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