, dated May 5, 1999,

Parent and its affiliates are permanently exempt from (x) the ownership limits

contained in Article VII, Section 7.2.1 of the Company's Charter, which

generally prohibits any party from beneficially owning in excess of 9.8% of the

Company's capital stock (the "Excess Share Provision Waiver") and (y) the

limitations on business combinations with interested stockholders under Section

3-602 of the MGCL (the "Section 3-602 Approval").

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