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Exhibit 10.1
Confidential treatment has been requested for portions of the
signature page
to this exhibit. The copy filed herewith omits the information
subject to the
confidentiality requested. Omissions are designated with [***].
A complete
version of this exhibit has been filed separately with the
United States
Securities and Exchange Commission.
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
CON-WAY INC.
TRANSPORTATION RESOURCES, INC.
SEATTLE ACQUISITION CORPORATION
SHAREHOLDERS' AGENT
AND
THE PRINCIPAL SHAREHOLDERS
July 13, 2007
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1 Defined
Terms........................................... 1
ARTICLE II
THE MERGER
Section 2.1 The
Merger.............................................. 12
Section 2.2
Closing................................................. 12
Section 2.3 Effective
Time.......................................... 13
Section 2.4 Effect of the
Merger.................................... 13
Section 2.5 Articles of Incorporation;
Bylaws....................... 13
Section 2.6 Directors;
Officers..................................... 13
Section 2.7 Consideration for the
Merger............................ 14
Section 2.8 Closing Amount
Adjustments.............................. 15
Section 2.9 Effect on Capital
Stock................................. 17
Section 2.10 Escrow Amount and Shareholders' Escrow
Amount.......... 18
Section 2.11 Surrender of
Certificates.............................. 19
Section 2.12 No Further Ownership Rights in Company Capital
Stock... 20
Section 2.13 Lost, Stolen or Destroyed
Certificates................. 20
Section 2.14 Taking of Necessary Action; Further
Action............. 21
ARTICLE III
REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY
Section 3.1 Organization, Standing and
Power........................ 21
Section 3.2
Subsidiaries............................................ 22
Section 3.3 Capitalization; Title to the
Shares..................... 22
Section 3.4
Authority............................................... 23
Section 3.5 Financial
Statements.................................... 24
Section 3.6 Absence of Certain
Changes.............................. 25
Section 3.7 Absence of Undisclosed
Liabilities...................... 27
Section 3.8
Litigation.............................................. 28
Section 3.9 Restrictions on Business
Activities..................... 28
Section 3.10 Governmental
Authorization............................. 28
Section 3.11
[Reserved]............................................. 29
Section 3.12 Title to
Property...................................... 29
Section 3.13 Intellectual
Property.................................. 29
Section 3.14 Internal
Controls...................................... 32
Section 3.15 Environmental
Matters.................................. 32
Section 3.16
Taxes.................................................. 34
Section 3.17 Employee Benefit
Plans................................. 37
Section 3.18 Employee
Matters....................................... 40
Section 3.19 Interested Party
Transactions.......................... 43
Section 3.20 Real
Property.......................................... 43
Section 3.21
Insurance.............................................. 44
Section 3.22 Compliance With
Laws................................... 45
Section 3.23 Minute
Books........................................... 46
Section 3.24 Complete Copies of
Materials........................... 46
Section 3.25 Brokers' and Finders'
Fees............................. 46
Section 3.26 Board
Approval......................................... 46
Section 3.27 Customers and
Suppliers................................ 46
Section 3.28 Material
Contracts..................................... 47
Section 3.29 No Breach of Material
Contracts........................ 49
Section 3.30 Third Party
Consents................................... 49
Section 3.31 Accounts Receivable and
Payable........................ 49
Section 3.32 Export Licenses and
Agreements......................... 50
Section 3.33 Customs
Matters........................................ 50
Section 3.34 Propriety of Past
Payments............................. 51
Section 3.35 Only Representations and
Warranties.................... 51
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Section 4.1
Organization............................................ 52
Section 4.2 Power and
Authority..................................... 52
Section 4.3 Board
Approval.......................................... 53
Section 4.4 No Ownership of Company Capital
Stock................... 53
Section 4.5 Availability of
Funds................................... 53
Section 4.6 Brokers' and Finders'
Fees.............................. 53
Section 4.7 Due Diligence by Parent and Merger
Sub.................. 53
Section 4.8 Funding
Commitment...................................... 54
ARTICLE V
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF PRINCIPAL
SHAREHOLDERS
Section 5.1 Power and
Authority..................................... 54
Section 5.2 Good Title to
Shares.................................... 54
Section 5.3 No
Conflicts............................................ 55
ARTICLE VI
CONDUCT PRIOR TO THE CLOSING DATE
Section 6.1 Conduct of Business of the
Company...................... 55
Section 6.2 Restriction on Conduct of Business of the
Company....... 55
Section 6.3 Shareholder Meeting; No
Solicitation.................... 59
Section 6.4 Further
Information..................................... 62
Section 6.5 Compliance with the WARN Act and Similar
Laws........... 63
Section 6.6 Assistance with
Financing............................... 63
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1 Public
Disclosure....................................... 65
Section 7.2 Consents;
Cooperation................................... 66
Section 7.3 Legal
Requirements...................................... 66
Section 7.4 Commercially Reasonable Efforts and Further
Assurances.. 66
Section 7.5 Termination of
Plans.................................... 67
Section 7.6 Certain Tax
Matters..................................... 67
Section 7.7 No Solicitation of
Employees............................ 70
Section 7.8 Mexican Subsidiary
Shareholders......................... 70
Section 7.9 Communication with
Employees............................ 70
Section 7.10 Due Diligence
Period................................... 70
Section 7.11 Directors and
Officers................................. 72
Section 7.12 Retention of Reviewing
Auditor......................... 73
ARTICLE VIII
CONDITIONS TO THE CLOSING
Section 8.1 Conditions to Obligations of Each Party to Effect
the
Merger ................................................ 73
Section 8.2 Additional Conditions to Obligations of the
Company..... 73
Section 8.3 Additional Conditions to the Obligations of Parent
and
Merger Sub............................................. 74
Section 8.4 Frustration of
Conditions............................... 75
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
Section 9.1
Termination............................................. 76
Section 9.2 Effect of
Termination................................... 76
Section 9.3
Expenses................................................ 77
Section 9.4
Amendment............................................... 77
Section 9.5 Extension;
Waiver....................................... 77
ARTICLE X
INDEMNIFICATION
Section 10.1
Indemnification........................................ 77
Section 10.2
[Reserved]............................................. 81
Section 10.3 Claims Pending at Expiration of Indemnification
Period. 81
Section 10.4 Claims upon Escrow
Account............................. 81
Section 10.5 Objections to Claims; Resolution of
Conflicts.......... 82
Section 10.6 Shareholders'
Agent.................................... 82
Section 10.7 Actions of the Shareholders'
Agent..................... 83
Section 10.8 Third-Party
Claims..................................... 83
Section 10.9 No Right of
Contribution............................... 85
ARTICLE XI
GENERAL PROVISIONS
Section 11.1
Survival............................................... 85
Section 11.2
Notices................................................ 86
Section 11.3
Interpretation......................................... 86
Section 11.4
Counterparts........................................... 86
Section 11.5 Entire Agreement; Nonassignability; Parties in
Interest 86
Section 11.6
Severability........................................... 87
Section 11.7 Governing
Law.......................................... 87
Section 11.8 Rules of
Construction.................................. 87
Section 11.9 Specific
Performance................................... 87
Section 11.10 Descriptive
Headings.................................. 88
Section 11.11 Force
Majeure......................................... 88
Section 11.12 No Personal
Liability................................. 88
Section 11.13 Merger
Sub............................................ 88
EXHIBITS
Exhibit A Form of Articles of Incorporation of the Surviving
Corporation
Exhibit B Form of Bylaws of the Surviving Corporation
Exhibit C Reference Accounts Statement
Exhibit D Form of Escrow Agreement
Exhibit E Form of Non-Competition Agreement
Exhibit F Diligence Request List
SCHEDULES
Schedule 1.1
Schedule 5.2
Schedule 11.2
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as
of
July 13, 2007, by and among Con-way Inc., a Delaware corporation
("Parent"),
Seattle Acquisition Corporation, a Missouri corporation and a
wholly owned
subsidiary of Parent ("Merger Sub"), Transportation Resources,
Inc., a
Missouri corporation (the "Company"), the Shareholders' Agent
(as defined
herein) (the "Shareholders' Agent") and the Principal
Shareholders (as
defined herein).
RECITALS
WHEREAS, the Board of Directors of each of Merger Sub and
the
Company has adopted this Agreement in accordance with the
General and
Business Corporation Law of Missouri, as amended (the "MGBCL"),
and each
deems it advisable and in the best interests of its shareholders
to
consummate the transactions contemplated hereby, including the
merger (the
"Merger") of the Merger Sub with and into the Company, upon the
terms and
subject to the conditions set forth herein; and
WHEREAS, the Board of Directors of the Company has
unanimously
determined that the consideration to be paid to the Company
Shareholders is
fair to the Company Shareholders and has directed the submission
of this
Agreement to a vote at a meeting of the Company Shareholders
(the
"Shareholder Meeting") and recommended to the Company
Shareholders the
approval of this Agreement and the Merger and the other
transactions
contemplated hereby upon the terms and subject to the conditions
set forth
herein; and
WHEREAS, concurrently with the execution of this Agreement, and
as
a condition and inducement to Parent's willingness to enter into
this
Agreement, certain of the Key Employees and certain of the
Principal
Shareholders are entering into Employee Retention Agreements
(collectively,
the "Retention Agreements"); and
WHEREAS, the Board of Directors of Merger Sub has directed
the
submission of this Agreement to a vote at a meeting of the
shareholders of
Merger Sub and, in turn, Parent, as the sole shareholder of
Merger Sub, has
approved this Agreement and the Merger in accordance with the
provisions of
the MGBCL.
NOW, THEREFORE, in consideration of the covenants and
representations set forth herein, and for other good and
valuable
consideration, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms
As used herein, the terms below shall have the following
meanings. Any
of such terms, unless the context otherwise requires, may be
used in the
singular or plural, depending upon the reference.
"401(k) Plan" has the meaning set forth in Section 7.5.
"Acquisition Proposal" means any offer or proposal relating to
any
Alternate Transaction.
"Antitrust Filings" has the meaning set forth in Section
7.3.
"Aggregate Consideration" has the meaning set forth in Section
2.7(a).
"Agreement" has the meaning set forth in the preamble.
"Alternate Transaction" means any transaction or series of
related
transactions involving: (i) the sale, license, disposition or
acquisition of
all or a material portion of the business or assets of the
Company or any of
the Company Subsidiaries; (ii) the sale, issuance, grant,
disposition or
acquisition of (A) any Company Capital Stock or other equity
security of the
Company or any of the Company Subsidiaries, (B) any option,
call, warrant or
right (whether or not immediately exercisable) to acquire any
Company Capital
Stock or other equity security of the Company or any of the
Company
Subsidiaries, or (C) any security, instrument or obligation that
is or may
become convertible into or exchangeable for any Company Capital
Stock or
other equity security of the Company or any of the Company
Subsidiaries; or
(iii) any merger, consolidation, business combination, tender
offer, share
exchange, reorganization or similar transaction involving the
Company or any
of the Company Subsidiaries; provided, however, neither the
Merger nor any
Company acquisition of Common Stock pursuant to the terms of the
Stock
Incentive Plan will be deemed an Alternate Transaction in any
case.
"Annual Financial Statements" means the audited consolidated
balance
sheets of the Company and its Subsidiaries as of and for the
fiscal years
ended December 31, 2004, 2005 and 2006, together with the
related
consolidated statements of operation, shareholders' equity and
cash flows for
the fiscal years ended December 31, 2004, 2005 and 2006,
including the notes
thereto.
"Antitrust Filings" has the meaning set forth in Section
7.3.
"Articles of Merger" has the meaning set forth in Section
2.3.
"Asset Accounts" has the meaning set forth in Section
2.8(a).
"Assets" has the meaning set forth in Section 3.12(a).
"Audit" means any audit, assessment of Taxes, other examination
by any
Tax Authority, or any administrative or judicial proceeding or
appeal of such
proceeding relating to Taxes.
"Business Day" means any day that is not a Saturday, Sunday, or
other
day on which banks are required or authorized by law to be
closed in
Missouri.
"Change of Recommendation" has the meaning set forth in Section
6.3(f).
"Change of Recommendation Notice" has the meaning set forth in
Section
6.3(f)(iii).
"Closing" has the meaning set forth in Section 2.2.
"Closing Amount" has the meaning set forth in Section
2.7(a)(i).
"Closing Amount Deficiency" has the meaning set forth in
Section
2.8(d)(ii).
"Closing Amount Excess" has the meaning set forth in Section
2.8(d)(i).
"Closing Balance Sheet " means the unaudited balance sheet of
the
Company as of the Closing Date, including any notes thereto and
the
information set forth in Section 2.8(b).
"Closing Balance Sheet Objection" has the meaning set forth in
Section
2.8(c)(i).
"Closing Date" has the meaning set forth in Section 2.2.
"Closing Reference Amount" has the meaning set forth in Section
2.8(b).
"COBRA" has the meaning set forth in Section 3.17(d).
"Code" means the Internal Revenue Code of 1986, as amended, and
the
rules and regulations promulgated thereunder.
"Commitment Letter" has the meaning set forth in Section
4.8.
"Common Stock" means all shares of common stock, par value $0.01
per
share, of the Company.
"Company" has the meaning set forth in the preamble.
"Company Articles" means the Articles of Incorporation of the
Company as
in effect on the date hereof.
"Company Authorizations" has the meaning set forth in Section
3.10.
"Company Board" has the meaning set forth in Section 2.6(a).
"Company Bylaws" means the Bylaws of the Company as in effect on
the
date hereof.
"Company Capital Stock" means all shares of Common Stock of the
Company.
"Company Cash" means all cash of the Company on hand or held by
any bank
or other third Person, less the amount of any Payment Obligation
as such term
is defined in the Retention Agreements with the Company's Chief
Executive
Officer and Chief Financial Officer to the extent not yet paid
from an
account designated as "Cash" in the designation column of
Exhibit C hereto,
less all overdrafts, and less amounts sufficient to satisfy all
checks in
transit, in the accounts designated as "Cash" in the designation
column of
Exhibit C hereto, as of the Closing Date.
"Company Certificate" means a certificate or certificates
representing
shares of Company Capital Stock.
"Company Debt" means, with respect to the Company, (i) all
obligations
set forth in accounts designated as "Debt" in the designation
column of
Exhibit C hereto, (ii) all indebtedness for borrowed money or
for the
deferred purchase price of property or services (other than
current
liabilities incurred in the ordinary course of business and
payable in
accordance with customary practices), (iii) any other
indebtedness that is
evidenced by a note, bond, debenture or similar instrument, (iv)
any guaranty
including that certain Limited Guaranty by Contract Freighters,
Inc. for the
benefit of U.S. Bank National Association, dated as of December
3, 2002 and
as amended by that certain First Amendment to Limited Guaranty
dated December
2, 2005 and that certain Second Amendment to Limited Guaranty
dated as of
December 21, 2006, for the principal amount of the balance of
the note
described therein and (v) all obligations under financing leases
or
capitalized leases, in each case (x) as of the Closing Date, (y)
together
with interest thereon, related prepayment penalties actually
incurred and
other amounts payable actually incurred in connection with the
extinguishment
thereof, if any, and (z) determined in accordance with the
Company's normal
accounting practices; provided, that in no event shall "Company
Debt" include
(a) any operating lease, "keep well" or similar letter, or
letter of credit
posted as collateral for self-insured retentions, to the extent
not described
in clauses (i) or (v) hereof, (b) that certain Unlimited
Guaranty (the
"Guaranty") by the Company for the benefit of U.S. Bank National
Association
dated as of April 26, 2004, or (c) that certain Irrevocable
Letter of Credit
No. 210-2706438 (the "Letter of Credit") dated March 13, 1990
for the benefit
of George Eddie Brogdon and Mae Brogdon; provided that, no claim
shall have
been made upon, nor any drawing made under, such Guaranty or
Letter of
Credit, as the case may be.
"Company Disclosure Schedule" has the meaning set forth in
ARTICLE III.
"Company Due Diligence Supervisor" means Angelo Ianello.
"Company Employee Plans" has the meaning set forth in Section
3.17(a).
"Company Governing Documents" has the meaning set forth in
Section 3.1.
"Company Shareholders" means the holders of Company Capital
Stock,
including the Principal Shareholders.
"Company Subsidiary" or "Company Subsidiaries" has the meaning
set forth
in Section 3.2(a).
"Confidentiality Agreement" means that certain Mutual
Confidential
Nondisclosure Agreement dated as of February 19, 2007 by and
between the
Company and Parent.
"Contract" means any written or oral agreement, contract,
subcontract,
settlement agreement, lease, instrument, note, option, warranty,
purchase
order, license, sublicense, insurance policy, benefit plan,
commitment,
arrangement or undertaking of any nature that is legally binding
as in effect
as of the date hereof or as may become enforceable against the
Company or its
Subsidiaries on or before the Closing Date.
"Customs" has the meaning set forth in Section 3.33.
"Damages" has the meaning set forth in Section 10.1(a).
"Disclosure Schedule Delivery Date" has the meaning set forth in
ARTICLE
III.
"Disputed Items" has the meaning set forth in Section
2.8(c)(ii).
"Dissenting Shareholder" has the meaning set forth in Section
2.9(c).
"Dissenting Shares" has the meaning set forth in Section
2.9(c).
"Dollars" or "$" means the lawful currency of the United States
of
America.
"DOJ" has the meaning set forth in Section 3.4(b).
"Due Diligence Access" has the meaning set forth in Section
7.10(a).
"Due Diligence Period" has the meaning set forth in Section
7.10(a).
"Due Diligence Termination Fee" has the meaning set forth in
Section
7.10(b).
"Due Diligence Termination Notice" has the meaning set forth in
Section
7.10(a).
"Effective Time" has the meaning set forth in Section 2.3.
"Environmental Claim" has the meaning set forth in Section
3.15(f)(1).
"Environmental Damages" means any and all losses, damages,
costs,
expenses, diminution in value, liabilities, obligations and
claims of any
kind, whether known or unknown, asserted or unasserted or
absolute or
contingent (including any action brought by any Governmental
Entity or Person
and including reasonable costs of investigation and defense and
reasonable
attorneys' fees and expenses) arising out of or relating to (i)
the events,
circumstances, and conditions described in Section 3.15(d) of
the Company
Disclosure Schedule; (ii) any pollution or threat to human
health or the
environment that is related in any way to the management, use,
control,
ownership or operation of the business of the Company or any
Company
Subsidiary including, without limitation, all on-site and
off-site activities
involving Materials of Environmental Concern, and that occurred,
existed,
arises out of conditions or circumstances that occurred or
existed, or was
caused, in whole or in part, on or before the Closing Date,
whether or not
the pollution or threat to human health or the environment is
described in
Section 3.15(d) of the Company Disclosure Schedule; or (iii)
any
Environmental Claim against any Person or entity whose liability
for such
Environmental Claim the Company or any Company Subsidiary has
prior to the
Closing Date assumed or retained either contractually or by
operation of law.
"Environmental Laws" has the meaning set forth in Section
3.15(f)(2).
"ERISA" has the meaning set forth in Section 3.17(a).
"ERISA Affiliate" has the meaning set forth in Section
3.17(a).
"Escrow Account" means the escrow account established pursuant
to the
Escrow Agreement.
"Escrow Agent" means U.S. Bank National Association, acting as
agent
under the Escrow Agreement or such other escrow agent selected
by Parent and
reasonably satisfactory to the Company.
"Escrow Agreement" has the meaning set forth in Section
2.10.
"Escrow Amount" has the meaning set forth in Section
2.7(a)(ii).
"Export Approvals" has the meaning set forth in Section
3.32(a).
"Final Conversion Schedule" has the meaning set forth in
Section
2.11(b).
"Final Date" has the meaning set forth in Section 9.1(b).
"Financial Statements" means the Annual Financial Statements,
the
Interim Financial Statements and the Monthly Financial
Statements delivered
to Parent on or before the date hereof.
"Financing" means the consummation of the financing that is the
subject
of the Commitment Letter or such alternate financing as Parent
shall deem
advisable.
"FMCSA" has the meaning set forth in Section 3.4(b).
"FTC" has the meaning set forth in Section 3.4(b).
"GAAP" means the United States generally accepted accounting
principles.
"Governmental Entity" means any federal, state, local or
foreign
government, including any municipality, any political
subdivision thereof or
any court, administrative or regulatory agency, department,
instrumentality,
body or commission or other governmental authority or
agency.
"HSR Act" has the meaning set forth in Section 3.4(b).
"Indebtedness" means (i) all indebtedness for borrowed money or
for the
deferred purchase price of property or services (other than
current
liabilities incurred in the ordinary course of business and
payable in
accordance with customary practices), (ii) any other
indebtedness that is
evidenced by a note, bond, debenture or similar instrument,
(iii) all
obligations under financing leases or capitalized leases, (iv)
all
obligations in respect of acceptances issued or created, (v) all
liabilities
secured by any Lien on any property, other than Permitted Liens
and (vi) all
guarantee, "keep well," "make well," comfort or similar
obligations, in each
case together with interest thereon, related prepayment
penalties actually
incurred and other amounts payable actually incurred in
connection with the
extinguishment thereof, if any.
"Indemnification Period" has the meaning set forth in Section
10.2.
"Indemnified Person" or "Indemnified Persons" has the meaning
set forth
in Section 10.1(a).
"Indemnity Deductible" has the meaning set forth in Section
10.1(c).
"Indemnity Threshold" has the meaning set forth in Section
10.1(c).
"Intellectual Property" means all intellectual property and
industrial
property rights of any kind or nature, including all U.S. and
foreign (i)
patents, patent applications, patent disclosures, and all
related
continuations, continuations-in-part, divisionals, reissues,
re-examinations,
substitutions, and extensions thereof ("Patents"), (ii)
trademarks, service
marks, names, corporate names, trade names, domain names, logos,
slogans,
trade dress, and other similar designations of source or origin,
together
with the goodwill symbolized by any of the foregoing
("Trademarks"), (iii)
copyrights and copyrightable subject matter ("Copyrights"), (iv)
rights of
publicity, (v) moral rights and rights of attribution and
integrity, (v)
computer programs (whether in source code, object code, or other
form),
algorithms, databases, compilations and data, technology
supporting the
foregoing, and all documentation, including user manuals and
training
materials, related to any of the foregoing ("Software"), (vi)
trade secrets
and all other confidential information, know-how, inventions,
proprietary
processes, formulae, models, and methodologies ("Trade
Secrets"), (vii)
rights of privacy and rights to personal information, (viii)
telephone
numbers and Internet protocol addresses, and (viii) all rights
in the
foregoing and in other similar intangible assets, (ix) all
applications and
registrations for the foregoing, and (x) all rights and remedies
against
past, present, and future infringement, misappropriation, or
other violation
thereof.
"Interim Balance Sheet" means the unaudited balance sheet of the
Company
and its Subsidiaries on a consolidated basis as at March 31,
2007, including
any notes thereto.
"Interim Financial Statements" means the Interim Balance Sheet
and the
related unaudited statements of operation and cash flows of the
Company and
its Subsidiaries on a consolidated basis for the three (3)
months ended March
31, 2007, including any notes thereto.
"International Employee Plan" has the meaning set forth in
Section
3.17(k).
"Investigation" has the meaning set forth in Section 7.10.
"IP Contracts" has the meaning set forth in Section 3.13(b).
"IRS" means the Internal Revenue Service.
"Key Employee" means each employee of the Company set forth on
Schedule
1.1(a) hereto.
"Knowledge" means (i) with respect to any natural Person, the
actual
knowledge of such Person after reasonable inquiry, (ii) with
respect to the
Company, the actual knowledge after reasonable inquiry of any of
those
Persons set forth on Schedule 1.1(b) hereto or (iii) with
respect to Parent
or Merger Sub, the actual knowledge after reasonable inquiry of
any of those
Persons set forth on Schedule 1.1(c) hereto.
"Law" means any federal, state, foreign, local, municipal,
provincial or
other statute, law, ordinance, regulation, rule, code, order or
other
requirement or rule of law.
"Lease Agreements" has the meaning set forth in Section
3.20(b).
"Liability Accounts" has the meaning set forth in Section
2.8(a).
"Lien" means, with respect to any asset (including any
security), any
mortgage, lien, pledge, charge, security interest, encumbrance
or restriction
of any kind in respect of such asset.
"Material Adverse Effect" means, with respect to any entity or
group of
entities, any event, change or effect that (x) is, or is
reasonably expected
to be, materially adverse to the financial condition,
properties, assets
(including intangible assets), liabilities, business, operations
or results
of operations of such entity and its Subsidiaries, taken as a
whole; or (y)
would prevent or materially alter or delay any of the
transactions
contemplated by this Agreement; other than any event, change or
effect
(either alone or in combination) relating to (a) conditions
affecting the
industries in which such entity or group of entities operate
generally or the
United States economy generally; (b) the taking of any action,
or the
withholding of action, pursuant to the provisions of this
Agreement; (c)
changes in Law or GAAP; (d) acts of war or acts of terrorism; or
(e) the
announcement or consummation of this Agreement or any of the
transactions
contemplated herein.
"Material Contracts" has the meaning set forth in Section
3.28.
"Materials of Environmental Concern" has the meaning set forth
in
Section 3.15(f)(3).
"Merger" has the meaning set forth in the recitals.
"Merger Sub" has the meaning set forth in the preamble.
"Mexican Subsidiary Shareholders" means Jose Alfredo Cardenas
Gonzalez,
Moises Carlos Gonzalez Molina, Consorcio de Servicios al
Transporte, S.A. de
C.V. and Corporativo CST, S. de R.L. de C.V., each of whom owns
capital stock
of, or other equity or voting interests in, certain of the
Mexican
Subsidiaries as of the date hereof, as more fully set forth
on
Section 3.2(a)(ii) of the Company Disclosure Schedule.
"Mexican Subsidiaries" means CFI de Mexico, S.A. de C.V.; CFI
Mex, S. de
R.L. de C.V.; CFI Logistica, S.A. de C.V.; Prontomex, S.A. de
C.V.; Servicios
Administrativos CFI, S.A. de C.V.; and Soluciones
Internacionales de
Transporte, S.A. de C.V.
"MGBCL" has the meaning set forth in the recitals.
"Monthly Financial Statements" means the unaudited balance
sheets of the
Company and its Subsidiaries on a consolidated basis for each
fiscal month
completed prior to the Closing Date, beginning with the month
ended April 30,
2007 and the related statements of operation and cash flows for
the monthly
periods then ended.
"Non-Environmental Damages" has the meaning set forth in
Section 10.1(a).
"Officer's Certificate" has the meaning set forth in Section
10.4.
"Outstanding Share Number" means the number of shares of Common
Stock
outstanding immediately before the Effective Time.
"Owned Real Property" means any real property legally or
beneficially
owned by the Company or any Company Subsidiary.
"Parent" has the meaning set forth in the preamble.
"Parent Due Diligence Supervisor" means Rohit Mulgund.
"Paying Agent" means U.S. Bank National Association, acting as
agent
under the Paying Agent Agreement or such other paying agent
selected by
Parent and reasonably satisfactory to the Company.
"Payment Fund" has the meaning set forth in Section 2.11(a).
"Permitted Liens" means (a) Liens for taxes not yet due and
payable or
being contested in good faith; (b) statutory and contractual
Liens of
landlords, (c) Liens of carriers, warehousemen, mechanics,
materialmen,
repairmen and other similar Persons incurred in the ordinary
course of
business; (d) zoning, building codes and other land use Laws
regulating the
use or occupancy of any Owned Real Property; and (e)
restrictions, variances,
covenants, rights of way, encumbrances, easements other similar
matters of
record affecting title to any portion of the Owned Real Property
and other
minor irregularities in title, none of which, individually or in
the
aggregate, interfere in any material respect with the conduct of
the
Company's business as conducted as of the date hereof.
"Person" shall mean any individual, corporation (including any
non-
profit corporation), general partnership, limited partnership,
limited
liability partnership, joint venture, estate, trust, company
(including any
limited liability company or joint stock company), firm or other
enterprise,
association, organization, entity or Governmental Entity.
"Post-Closing Taxable Period' means any taxable period beginning
after
the Closing Date, or with respect to a Straddle Period, the
portion of such
period beginning after the Closing Date.
"Pre-Closing Taxable Period" means any taxable period ending on
or
before the Closing Date, or with respect to a Straddle Period,
the portion of
such taxable period ending on and including the Closing
Date.
"Pre-Qualified Company Shareholders" has the meaning set forth
in
Section 2.11(b).
"Principal Shareholder Representatives" has the meaning set
forth in
Section 7.1(b).
"Principal Shareholders" means each Person set forth on Schedule
1.1(d).
"Proportionate Share" means, with respect to a Company
Shareholder, a
fraction, the numerator of which is the number of shares of
Common Stock held
by such Company Shareholder immediately prior to the Effective
Time and the
denominator of which is the Outstanding Share Number.
"Reference Accounts Statement" has the meaning set forth in
Section
2.8(a).
"Reference Date" has the meaning set forth in Section
2.8(a).
"Reference Date Amount" has the meaning set forth in Section
2.8(a).
"Related Party Transaction" is a transaction between the Company
or
Company Subsidiary and another Company Subsidiary, or another
party defined
as a related party in Internal Revenue Code Section 482 and
Regulations,
Canadian Transfer Pricing Code and Regulations, Mexican Transfer
Pricing Code
and Regulations, or the Transfer Pricing Code and Regulations of
any other
country in which a party to a transaction is located.
"Requisite Shareholder Approval" has the meaning set forth in
Section
3.4(b).
"Retention Agreements" has the meaning set forth in the
recitals.
"Reviewing Auditor" means the Kansas City, Missouri office
of
PriceWaterhouseCoopers. In the event such firm is unable or
unwilling to
serve as the Reviewing Auditor, then the Kansas City, Missouri
office of
Ernst & Young LLP shall serve as the Reviewing Auditor. In
the event both of
the Kansas City, Missouri office of PriceWaterhouseCoopers and
the Kansas
City, Missouri office of Ernst & Young LLP are unable or
unwilling to serve
as the Reviewing Auditor the parties hereto shall agree upon an
office of an
accounting firm of national reputation to serve as the Reviewing
Auditor;
provided that in no event shall such office of any such Person
which has
provided services to Parent or any of its Subsidiaries, the
Company or any of
its Subsidiaries or any Principal Shareholder in the five (5)
year period
preceding the date hereof serve as Reviewing Auditor and
provided, further
that it shall be a condition to any Person's appointment as the
Reviewing
Auditor that the parties hereto agree not to retain the services
of such
office of such Reviewing Auditor for a period of two (2) years
following the
completion of such office's services as Reviewing Auditor.
"Secretary of State" has the meaning set forth in Section
2.3.
"Shareholder Meeting" has the meaning set forth in the
recitals.
"Shareholders' Agent" means the Person set forth on Schedule
1.1(e).
"Shareholders' Escrow Account" means the escrow account
established
pursuant to the Shareholders' Escrow Agreement.
"Shareholders' Escrow Agreement" means the escrow agreement to
be
entered into prior to the Closing between the Shareholders'
Agent and the
Shareholders' Escrow Agent.
"Shareholders' Escrow Amount" has the meaning set forth in
Section
2.7(a)(iii).
"Shareholders' Escrow Agent" means U.S. Bank National
Association,
acting as agent under the Shareholders' Agent Escrow Agreement
or such other
escrow agent selected by the Shareholders' Agent in her sole
discretion.
"Signing Date Employee" means any employee of the Company or any
Company
Subsidiary as of the date hereof.
"Sitran" has the meaning set forth in Section 3.2(b).
"Stock Incentive Plan" has the meaning set forth in Section
3.3(a).
"Straddle Period" means a taxable period ending after the
Closing Date
but beginning before the Closing Date.
"Subsidiary" means, as to any party, any corporation,
association,
business entity, partnership, limited liability company or other
Person of
which such party, either alone or together with one or more
Subsidiaries or
by one or more Subsidiaries (i) directly or indirectly owns or
controls
securities or other interests representing more than twenty-five
percent
(25%) of the voting power of such Person or (ii) is entitled, by
Contract or
otherwise, to elect, appoint or designate directors constituting
a majority
of the members of such Person's board of directors or other
governing body.
"Subsidiary Governing Documents" has the meaning set forth in
Section
3.1.
"Superior Offer" means an unsolicited, bona fide written
Acquisition
Proposal by a third party to acquire, directly or indirectly,
pursuant to a
merger, consolidation or other business combination, all or
substantially all
of the assets of the Company and its Subsidiaries or all of the
outstanding
voting securities of the Company as a result of which the
Company
Shareholders immediately preceding such transaction would hold
less than
forty percent (40%) of the equity interests in the surviving or
resulting
entity of such transaction and any direct or indirect parent or
subsidiary
thereof, on terms that the Company Board has in good faith
concluded, after
consultation with its financial advisor of nationally recognized
reputation,
taking into account, among other things, (x) all legal,
financial, regulatory
and other aspects of the offer (including any terms thereof
relating to
break-up fees, expense reimbursement and conditions to
consummation) and (y)
the Person making the offer, to be more favorable, from a
financial point of
view, to the Company Shareholders (in their capacities as
shareholders) than
the terms of the Merger (which shall require that such
Acquisition Proposal
must provide to the Company Shareholders (in their capacities
as
shareholders) consideration with a value per share of Company
Capital Stock
that is greater than the per share consideration to be provided
in the
Merger) and is capable of being consummated on the terms so
proposed no later
than thirty (30) days following the Final Date and for which
financing, to
the extent required, is then fully committed, subject to
conditions no
greater than those set forth in the Commitment Letter.
"Surviving Corporation" has the meaning set forth in Section
2.1.
"Tax" or "Taxes" means all United States federal, state, local
and
foreign taxes, and other assessments of a similar nature
including, without
limitation: (i) taxes or other charges on or with respect to
income,
franchises, windfall or other profits, gross receipts, profits,
sales, use,
capital stock, payroll, employment, social security, workers'
compensation,
unemployment compensation or net worth; (ii) taxes or other
charges in the
nature of excise, withholding, ad valorem, stamp, transfer,
value added or
gains taxes; (iii) license, registration and documentation fees;
and (iv)
customs duties, tariffs and similar charges, in each case,
whether imposed
directly or through withholding, and including any interest,
additions to
tax, or penalties applicable thereto and will include any
liability pursuant
to a tax sharing, allocation, or indemnification agreement, any
liability
determined by reference to, in respect of, or on behalf of the
tax liability
of another Person, any liability under Treasury Regulation
Section 1.1502-6
or any similar provision of state, local, or foreign Law.
"Tax Authority" means the IRS and any other national, regional,
state,
municipal, foreign or other governmental or regulatory authority
or
administrative body responsible for the administration of any
Taxes.
"Tax Return" means all United States federal, state, local and
foreign
tax returns, declarations, statements, reports, schedules, forms
and
information returns or other documents and any amendments
thereto required to
be filed with a Tax Authority.
"Third Party Claim" has the meaning set forth in Section
10.8.
"Termination Fee" has the meaning set forth in Section
9.3(b).
"Transaction Expenses" has the meaning set forth in Section
9.3.
"Transactions" means the Merger and the other transactions
and
agreements contemplated by this Agreement.
"Treasury Regulations" has the meaning set forth in Section
3.17(b).
"Voting Debt" has the meaning set forth in Section 3.3(b).
"WARN Act" means the Worker Adjustment and Retraining
Notification Act
of 1988, as amended.
ARTICLE II
THE MERGER
Section 2.1 The Merger
Upon the terms and subject to the conditions set forth in
this
Agreement and the applicable provisions of the MGBCL, at the
Effective Time,
Merger Sub shall be merged with and into the Company and the
separate
corporate existence of Merger Sub shall thereupon cease with the
Company
continuing as the surviving corporation and as a wholly-owned
subsidiary of
Parent (sometimes hereinafter referred to as the "Surviving
Corporation")
Section 2.2 Closing
The closing of the Merger (the "Closing") shall take place at
10:00
a.m. Central time, on a date to be specified by the parties,
which shall be
no later than three (3) Business Days after satisfaction or
waiver of all of
the conditions set forth in ARTICLE VIII of this Agreement
(other than
conditions which can be satisfied only by the delivery of
certificates or
other documents at the Closing) (the "Closing Date") at the
offices of
Skadden, Arps, Slate, Meagher & Flom LLP, located at 525
University Avenue,
Suite 1100, Palo Alto, California, unless another time, date or
place is
agreed to by the parties hereto. Each of the parties hereto
acknowledges
that it is their intention that the Closing occur (subject to
the terms and
conditions of this Agreement) as soon as practicable following
the
satisfaction or waiver of the conditions set forth in ARTICLE
VIII.
Section 2.3 Effective Time
Upon the terms and subject to the conditions set forth in
this
Agreement, on the Closing Date, the Surviving Corporation shall
file the
articles of merger in such form as is required by the MGBCL (the
"Articles of
Merger") with the Secretary of State of the State of Missouri
(the "Secretary
of State") in accordance with Section 351.430 of the MGBCL,
whereupon, at
such time, or at such later time as shall be agreed upon by the
parties and
specified in the Articles of Merger, Merger Sub shall be merged
with and into
the Company, with the Company surviving the Merger, pursuant to
the
provisions of the MGBCL (the "Effective Time"). The parties
hereto shall
make all other filings, recordings or publications required by
the MGBCL in
connection with the Merger.
Section 2.4 Effect of the Merger
From and after the Effective Time, the effect of the Merger
shall
be as provided in this Agreement and the applicable provisions
of the MGBCL.
Section 2.5 Articles of Incorporation; Bylaws
(a) Immediately after the Effective Time, the articles of
incorporation of the Surviving Corporation shall be the articles
of
incorporation of Merger Sub as in effect immediately prior to
the Effective
Time and as set forth in Exhibit A to this Agreement, except
that such
articles of incorporation shall be amended to provide that the
name of the
Surviving Corporation shall be "Transportation Resources, Inc.",
and such
articles of incorporation shall be the articles of incorporation
of the
Surviving Corporation until thereafter amended as provided by
Law and such
articles of incorporation.
(b) Immediately after the Effective Time, the bylaws of the
Surviving Corporation shall be the bylaws of Merger Sub as in
effect
immediately prior to the Effective Time and as set forth in
Exhibit B to this
Agreement, except that such bylaws shall be amended to provide
that the name
of the Surviving Corporation shall be "Transportation Resources,
Inc.", and
such bylaws shall be the bylaws of the Surviving Corporation
until thereafter
amended as provided by Law and such bylaws.
Section 2.6 Directors; Officers
(a) Immediately after the Effective Time, the directors of
Merger Sub at the Effective Time shall be the directors of the
Surviving
Corporation until the earlier of their resignation or removal or
until their
respective successors are duly elected or appointed and
qualified in
accordance with the Surviving Corporation's articles of
incorporation and
bylaws. In furtherance thereof, the Company shall secure,
effective at the
Effective Time, resignations of all of its incumbent directors
(the "Company
Board"), and the Company shall take all actions available to the
Company to
cause the directors of Merger Sub to be so elected or appointed
and qualified
at the Effective Time.
(b) Immediately after the Effective Time, the officers of
Merger Sub at the Effective Time shall be the officers of the
Surviving
Corporation until the earlier of their resignation or removal or
until their
respective successors are duly elected or appointed and
qualified in
accordance with the Surviving Corporation's articles of
incorporation and
bylaws. In furtherance thereof, the Company shall secure,
effective at the
Effective Time, resignations of all of its officers, and the
Company shall
take all actions available to the Company to cause the officers
of Merger Sub
to be so elected or appointed and qualified at the Effective
Time.
Section 2.7 Consideration for the Merger
(a) Parent shall pay or cause to be paid to, or on behalf
of, the Company Shareholders, an aggregate amount in the Merger
equal to
Seven Hundred Fifty Million Dollars ($750,000,000) subject to
the adjustments
set forth in this Section 2.7 and Section 2.8 below (as so
adjusted, the
"Aggregate Consideration"), which shall consist of:
(i) an amount equal to Six Hundred Eighty-Two
Million Five Hundred Thousand Dollars ($682,500,000) (the
"Closing
Amount"), which shall be paid to the Company Shareholders at
Closing
in accordance with Section 2.11(a); and
(ii) an amount equal to Thirty-Seven Million Five
Hundred Thousand Dollars ($37,500,000) (the "Escrow Amount")
less
the amount, if any, that is required to be paid to
Indemnified
Persons to compensate such Indemnified Persons for Damages
as
provided in ARTICLE X, which shall be paid into the Escrow
Account
at Closing and disbursed in accordance with Section 2.10;
and
(iii) an amount equal to Thirty Million Dollars
($30,000,000) (the "Shareholders' Escrow Amount") less the
amount of
any Closing Amount Deficiency, if any, that is required to be
paid
to Parent as provided in Section 2.8(d), which shall be paid
into
the Shareholders' Escrow Account at Closing and disbursed in
accordance with the terms of the Shareholders' Escrow
Agreement.
The Closing Amount and the Aggregate Consideration are subject
to adjustment
in accordance with Section 2.8.
(b) Except as otherwise provided in Section 2.8, all
payments to be made as provided in this Section 2.7 shall be
made without
interest or withholding.
(c) Notwithstanding anything in this Section 2.7 to the
contrary, any amounts required to be delivered into escrow
pursuant to the
Retention Agreements, other than those Retention Agreements
entered into by
the Chief Executive Officer and the Chief Financial Officer of
the Company,
shall be paid by the Parent to the escrow agent under the
Retention
Agreements and deducted from the amounts otherwise payable to
the Principal
Shareholders pursuant to this Agreement.
Section 2.8 Closing Amount Adjustments
(a) Reference Accounts Statement. Attached hereto as
Exhibit C (the "Reference Accounts Statement") is a schedule
setting forth
the balances of certain asset accounts designated "Asset" in the
designations
column (the "Asset Accounts") and liability accounts designated
"Liability"
in the designations column (the "Liability Accounts") of the
Company as of
March 31, 2007 (the "Reference Date"). The amount by which the
sum of the
Reference Date balances of the Asset Accounts exceeds the sum of
the
Reference Date balances of the Liability Accounts is the
"Reference Date
Amount." For the avoidance of doubt, (i) those accounts
designated "N/A" in
the Reference Accounts Statement shall not be taken into account
for purposes
of adjusting the Closing Amount and (ii) no accrued liability
for Taxes for
which Parent has assumed responsibility for payment pursuant to
Sections
7.6(a)(iv) shall be included in any Liability Account.
(b) Closing Balance Sheet. No later than sixty (60) days
after the Closing Date, Parent shall prepare and deliver to the
Shareholders'
Agent the Closing Balance Sheet, which shall include the Closing
Date
balances in each of the Asset Accounts and Liability Accounts,
the amount by
which the sum of the balances of the Closing Date Asset Accounts
exceeds the
sum of the balances of the Closing Date Liability Accounts (such
number,
which may be a positive or negative number, the "Closing
Reference Amount")
and the actual amounts of the Company Debt, Transaction Expenses
incurred by
the Company or any Company Subsidiary and not paid or accrued
and reflected
in the Closing Balance Sheet before the Closing Date and Company
Cash. The
Company represents and warrants that the Reference Accounts
Statement has
been prepared in accordance with, and Parent agrees that the
Closing Balance
Sheet will be prepared in accordance with, the Company's normal
accounting
practices, consistent with past practice in the ordinary course
of business.
(c) Dispute Resolution
(i) The Company Shareholders shall be deemed to
have accepted the Closing Balance Sheet (A) if the
Shareholders'
Agent provides written notice to Parent that it accepts the
Closing
Balance Sheet as prepared by Parent or (B) unless the
Shareholders'
Agent shall have delivered to Parent within sixty (60) days
after
the date on which the Shareholders' Agent received the
Closing
Balance Sheet a written notice of disagreement, such notice
to
specify in reasonable detail the nature and extent of such
disagreement (a "Closing Balance Sheet Objection"). Parent and
the
Shareholders' Agent shall attempt in good faith to reach
agreement
resolving all disputes set forth in the Closing Balance
Sheet
Objection within thirty (30) days after its delivery. If Parent
and
the Shareholders' Agent are unable to resolve any or all
such
disputes within such thirty-day period, Parent and the
Shareholders'
Agent shall, promptly after the expiration of such period,
submit
for resolution all unresolved disputes to the Reviewing Auditor
as
an arbiter for resolution.
(ii) Promptly, but no later than thirty (30) days
after its acceptance of its appointment as Reviewing Auditor,
the
Reviewing Auditor shall determine, based solely on presentation
by
Parent and the Shareholders' Agent and not by independent
review,
those items in dispute on the Closing Balance Sheet Objection
(the
"Disputed Items") and shall render a written report to Parent
and
the Shareholders' Agent as to the resolution of each dispute and
the
resulting calculation of the Asset Accounts and Liability
Accounts
as of the Closing Date, the Closing Reference Amount, Company
Debt,
Transaction Expenses incurred by the Company or any Company
Subsidiary and not paid or accrued and reflected in the
Closing
Balance Sheet before the Closing Date, Company Cash and any
other
item on the Closing Balance Sheet. In resolving any Disputed
Item,
the Reviewing Auditor (A) shall not assign a value to such
Disputed
Item greater than the greatest value for such Disputed Item
claimed
by either Parent or the Shareholders' Agent or less than the
smallest value for such Disputed Item claimed by either Parent
or
the Shareholders' Agent; (B) shall rule only on the
objections
raised by Shareholders' Agent, accepting all other aspects of
the
Closing Balance Sheet; and (C) shall have no right, authority
or
discretion to employ any accounting standard or principles
except
for those provided for herein. The Reviewing Auditor will
have
exclusive jurisdiction over, and shall be the sole recourse
and
remedy of, the parties hereto against one another or any
other
Person with respect to any disputes arising out of or relating
to
Closing Balance Sheet. The Reviewing Auditor's determination,
as
reflected in the report of the Reviewing Auditor, will be
conclusive
and binding on the parties hereto, in the absence of manifest
error,
and will be enforceable in a court of law. The Closing
Balance
Sheet, as modified by the report of the Reviewing Auditor,
shall
constitute the Closing Balance Sheet for all purposes
hereunder.
(iii) Each party shall cooperate with and make
available to the other party and its representatives within
three
(3) Business Days of its receipt of a written request all
information, records, data and working papers, and shall
permit
access to facilities, personnel and representatives, as
reasonably
required in connection with the preparation and analysis of
the
Closing Balance Sheet, the Closing Balance Sheet Objection and
the
resolution of any disputes with respect thereto.
(iv) Unless Parent and the Shareholders' Agent
otherwise mutually agree in writing, Parent and the Company
Shareholders shall share the fees and expenses of the
Reviewing
Auditor as determined by such accounting firm based on the
following
formulas: (A) the Company Shareholders shall pay a portion of
such
fees and expenses equal to the total of such fees and
expenses
multiplied by a fraction, the numerator of which is the
dollar
amount of the Disputed Items resolved in favor of Parent and
the
denominator of which is the total dollar amount of the
Disputed
Items and (B) Parent shall pay a portion of fees and expenses
equal
to the total of such fees and expenses multiplied by a fraction,
the
numerator of which is the dollar amount of the Disputed
Items
resolved in favor of the Company Shareholders and the
denominator of
which is the total dollar amount of the Disputed Items.
(d) Calculation of Payments
(i) If (A) the Closing Reference Amount plus the
actual amount of Company Cash less the actual amount of
Transaction
Expenses incurred by the Company or any Company Subsidiary and
not
paid before the Closing Date or accrued on the Closing Balance
Sheet
less the actual amount of Company Debt, in each case as
reflected in
the Closing Balance Sheet, is greater than (B) the Reference
Date
Amount (such difference, the "Closing Amount Excess"), Parent
shall
pay to the Shareholders' Agent for the benefit of the
Company
Shareholders the full amount of the Closing Amount Excess by
wire
transfer of immediately available funds no later than five
(5)
Business Days after the date on which the Closing Reference
Amount
is finally determined to a bank account designated by the
Shareholders' Agent for the benefit of the Company
Shareholders.
(ii) In the event that (A) the Closing Reference
Amount plus the actual amount of Company Cash less the actual
amount
of Transaction Expenses incurred by the Company or any
Company
Subsidiary and not paid before the Closing Date or accrued on
the
Closing Balance Sheet less the actual amount of Company Debt,
in
each case as reflected in the Closing Balance Sheet is less than
(B)
the Reference Date Amount (the absolute value of such
difference,
the "Closing Amount Deficiency"), the Shareholders' Agent shall
pay
to Parent the full amount of the Closing Amount Deficiency out
of
immediately available funds by wire transfer no later than five
(5)
Business Days after the date on which Closing Reference Amount
is
finally determined to a bank account designated by Parent.
(iii) Any amount paid in accordance with this
Section 2.8(d) shall bear interest from the Closing Date through
but
excluding the date of payment, at the rate of the
three-month
treasury rate as published in The Wall Street Journal from time
to
time during such period. Such interest shall accrue daily on
the
basis of a 365-day year.
Section 2.9 Effect on Capital Stock
(a) Conversion of Stock. Except as provided in Section
2.9(c) and Section 2.9(d) and subject to the terms and
conditions of this
Agreement and the Certificate of Merger as of the Effective
Time, by virtue
of the Merger and without any action on the part of any of the
parties hereto
or any Company Shareholder, all shares of Company Capital Stock
issued and
outstanding immediately prior to the Effective Time shall be
converted into
the right to receive the Aggregate Consideration, to be
allocated among the
Company Shareholders in accordance with the Final Conversion
Schedule.
(b) Capital Stock of Merger Sub. As of the Effective Time,
by virtue of the Merger and without any action on the part of
any of the
parties hereto or any holder of securities of Merger Sub, each
share of
common stock, par value $0.01 per share, of Merger Sub issued
and outstanding
immediately prior to the Effective Time shall be converted into
and exchanged
for one validly issued, fully paid and nonassessable share of
common stock of
the Surviving Corporation. As of the Effective Time, each stock
certificate
of Merger Sub evidencing ownership of any such shares of common
stock shall
evidence ownership of such shares of capital stock of the
Surviving
Corporation.
(c) Dissenters' Rights. Notwithstanding any provision of
this Agreement to the contrary and to the extent available under
the MGBCL,
shares of Company Capital Stock that are issued and outstanding
immediately
prior to the Effective Time and that are held by any Company
Shareholder who
is entitled to exercise, and properly exercises, dissenter's
rights with
respect to such Company Capital Stock (the "Dissenting Shares")
pursuant to,
and who complies in all respects with, the provisions of Section
351.455 of
the MGBCL, shall not be converted into, exchangeable for or
represent the
right to receive, such Company Shareholder's Proportionate Share
of the
Aggregate Consideration. Any such Company Shareholder (each a
"Dissenting
Shareholder") shall instead be entitled to receive payment of
the fair value
of such Company Shareholder's Dissenting Shares from the
Surviving
Corporation in accordance with the provisions of the MGBCL;
provided,
however, that all Dissenting Shares held by any Company
Shareholder who shall
have failed to perfect or who otherwise shall have withdrawn, in
accordance
with the MGBCL, or lost such Company Shareholder's rights to
demand an
appraisal and payment in respect of such Company Shares under
the MGBCL,
shall thereupon be deemed to have been converted into, and to
have become
exchangeable for, as of the Effective Time, the right to receive
such Company
Shareholder's Proportionate Share of the Aggregate
Consideration, without any
interest thereon, upon surrender or delivery, as applicable, of
the ownership
evidence that formerly evidenced such Company Shares. The
Company, Parent
and the Surviving Corporation shall give the Shareholders' Agent
(i) prompt
notice of any demands received by such Person for payment for
Dissenting
Shares, withdrawals of such demands and any other instruments,
notices or
other documents served pursuant to the MGBCL with respect
thereto, and (ii)
the opportunity, pursuant to Section 10.8 (treating such demands
as Third
Party Claims), to control and direct all negotiations and
proceedings with
respect to any such demands for payment under the MGBCL.
(d) Cancellation of Company Capital Stock Owned by Parent or
the Company. As of the Effective Time, by virtue of the Merger
and without
any action on the part of any of the parties hereto or any
Company
Shareholder, all shares of Company Capital Stock that are owned
by the
Company as treasury stock and each share of Company Capital
Stock owned by
Parent or any direct or indirect wholly owned Subsidiary of
Parent or of the
Company immediately prior to the Effective Time shall be
canceled and
extinguished without any conversion thereof.
Section 2.10 Escrow Amount and Shareholders' Escrow Amount
(a) At the Closing, Parent shall pay by wire transfer of
immediately available funds into the Escrow Account the Escrow
Amount to be
held in escrow and disbursed by the Escrow Agent pursuant to the
escrow
agreement (the "Escrow Agreement") to be entered into prior to
Closing in a
form reasonably satisfactory to Parent, the Company and the
Escrow Agent.
The fees of the Escrow Agent shall be borne equally by Parent
and the
Shareholders' Agent, on behalf of the Company Shareholders. The
Company
Shareholders shall be entitled to receive the accretions and
other earnings
in the Escrow Account. Any Taxes in respect of the accretions
and other
earnings in the Escrow Account shall be borne by the Company
Shareholders.
(b) At the Closing, Parent shall pay by wire transfer of
immediately available funds into the Shareholders' Escrow
Account the
Shareholders' Escrow Amount to be held in escrow and disbursed
pursuant to
the Shareholders' Escrow Agreement.
Section 2.11 Surrender of Certificates
(a) Exchange Procedures. At the Closing, each holder of
record of a Company Certificate may surrender or cause to be
surrendered to
Parent the Company Certificate(s) held by such holder (including
by
attestation in the case of book-entry shares), together with a
duly completed
and validly executed letter of transmittal in such form as
Parent reasonably
may request (which form shall bind each Company Shareholder to
the terms of
this Agreement, including those set forth in ARTICLE X). In
exchange
therefor, at the Closing, Parent shall (x) deliver to each
Pre-Qualified
Company Shareholder whose aggregate portion of the Closing
Amount is in
excess of or equal to One Million Dollars ($1,000,000), by wire
transfer of
immediately available funds to the corresponding account
designated in the
Final Conversion Schedule and (y) deliver at the location of the
Closing for
the benefit of each Pre-Qualified Company Shareholder whose
aggregate portion
of the Closing Amount is less than One Million Dollars
($1,000,000), a
cashier's check in the amount of the Closing Amount that such
Pre-Qualified
Company Shareholder shall have the right to receive, as set
forth in the
Final Conversion Schedule, and the Company Certificate so
surrendered shall
forthwith be cancelled. With respect to each Company Shareholder
who is not
a Pre-Qualified Company Shareholder and each Pre-Qualified
Company
Shareholder who does not surrender or cause to be surrendered
its Company
Certificate and letter of transmittal at the Closing, Parent
shall pay at the
Closing by wire transfer of immediately available funds into an
account
designated by the Paying Agent the Closing Amount less any
amounts paid to
the Pre-Qualified Company Shareholders who surrendered their
Company
Certificates and letter of transmittal at the Closing. Any cash
deposited
with the Paying Agent shall hereinafter be referred to as the
"Payment Fund".
The Paying Agent shall invest the cash included in the Payment
Fund on a
daily basis as directed by Parent pending payment thereof by the
Paying Agent
to the Company Shareholders who have not surrendered their
certificates at
the Closing. Earnings from such investments shall become part of
the Payment
Fund, and any amounts in excess of the amounts payable to the
Company
Shareholders who have not previously surrendered their
certificates and
received payment in exchange thereof pursuant to this ARTICLE II
shall be
promptly paid to Parent. The Surviving Corporation shall cause
the Paying
Agent to mail to any holder of record of a Company Certificate
who has not
surrendered such holder's Company Certificate(s) at the Closing
(i) a letter
of transmittal (which shall specify that delivery shall be
effected and risk
of loss and title to the Company Certificates shall pass only
upon receipt of
the Company Certificates by the Paying Agent and which shall be
in such form
and have such other provisions as Parent may reasonably specify)
and (ii)
instructions for effecting the surrender of the Company
Certificates in
exchange for the amount of the Closing Amount that such holder
has the right
to receive as set forth on the Final Conversion Schedule. Upon
surrender of
a Company Certificate for cancellation to the Paying Agent,
together with
such letter of transmittal, duly completed and validly executed
in accordance
with the instructions thereto, the holder of such Company
Certificate shall
be entitled to receive in exchange therefor from the Payment
Fund a cashier's
check or wire transfer in the amount of the Closing Amount that
such holder
has the right to receive as set forth on the Final Conversion
Schedule, and
the Company Certificate so surrendered shall forthwith be
canceled. Until
surrendered in accordance with this Section 2.11(a), each
outstanding Company
Certificate will be deemed from and after the Effective Time,
for all
corporate purposes, to evidence only the right to receive such
portion of the
Aggregate Consideration as set forth on the Final Conversion
Schedule without
interest.
(b) Conversion Schedule. No later than five (5) Business
Days prior to the expected Closing Date, the Company shall
deliver to Parent
a schedule showing, as of the Closing Date, (i) the number and
class of
shares of Company Capital Stock held by each Company
Shareholder; (ii) the
allocation of the Closing Amount among the Company Shareholders;
(iii) the
Proportionate Share of each Company Shareholder and (iv) (y) a
definitive
list of those Company Shareholders (the "Pre-Qualified Company
Shareholders")
who, prior to delivery of such schedule, have tendered to
counsel for the
Company with instructions to deliver to Parent at Closing a duly
completed
and validly executed letter of transmittal (in such form as
Parent shall
reasonably request) and the Company Certificates held by such
Company
Shareholder (including by attestation in the case of book-entry
shares), and
(z) account wiring instructions for Parent's payment of each
such Pre-
Qualified Company Shareholder's Proportionate Share of the
Closing Amount
(the "Final Conversion Schedule"). The parties hereto agree that
each of the
Parent and the Paying Agent shall be entitled to rely upon the
Final
Conversion Schedule without independent verification in
connection with
payments to be made hereunder
(c) No Liability. Notwithstanding anything to the contrary
in this Section 2.11, neither the Surviving Corporation, the
Paying Agent nor
any party hereto shall be liable to any Person for any amount
properly paid
to a public official pursuant to any applicable abandoned
property, escheat
or similar Law.
(d) Dissenting Shares. The provisions of this Section 2.11
shall also apply to Dissenting Shares that lose their status as
such, except
that the obligations of Parent under this Section 2.11 shall
commence on the
date of loss of such status and the holder of such shares shall
be entitled
to receive in exchange for such shares the portion of the
Aggregate
Consideration to which such holder is entitled pursuant to this
ARTICLE II.
Section 2.12 No Further Ownership Rights in Company Capital
Stock
No later than two (2) Business Days prior to the expected
Closing
Date, the stock transfer books of the Company shall be closed
and thereafter
there shall be no further registration of transfers of any
shares of Common
Stock on the records of the Company. From and after the
Effective Time, the
holders of Company Certificates evidencing ownership of shares
of Company
Capital Stock outstanding immediately prior to the Effective
Time shall cease
to have any rights with respect to such shares, except as
otherwise provided
for herein or by applicable Law. If, after the Effective Time,
Company
Certificates are presented to the Paying Agent, Parent or the
Surviving
Corporation for any reason, they shall be canceled and exchanged
as provided
in this ARTICLE II.
Section 2.13 Lost, Stolen or Destroyed Certificates
In the event that any Company Certificates shall have been
lost,
stolen or destroyed, the Parent shall cause the Paying Agent to
pay in
exchange for such lost, stolen or destroyed Company
Certificates, upon the
making of an affidavit of that fact by the holder thereof, such
payment of
Aggregate Consideration as may be required pursuant to this
ARTICLE II;
provided, however, that Parent may, in its discretion and as a
condition
precedent to the issuance thereof, require the owner of such
lost, stolen or
destroyed Company Certificates to deliver a bond in such sum as
it may
reasonably direct as indemnity against any claim that may be
made against
Parent, the Paying Agent or the Surviving Corporation with
respect to the
Company Certificates alleged to have been lost, stolen or
destroyed.
Section 2.14 Taking of Necessary Action; Further Action
If, at any time after the Effective Time, any further action
is
necessary or desirable to carry out the purposes of this
Agreement and to
vest the Surviving Corporation with full right, title and
possession to all
assets, property, rights, privileges, powers and franchises of
the Company,
the officers and directors of Parent, the Company and the
Surviving
Corporation are fully authorized in the name of their respective
corporations
to take, and may take, all such lawful and necessary action, so
long as such
action is not prohibited by this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY
On or before August 3, 2007 (the "Disclosure Schedule
Delivery
Date"), the Company shall deliver to Parent the Company
disclosure schedule
(the "Company Disclosure Schedule"). Except as disclosed in that
section of
the Company Disclosure Schedule corresponding to the Section of
this
Agreement to which the following representations or warranties
pertain, each
of the Company and each Principal Shareholder jointly and
severally
represents and warrants to Parent as of the Disclosure Schedule
Delivery Date
and as of the Closing Date as follows:
Section 3.1 Organization, Standing and Power
Each of the Company and its Subsidiaries is a corporation or
other
organization duly organized, validly existing and in good
standing under the
Laws of the jurisdiction of its incorporation or organization
and each has
the requisite power and authority to own, lease and operate its
properties
and to carry on its business as currently conducted, except for
such failures
as would not reasonably be expected to be material to any of the
Company or
its Subsidiaries. Each of the Company and its Subsidiaries is
duly qualified
to do business as a foreign corporation and is in good standing
in every
jurisdiction where the properties, owned, leased or operated, or
the business
conducted by it requires such qualification, except for such
failures as
would not reasonably be expected to be material to any of the
Company or its
Subsidiaries. The Company has made available to Parent (i) a
true and
correct copy of the Company Articles and Company Bylaws, each as
amended to
date (collectively, the "Company Governing Documents") and (ii)
the charter
and by-laws, or like organizational documents (collectively,
"Subsidiary
Governing Documents"), of each Company Subsidiary, and each such
instrument
is in full force and effect. The Company is not in violation of
any of the
provisions of the Company Governing Documents and each Company
Subsidiary is
not in violation of its respective Subsidiary Governing
Documents, except for
such violations as would not reasonably be expected to be
material to the
Company or such Company Subsidiary, as the case may be.
Section 3.2 Subsidiaries
(a) Section 3.2(a)(i) of the Company Disclosure Schedule
sets forth the name of each Company Subsidiary (each a "Company
Subsidiary"
and collectively, the "Company Subsidiaries"). The Company is
the direct or
indirect owner of all of the outstanding shares of capital stock
of, or other
equity or voting interests in, each Company Subsidiary and all
such shares
have been duly authorized, validly issued and are fully paid
and
nonassessable, free and clear of all Liens and restrictions
imposed by
applicable securities laws. Notwithstanding (x) anything to the
contrary
contained herein or in Section 3.2(a)(i) of the Company
Disclosure Schedule
and (y) any Contract in respect of the Mexican Subsidiaries to
which the
Company is party, except as set forth in Section 3.2(a)(ii) of
the Company
Disclosure Schedule the Company is the beneficial owner of all
of the
outstanding shares of capital stock of, or other equity or
voting interests
in, the Mexican Subsidiaries and has the right to receive all
profits and
distributions from the Mexican Subsidiaries. Other than the
Company
Subsidiaries, neither the Company nor any Company Subsidiary
owns any capital
stock of, or other equity or voting interests of any nature in,
or any
interest convertible, exchangeable or exercisable for, capital
stock of, or
other equity or voting interests of any nature in, any other
Person.
(b) In addition to the Company Subsidiaries set forth in
Section 3.2(a) of the Company Disclosure Schedule, the Company
is the direct
or indirect owner of 10,602,752 shares of the Series NN stock of
Soluciones
Internacionales de Transporte, S.A. de C.V. ("Sitran"), and such
shares have
been duly authorized, validly issued and are fully paid and
nonassessable,
free and clear of all Liens and restrictions imposed by
applicable securities
laws. The Company-held shares in Sitran represent forty-nine and
nine-tenths
percent (49.9 %) of the outstanding capital stock of Sitran, and
the
remaining fifty and one-tenth percent (50.1%) of the outstanding
capital
stock is held by Mexican entities as set forth in Section
3.2(b)(i) of the
Company Disclosure Schedule. Except as set forth in Section
3.2(b)(ii) of
the Company Disclosure Schedule, Sitran (i) has obtained a
permit to issue
and subscribe shares of "neutral capital" from the General
Bureau of Foreign
Investment and (ii) has obtained a permit to render the Federal
Service of
Freight Transportation (the Servicio de Autotransporte Federal
de Carga).
Further, the holder of shares of the Series NN stock of Sitran
is able to
transfer its Series NN shares without restriction after proper
notice has
been given to the General Bureau of Foreign Investment in
accordance with
Sitran's By-laws. The Company has made available to Parent a
copy of
Sitran's By-laws, which have been approved by both the General
Bureau of
Foreign Investment and by the General Direction of Federal
Transportation
(Direccion General de Autotransporte Federal). Section
3.2(b)(ii) of the
Company Disclosure Schedule sets forth as complete list of the
material
contracts to which Sitran is a party.
Section 3.3 Capitalization; Title to the Shares
(a) The authorized capital stock of the Company consists of
15,000,000 shares of Common Stock. As of the date hereof, (i)
6,007,212
shares of Common Stock are issued and outstanding; (ii) no
shares of Common
Stock are reserved for issuance under the TRI 2004 Management
Stock Incentive
Plan (the "Stock Incentive Plan") and (iii) 441,537 shares of
Common Stock
are outstanding pursuant to stock grants under the Stock
Incentive Plan.
42,196 shares of Company Capital Stock are issued and held in
the treasury of
the Company. No shares of Company Capital Stock are owned or
held by any
Company Subsidiary. As of the Closing, the issued and
outstanding Company
Capital Stock shall be as set forth in the certificate to be
delivered by the
Chief Executive Officer of the Company pursuant to Section
8.3(b). All of
the outstanding shares of Company Capital Stock are duly
authorized, validly
issued, fully paid and non-assessable.
(b) Except as set forth in Section 3.3(a), (i) there are no
shares of capital stock or any other securities of the Company
authorized,
issued or outstanding; (ii) there are no existing options,
warrants, calls,
preemptive rights, Indebtedness having general voting rights or
debt
convertible into securities having such rights ("Voting Debt")
or
subscriptions or other rights, agreements, arrangements or
commitments of any
character (including any shareholder rights plan or similar plan
commonly
referred to as a "poison pill"), relating to the issued or
unissued capital
stock of the Company obligating the Company to issue, transfer
or sell or
cause to be issued, transferred or sold any shares of capital
stock or Voting
Debt of, or other equity interest in, the Company or securities
convertible
into or exchangeable for such shares or equity interests, or
obligating the
Company to make any payment linked to the value of the Company
Capital Stock
or the sale price of the Company, or obligating the Company to
grant, extend
or enter into any such option, warrant, call, subscription or
other right,
agreement, arrangement or commitment; and (iii) there are no
outstanding
contractual obligations of the Company to repurchase, redeem or
otherwise
acquire the Common Stock, or other capital stock of the Company
or to provide
funds to make any investment (in the form of a loan, capital
contribution or
otherwise) in any other entity.
(c) There are no voting trusts or other agreements or
understandings to which the Company is a party with respect to
the voting of
the Company Capital Stock.
(d) As of the date hereof, Section 3.3(d) of the Company
Disclosure Schedule sets forth a true, complete and correct list
of each
holder of record of Common Stock and the number of such
securities owned by
each such holder.
Section 3.4 Authority
(a) The Company has the requisite corporate power and
authority to enter into this Agreement and to consummate the
transactions
contemplated hereby. The execution and delivery of this
Agreement and the
consummation of the transactions contemplated hereby have been
duly
authorized by all necessary corporate action on the part of the
Company.
This Agreement has been duly executed and delivered by the
Company and
constitutes the valid and binding obligations of the Company
enforceable
against the Company in accordance with its terms, except to the
extent that
enforceability may be limited by the effect, if any, of any
applicable
bankruptcy, reorganization, insolvency, moratorium or other laws
affecting
the enforcement of creditors' rights generally or any general
principles of
equity, regardless of whether such enforceability is considered
in a
proceeding at Law or in equity. Neither the execution and
delivery by the
Company of this Agreement nor the consummation of the
transactions
contemplated hereby will conflict with, or result in any breach
or violation
of, or default under (with or without notice or lapse of time,
or both), or
give rise to a right of termination, cancellation or
acceleration of any
obligation or loss of any benefit under (i) any provision of the
Company
Governing Documents or any Subsidiary Governing Documents, (ii)
any Contract
to which the Company or any Company Subsidiary is a party or to
which any of
its properties or assets are bound or (iii) any permit,
authorization,
concession, franchise, license, writ, judgment, order, decree,
statute, Law,
ordinance, rule or regulation applicable to the Company or any
Company
Subsidiary or any of their respective properties or assets,
except, with
respect to clauses (ii) and (iii), for any such conflicts,
breaches,
violations or defaults which, individually or in the aggregate,
would not
reasonably be expected to be material to the Company and its
Subsidiaries.
(b) No notice to, filing with, and no permit, authorization,
consent or approval of, any Governmental Entity, or any other
Person is
necessary for the execution and delivery of this Agreement by
the Company or
the consummation of the transactions contemplated by this
Agreement, except
for (i) the filing and recordation of the Articles of Merger in
accordance
with the requirements of the MGBCL, (ii) the filing of the
Notification and
Report Forms with the United States Federal Trade Commission
("FTC") and the
Antitrust Division of the United States Department of Justice
("DOJ")
required by the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as
amended, and the rules and regulations promulgated thereunder
("HSR Act") and
the expiration or termination of the applicable waiting period
under the HSR
Act and such consents, waivers, approvals, orders,
authorizations,
registrations, declarations and filings as may be required under
the foreign
merger control regulations identified in Section 3.4(b) of the
Company
Disclosure Schedule, (iii) any applicable requirements of the
Federal Motor
Carrier Safety Administration ("FMCSA") or of any state with
respect to the
licensing or registration of motor carriers, which consents,
approvals,
authorizations, permits, filings and notifications are set forth
in Section
3.4(b) of the Company Disclosure Schedule, (iv) the affirmative
vote of
Company Shareholders owning at least 66 2/3 % of the outstanding
shares of
Company Capital Stock in favor of the Merger at a meeting of
Company
Shareholders (the "Requisite Shareholder Approval") and (v) any
such notice,
filing, permit, authorization, consent or approval, the absence
of which
would, individually or in the aggregate, reasonably be expected
to be
material to the Company and its Subsidiaries.
Section 3.5 Financial Statements
Attached hereto as Section 3.5 of the Company Disclosure
Schedule
are true and correct copies of the Financial Statements. The
Financial
Statements have been prepared in accordance with GAAP
consistently applied
throughout the periods involved and present fairly, in all
material respects,
the consolidated financial condition and the consolidated
results of
operations and cash flows for such periods of the Company and
its
Subsidiaries, in each case in accordance with GAAP, subject in
the case of
the Interim Financial Statements to normal year-end adjustments.
The Company
does not intend to correct or restate, and to the Company's
Knowledge, there
is not any basis to correct or restate any of the Financial
Statements. The
Company has not had any material dispute with any of its
auditors regarding
accounting matters or policies during any of its past three (3)
full fiscal
years or during the current fiscal year-to-date. The books and
records of
the Company and each Company Subsidiary have been, and are
being, maintained
in accordance with applicable legal and accounting requirements,
and the
Financial Statements are consistent with such books and records.
Neither the
Company nor any of the Company Subsidiaries is a party to, or
has any
commitment to become a party to, any joint venture, off-balance
sheet
partnership or any similar off-balance sheet Contract relating
to any
transaction or relationship between or among the Company or any
Company
Subsidiary, on the one hand, and any unconsolidated affiliate,
including any
structured finance, special purpose or limited purpose Person,
on the other
hand, or any "off-balance sheet arrangements" (as defined in
Item 303(a) of
Regulation S-K promulgated by the United States Securities and
Exchange
Commission). All transactions between the Company or any Company
Subsidiary,
on the one hand, and any Company Subsidiary on the other hand,
have been
properly disclosed on the Financial Statements and are
segregated from trade
receivables due from, and payables owed to, unrelated
parties.
Section 3.6 Absence of Certain Changes
Except as and to the extent set forth in the Financial
Statements
made available to Parent on or before the Disclosure Schedule
Delivery Date,
from the date of the Annual Financial Statement for the fiscal
year ended
December 31, 2006 to the date of this Agreement, the Company has
conducted,
and has caused each of its Subsidiaries to conduct, its business
in the
ordinary course consistent with past practice, and has not, and
has caused
each of its Subsidiaries to not have:
(a) suffered any Material Adverse Effect or suffered an
event
or circumstance that is likely to result in a Material Adverse
Effect;
(b) incurred any material liabilities or obligations
(absolute, accrued, contingent or otherwise), except for (i)
liabilities or
obligations incurred in the ordinary course of business,
consistent with past
practice or (ii) Transaction Expenses that have been paid by the
Company or
will be deducted from the Closing Amount, or increased any bad
debt,
contingency or other reserves;
(c) changed any assumptions underlying or methods of
calculating any bad debt, contingency or other reserves;
(d) paid, discharged or satisfied any material claims,
liabilities or obligations (absolute, accrued, contingent or
otherwise) other
than the payment, discharge or satisfaction in the ordinary
course of
business, consistent with past practice in respect of (i)
claims, liabilities
and obligations reflected or reserved against in the Interim
Balance Sheet or
any Monthly Financial Statement delivered on or before the
Disclosure
Schedule Delivery Date and (ii) claims, liabilities and
obligations between
(x) the last day of the period covered by the last Monthly
Financial
Statement delivered on or before the Disclosure Schedule
Delivery Date and
(y) the date hereof;
(e) permitted or allowed any of its properties or assets
(real, personal or mixed, tangible or intangible) to be
subjected to any
Liens other than Permitted Liens;
(f) written down or written off as uncollectible any notes
or
accounts receivable, except for write-downs and write-offs (x)
in the
ordinary course of business, consistent with past practice and
(y) not
exceeding One Hundred Thousand Dollars ($100,000) individually
or Five
Hundred Thousand Dollars ($500,000) in the aggregate;
(g) cancelled any material debts or cancelled, compromised,
waived or released any material claims or rights, other than (x)
in the
ordinary course of business, consistent with past practice and
(y) not
exceeding One Hundred Thousand Dollars ($100,000) individually
or Five
Hundred Thousand Dollars ($500,000) in the aggregate;
(h) sold, transferred, assigned or otherwise disposed of any
of its material properties or assets (real, personal or mixed,
tangible or
intangible), except for the disposal of rolling stock assets in
the ordinary
course of business, consistent with past practice;
(i) disposed of or permitted to lapse any rights to the use
of
any Intellectual Property, or disposed of or disclosed to any
Person other
than representatives of the Parent or pursuant to the terms of
a
nondisclosure agreement any trade secret, formula, process or
know-how or
other Intellectual Property not theretofore a matter of public
knowledge;
(j) increased (x) in any manner the compensation or benefits
of any current or former director or officer of the Company or
any Company
Subsidiary or (y) in any material manner the compensation or
benefits of any
current or former employee or consultant of the Company or any
Company
Subsidiary (including in the case of clauses (x) and (y) any
such increase
pursuant to any bonus, pension, profit sharing, incentive
compensation or
other plan, program, agreement or commitment) or increased in
any manner the
compensation or benefits payable or to become payable to any
current or
former director, officer, employee or consultant of the Company
or any
Company Subsidiary, except, in the case of current employees
other than
officers of the Company or any Company Subsidiary, as the case
may be, for
such increases in compensation or benefits made in the ordinary
course of
business, consistent with past practice;
(k) adopted, entered into or amended any bonus, pension,
profit sharing, incentive compensation, employment, consulting,
severance,
termination, deferred compensation or other plan, program,
agreement or
commitment, other than as required pursuant to applicable Law,
or made any
change in any severance or termination plan, policy or
practices;
(l) entered into any material operating lease or operating
license for property or assets;
(m) made capital expenditures or commitments or acquired any
property, plant and equipment that would be treated as a capital
expenditure
in accordance with GAAP for a cost in excess of an aggregate
amount of Five
Million Dollars ($5,000,000);
(n) declared, paid or set aside for payment any dividend or
other distribution in respect of its capital stock or redeemed,
purchased or
otherwise acquired, directly or indirectly, any shares of
capital stock or
other securities of the Company or any Company Subsidiary, other
than in the
ordinary course of business consistent with past practice and
which shall be
paid in full before the Closing Date;
(o) paid, loaned or advanced any material amount to, or
sold,
transferred or leased any material properties or assets (real,
personal or
mixed, tangible or intangible) to, or entered into any agreement
or
arrangement with, any of its employees, officers, directors or
shareholders
or any affiliate or associate of any of its employees, officers,
directors or
shareholders (except for directors' fees and compensation to
officers at
rates not inconsistent with the Company's past practice and
reimbursements in
connection with business related travel) and advances to
employees;
(p) introduced any change with respect to its operation or
its
business which change could reasonably be expected to have a
material
negative impact on its results of operations;
(q) amended, modified or terminated any Material Contract,
other than in the ordinary course of business, consistent with
past practice;
(r) made any investment in or acquired the securities of any
other Person or acquired the assets of any other Person
involving, in the
case of assets, an amount in excess of Two Hundred Fifty
Thousand Dollars
($250,000) for any single transaction or One Million Dollars
($1,000,000) in
the aggregate;
(s) other than in the ordinary course of business consistent
with past practice (i) delayed or postponed the payment of
accounts payable
or other liabilities, (ii) requested or sought acceleration of
accounts
receivable, or (iii) changed its cash management practices;
(t) experienced any damage, destruction or loss (whether or
not covered by insurance) to or of any property or affecting any
of its
assets, other than damage, destruction or loss to or of rolling
stock in an
aggregate amount consistent with the aggregate amount of damage,
destruction
or loss to or of rolling stock experienced over similar periods
of time in
the ordinary course of business and consistent with past
practice;
(u) made any offers, outside of the ordinary course of
business consistent with past practice, to customers to pay
material
incentives, or actually paid material incentives, to such
customers in order
to induce them to use any services;
(v) received resignations of, or terminated, any Key
Employee, officer or manager,
(w) reduced the number of drivers or seated trucks as at the
date of the Annual Financial Statement for the fiscal year ended
December 31,
2006 by more than five percent (5%) in the case of drivers or
five percent
(5%) in the case of seated trucks;
(x) entered into, or modified the terms of, any material
employment agreement or collective bargaining agreement or
similar agreement;
or
(y) agreed, whether in writing or otherwise, to take any
action described in this Section 3.6.
Section 3.7 Absence of Undisclosed Liabilities
Except (i) as disclosed on the Interim Balance Sheet or
Monthly
Financial Statements delivered on or before the Disclosure
Schedule Delivery
Date, (ii) liabilities and obligations incurred since the date
of the Interim
Balance Sheet in the ordinary course of business, consistent
with past
practice that would not reasonably be expected to be material to
the Company
and the Company Subsidiaries and (iii) Transaction Expenses that
have been
paid by the Company or will be deducted from the Closing Amount,
neither the
Company nor any Company Subsidiary has any liabilities. There
are no off
balance sheet arrangements to which the Company or any Company
Subsidiary is
a party or otherwise involving the Company or any Company
Subsidiary.
Neither the Company nor any Company Subsidiary has any
Indebtedness.
Section 3.8 Litigation
As of the Disclosure Schedule Delivery Date, there is no private
or
governmental action, suit, proceeding, inquiry, claim,
arbitration or
investigation pending before any agency, court, tribunal, or
other
Governmental Entity, against the Company or any Company
Subsidiary, any of
their respective properties or any of their respective officers
or directors
(in their capacities as such). Since the Disclosure Schedule
Delivery Date,
there is no private or governmental action, suit, proceeding,
inquiry, claim,
arbitration or investigation pending before any agency, court,
tribunal, or
other Government Entity, against the Company or any Company
Subsidiary, any
of their respective officers or directors (in their capacities
as such) that
(x) involves any allegation of criminal law, (y) if finally
adversely
determined would reasonably be expected to be material to the
Company and the
Company Subsidiaries, or (z) questions or challenges the
validity of this
Agreement or any of the transactions contemplated hereby. To the
Company's
Knowledge, there is no private or governmental action, suit,
proceeding,
inquiry, claim, arbitration or investigation threatened against
the Company
or any Company Subsidiary, or any of their respective officers
or directors
(in their capacities as such) that (x) involves any allegations
of criminal
law, (y) if finally adversely determined would reasonably be
expected to be
material to the Company and the Company Subsidiaries, or (z)
questions or
challenges the validity of this Agreement or any of the
transactions
contemplated hereby. To the Company's Knowledge, there is no
valid basis for
any such action, suit, proceeding, claim, arbitration or
investigation which
questions or challenges the validity of this Agreement or any of
the
transactions contemplated hereby. There is no judgment, decree
or order
against the Company or any Company Subsidiary or any of their
respective
directors or officers (in their capacities as such), that would
reasonably be
expected to prevent, enjoin, or materially alter or delay any of
the
transactions contemplated by this Agreement. Neither the Company
nor any
Company Subsidiary has any litigation pending against any other
party.
Section 3.9 Restrictions on Business Activities
There is no agreement, judgment, injunction, order or decree
binding upon the Company or any Company Subsidiary which has or
would
reasonably be expected to have the effect of prohibiting or
materially
impairing any acquisition of property by the Company or any
Company
Subsidiary or the conduct of business by the Company or any
Company
Subsidiary as currently conducted.
Section 3.10 Governmental Authorization
The Company and each Company Subsidiary has obtained each
material
federal, state, county, local or foreign governmental consent,
license,
permit, grant, or other authorization of a Governmental Entity
(i) pursuant
to which the Company or such Company Subsidiary, as the case may
be,
currently operates or holds any interest in any of its
properties or (ii)
that is required for the operation of the business of the
Company or such
Company Subsidiary, as the case may be, or the holding of any
such interest
((i) and (ii) are herein collectively called "Company
Authorizations"). The
Company and each Company Subsidiary has complied in all material
respects
with all Company Authorizations, and all Company Authorizations
are in full
force and effect.
Section 3.11 [Reserved]
Section 3.12 Title to Property
(a) The Company and each of its Subsidiaries has good and
marketable title to, or valid leasehold interests in, all of its
material
properties, interests in properties and assets (the "Assets")
that it
purports to own (real, personal or mixed, whether tangible or
intangible and
wherever situated, including without limitation, all Owned Real
Property and
all interests in real property held pursuant to any Lease
Agreements),
including all the properties and assets reflected on the Interim
Balance
Sheet or acquired after the date of the Interim Balance Sheet
(except for
properties, interests in properties and assets having an
aggregate book value
not in excess of One Hundred Thousand Dollars ($100,000) sold or
otherwise
disposed of since the date of the Interim Balance Sheet in the
ordinary
course of business, consistent with past practice), free and
clear of all
Liens other than Permitted Liens.
(b) All tractors and trailers owned by the Company and its
Subsidiaries (i) when construed on the whole and not
individually, are in
good operating condition and repair ordinary wear and tear
excepted, (ii)
meet all operating and safety fitness requirements of the FMCSA,
or the
corresponding requirements of the country where they operate,
when construed
on the whole and not individually, (iii) have been maintained in
material
compliance with all applicable manufacturers' warranty programs
and
requirements, and (iv) have been inspected and maintained, on a
routine
basis, in accordance with the Company's internal policies.
Neither the
Company nor any Company Subsidiary has received an
unsatisfactory or
conditional safety and fitness rating from the FMCSA or the
corresponding
authority of the country where they operate. Section 3.12(b) of
the Company
Disclosure Schedule sets forth a true and complete list of (x)
each tractor
owned by the Company and its Subsidiaries and sets forth for
each the
dispatched mileage as of the date indicated, vehicle
identification number,
make, model and book value and (y) each trailer owned by the
Company and its
Subsidiaries and sets forth for each the age, book value and
date of service.
All other property and equipment of the Company and each of its
Subsidiaries
used in the operations of the business of the Company and each
of its
Subsidiaries when construed on the whole and not individually,
are in good
operating condition and repair, subject to normal wear and tear,
are adequate
for the uses to which they are being put and have been
maintained and
serviced in accordance with prudent practice and in compliance
with all
applicable laws. All material properties used in the operations
of business
of the Company and each of its Subsidiaries are reflected in the
Interim
Balance Sheet to the extent GAAP requires the same to be
reflected.
Section 3.13 Intellectual Property
(a) Section 3.13(a) of the Company Disclosure Schedule sets
forth a true, correct, and complete list of all U.S. and foreign
(i) issued
Patents and Patent applications, (ii) Trademark registrations
and
applications, (iii) Copyright registrations and applications,
and (iv)
material Software applications used or held for use in the
business of the
Company and its Subsidiaries as currently conducted, in each
case which is
owned or purported to be owned by the Company and its
Subsidiaries. The
Company and/or its Subsidiaries is the sole and exclusive
beneficial and
record owner of all of the Intellectual Property items set forth
in Section
3.13(a)(i)-(iii) of the Company Disclosure Schedule, and the
sole and
exclusive beneficial owner of all of the Intellectual Property
items set
forth in Section 3.13(a)(iv), and, to the Knowledge of the
Company, all such
Intellectual Property is subsisting, valid, and in full force
and effect.
(b) Section 3.13(b) of the Company Disclosure Schedule sets
forth a true, correct, and complete list of all material
written, or to the
Knowledge of the Company, oral, Contracts to which the Company
or its
Subsidiaries is a party or otherwise bound (i) granting or
obtaining any
right to use any material Intellectual Property used or held for
use in the
business of the Company and the Company Subsidiaries as
currently conducted
(other than Contracts granting rights to use readily available
commercial
Software that is generally available on nondiscriminatory
pricing terms and
having an acquisition price of less than One Hundred Thousand
Dollars
($100,000) in the aggregate for all such related Contracts or
agreements) or
(ii) restricting the Company's rights, or permitting other
Persons, to use or
register any material Intellectual Property used or held for use
in the
business of the Company and the Company Subsidiaries as
currently conducted
(collectively, the "IP Contracts"). The Company and each Company
Subsidiary
has performed its material obligations under and is entitled to
all material
benefits under all IP Contracts to which it is a party, and to
the Knowledge
of the Company, is not alleged to be in default in respect of
any IP Contract
to which it is a party. Each of the IP Contracts is in full
force and
effect, and there exists no material default or event of
material default or
event, occurrence, condition or act, with respect to the Company
or any
Company Subsidiary or, to the Knowledge of the Company, with
respect to the
other contracting party, which, with the giving of notice, the
lapse of time
or the happening of any other event or conditions, would
reasonably be
expected to become a material default or event of material
default under the
terms of any IP Contract.
(c) The Company and each of its Subsidiaries own, or has a
valid right to use, free and clear of all Liens, all
Intellectual Property
used or held for use in, or necessary to conduct, the business
of the Company
and its Subsidiaries as currently conducted.
(d) The conduct of the business of the Company and its
Subsidiaries (including the products and services of the Company
and its
Subsidiaries) as currently conducted does not infringe,
misappropriate, or
otherwise violate any Person's Intellectual Property rights, and
there has
been no such claim asserted or threatened in the past three (3)
years against
the Company or any Subsidiary.
(e) To the Knowledge of the Company, no Person is
infringing, misappropriating, or otherwise violating any
Intellectual
Property owned, used, or held for use by the Company or any
Subsidiary, and
no such claims have been asserted or threatened against any
Person by the
Company or its Subsidiaries in the past three (3) years.
(f) The Company and each of its Subsidiaries take reasonable
measures to protect the confidentiality of Trade Secrets, a
component of
which is its current policy to require written acknowledgement
from its
employees of their confidentiality obligations and written
confidentiality
agreements from its vendors.
(g) No affiliate or current or former partner, director,
shareholder, officer, or employee of the Company or any
Subsidiary will, upon
giving effect to the transactions contemplated hereby, own or
retain any
rights to use any of the Intellectual Property owned and used,
or held for
use by the Company or any Subsidiary in the business of the
Company and the
Company Subsidiaries as currently conducted other than pursuant
to any
Contract with Parent or Merger Sub, or any Person affiliated
with either of
the foregoing.
(h) The consummation of the transactions contemplated by
this Agreement will not result in the loss or impairment of or
payment of any
additional amounts with respect to, nor require the consent of
any other
Person in respect of, the Company's or its Subsidiaries' right
to own, use,
or hold for use any of the material Intellectual Property as
owned, used, or
held for use in the conduct of the business of the Company and
its
Subsidiaries as currently conducted, except for such losses,
impairments, or
payments which, individually or in the aggregate, would not
reasonably be
expected to be material to the Company and its Subsidiaries.
(i) With respect to the use of the Software in the business
of the Company and its Subsidiaries as it is currently
conducted, (i) no
capital expenditures are reasonably expected to be necessary
with respect to
such use other than capital expenditures in the ordinary course
of business
that are consistent with the past practice of the Company and
its
Subsidiaries, (ii) the Company and its Subsidiaries has not
experienced any
material defects in such Software, including any material error
or omission
in the processing of any transactions other than defects which
have been
corrected and (iii) to the Knowledge of the Company, no such
Software
contains any device or feature designed to disrupt, disable, or
otherwise
impair the functioning of any Software.
(j) To the Knowledge of the Company, there have been no
unauthorized intrusions or breaches of the security of the
Company's
information technology systems. The Company and its Subsidiaries
have
implemented commercially reasonable security patches or upgrades
that are
generally available for the Company's information technology
systems in
accordance with the Company's reasonable technical and business
judgment.
(k) No claims have been asserted or threatened against the
Company or any Company Subsidiary alleging a violation of any
Person's
privacy or personal information or data rights and the
consummation of the
transactions contemplated hereby will not breach or otherwise
cause any
violation of any Law, regulation or rule, contractual
obligation, policy, or
procedure related to privacy, data protection, or the collection
and use of
personal information collected, used, or held for use by the
Company or its
Subsidiaries in the conduct of the business of the Company and
its
Subsidiaries. The Company and each of its Subsidiaries takes
reasonable
measures to ensure that such information is protected against
unauthorized
access, use, modification, or other misuse.
Section 3.14 Internal Controls
The Company and each of its Subsidiaries has established and
maintains an adequate system of internal controls over financial
reporting
and the preparation of its consolidated financial statements in
accordance
with GAAP. Neither the Company nor any Company Subsidiary nor,
to the
Company's Knowledge, the Company's independent auditors have
identified or
been made aware of any fraud (or any claim or allegation of
fraud), whether
or not material, that involves the Company's management or other
employees
who have a role in the preparation of financial statements or
the internal
controls utilized by the Company and its Subsidiaries.
Section 3.15 Environmental Matters
(a) The Company and each Company Subsidiary is in material
compliance with all Environmental Laws, which compliance
includes, but is not
limited to, the possession by the Company and each Company
Subsidiary of all
permits and other governmental authorizations required under
all
Environmental Laws, and material compliance with the terms and
conditions
thereof. Neither the Company nor any Company Subsidiary has
received any
communication (written or oral), whether from a Governmental
Entity, citizens
group, employee or otherwise, that alleges that the Company or
such Company
Subsidiary, as the case may be, is not in such material
compliance, and there
are no circumstances that may prevent or interfere with such
material
compliance in the future. All permits and other governmental
authorizations
currently held by the Company and each Company Subsidiary
pursuant to all
Environmental Laws are identified in Section 3.15 of the Company
Disclosure
Schedule.
(b) There is no Environmental Claim pending or, to the
Company's Knowledge, threatened against the Company, any Company
Subsidiary
or, to the Company's Knowledge, against any Person or entity
whose liability
for any Environmental Claim the Company or any Company
Subsidiary has
retained or assumed either contractually or by operation of Law
prior to the
Closing Date.
(c) To the Company's Knowledge, there are no past or present
actions, activities, circumstances, conditions, events or
incidents,
including, without limitation, the release, emission, discharge,
presence or
disposal of any Materials of Environmental Concern, that could
reasonably be
expected to (i) form the basis of any Environmental Claim
against the
Company, any Company Subsidiary or against any Person or entity
whose
liability for any Environmental Claim the Company or any Company
Subsidiary
has retained or assumed either contractually or by operation of
Law, or (ii)
otherwise result in any fines or liabilities or material costs
under
Environmental Law.
(d) Without in any way limiting the generality of the
foregoing, (i) all underground storage tanks, and the capacity
and contents
of such tanks, presently located on any property owned, leased
or operated at
any time by the Company or any Company Subsidiary are identified
in Section
3.15(d)(i) of the Company Disclosure Schedule, (ii) except as
disclosed on
Section 3.15(d)(i) of the Company Disclosure Schedule, to the
Knowledge of
the Company, there have been no underground storage tanks
located on any
property formerly owned, leased or operated by the Company or
any Company
Subsidiary (iii) there is and, to the Knowledge of the Company,
has been no
asbestos contained in or forming part of any building, building
component,
structure or office space owned, leased or operated at any time
by the
Company or any Company Subsidiary, and (iv) no polychlorinated
biphenyls or
polychlorinated biphenyl-containing items are or, to the
Knowledge of the
Company, have been used or stored at any property owned, leased
or operated
at any time by the Company or any Company Subsidiary.
(e) The Company has provided to Parent all assessments,
reports, data, results of investigations or audits and similar
information
that is in the possession of or reasonably available to the
Company regarding
environmental matters pertaining to the environmental condition
of the
business of the Company and each Company Subsidiary, or the
compliance (or
noncompliance) by the Company and any Company Subsidiary with
any
Environmental Laws.
(f) Neither the Company nor any Company Subsidiary is
required
by virtue of the transactions set forth herein and contemplated
hereby, or as
a condition to the effectiveness of any transactions
contemplated hereby,
(i) to perform a site assessment for Materials of Environmental
Concern,
(ii) to remove or remediate Materials of Environmental Concern,
(iii) to give
notice to or receive approval from any Governmental Entity
pursuant to any
Environmental Law, or (iv) to record or deliver to any Person or
entity any
disclosure document or statement pertaining to environmental
matters.
For purposes of this Agreement:
(1) "Environmental Claim" means any claim, action,
cause of action, suit, proceeding, investigation, order, demand
or
notice (written or oral) by any Person or entity alleging
potential
liability (including, without limitation, potential liability
for
investigatory costs, cleanup costs, governmental response costs,
natural
resources damages, property damages, personal injuries, or
penalties)
arising out of, based on or resulting from (a) the presence, or
release
into the environment, of or exposure to, any Material of
Environmental
Concern at any location whether or not owned or operated by the
Company
or any Company Subsidiary or (b) circumstances forming the basis
of any
violation, or alleged violation by the Company or any Company
Subsidiary
or any other Person or entity for whom either is legally,
contractually
or otherwise responsible, of any Environmental Law.
(2) "Environmental Laws" means all federal, state,
local and foreign laws, regulations, ordinances, requirements
of
governmental authorities, and common law relating to pollution
or
protection of human health or the environment (including,
without
limitation, ambient air, surface water, ground water, land
surface or
subsurface strata, and natural resources), including,
without
limitation, laws and regulations relating to (i) emissions,
discharges,
releases or threatened releases of, or exposure to, Materials
of
Environmental Concern, (ii) the manufacture, processing,
distribution,
use, treatment, storage, disposal, transport or handling of
Materials of
Environmental Concern, (iii) recordkeeping, notification,
disclosure and
reporting requirements regarding Materials of Environmental
Concern, and
(iv) endangered or threatened species of fish, wildlife and
plants and
the management or use of natural resources.
(3) "Materials of Environmental Concern" means
chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous
substances, petroleum and petroleum products, asbestos or
asbestos-
containing materials or products, polychlorinated biphenyls,
lead or
lead-based paints or materials, radon, fungus, mold, mycotoxins
or
similar deleterious substances.
Section 3.16 Taxes
(a) Each of the Company and each Company Subsidiary has
timely
filed all Tax Returns required to be filed by it, and all such
Tax Returns
were true, complete and correct in all respects. All Taxes
required to be
paid by the Company or any Company Subsidiary have been timely
paid other
than those currently payable without penalty or interest. Where
payment of
Taxes is not yet due, the Company or such Company Subsidiary has
established
a reserve or accrued liability for Taxes (excluding any reserve
for deferred
Taxes established to reflect a timing difference between book
and tax income)
in accordance with GAAP that is adequate to cover such Taxes.
Neither the
Company nor any Company Subsidiary has any liability for unpaid
Taxes
accruing after the date of the Interim Balance Sheet other than
unpaid Taxes
arising in the ordinary course of business. Except as otherwise
disclosed on
Section 3.16(a) of the Company Disclosure Schedule, there are
not now any
extensions of time with respect to the dates of which any Tax
Returns of the
Company or any Company Subsidiary were or are due to be
filed.
(b) There are no Liens for Taxes upon any property or assets
of the Company or any Company Subsidiary, except for Liens for
Taxes not yet
due.
(c) Neither the Company nor any Company Subsidiary has made
any change in accounting methods, received a ruling from any Tax
Authority or
signed an agreement with respect thereto or signed any closing
agreement with
respect to any Tax year.
(d) The Company and each Company Subsidiary has complied in
all respects with all applicable laws, rules and regulations
relating to the
payment and withholding of Taxes (including withholding of Taxes
pursuant to
Sections 1441 and 1442 of the Code or similar provisions under
any foreign
laws) and has, within the time and the manner prescribed by Law,
withheld and
paid over to the proper Taxing Authorities all amounts required
to be so
withheld and paid over under applicable Laws.
(e) Except as may result from the Transactions, neither the
Company nor any Company Subsidiary as of the Closing Date has
agreed nor will
be required to include in income for any period after the
Closing Date any
adjustment pursuant to Section 481(a) of the Code (or any
corresponding
provision of state, local or foreign Law) by reason of any
change in
accounting method or otherwise (nor has any Governmental Entity
proposed in
writing any such adjustment or change of accounting method).
(f) No federal, state, local or foreign Audits,
investigations
or other administrative proceedings or court proceedings are
presently
pending with regard to any Taxes or Tax Returns of the Company
or any Company
Subsidiary. A list of all Audits, examinations or investigations
commenced
or completed with respect to the Company and each Company
Subsidiary with
respect to taxable periods ending after December 31, 1999 is set
forth in
Section 3.16(f) of the Company Disclosure Schedule. No written
notification
has been received by the Company or any Company Subsidiary that
such an Audit
or other proceeding is pending or threatened with respect to any
Taxes due
from or with respect to or attributable to the Company or any
Company
Subsidiary or any Tax Return filed by or with respect to the
Company or any
Company Subsidiary, which such Audit or other proceeding has not
been fully
resolved.
(g) All Tax deficiencies that have been claimed, proposed or
asserted against the Company or any Company Subsidiary have been
fully paid
or finally settled, and no issue has been raised in any
examination by any
Tax Authority that, by application of similar principles, could
reasonably be
expected to result in the proposal or assertion of a Tax
deficiency for
another year not so examined.
(h) There are no outstanding requests, agreements, consents
or
waivers to extend the statutory period of limitations applicable
to the
assessment of any Taxes or deficiencies against the Company or
any Company
Subsidiary.
(i) No power of attorney has been granted by or with respect
to the Company or any Company Subsidiary with respect to any
matter relating
to Taxes.
(j) Neither the Company nor any Company Subsidiary is a
party
to, is bound by or has any obligation under any Tax sharing
agreement, Tax
indemnification agreement or similar Contract, and neither the
Company nor
any Company Subsidiary has any potential liability or obligation
to any
Person as a result of, or pursuant to, any such agreement or
Contract.
(k) Neither the Company nor any Company Subsidiary is nor
has
been a U.S. real property holding company (as defined in Section
897(c)(2) of
the Code) during the applicable period specified in Section
897(c)(1)(A)(ii)
of the Code.
(l) Other than any Tax Returns that have not yet been
required
to be filed, the Company has made available to Parent true,
correct and
complete copies of the United States federal income Tax Return
and any state,
local or foreign Tax Return (or, in the case of monthly and
quarterly Tax
Returns, an annual summary of such Tax Returns) for the Company
and the
Company Subsidiaries for any jurisdiction for each of the
taxable periods
ended December 31, 2002 through December 31, 2006. The Company
has delivered
or made available to the Parent complete and accurate copies of
(i) all Audit
reports, letter rulings, technical advice memoranda and similar
documents
issued by a Governmental Entity relating to the United States
federal, state,
local or foreign Taxes due from or with respect to the Company
and (ii) all
closing agreements entered into by the Company with any Tax
Authority, in
each case, existing on the date hereof.
(m) Section 3.16(m) of the Company Disclosure Schedule sets
forth all foreign, state and local jurisdictions in which the
Company or any
Company Subsidiary is or has been subject to Tax and each type
of Tax payable
in such jurisdiction during the taxable year ending December 31,
2006.
(n) Neither the Company nor any Company Subsidiary has any
liability with respect to income, franchise or similar Taxes
relating to the
operation of the Company or such Company Subsidiary prior to the
date of the
Interim Balance Sheet in excess of the amounts that are accrued
with respect
thereto and are reflected in the Interim Financial Statements,
and since the
date of the Interim Balance Sheet, neither the Company nor any
Company
Subsidiary has incurred any liability for Taxes, except with
respect to
operations in the ordinary course of business after the date of
the Interim
Balance Sheet.
(o) Neither the Company nor any Company Subsidiary has
received written notice of any claim made by a Tax
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