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EXHIBIT 2.1
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RECAPITALIZATION AGREEMENT AND PLAN OF MERGER
Among
TravelCenters of America, Inc.,
TCA Acquisition Corporation,
Clipper Capital Associates, L.P.,
National Partners, L.P.,
National Partners III, L.P.,
Clipper/Merchant I, L.P.,
Olympus Private Placement Fund, L.P.,
and
Olympus Growth Fund II, L.P.
May 31, 2000
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.............................................................................................1
Section 1.01. Certain Definitions........................................................................1
Section 1.02. Additional Definitions.....................................................................6
ARTICLE II THE MERGER.............................................................................................8
Section 2.01. The Merger.................................................................................8
Section 2.02. Effect of Merger...........................................................................9
Section 2.03. Additional Actions.........................................................................9
Section 2.04. Certificate of Incorporation By-laws, Directors and Officers of the Surviving Corporation..9
Section 2.05. Effect of Merger on Capital Stock of Constituent Corporations.............................10
Section 2.06. Effect of Merger on Company Stock Options and Warrants....................................12
ARTICLE III PAYMENT OF MERGER CONSIDERATION......................................................................13
Section 3.01. Merger Consideration......................................................................13
Section 3.02. Post-Closing Adjustment of Merger Consideration...........................................14
Section 3.03. Escrow Agreement and Escrow Fund..........................................................17
Section 3.04. Exchange of Certificates Representing Company Securities..................................18
Section 3.05. Treatment of Dissenting Shares............................................................20
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........................................................20
Section 4.01. Organization..............................................................................20
Section 4.02. Subsidiaries..............................................................................21
Section 4.03. Capitalization............................................................................21
Section 4.04. Authorization.............................................................................22
Section 4.05. No Violation..............................................................................22
Section 4.06. Approvals.................................................................................22
Section 4.07. Periodic SEC Filings, Financial Statements; Capital Expenditures..........................23
Section 4.08. Absence of Certain Transactions...........................................................24
Section 4.09. Taxes.....................................................................................25
Section 4.10. Litigation................................................................................27
Section 4.11. Environmental Matters.....................................................................28
Section 4.12. Title to Property.........................................................................29
Section 4.13. Condition of Property.....................................................................30
Section 4.14. Contracts.................................................................................30
Section 4.15. Employee and Labor Matters and Plans......................................................30
Section 4.16. Insurance Policies........................................................................32
Section 4.17. Intellectual Property.....................................................................33
Section 4.18. Permits...................................................................................34
Section 4.19. Compliance with Laws......................................................................34
Section 4.20. Brokerage Fees............................................................................34
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER............................................................35
Section 5.01. Organization..............................................................................35
Section 5.02. Authorization.............................................................................35
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Section 5.03. No Violation..............................................................................35
Section 5.04. Approvals.................................................................................36
Section 5.05. Available Funds...........................................................................36
Section 5.06. Brokerage Fees............................................................................36
ARTICLE VI COVENANTS.............................................................................................37
Section 6.01. Interim Operations of the Company.........................................................37
Section 6.02. Access to Information; Cooperation........................................................39
Section 6.03. Consents and Approvals....................................................................39
Section 6.04. Employment Matters........................................................................39
Section 6.05. Publicity.................................................................................40
Section 6.06. Notification of Certain Matters...........................................................40
Section 6.07. Directors' and Officers' Indemnification..................................................41
Section 6.08. [RESERVED]................................................................................41
Section 6.09. Stockholder Approval......................................................................41
Section 6.10. [RESERVED]................................................................................42
Section 6.11. Additional Agreements.....................................................................42
Section 6.12. [RESERVED]................................................................................42
Section 6.13. Litigation................................................................................42
Section 6.14. No Adverse Change in Financial Commitments................................................42
Section 6.15. Stockholder Vote..........................................................................42
Section 6.16. Rollover Participation....................................................................43
Section 6.17. Joinder Agreement.........................................................................44
ARTICLE VII CONDITIONS...........................................................................................44
Section 7.01. Conditions to the Obligations of All Parties..............................................44
Section 7.02. Conditions to the Obligations of Purchaser................................................44
Section 7.03. Conditions to the Obligations of the Company..............................................45
ARTICLE VIII INDEMNIFICATION.....................................................................................46
Section 8.01. Survival of Representations and Warranties................................................46
Section 8.02. Indemnification of the Surviving Corporation..............................................46
Section 8.03. Indemnification by the Surviving Corporation..............................................47
Section 8.04. Indemnification Baskets and Other Limitations.............................................47
Section 8.05. Indemnification Caps......................................................................47
Section 8.06. Indemnification of Third-Party Claims.....................................................47
Section 8.07. Net Insurance and Other Indemnification...................................................48
Section 8.08. Source of Funds; Exclusivity of Indemnification...........................................49
ARTICLE IX CLOSING; TERMINATION..................................................................................49
Section 9.01. Closing...................................................................................49
Section 9.02. Termination...............................................................................49
Section 9.03. Effect of Termination.....................................................................50
ARTICLE X GENERAL PROVISIONS.....................................................................................50
Section 10.01. Costs and Expenses.......................................................................50
Section 10.02. Notices..................................................................................50
Section 10.03. Stockholders' Representative and Certain Other Matters...................................52
Section 10.04. Counterparts.............................................................................53
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Section 10.05. Entire Agreement.........................................................................53
Section 10.06. Governing Law; Exclusive Jurisdiction....................................................53
Section 10.07. Third Party Rights; Assignment...........................................................53
Section 10.08. Waivers and Amendments...................................................................53
Section 10.09. Schedules................................................................................54
Section 10.10. Enforcement..............................................................................54
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EXHIBIT 2.1
RECAPITALIZATION AGREEMENT AND PLAN OF MERGER
This RECAPITALIZATION AGREEMENT AND PLAN OF MERGER (the "AGREEMENT"),
dated May 31, 2000, among TravelCenters of America, Inc., a Delaware corporation
(the "COMPANY"), TCA Acquisition Corporation, a Delaware corporation
("PURCHASER"), Clipper Capital Associates, L.P., a Delaware limited partnership
("CLIPPER"), National Partners, L.P., a Delaware limited partnership, National
Partners III, L.P., a Delaware limited partnership, Clipper/Merchant I, L.P., a
Delaware limited partnership, Olympus Private Placement Fund, L.P., a Delaware
limited partnership, Olympus Growth Fund II, L.P., a Delaware limited
partnership (each of the foregoing (other than the Company or Purchaser), a
"STOCKHOLDER," and collectively, the "STOCKHOLDERS"), and Clipper in its
capacity as the "STOCKHOLDERS REPRESENTATIVE."
WHEREAS, the Board of Directors of each of Purchaser and the Company
have approved the merger of Purchaser with and into the Company (the "MERGER")
upon the terms and subject to the conditions set forth in this Agreement, with
the Company surviving the Merger; and
WHEREAS, the Stockholders own in excess of 70% of the voting power of
the Company and are parties to this Agreement solely (other than Clipper, which
is also acting as Stockholders Representative hereunder) for purposes of
Sections 6.05, 6.11, 6.15 and 6.16 and Article X.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements of the parties hereto contained herein, and other good
and valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, and subject to the satisfaction or waiver of the conditions
hereof, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. CERTAIN DEFINITIONS.
Certain terms used in this Agreement and the Schedules hereto are
defined as follows:
"APPLICABLE TIME" shall mean the earlier of July 31, 2000 or the
Effective Time.
"CLOSING DATE" shall mean the date on which the Closing occurs.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMPANY CLOSING COSTS" shall mean any and all costs and expenses of
the Company or its affiliates incurred in connection with, or as a result of or
related to, the sale process with respect to the Company (including due
diligence related activities), the negotiation, preparation, execution and
closing of this Agreement and the transactions contemplated hereby, including,
but not limited to, (i) the fees and expenses of all professional advisors,
investment
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bankers, brokers, accountants, attorneys, consultants, engineers,
representatives (including fees or expenses payable to any Stockholder of the
Company (including the fees payable described on SCHEDULE 4.20)), employees of
the Company and (ii) all management bonus and similar payments required to be
made as a result of the consummation of the transactions pursuant hereto,
including all Senior Management Incentive Bonus payments required pursuant to
the Key Executive Employment Agreements and all payments required under the
Success Bonus Letters; PROVIDED, HOWEVER, Company Closing Costs shall not
include any Special Costs.
"COMPANY COMMON STOCK" shall mean the Common Stock, $.01 par value per
share, of the Company.
"COMPANY MATERIAL ADVERSE EFFECT" shall mean any change or effect that
is materially adverse to the business, properties, assets, financial condition
or results of operations of the Company and the Company Subsidiaries taken as a
whole; PROVIDED, HOWEVER, that no Company Material Adverse Effect shall be
deemed to have occurred as a result solely of any change in general economic
conditions affecting generally the industry in which the Company and its
Subsidiaries competes and general market conditions in the United States.
"COMPANY PREFERRED STOCK" shall mean the Preferred Stock, $.01 par
value per share, of the Company which has been divided into four series: (i)
Convertible Preferred Stock, Series I, (ii) Convertible Preferred Stock, Series
II, (iii) Senior Convertible Participating Preferred Stock, Series I, and (iv)
Senior Convertible Participating Preferred Stock, Series II.
"COMPANY STOCK" shall mean all shares of the Company's capital stock
authorized, issued or outstanding prior to the Effective Time, of whatever class
or series, including, without limitation, all of the Company Common Stock and
Company Preferred Stock of the Company.
"COMPANY SUBSIDIARY" shall mean any Subsidiary of the Company.
"EFFECTIVE TIME" shall mean the time the Certificate of Merger is filed
with the Secretary of State.
"ENVIRONMENTAL LAW" shall mean any and all Laws of any Governmental
Entity relating to (i) protection of natural resources, the environment or human
health (as relating to the environment or the work place), (ii) Hazardous
Materials generation, handling, treatment, storage, disposal or transportation,
or (iii) exposure to Hazardous Materials. The term "ENVIRONMENTAL LAW" shall
include, but not be limited to the following statutes and the regulations
promulgated thereunder: the Clean Air Act, 42 U.S.C. Section 7401 et seq., the
Clean Water Act, 33 U.S.C. Section 1251 et seq., the Occupational Safety and
Health Act, 29 U.S.C. Section Section 651 et seq., The Resource Conservation and
Recovery Act ("RCRA"), 42 U.S.C. Section 6901 et seq., the Superfund Amendment
and Reauthorization Act, 42 U.S.C. Section 11011 et seq., the Toxic Substances
Control Act, 15 U.S.C. Section 2601 et seq., the Safe Drinking Water Act, 42
U.S.C. Section 300 et seq., the Comprehensive Environmental Response,
Compensation, and Liability Act ("CERCLA"), 42 U.S.C. Section 9601 et seq., and
the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. Section 11001
et seq.
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"ENVIRONMENTAL PERMIT" shall mean any license, permit or registration
required by any Environmental Law for the operation of business of the Company
or any Company Subsidiary.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA AFFILIATE" shall mean each trade or business (whether or not
incorporated) which together with the Company would be deemed to be a `single
employer' within the meaning of Section 4001(b)(1) of ERISA or subsections (b),
(c), (m) or (o) of Section 414 of the Code.
"ESTIMATED $33.30 OPTION SPREAD" shall mean the aggregate amount to
which the holders of $33.30 Company Stock Options and the Freightliner Options
are entitled based upon the Estimated Per Share Merger Consideration pursuant to
Section 3.01.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"FREIGHTLINER" shall mean Freightliner LLC, a Delaware limited
liability company (formerly known as Freightliner Corporation).
"FREIGHTLINER OPTION" shall mean Freightliner's option to purchase up
to 100,000 shares of Company Common Stock pursuant to that certain Investment
and Option Agreement dated July 21, 1999 between the Company and Freightliner.
"FREIGHTLINER OPTION EXERCISE PRICE" shall be an amount equal to the
amount provided for in the Freightliner Option.
"FULLY DILUTED BASIS" means, when used with respect to the outstanding
number of shares of capital stock of the Company as of any date, the sum of (i)
all shares of Company Stock outstanding on that date PLUS (ii) the number of
shares of Common Stock issuable upon the exercise, exchange or conversion of the
Company Stock Options, the Company Warrants and the Freightliner Option.
"GAAP" shall mean United States generally accepted accounting
principles consistently applied.
"GOVERNMENTAL ENTITY" shall mean any federal, state, local or foreign
court, administrative agency or commission, court or other governmental
authority or instrumentality or subdivision thereof.
"HAZARDOUS MATERIALS" shall mean any chemical, waste, pollutant, or
contaminant that is regulated or that is subject to remedial obligations under
any Environmental Law including petroleum and petroleum products (including oil,
gasoline and diesel fuel) asbestos and polychlorinated biphenyls.
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"HSR ACT" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1976, as amended.
"INDEBTEDNESS" means, with respect to the Company and the Company
Subsidiaries, without duplication and exclusive of intercompany Indebtedness,
all indebtedness for borrowed money, including without limitation, the aggregate
principal amount of, and any accrued interest (and original issue discount) and
applicable prepayment charges or premiums (including any "make-whole" or similar
premium or penalty payable in connection with redemption or otherwise
extinguishing such indebtedness whether or not then due) with respect to all
borrowed money, purchase money financing and capitalized lease obligations;
PROVIDED, HOWEVER, that in the case of capital lease obligations, "Indebtedness"
shall not include any lease that is treated by the Company or any Company
Subsidiary as an operating lease.
"INTEREST FACTOR" means an amount equal to the Merger Consideration
(calculated excluding the Interest Factor) times an interest rate of fifteen
percent (15%) per annum for the period, if any, from August 1, 2000 to the
Effective Time.
"IRS" shall mean the United States Internal Revenue Service, or any
successor agency thereto.
"JUDGMENT" shall mean any and all judgments, orders, writs, directives,
rulings, decisions, injunctions (temporary, preliminary or permanent), decrees
or awards of any Governmental Entity.
"KNOWLEDGE" in the phrase "TO ITS KNOWLEDGE" or a similar phrase, when
used to qualify a representation of a party, shall be deemed to be that
knowledge actually held by the individuals listed on SCHEDULE 1.01(a) hereto, if
the Company is making such representation, at the time such representation is
made, in all cases, after the individual whose knowledge is in question has
satisfied himself or herself with respect to the subject matter thereof (it
being understood and agreed that no listed individual shall have responsibility
to make investigation with respect to subject matter areas beyond the scope of
such individual's responsibilities within the Company).
"LAW" shall mean all laws (whether statutory or otherwise), ordinances,
rules, regulations and Judgments of all Governmental Entities.
"LIABILITIES" shall mean any liabilities or obligations of any nature,
whether accrued, absolute, contingent or otherwise, whether due or to become due
and whether or not required to be disclosed in the SEC Filings.
"LIEN" shall mean, with respect to any property or asset, any mortgage,
pledge, security interest, lien (statutory or other), charge, encumbrance or
other similar restrictions or limitations of any kind or nature whatsoever on or
with respect to such property or asset.
"▇▇▇▇▇▇▇ ▇▇▇▇▇ SYNTHETIC LEASE" shall mean the Agreement for Lease,
dated September 9, 1999, among TCA Network Funding Limited Partnership, TA
Operating Corporation and National Auto/Truckstops, Inc. and the related Lease
Agreement, dated
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September 9, 1999, among TCA Network Funding Limited Partnership, TA Operating
Corporation and National Auto/Truckstops, Inc.
"PERMITS" shall mean all franchises, licenses, authorizations,
approvals, permits (excluding Environmental Permits), consents or other rights
granted by any Governmental Entity and all certificates of convenience or
necessity, immunities, privileges, licenses, concessions, consents, grants,
ordinances and other rights, of every character whatsoever required for the
conduct of business and the use of properties by the Company and the Company
Subsidiaries as currently conducted or used.
"PERSON" shall mean any individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization or other
entity or government or any agency or political subdivision thereof.
"PURCHASER CLOSING COSTS" shall mean any and all costs and expenses of
Purchaser or its affiliates incurred in connection with, or as a result of, the
negotiation, preparation, execution and closing of the transactions contemplated
hereby, including, but not limited to, the fees and expenses of all professional
advisors, investment bankers, brokers, accountants, attorneys, consultants,
engineers, representatives, employees, etc. of Purchaser or its affiliates.
"PURCHASER MATERIAL ADVERSE EFFECT" shall mean any change or effect
that is materially adverse to the business, financial condition or results of
operations of the Purchaser; PROVIDED, HOWEVER, that no Purchaser Material
Adverse Effect shall be deemed to have occurred as a result solely of any
general economic conditions affecting generally the industry in which Purchaser
competes and general market conditions in the United States.
"PROCEEDING" shall mean any action, claim, suit, or legal,
administrative, arbitration or other alternative dispute resolution proceeding
or investigation.
"REQUISITE REGULATORY APPROVALS" shall mean all permits, approvals,
filings and consents required to be obtained or made, and all waiting periods
required to expire prior to the Merger under applicable Laws, including without
limitation notifications, approvals and filings pursuant to the HSR Act.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"SERIES I CONVERTIBLE PREFERRED STOCK" shall mean the series of Company
Preferred Stock designated Convertible Preferred Stock, Series I.
"SERIES I SENIOR CONVERTIBLE PARTICIPATING PREFERRED STOCK" shall mean
the series of Company Preferred Stock designated Senior Convertible
Participating Preferred Stock, Series I.
"SERIES II CONVERTIBLE PREFERRED STOCK" shall mean the series of
Company Preferred Stock designated Convertible Preferred Stock, Series II.
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"SERIES II SENIOR CONVERTIBLE PARTICIPATING PREFERRED STOCK" shall mean
the series of Company Preferred Stock designated Senior Convertible
Participating Preferred Stock, Series II.
"SPECIAL COSTS" shall mean any and all out-of-pocket costs and
expenses, as specifically requested or approved by Purchaser in writing, (i)
paid by the Company or any Company Subsidiary prior to the Applicable Time or
(ii) accrued by the Company or any Company Subsidiary on the Actual Balance
Sheet, in order for the Company or any Company Subsidiary to comply with its
obligations pursuant to the third sentence of Section 6.02.
"STOCKHOLDER APPROVAL" shall mean the adoption and approval of this
Agreement and the Merger by the affirmative vote of or the written consent by
the holders of a majority of outstanding shares of all classes of the Company
Stock (other than the Series II Convertible Preferred Stock and Series II Senior
Convertible Participating Preferred Stock) voting together as a single class.
"SUBSIDIARY" shall mean, in respect of any specified Person, any
company or other entity of which 50% or more of the outstanding share capital or
other equity interest is owned, directly or indirectly, by such specified
Person.
"SUCCESS BONUS LETTERS" shall mean those letter agreements between TA
Operating Corporation and certain select employees that provide for the payment
of success bonuses upon the consummation of the transaction pursuant hereto. For
the purposes hereof, the Success Bonus Letters shall include those letter
agreements dated as of May 26, 2000 with the employees listed on EXHIBIT C
attached hereto.
"SURVIVING CORPORATION COMMON STOCK" shall mean the common stock of the
Surviving Corporation, as provided in Section 3.01(b).
"TARGET NET ASSET VALUE" shall mean $472,043,000.00.
"$33.30 COMPANY STOCK OPTIONS" shall mean Company Stock Options the
exercise price of which is $33.30.
SECTION 1.02. ADDITIONAL DEFINITIONS.
The following terms shall have the respective meanings specified in the
indicated Sections of this Agreement:
Defined Term Section Defined in
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Accounting Firm 3.02(b)
Actual Balance Sheet 3.02(a)
Actual Net Asset Value 3.02(a)
Agreed Rollover Shares 6.16
Agreement Preamble
Basket Amount 8.04
Beneficial Owner 6.08
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Defined Term Section Defined in
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Cap 8.05
Certificate of Merger 2.01
Certificates 3.04(a)
Chase 5.05
Clipper Preamble
Closing 9.01
Company Preamble
Company Intellectual Property 4.17
Company Litigation 4.10
Company Securities 3.02(b)
Company Stock Option Exercise Price 2.06(a)
Company Stock Options 2.06(a)
Company Warrant Exercise Price 2.06(b)
Company Warrants 2.06(b)
Confidentiality Agreement 6.02
Constituent Corporations 2.01
Contracts 4.14
Covered Party 6.07
CSFB 5.05
D&T 3.02(b)
DGCL 2.02
Dissenting Shares 2.05(d)
Employee Plan 4.15
Enterprise Value 3.01
Equity Commitment Letter 5.05
Escrow Agent 3.03
Escrow Agreement 3.03
Escrow Amount 3.03
Escrow Fund 3.03
Estimated Merger Consideration 3.01
Estimated Per Share Merger Consideration 3.01
Estimated $33.30 Option Spread Escrow Account 3.03
Excess Payment 3.02(c)
Exchange Agent 3.04(a)
Exchange Fund 3.04(a)
Financial Commitments 5.05
Indemnification Escrow Account 3.03
Indemnified Party 8.06
Indemnifying Party 8.06
Intellectual Property 4.17
Intellectual Property License 4.17
Joinder Agreement 6.17
Key Executive Employment Agreements 7.03(c)
Leased Premises 4.12(a)
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Defined Term Section Defined in
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Liability Termination Date 8.01
Losses 8.02
Management Stockholders 7.02(e)
Merger Recitals
Merger Consideration 3.01
Net Asset Statement 3.02(a)
Net Asset Value Escrow Account 3.03
Notice of Disagreement 3.02(b)
Other Holders 10.03(a)
Owned Property 4.12(a)
Parent 5.05
Parent Investment 6.16
Payment Shortfall 3.02(c)
Per Share Merger Consideration 3.01
Purchaser Preamble
Recipient(s) 3.02(c)
Rollover Company Stock 6.16
SEC Filings 4.07
Secretary of State 2.01
Share Certificate 3.02
Stockholders Preamble
Stockholders' Representative Preamble
Surviving Corporation 2.01
Surviving Corporation Party 8.02
Tax Returns 4.09
Taxes 4.09
Total Escrow Amount 3.03
Warrant Holders 2.06(b)
ARTICLE II
THE MERGER
SECTION 2.01. THE MERGER.
At the Effective Time, subject to the terms and conditions of this
Agreement, Purchaser shall be merged with and into the Company in accordance
with the General Corporation Law of the State of Delaware (the "DGCL"), with the
Company being the surviving corporation (following the Merger, the "SURVIVING
CORPORATION"). The Company and Purchaser are sometimes collectively referred to
as the "CONSTITUENT CORPORATIONS." The Merger shall be effective when a properly
executed Certificate of Merger, together with any other documents required by
the laws of the State of Delaware to effectuate the Merger (collectively, the
"CERTIFICATE OF MERGER"), shall be filed with the Secretary of State of the
State of Delaware (the "SECRETARY OF STATE"), which filing shall be made on the
Closing Date, as provided for in Section 9.01.
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SECTION 2.02. EFFECT OF MERGER.
By virtue of the Merger, as of the Effective Time, all rights,
privileges, immunities, powers and purposes of the Company and Purchaser, and
all the property, real and personal, including, without limitation, causes of
action, and every other asset of the Company and Purchaser, shall vest in the
Surviving Corporation, without any further act or deed, and the separate
existence of Purchaser shall cease and the corporate existence of the Company as
the Surviving Corporation and a corporation organized under the DGCL shall
continue unaffected and unimpaired by the Merger. The Surviving Corporation
shall assume and be liable for all the liabilities, obligations and penalties of
the Company and Purchaser. No liability or obligation due or to become due, and
no claim or demand for any cause of action existing against either the Company
or Purchaser, or any stockholder, officer or director thereof, shall be released
or impaired by the Merger. No Proceeding, whether civil or criminal, then
pending by or against either the Company or Purchaser or any stockholder,
officer or director thereof, shall ▇▇▇▇▇ or be discontinued as a result of or by
the Merger, but may be enforced, prosecuted, settled or compromised as if the
Merger had not occurred, or the Surviving Corporation may be substituted in such
Proceeding in place of either the Company or Purchaser.
SECTION 2.03. ADDITIONAL ACTIONS.
If, at any time after the Effective Time, the Surviving Corporation
shall consider or be advised that any deeds, bills of sale, assignments,
assurances or any other actions or things are necessary or desirable to (i)
vest, perfect or confirm, of record or otherwise, in the Surviving Corporation,
its right, title or interest in, to or under, any of the rights, properties or
assets of the Company or Purchaser acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with, the Merger or (ii) otherwise
carry out the purposes of this Agreement, the Company and its officers and
directors and Purchaser and its officers and directors shall be deemed to have
granted the Surviving Corporation an irrevocable power of attorney to execute
and deliver all such deeds, bills of sale, assignments and assurances and to
take and do all such other actions and things as may be necessary or desirable
to vest, perfect or confirm any and all rights, title, properties or assets in
the Surviving Corporation or to otherwise carry out the purposes of this
Agreement; and the officers and directors of the Surviving Corporation are fully
authorized in the name of the Company and of Purchaser or otherwise to take any
and all such actions.
SECTION 2.04. CERTIFICATE OF INCORPORATION BY-LAWS, DIRECTORS AND
OFFICERS OF THE SURVIVING CORPORATION.
(a) From and after the Effective Time, the Certificate of Incorporation
of Purchaser in effect immediately prior to the Effective Time shall be the
Certificate of Incorporation of the Surviving Corporation until altered, amended
or repealed in accordance with applicable Law and this Agreement, except that,
as of the Effective Time, Article I of such Certificate of Incorporation shall
be amended to read as follows: "THE NAME OF THE CORPORATION IS TRAVELCENTERS OF
AMERICA, INC."
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(b) From and after the Effective Time, the By-laws of Purchaser in
effect immediately prior to the Effective Time shall be the By-laws of the
Surviving Corporation until altered, amended or repealed in accordance with
applicable Law.
(c) From and after the Effective Time, the directors of Purchaser
immediately prior to the Effective Time shall be the directors of the Surviving
Corporation to serve until such time as their successors have been elected and
have qualified in accordance with the Certificate of Incorporation and By-laws
of the Surviving Corporation and applicable Law.
(d) From and after the Effective Time, the officers of the Company
shall be the officers of the Surviving Corporation to serve until such time as
their successors have been elected and qualified in accordance with the
Certificate of Incorporation and By-laws of the Surviving Corporation and
applicable Law.
SECTION 2.05. EFFECT OF MERGER ON CAPITAL STOCK OF CONSTITUENT
CORPORATIONS.
At the Effective Time, by virtue of the Merger and without any action
on the part of the holders of any class of capital stock of the Constituent
Corporations, the following shall occur:
(a) CONVERSION OF COMPANY STOCK. Each share of Company Stock issued and
outstanding immediately prior to the Effective Time (other than (w) shares of
Rollover Company Stock, (x) shares of Company Stock held by Purchaser, (y)
shares to be canceled pursuant to Section 2.05(c), and (z) Dissenting Shares),
shall, at the Effective Time, by virtue of the Merger and without any action on
the part of the holder thereof, be converted into the right to receive cash
(without interest) from the Surviving Corporation as follows:
(i) in respect of each share of Company Common Stock, an
amount equal to the Per Share Merger Consideration payable to the
holder thereof, without interest thereon, upon the surrender of the
certificate previously representing such share of Company Common Stock;
(ii) in respect of each share of Series I Convertible
Preferred Stock, an amount equal to the Per Share Merger Consideration
payable to the holder thereof, without interest thereon, upon the
surrender of the certificate previously representing such share of
Series I Convertible Preferred Stock;
(iii) in respect of each share of Series II Convertible
Preferred Stock, an amount equal to the Per Share Merger Consideration
payable to the holder thereof, without interest thereon, upon the
surrender of the certificate previously representing such share of
Series II Convertible Preferred Stock;
(iv) in respect of each share of Series I Senior Convertible
Participating Preferred Stock, an amount equal to the Per Share Merger
Consideration payable to the holder thereof, without interest thereon,
upon the surrender of the certificate previously representing such
share of Series I Senior Convertible Participating Preferred Stock; and
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(v) in respect of each share of Series II Senior Convertible
Participating Preferred Stock, an amount equal to the Per Share Merger
Consideration payable to the holder thereof, without interest thereon,
upon the surrender of the certificate previously representing such
share of Series II Senior Convertible Participating Preferred Stock.
Notwithstanding the foregoing, a portion of the Merger Consideration payable to
each holder of shares of Company Stock shall be deposited into the Escrow Fund
and distributed therefrom in accordance with Section 3.03.
(b) SHARES OF PURCHASER. Each share of the common stock, $.01 par value
per share, of Purchaser, issued and outstanding immediately prior to the
Effective Time, shall, at the Effective Time, by virtue of the Merger and
without any action on the part of Purchaser or any other Person, be converted
into one fully paid and nonassessable share of common stock, $.01 par value per
share, of the Surviving Corporation.
(c) TREASURY SHARES OF COMPANY. All shares of Company Stock that are
owned by the Company as treasury stock shall, at the Effective Time, be canceled
and retired and shall cease to exist without any consideration payable therefor.
(d) SHARES OF DISSENTING STOCKHOLDERS.
(i) Notwithstanding anything in this Agreement to the
contrary, any shares of Company Stock that are issued and outstanding
as of the Effective Time and that are held by a holder who has properly
exercised such holder's appraisal rights (the "DISSENTING SHARES")
under the DGCL shall not be converted into the right to receive the
consideration provided for in this Section 2.05, unless and until such
holder shall have failed to perfect, or shall have effectively
withdrawn or lost, his or her right to dissent from the Merger under
the DGCL and to receive such consideration as may be determined to be
due with respect to such Dissenting Shares pursuant to and subject to
the requirements of the DGCL. If any such holder shall have so failed
to perfect or have effectively withdrawn or lost such right, each share
of such holder's Company Stock shall thereupon be deemed to have been
converted into and to have become, as of the Effective Time, the right
to receive, without any interest thereon, the consideration provided
for in this Section 2.05.
(ii) The Company shall give Purchaser prompt notice of any
notice or demands for appraisal or payment for shares of Company Stock
received by the Company. The Company shall not, without the prior
written consent of Purchaser, make any payment with respect to, or
settle, offer to settle or otherwise negotiate, with respect to any
such demands.
(iii) Dissenting Shares, if any, after payments of fair value
in respect thereto have been made to the holders thereof pursuant to
the DGCL, shall be canceled.
(e) STOCK TRANSFER BOOKS. At the Effective Time, the stock transfer
books of the Company shall be closed and there shall be no further registration
of transfers of shares of Company Stock on the records of the Company. If, after
the Effective Time, certificates
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previously representing shares of Company Stock are presented to the Surviving
Corporation, they shall be canceled and exchanged for cash pursuant to the
provisions of this Section 2.05.
(f) CANCELLATION AND RETIREMENT OF SHARES OF COMPANY STOCK. At and
after the Effective Time, holders of certificates which immediately prior to the
Effective Time represented outstanding shares of Company Stock (except for
shares of Rollover Company Stock) shall cease to have any rights as stockholders
of the Company, except the right to receive the cash into which their shares of
Company Stock have been converted by the Merger as provided in Section 2.05(a).
SECTION 2.06. EFFECT OF MERGER ON COMPANY STOCK OPTIONS AND WARRANTS.
(a) As soon as practicable following the date of this Agreement, the
Board of Directors of the Company (or, if appropriate, any committee
administering the Company Stock Options (as defined below)) shall adopt such
resolutions or take such other commercially reasonable actions as may be
required to adjust the terms of all outstanding stock options to purchase
Company Common Stock granted under the National Auto/Truckstops Holdings
Corporation 1993 Stock Incentive Plan and the TravelCenters of America, Inc.
1997 Stock Incentive Plan (collectively, the "COMPANY STOCK OPTIONS") to provide
that, at the Effective Time, each Company Stock Option outstanding immediately
prior to the Effective Time shall vest as a consequence of the Merger and shall
be canceled in exchange for the payment by the Surviving Corporation to the
holder thereof immediately following the Effective Time (subject to any
applicable withholding taxes and subject to the deposit of a portion of such
cash into the Escrow Fund in accordance with Section 3.03) of an amount in cash
equal to (1) the total number of shares of Company Common Stock subject to such
Company Stock Options held by such holder MULTIPLIED BY (2) the excess, if any,
of the Per Share Merger Consideration over the exercise price per share of
Company Stock subject to such Company Stock Option held by such holder (such
exercise price, the "COMPANY STOCK OPTION EXERCISE PRICE").
(b) As soon as practicable following the date of this Agreement, the
Company shall take commercially reasonable action to obtain the consent of (i)
Barclays Bank PLC, under the Warrant dated April 14, 1993 for 11,026 shares of
Company Common Stock, (ii) Olympus Private Placement Fund, under the Warrant
dated April 14, 1993 for 16,539 shares of Company Common Stock, and (iii) ▇▇▇▇ &
Co., as Trustee of First Plaza Group, under the Warrant dated May 17, 1999 for
100,641 shares of Company Common Stock (collectively the "WARRANT HOLDERS") to
the modification of such Warrants (the "COMPANY WARRANTS"). The modification of
the Company Warrants shall, if entered into, provide for the cancellation of the
Company Warrants immediately prior to the Effective Time in exchange for the
payment by the Surviving Corporation to each Warrant Holder of cash (subject to
the deposit of a portion of such cash into the Escrow Fund in accordance with
Section 3.03) in an amount equal to (1) the number of shares of Company Common
Stock subject to the Company Warrant held by such Warrant Holder MULTIPLIED BY
(2) the excess of the Per Share Merger Consideration over the per share exercise
price set forth in the Company Warrant (such exercise price, the "COMPANY
WARRANT EXERCISE PRICE"). In the event no such modification is entered into,
Warrant Holders shall, pursuant to the Company Warrants, be entitled to receive,
upon exercise thereof following the Effective Time, the same consideration that
would have been received had such Company Warrants been exercised immediately
prior to the Effective Time.
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(c) As soon as practicable following the date of this Agreement, the
Company shall take commercially reasonable action to obtain the consent of
Freightliner to a modification of the Freightliner Option so that it shall allow
for the cancellation by Freightliner of the Freightliner Option immediately
prior to the Effective Time in exchange for the payment by the Surviving
Corporation to Freightliner of cash (subject to the deposit of a portion of such
cash into the Escrow Fund in accordance with Section 3.03) in an amount equal to
(1) the number of shares of Company Common Stock subject to the Freightliner
Option MULTIPLIED BY (2) the excess, if any, of the Per Share Merger
Consideration over the Freightliner Option Exercise Price.
ARTICLE III
PAYMENT OF MERGER CONSIDERATION
SECTION 3.01. MERGER CONSIDERATION.
The "MERGER CONSIDERATION" shall be an amount equal to:
(i) Seven Hundred Thirty-One Million Dollars
($731,000,000.00) (the "ENTERPRISE VALUE"),
(ii) PLUS the aggregate sum of the Company Stock Option
Exercise Price for all Company Stock Options,
(iii) PLUS the aggregate sum of the Company Warrant
Exercise Price for all Company Warrants,
(iv) PLUS the Freightliner Option Exercise Price,
(v) PLUS the aggregate amount of cash and cash
equivalents held by the Company and the Company
Subsidiaries immediately prior to the Applicable Time
in excess of Ten Million Dollars ($10,000,000),
(vi) PLUS an amount equal to the Interest Factor, if any,
(vii) PLUS, an amount equal to any Special Costs to the
extent paid prior to the Applicable Time or accrued
as a Liability on the Actual Balance Sheet,
(viii) MINUS the aggregate amount of Indebtedness of the
Company and the Company Subsidiaries immediately
prior to the Applicable Time,
(ix) PLUS OR MINUS, as the case may be, the amount of any
upward or downward adjustment (if any) of the Merger
Consideration, respectively, pursuant to Section 3.02
based on the difference between the Target Net Asset
Value and the Actual Net Asset Value (as defined in
Section 3.02), and
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(x) MINUS the amount of any Company Closing Costs to the
extent paid or payable after the Applicable Time,
except to the extent reflected as a Liability in the
Actual Net Asset Value.
The "PER SHARE MERGER CONSIDERATION" shall be (A) the Merger Consideration
DIVIDED BY (B) the aggregate number of shares of Company Stock outstanding
immediately prior to the Effective Time (calculated on a Fully Diluted Basis);
PROVIDED, that for purposes of calculating the Merger Consideration and the Per
Share Merger Consideration (and the Estimated Merger Consideration and the
Estimated Per Share Merger Consideration referred to below), the Company Stock
Option Exercise Price referred to in clause (ii) above with respect to $33.30
Company Stock Options (and the shares of Company Common Stock issuable upon
exercise thereof) and the Freightliner Option Exercise Price referred to in
clause (iv) above with respect to the Freightliner Option (and the shares of
Company Common Stock issuable upon exercise thereof) (collectively, "EXCLUDED
ITEMS"), shall not be taken into account, unless (i) the Per Share Merger
Consideration (and the Estimated Per Share Merger Consideration), as determined
without taking into account the Excluded Items, exceeds $33.30 and (ii) in the
case of the Freightliner Option Exercise Price (and the shares of Company Common
Stock issuable upon exercise thereof ), the modification referred in Section
2.06(c) is effected. The "ESTIMATED MERGER CONSIDERATION" and the "ESTIMATED PER
SHARE MERGER CONSIDERATION" shall mean the Merger Consideration and the Per
Share Merger Consideration, respectively, as estimated in good faith and agreed
to in writing by Purchaser and the Company no more than three (3) days prior to
the Closing.
SECTION 3.02. POST-CLOSING ADJUSTMENT OF MERGER CONSIDERATION.
(a) ACTUAL BALANCE SHEET AND NET ASSET STATEMENT. Within forty-five
(45) days following the Closing Date, the Surviving Corporation shall deliver to
the Stockholders' Representative and the Escrow Agent an audited balance sheet
of the Company and any Company Subsidiaries as of the close of business on the
day immediately preceding the earlier of the Closing Date or August 1, 2000
prepared in accordance with GAAP applied in a manner consistent with the balance
sheets described in Section 4.07 but without giving effect to any changes in
accruals (including tax accruals with respect to the exercise or cancellation of
Company Stock Options between January 1, 2000 and the Effective Time) for any
items resulting from the transactions contemplated hereby (the "ACTUAL BALANCE
SHEET"), and a statement (the "NET ASSET STATEMENT") that sets forth the Actual
Net Asset Value, and the final calculation of the Merger Consideration. The
"ACTUAL NET ASSET VALUE" shall be an amount equal to the Net Asset Value of the
Company and Company Subsidiaries as reflected on the Actual Balance Sheet as
determined in accordance with this Section 3.02 and shall be defined as (a) the
current assets of the Company and the Company Subsidiaries, excluding (1) cash,
(2) cash equivalents, (3) receivables associated with the ▇▇▇▇▇▇▇ ▇▇▇▇▇
Synthetic Lease, and (4) any current or deferred income or franchise tax assets,
MINUS (b) the current liabilities of the Company and the Company Subsidiaries,
excluding (1) the current portion of any Indebtedness, (2) accrued liabilities
for construction costs associated with the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Synthetic Lease, (3)
any current or deferred income or franchise tax liabilities included in current
liabilities, and (4) any accrued interest related to Indebtedness, PLUS (c) the
net book value of property and equipment, PLUS (d) investments in
non-subsidiaries (which shall be valued at original cost) as disclosed in
SCHEDULE 3.02(a). In addition, the Actual Net Asset Value shall not take into
account any Purchaser Closing Costs. The Surviving Corporation shall give the
Stockholders'
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Representative reasonable access to its books, records and employees in
connection with the review by the Stockholders' Representative of the Actual
Balance Sheet and the Net Asset Value Statement. In the course of preparing the
Actual Balance Sheet and the Net Asset Value Statement, the Surviving
Corporation may consult with the Stockholders' Representative in order to
resolve any issues that otherwise might become the subject of a dispute under
Section 3.02(b). The Actual Balance Sheet shall be prepared in accordance with
GAAP on a basis consistent with the accounting principles followed by the
Company in the preparation of its consolidated financial statements for the year
ended December 31, 1999 and shall reflect a pro rata portion of all known
adjustments which would be required in a year-end closing of the books of the
Company and the Company Subsidiaries.
(b) DISPUTE RESOLUTION. The Stockholders' Representative may dispute
the calculation of the Actual Net Asset Value or the calculation of the Merger
Consideration set forth in the Net Asset Value Statement by delivering a written
notice (a "NOTICE OF DISAGREEMENT") to the Surviving Corporation and the Escrow
Agent within thirty (30) days following the delivery of the Net Asset Value
Statement to the Stockholders' Representative. Any Notice of Disagreement
delivered pursuant to this Section 3.02(b) shall specify in reasonable detail
the nature and dollar amount of any disagreement so asserted and shall be
delivered only if (and to the extent that) the Stockholders' Representative
reasonably and in good faith determines that the Actual Net Asset Value and/or
the Merger Consideration set forth in the Net Asset Value Statement have not
been determined in accordance with the guidelines and procedures set forth in
this Agreement. If the Stockholders' Representative fails to deliver a timely
Notice of Disagreement, the Surviving Corporation's calculation of the Merger
Consideration (as reflected in the Net Asset Statement) shall be deemed the
final Merger Consideration. During the thirty (30) days following the delivery
of a Notice of Disagreement, the Surviving Corporation and the Stockholders'
Representative shall seek in good faith to resolve in writing any differences
which they may have with respect to the matters specified in the Notice of
Disagreement and such final resolution shall be the final Merger Consideration.
If at the end of such 30-day period, the parties are unable to resolve such
dispute, the parties shall submit the dispute to Deloitte & Touche LLP ("D&T")
or, if D&T is unavailable, another mutually satisfactory (to the Surviving
Corporation and the Stockholders' Representative) independent "big-five"
accounting firm (the "ACCOUNTING FIRM") for its review and resolution of all
matters (but only such matters) which remain in dispute and which were properly
included in the Notice of Disagreement, and the Accounting Firm shall make final
determinations of the Actual Net Asset Value and the Merger Consideration in
accordance with the guidelines and procedures set forth in this Agreement. If
the parties are unable to mutually agree on the selection of the Accounting
Firm, the Surviving Corporation and the Stockholders' Representative shall
select a "big-five" accounting firm by lot (after excluding D&T, the independent
public accountants of the Company and Purchaser) to serve as the Accounting
Firm. The parties will cooperate with the Accounting Firm during the term of its
engagement. In resolving any matters in dispute with respect to any assets or
liabilities as to which both the Stockholders' Representative and the Surviving
Corporation have assigned values, the Accounting Firm may not assign a value to
any item in dispute greater than the greatest value for such item assigned by
the Stockholders' Representative, on the one hand, or by the Surviving
Corporation, on the other
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hand, or less than the smallest value for such item assigned by the
Stockholders' Representative, on the one hand, or by the Surviving Corporation,
on the other hand. The Accounting Firm's determination will be based solely on
presentations (including work papers) by the Stockholders' Representative and
the Surviving Corporation or by their respective representatives which are in
accordance with the guidelines and procedures set forth in this Agreement (I.E.,
not on the basis of an independent review). The determination of the Actual Net
Asset Value and the Merger Consideration shall become final and binding on the
parties and such determination of the Merger Consideration shall be deemed the
final Merger Consideration on the date the Accounting Firm delivers to the
Stockholders' Representative and the Surviving Corporation its final resolution
in writing (and the parties will direct the Accounting Firm to complete its
determination within thirty (30) days following the submission of the disputed
matters to it). The fees and expenses of the Accounting Firm shall be shared
equally by the Surviving Corporation, on the one hand, and the holders of shares
of Company Stock (not including the shares of Rollover Company Stock), Company
Stock Options (including, for this purpose, the $33.30 Company Stock Options
only if the final Per Share Merger Consideration exceeds $33.30), the Company
Warrants, and the Freightliner Option (only if the final Per Share Merger
Consideration exceeds $33.30 and the modification referred to in Section 2.06(c)
is effected) (collectively, the "COMPANY SECURITIES") on a pro rata basis based
upon their respective percentages of the Merger Consideration, on the other
hand; PROVIDED, that the holders of the $33.30 Company Stock Options shall not
be required to pay more than the aggregate amount, if any, by which the final
Per Share Merger Consideration exceeds $33.30 with respect to the $33.30 Company
Stock Options and the holder of the Freightliner Option shall not be required to
pay more than the aggregate amount, if any, by which the final Per Share Merger
Consideration exceeds $33.30 with respect to the Freightliner Option, and any
shortfall created by this proviso shall be borne by the other holders of Company
Securities (on a pro rata) basis based upon their respective percentage
interests in and to the final Merger Consideration. The portion of such fees and
expenses payable by the holders of the Company Securities shall be paid using
interest or other income earned on the funds deposited into the Escrow Fund to
the extent such holders are entitled to such funds.
(c) PAYMENT OF ADJUSTMENT TO MERGER CONSIDERATION.
(i) EXCESS PAYMENT. Subject to the penultimate sentence of
this Section 3.02(c), if the Estimated Merger Consideration is GREATER THAN the
Merger Consideration (an "EXCESS PAYMENT"), then an aggregate amount equal to
such Excess Payment shall be distributed to the Surviving Corporation from the
Net Asset Value Escrow Account and the Estimated $33.30 Option Spread Escrow
Account (in each case, after deducting the applicable portion of the fees and
expenses of the Accounting Firm (if any) in accordance with Section 3.02(b)),
with the relative portion of such amount being distributed from each such
account based on the total number of shares of Company Stock (calculated on a
Fully Diluted Basis) in respect of which distributions from such accounts (if
not made to the Surviving Corporation) are required to be made pursuant to the
Escrow Agreement. Any remaining funds in the Net Asset Value Escrow Account and
the Estimated $33.30 Option Spread Escrow Account (if any) shall be distributed
to the holders of the Company Securities eligible to receive such distributions
from such accounts as determined by the final Per Share Merger Consideration
(such holders collectively, the "Recipients") pursuant to the Escrow Agreement.
Subject to the penultimate sentence of this Section 3.02(c), if the Excess
Payment exceeds the aggregate amount of the Net Asset Value Escrow Account and
the Estimated $33.30 Option Spread Escrow Account, then each Recipient entitled
to receive distributions from the Net Asset Value Escrow Account shall
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pay to the Surviving Corporation a pro rata amount of such excess relative to
their interest in each account.
(ii) PAYMENT SHORTFALL. Subject to the penultimate sentence of
this Section 3.02(c), if the Estimated Merger Consideration is less than the
final Merger Consideration (a "PAYMENT SHORTFALL"), then each Recipient, as
appropriate and depending upon such Recipient's interest in and to the Net Asset
Value Escrow Account and the Estimated $33.30 Option Spread Escrow Account (if
any), shall receive from such accounts (after deducting the applicable portion
of the fees and expenses of the Accounting Firm in accordance with Section
3.02(b)) such Recipient's relative interest in the Payment Shortfall pursuant to
the Escrow Agreement. In addition, in the event of a Payment Shortfall, the
Surviving Corporation shall pay to the holders of Company Securities such excess
based on their respective rights to receive the final Merger Consideration.
(iii) NO ADJUSTMENT, DISTRIBUTIONS. Notwithstanding the above,
there shall not be any adjustment to the Merger Consideration pursuant to this
Section 3.02 if the difference between the Target Net Asset Value and the Actual
Net Asset Value is equal to or less than One Hundred Thousand Dollars
($100,000); but if such difference exceeds One Hundred Thousand Dollars
($100,000) then the Merger Consideration shall be adjusted downward or upward,
as the case may be, by the full amount of such difference (including the
$100,000 threshold amount) on a dollar-for-dollar basis. The parties hereto
agree that any and all distributions which are required to be made from the Net
Asset Value Escrow Account and the Estimated $33.30 Option Spread Escrow Account
under this Section 3.02 shall be made in accordance with the Escrow Agreement.
SECTION 3.03. ESCROW AGREEMENT AND ESCROW FUND.
At or prior to the Closing, the Surviving Corporation, the
Stockholders' Representative and an escrow agent mutually acceptable to such
parties (the "ESCROW AGENT") shall enter into an Escrow Agreement substantially
in the form of EXHIBIT A attached hereto or in such other form consistent with
the terms of this Agreement or as may be acceptable to the parties thereto (the
"ESCROW AGREEMENT"). The Escrow Agreement shall provide for the creation of an
escrow fund (the "ESCROW FUND") consisting of the sum of (i) Five Million
Dollars ($5,000,000) of the Merger Consideration and (ii) the Estimated $33.30
Option Spread (the "TOTAL ESCROW AMOUNT"). The Escrow Fund shall consist of the
following three (3) separate escrow accounts: (i) an escrow account containing
Four Million Dollars ($4,000,000) of the Merger Consideration to be used to
satisfy any downward adjustment of the Merger Consideration pursuant to Section
3.02 (the "NET ASSET VALUE ESCROW ACCOUNT"), (ii) an escrow account containing
One Million Dollars ($1,000,000) of the Merger Consideration to be used to
satisfy any indemnification claims under Section 8.02 and any payments required
to be made under Section 3.05 (the "INDEMNIFICATION ESCROW ACCOUNT") and (iii)
an escrow account containing the Estimated $33.30 Option Spread (the "ESTIMATED
$33.30 OPTION SPREAD ESCROW ACCOUNT"). The Escrow Agreement shall contain
provisions with respect to the timing and procedure of distributions of funds
from each of such accounts. If the final Per Share Merger Consideration is less
than $33.30, the Estimated $33.30 Option Spread Escrow Account shall be
distributed to the Surviving Corporation. Holders of the $33.30 Company Stock
Options and the Freightliner Option shall have no right or interest in and to
the Net Asset Value Escrow Account
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with respect to the $33.30 Company Stock Options and the Freightliner Option and
the holders of all other Company Securities shall have no right or interest in
and to the Estimated $33.30 Option Spread Escrow Account. The Indemnification
Escrow Account shall initially be funded by withholding from the Merger
Consideration an amount otherwise payable to those holders of Company Securities
having an interest in the Net Asset Value Escrow Account. Following
determination of the final Merger Consideration, if the Recipients so choose (at
the direction of the Stockholders' Representative), the Indemnification Escrow
Account shall be adjusted to reflect that all Recipients shall contribute to
such account based upon their relative rights to receive the final Merger
Consideration; PROVIDED, HOWEVER, that the holders of the $33.30 Company Stock
Options shall not be required to pay more than the aggregate amount, if any, by
which the final Per Share Merger Consideration (net of any accounting fees
payable by them under Section 3.02(b)) exceeds $33.30 with respect to the $33.30
Company Stock Options and the holder of the Freightliner Option shall not be
required to pay more than the aggregate amount, if any, by which the final Per
Share Merger Consideration (net of any accounting fees payable by them under
Section 3.02(b)) exceeds $33.30 with respect to the Freightliner Options and any
shortfall created by this proviso shall be borne by the remaining holders of
Company Securities (on a pro rata basis) based upon their respective percentage
interests in and to the final Merger Consideration.
SECTION 3.04. EXCHANGE OF CERTIFICATES REPRESENTING COMPANY SECURITIES.
(a) EXCHANGE AGENT. Immediately following the Effective Time (but in
any event on the Closing Date), the Surviving Corporation shall deposit with an
exchange agent selected by the Company and reasonably acceptable to Purchaser
(the "EXCHANGE AGENT"), for the benefit of the holders of Company Securities,
for exchange in accordance with this Agreement, an amount equal to (i) the
Estimated Merger Consideration MINUS (ii) the Total Escrow Amount MINUS (iii)
the product of (A) the Per Share Merger Consideration (calculated based on the
Estimated Merger Consideration) and (B) the total number of Dissenting Shares
(the "EXCHANGE FUND") (it being understood that any adjustment to the Estimated
Merger Consideration pursuant to Section 3.02 shall be paid in accordance with
such section). Immediately following the Effective Time (but in any event on the
Closing Date), the Surviving Corporation shall deposit with the Escrow Agent the
Total Escrow Amount, which shall be held and disbursed by the Escrow Agent in
accordance with the Escrow Agreement. Promptly after the Effective Time, the
Exchange Agent shall mail to each record holder of an outstanding certificate,
certificates or instruments as of the Effective Time which immediately prior to
the Effective Time represented Company Securities (the "CERTIFICATES"), a letter
of transmittal and instructions for use in effecting the surrender of the
Certificates for payment therefor, which letter of transmittal shall include (i)
representations of the holder for the benefit of the Surviving Corporation
regarding title to the Company Securities (including a representation that the
Company Securities are owned by such holder free and clear of Liens), due
authorization to sell or transfer the Company Securities pursuant to the terms
of this Agreement, and the absence of any conflicts or breaches by such holder
in connection therewith, (ii) an agreement for the benefit of the Surviving
Corporation that such holder shall pay to the Surviving Corporation such
stockholders' pro rata portion of the amounts required to be paid pursuant to
Section 3.02(c) and Section 3.05 plus any cost of collection thereof, (iii) an
agreement for the benefit of the Stockholders' Representative that such holder
agrees to the terms of Section 10.03 and Clipper's designation as the
Stockholders' Representative, and (iv) such other documents as may
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reasonably be required in connection with such surrender, in customary form to
be agreed upon by the Company and Purchaser prior thereto.
(b) EXCHANGE PROCEDURES.
(i) After the Effective Time (and, in the case of the $33.30
Company Stock Options and the Freightliner Option, after the final
determination of the Merger Consideration pursuant to Section 3.02),
each holder of Certificate(s) shall, upon surrender to the Exchange
Agent of such Certificate(s) and a fully and properly completed letter
of transmittal and acceptance thereof by the Exchange Agent, be
entitled to receive the amount of the Merger Consideration into which
such surrendered Certificate(s) have been converted or exchanged
pursuant to this Agreement.
(ii) After the Effective Time, there shall be no further
transfer on the records of the Company or its transfer agent of
Certificates, and if Certificates are presented to the Company for
transfer, they shall be canceled against delivery of the Merger
Consideration into which such Certificates have been converted or
exchanged pursuant to this Agreement. If any Merger Consideration is to
be paid to a Person other than the Person in whose name the surrendered
Certificate is registered, it shall be a condition of such exchange
that the Certificate so surrendered shall properly be endorsed, with
signature guaranteed, or otherwise in proper form for transfer and that
the Person requesting such exchange shall pay to the Surviving
Corporation or its transfer agent any transfer or other taxes required,
or establish to the satisfaction of the Company or its transfer agent
that such taxes have been paid or are not applicable.
(iii) Until surrendered as contemplated by Section 3.04(b),
each Certificate shall be deemed at any time after the Effective Time
to represent only the right to receive upon such surrender the Merger
Consideration into which such Certificate has been converted or
exchanged pursuant to this Agreement. No interest will be paid or will
accrue on any cash payable as Merger Consideration.
(c) NO FURTHER OWNERSHIP RIGHTS IN COMPANY SECURITIES. All Merger
Consideration paid upon the surrender for exchange of Certificates in accordance
with the terms of this Agreement shall be deemed to have been issued and paid in
full satisfaction of all rights pertaining to the Company Securities represented
thereby.
(d) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund
which remains undistributed to the holders of Certificates for twelve months
following the Effective Time shall be delivered to the Surviving Corporation
upon demand, and any holders of Company Securities who have not theretofore
complied with this Article III shall thereafter look only to the Surviving
Corporation, and only as general creditors thereof, for payment of any claim for
Merger Consideration.
(e) NO LIABILITY. None of the Surviving Corporation, Purchaser or the
Exchange Agent shall be liable to any Person in respect of any cash or other
assets from the Exchange Fund delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law. If any Certificate has
not been surrendered prior to the later of (i) twelve
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months after the Effective Time and (ii) immediately prior to the date on which
any cash or other assets, if any, in respect of such Certificate would otherwise
escheat to or become the property of any Governmental Entity, any such cash or
other assets in respect of such Certificate shall, to the extent permitted by
applicable law, become the property of the Surviving Corporation, free and clear
of all claims or interests of any Person previously entitled thereto.
(f) INVESTMENT OF EXCHANGE FUND. The Exchange Agent shall invest the
cash included in the Exchange Fund in a money market deposit account selected by
the Company prior to the Closing. Any interest and other income resulting from
such investments shall be paid to the Surviving Corporation.
SECTION 3.05. TREATMENT OF DISSENTING SHARES.
In the event that any holder of Company Stock immediately prior to the
Effective Time has properly exercised the right to obtain an appraisal of such
shares of Company Stock in accordance with the DGCL, and the appraisal of the
Delaware Court of Chancery (as required by the DGCL) indicates that the fair
value per share of such Dissenting Shares exceeds the final Per Share Merger
Consideration, then each Recipient shall pay to the Surviving Corporation (i) a
pro rata amount (based on the total number of issued and outstanding shares of
Company Stock immediately prior to the Effective Time) of such excess (taking
into account all such Dissenting Shares) PLUS (ii) all costs of collection,
including attorneys fees, of the Surviving Corporation in connection with
obtaining the funds from each Recipient. In the event any such appraisal is
finally determined and the amount thereof is paid by the Surviving Corporation
prior to the Liability Termination Date, the Surviving Corporation, at its
option, may elect to receive any payment to which it is entitled pursuant to the
preceding sentence by way of a distribution from the Indemnification Escrow
Account (to the extent of available funds therein). In no event shall the
Recipients be required to make any such payment to the Surviving Corporation in
respect of Dissenting Shares representing more than five percent (5%) of the
outstanding shares of Company Stock immediately prior to the Effective Time,
whether or not Purchaser waives the satisfaction of the conditions set forth in
Section 7.02(g).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Purchaser as follows:
SECTION 4.01. ORGANIZATION.
Each of the Company and each Company Subsidiary is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has full corporate power and authority to
conduct its business as it is now being conducted and to own, operate or lease
the properties and assets it currently owns, operates or holds under lease. Each
of the Company and each Company Subsidiary is duly qualified or licensed to do
business and is in good standing as a foreign corporation in each jurisdiction
where such qualification or licensing is necessary, except where the failure to
so qualify or be so licensed would not, individually or in the aggregate, have a
Company Material Adverse Effect.
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SECTION 4.02. SUBSIDIARIES.
SCHEDULE 4.02 sets forth a list, as of the date hereof of (a) all
Company Subsidiaries and (b) all other entities in which the Company has an
aggregate equity investment in excess of $100,000. Except as set forth in
SCHEDULE 4.02, all outstanding shares of stock of any Company Subsidiary have
been duly authorized and validly issued and are fully paid and non-assessable,
and are owned, directly or indirectly, by the Company free and clear of any
Liens, and there are no outstanding options, warrants, convertible securities,
calls, rights, commitments, preemptive rights or agreements or instruments or
understandings of any character, obligating the Company or any Company
Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold,
contingently or otherwise, additional shares of such Company Subsidiary or any
securities or obligations convertible or exchangeable for such shares or to
grant, extend or enter into any such option, warrants, convertible security,
call, right, commitment, preemptive right or agreement.
SECTION 4.03. CAPITALIZATION.
The authorized capital stock of the Company consists of:
(a) 30,000,000 shares of Common Stock, of which 868,559 shares are
issued and outstanding as of the date of this Agreement,
(b) 20,000,000 shares of Company Preferred Stock, of which:
(i) 2,594,876 shares of Convertible Preferred Stock,
Series I are issued and outstanding as of the date of
this Agreement,
(ii) 1,237,374 shares of Convertible Preferred Stock,
Series II are issued and outstanding as of the date
of this Agreement,
(iii) 2,680,656 shares of Senior Convertible Participating
Preferred Stock, Series I are issued and outstanding
as of the date of this Agreement, and
(iv) 934,344 shares of Senior Convertible Participating
Preferred Stock, Series II are issued and outstanding
as of the date of this Agreement.
All outstanding shares of Company Stock have been duly authorized, validly
issued and are fully paid and non-assessable. Except as set forth in SCHEDULE
4.03, there are no authorized or outstanding options, warrants, convertible
securities, calls, rights, commitments, preemptive rights or agreements or
instruments or understandings of any character, to which the Company is a part
or by which the Company is bound, obligating the Company to issue, deliver or
sell, or cause to be issued, delivered or sold, contingently or otherwise,
additional shares of capital stock of the Company or any securities or
obligations convertible into or exchangeable for such shares or to grant, extend
or enter into any such option, warrant, convertible security, call, right,
commitment, preemptive right or agreement.
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SECTION 4.04. AUTHORIZATION.
(a) THE COMPANY. The Company has all requisite corporate power and
authority to enter into this Agreement and, subject to Stockholder Approval, to
perform its obligations hereunder. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
approved by the Board of Directors of the Company, and subject to Stockholder
Approval, no other corporate proceedings on the part of the Company are
necessary to authorize the Merger, this Agreement and the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Company (assuming due authorization, execution and delivery by each other party
thereto) constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as such
enforcement may be subject to (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws relating to creditors'
rights generally and (ii) general principles of equity (whether applied in a
proceeding at law or in equity).
(b) THE STOCKHOLDERS. The total number of shares of each class of
Company Stock owned by each Stockholder is as set forth in SCHEDULE 4.04(b).
Such shares (other than the Series II Convertible Preferred Stock and the Series
II Senior Convertible Participating Preferred Stock), when voted in favor of the
approval of this Agreement and the Merger, will be sufficient to obtain the
Stockholder Approval.
SECTION 4.05. NO VIOLATION.
Except as set forth on SCHEDULE 4.05, the execution and delivery of
this Agreement by the Company does not, and the consummation by the Company of
the transactions contemplated by this Agreement will not, (i) conflict with, or
result in any violation of or default or loss of any benefit under, any
provision of the Company's or any Company Subsidiary's Certificate of
Incorporation or By-laws; (ii) subject to the matters described in Section 4.06,
conflict with or result in any violation of or default or loss of any benefit
under, any Law or Judgment of any Governmental Entity to which the Company or
any Company Subsidiary is a party or to which any of its property is subject; or
(iii) conflict with, or result in a breach, termination (or right of
termination) or violation of or default or loss of any benefit under, or
accelerate the performance required by the terms of any agreement, contract,
indenture or other instrument to which the Company or any Company Subsidiary is
a party or to which any of its property is subject, or constitute a default or
loss of any right thereunder or any event which, with the lapse of time or
notice or both, might result in a default or loss of any right thereunder or the
creation of any Lien upon any of the assets or properties of the Company or any
Company Subsidiary, except with respect to clauses (ii) and (iii) hereof, where
the conflict, breach, termination, violation, default, loss of benefit,
acceleration or loss of right would not, individually or in the aggregate, have
a Company Material Adverse Effect.
SECTION 4.06. APPROVALS.
The execution and delivery of this Agreement and the consummation of
the transactions contemplated by this Agreement by the Company will not require
the consent, approval, order or authorization of any Governmental Entity or any
other Person under any Law,
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Judgment or material agreement, indenture or other instrument to which the
Company or any Company Subsidiary is a party or to which any of its properties
is subject, other than the Stockholder Approval and the items disclosed in
SCHEDULE 4.06 and no declaration, filing or registration with any Governmental
Entity is required by the Company or any Company Subsidiary in connection with
the execution and delivery of this Agreement and the consummation of
transactions contemplated by this Agreement, except for (i) the filing of the
Certificate of Merger as required by the DGCL and the filing of appropriate
documents with the relevant authorities of other states in which the Company or
any Company Subsidiary is qualified to do business, (ii) the filing pursuant to
the HSR Act, as amended, and the expiration or termination of the applicable
waiting period under the HSR Act, (iii) compliance with any applicable
requirements of the Securities Act, the Exchange Act or any other applicable
securities laws and (iv) those that may be required solely by reason of
Purchaser's participation in the transactions contemplated by this Agreement.
SECTION 4.07. PERIODIC SEC FILINGS, FINANCIAL STATEMENTS; CAPITAL
EXPENDITURES.
(a) Since June 30, 1997, the Company has timely filed all forms,
reports, and documents with the SEC that were required to be filed by the
Company under the Securities Act and the Exchange Act. As of their respective
filing dates, all of such forms, reports and documents (the "SEC FILING")
complied in all material respects with all applicable requirements of the
Exchange Act and, where applicable, the Securities Act.
(b) The audited consolidated financial statements included in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1999
(the "1999 FORM 10-K") and the unaudited interim consolidated financial
statements for the fiscal quarter ended March 31, 2000 (correct copies of which
are attached hereto as SCHEDULE 4.07(b)) have been prepared in accordance with
GAAP (except, in the case of unaudited statements, as permitted by Form 10-Q of
the Exchange Act), applied on a consistent basis during the periods involved,
including, without limitation, with respect to reserving policies (except as may
be set forth in the notes thereto or as described on SCHEDULE 4.07(b)), and
fairly present, in all material respects, the consolidated financial position of
the Company and the consolidated Company Subsidiaries as at the dates thereof
and the consolidated results of their operations and cash flows for the periods
then ended, subject, in the case of the unaudited interim financial statements,
to normal year-end adjustments and any other adjustments described therein.
(c) Except as set forth in SCHEDULE 4.07(c), neither the Company nor
any Company Subsidiary has any Liabilities, other than Liabilities (i) that have
been specifically disclosed or provided for in the most recent consolidated
balance sheet of the Company filed with the SEC prior to the date of this
Agreement, (ii) that have been incurred in the ordinary course of business since
the date thereof, or (iii) of the type that are not required by GAAP to be
included in or in the notes to a balance sheet prepared in accordance with GAAP.
(d) SCHEDULE 4.07(d) contains a true and correct list of all projects
for which capital expenditures of the Company and the Company Subsidiaries (i)
from January 1, 1997 (or, with respect to any Company Subsidiary acquired by the
Company following January 1, 1997,
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the date of acquisition) to December 31, 1999, have been expended and (ii) from
January 1, 2000 to March 31, 2000 have exceeded $100,000.
SECTION 4.08. ABSENCE OF CERTAIN TRANSACTIONS.
Except as set forth on SCHEDULE 4.08 and except as set forth in the SEC
Filings prior to the date of this Agreement and except for the transactions
expressly contemplated hereby, since December 31, 1999, the Company and the
Company Subsidiaries have conducted their respective businesses only in the
ordinary and usual course consistent with past practices and, to the Company's
knowledge, there have not been any events, changes, effects or developments
which have had or would reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect. Except as set forth on SCHEDULE
4.08 and except as permitted by this Agreement, since December 31, 1999:
(a) The Company and each Company Subsidiary has carried on its
business in the usual and ordinary course consistent with past
practice;
(b) Neither the Company nor any Company Subsidiary has (i)
declared or paid any dividend or made any other distribution
with respect to Company Stock or the capital stock of any
Company Subsidiary, (ii) redeemed, purchased, canceled or
otherwise acquired, directly or indirectly, any outstanding
shares of Company Stock or any shares of capital stock of any
Company Subsidiary, (iii) issued additional stock (other than
upon the exercise or conversion of outstanding options,
warrants or convertible securities), warrants, options or any
other similar rights to acquire Company Stock or any shares of
capital stock of any Company Subsidiary, or (iv) split,
combined or reclassified any shares of Company Stock or any
shares of capital stock of any Company Subsidiary or issued or
authorized the issuance of any other securities in respect of,
in lieu of or in substitution for shares of, shares of Company
Stock or any shares of capital stock of any Company
Subsidiary;
(c) Neither the Company nor any Company Subsidiary has merged or
consolidated, reorganized, restructured, recapitalized,
liquidated or filed a voluntary petition in bankruptcy;
(d) Neither the Company nor any Company Subsidiary has incurred
any obligation for borrowed money or entered into or modified
any material contract, agreement, commitment or arrangement
with respect to borrowed money, except borrowings in the
ordinary course of business consistent with past practice
pursuant to the Company's existing revolving line of credit;
(e) Neither the Company nor any Company Subsidiary has granted any
increase in compensation, benefits or bonus to any present or
former director, officer, consultant or employee, except for
increases in salary or wages in the ordinary course of
business consistent with past practice;
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(f) Other than provision of services or sales in the ordinary
course of business and consistent with past practices, neither
the Company nor any Company Subsidiary has (i) sold, leased,
transferred or otherwise disposed of any of its assets having
a book or market value in excess of $250,000, or (ii) entered
into, or consented to the entering into of, any agreement
granting a preferential right to sell, lease or otherwise
dispose of any of such assets;
(g) Neither the Company nor any Company Subsidiary has (i)
incurred or committed to incur any capital expenditures,
obligations or liabilities in connection therewith other than
capital expenditures, obligations or liabilities that do not
individually exceed $250,000; (ii) acquired or agreed to
acquire by merging or consolidating with, or acquired or
agreed to acquire by purchasing a substantial portion of the
assets of, or in any other manner, any business or Person; or
(iii) except with respect to inventory purchased or to be
purchased for resale to customers in the ordinary course of
business, acquired or agreed to acquire any other assets or
made any individual lease commitments involving payments in
excess of $10,000 in any one year;
(h) The Company has not changed its methods of accounting in
effect at December 31, 1999, except as required by GAAP as
concurred in by the Company's independent auditors (such
required changes having been notified to Purchaser in
writing);
(i) Neither the Company nor any Company Subsidiary has entered
into or amended any Contract, and no party to any Contract has
terminated or failed to renew any Contract upon the expiration
thereof; and
(j) Neither the Company nor any Company Subsidiary has agreed or
committed to do any of the foregoing.
SECTION 4.09. TAXES.
Except as disclosed on SCHEDULE 4.09,
(a) all Tax Returns that are required to be filed or deposited
(taking into account all extensions) before the Effective Time
for, by, on behalf of or with respect to the Company and the
Company Subsidiaries, including, but not limited to, those
relating to the income, business, operations or property of
the Company and the Company Subsidiaries have been or will be
filed or deposited with the governmental authorities when due
and all such Tax Returns are correct and complete in all
material respects;
(b) all Taxes due and payable whether or not shown on any Tax
Returns have been or will be paid in full when due or reserved
for on the latest balance sheet included in the SEC Filings
filed prior to the date of this Agreement;
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(c) none of such Tax Returns are now under audit or examination by
any foreign, federal, state or local or other governmental
authority the outcome of which would, individually or in the
aggregate, have a Company Material Adverse Effect;
(d) the latest balance sheet included in the SEC Filings reflects
and includes adequate provisions for the payment in full of
any and all Taxes not yet due for any and all periods up to
and including the date of such balance sheet;
(e) no claim which currently remains unresolved has been made by
an authority in a jurisdiction where any of the Company and
Company Subsidiary does not file Tax Returns that it currently
is or may be subject to taxation by that jurisdiction;
(f) there are no Liens for Taxes upon any asset of the Company or
Company Subsidiary except for (i) statutory liens for Taxes
not yet due and (ii) statutory liens in local jurisdictions
for Taxes not exceeding $50,000 in the aggregate;
(g) there are no outstanding agreements or waivers extending the
statutory period of limitations applicable to the Tax Returns
of the Company or Company Subsidiary, and neither the Company
nor Company Subsidiary has requested or received any extension
of time within which to file any Tax Return, which Tax Return
has not yet been filed;
(h) no consent to the application of Section 341(f) of the Code
(or any predecessor provision) has been made or filed by or
with respect to the Company or any Company Subsidiary or any
of their respective assets or properties;
(i) the Company and each Company Subsidiary has, within the time
and manner prescribed by Law, withheld, paid over and reported
all Taxes required to have been withheld, paid and reported in
connection with the amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other third
party, except where such failure would not, individually or in
the aggregate, have a Company Material Adverse Effect;
(j) neither the Company nor any Company Subsidiary has made any
payments, is obligated to make any payments, or is a party to
any agreement that could result in or could obligate it to
make any payments that will not be fully deductible under
Section 280G or 162(m) of the Code or that could result in the
imposition of any Tax under Section 4999 of the Code;
(k) the Company and each Company Subsidiary has collected, and has
remitted, or will remit on a timely basis, such amounts to the
appropriate taxing authority, or has been furnished properly
completed exemption
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certificates and has maintained all such records and
supporting documents in the manner required by all applicable
sales and use tax statutes and regulations except where such
failure would not, individually or in the aggregate, have a
Company Material Adverse Effect;
(l) no tax is required to be withheld pursuant to Section 1445 of
the Code as a result of the transfers contemplated by this
Agreement;
(m) neither the Company nor any Company Subsidiary is a party to,
is bound by or has any obligation under any tax sharing
agreement or similar arrangement;
(n) the Company and each Company Subsidiary (i) are not, and have
not been, a member of an affiliated group filing a
consolidated federal income Tax Return other than a group the
common parent of which is the Company, and (ii) has no
liability for the Taxes of any entity under Treas. Reg.
Section 1.1502-6 (or any similar provision of state, local or
foreign law), or as a transferee or successor, by contract or
otherwise; and
(o) none of the Company or any Company Subsidiary has agreed to
make any adjustment pursuant to Section 481(a) of the Code (or
any predecessor provision) or pursuant to any similar
provision of foreign, state or local law, and neither the IRS
nor any other taxing authority has proposed any such
adjustment or change in accounting method.
For purposes of this Agreement, "TAXES" mean all United States federal, state,
local or foreign income, profits, estimated, gross receipts, windfall profits,
environmental (including taxes under Code Section 59A), severance, property,
intangible property, occupation, production, sales, use, license, excise,
emergency excise, franchise, capital gains, capital stock, employment,
withholding, social security (or similar), disability, transfer, registration,
stamp, payroll, goods and services, value added, alternative or add-on minimum
tax, estimated, or any other tax, custom, duty or governmental fee, or other
like assessment or charge of any kind whatsoever, together with any interest,
penalties, fines, related liabilities or additions to tax they may become
payable in respect thereof imposed by any Governmental Entity, whether disputed
or not. For purposes of this Agreement, "TAX RETURN" means any return,
declaration, report or similar statement required to be filed with respect to
any Taxes (including any attached schedules) including, without limitation, any
information return, claim for refund, amended return and declaration of
estimated Tax.
SECTION 4.10. LITIGATION.
Except as set forth on SCHEDULE 4.10, as of the date of this Agreement,
there is no Proceeding pending or, to the Company's knowledge, threatened
against the Company or any Company Subsidiary by or before any Governmental
Entity or by any Person ("COMPANY LITIGATION"). Except as set forth on SCHEDULE
4.10, neither the Company nor any Company Subsidiary is a party to or, to the
Company's knowledge, bound by any Judgment. To the
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Company's knowledge, none of the Company Litigation would, if adversely
determined, have (individually or in the aggregate) a Company Material Adverse
Effect.
SECTION 4.11. ENVIRONMENTAL MATTERS.
(a) Except as set forth on SCHEDULE 4.11(a), the Company and each
Company Subsidiary has been, and is, in compliance with all applicable
Environmental Laws except where failure to comply would not, individually or in
the aggregate, have a Company Material Adverse Effect;
(b) Except as set forth in SCHEDULE 4.11(b), the Company and each
Company Subsidiary has obtained and is and, since January 1, 1997, has been in
compliance with all Environmental Permits necessary for the operation of the
business of the Company and the Company Subsidiaries and to the Company's
knowledge, there are no conditions that would prevent or materially interfere
with renewal of such Environmental Permits or prevent or materially interfere
with compliance with Environmental Permits in the future, except where the
failure to obtain and comply with such Environmental Permits and the existence
of such conditions would not, individually or in the aggregate, have a Company
Material Adverse Effect;
(c) Except as set forth in SCHEDULE 4.11(c), there are, to the
Company's knowledge, no outstanding or threatened claims against the Company or
any Company Subsidiary (i) for damages or penalties relating to the presence,
generation, transportation, treatment, storage or disposal of Hazardous
Materials in, under or from any Owned Property or any Leased Premises, or (ii)
otherwise relating to Environmental Law;
(d) Except as set forth in SCHEDULE 4.11(d), to the Company's
knowledge, all Hazardous Materials generated by the Company or any Company
Subsidiary have been stored, transported, treated and disposed of by
transporters and/or treatment, storage and disposal facilities authorized or
maintaining valid Permits under all applicable Environmental Laws;
(e) Except as set forth in SCHEDULE 4.11(e), no Person has disposed of
or otherwise released any Hazardous Materials at any Owned Property or any
Leased Premises other than in compliance with Environmental Laws and Hazardous
Materials are not otherwise present at such properties in amounts or conditions
that could reasonably be expected to result in material liability under
Environmental Law and none of the Company and the Company Subsidiaries has
disposed of, arranged for the disposal of, or otherwise released Hazardous
Materials at any location which could reasonably be expected to result in
material liability under Environmental Law;
(f) Except as set forth in SCHEDULE 4.11(f), to the Company's
knowledge, there are no underground storage tanks on any Owned Property or any
Leased Premises;
(g) Except as set forth in SCHEDULE 4.11(g), none of the Company or any
Company Subsidiary has entered into, has agreed to, or is subject to any
Judgment, decree or order of any Governmental Entity under any Environmental
Law;
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(h) Except as set forth on SCHEDULE 4.11(h) hereto, none of the Company
and the Company Subsidiaries has assumed by contract any material liabilities
under Environmental Law;
(i) The Company has provided to Purchaser a complete copy of all
material information used by the Company in establishing its reserves for
environmental matters as of March 31, 2000; and
(j) SCHEDULE 4.11(j) hereto lists all correspondence (or other written
notification) from any Governmental Entities in which the Company or any Company
Subsidiary is claimed to be in violation of any Environmental Law.
SECTION 4.12. TITLE TO PROPERTY.
(a) SCHEDULE 4.12 identifies by street address or freeway interchange,
all real estate leased by the Company or any Company Subsidiary (the "LEASED
PREMISES") or owned by the Company or any Company Subsidiary ("OWNED PROPERTY").
The Leased Premises are leased to the Company or such Company Subsidiary
pursuant to written leases, copies of which (together with all amendments
thereto) have been made available to Purchaser. Except as set forth in SCHEDULE
4.12 neither the Company nor any Company Subsidiary is in default under any
material term of any lease or other agreement relating to the Leased Premises.
The Company or a Company Subsidiary has good and marketable title to the Owned
Property, free and clear of all Liens, except (i) for installments of special
assessments not yet delinquent, recorded easements, covenants, and other
restrictions and utility easements, building restrictions, zoning restrictions
and other easements and restrictions existing generally with respect to
properties of a similar character none of which affect or will affect, in any
material respect, the Company's ability to conduct its business as it is
currently being conducted, and (ii) as otherwise set forth on SCHEDULE 4.12.
(b) The Company or a Company Subsidiary has good and merchantable title
to all personalty of any kind or nature owned by the Company or a Company
Subsidiary, free and clear of all Liens, (including, to the Company's knowledge,
liens on the lessor's interest in leasehold estates leased to the Company),
except for (i) Liens identified on SCHEDULE 4.12, (ii) Liens for non-delinquent
ad valorem taxes and non-delinquent statutory liens arising other than by reason
of default, (iii) statutory Liens of landlords, Liens of carriers, warehousemen,
mechanics and materialmen incurred in the ordinary course of business for sums
not yet due, (iv) Liens incurred or deposits made in the ordinary course of
business of the Company or any Company Subsidiary, worker's compensation,
unemployment insurance and other types of social security; (v) Liens of lessors
of personal property; or (vi) minor irregularities of title which do not
materially detract from the value or use of said personalty. The Company or a
Company Subsidiary as lessee has the right under valid and subsisting leases to
use, possess and control all personalty leased by and material to the Company or
such Company Subsidiary as now used, possessed and controlled by the Company or
such Company Subsidiary.
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SECTION 4.13. CONDITION OF PROPERTY.
All buildings, machinery, equipment and other tangible assets currently
being used by the Company or any Company Subsidiary which are owned or leased by
the Company or any Company Subsidiary are in good operating condition,
maintenance and repair, ordinary wear and tear excepted, are usable in the
ordinary course of business and are reasonably adequate and suitable for the
uses to which they are being put, except where any other conditions of any
building, machinery, equipment or other tangible asset would not, individually
or in the aggregate, have a Company Material Adverse Effect.
SECTION 4.14. CONTRACTS.
Except for such items with respect to the purchase of goods (on a
"spot" basis) for resale in the ordinary course of business or intercompany
transactions between or among the Company and/or Company Subsidiaries, SCHEDULE
4.14 is a complete list of all written contracts, agreements, commitments,
leases, sales contracts and other agreements to which the Company or any of the
Company Subsidiaries is a party which provide for the receipt or expenditure by
the Company or any Company Subsidiary after the date of this Agreement, of more
than $250,000 (receipt) or $500,000 (expenditure) (or, in either case, its
equivalent in non-cash consideration) per year (all agreements, arrangements or
commitments required to be identified in SCHEDULE 4.14 being hereinafter
referred to as the "CONTRACTS"). Schedule 4.14 also includes a complete list of
(i) all individual orders (other than pursuant to Contracts) for the purchase of
goods for resale in excess of $1 million since January 1, 1999 and (ii) all
contracts with fast-food or motel franchisors. Except as disclosed in the
Schedules to this Agreement, there is no agreement or arrangement between the
Company (or any Company Subsidiary) and any Stockholder (or any affiliate of any
Stockholder) pursuant to which the Company (or any Company Subsidiary) will have
any Liability or obligation (i) following the Closing, or (ii) following the
Applicable Time (unless, in the case of this clause (ii), such Liability or
obligation is either a Company Closing Cost or is reflected as a Liability in
the Actual Net Asset Value). True and correct copies of all the Contracts
(including all written amendments thereto) identified in SCHEDULE 4.14 have been
made available to Purchaser. Except as set forth on SCHEDULE 4.14, (i) all
Contracts are valid and existing, and the Company and the Company Subsidiaries,
and to the Company's knowledge, the other parties thereto have duly performed
their obligations thereunder in all material respects to the extent such
obligations have accrued, and (ii) no breach or default thereunder by the
Company or any Company Subsidiary or, to the Company's knowledge, by any other
party thereto has occurred.
SECTION 4.15. EMPLOYEE AND LABOR MATTERS AND PLANS.
(a) SCHEDULE 4.15(a) lists each of the following plans, policies,
arrangements and contracts which is sponsored, maintained or contributed to by
the Company or any Company Subsidiary, or, in the case of any "employee pension
plan" (as defined in Section 3(2) of ERISA), an ERISA Affiliate or for the
benefit of any current or former employee, director or other personnel: (i) any
"employee benefit plan," as such term is defined in Section 3(3) of ERISA,
whether or not subject to the provisions of ERISA; and (ii) any other
employment, consulting, collective bargaining, stock option, stock bonus, stock
purchase, phantom stock, incentive, bonus, deferred compensation, retirement,
severance, change-in-control, fringe,
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insurance, disability, workers' compensation, supplemental unemployment,
post-employment (including compensation, pension, health, medical or life
insurance or other benefits), vacation, medical or dental contract, policy or
arrangement which is not an employee benefit plan as defined in Section 3(3) of
ERISA (each such plan, contract, policy and arrangement being herein referred to
as an "EMPLOYEE PLAN").
(b) With respect to each Employee Plan, except as set forth on SCHEDULE
4.15(b), the Company has made available to Purchaser true and complete copies
(including amendments) of each contract, plan document, policy statement,
summary plan description and other written material governing or describing the
Employee Plan (including, without limitation, any related trust agreement or
insurance company contract) or, if there are no such written materials, a
summary description of the Employee Plan, plus a copy of the most recent
determination letter, if applicable, and a copy of the most recent Form 5500.
Except as set forth on Schedule 4.15(b), there have been no amendments to,
written interpretations of or announcements (whether or not written) by the
Company or any ERISA Affiliate relating to, or any changes in employee
participation or coverage under, any Employee Plan that would increase
materially the expense of maintaining such Employee Plan above the level of
expense incurred in respect thereof for the most recent fiscal year ended prior
to the date hereof, for which financial statements have been provided. SCHEDULE
4.03 contains a complete and accurate listing of all outstanding stock options,
indicating the extent vested or unvested, the extent exercisable or not, the
exercise price, the name of the optionee, and the class of stock covered by such
options.
(c) Each Employee Plan has been maintained in compliance in all
respects with its terms and the requirements prescribed by any and all
applicable statues, orders, rules and regulations, including, but not limited
to, ERISA and the Code except where the failure to be in compliance therewith
would not, individually or in the aggregate, have a Company Material Adverse
Effect. Except as set forth on SCHEDULE 4.15(c), with respect to each Employee
Plan, (1) no actions, suits or claims (other than routine claims for benefits in
the ordinary course) are pending, or to the Company's knowledge, threatened, and
(2) to the Company's knowledge, there are no facts or circumstances that could
reasonably be expected to form the basis of any such actions, suits or claims,
and (3) no administrative investigation, audit or other administrative
proceeding by the Department of Labor, the Pension Benefit Guaranty Corporation,
the Internal Revenue Service or other Governmental Entities are in progress or
pending, or to the Company's knowledge, threatened. With respect to each
Employee Plan which is an "employee benefit plan" within the meaning of Section
3(3) of ERISA or which is a "plan" within the meaning of Section 4975(e) of the
Code, there has occurred no transaction which is prohibited by Section 406 of
ERISA or which constitutes a "prohibited transaction" under Section 4975(c) of
the Code and with respect to which a prohibited transaction exemption has not
been granted and is not currently in effect except where such "prohibited
transaction" would not, individually or in the aggregate, have a Company
Material Adverse Effect.
(d) SCHEDULE 4.15(d) identifies each funded Employee Plan which is an
employee pension plan within the meaning of Section 3(2) of ERISA (including a
multi-employer plan within the meaning of Section 3(37) of ERISA). With respect
to each such Employee Plan, (i) the Employee Plan is a qualified plan under
Section 401(a) or 403(a), of the Code, and its related trust is exempt from
federal income taxation under Section 501(a) of the
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Code; (ii) a favorable IRS determination letter has been received and, since the
date of such IRS submission, the Employee Plan has not been amended or operated
in a manner which would be reasonably likely to have a Company Material Adverse
Effect on its qualified status, nor would there result any material cost or
liability to remedy any such defect, and no event has occurred which has caused
or could cause the loss of such status; (iii) there has been no termination or
partial termination within the meaning of Section 41l(d)(3) of the Code; (iv) no
Employee Plan is covered by Section 412 of the Code; and (v) no such Employee
Plan is covered by Title IV of ERISA. Neither the Company nor any ERISA
Affiliate has ceased operations at a facility so as to become subject to the
provisions of Section 4068 of ERISA, withdrawn as a substantial employer so as
to become subject to the provisions of Section 4063 of ERISA or ceased making
contributions on or before the Closing Date to any Employee Plan which is a
pension plan subject to Section 4064(a) of ERISA. No event has occurred and no
condition exists, with respect to any Employee Plan or any other employee
benefit plan, policy or arrangement, that would be reasonably likely to subject
the Company or any ERISA Affiliate to any tax, fine, lien, penalty or other
liability imposed by ERISA, the Code or any other applicable laws, regulations
or rules, which, when added to all other liabilities under this paragraph would
not reasonably be expected to have a Company Material Adverse Effect.
(e) Except as set forth on SCHEDULE 4.15(e), the consummation of the
transactions contemplated by this Agreement will not entitle any employee or
other person to receive severance or other compensation or benefits which would
not otherwise be payable absent the consummation of the transactions
contemplated by this Agreement or cause the acceleration of the time of payment
or vesting of any award or entitlement under any Employee Plan, whether or not
such occurrence would constitute a parachute payment within the meaning of Code
Section 280G, and whether or not some other subsequent action or event (or lack
thereof) in addition to the transactions contemplated hereby would be required
to trigger such occurrence.
(f) To the Company's knowledge, since December 31, 1999, there have
been no governmental audits of the equal employment opportunity practices of the
Company or any Company Subsidiary. There is no unfair labor practice charge or
complaint against the Company or any Company Subsidiary pending before the
National Labor Relations Board or strike, dispute, slowdown or stoppage pending
or, to the Company's knowledge, threatened against or involving the Company that
could reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect.
SECTION 4.16. INSURANCE POLICIES.
SCHEDULE 4.16 contains a summary description of all material insurance
policies of the Company and the Company Subsidiaries and each such policy is in
full force and effect. All premiums with respect to the insurance policies
listed on SCHEDULE 4.16 which are due and payable prior to the Effective Time
have been paid or will be paid prior to the Effective Time, and no written
notice of cancellation or termination has been received by the Company with
respect to any such policy. To the Company's knowledge, there are no pending
claims against such insurance by the Company or any Company Subsidiary as to
which the insurers have denied coverage or otherwise reserved rights. True and
correct copies of all the Company's loss runs (excluding Travel Ports of
America, Inc. prior to the acquisition thereof) through April 30, 2000
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have been previously provided to Purchaser with reference to this Agreement. To
the extent reasonably available, the Company will seek to obtain loss runs with
respect to Travel Ports of America, Inc. for periods prior to the acquisition
thereof.
SECTION 4.17. INTELLECTUAL PROPERTY.
(a) SCHEDULE 4.17 contains, with respect to all Intellectual Property
owned by the Company or Company Subsidiary (the "COMPANY INTELLECTUAL
PROPERTY"), a complete list of all domestic and foreign patents registrations
and applications relating thereto and such patent registrations and applications
are valid, unexpired and free of Liens, and have not been amended, except where
the failure to so maintain such Company Intellectual Property would not,
individually or in the aggregate, have a Company Material Adverse Effect.
(b) The Company or a Company Subsidiary, as the case may be, is the
owner of, or is duly licensed to use, all Intellectual Property used in the
conduct of its business.
(c) To the Company's knowledge, no claim of infringement or
misappropriation of the Intellectual Property of any other Person has been made
against the Company or any Company Subsidiary, and the Company Intellectual
Property is not infringing or misappropriating the Intellectual Property of any
other Person. Without limiting the foregoing, and except as set forth on
SCHEDULE 4.17, no claim is pending or, to the Company's knowledge, threatened to
the effect that the conduct by the Company or any Company Subsidiary of its
business conflicts with or infringes in any way upon any Intellectual Property
owned by others, that the Company or any Company Subsidiary needs to or should
enter into a license arrangement so as to continue the conduct of its business
without infringing any other Person's Intellectual Property, or that any of the
trademarks set forth on SCHEDULE 4.17 has been abandoned.
(d) Without limiting any other provisions hereof, except as set forth
on SCHEDULE 4.17, neither the Company nor any Company Subsidiary has granted or
is a party to any license, franchise or permit ("INTELLECTUAL PROPERTY LICENSE")
with any Person for use of the Company Intellectual Property. Except as set
forth on SCHEDULE 4.17, neither the Company nor any Company Subsidiary is, or is
alleged to be, in breach of or default under, an Intellectual Property License
to which it is a party, and to the Company's knowledge, no other party thereto
is, or is alleged to be, in breach of or default under, any Intellectual
Property License.
(e) The Company and the Company Subsidiaries take reasonable steps to
protect, maintain and safeguard the Company Intellectual Property, including
executing all appropriate confidentiality agreements necessary in connection
therewith, except where the failure to execute such agreements would not,
individually or in the aggregate, have a Company Material Adverse Effect.
(f) For the purposes of Section 4.17, "INTELLECTUAL PROPERTY" shall
mean all United States, state and foreign intellectual property, including
without limitation all (i) (a) inventions, discoveries, designs, techniques,
technology, and related improvements and know-how, whether or not patented or
patentable; (b) copyrights and works of authorship in any media, including
computer programs, software, databases and related items, graphics, advertising
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and promotional materials (including graphics and text), designs, Internet site
content, and all other authors' rights, including "moral rights"; (c)
trademarks, service marks, trade names, brand names, corporate names, domain
names, logos, trade dress and all elements thereof, the goodwill of any business
symbolized thereby, and all common-law rights relating thereto; and (d) trade
secrets and other confidential information; (ii) all registrations,
applications, recordings, and licenses or other agreements related thereto;
(iii) all rights to obtain renewals, extensions, continuations,
continuations-in-part, reissues, divisions or similar legal protections related
thereto; and rights to bring an action at law or in equity for the infringement
or other impairment of the foregoing before the Effective Time, including the
right to receive all proceeds and damages therefrom.
SECTION 4.18. PERMITS.
The Company and the Company Subsidiaries have all Permits (exclusive of
any Environmental Permits and Permits with respect to state or local sales, use
or other taxes), except for those Permits the failure to have would not,
individually or in the aggregate, have a Company Material Adverse Effect. All of
the Permits are in full force and effect except where any such failure to be so
in effect would not, individually or in the aggregate, have a Company Material
Adverse Effect. No outstanding notice of cancellation or termination has been
delivered to the Company or any Company Subsidiary in connection with any such
Permit nor, to the Company's knowledge, has any such cancellation or termination
been threatened. No application, action or proceeding for the modification of
any such Permits is pending or threatened that may result in the revocation,
modification, nonrenewal or suspension of any material Permits. Each of the
Company and each Company Subsidiary has filed when due all documents required to
be filed with any Governmental Entity in connection with such Permits except
where the failure to file such documents would not, individually or in the
aggregate, have a Company Material Adverse Effect and, at the time of the filing
thereof, all such filings were accurate and complete in all material respects.
SECTION 4.19. COMPLIANCE WITH LAWS.
Neither the Company nor any Company Subsidiary is in violation of, or
has since January 1, 1997, violated or failed to comply with any Law (other than
Environmental Laws, ERISA and Laws with respect to Taxes which are addressed
elsewhere in Article IV) applicable to its business or operations, except for
violations and failures to comply that would not, individually or in the
aggregate, have a Company Material Adverse Effect.
SECTION 4.20. BROKERAGE FEES.
Except as set forth on SCHEDULE 4.20 the Company has not retained any
financial advisor, broker, agent or finder or agreed to pay a financial advisor,
broker, agent or finder on account of this Agreement or any transaction
contemplated hereby or any transaction of like nature that would give rise to
any valid claim against Purchaser or the Surviving Corporation for any broker's
or finder's fee or similar compensation in connection with the transactions
contemplated hereby.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Company as follows:
SECTION 5.01. ORGANIZATION.
Purchaser is a corporation duly incorporated, validly existing and in
good standing under the laws of the jurisdiction of its incorporation. Purchaser
has full corporate power and authority to conduct its business as it is now
being conducted and to own, operate or lease the properties and assets it
currently owns, operates or holds under lease. Purchaser is duly qualified or
licensed to do business and is in good standing as a foreign corporation in each
jurisdiction where such qualification or licensing is necessary, except where
the failure to so qualify or be so licensed would not, individually or in the
aggregate, have a Purchaser Material Adverse Effect.
SECTION 5.02. AUTHORIZATION.
Purchaser has all requisite corporate power and authority to enter into
this Agreement and to perform its obligations hereunder. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly approved by the Board of Directors and stockholders of
Purchaser, and no other corporate proceeding on the part of Purchaser is
necessary to authorize the Merger, this Agreement and the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Purchaser and (assuming due authorization, execution and delivery by the
Company) constitutes the legal, valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms, except as such
enforcement may be subject to (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws relating to creditors'
rights generally and (ii) general principles of equity (whether applied in a
proceeding at law or in equity).
SECTION 5.03. NO VIOLATION.
The execution and delivery of this Agreement by Purchaser does not, and
the consummation by Purchaser of the transactions contemplated by this Agreement
will not, (i) conflict with, or result in any violation of or default or loss of
any benefit under, any provision of Purchaser's Certificates of Incorporation or
By-laws; (ii) except as otherwise set forth in SCHEDULE 5.03 and subject to the
matters described in Section 5.04, conflict with or result in any violation of
or default or loss of any benefit under, any Law or Judgment of any Governmental
Entity to which Purchaser is a party or to which any of its property is subject;
or (iii) except as otherwise set forth in SCHEDULE 5.03, conflict with, or
result in a breach or violation of or default or loss of any benefit under, or
accelerate the performance required by, the terms of any agreement, contract,
indenture or other instrument to which Purchaser is a party or to which any of
its property is subject, or constitute a default or loss of any right thereunder
or an event which, with the lapse of time or notice or both, might result in a
default or loss of any right thereunder or the creation of any lien, charge or
encumbrance upon any of the assets or properties of
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Purchaser, except with respect to clauses (ii) and (iii) hereof, where the
breach, violation, default, loss of benefit, acceleration or loss of right would
not, individually or in the aggregate, have a Purchaser Material Adverse Effect.
SECTION 5.04. APPROVALS.
The execution and delivery of this Agreement and the consummation of
the transactions contemplated by this Agreement by Purchaser will not require
the consent, approval, order or authorization of any Governmental Entity or any
other Person under any agreement, indenture or other instrument to which
Purchaser is a party or to which any of its properties is subject, other than
the items disclosed in SCHEDULE 5.04 and no declaration, filing or registration
with any Governmental Entity is required by Purchaser in connection with the
execution and delivery of this Agreement and the consummation of transactions
contemplated by this Agreement, except for (i) the delivery and filing of the
Certificate of Merger as required by the DGCL and the filing of appropriate
documents with the relevant authorities of other states in which Purchaser is
qualified to do business, (ii) the filing pursuant to the HSR Act, and the
expiration or termination of the applicable waiting period under such Act, (iii)
compliance with any applicable requirements of the Securities Act, the Exchange
Act and any other applicable securities laws and (iv) those the failure of which
to obtain would not, individually or in the aggregate, have a Purchaser Material
Adverse Effect.
SECTION 5.05. AVAILABLE FUNDS.
Purchaser has provided to the Company true and correct copies of (i)
that certain letter agreement dated the date hereof (the "EQUITY COMMITMENT
LETTER") from Oak Hill Capital Partners, L.P. and Oak Hill Capital Management
Partners, L.P. (collectively, "PARENT") addressed to the Company and the
Stockholders, and (ii) written financial commitments dated May 17, 2000
(collectively, the "FINANCIAL COMMITMENTS") from The Chase Manhattan Bank and
Chase Securities Inc. (collectively, "CHASE") and Credit Suisse First Boston
Corporation ("CSFB"). Upon funding pursuant to the Equity Commitment Letter and
the Financial Commitments, Purchaser will have funds available to consummate the
transactions contemplated hereby, including payment of the Merger Consideration.
SECTION 5.06. BROKERAGE FEES.
Except as set forth on SCHEDULE 5.06, Purchaser has not retained any
financial advisor, broker, agent or finder or agreed to pay any financial
advisor, broker, agent or finder on account of this Agreement or any transaction
contemplated hereby or any transaction of like nature that would give rise to
any valid claim against the Company for any broker's or finder's fee or similar
compensation in connection with the transactions contemplated hereby.
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ARTICLE VI
COVENANTS
SECTION 6.01. INTERIM OPERATIONS OF THE COMPANY.
During the period from the date of this Agreement to the Effective
Time, except as specifically permitted by this Agreement or as set forth on
SCHEDULE 6.01, or as otherwise consented to in writing by Purchaser, the Company
will and will cause each Company Subsidiary to:
(a) use all reasonable efforts (consistent with operating in the
ordinary course of business) to (i) preserve intact its present business
organization, (ii) keep available the services of its present officers and
employees, (iii) preserve its relationships with clients, suppliers, customers,
distributors and others having business dealings with it, (iv) maintain all
assets other than those disposed of in the ordinary course of business in good
repair and condition, (v) maintain all insurance, and (vi) maintain its books of
account and records in the usual, regular and ordinary manner;
(b) not amend its Certificate of Incorporation or By-laws or other
governing document or agreement;
(c) not acquire by merging or consolidating with, or purchasing all or
substantially all of the assets of, or otherwise acquiring, any business of any
corporation, partnership, association or other business organization or division
thereof, in each case for consideration having a value in excess of $500,000 or
an aggregate value in excess of $1,000,000;
(d) not split, combine or reclassify its outstanding capital stock or
declare, set aside, make or pay any dividend or other distribution in respect of
its capital stock (in cash or otherwise) other than dividends paid by the
Company's wholly-owned Subsidiaries to the Company or its wholly-owned
Subsidiaries;
(e) not issue or sell (or agree to issue or sell) any shares of its
capital stock of any class or series, or any options, warrants, conversion or
other rights to purchase any such shares or any securities convertible into or
exchangeable for such shares (other than upon the exercise or conversion of
options, warrants or convertible securities outstanding on the date hereof), or
grant, or agree to grant, any such options or modify or alter the terms of any
of the above, except as contemplated under Section 2.06;
(f) not (i) incur any indebtedness for borrowed money other than a net
increase after the date hereof of up to $10 million in the aggregate pursuant to
the terms of credit agreements in effect on the date hereof or vary the material
terms of any existing debt securities, (ii) issue or sell any debt securities,
(iii) acquire or dispose of any assets (other than acquisitions and dispositions
of goods purchased for resale in the ordinary course of business) having a book
or market value individually in excess of $100,000, or (iv) enter into, modify
in any material respect or terminate any Contract (other than with respect to
Contracts involving purchases of diesel fuel, gasoline and hedging contracts in
the ordinary course of business consistent with past
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practice where, in the case of Contracts involving purchases of diesel fuel or
gasoline, either (1) a new, modified or replacement Contract is entered into on
terms substantially equivalent to, or more favorable to the Company than, the
Contract replaced or modified, or (2) the aggregate payments in any one month
under such Contract will not exceed $10 million);
(g) not take any steps to mortgage or pledge to secure any material
obligation, or to subject to any material Lien, any of its material properties
other than pursuant to the terms of credit agreements and the ▇▇▇▇▇▇▇ ▇▇▇▇▇
Synthetic Lease, in each case as in effect on the date hereof;
(h) not grant to any present or former director or officer, consultant
or other employee any increase in compensation or benefits in any form, or any
severance or termination pay, or make any loan to or enter into any employment
agreement, collective bargaining agreement or arrangement with any such person,
except in each case as may be legally required pursuant to any existing Employee
Plan;
(i) not adopt, enter into, amend in any material respect, announce any
intention to adopt or terminate, any Employee Plan or other employee benefit
plan, program or arrangement, except (i) as required by applicable Law, (ii) as
disclosed on any disclosure Schedule pursuant to Section 4.15, or (iii) as
contemplated under Section 2.06 or (iv) except, with respect to the Company's
health and medical plans, in the ordinary course of business consistent with
past practice provided such action does not materially increase the benefits
payable under such employee benefit plans;
(j) not discharge or satisfy any material Lien or pay or satisfy any
material obligation or Liability (fixed or contingent) (other than on the
ordinary course of business consistent with past practice) or commence any
voluntary petition, proceeding or action under any bankruptcy, insolvency or
other similar Laws;
(k) not make or institute any material change in its accounting
procedures or practices unless mandated by GAAP;
(l) neither the Company nor any Company Subsidiary shall make any
material tax election or settle or compromise any material federal, state, local
or foreign Tax liability;
(m) except with respect to any such licenses solely among any of the
Company and any Company Subsidiary amend, modify or terminate any existing
Intellectual Property License, execute any new Intellectual Property License,
sell, license or otherwise dispose of, in whole or in part, any Company
Intellectual Property, or subject any Company Intellectual Property to any Lien
other than pursuant to the terms of credit agreements in effect on the date
hereof; and
(n) not authorize or propose, or agree to take, any of the actions set
forth in the foregoing subparagraphs (a) through (m).
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SECTION 6.02. ACCESS TO INFORMATION; COOPERATION.
The Company shall (and shall cause each Company Subsidiary to) afford
to the officers, employees, accountants, counsel and other representatives of
Purchaser, reasonable access, during normal business hours, during the period
prior to the Effective Time, to all of the properties, books, contracts,
commitments and records of the Company and the Company Subsidiaries. Prior to
Closing, Purchaser and such representatives will hold any such information which
is non-public in confidence in accordance with the provisions of the existing
confidentiality agreement between the Company and Purchaser dated as of January
25, 2000 (the "CONFIDENTIALITY AGREEMENT"). So long as the out-of-pocket costs
and expenses of the Company and/or the Company Subsidiaries in connection
therewith are Special Costs, the Company agrees to provide reasonable
cooperation, and to cause the Company Subsidiaries and its and their respective
officers, employees and representatives to provide reasonable cooperation in
connection with the arrangement of the financing to be consummated at the
Closing in respect of the transactions contemplated by this Agreement,
including, without limitation, participation in meetings, due diligence sessions
and road shows, and drafting sessions for the preparation of offering memoranda,
private placement memoranda, prospectuses and similar documents. The Company
agrees to cooperate and take all requisite actions prior to the Closing Date to
merge, form, consolidate or alter the structure of the transactions herein
contemplated to the extent desirable in Purchaser's judgment for commercial,
regulatory, tax or other reasons, including by entering into appropriate
amendments to this Agreement; PROVIDED, HOWEVER, that such actions shall not, in
the Company's reasonable judgment, (i) decrease the amount or change the kind of
consideration paid to the Recipients pursuant to this Agreement or otherwise
adversely affect, in any material respect, the interests of the Recipients
pursuant to this Agreement or the Company (if the Closing were not to occur) and
(ii) be required to be completed other than in connection with the Closing.
SECTION 6.03. CONSENTS AND APPROVALS.
Each of the Company and Purchaser will take all reasonable actions
necessary to comply promptly with all legal requirements which may be imposed on
it with respect to this Agreement and the transactions contemplated hereby which
actions shall include, without limitation, furnishing all information in
connection with Requisite Regulatory Approvals, and will promptly cooperate with
and furnish information to each other in connection with any such requirements
imposed upon any of them or any of their Subsidiaries in connection with this
Agreement and the transactions contemplated hereby. Each of the Company and
Purchaser will, and will cause its Subsidiaries to, take all reasonable actions
necessary to obtain any Requisite Regulatory Approvals (provided that nothing in
this Agreement shall require Purchaser to agree to sell or otherwise dispose of
or hold separate any material assets of Purchaser or the Company or any of their
respective affiliates).
Section 6.04. EMPLOYMENT MATTERS.
(a) After the Effective Time, the Surviving Corporation shall either
(i) continue the existing Employee Plans of the Company and the Company
Subsidiaries as disclosed on SCHEDULE 4.15(a), or (ii) provide substitutes for
some or all of such Employee Plans that provide benefits to employees of the
Company and the Company Subsidiaries that are no
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less favorable in the aggregate to such employees than the replaced Employee
Plans until at least December 31, 2001; PROVIDED, HOWEVER, that in no event
shall the Surviving Corporation be obligated to continue, provide or otherwise
take into account Employee Plans that relate to stock options, restricted stock,
stock rights or any other equity-based arrangements; and provided further that
nothing herein shall be construed to mean that the Surviving Corporation cannot
amend or terminate any particular Employee Plan or plans so long as the
aggregate benefits to such employees under the remaining Employee Plans and all
substituted plans are no less favorable to such employees than the existing
Employee Plans until such date. For purposes of clause (ii) above, (A) Purchaser
and the Surviving Corporation shall grant all employees of the Company credit
for purposes of eligibility and vesting for all service with the Company and the
Company Subsidiaries prior to the Effective Time for which such service was
recognized by the Company; (B) any limitations on pre-existing conditions shall
be waived (but only to the extent such conditions were covered prior to the
Effective Time unless required by Law); and (C) expenses incurred with respect
to the plan year in which the Closing occurs on or before the Effective Time
shall be taken into account for purposes of establishing satisfaction of any
applicable deductible, coinsurance and maximum out-of-pocket provisions to the
same extent taken into account prior to the Effective Time.
(b) From and after the Effective Time, the Surviving Corporation shall
honor the Company's then existing severance plan and severance agreements which
are disclosed on SCHEDULE 4.15(a) in accordance with the terms thereof;
PROVIDED, HOWEVER, that nothing herein shall prevent the Purchaser or Surviving
Corporation from terminating any employees (subject to the requirements of such
severance plan or arrangement), or from terminating or otherwise amending such
severance plans or arrangements to the same extent the Company would be is
permitted to do so under such severance plans or arrangements.
(c) Purchaser's current intention is that the Company's headquarters
will remain at its current location.
SECTION 6.05. PUBLICITY.
So long as this Agreement is in effect, none of the Stockholders, the
Company, Purchaser or any of their agents shall issue or cause the publication
of any press release or other public statement or announcement with respect to
this Agreement or the transactions contemplated hereby without the prior written
consent of the Company and Purchaser (such consent not to be unreasonably
withheld, denied or delayed), except as may be required by Law, and in such case
shall use all reasonable efforts to consult with all the parties hereto prior to
such release or announcement being issued.
SECTION 6.06. NOTIFICATION OF CERTAIN MATTERS.
The Company shall give prompt notice to Purchaser, and Purchaser shall
give prompt notice to the Company, of (i) the occurrence or non-occurrence of
any event the occurrence or nonoccurrence of which would cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect, and (ii) any material failure of the
Company, Purchaser, as the case may be, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder.
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SECTION 6.07. DIRECTORS' AND OFFICERS' INDEMNIFICATION.
(a) From and after the Effective Time, the Surviving Corporation will
indemnify and hold harmless each Person who is now, or has been at any time
prior to the date hereof, a director or officer of the Company or of any Company
Subsidiary or a Person entitled to indemnification (individually a "COVERED
PARTY" and collectively the "COVERED PARTIES"), with respect to any claims
and/or damages, penalties, Judgments, assessments, losses, costs and expenses
(including, but not limited to, attorneys' fees) based in whole or in part on,
or arising in whole or in part out of any matter arising out of or pertaining to
matters existing or occurring at or prior to the Effective Time, whether
asserted or claimed prior to, at or after the Effective Time, to the fullest
extent that Purchaser or the Surviving Corporation is permitted under applicable
law. The Covered Parties shall be entitled to advancement of expenses from
Purchaser or the Surviving Corporation, as the case may be.
(b) Purchaser agrees that, for the six-year period immediately
following the Effective Time, it or the Surviving Corporation shall maintain in
effect the director and officer insurance coverage currently maintained by the
Company, or coverage substantially equivalent thereto, for the Covered Parties;
provided that the annual cost thereof, following the third anniversary of the
Closing Date, shall not exceed $527,000.
(c) If the Surviving Corporation or any of its successors or assigns
(i) shall consolidate with or merge into any other corporation or entity and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger, or (ii) shall transfer all or substantially all of its
assets to any Person, then, and in each such case, proper provisions shall be
made so that the successors and assigns of the Surviving Corporation shall
assume all of the obligations of the Surviving Corporation set forth in this
Section 6.07.
(d) The provisions of this Section 6.07 are intended to be in addition
to the rights otherwise available to the current and former officers and
directors of the Company by law, charter, statute, bylaw or agreement, and shall
operate for the benefit of, and shall be enforceable by, each of the Covered
Parties and their heirs.
(e) The provisions of this Section 6.07 are intended for the benefit
of, and shall be enforceable by, the respective Covered Parties.
SECTION 6.08. [RESERVED].
SECTION 6.09. STOCKHOLDER APPROVAL.
The Company will, as promptly as practicable following the date of this
Agreement, duly call, give notice of, convene and hold a meeting of its
stockholders for the purpose of approving this Agreement and the transactions
contemplated hereby (or otherwise obtain the Stockholder Approval by written
consent pursuant to the DGCL). The Company will hold such meeting no later than
June 30, 2000 and, at such meeting, will obtain the Stockholder Approval. In
addition to gaining the Stockholder Approval, the Company shall, in accordance
with Code Section 280G and related regulations, obtain stockholder approval,
following appropriate disclosure, of any parachute payments that may be made in
connection with the
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proposed transaction, and shall take such other steps as may be necessary to
secure the deductibility of such parachute payments.
SECTION 6.10. [RESERVED].
SECTION 6.11. ADDITIONAL AGREEMENTS.
Subject to the terms and conditions herein provided, each of the
parties hereto agrees to use all reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary, proper
or advisable, whether under applicable Law or otherwise, or to remove any
injunctions or other impediments or delays, legal or otherwise, to consummate
and make effective the Merger and the other transactions contemplated by this
Agreement.
SECTION 6.12. [RESERVED]
SECTION 6.13. LITIGATION.
Not more than three (3) days before Closing, the Company shall update
SCHEDULE 4.10 to include all pending and, to the Company's knowledge, threatened
Company Litigation which has become pending or threatened following the date of
this Agreement.
SECTION 6.14. NO ADVERSE CHANGE IN FINANCIAL COMMITMENTS.
Purchaser will not, in any material respect, adversely amend, change,
alter, replace or modify the terms and conditions of the Financial Commitments
prior to the Closing without the prior written consent of the Company. If, at
any time prior to the Closing, either Chase, CSFB or both desires to, in any
material respect, adversely amend, change, alter or modify the terms and
conditions of the Financial Commitments, Purchaser shall promptly notify the
Company of such event and shall permit the Company (and such advisors the
Company reasonably deems appropriate) to meet with representatives of Purchaser,
Chase and/or CSFB regarding such event.
SECTION 6.15. STOCKHOLDER VOTE.
Each Stockholder shall, no later than June 30, 2000 cause all shares of
Company Stock owned by such Stockholder to be voted in favor of this Agreement,
the Merger and the other transactions contemplated hereby, and to the extent
such Stockholder Approval is not obtained by such date, each Stockholder hereby
consents to the approval and adoption of this Agreement and the Merger,
effective as of such date. In addition, each Stockholder hereby covenants and
agrees that, except as contemplated by this Agreement, such Stockholder shall
not, and shall not offer or agree to, sell, transfer, tender, assign, pledge,
encumber or otherwise dispose of, or hypothecate, or enter into any contract or
other arrangement or understanding with respect to the transfer of any shares of
Company Stock owned by such Stockholder. Each Stockholder hereby irrevocably
waives any and all rights which it may have to appraisal, dissent or any similar
or related matter with respect to the Merger. In addition to the foregoing,
following appropriate disclosure and in accordance with Code Section 280G and
related regulations, the Stockholders shall vote in favor of any parachute
payments that may be made in connection with the proposed transaction. Each
Stockholder hereby grants to Purchaser or its
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designees an irrevocable proxy for the purpose of voting the shares of Company
Stock owned by such Stockholder consistent with the requirements of this Section
6.15, such proxy to be effective on June 30, 2000 if the Stockholder Approval is
not obtained by such date, it being agreed that such proxy is coupled with an
interest.
SECTION 6.16. ROLLOVER PARTICIPATION.
Not less than fourteen days prior to the Closing, Purchaser shall
provide the Company with a list of holders of Company Stock, if any, who have
agreed with Purchaser to retain, following the Effective Time, a number of
shares of Company Common Stock (including the number of shares obtainable upon
exercise of any stock options) and the number of such shares that each such
holder has agreed shall not be converted into Per Share Merger Consideration
pursuant to Section 2.05(a) (the "AGREED ROLLOVER SHARES"). Thereafter, not less
than two days prior to the Closing, Purchaser shall provide the Company with (i)
the amount of the aggregate equity investment in Purchaser to be made by Parent
at Closing pursuant to the Equity Commitment Letter ("PARENT INVESTMENT"), and
(ii) the total number of shares which shall not be converted into Per Share
Merger Consideration pursuant to Section 2.05(a) ("ROLLOVER COMPANY STOCK"),
which shall be equal to (a) the result of:
(x) first, dividing the Parent Investment by 0.94,
(y) then, subtracting from the result in (x) the Parent Investment, and
(z) then, dividing the result in (y) by the Estimated Per Share Merger
Consideration,
or (b) such lesser number of shares as shall be specified by Purchaser. The
positive difference, if any, between total number of shares of Rollover Company
Stock and the Agreed Rollover Shares shall be called the "PRORATA SHARES." If
Purchaser is unable or fails to provide the list specified in the first sentence
of this Section 6.16, or if Purchaser is unable or fails to provide the
information specified in the second sentence of this Section 6.16, then it shall
be presumed that there are no Prorata Shares. If there is a number of Prorata
Shares, not less than 1 day following the Company's receipt of the information
contemplated by the second sentence of this Section 6.16, the Company shall
provide Purchaser with a list of holders of Company Stock, from among the
Stockholders, who shall retain following the Effective Time a number of shares
of Company Common Stock equal to the Prorata Shares and the amount of Prorata
Shares to be held by each such holder. If the Company is unable or fails to
provide such list, then each Stockholder agrees that it shall retain a number of
Prorata Shares equal to that Stockholder's pro rata portion (based on the
relative ownership percentage of shares of Company Stock held by each
Stockholder after deducting any Agreed Rollover Shares owned by such
Stockholder) of the total number of Prorata Shares. Any holder of shares of
Company Preferred Stock who intends to retain Prorata Shares attributable to
such Company Preferred Stock shall be required to convert such shares to Company
Common Stock prior to the Effective Time. Each holder of Prorata Shares shall be
entitled to enter into a stockholders' agreement at Closing (a proposed form of
which shall be provided to the Company on or before June 30, 2000) with Parent
containing the provisions described in SCHEDULE 6.16.
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SECTION 6.17. JOINDER AGREEMENT.
The Company shall use all reasonable efforts following the execution
hereof to cause the Persons listed in the form of Joinder Agreement attached
hereto as EXHIBIT B to execute such Joinder Agreement not later than June 15,
2000 or as soon thereafter as possible. Each party hereto agrees that upon
execution of such Joinder Agreement by each such Person, such Person shall
become a party hereto in accordance therewith.
ARTICLE VII
CONDITIONS
SECTION 7.01. CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES.
The obligations of each of the Company and Purchaser to consummate the
Merger are subject to the satisfaction (or, if permissible, waiver by the party
for whose benefit such conditions exist) of the following conditions:
(a) the Stockholder Approval shall have been obtained;
(b) there shall not be any Judgment or Law restraining, enjoining or
prohibiting the consummation of the Merger; and
(c) all waiting periods under the HSR Act shall have expired or been
terminated.
SECTION 7.02. CONDITIONS TO THE OBLIGATIONS OF PURCHASER.
The obligations of Purchaser to consummate the Merger are subject to
the satisfaction (or waiver by Purchaser) of the following further conditions:
(a) the representations and warranties of the Company contained in this
agreement which are qualified as to materiality shall be true and correct and
all such representations and warranties that are not qualified as to materiality
shall be true and correct in all material respects, in each case when made and
at and as of the Closing as if made at and as of the Closing (except for those
representations and warranties that address matters only as of a particular date
or only with respect to a specific period of time which need only be true and
correct as of such date or with respect to such period);
(b) the Company shall have performed in all material respects its
obligations hereunder required to be performed by it at or prior to the Closing
Date;
(c) the Company shall have delivered to Purchaser a certificate (dated
as of the Closing Date), signed by an officer or officers with authority to bind
the Company as to compliance with the conditions set forth in paragraphs (a) and
(b) of Section 7.02;
(d) Purchaser shall have received the proceeds described in the Equity
Commitment Letter and in the Financial Commitments on the terms and conditions
set forth
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therein or, subject to Section 6.14, upon the terms and conditions which are, in
the reasonable judgment of Purchaser, substantially equivalent thereto and to
the extent that any terms and conditions are not set forth in the Financial
Commitments, on terms and conditions reasonably satisfactory to Purchaser;
(e) The individuals listed on SCHEDULE 7.02(e) (collectively, the
"MANAGEMENT STOCKHOLDERS") shall have entered into definitive agreements
relating to their respective equity interests in Purchaser after the Closing on
terms and conditions satisfactory to Purchaser and the equity investments
contemplated by such agreements shall have been effected contemporaneously with
the Closing; provided that the terms and conditions set forth in SCHEDULE
7.02(E) shall be deemed satisfactory to Purchaser;
(f) all consents and approvals from any Person under any Law, Judgment
or material agreement, indenture or other instrument to which the Company, any
Company Subsidiary or any holder of Company Securities is a party or by which
any of them is bound shall have been received;
(g) not more than five percent (5%) of the shares of Company Stock
shall be Dissenting Shares;
(h) the Company shall have completed, pursuant to a form and
methodology reasonably acceptable to Purchaser, a full reconciliation of the
Applicable Accounts and the total increase, if any, as a result of such
reconciliation to the Company's cost of goods sold for the period ending on
March 31, 2000 shall not exceed $250,000. The "Applicable Accounts" are:
320102--A/P Trade Fuel, 320105--A/P Trade for PAMS, 320500--A/P EFT Contra
Account, 375111--12/99 Fuel Accrual Clearing, 375115--GR/IR Clearing Account,
375130--ACCR PAMS Fuel Payable and 375360--A/P Simons Fuel Payable. Purchaser
shall have also determined, to its satisfaction, that the balance of account
320500--A/P EFT Contra Account as of the Closing Date will not exceed the larger
of (i) the amount of fuel purchases in the immediately preceding twenty-five
days, or (ii) $90 million, as adjusted by mutual agreement of the Company and
Purchaser, for changes in fuel costs; and
(i) Except as set forth on SCHEDULE 4.08 and except as set forth in the
SEC Filings prior to the date of this Agreement, since December 31, 1999, there
shall not have been any events, changes, effects or developments which have had
or would reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect.
SECTION 7.03. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY.
The obligations of the Company to consummate the Merger are subject to
the satisfaction (or waiver by the Company, as the case may be) of the following
further conditions:
(a) the representations and warranties of Purchaser contained in this
agreement which are qualified as to materiality shall be true and correct and
all such representations and warranties that are not qualified as to materiality
shall be true and correct in all material respects, in each case when made and
at and as of the Closing Date as if made at and as of the Closing Date (except
for those representations and warranties that address matters only
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as of a particular date or only with respect to a specific period of time which
need only be true and accurate as of such date or with respect to such period);
(b) Purchaser shall have performed in all material respects all of the
respective obligations hereunder required to be performed by Purchaser, at or
prior to the Closing Date;
(c) Purchaser shall have assumed and ratified effective as of the
Closing Date, the obligations of the Company and TA Operating Corporation under
those certain Employment Agreements with each of ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, each dated as of January 1, 2000
and amended as of May 26, 2000 (collectively, the "KEY EXECUTIVE EMPLOYMENT
AGREEMENTS") as in effect on the date hereof and attached hereto as SCHEDULE
7.03(c); and
(d) Purchaser shall have delivered to the Company certificates (dated
as of the Closing Date), signed by an officer or officers with authority to bind
Purchaser as to compliance with the conditions set forth in paragraphs (a) and
(b) of Section 7.03.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective Time
until the earlier to occur of (i) May 31, 2001, or (ii) 60 days after the
certified public accountant for the Surviving Corporation has delivered to the
Surviving Corporation the annual audit for the year ended December 31, 2000 (the
earlier of such dates, the "LIABILITY TERMINATION DATE") and all such
representations and warranties will be extinguished as of the Liability
Termination Date except with respect to claims made prior to the Liability
Termination Date.
SECTION 8.02. INDEMNIFICATION OF THE SURVIVING CORPORATION.
Subject to the limitations set forth in this Article VIII, following
the Closing, Parent, the Surviving Corporation and their respective affiliates,
stockholders, partners, officers, directors, employees, successors and assigns
(other than, in each case, any Related Party) (each, a "SURVIVING CORPORATION
PARTY," and collectively, the "SURVIVING CORPORATION PARTIES") shall be
indemnified and held harmless from and against, as and when incurred, any claim,
liability, obligation, loss, damage, assessment, judgment, settlement, cost and
expense whether or not arising out of third party claims (including reasonable
attorney's fees and expenses) (collectively, "LOSSES") arising out of, relating
or attributable to any (i) breach by the Company of any representation or
warranty made by the Company in this Agreement or in any certificate furnished
by the Company pursuant to this Agreement, or (ii) non-fulfillment or breach of
any covenant of the Company in this Agreement.
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SECTION 8.03. INDEMNIFICATION BY THE SURVIVING CORPORATION.
Subject to the limitations set forth in this Article VIII, following
the Closing, the Surviving Corporation shall indemnify the Stockholders'
Representative, the Recipients and any Person who was an officer or director of
the Company immediately prior to the Effective Time, including their successors
and assigns (each, a "RELATED PARTY," and collectively, the "RELATED PARTIES"),
and hold them harmless from and against, as and when incurred, any Losses
arising out of, relating or attributable to any (i) breach by Parent or
Purchaser of any representation or warranty made by Purchaser in this Agreement
or in any certificate furnished by Parent or Purchaser pursuant to this
Agreement, or (ii) non-fulfillment or breach of any covenant of Parent,
Purchaser or the Surviving Corporation in this Agreement.
SECTION 8.04. INDEMNIFICATION BASKETS AND OTHER LIMITATIONS.
Notwithstanding the provisions of Section 8.02 or Section 8.03, neither
the Surviving Corporation Parties nor any Related Party, as the case may be,
shall have the right to make a claim thereunder unless the aggregate amount of
all Losses referred to in Section 8.02 or Section 8.03, as the case may be,
which would otherwise be subject to indemnification but for this Section 8.04
exceeds $1,000,000 (the "BASKET AMOUNT"), in which event the party seeking
indemnification shall become entitled to receive any and all Losses in excess of
the Basket Amount (but subject to the Cap).
SECTION 8.05. INDEMNIFICATION CAPS.
The maximum liability for Losses under each of Section 8.02(i) and
Section 8.03(i) shall be One Million Dollars ($1,000,000) (the "CAP").
SECTION 8.06. INDEMNIFICATION OF THIRD-PARTY CLAIMS.
Any Person making a claim for indemnification under Section 8.02 or
Section 8.03 (an "INDEMNIFIED PARTY") shall notify the party from whom
indemnification is sought (the "INDEMNIFYING PARTY") (which notice, in the case
of a claim by any Surviving Corporation Party under Section 8.02 shall be
satisfied by notice to the Stockholders' Representative) of the claim in writing
promptly after receiving written notice of any action, lawsuit, proceeding,
investigation or other claim against it (if by a third party), describing the
claim, the amount thereof (if known and quantifiable) and the basis thereof;
PROVIDED, HOWEVER, that the failure to so notify an Indemnifying Party shall not
relieve the Indemnifying Party of its obligations hereunder except to the extent
that such failure shall have caused Losses for which the Indemnifying Party is
obligated to be greater than such Losses would have been had the Indemnified
Party given the Indemnifying Party prompt notice hereunder. The Indemnifying
Party shall be entitled to participate in the defense of such action, lawsuit,
proceeding, investigation or other claim giving rise to the Indemnified Party's
claim for indemnification at the Indemnifying Party's expense, and at its option
shall be entitled to assume the defense thereof; PROVIDED, that prior to the
Indemnifying Party assuming control of such defense it shall first verify to the
Indemnified Party in writing that the Indemnifying Party shall be fully
responsible (subject to a reservation of any rights) for all liabilities and
obligations relating to such claim for indemnification (subject to all dollar
limitations set forth herein) with respect to
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such action, lawsuit, proceeding, investigation or other claim giving rise to
such claim for indemnification hereunder; and PROVIDED, FURTHER, that:
(a) the Indemnified Party shall be entitled to participate in
the defense of such claim and to employ counsel of its choice for such
purpose; provided that the fees and expenses of such separate counsel
shall be borne by the Indemnified Party;
(b) the Indemnifying Party shall not be entitled to assume
control of such defense (unless otherwise agreed to in writing by the
Indemnified Party) if (i) the claim for indemnification relates to or
arises in connection with any criminal or quasi-criminal proceeding,
action, indictment, allegation or investigation; (ii) the Indemnified
Party reasonably believes an adverse determination with respect to the
action, lawsuit, investigation, proceeding or other claim giving rise
to such claim for indemnification would be materially detrimental to or
would materially injure the Indemnified Party's reputation or future
business prospects; (iii) the claim seeks an injunction or other
equitable relief against the Indemnified Party; or (iv) upon petition
by the Indemnified Party, the appropriate court rules that the
Indemnifying Party failed or is failing to vigorously prosecute or
defend such claim;
(c) if the Indemnifying Party elects to control the defense of
any such claim, the Indemnifying Party shall obtain the prior written
consent of the Indemnified Party before entering into any settlement of
a claim or ceasing to defend such claim if, pursuant to or as a result
of such settlement or cessation, the Indemnified Party is not expressly
and unconditionally released from all liabilities and obligations with
respect to such claim and such claim is fully indemnified by the
Indemnifying Party;
(d) if the Indemnifying Party does not elect hereunder to
assume the defense of a third party claim, the Indemnifying Party and
the Indemnified Party shall cooperate in good faith in the defense of
such claim;
(e) any indemnification claim amount finally and conclusively
determined to be payable to any Surviving Corporation Party as the
Indemnified Party pursuant to Section 8.02 (less the Basket Amount and
subject to the Cap and the other limitations herein), shall solely be
satisfied by offset against the Indemnification Escrow Account; and
(f) any payment made pursuant to Section 8.02 or Section 8.03
shall be treated as an adjustment to the Merger Consideration.
SECTION 8.07. NET INSURANCE AND OTHER INDEMNIFICATION.
An Indemnified Party shall, prior to obtaining any payment for Losses
from the Indemnifying Party, use its reasonable best efforts to collect the
entire amount of such Losses from any insurance policy or any other
indemnification collectible by the Indemnified Party with respect to such claim.
The obligation of any Indemnifying Party to indemnify the Indemnified
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Party against any claim under this Article VIII shall take into effect the net
effect of any insurance or other indemnification collectible by the Indemnified
Party with respect to such claim or the underlying factors with respect thereto
under any applicable policy or agreement.
SECTION 8.08. SOURCE OF FUNDS; EXCLUSIVITY OF INDEMNIFICATION.
Purchaser hereby agrees that, following the Effective Time, the
Surviving Corporation Parties' sole and exclusive source of funds for any and
all Losses under Section 8.02(i) shall be the Indemnification Escrow Account,
which shall be distributed following the Liability Termination Date in
accordance with the terms of the Escrow Agreement.
ARTICLE IX
CLOSING; TERMINATION
SECTION 9.01. CLOSING.
Unless this Agreement shall have been terminated and the Merger
abandoned, the closing of the transactions contemplated hereby (the "CLOSING")
shall take place at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ on the third business day following the satisfaction
of all conditions precedent to Closing (or at such other place and on such other
date as shall be agreed to by the parties hereto). At the Closing, the parties
shall exchange the documents referred to in Article VII hereof and all necessary
filings with the Secretary of State to consummate the Merger under the DGCL
shall be made (including the Certificate of Merger).
SECTION 9.02. TERMINATION.
Anything herein or elsewhere to the contrary notwithstanding, this
Agreement may be terminated and the Merger contemplated herein may be abandoned
at any time prior to the Effective Time, whether before or after the approval of
the stockholders of the Company:
(i) with the consent of each of the parties hereto;
(ii) by the Company or Purchaser, if the Merger shall not have
occurred on or prior to October 4, 2000; PROVIDED, HOWEVER, that the
right to terminate this Agreement and abandon the Merger under this
clause (ii) shall not be available to any party whose failure to
fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure of the Merger to occur on or prior to such
date; or
(iii) by the Company or Purchaser in the event that any
permanent injunction or similar action of any Governmental Entity which
has the effect of preventing the consummation of the transactions
pursuant to this Agreement shall have become final and nonappealable.
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SECTION 9.03. EFFECT OF TERMINATION.
In the event of the termination of this Agreement as provided in
Section 9.02 hereof, written notice thereof shall forthwith be given to the
other party or parties specifying the provision hereof pursuant to which such
termination is made, and this Agreement shall forthwith become null and void,
and there shall be no liability on the part of any of the parties hereto except
(i) for fraud or for willful breach of this Agreement and (ii) as set forth in
Section 10.01.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01. COSTS AND EXPENSES.
Whether or not the transactions contemplated by this Agreement are
consummated, Purchaser shall bear the costs and expenses incurred by Purchaser
in connection with the negotiation, preparation, execution and closing of this
Agreement and the transactions contemplated hereby. Whether or not the
transactions contemplated by this Agreement are consummated, the Company shall
bear the costs and expenses incurred by the Company, including without
limitation those of the Exchange Agent, in connection with the negotiation,
preparation, execution and closing of this Agreement and the transactions
contemplated hereby. Notwithstanding the foregoing, the Recipients shall be
responsible for the timely payment of, and to such extent, shall indemnify and
hold harmless Purchaser against, stock transfer taxes arising out of or in
connection with or attributable to the transactions effected pursuant to this
Agreement.
SECTION 10.02. NOTICES.
All notices or other communications required or permitted by this
Agreement shall be effective upon receipt and shall be in writing and delivered
personally or by overnight courier, or sent by facsimile, as follows:
(i) if to Purchaser, to:
Oak Hill Capital Partners, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇/▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and
Oak Hill Capital Management Partners, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇/▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to the Company, to:
TravelCenters of America, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
TravelCenters of America, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to
▇▇▇▇▇▇, Halter & ▇▇▇▇▇▇▇▇ LLP
Suite 1400
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) if to the Stockholders' Representative, to:
Clipper Capital Associates, L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as hereafter shall be furnished as provided in this
Section 10.02 by any of the parties hereto to the other parties hereto.
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SECTION 10.03. STOCKHOLDERS' REPRESENTATIVE AND CERTAIN OTHER MATTERS.
(a) The Company and each Stockholder hereby designates Clipper as the
Stockholders' Representative to execute any and all instruments or other
documents on behalf of the Stockholders, and to do any and all other acts or
things on behalf of the Stockholders, which the Stockholders' Representative may
deem necessary or advisable, or which may be required pursuant to this Agreement
or otherwise, in connection with the consummation of the Merger and the other
transactions contemplated hereby. Without limiting the generality of the
foregoing, the Stockholders' Representative shall have the full and exclusive
authority to (i) agree with Purchaser with respect to any matter or thing
required or deemed necessary by the Stockholders' Representative in connection
with the provisions of this Agreement calling for the agreement of the
Stockholders, give and receive notices on behalf of all Stockholders, and act on
behalf of the Stockholders in connection with any matter as to which the
Stockholders are or may be obligated under this Agreement, all in the absolute
discretion of the Stockholders' Representative, (ii) in general, do all things
and perform all acts, including without limitation executing and delivering all
agreements, certificates, receipts, consents, elections, instructions, and other
instruments or documents contemplated by, or deemed by the Stockholders'
Representative to be necessary or advisable in connection with, this Agreement,
(iii) execute and deliver the Escrow Agreement, (iv) take all actions necessary
or desirable in connection with the defense and/or settlement of any
indemnification claims pursuant to Section 8.02, and (v) negotiate, settle,
compromise and otherwise handle the post-closing adjustment of the Merger
Consideration pursuant to Section 3.02. The parties to this Agreement shall
cooperate with the Stockholders' Representative and any accountants, attorneys
or other agents whom it may retain to assist in carrying out its duties
hereunder. All decisions by the Stockholders' Representative shall be binding
upon all of the Stockholders and all other holders of Company Securities that
execute a letter of transmittal (the "OTHER HOLDERS"), and no Stockholder or
Other Holder shall have the right to object, dissent, protest or otherwise
contest the same. The Company shall include in any proxy materials submitted to
its Stockholders describing this Agreement and in the letter of transmittal
described in Section 3.04 such information as the Stockholders' Representative
may reasonably request be included therein, including an agreement by such
stockholders that the Stockholders' Representative has been delegated the power
and authority to act on their behalf. The Stockholders' Representative may
communicate with any Stockholder or any other Person concerning his
responsibilities hereunder, but it is not required to do so. The Stockholders'
Representative has a duty to serve in good faith the interests of the
Stockholders and to perform its designated role under this Agreement and the
Escrow Agreement, but the Stockholders' Representative shall have no financial
liability whatsoever to any Person relating to its service hereunder (including
any action taken or omitted to be taken), except that it shall be liable for
harm which it directly causes by an act of willful misconduct. The Stockholders
shall indemnify and hold harmless the Stockholders' Representative against any
loss, expense (including reasonable attorney's fees) or other liability arising
out of its service as the Stockholders' Representative under this Agreement,
other than for harm directly caused by an act of willful misconduct. The
Stockholders' Representative may resign at any time by notifying in writing the
Surviving Corporation and the Stockholders.
(b) Each Stockholder represents and warrants to Purchaser, severally
and not jointly, as to itself: (i) that it has all necessary power, authority
and capacity to execute and deliver this Agreement and to perform its
obligations under Sections 6.05, 6.11, 6.15 and 6.16
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and this Article X; (ii) the execution, delivery and performance of this
Agreement by such Stockholder have been duly and validly authorized by all
necessary action on the part of such Stockholder and (iii) this Agreement has
been duly and validly executed and delivered by such Stockholder (assuming the
due authorization, execution and delivery by each other party hereto) and
constitutes a legal, valid and binding obligation of such Stockholder,
enforceable against such Stockholder in accordance with its terms, except that
such enforceability may be limited by bankruptcy, insolvency or similar laws
affecting creditors rights generally.
SECTION 10.04. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute a
single instrument.
SECTION 10.05. ENTIRE AGREEMENT.
This Agreement (including the Schedules referred to herein), the
Confidentiality Agreement and the Equity Commitment Letter sets forth the entire
understanding and agreement between the parties as to the matters covered herein
and supersedes and replaces any prior understanding, agreement or statement of
intent, in each case, written or oral, of any and every nature with respect
thereto.
SECTION 10.06. GOVERNING LAW; EXCLUSIVE JURISDICTION.
This Agreement shall be governed in all respects, by the laws of the
State of Delaware, including validity, interpretation and effect, without regard
to principles of conflicts of law. The parties hereto irrevocably and
unconditionally consent to submit to the exclusive jurisdiction of the courts of
the State of Delaware for any lawsuits, actions or other proceedings arising out
of or related to this Agreement and agree not to commence any lawsuit, action or
other proceeding except in such courts. The parties hereto further agree that
service of process, summons, notice or document by mail to their addresses set
forth above shall be effective service of process for any lawsuit, action or
other proceeding brought against them in any such court. The parties hereto
irrevocably and unconditionally waive any objection to the laying of venue of
any lawsuit, action or other proceeding arising out of or related to this
Agreement in the courts of the State of Delaware, and hereby further irrevocably
and unconditionally waive and agree not to plead or claim in any such court that
any such lawsuit, action or proceeding brought in any such court has been
brought in an inconvenient forum.
SECTION 10.07. THIRD PARTY RIGHTS; ASSIGNMENT.
Except as specified in Section 6.07, this Agreement is intended to be
solely for the benefit of the parties hereto and is not intended to confer any
benefits upon, or create any rights in favor of, any Person other than the
parties hereto and shall not be assignable without the prior written consent of
the other party.
SECTION 10.08. WAIVERS AND AMENDMENTS.
This Agreement may be amended by the parties hereto by action taken by
or on behalf of their respective Boards of Directors at any time before or after
any required approval of
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matters presented in connection with the Merger by the stockholders of the
Company; provided, however, that after any such approval, there shall be made no
amendment that by law requires further approval by such stockholders without the
further approval of such stockholders. No modification of or amendment to this
Agreement shall be valid unless in a writing signed by the parties hereto
referring specifically to this Agreement and stating the parties' intention to
modify or amend the same. Any waiver of any term or condition of this Agreement
must be in a writing signed by the party sought to be charged with such waiver
referring specifically to the term or condition to be waived, and no such waiver
shall be deemed to constitute the waiver of any other breach of the same or of
any other term or condition of this Agreement.
SECTION 10.09. SCHEDULES.
Disclosure of any fact or item in any Schedule shall not be deemed to
constitute an admission that such item or fact is material for the purposes of
this Agreement.
SECTION 10.10. ENFORCEMENT.
The parties agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in accordance with
their specific items. It is accordingly agreed that the parties shall be
entitled to specific performance of the terms hereof and costs of enforcement
(including attorneys fees); this being in addition to any other remedy to which
they are entitled at law or in equity.
NEXT PAGE IS SIGNATURE PAGE
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IN WITNESS WHEREOF, this Agreement has been executed and delivered as
of the date first written above.
TRAVELCENTERS OF AMERICA, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Executive Officer
TCA ACQUISITION CORPORATION
By: /s/ Rowan ▇. ▇. ▇▇▇▇▇▇
------------------------------------
Name: Rowan ▇. ▇. ▇▇▇▇▇▇
Title: Vice President
CLIPPER CAPITAL ASSOCIATES, L.P.
By: CLIPPER CAPITAL ASSOCIATES, INC.
its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer & Secretary
NATIONAL PARTNERS, L.P.
By: CLIPPER CAPITAL ASSOCIATES, L.P.
its General Partner
By: CLIPPER CAPITAL ASSOCIATES, INC.
its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer & Secretary
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NATIONAL PARTNERS III, L.P.
By: CLIPPER CAPITAL ASSOCIATES, L.P.
its General Partner
By: CLIPPER CAPITAL ASSOCIATES, INC.
its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer & Secretary
CLIPPER/MERCHANT I, L.P.
By: CLIPPER CAPITAL ASSOCIATES, L.P.
its General Partner
By: CLIPPER CAPITAL ASSOCIATES, INC.
its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer & Secretary
OLYMPUS PRIVATE PLACEMENT FUND, L.P.
By: OGP PARTNERS, L.P.
its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: General Partner
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OLYMPUS GROWTH FUND II, L.P.
By: OGP II, L.P.
its General Partner
By: LJM, L.L.C.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Member
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LIST OF EXHIBITS AND SCHEDULES
------------------------------
Exhibits
--------
Exhibit A Escrow Agreement
Exhibit B Joinder Agreement
Exhibit C Success Bonus Participants
Company Schedules
-----------------
Schedule 1.01(a) Company "Knowledge" Individuals
Schedule 3.02(a) Investments in Non-Subsidiaries
Schedule 4.02 Subsidiaries
Schedule 4.03 Capitalization
Schedule 4.04(b) Authorization
Schedule 4.05 No Violation
Schedule 4.06 Approvals
Schedule 4.07(b) SEC Filings
Schedule 4.07(c) Financial Statements
Schedule 4.07(d) Capital Expenditures
Schedule 4.08 Absence of Certain Transactions
Schedule 4.09 Taxes
Schedule 4.10 Litigation
Schedule 4.11 Environmental
Schedule 4.12 Title to Property
Schedule 4.14 Contracts
Schedule 4.15(a) Employee and Labor Matters and Plans
Schedule 4.15(b) Employee Plans
Schedule 4.15(d) Funded Employee Plans
Schedule 4.15(e) Severance, etc.
Schedule 4.16 Insurance Policies
Schedule 4.17 Intellectual Property
Schedule 4.20 Brokerage Fees
Schedule 7.02(e) Management Stockholder Agreements
Schedule 7.03(c) Key Executive Employment Agreements
Purchaser Schedules
-------------------
Schedule 5.03 No Violation
Schedule 5.04 Approvals
Schedule 5.06 Brokerage Fees
Miscellaneous Schedules
-----------------------
Schedule 6.01 Interim Operations
Schedule 6.16 Stockholders' Agreement Term Sheet
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