Exhibit 2.1
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AGREEMENT AND PLAN OF MERGER
among
TravelCenters of America, Inc.
Hospitality Properties Trust
HPT TA Merger Sub Inc.
and
Oak Hill Capital Partners, L.P.
September 15, 2006
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TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS 1
Section 1.01. Certain Definitions 1
ARTICLE II THE MERGER 6
Section 2.01. The Merger 6
Section 2.02. Effect of Merger 6
Section 2.03. Additional Actions 6
Section 2.04. Certificate of Incorporation By-laws, Directors and
Officers of the Surviving Corporation 7
Section 2.05. Effect of Merger on Capital Stock of Constituent
Corporations 7
Section 2.06. Effect of Merger on Company Stock Options and Company
Warrants 9
Section 2.07. Withholding 10
ARTICLE III PAYMENT OF MERGER CONSIDERATION 10
Section 3.01. Merger Consideration 10
Section 3.02. Post-Closing Adjustment of Merger Consideration 11
Section 3.03. Escrow Agreement and Escrow Fund 14
Section 3.04. Exchange of Certificates Representing Company Securities 14
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY 16
Section 4.01. Organization 16
Section 4.02. Subsidiaries 17
Section 4.03. Capitalization 17
Section 4.04. Authorization 18
Section 4.05. No Violation 18
Section 4.06. Approvals 19
Section 4.07. Financial Statements 19
Section 4.08. Absence of Certain Transactions 20
Section 4.09. Taxes 21
Section 4.10. Litigation 23
Section 4.11. Environmental Matters 23
Section 4.12. Title to Property 25
Section 4.13. Condition of Property 26
Section 4.14. Contracts 26
Section 4.15. Employee and Labor Matters and Plans 27
Section 4.16. Insurance Policies 30
Section 4.17. Intellectual Property 30
Section 4.18. Permits 30
Section 4.19. Compliance with Laws 31
Section 4.20. Brokerage Fees 31
Section 4.21. Affiliate Agreements 31
Section 4.22. No Other Representations or Warranties 31
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB 32
Section 5.01. Organization 32
Section 5.02. Authorization 32
Section 5.03. No Violation 32
Section 5.04. Approvals 33
Section 5.05. Litigation 33
Section 5.06. Available Funds 33
Section 5.07. Brokerage Fees 34
Section 5.08. No Other Representations or Warranties 34
ARTICLE VI COVENANTS 34
Section 6.01. Interim Operations of the Company 34
Section 6.02. Access to Information 36
Section 6.03. Consents and Approvals 37
Section 6.04. Employment Matters 38
Section 6.05. Publicity 39
Section 6.06. Notification of Certain Matters 40
Section 6.07. Directors' and Officers' Indemnification 40
Section 6.08. Additional Agreements 41
Section 6.09. Cooperation with Financing 41
Section 6.10. Conduct of Business of Parent and Merger Sub
Pending the Merger 42
Section 6.11. No Adverse Change in Financial Commitments 42
Section 6.12. Termination of Affiliate Contracts 42
Section 6.13. Stockholder Approval; Stockholder Notice 43
Section 6.14. No Solicitation or Negotiation 43
Section 6.15. Repayment of Outstanding Indebtedness 43
Section 6.16. Consultation 44
Section 6.17. Real Property Matters 44
Section 6.18. Additional Financial Statements 44
Section 6.19. No Control of Other Party's Business 45
ARTICLE VII CONDITIONS 45
Section 7.01. Conditions to the Obligations of All Parties 45
Section 7.02. Conditions to the Obligations of Parent and
Merger Sub 45
Section 7.03. Conditions to the Obligations of the Company 46
ARTICLE VIII CLOSING; TERMINATION 47
Section 8.01. Closing 47
Section 8.02. Termination 48
Section 8.03. Effect of Termination 48
ARTICLE IX GENERAL PROVISIONS 49
Section 9.01. Non-Survival of Representations and Warranties 49
Section 9.02. Costs and Expenses 49
Section 9.03. Notices 49
ii
Section 9.04. Stockholders Representative 51
Section 9.05. Counterparts 51
Section 9.06. Entire Agreement 51
Section 9.07. Governing Law; Exclusive Jurisdiction 51
Section 9.08. Third Party Rights; Assignment 52
Section 9.09. Waivers and Amendments 52
Section 9.10. Schedules 52
Section 9.11. Enforcement 52
Section 9.12. [Reserved.] 53
Section 9.13. Headings; Interpretation 53
Section 9.14. Nonliability of Trustees 53
iii
INDEX OF SCHEDULES
The Disclosure Schedules to the Agreement and Plan of Merger have been
omitted and will be supplementally furnished to the Securities and Exchange
Commission upon request.
iv
INDEX OF DEFINED TERMS
Accounting Firm 12
Actual Balance Sheet 11
Actual Net Working Capital 11
Additional Financial Statements 44
Additional Transaction Bonuses 1
Affiliate 2
Agreement 1
Antitrust Division 37
Balance Sheet Date 19
Certificate of Merger 6
Certificates 14
Closing 47
Closing Date 2
Closing Transaction Bonus Payout Amount 10
Code 2
Company 1
Company Balance Sheet 19
Company Closing Costs 2
Company Common Stock 2
Company Material Adverse Effect 2
Company Preferred Stock 17
Company Securities 13
Company Stock 2
Company Stock Option 9
Company Stock Option Exercise Price 9
Company Subsidiary 2
Company Warrant 2
Company Warrant Exercise Price 9
Confidentiality Agreement 36
Constituent Corporations 6
Covered Parties 40
Covered Party 40
D&T 12
Dataroom 3
Declaration 53
DGCL 1
Dissenting Shares 8
Effective Time 3
Employee Plan 27
Environmental Law 3
Environmental Permit 3
ERISA 3
ERISA Affiliate 3
Escrow Agent 14
Escrow Agreement 14
Escrow Amount 14
Escrow Fund 14
Estimated Merger Consideration 11
Estimated Net Working Capital 11
Estimated Per Share Merger Consideration 11
Excess Payment 13
Exchange Act 3
Exchange Agent 14
Exchange Fund 14
Final Statement 13
Financial Statements 19
Financing 33
Financing Commitment 33
FIRPTA Certificate 15
FTC 37
Fully Diluted Basis 3
GAAP 3
Good Faith Deposit 47
Governmental Antitrust Authority 37
Governmental Entity 3
Hazardous Materials 3
HSR Act 3
Indebtedness 4
Intellectual Property 30
Intercompany Indebtedness 4
Interest Factor 4
IRS 4
Judgment 4
knowledge 4
Law 4
Leased Premises 25
Letter of Transmittal 14
Liabilities 4
Lien 4
Material Contracts 27
Merger 1
Merger Consideration 10
Merger Sub. 1
Net Working Capital 11
Notice of Disagreement 12
Oak Hill 1
v
Owned Property 25
Parent 1
Parent Closing Costs 4
Payment Shortfall 13
Per Share Merger Consideration 11
Permits 5
Person 5
Proceeding 5
PWC 44
Recipients 13
Requisite Regulatory Approvals 5
SEC 5
Secretary of State 6
Securities 41
Securities Act 5
Special Costs 5
Stock Option Plan 9
Stockholder Approval 5
Stockholder Notice 43
Stockholders 1
Stockholders Agreement 5
Stockholders Representative 1
Subsidiary 5
Surveys 26
Surviving Corporation 6
Target Net Working Capital 5
Tax Return 23
Taxes 23
Transaction Bonus Agreements 6
Warrant Agreement 6
Working Capital Adjustment Amount 11
Working Capital Statement 11
Written Consent 1
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (the "AGREEMENT"), dated September
15, 2006, among TravelCenters of America, Inc., a Delaware corporation (the
"COMPANY"), Hospitality Properties Trust, a Maryland real estate investment
trust ("PARENT"), HPT TA Merger Sub Inc., a Delaware corporation and a
wholly-owned subsidiary of Parent ("MERGER SUB"), and Oak Hill Capital Partners,
L.P., a Delaware limited partnership ("OAK HILL"), solely in its capacity as the
representative for the stockholders of the Company as further provided herein
(in such capacity, the "STOCKHOLDERS REPRESENTATIVE").
WHEREAS, the Board of Directors of the Company has (i) determined that
it is in the best interests of the Company and the stockholders of the Company,
and declared it advisable, to enter into this Agreement with Parent and Merger
Sub providing for the merger (the "MERGER") of Merger Sub with and into the
Company in accordance with the General Corporation Law of the State of Delaware
(the "DGCL"), upon the terms and subject to the conditions set forth herein,
(ii) approved this Agreement in accordance with the DGCL, upon the terms and
subject to the conditions set forth herein, and (iii) resolved to recommend
adoption of this Agreement by the stockholders of the Company;
WHEREAS, the Boards of Directors of Parent and Merger Sub have each
approved, and the Board of Directors of Merger Sub has declared it advisable for
Merger Sub to enter into, this Agreement providing for the Merger in accordance
with the DGCL, upon the terms and subject to the conditions set forth herein;
and
WHEREAS, simultaneously herewith, each of the stockholders of the
Company listed on SCHEDULE 4.04(b) hereto (the "STOCKHOLDERS"), who collectively
own in excess of 90% of the voting power of the Company, will execute and
deliver a written consent (the "WRITTEN CONSENT") (i) approving this Agreement,
the Merger and the other transactions contemplated hereby, and (ii) designating
Oak Hill as the Stockholders Representative.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements of the parties hereto contained herein, and other good
and valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, and subject to the satisfaction or waiver of the conditions
hereof, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. CERTAIN DEFINITIONS.
Certain terms used in this Agreement and the Schedules hereto are
defined as follows:
"ADDITIONAL TRANSACTION BONUSES" means the transaction bonuses granted
by the Company to senior executives of the Company between the date hereof and
the Closing Date.
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"AFFILIATE" of a Person shall mean another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person.
"CLOSING DATE" shall mean the date on which the Closing occurs.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMPANY CLOSING COSTS" shall mean (i) any and all costs and expenses
of the Company or its Affiliates incurred prior to the Effective Time in
connection with, or as a result of or related to, the sale process with respect
to the Company and the negotiation, preparation, execution and closing of the
transactions contemplated hereby, including, but not limited to, the fees and
expenses of all professional advisors, investment bankers, brokers, accountants,
attorneys, consultants, engineers and representatives of the Company or its
Affiliates and (ii) the amount of any Additional Transaction Bonuses; PROVIDED,
HOWEVER, any Special Costs shall not be deemed to be, or included in the
calculation of, Company Closing Costs.
"COMPANY COMMON STOCK" shall mean the Common Stock, $0.0001 par value
per share, of the Company.
"COMPANY MATERIAL ADVERSE EFFECT" shall mean any change or effect that
is materially adverse to the business, properties, assets, financial condition
or results of operations of the Company and the Company Subsidiaries taken as a
whole, other than any change or effect resulting from (i) changes in general
economic conditions, (ii) general changes or developments in the industries in
which the Company and the Company Subsidiaries operate, including changes in
refined product margin, (iii) the announcement of this Agreement and the
transactions contemplated hereby, including any termination of, reduction in or
similar negative impact on relationships, contractual or otherwise, with any
customers, suppliers, distributors, partners or employees of the Company and the
Company Subsidiaries, or the performance of this Agreement and the transactions
contemplated hereby, including compliance with the covenants set forth herein,
(iv) changes in any Tax Laws or applicable accounting regulations or principles
or (v) any attack on, or by, outbreak or escalation of hostilities or acts of
terrorism involving, the United States, any declaration of war by the United
States or any other national or international calamity, unless, in the case of
the foregoing clauses (i) and (ii), such changes referred to therein have a
materially disproportionate effect on the Company and the Company Subsidiaries
taken as a whole relative to other participants in the industries in which the
Company and the Company Subsidiaries operate.
"COMPANY STOCK" shall mean all shares of the Company's capital stock
authorized, issued or outstanding prior to the Effective Time, of whatever class
or series, including all of the Company Common Stock.
"COMPANY SUBSIDIARY" shall mean any Subsidiary of the Company.
"COMPANY WARRANT" shall mean each Initial Warrant or Contingent
Warrant (as defined in the Warrant Agreement) issued by the Company to purchase
shares of Company Common Stock.
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"DATAROOM" shall mean the online data rooms (Intralinks and ENFOS)
established by Xxxxxx Brothers for purposes of the transactions contemplated by
this Agreement.
"EFFECTIVE TIME" shall mean such date and time as mutually agreed by
the parties hereto and set forth in the Certificate of Merger.
"ENVIRONMENTAL LAW" shall mean any and all applicable Laws of any
Governmental Entity relating to protection of natural resources, the environment
or human health (as relating to exposure to hazardous or toxic substances,
materials or chemicals including petroleum, gasoline, diesel fuel, asbestos and
polychlorinated biphenyls).
"ENVIRONMENTAL PERMIT" shall mean any license, permit, authorization
or registration required by any Environmental Law for the operation of business
of the Company or any Company Subsidiary.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA AFFILIATE" shall mean each trade or business (whether or not
incorporated) which together with the Company would be deemed to be a 'single
employer' within the meaning of Section 4001(b)(1) of ERISA or subsections (b),
(c), (m) or (o) of Section 414 of the Code.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"FULLY DILUTED Basis" means, when used with respect to the outstanding
number of shares of Company Stock as of any date, the sum of (i) all shares of
Company Stock outstanding on that date PLUS (ii) the number of shares of Company
Common Stock issuable upon the exercise, exchange or conversion of (A) all
Company Stock Options vested prior to the date hereof and vesting and
exercisable at the Effective Time pursuant to their terms and (B) the Company
Warrants.
"GAAP" shall mean United States generally accepted accounting
principles consistently applied.
"GOVERNMENTAL ENTITY" shall mean any federal, state, local or foreign
government or political subdivision thereof, or any court, administrative agency
or commission, or other governmental authority or instrumentality or any
subdivision thereof.
"HAZARDOUS MATERIALS" shall mean any substance, material, waste,
pollutant, or contaminant that is regulated as toxic or hazardous or other term
of similar regulatory import or that is subject to remedial, investigatory or
reporting obligations under any Environmental Law including petroleum and
petroleum products (including oil, gasoline and diesel fuel), friable asbestos
and polychlorinated biphenyls.
"HSR ACT" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, and the rules and regulations thereunder.
3
"INDEBTEDNESS" means, with respect to the Company and the Company
Subsidiaries, without duplication and exclusive of Intercompany Indebtedness,
all indebtedness for borrowed money, including the aggregate principal amount
of, and any accrued interest and applicable prepayment charges or premiums
(including any "make-whole" or similar premium or penalty payable in connection
with redemption or otherwise extinguishing such indebtedness whether or not then
due) with respect to all borrowed money, purchase money financing and
capitalized lease obligations.
"INTERCOMPANY INDEBTEDNESS" means, with respect to the Company and the
Company Subsidiaries, all outstanding Indebtedness owed by the Company or any
Company Subsidiary to the Company or any other Company Subsidiary.
"INTEREST FACTOR" means an amount equal to the Merger Consideration
(calculated excluding the Interest Factor) times the interest rate set forth in
SCHEDULE 1.01 hereto (accruing on a per diem basis), compounded monthly, for the
period, if any, from and including February 1, 2007 to and including the Closing
Date.
"IRS" shall mean the United States Internal Revenue Service, or any
successor agency thereto.
"JUDGMENT" shall mean any and all judgments, orders, writs,
directives, rulings, decisions, injunctions (temporary, preliminary or
permanent), decrees or awards of any Governmental Entity.
"KNOWLEDGE" in the phrase "TO ITS KNOWLEDGE" or a similar phrase, when
used to qualify a representation of a party, shall be deemed to be the actual
knowledge, after reasonable investigation, of (i) the individuals listed on
SCHEDULE 1.01(a) hereto, if the Company is making such representation, and (ii)
the individuals listed on SCHEDULE 1.01(b) hereto, if Parent or Merger Sub is
making such representation, in each case, at the time such representation is
made.
"LAW" shall mean all laws (whether statutory or otherwise),
ordinances, codes, rules, regulations and Judgments of all Governmental
Entities.
"LIABILITIES" shall mean any liabilities or obligations of any nature,
whether accrued, absolute, contingent or otherwise, whether due or to become
due.
"LIEN" shall mean, with respect to any property or asset, any
mortgage, pledge, security interest, lien (statutory or other), charge,
encumbrance or other similar restrictions or limitations of any kind or nature
whatsoever on or with respect to such property or asset.
"PARENT CLOSING COSTS" shall mean any and all costs and expenses of
Parent, Merger Sub or their Affiliates incurred in connection with, or as a
result of, the negotiation, preparation, execution and closing of the
transactions contemplated hereby, including, but not limited to, the fees and
expenses of all professional advisors, investment bankers, brokers, accountants,
attorneys, consultants, engineers and representatives of Parent, Merger Sub or
their Affiliates.
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"PERMITS" shall mean all franchises, licenses, authorizations,
approvals, permits (excluding Environmental Permits), consents or other rights
granted by any Governmental Entity and all certificates of convenience or
necessity, immunities, privileges, licenses, concessions, consents, grants,
ordinances and other rights, of every character whatsoever required for the
conduct of business and the use of properties by the Company and the Company
Subsidiaries as currently conducted or used.
"PERSON" shall mean any individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization or other
entity or government or any agency or political subdivision thereof.
"PROCEEDING" shall mean any action, claim, suit, or legal,
administrative, arbitration or other alternative dispute resolution proceeding
or investigation.
"REQUISITE REGULATORY APPROVALS" shall mean all permits, approvals,
consents and filings required to be obtained or made with or by any Governmental
Entity under any Law or Judgment, and all waiting periods required to expire
prior to the Merger under applicable Laws, including notifications, approvals
and filings pursuant to the HSR Act.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"SPECIAL COSTS" shall mean (i) any costs incurred by the Company
related to the Evaluation of Environmental Liabilities Associated with
TravelCenters of America, dated August 2006, prepared by Environ International
Corporation, (ii) any and all costs and expenses incurred by the Company in
connection with any title searches, title insurance commitments or title
insurance policies, including endorsements, obtained in connection with the
Merger or the Financing, and (iii) any and all out of pocket costs and expenses,
as specifically requested or approved by Parent or Merger Sub in writing, (x)
paid by the Company or any Company Subsidiary prior to the Effective Time or (y)
accrued by the Company or any Company Subsidiary on the Actual Balance Sheet, in
order for the Company or any Company Subsidiary to comply with its obligations
pursuant to Section 6.09 or otherwise.
"STOCKHOLDER APPROVAL" shall mean the adoption and approval of this
Agreement and the Merger by the affirmative vote of or the written consent by
the holders of a majority of outstanding shares of all classes of the Company
Stock voting together as a single class.
"STOCKHOLDERS AGREEMENT" shall mean the Stockholders' Agreement, dated
as of November 14, 2000, as amended, among the Company, the Stockholders
Representative, the other Stockholders and the other parties thereto.
"SUBSIDIARY" shall mean, in respect of any specified Person, any
company or other entity of which 50% or more of the outstanding share capital or
other equity interest is owned, directly or indirectly, by such specified
Person.
"TARGET NET WORKING CAPITAL" shall mean $100,000,000.
5
"TRANSACTION BONUS AGREEMENTS" shall mean those agreements between the
Company and certain employees of the Company or a Company Subsidiary set forth
on SCHEDULE 3.01(ix).
"WARRANT AGREEMENT" shall mean that Warrant Agreement, dated as of
November 14, 2000, as amended, between the Company and State Street Bank and
Trust Company, as warrant agent.
ARTICLE II
THE MERGER
SECTION 2.01. THE MERGER.
On the Closing Date, subject to the terms and conditions of this
Agreement, Merger Sub shall be merged with and into the Company in accordance
with the DGCL, with the Company being the surviving corporation (following the
Merger, the "SURVIVING CORPORATION"). The Company and Merger Sub are sometimes
collectively referred to as the "CONSTITUENT CORPORATIONS." The Merger shall be
effective at the Effective Time when a Certificate of Merger, together with any
other documents required by the Laws of the State of Delaware to effectuate the
Merger (collectively, the "CERTIFICATE OF MERGER"), properly executed shall be
filed with the Secretary of State of the State of Delaware (the "SECRETARY OF
STATE"), which filing shall be made on the Closing Date, as provided for in
Section 8.01(a).
SECTION 2.02. EFFECT OF MERGER.
By virtue of the Merger, as of the Effective Time, all rights,
privileges, immunities, powers and purposes of the Company and Merger Sub, and
all the property, real and personal, including causes of action, and every other
asset of the Company and Merger Sub, shall vest in the Surviving Corporation,
without any further act or deed, and the separate existence of Merger Sub shall
cease and the corporate existence of the Company as the Surviving Corporation
and a corporation organized under the DGCL shall continue unaffected and
unimpaired by the Merger. The Surviving Corporation shall assume and be liable
for all the Liabilities, obligations and penalties of the Company and Merger
Sub. No liability or obligation due or to become due, and no claim or demand for
any cause of action existing against either the Company or Merger Sub, or any
stockholder, officer or director thereof, shall be released or impaired by the
Merger. No Proceeding, whether civil or criminal, then pending by or against
either the Company or Merger Sub or any stockholder, officer or director
thereof, shall xxxxx or be discontinued as a result of or by the Merger, but may
be enforced, prosecuted, settled or compromised as if the Merger had not
occurred, or the Surviving Corporation may be substituted in such Proceeding in
place of either the Company or Merger Sub.
SECTION 2.03. ADDITIONAL ACTIONS.
If, at any time after the Effective Time, the Surviving Corporation
shall consider or be advised that any deeds, bills of sale, assignments,
assurances or any other actions or things are necessary or desirable to (i)
vest, perfect or confirm, of record or otherwise, in the Surviving Corporation,
its right, title or interest in, to or under, any of the rights, properties or
assets of the
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Company or Merger Sub acquired or to be acquired by the Surviving Corporation as
a result of, or in connection with, the Merger or (ii) otherwise carry out the
purposes of this Agreement, the Company and its officers and directors and
Merger Sub and its officers and directors shall be deemed to have granted the
Surviving Corporation an irrevocable power of attorney to execute and deliver
all such deeds, bills of sale, assignments and assurances and to take and do all
such other actions and things as may be necessary or desirable to vest, perfect
or confirm any and all rights, title, properties or assets in the Surviving
Corporation or to otherwise carry out the purposes of this Agreement; and the
officers and directors of the Surviving Corporation are fully authorized in the
name of the Company and of Merger Sub or otherwise to take any and all such
actions.
SECTION 2.04. CERTIFICATE OF INCORPORATION BY-LAWS, DIRECTORS AND
OFFICERS OF THE SURVIVING CORPORATION.
(a) At the Effective Time, the certificate of incorporation of the
Surviving Corporation shall, subject to the requirements of Section 6.07(b)
hereof, be amended to read in its entirety as the certificate of incorporation
of Merger Sub read immediately prior to the Effective Time, except that the name
of the Surviving Corporation shall be TravelCenters of America, Inc. and the
provision in the certificate of incorporation of Merger Sub naming its
incorporator shall be omitted.
(b) At the Effective Time, the by-laws of the Surviving Corporation
shall, subject to the requirements of Section 6.07(b) hereof, be amended so as
to read in their entirety as the by-laws of Merger Sub as in effect immediately
prior to the Effective Time, until thereafter amended in accordance with
applicable Law, except the references to Merger Sub's name shall be replaced by
references to TravelCenters of America, Inc.
(c) The directors of the Company immediately prior to the Effective
Time shall submit their resignations to be effective as of the Effective Time.
Immediately after the Effective Time, Parent shall take the necessary action to
cause the directors of Merger Sub immediately prior to the Effective Time to be
the directors of the Surviving Corporation, each to hold office in accordance
with the certificate of incorporation and by-laws of the Surviving Corporation
and applicable Law. The officers of the Company immediately prior to the
Effective Time shall be the initial officers of the Surviving Corporation, each
to hold office until the earlier of their resignation or removal.
SECTION 2.05. EFFECT OF MERGER ON CAPITAL STOCK OF CONSTITUENT
CORPORATIONS.
At the Effective Time, by virtue of the Merger and without any action
on the part of the holders of any class of capital stock of the Constituent
Corporations, the following shall occur:
(a) CONVERSION OF COMPANY STOCK. Each share of Company Stock issued
and outstanding immediately prior to the Effective Time (other than (x) shares
to be canceled pursuant to Section 2.05(c) and (y) Dissenting Shares) shall, at
the Effective Time, by virtue of the Merger and without any action on the part
of the holder thereof, be converted into the right to receive cash from Parent
in an amount equal to the Per Share Merger Consideration payable to
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the holder thereof, without interest thereon, upon the surrender of the
certificate previously representing such share of Company Common Stock.
(b) SHARES OF MERGER SUB. Each share of the common stock, $0.01 par
value per share, of Merger Sub, issued and outstanding immediately prior to the
Effective Time, shall, at the Effective Time, by virtue of the Merger and
without any action on the part of Merger Sub or any other Person, be converted
into one fully paid and nonassessable share of common stock, $0.01 par value per
share, of the Surviving Corporation.
(c) TREASURY SHARES OF COMPANY; PARENT OWNED SHARES. All shares of
Company Stock held in the treasury of the Company and each share of Company
Stock owned or otherwise held by Parent, Merger Sub or any direct or indirect
wholly-owned subsidiary of Parent or the Company immediately prior to the
Effective Time shall be canceled and retired without any conversion thereof and
no payment or distribution shall be made with respect thereto.
(d) SHARES OF DISSENTING STOCKHOLDERS.
(i) Notwithstanding anything in this Agreement to the contrary,
any shares of Company Stock that are issued and outstanding as of the
Effective Time and that are held by a holder who has properly exercised
such holder's appraisal rights (the "DISSENTING SHARES") under the DGCL
shall not be converted into the right to receive the consideration provided
for in this Section 2.05, unless and until such holder shall have failed to
perfect, or shall have effectively withdrawn or lost, his or her right to
dissent from the Merger under the DGCL and to receive such consideration as
may be determined to be due with respect to such Dissenting Shares pursuant
to and subject to the requirements of the DGCL. If any such holder shall
have so failed to perfect or have effectively withdrawn or lost such right,
each share of such holder's Company Stock shall thereupon be deemed to have
been converted into and to have become, as of the Effective Time, the right
to receive, without any interest thereon, the consideration provided for in
this Section 2.05.
(ii) The Company shall give Parent prompt notice of any notice or
demands for appraisal or payment for shares of Company Stock received by
the Company. The Company shall not, without the prior written consent of
Parent (not to be unreasonably withheld), make any payment with respect to,
or settle, offer to settle or otherwise negotiate, with respect to any such
demands.
(iii) Dissenting Shares, if any, after payments of fair value in
respect thereto have been made to the holders thereof pursuant to the DGCL,
shall be canceled.
(e) STOCK TRANSFER BOOKS. At the Effective Time, the stock transfer
books of the Company shall be closed and there shall be no further registration
of transfers of shares of Company Stock on the records of the Company. If, after
the Effective Time, certificates previously representing shares of Company Stock
are presented to the Surviving Corporation, they shall be canceled and exchanged
for cash pursuant to the provisions of this Section 2.05.
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(f) CANCELLATION AND RETIREMENT OF SHARES OF COMPANY STOCK. At and
after the Effective Time, holders of certificates which immediately prior to the
Effective Time represented outstanding shares of Company Stock shall cease to
have any rights as stockholders of the Company, except the right to receive the
cash into which their shares of Company Stock have been converted by the Merger
as provided in Section 2.05(a).
SECTION 2.06. EFFECT OF MERGER ON COMPANY STOCK OPTIONS AND COMPANY
WARRANTS.
(a) At the Effective Time, each stock option granted under the 2001
Stock Incentive Plan of TravelCenters of America, Inc. (the "2001 STOCK OPTION
PLAN") that is outstanding and unexercised at the Effective Time (a "COMPANY
STOCK OPTION") shall be cancelled at the Effective Time. In exchange for such
cancellation, the holder of such Company Stock Option shall receive the right to
payment from Parent immediately following the Effective Time (subject to any
applicable withholding taxes), in respect of the portion of the Company Stock
Option that is exercisable at the Effective Time by its terms (prior to giving
effect to such cancellation), of an amount in cash equal to (1) the total number
of shares of Company Common Stock subject to such exercisable portion of such
Company Stock Option held by such holder, MULTIPLIED BY (2) the excess, if any,
of the Per Share Merger Consideration (calculated based on the Estimated Merger
Consideration, subject to subsequent adjustment pursuant to Section 3.02) over
the exercise price per share of the Company Stock set forth in such Company
Stock Option subject to such exercisable portion of such Company Stock Option
held by such holder (such exercise price, the "COMPANY STOCK OPTION EXERCISE
PRICE").
(b) As soon as practicable following the date of this Agreement, the
Company shall use commercially reasonable efforts to take such actions and
obtain such consents as are necessary under the Warrant Agreement to amend the
Warrant Agreement in order to provide that each Company Warrant that is
outstanding and unexercised at the Effective Time shall be cancelled at the
Effective Time. In exchange for such cancellation, the holders of the Company
Warrants shall receive the right to payment from Parent immediately following
the Effective Time (subject to any applicable withholding taxes), of an amount
in cash equal to (1) the total number of shares of Company Common Stock for
which such Company Warrant was exercisable for immediately prior to
cancellation, MULTIPLIED BY (2) the excess of the Per Share Merger Consideration
(calculated based on the Estimated Merger Consideration, subject to subsequent
adjustment pursuant to Section 3.02) over the exercise price per share of the
Company Common Stock set forth in such Company Warrant (such exercise price, the
"COMPANY WARRANT EXERCISE PRICE"). If the Warrant Agreement is not so amended,
immediately following the Effective Time, Parent shall deposit with the Warrant
Agent (as defined in the Warrant Agreement) an amount equal to the excess of the
Per Share Merger Consideration (calculated based on the Estimated Merger
Consideration, subject to subsequent adjustment pursuant to Section 3.02)
multiplied by the total number of shares of Company Common Stock for which all
Company Warrants were exercisable for immediately prior to the Effective Time
over the aggregate sum of the Company Warrant Exercise Price for all Company
Warrants outstanding and unexercised immediately prior to the Effective Time.
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SECTION 2.07. WITHHOLDING.
Each of Parent and the Surviving Corporation shall be entitled to
deduct and withhold from the consideration otherwise payable to any Person under
this Article II, such amounts as are required to be deducted and withheld under
any provision of applicable Law.
ARTICLE III
PAYMENT OF MERGER CONSIDERATION
SECTION 3.01. MERGER CONSIDERATION.
The "MERGER CONSIDERATION" shall be an amount equal to:
(i) One billion, nine hundred twenty-five million Dollars
($1,925,000,000.00),
(ii) PLUS the aggregate sum of the Company Stock Option
Exercise Price for all Company Stock Options (or portions
thereof) that are exercisable at the Effective Time by
their terms,
(iii) PLUS the aggregate sum of the Company Warrant Exercise
Price for all Company Warrants,
(iv) PLUS an amount equal to any Special Costs to the extent
paid prior to the Effective Time or accrued as a Liability
on the Actual Balance Sheet,
(v) MINUS the aggregate amount of Indebtedness of the Company
and the Company Subsidiaries as of the close of business
on the day immediately preceding the Closing Date,
(vi) MINUS the amount, if any, by which the Estimated Net
Working Capital (as defined below) is less than the Target
Net Working Capital;
(vii) PLUS the amount, if any, by which the Estimated Net
Working Capital is greater than the Target Net Working
Capital;
(viii) PLUS OR MINUS, as the case may be, the amount of any
upward or downward adjustment (if any) of the Merger
Consideration, respectively, pursuant to Section 3.02 in
an amount equal to the Working Capital Adjustment Amount
(as defined below),
(ix) MINUS 50% of the aggregate amount of all amounts payable
to employees of the Company or a Company Subsidiary
pursuant to the Transaction Bonus Agreements (the "CLOSING
TRANSACTION BONUS PAYOUT AMOUNT");
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(x) MINUS the amount of any Company Closing Costs to the
extent payable by the Company or a Company Subsidiary
after the close of business on the day immediately
preceding the Closing Date; and
(xi) PLUS an amount equal to the Interest Factor.
The "PER SHARE MERGER CONSIDERATION" shall be (A) the Merger Consideration
DIVIDED BY (B) the aggregate number of shares of Company Stock outstanding
immediately prior to the Effective Time (calculated on a Fully Diluted Basis).
The "ESTIMATED MERGER CONSIDERATION" and the "ESTIMATED PER SHARE MERGER
CONSIDERATION" shall mean the Merger Consideration and the Per Share Merger
Consideration (in each case, calculated without giving effect to Section
3.01(viii)) as estimated in good faith by the Company no more than three (3)
days prior to the Closing. Copies of such estimates (and the Company's
calculation thereof) shall be provided to Parent and Merger Sub prior to the
Closing Date.
SECTION 3.02. POST-CLOSING ADJUSTMENT OF MERGER CONSIDERATION.
(a) ESTIMATED NET WORKING CAPITAL. The Company shall, concurrently
with the delivery to Parent and Merger Sub of its calculations of the Estimated
Merger Consideration and Estimated Per Share Merger Consideration, cause to be
prepared and delivered to Parent and Merger Sub a statement setting forth the
estimated calculation of the Net Working Capital (as defined below) (the
"ESTIMATED NET WORKING CAPITAL") as of the close of business on the day
immediately preceding the Closing Date. "NET WORKING CAPITAL" shall mean the
current assets less the current liabilities of the Company and the Company
Subsidiaries, all as determined in accordance with GAAP applied in a manner
consistent with the Company Balance Sheet; PROVIDED that, in determining Net
Working Capital, the following shall be excluded: (i) the current portion of any
Indebtedness; (ii) Company Closing Costs to the extent a deduct in calculating
the Merger Consideration pursuant to Section 3.01(x) and (iii) the Closing
Transaction Bonus Payout Amount.
(b) ACTUAL BALANCE SHEET AND WORKING CAPITAL STATEMENT. Within
forty-five (45) days following the Closing Date, Parent shall deliver to the
Stockholders Representative and the Escrow Agent a consolidated balance sheet of
the Company and the Company Subsidiaries as of the close of business on the day
immediately preceding the Closing Date prepared in accordance with GAAP applied
on a basis consistent with the Company Balance Sheet and shall reflect a pro
rata portion of all known adjustments which would be required in a year-end
closing of the books of the Company and the Company Subsidiaries but shall not
give effect to any changes in accruals (including tax accruals with respect to
the exercise or cancellation of Company Stock Options between January 1, 2006
and the Effective Time) for any items resulting from the transactions
contemplated hereby (the "ACTUAL BALANCE SHEET"). The Actual Balance Sheet shall
be accompanied by a statement, certified by the Chief Financial Officer of the
Surviving Corporation (the "WORKING CAPITAL STATEMENT"), that sets forth in
reasonable detail the Actual Net Working Capital, the Working Capital Adjustment
Amount, and the final calculation of the Merger Consideration. The "ACTUAL NET
WORKING CAPITAL" shall mean the Net Working Capital of the Company and the
Company Subsidiaries as of the close of business on the day immediately
preceding the Closing Date. The "WORKING CAPITAL ADJUSTMENT AMOUNT" shall mean
the difference between the Estimated Net Working Capital and the Actual Net
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Working Capital. The Surviving Corporation shall give the Stockholders
Representative reasonable access to its books, records, work papers (including,
to the extent applicable, accountants' work papers, subject to such
confidentiality restrictions as the Surviving Corporation's accountants shall
reasonably request) and employees in connection with the review by the
Stockholders Representative of the Actual Balance Sheet and the Working Capital
Statement. In the course of preparing the Actual Balance Sheet and the Working
Capital Statement, Parent may consult with the Stockholders Representative in
order to resolve any issues that otherwise might become the subject of a dispute
under Section 3.02(c).
(c) DISPUTE RESOLUTION. The Stockholders Representative may dispute
the calculation of the Actual Net Working Capital, the Working Capital
Adjustment Amount or the calculation of the Merger Consideration set forth in
the Working Capital Statement by delivering a written notice (a "NOTICE OF
DISAGREEMENT") to Parent, the Surviving Corporation and the Escrow Agent within
thirty (30) days following the delivery of the Working Capital Statement to the
Stockholders Representative. Any Notice of Disagreement delivered pursuant to
this Section 3.02(c) shall specify in reasonable detail the nature and dollar
amount of any disagreement so asserted. If the Stockholders Representative fails
to deliver a timely Notice of Disagreement, Parent's calculation of the Actual
Net Working Capital, the Working Capital Adjustment Amount or the calculation of
the Merger Consideration (as set forth in the Working Capital Statement) shall
be deemed the final Actual Net Working Capital, the Working Capital Adjustment
Amount and/or Merger Consideration, as applicable. During the thirty (30) days
following the delivery of a Notice of Disagreement, Parent and the Stockholders
Representative shall seek in good faith to resolve in writing any differences
which they may have with respect to the matters specified in the Notice of
Disagreement and such final resolution shall be the final Merger Consideration.
If at the end of such 30-day period, the parties are unable to resolve such
dispute, the parties shall submit the dispute to Deloitte & Touche LLP ("D&T")
or, if D&T is unavailable, another mutually satisfactory (to Parent and the
Stockholders Representative) independent "big-four" accounting firm (the
"ACCOUNTING FIRM") for its review and resolution of all matters (but only such
matters) which remain in dispute and which were properly included in the Notice
of Disagreement, and the Accounting Firm shall make final determinations of the
Actual Net Working Capital, the Working Capital Adjustment Amount and/or the
Merger Consideration in accordance with the guidelines and procedures set forth
in this Agreement. If the parties are unable to mutually agree on the selection
of the Accounting Firm, the "big-four" accounting firm that is not D&T or the
independent public accountants of the Company and Parent shall serve as the
Accounting Firm. The parties will cooperate with the Accounting Firm during the
term of its engagement. In resolving any matters in dispute with respect to any
assets or liabilities as to which both the Stockholders Representative and
Parent have assigned values, the Accounting Firm may not assign a value to any
item in dispute greater than the greatest value for such item assigned by the
Stockholders Representative, on the one hand, or by Parent, on the other hand,
or less than the smallest value for such item assigned by the Stockholders
Representative, on the one hand, or by Parent, on the other hand. The Accounting
Firm's determination will be based solely on presentations (including work
papers) by the Stockholders Representative and Parent or by their respective
representatives which are in accordance with the guidelines and procedures set
forth in this Agreement (I.E., not on the basis of an independent review). The
determination of the Actual Net Working Capital, Working Capital Adjustment
Amount and the Merger Consideration shall become final and binding on the
parties and such determination of the Merger Consideration shall be deemed the
final Merger Consideration on
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the date the Accounting Firm delivers to the Stockholders Representative, Parent
and the Surviving Corporation its final resolution in writing (such resolution,
the "FINAL STATEMENT") (and the parties will direct the Accounting Firm to
complete its determination and deliver the Final Statement within thirty (30)
days following the submission of the disputed matters to it). The fees and
expenses of the Accounting Firm shall be paid by (i) Parent if the final
calculation of the Merger Consideration, as set forth in the Final Statement, is
greater than the amount of the Merger Consideration as set forth in the Working
Capital Statement and (ii) the holders of shares of Company Stock, Company Stock
Options and the Company Warrants (collectively, the "COMPANY SECURITIES") (but
only such holders of Company Stock Options all or a portion of which are
exercisable at the Effective Time by their terms) on a pro rata basis based upon
their respective percentages of the Merger Consideration, if the final
calculation of the Merger Consideration, as set forth in the Final Statement, is
less than or equal to the amount of the Merger Consideration as set forth in the
Working Capital Statement. To the extent such fees and expenses of the
Accounting Firm are payable by the holders of the Company Securities, such fees
and expenses shall be paid using the funds deposited into the Escrow Fund to the
extent such holders are entitled to such funds.
(d) PAYMENT OF ADJUSTMENT TO MERGER CONSIDERATION.
(i) EXCESS PAYMENT. If the Estimated Merger Consideration is
GREATER THAN the Merger Consideration as finally determined pursuant to this
Section 3.02 (such difference, an "EXCESS PAYMENT"), then an aggregate amount
equal to such Excess Payment shall be distributed to Parent from the Escrow Fund
(after deducting any applicable fees and expenses of the Accounting Firm payable
by Parent (if any) in accordance with Section 3.02(c)). Any remaining funds in
the Escrow Fund (after deducting any applicable fees and expenses of the
Accounting Firm payable by the holders of the Company Securities (if any) in
accordance with Section 3.02(c)) shall be distributed to the holders of the
Company Securities eligible to receive such distributions from the Escrow Fund
as determined based on the final Per Share Merger Consideration (such holders
collectively, the "RECIPIENTS") pursuant to the Escrow Agreement. If the Excess
Payment exceeds the aggregate amount of the Escrow Fund, then each Recipient
entitled to receive distributions from the Escrow Fund shall, on demand, pay to
Parent a pro rata amount of such excess based upon their respective rights to
receive the Merger Consideration.
(ii) PAYMENT SHORTFALL. If the Estimated Merger Consideration is
LESS THAN the final Merger Consideration (such difference, a "PAYMENT
SHORTFALL"), then (A) Parent shall pay to the holders of Company Securities an
aggregate amount (after deducting any applicable fees and expenses of the
Accounting Firm payable by the holders of the Company Securities (if any) in
accordance with Section 3.02(c)) equal to the Payment Shortfall, to be
distributed based on their respective rights to receive the Merger Consideration
and (B) each Recipient, as appropriate and depending upon such Recipient's
interest in and to the Escrow Fund, shall receive from such fund such
Recipient's relative interest in the Escrow Fund pursuant to the Escrow
Agreement.
(iii) DISTRIBUTIONS. The parties hereto agree that any and all
distributions which are required to be made from the Escrow Fund under this
Section 3.02 shall be made in accordance with the Escrow Agreement.
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SECTION 3.03. ESCROW AGREEMENT AND ESCROW FUND.
At or prior to the Closing, Parent, the Company, the Stockholders
Representative and The Bank of New York (the "ESCROW AGENT") shall enter into an
Escrow Agreement on mutually agreeable terms consistent with the terms of this
Agreement or as may be acceptable to the parties thereto (the "ESCROW
AGREEMENT"). The Escrow Agreement shall provide for the creation of an escrow
fund (the "ESCROW FUND") consisting of Ten Million Dollars ($10,000,000) of the
Merger Consideration (the "ESCROW AMOUNT") to be applied to any downward
adjustment of the Merger Consideration pursuant to Section 3.02. The Escrow
Agreement shall contain provisions with respect to the timing and procedure of
distributions of funds from the Escrow Fund consistent with the terms hereof.
SECTION 3.04. EXCHANGE OF CERTIFICATES REPRESENTING COMPANY
SECURITIES.
(a) EXCHANGE AGENT. Immediately following the Effective Time (but in
any event on the Closing Date), Parent shall deposit with an exchange agent
selected by the Parent and reasonably acceptable to the Company (the "EXCHANGE
AGENT"), for the benefit of the holders of Company Securities (other than the
Company Warrants if they have not been amended), for exchange in accordance with
this Agreement, an amount equal to (i) the Estimated Merger Consideration MINUS
(ii) the Escrow Amount, MINUS (iii) the product of (A) the Per Share Merger
Consideration (calculated based on the Estimated Merger Consideration) and (B)
the total number of Dissenting Shares, and, if the Company Warrants have not
been amended, MINUS (iv) an amount equal to the excess, if any, of the Per Share
Merger Consideration (calculated based on the Estimated Merger Consideration)
MULTIPLIED BY The total number of shares of Company Common Stock for which all
Company Warrants were exercisable for immediately prior to the Effective Time
over the aggregate sum of the Company Warrant Exercise Price for all Company
Warrants outstanding and unexercised immediately prior to the Effective Time
(the "EXCHANGE FUND") (it being understood that any adjustment to the Estimated
Merger Consideration pursuant to Section 3.02 shall be paid in accordance with
such section). Immediately following the Effective Time (but in any event on the
Closing Date), Parent shall deposit the Escrow Amount with the Escrow Agent,
which shall be held and disbursed by the Escrow Agent in accordance with the
Escrow Agreement. Promptly after the Effective Time, the Exchange Agent shall
mail to each record holder of an outstanding certificate, certificates or
instruments as of the Effective Time (other than instruments representing
Company Warrants, if they have not been amended) which immediately prior to the
Effective Time represented Company Securities (the "CERTIFICATES"), a letter of
transmittal and instructions for use in effecting the surrender of the
Certificates for payment therefor (collectively, the "LETTER OF TRANSMITTAL"),
which Letter of Transmittal shall include (i) representations of the holder for
the benefit of the Surviving Corporation regarding title to the Company
Securities, due authorization to sell or transfer the Company Securities
pursuant to the terms of this Agreement, and the absence of any conflicts or
breaches by such holder in connection therewith, (ii) an agreement for the
benefit of Parent that such holder shall pay to Parent, to the extent
applicable, such stockholders' pro rata portion of the amounts required to be
paid pursuant to Section 3.02(d)(i) plus any cost of collection thereof, (iii)
such information as the Stockholders Representative may reasonably request be
included therein, including an agreement for the benefit of the Stockholders
Representative that such holder agrees to Oak Hill's designation as the
Stockholders Representative and that Oak Hill shall have the full and exclusive
authority to, in its capacity as the Stockholders Representative,
14
execute any and all instruments or other documents on behalf of such holder, and
do any and all other acts or things on behalf of such holder, which the
Stockholders Representative may deem necessary or advisable, or which may be
required pursuant to this Agreement or otherwise, in connection with the
consummation of the Merger and the other transactions contemplated hereby,
including (w) agreeing with Parent or Merger Sub with respect to any matter or
thing required or deemed necessary by the Stockholders Representative in
connection with the provisions of this Agreement calling for the agreement of
the holder and giving and receiving notices on behalf of the holder, all in the
absolute discretion of the Stockholders Representative, (x) in general, doing
all things and performing all acts, including executing and delivering all
agreements, certificates, receipts, consents, elections, instructions, and other
instruments or documents contemplated by, or deemed by the Stockholders
Representative to be necessary or advisable in connection with, this Agreement,
(y) executing and delivering the Escrow Agreement, and (z) negotiating,
settling, compromising and otherwise handling the post-closing adjustment of the
Merger Consideration pursuant to Section 3.02, and (iv) such other documents as
may reasonably be required in connection with such surrender, in customary form
to be agreed upon by the Company and Parent prior thereto, including a
certificate of each holder of Company Stock conforming to the requirements of
Treasury Regulation Section 1.1445-2(b)(2) certifying that such holder is not a
"foreign person" for purposes of Section 1445 of the Code (a "FIRPTA
CERTIFICATE") or, for those holders of Company Stock who are "foreign persons"
for purposes of Section 1445 of the Code, a statement to that effect.
(b) EXCHANGE PROCEDURES.
(i) After the Effective Time, each holder of Certificate(s)
shall, upon surrender to the Exchange Agent of such Certificate(s) and a
fully and properly completed Letter of Transmittal and acceptance thereof
by the Exchange Agent, be entitled to receive the amount of the Merger
Consideration into which such surrendered Certificate(s) have been
converted or exchanged pursuant to this Agreement.
(ii) After the Effective Time, there shall be no further transfer
on the records of the Company or its transfer agent of Certificates, and if
Certificates are presented to the Company for transfer, they shall be
canceled against delivery of the Merger Consideration into which such
Certificates have been converted or exchanged pursuant to this Agreement.
If any Merger Consideration is to be paid to a Person other than the Person
in whose name the surrendered Certificate is registered, it shall be a
condition of such exchange that the Certificate so surrendered shall
properly be endorsed, with signature guaranteed, or otherwise in proper
form for transfer and that the Person requesting such exchange shall pay to
the Surviving Corporation or its transfer agent any transfer or other taxes
required, or establish to the satisfaction of the Surviving Corporation or
its transfer agent that such taxes have been paid or are not applicable.
(iii) Until surrendered as contemplated by this Section 3.04(b),
each Certificate (for the purposes of clarification, excluding certificates
relating to Company Warrants, if the Company Warrants have not been amended
prior to the Effective Time) shall be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender
the Merger Consideration into which such Certificate has been converted or
exchanged pursuant to this Agreement and after the Effective Time the
15
holders thereof shall cease to have any other rights as holders of Company
Securities. No interest will be paid or will accrue on any amount payable
to holders of Company Securities as Merger Consideration.
(c) NO FURTHER RIGHTS IN COMPANY SECURITIES. All Merger Consideration
paid upon the surrender for exchange of Certificates in accordance with the
terms of this Agreement shall be deemed to have been issued and paid in full
satisfaction of all rights pertaining to the Company Securities represented
thereby.
(d) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund
which remains undistributed to the holders of Certificates upon the expiration
of two years following the Effective Time shall be delivered to the Surviving
Corporation upon demand, and any holders of Company Securities who have not
theretofore complied with this Article III shall thereafter look only to the
Surviving Corporation, and only as general creditors thereof, for payment of any
claim for Merger Consideration.
(e) NO LIABILITY. None of the Surviving Corporation, Parent, Merger
Sub or the Exchange Agent shall be liable to any Person in respect of any cash
or other assets from the Exchange Fund delivered to a public official pursuant
to any applicable abandoned property, escheat or similar law. If any Certificate
has not been surrendered prior to the later of (i) two years after the Effective
Time and (ii) immediately prior to the date on which any cash or other assets,
if any, in respect of such Certificate would otherwise escheat to or become the
property of any Governmental Entity, any such cash or other assets in respect of
such Certificate shall, to the extent permitted by applicable Law, become the
property of the Surviving Corporation, free and clear of all claims or interests
of any Person previously entitled thereto.
(f) INVESTMENT OF EXCHANGE FUND. The Exchange Agent shall invest the
cash included in the Exchange Fund in a money market deposit account selected by
Parent prior to the Closing. Any interest and other income resulting from such
investments shall be paid to Parent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Merger Sub as
follows:
SECTION 4.01. ORGANIZATION.
Each of the Company and each Company Subsidiary is a corporation or
other entity duly organized, validly existing and (to the extent the concept of
good standing is applicable to such entity) in good standing under the laws of
the jurisdiction of its incorporation or organization and has full corporate
power and authority to conduct its business as it is now being conducted and to
own, operate or lease the properties and assets it currently owns, operates or
holds under lease. Each of the Company and each Company Subsidiary is duly
qualified or licensed to do business and is in good standing as a foreign entity
in each jurisdiction where such qualification or licensing is necessary, except
where the failure to so qualify or be so licensed would not, individually or in
the aggregate, have a Company Material Adverse Effect.
16
SECTION 4.02. SUBSIDIARIES.
SCHEDULE 4.02 sets forth a list, as of the date hereof of (a) all
Company Subsidiaries and (b) all other entities in which the Company or any
Company Subsidiary has an aggregate equity investment in excess of $100,000
(other than through a mutual fund or similar investment account). Except as set
forth in SCHEDULE 4.02, all outstanding shares of stock of any Company
Subsidiary have been duly authorized and validly issued and are fully paid and
non-assessable, and are owned, directly or indirectly, by the Company free and
clear of any Liens, and there are no outstanding options, warrants, convertible
securities, calls, rights, commitments, preemptive rights or agreements or
instruments or understandings of any character, obligating the Company or any
Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered
or sold, contingently or otherwise, additional shares of such Company Subsidiary
or any securities or obligations convertible or exchangeable for such shares or
to grant, extend or enter into any such option, warrants, convertible security,
call, right, commitment, preemptive right or agreement. Except for transactions
among Company Subsidiaries or among the Company and Company Subsidiaries, with
respect to any Company Subsidiary or other entity in which the Company or any
Company Subsidiary has an equity investment (other than through a mutual fund or
similar investment account), neither the Company nor any Company Subsidiary has
(i) an obligation to make a loan or other capital contribution, (ii) any
liability for the obligations of such entity or (iii) any other obligations to
such entity.
SECTION 4.03. CAPITALIZATION.
(a) The authorized capital stock of the Company consists of 20,000,000
shares of Company Common Stock and 5,000,000 shares of Preferred Stock, par
value $0.0001 per share (the "COMPANY PREFERRED STOCK"). As of the date of this
Agreement:
(i) 6,937,003 shares of Company Common Stock were issued and
outstanding,
(ii) no shares of Company Preferred Stock were issued and
outstanding,
(iii) Company Warrants to purchase an aggregate 277,165 shares of
Company Common Stock were issued and outstanding, and
(iv) 939,375 shares of Company Common Stock were reserved and
available for issuance upon or otherwise deliverable in
connection with the grant of equity-based awards or the exercise
of Company Stock Options issued pursuant to the 2001 Stock
Option Plan.
(b) SCHEDULE 4.03(b) sets forth the number, class or series and record
owner of all Company Stock and Company Stock Options as of the date of this
Agreement. All outstanding shares of Company Stock have been duly authorized,
validly issued and are fully paid and non-assessable. Except for the Company
Stock Options and the Company Warrants or as set forth in the Stockholders
Agreement and except as set forth in SCHEDULE 4.03(b), there are no authorized
or outstanding options, warrants, convertible securities, calls, rights,
commitments, preemptive rights or agreements or instruments or understandings of
any character, to which the Company is a party or by which the Company is bound,
obligating the Company to issue, deliver
17
or sell, or cause to be issued, delivered or sold, contingently or otherwise,
additional shares of Company Stock or any securities or obligations convertible
into or exchangeable for such shares or to grant, extend or enter into any such
option, warrant, convertible security, call, right, commitment, preemptive right
or agreement. No bonds, notes or other indebtedness having the right to vote on
matters on which stockholders may vote are issued or outstanding.
SECTION 4.04. AUTHORIZATION.
(a) THE COMPANY. The Company has all requisite corporate power and
authority to enter into this Agreement and to perform its obligations hereunder.
The execution and delivery of this Agreement by the Company and the consummation
by it of the transactions contemplated hereby have been duly and validly
authorized by all necessary action of the Board of Directors of the Company, and
no other corporate proceedings on the part of the Company are necessary to
authorize the Merger, this Agreement and the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by the Company,
and assuming due authorization, execution and delivery by each other party
hereto, constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as such
enforcement may be subject to (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws relating to creditors'
rights generally, (ii) general principles of equity (whether applied in a
proceeding at law or in equity) and (iii) any implied covenant of good faith and
fair dealing.
(b) THE STOCKHOLDERS. The class and total number of shares of Company
Stock owned by each Stockholder is as set forth in SCHEDULE 4.04(b). Such
shares, taken in the aggregate, represent in excess of 90% of the voting power
of the Company.
SECTION 4.05. NO VIOLATION.
Except as set forth on SCHEDULE 4.05, the execution and delivery of
this Agreement by the Company does not, and the consummation by the Company of
the transactions contemplated by this Agreement will not, (i) conflict with, or
result in any violation of or default or loss of any benefit under, any
provision of the Company's or any Company Subsidiary's Certificate of
Incorporation or By-Laws; (ii) subject to the matters described in Section 4.06,
conflict with or result in any violation of or default or loss of any benefit
under, any Law or Judgment of any Governmental Entity to which the Company or
any Company Subsidiary is a party or to which any of its property is subject; or
(iii) conflict with, or result in a breach, termination (or right of
termination) or violation of or default or loss of any benefit under the terms
of any agreement, contract, indenture or other instrument to which the Company
or any Company Subsidiary is a party or to which any of its property is subject,
or constitute a default or loss of any right thereunder or any event which, with
the lapse of time or notice or both, might result in a default or loss of any
right thereunder, except with respect to clauses (ii) and (iii) hereof, where
the conflict, breach, termination, violation, default, loss of benefit,
acceleration or loss of right would not, individually or in the aggregate, have
a Company Material Adverse Effect.
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SECTION 4.06. APPROVALS.
The execution and delivery of this Agreement and the consummation of
the transactions contemplated by this Agreement by the Company will not require
any consent, approval, order, authorization or Permit of any counterparty to a
Material Contract or a lease pursuant to which the Company or a Company
Subsidiary leases the Leased Premises, or a party to any agreement, declaration,
covenant, restriction, option agreement or right of first refusal affecting
title to the Owned Property or Leased Premises, or any other third party, or any
Governmental Entity under any Law or Judgment, other than consents, approvals,
orders, authorizations, Permits and Requisite Regulatory Approvals disclosed in
SCHEDULE 4.06 and no declaration, filing or registration with any Governmental
Entity is required by the Company or any Company Subsidiary in connection with
the execution and delivery of this Agreement and the consummation of
transactions contemplated by this Agreement, except for (i) the filing of the
Certificate of Merger as required by the DGCL and the filing of appropriate
documents with the relevant authorities of other states in which the Company or
any Company Subsidiary is qualified to do business, (ii) filings pursuant to the
HSR Act, and the expiration or termination of the applicable waiting period
under the HSR Act, or (iii) such other consents, approvals, orders,
authorizations, actions, registrations, declarations and filings the failure of
which to be obtained or made individually or in the aggregate has not had and
would not reasonably be expected to (w) have a Company Material Adverse Effect,
(x) impair in any material respect the ability of the Company to perform its
obligations under this Agreement, (y) prevent or materially impede, interfere
with, hinder or delay the consummation of the transactions contemplated by this
Agreement, or (z) filings and notices not required to be made or given until
after the Effective Time.
SECTION 4.07. FINANCIAL STATEMENTS.
(a) SCHEDULE 4.07(a) contains copies of the following consolidated
financial statements of the Company and the Company Subsidiaries (collectively,
the "FINANCIAL STATEMENTS"): (i) the audited consolidated balance sheet of the
Company and the Company Subsidiaries as of December 31, 2005 and December 31,
2004 and the related statements of income and cash flows for each of the three
years in the period ending December 31, 2005 (together with the notes thereto);
and (ii) the unaudited consolidated balance sheet (the "COMPANY BALANCE SHEET")
of the Company and the Company Subsidiaries as of June 30, 2006 (the "BALANCE
SHEET DATE") and the related unaudited statements of income and cash flows for
the six month period ending on the Balance Sheet Date. The Financial Statements
(i) present fairly in all material respects the consolidated financial condition
and results of operations of the Company and the Company Subsidiaries as of the
dates thereof or for the periods covered thereby, except as otherwise noted
therein (subject, in the case of the unaudited Financial Statements, to normal
year-end adjustments) and (ii) have been prepared in accordance with GAAP
applied on a consistent basis for the periods involved (except as may be
indicated in the notes thereto or as described on SCHEDULE 4.07(a)).
(b) Except as set forth in SCHEDULE 4.07(b), neither the Company nor
any Company Subsidiary has any Liabilities, other than Liabilities (i) that have
been specifically disclosed or accrued or reserved for in the Company Balance
Sheet, (ii) that have been incurred in the ordinary course of business since the
date thereof, (iii) of the type that are not required by
19
GAAP to be included in or, in the notes to, a balance sheet prepared in
accordance with GAAP, (iv) relating to operating leases incurred in accordance
with the terms of such leases in the ordinary course of business and which with
respect to clauses (ii) and (iii) that have not had, and would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect.
SECTION 4.08. ABSENCE OF CERTAIN TRANSACTIONS.
Except as set forth on SCHEDULE 4.08 and except for the transactions
expressly contemplated hereby, since the Balance Sheet Date, the Company and the
Company Subsidiaries have conducted their respective businesses in the ordinary
and usual course consistent with past practices. Since the Balance Sheet Date,
there have not been any events, changes, effects or developments which have had
or would reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect. Except as set forth on SCHEDULE 4.08 and except
for actions following the date of this Agreement undertaken in accordance with
the other provisions of this Agreement, since the Balance Sheet Date:
(a) Neither the Company nor any Company Subsidiary has (i) declared
or paid any dividend or made any other distribution with respect
to Company Stock or the capital stock of any Company Subsidiary
(other than dividends or distributions made by any Company
Subsidiary to the Company), (ii) redeemed, purchased, canceled or
otherwise acquired, directly or indirectly, any outstanding
shares of Company Stock or any shares of capital stock of any
Company Subsidiary (other than repurchases or acquisitions of
Company Stock from management pursuant to subscription agreements
entered into with such members of management), (iii) issued
additional stock (other than upon the exercise or conversion of
outstanding options, warrants or convertible securities),
warrants, options or any other similar rights to acquire Company
Stock or any shares of capital stock of any Company Subsidiary,
or (iv) split, combined or reclassified any shares of Company
Stock or any shares of capital stock of any Company Subsidiary or
issued or authorized the issuance of any other securities in
respect of, in lieu of or in substitution for shares of, shares
of Company Stock or any shares of capital stock of any Company
Subsidiary;
(b) Neither the Company nor any Company Subsidiary has merged or
consolidated with any other Person or reorganized, restructured,
recapitalized, liquidated or filed a voluntary petition in
bankruptcy;
(c) Neither the Company nor any Company Subsidiary has incurred any
obligation for borrowed money or entered into or modified any
material contract, agreement, commitment or arrangement with
respect to borrowed money, except borrowings in the ordinary
course of business pursuant to the Company's existing revolving
credit facilities;
20
(d) Neither the Company nor any Company Subsidiary has granted any
increase in compensation to any salaried employees or paid any
bonus, except for increases in salary or wages or payment of
bonuses in the ordinary course of business or in accordance with
existing Employee Plans;
(e) Other than provision of services or sales in the ordinary course
of business, neither the Company nor any Company Subsidiary has
(i) sold, leased, transferred or otherwise disposed of any of its
assets having a book or market value in excess of $1,000,000
individually or $10,000,000 in the aggregate, or (ii) entered
into, or consented to the entering into of, any agreement
granting a preferential right to sell, lease or otherwise dispose
of any of such assets;
(f) Neither the Company nor any Company Subsidiary has (i) incurred
or committed to incur any capital expenditures or liabilities in
connection therewith other than capital expenditures or
liabilities that do not individually exceed $1,000,000; (ii)
acquired or agreed to acquire by merging or consolidating with,
or acquired or agreed to acquire by purchasing a substantial
portion of the assets of, or in any other manner, any business or
Person; or (iii) except with respect to inventory purchased or to
be purchased for resale to customers in the ordinary course of
business, acquired or agreed to acquire any other assets or made
any individual lease commitments involving payments in excess of
$500,000 in any one year;
(g) The Company has not made any material Tax election;
(h) The Company has not changed its methods of accounting in effect
at December 31, 2005, except as required by GAAP;
(i) Neither the Company nor any Company Subsidiary has entered into
or amended any Material Contract other than in the ordinary
course of business; and
(j) Neither the Company nor any Company Subsidiary has agreed or
committed to do any of the foregoing.
SECTION 4.09. TAXES.
Except as disclosed on SCHEDULE 4.09,
(a) all material Tax Returns that are required to be filed (taking
into account all extensions) before the Effective Time for, by,
on behalf of or with respect to the Company or any Company
Subsidiary have been or will be filed with the applicable
Governmental Entity when due and all such Tax Returns are correct
and complete in all material respects and were prepared in
accordance with all applicable Tax Laws;
21
(b) none of such Tax Returns are now under audit or examination by
any Governmental Entity the outcome of which would, individually
or in the aggregate, have a Company Material Adverse Effect;
(c) each of the Company and each Company Subsidiary has paid or will
pay in full when due all Taxes due and payable or has made
adequate provision in the Company Balance Sheet for all material
Taxes, and neither the Company nor any Company Subsidiary has
knowledge of any reason for any Governmental Entity to assess any
material additional Taxes for any period for which Tax Returns
have been filed except with respect to those additional Taxes for
which reserves have been recorded by the Company;
(d) no claim which currently remains unresolved has been made in
writing by an authority in a jurisdiction where the Company or
any Company Subsidiary does not file Tax Returns that the Company
or such Subsidiary currently is or may be subject to taxation by
that jurisdiction;
(e) there are no material liens for Taxes upon any asset of the
Company or any Company Subsidiary other than with respect to
Taxes not yet due and payable;
(f) there are no outstanding agreements or waivers extending the
statutory period of limitations applicable to the Tax Returns of
the Company or any Company Subsidiary, and neither the Company
nor any Company Subsidiary has requested or received any
extension of time within which to file any Tax Return, which Tax
Return has not yet been filed;
(g) the Company and each Company Subsidiary has, within the time and
manner prescribed by Law, withheld, paid over and reported all
Taxes required to have been withheld, paid and reported in
connection with the amounts paid or owing to any employee,
independent contractor, creditor, stockholder, foreign Person or
other third party, except where such failure would not,
individually or in the aggregate, have a Company Material Adverse
Effect;
(h) neither the Company nor any Company Subsidiary is a party to, is
bound by or has any obligation under any tax sharing agreement or
similar arrangement;
(i) neither the Company nor any Company Subsidiary (i) is, or has
been, a member of an affiliated group filing a consolidated
federal income Tax Return other than a group the common parent of
which is the Company, nor (ii) has any material liability for the
Taxes of any entity under Treas. Reg. Section 1.1502-6 (or any
similar provision of Law), or as a transferee or successor, by
contract or otherwise;
22
(j) none of the Company or any Company Subsidiary has agreed to make
any adjustment pursuant to Section 481(a) of the Code (or any
predecessor provision) or pursuant to any similar provision of
Law, and neither the IRS nor any other taxing authority has
proposed any such adjustment or change in accounting method; and
(k) the Company and each Company Subsidiary have made available to
Parent complete and correct copies of all federal income Tax
Returns and a summary of all material federal, state, local and
foreign examination reports and statements of deficiencies
assessed against or agreed to by the Company or any Company
Subsidiary, in each case, filed or received since January 1,
2003.
For purposes of this Agreement, "TAXES" mean all United States federal, state,
local or foreign income, profits, estimated, gross receipts, windfall profits,
environmental (including taxes under Code Section 59A), severance, property,
intangible property, occupation, production, sales, use, license, excise,
emergency excise, franchise, capital gains, capital stock, employment,
withholding, social security (or similar), disability, transfer, registration,
stamp, payroll, goods and services, value added, alternative or add-on minimum
tax, estimated, or any other tax, custom, duty or governmental fee, or other
like assessment or charge of any kind whatsoever, together with any interest,
penalties, fines, related liabilities or additions to tax that may become
payable in respect thereof imposed by any Governmental Entity, whether disputed
or not. For purposes of this Agreement, "TAX RETURN" means any return,
declaration, report or similar statement required to be filed with respect to
any Taxes (including any attached schedules) including any information return,
claim for refund, amended return or declaration of estimated Tax.
SECTION 4.10. LITIGATION.
Except as set forth on SCHEDULE 4.10 and except as would not have a
Company Material Adverse Effect, as of the date of this Agreement, (i) there are
no Proceedings pending or, to the Company's knowledge, threatened against the
Company or any Company Subsidiary by or before any Governmental Entity or by any
Person; and (ii) neither the Company nor any Company Subsidiary is a party to
or, to the Company's knowledge, bound by any Judgment.
SECTION 4.11. ENVIRONMENTAL MATTERS.
(a) Except as set forth on SCHEDULE 4.11(a), (i) the Company and each
Company Subsidiary has been, and is, in compliance with all applicable
Environmental Laws, including requirements of Environmental Permits, except
where failure to comply would not, individually or in the aggregate, have or
reasonably be expected to have, a Company Material Adverse Effect; and (ii) the
Company and the Company Subsidiaries have all Environmental Permits, except for
those Environmental Permits which the failure to have would not, individually or
in the aggregate, have or reasonably be expected to have, a Company Material
Adverse Effect. All of the Environmental Permits are in full force and effect
and have not been repealed, except where any such failure to be in effect or
such repeal would not, individually or in the aggregate, have or reasonably be
expected to have, a Company Material Adverse Effect
23
and there is no proceeding or investigation pending, or to the knowledge of the
Company, threatened which would reasonably be expected to lead to the
revocation, amendment, failure to renew, or suspension of any such Environmental
Permit which would, individually or in the aggregate, have a Company Material
Adverse Effect. Each of the Company and each Company Subsidiary has filed when
due all materially accurate and complete applications necessary to timely renew
such Environmental Permits and all materially accurate and complete documents
required to be filed with any Governmental Entity in connection with such
Environmental Permits except where the failure to file such applications or
documents would not, individually or in the aggregate, have or reasonably be
expected to have, a Company Material Adverse Effect;
(b) Except as set forth in SCHEDULE 4.11(b) and except as would not,
individually or in the aggregate, have a Company Material Adverse Effect, there
are no outstanding or, to the Company's knowledge, threatened claims against the
Company or any Company Subsidiary (i) for damages or penalties relating to the
presence, generation, transportation, treatment, storage or disposal of
Hazardous Materials in, under or from any Owned Property, any Leased Premises,
or any property formerly owned, leased or operated by the Company or any Company
Subsidiary; or (ii) otherwise arising under Environmental Law; and neither the
Company nor any Company Subsidiary has received any written request for
information from any Governmental Entity regarding the disposal or release of
Hazardous Materials which would, individually or in the aggregate, have a
Company Material Adverse Effect;
(c) Except as set forth in SCHEDULE 4.11(c) and except as would not,
individually or in the aggregate, have a Company Material Adverse Effect,
neither the Company nor any Company Subsidiary, and, to the Company's knowledge,
no other Person has disposed of, spilled, or otherwise released any Hazardous
Materials at any Owned Property, any Leased Premises or any property formerly
owned, leased or operated by the Company or any Company Subsidiary, other than
in compliance with Environmental Laws and Hazardous Materials are not otherwise
present in the environment at such properties in amounts or conditions that
would reasonably be expected to result in liability under Environmental Law and
none of the Company and the Company Subsidiaries has released Hazardous
Materials at any other location which would reasonably be expected to result in
liability under Environmental Law;
(d) Except as set forth in SCHEDULE 4.11(d) and except as would not,
individually or in the aggregate, have a Company Material Adverse Effect, (i)
all Hazardous Materials generated by the Company or any Company Subsidiary have
been stored, transported, treated and disposed of by transporters and/or
treatment, storage and disposal facilities authorized under applicable
Environmental Laws or maintaining valid Environmental Permits, and (ii) to the
Company's knowledge, neither the Company nor any Company Subsidiary has disposed
of, transported, or arranged for the disposal or transportation of any Hazardous
Materials at or to any location at which there is or has been a release of
Hazardous Materials into the environment which, regarding each of the foregoing,
would reasonably be expected to result in liability to the Company or any
Company Subsidiary under Environmental Law;
(e) Except as would not, individually or in the aggregate, have a
Company Material Adverse Effect, the Company has made available to Parent
through the Dataroom
24
materially true, correct and complete copies of all material reports, studies,
and analyses that are in the possession, custody or control of the Company or
any Company Subsidiary and relate to compliance by the Company or any Company
Subsidiary with Environmental Law or contamination by Hazardous Materials as
they relate to the Owned Properties and Leased Premises;
(f) Except as set forth on Schedule 4.11(f) and except as would not,
individually or in the aggregate, have a Company Material Adverse Effect,
neither the Company nor any Company Subsidiary has retained or assumed by
contract any liability or responsibility for any environmental claims or
conditions; and
(g) Except as would not, individually or in the aggregate, have a
Company Material Adverse Effect, completion of the transaction contemplated by
this Agreement does not require permission of any Governmental Entity pursuant
to any so-called "transaction trigger" or other Environmental Law.
SECTION 4.12. TITLE TO PROPERTY.
(a) SCHEDULE 4.12 identifies by street address or freeway interchange,
all material real estate leased by the Company or any Company Subsidiary (the
"LEASED PREMISES") or owned by the Company or any Company Subsidiary ("OWNED
PROPERTY"). The Leased Premises are leased to the Company or such Company
Subsidiary pursuant to written leases, true and complete copies of which
(together with all amendments thereto) have been made available to Parent
through the Dataroom. Except as set forth in SCHEDULE 4.12, neither the Company
nor any Company Subsidiary is in material default under any material term of any
lease or, to the knowledge of the Company, any declaration, restriction,
covenant, option agreement or right of first refusal relating to the Leased
Premises or Owned Property, nor do any state of facts exist which with the
passage of time would constitute a material default of the Company or any
Company Subsidiary under any material term of any lease or, to the knowledge of
the Company, any declaration, restriction, covenant, option agreement or right
of first refusal relating to the Leased Premises or Owned Property. True and
complete copies of all title policies of the Company and the Company
Subsidiaries, in the possession of the Company as of the date hereof, relating
to the Owned Property and the Leased Premises have been made available to Parent
through the Dataroom. The Company or a Company Subsidiary has good and valid
title to the Owned Property, and good and valid leasehold title to the Leased
Premises, free and clear of all Liens, except (i) for Taxes, installments of
special assessments and governmental charges or levies not yet delinquent, (ii)
defects or irregularities in title, recorded easements, rights of way,
covenants, and other restrictions and utility easements, building restrictions,
zoning restrictions, encroachments, and other similar matters and other
easements and restrictions existing generally which do not and will not detract
in any material respect from the value, as currently operated, of any Owned
Property or Leased Premises, and do not and will not affect, in any material
respect, the ability of the Company or any Company Subsidiary to conduct its
business as it is currently being conducted on the Owned Property or the Leased
Premises, and (iii) mechanics', carriers', construction, workers', repairers'
and similar Liens arising or incurred in the ordinary course of business and
(iv) as otherwise set forth on SCHEDULE 4.12.
25
(b) The Company or a Company Subsidiary has good and merchantable
title to all personalty of any kind or nature owned by the Company or a Company
Subsidiary, free and clear of all Liens, (including, to the Company's knowledge,
Liens on the lessor's interest in leasehold estates leased to the Company),
except for (i) Liens identified on SCHEDULE 4.12, (ii) Liens for taxes,
assessments and governmental charges or levies not yet due and payable, (iii)
Liens imposed by Law, including statutory Liens of landlords, (iv) pledges or
deposits to secure obligations under workers' compensation laws or similar
legislation or to secure public or statutory obligations, (v) mechanics',
carriers', construction, workers', repairers' and similar Liens arising or
incurred in the ordinary course of business, (vi) Liens incurred or deposits
made in the ordinary course of business of the Company or any Company
Subsidiary, (vii) Liens of lessors of personal property; or (viii) minor
irregularities of title which do not materially detract from the value or use of
said property and assets. The Company or a Company Subsidiary as lessee has the
right under valid and subsisting leases to use, possess and control all
personalty leased by and material to the Company or such Company Subsidiary as
now used, possessed and controlled by the Company or such Company Subsidiary.
SECTION 4.13. CONDITION OF PROPERTY.
(a) All buildings, machinery, equipment and other tangible assets
currently being used by the Company or any Company Subsidiary which are owned or
leased by the Company or any Company Subsidiary are in good operating condition,
maintenance and repair, ordinary wear and tear and casualty damage excepted, are
usable in the ordinary course of business and are reasonably adequate and
suitable for the uses to which they are being put, except where any other
conditions of any building, machinery, equipment or other tangible asset would
not, individually or in the aggregate, have a Company Material Adverse Effect.
(b) True and complete copies of all surveys of the Company and the
Company Subsidiaries relating to the Owned Property and the Leased Premises in
possession of the Company as of the date hereof have been made available to
Parent through the Dataroom (the "SURVEYS"). Except as set forth in SCHEDULE
4.13(b) and except as would not individually or in the aggregate have a Company
Material Adverse Effect, the buildings and structures located on each of the
Owned Properties and Leased Premises currently have valid legal access to (i)
public roads or valid easements over private streets or private property for
such ingress to and egress from all such buildings and structures, and (ii)
water supply, telephone, gas and electric connections, and fire protection, in
each case as is necessary for the operation of such Owned Property or Leased
Premises as heretofore conducted. Except as set forth in SCHEDULE 4.13(b) or as
disclosed on the Surveys and except as would not individually or in the
aggregate have a Company Material Adverse Effect, to the Company's knowledge, no
material portion of such buildings or structures substantially encroaches upon
real property of another Person and no structure of any other Person
substantially encroaches upon any of the Owned Property or Leased Premises.
SECTION 4.14. CONTRACTS.
Except for such items with respect to the purchase of goods for resale
in the ordinary course of business or intercompany transactions between or among
the Company and/or Company Subsidiaries, SCHEDULE 4.14 is a complete list of all
written contracts, agreements,
26
commitments, leases, sales contracts and other agreements to which the Company
or any of the Company Subsidiaries is a party as of the date of this Agreement
(i) which provide for the receipt or expenditure by the Company or any Company
Subsidiary after the date of this Agreement, of more than $1,000,000 (or, in
either case, its equivalent in non-cash consideration) per year; (ii) which
provide for the acquisition, issuance or transfer of any securities of the
Company other than this Agreement, the Company Stock Options or the Company
Warrants, (iii) which create Liens on assets of the Company or any of the
Company Subsidiaries as security for indebtedness for borrowed money, (iv) with
any fast-food or motel franchisors; or (v) with any Stockholder (or any
affiliate of any Stockholder) pursuant to which the Company (or any Company
Subsidiary) will have any Liability or obligation following the Closing, (vii)
all agreements with a labor union, or (viii) any agreement that limits the
freedom of the Company or any Company Subsidiary to compete in any line of
business with any Person or in any geographic area (all agreements, arrangements
or commitments required to be identified in SCHEDULE 4.14 being hereinafter
referred to as the "MATERIAL CONTRACTS"). True and complete copies of all the
Material Contracts (including all written amendments thereto) identified in
SCHEDULE 4.14 have been made available to Parent through the Dataroom. Except as
set forth on SCHEDULE 4.14, (i) all Material Contracts are valid and existing,
and the Company and the Company Subsidiaries, have duly performed their
obligations thereunder in all material respects to the extent such obligations
have accrued, and (ii) no breach or default thereunder by the Company or any
Company Subsidiary has occurred and is continuing, except in each case, for
those failures to be valid and existing or breaches or defaults which would not,
individually or in the aggregate, have, or reasonably be expected to have, a
Company Material Adverse Effect.
SECTION 4.15. EMPLOYEE AND LABOR MATTERS AND PLANS.
(a) SCHEDULE 4.15(a) lists each of the following plans, policies,
arrangements and contracts which is sponsored, maintained or contributed to by
the Company or any Company Subsidiary, or, in the case of any "employee pension
plan" (as defined in Section 3(2) of ERISA), an ERISA Affiliate or for the
benefit of any current or former employee, director or officer: (i) any
"employee benefit plan," as such term is defined in Section 3(3) of ERISA,
whether or not subject to the provisions of ERISA; and (ii) any other
employment, consulting, collective bargaining, stock option, stock bonus, stock
purchase, phantom stock, incentive, bonus, deferred compensation, retirement,
severance, change-in-control, fringe, insurance, disability, post-employment
(including compensation, pension, health, medical or life insurance or other
benefits), vacation, medical or dental contract, policy or arrangement which is
not an employee benefit plan as defined in Section 3(3) of ERISA (each such
plan, contract, policy and arrangement being herein referred to as an "EMPLOYEE
PLAN").
(b) With respect to each Employee Plan, except as set forth on
SCHEDULE 4.15(b), the Company has made available to Parent through the Dataroom
true and complete copies (including amendments) of each contract, plan document
and summary plan description (including any related trust agreement or insurance
company contract) or, if there are no such written materials, a summary
description of the Employee Plan, plus a copy of the most recent determination
letter, if applicable, and a copy of the most recent Form 5500. Except as set
forth on SCHEDULE 4.15(b), there have been no amendments to, written
interpretations of or announcements by the Company or any Company Subsidiary
published to employees relating to, or any changes in employee participation or
coverage under, any Employee Plan that would
27
increase materially the expense of maintaining such Employee Plan above the
level of expense incurred in respect thereof for the most recent fiscal year
ended prior to the date hereof, for which financial statements have been
provided. SCHEDULE 4.03(b) contains a complete and accurate listing of all
outstanding Company Stock Options, indicating the extent vested or unvested, the
extent exercisable or not, the exercise price and the name of the optionee.
(c) Each Employee Plan has been maintained in compliance in all
respects with its terms and the requirements prescribed by any and all
applicable statues, orders, rules and regulations, including, but not limited
to, ERISA and the Code except where the failure to be in compliance therewith
would not, individually or in the aggregate, have a Company Material Adverse
Effect. Except as set forth on SCHEDULE 4.15(c), with respect to each Employee
Plan, (1) no actions, suits or claims (other than routine claims for benefits in
the ordinary course) are pending, or to the Company's knowledge, threatened, and
(2) to the Company's knowledge, there are no facts or circumstances that would
reasonably be expected to form the basis of any such actions, suits or claims,
and (3) no administrative investigation, audit or other administrative
proceeding by the Department of Labor, the Pension Benefit Guaranty Corporation,
the Internal Revenue Service or other Governmental Entities are in progress or
pending, or to the Company's knowledge, threatened. With respect to each
Employee Plan which is an "employee benefit plan" within the meaning of Section
3(3) of ERISA or which is a "plan" within the meaning of Section 4975(e) of the
Code, there has occurred no transaction which is prohibited by Section 406 of
ERISA or which constitutes a "prohibited transaction" under Section 4975(c) of
the Code and with respect to which a prohibited transaction exemption has not
been granted and is not currently in effect, except where such "prohibited
transaction" would not, individually or in the aggregate, have a Company
Material Adverse Effect.
(d) SCHEDULE 4.15(d) identifies each funded Employee Plan which is an
employee pension plan within the meaning of Section 3(2) of ERISA (including a
multi-employer plan within the meaning of Section 3(37) of ERISA). With respect
to each such Employee Plan, (i) the Employee Plan is a qualified plan under
Section 401(a) or 403(a) of the Code, and its related trust is exempt from
federal income taxation under Section 501(a) of the Code; (ii) a favorable IRS
determination letter has been received and, since the date of such IRS
submission, the Employee Plan has not been amended or operated in a manner which
would be reasonably likely to have a Company Material Adverse Effect, nor would
there result any material cost or liability to remedy any such defect; (iii)
there has been no termination or partial termination within the meaning of
Section 41l(d)(3) of the Code; (iv) no Employee Plan is covered by Section 412
of the Code; and (v) no such Employee Plan is covered by Title IV of ERISA.
Neither the Company nor any ERISA Affiliate has ceased operations at a facility
so as to become subject to the provisions of Section 4068 of ERISA, withdrawn as
a substantial employer so as to become subject to the provisions of Section 4063
of ERISA or ceased making contributions on or before the Closing Date to any
Employee Plan which is a pension plan subject to Section 4064(a) of ERISA. No
event has occurred and no condition exists, with respect to any Employee Plan
that would be reasonably likely to subject the Company to any Tax, fine, Lien,
penalty or other Liability imposed by ERISA, the Code or any other applicable
Laws, which, when added to all other Liabilities under this paragraph would
reasonably be expected to have a Company Material Adverse Effect.
28
(e) Neither the Company nor any Company Subsidiary has any material
liability in respect of post-retirement health benefits for retired employees of
the Company or any Company Subsidiary except as required to avoid excise tax
under Code Section 4980B or similar provisions under state law.
(f) Except as set forth on SCHEDULE 4.15(f), the consummation of the
transactions contemplated by this Agreement will not entitle any employee,
officer or director to receive severance or other compensation or benefits from
the Company or any Company Subsidiary which would not otherwise be payable
absent the consummation of the transactions contemplated by this Agreement or
cause the acceleration of the time of payment or vesting of any award or
entitlement under any Employee Plan, whether or not such occurrence would
constitute a parachute payment within the meaning of Code Section 280G, and
whether or not another subsequent action or event (or lack thereof) in addition
to the transactions contemplated hereby would be required to trigger such
occurrence.
(g) To the Company's knowledge, since December 31, 2005, there have
been no governmental audits of the equal employment opportunity practices of the
Company or any Company Subsidiary. Except as set forth on SCHEDULE 4.15(g),
there are no unfair labor practice charges or complaints against the Company or
any Company Subsidiary pending before the National Labor Relations Board or
strikes, disputes, slowdowns or stoppages pending or, to the Company's
knowledge, threatened against or involving the Company that would reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect.
(h) Except as set forth on SCHEDULE 4.15(h) (i) neither the Company
nor any Company Subsidiary is a party to or bound by, any collective bargaining
agreement with a labor union or labor organization; (ii) there is no labor
practice proceeding or labor arbitration proceeding pending, or to the Company's
knowledge, threatened against the Company or any Company Subsidiary; and (iii)
to the Company's knowledge there are no organizational efforts with respect to
the formation of a collective bargaining unit presently being made.
(i) The Company has made available to Parent accurate and complete
copies of all material employee manuals and handbooks and a copy of the current
new hire orientation package relating to the employment of the current employees
of the Company and the Company Subsidiaries.
(j) To the knowledge of the Company, neither the Company nor any
Company Subsidiary has since January 1, 2006 engaged in any unfair labor
practice of any nature. Since January 1, 2003, there has not been any slowdown,
work stoppage, labor dispute or union organizing activity, or any similar
activity or dispute, affecting the Company or the Company Subsidiary, except for
such slowdowns, work stoppages, disputes or activities that would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. Except as set forth on SCHEDULE 4.15(j) and except as
would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect, there are no actions, suits, claims, labor
disputes or grievances pending or, to the knowledge of the Company, threatened
or reasonably anticipated relating to any labor, safety or discrimination
matters involving any Company Employee, including charges of unfair labor
practices or discrimination complaints.
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SECTION 4.16 INSURANCE POLICIES.
SCHEDULE 4.16 contains a summary description of all material insurance
policies of the Company and the Company Subsidiaries and each such policy is in
full force and effect. All premiums with respect to the insurance policies
listed on SCHEDULE 4.16 which are due and payable prior to the Effective Time
have been paid or will be paid prior to the Effective Time, and no written
notice of cancellation or termination has been received by the Company with
respect to any such policy. To the Company's knowledge, there are no pending
claims against such insurance by the Company or any Company Subsidiary as to
which the insurers have denied coverage or otherwise reserved rights that would
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
SECTION 4.17. INTELLECTUAL PROPERTY.
(a) SCHEDULE 4.17 contains a list of all U.S. and foreign patents,
registrations and applications for Intellectual Property owned by the Company or
Company Subsidiary.
(b) Except as would not, individually or in the aggregate, have, or
reasonably be expected to have, a Company Material Adverse Effect, (i) the
Company and the Company Subsidiaries own or have a valid license to use all
Intellectual Property used in the conduct of their businesses as currently
conducted; (ii) neither the Company nor any Company Subsidiary has received
written notice of infringement or challenge to the right to use any Intellectual
Property; (iii) to the Company's knowledge, the conduct of the Company and the
Company Subsidiaries' businesses as currently conducted does not infringe or
violate the Intellectual Property of any other Person and their Intellectual
Property is not being infringed or violated by any other Person; and (iv) the
Company and the Company Subsidiaries take reasonable steps to protect and
maintain their Intellectual Property.
(c) For the purposes of this Section 4.17, "INTELLECTUAL PROPERTY"
shall mean all United States, state and foreign intellectual property, including
patents, inventions, discoveries, technology, and know-how, copyrights and
copyrightable works (including software and software code in any form, including
source code and executable or object code), trademarks, service marks, trade
names, brand names, corporate names, domain names, URLs, web sites, logos, trade
dress and other source indicators, trade secrets and other confidential
information.
SECTION 4.18. PERMITS.
The Company and the Company Subsidiaries have all Permits (exclusive
of any Environmental Permits and Permits with respect to state or local sales,
use or other Taxes), except for those Permits the failure to have would not,
individually or in the aggregate, have or be reasonably expected to have, a
Company Material Adverse Effect. All of the Permits are in full force and effect
except where any such failure to be so in effect would not, individually or in
the aggregate, have or be reasonably expected to have, a Company Material
Adverse Effect, and there is no proceeding or investigation pending, or to the
knowledge of the Company, threatened which would reasonably be expected to lead
to the revocation, amendment, failure to renew or suspension of any such Permit.
Each of the Company and each Company Subsidiary has filed
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when due all documents required to be filed with any Governmental Entity in
connection with such Permits except where the failure to file such documents
would not, individually or in the aggregate, have or be reasonably expected to
have, a Company Material Adverse Effect, and, at the time of the filing thereof,
all such filings were accurate and complete in all material respects.
SECTION 4.19. COMPLIANCE WITH LAWS.
Neither the Company nor any Company Subsidiary is in violation of, or
has since December 31, 2003, violated or failed to comply with any Law (other
than Environmental Laws, ERISA and Laws with respect to Taxes which are
addressed elsewhere in Article IV) applicable to its business or operations,
except for violations and failures to comply that would not, individually or in
the aggregate, have, or be reasonably expected to have, a Company Material
Adverse Effect.
SECTION 4.20. BROKERAGE FEES.
The Company has not retained any financial advisor, broker, agent or
finder or agreed to pay a financial advisor, broker, agent or finder on account
of this Agreement or any transaction contemplated hereby or any transaction of
like nature except for Xxxxxx Brothers Inc. and Credit Suisse Securities (USA)
LLC, the fees of which will be paid by the Company.
SECTION 4.21. AFFILIATE AGREEMENTS.
Except as set forth on SCHEDULE 4.21, there are no oral or written
agreements between the Company or any Company Subsidiary and (i) any officer or
director of the Company or any Company Subsidiary; (ii) any record or beneficial
owner of the voting stock of the Company, or (iii) any Affiliate of any such
officer, director or record of beneficial owner other than payment as
compensation for services rendered by employees in the ordinary course of
employment by the Company or any Company Subsidiary or as otherwise provided
pursuant to Employee Plans.
SECTION 4.22. NO OTHER REPRESENTATIONS OR WARRANTIES.
Except for the representations and warranties contained in this
Article IV, each of Parent and Merger Sub acknowledges that none of the Company,
any Affiliate of the Company or any other Person on behalf of the Company or any
of its Affiliates makes any other express or implied representation or warranty
with respect to the Company or with respect to any other information provided to
Parent or Merger Sub in connection with the transaction contemplated hereunder.
None of the Company, any Affiliate of the Company or any other Person will have
or be subject to any liabilities or indemnification obligation to Parent, Merger
Sub or any other Person resulting from the distribution to Parent or Merger Sub
(or any of their advisors), or Parent's or Merger Sub's (or their advisors') use
of, any such information, including any information, documents, projections,
forecasts or other material made available to Parent or Merger Sub in the Data
Room or management presentations in expectation of the transactions contemplated
by this Agreement.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub hereby represent and warrant to the Company as
follows:
SECTION 5.01. ORGANIZATION.
Each of Parent and Merger Sub is a real estate investment trust or
corporation, as applicable, duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation. Each of Parent
and Merger Sub has full corporate power and authority to conduct its business as
it is now being conducted and to own, operate or lease the properties and assets
it currently owns, operates or holds under lease. Each of Parent and Merger Sub
is duly qualified or licensed to do business and is in good standing as a
foreign corporation in each jurisdiction where such qualification or licensing
is necessary, except where the failure to so qualify or be so licensed would not
prevent or materially delay the consummation of the transactions contemplated by
this Agreement. Parent owns beneficially, and Parent or one of its wholly-owned
subsidiaries owns of record, all of the outstanding capital stock of Merger Sub,
in each case free and clear of all Liens. Prior to the date hereof, Parent has
provided to the Company the name of the "ultimate parent entity" for purposes of
obtaining the approvals of the Governmental Entities contemplated by this
Agreement.
SECTION 5.02. AUTHORIZATION.
Each of Parent and Merger Sub has all requisite corporate power and
authority to enter into this Agreement and to perform its obligations hereunder.
The execution and delivery of this Agreement by each of Parent and Merger Sub
and the consummation by each of Parent and Merger Sub of the transactions
contemplated hereby have been duly approved by the Board of Directors and
stockholders of each of Parent and Merger Sub, and no other corporate
proceedings on the part of Parent or Merger Sub are necessary to authorize the
Merger or this Agreement, to perform their respective obligations hereunder or
to consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by each of Parent and Merger Sub and,
assuming due authorization, execution and delivery by the Company, constitutes
the legal, valid and binding obligation of each of Parent and Merger Sub,
enforceable against each of Parent and Merger Sub in accordance with its terms,
except as such enforcement may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws relating
to creditors' rights generally, (ii) general principles of equity (whether
applied in a proceeding at law or in equity) and (iii) any implied covenant of
good faith and fair dealing.
SECTION 5.03. NO VIOLATION.
The execution and delivery of this Agreement by Parent and Merger Sub
does not, and the consummation by Parent and Merger Sub of the transactions
contemplated by this Agreement will not, (i) conflict with, or result in any
violation of or default or loss of any benefit under, any provision of Parent
and Merger Sub's respective Certificates of Incorporation or By-laws; (ii)
subject to the matters described in Section 5.04, conflict with or result in any
violation
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of or default or loss of any benefit under, any Law or Judgment of any
Governmental Entity applicable to Parent or Merger Sub or by which any of their
respective properties are subject; or (iii) conflict with, or result in a
breach, termination (or right of termination) or violation of or default or loss
of any benefit under the terms of any agreement, contract, indenture or other
instrument to which Parent or Merger Sub is a party or by which Parent or Merger
Sub or any of their respective properties are subject, or constitute a default
or loss of any right thereunder or an event which, with the lapse of time or
notice or both, might result in a default or loss of any right thereunder,
except with respect to clauses (ii) and (iii) hereof, where the breach,
termination, violation, default, loss of benefit, acceleration or loss of right
or other occurrence would not prevent or materially delay the consummation of
the transactions contemplated hereby.
SECTION 5.04. APPROVALS.
The execution and delivery of this Agreement and the consummation of
the transactions contemplated by this Agreement by each of Parent and Merger Sub
do not and will not require the consent, approval, order, authorization or
Permit of any Governmental Entity under any Law or Judgment, and no declaration,
filing or registration with any Governmental Entity is required by Parent or
Merger Sub in connection with the execution and delivery of this Agreement and
the consummation of transactions contemplated by this Agreement, except for (i)
the filing of the Certificate of Merger as required by the DGCL and the filing
of appropriate documents with the relevant authorities of other states in which
Parent and Merger Sub are qualified to do business, (ii) filings pursuant to the
HSR Act, and the expiration or termination of the applicable waiting period
under such Act, and (iii) those other consents, approvals, orders,
authorizations, Permits, filings, declarations or registrations the failure of
which to obtain or make would not prevent or materially delay the consummation
of the transactions contemplated hereby.
SECTION 5.05. LITIGATION.
There are no Proceedings pending or, to the knowledge of Parent or
Merger Sub, threatened against Parent or any of its Affiliates by or before any
Governmental Entity or by any Person that would, or would reasonably be expected
to, prevent or materially delay the consummation of the transactions
contemplated hereby. Neither Parent nor any of its Subsidiaries nor any of their
respective properties is or are a party to or bound by any Judgment that would,
or would reasonably be expected to, prevent or materially delay the consummation
of the transactions contemplated hereby.
SECTION 5.06. AVAILABLE FUNDS.
(a) Parent has delivered to the Company true and complete copies of
the written financial commitment, dated as of the date hereof (the "FINANCING
COMMITMENT") from Xxxxxxx Xxxxx Capital Corporation and Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated, addressed to Parent, pursuant to which the
financing parties have agreed to lend the amounts set forth therein (the
"FINANCING").
(b) The Financing Commitment is in full force and effect and has not
been amended or modified, and the commitments contained therein have not been
withdrawn or
33
rescinded in any respect. The Financing Commitment, in the form delivered to the
Company, is a legal, valid and binding obligation of Parent and, to the
knowledge of Parent, the other parties thereto. There are no other agreements,
side letters or arrangements relating to the Financing Commitment that could
affect the availability of the Financing. No event has occurred which, with or
without notice, lapse of time or both, would constitute a default or breach on
the part of Parent under any term or condition of the Financing Commitment, and
Parent has no reason to believe that it will be unable to satisfy on a timely
basis any term or condition of closing to be satisfied by it contained in the
Financing Commitment. Parent has fully paid any and all commitment fees or other
fees required by the Financing Commitment to be paid on or before the date of
this Agreement. There are no conditions precedent or other contingencies related
to the funding of the full amount of the Financing, other than as set forth in
or contemplated by the Financing Commitment. The aggregate proceeds contemplated
by the Financing Commitment will be sufficient for Parent, Merger Sub and the
Surviving Corporation to consummate the transactions contemplated hereby,
including payment of the aggregate Merger Consideration and any applicable fees
and expenses. As of the date of this Agreement, Parent does not have any reason
to believe that any of the conditions to the Financing will not be satisfied or
that the Financing will not be available to Parent on the Closing Date.
SECTION 5.07. BROKERAGE FEES.
Neither Parent nor Merger Sub has retained any financial advisor,
broker, agent or finder or agreed to pay any financial advisor, broker, agent or
finder on account of this Agreement or any transaction contemplated hereby or
any transaction of like nature except for Xxxxxxx Xxxxx Capital Corporation and
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, the fees of which will be
paid by Parent.
SECTION 5.08. NO OTHER REPRESENTATIONS OR WARRANTIES.
Except for the representations and warranties contained in this
Article V, the Company acknowledges that none of Parent, Merger Sub or any other
Person on behalf of Parent or Merger Sub makes any other express or implied
representation or warranty with respect to Parent or Merger Sub or with respect
to any other information provided to the Company.
ARTICLE VI
COVENANTS
SECTION 6.01. INTERIM OPERATIONS OF THE COMPANY.
During the period from the date of this Agreement to the Effective
Time, except as required by Law, specifically permitted by this Agreement or as
set forth on SCHEDULE 6.01, or as otherwise consented to in writing by Parent,
the Company will and will cause each Company Subsidiary to:
(a) use commercially reasonable efforts (consistent with operating in
the ordinary course of business and past practices) to (i) preserve intact its
present business organization, (ii) keep available the services of its present
officers and employees, (iii) preserve its relationships with clients,
suppliers, customers, distributors and others having significant
34
business dealings with it, including renewing existing leases and licenses in
the ordinary course of business, (iv) maintain all assets in good repair and
condition other than those disposed of in the ordinary course of business, (v)
maintain all insurance, (vi) maintain its books of account and records in the
usual, regular and ordinary manner and (vii) otherwise operate in the ordinary
course of business;
(b) not amend its Certificate of Incorporation or By-Laws;
(c) not acquire by merging or consolidating with, or purchasing all or
substantially all of the assets of, or otherwise acquiring, any business of any
Person or other business organization or division thereof, in each case for
consideration having a value in excess of $5,000,000 or an aggregate value in
excess of $10,000,000;
(d) not split, combine or reclassify its outstanding capital stock or
declare, set aside, make or pay any dividend or other distribution in respect of
its capital stock other than (i) cash dividends or distributions made prior to
the Effective Time; or (ii) dividends paid by the Company's wholly-owned
Subsidiaries to the Company or its wholly-owned Subsidiaries;
(e) not issue or sell (or agree to issue or sell) any shares of its
capital stock of any class or series, or any options, warrants, conversion or
other rights to purchase any such shares or any securities convertible into or
exchangeable for such shares (other than upon the exercise or conversion of
options, warrants or convertible securities outstanding on the date hereof), or
grant, or agree to grant, any such options or modify or alter the terms of any
of the above, except as contemplated under Section 2.06;
(f) not (i) incur any indebtedness for borrowed money other than
pursuant to the terms of the Company's existing credit facilities in effect on
the date hereof or vary the material terms of any existing debt securities, (ii)
issue or sell any debt securities, (iii) other than in the ordinary course of
business or pursuant to the Company's 2006 capital expenditure plan which has
previously been made available to Parent, acquire or dispose of any assets
(other than acquisitions and dispositions of goods purchased for resale in the
ordinary course of business) having a book or market value individually in
excess of $1,000,000, or (iv) other than in the ordinary course of business,
enter into, modify in any material respect or terminate any Material Contract;
(g) not take any steps to mortgage or pledge to secure any material
obligation, or to subject to any material Lien, any of its material properties
other than pursuant to the terms of the Company's existing credit facilities as
in effect on the date hereof or in the ordinary course of business;
(h) not grant to any present or former director or officer, or, except
in the ordinary course of business, consultant or other employee any increase in
compensation or benefits in any form, or any severance or termination pay, or
make any loan to or enter into any employment agreement, collective bargaining
agreement or arrangement with any such Person, except in each case as may be
required by Law or the terms of any existing Employee Plan or arrangement and
except for the Additional Transaction Bonuses;
35
(i) not adopt, enter into, amend in any material respect, announce to
participants any intention to adopt or terminate, any Employee Plan or other
employee benefit plan, program or arrangement that would be an Employee Plan if
it were in effect on the date hereof, except (i) as required by applicable Law,
(ii) as disclosed on any disclosure Schedule pursuant to Section 4.15, (iii) as
contemplated under Section 2.06, (iv) in connection with the Additional
Transaction Bonuses or (v) except, with respect to the Company's health and
medical plans, in the ordinary course of business provided such action does not
materially increase the benefits payable under such Employee Plans;
(j) not discharge or satisfy any material Lien or pay or satisfy any
material obligation or Liability (fixed or contingent) (other than in the
ordinary course of business) or commence any voluntary petition, proceeding or
action under any bankruptcy, insolvency or other similar Laws;
(k) not make or institute any material change in its accounting
procedures or practices unless mandated by GAAP;
(l) not make any material Tax election or settle or compromise any
material Tax Liability;
(m) not, other than in the ordinary course of business, enter into, or
consent to the entering into of, any agreement with any Governmental Entity
relating to the actual or threatened condemnation of any Owned Property or
Leased Premises; and
(n) not authorize or agree to take any of the actions set forth in the
foregoing subparagraphs (a) through (l).
SECTION 6.02. ACCESS TO INFORMATION.
The Company shall (and shall cause each Company Subsidiary to) afford
to the officers, employees, accountants, counsel and other representatives of
Parent and Merger Sub, reasonable access, during normal business hours, during
the period prior to the Effective Time, to all of the properties, books,
contracts, commitments and records of the Company and the Company Subsidiaries;
PROVIDED that nothing herein shall require the provision of such access to the
extent it would interfere unreasonably with the business or operations of the
Company or the Company Subsidiaries or otherwise result in any unreasonable
interference with the prompt and timely discharge by such employees of their
normal duties. Prior to Closing, Parent and Merger Sub will hold and treat and
will cause their respective officers, employees, auditors and other authorized
representatives to hold and treat in confidence all documents and information
concerning the Company and the Company Subsidiaries made available to Parent or
Merger Sub in connection with the transactions contemplated by this Agreement in
accordance with the provisions of the existing confidentiality agreement between
the Company and Reit Management & Research LLC dated as of June 13, 2006 (the
"CONFIDENTIALITY AGREEMENT"), provided public disclosure which is reasonably
believed by Parent to be necessary in connection with the Financing, issuance of
the Securities or distribution of equity of a Subsidiary of Parent to its
shareholders or which Parent or any of its Affiliates are advised by counsel is
required by Law or the rules of any national securities exchange to be disclosed
shall not be deemed a violation of
36
Parent's or Merger Sub's obligations under this Section 6.02 or under the
Confidentiality Agreement. Notwithstanding anything herein to the contrary,
neither the Company nor any of the Company 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 clients, jeopardize the
attorney-client privilege of the Company or the Company Subsidiaries or
contravene any Law or binding agreement entered into prior to the date of this
Agreement (it being agreed that the Company, Parent and Merger Sub shall use
their reasonable best efforts to cause such information to be provided in a
manner that does not cause such violation or jeopardization).
SECTION 6.03. CONSENTS AND APPROVALS.
(a) Each of the Company, Parent and Merger Sub shall use all
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable to consummate and
make effective the transactions contemplated by this Agreement, including,
without limitation, (i) to comply promptly with all legal requirements which may
be imposed on it with respect to this Agreement and the transactions
contemplated by this Agreement by any Governmental Entity (which actions shall
include furnishing all information required by applicable Law in connection with
approvals of or filings with any Governmental Entity), including filing, or
causing to be filed, as promptly as practicable, any required notification and
report forms (x) under the HSR Act with the Federal Trade Commission (the "FTC")
and the Antitrust Division of the United States Department of Justice (the
"ANTITRUST DIVISION"), (ii) to obtain any other Requisite Regulatory Approvals
in connection with the transactions contemplated by this Agreement or the taking
of any action contemplated by this Agreement, and (iii) to take any action
necessary to defend vigorously, lift, mitigate or rescind the effect of any
litigation or administrative proceeding involving any Governmental Entity
adversely affecting this Agreement or the transactions contemplated by this
Agreement, including promptly appealing any adverse court or administrative
decision. Without limitation of the foregoing, the Company, Parent, Merger Sub
and their respective Affiliates shall not extend any waiting period or
comparable period under the HSR Act or enter into any agreement with any
Governmental Antitrust Authority not to consummate the transactions contemplated
by this Agreement, except with the prior written consent of the other parties
hereto. For purposes of this Agreement, a "GOVERNMENTAL ANTITRUST AUTHORITY"
shall mean any Governmental Entity with regulatory jurisdiction over any
Requisite Regulatory Approval under the HSR Act or similar Laws intended to
prohibit, restrict or regulate actions having an anticompetitive effect or
purposes.
(b) Without limiting the generality of the undertakings and subsection
(a) of this Section 6.03 and subject to appropriate confidentiality protections,
the Company, on the one hand, and Parent and Merger Sub, on the other hand,
shall each furnish to the other such necessary information and reasonable
assistance as the other party may request in connection with the foregoing and
shall each promptly provide counsel for the other party with copies of all
filings made by such party, and all correspondence between such party (and its
advisors) with any Governmental Antitrust Authority and any other information
supplied by such party and such party's Affiliates to a Governmental Antitrust
Authority in connection with this Agreement and the transactions contemplated by
this Agreement. Each party shall, subject to applicable Law, permit counsel for
the other party to review in advance any proposed written and, if practicable,
oral, communication to any Governmental Antitrust Authority. Upon the terms and
37
subject to the conditions herein provided, in case at any time after the Closing
Date any further action is necessary or desirable to secure the approvals from
any and all Governmental Antitrust Authorities necessary to carry out the
purposes of this Agreement, the proper officers and/or directors of the parties
shall use all reasonable efforts to take or cause to be taken all such further
action.
(c) Without limiting the generality of the undertakings and
subsections (a) and (b) of this Section 6.03, the Company, Parent and Merger Sub
agree to take or cause to be taken the following actions: (i) provide as
promptly as practicable information and documents requested by any Governmental
Antitrust Authority necessary, proper or advisable to permit consummation of the
transactions contemplated by this Agreement, (ii) take, or cause to be taken,
all actions necessary, proper or advisable to obtain the approval for
consummation of the transactions contemplated by this Agreement by any
Governmental Antitrust Authority, which actions shall include each of Parent and
Merger Sub's agreement to (x) sell or otherwise dispose of, or hold separate and
agree to sell or otherwise dispose of, any entities, assets or facilities of the
Company or a Company Subsidiary or any entity, facility or asset of Parent or
its Affiliates, (y) terminate, amend or assign such existing relationships and
contractual rights and obligations (other than termination that would result in
a breach of a contractual obligation to a third party) and (z) amend, assign or
terminate such existing licenses or other agreements (other than a termination
that would result in a breach of a license or such other agreement with a third
party) and to enter into such new licenses or other agreements (and, in each
case, to enter into agreements with the relevant Governmental Antitrust
Authority giving effect thereto) in each case with respect to the foregoing
clauses (x), (y) or (z) if such action is necessary or advisable or as may be
required by any Governmental Antitrust Authority, PROVIDED that any such action
contemplated by this clause (ii) shall not be required to be effective prior to
the Closing and (iii) take promptly, in the event that any permanent or
preliminary injunction or other order is entered or becomes reasonably
foreseeable to be entered in any proceeding that would make consummation of the
transactions contemplated by this Agreement in accordance with the terms of this
Agreement unlawful or that would prevent or delay consummation of any such
transaction, any and all steps (including the appeal thereof, the posting of a
bond or the taking of the steps contemplated by clause (ii) of this subsection
(c)) necessary to vacate, modify or suspend such injunction or order so as to
permit such consummation on a schedule as close as possible to that contemplated
by this Agreement. The Company, Parent and Merger Sub agree to offer the other
parties, if possible, a reasonable opportunity to participate in all telephonic
conferences and all meetings with a Governmental Antitrust Authority.
(d) The filing fees under the HSR Act, as well as the fees and
disbursements of any legal counsel or other advisor jointly retained by the
parties in connection with any such filings, shall be borne by Parent.
Section 6.04. EMPLOYMENT MATTERS.
(a) After the Effective Time, the Surviving Corporation shall either
(i) continue the existing Employee Plans of the Company and the Company
Subsidiaries as disclosed on SCHEDULE 4.15(a), or (ii) provide substitutes for
some or all of such Employee Plans that provide compensation or benefits to
employees of the Company and the Company Subsidiaries that are no less favorable
in the aggregate to such employees than the replaced
38
Employee Plans until December 31, 2007; PROVIDED, HOWEVER, that in no event
shall the Surviving Corporation be obligated to continue, provide or otherwise
take into account Employee Plans that relate to stock options, restricted stock,
stock rights or any other equity-based arrangements; and PROVIDED FURTHER that
nothing herein shall be construed to mean that the Surviving Corporation cannot
amend or terminate any particular Employee Plan or Plans so long as the
aggregate benefits to such employees under the remaining Employee Plans and all
substituted plans are no less favorable to such employees than the existing
Employee Plans until such date. For purposes of any such benefit plans, (A)
Parent and the Surviving Corporation shall grant all employees of the Company
credit for purposes of eligibility and vesting for all service with the Company
and the Company Subsidiaries prior to the Effective Time for which such service
was recognized by the Company; (B) any limitations on pre-existing conditions
shall be waived (but only to the extent such conditions were covered prior to
the Effective Time unless required by Law); and (C) expenses incurred with
respect to the plan year in which the Closing occurs on or before the Effective
Time shall be taken into account for purposes of establishing satisfaction of
any applicable deductible, coinsurance and maximum out-of-pocket provisions to
the same extent taken into account prior to the Effective Time.
(b) From and after the Effective Time, the Surviving Corporation shall
honor (i) the Transaction Bonus Agreements; and (ii) the Company's severance
plan and severance agreements which are disclosed on SCHEDULE 4.15(a), in each
case, in accordance with the terms thereof.
(c) Nothing in this Agreement shall be construed as granting any
Person any rights of continuing employment, other than as provided by contract.
(d) Parent's current intention is that the Company's headquarters will
remain at its current location.
(e) As soon as reasonably practicable following the date hereof, the
Company shall provide to the employees of the Company or Company Subsidiaries
party to the Transaction Bonus Agreements an amendment thereto providing that
the payout amounts will be payable in connection with the Merger whether the
Closing is before or after December 31, 2006.
SECTION 6.05. PUBLICITY.
Prior to the Closing, none of the Company, Parent, Merger Sub or any
of their agents or representatives shall issue or cause the publication of any
press release or other public statement or announcement with respect to this
Agreement or the transactions contemplated hereby without the prior written
consent of the Company and Parent (such consent not to be unreasonably withheld
or delayed), except as may be required by Law, or by the rules of any national
securities exchange or automated quotation system to which Parent or any
Affiliate of Parent is or becomes subject, and in such case shall use its
reasonable best efforts to consult with Parent and/or the Company, as
applicable, prior to such release or announcement being issued, provided Parent
may issue such press releases or other public statements or announcements as it
reasonably determines necessary and advisable in connection with its investor
relations program, conducted in the normal course, without the prior written
consent of the Company.
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SECTION 6.06. NOTIFICATION OF CERTAIN MATTERS.
From and after the date of this Agreement until the earlier of the
Effective Time or termination of this Agreement pursuant to and in accordance
with Section 8.02, the Company shall give prompt notice to Parent, and Parent
shall give prompt notice to the Company, of the occurrence or non-occurrence of
any event or events the occurrence or non-occurrence of which, individually or
in the aggregate, would make the timely satisfaction of any of the conditions
set forth in Article VII impossible or unlikely. This Section 6.06 shall not
constitute a covenant or agreement for the purposes of Sections 7.02(b) and
7.03(b).
SECTION 6.07. DIRECTORS' AND OFFICERS' INDEMNIFICATION.
(a) Without limiting any additional rights that any employee may have
under any Employee Plan, from and after the Effective Time, the Surviving
Corporation will indemnify and hold harmless each Person who is now, or has been
at any time prior to the date hereof, a director or officer of the Company or of
any Company Subsidiary or a Person entitled to indemnification (individually a
"COVERED PARTY" and collectively the "COVERED PARTIES"), with respect to any
Proceedings and/or damages, penalties, Judgments, assessments, losses, costs and
expenses (including, but not limited to, attorneys' fees) based in whole or in
part on, or arising in whole or in part out of any matter arising out of or
pertaining to matters existing or occurring at or prior to the Effective Time,
whether asserted or claimed prior to, at or after the Effective Time, to the
fullest extent that Parent or the Surviving Corporation is permitted under
applicable law. In the event of any such Proceeding, (i) each Covered Party will
be entitled to advancement of expenses incurred in the defense of any Proceeding
from Parent or the Surviving Corporation within ten business days of receipt by
Parent or the Surviving Corporation from the Indemnified Party of a request
therefor, (ii) neither Parent nor the Surviving Corporation shall settle,
compromise or consent to the entry of any Judgment in any existing or threatened
Proceeding (and in which indemnification could be sought by such Covered Party
hereunder), unless such settlement, compromise or consent includes an
unconditional release of such Covered Party from all Liability arising out of
such Proceeding or such Covered Party otherwise consents, and (iii) the
Surviving Corporation shall cooperate in the defense of any such matter.
(b) The certificate of incorporation and by-laws of the Surviving
Corporation shall contain provisions no less favorable with respect to
indemnification, advancement of expenses and exculpation of individuals who were
directors and officers prior to the Effective Time than are presently set forth
in the Company's Certificate of Incorporation and By-Laws, which provisions
shall not be amended, repealed or otherwise modified for a period of six years
from the Effective Time in any manner that would adversely affect the rights
thereunder of any such individuals.
(c) At or prior to the Effective Time, Parent shall obtain "tail" or
"runoff" insurance policies with a claims period of at least six years from the
Effective Time with respect to directors' and officers' liability insurance, in
either case in an amount and scope at least as favorable as the Company's
existing policies from an insurance carrier with the same or better credit
rating as the Company's current insurance carrier for the Covered Parties;
PROVIDED that the annual cost thereof shall not exceed 300% of the current
annual premium paid by the Company for its existing coverage in the aggregate.
Parent shall, and shall cause the Surviving
40
Corporation to, honor and perform under all indemnification agreements entered
into by the Company or any of the Company Subsidiaries.
(d) If the Surviving Corporation or any of its successors or assigns
(i) shall consolidate with or merge into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger,
or (ii) shall transfer all or substantially all of its assets to any Person,
then, and in each such case, proper provisions shall be made so that the
successors and assigns of the Surviving Corporation shall assume all of the
obligations of the Surviving Corporation set forth in this Section 6.07. In
addition, the Surviving Corporation shall not distribute, sell, transfer or
otherwise dispose of any of its assets in a manner that would reasonably be
expected to render the Surviving Corporation unable to satisfy its obligations
under this Section 6.07.
(e) The provisions of this Section 6.07 are intended to be in addition
to the rights otherwise available to the current and former officers and
directors of the Company by Law, charter, statute, by-law or agreement, and
shall operate for the benefit of, and shall be enforceable by, each of the
Covered Parties and their heirs.
(f) This covenant is intended to be for the benefit of, and shall be
enforceable by, each of the Covered Parties and their respective heirs and legal
representatives. The indemnification provided for herein shall not be deemed
exclusive of any other rights to which an Covered Party is entitled, whether
pursuant to Law, contract or otherwise.
SECTION 6.08. ADDITIONAL AGREEMENTS.
Subject to the terms and conditions herein provided, except as
otherwise expressly provided herein, each of the parties hereto agrees to use
all reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable, whether under
applicable Law or otherwise, or to remove any injunctions or other impediments
or delays, legal or otherwise, to consummate and make effective the Merger and
the other transactions contemplated by this Agreement.
SECTION 6.09. COOPERATION WITH FINANCING.
Prior to the Closing, so long as the out-of-pocket costs and expenses
of the Company and/or the Company Subsidiaries in connection therewith are
Special Costs, the Company shall provide, and shall cause the Company
Subsidiaries to, and shall use its reasonable efforts to cause the respective
officers, employees, representatives and advisors, including legal and
accounting, of the Company and the Company Subsidiaries to, provide all
cooperation reasonably requested by Parent in connection with the Financing, any
issuance by Parent of debt securities, equity securities, equity-linked
securities or hybrid securities (the "SECURITIES") principally to finance its
obligations under this Agreement and the other transactions contemplated by this
Agreement, including (i) participation in meetings, presentations, road shows,
due diligence sessions and sessions with rating agencies, (ii) assisting with
the preparation of materials for rating agency presentations, bank information
memoranda, prospectuses and similar documents required in connection with the
Financing or the issuance of the Securities, (iii) executing and delivering any
pledge and security documents, other definitive
41
financing documents, or other certificates, legal opinions or documents as may
be reasonably requested by Parent and (iv) seeking to obtain such consents from
such parties as may be required in connection with the Financing, the Merger,
any contemplated reorganizations of the Company and the Company Subsidiaries to
occur concurrently with the Merger pursuant to Contracts to which the Company or
any Company Subsidiary is a party; PROVIDED that nothing herein shall require
such cooperation to the extent it would interfere unreasonably with the business
or operations of the Company or the Company Subsidiaries or otherwise result in
any unreasonable interference with the prompt and timely discharge by such
employees of their normal duties.
SECTION 6.10. CONDUCT OF BUSINESS OF PARENT AND MERGER SUB PENDING THE
MERGER.
Each of Parent and Merger Sub agrees that, between the date of this
Agreement and the Effective Time, it shall not, directly or indirectly, take any
action (i) to cause its representations and warranties set forth in Article V to
be untrue in any material respect; or (ii) that would, or would reasonably be
expected to, individually or in the aggregate, prevent, materially delay or
materially impede the ability of Parent or Merger Sub to consummate the Merger
or the other transactions contemplated by this Agreement.
SECTION 6.11. NO ADVERSE CHANGE IN FINANCIAL COMMITMENTS.
Parent shall not, and shall cause Merger Sub not to, in any material
respect, adversely amend, change, alter, replace or modify the terms and
conditions of the Financial Commitment prior to the Closing without the prior
written consent of the Company, not to be unreasonably withheld. If, at any time
prior to the Closing, Xxxxxxx Xxxxx Capital Corporation or Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated desires to, in any material respect,
adversely amend, change, alter or modify the terms and conditions of the
Financial Commitments, Parent shall promptly notify the Company of such event
and shall permit the Company (and such advisors the Company reasonably deems
appropriate) to meet with representatives of Parent and Xxxxxxx Xxxxx Capital
Corporation or Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, as
applicable, regarding such event. Parent and Merger Sub shall use all reasonable
efforts to arrange the Financing as promptly as practicable on the terms and
conditions described in the Financing Commitment, including using all reasonable
efforts to (i) negotiate definitive agreements with respect thereto on the terms
and conditions contained therein and (ii) to satisfy on a timely basis all
conditions applicable to Parent in the Financing Commitment and the related
definitive agreements.
SECTION 6.12. TERMINATION OF AFFILIATE CONTRACTS.
Except as otherwise disclosed on SCHEDULE 6.12, on or prior to the
Closing Date, all agreements between the Company and the Company Subsidiaries,
on the one hand, and its Affiliates, on the other hand (other than agreements
solely between the Company and the Company Subsidiaries), shall be terminated as
of the Closing, and all obligations and liabilities thereunder shall have been
satisfied.
42
SECTION 6.13. STOCKHOLDER APPROVAL; STOCKHOLDER NOTICE.
(a) The Company shall provide Parent with copies of the Written
Consent and, if requested by Parent or Merger Sub, copies of the documentation
executed by each of the Stockholders appointing Oak Hill the Stockholders
Representative.
(b) The Company shall prepare and mail to all stockholders other than
the Stockholders which executed the Written Consent as promptly as practicable
following the execution of this Agreement the notice required by Section 228(e)
of the DGCL describing in reasonable detail the Merger and the Written Consent
(the "STOCKHOLDER NOTICE") and otherwise to comply with all legal requirements
under the DGCL in respect of the Merger.
SECTION 6.14. NO SOLICITATION OR NEGOTIATION.
The Company agrees that between the date of this Agreement and the
earlier of (a) the Closing or (b) the termination of this Agreement pursuant to
Section 8.01(b) or Section 8.02 hereof, the Company shall not, and shall cause
its directors, officers and employees not to, and shall use reasonable best
efforts to cause its representatives not to, directly or indirectly (i) solicit,
initiate, consider, encourage or accept any other proposals or offers from any
Person relating to (A) any acquisition or purchase of all or any portion of the
Company's or any Company Subsidiary's business or assets or any Company Stock or
the stock of any Company Subsidiary or (B) any merger, consolidation or other
business combination with any of the Company or any Company Subsidiary, (ii)
participate in any discussions, negotiations and other communications, regarding
or furnish to any other Person any information with respect to, or otherwise
cooperate in any way, assist or participate in, facilitate or encourage any
effort or attempt by any other Person to seek to do any of the foregoing or
(iii) consider, entertain or accept any proposal from any Person to do any of
the foregoing; PROVIDED that notwithstanding anything herein to the contrary,
any actions taken by the Company or a Company Subsidiary in accordance with or
otherwise permitted by Section 6.01 shall not be deemed to be a violation of
this Section 6.14.
SECTION 6.15. REPAYMENT OF OUTSTANDING INDEBTEDNESS.
Not less than two business days prior to the Closing Date, the Company
shall deliver to Parent payoff letters from third-party lenders, in form and
substance reasonably satisfactory to Parent, with respect to the Indebtedness of
the Company and the Company Subsidiaries identified on SCHEDULE 6.15 or incurred
after the date hereof in compliance with Section 6.01. Such payoff letters shall
specify the amount necessary to repay such Indebtedness and completely discharge
the obligations of the Company and the Company Subsidiaries with respect
thereto. At Closing, Parent shall provide to the Surviving Corporation the
aggregate amount necessary to make such repayment and discharge, and shall cause
the Surviving Corporation or a Company Subsidiary to discharge such Indebtedness
in accordance with the delivery instructions provided in such payoff letters.
43
SECTION 6.16. CONSULTATION.
Subject to applicable Law, in connection with the continued operation
of the business of the Company and the Company Subsidiaries between the date of
this Agreement and the Effective Time, the Company shall cause its officers and
the officers of the Company Subsidiaries to confer in good faith with one or
more representatives of Parent as often as Parent shall reasonably request on
operational matters of materiality and the general status of operations. After
January 31, 2007, the Company shall provide office facilities at its executive
offices for a representative of Parent.
SECTION 6.17. REAL PROPERTY MATTERS.
(a) The Company shall request estoppel certificates from the lessor
under each lease pursuant to which the Company or any Company Subsidiary leases
the Leased Premises, in a form provided by Parent and reasonably acceptable to
the Company.
(b) The Company shall provide such affidavits of title or other
certifications of title as shall be customarily and reasonably requested by the
title insurance company insuring the Surviving Corporation's or the appropriate
Company Subsidiary's title to the Owned Property and the leasehold interest in
the Leased Premises, in accordance with the provisions of Section 4.12, provided
such affidavits and certifications do not increase any obligations or
liabilities of the Company set forth in this Agreement.
SECTION 6.18. ADDITIONAL FINANCIAL STATEMENTS.
In the event required by the Securities Act or the Exchange Act and
solely in connection with obtaining the Financing or otherwise consummating the
Merger, so long as the out-of-pocket costs and expenses of the Company in
connection therewith are Special Costs, as soon as reasonably practicable upon
request of Parent, (a) the Company shall use reasonable efforts to prepare
consolidated balance sheets and statements of income, cash flows and changes in
stockholders' equity (the "ADDITIONAL FINANCIAL STATEMENTS") for the Company
(and any and all documents and consents related thereto) which comply with
Regulation S-X under the Securities Act, for inclusion in any registration
statement or other public filing of Parent or any Affiliate of Parent under the
Securities Act or the Exchange Act, and any other offering circular or document
used by Parent or any Affiliate of Parent in any other offering of securities,
whether public or private, (b) the Company shall use reasonable efforts to cause
PricewaterhouseCoopers LLP ("PWC"), its independent accountants, to cooperate
with Parent in connection with the foregoing (including, without limitation,
using reasonable efforts to cause PWC to deliver so-called "comfort letters" and
written consents relating to the foregoing). Without limiting the generality of
the foregoing, the Company agrees that, upon reasonable notice from Parent, it
will (y) consent to the use of such Additional Financial Statements in any such
registration statement, document or circular and (z) execute and deliver, and
use reasonable efforts to cause its officers to execute and deliver (if
required), such "representation" letters as are customarily delivered in
connection with audits and as PWC and Parent's independent accountants may
reasonably request under the circumstances.
44
SECTION 6.19. NO CONTROL OF OTHER PARTY'S BUSINESS.
Nothing contained in this Agreement shall give Parent, directly or
indirectly, the right to control or direct the Company's or the Company
Subsidiaries' operations prior to the Effective Time, and nothing contained in
this Agreement shall give the Company, directly or indirectly, the right to
control or direct Parent's or its Subsidiaries' operations prior to the
Effective Time. Prior to the Effective Time, each of the Company and Parent
shall exercise, consistent with the terms and conditions of this Agreement,
complete control and supervision over its and its subsidiaries' respective
operations.
ARTICLE VII
CONDITIONS
SECTION 7.01. CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES.
The respective obligations of each of the Company, Parent and Merger
Sub to consummate the Merger are subject to the satisfaction (or, if
permissible, waiver by the party for whose benefit such conditions exist) at or
prior to the Effective Time of the following conditions:
(a) there shall not be any Judgment or Law restraining, enjoining or
prohibiting the consummation of the Merger; PROVIDED, HOWEVER, that no party
hereto may invoke this condition unless and until such party has complied in
full with Section 6.03; and
(b) all waiting periods applicable to the Merger under the HSR Act
shall have expired or been terminated.
SECTION 7.02. CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGER SUB.
The obligations of Parent and Merger Sub to consummate the Merger are
subject to the satisfaction (or waiver by Parent and/or Merger Sub, as
applicable) at or prior to the Effective Time of the following further
conditions; PROVIDED that notwithstanding the foregoing or anything in this
Agreement to the contrary, after January 31, 2007, neither Section 7.02(a) nor
7.02(c) shall be a condition to Parent and Merger Sub's obligations to
consummate the Merger:
(a) the representations and warranties of the Company contained in
this agreement shall be true and correct when made and at and as of the Closing
as if made at and as of the Closing (except for those representations and
warranties that address matters only as of a particular date or only with
respect to a specific period of time which need only be true and correct as of
such date or with respect to such period), except where the failure of such
representations or warranties to be true and correct (without giving effect to
any materiality qualifiers set forth in such representations and warranties)
does not have and would not reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect; PROVIDED, HOWEVER, that
notwithstanding the foregoing, the representations and warranties set forth in
Section 4.03 shall be true and correct in all material respects and the
representations and warranties set forth in the second sentence of Section 4.08
shall be true and correct in all respects at and as of the Closing as if made at
and as of the Closing (except for those
45
representations and warranties that address matters only as of a particular date
or only with respect to a specific period of time which need only be true and
correct as of such date or with respect to such period);
(b) the Company shall have performed in all material respects its
obligations hereunder required to be performed by it at or prior to the
Effective Time;
(c) since December 31, 2005, there shall not have been any change,
event, circumstance or effect that has had or would reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect;
(d) the Company shall have obtained the consents and Requisite
Regulatory Approvals listed in SCHEDULE 4.06, other than such consents and
approvals the failure of which to obtain would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect;
PROVIDED that the failure to obtain any consents or approvals due to the
identity of Parent or its Affiliates shall not be taken into account in
determining whether or not the condition in this Section 7.02(d) is satisfied;
and
(e) the Company shall have delivered to Parent a certificate (dated as
of the Closing Date), signed by an officer or officers with authority to bind
the Company as to compliance with the conditions set forth in paragraphs (a) (if
applicable), (b) and (d) of this Section 7.02.
For the avoidance of doubt, nothing in this Agreement shall be
construed to require or otherwise impose as a condition to Parent or Merger
Sub's obligation to consummate the Merger that Parent shall have received or
otherwise has available financing in order to satisfy its payment obligations
hereunder, including with respect to payment of the Merger Consideration.
SECTION 7.03. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY.
The obligations of the Company to consummate the Merger are subject to
the satisfaction (or waiver by the Company) at or prior to the Effective Time of
the following further conditions:
(a) the representations and warranties of Parent and Merger Sub
contained in this Agreement which are qualified as to materiality shall be true
and correct and all such representations and warranties that are not qualified
as to materiality shall be true and correct in all material respects, in each
case when made and at and as of the Closing Date as if made at and as of the
Closing Date (except for those representations and warranties that address
matters only as of a particular date or only with respect to a specific period
of time which need only be true and accurate as of such date or with respect to
such period);
(b) each of Parent and Merger Sub shall have performed in all material
respects all of its respective obligations hereunder required to be performed by
it at or prior to the Effective Time; and
46
(c) each of Parent and Merger Sub shall have delivered to the Company
certificates (dated as of the Closing Date), signed by an officer or officers
with authority to bind such Person as to compliance with the conditions set
forth in paragraphs (a) and (b) of this Section 7.03.
ARTICLE VIII
CLOSING; TERMINATION
SECTION 8.01. CLOSING.
(a) Unless this Agreement shall have been terminated and the Merger
abandoned, the closing of the transactions contemplated hereby (the "CLOSING")
shall take place at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx on the third business day following the satisfaction
or waiver of the conditions set forth in Article VII (excluding conditions that,
by their terms, cannot be satisfied until the Closing, but subject to the
satisfaction or wavier of such conditions at the Closing) or at such other place
and on such other date as shall be mutually agreed to by Parent and the Company.
At the Closing, the parties shall exchange the documents referred to in Article
VII and all necessary filings with the Secretary of State to consummate the
Merger under the DGCL (including the Certificate of Merger) shall be made in
accordance with the applicable provisions of the DGCL.
(b) Notwithstanding the foregoing, if in Parent's reasonable judgment
delaying the Closing is necessary or desirable in connection with obtaining the
Financing or consummation of the "Restructuring" substantially as contemplated
by the Financing Commitment (i) so that consummation of the Merger pursuant to
this Agreement will not result in a disqualification of Parent's status as a
real estate investment trust under the Code, or (ii) in connection with any
filings with respect to the Securities or such Restructuring with the Securities
and Exchange Commission relating to the transactions contemplated by this
Agreement deemed necessary or desirable by Parent: (A) Parent shall have the
right, by notice given to the Company on or prior to the third business day
following the satisfaction of the conditions set forth in Article VII, to delay
the Closing until such date as Parent shall determine (but not later than
January 31, 2007); and (B) Parent shall have the further right (if Parent has
exercised its right to delay the Closing under subclause (A)), by notice given
to the Company on or prior to January 26, 2007, to delay the Closing to the
extent that, in Parent's reasonable judgment, such delay is necessary or
desirable in connection with obtaining the Financing for either or both of the
reasons set forth in clauses (i) and (ii) above, until such date as Parent shall
determine (but not later than June 30, 2007); PROVIDED that if Parent exercises
its right to delay the Closing under subclause (B), simultaneously with giving
notice to delay the Closing, Parent shall deposit with the Escrow Agent an
amount of cash equal to one hundred million dollars ($100,000,000.00) (the "GOOD
FAITH DEPOSIT") pursuant to an escrow agreement on mutually agreeable terms
consistent with the terms of this Agreement. If the Merger shall not have
occurred on or prior to June 29, 2007 (X) other than as a result of the failure
to be satisfied (or waived) of one or more of the applicable conditions set
forth in Sections 7.01 or Section 7.02(b), (d) and (e), the Good Faith Deposit
(and interest accrued thereon) shall be paid to the Company and may be retained
by it in addition to and not in lieu of any other remedy available to the
Company at law or in equity, and, accordingly, shall not be deemed to be a
substitute therefor or
47
approximation thereof, or (Y) as a result of the failure to be satisfied (or
waived) of one or more of the applicable conditions set forth in Section 7.01 or
Section 7.02(b), (d) and (e), the Good Faith Deposit (and interest accrued
thereon) shall be paid to Parent. The escrow agreement referred to above shall
contain provisions with respect to the timing and procedure of distributions of
the Good Faith Deposit (and interest accrued thereon) consistent with the
foregoing, and shall provide that, upon consummation of the Merger, the Good
Faith Deposit (and interest accrued thereon) shall be applied to the Exchange
Fund.
SECTION 8.02. TERMINATION.
Anything herein or elsewhere to the contrary notwithstanding, this
Agreement may be terminated and the Merger contemplated herein may be abandoned
at any time prior to the Effective Time, whether before or after obtaining the
Stockholder Approval:
(i) by mutual written consent of Parent, Merger Sub and the
Company;
(ii) by the Company or Parent, if the Merger shall not have
occurred on or prior to January 31, 2007, or if Parent has exercised its
rights under Section 8.01(b)(B), if the Merger shall not have occurred on
or prior to June 30, 2007; PROVIDED, HOWEVER, that the right to terminate
this Agreement and abandon the Merger under this clause (ii) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Merger
to occur on or prior to such date; or
(iii) by the Company or Parent in the event that any court of
competent jurisdiction or other Governmental Entity located or having
jurisdiction within the United States shall have issued a final Judgment or
taken any other final action restraining, enjoining or otherwise
prohibiting the Merger and such Judgment or other action is or shall have
become final and nonappealable.
SECTION 8.03. EFFECT OF TERMINATION.
In the event of the termination of this Agreement as provided in
Section 8.02 hereof, written notice thereof shall forthwith be given to the
other parties specifying the provision hereof pursuant to which such termination
is made, and this Agreement shall forthwith become null and void, and there
shall be no liability on the part of any of the parties hereto except (i) for
fraud or for willful breach of this Agreement (it being understood and agreed
that any failure by Parent or Merger Sub to consummate the Merger in accordance
with the terms of this Agreement due to the failure of Parent to obtain the
Financing shall be deemed to be a willful breach of this Agreement) and (ii) as
set forth in Section 9.02.
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ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
None of the representations, warranties, covenants and agreements in
this Agreement or in any instrument delivered pursuant to this Agreement,
including any rights arising out of any breach of such representations,
warranties, covenants and agreements, shall survive the Effective Time, except
for (i) those covenants and agreements contained herein that by their terms
apply or are to be performed in whole or in part after the Effective Time and
(ii) this Article IX.
SECTION 9.02. COSTS AND EXPENSES.
Except as otherwise specifically provided herein, each party shall
bear its own expenses in connection with this Agreement and the transactions
contemplated hereby.
SECTION 9.03. NOTICES.
All notices or other communications required or permitted by this
Agreement shall be effective upon receipt and shall be in writing and delivered
personally or by overnight courier, or sent by facsimile, as follows:
(i) if to Parent or Merger Sub, to:
Hospitality Properties Trust
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn.: President
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxx & Worcester LLP
Xxx Xxxx Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, XX 00000
Attn.: Xxxxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
49
(ii) if to the Company, to:
TravelCenters of America, Inc.
00000 Xxxxxx Xxxxx Xxxx
Xxxxx 000
Xxxxxxxx, Xxxx 00000-0000
Attention: General Counsel
Facsimile: (000) 000-0000
with copies to
Oak Hill Capital Partners, L.P.
000 Xxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000
Attention: Controller
Facsimile: (000) 000-0000
Keystone Group, L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
(iii) if to the Stockholders Representative, to:
Oak Hill Capital Partners, L.P.
000 Xxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000
Attention: Controller
Facsimile: (000) 000-0000
with a copy to:
Keystone Group, L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
or to such other address as hereafter shall be furnished as provided in this
Section 9.03 by any of the parties hereto to the other parties hereto.
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SECTION 9.04. STOCKHOLDERS REPRESENTATIVE.
(a) The parties to this Agreement shall cooperate with the
Stockholders Representative and any accountants, attorneys or other agents whom
it may retain to assist in carrying out its duties hereunder. The Stockholders
Representative may communicate with any Stockholder or any other Person
concerning his responsibilities hereunder, but it is not required to do so. The
Stockholders Representative has a duty to serve in good faith the interests of
the Stockholders and other stockholders of the Company who designate the
Stockholders Representative to act as such, and to perform its designated role
under this Agreement and the Escrow Agreement, but the Stockholders
Representative shall have no financial liability whatsoever to any Person
relating to its service hereunder (including any action taken or omitted to be
taken), except that it shall be liable for harm which it directly causes by an
act of willful misconduct. The Stockholders Representative may resign at any
time by notifying in writing Parent, the Company and the Stockholders.
(a) The Stockholders Representative represents and warrants to the
Company, Parent and Merger Sub: (i) that it has all necessary power, authority
and capacity to execute and deliver this Agreement and to perform its
obligations under Sections 3.02, 3.03, 3.04, 9.04, 9.08 and 9.09; (ii) the
execution, delivery and performance of this Agreement by the Stockholders
Representative has been duly and validly authorized by all necessary action on
the part of the Stockholders Representative and (iii) this Agreement has been
duly and validly executed and delivered by the Stockholders Representative and,
assuming the due authorization, execution and delivery by each other party
hereto, constitutes a legal, valid and binding obligation of the Stockholders
Representative, enforceable against it in accordance with its terms, except that
such enforceability may be limited by (x) bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws relating
to creditors' rights generally, (y) general principles of equity (whether
applied in a proceeding at law or in equity) and (z) any implied covenant of
good faith and fair dealing.
SECTION 9.05. COUNTERPARTS.
This Agreement may be executed and delivered (including by facsimile
transmission) in any number of counterparts, and by the different parties hereto
in separate counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute a single instrument.
SECTION 9.06. ENTIRE AGREEMENT.
This Agreement (including the Schedules referred to herein) and the
Confidentiality Agreement sets forth the entire understanding and agreement
between the parties as to the matters covered herein and supersedes and replaces
any prior understanding, agreement or statement of intent, in each case, written
or oral, among the parties, of any and every nature with respect thereto.
SECTION 9.07. GOVERNING LAW; EXCLUSIVE JURISDICTION.
This Agreement shall be governed in all respects, by the laws of the
State of Delaware, including validity, interpretation and effect, without regard
to principles of conflicts of
51
law. The parties hereto irrevocably and unconditionally consent to submit to the
exclusive jurisdiction of the courts of the State of Delaware for any lawsuits,
actions or other proceedings arising out of or related to this Agreement and
agree not to commence any lawsuit, action or other proceeding except in such
courts. The parties hereto further agree that service of process, summons,
notice or document by mail to their addresses set forth above shall be effective
service of process for any lawsuit, action or other proceeding brought against
them in any such court. The parties hereto irrevocably and unconditionally waive
any objection to the laying of venue of any lawsuit, action or other proceeding
arising out of or related to this Agreement in the courts of the State of
Delaware, and hereby further irrevocably and unconditionally waive and agree not
to plead or claim in any such court that any such lawsuit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
SECTION 9.08. THIRD PARTY RIGHTS; ASSIGNMENT.
Except as specified in Section 6.07 and except for the rights of the
holders of Company Securities to receive Merger Consideration in accordance with
Article II and to recover, solely through an action brought by the Company,
damages from Parent in the event of a breach of this Agreement by Parent or
Merger Sub, this Agreement is intended to be solely for the benefit of the
parties hereto and is not intended to confer any benefits upon, or create any
rights in favor of, any Person other than the parties hereto and shall not be
assignable without the prior written consent of the Company, Parent and the
Stockholders Representative.
SECTION 9.09. WAIVERS AND AMENDMENTS.
(a) This Agreement may be amended by the parties hereto by action
taken by or on behalf of their respective Boards of Directors; PROVIDED,
HOWEVER, that after the date hereof, there shall be made no amendment that by
Law requires further approval by the stockholders of the Company without the
further approval of such stockholders. No modification of or amendment to this
Agreement shall be valid unless in a writing signed by the parties hereto
referring specifically to this Agreement and stating the parties' intention to
modify or amend the same.
(b) Any party hereto may (i) extend the time for the performance of
any of the obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (iii) subject to the requirements of
applicable Law, waive compliance with any of the agreements or conditions
contained herein. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the party or parties to be bound thereby and
referring specifically to the term or condition to be waived. The failure of any
party to assert any rights or remedies shall not constitute a waiver of such
rights or remedies.
SECTION 9.10. SCHEDULES.
Disclosure of any fact or item in any Schedule shall not be deemed to
constitute an admission that such item or fact is material for the purposes of
this Agreement.
SECTION 9.11. ENFORCEMENT.
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The parties agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance
with their specific terms. It is accordingly agreed that the parties shall be
entitled to specific performance of the terms hereof and costs of enforcement
(including attorneys fees); this being in addition to any other remedy to which
such parties are entitled at law or in equity. The parties agree that,
notwithstanding anything to the contrary contained in this Agreement, in the
event of a breach of this Agreement by Parent or Merger Sub (whether or not due
to a failure to obtain the Financing), the damages recoverable by the Company
for itself and on behalf of the holders of the Company Securities shall be
determined by reference to the total amount that would have been recoverable by
the holders of Company Securities if all such holders brought an action against
Parent as intended third party beneficiaries hereunder.
SECTION 9.12. [RESERVED.]
SECTION 9.13. HEADINGS; INTERPRETATION.
The descriptive headings contained in this Agreement are included for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement. When reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement unless otherwise
indicated. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." The words "hereof," "herein," "hereby" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. The word "or" shall
not be exclusive. This Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the party
drafting or causing any instrument to be drafted.
SECTION 9.14. NONLIABILITY OF TRUSTEES.
THE DECLARATION OF TRUST ESTABLISHING PARENT, A COPY OF WHICH,
TOGETHER WITH ALL AMENDMENTS THERETO (THE "DECLARATION"), IS DULY FILED WITH THE
DEPARTMENT OF ASSESSMENTS AND TAXATION OF THE STATE OF MARYLAND, PROVIDES THAT
THE NAME "HOSPITALITY PROPERTIES TRUST" REFERS TO THE TRUSTEES UNDER THE
DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY, AND
THAT NO TRUSTEE OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF THE PARENT SHALL BE
HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR
CLAIM AGAINST, THE PARENT. ALL PERSONS DEALING WITH THE PARENT, IN ANY WAY,
SHALL LOOK ONLY TO THE ASSETS OF PARENT FOR THE PAYMENT OF ANY SUM OR THE
PERFORMANCE OF ANY OBLIGATION.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Agreement has been executed and delivered as
of the date first written above.
TRAVELCENTERS OF AMERICA, INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President and CEO
HOSPITALITY PROPERTIES TRUST
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: President
HPT TA MERGER SUB INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: President
SOLELY IN ITS CAPACITY AS "STOCKHOLDERS
REPRESENTATIVE" FOR PURPOSES OF SECTIONS
3.02, 3.03, 3.04, 9.04, 9.08 AND 9.09 OF
THE AGREEMENT:
OAK HILL CAPITAL PARTNERS, L.P.
By: OHCP GenPar, L.P., its General
Partner
By: OHCP MGP, LLC, its General Partner
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
[SIGNATURE PAGE TO MERGER AGREEMENT]
