<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------------
SCHEDULE 13D
(RULE 13d-101)
TRAVEL PORTS OF AMERICA, INC.
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(Name of Issuer)
COMMON STOCK, PAR VALUE $.01 PER SHARE
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(Title of Class of Securities)
894167105
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(CUSIP Number)
with a copy to:
---------------
EDWIN P. KUHN PHILIP M. DAWSON, ESQ.
President and Chief Executive Officer Calfee, Halter & Griswold LLP
TravelCenters of America 1400 McDonald Investment Center
24601 Center Ridge Road, Suite 200 800 Superior Avenue
Westlake, Ohio 44145 Cleveland, OH 44114-2688
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
FEBRUARY 26, 1999
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(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check
the following box [ ].
Note. Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7(b)
for other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 8 Pages)
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<TABLE>
<CAPTION>
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CUSIP NO. 894167105 13D PAGE 2 OF 8 PAGES
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<S> <C>
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
TravelCenters of America, Inc.
IRS Identification Number 36-3856519
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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- --------------------- --------- -------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
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BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 2,424,307
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EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
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PERSON WITH 10 SHARED DISPOSITIVE POWER
0
- --------------------- --------- -------------------------------------------------------------------------------------
- --------- -----------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,424,307
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
36.4%
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- --------- -----------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
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</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
(Page 2 of 8 Pages)
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SCHEDULE 13D
ITEM 1. SECURITY AND ISSUER.
--------------------
This statement is made with respect to the Common Stock, par value $.01
per share (the "Common Stock"), of Travel Ports of America, Inc., a corporation
organized under the laws of the State of New York (the "Issuer"). The address of
the principal executive offices of the Issuer is 3495 Winton Place, Building C,
Rochester, New York 14623.
ITEM 2. IDENTITY AND BACKGROUND.
------------------------
This statement is filed by TravelCenters of America, Inc.
("TravelCenters"). TravelCenters is a corporation organized under the laws of
the State of Delaware. The address of the principal offices of TravelCenters is
24601 Center Ridge Road, Suite 200, Westlake, Ohio 44145. TravelCenters owns,
operates and franchises full service travel centers with 146 network sites
throughout the United States. The travel centers are full service facilities
offering a broad range of fuel and nonfuel products, services and amenities to
trucking fleets, professional truck drivers and other motorists. In addition to
diesel fuel and gasoline, the travel centers provide truck maintenance and
repair services and products, full service and fast food dining, travel and
convenience stores, telecommunications services and various hospitality and
rest-related amenities.
The names of the directors and executive officers of TravelCenters,
their business addresses, their present principal occupations or employment, and
the name, principal business and address of any corporation or other
organization in which such employment is conducted other than TravelCenters are
set forth in Exhibit A attached hereto, which is incorporated herein by
reference.
Neither TravelCenters nor any of the individuals listed in Exhibit A
has, during the last five years, been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or was or is subject to a
judgment, decree or final order, enjoining future violations of, or prohibiting
or mandating activities subject to, United States Federal or state securities
laws or finding any violation with respect to such laws as a result of being a
party during the last five years to a civil proceeding of a judicial or
administrative body of competent jurisdiction.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
--------------------------------------------------
TravelCenters may be deemed to have acquired the beneficial ownership
of 2,424,307 shares of Common Stock as a result of the provisions of a Voting
Agreement, dated as of February 26, 1999, among TravelCenters, TP Acquisition,
Inc., a wholly owned subsidiary of TravelCenters ("Acquisition"), and E. Philip
Saunders and John M. Holahan (the "Voting Agreement"), attached hereto as
Exhibit B. TravelCenters may be deemed to share the power to vote such shares
under the provisions of the Voting Agreement, which is described in greater
detail in response to Item 6 and is incorporated herein by reference.
(Page 3 of 8 Pages)
<PAGE> 4
ITEM 4. PURPOSE OF TRANSACTION.
-----------------------
The purpose of the Voting Agreement, as described in greater detail in
Item 6 and incorporated herein by reference, is to ensure that Messrs. Saunders
and Holahan will cause the shares of Common Stock owned by them to be voted in
favor of the proposed merger of Acquisition with and into the Issuer (the
"Merger"), pursuant to the Agreement and Plan of Merger by and among the
TravelCenters, Acquisition and the Issuer, dated as of February 26, 1999 (the
"Merger Agreement," attached hereto as Exhibit C), at a special meeting of the
stockholders of the Issuer called for such purpose, or any adjournment thereof.
Approval of the Merger by the stockholders of the Issuer is a condition
precedent to the consummation of the Merger.
The Merger Agreement describes the terms under which TravelCenters
plans to acquire all of the outstanding shares of the Common Stock through the
Merger. The Issuer will be the surviving corporation and will continue its
corporate existence under the laws of the State of New York. Each share of the
Common Stock, other than shares owned by TravelCenters, the Issuer or their
respective affiliates, issued and outstanding immediately prior to the filing of
the certificate of merger (the "Certificate of Merger"), in the form required by
and executed in accordance with the Business Corporation Law of the State of New
York, will be converted into the right to receive cash in the amount of $4.30.
The Merger Agreement also permits TravelCenters to elect to structure the
Merger to allow TravelCenters to commence a tender offer to acquire all the
outstanding Common Stock, subject to certain restrictions set forth in Section
1.1 of the Merger Agreement and incorporated herein by reference.
Under the provisions of the Merger Agreement, the Issuer will duly
call, give notice of, convene and hold a special meeting of its stockholders to
vote upon the Merger Agreement and the Merger, and the Issuer's board of
directors will, subject to certain provisions of the Merger Agreement and
incorporated herein by reference, recommend to the Issuer's stockholders that
they approve the Merger Agreement and the Merger in a proxy statement of the
Issuer. Further, TravelCenters, Acquisition and the Issuer have agreed to cause
the Certificate of Merger to be executed and filed with the Secretary of State
of the State of New York, and to use their respective reasonable best efforts
to take all actions and to do all things necessary, proper or advisable to
consummate the Merger and the other transactions contemplated by the Merger
Agreement.
The closing of the Merger is subject to selective due diligence
matters, regulatory approvals and other customary closing conditions and both
TravelCenters and the Issuer are bound by customary restrictive covenants and
have made various representations and warranties, all as set forth more fully
in the Merger Agreement. The Merger Agreement is incorporated herein by
reference and this description is qualified in its entirety by reference to the
Merger Agreement.
In connection with the execution of the Merger Agreement, TravelCenters
also entered into a Share Exchange Agreement, dated February 26, 1998, between
TravelCenters and Mr. Saunders (the "Share Exchange Agreement," attached hereto
as Exhibit D and
(Page 4 of 8 Pages)
<PAGE> 5
incorporated herein by reference). The Share Exchange Agreement provides for the
acquisition by TravelCenters of 653,025 shares of Common Stock from Mr. Saunders
in exchange for 85,000 shares of common stock of TravelCenters (the "Share
Exchange"). The Share Exchange is conditioned upon the closing of the Merger and
will occur immediately prior to the Effective Time of the Merger (as defined in
Section 1.3 of the Merger Agreement and incorporated herein by reference).
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
-------------------------------------
(a) TravelCenters may be deemed to be the beneficial owner of
an aggregate of 2,424,307 shares of Common Stock pursuant to the Voting
Agreement. This aggregate number of shares represents approximately 36.4% of
the Issuer's issued and outstanding Common Stock.
(b) Pursuant to the terms of the Voting Agreement,
TravelCenters may be deemed to share the power to direct the vote of 2,424,307
shares of Common Stock with Messrs. Saunders and Holahan. TravelCenters has no
right to direct the disposition of the shares of Common Stock subject to the
Voting Agreement. To the best knowledge of TravelCenters, none of the persons
listed in Exhibit A beneficially owns any shares of the Common Stock. Mr.
Saunders is the Chairman and Chief Executive Officer of the Issuer and Mr.
Holahan is the President and Chief Operating Officer of the Issuer. The Issuer
is engaged in the operation of a regional network of 16 travel centers located
primarily in the northeastern United States, and its principal executive offices
are located at the address identified in Item 1. Neither Mr. Saunders nor Mr.
Holahan has, during the last five years, been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or was or is subject to a
judgment, decree or final order, enjoining future violations of, or prohibiting
or mandating activities subject to, United States Federal or state securities
laws or finding any violation with respect to such laws as a result of being a
party during the last five years to a civil proceeding of a judicial or
administrative body of competent jurisdiction.
(c) Other than as stated above with respect to the Merger
Agreement and the Share Exchange Agreement, no transactions in the Common Stock
were effected during the past 60 days by TravelCenters, or, to the best of
TravelCenters's knowledge, by any of the persons listed in Exhibit A.
(d) Mr. Saunders is the beneficial owner of 1,844,275 shares
of Common Stock and Mr. Holahan is the beneficial owner of 580,032 shares of
Common Stock. TravelCenters may be deemed to share the power to direct the vote
of the afore-mentioned securities pursuant to the Voting Agreement.
(e) The Voting Agreement will terminate (i) upon the
termination of the Merger Agreement in accordance with Article VIII thereof,
which is incorporated herein by reference, or (ii) from and after the Effective
Time of the Merger. TravelCenters will cease
(Page 5 of 8 Pages)
<PAGE> 6
to be a beneficial owner of the 2,424,307 shares of Common Stock upon
termination of the Voting Agreement pursuant to the termination of the Merger
Agreement in accordance with Article VIII thereof.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERTAKINGS OR RELATIONSHIPS WITH
-----------------------------------------------------------
RESPECT TO SECURITIES OF THE ISSUER.
------------------------------------
The Voting Agreement governs the voting of the shares of Common Stock
owned by Messrs. Saunders and Holahan. The purpose of the Voting Agreement is to
ensure that Messrs. Saunders and Holahan will cause the shares of Common Stock
owned by them to be voted in favor of the Merger at a special meeting of
stockholders of the Issuer called for such purpose, or any adjournment thereof.
The Voting Agreement prohibits Messrs. Saunders and Holahan from transferring
the shares of Common Stock owned by them, except that each of Messrs. Saunders
and Holahan may transfer up to 250,000 shares of the Common Stock to persons who
agree in writing to be bound by the Voting Agreement. In addition, in the event
that TravelCenters or Acquisition elect to purchase the Common Stock pursuant to
a tender offer as described in Item 4 above, Messrs Saunders and Holahan are
required by the terms of the Voting Agreement to validly tender and not withdraw
all shares of Common Stock owned by each of them not later than the fifteenth
business day after the commencement of such tender offer.
The Voting Agreement also requires Messrs. Saunders and Holahan, to the
extent stockholders of the Issuer are requested to vote on any such actions, to
vote against (i) any recapitalization, merger, consolidation, sale of assets or
other business combination or similar transaction involving the Issuer that is
not endorsed in writing by TravelCenters and (ii) any other action or agreement
that would result in a breach of any covenant, representation or warranty or any
other obligation or agreement of the Issuer under the Merger Agreement or that
could result in any of the conditions to the Issuer's obligations under the
Merger Agreement not being fulfilled. In addition Messrs. Saunders and Holahan
agreed not to, subject to certain exceptions set forth in the Merger Agreement
and incorporated herein by reference, (i) solicit, initiate, encourage,
facilitate or cooperate with any inquiry or the making of any proposal that
constitutes or may result in any Transaction Proposal (as defined in Section 6.5
of the Merger Agreement and incorporated herein by reference), (ii) propose,
enter into or participate in any discussions or negotiations with any person
regarding a Transaction Proposal or (iii) agree to or endorse any Transaction
Proposal.
The Voting Agreement is Exhibit B to this Schedule 13D and is
incorporated herein by reference, and this description is qualified in its
entirety by reference to the Voting Agreement.
As more fully set forth in Item 4 and incorporated herein by reference,
TravelCenters also entered into the Merger Agreement and the Share Exchange
Agreement. The Merger Agreement describes the terms under which TravelCenters
plans to acquire all of the outstanding shares of the Common Stock through the
Merger. The Share Exchange Agreement provides for the acquisition by
TravelCenters of 653,025 shares of Common Stock from Mr.
Saunders in exchange for 85,000 shares of common stock of TravelCenters.
(Page 6 of 8 Pages)
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ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
---------------------------------
Exhibit A List of Executive Officers and Directors of
TravelCenters
Exhibit B Voting Agreement, dated as of February 26, 1999,
among TravelCenters of America, Inc., TP
Acquisition, Inc. and E. Philip Saunders and John
M. Holahan
Exhibit C Agreement and Plan of Merger by and among
TravelCenters of America, Inc., TP
Acquisition, Inc. and Travel Ports of America,
Inc., dated as of February 26, 1999
Exhibit D Share Exchange Agreement by and among
TravelCenters of America, Inc. and E. Philip
Saunders, dated as of February 26, 1999
(Page 7 of 8 Pages)
<PAGE> 8
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
TRAVELCENTERS OF AMERICA, INC.
By: /s/ Edwin P. Kuhn
-------------------------
Edwin P. Kuhn
President and Chief Executive Officer
March 8, 1999
(Page 8 of 8 Pages)
<PAGE> 1
EXHIBIT A
LIST OF EXECUTIVE OFFICERS AND DIRECTORS OF TRAVELCENTERS OF AMERICA, INC.
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<TABLE>
<CAPTION>
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DIRECTORS AND EXECUTIVE RESIDENCE OR PRINCIPAL OCCUPATION
----------------------- ------------ --------------------
OFFICERS (CITIZENSHIP) BUSINESS ADDRESS
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<S> <C> <C>
Edwin P. Kuhn (U.S.) 24601 Center Ridge Road President, Chief Executive Officer
Director and Executive Officer Suite 200 and Director of TravelCenters and
Westlake, Ohio 44145 its subsidiaries.
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James W. George (U.S.) 24601 Center Ridge Road Senior Vice President, Chief
Executive Officer Suite 200 Financial Officer and Secretary of
Westlake, Ohio 44145 TravelCenters and its subsidiaries.
- --------------------------------------- -------------------------------------- --------------------------------------
Timothy L. Doane (U.S.) 24601 Center Ridge Road Senior Vice President, Market
Executive Officer Suite 200 Development of TravelCenters and its
Westlake, Ohio 44145 subsidiaries.
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Michael H. Hinderliter (U.S.) 24601 Center Ridge Road Senior Vice President, Marketing of
Executive Officer Suite 200 TravelCenters and its subsidiaries.
Westlake, Ohio 44145
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Steven C. Lee (U.S.) 24601 Center Ridge Road Vice President and General Counsel
Executive Officer Suite 200 of TravelCenters and its
Westlake, Ohio 44145 subsidiaries.
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Margaret M. Eisen (U.S.) GM Building Managing Director, North American
Director 767 Fifth Avenue Equities at General Motors
New York, New York 10153 Investment Management Corporation,
the investment advisor to First
Plaza Group Trust.
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Robert B. Calhoun, Jr. (U.S.) 650 Madison Avenue President of Clipper Capital
Director 9th Floor Partners L.P., which manages private
New York, New York 10022 equity investments on behalf of
institutional investors.
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Eugene P. Lynch (U.S.) 650 Madison Avenue Managing Director of Clipper Capital
Director 9th Floor Partners L.P., which manages private
New York, New York 10022 equity investments on behalf of
institutional investors.
- --------------------------------------- -------------------------------------- --------------------------------------
Louis J. Mischianti (U.S.) One Station Place Employed by Olympus Advisory
Director Stamford, Connecticut 06902 Partners, Inc., a private equity
company and an affiliate of Olympus
Private Placement Fund, L.P.
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</TABLE>
A-1
<PAGE> 2
<TABLE>
<S> <C> <C>
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Rolf H. Towe (U.S.) 650 Madison Avenue Senior Managing Director of Clipper
Director 9th Floor Capital Partners L.P., which manages
New York, New York 10022 private equity investments on behalf
of institutional investors.
- --------------------------------------- -------------------------------------- --------------------------------------
Harrison T. Bubb (U.S.) 57 York Drive Retired -- part-time consultant.
Director Hudson, Ohio 44236 Prior to retirement in April 1997,
Vice President, Strategic
Development (USA) of The British
Petroleum Company.
- --------------------------------------- -------------------------------------- --------------------------------------
</TABLE>
A-2
<PAGE> 1
Exhibit B
EXECUTION COPY
VOTING AGREEMENT
----------------
This VOTING AGREEMENT (this "Agreement"), dated as of the 26th
day of February, 1999, is entered into by and among TravelCenters of America,
Inc., a Delaware corporation ("TA"), TP Acquisition, Inc., a New York
corporation and wholly-owned subsidiary of TA ("Acquisition") and E. Philip
Saunders ("Saunders") and John M. Holahan ("Holahan") (each referred to
individually as a "Shareholder" and collectively as the "Shareholders") in their
individual capacity as shareholders of Travel Ports of America, Inc., a New York
corporation ("TP").
WHEREAS, concurrently herewith, TA, Acquisition and TP are
entering into an Agreement and Plan of Merger (the "Merger Agreement").
(Capitalized terms used without definition herein having the meanings ascribed
thereto in the Merger Agreement);
WHEREAS, concurrently herewith, TA and Saunders are entering
into a Share Exchange Agreement, dated the date hereof (the "Share Exchange
Agreement");
WHEREAS, prior to the execution thereof, the Board of
Directors of TP has approved and authorized the TP's execution, delivery and
performance of the Merger Agreement, as well as the transactions contemplated by
this Agreement, and the Share Exchange Agreement;
WHEREAS, each Shareholder is the record and Beneficial Owner
(as defined in Section 2(f) hereof) of that number of shares of TP common stock
(the "Shares") set forth on SCHEDULE A hereto;
WHEREAS, in addition to the Shares set forth on Schedule A,
each Shareholder Beneficially Owns (as defined in Section 2(f) hereof) that
number of shares of TP common stock subject to the proper exercise of options or
the conversion of warrants, bonds, debentures, promissory notes, etc.
(collectively, the "Convertible Securities"), all as more fully set forth on
SCHEDULE B hereto;
WHEREAS, approval of the Merger Agreement by TP's shareholders
at a specially convened shareholders' meeting (the "TP Special Meeting") is a
condition to the consummation of the Merger;
WHEREAS, as a condition to its entering into the Merger
Agreement, TA has required that Shareholders agree, and Shareholders have
agreed, to enter into this Voting Agreement; and
WHEREAS, Shareholders have been informed that the Board of
Directors of TP has authorized, approved and adopted the Merger Agreement.
<PAGE> 2
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements set forth herein, the parties hereto severally
agree as follows:
Section 1. Agreement to Vote, Restrictions on Dispositions, Etc.
(a) Each Shareholder hereby agrees to attend the TP Special
Meeting, in person or by proxy, and to vote (or cause to be
voted) all Shares, and any other voting securities of TP
owned by such Shareholder whether issued heretofore or
hereafter (including any shares of TP common stock issued in
connection with the exercise or conversion of a Convertible
Security), that such person owns or has the right to vote,
for approval and adoption of the Merger Agreement (as
amended from time to time) and the Plan of Merger, and the
transactions contemplated by the Merger Agreement, such
agreement to vote to apply also to any adjournment of the TP
Special Meeting. Each Shareholder agrees not to grant any
proxies or enter into any voting agreement or arrangement
inconsistent with this Agreement.
(b) Each Shareholder hereby agrees that, except in accordance
with the terms of the Merger Agreement, such Shareholder
shall not, directly or indirectly, sell, offer to sell,
grant any option for the sale of, or otherwise transfer or
dispose of, or enter into any agreement to sell, the Shares,
the Convertible Securities or any other voting securities of
TP that such Shareholder Beneficially Owns or otherwise
owns; except that (i) Saunders shall be permitted to sell
shares of TP common stock to TA pursuant to the Share
Exchange Agreement and (ii) each Shareholder may, transfer
up to 250,000 Shares to any transferee that agrees in
writing in a form reasonably acceptable to TA, to be bound
by the provisions of this Agreement applicable to such
Shareholder and no such transferee shall be permitted to
make any transfer or assignment other than in accordance
with the terms of this Agreement.
(c) To the extent TP solicits a vote of shareholders or the same
is required under New York law, each Shareholder agrees to
vote (or cause to be voted) the Shares, all TP shares issued
in connection with the exercise or conversion of the
Convertible Securities and any other voting securities of
TP, owned by such Shareholder whether issued heretofore or
hereafter, that such person owns or has the right to vote,
(i) against any recapitalization, merger, consolidation,
sale of assets or other business combination or similar
transaction involving TP or any of its Subsidiaries,
securities or assets which is not endorsed in writing by TA
and (ii) against any other action or agreement that would
result in a breach of any covenant, representation or
warranty or any other obligation or agreement of TP under
the Merger Agreement or which
2
<PAGE> 3
could result in any of the conditions to TP's obligations
under the Merger Agreement not being fulfilled.
(d) Each Shareholder agrees not to directly or indirectly (i)
solicit, initiate, encourage, facilitate or cooperate with
(including through the furnishing of any information) any
inquiry or the making of any proposal which constitutes, or
may be reasonably expected to result in, any Transaction
Proposal (as defined in the Merger Agreement); (ii) propose,
enter into or participate in any discussions or negotiations
with any Person regarding a Transaction Proposal; or (iii)
agree to or endorse any Transaction Proposal; PROVIDED,
HOWEVER, that the foregoing shall not prohibit the
Shareholders from (A) furnishing information to a
third party who has made a Superior Transaction Proposal (as
defined in the Merger Agreement), subject to the prior
receipt of a binding confidentiality agreement containing
terms and conditions no less restrictive than those set
forth in the Confidentiality Agreement dated October 19,
1998 between TP and TA, (B) thereafter engaging in
discussions or negotiations with a third party who has made
a Superior Transaction Proposal, or (C) following TP's
receipt of a Superior Transaction Proposal and subject to
Section 6.5(c) of the Merger Agreement, taking and
disclosing to other shareholders of TP a position with
respect thereto, or taking any other legally required action
with respect thereto (including without limitation the
filing of any documents with the SEC), but in each case
referred to in the foregoing clauses (A) through (C), only
after the Board of Directors of TP has concluded in good
faith, after consultation with TP's financial advisers and
based upon the advice of independent legal counsel (who may
be TP's regularly engaged legal counsel), that such action
is necessary in order for the Directors of TP to comply with
their fiduciary obligations to TP's shareholders under
applicable law.
(e) Each Shareholder agrees to promptly notify TA in writing of
the nature and amount of any acquisition by Shareholder
after the date hereof of any voting securities of TP,
including upon the exercise or conversion of any Convertible
Securities.
(f) In the event that TA and Acquisition elect to purchase
shares of TP pursuant to a cash tender offer (an "Offer"),
each Shareholder agrees to validly tender and not withdraw,
pursuant to and in accordance with the terms of the Offer,
not later than the fifteenth business day after the
commencement of the Offer and pursuant to Rule 14d-2 of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act), the Shares set forth on SCHEDULE A as well as that
number of shares of TP common stock issued to such
Shareholder in connection with his exercise or
3
<PAGE> 4
conversion of the Convertible Securities (the "Shares"
described on SCHEDULE A and the shares issued in connection
with the exercise or conversion of the
Convertible Securities described on SCHEDULE B
are collectively referred to as the "TP Common Shares").
Each Shareholder further agrees to permit TA and Acquisition
to publish and disclose his identity and ownership of the TP
Common Shares, and the nature of their commitments,
arrangements and understandings under this Agreement as may
be required by the Exchange Act and/or the Securities and
Exchange Commission or useful in connection with the filings
thereunder. TA agrees that, in the event of the commencement
of an Offer, the same consideration per share shall be paid
to all shareholders of TP, whether pursuant to such Offer or
any subsequent merger (except to the extent provided in the
Share Exchange Agreement) and shall otherwise comply with
Section 1.1 of the Merger Agreement.
Section 2. Additional Representations and Warranties of Shareholders.
Each Shareholder represents and warrants to TA as follows:
(a) such Shareholder has all necessary power and authority to
execute and deliver this Voting Agreement, to perform its
obligations hereunder and to consummate the transactions
contemplated hereby;
(b) this Voting Agreement has been duly executed and delivered
by such Shareholder;
(c) this Agreement constitutes the valid and binding agreement
of such Shareholder enforceable against such Shareholder in
accordance with its terms;
(d) the Shares described on SCHEDULE A hereto are the only
voting securities of TP owned by such Shareholder and are
owned free and clear of all liens, charges, encumbrances,
restrictions and commitments of any kind except for the
Share Exchange Agreement (in the case of Saunders). Upon any
exercise or conversion of the Convertible Securities, each
Shareholder will own his TP Common Shares free and clear of
all liens, charges, encumbrances, restrictions and
commitments of any kind except for the Share Exchange
Agreement (in the case of Saunders);
(e) the Convertible Securities and the shares subject thereto
described on SCHEDULE B are the only derivative or
convertible securities, or rights to acquire securities, of
TP owned by such Shareholder and are owned free and clear of
all liens, charges, encumbrances, restrictions and
commitments of any kind (except pursuant to the terms of
such
4
<PAGE> 5
instruments);
(f) Each Shareholder acknowledges that he Beneficially Owns (as
hereinafter defined) his Shares and that upon exercise or
conversion of the Convertible Securities, he will
Beneficially Own the TP Common Shares. "Beneficially Owns"
or "Beneficial Owner" with respect to any securities shall
mean having beneficial ownership of such securities as
determined pursuant to Section 13d-3 under the Exchange Act,
including pursuant to any agreement, arrangement or
understanding, whether or not in writing.
(g) such Shareholder has not appointed or granted any
irrevocable proxy, which appointment or grant is still
effective, with respect to the Shares owned by such
Shareholder;
(h) such Shareholder is not a party to any other voting
agreement, shareholders' agreement or other agreement or
arrangement with respect to the Shares or the Convertible
Securities owned by such Shareholder that contains any
covenant or provisions inconsistent with the terms hereof;
and
(i) each Shareholder acknowledges, and TA agrees, that the
restrictions imposed upon such Shareholder in this Voting
Agreement are so imposed only in Shareholder's capacity as a
shareholder of TP.
Section 3. Further Assurances.
Each party shall execute and deliver such additional instruments
and other documents and shall take such further actions as reasonably
may be necessary or appropriate to effectuate, carry out and comply
with all of their obligations under this Voting Agreement. Without
limiting the generality of the foregoing, none of the parties hereto
shall enter into any agreement or arrangement (or alter, amend or
terminate any existing agreement or arrangement) if such action would
materially impair the ability of such party to effectuate, carry out
or comply with all the terms of this Voting Agreement.
Section 4. Covenants of Shareholders.
(a) Subject to the provisions of Section 5 below, each
Shareholder hereby agrees that, except as contemplated by this Voting
Agreement, the Share Exchange Agreement and the Merger Agreement, such
Shareholder shall not enter into any voting agreement or grant an
irrevocable proxy or power of attorney with respect to the TP Common
Shares which is inconsistent with this Voting Agreement.
(b) At the Closing, Holahan agrees to execute that certain
Consulting
5
<PAGE> 6
Agreement as referenced in Section 7.2(j) of the Merger Agreement.
Section 5. Effectiveness and Termination.
It is a condition precedent to the effectiveness of this Voting
Agreement that the Merger Agreement shall have been executed and
delivered. This Voting Agreement shall automatically terminate and be
of no further force or effect upon the termination of the Merger
Agreement by TA or by TP in accordance with all of the provisions of
the Merger Agreement, including, if applicable, any requirement of TP
to pay an Immediate Termination Fee to TA and/or Acquisition prior to
or simultaneous with such termination as contemplated by the Merger
Agreement. Upon any termination of this Voting Agreement, except for
any rights any party may have in respect of any breach by another
party of its obligations hereunder, no one of the parties hereto shall
have any further obligation or liability hereunder. The provisions of
this Voting Agreement also shall terminate and be of no further force
or effect from and after the Effective Date of the Merger.
Section 6. Consideration.
Each Shareholder hereby acknowledges and agrees that TA is
entering into the Merger Agreement in reliance upon the execution by
the Shareholders of the Voting Agreement and that TA's execution of
the Merger Agreement (and the making by TA to TP of the various
representations, warranties and agreements contained therein, all of
which have been relied upon by Shareholders in connection with their
execution of this Voting Agreement) constitutes adequate consideration
and value for each Shareholder's execution of this Voting Agreement
and compliance with its terms.
Section 7. Miscellaneous.
(a) Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and
shall be deemed given if delivered personally or sent by
overnight courier to the parties at the following addresses
(or at such other address for a party as shall be specified
by like notice):
(i) If to TA or Acquisition, to:
TravelCenters of America, Inc.
24601 Center Ridge Road
Suite 200
Westlake, OH 44145-5634
Attention: Edwin P. Kuhn
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<PAGE> 7
with a copy to:
Calfee, Halter & Griswold LLP
1400 McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114
Attention: Philip M. Dawson, Esq.
(ii) If to TP, to:
Travel Ports of America, Inc.
3495 Winton Place
Building C
Rochester, NY 14623
Attention: E. Philip Saunders
with a copy to:
Harris, Beach & Wilcox, LLP
130 East Main Street
Rochester, New York 14604
Attention: Thomas E. Willett, Esq.
(b) Amendments, Waivers, Etc. This Voting Agreement may not be
amended, changed, supplemented, waived or otherwise modified
or terminated except by an instrument in writing signed by
TA and Shareholders.
(c) Successors and Assigns. Except as provided in Section 1(b),
neither this Voting Agreement nor any of the rights,
interests or obligations of the parties hereto shall be
assigned, in whole or in part, without prior written consent
of the other party, provided however, that TA or Acquisition
may, without the prior written consent of the Shareholders,
assign its rights under this Agreement to any (i) financial
institution that requires such assignment in connection with
such financial institution's agreement to provide financing
or (ii) affiliate of TA. Subject to the preceding sentence,
this Agreement shall be binding upon, inure to the benefit
of, and be enforceable by, the parties hereto and their
respective successors and assigns.
(d) Specific Performance. The parties acknowledge that money
damages are not an adequate remedy for violations of this
Voting Agreement and that any party may, in its sole
discretion, apply to a court of competent jurisdiction for
specific performance or injunction or such other relief as
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<PAGE> 8
such court may deem just and proper in order to enforce this
Voting Agreement or prevent any violation hereof without any
requirement for the posting of any bond, and, to the extent
permitted by applicable law, each party waives any objection
to the imposition of such relief.
(e) Governing Law. THIS VOTING AGREEMENT AND ALL DISPUTES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
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<PAGE> 9
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
TRAVELCENTERS OF AMERICA, INC.
By: /s/ Edwin P. Kuhn
_______________________________
Edwin P. Kuhn, President and
Chief Executive Officer
TP ACQUISITION, INC.
By: /s/Edwin P. Kuhn
_______________________________
Edwin P. Kuhn, President and
Chief Executive Officer
Name and Signature
------------------
/s/ E. Philip Saunders
---------------------------
E. Philip Saunders
/s/ John M. Holahan
----------------------------
John M. Holahan
9
<PAGE> 10
SCHEDULE A
----------
TO THE VOTING AGREEMENT
Name Number of Shares
---- -----------------
E. Philip Saunders 1,844,275
John M. Holahan 580,032
10
<PAGE> 11
SCHEDULE B
----------
TO THE VOTING AGREEMENT
Number of Shares Subject to
Options, Warrants, Bonds,
Name and Debentures
- ----- --------------
E. Philip Saunders 103,053
John M. Holahan 511,167
11
<PAGE> 1
Exhibit C
EXECUTION COPY
--------------
AGREEMENT AND PLAN OF MERGER
among
TRAVELCENTERS OF AMERICA, INC.,
TP ACQUISITION, INC.
and
TRAVEL PORTS OF AMERICA, INC.
Dated as of February 26, 1999
<PAGE> 2
TABLE OF CONTENTS
AGREEMENT AND PLAN OF MERGER
ARTICLE I
THE MERGER
1.1 THE MERGER. ..............................................2
1.2 CLOSING. .................................................2
1.3 EFFECTIVE TIME OF THE MERGER. ............................3
1.4 EFFECTS OF THE MERGER. ...................................3
1.5 CERTIFICATE OF INCORPORATION; BY-LAWS. ...................3
1.6 DIRECTORS. ...............................................3
1.7 OFFICERS. ................................................3
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITALIZATION
OF THE CONSTITUENT CORPORATIONS
2.1 EFFECT ON CAPITAL STOCK. .................................3
2.2 STOCK OPTIONS, WARRANTS AND CONVERTIBLE SECURITIES. ......4
2.3 EXCHANGE OF CERTIFICATES. ................................6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.1 ORGANIZATION, STANDING AND CORPORATE POWER. ..............8
3.2 SUBSIDIARIES. ............................................8
3.3 CAPITAL STRUCTURE. .......................................8
3.4 AUTHORITY; NONCONTRAVENTION; CONSENTS. ..................10
3.5 SEC DOCUMENTS; UNDISCLOSED LIABILITIES. .................11
3.6 INFORMATION SUPPLIED. ...................................11
3.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. ...................12
3.8 LITIGATION; LABOR MATTERS; COMPLIANCE WITH LAWS. ........12
3.9 MILLENNIUM COMPLIANCE. ..................................13
3.10 EMPLOYEE BENEFIT PLANS. .................................14
3.11 TAXES. ..................................................15
3.12 ENVIRONMENTAL MATTERS. ..................................16
3.13 MATERIAL CONTRACTS. .....................................18
3.14 BROKERS. ................................................19
3.15 OPINION OF FINANCIAL ADVISOR. ...........................19
3.16 BOARD RECOMMENDATION. ...................................19
3.17 REQUIRED COMPANY VOTE. ..................................19
3.18 STATE TAKEOVER STATUTES. ................................19
3.19 AFFILIATE. ..............................................20
3.20 INTELLECTUAL PROPERTY. ..................................20
3.21 RELATED PARTY TRANSACTIONS. .............................21
3.22 PERMITS. ................................................21
3.23 INSURANCE POLICIES. .....................................21
3.24 CERTAIN BUSINESS PRACTICES. .............................22
3.25 SUPPLIERS AND CUSTOMERS. ................................22
3.26 WARRANTIES. .............................................22
3.27 TITLE TO AND CONDITION OF ASSETS. .......................22
3.28 REAL ESTATE. ............................................23
3.29 PERK DEVELOPMENT CORP. ..................................26
3.30 VEHICLES. ...............................................26
i
<PAGE> 3
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER AND MERGERCO
4.1 ORGANIZATION, STANDING AND CORPORATE POWER. ...........26
4.2 AUTHORITY; NONCONTRAVENTION; CONSENTS. ................27
4.3 BROKERS. ..............................................28
4.4 INFORMATION SUPPLIED. .................................28
4.5 FINANCING. ............................................28
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR TO MERGER
5.1 CONDUCT OF BUSINESS IN ORDINARY COURSE. ...............29
5.2 CHANGES IN EMPLOYMENT ARRANGEMENTS. ...................31
5.3 SEVERANCE. ............................................32
5.4 WARN ACT. .............................................32
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 PROXY STATEMENT; SHAREHOLDERS MEETING. ................32
6.2 ACCESS TO INFORMATION; CONFIDENTIALITY. ...............33
6.3 REASONABLE BEST EFFORTS. ..............................33
6.4 PUBLIC ANNOUNCEMENTS. .................................34
6.5 OTHER OFFERS TO ACQUIRE THE COMPANY. ..................35
6.6 RESIGNATION OF DIRECTORS. .............................37
6.7 NOTIFICATION OF CERTAIN MATTERS. ......................37
6.8 STATE TAKEOVER LAWS. ..................................37
6.9 COMPANY 401(K) PLAN AND BONUS PLAN. ...................37
6.10 STATE ENVIRONMENTAL TRANSFER NOTIFICATIONS. ...........38
6.11 SEVERANCE PLAN. .......................................38
6.12 OPTION CANCELLATION AGREEMENTS. .......................38
6.13 WARRANT CANCELLATION AGREEMENTS. ......................38
6.14 REDEMPTION OF CONVERTIBLE DEBT SECURITIES. ............38
6.15 REPAYMENT OF INDEBTEDNESS. ............................39
6.16 ENVIRONMENTAL DILIGENCE. ..............................39
6.17 AMENDMENT OF SUBLEASE. ................................39
6.18 TERMINATION OF CONSULTING AGREEMENT FOR
E. PHILIP SAUNDERS. ...................................40
6.19 GRIFFITH OIL FUEL SUPPLY CONTRACT. ....................40
6.20 INDEMNIFICATION. ......................................40
6.21 PAYMENT OF TRANSFER TAXES. ............................41
6.22 NON-SOLICITATION OF EMPLOYEES. ........................41
6.23 CONFLICTS, VIOLATIONS, DEFAULTS, ASSIGNMENTS
AND NOTICES. ..........................................41
6.24 WYOMING LEASE. ........................................41
6.25 TERMINATION OF OPTIONS. ...............................42
ARTICLE VII
CONDITIONS PRECEDENT TO THE MERGER
7.1 CONDITIONS TO EACH PARTY'S OBLIGATION. ................42
7.2 CONDITIONS TO OBLIGATIONS OF THE BUYER AND MERGERCO. ..43
7.3 CONDITIONS TO OBLIGATIONS OF THE COMPANY. .............45
ii
<PAGE> 4
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1 TERMINATION. ..........................................46
8.2 EFFECT OF TERMINATION. ................................47
8.3 AMENDMENT. ............................................48
8.4 EXTENSION; WAIVER. ....................................48
8.5 PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION
OR WAIVER. ............................................48
ARTICLE IX
GENERAL PROVISIONS
9.1 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. ........48
9.2 FEES AND EXPENSES. ....................................48
9.3 NOTICES. ..............................................51
9.4 DEFINITIONS. ..........................................52
9.5 INTERPRETATION. .......................................55
9.6 COUNTERPARTS. .........................................55
9.7 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. .......55
9.8 GOVERNING LAW, JURISDICTION AND VENUE. ................55
9.9 ASSIGNMENT. ...........................................55
9.10 ENFORCEMENT. ..........................................56
iii
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is entered into as
of this 26th day of February, 1999, by and among TravelCenters of America, Inc.,
a Delaware corporation ("Buyer"), TP Acquisition, Inc., a New York corporation
and wholly owned subsidiary of Buyer ("MergerCo"), and Travel Ports of America,
Inc., a New York corporation (the "Company"). Capitalized terms not otherwise
defined herein are defined in Section 9.4 of this Agreement.
WHEREAS, the respective Boards of Directors of the Company, Buyer and
MergerCo have determined that the merger of MergerCo with and into the Company
(the "Merger"), upon the terms and subject to the conditions set forth in this
Agreement, is advisable and in the best interests of their respective companies
and shareholders, and such Boards of Directors have approved the Merger,
pursuant to which each common share, par value $.01 per share, of the Company
(the "Company Common Shares") issued and outstanding immediately prior to the
Effective Time of the Merger (as defined in Section 1.3) will be converted into
the right to receive cash, other than (i) Company Common Shares owned by the
Company or any of its Subsidiaries and (ii) Company Common Shares owned by
Buyer, MergerCo or any other Subsidiary of Buyer;
WHEREAS, the Merger and this Agreement require the affirmative vote of
the holders of two-thirds of the issued and outstanding Company Common Shares
for the approval thereof (the "Company Shareholder Approval");
WHEREAS, concurrently with the execution hereof, certain shareholders
of the Company have executed and delivered to Buyer and MergerCo a Voting
Agreement of even date herewith, in substantially the form attached hereto as
Exhibit A (the "Voting Agreement"), pursuant to which such shareholders have
agreed to vote in favor of the Merger and the adoption of this Agreement, and
which Voting Agreement has been relied upon by Buyer and MergerCo in their
respective decisions to execute this Agreement;
WHEREAS, concurrently with the execution hereof, E. Philip Saunders and
Buyer have executed and delivered a Share Exchange Agreement of even date
herewith, in substantially the form attached hereto as Exhibit B (the "Share
Exchange Agreement"), pursuant to which a contemplated share exchange (the
"Share Exchange") will occur prior to the Effective Time of the Merger (as
defined in Section 1.3), and which Share Exchange Agreement has been relied upon
by Buyer and MergerCo in their respective decisions to execute this Agreement;
WHEREAS, the Board of Directors of the Company has approved, in
addition to the Merger, the transactions contemplated by the Voting Agreement
and the Share Exchange Agreement; and
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<PAGE> 6
WHEREAS, Buyer, MergerCo and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger;
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
ARTICLE I
THE MERGER
1.1 THE MERGER. Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the Business Corporation Law of the
State of New York (the "NYBCL"), MergerCo shall be merged with and into the
Company at the Effective Time of the Merger (as defined in Section 1.3). At the
Effective Time of the Merger, the separate existence of MergerCo shall cease,
and the Company shall continue under the name "Travel Ports of America, Inc." as
the surviving corporation (the "Surviving Corporation") and shall be a wholly
owned subsidiary of Buyer. At the election of Buyer or MergerCo, (i) any direct
or indirect wholly owned subsidiary of Buyer may be substituted for and assume
all of the rights and obligations of MergerCo as a constituent corporation in
the Merger or (ii) the Company may be merged with and into MergerCo with
MergerCo continuing as the Surviving Corporation with the effects set forth
above and in Section 1.4. In either such event, the parties agree to execute an
appropriate amendment to this Agreement in order to reflect the foregoing. In
addition, at Buyer's election, the Merger may alternatively be structured to
allow Buyer to commence, or cause MergerCo, or any other direct or indirect
Subsidiary of Buyer, to commence, a tender offer to acquire all the Company
Common Shares; provided, however, that, in the event of the commencement of a
tender offer, the same consideration per share shall be paid to all shareholders
of the Company, whether pursuant to the tender offer or any subsequent merger
(except to the extent provided in the Share Exchange Agreement) and, provided,
further, that no such change shall (i) reduce or change the form of the Merger
Consideration (as defined in Section 2.1(d)), (ii) diminish the benefits to be
received by directors, officers or employees of the Company or alter or change
the amount or kind of consideration for, or the treatment of, Company Stock
Options, Company Warrants or Convertible Debt Securities as set forth in this
Agreement, (iii) adversely affect the tax treatment to the Company's
shareholders as a result of receiving the Merger Consideration, (iv) materially
impede or delay consummation of the Merger or (v) result in any representation
or warranty of any party becoming incorrect in any material respect. In the
event of such an election, the parties agree to execute an appropriate amendment
to this Agreement in order to reflect such election.
1.2 CLOSING. Unless this Agreement shall have been terminated pursuant
to Section 8.1, and subject to the satisfaction or waiver of the conditions set
forth in Article VII, the closing of the Merger (the "Closing") shall take place
at 10:00 a.m. on the second business day after the satisfaction or waiver of the
conditions set forth in Article VII (the "Closing Date"), at the offices of
Calfee, Halter & Griswold LLP, 1400 McDonald Investment Center,
2
<PAGE> 7
800 Superior Avenue, Cleveland, Ohio 44114-2688, unless another date, time or
place is agreed to in writing by the parties.
1.3 EFFECTIVE TIME OF THE MERGER. On the Closing Date, the parties
shall file a Certificate of Merger and other appropriate documents
(collectively, the "Certificate of Merger") with the Department of State of the
State of New York, executed in accordance with the relevant provisions of the
NYBCL, and the parties shall make all other filings or recordings required under
the NYBCL in connection with the Merger. The Merger shall become effective at
such time as the Certificate of Merger is duly filed with the Department of
State of the State of New York or at such other time as is agreed to by the
Company and MergerCo and is specified in the Certificate of Merger in accordance
with the NYBCL (the "Effective Time of the Merger").
1.4 EFFECTS OF THE MERGER. The Merger shall have the effects set forth
in the NYBCL.
1.5 CERTIFICATE OF INCORPORATION; BY-LAWS. The Certificate of
Incorporation and By-Laws of the Company, as in effect immediately prior to the
Effective Time of the Merger, shall be the Certificate of Incorporation and
By-laws of the Surviving Corporation following the Merger.
1.6 DIRECTORS. The directors of MergerCo at the Effective Time of the
Merger shall be the directors of the Surviving Corporation following the Merger,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
1.7 OFFICERS. The officers of MergerCo at the Effective Time of the
Merger shall be the officers of the Surviving Corporation following the Merger,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITALIZATION
OF THE CONSTITUENT CORPORATIONS
2.1 EFFECT ON CAPITAL STOCK. At the Effective Time of the Merger, by
virtue of the Merger and without any action on the part of the holder of any
Company Common Shares or any shares of capital stock of MergerCo:
(a) COMMON SHARES OF MERGERCO. Each common share of MergerCo issued and
outstanding immediately prior to the Effective Time of the Merger shall be
converted into one common share, par value $.01 per share, of the Surviving
Corporation.
(b) CANCELLATION OF TREASURY SHARES OF THE COMPANY. Each Company Common
Share that is owned by the Company or any of its Subsidiaries ("Treasury
Shares") shall be canceled and retired and shall cease to exist, and no cash or
other consideration shall be delivered or deliverable in exchange therefor.
3
<PAGE> 8
(c) CANCELLATION OF EXCLUDED SHARES. Each Company Common Share owned by
Buyer, MergerCo or any other Subsidiary of Buyer ("Excluded Shares") issued and
outstanding immediately prior to the Effective Time of the Merger shall be
canceled and retired and shall cease to exist, and no cash or other
consideration shall be delivered or deliverable in exchange therefor.
(d) CONVERSION OF COMPANY COMMON SHARES. Subject to Section 2.3 below,
each issued and outstanding Company Common Share, other than Excluded Shares,
shall be converted into the right to receive in cash from the Surviving
Corporation following the Merger an amount equal to $4.30 (the "Merger
Consideration"). Contextually, the term "Merger Consideration" shall mean the
per share amount in reference to the consideration designated on a per share
basis, and otherwise shall refer to the aggregate consideration represented by
the per share amount multiplied by the total number of Company Common Shares
(other than Excluded Shares) then outstanding. Subject to any applicable tax
withholding requirements, the Merger Consideration shall be paid to the holders
of Company Common Shares in cash.
(e) CANCELLATION OF COMPANY COMMON SHARES. At the Effective Time of the
Merger, all Company Common Shares issued and outstanding immediately prior to
the Effective Time of the Merger shall no longer be outstanding and
automatically shall be canceled and retired and shall cease to exist, and each
holder of a certificate representing any such Company Common Shares shall cease
to have any rights with respect thereto, except the right, if any, under this
Section 2.1 to receive the Merger Consideration applicable thereto upon the
surrender of such certificate in accordance with Section 2.3.
2.2 STOCK OPTIONS, WARRANTS AND CONVERTIBLE SECURITIES. As soon as
practicable following the date of this Agreement, the Board of Directors of the
Company (or, if appropriate, any committee administering the Company Stock
Option Plans (as defined below)) shall adopt such resolutions or take such other
actions as may be required to effect the following:
(a) amend the Roadway Motor Plazas, Inc. Employees Incentive
Stock Option Plan, the Roadway Motor Plazas, Inc. 1991 Employees Incentive Stock
Option Plan, the Travel Ports of America, Inc. 1993 Employees Incentive Stock
Option Plan, the Travel Ports of America, Inc. 1995 Employees Incentive Stock
Option Plan, the 1996 Incentive Stock Option Plan and any other existing plans
(collectively, the "Company Stock Option Plans") and/or adjust the terms of each
outstanding option to purchase any Company Common Shares (collectively, "Company
Stock Options") granted thereunder and remaining unexercised to provide that, no
less than 10 business days prior to the Effective Time of the Merger, each
Company Stock Option outstanding immediately prior to such time shall vest;
(b) as soon as practicable following the date of this
Agreement, but in no event later than two business days following the mailing of
the Proxy Statement, cause written notification of the Merger to be given to
each holder of Company Stock Options granted under the Company Stock Option
Plans and obtain, as promptly thereafter as reasonably practicable,
4
<PAGE> 9
from each holder of Company Stock Options an agreement, in form and substance
satisfactory to Buyer (an "Option Cancellation Agreement"), requiring each
holder thereof (i) with respect to any such Company Stock Options having an
exercise price less than the Merger Consideration, either to (A) exercise such
Company Stock Option (whether or not such Company Stock Option was exercisable
immediately before such notification was given) no later than the Effective Time
of the Merger or (B) elect to receive a cash payment in an amount equal to the
product of (I) the total number of Company Common Shares subject to such Company
Stock Option and (II) the excess of the Merger Consideration over the exercise
price per share of Company Common Shares subject to such Company Stock Option,
payable promptly following the Effective Time of the Merger and (ii) with
respect to all Company Stock Options held by such holder, regardless of the
exercise price thereof or any election made pursuant to the foregoing provision,
to surrender all rights with respect to each Company Stock Option as of the
Effective Time of the Merger;
(c) cause timely written notification of the Merger to be
given to each holder of an outstanding warrant (a "Company Warrant"), including,
without limitation, the warrants governed by the Cephas Capital Partners, L.P.
Stock Purchase Warrant (the "Cephas Warrant Agreement") or the 1995 Warrant
Agreement (the "1995 Warrant Agreement") (collectively, the "Warrant
Agreements"), and obtain from each holder of Company Warrants an agreement, in
form and substance satisfactory to Buyer (a "Warrant Cancellation Agreement"),
requiring each holder thereof (i) with respect to such Company Warrants having
an exercise or conversion price less than the Merger Consideration, either to
(A) exercise such Company Warrant in accordance with the terms of each Warrant
Agreement or (B) elect to receive a cash payment in an amount equal to the
product of (I) the total number of Company Common Shares subject to such Company
Warrant and (II) the excess of the Merger Consideration over the exercise price
per share of Company Common Shares subject to such Company Warrant payable
promptly following the Effective Time of the Merger or (ii) in the case of
Company Warrants, including warrants granted under the Cephas Warrant Agreement,
which are not in the money, cause the cancellation of such Company Warrants by
taking such other steps as may be necessary in order to cause such
cancellations; including making all payments required to be made in connection
therewith, and, in either case, with respect to all Company Warrants, regardless
of the exercise or conversion price thereof, to surrender all rights with
respect to each Company Warrant as of the Effective Time of the Merger;
(d) cause each outstanding convertible debt security,
including, without limitation, the Company's 8.5% Senior Subordinated
Convertible Debentures due January 15, 2005 (the "Convertible Debentures") and
the Company's 7.81% Convertible Subordinated Note due December 4, 2007 (the
"Convertible Note" and, collectively with the Convertible Debentures, the
"Convertible Debt Securities"), to be redeemed or otherwise paid in full, or, at
the option of the holder thereof, to be converted into Company Common Shares, in
accordance with the terms thereof, prior to the Effective Time of the Merger;
provided, however, that no such redemption or payment of the Convertible Note
shall occur without the prior consent and approval of Buyer; and
5
<PAGE> 10
(e) except as provided herein or as otherwise agreed to by the
parties, the Company Stock Option Plans, the Warrant Agreements, the Convertible
Debt Securities (and any indenture or other agreement governing the terms
thereof) and any other plans, programs or arrangements providing for the
issuance or grant of any other interest in respect of the capital stock of the
Company or any Subsidiary shall terminate as of the Effective Time of the
Merger, and the Company shall ensure that following the Effective Time of the
Merger no holder of a Company Stock Option, a Company Warrant, any Convertible
Debt Securities nor any participant in any Company Stock Option Plan shall have
any right thereunder to acquire any equity securities of the Company or the
Surviving Corporation following the Merger.
Notwithstanding the foregoing, any payments made by the Company to holders of
Company Stock Options, Company Warrants or Convertible Debt Securities pursuant
to this Section 2.2 shall be reduced by any applicable withholding taxes and
shall be subject to the prior approval of Buyer. The Company shall provide Buyer
with a reasonable opportunity to review and comment on all notices,
correspondence and Contracts delivered pursuant to or in connection with this
Section 2.2 prior to the delivery of such documents and the Company shall use
its best efforts to reflect all such reasonable comments. The Company hereby
represents and warrants upon the taking of the actions specified above,
immediately following the Effective Time of the Merger, and after giving effect
to the payments described in this Section 2.2, no holder of a Company Stock
Option, or any participant in any Stock Option Plan, or any holder of any
Company Warrant or Company Debt Security shall have the right thereunder to
acquire equity securities of the Company or the Surviving Corporation, or any
other benefit, after the Merger.
2.3 EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. At the Effective Time of the Merger, Buyer shall
deposit or cause to be deposited the aggregate Merger Consideration with The
Chase Manhattan Bank, which shall act as exchange agent (the "Exchange Agent")
for the benefit of the holders of Company Common Shares and for exchange in
accordance with this Article II. Promptly after the Effective Time of the
Merger, the Exchange Agent shall mail to each record holder (other than holders
of Excluded Shares), as of the Effective Time of the Merger, of an outstanding
certificate or certificates that immediately prior to the Effective Time of the
Merger represented Company Common Shares (the "Certificates"), a letter of
transmittal and instructions for use in effecting the surrender of the
Certificates for payment therefor (or such other documents as may reasonably be
required in connection with such surrender) in customary form to be agreed upon
by Buyer and the Company prior thereto.
(b) EXCHANGE PROCEDURES. After the Effective Time of the Merger, each
holder of an outstanding Certificate or Certificates shall, upon surrender to
the Exchange Agent of such Certificate or Certificates and acceptance thereof by
the Exchange Agent, be entitled to receive the amount of Merger Consideration
into which such surrendered Certificate or Certificates shall have been
converted pursuant to this Agreement. After the Effective Time of the Merger,
there shall be no further transfer on the records of the Company or its transfer
agent of Certificates, and if Certificates are presented to the Company for
transfer, they shall be
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canceled against delivery of the Merger Consideration applicable thereto. If the
Merger Consideration is to be remitted to a name other than that in which any
Certificate surrendered for exchange is registered, it shall be a condition of
such exchange that such Certificate shall be properly endorsed, with signature
guaranteed, or otherwise in proper form for transfer and that the Person
requesting such exchange shall pay to the Surviving Corporation or its transfer
agent any transfer or other taxes required or establish to the satisfaction of
the Surviving Corporation or its transfer agent that such tax has been paid or
is not applicable. Until surrendered as contemplated by this Section 2.3(b),
each Certificate shall be deemed at any time after the Effective Time of the
Merger to represent only the right to receive upon such surrender the Merger
Consideration applicable thereto as contemplated by Section 2.1. NO INTEREST
WILL BE PAID OR WILL ACCRUE ON ANY CASH PAYABLE AS MERGER CONSIDERATION. In the
event any Certificate shall have 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 Buyer, the posting by such Person of a
bond in such amount as Buyer reasonably may direct as indemnity against any
claim that may be made against it with respect to such Certificate, or the
rovision of other reasonable assurances requested by Buyer, the Exchange Agent
will issue in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration deliverable with respect thereto pursuant to this Agreement.
(c) NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON SHARES EXCHANGED FOR
CASH. All cash paid upon the surrender for exchange of Certificates in
accordance with the terms of this Article II shall be deemed to have been paid
in full satisfaction of all rights pertaining to the shares represented by such
Certificates.
(d) TERMINATION OF EXCHANGE FUND. Any portion of the Merger
Consideration deposited with the Exchange Agent pursuant to this Section 2.3
(the "Exchange Fund") that remains undistributed to the holders of Certificates
for six months after the Effective Time of the Merger shall be delivered to the
Surviving Corporation upon demand therefor, and any holders of Company Common
Shares prior to the Merger who have not theretofore complied with this Article
II shall thereafter look only to the Surviving Corporation, and only as general
creditors thereof, for payment of any claim for cash to which such holders may
be entitled.
(e) NO LIABILITY. None of Buyer, MergerCo, the Company or the Exchange
Agent shall be liable to any Person in respect of any cash from the Exchange
Fund delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law. If any Certificate shall not have been
surrendered prior to the earlier of (i) one year after the Effective Time of the
Merger and (ii) immediately prior to the date on which any cash in respect of
such Certificate would otherwise escheat to or become the property of any
Governmental Entity, any such cash, dividends or distributions in respect of
such Certificate shall, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all claims or interests
of any Person previously entitled thereto.
(f) INVESTMENT OF EXCHANGE FUND. The Exchange Agent shall invest any
cash included in the Exchange Fund in U.S. Treasury securities or obligations of
or guaranteed by
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the United States of America or any agency thereof with a maturity not later
than one year from the date of this Agreement, either outright or in connection
with repurchase agreements covering such obligations, or in any fund that
invests solely in such securities, as directed by Buyer. Any interest and other
income resulting from such investments shall be paid to Buyer.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as specifically referenced or accrued and reserved for in the
SEC Financial Statements (as defined in Section 3.5), the Company hereby
represents and warrants to Buyer and MergerCo as follows:
3.1 ORGANIZATION, STANDING AND CORPORATE POWER. Each of the Company and
its Subsidiaries is duly organized, validly existing and in good standing under
the laws of the jurisdiction in which it is incorporated and has the requisite
power and authority to own, lease and operate its assets and to carry on its
business as and where such assets are now owned or leased and operated and as
such business presently is being conducted. Set forth in Section 3.1 of the
attached Disclosure Schedule delivered by the Company to MergerCo at the time of
execution of this Agreement (the "Disclosure Schedule") are complete and correct
copies of the Certificate of Incorporation, as amended, and By-Laws, as amended,
of the Company. The Company has delivered to MergerCo complete and correct
copies of the Certificate of Incorporation and By-Laws (or other comparable
organizational documents) of each of the Subsidiaries of the Company, in each
case as amended to the date of this Agreement. Each of the Company and its
Subsidiaries is duly qualified or licensed to do business and is in good
standing in each jurisdiction listed in Section 3.1 of the Disclosure Schedule
and in each other jurisdiction in which the nature of its business or the
ownership or leasing of its assets makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so qualified
or licensed (individually or in the aggregate) would not have a Material Adverse
Effect with respect to the Company.
3.2 SUBSIDIARIES. Section 3.2 of the Disclosure Schedule lists all of
the Subsidiaries of the Company. All of the outstanding shares of capital stock,
partnership interests, membership interests or other ownership interests of each
such Subsidiary have been validly issued and are fully paid and nonassessable
and are owned (of record and beneficially) by the Company free and clear of all
Liens. Except for the ownership interests disclosed in Section 3.2 of the
Disclosure Schedule, the Company does not own, directly or indirectly, any
capital stock of, or other ownership interests in, any other Person.
3.3 CAPITAL STRUCTURE.
(a) EQUITY SECURITIES. The authorized capital stock of the Company
consists of 10,000,000 Company Common Shares and 1,000 preferred shares, par
value $.01 per share (the "Company Preferred Shares"). There are no outstanding
Company Preferred Shares. As of the close of business on February 12, 1999,
there were (i) 6,655,972 Company Common
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Shares issued and outstanding, (ii) no Treasury Shares, (iii) 906,565 Company
Common Shares issuable upon the exercise of outstanding Company Stock Options,
(iv) 179,960 Company Common Shares reserved for issuance upon the exercise of
authorized but unissued Company Stock Options, (v) 143,943 Company Common Shares
issuable upon the conversion of outstanding Company Warrants and (vi) 1,762,056
Company Common Shares issuable upon the exercise of the outstanding Convertible
Debt Securities. Section 3.3(a) of the Disclosure Schedule sets forth the
exercise or conversion price, as the case may be, as of the date hereof for each
outstanding Company Stock Option, each outstanding Company Warrant and each
outstanding Convertible Debt Security. Except as set forth above or in Section
3.3(a) of the Disclosure Schedule, no shares of capital stock or other equity
securities of the Company are outstanding or reserved for issuance. All
outstanding Company Common Shares are, and all Company Common Shares that may be
issued pursuant to the exercise of Company Stock Options, the Company Warrants
and the Convertible Debt Securities will be when issued, duly authorized,
validly issued, fully paid and nonassessable and not subject to any preemptive
rights. Except as described in this Section 3.3 or in Section 3.3(a) of the
Disclosure Schedule, there are no outstanding securities, options, warrants,
calls, rights or Contracts of any kind to which the Company or any of its
Subsidiaries is a party or by which any of them is bound obligating the Company
or any of its Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other equity or voting
securities of the Company or of any of its Subsidiaries or obligating the
Company or any of its Subsidiaries to issue, grant, extend or enter into any
such security, option, warrant, call, right or Contract. Except as set forth in
Section 3.3(a) of the Disclosure Schedule, (i) neither the Company nor any of
its Subsidiaries is a party to or is bound by any Contract to repurchase, redeem
or otherwise acquire or make any payment in respect of any shares of capital
stock of the Company or any of its Subsidiaries and (ii) to the Knowledge of the
Company, there are no irrevocable proxies with respect to any shares of capital
stock of the Company or any of its Subsidiaries.
(b) INDEBTEDNESS. Set forth in Section 3.3(b) of the Disclosure
Schedule is all outstanding Indebtedness of the Company and its Subsidiaries
and, except with respect to any capital leases of the Company that are not in
default or accelerated under the terms of such lease, all fees and penalty
payments or other costs associated with the prepayment of such Indebtedness.
(c) STOCK OWNERSHIP OF AFFILIATES. Section 3.3(c) of the Disclosure
Schedule sets forth the record and, to the Knowledge of the Company, beneficial
ownership of, and voting power in respect of, the capital stock of the Company
held by the Company's directors and officers and held by shareholders owning
five percent (5%) or more of the outstanding Company Common Shares.
(d) AGREEMENTS WITH SHAREHOLDERS. Except for the Contracts disclosed in
Section 3.3(d) of the Disclosure Schedule, there are no Contracts pursuant to
which the Company is or could be required to register Company Common Shares or
other securities under the Securities Act or, to the Knowledge of the Company,
other Contracts with or among any security holders of the Company with respect
to any securities of the Company.
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3.4 AUTHORITY; NONCONTRAVENTION; CONSENTS.
(a) AUTHORITY. The Company has the requisite corporate power and
authority to enter into this Agreement and, subject to the receipt of Company
Shareholder Approval with respect to the Merger, to consummate the transactions
contemplated hereby (including the transactions contemplated by the Voting
Agreement and the Share Exchange Agreement). The execution and delivery of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby (including the transactions contemplated by the Voting
Agreement and the Share Exchange Agreement) have been duly authorized by the
Company's Board of Directors, which constitutes all necessary corporate action
on the part of the Company, subject, in the case of the Merger, to the receipt
of Company Shareholder Approval. This Agreement has been duly executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms subject,
as to enforceability, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights and subject
to general principles of equity.
(b) NONCONTRAVENTION. Except as disclosed in Section 3.4(b) of the
Disclosure Schedule, the execution and delivery of this Agreement, the Voting
Agreement and the Share Exchange Agreement do not, and the consummation of the
transactions contemplated thereby, including consummation of the Merger, will
not, conflict with, or result in any breach or violation of, or result in any
default (with or without notice or the lapse of time, or both) under, or give
rise to a right of termination, cancellation, acceleration or "put" with respect
to, or result in the loss of any benefit or other right or the creation of any
Lien upon any of the properties or assets of the Company or any of its
Subsidiaries, under (i) the Certificate of Incorporation, as amended, or
By-Laws, as amended, of the Company or the comparable organizational documents
of any of its Subsidiaries, (ii) any Contract to which the Company or any of its
Subsidiaries is a party or to which any of their respective properties or assets
is subject, (iii) any Permit issued to the Company or any of its Subsidiaries or
to which any of their respective properties or assets is subject, or (iv) any
law, regulation, rule, judgment, order, decree or arbitration award to which the
Company or any of its Subsidiaries or any of their respective properties or
assets is subject other than any such conflicts, violations or defaults that are
set forth on Section 3.4(b) of the Disclosure Schedule and will be cured or
waived prior to the Shareholders Meeting.
(c) CONSENTS. No consent, approval, order or authorization of, or
registration, declaration or filing with, or notice to, any Governmental Entity
or any other Person under any Contract to which the Company or any Subsidiary is
a party or to which any of their respective properties or assets is subject, or
under any Permit issued to the Company or any of its Subsidiaries or to which
any of their respective properties or assets is subject, is required in
connection with the execution and delivery of this Agreement, the Voting
Agreement or the Share Exchange Agreement by the Company or the consummation by
the Company of the transactions contemplated thereby, other than (i) the filing
of a pre-merger notification and report form by the Company under the HSR Act,
(ii) the filing with the SEC of a proxy statement relating to the Company
Shareholder Approval (such proxy statement as amended or
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<PAGE> 15
supplemented from time to time, the "Proxy Statement") and such reports under
the Exchange Act as may be required in connection with this Agreement and the
transactions contemplated hereby, (iii) the filing of the Certificate of Merger
with the Department of State of the State of New York and appropriate documents
with the relevant authorities of other states in which the Company is qualified
to do business, (iv) such other consents, approvals, orders, authorizations,
registrations, declarations, filings or notices as are set forth in Section
3.4(c) of the Disclosure Schedule and (v) consents that are not material to the
transactions contemplated hereby or to Surviving Corporation's financial
condition, results of operations or ownership or usefulness of its assets.
3.5 SEC DOCUMENTS; UNDISCLOSED LIABILITIES.
(a) SEC DOCUMENTS. The Company has timely filed all required reports,
schedules, forms, statements and other documents with the SEC since January 1,
1996 (collectively, and in each case including all exhibits and schedules
thereto and documents incorporated by reference therein, as amended, the "SEC
Documents"). As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such SEC Documents, and none of the SEC Documents
(including any and all financial statements included therein) as of such dates
contained any untrue statement of a material fact or omitted to state a 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
misleading. The consolidated financial statements (including footnotes) of the
Company included in the SEC Documents (the "SEC Financial Statements") comply as
to form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles (except, in
the case of unaudited consolidated quarterly statements, as permitted by Form
10-Q of the SEC) applied on a consistent basis during the periods involved
(except as may be specifically indicated in the notes thereto), and fairly
present the consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and the consolidated income, shareholders'
equity and cash flows for the periods then ended.
(b) UNDISCLOSED LIABILITIES. Except as disclosed in Section 3.5 of the
Disclosure Schedule, neither the Company nor any of its Subsidiaries has any
Liabilities other than (i) Liabilities reflected in accordance with generally
accepted accounting principles applied on a consistent basis on the most recent
balance sheet of the Company and its consolidated Subsidiaries included in the
SEC Financial Statements, (ii) Liabilities incurred in the ordinary course of
business consistent with past practice since the date of the most recent balance
sheet of the Company and its consolidated Subsidiaries included in the SEC
Financial Statements, and (iii) Liabilities specifically incurred in connection
with the transactions contemplated by this Agreement.
3.6 INFORMATION SUPPLIED. None of the information supplied or to be
supplied by the Company for inclusion or incorporation by reference in the Proxy
Statement will, at the
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date the Proxy Statement is first mailed to the Company's shareholders or at the
time of the Shareholders Meeting (as defined in Section 6.1), 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 misleading, except that no
representation or warranty is made by the Company with respect to the
information supplied by Buyer, MergerCo or any of their Affiliates in writing
specifically for inclusion in the Proxy Statement. The Proxy Statement will
comply as to form in all material respects with the requirements of the Exchange
Act and the rules and regulations promulgated thereunder.
3.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the
SEC Documents or in Section 3.7 of the Disclosure Schedule, since April 30,
1998, each of the Company and its Subsidiaries has conducted its business only
in the ordinary course consistent with past practice, and there is not and has
not been (i) any Material Adverse Change with respect to the Company, (ii) any
condition, event or occurrence that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect or give rise to a
Material Adverse Change with respect to the Company, (iii) any event that, if it
had taken place following the execution of this Agreement, would not have been
permitted by Section 5.1 hereof without the prior written consent of MergerCo,
or (iv) any condition, event or occurrence that could reasonably be expected to
prevent, hinder or materially delay the ability of the Company to consummate the
transactions contemplated by this Agreement.
3.8 LITIGATION; LABOR MATTERS; COMPLIANCE WITH LAWS.
(a) LITIGATION. Except as disclosed in Section 3.8(a) of the Disclosure
Schedule, there is no claim, suit, action, investigation or proceeding pending
or, to the Knowledge of the Company, threatened against or involving the Company
or any of its Subsidiaries that, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect with respect to the
Company or prevent, hinder or materially delay the ability of the Company to
consummate the transactions contemplated by this Agreement nor is there any
judgment, decree, injunction, rule, order or arbitration award outstanding
against the Company or any of its Subsidiaries having or which in the future
could have any such effect.
(b) LABOR MATTERS. Except as disclosed in Section 3.8(b) of the
Disclosure Schedule, (i) neither the Company nor any of its Subsidiaries is a
party to, or is bound by, any collective bargaining agreement or other Contract
with any labor union or labor organization and, to the Knowledge of the Company,
within the past three years there has not been any attempt by any labor
organization to organize any of the employees of the Company or any Subsidiary
into a collective bargaining unit, and there is no imminent threat of an attempt
to organize such a union, (ii) neither the Company nor any of its Subsidiaries
has been notified of any proceeding asserting that it has committed an unfair
labor practice or seeking to compel it to bargain with any labor organization as
to wages or conditions of employment, (iii) there is no strike, work stoppage or
other labor dispute involving the Company or any of its Subsidiaries pending or,
to the Knowledge of the Company, threatened, (iv) there are no pending claims by
any of the employees, former employees or beneficiaries of employees of
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the Company or any of its Subsidiaries with respect to their employment or the
benefits incident thereto, including without limitation any discrimination
claims, sexual harassment claims or workers' compensation claims and (v) other
than any Liability arising directly from an act of the Buyer not otherwise
contemplated by this Agreement or the transactions contemplated hereby, neither
the Company nor any of its Subsidiaries is liable for any severance pay or other
payments to any employee, former employee or beneficiary of any employee or
former employee, arising out of any termination of employment or other change in
the legal relationship with such Person or under any Employee Benefit Plan or
Other Plan, nor will the Company or any of its Subsidiaries have any Liability,
under any applicable Law or otherwise, as a result of the transactions
contemplated hereby or as a result of the termination of any employees by the
Company or any of its Subsidiaries prior to the Effective Time of the Merger.
(c) COMPLIANCE WITH LAWS. Except as disclosed in Section 3.8(c) of the
Disclosure Schedule, neither the Company nor any of its Subsidiaries is in
violation of any law, regulation or rule that, individually or in the aggregate,
would have or could reasonably be expected to have a Material Adverse Effect on
the Company. Except as disclosed in Section 3.8(c) of the Disclosure Schedule,
there have been no allegations or inquiries concerning any violation of any law,
regulation or rule by the Company or any of its Subsidiaries within the past
three years, which violation or violations, individually or in the aggregate,
would have or could reasonably be expected to have a Material Adverse Effect on
the Company.
3.9 MILLENNIUM COMPLIANCE. Except as disclosed in Section 3.9 of the
Disclosure Schedule or in the SEC Documents, all information systems used in
connection with the operations of the Company and its Subsidiaries are
Millennium Compliant. For purposes of this Agreement, "Millennium Compliant"
means the ability when used individually or in conjunction with any other
systems, software or equipment to: (i) accurately process Date Data before,
after and across December 31, 1999 and throughout the year 2000 and beyond
(including by recognizing the year 2000 as a leap year); (ii) provide correct
results when moving backwards and forwards between the 20th and 21st century;
and (iii) function without error or without interruption related to or caused by
Date Data. For the purposes of this Agreement, "Date Data" means data that
represents or references dates in the same and/or different centuries. The
Company has made reasonable inquiries of its vendors and suppliers with respect
to whether their information systems are Millennium Compliant and, except as
disclosed in Section 3.9 of the Disclosure Schedule or in the SEC Documents, has
no basis for believing that any failure on the part of any vendor or supplier to
be Millennium Compliant will have a Material Adverse Effect on the Company.
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3.10 EMPLOYEE BENEFIT PLANS.
(a) GENERAL. Except as disclosed in Section 3.10(a) of the Disclosure
Schedule, neither the Company nor any entity which is or was considered one
employer with the Company under Section 4001(a)(14) of ERISA or Section 414(b)
or (c) of the Code (an "ERISA Affiliate") maintains or is required to contribute
to any Employee Benefit Plan or Other Plan. The Company has delivered to Buyer
accurate and complete copies of each such written Employee Benefit Plan and
Other Plan, and an accurate and complete written description of each such oral
Employee Benefit Plan and Other Plan, in each case with all modifications and
amendments thereto. Except as otherwise disclosed in Section 3.10(a) of the
Disclosure Schedule, no Employee Benefit Plan or Other Plan provides benefits
for persons who are not active employees or directors of the Company or any of
its Subsidiaries.
(b) NO BREACHES OR VIOLATIONS. Except as disclosed in Section 3.10(b)
of the Disclosure Schedule, each Employee Benefit Plan and Other Plan maintained
by the Company or any ERISA Affiliate has been operated, in all material
respects, in accordance with its terms and is not in violation of any law,
regulation or rule that individually or in the aggregate would have or could
reasonably be expected to have a Material Adverse Effect on the Company. Neither
the Company nor any ERISA Affiliate has, and to the Knowledge of the Company no
other Person has, engaged in any prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code, excluding any transactions
which are exempt under Section 408 of ERISA or Section 4975 of the Code) with
respect to any Employee Benefit Plan which the Company or any ERISA Affiliate
maintains, or to which the Company or any ERISA Affiliate contributes, which
could subject the Company or any ERISA Affiliate or any such other Person to any
Liability. No event has occurred and no condition exists that would subject the
Company or any ERISA Affiliate to any Tax under Code Sections 4971, 4972, 4977
or 4979, or to a fine under ERISA Sections 502(c) or 502(l).
(c) AMENDMENTS AND TERMINATIONS. Except as disclosed in Section 3.10(c)
of the Disclosure Schedule, each of the Company and each ERISA Affiliate has the
right to amend or terminate, without the consent of any other Person, any
Employee Benefit Plan or Other Plan which it maintains, except as prohibited by
law.
(d) NO NEW BENEFITS. Except as disclosed in Section 3.10(d) of the
Disclosure Schedule, neither the Company nor any ERISA Affiliate maintains any
Employee Benefit Plan or Other Plan under which it would be obligated to pay any
benefits as a result of the consummation of the transactions contemplated by
this Agreement. Since April 30, 1998, there has not been any increase made or
promised in the benefits payable under any Employee Benefit Plan or Other Plan
which is maintained or contributed to by the Company or any ERISA Affiliate.
Except as disclosed in Section 3.10(d) of the Disclosure Schedule, neither the
Company nor any ERISA Affiliate is obligated to make any payments or provide any
other benefits or is a party to any Contract that, on account of the
transactions contemplated in this Agreement, would obligate it or be reasonably
expected to obligate it to make any payments or provide any other benefits that
would constitute parachute payments within the meaning of Section 280G of the
Code.
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(e) PENSION PLANS. Except as disclosed in Section 3.10(e) of the
Disclosure Schedule, there are no unfunded benefit liabilities within the
meaning of Section 4001(a)(16) of ERISA with respect to any Defined Benefit Plan
maintained by the Company or any ERISA Affiliate, as determined under reasonable
actuarial assumptions. No Pension Plan maintained by the Company or any ERISA
Affiliate which is subject to the requirements of Section 412 of the Code or
Section 302 of ERISA has incurred an "accumulated funding deficiency" (as
defined in such applicable section and any regulations thereunder), whether or
not waived.
(f) MULTIEMPLOYER PLANS. Except as disclosed in Section 3.10(f) of the
Disclosure Schedule, neither the Company nor any ERISA Affiliate is required,
nor has it ever been required, to contribute with respect to any Multiemployer
Plan.
(g) WELFARE PLAN. Except as disclosed in Section 3.10(g) of the
Disclosure Schedule, no Welfare Plan maintained by the Company or any ERISA
Affiliate is funded by a trust. Each Welfare Plan maintained by the Company or
any ERISA Affiliate which is intended to meet the requirements for Tax-favored
treatment under Subchapter B of Chapter 1 of the Code meets such requirements.
With respect to any Welfare Plan maintained by the Company or any ERISA
Affiliate, there is no disqualified benefit, as such term is defined in Code
Section 4976(b), which would subject the Company or any ERISA Affiliate to a Tax
under Code Section 4976(a).
(h) EMPLOYEES. Set forth in Section 3.10(h) of the Disclosure Schedule
is an accurate and complete list showing the names of all persons employed by
the Company or any of its Subsidiaries who received more than $75,000 in cash
compensation in 1998 or who are expected to receive more than $75,000 in cash
compensation in 1999 (including, without limitation, salary, commission and
bonus). Such list sets forth the present salary or hourly wage and 1998 cash
compensation (including, without limitation, salary, commission and bonus) of
each such person.
3.11 TAXES. Except as disclosed in Section 3.11 of the Disclosure
Schedule, the Company and each of its Subsidiaries, and any consolidated,
combined, unitary or aggregate group for Tax purposes of which the Company or
any of its Subsidiaries is a member, has timely filed or caused to be filed all
Tax Returns (as defined below) required to be filed by it and all such Tax
Returns are true and complete in all material respects. Each of the Company and
each of its Subsidiaries has paid all Taxes (as defined below) shown thereon to
be due or has provided adequate reserves in its financial statements for any
Taxes that have not been paid, whether or not shown as being due on any Tax
Returns. Except as disclosed in Section 3.11 of the Disclosure Schedule, (i) no
claim for unpaid Taxes has become a Lien against any property of the Company or
any of its Subsidiaries or is being asserted against the Company or any of its
Subsidiaries, (ii) no audit of any Tax Return of the Company or any of its
Subsidiaries is being conducted by any Tax authority, (iii) no extension of the
statute of limitations on the assessment of any Taxes has been granted to the
Company or any of its Subsidiaries and currently is in effect, and (iv) there is
no Tax sharing arrangement that will require any payment by the Company or any
of its Subsidiaries after the date of this Agreement. As used herein, the term
"Taxes" means all taxes of any kind, including without
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limitation those on or measured by or referred to as income, gross receipts,
sales, use, ad valorem, franchise, profits, license, withholding, back-up
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
value added, property or windfall profits taxes, customs, duties or similar
fees, assessments or charges of any kind whatsoever, together with any interest
and any penalties, additions to tax or additional amounts imposed by any
Governmental Entity. As used herein, the term "Tax Return" means any return,
report or statement required to be filed with any Governmental Entity with
respect to Taxes. Except as set forth in Section 3.11 of the Disclosure
Schedule, there are no assessments or, to the Company's Knowledge, proposed
assessments, of Taxes against the Company or any of its Subsidiaries. Except as
disclosed in Section 3.11 of the Disclosure Schedule, within the past three
years there have not been any adjustments or, to the Company's Knowledge,
proposed adjustments, to any filed Tax Return of the Company or any of its
Subsidiaries or to the manner in which any Tax of the Company or any of its
Subsidiaries is determined.
3.12 ENVIRONMENTAL MATTERS. Except as disclosed in Section 3.12 of the
Disclosure Schedule (a) to the Knowledge of the Company, the Company and its
current and former Subsidiaries are, and have been, in compliance with all
Environmental Permits (as defined below), and the Company and its current and
former Subsidiaries are, and have been, otherwise in compliance with all
applicable Environmental Laws (as defined below); (b) none of the Company or its
Subsidiaries has received any Environmental Claim (as defined below), and none
of the Company or its Subsidiaries has Knowledge of any threatened Environmental
Claim; (c) to the Knowledge of the Company, there are no circumstances,
conditions or events that could reasonably be expected to give rise to an
Environmental Claim, against the Company or any of its Subsidiaries; (d) to the
Knowledge of the Company, there are no (i) underground storage tanks, (ii)
polychlorinated biphenyls, (iii) asbestos or asbestos-containing materials, (iv)
urea-formaldehyde insulation, (v) sumps, (vi) surface impoundments, (vii)
landfills, (viii) sewers or septic systems or (ix) Hazardous Materials (as
defined below) present at any facility currently owned, leased, operated or
otherwise used or, to the Knowledge of the Company, formerly owned, leased,
operated or otherwise used, by the Company or any of its Subsidiaries that could
reasonably be expected to give rise to Liability of the Company or any of its
Subsidiaries under any Environmental Laws; (e) no modification, revocation,
reissuance, alteration, transfer, or amendment of the Environmental Permits, or
any review by, or approval of, any third party of the Environmental Permits is
required in connection with the execution or delivery of this Agreement or the
consummation of the transactions contemplated hereby or the continuation of the
business of the Company or its Subsidiaries following such consummation; (f) to
the Knowledge of the Company, Hazardous Materials have not been generated,
transported, treated, stored, disposed of, released or threatened to be released
at, on, from or under any of the properties or facilities currently owned,
leased or otherwise used or, to the knowledge of the Company, formerly owned,
leased, operated or otherwise used, including without limitation for receipt of
the Company's wastes, by the Company or any of its Subsidiaries, in violation of
or in a manner or to a location that could give rise to any material Liability
under any Environmental Laws; (g) the Company and its Subsidiaries have not
assumed, contractually or by operation of law, any Liabilities under any
Environmental Laws and (h) without limiting the generality of the foregoing, the
Owned Real Property and
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Leasehold Premises and the conduct of the Company's business are in compliance
in all material respects with the federal standards regarding underground
storage tanks promulgated by U.S. Environmental Protection Agency at 53 Fed.
Reg. 37082 (Sept. 23, 1988), including but not limited to the performance
standards and upgrading requirements set forth in 40 CFR Part 280, et seq.
For purposes of this Agreement, the following terms shall have the
following meanings:
"Environmental Claim" means any written or oral notice, claim, demand,
action, complaint, proceeding, request for information or other communication by
any Person alleging Liability or potential Liability (including without
limitation Liability or potential Liability for investigatory costs, cleanup
costs, governmental response costs, natural resource damages, property damage,
personal injury, fines or penalties) arising out of, relating to, based on or
resulting from (i) the presence, discharge, emission, release or threatened
release of any Hazardous Materials at any location currently owned, leased,
operated or otherwise used, or, to the Knowledge of the Company, formerly owned,
leased, operated or otherwise used, by the Company or any of its current or
former Subsidiaries, or (ii) circumstances forming the basis of any violation or
alleged violation of any Environmental Law or Environmental Permit, or (iii)
otherwise relating to Liabilities under any Environmental Laws.
"Environmental Permits" means all Permits (as defined below) required
under Environmental Laws.
"Environmental Laws" means all applicable domestic and foreign federal,
state and local statutes, rules, regulations, ordinances, orders, decrees and
common law relating in any manner to regulation of Hazardous Materials and to
any contamination, pollution or protection of human health or the environment,
including without limitation the Comprehensive Environmental Response,
Compensation and Liability Act, the Resource Conservation and Recovery Act, the
Solid Waste Disposal Act, the Clean Air Act, the Clean Water Act, the Toxic
Substances Control Act, the Occupational Safety and Health Act, the Emergency
Planning and Community-Right-to-Know Act, and the Safe Drinking Water Act, all
as amended, and similar state and local laws.
"Hazardous Materials" means all hazardous or toxic substances, wastes,
materials or chemicals, petroleum (including crude oil or any fraction thereof)
and petroleum products, asbestos and asbestos-containing materials, pollutants,
contaminants and all other materials, substances and forces, including but not
limited to electromagnetic fields and radioactive materials, regulated pursuant
to, or that could form the basis of liability under, any Environmental Law.
"Permits" means all permits, licenses, registrations, permissions,
certificates and other authorizations, approvals and consents issued or granted
by any Governmental Entity and obtained by the Company or any of its
Subsidiaries or otherwise required in connection with the conduct or operation
of the Company's or any Subsidiary's business or facilities or the ownership,
lease or possession by the Company or any Subsidiary of any real, personal or
intangible property.
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3.13 MATERIAL CONTRACTS. Except as set forth in Section 3.13 of the
Disclosure Schedule and other than employee compensation (except for written
employment agreements) in the ordinary course of business consistent with past
practice, neither the Company nor any Subsidiary is a party to or bound by (a)
any Contract (including, but not limited to, employment, advertising,
distribution and licensing agreements), that involves the performance of
services or the delivery of goods and/or materials by or to it and which (i)
cannot be terminated by the Company on 30 days or less notice without penalty
and (ii) involves an amount or value in excess of $100,000, (b) any Contract not
in the ordinary course of business relating to expenditures or liabilities in
excess of $100,000 in the aggregate including, without limitation, fuel purchase
agreements, (c) any Contract relating to capital expenditures not contemplated
by the 1998/1999 Capital Budget, attached hereto as Exhibit C (the "1998/1999
Capital Budget"), in excess of $50,000 in the aggregate, (d) any Contract
relating to Indebtedness, including, without limitation, hedging contracts, (e)
any loan or advance to (other than advances to employees in the ordinary course
of business in amounts of $25,000 or less to any individual and $50,000 or less
in the aggregate), or investment in, any person, any Contract relating to the
making of any such loan, advance or investment or any Contract involving a
sharing of profits, (f) any guarantee or other contingent liability in respect
of any indebtedness or obligation of any person, (g) any management service,
consulting or any other similar type of Contract involving expenditures in
excess of $50,000, (h) any license, franchise or similar agreement, (i) any
Contract limiting the ability of the Company or any Subsidiary to engage in any
line of business or to compete with any person, (j) any warranty, guaranty or
other similar undertaking with respect to a contractual performance extended by
the Company or any Subsidiary, (k) any Contract whereby the Company or any
Subsidiary shares services with any third party, (l) any capital lease or lease
of personal property, (m) any Contract that is or was required to be filed as an
exhibit to the SEC Documents or (n) any amendment, modification or supplement in
respect of any of the foregoing ((a)-(n), collectively, the "Material
Contracts," provided that the term "Material Contract" shall not be deemed to
include any Contract under which the Company and each Subsidiary have both no
obligation to perform in the future and no right to the benefits of the future
performance of any other person). Except as otherwise set forth in Section 3.13
of the Disclosure Schedule, each Material Contract is valid, binding and in full
force and effect in accordance with its terms and there exists no default,
breach or event of default thereunder or event, occurrence, condition or act
(including the consummation of the transactions contemplated hereby) on the part
of the Company, any Subsidiary or, to the Knowledge of the Company, any other
person that, with the giving of notice, the lapse of time and/or the happening
of any other event or condition, would become a default, breach or event of
default thereunder, other than such breaches or defaults that would not or could
not be reasonably expected to result in a Material Adverse Effect. The Company
and its Subsidiaries have duly performed their respective obligations under each
Material Contract in all material respects to the extent such obligations have
occurred. The Company has provided or made available to MergerCo true and
complete copies of each Material Contract. Except as set forth in Section 3.13
of the Disclosure Schedule, no Material Contract relating to borrowed money
indebtedness imposes on the Company or any Subsidiary any penalty, fee or
service charge in connection with the prepayment, repayment or early payment of
any indebtedness thereunder. Other than as
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disclosed in Section 3.13 of the Disclosure Schedule, no indebtedness for
borrowed money of the Company or its Subsidiaries contains any restriction upon
the incurrence of indebtedness for borrowed money by the Company or any of its
Subsidiaries or restricts the ability of the Company or any of its Subsidiaries
to grant any Liens on its properties or assets.
3.14 BROKERS. No broker, investment banker, financial advisor or other
Person, other than McDonald Investments Inc., the fees and expenses of which
will be paid by the Company pursuant to a fee agreement, a copy of which has
been provided to MergerCo, is entitled to any broker's, finder's, financial
advisor's or similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Company. The aggregate fees payable to McDonald Investments Inc. shall not
exceed $175,000. The aggregate reimbursable expenses payable to McDonald
Investments Inc. shall not exceed $15,000.
3.15 OPINION OF FINANCIAL ADVISOR. The Company has received the written
opinion of McDonald Investments Inc. dated February 17, 1999 (including the
consent of McDonald Investments Inc. to the inclusion of such written opinion in
the Proxy Statement), to the effect that the consideration to be received by the
shareholders of the Company pursuant to the Merger is fair to the holders of
Company Common Shares from a financial point of view and a signed copy of such
opinion has been delivered to MergerCo.
3.16 BOARD RECOMMENDATION. The Board of Directors of the Company, at a
meeting duly called and held on February 17, 1999, has unanimously, in
accordance with the unanimous prior approval and recommendation by a special
committee comprised of independent Directors, (i) determined that this
Agreement, the Merger and the other transactions contemplated hereby (including
the transactions contemplated by the Voting Agreement and the Share Exchange
Agreement) are advisable and in the best interests of the Company and its
shareholders, (ii) authorized and approved this Agreement, the Merger and the
other transactions contemplated hereby and thereby (including the transactions
contemplated by the Voting Agreement and the Share Exchange Agreement), (iii)
subject to the other provisions hereof, resolved to recommend that the holders
of Company Common Shares approve this Agreement, the Merger and the other
transactions contemplated hereby (including the transactions contemplated by the
Voting Agreement and the Share Exchange Agreement), and (iv) approved the
transactions described in the first sentence of Section 3.29 and the assumption
and assignment agreement related thereto.
3.17 REQUIRED COMPANY VOTE. The Company Shareholder Approval is the
only vote of the holders of any class or series of the Company's securities
necessary to approve this Agreement or the transactions contemplated hereby.
3.18 STATE TAKEOVER STATUTES. The Company has granted all approvals and
taken all other steps necessary to exempt the Merger and the other transactions
contemplated hereby and by the Voting Agreement and the Share Exchange Agreement
from the requirements and provisions of Section 912 of the NYBCL and any other
anti-takeover law such that none of the provisions of such Section 912 or any
other "business combination," "moratorium," "control
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bid," "control share," or other state (and, to the Knowledge of the Company
after due inquiry, any foreign country) anti-takeover law (i) prohibits or
restricts the Company's ability to perform its obligations under this Agreement
or its ability to consummate the Merger and the other transactions contemplated
hereby, (ii) would have the effect of invalidating or voiding this Agreement or
any provision hereof, or (iii) would subject Buyer or MergerCo to any material
impediment or condition in connection with the exercise of their respective
rights under this Agreement or their ownership and operation of the business of
the Company and its Subsidiaries. If either of Messrs. Holahan or Saunders are
an "interested shareholder" of the Company, as such term is defined in Section
912 of the NYBCL, they have been the beneficial owner of five percent or more of
the outstanding Company Common Shares on October 13, 1985, and have remained so
until such person's "stock acquisition date," as such term is defined in Section
912 of the NYBCL. Neither the Company nor any of its Subsidiaries has any rights
plan, preferred stock plan or similar Contract that applies to the transactions
contemplated hereby.
3.19 AFFILIATE. The Company hereby acknowledges that, at the date
hereof, Buyer is not an "affiliate" of the Company, as such term is defined in
Rule 13e-3 under the Exchange Act by reason of its execution of the Voting
Agreement and Share Exchange Agreement.
3.20 INTELLECTUAL PROPERTY. As used herein, the term "Intellectual
Property Rights" means any intellectual property, including without limitation
trade names, trademarks and service marks and all registrations and applications
therefor, together with the goodwill of the business symbolized or represented
by the foregoing, mask works, works of authorship and all copyrights related
thereto and all registrations and applications therefor, inventions,
discoveries, designs, industrial models and all patent rights relating thereto
and all applications therefor and all reissues, divisions, continuations and
extensions thereof, know-how, trade secrets, processes, technology, discoveries,
formulae and procedures, customer lists and other proprietary information,
together with the right to sue for past infringement or improper, unlawful or
unfair use or disclosure of any of the foregoing. Section 3.20 of the Disclosure
Schedule lists all Intellectual Property Rights that are material to the
operations of the Company and its Subsidiaries, taken as a whole ("Material
Intellectual Property Rights") that are owned by the Company or any of its
Subsidiaries or with respect to which (as noted in Section 3.20 of the
Disclosure Schedule) the Company or any of its Subsidiaries has any right or
license. Except as disclosed in Section 3.20 of the Disclosure Schedule, neither
the Company nor any of its Subsidiaries has infringed any Intellectual Property
Right of any other Person and no such infringement has been alleged by any other
Person within the past three years. Except as disclosed in Section 3.20 of the
Disclosure Schedule, to the Knowledge of the Company, there has not been any
infringement or alleged infringement by any other Person of any of the
Intellectual Property Rights of the Company or any of its Subsidiaries. Except
as disclosed in Section 3.20 of the Disclosure Schedule, neither the Company nor
any of its Subsidiaries is a party to any Contract, whether as licensor,
licensee, franchisor, franchisee, dealer, distributor or otherwise, with respect
to any Material Intellectual Property Rights. Each of the Company and each of
its Subsidiaries has the right to use all Intellectual Property Rights as are
necessary to enable it to conduct all phases of its business in the manner
presently
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conducted by it. Except as disclosed in Section 3.20 of the Disclosure Schedule,
no other Person has any interest in, or right or license with respect to, any of
the Material Intellectual Property Rights owned by the Company or any of its
Subsidiaries. The Material Intellectual Property Rights listed in Section 3.20
of the Disclosure Schedule are valid and in full force and effect. Except as set
forth in Section 3.20 of the Disclosure Schedule, there have been no
interference actions or other judicial, arbitration or other adversary
proceedings concerning any of the Material Intellectual Property Rights of the
Company or any of its Subsidiaries. Neither the Company nor any of its
Subsidiaries has disposed of or permitted to lapse, or otherwise failed to
preserve its right to use, any of its Material Intellectua Property Rights.
3.21 RELATED PARTY TRANSACTIONS. Except as set forth in Section 3.21 of
the Disclosure Schedule or as otherwise disclosed in the SEC Financial
Statements, no director, officer, partner, employee or Affiliate of the Company
or any of its Subsidiaries (i) has borrowed any monies from or has outstanding
any indebtedness or other similar obligations to the Company or any of its
Subsidiaries, (ii) owns any direct or indirect interest of any kind in, or is a
director, officer, employee, partner, Affiliate or associate of, or consultant
or lender to, or borrower from, or has the right to participate in the
management, operations or profits of, any Person or entity that is (x) a
competitor, supplier, customer, distributor, lessor, tenant, creditor or debtor
of the Company or any of its Subsidiaries, (y) engaged in a business related to
the business of the Company or any of its Subsidiaries, or (z) participating in
any transaction to which the Company or any of its Subsidiaries is a party, or
(iii) is, individually or through any of its Affiliates, or has been during the
SEC Financial Statement periods, otherwise a direct or indirect party to any
Contract with the Company or any of its Subsidiaries.
3.22 PERMITS. Each of the Company and each of its Subsidiaries has all
Permits that are material to the operation of the business of the Company or any
of its Subsidiaries and that are required under any law, regulation or rule for
the continuing operation of its business or ownership of its assets in
accordance with past practice ("Material Permits"). Section 3.22 of the
Disclosure Schedule contains a complete list of such Material Permits,
indicating which of such Material Permits requires the consent or approval of
any Governmental Entity or third party as a result of the transactions
contemplated hereby, exclusive of any Material Permits relating to state or
local sales, use or other Taxes. Each Material Permit issued to the Company or
to any of its Subsidiaries is in full force and effect and no proceeding is
pending to revoke, modify or limit any such Material Permit or to impose any new
conditions or obligations on the possession or transfer of any such Material
Permit. No outstanding written notice or, to the Knowledge of the Company, oral
notice of cancellation or termination of any Material Permit has been delivered
to the Company or any of its Subsidiaries, nor to the Knowledge of the Company
has any such cancellation or termination been threatened. If, and to the extent
reasonably necessary, the Company and its Subsidiaries will assist Buyer in
obtaining any assignments, or renewals of any such Material Permits, as may be
required in connection with the consummation of the transactions contemplated by
this Agreement.
3.23 INSURANCE POLICIES. Section 3.23 of the Disclosure Schedule
contains a list of all insurance policies of the Company and its Subsidiaries
and each such policy is in full force and effect. All premiums with respect to
the insurance policies listed on Section 3.23 of the
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Disclosure Schedule that are due and payable prior to the Closing have been paid
or will be paid prior to the Closing, and no written notice of cancellation or
termination has been received by the Company with respect to any such policy.
Except as disclosed in Section 3.23 of the Disclosure Schedule, to the Company's
Knowledge, there are no pending claims under any such insurance policies as to
which the insurers have denied coverage or otherwise reserved rights. To the
Company's Knowledge, neither the Company nor any Subsidiary has been refused any
insurance with respect to its assets or operations during the past five years.
3.24 CERTAIN BUSINESS PRACTICES. Neither the Company nor any of its
Subsidiaries, nor to the Company's Knowledge any directors, officers, agents or
employees of the Company or any of its Subsidiaries, (i) has used any funds for
unlawful contributions, gifts, entertainment or other expenses related to
political activity, (ii) has made any unlawful payment to any foreign or
domestic government officials or employees or to foreign or domestic political
parties or campaigns or violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended, (iii) has made any other payment prohibited by
applicable law, or (iv) has violated any law, rule or regulation relating to the
sale or export of technology or products into foreign countries. Except as set
forth in Section 3.24 of the Disclosure Schedule, neither the Company nor any of
its Subsidiaries nor, to the Knowledge of the Company, any of their respective
officers or key employees is a party to or is bound by any noncompetition or
similar Contract with any third party that restricts any business practices of
the Company or any of its Subsidiaries or such officers or key employees.
3.25 SUPPLIERS AND CUSTOMERS. Except as set forth in Section 3.25 of
the Disclosure Schedule, neither the Company nor any of its Subsidiaries has
received in any one of the past three fiscal years any written notice from or,
to its Knowledge, any oral notice from, any supplier to or customer of the
Company or such Subsidiary of such supplier's or customer's intention to
materially and adversely alter its existing business relationship with the
Company or such Subsidiary.
3.26 WARRANTIES. Section 3.26 of the Disclosure Schedule sets forth
complete and accurate copies of all written product or service warranties or
guaranties, and descriptions of all oral product or service warranties or
guaranties, currently offered by the Company or any of its Subsidiaries or
currently outstanding. None of the salesmen, employees, distributors or other
representatives or agents of the Company or any of its Subsidiaries is
authorized to undertake obligations to any customer or to other third parties in
excess of such warranties or guaranties and, to the Knowledge of the Company,
there have not been any material deviations from any such warranties or
guaranties.
3.27 TITLE TO AND CONDITION OF ASSETS. Except for inventory sold, used
or otherwise disposed of in the ordinary course of business for fair value, each
of the Company and its Subsidiaries has good and indefeasible title to all of
its assets and properties (both real and personal) and its interests therein,
free and clear of all Liens of any nature whatsoever other than (i) Liens set
forth in Section 3.27 of the Disclosure Schedule, (ii) Liens for current Taxes
that are not yet due and payable, and (iii) such easements and other
imperfections of title as are not material in character, amount or extent, do
not impair the ability of Buyer's lender(s) to
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obtain a valid and enforceable first priority mortgage lien against such assets
and properties and do not and will not materially reduce the value of the
property for commercial truckstop or travel center uses, or interfere with the
present use of, the assets or properties subject thereto or affected thereby, or
otherwise materially impair the business operations of the Company or any of its
Subsidiaries (the "Permitted Encumbrances"). Except as set forth in Schedule
3.27, all machinery, equipment, tools, supplies, leasehold improvements,
furniture and fixtures owned or used by the Company or any of its Subsidiaries
(other than any such asset(s) of the Company or its Subsidiaries that
individually or in the aggregate have a total replacement cost that does not
exceed $400,000) are in good operating condition, normal wear and tear excepted,
and do not require any special or extraordinary expenditures to remain in such
condition beyond maintenance and repairs in the ordinary course of business and
comply with laws, rules and regulations and orders applicable thereto.
3.28 REAL ESTATE.
(a) Except as set forth in Section 3.28(a) of the Disclosure Schedule,
neither the Company nor any of its Subsidiaries owns any real property or any
interest therein (the "Owned Properties").
(b) Except as set forth in Section 3.28(b) of the Disclosure Schedule,
neither the Company nor any of its Subsidiaries holds any leasehold interest in
any real property (the "Leasehold Premises"). Section 3.28(b) of the Disclosure
Schedule lists each of the leases and subleases with respect to the Leasehold
Premises or other real property to which the Company or any Subsidiary is a
party ("Leases"), and with respect to each Lease sets forth the term thereof,
the base rent payable with respect thereto, any security deposit relating
thereto, the termination date thereof and whether the Company or a Subsidiary
has subleased any part of the leasehold interest thereunder or assigned such
Lease and any renewal terms, purchase options or rights of first refusal
contained in such leases and subleases, and whether any such rights have been
exercised by the Company and its Subsidiaries. The Company and each Subsidiary
are not parties to any leases or subleases of real property other than the
Leases. The Company has heretofore delivered or made available to the Buyer and
MergerCo true and complete copies of all such Leases including all amendments,
modifications and waivers with respect thereto. Except as otherwise set forth in
Section 3.28(b) of the Disclosure Schedule: each Lease is in full force and
effect; subject to no assignments, liens or encumbrances relating to the Company
or any Subsidiary, all rents and additional rents due to date on each Lease have
been paid; neither the Company nor any Subsidiary has received any notice that
it is in default under any Lease and neither the Company nor any Subsidiary is
in default under any Lease in any material respect; no landlord is in default in
any material respect of any of its obligations under any Lease; and there exists
no event, occurrence, condition or act (including the consummation of the
transactions contemplated by this Agreement) that, with the giving of notice,
the lapse of time or the happening of any further event or condition, would
become a default by the Company or any Subsidiary under any Lease, which default
would or could reasonably be expected to have a material impact on the leasehold
interest in the property or the utility of such interest in any material
respect. Except as set forth in Section 3.28(b) of the Disclosure Schedule, the
Company or a Subsidiary is currently the lessee under each of the Leases and
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may exercise all rights of a lessee under each of the Leases. Each Lease under
which the Company or a Subsidiary was not the original lessee was validly
assigned to the Company or such Subsidiary and any party that has a right of
consent to such assignment and of which the Company has Knowledge after due
review of the applicable Lease has consented to such assignment and has provided
customary and reasonable certificates of estoppel to Buyer for the benefit of
Buyer, MergerCo and its lender(s) and any other party having a right of consent
to such assignment has either consented to such assignment or has taken no
action inconsistent with the granting of such consent. Except as set forth on
Section 3.28(b) of the Disclosure Schedule, none of the Leases require notice
to, the consent to the assignment of or the approval of any third party in order
to consummate the Merger or the transactions contemplated hereby. Each of the
Leases set forth on Section 3.28(b) of the Disclosure Schedule shall be assigned
to Buyer at Closing pursuant to valid, binding and enforceable assignment
agreements and the Company has provided to Buyer and its lender(s), with respect
to all the Leases, reasonable and customary certificates of estoppel,
subordination and attornment.
(c) Except as set forth in Section 3.28(c) of the Disclosure Schedule,
the Company and its Subsidiaries own the Owned Properties and have valid
leasehold interests in the Leasehold Premises, free and clear of any Liens,
covenants and easements or title defects of any nature whatsoever, except for
Permitted Encumbrances.
(d) Except as set forth in Section 3.28(d) of the Disclosure Schedule
and except for the Owned Properties and Leasehold Premises set forth in
Sections 3.28(a) and (b) of the Disclosure Schedule, neither the Company nor
any of its Subsidiaries has owned and/or leased properties during the last ten
(10) years.
(e) The Owned Properties and the Leasehold Premises are presently zoned
to permit the operation of a full service truckstop or travel center, except
for the Company's headquarters and its pipeline terminal and, where applicable,
comply with all subdivision and platting requirements established under
governing laws and ordinances. Said zoning is pursuant to statute or ordinance
and, except as set forth on Section 3.28(e) of the Disclosure Schedule, not
pursuant to any variance or conditional permit granted with respect to the
Owned Properties and the Leasehold Premises, and to the Knowledge of the
Company or its Subsidiaries, does not require any further approval or any other
action by the Company to permit it to be operated as a truckstop or travel
center.
(f) Except as set forth in Section 3.28(f) of the Disclosure Schedule,
the portions of the buildings located on the Leasehold Premises that are used
in the Company's or any Subsidiary's business and the buildings located on the
Owned Properties are in compliance with applicable laws, rules, regulations,
ordinances and orders applicable thereto and, in the aggregate sufficient to
satisfy the Company's and its Subsidiaries' business activities as conducted
thereat.
(g) Each of the Leasehold Premises and Owned Properties: (i) has direct
access to public roads or access to public roads by means of an access easement
(which access easement is perpetual, in the case of each of the Owned
Properties, and for at least the remaining term of
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the Lease and any renewal periods, in the case of each of the Leasehold
Premises), such access being sufficient to satisfy the current normal day-to-day
transportation requirements of the Company's and its Subsidiaries' businesses as
presently conducted at such parcel; (ii) involves no material encroachment of
buildings and improvements onto or off of the property lines or building set
back and side yard requirements established by applicable laws and ordinances;
and (iii) is served by all utilities, in such quantities as are sufficient to
satisfy the current business activities as conducted at such parcel, including
the operation of a full service truckstop or travel center in compliance with
applicable laws.
(h) Except as set forth in Section 3.28(h) of the Disclosure Schedule,
neither the Company nor any Subsidiary has received notice of (i) any
condemnation proceeding with respect to any portion of the Leasehold Premises
or Owned Properties or any access thereto or that any such proceeding is
contemplated by any Governmental Entity; or (ii) any special assessment that
may affect any of the Leasehold Premises or Owned Properties, or that any such
special assessment is contemplated by any Governmental Entity.
(i) All applicable permits, declarations, inspections and other
evidences of compliance from regulatory authorities required to be maintained
for the Owned Properties and the Leasehold Premises or for the consummation of
the transactions contemplated by this Agreement, as relate to the Owned
Properties or Leasehold Premises, that are material to the operation and use of
the Owned Properties and Leasehold Premises, including, without limitation,
those regulating the division of real property (including certificates of
occupancy) and environmental matters, and fire prevention/sprinkler systems and
equipment, and the health, safety and welfare of patrons and employees of the
Company's business have been obtained and are maintained in current compliance
with applicable law in all material respects.
(j) Except as set forth in Section 3.28(j) of the Disclosure Schedule,
the Owned Properties and Leasehold Premises, and the use, operation,
maintenance and management thereof, are not in violation of any restrictive
covenant, agreement or permit applicable thereto, or of any building code,
ordinance, statute, regulation or requirement of any governmental authority
having jurisdiction thereto, specifically including (without limitation to) the
Americans with Disabilities Act, 42 U.S.C. ss. 12181, et seq., and the Company
has not received any notices regarding any such violation.
(k) None of the Owned Properties or the Leasehold Premises is located
in any conservation, historic or other special designation district.
(l) Except as set forth in Section 3.28(l) of the Disclosure Schedule,
the Company has not been notified of possible future improvements by any public
authority, any part of the cost of which would or might be assessed against the
Owned Properties or the Leasehold Premises, or of any contemplated future
assessments of any kind.
(m) As of the date hereof and as of the Effective Time of the Merger,
the Owned Properties and the Leasehold Premises shall be free from mechanic's
liens for labor and materials furnished or, except for those ongoing projects
described in Section 3.28(m) of the Disclosure Schedule, the possibility of the
rightful filing thereof, other than as caused by
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Buyer. If any material or labor has been furnished to the Owned Properties and
the Leasehold Premises within the one hundred twenty (120) day period
immediately preceding the Effective Time of the Merger, the Company, upon
Buyer's request, shall furnish evidence satisfactory to Buyer that the Company
has made payment in full for all such material and labor, that payment is not
yet due or that the Company is contesting such charges in good faith and that
Buyer's interest will not be jeopardized by such contest.
(n) Except as set forth in Section 3.28(n) of the Disclosure Schedule,
neither the Company nor any Subsidiary owns or holds, or is obligated under or
a party to, any option, right of first refusal or other contractual right to
purchase, acquire, sell, lease or dispose of the Owned Properties or Leasehold
Premises or any portion thereof or interest therein or in any other real
property.
(o) Except as set forth in Section 3.28(o) of the Disclosure Schedule,
neither the Company nor any of its Subsidiaries is a party to any options or
agreements for the purchase, sale, lease or license of any real property or any
interest therein, other than the Owned Properties and Leasehold Premises.
3.29 PERK DEVELOPMENT CORP. As of the date of this Agreement, the
Company has no, and Buyer shall not assume any, direct or indirect interest in,
obligation to, or liability (contingent or otherwise) relating to Perk
Development Corp. or Brambury Associates (collectively, "Perk"), any Affiliate
of Perk or any other Person that is related in any way to the Perkins Restaurant
franchises operated by Perk, including, without limitation, any landlords,
mortgage holders, suppliers, franchisors or other creditors of Perk
(collectively referred to as "Perk Related Parties"). The Company's expenses and
costs (paid and unpaid) associated with Perk and the Perk Related Parties will
not exceed $100,000 in the aggregate.
3.30 VEHICLES. Set forth on Section 3.30 of the Disclosure Schedule is
a complete and accurate list of motor vehicles (including, but not limited to,
any vehicles used in connection with fuel hauling or any wholesale fuel
business) used by the Company or any of its employees.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER AND MERGERCO
Each of Buyer and MergerCo hereby jointly and severally represents and
warrants to the Company as follows:
4.1 ORGANIZATION, STANDING AND CORPORATE POWER. Buyer and MergerCo are
corporations duly organized, validly incorporated and in good standing in the
States of Delaware and New York, respectively, and each has the requisite
corporate power and authority to own, lease and operate its assets and to carry
on its business as and where such assets are now owned or leased and operated
and as such business presently is being conducted. Each of Buyer and MergerCo is
duly qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or
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leasing of its assets makes such qualification or licensing necessary, other
than in such jurisdictions where the failure to be so qualified or licensed
(individually or in the aggregate) would not have a Material Adverse Effect
with respect to Buyer or MergerCo.
4.2 AUTHORITY; NONCONTRAVENTION; CONSENTS.
(a) AUTHORITY. Each of Buyer and MergerCo 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
by each of Buyer and MergerCo and the consummation by each of Buyer and MergerCo
of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of each of Buyer and MergerCo. This
Agreement has been duly executed and delivered by, and constitutes a valid and
binding obligation of, each of Buyer and MergerCo, enforceable against each of
them in accordance with its terms subject, as to enforceability, to bankruptcy,
insolvency, reorganization and other Laws of general applicability relating to
or affecting creditors' rights and to general principles of equity.
(b) NONCONTRAVENTION. Except as disclosed in Section 4.2 of the
Disclosure Schedule delivered by MergerCo to the Company at the time of
execution of this Agreement (the "MergerCo Disclosure Schedule"), the execution
and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby, including consummation of the Merger, will
not, conflict with, or result in any breach or violation of, or result in any
default (with or without notice or the lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration with respect to, or
result in the loss of any benefit or other right or the creation of any Lien
upon any of the properties or assets of Buyer or MergerCo, under (i) the
Certificate of Incorporation or By-laws, as amended, of either Buyer or
MergerCo, (ii) any Contract to which Buyer or MergerCo is a party or to which
any of their respective properties or assets is subject, (iii) any Permit issued
to Buyer or MergerCo or to which any of their respective properties or assets is
subject, or (iv) any law, regulation, rule, judgment, order, decree or
arbitration award to which either Buyer or MergerCo or any of their respective
properties or assets is subject, other than, in the case of clauses (ii), (iii)
and (iv), any such conflicts, breaches, violations, defaults, rights, losses or
Liens that individually or in the aggregate could not have a Material Adverse
Effect with respect to either Buyer or MergerCo or could not prevent, hinder or
materially delay the ability of MergerCo to consummate the transactions
contemplated by this Agreement.
(c) CONSENTS. No consent, approval, order or authorization of, or
registration, declaration or filing with, or notice to, any Governmental Entity
or any other Person under any Contract to which Buyer or MergerCo is a party or
to which any of their respective properties or assets is subject, or under any
Permit issued to Buyer or MergerCo or to which any of their respective
properties or assets is subject, is required in connection with the execution
and delivery of this Agreement by either Buyer or MergerCo or the consummation
by Buyer and MergerCo of any of the transactions contemplated hereby, except for
(i) the filing of a pre-merger notification and report form under the HSR Act,
(ii) the filing with the SEC of the Proxy Statement and such reports under the
Exchange Act as may be required in connection
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with this Agreement and the transactions contemplated hereby, (iii) the filing
of the Certificate of Merger with the Department of State of the State of New
York and the filing of appropriate documents with the relevant authorities of
other states in which Buyer or MergerCo is qualified to do business, and (iv)
such other consents, approvals, orders, authorizations, registrations,
declarations, filings or notices as are set forth in Section 4.2 of the
MergerCo Disclosure Schedule or as may be required under the "takeover" or
"blue sky" laws of various states.
4.3 BROKERS. No broker, investment banker, financial advisor or other
Person, other than Clipper Capital Partners, L.P. and Olympus Partners, LLP is
entitled to any broker's, finder's, financial advisor's or similar fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Buyer, MergerCo or any of their
respective Affiliates.
4.4 INFORMATION SUPPLIED. None of the information supplied or to be
supplied by Buyer, MergerCo or any of their Affiliates in writing specifically
for inclusion or incorporation by reference in the Proxy Statement will, at the
time the Proxy Statement is first mailed to the Company's shareholders or at the
time of the Shareholders Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
4.5 FINANCING. Assuming (i) that there is no breach by the Company of,
or failure by the Company to perform, any representation, warranty, covenant or
other agreement contained in this Agreement and (ii) that Buyer has no right to
terminate pursuant to Section 8.1(j), in each case, as of the date of this
Agreement and as of the Closing Date, Buyer has available internal funds or
commitments from creditworthy financial institutions to provide the funds
required to pay the Merger Consideration and to consummate the transactions
herein contemplated.
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ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR TO MERGER
5.1 CONDUCT OF BUSINESS IN ORDINARY COURSE. Except as set forth in
Section 5.1 of the Disclosure Schedule, during the period from the date of this
Agreement through the Effective Time of the Merger (except as otherwise
specifically required by the terms of this Agreement), the Company shall, and
shall cause its Subsidiaries to, act and carry on their respective businesses in
the usual, regular and ordinary course of business consistent with past practice
and use its and their respective best efforts to preserve intact their current
business organizations, preserve their goodwill, keep available the services of
their current officers and employees, maintain all material properties and
assets in customary condition and repair (reasonable wear and use and damage by
fire and unavoidable casualty excepted), maintain their Books and Records in
accordance with past practice, comply in all material respects with all
applicable laws, and preserve their relationships with customers, suppliers,
sales representatives, distributors and others having business dealings with
them. Without limiting the generality of the foregoing, during the period from
the date of this Agreement through the Effective Time of the Merger, the Company
shall not, and shall not permit any of its Subsidiaries to, without the prior
written consent of Buyer:
(i) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock, other than dividends and
distributions by a direct or indirect wholly owned Subsidiary of the Company to
its parent company in accordance with applicable law;
(ii) split, combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock;
(iii) purchase, redeem or otherwise acquire any shares of capital stock
of the Company or any of its Subsidiaries or any other securities thereof or any
rights, warrants or options to acquire any such shares or other securities,
except for (a) the acquisition of Company Common Shares from holders of Company
Stock Options outstanding on the date of this Agreement, in full or partial
payment of the exercise price payable by such holders upon the exercise of such
Company Stock Options, (b) the acquisition of outstanding Company Warrants or
(c) the redemption of Convertible Debt Securities, in each case in accordance
with Section 2.2;
(iv) authorize for issuance, issue, deliver, sell, pledge or otherwise
encumber any shares of its capital stock or the capital stock of any of its
Subsidiaries, any other voting securities or any securities convertible into, or
any rights, warrants or options to acquire, any such shares, voting securities
or convertible securities or any other securities or equity equivalents (other
than the issuance of Company Common Shares upon the proper exercise of Company
Stock Options or Company Warrants or upon a conversion pursuant to the
Convertible Debt Securities);
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(v) amend its Certificate of Incorporation, By-Laws or other
organizational documents;
(vi) acquire or agree to acquire any other Person or the assets or
business operations of such Person by merger, consolidation, purchase of stock
or assets, or in any other manner;
(vii) other than as specifically permitted by Section 5.1 of the
Disclosure Schedule, sell, lease, license, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any of its properties or assets
other than any such properties or assets the value of which do not exceed
$50,000 individually and $200,000 in the aggregate, except sales of inventory in
the ordinary course of business consistent with past practice;
(viii) incur any Indebtedness, issue or sell any debt securities or
warrants or other rights to acquire any debt securities of the Company or any of
its Subsidiaries, enter into any agreement to maintain any financial statement
condition of another Person or enter into any arrangement having the economic
effect of any of the foregoing, except for (a) short-term borrowings and lease
obligations incurred in the ordinary course of business consistent with past
practice not in excess of $100,000 in the aggregate and (b) borrowings in the
ordinary course of business consistent with past practice under the Company's
existing revolving line of credit that do not cause the outstanding balance of
such revolving line of credit to exceed $1,000,000 at any time; provided,
however, that the Company shall provide written notice to Buyer
contemporaneously with the notice provided to the bank of such drawdown, or, if
no notice to a bank is provided, such notice shall be delivered to Buyer within
48 hours after the Company receives notice from the bank of a drawdown, of the
amount of and purpose for any such borrowings or incurrence of Indebtedness;
(ix) make any loans, advances or capital contributions to, or
investments in, any other Person, other than to the Company or any direct or
indirect wholly owned Subsidiary of the Company;
(x) pay, discharge or satisfy any Liabilities, except for the payment,
discharge or satisfaction of Liabilities (i) in the ordinary course of business
consistent with past practice, (ii) in accordance with their terms as in effect
on the date hereof, (iii) to the extent permitted by Section 5.1(xv) or (iv) as
otherwise contemplated by this Agreement;
(xi) waive, release, grant or transfer any rights of material value or
modify or change in any material respect any existing Contract, Permit or other
document, other than in the ordinary course of business consistent with past
practice;
(xii) adopt any resolution or plan providing for or authorizing a
complete or partial liquidation or a dissolution, merger, consolidation,
restructuring, recapitalization or reorganization;
(xiii) enter into any new Contract except in the ordinary course of
business consistent with past practice or modify or terminate any existing
Contract if such modification or
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termination would have a Material Adverse Effect on the Company or enter into
any license, franchise or similar agreements;
(xiv) engage in any unusual or novel method of transacting business or
change any accounting principle used by it, except for such changes as may be
required by generally accepted accounting principles or by law or regulation;
(xv) settle or compromise any litigation (whether or not commenced
prior to the date of this Agreement) other than settlements or compromises of
litigation where the amount paid (after giving effect to insurance proceeds
actually received) in settlement or compromise is not material to the Company;
(xvi) enter into any fuel-supply hedging agreements or similar
arrangements (which shall not include for these purposes any fixed price supply
agreements with customers in amounts not in excess of $50,000 in the aggregate);
(xvii) make any capital expenditures by the Company and its
Subsidiaries in excess of $100,000 in the aggregate and not contemplated by the
Company's 1998/1999 Capital Budget;
(xviii) except as specifically contemplated by this Agreement, take any
action the taking of which, or omit to take any action the omission of which,
would cause any of the representations or warranties of the Company contained
herein to not continue to be true and correct in all material respects as though
made at and as of the date of such action or omission (except to the extent such
representation or warranty specifically refers to another date);
(xix) authorize any of, or commit or agree to take any of, the
foregoing actions; or
(xx) buy, sell, lease, exercise any options (other than in the ordinary
course of business), terminate or enter into any agreement for the purchase,
sale, lease, option or conveyance of any interest in real property including the
Owned Property and the Leasehold Premises.
5.2 CHANGES IN EMPLOYMENT ARRANGEMENTS. Except as set forth in Section
5.2 of the Disclosure Schedule, neither the Company nor any of its Subsidiaries
shall (i) adopt or amend any Employee Benefit Plan or Other Plan (except as may
be required by law or this Agreement), other than increases in compensation or
benefits for employees who are not officers or directors in the ordinary course
of business consistent with past practice or as required by any collective
bargaining agreement, or (ii) increase the compensation or benefits of any
officer or director. Buyer acknowledges that the determination and calculation
of all performance-based bonuses payable by the Surviving Corporation pursuant
to any bonus letters to corporate staff referred to on Section 3.10 of the
Disclosure Schedule in the ordinary course of business and consistent with past
practice shall be made without reference to costs and expenses incurred in
connection with the transactions contemplated by this Agreement, provided that
such bonuses and costs and expenses are properly accrued in accordance with
generally accepted accounting principles.
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5.3 SEVERANCE. Neither the Company nor any of its Subsidiaries shall
enter into any new or modified severance or termination arrangement or increase
or accelerate any benefits payable under any severance or termination pay
policies in effect on the date hereof other than as set forth in Section 6.11
herein.
5.4 WARN ACT. Neither the Company nor any of its Subsidiaries shall
effectuate a "plant closing" or "mass layoff," as those terms are defined in the
Worker Adjustment and Retraining Notification Act of 1988 (the "WARN Act") or
any similar state law affecting in whole or in part any site of employment,
facility, operating unit or employee of the Company or any Subsidiary, without
the prior written consent of MergerCo and without complying with the notice
requirements and other provisions of the WARN Act or any similar state law.
Between the date hereof and the Closing Date, the Company shall provide prompt
written notice of any "employment loss," as that term is defined in the WARN
Act, suffered by any employee of the Company's headquarters located in
Rochester, New York that occurs prior to the Closing Date. Buyer acknowledges
that the Surviving Corporation shall be responsible for the delivery of any
notices to employees of the Surviving Corporation that are required by the WARN
Act.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 PROXY STATEMENT; SHAREHOLDERS MEETING.
(a) PREPARATION OF PROXY STATEMENT. Promptly following the date of this
Agreement, but no later than March 17, 1999, the Company shall prepare and file
with the SEC the Proxy Statement in preliminary form. The Company will use its
best efforts to cause the Proxy Statement to be mailed to the Company's
shareholders as promptly as practicable after clearance thereof with the SEC.
If, at any time prior to the Shareholders Meeting, any event with respect to the
Company, its Subsidiaries, directors, officers, and/or the Merger or the other
transactions contemplated hereby shall occur, which is required to be described
in the Proxy Statement, the Company shall so describe such event and, to the
extent required by applicable law, shall cause such description to be
disseminated to the Company's shareholders.
(b) REQUEST FOR BRING-DOWN FAIRNESS OPINION. If determined by the Board
of Directors of the Company to be appropriate, the Company shall request the
delivery of the bring-down fairness opinion referred to in Section 7.3(f) from
McDonald Investments Inc. prior to completion of SEC review of the Proxy
Statement.
(c) REVIEW OF PROXY STATEMENT AND OTHER MATERIALS. The Company will
immediately notify Buyer of the receipt of any comments from the SEC (and
provide Buyer with a copy thereof) regarding the Proxy Statement and the
approval of the Proxy Statement by the SEC. Buyer shall be given a reasonable
opportunity to review and comment on all filings by the Company with the SEC and
all mailings to the Company's shareholders in connection
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with the Merger prior to the filing or mailing thereof, and the Company shall
use its best efforts to reflect all such reasonable comments.
(d) SHAREHOLDERS MEETING. Subject to the other provisions of this
Section 6.1(d), the Company will, as promptly as practicable following the date
of this Agreement and in consultation with Buyer, duly call, give notice of,
convene and hold a meeting of its shareholders (the "Shareholders Meeting") for
the purpose of approving this Agreement, the Merger and the other transactions
contemplated hereby. The Company will, through its Board of Directors, recommend
to its shareholders approval of the foregoing matters and seek to obtain all
votes and approvals thereof by the shareholders, as set forth in Section 3.16;
provided, however, that the obligations contained herein shall be subject to the
provisions of Section 6.5 of this Agreement. Subject to the foregoing, such
recommendation, together with a copy of the opinion referred to in Section 3.15,
shall be included in the Proxy Statement. The Company will use its best efforts
to hold the Shareholders Meeting as soon as practicable after the date hereof.
(e) STOCK TRANSFER RECORDS. The Company will cause its transfer agent
to make stock transfer records relating to the Company available to Buyer to the
extent reasonably necessary to effectuate the intent of this Agreement.
6.2 ACCESS TO INFORMATION; CONFIDENTIALITY. The Company shall, and
shall cause its Subsidiaries and the officers, employees, agents and
representatives of the Company and its Subsidiaries, to afford to Buyer,
MergerCo and their respective agents, representatives and potential financing
sources, reasonable access to the personnel and the Books and Records of the
Company and its Subsidiaries and all of their properties (including for purposes
of Section 6.16 hereof) during normal business hours prior to the Effective Time
of the Merger. The Company shall permit Buyer throughout the period prior to the
Closing to meet with employees and other agents of the Company at such
reasonable times as shall be approved by the Company. The Company shall permit
Buyer to perform such engineering, environmental and workplace condition surveys
and other physical inspections as Buyer may deem necessary. During the period
prior to the Effective Time of the Merger, the Company shall, and shall cause
its Subsidiaries and the officers, employees, agents and representatives of the
Company and its Subsidiaries, to furnish promptly to Buyer (i) a copy of each
report, schedule, registration statement and other document filed by it during
such period pursuant to the requirements of federal or state securities laws and
(ii) all other information concerning its business, properties, financial
condition, operations and personnel as Buyer may from time to time reasonably
request. Except as required by law, until the Effective Time of the Merger each
of the Company, Buyer and MergerCo shall hold, and shall cause its respective
directors, officers, employees, accountants, counsel, financial advisors and
other representatives and affiliates to hold, any nonpublic information in
confidence to the extent required by and in accordance with that certain
Confidentiality Agreement, dated October 19, 1998, by and between the Company
and the Buyer. In the event of conflict between any provision of such
Confidentiality Agreement and any provision of this Agreement, this Agreement
shall prevail.
6.3 REASONABLE BEST EFFORTS.
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(a) TAKING OF NECESSARY ACTIONS. Upon the terms and subject to the
conditions set forth in this Agreement, each of the parties agrees to use its
reasonable best efforts to take or cause to be taken all actions, and to do or
cause to be done, and to assist and cooperate with the other parties in doing,
all things necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement. Buyer, MergerCo and the Company will use their
respective reasonable best efforts and cooperate with one another to promptly
(i) determine whether any filings are required to be made or consents,
approvals, waivers or Permits are required to be obtained (or, which if not
obtained, would result in a breach or violation, or an event of default,
termination or acceleration, of any law, regulation, rule, Contract or Permit)
in connection with the transactions contemplated by this Agreement, and (ii)
make any such filings, furnish information required in connection therewith and
timely seek to obtain any such consents, approvals, waivers or Permits.
(b) ANTITRUST FILINGS. Each party promptly will file all documents
required to be filed with any Governmental Entity under the HSR Act or under any
other antitrust or similar laws, rules or regulations of any Governmental Entity
(collectively with the HSR Act, "Antitrust Laws") with respect to the
transactions contemplated hereby and shall cooperate with each other party to
the extent necessary to assist any other party in the preparation of such
filings. Buyer shall be responsible for payment of the $45,000 initial filing
fee required by the HSR Act. In connection with the receipt of any necessary
approvals under any Antitrust Laws, the Company agrees to take all reasonable
action required in order to comply with any Antitrust Laws in connection with
the transactions contemplated by this Agreement; provided that no divestiture of
any material business, product lines or assets or any material undertakings of
the Company shall be made unless acceptable to both the Company and to Buyer.
Notwithstanding any provision contained herein, Buyer and Surviving Corporation
shall not be required to make any divestitures or provide any undertakings that
may be requested in connection with any Antitrust Laws or to consent to the
making or provision thereof by the Company or its Subsidiaries.
(c) DELISTING OF COMPANY COMMON SHARES. Each of the parties agrees to
cooperate with each other party in taking or causing to be taken all action
necessary to delist the Company Common Shares from the Nasdaq National Market
("Nasdaq"), provided that such delisting shall not be effective until after the
Effective Time of the Merger. The parties also acknowledge that it is MergerCo's
intent that, following the Merger, the Company Common Shares will not be quoted
on Nasdaq or listed on any national securities exchange.
6.4 PUBLIC ANNOUNCEMENTS. Neither MergerCo or Buyer, on the one hand,
nor the Company, on the other hand, will issue any press release or public
statement with respect to the transactions contemplated by this Agreement,
including the Merger, without the other party's prior consent, except as, in the
opinion of its counsel, may be required by applicable law, court process or
under any listing agreement with Nasdaq. MergerCo and the Company agree to
consult with each other before issuing, and provide each other the opportunity
to review and comment upon, any such press release or other public statement
with respect to the transactions contemplated hereby. The parties agree that the
initial press release to be issued
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with respect to the transactions contemplated by this Agreement shall be
mutually agreed upon prior to the issuance thereof.
6.5 OTHER OFFERS TO ACQUIRE THE COMPANY.
(a) NO SOLICITATION OF OTHER OFFERS. From and after the date hereof
until the termination of this Agreement, the Company will not, and will not
authorize or permit any of its Subsidiaries or any of the directors, officers,
employees, representatives, agents or Affiliates of the Company or any of its
Subsidiaries (including without limitation any investment banker, broker,
financial advisor, attorney or accountant or any other agents retained by or on
behalf of the Company or any of its Subsidiaries), whether acting in their
individual capacities or otherwise, to directly or indirectly do any of the
following: (i) solicit, initiate, encourage, facilitate or cooperate with
(including through the furnishing of any information) any inquiry or the making
of any proposal which constitutes, or may reasonably be expected to result in,
any Transaction Proposal (as hereinafter defined); (ii) propose, enter into or
participate in any discussions or negotiations with any Person regarding a
Transaction Proposal; or (iii) agree to or endorse any Transaction Proposal;
provided, however, that the foregoing shall not prohibit the Company from (A)
furnishing information to a third party who has made a Superior Transaction
Proposal (as hereinafter defined), subject to the prior receipt of a binding
confidentiality agreement containing terms and conditions no less restrictive
than those set forth in the Confidentiality Agreement dated October 19, 1998
between the Company and Buyer, (B) thereafter engaging in discussions or
negotiations with a third party who has made a Superior Transaction Proposal, or
(C) following its receipt of a Superior Transaction Proposal and subject to
Section 6.5(c) below, taking and disclosing to its shareholders a position with
respect thereto, or taking any other legally required action with respect
thereto (including without limitation the filing of any documents with the SEC
or changing or withdrawing the recommendation of the Company's Board of
Directors with respect to the Merger), but in each case referred to in the
foregoing clauses (A) through (C), only after the Board of Directors of the
Company has concluded in good faith, after consultation with the Company's
financial advisers and based upon the advice of independent legal counsel (who
may be the Company's regularly engaged legal counsel), that such action is
necessary in order for the Directors of the Company to comply with their
fiduciary obligations to the Company's shareholders under applicable law.
(b) DEFINITIONS OF TRANSACTION PROPOSAL AND SUPERIOR TRANSACTION
PROPOSAL. For purposes of this Agreement, the term "Transaction Proposal" shall
mean any of the following (other than the Merger contemplated by this
Agreement): (i) a merger, consolidation, share exchange, recapitalization,
business combination, liquidation, dissolution or any similar transaction
involving the Company; (ii) a sale, lease, exchange, mortgage, pledge, transfer
or other disposition of ten percent (10%) or more of the assets of the Company
and its Subsidiaries, taken as a whole, in a single transaction or series of
transactions; (iii) any tender offer or exchange offer for, or the acquisition
(or right to acquire) of beneficial ownership by any "person" or "group" (as
such terms are defined in Section 13(d)(3) of the Exchange Act), other than by
Buyer or its Affiliates, of Company Common Shares such that such "person" or
"group" beneficially owns twenty percent (20%) or more of the outstanding
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Company Common Shares or the filing of a registration statement under the
Securities Act in connection therewith; (iv) any other material corporate
transaction, the consummation of which would, or reasonably could be expected
to, impede, interfere with, prevent or materially delay the Merger or which
would reasonably be expected to dilute materially the benefits to Buyer of the
transactions contemplated herein; or (v) any public announcement of a proposal,
plan or intention to do any of the foregoing or any agreement to do any of the
foregoing or any negotiations regarding any of the foregoing. For purposes of
this Agreement, the term "Superior Transaction Proposal" shall mean an
unsolicited written, bona fide Transaction Proposal that the Board of Directors
of the Company, after consultation with its financial advisors, determines in
good faith to be more favorable to the Company's shareholders than the Merger
contemplated by this Agreement, which is supported by evidence of firm
financing.
(c) NOTIFICATION OF BUYER. Prior to (i) any withdrawal or
modification by the Company's Board of Directors of its approval or
recommendation of the Merger or this Agreement, (ii) the approval or
recommendation by the Company's Board of Directors of a Transaction Proposal, or
(iii) the Company's execution of an agreement with respect to a Transaction
Proposal, the Company shall provide Buyer a written notice (a "Notice of
Transaction Proposal") advising Buyer that the Board of Directors has received a
Transaction Proposal, specifying the material terms and conditions of such
Transaction Proposal and identifying the Person making such Transaction
Proposal, and neither the Company nor any Subsidiary shall enter into an
agreement with respect to a Transaction Proposal until 11:00 p.m. on the later
of (x) the fourth business day following Buyer's receipt of the Notice of
Transaction Proposal and (y) in the event of any amendment to the price or any
material term of a Transaction Proposal, two business days following Buyer's
receipt of written notice containing the material terms of such amendment,
including any change in price (it being understood that each such further
amendment to the price or any material terms of a Transaction Proposal shall
necessitate an additional written notice to Buyer and an additional two business
day period prior to which the Company can take any action set forth in clauses
(ii) or (iii) above). In addition, if the Company proposes to enter into a
Contract with respect to any Transaction Proposal, it shall concurrently with
entering into such Contract pay, or cause to be paid, to Buyer the expenses and
fees and the Immediate Termination Fee, all as provided in and defined in
Section 9.2. The Company shall promptly advise Buyer orally and in writing of
any request for nonpublic information from, or discussions or negotiations with,
any person or entity or of any Transaction Proposal known to it, the material
terms and conditions of such request or Transaction Proposal and the identity of
the person or entity making such request or Transaction Proposal. The Company
will promptly inform Buyer of any material change in the details (including
amendments or proposed amendments) of any such request for nonpublic
information, the contents of any discussions or negotiations or any material
change in such Transaction Proposal.
(d) CONFIDENTIALITY AND STANDSTILL AGREEMENTS. During the
period from the date of this Agreement through the Effective Time of the Merger,
the Company shall not terminate, amend, modify or waive any provision of any
confidentiality or standstill agreement to which it or any of its Subsidiaries
is a party. During such period, the Company shall
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enforce, to the fullest extent permitted under applicable law, the provisions
of any such agreement, including, but not limited to, by obtaining injunctions
to prevent any breaches of any such agreement and to enforce specifically the
terms and provisions thereof in any court of the United States of America or of
any state having jurisdiction.
6.6 RESIGNATION OF DIRECTORS. Prior to the Effective Time of the
Merger, the Company shall deliver to MergerCo evidence satisfactory to MergerCo
of the resignation of all directors of the Company, effective at the Effective
Time of the Merger.
6.7 NOTIFICATION OF CERTAIN MATTERS. The Company shall give prompt
notice to Buyer or MergerCo, and Buyer or MergerCo shall give prompt notice to
the Company, of (i) the occurrence or non-occurrence of any event which causes
or is reasonably likely to cause any representation or warranty made by such
party contained in this Agreement to be untrue or inaccurate in any material
respect or any covenant, condition or agreement contained in this Agreement not
to be complied with or satisfied and (ii) any failure of the Company on the one
hand, or Buyer or MergerCo on the other hand, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 6.7 shall not limit or otherwise affect the remedies available hereunder
to the party receiving such notice.
6.8 STATE TAKEOVER LAWS. If any "fair price," "control share
acquisition" or "business combination" statute or other similar statute or
regulation shall become applicable to the transactions contemplated hereby,
including the Merger, the Company, Buyer and MergerCo, and their respective
Boards of Directors, shall use their reasonable best efforts to grant such
approvals and to take such other actions as are necessary so that the
transactions contemplated hereby may be consummated as promptly as practicable
on the terms contemplated hereby and shall otherwise use their reasonable best
efforts to eliminate the effects of any such statute or regulation on the
transactions contemplated hereby.
6.9 COMPANY 401(K) PLAN AND BONUS PLAN. Buyer shall elect either to
continue the sponsorship of the Travel Ports of America, Inc. 401(k) Plan (the
"Travel Ports 401(k) Plan"), or for the Company to terminate the Travel Ports
401(k) Plan prior to the Closing Date. In the event Buyer elects to continue
sponsorship, Buyer may in its discretion freeze or terminate the Travel Ports
401(k) Plan any time on or after the Closing Date. Similarly, in the event Buyer
elects to continue sponsorship, Buyer may in its discretion merge the Travel
Ports 401(k) Plan into the TravelCenters of America 401(k) Savings Plan, or such
other qualified defined contribution plan as may then be maintained by Buyer,
any time on or after the Closing Date. Buyer will cause the Surviving
Corporation to pay all accrued and unpaid benefits under the Company's bonus
plan (the "Company's Bonus Plan") within seventy-five (75) days of the Closing
Date. The Company will not (i) amend or alter any of the Company's employee
benefit plans and/or welfare benefit plans, including, but not limited to the
Travel Ports 401(k) Plan and the Company's Bonus Plan, or (ii) accelerate the
eligibility under any benefit plan of the Company, including payment to any
employee of a bonus under the Company's Bonus Plan.
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6.10 STATE ENVIRONMENTAL TRANSFER NOTIFICATIONS. The Company shall
cause the necessary documentation to be filed with, and the necessary approvals
to be obtained from, the proper agencies in certain states, including but not
limited to the State of New Jersey and the State of Indiana, evidencing the
Company's compliance with applicable state environmental regulations and
property transfer statutes.
6.11 SEVERANCE PLAN. Within thirty (30) days from the date hereof, the
Company shall create, with the prior consent and approval of Buyer, a severance
plan (the "Severance Plan") for a certain limited group of employees of the
Company (other than Messrs. Saunders and Holahan) providing for certain payments
which may be made to such employees under certain limited circumstances as are
to be set forth in the Severance Plan, all as more fully described in Section
6.11 of the Disclosure Schedule.
6.12 OPTION CANCELLATION AGREEMENTS. In accordance with Section 2.2(b)
of this Agreement, the Company shall deliver to Buyer prior to the Effective
Time of the Merger, Option Cancellation Agreements executed by each holder of
unexpired outstanding Company Stock Options (whether granted under a Company
Stock Option Plan or otherwise), providing for the exercise and/or cancellation
of all Company Stock Options; and all holders of such Company Stock Options not
theretofore exercised will be entitled to receive solely the cash amount
referred to in Section 2.2(b). Simultaneous with Closing, Buyer shall make
available the funds necessary to make all payments required to be made to the
holders of unexercised Company Stock Options pursuant to Section 2.2(b).
6.13 WARRANT CANCELLATION AGREEMENTS. In accordance with Section 2.2(c)
of this Agreement, the Company shall deliver to Buyer prior to the Effective
Time of the Merger, Warrant Cancellation Agreements executed by each holder of
unexpired outstanding Company Warrants, providing for the cancellation of all
Company Warrants; and the holders of Company Warrants issued pursuant to the
1995 Warrant Agreement shall have theretofore been exercised at a price of $3.15
per share or shall represent the right to receive solely $1.15 per share in cash
upon exercise (net of a $3.15 exercise price) pursuant to such Warrant
Cancellation Agreement and all other Company Warrants shall have been canceled.
Simultaneous with Closing, Buyer shall make available the funds necessary to
make all payments required to be made to the holders of unexercised Company
Warrants pursuant to Section 2.2(c).
6.14 REDEMPTION OF CONVERTIBLE DEBT SECURITIES. The Company shall cause
written notification of the redemption of the Convertible Debt Securities to be
given to the holders thereof, in accordance with the terms of the Convertible
Debt Securities or the indentures or other agreements governing the terms
thereof and in accordance with Section 2.2 hereof. Further, the Company shall
take all necessary action to arrange for all outstanding Convertible Debt
Securities, other than such Convertible Debt Securities converted into Company
Common Shares by the holder thereof, at a conversion price of $3.98 in the case
of the Convertible Debentures and $2.62 in the case of the Convertible Notes, to
be redeemed in full, in accordance with the terms thereof, and to be
extinguished and of no further force and effect
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simultaneous with the Effective Time of the Merger. Simultaneous with Closing,
Buyer shall provide the Company with the funds necessary to make all payments
required to be made to the holders of outstanding Convertible Debt Securities
pursuant to this paragraph.
6.15 REPAYMENT OF INDEBTEDNESS. In addition to the redemption of the
Convertible Debt Securities, the Company shall take all action necessary to
arrange for the repayment in full of all outstanding Indebtedness of the Company
and its Subsidiaries, other than Indebtedness owed by the Company pursuant to
any capital leases of the Company that are not in default or accelerated under
the terms of any such lease, and shall cause such Indebtedness, including the
payment of any prepayment fees or penalties, to be repaid in full simultaneous
with the Effective Time of the Merger. The Company shall obtain, not later than
the Effective Time of the Merger, written releases or other termination
documents from all holders of any Liens on any assets or properties (both real
and personal) of the Company relating to such Indebtedness; provided, however,
that at the request of Buyer, the Company shall not repay the Industrial
Development Bonds on the Dansville facility (and the Surviving Corporation will
assume the obligations related thereto). Notwithstanding the foregoing, any
redemption or repayment of Indebtedness by the Company pursuant to Section 6.14
or this Section 6.15 (including any payment of prepayment penalties or fees)
shall be subject to the prior approval of Buyer. Simultaneous with Closing,
Buyer shall provide the Company with the funds necessary to make all payments
required pursuant to this paragraph.
6.16 ENVIRONMENTAL DILIGENCE. The Company shall provide or make
available to Buyer all information in its possession or reasonably obtainable
concerning the environmental condition of all Owned Properties and Leasehold
Premises and all formerly owned and leased facilities. The Company shall, at
Buyer's expense, engage a consultant or consultants (the selection and the terms
of any payment obligations of any such consultant(s) shall be acceptable to
Buyer) to (i) conduct Phase I environmental audits to be performed on each of
the Company's sites, (ii) conduct Phase II environmental audits to be performed
on up to seven of the Company's sites as selected by Buyer, (iii) conduct
resampling of monitoring wells on three of the Company's sites as selected by
Buyer, (iv) install a monitoring well at the Company's Mahwah, New Jersey
facility at a location selected by Buyer and (v) install a monitoring well at
the Company's Beach Haven, Pennsylvania facility at a location selected by
Buyer. Buyer shall direct each such consultant, within the parameters described
above, as to the scope and activities to be included in such engagement and any
writings or reports produced by the consultant shall be delivered to Buyer. The
Company agrees to use its reasonable best efforts to take or cause to be taken
all actions, and to do or cause to be done, and to assist and cooperate with
each consultant and Buyer in doing all things necessary to accomplish the
purposes of this Section 6.16. Buyer and the Company agree to cooperate so as to
attempt to minimize any (a) interference with the Company's regular conduct of
its business at the Company's properties or facilities, and (b) damages caused
by such consultants in connection with the activities contemplated by this
Section 6.16.
6.17 AMENDMENT OF SUBLEASE. The Company shall, prior to the Effective
Time of the Merger, amend the sublease with Maybrook Realty, Inc. ("Maybrook")
for the Maybrook,
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New York travel plaza (as amended, the "Amended Sublease") and shall cause
Maybrook to enter into the Amended Sublease to provide two (2) additional ten
(10) year renewal options, in addition to the existing three (3), five (5)-year
renewal options. Rent for the existing three (3), five (5)-year renewal periods
shall be in the amount of $41,250 per month for the first period, $45,375 per
month for the second period and $49,913 per month for the third period; rent
for the first ten (10) year renewal period shall be $54,904 per month and rent
for the second ten (10) year renewal period shall be $60,395. In addition, the
Amended Sublease shall change the Company's current purchase option
consideration from $3,500,000 to the greater of the fair market value of such
interest at the time of exercise of such option or $4,500,000.
6.18 TERMINATION OF CONSULTING AGREEMENT FOR E. PHILIP SAUNDERS. Prior
to the Effective Time of the Merger, each of the Company and E. Philip Saunders
shall have executed documentation (the "Saunders Consulting Agreement
Termination"), in form and substance satisfactory to Buyer, necessary to
terminate the consulting agreement between the Company and E. Philip Saunders,
dated May 1, 1992, in accordance with its terms.
6.19 GRIFFITH OIL FUEL SUPPLY CONTRACT. Buyer shall cause Surviving
Corporation to assume the obligations of the Company under its fuel and gas
supply agreement with Griffith Oil Co., Inc., dated July 1, 1996 (the "Griffith
Supply Agreement"), and shall keep such agreement in place for a period of at
least one year. Notwithstanding the foregoing, Surviving Corporation shall be
entitled in its sole discretion to provide a notice of termination under the
Griffith Supply Agreement at any time after the Effective Time of the Merger so
long as such termination is not effective on or prior to the first anniversary
of the Effective Time of the Merger.
6.20 INDEMNIFICATION.
(a) For a period of six years following the Closing Date, Buyer shall
cause the Surviving Corporation to hold harmless and indemnify the directors,
officers and employees of the Company and its Subsidiaries immediately prior to
the Effective Time of the Merger (each, an "Indemnified Party") to the same
extent that the Company currently is required under the NYBCL and its
Certificate of Incorporation, By-Laws and contracts in effect on the date of
this Agreement to indemnify such person and Buyer shall also cause the Surviving
Corporation to advance expenses as incurred to the same extent as currently
required; provided, however, that (a) any determination required to be made with
respect to whether a person's conduct complies with the standards set forth
under New York law and the Company's Certificate of Incorporation, By-Laws and
contracts shall be made by independent counsel mutually agreed upon between
Buyer and the Indemnified Party, and (b) Surviving Corporation shall be
obligated pursuant to this Section 6.20 to pay for only one firm of counsel for
all Indemnified Parties, unless an Indemnified Party shall have reasonably
concluded, based on the advice of counsel, that in order to be adequately
represented, separate counsel is necessary for such Indemnified Party, in which
case Surviving Corporation shall be obligated to pay for such separate counsel.
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(b) Buyer shall cause the persons serving as officers and directors of
the Company and its Subsidiaries immediately prior to the Effective Time of the
Merger to be covered for a period of six years following the Effective Time of
the Merger by the directors' and officers' liability insurance policy maintained
by the Company (provided that Buyer may substitute or cause the Company to
substitute therefor a single premium tail coverage with a policy limit equal to
the Company's existing annual coverage limit) with respect to acts or omissions
occurring prior to the Effective Time of the Merger that were committed by such
officers and directors in their capacity as such.
6.21 PAYMENT OF TRANSFER TAXES. Following the Effective Time of the
Merger, Buyer agrees to cause the Surviving Corporation to pay all taxes imposed
on the Company or on its properties or assets that arise as a result of the
consummation of the Merger.
6.22 NON-SOLICITATION OF EMPLOYEES. Buyer agrees for a period of one
year from the date of termination of this Agreement prior to the Effective Time,
not to actively solicit for employment any salaried employees of the Company for
so long as they are employed by the Company. The Company agrees for a period of
one year from the termination of this Agreement prior to the Effective Time, not
to actively solicit for employment any salaried employees of Buyer for so long
as they are employed by Buyer. Notwithstanding the foregoing, nothing in this
paragraph shall prohibit Buyer or the Company from hiring any person whose
interest in such employment arises from such person's response to a general
advertisement for employment of Buyer or the Company, as applicable.
6.23 CONFLICTS, VIOLATIONS, DEFAULTS, ASSIGNMENTS AND NOTICES. The
Company shall, prior to the Shareholders Meeting, cure or obtain any waivers
with respect to all conflicts, violations or defaults, and provide all notices
and obtain all approvals and consents, referred to in Sections 3.4(b) or 3.28(b)
and set forth on Sections 3.4(b) or 3.28(b) of the Disclosure Schedule. Prior to
the Shareholders Meeting, the Company shall obtain written releases or other
termination documents from all holders of any Liens on any assets or properties
(both real and personal) of the Company not relating to Indebtedness.
6.24 WYOMING LEASE. Prior to the Effective Time of the Merger, the
Company shall enter into a written lease in form and substance reasonably
acceptable to Buyer with E. Philip Saunders and such other owners or parties
with an ownership or beneficial interest in the real property located at I-390
and Exit 5 in Dansville, Livingston County, NY (the "Wyoming Lease"), and any
other real property owned by E. Philip Saunders and such other owners or parties
as are associated with the business operations at the Owned Properties and
Leasehold Premises. The terms of the Wyoming Lease shall provide for a term of
years expiring no sooner than June 30, 2024, and including such renewal or
extension provisions and purchase options as are set forth in those certain
leases between the Company and John and William Kelly dated April 18, 1979, as
amended, and the Company and Richard, James and John Bennett dated June 23,
1979, as amended, pursuant to the Company's acquisition of Interstate Travel
Plaza, Inc., assignee of the W.W. Griffith Oil Co., Inc., tenant under those
certain lease agreements. Rent payable for the term of the Wyoming Lease shall
be $4,800 per year and shall be subject to rent increases at such times and in
such amounts as are equal to any
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percentage or proportionate rent increase or escalation paid under the leases
described in foregoing sentence. Such other leases by and between the Company
and E. Philip Saunders and such other owners or parties shall provide the
Surviving Corporation with the terms, rentals and purchase and renewal options
as are the right of the Company in any verbal or written leases, if any.
6.25 TERMINATION OF OPTIONS. Prior to the Effective Time of the Merger,
the Company shall terminate all option agreements for the lease or purchase of
any interest in real property not already owned or occupied by the Company as
one of the Owned Properties or Leased Premises, specifically including without
limitation, the Company's option to purchase certain real property in
Jeffersonville, Ohio, and shall provide all notices and other communications
necessary to effectuate such terminations to prevent further recourse or
liability to the Company or to the Surviving Corporation with respect to any
such option agreements. The Company shall provide Buyer with a reasonable
opportunity to review and comment on all notices delivered pursuant to this
Section 6.25 and any payments made pursuant to this Section 6.25 shall be
subject to the prior approval of Buyer. Buyer and the Company specifically
acknowledge and agree that the Company's agreements, dated January 7, 1998, for
the purchase of fourteen (14) acres of real property in New Milford, Susquehanna
County, Pennsylvania, are not options to be terminated pursuant to the
provisions of this Section 6.25.
ARTICLE VII
CONDITIONS PRECEDENT TO THE MERGER
7.1 CONDITIONS TO EACH PARTY'S OBLIGATION. The respective obligation of
each party to effect the Merger is subject to the satisfaction or waiver on or
prior to the Closing Date of the following conditions:
(a) COMPANY SHAREHOLDER APPROVAL. The Company Shareholder Approval
shall have been obtained if required by applicable law.
(b) HSR ACT. All waiting periods (and any extensions thereof)
applicable to the Merger under the HSR Act shall have been terminated or shall
have expired, and any filings or approvals required under any state or foreign
antitrust or similar laws shall have been made or obtained.
(c) NO INJUNCTIONS OR RESTRAINTS. No temporary restraining order,
preliminary or permanent injunction or other order issued by any Governmental
Entity or other legal restraint or prohibition shall be in effect preventing or
prohibiting the consummation of the Merger; provided, however, that the parties
shall, subject to the second sentence of Section 6.3 (b) hereof, use their best
reasonable efforts to have any such injunction, order, restraint or prohibition
vacated.
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7.2 CONDITIONS TO OBLIGATIONS OF THE BUYER AND MERGERCO. The
obligations of the Buyer and MergerCo to effect the Merger are further subject
to the satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties of the Company and its Subsidiaries contained in this Agreement shall
have been true and correct in all material respects when made and, except to the
extent such representations and warranties speak to an earlier date, shall be
true and correct in all material respects at and as of the Effective Time of the
Merger, as if made at and as of such time; provided, however, that each of the
representations and warranties of the Company and its Subsidiaries contained in
this Agreement that are qualified as to materiality, Material Adverse Effect or
Material Adverse Change shall have been true and correct when made and, except
to the extent such representations and warranties speak to an earlier date,
shall be true and correct at and as of the Effective Time of the Merger, as if
made at and as of such time, in any such case, except as contemplated or
permitted by this Agreement.
(b) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company shall have
performed and fulfilled, in all material respects, each of its obligations,
covenants and agreements under this Agreement required to be performed by it at
or prior to the Closing Date, including but not limited to its obligations
pursuant to Sections 6.5, 6.10, 6.14, 6.15, and 6.16 hereof.
(c) CONSENTS, ETC. Buyer shall have received evidence, in form and
substance reasonably satisfactory to it, that all the Permits, consents,
approvals, authorizations, qualifications and orders of Governmental Entities
and all other third parties identified in Section 3.4(c) of the Disclosure
Schedule have been obtained.
(d) NO LITIGATION. There shall not be instituted, pending or threatened
by any Governmental Entity any suit, action or proceeding (or by any other
person any suit, action or proceeding that has a reasonable likelihood of
success in the good faith opinion of the Buyer) (i) challenging or seeking to
restrain or prohibit the consummation of the Merger or any of the other
transactions contemplated by this Agreement or, in the good faith opinion of the
Buyer, materially and adversely affecting the contemplated economic or business
benefits of the transactions contemplated hereby, (ii) seeking to prohibit or
limit the ownership or operation by the Company, any Subsidiary, the Buyer or
any of the Buyer's subsidiaries of a material portion of the business or assets
of the Company and its Subsidiaries or the Buyer and its subsidiaries, taken as
a whole, or to compel the Company or the Buyer to dispose of or hold separate
any material portion of the business or assets of the Company and its
Subsidiaries or the Buyer and its subsidiaries, taken as a whole, in each case
as a result of the Merger or any of the other transactions contemplated by this
Agreement, (iii) seeking to impose limitations on the ability of the Buyer or
MergerCo to acquire or hold, or exercise full rights of ownership of, any shares
of Common Stock, including, without limitation, the right to vote such shares of
Common Stock on all matters properly presented to the shareholders of the
Company or (iv) seeking to prohibit the Buyer or any of its Subsidiaries from
effectively controlling in any respect any material portion of the business or
operations of the Company or its Subsidiaries.
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(e) NO MATERIAL ADVERSE CHANGE. Except as disclosed in Section 3.7 of
the Disclosure Schedule, there has not occurred any Material Adverse Change with
respect to the Company since April 30, 1998.
(f) ABSENCE OF CERTAIN RULES AND ORDERS. There shall not be any
statute, rule, regulation, judgment, order or injunction enacted, entered,
enforced, promulgated or deemed applicable to the Merger by any Governmental
Entity that would result in any of the consequences referred to in clauses (i)
through (iv) of Section 7.2(d).
(g) OPTION CANCELLATION AGREEMENTS. Each holder of any unexpired
outstanding Company Stock Option (whether granted under a Company Stock Option
Plan or otherwise) shall have executed an Option Cancellation Agreement and
delivered such Option Cancellation Agreement to Buyer.
(h) WARRANT CANCELLATION AGREEMENTS. Each holder of any unexpired
outstanding Company Warrant shall have executed a Warrant Cancellation Agreement
and delivered such Warrant Cancellation Agreement to Buyer.
(i) THE AMENDED SUBLEASE. The Company and Maybrook shall have entered
into the Amended Sublease.
(j) CONSULTING AGREEMENT. MergerCo. shall have entered into a three (3)
year consulting agreement (the "Consulting Agreement") with John M. Holahan, in
substantially the form attached hereto as Exhibit D, pursuant to which Mr.
Holahan will be paid $150,000 per year and will agree not to compete with Buyer
for the period of the Consulting Agreement and for the period of two (2) years
following the expiration thereof.
(k) SHARE EXCHANGE. The Share Exchange shall have occurred prior to the
Effective Time of the Merger.
(l) OPINION OF COUNSEL. Harris, Beach & Wilcox, LLP, counsel to the
Company, shall have delivered to the Buyer and MergerCo a written opinion of
counsel in form and substance satisfactory to Buyer, subject to customary
assumptions and qualifications, with respect to (i) the effectiveness of the
Merger, (ii) the due incorporation, valid existence and good standing of the
Company and its Subsidiaries, (iii) the validity, binding effect and
enforceability of this Agreement, the Option Cancellation Agreements and the
Warrant Cancellation Agreements and (iv) such other matters as MergerCo may
reasonably request.
(m) COMPANY CERTIFICATE. The Company shall have delivered to the Buyer
and MergerCo a certificate, dated as of the Closing Date and signed on its
behalf by its Chief Executive Officer and its Chief Financial Officer, as to the
satisfaction by it of the conditions set forth in subsections 7.2(a), 7.2(b),
7.2(d), 7.2(e) and 7.2(l).
(n) TERMINATION OF SAUNDERS CONSULTING AGREEMENT. Each of the Company
and E. Philip Saunders shall have executed and delivered to Buyer the Saunders
Consulting Agreement Termination.
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(o) THE WYOMING LEASE AND REAL ESTATE OPTIONS. The Company and E.
Philip Saunders and any other parties with an ownership or beneficial interest
in the real property referred to Section 6.24 shall have entered into the
Wyoming Lease and any other leases referred to in Section 6.24. The Company
shall have terminated all option agreements for the lease or purchase of real
property referred to Section 6.25.
7.3 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligation of the
Company to effect the Merger is further subject to the satisfaction or waiver on
or prior to the Closing Date of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties of the Company and its Subsidiaries contained in this Agreement shall
have been true and correct in all material respects when made and, except to the
extent such representations and warranties speak to an earlier date, shall be
true and correct in all material respects at and as of the Effective Time of the
Merger, as if made at and as of such time; provided, however, that each of the
representations and warranties of the Company and its Subsidiaries contained in
this Agreement that are qualified as to materiality, Material Adverse Effect or
Material Adverse Change shall have been true and correct when made and, except
to the extent such representations and warranties speak to an earlier date,
shall be true and correct at and as of the Effective Time of the Merger, as if
made at and as of such time, in any such case, except as contemplated or
permitted by this Agreement.
(b) PERFORMANCE OF OBLIGATIONS OF THE BUYER AND MERGERCO. The Buyer and
MergerCo shall have performed and fulfilled, in all material respects, each of
their respective obligations, covenants and agreements under this Agreement
required to be performed by them at or prior to the Closing Date.
(c) NO LITIGATION. There shall not be instituted, pending or threatened
by any Governmental Entity any suit, action or proceeding (or by any other
person any suit, action or proceeding that has a reasonable likelihood of
success in the good faith opinion of the Company) challenging or seeking to
restrain or prohibit the consummation of the Merger or any of the other
transactions contemplated by this Agreement.
(d) OPINION OF COUNSEL. The Buyer's and MergerCo's legal counsel shall
have delivered to the Company a written opinion of counsel in form and substance
satisfactory to the Company, subject to customary assumptions and
qualifications, with respect to (i) the validity, binding effect and
enforceability of this Agreement and (ii) such other matters as the Company may
reasonably request.
(e) BUYER AND MERGERCO CERTIFICATE. The Buyer and MergerCo shall have
delivered to the Company certificates, dated as of the Closing Date and signed
on their behalf by their respective President and Chief Financial Officer, as to
the satisfaction by them of the conditions set forth in subsections 7.3(a),
7.3(b) and 7.3(c).
(f) BRING-DOWN OPINION OF MCDONALD INVESTMENTS INC. If requested by the
Board of Directors of the Company in accordance with Section 6.1(b), immediately
prior to the
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mailing of the Proxy Statement to the shareholders of the Company, the Company
shall have received the written bring-down fairness opinion of McDonald
Investments Inc. dated as of such date, to the effect that as of the date of
the meeting of the Board of Directors of the Company referred to in Section
3.16, the financial consideration to be received by the shareholders of the
Company pursuant to the Merger is fair to the holders of Company Common Shares
from a financial point of view.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time of the Merger, whether before or after approval of any
matters presented in connection with the Merger by the shareholders of the
Company:
(a) by the written agreement of Buyer and the Company;
(b) by either Buyer or the Company if any Governmental Entity shall
have issued an order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the Merger, or if there shall be
in effect any other legal restraint or prohibition preventing or prohibiting the
consummation of the Merger, and such order, decree, ruling or other action shall
have become final and nonappealable (other than due to the failure of the party
seeking to terminate this Agreement to perform its obligations under this
Agreement required to be performed at or prior to the Effective Time of the
Merger);
(c) by either Buyer or the Company upon the Company's execution of a
binding agreement with a third party with respect to a Transaction Proposal,
provided that if the Company seeks to terminate this Agreement pursuant to this
provision, the Company has complied with all provisions of this Agreement,
including the notice provisions contained in Section 6.5(c), and provided
further that, in either case, the Company, prior to such termination, pays the
Immediate Termination Fee required in accordance with Section 9.2;
(d) by Buyer in the event of a material breach by the Company of, or
failure by the Company to perform in any material respect, any representation,
warranty, covenant or other agreement of the Company contained in this
Agreement, which cannot be or has not been cured within ten (10) days after the
giving of written notice to the Company;
(e) by the Company in the event of a material breach by MergerCo or
Buyer of, or failure by MergerCo or Buyer to perform in any material respect,
any representation, warranty, covenant or other agreement of MergerCo or Buyer
contained in this Agreement, which cannot be or has not been cured within ten
(10) days after the giving of written notice to MergerCo or Buyer;
(f) by Buyer if there has occurred or occurs a Material Adverse Change
with respect to the Company, at any time after the date of this Agreement;
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<PAGE> 51
(g) by Buyer, if at any time prior to the Shareholders Meeting, the
Company's Board of Directors shall have failed to make its recommendation
referred to in Section 6.1(d), withdrawn such recommendation or modified or
changed such recommendation in a manner adverse to the interests of Buyer
(whether in accordance with Sections 6.1(d) and 6.5 or otherwise) or taken any
position or action that is inconsistent with such recommendation (including,
without limitation, recommending or not opposing any Transaction Proposal);
(h) by either Buyer or the Company if the Company Shareholder Approval
shall not have been obtained at the Shareholders Meeting;
(i) by either Buyer or the Company if the fairness opinion provided to
the Company's Board of Directors by McDonald Investments Inc. prior to the
execution of this Agreement shall be withdrawn after and as a result of a
Transaction Proposal that, in the reasonable opinion of McDonald Investments
Inc., requires McDonald Investments Inc. to withdraw or not deliver such
fairness opinion, or the bring-down fairness opinion of McDonald Investments
Inc. referred to in Section 7.3(f), if requested by the Board of Directors of
the Company in accordance with Section 6.1(b), is not delivered or shall be
withdrawn for any reason;
(j) by Buyer in the event that Buyer's environmental due diligence,
including the environmental audits, conducted pursuant to Section 6.16 hereof,
disclose environmental-related obligations, problems or other Liabilities that
are reasonably estimated by Buyer to cost in the aggregate more than $2,000,000
(including the cost of investigation, consulting, remediation and compliance),
net of any value reasonably expected by Buyer to be recovered from any existing
insurance or other identified expected third party recoveries, that, in each
case, have been disclosed by the Company to Buyer, all as adjusted for time and
likelihood of occurrence, and all as determined by Buyer in its sole reasonable
discretion and consistent, to the extent analogous, with Buyer's past practice;
or
(k) by either Buyer or the Company, if the Closing Date has failed to
occur on or before August 31, 1999, except to the extent that such failure
arises out of or results from the knowing action or inaction of the party
seeking to terminate pursuant to this Section 8.1(k); provided, however, that if
the only condition that has not been satisfied by the Company after reasonable
best efforts is the Company's obligation to obtain Option Cancellation
Agreements or Warrant Cancellation Agreements from each holder of Company Stock
Options and Company Warrants, as the case may be, the foregoing date shall be
extended by an additional thirty (30) calendar days.
8.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement by either the Company or Buyer as provided in Section 8.1, this
Agreement shall forthwith become void and shall have no further effect, without
any Liability on the part of the Company, MergerCo or Buyer, except that the
provisions of Sections 3.14 and 4.3 (relating to brokers), the last sentence of
Section 6.2 (relating to confidentiality), Section 6.22 (relating to
non-solicitation of employees), this Section 8.2, Section 9.2 (relating to fees
and expenses) and Section 9.7 (relating to third party beneficiaries) shall
survive any such termination of this
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Agreement. Nothing contained in this section shall relieve any party for any
breach of the representations, warranties, covenants or agreements set forth in
this Agreement which occurs prior to the termination hereof.
8.3 AMENDMENT. This Agreement may be amended by the parties at any time
before or after any required approval of matters presented in connection with
the Merger by the shareholders of the Company; provided, however, that after any
such approval, there shall be no amendment of this Agreement that by law
requires further approval by such shareholders without the further approval of
such shareholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties.
8.4 EXTENSION; WAIVER. At any time prior to the Effective Time of the
Merger, the parties may (i) extend the time for the performance of any of the
obligations or other acts of the other parties, (ii) waive any inaccuracies in
the representations and warranties contained in this Agreement or in any
document delivered pursuant to this Agreement or (iii) subject to the proviso of
Section 8.3, waive compliance with any of the agreements or conditions contained
in this Agreement. Any agreement on the part of a party to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. The failure of any party to this Agreement to assert any
of its rights under this Agreement or otherwise shall not constitute a waiver of
such rights.
8.5 PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR WAIVER. Any
termination of this Agreement pursuant to Section 8.1, any amendment of this
Agreement pursuant to Section 8.3 or any extension or waiver under this
Agreement pursuant to Section 8.4, in order to be effective, shall require
action by the Board of Directors (or its duly authorized designee) of the party
terminating this Agreement, executing the amendment or granting the extension or
waiver, as the case may be.
ARTICLE IX
GENERAL PROVISIONS
9.1 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time of the Merger and
all such representations and warranties will be extinguished as of the Effective
Time of the Merger and none of the Company, Buyer and MergerCo, nor any officer,
director or employee or shareholder thereof, shall have any Liability whatsoever
with respect to any such representation or warranty after such time. This
Section 9.1 shall not limit any covenant or agreement of the parties which by
its terms contemplates performance after the Effective Time of the Merger.
9.2 FEES AND EXPENSES.
(a) EXPENSES.
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(i) If this Agreement is terminated in connection with any of
the circumstances described in Section 9.2(b) that require the payment
of an Immediate Termination Fee (as set forth therein), or 9.2(c) in
addition to the other amounts that will be or become payable pursuant
to Section 9.2(b) or (c), the Company shall promptly reimburse Buyer
and MergerCo in cash for all out-of-pocket expenses, disbursements and
fees actually paid or payable by or on behalf of Buyer or MergerCo
including to its respective accountants, attorneys, investment banks,
brokers, financial or other advisors, commercial banks and other
lending institutions (including, without limitation, up-front fees,
ticking fees, commitment fees, administrative fees and interest expense
in each case in respect of any proposed financing sources for the
Merger), or actually paid or payable to the agents of or counsel to
such commercial banks or lending institutions, in each case, whether
incurred prior to, on or after the date hereof and arising out of,
relating to, or incidental to, the discussion, evaluation, negotiation,
documentation, financing, closing and existence of the transactions
contemplated by this Agreement, the Voting Agreement or the Share
Exchange Agreement (collectively, "Buyer Expenses") up to a maximum of
$1,000,000.
(ii) If this Agreement is terminated by Buyer pursuant to
Section 8.1(d) or 8.1(f), the Company shall, as Buyer's sole remedy for
such material breach or failure to perform (except as otherwise
provided in Section 9.2(c)), promptly reimburse Buyer and MergerCo in
cash for Buyer Expenses up to a maximum of $800,000. Notwithstanding
the foregoing, if this Agreement is terminated by Buyer pursuant to
Section 8.1(f) as a result of a Material Adverse Change with respect to
the Company that results solely from economic or industry conditions
that are outside of the Company's control and that affect all
multi-unit truckstop or travel center operations (an "Industry-wide
Material Adverse Change"), Buyer shall not be entitled to reimbursement
of Buyer Expenses pursuant to this paragraph.
(iii) If this Agreement is terminated by Buyer pursuant to
Section 8.1(j), the Company shall reimburse Buyer and MergerCo in cash
for Buyer Expenses up to a maximum of $200,000.
(iv) If this Agreement is terminated by Buyer pursuant to
Section 8.1(d) or 8.1(f) and thereafter Buyer is entitled to a Deferred
Termination Fee pursuant to Section 9.2(c)(i), the Company shall
promptly reimburse Buyer and MergerCo in cash for Buyer Expenses up to
a maximum of $1,000,000, minus any amount previously reimbursed by the
Company pursuant to Section 9.2(a)(ii).
(v) If Buyer is entitled to expense reimbursement pursuant to
Section 9.2(a)(i), 9.2(a)(ii) or 9.2(a)(iv) (other than upon
termination by Buyer pursuant to Section 8.1(f) as a result of an
Industry-wide Material Adverse Change), Buyer shall, upon payment of
all amounts due it pursuant to this Agreement, transfer its ownership
interests to the Company or its designee in all title reports, survey
work, appraisals and environmental audits relating to the Company's
assets or properties, except to the extent
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<PAGE> 54
Buyer is not permitted by law to transfer any of such assets.
Notwithstanding the foregoing, Buyer shall be permitted to retain
copies of any such title reports, survey work, appraisals and
environmental audits transferred to the Company.
(vi) If this Agreement is terminated by the Company pursuant
to Section 8.1(e), Buyer shall, as the Company's sole remedy for such
material breach or failure to perform, reimburse the Company in cash
for all out-of-pocket expenses, disbursements and fees actually paid or
payable by or on behalf of the Company, including to its respective
accountants, attorneys, investment banks, brokers, financial or other
advisors, whether incurred prior to, on or after the date hereof and
arising out of, relating to, or incidental to, the discussion,
evaluation, negotiation, documentation, closing and existence of the
transactions contemplated by this Agreement, the Voting Agreement or
the Share Exchange Agreement (collectively, "Company Expenses") up to a
maximum of $500,000. Notwithstanding the foregoing, Company Expenses
shall not include any premiums, expenses, disbursements or fees paid by
the Company in connection with the procurement of directors' and
officers' liability insurance.
(b) IMMEDIATE TERMINATION FEE. If this Agreement is terminated pursuant
to any of the following provisions:
(i) by the Company pursuant to Section 8.1(c), 8.1(i) or,
after the existence of a Transaction Proposal, pursuant to 8.1(h)
unless the only Transaction Proposal in existence at the time of the
Shareholders Meeting arises under Section 6.5(b)(iii) and a majority of
the Company Common Shares beneficially owned by the person or "group"
described under said Section 6.5(b)(iii) are voted in favor of the
transactions contemplated hereunder at the Shareholders Meeting (a
"Non-Conforming Transaction Proposal") (in which case, no Immediate
Termination Fee is payable hereunder).
(ii) by Buyer pursuant to Sections 8.1(c), 8.1(g) or 8.1(i)
or, after the existence of a Transaction Proposal, pursuant to Section
8.1(h) unless the only Transaction Proposal in existence at the time of
the Shareholders Meeting is a Non-Conforming Transaction Proposal (in
which case, no Immediate Termination Fee is payable hereunder).
then the Company shall, simultaneously with such termination of this Agreement,
pay Buyer a fee of $1,200,000 in cash, which amount shall be payable in same day
funds (the "Immediate Termination Fee").
(c) DEFERRED TERMINATION FEE.
(i) If this Agreement is terminated under any of the
circumstances described in Section 9.2(a)(ii), other than a termination
by Buyer pursuant to Section 8.1(f) as a result of an Industry-wide
Material Adverse Change, and if, at any time prior to twelve (12)
months following the termination of this Agreement, any Person (other
than Buyer or MergerCo or any of their Affiliates) consummates a
transaction that would otherwise
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constitute a Transaction Proposal in which the total initially
announced value of the per share consideration for such transaction is
equal to or exceeds the Merger Consideration, the Company shall pay to
Buyer, immediately prior to the consummation of such transaction, a
fee payable in same day funds in an amount equal to $1,200,000 (the
"Deferred Termination Fee"); or
(ii) If (a) any Person (other than Buyer or MergerCo or any of
their Affiliates) shall have made, proposed, communicated or disclosed
a Transaction Proposal or (b) if, after the date of this Agreement and
prior to any termination of this Agreement, any "person" or "group" (as
such terms are defined in Section 13(d)(3) of the Exchange Act) (other
than Buyer, MergerCo or any of their Affiliates) purchases or otherwise
acquires, directly or indirectly, beneficial ownership of 10% or more
of the outstanding Company Common Shares, and, in each case, if at any
time prior to twelve (12) months following the termination of this
Agreement pursuant to Section 8.1(k) any Person (other than Buyer or
MergerCo or any of their Affiliates) consummates a transaction that
would otherwise constitute a Transaction Proposal (or enters into a
definitive agreement with respect to such a transaction which
transaction is subsequently consummated), the Company shall pay to
Buyer, immediately prior to the earlier of the execution of such
definitive agreement or the consummation of such transaction, the
Deferred Termination Fee. Notwithstanding the foregoing, for purposes
of this Section 9.2(c)(ii), the percentage threshold required for a
"Transaction Proposal" covered under Section 6.5(b)(iii) shall be
increased from 20% or more of the outstanding Company Common Shares to
33 1/3% or more of the outstanding Company Common Shares.
(d) LIMITATION TO ONE FEE. In no event shall the Company be required to
pay more than one fee pursuant to Section 9.2(b) or 9.2(c).
(e) OTHER EXPENSES. Except as provided otherwise in paragraph (a)
above, all costs and expenses incurred in connection with this Agreement, and
the transactions contemplated hereby shall be paid by the party incurring such
expenses, except that the Company shall pay all costs and expenses (i) in
connection with printing and mailing the Proxy Statement, as well as all SEC
filing fees relating to the transactions contemplated herein and (ii) of
obtaining any consents of any third party.
9.3 NOTICES. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally or sent by overnight courier to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
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<PAGE> 56
(i) If to Buyer or MergerCo, to:
TravelCenters of America, Inc.
24601 Center Ridge Road
Suite 200
Westlake, OH 44145-5634
Attention: Edwin P. Kuhn
with a copy to:
Calfee, Halter & Griswold LLP
1400 McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114
Attention: Philip M. Dawson, Esq.
(ii) If to the Company, to:
Travel Ports of America, Inc.
3495 Winton Place
Building C
Rochester, NY 14623
Attention: E. Philip Saunders
with a copy to:
Harris, Beach & Wilcox, LLP
Granite Building
130 East Main Street
Rochester, NY 14604
Attention: Thomas E. Willett, Esq.
9.4 DEFINITIONS. In addition to the other capitalized terms which are
defined elsewhere in this Agreement, as used herein the following terms shall
have the following meanings:
An "Affiliate" of any Person means another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person and any Director, officer or
controlling person of such Person.
"Books and Records" means all books and records of the Company and its
Subsidiaries relating to the businesses and properties of the Company or its
Subsidiaries, including without limitation records relating to sales and
purchases, personnel records, Tax Returns, and financial and operating data.
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A "business day" means any day, other than Saturday, Sunday or a
federal holiday, and shall consist of the time period from 12:01 a.m. through
12:00 midnight Eastern Standard Time.
"Code" means the Internal Revenue Code of 1986, as amended.
"Contract" means any contract, commitment, understanding, instrument,
lease, pledge, mortgage, indenture, note, license, agreement, purchase or sale
order, promise or similar arrangement evidencing or creating any obligation,
whether written or oral.
"Defined Benefit Plan" means any Pension Plan which is a defined
benefit plan within the meaning of Section 3(35) of ERISA.
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA, other than a Multiemployer Plan.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Governmental Entity" means any foreign, federal, state, regional or
local authority, agency, body, court or instrumentality, regulatory or
otherwise, which, in whole or in part, was formed by or operates under the
auspices of any foreign, federal, state, regional or local government.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"Indebtedness" of any Person shall mean, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
assets purchased by such Person, (e) all obligations of such Person issued or
assumed as the deferred purchase price of property or services (excluding trade
accounts payable and accrued expenses arising in the ordinary course of business
in accordance with customary trade terms), (f) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the obligations secured thereby have
been assumed by such Person, (g) all guarantees by such Person of Indebtedness
of others, (h) all capital lease obligations of such Person, (i) all obligations
of such Person in respect of interest rate protection agreements, foreign
currency exchange agreements or other interest or exchange rate hedging
arrangements, (j) all obligations of such Person as an account party to
reimburse any bank or any other Person in respect of letters of credit and
bankers' acceptances and (k) all obligations of such Person in respect of
fuel-supply hedging agreements and arrangements. The Indebtedness of any Person
shall include the Indebtedness of any partnership or joint
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venture in which such Person is a general partner or member, other than to the
extent that the instrument or agreement evidencing such Indebtedness expressly
limits the liability of such Person in respect thereof pursuant to provisions
and terms reasonably satisfactory to the Agent.
"Knowledge," when used with respect to the Company or any Subsidiary of
the Company, means the actual knowledge of the following officers and employees
or consultants (as well as any of their successors) of the Company or its
Subsidiaries: E. Philip Saunders, John M. Holahan and William Burslem III, and,
without duplication, the employees with direct supervisory authority over
financial, marketing, merchandising, environmental, tax, labor, employee
benefits and real estate matters or any of the foregoing, in each case after
reasonable investigation and inquiry. Notwithstanding the foregoing, for
purposes of Section 3.12 and 3.28, "Knowledge" shall also include the actual
knowledge of Gerry Beiermann and, in the case of Section 3.12, shall also
include the actual Knowledge of each of the general managers of each site
operated by the Company or any Subsidiary.
"Liabilities" means responsibilities, obligations, duties, commitments,
claims and liabilities of any and every kind, whether known or unknown, asserted
or unasserted, accrued, absolute, contingent or otherwise.
"Lien" means any lien, charge, covenant, condition, easement, adverse
claim, demand, encumbrance, limitation, security interest, option, pledge, or
any other title defect or restriction of any kind.
"Material Adverse Change" or "Material Adverse Effect" means, when used
in connection with the Company, any change or effect that either individually or
in the aggregate with all other such changes or effects, is, or is reasonably
likely to be, materially adverse to the business, financial condition, prospects
or results of operations of the Company and its Subsidiaries taken as a whole
and the terms "material" and "materially" shall have correlative meanings;
provided, however, that no Material Adverse Change or Material Adverse Effect
shall be deemed to have occurred as a result of any one or more of (i) a change
with respect to, or affecting the Company resulting from expenses (such as
legal, accounting and investment bankers' fees), that are known or reasonably
contemplated as of the date hereof by Buyer to be incurred by the Company in
connection with this Agreement or (ii) any financial change resulting from
actions specifically required by this Agreement.
"Multiemployer Plan" means any multiemployer plan within the meaning of
Section 3(37) of ERISA.
"Other Plan" means any employment, noncompetition, management, agency
or consulting arrangement, bonus, profit sharing, deferred compensation,
retirement, incentive, stock option, stock ownership or stock purchase plan, or
similar plan, policy or arrangement, whether or not in written form, which does
not constitute an Employee Benefit Plan and which is not disclosed in Section
3.10 of the Disclosure Schedule.
"Pension Plan" means any employee pension benefit plan within the
meaning of Section 3(2) of ERISA, other than a Multiemployer Plan.
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"Person" means an individual, corporation, limited liability company,
partnership, joint venture, association, trust, unincorporated organization or
other entity.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
A "Subsidiary" of any Person means another Person, an amount of the
voting securities, voting membership interests, voting partnership interests or
other voting interests of which is sufficient to elect at least a majority of
its Board of Directors or other governing body or, if there are no such voting
interests, fifty percent (50%) or more of the equity interests of which, are
owned directly or indirectly by such first Person.
"Welfare Plan" means any employee welfare benefit plan within the
meaning of Section 3(1) of ERISA, other than a Multiemployer Plan.
9.5 INTERPRETATION. When a reference is made in this Agreement to a
section or schedule, such reference shall be to a section of or schedule to this
Agreement unless otherwise indicated. The Table of Contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
9.6 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
this Agreement shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.
9.7 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This Agreement and
the other agreements referred to herein (including, without limitation, the
Confidentiality Agreement dated October 19, 1998) constitute the entire
agreement, and supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter of this
Agreement. This Agreement is not intended to confer any rights or remedies upon
any Persons other than the parties hereto.
9.8 GOVERNING LAW, JURISDICTION AND VENUE. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, APPLICABLE TO AGREEMENTS MADE AND ENTIRELY TO BE PERFORMED WITHIN SUCH
STATE AND SUCH FEDERAL LAWS AS MAY BE APPLICABLE. THE LAWS OF NEW YORK SHALL NOT
BE APPLICABLE IN ANY WAY TO THE TERMS OF THIS AGREEMENT.
9.9 ASSIGNMENT. Neither this Agreement nor any of the rights, interests
or obligations of the parties under this Agreement shall be assigned, in whole
or in part, by operation of Law or otherwise, by any of the parties without the
prior written consent of the other parties; provided, however, that Buyer or
MergerCo may, without the Company's prior written consent, assign its rights
under this Agreement to any of the Buyer's Subsidiaries or any financial
institution that requires such assignment in connection with such financial
55
<PAGE> 60
institution's agreement to provide financing to either Buyer or MergerCo.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of, and be enforceable by, the parties and their respective
successors and assigns.
9.10 ENFORCEMENT. Except as provided by Section 9.2 in connection with
a termination as set forth therein, the parties agree that irreparable damage
would occur if any provision of any covenant or agreement contained in this
Agreement were not performed in accordance with its specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to injunctive relief to prevent breaches of any covenant or agreement contained
in this Agreement and to enforce specifically the terms and provisions thereof.
Notwithstanding the foregoing, the parties cannot seek specific performance for
those covenants or agreements contained in Sections 2.2(b) or 6.12 the
satisfactory performance of which are solely within the control of a
third-party.
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IN WITNESS WHEREOF, Buyer, MergerCo and the Company have caused this
Agreement to be signed by their duly authorized, respective officers, all as of
the date first written above.
TRAVELCENTERS OF AMERICA, INC.
("Buyer")
By: /s/ Edwin P. Kuhn
--------------------------------------------
Name: Edwin P. Kuhn
Title: President and Chief Executive Officer
TP ACQUISITION, INC.
("MergerCo")
By: /s/ Edwin P. Kuhn
--------------------------------------------
Name: Edwin P. Kuhn
Title: President and Chief Executive Officer
TRAVEL PORTS OF AMERICA, INC.
(the "Company")
By: /s/ E. Philip Saunders
--------------------------------------------
Name: E. Philip Saunders
----------------------------------------
Title: Chairman and Chief Executive Officer
----------------------------------------
<PAGE> 62
TABLE OF DEFINITIONS
DEFINITION PAGE
1995 Warrant Agreement.........................................................5
1998/1999 Capital Budget......................................................18
affiliate.....................................................................20
Affiliate.....................................................................52
Agreement......................................................................1
Amended Sublease..............................................................39
Antitrust Laws................................................................34
Books and Records.............................................................52
business day..................................................................53
Buyer..........................................................................1
Buyer Expenses................................................................49
Cephas Warrant Agreement.......................................................5
Certificate of Merger..........................................................3
Certificates...................................................................6
Closing........................................................................2
Closing Date...................................................................2
Code..........................................................................53
Company........................................................................1
Company Common Shares..........................................................1
Company Expenses..............................................................50
Company Preferred Shares.......................................................8
Company Shareholder Approval...................................................1
Company Stock Option Plans.....................................................4
Company Stock Options..........................................................4
Company Warrant................................................................5
Company's Bonus Plan..........................................................37
Consulting Agreement..........................................................44
Contract......................................................................53
Convertible Debentures.........................................................5
Convertible Debt Securities....................................................5
Convertible Note...............................................................5
Date Data.....................................................................13
Deferred Termination Fee......................................................50
Defined Benefit Plan..........................................................53
Disclosure Schedule............................................................8
Effective Time of the Merger...................................................3
Employee Benefit Plan.........................................................53
<PAGE> 63
Environmental Claim...........................................................17
Environmental Laws............................................................17
Environmental Permits.........................................................17
ERISA.........................................................................53
ERISA Affiliate...............................................................14
Exchange Act..................................................................53
Exchange Agent.................................................................6
Exchange Fund..................................................................7
Excluded Shares................................................................4
Governmental Entity...........................................................53
Griffith Supply Agreement.....................................................40
Hazardous Materials...........................................................17
HSR Act.......................................................................53
Immediate Termination Fee.....................................................50
Indebtedness..................................................................53
Indemnified Party.............................................................40
Industry-wide Material Adverse Change.........................................49
Intellectual Property Rights..................................................20
Knowledge.....................................................................54
Leasehold Premises............................................................23
Leases........................................................................23
Liabilities...................................................................54
Lien..........................................................................54
material......................................................................54
Material Adverse Change.......................................................54
Material Adverse Effect.......................................................54
Material Contracts............................................................18
Material Intellectual Property Rights.........................................20
Material Permits..............................................................21
materially....................................................................54
Maybrook......................................................................39
Merger.........................................................................1
Merger Consideration...........................................................2
MergerCo.......................................................................1
MergerCo Disclosure Schedule..................................................27
Millennium Compliant..........................................................13
Multiemployer Plan............................................................54
Nasdaq........................................................................34
Non-Conforming Transaction Proposal...........................................50
Notice of Transaction Proposal................................................36
NYBCL..........................................................................2
Option Cancellation Agreement..................................................5
Other Plan....................................................................54
Owned Properties..............................................................23
<PAGE> 64
Pension Plan..................................................................54
Perk..........................................................................26
Perk Related Parties..........................................................26
Permits.......................................................................17
Permitted Encumbrances........................................................23
Person........................................................................55
Proxy Statement...............................................................11
Saunders Consulting Agreement Termination.....................................40
SEC...........................................................................55
SEC Documents.................................................................11
SEC Financial Statements......................................................11
Securities Act................................................................55
Severance Plan................................................................38
Share Exchange.................................................................1
Share Exchange Agreement.......................................................1
Shareholders Meeting..........................................................33
Subsidiary....................................................................55
Superior Transaction Proposal.................................................36
Surviving Corporation..........................................................2
Tax Return....................................................................16
Taxes.........................................................................15
Transaction Proposal..........................................................35
Travel Ports 401(k) Plan......................................................37
Treasury Shares................................................................3
Voting Agreement...............................................................1
WARN Act......................................................................32
Warrant Agreements.............................................................5
Warrant Cancellation Agreement.................................................5
Welfare Plan..................................................................55
Wyoming Lease.................................................................41
<PAGE> 1
Exhibit D
EXECUTION COPY
--------------
SHARE EXCHANGE AGREEMENT
------------------------
THIS SHARE EXCHANGE AGREEMENT (this "Agreement") is entered
into as of the 26th day of February, 1999, by and among TRAVELCENTERS OF
AMERICA, INC., a Delaware corporation, as purchaser ("Buyer"), and E. Philip
Saunders, as seller ("Seller").
RECITALS:
---------
A. Seller owns, in the aggregate, 1,844,275 shares of common stock of
Travel Ports of America, Inc., a New York corporation (the "Company").
B. In connection with the transaction contemplated by this Agreement,
Buyer has agreed to acquire all of the issued and outstanding shares of common
stock of the Company pursuant to a merger agreement dated the date hereof, as
the same may be amended (the "Merger Agreement"), among Buyer, TP Acquisition,
Inc. ("MergerCo") and the Company providing for the merger of MergerCo with and
into the Company (the "Merger").
C. Concurrently herewith, Seller, John M. Holahan ("Holahan"), Buyer
and MergerCo are entering into a Voting Agreement (the "Voting Agreement")
pursuant to which Seller and Holahan are obligated to vote any and all shares of
the Company owned by each for the approval and adoption of the Merger Agreement.
D. Prior to the execution thereof, the Board of Directors of the
Company has approved and authorized the Company's execution, delivery and
performance of the Merger Agreement, as well as the transactions contemplated by
this Agreement, and the Voting Agreement.
E. Prior to the effective time of the Merger, Buyer desires to purchase
from Seller, and Seller desires to sell to Buyer, 653,025 shares of Company
common stock (the "Shares"), upon and subject to the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of and in reliance upon the mutual
representations, warranties, covenants and agreements set forth in this
Agreement, Buyer and Seller hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. Certain terms used in this Agreement shall have the
meanings set forth herein or elsewhere as indicated in Article 8.
<PAGE> 2
ARTICLE 2
PURCHASE AND SALE
2.1 CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at 9:00 a.m., E.S.T., on the date of
the closing of the Merger, as contemplated in the Merger Agreement (the "Closing
Date") at the offices of Calfee, Halter & Griswold LLP, 800 Superior Avenue,
1400 McDonald Investment Center, Cleveland, Ohio.
2.2 PURCHASE AND SALE. Subject to the terms and conditions of this
Agreement, at the Closing, Seller shall sell, transfer and deliver to Buyer free
and clear of all Liens, and Buyer shall purchase from Seller, all of Seller's
right, title and interest in the Shares.
2.3 CONSIDERATION. On the Closing Date, Buyer shall purchase the Shares
from Seller in exchange for 85,000 shares of fully paid and non-assessable
shares of common stock, par value $.01 per share, of Buyer (the "Buyer Common
Stock") which shall be issued pursuant to an exemption from the registration
requirements under Section 4(2) of the Securities Act.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer that the following statements
contained in this Article 3 are true and correct at and as of the date of this
Agreement with respect to Seller. Each representation and warranty contained in
this Article 3 shall be deemed to be independently material and relied upon by
Buyer.
3.1 AUTHORITY AND CAPACITY. Seller possesses all requisite legal right,
power, authority and capacity to execute, deliver and perform this Agreement,
including, without limitation, the authority and capacity to sell and transfer
the Shares to Buyer as provided by this Agreement.
3.2 OWNERSHIP OF SECURITIES. Seller owns all of the Shares free and
clear of all Liens. The Shares are not subject to any marital property or other
agreement, judgment, order, voting trust or proxy which either limits or
restricts Seller's absolute authority to transfer the Shares as herein provided
or requires the holder thereof to vote the Shares in any particular manner,
except for the Voting Agreement.
3.3 EXECUTION AND DELIVERY; ENFORCEABILITY. This Agreement and each
other document, instrument or agreement to be executed and delivered by Seller
in connection herewith has been duly executed and delivered by Seller and
constitutes the legal, valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms.
3.4 NONCONTRAVENTION. Seller's execution, delivery and performance of
this Agreement and any other document, instrument or agreement to be executed
and delivered by Seller in connection herewith, (i) does not require Seller to
submit any notice, report or other
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<PAGE> 3
filing with any Governmental Authority, (ii) violate or breach any Law
applicable to Seller, any Order to which Seller is subject or any Contract to
which Seller is a party, or (iii) require the consent, approval or authorization
of any Governmental Authority or any other Person.
3.5 BROKERAGE. No Person is or will become entitled, by reason of any
agreement or arrangement entered into or made by or on behalf of Seller, to
receive any commission, brokerage, finder's fee or other similar compensation in
connection with the consummation of the transactions contemplated by this
Agreement.
3.6 INVESTMENT INTENT.
(a) Seller is an "accredited investor" as that term is defined
in Section 501 under the Securities Act. Seller has sufficient knowledge and
experience in financial and business matters to enable him to evaluate the
merits and risks of the transactions contemplated by this Agreement. However,
nothing in this Section 3.6 shall have any bearing on or mitigate, dilute or
compromise in any manner any of the representations, warranties, indemnities,
agreements or covenants contained elsewhere in this Agreement or any of the
agreements contemplated hereby.
(b) Seller has been given access to information requested by
Seller regarding Buyer, including the opportunity to ask questions of and
receive answers from the officers of Buyer concerning the present and proposed
activities of Buyer and to obtain the information which Seller deems necessary
or advisable in order to evaluate the merits and risks of the transactions
contemplated by this Agreement, and Seller has made his own independent
investigation of Buyer and the merits and risks of the transactions contemplated
by this Agreement.
(c) Seller is acquiring the Buyer Common Stock for his own
account, for investment purposes, and not with a present view to resell or
distribute all or any portion of the Buyer Common Stock.
(d) Seller understands that the Buyer Common Stock has not
been registered under the Securities Act as of the Closing or under any state
securities laws, is being offered and sold in reliance upon federal and state
exemptions for transactions not involving any public offering, and such
certificates will bear a legend in substantially the following form, as well as
any other legend that may be required by applicable law:
THIS CERTIFICATE AND THE SECURITIES REPRESENTED BY
THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT TO A CLAIM
OF EXEMPTION FROM THE REGISTRATION OR QUALIFICATION
PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS AND
MAY NOT BE SOLD OR TRANSFERRED WITHOUT COMPLIANCE
WITH THE REGISTRATION OR QUALIFICATIONS PROVISIONS OF
APPLICABLE
3
<PAGE> 4
FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE
EXEMPTIONS THEREFROM.
(e) Seller acknowledges that the Buyer Common Stock will be
subject to further additional restrictions as contained in that certain
Stockholders' Agreement, dated March 6, 1997, as the same is or may be further
amended, among Buyer and its stockholders (the "Stockholders' Agreement").
Seller understands that any certificate(s) evidencing the Buyer Common Stock
will bear additional restrictive legends as provided for in the Stockholders'
Agreement.
(f) Seller further represents that:
(i) Seller or his purchaser representative
is a sophisticated investor with knowledge
and experience in business and financial
matters;
(ii) Seller has been provided with the
information specified in Rule 502(b)(2)(ii)
under the Securities Act and has had the
opportunity to obtain additional information
as desired in order to evaluate the merits
and risks inherent in holding the Buyer
Common Stock;
(iii) Seller has not been offered the Buyer Common
Stock by any form of general advertising or
general solicitation;
(iv) Seller is aware that his investment in the
Buyer Common Stock is a speculative one and
involves a high degree of risk, that the
amount realized on the investment may not
equal the original amount invested and
Seller has concluded that the proposed
investment in Buyer is appropriate in light
of his overall investment objectives and
financial situation; and
(v) Seller is able to bear the economic risk and
lack of liquidity inherent in holding the
Buyer Common Stock.
3.7 RESTRICTED SECURITIES. Seller understands and acknowledges that the
Buyer Common Stock he is receiving are "restricted securities" under federal and
state securities laws insofar as the Buyer Common Stock has not been registered
under the Securities Act or the securities laws of any other jurisdiction, that
they may not be resold or transferred without compliance with the registration
or qualification provisions of the Securities Act or applicable federal and
state securities laws of any state or other jurisdiction. Seller is familiar
with SEC Rule 144 as presently in effect and the resale limitations imposed
thereby and under the Securities Act.
4
<PAGE> 5
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller that the following statements
contained in this Article 4 are true and correct at and as of the date of this
Agreement. Each representation and warranty contained in this Article shall be
deemed to be independently material and relied upon by Seller.
4.1 ORGANIZATION; AUTHORIZATION. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Buyer has all requisite corporate power and authority to execute, deliver and
perform this Agreement and each other agreement, instrument and document to be
executed and delivered by or on behalf of Buyer in connection herewith. All
requisite corporate action to authorize, execute, deliver and perform this
Agreement and each other agreement, instrument and document to be executed and
delivered by or on behalf of Buyer in connection herewith has been taken by
Buyer.
4.2 EXECUTION AND DELIVERY; ENFORCEABILITY. This Agreement and each
other document, instrument or agreement to be executed and delivered by Buyer in
connection herewith has been duly executed and delivered by Buyer and
constitutes the legal, valid and binding obligation of Buyer enforceable against
Buyer in accordance with its terms.
4.3 NONCONTRAVENTION. Buyer's execution, delivery and performance of
this Agreement and any other document, instrument or agreement to be executed
and delivered by Buyer in connection herewith, (i) does not require Buyer to
submit any notice, report or other filing with any Governmental Authority (other
than as may be required under Regulation 13-D of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or other state or federal securities
laws), (ii) violate or breach any Law applicable to Buyer, any Order to which
Buyer is subject or any Contract to which Buyer is a party, or (iii) require the
consent, approval or authorization of any Governmental Authority or any other
Person.
4.4 BROKERAGE. No Person is or will become entitled, by reason of any
agreement or arrangement entered into or made by or on behalf of Buyer, to
receive any commission, brokerage, finder's fee or other similar compensation in
connection with the consummation of the transactions contemplated by this
Agreement.
4.5 INVESTMENT INTENT. Buyer is acquiring the Shares for its own
account, for investment purposes, and not with a present view to resell or
distribute any portion thereof.
4.6 SEC DOCUMENTS. Buyer has timely filed all required reports,
schedules, forms, statements and other documents with the SEC since January 1,
1997 (collectively, and in each case including all exhibits and schedules
thereto and documents incorporated by reference therein, as amended, the "SEC
Documents"). As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the SEC promulgated thereunder applicable to such SEC Documents,
and none of the SEC Documents (including any and all financial statements
5
<PAGE> 6
included therein) as of such dates contained any untrue statement of a material
fact or omitted to state a 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 misleading. The consolidated financial
statements (including footnotes) of Buyer included in the SEC Documents comply
as to form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles (except, in
the case of unaudited consolidated quarterly statements, as permitted by Form
10-Q of the SEC) applied on a consistent basis during the periods involved
(except as may be specifically indicated in the notes thereto), and fairly
present the consolidated financial position of Buyer and its consolidated
subsidiaries as of the dates thereof and the consolidated income, shareholders'
equity and cash flows for the periods then ended.
4.7 NONCONTRAVENTION. As of the date hereof, except as set forth on
Schedule A, any exercise by Seller of the Put Right (as described in Section
6.2(a)) shall not cause a breach or default under any agreement to which Buyer
or any of its subsidiaries is a party. As of the date hereof, the exercise by
Seller of the Put Right would not, to the knowledge of Buyer, violate any Law
and, in particular, Buyer has sufficient "surplus" (as that term is defined in
the Delaware General Corporation Law) to permit Buyer to purchase the Put Shares
(as defined in Section 6.2(a)), if such Put Right were to be exercised on the
date hereof.
ARTICLE 5
CONDITIONS TO CLOSING
5.1 CONDITIONS TO BUYER'S OBLIGATION TO CLOSE. The obligation of Buyer
to consummate the transactions contemplated by this Agreement is subject to the
satisfaction, at or before the Closing, of the following conditions set forth in
this Section 5.1:
(i) Seller's execution and delivery of a counterpart
signature page to the Stockholders' Agreement
pursuant to which Seller agrees to be bound by such
terms and conditions as contained therein;
(ii) no suit, action, investigation or proceeding shall be
pending or threatened before any court, agency or
other Governmental Authority by which it is sought to
restrain, delay, prohibit, invalidate, set aside or
impose any conditions upon the Closing, in whole or
in part;
(iii) each of Seller's representations and warranties in
Article 3 (a) must have been accurate in all respects
as of the date of this Agreement, and (b) must be
accurate in all respects as of the Closing Date as if
made on the Closing Date;
(iv) all of the obligations, covenants and conditions that
Seller is required to perform or to comply with
pursuant to this Agreement at or prior to the
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<PAGE> 7
Closing and each of these obligations, covenants and
conditions must have been duly performed and complied
with by Seller in all respects;
(v) Buyer shall have received from Seller (a) a stock
certificate evidencing or representing the Shares
issued in the name of Buyer, and (b) evidence of the
cancellation of the stock certificate(s) previously
issued in the name of Seller evidencing the Shares;
(vi) Seller's execution and delivery, at the Closing, of a
certificate in form and substance reasonably
acceptable to Buyer certifying as to (a) the
continued accuracy as of the Closing Date of the
representations and warranties contained in Article 3
hereof, (b) Seller's performance and compliance with
all obligations, covenants and conditions required by
this Agreement to have been performed or complied
with by Seller prior to or on the Closing Date, (c)
Seller's record and beneficial ownership of the
Shares and good and marketable title thereto and
Seller's absolute right to transfer the same, and
upon transfer, certifying that the Shares are not
subject to any Liens, and (d) Seller's full power and
capacity to perform the terms of this Agreement;
(vii) each of the conditions set forth in Sections 7.1, 7.2
and 7.3 of the Merger Agreement shall have been
satisfied or waived by the party entitled to waive
the same; and
(viii) Buyer shall have received each other document
required to be delivered to Buyer pursuant to this
Agreement.
Any agreement or document to be delivered to Buyer pursuant to this Section 5.1,
the form of which is not attached to this Agreement as an exhibit, shall be in
form and substance reasonably satisfactory to Buyer and its counsel.
5.2 CONDITIONS TO SELLER'S OBLIGATION TO CLOSE. The obligations of
Seller to consummate the transactions contemplated by this Agreement are subject
to the satisfaction, at or before the Closing, of the following conditions set
forth in this Section 5.2:
(i) no suit, action, investigation or proceeding shall be
pending or threatened before any court, agency or other
governmental authority by which it is sought to
restrain, delay, prohibit, invalidate, set aside or
impose any conditions upon the Closing, in whole or in
part;
(ii) each of Buyer's representations and warranties in
Article 4 (a) must have been accurate in all respects
as of the date of this Agreement, and (b) must be
accurate in all respects as of the Closing Date as if
made on the Closing Date;
(iii) all of the obligations, covenants and conditions that
Buyer is required to perform or to comply with pursuant
to this Agreement at or prior to the
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<PAGE> 8
Closing and each of these obligations, covenants and
conditions must have been duly performed and complied
with by Buyer in all respects;
(iv) Seller shall have received a stock certificate issued
in the name of Seller evidencing or representing the
Buyer Common Stock;
(v) Buyer's execution and delivery, at the Closing, of a
certificate in form and substance reasonably acceptable
to Seller certifying as to (a) the continued accuracy
as of the Closing Date of the representations and
warranties contained in Article 4 hereof, (b) Buyer'
performance and compliance with all obligations,
covenants and conditions required by this Agreement to
have been performed or complied with by Buyer prior to
or on the Closing Date, (c) the accuracy and efficacy
of the Board of Director resolutions of Buyer
respecting the issuance of the Buyer Common Stock, and
(d) Buyer's full power and authorization to execute and
deliver this Agreement;
(vi) each of the conditions set forth in Sections 7.1, 7.2
and 7.3 shall have been satisfied or waived by the
party entitled to waive the same; and
(vii) Seller shall have received each other document
required to be delivered to Seller pursuant to this
Agreement.
Any agreement or document to be delivered to Seller pursuant to this Section
5.2, the form of which is not attached to this Agreement as an exhibit, shall be
in form and substance reasonably satisfactory to Seller and his counsel.
5.3 CONDITION SUBSEQUENT TO CLOSING . Immediately following the Closing,
Buyer and the Company shall file all necessary documents and take such other
actions under and in accordance with the Merger Agreement to cause the Merger to
be consummated as provided for therein. In the event the Merger is not
consummated for any reason within two days following the Closing hereunder, all
of the transactions contemplated herein shall be deemed not to have occurred and
the parties shall thereupon promptly return to the other all deliveries made
pursuant hereto.
ARTICLE 6
ADDITIONAL COVENANTS AND AGREEMENTS
6.1 Board Appointment.
------------------
(a) Promptly following the closing of the Merger, and subject
to the approval of Buyer's stockholders, Buyer shall use all reasonable efforts
to cause Seller to be appointed to the Board of Directors (the "Board") of Buyer
at the next regularly scheduled shareholder meeting to serve until the death,
resignation or removal of Seller (including as provided in Section 6.1(b)
below).
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<PAGE> 9
(b) Seller's right to maintain a position on the Board shall
terminate on the earliest to occur of (i) three years from the Closing, (ii)
Seller's failure to own at least 50,000 shares of Buyer common stock; PROVIDED,
HOWEVER, that the 50,000 share requirement shall be equitably adjusted up or
down, as applicable, in the event of any stock dividend or change in the common
stock of Buyer by reason of any stock split, reverse stock split,
recapitalization, reclassification, combination, exchange of shares or similar
organic change (collectively, an "Organic Change"), (iii) a registration
statement filed for an initial public offering of the common stock of Buyer is
declared effective under the Securities Act (an "IPO"), or (iv) a Change in
Control (each, a "Resignation Event"). Upon the occurrence of a Resignation
Event, Seller shall immediately tender his written resignation as a member of
the Board, which resignation may be accepted or rejected by Buyer, for a thirty
(30) day period after Buyer's receipt. In the event Buyer rejects Seller's
resignation, Seller shall remain a member of the Board and subsequently tender
his written resignation on each anniversary thereafter, which Buyer may elect to
accept or reject for a thirty (30) day period after Buyer's receipt.
(c) Seller acknowledges and agrees that his right to obtain
and maintain a position on the Board is a personal right and is in no way
assignable or transferable in any manner.
6.2 PUT RIGHT.
(a) Subject to the terms of this Section 6.2, Seller shall
have the right to sell to Buyer and Buyer shall be obligated to purchase from
Seller, all but not less than all, of the shares of Buyer Common Stock received
by Seller pursuant to this Agreement (including any additional shares of Buyer
Common Stock received by Seller with respect to such shares of Buyer Common
Stock as a result of any Organic Change) that Seller then owns at the time he
elects to exercise the Put Right (the "Put Shares") which are then eligible to
be "put" under Section 6.2(b) at the put exercise price of $33.04 (the "Exercise
Price") per share (the "Put Right"); PROVIDED, HOWEVER, that the Exercise Price
shall be equitably adjusted up or down, as applicable, in the event of any
Organic Change.
(b) Subject to the following sentence of this paragraph, the
Put Right becomes exercisable in equal one-third (1/3) increments annually
beginning on the first anniversary of the Closing Date (so that two-thirds (2/3)
of the Put Shares can be "put" commencing after the second anniversary of the
Closing Date and one hundred percent (100%) commencing after the third
anniversary of the Closing Date) and terminates upon the fourth anniversary of
the Closing Date. Notwithstanding the foregoing, the Put Right shall become
exercisable in full upon consummation of a transaction pursuant to which there
is a Change in Control of Buyer in which Seller was not offered the opportunity
to sell all of the Put Shares in such transaction. The Put Right is exercisable
by giving an irrevocable written notice (the "Put Notice") of exercise to Buyer,
subject to the applicable vesting period, prior to the termination of the Put
Right. The total consideration to be paid Seller upon exercise of the Put Right
shall be calculated by multiplying (x) the Exercise Price by (y) the number of
shares representing the Put Shares subject to the Put Notice (the "Total Put
Price"). If the Put Notice is given during the applicable exercise period as
provided above and Buyer is precluded by Law or
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<PAGE> 10
Contract from purchasing some or all of the Buyer Common Stock referenced in
Seller's Put Notice then (i) Buyer shall purchase those shares of Buyer Common
Stock that Buyer is not so precluded from purchasing, pursuant to a closing
under Section 6.2(e) below, and shall purchase the remainder of the Buyer Common
Stock referenced in the Put Notice (the "Unpaid Put Shares") as soon as
practicable after such time as Buyer is no longer precluded by Law or Contract
from completing such purchase (at which point a closing shall occur for the
consummation of the purchase according to the terms of Section 6.2(e)) and
PROVIDED, FURTHER, that Buyer shall remain obligated to buy and Seller obligated
to sell the remainder of the Buyer Common Stock referenced in the Put Notice as,
and to the extent, availability arises thereafter; and (ii) until such time as
the Unpaid Put Shares are so purchased, Buyer shall pay a monthly penalty fee on
the portion of the Total Put Price related to any such Unpaid Put Shares at a
rate of eight-and-one-half percent (8.5%) per annum until so paid, which penalty
fee shall be payable monthly. Any payment made with respect to the Unpaid Put
Shares shall be applied first against any such accrued but unpaid penalty fee.
(c) Under no circumstances shall Buyer be obligated to
purchase the Buyer Common Stock pursuant to the Put Right if such purchase would
violate any Law, including, but not limited to, provisions of the General
Corporation Law of Delaware (or any successor statutory provision) or would
constitute or require the breach of any provisions of the Contracts listed on
Schedule A (or any additional Contracts entered into by Buyer that either: (a)
contain restrictions or limitations on Seller's ability to exercise the Put
Right that are not more restrictive than those set forth on Schedule A or (b)
have been the subject of a Seller Waiver under Section 6.7). Notwithstanding the
foregoing, if Buyer is precluded by Contract (other than pursuant to the
Indenture, dated as of March 27, 1997, listed on Schedule A or pursuant to a
Contract that has been the subject of a Seller Waiver under Section 6.7) from
purchasing some or all of the Buyer Common Stock referenced in Seller's Put
Notice, Buyer shall use commercially reasonable efforts to seek a waiver of such
restrictions from the appropriate third parties to permit the Put Right to be
exercised in full. If Seller exercises the Put Right and Buyer is precluded by
Law, as described above, then Seller and Buyer shall use their respective
reasonable efforts to accomplish such purchase and sale as contemplated by this
Section 6.2, in a manner not in violation of any Law, including, where
appropriate, the parties' attempt to modify the terms of the Put Right in such a
manner as to comply with the requirements of applicable Law.
(d) During the period commencing ninety (90) days from the
date of Buyer's receipt of the Put Notice (the "Review Period"), Seller's
exercise of the Put Right shall constitute and remain a valid and binding offer
to sell all shares of Buyer Common Stock then owned by Seller on the terms
hereof and shall not be subject to revocation, unless Buyer shall have consented
thereto in writing. Buyer shall have the term of the Review Period (and during
such time will be complying with the requirements of Section 6.2(c) above) to
notify Seller whether it is precluded by Law or Contract from acquiring such
shares or to notify Seller of its binding acceptance of such offer to purchase
the Buyer Common Stock.
(e) If Buyer is not precluded by Law or Contract from
purchasing the Buyer Common Stock, then, within thirty (30) days after the
Review Period, a closing shall occur for
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<PAGE> 11
the consummation of such purchase, at a location determined by Buyer, where
Seller and Buyer shall be required to make the following deliveries:
(i) BY SELLER:
(1) stock certificate(s) evidencing the
Buyer Common Stock to be sold and
purchased duly endorsed in blank
with signatures guaranteed and
otherwise in proper form for
transfer.
(2) a certificate of Seller representing
and warranting that (A) Seller is
the record and beneficial owner of
the shares being sold subject to the
Put Right, (B) Seller has good and
marketable title to the shares
subject to the Put Right and the
absolute right to transfer the same,
and upon transfer, such shares will
be free and clear of Liens, (C)
Seller has full power and capacity
to perform the terms of this
Agreement relating to the exercise
of the Put Right and (D) Seller has
had an opportunity to obtain
information respecting Buyer and has
the information necessary to enable
him to make a knowledgeable decision
with respect to the exercise of the
Put Right.
(3) if the Put Right is being exercised
by a permitted transferee pursuant
to Section 6.2(g), in addition to
the deliveries provided for in
Section 6.2(e)(1) and 6.2(e)(2),
such transferee shall deliver a
certificate in form and substance
reasonably acceptable to Buyer
representing and warranting that (A)
such transferee or his or her
purchaser representative is a
sophisticated investor with
knowledge and experience in business
and financial matters and (B) such
transferee or his or her purchaser
representative has received and
reviewed all filings made by Buyer
with the SEC pursuant to the
requirements of the Exchange Act.
(ii) BY BUYER:
(1) the purchase price for the shares
being purchased subject to the Put
Right in an amount determined by
Section 6.2(b) above by certified
check or wire transfer of
immediately available funds to
Seller's designated account.
(f) Prior to any closing pursuant to Section 6.2(e), Buyer
shall have the right to postpone such closing for a reasonable period not to
exceed sixty (60) days if (i) Buyer is in possession of material non-public
information, (ii) Buyer determines that such
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<PAGE> 12
postponement is necessary in order to avoid a requirement to disclose such
material non-public information and (iii) Buyer determines in good faith that
disclosure of such material non-public information would not be in the best
interests of Buyer or its stockholders.
(g) Seller acknowledges and agrees that the Put Right is in no
way assignable or transferable, except that Seller shall have the right, subject
to the next sentence and applicable law (including federal and state securities
laws), to transfer the Put Right, directly or indirectly, (i) to his parent,
spouse, ex-spouse or child (or any trust for the benefit of any such parent,
spouse, ex-spouse or child), (ii) pursuant to Seller's will (following his
death) or (iii) pursuant to the laws of descent and distribution; PROVIDED,
HOWEVER, in any such case, that Seller shall not transfer or assign the Put
Right to more than five (5) persons and, PROVIDED, FURTHER, that any transfer or
devise of the Put Right shall only be transferred and devised with respect to
and in connection with the underlying shares that are the subject of the Put
Right. As a condition to any transfer or assignment by Seller pursuant to this
paragraph, each transferee or assignee, prior to such transfer or assignment,
shall agree in writing in a form reasonably acceptable to Buyer to be bound by
all the provisions of this Agreement and the Stockholders' Agreement applicable
to Seller and no such transferee or assignee shall be permitted to make any
further transfer or assignment of the Put Right. Notwithstanding the foregoing,
Buyer shall be permitted (but not obligated), without the consent of Seller, to
assign its rights, duties and obligations respecting the Put Right to any
Person, provided Buyer shall remain obligated for payment of the purchase price
related to Seller's exercise of the Put Right.
6.3 MAYBROOK TRAVEL PLAZA SUBLEASE. At the Closing, Seller shall cause
his affiliate, Maybrook Travel Plaza, Inc. ("MTP") to execute an amendment to
that certain Sublease dated March 30, 1984 between MTP and the Company which
amendment shall provide for, among other things, (i) two additional 10 year
renewal options and (ii) an increase in the price of the Company's option to
purchase the subject property, all as provided for in Section 6.17 of the Merger
Agreement.
6.4 CONSULTING AGREEMENT. Prior to or at the Closing, Seller shall
terminate all of his rights, duties and obligations under that certain
Consulting Agreement currently in effect between Seller and the Company.
6.5 AMENDMENT OF CERTIFICATE OF INCORPORATION. Buyer agrees to amend
Buyer's Restated Certificate of Incorporation prior to Closing to clarify that
no further stockholder consent is required in order for the Company to perform
its obligations with respect to the exercise of the Put Right.
6.6 LIMITATION ON FUTURE RESTRICTIONS. Subject to this Section 6.6 and
Section 6.7, Buyer agrees, during the period that the Put Right is outstanding,
not to enter into any Contract that contains any restriction or limitation on
Seller's ability to exercise the Put Right that is more restrictive than those
set forth on Schedule A, without complying with Section 6.7; PROVIDED, HOWEVER,
that this Section 6.6 shall not prohibit Buyer from granting any Allowable Put
Rights (as hereinafter defined). "Allowable Put Rights" for purposes of this
Agreement shall mean any "put" rights or repurchase or redemption obligations
granted in the future that
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(a) are subordinated by Contract in right of payment to the Put Right(s) granted
under this Agreement, or (b) do not become exercisable until after the Put
Right(s) granted under this Agreement have expired or been exercised in full, or
(c) are granted to Directors, officers or employees in connection with future
acquisitions of equity securities of the Company in a manner consistent with
past practices.
6.7 CALL RIGHT.
(a) Subject to the terms of this Section 6.7, if Buyer, at any
time during the period that all or part of the Put Right remains outstanding
(whether or not exercisable), in the exercise of its reasonable business
judgment, determines to enter into a new transaction that it expects will
contain any restriction or limitation on Seller's ability to exercise the Put
Right that is more restrictive than those set forth on Schedule A (a
"Restrictive Transaction"), then Buyer shall first provide Seller with notice of
the principal terms of such Restrictive Transaction and give Seller ten (10)
days thereafter to determine whether to waive the provisions of Section 6.6
hereof (which written waiver also shall be delivered within such ten (10) day
period) (a "Seller Waiver"). In the event that a Seller Waiver is not executed
and delivered during such ten (10) day period, then Buyer shall have the right
to purchase (the "Call Right") and Seller (or, for all purposes hereof, any
transferee or assignee pursuant to Section 6.2(g)) shall be obligated to sell
all, but not less than all, of the Put Shares owned by such person at the call
exercise price of $36.34 (the "Call Exercise Price") per share; PROVIDED,
HOWEVER, that the Call Exercise Price shall be equitably adjusted up or down, as
applicable, in the event of any Organic Change.
(b) The Call Right is exercisable at any time during the
period that all or part of the Put Right remains outstanding, by Buyer giving an
irrevocable written notice (the "Call Notice") of exercise to Seller prior to
consummating the Restrictive Transaction. The total consideration to be paid
Seller upon exercise of the Call Right shall be calculated by multiplying (x)
the Call Exercise Price by (y) the number of shares representing the Put Shares
subject to the Call Notice (the "Total Call Price"). If at such time as the Call
Notice is given, Buyer is precluded by Law or Contract from purchasing some or
all of the Put Shares referenced in the Call Notice, then (i) Buyer shall
purchase those Put Shares that Buyer is not so precluded from purchasing,
pursuant to a closing under Section 6.7(c), and shall purchase the remainder of
the Put Shares referenced in the Call Notice (the "Unpaid Call Shares") as soon
as practicable after such time as Buyer is no longer precluded by Law or
Contract from completing such purchase (at which point a closing shall occur for
the consummation of the purchase according to the terms of Section 6.7(c)) and
PROVIDED, FURTHER, that Seller shall remain obligated to sell and Buyer shall
remain obligated to buy the remaining Put Shares referenced in the Call Notice
as, and to the extent, availability arises thereafter; and (ii) until such time
as the Unpaid Call Shares are so purchased, Buyer shall pay a monthly penalty
fee on the portion of the Total Call Price related to any such Unpaid Call
Shares at a rate of eight-and-one-half percent (8.5%) per annum, which penalty
fee shall be payable monthly. Any payment made with respect to the Unpaid Call
Shares shall be applied first against any such accrued but unpaid penalty fees.
Notwithstanding the foregoing, if Buyer is precluded by Contract (other than
pursuant to the Indenture, dated as of March 27, 1997, listed on Schedule
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A or pursuant to a Contract that has been the subject of a Seller Waiver under
this Section 6.7) from purchasing some or all of the Put Shares referenced in
Buyer's Call Notice, Buyer shall use commercially reasonable efforts to seek a
waiver of such restrictions from the appropriate third parties to permit the
Call Right to be exercised in full.
(c) Within thirty (30) days after delivery of the Call Notice,
a closing shall occur for the consummation of such purchase, at a location
determined by Buyer, where Seller and Buyer shall be required to make the
following deliveries:
(i) BY SELLER:
(1) stock certificate(s) evidencing the
Buyer Common Stock to be sold and
purchased duly endorsed in blank
with signatures guaranteed and
otherwise in proper form for
transfer.
(2) a certificate of Seller representing
and warranting that (A) Seller is
the record and beneficial owner of
the shares being purchased subject
to the Call Right, (B) Seller has
good and marketable title to the
shares subject to the Call Right and
the absolute right to transfer the
same, and upon transfer, such shares
will be free and clear of Liens; and
(C) Seller has full power and
capacity to perform the terms of
this Agreement relating to the sale
of the Shares.
(ii) BY BUYER:
(1) the purchase price for the shares
being purchased subject to the Call
Right in an amount determined by
Section 6.2(b) above by certified
check or wire transfer of
immediately available funds to
Seller's designated account.
ARTICLE 7
INDEMNIFICATION
7.1 INDEMNIFICATION OF BUYER. Seller shall indemnify Buyer against and
hold Buyer harmless from any liability, loss, claim, deficiency, damage, cost
and expense, including attorneys' fees and other costs and expenses incident to
proceedings or investigations or the defense or settlement of any of the
foregoing (collectively, "Losses"), resulting from or arising out of any
inaccuracy in or breach of any of the representations and warranties made by
Seller in Article 3.
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7.2 INDEMNIFICATION OF SELLER. Buyer shall indemnify Seller against and
hold Seller harmless from any Losses resulting from or arising out of any
inaccuracy in or breach of any of the representations and warranties made by
Buyer in Article 4.
7.3 THIRD-PARTY CLAIMS. If any legal proceeding is instituted or any
claim asserted by any third party (a "Claim") in respect of which Seller, on the
one hand, or Buyer, on the other hand, may be entitled to indemnification
hereunder, the party asserting such right to indemnification (the "Indemnitee")
shall give the party from whom indemnification is sought (the "Indemnitor")
prompt written notice thereof. A delay in giving such notice shall not relieve
the Indemnitor of liability for the Claim except only to the extent the
Indemnitor suffers prejudice because of such delay. The Indemnitor shall have
the right, at its option and expense, to participate in the defense of such a
Claim, but not to control the defense, negotiation or settlement thereof.
ARTICLE 8
CERTAIN DEFINITIONS
When used in this Agreement, the following terms in all of their
tenses, cases and correlative forms shall have the meanings assigned to them in
this Article 8, or elsewhere in this Agreement as indicated in this Article 8:
"AFFILIATE" shall mean, when used with respect to a specified Person,
another Person that directly, or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with the Person
specified.
"CHANGE IN CONTROL" shall be deemed to have occurred if:
(a) any Person or group (within the meaning of Rule 13d-5 of the
Securities and Exchange Commission as in effect on March 21, 1997),
other than (i) the Institutional Investors (including the First Boston
Entities (as defined below)) or (ii) the Management Purchasers and
their Permitted Transferees (as defined in and set forth in Section
2(b) of the Stockholders' Agreement), shall directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise, have the ability to elect a majority of the board of
directors of Seller;
(b) (i) the Institutional Investors (including the First Boston
Entities) or (ii) the First Boston Entities, respectively, shall cease
to own in the aggregate, directly or indirectly, beneficially and of
record, shares representing at least 65% of the aggregate ordinary
voting power represented by the issued and outstanding capital stock of
Buyer held by such Persons on March 21, 1997, PROVIDED that such 65%
shall be reduced by the dilution suffered by such Persons as a result
of any issuance by Seller after March 27, 1997 of any capital stock
representing ordinary voting power (A) for fair value for cash to
non-Affiliates of the applicable parties under clause (i) or (ii)
above, as the case may be, or (B) to its employees to the extent that
the shares issued to such employees do not exceed 15% of the
then-outstanding capital stock having ordinary voting power;
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(c) any Person or group (within the meaning of Rule 13d-5 of the
Securities and Exchange Commission as in effect on March 21, 1997),
other than the Institutional Investors (including the First Boston
Entities), shall own directly or indirectly, beneficially or of record,
shares representing more than the lesser at any time of (i) 35% of the
aggregate ordinary voting power represented by the issued and
outstanding capital stock of Seller and (ii) the percentage of the
aggregate ordinary voting power represented by the shares owned
directly or indirectly, beneficially or of record, by the Institutional
Investors (including the First Boston Entities) at such time;
(d) a majority of the seats (other than vacant seats) on the board of
directors of the Borrower shall at any time be occupied by Persons who
were neither (i) nominated by the Institutional Investors (including
the First Boston Entities) or the Management Purchasers and their
Permitted Transferees nor (ii) elected by directors so nominated;
For purposes of this definition, the term "First Boston Entities" shall mean
Credit Suisse First Boston Corporation, The Clipper Group, L.P., Merchant
Truckstops, L.P., Clipper Capital Associates, L.P. and Clipper/Merchant I, L.P.
and their Affiliates and any of the designees on the Closing Date. For purposes
of clause (b) of this definition, the convertible preferred stock and the senior
convertible participating preferred stock of Seller shall be deemed to
constitute capital stock with ordinary voting power. For purposes only of
clauses (a), (c) and (d) of this definition, the term "Institutional Investor"
shall be deemed to include any other holder or holders of shares of the Borrower
having ordinary voting power if any Institutional Investor or First Boston
Entity (other than an Institutional Investor deemed to be an Institutional
Investor solely by virtue of this provision) shall hold the irrevocable general
proxy of each such holder in respect of the shares held by such holder.
"Institutional Investors" shall mean The Clipper Group, L.P.,
First Plaza, Credit Suisse First Boston Corporation, Barclays USA, Inc., Olympus
Private Placement Fund, L.P., Clipper/Merchant I, L.P., Clipper Capital
Associates, L.P., National Partners, L.P., National Partners III, L.P., UBS
Capital Corporation, The Travelers Indemnity Company, The Phoenix Insurance Co.
and their respective Affiliates.
"CLAIM" is defined in Section 7.3.
"CLOSING" is defined in Article 2.
"CLOSING DATE" is defined in Article 2.
"CODE" means the United States Internal Revenue Code of 1986, as amended, and
the regulations thereunder.
"COMPANY" means Travel Ports of America, Inc., a New York corporation.
"CONTRACT" means any agreement, contract, obligation, lease, promise, or
undertaking (whether written or oral and whether express or implied) that is
legally binding.
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"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"GOVERNMENTAL AUTHORITY" means any federal, state, local, municipal, foreign, or
other government and any quasi-governmental authority of any nature (including
any governmental agency, branch, department, official, or entity and any court
or other tribunal).
"INDEMNITEE" and "INDEMNITOR" are defined in Section 7.3.
"LAW" means any common law and any federal, state, regional, municipal, local or
foreign law, statute, ordinance, rule, regulation or order or treaty.
"LIEN" means any lien, charge, easement, encumbrance, security interest, adverse
claim, equitable interest, right of first refusal or any other title defect or
restriction of any kind.
"LOSSES" is defined in Section 7.1.
"PERSON" means an individual, a corporation, a limited liability company, a
partnership, a trust, an unincorporated association, a government or any agency,
instrumentality or political subdivision of a government, or any other entity or
organization.
"SECURITIES ACT" means The Securities Act of 1933, as amended.
"SEC" means the Securities and Exchange Commission.
ARTICLE 9
CONSTRUCTION; MISCELLANEOUS PROVISIONS
9.1 NOTICES. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally or sent by overnight courier to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(i) If to Buyer or MergerCo, to:
TravelCenters of America, Inc.
24601 Center Ridge Road
Suite 200
Westlake, OH 44145-5634
Attention: Edwin P. Kuhn
with a copy to:
Calfee, Halter & Griswold LLP
1400 McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114
Attention: Philip M. Dawson, Esq.
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(ii) If to the Company, to:
Travel Ports of America, Inc.
3495 Winton Place
Building C
Rochester, NY 14623
Attention: E. Philip Saunders
with a copy to:
Harris, Beach & Wilcox, LLP
130 East Main Street
Rochester, NY 14604
Attention: Thomas E. Willett, Esq.
or in any case, to such other address for a party as to which notice shall have
been given to Buyer and Seller in accordance with this Section. Notices so
addressed shall be deemed to have been duly given (i) on the third business day
after the day of registration, if sent by registered or certified mail, postage
prepaid, or (ii) on the next business day following the documented acceptance
thereof for next-day delivery by a national overnight air courier service, if so
sent. Otherwise, notices shall be deemed to have been given when actually
received. A courtesy copy of any action, suit or proceeding commenced pursuant
to Article 7 shall be delivered to counsel for Buyer and Sellers within three
(3) days after filing.
9.2 ENTIRE AGREEMENT. This Agreement and exhibits hereto and the other
agreements entered into in connection herewith constitute the exclusive
statement of the agreement among Buyer and Seller concerning the subject matter
hereof, and supersedes all other prior agreements, oral or written, among or
between any of the parties hereto concerning such subject matter. All
negotiations among or between any of the parties hereto are superseded by this
Agreement, and there are no representations, warranties, promises,
understandings or agreements, oral or written, in relation to the subject matter
hereof among or between any of the parties hereto other than those expressly set
forth or expressly incorporated herein.
9.3 JURISIDICTION AND VENUE.
(a) Any action, suit or proceeding at law, in equity or otherwise
initiated by Seller that in any way arises out of or relates to this
Agreement, including all counterclaims relating thereto, shall be
brought in a state or federal court of competent jurisdiction located
in Monroe County, New York, and all objections to personal jurisdiction
and venue in any action, suit or proceeding so commenced are hereby
expressly waived by all parties hereto, except for any applicable
objections concerning insufficiency of process or insufficiency of
service of process, which are hereby preserved.
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(b) Any action, suit or proceeding at law, in equity or otherwise
initiated by Buyer that in any way arises out of or relates to this
Agreement, including all counterclaims relating thereto, shall be
brought in a state or federal court of competent jurisdiction located
in Cuyahoga County, Ohio, and all objections to personal jurisdiction
and venue in any action, suit or proceeding so commenced are hereby
expressly waived by all parties hereto, except for any applicable
objections concerning insufficiency of process or insufficiency of
service of process, which are hereby preserved.
9.4 MODIFICATION AND WAIVER. No amendment, modification, or waiver of
this Agreement or any provision hereof, including the provisions of this
sentence, shall be effective or enforceable as against a party hereto unless
made in a written instrument which specifically references this Agreement and
which is signed by the party waiving compliance. Except as may otherwise be
expressly provided herein, the failure of any Person to enforce at any time, or
for any period of time, any provision of this Agreement shall not be construed
as a waiver of any provision of this Agreement or of the right of any such
Person to enforce each and every provision of this Agreement, and no single or
partial exercise of any right hereunder shall preclude any other or further
exercise of that or any other right.
9.5 BINDING EFFECT. This Agreement shall be binding upon and shall
inure to the benefit of Buyer, Seller, and the respective successors and
permitted assigns of Buyer and of Seller.
9.6 HEADINGS. The article and section headings used in this Agreement
are intended solely for convenience of reference, do not themselves form a part
of this Agreement, and may not be given effect in the interpretation or
construction of this Agreement.
9.7 COUNTERPARTS. This Agreement may be executed and delivered in
multiple counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same instrument.
9.8 THIRD PARTIES. Except as may otherwise be expressly stated herein,
no provision of this Agreement is intended or shall be construed to confer on
any Person, other than the parties hereto, any rights or benefits hereunder.
9.9 TIME PERIODS. Any action required hereunder to be taken within a
certain number of days shall, except as may otherwise be expressly provided
herein, be taken within that number of calendar days; PROVIDED, HOWEVER, that if
the last day for taking such action falls on a Saturday, a Sunday, or a legal
holiday, the period during which such action may be taken shall automatically be
extended to the next business day.
9.10 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without regard to the
choice-of-laws or conflicts-of-laws provisions thereof.
9.11 FURTHER ASSURANCES. Buyer and Seller agree that, from time to time
after the Closing each will execute, acknowledge and deliver such other
instruments as reasonably may
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be required (i) to more effectively transfer and vest in Buyer the Shares, or
(ii) to more effectively transfer and vest in Seller the Buyer Common Stock, or
(iii) to otherwise carry out the terms and conditions of this Agreement.
ARTICLE 10
TERMINATION
10.1 TERMINATION OF AGREEMENT. Subject to any obligations of Seller to
resign from the Board, this Agreement and all rights hereunder shall terminate
upon the earliest to occur of the following date:
(a) termination of the Merger Agreement in accordance
with its terms;
(b) the fourth (4th) anniversary of the Closing Date
under this Agreement; or
(c) the date on which both (i) E. Philip Saunders has died or
he owns less than 50,000 shares of Buyer Common Stock AND (ii) either (x) Seller
(or his transferee or devisee pursuant to Section 6.2(g)) has exercised the Put
Right, or (y) the fourth (4th) anniversary of the Closing Date under this
Agreement; or
(d) an IPO; or
(e) the failure of Buyer to satisfy the covenant set
forth in Section 6.6 prior to Closing.
10.2 EFFECT OF TERMINATION. If this Agreement is terminated, all
further obligations of the parties under this Agreement will terminate and be of
no further force and effect, except that the provisions of Article 7 shall
survive. Notwithstanding the foregoing, Buyer and Seller acknowledge that if
this Agreement is terminated pursuant to Section 10.1(e), Seller shall receive
for the Shares in the Merger the same consideration per share for the Shares as
shall be paid by Buyer to all shareholders of the Company.
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IN WITNESS WHEREOF, Buyer and Seller have executed and
delivered this Share Exchange Agreement, as of the date first written above.
TRAVELCENTERS OF AMERICA, INC.
/s/ Edwin P. Kuhn
--------------------------------------
Edwin P. Kuhn, President and
Chief Executive Officer
("Buyer")
/s/ E. Philip Saunders
--------------------------------------
E. Philip Saunders
("Seller")
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SCHEDULE A
----------
Credit Agreement, dated as of March 21, 1997, as amended and restated as of
November 24, 1998, among TravelCenters of America, Inc., the financial
institutions party thereto, as lenders, and The Chase Manhattan Bank.
(See Section 7.06)
Senior Secured Note Exchange Agreements, dated as of March 21, 1997, as
supplemented as of November 24, 1998, among TravelCenters of America,
Inc. and the Tranche A Exchange Note Purchasers named therein. (See
Section 7.6)
Indenture, dated as of March 27, 1997, relating to the TravelCenters of
America 10.25% Senior Subordinated Notes due April 1, 2007. (See
Section 4.04)
The Restated Certificate of Incorporation of Buyer as amended.
