-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HGFCX0ZiYpijXo3tFrITrFSmIP5yL8O3EfY8FlIl8Deyfgl7Md33FqOtEfMcI94U PeQw9a8FM/gLaIOskpQzXw== 0000909518-07-000237.txt : 20070320 0000909518-07-000237.hdr.sgml : 20070320 20070320152146 ACCESSION NUMBER: 0000909518-07-000237 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 13 FILED AS OF DATE: 20070320 DATE AS OF CHANGE: 20070320 GROUP MEMBERS: BENTO, E. JOSEPH GROUP MEMBERS: FAVATI, VITTORIO GROUP MEMBERS: TALLEY, RONALD E. GROUP MEMBERS: WEIGEL, GREGORY GROUP MEMBERS: WINTERS, KEITH SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: EGL INC CENTRAL INDEX KEY: 0001001718 STANDARD INDUSTRIAL CLASSIFICATION: ARRANGEMENT OF TRANSPORTATION OF FREIGHT & CARGO [4731] IRS NUMBER: 760094895 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-49709 FILM NUMBER: 07706153 BUSINESS ADDRESS: STREET 1: 15340 VICKERY DR CITY: HOUSTON STATE: TX ZIP: 77032 BUSINESS PHONE: 2816183100 MAIL ADDRESS: STREET 1: 15350 VICKERY DR STREET 2: SUITE 510 CITY: HOUSTON STATE: TX ZIP: 77032 FORMER COMPANY: FORMER CONFORMED NAME: EAGLE USA AIRFREIGHT INC DATE OF NAME CHANGE: 19951002 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CRANE JAMES R CENTRAL INDEX KEY: 0001007833 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 3214 LODESTAR CITY: HOUSTON STATE: TX ZIP: 77032 BUSINESS PHONE: 7138210300 MAIL ADDRESS: STREET 1: JAMES R CRANE STREET 2: 3214 LODESTAR CITY: HOUSTON STATE: TX ZIP: 77032 SC 13D/A 1 mm03-1907_sc13da3.txt AMEND. NO.3 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D/A UNDER THE SECURITIES EXCHANGE ACT OF 1934 EGL, Inc. (NAME OF ISSUER) Common Stock, par value $0.001 per share ------------------------------------------------------------------------ (TITLE OF CLASS OF SECURITIES) 268484 10 2 ------------------------------------------------------------------------ (CUSIP NUMBER) James Westra, Esq. Weil, Gotshal & Manges LLP 100 Federal Street 34th Floor Boston, MA 02110 (617) 772-8300 R. Jay Tabor, Esq. Weil, Gotshal & Manges LLP 200 Crescent Court Suite 300 Dallas, Texas 75201 (214) 746-7700 ------------------------------------------------------------------------ ( NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS) March 18, 2007 ------------------------------------------------------------------------ (DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See ss.240.13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D/A -------------- EXPLANATORY NOTES: This Amendment No. 3 to Schedule 13D (this "Amendment") is being filed by James R. Crane and the other reporting persons (collectively, the "Reporting Persons") identified in the Schedule 13D filed on January 22, 2007, as amended by Amendment No. 1 thereto filed on February 8, 2007 and Amendment No. 2 thereto filed on February 27, 2007 (as amended, the "Schedule 13D") with the Securities and Exchange Commission (the "Commission") relating to the common stock, par value $0.001 per share ("EGL Common Stock"), of EGL, Inc. (the "Issuer"). The Schedule 13D is hereby amended and supplemented by the Reporting Persons as set forth below in this Amendment. Capitalized terms used but not defined in this Amendment shall have the meanings given in the Schedule 13D. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The disclosure in Item 3 is hereby amended and restated in its entirety as follows: The aggregate value of the transactions (the "Transactions") contemplated by the Agreement and Plan of Merger, dated as of March 18, 2007, among Talon Acquisition Co. ("Merger Sub"), Talon Holdings Corp. ("Parent"), and the Issuer (the "Merger Agreement"), which are described in Item 4 below, including debt incurred in connection with the Transactions, is approximately $1.7 billion. In separate Sponsor Equity Commitment Letters, each dated March 18, 2007 (the "Sponsor Equity Commitment Letters"), Centerbridge and Woodbridge agreed, subject to certain conditions, to contribute cash to Parent, totaling $307,900,000 in the aggregate, in exchange for equity interests in Parent ("Parent Equity"), solely for the purpose of funding the merger consideration pursuant to the Merger Agreement and to pay related expenses. This summary of the Sponsor Equity Commitment Letters does not purport to be complete and is qualified in its entirety by reference to the Sponsor Equity Commitment Letters, which are attached hereto as Exhibit 7.05 and Exhibit 7.06 and incorporated by reference in their entirety into this Item 3. In addition, Mr. Crane entered into a Rollover Equity Commitment Letter, dated as of March 18, 2007 (the "Rollover Equity Commitment Letter"), pursuant to which Mr. Crane agreed, subject to certain conditions, to contribute up to 7,056,063 shares of EGL Common Stock (valued at the $38.00 per share merger consideration) (the "Rollover Shares") and $52,027,606 in cash to Parent in exchange for Parent Equity. This summary of the Rollover Equity Commitment Letter does not purport to be complete and is qualified in its entirety by reference to the Rollover Equity Commitment Letter, which is attached hereto as Exhibit 7.07 and incorporated by reference in its entirety into this Item 3. The other Reporting Persons intend to contribute all or portion of their EGL Common Stock or the after-tax proceeds of their options or restricted stock received in the merger for Parent Equity, which would reduce the amounts required to be funded by Mr. Crane, Centerbridge and Woodbridge. The total equity to be contributed by Centerbridge, Woodbridge, Mr. Crane and the other Reporting Persons is expected to be approximately $628 million. In addition, Parent entered into a Senior Unsecured Debt Commitment Letter (the "Senior Unsecured Debt Commitment Letter"), dated as of March 18, 2007, 2 with Woodbridge (in such capacity, the "Subordinated Lender"), pursuant to which the Subordinated Lender committed to provide, subject to certain conditions, $300 million pursuant to a senior unsecured term loan facility. Parent also entered into a Senior Secured Debt Commitment Letter (the "Senior Secured Debt Commitment Letter"), dated as of March 18, 2007, with Merrill Lynch Capital Corporation, Wachovia Bank, National Association, and Wachovia Capital Markets, LLC (collectively, the "Senior Lenders"), pursuant to which the Senior Lenders committed to provide, subject to certain conditions, up to $960 million in senior debt financing through a term loan facility in the amount of $810 million and a revolving credit facility of up to $150 million. The financing from the Senior Unsecured Debt Commitment Letter and the Senior Secured Debt Commitment Letter will be used to fund the merger consideration under the Merger Agreement, pay certain expenses, refinance existing debt, and for general corporate purposes for the operation of the Issuer following the closing of the Transactions. The summaries of the Senior Unsecured Debt Commitment Letter and the Senior Secured Debt Commitment Letter do not purport to be complete and are qualified in their entirety by reference to the Senior Unsecured Debt Commitment Letter and the Senior Secured Debt Commitment Letter, which are attached hereto as Exhibit 7.08 and Exhibit 7.09 and incorporated by reference in their entirety into this Item 3. Total funded indebtedness of the Issuer following the consummation of the Transactions is expected to be approximately $1.11 billion. Finally, in separate Limited Guarantees, each dated as of March 18, 2007 (the "Guarantees"), each of Mr. Crane, Centerbridge and Woodbridge unconditionally and irrevocably guaranteed to the Issuer, subject to certain conditions, a portion of Parent's and Merger Sub's payment obligations under the Merger Agreement. This summary of the Guarantees does not purport to be complete and is qualified in its entirety by reference to the Guarantees, which are attached hereto as Exhibits 7.10 through 7.12 and incorporated by reference in their entirety into this Item 3. ITEM 4. PURPOSE OF TRANSACTION. The disclosure in Item 4 is hereby supplemented by adding the following after the last paragraph thereof: On March 19, 2007, the Issuer announced in a Press Release (the "Press Release") that it had entered into the Merger Agreement, pursuant to which all of the outstanding shares of Issuer Common Stock (other than any Rollover Shares contributed to Parent by Mr. Crane and the other Reporting Persons and owned by Parent or Merger Sub at the effective time of the merger contemplated by the Merger Agreement) would be converted into the right to receive $38.00 per share in cash. The Press Release is attached hereto as Exhibit 7.13 and is incorporated by reference in its entirety into this Item 4. The foregoing summary of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is attached hereto as Exhibit 7.14 and incorporated by reference in its entirety into this Item 4. In connection with the Transactions, Mr. Crane entered into a Voting Agreement with Parent and Merger Sub, dated as of March 18, 2007 (the "Voting Agreement"), pursuant to which Mr. Crane agreed, subject to certain conditions, to vote his EGL Common Stock in favor of the adoption of the Merger Agreement 3 and against any competing takeover proposal that may be submitted by the Issuer for a vote of its stockholders. This summary of the Voting Agreement does not purport to be complete and is qualified in its entirety by reference to the Voting Agreement, which is attached hereto as Exhibit 7.15 and incorporated by reference in its entirety into this Item 4. Centerbridge, Woodbridge and Mr. Crane entered into a Interim Stockholders Agreement of Parent, dated as of March 18, 2007 (the "Interim Stockholders Agreement"), which will govern their conduct in respect of the Transactions between the time of the signing of the Merger Agreement and the effective time of the merger contemplated thereby or the termination of the Merger Agreement, whichever is earlier, including matters such as determining whether any closing condition contained in the Merger Agreement has been satisfied or shall be waived by Parent or Merger Sub. This summary of the Interim Stockholders Agreement does not purport to be complete and is qualified in its entirety by reference to the Interim Stockholders Agreement, which is attached hereto as Exhibit 7.16 and incorporated by reference in its entirety into this Item 4. The purpose of the Transactions is to acquire all of the outstanding EGL Common Stock (other than Rollover Shares). If the Transactions are consummated, the EGL Common Stock of the Issuer will be delisted from the NASDAQ Stock Market and will cease to be registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Issuer will be privately held by Mr. Crane, Centerbridge, Woodbridge, and the other Reporting Persons. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. The disclosure in Item 6 is hereby amended and restated in its entirety as follows: The information set forth or incorporated by reference in Item 3 and Item 4 is incorporated by reference in its entirety into this Item 6. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit Sponsor Equity Commitment Letter, dated March 18, 2007, entered 7.05 into by Centerbridge Capital Partners, L.P., Centerbridge Capital Partners Strategic, L.P. and Centerbridge Capital Partners SBS, L.P. Exhibit Sponsor Equity Commitment Letter, dated March 18, 2007, entered 7.06 into by The Woodbridge Company Limited. Exhibit Rollover Equity Commitment Letter, dated March 18, 2007, entered 7.07 into by James R. Crane. 4 Exhibit Senior Unsecured Debt Commitment Letter, dated as of March 18, 2007, 7.08 entered into by The Woodbridge Company Limited. Exhibit Senior Secured Debt Commitment Letter, dated as of March 18, 2007, 7.09 entered into by Merrill Lynch Capital Corporation, Wachovia Bank, National Association, and Wachovia Capital Markets, LLC. Exhibit Limited Guarantee, dated as of March 18, 2007, entered into by 7.10 James R. Crane. Exhibit Limited Guarantee, dated as of March 18, 2007, entered into by 7.11 Centerbridge Capital Partners, L.P., Centerbridge Capital Partners Strategic, L.P. and Centerbridge Capital Partners SBS, L.P. Exhibit Limited Guarantee, dated as of March 18, 2007, entered into by The 7.12 Woodbridge Company Limited. Exhibit Press Release, dated as of March 19, 2007 7.13 Exhibit Agreement and Plan of Merger, dated as of March 18, 2007, by and 7.14 among Talon Holdings Corp., Talon Acquisition Co. and EGL, Inc. Exhibit Voting Agreement, dated as of March 18, 2007, by and among Talon 7.15 Holdings Corp., Talon Acquisition Co. and James R. Crane Exhibit Interim Stockholders Agreement, dated as of March 18, 2007, by and 7.16 among Centerbridge Capital Partners, L.P., Centerbridge Capital Partners Strategic, L.P. and Centerbridge Capital Partners SBS, L.P., The Woodbridge Company Limited, and James R. Crane 5 Signatures ---------- After reasonable inquiry and to the best knowledge and belief of each of the undersigned, such person certifies that the information set forth in this Schedule 13D/A with respect to such person is true, complete and correct. Dated: March 20, 2007 * ------------------------------------ JAMES R. CRANE * ------------------------------------ E. JOSEPH BENTO * ------------------------------------ RONALD E. TALLEY * ------------------------------------ GREGORY WEIGEL * ------------------------------------ KEITH WINTERS * ------------------------------------ VITTORIO FAVATI 6 * Margaret Barradas, by signing her name hereto, does sign this document on behalf of each of the persons indicated above for whom she is attorney-in-fact pursuant to a power of attorney duly executed by such person and filed with the Securities and Exchange Commission. /S/MARGARET BARRADAS ------------------------------------ MARGARET BARRADAS 7 EX-7 2 mm03-1907_sc13da3e705.txt EX.7.05 EXHIBIT 7.05 ------------ Centerbridge Capital Partners, L.P. Centerbridge Capital Partners Strategic, L.P. Centerbridge Capital Partners SBS, L.P. c/o Centerbridge Partners, L.P. 31 West 52nd Street New York, New York 10019 March 18, 2007 Talon Holdings Corp. c/o Centerbridge Partners, L.P. 31 West 52nd Street New York, New York 10019 Gentlemen: Reference is made to the Agreement and Plan of Merger dated as of the date hereof (as it may be amended from time to time, the "Agreement") among Talon Holdings Corp., a Delaware corporation ("Parent"), Talon Acquisition Co., a Texas corporation and wholly owned subsidiary of Parent, and EGL, Inc., a Texas corporation (the "Company"). Capitalized terms used and not otherwise defined herein have the meanings ascribed to them in the Agreement. The parties listed on Schedule A are collectively referred to herein as the "Investors". This letter agreement confirms the commitment of the undersigned, subject to the conditions set forth herein, to purchase, or cause an assignee permitted by the fourth paragraph of this letter to purchase, a portion of the equity of Parent as of the Effective Time (the "Subject Equity Securities") for an aggregate purchase price equal to the dollar commitment set forth next to the undersigned's name on Schedule B (the "Commitment") solely for the purpose of funding, and to the extent necessary to fund, Merger Consideration and the Option and Stock-Based Consideration pursuant to and in accordance with the Agreement and related expenses, provided that the undersigned shall not, under any circumstances, be obligated to contribute to Parent more than the Commitment. The undersigned's obligation to fund the Commitment is subject to the receipt by the Company of the proceeds of the financing under the Debt Commitment Letters contemplated by Section 4.4 of the Agreement and the satisfaction or waiver by Parent (in the manner agreed by the Investors) of the conditions precedent to Parent's and Merger Sub's obligation to effect the Closing and the terms of this letter, and will occur contemporaneous with the Closing and the simultaneous issuance to the undersigned of the Subject Equity Securities. The amount to be funded under this Agreement will be reduced in the manner agreed by the Investors in the event Parent does not require all of the equity with respect to which the Investors have made commitments. Notwithstanding anything that may be expressed or implied in this letter agreement, Parent, by its acceptance of the benefits hereof, covenants, agrees and acknowledges that, no person other than the undersigned shall have any obligation hereunder and that, notwithstanding that the undersigned is a partnership, no recourse hereunder or under any documents or instruments delivered in connection herewith shall be had against any former, current or future officer, agent or employee of the undersigned, against any former, current or future general or limited partner of the undersigned or any former, current or future director, officer, employee, general or limited partner, member, Affiliate or assignee of any of the foregoing, 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 personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any former, current or future officer, agent or employee of the undersigned or any former, current or future general or limited partner of the undersigned or any former, current or future director, officer, employee, general or limited partner, member, Affiliate or assignee of any of the foregoing, as such, for any obligations of the undersigned under this letter agreement or any documents or instruments delivered in connection herewith or for any claim based on, in respect of or by reason of such obligations or their creation. Part of our obligations under this letter may be assumed by any funds under common control with us and such assumption shall relieve us of any liability hereunder to the extent such other fund has commitments in an amount sufficient to fulfill the obligations it assumes; provided, that in connection with such assignment and assumption, the assignee executes a commitment letter addressed to Parent in respect of such commitment in the form of this letter agreement. Our obligations under this letter will terminate automatically and immediately and be of no further force or effect without further action by the parties hereto upon the earliest to occur of (a) termination of the Agreement, (b) if all of the Investors agree to terminate this letter and the corresponding letters delivered by each of the Investors, and (c) the Company or any of its Affiliates asserts in any litigation or other proceeding any claim under any limited guarantee of even date herewith of any Investor (each, a "Limited Guarantee") or otherwise against any Investor or any Affiliate thereof in connection with the Agreement or any of the transactions contemplated hereby or thereby (other than any claim relating to a breach or seeking to prevent a breach of a Confidentiality Agreement between the Company and us or any of our Affiliates). This letter shall be binding solely on, and inure solely to the benefit of, the undersigned and Parent and their respective successors and permitted assigns, and nothing set forth in this letter shall be construed to confer upon or give to any person other than the undersigned and Parent and their respective successors and permitted assigns any benefits, rights or remedies of any nature whatsoever under or by reason of, or any rights to enforce or cause Parent to enforce, any provisions of this letter. Concurrently with the execution and delivery of this letter, the undersigned is executing and delivering to the Company a Limited Guarantee related to Parent's obligations under the Agreement. The Company's remedies against the undersigned under the Limited Guarantee shall, and are intended to be, the sole and exclusive direct or indirect remedies available to the Company and its Affiliates against the undersigned in respect of any liabilities or obligations arising under, or in connection with, the Agreement and the transactions contemplated thereby, including in the event Parent breaches its obligations under the Agreement, whether or not Parent's breach is caused by the undersigned's breach of its obligations under this letter. This letter may be executed in counterparts. This letter and any related dispute shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York. Each of the parties hereto (i) consents to submit itself to the personal jurisdiction of any state or federal court located in the Borough of Manhattan of The City of New York in the event any dispute arises out of this letter or any of the transactions contemplated by this letter, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction or venue by motion or other request for leave from any such court and (iii) agrees that it will not bring any action relating to this letter or any of the transactions contemplated by this letter in any court other than such courts sitting in the Borough of Manhattan of The City of New York. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LETTER OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. 2 Very truly yours, CENTERBRIDGE CAPITAL PARTNERS, L.P. By: Centerbridge Associates, L.P., its general partner By: Centerbridge GP Investors, LLC, its general partner By: /s/ Steven Price --------------------------------- Name: Steven Price Title: Senior Managing Director CENTERBRIDGE CAPITAL PARTNERS STRATEGIC, L.P. By: Centerbridge Associates, L.P., its general partner By: Centerbridge GP Investors, LLC, its general partner By: /s/ Steven Price --------------------------------- Name: Steven Price Title: Senior Managing Director CENTERBRIDGE CAPITAL PARTNERS SBS, L.P. By: Centerbridge Associates, L.P., its general partner By: Centerbridge GP Investors, LLC, its general partner By: /s/ Steven Price --------------------------------- Name: Steven Price Title: Senior Managing Director Accepted and Agreed to as of the date written above TALON HOLDINGS CORP. By: /s/ James R. Crane --------------------------------- Name: James R. Crane Title: President 3 SCHEDULE A ---------- Investors --------- Centerbridge Capital Partners, L.P. Centerbridge Capital Partners Strategic, L.P. Centerbridge Capital Partners SBS, L.P. The Woodbridge Company Limited James R. Crane 4 SCHEDULE B ---------- Commitments ----------- Investor Commitment -------- ---------- - --------------------------------------------------- --------------------------- Centerbridge Capital Partners, L.P. $194,163,090.90 - --------------------------------------------------- --------------------------- Centerbridge Capital Partners Strategic, L.P $6,828,688.60 - --------------------------------------------------- --------------------------- Centerbridge Capital Partners SBS, L.P. $4,308,220.50 - --------------------------------------------------- --------------------------- - --------------------------------------------------- --------------------------- Total: $205,300,00.00 ------ - --------------------------------------------------- --------------------------- 5 EX-7 3 mm03-1907_sc13da3e706.txt EX.7.06 EXHIBIT 7.06 ------------ The Woodbridge Company Limited 65 Queen Street West Suite 2400 Toronto, Ontario Canada, M5H 2M8 March 18, 2007 Talon Holdings Corp. c/o Centerbridge Partners, L.P. 31 West 52nd Street New York, New York 10019 Gentlemen: Reference is made to the Agreement and Plan of Merger dated as of the date hereof (as it may be amended from time to time, the "Agreement") among Talon Holdings Corp., a Delaware corporation ("Parent"), Talon Acquisition Co., a Texas corporation and wholly owned subsidiary of Parent, and EGL, Inc., a Texas corporation (the "Company"). Capitalized terms used and not otherwise defined herein have the meanings ascribed to them in the Agreement. The parties listed on Schedule A are collectively referred to herein as the "Investors". This letter agreement confirms the commitment of the undersigned, subject to the conditions set forth herein, to purchase, or cause an assignee permitted by the fourth paragraph of this letter to purchase, a portion of the equity of Parent as of the Effective Time (the "Subject Equity Securities") for an aggregate purchase price equal to the dollar commitment set forth next to the undersigned's name on Schedule B (the "Commitment") solely for the purpose of funding, and to the extent necessary to fund, Merger Consideration and the Option and Stock-Based Consideration pursuant to and in accordance with the Agreement and related expenses, provided that the undersigned shall not, under any circumstances, be obligated to contribute to Parent more than the Commitment. The undersigned's obligation to fund the Commitment is subject to the receipt by the Company of the proceeds of the financing under the Debt Commitment Letters contemplated by Section 4.4 of the Agreement and the satisfaction or waiver by Parent (in the manner agreed by the Investors) of the conditions precedent to Parent's and Merger Sub's obligation to effect the Closing and the terms of this letter, and will occur contemporaneous with the Closing and the simultaneous issuance to the undersigned of the Subject Equity Securities. The amount to be funded under this Agreement will be reduced in the manner agreed by the Investors in the event Parent does not require all of the equity with respect to which the Investors have made commitments. Notwithstanding anything that may be expressed or implied in this letter agreement, Parent, by its acceptance of the benefits hereof, covenants, agrees and acknowledges that, no person other than the undersigned shall have any obligation hereunder and that no recourse hereunder or under any documents or instruments delivered in connection herewith shall be had against any former, current or future director, officer, agent or employee of the undersigned, or against any former, current or future director, officer, employee, general or limited partner, member, Affiliate or assignee of any of the foregoing, 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 personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any former, current or future director, officer, agent or employee of the undersigned or any former, current or future director, officer, employee, general or limited partner, member, Affiliate or assignee of any of the foregoing, as such, for any obligations of the undersigned under this letter agreement or any documents or instruments delivered in connection herewith or for any claim based on, in respect of or by reason of such obligations or their creation. All or any part of our obligations under this letter may be assumed by another entity controlled directly or indirectly by us and such assumption shall relieve us of any liability hereunder to the extent such other entity has assets in an amount sufficient to fulfill the obligations it assumes; provided, that in connection with such assignment and assumption, the assignee executes a commitment letter addressed to Parent in respect of such commitment in the form of this letter agreement. Our obligations under this letter will terminate automatically and immediately and be of no further force or effect without further action by the parties hereto upon the earliest to occur of (a) termination of the Agreement, (b) if all of the Investors agree to terminate this letter and the corresponding letters delivered by each of the Investors, and (c) the Company or any of its Affiliates asserts in any litigation or other proceeding any claim under any limited guarantee of even date herewith of any Investor (each, a "Limited Guarantee") or otherwise against any Investor or any Affiliate thereof in connection with the Agreement or any of the transactions contemplated hereby or thereby (other than any claim relating to a breach or seeking to prevent a breach of a Confidentiality Agreement between the Company and us or any of our Affiliates). This letter shall be binding solely on, and inure solely to the benefit of, the undersigned and Parent and their respective successors and permitted assigns, and nothing set forth in this letter shall be construed to confer upon or give to any person other than the undersigned and Parent and their respective successors and permitted assigns any benefits, rights or remedies of any nature whatsoever under or by reason of, or any rights to enforce or cause Parent to enforce, any provisions of this letter. Concurrently with the execution and delivery of this letter, the undersigned is executing and delivering to the Company a Limited Guarantee related to Parent's obligations under the Agreement. The Company's remedies against the undersigned under the Limited Guarantee shall, and are intended to be, the sole and exclusive direct or indirect remedies available to the Company and its Affiliates against the undersigned in respect of any liabilities or obligations arising under, or in connection with, the Agreement and the transactions contemplated thereby, including in the event Parent breaches its obligations under the Agreement, whether or not Parent's breach is caused by the undersigned's breach of its obligations under this letter. This letter may be executed in counterparts. This letter and any related dispute shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York. Each of the parties hereto (i) consents to submit itself to the personal jurisdiction of any state or federal court located in the Borough of Manhattan of The City of New York in the event any dispute arises out of this letter or any of the transactions contemplated by this letter, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction or venue by motion or other request for leave from any such court and (iii) agrees that it will not bring any action relating to this letter or any of the transactions contemplated by this letter in any court other than such courts sitting in the Borough of Manhattan of The City of New York. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LETTER OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. 2 Very truly yours, THE WOODBRIDGE COMPANY LIMITED By: /s/Sarah Lerchs ------------------------------------ Name: Sarah Lerchs Title: Senior Counsel Accepted and Agreed to as of the date written above TALON HOLDINGS CORP. By: /s/ James R. Crane ------------------------------------ Name: James R. Crane Title: President 3 SCHEDULE A ---------- Investors --------- Centerbridge Capital Partners, L.P. Centerbridge Capital Partners Strategic, L.P. Centerbridge Capital Partners SBS, L.P. The Woodbridge Company Limited James R. Crane 4 SCHEDULE B ---------- Commitments ----------- - ------------------------------------------------- ------------------------- Investor Commitment - ------------------------------------------------- ------------------------- - ------------------------------------------------- ------------------------- The Woodbridge Company Limited $102,600,000 - ------------------------------------------------- ------------------------- 5 EX-7 4 mm03-1907_sc13da3e707.txt EX. 7.07 EXHIBIT 7.07 ------------ James R. Crane c/o EGL, Inc. 15350 Vickery Drive Houston, TX 77032 March 18, 2007 Talon Holdings Corp. c/o Centerbridge Partners, L.P. 31 West 52nd Street New York, New York 10019 Gentlemen: Reference is made to the Agreement and Plan of Merger dated as of the date hereof (as it may be amended from time to time, the "Agreement") among Talon Holdings Corp., a Delaware corporation ("Parent"), Talon Acquisition Co., a Texas corporation and wholly owned subsidiary of Parent, and EGL, Inc., a Texas corporation (the "Company"). Capitalized terms used and not otherwise defined herein have the meanings ascribed to them in the Agreement. The parties listed on Schedule A are collectively referred to herein as the "Investors". This letter agreement confirms the commitment of the undersigned, subject to the conditions set forth herein, to purchase, or cause an assignee permitted by the fourth paragraph of this letter to purchase, a portion of the equity of Parent as of the Effective Time (the "Subject Equity Securities") for an aggregate purchase price equal to $52,027,606 in cash (the "Committed Cash") and 7,065,063 shares of common stock, par value $0.001 per share, of the Company (to be valued at the $38.00 per share Merger Consideration) (the "Committed Shares" and together with the Committed Cash, the "Commitment") solely for the purpose of funding, and to the extent necessary to fund, the Merger Consideration and the Option and Stock-Based Consideration pursuant to and in accordance with the Agreement and related expenses, provided that the undersigned shall not, under any circumstances, be obligated to contribute to Parent more than the Commitment. The undersigned's obligation to fund the Commitment is subject to the receipt by the Company of the proceeds of the financing under the Debt Commitment Letters contemplated by Section 4.4 of the Agreement and the satisfaction or waiver by Parent (in the manner agreed by the Investors) of the conditions precedent to Parent's and Merger Sub's obligation to effect the Closing and the terms of this letter, and will occur contemporaneous with the Closing and the simultaneous issuance to the undersigned of the Subject Equity Securities. Notwithstanding anything to the contrary contained in this letter, to the extent Committed Cash represents the after-tax proceeds of any amounts payable to the undersigned pursuant to Section 5.5(a) of the Agreement, the undersigned may elect to fund the Committed Cash no later than upon receipt by the undersigned of such amounts; provided that Parent shall not be required to issue to the undersigned Subject Equity Securities in respect of any portion of the Committed Cash that has not been received by Parent, until receipt thereof by Parent. The amount to be funded under this Agreement will be reduced in the manner agreed by the Investors in the event Parent does not require all of the equity with respect to which the Investors have made commitments. Notwithstanding anything that may be expressed or implied in this letter agreement, Parent, by its acceptance of the benefits hereof, covenants, agrees and acknowledges that, no person other than the undersigned shall have any obligation hereunder. Part of the obligations under this letter may be assigned in accordance with the terms of that certain letter agreement, dated of even date herewith, by and among the undersigned, affiliates of Centerbridge Partners, L.P. and The Woodbridge Company Limited. 6 The obligations under this letter will terminate automatically and immediately and be of no further force or effect without further action by the parties hereto upon the earliest to occur of (a) termination of the Agreement, (b) if all of the Investors agree to terminate this letter and the corresponding letters delivered by each of the Investors, and (c) the Company or any of its Affiliates asserts in any litigation or other proceeding any claim under any limited guarantee of even date herewith of any Investor (each, a "Limited Guarantee") or otherwise against any Investor or any Affiliate thereof in connection with the Agreement or any of the transactions contemplated hereby or thereby. This letter shall be binding solely on, and inure solely to the benefit of, the undersigned and Parent and their respective successors and permitted assigns, and nothing set forth in this letter shall be construed to confer upon or give to any person other than the undersigned and Parent and their respective successors and permitted assigns any benefits, rights or remedies of any nature whatsoever under or by reason of, or any rights to enforce or cause Parent to enforce, any provisions of this letter. Concurrently with the execution and delivery of this letter, the undersigned is executing and delivering to the Company a Limited Guarantee related to Parent's obligations under the Agreement. The Company's remedies against the undersigned under the Limited Guarantee shall, and are intended to be, the sole and exclusive direct or indirect remedies available to the Company and its Affiliates against the undersigned in respect of any liabilities or obligations arising under, or in connection with, the Agreement and the transactions contemplated thereby, including in the event Parent breaches its obligations under the Agreement, whether or not Parent's breach is caused by the undersigned's breach of its obligations under this letter. This letter may be executed in counterparts. This letter and any related dispute shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York. Each of the parties hereto (i) consents to submit itself to the personal jurisdiction of any state or federal court located in the Borough of Manhattan of The City of New York in the event any dispute arises out of this letter or any of the transactions contemplated by this letter, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction or venue by motion or other request for leave from any such court and (iii) agrees that it will not bring any action relating to this letter or any of the transactions contemplated by this letter in any court other than such courts sitting in the Borough of Manhattan of The City of New York. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LETTER OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.] 2 Very truly yours, /s/James R. Crane ---------------------------------------- James R. Crane Accepted and Agreed to as of the date written above TALON HOLDINGS CORP. By: /s/James R. Crane ---------------------------------------- Name: James R. Crane Title: President 3 SCHEDULE A ---------- Investors --------- Centerbridge Capital Partners, L.P. Centerbridge Capital Partners Strategic, L.P. Centerbridge Capital Partners SBS, L.P. The Woodbridge Company Limited James R. Crane 4 EX-7 5 mm03-1907_sc13da3e708.txt EX. 7.08 EXHIBIT 7.08 ------------ EXECUTION COPY The Woodbridge Company Limited 65 Queen Street West Suite 2400 Toronto, Ontario Canada, M5H2M8 March 18, 2007 Talon Holdings Corp. c/o Centerbridge Capital Partners, L.P. 31 West 52nd Street, 16th Floor New York, New York 10019 U.S.A. Attention: Mark Gallogly c/o James Crane 15350 Vickery Drive Houston, Texas 77032 COMMITMENT LETTER ----------------- Ladies and Gentlemen: Each of Centerbridge Capital Partners, L.P. (together with certain of its affiliated funds, "Centerbridge"), The Woodbridge Company Limited, in its capacity as an equity investor (together with certain of its affiliates, "Woodbridge Sponsor") and James Crane (together with certain members of management of the Target referred to below and co-investors selected by him, "Crane" and, together with Centerbridge and Woodbridge Sponsor, the "Sponsors") has advised The Woodbridge Company Limited ("Woodbridge", "we" or "us") that a Delaware corporation to be formed and controlled by the Sponsors ("Holdings") and a wholly-owned subsidiary of Holdings to be formed by Holdings (the "Buyer"), intend to enter into an agreement and plan of merger (together with the schedules and exhibits thereto, the "Merger Agreement") pursuant to which the Buyer will merge (the "Merger") with and into a public company previously identified to us (the "Target"). The surviving corporation of the Merger shall be "SurvivingCo." All references to "dollars" or "$" in this agreement and the attachments hereto (collectively, this "Commitment Letter") are references to United States dollars. We understand that the sources of funds required to fund the Merger consideration, to repay certain existing indebtedness of the Target and its subsidiaries (the "Refinancing"), to pay fees, commissions and expenses in connection with the Transactions (as defined below) and to provide ongoing working capital requirements and funds for other general corporate purposes of Holdings and its subsidiaries following the Transactions will include equity, funded indebtedness and other sources as follows: |X| senior secured credit facilities consisting of (i) a senior secured term loan facility to SurvivingCo of up to $810 million (the "Senior Secured Term Loan Facility"), and (ii) a senior secured revolving credit facility to SurvivingCo of up to $150 million (the "Revolving Credit Facility" and, together 5 with the Senior Secured Term Loan Facility, the "Senior Secured Facilities"), up to an amount to be agreed of which may be drawn on the Closing Date; |X| a senior unsecured term loan credit facility to Holdings of $300 million (the "Unsecured Term Loan Facility"), as described in the Summary of Principal Terms and Conditions attached hereto as Annex I (the "Term Sheet"); and |X| equity investments in Holdings (which will be invested by Holdings in SurvivingCo) (the "Equity Financing") sufficient to consummate the Transactions, consisting of (i) an equity investment in Holdings by Centerbridge and Woodbridge comprising approximately 49% of such Equity Financing and (ii) an equity investment by Crane in Holdings comprising approximately 51% of such Equity Financing. Immediately following the Transactions, neither Holdings nor any of its subsidiaries will have any material indebtedness other than the Senior Secured Facilities and the Unsecured Term Loan Facility, and other indebtedness of approximately $33 million to be mutually agreed. As used herein (i) the term "Facilities" means the Senior Secured Term Loan Facility, the Revolving Credit Facility and the Unsecured Term Loan Facility; and (ii) the term "Transactions" means the Merger, the Refinancing, the initial borrowings under the Facilities, the Equity Financing, certain rollover equity and the payments of fees, commissions and expenses in connection with each of the foregoing. Commitments. ------------ We are pleased to advise you of our commitment to provide to Holdings the entire principal amount of the Unsecured Term Loan Facility, upon the terms and subject to the conditions set forth in this Commitment Letter, the Term Sheet and the Conditions Annex referred to below (the "Commitments"). You agree that the closing and initial funding of the Unsecured Term Loan Facility (the "Closing Date") shall not occur until the conditions set forth below and in the Conditions to Closing set forth in Annex II hereto (the "Conditions Annex") (including the conditions to initial funding) have been satisfied or waived by us. We do not intend, prior to or after execution of the Loan Documentation (as defined in the Conditions Annex), to syndicate any portion of our Commitment in respect of the Unsecured Term Loan Facility and agree that any such syndication shall occur only with your prior written consent (which consent may be withheld in your sole and absolute discretion). In no event will syndication be a condition to our commitment hereunder. Conditions. ----------- Our obligation to fund the Unsecured Term Loan Facility is subject to the following conditions: (i) there shall not have occurred, since the date hereof, any event, circumstance or development, that has had a "Company Material Adverse Effect" (as defined in the Merger Agreement) (as in effect on the Closing Date and with such changes as are not prohibited by paragraph 1 of Annex II hereto); and (ii) the other conditions set forth in the Conditions Annex shall have been satisfied or waived by us. Notwithstanding anything in this Commitment Letter, the Term Sheet, the Loan Documentation, or any other letter agreement or other undertaking concerning the financing of the Transactions to the contrary, (i) the only representations relating to the Target, its subsidiaries and their businesses the making of which shall be a condition to availability of the Unsecured Term Loan Facility on the Closing 2 Date shall be (A) the representations made by the Target in the Merger Agreement, but only to the extent that you have the right to terminate your obligations under the Merger Agreement and (B) the Specified Representations (as defined below) and (ii) the terms of the Loan Documentation shall be in a form such that they do not impair availability of the Unsecured Term Loan Facility on the Closing Date if the terms and conditions set forth in this Commitment Letter, the Term Sheet and the Conditions Annex are satisfied. For purposes hereof, "Specified Representations" means the representations and warranties of Holdings set forth in this Commitment Letter and the Term Sheet relating to corporate power and authority, due authorization, the enforceability of the Loan Documentation, Federal Reserve margin regulations, the Investment Company Act and the status of the Unsecured Term Loan Facility as senior debt. Information. ------------ You hereby represent and covenant that to your knowledge (a) all written information, other than the Projections (as defined below), or other forward-looking information and information of a general economic or industry specific nature (the "Information"), that has been or will be made available to us by you or any of your representatives in connection with the Transactions, when taken as a whole, is or will be, correct in all material respects and does not or will not, taken as a whole, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made (after giving effect to all updates from time to time) and (b) the financial projections (the "Projections") that have been or will be made available to us by you or any of your representatives in connection with the Transactions have been or will be prepared in good faith based upon assumptions believed by you to be reasonable at the time prepared (it being recognized by us that such Projections are not to be viewed as facts and that actual results during the period or periods covered by any such Projections may differ from the projected results, and such differences may be material). You agree that if, at any time on or prior to the Closing Date, any of the representations in the preceding sentence would be incorrect, in any material respect, if the Information and Projections were being furnished, and such representations were being made, at such time, then you will promptly supplement the Information and the Projections so that such representations will be correct, in all material respects, under those circumstances. You understand that in providing the Unsecured Term Loan Facility, we may use and rely on the Information and Projections without independent verification thereof. Indemnification. ---------------- You agree (a) to indemnify and hold harmless us, our affiliates and our and their respective directors, employees, advisors, and agents (each, an "indemnified person") from and against any and all losses, claims, damages and liabilities to which any such indemnified person may become subject arising out of or in connection with this Commitment Letter, the Unsecured Term Loan Facility, the use of the proceeds thereof and the Transactions or any claim, litigation, investigation or proceeding relating to any of the foregoing (a "Proceeding"), regardless of whether any indemnified person is a party thereto or whether such proceeding is brought by any third party, and to reimburse each indemnified person within 30 days of a written demand therefor for any reasonable legal or other out-of-pocket expenses incurred in connection with investigating or defending any of the foregoing by one counsel to such indemnified persons taken as a whole and, solely in the case of a conflict of interest, one additional counsel to the affected indemnified persons taken as a whole (and, if reasonably necessary, of one local counsel in any jurisdiction); provided that the foregoing indemnity will not, as to any indemnified person, apply to losses, claims, damages, liabilities or related expenses to the extent they arise from the willful misconduct, bad faith or gross negligence of, or breach of this Commitment Letter or the Loan Documentation by, such indemnified person (or any of its related persons) or to any disputes solely among indemnified persons (or their related persons) and not arising out of any act or omission of you or any of your affiliates, and (b) if 3 the Closing Date occurs, to reimburse each Commitment Party and its affiliates on the Closing Date for all reasonable and documented out-of-pocket expenses that have been invoiced a reasonable period of time prior to the Closing Date (including due diligence expenses, travel expenses, and reasonable fees, charges and disbursements of one counsel to us (and, if reasonably necessary, of one local counsel in any relevant jurisdiction) incurred in connection with the Unsecured Term Loan Facility and any related documentation (including this Commitment Letter and the Loan Documentation) or the administration, amendment, modification or waiver thereof. No indemnified person shall be liable for any damages arising from the use by others of Information or other materials obtained through electronic, telecommunications or other information transmission systems or for any special, indirect, consequential or punitive damages in connection with the Unsecured Term Loan Facility, except to the extent any such damages arise from the gross negligence, bad faith or willful misconduct of, or breach of this Commitment Letter, the Loan Documentation by, such indemnified person (or any of its related persons). You shall not be liable for any settlement of any Proceeding effected without your consent (which consent shall not be unreasonably withheld or delayed), but if settled with your written consent, or if there is a final judgment against an indemnified person in any such Proceeding, you agree to indemnify and hold harmless each indemnified person in the manner set forth above. You shall not, without the prior written consent of an indemnified person (which consent shall not be unreasonably withheld or delayed), effect any settlement of any pending or threatened Proceeding against an indemnified person in respect of which indemnity has been sought hereunder by such indemnified person unless (i) such settlement includes an unconditional release of such indemnified person from all liability or claims that are the subject matter of such Proceeding and (ii) does not include any statement as to any admission. Governing Law, Etc. ------------------- This Commitment Letter and our commitment shall not be assignable by you (except to any of your affiliates that is controlled by you and newly formed solely in connection with the Merger or the transactions contemplated hereby) without our prior written consent, and any purported assignment without such consent shall be void. This Commitment Letter may not be amended or any provision hereof waived or modified except by an instrument in writing signed by us and you. This Commitment Letter may be executed in any number of counterparts, each of which shall be an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this Commitment Letter by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Commitment Letter. Headings are for convenience only. This Commitment Letter is intended to be for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto. THIS COMMITMENT LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. Any right to trial by jury with respect to any claim or action arising out of this Commitment Letter is hereby waived. The parties hereto hereby submit to the non-exclusive jurisdiction of the federal and New York State courts located in The City of New York (and appellate courts thereof) in connection with any dispute related to this Commitment Letter or any of the matters contemplated hereby, and agree that service of any process, summons, notice or document by registered mail addressed to you shall be effective service of process against you for any suit, action or proceeding relating to any such dispute. The parties hereto irrevocably and unconditionally waive any objection to the laying of such venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding has been brought in an inconvenient forum. A final judgment in any such suit, action or proceeding brought in any such court may be enforced in any other courts to whose jurisdiction you are or may be subject by suit upon judgment. 4 Please indicate your acceptance of the terms hereof and of the Term Sheet and the Conditions Annex by returning to us (electronically or otherwise) executed counterparts of this Commitment Letter not later than 5:00 p.m., New York City time, on March 21, 2007. This Commitment Letter and our agreement to provide the services described herein are also conditioned upon your acceptance hereof as set forth above. Upon the earlier to occur of (A) the execution and delivery of the Financing Documentation by all of the parties thereto or (B) the date which is 15 days after the End Date (as defined in the Merger Agreement), unless the End Date is extended pursuant to Section 7.1(b)(i) of the Merger Agreement, in which case, the date which is the End Date, if the Financing Documentation shall not have been executed and delivered by all such parties prior to that date, this Commitment Letter and our agreement to provide the services described herein shall automatically terminate unless we agree to an extension. We are pleased to have been given the opportunity to assist you in connection with the financing for the Transactions. Very truly yours, THE WOODBRIDGE COMPANY LIMITED By: /s/ Sarah Lerchs ------------------------------------ Name: Sarah Lerchs Title: Senior Counsel Accepted and agreed to as of the date first written above: TALON HOLDINGS CORP. By: /s/ James R. Crane ------------------------------------ Name: James R. Crane Title: President 5 ANNEX I SUMMARY OF PRINCIPAL TERMS AND CONDITIONS ----------------------------------------- Unsecured Term Loan Facility(1) ------------------------------- Borrower: Talon Holdings Corp. - -------- Lender: The Woodbridge Company Limited, or one of - ------ its affiliates (the "Lender"), subject to the Borrower's satisfaction that such affiliate acting as a lender does not create any material adverse tax consequences to the Borrower. Type and Amount of Facility: A senior unsecured term loan facility (the - --------------------------- "Unsecured Term Loan Facility") in an aggregate principal amount of $300 million (the loans thereunder, the "Unsecured Term Loans"). Purpose: Proceeds of the Unsecured Term Loan Facility - ------- will be used on the Closing Date to finance a portion of the Merger consideration and the Refinancing and to pay fees, commissions and expenses in connection therewith. Closing Date: The date of consummation of the Merger and - ------------ the initial funding of the Unsecured Term Loan Facility. Definitive Documentation: The definitive documentation shall be agreed - ------------------------ between the Lender and Holdings and shall be consistent with the terms hereof. Maturity Date: Seven and one-half (7.5) years from the - ------------- Closing Date. Availability: A single drawing may be made on the Closing - ------------ Date of the full amount of the Unsecured Term Loan Facility. Amortization: None. - ------------ Interest: Loans will bear interest at the fixed rate - -------- of 11% per annum. Default Interest: Upon the occurrence and during the - ---------------- continuance of a payment default, interest will accrue on any overdue amount of a loan or other overdue amount payable at a rate of 2.0% per annum in excess of the rate otherwise applicable to such loan or other overdue amount. Interest Election: Until the fifth anniversary of the loan, - ----------------- - ------------------- (1) All capitalized terms used but not defined herein shall have the meanings provided in the Commitment Letter to which this summary is attached. -2- interest will be paid, at the option of Holdings, in cash (a "Cash Election") or by adding such interest to the principal amount of the outstanding Unsecured Term Loans (a "PIK Election" and, together with a Cash Election, an "Election"), in each case, quarterly in arrears. After the fifth anniversary of the loan, interest will be paid in cash, quarterly in arrears. On or before the fifth anniversary of the loan, Holdings shall be required to satisfy, by means of a cash payment, a portion of the accrued and unpaid interest so that the Unsecured Term Loans will not qualify as an "applicable high yield discount obligation" for federal tax purposes. Holdings shall make an Election with respect to each Interest Period by providing at least 3 days' notice to Woodbridge prior to the beginning of such Interest Period. If an Election is not made by Holdings in a timely fashion or at all with respect to the method of payment of interest for an Interest Period, Holdings shall be deemed to have made a PIK Election with respect to the entire amount of the applicable interest payment for such interest period. Mandatory Prepayments: None. - --------------------- Optional Prepayments: Permitted in whole or in part, with prior - -------------------- notice at any time after the third anniversary of the Closing Date but without premium or penalty and including accrued and unpaid interest, subject to limitations as to minimum amounts of prepayments to be agreed. Application of Prepayments: Prepayments shall be applied in the manner - -------------------------- directed by Holdings. Guarantees: None. - ---------- Security: None. - -------- Conditions to Borrowing: Conditions precedent to borrowing will be - ----------------------- solely those set forth in the Commitment Letter and in the Conditions Annex. Representations and Warranties: Substantially similar to those governing the - ------------------------------ Senior Secured Facilities, with such baskets and exceptions to be agreed, and, in any event, such representations and warranties shall be less restrictive than those set forth in the documentation for the Senior Secured Facilities. Affirmative Covenants: Substantially similar to those governing the - --------------------- Senior Secured Facilities, with baskets and exceptions to be agreed, provided that such affirmative covenants shall be less restrictive than those set forth in the documentation for the Senior Secured Facilities. -3- Negative Covenants: Negative covenants similar to those for - ------------------ high-yield securities and covering the following (with baskets and exceptions to be agreed, and, in any event, less restrictive than those set forth in the documentation for the Senior Secured Facilities): (a) incurrence-based covenants for the incurrence of indebtedness (with exceptions for, among other things, indebtedness incurred under the Facilities and indebtedness incurred to refinance indebtedness outstanding on the Closing Date), the payment of dividends, and the making of certain investments; and (b) negative covenants for the sale of assets, entering into affiliate transactions, entering into mergers, consolidations, and sales of substantially all assets and distributions. Events of Default: Limited to the following (which shall be - ----------------- subject to materiality thresholds, grace periods and exceptions to be agreed, and, in any event, more favorable to Holdings than those set forth in the documentation for the Senior Secured Facilities): nonpayment, breach of representations and covenants, cross acceleration to material indebtedness for borrowed money, bankruptcy and insolvency events, ERISA events, material judgments and Change of Control (to be defined in the definition documentation). Assignments: It is contemplated that the Lender will hold - ----------- the entire principal amount of the Unsecured Term Loan Facility to maturity. Any assignment of the Unsecured Term Loans will require the prior written consent of Holdings, which consent may be withheld in Holdings' sole and absolute discretion. Yield Protection: Substantially similar to those contained in - ---------------- other senior unsecured fixed rate facilities provided by the Lender and relating to increased costs arising from a change of law. Expenses and Indemnification: All reasonable and documented out-of-pocket - ---------------------------- expenses (including but not limited to reasonable legal fees and expenses of not more than one counsel plus, if necessary, one local counsel per jurisdiction and reasonable expenses incurred in connection with due diligence and travel, courier, reproduction, printing and delivery expenses) of Lender associated with the preparation, execution and delivery, administration, amendment, waiver or modification (including proposed amendments, waivers or modifications) of the documentation contemplated hereby are to be paid by Holdings on and after Closing Date, if it occurs. In addition, all reasonable and documented out-of-pocket expenses -4- (including but not limited to reasonable legal fees and expenses of not more than one counsel plus, if necessary, one local counsel per jurisdiction) of the Lender for workout proceedings, enforcement costs and documentary taxes associated with the Unsecured Term Loan Facility are to be paid by Holdings. Holdings will indemnify the Lender, and its affiliates, and hold them harmless from and against all reasonable and documented out-of-pocket costs, expenses (including but not limited to reasonable legal fees and expenses of not more than one counsel plus, if necessary, one local counsel per jurisdiction) and liabilities arising out of or relating to any action, investigation, suit or proceeding relating to or arising out of the Transactions and any actual or proposed use of the proceeds of any loans made under the Unsecured Term Loan Facility; provided, however, that no such person will be indemnified for costs, expenses or liabilities to the extent determined to have been incurred by reason of the gross negligence, bad faith or willful misconduct of, or breach of the Loan Documentation by, such person or any of its affiliates, or the directors, officers, employees, advisors or agents or any of them. Requisite Lenders: Lenders holding more than 50% of the - ----------------- aggregate amount of the Unsecured Term Loan Facility with the consent of each lender directly and adversely affected thereby to be required with respect to (a) reductions in the unpaid principal amount or extensions of the date for any payment of any loan, (b) reductions in interest rates or fees or extensions of the dates for payment thereof, (c) increases in the amounts or extensions of the expiry date of any commitments, and (d) modifications to any of the voting requirements. The consent of the Lender will be required with respect to any amendment adversely affecting the rights or obligations thereof. It is hereby understood and agreed that amendments to financial definitions will require the consent of lenders holding no more than a majority of total loans and commitments. In the event Holdings permits an assignment of a portion of the Unsecured Term Loans, Holdings will have the right to replace or prepay any lender who does not consent to any amendment or waiver requiring the consent of such lender but approved by the Requisite Lenders; provided that Holdings has satisfied all of the outstanding obligations owing to such lender under the Unsecured Term Loan Facility. -5- Governing Law and Forum: The laws of the State of New York. Each - ----------------------- party to the Loan Documentation will waive the right to trial by jury and will consent to the non-exclusive jurisdiction of the state and federal courts located in The City of New York. Counsel to the Lender: Goodmans LLP - --------------------- ANNEX II CONDITIONS TO CLOSING(2) ------------------------ The obligations of the Lender to fund the Unsecured Term Loan Facility are subject only to the conditions set forth in the Commitment Letter and satisfaction of each of the conditions precedent set forth below. 1. The Merger and the Refinancing shall be consummated concurrently with the initial funding of the Unsecured Term Loan Facility (i) in accordance with a definitive Merger Agreement reasonably satisfactory to us (it being acknowledged that the "Execution Copy" of the Merger Agreement dated March 15, 2007 delivered to the Lender on the date hereof is satisfactory to the Lender) and the related disclosure schedules and exhibits thereto, without waiver or amendment thereof (other than any such waivers or amendments (including, without limitation, with respect to any representations and warranties in the Merger Agreement) as are not materially adverse to the Lender) unless consented to by the Lender or (ii) on such other terms and conditions as are reasonably satisfactory to the Lender. 2. Holdings shall have received Equity Financing from Centerbridge and Woodbridge (comprising not less than approximately 49% of such Equity Financing) and from Crane (comprising not less than approximately 51% of such Equity Financing) and SurvivingCo shall have received such Equity Financing. 3. SurvivingCo shall have received concurrently the proceeds of the First Loan Facilities. 4. Definitive documentation for the Unsecured Term Loan Facility (the "Loan Documentation") reflecting and consistent with the terms and conditions set forth herein and in the term sheet and otherwise reasonably satisfactory to Holdings and the Lender, shall have been executed and delivered, and the Lender shall have received such customary legal opinions (including opinions (i) from counsel to Holdings and its subsidiaries, (ii) if reasonably available, delivered pursuant to the Merger Agreement, accompanied by reliance letters in favor of the Lender and (iii) from such special and local counsel as may be required by the Lender and consented to by Holdings (such consent not to be unreasonably withheld)), documents and other instruments as are customary for transactions of this type or as it may reasonably request. - ------------------- (2) All capitalized terms used but not defined herein shall have the meanings provided in the Commitment Letter to which this Annex II is attached. EX-7 6 mm03-1907_sc13da3e709.txt EX. 7.09 EXHIBIT 7.09 ------------ MERRILL LYNCH CAPITAL CORPORATION WACHOVIA BANK, NATIONAL ASSOCIATION 4 World Financial Center WACHOVIA CAPITAL MARKETS, LLC 250 Vesey Street One Wachovia Center New York, NY 10080 301 South College Street Charlotte, NC 28288-0737 March 18, 2007 Talon Holdings Corp. c/o James Crane 15350 Vickery Drive Houston, TX 77032 c/o Centerbridge Capital Partners, L.P. 31 West 52nd Street, 16th Floor New York, NY 10019 Attention: Jason Mozingo, Managing Director c/o The Woodbridge Company Limited 65 Queen Street West, Suite 2400 Toronto, Ontario Canada M5H2M8 Attention: Geoff Beattie RE: PROJECT TALON--CREDIT FACILITIES COMMITMENT LETTER -------------------------------------------------- Ladies and Gentlemen: Talon Holdings Corp. ("you" or "Holdco") has advised Merrill Lynch Capital Corporation ("Merrill Lynch"), Wachovia Bank, National Association ("Wachovia") and Wachovia Capital Markets, LLC ("Wachovia Capital" and, together with Merrill Lynch and Wachovia, "we", "us" or the "Agents") that (i) Holdco has been newly formed by James Crane, together with co-investors selected by him (collectively, "Crane") and Centerbridge Capital Partners, L.P. and The Woodbridge Company Limited (collectively, "Sponsor"), and intends to enter into (together with one or more wholly-owned subsidiaries of Holdco) an acquisition agreement (the "Acquisition Agreement") pursuant to which a wholly-owned subsidiary of Holdco ("Borrower") will acquire (the "Acquisition") all of the capital stock of EGL, Inc. ("Target"); (ii) immediately prior to the consummation of the Acquisition, Crane, Sponsor and one or more other investors reasonably satisfactory to us (or certain of their affiliates) (together, the "Investors") will purchase for cash (the "Equity Financing") common equity of Holdco in an aggregate amount of at least $285.0 million (and Holdco will contribute such cash as a common equity investment to Borrower), and upon consummation of the Acquisition and the other transactions contemplated hereby, the Investors, including Crane, will own not less than 100% of the equity of Holdco; and (iii) Crane will contribute at least $268.0 million of capital stock of Target and $52.0 million in cash to Holdco (the "Rollover Equity Investment"), and Holdco will simultaneously contribute such capital stock of Target to Borrower. Upon consummation of the Acquisition and other transactions contemplated hereby, Crane will own 51% of the equity in Holdco. For purposes of this Commitment Letter and the Term Sheet, the "subsidiaries" of Holdco include those who will become subsidiaries of Holdco in connection with the Transactions. In addition, you have advised us that in connection with the Acquisition, Borrower will enter into senior secured credit facilities in an aggregate principal amount of $960.0 million (together, the "Credit Facilities") having the benefit of a security interest in all of the, and a perfected lien on substantially all of the material, Collateral (as defined in the Term Sheet (as -2- defined below)). A portion of the Credit Facilities may be denominated in euros in amounts to be mutually agreed. In addition, you have advised us that, on the closing date of the Acquisition (the "Closing Date"), Target and its subsidiaries will repay all indebtedness and preferred stock outstanding prior to the Closing Date and terminate all commitments to make extensions of credit (the "Refinancing") under their existing indebtedness (the "Existing Indebtedness"), other than such indebtedness or preferred stock as shall be mutually agreed. The Acquisition, the Equity Financing, the Rollover Equity Investment, the Refinancing, the execution and delivery of the Credit Facilities and the other transactions contemplated hereby and thereby are referred to as the "Transactions". You have requested that the Agents commit to provide the Credit Facilities to finance the Acquisition and the Refinancing, to pay certain related fees and expenses and to provide ongoing working capital and for other general corporate purposes of Holdings and its subsidiaries. Accordingly, subject to the terms and conditions set forth below, the Agents hereby agree with you as follows: 1. Commitment. In connection with the foregoing (a) Merrill Lynch hereby severally commits to provide to Borrower 60% of the principal amount of each of the Credit Facilities and (b) Wachovia hereby severally commits to provide to Borrower 40% of the principal amount of each of the Credit Facilities, in each case subject to upon the terms and subject to the conditions set forth or referred to herein, in the Fee Letter (the "Fee Letter") dated the date hereof and delivered to you, and in the Credit Facilities Summary of Terms and Conditions attached hereto (and incorporated by reference herein) as Exhibit A (the "Term Sheet") The commitments of the Agents hereunder are subject to the negotiation, execution and delivery of definitive documents governing the Credit Facilities (together, the "Credit Documents") that shall be mutually agreed are reflecting, among other things, the terms and conditions set forth herein and in the Term Sheet and the Fee Letter, it being understood that the conditions, representation, warranties and covenants shall be limited to those set forth herein, in the Fee Letter and Term Sheet. It is further agreed that (i) Merrill Lynch shall appear on the "left" in all marketing and other materials related to any and all of the Credit Facilities and (ii) Wachovia shall appear to the right of Merrill and to the "left" of any additional agents, co-agents, arrangers or bookrunners. 2. Syndication. We reserve the right and intend, in consultation with you, prior to or after the execution of the Credit Documents, to syndicate all or a portion of our commitments to one or more financial institutions acceptable to you (your consent not to be unreasonably withheld) (together with Merrill Lynch and Wachovia, the "Lenders"; it being understood that we will not syndicate to those banks, financial institutions or other institutional lenders previously identified in writing by you to us as "disqualified institutions" (the "Disqualified Institutions"). Without limiting your obligations to assist with syndication efforts as set forth below, it is understood that the Agents' commitments hereunder are not subject to such syndication. Our commitments hereunder are subject to Merrill Lynch (or one of its affiliates) and Wachovia Capital (or one of its affiliates) acting as joint lead arrangers and bookrunners (in such capacity, the "Lead Arrangers") of the Credit Facilities and Merrill Lynch acting as sole and exclusive administrative agent for the Credit Facilities (in such capacity, the "Administrative Agent"), and Wachovia Capital acting as sole and exclusive syndication agent for the Credit Facilities (in such capacity, the "Syndication Agent"). We (or one of our respective affiliates) will manage all aspects of the syndication in consultation with you, including decisions as to the selection of potential Lenders to be approached and when they will be approached, when their commitments will be accepted, which Lenders will participate subject to your consent (not to be unreasonably withheld) and the final allocations of the commitments among the Lenders (which are likely not to be pro rata across facilities among Lenders), and we will exclusively perform all functions and -3- exercise all authority as customarily performed and exercised in such capacities, including selecting counsel for the Lenders and negotiating the Credit Documents. Any agent or arranger titles (including co-agents) awarded to other Lenders are subject to our mutual agreement and shall not entail any role with respect to the matters referred to in this paragraph unless we shall mutually agree. You agree that no Lender will receive compensation outside the terms contained herein and in the Fee Letter in order to obtain its commitment to participate in the Credit Facilities, unless you and we shall so agree. You understand that we intend to commence the syndication of the Credit Facilities promptly, and you agree to use commercially reasonable efforts to assist us in achieving a timely syndication that is satisfactory to you and us. The syndication efforts will be accomplished by a variety of means, including direct contact during the syndication between senior management, advisors and affiliates of Crane, Sponsor and Borrower on the one hand and the proposed Lenders on the other hand, and Crane and Sponsor hosting, with the Agents, one meeting with prospective Lenders at such times and places as we may reasonably request. You agree to, upon our request, (a) provide, and cause your affiliates and advisors to provide, and use your commercially reasonable efforts to have Target and Seller provide, to us all information reasonably requested by us to successfully complete the syndication, including the Information and Projections (defined below) (including updated projections) contemplated hereby, (b) assist, and cause your affiliates and advisors to assist, and use your commercially reasonable efforts to have Target and Seller assist, us in the preparation of a Confidential Information Memorandum and other marketing materials (the contents of which you shall be solely responsible for) to be used in connection with the syndication, including use commercially reasonable efforts to make available representatives of Sponsor and Target, and (c) use commercially reasonable efforts to obtain, at your expense, monitored rating of the Credit Facilities from Moody's Investors Service ("Moody's") and Standard & Poor's Ratings Group ("S&P") at least 21 days prior to the Closing Date and to participate actively in the process of securing such ratings. You also agree to use your commercially reasonable efforts to ensure that our syndication efforts benefit from your (and your affiliates') and Target's existing lending relationships. 3. Fees. As consideration for our commitments hereunder and our agreement to arrange, manage, structure and syndicate the Credit Facilities, you agree to pay to us the fees as set forth in the Fee Letter. 4. Conditions. Each Agent's commitments hereunder are subject to the conditions set forth elsewhere herein and in Annex I to this Commitment Letter. Our commitments hereunder are also subject to: (a) the preparation, execution and delivery of definitive documentation with respect to the Credit Facilities (including credit agreements, security documents and guarantees) incorporating the terms outlined in this Commitment Letter and in the Term Sheet and otherwise reasonably satisfactory to the Agents and their counsel, and the Agents shall have had the opportunity to review and shall be reasonably satisfied with the Acquisition Agreement (and all exhibits, schedules, appendices and attachments thereto and all material related agreements) and the other material documents for the Transactions, it being acknowledged by us that (i) the "Execution Copy" thereof dated March 18, 2007 delivered to us and our affiliates on the date hereof, and the terms of the Transactions set forth therein and (ii) any waivers or amendments to such draft as are not materially adverse to us, are, and will be, acceptable to us; (b) we shall have been afforded a period of not less than 21 days following the date of delivery of the final syndication materials for the Credit Facilities to syndicate the Credit Facilities and we shall be satisfied that, after the date hereof and until the earlier of (i) completion of syndication of the Credit Facilities (as determined by us) and (ii) the Closing Date, none of Holdco or any of its subsidiaries shall have syndicated or issued, attempted to syndicate or issue, announced or authorized the announcement of, or engaged in discussions concerning the syndication or issuance of any debt facility or debt security of any -4- of them (including the Woodbridge facility), including renewals thereof, other than the Credit Facilities; and (c) no fact, circumstance, event, change, effect or occurrence that, individually or in the aggregate, would have a Company Material Adverse Effect (as defined in the Acquisition Agreement). The terms of the definitive documentation for the Credit Facilities shall be in a form such that they do not impair availability thereof on the Closing Date if the terms and conditions set forth in this Commitment Letter, including Annex I and Exhibit A, are satisfied. 5. Information and Investigations. You hereby represent and covenant that (a) to your knowledge, all written information and data (excluding all financial projections concerning Holdco and its subsidiaries and the transactions contemplated hereby (the "Projections") and information of a general economic or general industry nature) that have been or will be made available by you or any of your affiliates, representatives or advisors to us (whether prior to or on or after the date hereof) in connection with the Transactions (supplemented as contemplated herein), taken as a whole (the "Information"), is and will be complete and correct in all material respects and does not and will not, taken as a whole, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements contained therein not misleading in any material respect, in light of the circumstances under which such statements are made (after giving effect to all supplements thereto), and (b) all Projections that have been made or will be prepared by or on behalf of you or any of your affiliates, representatives or advisors and that have been or will be made available to us or any Lender in connection with the transactions contemplated hereby have been and will be prepared in good faith based upon assumptions believed by you to be reasonable at the time made, it being understood that actual results may vary materially from the Projections. You agree to supplement the Information and the Projections from time to time until the Closing Date and, if requested by us, for a reasonable period thereafter necessary to complete the syndication of the Credit Facilities so that the representation and covenant in the preceding sentence remain correct in all material respects. In syndicating the Credit Facilities we will be entitled to use and rely on the Information and the Projections without responsibility for independent check or verification thereof. You hereby acknowledge that (a) the Agents will make available Information and Projections to the proposed syndicate of Lenders through posting on IntraLinks or another similar electronic system and (b) certain of the proposed Lenders may be "public-side" Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to Borrower) (each, a "Public Lender"). You hereby agree that (a) you will use commercially reasonable efforts to identify that portion of the Information and Projections that may be distributed to the Public Lenders and all Borrower materials that are to be made available by you to the Public Lenders shall be clearly and conspicuously marked "PUBLIC"; (b) by marking materials "PUBLIC," you shall be deemed to have authorized the Agents to treat such materials as not containing any material non-public information (although it may be sensitive and proprietary) with respect to the Borrower for purposes of United States federal and state securities laws, it being understood that certain of such materials may be subject to the confidentiality requirements of the definitive credit documentation; (c) all materials marked "PUBLIC" are permitted to be made available by electronic means designated "Public Investor;" and (d) the Agents shall be entitled to treat any materials that are not marked "PUBLIC" as being suitable only for posting by electronic means not designated for "Public Lenders." 6. Indemnification. You agree to indemnify and hold harmless each of the Agents and their affiliates, and each such person's respective officers, directors, employees, agents and controlling persons (each Agent and each such other person being an "Indemnified Party") from and against any and all losses, claims, damages, costs, expenses and liabilities, joint or several, to which any Indemnified Party may become subject under any applicable law, or otherwise related to or arising out of or in connection with this Commitment Letter, the Fee Letter, the Term Sheet, the Credit Facilities, the loans thereunder and the use of proceeds therefrom, any of the Transactions or -5- any related transaction and the performance by any Indemnified Party of the services contemplated hereby, and will reimburse each Indemnified Party for any and all reasonable and invoiced expenses (including reasonable and invoiced counsel fees and expenses) as they are incurred in connection with the investigation of or preparation for or defense of any pending or threatened claim or any action or proceeding arising therefrom, whether or not such Indemnified Party is a party and whether or not such claim, action or proceeding is initiated or brought by or on behalf of you or any of your affiliates and whether or not any of the Transactions are consummated or this Commitment Letter is terminated, except to the extent resulting from such Indemnified Party's bad faith, gross negligence, willful misconduct or breach of this Commitment Letter or the Credit Facilities. You also agree not to assert any claim against any Indemnified Party for special, indirect, consequential, punitive or exemplary damages on any theory of liability in connection in any way with this Commitment Letter, the Fee Letter, the Term Sheet, the Credit Facilities, the loans thereunder and the use of proceeds therefrom, any of the Transactions or any related transaction and the performance by any Indemnified Party of the services contemplated hereby. Notwithstanding any other provision of this Commitment Letter, no Indemnified Party shall be liable for any damages arising from the use by others of information or other materials obtained through electronic telecommunications or other information transmission systems, except to the extent resulting from such Indemnified Party's bad faith, gross negligence, willful misconduct or breach of this Commitment Letter or the Credit Facilities. You agree that, without our prior written consent, neither you nor any of your affiliates or subsidiaries will settle, compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding in respect of which indemnification has been or could be sought under the indemnification provisions hereof (whether or not any other Indemnified Party is an actual or potential party to such claim, action or proceeding), unless such settlement, compromise or consent (i) includes an unconditional written release in form and substance reasonably satisfactory to the Indemnified Parties of each Indemnified Party from all liability arising out of such claim, action or proceeding and (ii) does not include any statement as to or an admission of fault, culpability or failure to act by or on behalf of any Indemnified Party. 7. Expenses. You agree to reimburse each of us and our affiliates for our and their reasonable and invoiced expenses upon our request made from time to time (including, without limitation, all reasonable due diligence investigation expenses, fees of consultants engaged with your consent (which consent may be withheld in your sole and absolute discretion), syndication expenses (including printing, distribution and bank meetings), appraisal and valuation fees and expenses, travel expenses, duplication fees and expenses, audit fees, search fees, filing and recording fees and the reasonable and invoiced fees, out-of-pocket disbursements and other charges of one counsel (including a single local counsel in each relevant jurisdiction or regulatory counsel) and any sales, use or similar taxes (and any additions to such taxes) related to any of the foregoing) incurred in connection with the negotiation, preparation, execution and delivery, waiver or modification, collection and enforcement of this Commitment Letter, the Term Sheet, the Fee Letter and the Credit Documents and the security arrangements (if any) in connection therewith (other than any expenses relating solely to an equity investor other than any Investor party hereto, unless such expenses were related to activities carried forward to this transaction), and whether or not such fees and expenses are incurred before or after the date hereof; provided such fees and expenses shall not be payable unless and until definitive loan documentation is entered into and the Transactions are consummated. 8. Confidentiality. This Commitment Letter, the Term Sheet, the Fee Letter, the contents of any of the foregoing and our and/or our respective affiliates' activities pursuant hereto or thereto are confidential and shall not be disclosed by or on behalf of you or any of your affiliates to any person without our prior written consent, except that you may disclose this Commitment Letter, the Term Sheet and the Fee Letter (i) to your, Sponsor's and Seller's and your and their respective officers, directors, employees and advisors, and then only in connection with the Transactions and on a confidential need-to-know basis (provided that you may only disclose a redacted version of the Fee Letter to the Seller and its advisors) and (ii) as you are -6- required to make by applicable law or compulsory legal process (based on the advice of legal counsel); provided, however, that in the event of any such compulsory legal process you agree, to the extent permitted by applicable law, to give us prompt notice thereof and to cooperate with us in securing a protective order in the event of compulsory disclosure and that any disclosure made pursuant to public filings shall be subject to our prior review. You agree that you will permit us to review and approve any reference to any of us or any of our affiliates in connection with the Credit Facilities or the transactions contemplated hereby contained in any press release or similar public disclosure prior to public release. You agree that with your prior written consent (not to be unreasonably withheld) we and our affiliates may share information on a confidential basis concerning you, Crane, Sponsor and your, Crane's and Sponsor's respective subsidiaries (where applicable) and affiliates among ourselves solely in connection with the performance of our services hereunder and the evaluation and consummation of financings and Transactions contemplated hereby. You also acknowledge that we or our affiliates may be providing debt financing, equity capital or other services (including financial advisory services) to parties whose interests may conflict with yours, Target's, Crane's or Sponsor's, including other potential purchasers of Target. We agree that we will not furnish confidential information obtained from you, Crane or Target to any of our other customers and that we will treat confidential information relating to you, Seller or Target and your and their respective affiliates with the same degree of care as we treat our own confidential information. We further advise you that we and our affiliates will not make available to you, Crane, Borrower, Target or Sponsor confidential information that we or they have obtained or may obtain from any other customer. 9. Termination. The Agents' commitments hereunder shall terminate in their entirety on the earliest to occur of (A) the date which is 15 days after the End Date (as defined in the Acquisition Agreement), unless the End Date is extended pursuant to Section 7.1(b)(i) of the Acquisition Agreement, in which case, the date which is the End Date, if the Credit Documents are not executed and delivered by Borrower and the Lenders on or prior to such date, (B) the date of termination of the Acquisition Agreement in accordance with its terms and (C) the date of execution and delivery of the Credit Documents by Borrower and the Lenders. Notwithstanding the foregoing, the provisions of Sections 6, 7, 8, 10 and 11 hereof shall survive any termination pursuant to this Section 9. 10. Assignment; No Fiduciary; Etc. This Commitment Letter and our commitment hereunder shall not be assignable by any party hereto (other than by us to our respective affiliates or by you to your affiliates) without the prior written consent of the other parties hereto, and any attempted assignment shall be void and of no effect; provided, however, that nothing contained in this Section 10 shall prohibit us (in our sole discretion) from (i) performing any of our duties hereunder through any of our affiliates, and you will owe any related duties (including those set forth in Section 2 above) to any such affiliate, and (ii) granting (in consultation with you) participations in, or selling (with your consent, such not consent not to be unreasonably withheld) assignments of all or a portion of, the commitments or the loans under the Credit Facilities in accordance with Section 2 hereof (it being understood that our commitments hereunder shall not be reduced until such time as the Credit Facilities are funded by the related assignee in accordance with the terms hereof). This Commitment Letter is solely for the benefit of the parties hereto and does not confer any benefits upon, or create any rights in favor of, any other person. In connection with all aspects of each transaction contemplated by this Commitment Letter, you acknowledge and agree that (i) each transaction contemplated by this Commitment Letter is an arm's-length commercial transaction, between Holdco and Borrower, on the one hand, and the Agents, on the other hand, (ii) in connection with each such transaction and the process leading thereto each Agent will act solely as a principal and not as agent (except as otherwise provided herein) or fiduciary of Holdco or Borrower or their respective stockholders, affiliates, creditors, employees or any other party, (iii) the Agents will not assume an advisory or fiduciary responsibility in favor of Holdco or Borrower or any of their affiliates with respect to any of the transactions contemplated hereby or the process leading thereto (irrespective of whether either Agent has advised or is currently advising Holdco or Borrower on other matters) and the Agents will not have any obligation -7- to Holdco or Borrower or any of their affiliates with respect to the transactions contemplated in this Commitment Letter except the obligations expressly set forth herein, (iv) the Agents may be engaged in a broad range of transactions that involve interests that differ from those of Holdco and Borrower and their affiliates and (v) the Agents have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby and Holdco and Borrower have consulted and will consult their own legal, accounting, regulatory, and tax advisors to the extent they deem appropriate. The matters set forth in this Commitment Letter reflect an arm's-length commercial transaction between you and your affiliates, on the one hand, and the Agents, on the other hand. You hereby waive and release, to the fullest extent permitted by law, any claims that you may have against either Agent with respect to any breach or alleged breach of fiduciary duty. 11. Governing Law; Waiver of Jury Trial. This Commitment Letter shall be governed by, and construed in accordance with, the laws of the State of New York. Each of the parties hereto waives all right to trial by jury in any action, proceeding or counterclaim (whether based upon contract, tort or otherwise) related to or arising out of any of the Transactions or the other transactions contemplated hereby, or the performance by us or any of our affiliates of the services contemplated hereby. 12. Amendments; Counterparts; etc. No amendment or waiver of any provision hereof or of the Term Sheet shall be effective unless in writing and signed by the parties hereto and then only in the specific instance and for the specific purpose for which given. This Commitment Letter, the Term Sheet and the Fee Letter are the only agreements between the parties hereto with respect to the matters contemplated hereby and thereby and set forth the entire understanding of the parties with respect thereto. This Commitment Letter may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart by telecopier or other electronic transmission shall be effective as delivery of a manually executed counterpart. 13. Patriot Act. We hereby notify you that pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the "Patriot Act"), the Lenders may be required to obtain, verify and record information that identifies Sponsor, Borrower and Target, which information includes the name, address and tax identification number and other information regarding them that will allow such Lender to identify them in accordance with the Patriot Act. This notice is given in accordance with the requirements of the Patriot Act and is effective as to the Lenders. 14. Public Announcements; Notices. We may, subject to your prior written consent (not to be unreasonably withheld, delayed or conditioned) at our expense, publicly announce as we may choose the capacities in which we or our affiliates have acted hereunder. Any notice given pursuant hereto shall be mailed or hand delivered in writing, if to (i) you, at your address set forth on page one hereof; and (ii) both Agents c/o Merrill Lynch, at World Financial Center, North Tower, 250 Vesey Street, New York, New York 10281, Attention: David Stith, with a copy to Michael E. Michetti, Esq., at Cahill Gordon & Reindel LLP, 80 Pine Street, New York, New York 10005. (Signature Page Follows) S-1 Please confirm that the foregoing correctly sets forth our agreement of the terms hereof and the Fee Letter by signing and returning to Merrill Lynch the duplicate copy of this letter and the Fee Letter enclosed herewith. Unless we receive your executed duplicate copies hereof and thereof by 5:00 p.m., New York City time, on March 21, 2007, our commitment hereunder will expire at such time. We are pleased to have this opportunity and we look forward to working with you on this transaction. Very truly yours, MERRILL LYNCH CAPITAL CORPORATION By: /s/David Stith ---------------------------------- Name: David Stith Title: Vice President WACHOVIA BANK, NATIONAL ASSOCIATION By: /s/Stephen Neill ---------------------------------- Name: Stephen Neill Title: Director WACHOVIA CAPITAL MARKETS, LLC By: /s/Stephen Neill ---------------------------------- Name: Stephen Neill Title: Director Accepted and agreed to as of the date first written above: TALON HOLDINGS CORP. By: /s/ James R. Crane ---------------------------------- Name: James R. Crane Title: President ANNEX I PROJECT TALON SUMMARY OF ADDITIONAL CONDITIONS PRECEDENT ------------------------------------------ In addition to the conditions set forth in the Commitment Letter and the Term Sheet, the initial borrowing under the Credit Facilities and the commitments under the Commitment Letter shall be subject only to the contemporaneous or prior satisfaction of the following conditions precedent: 1. The Acquisition shall have been consummated in all material respects in accordance with the terms of the Acquisition Agreement (without the waiver or amendment thereof unless (i) consented to by the Lead Arrangers or (ii) such waivers or amendments are not materially adverse to us). 2. The Equity Financing shall have been consummated in an aggregate amount of not less than $285.9 million, on terms and conditions as described in the attached term sheet. The Rollover Equity Investment shall have been consummated on terms and conditions and pursuant as described in the attached term sheet. Holdco shall own not less than 100% of the capital stock of Borrower immediately after giving effect to the Transactions. 3. Borrower shall have received financing in the form of a payment-in-kind or cash-pay loan issued by Holdco in an aggregate amount of $300.0 million (or a combination thereof) on terms and conditions specified in the term sheet dated March 18, 2007 (without the waiver or amendment of any of the material terms thereof unless (i) consented to by the Lead Arrangers or (ii) such waivers or amendments are not materially adverse to the Lenders). 4. The Lead Arrangers shall have received unaudited consolidated balance sheets and related statements of income, stockholders' equity and cash flows of Target for each fiscal quarter ended after the most recently received audited financial statements and ended at least 45 days before the Closing Date. 5. The Lead Arrangers shall have received a pro forma consolidated balance sheet of Borrower as of the last day of the quarter ended at least 45 days prior to the Closing Date, after giving effect to the Transactions. The Lead Arrangers shall have received reasonably detailed pro forma consolidated financial projections prepared by or on behalf of Holdco for Holdco and its consolidated entities through fiscal year 2014. 6. After giving effect to the Transactions, Holdco and its subsidiaries shall have outstanding no indebtedness or preferred stock (or direct or indirect guarantee or other credit support in respect thereof) other than the Loans and such other indebtedness or preferred stock as is mutually agreed. 7. The Lead Arrangers shall have received such other customary legal opinions, corporate documents and other instruments and/or certificates as they may reasonably request, including a certificate on behalf of Borrower from the chief accounting officer of Borrower in form and substance reasonably satisfactory to the Lead Arrangers with respect to the solvency (on a consolidated basis) of Borrower immediately after the consummation of the Transactions to occur on the Closing Date. 8. All accrued fees and expenses (including the reasonable and invoiced fees and out-of-pocket expenses of one counsel to the Lead Arrangers) of the Lead Arrangers in connection with the Credit Documents shall have been paid (to the extent invoiced) CONFIDENTIAL EXHIBIT A CREDIT FACILITIES ----------------- SUMMARY OF TERMS AND CONDITIONS(1) Borrower: A wholly-owned subsidiary of Holdco that will own all of the capital stock of the other subsidiaries of Holdco ("Borrower"). Joint Lead Arrangers/Bookrunners: Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wachovia Capital Markets, LLC (together, the "Lead Arrangers"). Administrative Agent: Merrill Lynch Capital Corporation (in such capacity, the "Administrative Agent"). Syndication Agent: Wachovia Bank, National Association. Lenders: Merrill Lynch Capital Corporation (or one of its affiliates), Wachovia Bank, National Association (or one of its affiliates) and a syndicate of financial institutions (the "Lenders"), but excluding Disqualified Institutions, arranged by the Lead Arrangers in consultation with, and reasonably acceptable to, Borrower. Credit Facilities: Senior secured credit facilities (the "Credit Facilities") in an aggregate principal amount of $960.0 million, such Credit Facilities comprising: (A) Term Loan Facility. Term loan facility in an aggregate principal amount of $810.0 million (the "Term Loan Facility"). Loans under the Term Loan Facility are herein referred to as "Term Loans". A portion of the Term Loans may be denominated in euros in amounts to be mutually agreed. (B) Revolving Credit Facility. A revolving credit facility in an aggregate principal amount of $150.0 million (the "Revolving Facility"). Loans under the Revolving Facility are herein referred to as "Revolving Loans"; the Term Loans and the Revolving Loans are herein referred to collectively as "Loans". An amount to be agreed of the Revolving Facility will be available as - ------------------- (1) Capitalized terms used herein and not defined shall have the meanings assigned to such terms in the attached Credit Facilities Commitment Letter (the "Commitment Letter"). -2- a letter of credit subfacility (in an amount of not less than $50.0 million) and as a swing line subfacility. A portion of the Revolving Facility may be denominated in euros in amounts to be mutually agreed. Transactions: As described in the Commitment Letter. Availability/Purpose: (A) Term Loan Facility. Term Loans will be available to finance the Acquisition and the Refinancing, to pay related fees and expenses, to provide working capital and for other general corporate purposes of Holdings and its subsidiaries subject to the terms and conditions set forth in the Credit Documents (as defined below), on the date of consummation of the Acquisition in one draw (the "Closing Date"). Term Loans repaid or prepaid may not be reborrowed. (B) Revolving Facility. Up to an amount to be agreed of the Revolving Facility will be available to be borrowed on the Closing Date for the purpose described above. The Revolving Facility will be available after the Closing Date for working capital and general corporate purposes on a fully revolving basis, subject to the terms and conditions set forth in the Credit Documents, in the form of revolving loans, swing line loans and letters of credit on and after the Closing Date until the Revolver Maturity Date. Guarantors: Holdco and each of Borrower's direct and indirect domestic wholly-owned, restricted subsidiaries existing on the Closing Date or thereafter created or acquired (other than immaterial subsidiaries and domestic subsidiaries of foreign subsidiaries) shall unconditionally guarantee, on a joint and several basis, all obligations of Borrower under the Credit Facilities and (to the extent relating to the Loans) under each interest rate protection agreement entered into with a person that is a Lender or an affiliate of a Lender at the time. Each guarantor of any of the Credit Facilities is herein referred to as a "Guarantor" and its guarantee is referred to herein as a "Guarantee". Security: The Credit Facilities, the Guarantees, and (to the extent relating to the Loans) the obligations of Borrower under each interest rate protection agreement entered into with a person that is a Lender or any affiliate of a Lender at such time will be secured by (A) a perfected lien on, and pledge of, all of (i) the capital stock of all wholly-owned restricted subsidiaries (other than immaterial subsidiaries) of the Borrower and each Guarantor (limited, in the case of the voting stock of foreign subsidiaries, to 65% of such voting stock of the first tier foreign subsidiaries) and (ii) intercompany notes held by the Borrower and each Guarantor, in each case held on the Closing Date or thereafter created or acquired and (B) a perfected lien on, and security interest in, substantially all of the tangible and intangible owned properties and assets (including all contract rights, real property interests, trademarks, trade names, equipment (excluding vehicles) and proceeds -3- of the foregoing) of each Credit Party (as defined below) (collectively, the "Collateral"), except in each case for those properties and assets as to which the Administrative Agent shall determine in its reasonable discretion that the costs of obtaining such security interest are excessive in relation to the value of the security to be afforded thereby (it being understood that none of the foregoing shall be subject to any other liens or security interests, other than customary permitted liens). All such security interests will be created pursuant to documentation reasonably satisfactory in all respects to the Administrative Agent, and on the Closing Date, such security interests shall have become perfected (or arrangements for the perfection thereof reasonably satisfactory to the Administrative Agent shall have been made) and the Administrative Agent shall have received reasonable satisfactory evidence as to the enforceability and priority thereof (it being understood that to the extent any collateral (other than collateral that can be perfected by the filing of UCC financing statements) is not provided on the Closing Date after your use of commercially reasonable efforts to do so, the delivery of such collateral shall not constitute a condition precedent to the availability of the Facilities on the Closing Date). Documentation: Usual for facilities and transactions of this type and reasonably acceptable to Borrower and the Lenders. The documentation for the Credit Facilities will include, among others, a credit agreement (the "Credit Agreement"), guarantees and appropriate pledge, security interest, mortgage (to be provided post-closing) and other collateral documents (collectively, the "Credit Documents"). Borrower and the Guarantors are herein referred to as the "Credit Parties" and individually referred to as a "Credit Party". Termination of Commitments: The commitments in respect of the Credit Facilities (including pursuant to the Commitment Letter) will terminate in their entirety on the date which is 15 days after the End Date (as defined in the Acquisition Agreement), unless the End Date is extended pursuant to Section 7.1(b)(i) of the Acquisition Agreement, in which case, the date which is the End Date, if the initial funding under the Credit Facilities does not occur on or prior to such date. Final Maturity: (A) Term Loan Facility. The Term Loan Facility will mature on the seventh anniversary of the Closing Date. (B) Revolving Facility. The Revolving Facility will mature on the sixth anniversary of the Closing Date (the "Revolver Maturity Date"). Amortization Schedule: The Term Loan Facility will amortize at a rate of 1.00% per annum on a quarterly basis (beginning with the first full fiscal quarter after the Closing Date) for the first 6 3/4 years after the Closing Date with the balance paid at maturity. -4- Letters of Credit: Letters of credit under the Revolving Facility ("Letters of Credit") will be issued by a Lender to be determined by the Administrative Agent and Borrower (in such capacity, the "L/C Lender"). The issuance of all Letters of Credit shall be subject to the customary procedures of the L/C Lender. Letter of Credit Fees: Letter of Credit fees will be payable for the account of the Revolving Facility Lenders on the daily average undrawn face amount of each Letter of Credit at a rate per annum equal to the applicable margin for Revolving Loans that are LIBOR rate loans in effect at such time. In addition, an issuing fee (not to exceed 0.125% per annum) to be agreed on the face amount of each Letter of Credit shall be payable to the L/C Lender for its own account, which fee shall also be payable quarterly in arrears. Interest Rates and Fees: Interest rates and fees in connection with the Credit Facilities will be as specified on Annex I attached hereto. Default Rate: During the continuance of a bankruptcy or payment event of default, overdue principal, interest and other amounts shall bear interest at a rate per annum equal to 2% in excess of the applicable interest rate (including applicable margin). Mandatory Prepayments/ Subject to the next paragraph, the Credit Reductions in Commitments: Facilities will be required to be prepaid with (a) 50% of annual Excess Cash Flow (to be defined) (all voluntary prepayments of loans shall be credited dollar-for-dollar against Excess Cash Flow mandatory prepayment obligation), with stepdowns to be agreed, (b) 100% of the net cash proceeds (including condemnation and insurance proceeds) of asset sales and other asset dispositions by Holdco or any of its subsidiaries (subject to baskets and exceptions to be agreed upon), and the right to reinvest or commit within 15 months of disposition (such committed reinvestment to occur within 180 days after the end of the 15 month period) and (c) 100% of the net cash proceeds of the issuance or incurrence of debt (subject to baskets and exceptions to be agreed upon). Mandatory prepayments will be applied to the Term Loan Facility in forward order for the next eight unpaid quarterly amounts after such prepayment, and thereafter pro rata to the remaining scheduled amortization payments. To the extent that the amount to be applied to the prepayment of Term Loans exceeds the aggregate amount of Term Loans then outstanding, such excess shall be applied to the Revolving Facility to reduce amounts outstanding thereunder, without any permanent reduction in the commitments. Revolving Loans will be promptly prepaid to the extent that the aggregate extensions of credit under the Revolving Facility exceed the commitments then in effect under the Revolving Facility. To the extent that the -5- amount to be applied to any such repayment of the Revolving Loans exceeds the amount thereof then outstanding, Borrower shall cash collateralize outstanding Letters of Credit. Voluntary Prepayments/ (A) Term Loan Facility. Term Loans may be Reductions in Commitments: prepaid at any time in whole or in part at the option of Borrower, in a minimum principal amount and in multiples to be agreed upon, without premium or penalty (except, in the case of LIBOR borrowings, breakage costs related to prepayments not made on the last day of the relevant interest period). Voluntary prepayments will be applied as directed by Borrower. (B) Revolving Facility. The unutilized portion of the commitments under the Revolving Facility may be reduced and loans under the Revolving Facility may be repaid at any time, in each case, at the option of Borrower, in a minimum principal amount and in multiples to be agreed upon, without premium or penalty (except, in the case of LIBOR borrowings, breakage costs related to prepayments not made on the last day of the relevant interest period). Conditions to Effectiveness The effectiveness of the Credit Agreement and to Initial Loans: and the making of the initial Loans under the Credit Facilities shall be subject to conditions precedent specified in the Commitment Letter and the following: receipt of valid security interests as contemplated hereby (it being understood that to the extent any collateral (other than collateral that can be perfected by the filing of UCC financing statements) is not provided on the Closing Date after your use of commercially reasonable efforts to do so, the delivery of such collateral shall not constitute a condition precedent to the availability of the Facilities on the Closing Date); and insurance customary for facilities of this type. Conditions to All Each extension of credit under the Credit Extensions of Credit: Facilities will be subject to the following conditions, the (i) following the Closing Date, absence of any Default or Event of Default (to be defined), and (ii) continued accuracy of all representations and warranties in all material respects. Notwithstanding the foregoing, the initial extensions of credit shall be subject only to the following specified representations: corporate power and authority, enforceability of the bank documentation, Federal Reserve margin regulations and the Investment Company Act (the "Specified Representations"). -6- Representations and Warranties: The following (with materiality qualifiers and exceptions to be agreed where appropriate) (and applying to Holdco, Borrower and their restricted subsidiaries): 1. Corporate status, power and authority. 2. Execution, delivery, and performance of the Credit Documents do not violate law or other agreements. 3. No government or regulatory approvals required, other than approvals in effect. 4. Due authorization, execution and delivery of the Credit Documents; legality, validity, binding effect and enforceability of the Credit Documents. 5. Ownership of (i) Borrower and its subsidiaries and (ii) properties and necessary rights to intellectual property. 6. Accuracy of financial statements and other information; accuracy and completeness of disclosure; absence of undisclosed liabilities. 7. On the Closing Date and since December 31, 2005, there have not been any facts, circumstances, events, changes, effects or occurrences that have had or would have, individually or in the aggregate, a Company Material Adverse Effect (as defined in the Acquisition Agreement). After the Closing Date, no material adverse change shall have occurred or is reasonably be expected to occur in (i) the business, assets, operations or financial condition of Holdco and its subsidiaries, taken as a whole, (ii) the ability of Borrower or the Guarantors to perform their respective obligations under the Credit Documents or (iii) the ability of the Administrative Agent and to enforce the Credit Documents (any of the foregoing a "Material Adverse Change"). 8. Solvency as of the closing date. 9. No action, suit, investigation, litigation or proceeding pending or threatened in any court or before any arbitrator or governmental authority that could reasonably be expected to result in a Material Adverse Change; no conflict with law or regulatory authority. 10. Payment of taxes. 11. No default under material agreements or the Credit Documents. -7- 12. Insurance. 13. Labor matters. 14. Use of proceeds. 15. Compliance with (i) laws and regulations, including ERISA, Patriot Act and all applicable environmental laws and regulations and (ii) margin regulations. 16. Inapplicability of the Investment Company Act. 17. Validity, priority and perfection of security interests in collateral. Affirmative Covenants: The following affirmative covenants (and applying to Holdco, Borrower and their restricted subsidiaries), subject to exceptions and materiality qualifiers to be agreed: 1. Delivery of independently audited annual consolidated financial statements and certified unaudited quarterly consolidated financial statements. 2. Delivery of notices of defaults, litigation and other material events, budgets and other information customarily supplied in facilities similar to the Credit Facilities. 3. Maintenance of books and records; annual meetings or, at Borrower's option, conference calls, visitation and inspection rights and access to books and records. 4. Preservation of corporate existence; conduct of business. 5. Material compliance with laws (including ERISA and applicable environmental laws). 6. Payment of taxes. 7. Maintenance of properties and insurance. 8. Use of proceeds. 9. Provision of additional collateral, guarantees and mortgages and further assurances with respect to security interests in after-acquired property. Negative Covenants: The following negative covenants (and applying to Holdco, Borrower and their restricted subsidiaries), subject to exceptions and materiality qualifiers to be agreed: -8- 1. Limitation on indebtedness and preferred stock, with an incurrence-based general basket. 2. Limitation on liens and further negative pledges. 3. Limitation on contingent obligations. 4. Limitation on investments, with a general basket to grow based on consolidated net income or other metric to be agreed. 5. Limitation on dividends, redemptions and repurchases of equity interests, with a general basket to grow based on consolidated net income or other metric to be agreed. 6. Limitation on mergers, acquisitions and asset sales. 7. Limitation on capital expenditures, with carryforward of unused amounts to be mutually agreed. 8. Limitation on transactions with affiliates. 9. Limitation on dividend and other payment restrictions affecting subsidiaries. 10. Limitation on changes in business conducted and maintenance of Holdco as a passive, non-operating holding company. 11 Limitation on amendment of documents relating to subordinated indebtedness. 12. Limitation on prepayment or repurchase of subordinated indebtedness, with a general basket to grow based on consolidated net income or other metric to be agreed. 13. Limitation on change of fiscal year. For the avoidance of doubt, the provisions of the Credit Agreement will not restrict any AHYDO related catch-up payments (whether by way of payment, prepayment, redemption or otherwise) required by the indenture governing the Woodbridge indebtedness. Financial Covenants: The Credit Facilities will contain the following financial covenant (definitions and numerical calculations to be set forth in the Credit Agreement): 1. Maximum ratio (the "Senior Secured Leverage Ratio") of senior secured debt to trailing four quarter EBITDA, -9- applicable only to the Revolving Facility and only so long as any loan remains outstanding under the Revolving Facility, with trigger thresholds, if any, to be mutually agreed. The financial covenant contemplated above will be tested on a quarterly basis and will apply to Borrower and its subsidiaries on a consolidated basis. For purposes of determining compliance with the financial covenant, an equity contribution by Sponsor in Borrower after the Closing Date and on the date which is 10 days after the date on which financial statements are required to be delivered for a fiscal quarter will, at the request of Borrower, be including as EBITDA in calculating the financial covenant for the purpose of determining compliance therewith at the end of such fiscal quarter and applicable subsequent periods (any such equity contribution so included in the calculation of EBITDA, a "Specified Equity Contribution"); provided that (a) in each four fiscal quarter period, there shall be a period of at least two fiscal quarters in which no Specified Equity Contribution is made and (b) the amount of any Specified Equity Contribution with respect to the financial covenant shall be no greater than the amount required to cause Borrower to be in compliance with the financial covenant. Interest Rate Management: An amount designated by the Lead Arrangers of the projected outstandings under the Credit Facilities must be hedged on terms and for a period of time reasonably satisfactory to the Lead Arrangers, but in any event not greater than 40% or for more than three years. Events of Default: Customary for facilities similar to the Credit Facilities. Yield Protection and Usual for facilities and transactions of Increased Costs: this type. Assignments and Each assignment (unless to another Lender or Participations: its affiliates) shall be in a minimum amount of $1.0 million in respect of the Term Loan Facility and $5.0 million in respect of the Revolving Facility (in each case unless Borrower and the Lead Arrangers otherwise consent or unless the assigning Lender's exposure is thereby reduced to zero). Assignments (which may be non-pro rata among loans and commitments) shall be permitted with Borrower's and the Lead Arrangers' consent (such consent not to be unreasonably withheld, delayed or conditioned) (other than to any Disqualified Institution), except that no such consent of Borrower need be obtained to effect an assignment to any Lender (or its affiliates) or if any payment or bankruptcy default has occurred and is continuing. Participations shall be permitted without restriction. Voting and gross-up rights of participants will be subject to customary limitations. -10- Required Lenders: Lenders having a majority of the outstanding credit exposure (the "Required Lenders"), subject to amendments of certain provisions of the Credit Documents requiring the consent of Lenders having all of the outstanding credit exposure or Lenders having a majority of the outstanding credit exposure with respect to a particular facility. If, in connection with any proposed amendment, modification, waiver or termination (a "Proposed Change") requiring the consent of all affected Lenders, the consent of the Requisite Lenders is obtained but the consent of other Lenders whose consent is required is not obtained (any such Lender whose consent is not obtained as described in this paragraph being referred to as a "Non-Consenting Lender"), then, so long as the Administrative Agent has agreed in writing, at Borrower's request, the Administrative Agent or an eligible assignee reasonably acceptable to the Administrative Agent shall have the right, subject to compliance with provisions governing assignments, et cetera, to purchase from such Non-Consenting Lender all of the commitments and loans of such Non-Consenting Lender for an amount equal to the principal balance of all loans held by the Non-Consenting Lender and all accrued interest and fees with respect thereto through the date of sale, such purchase and sale to be consummated pursuant to documentation reasonably acceptable to the Administrative Agent. Expenses and Indemnification: In addition to those out-of-pocket expenses reimbursable under the Commitment Letter, all reasonable and invoiced out-of-pocket expenses of the Lead Arrangers and the Administrative Agent (and the Lenders for enforcement costs and documentary taxes) associated with the preparation, execution and delivery of any waiver or modification (whether or not effective) of, and the enforcement of, any Credit Document (including the reasonable and invoiced fees, out-of-pocket disbursements and other charges of one counsel for the Lead Arrangers) are to be paid by the Credit Parties. The Credit Parties will indemnify each of the Lead Arrangers, the Administrative Agent and the other Lenders and hold them harmless from and against all costs, expenses (including reasonable and invoiced fees, disbursements and other charges of one counsel) and liabilities arising out of or relating to any litigation or other proceeding (regardless of whether the Lead Arrangers, the Administrative Agent or any such other Lender is a party thereto) that relate to the Transactions or any transactions related thereto, except to the extent arising from such person's bad faith, gross negligence, willful misconduct or breach of the Credit Documents. Governing Law and Forum: New York. Waiver of Jury Trial: All parties to the Credit Documents waive the right to trial by jury. -11- Special Counsel for Lead Cahill Gordon & Reindel LLP (including local Arrangers: counsel as selected by the Lead Arrangers). ANNEX I ------- Interest Rates and Fees: Borrower will be entitled to make borrowings based on the ABR plus the Applicable Margin or LIBOR plus the Applicable Margin. The "Applicable Margin" shall be (A) with respect to LIBOR Loans, 2.25% per annum and (B) with respect to ABR Loans, 1.25% per annum. Notwithstanding the foregoing, on the first date after the Closing Date (the "Trigger Date") on which Borrower delivers financial statements and a computation of the Total Leverage Ratio for the first fiscal quarter ended at least three months after the Closing Date in accordance with the Credit Agreement, the Applicable Margins in respect of the Revolving Facility shall be subject to reduction pursuant to a grid based on the most recent Total Leverage Ratio to be negotiated. "ABR" means the higher of (i) the corporate base rate of interest announced by the Administrative Agent from time to time, changing effective on the date of announcement of said corporate base rate changes, and (ii) the Federal Funds Rate plus 0.50% per annum. The corporate base rate is not necessarily the lowest rate charged by the Administrative Agent to its customers. "LIBOR" means the rate determined by the Administrative Agent to be available to the Lenders in the London interbank market for deposits in US Dollars in the amount of, and for a maturity corresponding to, the amount of the applicable LIBOR Loan, as adjusted for maximum statutory reserves. Borrower may select interest periods of one, two, three or six months or, if agreed to by each affected Lender, nine or twelve months for LIBOR borrowings. Interest will be payable in arrears (i) in the case of ABR Loans, at the end of each quarter and (ii) in the case of LIBOR Loans, at the end of each interest period and, in the case of any interest period longer than three months, no less frequently than every three months. Interest on all borrowings shall be calculated on the basis of the actual number of days elapsed over (x) in the case of LIBOR Loans, a 360-day year, and (y) in the case of ABR Loans, a 365- or 366-day year, as the case may be. Commitment fees accrue on the undrawn amount of the Credit Facilities, commencing on the date of the execution and delivery of the Credit Documents. The commitment fee in respect of the Credit Facilities will initially be 0.50% per annum, with stepdowns in accordance with a leverage grid. All commitment fees will be payable in arrears at the end of each quarter and upon any termination of any commitment, in each case for the actual number of days elapsed over a 360-day year. EX-7 7 mm03-1907_sc13da3e710.txt EX. 7.10 EXHIBIT 7.10 ------------ LIMITED GUARANTEE Limited Guarantee, dated as of March 18, 2007 (this "Limited Guarantee"), by James R. Crane (the "Guarantor"), in favor of EGL, Inc. (the "Guaranteed Party"). 1. LIMITED GUARANTEE. To induce the Guaranteed Party to enter into an Agreement and Plan of Merger, dated as of the date hereof, (as amended, amended and restated, supplemented or otherwise modified from time to time, the "Merger Agreement"; capitalized terms used but not defined herein shall have the meanings given to such terms in the Merger Agreement), by and among Talon Holdings Corp., a Delaware corporation ("Parent"), Talon Acquisition Co., a Texas corporation ("Merger Sub") and the Guaranteed Party, pursuant to which Merger Sub will merge with and into the Guaranteed Party, the Guarantor hereby absolutely, unconditionally and irrevocably guarantees to the Guaranteed Party, the due and punctual performance and discharge of 51% of the payment obligations of Parent and Merger Sub under the last sentence of Section 5.10, Section 7.2(b) and Section 7.2(d) of the Merger Agreement (the "Obligations"); provided that in no event shall the Guarantor's liability under this Guarantee exceed $15,300,000 (the "Cap"), it being understood that this Limited Guarantee may not be enforced without giving effect to the Cap. In furtherance of the foregoing, the Guarantor acknowledges that his liability hereunder shall extend to 51% of the Obligations (subject to the Cap), and that the Guaranteed Party may, in its sole discretion, bring and prosecute a separate action or actions against the Guarantor for 51% of the Obligations (subject to the Cap), regardless of whether action is brought against Parent, Merger Sub or any other guarantor pursuant to a Limited Guarantee dated as of the date hereof to be entered into between the Guaranteed Party and such other guarantor (the "Other Guarantors") or whether Parent, Merger Sub or any Other Guarantor is joined in any such action or actions. 2. NATURE OF GUARANTEE. The Guaranteed Party shall not be obligated to file any claim relating to the Obligations in the event that Parent or Merger Sub becomes subject to a bankruptcy, reorganization or similar proceeding, and the failure of the Guaranteed Party to so file shall not affect the Guarantor's obligations hereunder. In the event that any payment to the Guaranteed Party in respect of the Obligations is rescinded or must otherwise be returned for any reason whatsoever, the Guarantor shall remain liable hereunder with respect to the Obligations as if such payment had not been made. This is an unconditional guarantee of payment and not of collectibility. 3. CHANGES IN OBLIGATIONS, CERTAIN WAIVERS. The Guarantor agrees that the Guaranteed Party may at any time and from time to time, without notice to or further consent of the Guarantor, extend the time of payment of any of the Obligations, and may also make any agreement with Parent, Merger Sub or with any other Person (including any Other Guarantor) interested in the transactions contemplated by the Merger Agreement, for the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, or for any modification of the terms thereof or of any agreement between the Guaranteed Party and Parent, Merger Sub or any such other Person without in any way impairing or affecting the Guarantor's obligations under this Limited Guarantee. The Guarantor agrees that the obligations of the Guarantor hereunder shall not be released or discharged, in whole or in part, or otherwise affected by (a) the failure of the Guaranteed Party to assert any claim or demand or to enforce any right or remedy against Parent, Merger Sub or any other Person interested in the transactions contemplated by the Merger Agreement (including any Other Guarantor); (b) any change in the time, place or manner of payment of any of the Obligations or any rescission, waiver, compromise, consolidation or other amendment or modification of any of the terms or provisions of the Merger Agreement or any other agreement evidencing, securing or otherwise executed in connection with any of the Obligations; (c) the addition, substitution or release of any Person interested in the transactions contemplated by the Merger Agreement (including any Other Guarantor); (d) any change in the corporate existence, structure or ownership of Parent, Merger Sub or any other Person interested in the transactions contemplated by the Merger Agreement (including any Other Guarantor); (e) any insolvency, bankruptcy, reorganization or other similar proceeding affecting Parent, Merger Sub or any other Person interested in the transactions contemplated by the Merger Agreement (including any Other Guarantor); (f) the existence of any claim, set-off or other right which the Guarantor may have at any time against Parent, Merger Sub or the Guaranteed Party, whether in connection with the Obligations or otherwise; or (g) the adequacy of any other means the Guaranteed Party may have of obtaining repayment of any of the Obligations. To the fullest extent permitted by law, the Guarantor hereby expressly waives any and all rights or defenses arising by reason of any law which would otherwise require any election of remedies by the Guaranteed Party. The Guarantor waives promptness, diligence, notice of the acceptance of this Limited Guarantee and of the Obligations, presentment, demand for payment, notice of non-performance, default, dishonor and protest, notice of any Obligations incurred and all other notices of any kind (except for notices to be provided to Parent, Merger Sub and Weil, Gotshal & Manges LLP in accordance with Section 8.7 of the Merger Agreement), all defenses which may be available by virtue of any valuation, stay, moratorium law or other similar law now or hereafter in effect, any right to require the marshalling of assets of Parent, Merger Sub or any other Person interested in the transactions contemplated by the Merger Agreement (including any Other Guarantor), and all suretyship defenses generally (other than fraud or willful misconduct by the Guaranteed Party or any of its Subsidiaries, defenses to the payment of the Obligations that are available to Parent or Merger Sub under the Merger Agreement or breach by the Guaranteed Party of this Limited Guarantee). The Guarantor acknowledges that he will receive substantial direct and indirect benefits from the transactions contemplated by the Merger Agreement and that the waivers set forth in this Limited Guarantee are knowingly made in contemplation of such benefits. The Guaranteed Party hereby covenants and agrees that it shall not institute, and shall cause its Affiliates that are under its control ("Controlled Affiliates") not to institute, any proceeding or bring any other claim arising under, or in connection with, the Merger Agreement or the transactions contemplated thereby, against the Guarantor or any of his former, current or future agents, Affiliates (other than Parent or Merger Sub) or employees, or against any of the former, current or future general or limited partners, members, managers or stockholders of the Guarantor or any Affiliate thereof (other than Parent or Merger Sub) or against any former, current or future directors, officers, agents, Affiliates, general or limited partners, members, managers or stockholders of any of the foregoing (other than Parent or Merger Sub), except for claims against the Guarantor under this Limited Guarantee and against Other Guarantors under their written limited guarantees, and the Guarantor hereby covenants and agrees that he shall not institute, and shall cause his respective Affiliates not to institute, any proceedings asserting that this Limited Guarantee is illegal, invalid or unenforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws affecting creditors' rights generally, and general equitable principles (whether 2 considered in a proceeding in equity or at law). The Guarantor hereby unconditionally and irrevocably agrees not to exercise any rights that he may now have or hereafter acquire against Parent, Merger Sub or any other Person interested in the transactions contemplated by the Merger Agreement (including any Other Guarantor) that arise from the existence, payment, performance, or enforcement of the Guarantor's obligations under or in respect of this Limited Guarantee or any other agreement in connection therewith, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Guaranteed Party against Parent, Merger Sub or such other Person, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from Parent, Merger Sub or such other Person, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until all of the Obligations and all other amounts payable under this Limited Guarantee shall have been paid in full in cash. If any amount shall be paid to the Guarantor in violation of the immediately preceding sentence at any time prior to the payment in full in cash of the Obligations and all other amounts payable under this Limited Guarantee, such amount shall be received and held in trust for the benefit of the Guaranteed Party, shall be segregated from other property and funds of the Guarantor and shall forthwith be paid or delivered to the Guaranteed Party in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to the Obligations and all other amounts payable under this Limited Guarantee, in accordance with the terms of the Merger Agreement, whether matured or unmatured, or to be held as collateral for any Obligations or other amounts payable under this Limited Guarantee thereafter arising. Notwithstanding anything to the contrary contained in this Limited Guarantee, the Guaranteed Party hereby agrees that to the extent Parent and Merger Sub are relieved in full of their obligations under the last sentence of Section 5.10, Section 7.2(b) and Section 7.2(d) of the Merger Agreement, the Guarantor shall be similarly relieved of his obligations under this Limited Guarantee. 4. NO WAIVER; CUMULATIVE RIGHTS. No failure on the part of the Guaranteed Party to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by the Guaranteed Party of any right, remedy or power hereunder preclude any other or future exercise of any right, remedy or power hereunder. Each and every right, remedy and power hereby granted to the Guaranteed Party or allowed it by law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by the Guaranteed Party at any time or from time to time. 5. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby represents and warrants that: (a) the execution, delivery and performance of this Limited Guarantee do not contravene any provision of any law, regulation, rule, decree, order, judgment or contractual restriction binding on the Guarantor or his assets; (b) all consents, approvals, authorizations, permits of, filings with and notifications to, any governmental authority necessary for the due execution, delivery and performance of this Limited Guarantee by the Guarantor have been obtained or made and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any governmental 3 authority or regulatory body is required in connection with the execution, delivery or performance of this Limited Guarantee; (c) this Limited Guarantee constitutes a legal, valid and binding obligation of the Guarantor enforceable against the Guarantor in accordance with its terms, subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws affecting creditors' rights generally, and (ii) general equitable principles (whether considered in a proceeding in equity or at law); and (d) the Guarantor has the financial capacity to pay and perform his obligations under this Limited Guarantee, and all funds necessary for the Guarantor to fulfill his obligations under this Limited Guarantee shall be available to the Guarantor for so long as this Limited Guarantee shall remain in effect in accordance with Section 8 hereof. 6. NO ASSIGNMENT. Neither the Guarantor nor the Guaranteed Party may assign his or its rights, interests or obligations hereunder to any other Person (except by operation of law) without the prior written consent of the Guaranteed Party (in the case of an assignment by the Guarantor) or the Guarantor (in the case of an assignment by the Guaranteed Party). 7. NOTICES. Any notice required to be given hereunder shall be sufficient if in writing, and sent by facsimile transmission (provided that any notice received by facsimile transmission or otherwise at the addressee's location on any Business Day after 5:00 p.m. (addressee's local time) shall be deemed to have been received at 9:00 a.m. (addressee's local time) on the next Business Day), by reliable overnight delivery service (with proof of service), hand delivery or certified or registered mail (return receipt requested and first-class postage prepaid), addressed as follows: (i) if to the Guaranteed Party, to it at: EGL, Inc. 15350 Vickery Drive Houston, Texas 77032 Telecopy: (281) 618-3287 Attention: General Counsel with a copy (which shall not constitute notice) to: Andrews Kurth LLP 600 Travis Street, Suite 4200 Houston, Texas 77002 Attention: Robert V. Jewell Fax: (713) 238-7135 4 (ii) if to the Guarantor, to him at: James R. Crane c/o EGL, Inc. 15340 Vickery Drive Houston, Texas 77032 with a copy (which shall not constitute notice) to: Weil, Gotshal & Manges LLP 100 Federal Street, 34th Floor Boston, MA 02110 Telecopy: (617) 772-8333 Attention: James R. Westra Weil, Gotshal & Manges LLP 200 Crescent Court, Suite 300 Dallas, TX 75201 Telecopy: (214) 746-7777 Attention: R. Jay Tabor 8. CONTINUING GUARANTEE. This Limited Guarantee shall remain in full force and effect and shall be binding on the Guarantor, his successors and assigns until the Obligations are satisfied in full. Notwithstanding the foregoing, this Limited Guarantee shall terminate and the Guarantor shall have no further obligations under this Limited Guarantee as of the earliest of (i) the Effective Time, (ii) the termination of the Merger Agreement in accordance with its terms by mutual consent of the parties or under circumstances in which Parent and Merger Sub would not be obligated to make any payments under Section 7.2(b) and (iii) the first anniversary of any termination of the Merger Agreement in accordance with its terms under circumstances in which Parent and Merger Sub would be obligated to make any payments under Section 7.2(b) if the Guaranteed Party has not presented a claim for payment of any Obligation to Parent and Merger Sub or any Guarantor (including the Other Guarantors) by such first anniversary. Notwithstanding the foregoing, in the event that the Guaranteed Party or any of its Controlled Affiliates asserts in any litigation or other proceeding that the provisions of Section 1 hereof limiting the Guarantor's liability to the Cap or the provisions of this Section 8 or Section 9 hereof are illegal, invalid or unenforceable in whole or in part, or asserting any theory of liability against the Guarantor or any Affiliates of the Guarantor with respect to the transactions contemplated by the Merger Agreement other than liability of the Guarantor under this Limited Guarantee (as limited by the provisions of Section 1), then (i) the obligations of the Guarantor under this Limited Guarantee shall terminate ab initio and be null and void, (ii) if the Guarantor has previously made any payments under this Limited Guarantee, he shall be entitled to recover such payments, and (iii) neither the Guarantor nor any Affiliate of any Guarantor shall have any liability to the Guaranteed Party with respect to the transactions contemplated by the Merger Agreement or under this Limited Guarantee; provided, however, that if the Guarantor asserts in any litigation or other proceeding that this Limited Guarantee is illegal, invalid or unenforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, 5 reorganization, moratorium or other similar laws affecting creditors' rights generally, and general equitable principles (whether considered in a proceeding in equity or at law), then, to the extent the Guaranteed Party prevails in such litigation or proceeding, the Guarantor shall pay on demand all reasonable fees and out of pocket expenses of the guaranteed Party in connection with such litigation or proceeding. 9. NO RECOURSE. The Guaranteed Party by its acceptance of the benefits hereof, covenants, agrees and acknowledges that no Person other than the Guarantor shall have any obligation hereunder and that no recourse hereunder or under any documents or instruments delivered in connection herewith shall be had against any former, current or future agent, Affiliate (other than Parent or Merger Sub) or employee of the Guarantor, against any former, current or future general or limited partner, member, manager or stockholder of the Guarantor or any Affiliate thereof (other than Parent or Merger Sub) or against any former, current or future director, officer, agent, Affiliate, employee, general or limited partner, member, manager or stockholder of any of the foregoing (other than Parent or Merger Sub), 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; provided, however, that this Limited Guarantee shall in no respect release or limit any obligations or liabilities of Guarantor or any other party under any confidentiality agreement entered into for the Guaranteed Party's benefit. The Guaranteed Party acknowledges and agrees that the only assets of Parent and Merger Sub are cash in a de minimus amount and that no additional funds are expected to be contributed to Parent or Merger Sub unless the Closing occurs. The Guaranteed Party further agrees that neither it nor any of its Controlled Affiliates have any right of recovery against the Guarantor or any of his former, current or future agents, Affiliates (other than Parent or Merger Sub), general or limited partners, members, managers or stockholders through Parent or Merger Sub or otherwise, whether by piercing of the corporate veil, by a claim on behalf of Parent or Merger Sub against the Guarantor or Parent's stockholders or Affiliates, or otherwise, except for the rights under this Limited Guarantee and its rights against Other Guarantors pursuant to the terms of their written limited guarantees delivered contemporaneously herewith. Recourse against the Guarantor under this Limited Guarantee shall be the exclusive remedy of the Guaranteed Party and its Affiliates against the Guarantor and any of his former, current or future agents or Affiliates in respect of any liabilities or obligations arising under, or in connection with, the Merger Agreement or the transactions contemplated thereby. The Guaranteed Party hereby covenants and agrees that it shall not institute, and it shall cause its Controlled Affiliates not to institute, any proceeding or bring any other claim arising under, or in connection with, the Merger Agreement or the transactions contemplated thereby, against the Guarantor or any of his former, current or future agents or Affiliates (other than Parent or Merger Sub), except for claims against the Guarantor under this Limited Guarantee. Except as contemplated under Section 6, nothing set forth in this Limited Guarantee shall affect or be construed to confer or give any Person other than the Guarantor and the Guaranteed Party (including any Person acting in a representative capacity) any rights or remedies against any Person. 10. GOVERNING LAW. This Guarantee and any dispute hereunder shall be governed by, and construed in accordance with, the laws of the State of New York. Each of the parties hereto (i) consents to submit himself or itself to the personal jurisdiction of any state or federal court sitting in the Borough of Manhattan of The City of New York in the event any dispute arises out of this Guarantee or any of the transactions contemplated by this Guarantee, (ii) agrees 6 that he or it will not attempt to deny or defeat such personal jurisdiction or venue by motion or other request for leave from any such court and (iii) agrees that he or it will not bring any action relating to this Guarantee or any of the transactions contemplated by this Guarantee in any court other than such courts sitting in the Borough of Manhattan of The City of New York. 11. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LIMITED GUARANTEE OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. 12. COUNTERPARTS. This Limited Guarantee may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same instrument. [Remainder of page intentionally left blank] 7 IN WITNESS WHEREOF, the Guarantor has executed this Limited Guarantee. /s/ James R. Crane --------------------------------------- James R. Crane [Limited Guarantee Signature Page] 8 IN WITNESS WHEREOF, the Guaranteed Party has caused this Limited Guarantee to be executed and delivered as of the date first written above by its officer thereunto duly authorized. EGL, INC. By: /s/ Dana Carabin ------------------------------------ Name: Dana Carabin Title: Secretary & General Counsel [Limited Guarantee Signature Page] 9 EX-7 8 mm03-1907_sc13da3e711.txt EX. 7.11 EXHIBIT 7.11 ------------ LIMITED GUARANTEE Limited Guarantee, dated as of March 18, 2007 (this "Limited Guarantee"), by Centerbridge Capital Partners, L.P., Centerbridge Capital Partners Strategic, L.P. and Centerbridge Capital Partners SBS, L.P. (collectively, the "Guarantor"), in favor of EGL, Inc. (the "Guaranteed Party"). 1. LIMITED GUARANTEE. To induce the Guaranteed Party to enter into an Agreement and Plan of Merger, dated as of the date hereof, (as amended, amended and restated, supplemented or otherwise modified from time to time, the "Merger Agreement"; capitalized terms used but not defined herein shall have the meanings given to such terms in the Merger Agreement), by and among Talon Holdings Corp., a Delaware corporation ("Parent"), Talon Acquisition Co., a Texas corporation ("Merger Sub") and the Guaranteed Party, pursuant to which Merger Sub will merge with and into the Guaranteed Party, the Guarantor hereby absolutely, unconditionally and irrevocably guarantees to the Guaranteed Party, the due and punctual performance and discharge of 32.7% of the payment obligations of Parent and Merger Sub under the last sentence of Section 5.10, Section 7.2(b) and Section 7.2(d) of the Merger Agreement (the "Obligations"); provided that in no event shall the Guarantor's liability under this Guarantee exceed $9,810,000 (the "Cap"), it being understood that this Limited Guarantee may not be enforced without giving effect to the Cap. In furtherance of the foregoing, the Guarantor acknowledges that its liability hereunder shall extend to 32.7% of the Obligations (subject to the Cap), and that the Guaranteed Party may, in its sole discretion, bring and prosecute a separate action or actions against the Guarantor for 32.7% of the Obligations (subject to the Cap), regardless of whether action is brought against Parent, Merger Sub or any other guarantor pursuant to a Limited Guarantee dated as of the date hereof to be entered into between the Guaranteed Party and such other guarantor (the "Other Guarantors") or whether Parent, Merger Sub or any Other Guarantor is joined in any such action or actions. 2. NATURE OF GUARANTEE. The Guaranteed Party shall not be obligated to file any claim relating to the Obligations in the event that Parent or Merger Sub becomes subject to a bankruptcy, reorganization or similar proceeding, and the failure of the Guaranteed Party to so file shall not affect the Guarantor's obligations hereunder. In the event that any payment to the Guaranteed Party in respect of the Obligations is rescinded or must otherwise be returned for any reason whatsoever, the Guarantor shall remain liable hereunder with respect to the Obligations as if such payment had not been made. This is an unconditional guarantee of payment and not of collectibility. 3. CHANGES IN OBLIGATIONS, CERTAIN WAIVERS. The Guarantor agrees that the Guaranteed Party may at any time and from time to time, without notice to or further consent of the Guarantor, extend the time of payment of any of the Obligations, and may also make any agreement with Parent, Merger Sub or with any other Person (including any Other Guarantor) interested in the transactions contemplated by the Merger Agreement, for the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, or for any modification of the terms thereof or of any agreement between the Guaranteed Party and Parent, Merger Sub or any such other Person without in any way impairing or affecting the Guarantor's obligations under this Limited Guarantee. The Guarantor agrees that the obligations of the Guarantor hereunder shall not be released or discharged, in whole or in part, or otherwise affected by (a) the failure of the Guaranteed Party to assert any claim or demand or to enforce any right or remedy against Parent, Merger Sub or any other Person interested in the transactions contemplated by the Merger Agreement (including any Other Guarantor); (b) any change in the time, place or manner of payment of any of the Obligations or any rescission, waiver, compromise, consolidation or other amendment or modification of any of the terms or provisions of the Merger Agreement or any other agreement evidencing, securing or otherwise executed in connection with any of the Obligations; (c) the addition, substitution or release of any Person interested in the transactions contemplated by the Merger Agreement (including any Other Guarantor); (d) any change in the corporate existence, structure or ownership of Parent, Merger Sub or any other Person interested in the transactions contemplated by the Merger Agreement (including any Other Guarantor); (e) any insolvency, bankruptcy, reorganization or other similar proceeding affecting Parent, Merger Sub or any other Person interested in the transactions contemplated by the Merger Agreement (including any Other Guarantor); (f) the existence of any claim, set-off or other right which the Guarantor may have at any time against Parent, Merger Sub or the Guaranteed Party, whether in connection with the Obligations or otherwise; or (g) the adequacy of any other means the Guaranteed Party may have of obtaining repayment of any of the Obligations. To the fullest extent permitted by law, the Guarantor hereby expressly waives any and all rights or defenses arising by reason of any law which would otherwise require any election of remedies by the Guaranteed Party. The Guarantor waives promptness, diligence, notice of the acceptance of this Limited Guarantee and of the Obligations, presentment, demand for payment, notice of non-performance, default, dishonor and protest, notice of any Obligations incurred and all other notices of any kind (except for notices to be provided to Parent, Merger Sub and Simpson Thacher & Bartlett LLP in accordance with Section 8.7 of the Merger Agreement), all defenses which may be available by virtue of any valuation, stay, moratorium law or other similar law now or hereafter in effect, any right to require the marshalling of assets of Parent, Merger Sub or any other Person interested in the transactions contemplated by the Merger Agreement (including any Other Guarantor), and all suretyship defenses generally (other than fraud or willful misconduct by the Guaranteed Party or any of its Subsidiaries, defenses to the payment of the Obligations that are available to Parent or Merger Sub under the Merger Agreement or breach by the Guaranteed Party of this Limited Guarantee). The Guarantor acknowledges that it will receive substantial direct and indirect benefits from the transactions contemplated by the Merger Agreement and that the waivers set forth in this Limited Guarantee are knowingly made in contemplation of such benefits. The Guaranteed Party hereby covenants and agrees that it shall not institute, and shall cause its Affiliates that are under its control ("Controlled Affiliates") not to institute, any proceeding or bring any other claim arising under, or in connection with, the Merger Agreement or the transactions contemplated thereby, against any Guarantor or any of its former, current or future directors, officers, agents, Affiliates (other than Parent or Merger Sub) or employees, or against any of the former, current or future general or limited partners, members, managers or stockholders of the Guarantor or any Affiliate thereof (other than Parent or Merger Sub) or against any former, current or future directors, officers, agents, Affiliates, general or limited partners, members, managers or stockholders of any of the foregoing (other than Parent or Merger Sub), except for claims against the Guarantor under this Limited Guarantee and against Other Guarantors under their written limited guarantees, and the Guarantor hereby covenants and agrees that it shall not institute, and shall cause its respective Affiliates not to institute, any proceedings asserting that this Limited Guarantee is illegal, invalid or unenforceable in accordance with its terms, subject to the effects of 2 bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws affecting creditors' rights generally, and general equitable principles (whether considered in a proceeding in equity or at law). The Guarantor hereby unconditionally and irrevocably agrees not to exercise any rights that it may now have or hereafter acquire against Parent, Merger Sub or any other Person interested in the transactions contemplated by the Merger Agreement (including any Other Guarantor) that arise from the existence, payment, performance, or enforcement of the Guarantor's obligations under or in respect of this Limited Guarantee or any other agreement in connection therewith, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Guaranteed Party against Parent, Merger Sub or such other Person, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from Parent, Merger Sub or such other Person, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until all of the Obligations and all other amounts payable under this Limited Guarantee shall have been paid in full in cash. If any amount shall be paid to the Guarantor in violation of the immediately preceding sentence at any time prior to the payment in full in cash of the Obligations and all other amounts payable under this Limited Guarantee, such amount shall be received and held in trust for the benefit of the Guaranteed Party, shall be segregated from other property and funds of the Guarantor and shall forthwith be paid or delivered to the Guaranteed Party in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to the Obligations and all other amounts payable under this Limited Guarantee, in accordance with the terms of the Merger Agreement, whether matured or unmatured, or to be held as collateral for any Obligations or other amounts payable under this Limited Guarantee thereafter arising. Notwithstanding anything to the contrary contained in this Limited Guarantee, the Guaranteed Party hereby agrees that to the extent Parent and Merger Sub are relieved in full of their obligations under the last sentence of Section 5.10, Section 7.2(b) and Section 7.2(d) of the Merger Agreement, the Guarantor shall be similarly relieved of its obligations under this Limited Guarantee. 4. NO WAIVER; CUMULATIVE RIGHTS. No failure on the part of the Guaranteed Party to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by the Guaranteed Party of any right, remedy or power hereunder preclude any other or future exercise of any right, remedy or power hereunder. Each and every right, remedy and power hereby granted to the Guaranteed Party or allowed it by law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by the Guaranteed Party at any time or from time to time. 5. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby represents and warrants that: (a) the execution, delivery and performance of this Limited Guarantee have been duly authorized by all necessary action and do not contravene any provision of the Guarantor's charter, partnership agreement, operating agreement or similar organizational documents or any law, regulation, rule, decree, order, judgment or contractual restriction binding on the Guarantor or its assets; 3 (b) all consents, approvals, authorizations, permits of, filings with and notifications to, any governmental authority necessary for the due execution, delivery and performance of this Limited Guarantee by the Guarantor have been obtained or made and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any governmental authority or regulatory body is required in connection with the execution, delivery or performance of this Limited Guarantee; (c) this Limited Guarantee constitutes a legal, valid and binding obligation of the Guarantor enforceable against the Guarantor in accordance with its terms, subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws affecting creditors' rights generally, and (ii) general equitable principles (whether considered in a proceeding in equity or at law); and (d) the Guarantor has the financial capacity to pay and perform its obligations under this Limited Guarantee, and all funds necessary for the Guarantor to fulfill its obligations under this Limited Guarantee shall be available to the Guarantor (or its assignee pursuant to Section 6 hereof) for so long as this Limited Guarantee shall remain in effect in accordance with Section 8 hereof. 6. NO ASSIGNMENT. Neither the Guarantor nor the Guaranteed Party may assign its rights, interests or obligations hereunder to any other Person (except by operation of law) without the prior written consent of the Guaranteed Party (in the case of an assignment by the Guarantor) or the Guarantor (in the case of an assignment by the Guaranteed Party); provided, however, the Guarantor shall be permitted to assign, in whole or in part, its rights and obligations hereunder to a new private equity fund formed after the date hereof, sponsored by an Affiliate of the Guarantor that certifies to the Guaranteed Party that it is capable of (i) making the representations and warranties set forth in Section 5 above and (ii) performing all of its obligations hereunder. 7. NOTICES. Any notice required to be given hereunder shall be sufficient if in writing, and sent by facsimile transmission (provided that any notice received by facsimile transmission or otherwise at the addressee's location on any Business Day after 5:00 p.m. (addressee's local time) shall be deemed to have been received at 9:00 a.m. (addressee's local time) on the next Business Day), by reliable overnight delivery service (with proof of service), hand delivery or certified or registered mail (return receipt requested and first-class postage prepaid), addressed as follows: (i) if to the Guaranteed Party, to it at: EGL, Inc. 15350 Vickery Drive Houston, Texas 77032 Telecopy: (281) 618-3287 Attention: General Counsel 4 with a copy (which shall not constitute notice) to: Andrews Kurth LLP 600 Travis Street, Suite 4200 Houston, Texas 77002 Attention: Robert V. Jewell Fax: (713) 238-7356 (ii) if to the Guarantor, to it at: Centerbridge Capital Partners, L.P. Centerbridge Capital Partners Strategic, L.P. Centerbridge Capital Partners SBS, L.P. c/o Centerbridge Partners, L.P. 31 West 52nd Street New York, New York 10019 Attention: Steven Price Fax: (212) 301-6501 with a copy (which shall not constitute notice) to: Simpson Thacher & Bartlett LLP 425 Lexington Ave. New York, New York 10017 Attention: Gary I. Horowitz Fax: (212) 455-2502 8. CONTINUING GUARANTEE. This Limited Guarantee shall remain in full force and effect and shall be binding on the Guarantor, its successors and assigns until the Obligations are satisfied in full. Notwithstanding the foregoing, this Limited Guarantee shall terminate and the Guarantor shall have no further obligations under this Limited Guarantee as of the earliest of (i) the Effective Time, (ii) the termination of the Merger Agreement in accordance with its terms by mutual consent of the parties or under circumstances in which Parent and Merger Sub would not be obligated to make any payments under Section 7.2(b) and (iii) the first anniversary of any termination of the Merger Agreement in accordance with its terms under circumstances in which Parent and Merger Sub would be obligated to make any payments under Section 7.2(b) if the Guaranteed Party has not presented a claim for payment of any Obligation to Parent and Merger Sub or any Guarantor (including the Other Guarantors) by such first anniversary. Notwithstanding the foregoing, in the event that the Guaranteed Party or any of its Controlled Affiliates asserts in any litigation or other proceeding that the provisions of Section 1 hereof limiting the Guarantor's liability to the Cap or the provisions of this Section 8 or Section 9 hereof are illegal, invalid or unenforceable in whole or in part, or asserting any theory of liability against the Guarantor or any Affiliates of the Guarantor with respect to the transactions contemplated by the Merger Agreement other than liability of the Guarantor under this Limited Guarantee (as limited by the provisions of Section 1), then (i) the obligations of the Guarantor under this Limited Guarantee shall terminate ab initio and be null and void, (ii) if the Guarantor has previously made any payments under this Limited Guarantee, it shall be entitled to recover such payments, and (iii) neither the 5 Guarantor nor any Affiliate of any Guarantor shall have any liability to the Guaranteed Party with respect to the transactions contemplated by the Merger Agreement or under this Limited Guarantee; provided, however, that if the Guarantor asserts in any litigation or other proceeding that this Limited Guarantee is illegal, invalid or unenforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws affecting creditors' rights generally, and general equitable principles (whether considered in a proceeding in equity or at law), then, to the extent the Guaranteed Party prevails in such litigation or proceeding, the Guarantor shall pay on demand all reasonable fees and out of pocket expenses of the guaranteed Party in connection with such litigation or proceeding. 9. NO RECOURSE. The Guaranteed Party by its acceptance of the benefits hereof, covenants, agrees and acknowledges that no Person other than the Guarantor shall have any obligation hereunder and that no recourse hereunder or under any documents or instruments delivered in connection herewith shall be had against any former, current or future director, officer, agent, Affiliate (other than Parent or Merger Sub) or employee of the Guarantor, against any former, current or future general or limited partner, member, manager or stockholder of the Guarantor or any Affiliate thereof (other than Parent or Merger Sub) or against any former, current or future director, officer, agent, Affiliate, employee, general or limited partner, member, manager or stockholder of any of the foregoing (other than Parent or Merger Sub), 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; provided, however, that this Limited Guarantee shall in no respect release or limit any obligations or liabilities of Guarantor or any other party under any confidentiality agreement entered into for the Guaranteed Party's benefit. The Guaranteed Party acknowledges and agrees that the only assets of Parent and Merger Sub are cash in a de minimus amount and that no additional funds are expected to be contributed to Parent or Merger Sub unless the Closing occurs. The Guaranteed Party further agrees that neither it nor any of its Controlled Affiliates have any right of recovery against the Guarantor or any of its former, current or future directors, officers, agents, Affiliates (other than Parent or Merger Sub), general or limited partners, members, managers or stockholders through Parent or Merger Sub or otherwise, whether by piercing of the corporate veil, by a claim on behalf of Parent or Merger Sub against the Guarantor or Parent's stockholders or Affiliates, or otherwise, except for the rights under this Limited Guarantee and its rights against Other Guarantors pursuant to the terms of their written limited guarantees delivered contemporaneously herewith. Recourse against the Guarantor under this Limited Guarantee shall be the exclusive remedy of the Guaranteed Party and its Affiliates against the Guarantor and any of its former, current or future directors, officers, agents, Affiliates, general or limited partners, members, managers or stockholders in respect of any liabilities or obligations arising under, or in connection with, the Merger Agreement or the transactions contemplated thereby. The Guaranteed Party hereby covenants and agrees that it shall not institute, and it shall cause its Controlled Affiliates not to institute, any proceeding or bring any other claim arising under, or in connection with, the Merger Agreement or the transactions contemplated thereby, against the Guarantor or any of its former, current or future directors, officers, agents, Affiliates (other than Parent or Merger Sub), general or limited partners, members, managers or stockholders except for claims against the Guarantor under this Limited Guarantee. Except as contemplated under Section 6, nothing set forth in this Limited Guarantee shall affect or be construed to confer or give any Person other than the Guarantor and the Guaranteed Party 6 (including any Person acting in a representative capacity) any rights or remedies against any Person. 10. GOVERNING LAW. This Guarantee and any dispute hereunder shall be governed by, and construed in accordance with, the laws of the State of New York. Each of the parties hereto (i) consents to submit itself to the personal jurisdiction of any state or federal court sitting in the Borough of Manhattan of The City of New York in the event any dispute arises out of this Guarantee or any of the transactions contemplated by this Guarantee, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction or venue by motion or other request for leave from any such court and (iii) agrees that it will not bring any action relating to this Guarantee or any of the transactions contemplated by this Guarantee in any court other than such courts sitting in the Borough of Manhattan of The City of New York. 11. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LIMITED GUARANTEE OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. 12. COUNTERPARTS. This Limited Guarantee may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same instrument. [Remainder of page intentionally left blank] 7 IN WITNESS WHEREOF, the Guarantor has caused this Limited Guarantee to be executed and delivered as of the date first written above by its officer thereunto duly authorized. CENTERBRIDGE CAPITAL PARTNERS, L.P. By: Centerbridge Associates, L.P., its general partner By: Centerbridge GP Investors, LLC, its general partner By: /s/Steven Price --------------------------------- Name: Steven Price Title: Senior Managing Director CENTERBRIDGE CAPITAL PARTNERS STRATEGIC, L.P. By: Centerbridge Associates, L.P., its general partner By: Centerbridge GP Investors, LLC, its general partner By: /s/Steven Price --------------------------------- Name: Steven Price Title: Senior Managing Director CENTERBRIDGE CAPITAL PARTNERS SBS, L.P. By: Centerbridge Associates, L.P., its general partner By: Centerbridge GP Investors, LLC, its general partner By: /s/Steven Price --------------------------------- Name: Steven Price Title: Senior Managing Director [Limited Guarantee Signature Page] 8 IN WITNESS WHEREOF, the Guaranteed Party has caused this Limited Guarantee to be executed and delivered as of the date first written above by its officer thereunto duly authorized. EGL, INC. By: /s/Dana Carabin -------------------------------- Name: Dana Carabin Title: Secretary & General Counsel [Limited Guarantee Signature Page] 9 EX-7 9 mm03-1907_sc13da3e712.txt EX. 7.12 EXHIBIT 7.12 ------------ LIMITED GUARANTEE Limited Guarantee, dated as of March 18, 2007 (this "Limited Guarantee"), by The Woodbridge Company Limited (the "Guarantor"), in favor of EGL, Inc. (the "Guaranteed Party"). 1. LIMITED GUARANTEE. To induce the Guaranteed Party to enter into an Agreement and Plan of Merger, dated as of the date hereof, (as amended, amended and restated, supplemented or otherwise modified from time to time, the "Merger Agreement"; capitalized terms used but not defined herein shall have the meanings given to such terms in the Merger Agreement), by and among Talon Holdings Corp., a Delaware corporation ("Parent"), Talon Acquisition Co., a Texas corporation ("Merger Sub") and the Guaranteed Party, pursuant to which Merger Sub will merge with and into the Guaranteed Party, the Guarantor hereby absolutely, unconditionally and irrevocably guarantees to the Guaranteed Party, the due and punctual performance and discharge of 16.3% of the payment obligations of Parent and Merger Sub under the last sentence of Section 5.10, Section 7.2(b) and Section 7.2(d) of the Merger Agreement (the "Obligations"); provided that in no event shall the Guarantor's liability under this Guarantee exceed $4,890,000 (the "Cap"), it being understood that this Limited Guarantee may not be enforced without giving effect to the Cap. In furtherance of the foregoing, the Guarantor acknowledges that its liability hereunder shall extend to 16.3% of the Obligations (subject to the Cap), and that the Guaranteed Party may, in its sole discretion, bring and prosecute a separate action or actions against the Guarantor for 16.3% of the Obligations (subject to the Cap), regardless of whether action is brought against Parent, Merger Sub or any other guarantor pursuant to a Limited Guarantee dated as of the date hereof to be entered into between the Guaranteed Party and such other guarantor (the "Other Guarantors") or whether Parent, Merger Sub or any Other Guarantor is joined in any such action or actions. 2. NATURE OF GUARANTEE. The Guaranteed Party shall not be obligated to file any claim relating to the Obligations in the event that Parent or Merger Sub becomes subject to a bankruptcy, reorganization or similar proceeding, and the failure of the Guaranteed Party to so file shall not affect the Guarantor's obligations hereunder. In the event that any payment to the Guaranteed Party in respect of the Obligations is rescinded or must otherwise be returned for any reason whatsoever, the Guarantor shall remain liable hereunder with respect to the Obligations as if such payment had not been made. This is an unconditional guarantee of payment and not of collectibility. 3. CHANGES IN OBLIGATIONS, CERTAIN WAIVERS. The Guarantor agrees that the Guaranteed Party may at any time and from time to time, without notice to or further consent of the Guarantor, extend the time of payment of any of the Obligations, and may also make any agreement with Parent, Merger Sub or with any other Person (including any Other Guarantor) interested in the transactions contemplated by the Merger Agreement, for the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, or for any modification of the terms thereof or of any agreement between the Guaranteed Party and Parent, Merger Sub or any such other Person without in any way impairing or affecting the Guarantor's obligations under this Limited Guarantee. The Guarantor agrees that the obligations of the Guarantor hereunder shall not be released or discharged, in whole or in part, or otherwise affected by (a) the failure of the Guaranteed Party to assert any claim or demand or to enforce any right or remedy against Parent, Merger Sub or any other Person interested in the transactions contemplated by the Merger Agreement (including any Other Guarantor); (b) any change in the time, place or manner of payment of any of the Obligations or any rescission, waiver, compromise, consolidation or other amendment or modification of any of the terms or provisions of the Merger Agreement or any other agreement evidencing, securing or otherwise executed in connection with any of the Obligations; (c) the addition, substitution or release of any Person interested in the transactions contemplated by the Merger Agreement (including any Other Guarantor); (d) any change in the corporate existence, structure or ownership of Parent, Merger Sub or any other Person interested in the transactions contemplated by the Merger Agreement (including any Other Guarantor); (e) any insolvency, bankruptcy, reorganization or other similar proceeding affecting Parent, Merger Sub or any other Person interested in the transactions contemplated by the Merger Agreement (including any Other Guarantor); (f) the existence of any claim, set-off or other right which the Guarantor may have at any time against Parent, Merger Sub or the Guaranteed Party, whether in connection with the Obligations or otherwise; or (g) the adequacy of any other means the Guaranteed Party may have of obtaining repayment of any of the Obligations. To the fullest extent permitted by law, the Guarantor hereby expressly waives any and all rights or defenses arising by reason of any law which would otherwise require any election of remedies by the Guaranteed Party. The Guarantor waives promptness, diligence, notice of the acceptance of this Limited Guarantee and of the Obligations, presentment, demand for payment, notice of non-performance, default, dishonor and protest, notice of any Obligations incurred and all other notices of any kind (except for notices to be provided to Parent, Merger Sub and Goodmans LLP in accordance with Section 8.7 of the Merger Agreement), all defenses which may be available by virtue of any valuation, stay, moratorium law or other similar law now or hereafter in effect, any right to require the marshalling of assets of Parent, Merger Sub or any other Person interested in the transactions contemplated by the Merger Agreement (including any Other Guarantor), and all suretyship defenses generally (other than fraud or willful misconduct by the Guaranteed Party or any of its Subsidiaries, defenses to the payment of the Obligations that are available to Parent or Merger Sub under the Merger Agreement or breach by the Guaranteed Party of this Limited Guarantee). The Guarantor acknowledges that it will receive substantial direct and indirect benefits from the transactions contemplated by the Merger Agreement and that the waivers set forth in this Limited Guarantee are knowingly made in contemplation of such benefits. The Guaranteed Party hereby covenants and agrees that it shall not institute, and shall cause its Affiliates that are under its control ("Controlled Affiliates") not to institute, any proceeding or bring any other claim arising under, or in connection with, the Merger Agreement or the transactions contemplated thereby, against any Guarantor or any of its former, current or future directors, officers, agents, Affiliates (other than Parent or Merger Sub) or employees, or against any of the former, current or future general or limited partners, members, managers or stockholders of the Guarantor or any Affiliate thereof (other than Parent or Merger Sub) or against any former, current or future directors, officers, agents, Affiliates, general or limited partners, members, managers or stockholders of any of the foregoing (other than Parent or Merger Sub), except for claims against the Guarantor under this Limited Guarantee and against Other Guarantors under their written limited guarantees, and the Guarantor hereby covenants and agrees that it shall not institute, and shall cause its respective Affiliates not to institute, any proceedings asserting that this Limited Guarantee is illegal, invalid or unenforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or 2 other similar laws affecting creditors' rights generally, and general equitable principles (whether considered in a proceeding in equity or at law). The Guarantor hereby unconditionally and irrevocably agrees not to exercise any rights that it may now have or hereafter acquire against Parent, Merger Sub or any other Person interested in the transactions contemplated by the Merger Agreement (including any Other Guarantor) that arise from the existence, payment, performance, or enforcement of the Guarantor's obligations under or in respect of this Limited Guarantee or any other agreement in connection therewith, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Guaranteed Party against Parent, Merger Sub or such other Person, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from Parent, Merger Sub or such other Person, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until all of the Obligations and all other amounts payable under this Limited Guarantee shall have been paid in full in cash. If any amount shall be paid to the Guarantor in violation of the immediately preceding sentence at any time prior to the payment in full in cash of the Obligations and all other amounts payable under this Limited Guarantee, such amount shall be received and held in trust for the benefit of the Guaranteed Party, shall be segregated from other property and funds of the Guarantor and shall forthwith be paid or delivered to the Guaranteed Party in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to the Obligations and all other amounts payable under this Limited Guarantee, in accordance with the terms of the Merger Agreement, whether matured or unmatured, or to be held as collateral for any Obligations or other amounts payable under this Limited Guarantee thereafter arising. Notwithstanding anything to the contrary contained in this Limited Guarantee, the Guaranteed Party hereby agrees that to the extent Parent and Merger Sub are relieved in full of their obligations under the last sentence of Section 5.10, Section 7.2(b) and Section 7.2(d) of the Merger Agreement, the Guarantor shall be similarly relieved of its obligations under this Limited Guarantee. 4. NO WAIVER; CUMULATIVE RIGHTS. No failure on the part of the Guaranteed Party to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by the Guaranteed Party of any right, remedy or power hereunder preclude any other or future exercise of any right, remedy or power hereunder. Each and every right, remedy and power hereby granted to the Guaranteed Party or allowed it by law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by the Guaranteed Party at any time or from time to time. 5. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby represents and warrants that: (a) the execution, delivery and performance of this Limited Guarantee have been duly authorized by all necessary action and do not contravene any provision of the Guarantor's charter, partnership agreement, operating agreement or similar organizational documents or any law, regulation, rule, decree, order, judgment or contractual restriction binding on the Guarantor or its assets; 3 (b) all consents, approvals, authorizations, permits of, filings with and notifications to, any governmental authority necessary for the due execution, delivery and performance of this Limited Guarantee by the Guarantor have been obtained or made and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any governmental authority or regulatory body is required in connection with the execution, delivery or performance of this Limited Guarantee; (c) this Limited Guarantee constitutes a legal, valid and binding obligation of the Guarantor enforceable against the Guarantor in accordance with its terms, subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws affecting creditors' rights generally, and (ii) general equitable principles (whether considered in a proceeding in equity or at law); and (d) the Guarantor has the financial capacity to pay and perform its obligations under this Limited Guarantee, and all funds necessary for the Guarantor to fulfill its obligations under this Limited Guarantee shall be available to the Guarantor (or its assignee pursuant to Section 6 hereof) for so long as this Limited Guarantee shall remain in effect in accordance with Section 8 hereof. 6. NO ASSIGNMENT. Neither the Guarantor nor the Guaranteed Party may assign its rights, interests or obligations hereunder to any other Person (except by operation of law) without the prior written consent of the Guaranteed Party (in the case of an assignment by the Guarantor) or the Guarantor (in the case of an assignment by the Guaranteed Party); provided, however, the Guarantor shall be permitted to assign, in whole or in part, its rights and obligations hereunder to another entity controlled directly or indirectly by the Guarantor that certifies to the Guaranteed Party that it is capable of (i) making the representations and warranties set forth in Section 5 above and (ii) performing all of its obligations hereunder. 7. NOTICES. Any notice required to be given hereunder shall be sufficient if in writing, and sent by facsimile transmission (provided that any notice received by facsimile transmission or otherwise at the addressee's location on any Business Day after 5:00 p.m. (addressee's local time) shall be deemed to have been received at 9:00 a.m. (addressee's local time) on the next Business Day), by reliable overnight delivery service (with proof of service), hand delivery or certified or registered mail (return receipt requested and first-class postage prepaid), addressed as follows: (i) if to the Guaranteed Party, to it at: EGL, Inc. 15350 Vickery Drive Houston, Texas 77032 Telecopy: (281) 618-3287 Attention: General Counsel 4 with a copy (which shall not constitute notice) to: Andrews Kurth LLP 600 Travis Street, Suite 4200 Houston, Texas 77002 Attention: Robert V. Jewell Fax: (713) 238-7356 (ii) if to the Guarantor, to it at: The Woodbridge Company Limited 65 Queen Street West Suite 2400 Toronto, Ontario Canada, M5H 2M8 Attention: Sarah Lerchs, Senior Counsel Fax: (416) 365-9293 with a copy (which shall not constitute notice) to: Goodmans LLP 250 Yonge Street Suite 2400, Box 24 Toronto, Ontario Canada, M5B 2M6 Attention: James A Riley Fax: (416) 979-1234 8. CONTINUING GUARANTEE. This Limited Guarantee shall remain in full force and effect and shall be binding on the Guarantor, its successors and assigns until the Obligations are satisfied in full. Notwithstanding the foregoing, this Limited Guarantee shall terminate and the Guarantor shall have no further obligations under this Limited Guarantee as of the earliest of (i) the Effective Time, (ii) the termination of the Merger Agreement in accordance with its terms by mutual consent of the parties or under circumstances in which Parent and Merger Sub would not be obligated to make any payments under Section 7.2(b) and (iii) the first anniversary of any termination of the Merger Agreement in accordance with its terms under circumstances in which Parent and Merger Sub would be obligated to make any payments under Section 7.2(b) if the Guaranteed Party has not presented a claim for payment of any Obligation to Parent and Merger Sub or any Guarantor (including the Other Guarantors) by such first anniversary. Notwithstanding the foregoing, in the event that the Guaranteed Party or any of its Controlled Affiliates asserts in any litigation or other proceeding that the provisions of Section 1 hereof limiting the Guarantor's liability to the Cap or the provisions of this Section 8 or Section 9 hereof are illegal, invalid or unenforceable in whole or in part, or asserting any theory of liability against the Guarantor or any Affiliates of the Guarantor with respect to the transactions contemplated by the Merger Agreement other than liability of the Guarantor under this Limited Guarantee (as limited by the provisions of Section 1), then (i) the obligations of the Guarantor under this Limited Guarantee shall terminate ab initio and be null and 5 void, (ii) if the Guarantor has previously made any payments under this Limited Guarantee, it shall be entitled to recover such payments, and (iii) neither the Guarantor nor any Affiliate of any Guarantor shall have any liability to the Guaranteed Party with respect to the transactions contemplated by the Merger Agreement or under this Limited Guarantee; provided, however, that if the Guarantor asserts in any litigation or other proceeding that this Limited Guarantee is illegal, invalid or unenforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws affecting creditors' rights generally, and general equitable principles (whether considered in a proceeding in equity or at law), then, to the extent the Guaranteed Party prevails in such litigation or proceeding, the Guarantor shall pay on demand all reasonable fees and out of pocket expenses of the guaranteed Party in connection with such litigation or proceeding. 9. NO RECOURSE. The Guaranteed Party by its acceptance of the benefits hereof, covenants, agrees and acknowledges that no Person other than the Guarantor shall have any obligation hereunder and that no recourse hereunder or under any documents or instruments delivered in connection herewith shall be had against any former, current or future director, officer, agent, Affiliate (other than Parent or Merger Sub) or employee of the Guarantor, against any former, current or future general or limited partner, member, manager or stockholder of the Guarantor or any Affiliate thereof (other than Parent or Merger Sub) or against any former, current or future director, officer, agent, Affiliate, employee, general or limited partner, member, manager or stockholder of any of the foregoing (other than Parent or Merger Sub), 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; provided, however, that this Limited Guarantee shall in no respect release or limit any obligations or liabilities of Guarantor or any other party under any confidentiality agreement entered into for the Guaranteed Party's benefit. The Guaranteed Party acknowledges and agrees that the only assets of Parent and Merger Sub are cash in a de minimus amount and that no additional funds are expected to be contributed to Parent or Merger Sub unless the Closing occurs. The Guaranteed Party further agrees that neither it nor any of its Controlled Affiliates have any right of recovery against the Guarantor or any of its former, current or future directors, officers, agents, Affiliates (other than Parent or Merger Sub), general or limited partners, members, managers or stockholders through Parent or Merger Sub or otherwise, whether by piercing of the corporate veil, by a claim on behalf of Parent or Merger Sub against the Guarantor or Parent's stockholders or Affiliates, or otherwise, except for the rights under this Limited Guarantee and its rights against Other Guarantors pursuant to the terms of their written limited guarantees delivered contemporaneously herewith. Recourse against the Guarantor under this Limited Guarantee shall be the exclusive remedy of the Guaranteed Party and its Affiliates against the Guarantor and any of its former, current or future directors, officers, agents, Affiliates, general or limited partners, members, managers or stockholders in respect of any liabilities or obligations arising under, or in connection with, the Merger Agreement or the transactions contemplated thereby. The Guaranteed Party hereby covenants and agrees that it shall not institute, and it shall cause its Controlled Affiliates not to institute, any proceeding or bring any other claim arising under, or in connection with, the Merger Agreement or the transactions contemplated thereby, against the Guarantor or any of its former, current or future directors, officers, agents, Affiliates (other than Parent or Merger Sub), general or limited partners, members, managers or stockholders except for claims against the Guarantor under this Limited Guarantee. Except as contemplated under Section 6 6, nothing set forth in this Limited Guarantee shall affect or be construed to confer or give any Person other than the Guarantor and the Guaranteed Party (including any Person acting in a representative capacity) any rights or remedies against any Person. 10. GOVERNING LAW. This Guarantee and any dispute hereunder shall be governed by, and construed in accordance with, the laws of the State of New York. Each of the parties hereto (i) consents to submit itself to the personal jurisdiction of any state or federal court sitting in the Borough of Manhattan of The City of New York in the event any dispute arises out of this Guarantee or any of the transactions contemplated by this Guarantee, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction or venue by motion or other request for leave from any such court and (iii) agrees that it will not bring any action relating to this Guarantee or any of the transactions contemplated by this Guarantee in any court other than such courts sitting in the Borough of Manhattan of The City of New York. 11. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LIMITED GUARANTEE OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. 12. COUNTERPARTS. This Limited Guarantee may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same instrument. [Remainder of page intentionally left blank] 7 IN WITNESS WHEREOF, the Guarantor has caused this Limited Guarantee to be executed and delivered as of the date first written above by its officer thereunto duly authorized. THE WOODBRIDGE COMPANY LIMITED By: /s/ Sarah Lerchs ------------------------------------ Name: Sarah Lerchs Title: Senior Counsel [Limited Guarantee Signature Page] 8 IN WITNESS WHEREOF, the Guaranteed Party has caused this Limited Guarantee to be executed and delivered as of the date first written above by its officer thereunto duly authorized. EGL, INC. By: /s/Dana Carabin ---------------------------------- Name: Dana Carabin Title: Secretary & General Counsel [Limited Guarantee Signature Page] 9 EX-7 10 mm03-1907_sc13da3e713.txt EX. 7.13 EXHIBIT 7.13 ------------ EGL, INC. ENTERS INTO AGREEMENT TO SELL TO INVESTOR GROUP FOR $38.00 PER SHARE HOUSTON, March 19, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- EGL, Inc. (Nasdaq: EAGL) ("EGL" or the "Company"), today announced it has signed a definitive merger agreement under which James R. Crane, EGL's largest shareholder, Chief Executive Officer and Chairman of the Board, together with investment funds affiliated with Centerbridge Partners, L.P. and The Woodbridge Company Limited ("Investor Group") will acquire the Company in a transaction valued at approximately $1.7 billion. Under the terms of the agreement, EGL's shareholders will receive $38.00 in cash for each share of EGL common stock they hold. The board of directors of EGL, on the unanimous recommendation of a special committee comprised entirely of independent directors, has approved the agreement and will recommend that EGL's shareholders approve the merger. The purchase price represents a premium of approximately 27 percent over $29.78, the closing price of EGL stock on December 29, 2006, the last trading day before an initial proposal was made to take EGL private. Crane, who will continue as Chairman and CEO following the close of the transaction, will reinvest all of his 7,065,063 shares and has entered into a voting agreement whereby he has agreed to vote his shares in favor of the merger. "We are proud to partner with this distinguished group of private equity firms comprised of individuals with outstanding reputations and proven records of success. The Company remains fully committed to all of its current development plans as scheduled," said James R. Crane, Chief Executive Officer of the Company. "We believe EGL is a uniquely well positioned business with its global footprint and broad suite of freight forwarding and logistics service offerings. We also look forward to partnering with Jim Crane and the senior management team to help them continue on their long and distinguished track record of leadership and success in the industry," said Steven Price, Senior Managing Director at Centerbridge. The transaction is expected to be completed by second or third quarter of 2007, subject to receipt of shareholder approval and regulatory approvals, as well as the satisfaction of other customary closing conditions. The transaction will be financed through a combination of equity contributed by the Investor Group, and debt financing provided by The Woodbridge Company Limited and affiliates of Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wachovia Corporation. There is no financing condition to the obligation of the Investor Group to consummate the transaction. Deutsche Bank Securities Inc. is acting as financial advisor to the special committee, and has delivered a fairness opinion. Andrews Kurth LLP is acting as legal advisor to the special committee. Merrill Lynch, Pierce, Fenner & Smith Incorporated and Sagent Advisors are acting as financial advisors to the Investor Group. Weil, Gotshal and Manges LLP and Simpson Thacher & Bartlett LLP are acting as legal advisors to Jim Crane and the Investor Group. Baker Botts L.L.P. is acting as legal advisor to EGL. Founded in 1984, Houston-based EGL, Inc. operates under the name EGL Eagle Global Logistics. EGL is a leading global transportation, supply chain management and information services company dedicated to providing superior flexibility and fewer shipping restrictions on a price competitive basis. With 2006 revenues of $3.2 billion, EGL's services include air and ocean freight forwarding, customs brokerage, local pickup and delivery service, materials management, warehousing, trade facilitation and procurement, and integrated logistics and supply chain management services. The Company's shares are traded on the NASDAQ Global Select Market under the symbol "EAGL". Centerbridge is a $3.2 billion private investment firm focused on making private equity investments in companies with leading management teams and well positioned businesses. The limited partners of Centerbridge include a variety of institutional investors, including many of the world's most prominent university endowments, pension funds and charitable trusts. Centerbridge has a broad mandate to opportunistically invest in and foster the growth of companies in a variety of industries in which its investment professionals have extensive experience, including transportation and logistics. Centerbridge was founded in 2006 by Jeffrey Aronson and Mark Gallogly. The Woodbridge Company Limited is the primary investment vehicle for the Thomson family. It has a controlling interest in The Thomson Corporation, a world leader in providing integrated information solutions. Based in Toronto, Canada, Woodbridge also has interests in information technology, media, real estate, publishing and a portfolio of private equity investments. Statements included in this news release regarding the consummation of the merger, the financing of the merger, timing and effects of the merger, regulatory approvals and other statements that are not historical facts, are forward looking statements. These statements involve risks and uncertainties including, but not limited to, market conditions, availability and terms of any financing, actions by regulatory authorities, the Company's financial results and performance, consummation of financing, satisfaction of closing conditions, actions by any other bidder and other factors detailed in risk factors and elsewhere in the Company's Annual Reports on Form 10-K and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize (or the consequences of such a development worsen), or should underlying assumptions prove incorrect, actual outcomes may vary materially from those forecasted or expected. The Company disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise. Important Additional Information Regarding the Merger will be Filed with the SEC: In connection with the proposed Merger, the Company will file a proxy statement with the Securities and Exchange Commission (the "SEC"). INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER AND THE PARTIES TO THE MERGER. Investors and security holders may obtain a free copy of the proxy statement (when available) and other relevant documents filed with the SEC from the SEC's website at http://www.sec.gov. The Company's security holders and other interested parties will also be able to obtain, without charge, a copy of the proxy statement and other relevant documents (when available) by directing a request by mail or telephone to Investor Relations, EGL, Inc., 15350 Vickery Drive, Houston, Texas 77032, telephone (218)618-3100, or from the Company's website, http://www.eaglegl.com. The Company and its directors, executive officers and other members of its management and employees (including, without limitation, Mr. Crane) may be deemed to be participants in the solicitation of proxies from the Company's shareholders with respect to the Merger. Information about the Company's directors and executive officers and their ownership of the Company's common stock is set forth in the proxy statement for the Company's 2006 Annual Meeting of Shareholders, which was filed with the SEC on April 14, 2006. Shareholders and investors may obtain additional information regarding the interests of the Company and its directors and executive officers in the Merger, which may be different than those of the Company's shareholders generally, by reading the proxy statement and other relevant documents regarding the Merger, which will be filed with the SEC. EX-7 11 mm03-1907_sc13da3e714.txt EX. 7.14 EXHIBIT 7.14 ------------ [EXECUTION COPY] AGREEMENT AND PLAN OF MERGER among Talon Holdings Corp., Talon Acquisition Co. and EGL, Inc. Dated as of March 18, 2007 TABLE OF CONTENTS PAGE ARTICLE I THE MERGER.........................................................2 Section 1.1 The Merger....................................................2 Section 1.2 Closing.......................................................2 Section 1.3 Effective Time................................................2 Section 1.4 Effects of the Merger.........................................2 Section 1.5 Articles of Incorporation and Bylaws of the Surviving Corporation...................................................2 Section 1.6 Directors.....................................................3 Section 1.7 Officers......................................................3 ARTICLE II CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES.....................3 Section 2.1 Effect on Capital Stock.......................................3 Section 2.2 Exchange of Certificates......................................5 Section 2.3 Timing of Equity Rollover.....................................7 ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................7 Section 3.1 Qualification, Organization, Subsidiaries, etc................7 Section 3.2 Capital Stock.................................................8 Section 3.3 Subsidiaries.................................................10 Section 3.4 Corporate Authority Relative to This Agreement; No Violation....................................................10 Section 3.5 Reports and Financial Statements.............................11 Section 3.6 Internal Controls and Procedures.............................12 Section 3.7 No Undisclosed Liabilities...................................12 Section 3.8 Compliance with Law; Permits.................................12 Section 3.9 Environmental Laws and Regulations...........................13 Section 3.10 Employee Benefit Plans.......................................14 Section 3.11 Interested Party Transactions................................16 Section 3.12 Absence of Certain Changes or Events.........................16 Section 3.13 Investigations; Litigation...................................17 Section 3.14 Proxy Statement; Other Information...........................17 Section 3.15 Tax Matters..................................................17 Section 3.16 Labor Matters................................................19 Section 3.17 Intellectual Property........................................20 Section 3.18 Property.....................................................20 Section 3.19 Insurance....................................................20 Section 3.20 Opinion of Financial Advisor.................................21 Section 3.21 Required Vote of the Company Shareholders....................21 Section 3.22 Material Contracts...........................................21 Section 3.23 Finders or Brokers...........................................21 Section 3.24 State Takeover Statutes; Rights Plan.........................22 Section 3.25 Disclaimer...................................................22 i TABLE OF CONTENTS (CONTINUED) PAGE ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB...........23 Section 4.1 Qualification; Organization..................................23 Section 4.2 Corporate Authority Relative to This Agreement; No Violation....................................................23 Section 4.3 Proxy Statement; Other Information...........................24 Section 4.4 Financing....................................................24 Section 4.5 Ownership and Operations of Merger Sub.......................25 Section 4.6 Finders or Brokers...........................................25 Section 4.7 Ownership of Shares..........................................26 Section 4.8 Certain Arrangements.........................................26 Section 4.9 Investigations; Litigation...................................26 Section 4.10 Guarantees...................................................26 Section 4.11 No Other Information.........................................26 Section 4.12 Access to Information; Disclaimer............................26 Section 4.13 Solvency.....................................................27 ARTICLE V COVENANTS AND AGREEMENTS..........................................27 Section 5.1 Conduct of Business by the Company and Parent................27 Section 5.2 Access to Information........................................31 Section 5.3 No Solicitation..............................................32 Section 5.4 Filings; Other Actions.......................................34 Section 5.5 Stock Options and Other Stock-Based Awards; Employee Matters......................................................35 Section 5.6 Efforts......................................................37 Section 5.7 Takeover Statute.............................................39 Section 5.8 Public Announcements.........................................39 Section 5.9 Indemnification and Insurance................................40 Section 5.10 Financing....................................................42 Section 5.11 Shareholder Litigation.......................................43 Section 5.12 Notification of Certain Matters..............................43 Section 5.13 Rule 16b-3...................................................43 Section 5.14 Rights Plan..................................................44 Section 5.15 Acquisition of Shares........................................44 Section 5.16 Control of Operations........................................44 Section 5.17 Notes and Amounts Outstanding Under Credit Agreement.........44 ARTICLE VI CONDITIONS TO THE MERGER..........................................44 Section 6.1 Conditions to Each Party's Obligation to Effect the Merger.......................................................44 Section 6.2 Conditions to Obligation of the Company to Effect the Merger.......................................................45 Section 6.3 Conditions to Obligation of Parent and Merger Sub to Effect the Merger............................................45 Section 6.4 Frustration of Conditions....................................46 ii TABLE OF CONTENTS (CONTINUED) PAGE ARTICLE VII TERMINATION.......................................................46 Section 7.1 Termination or Abandonment...................................46 Section 7.2 Termination Fee; Expenses....................................48 ARTICLE VIII MISCELLANEOUS..................................................51 Section 8.1 No Survival of Representations and Warranties................51 Section 8.2 Expenses.....................................................51 Section 8.3 Counterparts; Effectiveness..................................51 Section 8.4 Governing Law................................................51 Section 8.5 Jurisdiction; Enforcement....................................51 Section 8.6 WAIVER OF JURY TRIAL.........................................52 Section 8.7 Notices......................................................52 Section 8.8 Assignment; Binding Effect...................................54 Section 8.9 Severability.................................................54 Section 8.10 Entire Agreement; No Third-Party Beneficiaries...............54 Section 8.11 Amendments; Waivers..........................................54 Section 8.12 Headings.....................................................55 Section 8.13 Interpretation...............................................55 Section 8.14 No Recourse..................................................55 Section 8.15 Determinations by the Company................................55 Section 8.16 Certain Definitions..........................................55 iii AGREEMENT AND PLAN OF MERGER, dated as of March 18, 2007 (this "Agreement"), among Talon Holdings Corp., a Delaware corporation ("Parent"), Talon Acquisition Co., a Texas corporation and a direct wholly-owned subsidiary of Parent ("Merger Sub"), and EGL, Inc., a Texas corporation (the "Company"). W I T N E S S E T H : - - - - - - - - - - WHEREAS, the parties intend that Merger Sub be merged with and into the Company, with the Company surviving that merger on the terms and subject to the conditions set forth in this Agreement (the "Merger"); WHEREAS, the Board of Directors of the Company, acting upon the unanimous recommendation of the Special Committee, has (i) determined that it is in the best interests of the Company and its shareholders, and declared it advisable, to enter into this Agreement, (ii) approved the execution, delivery and performance by the Company of this Agreement and the Voting Agreement (as defined below) and the consummation of the transactions contemplated hereby and thereby, including the Merger, and (iii) resolved to recommend approval of this Agreement by the shareholders of the Company; WHEREAS, the Board of Directors of Merger Sub and Parent have each unanimously approved this Agreement and declared it advisable for Merger Sub and Parent, respectively, to enter into this Agreement; WHEREAS, certain existing shareholders of the Company desire to contribute Shares (as hereinafter defined) to Parent immediately prior to the Effective Time (as hereinafter defined) in exchange for common stock of Parent; WHEREAS, concurrently with the execution of this Agreement, as a condition and inducement to Parent and Merger Sub's willingness to enter into this Agreement, Parent, Merger Sub and certain shareholders of the Company are entering into a voting agreement, of even date herewith (the "Voting Agreement") pursuant to which such shareholders have agreed, subject to the terms thereof, to vote their respective Shares (as defined below) in favor of approval of this Agreement; WHEREAS, concurrently with the execution of this Agreement, and as a condition and inducement to the Company's willingness to enter into this Agreement, each of (i) Centerbridge Capital Partners, L.P, Centerbridge Capital Partners Strategic, L.P. and Centerbridge Capital Partners SBS, L.P., (ii) The Woodbridge Company Limited and (iii) James R. Crane (together, the "Guarantors") has provided a guarantee (together, the "Guarantees") in favor of the Company, which are attached to Section 4.10 of the Parent Disclosure Schedule, with respect to the performance by Parent and Merger Sub, respectively, of their obligations under this Agreement; and WHEREAS, Parent, Merger Sub and the Company desire to make certain representations, warranties, covenants and agreements in connection with the Merger and the transactions contemplated by this Agreement and also to prescribe certain conditions to the Merger as specified herein. NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements contained herein, and intending to be legally bound hereby, Parent, Merger Sub and the Company hereby agree as follows: ARTICLE I THE MERGER Section 1.1 The Merger. At the Effective Time (as hereinafter defined), upon the terms and subject to the conditions set forth in this Agreement and in accordance with the applicable provisions of the Texas Business Corporation Act (the "TBCA") and the Texas Business Organizations Code (the "TBOC"), Merger Sub shall be merged with and into the Company, whereupon the separate corporate existence of Merger Sub shall cease, and the Company shall continue as the surviving company in the Merger (the "Surviving Corporation") and a direct wholly owned subsidiary of Parent. Section 1.2 Closing. The closing of the Merger (the "Closing") shall take place at the offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York, at 10:00 a.m., local time, on a date to be specified by the parties (the "Closing Date") which shall be no later than the fifth Business Day after the satisfaction or waiver (to the extent permitted by applicable Law (as hereinafter defined)) of the conditions set forth in Article VI (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions), or at such other place, date and time as the Company and Parent may agree in writing; provided, that at the direction of Parent the Closing can be delayed to the last day of the then current interest period of the Company's floating rate senior secured notes (the "Notes") in which the conditions set forth in Article VI would be satisfied or waived. Section 1.3 Effective Time. On the Closing Date, the Company shall cause the Merger to be consummated by executing and filing articles of merger (the "Articles of Merger") with the Secretary of State of the State of Texas in accordance with Article 5.04 of the TBCA and Section 10.153 of the TBOC, as required. The Merger shall become effective at such time as the Articles of Merger are duly filed with the Secretary of State of the State of Texas and a certificate of merger is issued by the Secretary of State of the State of Texas, or at such later date or time as may be agreed by Parent and the Company in writing and specified in the Articles of Merger in accordance with the TBCA and TBOC (such time as the Merger becomes effective is referred to herein as the "Effective Time"). Section 1.4 Effects of the Merger. The Merger shall have the effects set forth in this Agreement and the applicable provisions of the TBCA and TBOC. Section 1.5. Articles of Incorporation and Bylaws of the Surviving Corporation. (a) The articles of incorporation of the Company, as in effect immediately prior to the Effective Time, shall be the articles of incorporation of the Surviving Corporation until thereafter amended in accordance with the provisions thereof, hereof and applicable Law, in each case consistent with the obligations set forth in Section 5.9. -2- (b) The bylaws of Merger Sub as in effect immediately prior to the Effective Time, shall be the bylaws of the Surviving Corporation until thereafter amended in accordance with the provisions thereof, hereof and applicable Law, in each case consistent with the obligations set forth in Section 5.9. Section 1.6 Directors. Subject to applicable Law, the directors of Merger Sub immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal. Section 1.7 Officers. The officers of the Company immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal. ARTICLE II CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES Section 2.1 Effect on Capital Stock. At the Effective Time, by virtue of the Merger and without any action on the part of the Company, Merger Sub or the holders of any securities of the Company or Merger Sub: (a) Conversion of Company Common Stock. Subject to Sections 2.1(b), 2.1(d) and 2.1(e), each issued and outstanding share of common stock, par value $0.001 per share, of the Company outstanding immediately prior to the Effective Time (such shares, collectively, "Company Common Stock," and each, a "Share"), other than any Shares held by any direct or indirect wholly-owned subsidiary of the Company, which Shares shall remain outstanding except that the number of such Shares shall be appropriately adjusted in the Merger (the "Remaining Shares"), any Cancelled Shares (as defined, and to the extent provided in, Section 2.1(b)) and any Dissenting Shares (as defined, and to the extent provided in, Section 2.1(e)) shall thereupon be converted automatically into and shall thereafter represent the right to receive $38.00 in cash (the "Merger Consideration"). All Shares that have been converted into the right to receive the Merger Consideration as provided in this Section 2.1 shall be automatically cancelled and shall cease to exist, and the holders of certificates which immediately prior to the Effective Time represented such Shares shall cease to have any rights with respect to such Shares other than the right to receive the Merger Consideration. (b) Parent and Merger Sub-Owned Shares. Each Share that is owned, directly or indirectly, by Parent or Merger Sub immediately prior to the Effective Time (including all Shares acquired pursuant to the Rollover Commitments) or held by the Company immediately prior to the Effective Time (in each case, other than any such Shares held on behalf of third parties) (the "Cancelled Shares") shall, by virtue of the Merger and without any action on the part of the holder thereof, be cancelled and retired and shall cease to exist, and no consideration shall be delivered in exchange for such cancellation and retirement. -3- (c) Conversion of Merger Sub Common Stock. At the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof, each share of common stock, par value $0.01 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and become one validly issued, fully paid and nonassessable share of common stock, par value $0.001 per share, of the Surviving Corporation and shall with the Remaining Shares constitute the only outstanding shares of capital stock of the Surviving Corporation. From and after the Effective Time, all certificates representing the common stock of Merger Sub shall be deemed for all purposes to represent the number of shares of common stock of the Surviving Corporation into which they were converted in accordance with the immediately preceding sentence. (d) Adjustments. If at any time during the period between the date of this Agreement and the Effective Time, any change in the outstanding shares of capital stock of the Company, or securities convertible or exchangeable into or exercisable for shares of capital stock, shall occur as a result of any reclassification, recapitalization, stock split (including a reverse stock split) or subdivision or combination, exchange or readjustment of shares, or any stock dividend or stock distribution with a record date during such period, merger, issuer tender or exchange offer, or other similar transaction, the Merger Consideration shall be equitably adjusted to reflect such change; provided that nothing herein shall be construed to permit the Company to take any action with respect to its securities that is prohibited by the terms of this Agreement. (e) Dissenters' Rights. Notwithstanding anything in this Agreement to the contrary, shares of Company Common Stock that are issued and outstanding immediately prior to the Effective Time and which are held by a shareholder who did not vote in favor of the Merger (or consent thereto in writing) and who is entitled to demand and properly demands the fair value of such shares pursuant to, and who complies in all respects with, the provisions of Articles 5.12 and 5.13 of the TBCA (the "Dissenting Shareholders"), shall not be converted into or be exchangeable for the right to receive the Merger Consideration (the "Dissenting Shares," and together with the Cancelled Shares, the "Excluded Shares"), but instead such holder shall be entitled to payment of the fair value of such shares in accordance with the provisions of Articles 5.12 and 5.13 of the TBCA (and at the Effective Time, such Dissenting Shares shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and such holder shall cease to have any rights with respect thereto, except the right to receive the fair value of such Dissenting Shares in accordance with the provisions of Articles 5.12 and 5.13 of the TBCA), unless and until such holder shall have failed to perfect or shall have effectively withdrawn or lost rights to receive the fair value of such shares of Company Common Stock under the TBCA. If any Dissenting Shareholder shall have failed to perfect or shall have effectively withdrawn or lost such right, such holder's shares of Company Common Stock shall thereupon be treated as if they had been converted into and become exchangeable for the right to receive, as of the Effective Time, the Merger Consideration for each such share of Company Common Stock, in accordance with Section 2.1(a), without any interest thereon. The Company shall give Parent (i) prompt notice of any written demands to exercise dissenter's rights in respect of any shares of Company Common Stock, attempted withdrawals of such demands and any other instruments served pursuant to the TBCA and received by the Company relating to shareholders' dissenter's rights and (ii) the opportunity to participate in negotiations and proceedings with respect to demands for fair value under the TBCA. The Company shall not, except with the prior written -4- consent of Parent, voluntarily make any payment with respect to, or settle, or offer or agree to settle, any such demand for payment. Any portion of the Merger Consideration made available to the Paying Agent pursuant to Section 2.2 to pay for shares of Company Common Stock for which dissenter's rights have been perfected shall be returned to Parent upon demand. Section 2.2 Exchange of Certificates. (a) Paying Agent. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, with a U.S. bank or trust company that shall be appointed by Parent and approved by the Company in writing (such approval not to be unreasonably withheld) to act as a paying agent hereunder (the "Paying Agent"), in trust for the benefit of holders of the Shares, the Company Stock Options (as hereinafter defined) and the Company Stock-Based Awards (as hereinafter defined) cash in U.S. dollars sufficient to pay (i) the aggregate Merger Consideration in exchange for all of the Shares outstanding immediately prior to the Effective Time (other than the Excluded Shares and the Remaining Shares), payable upon due surrender of the certificates that immediately prior to the Effective Time represented Shares ("Certificates") (or effective affidavits of loss in lieu thereof) or non-certificated Shares represented by book-entry ("Book-Entry Shares") pursuant to the provisions of this Article II and (ii) the Option and Stock-Based Consideration (as hereinafter defined) payable pursuant to Section 5.5 (such cash referred to in subsections (a)(i) and (a)(ii) being hereinafter referred to as the "Exchange Fund"). The Exchange Fund shall not be used for any other purpose. (b) Payment Procedures. (i) As soon as reasonably practicable after the Effective Time and in any event not later than the fifth Business Day following the Effective Time, the Paying Agent shall mail (x) to each holder of record of Shares whose Shares were converted into the Merger Consideration pursuant to Section 2.1, (A) a letter of transmittal (which shall be in customary form and shall specify that delivery shall be effected, and risk of loss and title to Certificates shall pass, only upon delivery of Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Shares to the Paying Agent and shall be in such form and have such other provisions as Parent and the Company shall reasonably determine) and (B) instructions for use in effecting the surrender of Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Shares in exchange for the Merger Consideration and (y) to each holder of a Company Stock Option or a Company Stock-Based Award, a check in an amount due and payable to such holder pursuant to Section 5.5 hereof in respect of such Company Stock Option or Company Stock-Based Award. (ii) Upon surrender of Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Shares to the Paying Agent together with such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, and such other documents as may customarily be required by the Paying Agent, the holder of such Certificates or Book-Entry Shares shall be entitled to receive in exchange therefor a check in an amount equal to the product of (x) the number of Shares represented by such holder's properly surrendered Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Shares multiplied by (y) the Merger Consideration. No interest will be paid or accrued on any amount payable upon due surrender of Certificates or Book-Entry Shares. In the event of a transfer of ownership of -5- Shares that is not registered in the transfer or stock records of the Company, a check for any cash to be paid upon due surrender of the Certificate may be paid to such a transferee if the Certificate formerly representing such Shares is presented to the Paying Agent, accompanied by all documents required to evidence and effect such transfer and to evidence that any applicable stock transfer or other Taxes (as hereinafter defined) have been paid or are not applicable. (iii) The Surviving Corporation and the Paying Agent shall be entitled to deduct and withhold from the consideration otherwise payable under this Agreement to any holder of Shares or holder of Company Stock Options or Company Stock-Based Awards such amounts as are required to be withheld or deducted under the Internal Revenue Code of 1986 (the "Code"), or any provision of federal, state, local or foreign Tax Law with respect to the making of such payment. To the extent that amounts are so withheld or deducted and paid over to the applicable Governmental Entity (as hereinafter defined), such withheld or deducted amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the Shares or holder of the Company Stock Options or Company Stock-Based Awards in respect of which such deduction and withholding were made. (c) Closing of Transfer Books. At the Effective Time, the stock transfer books of the Company shall be closed, and there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the Shares that were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates or Book-Entry Shares are presented to the Surviving Corporation or Parent for transfer, they shall be cancelled and exchanged for a check in the proper amount pursuant to and subject to the requirements of this Article II. (d) Termination of Exchange Fund. Any portion of the Exchange Fund (including the proceeds of any investments thereof) that remains undistributed to the former holders of Shares for one year after the Effective Time shall be delivered to the Surviving Corporation upon demand, and any former holders of Shares who have not surrendered their Certificates or Book-Entry Shares in accordance with this Section 2.2 shall thereafter look only to the Surviving Corporation for payment of their claim for the Merger Consideration, without any interest thereon, upon due surrender of their Certificates or Book-Entry Shares. (e) No Liability. Notwithstanding anything herein to the contrary, none of the Company, Parent, Merger Sub, the Surviving Corporation, the Paying Agent or any other person shall be liable to any former holder of Shares for any amount properly delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law. (f) Investment of Exchange Fund. The Paying Agent shall invest all cash included in the Exchange Fund as reasonably directed by Parent; provided, however, that any investment of such cash shall be limited to direct short-term obligations of, or short-term obligations fully guaranteed as to principal and interest by, the U.S. government and that no such investment or loss thereon shall affect the amounts payable to holders of Certificates, Company Stock Options or Company Stock-Based Awards pursuant to this Article II and Section 5.5(a). Any interest and other income resulting from such investments shall be paid to the Surviving Corporation pursuant to Section 2.2(d). -6- (g) Lost Certificates. In the case of any Certificate that has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and, if required by Parent or the Paying Agent, the posting by such person of a bond in customary amount as indemnity against any claim that may be made against it with respect to such Certificate, the Paying Agent will issue in exchange for such lost, stolen or destroyed Certificate a check in the amount of the number of Shares represented by such lost, stolen or destroyed Certificate multiplied by the Merger Consideration. Section 2.3 Timing of Equity Rollover. For the avoidance of doubt, the parties acknowledge and agree that the contribution of Shares to Parent pursuant to the Rollover Commitments shall be deemed to occur immediately prior to the Effective Time and prior to any other above-described event. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY Except as disclosed (i) in the Company SEC Documents filed on or after December 31, 2006 and prior to the date of this Agreement (excluding any disclosures included therein to the extent that they are cautionary, predictive or forward-looking in nature, including those in any risk factor section of such documents) or (ii) in the disclosure schedule delivered by the Company to Parent immediately prior to the execution of this Agreement (the "Company Disclosure Schedule," it being agreed that disclosure of any item in any section of the Company Disclosure Schedule shall also be deemed to be disclosure with respect to any other section of this Article III to which the relevance of such item is reasonably apparent on its face), the Company represents and warrants to Parent and Merger Sub as follows: Section 3.1. Qualification, Organization, Subsidiaries, etc. (a) Each of the Company and its Subsidiaries is a legal entity duly organized, validly existing and in good standing under the Laws of its respective jurisdiction of organization. Each of the Company and its Subsidiaries has all requisite corporate, partnership or similar power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted, except where the failure to have such power or authority would not have, individually or in the aggregate, a Company Material Adverse Effect. (b) Each of the Company and its Subsidiaries is qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, have a Company Material Adverse Effect. The organizational or governing documents of the Company and each of its Subsidiaries, as previously provided to Parent, are in full force and effect. Neither the Company nor any Subsidiary is in violation of its organizational or governing documents. (c) As used in this Agreement, any reference to any fact, circumstance, event, change, effect or occurrence having a "Company Material Adverse Effect" means any fact, circumstance, event, change, effect or occurrence that, -7- individually or in the aggregate with all other facts, circumstances, events, changes, effects or occurrences, has had or would be reasonably likely to have a material adverse effect on the assets, properties, business, results of operation or financial condition of the Company and its Subsidiaries, taken as a whole, or that would be reasonably likely to prevent or materially delay or materially impair the ability of the Company to perform its obligations hereunder or to consummate the Merger or the other transactions contemplated hereby, but shall not include (i) facts, circumstances, events, changes, effects or occurrences generally affecting the industry in which the Company operates or the economy or the financial or securities markets in the United States or elsewhere in the world, including any regulatory or political conditions or developments, or any outbreak or escalation of hostilities, declared or undeclared acts of war, terrorism or insurrection, except to the extent any fact, circumstance, event, change, effect or occurrence that, relative to other industry participants, disproportionately impacts the assets, properties, business, results of operation or financial condition of the Company and its Subsidiaries, taken as a whole, (ii) facts, circumstances, events, changes, effects or occurrences to the extent directly resulting from the announcement of the execution of this Agreement or the consummation of the transactions contemplated hereby (without diminishing the effect of any representations or warranties herein), (iii) fluctuations in the price or trading volume of shares of Company Common Stock; provided, that the exception in this clause (iii) shall not prevent or otherwise affect a determination that any fact, circumstance, event, change, effect or occurrence underlying such fluctuation has resulted in, or contributed to, a Company Material Adverse Effect, (iv) facts, circumstances, events, changes, effects or occurrences to the extent resulting from any changes in Law or in GAAP (or the interpretation thereof) after the date hereof, (v) facts, circumstances, events, changes, effects or occurrences to the extent resulting from any legal proceedings made or brought by any of the current or former shareholders of the Company (on their own behalf or on behalf of the Company) arising out of or related to this Agreement or any of the transactions contemplated hereby or (vi) any failure by the Company to meet any published analyst estimates or expectations of the Company's revenue, earnings or other financial performance or results of operations for any period or any failure by the Company to meet its internal budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations; provided, that the exception in this clause (vi) shall not prevent or otherwise affect a determination that any fact, circumstance, event, change, effect or occurrence underlying such failure has resulted in, or contributed to, a Company Material Adverse Effect. Section 3.2. Capital Stock. (a) The authorized capital stock of the Company consists of 200,000,000 shares of Company Common Stock and 10,000,000 shares of preferred stock, par value $0.001 per share ("Company Preferred Stock"). As of March 16, 2007, (i) 46,478,033 shares of Company Common Stock were issued and outstanding, (ii) 5,718,606 shares of Company Common Stock were held in treasury, (iii)(A) 1,155,779 shares of Company Common Stock were reserved for issuance under the Circle International Group, Inc. 1994 Omnibus Equity Incentive Plan, none of which were subject to outstanding options issued pursuant to such plan, (B) 46,000 shares of Company Common Stock were reserved for issuance under the Circle International Group, Inc. 1999 Stock Option Plan, of which 1,000 shares of Company Common Stock were subject to outstanding options issued pursuant to such plan, (C) 4,150,955 shares of Company Common Stock were reserved for issuance under the Company's Long Term Incentive Plan, of which 1,694,388 shares -8- of Company Common Stock were subject to outstanding options issued pursuant to such plan, (D) 157,203 shares of Company Common Stock were reserved for issuance under the Company's Amended and Restated Nonemployee Director Stock Plan, of which 82,500 shares of Company Common Stock were subject to outstanding options issued pursuant to such plan, (E) 165,137 shares of Company Common Stock were reserved for issuance under the Company's Employee Stock Purchase Plan, and (F) 158,725 shares of Company Common Stock were reserved for issuance under the Circle International Group, Inc. 2000 Stock Option Plan, of which 2,712 shares of Company Common Stock were subject to outstanding options issued pursuant to such plan, (the plan described in clause (a)(iii)(E) above, the "Stock Purchase Plan") and (iv) no shares of Company Preferred Stock were issued or outstanding. One right to purchase Series A Junior Participating Preferred Stock (each, a "Company Right") issued pursuant to the Rights Agreement, dated as of May 23, 2001 (the "Company Rights Agreement"), as amended, between the Company and Computershare Investor Services, L.C. is associated with and attached to each outstanding share of Company Common Stock. All outstanding shares of Company Common Stock, and all shares of Company Common Stock reserved for issuance as noted in clause (iii), when issued in accordance with the respective terms thereof, are or will be duly authorized, validly issued, fully paid and non-assessable and free of pre-emptive rights and issued in compliance with all applicable securities Laws. No shares of Company Common Stock are owned by any Subsidiaries of the Company. (b) Except as set forth in subsection (a) above, or as permitted after the date hereof by Section 5.1(b), (i) the Company does not have any shares of its capital stock issued or outstanding other than shares of Company Common Stock that have become outstanding after March 16, 2007 upon exercise of Company Stock Options outsta nding as of March 16, 2007 and (ii) there are no outstanding subscriptions, options, warrants, calls, convertible securities or other similar rights, agreements or commitments relating to the issuance of capital stock or other equity interests to which the Company or any of its Subsidiaries is a party obligating the Company or any of its Subsidiaries to (A) issue, transfer or sell any shares of capital stock or other equity interests of the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, (B) grant, extend or enter into any such subscription, option, warrant, call, convertible securities or other similar right, agreement or arrangement, (C) redeem or otherwise acquire any such shares of capital stock or other equity interests or (D) provide a material amount of funds to, or make any material investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary. (c) Except for the awards to acquire shares of Company Common Stock under the Company Stock Plans and Stock Purchase Plan of the Company or any of its Subsidiaries listed in Section 3.2(a) above, neither the Company nor any of its Subsidiaries has outstanding bonds, debentures, notes or other obligations, the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the shareholders of the Company on any matter. (d) Except for the Voting Agreement, there are no shareholder agreements, voting trusts or other agreements or understandings to which the Company or any of its Subsidiaries is a party or of which the Company is otherwise aware with respect to the voting of the capital stock or other equity interest of the Company or any of its Subsidiaries. -9- (e) No holder of securities in the Company or any of its Subsidiaries has any right to have such securities registered by the Company or any of its Subsidiaries, as the case may be, other than pursuant to the Shareholder's Agreement dated October 1, 1994 among the Company, James R. Crane, Daniel S. Swannie, Douglas A. Seckel and Donald P. Roberts. Section 3.3 Subsidiaries. Section 3.3 of the Company Disclosure Schedule lists all Subsidiaries of the Company together with the jurisdiction of organization of each such Subsidiary. All the outstanding shares of capital stock of, or other equity interests in, each Subsidiary of the Company have been duly authorized and validly issued and are fully paid and nonassessable and are owned directly or indirectly by the Company free and clear of all liens, claims, deeds of trust, options, rights of first refusal, restrictive covenants, pledges, charges, mortgages, encumbrances, adverse rights or claims and security interests of any kind or nature whatsoever (including any restriction on the right to vote or transfer the same, except for such transfer restrictions of general applicability as may be provided under applicable law, including the Securities Act of 1933, and the rules and regulations promulgated thereunder (the "Securities Act"), and the "blue sky" laws of the various States of the United States) (collectively, "Liens"). The Company does not own, directly or indirectly, any capital stock, voting securities or equity interests in any Person. Section 3.4. Corporate Authority Relative to This Agreement; No Violation. (a) The Company has the requisite corporate power and authority to enter into this Agreement and, subject to receipt of the Company Shareholder Approval (as hereinafter defined), to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by the Board of Directors of the Company, acting upon the unanimous recommendation of the Special Committee, and, except for (i) the Company Shareholder Approval and (ii) the filing of the Articles of Merger with the Secretary of State of the State of Texas, no other corporate proceedings on the part of the Company are necessary to authorize the consummation of the transactions contemplated hereby. As of the date hereof, each of the Board of Directors of the Company and the Special Committee of the Board of Directors has resolved to recommend that the Company's shareholders approve this Agreement and the transactions contemplated hereby (including the Special Committee's recommendation, the "Recommendation"). This Agreement has been duly and validly executed and delivered by the Company and, assuming this Agreement constitutes the valid and binding agreement of Parent and Merger Sub, constitutes the valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except that such enforceability (i) may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general application affecting or relating to the enforcement of creditors' rights generally and (ii) is subject to general principles of equity, whether considered in a proceeding at law or in equity, and any implied covenant of good faith and fair dealing (the "Bankruptcy and Equity Exception"). (b) Other than in connection with or in compliance with (i) the TBCA (ii) the Securities Exchange Act of 1934 (the "Exchange Act"), (iii) the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act") and (iv) competition approvals in foreign countries (collectively, the "Company Approvals") no authorization, consent or approval of, or filing with, any United -10- States or foreign governmental or regulatory agency, commission, court, body, entity or authority (each, a "Governmental Entity") is necessary, under applicable Law, for the consummation by the Company of the transactions contemplated hereby, except for such authorizations, consents, approvals or filings that, if not obtained or made, would not have, individually or in the aggregate, a Company Material Adverse Effect. (c) The execution and delivery by the Company of this Agreement does not, and the consummation of the transactions contemplated hereby and compliance with the provisions hereof by the Company will not, (i) result in any violation of, or default (with or without notice or lapse of time, or both) under, require consent under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of any benefit under any loan, guarantee of indebtedness or credit agreement, note, bond, mortgage, indenture, lease, agreement, contract, instrument, permit, Company Permit, concession, franchise, right or license binding upon the Company or any of its Subsidiaries or result in the creation of any Lien upon any of the properties or assets of the Company or any of its Subsidiaries, (ii) conflict with or result in any violation of any provision of the articles of incorporation or bylaws or other equivalent organizational document, in each case as amended, of the Company or any of its Subsidiaries or (iii) assuming that the consents and approvals referred to in Section 3.4(b) are duly obtained, conflict with or violate any applicable Laws, other than, in the case of clauses (i) and (iii), any such violation, required consent, conflict, default, termination, cancellation, acceleration, right, loss or Lien that would not have, individually or in the aggregate, a Company Material Adverse Effect. Section 3.5. Reports and Financial Statements. (a) The Company and its Subsidiaries have filed all forms, documents, statements and reports required to be filed prior to the date hereof by them with the Securities and Exchange Commission (the "SEC") since January 1, 2005 (the forms, documents, statements and reports filed with the SEC since January 1, 2005 and those filed with the SEC subsequent to the date of this Agreement, including any amendments thereto, the "Company SEC Documents"). As of their respective dates, or, if amended, as of the date of the last such amendment prior to the date hereof, the Company SEC Documents complied, and each of the Company SEC Documents filed subsequent to the date of this Agreement will comply, as to form, in all material respects with the requirements of the Securities Act and the Exchange Act, as the case may be, and the applicable rules and regulations promulgated thereunder. None of the Company SEC Documents so filed or that will be filed subsequent to the date of this Agreement contained or will contain any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (b) The financial statements (including all related notes and schedules) of the Company and its Subsidiaries included in or incorporated by reference into the Company SEC Documents fairly presented, in all material respects, the consolidated financial position of the Company and its Subsidiaries, as of the respective dates thereof, and the consolidated results of their operations and their consolidated cash flows for the respective periods then ended (subject, in the case of the unaudited statements, to normal year-end audit adjustments and to any other adjustments described therein, including the notes thereto) in conformity with United States generally accepted accounting principles ("GAAP") -11- (except, in the case of the unaudited statements or foreign Subsidiaries, as permitted by the SEC) applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto). Section 3.6. Internal Controls and Procedures. The Company has established and maintains disclosure controls and procedures and internal control over financial reporting (as such terms are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 under the Exchange Act) as required by Rule 13a-15 under the Exchange Act. The Company's disclosure controls and procedures are reasonably designed to ensure that all material information required to be disclosed by the Company in the reports that it files under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such material information is accumulated and communicated to the management of the Company as appropriate to allow timely decisions regarding required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder (the "Sarbanes-Oxley Act"). The management of the Company has completed its assessment of the effectiveness of the Company's internal control over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act for the year ended December 31, 2006, and such assessment concluded that such controls were effective. The Company has disclosed, based on its most recent evaluations, to the Company's outside auditors and the audit committee of the board of directors of the Company (A) all significant deficiencies in the design or operation of internal controls over financial reporting and any material weaknesses, which by definition have more than a remote chance to materially adversely affect the Company's ability to record, process, summarize and report financial data (as defined in Rule 13a-15(f) of the Exchange Act) and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal controls over financial reporting for the year ended December 31, 2006. Section 3.7 No Undisclosed Liabilities. Except (i) as reflected or reserved against in the Company's consolidated balance sheets (or the notes thereto) included in the Company SEC Documents filed at least two (2) Business Days prior to the date hereof, (ii) for liabilities and obligations arising under this Agreement and transactions contemplated by this Agreement, (iii) for liabilities and obligations incurred in the ordinary course of business consistent with past practice since December 31, 2006 (it being understood that, for purposes of this Section 3.7, the taking of any action specifically permitted by the exceptions in the covenants in Section 5.1(b) shall be deemed to be in the ordinary course of business consistent with past practice) (iv) for liabilities or obligations under Company Material Contracts and (v) for liabilities or obligations which have been discharged or paid in full in the ordinary course of business, neither the Company nor any Subsidiary of the Company has any liabilities or obligations of any nature, whether or not accrued, contingent or otherwise, whether known or unknown and whether due or to become due, that would have, individually or in the aggregate, a Company Material Adverse Effect. Section 3.8 Compliance with Law; Permits. (a) The Company and its Subsidiaries are, and since the later of January 1, 2005 and their respective dates of formation or organization have been, in -12- compliance with and are not in default under or in violation of any applicable federal, state, local or foreign or provincial law, statute, ordinance, rule, regulation, judgment, order, injunction, decree or agency requirement of or undertaking to or agreement with any Governmental Entity, including common law, (collectively, "Laws" and each, a "Law"), except where such non-compliance, default or violation would not have, individually or in the aggregate, a Company Material Adverse Effect. (b) Neither the Company, nor any of its Subsidiaries, nor any of their Affiliates or any other Persons acting on their behalf has, in connection with the operation of their respective businesses, (i) used any corporate or other funds for unlawful contributions, payments, gifts or entertainment, or made any unlawful expenditures relating to political activity to government officials, candidates or members of political parties or organizations, or established or maintained any unlawful or unrecorded funds in violation of Section 104 of the Foreign Corrupt Practices Act of 1977 or any other similar applicable foreign, federal or state law, (ii) paid, accepted or received any unlawful contributions, payments, expenditures or gifts, or (iii) violated or operated in noncompliance with any export restrictions, anti-boycott regulations, embargo regulations or other applicable domestic or foreign laws and regulations, except in the case of clauses (i), (ii) or (iii) where such action, violation or noncompliance would not have, individually or in the aggregate, a Company Material Adverse Effect. (c) Except as would not have, individually or in the aggregate, a Material Adverse Effect, (i) the Company and its Subsidiaries are in possession of all franchises, tariffs, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders of any Governmental Entity necessary for the Company and its Subsidiaries to own, lease and operate their properties and assets or to carry on their businesses as they are now being conducted (the "Company Permits"), (ii) all Company Permits are in full force and effect, (iii) no suspension or cancellation of any of the Company Permits is pending or, to the Knowledge of the Company, threatened, (iv) the Company and its Subsidiaries are not, and since January 1, 2005 have not been, in violation or breach of, or default under, any Company Permit and (v) no event or condition has occurred or exists which would reasonably be expected to result in a violation of, breach of or loss of a benefit under any Company Permit (in each case, with or without notice or lapse of time or both). (d) The representations and warranties set forth in this Section 3.8 shall not apply to Environmental Law (which is the subject of Section 3.9), ERISA (which is the subject of Section 3.10) or Laws relating to Taxes (which are the subject of Section 3.15). Section 3.9 Environmental Laws and Regulations. (a) Except as would not, individually or in the aggregate, have a Company Material Adverse Effect, (i) the Company and each of its Subsidiaries have conducted their respective businesses in compliance with all applicable Environmental Laws (as hereinafter defined), (ii) there has been no release of any Hazardous Substance by the Company or any of its Subsidiaries, or from any properties owned by the Company or any of its Subsidiaries, or as a result of any operations or activities of the Company or any of its Subsidiaries, in any manner or for which the Company or any of is Subsidiaries would be responsible that could reasonably be expected to give rise to any remedial obligation, corrective action requirement or other liability of any kind under applicable Environmental Laws, (iii) neither the Company nor any of its Subsidiaries has -13- received any notices, demand letters or requests for information from any federal, state, local or foreign or provincial Governmental Entity asserting that the Company or any of its Subsidiaries may be in violation of, or liable under, any Environmental Law, and (iv) neither the Company, its Subsidiaries nor any of their respective properties are, or, to the Knowledge of the Company, are threatened to become, subject to any liabilities relating to any suit, settlement, court order, administrative order, regulatory requirement, judgment or written claim asserted or arising under any Environmental Law. (b) As used herein, "Environmental Law" means any Law relating to (i) the protection, preservation or restoration of the environment (including air, surface water, groundwater, drinking water supply, surface land, subsurface land, plant and animal life or any other natural resource), or (ii) the exposure to, or the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal of Hazardous Substances, in each case as in effect at the date hereof. (c) As used herein, "Hazardous Substance" means any substance presently listed, defined, designated or classified as hazardous, toxic, radioactive or dangerous, or otherwise regulated, under any Environmental Law. Hazardous Substance includes any substance to which exposure is regulated by any Governmental Entity or any Environmental Law including any toxic waste, pollutant, contaminant, hazardous substance, toxic substance, hazardous waste, special waste or petroleum or any derivative or byproduct thereof, radon, radioactive material, asbestos or asbestos containing material, urea formaldehyde, foam insulation or polychlorinated biphenyls. Section 3.10 Employee Benefit Plans. (a) Section 3.10(a) of the Company Disclosure Schedule lists all material Company Benefit Plans as of the date of this Agreement. "Company Benefit Plans" means all compensation or employee benefit plans, programs, policies, agreements or other arrangements, whether or not "employee benefit plans" (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974 ("ERISA"), whether or not subject to ERISA), providing cash- or equity-based incentives, health, medical, dental, disability, accident or life insurance benefits or vacation, severance, retirement, pension or savings benefits, that are sponsored, maintained or contributed to by the Company or any of its Subsidiaries, or that the Company or any of its Subsidiaries has any obligation to sponsor, maintain or contribute to, for the benefit of current or former employees, directors or consultants of the Company or any of its Subsidiaries and all employee and consultant agreements providing compensation, vacation, severance or other benefits to any current or former officer, employee or consultant of the Company or any of its Subsidiaries. (b) Except for such claims which would not have, individually or in the aggregate, a Company Material Adverse Effect, no action, dispute, suit, claim, arbitration, or legal, administrative or other proceeding or governmental action (other than claims for benefits in the ordinary course) is pending or, to the Knowledge of the Company, threatened (x) with respect to any Company Benefit Plan by any current or former employee, officer or director of the Company or any of its Subsidiaries, (y) alleging any breach of the material terms of any -14- Company Benefit Plan or any fiduciary duties or (z) with respect to any violation of any applicable Law with respect to such Company Benefit Plan. (c) Each Company Benefit Plan has been established, maintained and administered in compliance with its terms and with applicable Law, including ERISA and the Code to the extent applicable thereto, except for such non-compliance which would not have, individually or in the aggregate, a Company Material Adverse Effect. Each Company Benefit Plan intended to be qualified under Section 401(a) or 401(k) of the Code has received a favorable determination letter from the United States Internal Revenue Service that has not been revoked and to the Knowledge of the Company, no fact or event has occurred that would reasonably be expected to affect adversely the qualified status of any such Company Benefit Plan. (d) There are no Company Benefit Plans subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code. (e) None of the Company Benefit Plans provides that the consummation of the transactions contemplated by this Agreement will not, either alone or in combination with another event, (i) entitle any current or former director, employee, independent contractor, consultant or officer of the Company or any of its Subsidiaries to severance pay, retention bonuses, parachute payments, non-competition payments, unemployment compensation or any other payment, compensation or benefit except as expressly provided in this Agreement or as required by applicable Law, (ii) accelerate the time of payment or vesting, result in any funding, or increase the amount of any payment, compensation or benefit due any such director, employee, independent contractor, consultant or officer, except as expressly provided in this Agreement, or (iii) result in any forgiveness of indebtedness or obligation to fund benefits with respect to any such employee, director, independent contractor, consultant or officer, (iv) result in any limitation or restriction on the right of the Company or any of its Subsidiaries to merge, amend or terminate any Company Benefit Plan, (v) result in any new or increased contribution required to be made to any Company Benefit Plan or (vi) provide for any director, officer, employee or service provider to be entitled to a gross-up, make whole or other payment as a result of the imposition of taxes under Section 280G, 4999 or 409A of the Code pursuant to any agreement or arrangement with the Company or any of its Subsidiaries. No payment or benefit which has been, will be or may be made by the Company or any of its Subsidiaries with respect to any present or former employee in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated by this Agreement could result in any "excess parachute payments" within the meaning of Section 280G(b)(1) of the Code or nondeductibility under Section 162(m) of the Code. (f) Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, all Company Benefit Plans subject to the Law of any jurisdiction outside of the United States (i) have been established and maintained in accordance with all applicable requirements, (ii) if they are intended to qualify for special tax treatment, meet all necessary requirements for such treatment, and (iii) if they are intended to be funded and/or book-reserved are funded and/or book-reserved, as appropriate, based upon reasonable actuarial assumptions and in accordance with applicable Law. -15- (g) With respect to each Company Benefit Plan, the Company has provided to Parent a true, correct and complete copy (or, to the extent no such copy exists, an accurate description) thereof and, to the extent applicable: (i) the most recent documents constituting the Company Benefit Plan and all amendments thereto, (ii) any related trust agreement or other funding instrument and (iii) the most recent Internal Revenue Service determination or opinion letter. (h) No Company Benefit Plan is a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA ("Multiemployer Plan"), and neither the Company, its Subsidiaries nor any other entity which together with the Company or any of its Subsidiaries would be treated as a single employer under Section 4001 of ERISA or Section 414 of the Code (each, an "ERISA Affiliate") has at any time sponsored or contributed to, or had any liability or obligation in respect of, any Multiemployer Plan, except as would not have, individually or in the aggregate, a Company Material Adverse Effect. (i) With respect to the Company Benefit Plans, no event has occurred and, to the Knowledge of the Company, except as would not have, individually or in the aggregate, a Company Material Adverse Effect, no condition exists that would, either directly or by reason of the Company's or any Subsidiary's affiliation with any of their ERISA Affiliates, subject the Company or any of its Subsidiaries to any tax, fine, lien, penalty or other liability imposed by ERISA, the Code or other applicable Laws. Section 3.11 Interested Party Transactions. Except for employment Contracts filed as an exhibit to or incorporated by reference in a Company SEC Document filed prior to the date hereof or Company Benefit Plans, Section 3.11 of the Company Disclosure Schedule sets forth a correct and complete list of the contracts, arrangements that are in existence as of the date of this Agreement or transactions under which the Company or any of its Subsidiaries has any existing or future liabilities (an "Affiliate Transaction"), between the Company or any of its Subsidiaries, on the one hand, and, on the other hand, any (A) present executive officer or director of the Company or any of such executive officer's or director's immediate family members, (B) record or beneficial owner of more than 5% of the Shares as of the date hereof, or (C) to the Knowledge of the Company, any Affiliate of any such executive officer, director or owner (other than the Company or any of its Subsidiaries). Section 3.12 Absence of Certain Changes or Events. Since December 31, 2006, (a) except as otherwise required or expressly contemplated by this Agreement, (i) the businesses of the Company and its Subsidiaries have been conducted, in all material respects, in the ordinary course of business consistent with past practice (it being understood that, for purposes of this Section 3.12, the taking of any action specifically permitted by the exceptions in the covenants contained in Section 5.1(b) shall be deemed to be in the ordinary course of business consistent with past practice) and (ii) there have not been any facts, circumstances, events, changes, effects or occurrences that have had or would have, individually or in the aggregate a Company Material Adverse Effect and (b) prior to the date hereof, neither the Company nor any of its Subsidiaries has taken or permitted to occur any action that were it to be taken from and after the date hereof would require approval of Parent pursuant to Section 5.1(b) to (i) make, declare or pay any dividend, or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire or encumber, any shares of its capital stock or any securities or obligations -16- convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock, (ii) waive, release, assign, settle or compromise any claim, action or proceeding or (iii) implement or adopt any material change in its Tax or financial accounting principles, practices or methods. Section 3.13 Investigations; Litigation. There are no (i) investigations or proceedings pending (or, to the Knowledge of the Company, threatened) by any Governmental Entity with respect to the Company or any of its Subsidiaries or (ii) actions, suits or proceedings pending (or, to the Knowledge of the Company, threatened) against or affecting the Company or any of its Subsidiaries , or any of their respective properties at law or in equity before, and there are no orders, judgments or decrees of, or before, any Governmental Entity against the Company or any of its Subsidiaries, in each case of clause (i) or (ii), which would have (if adversely determined), individually or in the aggregate, a Company Material Adverse Effect. Section 3.14 Proxy Statement; Other Information. None of the information contained in the Proxy Statement (as hereinafter defined) will at the time of the mailing of the Proxy Statement to the shareholders of the Company, at the time of the Company Meeting (as such Proxy Statement shall have been amended or supplemented as of the date of the Company Meeting), and at the time of any amendments thereof or supplements thereto, and none of the information supplied by the Company for inclusion or incorporation by reference in the Schedule 13E-3 (as hereinafter defined) to be filed with the SEC concurrently with the filing of the Proxy Statement, will, at the time of its filing with the SEC, and at the time of any amendments thereof or supplements thereto, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, that no representation is made by the Company with respect to information supplied by or on behalf of, or related to, Parent or any of its Affiliates (other than the Company and its Subsidiaries). The Proxy Statement and the Schedule 13E-3 will comply as to form in all material respects with the Exchange Act, except that no representation is made by the Company with respect to information supplied by or on behalf of, or related to, Parent or any of its Affiliates (other than the Company and its Subsidiaries). The letter to shareholders, notice of meeting, proxy statement and forms of proxy to be distributed to shareholders in connection with the Merger to be filed with the SEC in connection with seeking the approval of this Agreement are collectively referred to herein as the "Proxy Statement." The Rule 13E-3 Transaction Statement on Schedule 13E-3 to be filed with the SEC in connection with seeking the adoption and approval of this Agreement is referred to herein as the "Schedule 13E-3." Section 3.15 Tax Matters. (a) Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, (i) the Company and each of its Subsidiaries have prepared and timely filed (taking into account any valid extension of time within which to file) all Tax Returns required to be filed by any of them and all such Tax Returns are complete and accurate, (ii) the Company and each of its Subsidiaries have timely paid all Taxes that are required to be paid by any of them (whether or not shown on any Tax Return), except with respect to matters contested in good faith and for which adequate reserves have been established on the financial statements of the Company and its Subsidiaries in accordance with -17- GAAP, (iii) the U.S. consolidated federal income Tax Returns of the Company through the tax year ending 2005 have been examined by the Internal Revenue Service and such examinations have been completed or settled (or the period for assessment of the Taxes in respect of which such Tax Returns were required to be filed has expired), (iv) all assessments for Taxes due with respect to completed and settled examinations or any concluded litigation have been fully paid, (v) there are no audits, examinations, investigations or other proceedings pending or threatened in writing in respect of Taxes or Tax matters of the Company or any of its Subsidiaries, (vi) there are no Liens for Taxes on any of the assets of the Company or any of its Subsidiaries other than statutory Liens for Taxes not yet due and payable or Liens for Taxes that are being contested in good faith and for which adequate reserves have been established on the financial statements of the Company and its Subsidiaries in accordance with GAAP, (vii) none of the Company or any of its Subsidiaries has been a "controlled corporation" or a "distributing corporation" in any distribution that was purported or intended to be governed by Section 355 of the Code (or any similar provision of state, local or foreign Law) (A) occurring during the two-year period ending on the date hereof, or (B) that otherwise constitutes part of a "plan" or "series of related transactions" (within the meaning of Section 355(e) of the Code) that includes the Merger, (viii) the Company and each of its Subsidiaries has timely withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, creditor, independent contractor, shareholder or other third party and is in compliance with all applicable rules and regulations regarding the solicitation, collection and maintenance of any forms, certifications and other information required in connection therewith, (ix) none of the Company or any of its Subsidiaries has been a party to any "reportable transaction" within the meaning of Treasury Regulation 1.6011-4(b)(1), (x) neither the Company nor any of its Subsidiaries is a party to any agreement or arrangement relating to the apportionment, sharing, assignment or allocation of any material Tax or material Tax asset (other than an agreement or arrangement solely among members of a group the common parent of which is the Company) or has any liability for Taxes of any Person (other than the Company or any of its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any predecessor or successor thereof or any analogous or similar provision of Law), by contract, agreement or otherwise, (xi) no waivers or extensions of any statute of limitations have been granted or requested with respect to any Taxes of the Company or any of its Subsidiaries, (xii) no issue has been raised in writing by a taxing authority in any prior examination of the Company or any of its Subsidiaries which, by application of the same or similar principles, could reasonably be expected to result in a deficiency for any subsequent taxable period, (xiii) no claim has been in writing made by a taxing authority in a jurisdiction where either the Company or any of its Subsidiaries does not file Tax Returns such that it is or may be subject to taxation by that jurisdiction, and (xiv) neither the Company nor any of its Subsidiaries (A) is subject to any private letter ruling of the IRS or comparable rulings of any taxing authority with respect to income Taxes or (B) has executed or entered into a closing agreement pursuant to Section 7121 of the Code or any similar provision of Law, in each case, within the preceding three taxable years or that may otherwise be in effect at any time after the Effective Time of the Merger with respect to income Taxes. (b) As used in this Agreement, (i) "Tax" or "Taxes" means (A) any and all federal, state, local or foreign or provincial taxes, charges, fees, imposts, levies or other assessments, including all net income, gross receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social -18- security, unemployment, excise, severance, stamp, occupation, property and estimated taxes, customs duties, fees, assessments and charges of any kind whatsoever, including any and all interest, penalties, fines, additions to tax or additional amounts imposed by any Governmental Entity in connection with respect thereto, and (B) any liability in respect of any items described in clause (A) payable by reason of contract, assumption, transferee liability, operation of Law, Treasury Regulation Section 1.1502-6(a) (or any predecessor or successor thereof of any analogous or similar provision of Law) or otherwise, and (ii) "Tax Return" means any return, report or similar filing (including any attached schedules, supplements and additional or supporting material) required to be filed with respect to Taxes, including any information return, claim for refund, amended return or declaration of estimated Taxes (and including any amendments with respect thereto). Section 3.16 Labor Matters. (a) Except for such matters which would not have individually or in the aggregate, a Company Material Adverse Effect, neither the Company nor any of its Subsidiaries has received written notice during the past two years of the intent of any Governmental Entity responsible for the enforcement of labor, employment, occupational health and safety or workplace safety and insurance/workers compensation laws to conduct an investigation of the Company or any of its Subsidiaries and, to the Knowledge of the Company, no such investigation is in progress. Except for such matters which would not have, individually or in the aggregate, a Company Material Adverse Effect, (i) there are no (and have not been during the two year period preceding the date hereof) strikes or lockouts with respect to any employees of the Company or any of its Subsidiaries ("Employees"), (ii) to the Knowledge of the Company, there is no (and has not been during the two year period preceding the date hereof) union organizing effort pending or threatened against the Company or any of its Subsidiaries, (iii) there is no (and has not been during the two year period preceding the date hereof) unfair labor practice, labor dispute (other than routine individual grievances) or labor arbitration proceeding pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries, (iv) there is no (and has not been during the two year period preceding the date hereof) slowdown or work stoppage in effect or, to the Knowledge of the Company, threatened with respect to Employees and (v) the Company and its Subsidiaries are in compliance with all applicable Laws respecting employment and employment practices, terms and conditions of employment and wages and hours and unfair labor practices. Neither the Company nor any of its Subsidiaries has any liabilities under the Worker Adjustment and Retraining Act and the regulations promulgated thereunder (the "WARN Act") or any similar state or local law as a result of any action taken by the Company that would have, individually or in the aggregate, a Company Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreements. (b) Except as would not have, individually or in the aggregate a Company Material Adverse Effect, all individuals that have been or that are classified by the Company as independent contractors, including without limitation drivers, have been and are correctly so classified, and none of such individuals could reasonably be classified as an employee of the Company. -19- Section 3.17 Intellectual Property. Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, either the Company or a Subsidiary of the Company owns, or is licensed or otherwise possesses adequate rights to use, all material trademarks, trade names, service marks, service names, mark registrations, logos, assumed names, registered and unregistered copyrights, patents or applications and registrations, domain names, Internet addresses and other computer identifiers, web sites and web pages, computer software programs and related documentation, trade secrets, know-how, customer information, confidential business information and technical information used in their respective businesses as currently conducted (collectively, the "Intellectual Property"). Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, (i) there are no pending or, to the Knowledge of the Company, threatened claims by any person alleging infringement by the Company or any of its Subsidiaries or with regard to the ownership, validity or use of any Intellectual Property of the Company, (ii) to the Knowledge of the Company, the conduct of the business of the Company and its Subsidiaries does not infringe any intellectual property rights of any person, (iii) neither the Company nor any of its Subsidiaries has made any claim of a violation or infringement by others of its rights to or in connection with the Intellectual Property of the Company or any of its Subsidiaries, and (iv) to the Knowledge of the Company, no person is infringing any Intellectual Property of the Company or any of its Subsidiaries. To the Knowledge of the Company, upon the consummation of the transactions contemplated herein, the Company shall own or have the right to use all Intellectual Property on the same terms and conditions as the Company and its Subsidiaries enjoyed prior to such transaction, except where the failure to so own or have the right to use would not have, individually or in the aggregate, a Company Material Adverse Effect. Section 3.18 Property. Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, the Company or a Subsidiary of the Company owns and has good and indefeasible title to all of its owned real property and good title to all its personal property and has valid leasehold interests in all of its leased properties free and clear of all Liens (except in all cases for Liens permissible under any applicable loan agreements and indentures and for title exceptions, defects, encumbrances, liens, charges, restrictions, restrictive covenants and other matters, whether or not of record, which in the aggregate do not materially affect the continued use of the property for the purposes for which the property is currently being used (assuming the timely discharge of all obligations owing under or related to the owned real property, the personal property and leased property) by the Company or a Subsidiary of the Company). Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, all leases under which the Company or any of its Subsidiaries lease any real or personal property are valid and effective against the Company or any of its Subsidiaries and, to the Company's Knowledge, the counterparties thereto, in accordance with their respective terms, and there is not, under any of such leases, any existing default by the Company or any of its Subsidiaries or, to the Company's Knowledge, the counterparties thereto, or event which, with notice or lapse of time or both, would become a default by the Company or any of its Subsidiaries or, to the Company's Knowledge, the counterparties thereto. The representations and warranties set forth in this Section 3.18 shall not apply to Intellectual Property, which is the subject of Section 3.17. Section 3.19 Insurance. Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, the Company and its Subsidiaries maintain, or are entitled to the benefits of, insurance covering their -20- properties, operations, personnel and businesses in the amounts set forth on Section 3.19 of the Company Disclosure Schedule. Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, none of the Company or its Subsidiaries has received notice from any insurer or agent of such insurer that substantial capital improvements or other expenditures will have to be made in order to continue such insurance, and all such insurance is outstanding and duly in force on the date hereof and will be (or equivalent replacement insurance will be) outstanding and duly in force on the Closing Date. Section 3.20 Opinion of Financial Advisor. The Board of Directors of the Company and the Special Committee have received the opinion of Deutsche Bank Securities Inc., dated as of the date of this Agreement, to the effect that, as of the date hereof, the Merger Consideration is fair to the holders of the Company Common Stock (other than those that are parties to a Rollover Commitment, Parent and Merger Sub) from a financial point of view. Section 3.21 Required Vote of the Company Shareholders. The affirmative vote of the holders of outstanding shares of Company Common Stock, voting together as a single class, representing at least a majority of all the votes entitled to be cast thereupon by holders of Company Common Stock, is the only vote of holders of securities of the Company which is required to approve this Agreement, the Merger and the other transactions contemplated hereby (the "Company Shareholder Approval"). Section 3.22 Material Contracts. (a) As of the date of this Agreement, except for this Agreement, the Company Benefit Plans, Contracts relating to Intellectual Property or Contracts filed with the SEC prior to the date hereof, neither the Company nor any of its Subsidiaries is a party to or bound by, as of the date hereof, any Contract (whether written or oral) which is a "material contract" (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) (all contracts of the type described in this Section 3.22(a) being referred to herein as "Company Material Contracts"). (b) Other than as a result of the expiration or termination of any Company Material Contract in accordance with its terms and except as would not have, either individually or in the aggregate, a Company Material Adverse Effect, (i) each Company Material Contract is valid and binding on the Company and any of its Subsidiaries that is a party thereto, as applicable, and in full force and effect, (ii) the Company and each of its Subsidiaries has in all material respects performed all obligations required to be performed by it to date under each Company Material Contract, and (iii) neither the Company nor any of its Subsidiaries knows of, or has received notice of, the existence of any event or condition which constitutes, or, after notice or lapse of time or both, will constitute, a material default on the part of the Company or any of its Subsidiaries under any such Company Material Contract. Section 3.23 Finders or Brokers. Except for Deutsche Bank Securities Inc., neither the Company nor any of its Subsidiaries has engaged any investment banker, broker or finder in connection with the transactions contemplated by this Agreement who might be entitled to any fee or any commission in connection with or upon consummation of the Merger or the other transactions contemplated hereby. -21- Section 3.24 State Takeover Statutes; Rights Plan. The Company has taken all actions necessary for purposes of Article 13.03 of the TBCA to ensure that the restrictions of such provision are not applicable to the Merger, the Voting Agreement, the Rollover Commitments or other transactions contemplated hereby, and no other "fair price," "moratorium," "control share acquisition" or other similar antitakeover statute or regulation enacted under state or federal laws in the United States is applicable to the Company with respect to the Merger, the Voting Agreement, the Rollover Commitments or other transactions contemplated hereby. The Company has amended and taken all other actions necessary to (a) render the Company Rights Agreement inapplicable to this Agreement, the Merger, the Voting Agreement, the Rollover Commitments or other transactions contemplated hereby, (b) ensure that (i) none of Parent, Merger Sub or any other interestholder or Subsidiary of Parent is an Acquiring Person (as defined in the Company Rights Agreement) pursuant to the Company Rights Agreement and (ii) a Distribution Date or a Triggering Event (as such terms are defined in the Company Rights Agreement) does not occur, in the case of clauses (a) and (b)(i) and (ii), solely by reason of the execution of this Agreement, the Voting Agreement, or the Rollover Commitments, or the consummation of the transactions contemplated thereby, including the Merger, and (c) provide that the Expiration Date (as defined in the Company Rights Agreement) shall occur immediately prior to the Effective Time. Section 3.25 Disclaimer. (a) Except for the representations and warranties contained in this Article III of this Agreement, Parent acknowledges that neither the Company nor any other Person on behalf of the Company makes any other express or implied representation or warranty with respect to the Company with respect to any other information provided to Parent. Except in the case of fraud or willful misrepresentation, neither the Company nor any other Person will have or be subject to any liability or indemnification obligation to Parent or any other Person resulting from the distribution to Parent, or use by Parent of, any such information, including any information, documents, projections, forecasts or other material made available to Parent in certain "data rooms", confidential information memoranda or management presentations in expectation of the transactions contemplated by this Agreement. (b) In connection with investigation by Parent of the Company and its Subsidiaries, Parent has received or may receive from the Company and/or the Company's Subsidiaries certain projections, forward-looking statements and other forecasts and certain business plan information. Parent acknowledges that there are uncertainties inherent in attempting to make such estimates, projections and other forecasts and plans, that Parent is familiar with such uncertainties, that Parent is taking full responsibility for making its own evaluation of the adequacy and accuracy of all estimates, projections and other forecasts and plans so furnished to it (including the reasonableness of the assumptions underlying such estimates, projections, forecasts or plans), and that, absent fraud or willful misrepresentation, Parent shall have no claim against anyone with respect thereto. Accordingly, Parent acknowledges that the Company makes no representation or warranty with respect to such estimates, projections, forecasts or plans (including the reasonableness of the assumptions underlying such estimates, projections, forecasts or plans). -22- ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB Except as disclosed in the disclosure schedule delivered by Parent to the Company immediately prior to the execution of this Agreement (the "Parent Disclosure Schedule"), Parent and Merger Sub jointly and severally represent and warrant to the Company as follows: Section 4.1 Qualification; Organization. (a) Each of Parent and Merger Sub is a legal entity duly organized, validly existing and in good standing under the Laws of its respective jurisdiction of organization. Each of Parent and Merger Sub has all requisite corporate or similar power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted, except where the failure to have such power or authority would not have, individually or in the aggregate, a Parent Material Adverse Effect. (b) Each of Parent and Merger Sub is qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, prevent or materially delay or materially impair the ability of Parent or Merger Sub to consummate the Merger and the other transactions contemplated hereby (a "Parent Material Adverse Effect"). The organizational or governing documents of Parent and Merger Sub, as previously provided to the Company, are in full force and effect. Neither Parent nor Merger Sub is in violation of its organizational or governing documents. Section 4.2 Corporate Authority Relative to This Agreement; No Violation. (a) Each of Parent and Merger Sub has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by the Board of Directors of Parent and Merger Sub and by Parent, as the sole stockholder of Merger Sub, and no other corporate proceedings on the part of Parent or Merger Sub are necessary to authorize the consummation of the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Parent and Merger Sub and, assuming this Agreement constitutes the valid and binding agreement of the Company, this Agreement constitutes the valid and binding agreement of Parent and Merger Sub, enforceable against each of Parent and Merger Sub in accordance with its terms, subject to the Bankruptcy and Equity Exception. (b) Other than in connection with or in compliance with (i) the provisions of the TBOC, (ii) the Exchange Act, (iii) the HSR Act, and (iv) competition approvals in foreign countries (collectively, the "Parent Approvals"), no authorization, consent or approval of, or filing with, any Governmental Entity is necessary for the consummation by Parent or Merger Sub of the transactions contemplated by this Agreement, except for such authorizations, -23- consents, approvals or filings, that, if not obtained or made, would not have, individually or in the aggregate, a Parent Material Adverse Effect. (c) The execution and delivery by Parent and Merger Sub of this Agreement does not, and the consummation of the transactions contemplated hereby and compliance with the provisions hereof by Parent and Merger Sub will not (i) result in any violation of, or default (with or without notice or lapse of time, or both) under, require consent under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of any benefit under any loan, guarantee of indebtedness or credit agreement, note, bond, mortgage, indenture, lease, agreement, contract, instrument, permit, concession, franchise, right or license binding upon Parent or any of its Subsidiaries or result in the creation of any Lien upon any of the properties or assets of Parent or any of its Subsidiaries, (ii) conflict with or result in any violation of any provision of the certificate of incorporation or by-laws or other equivalent organizational document, in each case as amended, of Parent or any of its Subsidiaries or (iii) assuming that the consents and approvals referred to in Section 4.2(b) are duly obtained, conflict with or violate any applicable Laws, other than, in the case of clauses (i) and (iii), any such violation, required consent, conflict, default, termination, cancellation, acceleration, right, loss or Lien that would not have, individually or in the aggregate, a Parent Material Adverse Effect. Section 4.3 Proxy Statement; Other Information. None of the information supplied or to be supplied by or on behalf of Parent or any of its Affiliates (other than the Company and its Subsidiaries) which is included or incorporated by reference in the Proxy Statement will at the time of the mailing of the Proxy Statement to the shareholders of the Company, at the time of the Company Meeting (as such Proxy Statement shall have been amended or supplemented as of the date of the Company Meeting), and at the time of any amendments thereof or supplements thereto, and none of the information supplied by or on behalf of Parent or any of its Affiliates (other than the Company and its Subsidiaries) and contained in the Schedule 13E-3 to be filed with the SEC concurrently with the filing of the Proxy Statement, will, at the time of filing with the SEC, and at the time of any amendments thereof or supplements thereto, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Section 4.4 Financing. (a) Section 4.4 of the Parent Disclosure Schedule sets forth true, accurate and complete copies of (i) executed equity commitment letters to provide equity financing to Parent and/or Merger Sub (the "Equity Commitment Letters"), (ii) the Rollover Commitments and (iii) executed debt commitment letters and related term sheets (the "Debt Commitment Letters" and together with the Equity Commitment Letters, the "Financing Commitments") pursuant to which, and subject to the terms and conditions thereof, certain lenders have committed to provide Parent or the Surviving Corporation with loans in the amounts described therein, the proceeds of which may be used to consummate the Merger and the other transactions contemplated hereby (the "Debt Financing" and together with the equity financing referred to in clauses (i) and (ii), the "Financing"); provided, however, that in the event any terms of the Financing Commitments are set forth in one or more fee letters containing information regarding fees and compensation payable to parties providing the Financing that Parent and Merger Sub have agreed to keep confidential, the copies of such fee -24- letters may be redacted to delete such compensation information that is not material to an assessment of the likelihood of the Financing being consummated. Each of the Financing Commitments, in the form so delivered, is a legal, valid and binding obligation of Parent or Merger Sub and, to Parent's Knowledge, the other parties thereto. The Financing Commitments are in full force and effect and have not been withdrawn or terminated (and no party thereto has indicated an intent to so withdraw or terminate) or otherwise amended or modified in any respect and neither Parent nor Merger Sub is in breach of any of the terms or conditions set forth therein and no event has occurred which, with or without notice, lapse of time or both, could reasonably be expected to constitute a material breach or failure to satisfy a condition precedent set forth therein. No event has occurred which, with or without notice, lapse of time or both, would constitute a default or breach on the part of Parent or Merger Sub with any term or condition of the Financing Commitments. As of the date of this Agreement, Parent has no reason to believe it will be unable to satisfy on a timely basis any term or condition of closing to be satisfied by it pursuant to the Financing Commitments. The proceeds from the Financing, together with the Rollover Commitments, constitute all of the financing required for the consummation of Merger and the other transactions contemplated hereby, and are sufficient for the satisfaction of all of Parent's and Merger Sub's obligations under this Agreement, including the payment of the Merger Consideration and the Option and Stock-Based Consideration, and the payment of all fees and expenses reasonably expected to be incurred in connection herewith. Parent or Merger Sub has fully paid any and all commitment fees or other fees on the dates and to the extent required by the Financing Commitments. The Financing Commitments contain all of the conditions precedent to the obligations of the parties thereunder to make the Financing available to Parent on the terms therein. Notwithstanding anything in this Agreement to the contrary, the Debt Commitment Letters may be superseded at the option of Parent or Merger Sub after the date of this Agreement but prior to the Effective Time by the New Financing Commitments in accordance with Section 5.10. In such event, the term "Financing Commitment" as used herein shall be deemed to include the New Financing Commitments to the extent then in effect. (b) Parent has delivered to the Company a true and complete copy of the documentation governing each Rollover Commitment, pursuant to which each committing party has committed to contribute to Parent that number of Shares set forth in such letter in exchange for shares of capital stock of Parent immediately prior to the Effective Time. As of the date of this Agreement, each Rollover Commitment is in full force and effect. Section 4.5 Ownership and Operations of Merger Sub. As of the date of this Agreement, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $0.01 per share, all of which are validly issued and outstanding. All of the issued and outstanding capital stock of Merger Sub is, and at the Effective Time will be, owned by Parent. Neither Parent nor Merger Sub has conducted any business other than incident to its formation and pursuant to this Agreement, the Merger and the other transactions contemplated hereby and the financing of such transactions. Section 4.6. Finders or Brokers. Except for Merrill Lynch & Co., neither Parent nor any of its Subsidiaries has engaged any investment banker, broker or finder in connection with the transactions contemplated by this Agreement who -25- might be entitled to any fee or any commission in connection with or upon consummation of the Merger or the other transactions contemplated hereby. Section 4.7 Ownership of Shares. Neither Parent, as of the date hereof, nor Merger Sub owns any Shares, beneficially, of record or otherwise. Immediately prior to the Effective Time, Parent or Merger Sub will only own those Shares subject to the Rollover Commitments. Section 4.8 Certain Arrangements. Section 4.8 of the Parent Disclosure Schedule sets forth, as of the date hereof, all Contracts between Parent, Merger Sub or the Guarantors, on the one hand, and any member of the Company's management or directors, on the other hand, as of the date hereof that relate in any way to the Company or the transactions contemplated by this Agreement. Parent has provided the Special Committee and the Board of Directors of the Company with true, correct and complete copies of the Contracts in Section 4.8 of the Parent Disclosure Schedule. Prior to the Board of Directors of the Company approving this Agreement, the Voting Agreement, the Rollover Commitments, the Merger and the other transactions contemplated thereby for purposes of Article 13.03 of the TBCA or the Company Rights Agreement, neither Parent nor Merger Sub, alone or together with any other person, has taken any action that would cause Article 13.03 of the TBCA to be applicable to this Agreement, the Merger or any transactions contemplated by this Agreement. Section 4.9 Investigations; Litigation. There are no suits, claims, actions, proceedings, arbitrations, mediations or investigations pending or, to the Knowledge of Parent, threatened against Parent or any of its Subsidiaries or Affiliates (other than the Company or any of its Subsidiaries, as to which Parent and Merger Sub make no representation), other than any such suit, claim, action, proceeding or investigation that would not have, individually or in the aggregate, a Parent Material Adverse Effect. As of the date hereof, neither Parent nor any of its Subsidiaries nor any of their respective properties is or are subject to any order, writ, judgment, injunction, decree or award that would have, individually or in the aggregate, a Parent Material Adverse Effect. Section 4.10 Guarantees. Concurrently with the execution of this Agreement, each of the Guarantors has delivered to the Company the Guarantees, dated as of the date hereof, in favor of the Company, true, accurate and complete copies of which are set forth in Section 4.10 of the Parent Disclosure Schedule, with respect to the performance by Parent and Merger Sub, respectively, of their obligations under this Agreement. Section 4.11 No Other Information. Parent and Merger Sub acknowledge that the Company makes no representations or warranties as to any matter whatsoever except as expressly set forth in Article III. The representations and warranties set forth in Article III are made solely by the Company, and no Representative of the Company shall have any responsibility or liability related thereto. Section 4.12 Access to Information; Disclaimer. Parent and Merger Sub each acknowledges and agrees that it (a) has had an opportunity to discuss the business of the Company and its Subsidiaries with the management of the Company, (b) has had reasonable access to the books and records of the Company and its Subsidiaries, (c) has been afforded the opportunity to ask questions of and -26- receive answers from officers of the Company and (d) has conducted its own independent investigation of the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, and has not relied on any representation, warranty or other statement by any Person on behalf of the Company or any of its Subsidiaries, whether express or implied, other than the representations and warranties of the Company expressly contained in Article III of this Agreement and that all other representations and warranties are specifically disclaimed. Section 4.13 Solvency. As of the Effective Time, assuming (i) satisfaction of the conditions to Parent's and Merger Sub's obligation to consummate the Merger, or waiver of such conditions, (ii) the accuracy of the representations and warranties of the Company set forth in Article III (for such purposes, such representations and warranties shall be true and correct in all material respects without giving effect to any "knowledge," materiality or "Company Material Adverse Effect" qualification or exception) including, without limitation, the representations and warranties set forth in Section 3.5(b), and (iii) estimates, projections or forecasts provided by the Company to Parent prior to the date hereof have been prepared in good faith on assumptions that were and continue to be reasonable, and after giving effect to all of the transactions contemplated by this Agreement, including without limitation the Financing, any alternative financing and the payment of the aggregate Merger Consideration, any contemplated repayment or refinancing of debt and payment of all related fees and expenses, the Surviving Corporation will be Solvent. For the purposes of this Section 4.13, the term "Solvent" when used with respect to the Surviving Corporation means that, as of any date of determination, (a) the amount of the "fair saleable value" of the assets of the Surviving Corporation will, as of such date, exceed (i) the value of all "liabilities of the Surviving Corporation, including contingent and other liabilities," as of such date, as such quoted terms are generally determined in accordance with applicable federal laws governing determinations of the insolvency of debtors, and (ii) the amount that will be required to pay the probable liabilities of the Surviving Corporation on its existing debts (including contingent liabilities) as such debts become absolute and matured, (b) the Surviving Corporation will not have, as of such date, an unreasonably small amount of capital for the operation of the businesses in which it is engaged or proposed to be engaged following such date, and (c) the Surviving Corporation will be able to pay its liabilities, including contingent and other liabilities, as they mature. For purposes of this definition, (i) "not have an unreasonably small amount of capital for the operation of the businesses in which it is engaged or proposed to be engaged" and "able to pay its liabilities, including contingent and other liabilities, as they mature" means that the Surviving Corporation will be able to generate enough cash from operations, asset dispositions or refinancing, or a combination thereof, to meet its obligations as they become due. ARTICLE V COVENANTS AND AGREEMENTS Section 5.1 Conduct of Business by the Company and Parent. (a) From and after the date hereof and prior to the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1 (the "Termination Date"), and except (i) as may be required by applicable Law, (ii) with the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed, (iii) as expressly -27- contemplated or permitted by this Agreement or (iv) as disclosed in Section 5.1 of the Company Disclosure Schedule, the Company shall, and shall cause each of its Subsidiaries to conduct its business in all material respects in the ordinary course consistent with past practices, and use commercially reasonable efforts to maintain and preserve intact its business organization and significant business relationships and to retain the services of its key officers and key employees; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. In the event that (i) the Company requests the written consent of Parent to take any action otherwise prohibited by this Section 5.1 and (ii) Parent does not grant such consent, any fact, circumstance, event, change, effect or occurrence resulting directly from the failure of the Company to be able to take such action as result of the failure of Parent to grant its written consent shall not constitute, or be considered in determining the existence or occurrence of, a Company Material Adverse Effect. (b) The Company agrees with Parent, on behalf of itself and its Subsidiaries, that between the date hereof and the Effective Time, except as set forth in Section 5.1 of the Company Disclosure Schedule, consented to in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed) or contemplated by this Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Parent: (i) adjust, split, combine or reclassify any capital stock or otherwise amend the terms of its capital stock; (ii) make, declare or pay any dividend, or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire or encumber, any shares of its capital stock or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock, except in connection with cashless exercises or similar transactions pursuant to the exercise of stock options or other awards issued and outstanding as of the date hereof under the Company Stock Plans or permitted hereunder to be granted after the date hereof; provided, that this Section 5.1(b)(ii) shall not apply to (A) dividends or distributions paid by wholly-owned Subsidiaries of the Company to the Company or to other wholly-owned Subsidiaries or (B) dividends or distributions paid by Subsidiaries of the Company, other than wholly-owned Subsidiaries, that are not within the discretion of the Company or its Subsidiaries; (iii) grant any person any right to acquire any shares of its capital stock except as required under any existing agreement; (iv) issue any additional shares of capital stock except pursuant to the exercise of stock options or other awards issued under the Company Stock Plans issued and outstanding as of the date hereof and in accordance with the terms of such instruments; provided, that the Company shall not issue any Shares under the Stock Purchase Plan; -28- (v) except for hedging agreements entered into in the ordinary course of business consistent with past practice, purchase, sell, transfer, mortgage, encumber or otherwise dispose of any properties or assets having a value in excess of $ 5,000,000 in the aggregate; (vi) make any capital expenditures in any fiscal quarter exceeding the Company's capital expenditure budget for such fiscal quarter by more than 1%; provided, that any capital expenditures contemplated by the Company's capital expenditure budget for any fiscal quarter not made such fiscal quarter may be made in the fiscal quarter immediately following such fiscal quarter; (vii) other than in connection with guarantees, surety bonds, security time deposits and customs bonds in the ordinary course of business consistent with past practice or in connection with drawdowns and issuances of letters of credit under existing credit facilities in the ordinary course of business consistent with past practice, incur, assume, guarantee, or become obligated with respect to any indebtedness for borrowed money; (viii) make any acquisition of another Person or business in excess of $5,000,000 in the aggregate, whether by purchase of stock or securities, contributions to capital (other than (A) capital contributions to wholly-owned Subsidiaries of the Company and (B) capital contributions to Subsidiaries of the Company, other than wholly--owned Subsidiaries, that are not within the discretion of the Company or its Subsidiaries), property transfers, or entering into binding agreements with respect to any such investment or acquisition; (ix) except in the ordinary course of business consistent with past practice, enter into, renew, extend, materially amend or terminate any Company Material Contract or Contract which if entered into prior to the date hereof would be a Company Material Contract, in each case, other than any Contract relating to indebtedness that would not be prohibited under clause (vii) of this Section 5.1(b); (x) except to the extent required by Law or by Contracts in existence as of the date hereof, (A) increase in any manner the compensation or benefits of any of its present or former employees, directors, consultants, independent contractors or service providers except in the ordinary course of business consistent with past practice (including, for this purpose, the normal employee salary, bonus and equity compensation review process conducted each year), (B) pay any pension, severance or retirement benefits not required by any existing plan or agreement to any such present or former employees, directors, consultants, independent contractors or service providers, (C) other than in the ordinary course of business consistent with past practice, enter into, amend, alter, adopt, implement or otherwise commit itself to any compensation or benefit plan, program, policy, arrangement or agreement including any pension, retirement, profit-sharing, bonus or other employee benefit or welfare benefit plan, policy, arrangement or agreement or employment, consulting or collective bargaining agreement with or for the benefit of any present or former employee, director, consultant or service provider (other than amendments that do not materially increase the cost to the Company or any of its Subsidiaries of maintaining such plan, policy, arrangement or agreement), (D) accelerate the vesting of, or the lapsing of restrictions with respect to, any stock options or other stock-based compensation, (E) cause the funding of any rabbi trust or similar arrangement or take any action to fund or in any other way secure the -29- payment of compensation or benefits under any Company Benefit Plan, or (F) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or applicable Law; (xi) waive, release, assign, settle or compromise any claim, action or proceeding, other than waivers, releases, assignments, settlements or compromises not exceeding the amount reserved against in the financial statements contained in the Company SEC Documents, or that involve only the payment of monetary damages not in excess of $1,250,000 in the aggregate (excluding amounts to be paid under existing insurance policies) or otherwise pay, discharge or satisfy any claims, liabilities or obligations in excess of such amount, in each case, other than in the ordinary course consistent with past practice; (xii) amend or waive any provision of its articles of incorporation and bylaws or other equivalent organizational documents or, in the case of the Company, enter into any agreement with any of its shareholders in their capacity as such; (xiii) take or omit to take any action that is intended or would reasonably be expected to, individually or in the aggregate, result in any of the conditions to the Merger set forth in Article VI not being satisfied or satisfaction of those conditions being materially delayed in violation of any provision of this Agreement; (xiv) enter into any "non-compete", "non-solicit" or similar agreement that would materially restrict the businesses of the Surviving Corporation or its Subsidiaries or their ability to solicit customers or employees following the Effective Time; (xv) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of such entity; (xvi) implement or adopt any material change in its Tax or financial accounting principles, practices or methods, other than as required by GAAP, applicable Law or regulatory guidelines; (xvii) enter into any closing agreement with respect to material Taxes, settle or compromise any material liability for Taxes, make, revoke or change any material Tax election, agree to any adjustment of any material Tax attribute, file or surrender any claim for a material refund of Taxes, execute or consent to any waivers extending the statutory period of limitations with respect to the collection or assessment of material Taxes, file any material amended Tax Return or obtain any material Tax ruling; (xviii) enter into any new, or materially amend or otherwise materially alter any current, Affiliate Transaction or transaction which would be an Affiliate Transaction if such transaction occurred prior to the date hereof; (xix) make any loans to any individual (other than advances of out-of-pocket business expenses to employees, contractors or consultants in the ordinary course of business and consistent with past practices) or make any material loans, advances or capital contributions to, or investments in, any -30- other Person in excess of $3,000,000 in the aggregate for all such loans, advances, contributions and investments, except for (i) transactions solely among the Company and/or wholly-owned Subsidiaries of the Company, or (ii) as required by existing contracts set forth in Section 5.1(b)(xix) of the Company Disclosure Schedule; or (xx) agree to take, make any commitment to take, or adopt any resolutions of its Board of Directors in support of, any of the actions prohibited by this Section 5.1(b). Section 5.2 Access to Information. (a) From the date hereof until the Effective Time and subject to the requirements of applicable Laws, the Company shall (i) provide to Parent, its counsel, financial advisors, auditors and other authorized representatives reasonable access during normal business hours to the offices, properties, books and records of the Company and its Subsidiaries, (ii) furnish to Parent, its counsel, financial advisors, auditors and other authorized representatives such financial and operating data and other information as such persons may reasonably request (including, to the extent practicable, furnishing to Parent the financial results of the Company in advance of any filing by the Company with the SEC containing such financial results), and (iii) instruct the employees, counsel, financial advisors, auditors and other authorized representatives (other than nonemployee directors) of the Company and its Subsidiaries to cooperate reasonably with Parent to obtain access to information concerning the Company and its Subsidiaries, as the case may be, except that nothing herein shall require the Company or any of its Subsidiaries to disclose any information that would cause a violation of any agreement to which the Company or any of its Subsidiaries is a party or would cause a risk of a loss of privilege to the Company or any of its Subsidiaries. Such access to information pursuant to this Section 5.2(a) shall be conducted in such manner as not to interfere unreasonably with the conduct of the business of the Company and its Subsidiaries. (b) Parent hereby agrees that all information provided to it or its counsel, financial advisors, auditors and other authorized representatives in connection with this Agreement and the consummation of the transactions contemplated hereby shall be deemed to be "Confidential Information" to the extent such information would be considered "Confidential Information," in each case, as such term is used in, and shall be treated in accordance with, the Confidentiality Agreement, dated as of February 10, 2007, between the Company and Centerbridge Associates, L.P. (the "Confidentiality Agreement") and any other confidentiality agreements entered into by co-investors in Parent had it been provided prior to the date of this Agreement; provided, that Parent shall be entitled to share such Confidential Information with the parties providing the Financing, prospective co-investors or limited partners of the members of Parent; provided further, however, that any parties providing the Financing, prospective co-investors or limited partners of the members of Parent to whom Parent provides Confidential Information shall agree in writing to be bound by the confidentiality provisions of the Confidentiality Agreement or shall execute their own confidentiality agreements with the Company. -31- Section 5.3 No Solicitation. (a) Subject to Sections 5.3(b)-(g), the Company agrees that neither it nor any Subsidiary of the Company shall, and that it shall direct its and their respective officers, directors, employees, agents and representatives, including any investment banker, attorney or accountant retained by it or any of its Subsidiaries ("Representatives") not to, directly or indirectly, (i) initiate, solicit, knowingly encourage (including by providing information) or facilitate any inquiries, proposals or offers with respect to, or the making or completion of, an Alternative Proposal, (ii) engage or participate in any negotiations concerning, or provide or cause to be provided any non-public information or data relating to the Company or any of its Subsidiaries, in connection with, or have any discussions with any person relating to, an actual or proposed Alternative Proposal, or otherwise knowingly encourage or facilitate any effort or attempt to make or implement an Alternative Proposal, (iii) approve, endorse or recommend, or propose publicly to approve, endorse or recommend, any Alternative Proposal, (iv) approve, endorse or recommend, or propose to approve, endorse or recommend, or execute or enter into, any letter of intent, agreement in principle, merger agreement, acquisition agreement, option agreement or other similar agreement relating to any Alternative Proposal, (v) amend, terminate, waive or fail to enforce, or grant any consent under, any confidentiality, standstill or similar agreement, or (vi) resolve to propose or agree to do any of the foregoing. Without limiting the foregoing, it is understood that any violation of the foregoing restrictions by any Subsidiary of the Company or Representatives of the Company or any of its Subsidiaries shall be deemed to be a breach of this Section 5.3 by the Company. (b) The Company shall, and shall cause each of its Subsidiaries and Representatives to, immediately cease any existing solicitations, discussions or negotiations with any Person (other than the parties hereto) that has made or indicated an intention to make an Alternative Proposal. (c) Notwithstanding anything to the contrary in Section 5.3(a), the Company may, in response to an unsolicited Alternative Proposal which did not result from or arise in connection with a breach of Section 5.3(a) and which the Board of Directors of the Company (acting through its Special Committee) determines, in good faith, after consultation with its outside counsel and financial advisors, may reasonably be expected to result in a Superior Proposal, (i) furnish information with respect to the Company and its Subsidiaries to the person making such Alternative Proposal and its Representatives pursuant to a customary confidentiality agreement no less restrictive (including with respect to standstill provisions) of the other party than the Confidentiality Agreement and (ii) participate in discussions or negotiations with such person and its Representatives regarding such Alternative Proposal; provided, however, (i) that Parent shall be entitled to receive an executed copy of such confidentiality agreement prior to or substantially simultaneously with the Company furnishing information to the person making such Alternative Proposal or its Representatives and (ii) that the Company shall simultaneously provide or make available to Parent any material non-public information concerning the Company or any of its Subsidiaries that is provided to the person making such Alternative Proposal or its Representatives which was not previously provided or made available to Parent. (d) Subject to Section 7.1(c)(ii), neither the Board of Directors of the Company nor any committee thereof shall (i) withdraw or modify in a manner adverse to Parent or Merger Sub, or resolve to or publicly propose to withdraw -32- or modify in a manner adverse to Parent or Merger Sub, the Recommendation, (ii) approve any letter of intent, agreement in principle, acquisition agreement or similar agreement relating to any Alternative Proposal or (iii) approve or recommend, resolve to or publicly propose to approve, endorse or recommend, any Alternative Proposal (any of the foregoing actions in clauses (i) through (iii), whether taken by the Board of Directors of the Company or a committee thereof, a "Change in Board Recommendation"). Notwithstanding the foregoing, but subject to Section 5.4(b), if, prior to receipt of the Company Shareholder Approval, the Board of Directors of the Company or the Special Committee determines in good faith, after consultation with its outside counsel and financial advisors, that failure to so withdraw or modify its Recommendation would be inconsistent with the Board of Directors of the Company's or the Special Committee's exercise of its fiduciary duties, the Board of Directors of the Company or the Special Committee may withdraw or modify its Recommendation. (e) The Company promptly (and in any event within 24 hours) shall advise Parent orally and in writing of (i) the receipt of any Alternative Proposal, (ii) the identity of the person making any such Alternative Proposal and (iii) the material terms of any such Alternative Proposal. The Company shall keep Parent reasonably informed on a current basis of any material change to the terms of any such Alternative Proposal. (f) Notwithstanding the foregoing, other than in connection with a termination of this Agreement pursuant to Section 7.1(c)(ii) to accept a Superior Proposal, the Company shall not waive Article 13.03 of the TBCA or amend the Company Rights Agreement, redeem any of the Rights (as defined in the Company Rights Agreement), or otherwise take any action to render the provisions of the Company Rights Agreement inapplicable, with respect to any Person other than Parent, its shareholders and their respective Affiliates. (g) Nothing contained in this Agreement shall prohibit the Company or its Board of Directors from disclosing to its shareholders a position contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act; provided, however, that neither the Company nor the Board of Directors of the Company (or any committee thereof) shall in any event be entitled to disclose a position under Rules 14d-9 or 14e-2(a) promulgated under the Exchange Act other than the Recommendation unless the Board of Directors of the Company or the Special Committee determines in good faith, after consultation with its outside counsel and financial advisors, that a failure to so withdraw or modify its Recommendation would be inconsistent with the Board of Directors of the Company's or the Special Committee's exercise of its fiduciary duties. (h) As used in this Agreement, "Alternative Proposal" shall mean (i) any proposal or offer from any Person or group of Persons other than Parent or one of its Subsidiaries for a merger, consolidation, dissolution, recapitalization or other business combination involving the Company or any of its Subsidiaries, (ii) any proposal for the issuance by the Company of over 15% of its equity securities or (iii) any proposal or offer to acquire in any manner, directly or indirectly, over 15% of the equity securities or consolidated total assets of the Company and its Subsidiaries, in each case other than the Merger. -33- (i) As used in this Agreement, "Superior Proposal" shall mean any Alternative Proposal, (i) on terms which the Board of Directors of the Company (or the Special Committee) determines in good faith, after consultation with the Company's outside legal counsel and financial advisors, to be more favorable from a financial point of view to the holders of Company Common Stock than the Merger (other than those holders of Company Common Stock that are party to a Rollover Commitment), taking into account all the terms and conditions of such proposal, and this Agreement (including any proposal or offer by Parent to amend the terms of this Agreement and the Merger during the applicable time periods specified in Section 7.1(c)(ii)) and (ii) that the Board of Directors (or the Special Committee) believes is reasonably capable of being completed, taking into account all financial, regulatory, legal and other aspects of such proposal; provided that for purposes of the definition of "Superior Proposal," the references to "15%" in the definition of "Alternative Proposal" shall be deemed to be references to "50%." Section 5.4 Filings; Other Actions. (a) As promptly as reasonably practicable following the date of this Agreement, the Company shall prepare the Proxy Statement, and the Company and Parent shall prepare the Schedule 13E-3. Parent and the Company shall cooperate with each other in connection with the preparation of the foregoing documents. The Company will use its reasonable best efforts to have the Proxy Statement, and Parent and the Company will use their reasonable best efforts to have the Schedule 13E-3, cleared by the SEC as promptly as practicable after such filing. The Company will use its reasonable best efforts to cause the Proxy Statement to be mailed to the Company's shareholders as promptly as practicable after the Proxy Statement is cleared by the SEC. The Company shall as promptly as practicable notify Parent of the receipt of any oral or written comments from the SEC relating to the Proxy Statement. The Company shall cooperate and provide Parent with a reasonable opportunity to review and comment on the draft of the Proxy Statement (including each amendment or supplement thereto), and Parent and the Company shall cooperate and provide each other with a reasonable opportunity to review and comment on the draft Schedule 13E-3 (including each amendment or supplement thereto) and all responses to requests for additional information by and replies to comments of the SEC, prior to filing such with or sending such to the SEC, and Parent and the Company will provide each other with copies of all such filings made and correspondence with the SEC with respect thereto. If at any time prior to the Effective Time, any information should be discovered by any party hereto which should be set forth in an amendment or supplement to the Proxy Statement or the Schedule 13E-3 so that the Proxy Statement or the Schedule 13E-3 would not include any misstatement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the party which discovers such information shall promptly notify the other parties hereto and, to the extent required by applicable Law, an appropriate amendment or supplement describing such information shall be promptly filed by the Company with the SEC and disseminated by the Company to the shareholders of the Company. (b) Subject to the other provisions of this Agreement, the Company shall (i) take all action necessary in accordance with the TBCA and its articles of incorporation and bylaws to duly call, give notice of, convene and hold a meeting of its shareholders as promptly as reasonably practicable following the mailing of the Proxy Statement for the purpose of obtaining the Company -34- Shareholder Approval (such meeting or any adjournment or postponement thereof, the "Company Meeting"), and (ii) subject to the Board of Directors of the Company's or the Special Committee's withdrawal or modification of its Recommendation in accordance with Section 5.3(d), use all reasonable best efforts to solicit from its shareholders proxies in favor of the approval of this Agreement, the Merger and the other transactions contemplated hereby. Notwithstanding anything in this Agreement to the contrary, unless this Agreement is terminated in accordance with Section 7.1 and subject to compliance with Section 7.2, the Company, regardless of whether the Board of Directors (whether or not acting through the Special Committee, if then in existence) has approved, endorsed or recommended an Alternative Proposal or has withdrawn, modified or amended the Recommendation, will submit this Agreement for approval by the shareholders of the Company at such meeting. Section 5.5 Stock Options and Other Stock-Based Awards; Employee Matters. (a) Stock Options and Other Stock-Based Awards. (i) Except as otherwise agreed in writing by the Company and Parent and the applicable holder thereof, each option or other award to purchase shares of Company Common Stock (each, a "Company Stock Option") granted under any employee or director equity plans of the Company (the "Company Stock Plans"), whether vested or unvested, that is outstanding immediately prior to the Effective Time shall (notwithstanding any provisions to the contrary in the Company Stock Plans or applicable option grants), as of the Effective Time, become fully vested and be converted into the right to receive an amount in cash in U.S. dollars equal to the product of (x) the total number of shares of Company Common Stock subject to such Company Stock Option and (y) the excess, if any, of the amount of the Merger Consideration over the exercise price per share of Company Common Stock subject to such Company Stock Option (or if there is not any such excess, zero) with the aggregate amount of such payment rounded to the nearest cent (the aggregate amount of such cash hereinafter referred to as the "Option Consideration") less such amounts as are required to be withheld or deducted under the Code or any provision of federal, state, local or foreign Tax Law with respect to the making of such payment. (ii) Except as otherwise agreed in writing by the Company and Parent and the applicable holder thereof, immediately prior to the Effective Time, each right of any kind, contingent or accrued, to receive shares of Company Common Stock or benefits measured in whole or in part by the value of a number of shares of Company Common Stock granted under the Company Stock Plans or Company Benefit Plans (including, but not limited to, performance shares, stock appreciation rights, restricted stock, restricted stock units, phantom stock or units, deferred stock units and dividend equivalents), other than Restricted Shares (as hereinafter defined), Purchase Plan Shares (as hereinafter defined) and Company Stock Options (each, other than Restricted Shares, Purchase Plan Shares and Company Stock Options, a "Company Stock-Based Award"), whether vested or unvested, which is outstanding immediately prior to the Effective Time shall (notwithstanding any provisions to the contrary under the applicable plans or grant awards), as of the Effective Time, cease to represent a right or award with respect to shares of Company Common Stock, shall become fully vested and shall entitle the holder thereof to receive, pursuant to Section 2.2(a) and (b), an amount in cash equal to the Merger Consideration in respect of each Share underlying a particular Company Stock-Based Award (the aggregate amount of such -35- cash, together with the Option Consideration, hereinafter referred to as the "Option and Stock-Based Consideration") less such amounts as are required to be withheld or deducted under the Code or any provision of federal, state, local or foreign Tax Law with respect to the making of such payment. (iii) Except as otherwise agreed in writing by the Company and Parent and the applicable holder thereof, and notwithstanding any contrary provisions, if any, in any plan or agreement or otherwise relating to such Restricted Shares, immediately prior to the Effective Time, each award of restricted Company Common Stock (the "Restricted Shares") shall vest in full and be converted into the right to receive the Merger Consideration as provided in Section 2.1(a). (iv) At the Effective Time, the Company's Stock Purchase Plan shall terminate. In connection with such termination, the Company shall refund to the participants in the Stock Purchase Plan any accumulated payroll deductions in respect of any Purchase Period ending after the Effective Time. The participants in the Stock Purchase Plan shall be entitled to continue to make purchases of Company Common Stock pursuant to the terms of the Stock Purchase Plan for any Purchase Period ending prior to the Effective Time and such shares (the "Purchase Plan Shares") of Company Common Stock shall be converted into the right to receive the Merger Consideration in accordance with Section 2.1(a). After the date hereof, no participant in the Stock Purchase Plan may increase the percentage amount of his or her payroll deduction election from those in effect on the date hereof. (v) Prior to the Effective Time, the Compensation Committee of the Board of Directors of the Company, or the Board of Directors of the Company, as appropriate, shall make such adjustments and amendments to, make such determinations or take such actions with respect to Company Stock Plans, Company Stock Options, Company Benefit Plans, Company Stock-Based Awards, Restricted Shares and Purchase Plan Shares, including obtaining consents where necessary, to implement the foregoing provisions of this Section 5.5. (b) Employee Matters. (i) From and after the Effective Time, Parent shall honor all Company Benefit Plans and compensation arrangements and agreements in accordance with their terms as in effect immediately before the Effective Time, provided that nothing herein shall limit the right of the Company or Parent from amending or terminating such Company Benefit Plans, arrangements and agreements in accordance with their terms. For a period of one (1) year following the Effective Time, Parent shall provide, or shall cause to be provided, to each current and former employee of the Company and its Subsidiaries other than such employees covered by collective bargaining agreements (each, a "Company Employee") compensation opportunities that are substantially comparable and benefits that in the aggregate are substantially comparable to the compensation opportunities and benefits (excluding equity-based compensation) provided to such Company Employee immediately before the Effective Time, it being understood that the total package of such compensation and benefits may be different from the compensation and benefits provided to the Company Employees prior to the Effective Time. -36- (ii) For all purposes (including purposes of vesting, eligibility to participate and level of benefits) under the employee benefit plans of Parent and its Subsidiaries providing benefits to any Company Employees after the Effective Time as required pursuant to this Section 5.5(b) (the "New Plans"), each Company Employee shall be credited with his or her years of service with the Company and its Subsidiaries and their respective predecessors before the Effective Time, to the same extent as such Company Employee was entitled, before the Effective Time, to credit for such service under any similar Company employee benefit plan in which such Company Employee participated or was eligible to participate immediately prior to the Effective Time, provided that the foregoing shall not apply with respect to benefit accrual under any defined benefit pension plan or to the extent that its application would result in a duplication of benefits. In addition, and without limiting the generality of the foregoing, (A) each Company Employee shall be immediately eligible to participate, without any waiting time, in any and all New Plans to the extent coverage under such New Plan is comparable to a Company Benefit Plan in which such Company Employee participated immediately before the consummation of the Merger (such plans, collectively, the "Old Plans"), and (B) for purposes of each New Plan providing medical, dental, pharmaceutical and/or vision benefits to any Company Employee, Parent shall cause all pre-existing condition exclusions and actively-at-work requirements of such New Plan to be waived for such employee and his or her covered dependents, unless such conditions would not have been waived under the comparable plans of the Company or its Subsidiaries in which such employee participated immediately prior to the Effective Time and Parent shall cause any eligible expenses incurred by such employee and his or her covered dependents during the portion of the plan year of the Old Plan ending on the date such employee's participation in the corresponding New Plan begins to be taken into account under such New Plan for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with such New Plan. (iii) Nothing contained herein shall be construed as requiring Parent or the Surviving Corporation to continue (or resume) the employment of any specific person. (iv) Without limiting the generality of Section 8.10, no provision of this Section 5.5 shall be construed to create any third party beneficiary rights in any employee, officer, current or former director or consultant of the Company or its Subsidiaries, or any beneficiary of such employee, officer, director or consultant under a Company Benefit Plan or otherwise, and is not intended to constitute an amendment to any Company Benefit Plan. (v) Parent hereby acknowledges that a "change of control" (or similar phrase) within the meaning of the Company Benefit Plans, as applicable, will occur at or prior to the Effective Time, as applicable. Section 5.6 Efforts. (a) Subject to the terms and conditions set forth in this Agreement, each of the parties hereto shall, and shall cause its Subsidiaries to, use its reasonable best efforts (subject to, and in accordance with, applicable Law) to take promptly, or to cause to be taken, all actions, and to do promptly, or to cause to be done, and to assist and to cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective the Merger and the other transactions contemplated hereby, including -37- (i) the obtaining of all necessary actions or nonactions, waivers, consents and approvals, including the Company Approvals and the Parent Approvals, from Governmental Entities and the making of all necessary registrations and filings and the taking of all steps as may be necessary to obtain an approval or waiver from, or to avoid an action or proceeding by, any Governmental Entity, (ii) the obtaining of all necessary consents, approvals or waivers from third parties, (iii) the defending of any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the transactions contemplated hereby and (iv) the execution and delivery of any additional instruments reasonably necessary to consummate the transactions contemplated hereby; provided, however, that in no event shall the Company or any of its Subsidiaries be required to pay prior to the Effective Time any fee, penalties or other consideration to any third party to obtain any consent or approval required for the consummation of the Merger under any Contract (other than de minimis amounts or if Parent and Merger Sub have provided adequate assurance of repayment). (b) Subject to the terms and conditions herein provided and without limiting the foregoing, the Company and Parent shall (i) promptly as practicable after the date hereof, make their respective filings and thereafter make any other required submissions under the HSR Act, (ii) use reasonable best efforts to cooperate with each other in (x) determining whether any filings are required to be made with, or consents, permits, authorizations, waivers or approvals are required to be obtained from, any third parties or other Governmental Entities in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and (y) timely making all such filings and timely seeking all such consents, permits, authorizations or approvals, (iii) use reasonable best efforts to take, or to cause to be taken, all other actions and to do, or to cause to be done, all other things necessary, proper or advisable to consummate and make effective the Merger and the other transactions contemplated hereby, including taking all such further action as reasonably may be necessary to resolve such objections, if any, as the United States Federal Trade Commission, the Antitrust Division of the United States Department of Justice, state or foreign antitrust enforcement authorities or competition authorities, other Governmental Entities in connection with the Specified Regulatory Clearances, or other state or federal regulatory authorities of any other nation or other jurisdiction or any other person may assert under Regulatory Law (as hereinafter defined) with respect to the Merger and the other transactions contemplated hereby, and to avoid or eliminate each and every impediment under any Law that may be asserted by any Governmental Entity with respect to the Merger so as to enable the Closing to occur as soon as reasonably possible (and in any event no later than the End Date (as hereinafter defined)), and (iv) subject to applicable legal limitations and the instructions of any Governmental Entity, keep each other apprised of the status of matters relating to the completion of the transactions contemplated by this Agreement, including to the extent permitted by Law promptly furnishing the other with copies of notices or other communications received by the Company or Parent, as the case may be, or any of their Subsidiaries, from any third party and/or any Governmental Entity with respect thereto. (c) Subject to Section 5.11, and in furtherance and not in limitation of the covenants of the parties contained in this Section 5.6, if any administrative or judicial action or proceeding, including any proceeding by a private party, is instituted (or threatened to be instituted) challenging the Merger or any other transaction contemplated by this Agreement, each of the -38- Company and Parent shall cooperate in all respects with each other and shall use their respective reasonable best efforts to contest and resist any such action or proceeding and to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of the Merger or any other transactions contemplated hereby. Notwithstanding the foregoing or any other provision of this Agreement, nothing in this Section 5.6 shall limit a party's right to terminate this Agreement pursuant to Section 7.1(b)(i) or (ii) so long as such party has, prior to such termination, complied with its obligations under this Section 5.6. (d) For purposes of this Agreement, "Regulatory Law" means any and all state, federal and foreign statutes, rules, regulations, orders, decrees, administrative and judicial doctrines and other Laws requiring notice to, filings with, or the consent or approval of, any Governmental Entity, or that otherwise may cause any restriction, in connection with the Merger and the transactions contemplated thereby, including (i) the Sherman Act of 1890, the Clayton Antitrust Act of 1914, the HSR Act, the Federal Trade Commission Act of 1914 and all other Laws that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or lessening competition through merger or acquisition, (ii) any Law governing the direct or indirect ownership or control of any of the operations or assets of the Company and its Subsidiaries or (iii) any Law with the purpose of protecting the national security or the national economy of any nation. Section 5.7 Takeover Statute. If any "fair price," "moratorium," "control share acquisition" or other form of anti-takeover statute or regulation shall become applicable to the Merger, the Voting Agreement, the Rollover Commitments or the other transactions contemplated, by this Agreement, each of the Company and Parent and the members of their respective Boards of Directors shall grant such approvals and take such actions as are reasonably necessary so that the Merger, the Voting Agreement, the Rollover Commitments and the other transactions contemplated hereby may be consummated as promptly as practicable on the terms contemplated herein and otherwise act to eliminate or minimize the effects of such statute or regulation on the Merger, the Voting Agreement, the Rollover Commitments and the other transactions contemplated hereby. Section 5.8 Public Announcements. Except with respect to a Change in Board Recommendation, the Company and Parent will consult with and provide each other the opportunity to review and comment upon any press release or other public statement or comment prior to the issuance of such press release or other public statement or comment relating to this Agreement or the transactions contemplated herein (other than routine employee communications) and shall not issue any such press release or other public statement or comment prior to such consultation except as such party in its good faith judgment may be required by applicable Law or by obligations pursuant to any listing agreement with any national securities exchange, it being understood that the final form of any release or statement shall be at the final discretion of the issuing party. Parent and the Company agree to issue a joint press release announcing the execution and delivery of this Agreement. -39- Section 5.9 Indemnification and Insurance. (a) Parent and Merger Sub agree that all rights to exculpation, indemnification (including rights accruing under self-insurance arrangements in respect of deductibles, coverage limits or forgone third-party insurance) and advancement of expenses for acts or omissions occurring at or prior to the Effective Time, whether asserted or claimed prior to, at or after the Effective Time, now existing in favor of the current or former directors, officers or employees (in their capacity as such and not as shareholders or option holders of the Company or its Subsidiaries), as the case may be, of the Company or its Subsidiaries as provided in their respective articles of incorporation or bylaws or other organization documents or in any agreement shall survive the Merger and shall continue in full force and effect. For a period of six (6) years from the Effective Time, Parent and the Surviving Corporation shall maintain in effect the exculpation, indemnification and advancement of expenses and arrangement of self-insurance provisions of the Company's and any of its Subsidiaries' articles of incorporation and bylaws or similar organization documents in effect immediately prior to the Effective Time or in any indemnification agreements of the Company or its Subsidiaries with any of their respective directors, officers or employees in effect as of the date hereof, and shall not amend, repeal or otherwise modify any such provisions in any manner that would adversely affect the rights thereunder of any individuals who at the Effective Time were current or former directors, officers or employees of the Company or any of its Subsidiaries; provided, however, that all rights to indemnification in respect of any Action (as hereinafter defined) pending or asserted or any claim made within such period shall continue until the disposition of such Action or resolution of such claim. (b) From and after the Effective Time, each of Parent and the Surviving Corporation shall, jointly and severally, to the fullest extent permitted under applicable Law, indemnify and hold harmless (and advance funds in respect of each of the foregoing) each current and former director, officer or employee of the Company or any of its Subsidiaries (each, together with such person's heirs, executors or administrators, an "Indemnified Party") against any costs or expenses (including advancing reasonable attorneys' fees and expenses in advance of the final disposition of any claim, suit, proceeding or investigation to each Indemnified Party to the fullest extent permitted by Law), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement in connection with any actual or threatened claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative (an "Action"), arising out of, relating to or in connection with any action or omission occurring or alleged to have occurred whether before or after the Effective Time (including acts or omissions in connection with such persons serving as an officer, director or other fiduciary in any entity if such service was at the request or for the benefit of the Company); provided, however, that neither Parent nor the Surviving Corporation shall be liable for any settlement effected without either Parent's or the Surviving Corporation's prior written consent, and the Surviving Corporation shall not be obligated to pay the fees and expenses of more than one counsel (selected by a plurality of the applicable Indemnified Parties) for all Indemnified Parties in any jurisdiction with respect to any single such claim, action, suit, proceeding or investigation; provided, further, however, that if any Indemnified Party or group of Indemnified Parties is advised in writing by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party or group of Indemnified Parties and another Indemnified Party or group of Indemnified Parties, then the Surviving Corporation shall pay the fees and -40- expenses of the minimum number of counsel as are required to eliminate such conflicts of interest. It shall be a condition to the advancement of any amounts to be paid in respect of legal and other fees and expenses that the Surviving Corporation receive an undertaking by the Indemnified Party to repay such legal and other fees and expenses paid in advance if it is ultimately determined that such Indemnified Party is not entitled to be indemnified under applicable Law. In the event of any such Action, Parent and the Surviving Corporation shall reasonably cooperate with the Indemnified Party in the defense of any such Action. (c) For a period of six (6) years from the Effective Time, Parent shall either cause to be maintained in effect the current policies of directors' and officers' liability insurance and fiduciary liability insurance maintained by the Company and its Subsidiaries or cause the Surviving Corporation to provide substitute policies or cause the Surviving Corporation to purchase, a "tail policy," in either case of at least the same coverage and amounts containing terms and conditions that are not less advantageous in the aggregate than such policy with respect to matters arising on or before the Effective Time; provided, however, that after the Effective Time, such Persons shall not be required to pay with respect to such insurance policies in respect of any one policy year more than 200% of the last annual premium paid by the Company prior to the date hereof in respect of the coverages required to be obtained pursuant hereto, but in such case shall purchase as much coverage as reasonably practicable for such amount; and further provided that if the Surviving Corporation purchases a "tail policy" and the same coverage costs more than 200% of such last annual premium, the Surviving Corporation shall purchase the maximum amount of coverage that can be obtained for 200% of such last annual premium. (d) The rights of each Indemnified Party hereunder shall be in addition to, and not in limitation of, any other rights such Indemnified Party may have under the articles of incorporation or bylaws or other organizational documents of the Company or any of its Subsidiaries or the Surviving Corporation, any other indemnification arrangement, self-insurance arrangement, the TBCA or otherwise. The provisions of this Section 5.9 shall survive the consummation of the Merger and expressly are intended to benefit, and are enforceable by, each of the Indemnified Parties. Nothing in this Agreement is intended to, shall be construed to or shall release, waive or impair any rights to directors' and officers' insurance claims under any policy that is or has been in existence with respect to the Company or any of its Subsidiaries or their respective officers, directors and employees, it being understood and agreed that the indemnification provided for in this Section 5.9 is not prior to or in substitution for any such claims under any such policies. (e) This Section 5.9 shall survive the consummation of the Merger and is intended to be for the benefit of, and shall be enforceable by, present or former directors or officers of the Company or its Subsidiaries, their respective heirs and personal representatives and shall be binding on Parent and the Surviving Corporation and their respective successors and assigns. In the event Parent, the Surviving Corporation or any of their respective successors or assigns (i) consolidates with or merges into any other person and shall not be the continuing or surviving corporation or entity in such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any person, then, and in either such case, proper provision shall be made so that the successors and assigns of Parent or the Surviving Corporation, as the case may be, shall assume the obligations set forth in this Section 5.9. -41- Section 5.10 Financing. Parent shall use its reasonable best efforts to obtain the Financing on the terms and conditions described in the Financing Commitments or terms more favorable to Parent, including using its reasonable best efforts (i) to negotiate definitive agreements with respect thereto on the terms and conditions contained in the Financing Commitments, (ii) to satisfy all conditions applicable to Parent in such definitive agreements, (iii) to comply with its obligations under the Financing Commitments, (iv) to enforce its rights under the Financing Commitments, and (v) to consummate the Financing at or prior to the Closing. Parent shall give the Company prompt notice upon becoming aware of any material breach by any party of the Financing Commitments or any termination of the Financing Commitments. Parent shall keep the Company informed on a reasonably current basis and in reasonable detail of the status of its efforts to arrange the Financing and provide to the Company copies of all material documents related to the Financing (other than any ancillary documents subject to confidentiality agreements). In connection with its obligations under this Section 5.10, Parent shall be permitted to amend, modify or replace the Debt Commitment Letters with new Financing Commitments, including through co-investment by or financing from one or more other additional parties (the "New Financing Commitments"), provided Parent shall not permit any replacement of, or amendment or modification to be made to, or any waiver of any material provision or remedy under, the Debt Commitment Letter if such replacement (including through co-investment by or financing from one or more other additional parties), amendment, modification, waiver or remedy reduces the aggregate amount of the Financing or adversely amends or expands the conditions to the drawdown of the Financing in any respect that would make such conditions materially less likely to be satisfied or that can reasonably be expected to materially delay the Closing. In the event that Parent becomes aware of any event or circumstance that makes procurement of any portion of the Financing unlikely to occur in the manner or from the sources contemplated in the Financing Commitments, Parent shall notify the Company and shall use its reasonable best efforts to arrange as promptly as practicable any such portion from alternative sources (including through co-investment by one or more other additional parties) on terms and conditions no less favorable to Parent or Merger Sub. The Company shall provide, and shall cause its Subsidiaries, and shall cause each of its and their respective Representatives, including legal and accounting, to provide, all cooperation reasonably requested by Parent in connection with the Financing and the other transactions contemplated by this Agreement (provided that such requested cooperation does not unreasonably interfere with the ongoing operations of the Company and its Subsidiaries), including (i) providing reasonably required information relating to the Company and its Subsidiaries to the parties providing the Financing, (ii) participating in meetings, drafting sessions and due diligence sessions in connection with the Financing, (iii) assisting in the preparation of (A) any offering documents for any of the Debt Financing, and (B) materials for rating agency presentations, (iv) reasonably cooperating with the marketing efforts for any of the Debt Financing (including consenting to the use of the Company's and its Subsidiaries' logos), and (v) executing and delivering (or obtaining from its advisors), and causing its Subsidiaries to execute and deliver (or obtain from its advisors), customary certificates (including a certificate of the principal financial officer of the Company or any Subsidiary with respect to solvency matters), accounting comfort letters (including consents of accountants for use of their reports in any materials relating to the Debt Financing), legal opinions, surveys, title insurance or 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 -42- Financing, (vi) entering into one or more credit or other agreements on terms satisfactory to Parent and that are reasonably requested by Parent in connection with the Debt Financing immediately prior to the Effective Time, and (vii) taking all corporate actions, subject to the occurrence of the Closing, reasonably requested by Parent to permit the consummation of the Debt Financing and the direct borrowing or incurrence of all of the proceeds of the Debt Financing, by the Surviving Corporation immediately following the Effective Time; provided, however, that no obligation of the Company or any of its Subsidiaries under any such agreement, certificate, document or instrument shall be effective until the Effective Time and none of the Company or any of its Subsidiaries shall be required to pay any commitment or other similar fee or incur any other liability in connection with the Financing prior to the Effective Time. Parent shall promptly, upon request by the Company, reimburse the Company for all reasonable out-of-pocket third party costs incurred by the Company in connection with this Section 5.10. Section 5.11 Shareholder Litigation. The Company shall give Parent the opportunity to participate, subject to a customary joint defense agreement, in, but not control, the defense or settlement of any shareholder litigation against the Company and/or its directors relating to the Merger or any other transactions contemplated hereby and no such settlement shall in any event be agreed to without Parent's consent (not to be unreasonably withheld). Section 5.12 Notification of Certain Matters. The Company shall give prompt notice to Parent, and Parent shall give prompt notice to the Company, of (i) any notice or other communication received by such party from any Governmental Entity in connection with the Merger or the other transactions contemplated hereby or from any person alleging that the consent of such person is or may be required in connection with the Merger or the other transactions contemplated hereby, if the subject matter of such communication or the failure of such party to obtain such consent could be material to the Company, the Surviving Corporation or Parent, (ii) any actions, suits, claims, investigations or proceedings commenced or, to such party's Knowledge, threatened against, relating to or involving or otherwise affecting such party or any of its Subsidiaries which relate to the Merger or the other transactions contemplated hereby, (iii) the discovery of any fact or circumstance that, or the occurrence or non-occurrence of any event the occurrence or non-occurrence of which, would cause or result in any of the conditions to the Merger set forth in Article VI not being satisfied or satisfaction of those conditions being materially delayed in violation of any provision of this Agreement; provided, however, that the delivery of any notice pursuant to this Section 5.12 shall not (x) cure any breach of, or non-compliance with, any other provision of this Agreement or (y) limit the remedies available to the party receiving such notice. The Company shall notify Parent, on a reasonably current basis, of any events or changes with respect to any criminal or regulatory investigation or action involving the Company or any of its Affiliates (but excluding traffic violations and similar misdemeanors), and shall reasonably cooperate with Parent or its Affiliates in efforts to mitigate any adverse consequences to Parent or its Affiliates which may arise therefrom (including by coordinating and providing assistance in meeting with regulators). Section 5.13 Rule 16b-3. Prior to the Effective Time, the Company shall take such steps as may be reasonably requested by any party hereto to cause dispositions of Company equity securities (including derivative securities) pursuant to the transactions contemplated by this Agreement by each individual who is a director or officer of the Company to be exempt under Rule 16b-3 -43- promulgated under the Exchange Act in accordance with that certain No-Action Letter dated January 12, 1999 issued by the SEC regarding such matters. Section 5.14 Rights Plan. The Company Rights Agreement shall terminate upon the Effective Time, without payment of any amounts to any holders thereunder. Section 5.15 Acquisition of Shares. Neither Parent nor Merger Sub shall, directly or indirectly, purchase any shares of Company Common Stock or otherwise intentionally acquire the right to vote shares of Company Common Stock, without the Company's prior written consent (other than pursuant to the Rollover Commitments). Section 5.16 Control of Operations. Without in any way limiting any party's rights or obligations under this Agreement, the parties understand and agree that (i) nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company's operations prior to the Effective Time, and (ii) prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its operations. Section 5.17 Notes and Amounts Outstanding Under Credit Agreement. At the direction of Parent, the Company shall give any notice to the Administrative Agent under the Company's First Amended and Restated Credit Agreement, dated as of September 30, 2005 (the "Credit Agreement") as is required in order for the Company to prepay all amounts outstanding under the Credit Agreement at such time as directed by Parent; provided, that any such notice shall not be required by the Company unless it may be made in accordance with the terms of the Credit Agreement and is subject to the consummation of the transactions contemplated by this Agreement. At the direction of Parent, the Company shall give any notice or make any offer to the holders of the Notes under the Company's Note Purchase Agreement, dated as of October 12, 2005, among the Company and the Purchasers named therein (the "Note Purchase Agreement") as are required in order for the Company to prepay the Notes at such time as may be reasonably requested and directed by Parent; provided, that any such notice and offer shall not be required by the Company unless it may be made in accordance with the terms of the Note Purchase Agreement and is subject to the consummation of the transactions contemplated by this Agreement. ARTICLE VI CONDITIONS TO THE MERGER Section 6.1 Conditions to Each Party's Obligation to Effect the Merger. The respective obligations of each party to effect the Merger shall be subject to the fulfillment (or waiver by all parties) at or prior to the Effective Time of the following conditions: (a) The Company Shareholder Approval shall have been obtained. (b) No restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Merger and/or the other transactions contemplated by this Agreement shall be in effect. -44- (c) Any applicable waiting period under the HSR Act shall have expired or been earlier terminated and all competition approvals or notices required for the consummation of the transactions contemplated by this Agreement under the Laws of Argentina, the European Union or other Governmental Entities in countries in which the Company and its Subsidiaries did business in excess of $10,000,000 in revenues in 2006 shall have been received or made. Section 6.2 Conditions to Obligation of the Company to Effect the Merger. The obligation of the Company to effect the Merger is further subject to the fulfillment or waiver of the following conditions: (a) (i) The representations and warranties of Parent and Merger Sub contained in Section 4.1 (Qualification, Organization) and Section 4.2(a) (Corporate Authority) shall be true and correct in all respects (except, in the case of Section 4.1(a) for such inaccuracies as are de minimis in the aggregate), in each case at and as of the date of this Agreement and at and as of the Closing Date as though made at and as of the Closing Date and (ii) the representations and warranties of Parent and Merger Sub set forth in this Agreement (other than in clause (i) above) shall be true and correct in all respects (disregarding any materiality or Parent Material Adverse Effect qualifiers contained therein) at and as of the date of this Agreement and at and as of the Closing Date as though made at and as of the Closing Date, except where the failure of such representations or warranties to be so true and correct would not have, individually or in the aggregate, a Parent Material Adverse Effect; provided, however, that, with respect to clauses (i) or (ii) hereof, representations and warranties that are made as of a particular date or period shall be true and correct (in the manner set forth in clauses (i) or (ii), as applicable) only as of such date or period. (b) Parent shall have in all material respects performed all obligations and complied with all covenants required by this Agreement to be performed or complied with by it prior to the Effective Time. (c) Parent shall have delivered to the Company a certificate, dated the Effective Time and signed by its Chief Executive Officer or another senior executive officer, certifying to the effect that the conditions set forth in Sections 6.2(a) and 6.2(b) have been satisfied. Section 6.3 Conditions to Obligation of Parent and Merger Sub to Effect the Merger. The obligation of Parent and Merger Sub to effect the Merger is further subject to the fulfillment or waiver of the following conditions: (a) (i) The representations and warranties of the Company contained in Section 3.1 (Qualification, Organization, Subsidiaries, etc.), Section 3.2 (Capital Stock), Section 3.3 (Subsidiaries), Section 3.4(a) (Corporate Authority), Section 3.12(a)(ii) (Absence of Certain Changes or Events), Section 3.21 (Required Vote of the Company Shareholders), and Section 3.24 (State Takeover Statutes; Rights Plan) shall be true and correct in all respects (except, in the case of Sections 3.1(a), 3.2 and 3.3 for such inaccuracies as are de minimis in the aggregate), in each case at and as of the date of this Agreement and at and as of the Closing Date as though made at and as of the Closing Date and (ii) the representations and warranties of the Company set forth in this Agreement (other than in clause (i) above) shall be true and -45- correct in all respects (disregarding any materiality or Company Material Adverse Effect qualifiers contained therein) as of the date of this Agreement and at and as of the Closing Date as though made at and as of the Closing Date, except where the failure of such representations or warranties to be so true and correct would not have, individually or in the aggregate, a Company Material Adverse Effect; provided, however, that, with respect to clauses (i) or (ii) hereof, representations and warranties that are made as of a particular date or period shall be true and correct (in the manner set forth in clauses (i) or (ii), as applicable) only as of such date or period. (b) The Company shall have in all material respects performed all obligations and complied with all covenants required by this Agreement to be performed or complied with by it prior to the Effective Time. (c) The Company shall have delivered to Parent a certificate, dated the Effective Time and signed by its Chief Executive Officer or another senior executive officer, certifying to the effect that the conditions set forth in Sections 6.3(a), 6.3(b) and 6.3(d) have been satisfied. (d) Since the date of this Agreement there shall not have been a Company Material Adverse Effect; Section 6.4 Frustration of Conditions. No party may rely on the failure of any condition set forth in this Article VI to be satisfied if such failure was caused by such party's failure to act in good faith or to use its reasonable best efforts to consummate the Merger and the other transactions contemplated by this Agreement. ARTICLE VII TERMINATION Section 7.1 Termination or Abandonment. Notwithstanding anything contained in this Agreement to the contrary, this Agreement may be terminated and abandoned at any time prior to the Effective Time, whether before or after any approval of the matters presented in connection with the Merger by the shareholders of the Company: (a) by the mutual written consent of the Company and Parent; (b) by either the Company or Parent, if: (i) the Effective Time shall not have occurred on or before September 18, 2007 (the "End Date") and the party seeking to terminate this Agreement pursuant to this Section 7.1(b)(i) shall not have breached its obligations under this Agreement in any manner that shall have proximately caused the failure to consummate the Merger on or before the End Date; provided, however, that in the event the conditions set forth in Section 6.1(c) shall not have been satisfied on or before the End Date, either Parent or the Company may unilaterally extend, by notice delivered to the other party on or prior to the original End Date, the End Date until December 18, 2007, in which case the End Date shall deemed to be for all purposes to be such date; -46- (ii) an injunction, other legal restraint or order shall have been entered permanently restraining, enjoining or otherwise prohibiting the consummation of the Merger and such injunction, other legal restraint or order shall have become final and non-appealable, provided that the party seeking to terminate this Agreement pursuant to this Section 7.1(b)(ii) shall have used its reasonable best efforts to remove such injunction, other legal restraint or order in accordance with Section 5.6; or (iii) the Company Meeting (including any adjournments thereof) shall have concluded and the Company Stockholder Approval contemplated by this Agreement shall not have been obtained; (c) by the Company, if: (i) Parent shall have breached or failed to perform any of its representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform (i) would result in a failure of a condition set forth in Section 6.1 or 6.2 and (ii) cannot be cured by the End Date, provided that the Company shall have given Parent written notice, delivered at least 30 days prior to such termination, stating the Company's intention to terminate this Agreement pursuant to this Section 7.1(c)(i) and the basis for such termination; provided, further, that the Company is not then in material breach of this Agreement so as to cause any of the conditions set forth in Section 6.1 or 6.3 not to be satisfied; or (ii) prior to the receipt of the Company Stockholder Approval, (A) the Board of Directors of the Company (or the Special Committee) has received a Superior Proposal, (B) in light of such Superior Proposal the Board of Directors of the Company (or the Special Committee) shall have determined in good faith, after consultation with its outside counsel and financial advisors, that the failure to withdraw or modify its Recommendation would be inconsistent with the Board of Directors of the Company's or the Special Committee's exercise of its fiduciary duties, (C) the Company has notified Parent in writing of the determinations described in clause (B) above which notice shall specify the material terms and conditions of any such Superior Proposal (including the identity of the party making such Superior Proposal), and shall have contemporaneously provided a copy of the relevant proposed transaction agreements with the party making such Superior Proposal and other material documents, (D) at least five Business Days following receipt by Parent of the notice referred to in clause (C) above, and taking into account any revised proposal made by Parent since receipt of the notice referred to in clause (C) above, such Superior Proposal remains a Superior Proposal and the Board of Directors of the Company (or the Special Committee) has again, following good faith negotiations with Parent during such five Business Day period, made the determinations referred to in clause (B) above (it being understood that in the event of any material revisions to the Superior Proposal, the Company shall be required to deliver a new written notice to Parent pursuant to clause (C) above and to comply with the requirements of this Section 7.1(c)(ii) with respect to such new written notice, except that all references in this clause (D) to five Business Days shall be deemed to be references to three Business Days in such event), (E) the Company has previously paid (or concurrently pays) the Termination Fee and (F) the Board of Directors of the Company (or the Special Committee) has approved or concurrently approves, and the Company concurrently enters into, a definitive agreement providing for the implementation of such Superior Proposal. -47- (d) by Parent, if: (i) the Company shall have breached or failed to perform any of its representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform (i) would result in a failure of a condition set forth in Section 6.1, Section 6.3(a), Section 6.3(b) or Section 6.3(d) and (ii) cannot be cured by the End Date, provided that Parent shall have given the Company written notice, delivered at least thirty (30) days prior to such termination, stating Parent's intention to terminate this Agreement pursuant to this Section 7.1(d)(i) and the basis for such termination; provided, further, that the Parent is not then in material breach of this Agreement so as to cause any of the conditions set forth in Section 6.1 or 6.2 not to be satisfied; (ii) the Board of Directors of the Company or the Special Committee withdraws, modifies or qualifies in a manner adverse to Parent or Merger Sub, or publicly proposes to withdraw, modify or qualify, in a manner adverse to Parent or Merger Sub, its Recommendation, fails to recommend to the Company's shareholders that they give the Company Stockholder Approval or approves, endorses or recommends, or publicly proposes to approve, endorse or recommend, any Alternative Proposal, including in any disclosure made pursuant to Rule 14e-2(a) promulgated under the Exchange Act; or (iii) since the date of this Agreement there shall have been a Company Material Adverse Effect that cannot be cured by the End Date. In the event of termination of this Agreement pursuant to this Section 7.1, this Agreement shall terminate (except for the Confidentiality Agreement, any other confidentiality agreements entered into by co-investors in Parent, the Guarantees and the provisions of Sections 7.2 and Article VIII), and there shall be no other liability on the part of the Company or Parent and Merger Sub, or any of their respective stockholders, partners, members, directors, officers or agents, as the case may be, to the other except liability arising out of any willful breach of any of the representations, warranties or covenants in this Agreement and any termination resulting therefrom (subject to any express limitations set forth in this Agreement), any action for fraud, or as provided for in the Confidentiality Agreement or the Guarantees, in which case the aggrieved party shall be entitled to all rights and remedies available at law or in equity. Section 7.2 Termination Fee; Expenses. (a) In the event that: (i) this Agreement is terminated by the Company pursuant to Section 7.1(c)(ii) then the Company shall pay to Parent a termination fee of $30,000,000 in cash (the "Termination Fee"); or (ii) (x) at any time after the date of this Agreement, an Alternative Proposal shall have been made known to the Company or publicly disclosed, (y) this Agreement is terminated by Parent pursuant to Section 7.1(b)(i) and as of the date of such termination the conditions to Parent's obligation to close set forth in Section 6.3(a) or Section 6.3(b) are not satisfied, or this Agreement is terminated by Parent or the Company pursuant to Section 7.1(b)(iii) (so long as, in the case of Section 7.1(b)(iii), the Alternative Proposal was publicly disclosed and not withdrawn at the time of the -48- Company Meeting) and (z) within 12 months after this termination, the Company enters into an agreement in respect of any Alternative Proposal or a transaction pursuant to which any Alternative Proposal is consummated, then the Company shall pay to Parent the Termination Fee (provided, that, for purpose of this Section 7.2(a)(ii), the term "Alternative Proposal" shall have the meaning assigned to such term in Section 5.3(h), except that the references to "15% or greater" and "15% or more" shall be deemed to be references to "50% or greater" and "50% or more," respectively); or (iii) this Agreement is terminated by Parent pursuant to Section 7.1(d)(i) or (ii), then the Company shall pay to Parent all of the Expenses (as hereinafter defined) of Parent and Merger Sub. Parent shall not claim a termination and a right to payment of the Expenses if it shall have been paid the Termination Fee. As used herein, "Expenses" shall mean all reasonable out-of-pocket documented fees and expenses (including all fees and expenses of counsel, accountants, consultants, financial advisors and investment bankers of Parent and its Affiliates), up to $15,000,000 in the aggregate, incurred by Parent, Merger Sub and their Affiliates or on their behalf in connection with or related to the authorization, preparation, negotiation, execution and performance of this Agreement and the Financing and all other matters related to the Merger; or (iv) (x) at any time after the date of this Agreement, an Alternative Proposal shall have been made known to the Company or publicly disclosed and (y) this Agreement is terminated by Parent or the Company pursuant to Section 7.1(b)(iii) (so long as the Alternative Proposal was publicly disclosed and not withdrawn at the time of the Company Meeting) and no Termination Fee is yet payable in respect thereof pursuant to Section 7.2(a)(ii), then the Company shall pay to Parent all of the Expenses of Parent and Merger Sub and thereafter the Company shall be obligated to pay to Parent the Termination Fee (net of the amount of Expenses previously actually paid to Parent pursuant to this sentence) in the event such fee is payable pursuant to Section 7.2(a)(ii) (provided, that, for purpose of this Section 7.2(a)(iv), the term "Alternative Proposal" shall have the meaning assigned to such term in Section 5.3(h), except that the references to "15% or greater" and "15% or more" shall be deemed to be references to "50% or greater" and "50% or more," respectively). (b) Parent shall pay to the Company a termination fee of $30,000,000 in cash (the "Parent Termination Fee") in the event that: (i) the Company shall terminate this Agreement pursuant to Section 7.1(b)(i) and the Effective Time shall not have occurred on or before the End Date as a result of Parent or Merger Sub's failure to obtain and consummate the Financing; provided that this Section 7.2(b)(i) shall not be applicable in the event that the Financing cannot be consummated as a result of the failure of any condition set forth in Section 6.1 or Section 6.3 to have been satisfied; or (ii) the Company shall terminate this Agreement pursuant to Section 7.1(c)(i) and the Parent shall have willfully breached any of its representations, warranties or covenants in this Agreement as to give the Company the right to terminate pursuant to 7.1(c)(i). -49- (c) Any payment required to be made pursuant to clause (i) of Section 7.2(a) shall be made to Parent concurrently with, and as a condition to the effectiveness of, the termination of this Agreement by the Company pursuant to Section 7.1(c)(ii); any payment required to be made by the Company pursuant to clause (ii) of Section 7.2(a) shall be made to Parent promptly (and in any event not later than two Business Days following the consummation of the Alternative Proposal); and, in circumstances in which Expenses are payable, such payment shall be made to Parent not later than two Business Days after delivery to the Company of an itemization setting forth in reasonable detail all Expenses of Parent (which itemization may be supplemented and updated from time to time by such party until the 60th day after such party delivers such notice of demand for payment). All such payments shall be made by wire transfer of immediately available funds to an account to be designated by Parent. Any payment required to be made pursuant to Section 7.2(b) shall be made to the Company promptly following termination of this Agreement by the Company (and in any event not later than two Business Days after delivery to Parent of notice of demand for payment), and such payment shall be made by wire transfer of immediately available funds to an account to be designated by the Company. (d) In the event that the Company shall fail to pay the Termination Fee and/or Expenses, or Parent shall fail to pay the Parent Termination Fee required pursuant to this Section 7.2 when due, such fee and/or Expenses, as the case may be, shall accrue interest for the period commencing on the date such fee and/or Expenses, as the case may be, became past due, at a rate equal to the rate of interest publicly announced by Citibank, in the City of New York from time to time during such period, as such bank's Prime Lending Rate. In addition, if either party shall fail to pay such fee and/or Expenses, as the case may be, when due, such owing party shall also pay to the owed party all of the owed party's costs and expenses (including attorneys' fees) in connection with efforts to collect such fee and/or Expenses, as the case may be. Parent and the Company acknowledge that the fees, Expense reimbursement and the other provisions of this Section 7.2 are an integral part of the Merger and that, without these agreements, Parent and the Company would not enter into this Agreement. (e) The Company acknowledges that the Parent Termination Fee is not a penalty, but rather is liquidated damages in a reasonable amount that will compensate the Company for the efforts and resources expended and opportunities foregone while negotiating this Agreement and in reliance on this Agreement and on the expectation of the consummation of the transactions contemplated hereby, which amount would otherwise be impossible to calculate with precision. Notwithstanding anything to the contrary in this Agreement, the Company's right to receive payment of the Parent Termination Fee pursuant to this Section 7.2 or the guarantee thereof pursuant to the Guarantees shall be the exclusive remedy of the Company against Parent, Merger Sub, the Guarantors or any of their respective stockholders, partners, members, directors, Affiliates, officers or agents in respect of this Agreement and the transactions contemplated hereby, and upon payment of the Parent Termination Fee in accordance with this Section 7.2, none of Parent, Merger Sub or the Guarantors, or any of their respective stockholders, partners, members, directors, Affiliates, officers or agents, as the case may be, shall have any further liability or obligation relating to or arising out of this Agreement or the transactions contemplated by hereby (except that Parent and the Guarantors (to the extent, and only to the extent, of the Guarantees) also shall be obligated with respect to the provisions of Section 7.2(d), Section 5.2(b) and the last sentence of Section 5.10). Parent and Merger Sub acknowledge and agree that, except in the case of a willful breach of any of -50- the representations, warranties or covenants in this Agreement by the Company, receipt of the Termination Fee shall be the sole and exclusive remedy of Parent and Merger Sub against that the Company, and shall in all cases be the sole and exclusive remedy against any of the Company's stockholders, partners, members, directors, Affiliates, officers or agents. ARTICLE VIII MISCELLANEOUS Section 8.1 No Survival of Representations and Warranties. None of the representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Merger. Section 8.2 Expenses. Except as set forth in Section 7.2, whether or not the Merger is consummated, all costs and expenses incurred in connection with the Merger, this Agreement and the transactions contemplated hereby shall be paid by the party incurring or required to incur such expenses. Section 8.3 Counterparts; Effectiveness. This Agreement may be executed in two or more consecutive counterparts (including by facsimile), each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument, and shall become effective when one or more counterparts have been signed by each of the parties and delivered (by telecopy or otherwise) to the other parties. Section 8.4 Governing Law. This Agreement, and all claims or causes of action (whether at law, in contract or in tort) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance hereof, shall be governed by and construed in accordance with the laws of the State of Delaware (other than with respect to matters governed by TBCA or TBOC, with respect to which such laws apply), without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. Section 8.5 Jurisdiction; Enforcement. The Company agrees that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that prior to the termination of this Agreement in accordance with Article VII Parent shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement exclusively in any federal or state court located in the State of Delaware, this being in addition to any other remedy which they are entitled at law or in equity. In addition, each of the parties hereto irrevocably agrees that any legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other party hereto or its successors or assigns, shall be brought and determined exclusively in any federal or state court located in the State of Delaware. Each of the parties hereto hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees -51- that it will not bring any action relating to this Agreement or any of the transactions contemplated hereby in any court other than the aforesaid courts. Each of the parties hereto hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, (a) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve in accordance with this Section 8.5, (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted by the applicable law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject mater hereof, may not be enforced in or by such courts. Section 8.6 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING BETWEEN THE PARTIES HERETO ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. Section 8.7 Notices. Any notice required to be given hereunder shall be sufficient if in writing, and sent by facsimile transmission (provided that any notice received by facsimile transmission or otherwise at the addressee's location on any Business Day after 5:00 p.m. (addressee's local time) shall be deemed to have been received at 9:00 a.m. (addressee's local time) on the next Business Day), by reliable overnight delivery service (with proof of service), hand delivery or certified or registered mail (return receipt requested and first-class postage prepaid), addressed as follows: To Parent or Merger Sub: Talon Holdings Corp. c/o Centerbridge Partners, L.P. 31 West 52nd Street New York, New York 10019 Telecopy: (212) 301-6501 Attention: Steven Price with copies to: Weil, Gotshal & Manges LLP 100 Federal Street, 34th Floor Boston, MA 02110 Telecopy: (617) 772-8333 Attention: James R. Westra -52- Weil, Gotshal & Manges LLP 200 Crescent Court, Suite 300 Dallas, TX 75201 Telecopy: (214) 746-7777 Attention: R. Jay Tabor Simpson Thacher & Bartlett LLP 425 Lexington Avenue New York, NY 10017 Telecopy: (212) 455-2502 Attention: Gary I. Horowitz Goodmans LLP 250 Yonge Street Suite 2400, Box 24 Toronto, Ontario Canada, M5B 2M6 Telecopy: (416) 979-1234 Attention: James A Riley To the Company: EGL, Inc. 15350 Vickery Drive Houston, Texas 77032 Telecopy: (281) 618-3287 Attention: General Counsel with a copy to: Andrews Kurth LLP 600 Travis Street, Suite 4200 Houston, Texas 77002 Telecopy: (713) 238 7135 Attention: Robert V. Jewell Baker Botts L.L.P. One Shell Plaza 910 Louisiana Street Houston, Texas 77002 Telecopy: (713) 229-7778 Attention: Gene J. Oshman or to such other address as any party shall specify by written notice so given, and such notice shall be deemed to have been delivered as of the date so telecommunicated, personally delivered or mailed. Any party to this Agreement may notify any other party of any changes to the address or any of the other -53- details specified in this paragraph; provided, however, that such notification shall only be effective on the date specified in such notice or five (5) Business Days after the notice is given, whichever is later. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to be receipt of the notice as of the date of such rejection, refusal or inability to deliver. Section 8.8 Assignment; Binding Effect. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties, except that, without written consent of any party hereto, (i) Merger Sub may assign, in its sole discretion, any of or all of its rights, interest and obligations under this agreement to Parent or to any direct or indirect wholly-owned subsidiary of Parent and (ii) Merger Sub and/or Parent may assign its rights hereunder as collateral security to any lender to Merger Sub and/or Parent or an Affiliate of Merger Sub and/or Parent, as the case may be, but, in each case, no such assignment shall relieve Merger Sub and/or Parent, as applicable, of its obligations hereunder. Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. Parent shall cause Merger Sub, or any assignee thereof, to perform its obligations under this Agreement. Section 8.9 Severability. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, such provision shall be interpreted to be only so broad as is enforceable. Section 8.10 Entire Agreement; No Third-Party Beneficiaries. This Agreement (including the exhibits and schedules hereto), the Confidentiality Agreement, any other confidentiality agreements entered into by co-investors in Parent, the Voting Agreement and the Guarantees constitute the entire agreement, and supersede all other prior agreements and understandings, both written and oral, between the parties, or any of them, with respect to the subject matter hereof and thereof and, except as set forth in Section 5.9, is not intended to and shall not confer upon any person other than the parties hereto any rights or remedies hereunder. Section 8.11 Amendments; Waivers. At any time prior to the Effective Time, any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by the Company (approved by the Special Committee), Parent and Merger Sub, or in the case of a waiver, by the party against whom the waiver is to be effective (and, in the case of the Company, as approved by the Special Committee); provided, however, that after receipt of Company Stockholder Approval, if any such amendment or wavier shall by applicable Law or in accordance with the rules and regulations of the NASDAQ Stock Market require further approval of the shareholders of the Company, the effectiveness of such amendment or waiver shall be subject to the approval of the shareholders of the Company. Notwithstanding the foregoing, no failure or delay by the Company or Parent in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any other right hereunder. -54- Section 8.12 Headings. Headings of the Articles and Sections of this Agreement are for convenience of the parties only and shall be given no substantive or interpretive effect whatsoever. The table of contents to this Agreement is for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Section 8.13 Interpretation. When a reference is made in this Agreement to an Article or Section, such reference shall be to an Article or Section of this Agreement unless otherwise indicated. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The word "or" shall be deemed to mean "and/or." All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant thereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. Each of the parties has participated in the drafting and negotiation of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement must be construed as if it is drafted by all the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of authorship of any of the provisions of this Agreement. Any time materiality of effect is measured with respect to the Company and its Subsidiaries, the interests not owned directly or indirectly by the Company and its wholly owned Subsidiaries shall be excluded. Section 8.14 No Recourse. This Agreement may only be enforced against, and any claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may only be made against the entities that are expressly identified as parties hereto or the Guarantors and no past, present or future Affiliate, director, officer, employee, incorporator, member, manager, partner, stockholder, agent, attorney or representative of any party hereto (other than the Guarantors) shall have any liability for any obligations or liabilities of the parties to this Agreement or for any claim based on, in respect of, or by reason of, the transactions contemplated hereby. Section 8.15 Determinations by the Company. Whenever a determination, decision or approval by the Company is called for in this Agreement, such determination, decision or approval must be authorized by the Special Committee or, if the Special Committee is not then in existence, the Company's Board of Directors. Section 8.16 Certain Definitions. For purposes of this Agreement, the following terms will have the following meanings when used herein: (a) "Affiliates" shall mean, as to any person, any other person which, directly or indirectly, controls, or is controlled by, or is under common control with, such person. As used in this definition, "control" (including, -55- with its correlative meanings, "controlled by" and "under common control with") shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise. (b) "Business Day" shall mean any day other than a Saturday, Sunday or a day on which the banks in New York are authorized by law or executive order to be closed. References in this Agreement to specific laws or to specific provisions of laws shall include all rules and regulations promulgated thereunder. (c) "Contracts" means any contracts, agreements, licenses, notes, bonds, mortgages, indentures, commitments, leases or other instruments or obligations. (d) "Knowledge" means (x) with respect to Parent, the actual knowledge of the individuals listed on Section 8.16(d)(i) of the Parent Disclosure Schedule and (y) with respect to the Company, the actual knowledge, after reasonable inquiry, of the following individuals: (i) Jim Crane (Chairman & CEO), (ii) Joe Bento (President & Chief Marketing Officer), (iii) Vittorio Favati (President - International), (iv) Greg Weigel (Chief Operating Officer), (v) Keith Winters (Chief Administrative Officer), (vi) Mike Slaughter (Chief Accounting Officer), (vii) Dana Carabin (Chief Compliance Officer, General Counsel) and (viii) Ronald E. Talley (President of The Select Carrier Group). (e) "Orders" or "orders" means any orders, judgments, injunctions, awards, decrees or writs handed down, adopted or imposed by, including any consent decree, settlement agreement or similar written agreement with, any Governmental Entity. (f) "person" or "Person" shall mean an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity, group (as such term is used in Section 13 of the Exchange Act) or organization, including a Governmental Entity, and any permitted successors and assigns of such person. (g) "Rollover Commitment" means the commitment made by a Person listed on Section 8.16(g) of the Parent Disclosure Schedule in such Person's equity rollover letter, dated as of the date hereof. (h) "Special Committee" means a committee of the Company's Board of Directors, the members of which are not affiliated with Merger Sub and are not members of the Company's management, formed for the purpose of evaluating, and making a recommendation to the full Board of Directors of the Company with respect to, this Agreement and the transactions contemplated hereby, including the Merger, and shall include any successor committee to the Special Committee existing as of the date of this Agreement or any reconstitution thereof. (i) "Subsidiaries" of any party shall mean any corporation, partnership, association, trust or other form of legal entity of which (i) more than 50% of the outstanding voting securities are on the date hereof directly or indirectly owned by such party, or (ii) such party or any Subsidiary of such party is a general partner. -56- (j) Each of the following terms is defined in the Sections set forth opposite such term: Action......................................................Section 5.9(b) Affiliate Transaction.......................................Section 3.11 Affiliates..................................................Section 8.16(a) Agreement...................................................Preamble Alternative Proposal........................................Section 5.3(h) Articles of Merger..........................................Section 1.3 Bankruptcy and Equity Exception.............................Section 3.4(a) Book-Entry Shares...........................................Section 2.2(a) Business Day................................................Section 8.16(b) Cancelled Shares............................................Section 2.1(b) Certificates................................................Section 2.2(a) Change in Board Recommendation..............................Section 5.3(d) Closing.....................................................Section 1.2 Closing Date................................................Section 1.2 Code........................................................Section 2.2(b)(iii) Company.....................................................Preamble Company Approvals...........................................Section 3.4(b) Company Benefit Plans.......................................Section 3.10(a) Company Common Stock........................................Section 2.1(a) Company Disclosure Schedule.................................ARTICLE III Company Employees...........................................Section 5.5(b)(i) Company Material Adverse Effect.............................Section 3.1(c) Company Material Contracts..................................Section 3.22(a) Company Meeting.............................................Section 5.4(b) Company Permits.............................................Section 3.8(c) Company Preferred Stock.....................................Section 3.2(a) Company Right...............................................Section 3.2(a) Company Rights Agreement....................................Section 3.2(a) Company SEC Documents.......................................Section 3.5(a) Company Shareholder Approval................................Section 3.21 Company Stock Option........................................Section 5.5(a)(i) Company Stock Plans.........................................Section 5.5(a)(i) Company Stock-Based Award...................................Section 5.5(a)(ii) Confidentiality Agreement...................................Section 5.2(b) Contracts...................................................Section 8.16(c) control.....................................................Section 8.16(a) Credit Agreement ...........................................Section 5.17 Debt Commitment Letters.....................................Section 4.4 Debt Financing..............................................Section 4.4 Dissenting Shares...........................................Section 2.1(e) Dissenting Shareholders.....................................Section 2.1(e) Effective Time..............................................Section 1.3 Employees...................................................Section 3.16 End Date....................................................Section 7.1(b)(i) -57- Environmental Law...........................................Section 3.9(b) Equity Commitment Letters...................................Section 4.4 ERISA.......................................................Section 3.10(a) ERISA Affiliate.............................................Section 3.10(h) Exchange Act................................................Section 3.4(b) Exchange Fund...............................................Section 2.2(a) Excluded Shares.............................................Section 2.1(e) Expenses....................................................Section 7.2(a)(iii) Financing...................................................Section 4.4 Financing Commitments.......................................Section 4.4 GAAP........................................................Section 3.5(b) Governmental Entity.........................................Section 3.4(b) Guarantees..................................................Recitals Guarantors..................................................Recitals Hazardous Substance.........................................Section 3.9(c) HSR Act.....................................................Section 3.4(b) Indemnified Party...........................................Section 5.9(b) Intellectual Property.......................................Section 3.17 Knowledge...................................................Section 8.16(d) Law.........................................................Section 3.8(a) Laws........................................................Section 3.8(a) Lien........................................................Section 3.3 Merger......................................................Recitals Merger Consideration........................................Section 2.1(a) Merger Sub..................................................Preamble Multiemployer Plan..........................................Section 3.10(h) New Financing Commitments...................................Section 5.10 New Plans...................................................Section 5.5(b)(ii) Notes.......................................................Section 1.2 Notes Purchase Agreement....................................Section 5.17 Old Plans...................................................Section 5.5(b)(ii) Option and Stock-Based Consideration........................Section 5.5(a)(ii) Option Consideration........................................Section 5.5(a)(i) Orders......................................................Section 8.16(e) orders......................................................Section 8.16(e) Parent......................................................Preamble Parent Approvals............................................Section 4.2(b) Parent Disclosure Schedule..................................ARTICLE IV Parent Material Adverse Effect..............................Section 4.1(b) Parent Termination Fee......................................Section 7.2(b) Paying Agent................................................Section 2.2(a) person......................................................Section 8.16(f) Person......................................................Section 8.16(f) Purchase Plan Shares........................................Section 5.5(a)(iv) Proxy Statement.............................................Section 3.14 Recommendation..............................................Section 3.4(a) -58- Regulatory Law..............................................Section 5.6(d) Remaining Shares............................................Section 2.1(a) Representatives.............................................Section 5.3(a) Restricted Shares...........................................Section 5.5(a)(iii) Rollover Commitment.........................................Section 8.16(g) Sarbanes-Oxley Act..........................................Section 3.6 SEC.........................................................Section 3.5(a) Securities Act..............................................Section 3.3 Share.......................................................Section 2.1(a) Schedule 13E-3..............................................Section 3.14 Solvent.....................................................Section 4.13 Special Committee...........................................Section 8.16(h) Stock Purchase Plan.........................................Section 3.2(a) Subsidiaries................................................Section 8.16(i) Superior Proposal...........................................Section 5.3(i) Surviving Corporation.......................................Section 1.1 Tax Return..................................................Section 3.15(b) Taxes.......................................................Section 3.15(b) TBCA........................................................Section 1.1 TBOC........................................................Section 1.1 Termination Date............................................Section 5.1(a) Termination Fee.............................................Section 7.2(a) Voting Agreement............................................Recitals WARN Act....................................................Section 3.16 -59- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written. TALON HOLDINGS CORP. By: /s/ James R. Crane ------------------------------------ Name: James R. Crane Title: President TALON ACQUISITION CO. By: /s/ James R. Crane ------------------------------------ Name: James R. Crane Title: President EGL, INC. By: /s/ Dana Carabin ------------------------------------ Name: Dana Carabin Title: Secretary & General Counsel [SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER] EX-7 12 mm03-1907_sc13da3e715.txt EX. 7.15 EXHIBIT 7.15 ------------ VOTING AGREEMENT ---------------- VOTING AGREEMENT, dated as of March 18, 2007 (this "Agreement"), among Talon Holdings Corp., a Delaware corporation ("Parent"), Talon Acquisition Co., a Texas corporation and a wholly-owned Subsidiary of Parent ("Merger Sub") and James R. Crane ("Shareholder"). RECITALS -------- Parent, Merger Sub and the EGL, Inc., a Texas corporation (the "Company"), propose to enter into an Agreement and Plan of Merger dated as of the date hereof (as the same may be amended or supplemented, the "Merger Agreement"; capitalized terms used but not defined herein shall have the meanings set forth in the Merger Agreement as entered into on the date hereof) providing for the merger of Merger Sub with and into the Company (the "Merger"), upon the terms and subject to the conditions set forth in the Merger Agreement. As of the date hereof, Shareholder is the record and beneficial owner of the number of shares of the Company common stock set forth on the signature page hereof beneath Shareholder's name (the "Existing Shares" and, together with any shares of the Company common stock acquired after the date hereof, whether upon the exercise of warrants, options, conversion of convertible securities or otherwise, Shareholder's "Shares"). As an inducement and a condition to entering into the Merger Agreement, Parent and Merger Sub have required that Shareholder agrees, and Shareholder has agreed, to enter into this Agreement. AGREEMENT --------- To implement the foregoing and in consideration of the mutual agreements contained herein, the parties agree as follows: 1. Agreement to Vote. (a) Shareholder hereby agrees that, from and after the date hereof and until this Agreement shall have been terminated in accordance with Section 6, at any meeting of the holders of Company common stock, however called, or in connection with any written consent of the holders of Company common stock, Shareholder shall vote (or cause to be voted) Shareholder's Shares (i) in favor of adoption and approval of the Merger Agreement and the Merger and the approval of the terms thereof and each of the other actions contemplated by the Merger Agreement and this Agreement and (ii) except as otherwise agreed to in writing in advance by Parent, against the following actions (other than the Merger and the transactions contemplated by the Merger Agreement): (A) any extraordinary corporate transaction, such as a merger, consolidation or other business combination involving the Company or its Subsidiaries; (B) a sale, lease or transfer of a material amount of assets of the Company or its Subsidiaries, or a reorganization, recapitalization, dissolution or liquidation of the Company or its Subsidiaries; (C) any other action involving the Company or its Subsidiaries which has the effect of impeding, interfering with, delaying, postponing, or impairing (A) the ability of the Company to consummate the Merger or (B) the transactions contemplated by this Agreement and the Merger Agreement. Shareholder shall not enter into any agreement or understanding with any person or entity prior to the termination of this Agreement to vote in any manner inconsistent herewith. (b) SHAREHOLDER HEREBY GRANTS TO, AND APPOINTS, PARENT AND ANY DESIGNEE OF PARENT, AND EACH OF THEM INDIVIDUALLY, SHAREHOLDER'S IRREVOCABLE (UNTIL THE TERMINATION DATE) PROXY AND ATTORNEY-IN-FACT (WITH FULL POWER OF SUBSTITUTION) TO VOTE THE SHARES AS INDICATED IN SECTION 1(a). SHAREHOLDER INTENDS THIS PROXY TO BE IRREVOCABLE (UNTIL THE TERMINATION DATE) AND COUPLED WITH AN INTEREST AND WILL TAKE SUCH FURTHER ACTION OR EXECUTE SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO EFFECTUATE THE INTENT OF THIS PROXY AND HEREBY REVOKES ANY PROXY PREVIOUSLY GRANTED BY SHAREHOLDER WITH RESPECT TO THE SHARES. THE PROXY GRANTED BY SHAREHOLDER PURSUANT TO THIS SECTION 1(b) IS GRANTED IN ORDER TO SECURE SHAREHOLDER'S PERFORMANCE UNDER THIS AGREEMENT AND ALSO IN CONSIDERATION OF PARENT AND MERGER SUB ENTERING INTO THIS AGREEMENT AND THE MERGER AGREEMENT. IF SHAREHOLDER FAILS FOR ANY REASON TO BE COUNTED AS PRESENT AND VOTE SHAREHOLDER'S SHARES IN ACCORDANCE WITH THE REQUIREMENTS OF SECTION 1(a) (OR ANTICIPATORILY BREACHES SUCH SECTION), THEN PARENT OR ITS DESIGNEES SHALL HAVE THE RIGHT TO CAUSE TO BE PRESENT OR VOTE SHAREHOLDER'S SHARES IN ACCORDANCE WITH SECTION 1(a). THE PROXY GRANTED BY THIS SECTION 1(b) SHALL BE AUTOMATICALLY REVOKED UPON TERMINATION OF THIS AGREEMENT IN ACCORDANCE WITH ITS TERMS. 2. Representations and Warranties of Shareholder. Shareholder hereby represents and warrants to Parent and Merger Sub as of the date hereof as follows: (a) Authorization; Validity of Agreement; Necessary Action. Shareholder has full power and authority to execute and deliver this Agreement, to perform Shareholder's obligations hereunder and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by Shareholder, and, assuming this Agreement constitutes a valid and binding obligation of Parent and Merger Sub, constitutes a valid and binding obligation of Shareholder, enforceable against him in accordance with its terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency or other similar laws, now or hereafter in effect, affecting creditors' rights generally, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. (b) Consents and Approvals; No Violations. Except for filings, permits, authorizations, consents and approvals as may be required under, and other applicable requirements of, federal securities laws, the HSR Act, or any applicable state takeover laws, neither the execution, delivery or performance of this Agreement by Shareholder nor the consummation by it of the transactions contemplated hereby nor compliance 2 by it with any of the provisions hereof will (i) require any filing with, or permit, authorization, consent or approval of, any Governmental Entity (except where the failure to obtain such permits, authorizations, consents or approvals or to make such filings would not materially impair the ability of Shareholder to consummate the transactions contemplated hereby), (ii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration) under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, guarantee, other evidence of indebtedness, lease, license, contract, agreement or other instrument or obligation to which Shareholder is a party or by which it or any of its properties or assets may be bound or (iii) violate any order, writ, injunction, decree, statute, rule or regulation applicable to it or any of its properties or assets, except in the case of clauses (ii) and (iii) for violations, breaches or defaults, or rights of termination, amendment, cancellation or acceleration, which would not materially impair the ability of Shareholder to consummate the transactions contemplated hereby. (c) Shares. Shareholder's Existing Shares are owned beneficially and of record by Shareholder. Shareholder's Existing Shares, together with (i) 87,000 options to acquire Company common stock held by Shareholder, (ii) 30,000 shares of Company common stock beneficially owned by Shareholder as a result of his affiliation with the James R. Crane foundation, (iii) 4,500 shares of Company common stock that carry a disposition restriction and (iv) 3,000 shares of Company common stock held in separate 1,500 share joint tenancies with Crystal Crane and Jared Crane, respectively, constitute all of the shares of Company common stock owned of record or beneficially by Shareholder. Shareholder has sole voting power, sole power of disposition, sole power to issue instructions with respect to the matters set forth in Section 1 hereof, sole power of conversion, sole power to demand appraisal rights and sole power to agree to all of the matters set forth in this Agreement, in each case with respect to all of Shareholder's Existing Shares with no limitations, qualifications or restrictions on such rights, subject to applicable federal securities laws and the terms of this Agreement. Shareholder has good and valid title to its Existing Shares, free and clear of all liens, claims, security interests or other charges or encumbrances. 3. Representations and Warranties of Parent. Parent and Merger Sub hereby represent and warrant to Shareholder as of the date hereof as follows: (a) Organization. Each of Parent and Merger Sub is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation. (b) Corporate Authorization; Validity of Agreement; Necessary Action. Each of Parent and Merger Sub has full corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance by each of Parent and Merger Sub of this Agreement and the consummation by 3 each of Parent and Merger Sub of the transactions contemplated hereby have been duly and validly authorized by its board of directors, and no other corporate action or proceedings on the part of Parent or Merger Sub are necessary to authorize the execution and delivery by Parent or Merger Sub of this Agreement, and the consummation by Parent or Merger Sub of the transactions contemplated hereby. This Agreement has been duly executed and delivered by Parent and Merger Sub, and, assuming this Agreement constitutes a valid and binding obligation of the Shareholders, constitutes valid and binding obligations of Parent and Merger Sub, enforceable against them in accordance with its terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency or other similar laws, now or hereafter in effect, affecting creditors' rights generally, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. (c) Consents and Approvals; No Violations. Except for filings, permits, authorizations, consents and approvals as may be required under, and other applicable requirements of, federal securities laws, the HSR Act, any applicable state takeover laws, neither the execution, delivery or performance of this Agreement by Parent or Merger Sub nor the consummation by Parent or Merger Sub of the transactions contemplated hereby nor compliance by Parent or Merger Sub with any of the provisions hereof will (i) conflict with or result in any breach of any provision of the organizational documents of Parent or any of its Subsidiaries, (ii) require any filing with, or permit, authorization, consent or approval of, any Governmental Entity, (iii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration) under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, guarantee, other evidence of indebtedness, lease, license, contract, agreement or other instrument or obligation to which Parent or Merger Sub is a party or by which it or any of its properties or assets may be bound or (iv) violate any order, writ, injunction, decree, statute, rule or regulation applicable to Parent, any of its Subsidiaries or any of their properties or assets. 4. Further Agreements of Shareholders. (a) Shareholder, severally and not jointly, hereby agrees, while this Agreement is in effect, and except as contemplated hereby, not to (i) sell, transfer, pledge, encumber, assign or otherwise dispose of, enforce or permit the execution of the provisions of any redemption agreement with the Company or enter into any contract, option or other arrangement or understanding with respect to or consent to the offer for sale, sale, transfer, pledge, encumbrance, assignment or other disposition of, any of its Existing Shares, or any Shares acquired after the date hereof, or any interest in any of the foregoing, except to Parent; (ii) grant any proxies or powers of attorney, deposit any Shares into a voting trust or enter into a voting agreement with respect to any Shares, or any interest in any of the foregoing, except to Parent or Merger Sub; or (iii) take any action that would make any representation or warranty of Shareholder contained herein untrue or incorrect or have the effect of preventing or disabling Shareholder from performing Shareholder's obligations under this Agreement. 4 (b) Shareholder hereby irrevocably waives any rights of appraisal or rights to dissent from the Merger that Shareholder may have. (c) Shareholder hereby authorizes Parent, Merger Sub and the Company to publish and disclose in any announcement or disclosure required by the Securities and Exchange Commission or other Governmental Entity Shareholder's identity and ownership of Shares and the nature of Shareholder's obligation under this Agreement. (d) Shareholder agrees with, and covenants to, Parent that Shareholder shall not request that the Company register the transfer (book-entry or otherwise) of any certificate or uncertificated interest representing any of Shareholder's Shares, unless such transfer is made in compliance with this Agreement. In the event of a stock dividend or distribution, or any change in the Company common stock by reason of any stock dividend or distribution, or any change in the Company common stock by reason of any stock dividend, split-up, recapitalization, combination, exchange of shares or the like, the term "Shares" shall be deemed to refer to and include the Shares as well as all such stock dividends and distributions and any shares into which or for which any or all of the Shares may be changed or exchanged. Shareholder shall be entitled to receive any cash dividend paid by the Company during the term of this Agreement until the Shares are cancelled in the Merger or purchased hereunder. (e) Shareholder shall not, and shall direct its Representatives not to, directly or indirectly, (i) initiate, solicit, knowingly encourage (including by providing information) or facilitate any inquiries, proposals or offers with respect to, or the making or completion of, an Alternative Proposal or (ii) engage or participate in any negotiations concerning, or provide or cause to be provided any non-public information or data relating to the Company or any of its Subsidiaries, in connection with, or have any discussions with any person relating to, an actual or proposed Alternative Proposal, or otherwise knowingly encourage or facilitate any effort or attempt to make or implement an Alternative Proposal; provided, however, that nothing set forth in this Agreement shall prohibit such Shareholder or Representative who is a Representative of the Company from taking all actions in connection with such Alternative Proposal that the Company and its Representatives are permitted to take under Section 5.2 of the Merger Agreement. Notwithstanding anything in this Agreement to the contrary, from and after the date hereof, each Shareholder agrees that it will promptly (and in any event within 24 hours) advise Parent orally and in writing of (i) its receipt of any Alternative Proposal, (ii) the identity of the person making any such Alternative Proposal and (iii) the material terms of any such Alternative Proposal or indication or inquiry (including copies of any documents or correspondence evidencing such Alternative Proposal or inquiry). 5. Further Assurances. From time to time, at any other party's request and without further consideration, each party hereto shall execute and deliver such additional documents and take all such further lawful action as may be necessary or desirable to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement. 6. Termination. This Agreement shall terminate, and no party shall have any rights or obligations hereunder and this Agreement shall become null and void and have no further effect upon the earliest of (a) the Effective Time and (b) the date of the termination of the Merger Agreement in accordance with 5 its terms (any such date shall be referred to herein as the "Termination Date"). Nothing in this Section 6 shall relieve any party of liability for a willful breach of this Agreement prior to the Termination Date. 7. Costs and Expenses. All costs and expenses incurred in connection with this Agreement and the consummation of the transactions contemplated hereby shall be paid by the party incurring such expenses. 8. Amendment and Modification. This Agreement may be amended, modified and supplemented in any and all respects only by written agreement executed and delivered by duly authorized officers of the respective parties. 9. Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, telecopied (which is confirmed) or sent by an overnight courier service to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): (i) if to Parent, to: Talon Holdings Corp. c/o Centerbridge Partners, L.P. 31 West 52nd Street New York, New York 10019 Telecopy: (212) 301-6501 Attention: Steven Price with a copy to: Simpson Thacher & Bartlett LLP 425 Lexington Avenue New York, NY 10017 Telecopy: (212) 455-2502 Attention: Gary I. Horowitz Goodmans LLP 250 Yonge Street Suite 2400, Box 24 Toronto, Ontario Canada, M5B2M6 Attention: James A Riley Fax: (416) 979-1234 6 (ii) if to Shareholder, to: James R. Crane c/o EGL, Inc. 15340 Vickery Drive Houston, Texas 77032 with a copy to: Weil, Gotshal & Manges LLP 100 Federal Street, 34th Floor Boston, MA 02110 Telecopy: (617) 772-8333 Attention: James R. Westra Weil, Gotshal & Manges LLP 200 Crescent Court, Suite 300 Dallas, TX 75201 Telecopy: (214) 746-7777 Attention: R. Jay Tabor 10. Interpretation. When a reference is made in this Agreement to Sections, such reference shall be to a Section of this Agreement unless otherwise indicated. Whenever the words "include", "includes" or "including" are used in this Agreement they shall be deemed to be followed by the words "without limitation". 11. Counterparts. This Agreement may be executed in any number of counterparts (including by facsimile), each such counterpart being deemed to be an original instrument, and all such counterparts shall together constitute the same agreement. 12. Entire Agreement; No Third Party Beneficiaries. This Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof, and is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder. 13. Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction. 7 14. Specific Performance; Remedies Cumulative. (a) The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the terms hereof and that the parties shall be entitled to the remedy of specific performance of the terms hereof, in addition to any other remedy at law or equity. (b) Remedies Cumulative. All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise of any thereof by any party shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such party. 15. Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of Delaware without giving effect to the principles of conflicts of law thereof. 16. Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties, except that Parent may assign, in its sole discretion, any or all of its rights, interests and obligations hereunder to any direct or indirect wholly owned Subsidiary of Parent; provided, however, that no such assignment shall relieve Parent from any of its obligations hereunder. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. 17. Action in Shareholder Capacity Only. The parties acknowledge that this agreement is entered into by Shareholder solely in Shareholder's capacity as the beneficial owner of Shareholder's Shares and nothing in this Agreement restricts or limits any action taken by Shareholder in his capacity as a director or officer of the Company or any of it Subsidiaries and the taking of any actions (or failure to act) in his capacity as an officer or director of the Company or its Subsidiaries will not be deemed to constitute a breach of this Agreement. 18. Consent to Jurisdiction; Waiver of Jury Trial. (a) Each of the parties hereto: (i) consents to submit itself to the personal jurisdiction of the courts of the State of Delaware and the Federal courts of the United States of America located in the State of Delaware in the event any dispute arises out of this Agreement or any of the transactions contemplated by this Agreement; (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction or venue by motion or other request for leave from any such court; (iii) agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than such courts; and (iv) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to a party at its address set forth in Section 9 or at such other address of which a party shall have been notified pursuant thereto; 8 (v) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and (vi) agrees to appoint an agent for service of process in Delaware. (B) EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING IN RELATION TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN. 19. Negotiated Terms. The provisions of this Agreement are the result of negotiations between the parties. Accordingly, this Agreement shall not be construed in favor of or against any party by reason of the extent to which the party or any of its professional advisors participated in its preparation. [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.] 9 IN WITNESS WHEREOF, Parent, Merger Sub and Shareholder have caused this Agreement to be executed as of the date first written above. TALON HOLDINGS CORP. By: /s/ James R. Crane ----------------------------- Name: James R. Crane Title: President TALON ACQUISITION CO. By: /s/ James R. Crane ----------------------------- Name: James R. Crane Title: President 10 /s/James R. Crane ------------------------------------ James R. Crane Existing Shares: 7,065,063 [SIGNATURE PAGE TO VOTING AGREEMENT] EX-7 13 mm03-1907_sc13da3e716.txt EX. 7.16 EXHIBIT 7.16 ------------ - -------------------------------------------------------------------------------- JAMES R. CRANE THE WOODBRIDGE COMPANY LIMITED 65 QUEEN STREET WEST SUITE 2400 TORONTO CANADA M5H 2M8 - -------------------------------------------------------------------------------- CENTERBRIDGE CAPITAL PARTNERS, L.P. CENTERBRIDGE CAPITAL PARTNERS STRATEGIC, L.P. CENTERBRIDGE CAPITAL PARTNERS BS, L.P. C/O CENTERBRIDGE PARTNERS, L.P. 31 WEST 52ND STREET, 16TH FLOOR NEW YORK, NY 10019 - -------------------------------------------------------------------------------- March 18, 2007 Ladies and Gentlemen: Reference is made to that certain Agreement and Plan of Merger, dated as of March 18, 2007 (the "Merger Agreement"), by and among Talon Holdings Corp., a Delaware corporation ("Parent"), Talon Acquisition Co., a Texas corporation and wholly-owned subsidiary of Parent ("Merger Sub"), and EGL, Inc., a Texas corporation (the "Company"), which provides for the merger (the "Merger") of Merger Sub with and into the Company. Capitalized terms used and not otherwise defined herein will have the definitions ascribed to them in the Merger Agreement. This letter agreement (this "Agreement") sets forth the agreement among Centerbridge Partners, L.P. (with its affiliated funds, "Centerbridge"), The Woodbridge Company Limited (with its affiliates, "Woodbridge") and James R Crane ("Crane", and together with Woodbridge and Centerbridge, each an "Investor Party" and collectively the "Investor Parties") with respect to actions of Parent prior to the closing of the Merger Agreement and certain other matters. 1. Decision Making Pre-Closing. (a) From the date hereof until the Closing (or the earlier termination of the Merger Agreement in accordance with its terms), all actions and decisions relating to the Merger Agreement, any related agreements, the financing arrangements (the "Financing Arrangements") and the transactions contemplated by the Merger Agreement (collectively, the "Transactions"), including any negotiations relating to any of the foregoing (including, without limitation, (i) structuring, selection and arrangements for retention of management, (ii) definitive documentation relating to the Financing Arrangements, and (iii) under the Merger Agreement, amendments thereof and waivers and consents, exercise of termination rights, antitrust and other regulatory approvals), except as otherwise explicitly provided herein, shall require the approval of each Investor Party; provided, however, that (A) no Investor Party shall unreasonably withhold or delay its authorization and approval of any action to the extent Parent is not permitted to unreasonably withhold or delay its consent or approval under the Merger Agreement and (B) consent of the Investor Parties is not necessary for any action that Parent is 11 required to take or perform pursuant to the Merger Agreement. Parent shall not take any action with respect to the Transactions unless such actions are in accordance with this Agreement. Each of the Investor Parties will be entitled to receive from Parent all notices and other deliveries received by Parent under the Merger Agreement and the Financing Arrangements, and will participate to the same extent in the delivery of notices to the Company and the financing sources. 2. Equity Commitments; Capital Structure. (a) Each Investor Party, on behalf of itself and its affiliates, hereby affirms and agrees that it is bound by the provisions set forth in its Equity Commitment Letter, dated of even date herewith (as to each Investor Party, its "Equity Commitment Letter"). With respect to the Equity Commitment Letter of each Investor Party, the other Investor Parties, acting together, shall have the power and authority to cause Parent to take any action with respect to such Equity Commitment Letter; provided, however, that each other Investor Party, acting without the consent or joinder of any other Investor Party, shall have the power and authority to cause Parent to enforce the terms and conditions of the Equity Commitment Letter of any other Investor Party. (b) Each Investor Party, on behalf of itself and its affiliates, agrees to vote its shares of Parent capital stock to cause Parent to create such classes of capital stock and other securities as are approved by the Investor Parties and to cause Parent to issue shares of such classes and other securities to the Investor Parties in accordance with the Investor Parties' respective Equity Commitment Letters and the term sheet attached on Annex A hereto. The Investor Parties shall negotiate and enter into and cause Parent to enter into (effective not later than the Closing) a Stockholders Agreement having the terms set forth in the term sheet attached as Annex A hereto (the "Stockholder Term Sheet") and otherwise having such terms as are reasonably satisfactory to the Investor Parties and cause Parent to be governed by a charter and bylaws, in each case having terms consistent with Annex A hereto and otherwise having such terms as are reasonably satisfactory to the Investor Parties. (c) No Investor Party may syndicate its equity commitment to co-investors without the consent of the other Investor Parties; provided, however, that an Investor Party may assign its rights and obligations hereunder to any person who is an affiliated fund without the consent of any other Investor Party. The parties also acknowledge and agree that Crane may syndicate all or a portion of the cash portion of his equity commitment set forth in his Equity Commitment Letter on terms reasonably acceptable to the other Investor Parties. Such syndication shall not relieve Crane of his obligations hereunder nor under his Equity Commitment Letter and Guarantee (referred to in his Equity Commitment Letter). 3. Voting Agreement. Each of the other Investor Parties, acting together, shall have the authority to cause Parent to take any action with respect to the Voting Agreement, dated of even date herewith, entered into among Crane, Parent and Merger Sub. 4. Transaction Expenses; Termination Fee. 2 (a) Except as otherwise provided in this Agreement, each Investor Party agrees to bear its own expenses and legal fees and consulting fees in connection with the Transactions. (b) Any fees and expenses incurred in connection with the Financing Arrangements and fees and expenses incurred in connection with filings by Parent under the Hart-Scott Rodino Antitrust Improvements Act of 1976 or any other regulatory laws in connection with the Transactions shall be borne by each of the Investor Parties in accordance with its proportionate Economic Contribution. For purposes of this Agreement "Economic Contribution" shall mean with respect to Centerbridge 32.7%, with respect to Woodbridge 16.3%; and with respect to Crane 51%, which represents the percentage amounts of capital to be contributed to Parent by each Investor Party in accordance with its Equity Commitment Letter regardless of any permitted assignment of such Investor's commitment under its Equity Commitment Letter. (c) If the Merger is consummated, the Investor Parties will cause Parent or the Company to pay all of the costs referred to in Sections 4(a) and (b) and/or to reimburse each Investor Party for any such costs already expended. (d) In the event the Company is required to pay a Termination Fee or any reimbursement of Expenses to Parent under Section 7.2 of the Merger Agreement, such payment shall be allocated (i) first, to pay all of the costs and expenses referred to in Sections 4(a) and 4(b) and/or to reimburse each Investor Party (pro-rata in accordance with the Economic Contribution of each Investor Party) for any such costs already expended and (ii) thereafter, to each Investor Party, in accordance with Economic Contribution of each Investor Party. 5. Damages; Reverse Termination Fee. In the event that Parent is required to make any monetary damages payment or pay any reverse termination fee to the Company in connection with the Merger Agreement (or the Investor Parties make any payment in respect of the Guarantees, dated of event date herewith, executed by each of the Investor Parties in favor of the Company in connection with the Merger Agreement (each a "Guarantee" and collectively, the "Guarantees") each of the Investor Parties shall be responsible for its pro-rata portion (based upon its Economic Contribution) of any such payment. 6. Merger Agreement Covenants. Each Investor Party will undertake to cause Parent to perform its obligations and covenants under the Merger Agreement. 7. Information Supplied. Each Investor Party hereby represents, warrants and covenants that none of the information supplied in writing by such Investor Party for inclusion or incorporation by reference in the Company's Proxy Statement, the Schedule 13E-3 or any other filings with any governmental authority in connection with the Transactions will cause a breach of the representation and warranty of Parent set forth in Section 4.3 of the Merger Agreement. 8. Confidentiality. Each Investor Party (on behalf of itself and its affiliates) agrees that it will not, nor will it permit its advisors or affiliates to, disclose to any of its portfolio investments any information that 3 the Investor Party or its affiliates or advisors obtain by virtue of the Investor Party's (or its affiliated investors') relationship with the Company or Parent, including in its capacity as shareholder or director. 9. Termination. This letter agreement shall terminate and be of no further force and effect upon the earlier of (i) the agreement of all of the Investor Parties, (ii) the closing of the Merger or (iii) the termination of the Merger Agreement in accordance with its terms; provided, however, that Sections 4, 5 and 8 shall survive termination of this Agreement. 10. Amendment. This Agreement may be amended or modified and the provisions hereof may be waived, only by an agreement in writing signed by each of the Investor Parties. 11. Remedies. The parties hereto agree that this Agreement will be enforceable by all available remedies at law or in equity (including, without limitation, specific performance). 12. Governing Law; Consent to Jurisdiction. This Agreement shall be governed by and construed in accordance with, the laws of the State of New York applicable to contracts executed in and to be performed in that State. All actions arising out of or relating to this Agreement shall be heard and determined exclusively in any New York state or federal court. The parties hereto hereby (a) submit to the exclusive jurisdiction of any Delaware state or federal court for the purpose of any action arising out of or relating to this Agreement brought by any party hereto, and (b) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the action is brought in an inconvenient forum, that the venue of the action is improper, or that this Agreement or the transactions contemplated hereby may not be enforced in or by any of the above-named courts. 13. Representations and Warranties. Each of the Investor Parties hereby represents and warrants to the others (on behalf of such Investor Party only) that (a) it has the requisite power and authority to execute, deliver and perform this Agreement, (b) the execution, delivery and performance of this Agreement by it have been duly authorized by all necessary action on the part of such Investor Party and no additional proceedings are necessary to approve this Agreement, and (c) this Agreement has been duly executed and delivered by it and constitutes a valid and binding agreement of it enforceable in accordance with the terms hereof. Each of the Investor Parties further represents and warrants to the others (on behalf of such Investor Party only) that its execution, delivery and performance of this Agreement will not (1) conflict with, require a consent, waiver or approval under, or result in a breach of or default under, any of the terms of any contract to which such person is a party or by which such person is bound; (2) violate any order, writ, injunction, decree or statute, or any rule or regulation, applicable to such person or any of the properties or assets of such person; or (3) result in the creation of, or impose any obligation on such person to create, any lien, charge or other encumbrance of any nature whatsoever upon such person's properties or assets. 4 14. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. 15. Exercise of Rights and Remedies; No Third Party Beneficiary Rights. No delay of or omission in the exercise of any right, power or remedy accruing to any party as a result of any breach or default by any other party under this Agreement shall impair any such right, power or remedy, nor shall it be construed as a waiver of or acquiescence in any such breach or default, or of any similar breach or default occurring later; nor shall any such delay, omission nor waiver of any single breach or default be deemed a waiver of any other breach or default occurring before or after that waiver. Nothing contained herein, express or implied, is intended to confer upon any person other than the Investors Parties (and their respective affiliated Investors) any rights or remedies hereunder or by reason hereof. 16. Assignments. Other than as provided herein, the rights and obligations of the Investor Parties hereunder shall not be assigned without the consent of the other Investor Parties. 17. Shareholder Capacity. Crane shall not be deemed to make any agreement or understanding in this Agreement in his capacity as a director or officer of the Company. Crane is entering into this Agreement solely in his individual capacity, and nothing herein shall limit or affect any actions taken by him in his capacity as a director or officer of the Company. 18. Public Statements. No Investor Party, individually or on behalf of Parent, shall issue or cause the publication of any press release or other public announcement with respect to this Agreement, the Merger Agreement, the Merger or the other Transactions without prior consultation with and approval by the other Investor Parties, except as may be required by applicable law, in which case reasonable prior notice shall be given to the other Investor Parties. 19. No Recourse. Notwithstanding anything that may be expressed or implied in this Agreement, and notwithstanding the fact that certain of the investors in the Investor Parties may be partnerships or limited liability companies, each Investor Party covenants, agrees and acknowledges that no recourse under this Agreement or any documents or instruments delivered in connection with this Agreement shall be had against any current or future director, officer, employee, general or limited partner or member or manager of any Investor Party or of any partner, member, manager or affiliate thereof, as such, 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 personal liability whatsoever shall attach to, be imposed on otherwise be incurred by any current or future director, officer, employee, general or limited partner or member or manager of any investor or of any partner, member, manager or affiliate thereof, as such, for any obligation of any investor under this Agreement or any documents or 5 instruments delivered in connection with this Agreement for any claim based on, in respect of or by reason of such obligations or their creation. 20. Other Agreements. This Agreement, together with the agreements referenced herein, constitutes the entire agreement, and supersedes all prior agreements, understandings and statements, both written and oral, among the parties or any of their affiliates with respect to the subject matter contained herein. 21. Limitation of Liability. Notwithstanding anything to the contrary in this Agreement, no Investor Party shall be liable for amounts in excess of the equity commitment of such Investor Party as set forth in its Equity Commitment Letter. 22. Counterparts. This Agreement may be executed in any number of counterparts, all of which will be one and the same agreement. [Signature pages follow] 6 /s/ James R. Crane --------------------------------------------- James R. Crane (Signature page continued on following page) 7 THE WOODBRIDGE COMPANY LIMITED By: /s/ Sarah Lerchs ------------------------------------ Name: Sarah Lerchs Title: Senior Counsel (Signature page continued on following page) 8 CENTERBRIDGE CAPITAL PARTNERS, L.P. By: Centerbridge Associates, L.P., its general partner By: Centerbridge GP Investors, LLC, its general partner By: /s/ Steven Price ---------------------------------- Name: Steven Price Title: Senior Managing Director CENTERBRIDGE CAPITAL PARTNERS STRATEGIC, L.P. By: Centerbridge Associates, L.P., its general partner By: Centerbridge GP Investors, LLC, its general partner By: /s/ Steven Price ---------------------------------- Name: Steven Price Title: Senior Managing Director CENTERBRIDGE CAPITAL PARTNERS SBS, L.P. By: Centerbridge Associates, L.P., its general partner By: Centerbridge GP Investors, LLC, its general partner By: /s/ Steven Price ---------------------------------- Name: Steven Price Title: Senior Managing Director 9 -----END PRIVACY-ENHANCED MESSAGE-----