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Exhibit 2.1 Merger Agreement
Execution Version
AGREEMENT AND PLAN OF MERGER
among
CEVA Group Plc,
CEVA Texas Holdco Inc.,
and
EGL, Inc.
Dated as of May 24, 2007
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ARTICLE I THE MERGER
2
Section 1.1
The Merger
2
Section 1.2
Closing
2
Section 1.3
Effective Time
2
Section 1.4
Effects of the Merger
2
Section 1.5
Articles of Incorporation and Bylaws of the Surviving
Corporation
2
Section 1.6
Directors
3
Section 1.7
Officers
3
ARTICLE II CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES
3
Section 2.1
Effect on Capital Stock
3
Section 2.2
Exchange of Certificates
5
Section 2.3
Timing of Equity Rollover
7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
7
Section 3.1
Qualification, Organization, Subsidiaries, etc.
7
Section 3.2
Capital Stock.
8
Section 3.3
Subsidiaries and Joint Ventures
10
Section 3.4
Corporate Authority Relative to This Agreement; No Violation
10
Section 3.5
Reports and Financial Statements
12
Section 3.6
Internal Controls and Procedures
12
Section 3.7
No Undisclosed Liabilities
13
Section 3.8
Compliance with Law; Permits
13
Section 3.9
Environmental Laws and Regulations
14
Section 3.10
Employee Benefit Plans
15
Section 3.11
Interested Party Transactions
17
Section 3.12
Absence of Certain Changes or Events
18
Section 3.13
Investigations; Litigation
18
Section 3.14
Proxy Statement; Other Information
18
Section 3.15
Tax Matters
19
Section 3.16
Labor Matters
20
Section 3.17
Intellectual Property
21
Section 3.18
Property
21
Section 3.19
Insurance
22
Section 3.20
Opinion of Financial Advisor
22
Section 3.21
Required Vote of the Company Shareholders
22
Section 3.22
Material Contracts
22
Section 3.23
Finders or Brokers; Transaction Fees
23
Section 3.24
State Takeover Statutes; Rights Plan
24
Section 3.25
Disclaimer
24
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER
SUB
25
Section 4.1
Qualification; Organization
25
Section 4.2
Corporate Authority Relative to This Agreement; No Violation
25
Section 4.3
Proxy Statement; Other Information
26
Section 4.4
Financing
26
Section 4.5
Ownership and Operations of Merger Sub
27
Section 4.6
Finders or Brokers
27
Section 4.7
Ownership of Shares
27
Section 4.8
Certain Arrangements
27
Section 4.9
Investigations; Litigation
28
Section 4.10
No Other Information
28
Section 4.11
Access to Information; Disclaimer
28
Section 4.12
Solvency
28
ARTICLE V COVENANTS AND AGREEMENTS
29
Section 5.1
Conduct of Business by the Company and Parent
29
Section 5.2
Access to Information
33
Section 5.3
No Solicitation
34
Section 5.4
Filings; Other Actions
36
Section 5.5
Stock Options and Other Stock-Based Awards; Employee Matters
37
Section 5.6
Efforts
40
Section 5.7
Takeover Statute
42
Section 5.8
Public Announcements
42
Section 5.9
Indemnification and Insurance
42
Section 5.10
Financing
44
Section 5.11
Shareholder Litigation
46
Section 5.12
Notification of Certain Matters
46
Section 5.13
Rule 16b-3
47
Section 5.14
Rights Plan
47
Section 5.15
Acquisition of Shares
47
Section 5.16
Control of Operations
47
Section 5.17
Notes and Amounts Outstanding Under Credit Agreement.
47
Section 5.18
Non-Disparagement
48
ARTICLE VI CONDITIONS TO THE MERGER
48
Section 6.1
Conditions to Each Party’s Obligation to Effect the
Merger
48
Section 6.2
Conditions to Obligation of the Company to Effect the Merger
48
Section 6.3
Conditions to Obligation of Parent and Merger Sub to Effect the
Merger
49
Section 6.4
Frustration of Conditions
50
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ARTICLE VII TERMINATION
50
Section 7.1
Termination or Abandonment
50
Section 7.2
Termination Fee; Expenses.
52
Section 7.3
Specific Performance.
55
ARTICLE VIII MISCELLANEOUS
55
Section 8.1
No Survival of Representations and Warranties
55
Section 8.2
Expenses
55
Section 8.3
Counterparts; Effectiveness
55
Section 8.4
Governing Law
55
Section 8.5
Jurisdiction; Enforcement
56
Section 8.6
WAIVER OF JURY TRIAL
56
Section 8.7
Notices
56
Section 8.8
Assignment; Binding Effect
58
Section 8.9
Severability
58
Section 8.10
Entire Agreement; No Third-Party Beneficiaries
58
Section 8.11
Amendments; Waivers
58
Section 8.12
Headings
59
Section 8.13
Interpretation
59
Section 8.14
No Recourse
59
Section 8.15
Determinations by the Company
59
Section 8.16
Certain Definitions
60
EXHIBIT A — Term Sheet for Retention Bonus Plan
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of
May 24, 2007 (this “ Agreement ”), is among
CEVA Group Plc, a public company limited by shares incorporated
in England and Wales (“ Parent ”), CEVA Texas
Holdco Inc., a Texas corporation and a direct or indirect
wholly-owned subsidiary of Parent (“ Merger Sub
”), and EGL, Inc., a Texas corporation (the “
Company ”).
W I T N E S S E T H :
WHEREAS, the parties intend that Merger Sub be
merged with and into the Company, with the Company surviving
that merger on the terms and subject to the conditions set forth
in this Agreement (the “ Merger ”);
WHEREAS, the Board of Directors of the Company,
acting upon the unanimous recommendation of the Special
Committee, has unanimously (with abstentions)
(i) determined that it is in the best interests of the
Company and its shareholders, and declared it advisable, to
enter into this Agreement, (ii) approved the execution,
delivery and performance by the Company of this Agreement and
the consummation of the transactions contemplated hereby and
thereby, including the Merger, and (iii) resolved to
recommend approval of this Agreement by the shareholders of the
Company;
WHEREAS, the Board of Directors of Merger Sub
and Parent have each unanimously approved this Agreement and
declared it advisable for Merger Sub and Parent, respectively,
to enter into this Agreement;
WHEREAS, certain existing shareholders of the
Company may desire to contribute Shares (as hereinafter defined)
to CEVA Investments Limited immediately prior to the Effective
Time (as hereinafter defined) in exchange for common stock of
CEVA Investments Limited, of which Parent is a wholly-owned
subsidiary;
WHEREAS, the Board of Directors of the Company
(on the unanimous recommendation of the Special Committee) has
determined that the terms of this Agreement constitute a
Superior Proposal (as defined in the Agreement and Plan of
Merger by and among the Company, Talon Holdings Corp. and Talon
Acquisition Co. dated as of March 18, 2007 (the “ Talon
Merger Agreemen t”)), the Company and its Board of
Directors and the Special Committee have taken all such actions
as are necessary and proper to terminate the Talon Merger
Agreement, and the Talon Merger Agreement has been validly
terminated and is no longer in force or effect; and
WHEREAS, Parent, Merger Sub and the Company
desire to make certain representations, warranties, covenants
and agreements in connection with the Merger and the
transactions contemplated by this Agreement and also to
prescribe certain conditions to the Merger as specified
herein.
NOW, THEREFORE, in consideration of the
foregoing and the representations, warranties, covenants and
agreements contained herein, and intending to be legally bound
hereby, Parent, Merger Sub and the Company hereby agree as
follows:
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ARTICLE I
THE
MERGER
Section 1.1
The Merger
. At the Effective Time (as hereinafter
defined), upon the terms and subject to the conditions set forth
in this Agreement and in accordance with the applicable
provisions of the Texas Business Corporation Act (the “
TBCA ”) and the Texas Business Organizations Code
(the “ TBOC ”), Merger Sub shall be merged
with and into the Company, whereupon the separate corporate
existence of Merger Sub shall cease, and the Company shall
continue as the surviving company in the Merger (the “
Surviving Corporation ”) and a direct or indirect
wholly owned subsidiary of Parent.
Section 1.2
Closing
. The closing of the Merger (the “
Closing ”) shall take place at the offices of
Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New
York, New York, at 10:00 a.m., local time, on a date to be
specified by the parties (the “ Closing Date
”) which shall be no later than the fifth Business Day
after the satisfaction or waiver (to the extent permitted by
applicable Law (as hereinafter defined)) of the conditions set
forth in Article VI (other than those conditions that by
their nature are to be satisfied at the Closing, but subject to
the satisfaction or waiver of such conditions), or at such other
place, date and time as the Company and Parent may agree in
writing; provided , that at the direction of Parent the
Closing can be delayed to the last day of the then current
interest period of the Company’s floating rate senior
secured notes (the “ Notes ”) in which the
conditions set forth in Article VI would be satisfied or
waived.
Section 1.3
Effective Time
. On the Closing Date, the Company shall
cause the Merger to be consummated by executing and filing
articles of merger (the “ Articles of Merger
”) with the Secretary of State of the State of Texas in
accordance with Article 5.04 of the TBCA and Section 10.153
of the TBOC, as required. The Merger shall become
effective at such time as the Articles of Merger are duly filed
with the Secretary of State of the State of Texas and a
certificate of merger is issued by the Secretary of State of the
State of Texas, or at such later date or time as may be agreed
by Parent and the Company in writing and specified in the
Articles of Merger in accordance with the TBCA and TBOC (such
time as the Merger becomes effective is referred to herein as
the “ Effective Time ”).
Section 1.4
Effects of the Merger
. The Merger shall have the effects set
forth in this Agreement and the applicable provisions of the
TBCA and TBOC.
Section 1.5
Articles of Incorporation and Bylaws of the
Surviving Corporation
.
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(a)
The articles of incorporation of the Company, as
in effect immediately prior to the Effective Time, shall be the
articles of incorporation of the Surviving Corporation until
thereafter amended in accordance with the provisions thereof,
hereof and applicable Law, in each case consistent with the
obligations set forth in Section 5.9.
(b)
The bylaws of Merger Sub as in effect
immediately prior to the Effective Time, shall be the bylaws of
the Surviving Corporation until thereafter amended in accordance
with the provisions thereof, hereof and applicable Law, in each
case consistent with the obligations set forth in
Section 5.9.
Section 1.6
Directors
. Subject to applicable Law, the directors
of Merger Sub immediately prior to the Effective Time shall be
the initial directors of the Surviving Corporation and shall
hold office until their respective successors are duly elected
and qualified, or their earlier death, resignation or
removal.
Section 1.7
Officers
. The officers of the Company immediately
prior to the Effective Time shall be the initial officers of the
Surviving Corporation and shall hold office until their
respective successors are duly elected and qualified, or their
earlier death, resignation or removal.
ARTICLE II
CONVERSION OF SHARES; EXCHANGE OF
CERTIFICATES
Section 2.1
Effect on Capital Stock
. At the Effective Time, by virtue of the
Merger and without any action on the part of the Company, Merger
Sub or the holders of any securities of the Company or Merger
Sub:
(a)
Conversion of Company Common Stock
. Subject to Sections 2.1(b), 2.1(d) and
2.1(e), each issued and outstanding share of common stock, par
value $0.001 per share, of the Company outstanding immediately
prior to the Effective Time (such shares, collectively, “
Company Common Stock ,” and each, a “
Share ”), other than any Shares held by any direct
or indirect wholly-owned subsidiary of the Company, which Shares
shall remain outstanding except that the number of such Shares
shall be appropriately adjusted in the Merger (the “
Remaining Shares ”), any Cancelled Shares (as
defined, and to the extent provided in, Section 2.1(b)) and
any Dissenting Shares (as defined, and to the extent provided
in, Section 2.1(e)) shall thereupon be converted
automatically into and shall thereafter represent the right to
receive $47.50 in cash without any interest thereon (the “
Merger Consideration ”). All Shares that have
been converted into the right to receive the Merger
Consideration as provided in this Section 2.1 shall be
automatically cancelled and shall cease to exist, and the
holders of certificates which immediately prior to the Effective
Time
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represented such Shares shall cease to have any
rights with respect to such Shares other than the right to
receive the Merger Consideration.
(b)
Parent and Merger Sub-Owned Shares
. Each Share that is owned, directly or
indirectly, by Parent or Merger Sub immediately prior to the
Effective Time (including all Shares acquired pursuant to the
Rollover Commitments) or held by the Company immediately prior
to the Effective Time (in each case, other than any such Shares
held on behalf of third parties) (the “ Cancelled
Shares ”) shall, by virtue of the Merger and without
any action on the part of the holder thereof, be cancelled and
retired and shall cease to exist, and no consideration shall be
delivered in exchange for such cancellation and retirement;
provided that Parent may elect for any Shares acquired pursuant
to the Rollover Commitments by Parent or CEVA Investments
Limited or a subsidiary of Parent or CEVA Investments Limited to
remain outstanding, subject to appropriate adjustment, and be
deemed Remaining Shares.
(c)
Conversion of Merger Sub Common Stock
. At the Effective Time, by virtue of the
Merger and without any action on the part of the holder thereof,
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 become one validly issued,
fully paid and nonassessable share of common stock, par value
$0.001 per share, of the Surviving Corporation and shall with
the Remaining Shares constitute the only outstanding shares of
capital stock of the Surviving Corporation. From and after
the Effective Time, all certificates representing the common
stock of Merger Sub shall be deemed for all purposes to
represent the number of shares of common stock of the Surviving
Corporation into which they were converted in accordance with
the immediately preceding sentence.
(d)
Adjustments
. If at any time during the period between
the date of this Agreement and the Effective Time, any change in
the outstanding shares of capital stock of the Company, or
securities convertible or exchangeable into or exercisable for
shares of capital stock, shall occur as a result of any
reclassification, recapitalization, stock split (including a
reverse stock split) or subdivision or combination, exchange or
readjustment of shares, or any dividend or distribution of
stock, cash or property with a record date during such period,
merger, issuer tender or exchange offer, or other similar
transaction, the Merger Consideration shall be equitably
adjusted to reflect such change; provided that nothing
herein shall be construed to permit the Company to take any
action with respect to its securities that is prohibited by the
terms of this Agreement.
(e)
Dissenters’ Rights
. Notwithstanding anything in this
Agreement to the contrary, shares of Company Common Stock that
are issued and outstanding immediately prior to the Effective
Time and which are held by a shareholder who did not vote in
favor of the Merger (or consent thereto in writing) and who is
entitled to demand and properly demands the fair value of such
shares pursuant to, and who complies in all respects with, the
provisions of Articles 5.12 and 5.13 of the TBCA (the “
Dissenting Shareholders ”), shall not be converted
into or be exchangeable for the
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right to receive the Merger Consideration (the
“ Dissenting Shares ,” and together with the
Cancelled Shares, the “ Excluded Shares ”),
but instead such holder shall be entitled to payment of the fair
value of such shares in accordance with the provisions of
Articles 5.12 and 5.13 of the TBCA (and at the Effective Time,
such Dissenting Shares shall no longer be outstanding and shall
automatically be canceled and shall cease to exist, and such
holder shall cease to have any rights with respect thereto,
except the right to receive the fair value of such Dissenting
Shares in accordance with the provisions of Articles 5.12 and
5.13 of the TBCA), unless and until such holder shall have
failed to perfect or shall have effectively withdrawn or lost
rights to receive the fair value of such shares of Company
Common Stock under the TBCA. If any Dissenting Shareholder
shall have failed to perfect or shall have effectively withdrawn
or lost such right, such holder’s shares of Company Common
Stock shall thereupon be treated as if they had been converted
into and become exchangeable for the right to receive, as of the
Effective Time, the Merger Consideration for each such share of
Company Common Stock, in accordance with Section 2.1(a),
without any interest thereon. The Company shall give
Parent (i) prompt notice of any written demands to exercise
dissenter’s rights in respect of any shares of Company
Common Stock, attempted withdrawals of such demands and any
other instruments served pursuant to the TBCA and received by
the Company relating to shareholders’ dissenter’s
rights and (ii) the opportunity to participate in
negotiations and proceedings with respect to demands for fair
value under the TBCA. The Company shall not, except with
the prior written consent of Parent, voluntarily make any
payment with respect to, or settle, or offer or agree to settle,
any such demand for payment. Any portion of the Merger
Consideration made available to the Paying Agent pursuant to
Section 2.2 to pay for shares of Company Common Stock for
which dissenter’s rights have been perfected shall be
returned to Parent upon demand.
Section 2.2
Exchange of Certificates
.
(a)
Paying Agent
. At or essentially simultaneously with
the Effective Time, Parent shall deposit, or shall cause to be
deposited, with a U.S. bank or trust company that shall be
appointed by Parent and approved by the Company in writing (such
approval not to be unreasonably withheld) to act as a paying
agent hereunder (the “ Paying Agent ”), in
trust for the benefit of holders of the Shares, the Company
Stock Options (as hereinafter defined) cash in U.S. dollars
sufficient to pay (i) the aggregate Merger Consideration in
exchange for all of the Shares outstanding immediately prior to
the Effective Time (other than the Excluded Shares and the
Remaining Shares), payable upon due surrender of the
certificates that immediately prior to the Effective Time
represented Shares (“ Certificates ”) (or
effective affidavits of loss in lieu thereof) or
non-certificated Shares represented by book-entry (“
Book-Entry Shares ”) pursuant to the provisions of
this Article II and (ii) the Option Consideration (as
hereinafter defined) payable pursuant to Section 5.5 (such
cash referred to in subsections (a)(i) and
(a)(ii) being hereinafter referred to as the “
Exchange Fund ”). The Exchange Fund shall not
be used for any other purpose.
(b)
Payment Procedures
.
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(i)
As soon as reasonably practicable after the
Effective Time and in any event not later than the fifth
Business Day following the Effective Time, the Paying Agent
shall mail (x) to each holder of record of Shares whose Shares
were converted into the Merger Consideration pursuant to
Section 2.1, (A) a letter of transmittal (which shall be in
customary form and shall specify that delivery shall be
effected, and risk of loss and title to Certificates shall pass,
only upon delivery of Certificates (or effective affidavits of
loss in lieu thereof which are reasonably acceptable to Parent)
or Book-Entry Shares to the Paying Agent and shall be in such
form and have such other provisions as Parent and the Company
shall reasonably determine) and (B) instructions for use in
effecting the surrender of Certificates (or effective affidavits
of loss in lieu thereof) or Book-Entry Shares in exchange for
the Merger Consideration and (y) to each holder of a Company
Stock Option, a check in an amount due and payable to such
holder pursuant to Section 5.5 hereof in respect of such
Company Stock Option.
(ii)
Upon surrender of Certificates (or effective
affidavits of loss in lieu thereof) or Book-Entry Shares to the
Paying Agent together with such letter of transmittal, duly
completed and validly executed in accordance with the
instructions thereto, and such other documents as may
customarily be required by the Paying Agent, the holder of such
Certificates or Book-Entry Shares shall be entitled to receive
in exchange therefor a check in an amount equal to the product
of (x) the number of Shares represented by such holder’s
properly surrendered Certificates (or effective affidavits of
loss in lieu thereof) or Book-Entry Shares multiplied by (y) the
Merger Consideration. No interest will be paid or accrued
on any amount payable upon due surrender of Certificates or
Book-Entry Shares. In the event of a transfer of ownership
of Shares that is not registered in the transfer or stock
records of the Company, a check for any cash to be paid upon due
surrender of the Certificate may be paid to such a transferee if
the Certificate formerly representing such Shares is presented
to the Paying Agent, accompanied by all documents required to
evidence and effect such transfer and to evidence that any
applicable stock transfer Taxes (as hereinafter defined) have
been paid or are not applicable.
(iii)
The Surviving Corporation and the Paying Agent
shall be entitled to deduct and withhold from the consideration
otherwise payable under this Agreement to any holder of Shares
or holder of Company Stock Options such amounts as are required
to be withheld or deducted under the Internal Revenue Code of
1986 (the “ Code ”), or any provision of
federal, state, local or foreign Tax Law with respect to the
making of such payment. To the extent that amounts are so
withheld or deducted and paid over to the applicable
Governmental Entity (as hereinafter defined), such withheld or
deducted amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the Shares or
holder of the Company Stock Options in respect of which such
deduction and withholding were made.
(c)
Closing of Transfer Books
. At the Effective Time, the stock
transfer books of the Company shall be closed, and there shall
be no further registration of transfers on the stock transfer
books of the Surviving Corporation of the Shares that were
outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates or Book-Entry Shares are
presented to the Surviving Corporation or Parent for transfer,
they shall be cancelled and exchanged for a check in the proper
amount pursuant to and subject to the requirements of this
Article II.
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(d)
Termination of Exchange Fund
. Any portion of the Exchange Fund
(including the proceeds of any investments thereof) that remains
undistributed to the former holders of Shares for one year after
the Effective Time shall be delivered to the Surviving
Corporation upon demand, and any former holders of Shares who
have not surrendered their Certificates or Book-Entry Shares in
accordance with this Section 2.2 shall thereafter look only
to the Surviving Corporation for payment of their claim for the
Merger Consideration, without any interest thereon, upon due
surrender of their Certificates or Book-Entry Shares.
(e)
No Liability
. Notwithstanding anything herein to the
contrary, none of the Company, Parent, Merger Sub, the Surviving
Corporation, the Paying Agent or any other person shall be
liable to any former holder of Shares for any amount properly
delivered to a public official pursuant to any applicable
abandoned property, escheat or similar Law.
(f)
Investment of Exchange Fund
. The Paying Agent shall invest all cash
included in the Exchange Fund as reasonably directed by Parent;
provided , however , that any investment of such
cash shall be limited to direct short-term obligations of, or
short-term obligations fully guaranteed as to principal and
interest by, the U.S. government and that no such investment or
loss thereon shall affect the amounts payable to holders of
Certificates or Company Stock Options pursuant to this
Article II and Section 5.5(a). Any interest and
other income resulting from such investments shall be paid to
the Surviving Corporation pursuant to Section 2.2(d).
(g)
Lost Certificates
. In the case of any Certificate that has
been lost, stolen or destroyed, upon the making of an affidavit
of that fact by the person claiming such Certificate to be lost,
stolen or destroyed and, if required by Parent or the Paying
Agent, the posting by such person of a bond in customary amount
as indemnity against any claim that may be made against it with
respect to such Certificate, the Paying Agent will issue in
exchange for such lost, stolen or destroyed Certificate a check
in the amount of the number of Shares represented by such lost,
stolen or destroyed Certificate multiplied by the Merger
Consideration.
Section 2.3
Timing of Equity Rollover
. For the avoidance of doubt, the parties
acknowledge and agree that the contribution of Shares to Parent
pursuant to the Rollover Commitments shall be deemed to occur
prior to the Effective Time and prior to any other
above-described event.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as disclosed (i) other than with respect
to Sections 3.1(a) and 3.2(a), in the Company SEC Documents
filed on or after December 31, 2006 and prior to the date of
this Agreement (excluding any disclosures included therein to
the extent that they are cautionary, predictive or
forward-looking in nature, including those in any risk factor
section of such documents) or (ii) in the disclosure
schedule delivered by the Company to Parent immediately prior to
the execution of this Agreement (the “ Company
Disclosure Schedule ,” it being agreed that disclosure
of any item in any section of the Company Disclosure Schedule
shall also be deemed to be disclosure with respect to any other
section of this Article III to which the relevance of such item
is reasonably apparent on its face), the Company represents and
warrants to Parent and Merger Sub as follows:
Section 3.1
Qualification, Organization, Subsidiaries,
etc.
(a)
Each of the Company and its Subsidiaries is a
legal entity duly organized, validly existing and in good
standing under the Laws of its respective jurisdiction of
organization. Each of the Company and its Subsidiaries has
all requisite corporate, partnership or similar power and
authority to own, lease and operate its properties and assets
and to carry on its business as presently conducted, except
where the failure to have such power or authority would not
have, individually or in the aggregate, a Company Material
Adverse Effect.
(b)
Each of the Company and its Subsidiaries is
qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the ownership, leasing or
operation of its assets or properties or conduct of its business
requires such qualification, except where the failure to be so
qualified or in good standing would not, individually or in the
aggregate, have a Company Material Adverse Effect. The
organizational or governing documents of the Company and each of
its Subsidiaries, as previously provided to Parent, are in full
force and effect. Neither the Company nor any Subsidiary
is in violation of its organizational or governing
documents.
(c)
As used in this Agreement, any reference to any
fact, circumstance, event, change, effect or occurrence having a
“ Company Material Adverse Effect ” means any
fact, circumstance, event, change, effect or occurrence that,
individually or in the aggregate with all other facts,
circumstances, events, changes, effects or occurrences, has had
or would be reasonably likely to have a material adverse effect
on the assets, properties, business, results of operation or
financial condition of the Company and its Subsidiaries, taken
as a whole, or that would be reasonably likely to prevent or
materially delay or materially impair the ability of the Company
to perform its obligations hereunder or to consummate the Merger
or the other transactions contemplated hereby, but shall not
include (i) facts, circumstances, events, changes, effects
or occurrences generally affecting the industry in which the
Company operates or the economy or the financial or securities
markets in the United States or elsewhere in the world,
including any regulatory or political conditions or
developments, or any outbreak or escalation of
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hostilities, declared or undeclared acts of war,
terrorism or insurrection, except to the extent any fact,
circumstance, event, change, effect or occurrence that, relative
to other industry participants, disproportionately impacts the
assets, properties, business, results of operation or financial
condition of the Company and its Subsidiaries, taken as a whole,
(ii) facts, circumstances, events, changes, effects or
occurrences to the extent directly resulting from the
announcement of the execution of this Agreement or the
consummation of the transactions contemplated hereby (
provided , however , that this clause (ii) shall
not diminish the effect of, and shall be disregarded for
purposes of, any representations or warranties herein), (iii)
fluctuations in the price or trading volume of shares of Company
Common Stock; provided , that the exception in this
clause (iii) shall not prevent or otherwise affect a
determination that any fact, circumstance, event, change, effect
or occurrence underlying such fluctuation has resulted in, or
contributed to, a Company Material Adverse Effect,
(iv) facts, circumstances, events, changes, effects or
occurrences to the extent resulting from any changes in Law or
in GAAP (or the interpretation thereof) after the date hereof,
(v) any failure by the Company to meet any published
analyst estimates or expectations of the Company’s
revenue, earnings or other financial performance or results of
operations for any period or any failure by the Company to meet
its internal budgets, plans or forecasts of its revenues,
earnings or other financial performance or results of
operations; provided , that the exception in this clause
(v) shall not prevent or otherwise affect a determination that
any fact, circumstance, event, change, effect or occurrence
underlying such failure has resulted in, or contributed to, a
Company Material Adverse Effect.
Section 3.2
Capital Stock.
(a)
The authorized capital stock of the Company
consists of 200,000,000 shares of Company Common Stock and
10,000,000 shares of preferred stock, par value $0.001 per share
(“ Company Preferred Stock ”). As of
May 3, 2007, (i) 40,813,161 shares of Company Common Stock
were issued and outstanding, (ii) 5,718,606 shares of
Company Common Stock were held in treasury, (iii)(A) 1,155,779
shares of Company Common Stock were reserved for issuance under
the Circle International Group, Inc. 1994 Omnibus Equity
Incentive Plan, none of which were subject to outstanding
options issued pursuant to such plan, (B) 45,500 shares of
Company Common Stock were reserved for issuance under the Circle
International Group, Inc. 1999 Stock Option Plan, of which 1,000
shares of Company Common Stock were subject to outstanding
options issued pursuant to such plan, (C) 4,052,597 shares of
Company Common Stock were reserved for issuance under the
Company’s Long Term Incentive Plan, of which 1,528,271
shares of Company Common Stock were subject to outstanding
options issued pursuant to such plan, (D) 157,203 shares of
Company Common Stock were reserved for issuance under the
Company’s Amended and Restated Nonemployee Director Stock
Plan, of which 82,500 shares of Company Common Stock were
subject to outstanding options issued pursuant to such plan, (E)
165,137 shares of Company Common Stock were reserved for
issuance under the Company’s Employee Stock Purchase Plan
and (F) 154,100 shares of Company Common Stock were reserved for
issuance under the Circle International Group, Inc. 2000 Stock
Option Plan, of which 1,000 shares of Company Common Stock were
subject to outstanding options issued pursuant to such plan,
(the plan described in clause (a)(iii)(E) above, the “
Stock Purchase Plan ”) and (iv) no shares of
Company Preferred Stock were issued or outstanding. One
right to purchase Series A Junior Participating Preferred Stock
(each, a “ Company Right ”) issued pursuant
to the Rights Agreement, dated as of May 23, 2001 (the
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“ Company Rights Agreement
”), as amended, between the Company and Computershare
Investor Services, L.C. is associated with and attached to each
outstanding share of Company Common Stock. All outstanding
shares of Company Common Stock, and all shares of Company Common
Stock reserved for issuance as noted in clause (iii), when
issued in accordance with the respective terms thereof, are or
will be duly authorized, validly issued, fully paid and
non-assessable and free of pre-emptive rights and issued in
compliance with all applicable securities Laws. No shares
of Company Common Stock are owned by any Subsidiaries of the
Company.
(b)
Except as set forth in subsection
(a) above, or as permitted after the date hereof by Section
5.1(b), (i) the Company does not have any shares of its
capital stock issued or outstanding other than shares of Company
Common Stock that have become outstanding after May 3, 2007 upon
exercise of Company Stock Options outstanding as of May 3, 2007
and (ii) there are no outstanding subscriptions, options,
warrants, calls, convertible securities or other similar rights,
agreements or commitments relating to the issuance of capital
stock or other equity interests to which the Company or any of
its Subsidiaries is a party obligating the Company or any of its
Subsidiaries to (A) issue, transfer or sell any shares of
capital stock or other equity interests of the Company or any of
its Subsidiaries or securities convertible into or exchangeable
for such shares or equity interests, (B) grant, extend or
enter into any such subscription, option, warrant, call,
convertible securities or other similar right, agreement or
arrangement, (C) redeem or otherwise acquire any such
shares of capital stock or other equity interests (including
securities or obligations convertible into or exchangeable or
exercisable for any shares of capital stock) or (D) provide
a material amount of funds to, or make any material investment
(in the form of a loan, capital contribution or otherwise) in,
any Subsidiary.
(c)
Except for the awards to acquire shares of
Company Common Stock under the Company Stock Plans and Stock
Purchase Plan of the Company or any of its Subsidiaries listed
in Section 3.2(a) above, neither the Company nor any of its
Subsidiaries has outstanding bonds, debentures, notes or other
obligations, the holders of which have the right to vote (or
which are convertible into or exercisable for securities having
the right to vote) with the shareholders of the Company on any
matter.
(d)
There are no shareholder agreements, voting
trusts or other agreements or understandings to which the
Company or any of its Subsidiaries is a party or of which the
Company is otherwise aware with respect to the voting of the
capital stock or other equity interest of the Company or any of
its Subsidiaries.
(e)
No holder of securities in the Company or any of
its Subsidiaries has any right to have such securities
registered by the Company or any of its Subsidiaries, as the
case may be, other than pursuant to the Shareholder’s
Agreement dated October 1, 1994 among the Company, James R.
Crane, Daniel S. Swannie, Douglas A. Seckel and Donald P.
Roberts.
(f)
Section 3.2(f) of the Company Disclosure
Schedule sets forth a complete and correct list of all
outstanding Restricted Shares and Company Stock Options granted
under the Company Stock Plans, Company Benefit Plans or
otherwise, the number of shares of Company Common Stock issuable
thereunder or with respect thereto, the exercise prices (if
any), and the names of the holders thereof. Each grant of
a Company Stock Option was duly authorized no later than the
date on which the grant of such Company Stock Option was by
its
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terms to be effective by all necessary corporate
action. The per share exercise price of each Company Stock
Option was equal to or greater than the fair market value of a
share of Company Common Stock on the applicable grant date.
The Company has not knowingly granted, and there is no and
has been no Company policy or intentional practice to grant,
Company Stock Options prior to, or otherwise intentionally
coordinate the grant of Company Stock Options with, the release
of material information regarding the Company or its
Subsidiaries.
Section 3.3
Subsidiaries and Joint Ventures
. Section 3.3 of the Company
Disclosure Schedule lists all Subsidiaries and Joint Ventures of
the Company together with the jurisdiction of organization of
each such Subsidiary and Joint Venture. All the
outstanding shares of capital stock of, or other equity
interests in, each Subsidiary of the Company have been duly
authorized and validly issued and are fully paid and
nonassessable and are owned directly or indirectly by the
Company free and clear of all liens, claims, deeds of trust,
options, rights of first refusal, restrictive covenants,
pledges, charges, mortgages, encumbrances, adverse rights or
claims and security interests of any kind or nature whatsoever
(including any restriction on the right to vote or transfer the
same, except for such transfer restrictions of general
applicability as may be provided under applicable law, including
the Securities Act of 1933, and the rules and regulations
promulgated thereunder (the “ Securities Act
”), and the “blue sky” laws of the various
States of the United States) (collectively, “ Liens
”). All of the outstanding shares of capital stock
of, or other equity interests in, each Joint Venture of the
Company owned directly or indirectly by the Company have been
duly authorized and validly issued and are fully paid and
nonassessable. Other than the Subsidiaries and the Joint
Ventures, the Company does not own, directly or indirectly, any
capital stock, voting securities or equity interests in any
Person.
Section 3.4
Corporate Authority Relative to This
Agreement; No Violation
.
(a)
The Company has the requisite corporate power
and authority to enter into this Agreement and, subject to
receipt of the Company Shareholder Approval (as hereinafter
defined), to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been
duly and validly authorized by the Board of Directors of the
Company, acting upon the unanimous recommendation of the Special
Committee, and, except for (i) the Company Shareholder
Approval and (ii) the filing of the Articles of Merger with
the Secretary of State of the State of Texas, no other corporate
proceedings on the part of the Company are necessary to
authorize the consummation of the transactions contemplated
hereby. Each of the Board of Directors of the Company and
the Special Committee of the Board of Directors has resolved to
recommend that the Company’s shareholders approve this
Agreement and the transactions contemplated hereby (including
the Special Committee’s recommendation, the “
Recommendation ”), provided that a
withdrawal or modification after the date hereof by the Board or
the Special Committee of its Recommendation consistent with
Section 5.3(d) shall not be deemed a breach of the foregoing
sentence of this Section 3.4(a). This Agreement has been
duly and validly executed and delivered by the Company and,
assuming this Agreement constitutes the valid and binding
agreement of Parent and Merger Sub, constitutes the valid and
binding agreement of the
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Company, enforceable against the Company in
accordance with its terms, except that such enforceability
(i) may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar laws of
general application affecting or relating to the enforcement of
creditors’ rights generally and (ii) is subject to
general principles of equity, whether considered in a proceeding
at law or in equity, and any implied covenant of good faith and
fair dealing (the “ Bankruptcy and Equity Exception
”).
(b)
Other than in connection with or in compliance
with (i) the TBCA (ii) the Securities Exchange Act of
1934 (the “ Exchange Act ”), (iii) the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder
(the “ HSR Act ”) and (iv) competition
approvals in foreign countries (collectively, the “
Company Approvals ”) no authorization, consent or
approval of, or filing with, any United States or foreign
governmental or regulatory agency, commission, court, body,
entity or authority (each, a “ Governmental Entity
”) is necessary, under applicable Law, for the
consummation by the Company of the transactions contemplated
hereby, except for such authorizations, consents, approvals or
filings that, if not obtained or made, would not have,
individually or in the aggregate, a Company Material Adverse
Effect.
(c)
The execution and delivery by the Company of
this Agreement does not, and the consummation of the
transactions contemplated hereby and compliance with the
provisions hereof by the Company will not, (i) result in
any violation of, or default (with or without notice or lapse of
time, or both) under, require consent under, or give rise to a
right of termination, cancellation or acceleration of any
obligation, payment of any consent or similar fee, or to the
loss of any benefit under any loan, guarantee of indebtedness or
credit agreement, note, bond, mortgage, indenture, lease,
agreement, contract, instrument, permit, Company Permit,
concession, franchise, right or license binding upon the Company
or any of its Subsidiaries or result in the creation of any Lien
upon any of the properties or assets of the Company or any of
its Subsidiaries, (ii) conflict with or result in any
violation of any provision of the articles of incorporation or
bylaws or other equivalent organizational document, in each case
as amended, of the Company or any of its Subsidiaries or
(iii) assuming that the consents and approvals referred to
in Section 3.4(b) are duly obtained, conflict with or
violate any applicable Laws, other than, in the case of clauses
(i) and (iii), any such violation, required consent,
conflict, default, termination, cancellation, acceleration,
right, loss or Lien that would not have, individually or in the
aggregate, a Company Material Adverse Effect.
(d)
The Company has provided Parent with a true and
complete copy of the Talon Merger Agreement, including all
schedules and exhibits thereto. The Talon Merger
Agreement, effective as of the signing of this Agreement, has
been validly terminated.
Section 3.5
Reports and Financial Statements
.
(a)
The Company and its Subsidiaries have filed all
forms, documents, statements and reports required to be filed
prior to the date hereof by them with the Securities and
Exchange Commission (the “ SEC ”) since
January 1, 2005 (the forms, documents, statements and
reports filed with the SEC since January 1, 2005 and those
filed with the SEC subsequent to
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the date of this Agreement, including any
amendments thereto, the “ Company SEC Documents
”). As of their respective dates, or, if amended, as
of the date of the last such amendment prior to the date hereof,
the Company SEC Documents complied, and each of the Company SEC
Documents filed subsequent to the date of this Agreement will
comply, as to form, in all material respects with the
requirements of the Securities Act and the Exchange Act, as the
case may be, and the applicable rules and regulations
promulgated thereunder. None of the Company SEC Documents
so filed or that will be filed subsequent to the date of this
Agreement contained or will contain any untrue statement of a
material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
(b)
The financial statements (including all related
notes and schedules) of the Company and its Subsidiaries
included in or incorporated by reference into the Company SEC
Documents fairly presented, in all material respects, the
consolidated financial position of the Company and its
Subsidiaries, as of the respective dates thereof, and the
consolidated results of their operations and their consolidated
cash flows and changes in shareholders equity for the respective
periods then ended (subject, in the case of the unaudited
statements, to normal year-end audit adjustments and to any
other adjustments described therein, including the notes
thereto) in conformity with United States generally accepted
accounting principles (“ GAAP ”) (except, in
the case of the unaudited statements or foreign Subsidiaries, as
permitted by the SEC) applied on a consistent basis during the
periods involved (except as may be indicated therein or in the
notes thereto).
Section 3.6
Internal Controls and Procedures
.
(a)
The Company has established and maintains
disclosure controls and procedures and internal control over
financial reporting (as such terms are defined in paragraphs (e)
and (f), respectively, of Rule 13a-15 under the Exchange Act) as
required by Rule 13a-15 under the Exchange Act. The
Company’s disclosure controls and procedures are
reasonably designed to ensure that all material information
required to be disclosed by the Company in the reports that it
files under the Exchange Act are recorded, processed, summarized
and reported within the time periods specified in the rules and
forms of the SEC, and that all such material information is
accumulated and communicated to the management of the Company as
appropriate to allow timely decisions regarding required
disclosure and to make the certifications required pursuant to
Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 and the
rules and regulations promulgated thereunder (the “
Sarbanes-Oxley Act ”). The management of the
Company has completed its assessment of the effectiveness of the
Company’s internal control over financial reporting in
compliance with the requirements of Section 404 of the
Sarbanes-Oxley Act for the year ended December 31, 2006, and
such assessment concluded that such controls were effective.
The Company has disclosed, based on its most recent
evaluations, to the Company’s outside auditors and the
audit committee of the board of directors of the Company (A) all
significant deficiencies in the design or operation of internal
controls over financial reporting and any material weaknesses,
which have more than a remote chance to materially adversely
affect the Company’s ability to record, process, summarize
and report financial data (as defined in Rule 13a-15(f) of the
Exchange Act) and (B) any fraud, whether or not material,
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that involves management or other employees who
have a significant role in the Company’s internal controls
over financial reporting.
(b)
Since January 1, 2005, to the knowledge of the
Company, neither the Company nor any of its Subsidiaries nor any
director, officer, employee, auditor, accountant or
representative of the Company or any of its Subsidiaries has
received or otherwise had or obtained knowledge of any material
complaint, allegation, assertion or claim, whether written or
oral, regarding the accounting or auditing practices,
procedures, methodologies or methods of the Company or any of
its Subsidiaries, including any material complaint, allegation,
assertion or claim that the Company or any of its Subsidiaries
has a “significant deficiency” or “material
weakness” (as such terms are defined in the Public
Accounting Oversight Board’s Auditing Standard No. 2, as
in effect on the date hereof), in the Company’s internal
controls over financial reporting.
Section 3.7
No Undisclosed Liabilities
. Except (i) as reflected or reserved
against in the Company’s consolidated balance sheets (or
the notes thereto) included in the Company SEC Documents filed
at least two (2) Business Days prior to the date hereof,
(ii) for liabilities and obligations arising under this
Agreement and transactions contemplated by this Agreement,
(iii) for liabilities and obligations incurred in the
ordinary course of business consistent with past practice since
December 31, 2006, (iv) for any action specifically permitted by
the exceptions in the covenants in Section 5.1(b), (v) for
liabilities or obligations under Company Material Contracts,
other than in the case of material breach by the Company and
(vi) for liabilities or obligations which have been
discharged or paid in full in the ordinary course of business,
neither the Company nor any Subsidiary of the Company has any
liabilities or obligations of any nature, whether or not
accrued, contingent or otherwise, whether known or unknown and
whether due or to become due, that would have, individually or
in the aggregate, a Company Material Adverse Effect.
Section 3.8
Compliance with Law; Permits
.
(a)
The Company and its Subsidiaries are, and since
the later of January 1, 2005 and their respective dates of
formation or organization have been, in compliance with and are
not in default under or in violation of any applicable federal,
state, local or foreign or provincial law, statute, ordinance,
rule, regulation, judgment, order, injunction, decree or agency
requirement of or undertaking to or agreement with any
Governmental Entity, including common law, (collectively,
“ Laws ” and each, a “ Law
”), except where such non-compliance, default or violation
would not have, individually or in the aggregate, a Company
Material Adverse Effect.
(b)
Neither the Company, nor any of its
Subsidiaries, nor any of their Affiliates or any other Persons
acting on their behalf has, in connection with the operation of
their respective businesses, (i) used any corporate or
other funds for unlawful contributions, payments, gifts or
entertainment, or made any unlawful expenditures relating to
political activity to government officials, candidates or
members of political parties or organizations, or established or
maintained any unlawful or unrecorded funds in violation of
Section 104 of the
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Foreign Corrupt Practices Act of 1977 or any
other similar applicable foreign, federal or state law,
(ii) paid, accepted or received any unlawful contributions,
payments, expenditures or gifts, or (iii) violated or
operated in noncompliance with any export restrictions,
anti-boycott regulations, embargo regulations or other
applicable domestic or foreign laws and regulations, except in
the case of clauses (i), (ii) or (iii) where such
action, violation or noncompliance would not have, individually
or in the aggregate, a Company Material Adverse Effect.
(c)
Except as would not have, individually or in the
aggregate, a Company Material Adverse Effect, (i) the
Company and its Subsidiaries are in possession of all
franchises, tariffs, grants, authorizations, licenses, permits,
easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Entity necessary for
the Company and its Subsidiaries to own, lease and operate their
properties and assets or to carry on their businesses as they
are now being conducted (the “ Company Permits
”), (ii) all Company Permits are in full force and
effect, (iii) no suspension or cancellation of any of the
Company Permits is pending or, to the Knowledge of the Company,
threatened, (iv) the Company and its Subsidiaries are not,
and since January 1, 2005 have not been, in violation or
breach of, or default under, any Company Permit and (v) no
event or condition has occurred or exists which would reasonably
be expected to result in a violation of, breach of or loss of a
benefit under any Company Permit (in each case, with or without
notice or lapse of time or both).
(d)
The representations and warranties set forth in
this Section 3.8 shall not apply to Environmental Law
(which is the subject of Section 3.9), ERISA (which is the
subject of Section 3.10) or Laws relating to Taxes (which
are the subject of Section 3.15).
Section 3.9
Environmental Laws and Regulations
.
(a)
Except as would not, individually or in the
aggregate, have a Company Material Adverse Effect, (i) the
Company and each of its Subsidiaries have conducted their
respective businesses and are in compliance with all applicable
Environmental Laws (as hereinafter defined) and, while owned by
the Company, each of the former Subsidiaries conducted their
respective businesses in compliance with all applicable
Environmental Laws, (ii) there has been no release of any
Hazardous Substance by the Company or by any of its
Subsidiaries, or by former Subsidiaries while owned by the
Company, or from any properties while owned by the Company or
any of its Subsidiaries or former Subsidiaries while owned by
the Company, or as a result of any operations or activities of
the Company or any of its Subsidiaries or former Subsidiaries
while owned by the Company, in any manner or for which the
Company or any of is Subsidiaries would be responsible that
could reasonably be expected to give rise to any remedial
obligation, corrective action requirement or other liability of
any kind under applicable Environmental Laws, (iii) neither the
Company nor any of its Subsidiaries has received any written
notices, demand letters or written requests for information from
any federal, state, local or foreign or provincial Governmental
Entity asserting that the Company or any of its Subsidiaries may
be in violation of, or liable under, any Environmental Law, and
(iv) neither the Company, its Subsidiaries nor any of
their respective properties are, or, to the Knowledge of the
Company, are threatened to become, subject to any liabilities
relating to any suit, settlement,
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court order, administrative order, regulatory
requirement, judgment or written claim asserted or arising under
any Environmental Law.
(b)
As used herein, “ Environmental Law
” means any Law relating to (i) the protection,
preservation or restoration of the environment (including air,
surface water, groundwater, drinking water supply, surface land,
subsurface land, plant and animal life or any other natural
resource), or (ii) the exposure to, or the use, storage,
recycling, treatment, generation, transportation, processing,
handling, labeling, production, release or disposal of Hazardous
Substances, in each case as in effect at the date hereof.
(c)
As used herein, “ Hazardous
Substance ” means any substance presently listed,
defined, designated or classified as hazardous, toxic,
radioactive or dangerous, or otherwise regulated, under any
Environmental Law. Hazardous Substance includes any
substance to which exposure is regulated by any Governmental
Entity or any Environmental Law including any toxic waste,
pollutant, contaminant, hazardous substance, toxic substance,
hazardous waste, special waste or petroleum or any derivative or
byproduct thereof, radon, radioactive material, asbestos or
asbestos containing material, urea formaldehyde, foam insulation
or polychlorinated biphenyls.
Section 3.10
Employee Benefit Plans
.
(a)
Section 3.10(a) of the Company Disclosure
Schedule lists all material Company Benefit Plans as of the date
of this Agreement. “ Company Benefit Plans
” means all compensation or employee benefit plans,
programs, policies, agreements or other arrangements, whether or
not “employee benefit plans” (within the meaning of
Section 3(3) of the Employee Retirement Income Security Act
of 1974 (“ ERISA ”), whether or not subject
to ERISA), providing cash- or equity-based incentives, health,
medical, dental, disability, accident or life insurance benefits
or vacation, severance, retirement, pension, deferred
compensation, change in control, savings benefits or any other
benefits, that are sponsored, maintained or contributed to by
the Company or any of its Subsidiaries, or that the Company or
any of its Subsidiaries has any obligation to sponsor, maintain
or contribute to, for the benefit of current or former
employees, officers, directors or consultants of the Company or
any of its Subsidiaries and all employee and consultant
agreements providing compensation, vacation, severance, change
in control or other benefits to any current or former officer,
employee or consultant of the Company or any of its
Subsidiaries.
(b)
Except as would not reasonably be expected to
result in material liability to the Company and its Subsidiaries
taken as a whole, no action, dispute, suit, claim, arbitration,
or legal, administrative or other proceeding or governmental
action (other than claims for benefits in the ordinary course)
is pending or, to the Knowledge of the Company, threatened (x)
with respect to any Company Benefit Plan by any current or
former employee, officer or director of the Company or any of
its Subsidiaries, (y) alleging any breach of the material terms
of any Company Benefit Plan or any fiduciary duties or (z) with
respect to any violation of any applicable Law with respect to
such Company Benefit Plan.
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(c)
Each Company Benefit Plan has been established,
maintained and administered in compliance with its terms and
with applicable Law, including ERISA and the Code to the extent
applicable thereto, except for such non-compliance which would
not reasonably be expected to result in material liability to
the Company and its Subsidiaries taken as a whole. Each
Company Benefit Plan intended to be qualified under
Section 401(a) or 401(k) of the Code has received a
favorable determination letter from the United States Internal
Revenue Service that has not been revoked and to the Knowledge
of the Company, no fact or event has occurred that would
reasonably be expected to affect adversely the qualified status
of any such Company Benefit Plan. All material
contributions required to be made by the Company or one of its
Subsidiaries or any of their respective ERISA Affiliates to any
Company Benefit Plan and all material premiums due or payable
with respect to insurance policies funding any Company Benefit
Plan, for any period have been timely made or paid in full.
(d)
There are no Company Benefit Plans subject to
Title IV or Section 302 of ERISA or Section 412 or 4971 of the
Code.
(e)
None of the Company Benefit Plans provides that
the execution of this Agreement or consummation of the
transactions contemplated by this Agreement will, either alone
or in combination with another event, (whether contingent or
otherwise), (i) entitle any current or former director,
employee, independent contractor, consultant or officer of the
Company or any of its Subsidiaries to severance pay, retention
bonuses, parachute payments, non-competition payments,
unemployment compensation or any other payment, compensation or
benefit except as expressly provided in this Agreement or as
required by applicable Law, (ii) accelerate the time of
payment or vesting, result in any funding, or increase the
amount of any payment, compensation or benefit due any such
director, employee, independent contractor, consultant or
officer, except as expressly provided in this Agreement, or
(iii) result in any forgiveness of indebtedness or
obligation to fund benefits with respect to any such employee,
director, independent contractor, consultant or officer,
(iv) result in any limitation or restriction on the right
of the Company or any of its Subsidiaries to merge, amend or
terminate any Company Benefit Plan, (v) result in any new
or increased contribution required to be made to any Company
Benefit Plan or (vi) provide for any director, officer, employee
or service provider to be entitled to a gross-up, make whole or
other payment as a result of the imposition of taxes under
Section 280G, 4999 or 409A of the Code pursuant to any
agreement or arrangement with the Company or any of its
Subsidiaries. No payment or benefit which has been, will
be or may be made by the Company or any of its Subsidiaries with
respect to any present or former employee in connection with the
execution and delivery of this Agreement or the consummation of
the transactions contemplated by this Agreement could result in
any “excess parachute payments” within the meaning
of Section 280G(b)(1) of the Code or nondeductibility under
Section 162(m) of the Code.
(f)
Except as would not reasonably be expected to
result in material liability to the Company and its Subsidiaries
taken as a whole, all Company Benefit Plans subject to the Law
of any jurisdiction outside of the United States (i) have
been established and maintained in accordance with all
applicable requirements, (ii) if they are intended to
qualify for special tax treatment, meet all necessary
requirements for such treatment, and (iii) if they are
intended to be funded and/or book-reserved are funded and/or
book-reserved, as appropriate, based upon reasonable actuarial
assumptions and in accordance with applicable Law.
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(g)
With respect to each Company Benefit Plan, the
Company has provided to Parent a true, correct and complete copy
(or, to the extent no such copy exists, an accurate description)
thereof and, to the extent applicable: (i) the most recent
documents constituting the Company Benefit Plan and all
amendments thereto, (ii) any related trust agreement or
other funding instrument (iii) the most recent Internal
Revenue Service determination or opinion letter, (iv) the most
recent summary plan description, (v) the most recent actuarial
report, (vi) the most recent required Internal Revenue Service
Form 5500, and (vi) the most recent certified financial
statement.
(h)
No Company Benefit Plan is a
“multiemployer plan” within the meaning of
Section 4001(a)(3) of ERISA (“ Multiemployer
Plan ”) or a plan that has two or more contributing
sponsors, at least two of whom are not under common control
within the meaning of Section 4063 of ERISA (a “
Multiple Employer Plan ”), and neither the Company,
its Subsidiaries nor any other entity which together with the
Company or any of its Subsidiaries would be treated as a single
employer under Section 4001 of ERISA or Section 414 of
the Code (each, an “ ERISA Affiliate ”) has
during the last six (6) years sponsored or contributed to, or
had any liability or obligation in respect of, any Multiemployer
Plan, or Multiple Employer Plan.
(i)
No event has occurred and, to the Knowledge of
the Company, except as would not reasonably be expected to
result in material liability to the Company and its Subsidiaries
taken as a whole, no condition exists that would, either
directly or by reason of the Company’s or any
Subsidiary’s affiliation with any of their ERISA
Affiliates, subject the Company or any of its Subsidiaries to
any tax, fine, lien, penalty or other liability imposed by ERISA
or, with respect to each Company Benefit Plan, the Code or other
applicable Laws.
(j)
Each Plan that is a “nonqualified deferred
compensation plan” within the meaning of Section
409A(d)(1) of the Code and any award thereunder, in each case
that is subject to Section 409A of the Code, has been operated
in good faith compliance in all material respects with Section
409A of the Code since January 1, 2005, the proposed regulations
issued thereunder and the Internal Revenue Service Notice
2005-1.
(k)
Neither the Company nor any of its Subsidiaries
or ERISA Affiliates (taken as a whole) has any material
liability with respect to an obligation to provide health or
other non-pension benefits to any Person beyond their retirement
or other termination of service other than coverage mandated by
Section 4980B of the Code or state Law.
Section 3.11
Interested Party Transactions
. Except for employment Contracts filed as
an exhibit to or incorporated by reference in a Company SEC
Document filed prior to the date hereof or Company Benefit
Plans, Section 3.11 of the Company Disclosure Schedule sets
forth a correct and complete list of the contracts, arrangements
that are in existence as of the date of this Agreement or
transactions under which the Company or any of its Subsidiaries
has any existing or future liabilities (an “ Affiliate
Transaction ”), between the Company or any of its
Subsidiaries, on the one hand, and, on the other hand, any (A)
present executive officer or director of the Company or any
person that has served as such an executive officer or director
within the past two years or any of such executive
officer’s or director’s immediate family members,
(B) record or beneficial owner of
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more than 5% of the Shares as of the date
hereof, or (C) to the Knowledge of the Company, any Affiliate of
any such executive officer, director or owner (other than the
Company or any of its Subsidiaries). Parent has been
provided with true and complete copies of any such contracts or
arrangements, all of which shall be terminated on or prior to
the Closing except as set forth on Schedule 3.11 of the
Company Disclosure Schedule.
Section 3.12
Absence of Certain Changes or Events
. Since December 31, 2006, (a) except
as otherwise required or expressly contemplated by this
Agreement, (i) the businesses of the Company and its
Subsidiaries have been conducted, in all material respects, in
the ordinary course of business consistent with past practice
(it being understood that, for purposes of this Section 3.12,
the taking of any action specifically permitted by the
exceptions in the covenants contained in Section 5.1(b) shall be
deemed to be in the ordinary course of business consistent with
past practice) and (ii) there have not been any facts,
circumstances, events, changes, effects or occurrences that have
had or would have, individually or in the aggregate a Company
Material Adverse Effect and (b) prior to the date hereof,
neither the Company nor any of its Subsidiaries has taken or
permitted to occur any action that were it to be taken from and
after the date hereof would require approval of Parent pursuant
to Section 5.1(b) to (i) make, declare or pay any dividend, or
make any other distribution on, or directly or indirectly
redeem, purchase or otherwise acquire or encumber, any shares of
its capital stock or any securities or obligations convertible
(whether currently convertible or convertible only after the
passage of time or the occurrence of certain events) into or
exchangeable for any shares of its capital stock, (ii) waive,
release, assign, settle or compromise any claim, action or
proceeding or (iii) implement or adopt any material change in
its Tax or financial accounting principles, practices or
methods.
Section 3.13
Investigations; Litigation
. There are no (i) investigations or
proceedings pending (or, to the Knowledge of the Company,
threatened) by any Governmental Entity with respect to the
Company or any of its Subsidiaries or (ii) actions, suits
or proceedings pending (or, to the Knowledge of the Company,
threatened) against or affecting the Company or any of its
Subsidiaries , or any of their respective properties at law or
in equity before, and there are no orders, judgments or decrees
of, or before, any Governmental Entity against the Company or
any of its Subsidiaries, in each case of clause (i) or
(ii), which would have (if adversely determined), individually
or in the aggregate, a Company Material Adverse Effect.
Section 3.14
Proxy Statement; Other Information
. None of the information contained in the
Proxy Statement (as hereinafter defined) will at the time of the
mailing of the Proxy Statement to the shareholders of the
Company, at the time of the Company Meeting (as such Proxy
Statement shall have been amended or supplemented as of the date
of the Company Meeting), and at the time of any amendments
thereof or supplements thereto, will, at the time of its filing
with the SEC, and at the time of any amendments thereof or
supplements thereto, contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
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misleading; provided , that no
representation is made by the Company with respect to
information supplied by or on behalf of, or related to, Parent
or any of its Affiliates (other than the Company and its
Subsidiaries). The Proxy Statement will comply as to form
in all material respects with the Exchange Act, except that no
representation is made by the Company with respect to
information supplied by or on behalf of, or related to, Parent
or any of its Affiliates (other than the Company and its
Subsidiaries). The letter to shareholders, notice of
meeting, proxy statement and forms of proxy to be distributed to
shareholders in connection with the Merger to be filed with the
SEC in connection with seeking the approval of this Agreement
are collectively referred to herein as the “ Proxy
Statement .”
Section 3.15
Tax Matters
.
(a)
Except as would not have, individually or in the
aggregate, a Company Material Adverse Effect, (i) the
Company and each of its Subsidiaries have prepared and timely
filed (taking into account any valid extension of time within
which to file) all Tax Returns required to be filed by any of
them and all such Tax Returns are complete and accurate,
(ii) the Company and each of its Subsidiaries have timely
paid all Taxes that are required to be paid by any of them
(whether or not shown on any Tax Return), except with respect to
matters contested in good faith and for which adequate reserves
have been established on the financial statements of the Company
and its Subsidiaries in accordance with GAAP, (iii) the
U.S. consolidated federal income Tax Returns of the Company
through the tax year ending 2005 have been examined by the
Internal Revenue Service and such examinations have been
completed or settled (or the period for assessment of the Taxes
in respect of which such Tax Returns were required to be filed
has expired), (iv) all assessments for Taxes due with
respect to completed and settled examinations or any concluded
litigation have been fully paid, (v) there are no audits,
examinations, investigations or other proceedings pending or
threatened in writing in respect of Taxes or Tax matters of the
Company or any of its Subsidiaries, (vi) there are no Liens
for Taxes on any of the assets of the Company or any of its
Subsidiaries other than statutory Liens for Taxes not yet due
and payable, (vii) none of the Company or any of its
Subsidiaries has been a “controlled corporation” or
a “distributing corporation” in any distribution
that was purported or intended to be governed by
Section 355 of the Code (or any similar provision of state,
local or foreign Law) (A) occurring during the two-year period
ending on the date hereof, or (B) that otherwise constitutes
part of a “plan” or “series of related
transactions” (within the meaning of Section 355(e)
of the Code) that includes the Merger, (viii) the Company
and each of its Subsidiaries has timely withheld and paid all
Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, creditor, independent
contractor, shareholder or other third party and is in
compliance with all applicable rules and regulations regarding
the solicitation, collection and maintenance of any forms,
certifications and other information required in connection
therewith, (ix) none of the Company or any of its Subsidiaries
has been a party to any “reportable transaction”
within the meaning of Treasury Regulation 1.6011-4(b)(1), (x)
neither the Company nor any of its Subsidiaries is a party to
any agreement or arrangement relating to the apportionment,
sharing, assignment or allocation of any Tax or Tax asset (other
than an agreement or arrangement solely among members of a group
the common parent of which is the Company) or has any liability
for Taxes of any Person (other than the Company or any of its
Subsidiaries) under Treasury Regulation Section 1.1502-6
(or any
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predecessor or successor thereof or any
analogous or similar provision of Law), by contract, agreement
or otherwise, (xi) no waivers or extensions of any statute
of limitations have been granted or requested with respect to
any Taxes of the Company or any of its Subsidiaries,
(xii) no issue has been raised in writing by a taxing
authority in any prior examination of the Company or any of its
Subsidiaries which, by application of the same or similar
principles, could reasonably be expected to result in a
deficiency for any subsequent taxable period, (xiii) no
claim has been in writing made by a taxing authority in a
jurisdiction where either the Company or any of its Subsidiaries
does not file Tax Returns such that it is or may be subject to
taxation by that jurisdiction, and (xiv) neither the
Company nor any of its Subsidiaries (A) is subject to any
private letter ruling of the IRS or comparable rulings of any
taxing authority with respect to income Taxes or (B) has
executed or entered into a closing agreement pursuant to
Section 7121 of the Code or any similar provision of Law,
in each case, within the preceding three taxable years or that
may otherwise be in effect at any time after the Effective Time
of the Merger with respect to income Taxes.
(b)
As used in this Agreement, (i) “
Tax ” or “ Taxes ” means (A) any
and all federal, state, local or foreign or provincial taxes,
charges, fees, imposts, levies or other assessments, including
all net income, gross receipts, capital, sales, use, ad valorem,
value added, transfer, franchise, profits, inventory, capital
stock, license, withholding, payroll, employment, social
security, unemployment, excise, severance, stamp, occupation,
property and estimated taxes, customs duties, fees, assessments
and charges of any kind whatsoever, including any and all
interest, penalties, fines, additions to tax or additional
amounts imposed by any Governmental Entity in connection with
respect thereto, and (B) any liability in respect of any items
described in clause (A) payable by reason of contract,
assumption, transferee liability, operation of Law, Treasury
Regulation Section 1.1502-6(a) (or any predecessor or
successor thereof or any analogous or similar provision of Law)
or otherwise, and (ii) ” Tax Return ”
means any return, report or similar filing (including any
attached schedules, supplements and additional or supporting
material) required to be filed with respect to Taxes, including
any information return, claim for refund, amended return or
declaration of estimated Taxes (and including any amendments
with respect thereto).
Section 3.16
Labor Matters
(a)
Except for such matters which would
not have individually or in the aggregate, a Company Material
Adverse Effect, neither the Company nor any of its Subsidiaries
has received written notice during the past two years of the
intent of any Governmental Entity responsible for the
enforcement of labor, employment, occupational health and safety
or workplace safety and insurance/workers compensation laws to
conduct an investigation of the Company or any of its
Subsidiaries and, to the Knowledge of the Company, no such
investigation is in progress. Except for such matters
which would not have, individually or in the aggregate, a
Company Material Adverse Effect, (i) there are no (and have
not been during the two year period preceding the date hereof)
strikes or lockouts with respect to any employees of the Company
or any of its Subsidiaries (“ Employees ”),
(ii) to the Knowledge of the Company, there is no (and has
not been during the two year period preceding the date hereof)
union organizing effort pending or threatened against the
Company or any of its Subsidiaries, (iii) there is no (and
has not been during the two year period preceding the date
hereof) unfair labor practice, labor dispute (other than routine
individual grievances) or labor arbitration proceeding
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pending or, to the Knowledge of the Company,
threatened against the Company or any of its Subsidiaries,
(iv) there is no (and has not been during the two year
period preceding the date hereof) slowdown or work stoppage in
effect or, to the Knowledge of the Company, threatened with
respect to Employees and (v) the Company and its
Subsidiaries are in compliance with all applicable Laws
respecting employment and employment practices, terms and
conditions of employment and wages and hours and unfair labor
practices. Neither the Company nor any of its Subsidiaries
has any liabilities under the Worker Adjustment and Retraining
Act and the regulations promulgated thereunder (the “
WARN Act ”) or any similar state or local law as a
result of any action taken by the Company that would have,
individually or in the aggregate, a Company Material Adverse
Effect. Neither the Company nor any of its Subsidiaries is
a party to any collective bargaining agreements.
(b)
Except as would not have, individually or in the
aggregate a Company Material Adverse Effect, all individuals
that have been or that are classified by the Company as
independent contractors, including without limitation drivers,
have been and are correctly so classified, and none of such
individuals could reasonably be classified as an employee of the
Company.
Section 3.17
Intellectual Property
. Except as would not have, individually
or in the aggregate, a Company Material Adverse Effect, either
the Company or a Subsidiary of the Company owns, or is licensed
or otherwise possesses adequate rights to use, all material
trademarks, trade names, service marks, service names, mark
registrations, logos, assumed names, registered and unregistered
copyrights, patents or applications and registrations, domain
names, Internet addresses and other computer identifiers, web
sites and web pages, computer software programs and related
documentation, trade secrets, know-how, customer information,
confidential business information and technical information used
in their respective businesses as currently conducted
(collectively, the “ Intellectual Property
”). Except as would not have, individually or in the
aggregate, a Company Material Adverse Effect, (i) there are
no pending or, to the Knowledge of the Company, threatened
claims by any person alleging infringement by the Company or any
of its Subsidiaries or with regard to the ownership, validity or
use of any Intellectual Property of the Company, (ii) to
the Knowledge of the Company, the conduct of the business of the
Company and its Subsidiaries does not infringe any intellectual
property rights of any person, (iii) neither the Company
nor any of its Subsidiaries has made any claim of a violation or
infringement by others of its rights to or in connection with
the Intellectual Property of the Company or any of its
Subsidiaries, and (iv) to the Knowledge of the Company, no
person is infringing any Intellectual Property of the Company or
any of its Subsidiaries. To the Knowledge of the Company,
upon the consummation of the transactions contemplated herein,
the Company shall own or have the right to use all Intellectual
Property on the same terms and conditions as the Company and its
Subsidiaries enjoyed prior to such transaction, except where the
failure to so own or have the right to use would not have,
individually or in the aggregate, a Company Material Adverse
Effect.
Section 3.18
Property
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. Except as would not have, individually
or in the aggregate, a Company Material Adverse Effect, the
Company or a Subsidiary of the Company owns and has good and
indefeasible title to all of its owned real property and good
title to all its personal property and has valid leasehold
interests in all of its leased properties free and clear of all
Liens (except in all cases for Liens permissible under any
applicable loan agreements and indentures and for title
exceptions, defects, encumbrances, liens, charges, restrictions,
restrictive covenants and other matters, whether or not of
record, which in the aggregate do not materially affect the
continued use of the property for the purposes for which the
property is currently being used (assuming the timely discharge
of all obligations owing under or related to the owned real
property, the personal property and leased property) by the
Company or a Subsidiary of the Company). Except as would
not have, individually or in the aggregate, a Company Material
Adverse Effect, all leases under which the Company or any of its
Subsidiaries lease any real or personal property are valid and
effective against the Company or any of its Subsidiaries and, to
the Company’s Knowledge, the counterparties thereto, in
accordance with their respective terms, and there is not, under
any of such leases, any existing default by the Company or any
of its Subsidiaries or, to the Company’s Knowledge, the
counterparties thereto, or event which, with notice or lapse of
time or both, would become a default by the Company or any of
its Subsidiaries or, to the Company’s Knowledge, the
counterparties thereto. The representations and warranties
set forth in this Section 3.18 shall not apply to
Intellectual Property, which is the subject of
Section 3.17.
Section 3.19
Insurance
. Except as would not have, individually
or in the aggregate, a Company Material Adverse Effect, the
Company and its Subsidiaries maintain, or are entitled to the
benefits of, insurance covering their properties, operations,
personnel and businesses in the amounts set forth on
Section 3.19 of the Company Disclosure Schedule.
Except as would not have, individually or in the
aggregate, a Company Material Adverse Effect, none of the
Company or its Subsidiaries has received notice from any insurer
or agent of such insurer that substantial capital improvements
or other expenditures will have to be made in order to continue
such insurance, and all such insurance is outstanding and duly
in force on the date hereof and will be (or equivalent
replacement insurance will be) outstanding and duly in force on
the Closing Date. Except as would not have, individually
or in the aggregate, a Company Material Adverse Effect, (i)
neither the Company nor any of its Subsidiaries is in breach or
default under, or has taken any action which could permit
termination or material modification of, any material insurance
policies, and (ii) no notice in writing of cancellation or
termination has been received with respect to any material
insurance policy and no such policy shall terminate or give rise
to a right of cancellation by reason of the execution, delivery
and performance of this Agreement.
Section 3.20
Opinion of Financial Advisor
. The Board of Directors of the Company
and the Special Committee have received the opinion of Deutsche
Bank Securities Inc., dated as of the date of this Agreement, to
the effect that, as of the date hereof, the Merger Consideration
is fair to the holders of the Company Common Stock (other than
those that are parties to a Rollover Commitment, Parent and
Merger Sub) from a financial point of view. The Company
will provide Parent (solely for informational purposes) a true,
correct and complete copy of such opinion promptly following
receipt thereof.
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Section 3.21
Required Vote of the Company
Shareholders
. The affirmative vote of the holders of
outstanding shares of Company Common Stock, voting together as a
single class, representing at least a majority of all the votes
entitled to be cast thereupon by holders of Company Common
Stock, is the only vote of holders of securities of the Company
which is required to approve this Agreement, the Merger and the
other transactions contemplated hereby (the “ Company
Shareholder Approval ”).
Section 3.22
Material Contracts
.
(a)
As of the date of this Agreement, except for
this Agreement, the Company Benefit Plans, Contracts filed with
the SEC prior to the date hereof or as set forth on Section
3.22(a) of the Company Disclosure Schedule, neither the Company
nor any of its Subsidiaries is a party to or bound by, as of the
date hereof, any Contract (whether written or oral) which is (i)
a “material contract” (as such term is defined in
Item 601(b)(10) of Regulation S-K of the SEC), (ii) a loan,
guarantee of indebtedness or credit agreement, note, bond,
mortgage, indenture, contract, lease, license or other binding
commitment (other than those between the Company and its
Subsidiaries) relating to indebtedness or other obligation to
make payment in an amount in excess of $5 million individually,
(iii) a contract, which to the Knowledge of the Company purports
to materially limit the right of the Company or any of its
Affiliates to engage or compete in any line of business in which
the Company or its Subsidiaries is engaged or to compete with
any person or operate in any location, (iv) a contract that
creates a partnership or joint venture or similar arrangement
with respect to any significant portion of the business of the
Company or its Subsidiaries taken as a whole, (v) settlement or
similar agreement with any governmental entity or order or
consent of a governmental entity to which the Company or any of
its Subsidiaries is subject involving future performance by the
Company or any of its Subsidiaries which is material to the
Company and any of its Subsidiaries taken as a whole (all
contracts of the type described in this Section 3.22(a),
together with Contracts with the top 24 transportation suppliers
and top 22 customers of the Company (as measured by annual spend
or revenues, respectively, which supplier and customer Contracts
are set forth in Section 3.22 of the Company Disclosure Schedule
(the “Material Customer/Supplier Contracts”)), being
referred to herein as “ Company Material Contracts
”).
(b)
Other than as a result of the expiration or
termination of any Company Material Contract in accordance with
its terms and except as would not have, either individually or
in the aggregate, a Company Material Adverse Effect, (i) each
Company Material Contract is valid and binding on the Company
and any of its Subsidiaries that is a party thereto, as
applicable, and in full force and effect, (ii) the Company and
each of its Subsidiaries has in all material respects performed
all obligations required to be performed by it to date under
each Company Material Contract, and (iii) neither the Company
nor any of its Subsidiaries has Knowledge of, or has received
notice of, the existence of any event or condition which
constitutes, or, after notice or lapse of time or both, will
constitute, a material default on the part of the Company or any
of its Subsidiaries or their counterparties under any such
Company Material Contract. Since December 31,
2006, other than as would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse
Effect, neither the Company
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nor any of its subsidiaries has received any
written notice that any counterparty to a Material
Customer/Supplier Contract (i) has reduced or will reduce the
use of products or services of the Company or any of its
Subsidiaries, or (ii) has sought to terminate or amend the terms
of a Material Customer/Supplier Contract, including in each case
as a result of the Agreement or the transactions contemplated
hereby.
Section 3.23
Finders or Brokers; Transaction Fees
. Except for Deutsche Bank Securities
Inc., neither the Company nor any of its Subsidiaries has
engaged any investment banker, broker or finder in connection
with the transactions contemplated by this Agreement who might
be entitled to any fee or any commission in connection with or
upon consummation of the Merger or the other transactions
contemplated hereby. Section 3.23 of the Company
Disclosure Schedule contains the Company’s good faith
estimate as of the date of this Agreement of all fees, expenses
or commissions that will be paid or will be payable by the
Company or any of its Subsidiaries to financial, legal and other
advisors for the provision of services to the Company in
connection with the consummation of the transactions
contemplated hereby, including litigation regarding the
transactions contemplated hereby, excluding any fees or expenses
incurred pursuant to Section 5.10 (“ Transaction
Fees ”). The Company and its Subsidiaries have,
prior to the date hereof, paid or committed to pay only those
Transaction Fees which have been or will be incurred by the
Company or by the Company’s directors in their capacity as
directors, and no Transaction Fees have been paid or committed
to be paid by the Company or its Subsidiaries for services
rendered to other Persons. The Company has provided to
Parent a copy of its agreement regarding payment of fees and
expenses to Deutsche Bank Securities Inc.
Section 3.24
State Takeover Statutes; Rights Plan
. The Company has taken all actions
necessary for purposes of Article 13.03 of the TBCA to ensure
that the restrictions of such provision are not applicable to
the Merger, the Rollover Commitments or other transactions
contemplated hereby, and no other “fair price,”
“moratorium,” “control share
acquisition” or other similar antitakeover statute or
regulation enacted under state or federal laws in the United
States is applicable to the Company with respect to the Merger,
the Rollover Commitments or other transactions contemplated
hereby. The Company has amended and taken all other
actions necessary to (a) render the Company Rights Agreement
inapplicable to this
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