EXHIBIT 10.37
PLAN OF REORGANIZATION
DATED ____________ ____, 2002,
BETWEEN
PACER INTERNATIONAL, INC.,
AND
COYOTE ACQUISITION LLC
TABLE OF CONTENTS
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Page No.
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SECTION 1. Exchange of Stock .............................................1
SECTION 2. Closing; Deliveries at Closing ................................2
SECTION 3. Representations and Warranties of the Company .................2
SECTION 4. Representations and Warranties of the Preferred Shareholders ..3
SECTION 5. Survival of Representations, Warranties and Covenants .........5
SECTION 6. Definitions ...................................................6
SECTION 7. Expenses and Fees .............................................5
SECTION 8. Remedies ......................................................5
SECTION 9. Successors and Assigns ........................................6
SECTION 10. Entire Agreement ..............................................6
SECTION 11. Notices .......................................................6
SECTION 12. Changes .......................................................7
SECTION 13. Counterparts ..................................................7
SECTION 14. Headings ......................................................7
SECTION 15. Severability ..................................................7
SECTION 16. Governing Law .................................................7
PLAN OF REORGANIZATION dated __________ ___, 2002, by and among PACER
INTERNATIONAL, INC., a Tennessee corporation (the "Company"), COYOTE ACQUISITION
LLC, a Delaware limited liability company ("Coyote").
PREAMBLE
The parties hereto desire to provide for the contribution of the assets of
Coyote, as set forth on Schedule 1 hereto, in exchange for common stock, $0.01
par value (the "Common Stock"), of the Company, all as more specifically set
forth herein. Certain capitalized terms used herein have the meanings set forth
in Section 6 hereof.
The Boards of Directors of Coyote and the Company have determined that, as
a result of recent favorable financial developments affecting the value of the
business of Coyote, the Company and the industry they serve, that the business
objectives of Coyote and the Company can best be advanced by an initial public
offering of the underlying business operated by Coyote through its subsidiaries.
Underwriters contacted by Coyote have advised that an initial public offering of
the Company, rather than Coyote, will maximize shareholder value because of
favorable financial accounting treatment available to the Company that would not
be available to Coyote if it were publicly traded; and because the Company has
minority holders (including management). The existence of such Company minority
holders would negatively affect the value of Coyote if it were publicly traded;
moreover, such minority holders require liquidity which they would not have if
Coyote's equity interests, rather than shares of the Company, were publicly
traded. Coyote believes that it is important to its business objectives to
ensure that management's interests are aligned with it and the Company's
interests through equity ownership; a lack of liquidity for management's equity
would undermine this objective. Moreover, underwriters have advised Coyote and
the Company that an initial public offering of a corporation, rather than a
limited liability company, such as Coyote, would be more successful. The
elimination of Coyote will also provide the Company with more diffuse ownership,
enable equity owners of Coyote to make individual investment decisions regarding
the ownership of the Company's stock, and eliminate the administrative burden of
filing a corporate tax return for Coyote. Accordingly, it has been determined
that the Company's Common Stock, rather than Coyote's equity interests, will be
publicly offered, and the business of Coyote will be terminated.
The proposed Plan of Reorganization which, as between the parties to this
Agreement, is intended to qualify as a reorganization within the meaning of
Section 368(a)(1)(C) of the Internal Revenue Code for Federal income tax
purposes and the comparable provisions of the income tax laws of all relevant
states, involves (i) Coyote exchanging all of its assets for shares of new
Common Stock of the Company; (ii) the termination of Coyote's status as a
corporate entity for Federal and state income tax purposes; and (iii) Coyote's
distribution of a substantial portion of the Common Stock received in the
exchange to its members.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
SECTION 1. Contribution. (a) On the terms and subject to the conditions
contained in this Agreement, at the Closing (as defined herein), Coyote shall
transfer, convey and assign to the Company, all of its assets, and, in exchange,
the Company shall issue and deliver to
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Coyote 17,824,000 shares (after giving effect to the two for one
stock split effected by the Company on ___, 2002 (the "Stock Split")) of Common
Stock of the Company. At the Closing, the Company shall accept the contribution
of Coyote's assets.
(b) As soon as practicable following the Closing and in accordance with the
plan of reorganization contemplated by this Agreement, Coyote shall take all
such action as may be necessary or appropriate to terminate its existence as a
corporation for Federal and state income tax purposes and distribute to its
members a substantial portion of their pro-rata share of the Common Stock
received by Coyote in the exchange.
SECTION 2. Closing; Deliveries at Closing.
2.1 Closing. The closing (the "Closing") of the transactions contemplated
hereby shall take place at the offices of X'Xxxxxxxx LLP, 00 Xxxxxxxxxxx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, simultaneously with the execution and delivery of this
Agreement.
2.2 Deliveries at Closing. At the Closing:
(a) Coyote shall deliver to the Company all of its assets, consisting
solely of a certificate or certificates representing shares of Common Stock of
the Company as set forth in Schedule 1 hereto, accompanied by duly executed
stock powers transferring Coyote's shares of Common Stock to the Company, in
each case sufficient in form and substance to convey to the Company good title
to all of Coyote's shares of Common Stock, free and clear of all Encumbrances.
(b) The Company shall deliver to Coyote a certificate, registered in the
name of Coyote, representing 17,824,000 shares of Common Stock of the Company
(after giving effect to the Stock Split).
SECTION 3. Representations and Warranties of the Company to Coyote. The
Company hereby represents and warrants to Coyote as follows:
3.1 Organization, Power, Authority and Good Standing. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Tennessee and has all requisite power and authority (corporate
or otherwise) to own, lease and operate its assets and properties and to carry
on its business as presently conducted and as presently proposed to be
conducted.
3.2 Authority; Authorization, Execution and Delivery; Enforceability. The
Company has all requisite power and authority (corporate or otherwise) to
execute, deliver and perform its obligations under this Agreement, and to
consummate the transactions contemplated hereby. The Company's execution and
delivery of this Agreement, and the performance by the Company of its
obligations hereunder, have been duly and validly authorized by all requisite
action on the part of the Company. This Agreement has been, or upon the
Company's execution hereof will be, duly and validly executed and delivered by
the Company and constitutes, or upon the Company's execution and delivery hereof
will constitute, a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
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moratorium and similar Laws affecting creditors' rights and remedies generally,
and to general principles of equity (regardless of whether enforcement is sought
in a proceeding at law or in equity).
3.3 Consents. No Permit, authorization, consent or approval of or by, or
notification of or filing with, any Person (governmental or otherwise) is
required for, as a result of, or in connection with the execution, delivery and
performance by the Company of this Agreement or the consummation of the
transactions contemplated hereby.
3.4 Issuance of Common Stock. Upon issuance thereof in accordance with the
terms hereof, the shares of Common Stock issued to Coyote in exchange for the
assets of Coyote shall be duly authorized, validly issued, fully paid and
nonassessable.
SECTION 4. Representations and Warranties of Coyote. Coyote represents and
warrants to the Company as follows:
4.1 Title to the Shares. Coyote (i) is the lawful owner, of record and
beneficially, of the assets set forth opposite its name on Schedule I, and (ii)
has good and marketable title to such assets, free and clear of any and all
Encumbrances whatsoever and with no restriction on the voting rights and other
incidents of record and beneficial ownership pertaining thereto. Upon delivery,
transfer and assignment of the certificate representing the assets at Closing,
the Company will obtain good and marketable title to the assets free and clear
of any and all Encumbrances.
4.2 Authority; Authorization, Execution and Delivery; Enforceability.
Coyote has the full and absolute legal right, capacity, power and authority to
execute, deliver and perform its obligations under this Agreement, and to
consummate the transactions contemplated hereby. This Agreement has been, or
upon the execution hereof will be, duly and validly executed and delivered by
Coyote and constitutes, or upon Coyote's execution and delivery hereof, will
constitute, a valid and binding obligation of Coyote, enforceable against it in
accordance with its respective terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws
affecting creditors' rights and remedies generally, and to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or in
equity).
4.3 Consents. No Permit, authorization, consent or approval of
or by, or any notification of or filing with, any Person (governmental or
private) is required for, as a result of, or in connection with the execution,
delivery and performance by Coyote of this Agreement or the consummation of the
transactions contemplated hereby.
4.4 No Conflicts. The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the fulfillment of and
compliance with the terms and conditions hereof do not and will not with the
passing of time or giving of notice (i) violate any provision of any judicial or
administrative order, award, judgment or decree applicable to Coyote or the
assets set forth on Schedule 1, or (ii) conflict with, result in a breach of or
right to cancel or constitute a default under any agreement or instrument to
which Coyote is
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a party, by which Coyote is bound or to which Coyote or the assets set forth on
Schedule I are subject.
4.5 No Claims. There is not suit, action, inquiry, audit, proceeding or
investigation by or before any court or Governmental Entity pending or
threatened against Coyote with respect to the assets set forth on Schedule I.
4.6 Investment Representations.
(a) Coyote is acquiring the Common Stock to be received by it
hereunder for investment for its own account, not as a nominee or agent,
and not with a view to, or for offer or resale in connection with, directly
or indirectly, any distribution thereof (or any interest therein) in
violation of the Securities Act or any other applicable securities laws.
(b) Coyote understands that the shares of Common Stock to be issued to
it in exchange for Coyote's assets have not been registered under the Securities
Act by reason of their issuance by the Company in a transaction exempt from the
registration requirements of the Securities Act which depends upon, among other
things, the bona fide nature of the investment intent and the accuracy of
Coyote's representations and warranties contained in this Agreement; and that
the shares of Common Stock must be held by Coyote indefinitely unless a
subsequent disposition thereof is registered under the Securities Act or is
exempt from such registration.
(c) Coyote acknowledges that, except as is expressly set forth in this
Agreement, neither the Company nor any person representing the Company has made
any representations with respect to the Company, the Company's initial public
offering of its Common Stock (the "IPO") or the Common Stock.
(d) Coyote understands that an investment in the Common Stock involves
substantial risk. Coyote has experience as an investor in securities of
companies and acknowledges that it is able to fend for itself, can bear the
economic risk of its investment in the Common Stock, including a total loss of
its investment, and has such knowledge and experience in financial or business
matters that he is capable of evaluating the merits and risks of an investment
in the Common Stock and protecting its own interests in connection with this
investment.
(e) Coyote understands that the Common Stock to be received by it
hereunder in exchange for Coyote's assets are "restricted securities" as defined
in Rule 144 under the Securities Act inasmuch as they are being acquired from
the Company in a transaction not involving a public offering and that under the
Securities Act and applicable regulations thereunder such securities may be
resold without registration under the Securities Act only in certain limited
circumstances. Coyote is familiar with Rule 144, as presently in effect, and
understands the resale limitations imposed thereby and by the Securities Act.
Coyote further understands that the exemption from registration afforded by Rule
144 depends on the satisfaction of various conditions, and that, if applicable,
Rule 144 may afford the basis for sales only in limited amounts.
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(f) Coyote further understands that the shares of Common Stock to be issued
to Coyote in exchange for Coyote's assets will bear the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER THE ACT OR UNLESS THE COMPANY
HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
(g) Coyote is an "accredited investor" as such term is defined in Rule 501
promulgated under the Securities Act. SECTION 5. Survival of Representations,
Warranties and Covenants. All representations and warranties of the Company and
Coyote contained herein shall survive the Closing. All statements contained in
any certificate or other instrument delivered by the Company or Coyote pursuant
to this Agreement or in connection with the transactions contemplated by this
Agreement shall constitute representations and warranties by the Company or
Coyote under this Agreement, as the case may be. All covenants contained herein
shall survive indefinitely until, by their respective terms, they are no longer
operative.
SECTION 6. Definitions. Capitalized terms used and not otherwise defined
herein have the meanings ascribed to them below:
"Encumbrances" means and includes security interests, mortgages, liens,
pledges, charges, easements, reservations, restrictions, rights of way,
servitudes, options, rights of first refusal, community property interests,
equitable interests, restrictions of any kind and all other encumbrances,
whether or not relating to the extension of credit or the borrowing of money.
"Governmental Entity" means any domestic or foreign government or political
subdivision thereof, whether on a federal, state, provincial or local level and
whether legislative, executive, judicial in nature, including any agency,
authority, board, bureau, commission, court, department or other instrumentality
thereof.
"Law" means any applicable domestic or foreign law, statute, treaty, rule,
directive, regulation, ordinance or similar provision having the force or effect
of law, whether on a federal, state, provincial or local level, or any
applicable order of any Governmental Entity.
"Permit" means all permits, licenses, authorizations, registrations,
franchises, approvals, consents, certificates, variances and similar rights
obtained, or required to be obtained, from a Governmental Entity.
"Person" shall be construed as broadly as possible and shall include an
individual or natural person, a partnership (including a limited liability
partnership), a corporation, a limited liability company, an association, a
joint stock company, a trust, a joint venture, an unincorporated organization, a
business, a Governmental Entity, and any other entity.
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"Securities Act" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Securities and
Exchange Commission promulgated thereunder, all as the same shall be in effect
from time to time.
SECTION 7. Expenses. Each party to this Agreement shall bear its own
expenses incurred in connection with this Agreement and the transactions
contemplated by this Agreement.
SECTION 8. Remedies. In case any one or more of the covenants or agreements
set forth in this Agreement shall have been breached by any party hereto, the
party or parties entitled to the benefit of such covenants or agreements may
proceed to protect and enforce their rights by suit in equity and/or by action
at law, including, but not limited to, an action for damages as a result of any
such breach and/or an action for specific performance of any such covenant or
agreement contained in this Agreement. The rights, powers and remedies of the
parties under this Agreement are cumulative and not exclusive of any other
right, power or remedy which such parties may have under any other agreement or
law. No single or partial assertion or exercise of any right, power or remedy of
a party hereunder shall preclude any other or further assertion or exercise
thereof.
SECTION 9. Successors and Assigns. Except as otherwise expressly provided
herein, this Agreement shall bind and inure to the benefit of the Company,
Coyote, and each of their respective successors and assigns.
SECTION 10. Entire Agreement. This Agreement contains the entire agreement
among the parties with respect to the subject matter hereof and supersedes all
prior and contemporaneous arrangements or understandings with respect thereto.
SECTION 11. Notices. All notices, requests, consents and other
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument given by personal delivery, telex, telecopier
or telegram, by overnight courier or by first class registered or certified
mail, postage prepaid, addressed to such party at the address set forth below or
such other address as may hereafter be designated in writing by the addressee to
the other persons listed below:
(i) if to the Company, to:
Pacer International, Inc.
0000 Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
(ii) if to Coyote, to:
c/o Apollo Management, L.P.
1301 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
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Attention: Xxxxxx Xxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
All such notices, requests, consents and other communications shall be deemed to
have been received (a) in the case of personal delivery, telex, telecopier or
telegram, on the date of such delivery, (b) in the case of overnight courier, on
the next business day and (c) in the case of mailing, on the third business day
following the date of such mailing.
SECTION 12. Changes. The terms and provisions of this Agreement may not be
modified or amended, nor any of the provisions hereof waived, temporarily or
permanently, except pursuant to an instrument in writing signed by the party
against whom the enforcement of any such modification, amendment or waiver is
sought.
SECTION 13. Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be eemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
SECTION 14. Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference nly and shall not be
deemed to be a part of this Agreement.
SECTION 15. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and performed wholly therein except to the extent that mandatory
provisions of the laws of the State of Tennessee or the State of Delaware shall
be required to be applied with respect to the Company and Coyote, respectively.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.
PACER INTERNATIONAL, INC.
By:________________________________
Name:
Title:
COYOTE ACQUISITION LLC
By:________________________________
Name:
Title:
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Schedule 1
Assets of Coyote
Shares Represented Shares Represented
Common Stock By Certificate By Certificate
Certificate No. (pre Stock Split) (post Stock Split)
--------------------- ------------------------- ------------------------------
8,912,000 17,824,000
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