EXHIBIT 1
[CONFORMED COPY]
AGREEMENT
AND
PLAN OF MERGER
by and among
CENDANT CORPORATION,
PHH CORPORATION,
AVIS ACQUISITION CORP.
and
AVIS GROUP HOLDINGS, INC.
dated as of November 11, 2000
TABLE OF CONTENTS
PAGE
ARTICLE I
THE MERGER
1.1 The Merger.........................................................2
1.2 Effective Time.....................................................2
1.3 Closing of the Merger..............................................3
1.4 Effects of the Merger..............................................3
1.5 Certificate of Incorporation and By-laws...........................3
1.6 Directors..........................................................3
1.7 Officers...........................................................4
1.8 Subsequent Actions.................................................4
ARTICLE II
CONVERSION OF SHARES
2.1 Conversion of Shares...............................................4
2.2 Delivery of Merger Consideration...................................5
2.3 Dissenting Shares..................................................7
2.4 Treatment of Company Options.......................................8
2.5 Adjustments........................................................9
2.6 Stockholders Meeting...............................................9
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.1 Organization......................................................12
3.2 Authority Relative to this Agreement..............................12
3.3 Vote Required.....................................................13
3.4 State Takeover Statutes...........................................13
3.5 Capitalization....................................................13
3.6 Subsidiaries......................................................15
3.7 No Conflict; Required Filings and Consents........................15
3.8 SEC Documents and Financial Statements............................16
3.9 No Undisclosed Liabilities........................................17
3.10 Absence of Certain Changes........................................17
3.11 Proxy Statement...................................................17
3.12 Litigation........................................................17
3.13 Taxes.............................................................18
3.14 Employee Benefit Plans............................................19
3.15 Compliance with Applicable Laws...................................21
3.16 Material Contracts................................................22
3.17 Environmental Laws................................................23
3.18 Intellectual Property.............................................25
3.19 Labor Matters.....................................................26
3.20 Brokers or Finders................................................27
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
PARENT, PHH AND MERGER SUB
4.1 Organization......................................................27
4.2 Authority Relative to this Agreement..............................27
4.3 No Conflict; Required Filings and Consents........................28
4.4 Proxy Statement...................................................29
4.5 Litigation........................................................29
4.6 Financing.........................................................29
4.7 Brokers or Finders................................................29
ARTICLE V
COVENANTS
5.1 Conduct of Business by the Company Pending
the Merger........................................................30
5.2 No Solicitation...................................................33
5.3 Access to Information; Confidentiality............................36
5.4 Consents; Approvals...............................................37
5.5 Indemnification and Insurance.....................................37
5.6 Employee Benefits.................................................40
5.7 Note Tender Offer.................................................41
5.8 Notification of Certain Matters...................................42
5.9 Further Action....................................................42
5.10 Public Announcements..............................................42
5.11 Transfer Taxes....................................................43
5.12 Financial Statements..............................................43
5.13 Section 16 Matters................................................43
ARTICLE VI
CONDITIONS TO THE MERGER
6.1 Conditions to Each Party's Obligation to Effect
the Merger........................................................43
6.2 Conditions to Obligations of the Company to Effect
the Merger........................................................44
6.3 Conditions to Obligations of Parent and Merger Sub to
Effect the Merger.................................................45
ARTICLE VII
TERMINATION
7.1 Termination.......................................................46
7.2 Effect of Termination.............................................48
7.3 Fees and Expenses.................................................49
ARTICLE VIII
GENERAL PROVISIONS
8.1 Nonsurvival of Representations, Warranties and Agreements.........50
8.2 Notices...........................................................50
8.3 Assignment; Binding Effect........................................52
8.4 Entire Agreement..................................................53
8.5 Amendment.........................................................53
8.6 Governing Law; Consent to Jurisdiction............................53
8.7 Counterparts......................................................53
8.8 Headings..........................................................54
8.9 Interpretation....................................................54
8.10 Waivers...........................................................54
8.11 Incorporation of Annex and Disclosure Letters.....................55
8.12 Severability......................................................55
8.13 Enforcement of Agreement..........................................55
8.14 Waiver of Jury Trial..............................................55
8.15 Execution.........................................................56
8.16 Date for any Action...............................................56
8.17 Parties in Interest...............................................56
8.18 Certain Definitions...............................................56
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated
as of November 11, 2000, is by and among Cendant Corporation, a Delaware
corporation ("Parent"), PHH Corporation, a Maryland corporation and an
indirect wholly owned Subsidiary (as defined below) of Parent ("PHH"), Avis
Acquisition Corp., a Delaware corporation and a wholly owned Subsidiary of
PHH ("Merger Sub"), and Avis Group Holdings, Inc., a Delaware corporation
(the "Company").
RECITALS
WHEREAS, Cendant Car Holdings, Inc., a Delaware corporation
and an indirect, wholly owned Subsidiary of Parent ("Car Holdings"), is the
beneficial owner of 5,535,800 shares of class A common stock, par value
$.01 per share, of the Company (the "Company Common Stock"), which
represents approximately 17.8% of the outstanding shares of Company Common
Stock;
WHEREAS, Parent and PHH have proposed that PHH acquire (the
"Acquisition") all of the issued and outstanding shares of Company Common
Stock not beneficially owned (within the meaning of Rule 13d-3 of the
Exchange Act (as defined below)) by Parent, PHH, Merger Sub, Car Holdings
or any other direct or indirect Subsidiary of Parent (collectively, the
"Acquisition Group") (such outstanding shares of Company Common Stock not
owned by the Acquisition Group being referred to herein as the "Shares");
WHEREAS, in furtherance of the Acquisition, it is proposed
that Merger Sub shall be merged with and into the Company, with the Company
continuing as the surviving corporation (the "Merger"), in accordance with
the General Corporation Law of the State of Delaware (the "DGCL") and upon
the terms and subject to the conditions set forth herein;
WHEREAS, a special committee of the board of directors of
the Company (the "Board"), consisting entirely of nonmanagement directors
of the Company who are not Affiliates (as defined below) of the Acquisition
Group (the "Independent Committee"), was established for, among other
purposes, the purpose of evaluating the Acquisition and making a
recommendation to the Board with regard to the Acquisition;
WHEREAS, the Independent Committee has received the opinion
of Xxxxxx Xxxxxxx & Co., Incorporated ("Xxxxxx Xxxxxxx"), financial advisor
to the Independent Committee, that, as of the date hereof, the
consideration to be received by the holders of Shares pursuant to the
Merger is fair to such holders from a financial point of view;
WHEREAS, the Board, based on the unanimous recommendation of
the Independent Committee, has, in light of and subject to the terms and
conditions set forth herein, (i) determined that (x) the Merger
Consideration (as defined below), is fair to the holders of Shares and (y)
the Merger is advisable and in the best interests of the Company and the
holders of Shares; (ii) approved, and declared the advisability of, this
Agreement and (iii) determined to recommend that the stockholders of the
Company vote to adopt this Agreement;
WHEREAS, the respective boards of directors of Parent, PHH
and Merger Sub have approved this Agreement; the board of directors of
Merger Sub has declared the advisability of the Agreement; and PHH, as the
sole stockholder of Merger Sub, has adopted this Agreement; and
WHEREAS, the Company, Parent, PHH and Merger Sub desire to
make certain representations, warranties, covenants and agreements in
connection with the Merger and the other transactions contemplated hereby
(collectively, the "Transactions") and also to prescribe various conditions
to the Merger.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants, representations, warranties and agreements contained
herein, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER. At the Effective Time (as defined below),
and upon the terms and subject to the conditions of this Agreement and in
accordance with the DGCL, Merger Sub shall be merged with and into the
Company. Following the Merger, the Company shall continue as the surviving
corporation (the "Surviving Corporation") and as a wholly owned subsidiary
of PHH, and the separate corporate existence of Merger Sub shall cease in
accordance with the DGCL.
1.2 EFFECTIVE TIME. Subject to the provisions of this
Agreement, the parties shall cause the Merger to be consummated by filing a
certificate of merger (the "Certificate of Merger") with the Secretary of
State of the State of Delaware in such form as required by, and executed in
accordance with, the relevant provisions of the DGCL as soon as practicable
on or after the Closing Date (as defined below). The Merger shall become
effective upon such filing or at such time thereafter as is agreed by
Parent and the Independent Committee and provided in the Certificate of
Merger (the "Effective Time," and the date of such effectiveness shall be
the "Effective Date").
1.3 CLOSING OF THE MERGER. The closing of the Merger (the
"Closing") shall take place at the offices of Skadden, Arps, Slate, Xxxxxxx
& Xxxx LLP, Four Times Square, New York, New York, at 10:00 a.m. (local
time) on a date to be specified by the parties, which shall be no later
than the second Business Day after satisfaction or waiver (as permitted by
this Agreement and applicable law) of all of the conditions set forth in
Article VI hereof (other than those conditions that by their nature are to
be satisfied at the Closing, but subject to the fulfillment or waiver of
those conditions) (the "Closing Date"), unless another time, date or place
is agreed by Parent and the Independent Committee in writing.
1.4 EFFECTS OF THE MERGER. The Merger shall have the effects
set forth in Section 259 of the DGCL. Without limiting the generality of
the foregoing, and subject thereto, at the Effective Time, all properties,
rights, privileges, powers and franchises of the Company and Merger Sub
shall vest in the Surviving Corporation, and all debts, liabilities and
duties of the Company and Merger Sub shall become the debts, liabilities
and duties of the Surviving Corporation.
1.5 CERTIFICATE OF INCORPORATION AND BY-LAWS. At the
Effective Time, the Amended and Restated Certificate of Incorporation of
the Company shall be amended and restated in its entirety to read as set
forth in Annex A and, as so amended, shall be the certificate of
incorporation of the Surviving Corporation until thereafter amended as
provided by law and such certificate of incorporation, subject to the
provisions of Section 5.5. The by-laws of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the by-laws of the
Surviving Corporation until thereafter amended in accordance with its
terms, and as provided by applicable law, and the certificate of
incorporation of the Surviving Corporation, subject to the provisions of
Section 5.5.
1.6 DIRECTORS. The directors of Merger Sub at the Effective
Time, from and after the Effective Time, shall be the directors of the
Surviving Corporation, each to hold office in accordance with the
certificate of incorporation and by-laws of the Surviving Corporation until
such director's successor is duly elected and qualified in the manner
provided in the Surviving Corporation's certificate of incorporation and
by-laws, or as otherwise provided by applicable law.
1.7 OFFICERS. The officers of the Company at the Effective
Time, from and after the Effective Time, shall be the officers of the
Surviving Corporation until such officer's successor is duly elected or
appointed and qualified in the manner provided in the Surviving
Corporation's certificate of incorporation and by-laws, or as otherwise
provided by applicable law.
1.8 SUBSEQUENT ACTIONS. If, at any time after the Effective
Time, the Surviving Corporation shall determine or be advised that any
deeds, bills of sale, assignments, assurances or any other actions or
things are necessary or desirable to vest, perfect or confirm of record or
otherwise in the Surviving Corporation its right, title or interest in, to
or under any of the rights, properties or assets of the Company acquired or
to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger or otherwise to carry out this Agreement, the
officers and directors of the Surviving Corporation shall be authorized to
execute and deliver, in the name and on behalf of either the Company or
Merger Sub, all such deeds, bills of sale, instruments of conveyance,
assignments and assurances and to take and do, in the name and on behalf of
the Company, Merger Sub or otherwise, all such other actions and things as
may be necessary or desirable to vest, perfect or confirm any and all
right, title and interest in, to and under such rights, properties or
assets in the Surviving Corporation or otherwise to carry out this
Agreement.
ARTICLE II
CONVERSION OF SHARES
2.1 CONVERSION OF SHARES. At the Effective Time, by virtue
of the Merger, and without any action on the part of the holder thereof:
(a) subject to Section 2.3, each Share issued and
outstanding immediately prior to the Effective Time shall be converted into
the right to receive an amount in cash, without interest, equal to
thirty-three United States Dollars ($33.00) (the "Merger Consideration") in
the manner provided in Section 2.2 hereof;
(b) each Share issued and held in the Company's treasury or
held by any Subsidiary of the Company immediately prior to the Effective
Time shall, by virtue of the Merger, cease to be outstanding and shall be
cancelled and retired without payment of any consideration therefor;
(c) each share of Company Common Stock held by any member of
the Acquisition Group immediately prior to the Effective Time shall be
converted into and become one fully paid and nonassessable share of common
stock of the Surviving Corporation; and
(d) each share of common stock, par value $.01 per share, of
Merger Sub ("Merger Sub Common Stock") issued and outstanding immediately
prior to the Effective Time shall be converted into and become one fully
paid and nonassessable share of common stock of the Surviving Corporation.
2.2 DELIVERY OF MERGER CONSIDERATION.
(a) Immediately prior to the Effective Time, Parent and PHH
shall deposit or cause to be deposited in trust (the "Payment Fund") with
an agent designated by Parent and reasonably satisfactory to the
Independent Committee (the "Payment Agent") for the benefit of the holders
of certificates representing the Shares issued and outstanding as of the
Effective Time (collectively, "Certificates"), the aggregate Merger
Consideration to be paid in respect of the Shares. The Payment Fund shall
not be used for any other purpose. The Payment Fund shall be invested by
the Payment Agent, as directed by the Surviving Corporation, in (i)
obligations of or guaranteed by the United States, and (ii) certificates of
deposit, bank repurchase agreements and bankers' acceptances of any bank or
trust company organized under federal law or under the law of any state of
the United States or of the District of Columbia that has capital, surplus
and undivided profits of at least $1 billion or in money market funds which
are invested substantially in such investments. Any net earnings with
respect thereto shall be paid to the Surviving Corporation as and when
requested by the Surviving Corporation.
(b) As soon as reasonably practicable after the Effective
Time, Parent shall instruct the Payment Agent to mail to each holder of
record of Shares immediately prior to the Effective Time (excluding any
Shares cancelled pursuant to Section 2.1 hereof):
(i) a letter of transmittal (the "Letter of
Transmittal") (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon delivery
of such Certificates to the Payment Agent and shall be in such form and
have such other provisions as Parent reasonably specifies), and
(ii) instructions for use in effecting the surrender
of each Certificate in exchange for the Merger Consideration with respect
to each of the Shares formerly represented thereby.
(c) Parent and the Surviving Corporation shall cause the
Payment Agent to pay to the holders of a Certificate, as soon as
practicable after receipt of any Certificate (or in lieu of any such
Certificate which has been lost, stolen or destroyed, an affidavit of lost,
stolen or destroyed share certificates (including customary indemnity or
bond against loss) in form and substance reasonably satisfactory to Parent)
together with the Letter of Transmittal, duly executed, and such other
documents as Parent or the Payment Agent reasonably request, in exchange
therefor a check in the amount equal to the Merger Consideration multiplied
by the number of Shares represented by such Certificate. No interest shall
be paid or accrued on any cash payable upon the surrender of any
Certificate. Each Certificate surrendered in accordance with the provisions
of this Section 2.2(c) shall be cancelled forthwith.
(d) In the event of a transfer of ownership of Shares which
is not registered in the transfer records of the Company, the Merger
Consideration may be paid to the transferee only if (i) the Certificate
representing such Shares surrendered to the Payment Agent in accordance
with Section 2.2(c) hereof is properly endorsed for transfer or is
accompanied by appropriate and properly endorsed stock powers and is
otherwise in proper form to effect such transfer, (ii) the Person
requesting such transfer pays to the Payment Agent any transfer or other
taxes payable by reason of such transfer or establishes to the satisfaction
of the Payment Agent that such taxes have been paid or are not required to
be paid, and (iii) such Person establishes to the reasonable satisfaction
of Parent that such transfer would not violate any applicable federal or
state securities laws.
(e) Subject to Section 2.3, at and after the Effective Time,
each holder of a Certificate that represented issued and outstanding Shares
immediately prior to the Effective Time shall cease to have any rights as a
stockholder of the Company, except for the right to surrender his or her
Certificate in exchange for the Merger Consideration multiplied by the
number of Shares represented by such Certificate. At the Effective Time,
the stock transfer books of the Company shall be closed, except as
otherwise provided by applicable law, and no transfer of Shares shall be
made on the stock transfer books of the Surviving Corporation. If, after
the Effective Time, Certificates are presented to the Surviving Corporation
or the Payment Agent for any reason, they shall be cancelled and exchanged
as provided in this Article II, except as otherwise provided by applicable
law.
(f) The Merger Consideration paid in the Merger shall be net
to the holder of Shares in cash, and without interest thereon, subject to
reduction only for any applicable withholding Taxes (as defined below).
(g) Promptly following the date which is 180 days after the
Effective Date, the Payment Agent shall deliver to the Surviving
Corporation all cash (including any interest received with respect
thereto), Certificates and other documents in its possession relating to
the transactions contemplated hereby, and the Payment Agent's duties shall
terminate. Thereafter, each holder of a Certificate (other than
Certificates representing Dissenting Shares (as defined below)) may
surrender such Certificate to the Surviving Corporation and (subject to any
applicable abandoned property, escheat or similar law) receive in
consideration therefor (and only as general creditors thereof) the
aggregate Merger Consideration relating thereto, without any interest
thereon. Notwithstanding the foregoing, no member of the Acquisition Group,
nor the Surviving Corporation, the Company or the Payment Agent shall be
liable to a holder of a Certificate for any Merger
Consideration properly delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
(h) Any portion of the Merger Consideration made available
to the Payment Agent pursuant to Section 2.2(a) to pay for Shares for which
appraisal rights have been perfected shall be returned to Parent or PHH
upon demand.
2.3 DISSENTING SHARES. Notwithstanding anything in this
Agreement to the contrary, Shares that are issued and outstanding
immediately before the Effective Time and that are held by stockholders who
have not voted in favor of the adoption of this Agreement or consented
thereto in writing and who have properly exercised appraisal rights with
respect thereto in accordance with Section 262 of the DGCL shall not be
converted into the right to receive the Merger Consideration as provided in
Section 2.1, unless such holders fail to perfect or withdraw or otherwise
lose their rights to appraisal. Instead, ownership of such Shares shall
entitle the holder thereof to receive the consideration determined pursuant
to Section 262 of the DGCL; provided, however, that if such holder fails to
perfect or effectively withdraws such holder's right to appraisal and
payment under the DGCL, each of such Shares shall thereupon be deemed to
have been converted, at the Effective Time, into the right to receive the
Merger Consideration, without any interest thereon, upon surrender of the
Certificate or Certificates in the manner provided in Section 2.2 hereof.
The Company shall give Parent (i) prompt notice of any demands (or
withdrawals of demands) for appraisal of any Shares received by the Company
pursuant to the applicable provisions of the DGCL and any other instruments
served pursuant to the DGCL and received by the Company and (ii) the
opportunity to direct all negotiations and proceedings with respect to
demands for appraisal under the DGCL. The Company shall not, except with
the prior written consent of Parent, make any payment with respect to any
such demands for appraisal or offer to settle, or settle, any such demands.
2.4 TREATMENT OF COMPANY OPTIONS.
(a) Subject to Section 2.4(b), the Company shall take all
action necessary so that each option to purchase shares of Company Common
Stock (each, an "Option") granted under the Company's 1997 Stock Option
Plan and 2000 Incentive Compensation Plan (collectively, the "Assumed
Option Plans" and, individually, an "Assumed Option Plan") outstanding and
unexercised immediately prior to the Effective Time shall be cancelled
immediately prior to the Effective Time in exchange for the right to
receive an amount in cash equal to the product of (i) the number of shares
of Company Common Stock subject to such Option immediately prior to the
Effective Time and (ii) the excess, if any, of the Merger Consideration
over the per share exercise price of such Option, to be delivered by the
Surviving Corporation promptly following the Effective Time. All applicable
withholding taxes attributable to the payments made hereunder shall be
deducted from the amounts payable under this Section 2.4. Notwithstanding
the foregoing, or Section 2.4(b), any Option with an exercise price greater
than the Merger Consideration immediately prior to the Effective Time shall
be automatically converted into an Assumed Option in accordance with
Section 2.4(c), whether or not the holder thereof shall have made a
Retention Election with respect to such Option in accordance with Section
2.4(b). The Company shall use its commercially reasonable efforts to obtain
the consent of each holder of Options to the foregoing treatment of such
Options to the extent required under the Assumed Option Plans pursuant to
which such Options were granted.
(b) Notwithstanding the provisions of Section 2.4(a), each
person who, on or prior to the Effective Date, is the holder of an
outstanding and unexercised Option shall be entitled, with respect to all
or any portion of such holder's Option, to make an unconditional election
to the Company in writing (a "Retention Election") on or prior to the
Effective Date, to convert, as of the Effective Time, such portion of their
Options as may be specified in such Retention Election into options to
purchase shares of common stock, par value $.01 per share, of Parent
("Cendant Common Stock"), as set forth in subsection (c) below, in lieu of
receiving a cash payment, if any, in consideration for the cancellation of
such portion of their Options in the manner described in Section 2.4(a).
(c) Any portion of an Option with respect to which a timely
Retention Election has been delivered to the Company (the "Elected
Portion") shall, at the Effective Time, become and represent an option to
purchase Cendant Common Stock; and Parent shall assume each such option
(hereinafter, an "Assumed Option") subject to the terms of the applicable
Assumed Option Plan, in each case as heretofore amended or restated, as the
case may be, and the agreement evidencing the grant thereunder of such
Assumed Option; provided, however, that from and after the Effective Time,
(i) the number of shares of Cendant Common Stock purchasable upon exercise
of such Assumed Option shall be equal to the number of shares of Company
Common Stock that were purchasable under such Assumed Option immediately
prior to the Effective Time multiplied by the Exchange Ratio (as defined
below), and rounded up or down to the nearest whole share, and (ii) the per
share exercise price under each such Assumed Option shall be adjusted by
dividing the per share exercise price of each such Assumed Option by the
Exchange Ratio, and rounding up or down to the nearest whole cent;
provided, however, that in the case of any Options intended to qualify as
"incentive stock options" under Section 422 of the Code, the adjustments
pursuant to this Section 2.4(c) shall be determined in order to comply with
Section 424(a) of the Code. The terms of the Assumed Option shall be the
same as the original Option except that all references to the Company shall
be deemed to be references to Parent. The terms of each Assumed Option
shall, to the extent provided in the applicable Assumed Option Plan, be
subject to further adjustment as appropriate to reflect any stock split,
stock dividend, recapitalization or other similar transaction with respect
to Cendant Common Stock on or subsequent to the Effective Time. The
"Exchange Ratio" shall be equal to the ratio obtained by dividing the
amount of the Merger Consideration by the average closing price of one
share of Cendant Common Stock on the New York Stock Exchange for the ten
(10) consecutive trading days immediately preceding the Effective Date.
(d) The parties acknowledge that each Option to purchase
shares of Company Common Stock under the Assumed Option Plans shall become
fully vested and exercisable in connection with consummation of the Merger
in accordance with and subject to the terms of such Option and the relevant
Assumed Option Plan.
2.5 ADJUSTMENTS. If, during the period between the date of
this Agreement and the Effective Time, any change in the outstanding Shares
shall occur in accordance with the terms of this Agreement, including by
reason of any reclassification, recapitalization, stock split or
combination, exchange or readjustment of Shares, or stock dividend thereon
with a record date during such period, the cash payable pursuant to the
Offer, the Merger Consideration and any other amounts payable pursuant to
this Agreement shall be appropriately adjusted.
2.6 STOCKHOLDERS MEETING.
(a) The Company, acting through the Board, shall, in
accordance with and to the extent permitted by applicable law:
(i) as promptly as practicable after the date hereof,
call, give notice of, convene and hold a special meeting of its
stockholders (the "Stockholders Meeting") for the purpose of considering
and taking action upon the adoption of this Agreement;
(ii) prepare and file with the Securities and Exchange
Commission (the "SEC") a preliminary proxy statement relating to this
Agreement and the Merger as promptly as practicable after the date hereof,
and use its commercially reasonable efforts to obtain and furnish the
information required to be included in such proxy statement and, after
consultation with Parent, respond promptly to any comments made by the SEC
and its staff with respect to the preliminary proxy statement and cause a
definitive proxy statement relating to this Agreement and the Merger (such
proxy statement, together with any and all amendments or supplements
thereto, the "Proxy Statement") to be mailed to its stockholders at the
earliest practicable time;
(iii) include in the Proxy Statement the recommendations
of the Independent Committee and the Board that stockholders of the Company
vote in favor of the adoption of this Agreement (as the same may be
amended, modified or withdrawn in accordance with Section 5.2(d) hereof);
and
(iv) use its reasonable best efforts to solicit from
holders of Shares proxies in favor of the adoption of this Agreement and
take all other action necessary or advisable to secure, at the Stockholders
Meeting, the affirmative vote of (A) the holders of a majority of the
outstanding shares of Company Common Stock (voting as one class, with each
share of Company Common Stock having one vote) and (B) the holders of a
majority of the votes cast at the Stockholders Meeting by holders of Shares
in favor of the adoption of this Agreement (the "Company Stockholder
Approval"). The Company shall cause all Shares for which valid proxies have
been submitted and not revoked to be voted at the Stockholders Meeting in
accordance with the instructions on such proxies.
(b) Once the Stockholders Meeting has been called and
noticed, the Company shall not postpone or adjourn the Stockholders Meeting
(other than for the absence of a quorum) without the prior written consent
of Parent.
(c) Parent, PHH and Purchaser agree to promptly provide the
Company with the information concerning Parent, PHH and Purchaser and their
respective Affiliates required to be included in the Proxy Statement. At
the Stockholders Meeting, Parent, PHH and Purchaser shall vote, or cause to
be voted, all shares of Company Common Stock beneficially owned by them or
any of their respective Subsidiaries in favor of the adoption of this
Agreement.
(d) Notwithstanding anything to the contrary contained in
this Agreement, in the event that the Independent Committee changes its
recommendation of this Agreement and the Merger in accordance with Section
5.2(d) hereof and this Agreement has not been terminated pursuant to
Article VII hereof, then, without limiting the Company's ability to
disclose the recommendations of the Board and the Independent Committee in
the Proxy Statement:
(i) in performing its obligations under this Section
2.6, the Company shall not be obligated to solicit from holders of Shares
proxies in favor of the adoption of this Agreement or to take all action
necessary or advisable to secure, at the Stockholders Meeting, the Company
Stockholders Approval, but instead shall be obligated to solicit
impartially from holders of Shares proxies to be voted at the Stockholders
Meeting (making no instructions to vote in favor or against, but merely to
return a completed proxy card) and to take all action necessary or
advisable to maximize, at the Stockholders Meeting, the number of proxies
submitted by holders of Shares;
(ii) the Company shall remain obligated to vote all
unspecified but executed proxies submitted by holders of Shares in favor of
the adoption of this Agreement;
(iii) Parent and its affiliates and agents shall have
the right, as a participant in the Company's solicitation of proxies, to
communicate with and solicit from holders of Shares the submission of
Company proxies in favor of the adoption of this Agreement and to take all
actions necessary or advisable to secure, at the Stockholders Meeting, the
Company Stockholders Approval and otherwise to act as a participant in the
Company's solicitation; and
(iv) The Company shall cooperate with Parent in
connection with any actions taken by it pursuant to clause (d)(ii) above
and shall make any filings under Federal securities laws required in
connection therewith.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent, PHH and
Merger Sub as of the date of this Agreement as follows:
3.1 ORGANIZATION. The Company and each of its Subsidiaries
is a corporation or other entity duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation or
organization and has all requisite corporate or other power and authority
to own, lease and operate its properties and to carry on its business as it
is now being conducted. The Company and each of its Subsidiaries is duly
qualified or licensed and in good standing to do business in each
jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification or
licensing necessary where the failure to be so duly qualified or licensed
or in good standing would, individually or in the aggregate, result in a
Material Adverse Effect (as defined below). As used herein, the term
"Material Adverse Effect" means a material adverse change in, or effect on,
the business, condition (financial or otherwise) or results of operations
of the Company and its Subsidiaries taken as a whole, but shall not include
any change, event, effect, occurrence or circumstance arising in connection
with or as a result of (i) the announcement or performance of the
Transactions contemplated by this Agreement, in and of themselves, or (ii)
Parent's announcement or other communication of Parent of the plans or
intentions of Parent with respect to any conduct of any business of the
Company or any of its Subsidiaries.
3.2 AUTHORITY RELATIVE TO THIS AGREEMENT.
(a) The Company has the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
Transactions, including, without limitation, the Merger. The execution and
delivery of this Agreement by the Company, and the consummation of the
Transactions to be consummated by it, have been duly authorized by the
Board and no other corporate proceedings on the part of the Company are
required to authorize this Agreement or to consummate the Transactions to
be consummated by it, other than, with respect to the Merger, (i) the
Company Stockholder Approval and (ii) the filing and recordation of the
Certificate of Merger in accordance with the DGCL. This Agreement has been
duly executed and delivered by the Company and (assuming due authorization,
execution and delivery hereof by Parent, PHH and Merger Sub) constitutes a
valid and binding agreement of the Company, enforceable against the Company
in accordance with its terms, except that (i) such enforcement may be
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws, now or hereafter in effect, relating to creditors'
rights generally and (ii) equitable remedies of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought.
(b) The Company hereby represents and warrants that (i) the
Independent Committee has been duly authorized and constituted; (ii) the
Board, based on the recommendation of the Independent Committee at a
meeting duly called and held, has (A) determined that (x) the Merger
Consideration is fair to the holders of Shares and (y) the Merger is
advisable and in the best interests of the Company and the holders of
Shares, (B) approved and declared the advisability of, this Agreement and
(C) determined to recommend that the stockholders of the Company vote to
adopt this Agreement in accordance with the provisions of the DGCL. The
Independent Committee and the Board have received the written opinion (the
"Fairness Opinion") of Xxxxxx Xxxxxxx to the effect that, as of the date
hereof, the Merger Consideration to be paid to the holders of Shares is
fair to such holders from a financial point of view, and, as of the date
hereof, such Fairness Opinion has not been withdrawn. The Company has
delivered a true, correct and complete copy of the Fairness Opinion to
Parent.
3.3 VOTE REQUIRED. The affirmative vote of the holders of a
majority of the outstanding shares of Company Common Stock is the only vote
of holders of any class or series of the Company's capital stock required
to approve the Merger and adopt this Agreement under the DGCL, the
Company's Amended and Restated Certificate of Incorporation and the
Company's Amended and Restated By- Laws.
3.4 STATE TAKEOVER STATUTES. The Company has elected not to
be governed by Section 203 of the DGCL in accordance with the provisions of
Section 203(b) of the DGCL. The restrictions on business combinations
contained in Section 203 of the DGCL do not apply to the Merger or the
other Transactions nor shall they apply to any member of the Acquisition
Group as a result of this Agreement or the Transactions.
3.5 CAPITALIZATION.
(a) The authorized capital stock of the Company consists of
100,000,000 shares of Company Common Stock, 15,000,000 shares of class B
common stock, par value $.01 per share of the Company (the "Class B Common
Stock") and 20,000,000 shares of preferred stock, par value $.01 per share,
of the Company ("Preferred Stock"). As of October 31, 2000, there were (i)
31,156,172 shares of Company Common Stock issued and outstanding, (ii)
4,768,828 shares of Company Common Stock held in the Company's treasury,
(iii) 9,000,000 shares of Company Common Stock reserved for issuance upon
the exercise of outstanding Options, (iv) no shares of Company Common Stock
reserved for issuance upon the conversion of the Class B Common Stock, (v)
no shares of Class B Common Stock issued, (vi) no shares of Class B Common
Stock reserved for issuance upon conversion of the series A preferred
stock, par value $.01 per share, of Avis Fleet Leasing and Management
Corporation, a Texas corporation and a subsidiary of the Company (the "Avis
Fleet") and series B preferred stock, par value $.01 per share of Avis
Fleet, and (vii) no shares of Preferred Stock issued. All issued and
outstanding shares of Company Common Stock are, and all shares of Company
Common Stock issuable upon exercise of Options or conversion of the Class B
Common Stock shall be, when issued in accordance with the respective terms
thereof, duly authorized and validly issued, fully paid and nonassessable,
and free of preemptive rights.
(b) Except as set forth in subsection (a) above or in
Section 3.5(b) of the disclosure letter delivered by the Company to Parent
prior to the execution of this Agreement (the "Company Disclosure Letter"),
the Company does not have any shares of its capital stock issued or
outstanding and there are no outstanding subscriptions, options, warrants,
calls, convertible securities, rights or other agreements or commitments
(i) to which the Company or any of its Subsidiaries is a party of any
character relating to the issued or unissued capital stock or other equity
interests of the Company or any of its Subsidiaries, or (ii) obligating the
Company or any Subsidiary of the Company to (A) issue, transfer or sell any
shares of capital stock or other equity interests of the Company or any
Subsidiary of the Company or securities convertible into or exchangeable
for such shares or equity interests, (B) grant, extend or enter into any
such subscription, option, warrant, call, convertible securities or other
right, agreement, arrangement or commitment to repurchase,(C) redeem or
otherwise acquire any such shares of capital stock or other equity
interests or (D) provide a material amount of funds to, or make any
material investment (in the form of a loan, capital contribution or
otherwise) in, any Person.
(c) Neither the Company nor any of its Subsidiaries has
outstanding bonds, debentures, notes or other obligations, the holders of
which have the right to vote (or which are convertible into or exercisable
for securities having the right to vote) with the stockholders of the
Company or such Subsidiary on any matter. Except as set forth in Section
3.5(c) of the Company Disclosure Letter, there are no voting trusts or
other agreements or understandings to which the Company or any of its
Subsidiaries is a party with respect to the voting of the capital stock or
other equity interest of the Company or any of its Subsidiaries.
3.6 SUBSIDIARIES.
(a) Section 3.6(a) of the Company Disclosure Letter sets
forth a complete and accurate list of each Subsidiary of the Company.
Except as set forth in Section 3.6 of the Company Disclosure Letter, all
outstanding equity securities or other equity interests in each Subsidiary
of the Company (i) are owned of record and beneficially by the Company or
another of the Company's wholly owned Subsidiaries, free of all liens,
claims, charges or encumbrances, and (ii) have been duly authorized, and
are validly issued, fully paid and nonassessable, and free of preemptive
rights. Section 3.6(a) of the Company Disclosure Letter sets forth all debt
securities in excess of $500,000 issued by the Company or any Subsidiary of
the Company.
(b) Except as set forth in Section 3.6(b) of the Company
Disclosure Letter, neither the Company nor any Subsidiary of the Company
owns, directly or indirectly, a material amount of any capital stock,
interest or equity investment or debt security in any corporation,
partnership, limited liability company, joint venture, business, trust or
other entity other than interests in another Subsidiary of the Company.
3.7 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) Except for (i) applicable requirements of (A) the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), (B) the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and any similar foreign competition laws applicable hereto, and (C)
any state securities or blue sky laws applicable hereto, (ii) the filing
and recordation of the Certificate of Merger, as required by the DGCL, and
(iii) as set forth in Section 3.7(a) of the Company Disclosure Letter,
neither the execution and delivery of this Agreement by the Company nor the
consummation by the Company of the Transactions contemplated
hereby shall require on the part of the Company or any Subsidiary of the
Company any filing with, or obtaining of, any permit, authorization,
consent or approval of, or any notice to, any court, tribunal, legislative,
executive or regulatory authority or agency (a "Governmental Entity"),
where the failure to so file or obtain would, individually or in the
aggregate, result in a Material Adverse Effect or would materially impair
the Company's ability to consummate the Transactions.
(b) Except as set forth in Section 3.7(b) of the Company
Disclosure Letter, neither the execution and delivery of this Agreement by
the Company nor the consummation by the Company of the Transactions will
(i) conflict with or result in any breach of any provision of the Amended
and Restated Certificate of Incorporation of the Company or the Amended and
Restated By-laws of the Company or equivalent organizational documents of
any Subsidiary of the Company, (ii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default
under, or give rise to any right of termination, cancellation, suspension,
modification or acceleration of any obligation under, or result in the
creation of a lien under, any of the terms, conditions or provisions of, or
otherwise require the consent or waiver of, or notice to, any other party
under, any bond, note, mortgage, indenture, other evidence of indebtedness,
guarantee, license, agreement or other contract or instrument ("Contract")
to which the Company or any Subsidiary of the Company is a party or by
which any of them or any of their respective properties or assets is bound,
(iii) violate any law, statute, rule, regulation, order, writ, injunction
or decree applicable to the Company, any Subsidiary of the Company or any
of their respective properties or assets, or (iv) require the Company to
pay any existing indebtedness where such violations, breaches, defaults or
rights, in the case of clause (ii) or (iii), would, individually or in the
aggregate, result in a Material Adverse Effect or would materially impair
the Company's ability to consummate the Transactions.
3.8 SEC DOCUMENTS AND FINANCIAL STATEMENTS.
(a) The Company has filed all forms, reports and documents
required to be filed with the SEC pursuant to the Exchange Act since
December 31, 1998 (collectively, the "Company SEC Reports"). The Company
SEC Reports, as of their respective filing dates, (i) did not contain any
untrue statement of a material fact or omit 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, and (ii) complied in all material respects with the then
applicable requirements of the Exchange Act, the Securities Act of 1933, as
amended (the "Securities Act") and the applicable rules and regulations
thereunder. No Subsidiary of the Company is required to file any forms,
reports or other documents with the SEC.
(b) The consolidated financial statements (including all
related notes) included in the Company SEC Reports fairly present the
consolidated financial position of the Company and its consolidated
Subsidiaries as of the respective dates thereof, and the results of
operations and the changes in cash flows of the Company and its
consolidated Subsidiaries for the respective periods set forth therein.
Each of the consolidated financial statements (including all related notes)
included in the Company SEC Reports has been prepared in accordance with
generally accepted accounting principles consistently applied ("GAAP"),
except as otherwise noted therein, and subject, in the case of interim
financial statements, to normal and recurring year-end audit adjustments.
3.9 NO UNDISCLOSED LIABILITIES. Except as and to the extent
disclosed in Section 3.9 of the Company Disclosure Letter or reflected or
reserved against in the Company's consolidated balance sheets included in
the Company SEC Reports, and except for liabilities and obligations
incurred in the ordinary course of business, consistent with past practice
since December 31, 1999, neither the Company nor any Subsidiary of the
Company has any liabilities or obligations of any nature, whether or not
accrued, contingent or otherwise, that would be required by GAAP to be
reflected on a consolidated balance sheet of the Company and its
Subsidiaries (or in the notes thereto).
3.10 ABSENCE OF CERTAIN CHANGES. Except as contemplated by
this Agreement or set forth in Section 3.10 of the Company Disclosure
Letter or in the Form 10-Q of the Company filed with respect to the quarter
ended June 30, 2000, since June 30, 2000, (a) the businesses of the Company
and its Subsidiaries have been conducted in the ordinary course of
business, consistent with past practice, (b) neither the Company nor any
Subsidiary of the Company has taken any action which, if taken after the
date hereof, would violate Section 5.1 hereof if taken without the approval
of Parent, and (c) there has not occurred any event, circumstance or
condition which, individually or together with all such events,
circumstances or conditions, has resulted or would result in a Material
Adverse Effect.
3.11 PROXY STATEMENT. None of the information supplied by
the Company for inclusion or incorporation by reference in the Proxy
Statement shall, at the time it is filed with the SEC, at the time it is
first mailed to the Company's stockholders, or at the time of the
Stockholders Meeting, contain any untrue statement of a material fact or
omit 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 are made, not misleading, except that no representation or
warranty is made by the Company as to any information supplied by Parent,
PHH or Merger Sub to the Company for inclusion or incorporation by
reference in the Proxy Statement. The Proxy Statement shall comply as to
form in all material respects with the requirements of the Exchange Act and
the rules and regulations promulgated thereunder.
3.12 LITIGATION. Except as specifically disclosed in the
Company SEC Reports or set forth in Section 3.12 of the Company Disclosure
Letter, there is no action, suit, proceeding, inquiry or investigation
pending or, to the knowledge of the Company, threatened against or
involving the Company or any of its Subsidiaries, at law or in equity, by
or before any Governmental Entity which (i), as of the date hereof,
questions or challenges the validity of this Agreement or which (ii), if
adversely determined, would result in a Material Adverse Effect or would
materially impair or delay the ability of the Company to consummate the
Transactions to be consummated by it.
3.13 TAXES. Except as set forth in Section 3.13 of the
Company Disclosure Letter:
(a) Each of the Company and its Subsidiaries has (i) duly
and timely filed (or there has been filed on their behalf) with the
appropriate Governmental Entities all material Tax Returns (as defined
below) required to be filed by it and all such material Tax Returns are
true, correct and complete; (ii) duly paid in full (or there has been duly
paid on its behalf) all Taxes (as defined below) shown on such Tax Returns
that are due and payable; and (iii) made adequate provision, in accordance
with GAAP (or adequate provision has been made on its behalf), for the
payment of all current Taxes not yet due.
(b) Each of the Company and its Subsidiaries has complied in
all material respects with all applicable laws, rules and regulations
relating to the payment and withholding of Taxes and has, within the time
and the manner prescribed by law, withheld and paid over the proper
Governmental Entities all material amounts required to be so withheld and
paid over.
(c) Neither the Company nor any of its Subsidiaries has
requested an extension of time within which to file any material Tax Return
in respect of a taxable year which has not since been filed and no
outstanding waivers or comparable consents regarding the application of the
statute of limitations with respect to material Taxes or material Tax
Returns has been given by or on behalf of the Company or any of its
Subsidiaries.
(d) No material federal, state, local or foreign audits,
examinations or other administrative court proceedings have been commenced
or, to the Company's knowledge, are threatened with regard to any material
Taxes or material Tax Returns of the Company or any of its Subsidiaries. No
written notification has been received by the Company or any of its
Subsidiaries that such an audit, examination or other proceeding is pending
or threatened with respect to any material Taxes due from or with respect
to or attributable to the Company or any of its Subsidiaries or any
material Tax Return filed by or with respect to the Company or any of its
Subsidiaries.
(e) Neither the Company nor any of its Subsidiaries is a
party to any agreement, plan, contract or arrangement that could result,
separately or in the aggregate, in a payment of (i) any "excess parachute
payments" within the meaning of Section 280G of the Internal Revenue Code
of 1986, as amended (the "Code"), or (ii) any amount that would not be
deductible under Section 162(m) of the Code.
(f) Neither the Company nor any of its Subsidiaries is a
party to any material tax sharing, tax indemnity or other agreement or
arrangement.
(g) There are no material liens for Taxes upon the assets of
the Company or any of its Subsidiaries except liens for Taxes not yet due
and payable.
(h) For purposes of this Agreement, "Taxes" shall mean any
and all taxes, charges, fees, levies or other assessments, including
income, gross receipts, excise, real or personal property, sales,
withholding, social security, occupation, use, service, service use, value
added, license, net worth, payroll, franchise, transfer and recording
taxes, fees and charges, imposed by the United States Internal Revenue
Service (the "IRS") or any taxing authority (whether domestic or foreign
including any state, local or foreign government or any subdivision or
taxing agency thereof (including a United States possession)), whether
computed on a separate, consolidated, unitary, combined or any other basis;
and such term shall include any interest, penalties or additional amounts
attributable to, or imposed upon, or with respect to, any such taxes,
charges, fees, levies or other assessments. For purposes of this Agreement,
"Tax Return" shall mean any report, return, document, declaration or other
information or filing required to be supplied to any taxing authority or
jurisdiction (foreign or domestic) with respect to Taxes.
3.14 EMPLOYEE BENEFIT PLANS.
(a) Each material employee benefit plan, program,
arrangement or agreement, including each "employee benefit plan," within
the meaning of Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), in each case, maintained by the Company or
any of its Subsidiaries, or to which the Company or any of its Subsidiaries
contributes or is required to contribute (each, a "Plan"; collectively,
"Plans") is listed in Section 3.14(a) of the Company Disclosure Letter.
None of the Company or any of its Subsidiaries has any commitment or formal
plan to create any additional employee benefit plan or modify or change any
existing Plan (except as required to maintain the tax-qualified status of
any Plan intended to qualify under Section 401(a) of the Code).
(b) Except as disclosed in the Company SEC Reports or
Section 3.14(b) of the Company Disclosure Letter or to the extent that any
breach of the representations set forth in this sentence would not have a
Material Adverse Effect: (i) each Plan (other than any Plan that is a
"multiemployer plan," within the meaning of Section 4001(a)(3) of ERISA (a
"Multiemployer Plan")) is in compliance with applicable law and has been
administered and operated in all respects in accordance with its terms;
(ii) each Plan (other than any Multiemployer Plan) which is intended to be
"qualified" within the meaning of Section 401(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), has received a favorable
determination letter regarding its tax-qualified status from the IRS and
the Company is not aware of any circumstances that could reasonably be
expected to result in the revocation of such letter; (iii) the actuarial
present value of the accumulated plan benefits (whether or not vested)
under each Plan covered by Title IV of ERISA (other than any Multiemployer
Plan) as of the close of its most recent plan year did not exceed the fair
value of the assets allocable thereto; (iv) no Plan covered by Title IV of
ERISA (other than any Multiemployer Plan) has been terminated and no
proceedings have been instituted to terminate or appoint a trustee to
administer any such plan; (v) no "reportable event" (as defined in Section
4043 of ERISA) has occurred with respect to any Plan covered by Title IV of
ERISA (other than any Multiemployer Plan); (vi) no Plan (other than any
Multiemployer Plan) subject to Section 412 of the Code or Section 302 of
ERISA nor any such employee benefit plan sponsored or maintained by any
entity that, together with the Company, would be deemed a "single employer"
within the meaning of Section 4001(b) of ERISA (an "ERISA Affiliate") has
incurred any accumulated funding deficiency within the meaning of Section
412 of the Code or Section 302 of ERISA, or obtained a waiver of any
minimum funding standard or an extension of any amortization period under
Section 412 of the Code or Section 303 or 304 of ERISA; (vii) the Company
and each Subsidiary of the Company have made all contributions to each Plan
required by the terms of each such Plan or any collectively bargained
agreement; (viii) neither the Company nor any Subsidiary of the Company has
incurred any unsatisfied withdrawal liability under Part 1 of Subtitle E of
Title IV of ERISA to any Multiemployer Plan; (ix) no Plan provides medical,
surgical, hospitalization, death or similar benefits (whether or not
insured) for employees or former employees of the Company or any of its
Subsidiaries for periods extending beyond their retirement or other
termination of service, other than (1) coverage mandated by applicable law,
(2) death benefits under any "pension plan," or (3) benefits the full cost
of which is borne by the current or former employee (or his or her
beneficiary); (x) neither the Company nor any of its Subsidiaries nor, to
the knowledge of the Company, any other "disqualified person" or "party in
interest" (as defined in Section 4975(e)(2) of the Code and Section 3(14)
of ERISA, respectively) has engaged in any transactions in connection with
any Plan that would result in the imposition of a penalty pursuant to
Section 502(i) of ERISA or a tax pursuant to Section 4975 of the Code; (xi)
there has been no failure of a Plan that is a group health plan (as defined
in Section 5000(b)(1) of the Code) to meet the requirements of Section
4980B(f) of the Code with respect to a qualified beneficiary (as defined in
Section 4980B(g) of the Code); (xii) there are not pending or, to the
Company's knowledge, threatened, claims by or on behalf of any Plan, by any
employee or beneficiary covered under any such Plan or otherwise involving
any such Plan (other than routine claims for benefits payable in the
ordinary course, and appeals of denied claims); and (xiii) no liability
under Title IV or Section 302 of ERISA has been incurred by the Company or
any ERISA Affiliate that has not been satisfied in full, and no condition
exists that could reasonably be expected to present a material risk to the
Company or any ERISA Affiliate of incurring any such liability, other than
liability for premiums due the Pension Benefit Guaranty Corporation (which
premiums have been paid when due).
(c) The Company has heretofore delivered or made available
to Parent true and complete copies of each Plan and any amendments thereto,
any related trust or other funding vehicle, any summaries required under
ERISA or the Code, the most recent annual reports filed with the IRS, and
the most recent determination letter received from the IRS with respect to
each Plan intended to qualify under Section 401(a) of the Code.
(d) Except as set forth in Section 3.14(d) of the Company
Disclosure Letter, the consummation of the Transactions shall not, either
alone or in combination with another event, (i) entitle any current or
former employee or officer of the Company or any of its Subsidiaries to
severance pay, unemployment compensation or any other payment or benefit,
except as expressly provided in this Agreement, or (ii) accelerate the time
of payment or vesting, or increase the amount of compensation due any such
employee or officer.
3.15 COMPLIANCE WITH APPLICABLE LAWS. Except as set forth in
Section 3.15 of the Company Disclosure Letter, each of the Company and its
Subsidiaries, and their respective properties, assets and operations, are
in compliance in all material respects with all applicable statutes, laws,
rules, regulations, judgments, decrees, orders, arbitration awards,
franchises, permits or licenses or other governmental authorizations or
approvals which are material to the business and operations of the Company
or its Subsidiaries. Except as set forth in Section 3.15 of the Company
Disclosure Letter, the Company and its Subsidiaries hold all licenses,
franchises, ordinances, authorizations, permits, certificates, variances,
exemptions, concessions, leases, rights of way, easements, instruments,
orders and approvals, domestic or foreign ("Permits"), required for the
ownership of the assets and operation of the businesses of the Company and
its Subsidiaries where the failure of which to hold would, individually or
in the aggregate, result in a Material Adverse Effect. Except as set forth
in Section 3.15 of the Company Disclosure Letter, all Permits of the
Company and its Subsidiaries required under any statute, law, rule or
regulation of any Governmental Entity are in full force and effect where
the failure to be in full force and effect would have a Material Adverse
Effect.
3.16 MATERIAL CONTRACTS.
(a) Except as set forth in Section 3.16(a) of the Company
Disclosure Letter, neither the Company nor any Subsidiary of the Company is
a party to, or bound by, any Contract which is material to the Company and
its Subsidiaries, taken as a whole (a "Company Material Contract").
Notwithstanding the foregoing, each of the following Contracts shall be a
Company Material Contract and shall be set forth in Section 3.16 of the
Disclosure Schedule:
(i) any contracts or agreements under which the
Company or any Subsidiary of the Company has any outstanding indebtedness,
obligation or liability for borrowed money or the deferred purchase price
of property or has the right or obligation to incur any such indebtedness,
obligation or liability in excess of $500,000;
(ii) any bonds or agreements of guarantee or
indemnification in which the Company or any Subsidiary of the Company acts
as surety, guarantor or indemnitor with respect to any obligation (fixed or
contingent) in excess of $500,000, other than any such guarantees of the
obligations of the Company or any Subsidiary of the Company;
(iii) any noncompete agreements to which the Company,
any Subsidiary of the Company or any Affiliate thereof is a party;
(iv) any partnership and joint venture agreements; and
(v) any Contract that provides for the payment of any
amount or entitles any Person to receive any other benefit or exercise any
other right as a result of the execution, delivery or performance of this
Agreement, or the consummation of the Transactions, including the Merger.
(b) Neither the Company nor any Subsidiary of the Company is
in breach of or default under the terms of any Company Material Contract
where such breach or default would have a Material Adverse Effect. To the
knowledge of the Company, no other party to any Company Material Contract
is in breach of or default under the terms of any Company Material Contract
where such breach or default would have a Material Adverse Effect. Each
Company Material Contract is a valid and binding obligation of the Company
or the Subsidiary of the Company which is party thereto and, to the
knowledge of the Company, of each other party thereto, and is in full force
and effect, except that (i) such enforcement may be subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws,
now or hereafter in effect, relating to creditors' rights generally and
(ii) equitable remedies of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
3.17 ENVIRONMENTAL LAWS.
(a) Except as set forth in Section 3.17(a) of the Company
Disclosure Letter, each of the Company and its Subsidiaries is (i) in
compliance in all material respects with all applicable Environmental Laws
(as defined below), which compliance includes the possession by the Company
and its Subsidiaries of all Permits and other governmental authorizations
required under applicable Environmental Laws, and (ii) in compliance with
the terms and conditions of such Permits where the failure to be in
compliance would result in a liability or obligation of the Company or any
of its Subsidiaries of any nature, whether or not accrued, contingent or
otherwise, in an amount exceeding $500,000 individually, and $5,000,000 in
the aggregate. Except as set forth in Section 3.17(a) of the Company
Disclosure Letter, neither the Company nor any of its Subsidiaries has
received any communication or written notice, whether from a Governmental
Entity, citizens group, employee or otherwise, that alleges that the
Company or any of its Subsidiaries is not in compliance with applicable
Environmental Laws, where the failure to be in compliance would result in a
liability or obligation of the Company or any of its Subsidiaries of any
nature, whether or not accrued, contingent or otherwise, in an amount
exceeding $500,000 individually, and $5,000,000 in the aggregate and, to
the best knowledge of the Company and its Subsidiaries after due inquiry,
there are no circumstances that may prevent or interfere with such
compliance in the future, where the failure to be in compliance would
result in a liability or obligation of the Company or any of its
Subsidiaries of any nature, whether or not accrued, contingent or
otherwise, in an amount exceeding $500,000 individually, and $5,000,000 in
the aggregate.
(b) Except as set forth in Section 3.17(b) of the Company
Disclosure Letter, there is no Environmental Claim (as defined below)
which, if adversely determined, would result in a liability or obligation
of the Company or any of its Subsidiaries, whether or not accrued,
contingent or otherwise, in an amount exceeding $500,000 individually, and
$5,000,000 in the aggregate, pending or threatened against the Company or
any of its Subsidiaries or, to the best knowledge of the Company and its
Subsidiaries after due inquiry, against any person or entity whose
liability for any Environmental Claim the Company or any of its
Subsidiaries has or may have retained or assumed either contractually or by
operation of law which, if adversely determined, would result in a
liability or obligation of the Company or any of its Subsidiaries, whether
or not accrued, contingent or otherwise, in an amount exceeding $500,000
individually, and $5,000,000 in the aggregate.
(c) Except as set forth in Section 3.17(c) of the Company
Disclosure Letter, there are no past or present actions, activities,
circumstances, conditions, events or incidents, including the Release (as
defined below) of any Hazardous Materials (as defined below), that could
form the basis of any material Environmental Claim (as defined below)
against the Company or any of its Subsidiaries or, to the best knowledge of
the Company and its Subsidiaries after due inquiry, against any Person or
entity whose liability for any material Environmental Claim the Company or
any of its Subsidiaries has or may have retained or assumed either
contractually or by operation of law.
(d) Without in any way limiting the generality of the
foregoing, except as set forth in Section 3.17(d) of the Company Disclosure
Letter, all underground storage tanks owned, operated, or leased by the
Company or any of its Subsidiaries and which are subject to regulation
under the federal Resource Conservation and Recovery Act (or equivalent
state or local law regulating underground storage tanks) meet the technical
standards prescribed at Title 40 Code of Federal Regulations Part 280 which
became effective December 22, 1998 (or any applicable state or local law
requirements which are more stringent than such technical standards or
which became effective before such date) where the failure to meet such
standards or requirements would result in a liability or obligation of the
Company or any Subsidiary, whether or not accrued, contingent or otherwise,
in an amount exceeding $500,000 individually, and $5,000,000 in the
aggregate.
(e) The Company has provided to Parent true and correct
copies of all material assessments, reports and investigations or audits in
the possession of the Company or its Subsidiaries regarding environmental
matters pertaining to, or the environmental condition of, any property
currently or formerly owned, operated or leased by the Company or its
Subsidiaries, or the compliance (or noncompliance) by the Company or any of
its Subsidiaries with any Environmental Laws.
(f) For purposes of this Agreement:
(i) "Environmental Claim" means any claim, action,
cause of action, investigation or notice (written or oral) by any person or
entity alleging potential liability (including potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, or penalties)
arising out of, based on or resulting from (a) the presence, or Release
into the environment, of any Hazardous Materials at any location, whether
or not owned or operated by the Company or any of its Subsidiaries or (b)
circumstances forming the basis of any violation, or alleged violation, of
any Environmental Law.
(ii) "Environmental Laws" means all federal,
interstate, state, local and foreign laws and regulations relating to
pollution or protection of human health, safety, or the environment
(including ambient air, surface water, ground water, land surface or
subsurface strata), including laws and regulations relating to emissions,
discharges, releases or threatened releases of Hazardous Materials, or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials.
(iii) "Hazardous Materials" means chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
radioactive materials, asbestos, petroleum and petroleum products.
(iv) "Release" shall mean releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, escaping,
leaching, disposing or dumping.
3.18 INTELLECTUAL PROPERTY. Except for the rights (the
"Licensed Rights") licensed to the Company pursuant to the Master License
Agreement, dated as of July 30, 1997, among Cendant Car Rental, Inc., Avis
Rent A Car System, Inc. and Wizard Co., Inc. (the "Avis License"), either
the Company or a Subsidiary of the Company owns, or is licensed or
otherwise possesses legally enforceable rights to use, all Intellectual
Property (as defined below) used in their respective businesses where the
failure to own, license or otherwise possess such Intellectual Property
would result in a Material Adverse Effect and the consummation of the
Transactions shall not alter or impair such rights in any material respect.
Except as set forth in Section 3.18 of the Company Disclosure Letter, there
are no pending or, to the knowledge of the Company, threatened claims by
any Person challenging the use by the Company or its Subsidiaries of any
material trademarks, trade names, service marks, service names, xxxx
registrations, logos, assumed names, registered and unregistered
copyrights, patents or applications and registrations therefor
(collectively, the "Intellectual Property") in their respective operations
as currently conducted which, if adversely determined, would result in a
Material Adverse Effect. The conduct of the businesses of the Company and
its Subsidiaries (other than the use by the Company and its Subsidiaries of
the Licensed Rights in accordance with the terms of the Avis License) does
not infringe, in any material respect, upon any intellectual property
rights or any other proprietary right of any Person, and neither the
Company nor any Subsidiary has received any written notice from any other
Person pertaining to or challenging the right of the Company or any
Subsidiary to use any of the Intellectual Property. Except as set forth in
Section 3.18 of the Company Disclosure Letter, neither the Company nor any
of its Subsidiaries has made any claim of a violation or infringement by
others of its rights to or in connection with the Intellectual Property
used in their respective businesses which violation or infringement would
have a Material Adverse Effect.
3.19 LABOR MATTERS.
(a) Except as set forth in Section 3.19(a) of the Company
Disclosure Letter or specifically disclosed in the Company SEC Reports,
there are no labor or collective bargaining agreements to which the Company
or any Subsidiary of the Company is a party. To the knowledge of the
Company, there is no union organizing effort pending or threatened against
the Company or any Subsidiary of the Company. Except as set forth in
Section 3.19(a) of the Company Disclosure Letter, there is no labor strike,
labor dispute, work slowdown, stoppage or lockout pending or, to the
knowledge of the Company, threatened against or affecting the Company or
any Subsidiary of the Company, which has had or would result in a Material
Adverse Effect. Except as set froth in Section 3.19(a) of the Company
Disclosure Letter, there is no unfair labor practice or labor arbitration
proceeding pending or, to the knowledge of the Company, threatened against
the Company or any Subsidiary of the Company, that has had or would result
in a Material Adverse Effect. The Company and its Subsidiaries are in
compliance in all material respects with all applicable laws respecting (i)
employment and employment practices, (ii) terms and conditions of
employment and wages and hours, and (iii) unfair labor practice. Except as
set forth in Section 3.19(a) of the Company Disclosure Letter or
specifically disclosed in the Company SEC Reports, there is no action,
suit, proceeding, inquiry or investigation pending or, to the knowledge of
the Company, threatened against or involving the Company or any of its
Subsidiaries, at law or in equity, alleging a violation of applicable laws,
rules or regulations respecting employment and employment practices, terms
and conditions of employment and wages and hours, or unfair labor practice
that has had or would result in a Material Adverse Effect.
(b) Except as set forth in Section 3.19(b) of the Company
Disclosure Letter, no grievance or any arbitration proceeding arising out
of or under collective bargaining agreements which would have a Material
Adverse Effect is pending and no claim therefor exists.
(c) Neither the Company nor any of its Subsidiaries has any
liabilities under the Worker Adjustment and Retraining Notification Act
(the "WARN Act") that has had or would result in a Material Adverse Effect.
3.20 BROKERS OR FINDERS. None of the Company or any of its
Subsidiaries or Affiliates has entered into any agreement or arrangement
entitling any agent, broker, investment banker, financial advisor or other
firm or Person to any brokers' or finders' fee or any other commission or
similar fee in connection with any of the Transactions, except Xxxxxx
Xxxxxxx and Bear, Xxxxxxx & Co. Inc. ("Bear Xxxxxxx"), whose fees and
expenses shall be paid by the Company in accordance with the Company's
agreement with such firm. True and correct copies of engagement letters
between the Company and each of Xxxxxx Xxxxxxx and Bear Xxxxxxx have been
provided to Parent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
PARENT, PHH AND MERGER SUB
Each of Parent, PHH and Merger Sub jointly and severally
represents and warrants to the Company as follows:
4.1 ORGANIZATION. Each of Parent, PHH and Merger Sub is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has the requisite
corporate power and authority to own, lease and operate its properties and
to carry on its business as it is now being conducted. Merger Sub has not
engaged in any activities other than in connection with or as contemplated
by this Agreement and has no material liabilities other than those incident
to its formation and the Transactions.
4.2 AUTHORITY RELATIVE TO THIS AGREEMENT. Each of Parent,
PHH and Merger Sub has the requisite corporate power and authority to
execute and deliver this Agreement and to consummate the Transactions. The
execution and delivery of this Agreement by Parent, PHH and Merger Sub, and
the consummation of the Transactions, have been duly authorized by the
respective board of directors of each of Parent, PHH and Merger Sub, and by
PHH as the sole stockholder of Merger Sub, and no other corporate
proceeding on the part of Parent, PHH or Merger Sub is required to
authorize this Agreement or to consummate the Transactions, other than the
filing and the recordation of the Certificate of Merger in accordance with
the DGCL. This Agreement has been duly executed and delivered by each of
Parent, PHH and Merger Sub and (assuming due and valid authorization,
execution and delivery hereof by the Company) constitutes a valid and
binding agreement of each of Parent, PHH and Merger Sub, enforceable
against each of Parent, PHH and Merger Sub in accordance with its terms,
except that (i) such enforcement may be subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws, now or
hereafter in effect, relating to creditor's rights generally and (ii)
equitable remedies of specific performance and injunctive and other forms
of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
4.3 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) Except (i) for applicable requirements of (A) the
Exchange Act, (B) the HSR Act and any similar foreign competition laws, and
(C) any state securities and blue sky filings applicable hereto, (ii) for
the filing and recordation of the Certificate of Merger, as required by the
DGCL, and (iii) as set forth in the disclosure letter delivered by Parent,
PHH and Merger Sub prior to the execution of this Agreement to the Company
(the "Parent Disclosure Letter"), neither the execution and delivery of
this Agreement by Parent, PHH and Merger Sub, nor the consummation by
Parent, PHH and Merger Sub of the Transactions, shall require, on the part
of Parent, PHH or Merger Sub, any filing with, or obtaining of, any permit,
authorization, consent or approval of, any Governmental Entity, except for
such filings, permits, authorizations, consents or approvals the failure of
which to make or obtain would not materially impair the ability of Parent,
PHH or Merger Sub to consummate the Transactions.
(b) Except as set forth in Section 4.3(b) of the Parent
Disclosure Letter, neither the execution and delivery of this Agreement by
Parent, PHH or Merger Sub, nor the consummation by Parent, PHH or Merger
Sub of the Transactions, shall (i) conflict with or result in a breach of
the certificate of incorporation or by-laws of Parent, PHH or Merger Sub,
(ii) result in a violation or breach of or constitute (with or without due
notice or lapse of time, or both) a default under, or give rise to any
right of termination, cancellation, suspension, modification or
acceleration under, or result in the creation of a lien under, any of the
terms, conditions or provisions of, or otherwise require the consent or
waiver of, or notice to, any other party under, any material bond note,
mortgage, indenture, other evidence of indebtedness, guarantee, license,
agreement or other contract or instrument to which Parent, PHH or Merger
Sub is a party or by which any of them or any of their respective
properties or assets is bound, or (iii) violate any law, statute, rule,
regulation, order, writ, injunction or decree applicable to Parent, PHH or
Merger Sub, or any of their respective properties or assets except, in the
case of clauses (ii) and (iii), for such violations, breaches, defaults or
rights which would not materially impair the ability of Parent, PHH or
Merger Sub to consummate the Transactions.
4.4 PROXY STATEMENT. None of the information supplied by
Parent, PHH or Merger Sub for inclusion or incorporation by reference in
the Proxy Statement shall, at the time it is filed with the SEC, at the
time it is first mailed to the Company's stockholders or at the time of the
Stockholders Meeting, contain any untrue statement of a material fact or
omit 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 are made, not misleading.
4.5 LITIGATION. Except as set forth in Section 4.5 of the
Parent Disclosure Letter, there is no action, suit, proceeding, inquiry or
investigation pending or, to the knowledge of Parent, PHH or Merger Sub,
threatened involving Parent, PHH or Merger Sub, at law or in equity, by or
before any Governmental Entity which questions or challenges the validity
of this Agreement or which, if adversely determined, would materially
impair or delay the ability of Parent, PHH or Merger Sub to consummate the
Transactions.
4.6 FINANCING. Parent and PHH have or shall have sufficient
cash on hand and shall provide, or cause to be provided, at such time or
times as such funds are required, to Merger Sub or, as the case may be, the
Company, such cash on hand (i) to pay the Merger Consideration and to pay
any other amounts required to be paid in order to consummate the
Transactions contemplated by this Agreement, including pursuant to Section
2.4, (ii) to pay any fees and expenses in connection with the Transactions
and (iii) to satisfy the obligations to pay any existing indebtedness of
the Company or its Subsidiaries that is required to be repaid as a result
of the Transactions.
4.7 BROKERS OR FINDERS. None of Parent, PHH, Merger Sub or
any of their respective Affiliates has entered into any agreement or
arrangement entitling any agent, broker, investment banker, financial
advisor or other firm or Person to any brokers' or finders' fee or any
other commission or similar fee in connection with any of the Transactions,
except Xxxxxx Brothers and Chase Securities Inc., whose fees and expenses
shall be paid by Parent in accordance with Parent's agreement with each
such firm.
ARTICLE V
COVENANTS
5.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER.
The Company covenants and agrees that, during the period from the date of
this Agreement and continuing until the earlier to occur of the termination
of this Agreement or the Effective Time, except as contemplated by this
Agreement or required by applicable law or rule of the New York Stock
Exchange, unless Parent shall otherwise agree in writing (such agreement
not to be unreasonably withheld, conditioned or delayed), and except as set
forth in Section 5.1 of the Company Disclosure Letter:
(a) the Company shall conduct its business and shall cause
the businesses of its Subsidiaries to be conducted, only in, and the
Company and its Subsidiaries shall not take any action except in, the
ordinary course of business, consistent with past practice; and the Company
shall use its reasonable best efforts to preserve intact the business
organizations of the Company and its Subsidiaries, and to maintain (i) the
services of the present officers, employees and consultants of the Company
and its Subsidiaries and (ii) its existing relations with suppliers,
creditors, business associates and others having business dealings with it;
and
(b) without limiting the generality of the foregoing, the
Company shall not, and shall cause its Subsidiaries not to, take any of the
following actions:
(i) amend its certificate of incorporation or
by-laws;
(ii) issue, sell, pledge, dispose of or encumber, or
authorize the issuance, sale, pledge, disposition or encumbrance of, any
shares of capital stock of any class or any other equity interest, or any
options, warrants, convertible securities or other rights of any kind to
acquire any shares of capital stock, or any other equity interest in the
Company or any of its Subsidiaries (except for the issuance of shares of
Company Common Stock pursuant to the exercise of Options outstanding on the
date hereof);
(iii) declare, set aside, make or pay any dividend or
other distribution (whether in cash, stock or property or any combination
thereof) in respect of any of its capital stock or any other equity
interest, including any constructive or deemed distributions, and any
distribution in connection with the adoption of a shareholders rights plan,
or make any other payments to stockholders in their capacity as such,
except that a wholly owned Subsidiary of the Company may declare and pay a
dividend to its parent;
(iv) split, combine or reclassify any of its capital
stock or any other equity interest or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock or any other equity interest;
(v) redeem, purchase or otherwise acquire, directly
or indirectly, any of its capital stock or any other equity interests;
(vi) (A) purchase, acquire, sell, transfer, lease,
license, mortgage, encumber or dispose of any material assets, other than
the purchase, sale, rental and lease of vehicles in the ordinary course of
business, consistent with past practice; (B) acquire (by merger,
consolidation or acquisition of stock or assets or otherwise) any
corporation, partnership or other business organization or division
thereof; (C) sell, transfer or dispose of any Subsidiary of the Company (by
merger, consolidation, sale of stock or assets or otherwise); (D) incur or
assume any indebtedness for borrowed money or other liability, other than
in connection with the financing of vehicles in the ordinary course of
business, consistent with past practice; (E) modify, amend or terminate any
confidentiality agreements, standstill agreements or Company Material
Contracts to which the Company or its Subsidiaries is a party or by which
it is bound, or waive, release or assign any material rights or claims,
other than in the ordinary course of business, consistent with past
practice; (F) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the
obligations of any other Person, other than in the ordinary course of
business, consistent with past practice; (G) make any material loans,
advances or capital contributions to, or investments in, any other Person
(other than to its wholly owned Subsidiaries in the ordinary course of
business, consistent with past practice); (H) repurchase, redeem, repay or
take any other action with respect to the issued and outstanding 11% Senior
Subordinated Notes of the Company due May 2009 (the "Notes"), other than
pursuant to Section 5.7; or (I) other than in the ordinary course of
business, consistent with past practice, enter into any material
commitment, transaction, contract or agreement, including any of the
following entered into outside the ordinary course of business (i) any
material capital expenditure, (ii) any material contract or agreement
outside the ordinary course of business, (iii) any contracts or agreements
that cannot be cancelled on notice of thirty (30) days or less and (iv) any
noncompete agreements or other agreements that limit the ability of the
Company to conduct any line of business;
(vii) increase the compensation, severance or other
benefits payable or to become payable to its directors, officers or
employees, other than increases in salary or wages of employees of the
Company or its Subsidiaries (who are not directors or executive officers of
the Company) in accordance with past practice or pursuant to binding
commitments made prior to the date hereof, or grant any severance or
termination pay (except payments required to be made under the Plans or
other obligations existing on the date hereof in accordance with the terms
of such obligations) to, or enter into any employment or severance
agreement with, any employee of the Company or any of its Subsidiaries, or
establish, adopt, enter into or amend any collective bargaining agreement,
Plan, trust, fund, policy or arrangement for the benefit of any current or
former directors, officers or employees or any of their beneficiaries,
except, in each case, as may be required by law or as would not result in a
material increase in the cost of maintaining such collective bargaining
agreement, Plan, trust, fund, policy or arrangement;
(viii) pay, repurchase, discharge or satisfy any of
its material claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction in the ordinary course of business, consistent
with past practice, or pursuant to contractual requirements existing on the
date hereof, of claims, liabilities or obligations reflected or reserved
against, in, or contemplated by, the consolidated financial statements (or
the notes thereto) of the Company and its Subsidiaries;
(ix) take any action to change accounting policies or
procedures or any of its methods of reporting income, deductions or other
items for income tax purposes, except as required by a change in GAAP, SEC
position or applicable law occurring after the date hereof;
(x) approve or authorize any action to be submitted
to the stockholders of the Company for approval other than pursuant to this
Agreement;
(xi) make or change any material election with
respect to Taxes, agree or settle any material claim or assessment in
respect of Taxes, or agree to an extension or waiver of the limitation
period to any material claim or assessment in respect of Taxes;
(xii) voluntarily take, or commit to take, any action
that would or is reasonably likely to result in any of the conditions to
the Merger set forth in Article VI not being satisfied or make any
representation or warranty of the Company contained herein that is not
qualified as to materiality inaccurate in any material respect, or any
representation or warranty that is qualified as to materiality untrue in
any respect at, or as of any time prior to, the Effective Time, or that
would materially impair the ability of the Company, Parent, PHH or Merger
Sub to consummate the Transactions, including the Merger, in accordance
with the terms hereof or materially delay such consummation; or
(xiii) agree, authorize or announce to take any of
the actions described in subsections (i) through (xii) above.
5.2 NO SOLICITATION.
(a) Except as set forth below, from and after the date
hereof and prior to the Effective Time, the Company shall not, directly or
indirectly, through any Subsidiary or Affiliate of the Company, or through
any officer, director, employee, investment banker, agent or other
representative of the Company or any Subsidiary or Affiliate of the
Company, (i) encourage, invite, initiate or solicit any inquiries relating
to or the submission or making of a proposal by any Person with respect to
a Third-Party Acquisition (as defined below) or (ii) participate in, or
encourage, invite, initiate or solicit, negotiations or discussions with,
or furnish or cause to be furnished any information to, any Person relating
to a Third-Party Acquisition. Upon the execution of this Agreement, the
Company shall immediately (i) cease, or cause to be ceased, any discussions
or negotiations with any Person, entity or group in connection with any
proposed or potential Third-Party Acquisition and shall seek to have
returned to the Company any confidential information provided in any such
discussions or negotiations and (ii) take all actions necessary to rescind
the Company's stock repurchase program authorized by the Board on August 9,
2000. Notwithstanding the foregoing, prior to the Stockholders Meeting, if
the Company, the Board or the Independent Committee, without being in
violation of the terms of this Section 5.2, receives an unsolicited bona
fide written proposal from any Person or group with respect to a
Third-Party Acquisition which could reasonably be expected to result in a
Superior Proposal (as defined below), then the Company may, directly or
indirectly, furnish information and access to such Person or group pursuant
to an appropriate confidentiality agreement, and may participate in
discussions and negotiations with, such Person or group; provided, however,
that the terms of such confidentiality agreement shall have terms that are
not less restrictive than the terms set forth in the confidentiality
agreement between the Company and Parent, dated as of July 31, 2000 (the
"Confidentiality Agreement").
(b) The Company shall within twenty-four (24) hours notify
Parent in writing upon receipt of any proposal, written or oral, relating
to a Third- Party Acquisition or any request for nonpublic information
relating to the Company or any of its Subsidiaries in connection with any
pending, proposed or contemplated Third-Party Acquisition or for access to
the properties, books or records of the Company or any Subsidiary by any
Person that informs the Board or the Independent Committee that it is
considering making, or has made, a proposal relating to a Third- Party
Acquisition. Such notice shall identify the Person submitting the proposal,
attach a copy of any written correspondence or other written materials
relating to such proposal, summarize any significant terms of such proposal
not reflected in any such attached materials, state whether the Company is
providing or intends to provide the Person or group making such proposal
with access to information concerning the Company or any of its
Subsidiaries, as provided in this Section 5.2 and, if it proposes to
provide such access to information, state that such proposal could
reasonably be expected to result in a Superior Proposal and the basis for
such conclusion. The Company also shall promptly notify Parent of any
significant development relating to any inquiries, discussions,
negotiations, proposals or requests for information concerning any
Third-Party Acquisition. The Company shall keep Parent informed of the
status of any such negotiations and shall further update, to the extent of
any significant developments, the information required to be provided in
each notice upon the request of Parent.
(c) Except as provided in subparagraph (d) below, neither
the Board nor the Independent Committee shall (i) withdraw or modify, or
propose to withdraw or modify, or refuse or fail at Parent's request to
reaffirm, (A) the approval by the Board of this Agreement or the Merger,
(B) the favorable recommendation of the Independent Committee and the Board
with respect thereto, or (C) the Board's recommendation to stockholders of
the Company that they vote their shares of Company Common Stock in favor of
adoption of this Agreement, and the Board's direction that this Agreement
be submitted to stockholders for such adoption; (ii) approve or recommend,
or propose publicly to approve or recommend, any Third- Party Acquisition;
or (iii) cause the Company to enter into any agreement in principle, letter
of intent, contract, agreement (whether written or oral) or memorandum of
understanding (each, a "Company Acquisition Agreement") related to any
Third-Party Acquisition.
(d) Notwithstanding the foregoing, in the event that the
Independent Committee determines in good faith, after receipt of advice of
its outside legal counsel, that failure to take such action would
constitute a breach of the Board's fiduciary duties to the Company's
stockholders under applicable law, the Independent Committee (and the Board
acting on the recommendation of the Independent Committee) may (i) withdraw
or modify its approval or recommendation of this Agreement and the Merger
and disclose such withdrawal or modification to the Company's stockholders;
and, (ii) solely in relation to a Third- Party Acquisition that constitutes
a Superior Proposal, provided the Board, the Independent Committee and the
Company have not violated the terms of this Section 5.2, (A) recommend such
Superior Proposal, and/or (B) following the Stockholders Meeting, if the
Company Stockholder Approval shall not have been obtained, terminate this
Agreement in accordance with Section 7.1(d)(iii) hereof and,
contemporaneously with such termination, cause the Company to enter into a
Company Acquisition Agreement with respect to such Superior Proposal,
provided, however, that (x) prior to taking any of the foregoing actions,
the Company shall have paid Parent by wire transfer the amount payable
pursuant to Section 7.3 and (y) prior to taking the action described in
clause (B) above, the Independent Committee shall have (1) given Parent at
least three Business Days' prior written notice that the Company intends to
terminate this Agreement and provided Parent with a reasonable opportunity
to respond to any such Superior Proposal (which response could include a
proposal to revise the terms of the Transactions) and (2) fully considered
any such response by Parent and concluded that, notwithstanding such
response, such proposal continues to be a Superior Proposal in relation to
the Transactions, as the terms of the Transactions may be proposed to be
revised by Parent's response. Notwithstanding the foregoing, the obligation
of the Company to duly call, give notice of, convene and hold the
Stockholders Meeting in accordance with Section 2.3 hereof shall not be
affected by the commencement, proposal, public disclosure or communication
to the Company of a Third-Party Acquisition or a Superior Proposal or by
the taking of any action by the Board or the Independent Committee in
accordance with this Section 5.2. No action taken by the Board or the
Independent Committee in accordance with this Section 5.2 shall constitute
a breach of any other section of this Agreement.
(e) As used in this Agreement, the term "Third-Party
Acquisition" shall mean any of the following events: (i) the acquisition of
the Company by merger, purchase of stock or assets, joint venture or
otherwise by, or a "merger of equals" with, any Person (which includes a
"person," as such term is defined in Section 13(d)(3) of the Exchange Act)
other than a member of the Acquisition Group (a "Third Party"); (ii) the
acquisition by a Third Party of any material portion (which shall include
twenty percent (20%) or more) of the assets of the Company and its
Subsidiaries, taken as a whole; (iii) the acquisition by a Third Party of
twenty percent (20%) or more of the outstanding shares of Company Common
Stock; (iv) the adoption by the Company of a plan of liquidation or the
declaration or payment of an extraordinary dividend; or (v) the repurchase
by the Company or any of its Subsidiaries of more than twenty percent (20%)
of the outstanding shares of Company Common Stock.
(f) For purposes of this Agreement, "Superior Proposal"
means any bona fide written proposal to acquire, directly or indirectly,
for consideration consisting of cash and/or securities, all of the shares
of Company Common Stock then outstanding or all or substantially all of the
assets of the Company to be followed by a pro rata distribution of the sale
proceeds to stockholders of the Company, that (i) is not subject to any
financing conditions or contingencies, (ii) provides holders of Company
Common Stock with per share consideration that the Independent Committee
determines in good faith, after receipt of advice of its financial advisor,
is more favorable from a financial point of view than the consideration to
be received by holders of Company Common Stock in the Merger, (iii) is
determined by the Independent Committee in its good faith judgment, after
receipt of advice of its financial advisor and outside legal counsel, to be
likely of being completed (taking into account all legal, financial,
regulatory and other aspects of the proposal, the Person making the
proposal and the expected timing to complete the proposal), (iv) does not,
in the definitive Company Acquisition Agreement, contain any "due
diligence" conditions, and (v) has not been obtained by or on behalf of the
Company in violation of this Section 5.2.
5.3 ACCESS TO INFORMATION; CONFIDENTIALITY.
(a) Until the Effective Date, the Company shall (and shall
cause its Subsidiaries to) afford to the officers, employees, accountants,
counsel, financing sources and other representatives of Parent, reasonable
access during normal business hours to its properties, books, contracts,
commitments and records; furnish to Parent all information concerning its
business, properties, and personnel as Parent may reasonably request or has
reasonably requested; and use reasonable best efforts to make available
during normal business hours to the officers, employees, accountants,
counsel, financing sources and other representatives of Parent the
appropriate individuals (including management personnel, attorneys,
accountants and other professionals) for discussion of the Company's
business, properties, prospects and personnel as Parent may reasonably
request.
(b) Parent shall keep all information disclosed to the
persons identified in clause (a) above pursuant to this Agreement
confidential in accordance with the terms of the Confidentiality Agreement.
(c) As soon as practicable (but in no case later than 21
days) after the execution of this Agreement, the Company shall permit
Parent to electronically link the Company's financial reporting system to
Parent's financial reporting consolidation system ("Hyperion"). The link to
Hyperion will be completed by Parent's financial reporting staff, with
assistance from the Company's accounting staff, at no incremental cost to
the Company. Parent will provide the necessary Hyperion and ancillary
software to be installed on a computer in the Company's accounting
department.
5.4 CONSENTS; APPROVALS.
(a) The Company, Parent and Merger Sub shall each use its
reasonable best efforts (which efforts, to the extent reasonably
practicable, shall be made prior to the consummation of the Merger), and
cooperate with each other, to obtain as promptly as practicable all
consents, waivers, approvals, authorizations or orders (including all
rulings and approvals of all United States and foreign Governmental
Entities), and the Company, Parent, PHH and Merger Sub shall make all
filings (including all filings with United States and foreign Governmental
Entities) required in connection with the authorization, execution and
delivery of this Agreement by the Company, Parent, PHH and Merger Sub and
the consummation by them of the Transactions.
(b) Each party hereto shall make an appropriate filing of a
notification and report form pursuant to the HSR Act with respect to the
Transactions within fifteen Business Days after the date hereof, shall as
promptly as practicable supply any additional information and documentary
material that may be requested pursuant to the HSR Act, and shall use
reasonable best efforts to obtain early termination of the waiting period
under the HSR Act. In addition, each party hereto shall promptly make any
other filing that may be required under any antitrust law or by any
antitrust authority and shall as promptly as practicable supply and
additional information and documentary material that may be required in
connection therewith.
5.5 INDEMNIFICATION AND INSURANCE.
(a) From and after the Effective Date, Parent and the
Surviving Corporation and their respective successors shall indemnify,
defend and hold harmless each Person who is now, or has been at any time
prior to the date hereof or who becomes prior to the Effective Time, an
officer or director of the Company or any of the Subsidiaries (the "Covered
Parties") against all losses, claims, damages, costs, expenses (including
reasonable attorneys' fees and expenses), liabilities or judgments or
amounts that are paid in settlement with the approval of the indemnifying
party (which approval shall not be unreasonably withheld or delayed)
incurred in connection with any threatened or actual action, suit or
proceeding based in whole or in part on or arising in whole or in part out
of the fact that such person is or was a director or officer of the Company
("Indemnified Liabilities"), including all Indemnified Liabilities based in
whole or in part on, or arising in whole or in part out of, this Agreement
or the transactions contemplated hereby, in each case to the fullest extent
that a corporation is permitted by law to indemnify its own directors or
officers, as the case may be. In the event any such claim, action, suit,
proceeding or investigation is brought against any Covered Party, the
indemnifying parties shall assume and direct all aspects of the defense
thereof, including settlement, and the Covered Party shall cooperate in the
defense of any such matter. The Covered Party shall have a right to
participate in (but not control) the defense of any such matter with its
own counsel and at its own expense. Notwithstanding the right of the
indemnifying parties to assume and control the defense of such litigation,
claim or proceeding, such Covered Party shall have the right to employ
separate counsel and to participate in the defense of such litigation,
claim or proceeding, and the indemnifying parties shall bear the fees,
costs and expenses of such separate counsel and shall pay such fees, costs
and expenses promptly after receipt of an invoice from such Covered Party
if (i) the use of counsel chosen by the indemnifying parties to represent
such Covered Party would present such counsel with a conflict of interest,
(ii) the defendants in, or targets of, any such litigation, claim or
proceeding shall have been advised by counsel that there may be legal
defenses available to it or to other Covered Parties which are different
from or in addition to those available to the indemnifying parties or (iii)
the indemnifying parties shall not have employed counsel satisfactory to
such Covered Party, in the exercise of the Covered Party's reasonable
judgment, to represent such Covered Party within a reasonable time after
notice of the institution of such litigation, claim or proceeding. The
Covered Parties as a group shall be represented by a single law firm (plus
no more than one local counsel in any jurisdiction) with respect to each
such matter unless there is, under applicable standards of professional
conduct, a conflict on any significant issue between the positions of any
two or more Covered Parties. The indemnifying parties shall not settle any
such matter unless (i) the Covered Party gives prior written consent, which
shall not be unreasonably withheld or delayed, or (ii) the terms of the
settlement provide that the Covered Party shall have no responsibility for
the discharge of any settlement amount and impose no other obligations or
duties on the Covered Party, and the settlement discharges all rights
against the Covered Party with respect to such matter. Any Covered Party
wishing to claim indemnification under this Section 5.5, upon learning of
any such claim, action, suit, proceeding or investigation, shall promptly
notify Parent and the Surviving Corporation (but the failure so to notify
shall not relieve the indemnifying party from any liability which it may
have under this Section 5.5, except to the extent such failure materially
prejudices the indemnifying parties). Each Covered Party shall be entitled
to the advancement of expenses to the full extent permitted by law in
connection with any such action (subject to tendering any undertaking to
repay such expenses, to the extent required by applicable law).
Notwithstanding the foregoing, in the event that there is any conflict
between this Section 5.5(a) and the terms of the Amended and Restated
Certificate of Incorporation or Amended and Restated By-Laws of the
Company, the Amended and Restated Certificate of Incorporation and/or
Amended and Restated By-laws, as the case may be, shall prevail.
(b) All rights to indemnification, all limitations on
liability and all rights to advancement of expenses existing in favor of a
Covered Party as provided herein, in the Company's Amended and Restated
Certificate of Incorporation, Amended and Restated By-Laws or other
indemnification agreements as in effect as of the date hereof shall survive
the Merger and shall continue in full force and effect, without any
amendment thereto, for a period of six years from the Effective Time to the
extent such rights are consistent with applicable law; provided that in the
event any claim or claims are asserted or made within such six-year period,
all rights to indemnification in respect of any such claim or claims shall
continue until disposition of any and all such claims; provided further,
that any determination required to be made with respect to whether a
Covered Party's conduct complies with the standards set forth under
applicable law, the Company's Amended Restated Certificate of
Incorporation, Amended and Restated By-Laws or such agreements, as the case
may be, shall be made by independent legal counsel selected by the Covered
Party and reasonably acceptable to the Surviving Corporation.
(c) In the event that Cendant or the Surviving Corporation
or any of their respective successors or assigns (i) consolidates with or
merges into any other Person and shall not be the surviving corporation or
entity of such consolidation or merger or (ii) transfers or conveys all or
substantially all of its properties and assets to any Person, then, and in
each such case, to the extent necessary to effectuate the purposes of this
Section 5.5, proper provision shall be made so that such successors,
assigns and transferees, as the case may be, assume the obligations set
forth in this Section 5.5, and none of the actions described in the
foregoing clauses (i) or (ii) shall be taken until such provision is made.
(d) For a period of six years after the Effective Time,
Cendant shall cause the Surviving Corporation and its successors to
maintain in effect, without any lapses in coverage, policies of directors'
and officers' liability insurance (or a "tail" policy) for the benefit of
those Persons who are covered by the Company's directors' and officers'
liability insurance policies as of the date hereof, providing coverage with
respect to matters occurring prior to the Effective Time that is at least
equal to the coverage provided under the Company's current directors' and
officers' liability insurance policies to the extent that such liability
insurance can be maintained at an annual cost to the Surviving Corporation
of not greater than 200 percent of the premium for the current Company
directors' and officers' liability insurance; provided that if such
insurance (or "tail" policy) cannot be so maintained at such cost, the
Surviving Corporation shall maintain as much of such insurance as can be so
maintained at a cost equal to 200 percent (200%) of the current annual
premiums of the Company for such insurance.
5.6 EMPLOYEE BENEFITS.
(a) During the period commencing at the Effective Time and
ending on December 31, 2001, Parent shall cause all current and former
employees and officers of the Company and its Subsidiaries who are entitled
to receive compensation and benefits as of the Effective Time, other than
employees covered by collective bargaining agreements, to receive (i) the
salary or wage level and bonus opportunity, to the extent applicable, not
materially less favorable in the aggregate than that in effect on the date
hereof and (ii) benefits, perquisites and other terms and conditions of
employment that are not materially less favorable in the aggregate than the
benefits, perquisites and other terms and conditions that they were
entitled to receive on the date hereof.
(b) Subject to Section 5.6(a) hereof, from and after the
Effective Time, Parent shall honor, pay, perform and satisfy any and all
liabilities, obligations and responsibilities to, or in respect of, each
employee and officer of the Company and its Subsidiaries, and each former
employee and officer of the Company and its Subsidiaries, as of the
Effective Time arising under the terms of, or in connection with, any
employee benefit, fringe benefit, deferred compensation or incentive
compensation plan or arrangement or any employment, consulting, retention,
severance, change-of-control or similar agreement, in each case, to the
extent listed in Section 3.14(a) or 3.16(a) of the Company Disclosure
Letter and in accordance with the terms thereof in effect on the date
hereof. Without limiting the generality of the foregoing, until December
31, 2001, Parent shall keep in effect all severance and retention plans,
practices and policies that are applicable to employees and officers of the
Company and its Subsidiaries as of the date hereof.
(c) Parent shall, or shall cause the Surviving Corporation
and its Subsidiaries to, give Continuing Employees full credit for purposes
of eligibility and vesting under any employee benefit plans or arrangements
maintained by Parent, the Surviving Corporation or any Subsidiary of Parent
or the Surviving Corporation for such Continuing Employees' service with
the Company, any Subsidiary of the Company or any of their respective
predecessors to the same extent recognized by the Company, any Subsidiary
of the Company or any such predecessor for similar purposes immediately
prior to the Effective Time. In addition, Parent shall, or shall cause the
Surviving Corporation and its Subsidiaries to, give Continuing Employees
full credit for purposes of the determination of benefits under any
employee benefit plans or arrangements in effect as of the date hereof
maintained by Parent for such Continuing Employees' service with the
Company, any Subsidiary of the Company or any of their respective
predecessors to the same extent recognized by the Company, any Subsidiary
of the Company or any such predecessor for similar purposes immediately
prior to the Effective Time. Parent shall, or shall cause the Surviving
Corporation and its Subsidiaries to, (i) waive all limitations as to
preexisting conditions, exclusions and waiting periods with respect to
participation and coverage requirements applicable to the Continuing
Employees under any welfare plan that such employees may be eligible to
participate in after the Effective Time, other than limitations or waiting
periods that are already in effect with respect to such employees and that
have not been satisfied as of the Effective Time under any welfare plan
maintained for the Continuing Employees immediately prior to the Effective
Time, and (ii) provide each Continuing Employee with credit for any co-
payments and deductibles paid prior to the Effective Time in satisfying any
applicable co-payment, deductible or out-of-pocket requirements in respect
of the year during which the Effective Time occurs under any welfare plans
that such employees are eligible to participate in after the Effective Time
to the same extent as if those deductibles or co-payments had been paid
under the welfare plans for which such employees are eligible after the
Effective Time.
(d) Nothing contained herein shall constitute assurance of
continued employment of any officer or employee of the Company or any of
its Subsidiaries following the Effective Time.
5.7 NOTE TENDER OFFER. Parent may, in its sole and absolute
discretion, commence a tender offer and consent solicitation to repurchase
any and all of the outstanding Notes (the "Note Tender Offer") on terms and
conditions determined solely by Parent. The Note Tender Offer shall be
effected in compliance with applicable laws and SEC rules and regulations.
The Company shall cooperate with Parent, PHH and Merger Sub in connection
with the preparation of all documents and the making of all filings
required in connection with the Note Tender Offer and shall use its
commercially reasonable efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all other things necessary, proper or
advisable to consummate the Note Tender Offer; provided, however, that it
is understood and agreed by the parties hereto that (i) such Note Tender
Offer shall be consummated no earlier than the Closing Date, (ii) the
Company shall have no obligation to provide any funds to consummate the
Note Tender Offer, and (iii) Parent or PHH shall provide the funds required
to consummate the Note Tender Offer on or after the Effective Time,
together with all related fees and expenses.
5.8 NOTIFICATION OF CERTAIN MATTERS. The Company shall give
prompt notice to Parent, and Parent (on behalf of itself, PHH and Merger
Sub) shall give prompt notice to the Company, of (i) the occurrence or
non-occurrence of any event known to it, the occurrence or non-occurrence
of which is reasonably likely to cause any representation or warranty of
such party contained in this Agreement to be materially untrue or
inaccurate, (ii) any failure of the Company or Parent, PHH or Merger Sub,
as the case may be, to comply with or satisfy, or the occurrence or non-
occurrence of any event known to it, the occurrence or non-occurrence of
which is reasonably likely to cause the failure by such party materially to
comply with or satisfy any covenant, condition or agreement to be complied
with or satisfied by it hereunder; (iii) the occurrence of any other event
known to it which would be reasonably likely (A) to have a Material Adverse
Effect or (B) to cause any condition set forth in Article VI to be
unsatisfied in any material respect at any time prior to the Effective
Time; or (iv) any action, suit, proceeding, inquiry or investigation
pending or, to the knowledge of the Company, threatened which questions or
challenges the validity of this Agreement; provided, however, that the
delivery of any notice pursuant to this Section 5.8 shall not limit or
otherwise affect the remedies available hereunder to the party receiving
such notice.
5.9 FURTHER ACTION. Upon the terms and subject to the
conditions hereof each of the parties hereto shall use its reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause to
be done, all other things necessary, proper or advisable to consummate and
make effective as promptly as practicable the transactions contemplated by
this Agreement, to obtain in a timely manner all necessary waivers,
consents and approvals and to effect all necessary registrations and
filings, and otherwise to satisfy or cause to be satisfied all conditions
precedent to its obligations under this Agreement.
5.10 PUBLIC ANNOUNCEMENTS. Parent, PHH, Merger Sub and the
Company shall consult with each other before issuing any press release or
making any public statement with respect to this Agreement, the Merger or
the other Transactions and shall not issue any such press release or make
any such public statement without the prior consent of the other parties,
which shall not be unreasonably withheld; provided, however, that any party
may, without the prior consent of the others, issue such press release or
make such public statement as may, upon the advice of counsel, be required
by law or the rules and regulations of The New York Stock Exchange, in
advance of obtaining such prior consent, in which case, the parties shall
cooperate to reach mutual agreement as to the language of any such report,
statement or press release. Immediately following the execution and
delivery of this Agreement, Parent, PHH, Merger Sub and the Company are
each issuing press releases to be mutually agreed upon with respect to this
Agreement, the Merger and the other Transactions.
5.11 TRANSFER TAXES. Parent shall pay any real property or
other similar transfer Taxes incurred in connection with the consummation
of the Offer and the Merger.
5.12 FINANCIAL STATEMENTS. Upon request by Parent or PHH,
the Company shall use commercially reasonable efforts to cooperate with
Parent and PHH in connection with preparing such financial statements as
are required by applicable law and by SEC rules and regulations to be filed
by PHH with the SEC in connection with the prospectus for the medium term
notes to be issued by PHH; such cooperation shall include, without
limitation, providing all information reasonably requested by Parent or
PHH.
5.13 SECTION 16 MATTERS. The Company shall take all such
steps as may be required to cause any dispositions of Company Common Stock
(including derivative securities with respect to the Company Common Stock)
resulting from the Transactions contemplated by this Agreement by each
officer or director who is subject to the reporting requirements of Section
16(a) of the Exchange Act with respect to the Company to be exempt under
Rule 16b-3 promulgated under the Exchange Act, such steps to be taken in
accordance with the No-Action Letter, dated January 12, 1999, issued by the
Commission to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP.
ARTICLE VI
CONDITIONS TO THE MERGER
6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligations of each party to effect the Merger shall
be subject to the fulfillment or waiver (to the extent permitted by
applicable law) at or prior to the Effective Time of the following
conditions:
(a) STOCKHOLDER APPROVAL. The Company Stockholder Approval
shall have been obtained at or prior to the Effective Time in accordance
with the DGCL.
(b) NO INJUNCTION OR STATUTE. No statute, rule, regulation,
order, decree, judgment, injunction or ruling shall have been enacted,
entered, promulgated or enforced by any court or other Governmental Entity
of competent jurisdiction which, in any such case, (i) prohibits or
restricts the ownership or operation by Parent (or any of its Affiliates or
Subsidiaries) of a material portion of the Company's and its Subsidiaries'
businesses or assets, or compels Parent (or any of its Affiliates or
Subsidiaries) to dispose of or hold separate any material portion of the
Company's and its Subsidiaries' businesses or assets, or (ii) restrains in
any material respect or prohibits the consummation of the Merger, which has
not been vacated, dismissed or withdrawn prior to the Effective Time. The
Company and Parent shall use their respective best efforts to have any of
the foregoing vacated, dismissed or withdrawn by the Effective Time.
(c) NO ACTION. No action, suit or proceeding shall have been
instituted, or shall be pending or threatened by a Governmental Entity (i)
seeking to restrain in any material respect or prohibit the consummation of
the Merger or the performance of any of the other Transactions contemplated
by this Agreement, (ii) seeking to obtain from the Company, Parent, PHH or
Merger Sub any damages that would result in a Material Adverse Effect or
(iii) seeking to impose the restrictions, prohibitions or limitations
referred to in subsection (b) above.
(d) HSR ACT. Any waiting period applicable to the Merger
under the HSR Act and any applicable foreign competition or antitrust laws
shall have been terminated or expired.
6.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY TO EFFECT THE
MERGER. The obligation of the Company to effect the Merger shall be subject
to the fulfillment or waiver (to the extent permitted by applicable law) at
or prior to the Effective Time of the following conditions:
(a) The representations and warranties of Parent, PHH and
Merger Sub set forth in this Agreement shall be true and correct in all
respects as of the Effective Time as though made on or as of such time
(ignoring for purposes of this determination any materiality or Material
Adverse Effect qualifiers contained within individual representations and
warranties), except for (i) those representations and warranties that
address matters only as of a particular date or only with respect to a
specific period of time which need only be true and correct as of such date
or with respect to such period and (ii) such failures to be true and
correct as would not, individually or in the aggregate, reasonably be
expected to materially impair the ability of Parent, PHH or Merger Sub to
consummate the Merger.
(b) Parent, PHH and Merger Sub shall have performed and
complied in all material respects with all obligations, agreements and
covenants required by this Agreement to be performed and complied with by
it prior to the Effective Time.
(c) The Company shall have received a certificate signed by
the chief financial officer of Parent, dated as of the Closing Date, to the
effect that, to the best of such officer's knowledge, the conditions set
forth in Section 6.2(a) and Section 6.2(b) have been satisfied.
6.3 CONDITIONS TO OBLIGATIONS OF PARENT AND MERGER SUB TO
EFFECT THE MERGER. The obligation of Parent, PHH and Merger Sub to effect
the Merger shall be subject to the fulfillment or waiver (to the extent
permitted by applicable law) at or prior to the Effective Time of the
following conditions:
(a) The representations and warranties of the Company set
forth in this Agreement shall be true and correct in all respects as of the
Effective Time as though made on or as of such time (ignoring for purposes
of this determination any materiality or Material Adverse Effect qualifiers
contained within individual representations and warranties), except for (i)
those representations and warranties that address matters only as of a
particular date or only with respect to a specific period of time which
need only be true and correct as of such date or with respect to such
period and (ii) such failures to be true and correct as would not,
individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.
(b) The Company shall have performed and complied in all
material respects with all obligations, agreements and covenants required
by this Agreement to be performed or complied with by it prior to the
Effective Time, except for such failures to perform or comply as would not,
individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.
(c) Parent shall have received a certificate signed by the
chief financial officer of the Company, dated as of the Closing Date, to
the effect that, to the best of such officer's knowledge, the conditions
set forth in Section 6.3(a) and Section 6.3(b) have been satisfied.
(d) Neither the Board nor the Independent Committee (i)
shall have withdrawn, modified or changed its approval or recommendation of
this Agreement, the Merger or the other Transactions in any manner which
Parent reasonably determines to be adverse to Parent, (ii) shall have
recommended the approval or acceptance of a Superior Proposal or
Third-Party Acquisition from a Person or entity other than a member of the
Acquisition Group, or (iii) shall have executed any Company Acquisition
Agreement.
(e) No event, change, development or circumstance shall have
occurred or shall exist which is reasonably expected to result in a
Material Adverse Effect.
(f) The Company shall have obtained the consents, approvals
and waivers set forth in Section 6.3(f) of the Company Disclosure Schedule.
ARTICLE VII
TERMINATION
7.1 TERMINATION. This Agreement may be terminated at any
time prior to the Effective Time, notwithstanding adoption of this
Agreement by the stockholders of the Company:
(a) by mutual written consent duly authorized by the Board
of Directors of each of the Company (provided such termination has been
approved by the Independent Committee) and Parent; or
(b) by either the Company (provided such termination has
been approved by the Independent Committee) or Parent as follows:
(i) if the Effective Time shall not have occurred on
or prior to June 30, 2001; provided, however, that the right to terminate
this Agreement under this Section 7.1(b)(i) shall not be available to any
party whose failure to fulfill any obligation under this Agreement has been
the cause of, or resulted in, the failure of the Merger to be consummated
on or prior to such date; or
(ii) if a Governmental Entity shall have issued a
nonappealable final order, decree or ruling or taken any other
nonappealable final action having the effect of permanently restraining,
enjoining or otherwise prohibiting the Merger (which order, decree, ruling
or other action the parties hereto shall have used their best efforts to
lift); or
(iii) if the Company Stockholder Approval shall not have
been obtained at the Stockholders Meeting; or
(c) by Parent, on behalf of itself, PHH and Merger Sub, as
follows:
(i) upon a material breach of any covenant or
agreement set forth in this Agreement (a "Terminating Breach") on the part
of the Company; provided that, if such Terminating Breach is curable on or
prior to the earlier of (A) 60 days following notice of such Terminating
Breach and (B) June 30, 2001 by the Company through the exercise of its
reasonable best efforts and for so long as the Company continues to
exercise such reasonable best efforts, Parent may not terminate this
Agreement under this Section 7.1(c)(i) until the earlier of (A) 60 days
following notice of such Terminating Breach and (B) June 30, 2001; or
(ii) (x) the Independent Committee or the Board shall
(A) withdraw, modify or change its approval or recommendation of this
Agreement,athe Merger or the other Transactions in any manner which Parent
reasonably determines to be adverse to Parent; (B) approve or recommend to
the stockholders of the Company a Third-Party Acquisition or a Superior
Proposal; (C) violate any of the provisions of Section 5.2 hereof; (D) take
any public position or make any disclosures to the Company's stockholders
which has the effect of any of the foregoing; or (E) resolve to enter into
a Company Acquisition Agreement relating to a Third-Party Acquisition or a
Superior Proposal; or (y) the Company shall (A) execute a Company
Acquisition Agreement relating to a Third-Party Acquisition or a Superior
Proposal (B) violate any of the provisions of Section 5.2 hereof; or
(iii) if any representation or warranty of the
Company set forth in this Agreement shall have become untrue or shall have
been untrue when made, if such failure to be true and correct, individually
or in the aggregate, would result in a Material Adverse Effect; provided
that, if such failure is curable on or prior to the earlier of (A) 60 days
following notice of such Terminating Breach and (B) June 30, 2001 by the
Company through the exercise of its reasonable best efforts and for so long
as the Company continues to exercise such reasonable best efforts, Parent
may not terminate this Agreement under this Section 7.1(c)(iii) until the
earlier of (A) 60 days following notice of such Terminating Breach and (B)
June 30, 2001; or
(d) by the Company (provided such termination has been
approved by the Independent Committee) as follows:
(i) upon a Terminating Breach on the part of Parent,
PHH or Merger Sub; provided that, if such Terminating Breach is curable on
or prior to the earlier of (A) 60 days following notice of such Terminating
Breach and (B) June 30, 2001 by Parent, PHH or Merger Sub through the
exercise of its reasonable best efforts and for so long as Parent, PHH and
Merger Sub continue to exercise such reasonable best efforts, the Company
may not terminate this Agreement under this Section 7.1(d)(i) until the
earlier of (A) 60 days following notice of such Terminating Breach and (B)
June 30, 2001; or
(ii) if any representation or warranty of Parent, PHH
or Merger Sub, respectively, set forth in this Agreement shall have been
untrue in any material respect or shall have been untrue in any material
respect when made; provided that, if such failure is curable prior to the
earlier of (A) 60 days following notice of such Terminating Breach and (B)
June 30, 2001 by Parent, PHH or Merger Sub, as the case may be, through the
exercise of its reasonable best efforts and for so long as Parent, PHH or
Merger Sub, as the case may be, continues to exercise such reasonable best
efforts, the Company may not terminate this Agreement under this Section
7.1(d)(ii) until the earlier of (A) 60 days following notice of such
Terminating Breach and (B) June 30, 2001; or
(iii) if, following the Stockholders Meeting, (A) the
Company Stockholder Approval shall not have been obtained, (B) the Company
concurrently executes and delivers a definitive agreement with respect to a
Superior Proposal and (C) the Independent Committee determines in good
faith, after receipt of advice of its outside legal counsel, that a failure
to terminate this Agreement in order to enter into a definitive agreement
with regard to such Superior Proposal would constitute a breach of its
fiduciary duties to the Company's stockholders under applicable law;
provided that, prior to such termination, (x) the Company has given Parent
three (3) Business Days' advance notice of the Company's intention to
accept such Superior Proposal and shall have complied in all respects with
the provisions of Section 2.6 and Section 5.2; and (y) the Company shall
have paid by wire transfer the Fee and the Parent Expenses pursuant to
Section 7.3(b).
7.2 EFFECT OF TERMINATION. In the event of the termination
of this Agreement pursuant to Section 7.1, written notice thereof shall
forthwith be given to the other party or parties specifying the provision
hereof pursuant to which such termination is made, and this Agreement shall
forthwith become void and there shall be no liability on the part of any
party hereto or any of its Affiliates, directors, officers, stockholders,
representatives or agents except for any obligation of the Company or
Parent set forth in Article VII hereof, if any. Notwithstanding the
foregoing, or any other provision of this Agreement (including Section
7.3), nothing herein shall relieve the Company, Parent, PHH or Merger Sub
from liability for any breach hereof.
7.3 FEES AND EXPENSES.
(a) Except as set forth in this Section 7.3, all fees and
expenses incurred in connection with this Agreement and the Transactions
shall be paid by the party incurring such expenses, whether or not the
Merger is consummated.
(b) The Company shall pay, or cause to be paid, to Parent,
the Parent Expenses (as defined below) actually incurred and a fee of
$28,000,000 (the "Fee") upon the first to occur of any of the following
events:
(i) the termination of this Agreement by Parent or the
Company pursuant to subsection (b)(i) of Section 7.1, or the termination of
this Agreement by Parent pursuant to Subsection (c)(i) or (c)(iii) of
Section 7.1; provided, that prior to such termination, the Company becomes
aware that any Person has made or intends to make a proposal relating to a
Third-Party Acquisition and, within twelve months following the date of
such termination, a Third-Party Acquisition is consummated or a definitive
agreement with respect to a Third-Party Acquisition is executed by the
Company;
(ii) the termination of this Agreement by Parent
pursuant to Section 7.1(c)(ii);
(iii) the termination of this Agreement by the
Company pursuant to Section 7.1(d)(iii); or
(iv) the termination of this Agreement by Parent
pursuant to Section 7.1(b)(iii); provided, that a Third-Party Acquisition
shall be publicly announced or otherwise made known to the public at or
prior to the Stockholders Meeting and, within twelve months following the
date of such termination, a Third- Party Acquisition is consummated or a
definitive agreement with respect to a Third- Party Acquisition is executed
by the Company.
(c) "Parent Expenses" means all out-of-pocket expenses and
fees (including fees and expenses payable to all banks, investment banking
agents and counsel for arranging, committing to provide or providing any
financing for the Transactions contemplated hereby or structuring the
Transactions contemplated hereby and all fees of counsel, accountants,
experts and consultants to Parent, PHH and Merger Sub and all printing and
advertising expenses) actually incurred or accrued by either of them or on
their behalf in connection with the Transactions, including the financing
thereof, and actually incurred or accrued by banks, investment banking
firms, other financial institutions and other Persons and incurred by
Parent, PHH and Merger Sub in connection with the negotiation, preparation,
execution and performance of this Agreement, the structuring and financing
of the Transactions and any financing commitments or agreements relating
thereto; provided, however, that in no event shall the amount of Parent
Expenses exceed $2,500,000.
(d) The Fee and Parent Expenses shall be paid by wire
transfer of same day funds to an account designated by Parent within two
Business Days after a demand for payment following the first to occur of
any of the events described in Section 7.3(b); provided that, in the event
of a termination of this Agreement under Section 7.1(d)(iii), the Fee and
Parent Expenses shall be paid as therein provided as a condition to the
effectiveness of such termination.
(e) The agreements contained in this Section 7.3 are an
integral part of the Transactions and do not constitute a penalty. In the
event of any dispute between the Company and Parent as to whether the Fee
and Parent Expenses under this Section 7.3 are due and payable, the
prevailing party shall be entitled to receive from the other party the
reasonable costs and expenses (including reasonable legal fees and
expenses) in connection with any action, including the filing of any
lawsuit or other legal action, relating to such dispute. Interest shall be
paid on the amount of any unpaid Fee or Parent Expenses at the publicly
announced prime rate of Citibank, N.A. from the date such Fee or Parent
Expenses was required to be paid.
ARTICLE VIII
GENERAL PROVISIONS
8.1 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. The representations, warranties and agreements in this
Agreement or in any instrument delivered pursuant to this Agreement shall
not survive the Effective Time of the Merger; provided, that the agreements
contained in Article I, Article II, Sections 5.5 and 5.6 and this Article
VIII shall survive the Effective Time.
8.2 NOTICES. Any notice required to be given hereunder shall
be sufficient if in writing, and sent by facsimile transmission (provided
that any notice received by facsimile transmission or otherwise at the
addressee's location on any Business Day after 5:00 p.m. (addressee's local
time) shall be deemed to have been received at 9:00 a.m. (addressee's local
time) on the next Business Day), by reliable overnight delivery service
(with proof of service), hand delivery or certified or registered mail
(return receipt requested and first-class postage prepaid), addressed as
follows:
If to Parent, PHH or Merger Sub:
Cendant Corporation
0 Xxxxxx Xxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: General Counsel
Telecopier No.: 000-000-0000
with copies to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx Xxxxx Chuff, Esq.
Telecopier No.: 000-000-0000
If to the Company:
Avis Group Holdings, Inc.
World Headquarters
000 Xxx Xxxxxxx Xxxx
Xxxxxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Telecopier No.: 000-000-0000
with copies to:
White & Case LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Telecopier No.: 000-000-0000
and to the Special Committee at:
JER Partners
0000 Xxxxxx Xxxx.
Xxxxx 0000
XxXxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Telecopier: (000) 000-0000
with copies to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopier No.: 212-269-5420
or to such other address as any party shall specify by written notice so
given, and such notice shall be deemed to have been delivered as of the
date so telecommunicated, personally delivered or mailed. Any party to this
Agreement may notify any other party of any changes to the address or any
of the other details specified in this paragraph; provided that such
notification shall only be effective on the date specified in such notice
or five (5) Business Days after the notice is given, whichever is later.
Rejection or other refusal to accept or the inability to deliver
because of changed address of which no notice was given shall be deemed to
be receipt of the notice as of the date of such rejection, refusal or
inability to deliver.
8.3 ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor
any of the rights, interests or obligations hereunder may be assigned by
any of the parties (whether by operation of law or otherwise) without the
prior written consent of the other parties, except that Merger Sub may
assign any of its rights and obligations hereunder to a wholly owned
Subsidiary of Parent which is a Delaware corporation; provided, however,
that no such assignment shall relieve Merger Sub of its obligations
hereunder. Subject to the preceding sentence, this Agreement shall be
binding upon and shall inure to the benefit of the parties and their
respective successors and permitted assigns. Notwithstanding anything
contained in this Agreement to the contrary, except for the provisions of
Sections 5.5 and 5.6, nothing in this Agreement, expressed or implied, is
intended to confer on any Person other than the parties hereto or their
respective heirs, successors, executors, administrators and assigns any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
8.4 ENTIRE AGREEMENT. This Agreement, the Company Disclosure
Letter, the Parent Disclosure Letter and any documents delivered by the
parties in connection herewith constitute the entire agreement among the
parties with respect to the subject matter of this Agreement and supersede
all prior representations, warranties, agreements and understandings among
the parties, both written and oral, with respect thereto, except the
Confidentiality Agreement which shall continue in full force and effect;
provided that if there is any conflict between the Confidentiality
Agreement and this Agreement, this Agreement shall prevail.
8.5 AMENDMENT. Subject to applicable law, this Agreement may
be amended by the parties hereto, by action taken by their respective
boards of directors and, with respect to the Company, by the Independent
Committee, at any time before or after the Company Stockholder Approval,
but after any such Company Stockholder Approval, no amendment shall be made
which by law requires the further approval of stockholders without
obtaining such further approval. This Agreement may not be amended except
by an instrument in writing signed on behalf of each of the parties.
8.6 GOVERNING LAW; CONSENT TO JURISDICTION.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to the
principles of conflicts of laws thereof.
(b) Each of the parties hereto (i) consents to submit itself
to the exclusive personal jurisdiction of any Delaware state court or any
federal court located in the State of Delaware in the event any dispute
arises out of this Agreement or any of the transactions contemplated by
this Agreement and (ii) agrees that it shall not attempt to deny or defeat
such personal jurisdiction by motion or other request for leave from any
such court.
8.7 COUNTERPARTS. This Agreement may be executed by the
parties in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a
number of copies of this Agreement each signed by less than all, but
together signed by all of the parties hereto. This Agreement shall become
effective when one or more counterparts have been signed by each of the
parties and delivered to the other parties.
8.8 HEADINGS. Headings of the Articles and Sections of this
Agreement are for the convenience of the parties only, and shall be given
no substantive or interpretive effect whatsoever.
8.9 INTERPRETATION. When a reference is made in this
Agreement to an Article or Section, such reference shall be to an Article
or Section of this Agreement unless otherwise indicated. The table of
contents to this Agreement is for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement. Whenever
the words "include," "includes" or "including" are used in this Agreement,
they shall be deemed to be followed by the words "without limitation." The
words "hereof," "herein" and "hereunder" and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement. All terms defined in this
Agreement shall have the defined meanings when used in any certificate or
other document made or delivered pursuant thereto unless otherwise defined
therein. The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such term. Any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement instrument or
statute as from time to time amended, modified or supplemented, including
(in the case of agreements or instruments) by waiver or consent and (in the
case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein.
References to a Person are also to its permitted successors and assigns.
Each of the parties has participated in the drafting and negotiation of
this Agreement. If an ambiguity or question of intent or interpretation
arises, this Agreement must be construed as if it is drafted by all the
parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of authorship of any of the provisions of
this Agreement. The inclusion of any matters in the Company Disclosure
Letter or the Parent Disclosure Letter in connection with any
representation, warranty, covenant or agreement that is qualified as to
materiality or "Material Adverse Effect" shall not be an admission by the
Company that such matters is material or would have a Material Adverse
Effect.
8.10 WAIVERS. No action taken pursuant to this Agreement,
including any investigation by or on behalf of any party, shall be deemed
to constitute a waiver by the party taking such action of compliance with
any representations, warranties, covenants or agreements contained in this
Agreement. Any term, covenant or condition of this Agreement may be waived
at any time by the party which is entitled to the benefit thereof, but only
by a written notice signed by such party expressly waiving such term or
condition. The waiver by any party hereto of a breach of any provision
hereunder shall not operate or be construed as a waiver of any prior or
subsequent breach of the same or any other provision hereunder.
8.11 INCORPORATION OF ANNEX AND DISCLOSURE LETTERS. The
Company Disclosure Letter and the Parent Disclosure Letter are hereby
incorporated in this Agreement and made a part of this Agreement for all
purposes as if fully set forth in this Agreement.
8.12 SEVERABILITY. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent (and only to the extent) of such
invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the
validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction. If any provision of this Agreement is
so broad as to be unenforceable, the provision shall be interpreted to be
only so broad as is enforceable. 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 in order that the transactions contemplated hereby are
consummated as originally contemplated to the greatest extent possible.
8.13 ENFORCEMENT OF AGREEMENT. The parties hereto agree that
irreparable damage would occur if any of the provisions of this Agreement
was not performed in accordance with its specific terms or as otherwise
breached and that money damages would not be an adequate remedy for any
breach of this Agreement. It is accordingly agreed that the parties shall
be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this
Agreement in any court referred to in Section 8.6(b), this being in
addition to any other remedy to which they are entitled at law or in equity
or pursuant to this Agreement. In any such action for specific performance,
each of the parties shall waive (i) the defense of adequacy of a remedy at
law and (ii) any requirement for the securing and posting of any bond.
8.14 WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT.
8.15 EXECUTION. This Agreement may be executed by facsimile
signatures by any party and such signature shall be deemed binding for all
purposes hereof, without delivery of an original signature being thereafter
required.
8.16 DATE FOR ANY ACTION. In the event that any date on
which any action is required to be taken hereunder by any of the Parties
hereto is not a Business Day, such action shall be required to be taken on
the next succeeding day which is a Business Day.
8.17 PARTIES IN INTEREST. This Agreement shall be binding
upon and inure solely to the benefit of each Party hereto, and nothing in
this Agreement, express or implied, is intended to or shall confer upon any
other Person any right, benefit or remedy of any nature whatsoever under or
by reason of this Agreement, other than Section 5.5 (which is intended to
be for the benefit of the Persons covered thereby and may be enforced by
such Persons).
8.18 CERTAIN DEFINITIONS. As used in this Agreement:
(a) The term "Affiliate," as applied to any Person, shall
mean any other Person directly or indirectly controlling, controlled by, or
under common control with, that Person; for purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by," "under common control with"), as applied to any Person,
means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of that Person, whether
through the ownership of voting securities, by contract or otherwise.
(b) The term "Associate" has the meaning set forth in Rule
12b-2 under the Exchange Act.
(c) A Person shall be deemed to "beneficially" own
securities if such Person would be the beneficial owner of such securities
under Rule 13d-3 under the Exchange Act, including securities which such
Person has the right to acquire (whether such right is exercisable
immediately or only after the passage of time).
(d) The term "Business Day" means any day on which
commercial banks are open for business in New York, New York other than a
Saturday, a Sunday or a day observed as a holiday in New York, New York
under the laws of the State of New York or the federal laws of the United
States.
(e) The term "Person" shall include individuals,
corporations, partnerships, trusts, limited liability companies,
associations, unincorporated organizations, joint ventures, other entities,
groups (which term shall include a "group" as such term is defined in
Section 13(d)(3) of the Exchange Act), labor unions or Governmental Entity.
(f) The term "Subsidiary," when used with respect to any
party, means any corporation or other organization, whether incorporated or
unincorporated, of which such party directly or indirectly owns or controls
at least a majority of the securities or other interests having by their
terms ordinary voting power to elect a majority of the board of directors
or others performing similar functions with respect to such corporation or
other organization, or any organization of which such party is a general
partner.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have executed this Agreement
and caused the same to be duly delivered on their behalf on the day and
year first written above.
CENDANT CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Chairman, President and
Chief Executive Officer
PHH CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
and General Counsel
AVIS ACQUISITION CORP.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
and General Counsel
AVIS GROUP HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President, Corporate and
Business Affairs, Chief
Financial Officer
DEFINED TERMS
PAGE
Acquisition..........................................................1
Acquisition Group....................................................1
Affiliate...........................................................56
Agreement............................................................1
Associate...........................................................56
Assumed Option.......................................................8
Assumed Option Plan..................................................8
Assumed Option Plans.................................................8
Avis Fleet..........................................................14
Avis License........................................................25
Bear Xxxxxxx........................................................27
Beneficially........................................................56
Board................................................................1
Business Day........................................................56
Car Holdings.........................................................1
Cendant Common Stock.................................................8
Certificate of Merger................................................2
Certificates.........................................................5
Class B Common Stock................................................13
Closing..............................................................3
Closing Date.........................................................3
Code................................................................20
Code................................................................19
Company..............................................................1
Company Acquisition Agreement.......................................34
Company Common Stock.................................................1
Company Disclosure Letter...........................................14
Company SEC Reports.................................................16
Company Stockholder Approval........................................10
Confidentiality Agreement...........................................33
Contract............................................................16
Control.............................................................56
Covered Parties.....................................................37
DGCL.................................................................1
Effective Date.......................................................3
Effective Time.......................................................3
Elected Portion......................................................8
Environmental Claim.................................................25
Environmental Laws..................................................25
ERISA...............................................................19
ERISA Affiliate.....................................................20
Exchange Act........................................................15
Exchange Ratio.......................................................9
Fairness Opinion....................................................13
Fee.................................................................49
GAAP................................................................16
Governmental Entity.................................................15
Hazardous Materials.................................................25
HSR Act.............................................................15
Hyperion............................................................37
Indemnified Liabilities.............................................38
Independent Committee................................................1
Intellectual Property...............................................25
IRS.................................................................19
Letter of Transmittal................................................5
Material Adverse Effect.............................................12
Merger...............................................................1
Merger Consideration.................................................4
Merger Sub...........................................................1
Merger Sub Common Stock..............................................5
Xxxxxx Xxxxxxx.......................................................1
Multiemployer Plan..................................................20
Note Tender Offer...................................................41
Notes...............................................................31
Option...............................................................8
Parent Disclosure Letter............................................28
Parent Expenses.....................................................49
Payment Agent........................................................5
Payment Fund.........................................................5
Permits.............................................................21
Person..............................................................56
PHH..................................................................1
Plan................................................................19
Plans...............................................................19
Preferred Stock.....................................................13
Proxy Statement.....................................................10
Release.............................................................25
Retention Election...................................................8
SEC.................................................................10
Securities Act......................................................16
Shares...............................................................1
Stockholders Meeting................................................10
Subsidiary..........................................................57
Superior Proposal...................................................36
Surviving Corporation................................................2
Tax Return..........................................................19
Taxes...............................................................19
Terminating Breach..................................................47
Third Party.........................................................35
Third-Party Acquisition.............................................35
Transactions.........................................................2
WARN Act............................................................27
