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