Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
by and among
BERKSHIRE HATHAWAY INC.
BX MERGER SUB INC.
and
XTRA CORPORATION
July 30, 2001
TABLE OF CONTENTS
ARTICLE I
THE OFFER AND MERGER
PAGE
Section 1.1 The Offer................................................................... 1
Section 1.2 Company Actions............................................................. 3
Section 1.3 Directors................................................................... 5
Section 1.4 The Merger.................................................................. 6
Section 1.5 Effective Time.............................................................. 6
Section 1.6 Closing..................................................................... 7
Section 1.7 Directors and Officers of the Surviving Corporation......................... 7
Section 1.8 Stockholders' Meeting....................................................... 7
Section 1.9 Merger Without Meeting of Stockholders...................................... 7
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock................................................. 8
Section 2.2 Exchange of Certificates.................................................... 8
Section 2.3 Dissenting Shares........................................................... 10
Section 2.4 Company Option Plans........................................................ 10
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1 Corporate Organization...................................................... 11
Section 3.2 Capitalization.............................................................. 12
Section 3.3 Authority................................................................... 13
Section 3.4 Consents and Approvals; No Violations....................................... 13
Section 3.5 SEC Documents; Undisclosed Liabilities...................................... 14
Section 3.6 Broker's Fees............................................................... 15
Section 3.7 Absence of Certain Changes or Events........................................ 15
Section 3.8 Legal Proceedings........................................................... 15
Section 3.9 Compliance with Applicable Law.............................................. 15
Section 3.10 Company Information......................................................... 16
Section 3.11 Employee Matters............................................................ 16
Section 3.12 Environmental Matters....................................................... 17
Section 3.13 Takeover Statutes........................................................... 17
Section 3.14 Properties.................................................................. 17
Section 3.15 Tax Returns and Tax Payments................................................ 18
Section 3.16 Intellectual Property....................................................... 19
Section 3.17 Identified Agreements....................................................... 19
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Section 4.1 Corporate Organization...................................................... 19
Section 4.2 Authority................................................................... 19
(i)
TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 4.3 Consents and Approvals; No Violation........................................ 20
Section 4.4 Broker's Fees............................................................... 20
Section 4.5 Purchaser's Operation and Capitalization.................................... 20
Section 4.6 Parent or Purchaser Information............................................. 21
Section 4.7 Financing................................................................... 21
Section 4.8 Stock Ownership............................................................. 21
ARTICLE V
COVENANTS
Section 5.1 Conduct of Businesses Prior to the Effective Time........................... 21
Section 5.2 No Solicitation............................................................. 23
Section 5.3 Publicity................................................................... 25
Section 5.4 Notification of Certain Matters............................................. 25
Section 5.5 Access to Information....................................................... 26
Section 5.6 Further Assurances.......................................................... 26
Section 5.7 Indemnification............................................................. 27
Section 5.8 Employee Benefit Plans...................................................... 28
Section 5.9 Additional Agreements....................................................... 28
ARTICLE VI
CONDITIONS TO THE MERGER
Section 6.1 Conditions to Each Party's Obligation To Effect the Merger.................. 28
Section 6.2 Conditions to Obligations of Parent and Purchaser to Effect the Merger...... 29
Section 6.3 Frustration of Closing Conditions........................................... 29
ARTICLE VII
TERMINATION
Section 7.1 Termination................................................................. 29
Section 7.2 Effect of Termination....................................................... 31
Section 7.3 Termination Fee; Expenses................................................... 31
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Amendment and Modification.................................................. 32
Section 8.2 Extension; Waiver........................................................... 32
Section 8.3 Nonsurvival of Representations and Warranties............................... 33
Section 8.4 Notices..................................................................... 33
Section 8.5 Counterparts................................................................ 34
Section 8.6 Entire Agreement; Third Party Beneficiaries................................. 34
Section 8.7 Severability................................................................ 34
Section 8.8 Governing Law............................................................... 34
Section 8.9 Assignment.................................................................. 34
Section 8.10 Headings; Interpretation.................................................... 34
Section 8.11 Enforcement................................................................. 34
(ii)
TABLE OF CONTENTS
(CONTINUED)
PAGE
Exhibit A: Stockholders Agreement
(iii)
AGREEMENT AND PLAN OF MERGER
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AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of July 30,
2001, by and among Berkshire Hathaway Inc., a Delaware corporation ("Parent"),
BX Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of
Parent (the "Purchaser"), and XTRA Corporation, a Delaware corporation (the
"Company").
WHEREAS, the Board of Directors of Parent, the Board of Directors of
Purchaser, and the Board of Directors of the Company have approved, and
determined that it is in the best interests of their respective companies and
stockholders to consummate, the transactions provided for herein; and
WHEREAS, Parent and Purchaser have proposed acquiring all of the
outstanding shares of Common Stock, par value $0.50 per share, of the Company
(the "Shares" or the "Company Common Stock") at a price of $55.00 per Share in
cash; and
WHEREAS, the Company, Parent and Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer (as defined herein) and the Merger (as defined herein); and
WHEREAS, concurrently with the execution and delivery of this
Agreement and as a condition to Parent's and Purchaser's willingness to enter
into this Agreement, Parent and Purchaser have entered into a Stockholders
Agreement, dated the date hereof, the form of which is attached as Exhibit A
hereto (the "Stockholders Agreement"), with the stockholders named therein (the
"Stockholders"), pursuant to which the Stockholders have, among other things,
(1) agreed to tender all Shares owned by the Stockholders pursuant to the Offer
and (2) agreed to vote all Shares beneficially owned by the Stockholders in
favor of the Merger and this Agreement and against any Takeover Proposal (as
defined herein), in each case subject to and on the conditions set forth
therein.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
THE OFFER AND MERGER
Section 1.1 The Offer.
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(a) Provided this Agreement shall not have been terminated in accordance
with Section 7.1, on the tenth business day after the initial public
announcement of the execution hereof, the Purchaser shall, and Parent shall
cause Purchaser to, commence (within the meaning of Rule 14d-2 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") ) an offer (the
"Offer") to purchase for cash all of the Shares at a price of $55.00 per Share,
net to the seller in cash (such price, or such higher price per Share as may be
paid in the Offer, being referred to herein as the "Offer Price"), subject only
to the conditions set forth in Annex A hereto; provided, however, that Parent
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may designate another wholly owned, direct or indirect subsidiary of Parent as
the bidder (within the meaning of Rule 14d-1(g) under the Exchange Act) in the
Offer, in which case reference herein to Purchaser shall be deemed to apply to
such subsidiary, as appropriate. The Company shall not tender Shares held by it
or by any of its subsidiaries pursuant to the Offer. The Purchaser shall, and
Parent shall cause the Purchaser to, on the terms and subject to the prior
satisfaction or waiver of the conditions to the Offer, accept for payment and
pay for Shares tendered as soon as it is legally permitted to do so under
applicable law.
(b) The Offer shall be made by means of an offer to purchase (the "Offer
to Purchase") containing the terms set forth in this Agreement and only the
conditions set forth in Annex A hereto and providing for an expiration date (the
"Expiration Date") initially of twenty (20) business days (as defined in Rule
14d-1 under the Exchange Act) from the date of commencement. The Purchaser shall
not, and Parent shall cause the Purchaser not to, decrease the Offer Price or
decrease the number of Shares sought, amend the conditions to the Offer set
forth in Annex A or impose conditions to the Offer in addition to those set
forth in Annex A, without the prior written consent of the Company. The
Purchaser may, without the consent of the Company, (i) extend the Offer for the
shortest time periods which it reasonably believes are necessary, but in no
event more than an additional forty (40) days, in one or more periods of not
more than ten (10) business days, if Parent and Purchaser are not in material
breach of this Agreement and if any condition to the Offer is not satisfied or
waived and such condition is reasonably capable of being satisfied and (ii) if,
on the Expiration Date, the Shares validly tendered and not withdrawn pursuant
to the Offer equal at least seventy percent (70%) of the outstanding Shares but
less than ninety percent (90%) of the outstanding Shares (on a fully diluted
basis, as such term is defined in Annex A), (A) extend the Offer on one occasion
for up to ten (10) business days, or (B) provide for a subsequent offering
period of up to ten (10) business days in accordance with Rule 14d-11 under the
Exchange Act, in each case (x) notwithstanding that all the conditions to the
Offer have been satisfied as of the date such extension or subsequent offering
period, as the case may be, is announced, and (y) in the case of an extension,
so long as Purchaser irrevocably waives the satisfaction of any of the
conditions to the Offer (other than in the case of paragraph (iii)(a) of Annex A
hereto with respect to any statute, rule, regulation, judgment or injunction
arising after the date such extension is announced) that may subsequently become
unsatisfied during any such extension. In addition, the Offer Price may be
increased and the Offer may be extended to the extent required by law in
connection with such increase, in each case without the consent of the Company.
If, as of the Expiration Date, (i) the condition set forth in paragraph (iii)(b)
of Annex A has not been satisfied or waived, and the Company shall have
cooperated with Parent in using all reasonable efforts to cause such condition
to be satisfied, or (ii) the condition set forth in clause (1) of paragraph
(iii)(c) of Annex A has not been satisfied or waived, and the failure of such
condition to be satisfied is not the result of the Company's breach of or
failure in any material respect to perform or comply with its material
obligations, agreements and covenants herein to be performed by it through the
Expiration Date, then, at the written request of the Company, Purchaser shall,
and Parent shall cause Purchaser to, extend the Offer in increments of five (5)
business days each until the earliest to occur of (w) the satisfaction or waiver
of such condition, (x) Parent determines that such condition could not
reasonably be expected to be satisfied on or prior to
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September 30, 2001, (y) the termination of this Agreement in accordance with its
terms, and (z) September 30, 2001.
(c) On the date the Offer is commenced, Parent and Purchaser shall file
with the United States Securities and Exchange Commission (the "SEC") a Tender
Offer Statement on Schedule TO with respect to the Offer (together with all
amendments and supplements thereto and including the exhibits thereto, the
"Schedule TO"). The Schedule TO shall contain or shall incorporate by reference
the Offer to Purchase and a form of letter of transmittal and summary
advertisement (the Schedule TO, the Offer to Purchase and related letter of
transmittal and related summary advertisement, together with any amendments and
supplements thereto, collectively the "Offer Documents"). The Offer Documents
shall comply in all material respects with the provisions of applicable federal
securities laws and, on the date filed with the SEC and on the date first
published, sent or given to the Company's stockholders, shall not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
that no representation is made by Parent or the Purchaser with respect to
information supplied by the Company for inclusion in the Offer Documents. Each
of Parent and Purchaser shall further take all steps necessary to cause the
Offer Documents to be filed with the SEC and to be disseminated to holders of
Shares, in each case as and to the extent required by applicable federal
securities laws. Each of Parent and Purchaser, on the one hand, and the Company,
on the other hand, shall promptly correct any information provided by it for use
in the Offer Documents if and to the extent that it shall have become false and
misleading in any material respect and the Purchaser further shall take all
steps necessary to cause the Offer Documents as so corrected to be filed with
the SEC and to be disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws. The Company and its
counsel shall be given a reasonable opportunity to review and comment upon the
Schedule TO (and shall provide any comments thereon as soon as practicable)
prior to the filing thereof with the SEC. In addition, Parent shall, and shall
cause the Purchaser to, provide the Company and its counsel in writing with any
comments that Parent, Purchaser or their counsel may receive from the SEC or its
staff with respect to the Offer Documents promptly after receipt of such
comments and with a reasonable opportunity to participate in the preparation of
any responses thereto by Parent, Purchaser or their counsel, including copies of
any written responses and telephonic notification of any verbal responses.
(d) Parent shall provide or cause to be provided to Purchaser all of the
funds necessary to purchase any Shares that Purchaser becomes obligated to
purchase pursuant to the Offer.
Section 1.2 Company Actions.
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(a) The Company hereby approves of and consents to the Offer and
represents and warrants that (i) its Board of Directors, at a meeting duly
called and held, has (A) unanimously approved this Agreement (including all
terms and conditions set forth herein) and the transactions contemplated hereby,
including the Offer and the Merger (as defined in Section 1.4) (collectively,
the "Transactions"), (B) determined that the Merger is advisable and that the
terms of the Offer and the Merger are fair to, and in the best interests of, the
Company's
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stockholders and (C) recommended that the Company's stockholders accept the
Offer, tender their Shares thereunder to the Purchaser and approve and adopt
this Agreement and the Merger; provided, that such recommendation may be
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withdrawn, modified or amended in accordance with Section 5.2(b); and (ii)
Xxxxxxx, Xxxxx & Co. (the "Financial Advisor") has delivered to the Company's
Board of Directors its opinion (in writing or to be confirmed in writing) to the
effect that as of the date hereof, the $55.00 per Share in cash to be received
by the holders of the Shares pursuant to the Offer and the Merger is fair to
such holders from a financial point of view. The Company hereby consents to the
inclusion in the Offer Documents of the recommendation of its Board of Directors
described in clause (i) above, subject to the right set forth in Section 5.2 to
withdraw, modify or amend such recommendation.
(b) Concurrently with the commencement of the Offer or as promptly
thereafter as practicable, the Company shall file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9, including an
information statement pursuant to Section 14(f) of the Exchange Act and Rule
14f-1 promulgated thereunder (together with all amendments and supplements
thereto and including the exhibits thereto, the "Schedule 14D-9"), which shall
contain the recommendation referred to in Section 1.2(a) hereof, unless such
recommendation has been withdrawn, modified or amended in accordance with
Section 5.2(b). The Schedule 14D-9 shall comply in all material respects with
the provisions of applicable federal securities laws and, on the date filed with
the SEC and on the date first published, sent or given to the Company's
stockholders, shall not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation is made by the Company
with respect to information supplied by Parent or the Purchaser for inclusion in
the Schedule 14D-9. The Company further shall take all steps necessary to cause
the Schedule 14D-9 to be filed with the SEC and to be disseminated to holders of
Shares, in each case as and to the extent required by applicable federal
securities laws, and shall mail such Schedule 14D-9 to the stockholders of the
Company promptly after commencement of the Offer, together with the initial
mailing of the Offer to Purchase. Each of the Company, on the one hand, and
Parent and Purchaser, on the other hand, shall promptly correct any information
provided by it for use in the Schedule 14D-9 if and to the extent that it shall
have become false and misleading in any material respect and the Company further
shall take all steps necessary to cause the Schedule 14D-9 as so corrected to be
filed with the SEC and to be disseminated to holders of the Shares, in each case
as and to the extent required by applicable federal securities laws. Parent, the
Purchaser and their counsel shall be given a reasonable opportunity to review
and comment upon the Schedule 14D-9 (and shall provide any comments thereon as
soon as practicable) prior to the filing thereof with the SEC. In addition, the
Company shall provide Parent, the Purchaser and their counsel in writing with
any comments the Company or its counsel may receive from the SEC or its staff
with respect to the Schedule 14D-9 promptly after receipt of such comments and
with a reasonable opportunity to participate in the preparation of any responses
thereto by the Company or its counsel, including copies of any written responses
and telephonic notification of any verbal responses.
(c) In connection with the Offer, the Company shall as promptly as
reasonably practicable (but in any event within such time as allows Parent and
Purchaser to timely fulfill their obligations under Section 1.1) furnish or
cause to be furnished to the Purchaser mailing labels, security position
listings and any available listing or computer file
4
containing the names and addresses of the record holders of the Shares as of a
recent date, and shall promptly furnish Parent with such additional information,
including updated lists of stockholders, mailing labels and security position
listings, and such other information and assistance as the Purchaser or its
agents may reasonably request in communicating the Offer to the stockholders of
the Company. Except for such steps as are necessary to disseminate the Offer
Documents and subject to the requirements of applicable law, Parent shall, and
shall cause the Purchaser and each of their affiliates, associates, employees,
agents and advisors to, hold in confidence the information contained in any of
such labels and lists and the additional information referred to in the
preceding sentence, shall use such information only for the purposes of
communicating and consummating the Offer and disseminating any other documents
necessary to consummate the Merger, and, if this Agreement is terminated, shall
promptly deliver or cause to be delivered to the Company (or destroy or cause to
be destroyed, and certify the destruction of) all copies of such information
then in its possession or control or control of its agents or representatives.
Section 1.3 Directors. Promptly upon the purchase by Purchaser of Shares
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pursuant to the Offer, and from time to time thereafter as Shares are acquired
by Purchaser, Parent or their affiliates, Purchaser shall be entitled to
designate such number of directors, rounded up to the next whole number, on the
Board of Directors of the Company as will give Purchaser, subject to compliance
with Section 14(f) of the Exchange Act, representation on the Board of Directors
of the Company equal to that number of directors which equals the product of the
total number of directors on the Board of Directors of the Company (giving
effect to the directors appointed or elected pursuant to this sentence and
including current directors serving as officers of the Company) multiplied by
the percentage that the aggregate number of Shares beneficially owned by Parent,
Purchaser or any of their affiliates (including for purposes of this Section 1.3
such Shares as are accepted for payment pursuant to the Offer, but excluding
Shares held by the Company or any of its subsidiaries) bears to the total number
of shares of Company Common Stock then issued and outstanding. If, and at such
times as, requested by Purchaser, the Company will use its best efforts to cause
each committee of the Board of Directors of the Company and the Board of
Directors of each subsidiary of the Company to include persons designated by
Purchaser constituting the same percentage of each such committee and the Board
of Directors of each subsidiary of the Company as Purchaser's designees are of
the Board of Directors of the Company. The Company shall, upon request by
Purchaser, promptly increase the size of the Board of Directors of the Company
as is necessary to enable Purchaser's designees to be elected to the Board of
Directors of the Company in accordance with the terms of this Section 1.3 and
shall cause Purchaser's designees to be so elected; provided, however, that, if
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Purchaser's designees are appointed or elected to the Board of Directors of the
Company, until the Effective Time (as hereinafter defined) the Board of
Directors of the Company shall have at least two (2) directors who are directors
on the date hereof and who are neither officers of the Company nor designees,
stockholders, affiliates or associates (within the meaning of the federal
securities laws) of Parent (one or more of such directors, the "Independent
Directors"); provided further, that if less than two (2) Independent Directors
remain, the remaining Independent Director (if any) or if no Independent
Directors remain, the other directors, shall designate persons to fill the
vacancies who shall not be either officers of the Company or designees,
shareholders, affiliates or associates of Parent, and such persons shall be
deemed to be Independent Directors for purposes of this Agreement. Subject to
applicable law, the Company shall promptly take all action necessary pursuant to
Section 14(f) of the Exchange Act and Rule
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14f-1 promulgated thereunder in order to fulfill its obligations under this
Section 1.3 and shall include in the Schedule 14D-9 mailed to stockholders
promptly after the commencement of the Offer (or an amendment thereof or an
information statement pursuant to Rule 14f- 1 if Purchaser has not theretofore
designated directors) such information with respect to the Company and its
officers and directors as is required under Section 14(f) and Rule 14f-1 in
order to fulfill its obligations under this Section 1.3. Parent and Purchaser
will supply the Company and be solely responsible for any information with
respect to itself and its nominees, officers, directors and affiliates required
by Section 14(f) and Rule 14f-1. Notwithstanding anything in this Agreement to
the contrary, during the period after the election of directors designated by
Purchaser pursuant to this Section 1.3 but prior to the Effective Time, the
Board of Directors of the Company shall delegate to a committee of the Board of
Directors of the Company comprised solely of the Independent Directors (the
"Committee") the sole responsibility for (i) the amendment or termination of
this Agreement (in either case in accordance with this Agreement) on behalf of
the Company, but excluding a termination pursuant to Section 7.1(c)(ii) hereof,
which is not delegated, (ii) the waiver of any of the Company's rights or
remedies hereunder, (iii) the extension of the time for performance of Parent's
or Purchaser's obligations hereunder, or (iv) the assertion or enforcement of
the Company's rights under this Agreement to object to (A) a failure to
consummate the Merger for a failure of the condition set forth in Section 6.2 to
be satisfied or (B) a termination of this Agreement under Section 7.1(d)(iii).
Section 1.4 The Merger. Subject to the terms and conditions of this
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Agreement and the provisions of the Delaware General Corporation Law (the
"DGCL"), at the Effective Time (as defined in Section 1.5 hereof), the Company
and Purchaser shall consummate a merger (the "Merger") pursuant to which (a)
Purchaser shall be merged with and into the Company and the separate corporate
existence of Purchaser shall thereupon cease, (b) the Company shall be the
successor or surviving corporation in the Merger (the "Surviving Corporation")
under the name "XTRA Corporation" and shall continue to be governed by the laws
of the State of Delaware, and (c) the separate corporate existence of the
Company with all its rights, privileges, immunities, powers and franchises shall
continue unaffected by the Merger. After the Effective Time, (x) the certificate
of incorporation of the Company shall be amended as desired by Parent and as so
amended shall become the certificate of incorporation of the Surviving
Corporation, until thereafter amended as provided by law and such certificate of
incorporation, and (y) the bylaws of the Purchaser, as in effect immediately
prior to the Effective Time, shall be the bylaws of the Surviving Corporation
until thereafter amended as provided by law, the certificate of incorporation
and such bylaws. The Merger shall have the effects set forth in the DGCL.
Section 1.5 Effective Time. Parent, Purchaser, and the Company shall
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cause an appropriate Certificate of Merger or Certificate of Ownership and
Merger, as applicable (in either case, the "Certificate of Merger") to be
executed and filed on the date of the Closing (as defined in Section 1.6) (or on
such other date as Parent and the Company may agree) with the Secretary of State
of the State of Delaware (the "Secretary of State") as provided in the DGCL. The
Merger shall become effective on the date on which the Certificate of Merger has
been duly filed with the Secretary of State or such later time as is agreed upon
by the parties and specified in the Certificate of Merger, and such time is
hereinafter referred to as the "Effective Time."
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Section 1.6 Closing. The closing of the Merger (the "Closing") shall
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take place at 10:00 a.m., on a date to be specified by the parties, which shall
be as soon as practicable, but in no event later than the fourth business day,
after satisfaction or waiver of all of the conditions set forth in Article VI
hereof (the "Closing Date"), at the offices of Xxxxxx, Xxxxxx & Xxxxx LLP, 000
Xxxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, unless another date or place
is agreed to in writing by the parties hereto.
Section 1.7 Directors and Officers of the Surviving Corporation. The
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directors of the Purchaser and the officers of the Company immediately prior to
the Effective Time shall, from and after the Effective Time, be the directors
and officers, respectively, of the Surviving Corporation until their successors
shall have been duly elected or appointed or qualified or until their earlier
death, resignation or removal in accordance with the Surviving Corporation's
certificate of incorporation and bylaws.
Section 1.8 Stockholders' Meeting.
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(a) If required by applicable law in order to consummate the
Merger, the Company, acting through its Board of Directors, shall, in accordance
with applicable law:
(i) duly call, give notice of, convene and hold a special
meeting of its stockholders for the purpose of considering and taking action
upon this Agreement (the "Special Meeting") as soon as practicable following the
acceptance for payment and purchase of Shares by the Purchaser pursuant to the
Offer and, if later, the expiration of any subsequent offering period under
Section 1.1(b) hereof;
(ii) prepare and file with the SEC a preliminary proxy or
information statement relating to the Merger and this Agreement and use its
reasonable efforts (A) to obtain and furnish the information required to be
included by the federal securities laws (and the rules and regulations
thereunder) in the Proxy Statement (as hereinafter defined) and, after
consultation with Parent, to respond promptly to any comments made by the SEC
with respect to the preliminary proxy or information statement and cause a
definitive proxy or information statement (the "Proxy Statement") to be mailed
to its stockholders and (B) to obtain the necessary approvals of the Merger and
this Agreement by its stockholders; and
(iii) include in the Proxy Statement the recommendation of the
Board that stockholders of the Company vote in favor of the approval of the
Merger and the adoption of this Agreement, unless such recommendation has been
withdrawn, or as such recommendation has been modified or amended, in each case
in accordance with the provisions of this Agreement.
(b) Parent shall provide the Company with the information
concerning Parent and Purchaser required to be included in the Proxy Statement.
Parent shall vote, or cause to be voted, all of the Shares then owned by it, the
Purchaser or any of its other subsidiaries and affiliates in favor of the
approval of the Merger and the adoption of this Agreement.
Section 1.9 Merger Without Meeting of Stockholders. In the event that
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Parent, the Purchaser or any other subsidiary of Parent, shall acquire at least
ninety percent (90%) of the then-outstanding shares of Company Common Stock,
pursuant to the Offer or otherwise, each of
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the parties hereto shall take all necessary and appropriate action to cause the
Merger to become effective as soon as practicable after such acquisition,
without a meeting of stockholders of the Company, in accordance with Section 253
(in lieu of Section 251) of the DGCL.
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock. As of the Effective Time, by
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virtue of the Merger and without any action on the part of the holders of any
shares of Company Common Stock or of the common stock, par value $.0l per share,
of the Purchaser (the "Purchaser Common Stock"):
(a) Purchaser Common Stock. Each issued and outstanding share of
----------------------
the Purchaser Common Stock shall be converted into and become one validly
issued, fully paid and nonassessable share of common stock, par value $.0l per
share, of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. All
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shares of Company Common Stock that are owned by the Company as treasury stock,
all shares of Company Common Stock owned by any subsidiary of the Company and
any shares of Company Common Stock owned by Parent, the Purchaser or any other
wholly owned subsidiary of Parent shall be canceled and retired and shall cease
to exist and no consideration shall be delivered in exchange therefor.
(c) Conversion of Shares. Each issued and outstanding share of
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Company Common Stock, other than Shares to be canceled in accordance with
Section 2.1(b) hereof and any Dissenting Shares (as defined in Section 2.3
hereof), shall be converted into the right to receive the Offer Price in cash,
without interest (the "Merger Consideration"), payable to the holder thereof
upon surrender of the certificate formerly representing such share of Company
Common Stock in the manner provided in Section 2.2 hereof. All such shares of
Company Common Stock, when so converted, shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to exist, and each
holder of a certificate representing any such Shares shall cease to have any
rights with respect thereto, except the right to receive the Merger
Consideration therefor upon the surrender of such certificate in accordance with
Section 2.2 hereof, without interest.
Section 2.2 Exchange of Certificates.
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(a) Paying Agent. Parent shall designate a bank or trust company
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in the United States reasonably acceptable to the Company (the "Paying Agent")
to make the payments of the funds to which holders of shares of Company Common
Stock shall become entitled pursuant to Section 2.1(c) hereof. When and as
needed, Parent shall make available to the Paying Agent such funds for timely
payment hereunder. Such funds shall be invested by the Paying Agent as directed
by Parent. Any net profit resulting from, or interest or income produced by,
such investments will be payable to Parent.
8
(b) Exchange Procedures. Promptly after the Effective Time but in
-------------------
no event more than ten (10) days thereafter, Parent shall cause the Paying Agent
to mail to each holder of record of a certificate or certificates, which
immediately prior to the Effective Time represented outstanding shares of
Company Common Stock (the "Certificates"), whose shares were converted pursuant
to Section 2.1(c) into the right to receive the Merger Consideration, (i) a
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Paying Agent and shall be in such form and have such other
provisions as Parent and the Surviving Corporation may reasonably specify) and
(ii) instructions for use in effecting the surrender of the Certificates in
exchange for payment of the Merger Consideration. Upon surrender of a
Certificate for cancellation to the Paying Agent, together with such letter of
transmittal, duly executed, the holder of such Certificate shall be entitled to
receive in exchange therefor the Merger Consideration (subject to subsection (e)
below) for each share of Company Common Stock formerly represented by such
Certificate and the Certificate so surrendered shall forthwith be canceled. If
payment of the Merger Consideration is to be made to a person other than the
person in whose name the surrendered Certificate is registered, it shall be a
condition of payment that the Certificate so surrendered shall be properly
endorsed or shall be otherwise in proper form for transfer and that the person
requesting such payment shall have paid any transfer and other taxes required by
reason of the payment of the Merger Consideration to a person other than the
registered holder of the Certificate surrendered or shall have established to
the satisfaction of the Surviving Corporation that such tax either has been paid
or is not applicable. Until surrendered as contemplated by this Section 2.2,
each Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive the Merger Consideration in cash as
contemplated by this Section 2.2.
(c) Transfer Books; No Further Ownership Rights in Company Common
-------------------------------------------------------------
Stock. At the Effective Time, the stock transfer books of the Company shall be
-----
closed and thereafter there shall be no further registration of transfers of
shares of Company Common Stock on the records of the Company. From and after the
Effective Time, the holders of Certificates evidencing ownership of shares of
Company Common Stock outstanding immediately prior to the Effective Time shall
cease to have any rights with respect to such Shares, except as otherwise
provided for herein or by applicable law. 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 II.
(d) Return of Funds; No Liability. At any time following 180
-----------------------------
calendar days after the Effective Time, Parent or the Surviving Corporation
shall be entitled to require the Paying Agent to deliver to it any funds
(including any interest received with respect thereto) which had been made
available to the Paying Agent and which have not been disbursed to holders of
Certificates, and thereafter such holders shall be entitled to look only to
Parent or the Surviving Corporation (subject to abandoned property, escheat or
other similar laws) as general creditors thereof with respect to the payment of
any Merger Consideration that may be payable upon surrender of any Certificates
such stockholder holds, as determined pursuant to this Agreement, without any
interest thereon. Notwithstanding the foregoing, none of Parent, the Surviving
Corporation nor the Paying Agent shall be liable to any holder of a Certificate
for Merger Consideration delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
9
(e) Withholding Taxes. If so specified in the Offer Documents,
-----------------
Parent, the Purchaser, the Surviving Corporation and the Paying Agent shall be
entitled to deduct and withhold from the consideration otherwise payable to a
holder of Shares pursuant to the Offer or Merger such amounts as Parent, the
Purchaser, the Surviving Corporation or the Paying Agent 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 amounts are so withheld by Parent, the
Purchaser, the Surviving Corporation or the Paying Agent, the 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 the deduction and withholding was made.
(f) Payment Responsibility. The Surviving Corporation shall pay
----------------------
all charges and expenses, including those of the Paying Agent, in connection
with the exchange of cash for the Company Common Stock.
Section 2.3 Dissenting Shares. Notwithstanding any provision of this
-----------------
Agreement to the contrary, if and to the extent required by the DGCL, shares of
Company Common Stock which are issued and outstanding immediately prior to the
Effective Time and which are held by holders of such shares of Company Common
Stock who have properly exercised appraisal rights with respect thereto (the
"Dissenting Common Stock") in accordance with Section 262 of the DGCL, shall not
be exchangeable for the right to receive the Merger Consideration, and holders
of such shares of Dissenting Common Stock shall be entitled to receive payment
of the appraised value of such shares of Dissenting Common Stock in accordance
with the provisions of Section 262 of the DGCL unless and until such holders
fail to perfect or effectively withdraw or otherwise lose their rights to
appraisal and payment under the DGCL. If, after the Effective Time, any such
holder fails to perfect or effectively withdraws or loses such right, such
shares of Dissenting Common Stock shall thereupon be treated as if they had been
converted into and to have become exchangeable for, at the Effective Time, the
right to receive the Merger Consideration, without any interest thereon.
Notwithstanding anything to the contrary contained in this Section 2.3, if this
Agreement is terminated prior to the Effective Time, then the right of any
stockholder to be paid the fair value of such stockholder's Dissenting Common
Stock pursuant to Section 262 of the DGCL shall cease. The Company shall give
Parent (i) prompt notice of any demands received by the Company for appraisals
of shares of Dissenting Common Stock, withdrawals of such demands and any other
instruments served pursuant to the DGCL received by the Company, and (ii) the
opportunity to direct all negotiations and proceedings with respect to demands
for appraisal under the DGCL. The Company shall not, except with the prior
written consent of Parent, make any payment with respect to any demands for
appraisals or offer to settle or settle any such demands.
Section 2.4 Company Option Plans. Prior to the Closing Date, the Board
--------------------
of Directors of Parent and the Board of Directors of the Company (or, if
appropriate, any committee administering the Option Plans (as defined below))
shall adopt such resolutions or take such other actions as may be required to
effect the following:
(a) Adjust the terms of all outstanding stock options to purchase
shares of Company Common Stock ("Company Stock Options") granted under the
Company's 1987 Stock Incentive Plan, 1997 Stock Incentive Plan, 1991 Stock
Option Plan for Non-Employee
10
Directors, 1998 General Stock Incentive Plan and Deferred Director Fee Option
Plan, each as amended prior to the date hereof (the "Option Plans"), to provide
that each Company Stock Option (whether vested or unvested) with an exercise
price of less than the Offer Price shall be canceled at the Effective Time in
exchange for a payment from the Surviving Corporation (subject to any applicable
withholding taxes) equal to the product of (A) the total number of shares
(without regard to vesting) of Company Common Stock subject to such Company
Stock Option and (B) the excess of the Offer Price over the exercise price per
share of Company Common Stock subject to such Company Stock Option, payable in
cash immediately following the Effective Time.
(b) Except as provided in subsection (a) above, the Company Stock
Options, the Option Plans and any other plan, program or arrangement providing
for the issuance or grant of any interest in respect of the capital stock of the
Company or any subsidiary shall terminate as of the Effective Time, and the
Company shall ensure that following the Effective Time no holder of a Company
Stock Option nor any participant in any such plan, program or arrangement shall
have any right thereunder to acquire capital securities of the Surviving
Corporation or of Parent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Purchaser as
follows:
Section 3.1 Corporate Organization. Each of the Company and its
----------------------
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and has the
requisite corporate power and authority to own or lease all of its properties
and assets and to carry on its business as it is now being conducted. Each of
the Company and its subsidiaries is duly licensed or qualified to do business in
each jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or leased by it makes
such licensing or qualification necessary, except where the failure to be so
licensed or qualified would not reasonably be expected to have, when aggregated
with all other such failures, a Material Adverse Effect (as defined below) on
the Company ("Company Material Adverse Effect"). As used in this Agreement, the
term "Material Adverse Effect" means, with respect to a party, a material
adverse effect on the business, operations, properties, liabilities or condition
(financial or otherwise) of such party and its subsidiaries taken as a whole or
a material adverse effect on the party's ability to consummate the transactions
contemplated hereby (except to the extent caused directly or indirectly by any
action or inaction of Parent or Purchaser in the case of a Company Material
Adverse Effect, or of the Company or its subsidiaries in the case of a Parent
Material Adverse Effect, in breach of this Agreement); provided, however, that a
-------- -------
"Material Adverse Effect" when determined with respect to the Company shall not
include any change or effect resulting from or attributable to (i) the
announcement or pendency of this Agreement or the transactions contemplated
hereby, (ii) any decrease in the market price of the Shares (but not any change
or effect underlying such decrease to the extent that it would otherwise
constitute a Material Adverse Effect), (iii) changes, effects, conditions,
events or circumstances that generally affect the industries in which the
Company or its subsidiaries operate (including legal and regulatory changes), or
(iv) general economic
11
conditions or changes, effects, conditions or circumstances affecting the
securities markets generally. As used in this Agreement, the word "subsidiary"
when used with respect to any party means any corporation, partnership or other
organization, whether incorporated or unincorporated, of which at least a
majority of the securities or other interests having by their terms voting power
to elect a majority of the board of directors or others performing similar
functions with respect to such corporation or other organization is directly or
indirectly beneficially owned or controlled by such party or by any one or more
of its subsidiaries, or by such party and one or more of its subsidiaries. The
copies of the Certificate of Incorporation and Bylaws of the Company (the
"Company Charter" and "Company Bylaws"), as most recently filed with the
Company's SEC Documents (as hereinafter defined), are true, complete and correct
copies of such documents as in effect as of the date of this Agreement.
Section 3.2 Capitalization.
--------------
(a) The authorized capital stock of the Company consists of
30,000,000 shares of Company Common Stock, par value $0.50 per share, and
3,000,000 shares of Preferred Stock, no par value per share (the "Preferred
Stock"). At the date hereof, there were (i) 10,506,639 shares of Company Common
Stock issued and outstanding, (ii) 1,075,748 shares of Company Common Stock
issuable upon the exercise of outstanding Company Stock Options (whether or not
presently exercisable) pursuant to the Option Plans, and (iii) no shares of
Preferred Stock issued or outstanding. All of the issued and outstanding shares
of Company Stock have been duly authorized and validly issued and are fully
paid, nonassessable and free of preemptive rights. Except as set forth above or
in Section 3.2(a) of the Company's disclosure schedule delivered to Parent
concurrently herewith (the "Company Disclosure Schedule"), as of the date
hereof, there are not and, as of the Expiration Date and as of the Effective
Time there will not be, any shares of capital stock issued and outstanding or
any subscriptions, options, warrants, calls, commitments or agreements of any
character calling for the purchase or issuance of any securities of the Company,
including any securities representing the right to purchase or otherwise receive
any Company Common Stock or Preferred Stock.
(b) The Company directly owns all of the issued and outstanding
shares of capital stock of XTRA, Inc., free and clear of any liens, charges,
encumbrances, adverse rights or claims and security interests whatsoever
("Liens"), and all of such shares are duly authorized and validly issued and are
fully paid, nonassessable and free of preemptive rights. The Company owns,
directly or indirectly, all of the issued and outstanding shares of capital
stock of each of its other subsidiaries, free and clear of any Liens that would
reasonably be expected to have a Company Material Adverse Effect, and all of
such shares are duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights. None of the Company's subsidiaries
has or is bound by any outstanding subscriptions, options, warrants, calls,
commitments or agreements of any character calling for the purchase or issuance
of any security of such subsidiary, including any securities representing the
right to purchase or otherwise receive any shares of capital stock or any other
equity security of such subsidiary.
(c) Disclosed in Section 3.2(c) of the Company Disclosure Schedule
is a true and complete list of all outstanding Company Stock Options, the
exercise price therefor, and the holder thereof.
12
Section 3.3 Authority.
---------
(a) The Company has all necessary corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby, subject to obtaining the approval of holders of a majority
of the shares of Company Common Stock prior to the consummation of the Merger in
accordance with Section 251 of the DGCL, if so required. The execution, delivery
and performance by the Company of this Agreement, and the consummation by it of
the transactions contemplated hereby, have been duly authorized by its Board of
Directors and, except for obtaining the approval of its stockholders as
contemplated by Section 1.8 hereof and as required by the DGCL, no other
corporate action on the part of the Company is necessary to authorize the
execution and delivery by the Company of this Agreement and the consummation by
it of the transactions contemplated hereby. This Agreement has been duly
executed and delivered by the Company and, assuming due and valid authorization,
execution and delivery hereof by the other parties thereto, constitutes a valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms, except that such enforceability (i) may be limited by
bankruptcy, insolvency, moratorium, fraudulent transfer or other similar laws
affecting or relating to the enforcement of creditors' rights generally and (ii)
is subject to general principles of equity.
(b) The Board of Directors of the Company has approved and taken
all corporate action required to be taken by the Board of Directors for the
consummation of the transactions contemplated by this Agreement by the Company.
Section 3.4 Consents and Approvals; No Violations.
-------------------------------------
(a) Except for (i) the consents and approvals set forth in Section
3.4(a) of the Company Disclosure Schedule, (ii) the filing with the SEC of the
Offer Documents and, if necessary, of the Proxy Statement, (iii) the filing of
the Certificate of Merger with the Secretary of State of the State of Delaware
pursuant to the DGCL, (iv) if necessary, the adoption of this Agreement by the
requisite vote of the stockholders of the Company and (v) filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of, (A) the Exchange Act, (B) the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (C) the
Competition Act (Canada), R.S. 1985, c.C-34, as amended (the "Canadian
Competition Act") and (D) the Federal Law of Economic Competition (Mexico), as
amended (the "Mexican Competition Act"), no consents or approvals of, or
filings, declarations or registrations with, any federal, state or local court,
administrative or regulatory agency or commission or other governmental
authority or instrumentality, domestic or foreign (each a "Governmental
Entity"), are necessary for the consummation by the Company of the transactions
contemplated hereby, other than such other consents, approvals, filings,
declarations or registrations that, if not obtained, made or given, would not
reasonably be expected to have, in the aggregate, a Company Material Adverse
Effect.
(b) Except as set forth in Section 3.4(b) of the Company
Disclosure Schedule, neither the execution and delivery of this Agreement by the
Company nor the consummation by the Company of the transactions contemplated
hereby, nor compliance by the Company with any of the terms or provisions
hereof, will (i) conflict with or violate any provision of the Company Charter
or Company Bylaws or any of the similar organizational
13
documents of any of its subsidiaries or (ii) assuming that the authorizations,
consents and approvals referred to in Section 3.4(a) and the authorization
hereof by the Company's stockholders are duly obtained in accordance with the
DGCL, (x) violate any statute, code, ordinance, rule, regulation, judgment,
order, writ, decree or injunction applicable to the Company or any of its
subsidiaries or any of their respective properties or assets, or (y) violate,
conflict with, result in the loss of any material benefit under, constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, result in the termination of or a right of
termination or cancellation under, accelerate the performance required by, or
result in the creation of any Lien upon any of the respective properties or
assets of the Company or any of its subsidiaries under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which the Company
or any of its subsidiaries is a party, or by which they or any of their
respective properties or assets may be bound or affected, except, in the case of
clause (ii) above, for such violations, conflicts, breaches, defaults, losses,
terminations of rights thereof, accelerations or Lien creations which, in the
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect.
Section 3.5 SEC Documents; Undisclosed Liabilities. The Company has
--------------------------------------
filed all required reports, schedules, forms and registration statements with
the SEC since January 1, 1999 (collectively, and in each case including all
exhibits and schedules thereto and documents incorporated by reference therein,
the "SEC Documents"). As of their respective dates, the SEC Documents complied
in all material respects with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), or the Exchange Act, as the case may be, and the
rules and regulations of the SEC promulgated thereunder applicable to such SEC
Documents, and none of the SEC Documents (including any and all financial
statements included therein) as of such dates contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of the Company included in the SEC Documents (the "SEC
Financial Statements") comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles ("GAAP") (except, in the case of unaudited
consolidated quarterly statements, as permitted by Form 10-Q of the SEC) applied
on a consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly present in all material respects the consolidated
financial position of the Company and its consolidated subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of unaudited quarterly
statements, to normal year-end audit adjustments). Since September 30, 2000,
neither the Company nor any of its subsidiaries, has incurred any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
required, if known, to be reflected or reserved against on a consolidated
balance sheet of the Company prepared in accordance with GAAP except (i) as and
to the extent set forth on the audited balance sheet of the Company and its
subsidiaries as of September 30, 2000 (including the notes thereto), (ii) as
incurred in connection with the transactions contemplated by this Agreement,
(iii) as incurred after September 30, 2000 in the ordinary course of business
and consistent with past practice, (iv) as described in the SEC Documents filed
since September 30, 2000 (the "Recent SEC Documents"), or (v) as would not,
individually or in the aggregate, have a Company Material Adverse Effect.
14
Section 3.6 Broker's Fees. Except for the Financial Advisor's fee set
-------------
forth in Section 3.6 of the Company Disclosure Schedule, neither the Company nor
any subsidiary of the Company nor any of their respective officers or directors
on behalf of the Company or such subsidiaries has employed any financial
advisor, broker or finder or incurred any liability for any financial advisory
fee, broker's fees, commissions or finder's fees in connection with any of the
transactions contemplated hereby.
Section 3.7 Absence of Certain Changes or Events. Except as set forth in
------------------------------------
the Recent SEC Documents filed prior to the date hereof or as set forth in
Section 3.7 of the Company Disclosure Schedule, since September 30, 2000, the
Company and its subsidiaries have conducted their businesses in all material
respects in the ordinary course and in a manner consistent with past practice
except for such deviations as would not reasonably be expected to have a Company
Material Adverse Effect, and, since such date, there has not been any event
that, individually or in the aggregate, has had or would reasonably be expected
to have a Company Material Adverse Effect. Except as set forth in Section 3.7 of
the Company Disclosure Schedule, since September 30, 2000, neither the Company
nor any of its subsidiaries has taken, or failed to take, any action that would
have constituted a breach of Section 5.1 hereof had the covenants therein
applied since that date.
Section 3.8 Legal Proceedings.
-----------------
(a) Except as set forth in Section 3.8 of the Company Disclosure
Schedule, there is no action, suit or proceeding, claim, arbitration or
investigation pending or, to the Company's knowledge, threatened against the
Company or any of its subsidiaries, and neither the Company nor any or its
subsidiaries is a party to any action, suit or proceeding, arbitration or
investigation, which, individually or in the aggregate, would reasonably be
expected to have a Company Material Adverse Effect.
(b) Except as set forth in Section 3.8 of the Company Disclosure
Schedule, there is no injunction, order, judgment, decree or regulatory
restriction imposed upon the Company, any of its subsidiaries or the assets of
the Company or any of its subsidiaries which, when aggregated with all other
such injunctions, orders, judgments, decrees and restrictions, would reasonably
be expected to have a Company Material Adverse Effect.
Section 3.9 Compliance with Applicable Law. Except as disclosed in
------------------------------
Section 3.9 of the Company Disclosure Schedule or in the Recent SEC Documents,
the Company and each of its subsidiaries hold all material licenses, franchises,
permits and authorizations necessary for the lawful conduct of their respective
businesses as presently conducted and are in compliance with the terms thereof,
except where the failure to hold such license, franchise, permit or
authorization or such noncompliance would not, when aggregated with all other
such failures or noncompliance, reasonably be expected to have a Company
Material Adverse Effect, and neither the Company nor any of its subsidiaries
knows of, or has received notice of, any material violations of any applicable
law, statute, order, rule, regulation, policy and/or guideline of any
Governmental Entity relating to the Company or any of its subsidiaries, which,
in the aggregate, would reasonably be expected to have a Company Material
Adverse Effect.
15
Section 3.10 Company Information. The information relating to the
-------------------
Company and its subsidiaries to be provided by the Company for inclusion in the
Proxy Statement, if any, or the Offer Documents, or in any other document filed
with any other Governmental Entity in connection herewith at the respective
times filed with the SEC or such other Governmental Entity and first published,
sent or given to stockholders of the Company and, in addition, in the case of
the Proxy Statement, at the date it or any amendment or supplement is mailed to
holders of the shares of Company Common Stock, at the time of the Special
Meeting and at the Effective Time, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances in which they are made, not misleading.
The Schedule 14D-9 (except that no representation is made by the Company to such
portions thereof that relate only to Parent, Purchaser or any of their
subsidiaries or to statements made therein based on information supplied by
Parent or the Purchaser for inclusion therein) will comply as to form in all
material respects with the provisions of the Exchange Act and the rules and
regulations thereunder.
Section 3.11 Employee Matters.
----------------
(a) The Company has delivered or made available to Parent full and
complete copies or descriptions of each material employment, severance, bonus,
change-in-control, profit sharing, compensation, termination, stock option,
stock appreciation right, restricted stock, phantom stock, performance unit,
pension, retirement, deferred compensation, welfare or other employee benefit
agreement, trust fund or other employee benefit arrangement and any union, guild
or collective bargaining agreement maintained or contributed to or required to
be contributed to by the Company or any of its ERISA Affiliates (as defined
below), for the benefit or welfare of any director, officer, employee or former
employee of the Company or any of its ERISA Affiliates (such plans and
arrangements being collectively the "Company Benefit Plans"). Each of the
Company Benefit Plans is in material compliance with all applicable laws
including the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and the Code except where such noncompliance would not reasonably be
expected to have a Company Material Adverse Effect. The Internal Revenue Service
has determined that each Company Benefit Plan that is intended to be a qualified
plan under Section 401(a) of the Code is so qualified and the Company is aware
of no event occurring after the date of such determination that would adversely
affect such determination. The liabilities accrued under each such plan are
reflected on the latest balance sheet of the Company included in the Recent SEC
Reports in accordance with GAAP applied on a consistent basis. Except as set
forth in Section 3.11(a) of the Company Disclosure Schedule, no condition exists
that is reasonably likely to subject the Company or any of its subsidiaries to
any direct or indirect liability under Title IV of ERISA or to a civil penalty
under Section 502(j) of ERISA or liability under Section 4069 of ERISA or 4975,
4976, or 4980B of the Code or the loss of a federal tax deduction under Section
280G of the Code or other liability with respect to the Company Benefit Plans
that would have a Company Material Adverse Effect and that is not reflected on
such balance sheet. There are no pending or to the Company's knowledge,
threatened, claims (other than routine claims for benefits or immaterial claims)
by, on behalf of or against any of the Company Benefit Plans or any trusts
related thereto except where such claims would not reasonably be expected to
have a Company Material Adverse Effect. "ERISA Affiliate" means, with respect to
any person, any trade or business, whether or not incorporated, that together
with such person would be deemed a "single employer" within the meaning of
Section 4001(a)(15) of the ERISA.
16
(b) Neither the Company nor any of its subsidiaries is a party to, or
bound by, any collective bargaining agreement or other contract or understanding
with a labor union or labor organization. Except for such matters that would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect, as of the date of this Agreement there is no (i) unfair
labor practice, labor dispute or labor arbitration proceeding pending, (ii) to
the knowledge of the Company, any activity or proceeding by a labor union or
representative thereof to organize any employees of the Company or any of its
subsidiaries or (iii) lockout, strike, slowdown, work stoppage or, to the
knowledge of the Company, threat thereof by or with respect to such employees.
Section 3.12 Environmental Matters. Except as set forth in Section 3.12
---------------------
of the Company Disclosure Schedule, there are no legal, administrative, arbitral
or other proceedings, claims, actions, causes of action, required environmental
remediation activities or, to the knowledge of the Company, governmental
investigations of any nature seeking to impose, or that reasonably could be
expected to result in the imposition, on the Company or any of its subsidiaries
of any liability or obligations arising under common law standards relating to
environmental protection, human health or safety, or under any local, state,
federal, national or supernational environmental statute, regulation or
ordinance, including the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (collectively, "Environmental Laws"), pending
or, to the knowledge of the Company, threatened, against the Company or any of
its subsidiaries, which liability or obligation would reasonably be expected to
have a Company Material Adverse Effect. To the knowledge of the Company, during
or prior to the period of (i) its or any of its subsidiaries' ownership or
operation of any of their respective current properties, (ii) its or any of its
subsidiaries' participation in the management of any property, or (iii) its or
any of its subsidiaries' holding of a security interest or other interest in any
property, there was no release or threatened release of hazardous, toxic,
radioactive or dangerous materials or other materials regulated under
Environmental Laws in, on, under or affecting any such property which would
reasonably be expected to have a Company Material Adverse Effect. Neither the
Company nor any of its subsidiaries is subject to any agreement, order,
judgment, decree, letter or memorandum by or with any court, governmental
authority, regulatory agency or third party imposing any material liability or
obligations pursuant to or under any Environmental Law that would reasonably be
expected to have a Company Material Adverse Effect.
Section 3.13 Takeover Statutes. The Company has taken all actions
-----------------
necessary such that no restrictive provision of any "fair price," "moratorium,"
"control share acquisition," "interested shareholder" or other similar
anti-takeover statute or regulation (including, without limitation, Section 203
of the DGCL) (each a "Takeover Statute") or restrictive provision of any
applicable anti- takeover provision in the governing documents of the Company
is, or at the Expiration Date or the Effective Time will be, applicable to the
Company, Parent, the Purchaser, the shares of Company Common Stock, the Offer,
the Merger or any other transaction contemplated by this Agreement.
Section 3.14 Properties. Except as disclosed in the Recent SEC Documents
----------
and for any of the following which would not have a Company Material Adverse
Effect, each of the Company and its subsidiaries (i) has good and indefeasible
title to all the properties and assets reflected on the latest audited balance
sheet included in the Recent SEC Documents as being
17
owned by the Company or one of its subsidiaries or acquired after the date
thereof which are, individually or in the aggregate, material to the Company's
business on a consolidated basis (except properties sold or otherwise disposed
of since the date thereof in the ordinary course of business), free and clear of
(A) all Liens except (1) statutory liens securing payments not yet due and (2)
such imperfections or irregularities of title or other Liens (other than real
property mortgages or deeds of trust) as do not materially affect the use of the
properties or assets subject thereto or affected thereby or otherwise materially
impair business operations at such properties, and (B) all real property
mortgages and deeds of trust except such secured indebtedness as is properly
reflected in the latest audited balance sheet included in the Recent SEC
Documents, and (ii) is the lessee of all leasehold estates reflected in the
latest audited financial statements included in the Recent SEC Documents or
acquired after the date thereof which are material to its business on a
consolidated basis and is in possession of the properties purported to be leased
thereunder, and each such lease is valid without material default thereunder by
the lessee or, to the knowledge of the Company, the lessor.
Section 3.15 Tax Returns and Tax Payments. The Company and its
subsidiaries have timely filed (or, as to subsidiaries, the Company has filed on
behalf of such subsidiaries) all material Tax Returns (as defined below)
required to be filed by it. The Company and its subsidiaries have paid (or, as
to subsidiaries, the Company has paid on behalf of such subsidiaries) all Taxes
(as defined below) shown to be due on such Tax Returns or has provided (or, as
to subsidiaries, the Company has made provision on behalf of such subsidiaries)
reserves in its financial statements for any Taxes that have not been paid,
whether or not shown as being due on any Tax Returns, except such Taxes which,
if unpaid or unreserved, would not reasonably be expected to result in a Company
Material Adverse Effect. Neither the Company nor any of its subsidiaries has
granted any request that remains in effect for waivers of the time to assess any
Taxes. Except as disclosed in Section 3.15 of the Company's Disclosure Schedule,
to the Company's knowledge, no claim for unpaid Taxes has been asserted against
the Company or any of its subsidiaries in writing by a Tax authority which, if
resolved in a manner unfavorable to the Company or any of its subsidiaries, as
the case may be, would reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect. There are no Liens for Taxes upon
the assets of the Company or any subsidiary, except for Liens for Taxes not yet
due and payable or for Taxes that are being disputed in good faith by
appropriate proceedings and with respect to which adequate reserves have been
taken. Except as discussed in Section 3.15 of the Company Disclosure Schedule,
to the Company's knowledge, no audit of any material Tax Return of the Company
or any of its subsidiaries is being conducted by a Tax authority. None of the
Company or any of its subsidiaries has made an election under Section 341(f) of
the Code. Except as disclosed in Section 3.15 of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries has any liability for
Taxes of any person (other than the Company and its subsidiaries) under Treasury
Regulation Section 1.1502-6 (or any comparable provision of state, local or
foreign law). As used herein, "Taxes" shall mean all taxes of any kind,
including, without limitation, those on or measured by or referred to as income,
gross receipts, sales, use, ad valorem, franchise, profits, license, value
added, property or windfall profits taxes, customs, duties, assessments or
similar taxes of any kind whatsoever, together with any interest and any
penalties, additions to tax or additional amounts imposed by any governmental
authority, domestic or foreign. As used herein, "Tax Return" shall mean any
return, report or statement required to be filed with any governmental authority
with respect to Taxes. As used herein, "Code" shall mean the Code and the
Treasury Regulations promulgated thereunder.
18
Section 3.16 Intellectual Property. Except as set forth in Section 3.16
---------------------
of the Company's Disclosure Schedule, the Company or its subsidiaries own, or
are licensed or otherwise possess legally enforceable rights to use all patents,
trademarks, trade names, service marks, copyrights and any applications
therefor, technology, know-how, trade secrets, computer software programs or
applications, domain names and tangible or intangible proprietary information or
materials that are used in the respective businesses of the Company and its
subsidiaries as currently conducted, except for any such failures to own, be
licensed or possess that, individually or in the aggregate, has not had and is
not reasonably likely in the future to have a Company Material Adverse Effect.
All patents, registered trademarks and service marks and registered copyrights
held by the Company or its subsidiaries are subsisting and in force except where
failure to be subsisting and in force would not likely cause a Company Material
Adverse Effect.
Section 3.17 Identified Agreements. Other than the contracts or
---------------------
agreements of the Company included as exhibits to the Recent SEC Documents, and
contracts or agreements between the Company and its subsidiaries or between
subsidiaries of the Company, Section 3.17 of the Company Disclosure Schedule
lists each of the contracts and agreements to which the Company or any of its
subsidiaries is a party as of the date hereof, which are (a) material contracts
or agreements between the Company and any of its affiliates or (b) stockholder,
voting trust or similar contracts or agreements relating to the voting of
Company Common Stock or other equity interests of the Company or any of its
subsidiaries.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
PARENT AND PURCHASER
Parent and Purchaser jointly and severally represent and warrant to
the Company as follows:
Section 4.1 Corporate Organization. Each of Parent and Purchaser is a
----------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the requisite corporate power and authority to
own or lease all of its properties and assets and to carry on its business as it
is now being conducted.
Section 4.2 Authority. Each of Parent and Purchaser has all necessary
---------
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance by Parent and Purchaser of this Agreement, and the consummation of
the transactions contemplated hereby, have been duly authorized and approved by
their Boards of Directors and by Parent as the sole stockholder of Purchaser and
no other corporate action on the part of Parent or Purchaser is necessary to
authorize the execution and delivery by Parent and Purchaser of this Agreement
and the consummation by them of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Parent and Purchaser, and,
assuming due and valid authorization, execution and delivery hereof by the
Company, is a valid and binding obligation of each of Parent and Purchaser,
enforceable against each of them in accordance with its terms, except that such
enforceability may be limited by (a) bankruptcy, insolvency, moratorium or other
similar
19
laws affecting or relating to the enforcement of creditors' rights generally or
(b) general principles of equity.
Section 4.3 Consents and Approvals; No Violation.
------------------------------------
(a) Except for (i) the filing with the SEC of the Offer Documents,
(ii) the filing of the Certificate of Merger with the Secretary of State of the
State of Delaware pursuant to the DGCL, and (iii) filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of, the Securities Act, the Exchange Act, the HSR Act,
the Canadian Competition Act, the Mexican Competition Act or any other
applicable antitrust or competition law, no consents or approvals of, or
filings, declarations or registrations with, any Governmental Entity are
necessary for the consummation by Parent and Purchaser of the transactions
contemplated hereby, other than such other consents, approvals, filings,
declarations or registrations that, if not obtained, made or given, would not
reasonably be expected to have, in the aggregate, a Material Adverse Effect on
Parent (a "Parent Material Adverse Effect").
(b) Neither the execution and delivery of this Agreement by Parent
or Purchaser, nor the consummation by Parent or Purchaser of the transactions
contemplated hereby, nor compliance by Parent or Purchaser with any of the terms
or provisions hereof, will (i) conflict with or violate any provision of the
Restated Certificate of Incorporation or Bylaws of Parent or the Certificate of
Incorporation or Bylaws of Purchaser or (ii) assuming that the authorizations,
consents and approvals referred to in Section 4.3(a) are obtained, (A) violate
any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to Parent or any of its properties or assets, or (B)
violate, conflict with, result in the loss of any material benefit under,
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, result in the termination of or a right of
termination or cancellation under, accelerate the performance required by, or
result in the creation of any Lien upon any of the properties or assets of
Parent or Purchaser under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which Parent or Purchaser is a party, or by
which they or any of their respective properties or assets may be bound or
affected, except, in the case of clause (ii) above, for such violations,
conflicts, breaches, defaults, losses, terminations of rights thereof,
accelerations or Lien creations which, in the aggregate, would not reasonably be
expected to have a Parent Material Adverse Effect.
Section 4.4 Broker's Fees. Neither Parent nor Purchaser nor any of their
-------------
respective officers or directors on behalf of Parent or Purchaser has employed
any financial advisor, broker or finder in a manner that would result in any
liability of the Company for any broker's fees, commissions or finder's fees in
connection with any of the transactions contemplated hereby or that would result
in any reduction of the consideration payable to the stockholders of the
Company.
Section 4.5 Purchaser's Operation and Capitalization. Purchaser was
----------------------------------------
formed solely for the purpose of engaging in the transactions contemplated
hereby and has not engaged in any business activities or conducted any
operations other than in connection with the transactions contemplated hereby.
The authorized capital stock of Purchaser consists of 100
20
shares of common stock, par value $.01 per share, all of which shares have been
validly issued, are fully paid and nonassessable and are owned by Parent free
and clear of any liens.
Section 4.6 Parent or Purchaser Information. The Offer Documents and the
-------------------------------
information relating to Parent and its subsidiaries to be provided by Parent to
be contained in the Proxy Statement, if any, or in any other document filed with
any other Governmental Entity in connection herewith, at the respective time
filed with the SEC or such other Governmental Entity and, in addition, in the
case of the Proxy Statement, at the date it or any amendment or supplement is
mailed to holders of the Shares, at the time of the Special Meeting and at the
Effective Time, will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in light of
the circumstances in which they are made, not misleading. The Offer Documents
and the Proxy Statement, if any, will comply in all material respects with the
provisions of the Exchange Act and the rules and regulations thereunder and the
Securities Act and the rules and regulations thereunder, respectively.
Notwithstanding the foregoing, no representation is made as to those portions of
the Offer Documents or the Proxy Statement that relate only to the Company or
any of its subsidiaries and are based on or incorporated by reference from the
SEC Documents, or as to statements made therein based on information supplied by
the Company for inclusion therein.
Section 4.7 Financing. Parent and Purchaser collectively have and will
---------
have at the Expiration Date of the Offer and at the Effective Time, and Parent
will make available to Purchaser, sufficient funds to enable Purchaser to pay
for all outstanding shares of Company Common Stock purchased pursuant to the
Offer or converted into cash pursuant to the Merger, to perform Parent's and
Purchaser's obligations under this Agreement and to pay all fees and expenses
related to the transactions contemplated by this Agreement payable by them.
Section 4.8 Stock Ownership. As of the date hereof, neither Parent nor
---------------
the Purchaser beneficially owns any Shares.
ARTICLE V
COVENANTS
Section 5.1 Conduct of Businesses Prior to the Effective Time. Except as
-------------------------------------------------
set forth in Section 5.1 of the Company Disclosure Schedule or as expressly
contemplated or permitted by this Agreement, or as required by applicable law,
rule or regulation, during the period from the date of this Agreement to the
earliest to occur of the date of termination of this Agreement, the date when
directors designated by Parent or Purchaser have been elected to and constitute
a majority of the Board or the Effective Time, unless Parent otherwise agrees in
writing, the Company shall, and shall cause its subsidiaries to, in all material
respects, (a) conduct the business of the Company and its subsidiaries as a
whole in the usual, regular and ordinary course consistent with past practice,
(b) use all reasonable efforts consistent with past practice to maintain and
preserve the business organization of the Company and its subsidiaries as a
whole and the good will of those having business relationships with them and (c)
retain (to the extent the Company's management determines it to be in the
Company's best interest) the services of its present officers and key employees.
Without limiting the generality of the foregoing, and except as set forth in
Section 5.1 of the Company Disclosure Schedule, as
21
expressly contemplated or permitted by this Agreement, or as required by
applicable law, rule or regulation, during the period from the date of this
Agreement to the earliest to occur of the date of termination of this Agreement,
the date when directors designated by Parent or Purchaser have been elected to
and constitute a majority of the Board or the Effective Time, the Company shall
not, and shall not permit any of its subsidiaries to, without the prior written
consent of Parent in each instance:
(a) (i) issue, sell, grant, dispose of, pledge or otherwise
encumber, or authorize or propose the issuance, sale, disposition or pledge or
other encumbrance of (A) any additional shares of its capital stock or any
securities or rights convertible into, exchangeable for, or evidencing the right
to subscribe for any shares of its capital stock, or any rights, warrants,
option, calls, commitments or any other agreements of any character to purchase
or acquire any shares of its capital stock or any securities or rights
convertible into, exchangeable for, or evidencing the right to subscribe for,
any shares of capital stock of the Company or any of its subsidiaries, or (B)
any other securities in respect of, in lieu of, or in substitution for, any
shares of capital stock of the Company or any of its subsidiaries outstanding on
the date hereof, other than pursuant to the exercise of Company Stock Options
outstanding as of the date hereof; (ii) redeem, purchase or otherwise acquire,
or propose to redeem, purchase or otherwise acquire, any of its outstanding
shares of capital stock of the Company or any of its subsidiaries; or (iii)
split, combine, subdivide or reclassify any shares of its capital stock or
declare, set aside for payment or pay any dividend, or make any other actual,
constructive or deemed distribution, in respect of any shares of its capital
stock or otherwise make any payments to its stockholders in their capacity as
such; except, in the cases of clauses (i) and (ii), as required by any Company
Benefit Plan or other agreement listed in Section 5.1 of the Company Disclosure
Schedule and existing as of the date hereof;
(b) other than in the ordinary course of business consistent with
past practice, incur any indebtedness for borrowed money or guarantee any such
indebtedness or make any loans, advances or capital contributions to, or
investments in, any other person other than the Company or its subsidiaries,
except for amounts not in excess of $1 million in the aggregate;
(c) sell, transfer, mortgage, encumber or otherwise dispose of any
of its properties or assets with a minimum value in excess of $10 million to any
individual, corporation or other entity other than a direct or indirect wholly
owned subsidiary, or cancel, release or assign any indebtedness in excess of $1
million to any such person or any claims held by any such person, in each case
that is material to the Company and its subsidiaries, taken as a whole, except
(i) in the ordinary course of business consistent with past practice, or (ii)
pursuant to contracts or agreements in force at the date of this Agreement;
(d) other than in the ordinary course of business consistent with
past practice or in fulfillment of agreements listed in Section 5.1 of the
Company Disclosure Schedule and existing as of the date hereof, make any
material acquisition or investment in a business either by purchase of stock or
securities, merger or consolidation, contributions to capital, property
transfers, or purchases of any property or assets of any other individual,
corporation or other entity other than a wholly owned subsidiary thereof;
22
(e) increase in any manner the compensation of any of its
directors, officers or employees or enter into, establish, amend or terminate
any Company Benefit Plans, for or in respect of, any stockholder, officer,
director, other employee, agent, consultant or affiliate other than (i) as
required pursuant to the terms of agreements in effect on the date of this
Agreement, and (ii) increases in salaries, wages and benefits of employees who
are not directors or executive officers of the Company made in the ordinary
course of business and in a manner consistent with past practice;
(f) amend the Company Charter or the Company Bylaws;
(g) waive or fail to enforce any provision of any confidentiality
or standstill agreement to which it is a party; or
(h) make any commitment to take any of the actions prohibited by
this Section 5.1.
Section 5.2 No Solicitation.
---------------
(a) The Company shall immediately cease any discussions or
negotiations with any parties that may be ongoing with respect to a Takeover
Proposal (as hereinafter defined) and shall seek to have returned to the Company
any confidential information that has been provided in any such discussions or
negotiations. From the date hereof, the Company shall not, nor shall it permit
any of its subsidiaries to, nor shall it authorize or permit any of its
officers, directors or employees or any affiliate, investment banker, financial
advisor, attorney, accountant or other representative retained by it or any of
its subsidiaries to, directly or indirectly, (i) solicit, initiate or knowingly
encourage (including by way of furnishing information which has not been
previously publicly disseminated), or take any other action designed to
facilitate, any inquiries or the making of any proposal which constitutes, or
may reasonably be expected to lead to, any Takeover Proposal or (ii) participate
in any discussions or negotiations regarding any Takeover Proposal; provided,
--------
however, that if, prior to the Expiration Date and following the receipt of a
-------
Superior Proposal (as hereinafter defined) or an inquiry, proposal or offer
which is reasonably expected to lead to a Superior Proposal that was unsolicited
and made after the date hereof in circumstances not otherwise involving a breach
of this Agreement, the Board of Directors of the Company determines in good
faith, after considering applicable provisions of state law and after
consultation with outside counsel, that a failure to do so would be inconsistent
with its fiduciary duties to the Company's shareholders under applicable law,
the Company may, in response to such Takeover Proposal and subject to compliance
with Section 5.2(c), (A) furnish information with respect to the Company to the
party making such Takeover Proposal pursuant to a confidentiality agreement,
provided that (1) such confidentiality agreement contains substantially the same
terms as (or terms no less favorable to the Company than) those contained in the
Confidentiality Agreement, dated as of July 25, 2001, by and between the Company
and Purchaser (the "Confidentiality Agreement") and (2) the Company advises
Parent of all such nonpublic information delivered to such person concurrently
with its delivery to the requesting party, and (B) participate in negotiations
with such party regarding such Takeover Proposal. It is agreed that any
violation of the restrictions set forth in the preceding sentence by any
executive officer of the Company or any of its subsidiaries or any affiliate,
director or investment banker, attorney or other advisor or representative of
the
23
Company or any of its subsidiaries, if known by the Company, shall be deemed to
be a breach of this Section 5.2(a) by the Company.
(b) Except as expressly permitted in this Section 5.2, neither the
Board of Directors of the Company nor any committee thereof shall (i) withdraw
or modify, or propose publicly to withdraw or modify, in a manner adverse to
Parent, the approval, determination of advisability, or recommendation by such
Board of Directors or such committee of the Transactions, (ii) approve,
determine to be advisable, or recommend, or propose publicly to approve,
determine to be advisable, or recommend, any Takeover Proposal or (iii) cause
the Company to enter into any letter of intent, agreement in principle,
acquisition agreement or other similar agreement (each, an "Acquisition
Agreement") related to any Takeover Proposal. Notwithstanding the foregoing, in
the event that prior to the Expiration Date the Board of Directors of the
Company determines in good faith, in response to a Superior Proposal that was
unsolicited and made after the date hereof in circumstances not otherwise
involving a breach of this Agreement, after considering applicable provisions of
state law and after consultation with outside counsel, that the failure to do so
would be inconsistent with its fiduciary duties to the Company's stockholders
under applicable law, the Board of Directors of the Company may (subject to this
and the following sentences and to compliance with Section 5.2(a)) (x) withdraw
or modify its approval, determination, or recommendation of the Transactions or
(y) approve, determine to be advisable, or recommend a Superior Proposal, or (z)
cause the Company to enter into an Acquisition Agreement, provided, however,
-------- -------
that any actions described in clause (x), (y) or (z) may be taken only at a time
that is after the second business day following Parent's receipt of written
notice from the Company advising Parent that the Board of Directors of the
Company has received a Superior Proposal, specifying the material terms and
conditions of such Superior Proposal, identifying the person making such
Superior Proposal and providing notice of the determination of the Board of
Directors of the Company of what action referred to herein the Board of
Directors of the Company has determined to take, and further provided, that the
action described in clause (z) may be taken only upon compliance by the Company
with Section 7.1(c)(ii) and Section 7.3.
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 5.2, the Company shall advise Parent
orally and in writing, before 5:00 p.m. Eastern time on the next day following
receipt, of any Takeover Proposal or of any request for confidential information
in the context of a possible Takeover Proposal, the material terms and
conditions of such request or the Takeover Proposal and the identity of the
person making such request or Takeover Proposal and shall keep Parent promptly
advised of all significant developments which could reasonably be expected to
culminate in the Board of Directors of the Company withdrawing, modifying or
amending its recommendation of the Offer, the Merger and the transactions
contemplated by this Agreement, or in exercising any of its other rights under
Section 5.2(a) or (b).
(d) Nothing contained in this Section 5.2 shall prohibit the
Company from taking and disclosing to its stockholders a position contemplated
by Rule 14e-2(a) promulgated under the Exchange Act or from making any
disclosure to the Company's stockholders; provided, however, neither the Company
-------- -------
nor its Board of Directors nor any committee thereof shall, except as in
accordance with Section 5.2(b), withdraw or modify, or propose publicly to
withdraw or modify, its approval, determination or recommendation with
24
respect to the Transactions or approve, determine to be advisable, or recommend,
or propose publicly to approve, determine to be advisable, or recommend, a
Takeover Proposal.
(e) For purposes of this Agreement:
(i) "Takeover Proposal" means any inquiry, proposal or offer
from any person (other than Parent and its subsidiaries, affiliates, and
representatives) relating to any direct or indirect acquisition or purchase of
25% or more of the assets of the Company and its subsidiaries taken as a whole,
or 25% or more of any class of equity securities of the Company or any of its
subsidiaries, any tender offer or exchange offer that if consummated would
result in any person beneficially owning 25% or more of any class of equity
securities of the Company or any of its subsidiaries, or any merger,
consolidation, share exchange, business combination, recapitalization,
liquidation, dissolution or similar transaction involving the Company or any of
its subsidiaries, other than the transactions contemplated by this Agreement.
(ii) For purposes of this Agreement, a "Superior Proposal"
means a bona fide written offer from any person (other than Parent and its
subsidiaries, affiliates and representatives) for a direct or indirect
acquisition or purchase of 50% or more of the assets of the Company and its
subsidiaries taken as a whole or 50% or more of any class of equity securities
of the Company or any of its subsidiaries, any tender offer or exchange offer
that if consummated would result in any person beneficially owning 50% or more
of any class of equity securities of the Company or any of its subsidiaries, or
any merger, consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or similar transaction involving the
Company or any of its subsidiaries, other than the transactions contemplated by
this Agreement, which provides for consideration on a per share basis to the
stockholders of the Company with a value that the Board of Directors of the
Company determines in good faith (after consultation with independent financial
advisors and outside counsel and taking into account all relevant factors,
including whether financing for such offer is committed and the likelihood of
such offer resulting in a consummated transaction) to exceed the Offer Price.
Any Superior Proposal is a Takeover Proposal.
Section 5.3 Publicity. The initial press release with respect to the
---------
execution of this Agreement shall be a joint press release reasonably acceptable
to Parent and the Company. Thereafter, so long as this Agreement is in effect,
none of the Company, Parent, or Purchaser, nor any of their respective
affiliates, shall issue or cause the publication of any press release or other
announcement with respect to the Offer, the Merger, this Agreement or the other
transactions contemplated hereby without the prior consultation of the other
parties, except as may be required by law or by any listing agreement with a
national securities exchange as determined in the good faith judgment of the
party wanting to make such release.
Section 5.4 Notification of Certain Matters. Each of the Company and
-------------------------------
Parent shall give prompt notice to the other if any of the following occur after
the date of this Agreement: (i) receipt of any notice or other communication in
writing from any person alleging that the consent or approval of such third
party is or may be required in connection with the transactions contemplated by
this Agreement; (ii) receipt of any notice or other communication from any
Governmental Entity or the New York Stock Exchange (or any other securities
market) in connection with the transactions contemplated by this Agreement; or
(iii) the occurrence of an
25
event which would or would be reasonably likely in the future to (A) have a
Company Material Adverse Effect or prevent or delay the consummation of the
Offer or the Merger or (B) cause any condition to the Offer set forth in Annex A
hereto to be unsatisfied at any time prior to the consummation of the Offer;
provided, however, that the delivery of any notice pursuant to this Section 5.4
-------- -------
shall not limit or otherwise affect the remedies of the parties available
hereunder.
Section 5.5 Access to Information.
---------------------
(a) Upon reasonable notice and subject to (x) applicable laws
relating to the exchange of information and (y) any obligations to third parties
under a confidentiality agreement listed in Schedule 5.5 of the Company
Disclosure Schedule, the Company shall, and shall cause each of its subsidiaries
to, afford to the officers, employees, accountants, counsel and other
representatives of the Parent, during normal business hours during the period
prior to the Effective Time, reasonable access to all its properties, books,
contracts, commitments and records (with respect to employee records, expressly
excluding all records containing medical information), and to its officers,
employees, accountants, counsel and other representatives and, during such
period, the Company shall, and shall cause its subsidiaries to, make available
to Parent (i) a copy of each report, schedule, registration statement and other
document filed or received by it during such period pursuant to the requirements
of federal securities laws and (ii) all other information concerning its
business, properties and personnel as such other party may reasonably request.
(b) No investigation by any of the parties or their respective
representatives shall affect the representations, warranties, covenants or
agreements of the other set forth herein.
(c) The information provided pursuant to Section 5.5(a) will be
used solely for the purpose of the transactions contemplated hereby, and unless
and until the Merger is consummated, such information will be kept secret and
confidential by Parent and Purchaser, except that the information provided
pursuant to Section 5.5(a) or portions thereof may be disclosed to those of
Parent's and Purchaser's or their affiliates' directors, officers, employees,
agents and advisors (collectively, the "Representatives") who (i) need to know
such information for the purpose of the transactions contemplated hereby, (ii)
shall be advised by Parent or Purchaser, as the case may be, of this provision,
(iii) agree to hold the information provided pursuant to Section 5.5(a) as
secret and confidential and (iv) agree with Parent and Purchaser to be bound by
the provisions hereof. Parent and Purchaser jointly agree to be responsible for
any breach of this section by any of their Representatives. If this Agreement is
terminated, Parent shall, and shall cause the Purchaser and each of their
Representatives to, return or destroy (and certify destruction of) all
information provided pursuant to Section 5.5(a).
Section 5.6 Further Assurances.
------------------
(a) Subject to the terms and conditions of this Agreement, each of
Parent and the Company shall, and shall cause its subsidiaries to, use all
reasonable efforts (i) to take, or cause to be taken, all actions necessary,
proper or advisable to comply promptly with all legal requirements which may be
imposed on such party or its subsidiaries with respect to the Merger and,
subject to the conditions set forth in Article VI hereof, to consummate the
26
transactions contemplated by this Agreement, including, without limitation, the
Offer and the Merger, as promptly as practicable and (ii) to obtain (and to
cooperate with the other party to obtain) any consent, authorization, order or
approval of, or any exemption by, any Governmental Entity and any other third
party which is required to be obtained by the Company or Parent or any of their
respective subsidiaries in connection with the Merger and the other transactions
contemplated by this Agreement, and to comply with the terms and conditions of
any such consent, authorization, order or approval.
(b) Subject to the terms and conditions of this Agreement, each of
Parent and the Company shall use all reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things necessary, proper
or advisable to consummate and make effective, as soon as practicable after the
date of this Agreement, the transactions contemplated hereby, including, without
limitation, using all reasonable efforts to lift or rescind any injunction or
restraining order or other order adversely affecting the ability of the parties
to consummate the transactions contemplated hereby and using all reasonable
efforts to defend any litigation seeking to enjoin, prevent or delay the
consummation of the transactions contemplated hereby or seeking material
damages.
Section 5.7 Indemnification. From and after the date when directors
---------------
designated by Parent or Purchaser have been elected to and constitute a majority
of the Board of Directors of the Company, Parent shall, and shall cause the
Company to, and from and after the Effective Time, Parent shall, and shall cause
the Surviving Corporation to, indemnify, defend and hold harmless each person
who is now, or has been at any time prior to the date of this Agreement or who
becomes such prior to the Effective Time, an officer, director, agent, fiduciary
or employee of the Company or any of its subsidiaries (the "Indemnified
Parties") against (i) any and all losses, claims, damages, costs, expenses,
fines, liabilities or judgments or amounts that are paid in settlement with the
approval of the indemnifying party (which approval shall not be unreasonably
withheld) of or in connection with any claim, action, suit, proceeding or
investigation based in whole or in part on or arising in whole or in part out of
the fact that such person is or was a director, officer, agent, fiduciary or
employee of the Company or any of its subsidiaries whether pertaining to any
action or omission existing or occurring at or prior to the Effective Time and
whether asserted or claimed prior to, or at or after, the Effective Time
("Indemnified Liabilities"), and (ii) all Indemnified Liabilities based in whole
or in part on, or arising in whole or in part out of, or pertaining to this
Agreement or the transactions contemplated hereby; provided, however, that, in
-------- -------
the case of the Purchaser and the Surviving Corporation such indemnification
shall only be to the fullest extent a corporation is permitted under the DGCL,
as applicable, to indemnify its own directors, officers, agents, fiduciaries and
employees, and in the case of Parent, such indemnification shall not be limited
by the DGCL but such indemnification shall not be applicable to any claims made
against the Indemnified Parties if a judgment or other final adjudication
established that (A) their acts or omissions were committed in bad faith or were
the result of active and deliberate dishonesty and were material to the cause of
action so deliberated or (B) arising out of, based upon or attributable to the
gaining in fact of any financial profit or other advantage to which they were
not legally entitled. Parent, Purchaser, and the Surviving Corporation, as the
case may be, will pay all expenses of each Indemnified Party in advance of the
final disposition of any such action or proceeding to the fullest extent
permitted by law upon receipt of any undertaking contemplated by Section 145(e)
of the DGCL. Without limiting the foregoing, in the event any such claim,
action, suit,
27
proceeding or investigation is brought against any Indemnified Party (whether
arising before or after the Effective Time), (i) the Indemnified Parties may
retain counsel satisfactory to them and Parent and Purchaser, (ii) Parent shall,
and shall cause the Surviving Corporation to, pay all reasonable fees and
expenses of such counsel for the Indemnified Parties promptly as statements
therefor are received, and (iii) Parent shall, and shall cause the Surviving
Corporation to, use all reasonable efforts to assist in the vigorous defense of
any such matter, provided that none of Parent, Purchaser or the Surviving
Corporation shall be liable for any settlement of any claim effected without its
written consent, which consent, however, shall not be unreasonably withheld. Any
Indemnified Party wishing to claim indemnification under this Section 5.7, upon
learning of any such claim, action, suit, proceeding or investigation, shall
notify Parent, Purchaser or the Surviving Corporation (but the failure so to
notify an indemnifying party shall not relieve it from any liability which it
may have under this Section 5.7 except to the extent such failure materially
prejudices such party), and shall deliver to the Purchaser and the Surviving
Corporation the undertaking contemplated by Section 145(e) of the DGCL. The
Indemnified Parties as a group may retain only one law firm to represent them
with respect to each such matter unless there is, under applicable standards of
professional conduct, a conflict on any significant issue between the positions
of any two or more Indemnified Parties.
Section 5.8 Employee Benefit Plans. For purposes of all employee benefit
----------------------
plans (as defined in Section 3(3) of ERISA) and other employment agreements,
arrangements and policies of Parent under which an employee's benefits depends,
in whole or in part, on length of service, credit will be given to current
employees of the Company for service with the Company prior to the Effective
Time, provided that such crediting of service does not result in duplication of
benefits. Parent shall, and shall cause the Company to, honor in accordance with
their terms all employee benefit plans (as defined in Section 3(3) of ERISA) and
the other Company Benefit Plans; provided, however, that Parent or the Company
-------- -------
may amend, modify or terminate any individual Company Benefit Plan in accordance
with its terms and applicable law (including obtaining the consent of the other
parties to and beneficiaries of such Company Benefit Plan to the extent required
thereunder).
Section 5.9 Additional Agreements. In case at any time after the
---------------------
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement or to vest the Surviving Corporation with full title
to all properties, assets, rights, approvals, immunities and franchises of any
of the parties to the merger, the proper officers and directors of each party to
this Agreement and their respective subsidiaries shall take all such necessary
action as may be reasonably requested by, and at the sole expense of, Parent.
ARTICLE VI
CONDITIONS TO THE MERGER
Section 6.1 Conditions to Each Party's Obligation To Effect the Merger.
----------------------------------------------------------
The respective obligation of each party to effect the Merger shall be subject to
the satisfaction on or prior to the Closing Date of each of the following
conditions:
28
(a) Stockholder Approval. This Agreement shall have been duly
--------------------
approved and adopted by the requisite vote of the holders of Company Common
Stock, if required by applicable law in order to consummate the Merger;
(b) Statutes; Consents. No statute, rule, order, decree or
------------------
regulation shall have been enacted or promulgated by any Governmental Entity or
authority of competent jurisdiction which prohibits the consummation of the
Merger and all foreign or domestic governmental consents, orders and approvals
required for the consummation of the Merger and the transactions contemplated
hereby shall have been obtained and shall be in effect at the Effective Time;
(c) Injunctions. There shall be no order or injunction of any
-----------
Governmental Entity of competent jurisdiction in effect precluding, restraining,
enjoining or prohibiting consummation of the Merger; provided, however, that
-------- -------
each of the parties hereto shall have used its reasonable best efforts to
prevent the entry of any such injunction or other order and to appeal as
promptly as possible any injunction or other order that may be entered; and
(d) Purchase of Shares in Offer. Purchaser shall have accepted for
---------------------------
payment and purchased all shares of Company Common Stock validly tendered in the
Offer and not withdrawn.
Section 6.2 Conditions to Obligations of Parent and Purchaser to Effect
-----------------------------------------------------------
the Merger. The obligations of Parent and Purchaser to effect the Merger are
----------
subject to the satisfaction of the further condition (which may be waived in
whole or in part by Parent) that the Company shall have performed all
obligations required to be performed by it under this Agreement on or before the
earlier of (i) such time as Parent's or Purchaser's designees shall constitute
at least a majority of the Company's Board of Directors pursuant to Section 1.3
of this Agreement and (ii) the Closing Date.
Section 6.3 Frustration of Closing Conditions. None of the Company,
---------------------------------
Parent or Purchaser may rely on the failure of any condition if such failure was
caused by such party's failure to fulfill in any material respect its
obligations under this Agreement.
ARTICLE VII
TERMINATION
Section 7.1 Termination. Anything herein or elsewhere to the contrary
-----------
notwithstanding, this Agreement may be terminated and the Merger contemplated
herein may be abandoned at any time prior to the Effective Time, whether before
or after stockholder approval thereof:
(a) By the mutual consent of the Parent and the Company.
(b) By either of the Company or Parent:
(i) if any Governmental Entity shall have issued an order,
decree or ruling or taken any other action in each case permanently restraining,
enjoining or
29
otherwise prohibiting the transactions contemplated by this Agreement and such
order, decree, ruling or other action shall have become final and non-
appealable; provided that the party seeking to terminate this Agreement shall
--------
have used all reasonable efforts to challenge such order, decree, ruling or
other action;
(ii) if the Offer shall have expired, terminated or been
withdrawn pursuant to its terms without any Shares being purchased therein,
provided, however, that the right to terminate this Agreement under this Section
-------- -------
7.1(b)(ii) shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or has resulted in, the
failure of the Purchaser to purchase Shares in the Offer; or
(iii) if the Offer shall not have been consummated on or
before October 31, 2001, (the "Outside Date"), provided, that, a party may not
--------
terminate the Agreement pursuant to this Section 7.1(b)(iii) if its failure to
perform any of its obligations under this Agreement results in the failure of
the Offer to be so consummated by such time, provided, however, that the Outside
-------- -------
Date shall be extended day-by-day for each day during which any party shall be
subject to a nonfinal order, decree, ruling or action restraining, enjoining or
otherwise prohibiting the consummation of the Offer, provided further, however,
-------- -------
that the Outside Date shall not be extended past December 31, 2001;
(c) By the Company:
(i) if Parent, the Purchaser or any of their affiliates shall
have failed to commence the Offer on the tenth business day following the date
of the initial public announcement of the execution hereof; provided, that the
--------
Company may not terminate this Agreement pursuant to this Section 7.1(c)(i) if
the Company is in material breach of this Agreement;
(ii) if concurrently it enters into a definitive agreement
providing for a Superior Proposal entered into in accordance with Section 5.2,
provided that prior thereto or simultaneously therewith the Company has paid the
--------
Termination Fee to Parent in accordance with Section 7.3; or
(iii) prior to the acceptance for payment and payment for
Shares in the Offer, if the representations and warranties of Parent or
Purchaser set forth in this Agreement that are qualified by materiality shall
not be true and correct in any respect, or if the representations and warranties
of Parent and Purchaser set forth in this Agreement that are not so qualified
shall not be true and correct in all material respects, in each case as of the
date of this Agreement and as of the Expiration Date as if made on such date, or
either Parent or Purchaser shall have breached or failed in any material respect
to perform or comply with any material obligation, agreement or covenant
required by this Agreement to be performed or complied with by it, which
inaccuracy or breach cannot be cured or has not been cured within fifteen (15)
days after the Company gives written notice of such inaccuracy or breach to
Parent, except, in the case of the failure of any representation or warranty,
for changes specifically permitted by this Agreement, for those representations
and warranties that address matters only as of a particular date and are true
and correct as of such date, and for such failures as do not individually or in
the aggregate have a Parent Material Adverse Effect.
30
(d) By Parent:
(i) if, due to an occurrence that if occurring after the
commencement of the Offer would result in a failure to satisfy any of the
conditions set forth in Annex A hereto, Parent, Purchaser, or any of their
affiliates shall have failed to commence the Offer on the tenth business day
following the date of the initial public announcement of the execution hereof;
provided, that Parent may not terminate this Agreement pursuant to this Section
--------
7.1(d)(i) if Parent is in material breach of this Agreement;
(ii) if the Board of Directors of the Company or any committee
thereof shall have withdrawn or modified, or proposed publicly to withdraw or
modify, in a manner adverse to Parent its approval or recommendation of the
Transactions, or failed to reconfirm its recommendation within five (5) business
days after a written request to do so, or approved or recommended, or proposed
publicly to approve or recommend, any Takeover Proposal, or the Board of
Directors of the Company or any committee thereof shall have resolved to take
any of the foregoing actions; or
(iii) prior to the acceptance for payment and payment for
Shares in the Offer, if the representations and warranties of the Company set
forth in this Agreement that are qualified by materiality shall not be true and
correct in any respect, or if the representations and warranties of the Company
set forth in this Agreement that are not so qualified shall not be true and
correct in all material respects, in each case as of the date of this Agreement
and as of the Expiration Date as if made on such date, or the Company shall have
breached or failed in any material respect to perform or comply with any
material obligation, agreement or covenant required by this Agreement to be
performed or complied with by it, which inaccuracy or breach cannot be cured or
has not been cured within fifteen (15) days after Parent gives written notice of
such inaccuracy or breach to the Company, except, in the case of the failure of
any representation or warranty, for changes specifically permitted by this
Agreement, for those representations and warranties that address matters only as
of a particular date and are true and correct as of such date, and for such
failures as do not individually or in the aggregate have a Company Material
Adverse Effect.
Section 7.2 Effect of Termination. In the event of the termination of
---------------------
this Agreement as provided in Section 7.1, written notice thereof shall
forthwith be given to the other party or parties specifying the provision hereof
pursuant to which such termination is made, and this Agreement (other than
Sections 7.2, 7.3, 8.4, 8.6, 8.7, 8.8 and 8.9 hereof) shall forthwith become
null and void, and there shall be no liability on the part of the Parent,
Purchaser, or the Company, except as provided in Section 7.3 and except for any
breach of this Agreement.
Section 7.3 Termination Fee; Expenses. Except as provided in this
-------------------------
Section 7.3, all fees and expenses incurred by the parties hereto shall be borne
solely by the party which has incurred such fees and expenses. In the event that
(i) a Takeover Proposal shall have been made known to the Company or shall have
been made directly to its stockholders generally or any person shall have
publicly announced an intention (whether or not conditional) to make a Takeover
Proposal and thereafter this Agreement is terminated by the Company either (A)
pursuant to Section 7.1(b)(iii) hereof or (B) if the Offer has remained open for
at least twenty (20) business days and the Minimum Condition has not been
satisfied (and none of the events
31
described in paragraphs (a), (b), (d) and (e) of Annex A shall have occurred so
as to result in a condition to the Offer not being satisfied), pursuant to
Section 7.1(b)(ii), and in either case such Takeover Proposal is consummated
within one (1) year of such termination or (ii) this Agreement is terminated by
Parent pursuant to Section 7.1(d)(ii), or is terminated by the Company pursuant
to Section 7.1(c)(ii), then the Company shall pay to Parent within one (1) day
of such termination, or in the case of subclause (i) upon such consummation, a
termination fee equal to $15 million (the "Termination Fee"), payable by wire
transfer of same day funds. The Company acknowledges that the agreements
contained in this Section 7.3 are an integral part of the transactions
contemplated by this Agreement and that, without these agreements, Parent and
Purchaser would not enter into this Agreement. In the event the Termination Fee
becomes payable pursuant to this Section 7.3, the Company shall also promptly
pay upon Parent's request, all reasonably documented out-of-pocket fees and
expenses incurred by Parent and Purchaser in connection with this Agreement and
the transactions contemplated hereby (which shall not exceed $1 million in the
aggregate), which payments shall be in addition to the Termination Fee. The fee
arrangement contemplated hereby shall be paid pursuant to this Section 7.3
regardless of any alleged breach by Parent of its obligations hereunder;
provided, that no payment made by the Company pursuant to this Section 7.3 shall
--------
operate or be construed as a waiver by the Company of any breach of this
Agreement by Parent or Purchaser or of any rights of the Company in respect
thereof; further provided, that the Termination Fee, if paid, shall be credited
------- --------
against any damages recovered by Parent or Purchaser from the Company arising
from such breach.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Amendment and Modification. Subject to applicable law, this
--------------------------
Agreement may be amended, modified and supplemented in any and all respects,
whether before or after any vote of the stockholders of the Company contemplated
hereby, by written agreement of the parties hereto at any time prior to the
Closing Date with respect to any of the terms contained herein; provided,
--------
however, that no amendment, modification or supplement of this Agreement shall
-------
be made which reduces or changes the form of the Merger Consideration or
otherwise adversely effects such holders after the consummation of the Offer or
requires by law or the organizational documents of the Company the further
approval of the stockholders, unless approved by the Independent Directors and,
if following the vote of the stockholders, then, to the extent required, the
stockholders.
Section 8.2 Extension; Waiver. At any time prior to the Effective Time,
-----------------
the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties contained in this Agreement or in any
document delivered pursuant to this Agreement or (c) subject to the proviso of
Section 8.1, waive compliance with any of the agreements or conditions contained
in this Agreement; provided, in each case with respect to the Company, that any
such extension or waiver to be effected following the acceptance for payment of
and payment for the Shares in the Offer and prior to the Effective Time shall
have been approved by the Independent Directors as provided in Section 1.3. Any
agreement on the part of a party to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of such party.
The failure of any party to this Agreement to assert any of its rights under
this Agreement or
32
otherwise shall not constitute a waiver of such rights. Whenever this Agreement
requires or permits consent by or on behalf of any party hereto, such consent
shall be given in writing in a manner consistent with the requirements for a
waiver of compliance as set forth in this Section 8.2. Purchaser hereby agrees
that any extension, waiver or consent given by Parent hereunder shall be
conclusively binding upon it, whether or not given expressly on Purchaser's
behalf.
Section 8.3 Nonsurvival of Representations and Warranties. None of the
---------------------------------------------
representations and warranties in this Agreement or in any schedule, instrument
or other document delivered pursuant to this Agreement shall survive the
Effective Time.
Section 8.4 Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by an overnight courier service, such as
Federal Express, to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Parent or Purchaser, to:
Berkshire Hathaway Inc.
0000 Xxxxxx Xxxxx
Xxxxx, Xxxxxxxx
Attention: Xxxx X. Hamburg
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxxx, Xxxxxx & Xxxxx LLP
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: R. Xxxxxxx Xxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
(b) if to the Company, to:
XTRA Corporation
000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: A. Xxxxx Xxxxxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
with a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxx, Esq.
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
33
Section 8.5 Counterparts. This Agreement may be executed in two or more
------------
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
Section 8.6 Entire Agreement; Third Party Beneficiaries. This Agreement
-------------------------------------------
(including the documents and the instruments referred to herein): (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, other than the Confidentiality Agreement, and (b) except
as provided in Section 5.7, is not intended to confer upon any person other than
the parties hereto any rights or remedies hereunder. The provisions of Section
5.7 are intended for the benefit of, and shall be enforceable by, the
Indemnified Parties.
Section 8.7 Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated, so long as the economic and legal substance
of the transactions contemplated hereby, taken as a whole, are not affected in a
manner materially adverse to any party hereto.
Section 8.8 Governing Law. This Agreement shall be governed and
-------------
construed in accordance with the laws of the State of Delaware without giving
effect to the principles of conflicts of law thereof or of any other
jurisdiction.
Section 8.9 Assignment. Neither this Agreement nor any of the rights,
----------
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties, except that the Purchaser may assign, in its sole
discretion, any or all of its rights, interests and obligations hereunder to
Parent or to any direct or indirect wholly owned subsidiary of Parent. Subject
to the preceding sentence, this Agreement shall be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns.
Section 8.10 Headings; Interpretation. The descriptive headings used
------------------------
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement. "Include,"
"includes," and "including" shall be deemed to be followed by "without
limitation" whether or not they are in fact followed by such words or words of
like import. "Knowledge" means the actual knowledge of the executive officers of
the Company or Parent, as the case may be.
Section 8.11 Enforcement. The parties agree that irreparable damage
-----------
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to
34
enforce specifically the terms and provisions of this Agreement in any court of
the State of Delaware or of the United States located in the State of Delaware
in the event any dispute arises out of this Agreement or any of the transactions
contemplated by this Agreement, and each party will not attempt to deny or
defeat personal jurisdiction or venue in any such court by motion or other
request for leave from any such court.
35
IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized as
of the date first written above.
Berkshire Hathaway Inc.
By: /s/ Xxxx X. Hamburg
---------------------------------
Name: Xxxx X. Hamburg
Title: Vice President
BX Merger Sub Inc.
By: /s/ Xxxx X. Hamburg
---------------------------------
Name: Xxxx X. Hamburg
Title: President
XTRA Corporation
By: /s/ Xxxxx Xxxxx
---------------------------------
Name: Xxxxx Xxxxx
Title: President and Chief Executive Officer
36
ANNEX A
-------
CONDITIONS TO THE OFFER
-----------------------
Notwithstanding any other provision of the Offer (subject to the
provisions of the Agreement), Purchaser shall not be required to accept for
payment or, subject to any applicable rules and regulations of the SEC,
including Rule 14e-l(c) under the Exchange Act (relating to Purchaser's
obligation to pay for or return tendered Shares promptly after termination or
withdrawal of the Offer), pay for, and may delay the acceptance for payment of
or, subject to the restriction referred to above, the payment for, any tendered
Shares, and may terminate the Offer and not accept for payment any tendered
shares if (i) there shall not have been validly tendered and not withdrawn prior
to the expiration of the Offer such number of Shares which, together with that
number of Shares owned by Parent, Purchaser or any of their wholly owned
subsidiaries, would constitute at least a majority of the Shares outstanding on
a fully diluted basis on the date of purchase (on a "fully diluted basis"
meaning the number of Shares outstanding, together with the Shares which the
Company may be required to issue pursuant to options or obligations outstanding
at that date and which do not terminate upon consummation of the Offer under
employee stock or similar benefit plans or otherwise, whether or not vested or
then exercisable), when aggregated with any Shares owned by Parent, Purchaser or
an affiliate of Parent or Purchaser (the "Minimum Condition"), (ii) any
applicable waiting period under the HSR Act, the Canadian Competition Act, the
Mexican Competition Act or other applicable antitrust or competition law has not
expired or terminated prior to the expiration of the Offer, or (iii) at any time
on or after the date of the Agreement, and before the time of acceptance of
Shares for payment pursuant to the Offer, any of the following events shall
occur and be continuing:
(a) there shall be any statute, rule, regulation, judgment, order
or injunction promulgated, entered, enforced, enacted, issued or applicable to
the Offer or the Merger by any domestic or foreign federal or state governmental
regulatory or administrative agency or authority or court or legislative body or
commission which (1) prohibits, or imposes any material limitations on,
Parent's, Purchaser's, or the Company's ownership or operation of all or a
material portion of the Company's and its subsidiaries' businesses and assets
taken as a whole, (2) prohibits or makes illegal the acceptance for payment,
payment for or purchase of Shares or the consummation of the Offer or the
Merger, (3) renders Purchaser unable to accept for payment, pay for or purchase
some or all of the Shares, or (4) imposes material limitations on the ability of
Purchaser or Parent effectively to exercise full rights of ownership of the
Shares, including, without limitation, the right to vote the Shares purchased by
it on all matters properly presented to the Company's stockholders, provided
that Parent shall have used all reasonable efforts to cause any such judgment,
order or injunction to be vacated or lifted;
(b) there shall be any action or proceeding instituted and pending
by any domestic or foreign federal or state governmental regulatory or
administrative agency or authority having jurisdiction over the Company, Parent
or Purchaser which (1) seeks to prohibit, or impose any material limitation on,
Parent's ownership or operation of its or its subsidiaries' businesses or
assets, or Parent's, Purchaser's, or the Company's ownership or operation of all
or
a material portion of the Company's and its subsidiaries' businesses and assets
taken as a whole, (2) seeks to prohibit or make illegal the acceptance for
payment, payment for or purchase of Shares or the consummation of the Offer or
the Merger, (3) is reasonably likely to result in a material delay in or seeks
to restrict the ability of Purchaser, or render Purchaser unable to accept for
payment, pay for or purchase some or all of the Shares, or (4) seeks to impose
material limitations on the ability of Purchaser or Parent effectively to
exercise full rights of ownership of the Shares, including, without limitation,
the right to vote the Shares purchased by it on all matters properly presented
to the Company's stockholders; provided that Parent shall have used all
--------
reasonable efforts to cause any such action or proceeding to be dismissed;
(c) (1) the representations and warranties of the Company set
forth in the Agreement that are qualified by materiality shall not be true and
correct in any respect, or the representations and warranties of the Company set
forth in this Agreement that are not so qualified shall not be true and correct
in any material respect, in either case, as of the date of consummation of the
Offer as though made on or as of such date, except, in the case of the failure
of any representation or warranty, for changes specifically permitted by the
Agreement, and for those representations and warranties that address matters
only as of a particular date and are true and correct as of such date; and
except that, notwithstanding the failure of any representations and warranties
to be true and correct, if this condition is otherwise satisfied, then this
condition shall be deemed satisfied so long as such failures of representations
and warranties to be true and correct do not individually or in the aggregate
have a Company Material Adverse Effect; or (2) the Company shall have breached
or failed in any material respect to perform or comply with any material
obligation, agreement or covenant required by the Agreement to be performed or
complied with by it (including without limitation if the Company shall have
entered into any definitive agreement or any agreement in principle with any
person with respect to a Takeover Proposal or similar business combination with
the Company in violation of Section 5.2);
(d) (1) any general suspension of trading in securities on any
national securities exchange or in the over-the-counter market, (2) the
declaration of a banking moratorium or any suspension of payments in respect of
banks by a United States Governmental Entity, or (3) any mandatory limitation by
a United States Governmental Entity that materially and adversely effects the
extension of credit by banks or other financial institutions; or
(e) the Agreement shall have been terminated in accordance with
its terms;
which in the reasonable judgment of Parent or Purchaser, in any such case, and
regardless of the circumstances giving rise to such condition, makes it
inadvisable to proceed with the Offer or with such acceptance for payment or
payments for shares of Company Common Stock.
The foregoing conditions are for the sole benefit of Parent and
Purchaser and, subject to the last sentence of Section 1.1(b), may be asserted
by Parent and Purchaser regardless of the circumstances giving rise to any such
condition or may be waived by Parent in whole or in part at any time and from
time to time in its sole discretion.
-2-
EXHIBIT A
STOCKHOLDERS AGREEMENT
