Exhibit 99.1
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AGREEMENT AND PLAN OF MERGER
by and among
GENESEE & WYOMING INC.,
ETR ACQUISITION CORPORATION
and
EMONS TRANSPORTATION GROUP, INC.
Dated as of December 3, 2001
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TABLE OF CONTENTS
ARTICLE I The Merger...........................................................1
1.1 The Merger..........................................................1
1.2 Closing.............................................................1
1.3 Effective Time......................................................2
1.4 Effects of the Merger...............................................2
1.5 Conversion of Company Common Stock..................................2
1.6 Options, Warrants and Restricted Stock..............................3
1.7 Certificate of Incorporation........................................4
1.8 Bylaws..............................................................4
1.9 Directors and Officers of Surviving Corporation.....................4
1.10 Alternate Transaction Structures...................................4
ARTICLE II Exchange of Shares..................................................5
2.1 Establishment of Exchange Fund......................................5
2.2 Exchange of Shares..................................................5
ARTICLE III Representations and Warranties of Company..........................6
3.1 Corporate Organization..............................................6
3.2 Capitalization......................................................8
3.3 Authority; No Violation.............................................9
3.4 Consents and Approvals.............................................10
3.5 Regulatory Reports.................................................11
3.6 Broker's Fees; Opinion of Company Financial Advisor................11
3.7 Absence of Certain Changes or Events...............................12
3.8 Legal Proceedings..................................................12
3.9 Taxes and Tax Returns..............................................12
3.10 Employees.........................................................15
3.11 SEC Reports.......................................................17
3.12 Financial Statements..............................................18
3.13 Licenses; Compliance with Applicable Law..........................18
3.14 Certain Contracts.................................................18
3.15 Agreements with Regulatory Agencies...............................20
3.16 Investment Securities.............................................20
3.17 Interest Rate Risk Management Instruments.........................20
3.18 Undisclosed Liabilities...........................................20
3.19 Environmental Liability...........................................21
3.20 Information Supplied..............................................21
3.21 Insurance.........................................................22
3.22 Intellectual Property.............................................22
3.23 Rights Agreement..................................................22
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3.24 State Anti-Takeover Statutes......................................22
3.25 Properties........................................................23
3.26 Relations with Principal Customers................................23
ARTICLE IV Representations and Warranties of Parent and Sub...................24
4.1 Corporate Organization.............................................24
4.2 Authority; No Violation............................................24
4.3 Consents and Approvals.............................................25
4.4 Broker's Fees......................................................25
4.5 Information Supplied...............................................25
4.6 Financial Capability...............................................25
ARTICLE V Covenants Relating to Conduct of Business...........................25
5.1 Conduct of Company Businesses Prior to the Effective Time..........25
5.2 Forbearances of Company............................................26
5.3 Transition.........................................................28
5.4 Notification of Tax Proceedings....................................29
ARTICLE VI Additional Agreements..............................................29
6.1 Company Stockholders Meeting; Preparation of Proxy Statement.......29
6.2 Reasonable Best Efforts............................................30
6.3 Access to Information..............................................31
6.4 Indemnification; Directors' and Officers' Insurance................32
6.5 Additional Agreements..............................................33
6.6 Advice of Changes..................................................33
6.7 No Solicitation....................................................33
6.8 Publicity..........................................................35
6.9 Stockholder Litigation.............................................35
6.10 Anti-Takeover Provisions..........................................35
6.11 Stop Transfer.....................................................35
6.12 Parent Other Actions..............................................36
ARTICLE VII Conditions Precedent..............................................36
7.1 Conditions to Each Party's Obligation To Effect the Merger.........36
7.2 Conditions to Company's Obligations to Effect the Merger...........37
7.3 Conditions to Parent's and Sub's Obligations to Effect the Merger..37
ARTICLE VIII Termination and Amendment........................................38
8.1 Termination........................................................38
8.2 Effect of Termination..............................................40
8.3 Amendment..........................................................41
8.4 Extension; Waiver..................................................41
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ARTICLE IX General Provisions.................................................41
9.1 Nonsurvival of Representations, Warranties and Agreements..........41
9.2 Expenses...........................................................42
9.3 Notices............................................................42
9.4 Interpretation.....................................................43
9.5 Counterparts; Facsimile............................................43
9.6 Entire Agreement...................................................43
9.7 Governing Law......................................................43
9.8 Severability.......................................................43
9.9 Assignment; Third Party Beneficiaries..............................43
9.10 Enforcement........................................................44
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of December 3, 2001 (this
"AGREEMENT") by and among GENESEE & WYOMING INC., a Delaware corporation
("PARENT"), ETR ACQUISITION CORPORATION, a Delaware corporation and a wholly
owned subsidiary of Parent ("SUB"), and EMONS TRANSPORTATION GROUP, INC., a
Delaware corporation ("Company").
WHEREAS, the respective Boards of Directors of Parent, Sub and Company
have determined that the merger of Sub with and into Company (the "MERGER"),
with Company as the surviving corporation of the Merger (the "SURVIVING
CORPORATION"), upon the terms and subject to the conditions set forth in this
Agreement, is advisable and fair to and in the best interests of their
respective stockholders;
WHEREAS, as an inducement and condition to Parent and Sub entering into
this Agreement, and concurrently with the execution of this Agreement, certain
officers and directors of Company are executing and delivering to Parent a
Voting Agreement (the "SUPPORT AGREEMENT") dated as of the date hereof; and
WHEREAS, the parties desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also to
prescribe certain conditions therefor.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and intending to be
legally bound hereby, the parties agree as follows:
ARTICLE I
The Merger
1.1 THE MERGER. Subject to the terms and conditions of this Agreement
and in accordance with the Delaware General Corporation Law (the "DGCL"), at the
Effective Time (as defined in Section 1.3), Sub shall merge with and into
Company. Company shall be the Surviving Corporation in the Merger and shall
continue its corporate existence under the laws of the State of Delaware. Upon
consummation of the Merger, the separate corporate existence of Sub shall
terminate.
1.2 CLOSING. Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant to Section
8.1, the closing of the Merger (the "CLOSING") shall take place at 10:00 a.m.,
New York City time, on the second business day after satisfaction or waiver of
the conditions (excluding conditions that, by their terms, cannot be satisfied
until the Closing Date (as defined in this Section 1.2), but subject to
satisfaction or waiver of such conditions on the Closing Date) set forth in
Article VII (the "CLOSING DATE"), at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx,
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless another date, time or
place is agreed to in writing by the parties hereto.
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1.3 EFFECTIVE TIME. As soon as practicable following the Closing, the
parties shall file a certificate of merger (the "CERTIFICATE OF MERGER") with
the Secretary of State of the State of Delaware and shall make all other filings
or recordings required under the DGCL. The Merger shall become effective at such
time as the Certificate of Merger shall have been duly filed with the Secretary
of State of the State of Delaware, or at such later time as is agreed by Parent
and Company and specified in the Certificate of Merger (the time the Merger
becomes effective being the "EFFECTIVE TIME").
1.4 EFFECTS OF THE MERGER. At and after the Effective Time, the Merger
shall have the effects set forth in the DGCL, including Sections 259, 260 and
261 of the DGCL.
1.5 CONVERSION OF COMPANY COMMON STOCK. At the Effective Time by virtue
of the Merger and without any action on the part of Parent, Sub, Company or the
holder of any of the following securities:
(a) Each share of common stock, par value $0.01 per share, of Company
(the "COMPANY COMMON STOCK"), together with the associated common stock
purchase rights (the "COMPANY RIGHTS") under the Company Rights Agreement
(as defined in Section 3.23) issued and outstanding immediately prior to the
Effective Time (other than shares of Company Common Stock canceled pursuant
to Section 1.5(c) and Dissenting Shares, as defined in Section 1.5(d)) shall
be converted into the right to receive $2.50 in cash payable to the holder
thereof, without interest thereon (the "MERGER CONSIDERATION"), less any
required withholding taxes.
(b) All of the shares of Company Common Stock and Company Rights issued
and outstanding immediately prior to the Effective Time shall no longer be
outstanding and shall automatically be canceled and shall cease to exist as
of the Effective Time, and each certificate (each a "COMMON CERTIFICATE")
previously representing any such shares of Company Common Stock and Company
Rights (other than shares canceled pursuant to Section 1.5(c) and Dissenting
Shares) shall thereafter represent solely the right to receive the Merger
Consideration into which the shares of Company Common Stock and Company
Rights represented by such Common Certificate have been converted pursuant
to this Section 1.5.
(c) At the Effective Time, all shares of Company Common Stock that are
held by Company as treasury stock, if any, or by Parent or any of Parent's
wholly owned Subsidiaries (as defined in Section 3.1(a)) shall automatically
be canceled and shall cease to exist, and no cash, stock of Parent or other
consideration shall be delivered in exchange therefor.
(d) Notwithstanding anything in this Agreement to the contrary, shares
of Company Common Stock issued and outstanding immediately prior to the
Effective Time held by holders (if any) who have not voted in favor of the
Merger or consented thereto in writing and who have demanded appraisal
rights with respect thereto in accordance with Section 262 of the DGCL and,
as of the Effective Time, have not failed to perfect or have not effectively
withdrawn or lost their rights to appraisal and payment under Section 262 of
the DGCL ("DISSENTING SHARES") shall not be converted into the right to
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receive the Merger Consideration as described in Section 1.5(a), but holders
of such shares shall be entitled to receive payment of the appraised value
of such Dissenting Shares in accordance with the provisions of such Section
262, except that any Dissenting Shares held by a holder who shall have
failed to perfect or shall have effectively withdrawn or lost its right to
appraisal and payment under Section 262 of the DGCL shall thereupon be
deemed to have been converted into the right to receive the Merger
Consideration, less any required withholding taxes, and shall no longer be
considered Dissenting Shares. Any holder of Dissenting Shares who becomes
entitled to payment for such holder's Company Common Stock pursuant to such
Section 262 of the DGCL shall receive payment therefor from the Surviving
Corporation. Company shall give Parent (i) prompt notice of any written
demands for appraisal of any shares, attempted withdrawals of such demands
and any other instruments served pursuant to the DGCL received by Company
relating to stockholders' rights of appraisal and (ii) the opportunity to
direct all negotiations and proceedings with respect to demands for
appraisal under the DGCL. Company shall not, except with the prior written
consent of Parent, voluntarily make any payment with respect to any demands
for appraisals of capital stock of Company, offer to settle or settle any
such demands or approve any withdrawal of any such demands.
(e) Each share of common stock, par value $.01 per share, of Sub issued
and outstanding immediately prior to the Effective Time shall be converted
into one identical share of the common stock of the Surviving Corporation
and shall constitute the only issued and outstanding capital stock of the
Surviving Corporation following the Effective Time.
1.6 OPTIONS, WARRANTS AND RESTRICTED STOCK. (a) Immediately prior to
the Effective Time, each employee, consultant and director stock option to
purchase shares of Company Common Stock (each, a "COMPANY OPTION") and each
Company Warrant (as defined in Section 3.2) which is then outstanding and
unexercised, whether or not then exercisable, shall be (or, if not previously
vested and exercisable, shall become) vested and exercisable (provided that any
Company Option or Company Warrant as to which the per share exercise price
exceeds the Merger Consideration shall not be exercisable and shall be canceled
without consideration therefor) and such Company Options and Company Warrants
immediately thereafter shall be canceled by Company pursuant to this Section
1.6, and each holder of a canceled Company Option or Company Warrant shall be
entitled to receive at the Effective Time or as soon as practicable thereafter
from Company in consideration for the cancellation of such Company Option or
Company Warrant an amount in cash equal to the product of (i) the number of
shares of Company Common Stock previously subject to such Company Option or
Company Warrant and (ii) the excess, if any, of the Merger Consideration over
the exercise price per share of Company Common Stock previously subject to such
Company Option or Company Warrant, less any applicable withholding taxes.
(b) Immediately prior to the Effective Time, each share of restricted
Company Common Stock held by an employee, consultant or director of Company or
its Subsidiaries ("COMPANY RESTRICTED STOCK"), which is then outstanding and
restricted, shall become vested and such Company Restricted Stock immediately
thereafter shall be converted into the right to receive Merger Consideration.
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(c) Company shall (i) take all actions necessary and appropriate so
that all stock or other equity based plans maintained with respect to Company
Common Stock (the "COMPANY STOCK PLANS"), including, without limitation, the
plans listed in Section 3.10(a) of the Company Disclosure Schedule, shall
terminate as of the Effective Time and that any other Employee Plan (as
hereinafter defined in Section 3.10) providing for the issuance, transfer or
grant of any capital stock of Company or any interest in respect of any capital
stock of Company shall be amended to provide that no further issuances, transfer
or grants shall be permitted as of the Effective Time and (ii) provide that,
following the Effective Time, no holder of a Company Option, a Company Warrant
or Company Restricted Stock or any participant in any Company Stock Plan shall
have any right thereunder to acquire or receive any capital stock of Company,
Parent or the Surviving Corporation. Prior to the Effective Time, Company shall
use reasonable best efforts to (x) obtain all necessary consents from, and
provide (in a form acceptable to Parent) any required notices to, holders of
Company Options and Company Restricted Stock and (y) amend the terms of the
applicable Company Stock Option, Company Restricted Stock and Company Stock
Plan, in each case as is necessary to give effect to the provisions of this
Section 1.6.
1.7 CERTIFICATE OF INCORPORATION. Subject to the terms and conditions
of this Agreement, at the Effective Time, the certificate of incorporation of
Company, as in effect immediately prior to the Effective Time, shall be the
certificate of incorporation of the Surviving Corporation until thereafter
amended as provided therein and by the DGCL.
1.8 BYLAWS. Subject to the terms and conditions of this Agreement, at
the Effective Time, the bylaws of Company, as in effect immediately prior to the
Effective Time, shall be the bylaws of the Surviving Corporation until
thereafter amended as provided therein and by the DGCL.
1.9 DIRECTORS AND OFFICERS OF SURVIVING CORPORATION. At the Effective
Time, the directors and officers of Sub immediately prior to the Effective Time
shall be the directors and officers, respectively, of the Surviving Corporation
following the Merger, to hold office in accordance with the Surviving
Corporation's bylaws and applicable law.
1.10 ALTERNATE TRANSACTION STRUCTURES. The parties agree that Parent
may at any time change the method of effecting the Merger, including by merging
Company with and into Parent or by merging Company with and into a direct or
indirect wholly owned subsidiary of Parent, and Company shall cooperate in such
efforts, including by entering into an appropriate amendment to this Agreement;
PROVIDED, HOWEVER, that any such actions shall not (a) alter or change the
amount or kind of consideration to be issued to holders of Company Common Stock,
Company Options or Company Warrants as provided for in this Agreement or the
timing of payment therefor as provided herein, (b) adversely affect the tax
treatment to Company's stockholders as a result of receiving the Merger
Consideration, or (c) materially delay or make materially more difficult the
receipt of any approval referred to in Section 7.1(b) or the consummation of the
transactions contemplated by this Agreement.
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ARTICLE II
Exchange of Shares
2.1 ESTABLISHMENT OF EXCHANGE FUND. Prior to the Effective Time, Parent
shall designate a bank or trust company to act as exchange agent (the "EXCHANGE
AGENT") for the payment of the Merger Consideration. At or prior to the
Effective Time, Parent shall deposit, or shall cause to be deposited, with the
Exchange Agent, for the benefit of the holders of Common Certificates, for
exchange in accordance with this Article II, cash (such cash being hereinafter
referred to as the "EXCHANGE FUND") to be paid pursuant to Section 2.2(a) in
exchange for outstanding shares of Company Common Stock.
2.2 EXCHANGE OF SHARES. (a) As soon as practicable after the Effective
Time, the Exchange Agent shall mail to each holder of record as of the Effective
Time of one or more Common Certificates (other than with respect to shares of
Company Common Stock canceled pursuant to Section 1.5(c)) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Common Certificates shall pass, only upon delivery of the
Common Certificates to the Exchange Agent) and instructions for use in effecting
the surrender of the Common Certificates in exchange for the Merger
Consideration. Upon proper surrender of a Common Certificate for exchange and
cancellation to the Exchange Agent, together with such properly completed letter
of transmittal, duly executed, covering such Common Certificate, the holder of
such Common Certificate shall be entitled to receive in exchange therefor a
check representing the amount of the Merger Consideration, less any required
withholding taxes, and the Common Certificate so surrendered shall forthwith be
canceled. No interest will be paid or accrued on the Merger Consideration
payable to holders of Common Certificates.
(b) If the payment of the Merger Consideration is to be made to a
person other than the registered holder of the Common Certificate surrendered in
exchange therefor, it shall be a condition to the payment thereof that the
Common Certificate so surrendered shall be properly endorsed (or accompanied by
an appropriate instrument of transfer) and otherwise in proper form for
transfer, and that the person requesting such exchange shall pay to the Exchange
Agent in advance any transfer or other taxes required by reason of the issuance,
delivery or payment of such Merger Consideration to any person other than the
registered holder of the Common Certificate surrendered, or required for any
other reason, or shall establish to the satisfaction of the Exchange Agent that
such tax has been paid or is not payable.
(c) After the Effective Time, there shall be no transfers on the stock
transfer books of Company of the shares of Company Common Stock, which were
issued and outstanding immediately prior to the Effective Time. If, after the
Effective Time, Common Certificates representing such shares are presented for
transfer to the Exchange Agent, they shall be canceled and exchanged for the
applicable Merger Consideration as provided in this Article II.
(d) Any portion of the Exchange Fund that remains unclaimed by the
stockholders of Company for 6 months after the Effective Time shall be paid to
Parent. Any stockholders of Company who have not theretofore complied with this
Article II shall thereafter look only to Parent for payment of the Merger
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Consideration, without any interest thereon. Notwithstanding the foregoing, none
of the Surviving Corporation, Parent, the Exchange Agent or any other person
shall be liable to any former holder of shares of Company Common Stock for any
Merger Consideration delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws.
(e) In the event any Common Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Common Certificate to be lost, stolen or destroyed and, if reasonably
required by Parent, the posting by such person of a bond in such amount as
Parent may determine is reasonably necessary as indemnity against any claim that
may be made against it with respect to such Common Certificate, the Exchange
Agent will issue in exchange for such lost, stolen or destroyed Common
Certificate the Merger Consideration.
(f) All cash paid upon the surrender of the Common Certificates in
accordance with the terms of Articles I and II shall be deemed to have been paid
in full satisfaction of all rights pertaining to the shares of the Company
Common Stock and Company Rights theretofore represented by such Common
Certificates; SUBJECT, HOWEVER, to the Surviving Corporation's obligation, with
respect to shares of Company Common Stock outstanding immediately prior to the
Effective Time, to pay any dividends or make any other distributions with a
record date prior to the Effective Time which may have been declared or made by
Company on such shares of Company Common Stock in accordance with the terms of
this Agreement or prior to the date of this Agreement and which remain unpaid at
the Effective Time.
(g) The Exchange Agent shall invest any funds in the Exchange Fund as
directed by Parent; PROVIDED, that such investments shall be in obligations of
or guaranteed by the United States of America, in commercial paper obligations
rated A-1 or P-1 or better by Xxxxx'x Investors Services, Inc. or Standard &
Poor's Corporation, respectively, or in certificates of deposit, bank repurchase
agreements or banker's acceptances of commercial banks with capital exceeding
$500 million. Any interest and other income resulting from such investments
shall be paid to Parent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF COMPANY
Company hereby represents and warrants to Parent and Sub as follows:
3.1 CORPORATE ORGANIZATION. (a) Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Company has all requisite corporate power and authority to own or
lease all of its properties and assets and to carry on its business as it is now
being conducted, and is duly licensed or qualified to do business and in good
standing in each jurisdiction (whether federal, state, local or foreign) in
which the nature of the business conducted by it or the character or location of
the properties and assets owned or leased by it makes such licensing or
qualification necessary, except where the failure to be so licensed or qualified
(individually or in the aggregate) could not reasonably be expected to have a
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Material Adverse Effect on Company. As used in this Agreement, (i) the term
"MATERIAL ADVERSE EFFECT" means, with respect to Company, a material adverse
effect on the business, assets (tangible or intangible), liabilities,
operations, condition (financial or otherwise), results of operations or
prospects of Company and its Subsidiaries taken as a whole, or on the ability of
Company to perform its obligations under and to consummate the transactions
contemplated by this Agreement on a timely basis; PROVIDED, HOWEVER, that in
determining whether a Material Adverse Effect has occurred there shall be
excluded any effect the cause of which is (A) a change (including a change in
general economic conditions) affecting railroad transportation companies
generally, (B) any action or omission of Company or Parent taken with the prior
consent of Parent or Company, as applicable, in contemplation of the Merger and
(C) any action not taken or omission made by Company because the consent thereto
reasonably requested by Company from Parent to conduct ordinary business
operations was denied or not acted upon in a timely manner by Parent; and (ii)
the term "SUBSIDIARY" when used with respect to any party means any corporation
or other organization, whether incorporated or unincorporated, (x) of which such
party or any other Subsidiary of such party is a general partner (excluding
partnerships, the general partnership interests of which held by such party or
any Subsidiary of such party do not have a majority of the voting interests in
such partnership), or (y) a majority of the securities or other interests of
which having by their terms ordinary voting power to elect a majority of the
board of directors or other body performing similar functions with respect to
such corporation or other organization is directly or indirectly owned or
controlled by such party or by any one or more of its Subsidiaries, or by such
party and one or more of its Subsidiaries. Section 3.1(a) of the Company
disclosure schedule delivered to Parent concurrently herewith (the "COMPANY
DISCLOSURE SCHEDULE") contains true and complete copies of the certificate of
incorporation and bylaws of Company, as in effect as of the date of this
Agreement. Such organizational documents are in full force and effect and no
other organizational documents are applicable to or binding upon Company.
Company is not in violation of any of the provisions of its certificate of
incorporation or bylaws.
(b) Part I of Section 3.1(b) of the Company Disclosure Schedule sets
forth a complete and correct list of all of Company's Subsidiaries (each a
"COMPANY SUBSIDIARY", and collectively the "COMPANY SUBSIDIARIES") and
indicates, as to each such Subsidiary, the number and type of outstanding shares
of capital stock or other equity securities of each such Subsidiary, any issued
and outstanding options, warrants, stock appreciation rights, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, shares of any capital stock or other
equity securities of such Subsidiary, and any contracts, commitments,
understandings or arrangements by which such Subsidiary may become bound to
issue additional shares of its capital stock or other equity securities, or
options, warrants, scrip, rights to purchase, acquire, subscribe to, calls on or
commitments for any shares of its capital stock or other equity securities and
the identity of the parties to any such agreements or arrangements. All of the
outstanding shares of capital stock or other securities evidencing ownership of
the Company Subsidiaries have been duly authorized and validly issued and are
fully paid and non-assessable with no personal liability attaching to the
ownership thereof and such shares or other securities are owned by Company or
its wholly owned Subsidiaries free and clear of any lien, claim, charge, option,
encumbrance, mortgage, pledge or security interest (a "LIEN") with respect
thereto, except for Liens thereon in connection with the Company's Amended and
Restated Loan and Security Agreement dated as of December 21, 1998 with LaSalle
National Bank (the "LASALLE AGREEMENT"). Each Company Subsidiary (i) is a duly
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organized and validly existing corporation, partnership or limited liability
company or other legal entity under the laws of its jurisdiction of
organization, (ii) is duly licensed or qualified to do business and in good
standing in all jurisdictions (whether federal, state, local or foreign) where
its ownership or leasing of property or the conduct of its business requires it
to be so qualified (except for jurisdictions in which the failure to be so
licensed or qualified (individually or in the aggregate) could not reasonably be
expected to have a Material Adverse Effect on Company) and (iii) has all
requisite corporate power and authority to own or lease all of its properties
and assets and to carry on its business as now conducted. Except for (i) the
ownership interests set forth in Part II of Section 3.1(b) of the Company
Disclosure Schedule and (ii) the ownership interests in its Subsidiaries
disclosed in Part I of Section 3.1(b) of the Company Disclosure Schedule,
Company does not own, directly or indirectly, any capital stock or other
ownership interest, and does not have any option or similar right to acquire any
equity or other ownership interest which represents 5% or more of the
outstanding shares of any class of voting securities or ownership interests in
any entity. Part III of Section 3.1(b) of the Company Disclosure Schedule
provides a complete and accurate description of all partnership, joint venture
and similar investments held by Company or any Company Subsidiary, including,
without limitation, all such investments in which any Company employee or
affiliate serves as a director. Company has provided or made available to Parent
a complete and accurate copy of all such partnership, joint venture or similar
agreements to which Company or any Company Subsidiary is a party. Neither
Company nor any Company Subsidiary is subject to any obligation or requirement
to provide funds to, or make any investment (in the form of a loan, capital
contribution or otherwise) in, any entity.
(c) Company has made available to Parent the minute books of Company,
which accurately reflect in all material respects all corporate meetings and
actions held or taken since June 30, 1998 by its stockholders and Board of
Directors (including committees of the Board of Directors of Company).
3.2 CAPITALIZATION. The authorized capital stock of Company consists of
30,000,000 shares of Company Common Stock and 3,000,000 shares of $.14 Series A
Cumulative Convertible Preferred Stock, par value $0.01 per share (the
"Preferred Stock"). As of November 30, 2001, (i) 7,909,592 shares of Company
Common Stock were issued and outstanding, (ii) 832,788 shares of Company Common
Stock were held in treasury, (iii) no shares of Preferred Stock were issued or
outstanding, (iv) certain shares of Company Common Stock that were reserved for
issuance upon the exercise of the Company Rights and (v) 50,000 shares of
Company Common Stock were reserved for issuance upon the exercise of warrants to
purchase 50,000 shares of Company Common Stock ("COMPANY WARRANTS"). All of the
issued and outstanding shares of Company Common Stock have been duly authorized
and validly issued and are fully paid, non-assessable and free of preemptive
rights, with no personal liability attaching to the ownership thereof. The
shares of Company Common Stock which are issuable upon exercise of Company
Options or Company Warrants have been duly authorized and reserved for issuance
and, if and when issued pursuant to the terms thereof, will be validly issued,
fully paid and non-assessable and free of preemptive rights, with no personal
liability attaching to the ownership thereof. Part I of Section 3.2 of the
Company Disclosure Schedule sets forth, in each case as of November 30, 2001,
(i) the number of shares of Company Common Stock that were reserved for issuance
upon the exercise of authorized but unissued stock options pursuant to the
Company Stock Plans, (ii) the number of shares of Company Common Stock issuable
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upon the exercise of outstanding Company Options pursuant to the Company Stock
Plans and (iii) the number of shares of Company Common Stock that were reserved
for issuance under Company's restricted stock plans or otherwise. Part III of
Section 3.2 of the Company Disclosure Schedule sets forth a list, as of November
30, 2001, of the holders of record of the Company Warrants the number of shares
subject to each such Company Warrant, the expiration date of each such Company
Warrant and the price at which each such Company Warrant may be exercised.
Except as set forth above in this Section 3.2 or in Part I or Part II of Section
3.2 of the Company Disclosure Schedule, no other shares of Company Common Stock,
capital stock or other equity or voting securities of Company were outstanding
or reserved for issuance. Part II of Section 3.2 of the Company Disclosure
Schedule sets forth a list, as of November 30, 2001, of the holders of Company
Options, the date of grant of each Company Option granted and outstanding, the
number of shares subject to each such option, the expiration date of each such
option, the vesting schedule of each such option and the price at which each
such option may be exercised under the applicable Company Stock Plan. Except as
set forth in Part III of Section 3.2 of the Company Disclosure Schedule, since
June 30, 2001, Company has not (i) issued any shares of its capital stock or
other equity or voting securities or any securities convertible into or
exercisable or exchangeable for any shares of its capital stock or other equity
or voting securities or (ii) taken any action which would cause an antidilution
adjustment under any outstanding options or warrants. There are no outstanding
bonds, debentures, notes or other indebtedness of Company having the right to
vote (or convertible into, or exchangeable or exercisable for, securities having
the right to vote) on any matters on which stockholders of Company may vote.
Except as set forth above, there are no outstanding securities, options,
warrants, calls, rights, commitments, agreements, arrangements or undertakings
of any kind to which Company or any of its Subsidiaries is a party or by which
any of them is bound obligating Company or any of its Subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
capital stock or other equity or voting securities of Company or of any of its
Subsidiaries or obligating Company or any of its Subsidiaries to issue, grant,
extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. There are no outstanding
contractual obligations, commitments, understandings or arrangements of Company
or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares
of capital stock of Company or any of its Subsidiaries. Except as set forth in
Part IV of Section 3.2 of the Company Disclosure Schedule, there are no
agreements or arrangements pursuant to which Company is or could be required to
register shares of Company Common Stock or other securities under the Securities
Act of 1933, as amended (the "SECURITIES ACT"), or other agreements or
arrangements with or, to the knowledge of Company, among any securityholders of
Company with respect to securities of Company. There are no voting, sale,
transfer or other similar agreements to which Company or any of its Subsidiaries
is a party with respect to the capital stock of Company or its Subsidiaries or
any other securities of Company or its Subsidiaries which are convertible or
exchangeable into or exercisable for shares of the capital stock of Company or
its Subsidiaries. None of the shares of Company Common Stock are held, directly
or indirectly, by any of the Company Subsidiaries.
3.3 AUTHORITY; NO VIOLATION. (a) Company has all requisite corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The Board of Directors of Company, at a
meeting duly called and held, has (the "COMPANY BOARD RECOMMENDATION") (i)
determined that this Agreement and the transactions contemplated hereby,
including the Merger, are advisable and fair to and in the best interests of the
10
holders of shares of Company Common Stock, (ii) duly approved and adopted a
resolution containing this Agreement and approved the execution and delivery of
this Agreement and the transactions contemplated hereby, including the Merger,
and approved the execution and performance of the Support Agreement, and (iii)
resolved to recommend that the holders of shares of Company Common Stock vote to
approve and adopt this Agreement. The Board of Directors of Company has directed
that this Agreement be submitted to Company's stockholders for approval at a
meeting of such stockholders and, except for the adoption of this Agreement by
the affirmative vote of the holders of a majority of the outstanding shares of
Company Common Stock entitled to vote thereon in connection with the Merger (the
"COMPANY STOCKHOLDER APPROVAL") and the approval and filing of the Proxy
Statement (as defined in Section 6.1), no other corporate proceedings on the
part of Company or the Board of Directors of Company and no other votes or
consents of any holders of Company securities are necessary to approve this
Agreement and to consummate the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by Company and (assuming due
authorization, execution and delivery by Parent and Sub) constitutes the valid
and binding obligation of Company, enforceable against Company in accordance
with its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, and general equitable principles (whether
considered in a proceeding in equity or at law).
(b) Neither the execution and delivery of this Agreement by Company nor
the consummation by Company of the transactions contemplated hereby, nor
compliance by Company with any of the terms or provisions hereof, will (i)
violate any provision of the certificate of incorporation or bylaws (or other
constituent documents) of Company or any Company Subsidiary or (ii) assuming
that the consents and approvals referred to in Section 3.4 are duly obtained,
violate any statute, code, ordinance, rule, regulation, judgment, order, writ,
decree or injunction applicable to Company or any of its Subsidiaries or any of
their respective properties or assets, or violate, conflict with, result in a
breach of any provision of or the loss of any benefit under, constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, result in the termination of or a right of
termination or cancellation under, accelerate the performance required by or
rights or obligations under, or result in the creation of any Lien upon any of
the respective properties or assets of Company or any of its Subsidiaries under,
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, permit, concession, franchise, license, lease,
agreement, contract, or other instrument or obligation to which Company or any
of its Subsidiaries is a party, or by which they or any of their respective
properties, assets or business activities may be bound or affected, except in
the case of clause (ii) above for such violations, conflicts, breaches or
defaults which, either individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect on Company.
3.4 CONSENTS AND APPROVALS. Except for (i) the Surface Transportation
Board's exemption or approval of the Merger and the Support Agreement and the
Canadian Transportation Administration's approval of the Merger (the "REGULATORY
APPROVALS"), (ii) the filing with the Securities and Exchange Commission (the
"SEC") of the Schedule 14A containing the Proxy Statement (as defined herein),
(iii) the filing of the Certificate of Merger with the Secretary of State of the
State of Delaware pursuant to the DGCL, (iv) the expiration of any applicable
waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
11
as amended (the "HSR Act"), (v) the Company Stockholder Approval, (vi) the
filing with the SEC of such reports under the Securities Exchange Act of 1934,
as amended (the "EXCHANGE ACT"), as may be required in connection with the
execution and delivery of this Agreement and the transactions contemplated
hereby, (vii) the third party consents set forth on Section 3.4 of the Company
Disclosure Schedule (the "THIRD PARTY CONSENTS") and (viii) such other consents,
approvals, filings and registrations the failure to obtain which could not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect on Company, no consents or approvals of or filings or
registrations with any court, administrative agency or commission or other
governmental or regulatory authority or instrumentality (each a "GOVERNMENTAL
ENTITY"), or of or with any Regulatory Agency (as defined in Section 3.5) or
other third party, are necessary in connection with the execution and delivery
by Company of this Agreement and the consummation by Company of the transactions
contemplated by this Agreement. To the best knowledge of Company, there is no
reason to believe that the Regulatory Approvals and Third Party Consents
required to consummate the transactions contemplated by this Agreement (the
"REQUISITE APPROVALS") cannot be obtained on a timely basis.
3.5 REGULATORY REPORTS. Company and each of its Subsidiaries have filed
all regulatory reports, schedules, forms, registrations and other documents,
together with any amendments required to be made with respect thereto, that they
were required to file since June 30, 1998 with (i) the SEC, (ii) any domestic or
foreign industry self-regulatory organization ("SRO") and (iii) any other
federal, state or foreign governmental or regulatory agency or authority
(collectively with the SEC and all SROs, "REGULATORY AGENCIES"), and have timely
paid all taxes, fees and assessments due and payable in connection therewith,
except as to (ii) and (iii) where the failure to file such report, registration
or statement or to pay such fees and assessments, either individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect on Company. Except as disclosed in Section 3.5 of the Company Disclosure
Schedule and for normal examinations conducted by a Regulatory Agency in the
regular course of the business of Company and its Subsidiaries, no Regulatory
Agency has initiated any proceeding or, to the knowledge of Company,
investigation into the business or operations of Company or any of its
Subsidiaries since June 30, 1998 involving a potential penalty or fine of more
than $25,000. There is no material unresolved violation, criticism or exception
by any Regulatory Agency with respect to any report or statement relating to any
examinations of Company or any of its Subsidiaries.
3.6 BROKER'S FEES; OPINION OF COMPANY FINANCIAL ADVISOR. (a) No broker,
finder or investment banker (other than Xxxxxx, Xxxxx Xxxxx, Incorporated (the
"COMPANY FINANCIAL ADVISOR"), whose fee shall be paid by Parent) is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement. Company has furnished to Parent a
complete and correct copy of all agreements between Company and the Company
Financial Advisor pursuant to which such firm would be entitled to any payment
relating to the transactions contemplated hereby.
(b) Company has received the written opinion of the Company Financial
Advisor dated the date of this Agreement, to the effect that the Merger
Consideration is fair to the holders of the Company Common Stock from a
financial point of view, a signed copy of which opinion has been delivered to
Parent.
12
3.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. (a) Since June 30, 2001,
except as specifically disclosed in the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 2001 (the "SEPTEMBER 10-Q"), no event,
change or circumstance has occurred which has had, or could reasonably be
expected to result in, individually or in the aggregate, a Material Adverse
Effect on Company.
(b) Except as set forth in Section 3.7(b) of the Company Disclosure
Schedule or specifically disclosed in the September 10-Q, since June 30, 2001,
Company and its Subsidiaries have, in all material respects, carried on their
respective businesses only in the ordinary and usual course consistent with
their past practices.
(c) Except as disclosed in Section 3.7(c) of the Company Disclosure
Schedule or specifically disclosed in the September 10-Q, since June 30, 2001,
there has not occurred any event that, if it had taken place following the
execution of this Agreement, would not have been permitted by Section 5.2
without the prior consent of Parent.
(d) Except as set forth in Section 3.7(d) of the Company Disclosure
Schedule or specifically disclosed in the September 10-Q, since June 30, 2001,
there has not been any (i) increase in the compensation or fringe benefits of
any present or former director, officer or employee of Company or its
Subsidiaries (except for increases in salary or wages in the ordinary course of
business consistent with past practice), (ii) grant of any severance or
termination pay to any present or former director, officer or employee of
Company or its Subsidiaries, (iii) loan or advance of money or other property by
Company or its Subsidiaries to any of their present or former directors,
officers or employees or (iv) establishment, adoption, entrance into, amendment
or termination of any Employee Plan (as hereinafter defined in Section 3.10).
3.8 LEGAL PROCEEDINGS. Except as set forth in Section 3.8 of the
Company Disclosure Schedule, there are no suits, actions, counterclaims,
proceedings (whether judicial, arbitral, administrative or other) or
governmental, or regulatory investigations pending or, to the best knowledge of
Company, threatened against or affecting Company or any of its Subsidiaries
which could, either individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect on Company. There is not any judgment,
decree, injunction, rule or order of any Governmental Entity or arbitrator
outstanding against Company or any of its Subsidiaries having, or which
individually or in the aggregate could reasonably be expected to have, a
Material Adverse Effect on Company.
3.9 TAXES AND TAX RETURNS. (a) Company and each of its Subsidiaries,
and any consolidated, combined, unitary or aggregate group for tax purposes of
which Company or any of its Subsidiaries is or has been a member, has filed all
Tax Returns (as defined below) required to be filed by it on or prior to the
date hereof in the manner provided by law. If not yet filed, such Tax Returns
will be filed within the time prescribed by law (including extensions of time
permitted by the appropriate Taxing Authority). All such Tax Returns are true,
correct and complete in all material respects. Company and each of its
Subsidiaries has paid or will pay on a timely basis all Taxes (as defined below)
whether or not shown thereon to be due other than Taxes which (i) are being
contested in good faith, (ii) have not been finally determined and (iii) for
which an adequate reserve has been provided in accordance with GAAP. No claim
has been made by any Taxing authority in a jurisdiction where any of Company or
13
its Subsidiaries does not file Tax Returns with respect to one or more
particular types of Taxes that it is or may be subject to such type or types of
Tax by that jurisdiction.
(b) Except as set forth in Section 3.9(b) of the Company Disclosure
Schedule, there are no examinations, audits, actions, proceedings,
investigations or disputes pending, or claims asserted, for Taxes upon Company
or any of its Subsidiaries which, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on Company. No closing
agreements, private letter rulings, technical advice memoranda or similar
agreements or rulings have been entered into or issued by any Taxing Authority
with respect to Company or any of its Subsidiaries that have an impact on any
Taxes for any taxable period ending after the Closing Date.
(c) Proper and accurate amounts for all Taxes have been withheld by
Company and its Subsidiaries in connection with amounts paid or owing on or
prior to the date hereof to any employee, officer, creditor, stockholder,
independent contractor or other person in compliance with the tax withholding
provisions of applicable federal, state and local laws and have been paid,
remitted or deposited to or with the appropriate Taxing Authorities except for
such amounts, the failure of which to so withhold, either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect on
Company. If not yet withheld, proper and accurate amounts for all Taxes will be
so withheld and will be paid, remitted or deposited to or with the appropriate
Taxing Authorities within the time prescribed by law (including extensions of
time permitted by the appropriate Taxing Authority).
(d) There are no Tax liens upon any property or assets of Company or
any of its Subsidiaries except liens for Taxes not yet due and payable.
(e) None of Company and its Subsidiaries has filed a consent under
section 341(f) of the Code concerning collapsible corporations. None of Company
and its Subsidiaries has been required to include in income any adjustment
pursuant to section 481 of the Code (or any similar provision of state, local or
foreign tax law) by reason of a voluntary change in accounting method initiated
by Company or any of its Subsidiaries, and the IRS has not initiated or proposed
any such adjustment or change in accounting method. None of Company or any of
its Subsidiaries has been a United States real property holding corporation
within the meaning of section 897(c)(2) of the Code during the applicable period
specified in section 897(c)(1)(A)(ii) of the Code.
(f) Neither Company nor any of its Subsidiaries (i) has been a member
of an affiliated group filing consolidated federal income tax return (other than
a group the common parent of which was Company), (ii) is a party to, or is bound
by or has any obligation under, a Tax allocation or Tax sharing agreement (other
than an agreement solely among members of a group the common parent of which is
Company) or similar contract, agreement or arrangement that obligates it to make
any payment computed by reference to the Taxes, taxable income or taxable losses
of any other person, or (iii) has any liability for the Taxes of any person
(other than any of Company or its Subsidiaries) under Treasury Regulation
section 1.1502-6 (or any similar provision of state, local or foreign law), as a
transferee or successor, by contract or otherwise.
14
(g) Neither Company nor its Subsidiaries shall be required to include
in its taxable income in any taxable period ending after the Closing Date any
material amounts (i) attributable to income accrued, but not recognized, in a
prior taxable period or (ii) that were taken into account as income for
financial accounting purposes prior to the Closing Date other than those amounts
for which deferred taxes have been provided.
(h) As of the Closing Date, Company and its direct and indirect
domestic, wholly owned, corporate Subsidiaries will have not less than
$31,000,000 (thirty-one million dollars) of available net operating losses for
U.S. federal income tax purposes. Section 3.9(h) of the Company Disclosure
Schedule accurately sets out the amounts of such net operating losses, (broken
down by entity incurring the loss and the year in which each such loss arose) of
Company and each of its Subsidiaries, which are or will be available for
carryover to taxable periods beginning after the Closing Date. Prior to the
Closing Date, there has not been any change of ownership of Company or any of
its Subsidiaries within the meaning of Section 382 of the Code and the Treasury
Regulations thereunder or any other limitation on the utilization of such net
operating losses.
For purposes of this Agreement, "CODE" shall mean the U.S. Internal
Revenue Code of 1986, as amended, or any successor law. For purposes of this
Agreement, "TAX" or "TAXES" shall mean any taxes of any kind, including but not
limited to those on or measured by or referred to as income, gross receipts,
capital, sales, use, ad valorem, franchise, profits, license, withholding,
payroll, employment, excise, severance, stamp, occupation, premium, value added,
property or windfall profits taxes, customs duties or similar fees, assessments
or charges of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts imposed by any governmental authority,
domestic or foreign. For purposes of this Agreement, "TAXING AUTHORITY" shall
mean, with respect to any Tax, the government entity or political subdivision
thereof that imposes such Tax and the agency (if any) charged with the
collection of such Tax for such entity or subdivision. For purposes of this
Agreement, "TAX RETURN" shall mean any return, report or statement required to
be filed with any governmental authority with respect to Taxes, including any
schedule or attachment thereto or amendment thereof. For purposes of this
Agreement, "TREASURY REGULATIONS" shall mean the Treasury Regulations
promulgated under the Code.
15
3.10 EMPLOYEES. (a) Section 3.10(a) of the Company Disclosure Schedule
contains a true and complete list of each "employee benefit plan" (within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations promulgated thereunder ("ERISA")
including, without limitation, multiemployer plans within the meaning of ERISA
Section 3(37)) and each employment, severance or similar contract or arrangement
(whether or not written) and each plan, policy, fund, program, contract or
arrangement (whether or not written) providing for compensation, bonus,
profit-sharing, stock options, other stock related rights, other forms of
incentive or deferred compensation, vacation benefits, insurance coverage
(including any self-insured arrangements), health or medical benefits,
disability benefits, workers' compensation, supplemental unemployment benefits,
severance benefits, or post-employment or retirement benefits that (i) is
entered into, maintained, administered or contributed to by Company, any of its
Subsidiaries, or any entity which, together with Company or any of its
Subsidiaries, would be treated as a single employer under Section 414 of the
Code (each such entity, an "ERISA AFFILIATE") and (ii) covers any current or
former employee, consultant, independent contractor or director of or with
respect to Company or any of its Subsidiaries (each, an "EMPLOYEE PLAN").
Company has furnished to Parent accurate and complete copies of the Employee
Plans (or, to the extent no copy exists, an accurate description thereof) (and,
to the extent applicable, related trust agreements), all amendments thereto, all
written interpretations thereof, as well as, with respect to each Employee Plan
if applicable, (i) the three most recent annual reports (Form 5500 and attached
schedules), (ii) audited financial statements for the three most recent years,
(iii) actuarial valuation reports for the three most recent years, (iv)
attorney's response to auditor's request for information and (v) any summary
plan description and other written communications (or a description of any oral
communications) by Company or its Subsidiaries to their employees concerning the
extent of the benefits provided under an Employee Plan.
(b) Except as set forth in Section 3.10(b) of the Company Disclosure
Schedule, none of Company, any of its Subsidiaries or any ERISA Affiliate has at
any time incurred any current or projected liability in respect of
post-employment or post-retirement health, medical or life insurance benefits
for current, former or retired employees or directors of Company or any of its
Subsidiaries, except as required to avoid an excise tax under Section 4980B of
the Code.
(c) Except as set forth in Section 3.10(c) of the Company Disclosure
Schedule, each Employee Plan that is intended to be qualified under Section
401(a) of the Code is so qualified and has been so qualified during the period
since its adoption and nothing has occurred, whether by action or failure to
act, that could reasonably be expected to cause the loss of such qualification;
each trust created under any such Plan is exempt from tax under Section 501(a)
of the Code and has been so exempt since its creation. Company has provided
Parent with the most recent determination letter of the Internal Revenue Service
relating to each such Employee Plan. Each Employee Plan has been maintained in
substantial compliance with its terms and with the requirements prescribed by
any and all applicable statutes, orders, rules and regulations, including but
not limited to ERISA and the Code, and has been maintained in good standing with
applicable regulatory authorities. No event has occurred and no condition exists
that would subject Company or its Subsidiaries, either directly or by reason of
their affiliation with an ERISA Affiliate, to any tax, fine, lien, penalty or
other liability imposed by ERISA, the Code or other applicable laws, rules and
regulations which, either individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect on Company. For each Employee
16
Plan with respect to which a Form 5500 has been filed, no material change has
been occurred with respect to the matters covered by the most recent Form since
the date thereof. No "reportable event" (as such term is defined in ERISA
section 4043), "prohibited transaction" (as such term is defined in ERISA
section 406 and Code section 4975) or "accumulated funding deficiency" (as such
term is defined in ERISA section 302 and Code section 412 (whether or not
waived)) has occurred with respect to any Employee Plan which, either
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect on Company. All awards, grants or bonuses made pursuant
to any Employee Plan have been, or will be, fully deductible to Company or its
Subsidiaries notwithstanding the provisions of Section 162(m) of the Code and
the regulations promulgated thereunder or any other applicable laws, rules and
regulations.
(d) There has been no amendment to, written interpretation of or
announcement (whether or not written) by Company or any of its Subsidiaries or
ERISA Affiliates relating to, or any change in employee participation or
coverage under, any Employee Plan that would increase materially the expense of
maintaining such Employee Plan above the level of the expense incurred in
respect thereof for the most recent fiscal year ended prior to the date hereof.
(e) With respect to each Employee Plan that is not a multiemployer plan
within the meaning of section 4001(a)(3) of ERISA, as of the Closing Date, the
assets of each such Employee Plan are at least equal in value to the present
value of the accrued benefits (vested and unvested) of the participants in such
Employee Plan on a termination and projected benefit obligation basis, based on
the actuarial methods and assumptions indicated in the most recent actuarial
valuation reports.
(f) With respect to any multiemployer plan (within the meaning of ERISA
section 4001(a)(3)) to which Company, its Subsidiaries or any ERISA Affiliate
has any liability or contributes (or has at any time contributed or had an
obligation to contribute): (i) none of Company, its Subsidiaries or any ERISA
Affiliate has incurred any withdrawal liability under Title IV of ERISA or would
be subject to such liability if, as of the Closing Date, Company, its
Subsidiaries or any ERISA Affiliate were to engage in a complete withdrawal (as
defined in ERISA section 4203) or partial withdrawal (as defined in ERISA
section 4205) from any such multiemployer plan; and (ii) no such multiemployer
plan is in reorganization or insolvent (as those terms are defined in ERISA
sections 4241 and 4245, respectively).
(g) With respect to any Employee Plan, (i) no actions, suits or claims
(other than routine claims for benefits in the ordinary course) are pending or
threatened, (ii) no facts or circumstances exist that could give rise to any
such actions, suits or claims, (iii) no written or oral communication has been
received from the Pension Benefit Guaranty Corporation (the "PBGC") in respect
of any Employee Plan subject to Title IV of ERISA concerning the funded status
of any such plan or any transfer of assets and liabilities from any such plan in
connection with the transactions contemplated herein, and (iv) no administrative
investigation, audit or other administrative proceeding by the Department of
Labor, the PBGC, the Internal Revenue Service or other governmental agencies are
pending, threatened or in progress.
(h) Except as set forth in Section 3.10(h) of the Company Disclosure
Schedule, no Employee Plan exists that, as a result of the transaction
17
contemplated by this Agreement, could result in the payment to any current or
former employee of Company or any of its Subsidiaries of any money or other
property or could result in the acceleration or provision of any other rights or
benefits to any such employee, whether or not such payment, right or benefit
would constitute a parachute payment within the meaning of Code section 280G.
(i) Except as set forth in Section 3.10(i) of the Company Disclosure
Schedule and other than as provided in Section 1.6, no employee or former
employee of Company or any of its Subsidiaries will become entitled to any
bonus, retirement, job security or similar benefit or enhanced such benefit as a
result of the transactions contemplated by this Agreement.
(j) Other than specified in Part I of Section 3.10(j) of the Company
Disclosure Schedule, neither Company nor any of its Subsidiaries is a party to
any collective bargaining or other labor union contracts or is the subject of
any proceeding asserting that it or any Subsidiary has committed an unfair labor
practice nor has Company or any of its Subsidiaries been the subject of any such
proceeding during the past five years. During the past five years there has
been, and as of the date of this Agreement there is, no pending or, to the
knowledge of Company, threatened labor dispute, strike or work stoppage against
Company or any of its Subsidiaries which interfered or would interfere with the
respective business activities of Company or its Subsidiaries. During the past
five years there has been, and as of the date of this Agreement there is, no
action, suit, complaint, charge, arbitration, inquiry, proceeding, grievance or
investigation by or before any court, government agency, administrative agency
or commission brought by or on behalf of any employee, prospective employee,
former employee, retiree or other representative of Company's employees pending
or, to the knowledge of Company, threatened against Company or any of its
Subsidiaries other than any which could not, individually or in the aggregate,
have a Material Adverse Effect on Company. Neither Company nor any of its
Subsidiaries is a party to or otherwise bound by, any consent, decree, or
citation by any government entity relating to employees or employment practices.
Except as specified in Part I of Section 3.10(j) of the Company Disclosure
Schedule, neither Company nor any of its Subsidiaries has closed any facility,
effectuated any layoffs of employees other than in the ordinary course of
business or implemented any early retirement, separation or voluntary separation
window program within the past five years, nor has Company planned or announced
any such action or program for the future. Except as set forth in Part II of
Section 3.10(j) of the Company Disclosure Schedule, neither Company nor any of
its Subsidiaries is liable for any severance pay or other payments to any
employee or former employee arising from the termination of employment, nor will
Company or any of its Subsidiaries have any liability under any benefit or
severance policy, practice, agreement, plan or program which exists or arises,
or may be deemed to exist or arise, under any applicable law or otherwise, as a
result of or in connection with the transactions contemplated hereunder or as a
result of the termination by Company or any of its Subsidiaries of any employee
on or prior to the Closing Date.
3.11 SEC REPORTS. Company has made available to Parent an accurate and
complete copy of each (a) final registration statement, prospectus, report,
schedule, form and definitive proxy statement filed since June 30, 1997 by
Company with the SEC pursuant to the Securities Act or the Exchange Act
(collectively, and in each case including all exhibits and schedules thereto and
documents incorporated by reference therein, the "COMPANY REPORTS"), and (b)
communication mailed by Company to its stockholders since June 30, 1997 and
which are not available on the SEC's Electronic Data Gathering, Analysis and
18
Retrieval ("XXXXX") System. As of their respective dates of filing or mailing,
as the case may be, each Company Report and each such communication complied in
all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such Company Report or communication, and
as of such dates no such Company Report or communication (including any and all
financial statements included therein) contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances in which they were made, not misleading. Since June 30, 1998,
Company and each of its Subsidiaries has filed all reports and other documents
required to be filed by them under the Securities Act and the Exchange Act on a
timely basis.
3.12 FINANCIAL STATEMENTS. Each of the consolidated financial
statements (including the notes thereto) included in the Company Reports
complied as to form, as of their respective dates of filing with the SEC, in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles ("GAAP") (except, in
the case of unaudited consolidated quarterly statements, as permitted by Form
10-Q of the SEC) applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto) and fairly present in all
material respects the consolidated financial position of Company and its
Subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended. The books and records of
Company and its Subsidiaries have been, and are being, maintained in all
material respects in accordance with GAAP and any other applicable legal and
accounting requirements.
3.13 LICENSES; COMPLIANCE WITH APPLICABLE LAW. (a) Company and its
Subsidiaries hold, and have been and are in compliance with, all permits,
licenses, variances, exemptions, authorizations, orders and approvals
("PERMITS") of all Governmental Entities necessary for the operation of their
respective businesses, except to the extent that the failure to so hold or
comply with such Permits could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on Company, and there are no
proceedings pending or, to the best knowledge of Company, threatened or
contemplated by any Governmental Entity seeking to terminate, revoke or
materially limit any such Permit, nor, to the best knowledge of Company, do
adequate grounds exist for any such action by any Governmental Entity.
(b) Neither Company nor any of its Subsidiaries nor the conduct of any
of their respective businesses is in conflict with, or in default or violation
of, any statutes, laws, regulations, ordinances, Permits, rules, judgments,
decrees or arbitration awards of any Governmental Entity applicable to Company
or any of its Subsidiaries or by which its or any of their respective properties
are bound or affected, except for any such conflicts, defaults or violations
which could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on Company.
3.14 CERTAIN CONTRACTS. Section 3.14 of the Company Disclosure Schedule
includes a list of each (i) contract, arrangement, commitment or understanding
with respect to the employment of any directors, executive officers or key
employees, or with any consultants involving the payment of $25,000 or more per
annum, (ii) contract, arrangement, commitment or understanding which is a
"material contract" (as such term is defined in Item 601(b)(10) of Regulation
19
S-K of the SEC) that has not been filed as an exhibit to a Company Report, (iii)
contract, arrangement, commitment or understanding which limits in any way the
ability of Company or any of its Subsidiaries to compete in any line of
business, in any geographic area or with any person, or which requires referrals
of any business, (iv) contract, arrangement, commitment or understanding with or
to a labor union or guild (including any collective bargaining agreement), (v)
contract, arrangement, commitment or understanding (including, without
limitation, any Company Employee Plan but excluding options, warrants and other
securities identified in Section 3.2 or in Section 3.2 of the Company Disclosure
Schedule) any of the benefits of which will be paid or increased, or the vesting
of the benefits of which will be accelerated, by the delivery of this Agreement
or the occurrence of any of the transactions contemplated by this Agreement, or
the value of any of the benefits of which will be calculated on the basis of any
of the transactions contemplated by this Agreement, (vi) contract, arrangement,
commitment or understanding which would prohibit or materially delay the
consummation of any of the transactions contemplated by this Agreement, (vii)
loan agreement, indenture, mortgage, pledge, conditional sale or title retention
agreement, security agreement, guaranty, standby letter of credit (to which
Company or any of its Subsidiaries is the responsible party), equipment lease
involving the payment of more than $15,000 in any year or lease purchase
agreement to which Company or any of its Subsidiaries is a party or by which any
of them is bound, (viii) contract, agreement, arrangement or understanding
between any affiliate of Company (other than any wholly owned Subsidiary of
Company), on the one hand, and Company or any Subsidiary of Company, on the
other hand, and (ix) any other contract, arrangement, commitment or
understanding that is material to the business, assets, liabilities, financial
condition or results of operations of Company and its Subsidiaries, taken as a
whole (provided, that for purposes of this clause (ix) any contract,
arrangement, commitment or understanding involving payments or receipts by
Company or any of its Subsidiaries in excess of $250,000 over the term thereof
shall be deemed to be material). Company has made available to Parent complete
and accurate copies of all Company Contracts (as defined below). Each contract,
arrangement, commitment or understanding of the type described in this Section
3.14, whether or not set forth in Section 3.14 of the Company Disclosure
Schedule, is referred to herein as a "COMPANY CONTRACT". All contracts,
agreements, arrangements or understandings of any kind between any affiliate of
Company (other than any wholly owned Subsidiary of Company), on the one hand,
and Company or any Subsidiary of Company, on the other hand, are on terms no
less favorable to Company or to such Subsidiary of Company than could reasonably
have been obtained with an unaffiliated third party on an arm's-length basis.
None of Company or any of its Subsidiaries is in material breach of or default
in the performance of its obligations under any Company Contract, and no
material breach or default, alleged breach or default or event which would (with
the passage of time, notice or both) constitute a material breach or default
thereunder by Company or any of its Subsidiaries (or, to the knowledge of
Company, any other party or obligor with respect thereto) has occurred, or,
assuming the receipt of the Third Party Consents, as a result of its performance
of its obligations pursuant to this Agreement will occur. To the extent that
Company or any of its Subsidiaries has been, since June 30, 1998, in material
breach of or default in performance of its obligations under any Company
Contract, such breach or default, together with all such other breaches or
defaults, could not reasonably be expected to have a Material Adverse Effect on
Company. To the knowledge of Company, each Company Contract is in full force and
effect.
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3.15 AGREEMENTS WITH REGULATORY AGENCIES. Neither Company nor any of
its Subsidiaries is subject to any cease-and-desist or other order issued by, or
is a party to any written agreement, consent agreement or memorandum of
understanding with, or is a party to any commitment letter or similar
undertaking to, or is subject to any order or directive issued by, or is a
recipient of any supervisory letter from or has adopted any board resolutions at
the request of, any Regulatory Agency or other Governmental Entity that
restricts the conduct of its business or that in any manner relates to its
capital adequacy, its credit policies, its management or its business (each,
whether or not set forth in the Company Disclosure Schedule, a "COMPANY
REGULATORY AGREEMENT"), nor has Company or any of its Subsidiaries been advised
since January 1, 1998 by any Regulatory Agency or other Governmental Entity that
it is considering issuing or requesting any such Company Regulatory Agreement.
3.16 INVESTMENT SECURITIES. Each of Company and its Subsidiaries has
good and marketable title to all investment securities held by it, free and
clear of any Lien, except to the extent such securities are pledged in the
ordinary course of business consistent with prudent business practices to secure
obligations of Company or any of its Subsidiaries. Such investment securities
are valued on the books of Company in accordance with GAAP.
3.17 INTEREST RATE RISK MANAGEMENT INSTRUMENTS. Section 3.17 of the
Company Disclosure Schedule sets forth the notional amount and the fair value of
each interest rate swap, cap, floor and option agreement and other interest rate
risk management arrangement, each foreign currency rate derivative and each fuel
cost derivative entered into for the account of Company and one of its
Subsidiaries, and such instruments, whether entered into for the account of
Company or one of its Subsidiaries, were entered into in the ordinary course of
business and, to Company's knowledge, in accordance, in all material respects,
with prudent business practice and applicable rules, regulations and policies of
any Regulatory Authority and with counterparties reasonably believed by Company
to be financially responsible at the time and are legal, valid and binding
obligations of Company or one of its Subsidiaries and to the best knowledge of
Company of the other parties thereto enforceable in accordance with their terms
(except as may be limited by bankruptcy, insolvency, moratorium, reorganization
or similar laws affecting the rights of creditors generally and the availability
of equitable remedies), and to the best knowledge of Company are in full force
and effect. Company and each of its Subsidiaries have duly performed in all
material respects all of their material obligations thereunder to the extent
that such obligations to perform have accrued, and, to Company's knowledge,
there are no material breaches, violations or defaults or allegations or
assertions of such by any party thereunder.
3.18 UNDISCLOSED LIABILITIES. Except for (i) those liabilities that are
fully reflected or reserved for in the consolidated balance sheet of Company
(including the footnotes thereto) included in its Annual Report on Form 10-K for
the year ended June 30, 2001 or specifically disclosed in the September 10-Q, in
each case as filed with the SEC, (ii) liabilities disclosed in Section 3.18 of
the Company Disclosure Schedule and (iii) liabilities in the aggregate not in
excess of $100,000 incurred since June 30, 2001 in the ordinary course of
business consistent with past practice, at June 30, 2001, neither Company nor
any of its Subsidiaries had, and since such date none of them has, incurred any
liabilities or obligations of any nature whatsoever (whether accrued, absolute,
contingent or otherwise and whether or not required to be reflected in Company's
financial statements in accordance with GAAP).
21
3.19 ENVIRONMENTAL LIABILITY. Except as set forth in Section 3.19 of
the Company Disclosure Schedule, there are no judicial, legal, administrative,
arbitral or other proceedings including any notice of violation or alleged
violation, claims, actions, causes of action, private environmental
investigations or remediation activities or governmental investigations of any
nature seeking to impose, or that could reasonably result in the imposition, on
Company or any of its Subsidiaries of any liability or obligation arising under
common law or under any law, rule, order, guideline, code, decree, statute,
regulation or ordinance or other legally enforceable requirement of any foreign
government, the United States, or any state, local, municipal or other
government authority relating to the protection of the environment or human
health or to occupational health or safety including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended ("ENVIRONMENTAL LAWS"), pending or threatened against Company or any of
its Subsidiaries, which liability or obligation could reasonably be expected to
result, individually or in the aggregate, in a Material Adverse Effect on
Company. To the knowledge of Company, there is no reasonable basis for any such
proceeding, claim, action or governmental investigation, nor is Company or any
of its Subsidiaries the recipient of any request for information or, to the best
knowledge of Company, the subject of any investigation in connection with any
such proceeding or potential proceeding. Except as disclosed in Section 3.19 of
the Company Disclosure Schedule and except as could not reasonably be expected
to result, individually or in the aggregate, in a Material Adverse Effect on
Company, Company and each of its Subsidiaries is, and has been, in compliance
with all applicable Environmental Laws during all applicable statute of
limitations periods. Except as disclosed in Section 3.19 of the Company
Disclosure Schedule and except as could not reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Effect on Company,
wastes or other materials regulated under, or that could result in liability
under, Environmental Laws, including without limitation petroleum and petroleum
products, asbestos, and polychlorinated biphenyls, have not been generated,
transported, treated, stored, disposed of, arranged to be disposed of, released
or threatened to be released at, on, from or under any of the properties or
facilities currently or formerly owned, leased or otherwise used by Company in
violation of, or in a manner or to a location that could reasonably be expected
to give rise to liability to Company under or relating to, any Environmental
Laws. To the best knowledge of Company, each of the foregoing representations
and warranties is also true with respect to any entity for which Company or any
of its Subsidiaries may be liable, by contract or by operation of law.
3.20 INFORMATION SUPPLIED. The Proxy Statement to be sent to the
stockholders of Company in connection with the Company Stockholders Meeting,
will not, at the date it is first mailed to Company's stockholders or at the
time of the Company Stockholders Meeting, contain any untrue statement of a
material fact or omit to state any 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 is made by Company with respect to statements made or
incorporated by reference therein based on information supplied by Parent or Sub
in writing for inclusion in such document. The Proxy Statement will comply as to
form in all material respects with the requirements of the Exchange Act and the
Securities Act and the rules and regulations of the SEC thereunder. Company
shall promptly inform Parent of the discovery of any information which should be
set forth in a supplement to the Proxy Statement.
22
3.21 INSURANCE. Company and its Subsidiaries maintain insurance
policies and performance bonds on their respective properties and assets, and
with respect to their employees and operations, with reputable insurance
carriers, and such insurance policies are identified in Schedule 3.21 of the
Company Disclosure Schedule and provide standard coverage for all normal risks
incident to the business of Company and its Subsidiaries and their respective
properties and assets and are in character and amount similar to that carried by
persons engaged in similar businesses and subject to the same or similar perils
or hazards, except for any such failures to maintain insurance policies that,
individually or in the aggregate, are not reasonably likely to have a Material
Adverse Effect on Company. Company and its Subsidiaries are not in material
default under any of their insurance policies and have paid all premiums owed
thereunder, and no material claims for coverage thereunder have been denied.
3.22 INTELLECTUAL PROPERTY. Company and its Subsidiaries own or have a
valid license to use all trademarks, trade names, service marks, copyrights,
patents, trade secrets and other intellectual property (collectively,
"INTELLECTUAL PROPERTY") that are material to the conduct of their business. All
applications, registrations and patents for such Intellectual Property owned by
Company are identified in Section 3.22 of the Company Disclosure Schedule.
Except as set forth in Section 3.22 of the Company Disclosure Schedule, neither
Company nor any of its Subsidiaries is bound by or subject to any license or
other agreement with respect to any such Intellectual Property (including,
without limitation, the rights to the name "Emons" and any variations thereof)
that are material to the conduct of their business. Neither Company nor any of
its Subsidiaries has received any notice or other communication alleging that
its usage of such Intellectual Property violates the intellectual property
rights of any other person.
3.23 RIGHTS AGREEMENT. The Board of Directors of Company has approved
an amendment to the Rights Agreement, dated as of April 23, 1999 (the "COMPANY
RIGHTS AGREEMENT"), between Company and American Stock Transfer & Trust Company,
as Rights Agent, to the effect that neither Parent, Sub nor any of their
affiliates shall be deemed an "Acquiring Person", that no "Share Acquisition
Date" or "Distribution Date" (as such terms are defined in the Company Rights
Agreement) shall be deemed to occur pursuant to the Company Rights Agreement by
reason of, and the Company Rights Agreement shall not be applicable to, the
approval, execution or delivery of this Agreement or the consummation of the
transactions contemplated hereby, and will cause the trustee under the Company
Rights Agreement to execute such amendment as of the date hereof.
3.24 STATE ANTI-TAKEOVER STATUTES. (a) The Company Board Recommendation
is sufficient to render inapplicable to this Agreement, the Merger and the
Support Agreement and the other transactions contemplated hereby and thereby the
restrictions of Section 203 of the DGCL. No other state takeover statute or
similar statute or regulation applies or purports to apply to this Agreement,
the Support Agreement or the other transactions contemplated hereby or thereby.
No provision of Company's certificate of incorporation, bylaws or other
governing instruments of Company or any of its Subsidiaries would restrict or
impair the ability of Parent to vote, or otherwise exercise the rights of a
stockholder with respect to, shares of capital stock of Company or any of its
Subsidiaries.
(b) The Company Stockholder Approval is the only vote of the holders of
any class or series of Company securities necessary to adopt this Agreement. No
23
vote of the holders of any class or series of securities of Company or any of
its Subsidiaries is required to approve the Support Agreement.
3.25 PROPERTIES. Except as set forth in Section 3.25 of the Company
Disclosure Schedule:
(a) (i) each of Company and its Subsidiaries has good, valid and
marketable title to all material real property owned by Company or any of its
Subsidiaries (collectively, the "OWNED REAL PROPERTY") free of all Liens, in
each case except, individually or in the aggregate, as could not reasonably be
expected to have a Material Adverse Effect on Company and (ii) there are no
outstanding contracts for the sale of any Owned Real Property, except those
contracts relating to property the value in respect of which does not exceed
$500,000 individually or $1,000,000 in the aggregate.
(b) Pursuant to the leases and subleases (the "REAL PROPERTY LEASES")
of Company and its Subsidiaries with respect to all material real property which
is leased or subleased by Company or its Subsidiaries (the "LEASED REAL
PROPERTY"), Company and its Subsidiaries hold good and valid leasehold title to
the Leased Real Property, in each case in accordance with the provisions of the
applicable Real Property Lease and free of all Liens, in each case except,
individually or in the aggregate, as could not reasonably be expected to have a
Material Adverse Effect on Company. Each of the Real Property Leases is
enforceable against Company or its Subsidiary, as the case may be, and, to the
knowledge of Company, against the other party thereto, in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, and general equitable principles (whether
considered in a proceeding in equity or at law) and except for such failures to
be enforceable as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Company.
3.26 RELATIONS WITH PRINCIPAL CUSTOMERS. (a) Section 3.26 of the
Company Disclosure Schedule lists, by dollar volume paid for the year ended June
30, 2001, the top fifteen customers of Company. The relationships of Company
with such customers are good commercial working relationships and, except as set
forth in Section 3.26 of the Company Disclosure Schedule or specifically
disclosed in the September 10-Q, (i) no such customer since June 30, 2001 has
threatened in writing to cancel or otherwise terminate, or to the knowledge of
Company intends to cancel or otherwise terminate, the relationship of such
customer with Company, (ii) no such customer has since June 30, 2001, decreased
materially or threatened in writing to decrease or limit materially, or to the
knowledge of Company intends to modify materially its relationship with Company
or intends to decrease or limit materially its usage or purchase of the services
of Company, and (iii) to the knowledge of Company, the Merger will not affect
the relationship of Company with any customer listed in Section 3.26 of the
Company Disclosure Schedule.
(b) Except as set forth in Section 3.26 of the Company Disclosure
Schedule or specifically disclosed in the September 10-Q, since June 30, 2001,
no customer listed on such section of the Company Disclosure Schedule has
canceled any contract for services to be provided by Company, and no such
customer has indicated that a material change in its requirements will occur.
24
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND SUB
Parent and Sub hereby represent and warrant to Company as follows:
4.1 CORPORATE ORGANIZATION. Each of Parent and Sub is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware.
4.2 AUTHORITY; NO VIOLATION. (a) Each of Parent and Sub has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Parent and Sub and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the Board of
Directors of each of Parent and Sub and by Parent in its capacity as sole
stockholder of Sub. No other corporate proceedings on the part of Parent or Sub
and no other votes or consents of any holders of Parent securities are necessary
on the part of Parent or Sub to approve this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by each of Parent and Sub and (assuming due
authorization, execution and delivery by Company) constitutes valid and binding
obligations of Parent and Sub, enforceable against each of them in accordance
with their respective terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, and general equitable
principles (whether considered in a proceeding in equity or at law).
(b) Neither the execution and delivery of this Agreement by Parent or
Sub nor the consummation by Parent or Sub of the transactions contemplated
hereby, nor compliance by Parent or Sub with any of the terms or provisions
hereof, will (i) violate any provision of the certificate of incorporation or
bylaws of Parent or Sub, as applicable, or (ii) assuming that the consents and
approvals referred to in Section 4.3 are duly obtained, violate any statute,
code, ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to Parent or any of its Subsidiaries or any of their respective
properties or assets, or violate, conflict with, result in a breach of any
provision of or the loss of any benefit under, constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a default) under,
result in the termination of or a right of termination or cancellation under,
accelerate the performance required by or rights or obligations under, or result
in the creation of any Lien upon any of the respective properties or assets of
Parent or any of its Subsidiaries under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust, permit,
concession, franchise, license, lease, agreement, contract, or other instrument
or obligation to which Parent or any of its Subsidiaries is a party, or by which
they or any of their respective properties, assets or business activities may be
bound or affected, except (in the case of clause (ii) above) for such
violations, conflicts, breaches or defaults which, either individually or in the
aggregate, could not reasonably be expected to result in a material adverse
effect on the ability of Parent or Sub to perform its obligations under and to
consummate the transactions contemplated by this Agreement on a timely basis.
25
4.3 CONSENTS AND APPROVALS. Except for (i) the Regulatory Approvals,
(ii) the filing with the SEC of the Schedule 14A containing the Proxy Statement
(iii) the filing of the Certificate of Merger with the Secretary of State of the
State of Delaware pursuant to the DGCL, (iv) the expiration of any applicable
waiting period under the HSR Act, (v) the Company Stockholder Approval, (vi) the
filing with the SEC of such reports under the Exchange Act as may be required in
connection with the execution and delivery of this Agreement and the
transactions contemplated hereby, (vii) the approval of Parent's lenders
referred to in the Financing Letter and (viii) such other consents, approvals
and registrations the failure to obtain which could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
ability of Parent or Sub to perform its obligations under and to consummate the
transactions contemplated by this Agreement on a timely basis, no consents or
approvals of or filings or registrations with any Regulatory Agency,
Governmental Entity, or of or with any third party, are necessary in connection
with the execution and delivery by Parent and Sub of this Agreement and the
consummation by Parent or Sub of the transactions contemplated by this
Agreement. Parent has no reason to believe that any Requisite Approvals will not
be obtained on a timely basis.
4.4 BROKER'S FEES. No broker, finder or investment banker (other than
the Company Financial Advisor) is entitled to any brokerage, finder's or other
fee or commission in connection with the transactions contemplated by this
Agreement.
4.5 INFORMATION SUPPLIED. The information supplied by Parent or Sub in
writing for inclusion in the Proxy Statement to be sent to the stockholders of
Company in connection with the Company Stockholders Meeting, will not, at the
date it is first mailed to Company's stockholders or at the time of the Company
Stockholders Meeting, contain any untrue statement of a material fact or omit to
state any 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.
4.6 FINANCIAL CAPABILITY. Parent has delivered to Company a copy of a
letter addressed to Parent from Fleet National Bank, administrative agent and
syndication agent pursuant to Parent's revolving credit facility, indicating the
availability pursuant to Parent's revolving credit facility of financing in
connection with the Merger (the "FINANCING LETTER"). The financing contemplated
by the Financing Letter is sufficient to consummate the Merger in accordance
with the terms hereof. Parent knows of no circumstances or condition that will
prevent the availability at the Closing of the requisite financing to consummate
the transactions contemplated by this Agreement on the terms set forth herein,
as provided in the Financing Letter.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.1 CONDUCT OF COMPANY BUSINESSES PRIOR TO THE EFFECTIVE TIME. During
the period from the date of this Agreement to the Effective Time, except as
expressly required or permitted by this Agreement, Company shall, and shall
cause each of its Subsidiaries to, (a) conduct its business in the usual,
26
regular and ordinary course consistent with past practice and in compliance in
all material respects with applicable laws, (b) use reasonable best efforts to
maintain and preserve intact its business organization, assets, employees and
business relationships and retain the services of its key officers and key
employees and (c) take no action which would materially adversely affect or
delay in any respect the ability of either Parent or Company to obtain any
necessary approvals of any Regulatory Agency or other Governmental Entity or any
Third Party Consent required for the transactions contemplated hereby or to
perform its covenants and agreements under this Agreement.
5.2 FORBEARANCES OF COMPANY. During the period from the date of this
Agreement to the Effective Time, except as set forth in Section 5.2 of the
Company Disclosure Schedule and except as expressly required or permitted by
this Agreement, Company shall not, and shall not permit any of its Subsidiaries
to, without the prior written consent of Parent, which consent shall not be
unreasonably withheld:
(a) (i) incur any indebtedness for borrowed money (other than (A)
short-term indebtedness incurred to refinance existing short-term
indebtedness and (B) indebtedness of Company or any of its Subsidiaries owed
to Company or any of its other wholly owned Subsidiaries), assume,
guarantee, endorse or otherwise as an accommodation become responsible for
the obligations of any other individual, corporation or other entity, or
make any loan, advance or capital contribution (other than to Company or any
of its wholly owned Subsidiaries) or (ii) make or commit to make any capital
expenditures (net of governmental grants received) in excess of $100,000 for
any single or related group of capital expenditures, or $500,000 in the
aggregate for all capital expenditures;
(b) (i) adjust, split, combine or reclassify any of its capital stock;
(ii) make, declare, set aside or pay any dividend (except for dividends paid
in the ordinary course of business by any wholly owned Subsidiaries of
Company to Company or to any other of its wholly owned Subsidiaries) or make
any other distribution on, or directly or indirectly redeem, purchase or
otherwise acquire, any shares of its capital stock or any securities or
obligations convertible into or exchangeable for any shares of its capital
stock; (iii) grant any individual, corporation or other entity any right to
acquire any shares of its capital stock or any stock appreciation or similar
rights except as permitted by Section 5.2(i); (iv) issue or authorize the
issuance of, deliver, sell, transfer, pledge or otherwise encumber any
additional shares of capital stock or any securities or obligations
convertible into or exchangeable for any shares of its capital stock, other
than the issuance of Company Common Stock pursuant to the exercise of stock
options or warrants disclosed in Section 3.2 of the Company Disclosure
Schedule as being outstanding on the date of this Agreement and granted
pursuant to the Company Stock Plans; or (v) enter into any agreement,
understanding or arrangement with respect to the sale or voting of its
capital stock;
(c) sell, transfer, mortgage, encumber or otherwise dispose of any of
its properties or assets, including, without limitation, capital stock in
any Company Subsidiary, to any individual, corporation or other entity other
than a direct or indirect wholly owned Subsidiary, or cancel, release or
27
assign any indebtedness to any such person or any claims held by any such
person, except in the ordinary course of business consistent with past
practice;
(d) make any material investment, either by purchase of stock or
securities, contributions to capital, property transfers, or purchase of any
property or assets of any other individual, corporation, limited partnership
or other entity, other than an investment in a wholly owned Subsidiary of
Company;
(e) acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial portion of the stock or assets of, or by any other
manner, any business or any corporation, partnership, joint venture,
association or other business organization or division thereof;
(f) acquire or agree to acquire voting or non-voting equity securities
or similar ownership interests in any person (other than a Subsidiary);
(g) commence, undertake or engage in any new line of business;
(h) enter into or terminate any material lease, contract or agreement,
or make any change in any of its existing material leases, contracts or
agreements; enter into any contract, arrangement, commitment or
understanding of the types described in clause (iii), (v) or (vi) of Section
3.14; or enter into any contract, agreement, arrangement or understanding
involving payments or receipts by Company or any of its Subsidiaries in
excess of $100,000 over the term thereof;
(i) (i) increase or accelerate the compensation or benefits of any
present or former director, officer, consultant, independent contractor or
employee of Company or its Subsidiaries (except for increases in salary or
wages in the ordinary course of business consistent with past practice),
(ii) grant any severance or termination pay to any present or former
director, officer, consultant, independent contractor or employee of Company
or its Subsidiaries , (iii) loan or advance any money or other property to
any present or former director, officer, consultant, independent contractor
or employee of Company or its Subsidiaries, (iv) establish, adopt, enter
into, amend or terminate any Employee Plan or any plan, agreement, program,
policy, trust, fund or other arrangement that would be an Employee Plan if
it were in existence as of the date of this Agreement or (v) amend any term
of a Company Option.
(j) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), except
for the payment, discharge or satisfaction of current liabilities or
obligations, in accordance with their terms, in the ordinary course of
business consistent with past practice or payments, discharges or
satisfaction of liabilities where the amount paid does not exceed $25,000
for any single matter or related group of matters, or waive, release, grant,
or transfer any rights of value or modify or change any existing license,
lease, contract or other document in any manner that would be materially
adverse to Company and its Subsidiaries;
28
(k) settle or compromise any litigation (whether or not commenced prior
to the date of this Agreement), other than settlements or compromises of
litigation where the amount paid does not exceed $25,000 for any single
litigation matter or related group of litigation matters (provided such
settlement or compromise agreements do not involve any non-monetary
obligations on the part of Company or any of its Subsidiaries);
(l) change any accounting principle used by it, except for such changes
as may be required to be implemented following the date of this Agreement
pursuant to generally accepted accounting principles or rules and
regulations of the SEC promulgated following the date hereof, as concurred
in by Company's independent auditors;
(m) make or change any Tax election, change any annual Tax accounting
period, change any method of Tax accounting, file any amended Tax Return,
enter into any closing agreement relating to any Tax, settle any Tax claim
or assessment, surrender any right to claim a Tax refund or consent to any
extension or waiver of the limitations period applicable to any Tax claim or
assessment;
(n) adopt or implement any amendment to its certificate of
incorporation or bylaws or other comparable organizational documents, or
enter into any plan of consolidation, merger or reorganization with any
person other than a wholly owned Subsidiary of Company;
(o) adopt a plan of complete or partial liquidation or resolutions
providing for or authorizing such a liquidation or a dissolution,
restructuring, recapitalization or reorganization;
(p) take any action that is intended or may reasonably be expected to
result in any of its representations and warranties set forth in this
Agreement being or becoming untrue in any material respect, or in any of the
conditions to the Merger set forth in Article VII not being satisfied or in
a violation of any provision of this Agreement, except, in each case, as may
be required by applicable law; or
(q) agree to, or make any commitment to, take, or authorize, any of the
actions prohibited by this Section 5.2.
5.3 TRANSITION. Company shall and shall cause its Subsidiaries to make
available to Parent at the facilities of Company and its Subsidiaries, where
determined by Parent to be appropriate and necessary, office space in order to
assist it in observing all operations and reviewing all matters concerning
Company's affairs. Without in any way limiting the provisions of Section 6.3,
Parent, its Subsidiaries, officers, employees, counsel, financial advisors and
other representatives shall, upon reasonable notice to Company, be entitled to
review the operations and visit the facilities of Company and its Subsidiaries
at all times as may be deemed reasonably necessary by Parent in order to
accomplish the foregoing arrangements. Notwithstanding the foregoing, nothing
contained in this Agreement shall give Parent, directly or indirectly, the right
to control or direct Company's operations prior to the Effective Time. Prior to
the Effective Time, each of Company and Parent shall exercise, consistent with
the terms and conditions of this Agreement, complete control and supervision
over its and its Subsidiaries' respective operations. In the exercise of its
29
rights pursuant to this Section 5.3, Parent shall not disrupt the operations of
Company and shall not be entitled to direct the activities of Company or any of
its employees.
5.4 NOTIFICATION OF TAX PROCEEDINGS. From the date of this Agreement to
the Effective Time, to the extent Company or any Subsidiary becomes aware of the
commencement or scheduling of any Tax audit, the assessment of any material Tax,
the issuance of any notice of material Tax due or any xxxx for collection of any
material Tax due or any material lien for Taxes, or the commencement or
scheduling of any other administrative or judicial proceeding with respect to
the determination, assessment, or collection of any material Tax on Company or
any Subsidiary, Company shall provide prompt notice to Parent of such matter
setting forth information (to the extent known) describing any asserted Tax
liability in reasonable detail and including copies of any notice or other
documentation received from the applicable Tax Authority with respect of the
matter.
ARTICLE VI
Additional Agreements
6.1 COMPANY STOCKHOLDERS MEETING; PREPARATION OF PROXY STATEMENT.
Company shall cause a meeting of its stockholders (the "COMPANY STOCKHOLDERS
MEETING") to be duly called and held as soon as practicable after the date
hereof for the purpose of approving the adoption of this Agreement. As promptly
as practicable following the date hereof, Parent and Company shall prepare and
file with the SEC preliminary proxy materials, which shall include a proxy
statement (such proxy statement, and any amendments thereto, the "PROXY
STATEMENT"). The Proxy Statement shall comply as to form in all material
respects with the applicable provisions of the Exchange Act and the rules and
regulations of the SEC thereunder. Company shall, as promptly as practicable
after receipt thereof, provide copies of any written comments received from the
SEC with respect to the Proxy Statement to the other party and advise the other
party of any oral comments with respect to the Proxy Statement received from the
SEC. Company shall use its reasonable best efforts to cause the Proxy Statement
to be mailed to Company's stockholders as promptly as practicable after Company
is permitted to do so under the Exchange Act. Company will inform the Parent,
promptly after it receives notice thereof, of any request by the SEC for an
amendment to the Proxy Statement or requests for additional information. No
amendment or supplement to the Proxy Statement shall be filed without the
approval of Parent, which approval shall not be unreasonably withheld or
delayed. The Board of Directors of Company shall (i) include in the Proxy
Statement (x) the Company Board Recommendation unless, after consultation with
Company's outside counsel, the Board of Directors of Company determines in good
faith that the inclusion of such recommendation would constitute a breach by the
Board of Directors of Company of its fiduciary duties under applicable law and
(y) the opinion of the Company Financial Advisor referred to in Section 3.6(b)
and (ii) use its reasonable best efforts to obtain the necessary vote in favor
of the adoption of this Agreement by its stockholders. The Board of Directors of
Company shall not withdraw, amend, modify or materially qualify in a manner
adverse to Parent the Company Board Recommendation (or announce publicly its
intention to do so) unless, after consultation with Company's outside counsel,
the Board of Directors of Company determines in good faith that failure to do so
30
would constitute a breach by Board of Directors of Company of its fiduciary
duties under applicable law. Subject to its right to terminate this Agreement in
accordance with the terms herein, Company shall be required to satisfy all its
other obligations under this Agreement, including, without limitation, its
obligations under this Section 6.1, whether or not the Board of Directors of
Company shall have withdrawn, amended, modified or qualified in a manner adverse
to Parent the Company Board Recommendation or announced publicly its intention
to do so.
6.2 REASONABLE BEST EFFORTS. (a) Each of Parent and Company shall, and
shall cause their respective Subsidiaries to, use their reasonable best efforts
(i) to take, or cause to be taken, all actions necessary, proper or advisable to
comply promptly with all legal requirements which may be imposed on such party
or any of its Subsidiaries with respect to the Merger and, subject to the
conditions set forth in Article VII hereof, to consummate the transactions
contemplated by this Agreement and (ii) to obtain (and to cooperate with the
other party to obtain) any consent, authorization, order or approval of, or any
exemption by, any Governmental Entity, Regulatory Agency and any other third
party which is required to be obtained by such party or any of its Subsidiaries
in connection with the Merger and the other transactions contemplated by this
Agreement.
(b) The parties hereto shall cooperate with each other (except with
respect to the Surface Transportation Board, which is governed by Section
6.2(c)) and use their reasonable best efforts to promptly prepare and file all
necessary documentation, to effect all applications, notices, petitions and
filings, to identify and obtain as promptly as practicable all permits,
consents, approvals and authorizations of all Governmental Entities and any
other third parties which are necessary or advisable to consummate the
transactions contemplated by this Agreement (including, without limitation, the
Merger), and to comply fully with the terms and conditions of all such permits,
consents, approvals and authorizations of all such Governmental Entities. Parent
and Company shall have the right to review in advance, and, to the extent
practicable, each will consult with the other on, in each case subject to
applicable laws relating to the exchange of information, all the information
relating to Company or Parent, as the case may be, and any of their respective
Subsidiaries, which appear in any filing made with, or written materials
submitted to, any Governmental Entity or any other third party in connection
with the transactions contemplated by this Agreement. In exercising the
foregoing right, each of the parties hereto shall act reasonably and as promptly
as practicable. The parties hereto agree that they will consult with each other
with respect to the obtaining of all permits, consents, approvals and
authorizations of all Governmental Entities, Regulatory Agencies and other third
parties necessary or advisable to consummate the transactions contemplated by
this Agreement and each party will keep the other apprised of the status of
matters relating to completion of the transactions contemplated hereby.
(c) Parent, on the one hand, and Company, on the other, shall, and each
shall cause its Subsidiaries to, subject to the following sentences, (i)
cooperate with one another to prepare and present to the Surface Transportation
Board and Canadian Transportation Administration, as soon as practicable, all
filings and other presentations in connection with seeking any Surface
Transportation Board and Canadian Transportation Administration approval,
exemption or other authorization necessary to consummate the transactions
31
contemplated by this Agreement and the Support Agreement, (ii) prosecute such
filings and other presentations as reasonably and promptly as practicable and
keep the other party apprised of the status of matters relating to the Surface
Transportation Board and Canadian Transportation Administration, (iii)
diligently oppose any objections to, appeals from or petitions to reconsider or
reopen any further action as in the reasonable judgment of Parent and Company
may facilitate obtaining final orders of the Surface Transportation Board and
Canadian Transportation Administration exempting or approving such transactions
consistent with this Agreement and the transactions contemplated herein. Subject
to consultations with Company and, after giving good faith consideration to the
views of Company, Parent shall have final authority over the development,
presentation and conduct of the Surface Transportation Board and Canadian
Transportation Administration cases, including over decisions as to whether to
agree to or acquiesce in conditions. Company shall take no regulatory or legal
action in connection with the Surface Transportation Board or Canadian
Transportation Administration without Parent's consent.
(d) Parent and Company shall, upon request, furnish each other with all
information concerning themselves, their Subsidiaries, directors, officers and
stockholders and such other matters as may be reasonably necessary or advisable
in connection with the Proxy Statement or any other statement, filing, notice or
application made by or on behalf of Parent, Company or any of their respective
Subsidiaries to any Governmental Entity in connection with the Merger and the
other transactions contemplated by this Agreement.
6.3 ACCESS TO INFORMATION. (a) Upon reasonable notice and subject to
applicable laws relating to the exchange of information, Company shall, and
shall cause its Subsidiaries to, afford to the officers, employees, accountants,
counsel and other representatives of Parent, complete access, during normal
business hours during the period prior to the Effective Time, to all its
personnel, properties, books, contracts, commitments and records and, during
such period, Company shall, and shall cause its Subsidiaries to, make available
to Parent and such other parties (i) a copy of each report, schedule,
registration statement and other document filed or received by it during such
period pursuant to the requirements of federal securities laws or other federal
or state laws (other than reports or documents which Company is not permitted to
disclose under applicable law) and (ii) all other information concerning its
business, properties and personnel as Parent may reasonably request, in all
cases so that Parent may have full opportunity to make such investigations as it
desires of the affairs and assets of Company. Neither Company nor any of its
Subsidiaries shall be required to provide access to or to disclose information
where such access or disclosure would violate or prejudice the rights of its
customers or contravene any law, rule, regulation, order, judgment, decree, or
binding agreement entered into prior to the date of this Agreement. The parties
hereto will make appropriate substitute disclosure arrangements under
circumstances in which the restrictions of the preceding sentence apply.
(b) Parent shall hold all information furnished by or on behalf of
Company or any of Company's Subsidiaries or representatives pursuant to Section
6.3(a) in confidence to the extent required by, and in accordance with, the
provisions of the confidentiality agreement, dated October 18, 2001 between
Parent and Company (the "CONFIDENTIALITY AGREEMENT").
(c) No investigation by Parent or its representatives shall affect the
representations and warranties of Company set forth herein.
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6.4 INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE. (a) The
certificate of incorporation and bylaws of the Surviving Corporation shall
contain, to the extent permitted by law, the provisions with respect to
indemnification set forth in the certificate of incorporation and bylaws of
Company on the date hereof, which provisions shall not be amended, repealed or
otherwise modified for a period of six years after the Effective Time in any
manner that would adversely affect the rights thereunder of the persons who at
any time prior to the Effective Time were entitled to such indemnification under
the certificate of incorporation or bylaws of Company in respect of actions or
omissions occurring at or prior to the Effective Time (including, without
limitation, the transactions contemplated hereby), unless such modification is
required by law; PROVIDED, that the certificate of incorporation and bylaws of
the Surviving Corporation shall not be required to contain such provisions if
Parent otherwise provides the same level of indemnification for such individuals
as contained in the certificate of incorporation and bylaws of the Surviving
Corporation.
(b) The Surviving Corporation and Parent shall indemnify, defend and
hold harmless the present and former officers and directors of Company or any of
Company's Subsidiaries in their capacities as such (each an "INDEMNIFIED PARTY")
after the Effective Time against all losses, expenses, claims, damages or
liabilities arising out of actions or omissions occurring on or prior to the
Effective Time to the fullest extent now provided in their respective
certificate of incorporation or bylaws, and as permitted by applicable law. In
the event of any claim, action, suit, proceeding or investigation for which
indemnification is provided pursuant to the immediately preceding sentence (an
"ACTION"), (i) Parent shall or shall cause the Surviving Corporation to pay, as
incurred, the fees and expenses of counsel selected by the Indemnified Party,
which counsel shall be reasonably acceptable to Parent, in advance of the final
disposition of any such Action to the fullest extent permitted by applicable
law, and, if required, upon receipt of any undertaking required by applicable
law, and (ii) Parent will, and will cause the Surviving Corporation to,
cooperate in the defense of any such matter; PROVIDED that neither Parent nor
the Surviving Corporation shall be liable for any settlement effected without
its written consent (which consent shall not be unreasonably withheld or
delayed), and PROVIDED FURTHER that neither Parent nor the Surviving Corporation
shall be obligated pursuant to this Section 6.4 to pay the fees and
disbursements of more than one counsel for all Indemnified Parties in any single
Action, unless, in the good faith judgment of any of the Indemnified Parties,
there is or may be a conflict of interests between two or more of such
Indemnified Parties, in which case there may be separate counsel for each
similarly situated group.
(c) Parent shall use its reasonable best efforts to cause the persons
serving as officers and directors of Company immediately prior to the Effective
Time to be covered for a period of six years from the Effective Time by the
directors' and officers' liability insurance policy maintained by Company
(provided that Parent may substitute therefor policies of at least the same
coverage and amounts containing terms and conditions which are not less
advantageous than such policy) with respect to acts or omissions occurring prior
to the Effective Time which were committed by such officers and directors in
their capacity as such; provided, however, that in no event shall Parent be
required to expend in any year more than 200% of the amount expended by Company
for such coverage in fiscal 2001 (the "INSURANCE AMOUNT") to maintain or procure
insurance coverage pursuant hereto and further PROVIDED, that if Parent is
unable to maintain or obtain the insurance called for by this Section 6.4(c),
Parent shall use its reasonable best efforts to obtain as much comparable
insurance as available for the Insurance Amount.
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(d) In the event Parent, 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 continuing or 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, proper provision shall be made so that the successors and
assigns of Parent or the Surviving Corporation, as the case may be, assume the
obligations set forth in this section.
(e) The provisions of this Section 6.4 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and his or her
heirs and
representatives.
6.5 ADDITIONAL AGREEMENTS. In case at any time either prior to or after
the Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement (including, without limitation, any other merger
between a Subsidiary of Company and a Subsidiary of Parent) or to vest the
Surviving Corporation with full title to all properties, assets, rights,
approvals, immunities and franchises of any of the parties to the Merger, the
proper officers and directors of each party to this Agreement and their
respective Subsidiaries shall take all such necessary action as may be
reasonably requested by Parent.
6.6 ADVICE OF CHANGES. Company shall promptly advise Parent of any
change that could reasonably be expected to have a Material Adverse Effect on it
and Company and Parent shall promptly advise the other party of any change or
event that could reasonably be expected to delay or impede the ability of
Parent, Sub or Company, respectively, to perform their respective obligations
pursuant to this Agreement and to effect the consummation of the transactions
contemplated hereby or that it believes would or would be reasonably likely to
cause or constitute a material breach of any of its representations, warranties
or covenants contained herein; PROVIDED, HOWEVER, that the delivery of any
notice pursuant to this Section 6.6 shall not limit or otherwise affect the
remedies available hereunder to any party receiving such notice.
6.7 NO SOLICITATION. (a) From and after the date hereof until
termination of this Agreement, neither Company nor any of its Subsidiaries shall
(whether directly or indirectly through advisors, agents or other
intermediaries), nor shall Company or any of its Subsidiaries authorize or
permit any of its or their officers, directors, agents, representatives or
advisors to, (i) solicit, initiate, encourage (including by way of furnishing
information) or take any action knowingly to facilitate the submission of any
inquiries, proposals or offers (whether or not in writing) from any person other
than Parent relating to, (A) any acquisition or purchase of 15% or more of the
consolidated assets of Company and its Subsidiaries (including through the
formation of a joint venture) or of any equity securities of Company or any of
its Subsidiaries, (B) any tender offer or exchange offer (including a
self-tender offer) for any class of equity securities of Company or any of its
Subsidiaries, (C) any merger, consolidation, business combination,
reorganization, recapitalization, liquidation, dissolution or similar
transaction involving Company or any of its Subsidiaries or (D) any other
transaction the consummation of which would or could reasonably be expected to
impede, interfere with, prevent or materially delay the Merger (any of the
foregoing, a "TRANSACTION PROPOSAL"), or agree to, approve or endorse any
Transaction Proposal, or (ii) enter into or participate in any discussions or
negotiations regarding any of the foregoing, or otherwise cooperate in any way
with, or knowingly assist or participate in, facilitate or encourage, any effort
34
or attempt by any other person to do or seek any of the foregoing; PROVIDED,
that Company may, in response and with respect to a bona fide unsolicited
written proposal from a third party submitted after the date of this Agreement
which constitutes a Superior Proposal (as defined below), engage in the
activities specified in clause (ii), if (X) based on the advice of Company's
outside counsel, the Board of Directors of Company determines in good faith that
failure to take such action in response to such a proposal would constitute a
breach by the Board of Directors of Company of its fiduciary duties under
applicable law, (Y) Company has received from such third party an executed
confidentiality agreement with terms not materially less favorable to Company
than those contained in the Confidentiality Agreement and (Z) Company has fully
and completely complied with this Section 6.7. If Company receives a Transaction
Proposal, or a request for nonpublic information relating to Company or any of
its Subsidiaries or for access to the properties, books or records of Company or
any of its Subsidiaries by any Person who is considering making or has made a
Transaction Proposal, it shall immediately inform Parent orally and shall as
promptly as practicable (and in any event within one day) inform Parent in
writing of the terms and conditions of such proposal and the identity of the
person making it, forwarding a copy of any written communications relating
thereto. Company will keep Parent fully informed on as prompt a basis as is
practicable of the status and details of any such Transaction Proposal or
request and any related discussions or negotiations, including by forwarding
copies of any material written communications relating thereto. Company will
immediately cease and cause its Subsidiaries, and its and their officers,
directors, agents, representatives and advisors, to cease any and all existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing, and shall use its reasonable best efforts
to cause any such parties in possession of confidential information about
Company or its Subsidiaries that was furnished by or on behalf of Company or its
Subsidiaries in connection with any of the foregoing to return or destroy all
such information in the possession of any such party or in the possession of any
agent or advisor of any such party. Company agrees not to release any third
party from, or waive any provisions of, any confidentiality or standstill
agreement to which it or its Subsidiaries is a party. Company shall ensure that
the officers, directors and employees of Company and its Subsidiaries and any
investment banker or other advisor or representative retained by such party are
aware of and instructed to comply with the restrictions described in this
Section 6.7. Nothing in this Section 6.7 shall prohibit Company or its Board of
Directors from taking and disclosing to Company's stockholders a position with
respect to a Transaction Proposal by a third party to the extent required under
the Exchange Act, including Rules 14e-2 and 14d-9 thereunder, or from making
such disclosure to Company's stockholders which, after consultation with
Company's outside counsel, the Board of Directors of Company determines in good
faith is required under applicable law; PROVIDED, that nothing in this sentence
shall affect the obligations of Company and its Board of Directors under any
other provision of this Agreement. For purposes of this Agreement, a "SUPERIOR
PROPOSAL" means a bona fide written Transaction Proposal for at least a majority
of the outstanding fully diluted shares of Company Common Stock or for all or
substantially all of the consolidated assets of Company made by a Third Party
after the date hereof for which all necessary financing is committed and which,
if accepted, is reasonably likely to be consummated and taking into account all
legal, financial and regulatory aspects of the proposal and the person making
such proposal, including the relative expected consummation date, is financially
superior to the holders of Company Common Stock as compared to the Merger.
35
(b) Company shall not amend, modify or waive any provision of the
Company Rights Agreement, and shall not take any action to redeem the Company
Rights or render the Company Rights inapplicable to any transaction other than
the transactions to be effected pursuant to this Agreement, which is reasonably
likely to reduce the likelihood of or delay the consummation of the Merger, or
result in any increase in the costs or decrease in the benefits to Parent of the
Merger, or affect the capitalization of Parent or any of its affiliates after
the Merger.
6.8 PUBLICITY. Company, on the one hand, and Parent and Sub, on the
other hand, will consult with each other before holding any press conferences,
analyst calls or other meetings or discussions and before issuing any press
releases or other public announcements or statements regarding the transactions
contemplated hereby or by the Support Agreement. The parties will provide each
other the opportunity to review and comment upon any press release or other
public announcement or statement with respect to the transactions contemplated
by this Agreement or the Support Agreement, including the Merger, and shall not
issue any such press release or other public announcement or statement prior to
such consultation, except as may be required by applicable law, court process or
by obligations pursuant to any listing agreement with any national securities
exchange. The parties agree that the initial press release or releases to be
issued with respect to the transactions contemplated by this Agreement shall be
mutually agreed upon prior to the issuance thereof. In addition, Company shall,
and shall cause its Subsidiaries to, (a) consult with Parent regarding
communications with stockholders and employees relating to the transactions
contemplated hereby, (b) if Parent so requests, provide Parent with stockholder
lists of Company and (c) allow and facilitate Parent contact with stockholders
of Company.
6.9 STOCKHOLDER LITIGATION. The parties to this Agreement shall
cooperate and consult with one another, to the fullest extent possible, in
connection with any stockholder litigation against any of them or any of their
respective directors or officers with respect to the transactions contemplated
by this Agreement or the Support Agreement. In furtherance of and without in any
way limiting the foregoing, each of the parties shall use its respective
reasonable best efforts to prevail in such litigation so as to permit the
consummation of the transactions contemplated by this Agreement in the manner
contemplated by this Agreement. Notwithstanding the foregoing, Company agrees
that it will not compromise or settle any litigation commenced against it or its
directors or officers relating to this Agreement or the Support Agreement or the
transactions contemplated hereby or thereby (including the Merger) without
Parent's prior written consent, which shall not be unreasonably withheld.
6.10 ANTI-TAKEOVER PROVISIONS. (a) Each party will take all steps
necessary to exempt (or continue the exemption of) the Merger and the other
transactions contemplated hereby and by the Support Agreement from, and
challenge the validity of, any applicable state takeover law (including Section
203 of the DGCL), as now or hereafter in effect.
(b) The Board of Directors of Company shall take all further action (in
addition to that referred to in Section 3.23), if any, necessary in order to
render the Company Rights inapplicable to the Merger and the other transactions
contemplated by this Agreement.
6.11 STOP TRANSFER. Company acknowledges and agrees to be bound by and
comply with the provisions of Section 3.1 of the Support Agreement as if a party
36
thereto with respect to transfers of record ownership of shares of Company
Common Stock and agrees to notify the transfer agent for any such shares and
provide such documentation and do such other things as may be necessary to
effectuate the provisions of such agreement.
6.12 ACKNOWLEDGEMENT OF PAYMENTS UNDER COMPANY AGREEMENTS.
Notwithstanding the provisions of the agreements set forth in Section
6.12 of the Company Disclosure Schedule, Parent agrees to pay or cause to be
paid at the Closing the payments provided for in the specified sections of such
agreements set forth in Section 6.12 of the Company Disclosure Schedule.
6.13 PARENT OTHER ACTIONS. During the period from the date of this
Agreement to the Effective Time, Parent shall not take any action that is
intended or may reasonably be expected to result in any of its representations
and warranties set forth in this Agreement being or becoming untrue in any
material respect, or in any of the conditions to the Merger set forth in Article
VII not being satisfied or in a violation of any provision of this Agreement,
except, in each case, as may be required by applicable law or as expressly
required or permitted by this Agreement.
ARTICLE VII
Conditions Precedent
7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each party to effect the Merger shall be subject to the
satisfaction at or prior to the Effective Time of the following conditions:
(a) COMPANY STOCKHOLDER APPROVAL. The Company Stockholder Approval
shall have been obtained in accordance with applicable law.
(b) OTHER CONSENTS AND APPROVALS. All Requisite Approvals shall have
been obtained except for such consents and approvals, the failure to obtain
which could not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect on Parent, Company or the Surviving
Corporation, and no such consent or approval shall contain any conditions or
restrictions which could reasonably be expected to result in a Material
Adverse Effect on Parent, Company or the Surviving Corporation.
(c) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No order, injunction or
decree issued by any court or agency of competent jurisdiction or other
legal restraint or prohibition preventing the consummation of the Merger
shall be in effect. No statute, rule, regulation, order, injunction or
decree shall have been enacted, entered, promulgated or enforced by any
Governmental Entity which prohibits, materially restricts or makes illegal
consummation of the Merger.
37
(d) HSR ACT. The applicable waiting period under the HSR Act shall have
expired or been terminated.
(e) CERTAIN ACTIONS OR PROCEEDINGS. There shall not be any action or
proceeding brought or threatened by any Governmental Entity seeking, or any
action or proceeding brought by any other person that could reasonably be
expected to result in, any executive order, decree, ruling or injunction or
other order of a court or Governmental Entity of competent jurisdiction
which would have the effect of prohibiting or making illegal any of the
transactions contemplated hereby.
7.2 CONDITIONS TO COMPANY'S OBLIGATIONS TO EFFECT THE MERGER. The
obligations of Company to effect the Merger are subject to the satisfaction at
or prior to the Effective Time of the following additional conditions:
(a) Each of the representations and warranties of Parent and Sub
contained in this Agreement shall have been true and correct (in all
material respects, in the case of representations and warranties not already
qualified as to materiality by their terms) when made and shall be true and
correct (in all material respects, in the case of representations and
warranties not already qualified as to materiality by their terms) at and as
of the Effective Time as though made on and as of such date (except (i) for
changes specifically permitted by this Agreement and (ii) that those
representations and warranties which address matters only as of a particular
date shall remain true and correct as of such date), and Company shall have
received a certificate of the Chief Executive Officer or the Chief Operating
Officer of Parent to the foregoing effect.
(b) Parent and Sub shall have performed and complied with in all
material respects their obligations under this Agreement to be performed or
complied with on or prior to the Effective Time, and Company shall have
received a certificate of the Chief Executive Officer or the Chief Operating
Officer of Parent to the foregoing effect.
7.3 CONDITIONS TO PARENT'S AND SUB'S OBLIGATIONS TO EFFECT THE MERGER.
The obligations of Parent and Sub to effect the Merger are subject to the
satisfaction at or prior to the Effective Time of the following additional
conditions:
(a) Each of the representations and warranties of Company contained in
this Agreement shall have been true and correct when made and shall be true
and correct (in all material respects, in the case of representations and
warranties not already qualified as to materiality by their terms) at and as
of the Effective Time as though made on and as of such date (except (i) for
changes specifically permitted by this Agreement and (ii) that those
representations and warranties which address matters only as of a particular
date shall remain true and correct as of such date), and Parent shall have
received a certificate of the Chief Executive Officer, and Chief Financial
Officer of Company to the foregoing effect.
(b) Company shall have performed and complied with in all material
respects its obligations under this Agreement to be performed or complied
with on or prior to the Effective Time, and Parent shall have received a
certificate of the Chief Executive Officer, and Chief Financial Officer of
Company to the foregoing effect.
(c) Neither Parent, Sub nor any of their affiliates shall have become
an "Acquiring Person" and no "Share Acquisition Date" or "Distribution Date"
(as such terms are defined in the Company Rights Agreement) shall have
occurred with respect to Parent or Sub pursuant to the Company Rights
Agreement.
(d) Parent shall have received the proceeds of financing identified in
the Financing Letter or upon terms and conditions that are, in the
reasonable judgment of Parent and Sub, substantially equivalent thereto.
(e) Company shall have provided to Parent a certificate in form and
substance reasonably satisfactory to Parent, duly executed and acknowledged,
certifying that the transactions contemplated by this Agreement are exempt
from withholding under section 1445 of the Code.
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ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after approval by the stockholders of
Company of the matters presented in connection with the Merger:
(a) by mutual written consent of Parent and Company;
(b) by either Parent or the Board of Directors of Company if (i) any
Governmental Entity or Regulatory Agency of competent jurisdiction which
must grant a Requisite Approval has denied such approval and such denial has
become final and nonappealable or any Governmental Entity or Regulatory
Agency of competent jurisdiction shall have issued an order, decree or
ruling or taken any other action permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement, and
such order, decree, ruling or other action shall have become final and
nonappealable, PROVIDED, HOWEVER, that the right to terminate this Agreement
under this Section 8.1(b)(i) shall not be available to any party whose
failure to comply with Section 6.2 or any other provision of this Agreement
has been the cause of such action, (ii) the Company Stockholder Approval
shall not have been received at the Stockholders Meeting duly called and
held or (iii) the Effective Time shall not have occurred on or before June
1, 2002 (the "TERMINATION DATE"), PROVIDED, HOWEVER, that the right to
terminate this Agreement under this Section 8.1(b)(iii) shall not be
available to any party whose failure to fulfill any obligations under this
Agreement has been the primary cause of the failure of the Effective Time to
occur on or before the Termination Date until ten business days after such
failure has been cured.
(c) by the Board of Directors of Company, if, prior to Effective Time,
(i) Parent or Sub shall have failed to perform in any material respect any
of their obligations under this Agreement to be performed at or prior to
39
such date of termination, which failure to perform (A) would permit Company
not to consummate the Merger pursuant to Section 7.2(b) and (B) is not cured
or is incapable of being cured within 10 days after the receipt by Parent of
written notice of such failure, (ii) any representation or warranty of
Parent or Sub contained in this Agreement shall not be true and correct
(except for changes permitted by this Agreement and those representations
which address matters only as of a particular date shall remain true and
correct as of such date), except, in any case, such failures to be true and
correct which are not reasonably likely to materially adversely affect
Parent's or Sub's ability to complete the Merger, PROVIDED, that such
failure to be true and correct (A) would permit Company not to consummate
the Merger pursuant to Section 7.2(a) and (B) is not cured or is incapable
of being cured within 10 days after the receipt by Parent of written notice
of such failure, (iii) prior to the Company Stockholder Approval, upon five
business days' prior irrevocable written notice to Parent, in order to
accept an unsolicited Superior Proposal; PROVIDED, HOWEVER, that (unless,
after consultation with Company's outside counsel, the Board of Directors of
Company determines in good faith that it is required not to perform the
actions set forth in the immediately following clauses (X) and (Y) under
applicable law) (X) such notice shall include a copy of any proposed or
definitive documentation relating to such Superior Proposal (including all
financing documentation), and shall otherwise specify all material terms,
conditions and other information with respect thereto and (Y) prior to any
such termination, Company shall, if requested by Parent in connection with
any revised proposal Parent might make, negotiate in good faith for such
five business day period with Parent, and such third party proposal remains
a Superior Proposal after taking into account any revised proposal during
such five business day period; and PROVIDED, FURTHER, that it shall be a
condition to termination pursuant to this Section 8.1(c)(iii) that Company
shall have made the payment of the fee to Parent required by Section 8.2(b),
or (iv) if the conditions to Parent's and Sub's obligations set forth in
Sections 7.1 and 7.3 (other than the condition set forth in Section 7.3(d))
have been satisfied and Parent is unable or unwilling to complete the Merger
within five days following the receipt by Parent of notice from Company that
all of the conditions to Company's obligations set forth in Sections 7.1 and
Section 7.2 have been satisfied or waived;
(d) by Parent, if, prior to Effective Time, (i) Company shall have
failed to perform in any material respect any of its obligations under this
Agreement to be performed at or prior to such date of termination, which
failure to perform (A) would permit the Parent not to consummate the Merger
pursuant to 7.3(b) and (B) is not cured or is incapable of being cured
within 10 days after the receipt by Company of written notice of such
failure, (ii) any representation or warranty of Company contained in this
Agreement shall not be true and correct (except for changes permitted by
this Agreement and those representations which address matters only as of a
particular date shall remain true and correct as of such date), PROVIDED,
that such failure to be true and correct (A) would permit the Parent not to
consummate the Merger pursuant to 7.3(a) and (B) is not cured or is
incapable of being cured within ten days after the receipt by Company of
written notice of such failure, (iii) the Board of Directors of Company
withdraws or materially modifies or changes its recommendation of this
Agreement and/or transactions contemplated hereby (including the Merger) in
a manner adverse to Parent or Sub (or fails to reconfirm such recommendation
40
if so requested by Parent within 10 business days following such request) or
approves, accepts or recommends another Transaction Proposal, (iv) Company
or any of its Subsidiaries shall have breached Section 6.7 in any material
respect; or (v) Parent, Sub or any of their affiliates shall have become an
"Acquiring Person", or a "Share Acquisition Date" or "Distribution Date" (as
such terms are defined in the Company Rights Agreement) shall have occurred
with respect to Parent or Sub, pursuant to the Company Rights Agreement.
8.2 EFFECT OF TERMINATION. (a) In the event of termination of this
Agreement by either Parent or Company as provided in Section 8.1, 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 have no effect, and none of Parent, Company, any
of their respective Subsidiaries or any of the officers or directors of any of
them shall have any liability of any nature whatsoever hereunder, or in
connection with the transactions contemplated hereby, except that (i) Section
6.3(b), this Section 8.2 and Article IX shall survive any termination of this
Agreement, (ii) notwithstanding anything to the contrary contained in this
Agreement, neither Parent nor Company shall be relieved or released from any
liabilities or damages arising out of its breach of any provision of this
Agreement, (iii) Company shall pay to Parent the Termination Fee (as defined
below), if applicable, in accordance with this Section 8.2.
(b) In the event that this Agreement is terminated (A) by Parent
pursuant to (or at any time that Parent is entitled to terminate this Agreement
pursuant to) clauses (d) (iii), (iv) or (v) of Section 8.1 or (B) by Company
pursuant to Section 8.1(c)(iii), Company shall pay to Parent by wire transfer of
immediately available funds to an account designated by Parent within two
business days following such termination an amount equal to $1,000,000 (one
million dollars) (the "TERMINATION FEE").
(c) If a Transaction Proposal is commenced, publicly disclosed,
publicly proposed or otherwise communicated or made known to Company at any time
on or after the date of this Agreement and prior to the termination hereof, and
this Agreement is terminated pursuant to (or at any time that Parent is entitled
to terminate this Agreement pursuant to) clause (b)(ii) of Section 8.1, clause
(d)(i) of Section 8.1 based on a willful failure to perform any obligation
hereunder, or clause (d)(ii) of Section 8.1 based on a willful act or omission
causing a representation or warranty not to be true, Company shall pay to Parent
by wire transfer of immediately available funds to an account designated by
Parent within two business days following such termination the Termination Fee.
(d) If this Agreement is terminated pursuant to (or at any time that
Parent is entitled to terminate this Agreement pursuant to) clause (b)(ii) or
(b)(iii) of Section 8.1 and Company is in willful and material breach of a
representation, warranty, covenant or agreement contained herein and within 12
months of the date of such termination, Company enters into a definitive
agreement with respect to, or consummates, any Transaction Proposal, then
Company shall pay to Parent an amount equal to the Termination Fee concurrently
with the earlier of the execution of such definitive agreement or the
consummation of such Transaction Proposal.
(e) If this Agreement is terminated by Company pursuant to Section
8.1(c)(iv), then Parent shall pay to Company by wire transfer of immediately
41
available funds to an account designated by Company within two business days
following such termination the Termination Fee.
(f) If a party fails to pay any amounts due under this Section 8.2
within the time periods specified herein, such party shall pay all costs and
expenses (including legal fees and expenses) incurred by the other party in
connection with any action or proceeding (including the filing of any lawsuit)
taken by it to collect such unpaid amounts, together with interest on such
unpaid amounts at the publicly announced prime or base lending rate of The Chase
Manhattan Bank from the date such amounts were required to be paid until the
date actually received by the party to whom they are due.
8.3 AMENDMENT. Subject to compliance with applicable law, this
Agreement may be amended by the parties hereto, by action taken or authorized by
their respective Boards of Directors, at any time before or after approval of
the matters presented in connection with the Merger by the stockholders of
Company; PROVIDED, HOWEVER, that after any approval of the transactions
contemplated by this Agreement by the stockholders of Company, there may not be,
without further approval of such stockholders, any amendment of this Agreement
which changes the amount or the form of the consideration to be delivered to the
holders of Company Common Stock hereunder other than as contemplated by this
Agreement. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
8.4 EXTENSION; WAIVER. At any time prior to the Effective Time, the
parties hereto, by action taken or authorized by their respective Board of
Directors, may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto or (c) waive compliance with
any of the agreements or conditions contained herein; PROVIDED, HOWEVER, that
after any approval of the transactions contemplated by this Agreement by the
stockholders of Company, there may not be, without further approval of such
stockholders, any extension or waiver of this Agreement or any portion thereof
which reduces the amount or changes the form of the consideration to be
delivered to the holders of Company Common Stock hereunder other than as
contemplated by this Agreement. Any agreement on the part of a party hereto to
any such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party, but such extension or waiver or
failure to insist on strict compliance with an obligation, covenant, agreement
or condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.
ARTICLE IX
GENERAL PROVISIONS
9.1 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. None of
the representations, warranties, covenants and agreements in this Agreement or
in any instrument delivered pursuant to this Agreement (other than pursuant to
the Support Agreement, which shall terminate in accordance with its terms) shall
42
survive the Effective Time, except for those covenants and agreements contained
herein and therein which by their terms apply in whole or in part after the
Effective Time.
9.2 EXPENSES. Subject to Section 8.2, all costs and expenses incurred
in connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such expense.
9.3 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given (i) when delivered personally to the
recipient, (ii) when sent to the recipient by telecopy (receipt electronically
confirmed by sender's telecopy machine) if during normal business hours of the
recipient, otherwise on the next business day, (iii) one business day after the
date when sent to the recipient by reputable express courier service (charges
prepaid), or (iv) seven business days after the date when mailed to the
recipient by certified or registered mail, return receipt requested and postage
prepaid. Such notices and other communications shall be sent if delivered
personally, telecopied (with confirmation), mailed by registered or certified
mail (return receipt requested) or delivered by an express courier (with
confirmation) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
if to Parent, to:
Genesee & Wyoming Inc.
00 Xxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
and
if to Company, to:
Emons Transportation Group, Inc.
00 Xxxxx Xxxxxx Xxxxxx
Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx
Fax: (000) 000-0000
with a copy to:
43
Xxxxxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Attention: Xxxx Berkeley, Esq.
Fax: (000) 000-0000
9.4 INTERPRETATION. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are 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". No provision of this Agreement shall be construed to require
Company, Parent or any of their respective Subsidiaries or affiliates to take
any action that would violate any applicable law, rule or regulation.
9.5 COUNTERPARTS; FACSIMILE. This Agreement may be executed in
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each of the parties
and delivered to the other parties, it being understood that all parties need
not sign the same counterpart. This Agreement may be executed by facsimile
signatures of the parties hereto.
9.6 ENTIRE AGREEMENT. This Agreement (including the documents and the
instruments referred to herein) constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof other than the Support
Agreement and the Confidentiality Agreement.
9.7 GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of New York.
9.8 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 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.
9.9 ASSIGNMENT; THIRD PARTY BENEFICIARIES. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns. Except as otherwise
specifically provided in Section 6.4, this Agreement (including the documents
and instruments referred to herein) is not intended to confer upon any person
other than the parties hereto any rights or remedies hereunder.
44
9.10 ENFORCEMENT. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. 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 Federal court or New York
State court sitting in the Borough of Manhattan, City of New York, this being in
addition to any other remedy to which they are entitled at law or in equity.
45
IN WITNESS WHEREOF, Parent, Sub and Company have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the date first above written.
GENESEE & WYOMING INC.
By:/s/ Xxxx X. Xxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Executive Vice President
ETR ACQUISITION CORPORATION
By:/s/ Xxxx X. Xxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Executive Vice President
EMONS TRANSPORTATION GROUP, INC.
By:/s/ Xxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Chairman and President
