EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
AND RECAPITALIZATION
BY AND BETWEEN
WHEELS MERGERCO LLC
and
XTRA CORPORATION
Dated as of June 18, 1998
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TABLE OF CONTENTS
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ARTICLE 1
THE MERGER..................... 2
SECTION 1.1 The Merger...................................... 2
SECTION 1.2 Closing......................................... 2
SECTION 1.3 Effective Time.................................. 2
SECTION 1.4 Effect of the Merger............................ 3
SECTION 1.5 Name, Certificate of Incorporation, By-Laws..... 3
SECTION 1.6 Directors and Officers.......................... 3
ARTICLE 2
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS................... 4
SECTION 2.1 Effect on Capital Stock........................ 4
SECTION 2.2 Common Share Elections......................... 5
SECTION 2.3 Proration...................................... 6
SECTION 2.4 Options; Stock Plans........................... 8
SECTION 2.5 Payment for Common Shares...................... 8
SECTION 2.6 Stock Transfer Books...........................12
SECTION 2.7 No Further Ownership Rights in Company
Common Stock...................................12
SECTION 2.8 Lost, Stolen or Destroyed Certificates.........12
SECTION 2.9 Taking of Necessary Action; Further Action.....12
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY...............13
SECTION 3.1 Organization and Qualification; Subsidiaries....13
SECTION 3.2 Capitalization..................................14
SECTION 3.3 Authority Relative to this Agreement............15
SECTION 3.4 No Conflict, Required Filings and Consents......16
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SECTION 3.5 Compliance......................................... 17
SECTION 3.6 SEC Filings; Financial Statements.................. 18
SECTION 3.7 Absence of Certain Changes or Events............... 18
SECTION 3.8 No Undisclosed Liabilities......................... 19
SECTION 3.9 Absence of Litigation.............................. 19
SECTION 3.10 Filings; Form S-4; Proxy Statement................. 19
SECTION 3.11 Opinion of Financial Advisor....................... 20
SECTION 3.12 Tax Matters........................................ 20
SECTION 3.13 Takeover Statutes Not Applicable................... 21
SECTION 3.14 Properties......................................... 22
SECTION 3.15 Intellectual Property.............................. 23
SECTION 3.16 Labor Matters...................................... 24
SECTION 3.17 Year 2000 Compliance............................... 25
SECTION 3.18 Material Contracts................................. 25
SECTION 3.19 Employee Benefits; ERISA........................... 26
SECTION 3.20 Environmental Laws................................. 28
SECTION 3.21 Title to Personal Properties; Condition of Assets.. 30
SECTION 3.22 Insurance.......................................... 31
SECTION 3.23 Required Company Vote.............................. 31
SECTION 3.24 Board Recommendations.............................. 31
SECTION 3.25 Brokers............................................ 31
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF MERGERCO........................ 31
SECTION 4.1 Organization and Qualification..................... 31
SECTION 4.2 Financing.......................................... 32
SECTION 4.3 Authority Relative to this Agreement............... 32
SECTION 4.4 No Conflict, Required Filings and Consents......... 33
SECTION 4.5 Filings; Form S-4; Proxy Statement................. 34
SECTION 4.6 Brokers and Finders................................ 34
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ARTICLE 5
CONDUCT OF BUSINESS PENDING THE MERGER.......................... 34
SECTION 5.1 Conduct of Business by the Company Pending
the Merger............................................ 34
SECTION 5.2 No Solicitation, etc.................................. 37
ARTICLE 6
ADDITIONAL AGREEMENTS......................... 39
SECTION 6.1 HSR Act............................................... 39
SECTION 6.2 Stockholders' Meetings; Form S-4 and Proxy Statement.. 39
SECTION 6.3 Access to Information; Confidentiality................ 41
SECTION 6.4 Indemnification and Insurance......................... 41
SECTION 6.5 Notification of Certain Matters....................... 43
SECTION 6.6 Further Action........................................ 43
SECTION 6.7 Disposition of Litigation............................. 45
SECTION 6.8 Affiliates............................................ 45
SECTION 6.9 Stop Transfer Order................................... 45
SECTION 6.1 Public Announcements.................................. 45
SECTION 6.1 Retention Bonus Plan.................................. 45
SECTION 6.12 Company Financial Information......................... 45
SECTION 6.13 Registration Rights Agreement......................... 46
SECTION 6.14 Management Agreement.................................. 46
SECTION 6.15 Employee Plans........................................ 46
ARTICLE 7
CONDITIONS TO THE MERGER...............................47
SECTION 7.1 Conditions to Obligation of each Party to Effect
the Merger.............................................47
SECTION 7.2 Additional Conditions to Obligations of MergerCo.......48
SECTION 7.3 Additional Conditions to Obligations of the Company....50
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ARTICLE 8
TERMINATION.................................. 51
SECTION 8.1 Termination........................................... 51
SECTION 8.2 Effect of Termination................................. 52
SECTION 8.3 Fees and Expenses..................................... 52
ARTICLE 9
GENERAL PROVISIONS.............................. 54
SECTION 9.1 Nonsurvival of Representations, Warranties and
Agreements............................................ 54
SECTION 9.2 Notices............................................... 54
SECTION 9.3 Certain Definitions................................... 56
SECTION 9.4 Waiver and Amendment.................................. 57
SECTION 9.5 Headings.............................................. 58
SECTION 9.6 Severability.......................................... 58
SECTION 9.7 Entire Agreement...................................... 58
SECTION 9.8 Parties in Interest................................... 58
SECTION 9.9 Failure or Indulgence Not Waiver, Remedies Cumulative. 58
SECTION 9.10 Governing Law......................................... 59
SECTION 9.11 Counterparts.......................................... 59
SECTION 9.12 Specific Performance.................................. 59
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AGREEMENT AND PLAN OF MERGER
AND RECAPITALIZATION
AGREEMENT AND PLAN OF MERGER AND RECAPITALIZATION, dated as of June 18,
1998 (this "Agreement"), by and between WHEELS MERGERCO LLC, a Delaware limited
liability company ("MergerCo"), and XTRA CORPORATION, a Delaware corporation
(the "Company").
WHEREAS, the Managers of MergerCo and the Board of Directors of the Company
have approved the merger of MergerCo with and into the Company as set forth
below (the "Merger"), in accordance with the Delaware Limited Liability Company
Act (the "DLLCA") and the General Corporation Law of the State of Delaware (the
"DGCL") and upon the terms and subject to the conditions set forth in this
Agreement, pursuant to which the holders of shares of common stock, par value
$.50 per share (the "Common Shares" or the "Shares") of the Company which are
issued and outstanding immediately prior to the Effective Time (as defined in
Section 1.3) will be entitled, subject to the terms hereof and other than as set
forth herein, the right either (i) to retain a portion of their Common Shares or
(ii) to receive cash in accordance with this Agreement;
WHEREAS, the Merger and this Agreement require the vote of a majority of
the issued and outstanding shares of the Common Shares for the approval thereof
(the "Company Stockholder Approval");
WHEREAS, the Board of Directors of the Company has, subject to the terms
and conditions set forth herein, (i) unanimously determined that (A) the
consideration to be paid for each Share in the Merger is fair to the
stockholders of the Company, and (B) the Merger is otherwise in the best
interests of the Company and its stockholders, and (ii) resolved to approve and
adopt this Agreement and the transactions contemplated hereby and to recommend
approval and adoption of this Agreement by the stockholders of the Company;
WHEREAS, as a condition to MergerCo's willingness to enter into this
Agreement and consummate the transactions contemplated hereby, MergerCo has
required that the certain stockholders (as specified in the Voting Agreements
(as defined below) (the "Stockholders")) agree, among other things, to vote all
Common Shares beneficially owned by the Stockholders in accordance with each of
the Voting Agreements, each dated as of even date herewith (the "Voting
Agreements"), and comply with the other provisions of the Voting Agreements;
WHEREAS, certain terms used herein are defined in Section 9.3;
WHEREAS, MergerCo and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the Merger, and also to
prescribe various conditions to the Merger; and
WHEREAS, it is intended that the Merger be recorded as a recapitalization
for financial reporting purposes.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
MergerCo and the Company hereby agree as follows:
ARTICLE 1
THE MERGER
SECTION 1.1 The Merger. At the Effective Time (as defined in Section 1.3),
and subject to and upon the terms and conditions of this Agreement and the
provisions of the DLLCA and the DGCL, MergerCo shall be merged with and into the
Company, the separate corporate existence of MergerCo shall cease, and the
Company shall continue its corporate existence under the laws of the State of
Delaware as the surviving corporation. The Company as the surviving corporation
after the Merger is hereinafter sometimes referred to as the "Surviving
Corporation."
SECTION 1.2 Closing. Unless this Agreement shall have been terminated and
the transactions herein contemplated shall have been abandoned pursuant to
Section 8.1, the consummation of the Merger will take place on the third
business day after satisfaction or waiver of the conditions set forth in Article
7, at 10:00 a.m., at the offices of Ropes & Xxxx, Xxx Xxxxxxxxxxxxx Xxxxx,
Xxxxxx, Xxxxxxxxxxxxx, unless another date, time or place is agreed to by the
parties hereto.
SECTION 1.3 Effective Time. As promptly as practicable after the
satisfaction or waiver of the conditions set forth in Article 7, the parties
hereto shall cause the Merger to be consummated by filing a certificate of
merger as contemplated by the DLLCA and the DGCL (the "Certificate of Merger"),
together with any required related certificates, with the Secretary of State of
the State of Delaware, in such form as required by, and executed in accordance
with the relevant provisions of, the
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DLLCA and the DGCL (the time of such filing or such later time as is specified
in the Certificate of Merger being the "Effective Time").
SECTION 1.4 Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in this Agreement, the Certificate of Merger and the
applicable provisions of the DLLCA and 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 MergerCo shall vest
in the Surviving Corporation, and all debts, liabilities and duties of the
Company and MergerCo shall become the debts, liabilities and duties of the
Surviving Corporation.
SECTION 1.5 Name, Certificate of Incorporation, By-Laws.
(1) Name. The name of the Surviving Corporation shall be XTRA Corporation.
(2) Certificate of Incorporation. At the Effective Time and without any
further action on the part of the Company or MergerCo or their respective
stockholders, the Restated Certificate of Incorporation, as amended, of the
Company (the "Certificate of Incorporation"), as in effect immediately prior to
the Effective Time, shall be amended and restated so as to read in its entirety
in the form set forth as Exhibit A hereto and, as so amended, until thereafter
further amended as provided therein and under the DGCL, shall be the certificate
of incorporation of the Company following the Merger.
(3) By-Laws. At the Effective Time and without any further action on the
part of the Company or MergerCo or their respective stockholders, the By-laws of
the Company as in effect immediately prior to the Effective Time shall be the
By-laws of the Surviving Corporation and thereafter may be amended or repealed
in accordance with their terms and the Certificate of Incorporation of the
Company following the Merger and as provided under the DGCL.
SECTION 1.6 Directors and Officers. The Managers of MergerCo immediately
prior to the Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-Laws of the Surviving Corporation, and the officers of
MergerCo immediately prior to the Effective Time shall be the initial officers
of the Surviving Corporation, in each case until their respective successors are
duly elected or appointed and qualified.
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ARTICLE 2
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS
SECTION 2.1 Effect on Capital Stock. At the Effective Time, by virtue of
the Merger and without any action on the part of the MergerCo, the Company or
the holders of any of the following securities:
(1) Interests in MergerCo. All of the interests in MergerCo issued and
outstanding immediately prior to the Effective Time shall be converted into a
number of Common Shares following the Merger equal to 4,500,000 Common Shares
(or such lesser number as may be determined by MergerCo prior to the mailing of
the Proxy Statement (as hereinafter defined), with each member receiving a
number of Common Shares which equals the percentage of all such shares
corresponding to its percentage of all interests of MergerCo issued and
outstanding immediately prior to the Effective Time.
(2) Cancellation. Each Share held in the treasury of the Company and each
Share owned by any direct or indirect wholly owned Subsidiary of the Company
immediately prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder thereof, cease to be outstanding,
be canceled and retired without payment of any consideration therefor and cease
to exist.
(3) Retention of and Payment for Common Shares. Except as otherwise
provided herein and subject to Sections 2.2 and 2.3, each Common Share issued
and outstanding immediately prior to the Effective Time shall, by virtue of the
Merger, be treated as follows:
(i) for each Common Share with respect to which an election to
retain such Common Shares has been effectively made and not revoked in
accordance with Section 2.2 (the "Potential Election Shares") and which is
to be retained in accordance with Section 2.3(2)(ii) or Section 2.3(3), the
right to retain such fully paid and nonassessable Common Share (an
"Election Share");
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(ii) for each Common Share which was not a Potential Election Share,
but which is to be retained in accordance with Section 2.3(3)(ii), the
right to retain such fully paid and non-assessable Common Share (a "Non-
Election Share" and, together with the Election Shares, the "Retained
Shares"); and
(iii) for each Common Share (other than Dissenting Shares (as defined
in Section 2.5(10) and Retained Shares) the right to receive in cash from
the Company following the Merger an amount equal to $65 (the "Cash Price"
and, with the Retained Shares, the "Merger Consideration") and each such
Common Share shall no longer be outstanding, shall automatically be
canceled and retired and shall cease to exist, and each holder of a
Certificate representing any such Common Shares shall, to the extent such
Certificate represents such Shares, cease to have any rights with respect
thereto, except the right to receive the Cash Price applicable thereto,
upon surrender of such Certificate in accordance with Section 2.5.
SECTION 2.2 Common Share Elections. Each person who, on or prior to the
Election Date (as defined in Section 2.2(b) below), is a record holder of Common
Shares will be entitled to make an unconditional election on or prior to such
Election Date to express a desire to retain such shares, on the basis
hereinafter set forth and subject to Section 2.3 hereof.
(1) Subject to any required clearance by the Securities and Exchange
Commission (the "SEC"), the Company shall prepare and mail a form of election
(the "Form of Election"), which form shall be subject to the reasonable approval
of MergerCo, with the Proxy Statement to the record holders of Common Shares as
of the record date for the Special Meeting (as hereinafter defined), which Form
of Election shall be used by each record holder of Common Shares who elects to
express a desire to retain Common Shares held by such holder. The Company will
use its best efforts to make the Form of Elections available to all persons who
become holders of Common Shares during the period between such record date and
the Election Date, with a copy of the Proxy Statement. Any such holder's
election shall have been properly made only if the Exchange Agent shall have
received at its designated office, by 5:00 p.m., New York City time on the
second business day prior to the date of the Special Meeting (the "Election
Date"), a Form of Election properly completed and signed and accompanied by
Certificates for the Common Shares to which such Form of Election relates, duly
endorsed in blank or otherwise in a form acceptable for transfer on the books of
the Company (or by an appropriate
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guarantee of delivery of such certificates asset forth in such Form of Election
from a firm which is a member of a registered national securities exchange or of
the National Association of Securities Dealers, Inc. or a commercial bank or
trust company having an office or correspondent in the United States, provided
such certificates are in fact delivered to the Exchange Agent within three NYSE
trading days after the date of execution of such guarantee of delivery).
(2) Any Form of Election may be revoked by the holder submitting it to the
Exchange Agent only by written notice received by the Exchange Agent (i) prior
to 5:00 p.m., New York City time on the Election Date or (ii) after the Election
Date, if (and to the extent that) the Exchange Agent is legally required to
permit revocations and the Effective Time shall not have occurred prior to such
date. In addition, all Forms of Election shall automatically be revoked if the
Exchange Agent is notified in writing by MergerCo and the Company that the
Merger has been abandoned. If a Form of Election is revoked, the Certificate or
Certificates (or guaranties of delivery, as appropriate) for the Common Shares
to which such Form of Election relates shall be promptly returned to the
stockholder submitting the same to the Exchange Agent.
(3) The determination of the Exchange Agent shall be binding with respect
to whether or not elections have been properly made or revoked pursuant to this
Section 2.2 and when elections and revocations were received by it. If the
Exchange Agent determines that any election to retain Common Shares was not
properly made, such shares shall be treated by the Exchange Agent as shares for
which no election was received, and such shares shall be retained or converted
in accordance with Section 2.1 and 2.3. The Exchange Agent shall also make all
computations as to the allocation and the proration contemplated by Section 2.3,
and any such computation shall be conclusive and binding on the holders of
Common Shares. The Exchange Agent may, with the mutual agreement of MergerCo
and the Company, make such rules as are consistent with this Section 2.2 for the
implementation of the elections provided for herein as shall be necessary or
desirable fully to effect such elections.
SECTION 2.3 Proration.
(1) Notwithstanding anything in this Agreement to the contrary, the
"Retained Share Number" shall equal 500,000 Common Shares (or such lesser number
as is determined by MergerCo prior to the mailing of the Proxy Statement).
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(2) If the number of Potential Election Shares is greater than the Retained
Share Number, then each Potential Election Share shall be retained as an
Election Share in accordance with the terms of Section 2.1(3)(i) or receive cash
in accordance with the terms of Section 2.1(3)(iii) in the following manner:
(i) A proration factor (the "Non-Cash Proration Factor") shall be
determined by dividing the Retained Share Number by the total number of
Potential Election Shares.
(ii) The number of Potential Election Shares covered by each
election to be retained as Election Shares shall be determined by
multiplying the Non-Cash Proration Factor by the total number of Potential
Election Shares covered by such election, rounded to the nearest whole
number.
(iii) All Potential Election Shares, other than those shares which
are retained in accordance with Section 2.3(2)(ii), shall be converted into
cash in accordance with the terms of Section 2.1(3)(iii).
(3) If the number of Potential Election Shares is less than or equal to the
Retained Share Number, then each Potential Election Share shall be retained as
an Election Share in accordance with the terms of Section 2.1(3)(i) and each
Common Share other than a Potential Election Share or a Dissenting Share (a
"Potential Cash Share") shall be retained as a Non-Election Share in accordance
with Section 2.1(3)(ii) or converted into cash in accordance with the terms of
Section 2.1(3)(iii) in the following manner:
(i) A proration factor (the "Cash Proration Factor") shall be
determined by dividing (x) the difference between the Retained Share Number
and the number of Potential Election Shares, by (y) the number of Potential
Cash Shares.
(ii) The number of Potential Cash Shares held by each stockholder to
be retained as Non-Election Shares in accordance with Section 2.1(3)(ii)
shall be determined by multiplying the Cash Proration Factor by the total
number of Potential Cash Shares held by such stockholder, rounded down to
the nearest whole number.
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(iii) All Potential Cash Shares, other than those shares retained as
Non-Election Shares, shall be converted to cash in accordance with Section
2.1(3)(iii).
SECTION 2.4 Options; Stock Plans. (1) Except as may be agreed to by the
Company, with the consent of MergerCo, and employees identified by MergerCo
prior to the Effective Time, options to acquire Shares ("Stock Options") which
are outstanding as of the date of this Agreement and which were granted to
employees, former employees or directors under the Company's 1987 Stock
Incentive Plan, 1997 Stock Incentive Plan, 1991 Stock Option Plan for Non-
Employee Directors and Deferred Director Fee Option Plan (which are the only
stock option plans, programs or similar arrangements of the Company or any of
its Subsidiaries) (the "Option Plans") shall be canceled by the Company and
terminated, and each holder of a Stock Option who executes an agreement
acknowledging the cancellation of such Stock Option, whether or not then
exercisable, shall be entitled to receive as soon as practicable after the
Effective Time from the Company in consideration for such cancellation an amount
in cash (less applicable withholding taxes, but without interest) equal to the
product of (i) the number of Shares previously subject to such Stock Option,
multiplied by (ii) the positive excess, if any, of the Cash Price over the
exercise price per share of the Shares previously subject to such Stock Option.
The Company agrees that prior to the Effective Time it shall take all steps
necessary or appropriate under the Option Plans to effect the foregoing as of
the Effective Time. The Company shall take all necessary actions required to
properly withhold and remit to the proper taxing authorities all income,
employment and other taxes required by applicable law to be withheld from the
payment of such cash amounts.
(2) The Company agrees that it will take all necessary action prior
to the Effective Time to terminate the Company's Employee Stock Purchase Plan as
of the Effective Time.
SECTION 2.5 Payment for Common Shares.
(1) From and after the Effective Time, such bank or trust company as shall
be mutually acceptable to MergerCo and the Company shall act as exchange agent
(the "Exchange Agent"). Following the Effective Time, MergerCo shall cause to
be made available to the Exchange Agent, as and when required, an amount (the
"Exchange Fund") equal to the aggregate Merger Consideration to which holders of
Common Shares shall be entitled at the Effective Time pursuant to Section
2.1(3).
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(2) Promptly after the Effective Time, MergerCo shall cause the Exchange
Agent to mail to each record holder of certificates (the "Certificates") that
immediately prior to the Effective Time represented Common Shares a form of
letter of transmittal which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon proper delivery
of the Certificates to the Exchange Agent and instructions for use in
surrendering such Certificates and receiving the Merger Consideration in respect
thereof.
(3) In effecting the payment of the Cash Price in respect of Common Shares
represented by Certificates entitled to payment of the Cash Price pursuant to
Section 2.1(3)(iv) (the "Cashed Shares"), upon the surrender of each such
Certificate, the Exchange Agent shall pay the holder of such Certificate the
Cash Price multiplied by the number of Cashed Shares, in consideration therefor.
Upon such payment (and the exchange, if any, of Certificates formerly
representing Common Shares for certificates representing Retained Shares) such
Certificate shall forthwith be cancelled.
(4) In effecting the exchange of Retained Shares in respect of Common
Shares represented by Certificates which, at the Effective Time, shall become
Retained Shares, upon surrender of each such Certificate, the Exchange Agent
shall deliver to the holder of such Certificate a certificate representing that
number of whole Retained Shares which such holder has the right to receive
pursuant to the provisions of Section 2.1(3), and cash in lieu of fractional
Retained Shares. Upon such exchange (and any payment of the Cash Price for
Cashed Shares), such Certificate so surrendered shall forthwith be cancelled.
(5) Until surrendered in accordance with paragraphs (3) or (4) above, each
such Certificate (other than Certificates representing Common shares held by
MergerCo or any of its affiliates, in the treasury of the Company or by any
wholly owned subsidiary of the Company or Dissenting Shares) shall represent
solely the right to receive the aggregate Merger Consideration relating thereto.
No interest or dividends shall be paid or accrued on the Merger Consideration.
If the Merger Consideration (or any portion thereof) is to be delivered to any
person other than the person in whose name the Certificate formerly representing
Common Shares surrendered therefor is registered, it shall be a condition to
such right to receive such Merger Consideration that the Certificate so
surrendered shall be properly endorsed or otherwise be in proper form for
transfer and that the person surrendering such Common Shares shall pay to the
Exchange Agent any transfer or other rates required by reason of the payment of
the Merger Consideration to a person other than the
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registered holder of the Certificate surrendered, or shall establish to the
satisfaction of the Exchange Agent that such tax has been paid or is not
applicable.
(6) Distributions with Respect to Unexchanged Shares. No dividends or
other distributions with respect to Common Shares with a record date after the
Effective Time shall be paid to the holder of any unsurrendered Certificate with
respect to the Common Shares represented thereby, and no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to Section 2.5(7)
until the surrender of such Certificates in accordance with this Section 2.5.
Subject to the effect of applicable laws, following surrender of any such
Certificate, there shall be paid to the holder of the certificate representing
whole Common Shares issued in exchange therefor, without interest, at the time
of such surrender, the amount of any cash payable in lieu of a fractional Common
Share to which such holder is entitled pursuant to Section 2.5(7).
(7) No Fractional Shares. Notwithstanding any other provision of this
Agreement, each holder of Common Shares retained pursuant to the Merger who
would otherwise have been entitled to retain a fraction of a Retained Share
(after taking into account all Shares delivered by such holder) shall receive,
in lieu thereof, a cash payment (without interest) equal to such fraction
multiplied by the Cash Price.
(8) Termination of Escrow Fund. Promptly following the date which is 180
days after the Effective Time, the Exchange Agent shall deliver to the Surviving
Corporation all cash, Certificates and other documents in its possession
relating to the transactions described in this Agreement, and the Exchange
Agent's duties shall terminate. Thereafter, each holder of a Certificate
formerly representing a Common Share may surrender such Certificate to the
Surviving Corporation and (subject to applicable abandoned property, escheat and
similar laws) receive in consideration therefor the aggregate Merger
Consideration relating thereto, without any interest or dividends thereon.
(9) No Liability. None of MergerCo, the Company or Exchange Agent shall be
liable to any person in respect of any Retained Shares (or dividends or
distributions with respect thereto) or cash from the Exchange Fund or the Common
Shares Trust delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law. If any Certificates shall not have been
surrendered prior to seven years after the Effective Time (or immediately prior
to such earlier date on which any Retained Shares, any cash in lieu of
fractional Retained Shares or any dividends or distributions with respect to
Common Shares in respect of such
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Certificate would otherwise escheat to or become property of any Governmental
Entity) any such shares, cash, dividends or distributions in respect of such
Certificate shall, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all claims or interest
of any person previously entitled thereto.
(10) Dissenter's Rights. Notwithstanding 2.1(3), Common Shares that have
not been voted for adoption of the Merger and the Merger Agreement and with
respect to which appraisal shall have been properly demanded in accordance with
the DGCL ("Dissenting Shares") shall not be converted into the right to receive
the Merger Consideration at or after the Effective Time unless and until the
holder of such Common Shares withdraws his or her demand for such appraisal (in
accordance with the DGCL) or becomes ineligible for such appraisal. If a holder
of Dissenting Shares shall withdraw (in accordance with the DGCL) his or her
demand for such appraisal or shall become ineligible for such appraisal, then,
as of the Effective Time or the occurrence of such event, whichever last occurs,
such holder's Dissenting Shares shall cease to be Dissenting Shares and shall be
converted into and represent the right to receive the Merger Consideration
without interest. The Company shall give MergerCo (i) prompt notice of any
written demands for appraisal, withdrawals of demands for appraisal of Common
Shares and any other instruments relating to the DGCL received by the Company
and (ii) the opportunity to participate in all negotiations and proceedings with
respect to demands for appraisal. The Company will not voluntarily make any
payment with respect to demands for appraisal and will not, except with the
prior written consent of MergerCo, settle or offer to settle any such demands.
(11) Withholding Rights. The Surviving Corporation or the Exchange Agent
shall be entitled to deduct and withhold from the Merger Consideration otherwise
payable pursuant to this Agreement to any holder of Common Shares, such amounts
as the Exchange Agent or Surviving Corporation is 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 that amounts are so withheld by Surviving
Corporation or the Exchange Agent, such withheld amounts shall be treated for
all purposes of this Agreement as having been paid to the holder of the Shares
in respect of which such deduction and withholding was made by the Exchange
Agent or the Surviving Corporation.
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SECTION 2.6 Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed with respect to the Common Shares
and no transfer of Common Shares shall thereafter be made.
SECTION 2.7 No Further Ownership Rights in Company Common Stock.
The Merger Consideration delivered upon the surrender for exchange of Shares in
accordance with the terms hereof shall be deemed to have been issued in full
satisfaction of all rights pertaining to such Shares, and there shall be no
further registration of transfers on the records of the Surviving Corporation of
Shares which were outstanding immediately prior to the Effective Time. If, after
the Effective Time, Certificates are presented to the Surviving Corporation for
any reason, they shall be canceled and exchanged as provided in this Article 2.
SECTION 2.8 Lost, Stolen or Destroyed Certificates. In the event any
Certificates shall have been lost, stolen or destroyed, the MergerCo or Exchange
Agent shall issue in exchange for such lost, stolen or destroyed Certificates,
upon the making of an affidavit of that fact by the holder thereof, such Merger
Consideration as may be required pursuant to this Article 2; provided, however,
that MergerCo may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
Certificates to deliver a bond in such sum as it may reasonably direct as
indemnity against any claim that may be made against MergerCo or the Exchange
Agent with respect to the Certificates alleged to have been lost, stolen or
destroyed.
SECTION 2.9 Taking of Necessary Action; Further Action. Each of MergerCo
and the Company will take all such reasonable and lawful action as may be
necessary or appropriate in order to effectuate the Merger in accordance with
this Agreement as promptly as possible. If, at any time after the Effective
Time, any such further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of the Company and MergerCo, the officers and directors of the
Company and MergerCo immediately prior to the Effective Time are fully
authorized in the name of their respective corporations or otherwise to take,
and will take, all such lawful and necessary action.
12
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to MergerCo that, except as set
forth in the SEC Reports (as hereafter defined) or in the section of the written
disclosure schedule delivered on or prior to the date hereof by the Company to
MergerCo relating to the correlative section of this Article 3 (the "Company
Disclosure Schedule"):
SECTION 3.1 Organization and Qualification; Subsidiaries. The Company
and each of its Subsidiaries (as defined below) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, and has full corporate power and authority, directly or
indirectly, to own its properties and assets and to carry on its business as it
is now being conducted. The Company and each of its Subsidiaries is duly
qualified or licensed as a foreign corporation to do business, and is in good
standing, in each jurisdiction where the character of its properties or assets
owned, leased or operated by it or the nature of its activities makes such
qualification or licensing necessary, except where the failure to be so
qualified or licensed will not have a Material Adverse Effect (as defined in
Section 9.3). A true and complete list of all of the Company's Subsidiaries,
together with the jurisdiction of incorporation of each Subsidiary, the
authorized capitalization of each Subsidiary, and the name of each holder of,
and the number of shares of each Subsidiary's outstanding capital stock owned
thereby, is set forth in Section 3.1 of the Company Disclosure Schedule.
"Significant Subsidiary" means a Subsidiary of the Company which is a
"significant subsidiary" (as such term is defined in Rule 1-02 of Regulation S-X
of the SEC) of the Company. Except for the ownership interests set forth in
Section 3.1 of the Company Disclosure Schedule, neither the Company nor any
Subsidiary owns, directly or indirectly, any capital stock or other ownership
interest in any other person. The Company has heretofore furnished to MergerCo
complete and correct copies of the Certificate of Incorporation and the By-laws
of the Company and XTRA, Inc., a Maine corporation which is wholly owned by the
Company. Such certificates of incorporation and by-laws are in full force and
effect and no other organizational documents are applicable to or binding upon
the Company or XTRA, Inc. The Company and its Significant Subsidiaries are not
in violation of any of the provisions of their respective certificates of
incorporation, by-laws or equivalent organizational or governing documents.
13
SECTION 3.2 Capitalization. The authorized capital stock of the Company
consists of (i) 30,000,000 Common Shares and, (ii) 3,000,000 shares of Preferred
Stock. As of the date hereof, 15,328,403 Common Shares and no shares of
Preferred Stock are issued and outstanding and 837,949 Common Shares are
reserved for issuance upon exercise of outstanding stock options. All the issued
and outstanding Common Shares have been duly authorized and validly issued and
are fully paid and nonassessable, and are not subject to, nor were they issued
in violation of, any preemptive (or similar) rights. Except as set forth above,
there are no shares of capital stock or other equity interests of the Company
authorized, issued or outstanding, and there are no outstanding options,
warrants, rights, calls, subscriptions, convertible or other securities or other
agreements, commitments of any character relating to the issued or unissued
capital stock or other securities of the Company or any Subsidiary obligating
the Company or any Subsidiary to issue, transfer or sell any Shares or other
securities and there are no securities exchangeable for or convertible into
capital stock or other equity or voting securities of the Company or any of its
Subsidiaries or obligating the Company or any of its Subsidiaries to issue,
grant, extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking, and there are not outstanding
any equity equivalents, interests in the ownership or earnings of the Company or
any of its Subsidiaries or other similar rights. As of the date hereof, the only
outstanding indebtedness for borrowed money of the Company and its Subsidiaries
is set forth in Section 3.2 of the Company Disclosure Schedule (exclusive of the
purchase price of property due within 90 days of date of purchase). There are no
voting trusts or other agreements or understandings to which the Company or any
of its Subsidiaries is a party with respect to the voting of capital stock of
the Company or any Subsidiary. Section 3.2 of the Disclosure Schedule contains a
table which sets forth, with respect to each class of outstanding options (i)
the number of Common Shares subject to options which are included in such class,
(ii) the names of the officers and directors of the Company and any other Person
to whom options have been granted, (iii) the number of options granted to such
officers and directors and any other Person which are presently exercisable or
which will become exercisable at some future date and, in each case, the
exercise price of each option. All Common Shares subject to issuance as
aforesaid, upon issuance on the terms and conditions specified in the instrument
pursuant to which they are issuable, shall be duly authorized, validly issued,
fully paid and nonassessable and free of preemptive (or similar) rights. There
are no agreements or arrangements pursuant to which the Company is or could be
required to register Common Shares or other securities under the Securities Act
or other agreements or arrangements with or among any securityholders of the
Company with respect to securities of the Company. There are no outstanding
bonds,
14
debentures, notes or other indebtedness or other securities of the Company
having the right to vote (or convertible into, or exchangeable for, securities
having the right to vote) on any matters on which stockholders of the Company
may vote. There are no obligations, contingent or otherwise, of the Company or
any of its Subsidiaries to repurchase, redeem or otherwise acquire any Common
Shares or the capital stock of any Subsidiary or to provide funds to or make any
investment (in the form of a loan, capital contribution, guaranty or otherwise)
in any such Subsidiary or any other entity. All of the outstanding shares of the
capital stock of each Significant Subsidiary (other than any directors'
qualifying shares) are validly issued, fully paid and nonassessable and owned by
the Company or by a wholly-owned Subsidiary of the Company, free and clear of
all liens, claims, pledges, mortgages, charges, security interests and
encumbrances of any nature whatsoever ("Liens") and there are no voting trusts,
voting agreements or similar understandings applicable with respect to such
shares.
SECTION 3.3 Authority Relative to this Agreement. The Company has full
corporate power and authority to enter into this Agreement, to perform its
obligations hereunder and to carry out the transactions contemplated hereby. The
execution, delivery and the performance of this Agreement and the consummation
of the transactions contemplated hereby by the Company, have been duly
authorized by all necessary corporate action on the part of the Company, subject
only to approval of the Merger, if necessary, by the stockholders of the Company
as provided in Section 6.2 and the filing and recording of appropriate merger
documents as required by the DGCL. This Agreement and the Merger have been
approved by the Board of Directors of the Company. This Agreement has been duly
and validly executed and delivered by the Company and, assuming due
authorization and due and valid execution and delivery by MergerCo, is a legal,
valid and binding agreement of the Company enforceable against the Company in
accordance with its terms, except that such enforcement may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and (ii) general principles of
equity regardless of whether applied in a proceeding in equity or at law. The
Board of Directors of the Company has approved this Agreement and the Voting
Agreement (including the option contemplated thereby) and the transactions
contemplated hereby and thereby (including the Merger) so as to render
inapplicable hereto and thereto the limitation on business combinations
contained in Section 203 of the DGCL (or any similar provision). No provision of
the Certificate of Incorporation, By-laws or other equivalent organizational or
governing instruments of the Company or any of its Subsidiaries would, directly
or indirectly, restrict or impair the ability of MergerCo or its affiliates to
vote, or
15
otherwise to exercise the rights of a stockholder with respect to, securities of
the Company and its Subsidiaries that may be acquired or controlled by MergerCo
or its affiliates or permit any stockholder to acquire securities of the Company
on a basis not available to MergerCo in the event that MergerCo were to acquire
securities of the Company, and neither the Company nor any of its Subsidiaries
has any rights plan, preferred stock or similar arrangement which have any of
the aforementioned consequences.
SECTION 3.4 No Conflict, Required Filings and Consent.
(1) The execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement by the Company and the consummation of
the transactions contemplated hereby will not, (i) conflict with or violate the
Certificate of Incorporation or By-laws of the Company or the equivalent
organizational or governing documents of any Significant Subsidiary, (ii)
assuming that all consents, approvals and authorizations contemplated by clauses
(i) of subsection (2) below have been obtained and all filings described in such
clauses have been made, conflict with or violate any federal, foreign, state or
provincial law, ordinance, rule, regulation, order, judgment, arbitral award or
decree (collectively, "Laws") applicable to the Company or any of its
Subsidiaries or by which its or any of their respective properties is bound or
affected, or (iii) result in any breach or violation of or constitute a default
(or an event that with notice or lapse of time or both would become a default
under), or impair the Company's or any of its Subsidiaries' rights or alter the
rights or obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien on any of the properties or assets of the Company or any of
its Subsidiaries pursuant to, any note, bond, loan, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries or its or any of their respective
properties or assets is bound or affected, except in any such case (A) with
respect to clauses (ii) and (iii), for any such conflicts, violations, breaches,
defaults or other occurrences that do not individually or in the aggregate, have
a Material Adverse Effect or prevent, hinder or materially delay the ability of
the Company to consummate the transactions contemplated by this Agreement and
(B) with respect to clause (iii), as set forth in Section 3.4 of the Company
Disclosure Schedule.
(2) The execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement by the Company will not, require any
16
consent, approval, authorization or permit of, or filing with or notification
to, any federal, foreign, state or provincial governmental or regulatory
authority (a "Governmental Entity") except for (A) (i) the filing with the
Securities and Exchange Commission (the "SEC") of (x) a proxy statement relating
to the Company Stockholder Approval (such proxy statement as amended or
supplemented from time to time, the "Proxy Statement"), (y) the registration
statement on Form S-4 to be filed by the Company in connection with the
retention of Common Stock of the Company in the Merger (the "Form S-4"), and (z)
such reports under the Securities Act of 1933, as amended (the "Securities
Act"), and the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as may be required in connection with this Agreement and the transactions
contemplated hereby; (ii) the pre-merger notification requirements of the Xxxx-
Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR Act"),
foreign anti-trust or other similar laws (and the applicable rules and
regulations under any of the foregoing), (iii) the filing and recordation of
appropriate merger or other documents as required by the DGCL, and by relevant
authorities of other states in which the Company is qualified to do business;
and (iv) such other consents, approvals, orders, authorizations, registrations,
declarations, filings or notices as may be required under the state securities
laws ("Blue Sky Laws") and (B) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not prevent or delay consummation of the Merger, or otherwise prevent or
delay the Company from performing its obligations under this Agreement, or would
not otherwise have a Material Adverse Effect.
SECTION 3.5 Compliance. Neither the Company nor any of its
Subsidiaries is in conflict with, or in default or violation of (i) any Law
applicable to the Company or any of its Subsidiaries or by which its or any of
their respective properties is bound or affected or (ii) any note, bond, loan,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which the Company or any of its Subsidiaries
is a party or by which the Company or any of its Subsidiaries or its or any of
their respective properties or assets is bound or affected, except for any such
conflicts, defaults or violations which do not have a Material Adverse Effect.
17
SECTION 3.6 SEC Filings; Financial Statements.
(1) The Company and each of its Subsidiaries has filed with the SEC, to the
extent required to be filed, (i) its Annual Reports on Form 10-K for the fiscal
years ended September 30, 1997, 1996 and 1995, (ii) its Quarterly Reports on
Form 10-Q for each quarter subsequent to September 30,1997, (iii) Form 8-K
reports since September 30, 1997, (iv) proxy statements relating to all meetings
of its stockholders (whether annual or relating to all meetings of its
stockholders (whether annual or special) during 1996, 1997 and 1998 and (v) all
other forms, statements, documents, reports or registration statements required
to be filed by the Company or any of its Subsidiaries since September 30, 1995
(collectively, the "SEC Reports"). The SEC Reports (i) complied in all material
respects in accordance with the requirements of the Securities Act or the
Exchange Act, and the rules and regulations thereunder, as the case may be, and
(ii) did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(2) Each of the consolidated financial statements (including, in each case,
any related notes thereto) contained in the SEC Reports complied as to form in
all material respects with all applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto, was prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as may be indicated in the notes
thereto), and each fairly presents in all material respects the consolidated
financial position of the Company and its Subsidiaries as at the respective
dates thereof and the consolidated results of its operations and cash flows and
stockholder equity for the periods indicated, except that the unaudited interim
financial statements were or are subject to normal and recurring year-end
adjustments which were not or are not expected to be material in amount.
SECTION 3.7 Absence of Certain Changes or Events. Except as set forth in
the SEC Reports filed and made publicly available, since March 31, 1998, the
Company and its Subsidiaries has conducted their business in the ordinary course
consistent with past practice and there has not occurred (a) any Material
Adverse Effect; (b) any amendments or changes in the Certificate of
Incorporation or By-laws of the Company; (c) any damage to, destruction or loss
of any asset of the Company (whether or not covered by insurance) that could
reasonably be expected to have a
18
Material Adverse Effect; (d) any material change by the Company in its
accounting methods, principles or practices; (e) any material revaluation by the
Company of any of its assets, including, without limitation, writing down the
value of property or equipment or writing off notes or accounts receivable other
than in the ordinary course of business or (f) except as otherwise reflected in
the Company Disclosure Schedule, any action which, if it is taken after the date
hereof, would have required the consent of MergerCo under Schedules 5.1(1),
5.1(2)(ii) (excluding normal quarterly dividends), 5.1(iii)-(iv), 5.1(3), 5.1(5)
(except for leases of real property), 5.1(7), 5.1(8), 5.1(9), 5.1(10) or
5.1(12).
SECTION 3.8 No Undisclosed Liabilities. Except as disclosed in the Annual
Report on Form 10-K for the fiscal year ended September 30, 1997, or in
subsequent SEC Filings filed and publicly available prior to the date hereof,
the Company and its Subsidiaries have no liabilities or obligations, accrued,
absolute, contingent or otherwise, other than those which have been incurred
since March 31, 1998 in the ordinary course of business consistent with past
practice and those which, individually or in the aggregate, do not have a
Material Adverse Effect.
SECTION 3.9 Absence of Litigation. Except as disclosed in the SEC
Reports, there are no claims, actions, suits, proceedings or investigations
pending or, to the knowledge of the Company, threatened against the Company or
any of its Subsidiaries, or any properties or rights of the Company or any of
its Subsidiaries, before any court or governmental or other regulatory or
administrative agency or commission that, individually or in the aggregate, do
not have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries nor any of their respective properties is or are subject to any
order, writ, judgment, injunction, decree, determination or award having, or
which is reasonably expected to have, in the foreseeable future a Material
Adverse Effect. As of the date hereof, no officer or director of the Company is
a defendant in any litigation commenced by stockholders of the Company with
respect to the performance of his or her duties as an officer and/or director of
the Company under any federal, state, local or foreign law (including litigation
under federal and state securities laws).
SECTION 3.10 Filings; Form S-4; Proxy Statement. None of the information
provided by the Company in any document to be filed with any Governmental Entity
in connection with the Merger and the transactions contemplated hereby or
supplied by the Company for inclusion in (i) the registration statement on Form
S-4 to be filed with the SEC by the Company in connection with the retention of
Common Shares following the Merger (such Form S-4, as amended or supplemented,
is
19
herein referred to as the "Form S-4") will, at the time the Form S-4 is filed
with the SEC, and at any time it is amended or supplemented or at the time it
becomes effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading and (ii) the proxy
statement to be sent to the stockholders of the Company in connection with the
Stockholders Meeting (as defined in Section 6.1) (such proxy statement, as
amended or supplemented, is herein referred to as the "Proxy Statement") will,
at the date it is first mailed to the Company's stockholders or at the time of
the Stockholders Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they are made, not misleading, except that no representation is made by
the Company with respect to information supplied by MergerCo or any of its
representatives which is contained in or incorporated by reference in any of the
foregoing documents specifically for inclusion in the Proxy Statement. The Form
S-4 will, as of its effective date, and the prospectus contained therein will,
as of its date, comply as to form in all material respects with the requirements
of the Securities Act and the rules and regulations promulgated thereunder. The
Proxy Statement will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations promulgated
thereunder.
SECTION 3.11 Opinion of Financial Advisor. The Company has been advised
by its financial advisor, Xxxxxxx, Sachs & Co., that in its opinion, as of the
date hereof, the Merger Consideration to be received in the Merger by the
Company's stockholders (other than consideration paid with respect to dissenting
shares) is fair to the holders of Shares from a financial point of view.
SECTION 3.12 Tax Matters.
(1) As used in this Agreement, (i) "Company Taxes" shall mean any and all
taxes, charges, fees, levies or other assessments, including income, gross
receipts, excise, real or personal property, sales, withholding, social
security, occupation, use, service, value added, license, net worth, payroll,
franchise, transfer and recording taxes, fees and charges, imposed by the
Internal Revenue Service or any taxing authority (whether domestic or foreign
including any state, local or foreign government or any subdivision or taxing
agency thereof) on the Company or any of its Subsidiaries, whether computed on a
separate, consolidated, unitary, combined or any other basis; and such term
shall include any interest, penalties or additional amounts attributable to, or
imposed upon, or with respect to, any such taxes, charges,
20
fees, levies or other assessments, and (ii) "Tax Return" shall mean any report,
return, document, declaration or other information required to be filed with any
taxing authority or jurisdiction with respect to Company Taxes.
(2) Except as would not have a Material Adverse Effect:
Each of the Company and its Subsidiaries has timely filed or has had
timely filed on its behalf all Tax Returns that it was required to file on or
before the date hereof, and such Tax Returns are true, correct and complete.
Each of the Company and its Subsidiaries has timely paid all Company Taxes
required to be paid before the date hereof. There are no Liens for Company
Taxes on any of the properties of the Company or any of its Subsidiaries other
than Liens for Taxes not yet due.
(3) Except as would not have a Material Adverse Effect or as set forth in
Section 3.12 of the Company Disclosure Schedule:
No audit or other proceeding with respect to Company Taxes has been
commenced by any taxing authority, and neither the Company nor any of its
Subsidiaries has received any written notice of any audit, claim, deficiency or
assessment pending or proposed with respect to Company Taxes. All deficiencies
relating to Company Taxes asserted in writing and any assessments made as a
result of any examinations of Tax Returns of the Company or any of its
Subsidiaries by the IRS or the appropriate state, local or foreign taxing
authority have been paid in full or are being contested in good faith. Neither
the Company nor any of its Subsidiaries is party to any written agreements or
waivers extending the statutory period of limitations applicable to any Company
Taxes. There is no contract or agreement, plan or arrangement by the Company or
any of its Subsidiaries covering any person that could give rise to the payment
of any amount that would not be deductible by the Company or its Subsidiaries by
reason of Section 162(m) or Section 280G of the Code or otherwise, as now in
effect or as in effect as of the Effective Time. Schedule 3.12 of the Company
Disclosure Schedule lists the currently outstanding power of attorneys granted
by or with respect to the Company and its Subsidiaries relating to federal and
state Company Taxes.
SECTION 3.13 Takeover Statutes Not Applicable. No "fair price,"
"moratorium," "control share MergerCo," "interested stockholder" or other
similar anti-takeover statute or regulation enacted under state or federal laws
in the United States (each a "Takeover Statute") applicable to the Company or
any of its Subsidiaries is
21
applicable to the execution, delivery and performance of this Agreement or the
Voting Agreements or the consummation of the Merger or the other transactions
contemplated by this Agreement or the Voting Agreements.
SECTION 3.14 Properties. (1) The Company or one of its Subsidiaries has
(i) good and marketable fee title to the real property owned in fee by the
Company or any of its Subsidiaries (collectively, the "Owned Properties") and
(ii) good and valid leasehold title or other occupancy right to the real
property leased, subleased or licensed by the Company or any of its Subsidiaries
(collectively, the "Leased Properties") (the Owned Properties and Leased
Properties being sometimes referred to herein collectively as the "Company
Properties"), in each case free and clear of all options to purchase or lease
(in the case of the Owned Properties), leases, subleases, rights of first offer,
conditions of limitation, easements, Liens, covenants, rights-of-way and other
restrictions (collectively, "Title Matters"), except for such Liens and Title
Matters, which individually or in the aggregate, do not have a Material Adverse
Effect or which do not materially and adversely affect the current use or value
of any Company Properties significant to the Company and its Subsidiaries taken
as a whole.
(2) Each agreement under which real property is leased, subleased or
licensed to the Company or one of its Subsidiaries (collectively, the "Company
Leases") is in full force and effect in accordance with its respective terms and
the Company or one of its Subsidiaries is the holder of the lessee's or tenant's
interest thereunder and there exists no default under any of the Company Leases
by the Company or any of its Subsidiaries and no circumstance exists which, with
the giving of notice, the passage of time or both could result in such a
default, except for such matters or other circumstances which, individually or
in the aggregate, do not have a Material Adverse Effect. Except as set forth in
Section 3.14(b) of the Company Disclosure Schedule, the consummation of the
Merger or other transactions contemplated hereby does not violate the terms of
any of the Company Leases, other than violations, which individually or in the
aggregate do not have a Material Adverse Effect. Except as set forth in Section
3.14(b) of the Company Disclosure Schedule, there are no Company Leases subject
to any Lien, sublease, assignment, license or other agreement granting to any
third party any interest in such Company Lease or any right to the use or
occupancy of any Leased Property, except for any of the foregoing matters which,
individually or in the aggregate, do not have a Material Adverse Effect.
22
(3) Each of the Company and its Subsidiaries has all permits
necessary to own or operate its Owned Real Property and Leased Real Property as
currently owned, and, to the knowledge of the Company, no such permits will be
required, solely as a result of the Merger or the other transactions
contemplated hereby, to be issued after the Closing in order to permit the
Company following the Merger to continue to own or operate such Company
Properties, other than any such permits the absence of which would not
reasonably be expected to have a Material Adverse Effect. Except as set forth
in Section 3.14(b) of the Company Disclosure Schedule, neither the Company nor
any of its Subsidiaries has received, with respect to any Owned Real Property or
Leased Real Property, any written notice of default or any written notice of
noncompliance with respect to applicable federal, state, local and foreign laws
and regulations relating to zoning, building, fire, use restriction or safety or
health codes which have not been remedied in all respects which has a Material
Adverse Effect. There is no pending or, to the knowledge of the Company,
threatened condemnation or other governmental taking of any of the Owned Real
Property or Leased Real Property, which would have a Material Adverse Effect.
All material buildings, structures, improvements and fixtures located on, under,
over or within the Company Properties, taken as a whole, (A) are in good
operating condition and repair and are structurally sound and free of any
material defects; and (B) are suitable, sufficient and appropriate in all
respects for their current and contemplated uses.
SECTION 3.15 Intellectual Property. Except as does not have a Material
Adverse Effect: (i) the Company and each of its Subsidiaries owns, or is
licensed or otherwise has the right to use (in each case, free and clear of any
Liens of any kind), all Intellectual Property used in or necessary for the
conduct of its business as currently conducted; (ii) no claims are pending or,
to the knowledge of the Company, threatened, and the Company and its
Subsidiaries have not received any notice or notification alleging, that the
Company or any of its Subsidiaries is infringing on or otherwise violating the
rights of any person with regard to any Intellectual Property owned by, licensed
to and/or used by the Company or its Subsidiaries and, to the knowledge of the
Company, there is no basis therefor; (iii) neither the Company nor any of its
subsidiaries has infringed upon or misappropriated, or is infringing upon or
misappropriating, any U.S. or foreign patents or copyrights or any U.S., state
or foreign trademarks, or other Intellectual Property rights of any person; (iv)
to the knowledge of the Company, no person is infringing on or otherwise
violating any right of the Company or any of its Subsidiaries with respect to
any Intellectual Property owned by and/or licensed to the Company or its
Subsidiaries; and (v) the execution and delivery of this Agreement, compliance
with its terms and the consum-
23
mation of the transactions contemplated hereby do not and will not conflict with
or result in any violation or default (with or without notice or lapse of time
or both) or give rise to any right, license or Lien relating to Intellectual
Property, or right of termination, alteration, amendment, cancellation or
acceleration of any Intellectual Property right or obligation, or the loss or
encumbrance of any Intellectual Property or benefit related thereto, or result
in or require the creation, imposition or extension of any Lien upon any
Intellectual Property or right. For purposes of this Agreement, "Intellectual
Property" means all intellectual property or other proprietary rights of every
kind, including, without limitation, all domestic or foreign patents, patent
applications, inventions (whether or not patentable), processes, products,
technologies, discoveries, copyrightable and copyrighted works, apparatus, trade
secrets, trademarks (registered and unregistered) and trademark applications and
registrations, brand names, certification marks, service marks and service xxxx
applications and registrations, trade names, trade dress, copyright
registrations, design rights, customer lists, marketing and customer
information, mask works, rights, know-how, licenses, technical information
(whether confidential or otherwise), software, and all documentation thereof.
SECTION 3.16 Labor Matters. Except as disclosed in Section 3.16 of the
Company Disclosure Schedule, (i) neither the Company nor any of its Subsidiaries
is a party to, or bound by, any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor organization; (ii)
to the knowledge of the Company, neither the Company nor any of its Subsidiaries
is the subject of any proceeding asserting that it or any of its Subsidiaries
has committed an unfair labor practice or seeking to compel it to bargain with
any labor organization as to wages or conditions of employment; (iii) there is
no strike, work stoppage or other labor dispute involving the Company or any of
its Subsidiaries pending or, to the Company's knowledge, threatened; (iv) to the
knowledge of the Company, no action, suit, complaint, charge, arbitration,
inquiry, proceeding or investigation by or before any Governmental Entity
brought by or on behalf of any employee, prospective employee, former employee,
retiree, labor organization or other representative of its employees is pending
or threatened against the Company or any of its Subsidiaries; (v) to the
knowledge of the Company, no grievance is pending or threatened against the
Company or any of its Subsidiaries; (vi) neither the Company nor any of its
Subsidiaries is a party to, or otherwise bound by, any consent decree with, or
citation by, any Governmental Entity relating to employees or employment
practices and (vii) there have been no adverse developments with respect to the
matters set forth on Schedule 3.16, except, with respect to matters in clauses
(iv), (v), (vi) or (vii), individually or in the aggregate, do not have a
Material Adverse Effect.
24
SECTION 3.17 Year 2000 Compliance. Except as disclosed in the SEC
Reports, all software, databases, microcode, hardware, systems and devices with
date-related functionality used by the Company or its Subsidiaries, or which are
in development by or for the Company or any of its Subsidiaries, correctly
Process (as defined below) all dates, including those before, on or after
January 1, 2000 (taking into account leap year considerations), without any loss
of functionality, interoperability or performance, and whether used on a stand-
alone basis or in combination with other software, hardware, system or device.
For purposes of the foregoing, "Process" means all functions, including
-------
but not limited to accepting as input, calculating, storing, displaying and
generating as output.
SECTION 3.18 Material Contracts. The Company has delivered or made
available to MergerCo true and correct copies of all written Material Agreements
(as hereinafter defined). Except as set forth in Section 3.18 of the Company
Disclosure Schedule, each Material Agreement is in full force and effect and, to
the knowledge of the Company, is valid and enforceable by the Company or a
Subsidiary of the Company, as the case may be, in accordance with its terms
except that (i) such enforcement may be subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws, now or hereafter
in effect, affecting creditors' rights generally, and (ii) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought. Except as set forth in Section 3.18 of
the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries
is in default in the observance or the performance of any term or obligation to
be performed by it under any Material Agreement except for such defaults the
effect of which, individually or in the aggregate, do not have a Material
Adverse Effect. To the knowledge of the Company, no other Person is in default
in the observance or the performance of any term or obligation to be performed
by it under any agreement which default has a Material Adverse Effect. Except as
set forth in Section 3.18 of the Disclosure Schedule, to the knowledge of the
Company, there exist no indemnification agreements with any of the directors and
officers of the Company. As used in this Agreement, "Material Agreement" shall
mean each agreement, arrangement, instrument, bond, note, commitment, franchise,
indemnity, indenture, lease, license or understanding, whether or not in
writing, to which the Company or any of its Subsidiaries is a party or to which
the Company, any of its Subsidiaries or any of their respective properties is
subject that (i) was filed as exhibit to or otherwise reflected in the report on
Form 10-K filed with the SEC by the Company for the Company's fiscal year ended
September 30, 1997 or in SEC
25
reports filed thereafter, (ii) obligates the Company or any of its Subsidiaries
to pay after March 31, 1998 an amount in excess of $500,000 in any twelve-month
period beginning after March 31, 1998 (other than for real estate leases or
other than for insurance policies listed on Schedule 3.22), (iii) provides for
the extension of credit (other than for employee advances in the ordinary course
of business) in an amount in excess of $10,000 or more in any single transaction
or $50,000 in any series of transactions, (iv) provides for a guaranty by the
Company or any of its Subsidiaries of obligations of others in excess of
$1,000,000, (v) constitutes a consulting agreement or personal service contract
not terminable on less than sixty (60) days' notice without penalty and calling
for payments of $100,000 or more per year, (vi) represents a contract upon which
the Company and its Subsidiaries taken as a whole are substantially dependent,
(vii) in addition to that as set forth on Schedule 3.2, represents indebtedness
for borrowed money for $100,000 or more, (viii) relates to the divestiture or
acquisition since June 30, 1995 of a significant amount of assets other than in
the ordinary course of business, or (ix) limits, in any material respect, the
ability of the Company or any of its Subsidiaries to engage in any present lines
of business, compete with any Person in the Company's present lines of business
or expand the nature or geographic scope of the Company's present lines of
business.
SECTION 1.34 Employee Benefits; ERISA.
(1) Schedule 3.19(1) contains a true and complete list of each material
deferred compensation and each other equity compensation plan, program,
agreement or arrangement; each severance or termination pay and other "welfare"
plan, fund or program (within the meaning of Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")); each "pension"
plan, fund or program (within the meaning of Section 3(2) of ERISA); each
employment, termination or severance agreement (other than those requiring the
payment of less than $50,000 per year to any employee or former employee and
less than $500,000 per year in the aggregate to all employees); and each other
employee material benefit plan, fund, program, agreement or arrangement, in each
case, that is sponsored, maintained or contributed to or required to be
contributed to by the Company or by any trade or business, whether or not
incorporated (an "ERISA Affiliate"), that together with the Company would be
deemed a "single employer" within the meaning of Section 4001(b) of ERISA, or to
which the Company or an ERISA Affiliate is party, whether written or oral, for
the benefit of any employee or former employee of the Company or any Subsidiary
(the "Plans"). Neither the Company, any Subsidiary nor any ERISA Affiliate has
any commitment or formal plan, whether legally binding or not, to create any
additional employee benefit plan or
26
modify or change any existing Plan that would affect any employee or former
employee of the Company or any Subsidiary. No Plan is a "multiemployer plan"
within the meaning of Section 3(37) of ERISA. Each Plan may be terminated at any
time by the Company or the appropriate Subsidiary or ERISA Affiliate.
(2) With respect to each Plan, the Company has heretofore delivered to
MergerCo each of the following documents:
(i) a copy of the Plan and any amendments thereto (or if the
Plan is not a written Plan, a description thereof);
(ii) a copy of the two most recent annual reports;
(iii) a copy of the most recent Summary Plan Description required
under ERISA with respect thereto;
(iv) if the Plan is funded through a trust or any third party
funding vehicle, a copy of the trust or other funding agreement and the
latest financial statements thereof; and
(v) the most recent determination letter received from the
Internal Revenue Service with respect to each Plan intended to qualify
under Section 401 of the Internal Revenue Code of 1986, as amended (the
"Code").
(3) Each Plan has been operated and administered in all material respects
in accordance with its terms and applicable law, including but not limited to
ERISA and the Code. To the knowledge of the Company, each Plan intended to be
"qualified" within the meaning of Section 401(a) of the Code is so qualified and
the trusts maintained thereunder are exempt from taxation under Section 501(a)
of the Code. To the knowledge of the Company, each Plan intended to satisfy the
requirements of Section 501(c)(9) has satisfied such requirements. To the
knowledge of the Company, neither the Company or any Subsidiary, any Plan, any
trust created thereunder, nor any trustee or administrator thereof has engaged
in a transaction in connection with which the Company or any Subsidiary, any
Plan, any such trust, or any trustee or administrator thereof, or any party
dealing with any Plan or any such trust could be subject to either a civil
penalty assessed pursuant to Section 409 or 502(i) of ERISA or a tax imposed
pursuant to Section 4975 or 4976 of the Code.
27
(4) No Plan provides medical, surgical, hospitalization, death or similar
benefits (whether or not insured) for employees or former employees of the
Company or any Subsidiary for periods extending beyond their retirement or other
termination of service, other than (i) coverage mandated by applicable law, (ii)
death benefits under any "pension plan," or (iii) benefits the full cost of
which is borne by the current or former employee (or his beneficiary).
(5) Except as set forth in Schedule 3.19(5) hereto, the consummation of
the transactions contemplated by this Agreement will not, either alone or in
combination with another event, (i) entitle any current or former employee or
officer of the Company or any ERISA Affiliate to severance pay, unemployment
compensation or any other payment, except as expressly provided in this
Agreement, or (ii) accelerate the time of payment or vesting, or increase the
amount of compensation due any such employee or officer.
(6) There are no pending, threatened or anticipated claims by or on behalf
of any Plan, by any employee, former employee or beneficiary covered under any
such Plan, or otherwise involving any such Plan (other than routine claims for
benefits).
SECTION 3.20 Environmental Laws. (1) Except as could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect or is
disclosed in Schedule 3.20: (i) the Company and its Subsidiaries hold, and, to
the knowledge of the Company, are in compliance with, all Environmental Permits,
and the Company and its Subsidiaries are otherwise in compliance with all
applicable Environmental Laws and there are no circumstances that might prevent
or interfere with such compliance in the future; (ii) none of the Company or any
of its Subsidiaries has received any Environmental Claim, and the Company is not
aware of any threatened Environmental Claim or of any circumstances, conditions
or events that could reasonably be expected to give rise to a Environmental
Claim, against the Company or any of its Subsidiaries; (iii) none of the Company
or any of its Subsidiaries has entered into or agreed to any consent decree,
order or agreement under any Environmental Law, and none of the Company or any
of its Subsidiaries is subject to any judgment, decree, order or other
requirement relating to compliance with any Environmental Law or to
investigation, cleanup, remediation or removal of regulated substances under any
Environmental Law; (v) to the knowledge of the Company, there are no past
(including, without limitation, with respect to assets or businesses formerly
owned, leased or operated by the Company or any of its Subsidiaries) or present
actions, activities, events, conditions or circumstances, including without
limitation the release, threatened release, migration, emission, discharge,
generation,
28
treatment, storage or disposal of Hazardous Materials, that could reasonably be
expected to give rise to a material liability of the Company or any of its
Subsidiaries under any Environmental Laws or any contract or agreement; (vi) no
modification, revocation, reissuance, alteration, transfer, or amendment of the
Environmental Permits, or any review by, or approval of, any third party of the
Environmental Permits is required solely by reason of the execution or delivery
of this Agreement or the consummation of the transactions contemplated hereby or
the continuation of the business of the Company or its Subsidiaries following
such consummation; (vii) to the knowledge of the Company, Hazardous Materials
have not been generated, transported, treated, stored, disposed of, released or
threatened to be released at, on, from or under any of the properties or
facilities currently or formerly owned, leased or otherwise used by the Company
or any of its Subsidiaries, in violation of, or in a manner or to a location
that could give rise to a material liability under, any Environmental Laws; and
(viii) to the knowledge of the Company, the Company and its Subsidiaries have
not assumed, contractually or by operation of law, any liabilities or
obligations under any Environmental Laws.
(3) The Company has provided or made available to MergerCo or its
representatives copies of all material Environmental Reports in its possession
relating to its Fairmont City, Illinois facility. For purposes of this
Agreement, an Environmental Report means any report, study, assessment, audit,
or other similar document prepared by or for the Company or its Subsidiaries, or
in the possession of any of them, that addresses environmental matters
affecting its Fairmont City, Illinois facility.
(4) For purposes of this Agreement, the following terms shall have
the following meanings:
"Environmental Claim" means any written or oral notice, claim, demand,
action, suit, complaint, proceeding or other communication by any person
alleging liability or potential liability (including without limitation
liability or potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resource damages, property damage, personal
injury, fines or penalties) arising out of, relating to, based on or resulting
from (i) the presence, discharge, emission, release or threatened release of any
Hazardous Materials at any location, whether or not owned, leased or operated by
the Company or any of its Subsidiaries, (ii) circumstances forming the basis of
any violation or alleged violation of any Environmental Law or Environmental
Permit or (iii) otherwise relating to obligations or liabilities under any
Environmental Laws.
29
"Environmental Laws" means all applicable federal, state, local and
foreign statutes, rules, regulations, ordinances, orders, decrees and common law
relating in any manner to contamination, pollution or protection of human health
or the environment, including without limitation the Comprehensive Environmental
Response, Compensation and Liability Act, the Solid Waste Disposal Act, the
Clean Air Act, the Clean Water Act, the Toxic Substances Control Act, the
Occupational Safety and Health Act, the Emergency Planning and Community-Right-
to-Know Act, the Safe Drinking Water Act, all as amended, and similar state,
local and foreign laws.
"Environmental Permits" means all permits, licenses, registrations and
other governmental authorizations required under Environmental Laws for the
Company and its Subsidiaries, including without limitation in connection with
the operations of the Company's and its Subsidiaries' facilities and otherwise
to conduct their respective businesses.
"Hazardous Materials" means all hazardous or toxic substances, wastes,
materials or chemicals, petroleum (including crude oil or any fraction thereof)
and petroleum products, asbestos and asbestos containing materials, pollutants,
contaminants and all other materials, substances and forces, including but not
limited to electromagnetic fields, regulated pursuant to, or that could form the
basis of liability under, any Environmental Law.
SECTION 3.21 Title to Personal Properties; Condition of Assets.
(1) Except as set forth in Schedule 3.21 of the Disclosure Schedule and
except where the failure to so have will have a Material Adverse Effect, the
Company and each Subsidiary has good and marketable title to, or valid leasehold
interests in, all its material personal properties and assets. All such
material personal properties and assets are free and clear of all Liens other
than those set forth in Schedule 3.21 of the Company Disclosure Schedule and
except for Liens that, individually or in the aggregate, do not materially
interfere with the ability of the Company or any Subsidiary to conduct its
business as currently conducted and do not adversely affect the value of, or the
ability to sell, in any material respect, such personal properties and assets.
(2) The material personal properties and assets of the Company and its
Subsidiaries, taken as a whole, are in reasonably good repair and operating
30
condition, ordinary wear and tear excepted, and are sufficient for the conduct
of the business of the Company and Subsidiaries as presently conducted.
SECTION 3.22 Insurance. The Company has in full force and effect the
insurance policies set forth in Schedule 3.22 of the Company Disclosure
Schedules.
SECTION 3.23 Required Company Vote. The affirmative vote of a majority
of the outstanding Common Shares is the only vote of the holders of any class or
series of the Company's securities necessary to approve this Agreement, the
Merger and the other transactions contemplated hereby.
SECTION 3.24 Board Recommendations. The Board of Directors of the
Company, at a meeting duly called and held, has by vote of the directors present
(which directors constituted a quorum) (i) determined that this Agreement and
the transactions contemplated hereby, including the Merger, and the Voting
Agreement and the transactions contemplated thereby, taken together, are fair to
and in the best interests of the stockholders of the Company and (ii) resolved
to recommend that the holders of the Common Shares approve this Agreement and
the transactions contemplated herein, including the Merger.
SECTION 3.25 Brokers. No broker, finder or investment banker other than
Xxxxxxx, Xxxxx & Co. (the "Company Financial Advisor") is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by and
on behalf of the Company. The Company has heretofore furnished to MergerCo a
complete and correct copy of all agreements between the Company and the Company
Financial Advisor pursuant to which such firm would be entitled to any payment
relating to the transactions contemplated hereby. The aggregate fees payable
under such agreements will not be in excess of $6.5 million.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF MERGERCO
MergerCo hereby represents and warrants to the Company that:
SECTION 4.1 Organization and Qualification. MergerCo is a limited
liability company duly organized, validly existing and in good standing under
the
31
laws of the jurisdiction of its incorporation and has full corporate power and
authority, directly or indirectly, to own its properties and assets and to carry
on its business as it is now being conducted. MergerCo was formed on June 17,
1998 solely for the purpose of engaging in the transactions contemplated by this
Agreement. Except for (i) obligations or liabilities incurred in connection
with its organization and the transactions contemplated by this Agreement, and
(ii) this Agreement and any other agreements or arrangements contemplated by
this Agreement or in furtherance of the transactions contemplated hereby,
MergerCo has not incurred, directly or indirectly, through any Subsidiary or
Affiliate, any obligations or liabilities or engaged in any business activities
of any type or kind whatsoever or entered into any agreements or arrangements
with any Person.
SECTION 4.2 Financing. Investors in MergerCo (the "Investors") have, as
of the date hereof, sufficient sources of liquid capital funds, to fund, in
cash, to the Company at least $292.5 million in equity capital and MergerCo has
received and provided the Company with true and correct copies of executed
commitment letters (the "Commitment Letters") from certain institutional lenders
and investors with respect to secured bank facilities, unsecured subordinated
debt financing and equity financing (such persons being collectively referred to
as the "Financing Sources") and, subject to its receipt of the financing
contemplated by the Commitment Letters, will have as of the Closing Date funds
in an aggregate amount sufficient to (i) pay the aggregate Cash Price with
respect to all outstanding Shares, (ii) prepay, redeem, refinance or renegotiate
the Company's existing indebtedness other than with respect to the Company's
Series C Medium Term Notes and capital leases, if required to consummate the
Merger and the other transactions contemplated hereby, and pay any and all fees,
expenses and costs in connection with any such prepayment, redemption,
refinancing or renegotiation and in connection with obtaining of the financing
contemplated by the Commitment Letters, (iii) consummate all of the other
transactions contemplated by this Agreement, and (iv) provide sufficient working
capital needs of the Company following the Merger (as determined by MergerCo)
(collectively, the "Required Financing").
SECTION 4.3 Relative to this Agreement. MergerCo has full power and
authority to enter into this Agreement, to perform its obligations hereunder and
to carry out the transactions contemplated hereby. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of MergerCo. This Agreement has been duly and validly executed and
delivered by MergerCo and, assuming due authorization and due and valid
execution and delivery
32
by the Company, this Agreement constitutes a legal, valid and binding agreement
of MergerCo enforceable against it in accordance with its terms, except that
such enforcement may be subject to (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights and (ii) general principles of equity regardless of whether
applied in a proceeding in equity or at law.
SECTION 4.4 No Conflict, Required Filings and Consents.
(1) The execution and delivery of this Agreement by MergerCo does not, and
the performance of this Agreement by MergerCo will not, (i) conflict with or
violate the Operating Agreement of MergerCo, (ii) assuming that all consents,
approvals and authorizations contemplated by clauses (i) of subsection (2) below
have been obtained and all filings described in such clauses have been made,
conflict with or violate any Laws applicable to MergerCo or by which its
properties or assets are bound or affected or (iii) result in any breach or
violation of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or impair MergerCo's rights or alter
the rights or obligations of any third party under, or give to others any rights
of termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien on any of the properties or assets of MergerCo pursuant to,
any note, bond, loan, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which MergerCo is a party
or by which MergerCo or its properties or assets are bound or affected, except,
in any such case with respect to clauses (ii) and (iii), for any such conflicts,
violations, breaches, defaults or other occurrences that could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect or
prevent, hinder or materially delay the ability of the MergerCo to consummate
the Merger or the transactions contemplated by this Agreement.
(2) The execution and delivery of this Agreement by MergerCo does not, and
the performance of this Agreement by MergerCo will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Entity, domestic or foreign, except (i) for applicable
requirements, if any, of the Securities Act, the Exchange Act, the Blue Sky
Laws, the premerger notification requirements of the HSR Act, foreign antitrust
laws (and the applicable rules and regulations under any of the foregoing), and
the filing and recordation of appropriate merger or other documents as required
by the DGCL, and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not
prevent or delay consummation of the Merger, or otherwise
33
prevent MergerCo from performing its obligations under this Agreement, and would
not have a Material Adverse Effect.
SECTION 4.5 Filings; Form S-4; Proxy Statement. None of the information
provided by MergerCo in any document to be filed with any Governmental Entity in
connection with the Merger and the transactions contemplated thereby or supplied
in writing by MergerCo specifically for inclusion in (i) the Form S-4 will, at
the time the Form S-4 is filed with the SEC, and at any time it is amended or
supplemented or at the time it becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading and (ii) the Proxy Statement will, on the date the Proxy
Statement is first mailed to stockholders of the Company, on the date of the
Stockholders' Meeting (as hereafter defined) 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 made therein, in light of the
circumstances under which they were made, not misleading. Notwithstanding the
foregoing, MergerCo makes no representation or warranty with respect to any
information supplied by the Company or any of its representatives which is
contained in or incorporated by reference in any of the foregoing documents.
SECTION 4.6 Brokers and Finders. Except as provided in Section 8.3(3),
neither MergerCo nor any of its officers, directors or employees has employed
any broker or finder or incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the transactions contemplated by
this Agreement which could result in any liability being imposed on the Company.
ARTICLE 5
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.1 Conduct of Business by the Company Pending the Merger. The
Company covenants and agrees that, during the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Effective Time, unless otherwise agreed in writing by MergerCo or as
otherwise specifically contemplated by this Agreement:
34
(1) The Company shall and shall cause each of its Subsidiaries to conduct
their respective businesses only in the ordinary and usual course and consistent
with past practice;
(2) The Company shall not and shall cause each of its Subsidiaries not to
(i) amend its Certificate of Incorporation or by-laws or equivalent
organizational or governing documents of any Subsidiary; (ii) split, combine,
subdivide or reclassify any outstanding shares of its capital stock or declare,
set aside or pay any dividend payable in cash, stock or property or make any
other distributions with respect to shares of capital stock or any of them
(other than dividends paid to the Company by its wholly owned Subsidiaries in
respect of their common stock); (iii) issue, sell, pledge, dispose of, encumber
or subject to any Lien or authorize or propose the issuance, sale, pledge,
disposition or encumbrance of (or imposition of a Lien on) (A) any shares of, or
rights of any kind to acquire any shares of, capital stock of any class of any
of them, or securities convertible into any such shares, or any rights, warrants
or options or commitments of any nature whatsoever to acquire any such shares or
convertible securities or (B) any other securities in respect of or in
substitution for any outstanding shares of capital stock of any of them (other
than upon exercise of, and pursuant to, Stock Options outstanding on the date of
this Agreement); or (iv) redeem, purchase or acquire or offer to acquire any
shares of its capital stock;
(3) The Company shall use reasonable efforts to preserve intact the
business organization of the Company and its Subsidiaries, to keep available the
services of the present officers and key employees of the Company and its
Subsidiaries, and to preserve the good will of those having business
relationships with it and its Subsidiaries;
(4) The Company shall not and shall cause each of its Subsidiaries not to
(i) (except for increases which are mandated by the terms of existing agreements
and increases for persons other than officers and directors in the ordinary
course of business and consistent with past practice) increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay any
benefit not required by any existing plan or arrangement (including, without
limitation, the granting of stock options or stock appreciation rights or the
removal of existing restrictions in any Benefit Plan) (ii) grant any severance
or termination pay not currently required to be paid under existing severance
plans (except in an amount not greater than $10,000 to any single employee and,
in any event, not greater than $300,000 to all employees) to, or enter into or
modify in any material or economic respect any
35
employment, consulting or severance agreement or arrangement with, any present
or former director, officer or other employee of the Company or any of its
Subsidiaries, except for the granting of severance or termination pay, in the
ordinary course of business consistent with past practice, to nonexecutive
employees who are terminated by the Company after the date hereof, (iii)
establish, adopt, enter into or amend or terminate any collective bargaining,
bonus, profit sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, deferred compensation, employment, termination, severance
or other plan, agreement, trust, fund, policy or arrangement for the benefit of
any directors, officers or employees or (iv) terminate the existing employment
arrangements with any officer of the Company or any of its Subsidiaries or take
any action that would constitute a breach of any such arrangements or take any
action (other than consummation of the Merger) which would cause any change-of-
control, severance or similar payment to be payable to any such individual;
(5) The Company shall not and shall not permit any of its Subsidiaries to
encumber, sell, lease or otherwise dispose of or acquire any assets other than
in the ordinary course of business consistent with past practice or, except as
otherwise provided herein, enter into any merger or other agreement providing
for the acquisition of the Company or any of its Subsidiaries by any third party
or acquire (by merger, consolidation, or acquisition of stock or assets) any
corporation, partnership or other business organization or division thereof or
enter into any lease for real property requiring the payment of $100,000 or more
per annum or having a term greater than two years.
(6) Other than with respect to borrowings and repayments in the ordinary
course of business under existing lines of credit (which borrowings shall not in
aggregate amount exceed $859 million in U.S. dollars at any one time
outstanding), neither the Company nor any Subsidiary shall (i) repurchase,
repay, incur or cause or permit to exist any indebtedness for borrowed money or
issue any debt securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for, the obligations of any person, or enter
into any "keep well" or other agreement to maintain any financial statement
condition of another person or enter into any arrangement having the economic
effect of any of the foregoing, or make any loans, advances or capital
contributions to, or investments in, any person other than the Company or a
direct or indirect wholly owned Subsidiary of the Company; (ii) enter into,
terminate, waive, modify or amend any Material Contract in any material respect
or enter into or amend or modify any contract or agreement for the purchase or
lease of property, equipment or assets requiring payments from third parties of
36
$5,000,000 or more and having a term of two years or more; or (iii) other than
capital expenditures of $60,900,000 already ordered and set forth on Schedule
5.1(6), authorize any capital expenditures in an amount exceeding $10,000,000
per month on a cumulative basis;
(7) Except as may be required as a result of a change in law or in
generally accepted accounting principles, the Company shall not change in any
material respect any of its accounting practices, principles or methods;
(8) Neither the Company nor any Subsidiary shall settle or compromise any
pending or threatened suit, action or claim for in excess of $250,000 per suit,
action or claim, and $500,000 in the aggregate (it being agreed that the Company
may settle or compromise any of the foregoing pursuant to which it is entitled
to collect monies thereby in its reasonable judgment in a manner consistent with
past practice), or which relates to the transactions contemplated hereby;
(9) The Company shall not adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its Subsidiaries (other than this
Agreement and the Merger);
(10) The Company shall maintain all insurance policies in full force and
effect;
(11) Except as would not have a Material Adverse Effect, the Company shall
not and shall cause its Subsidiaries not to compromise or settle any claim, with
respect to Company Taxes; and
(12) Neither the Company nor any Subsidiary shall take or agree to take in
writing or otherwise, enter into any contract, agreement, commitment or
arrangement to do any of the foregoing.
SECTION 5.2 No Solicitation, etc.
(1) Until the termination of this Agreement, the Company and its
Subsidiaries shall not, directly or indirectly, whether through any officer,
director, employee, representative, agent or advisor (including any attorney,
accountant, consultants, banker or financial advisor) of the Company or any of
its Subsidiaries or otherwise, (i) solicit, initiate, encourage or facilitate
the initiation of any inquiries or
37
proposals regarding any merger, sale of substantial assets, sale of shares of
capital stock (including without limitation by way of a tender offer),
liquidation, recapitalization, consolidation or other business combination
involving the Company or its Subsidiaries or acquisition or exchange of any
capital stock or any material portion of the assets (except for acquisitions of
assets in the ordinary course of business consistent with past practice) of the
Company or its Subsidiaries, or any combination of the foregoing or similar
transactions involving the Company or any Subsidiaries of the Company other than
the Merger (any of the foregoing inquiries or proposals being referred to herein
as an "Acquisition Proposal"), (ii) engage in negotiations or discussions
concerning, or provide or disclose any nonpublic information to any Person
relating to, any Acquisition Proposal, (iii) enter into any agreement,
arrangement or understanding requiring it to abandon, terminate or fail to
consummate the Merger or any other transactions contemplated hereby, or (iv)
agree to, approve or recommend any Acquisition Proposal; provided, however, that
nothing contained in this Section 5.2(a) shall prevent the Board of Directors of
the Company from considering, negotiating, approving and recommending to the
stockholders of the Company a bona fide Acquisition Proposal which is received
by the Company after the date and is not solicited in violation of this
Agreement, if such a proposal is, in the opinion of the Company's Board of
Directors, more favorable to the Company's stockholders than the transactions
contemplated by this Agreement, and the Board of Directors of the Company
determines in good faith (upon advice of outside legal counsel) that it is
required to do so in order not to violate its fiduciary duties.
(2) The Company shall promptly notify MergerCo after receipt of any
Acquisition Proposal, or any modification of or amendment to any Acquisition
Proposal, or any request for nonpublic information relating to the Company or
any of its Subsidiaries in connection with an Acquisition Proposal or for access
to the properties, books or records of the Company or any Subsidiary by any
Person or entity that informs the Board of Directors of the Company or such
Subsidiary that it is considering making, or has made, an Acquisition Proposal.
Such notice to MergerCo shall be made in writing, shall identify the offeror and
shall indicate whether the Company is providing or intends to provide the Person
making the Acquisition Proposal with access to information concerning the
Company as provided in Section 5.2(3). The Company shall also furnish to
MergerCo a written summary of the material terms and conditions of the
Acquisition Proposal.
(3) If the Board of Directors of the Company receives a request for
material nonpublic information by a person who makes a bona fide Acquisition
Proposal, and the Board of Directors determines in good faith and upon the
advice of
38
independent counsel that it is required to cause the Company to act as provided
in this Section 5.2(c) in order to not violate the directors' fiduciary duties,
then, provided the person making the Acquisition Proposal has executed a
confidentiality agreement substantially similar to the one then in effect
between the Company and MergerCo, the Company may provide such person with
access to information regarding the Company.
(4) The Company shall immediately cease and cause to be terminated any
existing discussions or negotiations with any persons (other than MergerCo)
conducted heretofore with respect to any of the foregoing. The Company agrees
not to release any such persons from the confidentiality provisions of any
confidentiality agreement to which the Company is a party.
ARTICLE 6
ADDITIONAL AGREEMENTS
SECTION 6.1 HSR Act. As promptly as practicable after the date of the
execution of this Agreement, the Company and Parent shall file notifications
under and in accordance with the HSR Act in connection with the Merger and the
transactions contemplated hereby and shall respond as promptly as practicable to
any inquiries received from the Federal Trade Commission (the "FTC") and the
Antitrust Division of the Department of Justice (the "Antitrust Division") for
additional information or documentation and to respond as promptly as
practicable to all inquiries and requests received from any State Attorney
General or other governmental authority in connection with antitrust matters.
SECTION 6.2 Stockholders' Meetings; Form S-4 and Proxy Statement.
(i) The Company acting through its Board of Directors, will, as
promptly as practicable following the date of effectiveness of the Form S-4
and in consultation with MergerCo, shall take all action necessary in
accordance with the DGCL and its Certificate of Incorporation and By-Laws
to (i) duly call, give notice of convene and hold a meeting of the Company
Stockholders for the purpose of voting upon the approval and adoption of
the Merger, this Agreement and the transactions contemplated hereby (the
"Stockholders' Meeting") and (ii) (A) subject to its fiduciary duties under
applicable law, include in the Proxy Statement the [unanimous]
recommenda-
39
tion of the Board of Directors that the stockholders of the Company vote in
favor of the approval of this Agreement and the transactions contemplated
hereby and the written opinion of the Company Financial Advisor that the
Merger Consideration to be received by the stockholders of the Company
pursuant to the Merger, is fair to such stockholders from a financial point
of view, (B) include along with the Proxy Statement a Form of Election, and
(C) use its best efforts to hold such meeting and obtain the necessary
approval of this Agreement and the transactions contemplated hereby by its
stockholders, as soon as practicable after the date hereof.
(ii) Promptly following the date of this Agreement, the Company shall
prepare the Proxy Statement, and the Company shall prepare and file with
the SEC the Form S-4, in which the Proxy Statement will be included. The
Company shall use its reasonable best efforts to have the Form S-4 declared
effective under the Securities Act as promptly as practicable after such
filing. The Company shall use its reasonable best efforts to cause the
Proxy Statement to be mailed to the Company's stockholders as promptly as
practicable after the Form S-4 is declared effective under the Securities
Act. The Company shall also take any action required to be taken under any
applicable state securities or "Blue Sky" laws in connection with the
registration and qualification in connection with the Merger of capital
stock of the Company following the Merger. MergerCo and the Company will
cooperate with each other in the preparation of the Proxy Statement and the
Form S-4; without limiting the generality of the foregoing, the Company
will immediately notify MergerCo of the receipt of any comments from the
SEC, the effectiveness of the Form S-4 and any request by the SEC for any
amendment to the Proxy Statement or the Form S-4 or for additional
information. All filings with the SEC, including the Proxy Statement and
the Form S-4 and any amendment thereto, and all mailings to the Company's
stockholders in connection with the Merger, including the Proxy Statement,
shall be subject to the prior review, comment and approval of MergerCo.
MergerCo will furnish to the Company all information reasonably requested
by the Company for inclusion in the Form S-4 and in the Proxy Statement.
The Company agrees to use its reasonable best efforts, after consultation
with MergerCo, to respond promptly to any comments made by the SEC with
respect to the Proxy Statement (and any preliminary version thereof filed
by it) and the Form S-4.
40
SECTION 6.3 Access to Information; Confidentiality. Upon reasonable
notice and subject to restrictions contained in confidentiality agreements to
which the Company is subject, the Company shall (and shall cause each of its
Subsidiaries to) afford to the officers, employees, accountants, counsel and
other representatives of, and financing sources for, MergerCo, reasonable
access, during the period to the Effective Time, to all its properties, offices
and facilities, books, contracts, commitments, records (financial and
otherwise), officers, directors, employees, accountants, counsel and other
representatives and agents, and, during such period, the Company shall (and
shall cause each of its Subsidiaries to) furnish promptly to the MergerCo all
information concerning its business, operations, properties, finances and
personnel as MergerCo may reasonably request, and shall make available to
MergerCo the appropriate individuals (including attorneys, accountants and other
professionals) for discussion of the any of the foregoing as MergerCo may
reasonably request. MergerCo shall keep such information confidential in
accordance with the terms of the confidentiality letter, dated March 24, 1998
(the "Confidentiality Letter"), between MergerCo and the Company.
SECTION 6.4 Indemnification and Insurance.
(1) The Company shall, to the fullest extent permitted under applicable
law or under the Company's Certificate of Incorporation or By-Laws and
regardless of whether the Merger becomes effective, indemnify and hold harmless,
and, after the Effective Time, the Surviving Corporation shall, to the fullest
extent permitted under applicable law, indemnify and hold harmless, each present
and former director, officer or employee of the Company or any of its
Subsidiaries (collectively, the "Indemnified Parties") against any costs or
expenses (including attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement in connection with any claim, action,
suit, proceeding or investigation, whether civil, criminal, administrative or
investigative, (x) arising out of or pertaining to the transactions contemplated
by this Agreement or (y) otherwise with respect to any acts or omissions
occurring at or prior to the Effective Time, to the same extent as provided in
the Company's Certificate of Incorporation or By-Laws or any applicable
indemnification agreement referred to in subparagraph (2) below. In the event of
any such claim, action, suit, proceeding or investigation (whether arising
before or after the Effective Time), (i) the Surviving Corporation shall pay the
reasonable fees and expenses of such counsel retained by the Indemnified Party,
promptly after reasonably sufficient statements therefore are received; provided
--------
that such payment shall be conditioned upon such officer's, director's,
employee's or agent's agreement promptly to return such amounts to the Company
if a court of competent jurisdiction
41
shall ultimately determine, and such determination shall have become final and
non-appealable, that indemnification of such officer or director in the manner
contemplated hereby is prohibited by applicable law, and (ii) the Surviving
Corporation will cooperate in the defense of any such matter; provided, however,
that the Surviving Corporation shall not be liable for any settlement effected
without its written consent (which consent shall not be unreasonably withheld).
(2) The Surviving Corporation shall honor and fulfill in all respects the
obligations of the Company pursuant to indemnification agreements which are
listed in Section 6.4(2)of the Company Disclosure Schedule with the Company's
directors and officers existing at or before the Effective Time, as they relate
to any actions or events occurring on or prior to the Effective Time.
(3) For a period of six years after the Effective Time, the Surviving
Corporation to maintain in effect, if available, directors' and officers'
liability insurance covering those persons who are currently covered by the
Company's directors' and officers' liability insurance policy (a copy of which
has been made available to MergerCo) on terms comparable to, or better than,
those now applicable to directors and officers of the Company; provided that (i)
--------
the Company following the Merger shall not be required to spend in excess of an
amount equal to 150% of the 1997 annual premium therefor; provided further that
-------- -------
if the Company following the Merger would be required to spend in excess of a
such amount per annum to obtain insurance having the maximum available coverage
under the current policies, the Company will be required to spend such amount
per annum to maintain or procure insurance coverage pursuant hereto, subject to
availability of such (or similar) coverage and (ii) such policies may in the
sole discretion of the Company be one or more "tail" policies for all or any
portion of the full six year period.
(4) This Section shall survive the consummation of the Merger at the
Effective Time, is intended to benefit the Company, the Surviving Corporation
and the Indemnified Parties, shall be binding on all successors and assigns of
the Surviving Corporation and shall be enforceable by the Indemnified Parties.
(5) If the Surviving Corporation or any of its successors or assigns
transfers all or substantially all of its properties and assets to any person
during the six-year period following the Effective Time, 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 6.4 or a
"tail" policy is purchased to meet the obligation to provide insurance
hereunder.
42
SECTION 6.5 Notification of Certain Matters. The Company shall give
prompt notice to MergerCo, and MergerCo 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 in this Agreement to become materially untrue or inaccurate, or (ii)
any failure of the Company or MergerCo, as the case may be, materially 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 shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice.
SECTION 6.6 Further Action.
(1) Upon the terms and subject to the conditions hereof each of the
parties hereto shall use all reasonable efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all other things necessary, proper
or advisable to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement, including but not limited to (i)
cooperation in the preparation and filing of the Form S-4, the Proxy Statement,
any required filings under the HSR Act or other similar laws, and any amendments
to any thereof, (ii) determining whether any filings are required to be made or
consents, approvals, waivers, licenses, permits or authorizations are required
to be obtained (or, which if not obtained, would result in an event of default,
termination, amendment, alteration or acceleration of any agreement or any put
right under any agreement) under any applicable law or regulation or from any
Governmental Entities or third parties, including parties to loan agreements or
other debt instruments, in connection with the transactions contemplated by this
Agreement, and (iii) promptly furnishing information required in connection
therewith and timely seeking to obtain in a timely manner all necessary waivers,
consents and approvals and to effect all necessary registrations and filings,
and otherwise to satisfy or cause to be satisfied all conditions precedent to
its obligations under this Agreement. The Company shall not take any action to
restrict, limit or prohibit MergerCo's ability to exercise all of its rights and
obligations under the Voting Agreement, and the Company and its Board of
Directors has provided and shall provide and maintain all approvals required
under Section 203 of the DGCL in order to permit such exercise.
(2) Each of the parties agrees to cooperate with each other in taking, or
causing to be taken, all actions necessary to delist the Common Shares from The
New
43
York Stock Exchange, Inc., provided that such delisting shall not be effective
--------
until after the Effective Time. The parties also acknowledge that it is
MergerCo's intent that the retained Common Shares following the Merger will not
be listed on any national securities exchange or quoted on The NASDAQ Stock
Market Inc.'s National Market.
(3) The Company agrees to provide, and will cause its Subsidiaries and its
and their respective officers, employees and advisors to provide, all necessary
cooperation in connection with the arrangement of any financing to be
consummated contemporaneous with or at or after the Closing in respect of the
transactions contemplated by this Agreement, including without limitation,
participation in meetings, due diligence sessions, road shows, the preparation
of offering memoranda, private placement memoranda, prospectuses and similar
documents, the execution and delivery of any commitment letters, underwriting or
placement agreements, pledge and security documents, other definitive financing
documents, or other requested certificates or documents, including a certificate
of the chief financial officer of the Company with respect to solvency matters,
comfort letters of accountants and legal opinions as may be requested by
MergerCo or its sources of financing. In addition, in conjunction with the
obtaining of any such financing, the Company agrees, at the request of MergerCo,
to call for prepayment or redemption, to prepay, redeem, repurchase, defease
and/or renegotiate, or to solicit consents from holders of and modify, as the
case may be, any then existing indebtedness or equipment leases of the Company
and its Subsidiaries; provided that no such prepayment, redemption, repurchase,
--------
defeasance, renegotiation or modification shall themselves actually be made
effective until immediately prior to, contemporaneous with or after the
Effective Time.
(4) The Company shall cooperate with any reasonable requests of MergerCo
or the SEC related to the recording of the Merger as a recapitalization for
financial reporting purposes, including, without limitation, to assist MergerCo
and its affiliates and representatives with any presentation to the SEC with
regard to such recording and to include appropriate disclosure with regard to
such recording in all filings with the SEC and all mailings to stockholders made
in connection with the Merger. In furtherance of the foregoing, the Company
shall provide to MergerCo, and MergerCo shall provide to the Company, for the
prior review of MergerCo's and the Company's advisors, any description of the
transactions contemplated by this Agreement which is meant to be disseminated.
44
(5) In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and directors of each party to this Agreement shall use their
reasonable best efforts to take all such necessary action.
SECTION 6.7 Disposition of Litigation. Each of the Company and MergerCo
shall give the other party reasonable opportunity to participate in the defense
of any third party action seeking to restrain or prohibit or otherwise oppose
the Merger.
SECTION 6.8 Affiliates. Prior to the Closing Date, the Company shall
deliver to MergerCo a letter identifying all persons who are, at the time this
Agreement is submitted for approval to the stockholders of the Company,
"affiliates" of the Company for purposes of Rule 145 under the Securities Act.
The Company shall use its reasonable best efforts to cause each such person who
retains Common Shares to deliver to MergerCo on or prior to the Closing Date a
written agreement substantially in the form attached as Annex A hereto.
SECTION 6.9 Stop Transfer Order. The Company shall notify the Company's
transfer agent that there is a stop transfer order with respect to all of the
Subject Shares (as defined in the Voting Agreement) and that the Voting
Agreement places limits on the voting of the Subject Shares.
SECTION 6.10 Public Announcements. Prior to the Effective Time, the
Company and MergerCo agree to consult with each other prior to issuing or
causing the publication of and provide each other the opportunity to review and
comment upon any press release or other announcement with respect to the Offer,
the Merger or this Agreement, and none of them shall issue or publish any such
press release or other announcement prior, except as may be required by law. The
parties agree that the initial press release or releases to be issued with
respect to the transactions contemplated by this Agreement shall be mutually
agreed upon prior to the issuance thereof.
SECTION 6.11 Retention Bonus Plan. Following the execution of this
Agreement, the Company shall, if requested by MergerCo, implement an appropriate
retention bonus plan on terms mutually agreeable to the Company and
MergerCo.Retention Bonus Plan. Following the execution of this Agreement, the
Company shall, if requested by MergerCo, implement an appropriate retention
bonus plan on terms mutually agreeable to the Company and MergerCo.
SECTION 6.12 Company Financial Information. The Company shall furnish to
MergerCo the following financial information (all to be prepared in accordance
with generally accepted accounting principles consistently applied):
45
(a) as soon as available but in any event within 30 days of each calendar
month, the unaudited consolidated balance sheets and statements of income
statements and cash flows of the Company, showing its financial condition as of
the close of such month and the results of operations during such month and for
the then elapsed portion of the Company's fiscal year, in each case, setting
forth the comparative figures for the corresponding month in the prior fiscal
year and the corresponding elapsed portion of the prior fiscal year; and
(b) all documents filed with or submitted to the SEC by the Company
simultaneously with such filing or submission.
SECTION 6.13 Registration Rights Agreement. Prior to the Effective Time,
the Company shall execute and deliver to the Investors in MergerCo a
registration rights agreement in a form mutually acceptable to Investors and the
Company, such agreement to provide the Investors with six demand registration
rights and unlimited piggyback and S-3 registration rights for its Common
Shares, all subject to customary terms and provisions.
Management Agreement. On or prior to the Effective Time, the Company, at the
request of MergerCo, shall enter into a management agreement with Apollo
Management IV, LP (or an affiliate thereof) pursuant to which the Company shall
agree to pay an annual management fee of $1,000,000 and agree to continue to
receive financial advisory services from Apollo Management IV, LP and its
designees on an ongoing basis with compensation to be determined, all on terms
reasonably satisfactory to MergerCo.
SECTION 6.15 Employee Plans.
(1) The Surviving Company shall honor, following the Effective Time, the
terms of the Economic Incentive Plan (the "Incentive Plan") as in effect on the
date hereof, with respect to all bonuses payable with respect to fiscal year
1998, except that, notwithstanding anything to the contrary in the Incentive
Plan, any employee whose employment is terminated by the Company following the
Effective Time shall not affect an employee's entitlement to receive the full or
a pro rated portion of his/her bonus based on the number of days in fiscal 1998
during which such employee was employed by the Company in 1998. Prior to the
Effective Time, the Company may amend the Incentive Plan to be consistent with
the terms of this Section 6.15. Each
46
employee who is a participant in the Incentive Plan shall be a third party
beneficiary of this Section.
(2) The Surviving Corporation shall make a profit-sharing contribution to
the Company's 401(k) Savings and Retirement Plan (the "Savings Plan") as
described in Article VI of such plan with respect to the plan year ended
September 30, 1998 at a level consistent with recent past practice, such
contribution to be allocated among all otherwise eligible active participants in
the Savings Plan who are employed by the Company or any of its Subsidiaries as
of the Effective Time or whose employment is terminated by the Company or its
Subsidiaries during such plan year on or after attainment of age 55 or because
of death or "physical or mental disability" (as defined in Section 6.9 of the
Savings Plan) in proportion to their relative Compensation (as defined in the
Savings Plan) for such plan year and regardless of whether such employees are
employed on the last day of such plan year. Prior to the Effective Time,
notwithstanding anything to the contrary herein, the Company may amend the
Savings Plan consistent with this Section 6.15(2); provided that the Company
shall provide MergerCo with an opportunity to review and comment on any such
amendment.
ARTICLE 7
CONDITIONS TO THE MERGER
SECTION 7.1 Conditions to Obligation of each Party to Effect the Merger.
The respective obligations of each party to effect the Merger shall be subject
to the satisfaction at or prior to the Effective Time of the following
conditions:
(1) Stockholder Approval. The Company Stockholder Approval shall have
been obtained.
(2) HSR Act. The waiting period (and any extension thereof) applicable to
the Merger under the HSR Act shall have been terminated or shall have expired.
(3) Form S-4. To the extent required by applicable law, the Form S-4
shall have become effective under the Securities Act and shall not be the
subject of any stop order or proceedings seeking a stop order, and any material
"Blue Sky" and other state securities laws applicable to the registration and
qualification of the retained Common Shares following the Merger shall have been
complied with.
47
(4) No Injunctions or Restraints; Illegality. No preliminary or permanent
injunction or other order by any court of competent jurisdiction which prevents
the consummation of the Merger shall have been issued and remain in effect (each
party agreeing to use its reasonable best efforts to have any such injunction
lifted; it being understood that such efforts shall not include the divestiture
of any business or the material modification of existing business practices);
(5) Governmental Actions. No action shall have been taken nor any
statute, rule or regulation shall have been enacted by any Government Entity
that makes the consummation of the Merger or the transactions contemplated
hereby illegal; and
(6) Solvency Letters. Each of the Board of Directors of the Company and
MergerCo shall have received a copy of a solvency letter addressed to it, in
form and substance and from an independent evaluation firm reasonably
satisfactory to it, as to the solvency of the Company and its Subsidiaries on a
consolidated basis after giving effect to the transactions contemplated by this
Agreement, including all financings contemplated hereby.
SECTION 7.2 Additional Conditions to Obligations of MergerCo. The
obligation of MergerCo to effect the Merger is further subject to the
satisfaction or waiver at or prior to the Effective Time of the following
conditions:
(1) Representations and Warranties. The representations and warranties of
the Company set forth in this Agreement shall be true and correct (i) in all
respects in the case of a representation or warranty qualified by a Material
Adverse Effect or (ii) in all material respects in the case of a representation
or warranty not so qualified by a Material Adverse Effect, in each case as of
the date of this Agreement (except where such representation is made as of a a
certain date, which shall be true as of such date) and as of the Effective Time
as though made on and as of the Effective Time.
(2) Performance of Obligations of the Company. The Company shall have
performed the obligations required to be performed by it under this Agreement at
or prior to the Effective Time, except for such failures to perform as have not
had or would not, individually or in the aggregate, have a Material Adverse
Effect or materially adversely affect the ability of the Company to consummate
the transactions contemplated hereby.
48
(3) Receipt of Certificate. MergerCo shall have received a certificate
signed on behalf of the Company by a senior executive officer of the Company to
the effect set forth in subparagraphs (1) and (2) above.
(4) Consents, Etc. MergerCo shall have received evidence, in form and
substance reasonably satisfactory to it, that such licenses, permits, consents,
approvals, authorizations, qualifications and orders of Governmental Entities
and other third parties (including outstanding indebtedness) as are necessary in
connection with the transactions contemplated hereby have been obtained, except
where the failure to obtain such licenses, permits, consents, approvals,
authorizations, qualifications and orders (other than with respect to foreign
antitrust or other similar laws) do not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(5) No Material Litigation. There shall not be pending by any
Governmental Entity any suit, action or proceeding (or by any other person any
suit, action or proceeding which has a reasonable likelihood of success) (i)
challenging or seeking to restrain or prohibit the consummation of the Merger or
any of the other transactions contemplated by this Agreement or the Voting
Agreement or seeking to obtain from MergerCo, the Company or any of their
respective Subsidiaries or affiliates any damages that are material to any such
party (taken as a whole in the case of the Company and its Subsidiaries), (ii)
seeking to prohibit or limit the ownership or operation by MergerCo or its
investors of the Company or any material portion of the business or assets of
the Company and its Subsidiaries taken as a whole, (iii) seeking to impose
limitations on the ability of the investors of MergerCo to acquire or hold, or
exercise full rights of ownership of, any shares of Common Shares, including,
without limitation, the right to vote the Common Shares on all matters properly
presented to the stockholders of the Company or (iv) seeking to prohibit
MergerCo or any of its Affiliates from effectively controlling in any material
respect or any material portion of the business, properties, assets or
operations of the Company and its Subsidiaries taken as a whole.
(6) Affiliate Letters. MergerCo shall have received the agreements
referred to in Section 6.8.
(7) Financing. The Company shall have received the proceeds of financing
on terms and conditions set forth in the Commitment Letters or upon terms and
conditions which are substantially equivalent thereto, and to the extent that
any of the
49
terms and conditions are not set forth in the Commitment Letters on terms and
conditions reasonably satisfactory to MergerCo.
(8) Recapitalization Accounting. MergerCo shall be reasonably satisfied
that the Merger shall be recorded as a recapitalization for financial reporting
purposes (provided that if MergerCo is advised that the SEC finally determines
--------
that recapitalization treatment will not be available, MergerCo will advise the
Company within 30 days of receipt of such final determination whether it intends
to waive such condition and if it advises the Company that it has determined not
to so waive, the Company may terminate this Agreement pursuant to Section 8.1(3)
as if the date of such advice from MergerCo was deemed to be November 30, 1998
for purposes of Section 8.1(3)).
(9) The execution of this Agreement and consummation of the Merger will
not require compliance by any of the parties to this transaction with the New
Jersey Industrial Site Recovery Act, N.J.S.A. 13 1K-6 et seq. or, if compliance
is so required, such compliance shall have occurred prior to the Effective Time.
SECTION 7.3 Additional Conditions to Obligations of the Company. The
obligation of the Company to effect the Merger is further subject to the
satisfaction or waiver at or prior to the Effective Time of the following
conditions:
(1) Representations and Warranties. The representations and warranties of
MergerCo set forth in this Agreement that are qualified as to materiality shall
be true and correct and any such representations and warranties of MergerCo set
forth in this Agreement that are not so qualified shall be true and correct in
all material respects, in each case as of the date of this Agreement and as of
the Effective Time as though made at and as of the Effective Time.
(2) Performance of Obligations of MergerCo. MergerCo shall have performed
the obligations required to be performed by it under this Agreement at or prior
to the Effective Time in all material respects.
(3) Receipt of Certificates. The Company shall have received a
certificate signed on behalf of MergerCo by a senior executive officer of
MergerCo to the effect set forth in subparagraph (1) and (2) above.
50
ARTICLE 8
TERMINATION
SECTION 8.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, notwithstanding approval thereof by the
stockholders of the Company or MergerCo:
(1) by mutual written consent duly authorized by the Boards of Directors
of MergerCo and the Company;
(2) by either the MergerCo or the Company if any Governmental Entity shall
have issued an order, decree or ruling or taken any other action (which order,
decree, ruling or other action the parties hereto shall use their respective
reasonable efforts to lift), in each case permanently restraining, enjoining or
otherwise prohibiting the Merger or transactions contemplated by this Agreement
or prohibiting MergerCo to acquire or hold or exercise rights of ownership of
the Shares (including under the Voting Agreement) and such order, decree, ruling
or other action shall have become final and non-appealable;
(3) by either MergerCo or the Company if the Merger shall not have been
consummated on or before November 30, 1998, provided that the right to terminate
--------
this Agreement under this Section 8.1(3) shall not be available to the party
whose action or failure to act has been the cause of or resulted in the failure
of the Merger to occur on or before such date where such action or failure to
act constitutes a breach of this Agreement;
(4) by MergerCo if any required approval of the stockholders of the
Company shall not have been obtained by reason of the failure to obtain the
required vote upon a vote held at a duly held meeting of stockholders or at any
adjournment thereof;
(5) by MergerCo, if the Company shall have (i) withdrawn, modified or
amended in any respect adverse to MergerCo its approval or recommendation of
this Agreement or any of the transactions contemplated herein, (ii) failed to
include in the Proxy Statement mailed to its stockholders such recommendation,
(iii) recommended any Acquisition Proposal from a person other than MergerCo or
any of its affiliates or (iv) resolved to do any of the foregoing;
51
(6) by the Company if, prior to receipt of the Company Stockholder
Approval, the Board of Directors of the Company approves any transaction
relating to an Acquisition Proposal, on terms which the Board of Directors of
the Company has determined in good faith (i) to be more favorable to the Company
and its stockholders than the transactions contemplated by this Agreement and
(ii) based upon the advice of its outside counsel, that failing to approve such
Acquisition Proposal and terminate this Agreement would constitute a breach of
the fiduciary duties of the Board of Directors of the Company under applicable
law; provided that the termination described in this Section 8.1(5) shall not be
--------
permissible unless and until (i) the Company shall have provided MergerCo prior
written notice at least three business days prior to such termination that the
Board of Directors of the Company has authorized and intends to effect the
termination of this Agreement pursuant to this Section 8.1(5), (ii) the Company
shall otherwise be in compliance in all material respects with its obligations
under this Agreement, and (iii) on or prior to such termination the Company
shall have paid to MergerCo the fee described in Section 8.3(1);or
(7) by MergerCo, if the Company shall have breached its representations
and warranties or the agreements and covenants to be performed by it and such
breach is incapable of being cured or not cured within 20 days of receipt of
written notice thereof from MergerCo.
SECTION 8.2 Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 8.1, this Agreement shall forthwith become
void and there shall be no liability on the part of any party hereto or any of
its affiliates, directors, officers or stockholders except (i) as set forth in
this Section 8.2, Section 8.3 and 9.8 hereof, and (ii) nothing herein shall
relieve any party from liability for any breach hereof.
SECTION 8.3 Fees and Expenses.
(1) In the event that this Agreement is terminated pursuant to Section
8.1(4) (provided that the Company has received an Acquisition Proposal that has
been publicly announced or publicly known prior thereto), 8.1(5) , 8.1(6) or
8.1(7) (provided that the Company has received an Acquisition Proposal that has
been publicly announced or publicly known prior thereto) hereof, then the
Company shall, with respect to Section 8.1(4), 8.1(5) and 8.1(7), within one
business day of termination and with respect to Section 8.1(6), prior to such
termination, pay to the Investors, as
52
designated by MergerCo, a termination fee of $35 million, plus reimbursement of
all reasonable out-of-pocket expenses and fees (but not in excess of $5
million).
(2) In addition to any other amounts which may be payable or become
payable pursuant to Section 8.3(4), the Company shall (provided that MergerCo is
not then in breach of its representations, warranties, covenants or other
obligations under this Agreement), promptly following termination of this
Agreement pursuant to Section 8.1(3) (other than as a result of a failure of the
conditions set forth in Section 7.2(8)) or Section 8.1(7) but in no event later
than two business days following a written request by MergerCo therefor,
together with related bills or receipts, reimburse MergerCo and its Affiliates,
for all reasonable out-of-pocket expenses and fees (but not in excess of $5
million) (including, without limitation, fees payable to all banks, investment
banking firms and other financial institutions, and their respective agents and
counsel, and all fees of counsel, accountants, financial printers, experts and
consultants to MergerCo and its affiliates), whether incurred prior to, on or
after the date hereof, in connection with the Merger and the consummation of all
transactions contemplated by this Agreement and the financing thereof.
(3) If the Merger shall be consummated in accordance with this Agreement,
then the Surviving Corporation following the Merger shall pay to Apollo Advisors
IV, L.P. or any designee, on the Closing Date, a fee of $12.5 million in cash,
for arranging the transactions contemplated by this Agreement (including the
financings thereof), which amount shall be payable in same day funds. No amount
payable pursuant to any of the other provisions of this Section 8.3 shall reduce
the amount of the foregoing fee payable pursuant to this subsection 8.3(3).
(4) Except as provided in subsections 8.3(2) and (3) above, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses, whether
or not the Merger is consummated; it being understood, however, that, as of the
Effective Time, all expenses of MergerCo, the Investors and their respective
Affiliates incurred in connection with the transactions contemplated hereby
shall be deemed to be expenses of the Company. As of the Effective Time, the
Company shall assume all agreements between MergerCo, the Investors or their
respective Affiliates and third parties relating to the financing of the
transactions contemplated hereby and shall indemnify and hold harmless the
Investors and their Affiliates with respect to all obligations thereunder.
53
(5) In addition to any other amounts which may be payable or become
payable pursuant to Section 8.3(4), in the event of the termination of this
Agreement pursuant to Section 8.1(7) and the receipt of an Acquisition Proposal
within 90 days after the date of such termination, the Company shall pay to the
Investors, within two business days after the receipt of the Acquisition
Proposals, the Termination Fee.
ARTICLE 9
GENERAL PROVISIONS
SECTION 9.1 Nonsurvival of Representations, Warranties and Agreements. The
representations and warranties in this Agreement shall terminate at the
Effective Time or the termination of this Agreement pursuant to Section 8.1, as
the case may be. The covenants and agreements contained in this Agreement shall
survive the Effective Time or termination of this Agreement, as the case may be,
and shall continue until they terminate in accordance with their terms.
SECTION 9.2 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made if and when delivered personally or by overnight courier to the parties
at the following addresses or sent by electronic transmission, with confirmation
received, to the telecopy numbers specified below (or at such other address or
telecopy number for a party as shall be specified by like notice):
(1) If to MergerCo:
Apollo Management IV, L.P.
1301 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
54
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
and
Atlas Capital Partners
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
(2) If to the Company:
XTRA Corporation
Xxxxxx X. Xxxxxxxxxx
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Chief Counsel and Secretary
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Fine, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
55
SECTION 9.3 Certain Definitions. For purposes of this Agreement, the
term:
(1) "Affiliate" means a Person that directly or indirectly, through one or
more intermediaries, controls, is controlled by, or is under common control
with, the first mentioned Person; including, without limitation, any partnership
or joint venture in which the first mentioned Person (either alone, or through
or together with any other Subsidiary) has, directly or indirectly, an interest
of 5% or more;
(2) "Beneficial Owner" with respect to any shares of Common Shares means a
person who shall be deemed to be the beneficial owner of such shares (i) which
such person or any of its affiliates or associates (as such term is defined in
Rule 12b-2 of the Exchange Act) beneficially owns, directly or indirectly, (ii)
which such person or any of its affiliates or associates has, directly or
indirectly, (A) the right to acquire (whether such right is exercisable
immediately or subject only to the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion rights, exchange
rights, warrants or options, or otherwise, or (B) the right to vote pursuant to
any agreement, arrangement or understanding, or (iii) which are beneficially
owned, directly or indirectly, by any other persons with whom such person or any
of its affiliates or associates has any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of any shares;
(3) "Business Day" means any day other than a day on which banks in The
Commonwealth of Massachusetts or the State of New York are required or
authorized to be closed;
(4) "Control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the management or
policies of a person, whether through the ownership of stock, as trustee or
executor, by contract or credit arrangement or otherwise;
(5) "Company Disclosure Schedule" means the disclosure schedule referred
to in heading of Article 3 of the Agreement and which is attached hereto and the
specific disclosures made herein shall be deemed to qualify and amend the
representations and warranties contained in Article 3 of the Agreement to which
the disclosures make reference to or reference is apparent on its face and shall
be read for all purposes together with such representations and warranties.
56
(6) "Generally accepted accounting principles" shall mean the generally
accepted accounting principles set forth in the opinions and pronouncements of
the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession in the United
States applied on a consistent basis.
(7) "Material Adverse Effect" when used in this Agreement in connection
with the Company or any of its Subsidiaries means any change or effect that,
either individually or in the aggregate is or is likely to be materially adverse
to the business, assets, liabilities, financial condition or results of
operations of the Company and its Subsidiaries taken as a whole other than any
such changes or effects affecting generally the industry in which the Company
and its Subsidiaries compete and general economic conditions.
(8) "Person" means an individual, corporation, partnership, association,
trust, unincorporated organization, other entity or group (as defined in Section
13(d)(3) of the Exchange Act); and
(9) "Subsidiary" or "Subsidiaries" of the Company, MergerCo or any other
Person means any corporation, partnership, joint venture or other legal entity
of which the Company, the Surviving Corporation, MergerCo or such other person,
as the case may be (either alone or through or together with any other
subsidiary), owns, directly or indirectly, more than 50% of the stock or other
equity interests the holders of which are generally entitled to vote for the
election of the board of directors or other governing body of such corporation
or other legal entity.
(10) "Transactions contemplated hereby," "transactions contemplated by this
Agreement" and other similar references shall include the Merger and all other
actions and transactions contemplated by this Agreement and the Voting
Agreements.
SECTION 9.4 Waiver and Amendment. Any provision of this Agreement may be
waived at any time by the party that is, or whose stockholders are, entitled to
the benefits thereof. This Agreement may be amended or supplemented at any
time, except that after approval hereof by the stockholders of the Company, no
amendment shall be made which decreases the Merger Consideration or that in any
other way materially adversely affects the rights of such stockholders (other
than a termination of this Agreement) without the further approval of such
stockholders. No such
57
waiver, amendment or supplement shall be effective unless in writing and signed
by the party or parties intended to be bound thereby.
SECTION 9.5 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.6 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the fullest extent
possible.
SECTION 9.7 Entire Agreement; Assignment. This Agreement constitutes the
entire agreement and supersedes all prior agreements and undertakings (other
than the Confidentiality Letters), both written and oral, among the parties, or
any of them, with respect to the subject matter hereof. This Agreement shall not
be assigned by operation of law or otherwise.
SECTION 9.8 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement, including, without limitation, by way of subrogation, other than
Section 6.4 (which is intended to be for the benefit of the Indemnified Parties
and may be enforced by such Indemnified Parties) and Section 6.15(a) (which is
intended to be for the benefit of employees of the Company whose employment has
been terminated prior to the Effective Time and who are entitled to participate
in the Incentive Plan and may be enforced by them).
SECTION 9.9 Failure or Indulgence Not Waiver, Remedies Cumulative. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or
58
partial exercise of any such right preclude any other or further exercise
thereof or of any other right. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
SECTION 9.10 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Delaware
applicable to contracts executed and fully performed within the State of
Delaware.
SECTION 9.11 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
SECTION 9.12 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
IN WITNESS WHEREOF, MergerCo and the Company have caused this Agreement to
be executed as of the date first written above by their respective officers
thereunto duly authorized.
WHEELS MERGERCO LLC
By: /s/ Xxxxxx Xxxxxx
------------------------------------
Name: Xxxxxx Xxxxxx
Title: Manager
XTRA CORPORATION
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President and Chief
Financial Officer
59
EXHIBIT A
---------
CERTIFICATE OF INCORPORATION
OF
XTRA CORPORATION
FIRST: The name of the Corporation is XTRA Corporation (hereinafter
-----
the "Corporation").
SECOND: The address of the registered office of the Corporation in
------
the State of Delaware is 0000 Xxxxxx Xxxxxx, in the City of Wilmington, County
of New Castle. The name of its registered agent at that address is The
Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act
-----
or activity for which a corporation may be organized under the General
Corporation Law of the State of Delaware as set forth in Title 8 of the Delaware
Code (the "GCL").
FOURTH: The total number of shares of stock which the Corporation
------
shall have authority to issue is 5,500,000 shares of Common Stock, each having
a par value of one xxxxx ($.01).
FIFTH: The following provisions are inserted for the management of
-----
the business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
(1) The business and affairs of the Corporation shall be managed by
or under the direction of the Board of Directors.
(2) The directors shall have concurrent power with the stockholders
to make, alter, amend, change, add to or repeal the By-Laws of the
Corporation.
(3) The number of directors of the Corporation shall be as from time
to time fixed by, or in the manner provided in, the By-Laws of the
Corporation. Election of directors need not be by written ballot unless the
By-Laws so provide.
(4) No director shall be personally liable to the Corporation or any
of its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) pursuant to Section 174 of the GCL or (iv) for any
transaction from which the director derived an improper personal benefit.
Any repeal or modification of this Article FIFTH by the stockholders of the
Corporation shall not adversely affect any right or protection of a director
of the Corporation existing at the time of such repeal or modification with
respect to acts or omissions occurring prior to such repeal or modification.
(5) In addition to the powers and authority hereinbefore or by
statute expressly conferred upon them, the directors are hereby empowered to
exercise all such powers and do all such acts and things as may be exercised
or done by the Corporation, subject, nevertheless, to the provisions of the
GCL, this Certificate of Incorporation, and any By-Laws adopted by the
stockholders; provided, however, that no By-Laws hereafter adopted by the
stockholders shall invalidate any prior act of the directors which would
have been valid if such By-Laws had not been adopted.
(6) The Corporation shall, to the maximum extent permitted from time
to time under the law of the State of Delaware, indemnify and upon request
shall advance expenses to any person who is or was a party or is threatened
to be made a party to any threatened, pending or completed action, suit,
proceeding or claim, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was or has agreed to be
a director or officer of this Corporation or while a director or officer is
or was serving at the request of the Corporation as a director, officer,
partner, trustee, employee or agent of any corporation, partnership, joint
venture, trust or other enterprise, including service with respect to
employee benefit plans, against expenses
2
(including attorneys' fees and expenses), judgments, fines, penalties and
amounts paid in settlement incurred in connection with the investigation,
preparation to defend or defense of such action, suit, proceeding or claim;
provided, however, that the foregoing shall not require the Corporation to
-------- -------
indemnify or advance expenses to any person in connection with any action,
suit, proceeding, claim or counterclaim initiated by or on behalf of such
person. Such indemnification shall not be exclusive of other
indemnification rights arising under any by-law, agreement, vote of
directors or stockholders or otherwise and shall inure to the benefit of
the heirs and legal representatives of such person. Any repeal or
modification of the foregoing provisions of this Section 6 shall not
adversely affect any right or protection of a director or officer of the
Corporation existing at the time of such repeal or modification.
SIXTH: Meetings of stockholders may be held within or without the
-----
State of Delaware, as the By-Laws may provide. The books of the Corporation may
be kept (subject to any provision contained in the GCL) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the By-Laws of the Corporation.
SEVENTH: The Corporation reserves the right to amend, alter, change
-------
or repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
3
ANNEX A
FORM OF AFFILIATE LETTER
Gentlemen:
The undersigned, a holder of shares of common stock, par value $.50 per
share ("Company Shares"), of XTRA Corporation, a Delaware corporation (the
"Company"), is entitled to retain and receive in connection with the merger (the
"Merger") of the Company with Wheels MergerCo LLC, a Delaware limited liability
company ("MergerCo"), securities (collectively, the "Securities") of the
Company. The undersigned acknowledges that the undersigned may be deemed an
"affiliate" of the Company within the meaning of Rule 145 ("Rule 145")
promulgated under the Securities Act of 1933 (the "Act"), although nothing
contained herein should be construed as an admission of such fact.
If the undersigned were an affiliate under the Act, the undersigned's
ability to sell, assign or transfer the Securities retained by the undersigned
pursuant to the Merger may be restricted unless such transaction is registered
under the Act or an exemption from such registration is available. The
undersigned understands that such exemptions are limited and the undersigned has
obtained advice of counsel as to the nature and conditions of such exemptions,
including information with respect to the applicability to the sale of such
securities of Rules 144 and 145(d) promulgated under the Act.
The undersigned hereby represents to and covenants with the Company that
the undersigned will not sell, assign or transfer any of the Securities retained
by the undersigned pursuant to the Merger except (i) pursuant to an effective
registration statement under the Act, (ii) in conformity with the volume and
other limitations of Rule 145 or (iii) in a transaction which, in the opinion of
independent counsel reasonably satisfactory to the Company or as described in a
"no-action" or interpretive letter from the Staff of the Securities and Exchange
Commission (the "SEC"), is not required to be registered under the Act.
In the event of a sale or other disposition by the undersigned of
Securities pursuant to Rule 145, the undersigned will supply the Company with
evidence of compliance with such Rule, in the form of a letter in the form of
Annex I hereto.
The undersigned understands that the Company may instruct its transfer
agent to withhold the transfer of any Securities disposed of by the undersigned,
but that upon receipt of such evidence of compliance the transfer agent shall
effectuate the transfer of the Securities sold as indicated in the letter.
The undersigned acknowledges and agrees that appropriate legends will be
placed on certificates representing Securities retained by the undersigned in
the Merger or held by a transferee thereof, which legends will be removed by
delivery of substitute certificates upon receipt of an opinion in form and
substance reasonably satisfactory to the Company from independent counsel
reasonably satisfactory to the Company to the effect that such legends are no
longer required for purposes of the Act.
The undersigned acknowledges that (i) the undersigned has carefully read
this letter and understands the requirements hereof and the limitations imposed
upon the distribution, sale, transfer or other disposition of Securities and
(ii) the receipt by MergerCo of this letter is an inducement and a condition to
MergerCo's obligations to consummate the Merger.
Very truly yours,
Dated:
2
