Exhibit (e)(1)
AGREEMENT AND PLAN OF MERGER
between
TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC.
and
TRANSPORTATION ACQUISITION I CORP.
Dated as of January 28, 2000
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TABLE OF CONTENTS
PAGE
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ARTICLE I
THE OFFER
Section 1.01 The Offer................................................... 5
Section 1.02 Company Actions............................................. 7
Section 1.03 Boards of Directors; Committees; Section 14(f).............. 8
Section 1.04 Option to Acquire Additional Shares......................... 8
ARTICLE II
THE MERGER
Section 2.01 The Merger.................................................. 9
Section 2.02 Closing..................................................... 9
Section 2.03 Effective Time.............................................. 9
Section 2.04 Effects of the Merger....................................... 9
Section 2.05 Certificate of Incorporation and By-Laws.................... 9
Section 2.06 Directors................................................... 9
Section 2.07 Officers.................................................... 9
Section 2.08 Stockholders Meeting........................................ 10
Section 2.09 Merger Without Meeting of Stockholders...................... 10
ARTICLE III
CONVERSION OF SECURITIES
Section 3.01 Conversion of Shares........................................ 10
Section 3.02 Company Options............................................. 11
Section 3.03 Dissenting Shares........................................... 11
Section 3.04 Exchange of Shares.......................................... 12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.01 Organization and Qualification; Subsidiaries................ 13
Section 4.02 Capitalization of the Company............................... 14
Section 4.03 Authorization............................................... 14
Section 4.04 Non-Contravention........................................... 14
Section 4.05 Compliance with Applicable Laws............................. 15
Section 4.06 SEC Reports................................................. 15
Section 4.07 Absence of Certain Changes.................................. 15
Section 4.08 Litigation.................................................. 15
Section 4.09 Company Information......................................... 15
Section 4.10 Brokers and Finders......................................... 16
Section 4.11 Opinion of Financial Advisor................................ 16
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PAGE
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Section 4.12 Takeover Statutes........................................... 16
Section 4.13 Rights Agreement............................................ 16
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ACQUISITION
Section 5.01 Organization................................................ 16
Section 5.02 Capitalization.............................................. 16
Section 5.03 Authorization............................................... 16
Section 5.04 Proxy Statement; Schedule 14D-9; Schedule TO................ 17
Section 5.05 Financing................................................... 17
Section 5.06 No Prior Activities. ....................................... 17
Section 5.07 Brokers and Finders......................................... 17
Section 5.08 Governmental Approvals. .................................... 17
Section 5.09 Non-Contravention........................................... 18
Section 5.10 Calculation of EBITDA....................................... 18
ARTICLE VI
COVENANTS
Section 6.01 Conduct of Business of the Company.......................... 18
Section 6.02 No Solicitation............................................. 19
Section 6.03 Access to Information. ..................................... 20
Section 6.04 Reasonable Best Efforts..................................... 20
Section 6.05 Consents. .................................................. 21
Section 6.06 Public Announcements. ...................................... 21
Section 6.07 Indemnification and Insurance............................... 21
Section 6.08 Notification of Certain Matters. ........................... 21
Section 6.09 Matters Relating to the Commitment Letters. ................ 21
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 7.01 Conditions to Each Party's Obligation to Effect the
Merger. .................................................. 22
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
Section 8.01 Termination................................................. 22
Section 8.02 Effect of Termination....................................... 23
Section 8.03 Fees and Expenses........................................... 23
Section 8.04 Amendment................................................... 24
Section 8.05 Extension; Waiver........................................... 24
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ARTICLE IX
MISCELLANEOUS
Section 9.01 Nonsurvival of Representations and Warranties............... 25
Section 9.02 Entire Agreement; Assignment................................ 25
Section 9.03 Validity.................................................... 25
Section 9.04 Notices..................................................... 25
Section 9.05 Governing Law............................................... 26
Section 9.06 Descriptive Headings........................................ 26
Section 9.07 Parties in Interest......................................... 26
Section 9.08 Counterparts................................................ 26
Section 9.09 Specific Performance........................................ 26
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of January 28,
2000, between TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC., a Delaware
corporation (the "Company"), and TRANSPORTATION ACQUISITION I CORP., a Delaware
corporation ("Acquisition").
WHEREAS, the Boards of Directors of the Company and Acquisition have
determined that it is advisable and in the best interests of their respective
stockholders for Acquisition to acquire the Company upon the terms and subject
to the conditions set forth herein;
WHEREAS, in furtherance of such acquisition, Acquisition has agreed to
commence a tender offer (the "Purchaser Offer") to purchase for cash shares of
common stock, par value $0.01 per share, of the Company, together with the
associated rights attached thereto (the "Rights") issued pursuant to the Rights
Agreement, dated as of October 4, 1995 (the "Rights Agreement"), between the
Company and BancBoston State Street Investor Services, L.P., as Rights Agent
(collectively, the "Shares"), at a price of $21.50 per Share, net to the seller
in cash (such price, or such higher price per Share as may be paid in the Offer,
being referred to herein as the "Per Share Amount"), upon the terms and subject
to the conditions of this Agreement and the Purchaser Offer;
WHEREAS, the Company has agreed to simultaneously make an offer to acquire
Shares (the "Company Offer," and together with the Purchaser Offer, the "Offer")
for the Per Share Amount, upon the terms and subject to the conditions of this
Agreement and the Company Offer;
WHEREAS, the Purchaser Offer and the Company Offer shall together be an
offer to acquire all of the issued and outstanding Shares;
WHEREAS, the Board of Directors of the Company (the "Board"), acting upon
the unanimous recommendation of a special committee of the Board comprised
entirely of independent directors (the "Special Committee"), and the Board of
Directors of Acquisition have each approved the making of the Offer, and the
Board has determined to recommend that stockholders of the Company tender their
Shares pursuant to the Offer;
WHEREAS, it is further proposed that following the consummation of the
Offer, Acquisition will merge with and into the Company (the "Merger") in
accordance with the General Corporation Law of the State of Delaware (the
"DGCL"); and
WHEREAS, the Board of Directors of the Company (the "Board"), acting upon
the unanimous recommendation of the Special Committee, (i) has determined that
the Merger is advisable and in the best interests of the Company and its
stockholders (other than Acquisition, the Participants (as defined below) and
their respective affiliates), (ii) has approved the Merger, the Offer, this
Agreement and the other transactions contemplated hereby and (iii) recommends
that the Company's stockholders approve this Agreement and the Merger.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and intending to be legally bound hereby, the parties hereto
agree as follows:
ARTICLE I
THE OFFER
Section 1.01 THE OFFER. (a) Provided that this Agreement shall not have
been terminated in accordance with Section 8.01 and none of the events set forth
in Annex A or Annex B hereto shall have occurred or be existing, as promptly as
practicable, but in no event later than five business days following the public
announcement of the execution of this Agreement, Acquisition and the Company
shall jointly commence the Offer. Upon the terms and subject to the prior
satisfaction or waiver of the conditions of
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the Offer, Acquisition and the Company shall accept for payment and pay for
Shares which have been validly tendered and not withdrawn as soon as practicable
after the expiration of the Offer.
(b) The obligations of Acquisition to accept for payment any Shares tendered
shall be subject to the satisfaction of only those conditions set forth in Annex
A hereto and the obligation of the Company to accept for payment any Shares
tendered shall be subject to the satisfaction of only those conditions set forth
in Annex B hereto.
(c) Subject to the requirements of applicable law, Acquisition may waive the
conditions set forth in Annex A in its sole discretion; PROVIDED, HOWEVER, that
without the prior written consent of the Company, Acquisition will not
(i) decrease the Per Share Amount or the number of Shares sought in the
Purchaser Offer, (ii) change the form of consideration to be paid in the
Purchaser Offer, (iii) amend or waive the Minimum Condition (as defined Annex A
hereto) or impose any additional conditions on the Purchaser Offer other than
the conditions set forth in Annex A, (iv) amend any other term of the Purchaser
Offer in any manner adverse to the holders of Shares or (v) extend the
expiration date of the Purchaser Offer beyond April 30, 2000.
(d) Subject to the requirements of applicable law, the Company may waive the
conditions set forth in Annex B in its sole discretion; PROVIDED, HOWEVER, that
without prior written consent of Acquisition, the Company will not (i) decrease
the Per Share Amount or the number of Shares sought in the Company Offer,
(ii) change the form of consideration to be paid in the Company Offer,
(iii) amend or waive the Minimum Condition or impose any additional conditions
on the Company Offer other than the conditions set forth in Annex B, (iv) amend
any other term of the Company Offer in any manner adverse to Acquisition or
(v) extend the expiration date of the Company Offer beyond April 30, 2000.
(e) Notwithstanding the foregoing, but subject in all events to
Section 8.01, Acquisition may, without the consent of the Company, extend the
Purchaser Offer at any time, and from time to time (and at the direction of
Acquisition, the Company shall accordingly extend the Company Offer), (i) if at
the then scheduled expiration date of the Offer any of the conditions to the
obligations of Acquisition and the Company to accept Shares for payment (other
than the Minimum Condition, as to which Acquisition may extend the Purchaser
Offer up to 10 business days) shall not have been satisfied or waived, until
such time as such conditions are satisfied or waived; or (ii) for any period
required by any rule, regulation, interpretation or position of the Securities
and Exchange Commission (the "SEC") or its staff applicable to the Offer.
(f) Notwithstanding the foregoing, Acquisition may, without the consent of
the Company (and at the direction of Acquisition and provided that the
representation set forth in Section 5.05 shall remain true and correct, the
Company shall), increase the Per Share Amount and extend the Offer to the extent
required by applicable law in connection with any such increase.
(g) As soon as practicable following the commencement of the Offer, the
Company shall commence a tender offer and consent solicitation for all of its
outstanding 11.75% Senior Subordinated Notes due 2005 and 11.75% Series C Senior
Subordinated Notes due 2005 (the "Debt Tender Offer"). The Debt Tender Offer
shall be made by means of an offer to purchase and consent solicitation on the
terms set forth in Annex C to this Agreement.
(h) As soon as practicable on the date the Offer is commenced, with respect
to the Offer (i) the parties hereto, together with such other persons as shall
be required to be included as parties to such filing, shall file with the
Securities and Exchange Commission (the "SEC") a Tender Offer Statement on
Schedule TO (together with any amendments and supplements thereto and including
the exhibits thereto, the "Schedule TO"). The Schedule TO shall contain or
incorporate by reference an offer to purchase and a form of letter of
transmittal and any other documents related to the Offer (the Schedule TO, the
offer to purchase and such other documents, together with any amendments and
supplements thereto, are collectively referred to herein as the "Offer
Documents"). The Offer Documents shall comply in all
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material respects with the provisions of applicable federal securities laws and,
on the date filed with the SEC and on the date first published, sent or given to
the Company's stockholders, shall not 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 were made, not misleading, except that no representation is
made by the Company or Acquisition with respect to information supplied by the
other party in writing for inclusion in the Offer Documents. Each of the parties
hereto shall take all steps necessary to cause the Offer Documents to be filed
with the SEC and to be disseminated to the Company's stockholders, in each case
as and to the extent required by applicable federal securities laws. Each of the
parties hereto shall promptly correct any information provided by it for use in
the Offer Documents if and to the extent that such information shall have become
false or misleading in any material respect, and shall take all steps necessary
to cause the Offer Documents, as so corrected, to be filed with the SEC and to
be disseminated to the Company's stockholders, in each case as and to the extent
required by applicable federal securities laws. Each of the parties hereto and
its counsel shall be given a reasonable opportunity to review and comment on the
Offer Documents before they are filed with the SEC. In addition, each of the
parties hereto shall provide to the other party and its counsel in writing any
comments or other communications that such party or its counsel may receive from
time to time from the SEC or its staff with respect to the Offer Documents
promptly after the receipt of such comments or other communications.
Section 1.02 COMPANY ACTIONS. (a) The Company hereby approves of and
consents to the Offer and represents that its Board, at a meeting duly called
and held and acting on the unanimous recommendation of the Special Committee,
has (i) determined that this Agreement and the transactions contemplated hereby,
including the Offer and the Merger, are advisable and in the best interests of
the Company's stockholders (other than Acquisition, the Participants or their
respective Affiliates), (ii) duly approved the adoption of this Agreement and
the transactions contemplated hereby, including the Offer and the Merger, which
approval satisfies in full the requirements of prior approval contained in
Section 203(a)(1) of the DGCL, (iii) resolved to recommend that the stockholders
of the Company accept the Offer, tender their Shares thereunder and approve this
Agreement and the Merger PROVIDED, HOWEVER, that such recommendation may be
withdrawn or modified to the extent that the Special Committee determines in
good faith that such action is required in order to comply with its fiduciary
duties after receiving advice to such effect from its special counsel and
(iv) resolved to amend the Rights Agreement as contemplated herein.
(b) As soon as practicable on the date the Offer is commenced, the Company
shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with any amendments or supplements thereto, the
"Schedule 14D-9") containing the recommendation described in
Section 1.02(a)(iii) of this Agreement and to disseminate the Schedule 14D-9 to
the Company's stockholders, together with the Offer Documents, promptly after
the commencement of the Offer. Each of the parties hereto agrees to promptly
correct any information provided by it for use in the Schedule 14D-9 if and to
the extent that it shall have become false or misleading in any material respect
and the Company further agrees to take all steps necessary to cause the
Schedule 14D-9, as so corrected, to be filed with the SEC and disseminated to
the Company's stockholders, in each case as and to the extent required by
applicable federal securities laws. Acquisition shall be given a reasonable
opportunity to review and comment on the Schedule 14D-9 before it is filed with
the SEC. In addition, the Company shall provide Acquisition and its counsel in
writing with any comments or other communications that the Company or its
counsel may receive from time to time from the SEC or its staff with respect to
the Schedule 14D-9 promptly after the receipt of such comments or other
communications.
(c) In connection with the Offer, if requested by Acquisition, the Company
shall promptly furnish Acquisition with mailing labels, security position
listings and any available listing or computer file containing the names and
addresses of the record holders of the Shares as of a recent date, and shall
furnish Acquisition with such additional information and such other assistance
as Acquisition or its agents
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may reasonably request in communicating the Offer to the record and beneficial
holders of Shares. Subject to the requirements of applicable law, and except for
such steps as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Merger, Acquisition and their affiliates
and agents shall hold in confidence the information contained in any of such
labels, listings and files, shall use such information only in connection with
the Offer and the Merger, and, if this Agreement is terminated, shall, upon
request of the Company, deliver or cause to be delivered to the Company all
copies of such information and any extracts or summaries of such information
then in their possession.
Section 1.03 BOARDS OF DIRECTORS; COMMITTEES;
SECTION 14(F). (a) Promptly after the purchase of and payment pursuant to the
Offer of such number of Shares that satisfies the Minimum Condition, Acquisition
shall be entitled to designate for election to the Board such number of persons
as will cause a majority of directors of the Company to consist of persons
designated by Acquisition, and the Company shall, upon written request by
Acquisition, promptly, at the Company's election, either increase the size of
the Board or take such other actions as may be necessary so as to include on,
and cause to be elected to the Board, the individual or individuals designated
by Acquisition.
(b) The Company's obligations to appoint designees to the Board shall be
subject to Section 14(f) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and Rule 14f-1 promulgated thereunder. The Company shall
promptly take all actions required pursuant to Section 14(f) and Rule 14f-1 in
order to fulfill its obligations under this Section 1.03 and shall include in
the Schedule 14D-9 mailed to the Company's stockholders promptly after the
commencement of the Offer such information with respect to the Company and its
officers and directors as is required under Section 14(f) and Rule 14f-1 to
fulfill its obligations under this Section 1.03. Acquisition will supply to the
Company and be solely responsible for any information with respect to itself and
its nominees, officers, directors and affiliates required by Section 14(f) and
Rule 14f-1.
(c) Following the election or appointment of Acquisition's designees
pursuant to this Section 1.03 and prior to the Effective Time (as hereinafter
defined), any amendment or termination of this Agreement, extension of the time
for the performance of any of the obligations or other acts of Acquisition,
waiver of any of the Company's rights hereunder, action in connection with this
Agreement required to be taken by the Board of Directors of the Company,
amendment to the Company's Certificate of Incorporation, Bylaws or Rights
Agreement, or action that would be reasonably likely to adversely affect the
interests of stockholders of the Company (other than Acquisition, the
Participants or their respective affiliates) in any material respect, shall
require the concurrence of a majority of the directors of the Company then in
office who are neither designated by Acquisition nor employees of the Company.
Section 1.04 OPTION TO ACQUIRE ADDITIONAL SHARES. (a) The Company hereby
grants to Acquisition an irrevocable option (the "Option") to purchase up to
that number of newly issued Shares (the "Option Shares") equal to the number of
Shares, that when added to the number Shares owned by Purchaser and its
affiliates immediately following consummation of the Offer, shall constitute 90%
of the Shares then outstanding on a fully diluted basis (giving effect to the
issuance of the Option Shares) for a consideration per Option Share equal to the
Per Share Amount; PROVIDED, HOWEVER, that the number of Option Shares shall not
exceed that number equal to 19.9% of the Shares outstanding on the date of this
Agreement.
(b) The Option may be exercised by Acquisition at any time at or after the
acceptance for payment by Acquisition of Shares pursuant to the Offer in
accordance with the terms of this Agreement. In the event Acquisition wishes to
exercise the Option, Acquisition shall give written notice (the "Notice") of its
exercise of the Option specifying the number of Shares that are or will be owned
by Acquisition and its affiliates immediately following consummation of the
Offer and a place and a time (which may be concurrent with the consummation of
the Offer) for the closing of such purchase. The Company shall, as soon as
possible following receipt of the Notice, deliver written notice to Acquisition
specifying the number of Option Shares.
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(c) At the closing of the purchase of the Option Shares, (i) the Company
will deliver to Acquisition a certificate or certificates representing the
number of Option Shares so purchased and (ii) Acquisition will make payment to
the Company of the aggregate price for the Option Shares being purchased, as
stated in the Notice, by check or wire transfer in an amount equal to the
product of (x) the Per Share Amount and (y) the total number of Option Shares
delivered at the closing. The Company shall pay all expenses, and any and all
United States Federal, state and 1ocal taxes and other charges, that may be
payable in connection with the preparation, issuance and delivery of stock
certificates under this Section 1.04.
ARTICLE II
THE MERGER
Section 2.01 THE MERGER. At the Effective Time and upon the terms and
subject to the conditions of this Agreement and the DGCL, Acquisition shall be
merged with and into the Company. Following the Merger, the Company shall
continue as the surviving corporation (the "Surviving Corporation") and the
separate corporate existence of Acquisition shall cease.
Section 2.02 CLOSING. The closing of the Merger (the "Closing") shall take
place at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP at 0 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx at 10:00 a.m., local time, on a date to be specified
by the parties hereto, which shall be no later than the second business day
after satisfaction or waiver of all of the conditions set forth in Article VII
hereof (the "Closing Date"), unless another date or place is agreed to in
writing by the parties thereto.
Section 2.03 EFFECTIVE TIME. As soon as practicable after the satisfaction
or waiver of the conditions set forth in Article VII hereof, the parties hereto
shall cause the Merger to become effective by the filing with the Secretary of
State of Delaware of a certificate of merger or other appropriate documents
executed in accordance with the relevant provisions of the DGCL, and shall take
all such other and further actions as may be required by applicable law to make
the Merger effective. The date and time when the Merger shall become effective
is herein referred to as the "Effective Time."
Section 2.04 EFFECTS OF THE MERGER. The Merger shall have the effects set
forth in the DGCL. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the property, rights, privileges, powers and
franchises of the Company and Acquisition shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and
Acquisition shall become the debts, liabilities and duties of the Surviving
Corporation.
Section 2.05 CERTIFICATE OF INCORPORATION AND BY-LAWS. At the Effective
Time, (i) the certificate of incorporation of the Company shall be amended and
restated in its entirety to read in the form of the certificate of incorporation
of Acquisition as in effect immediately prior to the Effective Time and such
amended and restated certificate of incorporation shall be the certificate of
incorporation of the Surviving Corporation until thereafter amended as provided
therein or by applicable law and (ii) the by-laws of the Company shall be
amended and restated in their entirety to read in the form of the by-laws of
Acquisition as in effect immediately prior to the Effective Time, and such
amended and restated by-laws shall be the by-laws of the Surviving Corporation
until thereafter amended as provided therein or by applicable law.
Section 2.06 DIRECTORS. The directors of Acquisition immediately prior to
the Effective Time shall be the initial directors of the Surviving Corporation
and shall hold office in accordance with the certificate of incorporation and
by-laws of the Surviving Corporation from the Effective Time until their
respective successors are duly elected or appointed and qualified.
Section 2.07 OFFICERS. The officers of the Company immediately prior to
the Effective Time shall be the initial officers of the Surviving Corporation
and shall hold office in accordance with the certificate of incorporation and
by-laws of the Surviving Corporation from the Effective Time until their
respective successors are duly elected and appointed and qualified.
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Section 2.08 STOCKHOLDERS MEETING. If required by applicable law to
consummate the Merger, the Company, acting through its Board, shall, in
accordance with and to the extent permitted by applicable law:
(a) duly call, give notice of, convene and hold a special meeting of its
stockholders (the "Stockholders Meeting") as soon as practicable following
the expiration or termination of the Offer for the purpose of considering
and taking action upon this Agreement;
(b) subject to its fiduciary duties under applicable law as advised by
special counsel to the Special Committee, include in the Proxy Statement (as
defined herein) the recommendation of the Special Committee and the Board
that stockholders of the Company vote in favor of the approval and adoption
of this Agreement and the Merger; and
(c) prepare and file with the SEC a preliminary proxy or information
statement relating to this Agreement and the Merger and use its reasonable
best efforts to obtain and furnish the information required to be included
by it in the Proxy Statement and, after consultation with Acquisition,
respond promptly to any comments made by the SEC with respect to the
preliminary proxy statement or information statement and cause a definitive
proxy or information statement relating to this Agreement and the Merger
(the "Proxy Statement") to be mailed to its stockholders at the earliest
practicable time following the expiration or termination of the Offer.
Acquisition shall provide the Company with the information concerning it and
the transactions contemplated by the Commitment Letters required to be included
in the Proxy Statement and shall promptly correct any information provided by it
to the Company for use in the Proxy Statement if and to the extent that it shall
have become false or misleading in any material respect. At the Stockholders
Meeting, Acquisition will vote, or cause to be voted, all Shares owned by it in
favor of this Agreement and the transactions contemplated hereby.
Section 2.09 MERGER WITHOUT MEETING OF STOCKHOLDERS. In the event that
Acquisition or any of its subsidiaries shall acquire at least 90 percent of the
outstanding Shares pursuant to the Offer or otherwise, each of the parties
hereto shall take all necessary and appropriate action to cause the Merger to
become effective as soon as practicable after such acquisition, without the
Stockholders Meeting, in accordance with Section 253 of the DGCL.
ARTICLE III
CONVERSION OF SECURITIES
Section 3.01 CONVERSION OF SHARES. (a) At the Effective Time, each Share
issued and outstanding immediately prior to the Effective Time (other than
(i) Shares held in the Company's treasury, (ii) Shares held, directly or
indirectly, by Acquisition, or by a Participant and (iii) Dissenting Shares (as
defined in Section 3.03(a)) shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into the right to
receive, upon the surrender of the certificate formerly representing such Share,
cash in an amount equal to the Per Share Amount. The Per Share Amount shall not
accrue interest.
(b) Each Share held in the treasury of the Company and each Share held by
Acquisition or any wholly owned subsidiary of Acquisition immediately prior to
the Effective Time shall, by virtue of the Merger and without any action on the
part of the holder thereof, be cancelled, retired and cease to exist without any
conversion thereof and no payment shall be made with respect thereto. Each Share
held by a Participant shall be converted into the right to retain one fully paid
and nonassessable share of common stock, par value $0.01 per share, of the
Surviving Corporation (a "Retained Share") or the right to receive the Per Share
Amount, as agreed to between the Participant and Acquisition. For purposes of
this Agreement, a "Participant" shall mean any individual designated as a
Participant by Acquisition prior to the Effective Time. The Company acknowledges
that the consummation of the Merger shall constitute a "Change in Control" for
purposes of the shares of restricted stock of the Company granted to the
Participants and that such Shares shall be treated as Shares for purposes of
this Agreement.
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(c) Each Share to be converted into the right to receive either the Per
Share Amount pursuant to Section 3.01(a) hereof or the Retained Shares pursuant
to Section 3.01(b) hereof, when so converted, shall no longer be outstanding and
shall automatically be cancelled and retired and shall cease to exist, and each
holder of a certificate representing any such Shares shall cease to have any
rights with respect thereto, except the right to receive the Per Share Amount or
the Retained Shares, as the case may be, therefor upon the surrender of such
certificate in accordance with Section 3.04 hereof.
(d) Each share of Acquisition common stock, par value $0.01 per share,
issued and outstanding immediately prior to the Effective Time shall, by virtue
of the Merger and without any action on the part of the holder thereof, be
converted into a Retained Share. Each share of Acquisition preferred stock, par
value $0.01 per share, issued and outstanding immediately prior to the Effective
Time shall by virtue of the Merger and without any action on the part of the
holder thereof, be converted into the right to one share of preferred stock, par
value $0.01 per share, of the Surviving Corporation.
Section 3.02 COMPANY OPTIONS. (a) Except as provided in Section 3.02(b)
hereof and unless otherwise agreed to by the holder of an outstanding option to
purchase Shares or other similar interest (collectively, the "Options") granted
under any of the Company's stock option plans or under any other plan or
arrangement (the "Option Plans"), the Company shall take all actions necessary
and appropriate to provide that, upon the Effective Time, each Option, whether
or not then exercisable or vested, shall be cancelled and, in exchange therefor,
each holder of such Option shall receive an amount in cash in respect thereof,
if any, equal to the product of (i) the excess, if any, of the Per Share Amount
over the per Share exercise price thereof and (ii) the number of Shares subject
thereto (such payment to be net of applicable withholding taxes). The Company
shall take all such steps as may be required to cause the transactions
contemplated by this Section 3.02 and any other dispositions of its equity
securities (including derivative securities) in connection with this Agreement
by each individual who is a director or officer of the Company, to be exempt
under Rule 16b-3 promulgated under the Exchange Act, such steps to be taken in
accordance with the No-Action Letter dated January 12, 1999, issued by the SEC
to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP.
(b) Notwithstanding the foregoing, at the Effective Time, to the extent
agreed to by Acquisition and the applicable holder thereof, each outstanding
Option held by a Participant, whether or not then exercisable or vested
(collectively, the "Retained Options"), shall, as of the Effective Time,
continue to represent an option to acquire shares of common stock of the
Surviving Corporation on the terms agreed to by Acquisition and such
Participant.
(c) Prior to the Effective Time, the Company shall amend the terms of its
Option Plans as is necessary to give effect to the provisions of this
Section 3.02.
Section 3.03 DISSENTING SHARES. (a) Notwithstanding anything in this
Agreement to the contrary, each Share which is issued and outstanding
immediately prior to the Effective Time and which is held by a stockholder who
has properly exercised appraisal rights with respect thereto in accordance with
Section 262 of the DGCL (collectively, the "Dissenting Shares") shall not be
converted into or be exchangeable for the right to receive the Per Share Amount,
but such stockholders shall be entitled to receive payment of the appraised
value of such Shares in accordance with the provisions of Section 262 of the
DGCL, except that any Dissenting Shares held by a stockholder who shall
thereafter withdraw such demand for appraisal of such Shares or lose the right
to such payment as provided in Section 262 of the DGCL shall thereupon be deemed
to have been converted into and to have become exchangeable for, at the
Effective Time, the right to receive the Per Share Amount, without any interest
thereon.
(b) The Company shall give Acquisition (i) prompt notice of any written
demands under Section 262 of the DGCL with respect to any Shares, any withdrawal
of any such demand, and any other instruments served pursuant to Section 262 of
the DGCL and received by the Company and (ii) the right to participate in all
negotiations and proceedings with respect to any demands under Section 262 of
the DGCL with respect to any shares of capital stock of the Company. The Company
shall cooperate with Acquisition
11
concerning, and shall not, except with the prior written consent of Acquisition,
voluntarily make any payment with respect to, or offer to settle or settle, any
such demands.
Section 3.04 EXCHANGE OF SHARES. (a) Prior to the Effective Time,
Acquisition shall designate a bank or trust company reasonably acceptable to the
Special Committee to act as paying agent (the "Paying Agent") for purposes of
making cash payments contemplated hereby. As soon as practicable following the
Effective Time, Acquisition shall deposit or cause to be deposited with the
Paying Agent the funds necessary to make the payments contemplated by
Section 3.01(a) (the "Payment Fund"). The Payment Fund shall be invested by the
Paying Agent as directed by the Surviving Corporation; provided that such
investment shall be invested 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 Service, Inc. or Standard & Poor's Ratings Service,
respectively, or in certificates of deposit, bank repurchase agreements or
bankers' acceptances of commercial banks with capital exceeding $500 million.
(b) The Payment Fund shall not be used for any other purpose except as
otherwise agreed to by Acquisition and the Company. Promptly following the date
which is twelve months after the Effective Time, the Paying Agent shall return
to the Surviving Corporation all cash, certificates and other instruments in its
possession that constitute any portion of the Payment Fund, and the Paying
Agent's duties shall terminate. Thereafter, each holder of a Certificate shall
be entitled to look to the Surviving Corporation (subject to applicable
abandoned property, escheat and similar laws) only as general creditors thereof
with respect to the Per Share Amount payable upon due surrender of their
Certificates, without interest thereon. Notwithstanding anything to the contrary
in this Section 3.04, none of the Paying Agent, Acquisition or the Surviving
Corporation shall be liable to a holder of a Certificate formerly representing
Shares for any amount properly paid to a public official pursuant to any
applicable property, escheat or similar law.
(c) Promptly (but in any event no later than five business days) after the
Effective Time, the Paying Agent shall mail to each record holder of a
certificate or certificates which immediately prior to the Effective Time
represented Shares, other than holders of certificates formerly representing
Shares which shall become entitled to receive Retained Shares pursuant to
Section 3.01(b) hereof and certificates representing Dissenting Shares (such
certificates, other than those representing Shares to be converted into the
right to receive Retained Shares pursuant to Section 3.01(b) hereof and
Dissenting Shares are collectively referred to herein as the "Certificates"), a
form of letter of transmittal (which shall specify that the delivery shall be
effected, and risk of loss and title shall pass, only upon proper delivery of
the Certificates to the Paying Agent) and instructions for use in effecting the
surrendering to the Paying Agent of such Certificates for exchange into the Per
Share Amount. Upon surrender of a Certificate to the Paying Agent together with
a duly executed letter of transmittal and any other required documents, the
holder of such Certificate shall be entitled to receive in exchange therefor the
Per Share Amount payable in respect of each Share represented thereby and such
Certificate shall forthwith be cancelled. If payment is to be made to a person
other than the person in whose name a Certificate so surrendered is registered,
it shall be a condition of payment that the Certificate so surrendered shall be
properly endorsed or otherwise in proper form for transfer and that the person
requesting such payment shall pay any transfer or other taxes required by reason
of the payment to a person other than the registered holder of the Certificate
so surrendered or establish to the satisfaction of the Surviving Corporation
that such tax has been paid or is not applicable.
(d) After the Effective Time, there shall be no transfers on the stock
transfer books of the Surviving Corporation of the Shares which were outstanding
immediately prior to the Effective Time. From and after the Effective Time, the
holders of Certificates evidencing ownership of Shares outstanding immediately
prior to the Effective Time shall cease to have any rights with respect to such
Shares except as otherwise provided herein or by applicable law. If, after the
Effective Time, Certificates are presented to the Surviving Corporation, they
shall be cancelled and exchanged as provided in this Article III.
12
(e) In the event any Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the person claiming such
certificate to be lost, stolen or destroyed, the Paying Agent shall issue in
exchange for such lost, stolen or destroyed certificate the Per Share Amount
deliverable in respect thereof as determined in accordance with this
Article III. When authorizing such payment of the Per Share Amount in exchange
therefor, the person to whom the Per Share Amount is paid shall, if requested by
the Surviving Corporation, give the Surviving Corporation a bond in such
reasonable sum as it may direct or to otherwise indemnify the Surviving
Corporation in a manner reasonably satisfactory to it against any claim that may
be made with respect to the Certificate alleged to have been lost, stolen or
destroyed.
(f) If so specified in the Offer Documents, Acquisition, the Company, the
Surviving Corporation and the Paying Agent shall be entitled to deduct and
withhold from the consideration otherwise payable to a holder of Shares pursuant
to the Offer or Merger such amounts as Acquisition, the Company, the Surviving
Corporation and the Paying Agent are required to deduct and withhold with
respect to the making of such payment under the Internal Revenue Code of 1986,
as amended (the "Code") or any provision of state, local or foreign tax law. To
the extent amounts are so withheld by Acquisition, the Company, the Surviving
Corporation or the Paying Agent, the withheld amounts (i) shall be treated for
all purposes of this Agreement as having been paid to the holder of the Shares
in respect of which the deduction and withholding was made, and (ii) shall be
promptly paid over to the applicable taxing authority.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as otherwise disclosed in the SEC Reports (as defined) or as set
forth in the disclosure schedule delivered to Acquisition on the date hereof
(the "Disclosure Schedule"), the Company represents and warrants to Acquisition
as follows:
Section 4.01 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. Each of the
Company and its subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and
has all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted, except where the
failure to be so organized, existing and in good standing or to have such power
and authority would not in the aggregate have a Material Adverse Effect (as
hereinafter defined). The Company and each of its subsidiaries is duly qualified
as a foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or leased or the nature
of its activities make such qualification necessary, except for failures to be
so qualified or in good standing which would not, individually or in the
aggregate, have a Material Adverse Effect and would not impair the ability of
the Company to perform its obligations hereunder in any material respect. When
used in connection with the Company or any of its subsidiaries, the term
"Material Adverse Effect" means any fact, event, change or effect having, or
which could reasonably be expected to have, a material adverse effect on the
business, properties, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole; PROVIDED, HOWEVER, that facts,
events, changes or effects that are applicable to or arise on account of
(i) any changes in economic, regulatory or political conditions generally,
(ii) this Agreement or the transactions contemplated hereby, (iii) the industry
of the Company generally or (iv) the effect of the public announcement of the
transactions contemplated hereby, shall be excluded from the definition of
"Material Adverse Effect" and from any determination as to whether a Material
Adverse Effect has occurred or may occur. Section 4.01 of the Disclosure
Schedule sets forth the name, jurisdiction of incorporation and percentages of
outstanding capital stock owned, directly or indirectly, by the Company, with
respect to each corporation of which the Company owns, directly or indirectly, a
majority of the outstanding capital stock. Except as disclosed in Section 4.01
of the Disclosure Schedule, all of the outstanding shares of capital stock of
each of the Company's subsidiaries have been validly issued and are fully paid
and nonassessable and are owned,
13
directly or indirectly, by the Company, free and clear of any liens, pledges,
security interests, claims, preemptive rights or other encumbrances
(collectively, "Liens").
Section 4.02 CAPITALIZATION OF THE COMPANY. The authorized capital stock
of the Company consists of 201,000,000 Shares of which, as of the date hereof,
10,322,280 Shares are issued and outstanding, and 20,000,000 shares of preferred
stock, par value $0.01 per share, of which, as of the date hereof, no shares are
issued and outstanding. As of the date hereof, 660,168 Shares are subject to
outstanding Options, and no Shares were subject to issuance pursuant to the
Company's 401(k) savings plans. All of the outstanding Shares have been validly
issued, fully paid and nonassessable. Except as set forth above or pursuant to
the exercise of outstanding Options and except for Rights under the Rights
Agreement, there are outstanding (i) no shares of capital stock of the Company,
(ii) no securities of the Company convertible into or exchangeable for shares of
capital stock of the Company and (iii) no options or other rights to acquire
from the Company or any of its subsidiaries, and no other obligation of the
Company or any of its subsidiaries to issue, any capital stock, voting
securities or other ownership interests in, or any securities convertible into
or exchangeable for any capital stock, voting securities or ownership interests
in, the Company. There are no outstanding obligations of the Company or any of
its subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock of the Company. Following the Merger, none of the Company or any
of its subsidiaries will have any obligation to issue, transfer or sell any
shares of its capital stock or other securities of the Company or any of its
subsidiaries pursuant to any employee benefit plan or otherwise.
Section 4.03 AUTHORIZATION. The Company has all requisite corporate power
and authority to execute and deliver this Agreement and, subject to any required
vote of the stockholders of the Company as described in Sections 2.08 and 2.09
hereof, to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized by the Board and no other corporate
proceedings on the part of the Company are necessary to authorize this Agreement
or to consummate the transactions so contemplated (other than, with respect to
the Merger, the approval of this Agreement by the holders of a majority of the
then outstanding Shares, if so required). This Agreement has been duly and
validly executed and delivered by the Company and, assuming the due
authorization, execution and delivery hereof by Acquisition, constitutes a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency and similar laws affecting creditors' rights and remedies generally.
Section 4.04 NON-CONTRAVENTION. Except for (a) filings, if required,
pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended
(the "HSR Act"), (b) filings required in connection with or in compliance with
the Securities Act (as defined), the Exchange Act and the DGCL, (c) applicable
requirements under corporation or "blue sky" laws of various states,
(d) matters specifically described in this Agreement and (e) the matters
described in Section 4.04 of the Disclosure Schedule, neither the execution,
delivery and performance of this Agreement by the Company nor the consummation
by the Company of the transactions contemplated hereby shall (i) violate any
provision of the certificate of incorporation or by-laws of the Company or any
of its subsidiaries, (ii) result in a violation or breach of, or constitute
(with or without notice or lapse of time or both) a default under, or give rise
to any right of termination, cancellation or acceleration of any obligation
under, or result in the creation of any Lien upon any property or asset of the
Company or any of its subsidiaries under, any provision of any material note,
bond, indenture, mortgage, lease, contract, agreement, instrument, license or
other obligation to which the Company or any of its subsidiaries is a party or
by which any of them or their properties or assets may be bound, (iii) violate
any law, rule, regulation, judgment, injunction, order or decree applicable to
the Company or any of its subsidiaries or any of their properties or assets, or
(iv) require any filing or registration with, notification to, or authorization,
consent or approval of, any court, legislative, executive or regulatory
authority or agency (each, a "Governmental Authority"), except in the case of
the foregoing clauses (ii), (iii) or (iv) for such violations, breaches or
defaults which, or filings, registrations, notifications,
14
authorizations, consents or approvals the failure of which to obtain would not
have a Material Adverse Effect.
Section 4.05 COMPLIANCE WITH APPLICABLE LAWS. The Company and its
subsidiaries are in compliance with all applicable statutes, laws, ordinances,
rules, orders and regulations of any Governmental Authority, and neither the
Company nor any of its subsidiaries has received notification of any asserted
present or past failure to so comply, except where such failure to be in
compliance would not have a Material Adverse Effect. No investigation, review,
inquiry or proceeding by any Governmental Authority with respect to the Company
or its subsidiaries is, to the knowledge of the Company, pending or threatened,
except those, the outcome of which would not have a Material Adverse Effect. The
Company and its material subsidiaries hold all permits, licenses, variances,
exemptions, orders, registrations and approvals of all Governmental Authorities
which are necessary for the operation of their respective businesses (the
"Permits"), except where the failure to hold any such Permits would not have a
Material Adverse Effect. The Company and its subsidiaries are in compliance with
the terms of the Permits, except where such failure to be in compliance would
not have a Material Adverse Effect.
Section 4.06 SEC REPORTS. The Company has filed all forms, reports and
documents with the SEC since January 1, 1998 required to be filed by it under
the Securities Act of 1933, as amended (the "Securities Act"), and the Exchange
Act (collectively, the "SEC Reports"). As of their respective filing dates, none
of the SEC Reports or the amendments thereto contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The consolidated financial statements of the Company contained
in the SEC Reports have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as otherwise stated in such financial statements) and present
fairly in all material respects the consolidated financial position of the
Company and its subsidiaries as of the respective dates thereof and their
consolidated results of their operations and cash flows for the respective
periods or as of the respective dates set forth therein (subject to normal
year-end adjustments in the case of any unaudited interim financial statements).
Section 4.07 ABSENCE OF CERTAIN CHANGES. Except as set forth in
Section 4.07 of the Disclosure Schedule or as set forth or otherwise reflected
in the SEC Reports or as contemplated by this Agreement, since December 31,
1999, neither the Company nor any of its subsidiaries has (a) taken any of the
actions set forth in Section 6.01, (b) suffered any Material Adverse Effect or
(c) entered into any transaction, or conducted its business or operations, other
than in the ordinary course of business consistent with past practice.
Section 4.08 LITIGATION. There is no action, suit or proceeding pending
or, to the knowledge of the Company, threatened, against the Company or any of
its subsidiaries, by or before any court or Governmental Authority that would
have, or could reasonably be expected to have, a Material Adverse Effect.
Section 4.09 COMPANY INFORMATION. None of the information supplied or to
be supplied by the Company, or any of its officers, directors, employees,
representatives or agents, for inclusion or incorporation by reference in the
Offer Documents, the Schedule 14D-9 or the Proxy Statement, including any
amendments or supplements thereto, shall, at the respective times the Offer
Documents and the Schedule 14D-9 are filed with the SEC or first published, sent
or given to the Company's stockholders, or, in the case of the Proxy Statement,
at the date the Proxy Statement is first mailed to the Company's stockholders or
at the time of the Stockholders Meeting, contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. Each of the Schedule 14D-9 and the Proxy Statement shall
comply as to form in all material respects with the provisions of the Exchange
Act and the rules and regulations thereunder. Notwithstanding the foregoing, the
Company does not make any representation or warranty with respect to the
information that has been supplied by Acquisition or its officers, directors,
15
employees, representatives or agents for inclusion or incorporation by reference
in any of the foregoing documents.
Section 4.10 BROKERS AND FINDERS. No broker, finder or investment banker
(other than Xxxxxx X. Xxxxxx and Xxxxxx X. Xxxxxx (or any entity controlled by
them) and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, a true and correct
copy of whose engagement agreement has been provided to Acquisition) is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company.
Section 4.11 OPINION OF FINANCIAL ADVISOR. The Special Committee has
received the opinion of Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated,
financial advisor to the Special Committee, to the effect that, as of the date
of such opinion, the Per Share Amount to be received in the Offer and the Merger
is fair to the holders of Shares (other than Acquisition, the Participants or
their affiliates) from a financial point of view.
Section 4.12 TAKEOVER STATUTES. The Board (acting upon the unanimous
recommendation of the Special Committee) has unanimously approved the terms of
this Agreement and the consummation of the Offer, the Merger and the other
transactions contemplated hereby, and such approval constitutes approval of this
Agreement and the transactions contemplated hereby by the Board under
Section 203 of the DGCL and represents all the action necessary to ensure that
such Section 203 does not apply to Acquisition or the Participants in connection
with the Offer, the Merger and the other transactions contemplated hereby.
Section 4.13 RIGHTS AGREEMENT. The Company has taken all actions necessary
to render the Rights issued pursuant to the terms of the Rights Agreement
inapplicable to the Offer, the Merger, this Agreement and the other transactions
contemplated hereby.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF ACQUISITION
Acquisition represents and warrants to the Company as follows:
Section 5.01 ORGANIZATION. Acquisition is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being conducted, except where
the failure to be so organized, existing and in good standing or to have such
power and authority would not impair the ability of Acquisition to perform its
obligations hereunder in any material respect.
Section 5.02 CAPITALIZATION. The authorized capital stock of Acquisition
consists of 1,000 shares of common stock, par value $0.01 per share, and 200,000
shares of preferred stock, par value $0.01 per share, of which, as of the date
hereof, 100 shares of common stock are issued and outstanding. All the issued
and outstanding shares of capital stock of Acquisition are validly issued, fully
paid and nonassessable and free of preemptive rights.
Section 5.03 AUTHORIZATION. Acquisition has all necessary corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized by the Board of Directors of Acquisition and by the
stockholders of Acquisition and no other corporate proceedings on the part of
Acquisition are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Acquisition and, assuming the due authorization,
execution and delivery hereof by the Company, constitutes a valid and binding
agreement of Acquisition enforceable against Acquisition in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency and
similar laws affecting creditor's rights and remedies generally.
16
Section 5.04 PROXY STATEMENT; SCHEDULE 14D-9; SCHEDULE TO. None of the
information supplied or to be supplied by Acquisition, or any of its officers,
directors, employees, representatives or agents, for inclusion or incorporation
by reference in the Proxy Statement, the Schedule 14D-9 or the Offer Documents,
including any amendments or supplements thereto, will, at the respective times
that the Proxy Statement, the Schedule 14D-9 and the Offer Documents, or any
amendments or supplements thereto, are filed with the SEC or first published,
sent or given to the Company's stockholders or, in the case of the Proxy
Statement or the Schedule TO, at the date first mailed to the Company's
stockholders or at the time of the Stockholders Meeting or at the Effective
Time, 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. The Schedule TO shall comply as to form in all material respects
with the provisions of the Exchange Act and the rules and regulations
thereunder.
Section 5.05 FINANCING. Acquisition has received and furnished to the
Company true and complete copies of (i) the senior secured credit facility
commitment letter and fee letter, each dated January 28, 2000, among Canadian
Imperial Bank of Commerce, CIBC World Markets Corp., First Union National Bank,
First Union Securities, Inc., Acquisition and the Company, (ii) the senior
subordinated increasing note bridge facility commitment letter, fee letter and
indemnity letter, each dated January 28, 2000, among CIBC World Markets Corp.,
First Union Investors, Inc., Acquisition and the Company, (iii) the engagement
letter, dated January 28, 2000, among CIBC World Markets Corp., First Union
Securities, Inc., Acquisition and the Company, (iv) the senior preferred stock
commitment letter and indemnity letter, each dated January 28, 2000, among
Caravelle Investment Fund, L.L.C., CIBC WMC Inc., Albion Alliance Mezzanine
Fund, L.P., Albion Alliance Mezzanine Fund II, L.P., Acquisition and the
Company, and (v) the financial advisory engagement letter, dated January 28,
2000, among CIBC World Markets Corp., Acquisition and the Company (collectively,
the "Commitment Letters"), relating to the financing (the "Financing") of the
Offer and the Merger. The Commitment Letters provide, subject to the terms and
conditions set forth therein, for financing in an amount sufficient to purchase
and pay for the Shares tendered in the Offer, pay the Per Share Amount and to
pay all fees and expenses in connection with the Offer, Merger and the
transactions contemplated hereby. Each of the Commitment Letters is in full
force and effect and, since their respective dates, none of the Commitment
Letters has been withdrawn, amended or terminated in any manner adverse to the
Company. Acquisition has taken all actions required to cause the Commitment
Letters to be effective, and each of the Commitment Letters is a valid and
binding commitment of Acquisition. As of the date hereof, Acquisition is not
aware of any fact, circumstances or condition that is reasonably likely to
result in any of the conditions set forth in the Commitment Letters not being
satisfied.
Section 5.06 NO PRIOR ACTIVITIES. Except for the obligations or
liabilities incurred in connection with its incorporation or organization or the
negotiation and execution of this Agreement and the consummation of the
transactions contemplated hereby, including, without limitation, the financing
of the transactions contemplated hereby, Acquisition has not incurred any
obligations or liabilities nor engaged in any business or activities of any type
or kind whatsoever or entered into any agreements or arrangements with any
person or entity.
Section 5.07 BROKERS AND FINDERS. No broker, finder or investment banker
(other than CIBC World Markets Corp. and First Union Investors, Inc., a true and
correct copy of whose engagement agreement has been provided to the Company), is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated hereby based upon arrangements made by and on
behalf of Acquisition.
Section 5.08 GOVERNMENTAL APPROVALS. Other than the HSR Act, the
Securities Act and the Exchange Act, no notices, reports or other filings are
required to be made by Acquisition with, nor are any consents, registrations,
approvals, permits or authorizations required to be obtained by Acquisition or
from, any Governmental Authority in connection with the execution and delivery
of this Agreement by
17
Acquisition and the consummation by Acquisition of the transactions contemplated
hereby, the failure to make or obtain any or all of which would prevent,
materially hinder or materially burden the transactions contemplated hereby.
Section 5.09 NON-CONTRAVENTION. Except for the matters set forth in
Section 5.08, neither the execution, delivery and performance of this Agreement
by Acquisition nor the consummation by Acquisition of the transactions
contemplated hereby shall (i) violate any provision of the certificate of
incorporation or by-laws of Acquisition, (ii) result in a violation or breach
of, or constitute (with or without notice or lapse of time or both) a default
under, or give rise to any right of termination, cancellation or acceleration of
any obligation under, or result in the creation of any Lien upon any property or
asset of Acquisition under, any provisions of any material note, bond, mortgage,
lease, contract, agreement, instrument, license or other obligation to which
Acquisition or its properties or assets may be bound, (iii) violate any law,
rule, regulation, judgment, injunction, order or decree applicable to
Acquisition or any of its properties or assets or (iv) require any filing or
registration with, notification to, or authorization, consent or approval from,
any Governmental Authority, except in the cases of clauses (ii), (iii) or
(iv) for such violations, breaches or defaults which, or filings, registrations,
notifications, authorizations, consents or approvals the failure or which to
obtain would not impair the ability of Acquisition to perform its obligations
hereunder in any material respect.
Section 5.10 CALCULATION OF EBITDA. Section 5.10 of the Disclosure
Schedule sets forth a true and correct calculation of the Company's consolidated
EBITDA (as defined in the Commitment Letters) for the year ended December 31,
1999 (after giving effect to the sale of the Company's rail car division). As of
December 31, 1999, the condition set forth in the Commitment Letters relating to
the Company's consolidated EBITDA being equal to or exceeding $87.5 million was
satisfied.
ARTICLE VI
COVENANTS
Section 6.01 CONDUCT OF BUSINESS OF THE COMPANY. Except as contemplated by
this Agreement during the period from the date hereof to the Effective Time, the
Company and its subsidiaries will each conduct their respective operations in
the ordinary course of business consistent with past practice. Without limiting
the generality of the foregoing, except as otherwise expressly provided in this
Agreement or in the Disclosure Schedule, prior to the Effective Time, none of
the Company (acting through the Special Committee) or any of its subsidiaries
will, directly or indirectly, without the prior written consent of Acquisition:
(a) amend its certificate of incorporation, by-laws (or similar
documents) or amend the Rights Agreement or redeem the rights issued
thereunder;
(b) authorize for issuance, issue, sell, deliver or agree or commit to
issue, sell or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any
shares of capital stock of any class or any other securities, other than
pursuant to any employee benefit plan, option plan or agreement as in effect
as of the date hereof, or amend any of the terms of any such securities or
agreements outstanding as of the date hereof;
(c) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its
capital stock, or redeem or otherwise acquire any of its securities or any
securities of its subsidiaries;
(d) except in the ordinary course of business, (i) incur or assume any
indebtedness for borrowed money; (ii) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other person except wholly owned
subsidiaries of
18
the Company; or (iii) make any loans, advances or capital contributions to,
or investments in, any other person (other than to wholly owned subsidiaries
of the Company);
(e) except in the ordinary course of business, enter into, adopt or
(except as may be required by law) amend or terminate any bonus, profit
sharing, compensation, severance, termination, stock option, stock
appreciation right, restricted stock, performance unit, pension, retirement,
deferred compensation, employment, severance or other employee benefit
agreement, trust, plan, fund or other arrangement for the benefit or welfare
of any director, officer or employee, or increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay
any benefit not required by any plan and arrangement as in effect as of the
date hereof (including, without limitation, the granting of stock options or
performance units);
(f) except in the ordinary course of business and except pursuant to any
agreements or arrangements in effect on the date hereof, acquire, sell,
lease or dispose of any material amount of assets;
(g) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization or
division thereof; (ii) enter into any contract or agreement other than in
the ordinary course of business; (iii) authorize any expenditures not
contemplated by the Company's business plan provided to Acquisition prior to
the date hereof which individually is in excess of $1,000,000 or in the
aggregate are in excess of $5,000,000; or (iv) enter into or amend any
contract, agreement, commitment or arrangement with respect to any of the
matters set forth in this Section 6.01(i);
(h) except in the ordinary course of business, pay, discharge or satisfy
any claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge or
satisfaction of liabilities reflected or reserved against in, or
contemplated by, the consolidated financial statements (or the notes
thereto) of the Company and its subsidiaries; or
(i) take, or agree to take, any of the foregoing actions or any action
which would make any of the representations or warranties of the Company
contained in this Agreement untrue or incorrect as of the date when made or
as of a future date.
Section 6.02 NO SOLICITATION. The Company shall not, and shall not
authorize or permit any of its subsidiaries or any of its or subsidiaries'
officers, directors, employees or agents to, directly or indirectly, solicit,
encourage, participate in or initiate discussions or negotiations with, or
provide any information to, any person, entity or group (other than Acquisition
or any of its affiliates or representatives) concerning any merger,
consolidation, tender offer, exchange offer, sale of all or substantially all of
the Company's assets, sale of shares of capital stock or similar business
combination transaction involving the Company or any principal operating or
business unit of the Company or its subsidiaries (an "Acquisition Proposal").
Upon the execution of this Agreement, the Company shall immediately cease any
discussions or negotiations with any person, entity or group (other than
Acquisition or any of its affiliates or representatives) in connection with an
Acquisition Proposal that are continuing as of the date hereof and shall seek to
have returned to the Company any confidential information provided in any such
discussions or negotiations. Notwithstanding the foregoing, if the Company or
the Special Committee receives a bona fide unsolicited, written Acquisition
Proposal after the date hereof from any person or entity at a price per Share
which the Special Committee reasonably concludes, based on the advice of its
financial advisor or special counsel, is in excess of the Per Share Amount, and
if the Special Committee reasonably concludes, based upon the advice of its
financial advisor and outside legal counsel, that the person or entity
delivering such Acquisition Proposal is reasonably capable of consummating such
Acquisition Proposal (based upon, among other things, the availability of
financing and the degree of certainty of obtaining financing, the expectation of
receipt of required antitrust and other regulatory approvals and the identity
and background of such person), then the Company or the Special Committee may,
directly or indirectly, provide access to or furnish or cause to be furnished
information concerning the Company's business, properties or assets to such
person or entity pursuant to an appropriate confidentiality agreement and the
Company or
19
the Special Committee may participate in and engage in discussions and
negotiations with such person or entity regarding such Acquisition Proposal if
the Special Committee concludes, based upon the advice of its outside legal
counsel, that it is required to take such actions in order to comply with its
fiduciary duties under applicable law. In the event that, after the Company has
received an unsolicited written Acquisition Proposal (without breaching its
obligations under the foregoing sentence) prior to the consummation of the
Offer, the Special Committee determines, in good faith and based upon the advice
of its financial advisor and legal counsel, that it is required to take such
action in order to comply with its fiduciary duties under applicable law, the
Special Committee may do any or all of the following: (x) withdraw or modify the
Board's approval or recommendation of this Agreement, the Offer or the Merger,
and disclose to the Company's stockholders a position contemplated by
Rule 14e-2(a) promulgated under the Exchange Act or otherwise make disclosure to
them, (y) approve or recommend an Acquisition Proposal and (z) terminate this
Agreement, PROVIDED, HOWEVER, that (A) prior to taking any of the foregoing
actions, the Company shall have paid Acquisition the amounts payable pursuant to
Section 8.03 hereof and (B) prior to taking the action described in clause (z)
above, the Special Committee shall have given Acquisition at least two business
days' notice (which shall be in writing) that the Special Committee intends to
terminate this Agreement and provided Acquisition with a reasonable opportunity
to respond to any such Acquisition Proposal.
Section 6.03 ACCESS TO INFORMATION. (a) Between the date hereof and the
Effective Time and subject to applicable law, the Company will give Acquisition
and its authorized representatives access to all employees, plants, offices,
warehouses and other facilities and to all books and records of the Company and
its subsidiaries, will permit Acquisition to make such inspections as
Acquisition may require and will cause the Company's officers and those of its
subsidiaries to furnish Acquisition with such financial and operating data and
other information with respect to the business and properties of the Company and
any of its subsidiaries as Acquisition may from time to time reasonably request.
(b) Acquisition will hold, and will cause its consultants and advisors to
hold, in confidence, unless compelled to disclose by judicial or administrative
process, after notice to and consultation with the Company or by other
requirements of law after notice to and consultation with the Company, all
documents and information concerning the Company and any of its subsidiaries
furnished to Acquisition in connection with the transactions contemplated hereby
(except to the extent that such information can be shown to have been
(i) previously known by Acquisition or its affiliates on a non-confidential
basis, (ii) in the public domain through no fault of Acquisition, or
(iii) later acquired by Acquisition from other sources which it did not
reasonably believe to be subject to confidentiality obligations) and will not
release or disclose such information to any other person, except that
Acquisition may release or disclose such information to its auditors, attorneys,
financial and other advisors and other consultants and to such persons with whom
contacts are made or discussions are held concerning this Agreement or the
transactions contemplated hereby (it being understood that such persons shall be
informed by Acquisition of the confidential nature of such information and shall
be directed to treat such information confidentially). If the transactions
contemplated hereby are not consummated, such confidentiality shall be
maintained except under the circumstances described under (i), (ii) or (iii) of
this Section 6.03(b).
Section 6.04 REASONABLE BEST EFFORTS. Subject to the terms and conditions
herein provided, each of the parties hereto shall use its reasonable best
efforts to take, or cause to be taken, all action, and to do, or cause to be
done, and to assist and cooperate with the other parties hereto in doing, all
things necessary, proper or advisable under applicable laws and regulations to
ensure that the conditions set forth in Article VII hereof are satisfied and to
consummate and make effective, in the most expeditious manner practicable the
transactions contemplated hereby including, without limitation, cooperation in
the preparation and filing of the Offer Documents, the Schedule 14D-9, the
Schedule TO, the Proxy Statement and any amendments thereto and the execution of
any additional instruments necessary to consummate the transactions contemplated
hereby. In case at any time after the Effective Time any further action is
20
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and directors of each party hereto shall take all such necessary action
as may be reasonably requested by the other party.
Section 6.05 CONSENTS. Each of the parties hereto shall use its reasonable
best efforts to obtain any consents of all third parties and governmental
authorities necessary to the consummation of the transactions contemplated
hereby.
Section 6.06 PUBLIC ANNOUNCEMENTS. Acquisition and the Company shall
consult with each other before issuing any press release or otherwise making any
public statements with respect to the transactions contemplated by this
Agreement including, without limitation, the Offer and the Merger, and shall not
issue any such press release or make any such public statement prior to such
consultation, except as may be required by applicable law or any listing
agreement with or rules applicable to the Nasdaq Stock Market.
Section 6.07 INDEMNIFICATION AND INSURANCE. (a) Acquisition agrees that
all rights to indemnification existing in favor of the present or former
directors, officers, employees, fiduciaries and agents of the Company or any of
its subsidiaries as provided in the Company's Restated Certificate of
Incorporation or By-Laws or pursuant to other agreements, or the certificate of
incorporation, by-laws or similar documents of any of the Company's subsidiaries
as in effect as of the date hereof with respect to matters occurring prior to
the Effective Time shall survive the Merger and shall continue in full force and
effect for a period of not less than six years after the date hereof.
Acquisition shall cause to be maintained in effect for not less than six years
from the Effective Time the current policies of the directors' and officers'
liability insurance maintained by the Company and its subsidiaries; provided
that Acquisition may substitute therefor policies of at least the same coverage
containing terms and conditions which are no less advantageous with respect to
matters occurring prior to the Effective Time to the extent available.
(b) In the event that any action, suit, proceeding or investigation relating
hereto or to the transactions contemplated hereby is commenced, whether before
or after the Effective Time, the parties hereto agree to cooperate in good faith
and use their reasonable best efforts to defend vigorously against and respond
thereto.
(c) This Section 6.07, which shall survive any termination of this Agreement
pursuant to Section 8.01 and the consummation of the Merger at the Effective
Time and shall continue without limit, is intended to benefit the Company, the
Surviving Corporation, and any person or entity indemnified hereunder (whether
or not parties to this Agreement).
(d) In the event the Surviving Corporation or any of its 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 all or substantially all of its properties and assets
to any person, then, and in each such case, proper provision shall be made so
that the successors and assigns of the Surviving Corporation assume the
obligations set forth in this Section 6.07.
Section 6.08 NOTIFICATION OF CERTAIN MATTERS. The Company shall give
prompt notice to Acquisition, and Acquisition shall give prompt notice to the
Company, of (i) the occurrence, or nonoccurrence, of any event the occurrence,
or nonoccurrence, of which would be likely to cause any representation or
warranty contained herein to be untrue or inaccurate in any material respect at
or prior to the Effective Time and (ii) any material failure of the Company or
Acquisition, as the case may be, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
PROVIDED, HOWEVER, that the delivery of any notice pursuant to this
Section 6.08 shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
Section 6.09 MATTERS RELATING TO THE COMMITMENT LETTERS. (a) Acquisition
shall be primarily responsible for any negotiations with respect to any
definitive agreements regarding the Financing (the "Definitive Financing
Agreements"); PROVIDED, HOWEVER, that (i) the Company shall have received prior
notice of, and shall be kept reasonably informed of the ongoing status of, any
such negotiations, (ii) the Company shall take all such actions as are
reasonably requested by Acquisition in connection with any such negotiations,
21
and (iii) Acquisition shall conduct any such negotiations reasonably and in good
faith. Acquisition shall use its commercially reasonable efforts to close the
Financing on terms consistent with those set forth in the Commitment Letters and
to execute and deliver the Definitive Financing Agreements on or before the
expiration of the Offer. Acquisition shall use its commercially reasonable
efforts to satisfy on or before the expiration of the Offer all requirements of
the Definitive Financing Agreements which are conditions to closing the
transactions constituting the Financing and to drawing the cash proceeds
thereunder.
(b) Following receipt by either the Company or any of its affiliates, on the
one hand, or Acquisition or any of its affiliates, on the other hand, of any
written or oral communications to the effect that any financing source under any
of the Commitment Letters is contemplating not providing the Financing or is
terminating or canceling or modifying in any material respect any of the
Commitment Letters, or that the Financing is unlikely to be obtained, the
Company or Acquisition, as the case may be, shall immediately communicate such
event to the other party and provide such other party with a true and complete
copy of any of such written communication.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 7.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligations of each party hereto to effect the Merger is
subject to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) this Agreement shall have been approved and adopted by the requisite
vote of the Company's stockholders, if required by the Company's
organizational documents and the DGCL;
(b) no statute, rule, regulation, executive order, decree, or injunction
shall have been enacted, entered, promulgated or enforced by any court or
governmental authority which prohibits or restricts the consummation of the
Merger; PROVIDED, HOWEVER, that the parties hereto shall use their
reasonable best efforts to have any such order, decree or injunction
vacated;
(c) any waiting period applicable to the Offer or the Merger under the
HSR Act shall have terminated or expired; and
(d) the Company and Acquisition shall have accepted for payment and paid
for all shares validly tendered pursuant to the Offer and not withdrawn;
PROVIDED, HOWEVER, that neither the Company nor Acquisition shall be
entitled to invoke this condition, if it shall have been the cause of the
failure to purchase shares so tendered and not withdrawn in violation of the
of the terms hereof or the Offer.
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
Section 8.01 TERMINATION. This Agreement may be terminated and the Merger
contemplated herein may be abandoned at any time prior to the Effective Time,
whether before or after the approval thereof by the Company's stockholders:
(a) By mutual written consent of the Company (acting through the Special
Committee) and Acquisition.
(b) By either the Company (acting through the Special Committee), on the
one hand, or Acquisition, on the other hand:
(i) if Shares shall not have been purchased pursuant to the Offer on
or prior to April 30, 2000; PROVIDED, HOWEVER, that the right to
terminate this Agreement under this Section 8.01(b)(i) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure to purchase
Shares pursuant to the Offer on or prior to such date; or
22
(ii) if any Governmental Authority shall have issued an order, decree
or ruling or taken any other action, in each case permanently
restraining, enjoining or otherwise prohibiting the transactions
contemplated hereby and such order, decree or ruling shall have become
final and nonappealable.
(c) By the Company (acting through the Special Committee) prior to the
purchase of Shares pursuant to the Offer, as provided in Section 6.02
hereof; PROVIDED that in order for the termination of this Agreement
pursuant to this Section 8.01(c) to be deemed effective, the Company shall
have complied with all provisions of Section 6.02 hereof, including the
notice provisions therein, and with the applicable requirements of
Section 8.03 hereof.
(d) By the Company (acting through the Special Committee):
(i) in the event that the Offer expires or is terminated in
accordance with its terms without any Shares being purchased thereunder,
provided that the failure of the Company to fulfill any obligation under
this Agreement has not been the cause of, or resulted in, the failure to
purchase Shares pursuant to the Offer; or
(ii) if there shall have been a breach or failure to perform on the
part of Acquisition of any of its representations, warranties, covenants
or agreements contained herein, except where such breach or failure to
perform does not impair the ability of Acquisition to consummate the
Offer or the Merger in any material respect or where such breach or
failure to perform has been cured prior to March 1, 2000 (or such later
date upon which the Offer shall expire).
(e) By Acquisition:
(i) if the Special Committee (A) shall withdraw, modify or change its
recommendation so that it is not in favor of this Agreement, the Offer or
the Merger or shall have resolved to do any of the foregoing, (B) shall
have recommended or resolved to recommend to the Company's stockholders
an Acquisition Proposal, or (C) shall have terminated this Agreement as
provided in Section 6.02 hereof;
(ii) if the Company shall have breached any of its obligations under
Section 6.02 hereof;
(iii) in the event that the Offer expires or is terminated in
accordance with its terms without any Shares being purchased thereunder,
provided that the failure of Acquisition to fulfill any obligation
hereunder has not been the cause of, or resulted in the failure to
purchase Shares pursuant to the Offer; or
(iv) if there shall have been a breach or failure to perform on the
part of the Company of any of its representations, warranties, covenants
or agreements contained herein, except where such breach or failure to
perform does not have a Material Adverse Effect or where such breach or
failure to perform has been cured prior to March 1, 2000 (or such later
date upon which the Offer shall expire).
Section 8.02 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 8.01, this Agreement shall
forthwith become void and have no effect, without any liability on the part of
any party hereto or its directors, officers or stockholders, other than the
provisions of this Section 8.02 and Sections 6.03(b), 6.07 and 8.03 and
Article IX. Nothing contained in this Section 8.02 shall relieve any party from
liability for any willful breach of this Agreement.
Section 8.03 FEES AND EXPENSES. (a) Except as otherwise provided in this
Section, all costs and expenses incurred in connection with the Agreement, shall
be paid by the party incurring such cost or expense; PROVIDED, HOWEVER, that all
costs and expenses related to the filing, printing and mailing of the Offer
Documents, the Schedule 14D-9 and the Proxy Statement shall be borne by the
Company.
23
(b) Upon a termination of this Agreement by the Company pursuant to
Section 8.01(c) or by Acquisition pursuant to Section 8.01(e)(i),
8.01(e)(ii) or 8.01(e)(iv), the Company shall pay to Acquisition (by wire
transfer of immediately available funds), within two business days following
such termination, documented out-of-pocket fees and expenses up to $11,000,000
actually incurred in connection with this Agreement and the transactions
contemplated hereby (including, without limitation, the fees and expenses in
connection with the Commitment Letters and the Financing), it being understood
that such payments shall be in lieu of any and all payments which the Company
may be required to make under the Commitment Letters. In addition, the Company
shall pay to Acquisition (by wire transfer of immediately available funds) the
fees and expenses set forth in the immediately preceding sentence if this
Agreement is terminated (i) by the Company pursuant to Section 8.01(b)(i) or
8.01(d)(i) if the Offer expires or is terminated without any Shares being
purchased thereunder solely as a result of the Minimum Condition failing to be
satisfied by the expiration date of the Offer as it may have been extended or
(ii) by Acquisition pursuant to Section 8.01(b)(i) or 8.01(e)(iii) if the Offer
expires or is terminated without any Shares being purchased thereunder solely as
a result of the Minimum Condition failing to be satisfied by the expiration date
of the Offer as it may have been extended, and within 180 days after such a
termination, the Company enters into a definitive agreement with respect to, and
thereafter consummates, an Acquisition Proposal.
(c) Upon a termination of this Agreement by the Company pursuant to
Section 8.01(b)(i) or 8.01(d)(i) or by Acquisition pursuant to
Section 8.01(b)(i) (in each case other than as a result of a failure to satisfy
the condition set forth in paragraph (b) of Annex A (which shall be governed by
Section 8.03(d)) and other than under the circumstances set forth in Sections
8.03(b) and 8.03(d)), the Company shall pay to Acquisition (by wire transfer of
immediately available funds), within two business days following such
termination, documented out-of-pocket fees and expenses up to $8,000,000
actually incurred in connection with this Agreement and the transactions
contemplated hereby (including, without limitation, the fees and expenses in
connection with the Commitment Letters and the Financing), it being understood
that such payments shall be in lieu of any and all payments which the Company
may be required to make under the Commitment Letters.
(d) Upon a termination of this Agreement by the Company pursuant to
Section 8.01(b)(ii), by Acquisition pursuant to Section 8.01(b)(ii) or by
Acquisition as a result of a failure of the condition set forth in
paragraph (b) or (e) of Annex A to have been satisfied, the Company shall pay to
Acquisition (by wire transfer of immediately available funds), within two
business days following such termination, documented out-of-pocket fees and
expenses up to $4,000,000 actually incurred in connection with this Agreement
and the transactions contemplated hereby (including, without limitation, the
fees and expenses in connection with the Commitment Letters and the Financing,
but excluding commitment fees and financial advisory fees under the Commitment
Letters), it being understood that such payments shall be in lieu of any and all
payments which the Company may be required to make under the Commitment Letters.
(e) Notwithstanding anything else in this Section 8.03 to the contrary, the
Company shall not be required to make any payment pursuant to this Section 8.03
if (i) immediately prior to the termination of this Agreement, Acquisition was
in material breach of its obligations under this Agreement or (ii) the
termination is the result of a breach of the terms of the Financing by the
financing sources thereunder. Acquisition hereby covenants and agrees that no
amounts payable purusant to this Section 8.03 shall be paid to any person that
is a director or officer of the Company or Acquisition as of the date hereof.
Section 8.04 AMENDMENT. Subject to Section 1.03(c), this Agreement and the
Plan of Merger may be amended by action taken by the Company and Acquisition at
any time before or after adoption of the Merger by the Company's stockholders
but, after any such approval, no amendment shall be made which decreases the Per
Share Amount or which adversely affects the rights of the Company's stockholders
hereunder without the approval of such stockholders. This Agreement may not be
amended except by an instrument in writing signed on behalf of the parties.
24
Section 8.05 EXTENSION; WAIVER. Subject to Section 1.03(c), at any time
prior to the Effective Time, either the Company (acting through the Special
Committee), on the one hand, or Acquisition, on the other hand, may (i) extend
the time for the performance of any of the obligations or other acts of the
other parties, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document, certificate or writing delivered pursuant
hereto or (iii) waive compliance with any of the agreements or conditions
contained herein. Any agreement on the part of any party to any such extension
or waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party.
ARTICLE IX
MISCELLANEOUS
Section 9.01 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties made herein shall not survive beyond the
Effective Time or a termination of this Agreement.
Section 9.02 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement (a) constitutes
the entire agreement among the parties hereto with respect to the subject matter
hereof and supersedes all other prior agreements and understandings, both
written and oral, between the parties or any of them with respect to the subject
matter hereof and (b) shall not be assigned by operation of law or otherwise,
PROVIDED that Acquisition may assign its rights and obligations to purchase
Shares pursuant to the Offer to any subsidiary of Acquisition, but no such
assignment shall relieve Acquisition of its obligations hereunder if such
assignee does not perform such obligations.
Section 9.03 VALIDITY. If any provision of this Agreement, or the
application thereof to any person or circumstance, is held invalid or
unenforceable, the remainder of this Agreement, and the application of such
provision to other persons or circumstances, shall not be affected thereby, and
to such end, the provisions of this Agreement are agreed to be severable.
Section 9.04 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by cable,
telegram or telex, or by registered or certified mail (postage prepaid, return
receipt requested), to the respective parties as follows:
if to Acquisition:
Transportation Acquisition I Corp.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Coco, Esq.
if to the Company:
Transportation Technologies Industries, Inc.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Special Committee
with a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx, Esq.
25
or to such other address as the person to whom notice is given may have
previously, furnished to the others in writing in the manner set forth above.
Section 9.05 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware regardless of the
laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
Section 9.06 DESCRIPTIVE HEADINGS. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
Section 9.07 PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and its successors and
permitted assigns, and, except as provided in Sections 6.07(d) and 9.02(b),
nothing in this Agreement, express or implied, is intended to or shall confer
upon any other person any rights, benefits or remedies of any nature whatsoever
under or by reason of this Agreement.
Section 9.08 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
Section 9.09 SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event any of the provisions of this
Agreement were not performed in accordance with the terms hereof and that the
parties shall be entitled to specific performance of the terms hereof, in
addition to any other remedy at law or equity.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
day and year first above written.
TRANSPORTATION TECHNOLOGIES
INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President and Chief
Operating Officer
TRANSPORTATION ACQUISITION I CORP.
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
26
ANNEX A
CONDITIONS TO THE PURCHASER OFFER
Notwithstanding any other provision of the Purchaser Offer, but subject to
the provisions of the Agreement to which this Annex A is attached (terms used
herein and not otherwise defined having the meanings ascribed to such terms in
such Agreement), Acquisition shall not be required to accept for payment, or,
subject to any applicable rules and regulations of the SEC, including
Rule 14e-1(c) promulgated under the Exchange Act, pay for, and, subject to any
applicable rules and regulations of the SEC, may delay the acceptance for
payment of, or the payment of, any tendered Shares, if (i) any applicable
waiting period under the HSR Act has not expired or been terminated,
(ii) Acquisition and the Company shall not have obtained the proceeds of
financing on terms satisfactory to Acquisition to enable the purchase of Shares
pursuant to the Offer, to pay the Per Share Amount in the Merger and to pay fees
and expenses of the Offer and the Merger, (iii) there are validly tendered and
not withdrawn prior to the expiration of the Offer a fewer number of Shares than
that number of Shares which, when added to the Shares beneficially owned by
Acquisition on the date Shares are accepted for payment, represents at least a
majority of the Shares outstanding on a fully-diluted basis (after giving effect
to the conversion or exercise of all outstanding options, warrants and other
rights and securities exercisable or convertible into Shares, whether or not
exercised or converted at the time of determination) on the date Shares are
accepted for payment (the "Minimum Condition"), (iv) the Debt Tender shall not
have been consummated or (v) at any time on or after the date of the Agreement,
and at or before the time of acceptance for payment of Shares, any of the
following events shall occur:
(a) any Material Adverse Effect shall have occurred; or
(b) there shall have occurred and be continuing (1) any general
suspension of trading in, or limitation on prices for, securities on the New
York Stock Exchange, the American Stock Exchange or the Nasdaq Stock Market
which lasts for three consecutive trading days, (2) a declaration of a
banking moratorium or any general suspension of payments in respect of banks
in the United States that regularly participate in the U.S. market in loans
to large corporations (whether or not mandatory), (3) a commencement of a
war, armed hostilities or other national or international crisis directly or
indirectly involving the United States that has a material adverse effect on
financial markets in the United States, (4) any material limitation (whether
or not mandatory) by any governmental authority on, the extension of credit
by banks or other lending institutions in the United States that regularly
participate in the U.S. market in loans to large corporations, (5) from the
date of the Agreement through the date of termination or expiration of the
Offer a decline of at least 25 percent in either the Dow Xxxxx Average of
Industrial Stocks or the Standard & Poor's 500 index or (6) in the case of
situations described in clause (3) or (4) existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof; or
(c) any person, entity or group, other than Acquisition or the Company,
any of its affiliates, or any group of which any of them is a member, shall
have (i) acquired beneficial ownership of 20 percent or more of the Shares,
whether through acquisition of stock, the formation of an entity or group,
the grant of an option or a right, or otherwise (other than for bona fide
arbitrage purposes), or (ii) entered into a definitive agreement or an
agreement in principle with the Company with respect to a tender offer or
exchange offer for any Shares or a merger, consolidation or other business
combination with or involving the Company;
(d) the representations and warranties of the Company set forth in the
Agreement which are not qualified by "materiality" or "Material Adverse
Effect" shall not be true and accurate in all material respects, and the
representations and warranties that are qualified by "materiality" or
"Material Adverse Effect" shall not be true and accurate in all respects, in
each case as of the date of consummation of the Offer as though made on or
as of such date (except for those representations and warranties that
address matters only as of a particular date or only with respect to a
specific
27
period of time which need only be true and accurate as of such date or with
respect to such period), or the Company shall have breached or failed to
perform or comply in any material respect with any obligation, agreement or
covenant required by the Agreement to be performed or complied with by it;
PROVIDED, HOWEVER, that such breach or failure to perform is incapable of
being cured or has not been cured prior to March 1, 2000 (or such later date
upon which the Offer shall expire).
(e) there shall have been any action or position taken, or any statute,
rule, regulation, judgment, order or injunction promulgated, enacted,
entered or enforced by any Governmental Authority, which could reasonably be
expected to (1) make the acceptance for payment of, or the payment for, some
or all of the Shares illegal or otherwise prohibited, or materially restrict
or delay consummation of the Offer, (2) impose limitations on the ability of
Acquisition to acquire or hold or to exercise effectively all rights of
ownership of the Shares, including, without limitation, the right to vote
any Shares purchased by it on all matters properly presented to the
stockholders of the Company, or (3) prohibit or impose any material
limitation on Acquisition's ownership or operation of all or a material
portion of the assets or business of the Company or any of its respective
subsidiaries or affiliates; or
(f) the Company or Acquisition shall have failed to receive any or all
governmental or third party consents and approvals to consummate the Offer
which, if not received, would have a Material Adverse Effect;
(g) the Board of Directors of the Company shall have publicly (including
by amendment of its Schedule 14D-9) withdrawn or modified in any material
respect its recommendation of the Offer or shall have resolved to do so; or
(h) the Agreement shall have been terminated in accordance with its
terms;
which, in the reasonable judgment of Acquisition, in such case and regardless of
the circumstances (including any action or inaction by Acquisition) giving rise
to any such condition makes it inadvisable to proceed with such acceptance for
payment or payments.
The foregoing conditions are for the sole benefit of Acquisition and may be
asserted by Acquisition regardless of the circumstance giving rise to such
condition and may be waived by Acquisition, in whole or in part at any time and
from time to time, in its sole discretion. The failure by Acquisition at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
such right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
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ANNEX B
CONDITIONS TO THE COMPANY OFFER
Notwithstanding any other provision of the Company Offer, but subject to the
provisions of the Agreement to which this Annex B is attached (terms used herein
and not otherwise defined having the meanings ascribed to such terms in such
Agreement), the Company shall not be required to accept for payment, or, subject
to any applicable rules and regulations of the SEC, including Rule 14e-1(c)
promulgated under the Exchange Act, pay for, and, subject to any applicable
rules and regulations of the SEC, may delay the acceptance for payment of, or
the payment of, any tendered Shares, if (i) any applicable waiting period under
the HSR Act has not expired or been terminated, (ii) Acquisition and the Company
shall not have obtained the proceeds of financing on terms satisfactory to
enable the purchase of Shares pursuant to the Offer and pay fees and expenses of
the Offer and the Merger, (iii) there are validly tendered and not withdrawn
prior to the expiration of the Offer a fewer number of Shares than such number
that satisfies the Minimum Condition, (iv) the Debt Tender shall not have been
consummated or (v) at any time on or afer the date of the Agreement, and at or
before the time of acceptance for payment of Shares, any of the following events
shall occur:
(a) the representations and warranties of Acquisition set forth in the
Agreement which are not qualified by "materiality" or "material" shall not
be true and accurate in all material respects, and the representations and
warranties that are qualified by "materiality" or "material" shall not be
true and accurate in all respects, in each case as of the date of
consummation of the Offer as though made on or as of such date (except for
those representations and warranties that address matters only as of a
particular date or only with respect to a specific period of time which need
only be true and accurate as of such date or with respect to such period),
or Acquisition shall have breached or failed to perform or comply in any
material respect with any obligation, agreement or covenant required by the
Agreement to be performed or complied with by it, PROVIDED, HOWEVER, that
such breach or failure to perform is incapable of being cured or has not
been cured prior to March 1, 2000 (or such later date upon which the Offer
shall expire);
(b) there shall have been any action or position taken, or any statute,
rule, regulation, judgment, order or injunction promulgated, enacted,
entered, enforced or any other action or position shall have been taken,
proposed or threatened by any Governmental Authority which could reasonably
be expected to make the acceptance for payment of, or the payment for, some
or all of the Shares illegal or otherwise prohibited, or materially restrict
or delay consummation of the Offer;
(c) the Company or Acquisition shall have failed to receive any or all
governmental or third party consents and approvals to consummate the Offer
which, if not received, would have a Material Adverse Effect;
(d) the Agreement shall have terminated in accordance with its terms; or
(e) the Purchaser Offer shall not have been consummated at the same time
as the Company Offer;
which, in the reasonable judgment of the Company, in such case and regardless of
the circumstances (including any action or inaction by he Company) giving rise
to such condition makes it inadvisable to proceed with such acceptance for
payment or payments.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstance giving rise to such
condition and may be waived by the Company, in whole or in part at any time and
from time to time, in its sole discretion. The failure by the Company at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
such right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
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ANNEX C
DEBT TENDER OFFER TERMS AND CONDITIONS
Securities Subject to Offers 11.75% Senior Subordinated Notes due 2005
11.75% Series C Senior Subordinated Notes due 2005
Total Consideration for the Offer and The total consideration (the "Total Consideration") for each
the Solicitation $1,000 principal amount of the Notes tendered pursuant to
the Offer will equal the present value on the payment date
of $1,058.75 (the amount payable on August 15, 2000, the
first date on which the Notes are redeemable (the "Earliest
Redemption Date")) and all remaining interest payments
payable up to and including the Earliest Redemption Date on
the second business day before the scheduled expiration
date, plus 50 basis points. The Total Consideration is
comprised of the Tender Offer Consideration and the Consent
Payment.
Tender Offer Consideration: Total Consideration minus the Consent Payment.
Consent Payment: A Consent Payment in cash equal to $25.00 per $1,000
principal amount of Notes for which consents have been
validly delivered.
Conditions to the Offers The Offers shall be conditioned upon:
(i) the execution by the trustee of supplemental indentures
implementing the proposed amendments to the indentures
following receipt of the requisite consents to the proposed
amendments from not less than a majority in aggregate
principal amount of the outstanding Notes of each series,
(ii) there having been validly tendered (and not withdrawn)
prior to the expiration date not less than a majority in
aggregate principal amount of the notes of each series
outstanding,
(iii) the consummation of the Offer (as defined in the
Merger Agreement),
(iv) receipt by the Company of the proceeds of financing in
an amount sufficient to pay for the debt tender offers and
the consent payment on terms acceptable to the Company, and
(v) there shall not have been any action or position taken,
or any statute, rule, regulation, judgment, order or
injunction promulgated, enacted, entered, enforced or any
other action or position taken by any Governmental Authority
which could reasonably be expected (in the sole judgment of
Acquisition) to make the acceptance for payment of, or the
payment for, some or all of the Notes or the consummation of
the consent solicitations, illegal or otherwise prohibited,
or materially restrict or delay consummation of the debt
tender offers and consent solicitations.
(vi) there shall not have occurred or be likely to occur any
event affecting the business or financial affairs of the
Company that, in the sole judgment of Acquisition, would or
might prohibit, prevent, restrict or delay consummation of
the debt tender offers or the consent solicitations in any
material respect;
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(vii) the trustee under either of the Indentures shall not
have objected in any respect to or taken action that could
reasonably be expected, in the sole judgment of Acquisition,
to adversely affect in any material respect the consummation
of the debt tender offers or consent solicitations or the
Company's ability to effect any of the proposed amendments
to the Indentures or shall have taken any action that
challenges the validity or effectiveness of the procedures
used by the Company in soliciting the Consents (including
the form thereof) or in the making of the debt tender offers
or consent solicitations or the acceptance of, or payment
for, the Notes or the consents; or
(viii) there shall not have occurred and be continuing (1)
any general suspension of trading in, or limitation on
prices for, securities on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq Stock Market which
lasts for three consecutive trading days, (2) a declaration
of a banking moratorium or any general suspension of
payments in respect of banks in the United States that
regularly participate in the U.S. market in loans to large
corporations (whether or not mandatory), (3) a commencement
of a war, armed hostilities or other national or
international crisis directly or indirectly involving the
United States that has a material adverse effect on
financial markets in the United States, (4) any material
limitation (whether or not mandatory) by any governmental
authority on, the extension of credit by banks or other
lending institutions in the United States that regularly
participate in the U.S. market in loans to large
corporations, (5) from the date of the Agreement through the
date of termination or expiration of the Offer a decline of
at least 25 percent in either the Dow Xxxxx Average of
Industrial Stocks or the Standard & Poor's 500 index or (6)
in the case of situations described in clause (3) or (4)
existing at the time of the commencement of the Offer, a
material acceleration or worsening thereof.
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