|
|
|
|
|
|
|
|
|
|
SHARES OF
CLASS A COMMON
STOCK
BENEFICIALLY
OWNED(1)
|
|
|
|
NUMBER
|
|
PERCENT
|
|
Principal stockholders:
|
|
|
|
|
|
|
|
Wayzata Investment Partners LLC(2)
|
|
|
14,951,625
|
|
|
58.26
|
%
|
Ameriprise Financial, Inc.(3)(4)
|
|
|
1,375,401
|
|
|
5.36
|
%
|
Columbia Management Investment Advisers, LLC(4)(5)
|
|
|
|
|
|
|
|
Columbia Small Cap Value Fund II(4)(5)
|
|
|
|
|
|
|
|
BlackRock, Inc.(6)
|
|
|
684,775
|
|
|
2.67
|
%
|
Buckingham Capital Management, Inc.(7)
|
|
|
626,785
|
|
|
2.44
|
%
|
Imperial Capital Asset Management, LLC(8)
|
|
|
732,212
|
|
|
2.85
|
%
|
Next Century Growth Investors, LLC(9)
|
|
|
536,827
|
|
|
2.09
|
%
|
Private Management Group, Inc.(10)
|
|
|
463,559
|
|
|
1.81
|
%
|
Executive Officers and Directors:
(11)(12)
|
|
|
|
|
|
|
|
Graham Hood
|
|
|
396,461
|
|
|
1.54
|
%
|
Mark Irion
|
|
|
226,001
|
|
|
*
|
|
Westley Parks
|
|
|
114,417
|
|
|
*
|
|
Robert Singer
|
|
|
36,318
|
|
|
*
|
|
James Continenza
|
|
|
46,333
|
|
|
*
|
|
Joseph Deignan
|
|
|
|
|
|
*
|
|
Gerard E. Holthaus
|
|
|
22,015
|
|
|
*
|
|
Michael Sileck
|
|
|
30,348
|
|
|
*
|
|
All officers and directors as a group (8 persons) (11)(12)
|
|
|
871,893
|
|
|
3.40
|
%
|
-
*
-
Less
than 1%
-
(1)
-
Pursuant
to Rule 13d-3 under the Exchange Act, a person has beneficial ownership of any securities as to which such person, directly or indirectly, through
any contract, arrangement, undertaking, relationship or otherwise has or shares voting power, investment power, or both, and as to which such person has the right to acquire such voting and/or
investment power within 60 days. Percentage of beneficial ownership as to any person as of a particular date is calculated by dividing the number of shares beneficially owned by such person by
the sum of the number of shares outstanding as of such date plus the number of shares as to which such person has the right to acquire voting and/or investment power within 60 days.
95
Table of Contents
-
(2)
-
Wayzata
represents the aggregate shareholdings of Wayzata Opportunities Fund II, L.P. and Wayzata Opportunities Fund Offshore II, L.P., which are
advised by Wayzata Investment Partners LLC. The address for such stockholders is c/o Wayzata Investment Partners LLC, 701 East Lake Street, Suite 300, Wayzata, Minnesota
55391. This figure does not include shares of Class A Common Stock issuable upon the exercise of options for units in Neff Holdings LLC and the exercise of redemption rights with respect
to such units that the Company may settle in shares of Class A Common Stock as any such issuance would result in the cancellation of shares of Class B Common Stock on a one-for-one
basis.
-
(3)
-
The
address of Ameriprise Financial, Inc. is 145 Ameriprise Financial Center, Minneapolis, Minnesota 55474.
-
(4)
-
The
Company has received a copy of Amendment No. 2 to the Schedule 13G/A, as filed with the SEC on February 10, 2017 by Columbia Small Cap Value
Fund II ("Fund"), Columbia Management Investment Advisers, LLC ("CMIA"), the investment adviser of the Fund and certain other funds and accounts, which directly own the shares, and Ameriprise
Financial, Inc. ("AFI"), the parent holding company of CMIA reporting ownership of these shares as of December 31, 2016. According to the Schedule 13G/A, AFI and CMIA each have
shared voting power with respect to 1,276,701 shares and shared dispositive power with respect to 1,375,401 shares, the Fund has sole voting power over 610,000 shares and shared dispositive power over
610,000 shares.
-
(5)
-
The
address of Columbia Management Investment Advisers, LLC and Columbia Small Cap Value Fund II is 225 Franklin Street, Boston, Massachusetts 02110.
-
(6)
-
The
Company has received a copy of the Amendment No. 1 to Schedule 13G/A as filed with the SEC on January 25, 2017 by BlackRock, Inc.
According to Amendment No. 1 to Schedule 13G/A, BlackRock, Inc. has sole voting power over 640,029 shares and dispositive power with respect to 684,775 shares. The address of
BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055.
-
(7)
-
The
Company has received a copy of the Amendment No. 1 to Schedule 13G/A, as filed with the SEC on February 14, 2017 by Buckingham Capital
Management, Inc. and Buckingham Research Group Incorporated. According to the Amendment No. 1 to the Schedule 13G/A, each of Buckingham Capital Management, Inc. and
Buckingham Research Group Incorporated have sole voting power and dispositive power with respect to 626,785 shares. The address of Buckingham Capital Management, Inc. is 485 Lexington Avenue,
Third Floor, New York, New York 10017.
-
(8)
-
The
Company has received a copy of the Schedule 13G, as filed with the SEC on February 16, 2016 by Imperial Capital Asset Management, LLC, Long
Ball Partners LLC and Jason Reese. According to the Schedule 13G, each of Imperial Capital Asset Management LLC, Long Ball Partners LLC and Jason Reese have sole voting
power and dispositive power with respect to 732,212 shares. The address of Imperial Capital Asset Management, LLC is 2000 Avenue of the Stars, 9th Floor, Los Angeles, California 90067.
-
(9)
-
The
Company has received a copy of the Amendment No. 2 to Schedule 13G/A as filed with the SEC on February 13, 2017 by Next Century Growth
Investors, LLC ("Next Century"), Thomas L. Press and Robert E. Scott. According to Amendment No. 2 to Schedule 13G/A, Thomas L. Press serves as director, chairman and chief
executive officer of Next Century and Robert E. Scott serves as director and president of Next Century. The stock to which the Amendment No. 2 to Schedule 13G/A relates may be deemed
beneficially owned within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934 by (1) Next Century by virtue of its investment discretion and/or voting power over client
securities, which may be revoked; and (2) Thomas L. Press and Robert E. Scott, as a result of their positions with and ownership positions in Next Century, which could be deemed to confer upon
each of them voting and/or investment power over the shares.
96
Table of Contents
Each
of Next Century, Thomas L. Press and Robert E. Scott disclaim beneficial ownership of the stock except to the extent of each of their respective pecuniary interests therein, if any, and the
filing of Amendment No. 2 to Schedule 13G/A shall not be construed as an admission by any of such persons that it is the beneficial owner of the stock. The address of Next Century Growth
Investors, LLC is 5500 Wayzata Blvd., Suite 1275, Minneapolis, Minnesota 55416.
-
(10)
-
The
Company has received a copy of the Amendment No. 4 to Schedule 13G/A as filed with the SEC on May 3, 2017 by Private Management
Group, Inc. According to the Amendment No. 4 to Schedule 13G/A, Private Management Group, Inc. has sole voting power and dispositive power with respect to 463,559 shares.
The address of Private Management Group, Inc. is 15635 Alton Parkway, Suite 400, Irvine, California 92618.
-
(11)
-
These
figures include shares of Class A Common Stock underlying Company Stock Options held by the directors and named executive officers that are immediately
exercisable, or are scheduled to become exercisable within 60 days of July 14, 2017: Mr. Hood32,173; Mr. Irion14,729 and
Mr. Parks12,907.
-
(12)
-
These
figures include shares of Class A Common Stock that will be issued pursuant to the LLC Optionholder Exchange and Termination Agreement with
respect to the LLC Options: Mr. Hood354,288; Mr. Irion211,272, Mr. Parks97,510, Mr. Singer14,303 and
Mr. Continenza20,433.
97
Table of Contents
WHERE YOU CAN FIND MORE INFORMATION
The Company is subject to the reporting requirements of the Exchange Act. Accordingly, the Company files current, quarterly and annual reports,
information statements and other information with the SEC. You may read and copy these reports, information statements and other information at the SEC's Public Reference Room at 100 F Street,
N.E., Washington, D.C. 20549. Please call 1-800-SEC-0330 for further information on the operation of the SEC's Public Reference Room. The Company's SEC filings also are available to the public
at the Internet website maintained by the SEC at
www.sec.gov
.
The
Company also makes available free of charge through its website its Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and
amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, its definitive information statements and reports on Forms 3, 4 and 5 pursuant to
Section 16 of the Exchange Act, as soon as reasonably practicable after it electronically files such reports or amendments with, or furnishes them to, the SEC. The Company's Internet website
address is www.neffrental.com. The information located on, or hyperlinked or otherwise connected to, the Company's website is not, and shall not be deemed to be, a part of this information statement
or incorporated into any other filings that we make with the SEC.
The
Company incorporates information into this information statement by reference, which means that the Company discloses important information to you by referring you to another
document filed separately with the SEC. The information incorporated by reference is deemed to be part of this information statement, except to the extent superseded by information contained in this
information statement or by information contained in documents filed with the SEC after the date of this information statement. This information statement incorporates by reference the documents set
forth below that have been previously filed with the SEC (other than, in each case, documents or information deemed to have been furnished and not filed in accordance with SEC
rules):
-
-
The Company's Annual Report on Form 10-K for the year ended December 31, 2016;
-
-
The Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017 and June 30, 2017; and
-
-
The Company's Current Report on Form 8-K filed with the SEC on May 17, 2017 and July 14, 2017.
We
also incorporate by reference into this information statement additional documents that the Company may file with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act, from and after the date of this information statement and prior to the effective time of the Merger; provided, however, that we are not incorporating by reference any additional
documents or information furnished and not filed with the SEC.
You
may obtain copies of any of these filings by contacting the Company at the following address or phone number or by contacting the SEC as described above. Documents incorporated by
reference are available from the Company without charge, excluding all exhibits unless an exhibit has been specifically incorporated by reference into this information statement, by requesting them in
writing or by telephone at:
Neff
Corporation
3750 N.W. 87
th
Avenue, Suite 400
Miami, Florida 33178
Attn: Investor Relations Department
Telephone: (305) 513-3350
98
Table of Contents
Stockholders
should not rely on information that purports to be made by or on behalf of the Company other than that contained in or incorporated by reference in this information
statement. The Company has not authorized anyone to provide information on behalf of the Company that is different from that contained in this information statement. This information statement is
dated August 7, 2017. No assumption should be made that the information contained in this information statement is accurate as of any date other than that date, and the mailing of this
information statement will not create any implication to the contrary. Notwithstanding the foregoing, in the event of any material change in any of the information previously disclosed, the Company
will, where relevant and if required by applicable law, update such information through a supplement to this information statement.
We have not authorized anyone to give you any information or to make any representation about the proposed merger or the Company that is different from or adds to the
information contained in this information statement or in the documents we have publicly filed with the SEC. Therefore, if anyone does give you any different or additional information, you should not
rely on it.
99
Annex A
AGREEMENT AND PLAN OF MERGER
by
and among
H&E EQUIPMENT SERVICES, INC.
NEFF CORPORATION,
AND
YELLOW IRON MERGER CO.
Dated
as of July 14, 2017
TABLE OF CONTENTS
A-i
A-ii
INDEX OF DEFINED TERMS
|
|
|
|
|
|
|
Page
|
|
Acceptable Confidentiality Agreement
|
|
|
58
|
|
Acquisition Proposal
|
|
|
58
|
|
Action
|
|
|
59
|
|
Adjustment Amount
|
|
|
3
|
|
affiliate
|
|
|
70
|
|
Agreement
|
|
|
1
|
|
business day
|
|
|
69
|
|
Certificate of Merger
|
|
|
3
|
|
Charter Documents
|
|
|
59
|
|
Chosen Courts
|
|
|
71
|
|
Closing
|
|
|
2
|
|
Closing Date
|
|
|
3
|
|
Code
|
|
|
59
|
|
Company
|
|
|
1
|
|
Company Acquisition Agreement
|
|
|
45
|
|
Company Adverse Recommendation Change
|
|
|
45
|
|
Company Benefit Plans
|
|
|
59
|
|
Company Board
|
|
|
1
|
|
Company Board Recommendation
|
|
|
45
|
|
Company Bylaws
|
|
|
35
|
|
Company Certificate
|
|
|
13
|
|
Company Class A Common Stock
|
|
|
59
|
|
Company Class B Common Stock
|
|
|
59
|
|
Company Common Stock
|
|
|
59
|
|
Company Contract
|
|
|
21
|
|
Company Disclosure Schedule
|
|
|
9
|
|
Company Equity Awards
|
|
|
5
|
|
Company ERISA Affiliate
|
|
|
59
|
|
Company Fundamental Representations
|
|
|
53
|
|
Company Indemnified Parties
|
|
|
41
|
|
Company IP Contract
|
|
|
21
|
|
Company Leased Properties
|
|
|
24
|
|
Company Material Adverse Effect
|
|
|
59
|
|
Company Owned Intellectual Property
|
|
|
60
|
|
Company Owned Properties
|
|
|
23
|
|
Company Real Property
|
|
|
24
|
|
Company Registered Owned Intellectual Property
|
|
|
60
|
|
Company Related Parties
|
|
|
58
|
|
Company Restricted Stock Unit Award
|
|
|
5
|
|
Company SEC Reports
|
|
|
14
|
|
Company Stock Option
|
|
|
4
|
|
Company Stock Plan
|
|
|
60
|
|
Company Subsidiary Securities
|
|
|
12
|
|
Competition Laws
|
|
|
61
|
|
Compliant
|
|
|
61
|
|
Confidentiality Agreement
|
|
|
37
|
|
Contract
|
|
|
61
|
|
Copyrights
|
|
|
61
|
|
A-iii
|
|
|
|
|
|
|
Page
|
|
Credit Agreements
|
|
|
61
|
|
Debt Commitment Letter
|
|
|
31
|
|
Delaware Secretary
|
|
|
3
|
|
DGCL
|
|
|
1
|
|
Disclosed Conditions
|
|
|
32
|
|
Dissenting Shares
|
|
|
8
|
|
Dissenting Stockholder
|
|
|
9
|
|
DOJ
|
|
|
39
|
|
Effective Time
|
|
|
3
|
|
Enforceability Exceptions
|
|
|
13
|
|
Environmental Laws
|
|
|
23
|
|
Equity Interest
|
|
|
62
|
|
ERISA
|
|
|
62
|
|
Exchange Act
|
|
|
62
|
|
Exchange Agreements
|
|
|
2
|
|
Exchange Ratio
|
|
|
62
|
|
Exchanges
|
|
|
2
|
|
Financing
|
|
|
31
|
|
FTC
|
|
|
39
|
|
GAAP
|
|
|
62
|
|
Go-Shop Period
|
|
|
44
|
|
Governmental Entity
|
|
|
62
|
|
Governmental Requirements
|
|
|
14
|
|
Hazardous Material
|
|
|
62
|
|
Holdings
|
|
|
1
|
|
HSR Act
|
|
|
62
|
|
Indebtedness
|
|
|
62
|
|
Information Statement
|
|
|
13
|
|
Information Systems
|
|
|
26
|
|
Initial Superior Proposal Notice
|
|
|
45
|
|
Intellectual Property
|
|
|
63
|
|
Intervening Event
|
|
|
63
|
|
IRS
|
|
|
63
|
|
Key Holders
|
|
|
2
|
|
Key Holders Exchange
|
|
|
2
|
|
Key Holders Exchange Agreement
|
|
|
1
|
|
knowledge
|
|
|
69
|
|
Laws
|
|
|
63
|
|
Lease
|
|
|
24
|
|
Lender Related Parties
|
|
|
63
|
|
Lenders
|
|
|
31
|
|
Letter of Transmittal
|
|
|
7
|
|
Liens
|
|
|
63
|
|
LLC Agreement
|
|
|
11
|
|
LLC Options
|
|
|
63
|
|
LLC Units
|
|
|
1
|
|
made available
|
|
|
70
|
|
Marketing Period
|
|
|
63
|
|
Merger
|
|
|
1
|
|
Merger Consideration
|
|
|
3
|
|
A-iv
|
|
|
|
|
|
|
Page
|
|
Merger Sub
|
|
|
1
|
|
Merger Sub Organizational Documents
|
|
|
30
|
|
Multiemployer Plan
|
|
|
18
|
|
Multiple Employer Plan
|
|
|
18
|
|
Nasdaq
|
|
|
64
|
|
New Plans
|
|
|
41
|
|
No-Shop Period Start Date
|
|
|
44
|
|
Notice Period
|
|
|
45
|
|
Offering Materials
|
|
|
50
|
|
Off-the-Shelf Software
|
|
|
64
|
|
Old Certificate
|
|
|
4
|
|
Open License Terms
|
|
|
64
|
|
Order
|
|
|
17
|
|
Outside Date
|
|
|
55
|
|
Parent
|
|
|
1
|
|
Parent Common Shares
|
|
|
64
|
|
Parent Disclosure Schedule
|
|
|
29
|
|
Parent Material Adverse Effect
|
|
|
64
|
|
Parent Organizational Documents
|
|
|
30
|
|
parties
|
|
|
70
|
|
Patents
|
|
|
64
|
|
Paying Agent
|
|
|
7
|
|
Payment Fund
|
|
|
7
|
|
Permits
|
|
|
20
|
|
Permitted Encumbrances
|
|
|
24
|
|
person
|
|
|
69
|
|
Personal Information
|
|
|
64
|
|
Premium Cap
|
|
|
42
|
|
Public Software
|
|
|
64
|
|
Registered Intellectual Property
|
|
|
65
|
|
Related Software
|
|
|
64
|
|
Release
|
|
|
65
|
|
Representatives
|
|
|
65
|
|
Required Information
|
|
|
65
|
|
Requisite Company Vote
|
|
|
13
|
|
Requisite Regulatory Approvals
|
|
|
65
|
|
Sarbanes-Oxley Act
|
|
|
65
|
|
Satisfaction Time
|
|
|
3
|
|
SEC
|
|
|
65
|
|
Securities Act
|
|
|
65
|
|
Special Committee
|
|
|
1
|
|
Special Committee Financial Advisor
|
|
|
16
|
|
SRO
|
|
|
65
|
|
Stockholder Consent
|
|
|
2
|
|
Subsidiary
|
|
|
66
|
|
Substitute RSU Award
|
|
|
5
|
|
Substitute Stock Option
|
|
|
5
|
|
Superior Proposal
|
|
|
66
|
|
Superior Proposal Change Notice
|
|
|
46
|
|
Supplemental Financial Statements
|
|
|
52
|
|
A-v
|
|
|
|
|
|
|
Page
|
|
Support Agreement
|
|
|
2
|
|
Surviving Corporation
|
|
|
1
|
|
Takeover Statutes
|
|
|
27
|
|
Tax
|
|
|
66
|
|
Tax Return
|
|
|
66
|
|
Taxes
|
|
|
66
|
|
Termination Fee
|
|
|
66
|
|
TRA
|
|
|
11
|
|
Trade Secrets
|
|
|
66
|
|
Trademarks
|
|
|
67
|
|
Transaction Document
|
|
|
67
|
|
Transaction Litigation
|
|
|
48
|
|
Willful and Material Breach
|
|
|
67
|
|
Work
|
|
|
64
|
|
Exhibits
|
|
|
|
|
Exhibit ACertificate of Merger
|
|
|
|
|
Exhibit BForm of Certificate of Incorporation
|
|
|
|
|
Exhibit CDebt Commitment Letter
|
|
|
|
|
Exhibit DAcceptable Confidentiality Agreement
|
|
|
|
|
A-vi
AGREEMENT AND PLAN OF MERGER
AGREEMENT
AND PLAN OF MERGER, dated as of July 14, 2017 (this "
Agreement
"), by and among H&E Equipment
Services, Inc., a Delaware corporation ("
Parent
"), Neff Corporation, a Delaware corporation
("
Company
"), and Yellow Iron Merger Co., a Delaware corporation and a direct, wholly owned subsidiary of Parent ("
Merger
Sub
"). Capitalized terms used and not otherwise defined herein have the meanings set forth in
Article IX
below.
W I T N E S S E T H:
WHEREAS,
the parties intend that Merger Sub be merged with and into Company (the "
Merger
"), with Company surviving the
Merger (hereinafter sometimes referred to in such capacity as the "
Surviving Corporation
") on the terms and subject to the conditions set forth herein;
WHEREAS,
the Special Committee of the Board of Directors of Company (the "
Special Committee
") has unanimously recommended to the Board of
Directors of Company (the "
Company Board
") that the Company Board should approve this Agreement and the transactions contemplated thereby;
WHEREAS,
the Company Board, subsequent to and consistent with the recommendation of the Special Committee, has by a unanimous vote of the members of the Company Board
(a) determined that it is in the best interests of Company and its stockholders, and declared it advisable, to enter into this Agreement and the Transaction Documents, (b) approved the
execution, delivery and performance of this Agreement (which constitutes an "agreement of merger" as such term is used in Section 251 of the General Corporation Law of the State of Delaware
(the "
DGCL
") and the Transaction Documents and the consummation of the transactions contemplated hereby and thereby, including the Merger in accordance
with the DGCL, and (c) resolved, subject to the terms and conditions set forth in this Agreement, to recommend adoption of this Agreement by the stockholders of Company;
WHEREAS,
Parent, as the sole stockholder of Merger Sub has approved this Agreement and the transactions contemplated hereby, including the Merger, in accordance with the DGCL;
WHEREAS,
the Boards of Directors of Parent and Merger Sub have unanimously (a) determined that it is in the best interests of Parent, Merger Sub and their respective stockholders,
and declared it advisable, to enter into this Agreement and the Transaction Documents and (b) approved the execution, delivery and performance of this Agreement and the Transaction Documents
and the consummation of the transactions contemplated hereby and thereby, including the Merger;
WHEREAS,
concurrently herewith, as a condition and material inducement to Parent's willingness to enter into this Agreement, certain stockholders of Company are entering into an Exchange
and Termination Agreement (the "
Key Holders Exchange Agreement
"), with Company, Parent, and Neff Holdings LLC
("
Holdings
"), pursuant to which, immediately prior to the Closing, the Common Units (the "
LLC Units
"),
will be exchanged (the "
Key Holders Exchange
") for shares of Company Class A Common Stock immediately prior to the Effective Time;
WHEREAS,
concurrently herewith, as a condition and material inducement to Parent's willingness to enter into this Agreement, the LLC Optionholders (as defined therein) are
entering into an Exchange and Termination Agreement (together with the Key Holders Exchange Agreement, the "
Exchange Agreements
"), with Company, Parent,
Holdings and the Management Representative (as defined therein), pursuant to which, immediately prior to the Closing, LLC Options, after giving effect to the exercise of the LLC Options
for LLC Units, will be exchanged (together with the Key Holders Exchange, the "
Exchanges
") for shares of Company Class A Common Stock
immediately prior to the Effective Time;
A-1
WHEREAS,
concurrently herewith certain stockholders of Company (together, the "
Key Holders
") have entered into a support agreement with
Parent (the "
Support Agreement
"), pursuant to which, among other things, the Key Holders will agree to vote all their shares of Company Common Stock in
favor of adoption of this Agreement, approval of the Merger and approval of any other matters required to be approved or adopted in order to effect the Merger and the other transactions contemplated
hereby;
WHEREAS,
concurrently herewith each of the Key Holders has executed and delivered to Parent a written consent (a "
Stockholder Consent
")
approving this Agreement, the Merger and the other transactions contemplated hereby in accordance with the DGCL (including Section 228(c) of the DGCL), effective contingent upon the execution
of this Agreement; and
WHEREAS,
the parties desire to make certain representations, warranties and agreements in connection with the Merger and other transactions contemplated hereby and also to prescribe
certain conditions to the Merger and the other transactions contemplated hereby.
NOW,
THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained herein, and intending to be legally bound hereby, the parties hereto agree
as follows:
ARTICLE I
THE MERGER
1.1
The Merger.
Upon the terms and subject to the conditions of this Agreement, in accordance with the DGCL,
at the Effective Time, Merger Sub shall merge with and into Company.
Company shall be the surviving corporation in the Merger, as a wholly owned subsidiary of Parent, and shall continue its corporate existence under the Laws of the State of Delaware as the Surviving
Corporation. Upon consummation of the Merger, the separate corporate existence of Merger Sub shall terminate.
1.2
Closing.
Subject to the terms and conditions of this Agreement, the closing of the Merger (the
"
Closing
") will take place
at 10:00 a.m., New York City time, at the offices of Akin Gump Strauss Hauer & Feld LLP, One Bryant Park, New York, NY 10036-6745, on a date which shall be no later than three
(3) business days after the satisfaction or waiver (subject to applicable Law) of the latest to occur of the conditions set forth in
Article VII
hereof (other than those conditions that by
their nature can only be satisfied at the Closing, but subject to the satisfaction or
waiver thereof) (the "
Satisfaction Time
"), unless another date, time or place is agreed to in writing prior to such date by Parent and Company;
provided
that notwithstanding the occurrence of the Satisfaction Time, (x) if the Marketing Period has not ended as of the Satisfaction Time,
Parent will not be required to consummate the Closing until the earlier of (a) any business day during the Marketing Period as may be specified by Parent on no less than three
(3) business days' prior written notice to Company, and (b) the second (2nd) business day after the final day of the Marketing Period (subject, in each case, to the continued
satisfaction or waiver of the conditions set forth in
Article VII
(other than those conditions that by their nature can only be satisfied at the
Closing, but subject to the satisfaction or waiver thereof)) and (y) the Closing shall occur no earlier than the first (1st) business day after the No-Shop Period Start Date (or, if applicable,
solely if there is a Holdover Proposal, the Delayed No-Shop Period Start Date). The date on which the Closing occurs is referred to in this Agreement as the "
Closing
Date
." Any party may participate in the Closing by electronic delivery of documents and/or funds.
1.3
Effective Time.
Subject to the terms and conditions of this Agreement, at the Closing, Parent and
Company shall cause to be filed with the Secretary of State of the State of
Delaware (the "
Delaware Secretary
") a certificate of merger effecting the Merger in substantially the form attached hereto as
Exhibit A
(the
"
Certificate of Merger
"), as provided in Section 251 of the DGCL. The
Merger shall become effective at such time as the Certificate of Merger is duly filed with the Delaware
A-2
Secretary
or at such other date or time as Parent and Company shall agree in writing and shall specify in the Certificate of Merger (such date and time the Merger becomes effective being the
"
Effective Time
").
1.4
Effects of the Merger.
At the Effective Time, the Surviving Corporation shall succeed to all the
properties, assets, rights, privileges, immunities, powers and franchises and be subject
to all of the debts, liabilities, restrictions, disabilities and duties of Company and Merger Sub, and the Merger shall have the effects set forth in the applicable provisions of the DGCL, this
Agreement and the Certificate of Merger.
1.5
Conversion of Capital Stock.
At the Effective Time, by virtue of the Merger and without any
action on the part of Parent, Merger Sub, Company or the holders of any shares of capital stock or
Equity Interests of Parent, Merger Sub or Company:
(a) Each
share of Company Class A Common Stock issued and outstanding immediately prior to the Effective Time after giving effect to the Specified Exchange (as
defined in the Exchange Agreements) (except for, in each case, shares (x) (i) held in the treasury of Company or (ii) owned, directly or indirectly, by Parent, Merger Sub or any of their
respective Subsidiaries and (y) Dissenting Shares) shall be cancelled and automatically converted, in accordance with the procedures set forth in this Agreement, into the right to receive an
amount equal to (A) $21.07 in cash, without interest minus (B) the Adjustment Amount (the "
Merger Consideration
"). The
"
Adjustment Amount
" shall mean an amount equal to the quotient of (i) the total costs actually incurred by Parent with respect to the items set
forth on Annex A, and (ii) the number of shares of Company Class A Common Stock issued and outstanding on the Closing Date (after giving effect to the Specified Exchange (as
defined in the Exchange Agreements) but excluding shares held in the treasury of Company) plus the number of shares of Company Class A Common Stock issuable in respect of the Company Equity
Awards outstanding on the Closing Date, whether vested or unvested;
provided
,
however
, that in no event
will the Adjustment Amount exceed $0.44. The Adjustment Amount shall be deemed to be zero in the event that Parent or Merger Sub have breached any covenant or agreement contained in
Section 6.3
of
this Agreement and such breach has materially delayed the clearance, termination, or expiration of any required waiting period
under the HSR Act.
(b) Each
share of Company Class B Common Stock outstanding or held in treasury immediately prior to the Effective Time shall be cancelled and retired and will cease
to exist, and no consideration shall be delivered in exchange therefor.
(c) All
the shares of Company Class A Common Stock converted into the right to receive the Merger Consideration pursuant to this
Article I
shall no longer be outstanding and shall automatically be
cancelled and shall cease to exist as of the Effective Time, and each
certificate (each, an "
Old Certificate
", it being understood that any reference herein to "Old Certificate" shall be deemed to include reference to
book-entry account statements relating to the ownership of shares of Company Class A Common Stock) previously representing any such shares of Company Class A Common Stock shall
thereafter represent only the right to receive the Merger Consideration, without interest thereon. Without limiting the other provisions of this Agreement, if following the execution and delivery of
this Agreement and prior to the Effective Time, Company Common Shares or other Equity Interests of Company shall have been increased, decreased or changed into or exchanged for a different number or
kind of shares or securities (other than the issuance of additional shares of capital stock of Company as permitted by this Agreement and the issuance of shares of Company Class A Common Stock
in connection with the Exchanges), including by reason of a reorganization, reclassification, stock dividend, stock split, reverse stock split, or other similar change in capitalization, or there
shall be any other similar event, an
A-3
appropriate
and proportionate adjustment shall be made to the Merger Consideration and any other amounts payable pursuant to this Agreement to reflect such event.
(d) Notwithstanding
anything in this Agreement to the contrary, at the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub,
Company or the holders of any shares of capital stock or Equity Interests of Parent, Merger Sub or Company, all shares of Company Common Stock that are owned by Company (including if held in the
treasury of Company), Parent or Merger Sub or their direct or indirect Subsidiaries shall be cancelled and shall cease to exist and neither the Merger Consideration nor any other consideration shall
be delivered in exchange therefor.
1.6
Surviving Corporation Common Stock.
At the Effective Time, each share of common stock of Merger
Sub issued and outstanding immediately prior to the Effective Time shall be converted into one validly
issued, fully paid and non-assessable of common stock, par value $0.01 per share, of the Surviving Corporation.
1.7
Treatment of Company Equity Awards.
(a) At
the Effective Time, each option to purchase shares of Company Class A Common Stock granted by Company, whether vested or unvested, that is outstanding and
unexercised as of the Effective Time (each, a "
Company Stock Option
") shall be cancelled and shall cease to be outstanding and shall not be assumed.
(b) In
consideration of the cancelation and termination of each Company Stock Option (or portion thereof) that is outstanding and unvested as of the Effective Time, Parent
shall issue an option to purchase Parent Common Shares (each, a "
Substitute Stock Option
"). Each Substitute Stock Option generally shall have, and be
subject to, the same terms and conditions as were applicable to the Company Stock Option in respect of which such Substitute Stock Option was granted immediately prior to the Effective Time (including
any vesting provisions), provided that (i) each Substitute Stock Option shall be exercisable for that number of whole Parent Common Shares equal to the product (rounded down to the nearest
whole number) of (w) the number of shares of Company Class A Common Stock that were issuable upon the exercise of the Company Stock Option (or portion thereof) in respect of which such
Substitute Stock Option was granted immediately prior to the Effective Time and (x) the
Exchange Ratio and (ii) the per share exercise price for the Parent Common Shares issuable upon exercise of such Substitute Stock Option shall equal the quotient (rounded up to the nearest
whole cent) of (y) the exercise price per share of Company Class A Common Stock applicable to the Company Stock Option (or portion thereof) in respect of which such Substitute Stock
Option was granted immediately prior to the Effective Time and (z) the Exchange Ratio.
(c) In
consideration of the cancelation and termination of each Company Stock Option (or portion thereof) that is outstanding and vested (based solely on the terms of the
applicable Company Stock Option and without the exercise of any discretion by Company or any other Person) as of the Effective Time, Parent shall cause the Surviving Corporation or one of its
Subsidiaries to pay the holder thereof an amount in cash (less applicable Tax withholdings) within ten (10) days after the Closing Date equal to the product of (i) the Merger
Consideration, minus the per share exercise price for the Company Class A Common Stock issuable under such Company Stock Option (or portion thereof), multiplied by (ii) the number of
shares of Company Class A Common Stock subject to such Company Stock Option (or portion thereof) as of the Effective Time.
(d) At
the Effective Time, each restricted stock unit award in respect of shares of Company Class A Common Stock granted by Company, whether vested or unvested, that
is outstanding as of the Effective Time (a "
Company Restricted Stock Unit Award
" and, together with the Company
A-4
Stock
Options, the "
Company Equity Awards
") shall be canceled and shall cease to be outstanding and shall not be assumed.
(e) In
consideration of the cancelation and termination of each Company Restricted Stock Unit Award that is outstanding and unvested as of the Effective Time, Parent shall
issue an award of time-vesting restricted stock units (each a "
Substitute RSU Award
") relating to the number of Parent Common Shares equal to the
product of (i) the number of shares of Company Class A Common Stock with respect to which such Company Restricted Stock Unit Award was unvested as of immediately prior to the Effective
Time and (ii) the Exchange Ratio. Each Substitute RSU Award issued pursuant to this
Section 1.7(e)
generally shall be subject to the same
terms and conditions (including, without limitation, any time-based vesting schedule) as applied to the related Company Restricted Stock Unit Award in respect of which such Substitute RSU Award was
granted, provided that any performance vesting condition shall be waived.
(f) In
consideration of the cancelation and termination of each Company Restricted Stock Unit Award that is outstanding and vested (based solely on the terms of the
applicable Company Restricted Stock Unit Award and without the exercise of any discretion by Company or any other Person) as of the Effective Time, Parent shall cause the Surviving Corporation or one
of its Subsidiaries to pay the holder thereof an amount in cash within ten (10) days after the Closing Date equal to the product of (i) the Merger Consideration, multiplied by
(ii) the number of shares of Company Class A Common Stock with respect to which such Company Restricted Stock Unit Award was so vested as of immediately prior to the Effective Time.
(g) Notwithstanding
the forgoing or any provision of this Agreement to the contrary, the Substitute Stock Options and the Substitute RSU Awards will be revised to reflect
that such awards are in respect of Parent Common Shares, and may contain such modifications to the Company Equity Awards as Parent deems appropriate to reflect the consummation of the transactions
contemplated by this Agreement and Company becoming a Subsidiary of Parent.
(h) Prior
to the Effective Time, Company shall take all actions necessary to cause the Company Equity Awards to be treated as set forth in this
Section 1.7
, including, without limitation, the Company Board
and its compensation committee, as applicable, adopting any resolutions and taking
all other actions (including providing any required notices and obtaining any required consents) that are necessary to effectuate the provisions of this
Section 1.7
. Notwithstanding anything herein
to the contrary, each holder of vested Company Stock Options shall be entitled to exercise his or
her vested Company Stock Options prior to the Effective Time by tendering to Company a check in the full amount of their respective exercise price, in which case such holder shall be treated as a
holder of Company Class A Common Stock under
Section 1.5
. Buyer and the Surviving Corporation and their respective Subsidiaries shall be
entitled to deduct and withhold from the amounts otherwise payable to the holders of the Company Equity Awards pursuant to this Agreement such amounts that Buyer or the Surviving Corporation or any of
their respective Subsidiaries is required to withhold from such holders in connection with such payments under the Code or any other provision of Tax Laws. To the extent withheld and deducted, such
amounts shall be remitted by Buyer or the Surviving Corporation or any of their respective Subsidiaries to the applicable Governmental Entity on behalf of the applicable holders of the Company Equity
Awards and treated for all purposes of this Agreement as having been paid to the applicable holders of the Company Equity Awards.
1.8
Certificate of Incorporation and Bylaws of the Surviving Corporation.
At the Effective Time,
(a) the certificate of incorporation of Company shall be amended so as to read in its entirety as set forth on
Exhibit B
hereto, and, as so amended, shall be the certificate of incorporation
of the Surviving Corporation and (b) the bylaws of the
Surviving Corporation shall be amended to read in their entirety
A-5
as
the bylaws of Merger Sub immediately prior to the execution of this Agreement (provided that the name of Merger Sub shall be replaced with the name of the Surviving Corporation).
1.9
Directors of the Surviving Corporation.
Each of the parties hereto shall take all necessary
action to cause the directors of Merger Sub immediately prior to the Effective Time to be the directors of the
Surviving Corporation immediately following the Effective Time, until their respective successors are duly elected or appointed and qualified or their earlier death, resignation or removal in
accordance with the certificate of incorporation and bylaws of the Surviving Corporation. The officers of Company immediately prior to the Effective Time shall be the officers of the Surviving
Corporation until their respective successors are duly appointed and qualified or their earlier death, resignation or removal in accordance with the certificate of incorporation and bylaws of the
Surviving Corporation.
ARTICLE II
DELIVERY OF MERGER CONSIDERATION
2.1
Paying Agent; Surrender and Payment.
(a) Prior
to the Effective Time, Parent shall enter into a paying agent agreement in form and substance reasonably acceptable to Company with a paying agent designated by
Parent and reasonably acceptable to Company (the "
Paying Agent
"). At or prior to the Effective Time, Parent shall deposit, or shall cause to be
deposited by Merger Sub, with the Paying Agent, for the benefit of the holders of Old Certificates, for exchange in accordance with this
Article II
, cash in an amount sufficient to allow the Paying
Agent to pay the aggregate Merger Consideration that is payable in respect of all of
the shares of Company Class A Common Stock represented by the Old Certificates, other than Dissenting Shares and shares to be cancelled and retired pursuant to
Sections 1.5(b)
and
(d)
(such cash being hereinafter referred to as the
"
Payment Fund
"). The Paying Agent shall invest any cash included in the Payment Fund as directed by Parent, provided that no such investment or losses
thereon shall affect the amount of Merger Consideration payable to the holders of Old Certificates. Any interest and other income resulting from such investments shall be paid to Parent or the
Surviving Corporation, or as otherwise
directed by Parent. As promptly as reasonably practicable after the Effective Time, but in no event later than ten (10) calendar days thereafter, Parent shall cause the Paying Agent to
mail to each person who was, immediately prior to the Effective Time, a holder of record of one or more Old Certificates representing shares of Company Class A Common Stock at the Effective
Time (other than any shares to be cancelled and retired pursuant to
Sections 1.5(b)
and
(d)
), a
letter of transmittal and instructions (which shall specify that delivery shall be effected, and risk of loss and title to the Old Certificates shall pass, only upon proper delivery or transfer, as
applicable, of the Old Certificates to the Paying Agent) and instructions for use in effecting the surrender of the Old Certificates in exchange for the Merger Consideration (the
"
Letter of Transmittal
"). For the avoidance of doubt, no amount payable in respect of the Company Equity Awards shall be included in the Payment Fund.
(b) Each
holder of shares of Company Class A Common Stock that have been converted into the right to receive the Merger Consideration (other than the Dissenting
Shares and any shares cancelled and retired pursuant to
Sections 1.5(b)
and
(d)
) shall be
entitled to receive the Merger Consideration in respect of the shares of Company Class A Common Stock represented by an Old Certificate as promptly as reasonably practicable following
(i) surrender to the Paying Agent of an Old Certificate (or effective affidavits of loss in lieu thereof in accordance with
Section 2.1(f)
), together with a duly completed and validly executed
Letter of Transmittal and such other documents as may reasonably be
requested by the Paying Agent (or receipt of an "agent's message" by the Paying Agent (or such other evidence, if any, of transfer as the Paying Agent may reasonably request) in the case of book-entry
shares, together with such other documents as may be reasonably requested by the Paying Agent). No interest will be paid or accrued with respect to
A-6
any
property to be delivered upon surrender of Old Certificates. Until surrendered as contemplated by this
Section 2.1(b)
, each Old Certificate
shall be deemed at any time after the Effective Time to represent only the right to receive, upon surrender, the Merger Consideration.
(c) If
any portion of the Merger Consideration is to be paid to a Person other than the Person in whose name the surrendered or transferred Old Certificate, as applicable,
is registered, it shall be a condition to such payment that (i) such Old Certificate shall be properly endorsed or shall otherwise be in proper form for transfer (in the case of a book-entry
share, such Old Certificate shall be properly transferred), and (ii) the person requesting such exchange shall pay to the Paying Agent in advance any transfer or other similar Taxes required by
reason of such payment to a Person other than the registered holder of such Old Certificate, or required for any other reason, or shall establish to the satisfaction of the Paying Agent that such Tax
has been paid or is not payable.
(d) After
the Effective Time, there shall be no transfers on the stock transfer books of Company of the shares of Company Common Stock that were issued and outstanding
immediately prior to the Effective Time.
(e) Any
portion of the Payment Fund that remains unclaimed by the stockholders of Company for one (1) year after the Effective Time shall be paid to the Surviving
Corporation. Any former stockholders of Company who have not theretofore exchanged their Old Certificates pursuant to this
Article II
shall
thereafter look only to the Surviving Corporation for payment of the Merger Consideration, in each case, without any interest thereon. Notwithstanding the foregoing, none of Parent, Company, the
Surviving Corporation, the Paying Agent or any other person shall be liable to any former holder of shares of Company Common Stock for any amount delivered in good faith to a public official pursuant
to applicable abandoned property, escheat or similar Laws.
(f) In
the event any Old Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact (in a form reasonably satisfactory to Parent) by
the person claiming such Old Certificate to be lost, stolen or destroyed and, if required by Parent, the posting by such person of a bond in such amount as Parent may determine is reasonably necessary
as indemnity against any claim that may be made against it with respect to such Old Certificate, and following the Paying Agent's receipt of Letter of Transmittal required by this
Section 2.1
with
respect to the shares of Company Common Stock represented by such Old Certificate, the Paying Agent will issue in exchange for
such lost, stolen or destroyed Old Certificate the Merger Consideration.
2.2
Appraisal Rights.
Notwithstanding any provision of this Agreement to the contrary, each issued
and outstanding share of Company Common Stock the holder of which has not voted in
favor of, or otherwise consented to, the adoption of this Agreement and that is entitled to and has properly perfected his, her or its right to dissent under Section 262 of the DGCL and has not
effectively withdrawn or lost such right as of the Effective Time with respect to such shares (the "
Dissenting Shares
") shall not be converted into or
represent a right to receive the Merger Consideration hereunder, and the holder thereof shall be entitled only to receive payment of the appraised value of Dissenting Shares held by them in accordance
with the provisions of Section 262 of the DGCL, except as provided in this
Section 2.2
. Company shall give Parent prompt written notice
upon receipt by Company of any such demands for payment of the fair value of such shares of Company Common Stock, any withdrawals of such notice and any other instruments provided pursuant to
applicable Law with respect to appraisal rights (any stockholder duly making such demand being hereinafter called a "
Dissenting Stockholder
"). Company
shall not, except with the prior written consent of Parent, voluntarily make, or commit or agree to make, any payment with respect to, or settle or offer to settle, any such demand for appraisal or
payment, or waive any failure to timely deliver a written demand for appraisal or the taking of any other action by such Dissenting Stockholder as may be necessary to
A-7
perfect
appraisal rights under the DGCL. Company shall give Parent the opportunity to participate in and control all negotiations and proceedings with respect to any such demands. Any payments made in
respect of Dissenting Shares shall be made by the Surviving Corporation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF COMPANY
Except
(a) as disclosed in the corresponding sections of the disclosure schedule delivered by Company to Parent prior to the execution hereof (the
"
Company Disclosure Schedule
");
provided
, that (i) the mere inclusion of an item in the Company
Disclosure Schedule as an exception to a representation or warranty shall not be deemed an admission by Company that such item represents a material exception or fact, event or circumstance or that
such item has had or would reasonably be expected to have, either individually or in the aggregate, a Company Material Adverse Effect and (ii) any disclosures made with respect to a Section of
this
Article III
shall be deemed to qualify (A) any other Section of this
Article III
specifically referenced or cross-referenced and
(B) other sections of this
Article III
to the extent it is reasonably apparent (notwithstanding the absence of a specific cross reference) from a reading of the disclosure
on its face that such disclosure is relevant to such other sections or (b) as disclosed in any Company SEC Reports filed prior to the date hereof (but disregarding disclosures contained under
the heading "Risk Factors" or disclosures of risks set forth in any "forward-looking statements" disclaimer, or any other statements that are similarly non-specific or cautionary, predictive or
forward-looking in nature) (it being agreed that any matter disclosed in such Company SEC Reports shall not be deemed to qualify any of the Company Fundamental Representations), Company hereby
represents and warrants to Parent and Merger Sub as follows:
3.1
Corporate Organization.
(a) Company
is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware. True and complete copies of the Charter
Documents, each as in effect as of the date of this Agreement, have previously been made available by Company to Parent. Each Charter Document is in full force and effect as of the date hereof, and
Company and its Subsidiaries are not in material violation of their respective Charter Documents.
(b) Company
has the corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted, except as would
not reasonably be expected to
have, either individually or in the aggregate, a Company Material Adverse Effect. Company is duly licensed or qualified to do business in each jurisdiction in which the nature of the business
conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed or qualified
would not reasonably be expected to have, either individually or in the aggregate, a Company Material Adverse Effect.
(c) Each
Subsidiary of Company is duly organized and validly existing under the Laws of its jurisdiction of organization. Each Subsidiary of Company (i) is duly
licensed or qualified to do business and, where such concept is recognized under applicable Law, in good standing in all jurisdictions (whether federal, state, local or foreign) where its ownership or
leasing of property or the conduct of its business requires it to be so licensed or qualified, except where the failure to be so qualified or licensed or to be in good standing, would not reasonably
be expected to have, either individually or in the aggregate, a Company Material Adverse Effect, and (ii) has all requisite corporate, limited liability company or other organizational, as
applicable, power and authority to own or lease its properties and assets and to carry on its business as now conducted, except as would not reasonably be expected to have, either individually or in
the aggregate, a Company Material Adverse Effect.
A-8
(d)
Section 3.1(d)
of the Company Disclosure Schedule sets forth a true, correct and complete list of (x) all
Subsidiaries of Company, including their jurisdiction of formation and the number and type of any Equity Securities of each such Subsidiary that are outstanding (including the identity of the equity
holders and, as of the date hereof, percentages of outstanding Equity Interests owned by each such person), and (y) all outstanding subscriptions, options, warrants, puts, calls, rights,
exchangeable or convertible securities or other commitments or agreements obligating Company or any of its Subsidiaries to issue, transfer, sell, purchase, redeem or otherwise acquire any securities
of any other person for its or their own account. Other than as set forth on
Section 3.1(d)
of the Company Disclosure Schedule,
(A) neither Company, nor any of its Subsidiaries, directly or indirectly owns any Equity Interest in, or any interest convertible into or exchangeable or exercisable for, at any time, any
Equity Interest in, any person, and (B) neither Company, nor any of its Subsidiaries, has, directly or indirectly, agreed, arranged, committed or undertaken to provide a material amount of
funds to, or make any material investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other person.
3.2
Capitalization.
(a) The
authorized capital stock of Company consists of 100,000,000 shares of Company Class A Common Stock, par value $0.01 per share, 15,000,000 shares of Company
Class B Common Stock, par
value $0.01 per share, and 10,000,000 shares of preferred stock, par value $0.00 per share. As of the business day immediately prior to the date of this Agreement, no shares of capital stock or other
Equity Interests of Company are issued, reserved for issuance or outstanding, other than (i) 8,888,801 shares of Company Class A Common Stock issued and outstanding, which number
excludes 264,240 shares of Company Class A Common Stock reserved for issuance upon the settlement of outstanding Company Restricted Stock Unit Awards (of which 264,240 shares of Company
Class A Common Stock are subject to Company Restricted Stock Unit Awards subject to a specified level of performance, assuming maximum performance), (ii) 264,240 shares of Company
Class A Common Stock authorized in respect of outstanding Company Restricted Stock Unit Awards assuming maximum performance, (iii) 0 shares of Company Common Stock held in treasury,
(iv) 799,965 shares of Company Class A Common Stock reserved for issuance upon the exercise of outstanding Company Stock Options, and (v) 14,951,625 shares of Company
Class B Common Stock, all of which will be cancelled as a result of the Exchanges pursuant to the Exchange Agreements. There are no dividend equivalents accrued or unpaid on the Company Equity
Awards as of the date of this Agreement. Company has not issued any Equity Interests of Company since the business day immediately prior to the date of this Agreement through the date hereof and, as
of the date hereof, none of Company's shares of preferred stock, par value $0.00 per share, are issued or outstanding. All the issued and outstanding shares of Company Common Stock have been duly
authorized and validly issued, issued in compliance with applicable Law and are fully paid, nonassessable and not subject to, or issued in violation of, any preemptive or similar contractual rights.
No bonds, debentures, notes or other Indebtedness that have the right to vote on any matters on which stockholders of Company may vote are issued or outstanding (or which is convertible into or
exchangeable for, Equity Interests having such rights). Other than the Company Equity Awards, the LLC Units and the LLC Options, in each case, issued prior to the date of this Agreement,
there are not outstanding any options, warrants, convertible securities, subscription rights, conversion rights, exchange rights, phantom stock or units, restricted equity, equity appreciation rights,
puts, calls, redemptions, repurchase or other rights or agreements, arrangements or commitment of any kind that obligate Company or any Subsidiary thereof to issue, transfer dispose of, redeem,
repurchase, acquire or sell any Equity Interests, or make payments based on the value of any Company Common Stock.
(b) Except
for the Support Agreement, the Exchange Agreements, the Second Amended and Restated Limited Liability Company Agreement of Holdings, dated as of
November 26, 2014 (the "
LLC Agreement
"), by and among Holdings, Wayzata Opportunities Fund II, L.P., Wayzata
A-9
Opportunities
Fund Offshore II, L.P. and Company, and the Tax Receivable Agreement, dated November 26, 2014, by and among Company, Wayzata Opportunities Fund II, L.P., Wayzata
Opportunities Fund Offshore II, L.P., the several holders of LLC Options, the Management Representative and other members of Holdings from time to time a party thereto (the
"
TRA
"), there are no voting trusts, stockholder agreements, proxies or other agreements in effect pursuant to which Company or any of its Subsidiaries
has a contractual or other obligation with respect to the voting or
transfer of the Company Common Stock, any other Equity Interests of Company or any Company Subsidiary Securities. There are no outstanding Contracts or obligations requiring Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any shares of Company Common Stock, other Equity Interests of Company or any Company Subsidiary Securities, except in connection with the
vesting or exercise of a Company Equity Award.
(c)
Section 3.2(c)
of the Company Disclosure Schedule sets forth a true, correct and complete list of all Company
Equity Awards and LLC Options outstanding as of the date hereof specifying, on a holder-by-holder basis, (i) the name of each holder, (ii) the number of shares or LLC Units
subject to each such Company Equity Award or LLC Option, as applicable, (iii) the grant date of each such Company Equity Award or LLC Option, as applicable, (iv) the plan
under which each such Company Equity Award or LLC Option, as applicable, was granted, (v) the exercise price for each LLC Option and each such Company Equity Award that is a
Company Stock Option, (vi) the vesting schedule applicable to each such LLC Option and Company Equity Award (including whether the vesting will be accelerated by the execution of this
Agreement or the consummation of the Merger), and (vii) the expiration date of each LLC Option and each such Company Equity Award that is a Company Stock Option. Each Company Option is
exempt from the requirements of Code Section 409A.
(d) As
of the date hereof, there are 23,840,426 LLC Units outstanding, which number excludes 757,937 LLC Options. 14,951,625 LLC Units are exchangeable
on a one-to-one basis for shares of Company Class A Common Stock in accordance with and subject to the terms of the LLC Agreement. Except as set forth on
Section 3.2(d)
of the Company
Disclosure Schedule, there are not outstanding (i) any other Equity Interests of any Subsidiary of Company,
(ii) securities of any Subsidiary of Company that are convertible into or exchangeable for, at any time, Equity Interests of any Subsidiary of Company, (iii) any options, warrants,
convertible securities, subscription rights, conversion rights, exchange rights, phantom stock or units, restricted equity, equity appreciation rights, puts, calls, redemptions, repurchase or other
rights or agreements, arrangements or commitment of any kind that obligate any Subsidiary of Company to issue, transfer dispose of, redeem, repurchase, acquire or sell, or make payments based on the
value of, any other Equity Interests of any Subsidiary of Company or (iv) any obligations of any Subsidiary of Company to issue, any Equity Interests or securities convertible into or
exchangeable for Equity Interests of any Subsidiary of Company (the items in clauses (i) through (iv), together with the outstanding Equity Interests of such Subsidiaries, being referred to
collectively as "
Company Subsidiary Securities
"). Except as set forth on
Section 3.2(d)
of the
Company Disclosure Schedule, Company owns, directly or indirectly, all the issued and outstanding Company Subsidiary Securities free and clear of any Liens, and all such Company Subsidiary Securities
are duly authorized and validly issued and are fully paid, nonassessable and not subject to, or issued in violation of, any preemptive or similar contractual rights. Except as set forth on
Section 3.2(d)
of the Company Disclosure Schedule, no Subsidiary of Company has or is bound by any outstanding subscriptions, options, warrants,
calls, rights, commitments or agreements of any character calling for the purchase or issuance of any Company Subsidiary Securities or any securities representing the right to purchase or otherwise
receive any Company Subsidiary Securities. No bonds, debentures, notes or other Indebtedness that have the right to vote on any matters on which holders of Company Subsidiary Securities may vote are
issued or outstanding (or which is convertible into or exchangeable for, Company Subsidiary Securities having such rights).
A-10
(e) Except
as set forth on
Section 3.2(e)
of the Company Disclosure Schedules, as of the date hereof, none of Company
or any of its Subsidiaries has any Indebtedness. Company and its Subsidiaries have not made any payments in connection with or pursuant to the TRA or, in the past twelve (12) months,
the LLC Agreement.
(f) Company
does not have a "poison pill" or similar stockholder rights plan that is in effect.
3.3
Authority; No Violation
.
(a) Company
has full corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the consummation of the Merger has, upon the unanimous recommendation of the Special Committee, been duly and validly approved by
unanimous vote of the Company Board, not subsequently rescinded or modified in any way as of the date hereof. The Company Board has determined that the Merger, on the terms and conditions set forth in
this Agreement, is in the best interests of Company and its stockholders, and has resolved, subject to
Section 6.8
, to recommend adoption of this
Agreement to Company's stockholders and has adopted a resolution to the foregoing effect. Except for the adoption of this Agreement by the affirmative vote or consent of the holders of a majority of
the outstanding shares of Company Common Stock (if and to the extent required by applicable Law and the Amended and Restated Certificate of Incorporation of Company, as amended (the
"
Company Certificate
")) (the "
Requisite Company Vote
") and the filing and recordation of appropriate
merger documents as required by the DGCL, no other corporate proceedings on the part of Company are necessary to approve this Agreement or to consummate the transactions contemplated hereby (including
the Merger) and perform Company's obligations
hereunder. This Agreement has been duly and validly executed and delivered by Company and (assuming due authorization, execution and delivery by Parent and Merger Sub) constitutes a valid and binding
obligation of Company, enforceable against Company in accordance with its terms (except in all cases as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, moratorium,
reorganization or similar Laws of general applicability relating to or affecting the rights of creditors generally and subject to general principles of equity (the
"
Enforceability Exceptions
")).
(b) Except
as set forth on
Section 3.3(b)
of the Company Disclosure Schedules, neither the execution and delivery of
this Agreement and the other Transaction Documents to which Company or any of its Subsidiaries is a party by Company or its Subsidiaries, as applicable, nor the consummation by Company or its
Subsidiaries of the transactions contemplated hereby or thereby, nor compliance by Company or its Subsidiaries with any of the terms or provisions hereof or thereof, will (i) violate any
provision of the Charter Documents or (ii) assuming that the Requisite Company Vote is obtained and that the consents, approvals and filings referred to in
Section 3.4(a)
through
(c)
are duly obtained and/or made, (A) violate any Law
applicable to Company or any of its Subsidiaries or any of their respective properties or assets or (B) violate, conflict with, result in a breach of any provision of or the loss of any benefit
under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of termination or cancellation under,
accelerate the performance required by, or result in the creation of any Lien upon any of the respective properties or assets of Company or any of its Subsidiaries under, any of the terms, conditions
or provisions of any Contract to which Company or any of its Subsidiaries is a party, or by which they or any of their respective properties or assets may be bound, except (in the case of this
clause (ii)
) for such violations, conflicts, breaches, defaults, terminations, cancellations, accelerations or creations which would not
reasonably be expected to have, either individually or in the aggregate, a Company Material Adverse Effect.
A-11
3.4
Consents and Approvals
.
Except for (a) the filing with the SEC of an information statement of the type contemplated by Rule 14c-2 under the Exchange Act related to the Merger and this Agreement
(such information statement, including any amendment or supplement thereto, the "
Information Statement
") and other filings required under, and in
compliance with other applicable requirements of, the Securities Act, the Exchange Act, and the rules of Nasdaq, (b) the filing of the Certificate of Merger with the Delaware Secretary pursuant
to the DGCL, (c) the pre-merger notification requirements under the HSR Act, (the requirements in clauses (a) through (c), collectively, the "
Governmental
Requirements
") and (d) where the failure to obtain such approval or consent would not reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect, no consents, approvals, waivers or authorizations of or filings or registrations with or notices to any Governmental Entity are necessary in connection with (A) the
execution and delivery by Company of this Agreement or any other Transaction Documents to which Company is a party or (B) the consummation by Company of the Merger and the other transactions
contemplated hereby or the Transaction Documents.
3.5
SEC Reports
.
Company has timely filed with or furnished to, as applicable, the SEC all registration statements, prospectuses, reports, schedules, forms, definitive proxy statements and other
documents (including exhibits and all other information incorporated by reference) required to be filed with or furnished to the SEC by Company or any of its Subsidiaries pursuant to the Securities
Act or the Exchange Act, as the case may be, since January 1, 2015 (the "
Company SEC Reports
"). The Company SEC Reports are publicly available
(including via the SEC's EDGAR filing system). Except to the extent corrected by subsequent Company SEC Reports, no Company SEC Report, at the time filed, furnished or communicated (and, in the case
of registration statements and proxy statements, on the dates of effectiveness and the dates of the relevant meetings, respectively), contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances in which they were made, not misleading, except that
information filed or furnished as of a later date (but before the date of this Agreement and only to the extent publicly available) shall be deemed to modify information as of an earlier date. As of
their respective dates, all Company SEC Reports filed or furnished under the Securities Act and the Exchange Act complied as to form in all material respects with the published rules and regulations
of the SEC with respect thereto. As of the date of this Agreement, no executive officer of Company has failed in any respect to make the certifications required of him or her under Section 302
or 906 of the Sarbanes-Oxley Act of 2002 (including the rules and regulations promulgated thereunder, the "
Sarbanes-Oxley Act
"). As of the date of this
Agreement, there are no outstanding comments from or material unresolved issues raised by the SEC with respect to any of the Company SEC Reports and, to Company's knowledge, none of the Company SEC
Reports is the subject of ongoing SEC review or outstanding SEC investigation. None of Company's Subsidiaries is required to file or furnish as an issuer any forms, reports or other documents with the
SEC pursuant to the reporting requirements of Section 13(a) or Section 15(d) of the Exchange Act.
3.6
Financial Statements
.
(a) The
financial statements of Company and its Subsidiaries included (or incorporated by reference) in the Company SEC Reports (including the related notes, where
applicable) and, upon and following delivery, the Supplemental Financial Statements (i) have been prepared from, and are in accordance with, the books and records of Company and its
Subsidiaries, (ii) fairly present in all material respects the consolidated statements of operations, cash flows, changes in stockholders' deficit and consolidated financial position of Company
and its Subsidiaries for the respective fiscal periods or as of the respective dates therein set forth (subject in the case of unaudited statements to the absence of footnotes and to normal year-end
audit adjustments normal in nature and amount and as permitted by GAAP and the applicable rules and regulations of the SEC), (iii) complied, as of their respective dates of filing with the SEC,
in all material
A-12
respects
with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto or, in the case of unaudited statements, as permitted by Form 10-Q
under the Exchange Act, and (iv) have been prepared in accordance with GAAP consistently applied during the periods involved, except, in each case, as indicated in such statements or in the
notes thereto. The books and records of Company and its Subsidiaries have been, since January 1, 2015, and are being, maintained in all material respects in accordance with GAAP and any other
applicable legal and accounting requirements. Deloitte & Touche LLP has not resigned (or informed Company that it intends to resign) or been dismissed as independent public accountants
of Company as a result of or in connection with any disagreements with Company on a matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure.
(b) Except
as would not reasonably be expected to have, either individually or in the aggregate, a Company Material Adverse Effect, neither Company nor any of its
Subsidiaries has any liability of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether due or to become due) that is of a nature required to be reflected on its
consolidated balance sheets prepared in accordance with GAAP, except for (i) those liabilities that are reflected or reserved against on the consolidated balance sheet of Company included in
its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2017 (including any notes thereto), (ii) liabilities incurred in the ordinary course of business
consistent with past practice since March 31, 2017 or in connection with this Agreement and the transactions contemplated hereby, or (iii) as set forth on
Section 3.6(b)
of the Company
Disclosure Schedule. Except as disclosed in the Company SEC Reports, none of Company or any of its Subsidiaries
maintains any "off-balance-sheet arrangement" within the meaning of Item 303 of Regulation S-K of the Securities Act.
(c) Except
as set forth on
Section 3.6(c)
of the Company Disclosure Schedule, the records, systems, controls, data and
information of Company and its Subsidiaries are recorded, stored, maintained and operated under means (including any electronic, mechanical or photographic process, whether computerized or not) that
are under the exclusive ownership and direct control of Company or its Subsidiaries or accountants (including all means of access thereto and therefrom), except for any non-exclusive ownership and
non-direct control that would not reasonably be expected to have, either individually or in the aggregate, a Company Material Adverse Effect. Company (i) maintains a system of disclosure
controls and procedures (as such term is defined in paragraph (e) of Rule 13a-15 promulgated under the Exchange Act) as required by Rule 13a-15 promulgated under the Exchange Act,
and (ii) has disclosed, based on its most recent evaluation of its chief executive officer and chief financial officer prior to the date hereof, to Company's outside auditors and the audit
committee of Company Board (x) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting (as defined in Rule 13a-15(f)
of the Exchange Act) which are reasonably likely to adversely affect in any material respect Company's ability to record, process, summarize and report financial information, and (y) to the
knowledge of Company, any fraud, whether or not material, that involves management or other employees who have a significant role in Company's internal controls
over financial reporting. Copies of any such disclosures were made in writing by management to Company's auditors and audit committee and a copy has been previously made available to Parent.
(d) Since
January 1, 2014, (i) neither Company nor any of its Subsidiaries, nor, to the knowledge of Company, any director, officer, auditor, accountant or
representative of Company or any of its Subsidiaries, has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or, to the
knowledge of Company, oral, regarding the accounting or auditing practices, procedures, methodologies or methods (including with respect to loan loss reserves, write-downs, charge-offs and accruals)
of Company or any of its Subsidiaries or their respective internal accounting controls, including any material complaint,
A-13
allegation,
assertion or written claim that Company or any of its Subsidiaries has engaged in questionable accounting or auditing practices, and (ii) no attorney representing Company or any of
its Subsidiaries, whether or not employed by Company or any of its Subsidiaries, has reported evidence of a material violation of securities Laws, breach of fiduciary duty or similar violation by
Company or any of its officers, directors or employees to the Company Board or any committee thereof or to the knowledge of Company, to any director or officer of Company.
(e) Each
of the principal executive officer and the principal financial officer of Company (or each former principal executive officer and each former principal financial
officer of Company, as applicable) has made all certifications required by Rule 13a-14 or 15d-14 under the Exchange Act and Sections 302 and 906 of the Sarbanes-Oxley Act with respect to
the Company SEC Documents. For purposes of this Agreement, "principal executive officer" and "principal financial officer" shall have the meanings given to such terms in the Sarbanes-Oxley Act. Since
January 1, 2014, neither Company nor any of its Subsidiaries has outstanding (nor has arranged or modified since the enactment of the Sarbanes-Oxley Act) any "extensions of credit" (within the
meaning of Section 402 of the Sarbanes-Oxley Act) (excluding reimbursable ordinary business expenses) to directors or executive officers (as defined in Rule 3b-7 under the Exchange Act)
of Company or any of its Subsidiaries. Company is otherwise in compliance with all applicable provisions of the Sarbanes-Oxley Act and the applicable listing and corporate governance rules of NYSE,
except for any non-compliance that would not reasonably be expected to have, either individually or in the aggregate, a Company Material Adverse Effect.
3.7
Broker's Fees
.
None of Company, any of its Subsidiaries nor any of their respective affiliates, officers or directors has employed any broker, finder, financial advisor or other similar person, or
incurred any liability for any broker's fees, commissions or finder's fees in connection with the Merger or the other transactions contemplated by this Agreement and the Transaction Documents, other
than with respect to Deutsche Bank Securities Inc. (the "
Special Committee Financial Advisor
"). Company has disclosed to Parent the fee terms
provided for in connection with its engagement of the Special Committee Financial Advisor and made available to Parent a true and correct copy of Company's engagement letter with the Special Committee
Financial Advisor (with reasonable and customary redactions thereto).
3.8
Absence of Certain Changes or Events
.
Since December 31, 2016 through the date of this Agreement, (a) Company and its Subsidiaries have conducted their businesses in all material respects in the ordinary course
of business consistent with past practice, (b) no event or events have occurred that have had or would reasonably be expected to have, either individually or in the aggregate, a Company
Material Adverse Effect, and (c) neither Company nor any of its Subsidiaries have taken any action that if taken after the date of this Agreement would constitute a violation
of
Section 5.2
.
3.9
Legal and Regulatory Proceedings
.
(a) As
of the date hereof, except as is not, or would not reasonably be expected to be, either individually or in the aggregate, material to Company and its Subsidiaries,
taken as a whole, there is no Action pending, or, to Company's knowledge, threatened against or involving Company or any of its Subsidiaries, any of their respective properties or assets or any of the
current or former directors or executive officers of Company or any of its Subsidiaries (and to Company's knowledge, there is no basis for any such Action). There is not currently any internal
investigation or inquiry being conducted by Company, the Company Board (or any committee thereof) or, to Company's knowledge, any third party or Governmental Entity at the request of any of the
foregoing concerning any financial, accounting, Tax, conflict of interest, self-dealing, fraudulent or deceptive conduct or other misfeasance or malfeasance issues, in each case that has or would
reasonably be expected to have, either individually or in the aggregate, a Company Material Adverse Effect.
A-14
(b) As
of the date hereof, except as would not reasonably be expected to be, either individually or in the aggregate, material to Company and its Subsidiaries, taken as a
whole, there is no injunction, order, judgment, decree, assessment, decision, ruling or regulatory restriction (each, an "
Order
"), whether
temporary, preliminary or permanent, imposed upon Company or any of its Subsidiaries or the assets or properties of Company or any of its Subsidiaries (or that, upon consummation of the Merger, would
apply to Parent, Surviving Corporation or any of their respective affiliates).
3.10
Taxes and Tax Returns
. (a) Each of Company and its Subsidiaries has duly and timely filed (taking into
account all applicable extensions) all material Tax Returns in all jurisdictions in which Tax Returns are required to be filed by it, and all such Tax Returns are true, correct, and complete in all
material respects; (b) all material Taxes of Company and its Subsidiaries (whether or not shown on any Tax Returns) that are due have been fully and timely paid; (c) neither Company nor
any of its Subsidiaries has granted any extension or waiver of the limitation period applicable to any material Tax that remains in effect; (d) no deficiency with respect to a material amount
of Taxes has been proposed, asserted or assessed against Company or any of its Subsidiaries; (e) neither Company nor any of its Subsidiaries (i) has been a member of an affiliated group
filing a consolidated federal income Tax Return (other than a group the common parent of which was Company) or (ii) has any liability for the Taxes of any person (other than Company or any of
its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign Law), as a transferee or successor, by contract or otherwise;
(f) neither Company nor any of its Subsidiaries has been, within the past two (2) years or otherwise as part of a "plan (or series of related transactions)" within the meaning of
Section 355(e) of the Code of which the Merger is also a part, a "distributing corporation" or a "controlled corporation" (within the meaning of Section 355(a)(1)(A) of the Code) in a
distribution of stock intended to qualify for tax-free treatment under Section 355 of the Code; (g) neither Company nor any of its Subsidiaries has participated in a "listed transaction"
within the meaning of Treasury Regulations Section 1.6011-4(b)(2); and (h) Holdings is treated as a partnership for U.S. federal income tax purposes and each Subsidiary of Holdings is a
disregarded entity for U.S. federal income tax purposes.
3.11
Employees
.
(a)
Section 3.11(a)
of the Company Disclosure Schedule lists all Company Benefit Plans.
(b) Company
has provided, or made available, to Parent with respect to each Company Benefit Plan, to the extent applicable, true and complete copies of (i) each
Company Benefit Plan and all amendments thereto (and in the case of an unwritten Company Benefit Plan, a written description thereof), (ii) the current trust documents, investment management
contracts, custodial agreements, administrative services agreements and insurance and annuity contracts relating thereto, (iii) the current summary plan description and each summary of material
modifications thereto, (iv) the most recent IRS Form 5500 and all schedules thereto, (v) the most recent IRS determination, opinion or advisory letter, (vi) the most recent
summary annual report, nondiscrimination testing report, actuarial report, financial statements and trustee reports, and (vii) all communications from any Governmental Entity concerning any
audit or investigation of such Company Benefit Plan by a Governmental Entity.
(c) Each
Company Benefit Plan has been established, operated, maintained and administered in all material respects in accordance with its terms and the requirements of all
applicable Laws, including ERISA and the Code. Neither Company nor any of its Subsidiaries has any knowledge of any plan defect that remains uncorrected.
(d) None
of Company and its Subsidiaries nor any Company ERISA Affiliate has, at any time during the last six (6) years, (i) contributed to or been obligated
to contribute to any plan that (A) is subject to Title IV or Section 302 of ERISA or Section 412 of the Code, (B) is a
A-15
"multiemployer
plan" within the meaning of Section 4001(a)(3) of ERISA (a "
Multiemployer Plan
") or (C) has two (2) or more
contributing sponsors at least two (2) of whom are not under common control, within the meaning of Section 4063 of ERISA (a "
Multiple Employer
Plan
"), or (ii) incurred any liability to a Multiemployer Plan or Multiple Employer Plan as a result of a complete or partial withdrawal (as those terms are defined in
Part I of Subtitle E of Title IV of ERISA) from a Multiemployer Plan or Multiple Employer Plan that has not been satisfied in full.
(e) Neither
Company, nor any of its Subsidiaries sponsors, has sponsored or has any obligation with respect to any employee benefit plan that provides for any
post-employment or post-retirement health or medical or life insurance benefits for retired or former employees or beneficiaries or dependents thereof, except pursuant to Section 4980B of the
Code.
(f) Except
as would not result in a material liability to Company or any of its Subsidiaries, all contributions required to be made to any Company Benefit Plan by applicable
Law or by any plan document or other contractual undertaking, and all premiums due or payable with respect to insurance policies funding any Company Benefit Plan, for any period in the prior three
(3) years through the date hereof, have been timely made or paid in full or, to the extent not required to be made or paid on or before the date hereof, have been fully reflected on the books
and records of Company.
(g) Except
as would not reasonably be likely to result, either individually or in the aggregate, in material liability to Company or any of its Subsidiaries, there are no
pending or, to Company's knowledge, threatened claims (other than routine individual claims for benefits in the ordinary course), lawsuits or arbitrations that have been asserted or instituted, and,
to Company's knowledge, no set of circumstances exists that may reasonably be likely to give rise to a claim or lawsuit against, any of the
Company Benefit Plans, any fiduciaries thereof with respect to their duties to the Company Benefit Plans or the assets of any of the trusts under any of the Company Benefit Plans.
(h) Except
as set forth on
Section 3.11(h)
of the Company Disclosure Schedules, neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby will (either alone or in conjunction with any other event) result in, cause an acceleration of the funding, vesting,
exercisability, or delivery of, or increase in the amount or value of, any payment, right or other benefit to any current or former employee, officer, director or independent contractor of Company or
any of its Subsidiaries under any Company Benefit Plan, or result in any limitation on the right of Company or any of its Subsidiaries to amend, merge, terminate or receive a reversion of assets from
any Company Benefit Plan or related trust.
(i) Except
as set forth on
Section 3.11(i)
of the Company Disclosure Schedules, no payment or benefit (whether in
cash, in property, acceleration of vesting or in the form of benefits) by Company or any of its Subsidiaries that is "contingent" (within the meaning of Code Section 280G) on the transactions
contemplated hereby will be an "excess parachute payment" within the meaning of Section 280G of the Code. Neither Company nor any of its Subsidiaries maintains, contributes to or is required to
contribute to, a rabbi trust or similar funding vehicle, and the transactions contemplated by this Agreement will not cause or require Company or any of its affiliates to establish or make any
contribution to a rabbi trust or similar funding vehicle. Neither Company nor any of its Subsidiaries has any obligation to indemnify any person for any Taxes pursuant to Code Sections 409A or
4999.
(j) Except
as would not reasonably be expected to have, either individually or in the aggregate, a Company Material Adverse Effect, there are no pending or, to Company's
knowledge, threatened labor grievances, labor arbitrations or unfair labor practice claims or charges against Company or any of its Subsidiaries. There are no, and have not been since
January 1, 2014, any pending or, to Company's knowledge, threatened strikes, lockouts, work stoppages, slowdowns,
A-16
union
election petitions, demands for recognition, or other labor disputes against Company or any of its Subsidiaries. Neither Company nor any of its Subsidiaries are party to or bound by any
collective bargaining or similar agreement with any labor organization, or work rules or practices agreed to with any labor organization applicable to employees of Company or any of its Subsidiaries
and, to Company's knowledge, there are no organizing efforts by any labor organization seeking to represent any employees of Company or any of its Subsidiaries.
(k) Except
as would not reasonably be expected to have, either individually or in the aggregate, a Company Material Adverse Effect, Company and each of its Subsidiaries are
in compliance, and have at all times since January 1, 2014 complied, in all respects with all Laws applicable to Company or any of its Subsidiaries relating to labor, employment, and employment
practices, including all Laws and provisions thereof relating to wages, hours, equal employment opportunities, employment discrimination and retaliation, harassment, hiring, firing, promotion,
employee benefits, immigration, plant closures or mass layoffs, leaves of absence, occupational safety and health, workers' compensation and unemployment insurance, and collective bargaining. Except
as would not result in a material liability to Company or any of its Subsidiaries, with respect to each individual who renders services to Company or any of its Subsidiaries, Company and each of its
Subsidiaries have accurately classified each such individual as an employee, independent contractor, or otherwise under all applicable Laws and for each individual classified as an employee, Company
and each of its Subsidiaries have classified him or her as overtime exempt or overtime nonexempt under all applicable Laws.
(l) Neither
Company nor any of its Subsidiaries has ordered or implemented a plant closing or mass layoff within the meaning of, or taken any other action that required
notice under, the Worker Adjustment and Retraining Notification Act or any similar Law since January 1, 2014.
3.12
Compliance with Applicable Law
.
(a) Except
as would not reasonably be expected to have, either individually or in the aggregate, a Company Material Adverse Effect, Company and each of its Subsidiaries
hold, and have at all times since January 1, 2014 held, all licenses, franchises, permits, approvals and authorizations necessary for the lawful conduct of their respective businesses and
ownership of their respective properties, rights and assets (the "
Permits
"), and no suspension or cancellation of any such Permit is pending or, to
Company's knowledge, threatened. Company and its Subsidiaries are in compliance with the terms of all such Permits, except for such failures to be in compliance that have not had and would not
reasonably be expected to have, either individually or in the aggregate, a Company Material Adverse Effect.
(b) Except
as would not reasonably be expected to have, either individually or in the aggregate, a Company Material Adverse Effect, (i) Company and each of its
Subsidiaries are in compliance, and have at all times since January 1, 2014 complied, in all respects with all Laws and Orders applicable to Company or any of its Subsidiaries or by which
Company or any of its Subsidiaries or any of their respective businesses or properties is bound and (ii) since January 1, 2014, no Governmental Entity has issued any written notice or
notification stating that Company or any of its Subsidiaries is not in compliance with any Law or Order. Since January 1, 2012, none of the Company, any of its Subsidiaries or any of their
respective officers, directors, or to the Company's knowledge, agents (in their capacity as such) is or has been in violation of any Law applicable to its properties, rights or other assets or its
businesses or operations relating to (A) the use of corporate funds for political activity or for the purpose of obtaining or retaining business, (B) payments to government officials
from corporate funds, or (C) bribes, rebates, payoffs, influence payments, kickbacks or the provision of similar benefits.
A-17
3.13
Certain Contracts.
Except
for this Agreement,
Section 3.13
of the Company Disclosure Schedule sets forth, as of the date of this Agreement, each
Contract (except for purchase orders executed in the normal course of business in each case in an amount less than $150,000), to which Company or any of its Subsidiaries is a party or is otherwise
bound, of the type described below (the "
Company Contracts
"):
(a) (i)
for the purchase by Company or any of its Subsidiaries of rental fleet equipment in an amount in excess of $500,000 per year per agreement or (ii) that
require Company or any of its Subsidiaries to purchase all or any part of its rental fleet equipment from any one or more suppliers;
(b) relating
to employment and consulting or severance, in each case that involve an aggregate future or potential liability in excess of $500,000 per agreement;
(c) which
is a material agreement relating to the licensing or transfer of Intellectual Property rights by Company or any of its Subsidiaries to a third party or by a third
party to Company or any of its Subsidiaries (other than licenses for Off-The-Shelf Software) (each, a "
Company IP Contract
"and collectively, the
"
Company IP Contracts
");
(d) which
limit the freedom of Company or any of its Subsidiaries (or, after giving effect to the Merger, Parent and/or its Subsidiaries) to compete in any line of business,
channel of distribution or within any geographic area or with any person, or otherwise limit the ability of Company, its Subsidiaries or any of their respective affiliates to solicit or sell any
product or other assets to any person (other than customary confidentiality and nondisclosure obligations);
(e) which
contains any "most favored nation" or exclusivity terms, including such terms for pricing;
(f) relating
to mortgages, indentures, notes, bonds, credit agreements, loan agreements, security agreements, guarantees or other agreements relating to Indebtedness
incurred or provided by Company or any of its Subsidiaries (including capital leases and any caps, swaps, collars or similar derivative transactions) in an aggregate amount of $500,000 or more (with
the amount of Indebtedness in respect of any derivative transaction being the amount of net payments that Company or any of its Subsidiaries have to make in the event of an early termination on the
date Indebtedness of such person is being determined);
(g) which
is a partnership agreement, joint venture agreement or similar agreement relating to Company and its Subsidiaries;
(h) with
customers that provide for receipt by Company or any of its Subsidiaries of more than $500,000 per year per contract or agreement;
(i) which
requires or is in respect of any unpaid capital commitment or capital expenditure (or series of capital expenditures) by Company or any of its Subsidiaries in an
amount in excess of $500,000 individually or $2,500,000 in the aggregate;
(j) which
restricts payment of dividends or distributions in respect of the capital stock or Equity Interests of Company or any of its Subsidiaries;
(k) under
which Company and its Subsidiaries are obligated to make or are expected to receive payments in the future in excess of $500,000 in any annual period or $2,000,000
during the life of the Contract (in each case, other than under Company Benefit Plans or other than Contracts between Company and any of its Subsidiaries or between any of Company's Subsidiaries);
(l) that
is a Lease;
A-18
(m) which
(i) relates to any material acquisitions and sales of businesses made by Company or any of its Subsidiaries within the five (5) year period prior to
the date of this Agreement or otherwise relates to the acquisition or disposition, directly or indirectly, of assets or Equity Interests (by merger, capital contribution or otherwise) of any person
for aggregate consideration in excess of $3,000,000 or pursuant to which Company or any of its Subsidiaries has continuing "earn out" or other contingent obligations after the date of this Agreement;
(ii) gives any person the right to acquire any material assets of Company or its Subsidiaries after the date of this Agreement other than in the ordinary course of business consistent with past
practice; or (iii) contains a put, call, right of first refusal or similar right pursuant to which Company or any of its Subsidiaries could be required to purchase or sell, as applicable, any
of the foregoing; and
(n) any
other Contract which constitutes a "material contract" as such term is defined in Item 601(b)(10) of Regulation S-K of the Securities Act, whether or
not filed by Company with the SEC (other than a Company Benefit Plan).
Neither
Company nor any of its Subsidiaries is in, or has received written notice of any, material violation or material breach of a Company Contract, and, to Company's knowledge, no
other party to a Company Contract is in material violation or material breach of a Company Contract. Neither Company nor any of its Subsidiaries has received written notice of termination of any
Company Contract and no party to any Company Contract has provided written notice to the Company or any of its Subsidiaries exercising or threatening to exercise any termination rights with respect
thereto or of any dispute with respect to any Company Contract.
Section 3.13(a)
of the Company Disclosure Schedule sets forth (x) a true,
correct and complete list of all material acquisitions and sales of businesses made by Company or any of its Subsidiaries within the five (5) year period prior to the date of this Agreement and
(y) a true, correct and complete list of any continuing earn-out obligations arising out of the acquisitions referred to in clause (x). In each case, except as would not reasonably be
expected to have, either individually or in the aggregate, a Company Material Adverse Effect: (i) each Company Contract is valid and binding on Company or one of its Subsidiaries, as
applicable, and to Company's knowledge, each other party thereto; (ii) each Company Contract is in full force and effect and enforceable against Company or one of its Subsidiaries, as
applicable, and each other party thereto in accordance with its terms (except in all cases as such enforceability may be limited by the Enforceability Exceptions); (iii) Company and each of its
Subsidiaries has performed all obligations required to be performed by it prior to the date hereof under each Company Contract, (iv) to Company's knowledge, each third-party counterparty to
each Company Contract has performed all obligations required to be performed by it to date under such Company Contract, and (v) no event or condition exists which constitutes or, after notice
or lapse of time or both, will constitute, a default on the part of Company or any of its Subsidiaries under any such Company Contract. True and complete copies of each Company Contract have been made
available to Parent.
3.14
Environmental Matters.
Except as would not reasonably be expected to have, either individually or in the
aggregate, a Company Material Adverse Effect: (a) Company and its Subsidiaries are in compliance, and have at all times since January 1, 2014 complied, with all Laws relating to public
health and safety, worker health and safety related to exposure to hazardous substances, or pollution or protection of the environment or natural resources, including those relating to the presence,
use, handling, generation, transportation, labeling, storage, disposal, discharge, Release, control, or cleanup of Hazardous Materials (collectively, "
Environmental
Laws
"), which compliance includes, without limitation, obtaining, maintaining and complying with all permits, licenses, certifications, registrations and other authorizations
required by Environmental Laws to conduct their respective businesses and own their respective properties, rights and assets; (b) neither Company nor any of its Subsidiaries has received any
written notice, claim or report regarding any actual or alleged violation of Environmental Laws by Company or any of its Subsidiaries or any actual or alleged liabilities of Company or any of its
Subsidiaries arising under Environmental Laws, in both cases which
A-19
remain
unresolved, and there are no Actions pending seeking to impose on Company or any of its Subsidiaries any liability or obligation arising under Environmental Law; (c) Company and its
Subsidiaries are not subject to any agreement, order, judgment, or decree by or with any Governmental Entity or third party imposing any material liability or obligation with respect to any
Environmental Law; (d) there has been no Release of, or exposure of any person to, Hazardous Materials by Company, any of its Subsidiaries, or, to the knowledge of Company, any other person at
any real property currently or formerly owned, leased or operated by Company or any of its Subsidiaries which could reasonably be expected to result in Company or any of its Subsidiaries incurring any
liability or obligation pursuant to Environmental Law; (e) except for contingent liabilities incurred in the ordinary course of business, neither Company nor any of its Subsidiaries has assumed
by contract (including indemnity agreement) or operation of law the liability of another person under Environmental Law; and (f) Company has provided to Parent all environmental reports,
audits, permits, claim notices and other documents in the possession or control of Company or any of its Subsidiaries that are material to a reasonable understanding of the liabilities and obligations
of Company pursuant to Environmental Law.
3.15
Properties.
(a)
Section 3.15(a)
of the Company Disclosure Schedule sets forth a true, correct and complete list of physical
addresses for all real estate owned by Company or any of its Subsidiaries (together with all buildings, structures, fixtures and improvements thereon and all of Company's and its Subsidiaries' rights
thereto) (the "
Company Owned Properties
"). Such Company Owned Properties are owned by Company or its applicable Subsidiaries free and clear of all
Liens, except (i) statutory Liens securing payments not yet due, (ii) Liens for real property Taxes not yet due and payable, (iii) easements, rights
of way, and other similar encumbrances or restrictions that do not materially and adversely affect the use of the properties or assets subject thereto or affected thereby or otherwise materially
impair business operations at such properties, (iv) inchoate mechanics' and materialmen's Liens for construction or other work in progress or which relate to amounts not yet due and payable,
(v) workmen's, repairmen's, warehousemen's and carriers' Liens arising in the ordinary course of business consistent with past practice, (vi) such imperfections or irregularities of
title or Liens as do not materially affect the use of the properties or assets subject thereto or affected thereby or otherwise materially impair business operations at such properties and
(vii) all matters that would be disclosed by a current and accurate survey of such properties (clauses (i) through (vii), collectively, "
Permitted
Encumbrances
"), in each case except as would not reasonably be expected to have, either individually or in the aggregate, a Company Material Adverse Effect. Other than the
Company Owned Properties, neither Company nor any of its Subsidiaries owns any real property.
(b)
Section 3.15(b)
of the Company Disclosure Schedule sets forth a true, correct and complete list of physical
addresses for real property (the "
Company Leased Properties
" and, collectively with the Company Owned Properties, the "
Company
Real Property
") that Company or any of its Subsidiaries leases, subleases or otherwise uses or occupies, or has the right to use or occupy pursuant to a lease, sublease,
license or other similar Contract providing the right to use or occupy any material real property (each, a "
Lease
"). Company or its applicable
Subsidiary has a valid leasehold interest in all Company Leased Properties and is in possession of the properties purported to be leased thereunder, and each Lease is valid without default thereunder
by the lessee or, to the knowledge of Company, the lessor. The Company or applicable Subsidiary holds the leasehold estate in each Company Leased Property free and clear of all Liens except for
Permitted Encumbrances. Company or its Subsidiaries have not subleased, licensed or otherwise granted any person the right to use or occupy the Company Leased Properties or any portion thereof.
Company and each of its Subsidiaries has complied with the terms of all Leases, and all Leases are in full force and effect, except for such failures to comply or be in full force and effect
A-20
that
have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(c) All
plants, warehouses, distribution centers, structures and other buildings situated on the Company Owned Properties and Company Leased Properties are in good condition
and repair and are sufficient for the operation of Company's business in the ordinary course consistent with past practice, normal wear and tear excepted, except, in each case, as would not be
reasonably expected to have, individually or in the aggregate, a Company Material Adverse Effect. There is no pending or, to the knowledge of Company, threatened condemnation proceeding against any
Company Real Property that is material to Company.
3.16
Title to Tangible Assets, Condition of the Assets.
(a) Except
as would not reasonably be expected, either individually or in the aggregate, to have a Company Material Adverse Effect, Company and its Subsidiaries have legal
and valid title to, or in the case of leased assets, valid and subsisting leasehold interests in, all of the tangible personal assets used by Company and its Subsidiaries in connection with the
conduct of the business of Company and its Subsidiaries, free and clear of all Liens other than Permitted Encumbrances.
(b) All
owned or leased tangible personal assets of Company and its Subsidiaries (other than the Company Owned Properties and Company Leased Properties) are in all material
respects in good working order, repair and operating condition, other than rental fleet under repair or out of service in the ordinary course of business.
3.17
Intellectual Property.
(a)
Section 3.17(a)
of the Company Disclosure Schedule contains a complete and accurate list of all Company Registered
Owned Intellectual Property, in each case listing, as applicable, (i) the name of the applicant/registrant and current owner (other than, in each case, with respect to internet domain names),
(ii) the jurisdiction where the application/registration is located (or, for internet domain names, the applicable registrar), (iii) the application or registration number, and
(iv) the filing date, issuance/registration/grant date (other than with respect to internet domain names) and expiration date. Each item of Company Registered Owned Intellectual Property is to
Company's knowledge, valid and enforceable. Company and its Subsidiaries exclusively own all Company Owned Intellectual Property, free and clear of any Liens other than any Permitted Encumbrances.
There is no Action pending or, to Company's knowledge, threatened, that challenges the validity, enforceability, registration, ownership or use of any material Company Owned Intellectual Property.
(b) Company
and each of its Subsidiaries owns, or is licensed to use in the Company IP Contracts (in each case, free and clear of any Liens other than any Permitted
Encumbrances), all Intellectual Property necessary for the conduct of its business as currently conducted; and the conduct of the respective business of Company and each of its Subsidiaries does not
infringe, misappropriate or otherwise violate and since January 1, 2014 has not infringed, misappropriated or otherwise violated the Intellectual Property of any third party. To Company's
knowledge, no third party is challenging, infringing, misappropriating or otherwise violating and, since January 1, 2014, has challenged, infringed, misappropriated or otherwise violated any
right of Company or any of its Subsidiaries with respect to any Intellectual Property owned by Company or its Subsidiaries. Neither Company nor any of its
Subsidiaries has received any written notice of any claim of infringement, misappropriation or other violation with respect to the Intellectual Property of any third party.
A-21
(c) Neither
Company nor any of its Subsidiaries is in material breach of any of the Company IP Contracts and neither Company nor any of its Subsidiaries has notified in
writing any third party, and no third party has notified Company or any of its Subsidiaries, of any such breach.
(d) Company
and its Subsidiaries take, and have taken, commercially reasonable measures, generally consistent with industry standards, to safeguard Company's and its
Subsidiaries' Trade Secrets. To the knowledge of Company, (i) no employee, independent contractor or agent of Company or any of its Subsidiaries has misappropriated any Trade Secrets of Company
or any of its Subsidiaries in the course of his or her performance as an employee, independent contractor or agent and (ii) no employee, independent contractor or agent of Company or any of its
Subsidiaries is in material default or breach of any term of any employment agreement, nondisclosure agreement, assignment of invention agreement or similar agreement or contract relating in any way
to the protection, ownership, development, use or transfer of Intellectual Property of Company or its Subsidiaries. Except as would not reasonably be expected to have, either individually or in the
aggregate, a Company Material Adverse Effect, neither Company nor any of its Subsidiaries has disclosed any of the Trade Secrets or confidential information included in the Company Owned Intellectual
Property to any third party, other than pursuant to a written confidentiality agreement.
(e) The
software, hardware, computer systems, telecommunications equipment and systems, and Internet and intranet sites (collectively, the
"
Information Systems
") that are used or relied on by Company and its Subsidiaries in the conduct of their business are in good working condition
(ordinary wear and tear excepted), fulfill the purposes for which they were acquired or developed and have industry standard and commercially reasonable security, back-ups and disaster recovery
arrangements in place, except as would not reasonably be expected to have, either individually or in the aggregate, a Company Material Adverse Effect. Company and its Subsidiaries have met or exceeded
commercially reasonable industry standards to safeguard the availability, security and integrity of the Information Systems and all data and information stored thereon, including from unauthorized
access and infection by unauthorized code, except as would not reasonably be expected to have, either individually or in the aggregate, a Company Material Adverse Effect. The Information Systems of
Company and its Subsidiaries have not, to Company's knowledge, suffered any material security breach or material failure. No material included in the Company Owned Intellectual Property contains any
computer code or any other procedure, routine or mechanism which may cause any Company Owned Intellectual Property to be subject to any Open License Term, except as would not reasonably be expected to
have, either individually or in the aggregate, a Company Material Adverse Effect.
(f) Each
of Company and its Subsidiaries, as applicable, has a valid and legal right (whether contractually, by Law or otherwise) to access and use all Personal Information
that is accessed and used by such Company and its Subsidiaries in connection with the use and operation of the business of Company and its Subsidiaries. Company and each Subsidiary has commercially
reasonable safeguards in place to protect Personal Information in its possession or control from unauthorized access by any third party, including the employees and contractors of Company and its
Subsidiaries. Except as would not reasonably be expected to have, either individually or in the aggregate, a Company Material Adverse Effect, (i) there has been no unauthorized access, use or
disclosure of Personal Information in the possession or control of Company or any of its Subsidiaries or any of their contractors, (ii) Company and its Subsidiaries have at all times complied
with all applicable Laws relating to privacy, data protection and the collection and use of personal information and user information including that of its customers and employees, and they have the
unrestricted right to transfer to Surviving Corporation all such information, and (iii) following the Closing Date, Surviving Corporation shall have rights to use such information equivalent to
the rights to use such information that Company and its Subsidiaries had prior to the Closing Date. Neither the execution, delivery nor performance of this Agreement nor the
A-22
consummation
of any of the transactions contemplated under this Agreement will violate any applicable privacy Law as it currently exists or existed at any time during which any of the Personal
Information was collected or obtained.
(g) Except
as would not reasonably be expected to have, either individually or in the aggregate, a Company Material Adverse Effect, the execution, delivery or performance of
this Agreement and the consummation of the Merger will not contravene, conflict with or result in any limitation on the Surviving Corporation's right, title or interest in or to any Company Owned
Intellectual Property.
3.18
Affiliate Transactions.
(a) No
director, officer or affiliate (other than Subsidiaries of Company) of Company is, or has been since January 1, 2014, a party to any transaction, Contract or
other legally binding arrangement or legally binding understanding with Company or its Subsidiaries (other than under Company Benefit Plans as set forth under
Section 3.11(a)
of the Company
Disclosure Schedule) or has any material interest in any property used by Company or its Subsidiaries, in either
case that would be required to
be disclosed under Item 404 of Regulation S-K under the Securities Act that have not been so disclosed in the Company SEC Reports.
(b) Without
limiting the generality of
Section 3.18(a)
, none of the Key Holders or their respective affiliates is, or
has been since January 1, 2014, a party to any transaction, Contract or other legally binding arrangement or legally binding understanding with Company or its Subsidiaries or has any material
interest in any property used by Company or its Subsidiaries, in either case that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act that have
not been so disclosed in the Company SEC Reports.
3.19
State Takeover Laws.
Assuming the representations and warranties of Parent and Merger Sub
contained in
Section 4.1(b)
are true
and correct, the Company Board has approved this Agreement, the Transaction Documents (including the Support Agreement and the Exchange Agreements) and the transactions contemplated hereby as required
to render inapplicable to this Agreement and such transactions the restrictions on "business combinations" set forth in Section 203 of the DGCL or any other "moratorium," "control share," "fair
price," "interested stockholder" or other similar anti-takeover statute or regulation enacted under any Laws applicable to Company or any of its Subsidiaries (any such Laws,
"
Takeover Statutes
").
3.20
Opinion.
Prior to the execution of this Agreement, the Special Committee has received an opinion
(which, if initially rendered orally, has been confirmed by a written
opinion, dated the same date) from the Special Committee Financial Advisor, to the effect that, as of the date thereof, based upon and subject to the factors, assumptions and limitations set forth
therein, the Merger Consideration pursuant to this Agreement is fair, from a financial point of view, to the holders of the outstanding shares of Company Common Stock, excluding from such holders
Parent and Wayzata Investment Partners LLC and their affiliates and executive officers of the Company. Such opinion has not been amended, withdrawn or rescinded as of the date of this
Agreement. Company has made available to Parent a true, correct and complete copy of such opinion for informational purposes only.
3.21
Company Information.
The Information Statement (or any amendment or supplement thereto) when
filed with the SEC and at the time it is mailed to holders of Company Common Stock and any
other documents and financial statements of Company incorporated by reference in the Information Statement or any amendment or supplement thereto, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading. The portions of the Information Statement relating
to Company and its Subsidiaries and other portions within the reasonable control of Company and its Subsidiaries will comply in all material respects with the provisions of the Exchange Act and the
A-23
rules
and regulations thereunder. Notwithstanding the foregoing, no representation or warranty is made by Company with respect to statements made or incorporated by reference therein based on
information provided or supplied by or on behalf of Parent or its Subsidiaries for inclusion or incorporation by reference in the Information Statement.
3.22
Insurance.
(a) Company and its Subsidiaries are insured with reputable insurers against such
risks and in such amounts as the management of Company reasonably has determined
to be prudent and consistent with industry practice, and neither Company nor any of its Subsidiaries received notice of cancellation, suspension, denial, limitation of coverage or termination of such
policy or to the effect that Company or its Subsidiaries are in default under any such insurance policy; (b) each such policy is outstanding and in effect and, except for policies insuring
against potential liabilities of officers, directors and employees of Company and its Subsidiaries, Company or the relevant Subsidiary thereof is the sole beneficiary of such policies; and
(c) all premiums and other payments due under any policy have been paid, and all claims thereunder have been filed in due and timely fashion, in each case, except as would not reasonably be
expected to have, either individually or in the aggregate, a Company Material Adverse Effect.
3.23
Books and Records.
The books and records of Company and its Subsidiaries have been fully,
properly and accurately maintained in all material respects, and there are no material
inaccuracies or discrepancies contained or reflected therein.
3.24
No Other Representations or Warranties.
Except for the representations and warranties made by
Company in this
Article III
or in the certificate
delivered pursuant to
Section 7.2(d)
, neither Company (nor any other person on Company's behalf) makes or has made any other express or implied
representation or warranty with respect to Company or its Subsidiaries or their respective business, operations, assets, liabilities, results of operations, condition (financial or otherwise) or
prospects, or with respect to any estimates, projections, forecasts and other forward-looking information or business or strategic plan information regarding Company and its Subsidiaries, or as to the
accuracy or completeness of any of the information (including any statement, document or agreement delivered pursuant to this Agreement or any financial statements, including projections, estimates,
forecasts or other forward-looking information) provided (including in any management presentations, information or descriptive memorandum, "data rooms" maintained by Company or its Representatives,
supplemental information or other materials or information with respect to any of the above) or otherwise made available to Parent and Merger Sub or any of their respective affiliates, stockholders or
Representatives (in any form or through any medium). In particular, and without limiting the generality of the foregoing, except as expressly set forth in this
Article III
or in the certificate
delivered pursuant to
Section 7.2(d)
, neither Company
(nor any other person on Company's behalf) makes or has made any express or implied representation or warranty to Parent, Merger Sub or any of their respective Representatives with respect to
(a) any financial projection, forecast, estimate, budget or prospect information relating to Company, any of its Subsidiaries or their respective businesses or (b) any oral or written
information presented to Parent, Merger Sub or any of their respective Representatives in the course of their due diligence investigation of Company, the negotiation of this Agreement or the course of
the transactions related hereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Except
(a) as disclosed in the corresponding sections of the disclosure schedule delivered by Parent and Merger Sub to Company prior to the execution hereof (the
"
Parent Disclosure Schedule
");
provided
, that (i) no such item is required to be set forth as an
exception to a representation or warranty if its absence would not result in the related representation or warranty being deemed untrue or incorrect, (ii) the mere inclusion of an item in the
Parent Disclosure Schedule as an exception to a representation
A-24
or
warranty shall not be deemed an admission by Parent or Merger Sub that such item has had or would reasonably be reasonably expected to have, either individually or in the aggregate, a Parent
Material Adverse Effect, and (iii) any disclosures made with respect to a Section of this
Article IV
shall be deemed to qualify
(A) any other Section of this
Article IV
specifically referenced or cross-referenced
and (B) other sections of this
Article IV
to the extent it is reasonably apparent (notwithstanding the absence of a specific cross
reference) from a reading of the disclosure that such disclosure is relevant to such other sections or (b) as disclosed in any Parent SEC Reports filed prior to the date hereof (but
disregarding disclosures contained under the heading "Risk Factors" or disclosures of risks set forth in any "forward-looking statements" disclaimer or any other statements that are similarly
non-specific or cautionary, predictive or forward-looking in nature), Parent and Merger Sub hereby represent and warrant to Company as follows:
4.1
Corporate Organization.
(a) Each
of Parent and Merger Sub is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware
(b) None
of Parent, Merger Sub or their respective controlled affiliates own, directly or indirectly, beneficially (as defined in Rule 13d-3 under the Exchange Act)
or of record, any shares of Company Common Stock or Equity Interests that are convertible, exchangeable or exercisable into Company Common Stock, and none of Parent, Merger Sub or their respective
controlled affiliates holds any rights to acquire or vote any shares of Company Common Stock except pursuant to this Agreement. During the three (3) year period prior to the action of the
Company Board taken on July 14, 2017, neither Parent nor Merger Sub, alone or together with any other person, was at any time, or became, an "interested stockholder" of Company as defined in
Section 203 of the DGCL, or has taken any action that would cause the restrictions on business combinations with interested stockholders set forth in Section 203 of the DGCL to be
applicable to this Agreement, the Merger or any transactions contemplated hereby.
4.2
Ownership and Operations of Merger Sub.
Parent owns beneficially and of record all of the outstanding Equity
Interests of Merger Sub. Merger Sub was incorporated solely for the purpose of engaging in the Merger and has engaged in no other business activities other than those relating to the Merger.
4.3
Authority; No Violation.
(a) Each
of Parent and Merger Sub has full power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The
execution and delivery of this Agreement and the consummation of the Merger has been duly and validly approved by the unanimous vote of the Board of Directors of each of Parent and Merger Sub, not
subsequently rescinded or modified in any way as of the date hereof. The Board of Directors of each of Parent and Merger Sub has determined that the Merger, on the terms and conditions set forth in
this Agreement, is in the best interests of such company and its stockholders. No other proceedings on the part of either Parent or Merger Sub are necessary to approve this Agreement or to consummate
the transactions contemplated hereby (including the Merger) and perform Parent's obligations hereunder. This Agreement has been duly and validly executed and delivered by each of Parent and Merger Sub
and (assuming due authorization, execution and delivery by Company) constitutes a valid and binding obligation of each of Parent and Merger Sub, enforceable against Parent in accordance with its terms
(except in all cases as such enforceability may be limited by the Enforceability Exceptions).
A-25
(b) Neither
the execution and delivery of this Agreement and the other Transaction Documents to which Parent or Merger Sub is a party by Parent or Merger Sub, as applicable,
nor the consummation by Parent or Merger Sub of the transactions contemplated hereby or thereby, nor compliance by Parent or Merger Sub with any of the terms or provisions hereof or thereof, will
(i) violate any provision of (A) Parent's Amended and Restated Certificate of Incorporation, as amended, and Amended and Restated Bylaws, as amended, each as in effect as of the date of
this Agreement (together, the "
Parent Organizational Documents
") or (B) Merger Sub's certificate of incorporation, as amended, and bylaws, as
amended, each as in effect as of the date of this Agreement (the "
Merger Sub Organizational Documents
") or (ii) assuming that the consents,
approvals and filings referred to in
Section 4.4
are duly obtained and/or made, (C) violate any Law applicable to Parent, Merger Sub or
any of their Subsidiaries or any of their respective properties or assets or (D) violate, conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a
default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of termination or cancellation under, accelerate the
performance required by, or result in the creation of any Lien upon any of the respective properties or assets of Parent, Merger Sub or any of their Subsidiaries under, any of the terms, conditions or
provisions of any Contract to which Parent, Merger Sub or any of their Subsidiaries is a party, or by which they or any of their respective properties or assets may be bound, except (in the case of
this
clause (ii)(D)
) for such violations, conflicts, breaches, defaults, terminations, cancellations, accelerations or creations which would not
reasonably be expected to have, either individually or in the aggregate, a Parent Material Adverse Effect.
4.4
Consents and Approvals.
Except for (i) the Governmental Requirements, (ii) where the failure
to obtain such approval or consent would not reasonably be expected to have, either individually or in the aggregate, a Parent Material Adverse Effect, no consents or approvals of or filings or
registrations with any Governmental Entity are necessary in connection with (A) the execution and delivery by each of
Parent and Merger Sub of this Agreement or (B) the consummation by each of Parent and Merger Sub of the Merger and the other transactions contemplated hereby.
4.5
Legal and Regulatory Proceedings.
(a) As
of the date hereof, there is no Action pending or, to Parent's knowledge, threatened, against or involving Parent, Merger Sub or any of their respective Subsidiaries,
any of their respective assets or properties or any of their current or former directors or executive officers, except as would not reasonably be expected to, either individually or in the aggregate,
have a Parent Material Adverse Effect.
(b) As
of the date hereof, there is no Order, whether temporary, preliminary or permanent, imposed upon Parent, Merger Sub, any of their respective Subsidiaries or the
assets or properties of Parent, Merger Sub or any of their respective Subsidiaries, except as would not reasonably be expected to, either individually or in the aggregate, have a Parent Material
Adverse Effect.
4.6
Parent Information.
The information relating to Parent and its Subsidiaries that is provided by Parent or
its Representatives specifically for inclusion or incorporation by reference in the Information Statement (or any amendment or supplement thereto) when filed with the SEC and at the time it is mailed
to holders of Company Common Stock or any amendment or supplement thereto, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances in which they are made, not misleading. Notwithstanding the foregoing, no representation or warranty is made by Parent with respect to statements made or
incorporated by reference therein based on information provided or supplied by or on behalf of Company or its Subsidiaries for inclusion or incorporation by reference in the Information Statement.
A-26
4.7
Financing.
Attached hereto as
Exhibit C
is a
true and complete copy of an executed debt commitment letter, a redacted
(as to fees and certain other economic terms, but not as to conditionality) fee letter and related term sheets (as amended or otherwise modified, the "
Debt Commitment
Letter
") from Wells Fargo Bank, National Association, WF Investment Holdings, LLC and Wells Fargo Securities, LLC (the
"
Lenders
") pursuant to which, and subject to the terms and conditions of which, the Lenders have committed to provide Parent and/or Merger Sub with
loans in the amounts described therein (the "
Financing
"). The Debt Commitment Letter is a legal, valid and binding obligation of Parent or Merger Sub
and, to Parent's knowledge, the other parties thereto, enforceable in accordance with its terms (except in all cases as such enforceability may be limited by the Enforceability Exceptions). As of the
date hereof, the Debt Commitment Letter is in full force and effect, and has not been withdrawn, rescinded or terminated or otherwise amended or modified in any respect. As of the date hereof,
(i) neither Parent nor Merger Sub is in breach of any of the terms or conditions set forth in the Debt Commitment Letter, and (ii) to Parent's knowledge, no event has occurred which,
with or without notice, lapse of time or both, would constitute a breach, default or failure by Parent or Merger Sub to satisfy any condition precedent set forth therein. As of the date hereof, no
Lender has notified Parent or Merger Sub of its intention to terminate the Debt Commitment Letter or not to provide the Financing. The net proceeds from the Financing, together with cash on hand at
the Parent, will be sufficient to consummate the Merger and the other transactions contemplated by this Agreement, including the payment by Parent and Merger Sub of the aggregate Merger Consideration,
any fees and expenses of or payable by Parent, Merger Sub or the Surviving Corporation, and any related repayment or refinancing of any Indebtedness of Company or any of its Subsidiaries, and any
other amounts required to be paid in connection with the consummation of the transactions contemplated by this Agreement and the other Transaction Documents. Parent or Merger Sub has paid in full any
and all commitment or other fees required by the Debt Commitment Letter that are due as of the date hereof. Other than the Debt Commitment Letter, there are no side letters, understandings or other
agreements or arrangements setting forth conditions precedent or other contingencies related to the funding of the full amount of the Financing to which Parent, Merger Sub or any of their respective
Affiliates are a party. There are no conditions precedent or other contingencies related to the funding of the full amount of the Financing or the conditions precedent thereto, other than as
explicitly set forth in the Debt Commitment Letter (the "
Disclosed Conditions
"). As of the date hereof, neither Parent nor Merger Sub has any legally
binding obligation to accept any condition precedent to such funding other than the Disclosed Conditions, nor any reduction to the aggregate amount available under the Debt Commitment Letter on the
Closing Date (nor any term (including any flex or original issue discount term) or condition which would have the effect of reducing the aggregate amount available under the Debt Commitment Letter on
the Closing Date). As of the date hereof, neither Parent nor Merger Sub has any reason to believe that it will be unable to satisfy on a timely basis any conditions to the funding of the full amount
of the Financing at the Closing, or that the Financing will not be available to Parent or Merger Sub on the Closing Date. For the avoidance of doubt, it is not a condition to Closing under this
Agreement, nor to the consummation of the Merger, for Parent or Merger Sub to obtain the Financing or any alternative financing.
4.8
Broker's Fees.
Neither Parent, Merger Sub, their Subsidiaries nor any of their respective
affiliates, officers or directors has employed any broker, finder, financial advisor or
other similar person, or incurred any liability for any broker's fees, commissions or finder's fees in connection with the Merger or the other transactions contemplated by this Agreement and the
Transaction Documents, other than with respect to Wells Fargo Securities, LLC.
4.9
No Other Representations or Warranties.
Except for the representations and warranties made by
Parent and Merger Sub in this
Article IV
or the
certificate delivered pursuant to
Section 7.3(c)
, neither Parent nor Merger Sub (nor any other person on their behalf) makes or has made any
other express or implied representation or warranty with respect to Parent, Merger Sub or their Subsidiaries
A-27
or
affiliates or their respective business, operations, assets, liabilities, results of operations, condition (financial or otherwise) or prospects, or with respect to any estimates, projections,
forecasts and other forward-looking information or business or strategic plan information regarding Parent, Merger Sub and their Subsidiaries, or as to the accuracy or completeness of any of the
information (including any statement, document or agreement delivered pursuant to this Agreement or any financial statements, including projections, estimates, forecasts or other forward-looking
information) provided (including in any management presentations, information or descriptive memorandum, "data rooms" maintained by Parent, Merger Sub or their Representatives, supplemental
information or other materials or information with respect to any of the above) or otherwise made available to Company or any of its affiliates, stockholders or Representatives (in any form or through
any medium). In particular, and without limiting the generality of the foregoing, except as expressly set forth in this
Article IV
or the
certificate delivered pursuant to
Section 7.3(c)
, neither Parent nor Merger Sub (nor any other person on their behalf) makes or has made any
express or implied representation or warranty to Company or any of its Representatives with respect to (a) any financial projection, forecast, estimate, budget or prospect information relating
to Parent, Merger Sub, any of their Subsidiaries or their respective businesses or (b) any oral or written information presented to Company or any of its respective Representatives in the
course of their due diligence investigation of Parent and Merger Sub, the negotiation of this Agreement or the course of the transactions related hereto.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.1
Conduct of Business of Company Prior to the Effective Time.
During the period from the date of this
Agreement to the Effective Time or earlier termination of this Agreement, except as set forth in
Section 5.1
of the Company Disclosure Schedule, as expressly required by this Agreement or any
Transaction Document, as required by Law or as
consented to in writing by Parent (such consent not to be unreasonably withheld, delayed or conditioned), Company shall, and shall cause its Subsidiaries to, (i) conduct its business in the
ordinary course consistent with past practice in all material respects and in compliance with applicable Law, and (ii) use commercially reasonable efforts to maintain and preserve intact its
business organization, employees and advantageous business relationships.
5.2
Company Forbearances.
During the period from the date of this Agreement to the Effective Time or
earlier termination of this Agreement, except as set forth in
Section 5.2
of the Company Disclosure Schedule, as expressly required by this Agreement, any Transaction Document, or as required by
Law, Company
shall not, and shall not permit any of its Subsidiaries to and shall cause its Subsidiaries not to, without the prior written consent of Parent (such consent not to be unreasonably withheld, delayed
or conditioned):
(a) incur,
offer, place, arrange, syndicate, assume, guarantee, prepare or otherwise become liable for any Indebtedness (directly, contingently or otherwise) for borrowed
money or guarantee any such Indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company or any of its
Subsidiaries, or guarantee any debt securities of another person or other Indebtedness or incur any Liens, other than Permitted Liens, in each case other than (i) Indebtedness for borrowed
money incurred under the Credit Agreements in the ordinary course of business consistent with past practice, (ii) any Indebtedness among Company and its wholly owned Subsidiaries or among
Company's wholly owned Subsidiaries, or (iii) guarantees by Company of Indebtedness of wholly owned Subsidiaries of Company, which Indebtedness is incurred in compliance with this
Section 5.2(a)
;
(b)
(i) adjust,
split, combine or reclassify any Equity Interests;
A-28
(ii) (A)
make, declare, set aside or pay any dividend or distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or
any Equity Interests or obligations convertible (whether currently convertible or convertible only after the passage of time or the
occurrence of certain events) into or exchangeable for any shares of its capital stock or Equity Interests (except (1) dividends paid by any Subsidiary of Company to Company or any of its
wholly owned Subsidiaries or (2) the acceptance of shares of Company Common Stock as payment for the exercise price of Company Stock Options or for withholding taxes incurred in connection with
the exercise of Company Stock Options or the vesting or settlement of Company Equity Awards, in each case in accordance with past practice and the terms of the applicable Company Stock Plan and award
agreements as in effect as of the date hereof) or (B) make any payments in connection with or pursuant to the TRA; or
(iii) issue,
sell or otherwise permit to become outstanding any shares of Company Common Stock or additional shares of capital stock or Equity Interests or securities
convertible or exchangeable into, or exercisable for, any shares of its capital stock or Equity Interests or any options, warrants or other rights of any kind to acquire any shares of capital stock or
Equity Interests (including any Company Equity Awards) of Company or any of its Subsidiaries, except for (x) the issuance of shares upon the exercise of Company Stock Options outstanding as of
immediately prior to the execution of this Agreement in accordance with the terms of the applicable Company Stock Plan and award agreements as in effect as of immediately prior to the execution of
this Agreement, (y) the vesting or settlement of Company Equity Awards that are outstanding as of immediately prior to the execution of this Agreement as in effect as of immediately prior to
the execution of this Agreement or (z) in connection with the exchange of LLC Units for shares of Company Class B Common Stock in accordance with the Company Certificate
and LLC Agreement;
(c) sell,
transfer, lease, mortgage, encumber or otherwise dispose of any of its material properties or assets (whether by way of merger, consolidation, sale of shares or
assets, or otherwise) (other than to a wholly owned Subsidiary of Company) (including any capital stock or other Equity Interests of any Subsidiary), or cancel, release, waive or assign any
Indebtedness owing to Company or its Subsidiaries or any claims held by any such person, in each case other than (i) sales of assets in the ordinary course of business consistent with past
practice or (ii) any Permitted Encumbrances;
(d) make
any investment (whether by purchase of stock or securities, contributions to capital, property transfers, purchase of or otherwise) in any property or assets of any
other individual, corporation or other entity, other than an investment in a wholly owned Subsidiary of Company, except for any such transaction (i) for which the consideration paid (including
assumed Indebtedness) does not exceed $1,000,000, and (ii) which is in the ordinary course of business consistent with past practice;
(e) except
as required under applicable Law or the terms of any Company Benefit Plan as in effect immediately prior to the date hereof, (i) enter into or adopt any
employee benefit or compensation plan, program, policy or arrangement for the benefit of any current or former employee, officer, director or consultant, (ii) amend (whether in writing or
through the interpretation of) any employee benefit or compensation plan, program, policy or arrangement for the benefit of any current or former employee, officer, director or consultant,
(iii) increase the compensation or benefits payable to any current or former employee, officer, director or consultant (or any beneficiary or dependent of any of the foregoing) other than
increases in the base salary of non-officer employees in the ordinary course of business consistent with past practice, (iv) pay or award, or commit to pay or award, any bonuses or incentive
compensation, (v) grant or accelerate the vesting of any equity-based awards or other compensation, (vi) enter
A-29
into
any new, or amend (whether in writing or through the interpretation of) any existing, employment, severance, change in control, retention, bonus guarantee or similar plan, program, agreement or
arrangement, (vii) fund any rabbi trust, (viii) terminate the employment or services of (or provide a termination notice to) any employee in a position of Vice President or above
(including, for the avoidance of doubt, any officers) or any other employee whose annual base salary plus target annual bonus opportunity plus commissions for the most recently completed fiscal year
was, or for the current fiscal year is expected to be, greater than $200,000], other than for performance, or (ix) (A) hire any employee who will have a position of Vice
President or above (including, for the avoidance of doubt, any officers) or whose annual base salary plus target annual bonus opportunity plus commissions is expected to be greater than $200,000 or
(B) engage any consultant whose annualized fees would exceed $200,000;
(f) (i)
settle any Transaction Litigation except in accordance with
Section 6.10
, or (ii) settle, release,
waive or compromise any other Action, or any other threatened or potential Action, except in the ordinary course of business consistent with past practice, in an amount and for consideration not in
excess of $1,000,000 individually or $2,500,000 in the aggregate and that would not impose any restriction or require any action that, individually or in the aggregate, would or would reasonably be
expected to be material to Company and its Subsidiaries, taken as a whole, or affect the Merger and the other transactions contemplated hereby;
(g) (i)
enter into or amend or modify in any material respect, or consent to the termination of (other than at its stated expiration date), or waive any provisions of, any
Company Contract, except for renewals of Company Contracts with substantially similar terms as the existing Company Contact (other than Company Contracts disclosed pursuant to clauses (d) or
(e) of
Section 3.13
), or (ii) enter into any new Contract that (x) would have been a Company Contract if it were entered
into on or prior to the date of this Agreement other than such Contracts entered into with customers and suppliers in the ordinary course of business consistent with past practice that would not have
been Company Contracts under clauses (a), (d) or (e) of
Section 3.13
if entered into on or prior to the date of this
Agreement, or (y) contains a change in control or similar provision in favor of the other party or parties thereto that would require a payment to or give rise to any rights to such other party
or parties in connection with the consummation of the Merger (including in combination with any other event or circumstance);
(h) amend
or propose to amend the Company Certificate, Amended and Restated Bylaws of Company, as amended (the "
Company
Bylaws
") or comparable governing documents of its Subsidiaries;
(i) merge
or consolidate itself or any of its Subsidiaries with any other person, or restructure, reorganize or completely or partially liquidate or dissolve it or any of
its Subsidiaries;
(j) implement,
make or adopt any material change in its accounting principles, practices or methods, other than as may be required by a change in GAAP or by applicable Laws,
guidelines or policies imposed by any Governmental Entity;
(k) other
than in the ordinary course of business consistent with past practice, (i) make, change or revoke any material Tax election, (ii) change an annual
Tax accounting period, adopt or materially change any Tax accounting method, (iii) file any amended Tax Return, (iv) enter into any closing agreement with respect to Taxes,
(v) settle any material Tax claim, audit, assessment or dispute, (vi) consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment or
(vii) surrender any offset or other reduction in Tax liability or any right to claim a refund of a material amount of Taxes;
A-30
(l) make
any revaluation of any material asset (including any writing down of the value of inventory or writing off of notes or accounts receivable), other than in the
ordinary course of business consistent with past practice;
(m) make,
authorize any payment of or commit to make any capital expenditures (including with respect to any fleet equipment) in excess of $2,500,000, except for
expenditures required by applicable Law, in response to actual casualty loss or property damage or as contemplated by Company's 2017 or 2018 budget (copies of which have been made available to
Parent);
(n) enter
into any Contract with any Affiliate of Company or any of its Subsidiaries or any indemnification agreement with a Company Indemnified Party, or make or agree to
make any payments in connection with or pursuant to the TRA or the LLC Agreement;
(o) exercise
any discretion to accelerate, or otherwise take any other action to cause, the vesting of any Company Equity Award; or
(p) agree
to take, make any commitment to take, or adopt any resolutions of its Board of Directors or similar governing body in support of, any of the actions prohibited by
this
Section 5.2
.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1
Access to Information.
(a) Neither
Parent nor Merger Sub shall be permitted to conduct any invasive sampling or testing, including any Phase II environmental assessment, with respect to any
property of Company or its Subsidiaries. Upon reasonable notice and subject to applicable Laws, Company shall, and shall cause its Subsidiaries to, afford to the officers, employees, accountants,
counsel, advisors and other representatives of Parent reasonable access, during normal business hours from the date hereof until the earlier of the Effective Time or the termination of this Agreement,
to all of Company's properties, books, contracts, personnel, information technology systems and records, and each shall reasonably cooperate with Parent in preparing to execute after the Effective
Time conversion or consolidation of systems and business operations generally (including by entering into customary confidentiality, nondisclosure and similar agreements with service providers), and,
during such period, Company shall, and shall cause its Subsidiaries to, make available to Parent such information concerning its business, properties and personnel as Parent may reasonably request, in
each case other than any such matters that relate to the negotiation and execution of this Agreement or (except as required by
Section 6.8
) to
transactions potentially competing with or alternative to the transactions contemplated by this Agreement or proposals from other parties relating to any competing or alternative transactions. Parent
shall use commercially reasonable efforts to minimize any interference with Company's regular business operations during any such access. Upon reasonable notice and subject to applicable Laws, Company
shall, and shall cause its Subsidiaries to, furnish or otherwise make available to the officers, employees, accountants, counsel, advisors and other representatives of Parent such information
concerning its businesses as is reasonably relevant to Parent in connection with the transactions contemplated by this Agreement. Company and its Subsidiaries shall not be required to provide access
to or to disclose information where such access or disclosure would, based on the advice of outside counsel, jeopardize the attorney-client privilege of the institution in possession or control of
such information (after giving due consideration to the existence of any common interest, joint defense or similar agreement between the parties) or contravene any Law, fiduciary duty, or binding
agreement entered into prior to the date of this Agreement. Company will make appropriate substitute disclosure arrangements under circumstances in which the restrictions of the preceding sentence
apply.
A-31
(b) Each
party shall hold all information furnished by or on behalf of it or any of its Subsidiaries or representatives pursuant to
Section 6.1(a)
in confidence to the extent required by, and in accordance
with, the provisions of the Mutual Confidentiality and Nondisclosure
Agreement, dated March 27, 2017, by and between Parent and Company (the "
Confidentiality Agreement
").
(c) No
investigation by Parent, Company or their respective representatives pursuant to this
Section 6.1(c)
shall
affect or be deemed to modify or waive the representations and warranties of the other set forth herein. Nothing contained in this Agreement is intended to give either Parent or Company, directly or
indirectly, the right to control or direct the operations of the other party prior to the Effective Time. Prior to the Effective Time, it is intended that each party shall exercise, consistent with
the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries' respective operations.
6.2
Information Statement.
(a) Parent
and Company shall cooperate and promptly prepare and Company shall promptly file with the SEC no later than ten (10) calendar days after the date of this
Agreement the Information Statement. The Information Statement shall contain (i) the notice of action by written consent required by Section 228(e) of the DGCL and (ii) the notice
of availability of appraisal rights and related disclosure required by Section 262 of the DGCL.
(b) Parent
and Company shall, upon request, furnish each other with all information concerning themselves, their Subsidiaries, directors, officers and stockholders and such
other matters as may be reasonably necessary or advisable in connection with the Information Statement or any other statement, filing, notice or application made by or on behalf of Parent, Company or
any of their respective Subsidiaries to any Governmental Entity in connection with the Merger and the other transactions contemplated by this Agreement. Parent agrees, as to itself and its
Subsidiaries, that none of the information supplied or to be supplied by it to Company in writing specifically for inclusion or incorporation by reference in the Information Statement will when filed
with the SEC and at the time it is mailed to holders of Company Common Stock, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. Parent further agrees that if it becomes aware that any information furnished by it would cause any of the statements in the Information
Statement to be false or misleading with respect to any material fact, or to omit to state any material fact necessary to make the statements therein not false or misleading, to promptly inform
Company and to take appropriate steps to correct the Information Statement. Company shall use its reasonable best efforts to resolve all SEC comments with respect to the Information Statement as
promptly as reasonably practicable after receipt thereof and to have the Information Statement cleared by the staff of the SEC as promptly as reasonably practicable after such filing.
(c) No
amendment or supplement to the Information Statement will be made by Company without the approval of the Parent (such approval not to be unreasonably withheld,
conditioned or delayed). Company shall promptly provide notice to Parent of any correspondence or communications with or comments from the SEC and shall provide Parent with copies of all such written
comments and written correspondence and a detailed written summary of any substantive oral communications with the SEC. Company shall not submit any response letters or other correspondence to the SEC
without the approval of Parent (such approval not to be unreasonably withheld, conditioned or delayed).
(d) Prior
to filing or mailing the Information Statement (or any amendment or supplement thereto) or responding to any comments of the SEC (or the staff of the SEC) with
respect thereto, Company shall provide Parent a reasonable opportunity to review and to propose comments on
A-32
such
document or response and shall, in good faith, consider the reasonable comments of Parent. As promptly as reasonably practicable after the Information Statement has been cleared by the SEC or
after ten (10) calendar days have passed since the date of filing of the preliminary Information Statement with the SEC without notice from the SEC of its intent to review the Information
Statement, Company shall promptly file with the SEC the Information Statement in definitive form as contemplated by Rule 14c-2 promulgated under the Exchange Act substantially in the form
previously
cleared or filed with the SEC, as the case may be, and mail a copy of the Information Statement to Company's stockholders of record in accordance with Sections 228 and 262 of the DGCL.
6.3
Filings; Reasonable Best Efforts.
(a) In
connection with this Agreement and the transactions contemplated hereby, the parties hereto shall (i) use their reasonable best efforts to obtain as promptly
as practicable any necessary consents, approvals, waivers and authorizations of, actions or nonactions by, and make, as promptly as reasonably practicable, all necessary filings and submissions with,
any Governmental Entity or third party necessary;
provided
that in no event shall (A) Company or any of its Subsidiaries (1) be required
to pay or agree to pay any fee, penalty or other consideration (other than the HSR Act filing fee), or modify any Company Contract, to obtain any consent, approval, clearance, order, waiver or
authorization in connection with the transactions contemplated by this Agreement under any Company Contract or (2) take any of the foregoing actions without Parent's prior written consent
(
provided further
that, if Parent provides such written consent, Parent shall reimburse Company and/or its Subsidiaries the amount of such payment) or
(B) Parent or Merger Sub be required to pay or agree to pay any fee, penalty or other consideration (other than the HSR Act filing fee), or agree to modify any Company Contract, to obtain any
consent, approval, clearance, order, waiver or authorization in connection with the transactions contemplated by this Agreement, (ii) use reasonable best efforts to (A) avoid any suit,
action, petition to deny, objection, proceeding or investigation, whether judicial or administrative and whether brought by a Governmental Entity or any third party, and (B) avoid the entry of,
or to effect the dissolution of, any injunction, stay, temporary restraining order or other order in any such suit, action, petition to deny, objection, proceeding or investigation, in each case,
challenging this Agreement or the transactions contemplated hereby or that would otherwise prevent or materially impede, interfere with, hinder or delay the consummation of the Merger and the other
transactions contemplated by this Agreement, (iii) cooperate with each other in (A) determining which filings are required to be made prior to the Effective Time with, and which material
consents, approvals, permits, notices or authorizations are required to be obtained prior to the Effective Time from, Governmental Entities or third parties in connection with the execution and
delivery of this Agreement and the other Transaction Documents and consummation of the transactions contemplated hereby and thereby and (B) making all such filings and timely seeking all such
consents, approvals, permits, notices or authorizations, (iv) use reasonable best efforts to cause the conditions to the Closing set forth in
Article VII
to be satisfied as promptly as
reasonably practicable, and (v) use reasonable best efforts to take, or cause to be taken, all
other actions and do, or cause to be done, and cooperate with each other in order to do, all other things reasonably necessary or appropriate to cause the Closing to occur and to consummate the
transactions contemplated hereby as soon as practicable; provided that, for the avoidance of doubt, none of the parties hereto shall be obligated or required by this
Section 6.3
to waive a
condition to Closing set forth in
Article VII
.
(b) Without
limiting the generality of
Section 6.3(a)
, and subject to
Sections 6.3(c)
, Parent and Company shall, and shall cause their respective
Subsidiaries to (i) as soon as practicable and in no event
later than ten (10) business days after the date of this Agreement, each prepare and file any pre-merger notification required under the HSR Act to be filed with the Federal Trade Commission
(the "
FTC
") and the U.S. Department of Justice (the "
DOJ
") and (ii) promptly
A-33
provide
any supplemental information requested or required by the FTC and DOJ in connection with such notification in substantial compliance with the HSR Act and other applicable Laws. The parties
shall jointly develop, and each of the parties shall consult and cooperate in all respects with one another, and consider in good faith the views of one another, in connection with the form and
content of any analyses, appearances, presentations, memoranda, briefs, arguments, opinions, and proposals made or submitted by or on behalf of any party, hereto in connection with proceedings under
or relating to the HSR Act prior to their submission. In connection with the foregoing, with respect to this Agreement and the transactions contemplated hereby, (w) the parties agree to provide
the other (or its outside counsel, where appropriate), with any information that may be necessary or advisable to make such applications, notices, and/or filings, including, upon request by the other,
all information concerning itself, its Subsidiaries, directors, officers, and stockholders, and copies of any material correspondence, filing or communication (or oral summaries or memoranda setting
forth the substance thereof) between such party or any of its Representatives, on the one hand, and any Governmental Entity or members of their respective staffs and/or any third party, on the other
hand, (x) each party will keep the other apprised of the status of matters relating to completion of the transactions contemplated herein; (y) prior to submitting or making any such
correspondence, filing or communication to any such Governmental Entity or members of their respective staffs, the parties shall first provide the other party with a copy of such correspondence,
filing or communication in draft form, and incorporate all reasonable comments timely made by the other party with respect thereto; and (z) to the extent permitted by applicable Law, each of
the parties shall not agree to participate in any meeting or discussion with any such Governmental Entity or third party in respect of any filing, investigation, or inquiry concerning this Agreement
unless, to the extent reasonably practicable, it consults with the other party in advance and, to the extent permitted by such Governmental Entity, gives the other party the opportunity to attend and
participate therein. The parties hereto agree that they will consult with each other with respect to the obtaining of all permits, consents, approvals and authorizations of all third parties and
Governmental Entities necessary or advisable to consummate the transactions contemplated by this Agreement.
(c) Notwithstanding
anything in this Agreement to the contrary, it is expressly understood and agreed that: (i) neither Parent nor Merger Sub shall have any
obligation to litigate or contest any administrative or judicial action or proceeding or any decree, judgment, injunction or other order, whether temporary, preliminary or permanent; and
(ii) neither Parent nor Merger Sub nor any of their affiliates shall be under any obligation to make proposals, execute or carry out agreements, enter into consent decrees or submit to orders
providing for (A) the sale, divestiture, license or other disposition or holding separate (through the establishment of a trust or otherwise) of any assets or categories of assets of Parent or
any of its affiliates or the Company or any of its Subsidiaries, (B) the imposition of any limitation or regulation on the ability of Parent or any of its affiliates to freely conduct their
business or own such assets, or (C) the holding separate of Company, the Surviving Corporation or their Subsidiaries or any limitation or regulation on the ability of Parent or any of its
affiliates to exercise full rights of ownership of the Company, the Surviving Corporation and their Subsidiaries.
(d) From
the date of this Agreement until the earlier of the termination hereof and the Effective Time, Parent shall not, without the written consent of Company, make any
acquisition or enter into any joint venture or other business combination if such acquisition, joint venture or business combination would reasonably be expected to materially delay or materially
hinder the clearance, termination, or expiration of any required waiting period under the HSR Act or other Competition Law.
(e) Company
shall deliver to Parent, prior to the Closing, a statement in form and substance reasonably acceptable to Parent certifying that Company has at no time during
the
A-34
past five (5) years
been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code.
6.4
Employee Matters.
(a) With
respect to any employee benefit plans of Parent or its Subsidiaries in which any Continuing Employee becomes eligible to participate on or after the Effective Time
(the "
New Plans
"), Parent shall or shall cause the Surviving Corporation to: (i) with respect to any New Plan that provides medical, dental,
vision or prescription drug benefits, use commercially reasonable efforts to (A) waive all pre-existing conditions, exclusions and waiting periods with respect to participation and coverage
requirements applicable to each such Continuing Employee and his or her eligible dependents under any New Plans that replaces coverage under a Company Benefit Plan, except to the extent such
pre-existing conditions, exclusions or waiting periods would apply under the analogous Company Benefit Plan, and (B) for the plan year in which the Closing occurs, provide each such Continuing
Employee and his or her eligible dependents with credit for any co-payments or deductibles paid under an analogous Company Benefit Plan during the portion of the plan year in which the Closing occurs
through the Effective Time (to the same extent that such credit was given under such Company Benefit Plan prior to the Effective Time) in satisfying any applicable deductible or out-of-pocket
requirements under the applicable New Plans for the plan year in which the Closing occurs; and (ii) recognize all service of each such Continuing Employee with Company and its Subsidiaries (and
their respective predecessors, if applicable) for all purposes in any New Plan; provided that the foregoing service recognition shall not apply (x) to the extent it would result in duplication
of benefits for the same period of services, (y) for purposes of any defined benefit pension plan or benefit plan that provides
retiree welfare benefits, or (z) to any benefit plan that is a frozen plan or provides grandfathered benefits.
(b) Nothing
in this Agreement shall confer upon any employee, officer, director or consultant of Company or any of its Subsidiaries or affiliates any right to continue in
the employ or service of the Surviving Corporation, Company, or any Subsidiary or affiliate thereof, or shall interfere with or restrict in any way the rights of the Surviving Corporation, Company,
Parent or any Subsidiary or affiliate thereof to discharge or terminate the services of any employee, officer, director or consultant of Company or any of its Subsidiaries or affiliates at any time
for any reason whatsoever, with or without cause. Nothing in this Agreement shall be deemed to (i) establish, amend or modify any Company Benefit Plan, New Plan or any other benefit or
employment plan, program, agreement or arrangement, or (ii) alter or limit the ability of the Surviving Corporation or any of its Subsidiaries or affiliates to amend, modify or terminate any
particular Company Benefit Plan, New Plan or any other benefit or employment plan, program, agreement or arrangement after the Effective Time. Nothing in this Agreement, express or implied, is
intended to or shall confer upon any person, other than the parties hereto, including any current or former employee, officer, director or consultant of Company or any of its Subsidiaries or
affiliates, any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
6.5
Indemnification; Directors' and Officers' Insurance.
(a) From
and after the Effective Time until the sixth (6
th
) anniversary thereof, Parent agrees to cause Surviving Corporation to indemnify and hold harmless
each present and former director, officer or employee of Company and its Subsidiaries or fiduciaries of Company or any of its Subsidiaries under Company Benefit Plans (in each case, when acting in
such capacity) (collectively, the "
Company Indemnified Parties
") against any costs or expenses (including reasonable attorneys' fees), judgments, fines,
losses, damages or liabilities incurred in connection with any threatened or actual claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, whether
arising before or after the Effective Time, arising in whole or in part out of (i) the fact that such person is or was a director, officer or employee of
A-35
Company
or any of its Subsidiaries or is or was a fiduciary of Company or any of its Subsidiaries under Company Benefit Plans, in each case at or prior to the Effective Time or (ii) matters,
acts or omissions existing or occurring at or prior to the Effective Time, including the Merger and transactions
contemplated by this Agreement, the Transaction Documents, the Information Statement and the documents referenced herein and therein, in each case to the same extent (and solely to such extent) as
such persons are indemnified as of the date of this Agreement by Company pursuant to the Charter Documents and any indemnification agreements in existence as of the date hereof that are set forth on
Section 6.5
of the Company Disclosure Schedule; and Parent shall also cause the Surviving Corporation to advance expenses as incurred by such
Company Indemnified Party to the same extent as such persons are entitled to advancement of expenses as of the date of this Agreement by Company pursuant to the Charter Documents and any
indemnification agreements in existence as of the date hereof that are set forth on
Section 6.5
of the Company Disclosure Schedule;
provided
,
however
, that the Company Indemnified Party to whom expenses are advanced provides an
undertaking consistent with the Company Certificate, the Company Bylaws, the governing or organizational documents of any Subsidiary of Company or any such indemnification agreements, as applicable,
and applicable Law to repay such amounts if it is ultimately determined that such person is not entitled to indemnification. Until the sixth (6
th
) anniversary of the Effective Time,
Parent shall not, and shall not permit the Surviving Corporation or its Subsidiaries to, amend, repeal or otherwise modify any provision in the Surviving Corporation's or its Subsidiaries' certificate
of formation, certificate of incorporation, articles of incorporation, operating agreement, by-laws or equivalent governing documents as in effect as of the date hereof relating to the exculpation or
indemnification (including fee advancement) of any Company Indemnified Party in a manner that would adversely affect the rights of any Company Indemnified Party thereunder.
(b) Subject
to the following sentence, until the sixth (6
th
) anniversary of the Effective Time, Parent shall cause to be maintained in effect the current
policies of directors' and officers' liability insurance maintained by Company (
provided
, that the Surviving Corporation may substitute therefor
policies with a substantially comparable insurer of at least the same coverage and amounts containing terms and conditions which are no less advantageous to the insured in the aggregate) with respect
to claims against the present and former officers and directors of Company or any of its Subsidiaries arising from facts or events which occurred at or before the Effective Time (including the
transactions contemplated by this Agreement);
provided
,
however
, that the Parent and Surviving
Corporation shall not be obligated to expend, on an annual basis, an amount in excess of 300% of the aggregate annual premium paid as of the date hereof by Company for such insurance (the
"
Premium Cap
"), and if such premiums for such insurance would at any time exceed the Premium Cap, then Parent and the Surviving Corporation shall cause
to be maintained policies of insurance which, in the Surviving Corporation's good faith determination, provide the maximum coverage available at an annual premium equal to the Premium Cap. In lieu of
the foregoing, Company, in consultation with Parent may (and at the request of Parent, Company shall use its reasonable best efforts to) obtain at or prior to the Effective Time a six (6) year
"tail" policy under Company's existing directors and officers insurance policy providing equivalent coverage to that described in the preceding sentence if and to the extent that the same may be
obtained for an amount that, in the aggregate, does not exceed the Premium Cap and, if such a "tail" policy is purchased, Parent and the Surviving Corporation shall have no further obligations under
this
Section 6.5(b)
.
A-36
(c) The
provisions of this
Section 6.5
shall survive the Effective Time and are intended to be for the benefit of, and
shall be enforceable by, each Company Indemnified Party and his or her heirs and representatives. If the Surviving Corporation, or any of its successors or assigns, consolidates with or merges into
any other entity and is not the continuing or surviving entity of such consolidation or merger, transfers all or substantially all of its assets or deposits to any other entity or engages in any
similar transaction, then in each case, the Surviving Corporation will cause proper provision to be made so that the successors and assigns of the Surviving Corporation will expressly assume the
obligations set forth in this
Section 6.5
(unless such assumption occurs by operation of law).
6.6
Additional Agreements.
In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement or to vest the Surviving
Corporation with full title to all properties, assets, rights, approvals, immunities and franchises of any of the parties to the Merger, each party to this Agreement and their respective Subsidiaries
shall take, or cause to be taken, all such necessary action as may be reasonably requested by any other party, at the expense of the party who makes any such request. From and after the Effective
Time, Parent shall cause the Surviving Corporation and its subsidiaries to honor in accordance with their terms, all Contracts, agreements, arrangements, policies, plans and commitments of Company and
its Subsidiaries as in effect immediately prior to the Effective Time that are applicable to any current or former employees or directors of Company or any of its Subsidiaries.
6.7
Advice of Changes.
Each of Parent and Company shall promptly advise the other of (a) any
notice or other communication from any person alleging that the consent of such
person is or may be required in connection with the transactions contemplated by this Agreement, (b) any notice or other communication from any Governmental Entity in connection with the
transactions contemplated by this Agreement, (c) subject to, and not in limitation of
Section 5.1
, any Actions commenced, or to such
party's knowledge, threatened in writing, against Company or any of its Subsidiaries or Parent or its Subsidiaries, as applicable, that are related to the transactions contemplated by this Agreement,
and (d) any fact, change, event or circumstance known to such party, any breach, inaccuracy or misrepresentation of a representation or warranty of such party set forth in this Agreement or any
breach or non-performance of a covenant or obligation of such party set forth in this Agreement (i) that has had or would reasonably be expected to have, either individually or in the aggregate
with all other such matters, a Company Material Adverse Effect or Parent Material Adverse Effect, or (ii) which it believes would or would be reasonably expected to cause a condition to Closing
set forth in
Article VII
to not be satisfied. In no event shall (x) the delivery of any notice by a party pursuant to this
Section 6.7
limit
or otherwise affect the respective rights, obligations, representations, warranties, covenants or agreements of the parties or
the conditions to the obligations of the parties under this Agreement, or (y) disclosure by Company or Parent be deemed to amend or supplement the Company Disclosure Schedules, the Parent
Disclosure Schedules or constitute an exception to any representation or warranty.
6.8
Solicitation; Change in Recommendation
.
(a) Notwithstanding
any other provision of this Agreement to the contrary, during the period beginning on the date of this Agreement and continuing until 11:59 p.m.
(New York City time) on August 20, 2017 (the "
Go-Shop Period
"), Company (acting under the direction of the Special Committee), its Subsidiaries,
their respective affiliates and their respective Representatives shall have the right to directly or indirectly: (i) initiate, solicit, facilitate and encourage Acquisition Proposals (or
inquiries, proposals or offers or other efforts or attempts that may to lead to an Acquisition Proposal), including by way of providing access to non-public information pursuant to (but only pursuant
to) an Acceptable Confidentiality Agreement with each recipient thereof and, in each case, subject to compliance with the other provisions of this
Section 6.8
;
provided
, that Company shall promptly (in any event, within one (1) business
day) provide to Parent any
A-37
non-public
information concerning Company or its Subsidiaries that is provided to any person given such access which was not previously provided or made available to Parent or its Representatives, and
Company shall withhold such portions of documents or information, or provide pursuant to customary "clean-room" or other appropriate procedures, to the extent relating to any commercially sensitive or
relate to pricing or other matters that are highly sensitive or competitive in nature if the exchange of such information (or portions thereof) would reasonably be materially harmful to the operations
of Company; (ii) enter into, engage in, and maintain discussions or negotiations with respect to Acquisition Proposals or otherwise cooperate with or assist or participate in, or facilitate any
such inquiries, proposals, discussions or negotiations; and (iii) amend or grant a waiver or release under a standstill or similar agreement with respect to any Equity Interests of Company or
any of its Subsidiaries solely to the extent necessary to permit the counterparty to such standstill or similar agreement to make a non-public Acquisition Proposal to the Company Board or the Special
Committee during the Go-Shop Period.
(b) Company
shall, and shall cause each of its Subsidiaries and their respective Representatives (i) beginning at 12:00 a.m. (on New York City time) on
August 21, 2017 (the "
No-Shop Period Start Date
") to immediately cease and terminate any solicitation, encouragement, discussions or negotiations
with any persons with respect to an Acquisition Proposal or a potential Acquisition Proposal (including any of the activities permitted by
Section 6.8(a)
), (ii) terminate access to any
physical or electronic data rooms related to a possible Acquisition Proposal (other than a
data room utilized solely by Parent, its affiliates and their respective Representatives and not any third person) and (iii) request that any such person and its Representatives promptly return
or destroy all confidential information concerning Company and its Subsidiaries theretofore furnished thereto by or on behalf of Company or any of its Subsidiaries, and destroy all analyses and other
materials prepared by or on behalf of such person that contain, reflect or analyze such information, in each case, in accordance with the applicable confidentiality agreement between Company or any of
its affiliates, on one hand, and such person, on the other hand. From the No-Shop Period Start Date (and, solely with respect to a Holdover Proposal, the Delayed No-Shop Period Start Date) until the
Effective Time or, if earlier, the termination of this Agreement in accordance with
Article VIII
, Company shall not, and shall cause each of its
Subsidiaries and their respective Representatives not to, directly or indirectly, (A) solicit, initiate, knowingly facilitate or knowingly encourage (including by way of furnishing non-public
information) any inquiries regarding, or the making or announcement of any proposal or offer that constitutes, or would reasonably be expected to lead to, an Acquisition Proposal, (B) conduct
or engage in, enter into, continue or otherwise participate in any discussions or negotiations with, or furnish any information or data to, any person that is seeking to make, has made or, to the
knowledge of Company, is considering making an Acquisition Proposal or otherwise take such actions in connection with or for the purpose of knowingly encouraging or knowingly facilitating an
Acquisition Proposal, (C) approve, endorse or recommend any Acquisition Proposal or (D) enter into any Company Acquisition Agreement with respect to an Acquisition Proposal (including an
Acceptable Confidentiality Agreement).
(c) Except
as expressly permitted by
Section 6.8(d)
, neither the Company Board nor any committee thereof (including
the Special Committee) shall (i) (A) fail to recommend to its stockholders that the Requisite Company Vote be given (the "
Company Board
Recommendation
"), (B) change, qualify, withhold, withdraw or modify, or publicly propose to change, qualify, withhold, withdraw or modify in a manner adverse to Parent,
the Company Board Recommendation, (C) take any formal action or make any recommendation or public statement in connection with a tender offer or exchange offer (other than a temporary "stop,
look and listen" communication by the Company Board pursuant to Rule 14d-9(f) of the Exchange Act, or an express rejection of such tender offer or exchange offer or reaffirmation of the Company
Board Recommendation), (D) fail to recommend against acceptance of any tender offer or exchange offer within ten (10)
A-38
business
days of the commencement of such offer, (E) adopt, approve, endorse or recommend, or publicly propose to approve or recommend to the stockholders of Company an Acquisition Proposal or
(F) agree to take any of the foregoing actions (actions described in this clause (i) being referred to as a "
Company Adverse Recommendation
Change
"), (ii) authorize, cause or permit Company or any of its Subsidiaries to enter into any letter of intent, agreement or agreement in principle, memorandum of
understanding, or other similar agreement relating to or providing for any Acquisition Proposal or an acquisition agreement, merger agreement or similar definitive agreement providing for or with
respect to any Acquisition Proposal (each, a "
Company Acquisition Agreement
"), (iii) except as contemplated by
Section 6.8(a)
, grant any waiver,
amendment or release under any standstill or similar agreement with respect to any class of Equity Interests of
the Company or any of its Subsidiaries, any confidentiality agreement or Takeover Statute or (iv) take any action pursuant to
Section 8.1(e)
.
(d) Notwithstanding
anything to the contrary herein, prior to the No-Shop Period Start Date (and, solely with respect to a Holdover Proposal, the Delayed No-Shop Period
Start Date), but not after, the Company Board or the Special Committee may, in each case so long as the Company has complied in all material respects with the requirements of and not breached in any
material respect this
Section 6.8
, (A) make a Company Adverse Recommendation Change in response to an Intervening Event or Superior
Proposal and/or (B) terminate this Agreement pursuant to
Section 8.1(e)
to enter into a Company Acquisition Agreement with respect to a
Superior Proposal, in each case, if and only if, prior to taking of the action in either clause (A) or (B), the Company Board or a duly authorized committee thereof (including the Special
Committee) concludes in good faith, after consultation with Special Committee Financial Advisor and outside legal counsel, (x) that failure to take such action would be reasonably expected to
be inconsistent with the directors' fiduciary duties under applicable Law and (y) that, if applicable, such Acquisition Proposal constitutes a Superior Proposal;
provided
,
further
, that, prior to taking the action in either clause (A) or (B) above,
(i) the Company Board and the Special Committee has given Parent at least five (5) business days' prior written notice (such period, the "
Notice
Period
" and any such notice with respect to a Superior Proposal, the "
Initial Superior Proposal Notice
") of its intention to
take such action (which notice shall include, as applicable, a reasonably detailed written summary of the Intervening Event or unredacted copies of the Superior Proposal and any material transaction
agreements and financing commitments (provided that such financing commitments may include customary redactions) and a written summary of the material terms of any Superior Proposal not made in
writing, including any financing commitments relating thereto), (ii) after providing such notice, Company shall have negotiated, and shall have caused its Representatives to negotiate, with
Parent in good faith (to the extent Parent desires to negotiate) during the Notice Period to make such adjustments in the terms and conditions of this Agreement and the Financing as would permit the
Company Board or the Special Committee not to take such action, and (iii) following the end of the Notice Period, the Company Board or a duly authorized committee thereof (including the Special
Committee, if such committee still exists), shall have considered in good faith any proposed revisions to this Agreement and the Financing proposed in writing by Parent, and shall have determined,
after consultation with outside legal counsel and the Special Committee Financial Advisor, that failure to take such actions continues to be reasonably expected to be inconsistent with the directors'
fiduciary
duties under applicable Law even if such proposed revisions by the Parent to this Agreement and the Financing were to be given effect, and (iv) in the event of any change to the material terms
of such Superior Proposal (or amendment thereof) occurring prior to the No-Shop Period Start Date Company shall, in each case, have delivered to Parent an additional notice (each such notice, a
"
Superior Proposal Change Notice
") consistent with that described in clause (i) above and the Notice Period in clause (i) shall have
recommenced and the condition in clauses (ii) and (iii) shall have occurred again, except that the Notice Period shall be at least two (2) business days (rather than the five
(5) business days otherwise contemplated by
A-39
clause (i)
above). In the event that the No-Shop Period Start Date is scheduled to begin within (a) five (5) business days of delivery of an Initial Superior Proposal Notice or
(b) two (2) business days of delivery of a Superior Proposal Change Notice (such applicable notice period, the "
Holdover Notice Period
"),
the No-Shop Period Start Date solely with respect to the Acquisition Proposal that is the subject of the Holdover Notice Period (the "
Holdover
Proposal
") will be extended until 5:00 p.m., Eastern time, on the business day immediately following the final day of such Holdover Notice Period (the
"
Delayed No-Shop Period Start Date
").
(e) From
and after the date hereof, Company shall notify Parent as promptly as reasonably practicable (but in any event within twenty-four (24) hours) in the event
that (i) Company, its Subsidiaries, affiliates or any of their respective Representatives receives (A) an Acquisition Proposal or any amendment thereto or (B) any request for
discussions or negotiations, any request for access to the properties or books and records of Company or any of its Subsidiaries of which Company or any of its Subsidiaries or any of their respective
Representatives is or has become aware, or any request for information relating to Company or any of its Subsidiaries, in each case, by any person that could reasonably be expected to be considering
making an Acquisition Proposal or (ii) Company enters into any Acceptable Confidentiality Agreement (which notice shall include a copy of such Acceptable Confidentiality Agreement). Such notice
to Parent shall indicate the identity of the person or group of persons making such Acquisition Proposal or amendment thereto and provide (x) an unredacted copy of such written Acquisition
Proposal or amendment thereto (including, in each case, financing commitments with customary redaction) and any material transaction documents, and (y) with respect to any Acquisition Proposal
or amendment thereto not made in writing, a written summary of the material terms and conditions of each such Acquisition Proposal or amendment thereto. Company shall keep Parent informed, on a
reasonably current basis (and, in any event within twenty-four (24) hours of Company's knowledge of any such event) of any material developments, discussions or negotiations regarding any
Acquisition Proposals, or material changes to the terms of any such Acquisition Proposal or any amendment thereto (including copies of any written proposed agreements). Company hereby agrees that it
shall not, and shall not permit its Subsidiaries to, enter into any Contract that prohibits or restricts it from providing to Parent the information contemplated by this
Section 6.8(e)
or from
complying with the other provisions of this
Section 6.8
.
(f) Nothing
contained in this Agreement shall prevent Company or Company Board or the Special Committee from complying with Rules 14a-9, 14d-9 and 14e-2 under the
Exchange Act and Item 1012(a) of Regulation M-A promulgated under the Exchange Act with respect to an Acquisition Proposal or from issuing a "stop, look and listen" statement pending
disclosure of its position thereunder or making any required disclosure to Company's stockholders if, in the good faith judgment of the Company Board or the Special Committee, after consultation with
its outside legal counsel, the failure to do so would be inconsistent with its fiduciary duties to stockholders under applicable Law or such disclosure is otherwise required under applicable Law. For
the avoidance of doubt, complying with such obligations or making such disclosure shall not in any way limit or modify the effect that any such action has under this Agreement (including whether such
action constitutes a Company Adverse Recommendation Change).
6.9
Public Announcements
.
Except as expressly provided for in this Agreement, and unless and until a Company Adverse Recommendation Change has occurred, Parent and Company shall consult with each other before
issuing any press release or otherwise making any public statements about this Agreement or any of the transactions contemplated by this Agreement and shall not issue any such press release or make
any such public statement prior to such consultation, except as such party may reasonably conclude is required by applicable Law or any applicable exchange requirement or Order. Notwithstanding
anything to the contrary herein and without complying with the preceding sentence, (a) each party may make any public statement regarding the transactions contemplated by this
A-40
Agreement
in response to questions from the press, analysts, existing or potential investors, existing or potential lenders, or those attending industry conferences, and may make internal
announcements to employees, in each case to the extent (and only to such extent) that such statements are not inconsistent with the Information Statement or previous press releases, public disclosures
or public statements made jointly by the parties and do not reveal material non-public information regarding this Agreement or the transactions contemplated by this Agreement, (b) Company may
issue any press release or make any other public statement or comment to be issued or made with respect to any Acquisition Proposal or with respect to any actions contemplated by
Section 6.8(b)
(if
and only to the extent such public statement or comment is permitted by
Section 6.8
), (c) Parent may issue any press release or make any other public statement or comment (i) with respect
to an
Acquisition Proposal that has been publicly announced or is publicly known or (ii) in connection with the Financing (including any public filings in connection therewith) and (d) each
party may make any disclosure of information or public announcement concerning this Agreement and the transactions contemplated hereby in connection with any dispute between the parties regarding this
Agreement.
6.10
Transaction Litigation
.
Company shall promptly notify Parent in writing of any action, arbitration, audit, hearing, investigation, litigation, suit, subpoena or summons issued, commenced, brought, conducted or
heard by or before, or otherwise involving, any Governmental Entity or arbitrator pending or, to the knowledge of Company, threatened against Company, its Subsidiaries or any of their respective
directors or officers relating to the transactions contemplated by this Agreement, including the Merger ("
Transaction Litigation
") prior to the earlier
of the Effective Time or the termination of this Agreement. Prior to the earlier of the Effective Time or the termination of this Agreement pursuant to
Article VIII
, Company shall control the
defense of any Transaction Litigation threatened against Company or its Subsidiaries;
provided
,
however
, that Company shall (a) give Parent the right
to review and comment on all
material filings or responses to be made by Company in connection with any such Transaction Litigation (and Company shall in good faith take such comments into account), and the opportunity to
participate in the defense and settlement of, any such Transaction Litigation and (b) if Parent does not exercise such right to participate (subject to Company's control right), keep Parent
reasonably and promptly informed with respect to the status of such Transaction Litigation. Company agrees that it shall not settle, or offer to settle, any Transaction Litigation without the prior
written consent of Parent (such consent not to be unreasonably withheld, conditioned or delayed).
6.11
Takeover Statutes
.
Each party shall take all necessary steps within its control to exempt (or ensure the continued exemption of) the Merger and the other transactions contemplated hereby from any
applicable Takeover Statute now or hereafter in effect. If any Takeover Statute may become, or may purport to be, applicable to the transactions contemplated hereby, each party and its respective
board of directors will grant such approvals and take such actions within its control as are necessary so that the transactions contemplated by this Agreement may be consummated as promptly as
practicable on the terms contemplated hereby and otherwise act to eliminate or minimize the effects of any Takeover Statute on any of the transactions contemplated by this Agreement. Company and its
Subsidiaries shall not take any action to exempt any person from, or make any acquisition of securities or Equity Interests of Company by any person not subject to, any Takeover Statute or similar Law
that applies to Company with respect to an Acquisition Proposal or otherwise, except for Parent, Merger Sub or any of their respective Subsidiaries or affiliates, or the transactions contemplated by
this Agreement.
6.12
Exemption from Liability Under Section 16(b)
.
Prior to the Effective Time, Company shall take such steps as may be required to cause any disposition of shares of Company Common Stock or conversion of any derivative securities in
respect of shares of Company Common Stock including LLC Units and LLC Options by an individual subject to the reporting requirements of Section 16(a) of the Exchange Act in
connection with the consummation of the transactions contemplated by this
A-41
Agreement
to be exempt under Rule 16b-3 promulgated under the Exchange Act to the fullest extent possible.
6.13
Financing
.
(a) Each
of Parent and Merger Sub shall, and shall cause each of its affiliates to, use its reasonable best efforts to obtain and consummate the Financing on the terms and
conditions described in the Debt Commitment Letter (including the flex provisions), including using its reasonable best efforts to (i) comply with its obligations under the Debt Commitment
Letter, (ii) negotiate and enter into definitive agreements with respect to and as contemplated by the Debt Commitment Letter on terms and conditions (including flex provisions) no less
favorable to Parent and Merger Sub than those contained in the Debt Commitment Letter, (iii) satisfy on a timely basis all conditions applicable to Parent and Merger Sub contained in the Debt
Commitment Letter (including definitive agreements related thereto but excluding any conditions that have been waived), including the payment of any commitment, engagement or placement fees required
as a condition to the Financing, (iv) maintain in effect the Debt Commitment Letter and (v) consummate the Financing at or prior to the Closing Date (it being understood that it is not a
condition to Closing under this Agreement, nor to the consummation of the Merger, for Parent or Merger Sub to obtain the Financing or any alternative financing). Parent and Merger Sub shall keep
Company reasonably informed on a reasonably current basis and in reasonable detail of the status of its efforts to arrange the Financing (or replacement thereof) as Company may reasonably request;
provided
, that in no event will Parent or Merger Sub be under any obligation to disclose any information that is subject to attorney-client or similar
privilege if Parent or Merger Sub shall have used its reasonable best efforts to disclose such information in a way that would not waive such privilege. Parent and Merger Sub shall give Company prompt
notice (x) of any material breach or default by any party to the Debt Commitment Letter of which Parent or Merger Sub becomes aware, (y) of the receipt of any written notice from any
Lender with respect to any (1) actual or potential breach, default, termination or repudiation by any party to the Debt Commitment Letter of any provisions of the Debt Commitment Letter or
(2) material dispute or disagreement between or among any parties to the Debt Commitment Letter with respect to the obligation to fund the Financing or the amount of the Financing to be funded
on the Closing Date, and (z) if at any time for any reason Parent or Merger Sub believes in good faith that it will not be able to obtain all or any portion of the Financing on the terms and
conditions, in the manner or from the sources contemplated by the Debt Commitment Letter or any definitive agreements related to the Financing. As soon as reasonably practicable, but in any event
within two (2) business days of the date Company delivers to Parent or Merger Sub a written request, Parent and Merger Sub shall provide any information reasonably requested by Company relating
to any circumstance referred to in clause (x), (y) or (z) of the immediately preceding sentence. Parent shall not, without the prior written consent of Company, amend, modify,
supplement or waive any of the conditions or contingencies to funding contained in the Debt Commitment Letter or any other provision of, or remedies under, the Debt Commitment Letter in a manner that
(A) imposes additional or adversely modifies conditions or other contingencies to the availability of the Financing relative to those contained in the Debt Commitment Letter as of the date of
this Agreement, (B) would otherwise reasonably be expected to prevent or materially impair or delay
the funding of the Financing (or satisfaction of the conditions to the Financing) on the Closing Date or the Closing, or (C) reduces the aggregate amount of the Financing set forth in the Debt
Commitment Letter as of the date of this Agreement;
provided
that, for the avoidance of doubt, Parent may by joinder, amendment and restatement or
similar means add additional banks or financial institutions as arrangers, agents, committing parties or lenders under the Debt Commitment Letter. In the event all conditions applicable to the Debt
Commitment Letter have been satisfied, Parent shall use its reasonable best efforts to cause the Lenders to fund the Financing required to consummate the transactions contemplated by this Agreement on
the date
A-42
that
the Closing should occur pursuant to
Section 1.2
or, if such date has already passed, as promptly as practicable (including by paying or
causing to be paid any commitment or other fees arising, but excluding the commencement of litigation against such Person). In the event that any portion of the Financing becomes unavailable, Parent
shall notify Company and use its reasonable best efforts to arrange alternative financing from the same or other sources of financing on terms and conditions (including the flex provisions) no less
favorable to Parent and Merger Sub than those contained in the Debt Commitment Letter as of the date hereof, and in an amount sufficient to timely consummate the transactions contemplated by this
Agreement on the terms and conditions set forth herein. For the avoidance of doubt, Parent's obtaining of the Financing is not a condition to the obligations of Parent or Merger Sub to consummate the
Closing. Notwithstanding anything to the contrary herein, nothing in this Agreement shall require, and in no event shall the reasonable best efforts of Parent or Merger Sub be deemed or construed to
require, Parent or Merger Sub to commence litigation against any Lender, pay any fees in excess of those contemplated by the Debt Commitment Letter, or agree to any "market flex" terms less favorable
in any material respect to Parent than such corresponding market flex terms contained in or contemplated by the Debt Commitment Letter.
(b) Company
shall, and shall cause its Subsidiaries to, and shall request their respective Representatives to, at Parent's sole cost and expense, use reasonable best efforts
to cooperate with Parent, Merger Sub and their authorized Representatives in connection with the arrangement and consummation of the Financing (or any permitted replacement, amended, modified or
alternative financing), including (i) participating in a reasonable number of meetings and due diligence sessions on reasonable advance notice and at reasonable locations, (ii) promptly
furnishing Parent, Merger Sub and the Lenders with the Required Information and information which any lender providing or arranging the Financing has requested under applicable "know your customer"
and anti-money laundering rules and regulations, including USA PATRIOT Act, FATCA and OFAC at least five (5) business days prior to the Closing Date, to the extent requested at least
ten (10) business days prior to the Closing Date, (iii) assisting with the preparation of materials for rating agency presentations, bank information memoranda and similar
documents required in connection with the Financing (collectively, the "
Offering Materials
") and Company agrees that Parent and the Lenders shall be
permitted to include any logos of Company or any of its Subsidiaries in the Offering Materials, provided that such logos are not used in a manner that would reasonably be expected to harm or disparage
Company, its Subsidiaries or their marks,
(iv) cooperating in and assisting with the preparation of any pledge and security documents and other definitive financing documents and facilitating the pledge of collateral in connection with
the Financing, (v) executing and delivering (or using reasonable best efforts to obtain from its advisors), and causing its affiliates to execute and deliver (or use reasonable best efforts to
obtain from their advisors), customary certificates, accountants' comfort letters (and consents of accountants for use of their reports in any materials relating to the Financing and in connection
with any filings required to be made by Parent pursuant to the Securities Act or the Exchange Act where the financial statements of Company and its Subsidiaries included (or incorporated by reference)
in the Company SEC Reports or any of the other Required Information is included or incorporated by reference), or other documents and instruments relating to guarantees and other matters ancillary to
the Financing as may be reasonably requested by Parent as necessary and customary in connection with the Financing, (vi) providing authorization letters to the Lenders authorizing the
distribution of information to prospective lenders or investors and containing a representation to the Lenders that the public side versions of such documents, if any, do not include material
non-public information about Company or its Subsidiaries or Equity Interests, (vii) obtaining surveys and title insurance reasonably requested by Parent and customary for financings similar to
the Financing, (viii) taking all actions reasonably requested by Parent or Merger Sub to permit the Lenders to evaluate the Company's and its Subsidiaries' inventory, current assets and cash
management
A-43
systems
for the purpose of establishing collateral arrangements (including providing sufficient access to allow the Lenders (or their agents or representatives) to conduct an initial field examination
and inventory and rolling stock appraisals, (ix) executing and delivering, and causing its Subsidiaries to execute and deliver customary certificates (excluding solvency certificates), and
(x) facilitating the entrance into other documents and instruments relating to guarantees, the pledge of collateral and other matters ancillary to the Financing as may be reasonably requested
by Parent in connection with the Financing and otherwise reasonably facilitating the pledge of collateral and providing of guarantees contemplated by the Debt Commitment Letter (including, without
limitation and to the extent required by the Debt Commitment Letter to be obtained or delivered at the Closing, executing and delivering agreements, documents or certificates that facilitate the
creation, perfection or enforcement of liens securing the Financing as requested by Parent or Merger Sub or the Lenders, in each case, in form and substance reasonably satisfactory to Parent, and
delivering original stock certificates to the Lenders or their agents or representatives, together with blank stock powers, at the Closing);
provided
,
that (A) Company shall not be required to become subject to any obligations or liabilities with respect to such agreements or documents that would become effective prior to the Effective Time
and (B) none of Company or any of its Subsidiaries shall be required to provide access to or disclose information if Company reasonably determines that such access or disclosure would
jeopardize the attorney-client privilege of Company or any of its Subsidiaries or contravene any Law or any material contract to which Company or any of its Subsidiaries is a party;
provided
that
Company and its Subsidiaries will use reasonable best efforts to provide such information in a manner that does not violate such agreement
or Law or waive such privilege. Company shall, and shall cause its Subsidiaries to, promptly supplement the Required Information to the extent that such Required Information, to the knowledge of the
Company or any Subsidiary, fails to be Compliant. Parent shall, following written demand from
Company, reimburse Company for all reasonable and documented out-of-pocket costs incurred by Company or its Subsidiaries in connection with such cooperation. Parent and Merger Sub acknowledge and
agree that Company and its affiliates and their respective Representatives shall not have any responsibility for, or incur any liability to any person under or in connection with, the arrangement or
marketing of the Financing or any alternative financing that Parent or Merger Sub may raise in connection with the transactions contemplated by this Agreement. Parent and Merger Sub shall, on a joint
and several basis, indemnify and hold harmless Company, its affiliates and their respective Representatives from and against any and all damages suffered or incurred by them in connection with the
arrangement or marketing of the Financing or any alternative financing and any information utilized in connection therewith (other than information provided in writing by Company or its Subsidiaries
expressly for use in connection therewith and other than any damages resulting from the gross negligence or willful misconduct of such indemnified Person). Company shall, and shall cause its
Subsidiaries to, and shall request their respective Representatives to, at Parent's sole cost and expense, use reasonable best efforts to provide information and cooperation to Parent required in
connection with any Parent equity financing contemplated under the Debt Commitment Letter (including financial statements complying with Regulation S-X under the Securities Act, comfort
letters, accountants' consents and customary certificates);
provided
,
however
, that all terms and
conditions in this Agreement limiting or qualifying Company's and its Subsidiaries' obligations with respect to the Financing or any alternative financing shall apply to this sentence
mutatis mutandis
.
A-44
(c) Without
limiting the generality of
Section 6.13(b)
, from the date hereof until the Closing, Company shall deliver
to Parent and the Lenders (i) within ninety (90) days after the end of any fiscal year ending after the date hereof, audited consolidated balance sheets and related consolidated
statements of income, shareholder's equity and cash flows of Company and its Subsidiaries for such fiscal year, (ii) within forty-five (45) days of the end of any fiscal quarter ending
after the date hereof, unaudited consolidated balance sheets and related consolidated statements of income and cash flows of Company and its Subsidiaries for such fiscal quarter and
(iii) within thirty (30) days after the end of any fiscal month beginning with (and including) June, 2017, unaudited consolidated balance sheets and related consolidated statements of
income and cash flows of Company and its Subsidiaries for each such preceding month (collectively, the "
Supplemental Financial Statements
").
6.14
Obligations of Merger Sub
.
Parent shall take all action necessary to cause Merger Sub to perform its obligations under this Agreement and to consummate the Merger on the terms and subject to the conditions set
forth in this Agreement and not to conduct any operations other than as required by this Agreement. Parent shall be responsible for any breach of this Agreement by Merger Sub as if such breach was a
breach by Parent.
6.15
Credit Agreements
.
Company shall deliver to Parent, at least five (5) business days prior to the Effective Time, a payoff letter with respect to each of the Credit Agreements, which payoff letter
shall provide, subject to customary exceptions, that upon receipt from or on behalf of Company of the payoff amount set forth in the payoff letter, (a) the Indebtedness incurred pursuant to the
Credit Agreements and instruments related thereto shall be satisfied, and all obligations of the lenders terminated (other than those that customarily survive in payoff letters), and (b) all
Liens relating to the assets, rights and properties of Company or any of its Subsidiaries granted pursuant to the Company Credit Agreement shall be released and terminated.
ARTICLE VII
CONDITIONS PRECEDENT
7.1
Conditions to Each Party's Obligation to Effect the Merger.
The respective obligations of each party to
effect the Merger are subject to the satisfaction or waiver (to the extent permitted by applicable Law) at or prior to
the Effective Time of each of the following conditions:
(a)
Requisite Company Vote.
This Agreement shall have been duly adopted by the stockholders of Company by the
Requisite Company Vote and the Information Statement shall have been mailed to Company's stockholders at least twenty (20) days prior to the Closing, in each case in accordance with applicable
Law (including, in the case of the Information Statement, Regulation 14C of the Exchange Act) and the Company Certificate.
(b)
No Injunctions or Restraints; Illegality.
No Governmental Entity having jurisdiction over any of the parties
shall have enacted, issued, promulgated, enforced or entered any Law or Order, whether temporary, preliminary or permanent, that prohibits, makes illegal, restrains, enjoins or otherwise prohibits
consummation of the Merger or the other transactions contemplated by this Agreement.
(c)
Regulatory Approval.
Any waiting period, as applicable, under the HSR Act shall have expired or been
terminated.
7.2
Conditions to Obligations of Parent and Merger Sub.
The obligation of Parent and Merger Sub to
effect the Merger is also subject to the satisfaction, or waiver by Parent (to the extent permitted by applicable Law),
at or prior to the Effective Time, of the following conditions:
A-45
(a)
Representations and Warranties.
The representations and warranties of Company set forth in
(i)
Section 3.1(a)
, the first sentence of
Section 3.1(c)
,
Section 3.3(a)
, the second
sentence of
Section 3.7
,
Section 3.8(b)
and
Section 3.20
shall be true and correct in all
respects as of the date
of this Agreement and as of immediately prior to the Effective Time as though made on and as of such time (except to the extent such representations and warranties speak as of an earlier date, which
shall be true and correct in all respects as of that date), (ii) the first sentence of
Section 3.1(d), Section 3.2
and the first
sentence of
Section 3.7
shall be true and correct in all respects as of the date of this Agreement and as of immediately prior to the Effective
Time as though made on and as of such time (except to the extent such representations and warranties speak as of an earlier date, which shall be true and correct in all respects as of that date)
(other than
de minimis
inaccuracies) and (iii)
Section 3.18
(together with the
representations and warranties listed in clauses (i) and (ii) above, the "
Company Fundamental Representations
") shall be true and correct
in all material respects as of the date of this Agreement and as of immediately prior to the Effective Time as though made on and as of such time. All other representations and warranties of Company
set forth in this Agreement (read without giving effect to any qualification or limitation as to materiality set forth in such representations or warranties, including those indicated by the words
"Company Material Adverse Effect," "in all material respects," "in any material respect," "material" or "materially," but, in each case, after giving effect to the lead-in to
Article III
) shall be
true and correct in all respects as of the date of this Agreement and as of immediately prior to the Effective Time as
though made on and as of such time (except to the extent such representations and warranties speak as of an earlier date, which shall be true and correct in all respects as of that date), except where
the failure or failures of such representations and warranties to be so true and correct, has not had and would not reasonably be expected to have, either individually or in the aggregate, a Company
Material Adverse Effect.
(b)
Performance of Obligations of Company.
Company shall have performed and complied in all material respects
with all of the agreements, covenants and obligations required to be performed by or complied with by it under this Agreement at or prior to the Effective Time.
(c)
Company Material Adverse Effect.
Since the date of this Agreement, no Company Material Adverse Effect shall
have occurred and be continuing and no event, change or effect shall have occurred that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
(d)
Officers Certificate
. Parent shall have received a certificate of Company, signed by the chief executive
officer or chief financial officer of Company, certifying as to the matters set forth in
Section 7.2(a), Section 7.2(b)
and
Section 7.2(c)
.
(e)
Exchanges.
The Exchanges shall have been consummated pursuant to the terms and conditions of the Exchange
Agreements.
7.3
Conditions to Obligations of Company.
The obligation of Company to effect the Merger is also
subject to the satisfaction, or waiver by Company (to the extent permitted by applicable Law), at or prior
to the Effective Time, of the following conditions:
(a)
Representations and Warranties.
The representations and warranties of Parent and Merger Sub set forth in
this Agreement (read without giving effect to any qualification or limitation as to materiality set forth in such representations or warranties, including those indicated by the words "Parent Material
Adverse Effect," "in all material respects," "in any material respect," "material" or "materially," but, in each case, after giving effect to the lead-in to
Article IV
) shall be true and correct in
all respects as of the date of this Agreement and (as of immediately prior to the Effective Time as
though made on and as of such time except to the extent such representations and warranties speak as of an earlier date, which shall be true and correct in all respects as of that date); except where
the failure or failures of such representations
A-46
and
warranties to be so true and correct, either individually or in the aggregate, would not reasonably be expected to have a Parent Material Adverse Effect.
(b)
Performance of Obligations of Parent and Merger Sub.
Each of Parent and Merger Sub shall have performed or
complied in all material respects with the agreements, covenants and obligations required to be performed by or complied with by it under this Agreement at or prior to the Effective Time.
(c)
Officers Certificate
. Company shall have received a certificate of Parent, signed by the chief executive
officer or chief financial officer of Parent, certifying as to the matters set forth in
Section 7.3(a)
and
Section 7.3(b)
.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1
Termination.
This Agreement may be terminated at any time prior to the Effective Time, whether before or
after adoption of this Agreement by the stockholders of Company:
(a) by
mutual written consent of Parent and Company;
(b) by
either Parent or Company if:
(i) any
Governmental Entity of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any Law or Order in effect at the time of such
termination that permanently enjoins or otherwise prohibits or makes illegal the consummation of the Merger or any of the other transactions contemplated hereby, and such Law or Order shall have
become final, binding and nonappealable;
provided
,
however
, that the right to terminate this Agreement
under this
Section 8.1(b)(i)
shall not be available to a party if the issuance of such final, binding and nonappealable Law or Order was
primarily due to the failure of such party to perform any of its agreements, covenants or obligations under this Agreement or the breach of any representation or warranty of such party set forth in
this Agreement; or
(ii) if
the Merger shall not have been consummated on or before January 14, 2018 (the "
Outside Date
");
provided
,
however
, either Parent or Company, by written notice to the other party, shall have the right
to extend the Outside Date to April 10, 2018 if all of the conditions to Closing set forth in
Article VII
(other than those conditions
that by their nature can only be satisfied at the Closing, but are capable of being satisfied at such time) (it being understood that the conditions set forth in
Section 7.1(a)
shall be deemed to
be satisfied for purposes of this definition upon mailing of the Information Statement) other than the
condition set forth in
Section 7.1(c)
are satisfied on, or have been waived prior to, January 13, 2018;
provided
,
further
,
however
, that the right to terminate
this Agreement pursuant to this
Section 8.1(b)(ii)
shall not be available to (A) Parent, if a breach by Parent or Merger Sub of any representation, covenant or agreement
of this Agreement has been the primary cause of, or resulted in, the failure to consummate the Merger by such date; or (B) Company, if Company's breach of any representation, covenant or
agreement of this Agreement has been the primary cause of, or resulted in, the failure to consummate the Merger by such date.
(c) by
either Parent or Company if there shall have been a breach of any of the agreements, covenants or obligations or any of the representations or warranties (or any such
representation or warranty shall cease to be true) set forth in this Agreement on the part of Company, in the case of a termination by Parent, or Parent, in the case of a termination by Company, which
breach or failure to be true, either individually or in the aggregate with all other breaches by such party (or failures of such representations or warranties to be true), would give rise to, if
occurring or continuing on the Closing Date, the failure of a condition set forth in
Section 7.2(a)
or
(b)
or
A-47
Section 7.3(a)
or
(b)
, as the case may be, and which is not cured within the earlier of the Outside Date and thirty
(30) days following written notice to Company, in the case of a termination by Parent, or to Parent, in the case of a termination by Company, or by its nature or timing is incapable of being
cured during such period;
provided
, that the terminating party (or Merger Sub, in the case of a termination by Parent) is not then in material breach of
any representation, warranty, agreement, covenant or other obligation contained herein which breach or failure to be true, either individually or in the aggregate with all other breaches by such party
(or failures of such representations or warranties to be true), would give rise to or constitute, if occurring or continuing on the Closing Date, the failure of a condition set forth in
Section 7.2(a)
or
(b)
or
Section 7.3(a)
or
(b)
, as the case may be;
(d) by
Parent, if: (i) the Company Board shall have effected a Company Adverse Recommendation Change; (ii) Company shall have entered into, or publicly
announced its intention to enter into, a Company Acquisition Agreement (other than an Acceptable Confidentiality Agreement); or (iii) Company, the Company Board or the Special Committee shall
have publicly announced its intention to do any of the foregoing;
(e) by
Company prior to the No-Shop Period Start Date (or, solely with respect to a Holdover Proposal, the Delayed No-Shop Period Start Date), in order to substantially
concurrently enter into a Company Acquisition Agreement with respect to a Superior Proposal that the Company Board formally authorizes in full compliance with the terms of this Agreement; provided
that (x) prior to or concurrently with, and as a condition to, such termination, Company pays Parent the Termination Fee
due under
Section 8.2
and (y) Company has complied in all material respects with the requirements of
Section 6.8(d)
prior to taking action
pursuant to this
Section 8.1(e)
; or
(f) by
Company, if (i) all of the conditions to Closing set forth in
Section 7.1
and
Section 7.2
have been satisfied and continue to be satisfied
(other than conditions that, by their nature, are to be satisfied at Closing and
which were, at the time of termination, capable of being satisfied), (ii) Parent and Merger Sub have failed to consummate the Closing on the date the Closing should have occurred pursuant to
Section 1.2
, (iii) Company has delivered written notice of such failure to Parent, which notice shall irrevocably confirm that
(A) the conditions set forth in
Section 7.1
and
Section 7.3
(other than conditions
that, by their nature, are to be satisfied at Closing and which are fully capable of being satisfied at Closing) have been satisfied or waived and (B) Company is ready, willing and able to
consummate the Merger, and (iv) Parent and Merger Sub fail to consummate the Closing within three (3) business days of receipt of such notice; provided, that during such three
(3) business day period following the delivery by Company of such notice, no party shall be entitled to terminate this Agreement pursuant to
Section 8.1(b)(ii)
.
The
party desiring to terminate this Agreement pursuant to
clause (b)
,
(c)
,
(d)
,
(e)
or
(f)
of this
Section 8.1
shall give written notice of such termination to the each other party in accordance with
Section 10.5
, specifying with particularity
the reason for such termination and the provision or provisions of this
Section 8.1
pursuant to which such termination is effected. Such termination shall be effective immediately upon delivery of
such written notice
(except to the extent a party has the right under this
Section 8.1
to cure the basis for such termination, then the termination shall become
effective upon the expiration of such cure period).
8.2
Effect of Termination
.
(a) (i)
In the event of termination of this Agreement by either Parent or Company as provided in
Section 8.1
, this
Agreement shall forthwith become null and void,
ab initio
, and have no effect, and none of Parent, Company, Merger Sub, any of their respective
Subsidiaries or any of the officers, directors or other Representatives of any of them shall have any liability of any nature whatsoever under this Agreement, or in connection with the transactions
contemplated hereby,
A-48
except
that
Sections 6.1(b)
, this
Section 8.2
and
Article X
(and any related definitions set forth
in this Agreement) shall survive any termination of this Agreement, and
(ii) notwithstanding anything to the contrary contained in this Agreement, neither Parent nor Company shall be relieved or released from any liabilities or damages arising out of its Willful
and Material Breach of any provision of this Agreement.
(b) In
the event that:
(i) (A)
after the date hereof an Acquisition Proposal shall have been publicly disclosed or otherwise made or communicated to Company, the Company Board or a duly
authorized committee (including the Special Committee) or made directly to the stockholders of Company and not withdrawn prior to termination of this Agreement, and (B) this Agreement is
terminated by Company or Parent pursuant to
Section 8.1(b)(ii)
or by Parent pursuant to
Section 8.1(c)
(other than in respect of a breach of
Section 6.8
) and (C) within
twelve (12) months of the date this Agreement is terminated, Company enters into a definitive agreement with respect to an Acquisition Proposal or consummates an Acquisition Proposal;
provided
, that for
purposes of
clause (C)
of this
Section 8.2(b)(i)
, all references in the definition of Acquisition Proposal to "20%" shall instead refer to "50%";
(ii) this
Agreement is terminated by Company pursuant to
Section 8.1(e)
; or
(iii) this
Agreement is terminated by Parent pursuant to (x)
Section 8.1(c)
in respect of a material breach of
Section 6.8
or (y)
Section 8.1(d)
.
then,
in any such event under clause (i), (ii) or (iii) of this
Section 8.2(b)
, Company shall pay as directed by Parent the
Termination Fee by wire transfer of immediately available funds (x) in the case of
Sections 8.2(b)(iii)
, within three (3) business
days after such termination, (y) concurrently with such termination if pursuant to
Section 8.1(e)
or (z) in the case of
Section 8.2(b)(i)
, concurrently with the earlier of entering into a definitive agreement with respect to an Acquisition Proposal or consummating
an Acquisition Proposal. The parties agree and understand that in no event shall Company be required to pay the Termination Fee on more than one occasion and in no event shall Company be required to
pay more than one Termination Fee. In the event that Parent shall be entitled to receive and receives full payment of the Termination Fee from or on behalf of Company pursuant to this
Section 8.2(b)
, the receipt of the Termination Fee (and, if applicable, any interest thereon and enforcement costs pursuant to
Section 8.2(c)
) shall be deemed to be liquidated damages for any and all losses or damages suffered or incurred by Parent, Merger Sub and any of
their respective affiliates as a result of the actions of
Company or its affiliates in connection with this Agreement (and the termination hereof), the transactions contemplated hereby (and the abandonment thereof) or any matter forming the basis for such
termination, and shall be the sole monetary remedy of Parent, Merger Sub and their respective affiliates;
provided
that nothing in this
Section 8.2(b)
shall limit Parent's rights under
Section 10.12
and receipt of the
Termination Fee (and, if applicable, any interest thereon and enforcement costs pursuant to
Section 8.2(c)
) shall not be the exclusive remedy of
Parent, Merger Sub and any of their respective affiliates or constitute liquidated damages in the event of Willful and Material Breach.
(c) Notwithstanding
anything to the contrary in this
Article VIII
, in the event that Company fails to promptly pay the
Termination Fee when due, and if Parent or Merger Sub commences an action in order to obtain such payment that results in a judgment against Company, then Company shall pay Parent, together with the
Termination Fee (A) interest on the Termination Fee, as applicable, from the date the Termination Fee was required to be paid through the date of payment at a rate per annum equal to the prime
rate as published in the Wall Street Journal, Eastern Edition, in effect on the date the Termination Fee was required to be paid and (B) any out-of-pocket fees, costs and expenses (including
reasonable legal fees) incurred by or on behalf of Parent in connection with any such action.
A-49
(d) Notwithstanding
anything to the contrary in this Agreement, but subject to Parent's rights set forth in
Section 10.12
, in the circumstances where the Parent is entitled to receive the Termination Fee (and any
other amounts payable hereunder) from
Company pursuant to
Section 8.2(b)
, receipt of such payment (and, if applicable, any amounts due under
Section 8.2(c)
) shall be the sole and
exclusive remedy of Parent and Merger Sub against Company and its Subsidiaries and any of their respective
former, current or future officers, directors, partners, stockholders, managers, members or affiliates (collectively, "
Company Related Parties
") for any
loss suffered as a result of the failure of the Merger to be consummated or for a breach or failure to perform hereunder or otherwise, and upon payment of such amount(s), none of the Company Related
Parties shall have any further liability or obligation relating to or arising out of this Agreement or the Merger, except in each case in respect of any Willful and Material Breach or as otherwise
provided in any other Transaction Document.
(e) The
parties acknowledge and hereby agree that the provisions of this
Section 8.2
are an integral part of the
transactions contemplated by this Agreement (including the Merger), and that, without such provisions, the parties would not have entered into this Agreement.
ARTICLE IX
DEFINITIONS
9.1
Definitions.
For purposes hereof, the following terms when used herein shall have the respective
meanings set forth below:
"
Acceptable Confidentiality Agreement
" means a confidentiality agreement that contains terms that are no less favorable to Company in the
aggregate than those contained in the Confidentiality Agreement and that contains customary standstill provisions that are reasonably acceptable to Parent;
provided
that (a) the standstill
provisions shall provide that a person may make a non-public Acquisition Proposal to the Company Board or the
Special Committee and (b) the form attached hereto as
Exhibit D
is deemed acceptable;
provided
further
, such confidentiality agreement shall not prohibit compliance by Company with any of the provisions of
Section 6.8
.
"
Acquisition Proposal
" shall mean, other than the transactions contemplated by this Agreement, any offer, proposal or inquiry relating to,
or any third party indication of interest in, relating to, in a single transaction or series of related transactions, any direct or indirect (a) acquisition of more than 20% of the consolidated
assets of Company and its Subsidiaries taken as a whole (based on the fair market value thereof), including through the acquisition of one or more Subsidiaries of Company owning such assets,
(b) acquisition of beneficial ownership (as defined in Rule 12d-3 under the Exchange Act) of more than 20% of the outstanding Equity Interests of Company or any of its Subsidiaries,
(c) tender offer or exchange offer that if consummated would result in any person or group beneficially owning more than 20% of the outstanding Equity Interests of Company or any of its
Subsidiaries, (d) merger, consolidation, share exchange, other business combination, reorganization, recapitalization, license, joint venture, partnership, liquidation, dissolution or other
similar transaction involving (i) Company or its Subsidiaries whose assets, individually or in the aggregate, constitute more than twenty percent (20%) of the consolidated assets of Company and
its Subsidiaries, taken as a whole (based on the fair market value thereof), or (ii) more than 20% of the aggregate Equity Interests of Company or of the surviving entity,
(e) liquidation or dissolution of Company or (f) any combination of the foregoing.
A-50
"
Action
" means any claim, action, suit, audit, charge, assessment, complaint, grievance, arbitration, or any proceeding, or, to the
applicable party's knowledge, any investigation or inquiry, whether at law in equity or otherwise, in each case, that is by or before any Governmental Entity or arbitrator.
"
Charter Documents
" means, respectively, (i) the Company Certificate, (ii) the Company Bylaws and (iii) the
certificate of incorporation, articles of incorporation, bylaws, certificate of formation, limited liability company agreement, operating agreement or other organizational documents, each as amended
to date, of each Subsidiary of Company.
"
Code
" means the Internal Revenue Code of 1986, as amended.
"
Company Benefit Plans
" means all employee benefit plans (as defined in Section 3(3) of ERISA), whether or not subject to ERISA,
and all bonus, equity, equity-based, incentive compensation, deferred compensation, retirement, pension, consulting, medical, dental, vision, disability, welfare, fringe benefit, paid time off,
perquisite, retiree medical or life insurance, supplemental retirement, retention, change in control, employment, termination, and severance plans, programs, contracts, agreements or arrangements, in
any case, maintained, contributed to, or required to be contributed to, by Company or any of its Subsidiaries or with respect to which Company or any of its Subsidiaries has any liability.
"
Company Class A Common Stock
" means the Class A common stock, par value $0.01 per share, of Company.
"
Company Class B Common Stock
" means the Class B common stock, par value $0.01 per share, of Company.
"
Company Common Stock
" means the Company Class A Common Stock and the Company Class B Common Stock.
"
Company ERISA Affiliate
" means any entity which together with Company would be deemed a "single employer" within the meaning of
Section 4001 of ERISA or Section 414 of the Code.
"
Company Material Adverse Effect
" means any event, circumstance, occurrence, fact, condition, development, effect or change that
(a) has a material adverse effect on the ability of Company to perform its obligations under this Agreement and to consummate the Merger and the transactions contemplated by this Agreement or
(b) would reasonably be expected to, individually or in the aggregate, be materially adverse to the business, properties, assets, results of operations or condition (financial or otherwise) of
Company and its Subsidiaries, taken as a whole; provided, that in no event shall any events, circumstances, occurrences, facts, conditions, developments, effects or changes, alone or in combination,
be deemed to constitute or be taken into account in determining whether there has been or may be a Company Material Adverse Effect under clause (b) to the extent arising out of, relating to or
resulting from any of the following: (i) changes generally affecting the U.S. economy or U.S. political conditions, including the results of any primary or general elections,
(ii) changes in general financial, debt, credit, capital or banking markets or conditions (including any disruption thereof) in the United States, (iii) changes in interest, currency or
exchange rates or the price of any commodity, security or market index, (iv) changes in legal or regulatory conditions, including changes or proposed changes in Law, GAAP or other accounting
principles or requirements, or standards, interpretations or enforcement thereof or the failure of any such proposed, discussed or contemplated changes to be implemented, (v) changes in
Company's and its Subsidiaries' industry in general or customary seasonal fluctuations in the business of Company and its Subsidiaries, (vi) any change in the market price or trading volume of
any securities or Indebtedness of Company and its Subsidiaries, any decrease of the ratings or the ratings outlook for Company and its Subsidiaries by any applicable rating agency, or the change in,
or the failure of Company or its Subsidiaries to meet,
A-51
or
the publication of any report regarding (or relating to), any internal or public projections, forecasts, budgets or estimates of or relating to Company and its Subsidiaries for any period,
including with respect to revenue, earnings, cash flow or cash position (it being understood that the underlying causes of such change, decrease or failure may, if they are not otherwise excluded from
the definition of
Company Material Adverse Effect, be taken into account in determining whether a Company Material Adverse Effect has occurred), (vii) the occurrence, escalation, outbreak or worsening of any
hostilities, war, police action, acts of terrorism or military conflicts, whether or not pursuant to the declaration of an emergency or war or criminal or similar actions (including cyber-attacks and
computer hacking) in the United States, (viii) the existence, occurrence or continuation of any earthquakes, floods, hurricanes, tropical storms or other natural disasters, (ix) the
announcement or pendency of this Agreement, the identity of the parties hereto or any of their respective affiliates, including any actual or potential loss or impairment after the date hereof of any
Contract or any customer, supplier, investor, landlord, partner, employee or other business relation due to any of the foregoing in this clause (ix), (x) the taking or not taking of any
action to the extent expressly required by this Agreement, or (xi) any actions taken, or not taken, at the express written request of Parent, except, in the case of clauses (i), (ii),
(iii), (iv), (v), (vi), (vii) and (viii), to the extent (and only to the extent) any such event, circumstance, occurrence, fact, condition, development, effect or change has a disproportionate
adverse impact on Company and its Subsidiaries, taken as a whole, relative to other similarly situated participants in the industry in which Company and its Subsidiaries operate.
"
Company Owned Intellectual Property
" means all Intellectual Property owned by, or purported to be owned by Company or any of its
Subsidiaries.
"
Company Registered Owned Intellectual Property
" means all of the Registered Intellectual Property owned by, or purported to be owned by,
filed in the name of or applied for by Company or any of its Subsidiaries.
"
Company Stock Plan
" means the Neff Corporation 2014 Incentive Award Plan and any other equity or equity-based plan of Company pursuant to
which awards remain outstanding as of immediately prior to the Effective Time other than the Neff Holdings LLC Management Equity Incentive Plan.
"
Competition Laws
" means applicable supranational, national, federal, state, provincial or local Law designed or intended to prohibit,
restrict or regulate actions having the purpose or effect of monopolizing or restraining trade or lessening competition in any other country or jurisdiction, including the HSR Act, the Sherman Act,
the Clayton Act, and the Federal Trade Commission Act, in each case, as amended and other similar competition or antitrust Laws of any jurisdiction other than the United States.
"
Compliant
" means, with respect to the Required Information, (a) that such Required Information does not contain any untrue
statement of material fact or omit to state a material fact necessary in order to make such Required Information, in light of the circumstances under which it was made, not misleading, (b) no
audit opinion with respect to any financial statements contained in the Required Information shall have been withdrawn, amended or qualified, and Company has not indicated its intent to restate any
historical financial statements of Company or its Subsidiaries, or that any such restatement is under consideration, (c) such Required Information is, and remains throughout the Marketing
Period, compliant in all material respects with all requirements of Regulation S-K and Regulation S-X under the Securities Act (excluding information required by Regulation S-X
Rule 3-10 and Regulation S-X Rule 3-16 but including customary information with respect to non-guarantors)
applicable to offerings of debt securities on a registration statement on Form S-1, and (d)(i) the financial statements and other financial information included in such Required Information
that have been prepared by Company are, and remain throughout the
A-52
Marketing
Period sufficient to permit Company and its Subsidiaries' independent accountants to issue customary comfort letters to Parent's financing sources (including Lenders, underwriters, placement
agents or initial purchasers) with respect to such Required Information (including customary negative assurance comfort with respect to periods following the end of the latest fiscal year and fiscal
quarter for which historical financial statements are included) on any date during the Marketing Period, and (ii) such independent accountants have delivered drafts of customary comfort
letters, including customary negative assurance comfort, and have confirmed they are prepared to issue such comfort letters during the Marketing Period.
"
Contract
" means any contracts, agreements, licenses, notes, bonds, mortgages, indentures, leases, deeds of trust, instruments,
commitments or other legally binding instruments or legally binding arrangements (including, in each case, any amendments or modifications thereto), in each case, whether written or oral.
"
Copyrights
" means copyrights and works of authorship (whether or not registered) and all registrations or applications for registration
of the foregoing in any jurisdiction, and any renewals or extensions thereof.
"
Credit Agreements
" means the (a) Amended and Restated Senior Secured Credit Agreement, dated as of October 1, 2010, as
amended and restated as of November 20, 2013, as further amended and restated as of February 25, 2016, among Neff LLC, Neff Holdings LLC, the other Credit Parties party
thereto, the Lenders party thereto from time to time, Bank of America, N.A., as Agent, Swing Line Lender and L/C Issuer, Bank of America, N.A., as Collateral Agent, Wells Fargo Capital
Finance, LLC and SunTrust Bank, as Syndication Agents, Regions Bank, as Documentation Agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Capital
Finance, LLC and SunTrust Robinson Humphrey, Inc., as Joint Lead Arrangers and Book Runners; (b) the Second Lien Credit Agreement, dated as of June 9, 2014, among Neff
Holdings LLC, Neff LLC, Neff Rental LLC, the Lenders Party thereto, Credit Suisse AG as Administrative Agent and Collateral Agent, Credit Suisse Securities (USA) LLC, as
Joint Bookrunner and Joint Lead Arranger, and Jefferies Finance LLC, as Joint Bookrunner, Joint Lead Arranger and Syndication Agent, as amended by that Amendment No. 1 to Second Lien
Credit Agreement, dated as of October 14, 2014; the (c) Guarantee and Collateral Agreement, dated as of June 9, 2014, by and among Neff Rental LLC, Neff Holdings LLC
and Neff LLC,
as Grantors, and Credit Suisse AG, as administrative agent and collateral agent; (d) the ISDA Master Agreement, dated February 25, 2015 by and between Bank of America, N.A. and
Neff LLC, as supplemented by that schedule to the Master Agreement, dated as of February 25, 2015; and (e) the ISDA Master Agreement, dated February 27, 2015 by and between
SunTrust Bank and Neff LLC, as supplemented by that Confirmation of Swap Transaction, dated as of March 25, 2015.
"
Equity Interest
" means, with respect to any person, any share, share capital, capital stock, partnership, limited liability company,
member or similar interest in such person, and any option, warrant, right or security (including debt securities) convertible, exchangeable or exercisable thereto or therefor.
"
ERISA
" means the Employee Retirement Income Security Act of 1974, as amended.
"
Exchange Act
" means the Securities Exchange Act of 1934, as amended.
"
Exchange Ratio
" means the quotient of (x) the Merger Consideration, divided by (y) the volume-weighted average closing
price of one Parent Common Share for the five (5) trading day period ending on the last such trading day immediately preceding the Closing Date, calculated using U.S. volumes during normal
market hours.
"
GAAP
" means U.S. generally accepted accounting principles.
A-53
"
Governmental Entity
" means any federal, state, county, municipal, local or foreign government or any political subdivision thereof, and
any entity, body, agency, commission, court, justice, tribunal or other instrumentality exercising executive, legislative, judicial, regulatory or administrative functions of government, including any
SRO.
"
Hazardous Material
" means any hazardous or toxic substance, material or waste, pollutants or contaminants, including petroleum, petroleum
constituents, asbestos, polychlorinated biphenyls and perfluorinated compounds.
"
HSR Act
" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
"
Indebtedness
" means all obligations of a person (a) for borrowed money, (b) evidenced by bonds, debentures, notes or
similar instruments for the payment of which a person is responsible or liable, (c) in respect of letters of credit and bankers' acceptances or similar credit transactions in each case, to the
extent drawn, or in respect of capital leases, (d) under interest rate, currency or commodity derivatives or hedging transactions (valued at the termination value thereof) and
(e) guaranteeing any obligations of any other person of the type described in the foregoing.
"
Intellectual Property
" means Information Systems, Trademarks; Patents; Trade Secrets; and Copyrights.
"
Intervening Event
" means a material event, occurrence or fact first occurring or arising after the date hereof that was not known (and
not reasonably foreseeable) to the Company Board as of the date of this Agreement, other than any event, occurrence or fact that relates to an Acquisition Proposal.
"
IRS
" means the United States Internal Revenue Service.
"
Laws
" means any law, constitution, treaty, statute, common law principle, code, rule, regulation, order, ruling, decision, judgment,
decree, writ or other similar authority issued, enacted, adopted, promulgated or otherwise put into effect by or under the authority of any Governmental Entity.
"
Lender Related Parties
" means the affiliates of the Lenders and the Lenders' and their affiliates' respective current, former and future
directors, officers, general or limited partners, shareholders, members, managers, controlling persons, employees, representatives and agents, and the respective successors and assigns of each of the
foregoing.
"
Liens
" means liens, pledges, mortgages, charges, encumbrances, hypothecations, options, rights of first refusal, rights of first offer
and security interests of any kind or nature whatsoever.
"
LLC Options
" means each option to purchase LLC Units granted by Holdings, whether vested or unvested, that is outstanding and
unexercised.
"
Marketing Period
" means, subject to the following sentence, the first period of twenty (20) consecutive business days after the
date of this Agreement during which (a) Parent shall have the Required Information that is Compliant and (b) the conditions set forth in
Section 7.1(a)
,
Section 7.1(c)
and
Section 7.2(b)
have been satisfied (it being understood that the conditions set forth in
Section 7.1(a)
shall be deemed to be satisfied for purposes of this definition upon mailing of the Information Statement) and nothing has
occurred and no condition exists that would cause any of the conditions set forth in
Section 7.1
and
Section 7.2
to fail to be satisfied assuming
Closing were to be scheduled
for any time during such twenty (20) consecutive business day period;
provided
, that if Company shall in good faith reasonably believe it has
provided the Required Information, it may deliver to Parent a written notice to that effect (stating when it believes it completed such delivery), in which case Company shall be deemed to have
complied with the requirement above to provide the Required Information as of such time unless Parent in good
A-54
faith
reasonably believes Company has not completed the delivery of the Required Information and, within three (3) business days after the delivery of such notice by Company, delivers a written
notice to Company to that effect (stating with specificity which Required Information Company has not delivered). If the Marketing Period has not ended on or prior to (x) August 17,
2017, then the Marketing Period shall commence no earlier than September 5, 2017 or (y) December 20, 2017, then the Marketing Period shall commence no earlier than
January 3, 2018. October 9, 2017, and November 22 and 24, 2017 shall not be considered business days for purposes of this definition. Notwithstanding the foregoing, the Marketing
Period shall end on any earlier date that is the date on which the Financing is consummated. For the avoidance of doubt, the Marketing Period shall not be deemed to have commenced if the Required
Information is not Compliant on the first day, throughout and on the last day of such period.
"
Nasdaq
" means the Nasdaq Global Market.
"
Off-the-Shelf Software
" means any software (other than Public Software) that is generally and widely available to the public through
regular commercial distribution channels and licensed on a non-exclusive basis on standard terms and conditions.
"
Parent Common Shares
" means shares of Parent's common stock, par value $0.01 per share.
"
Parent Material Adverse Effect
" means any event, circumstance, occurrence, fact, condition, development, effect or change that has a
material adverse effect on the ability of Parent to perform its obligations under this Agreement and to consummate the Merger and the transactions contemplated by this Agreement.
"
Patents
" means patents, applications for patents (including divisions, continuations, continuations in part and provisional and renewal
applications), and any re-examinations, extensions or reissues thereof, in any jurisdiction.
"
Personal Information
" means such term or like terms set forth in any privacy Law that describes, covers or defines data that identifies
or can be used to identify individuals either alone or in combination with other information which is in the possession of, or is likely to come into the possession of Company or any of its
Subsidiaries, including a combination of an individual's name, address or phone number with any such individual's username and password, social security number or other government-issued number,
financial account number, date of birth, email address or other personally identifiable information.
"
Public Software
" means any software, libraries or other code that is licensed under or is otherwise subject to Open License Terms. The
term "
Open License Terms
" means terms in any license, distribution model or other agreement for software, libraries or other code (including middleware
and firmware) (a "
Work
") which require, as a condition of use, reproduction, modification and/or distribution of the Work (or any portion thereof) or of
any other software, libraries or other code (or a portion of any of the foregoing) in each case, that is incorporated into or includes, relies on, linked to or with, derived from in any manner (in
whole or in part), or distributed with a Work (collectively, "
Related Software
"), any of the following: (a) the making available of source code
or any information regarding the Work or any Related Software; (b) the granting of permission for creating modifications to or derivative works of the Work or any Related Software;
(c) the granting of a royalty-free license, whether express, implied, by virtue of estoppel or otherwise, to any person under Intellectual Property rights (including Patents) regarding the Work
alone, any Related Software alone or the Work or Related Software in combination with other hardware or software; (d) the imposition of any restrictions on future Patent licensing terms, or
other abridgement or restriction of the exercise or enforcement of any Intellectual Property rights through any means; (e) the obligation to include or otherwise communicate to other persons
any form of acknowledgment and/or copyright notice regarding the
A-55
origin
of the Work or Related Software; or (f) the obligation to include disclaimer language, including warranty disclaimers and disclaimers of consequential damages.
"
Registered Intellectual Property
" means all Trademark registrations and applications for registration (including internet domain name
registrations), Copyright registrations and applications for registration and issued Patents and Patent applications.
"
Release
" means any actual or threatened release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge,
dispersal, leaching or migration into or through the environment or within any building, structure, facility or fixture.
"
Representatives
" means, when used with respect to Parent or Company, the directors, officers, employees, consultants, accountants, legal
counsel, investment bankers or other financial advisors, agents and other representatives of Parent or Company, as applicable, and their respective Subsidiaries.
"
Required Information
" means (a) all information required by paragraph 7(b) of Annex C of the Debt Commitment Letter
and all information regarding Company and its Subsidiaries reasonably necessary to prepare the information required by paragraph 7(c) of Annex C of the Debt Commitment Letter,
(b) all historical financial and other pertinent historical information regarding Company and its Subsidiaries as may be reasonably requested in writing by Parent, including all historical
financial statements and historical financial and other data, with respect to Company and its Subsidiaries and of the type reasonably determined by Parent to be required by Regulation S-X and
Regulation S-K under the Securities Act for registered offerings of debt securities, to consummate the offerings of debt securities contemplated by the Financing at the time during Company's
fiscal year such offerings will be made and (c) historical information relating to Company and its Subsidiaries (including such information which Parent has determined is necessary for the
preparation of one or more information packages regarding the business, operations, financial projections and prospects of Company and its Subsidiaries customary for such financing or reasonably
necessary for the syndication of and placement of securities to be included in the Financing) to the extent reasonably requested by Parent to assist Parent in preparation of materials for rating
agency presentations, offering documents, offering circulars or private placement memoranda, bank information memoranda, prospectuses and similar documents required in connection with the Financing.
"
Requisite Regulatory Approvals
" means those approvals set forth in
Sections 3.4
and
4.4
of the Company Disclosure Schedule together with the expiration or termination of any waiting period under the HSR Act.
"
Sarbanes-Oxley Act
" means the Sarbanes-Oxley Act of 2002.
"
SEC
" means the Securities and Exchange Commission.
"
Securities Act
" means the Securities Act of 1933, as amended.
"
SRO
" means (a) any "self-regulatory organization" as defined in Section 3(a)(26) of the Exchange Act and (b) any
other United States or foreign securities exchange, futures exchange, commodities exchange or contract market.
"
Subsidiary
" when used with respect to any person, any other person that such person directly or indirectly owns or has the power to vote
or control more than 50% of the voting stock or other interests the holders of which are generally entitled to vote for the election of the board of directors or other applicable governing body of
such other person. For the avoidance of doubt, Holdings shall be deemed to be a Subsidiary of Company.
A-56
"
Superior Proposal
" means a bona fide written Acquisition Proposal, which did not result from or arise in connection with a breach (or the
making thereof constitutes a breach) of
Section 6.8
, that the Company Board or a duly authorized committee (including the Special Committee)
concludes in good faith by a majority vote, after consultation with outside legal counsel and the Special Committee Financial Advisor to be (a) more favorable to Company's stockholders (in
their capacities as such) from a financial point of view than the transactions contemplated by this Agreement (including any material alterations to this Agreement agreed to in writing by Parent in
response thereto), and (b) reasonably likely to be consummated on the terms proposed and either the purchaser has sufficient funds available to consummate the proposal or the financing of which
is fully committed, in each case, taking into account, in its good faith judgment, (i) the financial terms of such Acquisition Proposal, (ii) the identity of the third party making such
Acquisition Proposal, (iii) the anticipated timing, conditions (including any financing condition or the reliability of any debt or equity funding commitments) and prospects for completion of
such Acquisition Proposal, and (iv) the other terms and conditions of such Acquisition Proposal and the implications thereof on Company, including relevant legal, regulatory and other aspects
of such Acquisition Proposal deemed relevant by the Company Board or the Special Committee;
provided
, that for purposes of the definition of "Superior
Proposal," the references to "20%" in the definition of Acquisition Proposal shall be deemed to be references to "50%".
"
Tax
" or "
Taxes
" means all federal, state, local, and foreign income, excise, gross
receipts, ad valorem, profits, gains, property, capital, sales, transfer, use, license, payroll, employment, social security, severance, unemployment, withholding, duties, windfall profits,
intangibles, franchise, backup withholding, value added, alternative or add-on minimum, estimated and other taxes, charges, fees, levies or like assessments together with all penalties and additions
to tax and interest thereon.
"
Tax Return
" means any return, declaration, report, claim for refund, estimate, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any amendment thereof, supplied or required to be supplied to a Governmental Entity.
"
Termination Fee
" means a cash amount equal to $18,430,000, except that in the event that this Agreement is terminated by Company pursuant
to
Section 8.1(e)
prior to the No-Shop Period Start Date
(or, solely with respect to a Holdover Proposal, the Delayed No-Shop Period Start Date), the "Termination Fee" shall mean a cash amount equal to $13,165,000.
"
Trade Secrets
" means all trade secrets (including those trade secrets defined in the Uniform Trade Secrets Act and under corresponding
foreign statutory Law and common law), proprietary and non-public information, know how, business and technical information, and rights to limit the use of disclosure thereof.
"
Trademarks
" means trademarks, service marks, brand names, internet domain names, logos and other indications of origin (whether or not
registered), the goodwill associated with the foregoing and registrations in any jurisdiction of, and applications in any jurisdiction to register, the foregoing, including any extension, modification
or renewal of any such registration or application.
"
Transaction Document
" means (a) the Support Agreement, (b) the Exchange Agreements, and (c) the Certificate of
Merger.
A-57
"
Willful and Material Breach
" means, with respect to any party, (a) fraud with respect to the representations, warranties,
covenants or other agreements of such party set forth in this Agreement or any Transaction Document or (b) an act or a failure to act by such party with the actual or constructive knowledge
that the taking of such act or failure to take such act could cause or result in a material breach of this Agreement or any Transaction Document and does actually cause or result in a material breach
of this Agreement or such Transaction Document. For the avoidance of doubt, a failure of a party to consummate the Merger as required pursuant to
Section 1.3
in accordance with the terms of this
Agreement (and, in the case of Parent or Merger Sub, regardless of whether the Financing has
been obtained) shall be deemed to be a Willful and Material Breach.
ARTICLE X
GENERAL PROVISIONS
10.1
Nonsurvival of Representations, Warranties and Agreements.
None of the representations, warranties,
covenants and agreements in this Agreement or in any instrument delivered pursuant to this Agreement (other than the
Confidentiality Agreement, which shall survive in accordance with its terms) shall survive the Effective Time, except for
Section 6.5
,
Section 6.6
and for those other covenants and agreements contained herein and therein which by their terms apply or are to be performed in whole
or in part after the Effective Time which shall survive until performed.
10.2
Amendment.
Subject to compliance with applicable Law, this Agreement may be amended, modified or
supplemented solely by the parties hereto, by action taken or authorized by,
the board of directors of Parent (or duly authorized committees thereof), with respect to Parent, and the Company Board (or duly authorized committees thereof), with respect to Company;
provided, however
, that after Requisite Company Vote, there may not be any amendment, modification or supplement of this Agreement that requires further
approval under applicable Law without such approval having first been obtained. This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise,
except by an instrument in writing specifically designated as an amendment hereto, signed on behalf of each of the parties in interest at the time of the amendment. Notwithstanding anything to the
contrary contained herein,
Section 10.9
,
Section 10.11
,
Section 10.15
and this
Section 10.2
may not be modified or amended in a manner that is
adverse in any material respect to the Lenders or the Lender Related Parties without the prior written consent of the Lenders.
10.3
Extension; Waiver.
At any time prior to the Effective Time, Parent and Merger Sub, on the one
hand, and Company, on the other hand, may, to the extent permitted by applicable Law,
(a) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (b) waive any inaccuracies in the representations and warranties of the other
party contained herein or in any document delivered pursuant hereto, and (c) waive compliance with any of the agreements or satisfaction of any conditions contained herein that are for the
benefit of such party;
provided
,
however
, that after obtaining the Requisite Company Vote, there may not
be, without further approval of such stockholders, any extension or waiver of this Agreement or any portion thereof that requires further approval under applicable Law without such approval having
first been obtained. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party, but such
extension or waiver or failure to insist on strict compliance with an obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure.
10.4
Expenses.
Except as otherwise provided in
Section 6.3
and
Section 8.2
, all fees and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party
incurring such fees or expenses, whether or not the Merger is consummated.
A-58
10.5
Notices.
All notices and other communications hereunder shall be in writing and shall be deemed
duly given (i) when personally delivered, (ii) on the date
sent by email of a "portable document format" (.pdf) document (so long as written notice of such transmission is sent within two (2) business days thereafter by another delivery method
hereunder) or (iii) one (1) business day following the date sent if such notice is sent by FedEx or another nationally recognized overnight delivery service. All notices hereunder shall
be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:
(a) if
to Company, to:
Neff
Corporation
3750 NW 87
th
Avenue
Suite 400
Miami, Florida 33178-2433
Attention: Mark Irion
Email: MIrion@Neffcorp.com
With a copy (which shall not constitute notice) to:
Akin
Gump Strauss Hauer & Feld LLP
One Bryant Park
Bank of America Tower
New York, New York 10036-6745
Attention: Daniel I. Fisher
Zachary N. Wittenberg
Email: dfisher@akingump.com
zwittenberg@akingump.com
and
(b) if
to Parent or Merger Sub, to:
H&E
Equipment Services
7500 Pecue Ln
Baton Rouge, LA 70809
Attention: John Engquist
Email: jengquist@he-equipment.com
With a copy (which shall not constitute notice) to:
Dechert LLP
1095 Avenue of the Americas
New York, New York 10036-6797
Attention: Derek M. Winokur
Email: Derek.Winokur@dechert.com
10.6
Interpretation.
The parties have participated jointly in negotiating and drafting this
Agreement. In the event that an ambiguity or a question of intent or interpretation arises,
this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision
of this Agreement. When a reference is made in this Agreement to Recitals, Articles, Sections, Subsections Exhibits, Schedules, or Disclosure Schedules such reference shall be to an Recitals, Article,
Section, Subsection of or Exhibit, Schedule or Disclosure 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. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed
to be
A-59
followed
by the words "without limitation." References to "the date hereof" shall mean the date of this Agreement. References herein to any gender shall include each other gender. References herein to
a person in a particular capacity or capacities shall exclude such person in any other capacity. With respect to the determination of any period of time, the word "from" means "from and including" and
the words "to" and "until" each means "to but excluding". The word "or" shall be disjunctive but not exclusive. References herein to any Law shall be deemed to refer to such Law as amended, modified,
codified, reenacted, supplemented or superseded in whole or in part and in effect from time to time, and also to all rules and regulations promulgated thereunder. References herein to any Contract
mean such Contract as amended, supplemented or modified (including any waiver thereto) in accordance with the terms thereof. As used in this Agreement, the
"
knowledge
" of Company means the actual knowledge of any of the officers of Company listed on
Section 10.6
of the Company Disclosure Schedule, and the
"
knowledge
" of Parent means the actual
knowledge of any of the officers of Parent listed on
Section 10.6
of the Parent Disclosure Schedule. As used herein,
(a) "
business day
" means any day other than a Saturday, a Sunday or a day on which banks in New York, New York are authorized by Law or executive
order to be closed, (b) the term "
person
" means any natural person, corporation (including not-for-profit), general or limited partnership,
limited liability company, joint venture, estate, trust, association, organization, Governmental Entity or other entity of any kind or nature, (c) an
"
affiliate
" means, with respect to any person, any other person that directly or indirectly controls, is controlled by or is under common control with,
such first person;
provided
, that no portfolio company of any person that owns equity securities of Company shall be deemed to be an affiliate of
Company solely by virtue of such person's ownership of equity securities of Company and for the purposes of this clause (c), "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), when used with respect to any person, means the power to direct or cause the direction of the management or policies of such person,
directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, (d) the term "
made available
" means any
document or other information that was (i) actually provided by one party or its Representatives to the other party and its Representatives, or (ii) included in the virtual data room of
a party or filed by a party with the SEC and publicly available on EDGAR, in each case one (1) business day prior to the date hereof and (e) the term
"
parties
"means Parent, Merger Sub and Company. The Company Disclosure Schedule and the Parent Disclosure Schedule, as well as all other schedules and
all exhibits hereto, shall be deemed part of this Agreement and included in any reference to this Agreement. Terms defined in the singular shall have a comparable meaning when used in the plural, and
vice versa. All references to "dollars" or "$" in this Agreement are to United States dollars. This Agreement shall not be interpreted or construed to require any person to take any action, or fail to
take any action, if to do so would violate any applicable Law.
10.7
Counterparts.
This Agreement may be executed in two or more counterparts (including by facsimile
or other electronic means, including signatures received as a .pdf attachment
to electronic mail), all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties and delivered to the other
parties, it being understood that all parties need not sign the same counterpart.
10.8
Entire Agreement.
This Agreement, together with the Confidentiality Agreement and the Transaction
Documents, constitutes the entire agreement among the parties with respect to the
subject matter hereof and supersedes all prior agreements and undertakings, including that certain Exclusivity Agreement, dated as of May 19, 2017, by and between Parent, Wayzata Opportunities
Fund II, L.P., Wayzata Opportunities Fund Offshore II, L.P. and Company, both written and oral, among the parties, or any of them, with respect to the subject matter hereof.
10.9
Governing Law; Jurisdiction
.
(a) This
Agreement, and any Action, dispute or other controversy arising out of or relating hereto shall be governed by, and construed in accordance with, the Laws of the
State of Delaware,
A-60
without
regard to any applicable conflicts of law principles thereof; provided that any Action, dispute or other controversy against any Lender or any Lender Related Party arising out of or relating
hereto or to the Financing, the Debt Commitment Letter or the performance thereof shall be governed by, and construed in accordance with, the Laws of the State of New York.
(b) Each
party agrees that any action or proceeding in respect of any claim arising out of or related to this Agreement or the transactions contemplated hereby shall be
brought, heard, tried and determined exclusively in the Delaware Court of Chancery (or, only if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any state or
federal court within the State of Delaware) (the "
Chosen Courts
"), and, solely in connection with claims arising under this Agreement or the
transactions that are the subject of this Agreement, (i) irrevocably and unconditionally submits to the exclusive jurisdiction of the Chosen Courts, (ii) irrevocably and unconditionally
waives any objection to laying venue in any such action or proceeding in the Chosen Courts, (iii) irrevocably and unconditionally waives any objection that the Chosen Courts are an inconvenient
forum or do not have jurisdiction over any party and (iv) agrees that service of process upon such party in any such action or proceeding will be effective if notice is given in accordance with
Section 10.5
in such other manner as may be permitted by applicable Law, shall be valid and sufficient service thereof.
(c) Notwithstanding
the foregoing, each of the parties hereto agrees that it will not bring or support, or permit any of its Affiliates to bring or support, any claim,
action, suit or proceeding, whether in law or in equity, whether in contract or in tort or otherwise, against any Lender or any Lender Related Party in any way relating to this Agreement or the
transactions contemplated hereby, including, but not limited to, any dispute arising out of or relating in any way to the Financing, the Debt Commitment Letter or the performance thereof, in any forum
other than the United States District Court for the Southern District of New York (and the appellate courts thereof), or, if jurisdiction is not available in the federal courts, the Supreme Court of
the State of New York, County of New York, Borough of Manhattan, and that the provisions of
Section 10.10
relating to the waiver of jury trial
shall apply to any such action.
10.10
Waiver of Jury Trial
.
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR OTHER PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (I) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER,
(II) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 10.10
.
10.11
Assignment; Third Party Beneficiaries.
Neither this Agreement nor any of the rights, interests
or obligations shall be assigned by any of the parties hereto (whether by operation of Law or otherwise)
without the prior written consent of the other party (such consent not to be unreasonably withheld, delayed or conditioned);
provided
that
(a) prior to the Effective Time, Merger Sub may, without the prior written consent of Company, assign all or any portion of its rights under this Agreement to one or more of Parent's direct or
indirect wholly-owned Subsidiaries or affiliates, and
A-61
(b) Parent
and Merger Sub may collaterally assign their rights hereunder to any financing sources. No assignment shall relieve the assigning party of any of its obligations hereunder. Any
purported assignment in contravention hereof shall be null and void. 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 permitted assigns. This Agreement (including the documents and instruments referred to herein) is not intended to and does not confer upon any person other than the parties
hereto any rights or remedies hereunder, including the right to rely upon the representations and warranties set forth herein, except (i) as otherwise specifically provided in
Section 6.5
,
which is intended to benefit each Company Indemnified Party and his or her heirs and representatives and (ii) the Lenders and
the Lender Related Parties are intended third party beneficiaries of
Section 10.2
,
Section 10.9
,
Section 10.15
and this
Section 10.11
and (iii) after the Effective Time, for the provisions of
Article II
,
which shall be enforceable by the stockholders of Company and holders of Company Equity Awards to the extent necessary to receive the consideration to which such holder is entitled pursuant to
Article II
. The representations and warranties in this Agreement are the product of negotiations among the parties hereto and are for the sole
benefit of the parties. In some instances, the representations and warranties in this Agreement may represent an allocation among the parties hereto of risks associated with particular matters
regardless of the knowledge of any of the parties hereto. Consequently, persons other than the parties may not rely upon the representations and warranties in this Agreement or characterizations of
actual facts or circumstances as of the date of this Agreement or as of any other date. Except as provided in
Section 6.5
or
Section 10.2
,
notwithstanding any other provision hereof to the contrary, no consent, approval or agreement of any third party beneficiary will
be required to amend, modify or waive any provision of this Agreement.
10.12
Specific Performance.
The parties hereto agree that irreparable damage would occur if any
provision of this Agreement were not performed in accordance with its specific terms or were
otherwise breached and that the parties may not have an adequate remedy at law in the event that any of the obligations of this Agreement were not performed in accordance with its specific terms or
otherwise breached. Accordingly, the parties shall be entitled to specific performance of the terms hereof, including an injunction or injunctions to prevent breaches of this Agreement or to enforce
specifically the performance of the terms and provisions hereof (including the parties' obligation to consummate the Merger), in addition to any other remedy to which they are entitled at law or in
equity, including monetary damages. Each of the parties hereby further waives (a) any defense in any action for specific performance that a remedy at law would be adequate, (b) an award
of performance is not an appropriate remedy for any reason at law or equity, and (c) any requirement under any Law to post security or a bond or similar undertaking as a prerequisite to
obtaining equitable relief.
10.13
Severability.
The provisions of this Agreement shall be deemed severable. Whenever possible,
each provision or portion of any provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable Law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect
under any applicable Law in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or portion of any provision in such jurisdiction or the application
of that provision, in any other jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction such that a suitable and equitable provision shall be substituted for
that provision in order to carry out, so far as may be valid and enforceable, the intent and purpose of the invalid or unenforceable provision.
10.14
Delivery by Facsimile or Electronic Transmission.
This Agreement and any signed agreement or
instrument entered into in connection with this Agreement, and any amendments or waivers hereto or thereto, to the
extent signed and delivered by means of a facsimile machine or by e-mail delivery of a ".pdf" format data file, shall be treated in all manner and respects as an original agreement or instrument and
shall be considered to have the same binding legal effect as if it were the original
A-62
signed
version thereof delivered in person. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine or e-mail delivery of a ".pdf" format data file to deliver
a signature to this Agreement or any amendment hereto or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or e-mail
delivery of a ".pdf" format data file as a defense to the formation of a contract and each party hereto forever waives any such defense.
10.15
Lenders.
Notwithstanding anything to the contrary in this Agreement, neither any Lender nor any
Lender Related Party shall have any liability for any obligations or
liabilities of any party hereto under this Agreement or for any claim (whether in contract, tort or otherwise) based on, in respect of, or by reason of (or in any way relating to), the transactions
contemplated hereby, including any dispute arising out of or relating in any way to the Debt Commitment Letter, the transactions contemplated thereby or the performance thereof and the parties hereto
agree not to assert any such claim or bring any action, suit or proceeding in connection with any such claim against any Lender or any Lender Related Party.
[Signature Page Follows]
A-63
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
|
|
|
|
|
|
|
|
|
H&E EQUIPMENT SERVICES, INC.
|
|
|
By:
|
|
/s/ JOHN ENGQUIST
|
|
|
|
|
Name:
|
|
John Engquist
|
|
|
|
|
Title:
|
|
Chief Executive Officer
|
|
|
YELLOW IRON MERGER CO.
|
|
|
By:
|
|
/s/ JOHN ENGQUIST
|
|
|
|
|
Name:
|
|
John Engquist
|
|
|
|
|
Title:
|
|
Chief Executive Officer
|
[Signature
Page to Agreement and Plan of Merger]
|
|
|
|
|
|
|
|
|
NEFF CORPORATION
|
|
|
By:
|
|
/s/ MARK IRION
|
|
|
|
|
Name:
|
|
Mark Irion
|
|
|
|
|
Title:
|
|
Chief Financial Officer
|
[Signature
Page to Agreement and Plan of Merger]
Annex A
1) An
amount calculated at a rate per annum of .25% times $1.25 billion for each day of the period beginning on January 15, 2018 (the "Adjustment Date")
through the Closing Date, not to exceed $800,000 in the aggregate.
2) With
respect to any Notes (as defined in the Debt Commitment Letter) issued into escrow by Parent prior to the Closing Date, all accrued interest payable by Parent with
respect to the Notes for the period beginning on the Adjustment Date through the Closing Date (but not, for the avoidance of doubt, for any period prior to the Adjustment Date), and not to exceed
$9.0 million in the aggregate.
3) In
the event that the Bridge Facility (including debt securities issued pursuant to a securities demand in respect of the Bridge Facility) is drawn under circumstances
where some or all of the Incremental Special Flex (as defined below) is used, an amount equal to one year of interest on up to $250 million of the amount actually drawn under the Bridge
Facility (including debt securities issued pursuant to a securities demand in respect of the Bridge Facility) , at a rate equal to the amount of Incremental Special Flex (if any) actually incurred by
Parent, not to exceed $1,250,000 in the aggregate. "Incremental Special Flex" is the additional flex of up to 0.5% per annum that is available to be charged under the Bridge Facility (including debt
securities issued pursuant to a securities demand in respect of the Bridge Facility) solely by reason of the Bridge Facility (including debt securities issued pursuant to a securities demand in
respect of the Bridge Facility) being drawn on or after the Adjustment Date.
Annex B
SUPPORT AGREEMENT
This Support Agreement (this "
Agreement
") is entered into as of July 14, 2017, by and
among (a) H&E Equipment Services, Inc., a Delaware corporation ("
Parent
"), and (b)(i) Wayzata Opportunities Fund II, L.P.
("
Opportunities Fund
") and (ii) Wayzata Opportunities Fund Offshore II, L.P. ("
Opportunities Fund
Offshore
" and, together with Opportunities Fund, the "
Stockholders
" and each individually, a
"
Stockholder
"). Defined terms used but not defined herein shall have the meanings set forth in the Agreement and Plan of Merger (the
"
Merger Agreement
"), dated as of the date hereof, by and among Parent, Neff Corporation (the "
Company
"),
and Yellow Iron Merger Co., a Delaware corporation and wholly owned subsidiary of Parent ("
Merger Sub
"), as the Merger Agreement is in effect on
the date hereof.
WITNESSETH:
WHEREAS, as of the date hereof, each Stockholder "beneficially owns" (as such term is defined in Rule 13d-3 promulgated under the
Exchange Act) (including power to dispose of (or to direct the disposition of) and has the power to vote (or to direct the voting of)) the number of shares of Class B common stock, par value
$0.01 per share (the "
Class B Shares
"), of the Company and the number of Common Units (the "
LLC
Units
") of Neff Holdings LLC ("
Holdings
"), in each case set forth opposite the name of such Stockholder on
Schedule I
hereto;
WHEREAS,
concurrently herewith, Parent, Merger Sub and the Company are entering into the Merger Agreement, pursuant to which the parties have agreed to consummate the Merger, subject to
the terms and conditions set forth therein;
WHEREAS,
the Special Committee has recommended to the Company Board that the Company Board should approve the Merger Agreement and the transactions contemplated thereby;
WHEREAS,
the Company Board, subsequent to and consistent with the recommendation of the Special Committee, has unanimously (a) determined that it is in the best interests of
Company and its stockholders, and declared it advisable, to enter into the Merger Agreement and the Transaction Documents, (b) approved the execution, delivery and performance of the Merger
Agreement (which constitutes an "agreement of merger" as such term is used in Section 251 of the DGCL) and the Transaction Documents and the consummation of the transactions contemplated hereby
and thereby, including the Merger, in accordance with the DGCL and (c) resolved, subject to the terms and conditions set forth in the Merger Agreement, to recommend adoption of the Merger
Agreement by the stockholders of the Company and directed that the adoption of the Merger Agreement be submitted to the stockholders of the Company;
WHEREAS,
assuming the representations and warranties of Parent and Merger Sub contained in Section 4.1(b) of the Merger Agreement are true and correct, the Company Board has
approved the execution, delivery and performance of this Agreement by the parties hereto and has taken all other action necessary to render inapplicable to this Agreement (and the transactions
contemplated hereby), any Takeover Statutes; and
WHEREAS,
concurrently herewith each of the Stockholders has executed and delivered to Parent a written consent (a "
Stockholder Consent
")
approving the Merger Agreement, the Merger and the other transactions contemplated thereby in accordance with the DGCL, effective immediately following the execution and delivery of the Merger
Agreement, which Stockholder Consent is irrevocable, except as provided in
Section 5.1
below.
B-1
NOW,
THEREFORE, in consideration of the foregoing and the mutual promises, representations, warranties, covenants and agreements contained herein, the parties hereto, intending to be
legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1
Other Definitions
.
For purposes of this Agreement:
(a) "
Affiliate
" means, with respect to any specified Person, any Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with, the Person specified. For the purposes of this Agreement, neither the Company nor any of its Subsidiaries shall be
deemed to be an Affiliate or Subsidiary of any Stockholder.
(b) "
Class A Shares
" means any shares of Class A common stock, par value $0.01 per share, of the Company.
(c) "
Company Shares
" means any equity of the Company, including Class A Shares and Class B Shares.
(d) "
Constructive Disposition
" means, with respect to any Stockholder Owned Shares, a short sale with respect to such
security, entering into or acquiring a derivative contract with respect to such security, entering into or acquiring a futures or forward contract to deliver such security or entering into any other
hedging or other derivative, swap, "put-call," margin, securities lending or other transaction that has or reasonably would be expected to have the effect of changing, limiting, arbitraging or
reallocating the economic benefits and risks of ownership of such security.
(e) "
Permitted Transfer
" means a Transfer of Stockholder Owned Shares or Stockholder Owned Units by a Stockholder to an
Affiliate or Related Fund of such Stockholder,
provided
that, (x) such Affiliate or Related Fund shall remain an Affiliate or Related Fund of
such Stockholder at all times following such Transfer until immediately following the earlier of the Effective Time and termination of this Agreement in accordance with its terms, and (y) prior
to the effectiveness of such Transfer, such Affiliate or Related Fund executes and delivers to Parent a written agreement, in form and substance reasonably acceptable to Parent, to (A) assume
all of such Stockholder's obligations hereunder in respect of the Stockholder Owned Shares or Stockholder Owned Units subject to such Transfer, (B) assume all of such Stockholder's obligations
under the Key Holders Exchange Agreement in respect of the Stockholder Owned Units subject to such Transfer and (C) be bound by the terms of this Agreement and the Key Holders Exchange
Agreement with respect to the Stockholder Owned Shares or Stockholder Owned Units subject to such Transfer, to the same extent as such Stockholder is bound hereunder and to make, as of the date of
such Transfer, each of the representations and warranties such Stockholder shall have made hereunder and under the Key Holders Exchange Agreement (the written agreement contemplated by this
clause (y)
, the "
Transferee Joinder
"). Upon the effectiveness of any Permitted Transfer, Parent
or the Company shall amend
Schedule I
hereto to reflect such Transfer.
(f) "
Person
" means any natural person, corporation (including not-for-profit), general or limited partnership, limited
liability company, joint venture, estate, trust, association, organization, Governmental Entity or other entity of any kind or nature.
(g) "
Related Fund
" means, with respect to any Stockholder, any fund, account or investment vehicle that is under common
control or management with such Stockholder.
(h) "
Representative
" means, with respect to any Person, the directors, officers, employees, consultants, accountants, legal
counsel, investment bankers or other financial advisors, agents and other representatives of such Person.
B-2
(i) "
Stockholder Owned Units
" means, with respect to any Stockholder, the LLC Units set forth next to the name of such
Stockholder on
Schedule I
hereto, together with any other equity securities of Holdings that are directly or indirectly acquired by such
Stockholder prior to the termination of this Agreement in accordance with the terms hereof.
(j) "
Stockholder Owned Shares
" means, with respect to any Stockholder, the Class B Shares set forth next to the name
of such Stockholder on
Schedule I
hereto, together with any other Company Shares that are directly or indirectly acquired by such Stockholder
prior to the termination of this Agreement in
accordance with the terms hereof. For the avoidance of doubt, "Stockholder Owned Shares" with respect to any Stockholder shall include any Class A Shares received by such Stockholder in the
Specified Exchange.
ARTICLE II
VOTING AGREEMENT AND GRANT OF IRREVOCABLE PROXY
Section 2.1
Agreement to Vote the Stockholder Owned Shares
.
(a) From
and after the date hereof until the termination of this Agreement in accordance with
Section 5.1
hereof, at
any meeting of the Company's stockholders (or any adjournment or postponement thereof), however called, and, except for
clause (i)
below, in
connection with any action proposed to be taken by written consent of the stockholders of the Company, each Stockholder agrees to take the following actions (or to cause the applicable holder of
record of its Stockholder Owned Shares to take the following actions):
(i) to
appear and be present (in accordance with the Company Bylaws) at such meeting of the Company's stockholders;
(ii) to
affirmatively vote and cause to be voted all of its Stockholder Owned Shares in favor of ("for"), or, if action is to be taken by written consent in lieu of a
meeting of the Company's stockholders, deliver to the Company a duly executed affirmative written consent in favor of ("for"), the adoption of the Merger Agreement and the approval of all of the
transactions contemplated by the Merger Agreement, including the Merger, to the extent that such matters are submitted for a vote at any such meeting or are the subject of any such written consent;
and
(iii) to
vote and cause to be voted all of its Stockholder Owned Shares against, and not provide any written consent with respect to or for, the adoption or approval of
(1) any Acquisition Proposal (and the transactions contemplated thereby), (2) any action, transaction or agreement to be taken, consummated or entered into by the Company that, if so
taken, consummated or entered into by the Company would, or would reasonably be expected to, result in (x) a breach by the Company of any covenant, representation, warranty or other obligations
of the Company set forth in the Merger Agreement or (y) the failure of any of the conditions to the obligations of Parent or Merger Sub to consummate the Merger and the other transactions
contemplated by the Merger Agreement set forth in Sections 7.1 and 7.2 of the Merger Agreement, and (3) any agreement (including, without limitation, any amendment,
waiver, release from, or non-enforcement of any agreement), any amendment or restatement of the Company Certificate or the Company Bylaws, or any other action (or failure to act), to the extent such
agreement, amendment or restatement or other action or failure to act is intended or would reasonably be expected to prevent, interfere with, impair or delay the consummation of the Merger or any of
the other transactions contemplated by the Merger Agreement.
B-3
(b) Each
Stockholder agrees not to enter into any agreement or commitment with any Person the effect of which would violate, or prevent, impair or delay such Stockholder
from performing such Stockholder's obligations under, the provisions and agreements set forth in this
Article II
.
Section 2.2
Irrevocable Proxy
.
(a) As
security for and in furtherance of the Stockholders' agreements in
Section 2.1
of this Agreement, each
Stockholder hereby appoints Parent and Parent's designees, and each of them individually, as such Stockholder's proxy and attorney-in-fact (with full power of substitution), for and in the name, place
and stead of such Stockholder, to vote, prior to the termination of this Agreement, all Stockholder Owned Shares owned by such Stockholder (at any meeting of the Company's stockholders (or any
adjournment or postponement thereof), however called), or to execute one or more written consents in respect of such Stockholder Owned Shares, in either case solely with respect to the matters
described in
Section 2.1(a)
of this Agreement and in the manner expressly provided in
Section 2.1(a)
. The foregoing proxy granted by each
Stockholder shall become immediately and automatically exercisable by Parent (and Parent's
designees) if, and only if, (x) such Stockholder fails for any reason to comply with any of its voting and other obligations set forth in
Section 2.1(a)
above and (y) such Stockholder
shall have failed to so comply within one (1) business day after receipt by such
Stockholder of written notice of demand for compliance from Parent, whereupon Parent shall then immediately and automatically have the right to cause to be present or vote such Stockholder's
Stockholder Owned Shares, or to execute one or more written consents in respect of such Stockholder's Stockholder Owned Shares, solely with respect to the meeting or matter for which such Stockholder
failed to be present, vote or consent (as applicable) in accordance with the provisions of
Section 2.1(a)
.
(b) The
proxy granted by each Stockholder pursuant to
Section 2.2(a)
shall (i) be valid and irrevocable until
the valid termination of this Agreement in accordance with (or as otherwise provided in)
Section 5.1
hereof and (ii) automatically
terminate and be deemed revoked upon the valid termination of this Agreement in accordance with (or as otherwise provided in)
Section 5.1
hereof.
Each Stockholder represents that any and all other proxies and powers of attorney heretofore given in respect of the Stockholder Owned Shares owned by such Stockholder that are currently in effect are
revocable, and that such other proxies have been revoked. Each Stockholder affirms that the proxy granted by such Stockholder pursuant to
Section 2.2(a)
is: (x) given (A) in connection
with the execution of the Merger
Agreement and (B) to secure the performance of such Stockholder's obligations under
Section 2.1(a)
, (y) coupled with an interest
and may not be revoked or terminated except as otherwise provided in this Agreement and (z) intended to be irrevocable prior to valid termination of this Agreement. All authority conferred by
each Stockholder to Parent and Parent's designees pursuant to
Section 2.2(a)
shall be binding upon the successors and assigns of such
Stockholder. Subject to the other terms and provisions of this Agreement, each Stockholder shall retain the right to vote or cause to be voted all of such Stockholder's Stockholder Owned Shares in its
sole discretion on all matters not described in
Section 2.1(a)
. Each Stockholder agrees that it will not take any action that would render
invalid the valid exercise of the proxy granted by each Stockholder pursuant to
Section 2.2(a)
in accordance with its terms by Parent and
Parent's designees.
ARTICLE III
STANDSTILL AND NON-SOLICITATION
Section 3.1
Standstill in Respect of Stockholder Owned Shares and Stockholder Owned Units
Each
Stockholder hereby agrees that, from and after the date hereof until the termination of this Agreement in accordance with
Section 5.1
hereof, such Stockholder shall not, directly or indirectly,
B-4
except
as (i) specifically requested or approved by Parent in writing or (ii) expressly contemplated by this Agreement:
(a) other
than a Permitted Transfer, sell, transfer (including by operation of Law), exchange, gift, tender, pledge, encumber, assign or otherwise dispose of (including,
without limitation, any Constructive Disposition) (collectively, a "
Transfer
"), or enter into any contract, option or other agreement with respect to a
Transfer of, any or all of such Stockholder's Stockholder Owned Shares or Stockholder Owned Units (or any right, title or interest thereto or therein);
(b) deposit
any of such Stockholder's Stockholder Owned Shares or Stockholder Owned Units into a voting trust or grant any proxies or enter into a voting agreement, power of
attorney or voting trust with respect to any of such Stockholder's Stockholder Owned Shares or Stockholder Owned Units;
(c) acquire,
offer to acquire, or agree to acquire, directly or indirectly, by purchase or otherwise, any material assets of the Company or any of its Subsidiaries;
(d) make,
or in any way participate in, directly or indirectly, any "solicitation" of "proxies" (as such terms are used in the rules of the Securities and Exchange
Commission) to vote any voting securities of the Company to (i) not adopt the Merger Agreement or (ii) approve any other matter that if approved would reasonably be expected to
interfere, impair or delay the consummation of the Merger;
(e) make
any public announcement with respect to, or submit a proposal for, or offer for (with or without conditions), any extraordinary transaction involving the Company or
its securities or material assets, except as required by Law;
(f) form,
join or in any way participate in a "group" (as defined in Section 13(d)(3) under the Exchange Act) in connection with any of the actions expressly
described in any of
clauses (a)
-
(e)
of this
Section 3.1
; or
(g) agree
(whether or not in writing) to take any of the actions referred to in this
Section 3.1
.
Any
action taken in violation of the foregoing shall be null and void
ab initio.
For the avoidance of doubt, a Stockholder may deposit its
Stockholder Owned Shares and/or Stockholder Owned Units with any custodian, broker, nominee or other Person who holds such Stockholder's Stockholder Owned Shares or Stockholder Owned Units on behalf
of such Stockholder solely for purposes of facilitating the Specified Exchange (as defined in the Key Holders Exchange Agreement) provided that such Stockholder maintains the sole power to direct the
vote and disposition of such Stockholder Owned Shares and Stockholder Owned Units.
Section 3.2
Additional Stockholder Owned Shares and Stockholder Owned Units.
Until
the termination of this Agreement in accordance with
Section 5.1
hereof, each Stockholder shall promptly notify Parent of the
number of Company Shares or LLC Units, if any, as to which such Stockholder acquires record or beneficial ownership after the date hereof, except for any Company Shares acquired by such
Stockholder in the Specified Exchange. Any Company Shares or LLC Units as to which such Stockholder acquires record or beneficial ownership after the date hereof and prior to termination of
this Agreement (including Company Shares acquired by such Stockholder in the Specified Exchange) shall be Stockholder Owned Shares or Stockholder Owned Units, as applicable, for purposes of this
Agreement. In the event of a stock or unit split, stock or unit dividend or distribution, or any change in the Company Shares or the LLC Units by reason of any stock or unit split, reverse
stock or unit split, recapitalization, combination, reclassification, reincorporation, exchange of shares or interests or similar occurrence, the term "Stockholder Owned Shares" or "Stockholder Owned
Units," as applicable, shall be deemed to refer to and include any shares or units which are received by a Stockholder in any such transaction.
B-5
Section 3.3
Acquisition Proposals
.
(a) From
the date hereof until the termination of this Agreement in accordance with
Section 5.1
hereof, each
Stockholder (i) shall terminate all soliciting activities, discussions and negotiations by or on behalf of such Stockholder with any Person (other than the Company, Parent, Merger Sub or their
respective Representatives) regarding any proposal, expression of interest, request for information, or other communication that constitutes, or would reasonably be expected to lead to, an Acquisition
Proposal; (ii) shall not, and shall cause its Representatives not to, directly or indirectly, (A) propose, make, submit or announce an Acquisition Proposal, (B) solicit, initiate,
or knowingly encourage or knowingly facilitate (including by means of furnishing any information or responding to any communication), any inquiries or the making, announcement or submission of any
proposal or offer that constitutes, or would reasonably be expected to lead to, any Acquisition Proposal, (C) enter into any agreement (whether binding, non-binding, conditional or otherwise)
with respect to an Acquisition Proposal, (D) knowingly cooperate with, assist, or participate in any effort by, any Person (or any Representative of a Person) that has made, is seeking to make,
has informed the Company or such Stockholder of any intention to make, or has publicly announced an intention to make, any proposal that constitutes, or would reasonably be expected to lead to, any
Acquisition Proposal, or (E) otherwise knowingly facilitate an Acquisition Proposal; (iii) shall promptly (and in any case within one (1) business day) notify Parent or its
Representatives in writing of such Stockholder's receipt of any Acquisition Proposal or any request for discussions or negotiations with respect to any Acquisition Proposal, and provide Parent with
copies of all documents and other written communications received by such Stockholder setting forth the terms and conditions of such Acquisition Proposal, and (iv) shall keep Parent informed on
a reasonably prompt and current basis of the status of any such Acquisition Proposal received by such Stockholder (including the content and status of all material discussions and communications in
respect thereof and any change or proposed change to the terms thereof).
(b) Notwithstanding
anything to the contrary in this
Section 3.3
and provided such Stockholder has not breached this
Section 3.3
, solely to the extent the Company is
permitted under the terms of Section 6.8 of the Merger Agreement to, and the Company
Board or the Special Committee has determined to, initiate, solicit, facilitate, encourage or enter into discussions or negotiations regarding (i) an Acquisition Proposal or
(ii) inquiries, proposals, offers, efforts or attempts that may lead to an Acquisition Proposal, such Stockholder and its Representatives may, at the request of the Company, cooperate, assist
or participate in any such action,
provided
that such action by such Stockholder and its Representatives would be permitted to be taken by the Company
pursuant to the terms of the Merger Agreement.
(c) For
purposes of this
Section 3.3
, any officer, director, employee, agent or advisor of the Company (in each case,
solely in their capacities as such) will be deemed not to be a Representative of any such Stockholder. For the avoidance of doubt, (i) nothing in this
Section 3.3
shall affect in any way the
obligations of any Person (including the Company and its Representatives) under the Merger Agreement, and
(ii) the Company is not a Representative of any Stockholder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each Stockholder hereby represents and warrants to Parent as follows:
Section 4.1
Authority; Binding Nature.
Such Stockholder has full limited partnership power and
authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby to be consummated by such Stockholder. The
B-6
execution
and delivery of this Agreement by such Stockholder, the performance of such Stockholder's obligations hereunder and the consummation by such Stockholder of the transactions contemplated
hereby to be consummated by such Stockholder have been duly and validly authorized by all necessary limited partnership action on the part of such Stockholder. No other proceedings on the part of such
Stockholder are necessary to approve this Agreement by such Stockholder or to consummate the transactions contemplated hereby to be consummated by such Stockholder. This Agreement has been duly and
validly executed and delivered by such Stockholder and (assuming due authorization, execution and delivery by Parent) constitutes a valid and binding obligation of such Stockholder,
enforceable against such Stockholder in accordance with its terms (except in all cases as such enforceability may be limited by the Enforceability Exceptions).
Section 4.2
Ownership of Shares and LLC Units.
As of the date hereof, such Stockholder
beneficially owns the number of (a) Company Shares and (b) LLC Units, in each case set forth opposite the
name of such Stockholder on
Schedule I
hereto free and clear of any proxy, voting restriction, adverse claim or other Lien (except for proxies,
restrictions, claims and Liens in favor of Parent pursuant to this Agreement, transfer restrictions imposed by Holdings' operating agreement, and transfer restrictions of general applicability as may
be provided under the Securities Act and state securities laws). Such Stockholder has the sole power to vote (or cause to be voted) the Stockholder Owned Shares and the Stockholder Owned Units, the
sole power to dispose of the Stockholder Owned Shares and the Stockholder Owned Units and good and valid title to the Stockholder Owned Shares and the Stockholder Owned Units. As of the date hereof,
such Stockholder does not own, beneficially or of record, any Equity Interests of the Company or Holdings other than the Company Shares and the LLC Units set forth opposite the name of such
Stockholder on
Schedule I
hereto and other than Class A Shares the Stockholder may be deemed to own beneficially solely due to such
Stockholder's ownership of such LLC Units listed on
Schedule I
hereto and as disclosed in the filings made by, or on behalf of, such
Stockholder with the SEC pursuant to Section 13(g) of the Exchange Act or Section 16(a) of the Exchange Act.
Section 4.3
No Conflicts.
Neither the execution and delivery of this Agreement by such
Stockholder, nor the performance by such Stockholder of its obligations under this Agreement, will
(a) conflict with or violate any provision of the organizational documents of such Stockholder or (b) (i) violate any Law applicable to such Stockholder or any of its properties
or assets, or (ii) result in the creation by such Stockholder of any Lien upon its Stockholder Owned Shares or Stockholder Owned Units (other than Liens in favor of Parent hereunder) or
violate, conflict with, result in the loss of any material benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in
the termination of or a right of termination or cancellation under, or accelerate the performance required by such Stockholder under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license, permit, lease, agreement or other instrument or obligation to which such Stockholder is a party, or by which such Stockholder or any of its properties or
assets may be bound or affected, except for, in the case of
clause (b)(ii)
, any such violations, conflicts, losses, defaults, terminations,
cancellations or accelerations that would not reasonably be expected to prevent the performance by such Stockholder of its obligations under this Agreement.
Section 4.4
Absence of Litigation.
As of the date hereof, there is no suit, action,
investigation, claim or proceeding pending or, to such Stockholder's knowledge, threatened against or involving
or affecting, such Stockholder, its Company Shares or its LLC Units that would reasonably be expected to impair the ability of such Stockholder to perform fully its obligations hereunder or to
consummate on a timely basis the transactions contemplated hereby to be consummated by such Stockholder.
Section 4.5
Brokers.
No broker, investment banker, financial advisor or other Person is entitled
to any broker's, finder's, financial advisor's or other similar fee or commission that
is payable by the Company, Parent or any of their respective subsidiaries in connection with the transactions
B-7
contemplated
by the Merger Agreement based upon arrangements made by or on behalf of such Stockholder (excluding, for the avoidance of doubt, any such broker, investment banker, financial advisor or
other Person retained or engaged by the Company).
Section 4.6
Reliance by Parent.
Such Stockholder has had the opportunity to review this
Agreement and the Merger Agreement with counsel of its own choosing. Such Stockholder understands and
acknowledges that Parent is entering into the Merger Agreement in reliance upon such Stockholder's execution, delivery and performance of this Agreement. Such Stockholder understands and acknowledges
that the Merger Agreement governs the terms of the Merger and the other transactions contemplated thereby.
ARTICLE V
TERMINATION
Section 5.1
Termination.
(a) Subject
to
Section 5.1(b)
, this Agreement shall terminate, without further action by any of the parties hereto,
immediately upon the earliest to occur of: (i) the termination of this Agreement by mutual written consent of Parent and each of the Stockholders, (ii) the termination of the Merger
Agreement in accordance with its terms and (iii) the consummation of the Merger. In addition, subject to
Section 5.1(b)
, this Agreement
shall terminate upon the election of the Stockholders if there shall be any material amendment, supplement or modification to, or material waiver of any provision of, the Merger
Agreement that reduces the amount of or changes the form of consideration payable to stockholders of the Company pursuant to the Merger Agreement as in effect on the date of this Agreement. Subject to
Section 5.1(b)
, upon termination of this Agreement in accordance with this
Section 5.1(a)
,
(x) this Agreement shall be deemed null and void and shall have no further force or effect, (y) other than a termination in accordance with
clause (iii)
of this
Section 5.1(a)
, the Stockholder Consent and any other consent
executed pursuant hereto shall be deemed null and void and shall have no further force or effect and (z) there shall be no liability or obligation hereunder on the part of Parent or any of the
Stockholders or any of their respective Affiliates, or any of their respective managers, directors, stockholders, members, partners, officers, employees, agents, consultants, accountants, attorneys,
investment bankers, financial advisors, representatives, successors or assigns.
(b) Notwithstanding
Section 5.1(a)
, termination of this Agreement shall not prevent any party hereunder from seeking
any remedies (at Law or in equity) against any other party hereto for such party's willful and material breach of any of the terms of this Agreement prior to such termination. For purposes of this
Agreement, the "willful and material breach" by any party hereto of the terms of this Agreement shall mean an act or a failure to act by such party with the actual knowledge that the taking of such
act or failure to take such act is reasonably likely to cause or result in a material breach of this Agreement and does actually cause or result in a material breach of this Agreement. The provisions
of this
Article V
and
Article VI
hereof shall survive the termination of this Agreement.
Unless this Agreement has been terminated in accordance with
Section 5.1(a)
, the obligations of the Stockholders hereunder shall apply whether or
not the Merger Agreement, the Merger or any action described herein is recommended by the Company Board (or any committee thereof).
B-8
ARTICLE VI
MISCELLANEOUS
Section 6.1
Appraisal Rights; Claims.
(a) To
the extent permitted by applicable Law, each Stockholder hereby waives and agrees not to exercise any rights of appraisal or rights to dissent from the Merger and the
other transactions
contemplated by the Merger Agreement that such Stockholder may have under Section 262 of the DGCL or other similar Law.
(b) Each
Stockholder agrees (on its own behalf and on behalf of its successors-in-interest, transferees or assignees) to forego participation as a plaintiff or member of a
plaintiff class in any action (including any class action) with respect to any claim, direct, derivative or otherwise, based on its status as a stockholder of the Company relating to the negotiation,
execution or delivery of the Merger Agreement or the consummation of the Merger.
Section 6.2
Documentation and Information.
Each Stockholder (i) consents to and authorizes
the publication and disclosure by Parent of its identity and holdings of the Stockholder Owned Shares and
the Stockholder Owned Units and the nature of such Stockholder's commitments, arrangements and understandings under this Agreement, in any press release or any other disclosure document required in
connection with the Merger or any transactions contemplated by the Merger Agreement;
provided
, that (A) any such publication or disclosure
(except for filings required under the Exchange Act or any such publication or disclosure as may be required by applicable Law) shall be subject to the prior written approval of the Stockholders (such
approval not to be unreasonably withheld, conditioned or delayed) and (B) to the extent practicable, each Stockholder shall be afforded a reasonable opportunity to review and comment on any
such publication or disclosure required under the Exchange Act or as may be required by applicable Law, and (ii) will use its commercially reasonable efforts to give to Parent, as promptly as
practicable after such Stockholder receives a written request therefor from Parent, any information reasonably related to the foregoing as it may reasonably require for the preparation of any such
disclosure documents. Each Stockholder will use its commercially reasonable efforts to notify Parent, as promptly as practicable, of any required corrections with respect to any written information
supplied by such Stockholder specifically for use in any such disclosure document, if and to the extent such Stockholder becomes aware that any such information has become false or misleading in any
material respect. Each Stockholder agrees not to issue any press release or make any other public statement with respect to this Agreement, the Merger Agreement or the transactions contemplated
thereby without the prior written consent of Parent, except for filings required under the Exchange Act or such publication or disclosure as may be required by applicable Law,
provided
, that, to the
extent practicable, Parent shall be afforded a reasonable opportunity to review and comment on any such proposed filing,
publication or disclosure.
Section 6.3
Further Actions.
From time to time, at the reasonable request of Parent and without
further consideration, prior to the termination of this Agreement, each Stockholder shall
execute and deliver such additional documents and instruments and take all such further action as may be reasonably required to consummate and make effective, as soon as reasonably practicable, the
transactions contemplated by this Agreement.
Section 6.4
Amendments and Waivers.
Except for amendments to
Schedule I
hereto in accordance with the terms of this Agreement, this Agreement
may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment hereto, signed on
behalf of each of the parties hereto. No failure on the part of any party to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any party in exercising
any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no
B-9
single
or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy. Any agreement on the
part of a party hereto to any such waiver shall be valid only if set forth in a written instrument signed on behalf of such party, but such waiver or failure to insist on strict compliance with an
obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.
Section 6.5
Counterparts.
This Agreement may be executed in two or more counterparts (including
by facsimile or other electronic means, including signatures received as a .pdf attachment
to electronic mail), all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties and delivered to the other
parties, it being understood that all parties need not sign the same counterpart.
Section 6.6
Applicable Law; Jurisdiction; Waiver of Jury Trial.
This Agreement, and any Action,
dispute or other controversy arising out of or relating hereto shall be governed by, and construed in accordance with, the Laws of
the State of Delaware, without regard to any applicable conflicts of law principles thereof. Each party agrees that any action or proceeding in respect of any claim arising out of or related to this
Agreement or the transactions contemplated hereby shall be brought, heard, tried and determined exclusively in the Chosen Courts, and, solely in connection with claims arising under this Agreement or
the transactions that are the subject of this Agreement, (a) irrevocably and unconditionally submits to the exclusive jurisdiction of the Chosen Courts, (b) irrevocably and
unconditionally waives any objection to laying venue in any such action or proceeding in the Chosen Courts, (c) irrevocably and unconditionally waives any objection that the Chosen Courts are
an inconvenient forum or do not have jurisdiction over any party and (d) agrees that service of process upon such party in any such action or proceeding that is given in accordance with
Section 6.7
of this Agreement or in such other manner as may be permitted by applicable Law shall be valid, effective and sufficient service
thereof. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR OTHER PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (I) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY SUCH ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER,
(II) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 6.6
.
Section 6.7
Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed duly given or received (i) when personally delivered, (ii) on
the date sent by email of a "portable document format" (.pdf) document (so long as written notice of such transmission is sent within two (2) business days thereafter by another delivery method
hereunder) or (iii) one (1) business day following the date sent if such notice is sent by FedEx or another nationally recognized overnight
B-10
delivery
service. All notices hereunder shall be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:
(a) if
to either Stockholder, to:
c/o
Wayzata Investment Partners LLC
701 East Lake Street, Suite 300
Wayzata, MN 55391
Attention: Ray Wallander, Esq.
Email: rwallander@wayzpartners.com
With a copy (which shall not constitute notice) to:
Stroock &
Stroock & Lavan LLP
180 Maiden Lane
New York, NY 10038-4982
Attention: Matthew A. Schwartz, Esq.
Email: mschwartz@stroock.com
(b) if
to Parent or Merger Sub, to:
H&E
Equipment Services
7500 Pecue Ln
Baton Rouge, LA 70809
Attention: John Engquist
Email: jengquist@he-equipment.com
With a copy (which shall not constitute notice) to:
Dechert LLP
1095 Avenue of the Americas
New York, New York 10036-6797
Attention: Derek M. Winokur
Email: Derek.Winokur@dechert.com
Section 6.8
Entire Agreement.
This Agreement (including the documents and the instruments
referred to herein), together with the Key Holders Exchange Agreement, constitutes the entire
agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements and undertakings.
Section 6.9
Assignment; Third Party Beneficiaries.
Neither this Agreement nor any of the rights,
interests or obligations shall be assigned by any of the parties hereto (whether by operation of Law or otherwise)
without the prior written consent of the other party;
provided
that Parent may assign this Agreement to any of its Affiliates. Any purported assignment
in contravention hereof shall be null and void. 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 permitted assigns. This Agreement (including the documents and instruments referred to herein) is not intended to and does not confer upon any Person (other than the parties hereto and,
solely with respect to
Section 6.15
hereof, the No Recourse Parties (as defined below)) any rights or remedies hereunder, including the right to
rely upon the representations and warranties set forth herein.
Section 6.10
Severability.
The provisions of this Agreement shall be deemed severable. Whenever
possible, each provision or portion of any provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable Law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect
under any applicable Law in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other
B-11
provision
or portion of any provision in such jurisdiction or the application of that provision, in any other jurisdiction, and this Agreement shall be reformed, construed and enforced in such
jurisdiction such that a suitable and equitable provision shall be substituted for that provision in order to carry out, so far as may be valid and enforceable, the intent and purpose of the invalid
or unenforceable provision.
Section 6.11
Specific Performance.
The parties hereto agree that irreparable damage would occur
if any provision of this Agreement were not performed in accordance with its specific terms or were
otherwise breached and that the parties may not have an adequate remedy at Law in the event that any of the obligations of this Agreement were not performed in accordance with its specific terms or
otherwise breached. Accordingly, the parties shall be entitled to specific performance of the terms hereof, including an injunction or injunctions to prevent breaches of this Agreement or to enforce
specifically the performance of the terms and provisions hereof, in addition to any other remedy to which they are entitled at Law or in equity, including monetary damages. Each of the parties hereby
further waives (a) any defense in any action for specific performance that a remedy at Law would be adequate, (b) an award of performance is not an appropriate remedy for any reason at
Law or equity, and (c) any requirement under any Law to post security or a bond or similar undertaking as a prerequisite to obtaining equitable relief.
Section 6.12
Fees and Expenses.
Except as otherwise provided herein, whether or not the Merger
is consummated, all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such costs and expenses.
Section 6.13
Ownership Interest.
Nothing contained in this Agreement shall be deemed to vest in
Parent any direct or indirect ownership or incidence of ownership of or with respect to any
Stockholder Owned Shares or Stockholder Owned Units. All rights, ownership and economic benefits of and relating to the Stockholder Owned Shares and the Stockholder Owned Units shall remain vested in
and belong to the Stockholders, and Parent shall have no authority to direct the Stockholders in the voting or disposition of any of the Stockholder Owned Shares or the Stockholder Owned Units, except
as otherwise provided in this Agreement.
Section 6.14
Capacity.
Parent acknowledges that nothing herein shall limit or affect any
Affiliate of any Stockholder who serves as an officer, manager or director of the Company or any
of its subsidiaries solely to the extent acting in its capacity as an officer, manager or director of the Company or any such subsidiaries, and no actions or omissions of any such Affiliate acting in
such capacity shall be deemed a breach of this Agreement by any Stockholder. For purposes of this
Section 6.14
, the term Affiliate shall be
deemed to include, with respect to either Stockholder, the directors, managers, officers, members, partners, stockholders and employees of such Stockholder or any Affiliate or Related Fund of such
Stockholder.
Section 6.15
Non-Recourse.
Notwithstanding anything that may be expressed or implied in this
Agreement, and notwithstanding the fact that the Stockholders may be partnerships, the parties
hereto covenant, agree and acknowledge that no recourse under this Agreement shall be had against any former, current or future directors, officers, agents, Affiliates, limited partners, general
partners, members, managers, employees, stockholders or equity holders of any Stockholder, or any former, current or future directors, officers, agents, Affiliates, employees, general or limited
partners, members, managers, employees, stockholders or equity holders of any of the foregoing, as such (any such Person, a "
No Recourse Party
"),
whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable Law, it being expressly agreed and acknowledged that
no liability whatsoever shall attach to, be imposed on or otherwise be incurred by any No Recourse Party for any obligation of any Stockholder under this Agreement for any claim based on, in respect
of or by reason of such obligations or their creation.
B-12
Section 6.16
Obligations Several.
The obligations of the Stockholders under this Agreement shall
be several and not joint and several.
[Signature
Page Follows]
B-13
IN
WITNESS WHEREOF, Parent and the Stockholders have caused this Agreement to be duly executed as of the day and year first above written.
|
|
|
|
|
|
|
|
|
H&E EQUIPMENT SERVICES, INC.
|
|
|
By:
|
|
/s/ JOHN ENGQUIST
|
|
|
|
|
Name:
|
|
John Engquist
|
|
|
|
|
Title:
|
|
Chief Executive Officer
|
[Signature
Page to Support Agreement]
|
|
|
|
|
|
|
|
|
STOCKHOLDERS:
|
|
|
WAYZATA OPPORTUNITIES FUND II, L.P.
By: WOF II GP, L.P., its General Partner
By: WOF II GP, LLC, its General Partner
|
|
|
By:
|
|
/s/ PATRICK J. HALLORAN
|
|
|
|
|
Name:
|
|
Patrick J. Halloran
|
|
|
|
|
Title:
|
|
Authorized Signatory
|
[Signature
Page to Support Agreement]
|
|
|
|
|
|
|
|
|
WAYZATA OPPORTUNITIES FUND OFFSHORE II, L.P.
|
|
|
By:
|
|
Wayzata Offshore GP, II, LLC, its General Partner
|
|
|
By:
|
|
/s/ PATRICK J. HALLORAN
|
|
|
|
|
Name:
|
|
Patrick J. Halloran
|
|
|
|
|
Title:
|
|
Authorized Signatory
|
[Signature
Page to Support Agreement]
Schedule I
Stockholder Owned Shares
|
|
|
|
|
Stockholder
|
|
Number of
Stockholder
Owned
Shares
|
|
Wayzata Opportunities Fund II, L.P.
|
|
|
14,585,304
|
|
Wayzata Opportunities Fund Offshore II, L.P.
|
|
|
366,321
|
|
Stockholder Owned Units
|
|
|
|
|
Stockholder
|
|
Number of
Stockholder
Owned
Units
|
|
Wayzata Opportunities Fund II, L.P.
|
|
|
14,585,304
|
|
Wayzata Opportunities Fund Offshore II, L.P.
|
|
|
366,321
|
|
Annex C
EXCHANGE AND TERMINATION AGREEMENT
This Exchange and Termination Agreement (this "
Agreement
"), is entered into as of
July 14, 2017, by and among H&E Equipment Services, Inc., a Delaware corporation ("
Parent
"), Wayzata Opportunities Fund II, L.P.
("
Opportunities Fund
"), Wayzata Opportunities Fund Offshore II, L.P. ("
Opportunities Fund
Offshore
" and, together with Opportunities Fund, the "
Stockholders
" and each individually, a
"
Stockholder
"), Neff Corporation ("
Company
"), and Neff Holdings LLC
("
Holdings
"). The parties to this Agreement are referred to herein as the "
Parties
" or, each
individually, a "
Party
." Any capitalized terms used but not defined herein shall have the meanings set forth in the Agreement and Plan of Merger (the
"
Merger Agreement
"), dated as of the date hereof, by and among Parent, Company, and Yellow Iron Merger Co., a Delaware corporation and wholly
owned subsidiary of Parent ("
Merger Sub
"), as the Merger Agreement is in effect on the date hereof.
RECITALS
WHEREAS, Company and the Stockholders are parties to that certain Second Amended and Restated Limited Liability Company Agreement of Holdings,
dated as of November 26, 2014 (as amended, the "
Holdings LLC Agreement
"), pursuant to which, among other things, the parties thereto
provided for Holdings to redeem, upon notice therefor by a Stockholder, Common Units of Holdings ("
LLC Units
") owned by such Stockholder in exchange for
shares of Company Class A Common Stock or for cash (a "
Redemption
");
WHEREAS,
in the event that a holder of LLC Units exercises its right to require Holdings to effect a Redemption, Company has the right to elect to require that such holder
exchange its LLC Units subject to such Redemption directly with Company for an equal number of shares of Company Class A Common Stock or for cash (any such exchange, an
"
Exchange
");
WHEREAS,
the Company Certificate provides that, simultaneous with an Exchange or a Redemption, Company shall cancel a number of shares of Company Class B Common Stock owned by the
applicable Stockholder equal to the number of LLC Units so exchanged or redeemed;
WHEREAS,
Company, the Stockholders, the holders of LLC Options (the "
LLC Optionholders
"), Mark Irion, as "Management
Representative" thereunder (the "
Management Representative
"), and other members of Holdings from time to time are parties to (a) that certain Tax
Receivable Agreement, dated as of November 26, 2014 (as amended, the "
Tax Receivable Agreement
"), pursuant to which Company is obligated to make
payments to certain parties thereto based on the reduction of Company's liability for U.S. federal, state and local income and franchise taxes arising from adjustments to Holdings' basis in its assets
and imputed interest and (b) that certain Registration Rights Agreement, dated as of November 26, 2014 (as amended, the "
Registration Rights
Agreement
"), pursuant to which such parties are entitled to certain rights with respect to the registration of shares of Company Class A Common Stock issuable in an
Exchange or a Redemption;
WHEREAS,
simultaneous with the execution and delivery of this Agreement, Company, Parent and Merger Sub are entering into the Merger Agreement, pursuant to which Merger Sub will be
merged with and into Company, with Company surviving that merger (the "
Merger
"); and
WHEREAS,
immediately prior to the effective time of the Merger, the Parties intend for (a) the Tax Receivable Agreement to be terminated by the parties thereto, (b) the
Registration Rights Agreement to be terminated by the parties thereto, and (c)(i) the Stockholders to effect an Exchange of all of the LLC Units owned by them directly with Company for an equal
number of shares of Company Class A Common Stock and (ii) simultaneous with such Exchange, Company to cancel all of the shares of Company Class B Common Stock owned by the
Stockholders pursuant to the Company Certificate.
C-1
NOW,
THEREFORE, in consideration of the foregoing and of the representations, warranties, covenants and agreements contained in this Agreement, the Parties, intending to be legally
bound, agree as follows:
1.
Exchange
.
(a) Immediately
prior to the Effective Time and pursuant to
Sections 11.01
through
11.03
of the Holdings LLC Agreement, all of the LLC Units owned by each
of the Stockholders (as set forth next to such Stockholder's name
on
Exhibit A
) shall be exchanged directly with Company for the number of shares of Company Class A Common Stock set forth next to such
Stockholder's name on
Exhibit A
. Simultaneous with the consummation of each Exchange described in the immediately preceding sentence (each such
Exchange shall be collectively referred to herein as the "
Specified Exchange
"), without the requirement for any further action by any of the Parties,
all of the Stockholders' shares of Company Class B Common Stock will be cancelled by Company pursuant to the Company Certificate for no consideration. The Stockholders acknowledge and agree
that the shares of Company Class A Common Stock received by the Stockholders in the Specified Exchange shall be "Stockholder Owned Shares" under the Support Agreement. Upon the effectiveness of
any Permitted Transfer (as defined in the Support Agreement), Parent shall amend
Exhibit A
to reflect such Permitted Transfer.
(b) Immediately
prior to the Effective Time and simultaneous with the consummation of the Specified Exchange, Company shall (i) issue to each of the Stockholders the
number of shares of Company Class A Common Stock set forth next to such Stockholder's name on
Exhibit A
, and (ii) duly deliver to
each Stockholder a certificate issued in the name of such Stockholder representing the number of shares of Company Class A Common Stock set forth next to such Stockholder's name on
Exhibit A
,
duly executed by the appropriate officers of Company and duly recorded on the books of Company or its transfer agent in the name of
such Stockholder. Company covenants that all shares of Company Class A Common Stock issuable to the Stockholders in the Specified Exchange will, upon issuance, be validly issued, fully paid and
non-assessable, free and clear of all taxes and Liens of any kind (except for proxies and restrictions in favor of Parent and its designees expressly arising pursuant to the Support Agreement,
transfer restrictions imposed by the Support Agreement and transfer restrictions of general applicability as may be provided under the Securities Act and state securities laws).
(c) The
Stockholders, Holdings and Company hereby (i) agree that this Agreement shall constitute the Redemption Notice, the Contribution Notice and the Exchange
Election Notice for a Share Settlement pursuant to the Holdings LLC Agreement and (ii) irrevocably waive any notice periods required or permitted by the Holdings LLC Agreement in
connection with the Specified Exchange and any obligation to deliver any other notices or elections thereunder. Subject to
Section 7(a)
hereof,
the
Stockholders, Holdings and Company hereby irrevocably waive the right to, as applicable, deliver a Retraction Notice or otherwise revoke the Redemption Notice, Contribution Notice or Exchange Election
Notice. Company irrevocably agrees that the Specified Exchange will be a Direct Exchange made by means of a Share Settlement. Any capitalized terms used but not defined in this
Section 1(c)
shall
have the meanings set forth in the Holdings LLC Agreement. For the avoidance of doubt, if this Agreement is terminated,
any elections hereunder shall be null and void
ab initio
, and neither the Stockholders nor Company will be required to consummate any Exchange or
Redemption.
2.
Terminations
.
(a) Effective
immediately prior to the Effective Time, without the requirement for any further action by any of the Parties, the Tax Receivable Agreement shall be
irrevocably terminated at no cost to the Stockholders, Company, the Surviving Corporation, Parent or any of their respective Subsidiaries and shall be of no further force or effect, and all
liabilities of the
C-2
Stockholders,
the Management Representative, the LLC Optionholders, Company, the Surviving Corporation, Parent and their respective Subsidiaries relating thereto shall be irrevocably cancelled,
extinguished and waived. Notwithstanding anything to the contrary in the Tax Receivable Agreement (including Sections 4.1(b) and 4.3 thereof), none of the Stockholders, the Management
Representative, the LLC Optionholders, Company, the Surviving Corporation, Holdings, Parent or any of their respective Subsidiaries shall have any payment or other obligations under the Tax
Receivable Agreement resulting from the consummation of the transactions contemplated by this Agreement, the Merger Agreement or otherwise. Each of the Stockholders hereby acknowledges and agrees that
it is foregoing substantial economic, financial and pecuniary benefits from terminating the Tax Receivable Agreement pursuant hereto and it is doing so voluntarily and with a full understanding that
it is foregoing such benefits without receipt of any payments or other consideration therefor. Each of Company and Parent hereby acknowledges and agrees that the substantial economic, financial and
pecuniary benefits that the Stockholders are foregoing as a result of the termination of the Tax Receivable Agreement pursuant hereto is conferring substantial economic, financial and pecuniary
benefits to Company and its stockholders.
(b) Effective
immediately prior to the Effective Time, without the requirement for any further action by any of the Parties, the Registration Rights Agreement shall be
irrevocably terminated at no cost to the Stockholders, the Management Representative, the LLC Optionholders, Company, the Surviving Corporation, Parent or any of their respective Subsidiaries
and shall be of no further force or effect, and all liabilities of the Stockholders, the Management Representative, the LLC Optionholders,
Company, the Surviving Corporation, Parent and their respective Subsidiaries relating thereto shall be irrevocably cancelled, extinguished and waived.
(c) Effective
immediately prior to the Effective Time, without the requirement for any further action by any of the Parties, all agreements (other than (i) the
Holdings LLC Agreement, (ii) the Support Agreement, (iii) this Agreement, (iv) the Indemnity Agreements set forth in Section 6.5 of the Company Disclosure Schedule,
(v) the Company Certificate and the Company Bylaws, and (vi) arrangements providing for the payment or reimbursement of costs and expenses incurred by any director of Company in his or
her capacity as such, which director is also an affiliate of a Stockholder (the agreements and arrangements referred to in this parenthetical being referred to herein as the
"
Excepted Agreements
")) between the Stockholders or their affiliates, on the one hand, and Company and any of its Subsidiaries, on the other hand (such
agreements, the "
Related Party Agreements
"), shall be irrevocably terminated at no cost to the Stockholders, Company, the Surviving Corporation, Parent
or any of their respective Subsidiaries and shall be of no further force or effect, and all liabilities of the Stockholders, Company and the Surviving Corporation and their respective Subsidiaries
relating thereto shall be irrevocably cancelled, extinguished and waived.
Schedule 1
to this Agreement sets forth a true and complete list of all
Related Party Agreements.
(d) In
consideration of the mutual agreements herein contained, effective as of the Effective Time, each of the Stockholders, on behalf of itself, its affiliates (excluding
for this purpose Company and its Subsidiaries), its Subsidiaries and their respective Releasing Representatives, fully, finally and forever releases, discharges and waives any and all civil actions,
causes of action, claims, costs of suit, counterclaims, debts, demands, judgments, liabilities, obligations and actions for legal fees, in law or in equity, known or unknown, asserted or not, existing
or not, of whatever kind or nature, in any jurisdiction, including in arbitration proceedings or any other forum, which have arisen or may arise in the future under the Tax Receivable Agreement, the
Registration Rights Agreement or the Holdings LLC Agreement against Company, the Surviving Corporation, Holdings, Parent and their respective Subsidiaries and Releasing Representatives;
provided
,
however
, that nothing contained herein shall operate to release any claims, liabilities or
obligations related to, or amend, modify or terminate, (A) any term or provision of the Holdings LLC
C-3
Agreement
(as in effect as of immediately prior to the date hereof) that provides any officer or manager of Holdings, or any officer or manager of Holdings that was serving at the request of Holdings
as a manager, officer, director, principal, member, employee or agent of any direct or indirect Subsidiary of Holdings, with rights of indemnification or reimbursement or advancement of expenses,
including, without limitation, any term or provision set forth in Section 7.04 of the Holdings LLC Agreement (as in effect on the date hereof) to the extent applicable to any such
officer or manager of Holdings, (B) any term or provision of the Holdings LLC Agreement (as in effect as of immediately
prior to the Effective Time) that provides the Company, any Stockholder, the Management Representative, any LLC Optionholder or any of their respective affiliates, Subsidiaries or Releasing
Representatives with rights of exculpation and/or limitation of liability (but expressly excluding any rights to indemnification, reimbursement or advancement of expenses other than as set forth in
clause (A)
), including, without limitation, any term or provision set forth in any of Sections 3.01(c), 3.07, 6.09(a), 7.01(a) and 7.01(c)
of the Holdings LLC Agreement (as in effect on the date hereof), (C) the Surviving Reporting Obligation (as defined below), and (D) any term or provision of the
Holdings LLC Agreement (as in effect on the date hereof) that provides for the maintenance of capital accounts or the allocation of items of income, gain, loss, deduction or credit, including,
without limitation, any term or provision set forth in Article V of the Holdings LLC Agreement (as in effect on the date hereof) (in the case of this
clause (D)
, solely with respect to
any taxable period ending on or before the Closing Date, or any taxable period beginning before the Closing
Date and ending after the Closing Date). The terms, provisions and obligations described in
clauses (A)
,
(B)
,
(C)
and
(D)
of the proviso of the
immediately preceding sentence shall be collectively referred to herein as the "
Continuing Provisions
". The term "
Releasing
Representatives
" means the affiliates, agents, assigns, attorneys, directors, employees, officers, owners, parents, partners, representatives, members, shareholders, heirs,
auditors, consultants, predecessors, divisions, managers, trustees and advisors (including past, present and future of any and all of the foregoing) of any Party or person.
3.
Representations and Warranties of the Stockholders.
Each Stockholder hereby represents and warrants
to each other Party as follows:
(a)
Authority; Binding Nature.
Such Stockholder has full limited partnership power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby to be consummated by such Stockholder. The execution and delivery of this Agreement
by such Stockholder, the performance of such Stockholder's obligations hereunder and the consummation by such Stockholder of the transactions contemplated hereby to be consummated by such Stockholder
have been duly and validly authorized by all necessary limited partnership action on the part of such Stockholder. No other proceedings on the part of such Stockholder are necessary to approve this
Agreement by such Stockholder or to consummate the transactions contemplated hereby to be consummated by such Stockholder. This Agreement has been duly and validly executed and delivered by such
Stockholder and (assuming due authorization, execution and delivery by other Parties) constitutes a valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance
with its terms (except in all cases as such enforceability may be limited by the Enforceability Exceptions).
(b)
Ownership of Shares.
As of the date hereof, such Stockholder beneficially owns the number of shares of
Company Class B Common Stock and LLC Units set forth opposite the name of such Stockholder on
Exhibit A
hereto free and clear of
any proxy, voting or transfer restriction, adverse claim or other Lien (except for proxies and restrictions in favor of Parent and its designees expressly arising pursuant to the Support Agreement,
transfer restrictions imposed by Holdings LLC Agreement and transfer restrictions of general applicability as may be provided under the Securities Act and state securities laws). Such
Stockholder has the sole power to vote
C-4
(or
cause to be voted) such shares of Company Class B Common Stock and LLC Units, the sole power to dispose of such shares of Company Class B Common Stock and LLC Units and
good and valid title to such shares of Company Class B Common Stock and LLC Units. As of the date hereof, such Stockholder does not own, beneficially or of record, any securities of
Holdings other than such LLC Units.
(c)
No Conflicts.
Neither the execution and delivery of this Agreement by such Stockholder, nor the performance
by such Stockholder of its obligations under this Agreement, will (i) conflict with or violate any provision of the organizational documents of such Stockholder or
(ii) (A) violate any Law applicable to such Stockholder or any of its properties or assets, (B) result in the creation by such Stockholder of any Lien upon its shares of Company
Class B Common Stock or LLC Units or (C) violate, conflict with, result in the loss of any material benefit under, constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, result in the termination of or a right of termination or cancellation under, or accelerate the performance required by such Stockholder under, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, permit, lease, agreement or other instrument or obligation to which such Stockholder is a party, or
by which such Stockholder or any of its properties or assets may be bound or affected, except for, in the case of
clause (ii)(C)
, any such
violations, conflicts, losses, defaults, terminations, cancellations or accelerations that would not reasonably be expected to prevent the performance by such Stockholder of its obligations under this
Agreement.
(d)
Absence of Litigation.
As of the date hereof, there is no suit, action, investigation, claim or proceeding
pending or, to such Stockholder's knowledge, threatened against or involving or affecting, such Stockholder, its shares of Company Class B Common Stock or its LLC Units that would
reasonably be expected to impair the ability of such Stockholder to perform fully its obligations hereunder or to consummate on a timely basis the transactions contemplated hereby to be consummated by
such Stockholder.
(e)
Brokers.
No broker, investment banker, financial advisor or other Person is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission that is payable by Company, the Surviving Corporation, Parent or any of their respective Subsidiaries in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of such Stockholder (excluding, for the avoidance of doubt, any such broker, investment banker, financial advisor or other
Person retained or engaged by Company).
4.
[Intentionally Deleted.]
5.
Representations and Warranties of Parent, Company and Holdings.
Parent, Company and Holdings
hereby represent and warrant, severally and not jointly, to each other Party as follows
(
provided
, that (x) the representation and warranty made in
Section 5(d)
shall only be
made by Parent, and (y) the representations and warranties made in
Section 5(e)
shall only be made by Company and Holdings):
(a)
Authority; Binding Nature.
Such Party has full power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions contemplated hereby to be consummated by such Party. The execution and delivery of this Agreement by such Party, the performance of
such Party's obligations hereunder and the consummation by such Party of the transactions contemplated hereby to be consummated by such Party have been duly and validly authorized by all necessary
action on the part of such Party. No other proceedings on the part of such Party are necessary to approve this Agreement or to consummate the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by such Party and constitutes a valid and binding obligation of such Party, enforceable against such Party in accordance with its terms (except in all cases as
such enforceability may be limited by the Enforceability Exceptions).
C-5
(b)
No Conflicts.
Neither the execution and delivery of this Agreement by such Party, nor the performance by
such Party of its obligations under this Agreement, will (i) violate any Law applicable to such Party or any of its properties or assets, or (ii) violate, conflict with, result in the
loss of any material benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of
termination or cancellation under, or accelerate the performance required by such Party under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust,
license, permit, lease, agreement or other instrument or obligation to which such Party is a party, or by which such Party or its respective properties or assets may be bound or affected.
(c)
Absence of Litigation.
As of the date hereof, there is no suit, action, investigation, claim or proceeding
pending or, to such Party's knowledge, threatened against or involving or affecting, such Party that would reasonably be expected to impair the ability of such Party to perform fully its obligations
hereunder or to consummate on a timely basis the transactions contemplated hereby to be consummated by such Party.
(d)
Ownership of Equity Interests.
Parent does not own, beneficially or of record, any securities of Company or
Holdings.
(e)
LLC Units and LLC Options.
As of the date hereof, the LLC Units owned by the Stockholders (as
set forth on
Exhibit A
) constitute all of the issued and outstanding LLC Units. As of the date hereof, there are no other Equity Interests
of Holdings outstanding other than such LLC Units and LLC Options held by the LLC Optionholders.
6.
Tax Matters.
(a) The
Parties agree to treat the Specified Exchange as (i) a taxable transaction for U.S. federal income Tax purposes (and state, local, and foreign income
Tax purposes, where applicable) that is treated in the manner set forth in Revenue Ruling 99-6, 1999-1 C.B. 432 (Situation 1); and (ii) permitting an adjustment to the basis in Holdings' assets
under Section 1012 of the Code (or any corresponding or similar provision of state, local or foreign Tax Law).
(b) The
Parties agree that, within thirty (30) days of the date hereof and no later than ten (10) days prior to the Closing Date, with prior written
notification to Parent and the Stockholders, Company (or its agent) will determine the allocation of (i) the fair market value of the shares of Company Class A Common Stock to be
received in the Specified Exchange (based upon the dollar amount of the Merger Consideration), and (ii) any other amounts treated as consideration for U.S. federal income Tax purposes,
among the assets of Holdings in accordance with Section 1060 of the Code (the "
Allocation
"). The Allocation shall be part of this Agreement.
Following the Closing Date, neither Parent, Company nor Holdings shall amend or otherwise modify the Allocation without the prior written consent of the Stockholders.
(c) Following
the Effective Time, Parent shall prepare or cause to be prepared and, subject to the remaining provisions of this
Section 6(c)
, file or cause to be filed prior to the due date therefor, all Tax
Returns for Holdings and its Subsidiaries for any taxable period
ending on or before the Closing Date, or any taxable period beginning before the Closing Date and ending after the Closing Date, in either such case that are filed after the Closing Date, and the
appropriate officer of Holdings or such Subsidiary shall sign and timely file same. All Tax Returns to be prepared by Parent pursuant to this
Section 6(c)
shall be prepared in a manner consistent
with the pre-Closing practices of Holdings and its Subsidiaries. With respect to all Tax
Returns to be prepared by Parent pursuant to this
Section 6(c)
, (i) Parent shall provide the Stockholders with drafts of such Tax Returns
at least forty-five (45) days prior to the due date for filing such Tax Returns, (ii) at least fifteen (15) days prior to the due date for the filing of such Tax Returns, the
Stockholders shall notify Parent of the existence of any objection the Stockholders may have to any
C-6
items,
calculations or other matters set forth on such draft Tax Returns, and (iii) if, after consulting in good faith, Parent and the Stockholders are unable to resolve such objection(s) in a
mutually agreeable
manner, such objection(s) shall be referred to an independent accounting firm mutually acceptable to Parent and the Stockholders for resolution on a basis consistent with the pre-Closing practices of
Holdings and its Subsidiaries with respect to such items, calculations or other matters.
(d) The
Parties acknowledge and agree that any deductions or other Tax benefits attributable to Holdings and/or any of its Subsidiaries and related to the transactions
contemplated by the Merger Agreement (including any deductions or other Tax benefits attributable to the payment of any amounts to employees or other service providers, lenders or otherwise, whether
or not any such amounts are actually paid on the Closing Date) will be reported on Holdings' final partnership Tax Return for its taxable period ending on the Closing Date.
(e) Parent
and Company shall not initiate any claim for refund or amend any Tax Return in a manner which could adversely affect any of the Stockholders without the prior
written consent of the Stockholders.
(f) If
(i) there shall be any inquiry, claim, assessment, audit, administrative or judicial proceeding, or similar event with respect to the Allocation or Taxes or
any Tax matter relating, or with respect to, any taxable period of Holdings or any of its Subsidiaries ending on or before the Closing Date, or any taxable period of Holdings or any of its
Subsidiaries beginning before the Closing Date and ending after the Closing Date (any of the foregoing, a "
Tax Matter
"), and (ii) any such Tax
Matter (or the resolution thereof) could adversely affect any of the Stockholders, then Parent shall (x) keep the Stockholders reasonably and timely informed with respect to such Tax Matter,
(y) in good faith, allow the Stockholders to make comments to Parent regarding the conduct of or positions taken in any such Tax Matter and (z) not enter into any settlement or
compromise with respect to such Tax Matter without the prior written consent of the Stockholders.
(g) Company
shall and, following the Merger, Parent will cause Company and the Surviving Corporation to, comply with the obligations of Company under
(i) Section 8.03 of the Holdings LLC Agreement as in effect as of the date hereof and (ii) the second and third sentences of Section 9.01 of the Holdings LLC
Agreement as in effect as of the date hereof (such obligations, collectively, the "
Surviving Reporting Obligation
"). Effective immediately following the
Effective Time, Company, the Surviving Corporation and Holdings shall have no further obligations or liabilities (other than obligations and/or liabilities under or with respect to the Continuing
Provisions) to the Stockholders pursuant to or in respect of the Holdings LLC Agreement and the Surviving Company may amend, restate or terminate the Holdings LLC Agreement in its sole
discretion;
provided
,
however
, that the Continuing Provisions shall continue in full force and effect,
and the Stockholders and their respective Releasing Representatives, shall continue to have the benefits thereof, notwithstanding any such amendment, restatement or termination.
(h) The
Parties agree to file all Tax Returns (including IRS Form 8594 or any other applicable form) consistently with this
Section 6
.
(i) The
Parties acknowledge and agree that the fair market value of the shares of Company Class A Common Stock to be received in the Specified Exchange shall be
determined based upon the dollar amount of the Merger Consideration and that the "Common Unit Redemption Price" (as defined in the Holdings LLC Agreement) is inapplicable to a Share Settlement
(as defined in the Holdings LLC Agreement).
7.
Miscellaneous.
(a)
Term.
This Agreement shall remain in full force and effect unless and until the Support Agreement is
terminated in accordance with its terms (except for a termination of the Support
C-7
Agreement
on account of the consummation of the Merger). In the event that the Merger Agreement is terminated in accordance with its terms, (i) this Agreement shall automatically and
immediately terminate and be of no further force and effect, all without the need for any further action of the part of (or notice to) any person and (ii) there shall be no liability or
obligation hereunder on the part of any Party or any of their respective affiliates, or any of their respective managers, directors, stockholders, members, partners, officers, employees, agents,
consultants, accountants, attorneys, investment bankers, financial advisors, representatives, successors or assigns. Without limiting the immediately preceding sentence, if this Agreement is
terminated then the Stockholders shall not be required to consummate the Specified Exchange. None of the representations or warranties made by any Party in
Section 3
or
Section 5
hereof, as applicable, shall survive the termination of this
Agreement or the Effective Time.
(b)
Further Actions.
Following the date hereof, the Parties shall take all actions reasonably necessary and
execute and deliver all documents and instruments to each other and third parties (including Company's stock transfer agent) reasonably requested by a Party to give effect to the transactions
contemplated hereby immediately prior to the Effective Time. The Parties agree that the Effective Time shall not occur until such time as all of the transactions contemplated by
Sections 1
and
2
have become effective.
(c)
Amendments and Waivers.
Except for amendments to
Exhibit A
as contemplated by
Section 1
(a)
, this Agreement may not be amended, modified or
supplemented in any manner, whether by course of
conduct or otherwise, except by an instrument in writing specifically designated as an amendment hereto, signed on behalf of each of the Parties. No failure on the part of any Party to exercise any
power, right, privilege or remedy under this Agreement, and no delay on the part of any Party in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of
such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power,
right, privilege or remedy. Any agreement on the part of a Party to any such waiver shall be valid only if set forth in a written instrument signed on behalf of such Party, but such waiver or failure
to insist on strict compliance with an obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.
(d)
Counterparts.
This Agreement may be executed in two or more counterparts (including by facsimile or other
electronic means, including signatures received as a .pdf attachment to electronic mail), all of which shall be considered one and the same agreement and shall become effective when counterparts have
been signed by each of the Parties and delivered to the other Parties, it being understood that all Parties need not sign the same counterpart.
(e)
Applicable Law; Jurisdiction; Waiver of Jury Trial.
This Agreement, and any Action, dispute or other
controversy arising out of or relating hereto shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without regard to any applicable conflicts of law principles
thereof. Each Party agrees that any action or proceeding in respect of any claim arising out of or related to this Agreement or the transactions contemplated hereby shall be brought, heard, tried and
determined exclusively in the Chosen Courts, and, solely in connection with claims arising under this Agreement or the transactions that are the subject of this Agreement, (i) irrevocably and
unconditionally submits to the exclusive jurisdiction of the Chosen Courts, (ii) irrevocably and unconditionally waives any objection to laying venue in any such action or proceeding in the
Chosen Courts, (iii) irrevocably and unconditionally waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any Party and (iv) agrees that
service of process upon such Party in any such action or proceeding that is given in accordance with
Section 7(f)
or in such other manner as may
be permitted by applicable Law, shall be valid, effective and sufficient service thereof. EACH PARTY ACKNOWLEDGES AND
C-8
AGREES
THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR OTHER PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY SUCH ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS
SECTION 7(e)
.
(f)
Notices.
All notices and other communications hereunder shall be in writing and shall be deemed duly given
or received (i) when personally delivered, (ii) on the date sent by email of a "portable document format" (.pdf) document (so long as written notice of such transmission is sent within
two (2) business days thereafter by another delivery method hereunder) or (iii) one (1) business day following the date sent if such notice is sent by FedEx or another
nationally recognized overnight delivery service. All notices hereunder shall be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by
the Party to receive such notice:
(i) if
to either Stockholder, to:
c/o
Wayzata Investment Partners LLC
701 East Lake Street, Suite 300
Wayzata, MN 55391
Attention: Ray Wallander, Esq.
Email: rwallander@wayzpartners.com
With a copy (which shall not constitute notice) to:
Stroock &
Stroock & Lavan LLP
180 Maiden Lane
New York, NY 10038-4982
Attention: Matthew A. Schwartz, Esq.
Email: mschwartz@stroock.com
(ii) if
to Company or Holdings, to:
Neff
Corporation
3750 NW 87
th
Avenue
Suite 400
Miami, Florida 33178-2433
Attention: Mark Irion
Email: MIrion@Neffcorp.com
C-9
With a copy (which shall not constitute notice) to:
Akin
Gump Strauss Hauer & Feld LLP
One Bryant Park
Bank of America Tower
New York, New York 10036-6745
Attention: Daniel I. Fisher
Zachary N. Wittenberg
Email: dfisher@akingump.com
zwittenberg@akingump.com
(iii) if
to Parent, to:
H&E
Equipment Services
7500 Pecue Ln
Baton Rouge, LA 70809
Attention: John Engquist
Email: jengquist@he-equipment.com
With a copy (which shall not constitute notice) to:
Dechert LLP
1095 Avenue of the Americas
New York, New York 10036-6797
Attention: Derek M. Winokur
Email: Derek.Winokur@dechert.com
(g)
Entire Agreement.
This Agreement (including the documents and the instruments referred to herein)
constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior agreements and undertakings.
(h)
Assignment; Third Party Beneficiaries; Transferees.
Neither this Agreement nor any of the rights, interests
or obligations shall be assigned by any of the Parties (whether by operation of Law or otherwise) without the prior written consent of the other Parties;
provided
that Parent may assign this Agreement
to one or more of its direct or indirect wholly-owned subsidiaries. No assignment shall relieve the
assigning party of any of its obligations hereunder. Any purported assignment in contravention hereof shall be null and void. 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 permitted assigns and any transferee of LLC Units owned by either of the Stockholders. Any
transferee in a Permitted Transfer (as defined in the Support Agreement) of LLC Units owned by either of the Stockholders shall execute and deliver to Parent a written agreement, in form and
substance reasonably acceptable to Parent, obligating such transferee to be bound by the terms of this Agreement with respect to such LLC Units. This Agreement (including the documents and
instruments referred to herein) is not intended to and does not confer upon any Person (other than the Parties and, solely with respect to
Section 7(k)
hereof, the No Recourse Parties (as defined
below)) any rights or remedies hereunder, including the right to rely upon the
representations and warranties set forth herein.
(i)
Severability.
The provisions of this Agreement shall be deemed severable. Whenever possible, each provision
or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision or portion of any provision of this Agreement
is held to be invalid, illegal or unenforceable in any respect under any applicable Law in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or
portion of any provision in such jurisdiction or the application of that provision, in any other jurisdiction, and this Agreement shall be reformed, construed and enforced in such
C-10
jurisdiction
such that a suitable and equitable provision shall be substituted for that provision in order to carry out, so far as may be valid and enforceable, the intent and purpose of the invalid
or unenforceable provision.
(j)
Enforcement.
The Parties agree that irreparable damage would occur if any provision of this Agreement were
not performed in accordance with its specific terms or were otherwise breached and that the Parties may not have an adequate remedy at Law in the event that any of the obligations of this Agreement
were not performed in accordance with its specific terms or otherwise breached. Accordingly, the Parties shall be entitled to specific performance of the terms hereof, including an injunction or
injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof, in addition to any other remedy to which they are entitled at Law or in
equity, including monetary damages. Each of the Parties hereby further waives (i) any defense in any action for specific performance that a remedy at Law would be adequate, (ii) an award
of performance is not an appropriate remedy for any reason at Law or equity, and (iii) any requirement under any Law to post security or a bond or similar undertaking as a prerequisite to
obtaining equitable relief.
(k)
Non-Recourse.
Notwithstanding anything that may be expressed or implied in this Agreement, and
notwithstanding the fact that the Stockholders may be partnerships, the Parties covenant, agree and acknowledge that no recourse under this Agreement shall be had against any former, current or future
directors, officers, agents, affiliates, limited partners, general partners, members, managers, employees, stockholders or equity holders of any Stockholder, or any former, current or future
directors, officers, agents, affiliates, employees, general or limited partners, members, managers, employees, stockholders or equity holders of any of the foregoing, as such (any such Person, a
"
No Recourse Party
"), whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or
other applicable Law, it being expressly agreed and acknowledged that no liability whatsoever shall attach to, be imposed on or otherwise be incurred by any No Recourse Party for any obligation of any
Stockholder under this Agreement for any claim based on, in respect of or by reason of such obligations or their creation.
(l)
Obligations Several.
The obligations of the Stockholders under this Agreement shall be several and not joint
and several.
(m)
Certain Acknowledgments.
Parent, Holdings and Company hereby irrevocably acknowledge and agree that:
(i) the
consummation of the Specified Exchange by each of the Stockholders shall be exempt from the operation of Section 16(b) of the Exchange Act; and
(ii) the
fair market value of each of the LLC Units owned by each of the Stockholders that are exchanged for shares of Company Class A Common Stock pursuant to
the Specified Exchange is equal to the Merger Consideration and, as such, there is no profit or gain realized by any of the Stockholders upon the sale or other disposition of any such shares of
Company Class A Common Stock pursuant to the Merger.
[SIGNATURE
PAGE FOLLOWS]
C-11
IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
|
|
|
|
|
|
|
|
|
H&E EQUIPMENT SERVICES, INC.
|
|
|
By:
|
|
/s/ JOHN ENGQUIST
|
|
|
|
|
Name:
|
|
John Engquist
|
|
|
|
|
Title:
|
|
Chief Executive Officer
|
[Signature
Page for Exchange and Tax Receivable Termination Agreement]
|
|
|
|
|
|
|
|
|
NEFF CORPORATION
|
|
|
By:
|
|
/s/ MARK IRION
|
|
|
|
|
Name:
|
|
Mark Irion
|
|
|
|
|
Title:
|
|
Chief Financial Officer
|
[Signature
Page for Exchange and Tax Receivable Termination Agreement]
|
|
|
|
|
|
|
|
|
NEFF HOLDINGS, LLC
|
|
|
By:
|
|
Neff Corporation, its managing member
|
|
|
By:
|
|
/s/ MARK IRION
|
|
|
|
|
Name:
|
|
Mark Irion
|
|
|
|
|
Title:
|
|
Chief Financial Officer
|
[Signature
Page for Exchange and Tax Receivable Termination Agreement]
|
|
|
|
|
|
|
|
|
STOCKHOLDERS:
|
|
|
WAYZATA OPPORTUNITIES FUND II, L.P.
|
|
|
By:
|
|
WOF II GP, L.P., its General Partner
|
|
|
By:
|
|
WOF II GP, LLC, its General Partner
|
|
|
By:
|
|
/s/ PATRICK J. HALLORAN
|
|
|
|
|
Name:
|
|
Patrick J. Halloran
|
|
|
|
|
Title:
|
|
Authorized Signatory
|
[Signature
Page for Exchange and Tax Receivable Termination Agreement]
|
|
|
|
|
|
|
|
|
WAYZATA OPPORTUNITIES FUND
OFFSHORE II, L.P.
|
|
|
By:
|
|
Wayzata Offshore GP, II, LLC, its General
Partner
|
|
|
By:
|
|
/s/ PATRICK J. HALLORAN
|
|
|
|
|
Name:
|
|
Patrick J. Halloran
|
|
|
|
|
Title:
|
|
Authorized Signatory
|
[Signature
Page for Exchange and Tax Receivable Termination Agreement]
Exhibit A
|
|
|
|
|
|
|
|
|
|
|
Stockholder
|
|
Number of LLC
Units
|
|
Number of shares
of Class B Common
Stock
|
|
Number of shares
of Class A Common
Stock
|
|
Wayzata Opportunities Fund II, L.P.
|
|
|
14,585,304
|
|
|
14,585,304
|
|
|
14,585,304
|
|
Wayzata Opportunities Fund Offshore II, L.P.
|
|
|
366,321
|
|
|
366,321
|
|
|
366,321
|
|
Schedule 1
Related
Party Agreements
Excepted
Agreements
Annex D
EXCHANGE AND TERMINATION AGREEMENT
This Exchange and Termination Agreement (this "
Agreement
"), is entered into as of
July 14, 2017, by and among H&E Equipment Services, Inc., a Delaware corporation ("
Parent
"), Neff Corporation
("
Company
"), Neff Holdings LLC ("
Holdings
"), the holders of LLC Options (the
"
LLC Optionholders
") and Mark Irion (the "
Management Representative
"). The parties to this Agreement are
referred to herein as the "
Parties
" or, each individually, a "
Party
." Any capitalized terms used but not
defined herein shall have the meanings set forth in the Agreement and Plan of Merger (the "
Merger Agreement
"), dated as of the date hereof, by and among
Parent, Company, and Yellow Iron Merger Co., a Delaware corporation and wholly owned subsidiary of Parent ("
Merger Sub
"), as the Merger Agreement
is in effect on the date hereof.
RECITALS
WHEREAS, Company and Wayzata Opportunities Fund II, L.P. ("
Opportunities Fund
"), Wayzata
Opportunities Fund Offshore II, L.P. ("
Opportunities Fund Offshore
" and, together with Opportunities Fund, the
"
Stockholders
" and each individually, a "
Stockholder
"), are parties to that certain Second Amended and
Restated Limited Liability Company Agreement of Holdings, dated as of November 26, 2014 (as amended, the "
Holdings LLC Agreement
"),
pursuant to which, among other things, the parties thereto provided for Holdings to redeem, upon notice therefor by a Stockholder, Common Units of Holdings ("
LLC
Units
") owned by such Stockholder in exchange for shares of Company Class A Common Stock or for cash (a "
Redemption
");
WHEREAS,
in the event that a holder of LLC Units exercises its right to require Holdings to effect a Redemption, Company has the right to elect to require that such holder
exchange its LLC Units subject to such Redemption directly with Company for an equal number of shares of Company Class A Common Stock or for cash (any such exchange, an
"
Exchange
");
WHEREAS,
Company, the Stockholders, the LLC Optionholders, the Management Representative and other members of Holdings from time to time are parties to (a) that certain Tax
Receivable Agreement, dated as of November 26, 2014 (as amended, the "
Tax Receivable Agreement
"), pursuant to which Company is obligated to make
payments to certain parties thereto based on the reduction of Company's liability for U.S. federal, state and local income and franchise taxes arising from adjustments to Holdings' basis in its assets
and imputed interest and (b) that certain Registration Rights Agreement, dated as of November 26, 2014 (as amended, the "
Registration Rights
Agreement
"), pursuant to which such parties are entitled to certain rights with respect to the registration of shares of Company Class A Common Stock issuable in an
Exchange or a Redemption;
WHEREAS,
simultaneous with the execution and delivery of this Agreement, Company, Parent and Merger Sub are entering into the Merger Agreement, pursuant to which Merger Sub will be
merged with and into Company, with Company surviving that merger (the "
Merger
"); and
WHEREAS,
immediately prior to the effective time of the Merger, the Parties intend for (a) the Tax Receivable Agreement to be terminated by the parties thereto, (b) the
Registration Rights Agreement to be terminated by the parties thereto, and (c)(i) the LLC Options to be exercised on a cashless basis immediately prior to the Effective Time for LLC
Units and (ii) the LLC Optionholders to effect an Exchange of all such LLC Units resulting from the exercise of their respective LLC Options directly with Company for an
equal number of shares of Company Class A Common Stock.
D-1
NOW,
THEREFORE, in consideration of the foregoing and of the representations, warranties, covenants and agreements contained in this Agreement, the Parties, intending to be legally
bound, agree as follows:
1.
Exchange and Exercise.
(a) Immediately
prior to the Effective Time (but immediately after the Specified LLC Option Exercise (as defined below)) and pursuant to
Sections 11.01
through
11.03
of the Holdings LLC Agreement, all of the LLC Units
owned by each of the LLC Optionholders (after giving effect to the Specified LLC Option Exercise) shall be exchanged directly with Company on a one-for-one basis for shares of Company
Class A Common Stock (the "
Resulting Shares
") (each such Exchange shall be collectively referred to herein as the
"
Specified Exchange
").
(b) Immediately
prior to the Effective Time and simultaneous with the consummation of the Specified Exchange, Company shall (i) issue to each of the LLC
Optionholders such LLC Optionholder's Resulting Shares and (ii) duly deliver to each LLC Optionholder a certificate issued in the name of such LLC Optionholder representing
such LLC Optionholder's Resulting Shares, duly executed by the appropriate officers of Company and duly recorded on the books of Company or its transfer agent in the name of such LLC
Optionholder. Company covenants that all shares of Company Class A Common Stock issuable to the LLC Optionholders in the Specified Exchange will, upon issuance, be validly issued, fully
paid and non-assessable, free and clear of all taxes and Liens of any kind (except for transfer restrictions of general applicability as may be provided under the Securities Act and state securities
laws).
(c) The LLC
Optionholders, Holdings and Company hereby (i) agree that this Agreement shall constitute the Redemption Notice, the Contribution Notice and the
Exchange Election Notice for a Share Settlement pursuant to the Holdings LLC Agreement and (ii) irrevocably waive any notice periods required or permitted by the Holdings LLC
Agreement in connection with the Specified Exchange and any obligation to deliver any other notices or elections thereunder. Subject to
Section 6(a)
hereof, the LLC Optionholders, Holdings and
Company hereby irrevocably waive the right to, as applicable, deliver a
Retraction Notice or otherwise revoke the Redemption Notice, Contribution Notice or Exchange Election Notice. Company irrevocably agrees that the Specified Exchange will be a Direct Exchange made by
means of a Share Settlement. Any capitalized terms used but not defined in this
Section 1(c)
shall have the meanings set forth in the
Holdings LLC Agreement. For the avoidance of doubt, if this Agreement is terminated, any elections hereunder shall be null and void
ab initio
,
and
neither the LLC Optionholders nor Company will be required to consummate any Exchange or Redemption.
(d) Immediately
prior to the consummation of the Specified Exchange, each LLC Option held by an LLC Optionholder that is outstanding and unexercised as of
immediately prior to the Specified Exchange shall be exercised on a cashless basis (each such exercise shall be collectively referred to herein as the "
Specified LLC
Option Exercise
") and the number of LLC Units issued to each LLC Optionholder upon such exercise shall be reduced by the number of LLC Units having a value
(equal to the Merger Consideration) equal to the sum of the aggregate exercise price of the LLC Options being exercised by such LLC Optionholder plus the minimum Tax withholding required
in connection with the exercise of the LLC Options held by such LLC Optionholder (with such LLC Units so withheld to pay such exercise price and Tax withholding to be treated as
if they were provided to the applicable LLC Optionholder). For the avoidance of doubt, if this Agreement is terminated, neither the LLC Optionholders nor Holdings will be required to
consummate the Specified LLC Option Exercise.
D-2
2.
Terminations.
(a) Effective
immediately prior to the Effective Time, without the requirement for any further action by any of the Parties, the Tax Receivable Agreement shall be
irrevocably terminated at no cost to the Management Representative, the LLC Optionholders, Company, the Surviving Corporation, Parent or any of their respective Subsidiaries and shall be of no
further force or effect, and all liabilities of the Management Representative, the LLC Optionholders, Company, the Surviving Corporation, Parent and their respective Subsidiaries relating
thereto shall be irrevocably cancelled, extinguished and waived. Notwithstanding anything to the contrary in the Tax Receivable Agreement (including Sections 4.1(b) and 4.3 thereof), none of
the Management Representative, the LLC Optionholders, Company, the Surviving Corporation, Holdings, Parent or any of their respective Subsidiaries shall have any payment or other obligations
under the Tax Receivable Agreement resulting from the consummation of the transactions contemplated by this Agreement, the Merger Agreement or otherwise. Each of Company and Parent hereby acknowledges
and agrees that the substantial economic, financial and pecuniary benefits that the Stockholders are foregoing as a result of the termination of the Tax Receivable Agreement pursuant hereto is
conferring substantial economic, financial and pecuniary benefits to Company and its stockholders.
(b) Effective
immediately prior to the Effective Time, without the requirement for any further action by any of the Parties, the Registration Rights Agreement shall be
irrevocably terminated at no cost to the Management Representative, the LLC Optionholders, Company, the Surviving Corporation, Parent or any of their respective Subsidiaries and shall be of no
further force or effect, and all liabilities of the
Management Representative, the LLC Optionholders, Company, the Surviving Corporation, Parent and their respective Subsidiaries relating thereto shall be irrevocably cancelled, extinguished and
waived.
(c) In
consideration of the mutual agreements herein contained, effective as of the Effective Time, the Management Representative and the LLC Optionholders, each on
behalf of itself and its respective affiliates (excluding for this purpose Company and its Subsidiaries) and Releasing Representatives, fully, finally and forever releases, discharges and waives any
and all civil actions, causes of action, claims, costs of suit, counterclaims, debts, demands, judgments, liabilities, obligations and actions for legal fees, in law or in equity, known or unknown,
asserted or not, existing or not, of whatever kind or nature, in any jurisdiction, including in arbitration proceedings or any other forum, which have arisen or may arise in the future under the Tax
Receivable Agreement, the Registration Rights Agreement or the Holdings LLC Agreement against Company, the Surviving Corporation, Holdings, Parent and their respective Subsidiaries and
Releasing Representatives;
provided
,
however
, that nothing contained herein shall operate to release any
claims, liabilities or obligations related to, or amend, modify or terminate, (A) any term or provision of the Holdings LLC Agreement (as in effect as of immediately prior to the date
hereof) that provides any officer or manager of Holdings, or any officer or manager of Holdings that was serving at the request of Holdings as a manager, officer, director, principal, member, employee
or agent of any direct or indirect Subsidiary of Holdings, with rights of indemnification or reimbursement or advancement of expenses, including, without limitation, any term or provision set forth in
Section 7.04 of the Holdings LLC Agreement (as in effect on the date hereof) to the extent applicable to any such officer or manager of Holdings, (B) any term or provision of the
Holdings LLC Agreement (as in effect as of immediately prior to the Effective Time) that provides the Company, the Management Representative, any LLC Optionholder or any of their
respective affiliates, Subsidiaries or Releasing Representatives with rights of exculpation and/or limitation of liability (but expressly excluding any rights to indemnification, reimbursement or
advancement of expenses other than as set forth in
clause (A)
), including, without limitation, any term or provision set forth in any of
Sections 3.01(c), 3.07, 6.09(a), 7.01(a) and 7.01(c) of the Holdings LLC Agreement (as in effect on the date hereof), (C) the Surviving Reporting Obligation (as defined
D-3
below),
and (D) any term or provision of the Holdings LLC Agreement (as in effect on the date hereof) that provides for the maintenance of capital accounts or the allocation of items of
income, gain, loss, deduction or credit, including, without limitation, any term or provision set forth in Article V of the Holdings LLC Agreement (as in effect on the date hereof) (in
the case of this
clause (D)
, solely with respect to any taxable period ending on or before the Closing Date, or any taxable period beginning
before the Closing Date and ending after the Closing Date). The terms, provisions and obligations described in
clauses (A)
,
(B)
,
(C)
and
(D)
of the proviso of the
immediately preceding sentence shall be collectively referred to herein as the "
Continuing Provisions
". The term "
Releasing
Representatives
" means the affiliates, agents, assigns, attorneys, directors, employees, officers, owners, parents, partners, representatives, members, shareholders, heirs,
auditors, consultants, predecessors, divisions, managers,
trustees and advisors (including past, present and future of any and all of the foregoing) of any Party or person.
3.
Representations and Warranties of the LLC Optionholders.
Each of the LLC Optionholders
hereby represents and warrants to each other Party as follows:
(a)
Authority; Binding Nature.
Such LLC Optionholder has full power, authority and capacity to execute
and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby to be consummated by such LLC Optionholder. The execution and delivery of
this Agreement by such LLC Optionholder, the performance of such LLC Optionholder's obligations hereunder and the consummation by such LLC Optionholder of the transactions
contemplated hereby to be consummated by such LLC Optionholder have been duly and validly authorized by all necessary action on the part of such LLC Optionholder. No other proceedings on
the part of such LLC Optionholder are necessary to approve this Agreement by such LLC Optionholder or to consummate the transactions contemplated hereby to be consummated by
such LLC Optionholder. This Agreement has been duly and validly executed and delivered by such LLC Optionholder and (assuming due authorization, execution and delivery by the other
Parties) constitutes a valid and binding obligation of such LLC Optionholder, enforceable against such LLC Optionholder in accordance with its terms (except in all cases as such
enforceability may be limited by the Enforceability Exceptions).
(b)
Ownership of LLC Options.
As of the date hereof, such LLC Optionholder beneficially
owns LLC Options set forth opposite the name of such LLC Optionholder on
Exhibit A
hereto free and clear of any proxy, voting or
transfer restriction, adverse claim or other Lien (except for transfer restrictions imposed by Holdings LLC Agreement and transfer restrictions of general applicability as may be provided under
the Securities Act and state securities laws). As of the date hereof, the LLC Options set forth opposite the name of such LLC Optionholder on
Exhibit A
hereto entitle such LLC
Optionholder, upon exercise (and prior to giving effect to withholding for exercise price and taxes as
contemplated by
Section 1(d)
), to the number of LLC Units set forth opposite the name of such LLC Optionholder on
Exhibit A
hereto.
Such LLC Optionholder has the sole power to dispose of its LLC Options and good and valid title to
such LLC Options. As of the date hereof, such LLC Optionholder does not own any securities of Holdings other than such LLC Options (for the avoidance of doubt, excluding
securities of Holdings indirectly held by virtue of owning shares of Class A Common Stock).
(c)
No Conflicts.
Neither the execution and delivery of this Agreement by such LLC Optionholder, nor the
performance by such LLC Optionholder of its obligations under this Agreement, will (i) violate any Law applicable to such LLC Optionholder or any of its properties or assets,
(ii) result in the creation by such LLC Optionholder of any Lien upon its LLC Options or (iii) violate, conflict with, result in the loss of any material benefit under,
constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of termination or cancellation under, or
accelerate the performance required by such LLC Optionholder under, any of the terms, conditions or provisions
D-4
of
any note, bond, mortgage, indenture, deed of trust, license, permit, lease, agreement or other instrument or obligation to which such LLC Optionholder is a party, or by which such LLC
Optionholder or any of its properties or assets may be bound or affected, except for, in the case of
clause (iii)
, any such violations,
conflicts, losses, defaults, terminations, cancellations or accelerations that would not reasonably be expected to prevent the performance by such LLC Optionholder of its obligations under this
Agreement.
(d)
Absence of Litigation.
As of the date hereof, there is no suit, action, investigation, claim or proceeding
pending or, to such LLC Optionholder's knowledge, threatened against or involving or affecting, such LLC Optionholder or its LLC Options that would reasonably be expected to
impair the ability of such LLC Optionholder to perform fully its obligations hereunder or to consummate on a timely basis the transactions contemplated hereby to be consummated by
such LLC Optionholder.
(e)
Brokers.
No broker, investment banker, financial advisor or other Person is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission that is payable by Company, the Surviving Corporation, Parent or any of their respective Subsidiaries in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of such LLC Optionholder (excluding, for the avoidance of doubt, any such broker, investment banker, financial
advisor or other Person retained or engaged by Company).
4.
Representations and Warranties of Parent, Company, Holdings and the Management Representative.
Parent, Company, Holdings and the Management Representative hereby represent and warrant, severally and not jointly, to each other Party as follows
(
provided
, that (x) the representation and warranty made in
Section 4(d)
shall only be
made by Parent, and (y) the representations and warranties made in
Section 4(e)
shall only be made by Company and Holdings):
(a)
Authority; Binding Nature.
Such Party has full power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions contemplated hereby to be consummated by such Party. The execution and delivery of this Agreement by such Party, the performance of
such Party's obligations hereunder and the consummation by such Party of the transactions contemplated hereby to be consummated by such Party have been duly and validly authorized by all necessary
action on the part of such Party. No other proceedings on the part of such Party are necessary to approve this Agreement or to consummate the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by such Party and constitutes a valid and binding obligation of such Party, enforceable against such Party in accordance with its terms (except in all cases as
such enforceability may be limited by the Enforceability Exceptions).
(b)
No Conflicts.
Neither the execution and delivery of this Agreement by such Party, nor the performance by
such Party of its obligations under this Agreement, will (i) violate any Law applicable to such Party or any of its properties or assets, or (ii) violate, conflict with, result in the
loss of any material benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of
termination or cancellation under, or accelerate the performance required by such Party under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust,
license, permit, lease, agreement or other instrument or obligation to which such Party is a party, or by which such Party or its respective properties or assets may be bound or affected.
(c)
Absence of Litigation.
As of the date hereof, there is no suit, action, investigation, claim or proceeding
pending or, to such Party's knowledge, threatened against or involving or affecting, such Party that would reasonably be expected to impair the ability of such Party to perform fully its obligations
hereunder or to consummate on a timely basis the transactions contemplated hereby to be consummated by such Party.
D-5
(d)
Ownership of Equity Interests.
Parent does not own, beneficially or of record, any securities of Company or
Holdings.
(e)
LLC Units and LLC Options.
As of the date hereof, the LLC Options owned by each of
the LLC Optionholders (as set forth on
Exhibit A
) constitute all of the issued and outstanding LLC Options. As of the date hereof,
there are no other Equity Interests of Holdings outstanding other than such LLC Options and LLC Units owned by the Stockholders.
5.
Tax Matters.
Company
shall and, following the Merger, Parent will cause Company and the Surviving Corporation to, comply with the obligations of Company under (i) Section 8.03 of the
Holdings LLC Agreement as in effect as of the date hereof and (ii) the second and third sentences of Section 9.01 of the Holdings LLC Agreement as in effect as of the date
hereof (such obligations, collectively, the "
Surviving Reporting Obligation
"). Effective immediately following the Effective Time, Company, the
Surviving Corporation and Holdings shall have no further obligations or liabilities (other than obligations and/or liabilities under or with respect to the Continuing Provisions) to the LLC
Optionholders or the Management Representative pursuant to or in respect of the Holdings LLC Agreement and the Surviving Company may amend, restate or terminate the Holdings LLC
Agreement in its sole discretion;
provided
,
however
, that the Continuing Provisions shall continue in
full force and effect.
6.
Miscellaneous.
(a)
Term.
This Agreement shall remain in full force and effect unless and until the Support Agreement is
terminated in accordance with its terms (except for a termination of the Support Agreement on account of the consummation of the Merger). In the event that the Merger Agreement is terminated in
accordance with its terms, (i) this Agreement shall automatically and immediately terminate and be of no further force and effect, all without the need for any further action of the part of (or
notice to) any person and (ii) there shall be no liability or obligation hereunder on the part of any Party or any of their respective affiliates, or any of their respective managers,
directors, stockholders, members, partners, officers, employees, agents, consultants, accountants, attorneys, investment bankers, financial advisors, representatives, successors or assigns. Without
limiting the immediately preceding sentence, if this Agreement is terminated then the Stockholders shall not be required to consummate the Specified Exchange. None of the representations or warranties
made by any Party in
Section 3
or
Section 4
hereof, as applicable, shall survive the
termination of this Agreement or the Effective Time.
(b)
Further Actions.
Following the date hereof, the Parties shall take all actions reasonably necessary and
execute and deliver all documents and instruments to each other and third parties (including Company's stock transfer agent) reasonably requested by a Party to give effect to the transactions
contemplated hereby immediately prior to the Effective Time. The Parties agree that the Effective Time shall not occur until such time as all of the transactions contemplated by
Sections 1
and
2
have become effective.
(c)
Amendments and Waivers.
This Agreement may not be amended, modified or supplemented in any manner, whether
by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment hereto, signed on behalf of each of the Parties. No failure on the part of any Party to
exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any Party in exercising any power, right, privilege or remedy under this Agreement, shall operate as a
waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other
power, right, privilege or remedy. Any agreement on the part of a Party to any such waiver shall be valid only if set forth in a written instrument
D-6
signed
on behalf of such Party, but such waiver or failure to insist on strict compliance with an obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
(d)
Counterparts.
This Agreement may be executed in two or more counterparts (including by facsimile or other
electronic means, including signatures received as a .pdf attachment to electronic mail), all of which shall be considered one and the same agreement and shall become effective when counterparts have
been signed by each of the Parties and delivered to the other Parties, it being understood that all Parties need not sign the same counterpart.
(e)
Applicable Law; Jurisdiction; Waiver of Jury Trial.
This Agreement, and any Action, dispute or other
controversy arising out of or relating hereto shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without regard to any applicable conflicts of law principles
thereof. Each Party agrees that any action or proceeding in respect of any claim arising out of or related to this Agreement or the transactions contemplated hereby shall be brought, heard, tried and
determined exclusively in the Chosen Courts, and, solely in connection with claims arising under this Agreement or the transactions that are the subject of this Agreement, (i) irrevocably and
unconditionally submits to the exclusive jurisdiction of the Chosen Courts, (ii) irrevocably and unconditionally waives any objection to laying venue in any such action or proceeding in the
Chosen Courts, (iii) irrevocably and unconditionally waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any Party and (iv) agrees that
service of process upon such Party in any such action or proceeding that is given in accordance with
Section 6(f)
or in such other manner as may
be permitted by applicable Law, shall be valid, effective and sufficient service thereof. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR OTHER PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT: (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY SUCH
ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER
VOLUNTARILY, AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 6(e)
.
(f)
Notices.
All notices and other communications hereunder shall be in writing and shall be deemed duly given
or received (i) when personally delivered, (ii) on the date sent by email of a "portable document format" (.pdf) document (so long as written notice of such transmission is sent within
two (2) business days thereafter by another delivery method hereunder) or (iii) one (1) business day following the date sent if such notice is sent by FedEx or another nationally
recognized overnight delivery service. All notices hereunder shall be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by the Party to
receive such notice:
D-7
(i) if
to Company or Holdings, to:
Neff
Corporation
3750 NW 87
th
Avenue
Suite 400
Miami, Florida 33178-2433
Attention: Mark Irion
Email: MIrion@Neffcorp.com
With a copy (which shall not constitute notice) to:
Akin
Gump Strauss Hauer & Feld LLP
One Bryant Park
Bank of America Tower
New York, New York 10036-6745
Attention: Daniel I. Fisher
Zachary N. Wittenberg
Email: dfisher@akingump.com
zwittenberg@akingump.com
(ii) if
to Parent, to:
H&E
Equipment Services
7500 Pecue Ln
Baton Rouge, LA 70809
Attention: John Engquist
Email: jengquist@he-equipment.com
With a copy (which shall not constitute notice) to:
Dechert LLP
1095 Avenue of the Americas
New York, New York 10036-6797
Attention: Derek M. Winokur
Email: Derek.Winokur@dechert.com
(iii) if
to the Management Representative or an LLC Optionholder, to:
Neff
Corporation
3750 N.W. 87111 Avenue, Suite 400
Miami, Florida 33178
Attn: Chief Financial Officer
Facsimile: (305) 513-4156
E-mail: mirion@neffcorp.com
(g)
Entire Agreement.
This Agreement (including the documents and the instruments referred to herein)
constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior agreements and undertakings.
(h)
Assignment; Third Party Beneficiaries; Transferees.
Neither this Agreement nor any of the rights, interests
or obligations shall be assigned by any of the Parties (whether by operation of Law or otherwise) without the prior written consent of the other Parties;
provided
that Parent may assign this Agreement
to one or more of its direct or indirect wholly-owned subsidiaries. No assignment shall relieve the
assigning party of any of its obligations hereunder. Any purported assignment in contravention hereof shall be null and void. Subject to the preceding sentence, this Agreement will be binding upon,
inure to the benefit of and be enforceable by the Parties and
D-8
their
respective successors and permitted assigns. This Agreement (including the documents and instruments referred to herein) is not intended to and does not confer upon any Person (other than the
Parties and, solely with respect to
Section 6(k)
hereof, the No Recourse Parties (as defined below)) any rights or remedies hereunder, including
the right to rely upon the representations and warranties set forth herein.
(i)
Severability.
The provisions of this Agreement shall be deemed severable. Whenever possible, each provision
or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision or portion of any provision of this Agreement
is held to be invalid, illegal or unenforceable in any respect under any applicable Law in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or
portion of any provision in such jurisdiction or the application of that provision, in any other jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction such
that a suitable and equitable provision shall be substituted for that provision in order to carry out, so far as may be valid and enforceable, the intent and purpose of the invalid or unenforceable
provision.
(j)
Enforcement.
The Parties agree that irreparable damage would occur if any provision of this Agreement were
not performed in accordance with its specific terms or were otherwise breached and that the Parties may not have an adequate remedy at Law in the event that any of the obligations of this Agreement
were not performed in accordance with its specific terms or otherwise breached. Accordingly, the Parties shall be entitled to specific performance of the terms hereof, including an injunction or
injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof, in addition to any other remedy to which they are entitled at Law or in
equity, including monetary damages. Each of the Parties hereby further waives (i) any defense in any action for specific performance that a remedy at Law would be adequate, (ii) an award
of performance is not an appropriate remedy for any reason at Law or equity, and (iii) any requirement under any Law to post security or a bond or similar undertaking as a prerequisite to
obtaining equitable relief.
(k)
Non-Recourse.
Notwithstanding anything that may be expressed or implied in this Agreement, and
notwithstanding the fact that the Stockholders may be partnerships, the Parties covenant, agree and acknowledge that no recourse under this Agreement shall be had against any former, current or future
directors, officers, agents, affiliates, limited partners, general partners, members, managers, employees, stockholders or equity holders of any Stockholder, or any former, current or future
directors, officers, agents, affiliates, employees, general or limited partners, members, managers, employees, stockholders or equity holders of any of the foregoing, as such (any such Person, a
"
No Recourse Party
"), whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or
other applicable Law, it being expressly agreed and acknowledged that no liability whatsoever shall attach to, be imposed on or otherwise be incurred by any No Recourse Party for any obligation of any
Stockholder under this Agreement for any claim based on, in respect of or by reason of such obligations or their creation.
(l)
Obligations Several.
The obligations of the LLC Optionholders under this Agreement shall be several
and not joint and several.
(m)
Certain Acknowledgments.
Parent, Holdings and Company hereby irrevocably acknowledge and agree that:
(i) the
consummation of the Specified Exchange by each of the LLC Optionholders shall be exempt from the operation of Section 16(b) of the Exchange Act; and
D-9
(ii) the
fair market value of each of the LLC Units owned each of the LLC Optionholders that are exchanged for shares of Company Class A Common Stock
pursuant to the Specified Exchange is equal to the Merger Consideration and, as such, there is no profit or gain realized by any of the LLC Optionholders upon the sale or other disposition of
any such shares of Company Class A Common Stock pursuant to the Merger.
[SIGNATURE
PAGE FOLLOWS]
D-10
IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
|
|
|
|
|
|
|
|
|
H&E EQUIPMENT SERVICES, INC.
|
|
|
By:
|
|
/s/ JOHN ENGQUIST
|
|
|
|
|
Name:
|
|
John Engquist
|
|
|
|
|
Title:
|
|
Chief Executive Officer
|
[Signature
Page for Exchange and Tax Receivable Termination Agreement]
|
|
|
|
|
|
|
|
|
NEFF CORPORATION
|
|
|
By:
|
|
/s/ MARK IRION
|
|
|
|
|
Name:
|
|
Mark Irion
|
|
|
|
|
Title:
|
|
Chief Financial Officer
|
[Signature
Page for Exchange and Tax Receivable Termination Agreement]
|
|
|
|
|
|
|
|
|
NEFF HOLDINGS, LLC
|
|
|
By: Neff Corporation, its managing member
|
|
|
By:
|
|
/s/ MARK IRION
|
|
|
|
|
Name:
|
|
Mark Irion
|
|
|
|
|
Title:
|
|
Chief Financial Officer
|
[Signature
Page for Exchange and Tax Receivable Termination Agreement]
|
|
|
|
|
/s/ GRAHAM HOOD
Graham Hood
|
[Signature
Page for Exchange and Tax Receivable Termination Agreement]
|
|
|
|
|
/s/ JAMES CONTINENZA
James Continenza
|
[Signature
Page for Exchange and Tax Receivable Termination Agreement]
|
|
|
|
|
/s/ MARK IRION
Mark Irion
|
[Signature
Page for Exchange and Tax Receivable Termination Agreement]
|
|
|
|
|
/s/ ROBERT SINGER
Robert Singer
|
[Signature
Page for Exchange and Tax Receivable Termination Agreement]
|
|
|
|
|
/s/ STEVE MICHAELS
Steve Michaels
|
[Signature
Page for Exchange and Tax Receivable Termination Agreement]
|
|
|
|
|
/s/ WESTLEY PARKS
Westley Parks
|
[Signature
Page for Exchange and Tax Receivable Termination Agreement]
|
|
|
|
|
MANAGEMENT REPRESENTATIVE:
Mark Irion
|
|
|
/s/ MARK IRION
|
[Signature
Page for Exchange and Tax Receivable Termination Agreement]
Exhibit A
|
|
|
|
|
|
|
|
Optionholder
|
|
Number of LLC
Options
|
|
Number of LLC
Units(1)
|
|
Graham Hood
|
|
|
354,288
|
|
|
354,288
|
|
James Continenza
|
|
|
20,433
|
|
|
20,433
|
|
Mark Irion
|
|
|
211,272
|
|
|
211,272
|
|
Robert Singer
|
|
|
14,303
|
|
|
14,303
|
|
Steve Michaels
|
|
|
60,131
|
|
|
60,131
|
|
Westley Parks
|
|
|
97,510
|
|
|
97,510
|
|
-
(1)
-
Does
not give effect to the exercise price and tax withholding contemplated by Section 1(d).
Annex E
July 13,
2017
Special
Committee of the Board of Directors
Neff Corporation
3750 N.W. 87th Avenue, Suite 400
Miami, FL 33178
Gentlemen:
Deutsche
Bank Securities Inc. ("Deutsche Bank") has acted as financial advisor to the Special Committee of the Board of Directors of Neff Corporation (the "Company") in connection
with the Agreement and Plan of Merger, dated as of July 14, 2017 (the "Merger Agreement"), among the Company, H&E Equipment Services, Inc. ("Parent"), and Yellow Iron Merger Co.,
a subsidiary of Parent ("Merger Sub") which provides, among other things, for the merger (the "Merger") of Merger Sub with and into the Company, as a result of which the Company will become a
wholly-owned subsidiary of Parent (the "Transaction"). In connection with the Transaction, (i) each of the common units (the "LLC Units") of Neff Holdings LLC not owned by the Company
will be exchanged immediately prior to the Merger on a one-for-one basis for shares of Class A common stock, par value $0.01 per share (the "Company Common Stock"), of the Company,
(ii) each of the options to purchase LLC Units (the "LLC Options") not owned by the Company will be exercised into LLC Units (net of withholding taxes) and such LLC Units
will be exchanged immediately prior to the Merger on a one-for-one basis for shares of Company Common Stock, (iii) each share of Class B common stock, par value $0.01 per share (the
"Class B Common Stock"), of the Company will be cancelled simultaneous with the exchange of LLC Units for shares of Company Common Stock described above, (iv) the Tax Receivable
Agreement (as defined below) will be terminated immediately prior to the Merger without payment, and (v) as a result of the Merger, each share of Company Common Stock (including shares issued
in the exchanges referred to in clauses (i) and (ii)) other than (A) shares held in the treasury of the Company or any of its subsidiaries, (B) shares owned, directly or
indirectly, by Parent or Merger Sub and their respective subsidiaries and (C) dissenting shares, will be converted into the right to receive the Merger Consideration (as defined below). For
purposes of this opinion, "Merger Consideration" means $21.07 subject to downward adjustment in certain circumstances, but in no case will the Merger Consideration be less than $20.63. The Merger
Consideration will be the sole consideration given to and received by the holders of LLC Units, LLC Options, Class B Common Stock, Company Common Stock and the counterparties
under the Tax Receivable Agreement in connection with the Transaction.
You
have requested our opinion, as investment bankers, as to the fairness of the Merger Consideration, from a financial point of view, to the holders of the outstanding shares of Company
Common Stock, excluding Parent, Wayzata Investment Partners LLC and their affiliates and executive officers of the Company.
In
connection with our role as financial advisor to the Special Committee of the Board of Directors of the Company, and in arriving at our opinion, we reviewed certain publicly available
financial and other information concerning the Company, and certain internal analyses, financial forecasts and other information relating to the Company prepared by management of the Company. We have
also held discussions with certain senior officers and other representatives of the Company regarding the businesses and prospects of the Company. In addition, we have (i) reviewed the reported
E-1
prices
and trading activity for the Company Common Stock, (ii) compared certain financial and stock market information for the Company with, to the extent publicly available, similar
information for certain other companies we considered relevant whose securities are publicly traded, (iii) reviewed, to the extent publicly available, the financial terms of certain business
combinations which we deemed relevant, (iv) reviewed a draft dated July 13, 2017 of the Merger Agreement and certain related documents, including the Tax Receivable Agreement, dated as
of November 26, 2014 (as amended, the "Tax Receivable Agreement"), by and among the Company, Wayzata Opportunities Fund II, L.P. ("Opportunities Fund"), Wayzata Opportunities Fund
Offshore II, L.P. ("Opportunities Fund Offshore"), the Management Representative (as defined therein) and the LLC Optionholders (as defined therein), a draft dated July 12, 2017
of the Exchange and Termination Agreement by and among the Company, Parent, Opportunities Fund, and Opportunities Fund Offshore, a draft dated July 11, 2017 of the Exchange and Termination
Agreement by and among the Company, Parent, the Management Representative (as defined therein) and the LLC Optionholders (as defined therein), and a draft dated July 12, 2017 of the
Support Agreement by and among Parent, Opportunities Fund and Opportunities Fund Offshore (collectively, the "Ancillary Agreements"), and (v) performed such other studies and analyses and
considered such other factors as we deemed appropriate.
We
have not assumed responsibility for independent verification of, and have not independently verified, any information, whether publicly available or furnished to us, concerning the
Company, including, without limitation, any financial information considered in connection with the rendering of our opinion. Accordingly, for purposes of our opinion, we have, with your knowledge and
permission, assumed and relied upon the accuracy and completeness of all such information. We have not conducted a physical inspection of any of the properties or assets, and have not prepared,
obtained or reviewed any independent evaluation or appraisal of any of the assets or liabilities (including any contingent, derivative or off-balance-sheet assets or liabilities), of the Company or
Parent or any of their respective subsidiaries, nor have we evaluated the solvency or fair value of the Company, Parent or any of their respective subsidiaries under any law relating to bankruptcy,
insolvency or similar matters. With respect to the financial forecasts made available to us and used in our analyses, we have assumed with your knowledge and permission that such forecasts have been
reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of the Company as to the matters covered thereby. In rendering our opinion, we express no
view as to the reasonableness of such forecasts and projections or the assumptions on which they are based. Our opinion is necessarily based upon economic, market and other conditions as in effect on,
and the information made available to us as of, the date hereof. We expressly disclaim any undertaking or obligation to advise any person of any change in any fact or matter affecting our opinion of
which we become aware after the date hereof.
For
purposes of rendering our opinion, we have assumed with your knowledge and permission that, in all respects material to our analysis, the Transaction will be consummated in
accordance with the terms of the Merger Agreement and the Ancillary Agreements, without any waiver, modification or amendment of any term, condition or agreement that would be material to our
analysis. We also have assumed with your knowledge and permission that all material governmental, regulatory or other approvals and consents required in connection with the consummation of the
Transaction will be obtained and that in connection with obtaining any necessary governmental, regulatory or other approvals and consents, no restrictions, terms or conditions will be imposed that
would be material to
our analysis. We are not legal, regulatory, tax or accounting experts and have relied on the assessments made by the Company and its other advisors with respect to such issues. Representatives of the
Company have informed us, and we have further assumed with your knowledge and permission, that the final terms of the Merger Agreement and the Ancillary Agreements will not differ materially from the
terms set forth in the drafts we have reviewed.
E-2
This
opinion has been approved and authorized for issuance by a Deutsche Bank fairness opinion review committee and is addressed to, and is for the use and benefit of, the Special
Committee of the Board of Directors of the Company in connection with and for the purpose of its evaluation of the Transaction, as well as, in connection with the approval of the Merger Agreement and
after receiving the recommendation of such approval from the Special Committee of the Board of Directors of the Company, the full Board of Directors of the Company. This opinion is limited to the
fairness of the Merger Consideration, from a financial point of view, to the holders of Company Common Stock (other than Parent, Wayzata Investment Partners LLC and their affiliates and
executive officers of the Company) as of the date hereof. This opinion does not address any other terms of the Transaction, the Merger Agreement or any other agreement entered into or to be entered
into in connection with the Transaction. You have not asked us to, and this opinion does not, address the fairness of the Transaction, or any consideration received in connection therewith, to the
other holders of any securities, creditors or other constituencies of the Company, nor does it address the fairness of the contemplated benefits of the Transaction. We express no opinion as to the
merits of the underlying decision by the Company to engage in the Transaction or the relative merits of the Transaction as compared to any alternative transactions or business strategies. Nor do we
express an opinion, and this opinion does not constitute a recommendation, as to how any holder of shares of Company Common Stock should vote with respect to the Transaction. In addition, we do not
express any view or opinion as to the fairness, financial or otherwise, of the amount or nature of any compensation payable to or to be received by any of the Company's officers, directors, or
employees, or any class of such persons, in connection with the Transaction relative to the Merger Consideration to be received by the holders of Company Common Stock.
We
were not requested to, and we did not, solicit third party indications of interest in the possible acquisition of all or part of the Company, nor were we requested to consider, and
our opinion does not address, the relative merits of the Transaction as compared to any alternative transactions or business strategies.
Deutsche
Bank will be paid a fee for its services as financial advisor to the Special Committee of the Board of Directors of the Company in connection with the Transaction, a portion of
which becomes payable upon delivery of this opinion (or would have become payable if Deutsche Bank had advised the Board of Directors that it was unable to render this opinion) and a substantial
portion of which is contingent upon consummation of the Transaction. The Company has also agreed to reimburse Deutsche Bank for its expenses, and to indemnify Deutsche Bank against certain
liabilities, in connection with its engagement. We are an affiliate of Deutsche Bank AG (together with its affiliates,
the "DB Group"). One or more members of the DB Group have, from time to time, provided, and are currently providing, investment banking, commercial banking (including extension of credit) and other
financial services to Parent or its affiliates for which they have received, and in the future may receive, compensation. The DB Group may also provide investment and commercial banking services to
Parent, the Company or their respective affiliates in the future, for which we would expect the DB Group to receive compensation. In the ordinary course of business, members of the DB Group may
actively trade in the securities and other instruments and obligations of Parent, the Company and their respective affiliates for their own accounts and for the accounts of their customers.
Accordingly, the DB Group may at any time hold a long or short position in such securities, instruments and obligations.
Based
upon and subject to the foregoing assumptions, limitations, qualifications and conditions, it is Deutsche Bank's opinion as investment bankers that, as of the date hereof, the
Merger Consideration
E-3
is
fair, from a financial point of view, to the holders of Company Common Stock, excluding Parent, Wayzata Investment Partners LLC and their affiliates and executive officers of the Company.
|
|
|
|
|
Very truly yours,
|
|
|
/s/ Deutsche Bank Securities Inc.
|
|
|
DEUTSCHE BANK SECURITIES INC.
|
E-4
ANNEX F
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
§ 262 Appraisal rights
(a) Any
stockholder of a corporation of this State who holds shares of stock on the date of the making of a demand pursuant to subsection (d) of this section with
respect to such shares, who continuously holds such shares through the effective date of the merger or consolidation, who has otherwise complied with subsection (d) of this section and who has
neither voted in favor of the merger or consolidation nor consented thereto in writing pursuant to § 228 of this title shall be entitled to an appraisal by the Court of Chancery of
the fair value of the stockholder's shares of stock under the circumstances described in subsections (b) and (c) of this section. As used in this section, the word "stockholder" means a
holder of record of stock in a corporation; the words "stock" and "share" mean and include what is ordinarily meant by those words; and the words "depository receipt" mean a receipt or other
instrument issued by a depository representing an interest in 1 or more shares, or fractions thereof, solely of stock of a corporation, which stock is deposited with the depository.
(b) Appraisal
rights shall be available for the shares of any class or series of stock of a constituent corporation in a merger or consolidation to be effected pursuant to
§ 251 (other than a merger effected pursuant to § 251(g) of this title and, subject to paragraph (b) (3) of this section,
§ 251(h) of this title), § 252, § 254, § 255, § 256, § 257, § 258,
§ 263 or § 264 of this title:
(1) Provided,
however, that, except as expressly provided in § 363(b) of this title, no appraisal rights under this section shall be available for the
shares of any class or series of stock, which stock, or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of the meeting of
stockholders to act upon the agreement of merger or consolidation, were either: (i) listed on a national securities exchange or (ii) held of record by more than 2,000 holders; and
further provided that no appraisal rights shall be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the
stockholders of the surviving corporation as provided in § 251(f) of this title.
(2) Notwithstanding
paragraph (b)(1) of this section, appraisal rights under this section shall be available for the shares of any class or series of stock of a
constituent corporation if the holders thereof are required by the terms of an agreement of merger or consolidation pursuant to §§ 251, 252, 254, 255, 256, 257, 258, 263
and 264 of this title to accept for such stock anything except:
a. Shares
of stock of the corporation surviving or resulting from such merger or consolidation, or depository receipts in respect thereof;
b. Shares
of stock of any other corporation, or depository receipts in respect thereof, which shares of stock (or depository receipts in respect thereof) or depository
receipts at the effective date of the merger or consolidation will be either listed on a national securities exchange or held of record by more than 2,000 holders;
c. Cash
in lieu of fractional shares or fractional depository receipts described in the foregoing paragraphs (b)(2)a. and b. of this section; or
d. Any
combination of the shares of stock, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in the foregoing
paragraphs (b)(2)a., b. and c. of this section.
(3) In
the event all of the stock of a subsidiary Delaware corporation party to a merger effected under § 251(h), § 253 or
§ 267 of this title is not owned by the parent immediately prior
F-1
to
the merger, appraisal rights shall be available for the shares of the subsidiary Delaware corporation.
(4) In
the event of an amendment to a corporation's certificate of incorporation contemplated by § 363(a) of this title, appraisal rights shall be
available as contemplated by § 363(b) of this title, and the procedures of this section, including those set forth in subsections (d) and (e) of this section, shall
apply as nearly as practicable, with the word "amendment" substituted for the words "merger or consolidation," and the word "corporation" substituted for the words "constituent corporation" and/or
"surviving or resulting corporation."
(c) Any
corporation may provide in its certificate of incorporation that appraisal rights under this section shall be available for the shares of any class or series of its
stock as a result of an amendment to its certificate of incorporation, any merger or consolidation in which the corporation is a constituent corporation or the sale of all or substantially all of the
assets of the corporation. If the certificate of incorporation contains such a provision, the provisions of this section, including those set forth in subsections (d), (e), and (g) of
this section, shall apply as nearly as is practicable.
(d) Appraisal
rights shall be perfected as follows:
(1) If
a proposed merger or consolidation for which appraisal rights are provided under this section is to be submitted for approval at a meeting of stockholders, the
corporation, not less than 20 days prior to
the meeting, shall notify each of its stockholders who was such on the record date for notice of such meeting (or such members who received notice in accordance with § 255(c) of
this title) with respect to shares for which appraisal rights are available pursuant to subsection (b) or (c) of this section that appraisal rights are available for any or all of the
shares of the constituent corporations, and shall include in such notice a copy of this section and, if 1 of the constituent corporations is a nonstock corporation, a copy of § 114
of this title. Each stockholder electing to demand the appraisal of such stockholder's shares shall deliver to the corporation, before the taking of the vote on the merger or consolidation, a written
demand for appraisal of such stockholder's shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby
to demand the appraisal of such stockholder's shares. A proxy or vote against the merger or consolidation shall not constitute such a demand. A stockholder electing to take such action must do so by a
separate written demand as herein provided. Within 10 days after the effective date of such merger or consolidation, the surviving or resulting corporation shall notify each stockholder of each
constituent corporation who has complied with this subsection and has not voted in favor of or consented to the merger or consolidation of the date that the merger or consolidation has become
effective; or
(2) If
the merger or consolidation was approved pursuant to § 228, § 251(h), § 253, or § 267 of
this title, then either a constituent corporation before the effective date of the merger or consolidation or the surviving or resulting corporation within 10 days thereafter shall notify each
of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are
available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of this section and, if 1 of the constituent corporations is a
nonstock corporation, a copy of § 114 of this title. Such notice may, and, if given on or after the effective date of the merger or consolidation, shall, also notify such
stockholders of the effective date of the merger or consolidation. Any stockholder entitled to appraisal rights may, within 20 days after the date of mailing of such notice or, in the case of a
merger approved pursuant to § 251(h) of this title, within the later of the consummation of the offer contemplated by § 251(h) of this title and 20 days
after the date of mailing of such notice, demand in writing from the surviving or resulting corporation the appraisal of such holder's shares. Such demand will be
F-2
sufficient
if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such holder's shares. If such notice did not
notify stockholders of the effective date of the merger or consolidation, either (i) each such constituent corporation shall send a second notice before the effective date of the merger or
consolidation notifying each of the holders of any class or series of stock of such constituent corporation that are entitled to appraisal rights of the effective date of the merger or consolidation
or (ii) the surviving or resulting corporation shall send such a second notice to all such holders on or within 10 days after such
effective date; provided, however, that if such second notice is sent more than 20 days following the sending of the first notice or, in the case of a merger approved pursuant to
§ 251(h) of this title, later than the later of the consummation of the offer contemplated by § 251(h) of this title and 20 days following the sending of
the first notice, such second notice need only be sent to each stockholder who is entitled to appraisal rights and who has demanded appraisal of such holder's shares in accordance with this
subsection. An affidavit of the secretary or assistant secretary or of the transfer agent of the corporation that is required to give either notice that such notice has been given shall, in the
absence of fraud, be prima facie evidence of the facts stated therein. For purposes of determining the stockholders entitled to receive either notice, each constituent corporation may fix, in advance,
a record date that shall be not more than 10 days prior to the date the notice is given, provided, that if the notice is given on or after the effective date of the merger or consolidation, the
record date shall be such effective date. If no record date is fixed and the notice is given prior to the effective date, the record date shall be the close of business on the day next preceding the
day on which the notice is given.
(e) Within
120 days after the effective date of the merger or consolidation, the surviving or resulting corporation or any stockholder who has complied with
subsections (a) and (d) of this section hereof and who is otherwise entitled to appraisal rights, may commence an appraisal proceeding by filing a petition in the Court of Chancery
demanding a determination of the value of the stock of all such stockholders. Notwithstanding the foregoing, at any time within 60 days after the effective date of the merger or consolidation,
any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party shall have the right to withdraw such stockholder's demand for appraisal and to accept the
terms offered upon the merger or consolidation. Within 120 days after the effective date of the merger or consolidation, any stockholder who has complied with the requirements of
subsections (a) and (d) of this section hereof, upon written request, shall be entitled to receive from the corporation surviving the merger or resulting from the consolidation a
statement setting forth the aggregate number of shares not voted in favor of the merger or consolidation and with respect to which demands for appraisal have been received and the aggregate number of
holders of such shares. Such written statement shall be mailed to the stockholder within 10 days after such stockholder's written request for such a statement is received by the surviving or
resulting corporation or within 10 days after expiration of the period for delivery of demands for appraisal under subsection (d) of this section hereof, whichever is later.
Notwithstanding subsection (a) of this section, a person who is the beneficial owner of shares of such stock held either in a voting trust or by a nominee on behalf of such person may, in such
person's own name, file a petition or request from the corporation the statement described in this subsection.
(f) Upon
the filing of any such petition by a stockholder, service of a copy thereof shall be made upon the surviving or resulting corporation, which shall within
20 days after such service file in the office of the Register in Chancery in which the petition was filed a duly verified list containing the names and addresses of all stockholders who have
demanded payment for their shares and with whom agreements as to the value of their shares have not been reached by the surviving or resulting corporation. If the petition shall be filed by the
surviving or resulting corporation, the petition shall be accompanied by such a duly verified list. The Register in Chancery, if so ordered by the Court, shall give notice of the time and place fixed
for the hearing of such petition by registered or certified mail to the surviving or resulting corporation and to the stockholders shown on the list at the addresses therein
F-3
stated.
Such notice shall also be given by 1 or more publications at least 1 week before the day of the hearing, in a newspaper of general circulation published in the City of Wilmington,
Delaware or such publication as the Court deems advisable. The forms of the notices by mail and by publication shall be approved by the Court, and the costs thereof shall be borne by the surviving or
resulting corporation.
(g) At
the hearing on such petition, the Court shall determine the stockholders who have complied with this section and who have become entitled to appraisal rights. The
Court may require the stockholders who have demanded an appraisal for their shares and who hold stock represented by certificates to submit their certificates of stock to the Register in Chancery for
notation thereon of the pendency of the appraisal proceedings; and if any stockholder fails to comply with such direction, the Court may dismiss the proceedings as to such stockholder. If immediately
before the merger or consolidation the shares of the class or series of stock of the constituent corporation as to which appraisal rights are available were listed on a national securities exchange,
the Court shall dismiss the proceedings as to all holders of such shares who are otherwise entitled to appraisal rights unless (1) the total number of shares entitled to appraisal exceeds 1% of
the outstanding shares of the class or series eligible for appraisal, (2) the value of the consideration provided in the merger or consolidation for such total number of shares exceeds
$1 million, or (3) the merger was approved pursuant to § 253 or § 267 of this title.
(h) After
the Court determines the stockholders entitled to an appraisal, the appraisal proceeding shall be conducted in accordance with the rules of the Court of Chancery,
including any rules specifically governing appraisal proceedings. Through such proceeding the Court shall determine the fair value of the shares exclusive of any element of value arising from the
accomplishment or expectation of the merger or consolidation, together with interest, if any, to be paid upon the amount determined to be the fair value. In determining such fair value, the Court
shall take into account all relevant factors. Unless the Court in its discretion determines otherwise for good cause shown, and except as provided in this subsection, interest from the effective date
of the merger through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time
to time during the period between the effective date of the merger and the date of payment of the judgment. At any time before the entry of judgment in the proceedings, the surviving corporation may
pay to each stockholder entitled to appraisal an amount in cash, in which case interest shall accrue thereafter as provided herein only upon the sum of (1) the difference, if any, between the
amount so paid and the fair value of the shares as determined by the Court, and (2) interest theretofore accrued, unless paid at that time. Upon application by the surviving or resulting
corporation or by any stockholder entitled to participate in the appraisal proceeding, the Court may, in its discretion, proceed to trial upon the appraisal prior to the final determination of the
stockholders entitled to an appraisal. Any stockholder whose name appears on the list filed by the surviving or resulting corporation pursuant to subsection (f) of this section and who has
submitted such stockholder's certificates of stock to the Register in Chancery, if such is required, may participate fully in all proceedings until it is finally determined that such stockholder is
not entitled to appraisal rights under this section.
(i) The
Court shall direct the payment of the fair value of the shares, together with interest, if any, by the surviving or resulting corporation to the stockholders
entitled thereto. Payment shall be so made to each such stockholder, in the case of holders of uncertificated stock forthwith, and the case of holders of shares represented by certificates upon the
surrender to the corporation of the certificates representing such stock. The Court's decree may be enforced as other decrees in the Court of Chancery may be enforced, whether such surviving or
resulting corporation be a corporation of this State or of any state.
(j) The
costs of the proceeding may be determined by the Court and taxed upon the parties as the Court deems equitable in the circumstances. Upon application of a
stockholder, the Court may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal
F-4
proceeding,
including, without limitation, reasonable attorney's fees and the fees and expenses of experts, to be charged pro rata against the value of all the shares entitled to an appraisal.
(k) From
and after the effective date of the merger or consolidation, no stockholder who has demanded appraisal rights as provided in subsection (d) of this section
shall be entitled to vote such stock for any purpose or to receive payment of dividends or other distributions on the stock (except dividends or other distributions payable to stockholders of record
at a date which is prior to the effective date of the merger or consolidation); provided, however, that if no petition for an appraisal shall be filed within the time provided in subsection (e)
of this section, or if such stockholder shall deliver to the surviving or resulting corporation a written withdrawal of such stockholder's demand for an appraisal and an acceptance of the merger or
consolidation, either within 60 days after the effective date of the merger or consolidation as provided in subsection (e) of this section or thereafter with the written approval of the
corporation, then the right of such stockholder to an appraisal shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery shall be dismissed as to any stockholder
without the approval of the Court, and such approval may be conditioned upon such terms as the Court deems just; provided, however that this provision shall not affect the right of any stockholder who
has not commenced an appraisal proceeding or joined that proceeding as a named party to withdraw such stockholder's demand for appraisal and to accept the terms offered upon the merger or
consolidation within 60 days after the effective date of the merger or consolidation, as set forth in subsection (e) of this section.
(l) The
shares of the surviving or resulting corporation to which the shares of such objecting stockholders would have been converted had they assented to the merger or
consolidation shall have the status of authorized and unissued shares of the surviving or resulting corporation.
8
Del. C. 1953, § 262; 56 Del. Laws, c. 50; 56 Del. Laws, c. 186, § 24; 57 Del. Laws, c. 148,
§§ 27-29; 59 Del. Laws, c. 106, § 12; 60 Del. Laws, c. 371, §§ 3-12; 63 Del. Laws, c. 25,
§ 14; 63 Del. Laws, c. 152, §§ 1, 2; 64 Del. Laws, c. 112, §§ 46-54; 66 Del. Laws, c. 136,
§§ 30-32; 66 Del. Laws, c. 352, § 9; 67 Del. Laws, c. 376, §§ 19, 20; 68 Del. Laws, c. 337,
§§ 3, 4; 69 Del. Laws, c. 61, § 10; 69 Del. Laws, c. 262, §§ 1-9; 70 Del. Laws,
c. 79, § 16; 70 Del. Laws, c. 186, § 1; 70 Del. Laws, c. 299, §§ 2, 3; 70 Del. Laws, c. 349,
§ 22; 71 Del. Laws, c. 120, § 15; 71 Del. Laws, c. 339, §§ 49-52; 73 Del. Laws, c. 82,
§ 21; 76 Del. Laws, c. 145, §§ 11-16; 77 Del. Laws, c. 14, §§ 12, 13; 77 Del. Laws, c. 253,
§§ 47-50; 77 Del. Laws, c. 290, §§ 16, 17; 79 Del. Laws, c. 72, §§ 10, 11; 79 Del. Laws,
c. 122, §§ 6, 7; 80 Del. Laws, c.265, §§ 8-11.
F-5